How do we know if we’re making good financial decisions, or if the choices we’re making are more like financial blunders?
You’d think that just looking at our score card – our bank balance or accountant’s balance sheet, would be enough.
But it’s not quite so simple.
And understanding why it’s not this obvious may be the difference between changing our financial futures, or being stuck in a perpetual state of “where the fuck did my money go?”
We often look back on our decisions (or indecisions) and judge them based on whether or not we like the outcomes – not based on whether we were actually making a good choice at the time.
For example, buying a lottery ticket is a statistically losing decision. The odds against winning are far greater than the payoff – even if that payoff is millions of dollars.
And yet someone wins every time. To that person, buying a lottery ticket appears to be a “good choice” – because they now have a huge pile of cash to play with, even though at the time it was a losing decision.
To get a clearer picture of what’s wrong with this, it’s better to look at a large number of decisions together.
Say we have a mini-lottery game, but instead of picking 6 numbers, all we have to do is to correctly guess the number of a rolled, six-sided die.
Win, and we get $5, and it costs $1 to play.
Is it worth it?
Fairly obviously not. We have only a 1/6 chance of guessing correctly, which that means on average, we will win one time out of every six games. A gain of $5, and a loss of $6.
However, if we win our very first game it feels like we made the right choice to play.
But life isn’t about 1 isolated choice, it’s about the aggregate of all our choices.
So if a person tends to make bad choices because they win some of the time, that doesn’t make the choices any less bad.
To drive this point home, most lottery winners end up right back in the financial situation they were in within 10 years.
Because these are people who, on average, make losing choices when it comes to money.
And even though they won the freakin’ lottery for crying out loud, this isn’t enough to outrun all those bad decisions.
There is some important behind-the-scenes psychology going on here too. It’s been shown in experiments that rewards given at random intervals make individuals much more likely to strive for these rewards.
For instance, a pigeon rewarded with food every time it taps a lever 15 times will work less hard than a pigeon who gets rewarded after a random sequence: 15, 7, 13, 21, 8, 9, 11, 4, 26, 22, 13, and so on.
And in the human world, we see this exact same pattern occurring in casinos all over the globe. The most addictive element is the randomness of the positive outcomes, which create a hedonistic head rush, bubbling emotions, and the desire to play…just one more time.
Why is it important to understand all this?
Because if we want to become wealthier, we have to stack the odds in our favor to make sure that we win most of the time, even if we lose occasionally.
Like a poker player, our job isn’t to have every decision work out in terms of making bank, it’s to make the right decision each time, so that over the course of 100 or 1,000 or 10,000 decisions, the results turn out in our favor.
Most people are afraid to act because they don’t want to be “wrong.” But not acting is intrinsically wrong, because only a large collection of actions that put the odds in our favor can lead us to success.
For example, a professional Texas Hold’Em poker player may have an overwhelmingly better hand than their opponent. Their opponent might need 2 specific cards to come up in order to win, with odds well under 1%. So the poker pro bets big money.
Was it the wrong choice?
No, because if they make the same choice over their entire career, they will win far more times than they lose playing this same hand. It’s absolutely the right choice, and they’re obligated to make it.
What does that mean for us?
It means that we have to start collecting good money decisions:
Pay yourself first: Most people pay themselves last, after all the bills, toys, and entertainment. Savings typically come after all of that. Rich people pay themselves first, putting money into investments, or into savings that are going to be invested later before they pay any expenses. That way, they’re always moving forward.
Investing in assets before liabilities: Most people invest in liabilities, things that take money out of our pockets – often on a monthly basis. Think rent, car payments, insurance, daycare, etc. Rich people invest in assets first – things that provide some sort of monthly cash flow (or tend to go up in value, though this is a much less valuable sort of asset) – and then use their assets to pay for their liabilities
Minimizing Risk: The Warren Buffet special – all financial activities should start from a point of minimizing the potential downside, as a big blow hurts more than a big win helps. Just think, having $100,000 and losing it – becoming broke would be way worse than going from $100,000 to $200,000 would improve our life.
Reinvesting: If an asset is producing an income, one of the most powerful thing we can do is to reinvest that income to either get more assets, or make our existing ones more profitable
Diversification of Assets: Having investments of only 1 type is unstable and dangerous, most definitely not minimizing risk. If all our money is in cash-savings and rapid, massive inflation strikes, those savings could be wiped out practically overnight. By diversifying, we ensure that if any 1 thing changes rapidly, our foundation is so solid that we can react to the setback and carry on building our portfolio, instead of stating over from square one.
Long-term outlook: Day trading is sexy, but for the average investor, it’s a quick path to the poor house – much more akin to gambling than actual investing. The rich overwhelmingly are of a buy-and-hold variety, and I’m talking about a lot more than stocks. The value of owning an asset, that is, the cash flow it produces, is far more lucrative than attempts to predict the price movements of assets, buying and selling them as if we’re on a sojourn through a flea-market.
Of course, there are professionals in every sphere who don’t play by these rules, and that’s part of a strategy that works for them.
But most of us aren’t top 1% professionals and aren’t going to be. For most of us – certainly for myself – I want a money strategy that I don’t have to be engaged with 24/7.
These principles let us spend just as much time as is necessary to be financially successful, so we can invest our most valuable asset – our time, into living.
Our financial reality is the sum total of all the decisions we make. Now you know how to judge for yourself. The good news is that, wherever you are now, if you start making more good financial choices and fewer blunders, your financial state of affairs can turn around relatively quickly. And you won’t have to win the lottery to make it happen.
When I talk to people who are experiencing financial difficulties, one of the things that often strikes me is the sense of powerlessness they seem to espouse.
And having experienced plenty of such challenges myself, it’s hard to blame them. When things are going badly, it can sure look like the world is conspiring to put us down and keep us there.
So I wanted to come up with some really simple financial advice that would be both enlightening and empowering.
Having, on one hand, suffered through some debilitating injuries that left me unemployed and just-over-broke for several years, and then on the other – traveling the world on a shoestring and seeing the power of the human mind to creatively solve problems, I’ve come to embrace the fact that money plays a central role in most people’s lives.
I think this is something we may as well admit right from the get go, and to do so without shame. Even if we, ourselves, were to lead a moneyless existence, the world in which we’re a part of is decidedly one of economic action.
And as individual participants, our goal is – very generally speaking – something called “financial freedom” or financial independence.
In one of my very first pieces for this site I talked about the popular idea of financial freedom being a lie – that true financial freedom is not making more money from our investments (business, stock portfolios, royalties, or other assets) than we have in expenses and being able to do whatever we want, but rather our lack of fear about money.
Someone who makes a million bucks a month, is frugal, but fears every day the loss of their all their material wealth isn’t financially free.
In this sense, someone who feels completely comfortable and secure at any level of earnings is someone who is truly financially free.
But that being said, I’d say it’s objectively superior to earn more from a portfolio of assets (not a job) than we spend, and this is a worthy objective for us to achieve.
Why? Because having a large degree of financial freedom makes it easier to focus on other things that improve our lives and the lives of those we care about – we can invest in our education, sleep more, exercise more, spend more time with people, and do all the other things we often put to the side in our quest for wealth.
And while I think we should make an effort to enrich all these aspects of our lives – no matter our financial situation, the fact is it’s way freakin’ easier if money isn’t an additional worry.
I know that a lot of people resigned to leading an average financial life, thinking they don’t have the education, experience, qualifications, talent, time, or whatever it is necessary to become rich. That their past or current results somehow make their future results predestined to be the same.
But as I recently explained, the game of earning money simply comes down to balancing our assets (incomes that generally don’t involve trading our time for money) against our liabilities (expenses).
It’s not about making a million dollars, owning a big house, or any other pride-inflating, ego boosting nonsense. If we have a hole in our souls, no amount of stuff is going to fill it.
The key theme is self-empowerment. And the news is rosy – we can achieve financial independence with a relatively small income if we don’t burden ourselves with a huge list of liabilities that we are then forced to work and pay for.
The 7 Money Models
The 7 money models are different approaches to earning and using money. By knowing an individual’s money model, we can fairly reliably their financial future, regardless of their intelligence, experience, education, or other external factors.
More importantly, by knowing which money-model describes us, we can take steps to evolve our approach – to adopt a new, more effective model.
These models, while presented in a linear fashion according to their effectiveness at producing financial independence, don’t have to be approached this way in reality.
In fact, even if we have no money or are in massive debt, the best thing we can do is start acting like a rich person now.
It’s like the old saying about “I’ll start exercising once I lose 20 lbs.” The logic is completely twisted and backwards.
That being said, the most responsible and practical approach is twofold, taking steps to reach the next level, while keeping one eye on our ultimate prize, and going for that at the same time.
Model One: The Beginner
The Beginner isn’t currently earning an income. They may be between jobs, never had a job, recently laid off, long-term unemployed, or anywhere in between.
The most stressful place to be, no doubt, is to have no job or other income… and a bunch of financial obligations. An unpaid phone bill barely makes the list here – I’m talking taking care of children, health expenses, rent, and the basic cost of living.
The reason this money-model is called The Beginner is because this is often a stressful and trying place to be, and we usually have disempowering lables associated with it. It’s hard to get fired up over being “unemployed” or “out of work” – but if we think of ourselves as beginning our journey to/back to financial success, then we’ve just put ourselves in a psychologically winning position.
Of course, with an income of $0.00, our only way to get by is by having no expenses. Which is doable if we’re creative enough, but it’s not a sustainable long-term option for most people.
For The Beginner to transform into another model, the most logical option is to look for any job at all. Unfortunately, this is exactly what practically everyone else with this archetype does, leading to an overwhelming amount of competition for the lowest-level positions available.
This is one example of why it’s important to set our sights higher at the same time, even if that’s just 30 minutes a day. Jumping to a higher-ranking money-model has a disproportionately large payoff for the time we could invest.
TheGun-For-Hire is willing to take whatever job they can find.
At this stage, the goal is still basic survival. And any job, even at an immorally low wage, can at least help achieve this end.
For the majority of us who aren’t living a self sustaining, off-the-grid sort of lifestyle, TheGun-For-Hire usually sees a small bit of income usually struggling against a pile of expenses.
As is so often the case with trying financial situations, it’s easy for fear to rule here. But it’s important to keep looking ahead and trying to increase our income – not just cut expenses by clipping coupons and looking for sales.
As Ramit Sethi espouses, there’s a much more strict limit on how much we can save than what we can earn. That is, when we’re already saving hard and scrimping every penny, the amount of effort required to save an extra $1000 is astronomical compared to the effort to earn $100, even at a low wage.
Remember, time is still our most valuable resource.
For TheGun-For-Hire, or The Beginner or striving towards becoming one, we must remember that this is a temporary stop on our way to the next level and beyond.
Model 3: The Worker
This is the zone most people strive for and most end up staying in, unless an economic downturn dumps The Worker and a bunch of their pals into the first couple zones.
The Worker has a high enough wage that the necessities of life are never in question. There is comfort and security, but a lot of pressure and a lot of things that could go wrong.
Beyond that, there’s a huge income range possible. The Worker might make $8,000 a year, living in Thailand and teaching English. Or they might be making $100,000 as a lawyer in Los Angeles.
The factor tying the people in this group together is that all their income is tied to their work – selling their time and labor for money.
People in this group aren’t investing their income in assets, outside a minority who may have a company-enforced retirement plan or an even smaller group that does a bit of their own retirement investing.
This is the living month-to-month zone, where everything is fine so long as nothing drastic changes, but getting laid off or having a medical emergency could prove disastrous.
Why? Because The Worker hasn’t yet been able to separate their income from their expenses. That is, as an individual’s income increases, they end up buying more things more-or-less directly in line with their new income.
Sadly, this accounts for an overwhelming majority of individuals, many or most of whom have great intentions to save and invest for the future, but never learn how to direct their behavior to do so.
Model 4: The Saver
The saver is the transition point between financial richness and poorness. The people in this category not only realize the importance of investing for the future, but have taken an important step in that direction.
Every month, The Saver puts aside a portion of their paycheck instead of spending it on bills, toys, knick knacks, home upgrades, nights out, and other goodies.
Most likely, they’ve discovered one of the Golden Rules of Investing: Paying Yourself First – putting aside savings before counting their lifestyle expenses.
They hope that by saving diligently enough, they’ll one day have enough to retire and have work be an optional endeavor.
This is a good start, but it’s not enough.
For The Saver has one critical weakness – a high risk portfolio, namely – cash.
While The Saver is usually doing a good job of contributing to their retirement fund, they also keep a large part of their savings in cash.
The problem with this is that money has no intrinsic value, not counting the heat we can generate from burning it, and is therefore a very risky investment. If the markets were ever to take a rapid turn for the worst, all that cash might become the victim of massive inflation, poor exchange rates, or other forms of devaluation.
However, The Saver is putting themselves in the perfect position to succeed. There’s nothing wrong whatsoever with being a saver while trying to figure out how exactly to move to the next level…
Model 5: The Investor
The Investor is the first individual we’ve met who is acting like a rich person. In fact, we can call the investor a future rich person, because they’ve taken the necessary step to reach financial independence.
The investor has turned some of their blood, sweat, tears, and hard earned cash into an asset – any financial instrument that generates an income independent of time investment.
This might be a meticulously curated stock portfolio, rental property, a business, music royalties, or anything else.
The magic is that a percentage of The Investors monthly expenses are being wiped out automatically – decreasing the work load necessary to make end’s meet.
However, The Investor has to remain diligent, and make sure that their expenses don’t rise to match their increased income. Otherwise what we have is really The Worker masquerading as an investor.
This is why it’s critically important to have already learned the lesson “pay yourself first,” and why even The Gun For Hire and The Beginner should start putting away even a tiny pittance every time they make some money – to build the skill and habit.
If this habit is firmly in place, The Investor’s next step is simple, continue investing in assets until all of their expenses are covered by asset income and not work income.
To this end, The Investor needs to determine for themselves whether to decrease their workload (and therefore work income), or continue working in order to invest more money more quickly.
Say for example, The Investor deals with rental homes. In this case, it most likely makes sense to work so they can acquire another property sooner.
On the other hand, if The Investor develops iPhone apps, they might be better off writing new code or marketing their existing apps.
It all depends on context. But have success, and soon we’ll see
Model 6: The Success
The success has seemingly won the game. Their assets cover their liabilities, and they can now lead their chosen lifestyle without the obligation of wage-work.
The Success can pursue their personal goals at their leisure.
Anyone who makes it this far deserves a serious pat on the back.
But we’re not quite done.
And here’s another Golden Rule of Investing: It’s not how much you make, it’s how much you keep.
The Success has their liabilities covered – today. But what about the future? What if the market changes and some of their assets stop producing, or their expenses rise, or the rush of wealth is too much to handle and they start spending money extravagantly and irresponsibly?
The Success still has 1 task left: to consolidate their wealth to withstand any shocks in the marketplace.
This generally means diversifying one’s assets – or not putting all of one’s eggs in their basket. Not only investing in the stock market, or not only investing in technology stocks, or not only in real estate, precious metals, rare stamps, or whatever it is that is The Success’ “bread and butter” investment.
Furthermore, there’s a separate, financial goal to achieve: We don’t want to be exactly even between our asset income and expenses, we want a cushion to allow us to adapt to any market changes without having an immediate and devastating effect on our income and lifestyle.
A 2:1 income to expense ratio will be plenty, and The Success is in a perfect place to reinvest their income and make this happen relatively quickly.
Model 7: The Rich
At last, we come to the end of our financial road: The Rich
Of course, there is no real limit to how much money we can earn, and we can continue investing in more and more assets until we have no more time to manage it all.
But this is silliness. This is financial richness but life-poorness.
The Rich’s expenses are less than 50% of their asset income. Now that they are rich, they are able to devote the vast majority of their time to enriching their lives and the lives of those around them.
Hopefully, they have been ding this the entire time, but now they also have the backing of a large budget and a substantial amount of free time.
The Rich still works, it’s just that they work for their own purposes and their own goals – often for the betterment of some aspect of society. It’s easy, when they don’t have to worry about their paycheck at the end of the month.
Relaxed management of assets and reinvestment of a percentage of profits in relatively risk-free financial instruments will help The Rich stay one step ahead of changing market conditions.
And while financial freedom is no guarantee of happiness, it’s stacking the odds in our favor – especially if we had to learn how to master money on our own, and weren’t just handed a massive sum of it by birthright.
Studies have shown that two of the best ways money buys happiness is in improved health (medical care and food quality) and in experiences had – as forming strong and meaningful memories is linked to a sense of fulfillment, well-being, and sense of purpose.
And if, right now, you find yourself looking in the mirror and see The Gun-For-Hire or The Beginner staring back, don’t despair!
The road may look long and uncertain, but the path is reliable. You just need a map that works. Assets are the key, and it doesn’t take much more than this understanding to get started.
You’ve probably heard the news that Russian is a hard language for native English speakers to learn.
Certainly, with Russia having a culture somewhat isolated from (and sadly, often perceived as the enemy of) North American/Western European culture, it’s easy to feel like this slavic language is a world apart from ours.
My philosophy about languages has always included 2 key points: That the hardest language we’re ever going to learn was our first language; And that it makes far more sense – as a language enthusiast, aspiring polyglot, or fan of a particular culture/region, to look for the things that make a language easy to learn!
So let’s take a little closer at Russian, and see what all the fuss is about.
The Russian Language
Russian is the 2nd foreign language in my Polyglot Challenge (after French). Spoken by around 260 million people worldwide, this often-overlooked language choice is a great way to open up a wealth of understanding of historical, cultural, and modern-geopolitical events.
Furthermore, it is closely related to many other languages, including Polish, Ukrainian, Belorussian, and Czech.
Having Russian under your belt is close to a must for any serious long term traveler, as it opens up basically all the territory of the old Soviet Union, which generally either use Russian as an official language or as a common means of conducting personal and professional affairs.
If you’ve been interested in learning Russian, you’ve probably encountered the opinion that it’s a really difficult language to learn.
At first glance this seems to be the case, as the Russian language includes:
Challenging grammatical constructs not present in English (including cases, verbal aspects and verbs of motion)
A sound bank that combines consonants in ways that will shock you
And a scaaary, 32 letter alphabet that looks like this:
And to top it off, this alphabet has some mind-twisting relationships with English. The Russian ‘N’ is ‘Н‘; V becomes В; and the Russian “R” is “Р” – ouch!
But having actually taken the time to make the Russian language and many of its speakers my friends, I’ve come to realize that, despite all the hype, Russian isn’t nearly as hard or as scary as the naysayers think. And I’ve compiled this list of 6 reasons to show you why:
1. The alphabet is largely phonetic:
That is, there are a small handful of exceptions to normal pronunciation rules, but they’re relatively few and easy to pick up. Compare this to the rampant non-logic of the spelling systems used by English or French. Other than that, words are pronounced exactly as they’re written.
It only takes half an hour or so to learn the alphabet, an hour and you can probably understand the pronunciation rules for any word. It’ll take longer to train your muscles to make some of the sounds, but this daunting-looking alphabet is extremely user friendly!
Also, consider this, the English alphabet of 26 letters has to represent over 40 distinct sounds used to form English words (the exact number depends on dialect), with Russian, we’re much closer to a 1 sound – 1 letter relationship.
2. You Already Know 1000s of words!
There are a warehouse full of Latin/Greek/English/German cognates just waiting to be used. This also makes the alphabet that much easier to absorb. Just take a look at these examples:
номер — number
океан — ocean
видео — video
водка — vodka
гитара — guitar
Modern Russian also uses a lot of verbs taken from English:
парковать (pronounced «parkovat» – to park)
модифицировать (pronounced «modifizirobat» – to modify)
фотографировать (pronounced «fotografirovat» – to photograph)
I bet you never thought you’d be understanding Russian so fast, right?
#3. Grammar Tricks Galore: Verbs
Like in English and the Romance languages (as well as may others), any time you have a sequence of verbs, the second and third verbs are always in the infinitive. For those who hate grammar, some examples:
I wantto see my brother.
I needto eat my sandwich
I’m goingto wait to eat my sandwich
This means that by using the verbs: to want, to go, to need – and occasionally others – at the start of our sentences, we can immediately get new verbs into action without having to memorize their conjugations. (Of course, we should do this eventually, but a fast start breeds confidence and desire to continue!)
#4 More Grammar Tricks: Tenses
This isn’t so much as a trick, but a feature. Russian only has 3 real tenses – past, present, and future – and they’re ridiculously easy to form. The past tense forms are essentially the same for every verb with a small minority of irregular forms (that are also easy to predict/learn).
The future tense is also a cakewalk, by adding the helping verb “will be” a beginner can easily form future constucts.
This is a byproduct of something called “verb aspect” in Russian grammar, which has to do with the state of completion of a given action. Makes for some initial confusion because it’s unfamiliar, but once we get familiar, it’s far less “stuff” than say, Spanish, with a crazy number of tenses and moods that need to be leaned.
All the insane looking grammar tables that most people try to memorize a bunch of rules to, are mostly just sound patterns – with lots of similarities to English. Say the following words out loud:
confess (kon-fes) : confession (kon-fesh-un)
act (akt) – action (ak-shun)
Russian does the same thing, and the patterns, one again, become predictable once they gain a bit of familiarity. For instance, take the Russian word for “rare” and “more rare” (“rarer”):
редко (red-ko)– реже (re-zhe)
or “to lead” and “I lead”
Водить (Vodit) – Вожу (Vo-zhoo)
One of the reasons I consider language to be a sport of sorts is that body mechanics are just as important as mental gymnastics.
Most people try to learn a language by memorizing rules as if their brains are built for linear computation. I prefer Benny the Irish Polyglot’s approach, which starts from speaking.
By training our speech organs, we will end up making the right sound changes because just like in English, they make things easier to say.
Our words worlda, coulda, gonna, hafta and so on are more examples of this.
If we look at the language as a library of sounds and not a library of mathematical formulae, we’ll find that Russian, and especially the fearsome “case system,” is actually not all that tough, and quite beautiful.
#5 Flexible word order.
Unlike English, where you can’t change the order of words unless you want to:
A – impersonate Master Yoda and/or Dr. Seuss. Or…
B – be completely incomprehensible (occasionally fun, but rarely effective)
In Russian, word order is much more flexible. While we can’t throw any random pile of words together and expect to be understood, we can forget about obligatory abiding to the strict word order of languages like French and English in order to be understood.
This is thanks to the “case system” – which shows us what role each part of a sentence is playing. So the bane of many a Russian-learner make the language easier in another sense, and also allows us to craft our speech with a different (I’d argue) degree of artistry, depending on what we would like to emphasize.
It’s hard to express how useful this really is without getting in there and doing it. But when your brain is searching wildly for vocabulary as you’re trying to explain to your cab driver where you want to go, you’ll be glad he’ll understand you even if the order of the words is – by our standards – “wrong.”
#6 The hardest thing to overcome is our own expectations:
Most Russian learners expect Russian to be difficult. This becomes a self-fulfilling prophecy, because when we have this attitude, we will inevitably find reasons for it to be difficult.
Chinese and Arbic have different and unfamiliar writing systems, Thai and Swahili have some incredible sound combinations, Finnish and Polish have noun-cases, Japanese and Hungarian have a Subject-Object-Verb word order.
Each of these languages has millions of speakers, and amazingly, competent native speakers of any language develop at about the same rate – anywhere in the world.
There’s something that is going to be unfamiliar about any foreign language – that doesn’t mean it’s hard or impossible.
If we really want to learn a language, we can’t fight with it. We can’t make it an enemy to overcome.
Instead, it makes much more sense to focus on reasons why we love the language, reasons to continue learning, and reasons that this learning can be easy.
We have to take the pecularities of a given language and learn to love them, to learn to love the way we can express ourselves in a totally new and unforseen way by mastering this aspect of the language.
Russian is no different. It has it’s sticky points, but exactly those things that give Russian it’s flavor – delightful, exotic, enticing. After 3 months of dedicated study, I know Russian well enough to feel confident on my own, communicating out there in the world without a dictionary or translator to help, and my abilities will only continue to improve.
You can do the same. And it all starts with believing you can do it.
And you can. The proof is in the word the words you just read.
That is – the fact that you read them. You already learned the most difficult language you could ever learn: Your first.
For me, blogging is more than a way to codify the insight I gather as I travel the world, it’s also a great way for me to create opportunities for myself.
As a traveler, it’s a way for me to introduce myself to new people and get offered a place to stay (either with CouchSurfing or in person).
As a professional, it displays my skill with the English language and some aspects of marketing.
And personally, it gives me the opportunity to earn an income.
I figure the last reason is the most tempting reason to blog for most folks.
And while I’m hardly world-famous, my blog – by the numbers – is a relative success, with over 16,000 visitors coming from around the globe in a 30 day period towards the end of 2014.
Most bloggers I know, including my past self, would love to have that kind of traction.
But it’s decidedly uncommon, and it’s only going to get harder as time goes by.
According to the numbers, there are over 152 million blogs (and that was in 2013), and millions of blog posts published every day.
Less than 1 million blogs get over 1,000 visitors per month.
That means that only 0.5% of bloggers are cracking 1,000 visitors per month – and that’s not going to be enough for most bloggers to stick with it, make the impact they want, or turn their passion into a business.
The rest of these blogs are – from a traffic and revenue standpoint – failures.
The sad thing is that amongst this 99.5%, there are a ton of bloggers who worked really hard, pumping out great content day in and day out, only to burn out, get discouraged, and finally quit when they realized their work wasn’t paying off.
They watched as other blogs they followed grew and profited, and wondered where they went wrong.
Maybe that person is you.
And the big, burning question you want answered is WHY?
Why do most blogs fail? And how do the select few who beat the rather stark odds do it?
I’ve identified 7 reasons most blogs fail. These are the things derailing the majority of novice and intermediate bloggers.
More importantly, I’ve also outlined strategies for beating the odds and joining the lucky half-percent that “make it” in the universe of content creation.
#1. The mathematical reality.
With over 100 trillion pages on the web, and over 152 million blogs, the odds are immediately against anyone who wants to make inroads into blogging.
And anyone who tells you there’s room for everyone who tries hard is full of shit.
When you started your blog you were full of energy and passion. You did try hard. So did many others. Effort wasn’t the decisive factor.
Let’s get a good look at the reality, because it will help us understand the enormity of the task at hand.
The average person reads between 5-10 blogs. Which means that the average blog is read by 5-10 people. If you consider all the blogs that get millions of readers gracing their pages, that means there are a lot of blogs out there that get almost no attention.
Another way to look at this is: There is a finite amount of human attention to be divvied up. 7 billion people, each with 24 hours a day.
That’s the ceiling. As of 2014, not all of that time is spent online, and even if it was, it STILL wouldn’t be possible for every blog to get boatloads of attention.
You may be familiar with the 80/20 rule of distribution: It’s a mathematical pattern where 80% of the results come from 20% of the inputs. So, for instance, 20% of the websites get 80% of the traffic – though actually it’s probably more like the 99/1 rule for web traffic.
This is also known as a “long tail” distribution, and looks something like this:
My website is right around the 1,000,000 mark on Alexa.com, a website which ranks the world’s top websites – and I just started averaging 100 visitors a day this month (July 2014).
(Though I highly recommend Chris Anderson’s book “The Long Tail” for more delicious data)
Hate to say it, but if your goals are lots of followers and lots of profits, then it is a contest – one that most people must necessarily lose.
Can you earn dollars and cents for 100 or 1000 visitors a month?
Sure. But if you value your time at all, then you may want to consider a job as a farmer in Ethopia as a step up the economic ladder.
[yellowbox]What it means: If you want to succeed you can’t just “wing it.” You need to learn what successful writers do to become a success.[/yellowbox]
Working longer and harder is not the answer. Remember: All the other folks in the long tail with you are trying to work longer and harder too.
#2. Investing all their time and energy writing for someone else’s website
Initially I didn’t really think of this as a bloggers issue, but then I though about my network and realized I know a ton of would-be bloggers who don’t even spend their writing time creating content (or promoting) their own website.
That’s right. Lots of bloggers…aren’t blogging.
As a gung-ho newbie, writing for article websites such as HubPages, InfoBarrel and Squidoo is a great way to get started because these sites have an established authority.
You can start getting traffic and earning money without learning too many marketing skills. Back when I wrote for InfoBarrel, I made money in my first week, and ramped that up to hundereds of dollars a month and 10,000+ visitors within 100 days.
However, as a lot of writers find out, there seems to be a rather low ceiling on earning with this strategy. The fraction of a percent that do make decent money skew the image we get of the true potential of writing for these sites.
They have a ton of weaknesses:
A ton of low quality content that Google will probably de-value over time
A rather forced earning strategy – visitors need to click ads
Initial success can make writers believe they have good strategies and tactics, when really they’re capitalizing on the strength of the platform. In the long run, their lack of marketing skills prevent improving their results and massive confusion as to why.
No control over how the site is run
No control over how your content is used/displayed
A decent percentage of the payoff from your work goes to the article hosting site
No long-term establishment of your personal portfolio or brand, in 99.9% of cases.
[YellowBox]The Alternative: If you’re going to be publishing articles on the web, do so primarily on your own website. That way you keep the rights to your content, you get to keep all the profit, and you’ll get honest feedback about whether your strategy works or not.[/yellowbox]
Plus: Access to [Google] analytics data, the ability to build an email/subscriber list, and no worries about getting slammed by Google because of what another person publishes.
#3. Their content is painfully mediocre
I recently read an article titled “How to succeed as a writer if you’re not an expert at anything.” Lots of blogging-about-blogging websites seem to support this idea. Maybe because they need prospective writers to believe it in order to sell blogging books, blogging classes, and blogging webinars and seminars.
I’d say the statistics tell a different story.
Most writers don’t make much money online – even the relatively talented ones. Refer to the mathematical reality again if need be. In this field, not being good at anything is a recipe for disaster.
Most writers are mediocre at a handful of things and excel at very little. Most content is other people’s content rehashed and repackaged. “Me too” blogging in action.
But readers don’t like the taste of re-fried genericism and they can smell the boring from a mile away. If you want to stand out and join the 20% 0.2% who do succeed, then exceptional is the minimum quality standard.
What is exceptional you ask? Let me show you:
In 2011, Luminita Saviuc wrote an article called “15 Things You Should Give Up To Be Happy.” The post got over 1 million social media shares and landed her all sorts of media offers. The post was a fairly run-of-the-mill list post, featuring a heading with 2-3 sentences describing it, then the next. She did include quotes of famous people which were a nice touch.
This sort of post has basically become the standard for the “advice” industry. If you go to MarcAndAngel.com, which is the most popular blog of this type run by just one – okay two – people, you’ll see that Every. Single. Freakin’. Post is of this variety.
They are firmly entrenched in first place, with plenty of copycats in the wings. If you wanted to join the upper echelons of advice blogging, you would have to do better.
Then, in a moment of serendipity, I stumbled across this, basically a duplicate of Luminita’s post from 2011, only with even less content, on the sometimes-shockingly popular website MindBodyGreen:
I cut off the intro and conclusion, but you probably get the point.
I feel badly about outing some well meaning writer who probably loves helping people and has the best intentions in the world.
Someone who is trying to climb the ranks of blogging stardom with the same thing everyone else is doing: the bare minimum. It makes for a great case study so we can all learn (feel free to point out the flaws in my style – I ain’t perfect either!)
It is now the authoritative resource on this topic. 99.9% of writers will look at that and hang up their pens and pencils, because it’s just too much damn work to compete with.
But it’s the only way to succeed. Look at the stats again. You’ve gotta be in the top 1% and more. Authoritative resources that people want to read, want to share, want to come back to time and again are the way to exit the “long tail” and reach up-up-up into the treetops where the succulent, untapped, golden fruits of profit hang.
Fortunately, there are a ton of resources around the web that can help you produce content like a rock star.
There are so many possible activities a blogger can do that I think turning them all into a bullet list might be hazardous to my health.
Research, content writing, guest posting, commenting on other blogs, updating social media, writing an email to our list, tweaking our website, and checking our opt-in rates only scratch the surface.
The sheer volume of choice and the uncertainty that results can turn a day of work into a procrastination party where we check email, then our stats, then our social media accounts, then email again…
Whereas experienced and successful bloggers tend to know what the highest and best use of their time is and simply get more done, day in and day out, than wannabe blogging sensations do. They know how to manage themselves, their workflow, and their time to get the most out of their work day, and they are consistent executors.
Fortunately, getting more done is a learnable skill that largely revolves around how we organize our lifestyle.
For beginners who don’t have any strategy for themselves or their blogging efforts, the mental loop looks something like this:
SomeGuy has launched his website EasyInternetBillions.com to teach other marketers how to make billions of dollars with their blogging business. He’s had 287 visitors so far. He’s not exactly sure what to do next, so after checking his email one last time he writes another article about effective blog commenting strategies. Or he reverts to any other activity that’s easy, familiar, and comfortable.
If you’re not seeing the results you want – and statistically that’s likely, then continuing to do the exact same things that have got you to this point aren’t a formula for success. It’s said insanity is doing the same thing over and over and expecting different results, but I’d call that futility.
If we want different results, we’re going to have to experiment with a bunch of new tactics.
Which brings us to the second half of the reasons most bloggers fail – the concrete tactics that we need to execute in order to grow our blogging business.
#5. They don’t market their writing
Derek Halpern from Social Triggers has an elegant idea about content creation versus content marketing: If you write a post that is of use to the 100 people that come to your website, doesn’t it make much more sense to get that same content in front of 1,000 or 10,000 or even 100,000 more eyes than it is to write another piece for 100 people?
There are a few writers that can churn out fresh content every day – or close to it (MarksDailyApple.com, ZenHabits.net). But to have the luxury to do so you need to either be a success already, not care about building your blog, or have some miracle alignment of factors come into play such as being discovered, getting excellent search engine rankings for a popular phrase, be able to pay someone to do your writing, or be damn stubborn the way few others can.
For most mere mortals, content creation alone is not a success strategy.
There’s an important additional psychological factor at play, which Derek discusses on his site: How it’s hard to stick to any activity (diets, blogging, waking up early) if we’re not getting some sort of positive feedback. All the more reason to promote what you have and bring new readers in.
If you find the marketing aspect of writing tedious, confusing, boring, or otherwise not worth your while, then you either need to reexamine if this is something you truly want to pursue as a career-esque endeavor, or you’ve got to find a way to make it more enjoyable.
Try this on for size: If you really love what you write, then imagine the joy of sharing your passion with thousands of people. It’s great if your mom likes your blog, but it would be incredible if this thing you poured the very essence of your soul into could be seen by a million people.
That is why marketing should be a priority.
I don’t have too many strong recommendations, because most marketing advice falls into the black hole of mediocrity we discussed earlier. The most relevant and actionable I have found which I can attest to are:
As nice as it is to log into Google Analytics and see 1,000 new visitors arrived at your site while you slept, traffic is not the goal.
In fact, this sort of vanity traffic can distract us from the fact that we’re actually not making any progress on the business side of our writing adventure.
Traffic needs to be converted into a subscriber list – a group of people interested in what you have to say, that want to hear from you and eventually either buy your stuff or take your recommendations.
The old adage “the money is in the list” is great for affiliates for AWeber and other email marketing platforms – but it happens to be true.
If I launched a product tomorrow, the random traffic flowing through my page might stumble across it, sure, but my email list would surely see it because I could tell them directly. Plus – they’re the people who most likely want to know – as they asked to receive my emails.
Even if you’re not a savvy email marketer and you don’t know how to structure a clever, high-conversion campaign, the fact that you’re starting your list building activities now puts you ahead of many other writers, and will let you learn over time.
Remember: Nobody starts with 100,000 email subscribers. Getting your first subscriber (who isn’t a family member or friend) will be your toughest subscriber, and things will pick up.
When it comes to managing your email marketing campaigns, I recommend:
MailChimp: It’s free (up to 500 subscribers)! Huzzah! So no worries about wasting $20 a month on something that’s not earning profits for you.
AWeber: No affiliate link here – as I don’t currently use it, but when I stop using my current provider (a complex membership management service) because I need better data – AWeber will be my choice. Affordable, reliable, and reasonably user friendly for my fellow technophobics. I’ve used it on projects in the past and it’s mercifully user-friendy.
Chances are, when you first start out trying to build a subscriber list, you won’t get very many opt ins.But it’s time to start.
But here are some simple starter tactics anyone can implement in mere minutes to improve their conversion rates:
1) Put a glowing testimonial below the sign in box.
In my opinion, this is even stronger social proof than the “join 329,547 readers” messages we always see, because it gives a concrete reason why I should care. And it’s less of a cliche.
If you already have a massive number of subscribers it’s worth testing, but for beginners, one glowing testimonial will make a nice difference.
Don’t have a testimonial? You must know at least 1 person who would be willing to say something nice about you. Send them an email right now and ask (that’s what I did!)
2) Put a “Learn More” link for those uncertain users.
When you make your “pitch” for your newsletter, include a link to a page where users can learn more – I use my about page (see point #4 below as to why).
For some strange reason, people are more likely to take any action when provided with a choice – and giving them an alternative to opt-in in will actually increase the number of signups you get!
3) Change the “Submit” or “Sign Up” text to something more exciting.
People don’t actually want your newsletter, they want some tangible benefit. Now, your button can’t give them that benefit, but it can create a different vibe than “get your daily email.” Mine is “Hit It!” Other ideas are: “Let’s Go”, “I’m In!”, and “Get Started.”
2) Put 2-3 opt in boxes on your About page
For most sites this is the 2nd most visited page after the homepage. It’s a perfect place to get extra subscribers. I get 10-20% of my opt-ins from my About page, depending on the traffic source.
Learned this one from who else, but Derek Halpern.
5) Use a pop-up?
I find them annoying, so I’m giving this a lukewarm recommendation because while they work – and work quite well, I think in many cases it diminishes user experience too much. You be the judge.
6) Offer a freebook – or don’t (strategically)
Most blogs offer a free bribe of some sort to entice people to sign up.
The problem is, most people have seen these offers so many times that they don’t care about your 10 page report. However, if you’re offering something for free, some percentage of your visitors are bound to be enticed, assuming it’s not completely irrelevant. (Think: “10 page report on the discrepancies between escalator speed and escalator handrail speed.” Boring!)
I take a different approach. I point out that I’m not going to bribe my readers with a freebie. It sort of implies that we both understand the marketing game, and I’m showing respect by not trying to sucker them in to accepting a poisoned apple.
Then, on the inside, I offer them a bunch of free content that wasn’t advertised at all. Always over-deliver on your promises!
#7. No Product
I can’t help but laugh when I see questions on forums like “why can’t I make money online – what am I doing wrong – haaaaalp me!”
I understand it, as I’ve been there too, but there usually one fatal flaw that all writers have to deal with at some point (and the sooner, the better).
They have no product.
So, until you have a product (or an affiliate product you can truly vouch for) – there’s no sense asking why you’re not making more money.
And really, if you’re just starting out – make it easy on yourself.
Finding an affiliate product that has a track record of producing results is a much better starting point than trying to build a product when you have no experience.
For instance, Pat Flynn from SmartPassiveIncome.com makes something like $50k a month promoting BlueHost. Craziness!
When you build your subscriber list, as outlined above, and you produce a ton of great content, you won’t be able to avoid getting useful feedback as to what your reader’s biggest problems, hopes, and fears are.
Especially if you ask. My first email pointedly asks readers, “What’s your biggest challenge right now?” You can do one better by asking what the challenge is about (“What’s your biggest challenge with weight loss right now?”)
Not everyone answers of course, but the ones that do are probably a good indicator of the most pressing concerns held by your small-but-growing community.
Marketers like Jon Morrow and Lee McIntyre think that starting with a high-end “service” product (1-on-1 teaching for example) is the best way to start for a number of reasons:
You don’t have to make anything
You’re able to provide a much higher level of service than with ebooks, audio, and video (1-on-1 time means real problem solving!)
You can learn exactly where the sticky points are so your future products kick ass
Much higher profits
You don’t have to go overboard promoting yourself, but you can occasionally let your audience know you have something available.
On the flip side, it’s okay to go the Facebook/Youtube route and build up a large fan base first – in some ways that makes selecting a product easier, after all, by having a mass of followers it’s easy to see what content is a home run and what content falls flat.
However, the sooner we come to grips with the fact that we have to make an offer in order to make sales and therefore be in business, the better.
These 7 strategies have a lot of meat to them, so take your time and chew thoroughly. You don’t have to apply it all at once, but you DO have to apply it! Start with whatever jumped out at you the most and keep working through the list (you might wanna bookmark it for future reference).
How would you like to be able to fluently speak another language?
Growing up in an English speaking society, relatively sheltered from other languages in the middle of the Canadian prairie, I never gave much attention to this question. And I certainly never entertained the ideas of becoming a polyglot.
My only experience with another language had been the mandatory French lessons for 5-6 years in school. Like it is for many, this was a gruelling exercise, not a fun and exciting means of opening a new culture to me.
In short, after receiving this education my abilities were abysmal – just about matching my interest level.
It never occurred to me that in so many places arund the globe, fluently speaking multiple languages is closer to a fact of life than unheard of.
And it never occured to me that beging bilingual – or even a polyglot – could be one of the most interesting and rewarding aspects of my life.
Now, having been to the far-flung corners of the Earth and hearing exemplary English spoken from Kuala Lumpur, Malaysia, to Helsinki, Finland, I want in.
After all, I’m going to be traveling the worldanyway. It’s only a small logical step to learn the languages of the world as well. Another sort of travel, really.
In brief, the Polyglot Challenge is my journey of self discovery, so see if an ordinary, every-day sort of dude can learn to speak with people – wherever I go – in their native toungue.
Of course, there’s not enough time to learn the world’s 1000s of languages, but I’m not doing this for some arbitrary sense of completion or perfection. It’s about continual growth and development. It’s about communication and relating to people as deeply and honestly as possible. It’s about respect.
Why Become a Polyglot?
In general, I think the endeavor of learning is important for every human being to feel full – or fullfilled. For me, that used to be guitar. Now – it’s languages.
But this reason is only the tip of the iceberg when it comes to good reasons for language learning.
At the heart of it, learning languages is all about people. About experiencing a new culture from the inside, about understanding and respect, about the deep thrill and joy of relating to someone half a world away.
But why languages – plural?
I actually think that, in a strange sort of way, it’s easier to learn many languages than to learn just 1 new one.
The advantage of learning many languages is that it forces us to take a really close look at our approach to learning.
If we only want a second language, we can probably afford to take 5 years or more to reach a high level. It’s easier to be satisfied with “adequate” and not push ourselves beyond our comfort zone.
Whereas the comfort zone is enemy #1 of the aspiring polyglot.
To learn many languages, we have to care about the efficiency of our learning process. We have to maximise our ability to use our memory, deconstruct the challenges in a target language, master the mechanics of our speech organ, improve our ear, and so on.
That is, we have to develop the fundamental skills that affect our ability to learn any/every language.
Even if our goal is to only learn 1 other language, I think this mindset can help us achieve much better results than is typical. Why do guys like Benny the Irish Polyglot only need 3-6 months to learn a new language, whereas the averge, everyday language student usually needs 3-6 years?
How Fast Can A Language Be Learned?
Is it really possible to be fluent in 3 months as Benny claims, or in 6 as Chris Lonsdale describes in this TEDx talk?
My answer is yes, but I think that for most people, getting such a result on their first attempt at an additional language is unlikely, because we have so much to discover about the mechanics of learning, and so many of our own fears, doubts, and bad habits to overcome.
For me, I didn’t succeed at speaking native level French or Russian within 3 months.
However, the results I got were encouraging. I read The Da Vinci Code & Game of Thrones in French and regularly conversed with locals in both French and Russian, which are fairly respectable results. Maybe not world-class – yet – but by fine tuning my methods, I have little doubt that such results are achievable.
Which brings me to one of the most important aspects of language learning:
The goal isn’t to achieve some vague idea of “fluency.” That line can always be moved. Even in English, there are words I don’t know and concepts about which I’m not capable of having a deep conversation. And the same goes for everyone. Gaps don’t make us any less fluent speakers of our native language.
This is why, in our target language(s), it’s important to have some concrete targets, or “mini goals.”
For example, reading Game of Thrones in my target language is a lofty goal, as this book is a tough read in English. But it’s concrete, tangible, and verifyable. I know if I’ve done it, and the people around me can vouch for my success or failure. Whereas “fluency” is much harder to verify in the same sense.
So for myself I’ve come up with some general mini-goals to hit in any language:
Read The Da Vinci Code (Intermediate) and Game of Thrones (Advanced)
Give a language-learning presentation in my target language
*The Common European Framework of Reference for Languages has 6 levels, A1, A2, B1, B2, C1, and C2, ranging from beginner through to advanced/native level mastery.
The one problem with these goals is that they don’t translate into acquiring advanced speaking abilities. Thus, these are basically benchmarks to roughly gauge my upper limit abilities in a language.
More important, since my primary objective is to be able to speak with people, is exactly that – mini goals related to speaking. But these are situation dependant, and it’s difficult to make a general, cross-language list.
For instance, in Russia I might set a mini goal of being able to discuss the Russian education system with my professor. I’d have to learn a particular set of vocabulary and master of some basic concepts in order to have this conversation. But this exact situation wouldn’t have made sense for me in France, where I lived on a farm. There, my mini-goals were different.
Anyway, I’ll get deeper into the mechanics of language learning later. For now, suffice to say that in my Polyglot Challenge, I’ll be using the previously stated benchmarks as measuring sticks, because for now they’re the best measuring sticks in my toolbox.
Here, I will keep an account of where I’m at in my various languages. And more than that, we’ll be able to see over time how my ability to learn languages has improved – or not.
So far, I can say I’m a reasonably effective communicator in 3 languages: English, French, and Russian. I’ve very briefly dabbled in Portuguese, Thai and Malay/Indonesian.
Current Language – Russian (Intermediate)
Russian, the most challenging least familiar language I’ve really dug into so far. With a different alphabet and lexical roots for many words, it was a fun challenge to get my ear/brain in tune with the harmony and melody of Russian. Mercifully there are still a boatload of latin cognates.
Grammatically, Russian has a lot of sticky spots for native speakers of Romance languages – namely, the case system, whereby the endings of nouns change depending on the role they play in a sentence.
For example, the word “dog” in: “I see a dog” and “The dog sees me” and “I give a cookie to the dog” will have a different form each time.
However, the grammatical difficulties are worth the effort, for Russian is a beautiful language which will open up the culture of the old-Soviet world Russian is either spoken, or a close relative to, the languages spoken in Ukraine, Belarus, Poland, Czech-Republic and many countries ending in -stan.
According to the practice tests I’ve taken, I’m at a B1 or B2 level (Intermediate or Advanced Intermediate)
French was familiar to me growing up, as all Canadians learn French for 5 or 6 years in school. Like most adults, my ability to use the language was effectively nonexistant. 6 months in France (3 in 2010, and again in 2014) took care of that.
Like a lot of language learners, my speaking ability lags behind everything else in French, but when this was an active language for me, I had conversations with friends and strangers alike with a large degree of success. When I went to Malaysia, for example, my first conversation was with a woman from France – who would’ve thought! I probably ended up speaking almost as much French as Malay due to some friendships I developed there.
When this language was in active use, I could read adult level literature. I often use French in order to study additional languages.
I definitely have room to improve, to learn more expressions/idiomatic phrases and to improve my speaking.
Achievements: Read The Da Vinci Code, and Game of Thrones
One week I decided to challenge myself and see how long it would take to learn to read the Portuguese newspaper. Given as I already knew a great deal of French (this was after my 1st sojourn in France) and English, the grammar and vocabulary weren’t to hard to pick up. I only needed to learn sever hundred common (and therefore easy to learn) words in order to have the similarities between these languages to take over.
3 days was all I needed, and I could read the Portuguese news and tell you what was going on in the world.
Naturally, disuse has left me without much ability left, but when I focus on Portuguese again, I will have a basis similar to when I really took an interest in French.
Unfortunately, I only started learning Malay towards the end of my time in Malaysia. As my first stop in Asia, I was constantly checking out new sights and sounds, and I never really took an interest in the language of a country where everyone seemed to speak excellent English.
Several hundred words allowed me to have basic conversations with people at markets or restaurants, but it never got more sophicticated than that.
English is my native language, which I’m only including in this list for the sake of completeness. I guess you could say that some of my crowning achievements in the language are having my writing read by over half a million people and being a guest English professor.
Have you ever wanted to learn another language, but not known how to get started? Or have you learned another language, but want to add more? Then join me in this journey! Let me know in the comments about your own language learning experiences and goals.