How I Make Money Online

First of all, thank you to those who participated in the poll for future Frugal Pinoy topics.  Your votes will help me decide on what personal finance topics to blog about.  You can still vote in case you haven’t.  I’ll probably keep it running for the entire month of July.  If you want to vote, click here.

So far, there have been some votes for passive income and making money online.  Instead of a textbook discussion of these things, I’ll give real-life examples from what my partner and I do to make money online.  If you want a more detailed explanation on these income sources, simply ask me a question via the comment box.

Affiliate programs. Basically, with affiliate programs, you’re trying to sell other people’s products and you get a commission for each sale you make.  The way this usually works is that you place a link on your website to the product you’re selling, and when you make a sale through that link, you get a commission.

There are some networks for affiliate programs such as Commission Junction and E-junkie, which collect several programs for you, and you just select from their database. Here are the affiliate programs I make some money on:

• Zazzle.com.  Basically, you create designs for shirts, mugs, and other items and make money from each sale you make.  Three people have bought the shirts I designed.  Alternatively, you can also sell other people’s designs, but the commission you get will be less (since the creator gets a bigger percentage).  What I like about Zazzle is that they pay you via PayPal.  You can receive payments monthly (if you earn more than $25) or yearly (if you earn less than $25).
• E-Junkie.com.  The payout rate for E-junkie tends to be higher, and I usually select affiliate programs with at least 40% commission.  Like Zazzle, they also pay via PayPal.

Since we’re not yet that serious about affiliate marketing, we only make a few dollars here and there for various affiliate programs.  But if you add up these few dollars, they’re enough to pay for some yearly domain renewals.

Advertising networks.  If you have a website, you can have some space where you’ll put advertisements and you can get paid per click or based on time (per week or per month).  The pay per click ads are usually from networks like Google Adsense or Linkworth.  The ads based on time are often private advertisers who contact you and say something like “I’d like to place an ad on your website for one month”.

We get a nice amount from Adsense each month, especially after we’ve used it on a wide variety of websites.

Contract work.  The bulk of my income comes from contract work, where I do various online jobs for companies abroad and I get paid for them.  It takes more time than the above methods, but only roughly 9 to 15 hours per week.  Mainly, my partner and I are online writers, but we also get some design work.  Here are the blogs I write for:

• Pimp Your Work.  This is my main blog.  The payment structure is that I get a base pay each month, with a traffic bonus of $1.65 per 1,000 page views.  My traffic bonus is roughly just as much as my base pay.  The topic for this blog is workday efficiency.
• The AppGap.  This is another blog which pays me per post.  It’s about Web 2.0 and the future of the workplace.
• Web Worker Daily. This is a blog aimed at web workers like me, like The AppGap, it pays per post.

Among these online moneymaking opportunities, the affiliate programs and advertising networks tend to be more passive.   However, the set-up will take up some time and money.

I’m going to talk more about these online income opportunities through Frugal Pinoy. So if you want to know more, just stay tuned

Have you tried making money online?  How’s it been so far?  If you haven’t tried it yet, is it something you’re interested in?  Please leave a comment and share your thoughts.

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5 Money Lessons I’ve Learned from Freelancing

I’ve been a freelance writer for the past four years, making money almost exclusively online. The corporate world is definitely not for my personality, so I did everything I could to avoid it. Along the way, I’ve learned several useful money lessons that I wouldn’t have learned otherwise.

Bill early, pay late. This took me a while to learn, and it’s more important especially if you have very busy clients who remember to pay you only a week after you send your invoice. Now, I bill them on the 1st of the month, while I pay for business expenses (contractors, web hosting, subscriptions, etc.) mid-month. By practicing this, you’re making sure that you already have enough funds when it’s time to pay for business expenses.

Diversify skills and sources of income. I didn’t just depend on my writing, especially when I was starting out. I also did a lot of design work, search engine optimization, edited videos, some data entry jobs, sold some of my artwork, and joined ad networks such as Google Adsense. Having various sources of income ensures that you always had an alternative venture in case your main gig ran a bit dry.

Also, as a freelancer, the diverse skill set allowed me to upsell services to clients (“Do you want some new graphics to go with the articles I’m writing for you?”), and I would become their go-to person for most of their web needs.

Be frugal with your time, not just money. One of the big problems I had with my first years of freelancing was that I let it consume so much of my time. I would work longer and harder than 9 to 5 ‘ers, thinking that this was the only way for me to make enough money. Eventually, I became a productivity blogger over at Pimp Your Work, and had to learn some time management skills. Now, I have made myself efficient enough to only work 9 to 15 hours a week, and can now enjoy the freedom that freelancing promises.

Have a padded emergency fund. I probably sound like a broken record since I talk about emergency funds over and over. But it was a real lifesaver during those months when I would earn only P12,000 and had to feed and pay for a household of 3 people, and my tuition too.

Don’t undersell yourself. I used to charge $5.00 for a 500 word article. That’s okay as a starting point just to build up your folio, but I stayed around that price range for one or two years, even after I was getting so many happy testimonials from clients who kept referring me to others (meaning: my work was worth more than $5). Hindi ka talaga mabubuhay kung $5.00 per hour ang singil mo. Especially since I had dependents. It took me a while to realize that people aren’t just paying for the words I write, they’re paying for an hour of my life and the unique insight I bring to the table. Does that really just cost $5?

Competing with others on the basis of price alone isn’t a sound business model. Someone will always be cheaper than you! So I competed on quality and experience, and can now turn down work that I don’t find interesting.

Every job title, every industry presents its own unique money lessons. What are the money lessons you’ve learned as a result of your work? Please share them with other Frugal Pinoy readers

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