Do you really Make Money Blogging?

A lot of enthusiastic people – from all walks of life – start blogging with the sole intention of making money online. Many of them claim that blogging is one of the easiest mechanisms to make money without any investment. To some extent, they are right because the upfront investment to kick start with blogging can be very less in most cases.

blogging for peanutsHowever, blogging is NOT exactly a cheap investment & high return monetization route. If you carefully analyze, you will see that even there is a lot of investment required in order to make some money and a living out of blogging. And in reality many are blogging for peanuts.

Initial Investments

The bare minimum requirement to get started with a professional quality blog is a domain name and a shared hosting service. You are talking about $10 per annum for domain name and say something like $7 per month for shared hosting. One could argue that domain names are available for $6.99 and hosting as low as $2, but let us assume realistic values for the sake of calculation. Hence we arrive at an annualized expense of $94 (12 x 7 + 10). It can vary from $50 to a few hundred dollars depending on your hosting service. Anyhow, let me call this number, investment on technical infrastructure – server side, ‘a’.

Next is the technical set up for your home or workplace. I doubt if anyone is really blogging out of a cyber café and hence you need a minimum set up of a PC (or laptop) plus a reasonably good Internet connectivity at your home. Let us assume that your PC costs $900 and a low-speed, say 256kbps, broadband connection with unlimited bandwidth comes at around $20 per month (Please excuse me if you have Quad-core, multi RAID, multi-display $3000 PC and a 7MBPS connectivity, I didn’t mean to offend you dear friend :)). Now, you may not be using your PC exclusively for blogging and hence let us assume that one third of your PC time is spent for blogging. Hence out of your annual broadband bill ($240) around $80 goes for blogging and say $150 of the PC cost. I assume that the average life span or real usage of a $750 PC is two years and one third of that goes to blogging. For the sake of simplicity, I am not including the power that it consumes and upgrade expenses which are actually recurring investments. For the time being the annualized technical infrastructural expenses at home is $230, which I call ‘b’. In real life, though, it is much beyond $500 and even greater for developed nations.

Blogging related expenses

If you are creating one blog post per day and assuming that it is not cut-pasted stuff, you have to spend at least 2 hours a day doing research, actual editing of posts, comments moderation etc. On top of this there could be time spend on other things such as link building, social media/network interaction, technical jobs such as upgrades, maintaining the site, replying to mails etc but I am discounting these tasks. 2 hours of human resource time, even at the cheapest unskilled job (e.g. entry level at McDonalds), will cost $16. For skilled jobs it can be as high as $50 per two hours, or even higher. This is in the context of developed nations but for India, it will be probably one fifth of that amount. Hence for a US or European blogger, I assume a human resource expense of $16 x 365 per year and for India say $3 x 365 which gives us the respective annualized numbers of $5840 and $1095 respectively (human resource investment or ‘c’)

Other related expenses & the total

On top of these, if you want to monetize your blog, you may end up doing advertisement campaigns, purchase products such as aWeber, OIO Publisher plugin, premium themes, SEO services etc. These numbers can vary a lot but some of the bare minimum investments need to be there. Let me take a reasonable value of $200 per annum here which is the bare minimum for any upcoming blog and I would call this number ‘d’.

Now, it’s time for the reality check! Adding the numbers a, b, c and d, we arrive at a minimum annual blogging expense of about $1619 (Rs. 72,000/-) for countries like India and upwards of $6000 for countries like USA. On top of this, you may add, the telephone bills, power bills, software/hardware upgrades and what have you! Please note that we are talking about bare minimum expenses here. If you have a high quality professional blog and you spend 4-5 hours blogging, have a couple of PCs and spend a lot on your dedicated hosting and high speed broadband, attend a lot of blogger forums, have big advertisement budget etc, then it’s really about a big capital investment.

Now, some of the blogging buddies that I know, are probably spending the lowest numbers ($1600) to keep their blog up and running every year. The expectation from the above calculation is that in order to break-even the investments, they should be making a minimum of $133 per month and make it at least $500 a month to call it a reasonable income stream (in the Indian context). For the developed countries, I would say, anything $3000 pm upwards for an investment of $600 pm, won’t be a bad thing to happen.

Conclusion

The moral of the story and all the math above is that, if you are a make money blogger and if you don’t fall into the above income category, you are not doing anything good to yourself. A permanent offline job is what you want in that case instead of fooling around on the Internet and blogosphere. However, if you decide that the advantages of blogging for you is something else other than money, then forget all the above!

Happy Blogging!

[PS: It’s the second birthday of DollarShower.com today, in fact it was yesterday (14-Apr) if you consider the Indian Standard Time]

Comments

  1. Finally came across a post that questions the MMO thing logically..awesome

  2. Happy 2nd anniversary 😀

  3. Lolz My First Visit on Your Blog and its 2nd birthday of your blog … btw your calculations dont seem realistic 😛

    • @Lucifer, welcome to D$… The calculations are not accurate and may not be realistic for all. But in principle, you have to see where you are investing and what it returns.

  4. Ajith,

    Happy 2nd Birthday.

    Your blog is a hidden gem among the MMO blogs. You articles are so awesome that you should be a A-list blogger.

  5. Happy Birthday D$! Way to go! Thank you for the wonderful posts last year :)

    Ok, Time for yet another post-mortem. Let me look it from a student bloggers side.

    Well, For most student bloggers out there, The investments like PC and Power and Internet comes for free (from their parents). So ‘b’ is out of the equation.

    They have lots of free time and no one is paying them $3 and hour (if someone was doing that, they wouldn’t be blogging for money in the first place). That takes ‘c’ out of the equation.

    Even after 4 years into blogging, I have never (never ever ever ever) paid for a premium service. There are equally good free services and if you know where to look into and know some coding, you can make things for your own. So I would take ‘d’ out too.

    So the only real investment is a. Many start off with blogger. So for them a is also ruled out. Let me call them the Free-Lunchers.

    For others, a $10 domain is not that a big deal, its a one time annual investment. Many go for free hosting. In my case, for the whole first year, I was hosted along with a friend who had a shared hosting account (thanks to the unlimited domains). (In my case, I haven’t paid for any kind of hosting yet, Thanks to you for that, from the SEO contest).

    So from the perspective of the free-lunchers, whatever they make, they are making it for free.

    For others, they do make over $10 a year from Adsense, so its break-even.

    The above calculations apply to those who get paid for their time. For them, if they are not making it big, its need to be re-thought.

    But the truth is, if you are not ready to accept the losses for the first few years, you are not going to make it at all.

    In my case, the fourth year (i.e. the one going on now) has made me more money to break-even my expenses for the first three years (approx.). Similar to the teams in IPL, it takes a while to break-even, from there on, its all profit :)

    As you said in the last part, when we consider other advantages, its nothing.

    • @Arun, when you consider any business – whether online or offline – you cannot discount any investment (capital or otherwise). There’s nothing called ‘lot of free time’, or ‘parents contribution’. You have to include everything and compare it with the returns.

      One of the biggest problem in India is that we never ever properly budget anything when it comes to doing a business or even running the country for that matter. We always claim that human capital comes cheap. This is one of the reasons why people believe that some of their business are really profitable while actually that is not really improving their living standards or savings.

      By the way, what I listed out here is not exact math but some way of arriving at what we are actually spending on blogging. And, by no means, I was referring to student bloggers alone :)

  6. Greg :

    An excellent realistic analysis of the costs associated with blogging as a business. It shows why blogging is actually a hobby for the majority of bloggers.

    • @Greg, thanks for your comment… Yes, if it’s considered hobby and free time activity, that’s fine. When people try hard to become a big time blogger and make money, one needs to look into what it takes v/s returns.

  7. ebele :

    Hey, happy birthday, Ajith. I tell ya, you don’t look a day over 9 months :-)

    Interesting expenses breakdown of what’s potentially involved in ‘making money blogging’. It’s never really been my primary aim to make money online that way, but taking all expenses into account is a good way to deal with the realism of what it entails. I think it’s a useful approach in most areas where you’re looking to make money (online and/or offline).

    Take care, congrats again and have a good weekend.

    • @Ebele :)
      Thanks.. right. Regardless of whether it’s blogging or any other business, the investment v/s returns is the balance one has to strike…

      Hope you had a great weekend too…

  8. Happy 2 years of blogging 😀 Mine was on April 15th.. so we both are on the same line :)

    As of the post, it does make sense that we heavily invest time/money on blogging. But, at one point all those pays off if we stick to never-lose-hope attitude!

    • @Sid, Happy belated b’day for your blog too…

      Definitely, blogging can pay off in the long run for some people based on his niche, writing and marketing skills. At the same time, if you spend 6 hrs a day in front of the computer for blogging purpose and make $200 or $300 at the end of the month, it may not make much sense.

  9. Now me living with Blogging money, not getting much but a decent income getting and happy with the same.

  10. Congrats on your 2nd year with $Showers!

  11. Happy birthday, wish u the best site.. i’m sorry i can’t english well. i’m an indonesian .
    how can i make a dollar, my financial is not good. i will learn by your side

    • @dwi pras, no problem with your English. Knowing English is only an advantage but not a must :) A lot of self reliant nations do not have even 5% of their people speaking English.

      As for the money making is concerned, I keep posting and sharing whatever comes to my mind. I do not have a magic solution with me 😀

  12. Simran :

    happy 2nd anniversary Ajith :) Keep rocking

  13. Nihar :

    First of all Wish you 2nd Happy Birthday to D$.

    Now about the post. Great in depth analysis.

    The main thing that can’t be measured is the time invested / day by a blogger.

  14. @Simran, @Nihar, thanks for the wishes.

  15. When I started this I promised myself that I would spend as little money as possible, I’m in this to make money not spend it.

    I get my hosting free (the benefit of having a brother who runs his own hosting company) and the only thing I have paid for is the domain name.

  16. Hi Ajith,

    I would like to commend you for a precise computation! You have a very helpful article here. I must say that online business is risky and you should invest first before gaining money out of it. Thanks for this. I shall surely apply the hints in the future. Cheers!

  17. Do I really make money blogging in Nigeria, the honest answer is yes but not sufficient to live off

  18. Doing an offline job and publishing blog on the same is also a great idea you can do research learn and blog.

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