Why Blogging Is The Best Business In The World

Making money is all about identifying opportunity and doing everything possible to succeed until that window of opportunity closes. But most people are too afraid to take any major risks. Why should we when we have the luxury of employment to keep us comfortably numb.

The two most common people who take risks are: 1) those who start with little or nothing, and who therefore have little or nothing to lose, and 2) those who come from rich families and who also don't have anything to lose. When your name is William Henry Gates III, you're not exactly going to starve on the streets if you drop out of college.

For those of us in the middle class, we only make a change once we're agitated enough to take action. For me, I decided I had enough of banking after 13 years because the correlation between reward and performance broke down after the financial crisis.

After eight years of writing online and 13 years of researching every single industry for my job in finance, this post will identify reasons why blogging could very well be the best business in the world that anybody can start. The internet, after all, will be a lifelong trend. 

Why Blogging Is The Best Business

1) Large structural decline in the establishment. The blogging business involves writing interesting enough content to attract the most amount of visitors possible in order to earn advertising revenue. Therefore, our competition was newspapers, which have gone through a tremendous hollowing out since 2000 when the internet really started to take off.

But newspapers didn't see bloggers as competition. Individuals writing about what we ate for breakfast or chronicling our feelings online didn't matter. Instead, newspapers saw Google and Facebook as the real competition. Now Facebook is the most profitably media company around, partly thanks to the tremendous amount of fake news advertising on their platform.

As newspapers were trying to defend themselves against getting beaten up by Google and Facebook's respective monopolies in search and social media, bloggers found an opportunity to take advantage of this disruption by siding with the emerging winners.

For example, roughly 70% of traffic to this site is through Google and Bing. The traffic is free (organic) and perpetual. I've got over 25,000 e-mail subscribers, also created for free. If each subscriber paid just $1/month, I could certainly afford to take care of a family of four in any expensive city in the world.

2) Competition who doesn't fully believe in themselves. If you majored in English and then went on to journalism school for your Master's degree, you probably have better technical writing skills and reporting skills than 95% of the bloggers out there.

But what I don't understand is why don't more qualified writers who have incredible resumes focus on building their own brand and growing their own platform? For example, instead of making The Huffington Post rich writing for peanuts (or for free), why not make yourself rich writing by writing on your own site? Arianna Huffington and her investors already got rich by selling to AOL for $315M!

It's great to see more traditional journalists branch out to become freelance writers. That's an entrepreneurial step in the right direction, whether out of necessity or courage. I'm always trying to challenge those blessed with writing skills to build their own platforms. But more often than not, I'm met with skepticism and resistance.

Check out this Twitter exchange I had responding to a salty freelance tech journalist who wrote, "I begin to think that people who think they can make money from publishing original content on the internet are deluded." He was responding to publishing platform, Medium, and its layoffs.

Charles is basically bagging on people like me, who've been doing just fine for the past eight years. What's incredible is that despite helping make The Guardian, a popular British newspaper, rich as their tech editor from 2009 – 2014, Charles still doesn't believe independent publishing can be done!

As you can see from the exchange, even after all his years of experience, Charles still doesn't believe it's possible to make money as an independent publisher despite sending him this article full of examples of people who do. Anybody can do a quick Google search to see examples of how much people are making from blogging. Yet, Charles refuses to believe. When you adopt a welfare mentality, you'll never be able to make an extraordinary amount of money.

Many veteran journalists all think the publishing industry is broken. Only a few people have the courage to use their skills to make it on their own. One such person is Brian Lam, the founder of The Wirecutter, a tech/gadget review site.

Brian Lam was a contributing editor for Wired Magazine, and then became the lead editor at Gizmodo, a popular tech/gadget review site for a number of years. He then left and started The Wirecutter in 2011. On October 24, 2016, Brian sold his bootstrapped company to The New York Times for ~$30M. Not every journalist will see the same results as Brian. But every journalist should at least try to leverage their knowledge and skills to make themselves rich instead.

3) Attractively low startup and operating costs. The New York Times operating costs must be in the tens of millions a year. Jeff Bezos paid $250 million cash to buy The Washington Post in 2013. Good luck to any one of us for coming up with that type of cash to keep the lights on.

When I decided to start blogging in 2009, I hired a guy for $350 off Craigslist to throw up a generic site using the now defunct Blogger platform owned by Google. The site was called "RichBy30RetireBy40". It could have been huge! After playing around with the inferior Blogger platform for several months, I decided to start over on WordPress, a much superior website platform that currently runs Financial Samurai today. I hired another guy off Craigslist for $1,000 to set up my WordPress site and paid another $200 for some custom design work. Further, I had to pay like $25/month for basic shared hosting.

Now, creators have it so good thanks to technology and competition. You can easily set up your own site in 30 minutes by following my step-by-step guide. Instead of spending $2,000 like I did, your cost can be as little as $2.95/month for hosting and $15 a year for a domain name. I'm envious and happy for those people who are looking to build their own brand online today.

Nobody is going broke spending $50 a year operating a website. The people who do go broke are those with massive fixed overhead costs who are unable to pivot quickly enough. Why do you think there is so much retail and restaurant turnover? After sinking in hundreds of thousands of dollars in remodeling costs plus payroll costs, the pressure is on to turn a profit immediately or else you're toast.

Having a web business is the most cost efficient, low-risk way to be an entrepreneur. If you don't succeed, all you lose is your time, not your entire life savings!

4) Unlimited scale. "Give me a lever long enough and a fulcrum on which to place it, and I shall move the world," wrote Archimedes. Leverage is one of the biggest keys to wealth. There are over three billion people online and growing. Your website can instantly start competing with Yahoo or The New York Times for eyeballs, all at a cost of $50 a year.

Thanks to search engines like Google, Bing!, and Duck Duck Go, you can publish something and instantly get found for free. In the past, you'd have to spend a boatload on advertising to get attention. Now you don't, especially since social media is also free.

Financial Samurai receives about 1,000,000 page views a month with ZERO advertising. Even though 1,000,000 pageviews a month sounds like a lot, especially for a site with no forum, there's still BILLIONS more pageviews of upside! I really should start doing some online advertising, but I just can't be bothered.

Check out this regional internet traffic growth chart by data network provider, Cisco. If you want to take advantage of the next phase of internet consumption growth, it may be best to have an Asian-themed website with English written content and multiple Asian language translations. Hmm, know of any sites with this type of combination?

An Asian-themed website with English written content sounds like a good idea

5) Massive profit margins. When you run a lifestyle business, you want to be as profitable as possible. You can't afford to keep on operating at a loss for years because you probably don't have any or many investors with unlimited sums of money. Besides, given the low startup and operating costs involved in being a blogger, the operating profit margins are huge compared to any other industry.

Take a look at this great example of the average fast-food restaurant profit margin. A $27,101 operating profit before paying taxes on $821,256 in annual revenue is absurdly small! Are you willing to earn just a 3.3% operating profit margin for all your hard work? I sure as hell ain't.

I'd rather just spend six months writing a severance negotiation strategy book and earn ~$36,000 from it passively for the rest of my life. Even if my only source of income was my severance book, my profit margin on the book alone would still be well over 80%.

Now let's take a look at operating profit charts I created for a relatively young blogger and a veteran blogger.

With $12,000 in annual revenue, this 26 year old blogger has an operating margin of 70%. Not bad! Nancy loves to travel and decided to start a blog to chronicle her adventures and lower her costs. She's built up a brand for herself and now earns a healthy $1,000 a month from her site. It's not enough to live on, but it's a great supplement to her $36,000 a year day job working at a retail clothing store.

Let's take a look at Nancy's potential future if she keeps grinding away.

After six years of working on her side hustle, Nancy decided to leave her $55,000 a year job as a retail store manager and work on her travel site full-time because she's now earning $100,000 in revenue. She can now afford to boost her travel budget up from $1,500 to $5,000 and increase her travel meal budget from $500 to $2,000.

Despite her large travel and meal increase, her operating profit margin soars to 90% because all her other costs are relatively fixed. This is what we call "operating leverage." Yes, she had to increase her hosting cost from $120 a year to $360 a year due to the increase in traffic, but an extra $240 is nothing compared to her revenue, which has increased by $88,000!

Here's a nice chart that gives you an idea of industry net profit margins (after tax). I wish I could find a similar chart that shows operating profit margins (after expenses, before tax) to have a more apples to apples comparison. But even if you increase all the net profit margin numbers by 50% (Health Tech from 22% to 33%), no industry can compete with the blogging business at 70%+ operating profit margins.

6) No more annoying bosses. One of the biggest reasons why I no longer wanted to work in Corporate America is because I couldn't stand the constant micromanaging by new bosses. I literally had six new bosses during the time I was at my old company. It was frustrating to deal with new management styles and often very insecure people who had to prove to their bosses they were worthy.

I really couldn't stand having to go to a meeting to talk about what we should talk about in an upcoming meeting. Playing politics to get ahead is a soul-sucking endeavor that will burn out even the best ass kisser. In the end, all anybody ever wants is to get rewarded commensurately with his or her performance. With a blog, you either write and flourish, or you come up with some excuse not to write and die. There's nobody else to blame or congratulate but yourself.

7) Much better hours with no commute. It's completely inefficient to have to commute to and from work every day. Not only do you waste time commuting, you increase your stress level, increase your chance of getting hurt, spend more money on gas, maintenance, tickets, and fares, and potentially hurt someone else as well! For those of you who leave home between the hours of 7am – 9:00am, I commend you for your bravery and patience. The same goes for those of you who leave work between the hours of 4:30pm – 7:00pm.

Source: US Census Bureau

With blogging, all you've got to do is open your laptop at home and get to work. You can also work from anywhere in the world there's internet access as well. No wonder why so many bloggers decide to incorporate travel as part of their blogging business.

There's no face time necessary either. Think about all the times when you stayed back at work, surfing Financial Samurai because your boss was still there. All you wanted to do was get out of there so you could beat traffic, spend time with your partner, play with your kids, or get a cold brew. But no. Your workaholic boss kept you from living your life.

8) Exercise more of your skills. Companies like Google are still able to hire the best and brightest kids because they have the most money to pay. Unfortunately, they hoard talent with their mega billions and underutilize a vast majority of their employees' skill-sets.

Can you imagine going to a prestigious private university for $250,000, only to spend 60 hours a week trying to motivate your Uber drivers to continue working for peanuts by creating happy emoji faces in the app? How mind-numbing is that? If purpose didn't matter, nobody would quit the Goldmans, Googles, and McKinsey's of the world because they all pay so well.

One of the main reasons why I decided to go to business school was so I could explore entrepreneurship. Because I didn't grow up rich (and wasn't too good in higher level math), I studied Economics and Mandarin in college to best help me get a job at the time. But after four years of work, I could afford to study new fields, especially since my employer paid for my MBA.

It feels truly wonderful to be able to utilize more of your skills in everyday business. For example, with Financial Samurai, I have fun writing about finance, negotiating business deals, marketing my site organically online, and practicing various forms of communication. The more you get to exercise your brain, the more fulfilled you will be.

9) You don't have to sell a thing. If you hate selling, like so many of us do, then blogging is simply the best because you can create a revenue stream where your readers/customers never have to spend a penny. Revenue comes from click ads, banner ads, affiliate products, and your own products.

I would venture to guess that 99.9% of you have never given me any money, and that's just fine by me! I like pounding away at the keyboard because it's fun. I enjoy highlighting financials products that are free to use or may save or generate money for everyone. It's much more rewarding to make money off corporations whose products can help individuals, rather than make money off individuals themselves.

I love the fact that anybody, rich or poor, young or old, can come to Financial Samurai to find an answer to one of their vexing financial problems for free. They can leave a comment to ask a question or interact with other readers to learn more as well. The best reward is hearing from readers over the years about how an article on Financial Samurai has helped improve their lives for the better. One might even say blogging is like a "passive giving machine" once the search engines index your articles.

Here's the other thing, parents are paying exorbitant amounts of money for grade school and university because they believe education is the most valuable gift a parent can give their child. Therefore, how awesome is it to give away real world education to the very parents who pay those enormous sums of money for tuition? Right on!

Here's a nice comment I recently got from a reader on my historical 401k contribution limits post. The post doesn't just highlight what the limits are, the post tries to illuminate the value of your employer's potential match and to question the employer's commitment to their employees.

10) Anybody can create. With blogging, you don't need a lot of capital to start or operate as I've pointed out. Further, you don't need to have a pedigree from UC Berkeley either. All you need is the ability to regularly come up with helpful topics to write about. If you can speak forever, you can write forever because ideas just come naturally. There's no need to write amazing prose because you aren't writing a New York Times bestseller nor are you writing for the New York Times!

If Dr. Phil can make money teaching people how to lose weight, anything is possible!

There are people who started with no clue about the topics they are now experts writing about who've made huge sums of money. For example, Dr. Phil, who is obese, wrote two best-selling weight-loss books, and he's still obese. Dr. Phil didn't give a crap about what other people thought about him and his expertise. He created something from nothing, influenced millions of people, and got rich anyway.

Now imagine what you can do with a little bit of expertise in your field. You could make a killing! This is why it continues to perplex me why journalists with all the skills and pedigree in the world can't go on to make it big on their own.

11) The ability to create positive change. The world is a wonderfully messed up place. Despite tremendous progress on the social and economic front, there's still plenty of issues to address. I'd like to think that we all want equality for our children, even if we do prefer a competitive advantage.

A blogger has the ability to support great organizations, point out flaws in suspect organizations, and share stories about important issues so that nobody ever has to feel alone. The greatest reward a blogger can receive is knowing s/he has made a positive change in someone's life. This is one of the main reasons why I accepted the job as an assistant varsity boy tennis coach at a nearby high school.

After a while, making more money starts feeling very empty. Knowing that you're helping someone for free is an awesome feeling.

Reader thank you e-mail 2017. This type of feedback is way better than money.

Blogging Is The Best

Getting rejected by so many tech companies since I left finance in 2012 was a bummer. But each rejection gave me a "power up" to try harder and make it on my own. Never would I have imagined during college or even just 10 years ago that having a simple website would allow me to be 100% free.

All any rational person ever wants is to see a correlation with effort and reward. Being an entrepreneur gives you the most pure correlation possible. And if you choose blogging as your business, you just might stumble upon the most rewarding, most profitable, and most fun entrepreneurial activity around.

Related: Real Estate vs. Blogging: Which Is A Better Investment?

Any entrepreneurs out there want to challenge my thesis that blogging is the best business in the world? Please feel free to make your case by discussing your company's profitability, ongoing maintenance, scalability, longevity, and autonomy. What are some more reasons why blogging is the best business in the world?

Source: Why Blogging Is The Best Business In The World