Investing For Income v Your Attitude to Risk
The great thing about advice is that you don’t have to take it. If you respect the person giving it and trust their judgement – which you should or you’re asking the wrong person – it’s definitely worth doing. Whether you decide to act on that advice or not is then up to you.
I prefer to ask people their opinions rather than advice and I had a chat with a friend about this today. What we were discussing was investing for income and our attitudes to risk - something that really has to change when you transition from employment to self-employment. My friend has built some pretty big businesses in his time with as he describes – a do or die approach to risk – so he’s a good guy to discuss this with.
Here’s the scenario – maybe you can relate. In order to take my own business to the next level – and then the next, is going to mean cracking into the savings. My instincts, which are admittedly born from an employee mentality, have been until recently, to build a wall around those savings and save them for that “rainy day” in case it all goes pear shaped. Investing for income can seem like a scary proposition when you look at it from that angle.
Investing For Income Is An Essential Mindset You Need To Acquire
The problem with looking at money from that angle is that all businesses – online included believe it or not – need funds to get started and on an ongoing basis to keep running: Advertising, software systems, plugins etc are all forms of investing for income in an online business. Money sat in the bank therefore is pretty much useless when it could be working for you.
It’s a case of turning the savings attitude to money on its head really. Spending it on calculated or operational risks should be looked at as an investment in the business rather than as a shrinking of the rainy day pot. If we’re talking about advertising spend for example and we know the conversion rates of a given funnel and have properly tested the ads then the risk is way less scary. A bit like spending £1000 to generate £5000.
Calculatied Risks When Investing For Income
As my friend mentioned today, many people have little or no savings these days. It’s frequently reported that most people in the US for example would not be able to support themselves for more than 2 weeks if they lost their income source.
Looking at it that way puts things into perspective: If you are lucky enough to have some savings and some income that basically makes those savings available for investment then it’s probably stupid not to – if you know what you’re doing.
This is one of the things that makes the SFM business model so attractive as an online affiliate business. The marketing materials and sales funnels have been tested to the extent that the system is not easily broken. A huge amount of testing goes into even the smallest of changes so a lot of risk analysis is done on an ongoing basis.
This means that SFM business advisors can produce a business plan and projection based on the income you want to generate and the advertising budget you have available. Whilst no projection can ever be completely accurate, the way these guys do their homework and ongoing meticulous testing makes it pretty close. Certainly close enough to make venturing your savings as an investment for income way less scary.