Hello! Today I’m sharing a helpful blog post from my friend Jeff about how he used his tax refund. Jeff started his career at a private wealth management firm and now runs DollarSprout.com. If you’re looking for practical tips on making and saving extra money, that’s a great place to check out his latest content!
Each year when tax season arrives, I take a step back to look at the big picture of my personal finances. Most years I receive between $500 and $2,000 back from the IRS.
Typically I put a portion of that refund toward my student loans, contribute to my IRA, or top up my emergency savings. And yes, I occasionally splurge on something fun—after all, I’m human.
But in 2014 I decided to do something different with my tax refund.
I chose to make the biggest investment I could at the time: I used the money to help start my own online business.
Why?
I had been working for “the man” for only two years, but I was already tired of the idea of working for someone else. Maybe it was the dysfunctional office politics at a small firm, or maybe it was my own confidence that I could build something better on my own. Deep down I knew entrepreneurship was the path I wanted.
It was an itch that grew stronger each month, and I knew I needed a way out of the 9-to-5.
That said, I actually liked the work I did. I worked for a financial advisor and was moving up quickly. I enjoyed helping clients invest and plan for retirement.
What I didn’t like was the constant face-to-face schmoozing with clients and prospects and the relentless pressure to bring in more assets, even when that felt uncomfortable.
If I wanted to run my own business, I knew I needed a very different approach.
So I began researching successful online businesses.
The Blogging Business Model
At first, blogging didn’t seem like a realistic alternative. I was a finance guy, not a “blogger.” I didn’t understand how blogs made money—until I started viewing them as businesses rather than just sources of interesting articles.
Then I discovered “Income Reports.” I learned that many bloggers were earning substantial incomes and reaching tens or hundreds of thousands of readers monthly.
I was hooked.
With a blog I could:
- Help people at scale,
- Leverage a medium I enjoyed (writing) to deliver value,
- Avoid the constant pressure of hunting for one-on-one clients, and
- Potentially earn more than a corporate job would pay.
I knew it would be hard—many bloggers never make money—but I was willing to try. Between affiliate marketing, display advertising, and offering services, there were clear paths to monetization.
My Tax Refund in 2014 Was $800
I’d already been saving for my escape from corporate life, but that year’s refund motivated me to move forward. Since I had enough savings to last almost a year without income, I decided to use this extra cash to actually start the business.
I didn’t spend the full $800; here’s how I allocated the funds and the advice I’d give someone who wants to build the foundation of an online business while still employed.
Domain Name and Hosting for 1 Year: ~$100
A website needs a domain. Because I planned to offer one-on-one services and membership packages initially, my partner Ben and I chose a more formal business name: VTX Capital. Hindsight suggests a more blog-oriented name might have been better, but it worked for us.
Tips for choosing a domain:
- Prefer .com domains; avoid .biz, .info, .org, and similar alternatives,
- Keep it simple and memorable, and
- Avoid numbers, dashes, or other non-letter characters.
When purchasing domain and hosting, you don’t have to spend as much up front as we did. We committed to a longer hosting plan to save money in the long run since we intended to work on the project for at least a year.
WordPress Theme: $50
Paid themes are inexpensive and can dramatically improve your site’s appearance without any coding knowledge. A good theme prevents your blog from looking like an unreadable wall of text. We paid about $50 for a theme that gave the site a professional look—well worth the small investment.
LLC Registration Fees: $100
Opinions vary on when to formalize a blog as a business. Ben and I wanted to do everything “by the book,” so we registered VTX Capital as an LLC in Virginia before generating income. It cost about $100, and it felt right for our goals. I’m not a legal expert, so if you’re unsure, consult a lawyer.
Related read: Blogging and Taxes – What You Need to Know
Lawyer Fees for Reviewing Our Operating Agreement: $200
You probably don’t need this if you’re just starting out, but we wanted to avoid surprises later. An operating agreement defines each LLC member’s financial and managerial rights. Because this was a partnership—Ben was covering ongoing expenses while I handled more of the early work—we felt it was worth having a lawyer review the agreement early on.
We viewed this as preventive work: do it now before significant money and emotions are involved.
Total Cost for Us to Start an Online Business: $450
You can start for much less. If your goal is a side income, buy a domain, pay for hosting, and consider a paid theme. Everyone’s journey is different—move at your own pace and do what feels right for you.
Fast Forward to Now
Starting an online business is the best decision I’ve made. After using my tax refund to lay the foundation and spending months learning, writing, and building an audience, I left my 9-to-5 on August 1, 2014.
There were many ups and downs and a lot of trial and error. Our business shifted from primarily one-on-one client work to focusing more on affiliate products and other passive, scalable income streams. I like the direction we’re headed and couldn’t be happier.
In the early months I often doubted my decision to quit a steady job, but I kept learning every day and eventually the results reflected the effort. I now earn enough from the online business to live comfortably, and the best part is I work for myself. At 27, I can’t imagine going back to a regular 9-to-5.
Entrepreneurship is harder than it looks, but I encourage others to give it a try if they feel stuck. If you’re tired of your current situation, it’s up to you to make a change.
If you’re tired of what you’re doing, it’s up to YOU to make a change!
How much are you getting back for your tax refund this year? What do you plan to do with it?