So its the end of another month – another quarter anywhere so how is my journey to passive income online. Well to be honest its been flat-lining since my record of making over $2000 in one month – in July. Bouncing around at the same level give or take in US$ terms, dropping in local currency because of the strength of both my local currencies (yes I run accounts in two countries – I don’t recommend it!).
Oh and finally spring has sprung – downunder in Perth anyways – finally I might add, so much for global warming its been freezing here for far too long. The photos in this post were taken in King’s Park, Perth a couple of weeks ago – yes we have quite a display of wildflowers at the moment.
New Custom Thesis Theme
I’ve been spring cleaning this blog too – a couple of you have noticed that the design has changed a fair bit. None of my doing – Costa who makes cool custom WordPress themes at blogigs.com wrote to me saying that my previous design hurt his head and here is a new one. Well OK I can take a hint – I never claimed to be a designer – we played with his suggestion a bit so I am now down the beach (Indian Ocean) with my laptop. (BTW for any of you whose dream it is to sit under the sun umbrella with your laptop -reality check – sand is not good for laptops, sun umbrella as illustrated won’t stay up in an off-shore breeze, and won’t stop enough UV to prevent you coming out looking like a lobster. Leave the laptop at home when you go to the beach- but yes the beach is less than 10 minutes walk from my house! ) . Anyway if you want to know techie stuff like how to remove dates from any WordPress theme then check out Costa’s site. And BTW don’t tell me you aren’t technical – go learn how to do this stuff – its not hard and blogs like Costa’s will give you the right information. HTML and CSS are the basics of the Internet and yes you do evenutally need to know a bit about them.
Tracking Your Monthly Income Online
Anyway back to the subject to hand monthly income and managing cash. I don’t know about you – I am yet to see a QuickBooks or similar version which says – this is how to manage your online money – so I have kinda made up my own version – I thought it might help some of you. From day one its been important to me to know how much I made each month – that was my basic aim – $5000/month – so I really needed to see where I was at – even when I didn’t like the answer.
For the last year or so I have run a spreadsheet – its imaginatively named “income” – across the top I have the months : Jan, Feb etc – down the page I list my online income sources for the month. Note I ignore when I will actually get paid that income – I just record what I earned that month. This is important – clickbank took over a year to pay me out, Amazon hasn’t yet, some affiliates pay 90 days in arrears. All of that is very relevant to your cash flow – but not to my aim in this case: to track my actual income from the month.
I categorise my income into the following block – and use sub-totals so I know what percentage of my income is passive and what is “active” – currently I am running rows down the spreadsheet which look like this:
- Niche Website income
- Make Money Online Affiliates
- various things I flog from this blog and my HubPages which you guys are kind enough to give me the commission on – one line per an affiliate
- Freelancing and Consulting
- Various writing clients
- Today.com – yup they still pay me (a little)
- SEO consultancy
- Hosting for clients
- Website /Domain Sales
- Domains sold
- Residual Income Websites sold
The interesting thing when you split your income up like this – you will see the swings and round abouts far more clearly – Adsense tanked for me in September, but I had my best eBay month ever and a pretty good one iwth Amazon. You can step back and see the weakness in your business model. Basically the income in the first two groups are fairly passive income sources. The income shows up at least a month after I do the work – sometimes several months.
I try a lot of stuff in group two some work well but then the product is withdrawn e.g. NicheDevil, some work well but are too cheap and too niche to make me much (Elegant Themes), some are surprise stars (7 Minute Articles), others just trundle on and give me a sale or 2 a month without much effort (Hostgator) on part – everyone needs hosting from time-to-time.
Analysing Your Data To Plan Your Business
This month I went back through my last few months of the new tax year (1 July in Australia) and identified each item for my accountant – I got to wondering about my expenses – I have never tracked them in detail – they have always been lower than my income (i.e. if there was money in my PayPal account I could afford it – if there wasn’t I couldn’t), but I looked more closely this month. My current on-going expenses are;
The KeyWord Academy: $33
Various services for distributing my articles $125
Average cost for domain renewals $40 – this is very up and down because last year I went thru cycles of buying domains and then giving up on new domains for months at a time.
So my fixed expenses to stay in business are around $225 – I don’t know about you – but that’s pretty darn cheap rent where I live! For tax purposes of course I add in the Internet, a percentage of my rent, power bill etc etc – but those are the real costs of doing business – doing business online is not free – but its pretty darn cheap.
The obvious thing that struck me once I wrote these figures down is that I needed to spending more money! I am considering a nice resort for Christmas actually – well yes- but that’s not what I meant. In terms of the business I needed to be investing more money back into it. I don’t know what figures are supposed to be a good rule of thumb – but for me I figured I should be spending at least 50% of my passive income into building more of the same – that only makes sense!
Having said that I immediately decided to up my budget for outsourcing writing on my sites and also decided to budget at least five new domains from freshdrop a month – where a dropped dot com costs me $12.45 after using the emma30 code which will get you the renewal for $7.49). Given that I have decided to try look to start selling five websites a month – it seems reasonable to buy the stock at that rate.
I am almost certainly going to buy new hosting – nothing wrong with HostGator but I want to spread my IP’s around if you know what I mean. BTW if anyone is looking for some very cheap hosting check out QiQ who has an offer until the 9 October for a years hosting for £11 ($17) – only one site and only per a customer – but that’s less than $1.50/month!
This turned into another long ramble – but I hoped it was useful to some of you. As a business owner you need to look hard at your figures to know where to go with your business in the next month. I have found that my start of month routine is less and less about wow I made some money from an affiliate and more and more about he big picture – where is the money coming from – will it continue?, how can I can I make it continue? how can I diversify? did I achieve what I wanted last month? if not why no? if yes why?
For those of you who are still confused as to which you might want to check out problogger.com – or at least Grizz’s take on Darren’s site!