Get To The Point

A few weeks ago, I got an angry call from my friend. He was ranting about how he’d wasted 10 hours with this realtor who kept showing him houses that he didn’t like or were outside his price range. After he was done, I asked a simple question:

“Why didn’t you just TELL him the specific things you are looking for?”

His response: Oh! Well, I didn’t want to come off as abrupt. He’d feel embarrassed that he’d been wasting my time.

Seriously? Now, I’m all for respecting people’s feelings, and I definitely think you should be as tactful as possible. But I am amazed at how often something like this happens – people are afraid to get to the point, to ask for exactly what they want, and in the process end up wasting a ton of time and effort.

Getting to the point is especially important when your money is at stake. People who charge by the hour (lawyers, financial consultants, fitness trainers, college counselors…you name it), have an incentive to keep you there as long as possible. Don’t let them drain your wallet! Be clear about exactly what you want and establish upfront how long it will take to get it.

Here are a few tips to help you get to the point sooner:

Set concrete goals ahead of time

Figure out exactly what you want to find out and what you want the other person to know. Establishing these metrics in advance will keep both parties on track. Otherwise, you risk wasting time going in circles.

Impose a time limit.

Meetings and phone calls can go on forever if there aren’t some controls. By keeping things short you force people to focus on the issues that really matter.

One of my former bosses took this technique to a new level: he segmented his clients into different “tiers,” based on profitability, and imposed different time limits for each group. For example, he’d have no time limit for phone calls with top-tier clients, but would limit lower-tier clients to a five minute maximum. This helped him establish priorities and manage his time more effectively.

Be upfront

Don’t be afraid to express where you stand on certain issues. It might come across somewhat direct, but overall the long run it’s good for everyone involved. It helps to spin it in a way that emphasizes your honesty: “Just to preface any discussion, I want to be upfront about these things….”

Did you ever have a situation where you wish you’d gotten to the point sooner? How did you end up resolving it?

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:

Generate More Buzz By Being Vague: The Power Of The “WTF Effect” (Finish)

Have you ever seen something – a book title perhaps, or a name of a new artist, and said “WTF?”

I have. It happens all the time. And guess what? It works.

We are trained to think that clarity is a good thing. But in reality, being vague is what generates initial buzz. Take a look at this title:

Every Monster Has A Big Shadow

WTF?

Exactly. We have no idea what this means, so we want to click through. This is one of Seth Godin’s classic posts: short, to the point, with a killer title.

Notice that there are more than 550 retweets of this post. Vagueness sells.

Here's another good one:

The Art of Letting Bad Things Happen (And Weapons Of Mass Destruction)

This title makes no sense at all. Don't we want to PREVENT bad things from happening? And what do weapons of mass destruction have to do with anything?

I first saw this title in my twitter feed. Naturally, I was curious, so I clicked through. Did you?

Make More Money With A Unique Selling Proposition (Finish)

Struggling to get visitors to your site? New customers to your business? 

Take a moment to assess your Unique Selling Proposition.

A Unique Selling Proposition is what helps you (or your business) stand out in a crowd. It's what makes you unique. It's not about "selling" in the traditional sense –  cold calling or hunting for new business – instead, it's simply a way to differentiate yourself.

And, believe me, it matters. A lot. 

Why Because the Unique Selling Proposition (or USP) helps the customer answer one very specific question:

Why should I buy from you?

Make sense to me. Business is a competitive beast. Every time someone wants to spend a dollar, there are at least a dozen companies trying to figure out how to get a piece of the action. 

If you don't give people a reason to stick around, they'll leave. 

However, being "unique" doesn't mean being the "best." The ideas of best and worst are simply perception. Instead of being the best in absolute terms, focus on how you can be the best in the eyes of the consumer. 

If the consumer believes that you are the best, then you've got the business. Period. 

So how do you figure out your Unique Selling Proposition? Here are a few tips:

Look At Opportunities For Synthesis:

A lot of good business ideas (and brands) come from the combination of two different areas. For example, Google combined a world-class search engine with the emerging world of online advertising. GroupOn took social media and combined it with the concepts of group buying and discount coupons to create a billion dollar business. 

It works on a smaller scale too. Ramit Sethi at I Will Teach You To Be Rich has built a multimillion dollar business by combining the boring topic of personal finance with a witty, example-driven approach targeted at a younger audience. He has successfully cultivated an audience of more than 100,000 people and now is minting money with the Earn1K product. 

Be Specific:

Know your target market. If you know your customers, you can better position yourself to be different. 

As an entrepreneur, this often involves going after a smaller market at first. It's easier to capture a smaller group of targeted customers rather than going after a large market, where bigger players will often eat your lunch before you can even get started. 

Once you've kicked some ass on the smaller scale, you can focus on expansion.

Have A Purpose:

Don't be unique just for the sake of being unique. This is the story behind a lot of the viral YouTube videos. They get millions of hits, lots of instant buzz…and then they fade into the background.

While these videos can be fun, they never produce much revenue or brand recognition (if any). When designing your USP, make sure to understand the message you're trying to convey, and the purpose behind that message.

One of the best examples of this is the "FreeCreditReport.com Ads" that ran a few years back. They featured these catchy jingles (even though they're annoying, they really stick in your head!) but the key was that the lyrics actually focused on why the service was valuable. It wasn't just a gimmick; it was a powerful marketing message. 

Demonstrate Boldness:

Blogs like TechCrunch and Mashable rose really quickly in just a few years, even though they covered fairly broad topics like technology and social media. What made them unique was their willingness to write in a very sharp-tongued way that hadn't been seen as often in mainstream media. Editors Michael Arrington and Peter Cashmore are both known for being incredibly strong personalities, and this comes through in their writing.