I quit my job recently.
It was done after a year-long agonizing decision period in which I went back and forth about whether to leave. When I announced that I quit on my blog, there was an outpouring of support and a few calls for full-time blogging. I’d love to blog full time, but there’s so much more to blogging than simply tossing up a few posts here and there every week, that while I’d love to make a go at it, I can’t blog full-time, and neither can most of you.
LET’S GET REALISTIC
It’s a fantasy, I know, to be free enough to make your own decisions and do what you when you want to do it. Since we all presumably have blogs, if you haven’t already done so, you will think of your blog as a possible path to this freedom. I mean, it would be cool, right, to roll out of bed, or maybe not (I do all of my blogging in bed with my laptop), and bang out the world’s best articles every day, every single week, while cashing big checks for your efforts every single month.
If you have not already discovered Darren Rouse of Problogger frame or John Chow of JohnChow.com or Pat Flynn from Smart Passive Income, or even our own Flexo from Consumerism Commentary, you will. These guys have made the leap from full-time day jobs to professional bloggers extraordinaire and they make full-time incomes doing so too. They make it look oh so easy, and we all want to be like them, but if only it really was that easy.
Many of you might not remember that I’ve been there and done that already. Oh, not the full-time blogger thing, but I’ve been self-employed, and it takes a lot more than the relatively steady $1,000 per month that I make through my blog every month to sustain me. $2,000, $3,000, $4,000, even $5,000 a month from my blog won’t work either, and here’s why:
BREAKING DOWN THE INCOME
- If you’re generating let’s say even $5,000 per month on your blog ($60,000 per year), you have to pay for the basics of running the blog. Chances are they you will have to move to a dedicated or cloud based server to handle all of the sexy traffic that you’re getting. Your Go Daddy shared hosting won’t cut it. Sam says that it should run cost about $250-$500 per month. My friend is paying $1,200 per month (!). I don’t know the costs for sure since my measly blog sits on a shared server. Either way, you now have a maximum of $54,000 left over.
- Are you going to write every single day? Unless you’re an internet marketer like Pat Flynn who successfully pimps the hell out of commissioned products and sells you the dream of riches, you’re going to need to sustain traffic with fresh content every single day. I’ll give you some leeway for holidays and even weekends. Can you write 250 meaningful articles in a year? It’s tough. I tried writing a new article five to six times every week for three months. At the end of it I was ready to quit blogging. Seriously. My brain couldn’t take it anymore.
- So, if you’re not going to write every single article, you might need to bring on a staff writer. Let’s see, I hear that those bad boys run at about $25 per article. If you pay for just two articles every week that’s a minimum of $2,080. You’re getting off cheap here. You still have a decent $51,920. And imagine if you want to get some great quality writing, Whale Posts if you will? Those articles can cost $200-$300 a piece to increase your chances of success. 100 of those higher quality articles for the year cost $20,000-$30,000! You get what you pay for!
- Do you plan on networking? If so, you might want to at least go to The Financial Blogger Conference and Blog World Expo. Let’s say you have to spring for airfare, hotel, food, etc. We’ll say that runs you about $1,500 for both events on the low end. We’re trickling down to $50,420.
- How do like taxes? Yeah, I’m not a fan either. Wait, taxes come with their best friend, Social Security whose cousin Medicare tags along. If you’re self employed, you pay double, baby. So let’s see that’s 10.6% for Social Security and 2.90% for Medicare. I’m in New York City, so I have to pay federal, state and city taxes as well. If I’m lucky I’d only pay 45% in taxes. That brings me down to $27,731.
- If you don’t have a spouse whose health plan you can piggyback on, you’ll need health insurance. All of that time spent in front of the computer is not healthy. I don’t know how much healthcare costs if you have to pay for it yourself, but the COBRA amount for just me from my past job with no dental was around $550 per month. That $6,000 annual cost will eat into your money. You now have $21,731 left.
A REVIEW OF WHAT JUST HAPPENED
Let’s see, you started out with a hefty $60,000 and got nickeled and dimed down to a little over $20,000 with just the basic costs of running your own business. I didn’t even include standard items such as an accountant, office supplies, promotional activities, bank fees, lawyer fees etc.
You’ve now made $417.90 in take home pay per week. Can you really blame anyone for not working and collecting roughly the same amount in unemployment insurance for 99 weeks if they can?
Don’t forget that you have to pay your rent or mortgage, buy groceries, pay for gas and car insurance, the doggy in the window as your kid’s Christmas gift, and all of the other basic costs of life. Of course, you could just live in mom’s basement and have the parents pay for everything, including grocery shopping for your favorite pot roast and fizzy pop. Better yet, you can just marry someone to take care of all your needs and declare yourself a freelancer/full-time blogger/early retiree as well! But isn’t that just bending the rules?
STARTING A MONEY MAKING BLOG
I never thought I’d be able to quit my job in 2012 just three years after starting Financial Samurai. But by starting one financial crisis day in 2009, Financial Samurai actually makes more than my entire passive income total that took 15 years to build. If you enjoy writing, creating, connecting with people online, and enjoying more freedom, learn how you can set up a WordPress blog in 15 minutes like this one.
Leverage the 3+ billion internet users and build your brand online. There are professional bloggers now who make way more than bankers, doctors, lawyers, and entrepreneurs while having much more fun, much more freedom, and doing less work. Get started. You never know where the journey will take you!
Updated for 2017 and beyond.
This is a little depressing but very realistic. Thanks
Sorry! It’s not meant to depress you, but just a slight reality check.
Now I am depressed. LOL. Great point of view. I only make about 100 a month. That with 2 kids and a wife I now owe… well no need to go into that. Happy Holidays.
You haven’t revealed what you plan on doing now that you quit your job and blogging fulltime is not on your mind. But whatever it is, I wish you the very best Sandy! I’m sure you’ve thought this through.
Me, I’ve never considered blogging a fulltime activity. Don’t get me wrong, I enjoy sharing my thoughts, but blogging to support myself puts too much pressure and I’m sure the posts will reflect that. Not sure that’s best for my readers.
My hats off to those who’ve pulled this off.
You know that I always have a plan “B”. For now that means that I have another job!!! I’m also looking at more investment property. Whatever I do, I will always diversify my income sources.
I discuss the very topic of investment property on my site. I think it is a much easier way to earn some steady passive income than blogging is.
Wonderful post Sandy- I love how you broke down the numbers behind the income. I love blogging and make money from it, but diversifying my income is essential. If we had to live on my blogging income only I would have to generate $75,000/year to feel comfortable. As you pointed out, there are a ton of expenses to consider when you’re a full time blogger.
I don’t think I’d want to survive solely off of blogs, either. However, I do know a guy that does it and seems pretty happy doing it, and I also think that freelancing is fine if you freelance in the field that you are specialized in. For example, the market for software developers in mobile is pretty decent right now.
I’ve tried it for 5 weeks in 2011, pretending to be a FT blogger on the 2 week cruise, and 3 weeks in Asia and Lake Tahoe, and I have to say, it’s not as enjoyable as I thought. To focus 100% of one’s time on blogging is a real bear imo.
I like doing something else more than 50% of the time, and coming home to some tweets, e-mails, comments, and opportunities. That’s just my opinion. To each their own.
I think it’s important to be diversified in the activities that you do. Doing ANYTHING full time for 50-60 hours a week and not having a diversion can be a drain.
I totally disagree. I have several blogger friends who make the example $60k and way more and they are doing just fine. Some make less and adjust their lifestyle to match the unpredictable income. Many of the expenses here are optional, not necessary like taxes. Here’s why:
One does not have to participate in every conference that comes along, especially Blog World. I usually get the recaps or notes from other bloggers and even the speakers themselves. I didn’t go to FINCON yet I found every slide that was presented there: http://www.slideshare.net/ptmoney/presentations The same goes for every BlogWord I’ve missed, the slides are posted or shared by other attendees. Choose 1 conference that you want to attend and budget for it otherwise, settle for local meetups or recaps from other bloggers.
My VPS server costs $60 per month=$720 per year and the service is awesome! If I need to go higher than it’s around $80 per month.
Having a staff writer is a luxury, not a necessity. If you budget your time well enough as a FT blogger then you might not need to have one, but again this is optional. Getting burnt out is normal, but by no means does it mean one cant pump out 4-5 articles for the week. I do this easily by writing my articles within a 6-8 hour span over the weekend and I have a day job.
If you’re smart with taxes then you end up paying less than what’s quoted given certain tax rules for businesses but this is very personal as everyone’s situation varies whether they have kids, 401k, itemize deductions etc
For sure there are people who would do perfectly well on take home pay of whatever number you throw out there. You absolutely can live on less if you adjust your lifestyle and cut out lots of different things. Also, differences in tax rates, etc could change the amount that you take home. I’m just using myself as an example. But there are some things that I didn’t include like funding a retirement account.
Lots of people can and do blog full time. I just think that the majority of people that do blog, can’t and won’t blog full time.
@ Sandy-Yes I agree most won’t. This is a hobby for most people that happens to make them money on the side. Like others here on the opposite side of your position, my goal is to do this FT as I really enjoy it. The money aspect is one that takes time and persistence with consideration of the risk involved.
Getting a recap of the conference on slides is like watching the TV show Hawaii 5-0 for a Hawaiian vacation. I think most of us would rather just be there.
Don’t think your VPS server will be able to handle 250,000 pageviews or more a month without some issues.
It’s fine to say other people can do it, but we all know other people. Share with us whether you think you can do it?
Thanks!
Well said on the importance of attending vs viewing slides. I attended FINCON11, and can say that in no way, shape, or form could just reading slides come close to matching the value of being there.
For me it’s all about priorities, if based on income attending the conferences doesn’t make sense then I won’t, simple it isn’t that big of a deal to miss it or catch up on slides. I’ve attended quite a few conferences via life stream or just reviewed the content via slides and I got what I needed at the end of the day.
Based on my income now, yes I can do this FT, however I have a job that I like which keeps a sense of balance and perspective in my life.
I’ve gone over the VPS issue with the guys who host my site and they seem to think we will be just fine :-) 250k a month is doable and even then it’s no where near the $1200 quoted.
I’m not at all new to blogging as I’ve been doing this since 2003 on various sites and now on my present portfolio. It takes time, dedication and persistence. I am in this for the long haul and while this started out as a hobby I now treat this like a business. So I’m not at all daunted by the work and commitment needed to make this a FT venture.
Sounds good Ginger. Definitely hold them to the 250k traffic figure and VPS! I started getting some major issues and had to go bigger as it wasn’t just the traffic, it was spam bots flooding/pinging the sites at 10,000 a minute. Kinda daunting and frustrating!
Look forward to learning more from your veteran experience!
Thanks,
Sam
Good, thought-provioking post, Sandy! Especially for this audience.
I agree with you, as this relates to most people. Clearly though, some have (and are) really succeeding, but if we’re talking about blogging itself and no other related businesses – yeah, I’d say that seems pretty tough for most people. Maybe as a side venture, extra stream of income, or hobby is where blogging fits best.for many people.
Great article, although I disagree with the premise (respectfully of course, lol)
You CAN blog full-time (I do), and I’ve written about it in detail on one post on my blog:
formerbanker.com/blogging/want-to-blog-full-time-ignore-warnings-listen-to-advice/
Other than that, great breakdown! Oh and we DO agree on the fact that you have to make a lot of money. At least twice as much as most people think they need to.
So you essentially agree with me! If you’re blogging full time many people need double that they think they do! I know that you accomplish that by having multiple web properties. Since you live down the street from me, so how right am I about the taxes?
Read my post! LOL… It’s all in there
I don’t know if I can live off just $3,000/month gross and enjoy my life to the fullest. No offense to your income. Where do you live, and what is your living situation so we can understand more? Thanks!
I never said that was what I was making. I chose that number because it’s a modest one that most people can relate to. Had I said $6,000 gross, that would have pushed my cash requirements to something closer to $7,500 and then my business needs to generate about $10,000 in profit for me to comfortably pull that out on a monthly basis.
How many of you guys would be quick to shut me down and point out that it’s not realistic for most people to aim for that number?
Either way, I lose, lol
With all the avenues that are available for someone to make money from with a website, I don’t quite understand the pessimism!
As for my personal situation, let’s just say that it helps that I have no debt, am single, and have no kids to support. Of course, someone with a family will have to crunch their own numbers, but to me saying that you can’t blog or freelance full-time is akin to saying you can’t be a full-time consultant or lawyer or accountant.
Just my $0.02.
Oh and in case it got lost in translation, nowhere in my post or comments on other websites did I ever say it was easy!!!
Gotcha. Thanks for more info. So what is your monthly revenue so there is no confusion?
When did you graduate from HS or college and how long have you been at it? How long were you a former banker for? The more context, the better.
Ok, why do I have the feeling that I’m just about the only one here who doesn’t think of a job as either “steady” nor “reliable” income? Look around you, people!
Great job breaking down the numbers. In most cases just making the same amount as a blogger that you do in your full-time job is not enough. You have to think about insurance and taxes which will take a big bite out of your income.
I recall Flexo saying that he didn’t go to full-time blogging until he was making something like three times what he made on his day job and had a good cushion of cash! What a great multiple!
It all depends on what you make. If you make $350,000 a year, do you really need to earning $1,000,000 a year from your blog to quit? Even if you just make $35,000 a year, do you really need to make $100,000 from your blog to quit?
100-150% of income for 2 years in a row seems good enough!
I kept changing my target. I remember thinking, Wow, if I can match my day job income month-to-month, I’ll really have something here. Then, when that happened, I thought, Well if I earn twice my monthly day job income in a month from websites, I could quit my day job. Then I was concerned about risk, and I changed my target again. By the time I did quit, the site was consistently earning several multiples. It really depends on your understanding of the risk in what you’re doing, and how well you’ve prepared for that risk, moreso than multiples.
I am happy to see an realistic breakdown of how much you really need to make from blogging to replace the income from a day job. It think there is far too much hype about making money from blogging, much of it coming from bloggers who don’t make that much money actually blogging but in selling the dream. But then why dig for gold when you can sell the shovels?
Karen, one of the keys is to not believe the hype in ANYTHING! Selling the dream is a great business plan, especially if you have a no-return policy if your dream fails.
Hi Sandy,
Thanks for your post and good luck with your new job!
Your friend must have some MASSIVE traffic to be paying $1,500/month for server costs! A dedicated server is around $250/month on InMotion and Media Temple. I don’t know if and when I will ever need another server. Guess that would be a good problem to have.
Taxes suck, and the good thing is, we can deduct our business expenses to reduce our tax bill. I’ll be writing a post on this topic here in the new year. It’s actually already pending and needs to be scheduled.
I guess I’m biased, but the best is to have a hybrid approach of working a day job you enjoy, and then blogging/freelancing if you enjoy. A lot of the personal expenses become business expenses such as monthly mobile phone use, and things actually get that much easier in terms of finances.
I think blogging would have to generate at least double what Elle said in order for me to feel comfortable. It’s expensive living in SF, Hawaii, and the Mediterranean!
He gets between 250K-300K per month. His problem is bandwidth since his site is houses lots of videos and tends to crash since hundreds of people hop on the site at once when he posts new videos. But that’s him! I’d be curious as to how much Flexo paid.
I’m thinking that something in the neighborhood of what you suggested would be more than enough for the average blogger.
Gotcha. Yeah, video is a killer! Is he doing well with his online income? Between FS and Y, there’s about 250-300K pageviews/month, and one dedicated server workers OK, not great.
He hasn’t monetized his site AT ALL. I’m his webmaster. I want to strangle him on a daily basis.
Run that by me again? 250-300k pageviews a month, $1,500 in server costs and zero monetization? Is he already rich and running it just for fun? If so, sweet!
Hey Sam, normally I’d be for the philosophy of “I guess I’m biased, but the best is to have a hybrid approach of working a day job you enjoy, and then blogging/freelancing if you enjoy.” because I believe in the middle way, but there are a few caveats to this:
1. What if your day job does not allow you to do anything else? Don’t be surprised; some companies do expect this. In some countries such as Canada, registering businesses is also a matter of public record so it’s easy to find this stuff out unless you attach everything to your personal name. Liability wise, that can also have its risks.
2. What if things at the company change? There could be many reasons for this — declining revenue, a changing marketplace, or whatever. However, the honeymoon may end and then it can feel soulless.
Sure, you can just go get another job but I feel this post may be too discouraging. I think many people are chasing a dream, and I agree with both you and Sandy that reality bites and it may not be that easy or desirable, but at the same time, at least I personally feel that this could be a reasonable alternative to a day job at some point. Not all of us are making $300,000, $200,000, or $100,000, even. The less we make at our day jobs, the lower is the marginal cost of our time in pursuing other things.
If this discussion was simply “blog full-time” I’d be more inclined to agree. I get inspirational bursts of writing at times but 50-60 hours a week? Don’t think so. However, the post is titled “Freelance or blog full-time” so that changes things.
Don’t get me wrong, I’m currently working full-time, doing a bit of studying and then doing everything else in the free time I have left after spending some quality time with family. However, I don’t think it has to be either/or, and I believe that if things change at the work place then a person should take advantage of every opportunity they have, including freelancing and blogging full-time.
No decision is final and who knows, one year of some cool freelancing may make you that much more desirable as an employee at a top company down the road.
I think this post is meant for the “either or” crowd, not those who enjoy blogging/freelancing part-time.
The greatest gift of not earning much at your day job is your ability to do something you really want with ease. It’s easy to walk away from a $35,000 a year job. It’s hard to walk away from a $350,000 a year job, especially if you have family.
BTW, I think you should quit your job if they don’t allow you the freedom of speech on your own time.
I think anything under 6 figures is not too hard to walk away from. These things vary from place to place. I don’t know who makes $350k where I live though as I don’t think even my boss’s boss’s boss is near there! Lawyers and doctors, perhaps, but if you are in those fields you probably love what you do with the dedication it takes to become successful.
I agree with you on the freedom of speech thing, I’m not sure those types of clauses are even legal but if one wants to leave on good terms they still need to be respected to a certain extent.
This is definitely an all or nothing post. Most of us are already doing the hybrid thing, so there’s no real question as to whether we could do both – we already do. The question here is in making the leap from working for someone else full-time to working as a full-time blogger. There’s a huge difference.
We forget the cushion that a job provides, and even though nothing is “guaranteed” at the job, if you’re a decent employee and your company is more or less stable, you will get a paycheck on a regular schedule and can budget accordingly.
As a freelancer, your income can be proportional to your efforts or can depend on your clients or external changes that you have no control over, such as Google updates that have creamed lots of internet markets and people depending on Adsense for income.
Always, the less you make and the lower your cost of living the easier it is to change to anything else. The turnover rate for the guys at my new job working on the factory line is high, only because they can swap out this job for a job at Starbucks or Macy’s or anywhere else.
Oh I pretty much agree with you, but I want to look at the other side of things as well. I mean “However, I don’t think it has to be either/or,” in the context of the longer-term. You can even look at it as a new “job”.
However where I think I agree with you most strongly is in blogging *only* full-time. I really do believe someone has to have something else as their “profession” unless they truly are an author/writer.
On the other hand, I don’t think the argument is as strong against freelancing and blogging. In that case, it’s not much different than working for another employer except that you are working for yourself, and depending on your field, freelancing may not be all that unusual at all. You still retain the benefits of diversification in terms of having multiple income streams, though it may be more difficult to obtain and maintain those streams as you need to be self-driven. The rewards are also greater.
This is also a great point to keep up the savings rate high and expenses low, as that affords you so much more flexibility in terms of your options and choices.
I love this post Sandy! I think you paint a very realistic picture that so many people are too blinded to see. I blog part-time and while I’d love not to have to go into the office for 40-50 hours a week and make my own schedule, I know it’s just not that simple to be a full time blogger and have a cushy lifestyle. I’m in a happy place now where I can enjoy my primary pay check and blog for fun in my free time. If I had to rely on my blog for 100% of my income right now I think I’d be a stress case! Maybe someday I’ll get to the point where I could handle it but I know I’m not there yet. -Sydney
Very realistic outlook on blogging full time! It’s great for side income, but definitely not a viable option for me to leave my day job!
I love blogging, but I don’t think I’d love it as much if I did if full time. I also don’t think I’d be able to bring in enough income to sustain my expenses. However, I love blogging on the side and bringing in extra money. ;)
I’m a pretty strong believer in diversification. That’s why I’d never work at my girlfriend’s company at least on a permanent basis. ;) I’d also never consider doing anything without proven income full-time if I was the sole breadwinner.
Just as a general comment on this thread, for Canadians, the taxation side of things may be more advantageous than it is for Americans.
I am currently working fulltime, and I already pay a crapload of taxes on my five-figure salary. Federal, provincial, pension, etc… add it all up and it adds up to a lot. There have been a couple of really good months where the before-tax of blogging has matched the after-tax of my take-home pay! ;)
On the other hand, there are the benefits. If I consider the retirement match as additional free income, then that reduces my apparent income taxation rate to 25%, although I can’t touch that money for another 30 years or so.
Healthcare is not really an issue since I live in Canada. It helps me save a couple thousand in diagnostics and dental but is not a major factor.
If I ran a business, I would have to pay taxes, too, but at the much lower Canadian business tax rate which I believe is 12% or 13% for small businesses. I would still have to pay the full rate on what I withdraw as a personal salary, but then again, I would not need to withdraw everything as a personal salary.
Then there are the tax deductions that can be claimed. There are the regular small business deductions, and then there are the Canadian R&D tax credits that are personally interesting to me as a mobile software developer.
What this all adds up to is that it may take less gross income to achieve the same standard of living, and more gross income may lead to more net income. These things vary so much from place to place, but for a place like Canada where there is a larger gap between business and personal taxation rates, the advantages can be more apparent.
A point about payroll taxes since I forgot to mention that: A Canadian would need to pay double pension up to $42,000 (IIRC) of gross income. If one is self employed, one can opt out of paying employment insurance. Otherwise it’s the same rate as a regular worker.
Are staff writers *really* getting just $25 per article? Um…exactly what kind of quality will $25 buy? And yes, I know that some content farm workers were being paid as little as $5 to $15 per article, but if someone is trying to make a living at this these articles are going to be slapped together with little care to research, original thought or decent writing.
Another thing to remember: What you earn now through ads, affiliate relationships, etc. may change — in either direction. In time, advertisers may realize that they’re not getting enough bang for the buck and either pay less or stop advertising on all but the most-read sites. That $60k (or whatever) level at which you feel comfortable and confident may morph into a $30k (or less) annual income. As both you and Elle pointed out, diversification is essential.
I think there is still a pervasive myth out there: Throw together a free site, slap on some off-the-cuff meanderings and retire to live the good life. People who think it’s that simple need to read this piece.
I do agree that full-time blogging isn’t realistic for most people. However, the facts and figures are highly dependent on a number of factors. In my case, I live in an area with an EXTREMELY low cost of living, and I can make it on about $14,000 net a year. Is that a glamorous lifestyle? Not at all. But I walked away from a job where I would have been lucky to clear $20k before taxes. And even my previous salaried position only paid about $36k. It’s much easier to transition when you aren’t looking at a huge lifestyle adjustment.
There is no guarantee that I’ll make it through 2012 without taking on at least a part time job, but I feel fairly confident that I can do it. It’s all a matter of where you’re starting from and where you plan to go.
Best of luck Andrea! A big gap between expenses and income as well as low expenses overall really is the key to flexibility. I don’t have a low cost of living, but we are a couple and I could survive on $18,000 a year coming from my end. I won’t be super “comfortable” but I’ll do just fine on that amount and I won’t be freeloading at all off of my partner.
The figures should be adjusted for the cost of living in your own area. A good idea is to project over the year all of your costs including taxes Then you’ll know how much you need to average out to every month n order to make what you need to live on.
So, to live in $18K per year, how much do you think that your blog needs to make? Don’t forget to factor in taxes and such. Also, do you plan on stashing away savings and retirement money? Are you paying for life and health insurance? How much do you think that you would need if you did all of that or does the amount that you’ve quoted already factored those costs in? Just curious.
I definitely think it takes a cost of living adjustment. For Andrea and I, who live in a similar low-cost area, it is most certainly possible to make a living online. I wouldn’t go so far to say I’d need only $14,000 per year, though. Maybe that’s unique to her no-rent situation? I know the biggest difference between where I live and other places is the low cost of real estate.
Anyway, I think the biggest risk to full-time blogging is the fact that you can always be undercut. Don’t mean that in a bad way, but there are no protections for anyone. Thing is, I’d still be blogging even if it brought in $0. The money is by no means the reason I do it. When someone else is willing to create content and expand the internet by one extra page at no cost, there is a real threat to anyone’s business model.
Different strokes for different folks, but blogging isn’t my preferred way to make a living. After taxes, expenses, and other costs, there’s just not a whole lot of upside.
Hey Sandy, curious about “city taxes”, does New York City also tax income? If so… ouch!
NYC sure does!!!! I pay 6 taxes on every single paycheck before I take home a dime or send money to my 401K. Federal, State, City, Social Security, Medicaid, and Unemployment Insurance. I’m doing my part to keep the economy going strong!!!
I paid $150 per month for VPS, which barely handled 350,000 monthly visitors (WordPress+plugins is very CPU intensive). Earlier this year I switched to Amazon, where I have two EC2 instances for a web server (one is just a back-up), one RDS instance, a cache instance, and S3/CloudFront CDN. It’s pricey, and it may be overkill. A fellow blogger also helps out — he own a hosting company and his company monitors Consumerism Commentary’s set-up, applies software updates, etc. (for an extra monthly fee).
That should have been in reply to Sandy’s comment above asking what I paid.
I’m not sure if I’ve seen a post explode in comments within a few hours so quickly, so great job, Sandy! Are you sure you wouldn’t like to blog fulltime? ;)
You gave me an idea to write a follow-up with a Canadian angle. :)
Anything to provoke thought and discussion!
Being new to this whole thing, right now I am more likely to be able to quit from my side investment income than from blogging income. Though, it would seem that Sandy is discounting income earned from sources not related to monetizing your writing. Niche sites, ebooks, subscriptions, etc. The top bloggers are making money not just from the articles.
Eye opening post, Sandy, and one I enjoyed. It is much easier for one to quit and blog full-time if they have a spouse with dependable income and a job that covers health insurance. Otherwise, the health insurance alone for a family will cost a thousand or two.
I agree with this. The secret to early retirement is having a working spouse!
I’m a full-time freelancer who’s single and thus missing out on both a spouse’s salary, health-care benefits and partnership around the house. (To say nothing of the companionship!) What I earn is what I have, I pay $419 a month for insurance, and I’m also responsible for anything that gets bought, cooked, cleaned, repaired or laundered.
On the bright side: When you’re single you can eat the same one-pot glop all week without worrying about feeding spouse/kids a varied diet. If you’re on a tight deadline you can let the cleaning go for a bit — no one there to be offended. Should money be a little tight, you don’t have to wonder how you’ll pay the orthodontist or the kid’s school fees.
It’s a little easier to live a straitened lifestyle when you’re the only one who has to do it. If you have partner and/or kids, they need to be on board with austerity until your business picks up.
That said: I haven’t had a square job since November 2002 (except for a summer filling in at my old newspaper) and I’m happier than I’ve ever been. Freelancing suits me.
I wanted to add this, but Sam all ready has. It makes a huge difference if your spouse is in the workforce when you quit to blog full time. Then again, I would want my spouse to be able to cut back some hours as well so we could spend more time together! I guess that’s the dream:).
Great article Sandy especially now that there are a bunch of bloggers selling the dream by making the whole thing look soooo easy.
I believe one has to reduce risk before going FT blogging and have multiple income streams. I would have to close off my mortgage and have a decent dividend stream before I would ever consider blogging full time even if my blogging income is significant. In life it’s all about hedging risk and income from blogging is not guaranteed.
I’m making my living from blogging and I don’t post every day or have lots of traffic. I’ll probably end up making just under $20,000 after expenses but before taxes. That is enough for me and my family to have a nice lifestyle.
Hi Andy,
Where do you live? Would love to learn how to live comfortably off of $20,000 even after taxes with a family.
Thx!
@ Financial Samurai
I live in NYC, one of the most expensive places here in the states.
I didn’t go to school here (not high school, not college). I moved to the U.S. 5 years ago, I was born and raised in Haiti.
As for the revenue I get from blogging, well I’m always hesitant to throw figures out publicly. But we can talk about it privately where I’m more open about it.
One last thing I want to throw out there is that in order to derive a full-time income from your online properties, you have to also hone your marketing skills, and that has little to do with the fabulous content you can produce as a blogger. Amazing content certainly helps, but you need to market yourself aggressively. Few people treat their blogs as a business, and as such will never make that much money from it.
Will,
I lived in NYC 13 years ago when my studio cost $1,700 a month. I’ve always believed that one needs at least $80,000 gross a year to live somewhat comfortably in NYC.
I’m assuming 13 years later, studios cost more than $1,700/month?
You don’t have to be shy about your income bc there are a good amount of readers who make over six figures online here. I guess your message is misleading bc you started off with only 36k a year.
I’m always open to hear any online income advice for veterans, as I’m just a newbie.
Thanks,
Sam
Great article and great thread!
Love all the comments and contributions as well as the article.
What I think a blogger needs to do is to really drill down and get to know what really works and what doesn’t. I have made money from my site but that includes a paid for forum. Making money just from blogging has been tough but I paln to dive into the deep end give it a go.
I’d say that it’s hard for many people to live on $20K or $384 per week before taxes while they are supporting a family. Not saying impossible, just saying hard, especially if your spouse does not work or if your healthcare and other services are not provided by the public.
I think it’s hard but possible depending on circumstances. A private health plan for me is about $125 a month; I was paying $400 a month for less coverage at my job. My son is covered on his dad’s plan. I don’t think for a minute that this would be as easy if I was paying rent, but even if my parents would let me, the mortgage payment on my house is only like $382 a month. For many people, though, things are a lot more complicated and it wouldn’t make sense to try to quit a “real” job.
Since I am new to blogging I would say it is very hard for me to imagine making that much money where I can quit my daytime job. I love having a blog and having goals of making it profitable, but as it is with everything in life, there is a lot of risk to having one or more websites. Very good article.
Not to veer off to far here, but I think this is why we need some kind of health care overhaul. It shouldn’t have to be so expensive for someone to get health care on their own. Think of how many people are afraid or unable to do their own thing because of health care costs. It’s certainly a drain on small business development.
Glen makes a great point about healthcare being a barrier to entry. Going without healthcare is a rish that you’re willing to take when you’re young and single with no responsibilities but it get harder as you get older or if you have a family. I know a couple of people who stay with their jobs because of the health coverage instead of branching off to pursue their own ventures.
You can, though, find individual and family plans that work. We have a HDHP and a HSA. We pay a little more than $300 a month for our family of three (since I’m the primary breadwinner, we’ve always had tax-deductible health insurance through my freelancing business). Before the HDHP, we paid about $600. We ended up using the Internet to find group rates, even though we weren’t with a company. We’re in with a “group” of similar families, and that enables us to get prices similar to what (I’m told by my employed acquaintances) others pay at work.
I completely agree Glen! I can’t tell you how many people I’ve spoken with who say “my husband/wife works just so we can have healthcare”. How terrible–to have to work only for healthcare. Ofcourse healthcare is extremely important, but seriously?
I learned that if you work anywhere in Hawaii, you get healthcare!
Sign me up!
Great breakdown Sandy. My wife and I have discussed the same thing. You need a lot of income, and beyond that, it needs to be steady. Blogging didn’t really exist too long ago (say 5-10 years), and will it still exist in this form 5-10 years from now?
I think it is a great side income, and the nice thing about it is that it allows you flexibility to do other things too!
Very good point about the will it still be around in the future? Especially to this level? I would have a difficult time relying on income from my blog to sustain me in the long run. It is too unreliable.
The tax is the killer here. I think the tax rate would actually be a bit lower than 45% because you can write off a lot of expenses. I have to crank the number and see how much tax I’d really have to pay on 60k. I suspect it will be closer to 20%, not including the state tax. I’m going to piggy back on my wife’s health care plan. ;)
I agree! Taxes are the killer.
Erm, I’m doing ok. And I’ve always been the primary breadwinner in my family, too. :) But I’ve been very fortunate in my blogging career. And I went a different route, rather than focusing on my own blog.
You’re kind of different and more like Donna. You’re a freelance writer with multiple clients all over the place and the cost of living in Utah is pretty decent. Give us an idea of what the life of a professional freelance writer is like! Some perspective is needed.
Disclaimer: Sam added the “Freelance” part to the title. We have slightly different opinions on freelancing versus blogging.
LOL. Good point! Sometimes I get a little burned out, and, at first, I worked for very little, as Donna points out can happen. But I am earning a little more now. Although there are some days that I don’t feel like writing. One of the most difficult things is getting yourself up and motivating yourself to get to work!
I was wondering about this Sandy – since freelancing wasn’t really discussed like blogging was.
Awesome post Sandy! And dismal numbers (I must admit the numbers got really depressing lol)
I completely agree with you. Blogging to me is a hobby that happens to generate some side income. I would never be able to do this full time because it just wouldn’t make it “fun” anymore. I would probably get stressed and desperate because I know that the income generated needs to be sustained with lots of effort etc.
I love my main job and I like to blog to express my other passion, personal finance.
I would have to outsource my kids and my pregnancy to do this. Three year old boys are definitely more expensive to outsource than infants. Infants do sleep, at least part of the day. My three year old won’t.
You can definitely outsource the pregnancies. The toddlers, not so much. ;) Wait, how about the grandparents?!
Hire the kids as staff and deduct their “pay” (allowance) as an expense ;)
Eye opening post about full time blogging. I enjoy blogging, and if it brings in a few bucks even better. This year, I am striving to work from home ( due to a major family member illness) and build an Administrative Consulting business to help support my family. (Virtual Assistant is another word for Administrative Consulting). Will this endeavor take the “fun” out of blogging? I sure hope not.
I plan on retiring with my blogging income, but not in the way that most people think. I plan on working for the next 5 years at my regular job and save up my additional income from blogging for our future investments. During that time, I’ll be making HUGE extra payments on my house to get it paid off in 4 years. At that point, I’ll start investing in real estate and along with my blogging income and my wife’s income, I could easily stay home and blog “full-time”. The blogging income I have in mind is just over $100k a year.
Now this is my kind of post! I love how you plugged in a bunch of assumptions and displayed how the numbers work out. I’ve done this on several of my posts. Love it! It is always entertaining when somebody argues with your assumptions. Great job!
Everyone has to use their own assumptions and then find what numbers work for them! I’m using the numbers that would (or wouldn’t?!) work for me to work through this exercise. Some people assume that they CAN do something without conceptualizing the actual costs.
Great post! I keep asking myself what number I would need to hit but it keeps going up! lol I like blogging but not enough to want to do it full time.
very interesting post Sandy. as someone who has been on both sides of the fence, i can attest that it is challenging (especially today given the saturation) but doable / possible. would one want to? as many have said it’s not as glamorous when you only work on that one thing full time (though many are successfully).
for me the key has been to diversify, which keeps the tasks i work on varied and interesting. but i will tell you that if you want to blog full time, or work online in another form, it is possible, and yes to your point expenses have to be considered (depending on how large you want to grow your “empire”)
My full-time blogging fantasy includes this: posting two-three times a week, no staff writers, not too much ads, writing about topics I find interesting and not commercial. Would I make money out of it? If you tell me I would, I might think you are living in your own fantasy land.
Great post and even greater reality check. I always like to see numbers.
If you throw in blogging from a villa in Bora Bora with a cold pina colada and a masseuse nearby, I’m all over that blogging fantasy!
Sandy, great way to generate discussion. Writing posts like this every coupla’ days would get you great traffic. Sam has to be loving this!
Reality checks and doing multiple scenarios with different risk analysis is the way to go before you jump off the deep end. We can all get by with less but are we willing? Everyone has to answer their own question. Your post maybe will at least help someone from making a mistake quitting their day job before they are truly ready.
I think the idea of being a full time blogger or freelancer, and whether it can be done, is a very subjective one. I think there are folks who could definitely do it on a smaller income – and be very happy living on a small amount. There are others I think that have a higher lifestyle expectation – and they wouldn’t be happy living on less.
Those of us who aspire to be full time one day do have to think about at what point we would jump in with both feet and figure out at what number and life situation we would consider finally taking the plunge. It’s a very personal decision.
For me I originally thought that I would consider blogging full time once I eclipsed my day job income. This past year I made more from my blogs than from my day job – but my bar has been raised (like flexo mentioned) in the past few years because we’ve had children, my wife now has health issues, and getting decent insurance for her health issues is a real issue we’d have to consider without getting my day job group health rates. So now I think I’d have to be closer to 2x or 3x my day job income before I’d be comfortable going full time – especially with how blogging income can be a little less stable than some other professions -with things like the panda updates/etc. ( Another reason – by the way – to make sure your income sources are diversified)
In any event – I think it is definitely do-able. Like you mention there are a lot of costs involved with running a blogging empire, but by the same token I think a lot of those costs you mention can be cut back a bit. For example, $250-500 hosting? I think that seems a bit high to me. My virtual dedicated server with Media Temple and CDN via Total cache and Amazon Cloudfront end up costing me about $50/month. I have a bunch of sites running on that server and probably about 200k+ page views/month with no real performance issues? In any event, my point is – there are a lot of costs, but there are ways to cut those costs or be more cost effective as well.
Once you hit your multiple, do you think that you’ll jump in all the way? Does the volatility concern you, especially given your wife’s health? As Miranda mentioned, decent health insurance can be had for relatively cheaply.
The volatility does concern me a bit, especially after I got hit this last year in the Google search algorithm changes. On the other hand a bunch of people got laid off at my day job last year as well, so even “traditional” jobs aren’t always that stable.
Miranda mentioned that there are good affordable options out there for health care, however, I think our situation may be a bit different with some chronic health issues/etc that we have – which in the end will mean that the insurance isn’t quite as affordable.
A regular job just isn’t that safe, either, unless you perhaps work for the government. A bunch of people got canned where I am and the company has not yet re-entered the green. Either it’s working for an employer with no sideline or blogging and doing nothing else, there is always risk when you put all of your eggs in one basket.
You’re right that our health insurance situation is a little different. Once you have chronic problems, things start getting ridiculous in terms of cost — and it’s harder to switch insurance providers. We are lucky in that all three of us are in good health, and, beyond two monthly prescriptions (which aren’t related to health conditions), we rarely have need of health care services.
Most of those expenses are overblown, in my opinion. $250-500 per month for hosting? You can get a VPS for $40 per month that can easily handle those days when your traffic spikes to over 30,000 visitors, and that’s without any caching enabled. Also, you don’t have to post every day to sustain traffic. With even moderate SEO efforts you don’t even need to post once a month in many cases.
Realistically, you’re looking at maybe $5 of expenses per year, including hosting. Unless you outsource EVERYTHING. Then maybe $15k in expenses.
@Kyle this article isn’t written realistically, but it did get a lot of traffic! I know my expenses are 2k a year for everything!
Alright, so I went to extremes. Got your attention though! Most bloggers won’t make $5K per month from their blog alone!
Yes that’s true. 99.9% of bloggers won’t make anywhere near $5k per month blogging. Realistically, I make more than that per month and my fixed monthly expenses are around $150. If I’m doing a big article marketing campaign or paying for content for whatever reason, that might spike to $1500 in a month. I think I spent a total of about $15k last year, but I could easily have spent less than half of that if I had been more efficient and still seen good results. But to maintain current levels of income, I would only need to spend about $150 per month and post 3 or 4 times per month. Making money blogging is much easier once you’re already making money!
Kyle, did you just say 99.9% don’t make more than $5,000 a month and then say you make more than $5,000 / month? Is this a typo, or a logical error?
You think more than 1 in 1000 bloggers makes more than $5000 per month? Maybe it’s more like 1 in 100. But I would bet it’s probably closer to 1 in 1000.
My point is, after saying only 0.01% earn more than $5,000, it doesn’t make sense that you then say you make more. Unless you think you are part of the 0.01%? It’s inconsistent logic unless you think you are special.
Maybe, but chances are many people here ate special then and make that and more. So it’s way more than 0.01%.
Guess it all depends on the sustainability and flow of one’s traffic.
Regarding your 30,000 figure, are you talking from experience and that this is a daily, weekly, or monthly amount? Or maybe pet minute or hour? Need more reference points as well as your blog income to understand your stance on cost.
Thanks
I was talking 30,000 daily from personal experience. My VPS has handled links from sites like lifehacker and MSN Smart Money without any caching. I’ve since turned caching on, but it doesn’t seem to make a massive difference.
As for income, it’s over $5000 per month but that’s about as specific as I’m willing to get. To be fair, that income comes from 3 major blogs. 90% of it is from just one, though.
I never thought about it like that. Definitely an eye opener. One of these days I’m going to quit my full-time job. But I need to have a couple businesses going and I’ll continue blogging. My aim isn’t to be a billionaire – I just want to live comfortably.
Who does this apply to? Why would hosting and having enough bandwidth be so expensive a person can’t make a good living blogging engaging GOOD quality daily? I do and I know at least 10,000 other bloggers who do around the world and don’t have any trouble posting daily or even 4 times daily! Godaddy works perfectly for us and all the other hosting sites out there! We work at home, at the beach, starbucks, barnes and nobles etc… guess it isn’t cut out for everyone that’s probably what you meant!
Awesome stuff. What is your blog so I can check it out and learn from you.
I don’t think I know more than 500 bloggers, so 10,000 is very impressive to me. Thanks!
Sam
Great discussion Sandy. It almost sounds as if you are trying to talk yourself out of blogging full-time. You are absolutely right to be cautious about giving up a primary source of income before blogging full-time. I don’t have to tell you that working full-time and blogging part-time is very difficult and even more difficult to generate a second income from. My goal is to retire in 8 years from my current job, which I will most likely do regardless of my blogging income. Realistically in 8 years my blogging income should provide me with another income stream and allow me to keep doing something I enjoy.
I’m loving the coversations here!! Over 100 comments on my little ‘ole post. It’s nice to provoke thought and discussion.
I think my approach towards blogging is a little different.
My day job gets me a good amount to live comfortably (about $100K), that takes care of pesky things like health insurance, 401K, savings etc. Plus it gets me out of the house from 8-5. My wife likes that :)
My blogging income has increased quite a bit as well. But I have no plans to quit my day job. Instead, I spend my online business income on living a better life like vacations, tech gadgets etc. Can I live on much less income, sure. Do I won’t to, Nope!
Online businesses are more fun to me than my day job. But I also don’t want to worry about health insurance and such at this stage in life. If I quit, I’m afraid my online businesses that are fun, will not be fun anymore.
What a great post and also great discussion!
I don’t think I could ever blog for 40 hours a week. I like to write, but whenever I pressure myself, I don’t enjoy myself nearly as much. So, if I am not going to ‘love’ my job, I might as well do work that pays better than blogging. (This is my own experience, I am sure many people make way more than I do blogging when broken down to an hourly level.)
I like to write, and I like to socialize, but I have to keep it at a hobby level. Sandy, you wrote a fantastic post that really breaks blogging down to reality.
When I was recently on vacation, I thought about how great it would be to be a freelancer and just write on the road on a whim. I very well may do that in 10 years when my husband doesn’t have to work full time anymore and our expenses are way less than they are now. Even then, it will be a part time commitment though. As I said, I don’t want to start hating something that I loved once as a hobby.
Thanks for a great post.
Great post Sandy! I would like to give blogging full time a go sometime. Sooner rather than later. But I am not going into it with the expectations that it will match what I am earning now. For me, if I can spend half the day volunteering and half the day working on blogs and if that brings me half my day-job salary I will be a happy person. It helps that I have a supporting husband who doesn’t care whether I bring in money or not and gets us insurance.
With that said, I would not entirely agree with the numbers. Blogging most certainly has expenses, but as Ginger said, it gives the most freedom to adjust based on what I bring as well. And all the expenses are tax deductible, so you won’t be paying 30% of $60k. If you sock away a good chunk in solo 401k the tax liability reduces even further. If you are not earning much by nature you won’t need a great hosting, if you are earning a lot you can afford better hosting. I have several sites on a VPS which costs me $60/month and put together the traffic does exceed 250k/month, it seems to hold out fine. Great customer service and if I have any of my site go down due to bandwidth issue for more than a couple of times a week, I will look into upgrading.
Alright so let’s talk realistic numbers here! LLet’s say you’re not sucking bandwidth like my friend, so you don’t need expensive servers. Let’s also say that you’re not getting 200K visitors per month. Let’s say that you’re getting 50K per month so you’re okay with a shared Go Daddy hosting which costs $300 per yeaaar.
No one had a problem with my premise of $5K per month. How many are making that much per month? I see what many post as blogging income every month. So let’s say that you’re making $2K per month which is more than what I see most people averaging every month. I know, there are ups and downs.
Crunch the numbers for your situation. Can you blog full-time now?
Actually, it seems like all the dissenters commenting are making $5,000 a month, and perhaps much much more. Whatcha think?
If I have not made myself clear in my previous post, I was just disagreeing with the expenses. I am not making 5k or even 2k :) Blogging “could” bring in money. But as I see it right now, you have to be exceptionally good and should be able to differentiate yourself to move past the $1000-$2000 that will come from you-know-what direct advertisers.
Yep, I agree. My comment was more a general comment to amaze at how many people do make a lot of money online here according to so many comments. Thx
Shared hosting starts to choke around 1500-2000 page views a day. If it is absolutely necessary you can hold on to it, but if you are at that point you have to move. My shared hosting was $60 an year. The customer service over there was great too. If I expected a traffic pike, they were always ready to up my bandwidth. But eventually I hit a upper limit (it was a small hosting company not godaddy or hostgator). Then I moved to VPS. With mid level VPS, I pay $60 a month. If I want to upgrade I could for $80-$130 which would withstand upto 500k a month. I am a long way from there so I don’t think I will need the upgrade sooner. But if I get there faster I will happily take the upgrade :)
Personally I can never blog full time at 2k (not that I am earning that much now, no, I still have a long way to go), I earn much more than that now and it will be a serious cut in our lifestyle. I don’t know anyone other than Crystal and The Financial Blogger who makes more than 5k. And we should not consider Crystal as she is not bring the majority of that from blogging. So it is a whole another business. And I am not sure what TFB’s profit is, he mentions the income but I am not sure I saw specific amount for expenses (may be I missed).
You need to dig pretty deep to find the TFB expenses – and he has a lot of them – staff writers and personal assistants add up. He also has a business partner so the earning numbers you read aren’t all his.
Yes, revenue and profit are two different things. But, from a marketing perspective, it’s much better to just state the revenue. Like, “I sold my business for $1 million.”.
Fabulous post and fabulous discussion. The examples you shared are sobering. Personally, I have no intention of quitting my day job(s). I’m pretty passionate about what I do and enjoy my career immensely. That said, I love exploring different online opportunities. So far, some of the most “profitable” things that I have done have taken way too much time.
Sandy I think the numbers are different for everyone. What you earn could work for you but would it work for me? As someone said earlier, you live in an area where living on 2k per month would be fine. I live in DC Metro and 2k per month would put me in Le Hood which is not OK for me. But that’s the standard of living I’ve chosen-that is not to wake up every morning wearing a bullet proof vest as I make my way to the beltway.
There are so many examples of bloggers who do this FT and the difference between them and those who don’t is effort. That’s it. I don’t see guys like Flexo, Ramit, Jim, and GRS as outliers as they got there through hard which involved perfecting their craft and remaining a step ahead of everyone else in the blogging game.
Everyone’s situation is different so the numbers will vary widely. Flexo needed to make several multiples of his day job salary in order to leave. For others, they would have left after making the first 100k. Others 50k. And then some even 20k. For the guy who makes 150k at his day job that he hates, it may be worth it to leave after making 50k doing something he loves.
Someone mentioned that this is an all or nothing post and I think that’s fine when you want to inspire lively discussions around the theory of what it would take. But when you’re looking at individual situations, your mileage may vary. In Flexo’s case, given the factors as they were, I would have left after the first 100k. As you can see, his situation turned out fine even after the Panda update.
I live in NYC! $2 is rent money. :)
Guys this has been an awesome discussion! I hope that I was able to get many of you thinking and evaluating your path if blogging full-time is in your plans.
I just want to make sure that you think it out, work on projections including a best case and worse case scenario, account for all of your expenses and then make the leap forward.
I wish everyone success!
It’s great to open the discussion! I do think that the case made could be overly pessimistic if we are going to talk about both freelancing and blogging. ;)
I think it’s important to be aware of the hurdles to overcome, because we all succumb to dreaming after a couple of good months, myself included, but at the same time, I think the saddest thing is if someone goes “oh, it’s too tough cause someone else said so, so I will never try it then.” I just simply disagree that it’s that big of a risk, because we all take risks when we choose to depend on our employers instead, and hold off doing whatever it is that we really wanted to do.
Everyone’s situation is different, but let’s say you have a dual income household, and let’s say healthcare is not a big issue, then things change somewhat no? Personally I wouldn’t even care if I only made 2/3rds income from freelancing and blogging because I already save close to 50% of my current net income so I am used to living off a lower income. I don’t make a “low” income, but I still make less than six figures at the moment so I am giving up less.
Also, I think that if anyone is dissatisfied with their current position they shouldn’t remain stuck in it. Not everyone will be as successful as Crystal, but I still find that path inspiring. Either way, a new prospective employer should find you more attractive than someone who just cares about punching a clock.
Maybe I am very biased because I am trying to convince myself that it is possible, so I am glad that there are people like you challenging me to look at all aspects so that I am not simply dreaming.
I’ll vote this as one of the best discussions opened up… thanks! :)
Great discussion, and I think the point here is that there are a lot of variables to what Sandy wrote about. I generally disagree that “you can’t freelance or blog full-time” because a lot of people do just that. But I do agree that it’s difficult and probably requires a few income streams to get started.
I am going to give it a shot in a few months (although it will be after about a year of planning for it). I’m not entirely sure how it’s all going to work out yet, but I’m looking forward to proving that it is possible :)
Excellent post. It should be mandatory reading for anyone considering blogging free time. Yes, it is possible, but that doesn’t mean it will be easy. Best to go into such an endeavor with all the facts.
I am aiming for self-employment down the line, but not full time blogging. Instead, I want to have many diversified income streams (blogging, investment property, freelance, teaching, etc.). And I won’t even consider it until I have my mortgage paid off (sometime in 2012 or 2013) and have a large cash reserve to cover health insurance for the next 30+ years (I’m part way there, now – woot!). I am what you call ‘afraid of risk.’ It is articles like this one that remind me that I have good reason to tread slowly when making any decision to leave the safety net of Corporate America.
My goals are very much the same as yours and like you, I am not putting all of my eggs in one basket. I think that you’ve been looking in my playbook (or did I peek into yours) since I plan getting my income from being an adjust professor, rental property and whatever freelance work I pick up. I count the blog income as “gravy” on my potatoes.
Don’t I owe you a book?!
Hahaha… no worries about the book. They don’t expire and it will be just as good when/if I ever read it!
Jebus, the typos. I have a new computer and my keys are stiffer than starched collar.
I must admit I quit way too early, I was earning $300-$600 some months early on just muddling through but I live a very frugal life when I have to and must say that life has been more than full enough for me. These days I do just fine and although my expenses are higher I sustain travel and moving around on somewhere between $2000-$5000 per month (income changes hugely due to activity level, something I need to work on!). I do think it would be tough to live in USA full time on that though, much related to medical expenses.
I entered blogging to express myself, however after a year I started to monetize my site. I am looking forward to either make a good side income or it is not worth it to me. It could ultimately affect what I will receive from Social Security.
This is a great exchange about a topic that is quite interesting to me. I have had a personal finance blog for over a year (ConsumerMiser.com) and it is both a hobby and passion of mine. However, I would love to make a few bucks at it. I have not monetized the site yet and I recently re-started it after being hit by a computer virus.
Its tough to blog in my spare time with my schedule and like most businesses, I am getting the feeling that you have to give 250% to even have a chance at making real money. Of course you also need talent and a solid product/content and an instinct for what will attract readers and advertisers. I think Sandy is basically right on point for the 99% of us. Thanks for keeping it real and telling it like it is. Quite a few folks are making a lot of money by selling the idea that anyone can blog AND make loads of money in their spare time AND THIS IS JUST NOT TRUE.
Congrats Sandy! Looks like you have a whale post on your hands. Awesome breakdown and reality check for us all. Thanks for the thought provoking discussion!
Check out younghouselove.com, they are raising a family off one blog and always share how
I didn’t say that it can’t be done, I just said that MOST OF US can’t do it. ;)
Very interesting topic to bring up. I think that it is possible to be a great blogger but is more important to diversify your time and investments wisely.
I have a real estate blog that discusses how I’ve made great passive income through my real estate rentals in Los Angeles. I still have my full time job (I make too much to walk away) and for now it helps me in qualifying for my loans as many of you know that getting approved for loans is more difficult now than in the past (especially commercial property).
The most important thing is diversification, diversification, diversification!
@Sandy and @Krantcents-I too started out as an endeavor to educate others. The time spent is exploding and in order to compensate for the time, I must increase my income and readers. I tire of doing the same thing day in and day out, so blogging is a perfect side hustle for me. I think your breakdown was excellent!!! @GirlsJustWannaHave Funds- The key takeaway is your time in the field. Blogging is not a get rich quick scheme!
I love blogging-everything about it down to the back end stuff. It isn’t a get rich scheme but you can certainly make a lucrative side business out of it.
Wow this is probably one of the most intense threads I’ve seen in a while. While I like the spirit of the posts I have to throw my hat in on the Sam’s camp. You might not be able to quit right away but with the right amount of cultivation there’s potential – and like everyone else I think those bandwith costs are high lol
I tried reading all of these great comments to get a perspective on where this thread is going, and I am understanding this is just a general thread on freelancing and blogging.. so here are my thoughts as I am both :)
Background: I am a freelancing consultant in an unusual industry/niche, who also blogs (FOR FUN) on the side.
At my regular ‘day’ job, I make about $20,000 gross a month on average. Some months it’s $16,000, other months it is $30,000.
Sometimes my rates include expenses (I pay for the hotel, food, etc) and other times, my rates are how much I earn gross, PLUS expenses paid by the client.
I spend quite a bit on hotels and traveling for my job (nature of the beast), and it comes up to about $3000 a month on average (luckily, I don’t fly.. I mostly drive to contracts or just stay in a hotel where I am).
I usually net about 60% of what I earn, seeing as last year, I made $180k gross and saved $130k net before paying business and personal taxes.
You can read: http://www.fabulouslybroke.com/2011/01/the-fabulously-broke-in-the-city-year-2010-in-review/for more info. I also included my personal spending in there, etc.
This year, I am paying about $30k in taxes, so let’s say that I netted $100k in savings.
It isn’t all roses and sunshine, because it costs money for me to be at a client site, and although I cut costs by staying in mid-range to low hotels, I drive, I don’t eat out every day and all that. Still, I wouldn’t trade it for the world… except for the fact that I don’t want to live in Canada any longer, but that’s besides the point.
Read: Consulting the Quick and Dirty FAQ
At a regular job with a company, I can make about $100 – $115k/year gross, and I don’t have to worry too much about:
a) healthcare costs (not really a huge deal in canada, but it’s a big deal in the usa)
b) all my retirement benefits
c) saving for taxes (this one gets a lot of freelancers, forgetting to save for their own business and personal taxes)
d) managing my bottom line between profit, expenses and what I get net per hour — this one is time consuming to do a budget, calculate how much you spend to be somewhere in a hotel, and how much you make at the end, and expenses are about 30%.
As for blogging, I don’t make much off the site because I consider it more of a hobby, not a full-time job, and I do make some money, but not enough to quit my day job.
For me to become a full-time blogger, I’d have to make more than $20k gross a month and work less than 35 hours a week.
Blogging as it stands for a hobby, sucks up on average 20-30 hours a week, and that’s all right with me because it’s a fun, fairly free hobby.
I am with BlueHost for hosting but seeing the numbers up there, it’s making me think I should try and get more server something-or-another.. but not to the tune of $1200/month, that’s for sure! I do not make even near enough off the blog to justify that. I make a fraction of a fraction off that.
Other than costing about $12/year for a domain name and $10/month for hosting, and one-time fees of hiring a webdesigner to help me figure out how to fix the design of my blogs as well as someone to help me fix existing problems with the code that kept screwing up everything ($1000 total over 5 years), I haven’t spent any money on advertising, SEO, etc.. Kind of makes my head hurt and I am not thinking of going full-time anyway, so I don’t want to turn my hobby into a chore. I find that once I even think about the notion of trying to make my blog something to sell, I lose interest. I don’t know why, but if it isn’t fun and a hobby that lets me write whatever I want, whenever I want, I am not really interested in it any more. It becomes a job, and I already have one of those.
The only other investment I put in, is just sweat equity. I write tons of posts and schedule them ahead of time (I have a backlog of about 18 months of posts on each of my two blogs — Fabulously Broke in the City and The Everyday Minimalist, because even in blogging, I like to be prepared.
All in all, blogging sucks up a lot of time, I could probably make more at McDonald’s working the same amount of hours, but it is far more satisfying and fun to be a blogger :)
Not sure what else I can offer in terms of perspective.
As someone who I know has been freelancing for some time AND running two successful blogs, I was anxious to get your perspectives on this.
My biggest takeaways from your comment was on the amount needed to save for taxes, the volatility of freelancing, and being well prepared with lots of money in the bank to cover your…assets.
Thanks for sharing!
I love how you have an 18 MONTH BACKLOG! That’s awesome!
Hi FB,
Just checked out your December net worth review of $155K. I’m out of the loop here, so just wondering do you just make money from your own freelancing hence the zero in December? You mentioned in a previous comment you have a dayjob. Is there no minimum salary every month?
Did you recently start making 200-300K a year or graduate from school hence the net worth?
Thx for the insights!
Shoot. I forgot to mention that most freelancers don’t make the money I do (in my day job).
I know of plenty of other people who charge about $50/hour if they’re lucky, and they still have to cover healthcare, traveling costs, etc… so they make about $100k a year if they work full-time, are taxed down to $60k net a year, and have to pay traveling costs + all other things which eat away at the $60k.
It’s basically the same cost as a full-time job, and depending on how much you work and how much you make an hour, you might be better off working for a company instead.
Also, if you don’t work, you don’t get paid.
I took off 2011 to travel the world and stopped working. I didn’t get paid for the entire year, I’ve just been spending and feeling guilty…
Other years I haven’t worked, have not been my choice either. Sometimes the market takes a hiatus for one, two years.. and you’re stuck waiting or you just join a company in the mean time to wait out the downfall (the recession put most of us out of work for a year and a half).
This is why you need 3 years AT LEAST saved in an emergency fund, in cold hard cash to cover your expenses so you don’t dip into your retirement funds.
Great discussion and a terrific post. In the book Guerrilla Marketing, the author suggests developing multiple income streams related to the same niche to really maximize your income. For example, along with writing a blog you give paid seminars and talks, write freelance articles, write books, produce DVDs, sell related products, etc. Here’s to everyone’s financial success in 2012!
Loved this post and all the discussion it created. Very realistic viewpoint of being a FT blogger, but as many have already pointed out, cost of living plays a huge role.
@Fabulously broke, I can’t get past the idea that you have a backlog of 18 months of posts. I’m trying to get one to two weeks ahead :)
FB is awesome! That’s why I asked her to post her opinion! She’s both a successful freelancer and blogger. I scrape by from week to week. This woman is on fire!
Thanks for breaking it down – because I have no idea the expenses as you scale. In fact, I don’t even know what the next step is once you make a few advertising contacts – just shows where my site is in the game, haha.
Of course, my sarcastic site title pretty much sums up my goal – running DQYDJ on the side. Que Será Será on the income side…
This has been a very interesting and informative post to follow! Love it! :)
Blogging and freelancing are 2 VERY different things–even though you’re certainly writing if you’re blogging (and most people seem to think that freelancing only applies to freelance writing).
It’s REALLY difficult to pay all your bills by blogging. Traffic typically doesn’t come quickly, and converting traffic to cash is even more difficult.
On the other hand, freelancing/consulting is a route that’s MUCH EASIER to be successful at and have it replace your day-job salary. And remember, freelancing/consulting is much more broad than just freelance writing (which, unless you’re in a very select niche, typically doesn’t pay well). Take stock of your skills, because there’s always a way to monetize them as a consultant/freelancer, and once you can identify a profitable niche, it’ll make it easier to find work, charge a higher rate, and have less competition.
Great analysis Sandy.
I don’t think people realize the other hidden costs associated with blogging. Plus, who knows, blogging hasn’t been a profession (is it even one now, really?) for very long and doesn’t have a long term proven track record. Something tomorrow could derail the entire blogging sector. Internet time moves more quickly then regular time, plus the entire basis of blogs are words, and words doesn’t really create much of a moat around a business based on blogging…
If I could grow my income stream for my blog to something like Flexo’s multiple (3 times), then yes I would go full time because I would have a two year savings cushion to see where I could take it.
Nice job, what a traffic generator!
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Interesting breakdown – too bad the title makes no sense. There are people reading and commenting who blog/freelance full time. And you’re telling them they can’t do it? ;)
One other factor to consider is someone who builds up their blog (or other business) up to a certain income working part time, should be able to increase their income (or income growth at least) if they can dedicate more time to the business.
I spend less than 10 hours per week on my business, if I went full time, I would probably spend 50+ hours per week. I would expect the income to go up as a result.
Good point Mike. I’m sure if I wrote a post on how easy it is to make $60,000 a year blogging, tons of people will comment and say it’s not that easy!
You provide another bullish datapoint as to why making money is so easy offline and online. Nobody should be poor or unemployed as a result. Bull market!
How did I miss this post all along? Interesting post and comments. At the end of it, my decision is to go where i am satisfied. At present I am satisfied with full time job and part time blog.
If at all my traffic explodes and I don’t have blog money to pay for the hosting, I don’t care who are able to load my page and who doesn’t. As long as you love your day job, you don’t care really who reads your blog and who doesn’t, do you?
If your day job sucks and you don’t have enough blog income left…blame the president.
Just got to subscribe, and you’ll never miss a thing! :)
Holy Moly, I just got caught up on this thread — reading every single comment. So much has already been said that I’m not sure what I can contribute to the discussion, other than:
1) I firmly believe it can be done, and many of the commenters here are living proof;
2) Many of the expenses cited in this post are quite high. A high-deductible health insurance plan with an HSA runs about $100 – $150 per month per person, which is a far cry from the $550 cited. Furthermore, daily posting is not necessary;
3) It helps immensely to live in a place with a low cost of living. I cannot imagine full-time freelancing or blogging in Manhattan (although I’m sure its possible), but in a place like Atlanta or Denver it is quite reasonable.
It’s easy to get caught up in the dream of being a full time blogger, but for me that idea put too much pressure on blogging and it no longer became fun. As Sam said, once you get to a certain income level (although I’m not at $350K), it’s not easy to replace it blogging. It took Flexo many years!
I’ll stick with my day job until retirement and then say I’m a full-time blogger.
Is it possible to eradicate that idea and just focus on writing to keep it fun? Hate to see you burn out.
Absolutely! I’ve decided to do exactly that.
Thank you for this very descriptive explanation. It’s really hard to be on your own considering the bills that you need to pay every month. You’ll get tired not by writing but by thinking on how to make ends meet. But somehow, I think it will really take a lot of effort and time before you can generate income being a blogger, you probably need to be more patient, resourceful and be ready with extra cash in hand..:)
I read this post a few days ago and had several reactions to it. It’s definitely sobering and it’s true blogging isn’t going to make the majority of us wealthy overnight. I would probably not share this post with someone who wants to get started blogging as it might be too discouraging, on the other hand it would certainly help to weed out those without a lot of stamina and endurance to keep on plugging away no matter how dismal the outlook might be. Or if you are a personality type that is bound and determined to do the opposite of what you’ve been told this could well fire you up to prove it wrong. For me, for now it is a fun hobby and a way to bring in a little extra income. I won’t be quitting my day job anytime in the near future.
First off, if you’re making 60K and paying 45% in taxes, you really need a new accountant. I don’t hate taxes, I actually like paying them because they benefit society and my family, but I don’t pay a dime more than necessary.
Second, you have to figure out what you really want from your business. If you’re committed to living in NYC, then there are tradeoffs. But, if you fully exploit the internet for it’s ability to make you location independent, then you can cut those costs significantly.
Take that 60K. Spent $1000 bucks to create an LLC and hire an accountant. Run all your expenses (cell phone, internet, car, portion of house/apartment, etc) through the LLC as business expense. You should be able to use most of that 60K to pay your bills and expenses, then only pass through whatever’s left to yourself as a salary. If done correctly, you can probably reduce your taxable income to the lowest tax bracket in federal, state, and local. Or, move to a state with no income tax and then you really see some returns. If you do have any money left, shoot it straight into an IRA, pre-tax, and then you further reduce your tax burden.
The first thing I’d do would be to list all the states with no state income taxes, and countries that are cheaper with good internet access that I’d enjoy living.
San Francisco/NYC are expensive!
Great Post. It is important to keep in mind that you are being realistic. I am new to the world of blogging, and to read an article like this is important. It doesnt mean that i need to quit blogging because it probably will not result in my “full time job.” I blog for fun, and if I can make money in the future doing it, then that is great. If you really enjoy blogging, then you may be part of the few that will be successful and do it full time.
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There goes that dream. Kidding. I never thought I would be able to do that, and that was before considering all the numbers that you took the time to research, Thanks for illuminating me as well as many others
Interesting post. Yes, I once read a woman who wrote that trying to support her family from writing was like trying to support a family off a lemonade stand.
But then the writers I told that to said, “No way!” After all, they still worked in corporations.
While I will really admit it can be challenging to make money online, it is truly possible, and thank God I’ve been able to make money online since 2006. And thank God for my husband’s job and health care!
It really is the spouse with the stable job and health care that is so helpful. With that, I believe most everybody should go for what they dream of doing, at least for a year or two.
Glad I have one of those:) Really– he has been really supportive as I found my way online, even in the very beginning, when I only brought in several hundred a month.
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Wow! Tons of comments. I don’t think many make it for solely their personal blog. It is the side opportunities: staff writing, social media consulting, blogger support businesses, etc that can lead to a livable income.
*Balling up piece of paper with blogging full time plan on it* Guess that idea is out. :-)
We need a minimum of $8000 a month for my husband and me to stay home. We make about $2000 from my blogs, $600 from rental income, $1000-$1500 from side income like commenting or my hubby’s reffing, and the other $4000-$4500 has to come from our blog advertising business or we have to find another job to fill in the blank. And we really shoot for $10,000 a month since we want to save something every month too.
For us, taxes are “only” around 25%-35% total since there isn’t state tax in Texas. Exactly how much we owe obviously goes to the higher end of the spectrum during good years.
This is a great article, and puts a nice dose of “reality” into my mind. No worries though, as my plan all along is to blog for fun and to help others. It is a hobby after all.
Although, I would think if you wanted to blog full time, one would want to invest the money from blogging into passive income streams (preferred stocks, real estate, etc) so that you have more than just blog money when retiring…
Hi Sandy,
Great post by the way and fantastic breakdown of the reality to blogging. Maybe you could guest blog for me some time under my wealth building silo?
Blogging is/can be challenging. I don’t think most approach their blog as a business though, meaning, there is no business plan. The blog itself is not mapped out according to personal passion, brand, content, marketing and monetization. This makes it difficult to create content at a steady rate – of the blogger is all over the place for instance.
Every blog requires R&D plus some time to let your head breathe and your hands rest. Changing things up with your posts is another way to keep it flowing and fresh such as switching from writing/photos, then video for a post. Search engines love this! Plus all the SEO standard stuff. The Key is automation as much as possible until a blogger can outsource. Every new blogger should create their own content first to taste the work involved and to set the precedent for future outsourcers they hire.
Costs involved all depends on the business plan. Every business starts small and builds big adding necessary things as you build and as needed accountant etc… Remember, if our vision is big enough, our drive deep enough, and our financial intelligence smart enough we can build blogs that exceed our financial expectations. I learned a philosophy long time ago, work smarter not harder. I treat my blog as an asset not a liability alone. the greater part must end up the asset.
Is our blog(s) such a passion that we can turn it into a cash flow investment?
Best,
Joe
Haha, this is great. I wasn’t really thinking of blogging full time because what I post now and how much I ‘socialize’ with other bloggers is as much as I can handle, what with a family and stuff. I already know it’s not really an option for me, but to have it laid out like this…well, now I’m positive that it isn’t an option for me, lol.
Who bumped this post? ;) I’m neither freelancing nor blogging fulltime, but I am working for myself and I sure do love what I’m doing :)
Just as a general comment here, I think that everyone’s situation here, and my position is a bit unique in that after I jumped ship, so did 3 of my friends, including a former boss!
Looking back at things, here are some important factors for some peace of mind:
* Savings
* Low income requirement
* Ease of returning to the work force.
Taxes are high here in Canada, but if you make $20,000 a year you’re not going to be paying very many of them. It’s very possible to live an OK lifestyle on $30,000 a year, especially if you’re a couple because many of your expenses come down substantially, like shared transportation and shared housing.
The other thing is that if you’re self employed, your overall tax rate will quickly rise to 30% – 35% at say, $35,000 salary a year, but if you bump that to $100,000 a year your overall tax rate is very similar and still around 35% to 40%. So, while the absolute portion increases dramatically, the portion as a % does not increase all that much. Once you surpass $100K, it may make more sense to stop paying yourself salary because the taxes will become quite prohibitive.
While a self-employed person pays more taxes (health services tax, workers compensation and so forth), the fact that you can pay for stuff with pre-tax money helps to compensate for this. Need a new computer? Business expense. Need internet access? Business expense. Just don’t be shady about it and you’ll be fine.
Finally, don’t discount the value of it as a learning experience. Education is not only a diploma or certificate, and learning doesn’t stop once you leave college.
Good points Kevin, and I agree about the benefits of having a business.
a 30-35% effective tax rate sounds VERY onerous on an income of only $35,000. The same 30-35% effective rate is on income of $500,000+ here in the US! I do enjoy the good business expense for sure!
Just wanted to clarify I mean total payroll costs including employer portion — for me it’s all tax cause the money goes out the door either way. ;)
Some other things I’ve discovered on keeping down costs, with the assumption that we’re talking about an Internet-based business here:
* Outsource things not related to your core expertise or critical business expertise.
* DO NOT OUTSOURCE your core expertise or critical business expertise.
* Don’t get an office. Use coffee shops, libraries, or just work at home.
* Don’t spend on other things that may not be necessary.
* Don’t be afraid to tell a vendor that they’re asking for too much money. This might not work on a giant, but it does work with smaller companies.
Good luck out there! :)
I have the same point of view.
And I’m starting to burn out with my blog, maybe I’ll quit and just enjoying to post without impression to get any money from it.
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