Today I want to talk about income reports.
I have been meaning to document my thoughts and feelings about the practice of publicly disclosing one’s income or earnings but just have not had the time. I am glad that I am finally getting around to it today.
Many of those who generate income online like to publish what is commonly known as an income report, which is often broken down by the particular product or service that generated the income. These have become so popular that they have propelled many blogs on the success trajectory.
I was debating whether to use the word hate or dislike in the title of this post. I chose dislike because hate is too strong of an expression. After all, many bloggers who I personally know, respect and admire publish income reports. Just as every coin has two sides to it, income reports have their benefits as well.
For example, honest income reports inspire, motivate and compel readers to take action. It gives them the confidence that IT can be done. On the other hand, constantly being exposed to such reports can paralyze readers from taking action, leaving them with the feeling that they are too behind, there is too much to do and that it is too late.
Then you have a totally different yet very realistic angle on income reports, one that exaggerates or flat out lies. This is the one that just kills. Sometimes it takes one bad apple to ruin the good ride for everyone else.
Not all that long ago, A List blogger Tyrone Shum released a public video confessing his misrepresentation of his income reports. He mentioned that the guilt was getting to him and that he couldn’t face his family and friends without coming out and confessing.
You can view his public apology here:
I guess the link to the original video has been removed, so I dug up the second closest I could find…
Needless to say the video went viral, and every other blogger, from A to Z list was talking about this public confession.
Why am I bringing this up? I am bringing this up because I was completely turned off by income reports after having viewed this video.
Now I don’t know Tyrone personally but he appears to be a good, like-able guy from what I can tell and what those who I know who know him tell me.
What this situation does reveal however is how easy it is or can be to get carried away in the moment. One dynamic of the industry we participate in is social proof. People want to listen to and follow those who have proven results. The space is too saturated and it takes an exceptional case to stand out. One way to do that is by boasting large income figures.
The pressure, or the desire to succeed sometimes overwhelms one’s sense of integrity. What happened in Tyrone’s situation can happen to anyone. It doesn’t change him from a nice guy to a bad one, but it certainly tarnishes his reputation. But like I said, his true character clearly showed later when he confessed publicly.
Do not take this action for granted. This is a very difficult thing to do, especially knowing that the public apology will be talked about everywhere, by everyone and will be accessible forever as long as the internet exists.
Tyrone could have very well kept going on and no one would ever have known. But no, he decided to come out clean. My respect for the guy today is more than ever before. But does this change my perception of income reports? No.
I have contemplated documenting income reports, but I’ve heard enough times now that “anyone can write about anything they want”, or that “anyone can claim to make a certain amount of money online”. Yes, that is true, and no one will ever know unless they decide to run for President someday – I cannot because I wasn’t born in the USA so you’d never know!
For that, and several other reasons, I chose not to publish income reports, although I know that doing so will certainly boost my blog’s traffic, readership, engagement and other things. My friend Pat Flynn does this remarkably well with his income reports, which are the most read content on his blog.
Pat’s one of the nicest guys I know on the blogosphere, and I’ve had people ask me in discussions whether his income reports are real. While I am 101% confident that they are simply because of the man Pat is, this point demonstrates the entire essence of this post – fact or fiction.
For me, I feel images demonstrating income proof are better. A picture does speak more than a thousand words. So in the few occasions where I have disclosed my income, I have done so by displaying images of checks, Paypal payments or direct deposits to my bank account. You can see an example of that here, here, and here.
That, in addition to a lot of open and revealing facts about my business can easily allow a reader of my blog to reasonably and accurately extrapolate how much income I generate online every month or year. So clearly, it is not that I don’t want people to know how much I am earning, rather, if I do disclose, I want to ensure that I am able to back it up and convey my results with full confidence.
I am not oblivious to why others publish income reports and more importantly why they do it the way they do it.
It takes time to snap a picture or screenshot and then upload it and write about it. I know because I do it. It may not sound that onerous, but for a busy blogger / entrepreneur, it is more time than they have to invest in this endeavor.
Documenting or typing results is much more convenient and less time consuming. Look at it this way – something is better than nothing. But if you start to generate thoughts in your subconscious regarding whether or not what’s being reported is true and accurate, just know that those thoughts will always be there. Heck, one can even embellish check images if they wanted to, so who’s to say that images are accurate?
The point here is that income reports should really be viewed as a source for inspiration and motivation. Sure, people might get carried away here and there, and others might be out there blatantly and deliberately lying, but what can you do? Absolutely nothing. Don’t attach yourself emotionally to income reports or you will end up broken-hearted and hurt.
I currently don’t publish income reports for several reasons, including the fact that my entities (businesses) are set up in a very complex manner, and it wouldn’t be easy or quick for me to segregate income from each site and the cost structure of my business. I certainly don’t want to report income without representing the cost of doing business to reflect true profitability. It’s only fair.
It’s a lot of work just thinking about it 🙂 but I know this initiative comes with tremendous benefits so I may slip over the tipping point in the future. I have however, and will continue to in the future, publish income updates haphazardly here and there. See the links above for example.
To conclude, income reports can be a double edged sword, both for publishers as well as the consumers of content. Like anything else is life, let’s continue to take inspiration and motivation from these. Let’s take the positive attributes of what we come across and try to implement those in our lives. This is really what my view boils down to.
On an interesting note (and you can now call me a hypocrite), I will be reporting on my authority site earnings, although I may not publish images unless a particular income stream becomes HUGE. If it does, I will be happy to snap up an image and attach it along. This way I would be able to document my income reports without feeling that I am being unfair – I reserve the right to renig if my workload becomes overwhelming 🙂
You can follow my authority site’s progress and income reports via the Authority Site Duel Portal here.
Are you in favor of income reports? Why or why not? Does skepticism linger in your subconscious as you digest them? Why or why not? Do you read income reports with full confidence, or do you take them in with a grain of salt?
Few weeks back I published my first ever income report that demonstrated 3 of my websites generating $23,596.88 in the month of June from various revenue streams within those sites. You can read that report here.
Interestingly enough, a couple emails followed within the very next week, attempting to extrapolate these results to my entire portfolio of websites and proposed that the numbers suggest that generate a total of $1,982,137.92 from my websites each year.
Interesting conclusion from deductive reasoning. Here is how it was arrived at.
Since I have over 20 websites (the assumption used was 21), and three of those generate $23,596.88 per month, it was suggested through simple division that each website generates $7,866 per month.
That number multiplied by 21 websites yields approximately $165,178 per month, or $1,982,137.92 in online revenues per year.
As you can imagine, it’s not that straight forward simple.
Below is an income snapshot generated by a set of 3 different websites in the month of July. The snapshot shows the bank account tied to these three websites, which collectively make up one legal entity, an LLC or Limited Liability Company.
Note that the June income report of $23,596.88 was generated by another legal entity, which is also comprised of three web properties.
Here is how July’s income breaks down….
A – Amazon Associates Program Affiliate Commissions $12.50
B – eBook Sales on Barnes and Noble $82
C – eBook Sales on Amazon Kindle $153.67
D – Google Ads $511.08
E – eBook Sales on Amazon Kindle (Europe) $17.04
While the 3 websites that made up June’s income report were all in the financial niche, the 3 websites that made up the income for July are in the self help / productivity niche.
This is what makes it so difficult to project, and answer the common questions I get from so many readers that look like the following:
and the list goes on…
I believe that money can be made in most niches. However, there are too many variables at play to confidently conclude how much and how long it will take.
I will continue to write about my niche websites periodically to share how they are performing, what I am doing to make them successful, what is not working and so forth.
But that said, my main focus outside of this blog has been my authority website, which I recently previewed. You can read more about the shift in my direction and why here.
And if you are interested in following or participating in the process, you can access the Authority Site Duel portal here.
What are you focusing on these days? Numerous, smaller websites or one large authority website? Why? What topics would you like to read about in the Authority Site Duel? What are you struggling with in your online business that you need help with?
I am not one for income reports (in fact I dislike them and I will tell you why in a future post), but this one was warranted because of an upcoming challenge that I am getting ready for.
Because I plan to publicly open my Kimono during the challenge (you have the right to close your eyes), I felt some background is necessary on why I am getting involved in this challenge. I felt this post was not only needed, but also timely given what I am about to embark on.
I will preview the challenge in the next few posts so stay tuned for more information on that one.
But for now, let’s dissect some numbers…
I will explain what each letter (income stream) refers to below.
This is a screen shot of one of my bank accounts belonging to one of my entities that is comprised of three very interrelated semi authority websites.
If you have read my previous posts in the archives, you may have noticed that I typically group multiple websites under one umbrella business entity for various reasons. When I say entity, I simply mean a legal business structure such as an LLC (Limited Liability Company).
Basically, each entity or company has a set number of web properties under it, and the entity as a whole then has its own EIN (Employee Identification Number), bank account, vendor accounts, affiliate accounts, etc. This way, if I was ever to sell the business (in this case the entity), I can easily transition over all the accounts to the buyer.
The websites that make up this entity are all in the specialty finance niche. Finance is where the bulk of digital ad revenue dollars float in. In other words, financial products and services are the most highly spent on or spent after at least in the online space.
Have a read at where and how Google makes most of its online advertising revenue to put things in perspective. Although I don’t have factual data about the offline space, I am willing to bet that the story remains the same.
Fact: Facebook rakes in roughly $4Bn in annual advertising revenue
Now the reason I decided to lump these particular sites together is because of the interrelationship of these topics and the product and service mix they offer.
For example, imagine creating a website about birds, and then one about bird cages followed by one about bird seeds. Do you see how or why someone interested in one may also be interested in the others? This is not only a good way to leverage traffic and readership between your web properties, but also a great way to up sell and cross sell products and services.
The difference of course is while bird seeds and cages may cost you $10 to $100, the products and services in these financial sites average in the thousands of dollars, and even in the hundreds of thousands. And although I don’t believe I have reached the million dollar spender (there are several multi-million dollar online businesses targeting that specific client), the offering of these websites satisfies the million dollar appetite as well.
The two relatively large numbers other than Google Adsense that you see in the image are a result of the product pricing structure that I referred to above. These are lead generation commissions. The beauty of these is that they are passive and residual in nature. Basically, once you refer a client, you keep getting paid by the vendor as long as the client continues to do business with the vendor.
The best example I can give you is insurance. Once you purchase life insurance from your agent, each year you renew it, your agent makes a commission. If the same agent sells you disability insurance in the future to secure your number one asset, which is your career and the income from it, then the agent makes more money on an annual passive and residual basis.
Then you bring in your wife’s policies, your retirement accounts, and all sorts of other things. This is how the income keeps growing off of one client/customer only. The same principles are at work in the above example.
I picked these topics because of my educational and professional background. You can read more about me here. Given my background in the financial services industry, I know where the “real world” or offline money flows. Now I don’t know everywhere that it flows, but I know of a good number of avenues where it flows.
These websites are not micro niche sites either, so unlike micro niche sites where keyword research predicates everything else, my approach when establishing these websites was to start with what I knew first and foremost. I later conducted keyword research to create more content on sub topics that people are searching for.
The key here in a nutshell is that I started with topics I know inside out, or am passionate about, or have interest in, or have a STRONG desire to learn about and then followed with keyword research. Are these the topics I am most knowledgeable and passionate about? No. But I know a ton about these topics and enjoy them as well.
So am I then saying that keyword research is not important? No. It is. But it is not a deal breaker in many cases. It shouldn’t be at least. I think its importance was blown out to unprecedented proportions and we all got carried away mainly because of the niche site craze.
Could keyword research have turned me off given the data I saw? Possibly. But in this case, in spite of the not so ideal data from keyword research, I knew I could establish a successful website because I knew these topics inside out. In fact, as you can imagine, from a keyword research perspective these topics are relatively more competitive given their nature and the “players” in this field.
So the keyword research wasn’t exactly stellar, but I decided to pursue these anyway. I had made a commitment to make these sites semi authority sites because I knew it was going to take a lot of content, and solid content, to stand a chance against the big boys. Semi authority sites are what I refer to as websites that are built with a decent amount of content. However, the content is expert content in that the writer knows about the topic inside out, thus the authority aspect.
When I observed the competition that was ranking high on search engines, I noticed that most were actual service providers that had relatively large websites, but disparate in nature in terms of content coverage. Those that focused very narrowly on either of the topics I chose were relatively thin compared to the sites I had committed to establishing.
The old adage that content is king remains true in this case. I created a lot of it. A ton of it. Way more than the competition has. As a result, over time, I was able to inch higher on search engines and claim a small percentage of a very large pie. Most of the time that is all we really need.
To give you some idea, these sites average about 80 pages each, with more than half generated by myself and the rest outsourced to expert writers and not just the lowest charging writer I could find on Elance.
I did not monetize these websites until a good 4 months into building and marketing them. The numbers you see above are roughly 18 months into these websites. Another anecdote that demonstrates that if you put in the work, the results will eventually come providing that your strategy and approach is sound (that’s actually the easy part).
Before I breakdown the income, I just want to emphasize here that there are two distinct ways you can establish multiple streams of income. I get so many emails from people asking me what else they can do to create new income streams. A lot of times they already have viable vehicles such as a website that is receiving decent traffic. Why look outside when the solution can be in your backyard?
Here is what I mean. You can surely establish multiple independent streams of income such as multiple websites each of which generate advertisement revenue (the replication or rinse and repeat model), or you can take an existing website that is already generating ad revenue and simply add more income streams to it. For example, repackage some of your content into an ebook and sell it on your website. Or add some affiliate offers. Leverage the traffic you already have.
You will have created multiple streams of income in either case. This is exactly what I did with each web property in this example, thereby establishing multiple streams of income per web property across multiple web properties.
Here is a breakdown of the earnings. A lot of these earnings were generated in May and paid out in June. As you likely know, many vendors pay at least one month in arrears. Some take much longer.
A – this is a royalty payment received from the Google Books program. I had recently submitted an ebook tied to one of the sites to test it out on Google. It made a whopping $15.59 for me in June.
B – this is the same ebook that has been selling on Barnes and Noble. Sales were actually better in previous months. But $94 in royalties nonetheless.
C – the same ebook once again, except on Amazon
D – this is the big one. An exclusive affiliate relationship with a vendor that compensates for each lead. Each lead can be worth tens of thousands and even hundreds of thousands to the vendor, therefore I am sure they are happy to offer a mere $13,909 payout in exchange for the leads.
E – $6,710.26 in Adsense. Some of these financial keywords pay in the $60+ range.
F – ($202) A check I issued to a local freelancer in town
G – $2,495 in private advertisements
H – $74.02 from Commission Junction (thinking about getting rid of this completely)
I – $222.36 in commissions from supplemental products I market on the sites as an affiliate
As you can tell the focus of these websites is primarily lead generation. That is quite apparent if you were to visit the sites. They are designed with lead capture as the first and foremost purpose.
The secondary focus is advertisement revenue. I will be focusing on shifting away from Adsense and concentrating more on private ad placements going forward.
The biggest understatement that I can give you at this point is that it took a lot of hard work and patience to get to this stage. I don’t think I can ever articulate that well enough in words to truly convey a true sense of appreciation for the work and time it takes. However, anyone can do it in their respective area(s) of expertise and that’s a fact.
I know that I invested a ton of hours thinking through and building out the content of each of these websites. Even when I outsourced some of it to expert writers, not only did I pay a good amount for their work, but I spent just as much time reviewing and adding my thoughts on each piece as if it were my very own. Content relevancy and congruency is huge for me, and Google Penguin will agree with that!
And after having said all that, there are two main things I want to conclude this piece with:
First, I will be publicly experimenting with an online project from start to finish (if you can ever call something a finished product). This will be around a topic I not only know inside out, but one that I live and breathe.
Second, the micro niche site craze took us away from what is truly important, including myself, who lost perspective for a minute and got carried away with several micro niche sites chasing the dollars. Sadly, but deservingly so, many of mine failed flat on their face. They were bound to frankly.
We often loose perspective when shiny objects are flashed in front of us. Every blogger, including myself was talking about niche websites, keyword research, the tools and resources and everything that came with it. We were all chasing a temporary solutions that eventually got caught up on by search engines.
It’s time to go back to the basics. It’s time to offer something we are true experts in.
Topic selection is still key, but for all the reasons we forgot when we chased solely the dollars. Let’s refocus on what has always worked and what will continue to work.
Let’s get real. Let’s put in the sweat. Let’s focus on what matters. Let’s focus on longevitiy. Let’s focus on expertise. Let’s focus on quality. And in doing so collectively, let’s focus on excellence, and success (money) will follow us . . .
What are you working on these days? Are you still chasing after the dollars or building a solid, long term sustainable business in a subject matter you know inside out? Are you for or against income reports? Why?