LIVING OFF DIVIDENDS & PASSIVE INCOME

I was so busy in May that I completely forgot to post April’s passive income summary. On the bright side, April was a been a record breaking month for me with total “passive” income amounting to $2,811.42. On the flip side, I’ve been so busy, I haven’t been paying attention to my sites and May’s income will probably be lower.

If you recall, the income for March 2008 was $2, 667.18, so this is $144 jump is a 5.4% increase. However, one of my stocks is a Japanese REIT, and it paid out a quarterly dividend amounting to about $230, so the $140 increase isn’t a real increase - it’s going to disappear for May. Besides, the jump from February to March’s passive income was 11.9%, so this isn’t as good. (In case your wondering why I’ve invested in a Japanese REIT, here’s a good posts on why Japan’s real estate is a good investment.)

I’ve been lumping in my online income with my passive income, but it isn’t really passive. It may not be very strenuous and it gives me geographic flexibility and I don’t have to show up for work every day, but there is some effort involved. Unfortunately I’m not as clever as Courtney Tuttle, who says he has a site that makes $3,500/month with no ongoing maintance. I’ve just had some limited success with Domain Parking, buts that the extent of my truly passive online income.

Simply put, my online income isn’t really passive. It’s a lot more passive than the website and seo consulting work I do by a huge margin, but its not as passive as dividneds or royalty checks.

So what are the best ways to earn really Passive Income?

Buying Cheap Domains

GoDaddy currently has a great promotion on .info domains. They’re currently selling for only $0.99 instead of the usual $9 dollars. That’s about 90% off the regular price, and I spent the past several days getting about 15 domains that I think I might be able to monetize in some form or the other.

People might feel more comfortable or might more easily remember .com domains, but if you’re targeting search engine traffic it probably shouldn’t matter very much. A lot of the domains have dashes in them (example Arts-Antiques-Artifacts.info, but again, for visitors coming from a search engine it shouldn’t matter too much.

I also got a few domains that I think are pretty cool like Discount Ipod.info, Discount Seiko Watches.info and Buy Cheap Paintball Guns.info.

Domain Parking

Finally I’m getting some traction with my passive income! After all, that’s what this blog is all about. The total for March 2008 is $2, 667.18, and I’m ecstatic to have broken the $2,500 per month barrier. If I can sustain it at $2,500 per month, thats $30,000 per year. While I’m not living in luxury, it’s definitely a great safety net to have. This represents a 11.9% jump from February’s passive income and it has been growing at a steady clip for quite a while now. Hopefully, I shouldn’t have a problem maintaining it.

Here’s the breakdown:

• Online Income: $1645.30
  • Adsense: $339.28
  • Linkworth: $456.70
  • TLA: $103.61
  • Kontera: $62.07
  • Direct Ads: $330
  • Prosper Referrals: $175
  • Amazon: $117.82
  • Domain Embarking: $60.82
• Savings Accounts: $133.10
• Real Estate Trust Deed: $0
• Direct Oil Drilling Investment: $270
• Dividends from Canroys: $517.71

I’ve finally broken the $2,000/month in passive income! Passive income for February 2008 was $2,383.55. Not bad considering I wasn’t even in the country!

Here’s the breakdown:

• Online Income: $$1399.29
  • Adsense: $416.22
  • Linkworth: $221.99
  • TLA: $95.87
  • Kontera: $51.36
  • Affiliate: $83.85
  • Prosper Referrals: $100
  • Direct Ads: $430
• Savings Accounts: $138.43
  
• Real Estate Trust Deed: $0
• Direct Oil Drilling Investment: $277
• Dividends from Canroys: $509.11
• Other Dividends: $59.72

As usual, I ignored any income from Prosper loans. I did however include the $100 in referrals fees. If you’ve been thinking of lending or borrowing money on Prosper, now is a good time to do it. They’re still offering a $25 incentive to new members.

Canadian government takes its 15% tax on the dividends from Canroys, so the income is after-tax. You get a tax credit for this amount in the US so there’s no double taxation.

I started using Kontera’s pay-per-click (PPC) contextual advertising program in December. Last month I made $92.11 from it. The revenue is directly proportional to the traffic and also is also somewhat correlated to the type of content.

Finance-related content usually results in above average per-click amounts. However, content about Paris Hilton might pay 1/10th of the amount, but you typically get 10 times more traffic, so don’t fret if you niche is low paying. Just focus on creating good content. My experience has been that the per-click amount is lower than Adsense but its a good complimentary service that runs along-side Adsense, and it doesn’t violate Google’s TOS (terms of service).

Google used to prohibit publishers from using other contextual advertising programs in conjunction with Adsense, but they’ve recently eased this to allow programs that do not have the same look and feel.

Since I’m still in India, I’m not really sure what some of my income checks are for the month of January. But I do know my online income, so I might as well provide that.

Last month I made $568.55 in online income from various sources. January’s online income rose by 36.92% to $778.

• Adsense revenue: $350.99 ( up 46%)
  
• Linkworth: $151.98 (up 15%)
• TLA: $94.69 (up 32%)
  
• Kontera: $92.11 (up 114%)
  
• Affiliate: $63.73 (up 854%)
  
• Prosper Referrals: $25 (down 66%)

Even though Prosper Referrals were down, I referred over 30 new members in January. It can take between 60-90 days to get the referral so I’m optimistic that this number will be higher next month.

Adsense revenue was up nearly 50% and is now the largest individual contributor to my alternative income (both online and offline). While I don’t know if the increase will continue, I hope I can atleast maintain this level.

My Passive income for December 2007 was $1,921.11.

Here’s the breakdown:

• Online Income: $568.55
  • Adsense: $240.10
  • Linkworth: $132.00
  • TLA: $71.73
  • Kontera: $43.04
  • Affiliate: $6.68
  • Prosper Referrals: $75
• Savings Accounts: $128.47
  
• Real Estate Trust Deed: $300
• Direct Oil Drilling Investment: $163
• Dividends from Canroys: $499.21
• Other Dividends: $261.88

As usual, I ignored any income from Prosper loans. I did however include the $75 in referrals fees. If you’ve been thinking of lending or borrowing money on Prosper, now is a good time to do it. They’re offering a $25 incentive to new members.

Adsense revenue was down from last month, but since I wasn’t posting often due to my traveling, that was to be expected. Hopefully I can boost my online revenue this year. Once I’m done traveling, I should be able to focus more on this.

Until recently, domainers used to park domains with nothing but ads on them. They tried to get traffic from mis-spelt URLs or people who’d directly type a URL in the location bar. There wasn’t any content to attract the search engines, so unless they were paying to direct traffic to their site, the number of eyeballs was pretty low. However, if they did a good job of providing relevant links, the user was likely to click on them, if nothing else then atleast to get away from their site. I had several sites parked with Sedo.com and so far I’ve made $0.24 over a 2 year period! Pretty lousy way to park domains.

However, a site called Domain Embarking is trying to revolutionize the way domains are parked. Instead of putting up a site with nothing but ads, they’ve come upon an automated way to ad relevant content to your site.

One of my near-term goals’ is to create $3,000 in passive income. So far I’m about half way there, with income from various sources like blog advertisement revenue, Canadian Income fund and stock dividends, real estate trust deeds and direct oil and gas drilling programs. Serial-blogger, Derek Beau, has already reached this target and his goal is to now make $10,000/month! Unlike me, he’s chosen to generate this income solely from blog ad revenue.

Over the past 2 years, he’s created 23 blogs on various topics ranging from golf to pregancy (apparently personal experience or expertise isn’t a deterrent!). He outsources the content creation using sites like Elance, and pays between $3-$5 per post. After waiting for a few months, during which time he lets the traffic build up, he begins to monetize it using various companies like Google, Text Link Ads, Kontera and direct advertizers . He’s making $3,000 every month and his eventual goal is to have 100 blogs pulling in $10k every month.

It time for an update on October’s passive income and online earnings. Last month’s total was nice $1,736.80. Plus I got another $100 for referring a friend to TDAmeritrade, so counting that its $1836.80. I’m not counting the income from Prosper since its rather difficult to manually go through ~50 loans and find out how much I got. Besides it keeps getting re-invested in more loans anyway.

Here’s the break-down (not exactly JohnChow.com style, but informative nonetheless)

1. Online Income : $704.96

2. ING Savings: $98.44

3. Real Estate Trust Deed: $300

4. Direct Oil Drilling Investment: $115.63

5. Dividends from Canroys: $ 447.67

6. Other Dividends : $102.7

Total: $1,736.80

I’ve been lending money on Prosper.com for nearly a year now. I’ve been getting a pretty decent rate of return, despite having had a couple of borrowers default.

I’ve also made over $200 from referrals fees! Whenever anyone signs up using the referral link and funds atleast $50, we both get $25. If a borrower signs up, I get $125.

And to add to that, Prosper is now a paid advertiser on my blog. Not only are they offering referrals rewards, but they’re also paying me to put their link up!

I guess they’ve had such success with the program that they can afford to be extremely generous. If you have a blog you can start making extra money by doing just 3 very simple things:

1. Sign up using this referral link.

Amazon.com just announced that its opened its own MP3 Music Shop and its currently offering affiliates a whopping 20% commission on music sales.

I haven’t bought music for years (mainly because the music I listen to is from the 80s and 90s and I have all the albums) and I don’t even know anyone who buys music on a regular basis. (yeah, I’m getting old). But if you’re one of those people who buy music online, Amazon’s store looks pretty good. Most of the songs are $0.89 so you’re saving $0.10 per song. Maybe $0.10 doesn’t sound like much (and it isn’t) but it still represents a 10% saving off iTunes!

It doesn’t match Walmart.com’s $0.88, but Walmart won’t let users running any OS apart from Windows XP/Vista download music off their site. Amazon atleast lets everyone (including Mac and Linux users) buy and download music. I bought a “free” song on Linux, so I know it works. [Check out The Apples In Stereo: Energy].

Here’s another depressing story of some 17 year old millionaire who makes $70,000 per month selling myspace templates. Did I say depressing? I meant inspiring!

Ashley Qualls, founder/CEO of Whateverlife.com doesn’t actually make money from the templates, but rather from adsense ads! Apparently her first adsense check from Google was for $2800, which is more money than Google EVER sent me. Of course, I haven’t filled a need (which she obviously did extremely well) but atleast I’m getting some remuneration (if you consider minimum wage to be any form of remuneration) for voicing my irreverent & often irrelevant opinions.

You can read the entire article online at Fast Company. She’s a pretty amazing teenager.

Popularity: 4% [?]

Linkworth is a site that offers bloggers and website owners the opportunity to monetize their site via paid ads.

Originally they only offered referral commissions for advertisers, but since July they’ve been tracking publisher referrals and will pay you for those too!

Advertiser Account Referrals
>> $25 payout once the advertiser spends a minimum of $100.00
>>5% payout on all recurring charges for the life of the advertiser account

Partner Account Referrals
>> $25 payout once the partner earns a minimum of $100.00

Combo Account Referrals
>> $25 payout once the advertiser side spends a minimum of $100.00
>> 5% payout on all recurring advertising charges for life of account
>> $25 payout once the partner side earns a minimum of $100.00

AuctionAds is running a promotion. Just sign up to display Auction ads on your site and you’ll get $25. Not only that, if you refer anyone, you get 5% of their income for the first 6 months too.

It takes less than 5 minutes to sign up and you can modify the code to suite the layout of your site. You can also mention which keywords you’d like to target so that you get relevant ads (Note: this does NOT interfere with Google Ads). Somehow it integrates with Ebay’s affiliate program and you earn a referral fee anytime you sign up a new user or someone wins an auction after clicking on your link.

If you sign up a new ebay user, you get $25. If you generate a sale, you get 50% or more of the commission that Ebay makes. Since ebay has increased its fees and commission structure in the past year, this bodes well for publishers like us.

Yesterday, I bought some more Canadian Income Funds, also called Royalty Trusts or Canroys. As I mentioned before, I recently refinanced a property and I managed to pull some money out (totally tax-free!).

Rather than spend the money on an SUV or a big-screen TV, I opted to divide the money into 3 parts. The first 1/3rd went towards replenishing my emergency fu