My Blog and Passive Income Experiments Update [August '10]
First of all, sorry for the delay on this month’s update post – I realize we’re already 10 days into September!
With August in the books, it’s time to recap how well I did in my quest for online passive income this past month. As a CPA/tax consultant, August is typically a very busy work month, because most extended tax returns (for partnerships and corporations) are due September 15th. Therefore, this past month I spent the least amount of time on my passive income projects since I began tracking my progress a few months ago.
Here’s the crazy thing though: This was my best month to date. I spent hardly any time on my projects, yet the power of passive income made it possible for my earnings to grow without additional work. Unfortunately, “not doing work” isn’t a sustainable way to grow. I’m going to need to work hard if I want continued growth (and work really hard if I want to accelerate that growth).
In case you haven’t been following this blog for long, I originally focused my monthly reports on my passive income income status only, but I’ve broadened the scope to include anything related to this blog. While I’m certainly not making enough money to quit my day job, I think people generally enjoy reading about others’ success and failure, so I’ve decided to share this information.
Let’s see what happened in August…
In August, I was faced with a bit of a downturn in my Lending Club portfolio performance due to having a loan default for the second time. Based on the statistics I posted in my recent write-up, I’ve been unluckier than the average Lending Club investor. The loan that defaulted was one of my riskier loans where I was earning around 12% (B grade), so it goes to show you that you take on more risk with the higher interest rate loans. Even so, the average default rate for this type of loan is only 3.31% (so I was very unlucky!).
With that in mind, my overall performance is still quite good when compared to other types of investments I could have my money in. As of the end of August, I was invested in 63 loans (+5 from July) and my net annualized return was 6.13% (-2.01% from July). As I do each month, let’s see how this stacks up against CDs (certificates of deposit). Due to the 3-year term of most Lending Club notes, I think it makes most sense to compare Lending Club loans to CDs.
Source: Bankrate.com (9/8/10)
As expected, my current interest rate at Lending Club is still quite a bit higher than that of any CD investment. It’s important to keep in mind that Lending Club loans are certainly more risky than these CDs, which have virtually no risk. However, I strongly believe that the additional risk is more than compensated for by the higher rate of return. Here are some other images from my Lending Club account summary that show my performance compared to other Lending Club investors:
I’m currently performing worse than investors who have a similar portfolio to mine (6.13% vs 7.90% shown in the first image above). Compared to ALL investors, however, I’m doing quite a bit worse (6.13% vs. 9.66% in the third image), and my rate is worse than 82% of all investors. I’ve been investing with Lending Club for almost 2 years now, and aside from a couple bad loans, the experience has been great. I expect to see my net annualized return get back up to the 7-8% range it was in for a long time.
If you’re interested in trying Lending Club, you can still sign up with this link and get a free $25 just for opening the account (no deposit needed, but you must use that link in order to get the $25). With that money, you can test out investing in a loan (since you can invest in increments as small as $25). I’ve gotten questions about whether Lending Club allows non-US investors – unfortunately at this time, they do not.
Info Barrel Earnings Challenge
The lack of focus on my “internet work” probably hit this challenge worse than any other of my other passive income experiments. If you recall, my original challenge was to write an average of 3 articles per day for an entire year, with the goal of earning $2,000 per month a year from now. While I still believe I will hit the $2,000/month mark eventually, I’m beginning to think it will take me longer than a year.
At the end of July, I was on a good pace (granted, it had only been 13 days). As of the end of August, 44 days into the challenge, I have written 77 articles (+37 from last month), but my average number of articles has dipped to 1.75 per day (-1.33 from last month).
For August, here are my Google Adsense statistics for Info Barrel. Note that I am including statistics from Snipsly, one of the backlinking sites that I use for Info Barrel, that also shares ad revenue:
In August, I earned a total of $11.64 for my Info Barrel articles (+$3.52 from July). While this isn’t all that impressive, it’s an improvement over last month, and I expect each month to only get better.
This is where I really saw improvements this month, and it’s especially exciting because I did literally no work on any of my niche sites.
Because these earnings are relatively minor, I don’t think it’s necessary yet for me to go into detail about where each dollar comes from. Some of this comes from niche sites, while others come from affiliate links within this blog. I’m a big fan of affiliate income because you’re really just getting paid for helping people find products and services that they want or need. I’m not an affiliate for any product that I don’t believe in (i.e. I refuse to sell anything shady), so I can feel pretty good about this income.
Affiliate Earnings for August: $351.51 (+$131.18 from July)
By the end of the year, I’d love to have this amount at $500 per month.
These were my top 5 most popular blog posts in August based on number of views:
I think part of the reason I’ve been quite unproductive from an online passive income perspective is that my goals are very broad and long-term. Yes, I’d love to write 3 articles a day and make $2,000 per month from them in a year. I’d love to create a portfolio of 10 niche sites. These are all great long-term goals.
The problem is, going day to day, I don’t have a grasp on the short-term nature of these goals. I come home from a long day at work and I know there are 15 different things I should be doing. The magnitude of my to-do list is sometimes so overwhelming, that I can’t find a way to accomplish anything on the list. It’s paralyzing.
Therefore, I’m going to set simple, achievable monthly goals within my monthly reports (starting with this post). Throw your long-term goals out of the window, or at least, put them in the back seat. It’s time to take baby steps first.
1) Write 45 articles for InfoBarrel
2) Finish creating other niche blog (this one’s in a super competitive niche, and I’ll hopefully reveal this by the end of the month)
3) Write 5 pages of eBook
4) Write one guest post
5) Get the Motivation Vault up and running
These goals are modest, so hopefully I can surpass them easily. While it’s good (and recommended) to have your long-term “stretch” goals, you also need to have some easier ones to keep you motivated. Because September is still partially a very busy work month for me, I’ll be happy if I can achieve the above goals.
Until next month, best of luck to you and your passive income experiments!
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