On Monday, I published my highest grossing monthly income report ever. Although I did gross $41.634.24 in April, it obviously came with some expenses, which I'd like to share with you today.
As my business grows, so does the amount of money I invest each month. I don't spend just to spend though—these are expenses that I incur as I continue to expand, grow and experiment with new passive income streams online. I actually save most of what is left over.
Before I get into the numbers, I'd like to mention two things:
First, I'd like to break my expense report into two categories: money invested and time invested. Both are important “expenses” to realize in ones business, especially online. If you're making 40k a month, but you work 20 hours a day 7 days a week—then that's not very good (well, that's subjective, but you get the point).
Secondly, when I first started doing business online, my monetary expenses were virtually nothing. I have a lot more expenses now that I have several businesses running, multiple hosting packages, a virtual assistant/programmer, etc., but don't think that all of the things I list below are absolutely necessary to begin your online ventures.
All I started out with was a domain and hosting package from Bluehost, a free theme and some knowledge and time to create content. [Full Disclosure: As an affiliate, I receive compensation if you purchase through this link.]
Okay, let's get into the numbers:
For the purposes of this expense report, annual fees and costs are prorated (for example, if a service costs $120 a year, I will input $10.00)
Full Disclosure: Some of the items in the list below are affiliate links, which means that if you choose to make a purchase through that link, I will earn a commission. This commission comes at no additional cost to you. Please understand that I have experience with all of these companies, and I recommend them because they are helpful and useful, not because of the small commissions I make if you decide to buy something. Please do not spend any money on these products unless you feel you need them or that they will help you achieve your goals.
Note that these figures do not include taxes, which I pay quarterly.
Every month's monetary expenses are different, and actually looking at the numbers this is a relatively large amount, since I had some extra payments for research and writing in April which I usually don't have.
Now, let's move onto my time expenses.
April Time Expenses
GreenExamAcademy.com: 2 hours.
Yes, that's a total of 2 hours for the entire month, which was primarily spent answering customer emails.
eHow and InfoBarrel Articles: 0 hours.
I haven't spent an ounce of energy on eHow since December of 2008, and it still generates between $200-400 a month. This is probably the most passive form of income I generate, however unfortunately I cannot invest any more time with eHow because the Writer's Compensation Program is closed. This is why I recommend trying InfoBarrel instead for article revenue sharing. I have not contributed much to InfoBarrel since I'm focusing on larger projects with a higher potential ROI, however I am seeing trickles of income from the 3 articles I have on there.
Editor's Note: The content regarding eHow and Infobarrel is no longer relevant. Please visit our Getting Started page, which we keep up to date with advice for getting started with earning money online. (Updated 10/2015)
SecurityGuardTrainingHQ.com Niche Site: 2 hours.
After hitting #1 in Google (as explained in detail here), I pretty much just stopped building content on this site and moved on to new niches. This is why there are only 11 of the 50 states available on the site currently (every state has different security guard training requirements), and why I hired someone in April to finish off the 39 remaining states for me. Time spent in April was for testing Adsense placement and finding hired help and getting this person up to speed on exactly what I wanted to see.
iPhone Applications: 1 hour.
We got a finished application from our developer and submitted it to Apple for review. Done.
Consulting: 10 Hours.
Consulting is obviously not a passive form of income, but it's something that I do enjoy and at a rate of $500 an hour it's definitely worth my time and effort. Plus, for the client I'm working with I 100% support what this company is trying to accomplish, which makes it even easier. The 10 hours were spent doing things like designing a website layout in Photoshop, designing a Facebook profile image and landing page, and delegating a lot of the actual “build” tasks to my programmer.
Coaching: 10 Hours.
Round two of our Niche Site Coaching course has just begun, and most of April was spent preparing for it – going over lesson plans, shooting new videos, editing action guides and getting to know our new students. Similar to consulting, it's definitely not a passive form of income, however it's probably one of the most rewarding experiences I've had online thus far.
The Smart Passive Income Blog: 40 hours.
THIS is where most of my time is spent in anything I am involved with online. I wrote 14 posts in April (including 2 podcast episode), and I average around 3 hours per post. Some took a lot less time, while others took up to 7 or 8 hours, such as my pillar article, The Ultimate Guide to Finding and Using Images For Your Blog. This is something I highly enjoy though (as you can see, I enjoy pretty much everything I do online…but shouldn't that always be the case?), so it doesn't even feel like work to me. I don't delegate a certain amount of time for blogging each month, I just know I post on Monday, Wednesday and Friday, and whatever I write, I write (or record), and I always try to make it useful and easy to consume. This blog is here for you, and it just so happens that the more I give away, the more I get back in return. I love it!
Responding to Emails and Comments: 20 hours.
I try to limit myself to spending no more than an hour a day responding to emails and comments on the blog. I sometimes “chunk it up”, meaning I won't respond for 3 of days, and then I'll spend 3 hours one day to catch up, which seems to be a little more productive for me, however as SPI gets more and more popular, so does my inbox, and to be honest it's getting a lot harder to stick to the 1 hour rule. Email is a major time-suck, and I'm currently working to try and manage my time better here. 20+ hours for emails just seems really high to me, especially when you look at how long I spend doing other things (and the fact that I could use that 20 hours elsewhere!), however I know it's important for me and the SPI brand to connect with people via email when possible. It has the greatest impact and leaves a long lasting impression, I believe, when I respond directly to emails. I think of it as an investment of my time. That said, if you've sent me an email and there's a delay in my response, now you know why. 🙂
Mastermind Groups: 8 hours.
Spending time with a number of like-minded folks collaborating, sharing ideas and giving each other constructive criticism has been the best use of my time, ever. I'm currently in 2 mastermind groups that meet once a week for 1 hour on Mondays. Totally worth it.
Social Media (Facebook and Twitter): 5 hours.
I typically average 10 casual minutes a day on Facebook and Twitter. Sometimes I'll get into long conversations with people that takes up more time, and other days I won't touch social media at all. It is important, however, to stay connected with fans and followers through social media, and at least check in every once and a while. I'm not hugely active on these platforms, but I am active and do respond when I need to.
Total Time in April: 98 Hours
Time Is Invested
It may seem like I work quite a bit of hours—especially for someone who speaks of earning a “passive income”—and it's true. I do. I work about as much as someone who works a part time job, although it's tough for me to explain sometimes because the money I earn is not a result of the number of hours I work within a given period of time—it's directly related to how smart I've worked in the past, or how well I have previously invested my time. And the work I'm doing presently is so that I can earn a passive income later.
Work hard now, reap benefits later. You've heard this before.
That's why I don't like the whole “hourly rate” thing for what I do, because it's not like that.
As you can see, I have a number of large income streams coming from sources that only require 1 to 2 hours a month. Looking at those separately, they are indeed a very passive form of income. It's when you include the work that I do here for the blog (which I consider to be “on the side”, although over time is has become the primary income source when you look at my entire online presence in whole), that it seems like I do work a lot. That said, part time for $38k is amazing and I can be here at home with my son while he grows up. I wouldn't trade it for anything in the world.
Like money, time can be invested now so one can see returns later. However, unlike money, once a minute goes by, you'll never see it again. You can always make more money—you can go broke and come back a millionaire if life puts you on that path, however with time once it's gone it's gone. Therefore, I feel that time should be used very wisely in your online business, and in anything you do in life.
Just some words of wisdom before I take off for the day.
Cheers, and I wish you all the best!