How to Make Passive Income Online in 2012 in 7 Simple Steps

Have you ever wanted to set up your own online business that brings in cash while you sleep? Imagine being able to do whatever you want with most of your time and still make a full time income, month after month.

You're about to learn how to make passive income online by using a simple system that's been proven over and over again to work. You can use this whether your goal is to have additional cash coming in on the side, or to quit your day job entirely.

Before we get into how to make passive income online, you need to understand that there is no magic pill. There are only proven models which work, but you need to take action. I recommend setting aside a couple of hours every day as your "profit hours" where you commit fully to building your online, passive income business.

Now, let's jump into how to make passive income online.

Step One: Decide On Your Niche

First, you need to locate your niche. A niche is the audience you will be marketing to. There are thousands of profitable niches out there. The best niches are ones where people have burning problems - such as debt, weight loss, make money, illness and so on.

I like using the following websites to brainstorm niche ideas:

• Amazon bestsellers
• Clickbank marketplace
• 43Things.com
• Buzzle Articles

Step Two: Locate your Keywords

Once you know what niche you're going to market to, the next step is to locate your keywords. Your keywords will be the bridge between you and your prospect. It's what your prospect will search for to find you. An excellent free keyword research tool is the Google Keyword tool. You want to look for keywords that have:

• High monthly search volume
• High CPC (cost per click)
• Low competition

Step Three: Register Your Domain and Get Hosting

After finding a main keyword and several related keywords, it's time to set up your website. You're going to need a domain and a place to host your domain. One thing I love about creating a passive income business online is that you can get started for very cheap. Hosting costs about $10 per month and a domain name costs about $10 per year.

Step Four: Install Your Blog

The next step in this "How to Make Passive Income Online In 2012" guide is to install Wordpress, a free, popular blogging platform. Wordpress allows you to easily manage your content and website without any HTML or programming knowledge.

Step Five: Add Your Content

Once your Wordpress blog is set up, you need to post unique content on your blog on a regular basis. Your content needs to provide real value to the reader and solve their needs. Ideally, this should be content that you write, but there are also article writing services you can outsource to.

Step Six: Monetize Your Website

Now, here's the fun part. In your content, you can actually links to affiliate products, so that every time someone buys something through your link, you get paid commission. Another way to monetize your website is to use Google AdSense, which displays ads on your site and pays you a few cents to tens of dollars every time someone clicks on an ad.

Step Seven: Attract Free Traffic

The last thing we need to do is to bring traffic to our blog. This article is about how to make passive income, so we need a free, long term traffic source. The ultimate way to do this is by SEO, or search engine optimization. This involves building links to your site from other websites and using your keyword as the anchor text. The more links you get from high quality sites, the higher you will rank in the search engines.

Once you're ranked high in the search engines, you'll enjoy a steady stream of visitors to your site every day. These visitors will click on your ads and affiliate links around the clock- on autopilot- allowing you to make passive income and have more free time!

Congrats! You now know how to make passive income on the internet. The next step is for you to take action and start enjoying more money and freedom in your life.