How The Simple Dollar Works

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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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40 thoughts on “How The Simple Dollar Works

  1. Do you make any money from the RSS feed? I read several blogs through Google reader to save time.

  2. Thank you so much for this breakdown!

    BFS is just now approaching 6 months and I was wondering what the future may hold. I enjoy blogging and posting daily, so I was just pleasantly surprised that money could be made. I wouldn’t suggest anybody go into blogging to make a quick buck – in 6 months I’ve made a little more than $900 – that comes to a little more than $1 an hour since I do treat this as a 20-30 hour a week job.

    I don’t think I could even do this if it was just about money – you have to love blogging, writing, and your commenters to keep it up for more than a few months. I’m sorry you get so much negativity.

    Anyway, thanks!

  3. Trent,

    I’m curious how you wrote so many posts a day (used to be 3) while having a full time job, having a wife and kid(s) during the first few years of The Simple Dollar.

    Did you sleep much? The GTD system doesn’t seem like it creates enough time to pull that amount of material out.

    Did you and your wife switch off taking care of the kids at night and did you get a bunch of childcare help from your families? For me it seems like I end up with very little free time left at the end of the night and I’m exhausted.

    I also suspect that you write articles quickly and efficiently due to a lot of writing practice.

  4. So, except for buying a pile of books, what’s the best way for your readers to help you make money? Clicking on ads?

  5. My habit for blog reading is to subscribe to their RSS feed if I’ve read at least 2 articles of theirs and liked them, often by being linked from blogs I already read (I was referred to The Simple Dollar by Lifehacker), by friends via emails and chat, or via search engine results consistently bringing me to the blog. If the title and first paragraph seem interesting in an article, I click through and read it on the site, even if the full text is in the RSS. Partly because I know analytics have an easier time tracking me if I click through and I know most bloggers appreciate that, and partly because content usually looks better on the blog page (where it was written for) than in Google Reader.

    Furthermore, if I am consistently reading articles from a blog and getting some sort of use out of them, I whitelist the blog on my Ad Blocker and view their ads with a purpose – if I see something that interests me, I’ll actually click through the ad and read about it.

    In addition, if bloggers have written eBooks or paper books, I’ll check them out and possibly add them to my “books to buy when I’m not a poor college student” list on Amazon. These include your books, and a few eBooks from Larry Lohrman about photography as a business.

    I like to think that, if a blog consistently puts out great content and I read quite a few of their articles, I’m not just “skimming” it. I don’t know how other people handle things, but that’s my way of “giving back” to the wonderful writers.

  6. I’m also wondering about the RSS feed? I see there is an ad at the bottom of the article (in Google Reader) but I suspect that earns money for Google and not for TSD.

  7. Ads in RSS feeds earn Trent money through the Google Adsense program.

    Google of course takes some cut…but no one knows what amount or percentage. And Google isn’t telling!

  8. Thanks, very interesting.
    Your blog is my favorite on the web. There is hardly another blog with so many interesting articles by one writer within a single day. I particularly like the fact that you don’t have guest posts (I find guest posts annoying, prefer the voice and perspective of the “guru”).
    Keep up the great work.

  9. great article Trent. Very similar to the advice I give when people ask me about how I make money running unnecessaryquotes.com. I don’t make enough to not do my regular job (nor do I want to, academics are my true passion) but it’s something I enjoy and a profitable hobby, so that’s nice.

  10. Based on 1.4 million pageviews, I’d estimate that TSD earns $18K per month, or about $200K per year. Throw in side writing gigs and a few book deals and Trent is making more than a doctor’s income (without a doctor’s debt) while writing a few articles from home. Not a bad gig at all! Not getting rich? If you’re still making your own laundry detergent, where is that money going? Heck, $200K+ per year is rich to me! Server costs are only $150/month, so that shouldn’t eat into it too much.

  11. Great article. It is a shame that people give flack to those who take the time to write blogs. There is great information here. Don’t let anyone deter you. Keep on keeping us informed.

  12. I’ve been waiting to see if anyone noticed what jumped out at me in this post.

    Trent, I think you get picked on way too much, but since you have a thick skin, here goes…

    It is a conflict of interests for you to make a profit off the books you review. In particular it bothers me that you have an Amazon link, which presumes your readers will buy the book retail with shipping, which is far from the cheapest way for them to read these books. Many of your readers are thrift wannabes that have yet really kick the impulsive spending habit. With a simple click they can spend, and feel good about it because they trust you and you gave them permission.

    I understand that you have to make money somewhere, and I understand that an ad in the side column is my way of accessing information for free. I also understand that when you write your own book, and plug it, you will make money there. I have no problem with that because the audience understands about royalties.

    The problem is when you review books from other authors, the audience doesn’t understand that you make money from books you positively review. I have never heard of a book reviewer making a profit if the books he reviews sells more copies.

  13. I had the ad-blocker “unblock” your page. I haven’t bought any of your books and I always forget to click over from here to Amazon before I buy something, so I figured it was the least I could do. :)
    I too am curious about the RSS feed as that is how I usually read your blog.

  14. Hey Brent I bought your book at the Barnes & Noble in Santa Rosa…just started on it. Thanks for the site.

    Take care, Matt

  15. I enjoyed your post regarding your sources of income and being honest about how difficult it was the first year of having your blog up. It does take time and you are right about having to possess “thick skin”. Keep it up I do appreciate your site—-thanks!

  16. Thank you for the full explanation. Most readers think money will grow on tree by starting a blog. It takes years and very hard work to be where you are at. Many sites make much more money, but I respect you for doing it your way.

  17. Blogging is my hobby and I’m inlove with it, I keep updating on it frequently. But as of now I dont earn from it that is why I am looking for an article that talk about how to earn through blogging, and until I found this, this is a great article. I will surely bookmark this site.

  18. I’ve told my readers that “making lots of money blogging” is the second oldest lie of the internet. Thanks for putting the truth out there Trent.

    Dan
    Casual Kitchen

  19. Wow, I feel like I just got a Behind the Music look at the blog. As an aspiring blogger it is refreshing to know that everyone started somewhere. Thank you so much for opening up. Cheers.

  20. I had no clue that you do not make money from your e-mails. I detest RSS but I promise to click through daily. Many thanks for the courtesy e-mail copies.

  21. How about a “Donate if this blog has helped you” button, with an annual post requesting that those who can afford it kick-in $3 per year (perhaps every Ground Hog Day)?

    It’s not a mandate, and many people probably appreciate your content and would be happy to support your efforts.

    Even with my 10% fee for providing the idea, you’ll earn a fair amount of money and perhaps even be able to eliminate the ads, as you indicate you’d like to.

    Thanks for reading.

    -Mark G.

  22. I like Simple Dollar because it doesn’t have the background baggage that makes many sites slow to scroll; it doesn’t have “noisy”, flashing, moving, ads (maybe that’s the reason for the background baggage). It’s easy to add a comment without a bunch of rigamarole.

  23. I love your site and have bought a couple of books. I am new at this enternet thing and don’t know if I have an ad block or not.

  24. Trent, when you first started out, how did you publicize the Simple Dollar? Did you just focus on writing and wait for readers to come to you or did you do stuff like blog carnivals, link exchanges and so on?

  25. Thanks for the education about the emails. I too read everything from my yahoo reader. But I’m going to go change all my setting to one article title and then click through when I read something! That way, I still have the automatic list of what I want to follow, AND I can support the creators, too! Cool!

  26. Cool post Trent. It seems a lot of people really have no idea how bloggers make money online. And I’m glad you told people the truth about how long it takes. There are too many snakes out there trying to sell “make money online without lifting a finger” garbage.

  27. Ryan (#4), Google actually finally revealed AdSense revenue share percentages earlier this year after coming under regulatory pressure to do so. AdSense for Content earns the Webmaster 68%, while AdSense for Search earns him or her 51% (with Google getting the rest of each amount).

  28. Thanks for the breakdown. Not any of our business, probably, but interesting to know nonetheless.

    I know in many past posts, people have urged you to put up a “donate here” button so they can help support you, and you have declined to do so. It’s very evident to long-term readers that you are in this business to help, educate, learn, and give us a forum for thought. Thanks Trent.

  29. I think you should change your “about” page slightly and add a paragraph in there that links to this article, since you said people ask you how you make money.

  30. As a newbie blogger, thank you so much for this post and your blog.

    I have to admit that I have aspirations of making a decent amount of money on my blog. It goes hand in hand with being able to help and entertain people as well, since you won’t have an audience if you do neither.

    I don’t think you should have a moral dilemma about putting a few more ads on this site to reward yourself for all of your hard work. :)

  31. Trent,

    Thanks for this post. Aside from cluttering up the true contents of one’s webpage, I’m afraid that if you are not in control of what is advertised on your site, you can easily sponser something that you don’t believe in. For example, I’ll be infuriated if a PayDay Loan company showed up on my blog :)

  32. I’d suggest putting a “If you like this site, consider donating $10″-button on. It doesn’t pay a whole lot (less than 1% of readers will do it), payments aren’t generally recurring, but it’s quite encouraging.

    Considering how much entertainment/education/etc. value blogs provide, they are frequently undervalued by readers—it’s become traditional on the internet to expect that everything is free, unfortunately. One thing I like to calculate as a proxy is the total visitor time over a week. I take the number of weekly visitors and multiply it by the average visitor length. Then I convert it to hours. Finally, I divide it by 40 to get the “equivalent of full time positions”. If I calculate it for my blog, I get 26 … so the real value provided would be the equivalent of managing a group of 26 people. The income from blogging, though, is a lot smaller.

  33. I am also curious about the RSS feed. Would you make more money through clicking through or are you fine with readers reading through something like google reader?

  34. I’m one of your email people. You’re still making money because if I really like a post, I forward it to friends, or I might comment, which brings me to the site. I also ended up purchasing both of your books for some people who don’t read blogs. Having good content is what keeps me coming back.

  35. It’s interesting to get a behind the scenes look, and to confirm just how unglamorous it is to run such a successful site. While it may generate a decent income, it by no means happens on its own. You have to write content constantly, and are always having to come up with new and fresh topics. It’s a lot of hard work! Congrats on your success, and for the peek behind the curtain.

  36. Interesting post. A lot of information to consider and learn from. I’d like to know how you got to 1.4 million page views per day? Do you recall what specifically took your page views over the top?

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