We explained how passive income could generate a flow of money without requiring additional effort. Contrary to the equation, work hours = money, specific to the architectural sector, as with all services, earning passive income is not related to the number of hours you work there.
Take the case of an e-book that is doing well and selling like hotcakes. Once this e-book is online and ready for sale, it remains available for sale, representing a regular additional income. So, rather than being paid at the end of a project, income streams like these generate money almost automatically once established. With a passive income by your side, you can save more money for your retirement and in much less time if done well. You enjoy more freedom as you become less financially dependent on your service business: free to do what you want (like spending more time with friends and family) or choose what to work on (interesting architectural projects, increasing your passive income, charity projects, new income.
We emphasize, however, that creating such an income stream takes work (and requires considerable initial effort, dedication and passion). Even once established, the effort is required to maintain it and his development. If you are looking for an easy way to get rich overnight, go your way. However, if you are ready and have the patience for a few more years of extra, long-term, focused work, you can count on a certain passive income. You will discover it through their stories; there are no secrets.
No formula or magic wand will allow you to generate £5000 of recurring monthly income overnight. On the other hand – they all confirm this – if you take the time and make an effort to learn from the experience of others, if you are persistent, willing to make mistakes and learn from them, and if you show determination, then you will get there. Eventually (maybe even sooner than you think), your efforts will lead to a (small) extra stream of passive income.
Before sharing these stories, we want to dwell on 6 effective methods proven among architects to generate additional income passively. In future articles, we’ll cover each of them (and more), explaining how to get started and sharing lessons learned through our interviews with the professionals named above.
Passive Income Streams
Write a book on a topic you know about that will save other people (businesses) time, avoid mistakes, or make more money. Sell it online to as many people as you can. Example: the annual sale of 500 copies of a £49 e-book generates a passive monthly income of £2041.
Each architect has expertise (whether running or marketing an architectural firm, using CAD software, passing specific exams, isolating houses, urban design, or designing a website that attracts the projects you are looking for…). Be sure: many architects want to learn from you and your skills. If your knowledge allows other companies to save time or earn more money, the purchase of a £49 e-book will not pose any problem for them since it is vastly profitable. If your expertise is in a particular area, assume that 90% of your target audience knows less about this area than you do. No need to be a go-rou: Jump in and start sharing (or selling) your knowledge as a package. Put aside your fears or shyness, and turn your knowledge into an e-book for sale online. A fine example is the book “101 Little Architectural Secrets That Do Great Projects”, well-known among architects, written by Matthew Frederick.
The advantage of an e-book lies in its relatively low investment cost and risk factor. It will take a while to incorporate all your knowledge into a book with an enticing cover, but writing an e-book is easier than writing software or inventing a tangible product.
This allows you to experiment with creating a (modest) stream of passive income without investing too much time and money. Everything you learn from writing your e-book, promoting it, selling it, or pricing it can be applied to other products and areas. I’m not the only one saying this. Writing an e-book and selling it will train your brain to think of “scalable products”.
Besides, I’ve never written an e-book, so I immediately jumped into building SaaS software – software as a service – a considerable investment. My first attempt was a failure. I devoted a full year of my life to it: an ill-advised decision. I learned so much from it that my second SaaS business was doing pretty well and growing. Writing an e-book is always on my list of things I want to accomplish in my life.
As is often the case with product-based businesses, selling a book online is entirely automatic:
- The consumer makes a purchase.
- The book is delivered to them.
- The money goes to your account.
The hardest part is standing out and successfully selling the book. We’ll talk about it along with other valuable information and proven methods in our article on building and selling e-books (and products in general). A hint: building an audience is the key to selling products. The authors of e-books are often perceived as a reference in the field: perfect for building up an audience of readers. This is why some free e-books, such as Enoch Sears Business of Architecture, are offered for free.
Online Advertising and Remuneration
Create free online content (typically a blog) and earn money through links, banners, commissions, and ads. “Stupid and old fashioned”, I hear you thinking this. But YOU ARE MISTAKEN. There are people who earn a monthly recurring income of $100,000 through online commissions and advertisements posted on their blogs. If your goal is to do the same, you will likely be disappointed or frustrated. In contrast, there are plenty of other, more realistic examples of people successfully generating an automatic, passive income stream online.
Think about what forms your expertise, something you are passionate about, and start a blog about it or share the content in another way (YouTube channel, podcast etc.). If your content is good, genuine, and sincere if you’re persistent and willing to write consistently for years to come, and if you’re using the proper method to stand out from the crowd (more to come in a future post), you will undoubtedly derive some income from it. Ask ANY blogger for confirmation.
Blogging is within everyone’s reach. It’s simple, yet so many people start a blog and give up on it. Why? Because blogging takes time and effort. It takes time for the work to pay off. Often, this period is equivalent to months or years, and people give up (but hey, you won’t…right?). It takes years to build up an attentive following, not weeks. Building an audience isn’t easy and time-consuming. Still, once you’ve built their loyalty (after years of hard work), you can use that audience to generate ad revenue and sell your own products (such as an e-book, course, or any other product).
Many sites over the Internet have built up significant audiences: Many welcome nearly millions of visitors monthly! These sites display advertisements and affiliate links on every page. Interesting content rhymes with more visitors, therefore, more income for them. Don’t be scared off by these examples: they remain rare, and you will probably not reach this impressive number of visitors. However, I remain convinced that you, as an architect/engineer, will be able to build an authentic audience for yourself by offering exciting content aimed at a carefully targeted niche.
Create or design a product that solves a problem. Sell it as much as possible. Although designing and selling products may seem distant and perhaps even unrealistic for many architects, the proper process and modern technology make things much more achievable. Architects are often creative, able to draw their ideas, and accustomed to thinking about how something works for the end user.
You may have a solution in mind for a recurring problem. Everything related to renewable energy in the construction sector is booming. The use of the Internet in buildings (Internet of things) and cities (smart cities) is still in its infancy. The world changes every day, and with it comes new product launch opportunities.
3D printing allows you to request feedback or validation of a concept (sometimes even the sale!) before even manufacturing it, representing a considerable investment. Sites like Kickstarter allow you to raise funds quickly and validate your product ideas based on the support of a community (because you need to convince people on Kickstarter to sell your product later).
Build software that saves businesses time or money. Sell it online as much as you can, preferably through a subscription. In addition to selling my services as a software developer (I run my own small software company), I have created several Saas (software as a service) products. My first attempts failed, but my mistakes allowed me to learn. I think the main mistake is to develop software that does not solve a problem. So many people have an excellent “idea” that doesn’t address a problem, or the problem is too small to concern others. It’s so hard to sell something that doesn’t solve anything! If you solve a real problem or tackle a pain point, people are willing to pay for your solution.
As an architect/engineer, you know what it’s like to run an architectural/engineering firm, so you know the potential flaws. What kind of missing software would save you hours every day? Is there a category of administration that you hate that could be automated? Tackling the problems you encounter yourself is what works best in software development.
The potential of software that overcomes a difficulty is enormous. You don’t need millions of user readers. Imagine 300 users – which is not unrealistic – who pay £40 per month to use your software, and you are already at £12,000 per month in recurring income. SaaS businesses are highly scalable. The cost of an additional person using your software is close to zero. Whether the number of people using your software is 10 or 10,000, the development cost remains virtually the same.
Creating and selling software will take time and effort, and you will need to invest time and money in developing and marketing the software. Compared to an e-book, for example, there are better routes than this one. One could argue that software represents a risky/high-reward option for generating passive income.
Take the example of Freshbooks, a relatively well-known SaaS accounting software. Freshbooks founder Mike McDerment ran a design studio before tackling a problem he often encountered: a simple way to bill his customers. This led him to launch Freshbooks today—now used by millions of people. Other examples: Sefaira, started by an engineer who saw a software opportunity to help architects and engineers design high-performance buildings, and Bricscad, developed by an architect who found existing CAD solutions unsatisfactory and complex.
Although there is some risk in developing software (it might not take off at all despite a relatively high initial investment cost), there are several ways to limit the risk to ensure that you don’t launch a product that no one wants to buy. I will detail the history of ArchiSnapper and how we had customers even before the first coding in a future article.
Gather a body of knowledge that will save others time or make more money. Pay for access to this knowledge. There are so many areas to master in the field of architecture and engineering: general management, marketing, CAD drawing, LEED exams, stability calculations, impact analysis, news trends in design, and the list goes on. Learning something on your own through trial and error can be expensive and time-consuming, unlike buying a well-researched knowledge package.
Even though everything can be found online, companies often need more time and energy to figure it out independently. They prefer to pay for access to well-researched and directly applicable knowledge. If you are an expert in a niche field, why not share your knowledge with others and sell your knowledge? You have already made some mistakes, followed the learning curve, and identified the details that matter. Know that many companies and professionals are willing to pay for a course to avoid making the same mistakes and accelerate their learning curve.
Whatever your expertise, I’m sure you have much to teach other architects. These days, platforms such as Udemy or Lynda make it easy to sell courses online.
Take Part in Construction Projects
Invest in real estate projects by charging little (or nothing) for your role as an architect/engineer. Own part of the real estate project and the future income it will generate.
As an architect/engineer, you are very well placed to invest in real estate – better than anyone. You can estimate if a house is in good condition, see the possibilities of transforming a building into 3 apartments, predict the cost, identify the potential difficulties that a certain building or construction project represents, etc. In addition, sooner or later, you will probably come into contact with small private investors or companies that invest in real estate, especially if you are actively looking for it.
I have heard of architects participating in construction projects. Their approach is to reduce their fees in exchange for future income generated by the rental/sale of the building (“sweat equity”). The words “rental income” are, for me, synonymous with significant passive income.
Do the math: If you consistently apply this principle, over time, you’ll own a 5% stake in 20 small real estate projects, each generating income of around $600 per month.