Monday, October 5, 2009

Passive Income True Potential

I found this useful article on a blog regarding how to calculate the true potential of passive income online earnings. By calculating the amount of time we have put into writing articles for our blogs, and keeping track of our earnings, we can figure out how much money we are making per hour. Compare that with our active income sources and you can find out which is more "productive". The article is attached below:

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HOW TO CALCULATE THE TRUE POTENTIAL OF PASSIVE INCOME ONLINE

Building passive income online can be a great opportunity to take control of your personal finances. It typically requires a lot of hard work up front to get the income stream created. If you have built a solid income source, then your hard work will pay off down the road. But how can you tell the potential of your time and effort spent? By projecting out your earnings per hour and comparing it to other income sources.

I recently completed a personal challenge that required me to write 100 eHow articles in 1 month. While I did not reach my 100 article goal, I still finished the month with 72 published articles. In order to see the true potential of the time I spent writing these articles, I can project out my earnings for one year.

eHow Dollars per Hour Earnings

In the first month of writing these 72 articles, my eHow Earnings totaled $124.27. I spent 42 hours writing these articles which calculates to ~$2.95 per hour. I will admit that there is nothing special about earning $2.95 per hour. However, if you project these earnings out over the course of 12 months, you may change your mind.

I am in the 2nd month of collecting earnings after creating this passive income online source. The beautiful thing about this income stream is that I will earn a projected ~$128.63 from these same articles this month with no time spent on my part. That pushes my earnings over $6 per hour!

If I were to assume that these articles could continue to earn the same amount each month for 1 year, my earnings jump to $36.13 per hour. I could keep going, but you get the picture. Earning over $30 per hour (and possibly a lot more over time) is absolutely worth my time and effort when compared to my active income earnings.

Active Income Dollars per Hour

My current job that is earning active income is a salary position with a company that comes with health benefits, a 401k match, as well as a steady paycheck. Based on a normal scheduled of working 60 hours per week, I earn around $24.95 per hour (not factoring in any benefits).

Lately, because of staffing cuts and projects, I have been working closer to 70 hours per week. If I were to calculate my earnings per hour rate based on one full year of working at this pace, it would come out to $20.80 per hour.

Comparing the Income Sources

If I were to ask you – Would rather earn $30 per hour or $25 per hour? What option would you pick?

Obviously there are several assumptions in these calculations that I have provided. Health insurance coverage and 401K employer matches are not factored into my active income calculations.

I am also assuming that I can maintain the current earnings rate for my eHow articles. Who knows, the company could go under tomorrow and those dollars would go away. But who is to say that my employer couldn’t do the same?

By projecting out your passive income online earnings, you can easily compare them with other income sources. These calculations can be an excellent motivator to keep pushing you along!

How much is your active income job really paying you?

The original article can be found here: http://www.passivefamilyincome.com/2009/09/18/passive-income-online-earnings/
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See Related Articles:
1. I Received over $1000 in Dividends for August 2009
2. Passive Income Sources

4 comments:

  1. I like this post :)

    Thanks for sharing eHow website

    I also share with you associated content website. I wrote 4 articles so far, which didn't take me long. So far earnings is about 63 cents, most likely because I didn't do anything further.

    ReplyDelete
  2. Hi SgFF, it's me again

    I did some research and found that non-US citizens are not eligible for eHow.

    "The Writer's Compensation Program is not available for non-US citizens or non-US residents at this time."
    http://www.ehow.com/about_us/FAQ_ehow.aspx#q61

    ReplyDelete
  3. That's right. Most bloggers in the US do write pretty much articles for ehow and earn a decent sum.

    Been doing some research and realised that streetdirectory.com would be similar version of generating online income to ehow, except that you would need to register and showcase your writing skills before you get paid as their writer.

    ReplyDelete
  4. Thanks for sharing JW and Andre,

    Yep. ehow is not available for us. But we still have the option of using Adsense and other affiliate programs.

    To write 4 articles and earn 63 cents is not bad considering that you didn't spend much time doing it.

    Most importantly, it is to enjoy writing and the topic that you are sharing has to be useful.

    ReplyDelete

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