Photo by SqueakyMarmot

Well, it’s that time–the end of the 365-day period ending June 30, 2008. Why am I writing a year-end review in July? One, because everyone else does it in December, and for me it gets a little tiring to read a bunch of posts like this at the same time. Two, because I’ve never seen the need to wait until New Year’s to reassess your situation.

When I say “the year in review,” I mean regarding this blog and my life. A bit self-centered, yes, but this post will definitely apply to you if you’re trying to escape the rat race or you’re interested in making money online.

When I look at my life, the only major challenge I care about is escaping the rat race. What I mean by that is making a living (and preferably a good living) from an occupation I enjoy and have control over. This means everything to me. If I have any other problems, they’re so small that I’m not even noticing them.

I recently worked with a career coach who had the insight and the guts to say that I’ll never be happy in any job. Of course, I already knew that, but it’s good to have professional confirmation so I know for sure what I’m looking at. So what will I do about that? Well first, here’s my situation:

- I make a moderate salary as a software developer. It pays the bills and lets me save some money, but it’s certainly not going to let me retire tomorrow. Most importantly, I really don’t enjoy it. It’s the best job I’ve ever had, but employment just isn’t for me.

- Thanks to years of somewhat extreme frugality and compound interest, I make decent passive income from stock mutual funds. In the long run, this will be by far my favorite income stream, because given enough time it will result in a lot of income with basically no work. But for now, it’s not really that much. Furthermore, it comes mostly in the form of unrealized capital gains, so I can’t get the money out without selling and paying taxes (and I don’t like paying taxes).

- My next biggest income stream is from being a part-time network marketing consultant. This was doing well and growing for a while, but lately I’ve been struggling as new competitors have flooded the pay-per-click market, eager to set money on fire. I won’t bid more than 35 cents max for a click, but top bids for one important keyword are over $11! That can’t be profitable for them unless they’re really ripping off their customers, but it’s shutting out those of us who won’t play that game. I’ll have to see how this plays out. I have a more or less neutral feeling about the work; it’s way better than a job, but I can’t say that I actually like it for reasons other than generating income without having a boss.

- One income stream that I started 7 months ago is this blog. The income is extremely low, so don’t fall into the trap of thinking that blogging is an easy way to make 6 figures. But though the income is low, it’s growing steadily so far (with the exception that my blog income was down in June after being way up in May because of the 28,000 visitors to 10 Reasons Japan Is Better Than America). And it’s so much fun. I’d be incredibly happy if I could do it full time.

So back to what to do about the rat race. Here are some possibilities:

1. Do nothing.

Just do what “everyone” does and stay in the rat race. I believe that some people honestly like their jobs, but that’s sure not me. For me, taking the normal route isn’t an option. Even if I don’t succeed in any of the alternatives, I couldn’t forgive myself for not trying.

2. Find a higher paying job.

The idea with this strategy is that if more money is coming in, I can save more and retire earlier. Better than option 1, but far from ideal. I’d like to do a little more work for a little more money, or a lot more work for a lot more money, but in my experience, climbing the ladder means doing a lot more work for a little more money. And I want to enjoy the journey, not just the destination.

3. Find a part time job.

This is similar to #2. More money for more work, only the extra work is with a different company. But I haven’t been able to find any part time jobs in software development. I’m not necessarily restricting myself to that, but I sure don’t want a minimum wage job.

I did come close to getting this to work when a company I worked at went out of business. Someone started a company to service the clients that were left behind, and they wanted to pay developers $70 – $90 an hour for working nights and weekends. It would have been great, except they didn’t get as many clients as they wanted, and they ended up needing only one developer (who wasn’t me).

4. Make a decent income outside of a job.

Now things start getting interesting. I think making a modest income without a job is way better than making a high income with a job. This blog is a perfect example of a way to make money without a job, but I’m a long way from making any real money, let alone something to live on.

So far, I haven’t done much monetization. I put some AdSense ads up, but AdSense doesn’t pay much, and I’m making even less than other blogs with the same amount of traffic. I think this is for three reasons:

- I got most of my subscribers when ProBlogger linked to The Zen of Blogging. They’re likely to be bloggers themselves, and bloggers tend to show ad blindness.

- Search engine visitors like to click ads, but I’ve only recently emerged from the Google sandbox, so my search traffic has been essentially nil so far. And I still seem to be sandboxed for some keywords that I know I should rank well for (and in fact, I do rank well for them on Yahoo).

- I’ve refrained from putting ads in the best hotspot: the upper left corner of the content. Many successful AdSense publishers do that because it gets the most clicks, but I figured that since I don’t have search traffic yet, there’s no need for it. Besides, when I use an image, I want that to appear at the top, not an ad.

But to have a good chance of making money from a blog, you need to look beyond AdSense.

Consulting

In Skellie’s post A Practical Guide to Earning Six Figures: Re-inventing What You Have, she presents an idea that I found interesting:

“Consulting carries a high per-hour rate and is highly customizable. Aside from traditional types of consulting (SEO consulting, branding consultations, etc.), there’s nothing to stop a talented World of Warcraft player offering consulting to players who want to increase their skills…”

This caught my eye because my research project for my master’s degree in computer science was on Warcraft! I guess I have a master’s degree in Warcraft, if you will. So, does anyone out there need a Warcraft consultant? However, I’d need to update my knowledge, since my project was on Warcraft and Warcraft II, and I know nothing about the latest release.

This particular angle might not work, but the whole coaching/consulting/freelancing deal is certainly worth considering when you realize that a small blogger can make more money from one hour of consulting than they could from a year of AdSense.

Paul Piotrowski is a newcomer to making money online, making only $7 in March. But he made a whopping $1,528 in June! What I found most interesting about his June 2008 blog income report is that he made $600 from blog coaching. This shows that you can make money from consulting even before you’ve built up a reputation. Because of his posts, I believed that Paul was knowledgeable about making money online even before he had actually done it himself (just like I think I’m knowledgeable even though I haven’t done it yet). And because other people believed he could help them, he got some clients. Because of those clients, he has made what I would consider the start of good money online. And now that he’s done it, he has a reputation that will bring him more clients with less effort.

Ebooks

I’ve written two ebooks so far: The Zen of Blogging and Memoirs of a Gaijin. Both of these were free, and while I think I could have charged something for Memoirs, I felt better about doing it for free, even though it was a lot of work. But now I think it’s time to move on to paid ebooks. They take a lot of effort to write, but I think that when shared with the right person, they can be far more valuable than free posts or even real books. And in return for providing that value, you can be paid. Furthermore, by offering an affiliate program, you give your readers a chance to make money from recommending your ebooks. This is definitely something I want to pursue.

Freelancing

Freelancing is not really something I’ve considered. People call it a business, but I’m not sure how it’s that different from a job. You can work from home on your own schedule, but you still have a boss (or many bosses), and you might have limited control over what you do. It can also be hard to find work.

Let’s use freelance blogging as an example. When Skellie said in Freelance Blogging for Side Income: My Top 10 Tips that even a newbie freelance blogger should never write for less than $50 for a 500 word post, some people thought that rate was much too high to be realistic. Professional freelance writer Monika Mundell said “Prospective clients get shifty at the thought of paying $15 for 200 words and I’m only dreaming of being paid these rates.” (However, it wasn’t long before Monika reported being paid $50 for a post.)

Let’s say that you manage to snag what some people consider a fantastic rate of $50 for a 500 word post (which is supposed to take 2 hours to write). Even if you get that rate, that’s only $25 per hour, or $50,000 a year. And that’s only if you’re able to find enough work (4 posts a day, 5 days a week, 50 weeks a year), and you’re able to write enough on whatever topics you’re given, and you’re able to write these posts in 2 hours. This post I’m writing now is going to take way longer than 2 hours. Of course, it’s way longer than 500 words, and I’m watching Jurassic Park in the background, but still…

In spite of these potential problems, I was considering doing some freelance blogging. But I couldn’t commit to any kind of schedule, like 5 posts per week. At this point, it would have to be a “write whenever you like” kind of deal. As I was wondering how to find someone who would pay $50 per post whenever I could come up with something, I noticed that one of the Anywired commenters gave the name “Michael Martin.” I clicked through for no other reason than because I thought maybe it was Michael Martine and he had just misspelled his name. Well, it was actually a guy named Michael Martin, and you wouldn’t believe what post came up: Hiring Blog Design Writers, $50 per post! I’m not sure how many posts I can write about blog design, but it’s certainly worth a try.

Being a programmer, I’ve looked into freelance programming, but I haven’t found anything. On RentACoder, I saw a lot of people with tons of skills trying to underbid each other for tiny jobs. I sure don’t want to spend hours searching for a 30-minute job at a low rate. If I were going to do this, I’d want something more permanent, like a long-term contract or a part-time job, and I haven’t been able to find one.

In A Practical Guide to Earning Six Figures: Reboot Your Career, Skellie said a friend of a friend earns over $200,000 by working 3 months a year in a difficult and obscure programming language with little competition. Sounds like an amazing deal, but I don’t suppose you happen to know what that language might be, do you?

Here’s to 2009!

As we begin the 365-day period ending June 30, 2009, I’m renewing my efforts to make a living online. Are you trying to do this too, or are you already doing it? Leave a comment and let us know how things are going for you!

• Top 10 Reasons Not To Have A Job
• Blog Profits Blueprint – Make Money Blogging (Plus, Me Vs. Yaro)
• The Blogger’s Guide To Freelancing
• How To Run A Profitable Freelance Business Through Your Blog
• The Liberation Revolution
• The Lie Of The Lie Of The 4-Hour Workweek
• Why We’re Failing The 4-Hour Workweek
• The Fire Fly Manifesto, And Career Renegade
• Aspiring Bloggers, Here’s Your Roadmap
• ROWE Vs. TOWE