Since Untemplater started almost a decade ago, its been a place for freelancers, side-hustlers, and entrepreneurs to come together to make more money and break free from the template lifestyle. We’ve had a fantastic run since 2009, but we’re finally hitting roadblocks due to the coronavirus-induced bear market.
What’s different about this bear market is that we are purposefully shutting down our economy to combat the virus. The hope is that after a two-month or so lockdown, the virus curve can be flattened and people who are not sick can gradually go back to work in certain industries. With the help of massive government aid, I’m hopeful things will get back to normal in 2H2020 and beyond.
Many freelance opportunities have dried up since companies are cutting back spending. Entire industries, such as the hotel and travel space are dead. My favorite company that I thought would do incredibly well after going public, Airbnb, has now had to cut its valuation by 50% or so in order to raise new money. Who would have thought all this would happen so quickly?
What I’ve come to realize after 10+-years of blogging is that blogging is absolutely one of the best businesses in the world to run during a global coronavirus pandemic. If you want to create some side income, there’s no better time than a recession, a bear market, or a pandemic to start one.
I started Financial Samurai in July 2009, at the bottom of the last financial crisis, and it has changed my life for the better. Just three years after I started Financial Samurai, I was able to get the courage to leave my six-figure job in finance to travel, play, and write. I had about $80,000 a year in passive investment income at the time plus a clear desire for writing.
Now, Financial Samurai makes more than my passive retirement income, which is a huge bonus because I mainly write for fun. I’ve just been very lucky to benefit from select business partners that are very synergistic to the content I write.
Why Blogging Is The Best Business During A Coronavirus Pandemic
The main reason why blogging is the best business during a coronavirus pandemic is because it can’t be shut down. Blogging can be done from the comfort of your own home with no need for any human interaction. Think about all the businesses that have been forced to shut down for months during the shelter-in-place / lockdown periods:
- Night Clubs
- Retail stores
- Health clubs
- Flower shops
- Anything with face-to-face interaction
Blogs just continue to operate 24/7 without fail. With low costs and high operating profit margins, blogs can stay open for business forever. Airbnb was spending $800 million in marketing expenses or at least 25% of its forecasted revenue. Now their revenue is down 80%+ and they are now loss-making, even with the cut in marketing expenses due to personnel costs.
With a blog, the only costs are a server, yourself, and someone to help you fix any technical difficulties when it goes down if you’re unable to do so yourself.
Now of course, blogs are not impervious to a coronavirus bear market. Here are some ways in which blogging is negatively affected.
How Blogs Are Negatively Affected By The Coronavirus
The main issue is that SEO traffic is down for many niches, including the personal finance niche. Only certain niches are benefitting. See Yelp’s business trends data below.
Daily search traffic is now more like traditional weekend search traffic due to lockdowns. When people are at home, they tend to occupy their time doing other things.
Ironically, people spend most of their time reading blogs while at work between Monday to Friday. This is likely because there is a lot of dead time at work and many people are looking for ways to escape the monotony of work.
I’ve also noticed that less people search about financial topics online because they feel scared or find it too painful to think about. It’s easier to have a “head in the sand” type of attitude.
The other negative business trend for bloggers is that some affiliates are cutting their payouts or are temporarily pausing their affiliate programs altogether as their own businesses see a decline in revenue. For example, I know several large banks cut their affiliate programs with Quinstreet, a large affiliate partner for many finance sites.
Cutting affiliate programs is risky because bloggers might not want to work with those partners in the future due to the lack of consistency. It takes a lot of work to update content whenever there is a change, especially if you have a large archive of posts.
Bloggers need to be careful and strategic with whom they partner with. It’s not a good idea to go all-in with one affiliate.
Despite these two negatives for bloggers, unless you over-hired and spent too much on advertising, you won’t lose money with your blog. You’ll simply make less money until people start going back to work after the worst of the coronavirus pandemic is behind us.
10 Great Reasons Why Blogging Is A Great Business
1) Low startup and operating costs.
When I decided to start blogging in 2009, I spent a total of $1,000 to set up my site, design the logo and layout, and learn how to get going. Now think about how much it costs to run a restaurant, a major media publication, or a tech company with six-figure engineers.
Today, you can easily set up your own site in 30 minutes by following my step-by-step guide. Instead of spending $1,000 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 running businesses 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 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.
2) Unlimited scale.
Leverage is one of the biggest keys to wealth. Did you know there are over three billion people online and growing? You have the potential to build your own website that can compete with the biggest sites out there all at a cost of $50 a year.
Thanks to search engines like Google and MSN you can publish something and instantly get found for free too. In the past, you’d have to spend a boatload on advertising to get attention. Now there are so many free resources out there to learn all about SEO and build traffic to your website, and sharing on social media is also free.
Financial Samurai receives about 1,500,000 page views a month with zero advertising. Even though 1,500,000 pageviews a month sounds like a lot, especially for a site with no forum, there’s still BILLIONS more pageviews of upside!
3) Huge operating profit margins.
Due to low costs, once you start gaining momentum in blogging, the operating profit margins expand massively. We’re talking 60%, 70%, 80%, and 90%+ operating profit margins, depending on how big your blog gets.
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, update it every year or two, and earn ~$50,000 from it passively for the rest of my life.
Now let’s take a look at operating profit charts I created for a relatively young 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!
Low operating profit margin businesses are always at risk of going out of business, especially during a bear market or global pandemic.
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.
5) 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.
With blogging, all you’ve got to do is open your laptop at home, or anywhere there’s an internet connection, and get to work. It’s 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.
The coronavirus pandemic is giving millions of people a taste of what it’s like to work from home. I think once the pandemic is over, millions of people will find that WFH is preferred.
6) More creativity.
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.
7) 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 my readers 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 also 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.
8) Anybody can blog.
If you know how to type, you can blog. 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 college degree 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!
9) The ability to help people for free.
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.
10) A blog can’t be shut down!
I’ve already said a blog can’t be shut down, but now I’m saying it again! Who would have thought that in 2020, we’d be hit with a coronavirus pandemic and have to shut down most of our economy? The great thing about blogging is that it can’t be shut down. There is no need for face-to-face interaction. A blog can be run from anywhere there is internet access.
The Blogging Business Is The Best
For the first five years, I treated blogging mostly as a hobby. I simply enjoyed to write. As Financial Samurai grew, so did the offers for more business opportunities. I was able to pick and choose which products I liked and used, and highlighted those products when relevant.
Now that I have a family to provide for, I’ve been focusing more on the business side of blogging by creating new business partnerships and finding awesome products that synergistically fit with the content I love to write. It’s a one-two benefit of readers gaining excellent financial information while also discovering great new products that may help improve their financial lives.
Eventually, as lockdowns are lifted and the economy opens up, search engine traffic and online revenue will return. I see the coronavirus bear market as a great incubation period to write new content, win new readers, and prepare for the eventual upswing.
If you want to learn how to start a blog, follow my step-by-step guide here. Not a day goes by where I’m not thankful for starting Financial Samurai in 2009.