It’s almost a myth, read a legend.

Some people believe that it exists but never drank from it. Surprisingly, they are ready to defend it with the price of their life.

Others claim high and loud that this myth has been plot by a few moguls who wanted to make money and take over the world. They are pursuing the heretics as if it was the inquisition.

I’m talking about the holy grail of blogging: earning passive income.

Why People Say That Blogging is Not Passive

There is an interesting paradox between blogging and passive income. Most people who made money with their blog actually told people how to make money on the internet. On top of making money from something that may not even exist (simply make money blogging), they actively blog about it. Therefore, there is nothing like passive income from blogging.

It is true that when you look at your blog, it takes a lot of effort to make it grow:

-          Write great content

-          Participate on social media

-          Comment on other blogs

-          Answer comments (from your site and others where you commented)

-          Manage email

-          Do Keyword research

-          Think of future projects

-          Monetize your site

-          Etc, etc, etc.

The problem is not only that you have to do all these tasks, but you have to do them on a weekly basis. Technically, if you want to keep your blog growing and in good condition, you need maintain this blog routine forever. This is exactly why most bloggers burnout after a while. There is a huge bunch that quit after 12 -18 months. It seems to be a real deal breaker for most of them. The next batch will quit after 3-4 years. This leaves only a few survivors in the blogging world (like me!). These, in general, have found the holy grail or at least drink from it from time to time.

So is it possible to make money online while being fully passive?

Here’s the problem: most people will look at their blog this way:

If you are among these people, you have probably never drunk from the holy grail of passive income. Or you are falsely thinking that you are earning passive income. The truth is that you are making income (I hope for you!) but it is far from being passive. How come? Because you are involved in each of the steps:

You write the articles.

You follow-up on comments and email.

You do your own promotion via comments, forums and social media.

You monetize your site by yourself.

I’ve been lucky enough to find the Holy Grail and drank from it many times. This is why I’m sharing with you what it looks like:

Here’s What the Holy Grail Look Like

As you can see, there are 3 different things from the previous chart.

#1 There are arrows going from your blog (which means that you use your blog to do other things).

#2 There are way more arrows (to generate a sustainable flow of income).

#3 Each bubble contain a source of passive income.

Virtual Assistants:

The first step for our growth was to hire virtual assistants. The way we use our VA is similar to a manager in a store. We have set up the store, made the rules and then, we expect a manager to come into the place and run it to make money. We don’t have to go to the store very often and still make money. We definitely make less money when compared to the guy who prefers not hire a manager and works 80 hours in his store. I would rather enjoy life and think about more projects than working like a donkey. For example, most of my advertising strategy is operated and managed by a VA. The other VA takes care of some of our purchases.

Writers:

Then, if you don’t want to burn out, you need writers. I know… you are losing the essence of your blog if you are hiring other people. However, if you buy more blogs, you can use your own blog to drive traffic and build links while you have writers creating more content on more blogs earning you more income. How cool is that?

Archives:

You have 2 choices as a blogger: your archive can be full of old posts (good or bad, I don’t care). Or, your archive can be full of SEO’d articles that will generate even more traffic. These articles are your small money making machines. And this is why it is important to know how to use Market Samurai for example. People think that it’s stupid to pay $97 for software when you can use Google Keyword Tool for free or simply not SEO the articles. I guess they are right. Meanwhile, I’ve grown The Dividend Guy Blog Traffic from 25,000 visitors per month at the time I bought it (back in July 2010) to 59,000 visitors last month. I guess it was just luck and not just the proper use of Market Samurai, right?. Some articles I have on my sites earn steady adsense income on a daily basis for the past 2, 3, 4 years.

Newsletter:

Have you read my $463 email? If you haven’t, I urge you to open it in another tab and read it ASAP. I recently changed a few things in my newsletters and now make a steady $10 to $15 a day from them. I don’t even have to think about my mailing list as they are all pre-written articles that are being sent to my readers. If you want to know how I do this, you have to register for my newsletter (I explain everything in there!):

Products:

This is something I’m working on. I’m currently successful in making roughly $30/month from a small eBook I wrote for one of my niche sites. If I was going to get more traffic, I could probably increase this passive income to $50/month without much effort. Once your product is launched, you have little work to do and will still earn residual income from it. A great example is my Dividend Investing eBook where I make $100 to $150 per month from it without doing anything (and the book is free, imagine!).

Niche sites:

I don’t see my niches sites as separate blogs or websites. I see them as an extension of my blogs. This is how I use my main blogs to drive traffic and build links (in order to get search engine traffic). This is how I’m now going to make over $100/month in Adsense with Canadian Dividend Stock and I don’t even have to work on it anymore. My sites are sending a steady 50 visits per day to this niche site and a good SEO work has generated another 50 steady visits. Each time I send traffic towards my niche sites (from another blog or a newsletter), I make a few dollars with Adsense. The cool thing is that adding a link on an article doesn’t require much effort and I still make money out of it.

So Where’s Your Holy Grail?

I hope this post will help you understand that you can make passive income from your blog. The problem is not the blog by itself, it the shape of your blog. I’m currently making $3,000 of pre-tax profit (so $2,430 after tax) per month and work less than 10 hours a week. This is the equivalent of making $60/hour net of taxes. I’m able to do this because I’m focusing on creating passive sources of income. I’m able to do this because I’m drinking from the Holy Grail of Blogging.

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~Survival of the Fittest~

Herbert Spencer

If you have been following The Financial Blogger for more than a year, you will remember that I was hit by the Panda update. This was an update done by Google in order to “improve” site rankings in its search engine. Some of my sites were hit hard and I lost up to 50% of my traffic on some of them. This wasn’t the first time that Google “played” with my network. In the past, I’ve been through several “Page Rank updates” (PR) where I could go from a PR4 to a PR2 or worse, a PR0 in the span of a mouse click. The Page Rank is the system used by Google to determine a site’s importance on the internet. A PR0 basically tells the world that your site doesn’t mean much in Google’s eyes. Trust me, when 2 or 3 of your biggest sites get a PR0, it’s worse than getting driven into a pillar by Zdeno Chara.

Each time I get hit by Google, I freak out. You put so much effort to please your god and it turns around and slaps you in the face. Considering that Google’s hand is the size of an elephant, that slap hurts man! I’ve been asked for help by many bloggers with regards to getting back their PR or their search engine traffic. This is why I thought about writing this article where I’ll be sharing with you most of my tricks on how to survive a “Google Apocalypse”.

Type of Google Apocalypses and How They Affect Your Blog

There are basically 2 things where Google could hit your site very hard:

#1 Search Engine Traffic:

The search engine optimization game has been in place since the internet was invented. Once Google established its supremacy in the late 90’s early 2000’s, the race for the #1 spot in Google has been the primary objective of most online marketers. Around the mid 2000’s, we saw the progression of a new type of website and Google felt for them: blogs. They offered fresh content almost daily on very specific topics.

This was like the perfect definition of a search engine optimized website: keyword rich with daily fresh content. Over the years, people started to make more and more money with their websites. In the Personal Finance niche, I can tell you that people were laughing at me when I told them back in 2007 that I wanted to make money online. Today, it’s a whole different ballgame where an experienced blogger can make $10,000 per month with his blogs.

However, while bloggers were transforming their blogs to make more and more money, the obsession with tweaking their site to please Google and rank higher reached a level close to prostitution. This is why Google decided to improve its algorithm many times throughout the years. Their most recent update was the “Panda Update” that happened in April and October of 2011. Some people saw their traffic drop by 50% in the span of a week. This is how hard Google can hit if it “deranks” your site from its search engine.

A blog or website, is not much without visitors. More importantly, a blog without search engine traffic cannot become a money making machine. Most loyal readers will comment on the blog and contribute to its community but will rarely click on ads. Unless you have super loyal readers in a very specific niche where there is a need, you won’t be able to sell them many things either (how many of you are making over $1,000/month with affiliate products?). Therefore, Google traffic is a gold mine for any blogger. If you don’t get that traffic, you pretty much say “goodbye” to tons of money.

#2 Page Rank Update:

While understanding how you can rank higher in a search engine is “relatively simple”, understanding how Page Rank (PR) works is a totally different thing. By definition, the Page Rank is a measure used by Google to determine if your site is worth something or not. New and relatively small sites usually range from PR0 to PR2. When you have an established blog, you can get a PR3 (most common), PR4 or PR5 (pretty rare). Some super lucky bloggers will reach a PR6 or PR7 but that’s incredibly rare and your chances of keeping this ranking for several years are not good.

Besides determining your “importance” to Google, it also determines the “power” of any links coming from your site. For example, if you have a PR3 site and you link to a PR2, you are definitely helping them and giving them a push. Your links are “worth” more than another blog that has a PR1 or PR2.

It is important not to mix Page Rank and Search Engine Traffic. You can have a PR4 with a lower level of traffic than a PR3 and so on. If you have a PR drop, it doesn’t mean that you will have less traffic. This is the same if you have a PR increase. Don’t get too excited, you won’t be getting many benefits from it.

To be honest, I’ve quit trying to understand and use this simple definition of a PR update: Google rolls the magic dice with roughly 6 sides and you get the PR on your site that way

Now, if you don’t offer private advertising on your blog, your PR doesn’t matter. Why? Because most people interested in your PR are advertisers who are trying to rank higher in search engines. Therefore, getting links from a PR4 blog in their niche is very powerful. As Google sets pretty much all the rules for search engines, advertisers will want to have links from high PR sites and won’t give much interest to low PR (read PR0) sites. In fact, you can get 100,000 visitors per month and have PR0, you will generate very little interest from most (read 90%) advertisers. You can always try to tell them that other metrics exist, the creators of the “other metrics” don’t operate the biggest search engine in the world.

Life after Google: How I’ve Survived

As I mentioned in the introduction, I have lost Page Rank (I once went from PR4 to PR0 on several blogs!) and been hit by the Panda update. So I’ve suffered from both Google Apocalypses… I just hope that there isn’t a third type that I haven’t discovered yet! Nonetheless, my business revenue has kept increasing throughout the years. I’ll share how to get back on track later but I want to focus on what you can do to make money blogging with less traffic or a lower PR.

Warning: this is not a walk in the park (and a 3,000 words article), if you don’t want to work, skip this post and forget about making money blogging .

#1 Forget about the “poor me” attitude:

Losing ranking sucks. Losing money sucks. But losing hope sucks even more! It’s not the time to panic or waste valuable time and energy complaining or thinking about some kind of evil conspiracy theory against your blog. Reality check: your blog is pretty small in the blogosphere (unless you are a guy like Get Rich Slowly or I Will Teach You To Be Rich ). When I say that, I’m not being arrogant. My whole network is nothing compared to the blogosphere. There are sites reaching my monthly traffic bynoon on a daily basis.

Repeat after me: there is no conspiracy, there is no “poor you”, it’s just a day in a real business life. The business has evolved without you, now it’s up to you to get back on your feet and evolve as well.

#2 Go Back To Basics:

Young blogger or experienced one, it is always good to go back to the basics once in a while. Every year or so, I read 2 of my “bibles of blogging”. It helps me to concentrate on what really matters and improve greatly my blog each time I review them. The first book is 31 Days to Build a Better Blog written by ProBlogger. This is definitely the most complete book on how to create a solid and sustainable blog. The thing I appreciate the most about this book is it includes specific tasks to achieve for each “day”. If you haven’t read this at least 3 times, you haven’t covered all blogging angles. The second book I read on a yearly basis is Blueprint for How to Make Money with a Blog by Peter Anderson @ Bibble Money Matters. While ProBlogger’s Book will teach you how to build an incredible blog with great traffic, Blueprint for How to Make Money with a Blog will focus on various ways to make money from it (including how to create your own product). Peter’s surely knows what he is doing as we replaced his wife’s income with his blogs (and he is now doing it without private advertising!). The package comes in 2 versions (PDF and an mp3 file that you can upload to your iPod). If you only want to buy one book, I think that 31 Days to Build a Better Blog is the best option.

#3 Focus on your readers:

First and obvious tip: focus on your readers. You might have been unfairly punished by Google and deliver great content. But the key is to continue to deliver this content. On the other hand, you should be questioning if your content is gold or not. A good trick would be to ask yourself: “would I pay $50 for this post I just wrote?”. If you wouldn’t, this is because you are not providing incredibly good content. A great article will provide a solid opinion on a specific topic with added value for the reader (e.g. things they didn’t know, a how to article or simply an article that helps people to do or understand something). These kinds of articles will get the attention of your readers and probably from other bloggers. You have a great chance of getting references and increase your readership. Your loyal readers will always help you going through tough situations.

#4 Work with other bloggers:

Another great way to increase your traffic is to work with other bloggers. By focusing on your readers, you will increase your direct hits. By focusing on other bloggers, you will increase your reference hits. This goes beyond asking a few friends to link towards your site. You will need several actions to generate traffic:

-          Guest posts on great blogs

-          Comment a lot

-          Submit to carnivals

-          Participate on forums

-          Help other bloggers

-          Create group project (see my Dividend Growth Index project)

Don’t underestimate the power of doing group projects. If you are able to gather 10 or so bloggers that are in your same niche, you can “share” your readers amongst the network and everybody gains.

I’ve asked Will Chen one of the founders of Wisebread what was his #1 trick to connect with bloggers and he told me that the best way to do it is to connect with a very few influential bloggers at a time. They can be big stars or people that you truly like (they will most likely become the next big guys anyway). Instead of commenting on 20 sites, focus on 3-4 per month. Don’t just comment, email them, share passions and interests. Build true friendships with them. Don’t just talk about blogging, become friends.

Some people are pretty good at working with other bloggers and are already doing it. I’m not reinventing the wheel here. So if you are doing this part perfectly, focus on the following points.

#5 Create a Newsletter:

I’ve written a great series on how to build your newsletter and how I made $463 in a single day with mine. This series outlines the power of a newsletter. Most people are too lazy to register to your RSS and read all your posts. It may be too much for them. However, receiving a bi-weekly newsletter is awesome for them. Especially if you provide your best content in there! The key with a newsletter is that you engage your most loyal readers to follow you all the time. You can drive traffic to your sites, start new projects, and ask them for their opinions. This has tremendous value if you want to build a real business.

The last part of this series (and probably the most important part) is left for my newsletter subscribers (hehehe, I know, I’m a sucker sometimes ). You can subscribe here:

Creating a newsletter will require additional time and it’s not easy to manage everything. On the other hand, your newsletter is one of the tools that is completely independent from Google. This is worth a lot.

#6 Use other ways to get traffic:

Did you know that Google wasn’t the only traffic provider? Think outside the box and try to become more active in the following channels:

-          Twitter

-          Facebook

-          YouTube (yeah I know, it’s still Google)

-          Pinterest (read this article if you doubt its power)

Social media is one of the highest sources of search results after classic search engines. If you build a reputation on social media, it will be pretty hard to be “de-ranked” from there. Social media is probably one of the most powerful platforms besides Google where you can increase your readership. If you are popular on Facebook, chances are that these people will eventually read your blog too!

#7 Explore different opportunities:

It’s time to open up your mind and get to the drawing board. You need to think about your blog differently. Focus on your passion and forget about the money for a while. If you know a lot about something (and you surely do), focus on that specific niche. When I say focus I mean:

-          Do keyword research (read how I use Market Samurai).

-          Create a series of articles around these keywords.

-          Don’t play keyword stuffing but rather write epic articles on specific topics with these keywords.

-          Create a small eBook or an email series to engage your audience.

-          Search for affiliates on products you use and are related to your new “niche”.

-          Once you get more traction on this niche, you can go for companies to get advertising deals.

-          Don’t build a niche site; just focus heavily on a niche within your blog.

-          This is how you become the reference in a specific domain (as I’m a reference for buying/selling blogs with TFB for example).

#8 Invest

: A classic reflex would be to reduce your blogging activity and your cost. After all, you are going to tell me that you won’t be going anywhere if you lose money each month, right? I’d say that you are half right, half wrong. Invest money, time and energy towards the right activities (those which create value), your blog will grow. You have been spoiled by making money easily, now you have to work to earn a buck. This is the reality of any business. If you thought that the internet or blogging was different, welcome to the real world! Change the word “spend” to “invest”. When you “spend money”, expect a return. Most people doubt in investing strategy for my online company. However, I can tell you that I’ve been growing continuously since 2008. After 4 years of aggressive investment, my expenses are now more stable while my revenues keep growing.

#9 Expand/Diversify:

I can never tell people often enough. Diversify your sites, your traffic sources, your income sources, diversify everything. This is the perfect way of not getting brutally hit by any storm. I’m currently running on 4 different servers for the very same reason: if one of my servers goes bust for a day, I’m not losing all my traffic, just 25% of it. There are a lot of ways you can expand your blog to a whole network and become diversified:

-          Buy other blogs

-          Build other sites

-          Create a newsletter

-          Be active on social media

-          Do a podcast

-          Create YouTube videos

-          Write an eBook

-          Create a forum or group of mastermind bloggers

-          Freelance

Getting Google’s Good Grace Back

The 3 Gs (Google’s Good Grace) is the holy trinity of the internet . Getting it back is not an easy task. In fact, I don’t really know how to gain or lose the 3Gs. Getting traffic back or your Page Rank is not easy as there are no clear guidelines. This is why I focused this article on these 8 steps to survive instead of working on getting what you have lost from the very same source. Becoming more independent from the 3Gs is probably the best attitude you can have. Your blog will get a lot stronger if you do that than if you desperately work on what has been lost.

It doesn’t mean don’t make any changes to your site and ignore what just happened. I’ve actually learned a lot from the Panda Update (read lessons learned here). Here’s a resume of what I’ve changed since getting hit:

-          Focus on my reader’s experience

-          Work on metrics such as number of pages viewed and average time spent on site

-          Focus on getting RSS and newsletter subscribers

-          Write less articles but more powerful ones (like this one )

-          Take clear directions for each of my blogs (so readers really get what they are looking for)

-          Implement quarterly objectives to make sure we work on value added projects

-          Make sure that each site gets fresh content and with fresh incoming links all the time

I think that focusing on fresh content and fresh incoming links on all our sites was one of the best decisions we ever made. This is being done through various strategies:

-          Blogroll exchange

-          Carnival submissions

-          Comments on other blogs

-          Forum posting (with signatures)

-          Writing great content so you get more links towards your site

-          Highlighting other bloggers (so they are more likely to do the same in the future)

-          Create group projects (everybody links to each other and adds a lot of value for readers)

-          Write controversial posts (this always brings a lot of comments and links )

-          Guest posts

Unfortunately, doing all this won’t necessary get your traffic or Page Rank back from Google. On the other had, it will help you grow your traffic and make more income without being dependent on the 3Gs. If you are somewhat lucky, you will eventually get back the 3Gs on top of gaining traction from all these actions. This is how you will get stronger and become more diversified.

As in any kind of business, there is nothing more important than being diversified. You don’t want to be that guy whose only client is Wal-Mart.  If you lose that client, you don’t have a business anymore. This is not having a business model, this is being lucky until the perfect storm strikes.

The day the 3Gs pulls the plug, it sinks your blog . Be independent.

If you have any questions, I’m here to answer on this blog!

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The other day Mike compared investing in stocks to blogging. In this piece, Mike wrote about why he feels that you could make more money from blogging than investing. This article really got me thinking about blogging.

I wrote about how you can start an online business a few months ago. For the first time, I actually reached out to some friends and pretty much forced them to read the article. I wanted to spread the word about this piece because I was really proud of what I had written. I went into detail and explained exactly how you can start a blog right now. I discussed everything from picking a theme, to hosting, all the way to deciding on your topic.

Today I wanted to explain why you should start a blog in your 20s…

You stay focused.

It’s difficult to stay focused on goals in your 20s. There are so many distractions out there. You can get wasted on a Monday night instead of worrying about work. You can chat on Facebook all night as opposed to looking up ways to make money.

When you build a blog, you slowly build an audience over time. This audience forces you to stay accountable and focused. If you don’t post for a few days, your readers will wonder where you went. If you don’t respond to emails, advertisers will question you. If you don’t put up quality work, nobody will ready your blog.

I don’t know about you, but it’s easy for me to lose focus. The only reason I’ve managed to stay out of trouble in the last few years has been because of blogging. There have been many nights where I called it a night early instead of doing something foolish to go home and finish a blog post. If you want to stay focused on something, I recommend that you start blogging right now.

You learn more on the topic.

Through writing about money I’ve learned more than I could possibly imagine learning about money. I studied finance in college and it honestly is nothing compared to what I’ve learned through blogging. I learned more about money just by writing about the topic consistently

For example, I always wanted to get into vagabonding but I just didn’t know anything about how to travel the world. Instead of making excuses, I picked up a book on the topic and decided to turn it into a colossal blog post. I then used my own blog post as a guideline when I went on my first trip solo to Europe in September.

You never know what blogging will lead to.

When I started blogging in November of 2008 I was excited about the idea of having an advertiser pay me $20 per month for a text link. I didn’t know what it could potentially lead to. Over the past few years blogging has landed me in the Toronto Star, New York Times, and on Fox Business News. I would’ve never had these opportunities presented me through traditional means (finding a job after college).

You build amazing connections.

Through Twitter, email, blog comments, forums, and conferences, I’ve met some interesting people just because I got into blogging. One of my friends laughed at me when he found out I was going to a blogging conference. When I got back I laughed at him because I had more fun with my blogging peers than I do with this friend when we went on a trip. Through blogging you’ll meet some intelligent people that you can learn from. You’ll also get to meet some fools that will help you decide what mistakes to avoid.

That’s why I think you should start a blog in your 20s.

What would you do with $10,000?

At the end of the piece Mike asked what would you do with $10,000? Would you invest it in the stock market or into the blogging game? I personally chose to leave the stock market in 2009 when I invested my money into a rental property. If I had to invest $10,000 right now it would be into time. I’m a firm believer in using time. Money comes and goes. Time goes and never comes back again. I’m always looking for more ways to find time for my projects. Money is great but time is better in my opinion.

What do you think about starting a blog? Would you recommend it to a friend?

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As you already know, I’m a dad for the 3^rd time. Since the beginning of February, I’m a “stay-at-home” dad. I’m actually blessed to be able to take a 5 week paternity leave (paid at 60% of my base salary). Unfortunately, this great experience is coming to an end as I start my new job next week.

At one point in time, I had the goal of taking a 40 week paternity leave to work full time on my online business. This plan was my primary option until January (right before my wife gave birth!). This is when I got a call for the interview that I had back in December to tell me that I got the job. Since it’s the most interesting type of job in my field, I couldn’t resist giving it a try. It’s an awesome job only 5 minutes from my house. It will be like being paid to do something that I would do for free .

So I’ve been giving some thought about working from home, in my basement all day. Some people in my entourage told me that it wasn’t a good fit for me as I am a people person. I love to meet with people and I talk a lot. However, I have a true passion for working on my own business. This is what I discovered when I realized that I’ve spent every single night (from11pmto2am) of my parental leave on my computer. During the day, I was taking care of my wife and newborn. At night, I was becoming a mogul. Do you want to know how it went? Let’s take a peek at my short journey:

An Incredible Level of Productivity

The first thing I have to say is that I’m incredibly productive at night. This is also how I’ve survived my MBA. In the span of 10 days, I was able to create a niche site from scratch: EMT Classes Academy. The goal was to see if I could apply different niche site techniques into a site that is not related to personal finance. In 10 days, I did my keyword research with Market Samurai, built my site structure and then wrote about 70 articles. I included my Adsense code along with 2 affiliate programs that I found via Click Bank. Since then, I have been promoting the site. I started slow because I don’t want to push the site too hard down Google’s throat. In 20 days of existence, I have received 7 search engine visitors and made $5.06… lol! Since the site is full of real and useful content, I guess it’s only a matter of time before I see it fly!

I also have to thank many bloggers who had helped me promote this site:

Sunil @ Extra Money Blog (for his external and internal linking strategy)

Jeff @ Life Insurance By Jeff

SB @ Finance Product Reviews

Andy @ Tight Fisted Miser

Dean @ The Millionaire Nurse Blog

Edward @ SEAM Publishing

I Really Like Working on My Stuff

Besides having the possibility of working on many projects and doing things that I could have never done (like creating EMT!), I realized that I’m truly passionate about running my own business. I wanted to know if I was able to work from home and enjoy my hobby enough to have it become my job. Well I think that cutting down on my sleep like this is an obvious sign that I truly love what I do online. What I like the most is the strategy level I can get when my mind is 100% occupied by my sites. I can now relate to how people who quit their jobs and go full time online are so successful. The power of their brains has been unleashed! This is that simple .

The Biggest Challenge

The biggest challenge I had during this short period of time is to concentrate on specific projects. At first, I lost a lot of time wondering around and bouncing from one project to another. In a few days, I had more ideas that I have had over the past 12 months! This is why I had to refocus and get back to my original plan. In 4 weeks (it’s not like the first week I really worked!), I was able to:

-          Optimize a part of my sites to make affiliate revenue grow from $150 to $300/month (this is very steady now).

-          Create a site about paramedic courses

-          Integrate both Fabulously Broke and Everyday Minimalist into our network

-          Create a 10 article series for a potential newsletter

-          Do keyword researches for several terms / sites

-          Almost complete my Dividend eBook (to be released shortly)

What is really interesting about these projects is that it won’t have an immediate impact on my sites. However, the exponential results of this will be incredible. And this is what I’m looking for: exponential long term results.

Going Back to the Real World

This will be a true shocker next week where I will have to put my suit on and wear a tie. As much as I like my day job, I’ve discovered that I really enjoy my “night job” too! The positive side of this is that I now know that I have an opportunity waiting for me if the corporate world doesn’t seem enticing anymore!

I still have a bitter feeling that I’m leaving a crazy opportunity to work on my company risk free since I would have been on parental leave. On the other hand, I’m also seizing a crazy opportunity to work in wealth management. Life is weird sometimes….

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A few weeks earlier, my partner sent me an email telling me how interesting it would be to write an article about the difference between dividend investing and making money online. He thought it would be fun as I’m a big fan of both dividend stocks and making money blogging. But there is a law out there that says that great minds think alike. Well if I’d do my post today ignoring this law, I would have to ignore Dividend Ninja’s guest article on Young & Thrifty: Website Income Vs Dividend Stocks: Which One Come Out On Top?

I was stunned that someone had the same idea but was 10 times faster than me to write an excellent article . My comments on the site were that I thought it would be easier to make money through dividend investing than through a website. But this is for Mr and Mrs anybody. But what I didn’t say is:

If you know what you are doing; you will make a LOT more money through websites than through investing!

You want to know why? Here are a few reasons:

#1 Growth Potential is Bigger With a Website

The growth potential with a company is usually pretty limited compared to the growth coming from a website. The main reason is that the company being listed on the stock market has already grown for several years before issuing its first IPO. Therefore, you are buying a company that has already gone through its most beautiful growth years. For example, private investors that were able to invest in Google in Year 1 or 2 would have made 100000% on their investment as compared to those who got into the stock after its first IPO. The same story is about to repeat with Facebook in a few months. I doubt that FB will see such incredible growth in the upcoming years. Now, you can expect a double digit growth (that is still interesting) but you’ll never see triple, 4 or 5 digit growth as it has in the past.

The potential growth is usually even worse for dividend stocks. In order to be able to pay dividends, a company must be stable and also willing to sacrifice a part of its growth potential since it is distributing cash flow to its investors instead of using this money to grow even faster.

On the other hand, a website is usually a very small property. And what do all small properties have in common? They have a huge potential for growth! So this is whyUSgrowth is slower thanChina’s. This is also why my son learns more things and learns them faster than me . Websites have this potential to grow by 20% each year for several years. Just take my company’s revenue since I started:

2008: $9,459

2009: $33,412 (+253%)

2010: $74,854 (I’m excluding important sales in this year) (+124%)

2011: $114,158 (+52%)

#2 ROI is Higher With a Website

I’ve recently mentioned that you can buy a major website for 36 times the monthly income. Some people told me that I was a nutcase. Fine. But when you think about it, this is some incredible return on investment! Forget the blogger’s or pity individuals’ perspectives for a moment and focus on an investor point of view: You have $50,000 to invest. Your first option is to buy a stock (or a group of stocks) paying a 4% dividend. This will generate a $2,000 dividend payout each year + the potential of seeing your portfolio grow over time. If you are a top notch investor, you will most likely get a 8% investment return over the long run (4% dividend + 4% in capital gains).

Why do I count only 4% in capital return? Because, historically, the stock market shows an investment yield of 9% (before fees and taxes). So unless you are the next Warren Buffet, you won’t be able to score over 8% after a period of 5 – 10 years. The main reason why you can’t score higher is due to the lack of information and comprehension. You are limited to your own little brain reading financial statements. You are not in the company, not managing the business and don’t have the feel of the company.

Now, consider a second investment proposition and look at a blog or a group of blogs to be bought for $50,000. At 36 times the monthly income (and you are not getting a deal at that price!), you will get a yearly dividend of $16,666. This is more than EIGHT TIMES your dividend investment. The best part is that you can expect a much higher growth from the value and income generated from the same sites due to the reasons explained in point #1.

The only thing to consider is that you need to spend time to manage the website. But technically, a minimum of 5 hours per week would be enough to keep the revenue as is. Therefore, if you “pay yourself” $25/hour, you are now down to a “dividend” of $10,166 per year. This is the same as a 20% dividend yield. Even better, if you are smart enough, you’ll find someone that you will pay $125/week to manage the site for you. I can send you a few names of good bloggers that would be glad to it .

#3 You Have a Better Risk Assessment With Websites

As I previously mentioned, you don’t get hold of every single little detail about each stock you own. You can read the financial statements but you can’t get in touch with every CEO to know what is truly going on within the companies’ walls.

This is something you can do when you own your site. You get access to all the stats and can see in a heartbeat if there is any problem with it. Better knowledge leads to better risk assessment. On the other hand, if you don’t know what you do with websites, this can be highly dangerous too! Always invest in something that you understand, says Buffett!

Where would you put your next $10,000?

I’ve been telling you that investment sucks during the whole article but it doesn’t mean that I don’t invest in the stock market. In fact, I’m maximizing my RRSP account each year because I think it is good to have a great diversification across all your assets. But to be honest, my RRSP account is my “B plan” along with my company shares. So if I have another $10,000, guess where I would put it . But what about you? What would you do with $10,000?

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