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Thursday
May312012

Income and Debt Report - May 2012

I think it is fair to consider May a bit of a sophomore slump from a passive income perspective, but we made huge gains with our other financial goals.  This is our second monthly report, that I've now labeled as our "Income and Debt Report," which more accurately reflects our overall economic goals.  

May has been a busy month, punctuated by quite a few events both with our new Internet ventures and our personal and work lives.  Here's a bit of a recap:

  • We lost our AdSense account at the beginning of May, which we were alerted to by an automated message from Google with no advanced warning.  Our appeal, answered within hours by another automated message, was also denied.  Alongside the loss of the account, we also lost the bulk of our first internet advertising earnings.  Despite Google's policy to not give specific reasons for the loss of AdSense accounts, I conducted my own post mortem evaluation and posted it here.  To this day, I'm still not certain what raised Google's hackles, but I'm in good company it seems. 
  • Partly given that initial disappointment, but also to more fully balance the equation underlying the mission statement of the LTNE experiment, we committed both to continuing to work toward passive income streams and other income opportunities, as well as to some substantial reductions to our spending, with a goal of trimming $1000 a month (which I labelled Living (Better) the Old Economy).  In addition, we're being very aggressive with eliminating all of our debt.  More on that in a minute, but you can catch up on some of our shifts here, as well as our one-month review here.  
  • Intensity at my job then intervened to make blogging difficult, so after a brief hiatus, blogging resumed in earnest, and our effort to Live (Better) the Old Economy, as well as our work on ranking our niche site, www.adjustabledumbbellscenter.com, continues.  After some real gains in ranking, the site appears to have disappeared from Google search (where it had reached Page 12) and I'm now actively working to regain the momentum that we had achieved.  My post on page ranking the niche site is here.  
  • The LTNE website itself broke the Alexa 10,000,000 mark on 30 May.  

 So, how about actual results?  Here we go:

Our active income increased slightly from last month.  What I was calling "portfolio income" last month would have declined significantly given losses in our 401(k)'s this month, but I'm no longer going to count gains or losses in our 401(k)'s as portfolio "income" as it really isn't income until we withdraw anyhow, so calling it income was a bit of a misnomer.  Either way, like most, we got hammered in the stock market this month and lost several month's worth of paper gains.  Finally, passive income increased from $1.68 to $2.82 this month, mostly from the Amazon affiliate program.  A pittance for sure, but if you look at it differently it is a 64 percent increase!

Let's diagnose the passive income:  First, the shift from Google AdSense to other forms of monetization was not seamless or instantaneous.  I have yet to have the sort of success with Chitika, Infolinks, and Media.net that I had with Google AdSense.  Part of that I can attribute to my radically reducing the amount of advertising on all of my sites to give them a more clean appearance and to focus less on experimenting with advertising systems and more on affiliate marketing and content creation.  

As a result, I've currently positioned www.adjustabledumbbellscenter.com (our niche site) as an Amazon affiliate site.  Essentially, the goal is to rank it for people who are keyword searching "adjustable dumbbells" or "adjustable dumbbells reviews," provide some good content with reviews and comparisons, and then provide Amazon links for people who intend to go to Amazon and make a purchase.  Well, so far, the purchase part has yet to happen, though I do get 4-12 unique visitors per day on the site.  Why no purchases?  Well, given the comments that I'm periodically moderating as spam on the site, most of the people who are visiting the site via Google search are only there to use my comment section as a place to stick backlinks to other sites in an effort to drive traffic to different sites.  However, given the number of potential searches for those keywords per day, getting the site ranked should eventually show results, as I described here.  

All of this month's affiliate earnings were earned through this site, primarily from the few readers who have used our affiliate portal to do their Amazon shopping.  Thanks!  It isn't huge financially, but it is a morale boost!

Now, on to our effort at "Living (Better) the Old Economy."  Jen and I committed to finding $1000 in savings this month, primarily targeting shopping, groceries and restaurants, and cutting out some other extraneous expenses.  We were behind on our Audible.com (free audiobook offer) readings, so I suspended our account for three months to save $15 monthly.  In addition, we adjusted our AT&T iPhone plan to save $15 monthly.  We also cancelled XM, which saved $20 monthly.  However, as you can see, our best successes in saving money were in the shopping and food and dining categories of our budget.  

(Charts captured from www.mint.com, which I HIGHLY recommend as a free, web-based money-management tool!)

The charts, screen captured from the free Mint.com that we use daily, clearly show that we surpassed our $1000 goal, with a total of $897.90 in savings from the previous month in just the categories of groceries, restaurants, and shopping.  In addition, we had remarkable drops in other areas that accounted for our exceeding our $1000 goal, but those high spending amounts last month were mainly due to some non-routine expenditures such as car repairs, football tickets, and a some other things. 

How did we achieve the more difficult savings?  There isn't too much that is mysterious here.  We ate out less often, and when we did, we ordered less, sometimes shared entrees, drank water instead of soda or alcoholic beverages, and made sure we ordered appropriately for the kids, who are notorious food wasters.  As far as groceries, we ate more leftovers and let less food go to waste in the fridge.  I'm convinced we could do far better, but Jen insists on organic, free-range, steroid-free such and such, so I respect those choices, even though they are costly.  With general shopping, we've simply made the conscious choice to evaluate each purchase, asking "is this really something that I need to buy?"  When the answer is "no," we don't.    

Debt reduction has been another success, and I'm happy to report an overall 2.96 percent reduction in non-mortgage debt, with a .58 percent reduction in overall debt that includes our mortage, with a total of $2001.76 in overall debt reduction for the month of May (i.e., actual debt reduction, not just payments made).  Our goal remains to be completely debt free by May of 2014, minus our mortgage, which remains the mill stone hanging around our necks.  We're seriously considering refinancing to a 15-year fixed from our current 30-year fixed to pay it down more quickly.

Our Net Worth increased 1.62% in the month of May, despite the losses in our 401k's and depreciation of other assets.  The increase is mainly due to our paying down debt and a slight uptick in our home's value.  

So, May has had its ups and downs, but we've made some real gains, moved to another new house, and are ready for the challenges of June.  

Want to try any of this?  Be sure to visit our Tools Page, where we show the actual tools that we are using for the LTNE experiment.  

Want to help?  There are a number of ways.  You can leave a question or comment below, either on the site or through your favorite social network (Facebook, Twitter, etc.).  Follow us on our Twitter feed or Facebook page-- we're still gaining Twitter followers, but Facebook is growing very slowly (and that is charitable).  Also, I'm still taking signups for the LTNE email newsletter on the right sidebar.  Finally, if you'd like to help offset hosting costs, please check out our affiliate links, where a purchase at Amazon (or any of the other affiliates) doesn't cost you anything additional, but passes a little bit back to this site!  Thanks to those of you who already have done just that!

Thanks to everyone for following Live the New Economy and for your continued support!  Please do let your friends or family members know about our site and to stop by for a visit!  

 

 

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Reader Comments (2)

Cheers for the Twitter follow that prompted my visit to your site. Fortunately being part of the semi-retired baby boomer generation my partner and I don't have to concern ourselves with many of your expenditure categories but of more interest were your revenue streams. Being relatively new to affiliate marketing I'm operating several sites in the health, weight loss and relationships niches and find the physical products do far better than digital stuff but it's early days yet. As for AdSense I have never put that on any of my sites and the more I read of other folks negative experiences the more I conclude that was a wise decision.

June 17, 2012 | Unregistered CommenterJon

Jon, yes no doubt AdSense produces better than every other advertising service I've tried, but I've also read account after account of people getting dumped by them. If anything, if I get another account with an LLC or family member, I'll be certain to have maybe only one of their ad blocks up at once and watch it like a hawk. I'm hoping to expand to several niches, but time is my enemy right now. Thanks for the visit and I'd love for you to check back now and again and let us all know how your affiliate efforts work out.

June 17, 2012 | Registered CommenterMike

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