Anyway, Karen confirmed what I suspected. Except for an extraordinary few, most people won't be able to earn enough through residuals to sustain them indefinitely. And for things like books and blogs, it would take a lot of time to maintain them, so not really "passive" and any residuals would dry up quickly if not maintained well. Unless you outsource the work, which I think MMM is doing now.
And if that $70-100k for that business blog is per year, that's still pretty successful.
I didn't even thing of speaking engagements. Not much of an opportunity for "residuals" unless you're pitching a book or something as well.
I wonder how much folks like Nords and Fuego make for their books and blogs. They're already retired, so any extra income isn't necessary, but must be nice.
Whoa whoa whoa, back up the truck here.
The Internet has removed the "extraordinary few" qualifier. The barrier to success is so low (and so cheap) that you could trip over it. Your startup costs range from $75/year (cheap website hosting) to $500 (one-time tools and services).
I'm not sure what you think MMM is outsourcing. He has a tech admin maintaining the servers, but his biggest problem is buying enough bandwidth for the traffic. Day-to-day traffic is predictable, but when his posts or video interviews go viral then he has to upgrade to yet even more processors and gigabytes. He still handles all of his own advertising and affiliate sales, and he still writes his own posts. His spouse (also a programmer) does some of the website (not server) maintenance.
I report my royalty income every six months (right after the check arrives). You can read the latest report here:
"The Military Guide" Sales Update (The GSA Schedule Rocks!) - Military Guide
Keep in mind that I donate all my writing revenue (royalties and a little affiliate income) to military charities. (That $3000 total does not include eight months of blog advertising income from 2012-13.) Once or twice a year I also get $10 from Amazon for all those of you (thank you!) who've bookmarked my affiliate code for your purchases. If you generate money for The Military Guide, then you're all supporting Wounded Warrior Project and Fisher House.
I'm not sure what you mean by "maintenance" for a book. In my case it's asking the publisher where the royalty numbers came from, and then waiting for the corrections. In a year or two (as the initial print run sells out) I'll update the examples with 2016 numbers and they'll send the second edition to the printers. That might cost me about 20-40 hours of research and editing.
Ellie Kay, Scott Berkun, and Mary Kelly will tell you that most books only augment a speaking career. One book may get on a NYT best-seller list or get lots of Amazon reviews and generate a huge spike of royalties, or you just keep writing and speaking until you've accumulated enough assets. In Ellie's case, 15 books over the last 15 years adds up. For others, their wealth comes from writing a book series with each volume priced at $1.99 and the first book given away for 99 cents. By the time you're four or five books into your formula, you have a core audience that doesn't mind spending the $1.99 every 6-12 months.
As for blog maintenance, that's "not a lot of time"-- just a few hours a week. Most of my new blog posts come from answering reader questions (through the blog and through e-mail), so when the book ad appears on the post that's the only marketing effort. I also enjoy doing podcasts and videos with other bloggers, but my contribution is showing up for 30 minutes to chat about military financial independence. In other words, all of my "maintenance" is done through typical coffee-shop conversations and my words get reformatted for a wider audience.
A weekly blog post takes me from 20 minutes to two hours to write (from a blank screen), and another 30 minutes to format for publication (including imagery and social media). I'm highly efficient after 500+ posts, so most of my time is closer to 20 minutes than two hours. I write for at least an hour a day, but I spend the rest of my writing time on my next book or on other frivolous topics... personal entertainment, not income. I'm considering dropping down to a blog post every 2-3 weeks but I enjoy switching topics. I also can't [-]shut up[/-] stop writing, so I might as well generate blog posts and put book ads in front of reader's faces.
When I started Google AdSense on the blog in late 2012, my first month was $133. By the time I sold the blog it was up to $250/month. My biggest time-sink was about six hours of reading the Terms & Conditions and tweaking the plug-in to put the ads in the right places. After that I spent less than an hour per week on the advertising.
I sold the blog in late 2013, although I contribute content on a three-year earnout. The new owner invested about 200 man-hours of initial effort on boosting the blog's ads and affiliate income (like USAA products) but he also has a full-time job (courtesy of the U.S. Army). Today he spends maybe 1-2 hours on the blog per week, if that, and most of it is creating keyword-rich posts that generate a ridiculously high amount of traffic (like "The 2015 Military Pay Chart") and advertising income.
He shared some numbers with me about six months ago. He's not shopping for a Bentley, but the blog pays an income that would let him live nearly anywhere in the country just on its 1099-MISCs. He could live rich in Thailand or Latin America or Andalusia. When he retires from the military in a couple of years, he'll have more money than he needs. However he's also a serial entrepreneur who will probably spend the rest of his life building projects to generate 5-6 figures of annual income. His other blog subjects are all over the freakin' place like a hyperactive six-year-old. It's not magic-- it's just figuring out the process and then optimizing it for efficiency... and recreating it for each new site that you decide to build.
Take a look at Pat Flynn's work on SmartPassiveIncome.com with SecurityGuardTrainingHQ.com and FoodTruckr.com. He built both of those last two sites from scratch, and he didn't even have a topic in mind when he decided to start the project. He fully disclosed all of the tools & techniques that he used. (Those posts are still on his site.) He spent 100 man-hours or so of effort on each before they launched, but since then he's spent very little time on them. Today I doubt that he spends more than 1-2 hours per month gathering their traffic/revenue data for his monthly updates. He hasn't even published new content on some of his sites for years. All of his current labor goes into his new six-figure projects, but meanwhile the 2-3 blogs that he's created over the last six years are generating a living wage with almost no effort. Take a look at his income reports here:
My Income Reports Yeah, he pulls down over $1M/year from his hard work, but focus your attention on his little sites that pull in $500-$2000/month.
As for Pat's $1M/year income, I personally know three other blogger/entrepreneurs in that range. They are very good at iterating on a successful process, and each project teaches them something new for the next project. They have also learned to delegate tasks to freelance staff, so when they earn that seven-figure income they also pay out at least 30% of it in expenses. Pat (and his buddy Chris Ducker) discuss those techniques all the time on their blogs and at their seminars. If I gave up the ten hours per week that I devote to surfing then I could easily double my annual income.
My cousin runs a foodie blog. She doesn't even know how to maintain a website, let alone build a mailing list or an auto-responder series or a sales funnel. She just likes to cook and take pictures of the food, and she writes like she's talking over drinks at a local bar. She's been at it for three years and she barely even posts twice a month. She earns all of her income from Google AdSense and Amazon Associates. Last year she had her first $1000 month. Someday she'll publish a cookbook (as an eBook) from her site's recipes and sell it through Amazon's CreateSpace. That will easily add $500/month to her earnings.
Literally hundreds of bloggers have read Pat's posts, copied his methods (for their own topics), and built their own income streams. The minimum required maintenance is 1-2 hours/week to generate a living wage, but most of the growth comes from your site's longevity. (Some of my posts outrank the Department of Defense's and the military services' websites for some keywords just because I wrote about it first.) Getting the income stream up to the "living wage" level takes about 18-24 months, and much of that timing is a function of the weekly networking/promotional effort. Everything after that is either passive income (1-2 hours per month) or building it to a higher level.
I've attended three FinCons, and I'm eagerly anticipating FinCon15 (Charlotte, NC, 17-20 Sep). 500 bloggers/entrepreneurs along with financial companies, publishers, and other media. The entrepreneurial spirit in the hallways is so thick that you could cut it with a chainsaw.
Should You Attend FinCon15? - Military Guide
We also do local meetups throughout the year, although Oahu has not held any yet. If you can't attend then spend the money on the virtual pass and watch the videos (another way that the FinCon owner generates a lot of passive income).
The other side of this gold-rush business is the thousands of blogs that are abandoned every day. People start with enthusiasm and high hopes, but they lose interest in the topic. They're not willing to put in the weekly effort or they're inefficient... or life happens and the blog is a low priority.
So you have to be interested in your topic, and you have to be willing to keep at it for about two years. The carrying costs are low and the information is everywhere. It helps to join a mastermind group and to do a lot of reading, but that follows directly from the "interested" part.
Let me summarize it this way: anyone who's watching an hour of TV every day instead of creating a blog is wasting $15K-$25K per year.
