Tag Archives: income

Would You Rather Have One-Time or Passive Income?

I love my fellow personal finance bloggers and I think many have some really brilliant ideas, but the one that has annoyed me most recently is the idea that passive income is the ultimate goal of the personal finance community.

For some people, it’s a great goal. If you have enough money, you can invest and set your finances on auto-pilot and never work again. The only problem is that you must be very wealthy to earn a lot from passive investing, so most bloggers aren’t talking about this route.

Rather, they’re talking about setting up small online businesses that bring in small amounts of money each month. If they can set up 10 websites to earn $100 each, that’s $1,000/month in extra income. Sounds great, right?

The problem with this thinking is that it’s rarely easy to earn $100/month and it takes a lot of time and effort just to get there. There is also a lot a lot of maintenance that goes into a website. I know that even when I was making about $4/month from blogging I was spending several hours a day trying to build the site and my online reputation.

I’m a fan of dreaming big, I have no problem with people setting goals, even if they’re unrealistic. However, I think people have taken the idea of passive income too far. It’s a great goal, but why aim for passive income online when you can cash out and take a big lump sum now?

The problem with passive income online is that nothing lasts forever. You may have a sweet website that gets a lot of hits, but if you’re not maintaining it, it will eventually get less traffic and earn you less money when someone else decides to challenge you for a specific search term.

A lot of people aren’t opposed to selling advertising space on their site or taking some private advertising opportunities, but when they think about it, they don’t want to risk stifling their site and being banned by Google. Um, you’re making $50/month now, why not grab an easy $5,000 and hope for the best? Even more, you can use a factoring service like CBAC Funding LLC that does all the work for you so you can focus on what you do best: making money. While some sites get banned after a short gain, many more have earned 5 figures knowing that if and when the ride comes to the end, they’ll have done pretty well for themselves.

Why try to earn $100/month forever (or however long a website brings in cash for) when you can take $5,000 right now? Doesn’t it seem like a no-brainer? It would take 50 months (over 4 years!) just to break even, and who knows, maybe there will be enough private advertising opportunities to make $10,000, $20,000 or more over the same time period?

Readers, do personal finance bloggers have an unhealthy obsessions with creating passive income? Are they missing the big picture?

Secure Your Future by Developing Multiple Streams of Income

If you are like most people, you work hard at your day job. Maybe you used to make what you considered a good salary, but now, with the economy, your income seems to be dwindling. Perhaps you haven’t gotten a raise in several years, or if you have gotten a raise, you simultaneously face an increase in health insurance premiums, negating your raise. Then, there are the increased gas and groceries prices which are costing more of your paycheck. To make matters worse, your employer may ask you to work more hours than ever before and also assume other work that wasn’t previously part of your job.

Sound familiar?

In this kind of environment, you may think it is wise to develop alternative streams of income, and I couldn’t agree more. The more income streams you create, the more money you are able to generate and the more secure your finances become. If you lose one source of income, there are several other streams of income from which you can draw.

The Internet has made it much easier for people to develop additional income streams. There are so many ideas you could choose from. You could choose to blog, become a freelance writer, be a virtual assistant, or create an online store.

Of those choices, the one that is the most passive is an online store. Decide what you want to sell, find your product, set up the website, chose a secure method to offer for payment (there are many merchant account processing businesses to choose from), and launch your store.

Of course, it is not as easy as that. You will need to market your business and advertise, and you will also need to handle customer orders and complaints as well as keep inventory. However, you can make your online store more passive by selling your own ebooks, for example. Then, you don’t have to worry about keeping up with inventory. Sure, you invest your time in the beginning when you write and produce the ebooks, but once you have marketed them, you can find that you sell copies and make money while you sleep!

The current economy has made it difficult for many people to get ahead. Now is the time to take steps to change that. Decide what is the best way for you to create multiple streams of income. You will feel much more secure knowing that you are not solely relying on your employer and his decision to give you a raise or not; you have also created your own income sources.

2012 Goals: 1st Quarter Update

In order to stay on top of my goals and remind myself where I’m going, I am revisiting my 2012 goals and taking a look at my progress so far.

1. Start Two New Side Ventures

My scary business venture is still pending (I’ve been really slow with this, but it’s not looking good), while I still have no plans for my second one. Time will tell if I succeed, but I’d have to say I’m not ahead of schedule, if there was one. In this quarter, I’ll find out if my idea will sink or swim. Did I say they had to be successful business ventures?

2. Double My Side Income from 2011

This was a pretty lofty goal, so while I consider 2012 to be going really well so far, that 100% gain seems like it may be a reach. This includes all side income, not just blog related activities, and so far I’m on pace to grow by about 35%. That’s not bad (it’s actually really good!), but far from the ultimate goal. Still, if I compared the first quarter of this year to last, my year over year increase is over 100%, so this one is still TBD. There are too many variables at play and things could change in a hurry.

3. Save 60% of My Post-Tax Income

I figured with having to actually pay rent and furnish an apartment from scratch, this would prove difficult, but for the first three months of the year, I’m actually crushing this goal. So far, I’m at 70%! That’s really crazy, and I take a lot of pride in that. I do have several projected large costs this quarter. I started paying rent in March, and I also have most of an apartment to furnish. Also, did I mention that I’ll be getting married in June? There are some wedding related expenses that are going to be due.

4. Double My Net Worth

I sort of forgot about some money I had in an account not linked in my Mint, so…the bar is set even higher than I expected. Still, I’m up 34% so far. Of course, I’ll be taking a big step backwards (back into negative territory) when I get married as I’ll be including some additional student loan debt. I am also including the $2,500 tax refund I received in February, so that definitely helps.

This one will be a struggle, but it’s definitely encouraging to see my net worth growing based on the things I can control. The things I can’t control will push me back, but I battle on and hopefully my first three goals will contribute to making this last one a success.

How are you doing on your yearly goals? What do you think of mine?