How to Make Money on YouTube + How Much I MakeMake Money Online
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We just started posting daily vlogs of our family life on the The Allec Family channel a couple weeks ago, and we intend to do daily vlogs on that channel, just bust out the camera throughout the day and just record our family life as a young family with a one-year-old.
We’re finally going to post some of our travel videos there, from our Italy Christmas trip to other trips we’ve taken, and we’re posting on that channel because we want to share our personal lives with our followers, whether followers of my personal finance channel or Caroline’s lifestyle and beauty channel.
I intend to make updates about the state of our family channel on a monthly basis for at least the first 12 months being monetized just documenting how much money the family vlog made and things we learned along the way just to document the growth of a newly-monetized small family YouTube channel with you all to show you it is possible to start and grow a YouTube channel in 2020.
But of course I do acknowledge that our family vlog has three distinct unfair advantages that you may not have if you’re starting from scratch.
In the first part I will walk you through exactly how to get monetized on YouTube, the eligibility requirements, how to apply, etc.
In the second part I will show you our family vlog’s YouTube revenue for its first seven days of monetization and do a little digging into our YouTube revenue analytics.
What is YouTube Monetization?
Also known as the YouTube Partner Program.
YouTube monetization is making money from YouTube ads.
There are other ways to make money on YouTube, such as promoting your affiliate links in your video description or other YouTube monetization features like channel memberships, merchandise, Super Chat, and all that, but I’m just going to be talking about the most basic form of YouTube monetization, which is ad revenue.
Just in very simple, probably oversimplified terms, advertisers pay YouTube. Google owns YouTube, to run ads on YouTube videos, in front of videos, in the middle of videos, after videos, and YouTube shares this ad revenue with the creators of the videos, and the revenue split is 55% to the creators and 45% to YouTube, nonnegotiable.
How much do you actually make in ad revenue per video view?
This actually varies wildly depending on a lot of factors, but you will see exactly how much our Allec Family videos make on YouTube.
How to Get Monetized on YouTube
Here are the eligibility requirements:
- First, your channel must follow YouTube’s monetization policies, so don’t post nasty stuff, don’t post violent stuff, don’t rip other creators off, don’t plagiarize, that’s pretty basic. Basically if you’re making a legitimate channel, you don’t have to worry about this stuff. If you’re sharing good information with people, like I do for personal finance on the Logan Allec channel, like my wife Caroline does with her lifestyle and beauty channel, or if you’re just sharing your life like a vlog, documenting your life, like we do on The Allec Family channel, you’ll be fine with this requirement, and the other two requirements that I’m going to talk about right now will probably be more daunting for you.
- Second requirement, your channel needs at least 4,000 watch hours in the past 12 months. So in the past 12 months, people must have spent at least 4,000 hours watching your videos. That’s roughly 11 hours per day. So people got to be watching your stuff at least an average of 11 hours total per day, so maybe that’s 22 people each watching a half hour of your stuff per day.
- And the third requirement, you need at least 1,000 current subscribers total, not in the past 12 months, total, 1,000 subscribers total as of right now.
So with our YouTube channel, we kind of got lucky because before the channel was a family vlog it basically housed our videos of various concert performances, entertainment, stuff like that, and one of our videos was a video of a magician at my wife’s old work’s holiday party a couple years back.
This video took off, and from the get-go it was getting hundreds of views a day, so that watch hour requirements wasn’t an issue for us.
The more difficult requirement to meet was the 1,000 subscriber requirement, because with that magician video, a lot of people would just watch the video and not subscribe.
It wasn’t until my Logan Allec channel took off and I was able to recommend our Allec Family channel on the Logan Allec channel that The Allec Family channel hit that 1,000-subscriber mark to be eligible for monetization.
So we hit the 1,000-subscriber threshold on June 15, you can see me here refreshing my screen until the 999 becomes 1k, so that was very exciting.
And right when I saw that The Allec Family Channel had hit the 1,000-subscriber mark, I immediately applied for monetization with YouTube. I applied for the YouTube Partner Program for The Allec Family Channel.
Apply for YouTube Partner Program
First, on a computer, not mobile;
- Go to your channel
- Go to YouTube Studio
- Go down to Monetization on the left-hand side
- Click “Apply Now”, then walk through the steps.
Step 1. Review and Approve the YouTube Partner Terms
These terms just describe the revenue split, which as I mentioned previously is 55% to creators and 45% to YouTube.
It also says that the minimum monthly payout is $100. So if you don’t make $100 in revenue your first month being monetized, let’s say you only make $5 or something, then the next month you make $10, then $15, when your balance eventually hits $100, then you’ll be paid in the next monthly batch.
It says the agreement can be terminated with 30 days notice, the terms are not long, I think it’s like 6 bullet points or something like that so, read ’em, and approve ’em.
Step 2. Link your Google AdSense account or Create an AdSense Account
I already had an AdSense account for my Logan Allec personal finance channel, so all I had to do was link my existing AdSense account to The Allec Family channel monetization, but if you don’t currently have an AdSense account, this will be more of a process for you.
For example, you’ll have to provide Google/YouTube your address and they will mail you a PIN number in the mail, and then you have to get that PIN number in the mail and then input back in your account, so if you don’t currently have an AdSense account right now, you’ll have to do that.
Step 3. Get Reviewed
Once you’ve set up your AdSense account, the next step is to simply wait, wait for YouTube to review your account and approve you for monetization.
They initially told me for The Allec Family that it would take over 30 days for the channel to get approved for monetization, but I actually got the email after two days, that’s possibly because I have the Logan Allec personal finance channel, so maybe the review of The Allec Family channel was a bit lighter, I’m not sure, but just know it could take a while, or it could take two days or maybe even less for some people.
After you’re approved for monetization, whether that’s after two days or thirty days, you will get an email from YouTube saying as such.
Then, what you have to do, right after you get that email, turn the ads on on your videos.
You just click in the monetization column, and you change it from Off to On, then congratulations, you will run be running ads and earning ad revenue on those videos.
Or you can do it in bulk with the checkmark box at the very top above the checkmark box for the individual videos.
Then what you can do is you can change your monetization settings for future videos, and these are the settings I like to use.
I like all the ad types except the non-skippable ads, I personally find it very annoying when I cannot skip an ad, I like to be able to skip it after 5 seconds, and as a courtesy to my viewers I don’t want to subject y’all to non-skippable ads.
I do like the mid-roll ads, which are ads in the middle of videos, you can only do that on videos that are at least 10 minutes long, but it does pad the revenue quite nicely assuming that people like your content enough to keep watching even through the mid-roll ads, and that’s why you gotta create great content, because it makes your viewers happy, it makes YouTube happy, and it makes you happy knowing that you made your viewers happy, and you are also able to make some extra money.
You can also change these settings for individual videos by clicking the dollar sign icon for the video that appears in YouTube Studio when you hover over it.
One thing to note is that you can set the placement of your mid-roll ads by clicking “Manage Mid-Rolls”, you can either tell YouTube to automatically place your mid-roll ads at what it perceives to be natural breakpoints, or you can set the location of the midroll ads yourself by clicking somewhere on the timeline and then clicking Ad Break and then clicking Continue and then clicking Save.
One thing some creators like to do with mid-roll ads is make a cliffhanger out of it, kind of like T.V. does.
Let’s say you’re creating a video showing people exactly how much money you make on YouTube, and right before you reveal the dollar amount, you hit them up with a mid-roll ad so that they have to watch the ad to see what they came for or they can just look in the comments if the creator isn’t actively monitoring and deleting comments that spoil the big reveal.
Speaking of how much money you can make on YouTube, let’s now transition to the part of the video where I reveal to you how much our small family vlog The Allec Family YouTube channel made on YouTube in its first week of monetization.
A Few Disclaimers
But before I make that big reveal, I want to get a few things out of the way.
First of all, the amount of ad revenue you’re going to see that The Allec Family made in its first seven days of monetization is not huge, we are not a large YouTube channel.
I think right now we only have about 2,000 subscribers, look at our videos, I think we only have a few videos that have more than 1,000 views each, even before I accidentally deleted 14 of our most recent vlogs that wiped out the view counts for most of them and had to reupload them.
So we’re definitely not a large YouTube Channel so any support you can give us whether a like or a comment or a share we really appreciate it.
That said, even though the money the channel made was not life-changing money, nevertheless the ad revenue wasn’t only like 17 cents or something like that either in which case it might not be worth it.
That said, there is an intangible benefit to having a family vlog, a family YouTube channel, where we can look back at our lives as a young family, as young parents, when our first child was very young, and you can’t necessarily put a monetary value on that, so keep that in mind.
First Unfair Advantage
Next thing I want to talk about our unfair advantages.
I don’t want anybody to look at our family channel and think, oh, OK I can do that, I can replicate that in a week, because we do have some unfair advantages with our family channel.
First unfair advantage, you are currently watching this video on my personal finance channel Logan Allec that currently has over 96,000 subscribers as of the time of this recording, it gets thousands of views a day, and I like to mention The Allec Family channel from time to time on this channel, the Logan Allec channel, to be able to share my personal life with my viewers.
So takeaway is if you don’t currently have an existing platform with at least a few thousand followers, it will be a longer go for you unless you just get lucky with a viral video or something like that, but for most people it’s a long slog.
That said, please keep in mind that my Logan Allec personal finance channel just really took off this year, my channel grew 30x in terms of subscribers in just the past four months, so yes we have an unfair advantage with The Allec Family channel due to the Logan Allec personal finance channel, but that Logan Allec personal finance channel only got to the point of being an unfair advantage within the past four months, I am not some original O.G. YouTuber.
Second Unfair Advantage
Second, we have that magician video I mentioned previously that generates a certain amount of views and subscribers for us everyday on an evergreen basis, and that’s just kind of sheer dumb luck that that video took off, but you can learn something from that.
Are you going to an interesting event or are you going to see an interesting performer? You may want to bust your camera out and record it.
However, keep in mind that if you’re recording a copyrighted work, such as a song, at a concert, you can’t monetize it unless you obtain written permission from the copyright owner.
If it’s your original cover of a song, you can split the revenue with the copyright holder.
But if it’s a live recording of a concert, you really can’t monetize that without permission, though YouTube may imply that you can in the monetization settings.
For example, last year for their birthdays I took my parents, along with Caroline, to see Elton John on his Farewell Yellow Brick Road Tour here in Southern California, and I recorded some of the big hits at that concert and I made YouTube videos out of them, and YouTube actually gives me the option to share revenue with the copyright holder, but it disclaims it with smaller writing that says, “This is my cover of a song written by somebody else.”
And because I know their guidelines, I’m not going to click “On” because even though their machine learning doesn’t detect that this is Elton John himself singing the song rather than me as a cover version, I know that this video is not eligible for monetization.
I don’t want to dive too deeply into that because that’s more of an advanced topic, but needless to say, my recording of the magician, that was not a recording of a copyrighted work, so that’s fair game, and that video is fully monetizable.
So if you’re going to an interesting event where somebody is going to perform for you and it’s not a copyrighted work, consider getting a decent seat and recording it and throwing it on YouTube, because you never know, no guarantees, but who knows, you might get lucky, but you won’t get lucky if you don’t look for those opportunities.
Third Unfair Advantage
And of course the third unfair advantage The Allec Family has is that it features the cutest little guy in the whole world, our son Hunter, and obviously we’re biased, but we think he’s pretty irresistible.
What We’re Doing With Our Ad Revenue
Speaking of Hunter, the last thing I want to talk about before showing you how much the channel made is what we’re doing with the ad revenue from our Allec Family channel, basically as of right now unless the channel gets huge or something it’s all going to Hunter and any future children we have.
And more specifically, it will be going to Hunter in a tax-advantaged way. Let me digress here for a bit before we get to the good stuff where I show you exactly how much the channel made and allow me to put on my CPA hat and talk taxes here for a few minutes.
Probably the most awesome tax strategy for a young person, especially one in a low tax bracket, especially one like our very young one-year-old son who is in a 0% tax bracket, is the Roth IRA.
Why a Roth?
Well there would not be as much a benefit for him of a Traditional IRA because while he would get tax-deferred growth in there he has no tax to take the current year deduction against for a Traditional IRA contribution, so Roth is great.
Put money in there, and it will grow tax-free for the little guy, for years and decades and make him a millionaire someday, hopefully, because he has time on his side, consider the fact that $1,000 invested at the age of 1 year old, earning an average annual return of 8%, which is not unreasonable for someone starting so young because they can be pretty aggressive in their investing strategy.
$1,000 invested at the age of 1 year old at 8% would grow to over $100,000 by the time that individual turns 60, 100x growth, granted $100k probably wouldn’t get you as much in 2080 as it does today, but it’s still an incredibly growth rate because inflation will not hit 8% in this country, hopefully.
So $1,000 invested today in a Roth IRA could result in over $100,000 tax-free at the age of 60.
That’s all assuming that Uncle Sam doesn’t break his promise with Roth IRAs.
Only problem with Roth IRAs and children is that the maximum IRA contribution you can make for the year is the lesser of the statutory limit for the year, which is $6,000 in 2020 for those under the age of 50, so lesser of $6,000 or your earned income for the year.
Backdoor Roth IRA
If you’re a high income earner, there is another limitation on direct Roth IRA contributions, you may have to use the backdoor Roth IRA.
Two years ago I made a video on how to do the backdoor Roth IRA at Vanguard.
But of course most young children don’t have that problem, because they’re not high income earners, and so their issue is that they can’t contribute to a Roth IRA in excess of their earned income, and most young children do not have any earned income and so they’re therefore ineligible to contribute to a Roth IRA.
How Hunter Became Qualified for Roth IRA Contributions
But Hunter is the star of our YouTube videos, so it’s completely fair for the production company, Allec Media LLC, which is paid by Google/YouTube for The Allec Family channel revenue, to be paid compensation from that production company. So every month my company will write Hunter a check for his compensation.
And then the question is of course what’s a fair compensation for his “talent.”
And there are a lot of things to consider, but first of all, he’s not actually doing any work, he’s just living his life and occasionally maybe saying “hi” or “bye” to the camera on command, so it doesn’t seem appropriate to just give him a standard “base” compensation here.
It seems more reasonable to simply say that he is entitled to a portion of the revenue because the work, the editing, the uploading, and all that, that’s done by good old Dad, so it probably wouldn’t fly with the IRS to say that all of The Allec Family revenue should go to 0% tax bracket Hunter then my company could essentially get the ad revenue, write a check to Hunter for the full amount, so I don’t pay tax on it.
It wouldn’t increase my business income because it comes in and it goes out to my son, so I get a tax deduction for my business for Hunter’s compensation, and then that money that Hunter earned is tax-free to him because he makes less than the standard deduction amounts for both federal and state income tax purposes where we live, and not only that, but his compensation goes into a Roth IRA for him in which it enjoys tax-free growth.
So it’s basically tax-free income that will grow for him tax-free for decades invested in the U.S. stock market, which by the way, if you’re curious about, you should watch my video on investing for beginners.
So taxwise that arrangement I just described is so good, that it would probably be frowned upon by the IRS if we decided that Hunter’s compensation was 100% of the ad revenue from The Allec Family channel.
So at this point, we think 50/50 is fair.
50% going directly from my business to Hunter as his compensation, which goes to his Roth IRA, which gets tax-free growth, and and then 50% funneling through Allec Media LLC, a pass-through S corporation, to its owner, me and by extension Caroline, and then we will contribute our earnings, as distinct from Hunter’s, from The Allec Family YouTube channel to a 529 plan for our son Hunter for his future college education.
So we think 50/50 is fair for now, if we really want to get granular, we’d probably isolate just the videos that Hunter appears in as distinct from say the magician video, but you’ll see how much ad revenue the channel’s making here in a bit, and it’s not a whole lot at this point, maybe eventually we have to do some kind of bifurcation like that.
But for right now, I think 50/50 is defensible if it was even questioned by the IRS because look, people wouldn’t watch these videos of our daily lives in Santa Clarita, California if Hunter were not in them, so I think 50/50 is fair for now.
How Much We Made Our First Week Being Monetized
Without further ado, here’s how much ad revenue The Allec Family YouTube channel made in its first seven days.
But if you’d like to learn more, I will be getting to the good stuff in this section of the video regarding ad revenue, video analytics, and more.
There’s just so much with the YouTube analytics, and I don’t even understand all of it, I probably should, especially with the growth of the Logan Allec personal finance channel, maybe I’ll do a dedicated video to YouTube analytics at some point, but in this post I just wanted to explain to you the YouTube monetization process and show you how much our family channel The Allec Family made in revenue in its first week being monetized.
How to Make Money on YouTube Video
5 Tips From Someone Who Makes $50,000 a Month on YouTube
The tips below are from Ryan Scribner, who makes over $50,000 a month from his personal finance YouTube channel.
A lot of people are interested in making money online these days. Maybe you have a 9 to 5 that keeps you busy during the day, but on nights and weekends you have free time that you want to dedicate towards increasing your income.
I found myself in the exact same position back in 2016 when I was working for my local power utility company. Oddly enough though, I did not start my YouTube channel with any intention of making money. I started this channel because I was passionate about investing and personal finance, and this was a way for me to help others.
Well, as it turns out you can make money with a YouTube channel. After making videos on nights and weekends for a number of months, I began making a few hundred dollars a month. I will explain exactly how I was doing this later on. By the time I started making $1,000 a month, I was at a crossroads. I believed that I could scale this YouTube channel and create a full time income for myself, but that would mean leaving the security of my job. I ultimately decided to leave my job and go full time on YouTube.
I have been a full time YouTuber since June of 2017. Now, I run a few different investing related mediums. Besides my YouTube channel, I own one of the largest Instagram pages related to investing and a blog known as Investing Simple. Between the YouTube channel, the Instagram page and the blog I am consistently making $25,000 to $50,000 every single month.
Now, these are not results that you can expect from day one. In fact, I can’t guarantee that you will experience results like this at all. But what I will tell you is that patience is rewarded when it comes to building a following and making money online. Before I get into the money making strategies I follow on YouTube, I want to give you the best advice I possibly can.
My Advice: Don’t try to make money.
I know that probably comes off as strange advice, especially in an article telling you about how to make money on YouTube. But hear me out… The reason why I was successful was because I was making content in a niche that I was passionate about and I had a desire to help people. I added value expecting nothing in return, and my audience was able to pick up on this. If you start a channel with the goal of making a quick buck, your audience will be able to pick up on this self interest and they will not like it. Ever have lunch with an old friend, then halfway through the lunch they try to pitch you on a new business opportunity? That is exactly how your audience will feel if you go at this whole YouTube thing with the goal of making money. It also takes months if not years to build an audience, so you should 100% be creating content in a niche that you are passionate about.
Add value, expecting nothing in return. Then, the money follows.
Alright, rant over. Assuming you have already built an audience and added value, here are some of the best ways to make money on YouTube.
1. Create a viral video.
Ahh… the “low hanging fruit” of a YouTube channel. The reason why I have that in quotes is because this is one of the biggest misconceptions out there about YouTube. People often think the easiest way to make money on YouTube is to create a viral video that gets millions of views and collect an ad revenue check.
Now, don’t get me wrong. I have had numerous videos on my channel surpass 1 million views and this did earn me tens of thousands of dollars. The only problem is there is no set in stone way for creating a viral video! At the end of the day, it is totally random. Creating a video and hoping that it will go viral is like banking on winning the lottery, well with slightly better odds.
Still, the odds are just not in your favor. Back in 2015, YouTube revealed that there are 300 hours of content uploaded to YouTube every minute. I would imagine that number has doubled or tripled now. Trying to get millions of eyeballs on your video with all of that content being uploaded each minute is a daunting task. While you can make money in this way, it is not the best strategy.
I see ad revenue as the gravy. I make money by leveraging affiliate marketing, which I will explain later, and selling a course. These are much better strategies in my opinion. While the ad revenue can be a lot of money, it is not an income source that I rely on because it is totally unpredictable.
2. Leverage the Amazon Associates platform.
This is the second way that I started making money with my YouTube channel. In my opinion, this is a much better strategy than simply going after ad revenue and it is taking advantage of something called affiliate marketing. If you aren’t familiar, affiliate marketing is making product recommendations and getting paid for it. We all make recommendations every single day, the difference is some of us are getting paid for it and some of us aren’t.
Amazon has one of the best affiliate programs out there, and it is very easy to get accepted. As an Amazon affiliate, you can recommend just about anything on the site and earn a commission in the process by referring a sale.
Here’s how I would do it. I would mention books I was reading frequently in my videos. I would simply hold up the book and explain why I would recommend reading it, then I would link to it in the description and tell people the link was there. When someone clicked on the link and made a purchase, I earned a commission!
One of the best parts about the Amazon Associates (affiliate) program is that they don’t actually have to buy what you sent them there for in the first place. Yes, you read that correctly. You could send them there for a book, and if they purchase a vacuum cleaner within the next 24 hours, you earn a commission! I use that example because that exact scenario happened to me last year. I sold a $1,500 vacuum after someone clicked on one of my links and earned a commission of over $100.
3. Align with brands for affiliate/sponsor relationships.
As much as I like the Amazon Associates program, this is not where I make the most money. The reason is because this is a low commission environment. Since you can recommend just about anything that is for sale on Amazon, the commissions are low. You are better off in most cases establishing relationships directly with brands.
Since I am in the investing and finance niche, I have reached out to different investing platforms and money saving apps to establish affiliate relationships. For each referral or funded account, I earn a commission in the process.
Once you figure out what niche you are in and build an audience around that topic, it is as simple as reaching out to the big brands in that niche. Actually, a better strategy is to reach out to the small ones! They are often backed by venture capital and have the money to invest in growth as they are trying to gain market share. This can be an affiliate relationship, where you earn a commission for referrals, or just a sponsorship. A sponsorship is when an advertiser pays you for a mention or link to them. It is typically a flat rate.
Personally, I am a fan of the affiliate route over the sponsorship route. If you do your homework and work with brands that align well with your audience, you should be seeing a decent amount of conversions. I have always earned more money from affiliate relationships than sponsorships.
4. Sell a course or digital product.
The final way that I have made money on YouTube is by selling digital products. The first course I launched was a stock market educational course. Over the course of one year, I sold $40,000 worth of that course with almost no advertising. Shortly after that, I created a stock market membership site where users paid me $19 a month for stock tips. At the peak, this was earning me over $6,000 a month.
While this is not my focus now, selling a digital product based around the content you are producing online can be very profitable. You might be wondering why people would bother buying a course or a membership site in the first place. If you can learn for free from YouTube videos, why pay for a course?
The reason people buy courses is because of the convenience. They don’t need to scour the internet or read 10 different books to accumulate all of this information. You have done the leg work for them, which of course comes at a cost!
If you are looking to learn more about creating and selling online courses or membership sites, I actually have a completely free course called Course Creation Companion. And no, it is not a free course that leads you into a paid course. It is a completely free resource I have put together
You may have heard of other ways of making money on YouTube including selling merchandise or having people back you on Patreon. I have never had success with these options, so I did not want to include them. I have implemented and made money with all of the above strategies. When it comes down to making money on YouTube, a lot of it is niche dependent. It is a lot easier for a comedy or gaming channel to sell shirts than a finance channel! Your best bet is to try different options over time and see what works for you.
Logan is a practicing CPA, Certified Student Loan Professional, and founder of Money Done Right, which he launched in July 2017. After spending nearly a decade in the corporate world helping big businesses save money, he launched his blog with the goal of helping everyday Americans earn, save, and invest more money. Learn more about Logan.