Thatโs the dream, right?
No dragging your butt out of bed at an ungodly hour, sitting in traffic, being stuck inside an office all day, and slaving away your life for a measly paycheck.
Instead, wake up whenever you feel like it, saunter over to the laptop in your skivvies, and sip a cup of java while you โwork.โ Take a vacation whenever you want, spend time with your loved ones, and travel the freakinโ world.
Hell, yeahโฆ
Too bad itโs just a fairytale, though. Weโve all seen the scammy ads about making $80 an hour filling out surveys, starting your own online store in a โvirtual mall,โ making megabucks from reselling old crap on eBay or Amazon. There are a gazillion different variations, all of them promising you easy money, all of them stoking your hope of a better life, all of them a little too ridiculous for you to believe in, even though you really, REALLY want to believe.
But youโre not a fool. You know theyโre not telling you the truth. It canโt be as easy as they make it sound.
And youโre right. Iโve made my living on the Internet for eight years now, and while itโs certainly nice, thereโs also a lot nobody is telling you. Not because itโs a secret, but because most people donโt actually want the truth. They want to believe itโs easy, fun, straightforward.
If anything though, itโs the opposite, and that brings us to the first lesson:
Lesson #1: You canโt do this in your โspare time.โ
Regardless of whether youโre starting a blog, building an online course, or creating your own virtual storefront, you probably donโt think of it as a โbusiness.โ Itโs a project, a hobby, a โside hustle.โ No offices, no employees, no budgets or business plans โ itโs just you tinkering around in your spare time.
Right?
Wellโฆ not if you want to succeed.
In my experience, people who make a nice living online view it as a business from day one. That doesnโt necessarily mean they get an office or hire employees, but they approach it with the same mindset any sane person would have when starting any other type of business.
For instance, letโs say youโre starting a dry-cleaning business. Youโd probably go to work for another dry cleaner first, learn the craft, figure out how you would do things differently, save your money, and then launch your own competing dry-cleaning business with a solid understanding of the market and what it takes to succeed.
In other words, you would put serious thought and effort into it, start preparing months or even years in advance and work your ass off for several years to make the business take off. Thatโs a normal mindset for anyone starting a new venture.
For some reason though, peopleโs mindset is entirely different when thinking about how to make money blogging. They are looking for quick and easy, not hard and long. They want a way to game the system, not a way to win the game. They try to minimize their investment of time and money, not maximize their ROI.
And Iโll be straight with you:
Thatโs dumb.
Making money on the Internet is just as difficult as making money in any other type of business. The capital requirements arenโt as high as opening a brick-and-mortar store like a dry-cleaning business or a restaurant, meaning itโs easier to get started, but youโre also facing global competition. Youโll need to be better, smarter, and faster than entrepreneurs only competing in their local markets.
The only appropriate mindset is to accept that you are investing years of your life and every penny of your savings into a venture that might ultimately fail. If it does succeed, itโs also not going to be because of your creative genius or some magical technology that makes money pop out of your computer. Itโs going to be because of hard work, sound thinking, and skill.
Especially skill. Letโs talk about that nextโฆ
Lesson #2: Being smart isnโt enough.
Weโve all heard the story of the stereotypical Internet entrepreneur. Some smart kid sees an opportunity nobody else does, works night and day to create a groundbreaking product, and then goes on to become filthy stinking rich. In other words, the equation is something like this:
Smart + opportunity + hard work = success.
And thatโs a beautiful story. Like many stories, itโs also mostly true, but itโs missing some important details.
To make money online, you do need to be smart, you need to find an opportunity, and you need to work hard. All those variables are totally accurate. What no one tells you is that thereโs one additional variable thatโs just as important as all the others combined:
Skill. If we were to modify our equation, it would look like this:
And hereโs the part thatโs really hard to wrap your mind around:
The specific skill you need changes depending on the opportunity. If you want to start a freelance graphic design business, youโd better be a pretty freaking good graphic designer. If you want to start the next Facebook, on the other hand, youโd better be a pretty freaking amazing programmer. To be more precise, you need whatever skills are necessary to capitalize on the opportunity better than all the other smart, hard-working people pursuing the same opportunity.
In other words, you need to be elite. Iโm not sure what the precise measurement of โelitenessโ is, but if I had to put a number on it, I would say you need to be in the top one percent of all people worldwide with your skill. That might sound scary, but itโs actually not a very high bar because the vast majority of people doing anything suck. If you have at least a little natural talent for the skill, you can probably become a member of the top one percent with a few years of diligent work and study. Hereโs howโฆ
Lesson #3: Education is everything (and nothing).
The whole mythos around Internet entrepreneurs is they spurn education. Steve Jobs, Mark Zuckerberg, and Bill Gates dropped out of school. Tech billionaire Peter Thiel pays entrepreneurs $100,000 NOT to go to college. Thatโs as โanti-educationโ as it gets.
Or is it?
If you look a little deeper, youโll find that most entrepreneurs are devout believers in education, but they also believe that certain systems of education, such as universities, are fundamentally flawed. They espouse a more experimental model of learning where the student states their assumptions, poses a hypothesis, and then proceeds to test that hypothesis, not only to learn but also to hone their skills in the real world.
In other words, entrepreneurs learn how to teach themselves. Not just by reading books, not just by listening to teachers, but by observing the world around them, thinking about what they see, and then coming up with their own interpretations. They donโt depend on anyone to โbreak it downโ for them. They figure it out for themselves.
And itโs not just a learning style. In many cases, thereโs no alternative.
With making money on the Internet, for example, there isnโt a degree program or book thatโll teach you everything. It doesnโt exist, and it never will, because the Internet is evolving too quickly. By the time someone created the book or degree program, most of it would be out of date.
Thereโs one exception: skills. Many of the skills necessary to build an online business either donโt change much, or they are easily transferable. For example, if you learn one programming language, itโs relatively easy to pick up another. Negotiation, business writing, and marketing are skill sets that havenโt changed much in decades or even centuries.
And itโs useful to have a teacher. If youโre learning how to write an advertisement, for example, you can learn a lot faster if you have a master copywriter critique your ads.
In my experience, this is where books, online courses, and other forms of traditional education shine: the acquisition of evergreen skills. You can then apply those skills in the real world to continue learning. For instance, the following skills are always in demand and have long-term value:
- Copywriting
- Graphic design
- Programming
- Content creation
- Content promotion
- Marketing automation
- Public speaking
- Ad management
- Social media management
- Project management
Freelancers with elite skills in one or more of those areas often make six figures per year, working completely online. They get to choose their hours, travel when they feel like it, and, and live a pretty awesome lifestyle.
Granted, itโs not total freedom, because they do have to work, but they also have a lot of control over how they work, and in my experience, thatโs what really matters. Hereโs what I meanโฆ
Lesson #4 You donโt actually want freedom.
Let me guessโฆ
You love the idea of building a passive income that flows into your bank account like clockwork every month?
Maybe itโs the idea of working in your underwear, choosing your own hours, traveling the world, or whatever. The idea is passive income = freedom.
And hereโs the good news:
Itโs true. Over the last eight years, Iโve built a passive income โmachineโ thatโs allowed me to travel and live a life most people only dream about.
But it took a long time. Contrary to popular belief, passive income isnโt just something you can create out of thin air. It takes time to build, and itโs a five-stage process:
- Learn a valuable skill. We discussed this one in the last couple of lessons. I recommend picking one of the ten skills and taking online classes.
- Practice until you are elite. Again, you are competing against everyone in the world, so itโs essential youโre in the top 1%. The bad news is, youโll probably start in the bottom 10% and work your way up, usually by working as either an employee or freelancer.
- Start your own business. Once youโve built a collection of elite skills, youโll probably run across an irresistible opportunity, and youโll jump in with both feet. Itโll take you several years or maybe even decades to become a successful entrepreneur.
- Replace yourself. Passive income is the result of turning what you do into a system that runs without you. Sometimes an employee replaces you, sometimes you can automate everything with software, and sometimes you simply teach what youโve learned through an online course.
- Fine tune the machine. The bad news about passive income is itโs almost never entirely passive. Yes, you can reduce your number of hours, but youโll still want to spend a few hours each week fine-tuning the machine. This is where the idea of the โFour Hour Workweekโ came from.
And letโs be clear:
You donโt receive any passive income until the final step. From start to finish, I donโt know anyone who has done it in less than five years, and it takes most people 10+.
I realize thatโs way more work than you probably anticipated, but hereโs the good news:
Chances are, you donโt really want total freedom. What you actually desire is flexibility, and thatโs much easier to achieve.
Whatโs the difference?
Well, freedom means you can get up every morning and do whatever the hell you want. Play golf, go surfing, travel to Paris, or just stay in bed all day. Youโre in total control of every aspect of your life.
Flexibility, on the other hand, only gives you partial control. You still have to work, but you decide when and where. For instance, maybe you take your family to Italy in the summer for six weeks, work every morning and evening on your laptop, and then gallivant around the rest of the day.
Still sounds pretty good, right? And the good news is, it takes far less time and effort to get there. Maybe 6-12 months.
Hereโs how: take a few online courses on any of the skills I recommended, do a bit of free work for friends and family as a way of building your portfolio, and then apply for virtual jobs requiring that skill. You may not make a lot of money to start, but as your skill grows, so will your income, and youโll eventually find it easy to replace your day job.
You can also accelerate the process by moving to a cheaper country, which brings us to:
Lesson #5: It sucks to be an American.
Probably going to get flamed for saying that, but itโs true, and not just for Americans. Living in Canada, England, Australia, or many European countries is just as tough, and the reason is simple:
Itโs expensive.
Between our houses, cars, meals, gas, and all the other little expenses, itโs hard to survive in most cities for under $3000 per month. In some big cities like San Francisco, New York, or London, you can barely get by on $8-10k a month.
But take a look at thisโฆ
I rented a luxury condo on the beach in Mazatlan, Mexico for $1600 a month. A meal at a restaurant was about four dollars. I could get a reputable doctor who spoke English to do a house call for $20. Altogether, I spent about $3,000 a month, and I lived like a king.
And hereโs the crazy part:
I was able to make that much working only 20 hours a week as a writer and editor. As my skills improved, eventually my income crossed $10,000 per month โ more than three times my living expenses.
There were also tax advantages. I wonโt go into the details here, but Google โearned income tax credit.โ Itโs complicated, but you can actually save a lot of money on your taxes by leaving the US.
Altogether, itโs far easier to make a living online when youโre living in another country, and the lifestyle is better too. The biggest reason I came back to the US is that I eventually started my own company, and banks get a little nervous when youโre processing more than $1 million per year in credit card transactions from your laptop on a beach in Mexico. No idea whyโฆ haha. It was also nice coming home after living abroad for years.
The bottom line?
Not only does the Internet give you opportunities for increasing your income, but it also gives you ways to reduce your expenses substantially. Itโs by no means a requirement to move to another country, but it certainly makes making a living easier, and when youโre getting started, you can use all the advantages you can get.
Hereโs How to Get Started Making Money Online
So, weโve covered a lot of ground here.
Mindsets, skills, passive income, having the flexibility you want to live the way you want. Hopefully, itโs all starting to make more sense.
But chances are, youโre wondering what to do first.
Should you create an online course? Start a blog? Be an online affiliate by promoting products? Find a freelance gig where you can learn and grow?
There are a lot of options, and the truth is, all of them are viable. Nobody follows exactly the same path.
But hereโs what I recommend:
- Figure out what skills come naturally to you. Chances are one or two of the ten skills I listed are easier for you than for most other people.
- Buy a few online courses on those topics. In the future, Iโll publish some recommended courses, but until then, just use Google.
- Start applying for freelance gigs. You might get rejected a lot at first, but eventually, somebody will say yes, and youโll make your first dollar off the Internet.
From there, you can scale up. Maybe youโll start your own business with employees and offices, or maybe youโll just become a highly paid freelancer. Neither path is right or wrong. Itโs just two different lifestyles.
The bottom line?
Making money online isnโt a fairytale. You can do it. You just have to be smart about it and have realistic expectations.
Good luck!
