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
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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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Thanks for the transparency in sharing all of the details of your expenses. Very helpful.

The $600 per month seems fairly high, but I suppose with all of the troubles last year, it was necessary.

All the best,


Awesome outline Mike! It’s great that you are providing income for others on a monthly basis. Hope governments realize what small business owners do for folks and to keep taxes and red tape low!

I recently did all my taxes and I have to say, it was fun to do once i began, but it took me 2 months of procrastination to start. If you’ve got someone doing all that for you, then great.

May I ask what is the average length of post and quality, however you define it that your staff writer writes? Have you asked them to write meatier content given Google’s recent tweaks?

I am really interested as to where you found a quality VA? It sounds as if you use more than one, and if so, have you found it easy to delineate tasks to them? Are they paid hourly, or per task? Feel free to link to another one of your posts if you have already covered all of this somewhere else, I was just not able to find it!

Interesting reading Mike. Do you pay writers for number of words or per hour?

4% interest rate on debt is awesome, wish I could get that!

Hey Sam,

yeah, I don’t have the patience to do them. I rather put everything in an enveloppe and send it to my accountant 🙂

I don’t ask my writers to produce content according to Google’s rules. Since they change every 6 months, it would drive anybody crazy. I believe that interesting and useful articles are still the best thing we can write!


I pay writers per article. Each article as to be at least 500 words.

I’m glad we could restructure our corporate debts! we were paying 10% not so long ago! the funny part is that we are reimbursing the debt aggressively now that we have dropped the interest rate! we should have started to pay it back when it was 10%! hahaha!

by: The Financial Blogger | March 20th, 2013 (9:23 am)


it is relatively high but keep in mind that we have over 500,000 pages viewed per month. We also wanted to keep more than one servers in case we have to make a quick transfer during an attack. I guess our optimal cost will be around $500 but we won’t be able to go lower than that…


I’m currently preparing an article about VA’s, it should be live next week 🙂

Where do you source your writers from?

Thanks for this breakdown! I’m new to this world of blogging and it is really interesting to see how you breakdown all of your expenses and why they are distributed the way that they are.

Hey Dan,

I’ll be explaining this in my post on VA next week.



Thanks for the breakdown. Great details.

I think the total work hours per month is the most impressive stat for me….I assumed you’re working more hours than that. I’m probably working about 1-2 hours per day on my site, but I only have one site and definitely less revenue!


by: The Financial Blogger | March 21st, 2013 (5:54 am)

Hey Mark,

I swear I don’t work more than 10 hours a week. Remember; I have 3 kids to take care of 😉

[…] from The Financial Blogger presents Expenses Breakdown, How Can You Make Money without Working Hard, and says, “A total insider’s look at my blog-related […]

Being able to work a day job, have an extra income as a safety net and still be able to play with your children is an amazing opportunity and you are very lucky to have that chance. Starting your own business can be very intimidating with all the numbers you must balance and figure out, but it sounds like you are in great shape.

Wow, thats pretty awesome. Now that you have everything figure out and all squared away with various writers and VA’s you can pretty much have minimal hands on work to do and still allow yourself to earn a decent income. Really great advice from someone who clearly knows what they’re doing as an entrepreneur.

[…] Mike from The Financial Blogger shares his blogging business expenses. […]