Wow, “How To Get Rich” was an absolute corker of a book… [amazon UK - amazon USA] …a step-by-step guide to making money by Felix Dennis who’s one of Britain’s most successful self-made millionaires. His estimated wealth is £750 million (approx $1.5 billion) according to the 2007 Times Rich List… good enough for 95th position. Although, in the book, Dennis says he doesn’t understand where they get their figures from and that even he doesn’t know exactly how much he’s worth because of the complexity involved in estimating it.

quote… “That is why so many rich people distrust the ‘rich lists’ and league tables of wealth published every so often in newspapers and magazines. We know that if we cannot calculate our true net worth, and if our paid armies of accountants cannot agree upon a figure, then compilers of lists and financial journalists certainly cannot do so with any real accuracy” [page 4].

Felix Dennis is primarily a magazine publisher. He privately owns Dennis Publishing Ltd… a UK company which publishes a range of successful magazines and has a turnover of over £200 million ($400 million per year). If you’re a Brit, you may recognize some of these titles… MacUser, Maxim, Auto Express, Computer Shopper, PC Pro and Viz. There’s also Dennis Publishing USA which has recently been put up for sale.

In his book, Dennis takes you through what it takes to get rich. It’s a great read… not only does he tell you the “nuts and bolts” of getting rich such as how to get capital, how to delegate, how to find a market, how to retain control, but he also analyzes what it takes as a person. Basically, you have to have an unyielding desire to become rich and an ability to overcome fear. Just getting out there and “doing it”. He seems to believe that most people have neither the desire nor the drive to become rich, even if they say they do… which sounds about right to me. How many people really have the killer instinct needed to compete in the capitalistic jungle… to claim the huge piles of cash needed to become rich?

But there’s much more to the book than just how to get rich. Dennis talks about his brush with Legionnaire’s disease, which almost killed him but also made him clean up his act and stop wasting his new-found money (and life) on drugs, alcohol and “expensive” women.

He has certainly amassed a huge fortune… but there’s a real sense of melancholy about the book. For someone so driven to be their own boss and become rich, there’s the inevitable question of what to do once you’ve “made it”. Especially when you have no wife or children to spend time with and share life with. Dennis indulged in drugs, booze and expensive ladies until the Legionnaire’s incident. Since then he’s taken to writing poetry and also devotes resources to planting a forest in England (the Forest of Dennis).

Dennis claims to have written “How To Get Rich” at special library/office cottage near his house on the island of Mustique. I think he said it took him eight weeks to write. In the book he mentions a local cat coming into his house and feeding it milk and smoked salmon. The impression you get is that Dennis is isolated in his hideaway recounting his swashbuckling adventures at getting rich to us and the stray cat. Quite a few times he says he would swap all the riches he has for the chance to turn back time to when he was younger. In fact, he also says he would change what he did and earn his first 10-20 million by the age of 35, then sell up and start writing poetry and planting trees.

This strikes a chord with me. I’ll be 35 later this year. I may not have made 10-20 million, but I don’t really want to. I work for myself. I don’t answer to a boss. I basically earn what I want each year from my Internet business. I could grow the business, hire people, expand and try to make millions… but it would take time away from doing what I want to do right now… spending time with my wife and kids.

I’ll give you an example. I was reading Dennis’ book in my office at home today when my daughter walked in. This was about 2pm. She wanted to show me a leaflet which had been put through the door. We had a chat about it, then we fed the goldfish in my office. She’s 4 years old and almost ready to start school. When she does, I’ll miss her… so I’m enjoying the time right now when we can have fun together during the day.

Why would I want to work harder pursuing more money? What could it get me that I don’t have already? I’ve almost paid off my second mortgage in just five years. I live in a wonderful part of England. I work from home, working the hours I choose. I get to read books at home during the day with a cup of tea and my feet up. I’m at home during the day when my daughter wants to see me. My commute is a 10 second walk to my office. Most of my income at the moment comes from passive sources so I get to spend lots of quality time with my wife and children. Everyone says kids grow up so fast. Well, I’m making sure I spend as much time as possible with them while they’re young.

Dennis explains in his book that having lots of money actually brings a host of added responsibilities and worries… you have the job of looking after it, minimizing taxes on it, taking security precautions for your houses and loved ones, managing the people you hire to maintain your houses and gardens, family fights about money, jealous neighbours, fear of losing all your cash.

All that sounds too much like being famous to me… and that’s something I definitely never wanted. Lots of people say they want fame… just look at PopIdol, PopStars, Big Brother and all the other TV shows that attempt to make “celebrities” from “nobodies”. Yuck. They never seem to get anything more than their allotted 15 seconds of “fame”. Then there are the real celebrities, hounded from morning to night by the press and everyone wanting to know what they ate for breakfast. A true nightmare.

I guess, ultimately, it all comes down to defining what you want from life… then going after it until you succeed. If it’s fame or a huge pile of cash, good luck to you. Personally, my goals are simple… freedom from a boss, freedom from debt and enjoying what I have, right now.

If you want to amass your own fortune, do yourself a huge favour and read Felix Dennis’ “How To Get Rich”. It’s a wonderful book by someone who can tell you from experience how to do it… in plain English, with a warm and witty writing style… and he won’t upsell you a DVD course or board game on “How To Really Get Rich” afterwards.

There are lots of people claiming top rankings at the moment… especially for a new product that’s just launched.

Look, I don’t want to single anyone out for some “bad press”, but I do want to stress a point…

If someone presents a “search engine top ten” claim you need to be skeptical.

It’s not easy to get top ten search engine positions for competitive phrases… especially overnight. Google will “know” of several top websites that are likely to get the top spots for ALL high traffic searches in their niche. I mean, c’mon, if you type “make money” into Google, you’ll most likely find high PageRank pages and OLD sites… ones that Google (effectively) TRUSTS.

If your site appears online, you may get crawled quickly… (A site I built recently has been visited by Google’s bots over 30,000 times in November) and even indexed quickly (the same site has 4,000 pages listed in the Google index already), but DON’T expect to get top search engine rankings for high traffic phrases quickly.

So what’s the “truth” behind these claims of achieving top-ranking pages overnight?

Simple. The phrases are NOT competitive.

Take, for example, “home business arlington”. Now, if you type that into Google, without the quotes, you get 3.62 MILLION results.

Does that REALLY reflect the number of pages that are about home businesses in Arlington? No. It reflects the pages that Google knows about where the words, “home”, “business” and “Arlington” appear on the same page. It could be pages about someone in Arlington, Australia selling their mobile home because they went out of business. Well, you get my point. Most of the results are NOT 100% relevant.

Now do the same search with the quotes, and you’ll see FOUR results.

Quite a difference, right?

Let’s forget the arguments about how people don’t search using the quotes… the reason we are using the quotes is to compare the “pin-point accurate results” with the headline figure of “total results”.

Here’s the 24-million dollar question… how difficult would it be to create a page that ranked number ONE for the phrase “home business arlington” when people type it into Google, without quotes?

Answer: easier than falling off a log.

Let’s take a contrary view… the phrase “home business” without quotes… 1.7 BILLION results… with quotes… 4.26 Million.

How difficult would it be to create a page that ranked number ONE for the phrase “home business” when people type it into Google, without quotes?

Answer: seriously difficult.

In summary… to VALIDATE someone’s claim about top search engine rankings, do yourself a favor and do an identical search but include the quotes… that will show you whether or not they’ve beaten real competiton.

I got the millionaire next door as a birthday present and just finished reading it.

It basically reaffirmed my thoughts on getting ‘rich’… “Earn a lot, spend a little. Avoid debt, build wealth!“

I did like how the entrepreneurs and business owners described in “The Millionaire Next Door” had a hidden advantage over the high-income “professionals” such as accountants, lawyers, doctors etc etc. That hidden advantage was that the professionals were under social pressure to live an expensive lifestyle… they were expected to be seen, in their professional capacity, in suits, ties. They were expected to live in a “wealthy” neighborhood, with expensive cars. Their children were expected to go to private school. Whether they desired these things or not, the social pressure was there to fit in with what was expected. After all, if your accountant meets with you wearing jeans and a T-shirt, you’re not going to be impressed, are you?

On the other hand, entrepreneurs can wear pretty much what they want, when they want. I certainly do!

Business owners, on the other hand, have the reverse pressure. If they wear sharp suits and drive luxury cars, their employees could very well resent their display of wealth. So it’s better for the business owners to act like one of the employees.

That “hidden” benefit may help explain why the high income professionals struggle to accumulate wealth whereas the entrepreneurs and business owners seem to succeed. 

To accumulate wealth, you need to earn a relatively high income and spend wisely. Know the value of a dollar. Make each one work for you.

The book is well worth reading, but after the initial point is driven home (to accumulate wealth you have to earn a relatively high income, spend frugally and live quite a long time) along with another good point (minimize your taxable income and grow your non-income producing assets) I felt the book ran out of steam. It talks about “how the wealthy buy their cars” and “inter-generational transfers of wealth and what it means to the recipients” for what seemed like most of the second half of the book.

This may be a bit “out there”, but it has important implications for making money online.

I’ve looked into using Pay Per Click advertising (PPC, primarily Google’s Adwords) to promote affiliate products and earn commissions on any sales.

The principle is simple… pay less to the search engines than you earn in commissions and you’re in business… profitable.

However, you have competitors thinking the same thing.

If you bid for high-traffic words and phrases, you have to pay more per click. Not smart.

So you look for lower-traffic words and phrases to pay less per click. If the words and phrases are highly targetted to the end-product, you will hopefully convert more visitors to sales and be more profitable than paying for high traffic words. Now we’re being smarter.

Guess what? Our competitors are doing the same thing, which forces UP the price per click, even though the traffic is lower.

This is like Spinoza said… “nature abhors a vacuum“… so you won’t find unbid valuable keywords! In a perfect system every keyword would be bid to its maximum value. If a keyword is valuable, it’s fully bid.

It there room in that system?

Yes, but only if you go the extra mile and extract MORE value from that keyword than is currently “priced in”. You could build advanced squeeze pages targetted to each keyword or capture names, emails and demographic data. But now you’re looking at a whole lot of work… will the rewards then be worth the effort? There’s no “easy money” available because the easy money attracts lots of competition… which requires you to work harder for the money, so the easy money becomes difficult money.

It’s like making money online in general… the barrier to getting online is tiny… you just need a computer and a web connection… so millions of people jump onto the Internet wanting to make money online, which raises the level of competition ensuring that there’s no “easy money”.

If you want to succeed as an affiliate, you have to work harder than most other people who want to make money as affiliates. If you want to succeed as a digital author, you have to work harder than most people who want to make money as digital authors.  

Cause and effect.

However, if you think backwards… when Google Adwords first came along, when Adsense first came along, when the Internet first came along, then there was easy money for a short period of time… until the competition arrived. So, seeking out new opportunities could pay off handsomely. For example, finding the first nugget of gold in the Rockies… that was “easy money” until thousands of other gold prospectors turned up… then it became more difficult.

For those of you who don’t know, Tesco (4th largest retailer in the world) is the British equivalent of Wal-mart (largest retailer in the world), with a seemingly never-ending ability to increase profits and increase its dominance over other retailers (30% of supermarket sales and rising). “Across all categories, over £1 in every £8 of UK retail sales is spent at Tesco“… now that’s dominance.

Tesco is launching a new service, “Tesco Direct”, which is a combined website, catalogue and phone service for ordering up to 8,000 products. (Tesco don’t seem to think big… they think huge).

Unfortunately, things haven’t gone to plan with the new website, “rumoured to cost £35m ($65 million) to set up”…according to this article…

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“Tesco’s plan to take on Argos and other online retailers has been delayed due to technical problems.

The new service, Tesco Direct, will offer a range of non-food products that includes everything from beds to golf clubs, and was due to go live yesterday.

However the supermarket missed the launch date due to IT problems. It has not announced a new date for opening.

The site is rumoured to cost £35m to set up and, when live, will offer more than 8,000 products including furniture, kitchenware and electrical goods.

People will be able to order online, from a catalogue phone service, or at dedicated Tesco Direct desks at selected stores.

The retailer has also promised to introduce a delivery system that will let most people get next day delivery and even choose a two-hour time slot for smaller products.

Larger items such as beds or sofas will take longer to get to consumers, although Tesco has pledged to get all products delivered between five and ten days.” (source)

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So if you’re struggling to launch an online business, an ebook or even get a webpage online, consider that even the biggest and the best sometimes struggle with this new-fangled web technology!

A past article getting a fresh airing… with new comments at the end…

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A major concern of mine for people who only earn money from affiliate programs is that the rug can be pulled out from under you.

It’s all very well building excellent mini sites and making sure pages score highly in the search engines.

But what happens if the affiliate program closes?

What if the affiliate program commissions are changed such that you earn $0.25 per click instead of $0.50… but you know all your pay per click campaigns are only profitable if you earn over $0.35 per click?

Nightmare!

Here’s a very real example which I received from c2it, the Citibank-backed person-to-person payment system (kind of like PayPal)…

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c2it.com

Dear Neil Shearing,

We want to thank you for participating in the c2it (SM) service publisher program, and to advise you that we will be terminating our program on September 30th, 2002.

We will continue to pay a $5 commission for every approved c2it account that you generate until September 30th, 2002. However, international sales must be conducted before September 30th to be eligible for the additional commission.**

c2it links will be deactivated on September 30th, 2002! c2it creative links will be removed from the CJ interface on September 30th, 2002. You are no longer authorized to feature c2it advertising on your site(s) or within emails at that time. After September 30th, you will not be eligible for any commissions on c2it enrollments (leads) and or c2it transactions (sales).

If you have any questions pertaining to this news, please feel free to contact me. We apologize for any inconvenience this may cause you.

We have enjoyed working with you.

Regards,

c2it Affiliate Manager
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Hmmm, not much fun if you were referring people to their program and earning $5 per referral!

My advice is to make money from affiliate programs while you create your own product.

Once you’ve launched your own product, you can use affiliate links to “backend” sell to your customers… but the “frontend” (your products) give you that all important income stability.

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I would now include Adsense in with those comments… Adsense is owned, run and operated by Google. If, for any reason, they halved their payouts or even closed the program, there would be huge problems for anyone who built their business (and income) around Adsense. It wouldn’t be total devastation because you could re-direct site traffic to other programs, but it would involve a lot of extra work and hassle.

In a word, diversify.

Was I in at the beginning of the Internet? The “big bang”?

Take a look at this past article… it mentions DVD’s as “new technology” and also VHS (gasp!)

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Niche It, Niche It Good!

A key to online success is to work the small, profitable niche’s.

I’ll give you an example.

I wanted to buy a DVD player. Yes, I’d held out long enough and was ready to embrace the “new” technology!

BUT, I didn’t want another box under my TV. So I went looking for a DVD/VCR combo.

I found one I liked and took it home from the store.

I’m a happy bunny. The Lord Of The Rings is just spectacular!

OK, back to the niche.

If you search Google for “home business” (without typing the quotes) you get 6.8 Million results.

If you search Google for “DVD VCR combo” (without typing the quotes) you get 61,000 results.

Now, if you earn 2% per sale on a $400 DVD/VCR combo from your local electrical retailers website, that’s $8 per sale.

And there’s very little competition.

Work the Niche

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Now, let’s look at that again, doing the same searches today… home business and DVD VCR combo. I’d say the web has become a little bigger since I first wrote that article!

When you retire, you expect residual income from your investments, right? That’s what your pension is for… to provide an income stream when you retire. But can your online business provide you with residual income too, and is it important to try to build residual income streams? Well…

If you have a job, you have to keep working to earn money.

If you have a business, you have to keep selling to earn money.

But, if you sell a product through recurring billing, or if you sell products as an affiliate and earn residual income, you can reach a level of success which will enable you to stop working!

For as long as the person buys the product, you take a slice of the revenue.

Even if you sold to them five years ago.

Of course, if you’re an affiliate, you have the same risks that the merchant may go broke.

And if you’re the merchant, you still have to provide the service which the customers are paying monthly for, and provide customer support.

But the fact is that building a residual sales income will provide greater stability and revenue than making continuous sales.

Try to build a residual income stream into your business, and let me know how you get on

I’ve written hundreds of articles about making money online, working from home and all aspects of running a home based business in the past ten years, many of which are sitting mothballed on my computers or web server. From time to time I’ll be digging some out and posting them here just to give them an airing and get rid of the cobwebs. Obviously I’ll post the ones that are still relevant. I won’t be posting the ones about how great and innovative x.com is. (they were bought out by PayPal in March 2000 , in case you were wondering) Boy do I feel old!