If you’ve been reading blogs other than this one for any length of time, you’ve probably come across online income reports, where a blogger starved for content decides to air out all the details of their new business, right down to the penny.
People who are all for the practice defend it in a number of predictable ways. Accountability is good, they argue, and what better way to keep motivated than knowing a crappy month will disappoint their many legions of followers.
There’s also the argument that online income reports motivate readers. If your favorite blogger can manage to pull four figures a month worth of income out of their blog, then maybe chumps like you and me also have a fighting chance.
I’ve never really discussed how much I’ve made off the ol’ FU machine. Hell, I haven’t disclosed much of anything, come to think of it. Y’all have no idea what I make, what my net worth is, or anything like that. Hell, you can’t even be sure my name is actually Nelson. Maybe I’m just Brad Pitt in disguise. THAT WOULD EXPLAIN ALL THE PANTIES THROWN AT ME, WOULDN’T IT?
Here’s why I don’t bother disclosing my income, and why you should be leery the next time you read a blog post that does.
Just how much can be believe, anyway?
Let’s start with my crazy, foil hat conspiracy theory.
(takes bong hit)
Did you guys know they faked the moon landing? They filmed it in the Nevada desert, man. I can prove it.
Sorry, let’s start over.
I’m convinced a full 50% of online income reports are fake. At least 50%. Maybe even more.
There’s no way to prove it, either. Your friendly neighborhood blogger isn’t about to supply you with an audited track record. They don’t have to prove squat to anyone except their accountant.
Faking an online income report is ridiculously easy. Every blogger knows the trick about how using exact amounts grabs people’s attention, even if such number is pulled completely out of your ass. For whatever reason, saying I made $3,189.20 in online income is more believable than saying I made $3,200.
What’s stopping me from just making up numbers? Nothing. As long as they’re believable and I’ve built up some sort of trust with my readers, they’ll believe anything I say. Hell, half of you actually think I’m Brad Pitt for some reason. I never said that. WAKE UP, SHEEPLE.
It’s happened before. Remember the personal finance blogger who bragged he was a self-made millionaire? Turns out he was a self-made $200,000-aire. The rest was from an inheritance.
The worst part is he turned himself in. He can’t even lie right.
Focus on revenue
OH BOY. Time to tell my favorite business story about the two Polish guys selling watermelons. Feel free to skip this if you’ve read it before.
Two Polish guys decide they’re going to get into business selling watermelons. They buy a hundred melons for a dollar each and then sell them for a dollar each. After the day is over and the two are counting their money, they realize they didn’t make anything. “I know our problem!” exclaims the first guy. “We need to sell more!”
If we look strictly at revenue, these guys have a decent business. They sold $100 worth of watermelons. That’s not bad for Polish guys.
But after expenses, the business looks a lot shittier. After doing all that work, they haven’t made any money at all.
Online income reports suffer from many of the same sins. These people aren’t making the same mistake as our Polish friends, but there’s still a huge focus on revenue with very little time spent on corresponding expenses.
It goes something like this.
OMG you guys I made $3,204.33 this month! It’s my best month ever!
All the good making money online gurus don’t even bother to disclose their expenses, focusing entirely on that sweet, sweet top line.
Now I don’t want to disparage a business with 60% gross margins or whatever the math works out to be. That’s a good business, and I’ll gladly take it off your hands for 12 times monthly profit. But there’s a huge difference between making $3,204.33 and $2,301.40.
There’s also the source of said income, which is also important. There are two ways to make money. You can either exchange your time for it, or you can make it passively. There’s nothing wrong with either; keep in mind one can be scaled up indefinitely, while the other has a logical limit.
Let’s take a minute to talk about dividend updates, which are rapidly becoming the new version of online income reports.
There really isn’t much to say, except I tend to find them boring. I understand dividend growth investing is a long-term game, and therefore income from these stocks will only go up marginally. I just don’t care. I’m probably not the target audience for such a thing, so feel free to ignore this.
Are they valuable?
After 800ish words poking holes in the practice, I’ll step back a little from my apparent hatred of online income reports. They do have their advantages.
Thousands of people have been motivated to try their own businesses because some blogger is making bank. This is a good thing. I like seeing people try new things, and we definitely need more entrepreneurs, even if I think there’s a little too much focus on the digital world.
But there are still multiple issues with the practice that I didn’t even touch on, including the fact many view the exercise as a thinly-veiled attempt to brag, and that these reports do a terrible job of teaching people how they can join the author in making cash.
It’s probably telling that I can’t think of a blog I currently read on a regular basis that has monthly income reports (except the dividend blogs). And I’m interested in making money off the internet.
Ultimately, there’s value in reading a lot of things. You can probably pick up a few things reading the average online income report; just set your expectations pretty low.