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The following excerpt is from Nightingale-Conant's book The Power of Passive Income: Making Money Work For You. Buy it now on Amazon | Barnes & Noble | Apple books | IndieBound
Sometimes people assume that leaving the employee world means a whole new life. In a way, that's true, but it shouldn't mean giving up everything you've learned and learned well. For example, if you work in the marketing department of a large company, you don't have to step into an entirely new field just because you want to carry yourself. Instead, ask yourself how you can use the skills you have already developed to generate passive income.
As you do so, you will find that you often end up in the realm of intellectual property, that is, work that you have created in the form of words, sounds, or images. All of this can be copyrighted, and you can generate income by giving access to them. In short, intellectual property is the ultimate sideline.
Here is an example. Marli, a freelance translator, noticed a discussion on the internet about copyright issues. She asked herself, "Do I have any rights to the translations I produce?" The answer turned out to be yes, especially if there wasn't a contract stating otherwise. This led to some very productive ideas for creating passive income. Here is her story:
If a font has been out of print for many years, the book's copyright may expire. In the case of a foreign language document, the copyright of the translation may lose its force. As a translator, the difference between these two topics is very important to me. For example, nobody owns the copyright in Shakespeare's plays. I can print a copy of the plays on my computer and try to sell it, and neither Shakespeare's heirs nor his many publishers can object. But if I translate Hamlet into Finnish and someone in Finland wants to publish my translation, they have to get my permission – even though the piece itself is in the public domain. Once I understood this, I immediately began translating some well-known public domain stories, especially stories that are often anthologized. This has been an excellent passive source of income for me – and the more stories I translate, the bigger it gets.
Be aware of the many areas in your life where you may be producing something that is considered intellectual property. If you're in a service industry like consulting, photography, or even manufacturing, there is a good chance that it is – and if it is, there are some steps you should take right away.
Related: 4 Ways To Successfully Turn Your Day Job Into A Side Job That Will Bring You Residual Income
Assert your rights by adding a copyright notice, obtaining trademarks or service marks, or obtaining patents to protect the product of your work. You must protect the fruits of your labor by making it difficult for others to sell them or use them for their own profit. It is actually a lot easier than you might think to copyright something. Usually, it is legally sufficient to just claim that the material is copyrighted – for example at the bottom of a website. For printed text, simply draw the letter “c” with a circle and then write your name. Copywriting designs or software innovations can be a little more complicated. It is therefore a good idea to consult a lawyer. But don't neglect this step. You cannot have passive income from intellectual property unless you can show that the property is yours.
Charge a protected license fee
Charge a separate fee for your protected materials when they are used. This can provide a great passive stream of income. And if you are not sure if you can control the use of your creations, you can address that issue in your original contract.
Here is a typical example. You are a landscape architect and are creating a beautiful design for the park-like area around a new office complex. You have invested time, talent, and imagination in creating this design. If another real estate developer wants to develop a similar office park, it is very likely that the developer will copy your design for you without compensation. To deal with this possibility, in addition to your one-time payment, you can negotiate a license fee from your original customer. This insures you against the likelihood that your efforts will be reused for profit by others.
Related: 3 Smart Ways to Identify the Customers That Are Generating Your Residual Income
Negotiate a license fee
You can also negotiate a royalty if a customer uses your copyrighted material to generate sales. This is a legitimate fee for the continued use of your intellectual property by a profitable company.
You can also generate passive income by subcontracting other professionals to create the intellectual property you sell. Make sure both parties sign an agreement that allows you to either license their work or purchase it directly to include it in your content. For example, if you want to create an online course module but are terrible in design, outsource that feature and create an agreement that gives you ownership of the design. Outsourcing some of these functions can significantly increase the overall volume of your work, and the income you generate is compensation for your administrative and quality control efforts.
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Market your intellectual property
There are many ways to increase your intellectual property sideline once you start thinking creatively. An excellent place to start is by participating in an affiliate program related to your major. These programs allow you to collect a commission on all sales made through the affiliate links. Linking your own intellectual property with related affiliate programs not only gives you extra cash, but also gives you the halo effect of being affiliated with other companies.