Can you believe it's almost fall? Kids are back in school. The weather will start cooling, and the online “summer lull” is nearing its end. That means busy months ahead for online entrepreneurs. Read on to see how I did in July and how I'm shifting my online focus with four months of full-time online work under my belt.
Why I Share My Online Income
In February, 2012, I earned $739 online. In the years since, my online income has grown from beer money to rent money to mortgage money to support my family money. It all started with a little side hustle, and now I'm self-employed full-time online!
In April, 2016, I left my day job as a Senior Financial Analyst at a Fortune 500 company to pursue my crazy idea of full-time online self-employment. I share my online income with all of you for a few reasons.
- Inspire people to start their own side hustle
- Show the true ups and downs of online self-employment
- Hold myself accountable to goals I set
If you want to see my monthly income breakdown since I posted my first income report in 2012, check out my Ultimate Online Income Tracker, which I try to remember to update every month.
What I’m Up To
Since returning from a trip to Aspen and Chicago last month, I've been fully focused on my online work without leaving town. With no distractions, I've been pushing through the summer lull with a combination of writing projects and web design projects through my company Narrow Bridge Media.
Since I took my business full-time, I have put some serious time into cleaning up my accounting books to make sure I'm tracking everything as expected. This month, I took a high level look at where my income is coming from, and it breaks down to three primary sources: writing, website support and development, and this website, Personal Profitability.
I often refer to the 80/20 rule, or the Pareto Principle, as a way to optimize efficiency and workflow. That treated me very well in my corporate finance career, and I've been looking at ways to apply the same principle to my online business.
If you are not familiar, the 80/20 rule explains that in most cases, 20% of your effort leads to 80% of your results, and the remaining 80% of your effort only brings about 20% of your results. This month when I took a look at my online income year to date, a very clear message emerged.
|Income Source||YTD Percentage|
Well that's a pretty clear 80/20 if I've ever seen it! If you take this blog out of the picture and focus solely on the freelancing business, it is more like an 85/15. If I only spent 15% of my time on website work, I would think this makes a lot of sense, but it turns out I fit into the Pareto Principle much more than I realized.
Lately I have been spending about 80% of my time on website projects and 20% on freelance writing even though 80% of my income is coming from writing and 20% from websites! The financial analyst in me knows what that means.
I am not making any sudden changes, but I am seriously considering winding down my website business to focus solely on writing.
Side Business Income
Narrow Bridge Media – All Online Income Projects
I set a revenue goal of $52,000 this year for my online businesses at the end of last year. That is $1,000 per week. But now that it is my full-time job, I am increasing my goal to $6,700, or $80,000 per year. Revenue is great, but I can’t pay the bills unless the business is profitable, so I'm also looking to keep business expenses as low as possible. By the end of the year, I am aiming for $10,000 in monthly revenue.
Revenue – Goal: $10,000 monthly by the end of the year
- Advertising Income (Affiliate + Direct) – $100.00
- Freelance Writing – $4,617
- Freelance Website Services – $675
I now pay myself a weekly salary through Gusto, an online payroll management service, and the business pays for my internet and health insurance as employee benefits. Because of that, expenses look a little different than they used to. I’m do not include my salary, payroll taxes, or health insurance below.
- Computer and Website Expense – $241
- Conference Fee (Podcast Movement 2017 early bird ticket) – $249
- Meals & Entertainment – $162
- SG&A – $69 (Coworking Office Space)
- Outsourced Labor – $274
- PayPal Fees – $10
- Telecom – $80
- Travel – $890
- Business Licenses – $51
Total Revenue: $5,392 Total Expenses: $2,026, Total Profit Before Tax: $3,366
That is two months in a row of declining income, which is not awesome but also not a huge surprise in the middle of the summer. Things should start picking back up soon, particularly if I can land some great new clients at FinCon next month in San Diego.
If you are new here and want to see more history, check out my earnings by month since 2012 at my online income tracker.
A few months back I signed up for Digit, and automated savings account that you manage via text message. Here is how my savings have added up with zero work on my part. The more I use it, the more I love it for how easy it is to use. With the demise of my 401(k), I may use this as my new saving source for our Roth IRAs.
- Total Savings Since Joining: $5,317.12
- Number of Transfers: 214
- Average Transfer Size: $25
If you’re interested, sign up for Digit here.
I am temporarily pausing retirement account contributions while we save up a bigger emergency fund and the business income grows.
If you have a full-time job and can get a 401(k) match, always take advantage. Since I moved to the world of self-employment, my retirement savings are changing a lot. Here is a snapshot of my long-time automatic investing in my retirement accounts.
If you have an opportunity to get any employer match, make sure you are taking 100% of that, or you are leaving free money on the table. If you have any old 401(k) plans from former employers, make sure to roll them over into an IRA where you can save on fees.
If you are not sure where to start with retirement investing, be sure to check out Betterment as an option. I have been a customer myself and love the ease of use of their product.
While I think most people are better off investing in low-cost funds or through a service like Betterment, I have a lot of financial education and do my best to make what I can in the stock market. I’m not perfect, but I’ve done pretty well. If you want to learn more about investing, check out my complete beginner guide to the stock market.
I have my individual stock portfolio listed below. In addition, I have (much more sizeable) investments in diversified funds for retirement and a holding of my former employer company stock in an employee stock purchase plan account at Fidelity.
Stock portfolio: GOOG, AMZN, BLK, BA, CVX, CSCO, COP, XOM, GE, JPM, KR, PM, SBUX, TEVA, WMT, WYNN
Market Value: $14,626. Cost Basis: $11,113. Current Profit/(Loss): $3,513 or 31.62%.
In addition to Charles Schwab, I have an account at Loyal3. Loyal3 offers 100% fee free trades and the ability to participate in IPOs, also with no trade fees. Here is a post all about how Loyal3 works.
If I did not have such great benefits from Schwab, I would seriously consider moving my primary investment account to TradeKing. I met their team at this year, and their product has grown to be a top-notch investment account offering. And trades are less than $5!
My Favorite Investment Analysis Tool – It’s Free!
The best tool I have found to help me keep my portfolio balanced is Personal Capital. The site helps me track and manage my bank accounts and credit cards too, but the site has helped me save hundreds of dollars per year by showing which investments are charging the biggest fees and how to balance my portfolio for my goals and risk tolerance. The site is completely free.
The stock market has taken a beating so far this year, but that doesn’t mean all is bad. The stock market moves in cycles, and time and again we see that timing the market doesn’t work. Instead, remember to focus your investments on the long-term return. If you are new to investing be sure to check out my in-depth guide to the stock market to get started with investing.
After a multi-year amazing run with no defaults in my Lending Club account, I have been disappointed to see more losses lately. Even taking out past due notes, my net annualized return is still an impressive 7.2% return on my investment. This is much better performance than any bank account and most investments. I have earned $533 in interest, so even with my losses and the potentials on the horizon, I am still way up overall.
Due to an increase in defaults, I have decided to draw down my cash balance. Including cash, my adjusted account value is $900. Because of recent losses, I have been holding onto the cash in my account while deciding on a new plan.
My Notes at a Glance:
- Not Yet Issued – 0
- Issued & Current – 47 – $843
- In Grace Period – 1 – $14
- Fully Paid – 57 – $1,424
- Late 16-30 Days – 0 – $0
- Late 31-120 Days – 2 – $9
- Default – 0
- Charged Off – 12 – $214