I’ve recently shared with you readers that for the next three months I’m going to focus solely on writing – a true passion of mine – while simultaneously flexing some serious frugality muscles to see if it’s possible to write for a living. What I’m trying to accomplish is effectively a career change where I no longer work full-time at a car dealership and instead focus on inspiring others through my words.
Don’t worry, I’m still marching down the path to financial independence as determined as ever. I just look at this as a different road to the same destination. Whereas before I was driving down the freeway at 80 miles per hour, I’m now taking a back country road at a more comfortable 45 mph. So I’m still driving in the same direction, but at a slower and more enjoyable pace. I don’t know if this little experiment is going to work or not, but I’m excited to try it out. And I will only consider this career change a success if the gap between income and expenses is large enough to allow for regular investments, just the same as it was before.
In the meantime, I have had a few readers ask me if I could open up and share exactly how I generate income from writing. I’m happy to oblige; however, I won’t make this type of post a regular occurrence as I find blogs that talk too much about blogging kind of boring.
Passive Versus Active Income
One reader in particular noted that my blog was now worth more than my portfolio, as the income the former generates far outpaces the latter. Maybe I should blog about blogging after all?
Well, this isn’t really the case. The income my portfolio generates is completely passive. No matter what I do for the next year, The Coca-Cola Company (KO) is going to send me four dividend payments. I could sleep in until 2 p.m. every single day for the next 365 days and do nothing but eat ice cream. I wouldn’t be in real great shape physically, mentally, or emotionally, but I’d still collect those four dividend payments from Coke. Those checks require no work on my part other than continuing to hold on to the shares I’ve already purchased.
However, if I stop writing this blog ceases to interest anyone and eventually will stop generating revenue. So it’s an active income source versus the passivity of dividend income. I simply consider this blog and my other writing activities a job I just really happen to enjoy, and one that I hope to eventually generate income on par with what I could make if I were to go out and work at a more conventional job for a living.
I’m No Expert
It should be noted that here that I don’t consider myself an expert in this arena. I never took a course on blogging or bought some kind of e-book that explains how to generate online revenue. I simply aim to share and inspire with every post. I write my heart out and share as many details as I possibly can. The rest is really up to you readers. Put another way, it’s the immense support you all have provided me over the years that generates the revenue this site produces.
So I have no tricks or anything, but I will break down the income and I hope it serves as useful information to some of you out there. I’ll be as forthright as I can, although my income does oscillate quite a bit from month to month so what I’ll be sharing is just an approximation.
I’m expecting to generate approximately $1,800 per month in online income going forward, and I’ll show you how that looks.
- Advertising on Dividend Mantra – $1,200/month
This is the bulk of my online income right now. This income is generated via the passive ads you see on the blog. I don’t really sell anything here, so my success in this category is largely based on the ad quality from the providers, whether or not you readers then click on those ads, and my pageviews. The only thing I can control is the pageviews, although even then I have limited control. For perspective, I typically receive between 200,000 and 230,000 pageviews per month based on the last six months worth of data.
I don’t really sell anything here at the site, which is why I like banner ads – they don’t require me to sell anything to you guys. Thus, I can concentrate on writing. Obviously, you readers are really supporting me here in this category. Thank you!
Most of this income comes by way of the Google AdSense program. Although I do have accounts with a couple of other advertisers, AdSense is by far my largest advertising income producer.
- Freelance Writing – $500/month
I’m hoping to increase this in the future now that I have more time for writing. Whereas some people may enter into blogging and eventually try to hire off the writing and automate everything, I really enjoy writing and interacting with like-minded investors and frugalists. So I’m not looking to hire anything off. On the contrary, I’m hoping to write even more than I do now. The only downside of more freelance writing, however, will be that I’ll have less time to write here at Dividend Mantra. But I should be able to maintain a schedule where I’m able to write at least three new articles per week here on the blog even if my freelance writing triples.
An example of my freelance writing can be found at Daily Trade Alert. Specifically, I write a weekly series where dividend growth stocks that go ex-dividend the following week are highlighted. I then analyze one of these companies in-depth and discuss certain quantitative and qualitative aspects before valuing shares. Finally, I conclude whether shares in that particular company are a buy, hold, or sell. You can see some of the past articles here.
- Affiliate Sales – $100/month
This income is generated via any sales that come by way of the blog. For instance, I have some affiliate partners (Scottrade, Personal Capital,and Bluehost) on my sidebar, and if you sign up for an account with one of these companies I could potentially earn a small commission. I only have these three companies listed there because I either personally use their services or can personally vouch for them due to the high amount of value they provide. Thus, I feel 100% comfortable with wholeheartedly recommending those companies. Likewise, I have book recommendations on my Getting Started page, and if any of those books are purchased I earn a small commission. Again, these are only recommendations because I have personally read and benefited from these books. I don’t recommend anything that I haven’t personally found value in.
This income is small and hasn’t really grown over the last six months or so, and I actually rounded this figure up a little generously. However, as I stated earlier, I’m not big on directly selling anything. As such, I’m not actively trying to really grow this income. I simply put products and/or services out there that I personally recommend and if some readers out there then go out and buy those services and/or products and benefit then I feel good about that. The income is just icing on the cake.
Expenses And Taxes
It should be noted that I also incur expenses from running this blog. Namely, I have hosting fees that currently run $150 per month with Liquid Web. I also use an email service (combination of MailPoet and Elastic Email) that costs approximately $20 per month. I could go cheaper, especially with hosting, but much like the companies I invest in, I like to stick to high-quality providers. And after a horrendous experience with another hosting provider, I moved over to Liquid Web and have been very happy ever since. Plus, there’s a lot of room for growth under my current plan, which means there won’t be any slowdowns in case Dividend Mantra grows from here. (Edit to add: I use Liquid Web because of the size of my site, but I recommend Bluehost for most everyone else since they provide a great platform for much less money.)
In addition, I’ll have taxes to pay on any income earned from online activities. I’m currently paying quarterly estimated taxes, and will have to increase this next year if I’m still earning an income solely from writing as I won’t have any regular withholding from a traditional paycheck. Taxes will come out of the gross income, and the income I’ll be reporting in my monthly budgets will always show income net of taxes.
So that’s it. I don’t have any secrets. I’m simply here to share my journey, and in that journey I hope to inspire others to take control of their finances. I believe financial freedom is attainable for everyone, not just those that make a lot of money. And I aim to be proof of that belief. I never made anywhere close to six figures while I was working as a service advisor, and as you can tell by this post I certainly don’t make anywhere near that now. But controlling your expenses through careful budgeting, taking advantage of opportunities, investing in high-quality companies that pay and regularly raise dividends, and staying diligent and persistent can yield wonders.
Full Disclosure: Long KO
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Note: This post includes affiliate links. I may receive a commission if you sign up for services and/or purchase products using the links in the article. However, again, I only recommend products and/or services I’ve personally used and/or found value in. I don’t blindly recommend anything. Furthermore, using these links will not add any cost to you, and in some cases may actually offer a special discount.
Edit: Updated affiliate links.