Last year, I went through all kinds of questioning about my budget, future, job and online company. I really needed to put down on paper how much I needed to live and create a comprehensive budget.
Doing this exercise was great not only to focus on debts but also to realize how much I needed to live the good life in my own terms. Some people only need a couple thousand per month to live comfortably while others think they couldn’t live without spending 10K a month. It’s all about your priorities and what makes you happy…
The first question I asked myself was what the most important things were for me. I’m not talking about my family and other personal values here but what is important in terms of material things. For example, I LOVE my house. There is no way I’m giving up my house in my budget. It fulfills all our needs and then some. We are incredibly comfortable in it and even benefit from the daycare at home (we have a separate entry and a room dedicated to my wife’s business). Living in this house definitely makes me happy in my day to day.
On the other hand, my RX-8 wasn’t bringing me enough happiness compared to its costs and wasn’t kept. While the car didn’t have any loan strings attached to it, gasoline and sporadic mechanical problems were enough to make me sell it. Life is a little bit more complicated with only one car and I’m considering buying a second car eventually but this will be a small economical car this time. I’m done spending money on wheels.
Saving money for my kids’ education and retirement also makes me happy. There is no way I’ll jeopardize their education or my retirement. This is why I’m putting almost 10K per year in my investment accounts.
I also love food and wine and I’m not willing to cut out much of my food bills. I’ve made some efforts with wine and restaurants but I really enjoy a nice meal with a great bottle of wine!
When I crunched the numbers last summer, I came up with two different budgets; the first one was the one I need to live comfortably (meaning I don’t compromise on anything) and the second one was the one with strict minimum expenses.
It had helped me to realize what I can really cut out in case of bad luck and what I could already cut today without weeping on the floor. This is how I realized I need about $4,500 monthly to live comfortably. Therefore, I need to find a way to make $54,000 net of taxes each year to keep what I have in place. Where I live, this is about 100K before tax. This is not an easy task but I have managed to reach this level of income since the age of 28 (you can read about the chronology of my income here).
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Reporting your income online is always a two sided sword. This month, I have to face publicly the fact that my sites’ earnings tanked. Part of it is due to the fact that I was on vacation, but still, it shows how hectic a side-business income can be!
The main reason why I decided to post this report again is actually for my own follow-up. Since I having our third child, my online business has been harder to manage. Producing this report helps me to keep track of my main goal: making 100K online in 2014. A few weeks ago I outlined my business plan as follows:
Therefore, my revenues should be represented as seen in the following graph:
Instead, March shows the following results:
Overall, my online business has generated $3,363.48 (-58%). This is gross revenues and does not account for my expenses. My online expenses are around $3,000 per month. Therefore, this month is like working for nothing. This is quite insulting as I value my time a great deal. But everything can’t run smoothly all the time. This is why it’s so important to be able to look at yourself in the mirror and kick your butt for better results next time!
While last month our broker services peaked with several deals, the month of March was almost dead in this segment of our business. Adsense was stable but we didn’t receive any affiliate checks either. I know the advertising brokerage business is full of ups and downs, but March was particularly bad overall. I hope this is only temporary and that it will kick back into action this April. I also expect an $800 check from one of our affiliates in the upcoming weeks, let’s hope I’ll be able to deposit it in April!
Since I didn’t do any promotion with my membership website in March, I only made money with my monthly members. This is great to see that I’ve stabilized my recurring payment at $500 or so, but I will need to push further to reach my goal of making $2,500 with this site. This shows how fragile a membership is when you don’t keep advertising it.
I’m currently reviewing my marketing plan to include mentions of Dividend Stocks Rock across my network and more specifically within my mailing list. I have pretty strong email funnels generating affiliate income and generating traffic on my blogs. But I haven’t taken the time to include my membership website inside my funnel. I know how dumb that is! But time management is always an issue.
This business division also includes my two books for sale on Amazon:
Dividend Growth – a 4.5 Star Investing Guide
2014 Best Dividend Stock Picks – After beating my benchmark with my picks in 2012 and 2013, I’m back for a third year with 20 US and 10 CDN favorite picks.
Sales are stable right now with Dividend Growth (I sell about 1 copy a day) and the 2014 Best Dividend Stocks continues to roll as my picks are doing as good or better than my benchmark. The easy money is gone and now investors are looking more than ever for undervalued stocks.
Back to square one with our niche sites as we didn’t benefit from a traffic boost for two months in a row. Then again, it’s a very frustrating month for all business segments. The positive point is that I’ve finished my niche site development plan in March and started to apply it last week. Hopefully, I will be able to improve my ranking with a few of our niche sites and make more money with Adsense. Everything is optimized, I just need more traffic!
The secret for traffic is not complicated: writing great content and make sure Google finds it. Simple, obvious, but this is what I need to look for if I want to improve this side of the business. All my niche sites were in the financial industry and all rankings have been hit hard by Google over the past 2 years. Dormant sites used to get between 2,000 and 3,000 unique visitors per month and now have dropped to 500. While they use to generate $50-$100/month each, they are now down to $10-$20 per month. This is why the niche site business has been hurt so bad.
I’m attacking 1 site right now to make sure I do things properly. Once this site is back on track, I’ll be able to create a process and bring all my sites back to life.
My biggest win in March is definitely in terms of strategic planning. I met with my partner and we worked a whole day on what we are going to do this year. We do this once a year in order to keep our focus in the right place.
This is exactly what we did a few weeks ago: focusing. We each have established 4 priorities which we will report weekly on what we have done. It increases the accountability and pushes us to work on what really matters. Here are my four priorities:
#1 Dividend Stocks Rock Content/Improvement
My first focus is obviously to produce high quality content for our membership website. We now have a bi-weekly premium investing newsletter (it was monthly before) that is about 12-15 pages per issue. The second point is to improve the website on a monthly basis. We started this project with a lean version (also known as minimum viable product) and we add new features on a constant basis. The latest one was The Rock Solid Ranking which is a complex scoring method to determine the most powerful dividend stocks at the moment. The ranking is updated on a weekly basis. We will add ETF portfolios shortly as well.
#2 Dividend Stocks Rock Promotion
Creating great content and adding new features are good to keep members on board but it doesn’t bring in new clients. This is why I also need a marketing plan. This includes special promotions, a referral system, affiliate program, guest posts, etc. I’ve written my first guest post last week (not published yet) and the affiliate program is almost ready (we changed our mind and switched affiliate systems last week! Doh!).
#3 Niche Site Link Building Project
I focus on driving traffic to one niche site at the moment to make sure I understand the “new” way Google wants sites to be. The idea is to optimize one site, create a process out of it and copy/paste the formula at a larger scale.
#4 The Financial Blogger Improvement
It’s been a while since I haven’t touched TFB seriously. I switched writing directions to more of a “make money online blog” about 2 years ago and I feel I had more fun writing about personal finance. This is why I’ll be changing the site slowly back to my previous direction. The site will continue to have updates about my online business, but the idea will be more targeted to my tag line “working 4 days a week, making a 6 figure income”.
I think it is quite obvious what a mess was: the money didn’t come in! For the first time, I truly feel the absence of my VA (maternity leave!). While I save on expenses, I also have to work more. I was on vacation 2 weeks in March and almost took an entire week to get my work routine back. Therefore, I wasn’t the most productive guy on earth this month!
I had narrowed down my task list to 4 items for March, here there are:
#1 Finish the 500K+ portfolio and advertise it – Not Finished Yet
#2 Write two guest posts for my membership site – 1 Guest post written, not published yet
#3 Offer my affiliate program to three bloggers and walk them through – I’ve changed my mind and switched affiliate program. Still under work.
#4 Finish my niche site development plan – Done! I can now apply it!
I started April with the most productive days I’ve had in a long time. I’ve already finished another side project for our membership site called The Rock Solid Ranking which is a complex math model to evaluate dividend stocks. It seems to work very well now!
Here’s the list of what I need to do in April:
#1 Publish 1 guest post for DSR
#2 Build links for my niche site
#3 Launch my affiliate program for DSR
#4 Finish and publish my 500K+ stock portfolio
#5 Change The Financial Blogger sidebar to reflect my “new” direction
While my results were very poor in March, it motivates me to the highest point. I really want to grow this business and improve my lifestyle. A bad month just tells me that I have to work harder in the upcoming months and this is what I’m gonna do!Comments: 6 Read More
It may sound like a financial planning topic but this is only common sense: you need an emergency fund. If you are young and starting your career; you need an emergency fund to cover for a job loss. You have a young family and a mortgage; you need an emergency fund to cover a broken washing machine. You grow older, don’t have any debts; you still need an emergency fund to cover for healthcare. As you can see, all your life, you will need an emergency fund.
In financial planning, we often talk about 3 to 6 months worth of salary. If I look at my own situation, this would mean having $16K to $32K. This is a huge stack of cash to be sitting in my bank account doing nothing. Worse than that, if you are like me and have a young family, you know all to well that your money is going towards groceries, activities and clothing. Therefore, there isn’t enough money left to #1 pay off your debt, #2 save for retirement, #3 pay off your mortgage and #4 build an emergency fund.
We will all agree that we need an emergency fund. If tomorrow I need $5,000 to repair my house or because I’ve lost my job, I don’t want to put this money on my credit card. The problem is often finding the money to build your emergency fund. Most people can’t save more than 1-2K per year (besides all other obligations). So how can you save 3 to 6 months worth of income?
This is when you have to think outside the box and leave the savings bank account to frugal people. I will never be able to save that much money in my bank account, so I’ve figured out other ways.
Huh? How can spending more money on an insurance contract assure that I won’t need an emergency fund? By taking disability (or salary) insurance. This type of insurance kicks in when you are unable to perform your work. If you are depressed, ill, or break your leg, you can use disability insurance. This will compensate a part of your salary and will help you avoid falling into credit card debts. I have a pretty good plan insuring 70% of my paycheck in the event of disability. This would be enough to cover most of my expenses already.
Disability insurance is also offered on credit products to cover your payment (for a mortgage as example). Unfortunately, it is not cheap.
I just read an interesting take from Dividend Mantra saying he would rely partially on his dividend payoutsif he were to lose his job tomorrow. Last month, he made $700 in dividends and this is enough to cover his rent. Not bad, huh? In my opinion, having a second source of income is probably the best solution to fund your emergency fund. The money doesn’t sleep in a bank account in the meantime, but will quickly take care of part of your bills if you lose your job.
My dividend income is all in a registered account for tax purposes. This is why I can’t use Dividend Mantra’s technique. However, I do have my online company generating several thousand per month. If I was going to lose my job, I would not go for another one. I also have my employer stocks which fluctuates from 1K to 5K most of the time (this is because I keep selling them each year to pay off other debts).
If I have an unexpected one time purchase to make (like a washing machine or an expensive car repair), I also have a line of credit. I could put a few thousand dollars on this as well if I had an urgent need for money. I would rather use a line of credit as emergency fund than having 10K or 20K sitting in a bank account earning 1%. This idea is simple; you are losing money if you use real cash to fund your emergency fund. You could save interest on your debts or make money investing if you would use this emergency fund instead of having it sleeping in a bank account. This is why I think it’s better to pay off your debt but leave a line of credit open and available on the side for emergencies. If you don’t use it, the line of credit is free of charge!
I often talked about the importance of having a plan B on this blog. The idea of a plan B is to get a way out of financial trouble in case of an emergency. When something bad happens in your life, your emotions put you on the edge and your head doesn’t think right. If your emergency plan is already drafted, you only have to look and follow it. No second thoughts, no hard decisions to make. They were all done in the plan when you had your mind set to think about it.
The good news is building an emergency list is not too hard nor complicated. It only takes a few minutes of your day and it can be revised on a yearly basis to make sure all your solutions are still in place. Here’s mine as a reference:
#1 70% of my income in case of disability (insurance)
#2 An average of 3K quickly accessible through my employer stocks
#3 A side business where I could rapidly withdraw 3K per month to sustain my lifestyle
#4 An average of 3K available on my line of credit to withdraw at anytime
#5 If I was going to lose all my income source for a while, I still have 50K in a registered account where I can withdraw money from it but pay taxes
Do you use cash to fund your emergency fund or do you use other means? What do you think of my plan?Comments: 4 Read More
This is a guest post from a blogger fella Robb Engen. After some discussion, I realized that he was running several online gigs on the side and his wife has even stopped working! He would definitely qualify for my post “Successful Double Income Stories That Don’t Lead to Quitting Your Job.” Enjoy!
One thing I’ve always admired about Mike is that he has managed to negotiate a four day work week so he could devote more time to his side business. He’s struck the perfect balance between entrepreneurship and a steady paycheque.
I don’t have a four day work week but I left the job where I was working 60 hours a week in the busy hospitality industry and headed to the public sector where the hours are much more flexible and I’m home from work before 5:00pm every night.
Rather than spend my ample free time on the couch watching television or lurking on Facebook, I research and write about personal finance and investing on my blogs as well as for a national newspaper.
It all started the year my first child was born and – after she settled into a sleep routine – I found that I had nothing to do in the evenings after 7:00pm. I started reading blogs like Million Dollar Journey and The Financial Blogger and realized that instead of consuming content all night long I could be creating my own.
Most personal finance blogs were all the same: 30-something guys trying to save and invest their way to financial independence. I wanted something different to stand out from the pack so I talked to my mother, a former financial advisor with one of the big banks, about a tag-team approach to the blog.
The Boomer & Echo blog was launched a few months later. We split the writing responsibilities and managed to publish five articles a week for two years. Within eighteen months we had 100,000 page views per month and earned over $3,000 per month in advertising revenue. The extra income allowed my wife to stay home full time to look after our two kids.
I’ve learned that you need to diversify in order to be successful online. I went on a guest posting spree for a few months to promote my blog and got noticed by the personal finance editor at the Toronto Star. Now I get paid to write a bi-weekly column for a major media outlet!
I also found a niche that I liked to write about – rewards cards and loyalty programs – so I started the Rewards Cards Canada blog. The niche happened to be underserved at the time and had the potential to be highly profitable with the right affiliate partners.
Earlier this year my mom and I started a fee-only financial planning service where we help clients identify their financial goals and write a plan to achieve them.
The point is: I spread my risk from one online income source to many different ones, and even though my main blog has suffered from lower search traffic in the last year or so, my side income has continued to grow.
I expect to generate about $65,000 in revenue this year from advertising, referrals, freelance writing, and the new planning service. The best part is that I can do all of this during the evenings and on weekends and still have plenty of spare time to play with my kids, go out with my wife, or stay home and watch Netflix.
Robb Engen is one-half of the Boomer & Echo blogging team. He recently started a new blog called Earn Save Grow that features stories on how to earn more rather than spend less.
Last week, I discussed about four other guys doing what Robb is doing; use their free time to work harder for themselves instead of working harder for the boss. The result is always the same: more money in your pocket than you can even imagine.
I appreciate the insider view of the personal finance Boomer & Echo provides. I try to give a similar feel to this blog as I think people should know more about the banking and financial industry. This is definitely a great and unique angle to approach personal finance. But you can find your angle too, or find something completely different to talk about and still make money.
Turn off that darn TV, find something you are passionate about and start working on your website. I’ll make a bet with you: I bet you won’t quit your job with your new site but I bet you will beat your day job hourly wage!
If you have other stories to share like this, I definitely want to hear about them!Comments: 0 Read More
I just had a very interesting discussion about money with my partner not so long ago. He is the only guy on earth with whom I can discuss this incredibly taboo topic of sex money! We both know each other’s salary, bonuses, net worth, debt level, etc. We don’t judge and simply share.
Sometimes it is quite a relief as I couldn’t tell anybody about my financial situation (besides you guys, but it’s not like a real face-to-face discussion!).
I was telling him how my saving plan was going to fund my children’s private education. I opened a TFSA last year and started saving with a modest $50 every 2 weeks. This year’s goal is to increase it to $150/2 weeks to make sure I have 2 years’ worth of private school at the time the eldest child starts. Even then, we made the calculation and I will be in the hole by $7,500 once the second kid finishes high school. Yet, I still have the third one to fund!
In my opinion private school is not a luxury. For me, it’s like saying that education is a luxury. That getting a good diploma, a good job is a luxury. For me, private school is mandatory (oh boy… I expect some serious discussions now 😉 ).
From what I can see at elementary school in my neck of the woods, is that our system drags everybody down. Good students are left aside with no benefits but to correct the work of others. In other words; they work for free while the teacher has less work on his/her shoulders. We focus on children with problems (behavioural or cognitive) and I’m totally okay with that. The problem is that while we put the focus on children who need help, the good students are stuck to their chairs waiting. It happened to me when I was in school and I see it happening with my kids now.
I also have the chance to compare what my children learn at school with what one of my friend’s children learns at a private elementary school. Both our sons are in 3rd grade. While mine has 1 hour of English per week, the other is already able to keep a simple conversation in both English and Spanish. He is as good in French as my child and has learned two other languages at the same time. He plays more sports, does more math, more of everything. This is why I can’t afford to let my children miss out on private school once they reach high school.
I attended both public and private school when I was a kid. I did elementary school in a public environment (actually went to 3 different schools since my parents moved often) and completed high school in a private institution. The funny part is I didn’t want to go to private school. All my friends were going to a public school nearby and I had to take the bus and go to this unknown environment.
All that for what?
A better education my parents said.
The private school was okay but I wasn’t in love with it either. To be honest, I stuck to the point that my friends weren’t there and as a teenager, I didn’t care about a better education. But after a few years, I realized something: this is not only about a better education.
I was able to compare what my friends were doing at public school versus what I was doing at private school. The difference was huge!
We had more resources (brand new gym, new computers, a 400m trail, etc)
We had more projects (young entrepreneurs, theatre, improv, elite sports, etc)
We learned a lot more (I had the option to attend higher level math class, physics, English, Spanish, etc)
People were motivated (we didn’t have any dropouts hanging around, disturbing the class)
In other words; the public school has everything the private school had, but the private school had it better on all points. I would have been pretty bored to go to a public school as the system is the same as in elementary school; they focus on the problems and let the good student wait in their seats. I think school should be more fun than that!
Ironically, my children will follow the same path that I did: public school at first and then private next. I just can’t afford elementary private school (6K per kid, so 12K/year…). But I can plan for high school. Since I can’t use money from my RESP (Registered Education Saving Plans are for post secondary school), I need to find the money elsewhere. In the upcoming years, I’ll have to focus on that and probably reduce my spending elsewhere.
I’m not a fool either. I know that private school won’t guarantee my children good jobs in the future. They can still dropout and hang around in a park. But there is one thing I know; I’m going to give them a full deck of cards to play with. It will be up to them to manage and do something with it.
Comments: 11 Read More
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