Online earnings can be a very controversial topic.
And recently in response to this video I published where I discussed my
lifetime earnings for books I'd published on Amazon,
I received this comment.
So I wanted to discuss this comment in a bit more depth. But more importantly,
I wanted to show you something that may change your perspective on how
to look at earnings from a business that creates digital products to
sell online and may indeed change your views on
running an online business. Now, if you've not been to channel before,
then welcome.
My name's Paul Marles and I do videos on how to make it keep it and grow it,
and that's your money I'm talking about. And if you do like videos like that,
then please do give it a with thumbs up.
Hit the subscribe button and smash that notification bell.
So I received this comment.
Now the second half of this comment I can't quite understand,
but it's the first half that I wanted to look at at a bit more detail. And it
said this $140,000 for four years is small penny.
140 minus taxes equals around a hundred thousand dollars maximum.
And this money is divided by four years and equals 25k per year.
And this is with 2000 published books. This is very sad.
So first of all,
I want to look at something that's incorrect and that's around the taxes. Now,
if you did earn $140,000 in one year, yes,
you may be left with a hundred thousand dollars,
but this wasn't earned in one year. It was over a number of years,
and this is going to be the case going forward.
So if we take that amount over four years, we could say, okay,
$35,000 per year.
So I ran this through a few online tax calculators
and came up with these figures.
So $35,000 after tax in the USA comes out to around
$30,000. Now this was for the state of New York.
Now I know it does vary in different states.
I'm not sure if New York is actually a a higher taxing state than others,
but it came out to this figure. In the uk $28,500,
Australia, $29,500.
So I think we could safely say this works out, after tax,
to around $30,000. Now, yes,
and now all different countries have different tax rules and it's gonna be
different in different countries,
but we're just gonna take an average here for these three countries.
So if you then multiply that by four years,
you're left with $120,000 after tax and not the a hundred
thousand dollars it says here.
So the next statement made here is that this is small penny.
So I decided to have a look and compare this to the average incomes
around the world. And so we have this table,
and it would come in at around position 29, South Korea,
just below the average earnings for somewhere like Italy,
but higher than average earnings for countries, Brunei, Spain, Portugal,
Saudi Arabia, Greece, et cetera. And you know,
a lot of my viewers come from countries like India,
Bangladesh, and Morocco,
where you can see that the average wage is a lot,
lot less than this $35,000 per year.
And also a lesson that I've learned is that it doesn't
matter where in the world you live, it's not so much about what you earn,
but about what you spend.
And that makes a difference when it comes to building wealth and achieving the
goals that you actually want to achieve.
So this sort of statement actually makes me quite angry because
this is a very blinkered view of what's going on in the world,
and I think quite an arrogant statement to make. Now,
the next bit of this comment, it says here,
and this is with 2000 published books, this is very sad.
Now I'm not sure what the sad component is,
but this kind of implies that I spent four years creating these
books as a full-time job and earning this amount of money when in
fact I created the bulk of these books within the first 12 to 18
months of starting this business. And it wasn't as a full-time job.
I did this as a side hustle and it was whilst I was working a full-time
job. And that's the beauty of a lot of these types of businesses.
You can start them,
you can do them as a side hustle to your main job.
So those books I created early on have gone on to bring in this income,
which brings me onto this concept here of passive income.
And this is where I want to start changing your perspective on how to look
at incomes from these types of businesses where you are creating digital
products, you're publishing them online,
and they sit on the platform and wait for customers to buy them.
This can be on platforms like Amazon, Etsy, Redbubble.
There's many different types of platforms.
You could even do it on your own website. Yes,
you may have to get some work to bring in traffic, but platforms like Amazon,
where they provide you with a lot of traffic, products literally sit there,
wait for people to buy them. Now I have heard experts,
financial experts say that, you know, there's no such thing as a passive income,
but let me show you this. This is my best selling book.
I published this on June the third, 2018,
and has brought in since then,
total royalties of $39,916. Now,
I haven't had to do anything to that book since I've published it.
I've never run ads on it, I've never changed the cover,
never changed the interior. I barely look at it.
I occasionally look to see where it's ranking or what it's best sellers rank.
That's it. So I would consider that a pretty passive income.
Now, there are other ventures that can bring in what's often deemed as a passive
income.
There's things like dividend stocks where you invest money in the stock market
and those stocks bring in an income.
Now that may require some work because you've got to, you know,
decide what you're gonna buy, decide what you're gonna sell,
and you've got to monitor those stocks,
but it can be pretty minimal. Then there's things like books.
I just showed you the example of my book.
And there's other things like songs, and this is fun to look at.
Anyone recognize this chap? Well,
it's NoddyHolder and he's the lead singer of a band called Slade,
who in 1973 published the hit song,
Merry Christmas Everybody.
And it's estimated that he currently earns,
or the band currently earns between 500,000 to
1 million pounds a year.
Quais surrounds $600,000 to 1.2 million per year.
So I'm sure there's still a little bit of work that may need to be done with
that, but I would say that a big chunk of that is pretty passive.
Then you've also got things like people that hold patents that can bring in as
well passive income. Now, when I break down the sales of my bestselling book,
just to reiterate this. 2019,
I received an income of just under $1,500, 2020,
just over 11,000 520, 21,
just over 15,000. And then 2022 was similar to 2020.
So again, no work has been put in.
This has brought in a steady income.
So when I look at income like this,
I always ask myself this question,
how much would I need as a lump sum, a pot of money?
How much would I need invested to bring in an equivalent
amount of money, which in this case is $35,000? Well,
I'm going to work on the premise that we get about a 7%
per annum return on our money. Why 7%? Well,
I took this figure as being somewhere halfway between a 4% annuity where you
get a fixed income, you invest something like a a pension pot into that,
and you get this fixed income and 10% S&P 500
annual returns. If you invested it into something like an etf. Why 10%? Well,
I looked at the figures. They do vary. If you take 10 years, 20 years, 30 years,
40 years, but it comes out to around that 10% mark and that comes out to
$500,000.
You would need a pot of money that amounts to
$500,000 to bring in around
$35,000 per year. 7% of 500,000,
it's $35,000. Now, in reality,
you would actually need a bigger lump sum than this because
not only would you want to.
Take percentage as income,
but you'd also want to have a percentage of that growing that pot of money as
well to account for inflation. Nowadays,
you'd need a decent additional amount of, um,
return to cover the amount that you'd be losing due to inflation.
So the next thing we can look at, to put this into even more perspective,
is how much would we need to save per year to get to that
$500,000 mark?
And that's if we saved money and it was growing at that 10%
annual growth that we worked out from the S&P 500.
So how much would we need to save per year to get to $500,000?
And these are the figures.
You would need to save $27,000 per year over 10 years,
or $7,800 over 20 years, $2,750 over 30 years,
or $1,020 per year over 40 years. Now,
I did read a recent report that said 46% of
Americans live paycheck to paycheck and couldn't find
$1,000 in cash in an emergency.
So these are not insignificant amounts of money.
So creating these books over that 18 months of work,
I've put two years here,
has brought in an income that's equivalent to a lifetime
of savings. So, the last part of this comment,
this is very sad. Well, I'd have to disagree.
I would say it's not sad at all that you can start a business and bring
in a passive income that equates to a lifetime of
savings. Now,
there's also some other things to look at when building a business,
and that is the skills learned.
You can use these skills that you learn to start and create other online
businesses. I did it.
I went on to create a YouTube channel and hopefully the skills I've learned
from creating books, from doing a YouTube channel,
I will then use to go on to create yet another business.
But you can use skills you learn to do things like provide graphic design
services, provide services as a book cover designer,
or become expert in a component of creating books.
Could be using something like Adobe Illustrator and create a course around
this.
So you can see how learning skills is an investment in yourself,
which you can then use to create other types of businesses.
And more importantly, it's not all just about the money.
This business, well,
I find it's fun and I know a lot of people that write to me also find it's fun.
And when you're doing something that's fun and that's creative,
it doesn't seem like a job at all. It doesn't seem like work.
So you can see that when looking at an online business,
looking at the income,
you need to change your perspective on how you view that income,
but also look at the additional benefits from creating a
business, creating an income, and also hopefully having fun at the same time.
Now,
if I have piqued your interest around creating a business of publishing low
content and medium content books on Amazon,
then I do have this playlist here where I go through the whole steps of creating
these types of books and publishing them onto the Amazon platform.
Thank you much for your time. It is very much appreciated.
Don't forget to hit that subscribe button and until next time, goodbye.