July 05, 2004 | View Comments (37) | Category: Web Business
Summary: What is the optimal salary you would need to live off of solely from online ventures?
I remember when I was first thinking about becoming a freelance designer I always had the dreams of making 6 digits. Along with the freedom that a freelance career provides I also imagined riches beyond my wildest dreams, but also knew that the chances of that becoming realistic were very slim. Now that I make a couple dollars from my sites I got to wondering how much I would need to make per month to be satisfied with this.
Obviously in different areas of the world the optimal salary for living is different along with your living conditions (married, kids...). In Tampa, you can live a decent lifestyle at a low price and since I am single with no kids then that makes things just a tad bit easier. Even though I could pay the rent with what I make, there is no way that I could live solely off my online earnings. For that I am thinking I could get away with $3,000 per month.
That's not a lot by any means ($36,000/year), but that wouldn't be that bad at all for just sitting at home and writing on sites that you enjoy. I have bigger dreams though so I wouldn't allow myself to stop there, but as a bare minimum I have set that mark as my lowest. To put that it in another perspective that is about $18/hr.
Since there are no real “working hours” when doing this online, it is possible to earn money at any hour of the day. If you look at it from this perspective then that comes out to $98.63 a day that I would have to make from Google and Amazon combined. With the right type of sites that seems more than reasonable.
I have only recently set the goals for which I wish to reach online and this has helped me gain a new perspective on how I wish to go about my online ventures. I have a million ideas to implement as usual that would help me reach that mark, but they will take time to do. That's one thing I have learned this year. You can set all the goals you want, but if you have no plan as to how to achieve them, then they are useless.
What would be the optimal salary for you to live on?
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Are you saying you can pay your rent solely from Google ads and Amazon book micropayments, or do you mean to include web design and Business Logs business that comes your way too?
Do you have a cheap rent?
Nonetheless, I think if you can pay your rent from online activity you're doing great.
Jez
I'm not so sure about optimal salary (though your mark seems to be a good one), but there are other ways to make money beyond Google and Amazon (and no, I'm not talking selling Viagra).
Just a kick in the ass from anyone who may be spinning their wheels trying to get traction from Adsense alone, once you've learned how to make websites, if you want to make a lot of money the answer isn't in designing sites for others. Developing a diversified set of online businesses of your own (or with partners) is.
"Nonetheless, I think if you can pay your rent from online activity you're doing great."
Well I know some people whose online activity would make your head explode ;-]
Mike P. (http://www.fiftyfoureleven.com/sandbox/weblog/)
"Just a kick in the ass from anyone"
Ahem: Just a kick in the ass for anyone...
Mike P. (http://www.fiftyfoureleven.com/sandbox/weblog/)
If I made US$ 2,000 per month I would not only be better off than I am right now. I'd be earning more than most of the people I know working in the local IT industry.
This is in México.
Sergio (http://overcaffeinated.net)
Well here in Tampa you can get a fairly decent 1 bedroom apartment for $550/month and I am not talking about some sleazy joint either.
And yes the rent could be paid by just Google Ads and Amazon.
I agree with Mike though, I know some people who are making over $100k from online ventures and that has the dual effect of motivating you and pissing you off at the same time.
Scrivs (http://businesslogs.com)
" the dual effect of motivating you and pissing you off at the same time"
Heh, yep, it increases my caffeine uptake and keeps up way too late.
Mike P. (http://www.fiftyfoureleven.com/sandbox/weblog/)
Haha, I know what you mean. Something that is definitely need though is patience. Many of these people started back in the 90's so there headstart is about 5 years before me. And once you actually see the designs of their sites it really makes you question why design is need (even though I know why it is).
Scrivs (http://businesslogs.com)
Right now, I make just a little less than that in my salaried 9-5 for what I do (though coupled with side things here and there it can get close to that), but being a single person living in Edmonton means that I can do quite a bit with it.
I.e. Buy a condo, which I just did recently. :-)
Ah, patience...that's such a hard thing to swallow these days.. I'm only 21 and I'm frustrated knowing people that are less than five years older than me are making "tons" more money. :-P Then I realise they have at least 5 years of experience over me, and other people my age are still working retail, so... heh. I'm not doing TOO badly...
I think like a lot of people, I'd like to end up making more than my parents some day.
And it's also about lifestyle. I'm not "above" going to the thrift store to buy clothes. I'm not a snob by any means. I also place higher value on say, money for travelling and enjoying other culture's foods and entertainment, than say, the newest bling bling for myself. I think I can resist the temptation to buy $400 Manolo Blahniks.
Tho, that $400 iPod sure looks tempting... ;_; haha
Sometimes it's not how much you make, it's how well you spend (or not spend!) it. :-)
That being said, if in my career lifetime, I end up making up to 60-70K/year, I'd be pretty damn happy (and comfortable).
Lea (http://xox.lealea.net/01/)
$3000 a month would be awesome... That's about twice what I make now. :( But this job is supposedly just temporary until I find something that really utilizes my skills... at least that's what I said 2 years ago. :( again.
Derek (http://www.twotallsocks.com/)
Considering rent in London is 1000 pounds per month ($1800 per month), i'm glad that I have a fiancee lol.
2500 pounds ($4500) per month is my ideal salary.
It's so expensive living in southern england, especially London.
My fiancee and I will be getting married at the end of the year and we plan to have kids in 2 years, so i'll probably set up my design company or work as a lead designer/developer for a company.
Robert Lofthouse (http://www.ghxdesign.com)
Man I would be in heaven pulling in $4500 per year. $54,000 I could live like a king and possibly save some money up for more toys.
Scrivs (http://businesslogs.com)
The difference in currency is amazing lol. In England we get charged loads for absolutely everything, so that nice little wage you get soon gets spent.
We pay about $34 for a normal album over here, it's a bit crazy. My fiancee and I have resorted to importing a lot of the things we want from america/canada.
Considering rent and tax in London, you barely see 30% of your wage anyways. Luckily, my fiancee earns 2660 pounds per month ($4878 per month) as a teacher, so our combined money isn't too bad.
Want to help a freelancer in London out, give me a buzz lol - yes, that means you Andy Budd - I know you give work to wonderful Irishmen like myself :P
Robert Lofthouse (http://www.ghxdesign.com)
Scrivs, don't you mean $4500 a month? heh... Yah, I'd be uber happy with $54K/year. Definitely. Especially for a single person. Hell, even if you have kids, that's very decent.
I think the currency difference is best parodied in Euro Trip (the movie):
While in Bratislava, a waiter gets a tip from the hapless American teens:
"An American nickel?" (Turns to his boss and slaps him across the face, gloating) "I'm going to start my own hotel!"
Lea (http://xox.lealea.net/01/)
I got talkin with one of my friends this weekend. He runs a very popular Health/diet e-book and has some other ventures on the side he is trying to profit off of, plus he has a normal job that pays him about 75k a year, but after talking with him this weekend and hearing some of the things he is doing, he is currently making about $12,000 a month. Now, I am not sure if that is online only, or with his job based salary as well included. But shit, that is f*ing awesome. My ideal position will be to make all my money off the internet. Ideally, will be to have most of it automated. My first goal, though, is to get a very popular website that gets more then 100 ppl a day :)
If I can every reach 100k /year, I will be extatic. But I am FAR FAR FAR From that point :)
Bryan (http://www.juicedthoughts.com)
I don't know if it's possible to make a good living wage from ads revenue alone. Sounds good though. The real money seems to be in developing web applications or delivering online services. Freelance web design is certainly no goldmine, though working for a successful design firm can be quite lucrative, that is, if you manage to put up with the anal retentive art director for long enough.
Jim Amos (http://graphikjunkie.com/)
Give it a couple of years Scrivs. After you rack up some more obligations (home, car, etc.) that $3000 per month won't seem like so much money ;). However, that is a very reasonable goal for somebody relatively new (under 3 years) to the game living in Florida. I say go for $4000; with your skills and business sense it's very doable, maybe even with just one job.
Vinnie Garcia (http://blog.vinniegarcia.com/)
Well I almost have the car paid off anyways so that is not an issue. Of course the $3,000 was the starting point more than the goal :-)
Scrivs (http://businesslogs.com)
Not sure how many of your audience are Canadian but here is an interesting survey (PDF) done for the 2003 Canadian market by the Registered Graphic Designers of Ontario (RGD Ontario).
According to their handbook, which I read a couple of years ago, a successful freelancer should be making between 100-150K in revenue....depending on experience obviously(the book is worth a read if you can get your hands on it).
There are also some good resource templates at the botton of this page.
Francis Fernandes (http://www.exclaimsolutions.com)
Damn, that's about $75k-$115k. Heh, that's some good money right there. Guess that means almost everyone needs to up their rates.
Scrivs (http://businesslogs.com)
Yes, there are Canadians reading this blog, one from the French part to be more precise! ;-)
I actually live in Germany but I'm going back home in a couple of weeks. I've spent 4 years enjoying the German social system (6 weeks of holidays) and I don't feel like being back to the North-American "workaholistic" way of life.
I was thinking about starting over as a freelancer but I was not sure it was possible to earn a living in Canada as a designer.
Thanx Francis for this precious info!!!
Sue
Surely the "optimal salary" is "as much money as possible"?
Personally, if I'm not on 40k Euros (roughly 50k dollars) a year by early 2007 I'll be pissed off.
David Barrett (http://dave.antidisinformation.com/)
Optimal salary is dependent on where you live of course. I make more than most mentioning here, but then again I'm in New York City. I'm hovering around 55ish now, could always use more. But then again, my 2 bedroom apartment costs 2,700 / month. It's a good thing for roommates...
Kelvin
Scrivs, I'd be interested to know how much vacation you've included for yourself in your calculations as well as what you're planning to put aside for health insurance.
Have you taken into account taxes? From your post it's not clear whether the $18/hour is revenue or profit. If it is the former, you will need to bring in about 40% more than that in order to take home $3,000 per month.
Christian (http://www.smileycat.com/miaow/)
I have to agree that it defintely depends on where you live. I also work in New York and live in New Jersey. Get paid similarly to Kelvin. Our cost of living is way up there with commuting and lifestyle expenses. So it would be nice to make 3k profit after all expenses.
Carlos Porto
It would be before taxes, but after that I would still be fine even with insurance. Doesn't mean I will be living the good life, but as a minimum (at the moment) I think that is what I could get by on. Obviously, working at home would be the vacation :-)
Scrivs (http://businesslogs.com)
I used to work for an ecommerce company that only sold wigs and hairpieces online. The company made over $1 million a year net profit and they only had 5 employees.
And yes, the design of the site sucked. It goes to show you that while design is important for future growth and happiness. More important is a quality product and good excellent service.
Jeff Adams (http://tinyflystudios.com)
Currently I'm making $60k a year in southern California. That's not enough to make the mortgage payment by myself (along with all the other bills) but my wife is an interior designer and between the two of us we do pretty well. Once we refinace the house to pay off massive credit card debt, we'll be living large!
I work at a pretty conservative/cheap company, though. I was making the same 60k at my last job 2 years ago.
Scrivs: have you checked out salary.com? It'll tell you what the range of incomes for your job are based on your zip code. Of course, this assumes that you fit into just one of their job titles, but it'll give you a rough idea.
Rob Cameron (http://www.ridingtheclutch.com)
Yeah I know about Salary.com, but I couldn't find the job title of "blog writer" :-)
Scrivs (http://businesslogs.com)
I've been working a full time job (doing design thankfully) along with the little bit of freelance stuff I get with my old college roommate. I'd have to say the worst thing I've noticed in the full-time half of my life is that places suck at retaining talent. Everyone has no problem jumping from job to job, which employers seem to be whining about, at least around here.
But when you look at it, if you're only given a small percentage raise every year, no matter how good the work you do, and you can jump ship to get your salary up by $10,000, which are you gonna do? I'm pretty sick of moving and stuff already, twice in 2 years, so I'll probably stay at my current job for a little while longer, but damn it looks so enviting. Especially since I'm in my third year and when I got out of college everyone wouldn't hire me cause I had didn't have "2-5 years" experience.
Optimum for me is pretty much "more than I'm making now." If I was still with my last girlfriend I probably wouldn't be so greedy since she kept my spending and debt in check. ;)
jake (http://recently.rainweb.net)
how much is enough? Just a little bit more. heh.
I need to make at least $40K a year, damn me for buying an expensive new car. My rent's about the same as yours, Paul, but for a two bedroom (which I turned into a one bedroom with distinct office, which lets me write off about 30-40% of my rent and utilities as a business expense). Cost of living is lower in South Bend than in Tampa.
If I was freelancing or otherwise not corporate-employed, of course, it would have to be a bit more to cover insurance, retirement, etc
JC (http://thelionsweb.com/weblog)
I live in Tampa too, or rather I used to...now I live in Wesley Chapel. My friend and I are starting a local business. We do web sites and data systems for business in Tampa. Currently I'm working at Target and getting anything over $500 a month from just doing web design would be nice :) Hey I live at home and I'm a student at USF, what do you expect! However, we've been looking for a place near Old Hyde Park and would love to live in one of the townhouses at PostWalk (3 grand a month for three floors - i.e. more space than my current house!) though we realize that it's stupid to pay that much rent for something we can't own. Lately we've been thinking of getting a house and paying it off so that we can sell it when we move out. With both of us desiring to move out we figure it would take about $3000 each to live very comfortably and away from home. Of course, to my friend living very comfortably is living his current lifestyle only better. His dad is a prominent figure in south Tampa and his mom doesn't like to cook/knows she can't cook well so he's given money to go to eat and drive around and what have you. I think they've even felt sorry enough for me having to work to pay off my stuff and still drive 40 miles to their house that his mom has been paying for my dinner a lot recently when we've gone out. So he wishes to at least maintain that lifestyle. My idea of very comfortably, is somewhat less than what he's got now. His idea of very comfortable to me is 'If I made enough money to do that, I could just stop working.' So I guess my estimate is somewhere near $2500 or less if I can pay off my car by year's end :) Got a little wordy there, but hey you're local so you know what the hell I'm talking about....
Joe (http://www.gra-phix.com/)
It's funny that a man who calls himself JC (my initials BTW) does what my friend and I were considering with that 3 floor place. It was something like 2700 sq. ft. which kind of makes me feel bad for Kelvin since here his rent would get him a 4 bedroom place since the place I spoke of in my previous post was actually exactly $2700. Anyway, as JC said, we were going to write of 30% or more of it since we were going to use the bottom floor as our office. I really would love to have that place. I mean can you imaging a three floor place for two college students? Talk about living large! Right in the middle of Old Hyde Park? I mean, it doesn't get much better than that for a person in their 20's and a 19 year old (who happens to be a junior in college).
Joe (http://www.gra-phix.com/)
Just to put things on an international perspective: here in Brazil, we�d call a lucky guy anyone who is able to make over $2000 per month with 5 years of professional experience. Maybe 1 in 20 can make it.
Of course the cost of living is lower than in US or UK, but our working tools, like shinny Apple computers, DSL connections and even printer paper are commodities related to the US dollar. Very, very expensive for us.
After comparing your posts with my local reality, hey, I�m going to California! ;)
Pili
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#1
I'd say about $3,500 a month, maybe a little more, would be enough for me. I am also single with no kids, but I live in San Clemente, CA. Things are getting a little too expensive here.
Jason Marble