5 Lessons Learned from my Year of Living Online
Real-life discoveries no one seems to talk about
At the end of August 2018, I went through an existential crisis. The company I stayed loyal to until the very end died a painful death. The losses were unsustainable — the finance manager told me — and when senior management pulled the plug on that portion of the company, my entire portfolio went down the drain with it.
I did the digital shut down, turned off the infrastructure and redirected everything to a static webpage.
I’m probably the last person to still not get over what happened. Others moved on but I remained stuck, and in a way, I’m still stuck at that moment where I felt a pain that I never want to experience again.
At the beginning of this year, I decided to do the unthinkable and making a living online rather than depend on a 9–5.
I don’t really like talking about how much I make since it leads to the wrong sorts of conversations. People tend to hone in on the figures rather than the actual process of the journey. Figures tend to focus people on the wrong things. But if you must know, I’m currently covering my rent, food, student loan, petrol, childcare, and utilities with Internet money.
Here are the lessons I’ve learned so far since I’ve started.
You need to pivot fast
Taking a page from my original startup days, the boss had an uncanny love affair with pivoting. He was a bundle of ideas and was always moving the company forward with them. To some, he was a mad man but in hindsight, the crazy ones tend to see the world a bit differently.
The company that took over us was a competitor for a while. One of the people involved in the deal even commented about how it was impossible for them to come up with such ideas that seems so aligned to the market — 12 months in advance.
They didn’t believe us when we told them that we made up our solutions on the fly and delivered within two weeks. If it worked, we’d build on it. If it didn’t, we’d move on. They worked in 12 months planning and delivery cycles. We worked in periods that ranged from 2–4 weeks.
The difference between the two companies is that the startup had an MVP mentality. At first, I wasn’t a fan of the idea because of how quickly it moved — but it worked. The moment we stopped pivoting and experimenting was the moment revenue started to slide down a slippery slope of no return.
Rather than a series of small failures that eventually leads to incremental wins through learning, the company became vested in large wins, and was ultimately unable to handle large failures.
The final failure resulted in the closure of the company.
I’m a one-man-band kind of deal and such an event is not permittable. So big fails were not allowed. Small fails however, those are not too bad, as long as I still have my cushion runway to keep running.
Every time I win with one of my pivots, I always made sure to replenish my runway stash for future failures.
There are more than just time flexibility benefits
Flexible hours is only one of the benefits and only truly kicks in once you’ve figured out how to make your money online. When you start making a consistent level of income each month, only then can you truly begin to work on a balance between work hours and hours to do as you please.
The other benefits I’m referring to are the tax benefits.
It’s different in every country and county but if you set it up correctly, you can claim some of the cost of living back as a business expense. Working from home means that you might be able to claim expenses on a home office. Some places allow for a certain type of food to be claimable.
I’m not a lawyer, nor am I qualified to give legal advice — but it’s good to find out what tax-related benefits you’re entitled to, leaving you with more money in your pocket than what you would have been getting with a 9–5.
You better find start bookkeeping and find an accountant
Accountants might seem a pricey addition to your ongoing expenses but they know the rules that you don’t.
When it comes down to it, they will make your online endeavors much more tax-efficient than you ever could, especially if you’re doing it by yourself. They’ll save you the long phone calls to the IRS, prevent notices for back payments because, in theory, they would have calculated the correct amount you were supposed to pay.
I started hunting down my accountant after I figured that I was going to consistently bring in an income from my online sources. For me, I was lucky to stumble onto a service called Hnry, which is a new age automated accounting and bookkeeping platform for freelancers and self-employed people.
With Hnry, you get given a bank account number which all freelancing and contract incomes flow through, they do all the calculations, deduct a 1% fee, send the right amount of tax money to the tax man and get the rest of your money to your account right away. You get issued with a payslip, which can come in handy for future uses, and you can enter your expenses which they’ll account for when performing the calculations.
Unfortunately, this service is only available in New Zealand (where I live).
However, if you get into the habit of tracking your business-related expenses and income, either through free services like Wave Financials or manually in a book or excel spreadsheet. The perks of using digital platforms like Wave, you are able to generate earnings reports quicker and more accurately than trying to wrestle with excel, especially if you’re not familiar with it.
Don’t get comfortable
Once you start making money, you’ll start getting comfortable. It might be through a platform, or it might be with a particular client or set of clients. You’ll start to think that everything will be alright — until it isn’t and often at the best of times.
The pain I felt when I was made redundant made me realize the illusion of job security. There is nothing certain in life and money can disappear into life expenses as quickly as it appeared in your peripherals.
However, the difference between working a 9–5 and making your money online is that you are able to diversify and decentralize the potential risk. If a stream fails, you still have a few others to fall back on.
You also have the experience and knowledge of how to make money online. The best part is, it’s not just one facet of the process. Once you figured out how to make one stream, you’ve figured out the underlying patterns that are shared among all of them.
But don’t settle.
There is a 2-year risk period
It turns out that banks won’t lend (for whatever reasons) if you haven’t been operating your gig for more than 2 years.
A supermarket clerk has a better chance of obtaining lending than you do because of the perceived stability, despite the invasion of AI-based technologies taking over the roles.
Well, that was the message I got from the last banker I talked to. Don’t quote me on it.
But from what I found out, for the first two years of your operations, be sure to not get into thinking that banks will be nice and help you out. Credit cards are notorious with their interest rates but if you are good with your money and know-how to play the credit card game, it could potentially leave you with more flexibility, especially during the low weeks and you’re still waiting for invoices to catch up.
When it comes to credit cards, I don’t use them until I know that I have a runway big enough to pay it off in full. This way, it prevents me from overspending whilst still having the cash in my account.
Making money online is akin to running a business. You’re playing front office, back office, product manager, worker and everything else in between.
The journey online is not an easy one either. You still need to show up every day, as you would at a regular 9–5. The main difference is that you’re the boss and working for yourself rather than someone else.
You still need the consistency and the grit to follow through after failures.