How "The Simple Dollar' works

A blogger can make money from multiple sources. But getting rich? Not really.

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    A blogger can make income from several sources, from Web ads to free-lance writing stints. That pays the bills. but this blogger still makes his own detergent.
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Two or three times a week, I receive an email from someone who is trying to figure out how on earth I earn an income from The Simple Dollar (or some specific aspect of it). Sometimes, it’s because they have an idea for a site and would love to make a big chunk of money off of it. At other times, the emails come from people who think I’m running some kind of scam and that I’m secretly trying to sell people some product or something like that. A few people have some sort of idea that I’m getting rich doing this (I honestly have no idea how they conclude that).

None of the above statements are true, and I figure there’s no time like the present to spell out how The Simple Dollar works and the conditions under which I would encourage someone to try starting a website of their own.

I’m just going to answer several of the most common questions I get about The Simple Dollar, how I earn money from it, how I don’t earn money from it, and what other people might do to start their own site.

How do you earn an income?
My income comes from several sources: ads run on The Simple Dollar, links to the books I review on Amazon (if someone clicks through and buys a copy, I get a small percentage of the sale), sales of my own books and ebooks, and freelance writing opportunities I’ve picked up along the way (like my gig over at OPEN Forum).

Due to agreements I’ve signed, I’m very limited on what I can disclose about my income from specific sources. I can say that I’m doing well enough to support my family on what I earn from The Simple Dollar, but not well enough that I’m getting rich by any means. I make my own laundry detergent and eat “poor man’s quesadillas” for lunch and balk at a lot of prices I see at the store. At the same time, because we’ve got our debt under control, we’re not hurting, either.

I made the move to become a full time writer for purely non-financial reasons – if I wanted to start socking a ton of money away, I would have kept doing this in my spare time. I made the switch to reduce my personal stress level (a lot). I made the switch so that I could go to the park with my kids whenever I wanted. I made the switch so I could go visit my extended family for a week with my kids and not have to apply for time off or manage my vacation time. I made the switch so that I wouldn’t miss my kid’s first steps because I was on a business trip (this happened at my previous job). It’s not about the money for me.

How do the ads earn money?
Companies pay me some amount to have their ads displayed on The Simple Dollar. The amount varies from deal to deal – sometimes it’s a certain dollar amount per thousand ad views, sometimes it’s a certain amount every time someone clicks on an ad, sometimes it’s a package deal where I write content for their site and they also buy some amount of ad space on The Simple Dollar. The amounts in any of these cases aren’t enormous – figure $2-8 per 1,000 page views on The Simple Dollar, depending on what set of ads I’ve got running at a given time (because some pay more and some pay less).

This only earns a significant amount because The Simple Dollar gets quite a bit of traffic. I usually get about 1.4 million page views a month, but many of those page views are from people running ad blocking software, so I can’t count them at all towards the revenue I earn. They’re not going to view the ads or click on them, so I don’t earn a thing.

Also, out of that comes the cost of keeping the site up – a million page views a month means server costs and bandwidth costs that eat right into that income.

How do you make money from the emails?
Generally, I don’t make money from the emails at all. The emails basically just contain the content of The Simple Dollar, packaged up and emailed out to about 35,000 daily readers.

So why offer that service? From an income standpoint, I figure that with that many people reading my stuff, some of them will click through and visit the site and some will buy copies of the books I sell, but that’s pretty… hard to measure.

The real reason I do it is because I know that for some people, it’s the best or easiest way for them to get the stuff I’m writing, and if they find some positive value from it, it makes the world a better place.

That’s my philosophy on a lot of the site. I try very hard not to load the site up with ads – I have only one above the fold, though I could easily sell three or four of them and make a mint (or at least a lot more than I do).

Why not sell more ad space?
The reason is, frankly, I’m not interested in selling people stuff, at least not here. The people that come to The Simple Dollar are trying to improve their financial situation. The more ads I put on the site, the more I’m contradicting my own message.

The only reason my site runs any ads at all is because I have a family to support. I try very hard to minimize the number of ads that I run because I think having ads at all goes against many of the things I’m talking about on here.

If I were miraculously able to sell a pile of books – for example, if I were on Oprah or something – I’d be very likely to entirely remove the ads.

Another possibility is to start another blog that focused heavily on maximizing earnings, focusing on a topic where I would sell lots of ad space and talk about a topic that would encourage people to buy stuff, because we all know there are a lot of people out there with a lot of disposable income. However, I just haven’t figured out what I’d do in that kind of topic space that would interest me enough to do it over the long term and also sell a bunch of products – I don’t have the interest.

I have an idea for a blog and I want to do what you do.
There are three things that you’ll absolutely need to be able to make it work.

First, you have to be able to produce content like a never-ending machine. If there’s not fresh content out there on a very regular basis, people won’t come back to your site. There’s too much other stuff out there to read. The best way to be able to do this is to simply enjoy writing and enjoy the topic you’re writing about.

Second, you have to be writing about something that a large audience is going to want to read about. If you can’t attract a large audience, you’ll not be able to earn enough over the long haul to sustain yourself with income. This usually means not only having a great topic, but having a voice and attitude about that topic that engages a lot of people.

Third, you have to have a ton of patience and very thick skin. For the first year of The Simple Dollar, I earned a pittance. It took a long time for the income to reach a consistent level that I felt comfortable devoting my full time to the site. At the same time, if you do reach the level of popularity that enables you to do that, you’re going to be the target of some very, very vicious people. You’ll see so much negativity that you’ll either have to have such a thick skin that nothing bothers you any more (or, at the very least, distorts your ability to interpret criticism) or you’ll quit in an emotional meltdown or you’ll just start ignoring all of your readers because you can’t keep up with the volume and (often) negativity.

If you can deal with all three of these things, you’ll make it as a full-time blogger. If any of them sound hard, you’re likely going to have difficulty. I would not recommend to anyone that they commit to being a full-time blogger right off the bat, because many people don’t have the patience, the content-producing ability, the thick skin, or the right topic to make this work.

That’s not to say blogging can’t be an excellent hobby – it is. The Simple Dollar started as a hobby and a combination of factors just clicked for it, resulting in a great opportunity for me. However, I ran this as purely a hobby for a very long time without that income. Why? I love this site, I love the positive interactions with readers, and I love helping people.

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