Passive Income

All posts tagged Passive Income

Welcome to the June 18, 2008 edition of Carnival of Dividends and Passive Income. Given the large number of submissions but lack of quality or relevance to the carnival topic, the theme
for this week is “Many came, but few chosen“!

Income

Living Off Dividends & Passive Income presents $2811 In Passive Income Last Month. Yup, it was my best month ever.

The Dividend Guy presents A Review of My Yearly Dividend Income posted at The Dividend Guy Blog, saying, “I recently did a review of my yearly dividend income. This post is the result of that.”

Investing

Living of Dividends & Passive Income presents How To Invest In Foreign Currencies.

MoneyNing presents How I Started Buying My First Stock posted at Money Ning, saying, “How I started investing!”

Larry Russell presents The Top 25 Low Cost Best US Money Market Funds posted at THE SKILLED INVESTOR Blog.

Walter W. Fouse presents Vanguard Index Mutual Funds Versus Vanguard Managed Funds posted at Best No Load Funds.

Online income

Living Off Dividends & Passive Income presents $1655.32 In Online Income Last Month.

Passive Income

Jim presents 5 Reasons Why You Should be Creating a Passive Income posted at Cash Back Ideas, saying, “Post about why it’s important to have multiple streams of income to support you.”

Living Off Dividends & Passive Income presents How Passive Is Your Passive Income?.

Everything Else

Wenchypoo presents Taxing the Rich? Hell, You Can’t Even SOAK ‘Em! posted at Wisdom From Wenchypoo’s Mental Wastebasket.

That concludes this edition. Submit your blog article to the next edition of carnival of dividends and passive income using our carnival submission form. Past posts and future hosts can be found on our blog carnival index page.

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I was so busy in May that I completely forgot to post April’s passive income summary. On the bright side, April was a been a record breaking month for me with total “passive” income amounting to $2,811.42. On the flip side, I’ve been so busy, I haven’t been paying attention to my sites and May’s income will probably be lower.

If you recall, the income for March 2008 was $2, 667.18, so this is $144 jump is a 5.4% increase. However, one of my stocks is a Japanese REIT, and it paid out a quarterly dividend amounting to about $230, so the $140 increase isn’t a real increase – it’s going to disappear for May. Besides, the jump from February to March’s passive income was 11.9%, so this isn’t as good. (In case your wondering why I’ve invested in a Japanese REIT, here’s a good posts on why Japan’s real estate is a good investment.)

But so long as I can sustain it over $2,500 per month, I’ll be happy. Especially since I’m going to pursue my MBA full-time and I won’t be able to work.

Here’s the breakdown:

A new addition this month is the affiliate income I made from Ebay. In the past I’ve bought A LOT of gold coins on ebay. Since most of the gold coins are of a specific type, and I like to automate repetitive tasks, I used to have searches emailed to me on a regular basis. However, since I also like to try and monetize everything, I decided to set up a store to serve as both a place to aggregate my favorite searches and generate some affiliate income. Here’s my gold coin site, aptly called French Gold Coins. Check out the coins under the Recommended list – these are my favorite coins. The site is a .info site that I bought for $0.99 from GoDaddy and it was created using BANS. For a little more info, look at the 2nd half of this post. I also set up a site to aggregate news pertinent to Gold and Gold Coins, as another example of how to automate repetitive tasks.

Last month I mentioned that my Adsense revenue was dropping since I was being smart-priced. In an attempt to prevent that I modified the way Adsense shows up on the site – only search engine traffic sees Adsense now. Other traffic gets shown ADSAQ ads, which is helping compensate for Adsense’s lost revenue. February’s Adsense income was over $400 and has been dropping ever since. But I think I’ve figured out the issues and expect it to be pretty much constant at this level, or maybe slightly higher.

On the other hand, Linkworth has done really well on my sites. March’s income was almost double of February’s and as expected, April’s income was even higher. I’m very happy with their service and I strongly endorse it. It’s a good addition to Adsense, since it doesn’t conflict with their TOS (terms of service) and its always a good idea to have multiple streams of income. Incidentally, the only decent book EVER written by Robert G. Allen is Multiple Streams of Income: How to Generate a Lifetime of Unlimited Wealth!. All of his other books are crap, but surprisingly, this is one of my favorites!

Text-Link-Ads is also doing moderately okay although its taking more time than Linkworth. I think you may 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, for the obvious reason that it’s generating more revenue for me. 😀

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.

In March, I made $60 from Domain Embarking, a site that helps you earn money from parked domains. Since they only pay out quarterly, I didn’t make squat from them, but I’ve added a couple more sites and have had a couple of people sign up using the affiliate link so I expect to make a little bit more in the next cycle. I expect to make more than enough money to pay for the registration fees and my hosting for all my sites through the income generated through Domain Embarking.

Prosper is still handing out $25 signup bonuses to new lenders and that program generated $175 in April. My total proper account value is now $2995 of which $800 is cash. I’ve been so busy I haven’t had time to invest that amount. I have my own criteria for investing in loans and it usually narrows my universe of investment-grade loans to under 20 at any given time. Of that half will ask loans for real estate projects which I don’t do and eventually they’re only 3 borrowers who I’ll think are worthy of lending money to. Here’s a good post on How Not To Bid On Prosper.

I also made around $1,151 from some oil investments and other 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.

I also made about $128 in interest from savings and CDs. My gut feeling is that the Federal Reserve will probably keep the interest rates steady for the rest of the summer. However, even if they do drop the rates (I don’t think we’re going to see a rate hike for a year or two) it won’t make a very significant difference in my income. And I’ll probably be spending that money while I’m in college so I don’t have any expectations from it anyway.

I have some minimal expenses for domains and hosting. I pay about $119.40 for annual hosting on Dream Host. I had several periods of downtime last month and they did credit my account with an extra month. I like that they have one click installation 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, although I have heard it has improved. 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 $60 for domain registrations which I usually register with 1 and 1. At $6.99, they’re pretty cheap. However I did go and register a bunch of domains for 99 cents so next year I’ll probably be paying close to $175. On a monthly basis, these costs will work out to roughly $25 (or they will once the domains go full price). GoDaddy currently has a promotion – .com domain transfers for only $6.99 and .info domains for only 99 cents.

As you can see, I have multiple streams of both online & offline income. My online income is generated from 10 different companies. The other income is produced from the dividends of about 10 different stocks and 3 oil investments. Having diversity is very important. Periodically, one of them will taper off (like adsense did), and not being too concentrated in it prevents your passive income totally disappearing.

Having any sort side income that sufficiently large to allow you to pay the rent and put food on the top is a great stress reliever. It also provides you F*** YOU money, in case you don’t see eye-to-eye with your boss or you feel that your job is sucking the life out of you! For stubborn and opinionated people, having F-U money is awesome!

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.

Please let me know how you’re all doing.

I’ve been lumping in my online income with my passive income, but it isn’t really passive. It may not be very strenuous and it gives me geographic flexibility and I don’t have to show up for work every day, but there is some effort involved. Unfortunately I’m not as clever as Courtney Tuttle, who says he has a site that makes $3,500/month with no ongoing maintance. (If you’d like to buy an existing site that generates income, check out the online businesses for sale on my business & investment store). I’ve just had some limited success with Domain Parking, buts that the extent of my truly passive online income.

Simply put, my online income isn’t really passive. It’s a lot more passive than the website and seo consulting work I do by a huge margin, but its not as passive as dividneds or royalty checks.

So what are the best ways to earn really Passive Income?

1. High Dividend Stocks
There are a lot of stocks that paying quarterly or yearly dividends. Over time, the power of compounding (with a little help from inflation) can substantially increase the value of your dividends. My mother bought the Indian subsidiary of Unilever (Ticker: UL) called Hindustan Lever about 20 years ago. She’s being reinvesting most of her dividends and today her annual dividends are larger than the value of the original stock purchase. American Capital Strategies (ticker: ACAS) has been growing its dividends approximately 10% every year. According to The Dividend Investor,

If we invested $100,000 in ACAS on December 31, 1997 we would have bought 6906 shares. Your first quarterly check would have been $1,726.50 in March 1998. If you kept reinvesting the dividends though instead of spending them, your quarterly dividend payment would have risen to $17,095 by December 2007. For a period of 10 years, the quarterly dividend has increased by 300 %. If you reinvested it though, your quarterly dividend income would have increased by 890%.

Yes, reinvesting the dividends in companies that have historically kept increasing their dividends is key. Even though you might get only 2.5% return today, eventually with the increase in stock price and rise in dividends, your annual return should be greater than 12%. This concept is very well explained in Prof. Jeremy Siegel’s excellent book, The Future for Investors, which I highly recommend.

2. Oil & Gas Royalties

While there is a lot of fraud and speculation in direct oil drilling programs, they can be very, very lucrative for investors. Charlie Munger invested about a $1,000 in such an oil drilling program in the 60s and he’s estimated that its paid out over $500,000 in royalty payments since then. Apparently it still pays out $2,000 a month. Of course, most people NEVER see these sort of returns, but for the average person, investing in Canadian Oil & Gas Royalty Funds (or Income Trusts) is the next best thing. I’ve invested quite a bit of money into both the direct oil wells and the Canadian Income Trusts (or Canroys) and the overall result has been pretty positive in both (which is in excess of 12%).

3. Royalties on Books and Patents

Royalties on Books and Intellectual Property Rights can be even more lucrative. However writing a best-selling book or creating a something thats worth patenting can extremely time consuming and expensive. For most authors and inventors, its a labor of love – something that they would pursue even if there was no monetary reward to it. But many ebook writers who sell get-rich-quick books about “making money online” are getting very wealthy. Most of these books are garbage and the only people getting rich are their authors and resellers. Not a very ethical way to make money.

4. Rental Income on Properties Bought at the Bottom of a Real Estate Cycle.

If you bought rental buy and hold property in California, Nevada, Arizona or Florida during 2005 and 2007, my heart goes out to you. A lot of smart people got suckered into buying at the top of the market and are paying for it. However, if you buy correctly, preferably at the bottom of a real estate cycle, real estate can provide excellent passive income and fantastic tax advantages as well. According to Charlie Munger at the 2008 Wesco Financial Annual Shareholder meeting, “most real estate investors don’t pay any income tax, except once every 20 years or so“. Bought correctly (that is based on value, not speculation), rental properties can provide a steady stream of cashflow that is somewhat inflation-indexed. I say somewhat, because in the short-term anything can happen, but over a long period of time, real estate is going to match the rate of inflation.

5. Investing In Timber

Similar to Canroys, there are companies that grow trees specifically for timber and pay pretty decent dividends. There are also direct tree-planting programs where you can invest a minimum of $5,000 and own a portion of a timber operation. The company does all the work for you and supposedly cuts you a check once a year after a specific time interval. The endowment funds of Harvard and Yale have apparently been investing in timber for several years now with great returns.

6. Domain Parking (or Embarking)

There are many people who buy and hold hundreds of domains (I know a guy who owns 750). They either park them with Sedo or another domain-parking service. These services stick relevant (and sometimes not-so-relevant) ads on your site. The idea is that if someone comes to the site through browser type-in traffic and clicks on an ad, you get paid a portion of this ad revenue. I had hosted several sites with Sedo and made a whopping 2 cents per month. I’ve recently been trying out a new service called Domain Embarking that is working pretty well for me.

Welcome to the 2nd edition of the Carnival of Dividends and Passive Income. This time I’ve marked my favorite entries with little gold stars.

Passive Income

As usual, there are hardly any topics on Passive income, so here’s one of my own on using Domain Names To Create Passive Income.

Dividends 4 Life presents 7 Important Reasons for Dividend Investing.

Income

Eric presents Growing Money posted at Make Money Blog, saying, “Tips on making money, avoiding scams, growing money, and overcoming poverty.”

Trevor McKay presents Does Anniuty Fraud Exist? posted at The Annuity Professor.

Investing

Here’s my submission discussing whether you should Invest In Green Energy.

The Dividend Guy presents Considering REITs In a Dividend Portfolio posted at The Dividend Guy Blog, saying, “I have recently added US REITs to my dividend portfolio. I think it is crucial to have this as part of a well-rounded diversified portfolio.”

Investing Angel presents Studying The Stock Market Trends During Recession » Free Stock Market Investing Tips posted at Stock Tips.

Taylor Darden presents The New Realestate posted at TaylorDarden.com, saying, “Daily Investing idea”

Investing Angel presents Some Thoughts On Google (GOOG) » Free Stock Market Investing Tips posted at Stock Tips, saying, “A few thoughts about the google stock”

Investing Angel presents Why Most Investors Buy High And Sell Low » Free Stock Market Investing Tips posted at Stock Tips, saying, “Most investors buy stocks when they are overvalued since they give into herd mentality.”

Online Income

James DeLelys presents WORDSBlog » MONEY ONLINE posted at Author James DeLelys, saying, “How to become an Affiliate”.

Random

Terry Dean presents 5 Keys to Successful Internet Business posted at Integrity Business Blog by Terry Dean.

Mandy Trapper presents Low Cost Options Are Available For The Forex Beginner posted at Forex Trading System Secrets.


That concludes this edition. Submit your blog article to the next edition of carnival of dividends and passive income using our carnival submission form. Past posts and future hosts can be found on our blog carnival index page.

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Welcome to the very first edition of carnival of dividends and passive income.

I’m going to kick it it off with my own submission on How I Made $2,667 in Passive Income In March. Of course, if you’ve already read it, you can read about the Tax Benefits of Passive Income or about Earning Passive Income from Domains.

Dobromir presents Emerson Electric (EMR) Dividend Analysis posted at Create Rising Passive Income From Dividend Paying Stocks.

Geoff presents How did I make 5-figure Passive Income in 2007? posted at Wealth Monkeys.

Writers Coin presents Why I Quit One Source of Passive Income posted at The Writer’s Coin, saying, “Moral issues far outweighed the desire to make money by deleting emails”

Will presents Why I Still Love Real Estate Investing: Being A Landlord posted at Your Finish Rich Plan, saying, “I’m a sucker for passive income. My idea of financial freedom is that of rental and dividend income totaling roughly twice my expenses, leaving me free to pursue other interests (which may very well be other money-making ventures). That’s why despite everything that happened in the real estate market the past couple of years (or maybe because of it), I want to be a real estate investor, and more specifically, a landlord.”

The Dividend Guy presents Considering REITs In a Dividend Portfolio posted at The Dividend Guy Blog.

Tyler McKinna presents Dividend Growth Fund Stratgies Revealed posted at Dividend Money, saying, “An article outlining dividend growth investing strategies and how major mutual fund managers approach stock selection.”

KCLau presents How to Identify and Invest in the Hot Stocks of Tomorrow posted at KCLau’s Money Tips, saying, “A review of the book “Finding the Next Starbucks by Michael Moe””

Mark @ TheLocoMono presents Tracking Your Prosper Portfolio with Money Plus posted at Just Personal Finance, saying, “Using Money Plus to track your Prosper income can help you simplify your knowledge of how much money you are making and project your cash flow/growth.”

FIRE Getters presents Etrade’s Quickplan – Personalized & Easy Retirement Planning! posted at FIRE Finance.

Lulu presents Got My Repayments from Lending Club posted at How I Save Money.net.

We end with an article about music and money, which not quite relevant, is still pretty good nonetheless. Jeremy Zongker presents All I Really Needed to Know About Managing Money I Learned From Music posted at Destroy Debt.

That concludes this edition. Submit your blog article to the next edition of Carnival of Dividends and Passive Income using the carnival submission form. The next edition of this carnival will be on the 7th of May, 2008.

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Is it possible to earn passive income for domains? Absolutely!  It isn’t rocket science but it does involve a little bit of work. Here are the simple steps:

1. Buy a cheap domain name.

2. Decide how you’re going to monetize it. Either through ads on a niche site, affiliate sales, or domain parking.

3. Get up and actually do the work.

Buying Cheap Domains

GoDaddy currently has a great promotion on .info domains. They’re currently selling for only $0.99 instead of the usual $9 dollars. That’s about 90% off the regular price, and I spent the past several days getting about 15 domains that I think I might be able to monetize in some form or the other.

People might feel more comfortable or might more easily remember .com domains, but if you’re targeting search engine traffic it probably shouldn’t matter very much. A lot of the domains have dashes in them (example Sterling-Silver-Rings.info, but again, for visitors coming from a search engine it shouldn’t matter too much.

I also got a few domains that I think are pretty cool like Discount Ipod.info, Discount Seiko Watches.info and Cheap iPod Batteries.info.A good domain name has highly relevant keywords in it. How do you find these relevant keywords? Try using a search tool like Keyword Elite. It’ll save you a ton of time in research.


Niche Sites

The most common way of profiting from a niche site, is creating a lot of content around a keyword or an idea and putting ads around it.  If you can create a lot of unique content around a topic and attract a lot of visitors, you should be able to easily monetize it through Google Adsense or Text-Link-Ads or LinkWorth.

One way I’m thinking of profiting from them is through building a niche store (BANS). I already have an account with Dreamhost and I can host unlimited domains with them without any extra cost. You either set up an Amazon store or an Ebay store and make referral income off the sales. That’s a great way to produce residual income if you can make it work.

If you’re facing problems installing the BANS software on Dreamhost, check out this guide: How To install BANS on Dreamhost.

These are both great ways to produce residual passive income from a few hours of work. It might take a few months ramp up, but they should both add to my passive income.

If you’d like to buy a revenue generating website check out my business and investment store.

Update: September 18th 2008

Looks like my ebay-affiliate stores should pull in over $500 this month! The income has been going up every single month, while the effort has almost dropped off! That’s a pretty nice residual income stream.

However, if you’re too lazy to create content, then you might want to consider domain parking.

Affiliate Sales

This is by far the most profitable strategy and also the most work! You figure out how to drive traffic to  a site and how to get people to part with their money either by buying a 3rd-party product or something you’ve developed yourself.  I know guys who make over $100,000 a year doing this. It isn’t exactly passive but the hourly rate is insanely high if you know what you’re doing. I know of one guy who makes the equivalent ofi $5,000 an hour from his affiliate sites.

Here’s an example of an affiliate site that sells a very interesting product. Its a system that teaches to make money selling stuff! Here’s an example of a site that sells a product they developed themsleves.

Domain Parking

Another way I’m thinking of monetizing them is through Domain Parking. Many companies offer domain parking, including Sedo, GoDaddy and even Google. However, what they usually do is just put up ad links on your site. Unless people are directly typing in the address of your site into the browser you are unlikely to see any traffic or revenue.

A better way is to use a company like Why Park? They will automatically generate content for your sites and update it on a regular basis. The resulting site with fresh content is much more likely to get indexed in the search engines and get organic traffic (that’s traffic from search engines) and thus you are more likely to actually see some revenue.

Since this is tax season and this site is dedicated to earning passive income, I thought I should post something about the taxation of passive income. From the IRS’s point of view passive income is any income that you get without having to to materially participate in. Examples of passive income include rental properties and partnership returns.

Unlike earned income, passive income has great tax benefits. Earned income is subject to self-employment tax which is just over 15.5% (if you’re W2 employee, your employer pays half of this). Your passive income isn’t subject to this tax. If you own rental property, you also claim depreciation. Depreciation is the replacement cost of equipment used in a business and is spread out over its useful life. For residential real estate, the IRS deems the useful life to be 27.5 years. However, the useful life of a house could well exceed 60 years. This results in you being able to claim a tax loss which doesn’t really result in any loss to you. Because of this, depreciation losses are sometimes termed as phantom losses.

Let me give an example. Suppose you buy a rental property for $325,000. The tax bill says the land is worth $50,000 and the improvements (everything else thats built on the land) are worth the remaining $275,000. Based on the IRS’s straight-line depreciation method of deducting the cost of the improvements over 27.5 years, you get to claim $10,000 a year in depreciation. Assuming you have a mortgage of $275,000 at 5%, you’ll pay about $13,750 in mortgage interest payments. Assuming the property tax rate is 1.5% (its about 1.25% in California, 0.07% in Utah, 3% in Texas and a whopping 6% in New York) and the insurance and miscellaneous expenses are another 0.5%, you’ll be paying another $6000/year. In all you have actual expenses worth 19,750 per year plus depreciation loss of $10,000 bringing your grand total to $29,750. If you’re getting $1750 per month in rent, that works out to $21,000 worth of rental income. Since your actual costs are $19,750, you’re making a profit of $1,250. However, according to IRS passive income rules, you’re technically making a $8,750 loss!

Not only do you not pay taxes on your $1,250 worth of rental income, but you also get to deduct the $8,750 phantom loss from your regular earned income! In a 30% tax bracket, thats a $3,000 tax saving! You can deduct upto $25,000 worth of passive income losses on your taxes every year! If you have more losses, you can carry these forward until you can offset them against passive gains (like the sale of the property).

The flip side to this rule is the depreciation recapture rule which means you need to add back in the depreciation losses when you sell the property. However, this can be somewhat avoided by the use of a 1031 exchange (also called a Starker exchange).

Note that there are many nuances to this grossly simplified example so please don’t flame me, especially if you’re a qualified tax professional.

Qualified stock dividends are also another form of passive income that attract favorable tax rates. Instead of being taxed as ordinary income, the maximum tax rate is now 15% for most people. In fact, if your tax rate is 10% or less, you’ll pay only 5% income tax on your qualified dividends! There are certain restrictions that come with these lower taxations. The corporation issuing the dividends must be a domestic US corporation or a qualified foreign company. There is also a holding period of 60 day before the ex-dividend date and 59 days after the ex-dividend date.

What I term as passive income from my websites does not necessarily match the IRS’s definition of passive income. It is ordinary income and is thus subject to ordinary income tax. So I channel that income through a corporation. This is a form of income splitting. By creating a separate tax entity, I reduce the effective tax burden. I use that corporation to pay necessary and customary expenses required for the generation of this income, like my internet & phone service, computer equipment, investment newsletters, etc. Whatever is left after expenses, is taxable income. For US corporations that make $50,000 or less in profit, the tax rate is 15%. There is also question of double taxation for corporations (both the corporation and the shareholders have to pay taxes on the income that is distributed), but for now that doesn’t affect me. I’ll worry about it when it becomes an issue.

The income I get from direct oil well drilling programs is also taxable but it comes with depletion credits. As a result, 15% of the income is tax-free.

The IRS definitely gives a lot of tax benefits to passively earned income. If you have to work for your income and get paid as a W2 employee, you have the least number of tax breaks and will usually pay the highest taxes. Creating passive income streams is not only a better alternative to working, but you even get favorable tax treatment. If you’re looking for ways to generate passive income, make sure you read all the passive income posts. and check out my investment store.

Note: I am not a tax professional, nor do I play on on TV! Please consult your tax adviser before you make any financial decisions. If you’re subject to exemption phase-outs or AMT this advice may not apply to you.

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 finally broken the $2,000/month in passive income! Passive income for February 2008 was $2,383.55. Not bad considering I wasn’t even in the country!

Here’s the breakdown:

  • Online Income: $$1399.29
  • Savings Accounts: $138.43
  • Real Estate Trust Deed: $0
  • Direct Oil Drilling Investment: $277
  • Dividends from Canroys: $509.11
  • Other Dividends: $59.72

As usual, I ignored any income from Prosper loans. I did however include the $100 in referrals fees. If you’ve been thinking of lending or borrowing money on Prosper, now is a good time to do it. They’re still offering a $25 incentive to new members.

Canadian government takes its 15% tax on the dividends from Canroys, so the income is after-tax. You get a tax credit for this amount in the US so there’s no double taxation.

I’m also getting affiliate referral income from Linkworth.com. For every person that signs up, they give 5% of the income they earn for life! The $200 that I got in February was actually the income I earned in January. For February, I’ve actually earned $410.98, of which most of it is referrral income. But since I won’t get paid until March, I’m going to count that next month. Linkworth will probably be the largest income stream next month. Its a great way to boost your site’s revenue.

The Kontera income dropped 44% from last month. I haven’t spent much time analyzing that so I’m not sure what happend. Overall traffic is up so I’d expect the kontera revenue to also increase, but the opposite occurred. I guess it is correlated with the type of posts. I’ve seen that posts related to gold do very well for PayPerClick advertising.

As I mentioned last month, my real estate trust deed has defaulted. Luckily, the oil drilling programs have started to kick-in and have almost replaced that income.

Overall, I’m quite pleased with the results. Hopefully, I’ll be able to break the $3,000/month barrier pretty soon.

I started using Kontera‘s pay-per-click (PPC) contextual advertising program in December. Last month I made $92.11 from it. The revenue is directly proportional to the traffic and also is also somewhat correlated to the type of content.

Finance-related content usually results in above average per-click amounts. However, content about Paris Hilton might pay 1/10th of the amount, but you typically get 10 times more traffic, so don’t fret if you niche is low paying. Just focus on creating good content. My experience has been that the per-click amount is lower than Adsense but its a good complimentary service that runs along-side Adsense, and it doesn’t violate Google’s TOS (terms of service).

Google used to prohibit publishers from using other contextual advertising programs in conjunction with Adsense, but they’ve recently eased this to allow programs that do not have the same look and feel.

My Kontera revenue is currently only 1/4th that of the Adsense revenue. However, since my Adsense revenues have been growing, Kontera doesn’t seem to be cannibalizing its revenue, so its all gravy!

Its very easy to implement and I’ve received excellent customer as well as technical support from them.

Even if you’ve never you considered monetizing your site, you should definitely try it out. For less than an hour’s work, an extra $1000 a year is definitely worth it!