Last week, after coming back from the Financial Blogger Conference, I made another business changing decision: I’m going to give up $4,200 in annual income.

I’m not talking about any shady ads or inappropriate paid content on one of my sites here.

I’m talking about a fight I ran into with one of my advertisers or affiliates.

It’s not even a matter of principle or value.

So Why The Hell Am I Refusing Good Money Like This?

I guess I’m doing it because I want to grow . I wanted TFB’s “above the fold” section clean. I’m leaving a decent money maker to keep more readers on my site.

As of last week: I quit Adsense on The Financial Blogger

Everybody that has the guts to call himself a blogger knows that the best way to make money with Adsense is to use the “Who Sees Ads” Plugin, get a nice 336×280 large rectangle Adsense with blended colors and you will make some decent money. This is what I use for all my sites and as you can see in my blog income report, I’m raking in more than $50 per day with Adsense. Of this $50, I am making between $10 and $15 per day (so roughly $4,200 per year) from The Financial Blogger ads.

Since the beginning of the year, I have changed the direction of The Financial Blogger. While I still talk about my personal finances, I’m also adding several articles with regards to managing an online business and I opened the doors to my own company. I now show you what I am doing to make even more money online.

After being hit by the big fat Panda update, I’ve decided to let go Google traffic and concentrate on building a community. Today, I’m telling you about a step forward and getting rid of my TFB Adsense.

Why Drop So Much Money When It’s Easy and Legal?

I have only one reason to do so:

YOU!

I want to diminish the number of ads on TFB in order to make your experience on my site better. I don’t want you to be bothered by a pop-up asking you to subscribe to my newsletter (but feel free do to it anyway ), I don’t want you to be bothered by the “top 10 stocks” ads from Adsense either.

I think that by cutting down my ads, I increase the chances of people giving me credibility, sticking with my site longer (obviously if they don’t click on ads, they will read more stuff on my blog) and subscribe to my RSS and newsletter or follow me on twitter.

So now, when you hit my home page or any other page, you won’t see any ads in the first place. If you scroll down, you will see some ads on the right columns (as Adsense is used to back fill my 250×250 block there and other private advertisers). However, you won’t have anything in your way when you read any of my articles as this column has been completely cleaned up.

The point is to please you and get your friends on board

Some people may argue that my regular readers will accept ads as it sounds fair to get bombarded by ads while reading free content. However, between you and me, my regular readers don’t click on ads. In fact, my most loyal readers don’t generate money on TFB as they will read my stuff but never click on anything.

As for the new visitors, well if they click on any ads, I just lost them. And this is exactly the point, to keep these visitors on my site longer so they have time to bookmark my site or register to it so they will eventually come back.

I’ve noticed a terrible stat lately: The number of new Search Engine visitors each day vs the number of RSS subscribers. While my RSS is fairly stable and increasing very slowly. The number of new visits is growing every day. Therefore, this means that people are visiting my site but are not interested in getting more of it. They don’t want to come back.

And this is something that pisses me off! I can’t believe they don’t want to read more and hang around for a few more days. And I think that one of the reasons might be because I have too many ads on my site. This is why I’ll start the clean up by leaving an Adsense block to back fill ads that are lower down on my site and I left a few key earning pages with Adsense. I know that these pages are not representative of the blog as it is today and that is why I don’t mind making a few bucks out of them .
 

Do you think I’m crazy? Have you considered this for your own site?

I curious to know if this idea sounds weird to you of if you have ever consider dropping your current income in order to seek more commitment from your readers? What do you think?

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After publishing my blog income report yesterday, I got several questions with regards to my operating costs. Last year, I wrote a detailed post on how much I spend per year. After reading this post, you will realize that during the past 12 months, I was in line to spend about $67,000 to run my business. This obviously cut out the glamour surrounding my company income which is around $8,000 to $10,000 per month.

So what’s the point of working extra hours on a company that will bring about $30,000 in profit per year? It’s even worse when you calculate that I have a partner and that I have to split everything 50/50! I tried to explain my reasoning in a previous post but I don’t think that people realized how I separate my costs and why it’s not important to look at cost when you are building your side income.

#1 I don’t derive income from my side business

I do have a pretty decent day job and this is why I don’t need my online money. Instead of receiving dividends or a salary from my online business, it pays for some of my expenses. For example, my blackberry, internet and cable are supported by the company. Same for my partner.

So these expenses are essential for running my business but I would definitely spend money on a Blackberry and internet if I didn’t have a company. These are small rewards we are getting for our efforts.

Since I don’t count on my online income right now, I don’t really mind if one month I’m a little short. In fact, since we have massively increased our expenses, we only went negative during the month of July 2011. This is a great liberty as, in the end, if I make more money, I’ll just spend it on creating another project!

I think it’s a key factor in our success; we don’t really care about money at this point. That sounds a bit odd from people publishing their income report, right? In all honesty, I don’t really mind if I have a good month or a bad month. The fact that I report my income on a monthly basis increases the level of accountability I have towards my company and towards you. On top of that, it helps using an hour per month to see how things are going. To look at what went well and what requires improvement.

#2 I reinvest every single penny in my company

As I just mentioned, we have made the decision to reinvest each dollar within our company. My ultimate goal with my company is to see how big it can become. So am I going to stop buying or creating websites one day? I guess I will… but this won’t be tomorrow! We first spend money on our servers and security (I have a full article explaining everything about hosting services in a draft so send me all your questions regarding this topic and I’ll cover them!). Then, we hired some writers (for reasons described in #3). But when we decided to hire Virtual Assistants, we were going to play on a totally different level.

We now have the resources to go above and beyond our regular business. In the past 12 months, we were able to launch 2 books, several niche websites and are about to launch a few bigger sites in the upcoming months. Most of them will be related to investment topics because:

#1 this is what we like best

#2 people who are interested in investing are also interested in spending a few bucks to help them make money from their investments!

#3 Time is more valuable than anything

The main reason why I spend so much within my company is definitely because I don’t want to end-up working 25-30 hours per week on my online company while I work an additional 30 hours a week at my day job (+ transportation!). I value quality time with my wife, family and friends more than anything else. Therefore, if I can pay people to write on my sites instead of writing, I’ll do it. I want to keep my baby (TFB and The Dividend Guy Blog) but as for the rest, I’m trying to find interesting writers.

The key in finding a good writer is that you need to find someone with a specific tone. Someone that is original and that will be passionate about a specific topic. I’ve found some great writers among the blogosphere`

MD who blogs on Studenomics,

Laura who used to own Green Panda Treehouse and now authors Couple Money

Chris, previous owner of Broker Professionals

Kristina who’s a writer on Dinks Finance (Thx to J Money who sent me her contact info!)

As you can see, I’ve found my writers amongst previous or actual blog owners. They know what is required to write on a regular basis and are familiar with the blog industry. I liked them before and they bring personality to their posts and to me, this is the most important thing.

Technically, if I wanted to fire all of them, I could do it and write all the articles myself. That would be a big mistake for 3 reasons:

#1 They are amazing writers so why try to write great stuff when they do it already!

#2 I would have to take several hours away from my week to write these articles… I would still rather go play soccer with my son and watch my daughter dance ballet

#3 It would prevent me from managing my empire and looking at the big picture!

What’s the True Cost of my Operations?

If you are really curious about the real cost of operation (e.g. keeping my site as is and growing within these sites instead of diversifying my empire), I am showing them right now. I am taking this info from my original post about cost of running my business but cutting down what is being used for growth and what is really required to keep my business as is.

Accounting: $3,200

Regardless if I’m making 30K or 300K, my accounting costs will be similar. This includes book keeping (this is why I’m so bad at keeping track of my expenses!), tax reporting and producing financial statements.

Writing/Editing: $9,800

This is for writing articles on all my sites + correcting my articles so I don’t sound like a French guy

Banking & Interest Fees: $6,000

We still have a pretty decent business loan and this is why we are paying so much in interest. But that’s all right since we are making more money with the site we bought than the interest being charged 

Hosting and domain renewals: $1,500

Here again, nothing can be cut as keeping our domains is an absolute must for our  business!

Life Insurance: $1,200

This ensures that my wife will get what the company’s worth if I ever pass away. This is also the main reason why I put the value of my shares in my net worth statement; it’s because we have a potential buyer if I die : my partner will have enough cash to buy them!

Telecommunications: $7,000

This is the very basic of our company. Without cable, internet and cel, we don’t have a business!

So my true cost of operations is more like $28,700 per year and not 67K…

In fact, by dropping my cost to less than $2,400 per month, I could still run my company with 10 hours per week. The problem is that I would have to cut my 2 VAs, investment in software and promotions. My 2 VAs are a tremendous help in the creation of new websites and products. However, in order to keep my company as is I would not need them.

My main goal is to create enough “money making machines” that my VAs will take care of them while we will be making 15K… 20k… or even 25K per month! In the past 12 months, I have built the structure I need to grow my business to over 250K annually with the SAME COST. This is why I don’t care about how much it costs me to run my business today .

Do you have any questions? Do you find that I’m spending too much money for nothing?

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Last week, I read a very interesting post by Sunil at Money Extra Blog asking if you would rather spend an extra hour on your profession or on your side business. I found this debate quite interesting as there is a huge discrepancy between what people say and actually do. It’s easy to say that you would spend an extra hour on your day job to increase your chances of getting a promotion but what are you going to do with this hour? The same rationale applies if you decide to use this hour wisely to work on your side business. So tell me:

What would you do with an extra hour?

I really want to know what you would do and am even more curious about what you are doing right now? Have you taken any steps to free up some time in your schedule? What are you doing with this precious time that you have cleverly wrestled away from one of those time eaters we encounter during a typical day?

I’ll tell you what I did during the last 2 years with not one extra hour but one extra DAY working on my side business!

Back in July 2009, I announced that I was working 4 days a week at my day job so I could have more time to hustle for my business. Now, 2 years later, I can tell you that it was the best decision I have ever made in terms of my personal finances.

Where I went before working 1 day a week on my side business

2 years ago, our online empire wasn’t that big. In fact, it was limited to:

The Financial Blogger

Intelligent Speculator

Gather Little By Little (which is no longer part of our empire)

And that’s about it. We were making roughly $4,000 per month from these 3 sites but it wasn’t enough to justify that we should work more than 10 hours each on the company. It was slowly growing and was easily managed. This is when you need to be cautious.

Cautious of falling into your comfort bubble and never escaping it

But we weren’t like that. Since we had several projects in mind, we decided that I could start working 1 day per week (which is 6 hours more) to work on these projects. That was really the key; when I worked during these 6 hours, I:

- Don’t write posts

- Barely answer regular email

- Don’t work on our main sites (unless for special projects)

- Therefore, I don’t do regular stuff

The key, when you are about to use an extra hour on your side business, is to direct your work towards CREATING VALUE

If you use an extra hour to write an article or to answer email, you won’t see much improvement. However, if you use this extra hour to:

- Work on the outline of a new site

- Look for private advertisers

- Create a group project with other bloggers (that will eventually drive traffic and new readers)

- Work on a product

- Think about your long term strategy

This is how you will create value and see amazing results. You want proof? Here we go:

In the past 2 years, with only an additional 6 hours per week (and counting 5 weeks of vacation ), we went from an average of 4K/month to an average of $8,000 to $9,000 per month this year. On top of this, we have diversified our income through a dozen websites and now count 5 major sites in our company. We now have 2 ebooks (Dividend Investing & Escaping the Rat Race) and are presently working on developing 3 other niche websites (which will be bigger sites than our current niche websites) along with 4 book projects on the table (the sequels to Dividend Investing & Escaping the Rat Race).

Would I have tripled my day job income with 6 hours more at work?

What would have happened if I had taken these 6 hours and put them into my profession? Would I have been able to earn a sustainable income out of it? I think the answer is pretty obvious: working longer hours at work will at best give you small benefits (such as a bigger bonus or at best a promotion) but it will never scale over time.

The best case scenario would lead you to a better job, earning perhaps 10% more income… and probably requiring you to work more hours . In comparison, I don’t work more on my online company but my gross income has tripled. It is true that I had to hire 2 VAs and more writers, but it was also with the purpose of creating a team that will be able to handle the growth over time. With our current team, I know that we can handle double the work we have on our plate right now, without increasing our cost… and without having me or my partner working more than 10 hours per week (+ my 6 hours ).

In the end, it’s not how many extra hours you are able to find in your week to work on your side projects, it is what you do with them . Try to outsource all admin work and focus on value creating activities.

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At the beginning of the week there was a guest post published here talking about why people fail at making money online. The author felt that most people fail with their online ventures due to: lack of focus, not enough action, laziness, and giving up too quickly.

All of these are great points that are spot on. After reading the article I decided that I wanted to share some more reasons with you guys on why people fail at making money online. I wanted to share a few mistakes I’ve made over the years when it comes to making money online that many of you can likely relate to…

Goals are not clear.

What are your goals? How do you plan on making money on the internet? I always thought that setting goals was just a general plan for your future. Now I realize that setting goals is about figuring out your direction and how you want to get to your next destination.

My goals were not clear because I was never sure if I wanted to monetize my blog first or focus on attracting readers. Instead I tried to do both at the same time. Most rookie internet entrepreneurs will jump into random ventures without any clear goals. What are your goals?

Chasing the money.

Are you chasing the money too much? I often found myself chasing the money when I should have focused my energy on pumping out epic content. Chasing the bucks is too time consuming and distracting when you first get started. Worrying about making money right off the bat can also lead to burnout. If you don’t enjoy working on your new projects for free, you’re definitely going to be disappointed when you find out that it takes a long time to start making some real money.

Working online you’ll have many slow months and points where you feel like giving up. If you’re only in it for the money you’ll easily find yourself giving up during these down times. Don’t let this happen to you.

Working on stuff that doesn’t matter.

Are you working on random things? Do you check your stats far too often? We’re all guilty at one point or another of working on things that that just don’t matter. Many of us have wasted time at work or in real life with activities that do much besides kill time. Working online is not any different. We all start off by working on the things that don’t make much of an impact at all.

Checking stats, looking over Adsense, responding to spam emails, or going through Twitter for hours  is a waste of time. If we have more “busy” time than productive time we won’t see our online ventures take off past a certain level.

Doing too much at once.

While trying to write this post I did like 17 other tasks by the time I was complete. Yes I still try to do too much at once. It’s cool to do maybe two things max at the same time but anything more than that and your focus is diluted.

My only humble suggestion is that you try to spend an hour a day of totally-focused and distraction-free time where you work on doing work that really matters. After that you can get back to multi-tasking.

Those are mistakes that I’ve made. Some of the items mentioned are mistakes that I’m still making. Hopefully you guys will learn from them or at least notice that you’re making certain mistakes. The good news is that these are very minor mistakes that can be improved on easily.

“A wise man should have money in his head, but not in his heart.” – Jonathan Swift

Ask the readers– what are some of the mistakes that you made when it comes to making money online? What changes did you implement when you realized you were making these mistakes?

(photo credit: inhisgrace )

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This is a guest post by Mike Collins.  Mike writes about all things money at SavingMoneyToday.net and MoneyMattersGuy.com

As the economy continues to go up and down like some never-ending rollercoaster, more and more people are looking to the internet as a way to earn a living.  They hear tales of bloggers who earn enough to quit their day jobs and work from home in their pajamas and figure they can do the same.  But most of them will fall flat on their face and never even make a penny on the internet.

I built my first website way back in 2004, so I’ve been around long enough to see many would-be entrepreneurs call it quits.  In my experience there are 4 major factors that keep them from being a success.

They’re lazy.  Most people think making online is easy.  They assume they can just write a couple of articles, click a few links, and the money will come pouring in.  But if that was true, don’t you think everyone would be doing it?

Sorry to break it to you but an online business is like any other business.  It takes a lot of work to get off the ground and build a steady flow of income.  If you think you can get rich overnight…you will fail.

They never take action.  I can’t tell you how many people I’ve met online who suffer from “analysis paralysis.”  They spend countless hours in forums looking for the perfect money-making formula.  They download every how-to ebook they can find and obsess over the smallest of details.  They spend all their time analyzing and in the end they never actually do a thing.

Now I’m not saying you should just run off without a plan.  That won’t get you very far either.  But at some point you’ve got to actually get started.  You’ll never get anywhere if you don’t take that first step.

They lack focus.  I fell under this category for a very long time…several years in fact.  You see, there are so many different ways to make money online, and I always had a million different ideas running through my head.  I’d start working on one project and then before I even finished I’d be getting sidetracked and start working on something else.  What I ended up with was about a dozen or so unfinished sites.  Some were earning a few bucks here and there but none were anywhere near their potential.

It wasn’t until I started to focus on one thing at a time that my income began to grow consistently.  If that sounds familiar to you try scaling back a little.  Identify which direction you really want to go in and start focusing all of your energy there.  You can always branch out in other directions later.

They give up too soon.  This is the one that really drives me nuts because I’ve seen it happen so many times.  When they first launch their site they are full of enthusiasm, but it quickly fades away when the traffic and revenue isn’t there right out of the gate.  Within a few months they are gone.

But what they don’t realize is that success may have been just around the corner.  It takes time for a new site to be found and get ranked by the search engines.   If they had just stuck with it a little longer they might have gotten a boost in traffic and income, and that would have encouraged them to keep building and growing their business.

Comments From TFB:

After reading

this post from the “other” Mike I can only highlight that it takes a lot of time to make some serious money online. To be honest, several bloggers will be able to make a few hundreds per month through selling links within a few months of existence. Then, they think they have become some sort of dot com mogul. However, this business model can’t scale and it is very limited in term of income potential (unless you have tons of sites!).

Therefore, if you really want to success with your online business, you need to be patient and to hustle for several years. Money comes with traffic and traffic comes with hard work, quality content and time! as I’ve mentioned in my 7 things people don’t tell you before writing a ebook, succeeding in the blogging world is not that easy. This is why lazy people, people won’t don’t focus on the right things or even worst, don’t take any action will eventually quit their great project that was not executed the right way.

image credit

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