**Episode 4 of 4 in the Time & Income Series. Listen to Episode 1 here, or read the transcript here. Listen to Episode 2 here, or read the transcript here. Listen to Episode 3 here, or read the transcript here.**

Passive income. I hate that term, but it’s become a buzzword in recent years. Everyone wants to know how to get passive income so you can spend your days sipping piña coladas on the beach rather than toiling away in an office. Passive income isn’t really passive, though. It takes a lot of work to develop passive income streams, enough that I don’t even like to call it passive; I prefer to use the term asynchronous income. And while it may take a ton of work up front, asynchronous income can truly be a game changer for creative entrepreneurs. Asynchronous income allows you to finally break the connection between your income and your time. Today, we’re going to dig into how to make asynchronous income work for you.

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Hi there, thriving artists! Welcome to episode #8 of the Starving Artist No More Podcast: Asynchronous Income for Creatives. I’m your host, Jennifer Jill Araya, and I am so excited to be here with you today. Asynchronous income makes a huge difference for me in my creative business, and I know it can do the same for you.

This episode about asynchronous income is the fourth and final part of a 4-part series about the connection between time and income in creative businesses. If you’ve not listened to the first three episodes in the series, I highly recommend you pause this episode and go back to listen to the episodes in this series in order. The first episode in the series, which is episode #5 of this podcast, lays out a lot of the foundational mindset principles that will help you understand why it’s so important to have a good handle on your business finances.

The second episode in the series, episode #6 of the podcast, is all about what it means to pay yourself first and how to do that in practical terms. Paying yourself first is Step #1 of breaking the connection between time and income in your business. Paying yourself first allows your business finances to become a well-managed resource, allowing you to feel like you have more income because your money is being used so efficiently.

The next episode in the series, episode #7 of this podcast, discusses your creative and financial sweet spot, step #2 of separating your time from your income. Your creative and financial sweet spot is the creative area within your business where you are both paid your absolute best rates for the work you do and doing your absolute best, most creative, and most innovative work on every project. Focusing all your efforts on getting more work in this sweet spot, allowing you to work within that space as often as possible, will begin to raise your income over time, as you’re paid your highest rates for more and more of your work time.

And that brings us to step #3 of the process and the topic of today’s episode: developing asynchronous income streams. If you’ve been following along this whole podcast series with me, and if you’ve begun the process of putting the first two steps into action, as you apply those processes in your business day after day and week after week and month after month, you will gradually see a bit of extra time margin develop in your work schedule, thanks to steps 1 and 2. Use that extra time to apply your creativity to the development of asynchronous income streams that will pay you over time into the future, which is step 3.

If you have questions about this entire process of separating your income from your time, a great resource is available for you, for free, on my website, www.StarvingArtistNoMore.com. Just go to my website and you can download a free guide titled “Say Goodbye to Feast or Famine: Three Financial Must-Haves for Creative Entrepreneurs.” The four episodes in this podcast series are loosely based on that guide, and it’s a great place to go if you have questions about any of the steps I just outlined for you. Just visit www.StarvingArtistNoMore.com and fill out the contact form.

Ok, let’s dive on in to the topic of today’s episode: asynchronous income, or what other people call passive income. This, to me, is the most exciting part of the whole process of separating your income from your time.

As I mentioned in the intro to this episode, passive income has become a bit of a buzz word in recent years, and there are so many gurus and self-proclaimed experts out there who go on at length about all these “easy” ways to make money, to develop “passive income.” And part of the reason I have such a problem with the term “passive income” is that association with those kind of icky “experts.” I don’t want to be associated with those people or their selling-heavy ideas in any way.

The other problem, and really the main problem, I have with the term “passive income” is that it is misleading. Passive income is not actually passive! I gave you the definitions of passive and asynchronous in the first episode of this series, but I’m going to give them to you again because words matter, and how we use words matters. (Or maybe that’s just the audiobook narrator in me coming out!)

Merriam-Webster defines passive income as “business activity in which the investor does not actively participate in the generation of income.” But that’s a fantasy! There is no business activity that doesn’t require some work from the investor at some point in the process. Owning a large stock portfolio is often used as the stereotypical example of passive income, but where did the money come from that you originally used to invest and buy stock? Unless you’re wealthy by inheritance, you had to work to come up with that initial investment! You have to work to build an income stream that will bear returns, that will pay you gradually over time. You have to make an initial investment. There is no easy money. Passive income requires a LOT of work; you just aren’t paid at the time that you do the work.

And because of that – because passive income isn’t actually passive and because it pays you at a time separate from when you do the work – I much prefer the term asynchronous income. Merriam-Webster defines asynchronous as “not simultaneous or concurrent in time.” Asynchronous income is income where you put in the work up front and then are paid for that work over time, hopefully at a rate much higher than your normal. You do the work, and then you get paid for that work on a recurring basis into the future. Anytime you do work that will continue paying you far into the future, you are building your asynchronous income.

The really good thing about what others call passive income and what I call asynchronous income – and why it can be such a game-changer for creative entrepreneurs – is that, with asynchronous income, the potential for returns is drastically higher than for your regular income. Asynchronous income has the possibility of paying you tens, hundreds, or thousands of times more for your initial investment of time or money than your regular work does.

As an audiobook narrator, I narrate books for authors and publishers under two very different contract structures. The first is called PFH, which stands for “per finished hour.” Most of my work is PFH, and for those books, I am paid a flat rate based on how long the book is. If a book is 5 hours long, I'll be paid five times my finished hour rate. I won’t be paid less than that, but I also won’t be paid more than that. I get my fee, and then I’m done. I have no rights to the book once I do my job and get paid my rate. I don’t get paid extra if the book sells super well. I just get my normal finished hour rate. This is regular, old income that comes in as a result of me selling my creative energy. If I’m not in my booth recording, I don’t get paid. Within what the market and my experience will allow, I can raise my PFH rate, the amount I get paid for every finished hour of audio, but under PFH contracts, my income is directly tied to my time.

The other contract type I work under is call RS, or Royalty Share. In a Royalty Share contract, I am not paid up-front, or at least not paid very much up front. There are lots of ways to organize royalty share contracts, and in my business, when I’m negotiating the terms of a royalty share contract, I typically ask for a PFH rate that is lower than my normal rate, in addition to the royalty share. This reduces my risk in accepting the royalty share project by helping to cover the out-of-pocket costs I incur during the production process. But, regardless of whether the contract is strictly royalty share, or whether it’s royalty share plus a lower-than-normal PFH rate, if a project has a royalty share component, I get paid a royalty every time an audiobook is sold. For the life of the audiobook, every sale sends money back into my pocket. I absolutely assume extra risk in these projects, even if it has a PFH component, since if the book doesn’t sell, I might not get paid much or at all. But if they do sell well, royalty share projects have the potential to pay me way more over time than I would make with even my highest PFH rates.

Back in February of 2019, when I had been narrating audiobooks for less than a year, I attended the VO Atlanta conference and participated in a session led by the celebrated narrator Scott Brick. I don’t actually remember the stated topic of that session – I think it was something along the lines of “Fostering the Author-Narrator Relationship” – but whatever the topic was, I do know that in that session, Scott shared what a difference royalty share income made for him.

Many years before, Scott was diagnosed with cancer and had to take almost a year off from work while he was undergoing treatment. For most creative entrepreneurs I know, this kind of personal tragedy would be made immeasurably worse by the financial disaster that would result. Typically, when a creative entrepreneur isn’t able to work, they also have zero income. But because Scott has a healthy portfolio of royalty share projects, he didn’t have to worry. His royalty share books paid his bills for that year, taking away any financial stresses and allowing him to focus on healing and getting better, which thankfully, he has. I knew right then, in that session, that I wanted to follow Scott’s example and make royalty share income a part of my new audiobook narration business.

In an effort at transparency and to tell you just how much of a difference asynchronous income can make for you, I want to be open and share that, as of the time I’m recording this episode in late December 2022, my portfolio of royalty share projects typically pays me between $1,000-$2,000 every month. It varies by month, but I can reliably count on at least $1,000 coming in every month, and often as much as $2,000. Some of the royalty share projects I’ve accepted have been duds and will never end up making me back my regular PFH rate. But because I am very selective about the royalty share projects I accept, and I do extensive research before even offering to work with an author on a royalty share basis, and then I do even more research before actually signing the royalty share contract, most of my royalty share projects will, over time, end up paying me far in excess of my normal rate. I wasn’t paid much or anything at the time of doing the work – when I actually recorded the audiobook – but these projects pay me asynchronously, putting income into my bank account every month going forward into the future.

Because I know I will have money coming in every month, regardless of whether or not I’m actually recording every workday of a given month, I have a bit of financial margin. My asynchronous income royalty share projects smooth out the “feast or famine” cycle in my business and make my income more predictable. This is an incredible feeling of security for me – as it is for any entrepreneur! It is especially an amazing feeling for creative entrepreneurs, who are so often plagued by nausea-inducing “feast or famine” cycles in their business income.

Now, again in the interest of full transparency, I do want to let you know that the vast majority of my audiobooks are PFH contracts, not royalty share. In 2022, I recorded 63 audiobooks, and only eight of them were royalty share contracts. Of the over 300 audiobooks I have narrated since I started working in audiobooks in 2018, I have about 45 books in my royalty share portfolio, about 15% of my total catalog of work. Most of my work is PFH, since those projects are what bring in the most income right now. Most of my monthly bills are paid with money I make on PFH projects. Working only on royalty share projects isn’t practical because while they will eventually pay me more than my normal rate, they’re not paying that amount right now, and I have bills that I need to pay right now. Like everything in life, it is a balance. Balancing both PFH projects and royalty share projects in my business allows me to meet all of my financial needs, both now and into the future. By mixing in some royalty share projects as time allows, and as I find royalty share projects that meet my criteria, I’m able to build myself a buffer of asynchronous income that keeps money flowing into my business, money that isn’t reliant on my daily and weekly work schedule.

This part of the process, developing asynchronous income streams, is what was missing from my previous creative endeavors. When I was working full-time as a gigging musician, when I was teaching a full studio of voice and cello students, when I worked as an artisan and seamstress selling my creations at art shows and craft fairs and through an online shop – all of those businesses were strictly “I get paid when I’m working” businesses. I didn’t have anything coming in on days I was sick or days I simply chose not to work. If I wasn’t working, I wasn’t getting paid. And that is one of the biggest reasons that I wasn’t able to stick with those businesses for the long haul. It was exhausting to see my 9-5 working peers getting paid time off and sick days and benefits like health insurance and retirement plans and paid family leave, and not get any of those things myself.  On all of my previous creative businesses, I burnt out. Those businesses did not meet my needs holistically, and I ultimately found them unsustainable.

In 2009, I started my business working craft fairs and selling my creations through an online shop, mostly as a side business in addition to music performances. I switched to full-time work in that area in 2011, with my music performing becoming the side business and the craft fair work taking the main stage. I enjoyed the work, and while I was never going to get rich with it, it was definitely a successful business.

But when my husband and I adopted our daughter in 2013, my craft fair business fizzled and died. The adoption process required us to live overseas for over two months while we completed the paperwork and court dates and official appointments necessary for the adoption itself, plus extensive additional time commitments for appointments and so forth once we returned home as a new family of three. My husband had a 9-5 job working for a large company, so he got FMLA time, or Family Medical Leave Act time, away from his job for us to complete the adoption process. But I did not get FMLA time. As a self-employed artisan who had never set up asynchronous income streams (who had never even really considered asynchronous income streams!), I had nothing. When we got on the plane for that adoption trip, I ceased bringing in any income in my craft fair business. I wasn’t working, so I wasn’t getting paid.

I hadn’t set myself or my business up for success when the bumps of life hit and I needed to take time off to handle personal or family commitments. A few months before we left for the adoption trip, I stopped applying to future craft fairs and art shows, since I wasn’t sure when we would be back in the US and when I would be able to participate in shows again. Two weeks before we left for the adoption trip, I put up an away message on my online shop so no new orders would come in, and I never took it down. My days working as an artisan were over.

That business did not give me what I needed personally – it didn’t fulfill me personally – and as a result, I walked away from it. I didn’t know about asynchronous income at the time, but looking back, if I had been able to develop asynchronous income streams for myself in that business before we left for that adoption trip, I would still probably be doing it today. I enjoyed the work and found it very creatively fulfilling. It wasn’t as financially rewarding as my current audiobook work, but it certainly wasn’t financially unfulfilling. It did fulfill me creatively and financially, but it didn’t fulfill me personally – it didn’t give me the time I needed for my family and for my personal needs – and so I walked away.

That is the difference that asynchronous income can make. Asynchronous income can give you the margin you need to be present in your personal life and not spend every minute working to sell your creative energy. Honestly, it’s pretty incredible.

So, what are some options for you to develop asynchronous income streams? I’ve already talked about royalty share projects as asynchronous income for audiobook narrators, but what if you’re not an audiobook narrator, or if you are an audiobook narrator but simply don’t want to pursue royalty share (because I will admit that royalty share projects do take a LOT of upfront research and work and time to make sure you’re signing on to a good royalty share project, and even then, even when you do all that due diligence, you’ll still get some duds). What are some options for you?

The good news is that you have lots of options! I’m going to talk about several specific asynchronous income possibilities in detail, but these are far from the only opportunities available for you. I want you to view the rest of this episode as a brainstorming session. As I talk about each asynchronous income possibility, use it as a launchpad to jumpstart your dreaming. Expand your concept of what is possible. You are a creative, so use your creativity to find the asynchronous income opportunities that are right for you and your business. You can do this!

Let’s first start with the asynchronous income stream that I’ve already talked about at length: Royalties. As I’ve already mentioned, this is where my asynchronous income comes from right now, and I am always looking for ways to add more audiobook royalty income to my bottom line. One of my primary business goals for 2023 is to increase my royalty income. I’ve already signed on to narrate a new royalty-share series beginning in January of 2023, meaning I will be narrating at least 9 royalty share books in 2023. I’m also working on expanding my royalty income by publishing six public domain audiobooks in the next calendar year. I’m very excited about all of these new royalty-generating projects.

Royalties are great, and royalty income can be pursued by artists working within any creative industry, not just in audiobooks. Royalties apply to books, ebooks, audiobooks, music, prints or reproductions of visual or photographic art – anything that you can create once and sell multiple times, earning a percentage of the sale price each time it is sold. Merriam-Webster defines “royalty” as “a payment to an author or composer for each copy of a work sold or to an inventor for each item sold under a patent,” and that’s a pretty good description of how it works. Give it some thought: what do you already create that can be sold for royalty income? How can you incorporate royalties into your business plans?

Another great option for asynchronous income for creatives is Licensing Fees. This is especially suited for photographers, musicians, and visual artists. If you create products that others might want to license for their use, then set yourself up to accept licensing fees for that work. For example, I paid for a license for the theme music for this podcast. The musician who wrote and recorded that music only had to do that work once, but now that it’s posted on a website where people can purchase licenses for music, that musician will get a little bit of income every time someone buys a license to use their music for years into the future. Stock photography has a very similar licensing structure. The licensing fees you can charge vary widely based on how someone is going to use the thing they are purchasing. When I bought the music for this podcast, I selected a license that included podcast use, but I could have paid less or could have paid more if I’d needed different usage options. Licensing fees come in all shapes and sizes and contract details, and in all honesty, I don’t know a ton about them since I’ve only ever purchased licenses and never sold them myself. Be sure to do your research – caveat emptor, right? Or really I guess it should be “seller beware,” in addition to “buyer beware”! But I think you get my point: license fees absolutely qualify as asynchronous income for creative entrepreneurs.

Another option for creative entrepreneurs to develop asynchronous income is to create Online Courses. Create a course to teach others how to do what you do, or to teach others a specific aspect of how you do what you do. At the time I’m recording this podcast, I’m working on developing my own series of online courses, with the first course releasing in the spring of 2023. In the spirit of full disclosure, the online courses I will be offering through Starving Artist No More are part of my own asynchronous income plans!

If developing online courses is something that interests you, I highly suggest you check out the book How to Get Paid for What you Know by Graham Cochrane, which I will link in the show notes. When I decided I wanted to develop online courses to help creative entrepreneurs build businesses that fulfill them holistically, I started searching for guidance on how to do that, and I stumbled on Graham’s book in my library’s catalog. I read it in one weekend and immediately knew I was going to want to refer to it again, so I bought myself a physical copy. (You know a book is good if you check it out from the library and then immediately buy it for yourself!) Graham Cochrane is himself a creative entrepreneur. His background is in music and music recording, and his book is based on his experience building “The Recording Revolution,” a very successful online business that teaches musicians how to record professional quality recordings at home, without a professional recording studio space. The Recording Revolution was so successful that Graham has now branched out to teach others how to do what he did, or, as the title of his book says, get paid for what you know. He also has a great podcast, The Graham Cochrane Show, that I highly recommend. Both his book and his podcast are a great resource for learning how to take knowledge you already have and develop it into an online knowledge-based business that will pay you over time, asynchronously.

The online courses I’m developing through Starving Artist No More are all about creative entrepreneurship, but your online courses can be about anything you know how to do! You are a creative, an artist, so you obviously know the skills and techniques required for your specific craft. I guarantee you that you know how to do something that other people want to learn how to do. You can teach that through online courses.

Jennet Ingle is an oboist who is a perfect example of a creative who took her unique knowledge about her craft and turned it into an online course business. I’ll link her website in the show notes, plus a podcast interview with her, which is where I first became familiar with her work. She’s also written a book called The Happiest Musician about how she turned her musical passion into a thriving online (and offline) business. I have not read her book, although it is on my TBR list, and I definitely will read it eventually. But as of right now, I can’t yet give it a personal endorsement. That said, if you’re a musician and want to pursue online courses to build asynchronous income streams in your business, it is definitely a resource for you to check out.

Another option for selling knowledge you have and teaching others how to do it is Downloadable and/or Digital Content. This is another great way to use the incredible knowledge and skills you have as a creative and get paid to pass that knowledge on to others. Write a how-to guide for a skill or technique you have mastered, or create a pattern for how to make one of the products you sell. Selling patterns is asynchronous income gold for artisans in particular! When I worked as an artisan, in the craft fair business I mentioned earlier, I had vague plans to eventually sell patterns for some of the quilted accessories I made and sold in my business. I never fully fleshed out this plan, so I never did develop any asynchronous income as part of that business, but if I had, I would very likely still be doing that work today.

A corollary to selling downloadable, digital content is to Sell Digital Versions of Your Work on Your Website. This idea is a bit different from royalties, in that you sell your work directly from your website, meaning you keep all of the proceeds, not just a royalty percentage. This idea is perfect if your work has a visual or audio component and if you own all the rights to that work. Photographers and painters can sell digital prints. Musicians can sell digital albums. Authors and audiobook narrators can sell digital books and/or audiobooks. If you set up the selling platform on your website, meaning that you are selling directly to your customers, you get to keep all of the sale price. As a result, you don’t need to sell nearly as many copies of your work as if you’re selling on someone else’s platform and thereby only getting paid in royalties. Having control of your own shop interface can be a very powerful asynchronous income tool.

Online Self-Funding Platforms provide another opportunity for asynchronous income for creatives. This is not an option I’ve ever explored myself, but I know a lot of authors, visual artists, and musicians in particular do very well using services like Patreon and Buy Me a Coffee to build online communities full of fans who will gladly pay to support the artists they love and to get a bit of extra access to them. I’ve recently interacted with a few narrators who have made online self-funding a huge part of their business model, with incredible success. Joe Arden is one example of an audiobook narrator who has a lively and supportive Patreon community. He has absolutely made the platform work for him. In September, Joe and I were both attending narrators at the Authors in the Bluegrass book con. I was amazed at how many of Joe’s Patreon supporters traveled from literally all over the world to attend the con and have the chance to spend time with Joe in person. It is possible to build an incredible community of fans and supporters through self-funding platforms. These platforms have the potential to provide not only a thriving asynchronous income stream, but also a powerful connection to your audience. 

These are just a few of the nearly infinite options available to you as a creative for you to develop asynchronous income. The “Say Goodbye to Feast or Famine” guide on my website has a few more ideas, beyond the ones I’ve mentioned here. Another good resource to get your brainstorming juices flowing is the book How to Make Money While You Are Sleeping by the photographer Rick Sammon, which I will link in the show notes. This book is designed for photographers, but almost all of the ideas in the book are applicable to any creative entrepreneur, regardless of your specific discipline. I am not a photographer, but I read this book and found it full of helpful ideas to jumpstart my asynchronous income brainstorming process.

And that is actually where you will find the best ideas that will work for your business: your own brainstorming and creative thinking. You’re a creative, so use that creativity! All of the ideas and suggestions I’ve mentioned in this episode are just that: ideas and suggestions. Only you can know what is the right path to asynchronous income for you and your business. And chances are that you’ll need to pursue several different asynchronous income streams to really have a robust and healthy flow of asynchronous income every month, just like I’m working to develop both my royalty share income and my online course income, rather than relying on one or the other. The more sources of income you have, asynchronous and otherwise, the more insulated your business will be from the “feast or famine” cycle, the ups and downs in income that occur in every business. Every step that you can take to smooth out the income roller coaster is one step toward giving your business long-term viability, which will keep you living your most fulfilling creative life to the very best of your abilities for years into the future.

Use these asynchronous income ideas as a launching point. Apply your creative problem solving skills, the very same skills that make you the incredible artist that you are. Search out asynchronous income streams that suit you and your craft. Invest the time to build a business that will support you day in and day out, that will give you the time and space you need to be a whole creative – a whole person – a business that will support you holistically: personally, creatively, and financially. I know you can do it.

Thank you so much for listening to this episode today. I am so grateful that you are following along with me on this journey. If you have any thoughts or feedback you’d like to share about today’s episode, or any episode for that matter, please reach out to me via my website, www.StarvingArtistNoMore.com. As always, ratings, reviews, and subscriptions are very much appreciated. And if you know a fellow creative who is currently living the “starving artist” life but is ready to transform into a “thriving artist,” please pass along this podcast to them. I firmly believe that every creative deserves to thrive and be supported by their business: personally, creatively, and financially. Thanks again for being with me today, and I wish you a wonderful week of artistic joy and fulfillment. I can’t wait to see what you create.