Our 2018 finances Part 3

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Photo By Marco Verch @ Flickr.

Back in 2013, I learned, for the first time, what it felt like to get paid doing what you love. You know that starving artist saying, “my wallet may be empty, but my heart is full”? I always thought it was cheesy, until I finally understood what it meant.

A cheque had arrived in the mail that morning, from the sale of our first book Little Miss Evil and I was cradling it like a newborn baby. I even teared up a bit—something I don’t ever do.

It wasn’t much, not even enough to cover my groceries that month, but knowing I’d earned it from doing something I loved gave me a floaty happy feeling that was different from the paycheque I earned from my engineering job. Even though those cheques were so much bigger, this one seemed more significant somehow.

So, I cashed the cheque first and then framed a copy on my wall. I wanted to wake up every morning and remember why I was going to work every day to build our portfolio. I wanted to become FI so I could do what I love forever. That way my heart and my wallet would be full.

Flash forward 5 years. Now, our wallets are full and so are our hearts. What I didn’t anticipate was that the thing that filled my heart could fill our wallets as well—but only after we no longer needed the money.

Now that we’ve talked about our 2018 expenses in Part 1 and investments in Part 2, let’s talk about our 2018 passion project earnings:

Our 2018 Earnings

It feels like we’ve had this blog forever, but in reality, MR is only 2 years and 8 months old. Somehow in that time it has amassed 4.6 million views, which is beyond our wildest dreams! Thank you all for reading and joining our community! You all rock!

Here’s how much we made in the last 3 years (I’m listing income in USD because most of our income is from US sources):

YearProfit after expenses (USD)

Now, as expected we made almost no money after expenses in the first year, because that’s what happens when you’re starting anything new. There’s always a ramp up period where you’re just figuring things out.

But in 2017, we started making money from a combination of Google AdSense, affiliate income, and book advance/royalties from our children’s novel.

And then last year, our earnings jumped by 4x! This is partially because of blog growth and press interest, but mostly due to:

1) Switching from google AdSense to MediaVine—which you can only do after you reach 25,000 impressions per month (not to be confused with page views).

2) Selling our non-fiction book Quit Like a Millionaire it to Penguin

We actually reached 25,000 impressions/month back in 2016 but I didn’t know about Mediavine. Luckily, we heard about it through the blogging vine and now we LOVE it. They have a fantastic team, an easy to use dashboard and prompt payout—which is great because as the popularity of this blog grows, so does our expenses. When we were with Google AdSense, it could barely cover the expenses and we had to rely on affiliates to do most of the lifting. Now that we’re with Mediavine, our ad revenue has jumped significantly to the point where it’s our primary funding source. We don’t have to rely on affiliates anymore—which is a relief because the pay from affiliates isn’t steady and programs can be cancelled at any point.

Another reason why our earnings jumped is because of our book advance. This is more of a one-time thing though. I don’t expect this level of income to continue because books have to earn out their advances before making any royalties.

This is because publishers are investing money in your book and they want to recoup their investment. But, the value add of traditional publishing is that they help you open many doors that wouldn’t otherwise be open to you (public speaking gigs, placement in book stores, media connections, etc.). Our experience with Penguin has been amazing and we definitely made the right choice for us.

Portfolio B Spending

Last year we wrote this post explaining how we’re going to separate out our post-retirement earnings to show that we are, in fact, living off our portfolio and not relying on passion project earnings to support our living costs.

This is why we created Portfolio B, containing all earnings after retirement— a separate portfolio from the 1 million we accumulated when we retired (Portfolio A).

Portfolio A will be used to fund living expenses. Portfolio B will only be allowed to fund the following extraneous expenses:

  • Business expenses. Hosting costs, head shots for our book jacket, etc
  • Business re-investment. If we choose to, say, hire a web designer to remodel this site, that cost will come out of Portfolio B.
  • Self-Improvement. If we decide to take completely optional classes to expand our minds and upgrade our skill set, that cost will come out of Portfolio B.
  • Gifts for family/friends and donations
  • One-Off Ridiculous Luxurious Expenditures. Any idiotic one-off luxury purchases that aren’t part of our normal living expenses. If we do make one of these, we will disclose them on this blog so as to open ourselves up to the ridicule we rightfully deserve.

In the interest of transparency, here’s how much we spent from Portfolio B in 2018:

$6000 USD

One of the other things I noticed is that once you start making money from passion projects, you also start incurring expenses. And not all of it is business related—some are expenses that happen as you go from a scarcity mindset to an abundance mindset and give away money.

As a result, of the $6000 USD worth of expenses we incurred this year:

  • 45% went towards gifts and donations
  • 7 % went toward personal rewards (ie massages and celebratory dinners out for book writing
  • 48% went toward business expenses (server costs, new laptop, new smartphone, author photos, etc)

Our Tax Status

And not only that, we also have to set aside a chunk of your income for taxes.

Some of you might be wondering why that is since we’re nomadic. The reason is for taxation purposes, we’re still tax residents of Canada. We’ve thought about becoming non-residents of Canada, but that would mean selling all our assets in one shot, incurring capital gains taxes. We also haven’t established tax residency in a new country because we aren’t staying in any one country enough time to become tax residents, so it makes sense to keep our tax residence in Canada, for the time being.

So even though we’re not there, we’re still paying taxes to Canada, not using any services, and paying for our own healthcare with expat insurance. Great for Canada, not so great for us.

Which is why it’s so amusing to hear the haters say, “all you early retirement people are parasites—feeding off the system in services and healthcare while not paying taxes.”

In reality, it’s the opposite. I’m a net contributor into our country’s health care/social security system.

Of the $52K, we plugged our numbers into a tax calculator which estimated a tax bill of about $15,000, which we will be setting aside until April. The rest will be moved into Portfolio B, and used for book marketing costs, re-investment into blog, and gifts/donations. As we mentioned before, we will not be using Portfolio B for living expenses.

Total Net-worth

Here’s how much we currently have in each bucket after expenses and taxes as of today.

Portfolio A: $1,086,000

Crazily enough, since we wrote part 1 during the market dip in Dec, our portfolio has gone up by 5% in just 3 weeks! Which is exactly why we say investing is about the long game. You don’t panic and sell everything in Dec because you would’ve missed out on the recovery in January.

Savings Account: $50,000

This includes our $40,000 living expenses for 2019 and $10,000 Cash Cushion.

Portfolio B: $105,000

This is all the money we made after retirement, plus the $28,000 we used for the investment workshop.

Total net worth: $1,241,000

So, there you have it. When you don’t need the money anymore and pour your heart into passion projects, somehow money comes anyway.

Back when we quit in 2015, If you had told me I’d earn money in retirement from doing what we love, I would’ve laughed in your face.

Now, I know that doing what you love can make your heart and your wallet full. Just make sure you had a second full wallet to begin with.

What do you think? Have you ever made money from your passions?

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45 thoughts on “Our 2018 finances Part 3”

  1. I’m so very proud of you for doing something you truly love to do and making the successful transformation from employee to entrepreneur-[side hustle millionaire].

    Like yourself, I too know what struggle is like and building a business from the ground floor up. I was pretty much psyched myself when I got my first $100 and change check from Google AdSense back in the day.

    Then I received another check from an affiliate marketing network back in the day for a little over $350. Then I knew for sure this stuff was real.

    My first affiliate marketing check was from an affiliate network that hosted the “Walmart affiliate program,” as I started out back in the day using the blogspot blogging platform, before I knew anything about having a domain name and a web server and installing your own blog or website.

    So I used the blogspot platform back in the day to dabble with writing and never knew what a blog was. Not knowing a thing about affiliate marketing, a placed a few affiliate links and banner ads from Walmart onto this free blog and someone bought a pool table from my Walmart affiliate link.

    Fast-forward, I earned my first affiliate check for a little over $72 and I knew from their if I worked smart enough and stayed the course by doing the transformation business work out of inspiration or desperation, I could be a “side hustle millionaire” someday with doing what I love to do just like you.

    Congratulations on earning over $50k in 2018 from your blog! 🙂

    1. Thanks, DNN! Congrats on making it as an entrepreneur. It feels great to get paid for actually doing what you love, doesn’t it?

      Oh and to clarify, the 50K isn’t all from the blog–it’s also from the book. But yeah, $50k from writing! Never thought that would ever happen 🙂

      1. I’m still striving for excellence as an entrepreneur my friend because every day is an uphill battle. But one thing I learned about business is it a person does what they do entrepreneurially even on days they don’t make money, they’ll achieve “side hustle millionaire” status when least expected and the journey of entrepreneurship will always be a beautiful experience to be cherished for lifetime. 🙂

  2. Alan Watts has written volumes on this topic. It was one of his lectures that led me to start googling ‘financial independence’… And that eventually led to your blog, which was only 3 weeks old at the time.

    I’m 42 and I retire in 2 weeks! (no shit… 2 actual weeks). Sadly I have to wait for my wife, and she has 2 years left. So I keep asking myself..

    “what would you do if money were no object?”

    That my friends is a VERY difficult question and not one which western society suggests you take time to think about.

    … Well I’m thinking now!

    1. congratulations my friend on retiring at 42 years old. It has to be certainly a beautiful feeling because you still have lots of you have left in you. So now that you have the extra time on your hands after retiring in the next two weeks, what are you going to do in your retirement? Are you planning to be, side hustle millionaire with affiliate marketing and blogging? 🙂

    2. Wow, congrats on your upcoming retirement! Nice work! And thanks for putting up with us since the beginning 🙂

      It’s going to be very interesting to think about your life now that money isn’t the motivator. FI gives us the freedom to think those big picture thoughts that we never had time for back when we were working. It’s scary, but also exhilarating. Enjoy walking down that path of discovery!

  3. Mediavine huh? Yeah, that’s a fantastic money train to get on if you can get it.

    They turned me down despite having more than 25k in impressions. Guess I’m not cool enough to ride on that money train or something.

    Oh well, congrats to you guys though!

    1. MediaVine is a great network. There’s also ClickBooth, MaxBounty, TradeDoubler, AWin and more. Have you researched “high paying affiliate marketing networks?”

    2. Don’t give up, Mr. Tako! Sometimes it just takes few tries before you get accepted (I’ve seen it happen with other bloggers). Did they say why they didn’t accept you?

      1. This is very true FIRECracker.

        You can also try TradeDoubler, MaxBounty CPA affiliate network, Vibrant Technologies “IntelliTXT,” Kanoodle, Quigo ads, AdSense, BidVertiser, and Amazon affiliate network. Doing so will open you up to potential future status of “side hustle millionaire.”

        Never, even rely on one affiliate network for your sole source of online income. Too much $ gUaP $ to be made online form multiple affiliate networks. If one doesn’t approve you, keep moving forward and create more content for your site. Also, look into “sponsored posts,” because there’s $ gUaP $ in that too. Hope this helps! 🙂

  4. Thank you so much for the transparency! It’s really helpful to see the guidelines you have for when to spend Portfolio B. It’s also amazing to see that money can be made from passion projects. Personally I’ve never made money off them (YET!), but we’ll see what the future holds.

    1. Keep up the positive attitude, APL! The key word here is “yet”. When we first started writing, not only did we not make money, we were spending money on writing classes and conferences. But the key is to focus on gaining the skill and adding value. The money only comes after you’ve achieves those things. So for now, just enjoy the journey. The money will come later.

  5. Congratulations guys! It is impressive that you have decided to keep any future business earnings separate so as to keep the early retirement message going strong (and shut the haters up with their message of “Oh but your still earning money so of course you won’t run out of money”).

    1. Thanks, Samuel. Hopefully this will alleviate fears that you can’t survive on your portfolio unless you’re making money in retirement.

  6. As a part time musician, and part time pilot, i have watched as others “Do what you love and the money will follow….”

    Not exactly true… Most of the Musicians I hung around with, were starving, and after years of being on the road, and making minimum wage, hated it. A young friend, started at age 18, and progressed to become an Air Canada Pilot at age 30, only to be diagnosed with a brain tumor 2 years later, ending his career.

    I have been lucky, I also loved to work with computers, so chose that as my career, but its not my true love. My hope in retirement is to “Do what I love…”
    – writing music, fiction and a blog
    – resuming flying on a part time basis
    – restoring classic cars, and someday airplanes

    I would rephrase it to , “Do what you would like, as a career, or vocation, that will make you money”

    I also love sleep and food… but nobody will pay me to do those things…


    1. Totally agree, spaceman. First get rich, than follow your passion. Do what you love and the money will follow only happens when you no longer need the money.

    2. Spaceman,

      Do you fly for hire? I’d love to hear more about your experience, as I just started working on my PPL with an eye towards eventually making it a career. I’m hoping that the impending pilot shortage may make it worthwhile to switch over to it as a full-time job in a couple of years. Otherwise, I’ll regard it as an interesting, expensive hobby and see if I can eventually just instruct part-time around my day job (service director at AC).

      To those who don’t know, pilots spend a lot of money and time ($60k+ and a few years) to get to a job that initially makes $30k or so, but if all goes well you can end your career making 10 times that and an associated pension. It’s a financial risk (especially starting as I am at 35 years-old), but has the potential to be a lucrative move, in addition to being a fairly attractive lifestyle.

      1. I have never flown for hire, but I learned on a 172, with 4 seats so I split my costs 4 ways, and take trips that people want to do.

        At 35 you have a good chance at a seat in a small carrier, or instructor at prominent school, but be prepared to spend your time in the field, say bush pilot, or summer work with water bombers. Build your time instructing, its probably the easiest way to rack up air time. Overseas is good too. It use to be you had to foot your entire Commercial pilot licence, and endorsements, but now some of the carriers are sponsoring pilots to train, its way different than when I got my PPL (1985)

        My buddy retired and withing a year, was instructing at an Ultra-Lite School.. he was 60, saddly died of Cancer last year, but he achieved one of his life long goals. TP go for it, the sky is the limit… I never to this day regretted doing it, and now would like to get a night endorsment, and IFR rating.


  7. Congratulations! Weird enough, I spent most part of my career passionate about my job. I thought I would have endless mini-retirements and never stop working. After some years, I realized I need more freedom. I want to develop some talents,
    but I am not sure that I will be good enough to generate an income from them. Those projects probably won’t generate any money, but they may reduce considerable my expenses.

    1. I wouldn’t worry about generating income from passion projects at the beginning. It helps to focus on developing the skills. The money only follows after you can provide value. And don’t worry if you aren’t good enough at the beginning–
      developing skills takes time. What helped us is finding supportive people to surround ourselves with (writing partners, fellow bloggers, and such). Maybe join a group of like-minded people to support each other?

  8. Congrats! Thanks for taking us on the journey with you. Always love your transparency. They are so priceless for those still working on our FI journey.

    I’m working in my chosen profession, but the job actually turns out much different than what I had imagined. It’s like comparing writing your own book versus writing for a newspaper that dictates what you should write and the tone to do it in. While my day job is paying the bills and the student loans 🙁 I’m also working on my side hustle to earn $$ from that passion project. Hearing about your experience and long view really give me inspiration to continue. Especially when I come home from a really long day of work and the last thing I want to do is work some more.

    1. You, Zoe, ARE an inspiration. Every time I check back with you, you make huge strides toward the goals in your life. I’m so impressed. Our Chautauqua is better for having you. I have no doubt you will accomplish whatever it is you set out to achieve!

  9. First, thanks for the level of detail and transparency in your posts – genuinely admirable.

    Have you considered setting up a corporation for your website (and other business activities)? If you don’t need the money you’re earning from your website, you can achieve significant tax deferral by leaving the money in the corporation – as opposed to earning it personally, and paying tax at the marginal tax rates.

    This probably isn’t worthwhile if you’re talking about $50K in recurring income (assuming you don’t have other sources of taxable income personally – your investments are mostly in your RRSP and TFSA, right?) But it would definitely make sense as you approach $100K or so.

    1. You hit the nail on the head, FIRE CPA! Right now it doesn’t make sense for us to incorporate because I think our income jump is just temporary because of the book. If later on, by some crazy miracle we end up earning $100K/year consistently, then we will incorporate.

    2. Thé rules changed for small corps. If you have no employees and s few assets you may be classified as a “personal service corp” (the exact english name ils unknown to me). That classification makes all corp income taxed like personal income. Have someone qualified check before you jump. Many consultants had their financial planning derailed because of that rule this year.

  10. Congratulations on such a huge 2018 (both from a financial but more importantly personal stand point). Also a big THANK YOU for keeping your transparency in sharing your finances with so much details! It’s definitely a great confirmation that you can travel the world pretty comfortably on a portfolio of ~$1M USD.

    Questions: As I expect your upcoming book to have its fair share of success it’s likely that your income is only going to grow year over year (unless you stop blogging, attending speaking event and so on…). If this is the case, are you still gonna keep your Portfolio A to tell the world that we can live a full-filled live of travels without having to save several millions? Also do you see an increase in net-worth making any changes to your lifestyle in the 5+ years to come? (looking long terms)

    You two have been our inspiration (https://nomadnumbers.com/about-us/) to sell everything and travel the world, so thank you again for everything you’ve done!

    1. I’m so happy we met at Chautauqua Mr. NN! You and Mrs.NN continue to inspire us everyday with your hustle and bravery! Love following your journey and kudos for showing us your life transformation.

      Okay, so answer your question, even if our income significantly increases in the next 5 years (I don’t see that happening though, because books have to sell-out their advance before we get any royalties), I don’t see us inflating our living costs because we are already living the life of our dreams. I’m not into buying crap I don’t need, and I’m already travelling the world, so I don’t know what else I could spend the money on…

  11. Amazing, you guys saved more money than most working folks.

    I am looking forward to meeting the both of you in Chautauqua. You will be there for both Portugal weeks? 🙂

    1. Looking forward to having you join us at Chautauqua, Phanta! And yes, we’ll be there for both Portugal weeks.

      See you in Sept/Oct!

  12. I wish I knew about FI in high school. I could’ve wrapped the whole thing up before 30. Instead, I’m gonna be stuck on the plantation until 40-ish. Not bad compared to most people, but it still feels like such a waste of life.

    1. By reaching FI in your 40s, you are ahead of MOST people. That’s an amazing accomplishment you should be proud of! Most of my ex-coworkers will be lucky if they end up retiring by age 67!

  13. Hooray! This is so incredible! We love hearing stories like this from our publishers, and we are so glad to have you here at Mediavine.
    Congratulations on your amazing growth and cheers to an amazing 2019 ahead!
    — Susannah at Mediavine

  14. Thank you so much for sharing details!
    You guys really help us to plan ahead our FI journey!

    Mind if I ask about how to maintain tax residency in Canada?
    We would love to travel around the world once we reach our FI in a few years and would love to maintain our tax residency in Canada for keeping our investment here(Also, TFSA room as a bonus!)

    I remember Wanderer mentioned about ‘not staying in one country over 6 months’ but, on the Canada.ca website, it said

    “If you did not have significant residential ties with Canada and you stayed in Canada for less than 183 days in the tax year, you may be considered a non-resident of Canada.”

    It seems a bit blurry for me to understand how this whole tax residency system works and since we don’t have any family members or real estate in Canada like they mentioned on the webpage, we are a little bit nervous whether we should take out our investment once we start traveling.

    Thanks again and it would be great to hear your thought on it. 🙂

    1. The key word here is “may”. You’re only a non-resident if you apply for non residency, enabling you to no longer pay taxes to Canada. They want you to continue paying taxes, so you actually have to prove you are no longer a resident and don’t wish to return. OHIP coverage, on the other hand, is different story. For that you actually need to be physically in Ontario for 5 months of the year, which is why we bought expat insurance.

  15. Hi,

    Can you please elaborate on what ‘page impressions’ are. According to Google, the term can be interchangeably used as ‘page views’. TIA!

  16. Hello!
    How do you spend your annual expenses from your savings account? Do you have a debit card or something linked to that account in order to pay for daily/monthly things? i.e. food, airbnb, travel, etc. I’m slowly getting my finances together and modeling it after what I am learning in your Investment Workshop so just wondering how to set up the annual expenses/savings account/daily purchases thing. Thank you! Good luck in 2019 and beyond!

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