Updated on 09.29.09

How Does The Simple Dollar Earn Money? Some Notes on Do-It-Yourself Self-Employment

Trent Hamm

After some positive response to yesterday’s comments about an article explaining how I earn an income from The Simple Dollar, I decided to follow up and give the process a thorough description. Enjoy!

Quite often, when I tell people that I’m a full time writer, they’re surprised. They expect that by saying that I’m a writer, I write books (I have written two of them, with one in print and one forthcoming) and articles and that’s it – if I do anything online, it’s just promotional work for those books and articles.

That’s not the case at all. In fact, the majority of my income comes from The Simple Dollar – the books and articles I write are just continuations and further explorations of ideas I first touch on here.

How exactly does that work? Here’s the scoop on how I actually earn my income and how it all works.

How I Got Started
I didn’t start The Simple Dollar under the belief that it would earn me any sort of significant income. Instead, I started it because I love to write and I felt like the personal finance journey I was on – recovering from a nightmarish level of debt – was something other people were going through and could relate to.

Money was – and still is – something that’s difficult to talk about in the evenings when hanging out with my friends. People are generally uncomfortable revealing anything about their financial situation in social situations. I knew that, when I was going through my financial recovery, I did want to talk about it – but I knew that it was something of a conversational taboo.

At the same time, I love to write. I’ve written for my own enjoyment almost every day for more than a decade (and nearly approaching two decades at this point).

The two meshed naturally – I’ll just write about my money situation and share it freely with others. The internet provides a great forum for that. I didn’t really worry about income – I just started writing every day because it was fun. I put a few simple ads on the site, figuring I would just earn a few pennies from them, and I just wrote.

I started off with just my friends reading the site. I would link to other websites when I’d see an interesting article there and they’d notice, come visit, and sometimes become readers. They’d link to me. The Simple Dollar started showing up in Google search results because of the existing links and readers. More readers came in, and the snowball built.

Eventually, I had hundreds of thousands of readers a month, along with tens of thousands of people subscribing by email and RSS readers. With those numbers of readers came more responsibility – and more time. I started spending lots of time doing things like answering emails and approving comments and handling interview requests. At some point, the time investment I was making in The Simple Dollar needed to return a worthwhile income or else something had to give.

How do you transform that time investment into income?

Earning Income
Each time a reader visits a page on The Simple Dollar, they see a few ads. I make an effort to make them fairly unintrusive – when you first load up the site, for instance, you only see one ad, the one in the upper right. As you scroll down, you see a few others.

On other websites – as I’m sure you’ve noticed – ads can be a lot more intrusive. In general, the more intrusive an ad is, the more a website owner gets paid.

Here’s how “getting paid” works. Some ad broker – for many sites, it’s Google, but I’m transitioning to using Federated Media – sells some enormous number of ad views to ad agencies for specific campaigns. So, for example, Federated Media might sell 200 million ad views to American Express all at once. Since American Express is a large company, they want lots of ad views and don’t want to deal with hunting down individual sites that might display the ads, so they buy from an ad broker that does just that.

Federated Media, in turn, splits those 200 million ads among a large handful of sites they represent. For example, they might assign one million of those views to The Simple Dollar.

That’s where I come in. I go about my business writing good stuff that people want to read – just simply talking about money in a frank way and offering the money advice that actually works for me – and people then visit the site. Every time a person visits a page on The Simple Dollar, it counts as an ad view.

Over the course of a month or a month and a half, I’ll rack up a million pages viewed on The Simple Dollar from readers who come here to read what I’ve written. Once that’s completed, I’ve fulfilled my obligation to Federated Media and they then pay me my portion of what American Express paid them – the appropriate fraction of their total ad purchase minus Federated Media’s commission for handling it.

To put it in simplest terms, I earn a small amount for each page viewed on The Simple Dollar. It’s a tiny amount – a fraction of a cent – but if, over the course of a day, thirty thousand pages are viewed, that adds up to nine hundred thousand views over the course of a month. Even if I just earn two-tenths of a cent for each of those views, that’s still $1,800 per month. (I can’t actually disclose the true amount I earn per page viewed because of the contracts I’ve signed, but the numbers here are fairly realistic per campaign.)

I also earn a bit more from my book reviews, which I’ve been doing since the start of The Simple Dollar. Each book review includes links to Amazon because the pages about books on Amazon are usually pretty informative and interesting. However, if a person chooses to buy that book at Amazon after following the link there – or buy anything else at Amazon – I earn a small percentage of that revenue.

These things only work because I have a substantial amount of readers. When someone starts a website, the audience at first is just going to consist of family and friends – maybe a thousand pages per month. At two tenths of a cent per page, that’s $5 for the whole month – not worth the effort of writing a lot of posts.

What happens over time, though, is that a site that writes consistently good stuff slowly picks up more readers. The second month might see 1,500 pages viewed, then the month after that might see 2,500 pages. The rate will grow over time, in fits and starts, and so will the income.

It takes patience. It also takes the ability to write consistently well (not perfectly, but good enough to interest people) so that they’ll come back in the future. It also takes a consistent focus on a topic that people are interested in – if you just write about whatever interests you each day, you’d better be an exceptional writer or you’ll never make it.

Why Not Load Up With Ads?
As some of you might have already figured out, a site earns more per page if it’s loaded up with intrusive ads. The more ads a site owner can put on a page, the more they’ll earn from each person that visits the site.

So why not load the site up with ads?

In the short term, that works well. It earns you a big boost of income. If you double the amount of ads on a page, you double the amount you earn from that page (roughly), and thus double the amount you earn over the course of a month.

The only problem is that if you load a site down with ads, it becomes harder to read. It becomes less enjoyable to read. It goes from being something exciting and interesting to something that seems to just be attacking you with ads. And readers begin to go away.

Soon, you’re displaying less than half the pages you were once displaying, so you’re actually earning less than you were before. On top of that, you have substantially less influence as well.

The Value of Influence
Influence itself has a lot of tangible value. Here’s an example of how that works in my case.

For many years, I tried to get the attention of book publishers with a fiction novel that I completed in 1999. The rejection letters piled up, and many publishers didn’t even bother to respond. Only one publisher even nibbled a little bit, and then they rejected it.

Once The Simple Dollar became popular, book publishers started contacting me. One of the first ones was Adams Media, who worked together with me to build the idea behind 365 Ways to Live Cheap, my first book. Once that one was successful, several publishers contacted me about a follow-up and I chose the one that gave me the most creative control.

Why did this happen? Book publishers have direct evidence now that the things I write have an audience – a large group of people will come around consistently to read what I write. That influence led them to believe that a book written by me was worth investing in, whereas before I wasn’t worth the time of day to them.

This same principle holds true for magazine and newspaper articles, speeches, and other opportunities. There is additional value – and income opportunities – simply from having a large audience on The Simple Dollar.

“I Can Write Better Than You… So I Should Be Doing This!”
Yes, you probably can write better than I can – and good for you. But making even a small income from an internet site is a lot different than other avenues for earning income.

First, you have to have tons of patience. Your first few months are going to be incredibly lean. You’re not going to earn much at all at the start, even though you’re putting tons of time into writing worthwhile stuff.

Second, you have to write good content every single day. Writer’s block doesn’t fly here – if you have writer’s block, you can’t just choose not to write for a while until it comes back. It’s much like being a beat reporter – if you don’t make the deadline almost without fail, people will stop turning to you for the information they want or the entertainment they desire.

Third, you have to be selfless. The only thing that matters is the readers, period. When they read an article of yours, are they actually getting some value out of it? Here’s an example: linking to sites that are better than yours, even though it risks readers leaving to those sites and never coming back. In truth, though, you’re making an effort to link to the best stuff – the stuff that resonates with you – and bringing it to your readers, even if it means some risk to you. Sure, a few readers might leave and never return – but others will respect and value what you do.

Fourth, you have to be writing about something people care about from a perspective that’s either interesting or that they can identify with. Dooce is popular because she writes about something many people care about (parenting) from a perspective that’s interesting or identifiable, depending on who you are (self-deprecating and snarky). You have to have both elements – a topic that’s interesting to a lot of people from a perspective that’s interesting to a lot of people. Add on top of that the requirement to constantly write good content and blogging at a high level can drain any writer.

I’m not trying to dissuade anyone from earning a living doing this. It’s just important to note that these are the realities of the situation.

In Conclusion…
Yes, you can earn money from blogging, but it’s not as easy as just logging onto the internet and voicing whatever is on your mind. It takes patience, focus, passion for your topic, and some “short order” writing skill.

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  1. Julia says:

    You very often suggest blogging as a way of earning a bit of side income. But then in this article you focus on all of the difficulties of blogging full-time, many of which apply to anyone who blogs.

    I am a bit confused. Is your opinion that it is a difficult full-time career, but a good option for a side income?

  2. Emily says:

    Your selflessness, your love for writing, and the quality of what you do really shine through, Trent. I’ll admit that sometimes I skim your articles if you’re reviewing a book I won’t read (or can see on your goodreads list) or covering a topic that doesn’t apply to me… but your consistency and honesty keep me following you every day. Thanks for the tips!

  3. Arthi says:

    Trent, some of your long time readers might be grateful enough to want to contribute something.

    Popular web comics usually sell t shirts related to their comics, to keep themselves in business. And the fans do buy the t shirts and thus support the comic.

    Have you thought of these venues for earning extra money?

    You aren’t going to push anything onto your readers, it will just be a means for loyal readers to show their support

  4. KAD says:

    This is one of the clearest posts I’ve ever seen about how a blog makes money. Well done!

  5. Trent Hamm Trent says:

    “I am a bit confused. Is your opinion that it is a difficult full-time career, but a good option for a side income?”

    Yes, it’s a great way to earn a small side income and it has a good chance of slowly blossoming into a full time income if you stick with it over a very long period. However, quitting your job to start a blog will end in disaster – you just don’t earn enough at first (and sometimes ever) to make a full time living from it.

    “Popular web comics usually sell t shirts related to their comics, to keep themselves in business. And the fans do buy the t shirts and thus support the comic.

    Have you thought of these venues for earning extra money?”

    My readers tend to be pretty frugal and usually won’t buy those types of things. I had some ideas for t-shirt designs for a while and considered opening a Cafe Press store, but I didn’t think it’d amount to anything at all.

  6. John says:

    How much time do you usually spend on this blog?

  7. kristine says:

    I buy almost nothing new- not even books. But I WOULD buy from you a book of Frugal recipes and How-To-Makes: food, detergents, compost, the gifts your wife sews, all of it. I am a huge fan of the invaluable reference that saves me money time and time again. Now THAT I would pay for.

    Yes, I could wade through posts and print them out, but life is short, and ink is not free. You already have all the elements to compile it, so if you publish it, I will buy it.

    As for the financial tid-bits? I’d rather read those here, and I have a similar library to yours already.

    Good luck! And yes, this is the best post I have seen on how blogging for income works-honest-no rose colored glasses. Glad you stuck with it.

  8. Kris says:

    Your writing is so clear and appealing, your ideas always interesting.
    I still don’t completely understand how you make money from RSS feeds (I read through Google Reader), but I think you’ve answered this in a previous post.

    I’m sincerely happy for you – you have most obviously found your passion.

  9. I went to a great talk yesterday… About success. The speaker, Richard St. John, pretty much said that if you have passion and do what you love, the money comes anyways.

    Sooooo, that, coupled with this, is making me hope that if I work hard at my passions (Cars + writing & photography), the money will eventually come, as long as it’s not my main motivation. Which it isn’t, blogging is super fun!

    While I don’t make any money with my current blog (I did some paid posts on my old blog for $15 – $20 a pop before I quit writing on that blog) I feel like the improvements to my writing are worth it all by itself. I’m hoping it’ll be a portfolio of sorts, so that I can expand into other forms of writing.

  10. Trent Hamm Trent says:

    “How much time do you usually spend on this blog?”

    I spend about fifty hours a week working. The Simple Dollar eats the vast majority of that time.

  11. Don says:

    If I use an ad blocker so I don’t see the ads, do you still get credit for an ad view when I come to the site, or does there have to be some feedback that the ad actually came up on my screen?

  12. Lisa says:

    Same question, Trent: Does using an ad blocker change anything on your end?

  13. Arthi says:

    “maybe a thousand pages per month. At two tenths of a cent per page, that’s $5 for the whole month ”

    I guess it is actually 2$, and not 5$ as mentioned.

  14. Arthi says:

    Trent, perhaps, like Kristine mentioned in comment #7, readers will be willing to buy a book of frugal recipes and how-to’s.

    You might consider that.

  15. Eden Jaeger says:

    A million pageviews per month for $1,800 sounds pretty bad! I know that’s just a sample, and I’m guessing it’s on the low end, but still that is a bit disheartening for someone hoping to make some money with ads on their websites.

    My latest project (linked in my name) is off to a fast start, but I’m only seeing about 200K pageviews per month, and the income from Google AdSense is incredibly tiny. Do you think AdSense is just not the best way to go? I know I need to give it more time, but I also don’t want to leave money on the table if I can avoid it.

  16. Trent mentioned that you have to write about a topic that people care about. That is absolutely true. But, if you want to make money blogging, you also have to write about topics that make other people money.

    I see people creating blogs about all sorts of topics that have little to know commercial products or services associated with them. This makes earning money from blogging much more difficult.

  17. Adam says:

    I noticed you recently switched from google search as well, does this automatically go away with adsense? or are you trying to break away from google completely for some reason?

  18. Juli says:

    I think you should put a top jar out. Why not? You’ve given me a lot of value, and I’d toss in a $5 occasionally. If one person feels that way, then I’m sure there are more.

    No need to promote it, just toss it out there with a note once.

  19. Shannon says:

    GREAT post ! Keep up your excellent work. Love your being considerate in not overwhelming your site with ads and not selling “stuff.” Great content will always bring readers. Thanks.

  20. That’s the other thing, you REALLY have to love and be passionate about your topic. Especially if you are going to spend most of your mental energy on it and not burn out. Ultimately, too, I think a deep need to express a specific message is critical.

  21. Kevin M says:

    This might be too personal, but any idea how much you make per hour? Just curious.

    Have you come close to the level of income from your previous job – either in any one month or annually?

  22. bethany says:

    debthawk, I respectfully disagree.
    You just need a website that people get something from and are willing to visit frequently. I make a nice side income from my blog, unnecessaryquotes.com which is really just a goofy idea, dedication (I probably put in an hour or two a day filtering submissions, writing captions and another hour moderating comments) and luck. I wouldn’t recommend “make a viral blog” as a viable career path, but you don’t HAVE to have a serious blog to make some money.

  23. Eileen says:

    Super helpful post. Thanks for all the nitty gritty details. It was super informative! Eileen

  24. Mukesh says:

    In the beginning of this article you mention about a previous article explaining how you earn income, can you put a link of that article? Usually you always put reference links and I don’t see that article in your timeline.


  25. Curt says:

    Excellent insight. Thanks for sharing the truth about how hard it is to make money at blogging.

    Your reasoning is why I have chosen not to blog for income, but to blog for influence and the opportunity to teach others about money and the economy.

    My reward comes from the knowledge that I’m gaining from my research which results in better investments of my own.

    This also gives me the opportunity to be very, very patient, in which I can blog for many years before earning a supportable income.

  26. Great post – it is so helpful to others to hear both how profitable blogging can be, and at the same time, how challenging to get it going. Because I know myself how challenging blogging well is, I can tell how much work you put into your site.

  27. Megan says:

    Interesting and insightful, thanks for this post Trent.

    I read your posts through Google Reader and occasionally click through to read comments. How do Reader and other similar programs affect your income?

  28. Matt says:

    This is a fantastic article. After reading this article and reading the book Crush It! that you reviewed, I finally understand how you can do this for a living. The fact that you release new and valid material every day amazes me. I’m pretty passionate about golf and have started a golf blog, but can’t imagine the determination it would take to write every day! Keep up the good work.

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