March 20, 2012, 5:00 am

The Holy Grail of Blogging: Passive Income

by: The Financial Blogger    Category: Alternative Income,Business,Make Money Online
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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:

holy grail 1

 

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

 

holy grail 2

 

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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Comments

Mike. Great post. Question: Do you think outsourcing your content would not make your blog personal? Thanks.

by: The Financial Blogger | March 20th, 2012 (6:07 am)

It depends what you outsource and to whom ;-).

For example, TFB is my own personal blog. I write on it 3 times a week but I also include 1 article by MD. Since he has a great writing style and the tone if often similar to mine, it fits perfectly with TFB style.

I took all of last summer off for personal reasons and my income managed to grow a little. It can definitely be passive even without paying a VA to do work for you. Not forever, but for a while at least. Well, I take that back. Some niche sites can be truly passive. I haven’t updated my Spanish learning site in almost 3 years and it still earns steadily. I think it’s difficult to tell which sites will be passive or not without just trying it and waiting.

There are tons and tons of bloggers out there that believe blogging is impossible to be formed into passive income. Sure, it does take the initial work to create the blog, but any type of business venture requires start up work. And we all know that being an entrepreneur and creating businesses is the best way to create passive income, so why wouldn’t be possible with a blog?

I completely agree with you that I would much rather slightly cut into my income, to make it completely passive. For the fact that time is money and I can focus on creating other assets.

I’m not sure if this is my first post here or not but first, mad respect. You inspired me to go out and buy a few sites on flippa and so far it’s been going pretty well, though I’m still new to the game. So thanks for that.

This all sounds great but does your business run itself? If you went on vacation for a year, would you make the same or more money than before? That is passive income. Everything else is somewhere between earned income and passive income. This is just my opinion, anyway. Still, keep up the good work! You’re blog is very inspiring to me.

by: The Financial Blogger | March 20th, 2012 (5:46 pm)

@Kyle,
I’m pretty sure I could let some of my blog without any update and still make money for the next 3 years. You are right that it’s difficult to know which site won’t require any input though.

@Kody,
You said it right: the key is to consider your blog as a business not another daily task!

@Dollar D,
thx for your kind word!

Actually, if I’d go on vacation for a year, I could probably limit my work to 5 hours/week and make pretty much the same income. It’s not totally passive, but 5 hours a week is pretty close to it ;-).

Technically, nothing can be considered as 100% passive income except royalties 😉

Mike, I’ve got a small holy grail thanks to the early retirement post you read on my site of recurring income where I do nothing. Nada, zippo. Itself it’s enough to retire, even though you say it’s impossible, excluding day job income, online income, and rental income.

Just keep saving 55%+ of your after tax income for the next 10 years and pay off all your debts, and you will get there Mike!

[…] business activities can become more passive if you can find ways to take yourself out of the picture. This is like the difference between using a property manager and managing it yourself. You make […]

Another insightful post, thanks TFB! The information you provide here is invaluable to any new bloggers operating on the myth that you can easily make money online just by showing up.

The challenge then is how to maintain high quality content through the years. After a year of hard work, it will pay off, if the blog has clear plans. That’s it.

I have a nice passive income stream built up at Suite101 with approximately 400 articles as my base, but I am only at about 25 total posts on my two blogs, so I have a ways to go. I also wrote an e-book on SEO tips specifically for Suite101 writers that I released early last year just before Panda 1, and it did quite well in the little window I had to sell it before Pandas were everywhere. 😉

I’ve been enjoying absorbing all of your excellent advice on alternate revenue streams…so glad I found our blog! (through Yakezie, btw).

Even if blog income is less than 100% passive it is still good. Any income can be put into a savings account and so gain money via interest.

Very interesting and useful article. You seem to really have found the holy grail of blogging to make passive income. Thanks for sharing your strategies.