Beginners often come to this website looking for ways to create wealth, oftentimes through the stock market. Wealth creation is not easy, and in fact it involves much more than buying the right stocks.
As much as the stock market is a great tool to towards learning how to make your money grow, it can not be our only tool. It doesn’t benefit my own interests to say this, but you can’t get extremely wealthy just by investing in the stock market.
The truth of the matter is that yes, there are the very few who will make their fortune from the market. But they are the outliers. The percentage of wealthy who have actually done this is probably 1% or less. It’s not likely to get wealthy from the stock market alone, you need another way.
That’s what this investor’s guide is all about. I’ll show you ways that I have made my money grow outside of the market, which always leads to more money in the market and better results. Let’s review the 8 important tips for wealth creation– which stand true no matter how wealthy you are.
- Build multiple income streams
- Don’t waste $100,000s in mortgage interest
- Use today’s technology to educate yourself about money
- Learn how to create and keep a budget
- Prevent a major tax liability with these accounts
- Use your investing knowledge to write for extra cash
- Build a business by starting an informational blog
- Learn specific techniques to monetize that blog
Tip #1: Build Multiple Income Streams
To gain substantial traction in the wealth creation process, you must do this:
1. Create a business with unlimited profit potential.
2. Reinvest profits into your business / or save and invest substantially.
The stock market is great, but it won’t make your money grow by much if you don’t have much money to grow. Don’t start looking for doubles and triples in the market for your money, that’s how the sheep get slaughtered.
Instead, work on mastering your skills and income streams.
Especially if you are young. From what my top mentors have been telling me, their advice is mostly the same. Build a business, and build income streams.
Learn enough about the market to know what you’re doing, and then focus on building your income. Don’t waste your time studying the markets for an extra 1 or 2%. In the long run, your income will be the bigger decider of your wealth.
That’s why I’m so focused on this blog. It’s a great additional income stream for me. And as I earn more and more, I continue to plow the money back into the business. It’s made growth even faster, and this compounds exponentially.
And because I’m just a few steps ahead of you, I become the perfect person to teach you how to make your money grow. I haven’t “made it” yet.
I’m in the trenches here with you. I’m able to share about the common struggles we beginners are facing, that the successful gurus in their comfy office chairs have forgotten all about. I’ll tell you what’s working now, and what isn’t.
And I’m practicing what I preach. Cooking my own cooking. Everything I share about on this investor’s guide series is based on my own experiences. I know what’s worked for me and what hasn’t, and I’m happy to spill the beans.
Successful People Know How to Make Your Money Grow
Now this might seem so overwhelming at first. But let me ask you this.
Did Mark Cuban give up and quit when he was living on the floor with 4 friends in a small, cheap apartment? Did Donald Trump decide that bankruptcy was his only fate when it happened to him? Did Steve Jobs quit when he was fired from Apple? Did Warren Buffett decide he wasn’t going to win when he had to make a bed out of dresser drawers for his one year old baby daughter?
The answer is NO.
All of these very successful people had their own problems to deal with. We all have problems. That’s what makes us human.
Yet each and every one of those successful people pushed through their struggles and decided to take matters into their own hands. They knew, they KNEW, that one day they would be successful.
And sometimes that’s all that it takes.
When I look back at different success stories, I tend to observe a common theme. None of these paths to wealth were paved with easiness and roses. Instead there were detours, pains, predators, doubts, fears, and uncertainty.
But this can all be overcome. Millions of inspirational people have done it before us. And millions more can do it in the future.
Tip #2: Save $100,000s in Interest
I want to take you through the life of the American dream today. Let’s start from the beginning.
The human brain is wired to only deal with the obstacles in front of us. It does this for protection. If an infant tried to think about the advanced calculus problems in his or her future, the stress would be overwhelming. The brain would short circuit and just stop. That’s why the brain focuses on what’s just ahead.
And so how does the American dream today play out? As a baby, you focus all your energy on learning to walk. After that, it’s learning to talk. Soon you’re in school, and your main obstacle becomes high school graduation.
Once that hurdle is jumped, what’s next? Then you focus on college graduation. Graduate at any cost (evidenced by the staggering student loan rates).
Next is marriage. Plan, and spend for the dream marriage. Got that out of the way? Don’t stop to rest, you must next get the dream house. It’s the white picket fence and big McMansion, at any cost.
Assuming you are fortunate enough to do all of these things, there’s one last step in the American dream today. The last big obstacle. It’s your net worth. Now you try and increase this at all costs, so that you can live happily ever after in a tropical paradise.
What’s wrong with this process?
Well, as you go through this journey (and it is a rewarding journey), your brain focuses on the next obstacle ahead of you. A high school kid doesn’t worry about his net worth, he must first get through 6th period. Like I said, the brain does this for protection. Or else we’d all be stress cases.
But where most people go wrong is that they let this natural ability of the brain become their weakness. It’s not our fault, it’s how we were wired.
Remember how I mentioned some steps to be at any cost? College is this way for many people, and they wake up with loads of student debt after graduation. It’s like living in the American dream and waking up with a pile of garbage poured on you.
But the resilient American pushes on. After all, we are blessed to be in this country right? An American doesn’t let a little bit of debt slow us down.
But then we fall into that final trap laid for us. One that is much deeper than the student loan trap. It imprisons us for life. Costing us $100,000s of dollars, and we aren’t even aware of it!
The Deceptive American Dream
I’m talking about the 30 year mortgage. No other financial instrument is as destructive to our net worth. I realize this is going to make me very unpopular with many of you. You are already in too deep, as they say. But I can save many others of us, who haven’t fall in yet.
Let’s take the average mortgage in America and compare the 15 and 30 year.
The average home price in the West according to realestateabc.com was $273,500.
Now plug in these numbers into a mortgage calculator. I used www.mortgagecalculator.org. Assuming a 4% interest rate and a 30 year mortgage, the interest amount paid throughout the life of the loan is $183,571. The monthly payments would be $1,590 a month.
Compare that to a 15 year mortgage. The payment balloons to $2,307/ mo, but the interest amount paid throughout the life of the loan is only $85,520.
That’s a difference of almost $100,000!
At the end of a 15 year period, the smart American who paid on a 15 year mortgage would have a paid for house, AND $100,000 more to their net worth! That person now has a 15 year head start on the 30 year victim, with 15 years of no house payments!
What’s sad about this is that is makes too much sense. People need to make it complicated. They don’t want to realize the truth.
Arguments against the 15 Year
I’ve heard every argument in the book against this. Well, they might say, you want the 30 year mortgage because you get to save on taxes. You’re paying more in interest, but that’s ok because it’s tax deductible.
WHAT? That’s absurd.
Do you know what, if you want to think like that I’ll give you a deal. You get 2 options. Either save 25% on $100, but you have to give me all $100, or don’t save 25% but you keep the $100.
Duh, everybody would pick the second deal. But nobody thinks that way when it comes to the mortgage tax deductions. It drives me nuts!
Sure the interest you are paying is tax deductible. But you don’t get to keep it! It goes straight to the bank! I’d rather pay less interest and have to pay taxes on that. You should too.
Ok, that’s all well and fine, you might say. “But really the 30 year mortgage is smarter because the payments are lower, and you lock in that low payment. When inflation hits, you’ll be glad that your payment is lower because you can pay it back with inflated dollars.”
I’ll admit, this is a more valid point. But let’s consider this. Let’s say you went with the 15 year mortgage and you saved yourself $100,000. You are arguing that it isn’t worth saving because inflation is making that money less valuable.
Well I know that inflation has been on average around 3%. So in a 15 year time frame, our dollars are depreciating by 45%. Ok, so where does that leave the 15 year mortgager?
Well he’s still saved $100,000 more than the 30 year mortgager. But inflation has hit. So really he’s only saved $55,000 ($100,000 depreciated at 45%). But that’s still $55,000 more than the 30 year mortgager!! And guess what? The 15 year mortgager doesn’t have any more payments!
So good for the 30 year guy. He has a low payment compared to inflation. But the 15 year is in an even better spot. No payments! Freedom.
There’s also the classic excuse, buy a home to build your equity. Money you’re paying in rent is a waste.
Is it really?
The next time somebody tries to convince you to buy a home because you’re wasting money in rent, think about the $100,000 difference. You could rent for 62 months, which over 5 years, before you’ve “wasted” your $100,000 (assuming a $1590 / mo rent).
So which really makes more sense? Rushing into a 30 year to build equity? Or renting until you’ve saved enough for a 15? I think you know the answer. You just don’t like it.
Aw, but this is still too much. I know you America.
You have one last great excuse.
The Great American Excuse
Oh, but I can’t afford the 15 year payment. Well guess what, that means you can’t afford it! Find a cheaper place, or save more money. It’s really that simple.
You know what happens to the grand American Dream today? I’ll tell you. It starts with good intentions.
The American Dream starts with looking at homes. Then realizing that homes are too expensive. Then realizing that you can’t afford a 15 year mortgage. Then looking at the 30 year mortgage.
Suddenly you’re disappointed. But then everyone is telling you to stop wasting rent money and start building equity (you shouldn’t take money advice from broke people). So you scrap the 15 year plan. You look at the 30 year plan. Then you push your budget.
Finally, you lock yourself into a home that’s slightly over your budget. But it’s ok, the real estate agent said it was a great fit (I mean, it meant more commissions anyway). And then you fast forward 30 years.
Now that your house is paid off, it’s finally time to start looking at your net worth. After all, you want that retirement in paradise, right?
Well all of a sudden you realize that your net worth isn’t as high as it should be. Where did all my hard earned money go, you think. Then you realize that more than half of your mortgage payments went to interest.
Don’t be this person. Don’t be another victim to the deceptive American dream.
These calculations were all done conservatively. It was based on averages across the country. Your reality will probably much higher. These calculations didn’t even consider property taxes, real estate commissions, and other fees. You shouldn’t take this lightly.
Remember. You can save $100,000 with just one decision.
Tip #3: Educate Yourself about Money
Most investing beginners have the same problem. Too many resources, not enough money to access them all. But I have a solution.
Ever look hard at a $100 bill? Do you know whose face is on there? That face is Benjamin Franklin’s, and he is one of the most important men in history.
You might remember him for his discoveries in electricity, involving a kite and lightening. Or, you might remember him as one of the founding fathers, and as the “First American”. You might even remember him as the very successful author of Poor Richard’s Almanack.
But you might not be aware of his humble beginnings.
You see, Franklin had so many accomplishments. It’d take a very, very long email to go through them all. But not many people remember how he became so successful.
Ben grew up in a crowded household with 13 children. He only went to school for 2 years. That’s right, he dropped out of elementary school after 2 years! At just 10 years old, Ben had to work at his dad’s shop. He hated every minute of it.
But he loved books.
After some time as his older brother’s apprentice, and then some work with another editor, Benjamin was finally able to pursue his passions. By 24, he had his own publishing business.
It was then that he fought for a paper currency in Pennsylvania, with his pamphlet called “The Nature and Necessity of a Paper Currency”. He was successful in his efforts, and went on to be successful many more times.
Franklin retired from working at the age of 42, to devote himself to philosophy and science. He amassed a great fortune, and made such an impact in the world.
So how did a man who only went to school for 2 years become so successful?
Benjamin Franklin’s Secret
Let his own words answer that.
“An investment in knowledge pays the best interest.”
And… “The doorstep to the temple of wisdom is a knowledge of our own ignorance.”
See, Benjamin Franklin understood the power of knowledge. He was the ultimate example of self education. Throughout all his early struggles, one thing remained constant. His love for books.
If you want any chance of success, wealth, and happiness, you MUST pursue knowledge. The best way to do this is through books.
I’ve read tons of investing books. I’m glad that I’ve read every single one of them. Each book does more for me than a lifetime of careless mistakes in the stock market would.
But the problem is, books are expensive. Even a book or two a month can really put a strain on a budget, and discourage a beginner. I’ve spent months collecting as much knowledge as I can. Here’s what I’ve learned.
The Secret, Instant Investment Education for Beginners
When you buy a kindle, you can also get free book rentals. All you have to do is sign up for the free trial of Amazon Prime. This thing saves me a lot of money. Amazon Prime is just like Netflix. Plus you get free 2 day shipping on anything from Amazon. Plus the book rental feature.
Technology has made it easier than ever for beginners today. Why aren’t you getting your investment education yet? You deserve to do this for yourself.
Remember… “an investment in knowledge pays the best interest.”
Tip #4: Create and Keep a Budget
You can’t have anything to invest if you haven’t saved correctly. The best way to save is with a budget. This budgeting for beginners post can save you hundreds or thousands of dollars a month, which can turn into much more when put into the stock market.
Many people know that budgeting is smart, but are too lazy to do it. The goal of this budgeting for beginners post is to get you fired up to budget. The best way to do this is through inspiring stories, and so I’ll share about beginners who turned their budgeting into success.
Jason and Sara’s Story
Jason and Sara used to be your average American couple. They were doing good things with their money, had a good credit score, and made all their payments on time.
They just bought a new big screen TV, and a nice dining room table for 3 years of no interest payments. Life and money was good. Or so they thought.
Then Jason lost his job. All of a sudden the family was struggling to make ends meet, and were faced with living paycheck to paycheck.
It was then that Jason stumbled on Dave Ramsey’s podcast, where he was introduced to the budget. That budget helped Jason and Sara break out of the vicious cycle of debt and become debt free. You can watch their debt free scream here.
The couple fondly talks about their experiences now. They are stronger than ever in their relationship, with a new sense of trust and security. And they are well on their way to wealth, with no more payments slowing them down.
A little sacrifice in the short term changed their life forever. They went from careless spending to a strict budget. Now they are free from the burden of debt. Their wealth building opportunities at such a young age are tremendous.
What’s great about this budgeting for beginners story is that anyone can achieve it. Debt is a vicious enemy, but can be beat by tactically using a budget.
Still doubting? I have one more story for you.
Inspiring Redemption Story
People love stories of failure. We love to hear about successful actors or musicians who are ruining their lives. Americans are especially guilty of this. Look no further than the tabloids of Justin Beiber and Miley Cyrus.
But America also loves the failure to success story. The redemption story. It’s entertaining. Inspiring.
Meet Dave Ramsey. He was originally a real estate investor who built a portfolio of $2 million. But there was a problem.
He had too much debt.
Eventually his finances couldn’t take the pressure of all that leverage. Dave, young, married, and with kids, was forced to go bankrupt.
What’s fascinating is that his story doesn’t end there. Dave took these lessons on the chin, and took them to heart. He continued with the finance path, but took a different approach.
Understanding that bankruptcy is the worst financial place to be in, Dave waged a war against his number 1 enemy, debt.
Dave started coaching others about finances and avoiding debt. He had nothing, but built this business on his card table. He taught budgeting for beginners and veterans alike.
Fast forward over 20 years later, and Dave Ramsey is one of the most influential personal finance coaches. He’s helped millions of listeners attack debt and become debt free.
Dave has helped me kick a ton of debt and free up hundreds of dollars in my budget every month.
I want you to do the same. All you have to do is budget.
Before you get scared of the b word, just bear with me for a minute. If you want to improve something, you must measure it. When you try to lose weight what do you do? You weigh yourself, and track it. This keeps you on pace to reach your goals, by giving you instant feedback.
You MUST do this with money too. A budget isn’t rocket science. Just track your expenses.
Open up an Excel sheet. Write down all the expected expenses for the next month. If you don’t have them all yet, don’t worry about it. Then dedicate a night every week to review your budget. I do it on Mondays. It helps me jump start my week.
Every budget night, input all the expenses you had throughout the week. As you do this week in and week out, you will get a rhythm. This one trick will stop you from living paycheck to paycheck. I don’t know a single tip that can get you faster results than this.
By cutting the waste from your budget, you will feel like you are digging up money every month. The budget recovers lost money and puts it back in your pocket.
For those of you who want an easy, all inclusive solution… Pick up the #1 best selling, Money Management software program Quicken.
Saving is an important part of investing. Make it a priority.
Tip #5: Avoid Taxes with IRAs
Investors unknowingly throw away hundreds of thousands of dollars in their lifetime. It’s hard enough to make money in the market, but now we also have to deal with the tax consequences that come with this.
In fact, you can absolutely eliminate the tax consequences that come with investing. While I can’t save you from the income tax, I can save you from the capital gains taxes, which many investors face unknowingly.
If you use an individual broker account to buy and sell stocks, chances are you are losing thousands of dollars over your lifetime. Though you might not be aware of it, the tax man could be taking from you twice.
The smart and wealthy know how detrimental the tax man is to riches. In a country with a government as big as America, taxes have their grip in all areas of life.
You can’t be building wealth if someone if always taking from you. The tax man is always taking from you, especially whenever you are making more money.
In the investing world, we know of these taxes as capital gains. There are two types of capital gains taxes: short term capital gains and long term capital gains.
Short term capital gains are applied to any stock investment that is sold after being held for less than a year. The goal of this tax is to limit day trading, but the smart traders and investors know how to work around this tax. The implications of this tax are substantial; the gains are taxed at your income tax rate.
Long term capital gains are for any stocks that are held for a year or greater. But even this tax can do a lot to hinder the growth of your capital. Long term capital gains are taxed depending on your tax bracket, anywhere from 0% – 20%. Yet even this tax can be intelligently avoided.
A typical investment portfolio can easily contain 6 to 7 figures throughout the lifetime of the investor. With these kinds of amounts, a tax can easily take away thousands to tens of thousands of dollars.
Learning to avoid these taxes can make a big difference to your net worth.
There’s a simple way to avoid the capital gains taxes if you trade with an individual broker account. Here’s how.
When you buy a stock in a broker account, you have already been taxed. The money you deposit into the account has already been taxed through federal and state income taxes. When you sell this stock, you will be taxed again; whether it’s a short term capital gains or a long term capital gains tax.
But you can avoid being taxed twice by using tax advantaged accounts.
Tax Advantaged Accounts: 401ks and IRAs
An IRA has two types: traditional and Roth. Both accounts will save you a layer of tax. Instead of being taxed twice, you will only be taxed once.
A traditional IRA is tax deferred. That means the money you put into to it is not taxed, it avoids federal income tax. Instead, the money is taxed when you withdraw. Any capital gains taxes that were accrued during this time don’t have to be paid.
The Roth IRA works differently. The money deposited into a Roth IRA is taxed for federal income, but then avoids any tax thereafter. As in the case with the traditional IRA, capital gains taxes are avoided.
The Roth IRA helps you compound your money tax-free. This is a huge advantage for investors.
Over a lifetime, this can add to savings of thousands of dollars. The 401k accounts work the same as the IRAs, coming with the option to be traditional or Roth.
However, most 401ks don’t come with the flexibility of an IRA. With an IRA, you can buy individual stocks and bonds. With most 401ks, you have to choose between a predetermined selection of mutual or index funds. Depending on the skill of the investor, this could be a disadvantage.
While I’m not a tax professional and can’t legally give my readers individual advice, I do think you should take advantage of the 401k as much as you can. What I like to do is maximize my 401k match, and then put the rest into a Roth IRA. If there’s any left over after that, then I’d increase my 401k contributions.
What this does is allow me to capitalize on the free money from an employer, and also obtain the flexibility and chance for higher returns in the Roth IRA. This money will also compound faster being in a Roth account.
If employers give you the option of a Roth 401k , take advantage of it. As long as you are confident that your tax bracket will be higher when you retire than where you are right now, then it makes sense to go with a Roth.
Roth vs. Traditional Account
Still confused on which to choose?
The question comes down to whether your future income (investment income, social security, etc.) will be in a higher tax bracket than your current income and tax bracket.
If your future income will be higher, go Roth. If not, get a traditional.
Keep in mind that there are annual limits to how much you can fund an IRA. For single taxpayers, the limit is $5,500 a year. If you are over 50 years old, the limit is $6,500. There are also limits depending on your income. If you make more than $191,000 a year you aren’t eligible to use a Roth IRA.
You should be trying to max out your IRA as much as possible. The tax savings are incredible, as is your potential for wealth.
A Great Difference in Tax
Consider this example of two investors with similar income and age. They both make $50,000 and are 25 years old.
One investor, Bob, invests in a Roth IRA. The other investor, Jerry, just invests in a regular broker account. Assuming they both make annual returns of 10%, how much would each have at age 65?
According to 2014 capital gains law, Jerry’s long term capital gains would be taxed at 15%. Jerry would make $2,434, 221.75 from his investments. But he would lose at the very least $365,133.26 to taxes (assuming 1 sell order).
Bob would make $2,343,221.75 and be able to keep it all.
Obviously the tax consequences can be substantial. But you can easily avoid it by opening an IRA. I use the company Tradeking as my broker and they have been great.
$4.95 stock trades; Customer Service ranked #1
No IRA account minimum. Member FINRA and SIPC.
Don’t let the tax man take what you’ve rightfully earned.
Tip #6: Write for Investing Websites
You must understand that being a good investor is only part of the equation to becoming wealthy. No matter how good you are, you have to have money to invest. A great investor with a small income will be much poorer than an average investor with a great income.
But first, let me tell you about deposit I received in my checking account in 2014. It was a little over $200.
I made this money by writing just 5 articles. Averaged out, that’s $40 an article. Now it took me about 1 – 2 hours to write each article. So in the end, I made anywhere from $20 – $40 an hour.
That’s a great hourly rate, but the best part is… anyone can do it.
Where else do you know being able to get $20 – $40 an hour without an expensive 4 year college degree? If you are reading this site, you are already interested in investing. Why not gain a basic understanding of the stock market, and then get paid to write about it?
I only share this because I was successful with it. People say I’m a good writer, but I really think anyone can write about something they are passionate about. And the whole process wasn’t as complicated as people think.
By the time I had written and submitted my first article, I had been studying the markets for less than a year. Yes, I did invest some time in reading some books… but it was a much lesser investment than a college degree would be.
This is just one of the many examples of opportunities out there for you right now. The problem is, people aren’t taking advantage of them. Why? Laziness.
You have to understand that I didn’t go to school for finance. Nobody appointed me as the “chosen one” to share my knowledge about investing. I’m not super wealthy, or have vast Wall Street connections. I’m just another guy who loves the markets.
How to Do it
This is how to write for investing websites, and get paid to do it.
The investing website I’ve written for is called SeekingAlpha.com. They accept almost anyone as a contributor. And you get paid $0.01 per page view.
This doesn’t sound like a lot, but you have to understand that they get millions of views a month. Your article gets emailed to hundreds of thousands of people. They market the content for you.
This is a great deal for people, while it’s still out there.
If you want to see some article examples, you can look at the articles I’ve written here: Value Trap Blog.
Like I said I want you to succeed. To succeed you need to increase the amount of money you have. This is one way to do it, from anywhere with an internet connection.
Contrary to popular belief, these are exciting times with endless possibilities for the ambitious to succeed. Anyone can become wealthy, especially you.
Don’t let anything stop you.
Tip #7: Build an Informational Blog
We live in a unique time in history. Never before has commerce been so fast, and so accessible. The internet has really changed it all for us. New fortunes have been made at the speed of light. Never has intellectual property been so valuable.
Pat Flynn is a breathing example of this. He was just an average guy living in Southern California. Pat was an architect, and an ambitious one at that. He wanted to move up the ranks, so he enrolled in the accredited LEED exam.
As he was studying for the test, he set up a blog to organize his notes. After months of studying, he passed the test and was promptly promoted. Then the unexpected happened.
The economy crashed. Pat was laid off.
It didn’t matter that Pat was a top worker for his firm. They couldn’t afford to keep him. But he used this adversity to his advantage. You see, Pat was getting thousands of views a day on his blog. So he put a study guide ebook on the site, and charged for it.
The results were astounding. He made $8,000 that first month. Pat never had to go back to his architect job ever again. Now he makes over $50,000 a month with his various blogs.
What does this mean to us?
This never would’ve been possible in the years before the internet. Like it or not, people are making money on the internet.
The Power of Blogs
I want to tell you that this opens up opportunities you may have never considered.
Like being able to write articles online, and getting paid handsomely for it. Or, you can even start a blog like Pat did… and maybe make money from it too.
You see, the point of my blog is to share my experience with you. Though I might not have much more experience than you in investing, I have just enough to know how to get beginners through the obstacles of getting started. Instead of learning from an “expert”, sometimes it’s better to learn from someone who’s a little more passionate or experienced than you.
That’s what makes blogs so powerful. It gives us the possibility to connect with each other, even though you may be thousands of miles away from me. We don’t even have to be in the same time frame! I’m writing this in April 2014, and you might be reading this much, much later.
Can you see the power? Though the world is full of competition, the internet is still very much like the wild, wild west. In those times, the cowboys who dared to venture into the unknown were handsomely paid with riches.
Or take the gold rush, where miners and explorers built vast fortunes based on their willingness to work and explore places full of danger and mystery.
Those time periods lasted many decades. If you look at the age of the internet, we’re still spank in the middle of its emergence. Blogs didn’t get popular until 2001, even mainstream until 2004.
Truth is, there is still a ton of opportunity to carve a passion into profits. Look at my blog for example. In just 13 months, I’ve gone from 0 views to 73,000 views and counting. I took on one of the most competitive sectors of the blog space, finance, and managed to create for myself a steady income stream. I could leave it alone and still receive this income, like a nice dividend!
The secret behind my success was that I picked a KEYWORD that was relatively low competition, and then blogged consistently. I’ll show you exactly how to find a low competition keyword in a second, but first more on why it’s possible for you.
Everybody has one income stream: your job, and that pays for bills, rent, furniture, food, etc. No matter how disciplined of a saver you are, chances are you aren’t saving enough to be wealthy.
You might be thinking that me sharing this with you is counter intuitive. I’m sharing that you can’t get rich from the markets alone, and by doing this I’m hurting the profitability of my blog. Actually you’re right. It’s not smart for me to share this. But it’s the right thing to do.
A lot of people jump into the stock market hoping to be a millionaire when they are done. They may take some unnecessary risks, or get impatient and really push all their chips into a stock they shouldn’t. Don’t get me wrong, the stock market is a great place to make some money, but it won’t make you wealthy. You need to create wealth first, and then let the stock market grow that wealth.
So what should you do instead? And why take my word for it?
Wealth Creation Advice from a Rich Guy
Well don’t. Take Porter Stansberry’s advice. Porter is a financial newsletter writer, who built his publishing company into a flourishing business employing over 50 people. He’s obviously very wealthy, and is an expert on the markets. His advice for people wanting to get rich?
1. Get rid of all your debt. Debt is the #1 obstacle to your wealth.
2. Save 50% of your income. Translation: Live way below your means.
3. Start a side business, or find a job with unlimited earning potential (i.e. commission based).
I know the 50% is a bit extreme. I can’t even do that yet. But take notice of his advice. This is a guy who makes a living by telling people which stocks to buy. He’s a multimillionaire, and he’s telling you to start a business if you want to be wealthy. The market alone isn’t enough!
Notice what people do, more than what they say. Look, I’m someone who knows way more about the markets than most people do. I’ve gobbled up every investing book I can find, and listen to more podcasts than a sane person should. I live and breathe investing. I’m obsessed.
But a majority of my own time is spent building my business. Writing on this website. Talking to my customers (you). I now understand that the path to wealth depends on my income streams.
And now I’m trying to get that through to you.
The stock market is a fantastic place to put your money. It’s a great way to build wealth. But if you want to be wealthy, you need to look further than the markets.
Building an Income Stream with Blogging
A great way to build a business is by starting a blog. Even if you have grand ideas for a business, a blog is a better way to start. Why? Well, every business needs capital.
Unless you have a ton of money saved, you need to build something that will create some extra income. Even if that income is small, it can give you additional saving power that you can leverage into a bigger business idea.
Starting a blog is the best low-cost way to build an income stream in the 21st century. This is because all that it requires is time, and this is something we all have. No matter how poor you are, you can build a successful business just by putting in the time.
As more and more people are moving their buying habits to online, the possibilities of making money from online blogging are growing even faster. Look at my own personal earnings from my investing blog.
October 2013 – $10.37
November 2013 – $104.23
December 2013 – $18.74
January 2014 – $66.11
February 2014 – $212.10
March 2014 – $93.84
April 2014 – $532.50 and counting…
In just 13 months I’ve built a solid income stream. In that time I’ve taught myself the skills to build this consistent income stream. Meaning, I’ll continue building it and I’ll build more of them. These streams will compound until the amounts really kick my wealth building into overdrive.
You might be thinking, “well that isn’t much money at all, who cares?”. Ok, well lets assume my income stream stops growing and compounding (highly unlikely, but I’ll play). The total amount is $1,037.89 a year of extra income, which comes out to $86.49 a month. If I were to invest just that much for 40 years (until I retire, with 10% average returns), I’d have $505,294.03.
Again that’s just if I stop blogging completely and stop trying to grow the income streams. That “little” extra money would be a nice addition to my life, and it’s not even counting my “real” retirement. This is all after just 13 months of blogging! If I did it, why can’t you?
While the example above is extremely conservative, you should know that I won’t be letting my income growth die. In fact I’m just getting started.
These extra earnings, while small now, are all being plowed back into my business. I’m now able to afford equipment and tools that can help grow my business even further, which will result in MORE income.
But you see I had to start somewhere. For most of America, we don’t have savings. So how can we even fathom starting a business? This is why I started on my income stream with an investing blog, and why I encourage you to. It takes time and work, but it can open up some nice possibilities.
The money might not seem like much at first, but that brings me to my next point.
The Biggest Blogging Mistake
If you really want to get to the facts behind blogs, you’ll see most of them fail. So many in fact, that it’s in the 90% – 99% range. People just get the wrong ideas behind what a blog should be, and quit too soon.
The biggest reason behind people quitting blogs is getting frustrated. Making money with blogs and making money with investing are so similar, in that you probably won’t see meaningful results overnight. It takes time, and lots of it.
But the reason why people get so frustrated is that they set their sights way too high. You can do a quick Google search and find some blogging guru who makes hundreds of thousands of dollars a month with their blog. They have some cool tips and some feel good stories, and they make it sound so easy. On the surface it looks so easy.
And so people assume they can get there too. But these same people don’t realize that the blogging guru has put in hundreds of thousands of hours to get where they are now. They likely started years or even a decade ago. In fact, they are so far along in their success journey that they likely forget how they got there themselves!
Before you can take over the world, you need to conquer just one area. Before you can run a marathon, you must take just one step. Before you can influence 1 million people, you need to influence just 1 person. And before you build a business that makes $1 billion, you need to make just $1.
It’s simple yet people forget it all the time. It applies to every area of life. The Olympian who you see swaying through the ice with such ease has practiced her moves for thousands of hours. Before she became a champion, she first had to learn to skate.
Nobody becomes a success overnight. Nobody becomes wealthy overnight. Each person’s journey is actually a series of steps, one step after another. One brick after another.
The great Wall of China wasn’t built in one day. It was built brick-by-brick. The great Roman Empire didn’t rise up overnight. It didn’t fall overnight. Each great thing was a daily struggle; it was monotonous, boring, hard, taxing.
You don’t hear about these parts. You only hear the grand finish. You only see the gold medal performance.
When you watch Mark Cuban on TV, you only hear about his most recent successes. And fantastic they are. But you don’t hear about the Mark Cuban who lived on the floor with 6 friends at 25. You don’t hear about the Mark Cuban who read through every single PC manual front to back. You don’t hear about the Mark Cuban who sold his product person to person, day after day.
The big mistake with blogs is that people are looking too big. You need to look smaller. Earn just one dollar. Earn just one customer. Write just one post.
These habits, if you can create them and enforce them, can eventually create success. In the course of my 13 months, I’ve written over 125 investing blog posts. Was there ever one that I wrote and then looked tomorrow and saw it an instant winner? Nope.
My success thus far comes from keeping my dreams small. I have big dreams. I’ll dream about my millions, about how my next idea will make me riches, and how I’ll be enjoying my caviar on a boat.
But the difference between me and you is that I don’t stop there. I process the dream, store it away, and then translate it into something actionable. The dream transforms into a goal, just one step ahead.
Then I accomplish it, put my head on the pillow and do the same thing tomorrow. It’s monotonous, boring, and repetitive. In fact, most people aren’t impressed. But I don’t care. I see the vision ahead.
I understand that my business needs to be built from the bottom up. Then I put my head down and keeping working at it. Chipping away like a great artist on a sculpture.
The artist never looks at one chip and thinks his job is done. He doesn’t make several chips and then look back at his glory. The artist chips and chips and chips, until one day he has his masterpiece.
I’m working to do this. I think you can too.
How to Create an Investing Blog
First understand that you can blog about anything. Any topic that interests you can eventually be profitable, because if you are interested in it that means there are others as well. Once you have interest in your blog, finding ways to monetize it isn’t that hard.
But why would people want to read your blog? Easy. Because you are you. Every single person in this world is unique and different.
That means each person has something interesting to add to any topic or niche. By building a blog you get an opportunity to share your personality with the world, and this will create followers and fans.
Ok so now you want to start a blog. But where do you even start? Let me show you now. It’s a lot easier than most people realize.
The first thing to worry about is cost. While unfortunately we can’t escape it, we can limit your overhead.
1. Get a Domain and Hosting
All you need to do is get a domain name, and hosting. A domain name is usually around $10, and hosting around $7 – $10 / month. So for an initial investment of $105, you can run a blog for a year. That’s what I did initially with Bluehost. Try it out and see if you can’t get profitable after a year. I bet you can.
Before I rush you off to get a domain name, let me help you pick one. Your domain name, or the .com where your blog will reside, will have a lot to do with how you rank in Google.
In fact, it’s one of the most critical elements of your Google ranking. You can get loads of traffic just from having a great ranking in Google, and here’s how.
Google will automatically rank websites higher than have certain KEYWORDS in them. Remember how I mentioned keywords earlier? So, what you are going to want to do is pick a domain name that has good keywords in them.
Take my website for example. I wanted to target the “investing for beginners” keyword, and so I made my domain name eINVESTINGFORBEGINNERS.com. I knew that “investing for beginners” had a lot of monthly searches (4,400), and so it would be a good keyword to target.
I rank anywhere from #8 – #13 with just this keyword alone, and I get a lot of traffic from other variations of this keyword. Just by making content in this category, I tend to rank highly.
I have several posts that rank #1 in Google, which use the “investing” keyword in them. These are fantastic sources of traffic, and it’s totally possible for you to find your own keywords as well. I can’t answer that for you, but I can help you find them.
There’s 2 ways to find good keywords, and find how often they are being searched. The first method is a tool made by Google themselves, called Keyword Planner. With this tool, you can type in a keyword and see how many searches there are for it each month. It also includes “competition”, but ignore this for now because it is only relevant for advertisers.
You’re gonna want a domain name keyword that has a lot of traffic with it, shoot for at least 500 or 1,000 monthly searches, and relatively low competition.
2. Keyword Research
That brings me to the next tool, and this is a tool that helps you figure out which keywords you have the best chance at ranking for. The tool is called Market Samurai, and you can bypass paying for it by trying out their free trial.
This tool helped me pick einvestingforbeginners.com, and I believe it made the difference between me failing and having success.
Here’s some quick tips on how to use Market Samurai. First create a new project and then enter a keyword you’d like to check competitiveness for. Click on the “Keyword Research” module. Once there, click “Generate Keywords”. Now you’ll get a whole list of possible keywords to use for your domain. Click “Analyze Keywords”.
Now I’ll show you how to filter these keywords. Click on the PBR +, and type minimum 15. This will keep keywords relevant. Set SEOT to minimum 0. For SEOC, set the maximum to 30,000. This limits keywords to those with much lower competition. Finally, click the SEOV toggle.
With these options you can select the best keyword with the least competition. Basically you want a keyword with the most SEOV, while at the same time having the least SEOC. By doing this, you are finding a keyword with the most traffic and the least competition. It’s how I’ve ranked my website, and how you can too.
Don’t worry about all the complicated acronyms. Just follow the instructions if you want to discover the most profitable keywords.
Once you’ve done that, your market research is done and it’s time to start writing.
3. Use WordPress to Post
You can buy your domain name through this link. Once there, they will show you how to add hosting. After paying, you can set up your investing blog in a few clicks.
On the Bluehost main page, you can click the WordPress Install to install a blog to your domain. Change the URL to the homepage of your domain (i.e. einvestingforbeginners.com). They will then ask you to create a username and password, and after that voila! You have a website!
It’s simple to start writing, all you have to do is click “add post” to add a blog post to your website. There’s also free designs that come as a complete package, which you can select through “Themes”. The technical know-how for all this is really minimal!
I really encourage you to give this a try. It’s worked wonders for me, and it’s turned me from a wantrepreneur into an entrepreneur. Who knew I’d be making a 4 digit income from the internet?
Trust me, if I could do it anyone could. I see a whole range of possibilities in the internet world, and you have the chance to create a part of history from it.
Remember how the United States had a land grab rush? Well the same thing is happening in the internet, whether you participate or not. Grab your piece, stake your ground, and build your castle of wealth. One brick at a time.
Tip #8: Monetize Your Blog
There are many ways to monetize a blog, whether you look at paid advertising, Google Adwords, selling a product, and more. The problem with many of these methods is that they are either inefficient or time or money intensive.
Take selling a product for example. Do you really want to spend time delivering the product, doubling as a customer service rep, and ironing out the kinks of a product? Shouldn’t there be a better way to make money with your blog other than building a whole start-up?
You can try the paid advertising route, but that’s not going to help you unless you have a massive flow of customers. I even tried paid advertising for a little bit with my blog, and in a month where I had 10,000 unique visitors I only earned $1.13. Not what I’m looking for.
No, we want a process that will allow us to sell a product, without having to deal with the customer. We want to be affiliates.
Affiliate income is unique in that it allows you credit of a sale, without you worrying about any of the customer service or delivery.
In effect you are basically getting a commission for each product you sell. Depending on the company and product, you can get anywhere from 4% – 50% or greater. The cool thing is that we can take customers who are already interested and convert them into the sale, and get paid to do so.
One company who accepts anyone as an affiliate is Amazon. A majority of my affiliate income comes from Amazon, and what’s cool about them is that you get a commission on anything the customer purchases from them (in the next 24 hours).
So if the customer clicks on the affiliate link on your website and buys a small ticket item, then decides to add a larger ticket item on the order, you get commission for ALL of it.
That adds up quickly. The best part is that people know and trust Amazon. More and more people are switching to Amazon away from the brick and mortar retailers. It’s just more convenient. You and I can capitalize from this trend.
Once you sign up as an Amazon Affiliate, you’ll want to pick which products to promote. It should be obvious based on the niche you’ve selected. A quick search on Amazon with your keyword can be a nice way to get some ideas.
Now we need to get people to click on your links. Just throwing some links on your blog can be a good way to start, but there’s a better way. Don’t you want a way to keep track of your most engaged fans, and have a way to contact them at all times? After all, these fans are the key to your monetary success.
Get Clicks for Your Links
The best way to do this is by setting up an email newsletter. The saying goes, “the money is in the list.” And it’s true. A newsletter list will always be owned by you, no matter what happens to Google, Facebook, or Twitter. Your newsletter list is like cold, hard cash. And you can turn it into cold, hard cash too.
Something you’re going to want to do from the start is set up a way to collect emails for your newsletter. I use a plugin called OptinMonster, which automatically puts a form at the end of every single one of my posts. You can also find some free op-tin boxes in the Widgets page, which you can put in your sidebar.
But I’ve used OptinMonster and seen my conversions more than double, which translates into more subscribers and thus more money into my pocket. In my opinion, it’s a solid investment and it has worked well for me.
Not only do you need to collect emails, but you need an incentive your readers into signing up. Even if you have spectacular content, most of your readers won’t think to subscribe to you unless you have a bribe or a gift for signing up.
This can be as simple as a free report, or short ebook. You are writing blog posts already, why not package your 3 or 4 best posts and combine them into an ebook?
I did this with my website, and added some bonus content for the ebook alone. All in all, it only took me several additional hours, but that has paid off into more and more subscribers today.
It’s pretty simple to create an ebook or report, all you have to do is fire up Microsoft Word and play around with the formatting. Add some pictures and a title page, and your ebook or report will look very professional. You can use a site like fiverr.com to get an ebook cover designed to look like mine for just $5. My artist was gadsavage, and he did good work for me.
Ok, you’ve got the affiliate thing down, and maybe you have an idea for an ebook. But first, you need to sign up for a newsletter service provider like Aweber.
Using a Newsletter Provider
There’s two ways to use a newsletter service provider like Aweber. The first way is through a blast email, which sends an email to all the subscribers in your newsletter at once. This can be a great way to share an announcement, or share about a special deal or sale.
The second way to use a newsletter service provider is through what is called an auto-responder. The auto-responder is where the money is. Gary Vee is a perfect example.
Gary Vee (or Vaynerchuk) is a wildly successful entrepreneur and author. As a teenager, Gary turned his father’s wine business from a $2 million earner into a $20 million earner, all in just a couple years.
Then he took his talents to Youtube. Creating a channel that reviewed wines, Gary built his following into a massively successful business that launched him into the millionaire he is today. Now he’s on to bigger and better things, with the New York Times Bestseller list now under his belt too.
What’s the secret behind his success? Gary calls it jab, jab, jab, right hook. What he means by this is that you can’t be selling all the time. Customers catch on to this quickly, and they’ll stop paying attention to you if you keep doing it. So instead, Gary stresses that you must provide valuable content to your readers, which he calls a jab.
So instead of bombarding customers with sales asks (or hooks), Gary simply jabs for a while and then throws a right hook. The hook is so infrequent that the customer doesn’t even know you threw it!
Setting Up an Autoresponder
It’s by using this strategy with an auto-responder that you can attain the best results. If you look at my earnings numbers from tip #7, you’ll see my earnings jumped in April 2014. This is when I started using this strategy, and it’s worked wonders for me.
You see, you simply set up an auto-responder that revolves around the products you are trying to sell. An auto-responder is just a series of emails that gets automatically delivered to your customers after they subscribe. Once your auto-responder is set up, you can sit back and relax as the newsletter service does all the work for you!
Customers who sign up for your newsletter years from now can be making you sales from automated emails that you wrote months ago! It’s just that simple.
I’m using this technique and it’s been phenomenal for my business. Each and every new subscriber receives this auto-responder, so I’m constantly getting new sources of income.
Since the auto-responder is automatic, I’m free to focus my energy on writing more blog posts and attracting more customers. The growth from here on out just becomes exponential! I hope you can see the allure of this. An auto-responder and email list gives your business a unique advantage over most every other business, and that the ability to scale.
Your time and effort can be leveraged and scaled to appease the masses. You could be doing the same amount of work, but be affecting hundreds to millions more. As you affect more people, your income will grow by the same fashion.
The opportunities behind this are tremendous. The world’s population continues to wildly grow, and so do our profit opportunities with it.
You can build an income stream. A blog is all it takes. I’ve done it, and I’m saying you can too. One income stream will turn into 2, then 5, 10, 100… In time you can have the freedom you desire. A world that doesn’t depend on money can be a powerful world. Make it yours.
I hope even one of these tips have landed home for you to help in your wealth creation journey. As I’ve gone back and updated this post, I’ve been told by several people that these posts helped them start their own investing blog.
It’s great to see that not only am I helping people get results in the stock market, but I’m also helping them create income streams outside of the market. If I can do it, and they can do it, so can you.