Revenue Streams

hp-DV6series-16-inch-intel-core-2-duo-laptop

Check out the new laptop I got courtesy of Ebay.com! No, I didn’t buy a laptop on ebay, but I did use the money ebay sent me to buy a really nice notebook. You can learn more about the configuration of the 16 inch intel core 2 duo HP laptop here. With the recession going on and unemployment soaring, its nice have someone sending me a few dollars now and then for my discrentionary purchases.

As I reported previously, I’ve made around $15,000 in the first 6 months of the year through various online income streams. Last month was no exception. I’ll report the exact amount later, but again ebay was a major portion of this number. I won’t know the exact amount until Saturday but so far it’s just over $1,000. I’ve outlined the steps to create ebay income, but if that’s too technical for you, you might want to check out this new program called NicheDevil that looks very promising. It comes with a 60 day refund policy so there’s no downside. If you are unable to make any money online with it, just get your money back. The creator is the same guy who turned me on to BANS which has made me $10,000 so far so I’m more than happy to throw a few dollars his way to check out the product.

Is anyone else making money selling real estate, sports cars or gold coins on ebay or through BANS? If so let me know your success stories!

Update: I bought NicheDevil and I set up a few sites with NicheDevil. While it took me considerably longer than the 36 seconds advertised it was a considerably easier than setting up a comparable BANS site. I also liked the automatic pulling of tweets, youtube  videos and images based on your target keywords. The only drawback was I had to get HostGator hosting. I used the online chat help and asked if they had any current promotions – they said they had a 20% discount with the code “Beach” so I used that to get Baby hosting which cost $95/year for unlimited domains. I still actually prefer Dreamhost but they didn’t support the installation of IonCube loader so I had to use HostGator instead (well, I didn’t have to but I’m too busy to figure out how to install it myself). I also bought a few domains from 1and1.com since they offer free private registration and currently have .com domains for $6.99!

Overall, it was a quick and easy setup. The sites look pretty good. I downloaded GIMP and made some minor modifications to the layout of the site (just background color and header image which I borrowed from someone else!). I’ll let everyone know how they work out.

Every month there are 673,000 searches for the term ‘make money online‘ and over a million for various combinations such as ‘earn money online‘ and ‘how to make money online‘.  Apparently there’s a lot of money to be made in this niche and there are tons of people who will sell you ebooks, CDs, DVDs and monthly subscriptions on how to make hundreds of thousands of dollars by pimping stuff online or through secret google-checks. The sad truth is that is difficult to make $100,000 a year but it is not impossible. With a little bit of effort I’ve been pulling in a little over $2,000 a month for almost a year. I wish I could devote more time to it, but with my MBA, job search and some part-time consulting (and now summer internship) I barely get any time to try new things. In fact, I barely get time to post on this blog either.

Here’s my breakdown for the 2nd quarter. I made $7,353.84 in online income I made between April 2009 through June 2009. For comparison, I made $6,760.85 in online income during the 1st quarter.

On average, I made just over $2,250 a month.  As usual, Ebay was the largest income producer.  Till date this year, I’ve made just over $5,000 from Ebay affiliate commissions and over $8,000 since I started last year. (click on the graph twice to see a larger image).

Ebay-build-a-niche-store-earnings

As you can see from the graph, the earnings (in yellow) have steadily increased each month (with a big surge before Christmas followed by a huge drop right after!). Read this post on How to make money from Ebay without selling anything if you want more information about starting your own niche sites.

One of my fellow blogtrepreneurs makes over $3,000 from his BANS sites so there is decent money to be made.  However, the few $100k/year guys I know make it from selling ebooks and other online products. From what I gather, that is the most likely way to make a real living from online marketing and sales. Towards that end, I’ve been working on a project to create and sell some online ebooks. Within the next several weeks, I divulge more information about it. Until then, all I can say is that the idea was motivated by this $7 ebook!

As of July 20th 2009, I’ve received over $8,500 so far from Ebay. But the beauty is I didn’t actually sell anything. That’s right, Ebay sent me the money for referring buyers to their site. Since several of my fellow bloggers have asked me how to go about making money from ebay, I’ve put together this short how-to article that I hope will help you.

How Does the Ebay Affiliate Program (EPN) Work?

Back in April I built several niche sites to that specifically targeted to specific niches like gold coins, iphones and ipod batteries. Several weeks ago, I also added an “investment store” on this site that sells cheap timeshares, real estate and income-producing websites.

Ebay pays a commission based on the final sales price of the item. It usually varies between 5-10%. For items like cars and real estate, there is a flat fee which is over $100! I just received $175 from the sale of a $4,000 rental property in Ohio and another $135 from the sale of a used car. And it wasn’t any old used car, someone sold a rolls royce on ebay!

Additionally, if someone signs up as a new user, Ebay pays up to $35 (although its typically only $25). It also gives up to 75% (although 50% is more usual) of it commissions to affiliates who refer buyers. You can get more affiliate information here.

How Do You Create A Niche Site?

The toughest part of creating a niche site is identifying the niche. Ideally, you want a well-searched for niche that doesn’t have a lot of competition. For example, “discount designer doo-dahs” is a niche. But is it a good one? Good luck figuring that out on your own. However, there are a lot of tools to help you do this. Some people recommend Keyword Elite and I have it and use it. But there are several other tools, some of which require a one-time fee and others that charge a monthly subscription to use. If you already have one and are seeing good results with it, then it should be sufficient.

The niche sites aggregate the RSS feeds from Ebay for related products and display them. Luckily, I didn’t have to do the programming. In fact, creating the site is the easiest part of the whole process. I just bought the BANS (Build-A-Niche-Site) software that does everything for me. It did cost $97 but considering that I’ve made over $8,000 from ebay so far (as of July 2009), I’d say it was a pretty good investment.

Several people have told me that they were rejected or they had accounts and got banned. While its not widely understood why a lot of people have been rejected, its not too difficult to understand. If you submit thin-sites to the EPN there is a higher likelyhood of getting rejected. (A thin site is a site with no content, just affiliate links).  Always submit your flagship blog to EPN. If you’re using BANS on another store (as this blog does) make sure you’re selling related products. Note that this blogs’ store doesn’t anything that I don’t have at least 10 posts on. (Of course, I have 800 posts so finding a related product is pretty easy!). But if you’re blogging about cooking and trying to sell bicycle parts, it just doesn’t make sense. Effectively, you’ve conveyed to the EPN team your complete lack of experience in online marketing and understanding of how online traffic conversion works. Once you’ve been approved, then you can start multiple sites on different products. But make sure each site is targeted towards a specific product and make sure you understand the marketing part (which I’ve discussed below).

So make sure you have relevant content. How do you create relevant content? Either you write it, you pay someone to write it, or you use a tool to aggregate other people’s tweets or posts. Make sure you don’t just outright steal content – that will not only result in bad karma, you will also get flagged by the search engines for duplicate content!  One tool I’ve seen been used on sites that Google has not banned (de-indexed) is WPanswers.  It’s only $29.99 and comes with a 30 day no questions asked money back guarantee. I just bought it and I’ll let you know if I see any adverse effects from it.

Buying A Cheap Domain With Cheap Hosting

I also had to pay for domain names, but Godaddy had a 99 cent sale on domains so that wasn’t much of a cost. I also use 1 & 1 for domain name registration because they sometimes have specials. I usually go with whichever is cheaper, although 1&1 does offer free domain privacy for which Godaddy charges an extra $9.99 a year. However, Godaddy’s interface is significantly easier to use and their customer service is pretty stellar, so there’s some definite value in that, especially if you’re new to the online world. ( Also,  .org sites are usually much cheaper at 1&1 than Godaddy and may have better street cred than .info sites. )

I also use my own hosting. I like Dreamhost a lot and highly recommend it. It’s incredibly easy to install and update the sites. I’ve been using them for 4 years and they also have an affiliate program which pays out 100% of the first years hosting (sometimes 175%!) for new referrals. (Use code “PassiveIncome” for a decent discount). For $120/year you get 1 free domain registration and unlimited hosting. HostGator is another well-respected hosting company and many people with BANS sites use them too. Their affiliate program is also supposed to be excellent, but I wouldn’t know!

Marketing Your Niche Site

The most important part about making money online is the online marketing of your newly created sites. If you’re like most newbies and you build several sites thinking that you’ll automatically get traffic, you’ll be very disappointed. You need to understand how to create content that attracts search engine traffic (also called organic traffic). Again, Keyword Elite will help you with this. Its a pretty good tool and the videos on the landing page are worth a watch if you don’t know anything about harnessing the power of internet traffic. Another key factor that is often overlooked is building back-links to your site. I have personally gone to hundreds of blogs and left real, relevant comments on them with links back to my site. Some of them are nofollow links, but I don’t think it really matters. I believe all links matter, its just that nofollow and links from low-quality sites matter less than than links from a top quality site.  However, a cool way to get a lot of social media love is through a Social Bookmarking Automation Tool.  I highly, highly recommend this tool and it is in fact the one I use the most often. Most of my sites rank very well on various search engines for certain keywords and I get excellent organic traffic. As you can see from the Ebay affiliate sales figures, the conversion rates are pretty high.

Here’s another tool I highly recommend. I tells you what keywords you rank for and what your position is in the search engines. Its incredibly useful, especially when you see someone new bump you from your spot on Google. You can use this (along with some other tools) to see if its a fluke or they’re actually planning to take over your position!

If you’re still floundering, you need a guide with step by step instructions. The 9 Step Make Money Online Guide is an excellent resource written by the creators of BANS software. You should definitely read it if you’re new or if you have sites that aren’t generating much income.

Here are my earnings below:

Ebay-build-a-niche-store-earnings

As you can see from the image, the traffic (in blue) and the earnings (in yellow) have been increasing over the past year. As I’ve becoming more focused in my selection of keywords and as my search engine rankings have improved, the conversion of the traffic has gotten a lot better too.

While it took some initial effort to set up the stores and market them online, I haven’t done anything for at over 6 weeks. Making nearly $1,000/month from several sites that don’t require much effort is really cool. Finally some residual income that’s really passive! So don’t give up! It might take a few months to see any fruits of your labor but it will be well worth it!

I’ll post my monthly passive income update sometime this week.

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
  • 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.

I’ve been lending money on Prosper.com for nearly a year now. I’ve been getting a pretty decent rate of return, despite having had a couple of borrowers default.

I’ve also made over $200 from referrals fees! Whenever anyone signs up using the referral link and funds atleast $50, we both get $25. If a borrower signs up, I get $125.

And to add to that, Prosper is now a paid advertiser on my blog. Not only are they offering referrals rewards, but they’re also paying me to put their link up!

I guess they’ve had such success with the program that they can afford to be extremely generous. If you have a blog you can start making extra money by doing just 3 very simple things:

  1. Sign up using this referral link.
  2. Fund your account with $50 and lend it out. (ok, you don’t need to do this, but considering you get $25 almost immediately, where else are you going to get a 50% return on your money?)
  3. Email me at livingoffdividends$$gmail.com (replace the $$ with @) with “prosper referral advertiser” in the subject field, and I’ll put you touch with the rep at Prosper.com

Not only will you get a check from Prosper for advertising, but you’ll still get the referral rewards too!

If you don’t have a blog, you can do steps 1 and 2 and get a referral link or an image button from Prosper.com which you can put in your email signature to generate some extra money.


Earn Great Returns. $25 Sign-Up Bonus. Borrow. Lend. Prosper. Borrow up to $25K. Rates as low as 7.00%.

I started lending money on Prosper.com about 10 months ago. I started out with a total of $1900 in my account. I’ve been mainly targeting people with D and E credit who seem have steady jobs but got into the payday loan trap and can’t get out. My average interest rate is about 19.4% right now and I usually lend out the minimum $50.

I’ve been reinvesting all the interest payments I’ve received. So far I’ve made loans to 40 people and I’ve had 2 defaults and 1 currently late loan – two of which were from Prosper’s auto-pay, which I don’t really recommend using. One of the defaults had a B rating!

Currently my account is worth about $2106, which gives me an annualized return of about 13%. Not bad at all.

If I don’t have any more defaults, this might increase slightly. Even if I get 1 more default, I should still get an annualized rate of 9%, which is about twice what I get in a savings account.

Why should Visa and Mastercard make all the money!

Yesterday, I bought some more Canadian Income Funds, also called Royalty Trusts or Canroys. As I mentioned before, I recently refinanced a property and I managed to pull some money out (totally tax-free!).

Rather than spend the money on an SUV or a big-screen TV, I opted to divide the money into 3 parts. The first 1/3rd went towards replenishing my emergency fund which was drawn down by vacancies in my rental properties. The second 1/3rd went towards future investments in summer just in case there’s a pullback in the stock market and the last 1/3rd went to building up my passive cash-flow.


Long time readers will realize that I haven’t made any effort display my net worth or any goals of net worth.
That’s because I feel its a meaningless number. If I had a $1 million dollar net worth and it only generated $25,000 a year in income (like Cd’s did a few years ago) that’s pretty sad. On the other hand, if I owned a $1,000,000 car-wash that generated $125,000 that’s pretty significant.

My goal is to generate passive income. Its your passive income that provides financial independence, not your net worth. If you have $3,000/month through various passive income streams, you’ve got your basic food and shelter taken care of and you won’t starve if you lose your job. That is my short term goal. My longer term goal is generate $10,000/month in passive income so I can travel the world without worrying (or working).

I’m currently not even at 50% of my $3,000/month goal so at least 1/3rd of all future investments must take me towards that goal. That’s why I bought some Canroys yesterday. I bought Harvest Energy (HTE) and Canetic Resources(CNE). They generate revenue from oil and gas production and refining. The noteworthy part is that they payout around 12% dividend per year. Since the selling of oil and gas leads to a depletion of reserves, its important that they keep some of their revenue for future acquisition of new properties and for drilling new wells. Both of them have a payout ratio of under 80% which isn’t bad considering they have proven and probable reserve lifespans of 9.5 years.

There are Canroys with lifespans of 6-7 years and payout ratios of 95% that yield 15% but I’m suspicious of their longterm viability. These two seem like pretty safe bets. If oil prices rise there’s a chance of increased payout and also capital appreciation. If not, I’m still getting my 12% yield.

The only issue I have is that the Canadian Government takes its 15% tax straight out of my account. But even considering for that, my yield is still just over 10%. Besides, I get a US tax credit for that amount, so its not a total loss.

I also bought some units in Prism Income Fund(QSR.UN) which owns and operates nearly 500 fast-food franchises in Canada (Taco Bell, KFC, Long John Silver and Pizza Hut). Their stock has been pretty stable compared to other Canroys following the whole Taxation issue. Its also currently yielding 12% and while I don’t expect much capital appreciation, I don’t expect it to drop in value or its dividend to fluctuate with the price of oil and gas.

So now I’m one step closer to my goal of $3,000 in passive income. This brings my total passive income from Canroys to $300 per month. I’m also getting $300 from a loan to a developer at 2% per month. And I average around $300/month from my various online ventures. (Even though my online ventures aren’t passive, I enjoy pursuing them and I have geographic independence. Thats why I’m counting it).I’m also making around $150/month from my direct oil and gas drilling investments, so I’m almost 1/3rd of the way to my goal!

When I get the money back from the developer, it’ll be redeployed at a much lower rate. But I expect the cash flow from the direct oil drilling program to increase enough to cover this short-fall.

Here’s an example of a buyer using seller financing to purchase a property.

The buyer, a real estate investor, bought a cabin in a sparsely populated place. Recognizing that the seller didn’t really have many potential buyers, he negotiated a seller carry-back. Basically the seller is carrying back the mortgage. The advantage? No appraisals or closing costs, or downpayment(well ok, some downpayment). And a better rate than he could have from a bank.

The seller probably executed an All Inclusive Trust Deed (AITD) to wrap his existing loan into a new mortgage for the seller. It seems like the payments from the buyer were for the amount he owed on it.

However, in order to make some extra money, the seller could’ve charged the buyer 8% interest. For example suppose I have a 30 fixed loan at 6.25% on a $100,000 30 year loan. The interest payments are $520/month (lets ignore the principle portion in this example). Suppose I offer to finance it to a buyer at 8% with on $120,000 purchase and loan amount, the payments I get are $800/month. That leaves with me a net profit of $280/month.

Of course, if you’re offering long term fixed rate financing you should make sure that you have fixed rate financing too! If you have a 30 yr loan and you’re 15 years into it, after 15 years you don’t have a mortgage payment, so all of the payments from the buyer are yours to keep! (A great way to boost your income in your retirement years.)

Make sure you don’t have a 5 year ARM on it. If you do, put a provision in your mortgage that states there’s a balloon payment after the 4th year. This means you get cashed out at that point. Of course, you wouldn’t want to offer 100% financing in a flat or down market in a situation like this. You’d want 20% down so in case the buyer doesn’t get financing and just abandons the property (or you foreclose on him) then you’re not left upside down yourself!

Advertising a property as a seller-financed property is a good way to get more interest in a slow moving markets. As the subprime lending dries up, this may be the only recourse for many buyers with no credit.

And it might be the only way a buyer can dispose of a property in some markets like Florida!

Making Our Way has a great post on how people think they can start a personal finance blog and expect to make enough money out of it that they can quit their jobs!

Unless you getting 50,000 hits a day, thats not going to work out for you. And unless your a marketing expert, SEO guru and a great writer with interesting content, that really isn’t going to happen.

Instead you should try to make $200-$500/mo from it and consider that to be one of your multiple income streams. If you can develop a dozen income streams each paying you $500/month, you’ve set yourself up for financial freedom. It may not be enough to live luxuriously, but at least you won’t starve if you lose your job, or want to take a year off to pursue your passions.

Other examples of income streams can be paid off rental properties, stocks that pay a dividend, Canadian income funds (also oil & gas funds), actual oil & gas projects, equity stakes in a business, trust deeds backed by real estate, and micro loans(like prosper.com).

The more diversity you have, the safer your total income will be!

The Escape Artist Magazine is an online magazine devoted to people who want to move or retire abroad. Its free newsletter is full of useful tips, but of course their main aim is to get you buy their products – other newsletters, ebooks and seminars.

Apparently, their ebooks are so successful that they’re soliciting their customers to write more ebooks. They’re offering authors 40% of ongoing revenue. They can be on any topic but have to be atleast 60 pages. Your english doesn’t have to be perfect (since they’ll edit it for you) but it has to be comprehensible.

You can read about it here. Maybe, I’ll take them up on their offer. I just need to find a topic to write 60 pages on….any ideas?