Before we jump in, let me give you the "why" behind this report. It is NOT to brag about how much money we’re making. Trust me, when we first started sending out these reports, we were actually losing a lot of money!
There are three major reasons we started sending out these income and expense reports:
1. I (Nate) am a business nerd! I always wonder how much money people are making and exactly how they're making it. I wish more people would transparently share their entrepreneurial journey; so that's why I do it! When other people do it, I find it inspiring and incredibly interesting! So I hope you're inspired or at least entertained when you read this.
2. When Kara and I tell people that we travel full-time, the response we get the majority of the time is, "I wish I could do that." At this point in the conversation I usually just bite my tongue. I realize that, for some, full-time travel truly isn't possible. But for most of the people who say "I wish I could do that," they could if they really wanted to. Yes, some people would have to work harder than others to make it happen, but most people could make it happen if they were willing to make travel a priority.
A couple years ago, Kara and I made travel our top priority. We saved up money for over a year, we moved out of our apartment, we sold our cars, and we quit our jobs. Now we put in the work (almost) every day to be able to afford to continue traveling. We hope that by sharing this report each month, it will inspire some of you to go from "I wish I could" to "How can I."
3. We're not special, and we want you to remember that fact no matter where this journey takes us. I feel like once people become "successful" it's easy to think they're "special" and that's why they were able to achieve success. But in reality, (almost) every successful person started out as a "regular" human. At this point in our lives, Kara and I are pursuing this crazy dream of turning our passion for travel into a sustainable business. If we do achieve success one day, we hope that by sharing this journey from the beginning you'll be able to see that two regular people had a dream, went after it, and achieved success. In turn, we hope this will inspire you (a "regular person") to dream a big dream and go after it!
Thoughts on Quarter 4 of 2017
Wow! Where do I start? We almost doubled our revenue from Quarter 3, and we made over $20,000 this quarter. Our channel is experiencing a ton of growth right now, and that's leading to growth in all of our revenue streams. Plus, this quarter included the holiday season; so we were able to sell merchandise, and I was able to offer a special promotion on my course to increase sales. And as if things couldn't get any better, we were also offered the most money we've ever been paid for a licensing deal. It was pretty much the perfect storm (in a good way) that allowed us to double our revenue this quarter.
1. YouTube Ad Revenue - $8,217.75 (Change from Q3 +$6,079.96)
From the very beginning, we've looked for additional ways to fund our travels so we didn't have to rely on ad revenue from YouTube. I didn't think it would ever be possible to make enough money from YouTube ad revenue to sustain our travels, but if the last few months are any indication, I may be wrong.
Our channel experienced a ton (for us) of growth the last 3 months of 2017. It started in late September when we published our first Trans-Siberian Railway video. We had no clue people would be so eager for content about the Trans-Siberian Railway. To date, the first video from the trip has over half a million views!
We've had other videos in the past do really well, but usually, the growth is short-lived, and our channel levels back out somewhere around previous levels. To our surprise, our channel still hasn't dipped back down and is continuing to grow!
To help put this growth in perspective, the first 9 months of 2017 we averaged just above $20 per day in YouTube ad revenue. During the last three months, we averaged over $90 per day! During the month of December alone we made almost $4,000.
Will we continue to get this level of ad revenue moving forward? I doubt it. I think this substantial increase in ad revenue was a perfect storm of sorts. Our channel was experiencing a lot of growth during the holiday season when ad rates are at their peak. Even though I expect our ad revenue to drop in the first quarter of 2017, I still think we're going to be way ahead of last year's averages!
2. Patreon - $3,854 (Change from Q3 +$50)
We're in the good graces of YouTube at the moment, but if there's one thing we've learned over the last two years, it's that things can change in an instant. It's super comforting to know that if YouTube changed everything tomorrow, and our revenue went to $0, we would still have this incredible group of Patrons supporting our work!
Even though we only show an increase in $50 of support for the quarter, our base of patrons has actually grown substantially. For the majority of the year, we published around 20 videos per month. During the last three months, we only posted between 10-15. It seems that YouTube is rewarding us for slowing down our posting schedule (I think they like it when our most recent video racks up a lot of views before we publish a new one). Even though we slowed down our posting, our increase in new patrons has kept our revenue at a similar level.
For those of you who aren't familiar with Patreon, it's an online platform that allows you to support the work of your favorite creators giving them a chance to continue working on their creations without having to worry about where their next meal is going to come from!
3. 30 Days To Becoming A Travel Hacker Course - $4,420 (Change from Q3 $1,196)
In the last 3 months of the year, we saw a $1,000+ increase in course sales. The majority of this growth can be attributed to our Black Friday deal. For a few short days around Black Friday, I decreased the cost of my travel hacking course from $147 to $119. A lot of people jumped on the opportunity to grab the course at a discount. As you can see from the graph above, on Cyber Monday (the day the discount was ending) we made over $1,000 from course sales in a single day! Aside from the original course launch, that's the most courses we've ever sold in a single day!
I had the idea to create this course for over a year before I actually made myself sit down and put it together. In the end, I probably spent over 100 hours creating it, but I'm so glad I finally found the self-disciple to make it happen. Making this course was the best thing I did for our finances in 2017! To date, it's generated over $20,000 in passive income for us while we've been on the road.
In addition to it being a huge financial win for us this year, it's also been super rewarding helping people travel to their dream destinations for pennies on the dollar. It makes my day when I get an email from someone who's super excited about a cheap flight they just booked using the skill they learned in the course!
If you're interested in learning how to earn and redeem frequent flyer miles to travel around the world for pennies on the dollar, check out 30 Days to Becoming a Travel Hacker!
6. Affiliate Income - $1,388.80 (Change from Q3 +654.54)
- Amazon - $487.70
- Audible - $75
- Epidemic Sound - $780
- Gleam - $20
- Convert Kit - $26.10
Up until this point, Amazon has always been the main driver of our affiliate income. The majority of our affiliate income has come from recommending products we use and love on the following pages on our website.
However, this month my entrepreneurial wife took it upon herself to generate over $780 in affiliate from the music site we use and love called Epidemic Sound. I can't take any credit for this increase in affiliate income. It was Kara's idea to sign up for the Epidemic Sound affiliate program. It was her idea to start promoting their service at the end of our videos, and it's really paid off.
We get all the music for our videos through Epidemic Sound. It's really hard to find good music for YouTube videos. Kara used to waste hours of her life searching for music, and now she has a huge library of quality royalty-free songs to choose from!
If you need music for YouTube videos, click here to check out Epidemic Sound!
5. Sponsored Videos & Video Licensing - $1,500 (Change from Q3 -$922)
As I have said before, we aren't proactive about seeking out sponsored videos or video licensing deals. However, now that we've published over 450 videos on YouTube, occasionally people find them and want to license them for their own projects. This quarter a media company putting together a video for a bank wanted exclusive rights to footage from one of our videos, and we were able to license it to them for $1,200. We also licensed two other videos (non-exclusively) for $150 to a travel company that creates those viral style videos that you see on Facebook.
6. Merch Sales - $1,152
It had been a year since we sold t-shirts and mugs, so we got my super talented sister to create a new design for us just in time for the holidays. Even though we sold 147 units, the profit margins were pretty low because we choose to print on high quality t-shirts. Honestly, we weren't super happy with the quality of the merchandise we sold last year, so this year it was less about making money and more about making sure people got a shirt they would be really excited to wear!
Since the beginning, we've been trying to develop multiple income streams that will combine together to fund our travels. The pie chart above gives you a quick breakdown of how each revenue stream is contributing to our total income. I believe this is the first time YouTube has ever made up the largest percentage of our revenue.
Transportation Expenses - $2,133.91
We were at home 7 out of the last 12 weeks of the year for a wedding and the holidays, so we didn't rack up as many transportation expenses as usual. This number would be extremely low, but we included the cost of our repositioning cruise in this section. The cost should really be spread across the accommodations as well, but I thought it would be cleaner to keep the entirety of the cruise expense in one place.
|Total||$2,133.91||115,000 FF Miles|
|Seoul||Bologna||Plane||$109.60||90,000 UA Miles|
|Barbados||Nashville||Plane||$52.76||25,000 AA Miles|
Accommodation Expenses - $0
Yes, you read that right. We spent $0 on accommodations during the last 3 months of the year. I was as shocked as you were when I was putting this report together. I'll try to briefly explain how this happened. We spent three weeks in Italy staying with our awesome friends. We spent one night in London partnering with the Yotel in return for free accommodations. We spent two weeks on a repositioning cruise which we technically paid for, but those expenses were accounted for in the transportation section.
We spent 3 nights at an Airbnb in Barbados, and we redeemed airbnb credits that we got from referrals for a free stay. Our last two nights in Barbados we partnered with Sandals for a 2 night all-inclusive stay. We spent the rest of the year staying at our parents' houses while were were home in Tennessee. All of this cost us a grand total of $0. We owe a big thank you to our parents and Bob and Gina for the 10 weeks of free accommodations!
|Nashville||Parents||50ish||$0||Thanks Mom & Dad|
Destination Expenses - $1,468.52 ($1,225 less than Q3)
This category is the money we spent while on the ground in each destination. This includes things like food, local transportation, and entertainment. This quarter also included buying Christmas gifts and other non-travel related expenses while we were home for 7 weeks.
|Cruise||Oct. 20 - Nov. 4||$271.61|
|Barbados||Nov. 4 - 9||$59.08|
|Nashville||Nov. 9 - Dec. 31||$1077.68|
Business Expenses - $4,517.33 ($2,059 more than Q3)
Each month we pay for several online subscriptions and other things to keep the vlog, blog, online course, and email list running smoothly. I look at most of these expenses as "investments" instead of expenses because most of them are tools that enable us to make money.
The main reason we had a huge increase in business expenses this month is because we paid for a 1-year subscription to our email service provider. Normally, we pay monthly, but they offered a huge discount on Black Friday if we paid for the year upfront.
Partnerships Manager - $1,625
In addition to being our Strategic Partnerships Manager, Benji is also an expert travel hacker. In Q4 he wrote a few new travel hacking posts for the blog.
Travel Hustle Editor - $600
Claire is the organizer and editor of our Travel Hustle interview series on the blog! She does an awesome job. She works full-time as a freelancer.
Convert Kit - $1,536.55
The great email platform that we use to send emails to our email list of 13,000+ people
Teachable - $297
The platform where I host my course "30 Days to Becoming a Travel Hacker" and "The Mistake Fare Manual"
Premiere Pro - $98.28
The program Kara uses to edit our videos.
Google Service - $45.00
This is the money we pay Google for our email address every month so that we can look semi-professional.
Touchnote Postcard - $223.71
This is the service we're using to send postcards to our patrons!
Epidemic Sound - $45
We used free music from SoundCloud forever, but we've started paying $15 per month to Epidemic Sound for more access to royalty free music.
TubeBuddy - $57
This service allows us to bulk edit the cards and end cards across all of our videos on YouTube. Basically, we pay $19 to avoid spending hours of our lives monotonously changing cards on our channel.
GoDaddy - $39.51
We use Godaddy to host our website, but I don't recommend you do the same. If you're interested in starting a blog, I recommend going with Bluehost.
Fixel - $99
We're going to be using this software to create some awesome content for Instagram! This was a one time purchase, not a monthly expense.
Fixed Costs - $1,204.13 ($47.14 more than Q3)
T-Mobile Phone Plan - $463.54
Health Insurance - $528.88
Car Insurance - $211.71
It would be irresponsible to travel without health insurance, so we pay what feels like too much money for an international health insurance plan every month. We've been happy with our T-Mobile International Unlimited plan for the past two years, but we're getting tired of having our data limited to 2G speed while we're traveling. In 2018 Nate is going to be trying out Google's Project Fi. We'll definitely report back on our findings!
Miscellaneous - $601.16
This category is made up of small things that didn't fit into any of the categories above. Our miscellaneous expenses were a lot higher since we were at home for 7 weeks this quarter.
Total Q4 Expenses - $9,925.05 ($1,902.55 less than Q3)
|YouTube Ad Revenue||$8,217.75|
This is how much money we saved this month thanks to partnerships, frequent flyer miles, and referrals. This is just a fun vanity metric to calculate. If you love numbers like me, it’s fun to look at how much money this month “should have” cost us.
Frequent Flyer Miles - $438.80
Before Kara and I left to travel full-time, we saved up almost 2 million miles and points! We've used these miles and points to save over $25,000 on travel expenses. If you want to learn how to do the same, check out my course 30 Days to Becoming a Travel Hacker!
Barbados to Nashville - $11.20
These flights should have cost around $450, but by redeeming 25,000 AA miles, they only cost $11.20!
Partnerships - $1,670
Now that our YouTube channel is getting over 2,000,000 views per month, we’re getting opportunities to partner with companies for free experiences/accommodations in return for featuring the company in a video. You’ll always know if we’ve partnered with a company because at the end of the vlog we’ll put a message that says either “Accommodations Provided By:” or “This Adventure Made Possible By:” This serves as an advertisement for the company that we partner with, but it also helps us to be transparent about content on our vlog being sponsored.
LHR Yotel - $170
Sandals Barbados - $1,500
Airbnb Credits - $150
When someone signs up for Airbnb using our link, they can save $40 off their stay. Plus, we get between $20 - $40 when that person completes their first stay!
It’s a win-win, and we wanted to say thank you to everyone who has signed up and taken a trip using our link! This quarter we redeemed our credits for 3 free nights on the beach in Barbados!
If you want to save $40 on your first Airbnb stay, click the link below to create an account!
Total "Savings" - $2,258.80
That wraps up our Quarter 4 income report! You deserve a pat on the back if you made it all the way here. I'd love to hear your thoughts in the comments below!