March 30, 2013, 6:18 pm

Epic Link Time

by: MD    Category: Financial Rambling

I hope that you guys are enjoying your Easter and spending some time with family!

Let’s check out a few cool links from the past week or so…

The 38 Best Methods of Successful Exercisers @ Zen Habits.

Are you struggling to exercise? You need to check this piece out. Some super helpful tips from those that have managed to start exercising consistently.

The Ultimate Guide to Saving Money on Coffee @ PT Money.

I love my caffeine. It’s definitely worth reading about how money can be saved here.

Carnival of Personal Finance #403.

Carnival of Financial Independence, fourth edition.

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March 28, 2013, 6:00 am

What Do You Consider to be a Great Investment?

by: MD    Category: Alternative Income

“An investment in knowledge pays the best interest.” — Benjamin Franklin

What’s a good investment to you? What has to be involved in an opportunity for you to consider it a great investment?

Everyone’s always looking for a great investment. We work hard for our money. Why not let our money work for us? Many of my new readers or friends on Facebook will ask me about great investments and where they should be putting their money. I can never give a single answer because there’s so many factors involved. How much money are you willing to risk? What do you know? What are you into?

Today I wanted to look at the criteria involved in every investment.

What goes into a great investment?


“I will tell you how to become rich. Close the doors. Be fearful when others are greedy. Be greedy when others are fearful.” — Warren Buffett

How much do you have to risk? What’s the risk to reward ratio? Some investments have the opportunity to double your money or make you very wealthy, but they come with plenty of risk. Other investments come with almost no risk involved, but don’t yield you any decent results.

I take all sorts of risks in my personal and social life. I try to do outrageous things. I approach strangers. I go on trips alone. I say things I shouldn’t. When it comes to money, I’m very cautious. I know what it’s like to be poor and I don’t want to lose my money.

In my opinion, I want to take risks that I can control. I invest my money into myself and my skills because I know that I can control things to an extent. I got out of the stock market because I didn’t like the feeling of not being in control. But, that’s just me and many of you guys are making a killing on the stock market.


Will this investment come with any sort of experience?

The risk of spending four years (or more) in college and borrowing thousands of dollars for a piece of paper comes with an experience. You can live on your own for a few years. You can transition into adulthood. You can meet all sorts of interesting characters, meet your future life-partner, learn about yourself, and figure out what you want to do next.

Investing in stocks come with the experience on learning about the industry, studying market trends, and figuring out your own level of greed.

Every single investment comes with a unique experience. Is this experience worth it to you? I’ve spent thousands of dollars on trips that were considered an investment and yet I could never put a value on them because I learned so much and built valuable connections.


What can you get out of this chance?

Most investments come with a monetary reward. A college degree comes with the reward of earning the job that you wanted. Investing in stocks comes with the reward of the price appreciating and you earning a profit. Attending a conference comes with the prize of learning and accelerating your growth. You can see where I’m going with this.

What reward can you earn for this investment? Is it worth the risk to you?

The reward you get from college can be totally valuable to some and worthless to others. The reward of attending a conference can lead to one attendee growing their business while another attendee leaves frustrated. Rewards vary and are never 100% guaranteed.

Those are my random thoughts on investments. I’m sure that you guys have all sorts of exciting and perhaps sad stories of past investments. I just want you to think about the risk involved, the possible experiences, and the reward.

“I’m only rich because I know when I’m wrong…I basically have survived by recognizing my mistakes.” — George Soros

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March 23, 2013, 6:00 am

Epic Link Time

by: MD    Category: Financial Rambling

Welcome back! Another weekend is here and there’s still snow on the ground. What gives? You guys excited to see some sun for once?

What caught my eye the past week?

14 Tips For A Great Business Plan @ Expert Enough.

What’s that cheesy saying? If you fail to plan, you plan to fail. Well, it’s true. Without a plan, you won’t be able to keep track of what you’re doing and if you’re even on track at all.

3 Ways To Kill Your Debt @ Canadian Finance Blog.

Debt isn’t a sexy topic but it needs to be covered. This article goes over some practical ways to deal with your debt. Don’t let it build up.

The Carnival of Personal Finance #402: The Dr. Faustus Edition.

Don’t be shy to suggest your site…

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March 21, 2013, 6:00 am

Two Interesting Strategies For Making Money

by: MD    Category: Alternative Income

Friends always tell me about how they want to start a business or make money on their own, but they just don’t know where to start. They want the lifestyle and the money. They want the freedom. They just can’t figure out what to do first. Truth be told, getting started is the toughest part of any battle, from working out to dating. Once you get started and see some results, the momentum starts rolling and you’re on top of the world before you know it.

Do you need an amazing idea? Do you need venture capital? Do you need a cool logo? Who should you hire first? All sorts of random questions and excuses pop up.

On my little desk right now, I have my copy of The $100 Startup open. It’s actually open to the page about making money. The material is so awesome that I just can’t help but share it with you guys.

Chris Guillebeau presents two interesting strategies for deciding what to focus on when trying to make money:

  1. Latch on to a popular hobby, passion, or craze.
  2. Sell what people buy.

Which plan is better?

The first option is all about joining something that’s already popular. Your goal is to become an authority in this field or for this new craze. You learn everything that you can about it, get good, become an expert, and then pass on your knowledge. You can pass on your knowledge through coaching, information products, membership sites, or a simple niche site. However you do it, the goal is to become the best at something that has already caught on. You don’t have to start the craze. You just jump on board and take over!

In the second plan, you look for what people are buying and find a way to deliver this to them. You don’t have to look any further than Facebook or your own circle of friends.

What are your friends buying? What do you buy? What’s caught everyone’s interest?

These are questions that you can start off with to find out what people are buying and why. Then you can sell it to them.

What about following your passions?

You can be passionate and actually should be passionate about what you’re working on. You just shouldn’t stress about “following your passions” and other useless mantras.

The truth is that you should care about whatever problem you want to solve. I originally started online by covering student finances. I cared about this topic because I was a student trying to build wealth and avoid debt. I cared about it so much that I wanted to write my ideas down and share them with the whole world. I was also and still am willing to work for free on this topic.

In the case of these two ideas, you don’t have to worry about following your exact interests. You can find something that you’re sort of into or branch off into other hobbies. It’s better to make real money than to worry about passions.

Do you have to go full-time?

NOPE. I will always stress that you should never quit your job until you have real money coming in. A gut feeling doesn’t pay the bills. Sorry. I’ve covered this before, but I think it’s insane for anyone to quit a job with no backup plan. Why would you put yourself at risk like that? Why give up guaranteed money for a false dream?

The key takeaway from this article is that if you’re stuck on your next business idea, then you should consider joining a popular hobby or finding out what people are currently buying. You don’t have to reinvent the wheel. You just need to keep it spinning. You also don’t need to stress about following your passions 100% or quitting your job yet.

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March 20, 2013, 6:26 am

Expenses Breakdown, How Can You Make Money without Working Hard

by: The Financial Blogger    Category: Blog Evolution Report,Blogging,Business



Last week, Sam from Financial Samurai asked me about my cost structure. I’m known for spending a lot within my company and most readers think my cost structure is quite heavy. I can understand their point of view but I can also tell you that having a third kid last year made managing my schedule a little bit more complicated! We had to rely on our team to keep the company rolling and this is what happened. Here’s the most up to date expense breakdown:


Virtual Assistants & Writers – $2,065


The bulk of our expenses is related to VAs and writers. Since we own several blogs, it’s impossible for us to write for all of them. Over time, my partner and I concentrated on a few sites that we like and truly have a passion for it. Writing for TFB is never a pain; in fact, it’s more fun than it looks!


Several emails and advertising management are handled by my VAs. We also use them to write a few articles, publish and edit others. They truly save me a lot of time as I don’t have to look over their work on a weekly basis. I check a few tasks each month to make sure that we are on track and I leave the rest up to them to manage.


We recently cut back on our writer’s budget. The reason was simple: we wanted to make sure that each site was profitable. Each month, we track our revenues per site and include this data in an excel spreadsheet (another task done by my VA 😉 ). Then, it was easy for us to take the average revenue per site on a monthly basis taking the last 18 months as an average. Those who were too close to their cost structure got their number of posts diminished. Over time, we realized that most blogs don’t need 5 new articles weekly to drag traffic. It is sometimes too much to read for visitors anyways! We would rather write quality over quantity and will make the same revenues while spending less money.


Accounting & Banking Fees – $439


Accounting and banking fees are both pains we have to live with. I hate compiling ins and outs so I send all my statements once a month to my accountant and everything is being handled by them. I would probably have to waste a good 3-4 hours per month on that. So I guess it’s worth it! Within the banking fees, we also have a life insurance payment.


About a year ago, we took a permanent life insurance of $250,000 on both my partner’s and my life. In our shareholder agreement, we included that upon death, the $250K would be payable to the other partner so he could buy the deceased’s share. This was a great way to ensure that our work was 1) preserved for the other partner and 2) that our wives would get a benefit from this company.


Servers & Utilities – $1,259


The number here seems very high. We don’t spend $1,000 in servers. But we both have internet access, phone and other utilities linked to this spending account. This is why we end-up paying so much in servers & utilities. This is a way for us to benefit from the fact that we have a company at the same time since we don’t draw any income or dividend from it. We also include our $150/month Aweber subscription in there. Since having newsletters is now part of our core business, it’s a small fee generating a lot of money. Plus, it makes us more independent from Google!


We have done some major restructuration with our servers in 2012 in order to optimize our speed and service along with our cost structure (you can read about our servers’ adventures here). Our servers + domain renewal costs range around $600 per month now. We still have some cleaning up to do that should result in another saving of $50/month. This should be done in the upcoming months.


Total Operating Cost: $3,763/month


So our total operating cost per month is now below $4,000. I believe we have a very strong structure since we can easily grow our business without spending much money. The only spending account that could increase would be writers but this would also mean that our revenues would expand at the same time.


We currently average $8,000 in gross income per month since the latest Google EMD update. So after two major hits in 2012, we are still in line to make slightly over the psychological bar of $100K per year. So where does all our exceeding money go? I’ll let you guess…


Debt Servicing – $2,945/month


There is another important account in our budget: debt servicing! I mentioned last year that we are on an aggressive debt repayment plan. We used to be over $90K in debt and we are now down to $77K. We have restructured our debt to pay a smaller interest rate (we now pay 4%! Whoohoo!). Our goal is to pay off all our corporate debts within the next 24 to 30 months. Since the online economy is changing rapidly, we thought it would be a better idea to clean up our balance sheet while we are making money and stop leveraging for a while.


Borrowing to finance our growth was definitely the best strategy we used for a while. Now that it has become harder to growth (because of a lack of time doubled with internet uncertainty), we decided it was time to pay our debts back. In less than three years, we should have a company netting roughly $50,000 per year in profit. This is what I call free cash flow!


Total Work Hours: 40 hrs/month


The beauty of all this is not the 100K in revenues and definitely not the 45K of operating costs! The beauty is to make 25K each of net profit with less than 40 hours of work per month. This means that my hourly wage when I work on my blog is around $48/hours. This is not an astronomical number but considering that I can derive benefits from the company in addition to the $48/hours (such has having free internet and not having to pay for any computers!), I think it’s truly worth it!


The decision we made was to work less and earn less. However, we wanted to see our company grow while we are working at our day jobs. This is mainly the reason why we have decided to keep our cost structure higher. The idea behind it is also to build a safety net. If I was to lose my job tomorrow morning, I could fire all my writers and VA’s (which would suck!) and start working 40 hours for my company and keep a decent living from the income. This would give me enough time to turn around and make my company grow even faster.


If we would have kept only a few sites and would do everything by ourselves, we would surely have a cost structure of less than $1,000/month and netting over $7,000 each month. But we would also work a lot more than 10 hours a week! I still prefer playing with my kids than blogging, hahaha!

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