Labor of Love

Jonathan Clements

NEW YORK TIMES columnist Ron Lieber wrote last week about “money guru” Jordan Goodman—and how Goodman had settled charges brought by the Securities and Exchange Commission that he’d used his radio show to promote an investment firm, without revealing that the firm was compensating him for referrals. Goodman might never have ended up in the SEC’s crosshairs, except it turned out the firm was operating a $1.2 billion Ponzi scheme.

It was a story that made me sit up and take notice—because I’ve long thought of Goodman as a fellow member of the informal fraternity of personal finance writers. It’s a relatively small fraternity: Even if we don’t know each other, we know of each other. Goodman spent 18 years at Money magazine before striking out on his own. At least twice, I was a guest on his radio show, most recently in December.

Like Goodman, I spent two decades at a well-known publication—in my case, The Wall Street Journal—and, over the past five years, I’ve also been a solo operator. Yet nobody’s paying me $2.3 million, which is what Goodman received for promoting the failed investment firm—and which he had to return as part of his settlement with the SEC. In fact, depending on the month, I’m either breaking even on this website or losing money.

Could I be making more? Absolutely. But I choose not to. I’m not claiming to be a saint and I’m not 100% sure I’ve got the business ethics right. But in the wake of the Goodman story, I figured it was important to spell out how I personally make money—and why this website doesn’t:

  • Almost every day, I receive emails offering to pay me to run sponsored blog posts or insert links in HumbleDollar’s articles that will allow readers to click through to other sites. I admit it, I came close to saying “yes” once—but didn’t and have no intention of ever doing so. If HumbleDollar has a link to another financial site, it’s there because I think it could be useful to readers and not because money is changing hands.
  • Yes, HumbleDollar carries advertising. The site makes money depending on how often those ads are viewed (so-called impressions) and how often somebody clicks on them.

When I was at the Journal, there was a strict separation between the news and advertising departments—and members of the ad department could be fired for trying to influence news coverage. When you’re a solo operator, there’s no such church-state separation.

The good news: Even if I were inclined to let advertising influence the articles that run on this site, there’s not much risk of that happening. The advertisements are served up by Google, so I have no idea which ads are appearing—and, indeed, the ads I see may be totally different from the ones you view. The bad news: HumbleDollar makes just $1,000 to $1,500 a month from advertising—about what it costs to run the site.

  • If advertising doesn’t pay, what does? The big money is in affiliate marketing. If you get somebody to, say, open an investment account, you can get paid a referral fee. This is how Goodman made his $2.3 million. It’s also the modus operandi for countless websites, financial and otherwise. Why do you think there are so many sites devoted to finding the right credit card? It’s because the “right” credit card will pay the site a handsome referral fee—assuming somebody clicks through from the site to the credit card company and opens an account.

In early 2017, not long after I launched HumbleDollar, I signed up with two of the affiliate marketing middlemen, looked at their lists of participating companies and found a dozen that I would happily recommend—Ally Invest, TD Ameritrade, LegalZoom, places like that—and I created a page on this site that listed those relationships. A few months ago, I had second thoughts about all this and deleted all the affiliate marketing links from HumbleDollar, except those to Amazon. (In early 2020, I also nixed the Amazon relationship, so the site now receives no affiliate marketing revenue.)

Why did I get rid of those affiliate marketing relationships? Even if you disclose that you’re getting a referral fee—which you should—it’s much harder to claim that the articles you run reflect your best, independent thinking. Advertisements are visually distinct from articles. That isn’t the case with many affiliate links. They’re often embedded within articles, with the author subtly or not-so-subtly directing readers to the affiliate firms. That raises an obvious question: Would those articles have been written in the way they were—or even written at all—if those affiliate marketing relationships didn’t exist?

This goes to the issue of what a website is trying to achieve. If the site’s clearly stated goal is product recommendations, affiliate links seem like fair game (though I question whether consumers fully grasp that the recommendations may be tainted). But if you run a site that claims to offer independent thinking, I’d argue those affiliate links should never appear in articles.

That leaves open the possibility of running advertisements for affiliates, and then—if readers click through and buy—potentially receiving referral fees, rather than the usual advertising revenue from impressions and clicks. But even that seems a little sketchy: You’re tying a financial site’s business success to readers actually buying specific financial products and services. Personal finance writers often criticize brokers and insurance agents, because these financial salesmen have an incentive not to act in your best interest, but to sell you products that pay them a commission. Is it any different when a financial website gets paid a fee if readers purchase products or services from certain financial firms?

After months of wrestling with the issue, I decided I didn’t want any whiff of impropriety, so I ditched all affiliate marketing links to all financial firms. When I was at the Journal, we were repeatedly told to avoid anything that would call into question our reporting. That nagging voice in my head simply won’t go away.

  • Over the past few years, thousands of you have signed up to receive HumbleDollar’s free newsletter. I keep getting asked the question, so here’s the answer: No, dear readers, I don’t sell the email list to others and have no intention of doing so.
  • So how do I put food, as well as a fair amount of red wine, on the Clements family table? I sell books, get occasional paid speaking gigs and pull a little from savings each year. I also do work for Creative Planning, a registered investment advisor in Overland Park, Kansas. I sit on the firm’s advisory board and investment committee, write an article for clients every three months and—this just started—host a monthly podcast, along with the firm’s president. In return, Creative pays me a fixed quarterly retainer.

Whenever I do an article or podcast for Creative, I mention it on HumbleDollar, because I (immodestly) believe readers will be interested in what I’m saying. But I don’t discuss Creative’s advisory services on this site. There would no point: HumbleDollar’s readers are do-it-yourself investors, not those looking to hire a fulltime financial advisor.

The bottom line: I view this website as a public service. If traffic keeps growing—March looks like it may be the site’s best month ever—I’ll eventually make a little money. But that isn’t the overriding goal. Instead, HumbleDollar is my way of sharing what I’ve learned over the past three-plus decades, telling the stories of the site’s guest bloggers, and staying part of the larger conversation about money and its role in our life. It’s my semi-retirement job that eats up maybe 60 hours a week. If folks keep reading—and readership keeps growing—that’ll be reward enough.

Follow Jonathan on Twitter @ClementsMoney and on Facebook. His most recent articles include Mixing It Up and Eight Questions. Jonathan’s latest book: From Here to Financial Happiness.

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