Kay lives here

working with the web


Where does the money come from?


I’ve been asked to explain how I earned enough money to retire (or semi-retire, any­way) at age 34. Hope­fully this post will  make it all clear. It’s not really a mys­tery — and while the first two rev­enue streams will only apply to peo­ple in par­tic­u­lar cir­cum­stances, third (and best) can be used by anyone.

First though, I’d like to point out a short pas­sage in chap­ter 14 of The 4-Hour Work­week:

I RECENTLY HAD lunch in San Fran­cisco with a good friend and for­mer col­lege room­mate. He will soon grad­u­ate from a top busi­ness school and return to invest­ment bank­ing. He hates com­ing home from the office at mid­night but explained to me that, if he works 80-hour weeks for nine years, he could become a man­ag­ing direc­tor and make a cool $3–10 mil­lion per year. Then he would be successful.

Dude, what on earth would you do with $3–10 mil­lion per year?” I asked.

His answer? “I would take a long trip to Thailand.”

The thing is, as Tim goes on to point out, liv­ing in Thai­land is very cheap for those who earn money in US dol­lars, Aus­tralian dol­lars, Euros, or British Pounds. I’m bet­ting that even if liv­ing with every lux­ury avail­able it would take a con­certed effort to spend even a quar­ter of a mil­lion US dol­lars in Thai­land over a period of five years.

Tak­ing advan­tage of exchange rates is smart. Coun­tries where the cost of liv­ing is low are every­where. Depend­ing on what weather you like and how you like to spend your time, you could live in many parts of Asia, South Amer­ica, the Pacific Rim, or Central/Eastern Europe in the same or bet­ter stan­dards than you do now for a frac­tion of what it costs in the US, Aus­tralia, the UK, Ger­many and other sim­i­lar places. For exam­ple, there’s a lot of Aus­tralian pen­sion­ers (old age, dis­abil­ity and the like) who spend the bulk of their time in Bali — because with the lower cost of liv­ing, their measly Aus­tralian pen­sion allowance allows them to live com­fort­ably and well, rather than on the poverty line.

And Poland? I live in Kraków, a five minute walk from the his­tor­i­cal old city cen­tre, in a cute lit­tle apart­ment, fully fur­nished (we even have a spa).  Elec­tric­ity, gas, water and heat­ing costs are included in the rent, and it costs less than a quar­ter of the equiv­a­lent in Aus­tralia. (It is my under­stand­ing that liv­ing costs and hous­ing in par­tic­u­lar are higher in Aus­tralia than the US). This is the bench­mark I’ll use for com­par­i­son: income will be mea­sured in Kraków Apart­ments, a new unit that I have just made up.

So where the money comes from? Other than money we had saved to cover the  cost of mov­ing over­seas and our liv­ing expenses for the first few months, we have three main ongo­ing income streams. The most impor­tant fac­tor is that all the money com­ing in is in Aus­tralian dol­lars, which cur­rently can be exchanged with Pol­ish złoty at a rate of about 1:3.5.

1. Inter­est on house sale

This is self explana­tory. We built a house in Aus­tralia seven years ago, con­di­tions were good, and we sold with a fair amount of equity. If we’d sold a year ear­lier we would have made a killing, but that’s life.

At the moment we don’t touch that money or the earn­ings at all.  The inter­est each month is almost but not quite One Kraków Apartment.

2. Roy­al­ties from our web devel­op­ment business

The roy­al­ties part is inter­est­ing. Rather than sell­ing our Aus­tralian busi­ness out­right, we agreed to trans­fer all clients and busi­ness resources to the new entity in exchange for a per­cent­age of rev­enue over the next three years. This suits both sides — they avoided hav­ing to pay a lump sum upfront, and as we are invested in their suc­cess, we helped them as much as pos­si­ble dur­ing the han­dover and beyond. The more money they make, the more money we make.

What these roy­al­ties rep­re­sent is a pay-off for the five years of blood, sweat and tears we put into build­ing the busi­ness. Our good rep­u­ta­tion and solid, loyal cus­tomer base have meant that the busi­ness is a viable con­cern even with­out our per­sonal input.

Although this arrange­ment is yet to pay it’s first instal­ment (soon), I’m happy to say they’re doing fan­tas­ti­cally so far, bet­ter than I had even hoped.  This amount  is likely to be equiv­a­lent of at least Two Kraków Apart­ments and maybe more, and as such some of it will prob­a­bly be going into the term deposit for a rainy day.

3. Online Businesses

This rev­enue stream is for everyone.

I run a Cam­paign Mon­i­tor reseller busi­ness (in the process of being re-branded at present). Most of the clients using this sys­tem are web design clients of the for­mer busi­ness, but not all, and expand­ing that ser­vice is some­thing I intend to spend some time on (time is some­thing I have plenty of). At present, this busi­ness earns approx­i­mately 1.5–1.8 Kraków Apart­ments, and it’s increas­ing every month (for­got the social media hype, permission-based email mar­ket­ing is where online stores are actu­ally mak­ing sales). This is the money that we spend each month on rent, food and entertainment.

That’s just ONE online busi­ness. We also run a domain reseller which doesn’t make all that much money, but which more than off­sets our own domain pur­chases. And there’s more planned.

Hav­ing spent the last 12 years help­ing other peo­ple make money off their web sites, I feel I’m rea­son­ably qual­i­fied to apply some of that exper­tise to my own sites. While I write on my blogs for my own enter­tain­ment only, I do have plans to cre­ate one or more “muse” busi­nesses. Tim Fer­riss describes a muse as “a low-maintenance busi­ness that gen­er­ates sig­nif­i­cant income”. Typ­i­cally, it’s find­ing a prof­itable niche and reselling a prod­uct online — it’s easy to setup and easy to man­age, if you’re smart about it. I have a few killer ideas but because the ongo­ing income streams above are cov­er­ing my basic costs, I’m not in much of a hurry.

For some exam­ples of muse busi­nesses, check out Engi­neer­ing a “Muse”: Case Stud­ies of Suc­cess­ful Cash-Flow Busi­nesses.

Some­times, I do work

With my muse busi­nesses not yet off the ground, when geek lust strikes or I get a crazy idea into my head like going on a four day heavy metal cruise between Miami and The Cay­man Islands or doing a four city tour of Aus­tralia fol­low­ing the Sound­wave fes­ti­val around, I need some extra cash. With my food and accom­mo­da­tion needs cov­ered by the streams above, per hour con­tract work (either for the peo­ple who took over our clients, or for other peo­ple based in Aus­tralia who know my skill-set) makes gravy. My very, very rea­son­able hourly rate (charged in Aus­tralian dol­lars, of course) is one six­teenth of One Kraków Apart­ment — so by extrap­o­la­tion, work­ing approx­i­mately 4 hours per week would cover the month’s rent, if that was a con­cern. Around 15 hours work equals one shiny new Sam­sung Galaxy Tab. About 13 hours work equals one return air fare to Miami. Maybe 24 hours work equals one four day heavy metal cruise.

But at the end of the day, it’s all play money anyway.


  1. Hi Kay,

    How long have you been in Krakow now and how many win­ters do you think you can sur­vive there?

  2. Poland has lovely sum­mers, I’ve been there 42 times (I keep count for some unknown rea­son).
    Win­ters can get a bit frozen, the moun­tains to the south are nice though in winter.

    expect costs to sky rocket when the euro comes in, like pre­vi­ous coun­tries that received it.
    Can you speak polish?

    • Mówię troche pol­ską. Uczę się :)

      I’d vis­ited three times before we made the move. It’s start­ing to get a bit cold these past cou­ple of weeks, but the advan­tage of not hav­ing a job/working from home is that I don’t need to go out into the weather!

      Poland does not want the euro, and adop­tion has been moved back to 2014 at the ear­li­est. With all the finan­cial prob­lems in the Euro­pean union at the moment it wouldn’t sur­prise me if it was moved back even fur­ther or even aban­doned completely.

  3. Well that will come in handy then :)

    Best of luck with it all.

    enjoy the pierogi and tyskie :)
    don’t miss Oz too much ;)

    • I can hon­estly say than other than a prod­ucts where I’m really attached to a par­tic­u­lar brand (eg all the sun­screens I’ve tried SUCK), I miss Aus­tralia exactly zero.

      And prod­ucts can be sent over :)

  4. It sounds awe­some, but what if you don’t want to move some­where that the cost of liv­ing is so low? Like part of your goals might be to stay near family.

    • If you don’t want to live else­where, you’ll just need more (or more effec­tive) muse businesses.

      I actu­ally did all this stuff before I read the 4-Hour Work­week, but it has some really help­ful prac­ti­cal ideas about how you can cut down the hours required to actu­ally do your job to the bare min­i­mum and focus on ways of max­i­miz­ing your earn­ing poten­tial. I really hate the business-motivational book genre BUT this is dif­fer­ent, it really is a gem and Tim Fer­riss embod­ies what he preaches.