One Year of Being Dumb and Creating Passive Income

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Being Dumb and Creating Passive Income
Riding around Mackinac Island with my family – Summer 2011

It was about this time last year that I decided to quit my old money blog and start Dumb Passive Income. One year ago today, I was probably up at 5am trying to figure out how to self-host a WordPress blog. My only experience to that point with blogging was on the free Blogger platform. My decision to move over to WordPress is one that I will never regret. Everything I’ve done online has been totally self-taught. At this time last year, I was messing around with WordPress – playing with different themes, trying to create a logo, learning the platform and browsing some of the many available plugins. I did this for about three weeks before I finally published my first post, An Introduction to Dumb Passive Income. I’ve been rolling ever since and my mission here hasn’t really changed. Basically, this blog is about all of the things I am doing, or have done, to try to create passive income. I’ve had successes and failures along the way and I share it all on the blog. Here is a synopsis of what I’ve done so far and where I am headed…

Attempting to Create Passive Income the Dumb Way

Staying true to my motto, and the name of the blog, I started off my online income ventures by doing everything the dumb way. I refused to spend any money on tools or programs that would make my life easier and was determined to figure out how I could create passive income using only things that were available for free. I was already paying $9.95/month for hosting, and that was all I intended to spend.

The original plan was to do other things to try to other things online to try to create income, then blog about them here and share the tools and resources that I used. I thought I might be able to make a little bit of money with this site with affiliate programs for the tools I used. Do you see the problem here? If I wasn’t using any paid tools, what was I going to promote? I did get one single Hostgator signup, which was worth $50. Hostgator is the web hosting company that I use and recommend – partly for their great customer service and excellent overall performance.

Starting My Niche Site Empire

My original plan to create online passive income was to build a whole bunch of small niche sites. I had been reading a lot about others who were having success doing this. It seemed easy enough. I already know how to blog, and niche site was kind of like a miniature blog that is laser focused on one very specific topic. I had success with my very first attempt! In June of 2012 I built a 4-page site around a keyword (topic) that got only 720 (I think) Google searches per month. In less than a month, my site shot up to the number one spot in Google! The site was an exact match domain (EMD), which was worth something back then. I was brand new to niche sites, brand new to WordPress and brand new to SEO and I had success with my very first attempt. The site earned about $10/month for the summer before the earnings dropped off a bit (kind of a seasonal niche).

I got overly-confident with my niche site abilities and started to get overly-excited whenever I found exact match domains that were available. I did my basic/beginner keyword research with the free Google Adwords Keyword Tool. I then used GoDaddy to do bulk domain searches. Before I knew it, I owned 10 different domains that I intended to build more niche sites on.

My next couple of attempts at building niche sites totally flopped and failed. I spent a lot of time writing and creating content for sites that never ended up ranking in Google. And then Google came out with their EMD update, which totally took the air out of the tires for many small niche site builders – including myself. Even my first site (the one that had success) had lost its rankings and dropped down to #65. I now had zero income for all of my niche site efforts. I decided to quit niche sites and try something different.

My Niche Blog Experiment

I still owned several domains that I had originally purchased to build smaller niche sites on. I decided to use one of them for my niche blog experiment. Several mistakes were made with this project. For one, the niche I chose was one of the most competitive niches on the internet – the credit card niche. Two – I was creating a blog which would need constant updating and fresh content. There was hardly anything passive about this. But I pushed forward because I believed that the income potential was so great. Which brings up my third mistake. I was building that site solely for it’s income potential. There is nothing wrong with building a site just for income, but if you are going to build a blog and plan to write the content yourself – it better be something that you are interested in or passionate about.

I was interested… for awhile. I had a little bit of success and even made a few high-paying affiliate sales. These sales prompted me to start an e-mail list and build an extensive 7-Step Plan to help people pay off their credit cards. This was another huge mistake. I spent way too much time building out this plan for a blog that got barely any traffic. I only got a couple of signups – none of which converted into affiliate sales.

Note to self for future: build traffic first and then build out extensive offerings for readers.

There still is potential for that site – but I’ve put it on hold for now. I don’t know if I’ll ever want to spend the time necessary to make that site a success.

Steady Income with Interest from Lending Club

I’m not going to write a ton about it here, but I do want to include my Lending Club experience in this post since it did originate within the past year. I signed up at Lending Club in October of 2012 with an original investment of about $1,000. Fast forward to May of 2013, and that original investment is now worth $1,100. I spend only about 30 minutes per month monitoring my account over there. Most of this time spent is for my manual re-investing of the money that comes in for principal and interest payments each month. I consider this investment and way of “making money online,” to be passive enough. For updates on my Lending Club performance, take a look at my monthly income reports.

Lending Club Investor - Dumb Passive Income

Passive Income Plans for The Future

Here is where my online ventures have led me over the course of the past year. I’ve kind of come full circle and I’m back to building niche sites! I’m actually really excited about this and I am more confident than ever that I will have success. I’ve learned so much over the past year and I feel like I will be able to take bits and pieces of everything I’ve learned and incorporate it all into different types of niche sites.

You might be wondering, if my last few attempts failed, why did I jump back on the niche site bandwagon? Well, one of my first inspirations to build niche sites came in the form of Pat Flynn’s public Niche Site Duel. Seeing his success was really motivational. Unfortunately, I was too stubborn to follow all of his tactics and insisted on doing everything the dumb way (free).

More recently, Spencer Haws from Niche Pursuits has been running his own public Niche Site Project. I’ve been following along intently and watching as he has had incredible success in a relatively short period of time. The thing is – I now have the knowledge and ability to do everything Spencer has done with his public niche site. There really is no reason that I can’t build a site just like his and have the same type of success. So that is what I am going to do. I’m back to building niche websites – with one caveat. I refuse to build crap sites that offer no value and are put up just for the purpose of trying to make a buck. I want all of my sites to be of the best quality that I can create and to provide value for readers and users. My sites will not be a waste of internet space, but will instead make the internet a better place.

Why I’m Confident I Will Have Great Success with Niche Sites

There are actually several reasons that I have complete confidence that my current and future niche site efforts will be a success. Here they are, listed out…

  • My very first niche site (the one that lost its rankings in the EMD update) has since regained its rankings and bounces between #2 and #3 in Google. It earned over $31 in April 2013, and is almost to $20 in Adsense earnings for May already (only 6 days in)!
  • I have complete online guides I can follow for exactly how to do everything – provided by Pat Flynn and Spencer Haws
  • I now use the best and easiest to use keyword research tool available – Long Tail Pro (the Platinum version) (affiliate link)
  • I now have a much better understanding of the ever-changing world of SEO. I have proven results from experiments I’ve tried with keywords found in Long Tail Pro.
  • I’ve recently learned how to utilize outsourcing for some of my content creation. This is a huge time saver and allows me to better use my time for keyword research, site setup, etc. (the things I like to do)
  • With my internet ADD (shiny object syndrome), I love jumping from one thing to the next. I get excited about so many different things that have potential. Building small niches sites is perfect for this type of personality.
  • Last but not least – I am now part of a mastermind group! I am loving this, as it is really helpful for goal setting, accountability, motivation, advice, discussion and friendship.

Every Monday night, since around the beginning of this year, I’ve been meeting with three other like-minded internet entrepreneurs. We meet via a Google+ Hangout. Each week we share our wins from the previous week as well as our goals for the next week. We take turns being in “the hotseat,” where the main discussion is focused around a topic that each person is currently working on or struggling with. We pool together our knowledge, resources and experience to help each other out. I truly believe that being a part of this mastermind group is the number one reason that my internet ventures will be a thriving success.

Each member in our mastermind group is at a different level in their internet journey. We are all very similar, but at the same time very different in how we approach our online businesses. We all have sites where we publicly share exactly what we are doing to make money online. All of the others have had far more success than me, which is why I was so honored when I was asked to join. Take a minute to check them out via their websites…

It is mostly because of the influence of these guys, as well as many other sources and resources from around the web, that I am completely confident that I will be able to make this niche site thing work. I will be able to create a good passive income by building several niche sites.

Remember that there are several dumb ways to create passive income online, but only one site that is blogging about it! Dumb Passive Income… dot com.

-Matt