The biggest bugbear when it comes to freelancing is financial uncertainty. Unlike traditional jobs with stable paychecks, freelancers rely on projects and clients, which can come and go without much warning.
Diversifying income can help with that stability by keeping money coming in, in case one of their clients or projects falls through.
Let’s have a look at the biggest benefits of diversifying your income as a freelancer to get started.
Get Weekly Freelance Gigs via Email
Enter your freelancing address and we’ll send you a FREE curated list of freelance jobs in your top category every week.
Less Stress, More Stability
If you’re an experienced freelancer, you’ve likely had a client suddenly cancel a project or disappear without paying. It’s unfortunate, but it happens. When all your income depends on a handful of clients, losing just one can be a big hit.
Having multiple income streams means that if one slows down, you still have money coming in from other sources. It’s a solid fail-safe that’s definitely worth considering.
Avoiding Burnout
Freelancing sometimes means trading time for money. The more you work, the more you earn, but this can become exhausting pretty quickly.
A recent report revealed that, on average, 48% of workers from 8 countries indicated that they are currently grappling with burnout.
Passive income streams, like selling digital products or earning through affiliate marketing, allow you to make money without constantly working.
Meaning more freedom to focus on projects you love or take breaks when needed. After all, nailing that work-life balance is one of the main reasons people pursue freelance careers!
Becoming Financially Stable in the Long Run
Relying only on client work is fine, but you might find yourself stuck in the same place, unable to scale or grow. Adding income streams adds opportunities to scale your business like:
- Online courses
- Subscriptions
- Stock photography
Instead of starting from zero each month, you can build income sources that grow over time, giving you more financial security.
Top Passive Income Strategies for Freelancers
There are many ways freelancers can create passive income, but the key is to start with something that complements your existing skills.
Below are some of the best strategies to explore for freelancers to create passive income.
Selling Digital Products
Selling digital products is probably the easiest and broadest option that almost any freelancer can try out.
You already have valuable knowledge in your chosen discipline, whether it’s copywriting, design, app development, UX or something else – so why not package it into a product?
Sure it requires some thought and effort upfront but can be sold over and over without additional work. An easy place to start might be to create and sell things like:
- Templates
- E-books
- Stock photos
- Design assets
- Coding snippets
- Social media content packs
You can then sell these products on platforms like Gumroad, Etsy, or Creative Market to make it easy to reach buyers. For example, if you’re a graphic designer, you could sell logo templates, while a copywriter can sell email marketing swipe files.
Affiliate Marketing and Referral Programs
A lot of freelancers already recommend tools and services to their clients, so it makes sense to earn from those recommendations. This is where affiliate marketing comes in.
Affiliate marketing allows you to get paid when someone signs up for a service using your unique link. Popular affiliate programs include:
- Website builders (Squarespace, WordPress)
- Design tools (Canva, Adobe)
- Freelance platforms (Fiverr, Upwork)
What programs you use depends on what you offer as a freelancer, but the above should be good food for thought. For example, if you’re a web developer you could earn commissions by recommending hosting services like Bluehost.
Then you need to share the links, so you want to target things like blogs, social media, YouTube videos, or newsletters.
Make sure that when you start, you choose tools you already use and genuinely recommend. This makes promoting them feel natural and authentic to your audience!
Creating Online Courses and Memberships
Online courses and memberships continue to be a great way to earn passive income. If you have a skill that others want to learn, turning it into a course can be a great way to earn passive income. The big question you’ll need to ask yourself is what you want to teach!
Depending on your skill set, this could be anything from freelancing tips and design techniques to coding tutorials or marketing strategies. Basically, pick something you’re good at!
Diving into Automation
Automation has become a popular way for freelancers to make money because once whatever you’re selling is up and running, it doesn’t require a lot of attention to keep it up.
One study found that nearly 90% of surveyed respondents said they trusted automation solutions to get more done without errors and help them make decisions faster.
Subscription services might be a strong go-to, as you could offer a membership or retainer-based service for a steady monthly income.
If you’re a photographer or music producer, you could go down the licensing route, where you sell your images and beats to other creatives.
How to Start Diversifying Your Income as a Freelancer
Getting into the ‘how-tos’ now – so, as with any new project, the key is to start small, don’t stress yourself out with too much work, and build yourself up gradually.
Here’s a quick and easy step-by-step guide to help you diversify your income without feeling overwhelmed.
- Stick to What You Know
Not every passive income stream will be a good fit. The best approach is to choose something that aligns with your existing skills and interests. Ask yourself:
- What services do I already offer that could be turned into a product?
- What do clients frequently ask me for?
- What skills or knowledge do I have that others might find valuable?
So, if you’re a freelance writer, you could consider helping clients with SEO content by creating an e-book or online course on writing SEO-friendly blog posts.
- Keep it Simple With One Additional Income Stream
It’s easy to get excited and have loads of ideas you want to try out. But that will likely become stressful and overwhelming pretty quickly.
Start with one solid idea for passive income and focus on making it work before expanding.
- Choose a strategy: pick the option that feels easiest to start with – like selling a digital product or joining an affiliate program.
- Set a timeline:Â give yourself a deadline to create and launch your first passive income stream.
- Take small steps: if you’re selling a digital product, start with something simple, like a checklist or template, before creating a full course or book.
For example, if you’re a designer selling branding templates, you might later expand into offering printed design resources or even look into hardback book printing that features all of your best work.
- Make Use of Existing Platforms
You don’t have to build everything from scratch. As we’ve discussed, many platforms can help you set up passive income streams quickly. If you’re a photographer, for example, you can start selling your images on stock photo sites while building your own website.
- Optimize and Automate Where You Can
Passive income works best when it runs on autopilot. Once you set up your income stream, find ways to automate and improve it over time. Some quickfire tips include:
- Automate delivery:Â use email sequences or sales funnels to deliver digital products.
- Optimize your listings:Â improve product descriptions, pricing, and SEO to attract more buyers.
- Promote strategically:Â share your products through social media, email newsletters, or blog posts.
- Keep Tabs on Progress and Expand When You Can
Once your first passive income stream is running, you’ll want to analyze what’s working and what’s not. This will include tracking your sales and audience/customer engagement – so tools like Google Analytics would be a great place to start.
It’s important to adjust your offerings over time too. So, if a product isn’t selling as well as it should, tweak the pricing or improve the marketing.
Finally, once you’re confident with your initial build, start slowly expanding your income streams. Experiment with other streams, like affiliate marketing after launching a digital product, for example.
Remember to Start Small and Build Slowly
Freelancing is an exciting and flexible way to make a living, but relying solely on client work will always carry its own risks.
By diversifying your income streams, you can create more financial stability, reduce stress, and even free up more time for the work you truly enjoy. Three things every freelancer aims for!
Whether that’s selling a simple digital product, joining an affiliate program, or exploring new ways to package your expertise. Keep it simple, keep it time-efficient and keep it fun!
Over time, these income streams can grow and help you earn money even when you’re not actively working.
If you’re looking to attract more freelance clients this year, take a look at how direct mail might be the way forward for you.
Keep the conversation going…
Over 10,000 of us are having daily conversations over in our free Facebook group and we’d love to see you there. Join us!