Passive Income Experiments Update [May ’10]

moneyCreating streams of passive income is something we’re all striving to accomplish.  After all, the idea that you can make money while you sleep is infinitely appealing, but it’s often much more easier said than done.  I have a few passive income experiments going on simultaneously right now, so I thought it would be a good idea to start giving a monthly update on everything.

Right now, my three passive income experiments consist of Lending Club, Squidoo, and autoblogging.  Overall, I think I’m doing okay, but it’s still far too early to make concrete conclusions.

Let’s dig into the details…

Lending Club

[Read my original write-up here]

After investing in 47 different loans, it was bound to happen – one of my riskier loans was “charged off,” meaning the lender defaulted on the loan and was unable to continue making payments.  I fully expected this to happen at some point – after all, a 10%+ interest rate would be astronomically high for such a large pool of loans.  The good news is, my overall interest rate (taking into account the charged off loan) is 7.5%, which is still really good in my opinion.  Let’s see how it compares to other investment alternatives (CDs, money market accounts, etc.):

Bank rate 5-1-10Source:

As you can see, my interest rate at Lending Club still blows these other alternatives out of the water. (Note: I grabbed these screen shots a few weeks ago, so these rates may be slightly different today, but not by much). It’s important to keep in mind that Lending Club loans are of course more risky than these CDs and other accounts listed above, which have virtually no risk.  Here are some other images from my Lending Club account summary that show my performance compared to other Lending Club investors:

Lending club 5-1-10Lending club 5-1-10 2

It looks like I’m doing a bit worse than investors who have a similar portfolio to mine (7.5% vs 8.09% shown in the first image above).  Compared to ALL investors, I’m doing quite a bit worse (7.5% vs. 9.64% in the third image), and my rate is worse than 79% of all investors.  This doesn’t make me feel good, but at least tells me that my results may improve as time passes.

If you’re still skeptical about Lending Club, they’ve done a lot recently to really legitimize themselves almost like a bank.  In the past month or two, they moved into a new building, and really seem to be growing fast.


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).  With that money, you can test out investing in a loan (since you can invest in increments as small as $25).


Squidoo Logo

[Read my original write-up here]

It would be fair for me to say that I’ve somewhat given up on Squidoo, at least temporarily.  I still believe that there are people who can earn a reasonable monthly income from Squidoo, but it’s very difficult.  My biggest problem has been the lack of free time to dedicate to writing articles for Squidoo.  Between this blog, my newsletter, other small ventures that I’m working on, AND my 9 to 5 job, free time to allocate to Squidoo has been extremely limited.  With that said, I’ve written about 15 “lenses” (articles) that receive a few visits per week, but the traffic and ranking for the articles haven’t been strong enough for me to actually earn anything yet.

So far, my strategy (and this is one reason I think I haven’t been too successful) has been to write “hit and run” articles which are fairly quick to produce.  They’re short and to the point, which is why they probably lack the depth needed to be successful.  Here are a few examples of ones I’ve written more recently:

How to Microwave a Baked Potato

How to Get Cash for Books

Baseball Bloopers

Again, I’m not giving up on article writing, but I think when I have some down time with everything else I’m doing (when is that going to happen?) I’m going to explore some other article websites and see if they seem to have more potential than Squidoo.


Autoblogging Software

About a month ago, I purchased a piece of autoblogging software that basically allows you to create blogs and have them automatically populated with content.

I started off cautiously optimistic, to say the least.  My plan of attack has changed slightly, but I’m still hopeful.  Originally, I wanted to create 1 blog a day for 30 days, and then evaluate how everything went.  What I began to realize was that, although 1 blog per day was completely doable, it wasn’t a smart approach.  Instead, I created 16 autoblogs and decided to stop creating them until these first 16 became sufficiently profitable.

As it turns out, I decided I need to do a bit more work for each autoblog in order to complete one primary objective: generate traffic to the blog.  This proved to be the most difficult task, especially across 16 autoblogs.

With that said, a few of my autoblogs are starting to receive reasonable traffic considering what little time I’ve put into to optimizing them for search engines (5-10 unique visits per day).  I’ve made a few dollars with AdSense, so at least things are moving, albeit slowly.

The main flaw I’m still seeing, as I explained in my original post about the autoblogging software, is that the quality of the content produced is poor.  It’s readable, but it’s nothing you would ever want to read.  Again, our goal isn’t to produce high quality content that people enjoy reading – it’s to capture search engine traffic with the hopes of the visitor exiting the site via an AdSense ad (or however else you choose to monetize the blog).

I still believe I can turn this into a decent source of passive income.  Now that the autoblogs are set up, I only spend 30 minutes a week updating the blogs (it’s as simple as running the software to pull content from all feeds, making some minor tweaks to the post titles, and clicking “Post to Blog”).

Until next month, best of luck to you on your passive income experiments!

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7 Responses to “Passive Income Experiments Update [May ’10]”

  1. Interresting writeup. About the quality of the articles for the autoblogs, you could always use spinners like contentboss for generating better quality articles…


    Eric G. Reply:

    Thanks Ronny. I’ve considered spinning, but decided that it would be way too time consuming to handle the large volume of posts that my 16 autoblogs generate.


  2. Hi Eric,

    This is a very interesting post. I’m not familiar with Lending Club, I don’t know if this restricted just to US investors or not? I will check it out. 7.5% sounds a good return to me.

    Your findings on Autoblogging are interesting. I can understand why you’d want to do this, but a friend of mine was telling me that Google closed down 80,000 adsense accounts recently because they ‘had no content’ and were purely designed to drive traffic.

    Just a thought.


    Eric G. Reply:

    Thanks for the comment, Matthew. I believe Lending Club is currently restricted to US investors only.

    I understand the concern with AdSense and have heard about similar issues with Google in general. I think these blogs would “fly under the radar” however because they contain actual, unique content. It’s really no different than a blogger who has poor English skills, and there is always a link back to the original post to credit the actual author.

    Also, in speaking with the developer, no one who uses his software has had issues with their AdSense account. Most people on the forum where he advertises the product seem to offer very positive feedback.

    With that said, I’m perfectly willing to shut down this project if I determine that it poses a threat to my AdSense account, or if I determine that it simply isn’t profitable enough to deal with.


  3. Squidoo can be tough. I don’t earn much from it per se, but it does drive traffic to my blog and my affiliate websites. I look at it more as a way to get more traffic for those activities. Cheers.


    Eric G. Reply:

    That’s a pretty good point, and I’ve heard a lot of people having success with using it as more of a place to drive traffic or build backlinks. As far as earnings go, I think InfoBarrel has much higher potential (and I hope to prove this with my InfoBarrel earnings challenge).



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    […] As the name implies, this site is all about building your optimal lifestyle, one filled with unlimited options. How do you have so many options, you may ask? Easy: Passive income! This blog is not associated with the official book. Rather, it’s run by Eric, a CPA at a big accounting firm. Eric discusses his personal quest to build passive income in his spare time. One of my favorite posts: Passive Income Experiments. […]

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