Better to Work at Taco Bell or Write Articles on Hubpages?

After publishing 124 articles on hubpages, I wondered:

"Would working a minimum wage job and investing the paycheck earn more passive income than writing on hubpages?"

So, I worked out the math. I explain my methods and numbers. This will be easy to follow.

As of my 3-year anniversary, I published 125 hubs, asked 20 questions (Seriously, I'm not making that up.), and posted 276 responses to queries. Here is my estimate of how long it takes to produce each of these, and the total times:

The total time invested into Hubpages to earn Adsense revenue is then 287.75 hours. Since this is not exactly down-to-the-second accurate estimating, the engineer part of me dictates using 300 hours for the comparison.

This does not count the 20 times per day that I check my "daily views" count. This is a waste of time, and a disciplined person should not do it. But, it's exciting, so I keep doing it. But, it's better than lotto, right?

So, how much would this same 300 hours earn at minimum wage as an hourly worker at Taco Bell?

In California, the state minimum wage is $8 per hour (unless you are union, in which case you must subtract dues, and then earn less than minimum wage.) Withholding from paychecks for minimum wage earners is 4.2% for SSI and 1.45% for Medicare. This sums to 5.65%, or .0565. This means you keep .9435 of your wages. (1.00 - .0565 = .9435).

300 hours x $8 x .9435 = $2,264.40

Working part time, 10 hours per week, this take-home pay can be earned in 30 weeks.

So, if your secondary, passive income stream is to be generated by the Taco Bell earnings, they must be invested. To keep working does not fit our model: We want to earn passive income in this analysis.

So, the idea is to earn a lump of cash, not spend any of it (= hide it from the spenders in the family), and then invest it in a no-risk vehicle for earnings.

Certificates of Deposit pay a little better than savings or checking accounts online. Locally, banks pay .035 percent (=.00035) on such accounts. So, an online account is best.

The best rate for a CD I located is at Ally Bank. They reward 1.03% (=.0103) annually. So, depositing the entire sum earned at Taco Bell, the annual interest (passive income) becomes:

$2,264.40 x .0103 = $23.32 per year, or $1.94 per month, or 6.4 cents per day.

So, the person who has invested 300 hours into Hubpages and earns less than 6.4 cents per day (45 cents per week), would have done better to work Taco Bell and buy a CD (or some other no-risk investment product) at Ally Bank or any other bank or credit union.

In the last year, I earned 182.45. I am offsetting the fact that most of the work was completed in recent months with the fact that less activity (especially publishing new content) correlates with a drop in Adsense revenue on both hubpages and Blogger.

182.45 / 365 days = 50.0 cents per day, or $3.50 per seven days. (I actually received $6.31 for the most recent 7 days- but have published a number of hubs recently.)

Update (December 11, 2013): I now have 143 articles and make about 60 cents per day. This equals $219 per year.

Update (February 16, 2015): I now have 72 active articles online making money. I receive about 22.7 cents per day. I also increased the Amazon links on my biggest traffic articles and make another 47 cents per week through book and item sales. This is $107.30 per year.

So, 50 cents beats 6.4 cents in the daily contest. And, hubpages annual earnings for the 300 invested hours of $182.45 beats $23.32 as the passive earnings of the invested minimum wage earnings. And, you didn't have to wear polyester!

Fashion faux pas aside, the analysis so far has ignored the value of the Taco Bell earnings, the $2,264.40 earned working 10 hours per week for 30 weeks.

In engineering and accounting, a series of value equations convert the worth of payments into a present value. So, to make an equal comparison I must convert both passive incomes to present value. The first value is the lifetime earnings of writing online to earn money. The second value is the invested money earned working at Taco Bell.

This calculation assumes the account will continue to receive the average daily revenue without any additional work input.

Present value (P) can be determined from the Annual amount (A).

P = A*[((1+i)^n - 1)/(i*(1+i)^n]

A = $182.45

n = number of years to receive payment. Assume the owner is the typical hubber: female and 30 years old. The average American female born in 1982 will live an average 79 years. This means 49 years to collect. So, n = 49. The interest rate (i), must be calculated somehow. So, I just valued the work invested into the hubpages account as equivalent to the Taco Bell earnings, and then calculated the interest that would give $182.45 per year.

So, i = .0806 for the hubpages income.

Plug all the variables' values into the equation, and the Present Value of the HP account is $2,211.29

Using the same equation, the Taco Bell variables are:

n = 49 A = $2,264.40 i = .0103

Solving for P, we get $894.56

However, in the Taco Bell case, there is also the principal. In the hubber revenue, this value is fictitious. In the Taco Bell case, the money actually exists. This makes the value of the invested Taco Bell earnings:

$2,264.40 + $894.56 = $3,158.96

My HP account is then worth $2,211.29

The Taco Bell earnings, invested in online certificate of deposit accounts is $3,158.96

The difference is 947.67 dollars. This is the amount I lost by investing my 300 hours into building a hubpages account vice working minimum wage and investing in the Ally Bank online CD.

What if we ignore present value (that business accounting valuation) and just sum lifetime earnings?

Well, the math gets easier!

HP account = $182.45 x 49 = $8,940.05

Taco Bell = $2,264.40 + $23.32 x 49 = $3407.08

The difference now is $5,532.97 in favor of the Hubpages account.

A little algebra solves for the number of years until the Taco Bell method and the Hubpages method have earned equal totals: 14.22 years.

Obviously, there are some important assumptions and variables involved in these two valuations. If these change, the values change as well. for example, a 4-year CD can pay as much as 1.80% in online investing. Will Taco Bell actually hire a 10-hour per week hourly?

Also, to make the comparison, each person evaluating the decision must consider personal ability to execute the chosen plan. Most people will spend the extra Taco Bell income, not invest it. Some people (most??) are better writers than me.

Taco Bell Better in Short Term

A short stint as a minimum wage earner produces money faster than writing online. If invested, it can produce a nice passive income. If the process is repeated year after year, the hourly rate will increase. And, when larger amounts are invested, a higher annual yield can be found.

Hubpages Better Plan for Long Run

If you want to work 300 hours in the next several months, and receive a passive income from that work, writing for hubpages appears the better course. Writing also fits into busy schedules better (e.g. moms and on-call repair workers). Not everyone can take a second job, even 10 hours per week.

Advice for Myself and Readers:

Some hubbers earn much more than I earn after my 300 hour investment. This is surely accountable to the effectiveness of published hubs. The next investment should be in reading and studying effective techniques of profitable online writers.

I moved in November out of the country. I stopped publishing new articles on Hubpages.

Result: I lost almost all my views from Hubpages. My views per day had been above 500 per day. They dropped to below 50 per day. The graph moderates the real view count. I think it averages views for 30 days before and after, or something like that. Otherwise, my graph would show day counts above 700 some days, and only a few dozen in December, 2012.

So, it appears to me that Hubpages encourages active writers by favoring them with increased views from other hubbers. I reason these views come by links appearing at the end of related articles, and elsewhere.

I published a new hub, and my daily views instantly increased more than a hundred per day. I am now hovering around 150 views per day.