How I Made $2,667 In Passive Income In March ‘08
Finally I’m getting some traction with my passive income! After all, that’s what this blog is all about. The total for March 2008 is $2, 667.18, and I’m ecstatic to have broken the $2,500 per month barrier. If I can sustain it at $2,500 per month, thats $30,000 per year. While I’m not living in luxury, it’s definitely a great safety net to have. This represents a 11.9% jump from February’s passive income and it has been growing at a steady clip for quite a while now. Hopefully, I shouldn’t have a problem maintaining it.
Here’s the breakdown:
- Online Income: $1645.30
- Adsense: $339.28
- Linkworth: $456.70
- TLA: $103.61
- Kontera: $62.07
- Direct Ads: $330
- Prosper Referrals: $175
- Amazon: $117.82
- Domain Embarking: $60.82
- Savings Accounts: $133.10
- Real Estate Trust Deed: $0
- Direct Oil Drilling Investment: $270
- Dividends from Canroys: $517.71
- Other Dividends: $113.38
The adsense revenue dropped from last month. It looks like I was smart-priced. Every other day my revenue would drop to a third of the regular amount, despite getting more traffic. Very strange, but if it keeps up, I expect April’s adsense revenue to drop even lower. I’ve rearranged some of the ads and substituted Adsdaq to try and compensate for this loss of revenue. Adsdaq is similar to adsense except that you state your eCPM (cost per 1000 impressions) price. If they can find an advertiser at that price, they’ll display their ads, else they’ll display an alternative ad code, which in my case is adsense.
On the other hand, Linkworth has done really well on my sites. March’s income was almost double of February’s and I expect April’s income to be atleast $150 higher. I’m very happy with their service and I strongly endorse it. It took a while to start getting income, but it looks like a winner so far.
Text-Link-Ads is also doing moderately okay although its taking more time than Linkworth. Note that you’re not allowed to use both of them on the same site, so see which one works better for you. Between the two, my favorite is currently Linkworth.
Amazon affiliate income has started to pick up and hopefully it will continue as I learn more about affiliate marketing and try out different techniques to boost it.
Surprizingly, I found out that I had earned ~$60 from Domain Embarking, a site that helps you earn money from parked domains. I had a few sites that were parked with Sedo.com. In over 2 years, I make about 24 cents with Sedo, but with Domain Embarking, now I’m making some money atleast. To be fair, the $60 was earnings for the year till date, so it could have been only $20 for March. I’ll find out how it does in April to get a better idea. Regardless, its still a whole lot better than the $0.01 per month I was making with Sedo.
Prosper is still handing out $25 signup bonuses to new lenders. When lenders who sign up through my link and fund their account, I get $25 too. That’s how I made the $175 in referral fees. I also made around $30-$35 last month in prosper loans but since they usually issue a statement around the 5th of the month, i’ll exclude that income. I usually get around $180-200 every month from the loans, of which 70% is return of principle. Calculating it manually is just too tedious.
I also made around $1,000 from my other investments and dividends. Some of the stocks pay over 10% in annual dividends. Two of the oil investments are paying 15-18%. The third oil investment is currently barely producing, but that seems like it will improve over the next few months and boost that portion of my income too. Also, as the price of oil stays around $100 per barrel, the monthly payout (which is typically delayed by 3 months) will increase a little bit.
The Federal Reserve will probably continue to keep dropping interest rates so my savings interest will probably keep dropping. Luckily its a small portion of my income so the $6 drop from last month isn’t very significant.
While I made this income, I also had some expenses that I should disclose as well. I pay about $119.40 for annual hosting on Dream Host. It’s awesome and I strongly recommend it. They have one click install for wordpress, php forum software, mysql databases and other stuff. I’ve used GoDaddy in the past and I didn’t like their interface at all. Dream Host is a lot easier to use in my opinion. If you use coupon code “PassiveIncome” you’ll get $19.40 off the annual fee or you can use “Dividends” to get free domain registration. I also pay around $40 for domain registrations which I usually register with 1 and 1. At $6.99, they’re pretty cheap. On a monthly basis, these costs work out to less than $14.
I’ve also signed up with an automated article submission tool called Jetspinner that lets you create multiple unique versions of the same article for submission to article directories. This is a great method to created targeted backlinks to your site. Jetspinner is free but its sister product Jetsubmitter costs $17 per month and automates the account creation and article submission to 500+ directories.
I also spend between $300-500 a year on financial articles, books, magazines and newsletters which works out to about $20-40 per month. So in all, my expenses are about $60 on average per month.
Having a side income that sufficiently large to allow you to pay the rent and put food on the top is a great stress reliever. As you can see, I have multiple streams of diverse income. If one of them drops off (like maybe adsense), my passive income doesn’t just totally disappear.
I hope I’ve inspired all of you to try and boost your passive income or maybe add new sources to increase your current income streams. Let me know how you’re all doing.
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April 4th, 2008 at 3:33 am
I always enjoy reading this column for inspiration. Good job in March. Wow.
April 4th, 2008 at 5:34 am
Honestly, this is inspiring. I like how you lay it out and represent it. It makes sense to spread the methods of making money in case something does fall through. Kinda like not putting all your eggs in one basket…
April 4th, 2008 at 5:37 am
Nicely done. I never had any luck with Linkworth and had to drop it.
AdSense smart-pricing really sucks.
Are these numbers after taxes? I find that’s worth doing because then I know what my alternative income actually buys.
April 4th, 2008 at 6:48 am
Is your online income really passive? Perhaps you have explained something about this in another post. The dividends are pretty passive as they only require some analysis and purchasing every once in a while. However, blogs require constant creation of content - so it is a job….perhaps a more enjoyable job on your own terms, but never-the-less not passive.
April 4th, 2008 at 8:22 am
Lazy Man
they’re sort of after-taxes!
the canroys get their 15% taken out so they’re after taxes. Of the remaining income, a lot of it gets funneled through my corporation, so the tax consequence is minimal.
April 4th, 2008 at 8:32 am
Mike,
You’re right. Blogging is not really passive income, and I’ve mentioned this before.
The advantages of blogging are that they’re somewhat residual. I can disappear at will and not see a significant drop in income for a few months. I also have geographic independence (real handy when you’re traveling around Asia for a few months). And it has great flexibility of timing.
But I’ve broken everything down so you can classify it as you see fit.
This blog is to also serves as a journal and record for my investing relating activities.
April 4th, 2008 at 9:27 am
I’d like to read more about how you funnel things through your company to reduce taxes. I find that taxes are worse since you have to pay self-employment tax and both sides of social security. I’m still new at this, but my tax guy is showing some difficult things.
April 4th, 2008 at 9:48 am
Way to go L O D.
Do you keep reinvesting your passive income or do you spend it?
April 4th, 2008 at 11:25 am
Lazy Man: Paying extra self-employment tax & ss tax is a pain, for sure. But with the amount of deductions that you can reasonably make, I think it probably works out as a positive. I went the LLC route for simplicity. Setting up an S-Corp may work out better from a tax standpoint, but it sure seemed a lot more confusing, and a lot more work.
LOD: Amazing job - $2500+ per month is fantastic. The great thing about this type of income is that it tends to grow significantly over time.
April 4th, 2008 at 12:28 pm
Congratulations. Your success is truly inspiring. I am interested in learning more about “Of the remaining income, a lot of it gets funneled through my corporation, so the tax consequence is minimal.”. How do you do that? What kind of corp do you have? I am on a work visa? Can I still start a corp or do I have to wait till I get my GC. Any recommendations for good books on starting your own corporation.
April 4th, 2008 at 1:25 pm
Let me address the tax issue very briefly (don’t want a post-sized response).
1.You set up a separate tax entity, either a corp or an LLC.
2.You earn say $1000 per month.
3.You claim deductions for standard and customary expenses. For a web-based business, a home office, a separate business computer, a separate business internet and phone connections are usual expenses. Travel to any business seminars (like affiliate summit in Las Vegas) is also a deductible expense.
There are more deductions but I won’t go in to them here. Go to the taxes section of recommended reading list for more info.
4. You pay taxes on any income that is left.
I don’t have much income left over, and it’s taxable at 15%. If I do, I pay ~15% self-employment tax and use the money to fund my 401k & profit sharing plan combo, which is pretty unique and very few CPAs know how to set up. I’ve used this vehicle to invest in Everbank’s Japanese REIT CD and I had to send in 150 pages worth of documentation to open the account.
April 4th, 2008 at 5:28 pm
Are you satisfied with Kontera? I am not quite sure I am thrilled with them, could be the type of blog it is designed for.
April 4th, 2008 at 9:36 pm
Mark,
I’m not dissatified with Kontera. For less than an hours’s worth of work, if I can get $60 every month for ever, I’d say thats a pretty good return for the effort!
April 4th, 2008 at 9:46 pm
I love your site and what you’re doing but all you’re doing with posts like this is telling us numbers with no background. If you have a million dollars invested its easy to get numbers like that from dividends, whats the story? How many websites are you running to get revenues like that? I want to know how long it would take me to reach successes like you have.
April 4th, 2008 at 10:25 pm
Beau,
I have 3 websites. One of them is in partnership with a friend so I calculate only 50% of its income. Over 70% of the revenues are from this site.
Not knowing anything about you or your background I can’t guess how long it would take you to replicate any of this.
If I had to make a guess I’d say 6-12 months.
Regarding the dividends, its not too difficult to extrapolate how much money is invested. I got $130 from my savings and considering the most that banks offer is 4%, multiplying $130 by 12 and dividing by 4% gives us $39,000.
I’ve said that the oil investments yield around 15%. Using the same calculation, that gives us $21,600.
I’ve previously mentioned that the Canroys yield 10-13%. Assuming 12% on average and knowing that the monthly dividends are $517, you can calculate that the principle amount is roughly $51,700.
April 5th, 2008 at 1:02 am
Inspiring stuff: I do love it when a blog I read suddenly breaks away and starts doing the snowball thing of ever higher earnings/traffic. I’m not really getting the traffic to really monetize my Monevator site at the moment, but I’ll take a second look at your articles on the left their for tips!
Good luck hitting the $3000 barrier!
April 5th, 2008 at 9:59 am
Excellent and congratulations! I always look forward to seeing your monthly post and the progress you’ve made.
Best Wishes,
D4L
April 5th, 2008 at 2:57 pm
Lazy man,
here’s a link about forming corporations
http://wealthbuildinglessons.com/2007/04/04/how-forming-a-corporation-can-help-you-save-money/
April 5th, 2008 at 8:13 pm
Thank for the information, that puts it into perspective. I think the concept is great and look forward to reading more.
April 6th, 2008 at 8:05 pm
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April 7th, 2008 at 8:01 am
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April 7th, 2008 at 9:44 am
Sound great. Your adsense is doing well, just cant get mine going
April 8th, 2008 at 2:02 am
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April 8th, 2008 at 8:32 am
RE: being smartpriced, have you considered showing adsense only to vistors coming from search engines? We all know search engine visitors are far more likely to click adsense ads than regular readers. There are Wordpress plug-ins (and I’m assuming plug-ins for the other blogging systemas as well) that make this extremely easy. Your overall impressions will go down, and you will get fewer clicks overall, but your CTR should skyrocket and get you out of smart-priced land pretty quickly so you should start getting highly-paid clicks again. You might make more or less this way, but it’s something to consider.
April 8th, 2008 at 9:04 am
kyle,
thanks for the tip. definitely makes sense.
April 8th, 2008 at 10:09 am
what plug-ins would you recommend for that?
April 8th, 2008 at 11:39 am
Wow that is very cool. Congrats.
April 9th, 2008 at 6:02 am
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April 9th, 2008 at 1:16 pm
You’re an inspiration! I just started in January, and work full time, so haven’t too much time to spend, but it’s coming along.
Best,
Lisa
April 9th, 2008 at 1:33 pm
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April 10th, 2008 at 3:00 pm
As so many others have said, these numbers are an inspiration for us PF bloggers. My short-term goal is $500/month by the end of this year. Congrats!
April 10th, 2008 at 4:52 pm
Wow that is some pretty good money you made there for the month. I think some people are confusing the passive part with you never having to anything at all.
Of course there is the initial investment that you have to make. You have to write posts to get traffic and get good ads…but it is not something you have to constantly tweak and if a post you wrote last week gets you money this week then it is passive income for this week.
April 11th, 2008 at 6:01 am
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April 13th, 2008 at 8:55 am
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April 28th, 2008 at 6:14 am
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April 29th, 2008 at 8:00 am
Carnival of Everything Finance: # 17…
Welcome to the April 22, 2008 edition of Carnival of Everything Finance.
We had over 110 really good articles submitted for this edition. Unfortunately I could not include all of them.
I hope you enjoy reading these articles….
May 1st, 2008 at 4:11 am
[…] in. The results are sometimes dramatic. ND at Living Off Dividends, for example, brought in $2,667 in passive income in March, 2008. While admittedly not all of that income is completely passive (I hesitate to call […]
May 8th, 2008 at 4:31 am
This is awesome; I’m a freshman in college, and I’m working developing passive income sources that will allow to pursue whatever I want to in life without so much worry about how much it does or doesn’t pay. You gotta love that passive income coming in steadily month after month! Incredible job, hopefully I can get to that point one day.
Would one of your oil companies that you mention be Frontline (FRO) by any chance? I’ve had them for a while now, and along with steady growth I get plenty of cash thrown my way with their 13%+ dividend.
June 11th, 2008 at 8:10 pm
Be careful to set aside a percent of cash for taxes and remember to report ALL sources of income, I just got a bill from the IRS for $9K because I didn’t send in my packet from my broker. Long story.
June 17th, 2008 at 9:44 am
This is very inspiring to newbies like me. I have just over $500 in passive income each month but it’s all from web-based content (not blogs, just published content, eBook and affiliate links) as I don’t have much money invested at all. However, doing the calculations, I’d need about $120,000 in the bank at 5% interest to get the returns I have just form my online content. I’ve been at it for less than a year and my goal is $1,000/ month passive income by January 2009.