Passive Income Online Myth

Passive income is the Holy Grail of the lazy. The idea is certainly tantalizing. Earn money, without doing anything. However, passive income is pretty rare, and usually the result of circumstance.

Passive Income vs Residual Income

passive income graphicOne of the problems with the idea of passive income is that it is misunderstood. Passive income is income that you receive without doing anything for it. Residual income is income you receive for having done work earlier. This may sound like semantics, but the difference hides how much work goes into building an online income.

Truly passive income often comes in the form of royalties. For example, your great-great grandpa bought (or homesteaded) some land in the middle of nowhere and it has stayed in the family because it was never worth selling. Then, one day, an oil company shows up and starts pumping out oil. You get a check every quarter. That is passive income.

Notice that in this scenario, you did absolutely nothing. The oil company did the exploration, they did the digging, they pump out the oil. You do nothing. One might argue that you did something by owning the land, but that only works if you bought the land for the purpose of collecting the royalties. Otherwise, the money is a byproduct of another decision and, therefore, truly passive.

Contrast the situation above with one where you buy a domain, build a website, write lots of quality content, and then start earning a few thousand dollars every month from Google ads. This is NOT passive income. You made the investment, you did the work to build up the online property, and now you earn money off of that effort. This is residual income, you are continuing to be paid for something you did work for.

Theoretically, if you never work on the website again, and it continues to earn money forever, you might be able to make the argument someday that the income is now passive. You heirs certainly can make that argument, when and if your website ever passes on to them. However, therein lies the rub, as they say.

It is highly unlikely that your hard work will end up developing a web property that is so amazing, so well linked, so well ranked, and so well optimized that it will continue to earn money forever with no further effort from you. In reality, any site that you build that has continued success does so because you make continued effort.

Ongoing Work vs Passive Income

Just because no one is paying you an hourly wage for your work does not make your income passive. That, actually, just makes you a business owner. Businesses of all kinds make investments in labor, materials and money that does not pay off immediately. Microsoft spends years developing a new operating system (like Windows 2012 Server) or a new version of Microsoft Office. When they start selling the product, that is when they get paid, but each copy of Office sold is not residual income.

And, just like Microsoft, you can’t just put your product out there and then disappear. In Microsoft’s case, there are patches to be written, technical support, and various licensing activities, and so on. In the case of making money online by writing, or building websites, there is writing new content, updating old content, answering comments, building links, and so on. Every hour of effort is work. Work that you will be paid for later, but work nonetheless.

The key is to understand that if you want to make money writing online or via any other internet pursuit, don’t search fruitlessly for the path to passive income. Rather, find something you like, or are good at, and start building. Don’t make extra work, and never skip over a time saving idea, but don’t assume the money will just start coming in. The oil companies never show up and start pumping out from under your online websites.

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AdSense Experiments Microposts

Earning money with AdSense relies primarily on getting enough traffic to make it work. If you get enough traffic, most of the rest works out on its own. Of course, that isn’t necessarily true for a large, multi-writer, website, but for us writers looking to make money writing online on our own, that’s how it works.

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Getting traffic is an ongoing effort. There are many ways to get traffic, but one of the most self-sustaining is to rank highly enough in search engine rankings to get traffic from people looking for your information. There are a lot of factors that go into search rankings, or SERPs. The most important is the number of links pointing at your individual pages. These are called backlinks, and Google and Bing count them to rank your page.

micropostTo keep people from making junk backlinks, the search engines have a lot of different filters, and value different links from different sources. They also tend to not rank certain types of webpages, including those that are very short. Some say that nothing under 300 words will generally show up. Others say 500 words is the minimum.

Either way, if you aren’t looking to rank that particular page, then does a smaller post still have value?

Certainly, a small post can have value for your readers, and it may be that search engines do count them for other factors, such as the “freshness” of your site, or even the backlinks that come off of those posts.

I wrote about microposts over on my freelance writing blog, but since they have the potential to increase earnings, I thought I’d put some thoughts down here as well.

I’ll keep you posted.

 

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All 6 Every Day

I have several different blogs on a lot of different platforms aimed at a lot of different audiences with a lot of different goals. That being the case, I’ve always had the notion that if I could focus on my six different blogs or websites, and update each of them every single day, that things like search rankings, link building, and monetization would largely take care of themselves. Unfortunately, I’ve never really been able to test that theory, in large part because I have other projects as a freelance writer that I’m working on, and updating six blogs every day requires a fair amount of overhead.

daily updates on multiple blogsHowever, after tracking various analytics, traffic, and even some earnings, I’ve noticed a definite correlation between frequency of posting and positive results. However, unlike other people have suggested, I find the best results occur when those regular postings are made across more than one of the websites. In other words, I see better results from posting one or two articles per day, not on one site, but on several sites. Each individual site might go four, five, or sometimes 8 or 10 days between updates, but this still seems to achieve better results than a daily post on a single blog.

Now, I think it’s time to put my writing where my mouth is. Would daily updates across multiple blogs increase traffic, earnings, and even links in a meaningful way? There is only one real way to find out and that is to try it.

I’ve decided to work with six different blogs across multiple topics. Each blog links around a bit to the others, but nothing that would seem like some sort of link scheme. Mostly there are sidebar links to popular pages on other blogs, but I do try and occasionally throw in another links within the text, but only when it’s natural. Or sometimes, I’ll do it like it is an ad or something. Like this:

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More Content More Links

Too many people focus on the fact that daily updates leads to daily indexing by Google. Being indexed quickly is important for news sites, and other real-time endeavors, but for what I do, it isn’t really important. However, a daily update would mean a steadily increasing number of pages to be indexed, marking the blog as fresh. Even more beneficial is that each new post provides several new links. The sidebar links are but one pocket of linking. Each post has tag and categories, those pages get a new link with each new post. Any inserted links, obviously, increases the links incoming to that page. Finally, with a steady update, that means more people have the chance to see something new on an RSS feed, aggregator, or just on regular visits, each of which provides another opportunity to link.

How To Write So Much Content

Clearly, if one is cranking out six blog posts every day, and still hopes to achieve any progress on other projects, you can’t spend two, or even one hour, on every post. In fact, there may be an argument for rotating on a calendar which blog gets the bigger, deeper, longer, posts with more pictures and promotions each day. But, for now, I’m going to wing it, with the in-depth article ideas I have being cranked out where they seem the best fit, or where I have the best motivation each day. The other posts will, of course, not be garbage, but will, by necessity, have to be briefer, or faster in some way to write.

The holidays are approaching, so this may be a fools errand. On the other hand, there is no time like the present. Even three a day, or six every other day should show some results if I’m correct.

So, without further ado, this is ONE.

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AdSense Earnings Drop During the Day

Over the last year or two, I’ve moved a lot of my efforts and focus to my more passive income type earnings online, versus just concentrating on my online freelance writing business. One of the facets of making money writing online is advertising. The simplest online ad system is Google AdSense.

AdSense Earnings Adjusted Same Day

Google’s AdSense program has a lot of moving parts. However, recently, I’ve noticed an uptick in a certain quirk related to earnings.

First, Google adjusts your earnings as an AdSense publisher all the time. The most noticeable adjustment occurs every month when your “Estimated Earnings” is converted into the actual earnings they are going to pay out to you. On the second or third day of a new month, Google will post the actual amount you are getting paid. This number is almost always smaller than the estimated earnings you have been shown all month long. For me, it’s usually a pretty insignificant amount, a rounding error, really.

falling adsense earningsDuring the month, if your ad clicks are particularly worthless not converting well, you may be “smart priced” which is a fancy way of saying that the amount you are getting paid per click will be lowered. This keeps advertisers from trying to cut off certain publishers and potentially costing Google revenue. There is no notification that you have been smart priced, nor is this really something talked about on the publisher (AdSense) side. It’s actually something more readily mentioned on the advertiser side (AdWords). Either way, it’s real and it happens, but it usually requires comparing time frames to see it happen.

Honestly, I don’t really have a lot of experience with Smart Pricing. Either it’s been happening to me from the very beginning, or it just doesn’t happen to me enough for me to notice.

AdSense Earnings Dropping Intraday

What I haven’t seen a whole lot of, in my experience, has been Google adjusting your earnings in real-time, or within the same day. However, lately, I’ve started to notice downward earnings adjustments on some of my accounts.

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To begin, let me just admit that I check my AdSense account a lot. Honestly, I probably check it too much. On the other hand, it’s so easy to just make a quick click in between projects, phone calls, or meetings. I don’t take the time to necessarily drill down into the data, but I do like watching the amount of money I’m earning online go up and up. I also use channels, ad groups, and site by site reports to keep a rather detailed eye on which sites are making what money, and when.

Which brings me to today’s issue.

Recently, I’ve noticed that sometimes a particular website will report something like $67 for the day so far. Then, 30 minutes later, when I check the same channel on the same website, the earnings will have dropped to something like $53. The RPM will have dropped too. Again, I haven’t drilled into this phenomenon a lot (yet), because this is when I’m supposed to be earning money online by doing other stuff, but it would appear that the CPC has been revised downward, not the number of clicks.

What is odd about this is the time frame. I’ve never seen these almost real-time adjustments before. Typically, you either get a lower CPC and you never really notice it unless it is less than previous days, or they adjust your earnings down at the end of the month. I’ve never known Google to lower your earnings midday like this.

I’ll have to do some more digging, I guess.

Has this happened to anyone else? Am I finally being smart-priced, and this is just how it looks? Has Google updated the way AdSense works so that it make quicker, smaller adjustments during the day rather than bigger. all at once adjustments at the end of the month? 

Leave a comment if you have thoughts.

 

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