Alternative Income – January and February 2011

At one point in this blog’s history, I used to post my alternative income. (I even made some really ugly alternative income tables.)

A Brief Explanation of Alternative Income

I think I may have invented the term “alternative income” in the personal finance space, but I can’t be sure. I wanted to come up with a name to describe income that wasn’t from my full-time job, and that wasn’t necessary tied to working a set number of hours. I wanted to be careful about not calling it passive income, because truly passive income is extremely difficult to come by. Some argue that it doesn’t exist.

Why I track Alternative Income

So I started tracking money that I make outside my full-time employment. That could include investing income from equities (which can be quite passive, once you have the investments in place), income from real estate, and yes, income from making money online (this blog and other websites I manage). The most controversial of these three is the making money online since in a lot of ways, I do trade hours for income. However, I’ve been able to say Aww Phuket, I’m Outta Here and visit Thailand and Australia for a month with little drop-off in income.

My goal was two-fold:1) Create a safety net in the event that software engineer jobs get outsourced 2) Create an early retirement plan, so that when my wife is eligible to retire from the military at 43, I can retire with her. Though in a lot of ways, I’ve already reached my definition of retirement.

The Roller Coaster of My Alternative Income Quest

My ride of alternative income took quite a twists and turns. It ramped up quickly and then hit a plateau… for years. The reason for the plateau is that I got another full-time job and I lost my focus. At the time, I still had 10 years to get where my wife was going to be with her pension and I was almost there. I didn’t have the eye of the tiger, and there wasn’t a drop of tiger blood in my veins. I lived up to my name, Lazy Man. Late last year, I switched back to full-time self-employment and I started to really take my side businesses a lot more seriously. For the first time in awhile I broke through that plateau. Because of that I thought I’d bring back my articles about alternative income, though I’d focus it exclusively on the online sources as that’s what tends to change from month to month.

January 2011

In January, the month got off kind of slow. It was a new year and I was focusing a lot more on the project that will probably never mentioned here. (Not that there’s anything sneaky with it, just that I didn’t want to be Lazy Man for this gig.) However, it picked up when Kimberly Palmer’s article from U.S. News and World Report got picked up by Yahoo. I was mentioned at the beginning at the article and the flood of traffic was outstanding.

This traffic resulted in a 73% increase from my best AdSense month ever. Without the mention, I still would have topped my best by around 10%, but this really pushed it into a new stratosphere. In addition to that, I started writing a little bit about products and services that I truly believe in such as SodaStream. When people buy products, I get a little commission. Some bloggers, get tempted into writing about everything, but it is important to me to only recommend what I can fully stand behind.

When I totaled everything up, income from my online resources (not other investments) I was able to net $3,622 in income. The gross income was within $5000 of what I was paid in 2004 as a software engineer. The was my rebound job after the technology crash around 2001. I was making more before the crash, but this is still a an important milestone for me… even if it was only for a month.

February 2011

Without the traffic of a post on the front page of Yahoo, I knew it would be difficult to match January’s numbers. I caught some luck with some direct advertisers, but it wasn’t going to make up for the drop in AdSense and some other seasonal traffic. I wrote most of my affiliate posts in January, so income there was down as well. The exception was my post on How to Get a Free Credit Score, which outlined some services that I use when we were looking to buy a vacation home (look for more on that story tomorrow). One thing that was worth mentioning is that I didn’t get hit by the Google Content Farm Update like some bloggers I know. In fact, I came out of it with increased traffic. Oddly the traffic didn’t bring in a noticeable income increase as the traffic from Yahoo did.

In the end, the online income rose to a net of $2745, which is of course, after taxes and expenses. I think this number is going be closer to my yearly average unless, I start working double or triple time. I can’t count on getting the boost that I got in January every month.