Want to create a passive income stream for your agency or freelance business, but not sure which type of online passive income will give you the biggest payoff for your time and effort? So in this article, we're diving deep into a burning question: Which product is best for passive income in 2023 — an ebook, coaching, or affiliate marketing?

What A LOT of people don't know is — there’s a clear winner among these options.

I firmly believe online courses are THE superior method for creating a passive income stream for your business. But don’t just take my word for it, let’s look at the pro’s and con’s of each of these products. So, buckle up and let's dive right in!

P.S. Just so you know, some of the links in this article are affiliate ones, which means I might get a little thank-you commission if you purchase the product – at no additional cost to you! I only recommend tools &products I’ve tried and LOVED.

📝 Table of Contents:

Watch the video below for an overview of allll the pros and cons of different passive income product types. The video is chunky – so use the chapters to navigate!

Or… read on for the text version ;)

What Is Even Passive Income?

Before we dive into the side by side comparisons of all these products, we need to get one thing straight and clarify what “passive income” is, and more importantly — what it’s NOT.

Contrary to what MLMy marketing bros and dubious experts will have you believe, passive income is not a way to make a quick buck while you lounge on a beach doing nothing and watch money magically appear in your bank account.

‘Passive’ is NOT synonymous with no work. There's work — and lots of it — associated with building up any sort of passive revenue stream. And regardless of which one of the products you’ll opt for, you WILL need to invest time and effort into setting them up.

But here’s the beautiful thing about passive income – you're not trading time for money. You don’t need to actively get on sales calls, you don’t need to deliver client work or be physically present at your office or job to make money — hence the name “passive”.

Once you set up the systems, and they're running smoothly, your product can bring you revenue for years to come.

Just keep in mind, that passive income is a long haul game.

Think of it like planting a tree — you nurture it in the beginning, and then it gives you fruits year after year.

So now that we got this out of the way, let’s look at how Digital Products, Coaching, and Affiliate Marketing, Memberships and Online Courses fare and compare for generating passive income.

📄 Digital Products for Passive Income: Pros and Cons

First off, what are digital products?

Any sort of product you create digitally and can sell online that doesn’t require shipping: so things like ebooks, digital downloadables, whitepapers, presets, digital planners, audio recordings, website templates and muuuuch more.

Pros of digital products

1. They are easy to make and produce. You could whip up a Canva template to sell, a printable planner or a short e-book and start selling them in practically no time.

2. They’re cheap to create. Since you don’t need to invest into video equipment, a course hosting platform, video editing software or anything of that sort.

3. Digital products often get labelled as an ‘easy sell’ because their price typically ranges anywhere between $10 to $100 and therefore don’t require much convincing to sell. People rarely mull over whether they are ready to buy a 15 dollar template or not — it’s typically a quick & easy decision.

   P.S. There are definitely digital products which can sell for 200-300-400 hundred (like website templates and such) — but they’re more the exception that proves the rule.

   And while easy sales may sound rosy, digital products’ low price point is a double-edged sword: it’s sort of a pro, but also… sort of a con 👇

Cons of digital products

1. Precisely because e-books are so cheap, your potential revenue will be lower.

   Let’s say you set yourself a revenue goal of $100k. If you’re trying to hit that number by selling a $10 e-book, you’ll need to sell it exactly ten THOUSAND times. That’s… a lot.

   Unless you have a massive audience or a well oiled traffic generating machine, getting to these ten thousand sales will take you a while. Compare that to selling an online course — that might cost $1k, for example. To hit the same 100k revenue mark, you’ll only need to make a hundred sales.

   And here’s the kicker…

   The time it takes to set up the sales funnel for your digital product is roughly the same amount of set up time needed to set up a sales funnel for a more expensive one.

   Quick clarifier — what the heck is a sales funnel? It’s basically a sum of all your marketing puzzle pieces (landing pages, social media, emails, checkout pages, etc.) playing together to take someone from “Hey, what's this?” to “Heck yes, I'm buying this!”

   So the set-up time is the same… But the difference in profits? Huge! So yeah… not a huge fan of this deal.
   

2. Digital products might not provide as much value to your clients as other types of products.

   There’s only SO much a template or an e-book can do, you know? While yes, digital products can make a tedious task easier or help your clients save time, they will never be THE thing that catapulted them to the next level.

   And here’s what that’s a BIG deal and you should care 👇

   At the end of the day, what we really want is not to simply sell ONE single product. The goal is to help your ideal client solve their problem and delight them, so that they keep coming back for more.

   And the way we hook people onto our brand is by helping them get AMAZING results… which digital products rarely can do.

   Plus, the cheaper the product, the higher the probability your clients simply won’t use it.

   I mean, let’s get real — how many ebooks have you bought…and never read?

   How many Canva templates you downloaded in hopes of levelling up your Instagram game and then never actually used?

   That’s cause the lower the investment, the lower the stakes — so it’s that much easier to buy a digital product and then forget all about it.
   

3. It’s harder to stand out against your competition.

   Precisely because it’s so easy to create digital products, lots of people jump on the trend and start creating copy cat versions of planners, trackers, cheat sheets – whatever the case may be.

   And if someone else is selling a similar template for cheaper than you do — people will very likely just get the cheaper option. “It’s the same thing anyway, why pay more” — sort of thing. And to be honest…they wouldn’t be wrong.

   I mean… can YOU tell the difference between these two planners and justify why one is 3 times more expensive?

Probably–very likely–not really. (At least I can’t 😅😅)

And I can guarantee, especially in the digital product space, there will ALWAYS be people who are undercutting the price — even though it does no good to anyone.

You might argue this is true for online courses as well — and you’re not wrong.

But with online courses or a higher level product, people are rarely buying pure information, what they want to get access to is YOUR outlook, your vibe, your way of doing things. With digital products, your personal brand gets a backseat, it’s more about one specific functionality you’re selling rather than about you as a brand.

4. And last one the list of the cons for digital products… are customer support queries.

Quick story time…

The year was 2020. Book funnels were THE hot new trend. And the team I was working on at the time decided we must launch one, too.

Said and done! After weeks of work and preparation, we launched that book and …

OH. MY. GOD…

It’s been quite a few years now, but I still remember that day as one of the most stressful working days I’ve ever had. 😅

From the outside, the launch went marvelously: thousands of people bought the book.

What happened behind the scenes, is that the entire marketing team stayed up well past 12 AM to sort out the avalanche of customer support queries that rushed in.

We did make bank that day, but the amount of time that went into maintenance–for that price point just did NOT make sense.

Now, you might not be starting out with a big audience ready to jump on your low ticket offer, but the queries will still be coming in.

Where’s my file? How do I change the colors in the template? I never got the email with the downloadable. Etc. etc.

And listen, if you make a hundred bucks from selling that downloadable, but spend 3–4 hours answering customer support queries… it’s not passive income. You’re just working online for 25 bucks an hour. 🤷‍♀️

👯 Membership Sites for Passive Income: Pros and Cons

Memberships are like joining an exclusive club online, where you pay regularly (i.e.monthly or yearly) to get exclusive access to things like expert webinars, cool masterclasses, private livestreams, or anything, really.

Think Netflix or your gym membership, but for awesome online content and communities where you keep learning and connecting with others.

Pros of membership sites

1. The beauty of the membership model is that it generates recurring, ongoing revenue for your business.

   Membership sites are kind of like a steady paycheck.

   With other types of passive income products, you're always on the lookout for new customers.

   But with memberships, once someone signs up, they're adding to your income month after month, until they decide to stop and unsubscribe. It's a more predictable way to bring in money, and who doesn't love a bit of stability, right?

   
   
   
   

2. A close-knit community.

   A real, engaged community of superfans is THE best-kept secret of super successful businesses. And memberships are hands down one of the best ways to build a real community.

   Because of the ongoing nature of memberships, you can spend more time engaging with your clients, deepening your relationship and building trust. Plus, memberships provide a platform for your clients to connect, network and communicate with each other, adding even more value to your product.

   
   
   
   

3. Memberships can boost the sales of your other offers.

   Since memberships tend to be in the lower- to mid-price range, they’re a great “first touch” offer when it comes to introducing new customers into your world.

   Here’s where it gets cool:

   As members interact with your content and become part of your community, they further develop trust in your expertise and the value you deliver. This trust, coupled with their regular interaction with your brand, primes them to be open to your other — potentially higher ticket — offers.

   The audience already knows and–hopefully–trusts you. They’ve already seen what you can offer, and if they were satisfied with the results — the upsell will be easy-peasy.

I have to admit, the benefits of memberships make them one of my favorite products out of this whole list. Yet, they still aren’t the ultimate winner. And here’s why 👇

Cons of membership sites

1. You’ll need to deliver continuous value. (Like…all the time.)

   If you’re thinking, “huh, isn’t that true for all my services?” You’re right! Sorta…

   With a digital product or an online course, you only have to convince your clients to buy once. With memberships, you have to keep convincing your clients your membership is worth the investment every time a new billing cycle rolls around.

   And here’s where it gets tricky – when we’re spending money, the same exact areas of our brain which are responsible for pain get activated. Spending money literally hurts. Ouch.

   That means when your clients will see that monthly statement, they’ll want to get the bang for their buck.

   If you want your members to stay put, you will need to continuously pump out new, valuable content to keep them engaged, invest time into keeping your community vibrant and interactive… All that in addition to promoting your membership to new potential members at the same time.

   If this sounds like A LOT of work… it’s because it is!

   Out of all the products on this list, memberships are definitely the most time-intensive to produce and maintain. And you can’t really ignore this upkeep, either, because…

   
   
   
   

2. If your members are not engaged, they will churn.

   Or, to kill the fancy marketing speak, they will simply cancel their membership.

   And there goes your dream of stable recurring revenue. 💨

   People (typically) do NOT want to keep investing money in things they don’t use.

   I mean, have you ever cancelled your Netflix subscription because you noticed you haven’t watched any movies in a few months? Yeah…

   If we’re not actively using a service, or seeing results and improvements from it, it’s really hard to justify paying a recurring fee.

   You might think…

   “So what? If a few people cancel, I’ll find new ones” and you’re right — you of course always can (and should!) be attracting new people into your membership.

   But here’s the catch: once your members cancel, the probability of them buying something from you is actually even lower.

   Cancelling their membership will create this weird psychological reaction. Your audience might still find your content useful, and they might still think of you as an expert, but subconsciously, cancelling out on someone is sorta like a break-up. You might get back together, but will it ever be the same?

   
   
   
   

3. Managing the learning path for membership sites is… hard

   Here’s the one secret hack of all super successful info products – their most important metric is student success, not just the revenue. Because guess what? Glowing testimonials are one of the best ways to sell your offers.

   (More on effective ways to boost your sales in this article)

   And while your students’ results are not something you can influence 100%, the structure and curriculum of your info products plays a big, BIG role in them.

   👉 Messy, poorly structured programs with no clear implementation path do not deliver stellar results to their students.

   And here’s the problem with memberships: they don’t have a clear development plan for your students, making it that much harder to deliver solid outcomes.

   Factor in that new members will be joining in at random times, and are going to have different levels of expertise, and the picture gets even more complicated.

   Do you cater to the newbies? Then your old members will not feel engaged and will churn.

   Do you make previous membership materials available to all new members so they can get up to speed in their own time? Then you risk overwhelming your members with SO much information, it feels easier to cancel rather than to go through years of footage and materials.

   Memberships are tricky in this regard because if you design them as live cohorts to ensure linear progression of all members — you’re missing out on revenue.

   And in a scenario where you let everyone join whenever, you compromise the learning experience.

   It’s almost like a loose-loose situation.

   
   
   
   

Real-life examples of running a membership (and what you can learn from them)

Settle in for a story time…

Once upon a time, I used to market online courses for an agency, and seeing the success of their online courses, they decided to venture out and launch a mid-price membership.

The numbers of people joining were looking good, and that recurring revenue was looking nice, yet…

Trying to meet the members’ expectations was a constant struggle.

Even though we clearly communicated that the membership consisted of quarterly mastermind-like events and course material, the members wanted more.

More ongoing support, more calls, more events, new input and information every month. No matter how clear we were about what to expect, they just wanted more and more, all the time.

Because (refer to con 1 😅) seeing those 3 digits being booked from their account every month sure must’ve made them think, “Am I getting my money’s worth?…”

So even with a fully fledged marketing team dedicating their time and effort to this product, simply maintaining the membership took up a BIG chunk of our time.

Eventually, the company closed down the membership and went all in on online courses.

And that company is by far not the only example…

Take Vix Meldrew’s Grow & Glow membership. At its height it had over 1200 members, but as Vix says herself…

So she ended up closing the membership in January 2022.

Or look at the example of Elsynergy, an online education company run by 2 Instagram experts — Laura Haleydt and Ginny Fears — who have launched a social media membership for online business owners around 2020.

They shared a more out there stance, going so far as to say that memberships can be damaging to business.

The conclusion?

Memberships can work exceptionally well – granted you have a solid, clear strategy for them and know exactly why and how they fit into your business model.

But… if you’re just looking for the easiest way to add on a passive revenue stream to your business – they are not the best option.

📢 Group Coaching for Passive Income: Pros and Cons

First off, what is group coaching, exactly?

Group coaching is a form of online coaching where one coach works with a group of people, while all of them work towards their goal. But instead of a private 1:1 container, the development happens in a group setting.

Pros of group coaching

1. It’s a low investment way to test your framework.

   It’s not a must per se, but if you’re not 100% sure what to include (and what to leave out) in your curriculum, how to deliver the information, or you never taught your craft before — group coaching can be a real win-win.

   You can…

   👉 Test your framework BEFORE investing time, money, and effort into creating your course.

   👉 Gather your first testimonials

   👉 Test different approaches and material without committing to making it a “forever” part of your offer.

   Plus, there’s just something about teaching your craft live that just deepens your own understanding of it and help you nail your stellar delivery.

   
   

2. It’s a step up from 1:1 services.

   As opposed to the 1:1 containers, group coaching lets you somewhat scale your income by serving more people at once. Of course, it’s still not the same scale as with online courses, but it’s already a much better time pay off than the 1:1 services.
   
   

3. Community building

   Most of the group coaching programs have somewhat of an intimate feel to them. Which — you guessed it — fosters the sense of community and belonging.

   I know the relationships I forged from being part of group coaching programs were much deeper than from any course or membership I joined.

   There’s something special about going through the same journey simultaneously, and sharing experiences in a group — it lets people connect on a deeper level. And remember what we said about community? It’s your secret to a pivot proof business that survives in any economy!
   
   

4. Group coaching fosters shared learning

   By the nature of the format, learning in group coaching containers is shared.

   The beauty of it is that the participants will learn from each other just as much as they’ll learn from you.

   Synergies will spark off, diverse perspectives will merge together to create a fuller picture, and insights shared in the group will have a profound impact.

   This is hands down my fave part of the group coaching containers. When done right — they really can be such a treasure trove of knowledge and insights.
   

Cons of group coaching

1. It will get repetitive, fast.

   While group programs are great to hone your content and framework, if you're going to be delivering the same program multiple times, you'll be covering the same material over and over (and over) again.

   Participants in group coaching programs often face similar challenges or have similar or same questions. While this can be beneficial for the group, as they can learn from each other's experiences, it can also make the coaching process feel repetitive for you as the coach.

   And this repetition can get monotonous real fast and make your program feel more like a chore overtime. And that’s not the vibe!

   So unless you STRIVE in repeatable routines, beware that group coaching programs and their repetitiveness can wear you out pretty fast.

   
   

2. It’s not really passive

   You’ll still have to show up live to deliver the information and run the sessions with your students.

   So essentially, while you will be making more than with 1:1 services, you’re still very much selling time for money. As soon as you stop actively delivering your program — there’s no cash coming in.

   And well… That’s sorta the opposite of what’s we trying to do here. 😅

   
   

3. One wrong group member is enough to turn the whole group sour

   As much as you can (and should!) have a screening application process for more intimate programs of this sort, it still can happen that an off-vibe participant will slip through the cracks. You can’t really safeguard yourself from situations like these 100%.

   And in intimate groups like these, even one person is enough to ruin the experience for the entire cohort. 🥴

   Someone who’s overly critical, cynical or abrasive can quickly turn the atmosphere hostile and disrupt the flow of the entire group. And even though the behavior of a participant is not your direct responsibility, you still don’t want your clients to associate you and your offers with a negative feeling.

✨ Affiliate Marketing for Passive Income: Pros and Cons

Affiliate marketing has been exploding in popularity lately, with more and more people flocking to it as a ‘zero investment’ passive income stream that supposedly ‘anyone can do’, with near to no marketing or business experience required.

So what is affiliate marketing, really?

Affiliate marketing is like being a middleman in a business deal. You find a cool product or service that you really like and think others will too. So, you promote this product to your audience — and if they buy it following your recommendation, you get a small percentage of the sale — a commission.

That's your reward for connecting the buyer and seller. It's a win-win situation — the company gets a sale they might not have had, and you get paid for your promo efforts.

Let’s see what the whole hype is about, and whether affiliate marketing is the best choice for your passive income stream 👇

Pros of affiliate marketing

1. No hassle with the usual business admin tasks (creating the product, shipping, or customer service!)

   Since you’re simply recommending a product, all the usual admin work that comes about with running your own business is simply… non-existent.

   You not only don’t need to worry about creating the product, you also don’t need to take care of shipping, customer service or any biz admin tasks. And that means you can get started much, much faster!

2. No investment required to start

   Since you’re not actually making any products, the initial investment for starting with affiliate marketing can be as low as ZERO. No inventory costs, no software licenses, no fancy website needed.

   Of course, there’s still the cost of time you put into promoting the products–but more on that later!

3. Little to no business experience required

   Another pro that makes affiliate marketing so popular is that you don’t need any prior business knowledge to be able to get started and rolling with it.

   In theory, you can create a storefront on Amazon or simply share your affiliate link with your audience, and voilà — you’re ready to go.

   Still, affiliate marketing is nowhere near the first choice for generating passive income in my eyes– and here’s why…

Cons of Affiliate Marketing

1. You’ll need to invest substantial time into promotion

   While you don’t necessarily need to invest money into making the products you’re selling, you still need to grow an audience and promote your affiliate product to them.

   Just because it’s not your product doesn’t mean it’s easier to sell. You still need to go through the process of attracting your audience, warming them up, building rapport so they trust your recommendation and ultimately nudging them to actually buy.

   And depending on your status quo, it might take you a substantial amount of time and effort.

   So while you don’t need to make a monetary investment upfront, don’t make any mistakes here – you’re still ‘paying’. In this case — with your time… which you could be spending it doing something else–potentially more needle moving or lucrative.

   Side note: It’s the BIGGEST misconception that projects that don’t require monetary investment are free. Time is THE most valuable currency there is. Unlike cash, you can’t earn more of it. Ever. Once it’s gone — it’s gone.

   
   

2. You only get a fraction of the profit.

   I know, I know, that’s the entire essence of affiliate marketing. You don’t create the product, so you only get a cut of the profit. Fair, right?

   But here’s what you gotta consider if you’re looking for a steady stream of passive income – how many sales do you actually need to generate to be able to earn the amount you want?

   For physical products, you can expect to get about 3-7%.

   Online products (software, courses, etc.) tend to have higher commissions, but 30% is pretty much the highest rate you can expect.

   And on top of that, most companies out there limit the amount of time you get paid to anywhere between 6 and 24 months. Meaning, if someone buys a software they’re paying for monthly, you will only get your commission for the 6 months after the date of purchase.

   (There are single companies that will offer you higher commission rates, and lifetime commissions on the clients you bring them, but it’s the exception rather than the rule.)

   Now let’s say you’re promoting Descript, a video editing software. They’re paying out 15% commission for every sale you generate for the 1st year. And their yearly plans cost between $144 and $288 👇

That means that when someone buys a Pro yearly license, you get 43 dollars; and when someone buys a creator license, you get $21.

Now, how many sales do you need to generate to really make a living from affiliate marketing alone?

Let’s say you want to get to a baseline of 2k/month; and your average order is 32 dollars (cause will buy different plans)…

You’ll need roughly 62 sales – EACH MONTH – to generate $2k from affiliate marketing alone.

And while generating 62 sales/month is definitely possible, doing that month over month, for a brand you don’t own… just seems like a bit of a waste of your time and effort.

Compare this with selling your own online course, where you get to keep 100% of the profits. If you’re selling a course for $700, you only need THREE sales to generate the same $2k.

I know what I’m choosing for sure…

3. You’re dependent on the company you’re promoting

…because if they decide to close down their affiliate program, and they were your main source of income — well, you’re out of business.

And companies closing down affiliate programs happens more often than you might think.

AirBnB closed their in March 2021.

Canva closed theirs in July 2023.

The world of business is volatile — there’s no question about that.

And there will always be things that are outside your control. But if you’re running your OWN business, you have a lot more say in how things unfold (I mean… duh!).

But with affiliate marketing, you have near to ZERO influence on what happens with your source of income.

4. The competition is FIERCE

The flip side of affiliate marketing model having virtually no entry barrier is that the competition is fierce.

Now, if you’ve watched any of the content I put out, you know that one of the things I preach and believe in FIRMLY is that with the right strategies in place, you can stand out in ANY niche. Even in the most ‘saturated’ one.

P.S. I won’t go off-topic here, but if you want to learn HOW — I describe this strategy in detail in my free training.

And I stand by my point when it comes to online courses, but affiliate marketing… is a different story. 🤷‍♀️

When you’re selling your OWN products your brand and USPs helps you stand out. There’s quite simply no one else that can be YOU.

But when you’re promoting/recommending someone else’s product… There’s really not that many reasons why should people buy through your affiliate link vs. someone else’s.

Your audience just won’t have the same incentive to buy from you specifically.

They might still find your recommendation helpful and useful. They might even end up buying the product you recommended… but there’s no guarantee that they will ever click on your affiliate link or that their purchase can be attributed to you.

Which brings me to my next point…

5. You will likely not get the full commission you earned.

Because in order to do that 👆, every single purchase you helped generate needs to be reliably traced back to you.

Aaaand… The tech side of things is where affiliate marketing comes crackin’ down. And here’s why.

It’s gonna get a lil’ technical for a moment, but bear with me…

The way affiliate marketing works most of the time, is…

• You sign up to join an affiliate program.

• Get your affiliate link or affiliate code which will help your partner company attribute the sales to you.

• Whenever someone clicks on your link, cookies get assigned to them — and it’s based on these cookies that your partner company knows that the sale came through you specifically.

A cookie is simply a piece of code that gets saved in the browser.

You know when you’ve been shopping on the website, accidentally close the website, but then open it again and find that your shopping cart is still there? Things like that are possible because of cookies.

Now here’s where it gets tricky: if someone clicks your link on their phone in Safari, but ends up buying the product on their laptop in Chrome browser — there’s no way to track that.

If someone clears their browsing history and cookies and then buys — the sale also won’t get attributed to you.

And with the rise of privacy concerns, more and more browsers ban 3rd party cookies by default.

On top of that, companies offer different cookie duration: some go with 14 days, some 30 some 60 days. What that means for you is that if someone clicks your affiliate link BUT ends up buying after the cookie deadline ran out… the sale won’t get attributed to you.

All of which is to say — tracking how many sales you really generated for your partner company is not very reliable. And that is the sole factor that defines how much you will get paid out.

So you could be investing time and effort, doing a really great job at convincing people to buy and JUST because of the technical limitations you won’t get the entire revenue that you’ve earned.

6. You’re using your audience’s attention for promoting another company.

The final con of affiliate marketing model is that you’re using the attention and time of your audience to promote another company.

The trust of your audience — and their ability to take in ad messaging — is a finite resource.

If you’re using ALL of it for another company’s offers, you’re really just taking it out of your ‘ad budget’.

Now, I’m not saying you can’t ever sell or promote your products — that’s of course not the case.

But imagine watching a TV show when the commercials come on — you’re ready to watch 2-3 but if they’re going on for 60 minutes you’ll just switch off, right?

To sum up: all in all, affiliate marketing is a fantastic way to add some extra cash into your business. Keyword being: extra.

If your audience is already asking for your opinions and recommendations on what tools and products you use — why not share it with them AND earn a share of the profits for your honest recommendations?

But if you’re starting from ZERO, and passive income is your ultimate goal, affiliate marketing is just not the best first step.

☀️ Masterminds for Passive Income: Pros and Cons

At its core, a mastermind is like a team huddle where you come together with peers from your industry which are somewhat on the same level, and share your know-how, or help each other grow.

Pros of masterminds

1. Masterminds are great for curating your inner circle

   Some realness: Entrepreneurship can be lonely. 🥲😅 And masterminds can help you… feel less lonely? Let me explain…

   Unlike other products which normally follow the teacher-student hierarchy where you’re still somewhat “isolated at the top”, masterminds create a whole different dynamic.

   You come together with like-minded entrepreneurs who are more or less on the same level with you and probably are going through the same stuff as you.

   👉 The goal of masterminds is often not to “teach” something, but to create a safe space where you can openly discuss your difficulties and grow together.

   That’s why they often feel way more open and vulnerable than any other type of online product.

   Since the atmosphere is so intimate (and often, NDAs are involved 😉), people tend to open up and share more than they would in, let’s say, a membership.

   
   
   

2. You can go deep on your topic of expertise

   Because masterminds are rarely for absolute beginners in a topic, you can really drill down and go deep on your subjects. And that can be a welcome change, especially if your other programs were geared more towards beginners.

   Truth is, regardless of how excited you are about a certain topic or subject, if there’s no development, it can start feeling repetitive really fast.

   Masterminds can be an antidote to that and offer you the opportunity to dive deep and keep evolving in your area.

   
   
   

3. Masterminds are great for brand building

   Marketing your business purely online (through social media and YouTube and ads) is a fantastic, low-cost way to reach global audiences.

   But if your goal is to build a memorable, love brand that can stand the test of time, there’s just NO way around connecting with your audience in real, offline life.

   When all our senses are engaged, we perceive the information differently, we remember it much better, we’re much more involved.

   And since masterminds often involve offline activities in some form, they be incredible for brand building. Sure, they won’t let you reach big masses of people, quite like purely online products can; but – if done right – they will help you create a tribe of real superfans.

   And like Pat Flynn said in his must-read book Superfans…

Cons of Masterminds

When it comes to the cons, masterminds share a lot of the pitfalls with group coaching programs…

1. Masterminds are not really passive income

   You will still have to actively be present during the mastermind — often live. While there are masterminds that happen online, most high ticket experiences like that include at least some sort of offline experience.

   And just like with group coaching programs – if you’re not actively delivering a mastermind, you’re not making money.
   
   
   

2. Group dynamics can be tricky

   The flip side of working in an intimate group setting is that you need to pay extra close attention to group dynamics.

   One trouble-maker in the group is enough to derail even the best organized mastermind, tarnish the experience for the rest of the participants, and just add a LOT more headache for you.

   
   
   

3. There’s A LOT of planning & prep involved

   Pulling a mastermind together requires A LOT of time and energy. Don’t let the fact that you don’t need to record videos or create a downloadables fool you into thinking that masterminds are an easy way to charge a premium price for an event you can wing.

   Great masterminds require careful thought and preparation on your part: the way you structure the activities, how you manage the energy of the group, how you ensure the experience feels delightful to your participants — all these things matter.

   A mastermind your participants will love won’t just happen — you need to carefully engineer it. And while it might seem like an easy task — I know from first-hand experience of working on masterminds, this could not be further from the truth.
   
   
   

4. Masterminds can be really, really energy draining

   Even if you’re 100% extroverted and THRIVE when you’re surrounded by people, running a mastermind can be downright exhausting.

   When you’re simultaneously the host, the service provider and the organizer of the event, your energy will inevitably be stretched.

   So while masterminds can be a very nice cash injection for your business, it’s almost never sustainable to be running one mastermind after the other, which makes them not the best choice for your flagship product.

🖥️ Online Courses for Passive Income: Pros and Cons

And finally, online courses. What exactly makes them the best choice for a passive income online product? Let’s look at the pros and cons 👇

Pros of Online Courses

1. Online Courses are very scalable

   Once you create your online course, you can sell it over and over and over again to an unlimited number of people, without incurring additional costs.

   Compare that to selling your 1:1 services — where the more clients you have, the more team members you need to serve them, it’s a whole different league!

   And what’s even better — once you get your course up and running and set up your marketing funnel to run on autopilot, you don’t even need to be actively present in your business to make sales.

   You don’t need to get on the sales calls to bring in the revenue, and your income isn’t directly linked to the number of hours of work you put in.

   And setting up that funnel is NOT as complicated as it might seem. You don’t need decades of experience OR a huge audience to get started.

   Now, I’m not going to go into detail on how to do that in this article, but I do cover the process of how to set up a funnel that brings in sales 24/7 for your online course extensively in my free training here.

   
   

2. They can deliver a profound transformation to your students

   In comparison to e-books and downloadables which can only cover that much, online courses can go really in-depth and deliver a real profound transformation to your students.

   And the more glowing testimonials you have and the more your clients associate your offers with progress and transformation – the higher your sales!

   Plus, since an online course can deliver a much more dramatic transformation than let’s say an e-book, you can charge a higher price for it, which means…

   
   

3. You can hit your revenue goals faster (and easier)

   Because you can charge a mid to high price point on your course, you won’t need as many sales to hit your revenue goals as you would with digital products, for example.

   Let’s do some quick math:

   If you want to earn $20k a month, and you’re selling a 20 dollar e-book to do that, you’ll need ONE THOUSAND sales to hit your goal. That’s a lottt of sales.

   Compare that to selling, for example, a 1k course — you’ll only need TWENTY sales. Sounds way more doable, right?

   
   

4. They give a massive boost to your personal brand

   One thing I preach ALL THE TIME is that teaching is THE single best way to become the top authority in your niche. It positions you as the ultimate expert on your subject and helps you really stand out from the crowd.

   And that leads to a whole host of amazing benefits: guest podcast invites, speaking engagements, book deals.

   And as a cherry on top: if you’re running your service business in parallel to your online course business, creating a course will spike up the demand for your tailored services.

   Plus, when you’re seen as the go-to authority in your niche, you don’t have to compete on pricing any longer.

   Say adieu to having to justify your prices against a random freelancer from Fiverr or having to counter an offer from a competitor. People don't haggle or endlessly compare prices of someone they view as the top authority. Because they want your expertise, your insights, and your unique spin that you bring to the table.

   
   

5. Low overhead costs

   After the initial investment of time and perhaps some money in creating the course (although you can do it on a budget, OR completely for free, too!), ongoing expenses are typically minimal.

   If you chose the course hosting platform that doesn’t charge a transaction fee and that takes care of most of the things on your business, the increase in cost as you add on more students are minimal.

   Online courses have one of the highest profit margins out of this entire list — which is a nice cherry on top.

Cons of Online Courses

1. Significant initial set up time

   Now, as we’ve established at the start: any passive income stream requires initial set up time.

   But it is true that creating an online course and the marketing funnel for it will take you longer than let’s say whipping up an e-book in Canva. And you have to set your expectations straight from the get go: creating an online course can take you anywhere between a couple of weeks to a few months.

   I see lottts of new course creators get discouraged by the work load and give up before they even had the chance to give it a real go. And it’s a shame, because online courses can be an amazing way to secure your income for YEARS to come.

   Now, creating your online course doesn’t ave to be overwhelming. The easiest shortcut to speed up the process is to get your hands on a strategy that has been proven to work and the resources that will help you save time.

   I.e., the exact things I share inside the Online Launch Academy 👉 This isn't just another course about courses. It's a culmination of tested strategies and insights from an award-winning marketer who has worked on multiple 7-figure courses — yours truly 💁‍♀️

2. Tech Challenges

Alright, let's get real about the tech side of things. 😅 Online courses have a lot of moving parts: from email marketing, to webinars, to your landing pages, and the actual course itself… And let’s just say it’s not always a walk in the park.

One day you're wrestling with video edits, and the next, you're trying to figure out why your payment gateway isn't playing nice with your course platform. And don't even get me started on unexpected website downtimes. Nothing like a server crash to spice up your day, right? 😬

Online course tech set up doesn’t have to be complex… but it can be.

Especially if you're blindly throwing together a hodgepodge of tools or creating unnecessarily complicated workflows – simply because you aren’t sure what the easiest way is.

P.S. This is the EXACT reason I included Done For You templates and step-by-step tech tutorials in the Online Launch Academy.

Because I don't want you to get bogged down with learning the tech ropes, I want you to hit the ground running ASAP. So you can just click “import” — and a funnel will already be in your online course hosting platform, email sequences prepped and ready — all you need to do is change your copy and add in your branding.

I told ya – it doesn’t have to be hard. 😉

3. Continuous updates

Depending on the topic of your course, you might find yourself back in the studio more often than you’d expected. Thing is, most courses are not set-it-and-forget-it.

Take a course on IG reels, for example. With the speed at which social media platforms evolve, you'll probably find yourself updating content every time IG drops a new feature or changes its algorithm. Which is like what, every day? 😅

On the flip side, if you've got a course on something timeless, like photography, you might only need to update it every once in a while.

So, while the dream is to create a course and watch the passive income roll in, the reality might involve a bit more upkeep.

But hey, that's where the fun is, right?

If you chose a course topic that is not only profitable, but that you truly LOVE, keeping it up-to-date won’t feel like a chore but rather like being in YOUR zone.

If you’re reading this going “Um…nope, my topic is meh” — you need to rethink your idea ASAP. My FREE guide on finding your million dollar course idea has all the step by steps you need.

So, why are online courses are the superior passive income stream?

When you stack online courses against things like digital products, group coaching, and affiliate marketing, courses a clear winner.

Digital products are super easy to whip up in a jiffy, BUT (and it’s a big but) they won’t build your brand or deliver big transformations to your clients.

Plus, because they’re usually sold at a lower price point, you need to sell a lot of them to hit your revenue targets. And since the time it will take to build out your funnel for a digital product is roughly the same as with an online course — why not go for the bigger fish?

Memberships can be a great way to build recurring revenue for your business. But if you’re just starting out solo and don’t have a team to help you out, managing membership content for existing students + taking care of marketing to attract new ones will likely take up alll of your free time.

Group coaching and Masterminds are great, but let's be real, it’s not truly passive, you’re still going to be trading time for money and there's only one of you and 24 hours in a day.

With affiliate marketing, you're basically hustling for someone else's brand and only getting paid a fraction of the profit.

Now, online courses? That's where the magic happens. You help your students level up their lives, and can generate passive income for years to come. All the while building your personal brand!

Yes, creating an online course requires a significant time investment upfront. But once it's up and running, it can generate passive income for YEARS.

Conclusion: Which Product Is The Best for Generating Passive Income?

Phew, now… to summarize:

👉 If you’re JUST starting out, and are looking for the best bang for your buck — online courses are your best bet. They will give you the best return on your time investment, will help you solidify your expert brand, and will bring that passive income.

And long term, once your online course is up and running like a well oiled machine, you can add on other types to complement your offer suite.

And hey, if you're excited to dive in and get started with your online course, I've got just the thing for you. Watch my free training, where I'll walk you through the A to Z of course creation and marketing. No fluff, just actionable steps to get you rolling.

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