5 Things Nobody Tells You About Making Money in Your Underwear

That’s the dream, right?

No dragging your butt out of bed at an ungodly hour, sitting in traffic, being stuck inside an office all day, and slaving away your life for a measly paycheck.

Instead, wake up whenever you feel like it, saunter over to the laptop in your skivvies, and sip a cup of java while you “work.” Take a vacation whenever you want, spend time with your loved ones, and travel the freakin’ world.

Hell, yeah…

Too bad it’s just a fairytale, though. We’ve all seen the scammy ads about making $80 an hour filling out surveys, starting your own online store in a “virtual mall,” making megabucks from reselling old crap on eBay or Amazon. There are a gazillion different variations, all of them promising you easy money, all of them stoking your hope of a better life, all of them a little too ridiculous for you to believe in, even though you really, REALLY want to believe.

But you’re not a fool. You know they’re not telling you the truth. It can’t be as easy as they make it sound.

And you’re right. I’ve made my living on the Internet for eight years now, and while it’s certainly nice, there’s also a lot nobody is telling you. Not because it’s a secret, but because most people don’t actually want the truth. They want to believe it’s easy, fun, straightforward.

If anything though, it’s the opposite, and that brings us to the first lesson:

Lesson #1: You can’t do this in your “spare time.”

Regardless of whether you’re starting a blog, building an online course, or creating your own virtual storefront, you probably don’t think of it as a “business.” It’s a project, a hobby, a “side hustle.” No offices, no employees, no budgets or business plans – it’s just you tinkering around in your spare time.


Well… not if you want to succeed.

In my experience, people who make a nice living online view it as a business from day one. That doesn’t necessarily mean they get an office or hire employees, but they approach it with the same mindset any sane person would have when starting any other type of business.

For instance, let’s say you’re starting a dry-cleaning business. You’d probably go to work for another dry cleaner first, learn the craft, figure out how you would do things differently, save your money, and then launch your own competing dry-cleaning business with a solid understanding of the market and what it takes to succeed.

In other words, you would put serious thought and effort into it, start preparing months or even years in advance and work your ass off for several years to make the business take off. That’s a normal mindset for anyone starting a new venture.

For some reason though, people’s mindset is entirely different when thinking about making money on the Internet. They are looking for quick and easy, not hard and long. They want a way to game the system, not a way to win the game. They try to minimize their investment of time and money, not maximize their ROI.

And I’ll be straight with you:

That’s dumb.

Making money on the Internet is just as difficult as making money in any other type of business. The capital requirements aren’t as high as opening a brick-and-mortar store like a dry-cleaning business or a restaurant, meaning it’s easier to get started, but you’re also facing global competition. You’ll need to be better, smarter, and faster than entrepreneurs only competing in their local markets.

making money on the internet

The only appropriate mindset is to accept that you are investing years of your life and every penny of your savings into a venture that might ultimately fail. If it does succeed, it’s also not going to be because of your creative genius or some magical technology that makes money pop out of your computer. It’s going to be because of hard work, sound thinking, and skill.

Especially skill. Let’s talk about that next…

Lesson #2: Being smart isn’t enough.

We’ve all heard the story of the stereotypical Internet entrepreneur. Some smart kid sees an opportunity nobody else does, works night and day to create a groundbreaking product, and then goes on to become filthy stinking rich. In other words, the equation is something like this:

Smart + opportunity + hard work = success.

And that’s a beautiful story. Like many stories, it’s also mostly true, but it’s missing some important details.

To make money online, you do need to be smart, you need to find an opportunity, and you need to work hard. All those variables are totally accurate. What no one tells you is that there’s one additional variable that’s just as important as all the others combined:

Skill. If we were to modify our equation, it would look like this:

(Smart + opportunity + hard work) X Skill = Success.

And here’s the part that’s really hard to wrap your mind around:

The specific skill you need changes depending on the opportunity. If you want to start a freelance graphic design business, you’d better be a pretty freaking good graphic designer. If you want to start the next Facebook, on the other hand, you’d better be a pretty freaking amazing programmer. To be more precise, you need whatever skills are necessary to capitalize on the opportunity better than all the other smart, hard-working people pursuing the same opportunity.

In other words, you need to be elite. I’m not sure what the precise measurement of “eliteness” is, but if I had to put a number on it, I would say you need to be in the top one percent of all people worldwide with your skill. That might sound scary, but it’s actually not a very high bar because the vast majority of people doing anything suck. If you have at least a little natural talent for the skill, you can probably become a member of the top one percent with a few years of diligent work and study. Here’s how…

Lesson #3: Education is everything (and nothing).

The whole mythos around Internet entrepreneurs is they spurn education. Steve Jobs, Mark Zuckerberg, and Bill Gates dropped out of school. Tech billionaire Peter Thiel pays entrepreneurs $100,000 NOT to go to college. That’s as “anti-education” as it gets.

Or is it?

If you look a little deeper, you’ll find that most entrepreneurs are devout believers in education, but they also believe that certain systems of education, such as universities, are fundamentally flawed. They espouse a more experimental model of learning where the student states their assumptions, poses a hypothesis, and then proceeds to test that hypothesis, not only to learn but also to hone their skills in the real world.

In other words, entrepreneurs learn how to teach themselves. Not just by reading books, not just by listening to teachers, but by observing the world around them, thinking about what they see, and then coming up with their own interpretations. They don’t depend on anyone to “break it down” for them. They figure it out for themselves.

And it’s not just a learning style. In many cases, there’s no alternative.

With making money on the Internet, for example, there isn’t a degree program or book that’ll teach you everything. It doesn’t exist, and it never will, because the Internet is evolving too quickly. By the time someone created the book or degree program, most of it would be out of date.

There’s one exception: skills. Many of the skills necessary to build an online business either don’t change much, or they are easily transferable. For example, if you learn one programming language, it’s relatively easy to pick up another. Negotiation, business writing, and marketing are skill sets that haven’t changed much in decades or even centuries.

And it’s useful to have a teacher. If you’re learning how to write an advertisement, for example, you can learn a lot faster if you have a master copywriter critique your ads.

In my experience, this is where books, online courses, and other forms of traditional education shine: the acquisition of evergreen skills. You can then apply those skills in the real world to continue learning. For instance, the following skills are always in demand and have long-term value:

  1. Copywriting
  2. Graphic design
  3. Programming
  4. Content creation
  5. Content promotion
  6. Marketing automation
  7. Public speaking
  8. Ad management
  9. Social media management
  10. Project management

Freelancers with elite skills in one or more of those areas often make six figures per year, working completely online. They get to choose their hours, travel when they feel like it, and, and live a pretty awesome lifestyle.

Granted, it’s not total freedom, because they do have to work, but they also have a lot of control over how they work, and in my experience, that’s what really matters. Here’s what I mean…

Lesson #4 You don’t actually want freedom.

Let me guess…

You love the idea of building a passive income that flows into your bank account like clockwork every month?

Maybe it’s the idea of working in your underwear, choosing your own hours, traveling the world, or whatever. The idea is passive income = freedom.

And here’s the good news:

It’s true. Over the last eight years, I’ve built a passive income “machine” that’s allowed me to travel and live a life most people only dream about.

But it took a long time. Contrary to popular belief, passive income isn’t just something you can create out of thin air. It takes time to build, and it’s a five-stage process:

  1. Learn a valuable skill. We discussed this one in the last couple of lessons. I recommend picking one of the ten skills and taking online classes.
  2. Practice until you are elite. Again, you are competing against everyone in the world, so it’s essential you’re in the top 1%. The bad news is, you’ll probably start in the bottom 10% and work your way up, usually by working as either an employee or freelancer.
  3. Start your own business. Once you’ve built a collection of elite skills, you’ll probably run across an irresistible opportunity, and you’ll jump in with both feet. It’ll take you several years or maybe even decades to become a successful entrepreneur.
  4. Replace yourself. Passive income is the result of turning what you do into a system that runs without you. Sometimes an employee replaces you, sometimes you can automate everything with software, and sometimes you simply teach what you’ve learned through an online course.
  5. Fine tune the machine. The bad news about passive income is it’s almost never entirely passive. Yes, you can reduce your number of hours, but you’ll still want to spend a few hours each week fine-tuning the machine. This is where the idea of the “Four Hour Workweek” came from.

And let’s be clear:

You don’t receive any passive income until the final step. From start to finish, I don’t know anyone who has done it in less than five years, and it takes most people 10+.

I realize that’s way more work than you probably anticipated, but here’s the good news:

Chances are, you don’t really want total freedom. What you actually desire is flexibility, and that’s much easier to achieve.

What’s the difference?

Well, freedom means you can get up every morning and do whatever the hell you want. Play golf, go surfing, travel to Paris, or just stay in bed all day. You’re in total control of every aspect of your life.

Flexibility over Freedom

Flexibility, on the other hand, only gives you partial control. You still have to work, but you decide when and where. For instance, maybe you take your family to Italy in the summer for six weeks, work every morning and evening on your laptop, and then gallivant around the rest of the day.

Still sounds pretty good, right? And the good news is, it takes far less time and effort to get there. Maybe 6-12 months.

Here’s how: take a few online courses on any of the skills I recommended, do a bit of free work for friends and family as a way of building your portfolio, and then apply for virtual jobs requiring that skill. You may not make a lot of money to start, but as your skill grows, so will your income, and you’ll eventually find it easy to replace your day job.

You can also accelerate the process by moving to a cheaper country, which brings us to:

Lesson #5: It sucks to be an American.

Probably going to get flamed for saying that, but it’s true, and not just for Americans. Living in Canada, England, Australia, or many European countries is just as tough, and the reason is simple:

It’s expensive.

Between our houses, cars, meals, gas, and all the other little expenses, it’s hard to survive in most cities for under $3000 per month. In some big cities like San Francisco, New York, or London, you can barely get by on $8-10k a month.

But take a look at this…

Jon in Mazatlan, Mexico

I rented a luxury condo on the beach in Mazatlan, Mexico for $1600 a month. A meal at a restaurant was about four dollars. I could get a reputable doctor who spoke English to do a house call for $20. Altogether, I spent about $3,000 a month, and I lived like a king.

And here’s the crazy part:

I was able to make that much working only 20 hours a week as a writer and editor. As my skills improved, eventually my income crossed $10,000 per month – more than three times my living expenses.

There were also tax advantages. I won’t go into the details here, but Google “earned income tax credit.” It’s complicated, but you can actually save a lot of money on your taxes by leaving the US.

Altogether, it’s far easier to make a living online when you’re living in another country, and the lifestyle is better too. The biggest reason I came back to the US is that I eventually started my own company, and banks get a little nervous when you’re processing more than $1 million per year in credit card transactions from your laptop on a beach in Mexico. No idea why… haha. It was also nice coming home after living abroad for years.

The bottom line?

Not only does the Internet give you opportunities for increasing your income, but it also gives you ways to reduce your expenses substantially. It’s by no means a requirement to move to another country, but it certainly makes making a living easier, and when you’re getting started, you can use all the advantages you can get.

Here’s How to Get Started Making Money Online

So, we’ve covered a lot of ground here.

Mindsets, skills, passive income, having the flexibility you want to live the way you want. Hopefully, it’s all starting to make more sense.

But chances are, you’re wondering what to do first.

Should you create an online course? Start a blog? Find a freelance gig where you can learn and grow?

There are a lot of options, and the truth is, all of them are viable. Nobody follows exactly the same path.

But here’s what I recommend:

  1. Figure out what skills come naturally to you. Chances are one or two of the ten skills I listed are easier for you than for most other people.
  2. Buy a few online courses on those topics. In the future, I’ll publish some recommended courses, but until then, just use Google.
  3. Start applying for freelance gigs. You might get rejected a lot at first, but eventually, somebody will say yes, and you’ll make your first dollar off the Internet.

From there, you can scale up. Maybe you’ll start your own business with employees and offices, or maybe you’ll just become a highly paid freelancer. Neither path is right or wrong. It’s just two different lifestyles.

The bottom line?

Making money online isn’t a fairytale. You can do it. You just have to be smart about it and have realistic expectations.

Good luck!

About the Author: Jon Morrow is the CEO of Smart Blogger. Check out his new blog Unstoppable and read the launch post that went viral: 7 Life Lessons from a Guy Who Can’t Move Anything but His Face.

Read More: 5 Things Nobody Tells You About Making Money in Your Underwear

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