Back in December, I introduced the notion of building a cash flow generating machine instead of amassing an enormous pile of cash that would generate a similar cash flow. In order to finance my RV project, I needed an effective way to make it happen.
I didn’t want to do it the classic way by patiently waiting each month to put money aside and build a pile of cash that would finance the project. This is not only the classic way to fund a project, but also the most secure way to achieve it. Since I hangout with lots of entrepreneurs, I decided to do it their way: take additional risk and finance my project with cash flow generated along the way.
A few months ago, Dividend Mantra sold its blog and stopped updating his freedom fund. I’m offering you my version of it; called the Freedom Cash Flow Update.
The Situation as at February 8th
Each month, I’ll be updating my business numbers and share them with you. One could have decided to save money and buy stocks and live from dividend payments, I decided to use my money to buy a solid portfolio of websites generating passive income. The risk and volatility are obviously higher, but so is the reward!
Here’s where my business stands at the moment in term of short term assets and short term liabilities:
Short Term Assets: $10,922.73 Vs $9,652.10 (+13.16%)
Current bank account: $5,605.79
Costa Rica bank account:$2951.35
Pending cheques to be received by the end of the month: $2,365.59
Total short term assets: $10,922.73
I have separated the Costa Rica bank account as I need to put money aside to pay for the villa. The next payment is due in May 2016 (right before I leave) in the amount of nearly $4,000. I opened a separate account to make sure I have enough money. The business is NOT paying for the villa; I will distribute a dividend payment (love that word!) and deal with taxes later ;-).
comment: There hasn’t been much change in our short term assets. I’m gradually putting money aside in my “Costa Rica” bank account and my other accounts are relatively stable. There has been a decrease in my current bank account because I paid off debts (more on that shortly). I also “isolated” an income source to deposit all those checks in the Costa Rica bank account in order to make sure I’ll have enough to make my deposit in May. So far, so good, I’m only shy of $1000 to meet my objective for May.
Short Term Liabilities: $ 1,063.06 Vs $7,436.54 (-85.70%)
Visa card #1: $874.58
Visa card #2: $188.48
Business line of credit: $0.00
Total short term liabilities: $1,063.06
We have two credit cards to operate our business as I have a partner in this venture. He is the most amazing guy on Earth and will let me withdraw enough money from our company to finance my trip. In exchange, I work numerous hours in the company “for free”.
comment: BANG WANG POW! I paid my business line of credit in a single month! I must admit, January was our biggest month over the past 12 months. It feels good to start the year with such a great boom! I know this will not happen again in February as I don’t see any income spikes coming our way. However, this was the perfect time to pay off the business debt and start off fresh for 2016!
How I Made $13,021 in Revenue in January
As discussed in my previous Freedom Cash Flow update, I put together a solid promotion for my DSR membership (you can see it here). This had generated quite a load of traffic and new members. The best part is that while my clients have a 60 days (yup, not 30 but SIXTY DAYS) refund trial period and only 2 realized that DSR wasn’t for them. That’s a very good average!
I’m working even more hours on the site lately and the quality of what we offer to members keeps improving month after month. Our latest improvement is the inclusion of a sector review with 12 stocks reviewed each month. We already looked at the oil industry and the consumer defensive sectors. I’m looking to add even more features in the future.
But I didn’t make 13K solely from DSR. I also had the launch of my 2016 Best Dividend Stocks eBook. Each year, I review both the US and Canadian markets and pull out my favorite picks with analyses. You can have a glimpse of what I offer with the free part here:
Along with my investing websites, I also own a bunch of smaller personal websites where we sell advertising in a more classic way. This side of our business also hit a peak in January. Overall, it seems that everything was pointing in the right direction. This makes me really think I could eventually live from my online income and this is probably the most amazing fact about this update :-).
Freedom Cash Flow for January: $7,644.11
At this stage of my plan, all cash flow is directed towards paying down our short term debt and increasing our short term assets. At one point in time, this section will be very important as I will require between $3,000 and $3,500 per month to live during my RV trip.
This is why it is so comforting to see that I was able to generate twice this amount in January. Now it is a matter of keeping the ball rolling and make sure this month wasn’t a statistical mistake!
What is/was the Plan for February:
I like reporting my month a little bit late in the month as it gives me more times to think of the future. At the moment of writing this article, I am at the beginning of February. During the month of February I intend to do the following tasks:
meeting up with my partner: We will spend a complete evening to work on our site and discuss what needs to be done to go forward. We have 2 other meetings scheduled like this one before I leave. We have several details to discuss besides the business such as how I will get internet during my trip (don’t worry, I’m already set-up now! hehehe!).
doing an email cross promotion: I found another high quality website with a purpose similar to mine. Since we both share a similar readership, we decided to team up and offer a freebie to each other’s newsletter subscribers. In other words; I’m sending their free ebook to my list and they do the same thing with my Top 10 Dividend Growth ebook. While all readers win because they receive more high quality content for free, I also increase my readership and improve my chances of having more DSR members. This is definitely a win-win-win situation!
improving DSR pages: most of my free pages haven’t been touched since the very beginning of Dividend Stocks Rock back in 2013. I know some of them needs to be refreshed and I need to add some quality content in the blog section as well. My goal here is to prove that I provide higher value than ever within this site.
My goal for February is to get back to an average between $5,000 and $6,000 in revenue. Both December and January were records months, but I now hope to build something that will gradually and steadily increase month after month. To be honest, if I reach $6,000 in February, this will be quite a feat for me as we made $3,544 last year for the same month!