This is the ultimate guide to passive income for life coaches.
You’ll learn:
- What passive income is
- Why you need passive income as a life coach
- The best passive income ideas for life coaches
So if you want to scale your life coaching business and build sustainable passive income streams, you’ll really enjoy this guide.
Let’s dive right in.
Six passive income strategies for online life coaches
What is passive income?
So what is passive income?
Passive income is a type of income that you don’t have to spend a lot of effort to generate.
For example, an online course is considered passive income. You create it once and keep selling it without any extra work.
Contrast this with active income.
Your one-on-one life coaching services or group coaching programs are active revenue streams. AKA you’re actively performing a service.
But here’s the thing about passive income…No income stream is truly passive.
You always have to put in some work in the beginning to set up the product or service you’re going to sell.
And some passive income streams require more maintenance than others.
But for the most part, passive income is a way of generating income without constantly trading your time for money.
For example, in my own business, I sell courses and make “passive” income that way. However, I love coaching and also offer private and group coaching. But I do it for fun; courses are the bulk of my business and help me scale without me having to offer coaching.
As a life coach, you can create passive income streams to support your business long-term.
There are multiple ways of generating passive income that we’ll talk about later in this article.
But first, do you even need passive income? Let’s talk about it.
Why do you need passive income as a life coach?
Passive income has plenty of benefits for life coaches.
They are:
- Financial freedom: Passive income can help you get to a place where you earn enough, so you don’t have to take on work you don’t want to – you have a steady income stream even when you’re not coaching. For example, you don’t have to work with particular clients, and you can scale down on the hours you put into your coaching services.
- Flexibility: As a coach, you have a flexible business that lets you work when you want. But passive income takes that to the next level – you can choose to coach less and travel more or spend more time with your family.
- Scalability: You can earn more without working more. Your products can be sold to an unlimited number of people, while you can typically coach a maximum of 10 clients at a time.
- Security: By diversifying your income, you don’t rely on just one income stream to keep your business running. Even if you need to take time off or make a bigger investment in your business, you have other income sources than just coaching.
Now you know what the benefits of passive income are. But how can you build this type of income?
Let’s take a look.
Online courses
Online courses are training programs delivered digitally that people can take at home. They’re typically self-study courses, but they can also be group programs.
And the industry is growing fast. By 2024, experts estimate the industry will be worth $200 billion.
So, why should you as a life coach join the market?
Online courses are the best passive income source for coaches.
You can directly use your coaching methodology to create your online course.
In other words, you’ve worked with private clients, so you know what their pain points are. You can design a much more effective course than most new course creators because you know your audience so intimately.
Plus, if you have an existing audience, you can sell your course directly to them.
How to create passive income with online courses
To make selling online courses truly passive, you need an evergreen sales funnel.
An evergreen funnel is a sales process that sells your course in an automated way. In other words, you don’t sell actively, but the funnel sells your course for you.
How does an evergreen funnel work?
- Create a self-study course
- Leverage scalable traffic sources (like paid ads or SEO)
- Create an automated email sequence to sell the course
- Direct your email subscribers to a webinar where you sell your course
First you have your traffic source. Preferably, you’ll use paid ads and/or search engine optimization. I personally prefer SEO because it’s far more profitable than ads.
That traffic leads people to your email list. From your emails, your subscribers are directed to a webinar that sells your online course. And that’s how you create almost completely passive income from online courses.
Note: building an evergreen funnel that works takes time; it’s not for beginners. If you’re new to course creation, use effective course launches to sell your course.
For example, I sell courses that are completely self-study. Some of them, such as my flagship course Employee to Entrepreneur, have a support system. (For ETE, students have access to a support community with community coaches who answer questions.)
However, I didn’t first build an evergreen funnel. Instead, I started by being very hands-on and learning from my students so I could improve ETE into the best course out there.
Then, progressively, ETE became a self-study course. Now, most of the traffic comes from sources like SEO, making it a highly passive and profitable course.
How to create an online course
How do you create your course, though?
To get started creating your course, you need a profitable course topic.
This step is fairly simple…
Translate what you already offer into your course idea.
For example, if your coaching is on building confidence or balancing your life, you could use that as your topic.
Then, instead of building a complete flagship course, create a “First Steps” course.
For example, my first course, Your First Paying Clients, teaches people how to find their first few clients. That’s the “first step” to building a successful business.
Contrast that with an A-Z course. An A-Z course teaches students how to get to their ultimate goal. After YFPC, I created Employee to Entrepreneur – an A-Z course.
Why should you start with a “first steps” course, though? It’s far easier to package and sell as an initial offer.
And you can sell that course profitably, too. If you start with a $500 “first steps” course and sell 10 units, that’s already $5,000.
Once you create your A-Z course, you could price that at, say, $2,000.
Let’s say you sell 5 units a month – that’s $10,000 per month in passive income.
Earning potential: Six or seven figures
Benefits:
- Highly profitable
- Best method for “passive” income
Disadvantages:
- Higher upfront costs than other passive income models
- Takes more time to create
Get started:
- Pick a profitable course topic
- Learn how to create an online course that sells
Brand partnerships
If you have a following on social media (YouTube, Instagram, TikTok…), you can partner with brands to promote their products.
You basically recommend products and services you anyway use and love – be it food plans or meditation apps.
You don’t need a huge audience to get partnerships; if your audience is engaged, then it’s valuable for advertisers. In fact, “micro influencers” (with 10,000 to 100,000 followers) are some of the most valued influencers for brands because followers tend to have a more personal relationship with the creator.
There are a few ways of monetizing brand partnerships:
- Create content for a set-rate fee
- Create content for an upfront fee + commission on sales using an affiliate link
- Use ads on platforms like YouTube
How to create passive income with brand partnerships
Most brand partnerships aren’t really “passive” income because you trade your content creation skills for money.
However, it’s relatively simple to potentially earn a great side income with your existing audience.
Also, if you build up a big following on a platform like YouTube, you can use the AdSense program to earn a more passive income.
How to create content for your partnerships
Some content ideas for your brand partnerships include:
- Tutorials: Share step-by-steps of how to do/achieve something. For example, as a weight loss coach, you could show how to use a fitness app.
- Personal content: Show something you’re doing in your own life and how you’re using the product. Taking the weight-loss example, you could show how you try out sugar-free candy.
- Reviews: Review the product you’re promoting (obviously, you need to tell your audience your honest opinion).
Earning potential: Five to six figures. A seven-figure income is possible with a large audience but you’d have to have a sizable following.
Benefits:
- Can be highly profitable
- Great way to monetize an existing asset (your audience)
Disadvantages:
- Highly competitive market
- It takes time to build an audience you can monetize
Get started:
- Choose the right social media platform for your audience
- Create engaging content
eBooks
Let’s move on to another growing industry – the number of eBook readers worldwide is projected to reach 1.1 billion by 2027.
eBooks can help you earn passive income…and position yourself as a “go-to” in your industry.
Take Daniel Gold. He created a simple eBook showing people how to use a tool he loved, Evernote. Having sold 14,000 copies in the first year, he quickly built a six-figure business – and was hired by Evernote.
To tap into this type of passive income stream, you need to write a book on a topic that fits your coaching offer.
Or, you could offer other, similar digital products such as:
- Templates
- Planners
- Design tools
- Apps and games
- Workshops
- Editable graphics
- Stock photo or video
For example, if you coach people how to eat healthily, you could create a meal plan and sell it on your website. Or if you’re a stress coach, offer a morning routine template.
How to create passive income with eBooks
There’s a catch when it comes to eBooks…While it is possible to make six figures as an eBook and digital product creator, it’s rare.
Why? Because these types of products don’t cost much.
Most eBooks sell for $5-$20.
So even though self-publishing on a platform like Amazon Kindle is free and easy, you need to sell a lot of books to make a significant income.
For example, if your book costs $20, you’d need to sell 50 of them to make $1,000.
That said, if you have an existing audience, an idea for an eBook, and want to write a book to position yourself as an expert or because you just really want to write an eBook – go for it.
How to create your eBook
Create an eBook (or a digital offer) that works well together with your coaching.
Ideally, it gives that first win to people. That way, you show people how powerful your coaching is and can upsell them with your eBook.
For example, if you’re a nutrition coach, you could write a book about designing a custom meal plan from beginning to end. Or you could sell templates for meal prepping adapted for specific diets.
You can use tools like Canva to design professional-looking eBooks, templates, and printable downloads.
And how do you sell your eBook? List it on your website, Etsy, Amazon, and other relevant platforms. Then use your other marketing channels like social media and your blog to drive traffic to them.
Earning potential: Five figures. Earning over five figures is possible but requires a high volume of sales.
Benefits:
- Easy to get started
- Low upfront costs
Disadvantages:
- Lower income potential than online courses
- Audience building takes time
Get started:
- Write an eBook that sells
- Promote your eBook and digital product
Affiliate offers
As an affiliate marketer, you promote someone else’s product or service to your audience. Every time someone buys using your link, you earn a commission.
And you can drive sales for pretty much anything related to your coaching.
You could advertise products like books and tools using Amazon affiliate links. Or you could promote digital products like other people’s courses.
For example, I have affiliates who promote my courses to their audience.
They consistently make commissions – especially as my courses are some of the best converting on the market. At the same time, I tap into a new audience without extra effort on my part.
How to create passive income with affiliate marketing
How much can you make from affiliate marketing?
For digital products like courses, the commission is around 50%-75% per sale.
If you promote a course that costs $2,000 with a 50% commission, you make $1,000 on every sale.
So going down this route is much more profitable. You can earn up to six figures if you choose high-converting digital products to promote.
The best part is that you don’t have to create those products – if you have an audience but aren’t ready to create your own course, affiliate marketing can be a good alternative.
However, if you decide to promote e-commerce products, your earning potential depends. The commission tends to be 5%-25%; so you’d need to promote higher end products, like tech gear, to make a good passive income.
Here are some affiliate programs to check out for e-commerce products:
How to set up affiliate programs
Like with brand partnerships, affiliate marketing becomes a passive income stream if you have an evergreen funnel to lead people to your links.
So focus on building up evergreen traffic sources like SEO or paid ads. The key is to choose a niche that works together with your coaching offer. For example, as a stress coach, you could promote a meditation course. (Note, though, that you obviously need to have used the service or product you’re promoting – that’s the whole point of affiliate marketing.)
But how do you find those affiliate offers?
If you want to promote a software or app, you can typically apply to affiliate programs.
But if you want to promote a digital product or a course, you need a more personal relationship with the creator. Or, if you’ve found a product you love, reach out to the creator and ask if you can promote their products. To do this, you need to have an audience who are a good fit for the creator’s product.
Earning potential: Five to six figures. Seven figures are possible with a huge audience.
Benefits:
- Easy to outsource affiliate blogging to freelancers
- High traffic blogs or social media build your reputation
Disadvantages:
- You don’t promote your own product
- You build someone else’s business
Get started:
- Learn how to grow your affiliate blog with SEO
- Choose a profitable affiliate program
Outsourcing your coaching
How do you scale a coaching business?
If you’ve built your coaching business to a point where you can’t take on more one-on-one clients, but want to expand your offerings, that’s what you can do by outsourcing your coaching. Instead of you doing your private or group coaching, you hire and train others to do it for you.
Once you have a team in place and you’ve trained them, you create relatively passive income.
For every coach you take on, your business can scale – so that you build a bigger client base and grow your business.
That said, building passive income by outsourcing your coaching is the least “passive” option on this list.
Why? Well, you need to manage your contractors or employees. At the same time though, a team allows you to do things like take time off when you need or want to and focus on other things in your business (such as expanding it).
So while your income isn’t purely passive, it will help you scale.
How to hire coaches
But how do you hire the right coaches?
Research coaches in your niche that seem to align with your coaching style. Or, publish a job ad on a job board or on social media.
The key is: look for people who love coaching but don’t necessarily want to run their own business. These are the types of people who’ll be happy working with your clients, while knowing they have a steady income.
Once you have a shortlist of people, you’ll need to go through an interview process.
Typically, for a role like this, you have at least a few rounds of interviews. Look for people who are:
- Reliable
- Open to feedback
- Coachable
When you’ve found your coaches, you also need to train them. Even if they’ve been coaches before, you should have a single standard operating procedure across your coaching company.
Essentially, they need to learn your methodology and how you help your clients get results.
What’s an example of a coaching business that uses this model?
Badass Careers is run by Rosie McCarthy, a career fulfillment coach. But she doesn’t do any one-on-one coaching anymore.
That’s because after Rosie built up her business with successful courses and private coaching, she decided to outsource her coaching to another career coach. That coach now does all of the private coaching work so that Rosie can focus on content creation and feeding her evergreen funnel for her courses.
And that’s the caveat. As a coaching business owner, you’ll probably be the face of the company. So your role will be bringing in more clients and managing your team.
That’s less freedom and flexibility than, say, an online course business.
But you’ll still have more freedom than if you were working with private clients by yourself.
Earning potential: Six to multi-seven figures
Benefits:
- Builds authority in your niche
- High earning potential
Disadvantages:
- It takes time to build a team; better to start as a one-to-one professional first and then expand
- Managing a team of coaches gives you less freedom
Get started:
- Build a loyal client list by working one-on-one as a life coach
- Learn how an agency business model works
Newsletter or podcast
Podcasts and newsletters aren’t just ways to build an audience.
You can also earn money from them.
For example, Morning Brew, a daily newsletter that shares the latest business news, is a multi-million-dollar business with over 4 million subscribers. Morning Brew makes money primarily through brand partnerships.
You can monetize your newsletter or podcast in similar ways if you have a large following.
Plus, you simultaneously grow your audience for your coaching offers.
So, let’s talk about how podcasts and newsletters can become passive income streams for life coaches.
How to create passive income with newsletters
Most podcast and newsletter creators make money through sponsorships and affiliate links. To make money, you need an engaged audience that clicks through to those offers.
How do you grow such an audience?
By creating consistent, high-value content that your audience enjoys.
For example, with my newsletters, I tend to tell personal stories and share lessons on how to build businesses.
Now, with newsletters, there are two ways to generate passive income.
The first is with affiliate links and brand partnerships.
The second way is to monetize your newsletter directly. As in, have a paid newsletter.
The newsletter platform Substack allows you to charge a monthly fee for exclusive newsletter content.
This is a great source of income if you have a dedicated audience that wants to pay to get more from you.
You could also host an email coaching membership on Substack by setting a monthly subscription fee for your email group coaching program.
Next up: podcasts.
How to create passive income with podcasts
Building an audience for your podcast is similar to newsletters.
If you provide useful and engaging content, your audience is more likely to click your links.
Podcasts tend to have dedicated ad-reads from partnered brands.
So, during the podcast recording, you promote the brand. Preferably, it should be something that fits into that episode or your coaching business as a whole.
Note: You need a high number of monthly downloads to qualify for most sponsorship opportunities. So focus on building an audience before you monetize.
Earning potential: Five to six figures. Seven figure income is possible with a huge audience.
Benefits:
- Builds an audience for your coaching offers
- Widens your impact in the industry
Disadvantages:
- It takes time to build a profitable audience
- You need content creation skills
Get started:
- Learn how to create good content
- Discover how affiliate marketing works
Frequently asked questions about passive income for life coaches
Can you really make money as a life coach?
Yes, you can make money as a life coach, both through your coaching offers and then increase your life coaching salary with passive income (such as online courses). However, the best way to make money as a life coach is to not call yourself a life coach. Instead, choose a niche (like mindset, health, or career coaching) so that you solve a specific problem for people.
Can life coaching be a side hustle?
Yes, life coaching can be a side hustle. In fact, one of the best ways to start a life coaching business is to do it on the side so that you avoid any unnecessary financial stress. Once you’ve doubled your 9-5 salary with life coaching, you can go full-time. That’s how I started; I grew my first online business to $100k+ in 4 months and then quit my day job.
How do you make six figures as a life coach?
Start with a private coaching offer. For example, you could sell a coaching package for $3,000 – then you only need to sell 3 packages a month to make six figures. Afterwards, you can add on passive income streams like online courses, partnerships, and digital products.
Next steps
There you have it! That’s how to get started creating passive income.
The takeaway? Online courses are the most profitable streams of passive income for life coaches. But how do you create an online course business?
Having helped hundreds of people create their own courses and built multiple six and seven figure courses, there are three mistakes I see most creators make…
Want to know what they are – so that you can avoid wasting time and money in the process?
Get my free PDF with the top three mistakes to avoid.
Read more:
The Best Life Coaching Products to Scale Your Business
How to Create an Online Course
Life Coaching Marketing: The TopStrategies to Get Paying Clients
