Wednesday, April 2, 2008

Why Blogging is an Awful Way to Make Money Online

Following on my “Why You Will Never Be John Chow” post, I thought I’d touch a little on why I believe blogging is an absolutely horrible way to make money online. First though, let’s talk a little about the difference between Active Income and Passive Income. (These are my own personal definitions, by the way – others use these terms in different contexts, so don’t get them confused).

To me, Active Income is money that you make as a direct result of X-amount of work. Some examples would be:

- salary from a 9-5 job
- hourly wages from contract work on the side
- $20 you get for mowing your neighbor’s lawn
- selling a $50 product and earning $15 in profit

Passive Income, on the other hand, is money that you make without having to lift a finger… money that comes in 24x7, day or night, weekends and holidays included. These include:

- interest earned on a savings account or money market fund
- money from online advertising on your web sites
- recurring revenue from online subscriptions
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My goal, with all of my web sites, is to make all, or nearly all, my money from Passive Income. And, so far, that’s generally what I do. About 95% of my monthly revenue comes from online advertising spread across my various web sites. I get paid every time an ad is viewed or clicked, and I serve hundreds of thousands of ad views every single day. Whether I’m at my desk working or if I’m sleeping or eating or on holiday, or doing whatever, I’m earning money, 24x7. I don’t have to lift a finger to earn that money.

Ok, ok… so you want to make the vast majority of your money with Passive Income. Fine. So why is blogging so awful?

Well, in my view, maintaining a money-making blog just isn’t Passive Income. All of my web sites are 100% self-sustaining. Traffic comes in whether I update them once a day or once a month. I specifically chose to build web sites with this in mind.

A blog, on the other hand, is a huge… a HUGE… time-sink. If you don’t update your blog every day, or at least every other day, it will be considered stale and visitors generally won’t return to your site again and again. So its an enormous time commitment to have to write at least 1-2 posts a day. And unless you’re a fairly skilled writer, its damned hard to write that much and still keep things fresh without just rehashing the same ideas again and again.

So for me, blogging isn’t Passive Income – even if you do get your money from online advertising. Its not quite Active Income either – since the work you do isn’t tied directly to the money you make - but its something in between. (Yes, I realize the irony of me blogging about making money online, and bad-mouthing the practice all at the same time… but then again, I don’t make my money from blogging.)

Personally, I would much rather build a self-sustaining web site and update it once every few weeks – if even that – and just let the ad money roll in. What kind of web sites are self-sustainable? I’ll cover that in another post. :-)

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