DEFINITIONS
Let's quickly get a few definitions out of the way that will make everything we cover easier to understand.WHAT IS THE FIRE MOVEMENT?
FIRE stands for Financial Independence, Retire Early. A group of people who call themselves Financial Independence, Retire Early (FIRE) are committed to a program of severe saving and investing with the goal of enabling them to retire far earlier than typical budgets and retirement plans would allow. The central idea is that every expenditure should be judged in terms of the number of hours of labor required to pay for it much on the same we can calculate the calories for every meal in terms of the number of workout hours it will take to burn those calories. This document lays out a path for you that will allow you to become a member of the FIRE movement starting with little to no financial investment on your part. Ultimately only your time and effort are needed for you to succeed, and by telling you my story of how I started with only $31, I was able to make an extra $32K my first year, $100K my second year, and $250K my third. Currently I average about around $625 everyday passive income that generates on its' own with virtual no addition effort on my part which leaves me plenty of time to explore additional revenue streams.
EARNERS VS ENTREPRENEURS
An earner is any person that has a job where the amount of work, effort, and time they provide earns them money. Basically any typical job you can think of where someone hires you to do a job and they pay you for doing that job. It is really that simple. Defining entrepreneurs on the other hand is a little more complicated, but for the purposes of this course, an entrepreneur is any person that has found a way for you to do a job and they make a money off of your work, effort, and time. A common example of this is say you rent or purchase a house, then you rent one of the rooms to a friend. That friend goes to their regular job and earns money, but each month that friend gives you some of their earnings in the form of rent, so in this case they did the work, and you earned some extra money. This form of income to you is an example of passive income.
PASSIVE INCOME SHORT ANSWER
We will discuss what passive income is in detail later in the course, but for the sake of context, it is important to have a general idea of what it is now. Basically, passive income is any income that you can earn in a way that does not require you to always be actively working at the time you generate that income. For example, let's say I was to post on my social media about my favorite whey protein supplement and why I like it so much, then I provided an Amazon link to that product. After reading my post you then clicked the link and bought that item. As a result, Amazon would give me a small commission from your purchase. That income I would receive from Amazon would be considered passive income.
SELLING ONLINE
PREPARING TO SELL ONLINE
If you are serious about selling online, you will need to do everything you can to make your business look as professional and reputable as possible. To start you will need a niche, a business name, a professional website, professional email, a business license, and a dedicated phone line. If you already have one or more of these then you are ahead of the game, but you still may find some ideas within this section you may not have considered.
TOP 48 NICHE CATEGORIES
You need to start decide on the area that you want to start selling. Below are the best areas to choose from, followed by help in deciding which one of these is best for you.
|
|
DEFINE YOUR INDUSTRY
You will need to choose a business niche, starting at the top level of deciding on the general industry/category/area you would like to focus on. Examples include health and wellness, fitness, education, fashion, gardening, financial, technology, etc. In this stage you will want to perform what's called a problem and solution analysis. The problem and solution analysis allows you to define the who, what and why of your brand. You are defining who your brand is catering to, what problem they have, and why it is important to solve that problem in the first place. Then you need to decide what the unique angle of your brand will be. This is important because there are 1000's of apparel brands, there are 1000's of skin care brands, there are 1000's of services brands, but what sets them apart is the unique angle that those brands take. That is what allows them to attract a specific sector of their niche and thus allows their brand to be successful. For example in apparel, Nike's focus on sports related apparel, whereas Ralph Lauren focus on being a luxury brand. Both could sell luxury sports apparel, but for the most part their brands are unique.
When choosing a niche, don't' be too specific as it can limit your growth. To make money online within your niche you must offer something of value.
When it comes to your target audience you don't want to target people who don't have money or where the primary affiliate will pay you very little.YOU NEED A PROFESSIONAL WEBSITE
Now before I get into the details about why you need a website and how to create yours for free, I wanted to mention that there are lots of other things to know that are found in this video to help you get your business up and running as soon as possible. Also by watching this video from start to finish will better prepare you to decide exactly what content you want in your initial website.
You will need a professional looking website even if you currently don't plan to sell any products or services on your website. You're saying, but Yoda, why do I need a website if I only plan to sell via social media or YouTube? Why does a website matter? IWTY ..... There are two main reasons why you need a professional website.
First you really do need to take your business seriously if you expect anyone else to take you seriously. You can expect that all of your competitors that are making $50,000+ a year have a professional website as well.
The second reason is that nearly all the companies that you will want to partner with to sell their products will want to see that you have a professional website before they will even consider approving you to be a partner.
Fortunately I've got you covered when it comes to making your own professional website. These are just a few examples of the professional websites you can build for free using my "How to Make a Website" videos on my channel. And not only can you build your entire website for free, but if you follow my video and use my promo code WEBYODA, I can get you a free domain name, and a free SSL secure key for your website. The only real cost is your website hosting which will run you about $31 for the year which comes with a free domain name, free SSL Secure key, and a 45 day no questions ask money back guarantee in case you change your mind.
YOU WILL NEED A BUSINESS LICENSE & EIN
This is just busy work and super easy to do. You will need a business license from your state. Most people start with an LLC. Then you will need to apply for your business Employer ID Number also called your EIN. This is basically the social security number for your business. This number is needed so your business can collect money from others and so you can do things like open a business bank account. If you plan to have inventory, then you will also need a reseller's permit, but I strongly discourage any business model where you need inventory. If you live outside the united states your country requirements will differ, but should be very similar. Go here to apply for a free EIN
YOU NEED A PROFESSIONAL EMAIL
You will need a professional email address, for example mine is yoda@webyoda.com. To get a professional email (you@yourdomain.com) runs about $6.00/mo or $72 annually. Fortunately, if you took advantage of my "Make A Website" offer and as part of that deal you scored unlimited free professional email addresses as part of that deal. My "Make A Website" videos show you exactly how to set your email up as well.
YOU NEED A BUSINESS PHONE LINE
Your business also needs a dedicated phone line, but you can likely use your personal cell phone in the early stages and just set the voicemail to say your company name. Then just answer the phone with your business name whenever a call comes in from an unknown number or let voice answer for you.
Have a friend create your voicemail greeting message preferably a female voice as it will sound more professional. Also by not being your own voice allows your company to appear bigger than just one person.SIGN UP WITH AFFILIATE PARTNERS
Even if your primary method of income may not be affiliate marketing, you will always be able to find a place to position affiliate links to subsidize your income using affiliate links. Once your website is complete and since it is totally free to sign up for affiliate programs, I strongly encourage you to become a member of all the various major affiliate networks that I will recommend later in this video. Minimal requirements can vary across different affiliate networks, but most will require a website. If you get rejected by an affiliate network, please reach out to them via email as the reason you were rejected can often be resolved via email, this has always been the case for me.
CHOOSE YOUR FIRST PRODUCT OR SERVICE
Choose your first product or service to be very specific when you are just getting started. Only choose products or services that you use and feel very passionate about Products and services that are very higher rated will often sell themselves Never promote a products or services that you might lose sleep over
CREATE CONTENT TO PROMOTE YOUR PRODUCT
Visit websites and watch YouTube videos of others in your niche to get good ideas Generate quality targeted content to promote your products and services The quality of your content to market your products and services is crucial.
PROMOTE YOUR PRODUCT OR SERVICE
Market yourself via organic and paid methods Use email follow ups to generate more new sales (Have a No spam No scam policy) For YouTube, your coverage image and title text is what sets you apart from the others
PROVIDE QUALITY CUSTOMER SERVICE
Quality Customer Service is essential, always answer all visitor/viewer questions daily. When looking at ways to maximize sales many people focus solely on leads generation to produce more sales, but rarely do they consider how important customer experience affects sales. It is vital that you promptly respond to any and all customer questions regularly no matter how silly the questions might be. Provide potential customers with a kind, patient, and educated response. For example, as a YouTube creator, YouTube comments that go unanswered can cost you a huge portion of your sale potential.
For YouTubers, as an added bonus, if you respond to every comment you get on your YouTube channel no matter how small the comment, YouTube will like you better and reward you with more traffic. This is because YouTube likes interaction, and it also reminds people of your channel and they might watch more of your monetized videos. I keep a spreadsheet full of all the common questions and answers so I can more easily respond to questions.
FINANCIAL FREEDOM
EMPLOYEES WILL ALWAYS BE POOR
When it comes to becoming financially successful, the first step is to unlearn what you have learned. School teaches you nothing about money, and this is by design. The goal of school is to teach you to become an employee, to become a member of the working class. You go to school, get a job hard, save money, pay your taxes, get out of debt, and invest your money, then hopefully retire. The employee path never makes you rich yet ironically always pays more taxes. The system is designed to keep the poor and middle class working hard by never teaching them about how money works. This pattern repeats itself each generation because the poor and middle class do not teach their kids about money, because they honestly don't know themselves.
ONLY ENTREPRENEURS ARE RICH
On the other hand, the rich parents teach their kids the secrets about how money works so that their kids can continue making the family more wealthy each generation. You see, the rich don't work for money, instead the rich make money work for them. It is up to you to choose to be an entrepreneur, and by making this choice you can open the door to financial freedom. The steps that follow should help you make the transition from only being an earner to also being an entrepreneur.
ABOUT FINANCIAL FREEDOM
Financial freedom, aka financial independence, means having enough savings, investments, and cash on hand to afford the kind of life we desire for ourselves and our families. Basically, financial freedom gives you the ability to retire and not worry about running out of money.
I decided to include this section in the video because I strongly believe that financial freedom can be realistically achieved via passive income in 5 to 8 years instead of working a regular 9 to 5 job for 20 to 30 years.
But to be clear, financial freedom does not mean you have to be uber rich, it simply means you have enough recurring income to meet the needs of your lifestyle, while spending within your means so you can stay financially free. This takes financial education, something that they do not teach in public schools. It is the lack of a formal financial education that explains why so few people can retire early and might also explain how it is possible that many uber rich can find themselves bankrupt.
THE PATH TO FINANCIAL FREEDOM
A path to financial freedom requires two key components, income streams and investments. It also takes time, with an end game goal, a solid plan to reach that goal, and possibly some money but certainly a lot of personal effort. It is very important to remember that your current real job is your lifeboat for survival, do not jump ship on your real job too early.
The fastest way to achieve financial independence is with exponential growth of your online business and to do that you must not spend the profits in the early stages of your online business, but instead reinvest in your business. With a regular job, you have one capped income stream and financial independence is at retirement at 65 if everything gos as planned.
If you diversify your income streams, you can achieve financial independence in say 2-5 years, but to do this, you should build one income stream at a time and do it well to make it the best you can before pursuing other income streams. When you have multiple online income streams you can scale that from 10 to 100 to 1000 products, but is is gradually and takes type. Again the word "Patience" comes to mind.
Bethany and I were able to achieve financial independence in right at 4 years, but since we like to travel, we plan to continue to grow our wealth for another 3-5 years to make sure we have plenty to do all the travel we want and still maintain financial freedom in retirement.
MILLIONAIRE SKILLS & HABITS
Knowing more about millionaire skills and habits can help you do the right things by practicing what works well for them. First and foremost, worry less about fronting like a millionaire, instead invest more in yourself and less in your stuff. Millionaires are obsessed about success, they are absolutely relentless about succeeding. Millionaires use debt to become rich not to become broke. To be rich you need to make use of other people's time and money.
Next, millionaires don't rely on social media to make the right financial decisions. Social media and much of the news today can be more fake than real which can lead to bad impulse decisions. Instead use the Internet as a learning tool to improve skills. Millionaires focus on high income skills to optimize their success. Topics to study include watching videos about online marketing ideas, content design, sales techniques. It is these money making skills that are the key to you making $100,000 or more a year online in just a few years time.
Learn to say "NO" to 99.9% of things, so you can focus on the things that benefit you the most Start investing in your future today so you can stay a millionaire once you become one Only spend the money to dress like a millionaire if your online income streams require it. You can also benefit by finding a mentor that you can follow to help you optimize your business success in ways that have already worked for them.
AVOID THESE COMMON MISTAKES
Don't put your reputation at risk by promoting products you don't use and know nothing about. Don't promote products based solely on the highest return, choose quality over payoff. If what you are offering isn't a good fit for your audience, you're wasting yours and their time. Giving the impression, even slightly, that you are trying to sell something, turns people away.
HOW MUCH INVESTMENT MONEY DO YOU NEED FOR FINANCIAL FREEDOM?
Multiply the amount of money you want to make per year off dividends and multiply that number by 22x and 28x to get the range of how much money you will need in dividend stocks to reach your goal. So for example, I want $70,000 per year when I retire and not spend any of my investments. $70,000 x 22 and x 28 is $1,540,000 and $1,960,000 respectively. So that's the range my portfolio needs to be to generate $70,000 per year indefinitely. And if I reinvest all the dividend money I make for the next 20 years into more dividend stocks, my annual income will be closer to $150,000 per year. I know 20 years is a long time, but that 20 years is going to happen either way so I may as well set myself up to enjoy my retirement by making a few sacrifices now.
CASHFLOW QUADRANTS
The Cashflow Quadrants represent the various techniques by which income or money is produced. Every quadrant addresses an alternate method of producing income. Certain individuals bring in money in just a single quadrant, while other individuals bring in cash in each of the four. There are benefits and inconveniences to each. Yet, the two quadrants at the bottom are the essential ways to achieve financial freedom. Review the bullet points for each to better understand why.
Employee
- You actively work for someone else who determines your income
- Your income potential is capped by your employer
- Most people are satisfied with any job that puts money into their pocket
- The amount of active work you do yourself determines your income
- Your income is no longer capped
- The active work by your contractors and employees determines your income
- Your income is now scalable
- If you run your business as a well oiled machine, then the more parts of that machine that you can hire out, the faster your business can grow
- The amount of income no longer relies on active work
- So long as you live within your means, you should continue to enjoy a lifetime of financial freedom.
FINANCIAL PROGRESSION
Bethany and I have been doing affiliate marketing as well as other passive income strategies for over 5 years now and in that time I have gone from making a few $100 a month in the first few months, to a few $1000 a month buy the end of six months, and fours years later bringing in 1/2 million in passive income annually. On the surface it may sound like an unachievable goal, but if you stick with it and put in some honest hard work, you will win. Below is a snapshot of our 10 year plan with our current year circled in red. Below the chart is our reinvestment strategy.
One of the easiest and biggest mistakes you can make is to start spending your profits on yourself or relying on your profits to cover your regular bills too early in the process.REINVEST YOUR PROFITS TO ACHIEVE FINANCIAL INDEPENDENCE
Financial independence is best achieved by reinvesting 50 to 100% of everything you make for at least the first 2 years. The more you are willing to invest, the faster you become financially independent. Also remember that when you invest money into the business, it is still an investment in your future since helping the business grow means the business can grow that much faster.
Year 1
In our first year we made $32,000 and during the year we invested 100% back into the business. We made the following investments:
50% Business Expenses $16,000
31% Capital Investment (computers, software, and general studio equipment) $10,000
19% Promotions $6,000
0% Retirement Investments $0.00
0% Household $0.00
0% Office Space $0.00
Year 2
In our second year we made $106,000 and during the year we invested 100% back into the business. We made the following investments:
45% Tesla Fund $48,000
23% Contractors and Employees $24,000
17% Promotions $18,000
15% Business Expenses $16,000
0% Retirement Investments $0.00
0% Household $0.00
0% Office Space $0.00
Year 3
In our third year we made $247,000 and during the year we invested 50% back into the business, and 50% into retirement investments. We made the following investments:
50% Retirement Investments $123,500
19% Tesla Fund $48,000
12% Contractors and Employees $30,000
10% Promotions $24,000
9% Business Expenses $22,000
0% Household $0.00
0% Office Space $0.00
Year 4
In our fourth year we made $345,900 and during the year we invested 50% back into the business, 40% into retirement investments, and 10% towards our household. We made the following investments:
40% Retirement Investments $138,400
23% Contractors and Employees $80,000
14% Promotions $48,000
10% Household $34,900
8% Business Expenses $26,000
3% Office Space $9,600
3% Tesla Fund $9,000
Year 5
In our fifth year we made $484,300 and during the year we invested 50% back into the business, 40% into retirement investments, and 10% towards our household. We made the following investments:
29% Beach Condo $142,450
24% Contractors and Employees $116,000
15% Promotions $72,000
11% Retirement Investments $51,250
10% Household $48,400.00
6% Business Expenses $30,000
5% Office Space $24,200
Year 6
Currently, during year 6 of our 10 year plan, our annual income should total close to $750k this fiscal year and again we plan to invest 50% back into the business, 40% into retirement investments, and 9% towards our household. So for year 6 we have estimated the following percentages as our general investment strategy:
22% Retirement Investments $163,550
20% Contractors and Employees $145,731
19% Promotions $144,000
19% Beach Condo $142,450
9% Household $67,169
6% Business Expenses $45,000
5% Office Space $38,400
With this strategy we are keeping less than 10% of our income to run our household and reinvesting the other 90% of the cash flow back into the company. As you do this, your invested income grows bigger and bigger, which in turn grows faster and faster just like a snowball rolling down a hill. I understand that investing 90% of what we are making each year sounds excessive, and it is, but that is the whole point or the FIRE strategy towards financial freedom. In a little over 5 years we are on the verge of enjoying what we consider financial freedom and I can tell you it feels really good knowing that, very soon, my family will be taken care of with minimal stress of running out of money.
We have reached the end of this tutorial but only the beginning of your journey towards financial freedom. Bethany and I hope you enjoyed our tutorial and look forward to hearing your success story. Until then we hope you have a great day!