Reflections On Making Money Online Since 2009

Financial Samurai has technically been making money online since it started in July 2009. I think I made $3 the second month the site was live. Whoo-hoo! Although I didn’t focus on making money online, the site began to generate revenue anyway. This is a classic situation where you do something you love and the money naturally comes.

By the time 2012 rolled around, I figured with the combination of my investment income (~$80,000) and online revenue I’d be fine if I took a leap of faith. Besides, my wife promised to keep working for 2-3 more years until she turned 35 as well.

The Gradual Shift Towards Entrepreneurship

From 2012 to the end of 2017, I decided to become more entrepreneurial. I changed my time split from 90% fun / 10% business to 80% fun / 20% business. The last thing I wanted to do was make Financial Samurai feel like a job when a job is what I had escaped.

But about a year after our son was born in 2017, I dialed up the business percentage to about 30%. Our monthly health insurance premium was rising to $2,000 and we had to plan for $1,950/month in preschool costs in 2-3 years. As someone who likes to plan ahead, I now had a purpose to make more money.

Once our daughter was born in late-2019 and the pandemic hit in early-2020, I decided to crank up the business percentage to 40%. I figured, if I was going to be trapped at home more often, I might as well make more money online. Larger family, larger costs.

Now that the pandemic is subsiding, I’ve decided to dial back the business percentage to 20%. After all, 20% was my happy state. And I want to be as happy as possible during the Yolo Economy.

Spending 15-20 hours a week writing, communicating, and negotiating is the sweet spot. Just enough time to stimulate my brain and plenty of time left for family and leisure. Find your ideal sweet spot and work like hell to achieve it.

Things To Know About Making Money Online

Hopefully, all of you have decided to figure out ways to make supplemental income from home after the lockdowns. Having an online business that can’t be shut down is extremely valuable, especially during the next black swan event.

If you want to make money online, let me share some thoughts I’ve learned since 2009.

1) Consistency Matters Most

In order to make money online, you must stay consistent with your product. Nobody wants to listen to or buy something from a business that is new or inconsistent. Your clients want to know you’re going to be around tomorrow, the next week, the next month, and the next year.

Think about life insurance companies. Would you buy a life insurance policy from an upstart? Or would you rather buy life insurance from a company that has been around longer than you? It’s important to believe the life insurance company will outlive you. Otherwise, your beneficiaries might not get paid out.

Doing something consistently for one year is the absolute minimum if you want to make money online. Once you produce a product consistently for 36 months in a row, I’m confident good things will happen. And if you can stay consistent for 10+-years in a row, business success is all but an inevitability.

When you come to Financial Samurai, you know that if you subscribe to my post e-mail distribution list and newsletter, you will be able to read something insightful for free at least a couple of times a week. You will gain different perspectives from someone who has written about personal finance since the last global financial crisis.

2) Build A Brand

Why does Rolex get to charge $10,000 for a Milgauss GV watch that requires $1,100 in maintenance every five years when a similar, maintenance-free watch from Casio can only charge $500? Why does Hermes get to charge $200 for a silk-tie when you can get a similar-looking tie for $10 at Ross?

A strong brand is what enables you to stand out from a crowded field. A great brand is what enables you to charge premium prices. A business with a strong brand tends to gain a disproportionate amount of opportunities.

For many solopreneurs starting out online, their brand may be themselves. Over time, they craft their brand based on their evolving vision. You need to spend time figuring out what your business stands for and then spend the effort to build your brand.

The Financial Samurai Brand

Financial Samurai is a leading, independently-owned, personal finance site that helps readers slice through money’s mysteries. Because money is too important to be left up to pontification, everything written here is based on firsthand experience. When you come to Financial Samurai, you know you will read useful information to help you make more optimal financial decisions.

The online media world is interesting. You either want to hire a bunch of freelance writers to produce a lot of content to attract a lot of traffic quickly. Or, you can go my route and slowly write almost everything on your own. Personally, I want to read articles by people with the most expertise.

A journalist or a freelance writer is an expert in writing and reporting, not necessarily on the subject matter. It’s up to you who you want to read.

I decided not to go the freelance writer route because I thought it would dilute the Financial Samurai brand in the beginning. For the first 10 years, I wanted to build Financial Samurai into a respected personal finance site written by someone with a finance background. Only after 10 years, would I consider hiring freelance writers that embodied the brand and take a step back.

3) Decide On A Lifestyle Business Or Something Bigger

You must decide whether you want to build a lifestyle business or build something potentially much larger. If you can hire, inspire, and manage the right people, you could make a lot more money online. Just know you might not be happier.

When I first started, I decided I’d rather have a lifestyle business that made a comfortable amount of money than a big business. The blue sky scenario I presented my poker buddies at the table was this: Make $200,000 a year working 15-20 hours a week on something you enjoy with nobody to report to OR work 80 hours a week for 5 years for a 25% chance of a $25 million payout.

I decided to go alone because I don’t enjoy managing people. Further, I had enough passive income to cover my basic living expenses. An additional $50,000, let alone $200,000 in online income was more than enough to live well. When my wife finally negotiated a severance in 2015, I was no longer alone. I had her, which was perfect.

Until this day, it’s fun to do some brainstorming with my wife for 30 minutes a day. It reminds me of when we’d study in the library together as college students. Having someone to keep you motivated is nice.

She helps write on occasion and spends most of her time working on back-end tasks. We’ve also learned to focus on our strengths and utilize the concept of separation of tasks. To not have to deal with office politics and HR issues is also lovely.

4) You Don’t Need To Be An Expert Or Have The Best Product

One of the biggest fallacies in making money online is thinking you need to be an expert in your field or have the best product. I thought this way until 2017 when I started observing other online businesses with fewer credentials than I thought was necessary, do very well.

Here are real examples that prove being an expert doesn’t matter:

  • A guy with a pool and hot tub cleaning site who has never owned a pool or hot tub: $400K+ a year
  • An accountant with a plumbing and HVAC lead-generation site that has no plumbing or HVAC experience: $100K+ a year
  • A gal who started a site on how to make money online when she wasn’t making any money online: $1M+ a year
  • A TikTokker in high school teaching his followers about investing in meme stocks with his $500 portfolio: $100K a year

Making money online is not like having to go to medical school for four years and then residency for three years before you can perform heart surgery. Literally anybody who knows how to type can start a website and earn money. You just need to start and learn the fundamentals of online traffic acquisition.

You Can Hack The System

Google likes to go on and on about the importance of Expertise, Authority, and Trust (EAT) to rank well in search. But based on my observations over the years, EAT matters much less than you think. Google simply cannot properly measure a site’s EAT.

One of the reasons why site owners are able to hire a bunch of freelance writers and grow traffic tremendously is because EAT doesn’t really matter. If EAT matters, why are there literally millions of sites with no expertise that still do well in search? We’ve all stumbled across spammy sites and have wondered, wtf is this?

Google uses impersonal algorithms like content length, keyword count, and site speed to determine search rankings. There is an entire Search Engine Optimization (SEO) industry out there looking to game the system to help websites rank better. For example, SEMRush is a publicly traded SEO company worth ~$2.4 billion.

Example Of Getting Screwed

Unfortunately, writing good content or being original is not enough. I’ll give you an example of how gaming the system can trump good or original writing.

A while ago, I came up with the 30/30/3 rule for home buying. However, if you Google “30/30/3 rule” my original article won’t appear. A guest post I wrote on CNBC shows up. But other than that, random websites that give me no credit show up on page one. Google is not smart enough to even rank the original.

In fact, every time I publish a post, a half-dozen sites literally scrape my entire post and republish it on their websites. Usually, their posts won’t rank. But sometimes they do.

If you really want to make money online, don’t be like me and let pride and honor get in the way. There are plenty of people getting rich online relatively quickly by taking shortcuts.

5) Focus On What You Enjoy And Have A Mission

Given one of the keys to making money online is staying consistent, starting a business you enjoy will help you keep going. In addition, your business must have a positive mission. There is no way I would spend 10 hours writing and editing this 4,100-word post if I didn’t love to write.

One of my favorite mission-oriented businesses is TOMS shoes. For every pair of TOMS shoes purchased, a pair of new shoes is given to a child in need in partnership with humanitarian organizations. With such a mission, how can you not be motivated to grow your business?

Financial Samurai’s mission is to help everyone achieve financial freedom sooner, rather than later. The longer I’ve been away from a job, the more motivated I am to help people build more wealth. The freedom of not being beholden to anybody is priceless. I want everybody to have enough money to stand up for themselves and for others who’ve been wronged.

Every time someone sends me an e-mail or leaves a comment that some article I wrote helped them, I immediately get a power-up for another week. Helping people is addicting.

I also love my business because nobody has to pay anything to read my writing. I keep thinking about the poor kid on a computer at the library because they can’t afford a computer and internet at home. Putting up a paywall will never happen on Financial Samurai.

6) Choose A Profitable Niche

Not all niches are created equal. Some are much more profitable than others. Here are some of the more profitable niches online in no particular order.

  1. Fitness and Weight Loss
  2. Mental Health
  3. Dating and Relationships
  4. Pets
  5. Self-Improvement
  6. Personal Finance
  7. Making Money Online
  8. Beauty Treatments
  9. Gadgets And Technology
  10. Food

Everybody wants to look good, feel good, have more money, and be happier. Therefore, focus on a niche that provides these things and solves common problems. At the same time, focus on a niche where you also have interest and some expertise. The more interest and expertise you have, the easier it is to last.

I just so happened to focus on the personal finance niche because I wanted more money to have more freedom. I worked in finance for 13 years, went to business school, and invested in multiple asset classes for passive income. Therefore, writing about personal finance topics came very naturally to me. I simply had to write about experiences. It turns out, lots of people want the same thing!

If I had written about pets, I would have failed in under a year. I’m allergic to cats, don’t have a dog, and am not interested in getting a turtle. Therefore, I wouldn’t be able to generate enough traffic to sell enough pet food, pet toys, pet training books, etc.

Instead, I’d have to hire freelance writers to create a false reality that my website was the go-to source for pets. And the reality is, I could probably do it and make decent money online. But this path just wouldn’t feel right.

Related: Discovering Who Makes $1 Million A Year (Top 0.1% Income)

7) Your Income Potential Is Unlimited

If high schoolers knew how much money they could make online, I’m not sure they’d spend four years and all that tuition going to college anymore. If colleges knew how much people could make online, they’d all offer courses on online entrepreneurship.

Job income upside generally pails in comparison to online income upside. With over 3 billion people online and growing, an online business owner has infinite scale. Meanwhile, a typical person with a day job always tends to always face some type of ceiling. The ceiling might be a manager who won’t let you ascend until she ascends. Or, the ceiling might be due to what you look or sound like.

With online entrepreneurship, it is easier to decide how much you want to make and figure out various ways to get there. With a day job, you can rarely ever make more than your immediate boss. In a way, online entrepreneurship is like going straight to the corner office.

8) Decide Your Ideal Passive And Active Online Income Split

There are some people who have created niche sites that make money passively without doing any work after the initial setup. For example, one guy makes between $500 – $1,000 a month selling hunting knives. However, over time, more focused competitors tend to take over. Further, Google algorithms often change as well. Therefore, you always need to do some updating to your business to stay relevant.

Programmatic advertising income is considered passive once you’ve set up an ad network like Google Adsense or Adthrive. For example, I can write about a new pair of tennis shoes I bought. If I do, customized ads showing the latest Nike tennis shoes may start appearing on my site. If someone clicks on the ad or views it, I get paid. Or I can write nothing and just let traffic come to Financial Samurai from the search engines on various topics. Advertising will be displayed automatically based on the type of article.

Finding business partnerships is considered active income. Companies hire MBA graduates for Business Development roles all the time. It requires product understanding, negotiation skills, selling skills, and lots of hustle.

For example, I could start contacting all the top financial planning companies to see if they want to partner with Financial Samurai. If one was interested, then I’d have to come up with a partnership agreement that contains all the terms. Then I’d have to execute the agreement, fill out invoices, and stay on top of my accounts receivable. It can be a lot of work.

Discovering Big Demand

Given I want to run a lifestyle business, my ideal passive/active online income split is about 80/20. But during the height of the pandemic, I decided to flip the percentages around and search for or solidify existing partnerships.

What I found was that the demand to partner with Financial Samurai was much bigger than I had expected. I had underestimated the strength of the Financial Samurai brand. For so many years, I throttled my own money-making opportunities because I focused predominantly on fun. If I didn’t have fun, I wouldn’t want to write. But because I had fun, I kept going and the site naturally made more money. A little ironic right?

Business development can be enjoyable. It’s satisfying to negotiate and close a deal. However, everything has its limit. When I opened the doors to new partnerships in 2020, I was overwhelmed. It no longer became enjoyable trying to negotiate deals with so many potential partners. And as the economy opens up, there is huge pent-up demand to advertise even more.

Instead of going after all opportunities, I’m self-throttling again for my own happiness. Be OK with leaving money on the table. Given there is an endless amount of money to make online, you need to set a limit for how much is enough.

9) Build Your Own Moat

If you are serious about making money online, you’ve got to build as many diversified revenue sources as possible. This way, if one revenue source goes down, your other revenue sources will keep you afloat.

Being too dependent on Google is no good. You could easily be demoted in the search engine rankings one day without reason. Therefore, you must build a newsletter where you have full control over what gets sent to your most avid customers.

Being too dependent on one business partnership is no good either. The business partner could go out of business, cut its budget, or change its business. Therefore, you probably want to have at least two or three business partners per vertical. At the same time, you want to bet more on the winning business partner. Therefore, keep close tabs on how your business partners are doing.

The way to not be dependent on other businesses for revenue is to create your own product. I’m ashamed to say it, but mostly due to laziness, I’ve only created one product since 2009. That product is my severance negotiation book. At least my wife and I have updated the book five times and expanded it.

If I were to start over, I’d focus on building the free Financial Samurai newsletter from day one. I’d also create a new product every two or three years. It was just hard to do that because I didn’t start Financial Samurai as a business. I started the site as an outlet to deal with fear and uncertainty during the financial crisis.

But for those of you who are focused on making money online, you must own your distribution channel so you can better control your destiny.

10) Come Up With Clear Reasons Why You’re Working

Here is an interesting phenomena that happened to me in 2020. The more I made through active income the unhappier I got. That forgotten feeling of emptiness I experienced while in banking started growing inside. I began wondering what the hell was the point of it all? Trading more precious time for more money that made less of a difference felt bad.

To counteract this negative feeling, I made concrete financial goals for why I was spending more time making more money online. I needed a clear purpose for spending time beyond my comfortable 20-hours a week cadence. The reasons included paying for the following:

  • $2,500 a month in unsubsidized family healthcare
  • $4,000 – $6,000 a month in preschool and grade school tuition
  • $1 million for college for two kids in 14-17 years

Once I created clear reasons for making more money online, it became easier to grind away. Purpose matters! Ultimately, my goal is to invest online income to create more perpetual passive income.

But the reality is, I’ve been tricking myself because these expenses have already been covered by existing passive income. Therefore, I told myself after I bought my “forever home” in 2020 that I needed to build more wealth to pay off the new mortgage. The cycle never ends until you decide to end it.

11) Decide How Much Is Enough

Because your online income potential is unlimited, you might find yourself never feeling like you’re making enough. You look at other people with bigger teams, more traffic, more accolades, more revenue, and feel like you should do more. It’s like investing FOMO, but for business.

This “never enough” feeling is one of the biggest downsides of trying to make money online. At least with a job, you know that your salary is capped no matter how much you work. Therefore, you feel better slacking off on occasion. Being able to take paid vacation days off, go out for long lunches, and take paid parental leave for months is awesome! No matter how much you take it easier, so long as you don’t get fired, your day job salary won’t change.

The correlation with effort and reward tends to be much higher with online entrepreneurship. There is always something more you can do. Therefore, it is imperative you decide how much money is enough for you to be happy. If you do not stick with this amount, you will eventually become miserable.

It took me 13 years to find my enough to retire from traditional work in 2012 with just my wife and me. Walking away from a $250,000 base salary was not easy. But it had to be done for my soul.

It’s now taken me five years to find my enough online to take things down again with two young children. This time, walking away from money is not as hard, partly thanks to the bull market. But it’s really the kids. Having kids accelerates time because they change so quickly. I don’t want to miss too many more moments.

Related: How Much You Need To Make As An Entrepreneur To Replace Your Day Job Income

12) Appreciate Your Wins

As an entrepreneur, you will experience the highest highs and the lowest lows. The emotion is more intense because your business is your baby. Everything depends on you. It’s more personal too. Therefore, I suggest moonlighting on your business while having a day job first. Only after you see your side business gain some traction should you take a leap of faith.

As an entrepreneur, it’s often easy to dwell on the losses. A competitor might have copied your product. Google might have hit your organic search traffic. A client might have closed down and decided not to pay your last invoice. These losses take away motivation to keep going. Don’t let it.

During bad times, be grateful for your wins. Recognize how far you’ve come. It’s easy to get spoiled by any success you may have. Hedonic adaptation can be a real downer sometimes. Just the fact that you tried to run a business is more than 97% of people who don’t. As long as you are trying your best to produce the best product, you will likely never regret the outcome.

Even if Financial Samurai loses all its traffic tomorrow, I’m thankful for everything that has transpired since 2009. The site has grown far beyond what we could have imagined.

Making Money Online Is The Future

Just like investing in real estate in the heartland of America is the future, so is making money online. The key to building above-average wealth is to recognize long-term trends and allocate your energy and resources accordingly.

I’m excited to be a father because I can’t wait to teach my children everything I know about making money online. The ability to generate online revenue is one of the main reasons why I’m not stressing about them getting into a good college or land a good job. There are no longer any gatekeepers!

Thanks for letting me reflect on my online journey since 2009. I’m looking forward to taking a nice sabbatical after California fully opens up on June 15. Further, I’m ruminating over what to do for the next 10 years.I can’t remember being this excited about taking a long vacation!

Readers, are there any online or offline entrepreneurs out there? What are some reflections you have about running a business of your own? With the economy opening up, how is demand looking for you? What are some ways in which you have convinced yourself to step off the gas and enjoy life more?

Related: Why I’ll Always Regret Selling My Business For Millions

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