As a Personal Finance blogger, especially one who is just getting started, this is a hard article to write. I’m devoting considerable effort to growing my readership right now. I’m engaging on Twitter and Facebook, trying to produce interesting content daily, and yes, hoping that I might turn this blog into an additional source of income.
The thing about accepting advertising or affiliate dollars is, you run the risk of turning your readers into the product rather than the customer. There’s enormous pressure from the few sources of income in personal finance blogging to deliver your readers into the clutches of less-than-ethical companies which would like to shave a percentage off the top of any financial success (or failure) the reader has.
This is hard to watch as someone who genuinely believes that we are all capable of managing our own finances, and at ultra-low-cost. It’s even harder when I am reviewing material by other Personal Finance bloggers and finding that some of them give conflicting or even harmful advice.
Any personal finance blogger who has monetized their site has to strike their own moral balance. The thing is, I don’t need this blog to feed myself or my loved ones, and I won’t sell my integrity for some referral fees. How can any of us dole out good advice on the one hand, and then recommend services that totally contradict that advice?
I do feel like it’s important to lay out a statement of where this blog draws the line so that I have a document to refer to as opportunities arise.
First, Do No Harm
Tonight, I read an article on a site that espouses low-cost index funds… most of the time. This article ran completely counter to that, suggesting a Hedge Fund company’s actively managed funds. There was so much wrong with the article from an advice point of view, touting the “power of active management” (the possibility of which, I should add, has been disproven time and time again). I also read an article suggesting that people sell now (while the market is down– because selling low is how we get rich) and get into precious metals, complete with affiliate link to a commodities broker.
This is just messed up. Some of our readers are vulnerable: indebted, at the start of their financial education, and willing to try anything. Sacrificing their long-term wellbeing for a payout is despicable.
I will never advise you to invest in any way but the following: Invest in a small number of low-cost, passively-managed, no-load index funds. Invest in Real Estate if appropriate for your risk tolerance and lifestyle.
Finance Blogging Integrity Means The Reader Makes Money
It’s only ethical to make money as a finance blogger when the interests of the author, the reader, and the advertiser are aligned. I will only partner with companies whose product or service will hasten your success, not delay it. This will usually mean recommending brokers and providers that don’t benefit me financially, such as my strong preference for Vanguard.
Where This Blog Makes Money
I won’t make a secret of this- I would love for this blog to make money. So far it has made back about 50% of what I have paid into it. Here’s where I see some finance bloggers are making their money, and what you can expect to see here.
What I Will Do:
- Personal Capital is a partner. I have a referral link in the sidebar, and link it when appropriate for a story. If you click my referral link, you set up an account, and you link accounts totaling $100,000 or greater, I am paid a referral fee, as they consider you a viable lead for advisory services. Because I honestly believe that Personal Capital is the best hands-off expense tracking software– the only reason I ever cite in recommending them– I am comfortable with this arrangement.
- I have a YNAB referral link for those who are looking for budgeting software. This link decreases the cost to readers, so it seemed that all benefit from the arrangement.
- I have an Amazon Affiliate account. When I link a product on Amazon, if you click the link and purchase that item (or any other item during that session), I get 4% of the cost of your purchase. This seemed harmless, since it will never cost you more than you might have spent otherwise, and because I am not looking for opportunities to push products on you.
- I make a small amount from the ads on this site. As people have become accustomed to ads and I have tried to put them in unobtrusive places, I hope this is relatively inoffensive.
- I am learning Spanish with the help of iTalki. If anyone clicks my referral link, signs up for an account, and takes a lesson, I receive a $10 credit towards my own lessons (but no actual money).
- I host this site through Bluehost. They offer an affiliate program. If you are interested in starting a blog or a web site, they have great prices (starting at $3.95 per month) and I’m happy with the service. If you click my affiliate link and sign up (no additional cost to you), Bluehost pays me a $65 referral fee.
- If I review or cover any service which would pay me any sort of fee, I will disclose that relationship at the beginning and ending of the article.
- I will disclose any money made by the site in articles published quarterly, if not more often.
What I Won’t Do:
- I will not attempt to convince you to use actively managed funds or individual stocks, ever.
- I will not attempt to productize the articles on this site. I truly believe that this information should be in everyone’s hands, and that it should be free, forever.
- I will never attempt to sell you expensive courses or seminars. My time and whatever knowledge I have is yours, within the boundaries of the time I choose to give the site. Hucksters selling promises, but delivering only sales pitches for ever-more-expensive “coaching” or “training” are the very worst type of parasite.
- I will never hide any part of this site behind a paywall.
- I will not recommend that you use any service which contradicts my own belief that you should manage your own portfolio at minimum expense.
There. I’m glad I’ve got that off my chest. What do you think? Am I striking the right balance? Have you seen any shady financial advice or advertising online that made you uncomfortable? Let me know in the comments.
Pingback: Test Retirement Plans - Retire Even Earlier! - The Frugal Vagabond
Pingback: Infographic: Cord Cutting Guide - The Frugal Vagabond
Pingback: Too Late to Retire Early? No Problem. - The Frugal Vagabond
Pingback: Your Financial Advisor is Ripping You Off
Pingback: September 2015 Financial Statement - The Frugal Vagabond
Pingback: October 2015 Financial Statement - The Frugal Vagabond
Pingback: November 2015 Financial Statement - The Frugal Vagabond
Pingback: Saving on Pets: Best Care, Bottom Dollar - The Frugal Vagabond
Pingback: Shave Hacking: Smooth Skin, Full Wallet - The Frugal Vagabond
Pingback: December 2015 Financial Statement - The Frugal Vagabond
Good on you sir. I agree with your points. It is a pipe dream of mine to earn additional income through my own website, and it ain’t easy! Keep your values and the rest will follow.
Thanks, Faithful Dividends!
Pingback: February 2016 Financial Statement - The Frugal Vagabond
Pingback: March 2016 Financial Statement - The Frugal Vagabond
Pingback: January 2016 Financial Statement - The Frugal Vagabond
Pingback: April 2016 Financial Statement - The Frugal Vagabond
If you don’t need affiliate money to live your life, it sounds like you have a great plan. First, spend your time building your readership, with as few links as you can have. Personal Capital is a great one – PLUS they have an awesome product.
I really hate reading an article where they’re talking about baking. And here is my favorite measuring cup (insert affiliate link to Amazon) and I used THIS rolling pin (insert another link). Scrolling through the post is ad after ad after link and more links. No thank you.
Personally, I feel the more you push on me, the less I trust you, and the less I want to come to your site. Let’s be honest, it’s not like there’s only one or two sites online…
Thanks for writing this. It’s like you read my mind!
I realize that I referenced a cooking website instead of a PF website, but it’s the same thing. Overlinking makes me distrust you…
Thank you very much for the comment! Haha, I have to admit that I skimmed it at first (as I often do with comments) and my stomach lurched, as I saw the phrase “the less I trust you,” but then I read more carefully! Whew! 😉
Yes, we’re of the same mind about that stuff. As tempting as the thought of “free money” is, I think it’s an enormously slippery slope and I feel like a number of otherwise well-meaning finance bloggers soon find themselves recommending products and services that they know aren’t the best way for their readership to get ahead.
As another early blogger, this is something I’ve seen happen more often than it should.
It doesn’t make sense to turn a side hobby, that generates >1% of our income, into something that erodes at our integrity. I’m on the same page where I only look into products and services I use myself or would recommend to my close family/friends.
I’m sure you’re in the same boat where you have the option to make a quick buck when people email you about an offer or when you see one somewhere else, but it helps to keep things in perspective. Your view of, ‘success = customer’s success,’ is the perfect one to have for a long term path.
The example of precious metals was too much – especially since money is spent digging it up, polishing it, selling it, and then putting it back into the ground. I’m also an advocate of Vanguard instead of non-producing assets such as gold.
Thanks for writing this post!
Thanks, Matt! It’s such a relief to hear from other like-minded bloggers. To be honest, I was worried that this post would make me a little unwelcome among some bloggers (and it might yet), but we’ve all got to be who we are.
I really respect you approach. I have a similar format, in the hopes of covering my blog hosting fees, and will not do anything I think could harm people. I cannot ethically encourage risk in others that I would not take myself. I’m glad you take this responsibility seriously
Thanks, ZJ. I’m trying my best (though you can’t please everyone!). 🙂
In my opinion, as with many blogs, your approach still has ethical issues. Yes, you are better than many. But I’m still discouraged by how quickly so many blogs become largely about making money. 2 examples of why I’m not impressed with the above…
First, Bluehost is awful. Some other (more ethical) bloggers have written about how the company isn’t particularly fast, isn’t well priced compared to other companies, and doesn’t offer very good service. Shouldn’t it make you skeptical that the referral fee is $65??! That’s crazy. For sending 1 person their way. Nuts!! Generally, reasonable products – like a good book from Amazon that someone buys through this site – generate you a modest profit (40 cents if the book is $10, for example). Consumers should automatically assume that something is shady when ti pays a $65 referral fee (or an even higher referral fee, as can be the case with credit cards).
Second, right after your first paragraph of text is an ad that barely looks like an ad. It’s just text in a bigger font that’s basically part of your blog post. Someone who isn’t savvy about gross marketing could easily click on it by accident. I know my parents and grandparents would. If you really want out-of-the-way advertising, stick to stuff that’s not literally in the middle of your blog post and that clearly looks like an ad.
Thanks for your comment. I’m going to respond in detail, because I want you and others to know that I don’t think I am above criticism, and that I think good ideas should be able to stand up to a little lively debate. In the spirit of full disclosure, I see that you have written a similar comment on another of my posts, which I don’t plan to approve, because it’s more criticism of how, where, and what ads appear, rather than a comment about the actual content of that article. I will try to respond to the items you bring up there here, however.
First, a word on how the ads on this and most other sites work. My ads are served by Google through the AdWords for WordPress plugin. In essence, the plugin automatically selects the “optimal” (from a money-making perspective) locations for ads, which the site operator can override. In my case, the plugin selected places above the top banner and two locations in the article body for most of the site. I thought that was aesthetically incredibly ugly, and I also felt like it was much too “advertise-y.” So, I instead picked two locations in the footer and the sidebar, and one in-post location for ads that was only visible when someone actually drills down into the article. Adwords allows up to three banner locations per page, and I opted for two which I felt were completely out of the way.
Now, on to the ad content/sensational-sounding ad copy. Google’s ads are served up algorithmically, and are selected automatically. I don’t curate or control ad content at all. Basically, there’s a cookie on (most) user’s system that tracks their browsing habits, and Google is able to distill their behaviors and demographic information into something like “Male, 20-26, interested in finance and bicycles.” It then passes this demographic info, as well as information about the site visited, into the algorithm, and shows the ad which bids highest for the eyes of a user with that particular demographic profile on that particular type of site. In the case of the clickbaity-sounding ad you saw on another of my articles, it appears that a fear-mongering ad about the end of Social Security won the automated auction. To a certain extent, I can influence the types of ads that appear by blacklisting entire categories of ads– such as the fact that I had blacklisted payday loan type ads before Google recently banned them systemwide– but nothing is perfect. At times, trying to figure out which categories to allow and which to blacklist is a bit like a game of whack-a-mole. I don’t have insight into what ad content will appear on the site, and I can’t even go back and find out what you have seen. For what it’s worth, I don’t like when stuff like that appears in the ads, either, and I do my best to suppress the categories that lead to those ads. This is to the detriment of the site’s ability to make money, but that’s ok. The site made a little under $10 last month, and I’m not bothered. I don’t know if you read far enough to see, but I post the amount the site makes each month. Last month, after about 9 months in existence, the site broke even on all hosting, plugin, and backups costs. I don’t know whether it makes any difference at all, but this particular site is not much of a moneymaking venture, at about $20 in net profit over ten months so far.
Regarding the Bluehost affiliate link, I can only speak from personal experience because neither I, nor this site, profess to be an exhaustive head-to-head comparison of hosting providers. I can only say that I personally haven’t had any issues with speed, service, or reliability. This site runs on Bluehost, was attractively priced, and seems to run quickly enough for the level of traffic I get (which is usually fairly low, relatively speaking). I’m not sure the correlation between referral fee and shadiness of business is a defensible argument, as I don’t see any evidence to back up that assertion.
In short, attempting to be transparent and open about where, when, and how this blog makes any money isn’t a guarantee that every affiliate link will be suited to every user, nor is it a promise that some questionable automated ad content won’t slip through. It’s just a statement of my intent to try to keep things aboveboard, and to try to keep the advertising that I directly curate to things which might genuinely be of use to my readers, and never to take action to harm them. I have turned down or ignored every solicitation for sponsored content from a company, as well as many affiliate links. If my goal were to make this blog a genuinely profitable venture, I have been completely inept at it.
I hope that helps clarify my position and maybe helps to ease some of the strong negative reaction I inferred from your other comment. Take care.
Pingback: May 2016 Financial Statement - The Frugal Vagabond
Pingback: June 2016 Financial Statement - The Frugal Vagabond
Pingback: July 2016 Financial Statement - The Frugal Vagabond
Thank you for writing this. I greatly respect and appreciate the detailed full disclosure. I even wish I could go back in time and give you the small referral bonus for Personal Capital but (alas?) I’ve already been using that site for quite a while.
Aw, thanks, Katherine. It’s totally alright, it means plenty to me that you get where I’m coming from!
Pingback: September 2016 Financial Statement - The Frugal Vagabond
Pingback: 10 Questions with The Frugal Vagabond - 1500Days.com1500 Days to Freedom
Pingback: October 2016 Financial Statement - The Frugal Vagabond
Pingback: December 2016 Financial Statement - The Frugal Vagabond
Pingback: March 2017 Financial Statement - The Frugal Vagabond
Pingback: April 2017 Financial Statement - The Frugal Vagabond