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How to Earn Passive Income Online (3 Legit Models From $5 Million Entrepreneur) - YouTube
Channel: Pat Flynn
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there are several different ways to
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generate passive income and make money
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online and in this video I'm going to
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share three completely different
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legitimate strategies that you could
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choose from to build a passive income
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business of your own since 2008 I built
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several different businesses that have
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utilized one or more of these business
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models I've been featured in magazines
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and articles across the globe and since
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I started my journey I've generated over
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five million dollars in earnings in fact
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all of my income and expenses since
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october of 2008 have been tracked and
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can be seen online publicly on
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smartpassiveincome.com
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now instead of reading all of those
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income reports make sure you stick
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around because I'm gonna distilled the
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decade of learning into three completely
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different business models that you can
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choose from so you can decide which path
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you want to go down from this day
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forward those three models are the FP
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model the AAA model and the EP model
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what are those well I'll tell you in
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this video but the real trick is finding
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out which one actually best suits you
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and to help you I'm gonna give you a
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real-life example of each of these and
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how to get started hi my name is pat
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flynn founder of smartpassiveincome.com
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and i'm here to help you make more money
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save more time and help more people -
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now let's talk passive income what is
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passive income well there are many
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different definitions of it but my
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definition and the way that I like to
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teach it is its building online
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businesses that can work for you that
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allow you to generate income and grow
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and scale without a real-time presence
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in other words we don't trade our time
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for money you build something upfront
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that can continue to work for you over
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time Pat is this even possible yes it's
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definitely possible is this something
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you can do without investing a boatload
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of money yes unlike real estate or
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investing in a stock market you can
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build something with relatively little
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to no money that can continue to pay you
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over and over again if partly is this
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something that's easy to do
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no definitely not passive income is not
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easy some people are gonna tell you
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otherwise
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they're gonna tell you about a magic
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button or a formula or a blueprint where
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you can get rich all by doing nothing
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and don't even get me started on the
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people who say that this stuff can
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happen overnight it doesn't and if
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that's what you're looking for well I'm
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sorry you're in the wrong place because
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guess what it does not happen overnight
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it takes a lot of hard work you've got
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to put in the hours you've got to work
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hard now so you can build these assets
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that can continue to work for you later
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because once you start to build that
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passive income stream you start to have
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a little bit of flexibility and freedom
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you can have more time to do more things
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or do less things or build even more
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passive income streams so please as I
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introduce these three business models to
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you do realize that they yes take time
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but also it's very much worth it cool
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cool all right let's get started the FP
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model stands for the freelance to
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product model starting with freelancing
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and then finding a problem that could be
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solved with a product freelancing is
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working for different companies and
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getting paid for certain skills that you
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have that they need now you might be
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thinking Pat what the heck you said this
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was about passive income well
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freelancing is active income you are
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training your time for money what's the
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deal well the deal is we're just getting
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started so hear me out first of all
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freelancing I feel is the number one way
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to get started in building a business of
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your own you're gonna learn a lot of
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skills running your own business as a
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freelancer and not only that you're
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gonna get paid much quicker too than if
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you just started with trying to make
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passive income first because that's a
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great way to fail you need to start with
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the active income first before you can
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convert that into the Pacific um later
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but beyond that my absolute favorite
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reason why I recommend freelancing to
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start is this you get to know the
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industry that you're in quite well
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perhaps so well that you can find the
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holes meaning the opportunities for you
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to create a product based passive income
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business in other words by freelancing
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in a space you have interested in you
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not only have the opportunity to make
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money now from your skill sets but you
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also have the opportunity to find
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opportunities to build products that can
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continue to help you earn money over
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time let me tell you about my friend
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Brian castle he too was once a
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freelancer who was only making money by
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billing client after client I actually
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used to build her project I come from a
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background as a freelance web designer
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and you know I used to kind of build her
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project and occasionally by the hour but
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either way you know it was still very
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much tied to my time like I could only
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fit in a certain number of projects and
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I was basically living like project to
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project throughout the year after doing
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web design for years he eventually found
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a huge need for website and design in
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the restaurant and food truck space then
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after getting tired of working with
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client after client he decided to turn
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his service based business into a
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productized business I kind of wanted to
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move away from that and get into a more
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standardized predictable service and you
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know essentially a product I service
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that just does one thing extremely well
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solves one problem exceptionally well
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and then you know it's really designed
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for one particular client and that just
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removes that whole discovery negotiation
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from the table so that I can just focus
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on providing a great service and and
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kind of leave it at that so what he did
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was remove all that individual client
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work and then create actual templates
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and products that would serve that
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market they would pick a product he
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would serve it to them either by just
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choosing it and having it already
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available or having his team other human
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beings actually create those things for
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those clients you can catch more of
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Brian in his interview on session 158 of
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the smart passive income podcast which I
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will link to in the description below
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all active businesses can be shifted and
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turned into a more passive business by
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either having products that are already
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made by having software do a lot of
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legwork for you or even other human
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beings do that work too now let me tell
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you about how I made my first passive
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income online back in 2008 with business
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model number two the AAA model stands
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for Alcoholics Anonymous anti-aircraft
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Alumni Association acronym abuse just
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kidding
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so I get a little carried away sometimes
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it actually stands for audience and
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advertising model it's one of the most
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used forms of building passive income
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online however it does come with a fair
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amount of warnings which I will share
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with you in just a minute if you're a
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youtuber making money through Adsense
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then you were following the AAA model
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because you're building an audience and
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then generating an income through your
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viewership if you're a blogger and
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you're getting a lot of traffic to your
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website and you are making money through
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advertising and or sponsorships well
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then you're also following the AAA model
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a podcast with sponsorships
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you get the idea right you had this
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audience you had these advertisers who
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want to get in front of that audience
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and you marry the two and you get paid
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for it when I started building my
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architectural related business back in
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2008 online my first dollar was actually
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made through advertising I'd spent
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months building credibility in this
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space and actually getting traffic to my
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website and then I thrown out on my
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website one day and I made $1.00 in 18
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cents I mean sure I can find that
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underneath my couch cushion but that
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wasn't the point the point was the fact
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that I actually was able to build
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something online put an ad and actually
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make money without me having to do
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anything although of course it took
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several months to create that but point
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being it was possible it motivated me to
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move forward eventually I put more ads
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on the site my traffic started to grow
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and then I was earning anywhere between
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30 and 50 dollars a day just through
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advertising loon now here's the funny
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thing
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I built a completely brand new website I
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got even more traffic to that one than
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my previous one I put ads on it and I
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didn't even make more than fifty dollars
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after six months of advertising and
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that's one of the downsides of the AAA
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model
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ads are not super predictable especially
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auto-generated ones like ones through
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Google Adsense and such secondly
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although I've done advertising and
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sponsorships in the past and have made
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hundreds of thousands of dollars doing
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so the truth is that it takes a lot of
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time for this business model to actually
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start to generate an income for you
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because you need to build that audience
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first and it takes time to build an
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audience and more than that what happens
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when you build this audience into
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following on a platform that ends up
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changing their algorithm or how often
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you actually get seen in front of this
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audience that you've built super
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stressful for a lot of people which is
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why I always recommend building email
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lists in order to build an audience you
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need a platform you need to have
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something worth following something
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worth sharing and valuable to others and
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that of course takes time now that's not
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to say that you can't build a huge
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audience in a very short period of time
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a lot of people have become quite famous
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in a short time period who's often as we
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hear about those stories we also don't
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hear about the stories the millions of
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people who are struggling every single
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day to just get a few more fans and
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followers but the cool thing is you
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don't need a huge audience in order to
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generate passive income and make money
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online that's why if I had the choice
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I'd actually go with the e P model the
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EP model stands for the expert to
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product model now don't let the term
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expert scare you away because it's
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probably not what you think most people
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think an expert is somebody who is a
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master at something somebody with a
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special degree your special training
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somebody who's put in those
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10,000 hours who is just great that's
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not the kind of expert I'm talking I'm
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talking about the fact that you can be
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an expert in the eyes of somebody else
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just by knowing a little bit more than
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that and guess what you have experiences
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you have ideas you have opinions that
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are all unique to you the goal is to
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become just expert enough to earn the
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trust from others so that they can want
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to learn even more journey so quick
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story remember that dollar 18 cents I
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found in the couch among other things
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well even when that increased to thirty
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to fifty dollars a day it still wasn't
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enough to live off us so I looked for
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other options in August of 2008 after a
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few people started to know who I was and
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how I was helping them pass this exam on
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my blog I wrote an e-book that I sold
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for $19.95 it included all the
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information I knew about how to pass
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this exam and I just sold it simply from
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my blog on October 2nd 2008 when I
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finally put that book online I sold my
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first copy which was an amazing feeling
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and then fast forward through all of
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October of 2008 I ended up making seven
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thousand one hundred twenty-six dollars
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in 91 cents just from eBook sales alone
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the craziest part about all this is that
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I would wake up in the morning and
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there'd be more money in my bank account
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because people bought my book overnight
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what do you think about it an online
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store that sells something that's
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digital is something that is open 24
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hours a day seven days a week 365 days a
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year and using tools and software and
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systems you can automate the delivery
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process so that you literally don't have
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to do anything to serve that audience
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now in the description below I'll put
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some of the tools that I was using and
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also some more articles about that story
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about how all that happened but let's
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continue what's important to realize
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here though is that with this exam that
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I was teaching people about I think it a
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perfect score in fact I didn't get close
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to a perfect score I passed yes but I
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also knew a lot about this exam way more
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than somebody who was just diving into
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the studying of us it was because that
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because I was just a few steps ahead of
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them they trusted me to help them with
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that information I provided a lot of
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great free value to help them along the
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way I engaged in conversations in the
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comments section and on forums to get
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known most of all I just really cared
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about those people because I struggled
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big-time with that exam and I was
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helping people not do the same here's
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the truth guys a successful business is
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something that successfully solves a
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problem you make more money by two ways
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one solving more people's problems or
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number two solving bigger problems now
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let's take this one step further
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cool thing about this EP model the
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expert to product model is that
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sometimes these products don't have to
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be yours you can actually generate
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income through the recommendation of
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other people or other companies products
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this is something called affiliate
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marketing it's how I've made actually
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most of my money since starting in 2008
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first time I did this was way back with
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the same website the architecture exam
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website I connected with a company that
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also sold practice exams and I got paid
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twenty two dollars for every person who
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I sold one of those things and over the
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course of the years since then I've
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generated over two hundred fifty
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thousand dollars simply by recommending
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that product alone again a product that
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was not mine but it was still helpful to
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my audience this was all done with just
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thousands of visitors a month not
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millions or hundreds of thousands just a
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few thousand so how do you get started
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with the e P model well first you have
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to be an expert in the eyes of those who
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are you looking to serve and remember
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you do not need all these qualifications
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and credibility actually some people
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gain expertise and credibility through
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just sharing their experience learning
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something - which is what I've done on
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smartpassiveincome.com and many other
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people in the program finance base or in
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Fitness you think about it they're
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talking about their journey they are
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building trust and authority through
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sharing their experiences and you can do
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the same thing - another great way to
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get started is to actually in an area of
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interest that you have go out and start
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talking to people and asking them
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questions like what are you struggling
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with right now what's your biggest pains
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but something that you wish existed that
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did not and I will give you some ideas
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about where to start and what positions
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you might be able to take remember a
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successful business solve people's
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problems and at first you're gonna have
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to do the work you're gonna have to do
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the legwork put in the time put in the
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hours but of course it's about building
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something now so you can reap the
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benefits later because using software
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using tools using automation using other
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people that you hire you can actually
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turn this business that helps solve
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people's problems
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does something that can be automated for
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you so you can generate passive income -
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for more info about passive income make
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sure you visit smartpassiveincome.com or
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subscribe to the smart passive income
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podcast which would be really cool and
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hey if you'd like this video make sure
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you subscribe right now and click on
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that notification bell so you get notice
[745]
when new videos go live - now a quick
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question for you to answer below in the
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comment section before you leave and
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that is this which of those business
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models makes the most sense for you and
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if you implement that business model and
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earn an additional let's just save $500
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a month what could an extra $500 a month
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generated passively do for you
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but remember it doesn't happen overnight
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it takes work hopefully this will give
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you a great head start make sure to
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check out smartpassiveincome.com for
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even more info about how to do it all so
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thanks again appreciate you and look
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forward to serving you in the next video
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