Back in the day, I use to think that if I could do something, I should not outsource it.
Today, I changed my perspective of this and a lot of other things that require spending money. I preach minimalism (to a certain extent) but I do spend money that makes me more money.
To start off, let me provide an analogy that will serve as a great reference for the rest of the post. Imagine you have a blog where you sell your products. Imagine yourself buying traffic (the source is not relevant) for $500, but increasing your sales by $1000. Would it make sense? Yes! You’d buy traffic! Or if you had a book, would you give me 50c per copy I could sell, if you could profit $4 per copy? I would! Absolutely!
So, the bottom line is that paying for traffic can be good.
Avoiding spending money at all cost is not necessarily a good idea. In fact, to earn any money, you should spend or invest. To have your current salary, you must have spent a lot of money on college tuition, or workshops or even working for somebody for free, just so you could learn.
These are all forms to spend money in order to earn more…
Now, I want to talk about a few examples that I’ve personally been through lately, which serve well in explaining why spending is important to earn more.
Things I spent money on, only to make more of it…
Facebook ads for my Real Estate Business
As I said before, I use Facebook to advertise my homes. (LINK MISSING) I put a Facebook page together, and I promote my homes through that page. It saved me tons of fees over the years (if Facebook doesn’t work for you, try to go with Craigs list). Combined, I have about 2500 likes on my pages (I have one per city if you wonder why I am using the plural). Recently, I decided to allocate 100 bucks to Facebook adds, to grow my pages. What is the result? I am not sure, but if I manage to bring 500 new likes to my page, we’re looking to 500 new prospective tenants. This will probably translate into fewer vacancies and more money in my pocket.
Paid traffic to my book
I used some paid traffic to my book, which naturally increased sales. In particular, I made a net profit on the transaction. I am sure there is a breakpoint where further traffic won’t result in further gains, but this proves my point. Quite honestly, I am not focused on increasing sales on my book right now, but I think that I will progressively get some income from books and I will have to specialize in book marketing and driving traffic to them. I already smell further investment on my blog, and as I know that I will only put money in if I smell a return on my investment, I think this is great news!
Money I spent on my blog
My blog itself has been a great investment so far. To this day, I’ve pulled out more than $3k from it, and I expect to make $15k this year. I have spent some money to set it up, as well as some money down the road, to improve it.
I have seen cases of multiple bloggers who grew their blog to a multi-million dollar business. To do that, they invested a lot of money, yes, but they did well. Very well, actually! Now, how many blogs or big websites you can find out there, which have never invested a single dime into it.
My consultancy business
My consultancy business has been another great investment, that I was only able to set up and scale due to the amount of money that I invested. In December 2016 I made $355, in April I made a little more than $1000 and I have turned down a lot of work due to lack of time. I think that, with the right strategy and time investment, I could break the $5000/mo mark. Either way, this was only possible because I hired people and did a course to scale my site. And guess what… later this year, I will assess my professional situation and keep investing in growing my blog and attracting more consultancy contracts. I will keep providing regular ￼monthly income reports, as always. 😉
BTW, want to have a few sessions on personal finance or investing in Real Estate in Portugal? Shoot me a message!
Risk and fear…
Most people do not spend money because they are not tolerant to risk… they fear losing it (or in other words not extracting a positive ROI from it). The thing is that most people do not stop to assess how intelligent investing money can be. Or, in my view, how limited you are if you don’t invest money.
This actually reminds me of leverage, and how people are afraid of borrowing money. Leverage doesn’t mean that you need to invest, but it means that you need to use something that doesn’t belong to you. From my experience, when people fear borrowing money to invest, they also fear to invest money in general. They usually don’t accept that we need to invest to earn.
I don’t blame them. I was at that point myself!
The first time I got into a bank to ask for money, I was literally shaking… but the truth is that I would never be able to have a Rental business that outputs almost $1500/mo if I haven’t borrowed!
Start managing your fear! I am not saying to ditch it completely. That can be harmful because you must invest according to your core values and your personality. What I am saying is that you should realistically assess whether your fear is preventing you from having some real business, from making real money and ultimately, undermining your potential!
Do your research. Go out there, and find out what businesses grew, by how much, and what really took in terms of investment.
Now, match that to your own businesses. Can you see a pattern? Can you see your business growing by the same rate? Or maybe a smaller one, yet a much better one that you current one?
Or maybe to your ideas? How much would it take to turn your ideas into reality? Would it make you happier? Would you profit from that?
What I learned from my businesses
I learned a few different things from my businesses, and since I started my FIRE journey, I changed my vision a lot.
A few months ago, my intuition would be “if I can do it, I won’t pay for it”. I also remember thinking “I won’t invest money in my blog because I don’t know whether it will make any money”. This is SO wrong that I still kick my ass I haven’t invested before.
Today, I look at money as a way to save time. Time is really my most precious commodity. I write every single post on From Cents To Retirement because this is my personal blog, but I outsource a lot of stuff on my Real Estate business and my Real Estate company. I will outsource most stuff that doesn’t involve writing, here on From Cents To Retirement.
My experience so far made me conclude a few things:
- My time is way more valuable than $15/h, so everything that can be outsourced for up to that amount should be outsourced. This doesn’t apply to every single one of my investments because I know that I would be hard to make money off of a few investments I have if I outsource.
- To make things big, you need to invest at some point. I learned it the hard way, but I eventually learn that money is needed to grow your businesses. How many sites do you know which haven’t invested any money at all? Investing money should always bring you more value than the cash you give away – should you attain that, and investing money is a good thing.
- To make things big, you need to invest at some point. Blogs are really the best example we can get. I have been fighting for getting more traffic over the last months. What is the end goal? I do want to make From Cents To Retirement into a reference in the context of Early Retirement, but ultimately more traffic leads to more money. Investing X makes total sense if you gain Y, Y being larger than X. Just think about it. I know many bloggers who don’t even care about free traffic they have to lose time to get. They can’t be wrong – they make WAY more money than me.
I hope this post opened your mind to paid services. Just because they are paid, doesn’t mean you shouldn’t go with them.