The Exact Steps I Followed to Make $1,500+ of Passive Income Every Month
I’m 29 and refuse to trade time for money. Here’s how you can do it too.
Julia Horvath
Julia Horvath
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Mar 3 · 15 min read
Photo by cmophoto.*** on Unsplash

“I wanted movement and not a calm course of existence. I wanted excitement and danger (…). I felt in myself a superabundance of energy which found no outlet in our quiet life.” — Leo Tolstoy in Family Happiness

At 25, I had an epiphany. I hated to sacrifice half of my waking hours to work for someone else. Even though my job at a multinational company was okay, a feeling of suffocation crept over me with every day I turned on my computer.

My dream is to travel to every country. Meanwhile, I want to read a book every month and watch a movie every week. I want to explore every corner of the city I live in. I crave to have the time to laugh and go crazy with my friends and fall asleep late. I yearn to utilize my time in a fulfilling way.

As Jack Kerouac would put it, I’m

mad to live, mad to talk, and desirous of everything at the same time.

I realized, however, I won’t have the time to do all these things as long as I had a 9–5 corporate job. The enjoyment of my zest for life would be limited to after-hours and weekends until I turned 65 — the legal age of retirement where I live.

Who knows if a) I would live that long and b) if I did, what my health would allow at that age?

My mom passed away from breast cancer at age 48. This defining experience taught me you can’t assume you have a whole lifetime in front of you to do all the things you want to do.

Therefore, I made a decision: I‘d do what it takes to escape the work-hustle fetish culture and stop to trade time for money.

Two months later, I quit my job and fastened my seatbelt on a flight to Southeast Asia. I had no idea what I was doing but was wrapped in a fundamental sense of freedom.

You can’t assume you have a whole lifetime in front of you to do all the things you want to do.

Fast forward to today and I make $1,500+ on autopilot, aka passive income. No, $1,500 isn’t massive wealth I accumulate every month but it’s enough to cover all my costs of living and even put a little aside. I don’t have to worry about making ends meet.

I work 10–15 hours a week to generate additional, regular income, and I have more than enough to live, save up, enjoy life, and tinker with passion projects that’ll hopefully generate more passive income later.

I’m also an ordinary person in my 20s; had little savings and didn’t take out a loan.

How did I do it?

Passive income is neither impossible nor rocket science. All you need is time, determination, and the will to take a few calculated risks.
How to Make Passive Income Selling a Digital Product

There are many ways to make passive money online (affiliate marketing, dropshipping, influencer marketing, etc.). Nevertheless, I’ll focus solely on selling digital products.

Why?

Because that’s how I make my money and, therefore, have expertise in.
Step 1: Decide about the framework.

I quit my job to do this. Can you quit yours too? It depends.

As a turbulent ENFP, I had savings of $18,000 when I quit, burned up $8,000 within 6 months of travel while I did nothing, and essentially started to put real effort into my new business once I panicked and had $10,000 left.

Whether you can quit your job largely depends on your savings, expenses, and willingness to take risks. Overall, it feels good to have enough money to live off from a year and have a buffer on top of that.

While I started like that I can attest to significantly higher stress levels once I got below this threshold and, therefore, don’t recommend it.

Whatever you decide, don’t assume you can generate income within a few months. It took me over a year of hard work and zero cash flow to figure it all out. In the beginning, there’s too much you don’t know. No matter how good you are, you’ll inevitably make mistakes, all of which take time.

If you decide you can’t quit your job, after all, that’s okay. I know several people who built successful online businesses while employed. If you can afford it, try to reduce your hours (e.g. from 40 to 20). Otherwise, dedicate time on the weekends, in the evenings, etc.

For further inspiration and the conviction you can do it, read Jon Morrow’s story about how he became a multimillionaire selling online courses while he can’t move anything but his face. He‘s one of the guiding lights of my journey and I came back to this piece whenever I felt like giving up.
Step 2: Decide on your niche and a product you want to sell.

I sell Hungarian language courses. Hungarian is considered to be one of the most difficult languages in the world (along with Mandarin Chinese and Arabic). It’s also my mother tongue.

I’m also with a partner who learns Hungarian and who started this business together with me. This gave us a unique approach and angle to other people’s struggles.

When you look for your niche, here’s what you should ask yourself:

What is it you know only a few others know, but many want to learn?

While 10 Mio people speak Hungarian, only a few of those speak English at my level and even less want to teach it.

When I started out, there was one proper autodidactic online course and a few apps floating out there. At the same time, language-forums, related Facebook groups, and the Hungarian-learning subreddits had thousands of members.

This way I was confident I had a business.

While these paragraphs are just the tip of the iceberg of my market research you get the idea.

Millionaire online creator Pat Flynn’s book Will It Fly? is packed with amazing content to help you decide whether your idea could work or not. It’s what I used to decide if I should go through with mine.

Also, Jon Morrow’s article 21 Warning Signs You Chose the Wrong Topic For Your Blog will help you with the decision. Don’t let the title deter you — these will work not only for blogs but any type of topic you decide to pursue online.

Here are the crucial things to keep in mind when you decide about your niche:

Solve a problem.

If you remember only one thing, let this be it. You have a business if you help people with key pressing issues they face. Don’t start with nice-to-have things you feel or wish people might like. Solve their most painful problems and you’re guaranteed to make money.

It doesn’t have to be your passion.

You’re building passive income so you have more free time to focus on your passions.

Hungarian isn’t my passion. Don’t get me wrong — I like it and find the nitty-gritty of the language interesting. Most people who want to learn it are lovely and I love to talk to them and hear their background stories.

My passions are my partner and my friends, travel, getting to know myself, indoor bouldering, and writing.

All of them would cease to be passions as soon as I’d burden them with the enormous responsibility to provide me a living.

Passions cease to be passions as soon as you burden them with the enormous responsibility to provide you a living.

Don’t make this mistake, as it’ll leave you disappointed, burnt out, and dispassionate.

You don’t have to be an expert in your niche.

Or, to put it differently, to be an expert, all it takes is to know more than the people who want to learn it and your willingness to advance.

The only key is transparency. Be honest about where you are, what you know, and what you don’t know.

If your niche is a topic you only got into recently, say so and take your audience on a journey with you as you learn.

I’m not a linguist or Hungarian teacher. I base my content on my experiences with my Hungarian-learning partner and, after 3 years of being into it, my experiences as a tutor and talking to hundreds of Hungarian-learners.

I’m dedicated to unlock and explain the most difficult grammar rules. I dug deep into my mother tongue to make it more accessible for its learners.

Nevertheless, I’m not a certified expert and don’t plan to be.

Learners trust me specifically because of my different approach. Many of them worked with teachers before and want to try something new when they buy my courses.

You don’t have to be either. You can turn your perceived shortcomings into advantages. People don’t want your certifications. They’re looking for someone they can relate to and trust.
Step 3: Start an email list.

I cannot emphasize this enough. Most people skip this step and later wonder why their social media audience doesn’t convert.

My business runs almost entirely without social media. All I have is a Facebook-page of 1,000 fans which came somehow over time. I use Facebook solely for running ads (more on this later).

Here’s why your email list will be your superpower, lovechild, and most valuable asset you ever build:

Control:

An email list is the only thing you control. You’re not subject to any algorithms, policies, and changes of heart of social media providers. While only ~5% of people will see the smart observation you post on social media 30-50% of people will see what you send them via email:
The open- & click-rates of one of my recent campaigns. Screenshot by the author.

An indicator of a strong interest in what you have to say:

An email list indicates strong interest and, therefore, a higher propensity to buy.

It takes a second to follow anyone on Twitter. It takes typing, opening another tab, checking your emails, and the confirmation of your subscription to join their email list. It also takes trust. The hurdle is bigger and people who are willing to take it will be a lot more likely to open their wallets later on.

Timelessness

Think of all social media trends of the last 5–10 years. If I wanted to follow them all I would’ve gone crazy.

From Facebook to Instagram, Twitter, and now TikTok and Clubhouse — people change and try new platforms frequently. All the while, they’ve been diligently reading their emails every day since the mid-90-s.

While social media trends come and go, you can trust email to stick around and be a reliable tool to build trust, connect with your audience, and, ultimately, sell your products.

There are several online resources to start an email list. Author and online millionaire Pat Flynn’s is a great one.
Step 4: Grow your email list to 500.

You’d think 500 people are too few to make real money. You’re wrong. I had 500 people on my email list when I pre-sold my first course and it was a massive personal success (see below).

I’m not gonna lie, however— it isn’t easy to get to the first 500 people on your list. It took me almost a year. Although to be fair, I didn’t give it my all and tried to rush after multiple projects at the same time.

Little did I know how valuable my little email list would eventually become.

Either way, here‘s how to get your first 500 subscribers:

Give away something that relates to your product idea for free when they sign up.

This can be an ebook, a video series, a daily email with little nuggets of help, a PDF, or any other kind of digital material.

The easiest way to create a good freebie is to ask yourself this question I learned from online millionaire Amy Porterfield:

What does your audience need to understand, be aware of, or believe to want your product?

By now, I have several so-called lead magnets or freebies and tried all of the types I mentioned above. They each work, given they’re helpful, solve a quick pain your audience has, and are related to your product.

Start with one such freebie and make it the best you can. Don’t be afraid to give away too much value for free. Your help will pay off later. Also, in the end, each subscriber can translate directly into income.

Message everyone you know who could remotely be interested in your idea, and ask them to sign up for your list.

I also hate cold emails, but you don’t have to see it like that. You don’t sell anything yet; you just want to create an audience of people who could potentially be interested in what you have to say.

Don’t be shy to aim for the whole bandwidth of your social network. In the end, you don’t know whom other people know and whom they’ll forward you to.

Leverage social media.

To build my list is the only thing I use social media for. I used my personal Facebook account to find and post my free material to all Hungarian-learning groups.

Also, I played around a lot with Reddit.

My partner spent a lot of time tinkering with Pinterest and made one article go viral there.

There are hundreds of tutorials for each social media channel and how to use them as a powerful marketing tool.

Where you put your efforts will be a combination of which channel you find easy to use and where your audience is.

Once people start hopping onto your list, email them at least monthly. Otherwise, the value of your list will deteriorate quickly. After all, you can’t expect people to be excited about you and your product idea if they haven’t heard from you for a year.

You can email them what you’re up to and come up with helpful blogposts or the helpful resources of other people.
Step 5: Pre-sell your product idea.

You don’t have to build an entire product before you make money. You can generate income with a product that exists only in your head.

In fact, this is what you should do, as it gives you direct feedback about whether your idea is viable or a waste of time.

How to do this and see great results, however, goes beyond the scope of this article. That’s why I wrote an in-depth tutorial with every step of how you can pre-sell your product idea to your audience.

As I wrote above, I had 500 subscribers during the 6 months I pre-sold and built my first course.

It was a massive personal success. I made almost $3,000 before I launched it. That’s $3,000 for a product that didn’t even exist yet.
Our sales stats on Gumroad between October 2018 and February 2019 when we built and pre-sold our first online course. Screenshot by the author.

Of course, $3,000 in 6 months wasn’t enough to live while it was far from passive income, too.

At that time, my partner and I were together in this and worked our asses off all the while. While this meant tremendous emotional support, it also meant to divide the money by two.

Nevertheless, this $3,000 showed us to make money from digital products is possible.

I don’t need fancy social media accounts and hundreds of thousand people I reach to achieve it. All I need is a dedicated audience I was now determined to grow.
Step 6: Build & launch your product.

This goes parallel with the previous step. After the initial pre-sale, we saw the product idea was viable (ie. people were ready to spend money on it), so we proceeded to create the product.

At the same time, we left pre-orders open until launch and grew our email list.
Step 7: Build a sales funnel.

Once you launched your first product, it’s time to automate the process and make the leap towards passive income.

It’s time to build a proper sales funnel.

Roughly, here’s what this looks like:

People find your freebie (e.g. through Facebook ads)and subscribe to your email list;
They receive several emails with free nuggets of information, each of which helps them to solve their most pressing problem regarding your topic;
You introduce your product and ask them to buy it for a discount with a deadline attached.

In the end, all passive income that comes from digital products boils down to these 3 crucial steps.

People wrote entire books about email funnels. In the end, though, all you have to do is be helpful and offer a lot of value for free in your emails before you pitch and ask for money.

My longest funnels are 10+ emails long and span over 2 weeks. These are also the most successful ones.
Step 8: Do flash sales.

Every few months, it’s time to remind your email list of your product(s). You think it’s pushy and if people decided once your product isn’t for them you should respect their decision.

In fact, the opposite is true. I sell a lot more products per subscriber with flash sales than through my sales funnel. Here’s why.

People learned to trust you more. They received further helpful content and know you’re legit after months they spent on your list.
Many people missed the first opportunity. They’ll be happy to have a second chance again.
Many people weren’t as interested back then as they’re now. For some, it just wasn’t the right time when they subscribed or they were short on cash. Now is better.

One of my week-long flash sales. Screenshot by the author.

See one of my flash sales above. I made almost $5,000 within a week. All I did was send a few emails.

You shouldn’t overdo flash sales, however. I do them every 4–5 months.

Violá — after you completed these steps you likely built at least some passive income.

Like me, you might not make enough yet to ditch all work and do nothing but sip cocktails on a tropical beach. Nevertheless, you’ll be on track to fulfill this dream.

Once you built one product, you can expand further, focus on growing your list, create a new product, or think of other passive income streams.

My current monthly $1,500 consists of two digital products as described above which I sell through an email list that meanwhile grew to 4,000+. I do 2–3 yearly flash sales. I also started a Steady account (the German equivalent of Patreon).

I promise all of these got easier after I built and sold my first product.
Key Takeaways:

You don’t need a bunch of starting capital.

Maybe you noticed you don’t need a lot of money to recreate all of this. Your biggest expense is you — you have to eat, sleep, and turn lights on. That’s where your focus should lie when you make the decision to build an online business.

You don’t need a large social media following.

In fact, you don’t need social media following or even a webpage at the beginning at all. Focus on the essentials, and don’t get lost while you do nice-to-have-things that don’t matter.

Essentially, you only need 3 things to run this:

A product, an email list, and a sales funnel with a freebie as a lead magnet. Narrow your focus. To become scattered is one of the biggest hurdles you’ll face and can derail the whole thing.

Have patience and accept this won’t happen overnight.

It took me a year, lots of tears, and frustration to make my first few dollars. There’s no shortcut and if someone says so they lie. Otherwise, what do you think everyone would do?

What Passive Income Did For Me — and What It Can Do For You

Self-employment alone can already bring many advantages and a lot of freedom. Passive income, however, goes a step further.

I have a lot more free time. Time is one of the most valuable assets in life. It’s also the only thing you won’t get back (unlike money).

Therefore, I have the freedom to design my day and, in the end, make the most of my life without waiting for the weekend.

I can wake and sleep as I please. Self-employment and passive income helped me get back to my natural sleep cycle as a night owl.

At the same time, I can work on passion projects without pressure.

Self-employment fulfills me with meaning. I don’t feel like I live half of my life working on someone else’s dream.

Overall, I have a strong sense I don’t waste a minute of my life. I no longer have a long bucket list of things I want to do when I have more money, more stability, or more security at some point in the distant future. I just do them. Life is too short for that sh*t.

As I said, I’m average, had zero starting capital, and took on zero debt. All I had was a thirst for life that never ceased.

To be fair, I also had a loving partner with the same vision and we shared the workload at the beginning. While this helps you can do the steps I described above alone, as well.

If I can do it, you can do it too.

What are you waiting for? Figure out that niche and start to work on it.

If you need more help, join my Self-Letter. It’s a weekly email where I help you learn more about yourself, embrace your creativity, and make money while you live in alignment with your personal values.
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