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How I Prepared To Be A Freelancer Problogger

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Mac LaptopSix months ago, I became a professional blogger (or problogger, as the lingo goes) but the process of going professional was easily six months in the making (three years if you ask my wife).

I don’t know if it’s come through in my writing, or if you’ve read long enough to tease this out, but I’m a predominately conservative person with regard to risk (not political leanings). However, given the right opportunities, I’m willing to make aggressive moves that some would consider extremely risky. Resigning my full time position to pursue what is essentially a freelance writing gig ranks as extremely risky in my pantheon of risk. While you’re never 100% safe in your job, it’s certainly more stable than working for yourself. Being self-employed has its benefits, stability certainly isn’t one of them. This article will detail how I mitigated those risks, as best I could, and how I prepared to become a professional blogger.

This article is pretty long and might not be all that useful to many people, but several other bloggers and my friends have asked about how I prepared to become a freelancer/problogger so I thought I’d put it all together.

As an aside, I often joke that I enjoy lumping in all my major life decisions in one small time frame. Two years ago, I proposed to my girlfriend, now my wife, and left my first job within a week of one another. Proposing easily ranked as the more significant of the two (yay! I love you honey!) but leaving my first job, and all my friends there, was difficult but a necessary step in my career development.

I became a problogger four days after getting married. I quit my job four days after I got married, two more important life “decisions” in the span of a week. I figure this way, if things go badly, I won’t know which decision to blame it on. :)

Passion is Paramount


Gary Vaynerchuk recently posted a video blog about hustle 2.0 and how you can have two jobs. He talks about how you can work the 9-to-5 and still build your online brand but you have to make sacrifices. You have to skip the television and the video games to work on your projects. You have to hustle your ass off in order to make things work. You can still spend time with the family, but you gotta work your tail off once the kids go to bed.

I totally agree.

You have to enjoy your project so much that you’d rather work on it than watch TV or play video games. If that’s not the case, you shouldn’t become a problogger.

I really enjoy personal finance blogging. I’ve been doing it for over three years and I still enjoy writing for the site every single day. I started blogging because I wanted to talk to people about money management. My friends didn’t care and I saw a handful of “blogs” online about personal finance. I figured I’d do it too. My interest in money management is what I’m passionate about and that’s why I blog about it. The money this site generates is great but as anyone who has worked in a dead-end soul-sucking job can attest to, money doesn’t make you happy… it just prolongs the agony.

Establishing A Plan

Enough with the emotional rah-rah aspect of problogging, let’s get to the finances. The steps I took in establishing my plan apply to whether you’re going to be a freelance consultant or a professional blogger. The plan identifies the aspects of your full time job you will be replacing with your own business.

Step 1: Establishing Income Stream & Growth

Since we’ve already established that you are passionate about your new work, the most important aspect of your job is the paycheck. With your old job, you had a stable income and growth potential. With your new business, you’ll have to establish a stable income stream and identify areas of growth. Reading sites like Problogger will give you an idea of the various ways you can monetize your site from the ubiquitous Google Adsense ads to more targeted affiliate programs. Once you’ve identified potential streams, you have test, test, test those methods. Some sites work well with Adsense, some work better with affiliate programs, you have to constantly be testing monetization methods to see what works for you.

The key here is to establish a plan of attack, implement it, take notes, and adjust it based on your performance. The Adsense ads you see on the left have been optimized for the highest click through rate, that’s why the URLs are red (I’ve tried blue, green, black, and red – red had a much higher click through rate than green, which beat blue and black). Keeping notes is crucial.

If you’re not a problogger and going into freelance anything, you have to take the same steps. Identify your areas of growth and establish a plan for that growth. If you’re offering a new service, how will you get your name out there? If it’s a local service, consider joining the local Chamber of Commerce and networking with bankers, accountants, and lawyers. Those are the folks who are connected to a wide variety of businesses, they can get you in touch with people who may want your service. Consider offering the service for free to a big name, essentially bartering your services for their advertising. Once you have a plan, execute it, track it, and adjust it to how it performs.

Step 2: Health Insurance

When I left my job, I was able to get health insurance through my wife. However, I did do research on independent health insurance policies to factor in the costs involved should my wife ever leave her job. The two places I checked was the Freelancer’s Union health insurance plans and eHealthInsurance. I chose those two because Freelancer’s Union seemed like my best shot at group health insurance (they only offer plans from UnitedHealthcare’s Golden Rule Insurance Company) and eHealthInsurance seemed like a non-spammy health insurance search engine (I see them mentioned on Yahoo! Finance and their results returned big name insurers I had heard of like BCBS, Aetna, Kaiser Permanente, etc). Since then, I’ve discovered you can often get health insurance through your local chamber of commerce, if you’re a member, though I never looked into it.

All the plans were in the $150 range, according to the results of eHealthInsurance’s search, but I never dug any deeper because I planned on using my wife’s insurance. My plan was always that the insurance would protect against the catastrophic, rather than the routine, so my searches always bore that in mind.

Step 3: Retirement

The last important aspect of my full time job that would be replaced by problogging is your retirement. You may be giving up a pension (defined benefit plan) and you’re probably giving up a 401(k) or 403(b) (defined contribution plan), so you’ll want to have something to replace it. Fortunately there are many options to the small business owning including but not limited to SEP-IRAs, Keoghs, Solo 401(k)’s, and the like. I guest wrote a post at Anywired about retirement plans and freelancing that discusses this topic.

Contingency (Backup) Plan

I’m in my late twenties, married, with no kids. In the next forty years of my adult working life, I will have to generate enough income to raise a few kids, to include paying for all or part of their college education, go on a few vacations, and have enough so that I can retire from my adult working life. Do I see myself being a professional blogger for forty years? Do I see myself writing for a living for the next forty years? I don’t know.

I also don’t know if this business is sustainable for forty years, or even four. I don’t know if I will be able to keep up with the changing environment or if some unforeseen event changes everything. This underscores the importance of having a contingency plan in place. My contingency (backup) plan has three important parts and kicks in when income dries up to a trickle.

Part 1: Contingency Plan Fund

Much like how an emergency fund backs up your full time job in the event of an emergency, which could include job loss, the contingency plan fund contains a year’s worth of my full time job’s salary. When you have a full time job, your employer has some flexibility in weathering the changing market cycles. When you are your own business, you have to weather the changing market cycles. Having a contingency plan fund offers you the ability to make smart decisions about your business even if the times are bad because you have money in the bank. If things go south, you’ll feel the pressure anyway. You don’t need added the financial pressure of a dwindling bank account to make things worse.

How did I arrive at a year? I figure that if things decline and I can’t reverse it in a year, chances are I won’t be able to and I should go back to doing what I was trained to do. I think a year is an ample amount of time. You might think that six months is more your style, if so then make your fund six months. The point is to have a buffer beyond your emergency fund strictly for your business.

Part 2: Diversify Your Income

This is a strategy that everyone should employ but it’s especially poignant for freelancers. Whether it’s investing in real estate or other income producing assets (dividend paying stocks or funds, other small businesses), putting your money to work for you in a separate industry is smart. Relying on a single source of cash flow is dangerous, be it Adsense or Corporation XYZ, so making smart investments is always important. How do you identify those smart investments? That’s outside the scope of this article but I personally invest in stock market investments that provide some additional income.

Part 3: Resign Amicably

When you say good bye to your employer, do so amicably and with their interests in mind. For some, this is code for – “you shouldn’t burn bridges.” While it’s important not to burn bridges in case you want to return, I think that you should always try to end any relationship amicably. It doesn’t matter what you’ll be doing on your own (my blog has nothing to do with what I used to do full time), but the industry you’ll be leaving is probably your best shot at recovery should things not work out.

I’m by nature a friendly guy so I’ve maintained friendships with my co-workers and we often talk to each other. I invited a whole bunch to our wedding, not because I thought that one day I might have to return, but because they were and still are my friends. However, if one day I would need to find a job, by leaving amicably I felt as though I still have the opportunity to prove I can return (that is, instead of just submitting a resume into a drop box, I’d actually get it in front of a person).

That’s It!

With a plan forward in place, including a plan for the “what ifs,” I took the plunge six months ago. The hardest part about doing it wasn’t the numbers or the plan, it was that I was afraid. I was afraid of what would happen if things didn’t work out. Would I have arrested my career development? Would I burn bridges simply because I left? Then I decided that my analysis was correct, my planning was sound, and ultimately I couldn’t let fear make decisions for me.

The last six months, it’s been an exciting ride and I’ve enjoyed every minute of it. If you’re considering this, either problogging or freelancing, or just want to say hello, send me an email and we can chat. There’s certainly way more to going your own but these were the considerations I contended with before I went I did it.

(Photo: arbron)

{ 19 comments, please add your thoughts now! }

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19 Responses to “How I Prepared To Be A Freelancer Problogger”

  1. Madame X says:

    I’d be interested to hear more about your time management now that you’re doing this full time– how much time you devote to this site and any others, how much is writing, how much administrative, how much (if any) is marketing yourself to potential advertisers, etc. And also, maybe you don’t want to post too much publicly about how much this site earns you, but maybe some general stuff about what level of traffic gets you to a certain income potential??
    Anyway, congratulations, I hadn’t realized you’d gone pro!

  2. Jeremy says:

    “You have to enjoy your project so much that you’d rather work on it than watch TV or play video games. If that’s not the case, you shouldn’t become a problogger.”

    Hmm, I guess I will never become a pro blogger :(

  3. Ben says:

    Jim, thanks for sharing, it’s cool to read about people setting and reaching big goals. Thanks for the inspiration!

    I’ll be joining you eventually but probably a few years down the road since I’m the sole bread winner/insurance provider for our family right now.

    I bet now all the pf bloggers will change their adsense links to be red :)

  4. Eden says:

    Thanks for sharing, that was very helpful. I’m curious about what you did in preparation for going full-time freelance. Were you debt free? Had you saved up the contingency fund already (or most of it)?

    I definitely see myself going back to a freelance lifestyle some day (primarily as a web developer, not a blogger), but right now I’m too deeply in debt to make that move.

  5. Nice post. As a new blogger, it’s nice to know others are struggling or have struggled with keeping up the blogging schedule while keeping the regular day job. As a full time trader, I’m generally watching news 14+ hours a day so it leaves little time to write. Congrats on joining the freelance world.

  6. Laura says:

    Good article. I agree with Madame X, I would love to see how your schedule your day/week for your blogging activities. I tend to do some work in the early afternoon and then another stint in the late evening hours.

  7. Connie Brooks says:

    Jim,

    You are absolutely, 100% percent correct when you say:

    “You have to enjoy your project so much that you’d rather work on it than watch TV or play video games. If that’s not the case, you shouldn’t become a problogger.”

    When I started blogging, we canceled our cable tv subscription. I haven’t touched my world of warcraft account in over a year.

    It’s probably also reasonable to note that there was always a bit of guilt to relaxing. There is always something I could be doing, emailing, promoting my site, writing new articles, researching better ways to monetize my site, I mean the list is endless. Sometimes knowing what to do is not the problem – it’s knowing when to stop for a while without feeling guilt.

    I’d say that’s the number one thing that changed for me when I first started blogging- I no longer had any spare time.

    It’s actually easier (or at least it was for me) once I quit my full time job. Now I can work and still fit in some free time. For a while there, it was dicey!

  8. Start-Up says:

    Very informative post.

    I just started a blog and am trying to balance a 9-5, a self-employed tutoring company and now my blog. Sometimes it’s tough since I love my TV, but that’s why DVR was invented!!!

  9. Jackson says:

    Great analysis and article. Like others, I’m also curious how much your lifestyle has changed to accommodate all this.

    Also, I would love to read some of your opinions and ideas on reducing business taxes and taking advantage of your corporate structure :)

    And for others who might be interested, here’s a quick run through on how to incorporate a company in Maryland (link to my blog, hope that’s OK, Jim. If not then please remove it).

    http://blog.jumptree.com/2008/how-to-incorporate-in-maryland/

    I actually incorporated last year, but I’m sure the information is still valid (though the fees might have changed).

  10. Lori says:

    I am quitting my job next week and jumping in. I am a single mom, but my daughter is in grad school and is now on her own, so I guess this is the time to start. I’m going to shoot for freelancing. I’m excited and a bit nervous about it. I have been considering getting a part time job just to help make ends meet while I get things going. Thanks for the informative article.

  11. Patrick says:

    Jim, great insight. I’ve looked at the possibility of this in the future, and though I am not earning enough at this point, I know it is a possibility. For now, I am working on the Hustle 2.0. ;)

  12. Dana Wilson says:

    Jim,
    Intriguing and helpful article! Like Eden, I also wonder whether you had saved up a year’s worth of income before you became a problogger. The idea of quitting your job to do something truly pleasurable to you is a heady thought!

    Thanks again!

  13. Tyler says:

    Jim,
    I am interested in what the cashflow situation is like versus your previous full-time gig.
    I agree with the emergency fund, but the monthly cashflow doesn’t yet equal what the 9-5 job does, so I am trapped.
    I also happen to be fairly good at what I do 9-5, even though I’d rather be blogging. It makes it hard to quit the 9-5 when I’m finally staring 6 figures in the face this year.
    So, what percentage of your full-time regular job income did you achieve before you felt comfortable taking the plunge?

  14. Frugal Dad says:

    I really enjoyed this one, Jim, as I’ve been toying with the idea of writing full time. My income is still not quite there, and I’m trying to diversify by picking up a freelance gig here and there, and by building up a couple other blogs.

    My family situation is a little different, so I have to take that into account as well. My wife is a full-time mom to our kids, so I am the only income earner and health care provider. We’ve investigated paying COBRA until she finds work in the next year or so, but that’s an expensive option.

    Even if it takes me a little longer, at least I now have a great blueprint for exiting the rat race! Thanks for putting this together.

  15. Sarah says:

    Hello, Just like Madame X I’m curious to know about the time management. Are you finding this is requiring more time than your previous full time job?

  16. This is extremely interesting…’specially since I’m about to get laid off from my job.

    Does it make sense to try to monetize a blog that’s always been a kind of hobby…not meant to be a money-maker at the outset?

    At this month’s meeting of a book publishers trade group I belong to, two speakers talked about the use of blogging to market books. One of them went off topic to hold forth about how she makes money blogging for others. She administers a couple of blogs for corporations, and she “ghost-blogs” a seemingly private blog for a CEO. One of these outfits pays her a thousand bucks a month to do fairly lightweight work.

    Is this reality, or is the lady speaking to us from Never-Neverland?

  17. Crystal H. says:

    Thanks Jim! I am going to start using Problogger for tips on how to improve my new service site for teachers. You article was very helpful to me!

  18. Pinyo says:

    Great article Jim. There are so many useful advice here. Although you didn’t mention that many bloggers work well below minimum wage for a long time before we get to where we are.

    Anyway, I’ll keep this one as a reference for the day when I go pro — if I go pro at all.

  19. Smarty says:

    Congrats! It’s something I also want to do in the near future. Keep us posted. I would definitely like to hear about the progress. How is the lifestyle/workstyle/income compared to your previous full-time job?


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