A warm welcome back to Flexibility Is Freedom!
The new year started so quickly that I wasn't able to publish this annual report until now.
Indeed, it feels like 2022 just started but we've already seen unprecedented events across the world from the #freedomconvoy in Canada to the Russian invasion of Ukraine in recent days.
In times like these, I think it's more important than ever to have flexibility in your life - the ability to pick up and go in times of imminent danger - whether real (Russia) or perceived (Canada).
In fact (and this is definitely a tangent), I've recently started to move my money into BitCoin to protect my assets from authoritarian governments and power-hunger tyrants, as in Canada.
Overall, we're living in interesting times and we all need to constantly re-evaluate our life plans based on the global and macro environments that we find ourselves in.
Now, for the good stuff - here's a summary of my business performance in 2021:
As you can tell, 2021 was not a year of income growth; rather, it was a year of climbing back up from the "crater" left behind by the December 2020 Core Update.
Nonetheless, by the end of the year, I managed to grow traffic and revenue back to their original levels, and even set new records! (albeit, very modest ones)
Most importantly, I built the business back stronger and more diversified than before - as shown by profitability (RPM) increasing by 37% while Amazon risk decreased from 60% to 39%.
All in all, 2021 was a critical phase of my passive income journey - it reaffirmed the value of patience, the rewards of commitment, and the long-term potential of a well-optimized website.
For the rest of this annual report, I'll discuss these key areas of my journey in 2021:
Following the December 2020 Core Update (where I lost 70% of my traffic), I was at one of my lowest points and actively took time away from my main business to explore other opportunities.
During this period, I worked on a joint venture with a friend and returned to niche research - applying what I've learned about SEO and affiliate marketing to identify new business ideas.
In addition, I did a lot of "soul searching" during this time as well - reflecting on my life priorities and trying to understand if my current path of passive income entrepreneurship would ultimately support the type of life that I wanted to live.
While it is amazing working for yourself - building long-term value with flexibility & freedom - there are some significant challenges compared to your average 9-5 salaried job.
The big ones - obtaining a mortgage to buy a home, getting approved for a credit card, or even finding a place to rent - suddenly become uncrossable "mountains".
While I was determined to "push on" with my business, I was keenly aware of the opportunity cost as well - making more money in the short-term by working for a company but then being able to buy a house, attract a life partner, and start a family in the future.
In the end, I did compromise a little to meet both my short-term goal of home ownership as well as my long-term goals of freedom & flexibility.
I achieved this by seeking and accepting a job offer with a digital marketing agency in H2 2021, allowing me to obtain a mortgage and ultimately, buy my very first house!
By the end of Q1 2021, I had two new website ideas and already started building the first one.
However, in April I decided to revisit the TheDermDetective.com again, as I believed that it'd be much faster to restore its lost traffic and revenue than scaling a brand new website.
In hindsight, this was the right decision - and Google's algorithm updates in June and July certainly helped a lot as well with the traffic recovery process.
Now, there's always a "silver lining" in every situation - in this case, because my website wasn't receiving much traffic after December 2020, it was the perfect time for a website rebuild.
This allowed me to rebuild TheDermDetective.com from scratch on better, faster, and even cheaper infrastructure than before - which will hopefully future-proof it to some extent.
Here's a high-level summary of those changes:
In addition to rebuilding TheDermDetective.com from scratch, I spent a lot of time in H1 2021 consolidating and fine-tuning my content process.
This included a full review of the SEO tools at my disposal, including:
I also cleaned up the many documents and spreadsheets that I use to track my results - including a master keyword research spreadsheet and Google Data Studio reports.
Finally, on the personal development side, I finished Kyle Roof's on-page course (which I originally bought in 2019!) and started Glen Allsopp's SEO course. Both have been instrumental in shaping my current SEO philosophy and translating that knowledge into real results.
In 2022, I finally started to develop one of the most significant areas of my business - outsourcing.
I've discussed it many times on this blog but always kept it on the back burner, especially after the downturn caused by the December 2020 Core Update.
However, I'm extremely happy that I decided to outsource - it's the key to scaling this business and freeing up my time to work on new business ventures.
Of course, there was a lot of legwork involved to find the right people and train them, but the results have been simply amazing, both from an economics and quality of work perspective.
So far, I've hired a freelance content writer and virtual assistant - and it's been an absolute pleasure working with both of them!
I was originally worried that it'd be hard to find "good people", especially on a small budget, but luckily I found two amazing freelancers, both from the Philippines, who have helped tremendously with maintaining my business while I hold down a full-time job.
Last but not least, 2021 was a significant year for my financial situation as well, as I flipped from a cash rich but asset poor position into a cash poor but asset rich one by purchasing my first house.
I made the decision to buy real estate about halfway through the year - as I saw the increasing risks of uncontrolled inflation, fanned by reckless monetary policy in response to COVID-19.
Indeed, fast forward to 2022 and inflation continues to be the global economy's main challenge, especially as input costs like energy are at record highs, thanks partly to the Ukraine-Russia crisis.
Unfortunately, we are now permanently in an inflationary environment - for how long, who knows - and because inflation is fundamentally driven by future price expectations, it can be extremely difficult to "cool down", much like a runaway bull market for real estate or equities.
However, there will be obvious winners and losers as fiat money erodes in value - borrowers win while creditors lose, the government wins while the working class loses, and asset owners like landlords win while asset renters like students and young professionals lose.
In short, if you cannot reprice your goods or services to keep up with inflation, then you're implicitly falling behind to this "hidden tax". And for most people, their wages will definitely not keep up with the rate of inflation that we're seeing today.
That's why I've never been more convinced that I am now, that being an employee is just about the worst path that you can take in our current environment.
Finally - related to the inflation and macroeconomic discussion, I've started to take positions in BitCoin as a hedge against the fiat central banking and financial system.
I made this decision in light of recent events in Canada regarding the trucker protests in Ottawa and elsewhere in this country, where the federal government invoked unprecedented legislation, the Emergencies Act, that was previously used only for WWI, WWII, and the FLQ terrorist crisis.
The fact that a central government run by bureaucrats can, at will, freeze and confiscate your money without legal due process should terrify every Canadian.
Without getting deeper into the weeds on this topic, I will be continuing to diverify my assets into cryptocurrencies like BitCoin where it makes sense and I understand the technology and value.
Thanks for reading my 2022 annual report!
In my next blog post, I'll be outlining my action plan for this year, much like my 2019 next steps post which was a comprehensive plan covering all aspects of building and growing a website.
At this stage, I'll be focusing more on growing and scaling my website, building more SOPs and recruiting more team members, and investing in new business opportunities.
To Flexibility and Freedom,
Tom