The Single Most Important Concept In Making More Money (Finish)

Bill Gates. Warren Buffett. Steve Jobs. The Google Guys.

What do they all have in common?

Ok, they are all rich. We know that. What else?

They're all smart? Also true, but less important than you might think. Plus, they are all smart in different ways.

So what is it?

It's simple: they all understand the importance of ownership.

In the end, it all comes down to how much stuff you own. If you are an owner, you control the cash flow. If you aren't, well…you don't.

It doesn't matter if you're the most kicka$$ employee in the world. It doesn't matter if you have amazing skills, or a unique knowledge base. You're never going to get rich just because you know how to do stuff.

Unless, of course, you are doing it for yourself.

So why don't more people own stuff of value? Why do most people just work for others their whole lives?

Here's the thing: ownership requires effort. In order to own something of value, you have to make an investment.

This investment isn't just money. It can involve your time, or even your personal brand.

It's not an easy path. Over the past few years, I've been lucky enough to meet many successful business people – dating coaches, best-selling authors, and even billionaires. All of them have said that there were points where they thought they were going to fail, and all their effort had been for nothing.

But if you do it right, it's all worth it. Trust me, there's no better feeling in the world knowing that no matter what I do or where I go, I have a stream of cash flow coming in to help pay the bills.

That stream of cash flow is all mine. I own it. No one can "fire" me and take it away. No one except me. And I plan to keep on growing it over time.

Make More Money By Becoming Indispensable (Finish)

Seth Godin is the man.

Seriously. Every time this guy puts something out, it casts things in a whole new light. And his latest book, Linchpin, is no exception.

In Linchpin, Godin focuses on what it takes to become indispensable. Godin’s view is that you need to put your heart and soul into whatever you do, and that passion will make you a Linchpin, a unique asset that cannot be replaced.

I agree with Seth. Passion is important. But it isn’t the only ingredient in becoming indispensible. Here are three additional methods that people have used to become linchpins – successful to the point that they make $50,000 in a single week or even $5,000 per hour.

Method #1: Be A Connector

Several years ago, I was talking to a good friend of mine who worked in venture capital. We were discussing various investment opportunities and I suddenly remembered that I had another contact who was in the process of starting a company. On a whim, I decided to put them in touch. I sent out an e-mail introduction and let them take it from there.

A year later, I got an excited call from my friend. “Vik, remember how you put me in touch with Jim? Turns out we’re going to invest in his company! We’ve been talking for several months now and things have been going great. Thanks so much for connecting us!”

Having a great network is invaluable, but sharing it is what makes you indispensible. Whenever you’re meeting people, think about how you can leverage your network for their benefit. You could make introductions to potential clients or business partners, or at the minimum, let them know that they are free to ask at some point in the future. If you establish yourself as a consistent source of good contacts, people will stay in touch with you and help you out whenever you need it.

Method #2: Be An Influencer

Influencers are indispensable simply because they have an audience that trusts them. Once you’ve built trust, you can easily convince your audience to buy your products. Gain influence, and the money will take care of itself.

Here are some examples of how people have established themselves as influencers:

Ramit Sethi: A blogger-turned-author-turned-entrepreneur, Ramit started writing at iwillteachyoutoberich.com in 2004. At the time, the blog was nothing but a hobby; a tool to teach people about personal finance in a fun and interesting way. Within a few years of consistent high-quality writing, Ramit was getting more than 100,000 unique visitors per month to his site. Young people loved his easygoing, humorous approach for teaching a subject that’s traditionally pretty boring. This led to the publication of a best-selling book, and the creation of his own line of personal finance products. Even though Ramit is young, he has successfully established himself as an influential figure in the competitive world of personal finance advice.

Deepak Chopra: For a long time, Deepak Chopra was a successful but relatively unknown medical doctor. In 1985, Chopra met the Maharishi Mahesh Yogi, a leader in the transcendental meditation movement, who invited him to study Ayurveda. Chopra suddenly realized that there was a golden opportunity to combine traditional western medicine with the preventative healing methods in South Asian tradition. In 1987, he wrote his first book, “Creating Health,” which was a top seller and established Chopra as an authority in the new “preventative healthcare” area. Since then, Chopra has written more than 20 books, opened up hundreds of clinics and Ayurvedic Centers, and of course, made tens of millions of dollars.

Steven Covey: In 1989, Covey wrote a bestseller called “the seven habits of highly effective people.” This was not the first book in the self-help genre. However, Covey distinguished himself by coining a new term: the idea of an abundance mentality. The idea here was that optimistic, effective people believe that there are enough resources to share with others, rather than hording it all to themselves. This was a unique approach and contrasted sharply with the more traditional mentality of maximizing personal gain. Covey was successful at being an influencer because he defined a whole new area of expertise, and instantly became a leading authority.

Brian Clark: In 2005, Brian Clark was already a successful entrepreneur. He had generated substantial profits by scaling offline businesses using the power of the internet. The problem was that no one knew about it. To fix this, he started Copyblogger, a content hub for information on how to grow your business using online tools. Today, the site has more than 120,000 subscribers and has spawned three seven-figure businesses. Clark has also been mentioned in numerous blogs and books, enhancing his authority even further.

Method #3: Be A Specialist

It’s much easier to demand lots of money if you are a specialist…but you have to specialize in the right field. Here are two things to consider when narrowing down a speciality.

Something that no one else can do:

One day in college, the elevators stopped working in my building. A few hours later, the elevator repairman stopped by to fix the problem. I was walking by, and we ended up getting into a conversation.

Turns out he makes around $150 per hour.

I was pretty surprised at first. But then I realized that it actually made a lot of sense. Elevator repair is a very specialized job. There are only a few professionals in each city, so this guy just goes from building to building…and he mints money along the way.

Something that has business value:

My parent’s next door neighbor is currently a Vice President of Engineering at Apple. Although he’s been out of school for more than 25 years, he’s still incredibly talented at understanding and designing the latest high-end technologies. This depth of knowledge and specialization is what makes him indispensible to the company.

Another great example is Neil Patel, an entrepreneur who made his fortune by establishing himself as an SEO specialist back when the industry was just starting to evolve. Everyone wanted traffic from Google, but not many people knew what it took to get there. By finding a few big-name clients and getting testimonials, Neil quickly established himself as an invaluable resource when it came to developing a user base online.

Are you indispensable? If not, how do you plan to get there?

How An Immigrant Tennis Instructor Built A Business Empire

In the mid 1970s, a young tennis player named Julian Krinsky moved to the United States from his home in South Africa. After a brief run at being a professional player, Krinsky had gotten his CPA and got a job as an accountant in Philadelphia

To make extra money, Krinsky started giving private tennis lessons on a part-time basis. Word spread, and soon, Krinsky had more than enough students to allow him to coach full-time.

Sensing a business opportunity, Krinsky started to expand. He rented out courts and dorm rooms, and started launching summer camps full-time. The tennis camps were a goldmine. Hundreds of students enrolled, and Krinsky was able to make a small fortune in fees, even after paying all of his expenses.

At this point, Julian Krinsky could have sat back and counted his money. But he knew that if he worked a little harder, he could make even more. He realized that there was big demand for his unique brand of fun, interactive summer camps. So he decided to start programs in other sports. Soon, he had camps for baseball, basketball, soccer, and football. He even launched a series of summer programs around arts, sciences, and businesses.

Today, more than 4,000 kids each year attend Krinsky's summer programs. What had started as a side project had evolved into a thriving, profitable business.

But Krinsky didn't stop there.

Once he had made some money, he realized that he needed to diversify. With his background in property management, real estate investing was a very natural fit.

Krinsky started by buying a single foreclosed property. He fixed it up, rented it out, and started collecting checks.

A few months later, he did the same thing again. And again. And again.

Today, Krinsky owns more than 100 properties in the Philadelphia area. 

Several years ago, I had the privilege of seeing Julian Krinsky speak at a conference. I had been impressed, and had scribbled down some of my thoughts in my notebook.

A few weeks back, I was cleaning out my shelves when I found the old notebook. Suddenly, it all came back to me. Julian Krinsky had mentioned three basic principles that had helped him succeed. 

1) 

2) Build Scalable Systems

Krinsky quickly realized that he needed to hire and retain people if he wanted to grow his business. But it wasn't just about bringing people on board. He also needed to create a business infrastructure that would maximize productivity.

 

How My Friend Made $50,000 in a Single Week

A few months ago, I was having dinner with Mark (that’s not his real name), a friend who had recently started an online marketing business in San Francisco. When I asked him how he was funding his new venture, he said “Vik, you’re not going to believe this story…”

Rewind to November of 2009. A few months before, Mark had left his lucrative job on Wall Street to set out on his own. At the same time, a large online marketing company called QuinStreet filed to go public on the NASDAQ. All of a sudden, Mark was bombarded with calls. All of his Wall Street buddies wanted the inside scoop on the industry. What exactly was online marketing? How did this company make money, and was there potential for growth?

Most of Wall Street knew nothing about the online marketing business, and they were hungry for any information they could find. After all, millions of dollars were on the line.

At first, Mark decided to be as helpful as possible. He took the calls and answered the questions as well as he could based what he knew. But a few calls in, he had an epiphany:

Why am I not getting paid for this?

Back in his Wall Street days, Mark had used a resource called GLG which connected Wall Street analysts to industry experts around the world. The analysts would pay the experts a generous hourly wage for their time and insights. So Mark called his contact at GLG, and requested to be put on the expert list for any online marketing inquiries. Before he knew it, Mark was charging $400 per hour for his time.

But it didn’t stop there.

As it turned out, several of the callers wanted more information. Mark’s general thoughts were helpful, but did he have any data or “competitive analysis” that they could use to better analyze the investment opportunity?

So Mark decided to write a detailed industry report on online marketing. Using completely public data, he put together a formal analysis, filled with charts, graphs, and numerous insights on the online marketing industry. It took him less than a week to complete. The price? $5,000 per copy.

To date, he’s sold eight copies. You can do the math.

Here’s the kicker: My friend was by no means an expert on online marketing. He had spent his entire career on Wall Street. Sure, he was a smart guy with a strong statistical background and the ability to learn, but that certainly didn’t make him an expert. But the fact that he could convince others of his credibility allowed him to charge huge amounts of money.

So what can we learn from this? Here are a few thoughts:

Perception is Reality: Sad as it might be, it’s important to give off the perception of success and expertise. This perception is what allows people to charge absurd amounts of money for their time and insights. You may be a real expert, but it means nothing if no one knows it. Therefore, it’s always crucial to develop, maintain, and grow your personal brand and make sure that the buyers understand your value.

Your Time is Valuable: Your time really is your most important asset. If people are using it to make money, you should figure out a way to get paid. It’s ok to give away a bit of your time to generate some upfront interest, but never let people take it for granted. Understand that they are getting value and that you need to be compensated accordingly.

Presentation Matters…A Lot: I’ve known Mark for awhile now, and I’ve always found him particularly impressive. He’s a terrific salesperson and is extremely entrepreneurial. He always brings a unique energy to any situation. These personality traits added a huge amount to his earning ability. Also, his industry report was very polished and professional. It was written in a way that Wall Street analysts appreciated and understood. Mark maximized sales by presenting his value in a package that made sense to the buyer.

Leverage Price Signaling: When I was studying marketing in college, we learnt about a concept called price signaling. The basic idea is psychological: if you charge more for a product, people will think that it has more value. If Mark had only charged $100 per report, the analysts would have probably thought that the information wasn’t that crucial. But at a $5,000 price point, Wall Street analysts saw this as a “must-have” product. $5,000 per report isn’t much money for Wall Street, but it’s enough to garner their respect and interest. Of course, you also make more money at a higher price point =).

Sit Back, Relax, and Watch The Money Roll In (Finish)

Passive income.

Ah, those two magical words that sound so sweet, and yet are so hard to achieve…

Passive income is everyone’s dream scenario. We are free to pursue our life’s passions – whether that is traveling the world, pursuing a hobby, or spending time with our family – while money continues to roll in day in and day out.

What a wonderful fantasy.

But it doesn’t just have to be a fantasy. With the right knowledge and some hard work upfront, I truly believe that anyone can achieve the passive income lifestyle. Here are three concepts that will set you on the path towards sitting back, relaxing, and watching the money roll in.

The Power Of A Sales Platform

The single best way to guarantee yourself a good long-term income is to build a sales platform.

At the end of the day, a platform is simply a brand. You have built up trust with a group of individuals, and you are ideally positioned to leverage that trust into sales of a product. This “trust” can take many forms; here are a couple of examples:

A blog: In the last five years, blogging has evolved from a casual hobby to a serious business. There are many bloggers who make well over six figures from their blogs…and almost none of this revenue is from advertising.

Instead, bloggers use their brand to create their own line of products. One good example is Yaro Starak. Five years ago, Yaro was, in his own words, “barely making enough money to live independently.” Today, he uses his blog to market his line of high-margin information products…which generate more than $500,000 per year in revenue.

A book of clients: My friend’s father is a partner at a prestigious management consulting firm. He clears seven figures each year, and amazingly he does this without scrounging up very much new business.

Instead, he uses his existing book of clients for repeat consulting engagements. This client roster is more than large enough to keep him busy, and allows him to charge a very healthy hourly rate.

Of course, it took him years to build these relationships, but they will continue to pay out for years to come.

But be careful – you don’t want to make a quick buck at the expense of burning some bridges. It’s important to understand your audience and sell them products that they genuinely want, which leads me to…

Affiliate Marketing

Affilate Marketing is probably the single best way to generate recurring revenue. The idea is simple: find a bunch of “affiliates” and pay them commissions for selling your product for you.

For example, let’s say I’m selling a piece of software for $100. I can offer affiliates a commission of 20% for each sale. Every time they sell my product, I get paid $80 and they get paid $20.

The key to successful affiliate development is to find people who have relationships with potential customers. When best-selling author Tim Ferriss was building his first health supplements company, he reached out to affiliates who had blogs, e-mail lists, and other channels to reach customers. Within a year, Tim had an army of salespeople who were generating recurring revenue without any upfront cost.

The best part about this system is that negative cash flow is almost impossible. You don’t pay money unless your product sells.

The Value Of An Evergreen Product

An Evergreen product is something that is needed no matter what. Evergreen products are good business because they will continue to sell for a long period of time.

Examples of evergreen products:

The Snuggie: Some people might say the Snuggie is a fad. I disagree. I own a Snuggie, and it’s something that I will continue to use for a long time. Once it’s worn out, I’ll probably buy another one. I’ve written before about how the Snuggie is marketed brilliantly, but at the end of the day, it’s still a product that I find useful.

Ramit Sethi’s Earn1k: Everyone wants to earn more money. This will not change in the future. In the Earn1K, Ramit walks students through a step-by-step process to earn their first $1,000 as a freelancer. Ramit’s product is expensive, but it will continue to sell because it fills an ongoing need.

Dean Graziosi’s “Make Money In Real Estate.” People will always need property. Sure, there will be bubbles and busts, but there will always be a market for homes and apartments. In his course, Dean teaches people exactly how they can generate lots of money from real estate investment. Here's the thing: most people will never successfully act on this advice, 

Income 101: A Blueprint to Maximizing How Much You Make (Finish)

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The “80-20 Rule” And How It Applies to Making More Money

Hundreds of years ago, an ancient Italian economist had an idea. Throughout his life he had observed that 80% of the land in Italy was owned by 20% of the people. One day, as he was gardening, he noticed something else: 80% of the peas came from 20% of the pea pods in his garden. He realized quickly that this “80-20 rule” didn’t just apply to land and peas, but in fact to most things in life – including careers and relationships.

In the “Four Hour Work Week,” entrepreneur Tim Ferriss talks extensively about the Pareto Principle and how you can use it to be more efficient in your day to day life. His advice is simple: figure out the 20% of businesses, clients, and relationships that matter most. This focused approach will save you valuable time, energy, and money.

While I agree with Tim, I don’t think he tells the whole story. Yes, it’s important to find 20% of clients, businesses, and personal relationships that are going to make you all the money. But finding the 20% that matters is only the first step. You actually have to convert these opportunities into cash flow!

A personal example: when I worked in finance, we pitched hundreds of deals to clients. Most of these sales pitches would fall apart quickly, allowing us to focus on the 20% that actually had potential.

But converting them into successes was a whole different ballgame. Just because we eliminated 80% of the riffraff didn’t mean we were automatically going to achieve that home run of a lucrative, long-lasting business relationship.

The Difference Between Absolute and Relative Income

This is another concept from the Four Hour Workweek. A simple scenario: John is an investment banking analyst making $10,000 per month for 500 hours of work. Paul is an internet entrepreneur making $5,000 per month for 100 hours of work.

Who earns more?

In terms of absolute income – the total amount earned, John obviously earns more. But in relative terms – which measures your hourly earning power, Paul actually comes out ahead. John makes an average of $20 per hour ($10,000/500 hours), while Paul makes $50 per hour ($5,000/100).

In our competitive, adrenaline-fueled world, many people focus exclusively on absolute income. They will work 60, 80, 100 hours a week to earn as much as they can – often at the expense of their families, health, and social lives. Absolute income can be a black hole – sure, you’ll make a little extra money, but at what cost? It can quickly become a high-effort, low-reward situation, where you’re slaving away to maximize the financial gains of others.

Instead, Tim emphasizes the importance of relative income. A high relative income gives you flexibility; if you are making hundreds of dollars an hour, you have more discretion over how much you have to work. It also allows you (if you choose) to make more money on an absolute level – all you have to do is work more.

Achieving a high relative income requires a few things:

-  Hard Work: The whole point of passive income is that you’ve put in the work to build a brand that other people can’t easily clone. You’ve invested the time and effort into building relationships and/or awareness upfront. But this isn’t easy! It takes a huge amount of energy early on (usually for very little monetary reward). Simply put, patience and hard work are the name of the game. Otherwise, everyone would do it.

Ownership: The best way to maximize your earnings is to own a valuable asset. This can include anything from real estate to a small business to a highly-trafficked website – anything that will earn you money. It isn’t easy to own something of value; it requires time and often some money as well. But it is well worth it in the end.

-  Distribution: You don’t want to be the one doing all the selling. Take a look at the most valuable brands in the world – Coca Cola, Microsoft, Louis Vuitton. They all have one thing in common: amazing distribution. Around the world, thousands of retailers are selling these products on behalf of these brands. The same principles work on a small scale as well. When Tim Ferriss started his online food supplements company, he found dozens of online retailers to sell the product for him. He’d pay them a commission and pocket the rest. Within a few years he was making hundreds of thousands of dollars each year for just a few hours of work each week.

The Difference Between Active and Passive Income

Active income is money that you have to work for. Most day jobs fall under this category…as does this blog. Also included here are investments that need to be actively managed (such as real estate or a small business).

On the other hand, passive income is money that requires little to no work on your part. Having significant sources of passive income is the key to increasing your hourly wage. Examples of this include search engine optimized websites, automated businesses, and (in certain cases) long-term investments such as stocks and bonds.

Here’s a table illustrating the differences between active and passive income:

How To Profit From The Greatness Of Others

I was recently watching a Warren Buffett interview, and one quote really stuck out:

“The best way to generate an income is to have a useful talent…like helping the sick or writing a new piece of software. Of course, if you’re like me, and have no talents, you can succeed by investing in those who do…”

-          Warren Buffett

Ok, maybe Buffett is being a little too modest, but he makes a good point. Talent cannot succeed without resources, so if we don’t have the talent, we can make a really good living by investing in those who can do the most with the cash.

In fact, not being “talented” is one of the things that allows Warren Buffett to be so successful. By acknowledging his lack of expertise, Buffett gives more freedom and autonomy than most investors. He doesn’t try to micromanage his employees; instead, he simply lays out expectations, provides the right incentives, and steps in whenever they need a helping hand. This allows him to invest in far more companies than he otherwise would.

In short, he’s using his time efficiently while making his employees happy. Win-win.

Continue reading How To Profit From The Greatness Of Others →

Harsh Realities Of Business

Sexy Businesses Aren’t Actually That Sexy

Five years ago, a small social network called Facebook started to gain a lot of traction. Around the same time, MySpace was sold to News Corporation for nearly $600 million.

All of a sudden, lots of entrepreneurs and investors were pouring their time and money into social networking. After all, it was the next big thing, so how could anything go wrong.

The problem was that many of these people didn’t know anything about social networking, or even about the internet in general. They saw a success and wanted to copy it, but had no real vision about how to differentiate themselves.

The same thing happened with Groupon three years ago. The “daily deal” concept was easy to understand, but difficult to execute without a strong understanding of the local advertising market. However, lots of people saw an “opportunity” to get rich quick by starting their own daily deal sites.

Once again, most of them failed horribly, resulting in a huge waste of time and money.

Instead of jumping on the bandwagon, think about how you can solve a real problem that you actually understand. Even though this problem might not be “sexy,” it will definitely give you the best chance of success.

One good example of this is Cash For Gold, a business that buys gold jewelry for a serious discount and then sells the gold to other investors. The business made more than $100 million in revenue in 2010, with fairly gigantic profit margins.

Cash For Gold isn’t the “sexiest” business, and the company also engages in questionable business practices, but no one can argue with the fact that they are printing money.

Things Fall Apart:

Nothing is more painful than working for months on a partnership deal or prospective sale, only to see it fall apart at the very last minute.

I spent the early days of my career at a bank, pitching deals to rich clients. I can’t even count the number of hours I’ve spent writing documents and models that have gone nowhere.

The worst part is that sometimes there’s nothing you can do. It just wasn’t meant to be. But more often than not, you can at least increase the chance that the deal will go through.

First of all, be willing to compromise. Sometimes, tweaking the deal terms just a little bit can help alleviate a tense situation. Most of the time, making these small concessions is far better than losing the deal altogether.

It’s also important to show that you really want the business. Emphasize that you value the relationship and make sure to bring up the positives of moving forward. One of my good friends sealed a multi-million dollar affiliate contract simply by sending over a package of beef jerky.

Finally, be patient. Good things take time. Lasting relationships are not built overnight. Strong partnerships are the result of many hours of discussion, deliberation, and research. Don’t apply more pressure than you have to, or you risk things breaking down.

This last point is especially difficult for me, since I am a very impatient person, and it’s an area where I still need to show a lot of improvement. Any suggestions here are more than welcome.

You Can’t Do It All:

It’s important to know your limits. No matter how much you know or how talented you are, you simply can’t do it all yourself.

Tim Ferriss writes about this in depth in the Four Hour Workweek. After his first business, BrainQuicken, started to take off, Tim was working 15 hour days trying to ship orders, return calls, and build new partnerships. His dream of owning a profitable, growing business was quickly turning into a nightmare.

To his credit, Tim quickly identified the problem and came up with a solution. He realized that his strength was marketing and business development. Therefore, he hired people and set up automated systems to manage the back-end operations of his business.

The result? Increased profitability, improved inefficiency, and a whole lot less stress.

I owe a lot of my own business success to other people.

Ways To Increase Your Powers Of Persuasion

Reciprocation.

People have a natural sense of “fairness” – if I receive something from someone, I should repay them in some capacity. This makes it harder for people to say “no” to a request after they have already received something of value.

For example, the American Disabled Veterans organization sends out mailers asking for donations. They conducted a test: one group of mailers were sent with a simple form letter, while others included a form letter along with a small gift – such as personalized address labels. The result? A 100% increase in donations.

Commitment

People don’t like to break commitments. This is not just true with legal contracts or large, binding commitments; the motivational force is strong for all levels.

For example, a restaurant owner in Chicago was concerned because many people made reservations but didn’t actually show up, so he made a simple change. He instructed his receptionists to stop saying, "Please call if you change your plans" and to start saying, Will you call us if you change your plans?" The no-show rate dropped more than 60% within two months.

Consistency

This is simply another word for “brand.” Companies like Starbucks make large margins because they have built “authority” as a

Authority.

Authority is valuable because it conveys the perception of expertise. If you have achieved certain things, or have certain skills/abilities that others don’t have, you can charge a substantial premium for your time.

One expert at building authority is Ramit Sethi, author of the best selling I Will Teach You To Be Rich. He leveraged his Stanford education, entrepreneurial background, and NYC selling author status to launch the Earn1k course. Although this course is expensive, he has no problem getting a lot of costumers because his expertise is perceived to be very valuable.

Social Proof.

Most people are followers. If they see a trend, they are much more likely to jump onboard.

This is why good testimonials are so important. If people have seen that other customers are endorsing what they’ve bought, they are more likely to buy themselves.

Scarcity.

Have you ever seen the “only 2 more hours to buy!” icons online? This is the power of the scarcity tactic – people are more likely to take action when they perceive that an opportunity might go away.

This is the power of the Daily Deal business model. Companies like GroupOn make billions of dollars by creating a short-term opportunity, which dramatically increases sales.

Liking/Friendship.

This is an obvious one – people are more likely to say yes when they already like somebody.

However, it manifests itself in non-obvious ways. For example, my good friend Brian Crane runs a website called LuckyGunner, which is targeted at the hunter equipment niche. The site features an attractive blond named Heidi who is the “face and voice” of the LuckyGunner brand. The men visiting the site love Heidi, and thus they are much more likely to buy.

 

How To Save Lots of $$$ Without Changing Your Lifestyle

Focus on the Big Wins

One the main themes in Ramit Sethi’s popular blog “I Will Teach You To Be Rich” is the idea that you should focus on the big wins. In personal finance, that means that you’ll save the most money by cutting back on a few big expenses rather than trying to penny-pinch every step of the way.

For example, Ramit talks about how some of his readers saved hundreds of dollars each year just by switching to a low-cost brokerage account and finding the best credit cards. Check your credit card statement for monthly charges – chances are you’ll find some subscriptions (a gym membership or a credit report service) that you never use. Cut those costs first! These are “high-return” situations  – they take very little time, save you lots of money, and best of all don’t require any change in your lifestyle.

Another great option is the daily deal sites. There’s nothing wrong with going out to eat or treating yourself to a weekend getaway. But why pay full price if you don’t have to?

It’s just another application of the 80-20 rule: 80% of your gains come from 20% of the effort. The trick is to identify that 20% quickly and maximize those particular opportunities – both in personal finance and in life.

Interestingly enough, many people who claim to be frugal are in fact “penny-wise and pound-foolish.” They’ll try to save $2 on coupons, but will pay massive annual fees on credit cards and subscriptions that they never use. Don’t become one of these people! Figure out how much you can save upfront with just a few big wins. You’ll be surprised at how big a difference it can make.

Don’t Overcommit Without Knowing What You’re Getting

A couple of years ago, I was looking to hire an SEO (search engine optimization) company for one of my web projects. I interviewed a bunch of candidates and finally narrowed in on one company. Everything seemed to check out: great references, terrific work history…and the guy I talked to was really friendly.

Eventually, we started talking about price. He gave me two options – a monthly fee, or a larger upfront fee that would guarantee me services for one year. I did the math and realized that I’d be saving a bunch of money by paying upfront, but I was still a little concerned.

When the guy saw that I was interested in paying upfront, he went in for the kill. “Listen sir, I promise that you will get outstanding quality service here. We know that our fees are expensive, but the one year option will definitely make things more affordable.”

I was sold.

Fast forward a few months. The SEO company was a total disaster. They weren’t delivering the results that I had wanted and they were incredibly unresponsive. I was getting angrier and angrier, and demanded my money back. Of course, they refused. After all, there wasn’t a whole lot I could do about it.

It was my own fault. I had overcommitted. I had gotten carried away in the moment, and wrote a large check without knowing all the facts. Had I gone with the monthly plan, I could have cancelled at anytime. This would have motivated them to keep working hard. But by giving them the money upfront, I ended up getting sucked into a major black hole.

This actually brings me the final point: if you’re going to hire people….

Hire On A Contract Basis

Anyone who’s ever had to make a hiring decision knows how hard it is to make the right choice. In a tough economy, every job listing gets hundreds of responses. It’s fairly easy to whittle the list down to a few qualified candidates, but how do you make the right decision? After all, some people might be great during an interview but won’t be the best performers on the job.

The new contract economy provides an effective solution. As the job market gets more competitive, qualified applicants are more willing to accept paid contract work that could potentially lead to full-time employment in the future. By hiring someone as a contractor first, you can quickly and cheaply find out if they fit the needs of your organization.

The contract economy is a boon for cash-strapped startups. Around Silicon Valley, many startups hire new employees on a three-month contract to see what they are capable of accomplishing. After the three month period, the startup and contractor can decide to extend the contract or part ways.

For example, ODesk, a leading internet network of contract employees, actually uses its own technology to hire contractors for technical copywriting, customer support, and server maintenance. This allows ODesk to identify the best people quickly while keeping costs low.

But contract employment isn’t just a win for the employer. By having a chance to evaluate the company while getting paid, the contractor can also see if the job is a good fit. The short-term nature of the contract also allows employees to keep their options open and look for opportunities elsewhere if they realize the job isn’t a good fit.

My own story – A few years back, I accepted a contract role with a startup in the Bay Area. It was a short-term deal with the possibility for full-time employment if things went well. Although I really enjoyed working with the management team, I just wasn’t that passionate about the product. A few months later, one of the senior executives asked me if I would like to join full-time. I said no – I’d thought about it a lot and decided that this just wasn’t the best opportunity for me. We parted ways on good terms.

This was a good decision for both parties – the company hired another contractor (who ended up being a better fit), and I moved onto projects about which I was far more passionate. I had also made some money and some great connections, while providing much-needed business development skills to the company. Overall, a win-win that wouldn’t have been achieved through a full-time hire.

What are some ways that you’ve achieved savings without changing your lifestyle?