Make Passive Income Programming — 5 Incomes for Software Developers
By: Grant Darling
Tags: Passive Income, Programming, Web Development, Make Money, Entrepreneurship

Wouldn’t it be beautiful to get paid to do something that you love? Better yet, what if that thing could passively generate you a hefty chunk of change every year? Well, if you’re one of the lucky souls that found a passion for programming then I have good news for you. There are a ton of ways for software developers to make passive income programming. While additionally reaping many other benefits for their career as well. As a self-taught software developer who has a Bachelor of Commerce degree, I felt obligated to share the knowledge I have with the community. So without further ado, here are five ways you can turn your coding abilities into another passive income stream.

1. Build Software

Hopefully, it doesn’t come as a surprise that building software is the first method on this list. I mean, this is what we do! The great thing about creating software is that once it’s built (and relatively bug-free), there isn’t much more work you need to put into it. Especially if that software only has one purpose and doesn’t require additional features being implemented. So how can we turn software development into a passive income stream? Well, there are a few approaches we could follow.

Personal Projects

The first way to make money building software is by creating your own software. Something that people will actually find useful. Then selling that invention either as a SaaS or through advertising within the platform. This can literally be anything. Is there something you wish existed that made your life easier? Does something exist but could be done better? As long as you can solve some specific pain points and there is a demand for the software, there’s a chance you can monetize it!

For an example of this approach, check out Glide.js. The developers at Glide.js realized there was a lot of demand for a javascript slider library with a very small codebase (~23kb). So they decided to build a library that makes slider development trivial without bloating your codebase. Since they were first to market a product like this, they were able to build a network of developers that use and recommend their software. Now anyone that views the documentation page gets greeted with a non-obtrusive carbon ad that earns money passively. In addition, they also have a donation page if you feel inclined to support them.

The great thing about building software as passive income is that you can use this as an opportunity to learn that new language or framework you’ve been putting off. Which would make a great addition to your portfolio and expand your knowledge. Not only that, whatever you build could make somebody’s life easier. Allowing you to contribute back to the community that gives you so much. Doesn’t that sound amazing? I think it does.

If you are a new developer or always get stuck on the process of building software, check out my guide on How To Plan a Coding Project — A Programming Outline. It’s a way to approach software development by breaking it down into steps (much like the concept of programming).

Partnering Up

The second way to make money building software would be to partner up with a business owner or entrepreneur that has a great idea for an application. Preferably a simple one that doesn’t require a significant amount of development time.

Now here is where this becomes a passive stream and not just another freelance client. Agree on a contract that gives you a percentage of the incoming revenue or profit for the product. If additions need to be made for the software, you can either include a fixed amount of working hours a month, work at a reduced hourly rate, or outsource a developer. Whatever you decide, once the product is built, the business aspect is now out of your hands. No need to worry about marketing or sales. Just for your monthly royalty checks! Do this for a few pieces of software and pretty soon you will have a pretty great passive income stream.

You might be wondering how you can find a business partner like this? Well, there is no shortage of great business ideas from entrepreneurial-minded individuals.

A great place to start for this could be r/Entrepreneur or any forum board or group that business professionals might hang out. In my personal opinion, finding a business partner online can be a little.. sketchy. Personally, I believe working with local businesses’ can be a much safer route to go down. Most of them might not have a great app idea but they do have products to sell. Which brings me to our next great passive income stream.

2. eCommerce & Shopify

If you have ever thought about diving into the world of eCommerce, now is the time. There are many businesses, both local and abroad, that could benefit from providing an online outlet for their storefront. Following the methodology above, you can very easily make passive income by building eCommerce stores with Shopify. Offer to build the stores for free, walk them through importing products, and in return, receive a small percentage of the revenue. This approach is easy to sell businesses on because it is has a very low-risk factor. If the store makes less than expected, the business owner is no worse off than before. Making it a much easier sell. So, how does eCommerce with Shopify differ from building any other type of software? Great question. I am going to answer that.

The Benefits of Shopify

The first reason is that it can be dead simple to build an eCommerce store with Shopify. I built my first Shopify store within a few weeks at the beginning of my career as a developer. That store generated +$75K in the first year. In addition, the liquid templating language used by Shopify is very intuitive to pick up and makes it easy to build out frontend that displays product data. There is also a plethora of tools available to make development easier while financial data is all handled by Shopify. Making the process as smooth as possible.

I am not afraid to admit that in my early days I assumed Shopify was a joke platform. Meant solely for ambitious but delusional dropshippers that didn’t know the first thing about programming or business. After my experience with the platform, I can confidently say I love Shopify and what they have done for eCommerce and their developers. I can honestly say I couldn’t imagine building another Frankenstein WooCommerce site again.

Shopify Partner Program

Shopify also has a partnership program that revolves around the idea of passive income. There are plenty of ways to make passive income with Shopify. Whether it’s building tools, referring store owners or developing customer stores yourself. That’s right, in addition to working out a revenue model with your clients, Shopify also pays you recurring revenue based on your client’s Shopify plan. Better yet, you have access to each store’s dashboard so you can work out how much your clients owe you every month.

Seriously. Shopify may be your best bet in making passive income. Especially if you excel in frontend development. Here is a screenshot of the $66 USD I made this year with Shopify, along with one of my client’s store that made ~$75K this year.

Even by making 5% of revenue with this store, you would receive ~$3,500 in completely passive income. Obviously, don’t expect every store to make this kind of revenue, but if you’re smart about it, and pick your businesses right, you could make it a full-time job!

3. Start A Development Blog

Looking for a long term strategy? Starting a development blog can be a great way to earn passive income programming. It is also a great way to stay up to date on current technologies, help beginners with the knowledge you have and improve your writing skills. I mean, who doesn’t love a developer who can actually write a decent README file? I know I do.

You can check out my blog here: thecodebytes.com

The truth about earning revenue from a blog is that it can take a lot of time and effort to build a following and reap any sort of benefits. However, it can definitely be done. A close friend of mine actually earned +$7K from blogging in 2019 and has been growing ever since. There are essentially three ways to make money passively writing about code. I’ll walk through them for you.

Advertising

I know this has been mentioned but this is probably the easiest of the monetization methods mentioned. Advertising partners such as Adsense or Monumetric allow you to display advertisements on your blog and get paid passively! It really doesn’t get much easier than that. The only challenge from there is making sure your content is of high quality and by building an audience.

Affiliates

Another popular way for bloggers to make money is with affiliate programs. Affiliates are essentially links pointing to products or services that you partner with. If someone signs up for an affiliate from your unique URL, the partner will give you some form of compensation. Amazon has a popular affiliate program but if you’re looking for something closer related to the development-sphere, Shopify, Codeacademy and probably any other platform that has a large following would be a great place to start.

3rd Party Sites

In addition to your personal blog, I also wanted to state that there are third party writing platforms that can help you earn money by writing about code. I personally use Medium, but there are a lot of sites out there. Dev.to and Hackernoon are two cool platforms that allow you to cross-post from your own blog. Allowing you to link back to your original content while still helping the community. A big win/win if you ask me!

How much money can you make with Medium? Well, it depends on how much you write and whether or not the post goes viral. I haven’t written much on medium but I wanted to include a shameless screenshot for full transparency. As you can see, in total I earned around $22.29 from my three articles. This number isn’t great, but if you spent some serious time writing articles, this number would add up. My articles are continuing to make money as well. You can check out what I write about here.

Important Note: If you are interested in making money with Medium. Make sure you sign up for the Medium Partnership Program or you won’t get paid.

4. Online Tutoring Videos

The fourth way to make passive income programming is through online tutoring. If you are more of a visual and outgoing person, video content is the way to go (aren’t all programmers outgoing?). The best part about video content is that it is re-usable. You record it once and then it is easily distributable forever. There are two main forms of online tutoring videos.

Youtube

Youtube follows a similar revenue model as blogging. Making most of your money off of advertising or affiliate sales. It also works by building a consistent following and growing your account. For that reason, I won’t talk too much about it. If you are really looking to grow your passive income programming streams, building both a blog and youtube while cross-posting wouldn’t be a bad idea! Allowing you to grow two revenue streams at once.

Massive Open Online Courses

A second way to make money with online tutoring is with MOOCs (Massive Open Online Courses). These courses allow you as a developer to make a course and share it online for anyone to view for a set price. If you are a good developer and have gained a decent following online (through youtube or blogging), selling a MOOC is a very realistic way to make passive income.

Figuring out what to make a course about is a balancing act between both what is in demand and what has low competition. If there is something you are highly skilled in that many developers want to know more about, this could a great idea for a course.

How much money can you make with MOOCs? Honestly, the sky’s the limit. Take Brad Traversy’s MERN Stack Front To Back. With 42,945 students x ~$20 per student he has made over 1 million dollars from one course. Obviously, he has spent a lot of time building up his audience by consistently providing quality content. However, you can see the height of the pay ceiling.

It’s never been easier to make online courses about code. Sites like udemy don’t even require a degree to become a teacher. Just signup and upload your content. The student reviews will be the deciding factor on whether or not your content is worth paying for.

*Your students analyzing your content quality*

5. Outsourcing Freelancing Clients

This brings us to the final passive income idea for developers. Finding and outsourcing freelance clients. When I first started out as a self-taught developer, the only work I could find was as a freelancer. It was actually very difficult to find my first client that paid well. But after that, it became significantly easier and easier to find new clients. Mainly due to my growing portfolio and word of mouth. So much that I had to start turning down offers because I could not work fast enough to take on additional clients. The solution? Start outsourcing freelance clients to other developers.

As a programmer, you have two key characteristics for this to work. First, you know what tools and approximate time frames it would take to get something done. Second, you also have the skillset to find other developers and vet them for their abilities. By outsourcing developers that are willing to work for a reduced rate, you can essentially be a middle man for clients. Taking freelance offers, sending them to your developers and sending them back to your clients.

This is a mutually beneficial scenario. Clients like someone in their time zone who is available, fluent in English and gets the job done on time, on budget and with good coding standards. You can be the one to bridge the gap for developers overseas. Allowing them to make a liveable wage and yourself to make passive income.

Now, I know that this last one isn’t technically passive. However, if you can scale it, eventually you could also hire someone to take over the management aspect. At this point, you are essentially just running a business. However, it would be a passive business. Just something to keep in mind.

Closing Remarks

So there you have it. Five ways to make passive income with programming that will actually make you money. As a developer, you are blessed with a high barrier to entry that makes it very difficult for a non-technical person to make money within this niche. Giving you much better odds of making an income without worrying about steep competition.

Now, I am not saying these methods will be easy. People often confuse passive income with easy income. However, is anything worth doing ever easy? We all know programming isn’t.

I hope I have proven that with enough hard work upfront, you can reap the benefits of passive income for years to come. Finally allowing you to quit your day job, save for that vacation or simply invest some extra money. I really don’t care what you do. I just wanted to let you know that these options are always available to you. Because I love you. So you’re welcome.

If you are a beginner coder, check out my article on Become a Professional Full Stack Web Developer in 2020. It should give you a good starting point if you want to delve into the wide world of Web Development. Happy coding!