A Look At Blogging From A Financial Perspective

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My three jobs:

I like to say I have three jobs - my day job, my internet marketing job and my investing job. The real point I want to make with this short article is a common piece of wisdom for every investment. I use the term “Investment” instead of “Job” because your education and previous work experience were investments, and you current job is an investment. You invest your time and effort, and you receive rewards.

The meat:

Ok so the words job and investment are interchangeable for this article, now let me give you the meat. The steak, sausages, chicken, veal, hand raised rare black footed acorn fed pig, etc. But not only the meat of this article, but the meat, vegetables, sugars, diary products and the entire food pyramid for your life!

“Real money is made, not by timing the market, but by time in the market”

What?

It’s not about choosing the right time; it’s about being there for a long time. And this applies to pretty much every legal way to earn money. (Notice I said earn? This cuts out lottery or inheritance)

People who buy shares and hold them for a while will do better (on average) than people who try to day-trade those same shares. Spending more time in a career gives you a better chance of advancing further in that career/earning more money.

How does this apply to blogs?

Every single word you write is an investment.

This sentence is worth 15c per year. Actually, every sentence is worth 15c per year. Doing a quick calculation on this article shows that I’m not earning a great rate for writing it, but that is just the cash value - our blogs are worth more than the money they earn.

Typically an investment is worth about fourteen times its yearly income. Suddenly each sentence is worth $2.10 - quite obviously we can’t use the same numbers for online businesses because it is still a very fresh market, so it is more normal to see people buying a website for 300-400% of its yearly income.

A better way to calculate site value is in traffic because traffic costs money - depending on your niche market, each unique visitor could be worth as little as half a cent, to as much as $1 - we get these numbers from looking at what it costs per click for adwords advertising. 50 daily unique visitors in a niche costing 10c per visitor is $1825 worth of yearly visitors. Using the conservative 300% calculation for website value, that puts our sites value up to around $5475

Missing something?

Great - so if I have 50 daily unique visitors, my site is worth $5k, but how do we calculate sentence value?

Free traffic comes primarily from search engines. The more words and phrases you have on your blog, the higher the chance you will get some traffic from search engines. Also, more content means more things people can link to.

The best cut of the best meat:

Time in the market gives you more content, more backlinks, higher page ranks, more high ranking search phrases and basically, more money.

Example:

A great little example is a new site I started with my business partner Craig, literally 16 days ago. Every day we post a new article and give it the appropriate treatment. Looking at my keywords graph (the important one) in google analytics (tutorial coming soon) I see a fantastic slope upwards. From day one on September 22^nd, we have a steadily increasing number of unique visitors from search results.

Day 1: 2 searches

Day 2: 1 search

Day 3: 0 searches

Day 10: 37 searches

Day 16: 80 searches

In this market, each visitor is worth 5 cents, although we could do some tweaking to turn that up to $1 each. So in its current state, the site receives $1460 worth of traffic each year (but that ramp is only just beginning to grow, expect to see four and five figure numbers shortly) which gives our 16-day-old site a value of around $4280

Hypothetically if we tune our adsense, and grow our traffic to 2000 daily uniques (I give it 2 months) - our website will be worth the magic $1,000,000 - A more conservative guesstimate at 5c/visitor, is a healthy $100,000 website! But to be honest, with 2000 daily uniques I could easily monetize the site with a slap dash product I write myself for double that income. That’s a fair $6k monthly.

The moral to the blog post:

If you keep posting something, anything to your blog, eventually you will start to see traffic. If you target your blog correctly you will see more traffic sooner, but if you post a little 15 sentence article every single day for one year, you have 5475 sentences which may contain key phrases that people may search for. 5475 sentences which might jerk somebodies interest enough for them to post a link on their blog and give you a free backlink.

Every year you need to work exponentially less to achieve the same levels of growth.

I hope I have given you some food (or meat) for thought, and I hope I have given Craig an myself some extra key phrases for google junkies to find.

Yours in blogging,

Vince