3 Critical Components to a Passive Income Business

By Sean Ogle •  Updated: 02/13/13 •  8 min read

I’ve got a confession to make:

Throughout the last month I’ve done very little work for this blog.

Right now you’re probably saying to yourself: “ummm, yeah, I noticed!”

It’s true, up until this week I’ve been in full on travel mode.  I’d never intended for the trip to turn out that way.  I was thinking 3-4 spots max, with one week in each location.

That’s plenty of time for me to get into a routine, and carve out some time during each day to get stuff done.

Then things went horribly wrong.

 Note: I’m using the term “horribly wrong” very loosely in this case.

I had a group of friends that were going to be traveling to some places that I’d always wanted to go (Saigon, Angkor Wat) and then culminating in my favorite city on Earth: Bangkok.

Angkor Wat Sunrise

At Angkor Waiting for Sunrise with my good friends Tim and Ryan

So much for slow and steady.

I decided to tag along for a variety of reasons, but mostly because the stars aligned, I’d get to cross off a few new spots on my list, it sounded like a ton of fun – which it was.

Bad news, is when you’re on the road every other day and have traveled specifically to see the sights, it doesn’t leave much time to, you know, be productive.

Luckily, I was confident that if I took off for awhile and had limited access to wifi, I could still bring in enough income for the month to support the trip.

How did I do it? By focusing on three critical components while I was building my business to ensure that when an opportunity like this presented itself, I wouldn’t have to hesitate and could jump at the chance to go travel.

Before we get into the meat and potatoes of this post, I should make it clear that there are all kinds of ways to build a business that brings in “passive income”.  I hate that term, but let’s call a spade a spade for this illustration.  Many of the ways you can do it are extremely shady and aren’t things I do or advocate.

No, I’ll be sharing the three most critical aspects of my business where people are the most important component and the last thing I’d ever want to do is screw someone over.

Now onto our three components.

Critical Component #1: Relationship Cultivation

There’s one thing I try and give total priority when I’m on the road.  No it’s not a blog posting schedule (obviously), nor is it an increased emphasis on affiliate links or other ways of making money.

It’s relationship cultivation.  I’ve hardly done any creative work over the last month.  I have all kinds of projects that I essentially put on hold to go and actually live life a little bit – but I always did my best to respond to emails when people sent them to me.

I usually get about 10-20 emails a day from new blog readers that are writing to tell me about their story, tell me how excited they are they found the site, or simply wanting to say hi.

That’s where I devote my time.  I do my very best to respond to every email I receive that was sent by someone who actually put some thought into the message.

Why is this so important?

Because the only way I can make “passive income” is when people buy something. Why would anyone buy something from me if I can’t even respond to a simple email?

Let’s take this a step further though and really hammer home the importance of this.

If you have a relationship with your customers, they also give you more leeway. 

When people inside Location Rebel know I’m on the road, and send an email asking a question they are much more willing to cut me some slack then if there was no previous relationship.

For me this takes SO much stress off my shoulders.  I’m not saying it gives me a reason to get complacent, but it does give me the ability to enjoy my time away from my computer without having to stress about every little thing going wrong.

That being siad, it also doesn’t hurt that I have the most badass relationship manager ever in Liz to help manage the forums and other member inquiries.

Bottom line, if you cultivate your relationships not only will you continue to see money come in while you’re away from you computer, you’re existing customers will be even happier in the process.

Critical Component #2: Diversification

April 25th, 2012 is a day that I’m going to remember for a long time.

I was in the middle of nowhere – Yangshuo, China to be exact.  My time was spent mountain biking, hiking, and basically doing anything but sitting in front of my computer.

Then I received an email from my business partner with the subject: “WTF?”

What had happened was the Google Penguin update went live, and one of my bigger sources of income had been cut down by 80% overnight.  There were a couple hours of freakout, especially considering internet was difficult to come by there, but then I realized that this is exactly what I knew would happen at some point and that I’d prepared for.

At any given time I have no less than a dozen different income streams.  Some very minor and others not so much, but if one of them gets cut off I know that I’m still in good shape.

This is what I call Job Security 2.0.

If I was on vacation from a day job and my boss sent me an email saying I was gone – then it would have been a much different story.

Over time, without proper maintenance ALL passive income streams will dwindle or disappear altogether.  It’s just the way it works.  So if you want to build a sustainable business over the long term, and not some flash-in-the-pan-get-rich-quick scheme, then you’ll need to diversify and expand your income streams as quickly as it makes sense.

Some ways to do this:

The more you diversify the greater your chance of earning a substantial passive income regardless of how much time and effort you’re putting into the business.

DISCLAIMER: This is the big “but”.  This all takes time to setup and won’t happen over night – so don’t expect it to. Start working on it now to prepare for the future. It’s taken me over three years to get where I’m at now, and I still have a long ways to go.

Critical Component #3: Giving a Shit

I almost made #3 “Putting Effort in on the Front End”, which is totally true, but I think straight up giving a shit, encompasses and trumps that.

So many people just don’t care. They don’t care about value, people, building a real business…all they care about is themselves and making money by any means necessary.

It’s kind of ironic how really, truly caring about your business is what gives you the ability to forget about it for short periods of time while you travel or have other types of adventures.

If you really care about the people you’re trying to help, in the long term good things will happen – I promise.  Why? Because that sets you apart from the vast majority of people who simply don’t care.

So think about this from square one.  Are you starting your passive income business simply to make money? Or are you doing it because you really want to make a difference in the lives of others…and make some money in the process? There’s a big difference.

There’s nothing wrong with wanting to make money, selling products or services, or wanting to do it all while chilling on a beach.  That doesn’t make you a bad person, and it’s a fantastic dream to have that millions of people share.

But you have to care. You have to want to do it in a way that benefits more than just you.

So think about that first.

Ask yourself: “How can I create something that makes a difference in one person’s life?”

Then worry about the money, because when done correctly, believe me, it will come.

Sean Ogle

Sean Ogle is the Founder of Location Rebel where he has spent the last 12+ years teaching people how to build online businesses that give them the freedom to do more of the things they like to do in life. When he's not in the coffee shops of Portland, or the beaches of Bali, he's probably sneaking into some other high-class establishment where he most certainly doesn't belong.
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16 comments on "3 Critical Components to a Passive Income Business"

  1. KimBoo York says:

    Aaaahahaha, yes, “Job Security 2.0” – that’s exactly the term for it! I realized a while ago that I was so sick and tired of always being held on a string by my employers, waiting for it to be cut and for me to drop into financial oblivion. Not a good feeling AT ALL.

    As you know I’m still working on things but I know that the relationships I’m cultivating and the various businesses I’m working on will, eventually, “pay out” in the form of Job Security 2.0. Not hanging from a string anymore is my goal!

    Enjoying your updates, however often they happen. Happy travels!

    1. Sean says:

      Thanks KimBoo!

      Yeah the way I define Job Security 2.0 as leveraging your relationships and multiple streams of income that you have control over to be secure, rather than a single paycheck. Been working out pretty well so far!

  2. Lindy says:

    Wholeheartedly agree on #3 Giving a Shit!

    It’s painfully true that so few people in business actually care about helping their customers first and making money second. I’m a bit of an idealist, but I genuinely believe that if you give, you will receive 🙂

    Great post!

  3. Carlo says:

    Hey Sean,

    Yeah Job Security 2.0 is definitely the way forward, especially in the unpredictability of the current climate.

    Great post and as ever – Location Rebel Rocks! 🙂

  4. Allen Young says:

    I appreciate your your commitment to #1 and #3. I appreciate even a quick email to an inquiry I had when you are so busy.

    1. Sean says:

      I do my best, and thanks for the nice words Allen. Means a lot!

  5. Sean, I think a lot of folks like yourself don’t work a lot for passive income. That’s why the world is so great and life is good.

    The question though is the amount of passive income generated. Are we talking $1,000/month, $5,000/month, $8,000/month, $10,000/month+? That’s the key difference here. Please share to complete the full perspective! It’s always best to highlight what someone should expect if we are to encourage people to join the lifestyle movement.

    Thanks, Sam

  6. Jeff Beal says:

    Great post Sean. Definitely working on the multiple streams of income. And yes, I have a few services oriented clients where I make the bulk of my income. It’s a trade off, they book my time for a few months and that allows me free time to develop other passive income streams.

    Thanks, Jeff

    1. Sean says:

      I’ve found you should always be looking for new clients, but there are times where if the passive income streams are hitting, you don’t have to take as much of your time with the services. I always like to have at least a couple things going not only for the diversification, but just because I enjoy working with other people.

  7. Shayna says:

    Awesome post; I really resonate with your philosophy and way of running your business… I’m about 2 years behind you and it’s great to catch a glimpse of the future.

    I too get subscriber e-mails (I encourage people to e-mail me) and I do my best to always reply within 24 hours. A lot of people then reply to my reply and say “I didn’t expect to get an answer!” or “Wow, that was fast!” It’s such a simple way to build relationships, and all it takes is a bit of discipline to sit down and do it every day.

    And yes, giving a shit is key. Sometimes I get jaded when I get bombarded with e-mails saying “hi, I want u to give me ur product for free” and I’m like Ugh, my list is full of freebie seekers! – …but then I get lovely e-mails from my customers saying my courses are fun and helpful and have helped them take great strides forward in their language learning. Not only does it make me feel all warm and fuzzy, but it motivates me to create even MORE great stuff for these wonderful people who are trusting me as their teacher.

    I haven’t taken my lifestyle on the road yet, but when I do, I’ll definitely remember these essentials.

  8. David says:


    remember you writing in one of your last posts, that you want to prove, that “full mode travelling” and working is possible. I was sceptical… Now I see that my scepticism wasn’t out of place. I think life style business isn’t that dolce vita you and other “lifestyle” guys are suggesting. Actually it is much more work than nine to five. I think many people don’t realize it when starting to live their “lifestyle” dream.

    Anyway, I hope you enjoyed your stay in SE Asia, I’m heading there next weeks (maybe little bit off season but nevermind). Would love to hear in your next posts, why everyone LOVES Bangkok (then I know what I missed last time I was there 🙂 )


  9. Tristan King says:

    One of my favourite posts, Sean. Diversification is definitely important and helps with security. Keep them good thoughts a’comin’.
    – Tristan.

  10. Love this post Sean, I think it’s one of my favorites now!
    All 3 components hit home really hard but #3 stood out the most. This is basically how i run 90% my business, by actually giving a shit. I noticed that a lot of bloggers and online entrepreneurs think that just because they are “online” that customer service doesn’t matter. And that it why those bloggers fail, and guys like us rise to the top!

    Because no matter what type of business you run online, you have to sell something in order to get paid. So if your audience of readers or prospective clients don’t feel you are coming from a real place, then they will invest their money somewhere else, to someone who actually gives a shit!

    Great Post Sean!!

  11. Paul says:

    What are your experiences with diversifying and building these income streams? To get more to the point, do you only focus on one at a time, or have you taken on multiple projects at once? What works best?

  12. Barry Canada says:

    Definitely looking for my own Job Security 2.0. At this point I am working on building a relationship with my followers. It hasn’t been easy though, as many don’t read the email notifications I send them. But, I keep adding new members and continue to try and engage them with quality content. Again, great post!

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