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How to Generate Passive Income with Online Courses

Everyone is good at something. With creativity and determination (and maybe some marketing) others will pay to learn from you. Teaching online courses is a great way to earn passive income. The barriers for entry are low, and if your online course doesn’t pan out, the only thing you’ll lose is time.

Chances are, you’ll be surprised by the number of people that are interested in your course. I create Geographic Information System (GIS) courses, which is a fairly narrow niche. There are only three course offerings on my website, but I still make enough to pay for all my business expenses and pay a portion of the bills each month. All this from a small email list and very little marketing.

Think of a Course Idea

The first thing you need to create an online course is a course idea. Identify what you can teach and how to teach it.

Do you have knowledge or experience that could benefit others? Chances are you do. Do you have a solution to a common problem? Find something that you’re passionate about, or knowledgeable about, and go from there. Everyone has unique life experience, perspective and skills. No matter what those are, you have something that will benefit others. Now just find a way to teach it.

Once you know what you want to teach and how you want to teach it, you will be tempted to start creating content. Before you do that, I recommend first determining where to host your course. Where you host your course will have some influence on how you develop your content, so it’s good to figure out hosting first.

Find Hosting for Your Course

Competition from rapid growth in the eLearning industry creates lots of options for instructors at great prices. In fact, there are a number of websites where you can host your courses for free and get paid whenever someone purchases your course. The website will take a cut (often quite generous) to pay for marketing costs, but you’ll still make money on every sale. Other websites will host your courses based on a subscription plan. These subscriptions range from free to hundreds of dollars a month, depending on features and needs. You can also host courses on your own website, or on YouTube.

Course Marketplace Websites

Udemy and Eduonix host courses for free and market them automatically (other websites too). In return, they take at least 50% of sales that result from their (or their affiliates’) marketing campaigns. Instructors build courses directly on the websites. It’s a pretty easy system to get a course online quickly. These websites make money when you sell courses, so it’s in their interest to get prospective students to purchase your courses. You’ll be surprised how quickly you make your first sale.

Freemium Hosting

Teachable (one example) offers free course hosting. In return, you pay a small processing fee for each transaction. You can also eliminate the processing fee by choosing a monthly subscription plan. Teachable instructors have access to contact information for all students that purchase their courses. This is powerful because if you ever leave Teachable for your own website you can take student information with you and market to your current students. You can grow as your audience grows with updates to paid plans containing more features. In my opinion, this is better option than Udemy/Eduonix-type platforms because you have flexibility to grow as your student base grows. Teachable doesn’t market your courses so you’ll have to find a way to get the word out.

YouTube, etc.

Both of the options above require students to pay for your course. Another option is to choose a platform where students access your content for free and you get paid from placing advertisements in your content. The best example of this is YouTube, but you could do it on your own website as well. Once you meet YouTube’s partner requirements your videos are eligible for monetization. Advertisements are automatically placed in eligible videos and you receive a cut (55%, Google takes 45%) of what the advertisers pay for a view, click, etc. If don’t already have a YouTube channel or website, this option isn’t the best for you. Choose one of the other options where you don’t have to build a following before you start making money.

Make Course Content

Start creating course content once you’ve determined the outlet for your course. Depending on what you are teaching, and your personal preferences, there are many ways to create content. My favorite is video. My courses are centered around programming and software programs, so I use recording software to record my screen and my voice. These videos are the primary mode of instruction for my courses. You can find a number of free screen recorders and video editing programs to help you with this.

Video isn’t the only option. You can also create PDF documents or web pages that contain your course content. This is where using a course marketplace or freemium website can be useful. These products usually have a course builder embedded in the websites to create and format content. I consider content creation the easiest, but most time-consuming part of course creation. The course content is what I’m excited about. It’s what I want to teach. Just know that most good content takes time to create.

Market Your Course

Now that your course is created you need to make sure potential students actually see it. If you host your course on Udemy (or a similar website) your course will automatically be marketed to potential students. However, you will take home a greater percentage of course sales if you can get students to access the course with your personal link or coupon code. When hosting on a course marketplace it still pays to do your own marketing.

If you host your course on your own website, or a freemium website, you’ll have to find a way to get your course in front of prospective students. If you already have a mailing list or other audience you can market to them. I market my courses through my mailing list, YouTube channel, and Facebook page. Additionally, you can invest some money to market your course on Facebook, with Google Ads, etc. If prospective students don’t know your course exists they can never buy it, no matter how great your content is.


It’s quite easy to generate passive income with online courses. You can start by hosting in an online course marketplace, which takes care of most of the tedious logistics. As your following grows you can transition to other platforms. Being an online instructor gives you freedom to create what you want, the way you want, when you want. If you work hard, online teaching could be the way to get paid for creating what you are passionate about.