A great post from Seth Godin’s blog:

While you’ve been wishing for the inspiration to start something great, thousands of entrepreneurs have used the prevailing sense of uncertainty to start truly remarkable companies. Lucrative Web businesses, successful tool catalogs, fast-growing PR firms — all have started on a shoestring, and all have been profitable ahead of schedule. The Web is dead, right? Well, try telling that to Meetup.com, a new Web site that helps organize meetings anywhere and on any topic. It has 200,000 registered users — and counting.

Read the rest of the post here.

Also of interest: 37 Signals explains how to start accepting credit cards on your website when you launch a new product.

Here is a great 20 minute talk on weaning the US off oil. Particularly intriguing is the idea that this could actually be hugely profitable (not government mandated). Entrepreneurs in this sector will make a killing off of energy innovations in the next ten to twenty years.

P.S. If you aren’t watching all of the TED talks, you’re missing out.

This is the final part of my series on 6 Ways To Generate Passive Income.

Today we will discuss the final (and I think best) way to generate passive income. As I stated in the first article:

The way I evaluate any claim behind a method of building wealth or generating passive income is this: how many people can I find who have used this method to accomplish what I’m trying to do?

One of the best things I ever learned about success is to simply find successful people and model what they are doing, while ignoring the advice that unsuccessful people give you.

Is real estate a reliable way to generate passive income? Lets see…

CNN says that “Forty-six percent of those surveyed [millionaires] own investment real estate”.

Economics Edge says that the “real estate industry has produced the largest number of self-made multi-millionaires”.

Best selling author Brian Tracy did the research and says that 74% of millionaires are those who started their own business (included in this is real estate, but its unclear what percent).

(Interesting sidebar: less than 1% of millionaires consist of those who made their money in show business, sports, music, writing, inventions, or the lottery combined.)

So clearly real estate is a popular means of acquiring wealth. Many others have used it successfully. And investment real estate by its very nature is passive income.

I’m sure you can validate this for yourself by thinking of the wealthiest people you know or have personally met at some point in your life. Chances are they either (1) own a business, (2) own quite a bit of real estate, or (3) both.

Let’s look at the pros and cons…

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This is part 3 of my series on generating passive income.

So far we’ve looked at how Blogging is a good idea, but doesn’t generate passive income. How eBooks and information products have been wildly successful for some, but are overall not a reliable way of generating passive income (the success rate is low). And today we’re going to briefly cover three other common passive income generating ideas.

Virtual Real Estate

Just as in “real” real estate where there is a limited supply of dirt that appreciates in value, there is a limited supply of domain names on the internet which are also increasing in value.

Virtual real estate is the concept of buying up domain names either to monetize them today or because you believe they will increase in value. Some people like John Reese seem to think that this is going to make a whole bunch of millionaires in the coming years. And it certainly has already created a handful of them, like Kevin Ham who has a portfolio of domains worth over $300 million.

Of course, the first complaint you will hear is that all the good domain names are taken! Some have taken a unique approach, like Russell Horowitz who focused on “local” domain names (instead of sunglasses.com he is buying houstonsunglasses.com or newyorksunglasses.com) or Craig Lovik who bought domains with common misspellings in them.

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This is part 2 of my series on generating passive income.

eBook’s and info products are a very popular passive income generator right now, and I have to say that yes they can really work.

To read more, I would recommend John Reese’s products (his Reese Reports in particular), Yanik Silver’s, and the Warrior forum where you can get a ton of free advice.

To me eBooks and information products are synonymous with the “internet marketing” community. Basically what these guys have figured out is that marketing is often more important than the product itself. If you love marketing, this could be a big area for you to explore.

How Does It Work?

Here are a few ways people create information products:

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One topic I cover in Breaking Free is about the benefits of working at home.

While Tim Ferris writes about it from the standpoint of convincing your boss to let you, I write about it from the standpoint of owning your own business so your home is your office.

How much is your commute really costing you?

By the way, if you do have to commute, one of the best ways to turn that lemon into lemonade is with audio books.

I just had dinner with a friend of mine, we’ll call him G. He was stressing about finding a domain name for the IT company he started to “break free“.

If you want a great domain (not just a good one) and you’ve got $1000, buy one at sedo.com. It’s far easier than struggling to find one that hasn’t been taken yet.

But assuming you want to find one that is undiscovered and only pay $5.99 to register it…here is how you should proceed.
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Question from a reader:

Brian,

I am loving the book for its inspiration as I have been contemplating quiting my job. I have more than sufficient $ to take some time off, so last Friday I went ahead and put in my two weeks. It’s a scary feeling to do this especially without a side business already up and running, but I can afford it. Do you know of a good resource to use to come up with business ideas?

Best,
A.V.

A.V.,

Great question, and one that is on many people’s minds. Here are some ideas in no particular order:

1. Look at what frustrates you. Whats annoying. Whats hard to use. Imagine you go to a restaurant to meet a friend. But you get lost on the way, the waitress forgets your order, and the table you are sitting at wobbles. Three annoyances, and three businesses exist to solve those problems. They are all around you!
2. Lots of things probably frustrate you, but pay attention to what frustrates other people. Where you can solve someones pain, there is great money to be made. Keep a journal and write down any time you see someone get upset for a week.
3. Type into Google “entrepreneurs [your city name]” and join at least one club in your city. Most large cities have some sort of entrepreneurship organization that meets regularly (could also be indirectly related such as networking, marketing, etc). Some cost a little money, some are free. Whatever, join them. Getting around like-minded people is priceless, and will get your brain thinking in totally new ways. If you can’t find any club, join Toastmasters. In any given week, I attend at least three such clubs.
4. Read Business 2.0. It’s actually dangerous for me to read it because by the time I’m done, I’m ready to drop everything I’m doing and launch my next great project. It’s way better than Entrepreneur Magazine, Forbes, Money, and Business Week combined.
5. Go talk to the retired executives at SCORE (it’s free) and stay in touch with them by email.

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Freddie Rick Watch BetterTrades Coach

Here is a great video that was posted on Guy Kawasaki’s blog which reinforces my main message:

• I don’t believe in business plans
• You probably don’t need venture capital
• Just get started with something, and grow from there
• If it doesn’t work out, you’ve lost nothing, and learned a valuable lesson
• Your next try will be that much more likely to succeed

It’s a discussion panel with 5 entrepreneurs who bootstrapped.

Markus Frind, the founder of PlentyOfFish.com is my new hero (James Hong of Hot or Not is a close second). Marcus spends about two hours a day in his underwear managing a free dating website that gets twelve billion page views a year. He is the only employee, and he only has one server. And by the way, he makes $5-6 million/year with Google ads.

Check out the video here.

Sharon wrote in to tell me about this article from Money Magazine that discusses 8 entrepreneurs and the businesses they started.

I couldn’t help feeling a little strange after reading through. Are these really good examples of companies one should start? Some of them seemed like poor choices that spent way too much to get started.

• Does the world need another smoothie shop? I imagine you’d have much greater success starting a Jamba juice or Smoothie King franchise then trying to reinvent the wheel.
• Why does it take $200k to start a board game company? Couldn’t you get prototypes made for a couple hundred dollars (at least enough to show at trade shows and get your first orders?)
• The chances of succeeding when opening a chocolate shop seem slim.

Sandy Webster seems to be one of the few in the group who bootstrapped correctly.

What this article demonstrates to me is that even if you take a mediocre business idea, you can still be successful if the owner is incredibly passionate. Personally, I’d rather start with a less risky idea, but anything is possible!