How I Earned $505,813.50 from My Blog in 1 Year

chalkBoard-graph-income-report

Last year, my business earned $505,813.50.  It feels incredibly awkward for me to say that (as in, pants down walking around downtown kind of awkward).

I’m not really the kind of person that feels comfortable sharing my personal finance information, but I have so many friends and family members who struggle to make ends meet that I created Income School as a way to help people provide better for their families.  I know that by being open about my numbers is a way I can help others to stay motivated to get to where they want to be–and helping you is more important than me feeling comfortable.

So there, I said it.  In this post I’m going to show you exactly what I did to make it happen.

NOTE from Aug 30, 2016: This is the last income report I ever published.  I have decided not to publish further income reports for legal reasons.  I keep this one online just so you can hopefully be inspired to know what’s possible with a blog.  The only thing I’ll add is that my businesses are continuing to do well.

A few notes before we begin

Obviously, income doesn’t matter if your expenses eat it all up.  Last year, I had way too many expenses.  I spent the entire last quarter of last year selling off office equipment, cancelling subscriptions, and doing everything I could to cut expenses to the bone.

Last year, my business had expenses nearing $100,000 but well over half of that was spent on employees (which I no longer have, by the way).

After cutting unnecessary expenses to the bone in the fourth quarter of last year, I was quite afraid that my income would go down as a result.  The opposite was true.  In fact, my business is producing MORE income on FEWER resources now–mostly because of the increased productivity gains earned by simplifying every aspect of my business.

And then there are taxes.  In the United States, we pay an unreasonable amount in taxes.  In fact, my tax rate on every dollar I earned toward the end of the year was 47.5% (including federal and state).  The United States has a progressive tax, so the dollars you earn up to say $50,000 are taxed at one rate, then your next $50,000 are charged at a higher rate, etc.  The highest tax bracket (which I’m in) is 40% for federal tax, and the state tax is 7.5%.  So unfortunately that means I had to pay about $90,000 in taxes last year.

Not to rant too much, but the practical effect of this progressive tax is that I have very low motivation to go out and earn more money toward the last quarter of the year.  By that point every dollar I earn is taxed at nearly 50%, so I put in the same work and only get to keep half of what I earn.  If the government were at all serious about creating jobs, it would let me use the $90,000 in taxes on hiring an employee or two.  It’s robbery! [Rant completed]

Last note, I won’t be producing monthly income reports like Pat Flynn and John Lee Dumas do.  There are a few reasons for that: (1) I don’t like feeling the pressure of needing to improve my income every single month.  When I get too focused on that, I end up making bad business decisions.  (2) Frankly, I’d like to focus more on how I earn a living, not how much of a living I’m earning.  This post is motivational and (hopefully) helpful.  Now that you’re here and motivated, I’d like to focus more time on getting things done than dreaming.

Here’s the breakdown of where the $505,813.50 came from

  • Online classes – Approximately $267,000.00
  • eBooks – Approximately $22,000.00
  • Digital Downloads – Approximately $165,000.00
  • Affiliate deals – $37,771.05
  • Miscellaneous – About $15,000.00 (Including teaching workshops, private coaching, selling articles, etc)

Note: If you listen to podcasts, be sure to subscribe to the Income School Podcast (RSS feed) or the Income School Podcast on iTunes.  Listen to episode 12, which is an audio version of this income report and includes many, many more details.

About my online classes

I have spent the last 3 years building up my online classes business.  I now have online courses available.

Here’s how I do my classes: Each class is made up of 30 videos.  So students watch a 10-minute video lesson every day for a month.  While the videos are available to the students forever, they only have 30 days of instructor access.  I give my students UNLIMITED access to me.  They can email me, call me, Skype me, send in photos to get a critique, etc.

So while the $267,000 from online classes is amazing, it doesn’t come easy.  It means I’ve created 44 HOURS of professionally-produced tutorials and I spend UNTOLD hours working individually with my students.  Most internet marketers are NOT willing to do that.  They just want to create a simple downloadable product and call it a day.  I’m putting in the time with each and every student, and while it’s quite taxing, it is also rewarding.

About my eBooks

This area of my business saw a dramatic drop last year.  In previous years I’ve earned up to $80,000 from my eBooks.

The reason for the drop this year is simply because I haven’t even touched them in about 2 years.  I created them when I started my business and they have run completely on autopilot since then.  The books about technology–meaning that some of them are getting outdated.  Also, some of them are not of very good quality.  My beginner book is quite good but some of the others were created in 5 days and thrown onto Amazon and Smashwords before the ink dried.

I should put more efforts into the eBooks side of the business because it is truly passive income.  In fact, if I had the stamina to write eBooks all day every day, I could probably earn $505,813.50 just from passive income from eBooks.  But the fact of the matter is that I usually feel like breaking something after writing an eBook.  Cranking out 55 or 80 pages (my books are quite short) is not my idea of an enjoyable work day.

Still, if I were starting my business today, eBooks would undoubtedly be a part of my strategy.  I earned my first dollars online by writing eBooks and it gave me the motivation to do this full time.

 

Affiliate deals

Although it only brought in $37k in revenue last year, affiliate marketing is one of my favorite aspects of my business.

To help my audience pick the right gear, etc, I created a page on my website called “Recommended Gear” where I break through the marketing speak and just recommend the best gear.  For each product, I link over to Amazon.com with my special affiliate link.  If you aren’t familiar with this program, you can sign up for Amazon Associates here.

What I love about the Amazon Associates program is that they give you 8% of the purchases that people make on Amazon after clicking a link from your website.  So you can link them over to buy a lens and if they end up buying a vacuum, you still get the commission on the vacuum.  Unfortunately, this percentage is only 4% for items in the electronics section.

Amazon Associates is something that almost any blog could add to their monetization strategy.  It’s a piece of cake to get your affiliate links for items, takes 5 minutes to sign up, and your readers don’t feel like you’re selling them on anything.  You’re just telling them about a product that you like and showing where they can buy it.

What I learned and what I’m working on now

The lesson I learned from last year is that expenses take a tremendous toll on a business.  I had expenses for all kinds of things: WordPress plugins, rent for a nice office space, training websites, I spent over $15,000 on a video system to produce higher quality tutorials, etc.  The expenses neared $100,000 and I felt that was “investing back into my business.”

It wasn’t.  It was just unnecessary cruft.  It was exactly the things that made the business so bloated and complicated that it paralyzed my progress.

For example, I spent $15,000 on a system with cameras mounted all around the room.  I could sit at a desk and with the press of a button switch which camera was on me while doing a webinar or video training.  It was AWESOME!  Awesomely complicated, that is.  I spent way too many hours figuring that system out, and when I wanted to record a video it meant I had to go through a long process of firing up the system.

In the end, I got rid of every single piece of that setup when I realized that the “investment” in that setup made it so I was producing half as many videos because they were so complicated to produce.

Another example of a foolish expense was office space.  My office was 18 minutes drive from my home–a short commute.  But it also took 4.5 minutes to walk from the parking lot up to my suite, another minute to unlock the doors and get set up for the day, and more time getting insurance, writing out rent checks, etc.  I did the calculation one day and realized I was spending 9 FULL DAYS per year commuting.  When you drive 18 minutes each way every day plus the other few minutes to get into the office, you’re actually wasting a tremendous amount of time.

So, I dumped the office space and now I work from home.  When I’m ready for work, I walk from the living room to my home office and start working.  Done.  25 minutes later and after a commute, the old version of me would just be sitting down at my desk.

My invitation to you

I wrote this to show you what is possible with a simple blog and a lot of hard work.  My business has been a tremendous blessing for my family.

I can show you how to create a blog like mine, and if you learn from my mistakes and do it the right way, it’s surely possible for you to do it in less time than it took me to figure it all out.  I want to invite you to start your own site, by following my get started blogging series.  It’s about 8 articles that walk you step-by-step through the how to set up a blog that can earn a decent income.

Comments

  1. I am a beginner and still trying to figure out the difference between an authority site and a blog. Both are active web sites, but what is the exact difference between the two?

    1. Authority sites are generally sites with a fairly broad topic where the creator has built up a level of authority in the subject. For example, Improvephotography.com is an authority website on the broad topic of photography. IncomeSchool.com is borderline authority/niche as the topic is reasonably specific (building an income through niche websites and podcasting) but it’s in a growing niche and we have built up authority on the subject. CamperReport.com is a niche site because it focuses on one specific niche (everything you need to know to get started with camper trailers) and we don’t profess authority on the subject. We simply provide useful information on the subject and occasionally our opinions about products.

      There isn’t necessarily a hard cutoff between the two. It’s actually more of a spectrum. Niche sites can turn into authority sites over time.

  2. I like what you guys are usually up too. Such clever work and reporting! Keep up the wonderful works guys I’ve you guys to my blogroll.

  3. Hey I know this is off topic but I was wondering if
    you knew of any widgets I could add to my blog that automatically
    tweet my newest twitter updates. I’ve been looking
    for a plug-in like this for quite some time and was hoping maybe you would have some experience with something like this.
    Please let me know if you run into anything. I truly enjoy reading your blog and I look forward to your new updates.

  4. Jim-

    My name is Cole Hoskins, I’m an 18-year-old who is looking for ways to make money while doing something I love. I stumbled across your blog and I LOVE it. I think doing a blog and making courses of my own would be sweet. The only thing is, I still have no idea what I would want to blog about. My hobbies include singing and playing guitar, but I also know how to grow a social media page decently well (I once had 50,000 followers on Instagram but decided to stop using it, as I was becoming too addicted and too consumed with it and I wasn’t really benefiting anyone, not even myself). I honestly am simply stuck and lost and have no idea what to do with starting a blog or even creating a steady income. All I know is that I want to start making money while doing something that I enjoy. I am going to continue reading through this and most likely will take your course – but do you have any other tips? I will take all the help I can get – it’s great to know that there’s a professional on the other side of this post. Thanks, Jim.

  5. What a great post – how inspiring! I think it’s really refreshing to see that you reviewed your expenses to get rid of the excess. It makes it seem more affordable for the rest of us to create quality content.

  6. Hi Jim – What is the set-up/platform you use to sell online video courses? I presume you have some kind of membership site that people gain access to for…30 days? How does this work, what is the software/plugin etc. Thx

  7. Interesting post Jim! I am interested in the traffic methods you used to get eyeballs on your blog. And also, how you have so many followers on social media.

    That’s the part of the story I’d love to hear. I wish you continued success!

    LeslieZ

  8. Thanks again Jim ……great style my friend ….lol …..its funny how we all seem to share similar story’s ….. Just wonderful 🙂 to hear

    Looking forward to popping in again …..

    Shane

    PS.. In one of the comments I left for you on your landing page was ‘that you where Blog No3 that I had visited’…. I ‘ve been fortunate enough to meet another person who is as genuine as yourself. She was the first blog I visited in my 9 week blogging journey …..her name was Kim Roach at buzzblogger.com ….. who in fact referred me on to your post ……life’s blessings to you both 😉

    [links removed as violation of comment policy]

  9. Thank you!! I have instituted many of your suggestions and plan on doing more. I am getting quite a following already after 11 days. Here is a Video Question. I have a D7000, would this be adequate for making video tutorials or should I invest in a better video camera? I will be doing tutorials of close up bench working.
    Thanks again
    Doug, the JewelryMonk
    http://www.JewelryMonk.com

  10. Hey Jim,

    Loved every bit of this post.

    After more than 2 years of freelancing, I’ve still not entered the passive income world. But your experience with eBooks has made me think again.

    Look forward to more of the same from you.

    Cheers

  11. Hi Jim, just came across your article – love your blog writing style & love your content. I am especially interested in the ebooks and you have definitely encouraged me to keep thinking along these lines – my niche and area of expertise is a sub niche of women’s health – so looking forward to getting my site/ blog/ ebooks/ affiliates up & going soon. Look forward to getting your regular updates. Cheers alison

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