10 Stupid Mistakes Made by the Newly Self-Employed

Having been a non-employee for about 14 years now, I’ve made my share of stupid business mistakes.  I’ve also coached a number of people to start their own businesses, and I’ve seen many of them make similar mistakes.  This advice is geared towards small business owners, particularly people who are just starting (or about to start) their own business.
1.  Selling to the wrong people.
While sales are important to the survival of any business, you don’t need to push your business on everyone you meet, including friends and family.  Furthermore, it’s a waste of time to try selling to people who simply don’t need what you’re offering.
Selling to the wrong people includes trying to sell to everyone.  Some customers are much easier to sell to than others.  For example, my wife does web consulting for small business, and she’s learned that some clients are much harder to work with than others.  If a potential customer is broke and obsessively worried about every nickel they spend, if they want a web site but don’t know why, or if they simply don’t understand the Internet well enough, they won’t be a good client in the long run.  Feel free to say no to customers that are more trouble than they’re worth.  Let your competitors sell to them instead.  You’ll save yourself many headaches, and you’ll free up more time to focus on serving the best customers.
Just because someone is interested in doing business with you doesn’t mean you should accept.  In my first year in business, I probably said yes to at least 50% of the people who approached me with a potential business relationship.  I wasted a lot of time pursuing deals that were too much of a stretch to begin with.  I accepted lunch invitations from random business people who just wanted to “see if there’s a way we could do something together.”  Virtually none of them made me a dime.  If you think a meeting is pointless, it probably is.  Don’t network with random people just because you think you’re supposed to network.  Today I accept such invitations less than 1/10 as often.  If an offer doesn’t excite me right away, I usually decline or ignore it.  Most relationships simply aren’t worth pursuing.  Learn to say no to the weak opportunities so you have the capacity to say yes to the golden opportunities.
2.  Spending too much money.
Until you have a steady cashflow coming in, don’t spend your precious start-up cash unless it’s absolutely necessary.  I started my computer games business with about $20,000 cash (my own money), and it went fast; shortly thereafter I was using debt to finance the business.  Unfortunately, the original business model didn’t work, and it took five years before the business was generating a positive cashflow.  I soon learned that every dollar invested in the business was another dollar that eventually had to be recouped from sales.
In 2004 I started this personal development business with only $9 cash even though I could have spent much more on it.  No fancy logo, no snazzy web design, no business cards or stationery.  I paid to register the domain name, and that was it.  That’s as much as I was willing to spend before I started generating a positive cashflow.  All other business expenditures came out of that cashflow.
Your business should put cash into your pocket, so before you “invest” money into it, be clear on how you’re going to pull that cash back out again.
Obviously some businesses require lots of cash to start, but in the age of the Internet business, you can very easily start a lucrative business for pocket change.
3.  Spending too little money.
It’s also a mistake to be too stingy with your cash.  Don’t let frugality get in the way of efficiency.  Take advantage of skilled contractors who can do certain tasks more efficiently than you can.  Buy decent equipment when it’s clear you’ll get your money’s worth.  You don’t have to overspend on fancy furniture, but get functional furniture that helps you be more productive.  Don’t use an antiquated computer with outdated software that slows you down if you can afford something better.
It takes time to develop the wisdom to know when you’re being too tight or too loose with your cash, so if you’re just starting out, get a second opinion.  Often the very thought of getting a second opinion makes the correct choice clear.  If you can’t justify the expenditure to someone you respect, it’s probably a mistake.  On the other hand, there are situations where it’s hard to justify not spending the cash.
4.  Putting on a fake front.
Many one-person businesses refer to themselves as “we.”  That’s something a lot of new entrepreneurs do, but it isn’t necessary.  There’s nothing wrong with a one-person business, especially today.  My games business has mostly been a we over the years, but my personal development business is still an I.  .  It’s perfectly OK to refer to your business as an I when you’re the only one working in it.  Pretending that you’re a we when you’re really an I is a bit silly.  It’s not going to gain you any respect in a way that matters.  Promoting yourself as an I may even be an advantage today, since people will know the buck stops with you, and if you make a promise, you’re the one who will carry it out.  Promises from a we sometimes aren’t worth very much.
If you’re a newly self-employed person, don’t pretend you’re anything else.  Price your products and services fairly for your level of skills and talents.  Some newly self-employed people think they must become actors.  The business they promote to the world is pure fantasy.  Trying to fool your customers in this manner will only backfire.  If you’re so desperate for business that you need to lie, you shouldn’t be starting your own business.  If you can’t provide real value and charge fairly for it, don’t play the game of business.  Develop your skills a bit more first.
5.  Assuming a signed contract will be honored.
I’ve made this mistake more than I care to admit.  I’ve had signed contracts with supposedly reputable corporations, and they weren’t worth squat when the CEO decided he wanted out of the deal, even for completely dishonorable reasons.  Sure I was in the right, but did I want to go to court to enforce it?  No, I’d rather continue doing meaningful work.
A signed contract is just a piece of paper.  What’s behind a signed contract is a relationship.  If the relationship goes sour, the contract won’t save you.  The purpose of a contract is to clearly define everyone’s roles and commitments.  But it’s the relationship, not the paper, that ultimately enforces those commitments.  When I understood this, I focused more on relationships and worried less about what was on paper, and my business deals went much more smoothly.  Once you start falling back on the paper, the deal is already in trouble.  Creative (and lucrative) business deals almost always stray from the paper contracts that represent them.  One of my attorneys, who had worked on dozens of game development deals, told me that no deal he worked on ever followed the contract exactly; most weren’t even close.  And these were big money deals in many cases.  Business relationships are similar to other personal relationships — they twist and turn all over the place.
Written contracts are still necessary, especially when dealing with larger corporations where people come and go, but they’re secondary to relationships.  Just don’t make the mistake of assuming that the contract is the deal.  The contract is only the deal’s shadow.  The real deal is the relationship.  Keep your business relationships in good order, and you won’t have to worry so much about what’s on paper.
It’s sad but true that there are loads of scoundrels in business.  Many of them hold titles like CEO, President, and CFO.  There are indeed people out there who seem to care about nothing but money, and they will lie, cheat, and steal to get it.  In recent years some of the more despicable ones have gotten themselves indicted (or are already behind bars).  But there are plenty of others to whom the word honor has no meaning.  For example, in the computer gaming industry, it isn’t unusual for large publishers to feign interest in certain games and string the developers along.  They give the developer every indication that a deal is pending, but all the developer sees are delays and false verbal promises.  In reality the publisher only wants to keep the game off the market to keep it from competing with one of their own titles; they hope to cause the developer to miss the next Christmas season or to run out of cash and cancel the title altogether.  It happens.  Business, especially the entertainment industry, is not for the timid.
6.  Going against your intuition.
Intuition is just as important in business as it is in other settings.  You’d be amazed at how many gigantic corporate deals are green-lighted or red-lighted because of some CEO’s gut feeling.  While you might think that logic is the language of business, that’s far from reality.  If you base all your business deals on hard logic and ignore your intuition, most likely you’ll be in for a world of hurt.
We humans aren’t very logical to begin with.  We simply don’t have enough data to make truly logical decisions because business deals depend on human beings, and we don’t have a logical system for accurately predicting human behavior.  Not being able to predict how other humans will behave is a pretty big gap in our logic.  And intuition has to fill that gap.  The real performance of human beings is what makes or breaks business deals.  But to assume everyone will perform as expected is unrealistic in the extreme.  No deal ever goes perfectly.
It’s hard to say no to a deal that seems juicy by the numbers when my gut is saying, “You’ll regret it,” but more often than not, I later see evidence my intuition was right all along.  Sometimes I just get a bad read on someone, and then years later, several people I know are complaining about being ripped off by that person.
Intuition is a critical part of the decision-making process in business.  Since business deals depend on relationships, you need to get a read on the other people involved in any deal you consider.  If you get a bad read, walk away.  If you get a good read, proceed with caution.
7.  Being too formal.
I’ll say it again.  Business is built on relationships.  In some settings a certain degree of formality is appropriate, but in most business situations being too formal only gets in the way.  Business relationships work best when there’s a decent human-to-human connection behind them.
I think it’s a mistake to be too formal even when looking to establish new business relationships.  If someone mails me a letter that starts with “Dear Mr. Pavlina” and then goes on to explain a long-winded business proposal, I’ll usually just trash it, especially if it uses the word “we” a lot.  Better to fire off an email with a “Hi Steve,” and just ask me very informally if I’m interested in the kind of arrangement you’re seeking.  It saves time and opens the door to a real human relationship.  Human beings don’t want to build relationships with faceless corporations.  They only want relationships with other human beings… sometimes animals too I suppose.
Treat your business relationships like friendships (or potential friendships).  Formality puts up walls, and walls don’t foster good business relationships.  No one is loyal to a wall… except the one in China.
Formality is boring and tedious.  People want to enjoy their work.  If someone address me like a computer, I’ll respond in kind — by hitting delete.  But if someone demonstrates they have a real personality and a good sense of humor, a connection is far more likely.
8.  Sacrificing your personality quirks.
In the early years of running my games business, I took myself too seriously and assumed that I had to act “businesslike” … whatever that meant.  Being self-employed was a weighty responsibility, and other people were counting on me.  Sink or swim, right?
I started my games business in my early 20s, and people in their early 20s are invariably weird.  But I assumed that as a business owner, being weird wasn’t appropriate or acceptable.  So most of my business letters and emails looked like they were written by the same people who created Microsoft’s EULAs.  The job title of “President” really went to my head.  I learned how to function without a personality.
It took a number of years, but eventually I became comfortable just being myself, especially after my games business became profitable.  Now that I’m a blogger, my personality quirks and unusual experiences are strengths.  My personal oddities give this blog a unique flavor.  If I were to take myself too seriously and write more formally, this blog would be very dull and would likely lose much of its audience.
It’s perfectly OK to be your own weird self and to inject your own unique spirit into your business, especially if you’re in your teens or 20s.  Don’t be afraid to be more like Steve Jobs… and less like Steve Ballmer.  Don’t pretend to be something you’re not.  Ultimately you’ll enjoy your work much more if you attract the kinds of customers and partners that want to work with you for who you are — warts and all.  Send the people who only want to work with androids to your corporate competitors.  They deserve each other. 
If other people can’t handle your weirdness, too bad for them.  Focus your energy on the people who can.
9.  Failing to focus on value creation.
It’s easy to fall into the trap of thinking that the purpose of a business is to make money.  But the real purpose of a business is to create value.  While it’s possible to make money in the short run without creating much value, in the long run it’s unsustainable.  Even criminal organizations have to create value for someone.  When you know your business is just sucking value away from others without providing anything in return, it will erode your self-esteem, and the business won’t be much fun to run.
Why does your business exist?  It exists to provide some sort of value, both for you and your customers.  The better you understand what value you’re trying to provide, the better you’ll be able to focus.  The basic value provided by my games business was cerebral entertainment.  The basic value provided by StevePavlina.com is personal growth.  Too often business owners aren’t clear on what value they’re trying to provide.  They just sell stuff and hope for the best.  That’s a lousy business model.  The world doesn’t need more selling or more stuff.  But it always needs and wants genuine value creation, and that’s where you should direct your efforts.
Presently this web site contains over 400 free articles.  That’s a lot of value creation.  Thousands of people visit each day to receive some of that value.  Helping people grow is the business’ primary aim.
10.  Failing to optimize.
Although value creation is essential to a sustainable business, it’s equally naive to assume you can simply focus on creating value, and the rest will take care of itself.  You may build a business that provides good value but loses money.  As a business owner, you need to find a way to deliver your value in a cost effective manner.  Most likely your first attempt will be very suboptimal.  You’ll waste too much time, money, and resources trying to produce and deliver your value.  That’s OK though.  Many businesses start out that way.  Just don’t let yours stay that way.
Once you have a particular business process in place, pull it apart and re-optimize it from time to time.  Look for ways to make it more efficient.  Can you get it done in less time?  At less cost?  Can you do it less frequently?  Can you outsource it?  Can you dump the process altogether?
I used to process credit orders for my games business manually.  I started the business in 1994, and when I’d receive an order through the mail or via my web site, I’d use some software to input and run the orders by modem.  At the end of each month, I’d manually tally the sales.  That worked fine when sales were low, but it became burdensome as more products were released and sales increased.  Several years ago I upgraded the process such that online orders were fully automated, including instant delivery of the game download.  All orders are recorded in a database, and I can view real-time reports to see how sales are doing for each product.  It took some work to set this up, but it was well worth it.  That one optimization saved me a lot of time and effort, and I don’t have to pay high fees for a third-party order processing service.
Don’t fall into the trap of using archaic methods for doing routine tasks that could be automated, including inventory management, billing, accounting, order processing, communications, and marketing.  If you find yourself doing the same repetitive tasks month after month, make sure you put some effort into optimizing them.  Not optimizing is like throwing time and money down the drain.  It’s often much easier to save time and money than it is to create them.
An Internet business has abundant opportunities for optimization because it’s so easy to try new things and measure the results.  In the first year after launching this site, I experimented quite a bit with Google Adsense.  Many people don’t like the ad layout on this site, but it’s the most effective layout I’ve tried so far.  I use it because it works.   Some people click ads, some people donate, and some do both.  So even though value creation is the primary aim of the business, this is still a for-profit business and needs to generate income in order to be sustainable.  If I don’t eat, I don’t write.  More money means more resources for ongoing value creation.  So value creation and optimization go hand-in-hand.
It takes significant effort to build a successful business, but it’s also a tremendous growth experience.  I know many people who have quit their jobs to run their own businesses.  Many of them didn’t do as well as they’d hoped, but I don’t know any that regretted taking the plunge.  There’s simply no substitute for holding the reins of your own destiny.

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How to Make Lots of Money During a Recession

A recession is possibly the best time to launch a new business or to expand an existing one. It’s also a great time to get ahead in your career. I know this sounds counter-intuitive, so let me ’splain.
First, the media goes nuts during a recession. They turn a little bit of negativity into a mountain of pessimism. This makes a lot of people financially paranoid. People become socially conditioned to expect the worst.
If you buy into this social hysteria, you become a victim too.
But if you tune out such stupidity (not watching TV helps a lot) and maintain a grip on rational thought, you’ll see some amazing opportunities popping up everywhere you look.
During such times people get scared and start cutting back on expenses. They cut some of the fluff from their lives. They stop buying so much stuff they don’t need.
This causes some businesses to do poorly, especially businesses that don’t provide stuff we really need. We can live without new credit cards and gas-guzzling SUVs for a while. Those non-essentials can be put off.
We also become more sensitive to receiving genuine value. When we spend money, we want to make sure we’re getting a fair deal.
Consequently, businesses that provide genuine value can actually do better during a recession. More people will flock to those businesses in tough times, while the fluff businesses will become more and more paranoid.
In the USA there are a lot of fluff businesses. Many are based on the moocher mindset, trying to extract money without providing fair value in exchange. A lot of the dead or dying financial companies are like that. The American auto industry has been contracting as well, at least in part because they’ve been creating inferior products that people don’t really need. (Erin and I own a Honda, despite the fact that we could have gotten a significant discount on GM cars because two of my family members used to work for GM. We looked at some GM cars and quickly concluded they sucked. Other family members weren’t so lucky.)
A lot of people have been learning that job security doesn’t mean much these days. More than 500,000 Americans learned this lesson last month when they lost their “safe and secure” jobs.

The Stupid Approach to Making Money

Lately I’ve seen a lot of people, some of them friends, do some really dumb things in an attempt to earn more money. They buy into lame money-making programs, join and promote useless MLM schemes, and fall prey to scammers.
The common pattern is always the same — they’re focused on trying to make more money. They make it their top priority. They think about it constantly. But they keep getting sucked into trying to make money without providing any real value, and it’s unsustainable.
In the end this sort of thing eventually self-destructs. The only way to succeed with it in the long run is to find lots of suckers and basically rip them off in order to enrich yourself. Most people have a strong enough moral resistance to this sort of thing that they’ll sabotage themselves from going too far with it. This isn’t a path of long-term abundance. It’s a path of scarcity.
As a general rule, the people I know who are most focused on trying to make more money this year are doing worse, not better. In some cases they’re doing much worse. A few have lost or are in the process of losing their homes.
The exceptions are those that are able to sufficiently kill their conscience, so they can remove any incongruencies about ripping people off. But again, this is a pretty rare exception. Most people would rather deal with scarcity than knowingly rip people off to get ahead, so they just make the bare minimum to meet their needs and avoid getting ahead.

The Smart Approach to Making Money

There is a smarter approach, however.
Instead of focusing on trying to make more money, put your time and energy into CREATING and DELIVERING real value. Find a way to give people what they want and/or need.
Take note that the keywords here are CREATE and DELIVER.
Creating value means expressing your unique talents and skills in a way that can potentially benefit others.
Delivering value means ensuring that other people are actually receiving and benefiting from the value you’ve created.
If you don’t do both in some fashion, then it’s going to be hard for you to generate sustainable income, especially during a recession. I’ll explain why.
If you only create value but don’t deliver it, then your value isn’t being received by anyone. So how can you receive value (such as money) in return?
I see this problem a lot with creative types such as would-be artists, musicians, and writers. They may spend lots of time honing their craft, but if they don’t actually get that value into the hands of sufficient numbers of people, they struggle financially, and this hurts them creatively too. A goodly number of these people are currently seeing their homes in foreclosure now.
The sad thing is that some of these people work very hard. But they spend too much time creating and not nearly enough time delivering. They watch people they consider hacks pull ahead of them. The hacks may not be as good on the creative side, but at least they’re getting their value into people’s hands, and on some level people are appreciating their work.
I went down that road myself. In the late 90s, I went bankrupt, even though I was working very long hours and creating a lot of potential value in the form of a computer game my company was developing. My problem was that I didn’t do a good job of getting that value delivered. I relied on publishers to do that, and for various reasons the game was never released. That resulted in years of wasted effort, aside from the valuable learning experience that is. So I know where this road leads because I traveled it.
On the other hand, if you only deliver value but don’t create it, then you’re delivering someone else’s value. This isn’t a terrible approach in the short run, but it’s a short-sighted long-term strategy if this is all you do. There’s nothing particularly special about delivering other people’s value. Anyone can do it. Anyone can sign up for affiliate programs or join an MLM program or become a reseller. If this is your primary means of generating income, your long-term outlook is weak. The better this works for you, the more it will draw competitors into your field. Eventually everyone will be working harder and harder for scraps. This happens all the time. This strategy can be especially weak during a recession, as more people turn to less expensive sources for the same value you deliver, squeezing your profit margins thinner and thinner.
Bloggers fall into this trap when they rehash other people’s content and don’t really have anything unique or compelling to say. A year later their niche is flooded with competitors doing the same thing. And hardly anyone is earning decent income from it.
The most viable long-term strategy is to create AND deliver value. You can mix and match other strategies with it, but this should be your primary method of income generation. If you get good at creating and delivering value, you can basically write your own ticket and enjoy lots of abundance.

A Choice of Mindset

I know a lot of people are dealing with financial challenges these days. Las Vegas is basically the foreclosure capital of the USA right now. I know people who’ve lost their homes. I see “bank owned” signs all over the place.
If you’re going through something like this right now, I totally empathize with you.
However, I have to point out that the pattern of what causes this is so clear, it’s getting a bit ridiculous to see it play out over and over again.
Generally speaking, people who CREATE and DELIVER value are doing just fine. In fact, I’d say most are doing better, not worse. Many of these people are seeing their incomes go up during this time.
People who don’t CREATE and DELIVER value are seeing their finances grow progressively worse. This leads many of them to panic, so they head even further away from creating and delivering value (such as by chasing lame money-making schemes), which only quickens the decline to insolvency.
I know it seems logical that if you’re seeing your finances decline, then you should focus single-mindedly on trying to make more money as quickly as possible. People fall into this trap all the time. I used to fall for it too. This is absolutely the wrong strategy though. I know that must sound counter-intuitive.
The correct strategy is that when you see your finances decline and you want to increase your income, then you need to focus on CREATING and DELIVERING more value. If you do that, then you’re doing the very thing that will generate a sustainable income increase.
What is money? Money is simply a medium for exchanging value. Money is what you receive in exchange for the value you create and deliver. If you can increase your outflow of value creation and delivery, you can increase your inflow of money received.
If, however, you try to increase the inflow of money without increasing the outflow of value, you’re trying to get something for nothing. This approach is untenable and will ultimately collapse. Please don’t waste your time on it.
I actually figured this out right around the time I was declaring bankruptcy. I was totally broke, yet I found a way to focus my energy on creating and delivering value instead of on trying to scrape together more money. Within about six months, I was back on my feet financially, and year after year my financial situation just kept getting better. I started on this path about 9 years ago, and I’ve maintained a nice positive cash flow every year since then.
I know that when you’re in a financial crunch situation, six months may seem like a long time. But it doesn’t matter if it takes you several months or several years to get in the habit of creating and delivering value. The time is going to pass anyway, and this habit will serve you well for life. Be patient and get started. It doesn’t matter what happens to the economy — if you keep creating and delivering value, you’ll do just fine.

A Record Year

Financially, 2008 was the best year ever for Erin and me. Erin had a six-figure year all on her own just from doing readings.
I expect that 2009 will be an even better year for us, regardless of what happens to the economy. How do I know? Because it’s another year we can create and deliver value, adding to what we’ve already created.
Why are we enjoying increases while others are experiencing decline?
First, it helps that we don’t have jobs. I haven’t been employed by someone in more than 16 years. Many people mistakenly assume that being jobless is the riskier route, but that’s nonsense. It’s much less risky to control your own means of creating and delivering value than to be a pawn of some larger entity. No matter how bad the economy gets, Erin and I can’t get fired or laid off. So our career paths enjoy much more stability.
Secondly, while others are tightening up and cutting costs, Erin and I focus our attention on creating and delivering more value to people. The way we go about this may seem a bit counter-intuitive at first glance.

That may not appear to be a very sexy topic. Some people find it totally uninteresting and would prefer that I write about other things. My health articles never make it big on social bookmarking sites, so they don’t generally yield a major traffic boost either.
However, such articles can provide a lot of value to people who are interested in those topics. Many people have made significant lifestyle changes after reading those articles, improving their health and/or enjoying significant weight loss. For some people the benefits have been amazing.
So even though these articles might not seem too exciting at first glance, they make a difference in people’s lives. Obviously they don’t affect everyone equally, but that’s okay. They certainly do a lot of good. They deliver value.
Many bloggers post content with the intention of getting something, such as links, attention, or sales. I’ve done some of that too, but I generally avoid creating that style of content. Instead I remind myself to stay focused on creating and delivering value. I know that when I keep my focus on that side, the rest takes care of itself.
This is an example of such an article. I didn’t write this piece to get something from you. I don’t expect it will become a huge hit. I know that because of the length, many people won’t even bother to read it.
But I also know that for many of the people who take the time to read it, this article has the potential to create some subtle yet helpful shifts. It may give someone the extra insight needed to get moving in a new direction. Someone, somewhere will receive positive value from it.
That’s all I intend with this article. Just provide some kind of benefit to someone who could use a little encouragement in the right direction. It’s not that complicated. This sort of focus inspires me to share what I’ve learned openly and honestly, even if it runs contrary to the way most people think.
I know this approach sounds overly simplistic, but if you get this — if you really get it — then it’s really not that hard to generate plenty of income.

Turning Value Into Income

So how does one generate income from creating and delivering value? Can’t you run into a problem of creating and delivering lots of value and making no money from it?
As it turns out, making money is the easy part. If you can create and deliver value to people, the income opportunities will literally come to you. People will practically line up with ways for you to make money. I’m serious.
Here’s how this works.
If you get good at creating value, you can connect with other people who are good at delivering value. They deliver your value, such as by selling it, and they pay you a royalty, commission, or licensing fee.
For example, Hay House offered me a book deal last year, so I wrote a book called Personal Development for Smart People, and it was published in September. I received an advance for the book, and I’ll also receive ongoing royalties based on sales. I might even receive royalties from this book for the rest of my life, especially since the content is timeless. Also, writing a book has lead to other opportunities, such as paid speaking engagements. So in this case I created the value (the book), but others deliver it.
Now suppose you get good at delivering value. In this case you can generate income by plugging other people’s value into your delivery system. For example, my blog is great at delivering value. It’s a very efficient medium for that. But since I give my value away for free, it doesn’t generate income directly. However, I can generate plenty of income by promoting other people’s products that I like. Then I split the profits from sales with the publisher. I earn six figures a year just from doing that. The product publishers come to me. I get way more offers for this sort of thing than I can handle. It doesn’t require a lot of work to do this. Once you have a system for delivering value, you can plug other people’s value into it and generate lots of extra income.
If you have the means to create AND deliver strong value, you’ll have so many opportunities it will be totally ridiculous. First, you can plug the value you create into other people’s delivery systems, so you can earn ongoing royalties and such. This is easy residual income. I’m still getting checks every month for deals I entered years ago.
Secondly, you can plug other people’s creative value into your own delivery system. You pay them a royalty on the sales, or they pay you as an affiliate. Once again you generate ongoing residual income. As long as you’re selective about the products you promote, doing your best to ensure that they provide strong value, everyone is happy, and everyone wins.
Thirdly, you can plug your value into your own delivery system. Strangely, this is something I haven’t done yet with my blog, although I used to do it all the time with my computer games business. This is something I intend to explore in 2009. It simply means that I could create and sell my own products direct. Many other bloggers have already done this with great success, releasing e-books, audio programs, DVDs, etc. They create the value and sell it directly to their visitors.
A big chunk of the income I received in 2008 was from work I did in previous years. I could do no work for all of 2009 and just live off the residual income I know is coming. That’s a nice situation to be in. It’s no accident though. Years ago I decided that this is how I wanted to set up my financial life, and then I focused on creating and delivering value to make it work. There’s no reason you can’t use the same strategy. It isn’t trademarked.

Avoiding Distraction

Once you develop the habit of creating and delivering value, it’s pretty hard to fail. However, it’s very easy to get distracted along the way. Distraction is perhaps your biggest obstacle.
You can’t get sucked into every money-making scheme that crosses your plate. Getting sucked into a job, where you have to trade hours for dollars, is just as bad. These are dead ends you should avoid by any means.
You have to stay focused on creating and delivering value. Everything that detracts from this focus should be viewed as an expense, obstacle, or just plain evil.
This is so important, but most people just don’t get how important it is.
Getting a job is such a bad idea if you want to enjoy long-term financial abundance. The odds of success on that path are so low, it’s not even worth considering.
Seriously, you are better off being broke and homeless, so you can focus on creating and delivering value from that place. You’re much worse off if you have to waste day after day showing up to work for someone else. That won’t move you closer to financial abundance. It will only distract you further.
If I had to choose between being homeless and getting a full-time job, I’d go the homeless route. Having a job would be 10x worse. As a homeless person, I could stay hungry and focused on creating and delivering value. I might not have the means to produce much value at first, but at least I could get out there in front of people and deliver something. It would be a good start on the right path.
A job is just a monstrous distraction. In many ways it’s a modernized form of slavery.
Homelessness is a huge upgrade from traditional employment. Have you ever talked to a homeless person? Some of them find the idea of having a job insulting — it represents a loss of freedom. Sure you smell better and can get a nicer place to live, but you lose your humanity in the process. Perhaps such people realize something you don’t.
Employment is the ultimate form of destitution.
Fortunately, employment is an easy problem to fix. If you have a job, just stop showing up. The rest will take care of itself. Pretty soon you’ll feel some motivation and drive to start creating and delivering value, especially if you happen to like eating.
Genuine opportunities are based on creating and/or delivering value. If you see something that looks like a new opportunity, and it doesn’t require you to create value, and it doesn’t require you to deliver value, then it isn’t an opportunity. It’s a total waste of your time.
Is creating and delivering value harder than getting a job? I would say no, not at all. Having a job is a lot harder. With a job you still have to provide some form of value usually, but all the residual benefits you produce turn into residual income for someone else. So you’re already doing most of what needs to be done, but you aren’t enjoying any of the benefits. In the long run, you’ll probably have to work much harder if you have a job, but the bulk of the rewards will go to someone else. On the one hand, that’s generous, but on the other hand, it’s quite dumb.
I could get a job as a writer and get paid a certain amount for each word I write. But then someone else owns my work, and all the residuals from that work go to them. Alternatively, I could write articles for my own website and retain the freedom to republish them as books someday, use them to generate traffic (and thereby income), license them for various publications, use them to promote my book, etc. The correct strategy is a no-brainer really.
Trying to make money is itself a distraction. When you focus on making money, too many things will catch your eye. You’ll run around like a chicken with its head cut off, chasing down all sorts of things that look like opportunities. You’ll waste a lot of time and energy if you chase dollars.
Creating and delivering value is simpler. This focus is well-aligned with truth, love, and power.
When you create and deliver value, you can be open and honest about what you’re doing. You get to spend most of your time doing stuff you’d naturally enjoy. It’s pleasurable to hone a craft you’re passionate about, whether it be writing articles, composing music, or planting gardens. It’s much harder to do boring, non-creative work day after day. It’s also very empowering to share your value with others and to see that you’re making a positive difference in people’s lives.
Once you make a habit of creating and delivering value as your primary career focus, you won’t want to go back.

There’s More to Life Than Money

Of all the things I do as part of my “work,” making money plays only a small role. Despite having written some popular articles on the subject, I spend little time thinking about money these days.
I don’t even bother to set financial goals anymore. That seems totally pointless to me.
Sometimes months go by, and I don’t even know how much money I’m currently making. I just know there’s always plenty and that I’m earning more than I’m spending. The gap is wide enough that I don’t need to do any special budgeting or fussing with figures.
The reason this works for me is that I focus on creating and delivering value. I know that as long as I keep doing that, I don’t have to do anything special to try to make money. New opportunities just keep showing up. It’s not that difficult to maintain.
I remember when I was at a conference in 2004 where Dr. Wayne Dyer was speaking. He said that people would come up and say, “You know, Dr. Dyer. Some people say you’ve made a LOT of money.”
Dr. Dyer’s response was, “They would be right.”
He went on to say something along these lines: “It’s not my fault! I just keep doing what I’m doing, and there’s always plenty of abundance there.”
At the time it was hard for me to relate to this mindset. It seems a bit too unrealistic and exceptional. But still… I wondered what it would be like to live at that level, where you could just assume abundance and it would be there for you. No striving or struggling. It took a few years, but I’m finally grasping what that sort of mindset feels like.
I’d say it’s not really a complete mindset by itself though. I doubt very much that Dr. Dyer focuses a lot of attention on trying to make money. I think most of his attention is elsewhere, wrapped up in the material he writes about. And that’s exactly where it should be.
Having written about two dozen books, it’s safe to say that Dr. Dyer has internalized the concept of creating and delivering value. I have it on good authority that his books sell quite well too. (We share the same publisher.)
Incidentally, Erin and I finally had the chance to meet Dr. Dyer in October at the speakers’ dinner for the I Can Do It! Conference. We only spoke with him for a few minutes. He was very warm and friendly.
This whole abundance mindset might sound really annoying if you’re dealing with financial scarcity right now. I can totally relate. I’ve been there, and I’m sure I’d have been equally annoyed if someone said this sort of stuff to me back then. I’d have been vehement that making money was NOT easy because I tried very hard to do that and failed big at it. Ironically the real problem was that by focusing on making money, I was making a huge mistake.
The key is where you focus your attention. If you focus your attention on making money, I can virtually guarantee that you’ll have a long and difficult road ahead of you, filled with setbacks and disappointments. If money is really what you seek, good luck with that. All you’ll do is give more and more of your power away, and you’ll end up living a pretty empty and shallow life.
Another corrupt form of thinking is to focus your attention on attracting financial abundance. Law of Attraction promoters often present this as a good idea. I once thought it was a good idea too. Now I realize it’s a dead end. It will just run you in circles. The irony is that in order to enjoy real financial abundance, you want to be thinking about money as little as possible.
I know it sounds like focusing on money is the right idea. I assure you that it’s a mistake. If you need to take several years to figure that out the hard way like I did, be my guest. But you’ll be really pissed that you could have saved yourself all that trouble if you simply let these ideas sink in a bit deeper. I hope that on some level what I’m saying strikes you as common sense. But I know I’ll be getting emails five years from now from a few people who went the other route. I hope you aren’t one of them.
Try to recognize the truth that focusing on CREATING and DELIVERING value is the smarter, more sane approach to long-term financial abundance. You may start out a bit slow at first, but eventually you’ll learn how to get good at both pieces of this puzzle. Once you have both aspects working reasonably well, it’s awesome. Just plain wonderful. And it leads to a really fun and exciting life too. Lots of freedom. Lots of joy. Plenty of cash. And yet the cash doesn’t even matter.
The nice thing about having plenty of money is that you can largely ignore it. You can focus your attention on doing more important, more interesting, and more enjoyable things. The funny thing is that it’s this sort of focus that creates financial abundance in the first place. Then you come full circle and realize that you never needed money at all. You just needed the courage to go after your dreams full steam ahead, even when you were dead broke. You needed to stop hiding behind a lack of money as an excuse not to live your best life.
If I could learn and apply this lesson while going bankrupt and having less than $100 in the bank, surely you can apply it today. I learned that I could create and deliver value even when I had no money and few resources. It wasn’t the greatest value in the world mind you, but at least it was something. I focused on creating something people would like and enjoy. Then I got it into their hands and made sure they enjoyed it. Back then it was a simple computer game. Today I do pretty much the same thing with blogging. The content is different, but the overall strategy is the same.
The DELIVERING part needn’t be complicated. If you just create something and share it online, other people will spread it around if they like it.
If you’ve been putting your value out there for months and months, and you haven’t been able to generate much interest from others, that should tell you that your mistakes are on the creative side. The feedback is that people don’t care for what you’re producing. You think you’re creating value, but the world is saying, “Not good enough; we don’t need or want this.” So you need to adapt to that feedback and use it to improve. Let it encourage you to go deeper within yourself, so you can be more genuine and authentic. Become more real and less phony. Keep working at becoming a more expressive creator until people start to take notice. Then you’re golden.

What About the Economy?

Personally I think that economic recessions, including the current one, are a good thing. Recessions help to weed out the crappy companies that aren’t creating and delivering value people want. Many of those companies were doing a good job at one time, but they failed to keep pace. As our values change, our companies need to adapt. Companies that can’t do that deserve to die off, and the jobs they created should be eliminated. They’ll eventually be replaced by new companies that have a better sense of people’s current needs and desires. Company that just don’t “get it” will be replaced by companies that do.
Consider the notion of bailing out the failing U.S. auto companies by having the taxpayers fund them. Is this a good idea? It’s okay except for one small problem — it’s STUPID! It’s one of the dumbest things our political reps could possibly do with our tax dollars. An auto company bailout is definitely not in the best interests of our country, nor is it in the best interests of the auto workers themselves. It’s totally short-sighted. And FWIW I think the whole financial bailout was just as dumb.
I have family members who used to work for GM for years (not in the automobile division of the company though). If they were still working for GM today, I’d sooner see them lose their jobs and have to find new work elsewhere than encourage them to live under the illusion that their company should continue doing business as usual. As I mentioned previously, Erin and I bought a Japanese car in 2006 even though we could have gotten a great price break on a GM model with the family discount. We just didn’t like any GM cars.
During a recession some companies are going to die off. That’s a good thing. To artificially prop up the proven market losers is just dumb. Sure, it will have some rippling consequences. But those ripples are necessary. We need that sort of self-correction to prevent bigger problems down the road. We need to send a message that if you fail to create and deliver value people genuinely want, your business will ultimately fail, and no amount of political lobbying will save you. Of course we get the opposite result when too many people think that the point of life is to chase dollars, especially our politicians. Can you blame them though? Have you ever been known to fall into the same trap?
It’s better — and much more compassionate — for millions of auto workers to lose their jobs and be re-integrated back into society, where they can start doing socially useful work again instead of wasting their time doing work that simply isn’t needed anymore. If it takes years, it takes years. There are other companies that are doing a better job of providing what people want and adapting to the planet’s changing transportation needs. Giving more money to the losers is a stupid strategy.
Similarly, if you work for a company that is falling out of sync with creating and delivering value that people want, you should indeed lose your job. It’s better to retrain yourself to do more meaningful work elsewhere than to waste your time doing work that isn’t needed. Becoming obsolete is a trap that can be avoided. Even if you’re an employee, you still need to make sure you’re contributing to the creation and delivery of real value. If you fall away from that, it’s only a matter of time before you get the axe, so don’t be too surprised when it happens.

A Value-Centered Career

How do you know if you’re creating and delivering real value?
Ask yourself these questions: If you stopped doing what you do, who would care? Who would object loudly? Who would revolt?
If you’re creating and delivering genuine value, and you suddenly stop, people will notice. People will definitely care. Your contribution will be seriously missed. There will practically be rioting in the streets.
Such people may not even credit the value to you directly, especially if your contribution remains somewhat anonymous, but they’ll soon detect that something important is missing from their lives. Even if they don’t know your name, the removal of your ongoing value creation and delivery will have a definite effect.
If, however, hardly anyone cares that you stopped, that should tell you something. It means that people just didn’t value your creative output… not really. What you were doing was either unnecessary or easily replaced. You weren’t yet living as a conscious, self-actualized human being. You held back from shining as brightly as you could have.
You have a choice of whether or not you want this to be your fate. You may have been conditioned from a young age to view your life path in terms of getting a job and making money. Go ahead and live that way for a few years if you think it’s intelligent. You’ll soon see what a pointless, soulless dead-end it really is.
When you finally begin to hear that subtle inner voice screaming at you, “This is just so wrong,” realize that it’s still possible to live a life of fun, freedom, and fulfillment — and still make plenty of money and not starve. But in order to get there, you have to focus on doing what really matters. You must clear your head of all that socially conditioned nonsense and stop doing what everyone else is doing.
Start living as a conscious human being, not a mindless minion. Focus on expressing your child-like creativity on a daily basis. Stop thinking so much about making money, and focus on connecting with people and sharing your creations with them instead.
Create and deliver. Create and deliver.
The correct focus for financial abundance is so simple it’s ridiculous. You learned it in kindergarten.
You: “Hey, look at this picture I made!” (Value created)
Adult: “Wow. That’s awesome! You made my day!” (Value received)
My five-year-old son and eight-year-old daughter pretty much have it figured out. If they just keep doing what they naturally like to do, they’ll be able to enjoy financial abundance as adults too.
My job as a parent isn’t so much to teach them something new in this area — it’s to prevent them from being brainwashed into thinking like everyone else.
It took me about 5 hours to write and edit this 6,000-word article. I wasn’t even planning to write an article today. But I got inspired by an idea, so I sat down and wrote the whole thing in a single sitting.
My investment of time and energy on the creative side was fixed. But this article will keep delivering value to people for many years to come. That’s a good investment then, isn’t it?
It doesn’t matter whether or not this article generates income for me. I don’t think about it like that. I just know that if I keep creating and delivering value, I’ll continue to enjoy financial abundance, and I’ll feel really good too. Money is basically a non-entity. It doesn’t motivate action, nor does it serve as a reward. It’s just something that recedes into the background while real life is unfolding.
I’d love for you to be able to enjoy similar benefits if this is something that appeals to you. It all starts with the choice of where you focus your attention. The more you pursue your own creative self-expression, the less you’ll have to fuss over money.
The irony is that this is probably what you tell yourself you’ll do when you finally have enough money, but that sort of thinking is a trap that will only keep you stuck. The way you would live if/when you’re enjoying financial abundance, start living that way now, for that’s the very strategy that will produce the abundance you seek. And when you begin to experience financial abundance, you’ll realize that you never needed it to begin with. You just needed the courage to start expressing the real you under the conditions you find yourself in this very moment.
This article has taken so many twists and turns, I think I’ve left the original title far behind by now. But somehow I think it still fits.

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10 Tips for College Students

After writing the time management article "Do it Now,” which was based on my experience of graduating college in three semesters with two degrees, I received many follow-up questions from students asking for more advice.  Here are 10 tips to help you create a productive and memorable college experience… and most of all, to deeply enjoy this time in your life.
1. Answer the question, “Why am I going to college?”
Many college students really don’t have a clear reason for being there other than the fact that they don’t know what else to do yet.  They inherit goals from family and peers which aren’t truly their own.  That was how I started college.  Is this you as well?
As I’ve stated previously on this blog, the three-semester deal wasn’t my first time at college.  I had previously gone to college when I wasn’t in the right frame of mind to be there.  In high school I was a straight-A honors student, President of the math club, and captain of the Academic Decathlon team.  That momentum carried me forward, and without really ever deciding if it was what I wanted, I found myself with four more years of school ahead of me.  It seemed like a good idea at the time, but my heart just wasn’t in it.  Consequently, I sabotaged myself in a big way.  I blew off my classes and got an education in parties and alcohol.  Apparently some administrator was biased against students whose GPA starts with a decimal point, so I was soon expelled.
That experience sent me into a bit of a tailspin.  I was in a funk for about six months, mostly just playing video games.  Finally in an attempt to re-ground myself, I got a retail sales job and tried to stay under the radar while taking some time to “find myself.”  That was the time I began developing an interest in personal development, and boy did it pay off.  A year later I was ready to go back to college, and I started over as a freshman.  But this time I knew why I was there.  I wanted to be a programmer, and I wanted to earn my Computer Science degree (I later added the Math degree).  But it was more than that.  I knew I was capable of a lot more, and I wanted to push myself.  I wanted to create the richest experience I could.  For me that meant a really dense schedule.
Your goals for college will likely be different than mine.  What are they?  Why are you there?  If you don’t know — and I mean really know it in your gut — then you have no focal point for your experience.  You may as well not even be there.  What is it about your experience that resonates as true for you?  What are you there to learn?  What do you want to experience?
2. Imagine your ideal college experience.
Once you know why you’re going to college, imagine your ideal outcome.  Let it flow outward from the reason you’re there.  Whether you’ve already started college or not, stop and simply write down some attributes of your ideal experience.  Describe it in as much detail as you can.
Before I returned to school, I spent hours visualizing the kind of experience I wanted to have.  I saw myself being challenged but managing it easily and without stress.  I saw myself making new friends.  I saw myself having a really great time.  Most of all I imagined a very balanced experience — a blend of academics, activities, socialization, and fun.  The keyword I used was “richness.”
This was a really important step.  I didn’t understand the mechanism at the time, but I was pre-programming myself to succeed.  Whenever I encountered obstacles, my ideal vision was so much more compelling that I was always able to find a way to get what I wanted.  I became a co-creator of my experience instead of a passive victim of it.
Visualization allows you to make mistakes in advance.  If you can’t get a clear visualization, your experience is likely to be just as fuzzy.  Debug your visualization until it inspires you.
Real life will of course turn out differently than you visualize.  The point of visualization isn’t to predict the future or to restrict your freedom to decide later.  The point is to give you more clarity for making decisions right now.  Your ideal scene serves as a map that can guide you through the quagmire of options.
3. Take at least one extra class each semester.
Students are taught that 12-15 semester units (3-5 classes) is a “full” schedule.  But a schedule that light is hardly full.  A person with a full-time job will put in a good 40+ hours per week, and students enjoy every possible vacation day plus spring break, winter break, and summer vacation.  If you want to spend four or more years in college, add more degrees or get a job on the side.  Don’t feel you have to go at a snail’s pace just because everyone else does.
Now you might be thinking that 12-15 units are supposed to equate to a 40-hour week with all the outside homework and studying, but that’s only going to happen if you do things very inefficiently (which sadly is what most people do).  If you follow some of the time-saving tips later in this article, then 15 units should only require a few additional hours outside of class to complete assignments.  Obviously I couldn’t have taken 31-39 units per semester if it meant doing double those hours in outside homework.  I didn’t succeed by overworking myself.
If you’re an above average student, you can certainly handle an above average schedule.  Sometimes we don’t know what we can handle until we push ourselves a little.  If you think you can handle 15 units, take 18 or 21.  You can easily shave a year off your schedule.  Or you may be able to add a minor or a double major.
What about prerequisites?  For the most part I simply ignored them, and fortunately at my school they weren’t enforced too well.  I found that most of the time a prerequisite is listed, it’s geared towards below average students.  Don’t let pointless bureaucracy slow you down if you want to graduate sooner.  There’s always a way around it — it’s usually just a matter of getting some random form signed by someone who’s too bored to care either way.  A smile and a compliment go a long way.
By the law of forced efficiency, if you put more things on your plate, you’ll find a way to get them done with the time you have available.  So if you don’t challenge yourself a little, that extra time will slip through your fingers.
I think the real benefit to a dense schedule isn’t that you’ll graduate sooner.  The real benefit is that you’ll enjoy a richer experience.  Taking five classes instead of four means more learning, more achievement, and more friends.  And what employer wouldn’t be attracted to a student who graduated more quickly than his/her peers?  This sort of thing sure looks great on a resume.
4. Set clear goals for each class.
Decide what you want out of each specific class.  Is this a subject you’re eager to learn?  Do you want to target this teacher for a letter of recommendation?  Is this a required class you must take but which doesn’t otherwise interest you?
My goals for each class determined how often I would show up, whether I’d sit in the front or the back, how actively I’d participate, and what kind of relationship I’d seek to establish with the teacher.
For some classes I wanted to master the material.  For others I just wanted an A grade.  And for others I wanted to set myself up for glowing letters of recommendations from enthusiastic teachers whose native language was English (so the letters would be highly readable and positive).
My mom has been a college math professor for decades.  At home she’d comment about students she barely knew who’d ask her for letters of recommendation.  Many times she had to turn them down because she just didn’t have anything positive to say in the letter.  On the other hand, she was happy to support those students who put in a serious effort.  Most teachers want to help you, but you have to let them see your strengths.  Even if you don’t get an A in a particular class, you can still give a teacher plenty of material for a great letter of recommendation if you participate actively and show respect toward the teacher.
This is not about manipulating your professors into lying on your behalf.  The simple truth is that the quality of a letter of recommendation ultimately comes down to how much a teacher respects you.  Don’t put yourself in the desperate situation of having to request a letter of recommendation from a teacher who doesn’t even remember you — or worse, one who thinks poorly of you.  Set yourself up for success in advance.
One of my professors learned about my packed academic schedule and expressed interest in learning how I was managing it.  We had a very nice conversation about time management techniques.  I had several programming classes with this professor and aced them all.  I happened to think he was an excellent teacher, I had great respect for him, and I quite enjoyed his classes.  When it came time to ask him for a letter of recommendation, he wrote one of the most glowing letters imaginable (“best student I’ve encountered in my career,” etc.).
On the other hand, I had certain teachers who were downright lousy.  I ditched their classes often and learned the material from the textbook.  Obviously I didn’t seek out their assistance down the road.
Sometimes you’ll achieve your goals; sometimes you won’t.  Even if you do your best, you may still fall short.  You may encounter teachers that are unfair, lazy, sexist, racist, or otherwise incompetent.  My wife had an overtly sexist professor who would never give a female student a grade higher than a B, no matter how well she did.  He would say things like, “If you’re a male, you’ll have to work hard in this class.  If you’re a female, just come by my office after hours.”  Eventually sexual harrassment charges were filed against him.  You’ll have to pick your battles.  Some are worth fighting; others are best ignored.  Having clear goals will help you decide which is which.
5. Triage ruthlessly.
You don’t need to put an equal amount of effort into every class.  Inject extra effort when it’s important to you, but feel free to back off a little from classes that are a low priority based on your specific goals.  For me this was an important way to conserve energy.  I couldn’t play full out in every class, or I’d burn out, so I invested my energy where it mattered most.
In every student’s schedule, some classes are critical while others are almost trivial.  In a typical week, I’d usually ditch around 40% of my classes because I just didn’t need to be there.  For some classes attendance was necessary, but for others it didn’t make much difference.  I could simply get the notes from another student if needed, or I could learn the material from the textbook.  If it wasn’t necessary for me to attend a particular class (based on my goals for that class), I usually ditched it.  That saved me a lot of time and kept me from having to sit in class all day long.  Sometimes I’d just grab some food with friends to give myself an extra break.
I would also triage individual assignments.  If I felt an assignment was lame, pointless, or unnecessarily tedious, and if it wouldn’t have too negative an impact on my grade, I would actually decline to do it.  One time I was assigned a tedious paper that represented 10% of my grade.  I really didn’t want to do it, and it required a lot more hours than I felt it was worth.  I was headed for an A in the class, and if I didn’t do this assignment, I’d drop to an A-.  So I respectfully told the professor I was declining the assignment and that I thought it was a fair trade to receive an A- in order to reinvest those hours elsewhere.  He already knew me and understood my reasons.  He gave me an A-, and I was fine with that.  It was indeed a fair trade.  In fact, looking back I wish I’d done this sort of thing more often.
Sometimes teachers get a little too homework happy and dole out assignments that really don’t justify the effort.  You’re in charge of your academic experience though, not your teachers.  Don’t feel you must do every assignment just because the teacher feels it’s a good idea.  You be the judge in accordance with your own reasons for being there.  Just be sure to consider the consequences of your decision.
By stealing time from low priority assignments, I was able to invest more time in the real gems.  Some creative assignments taught me a great deal.  I usually hated group projects with a passion, but there was one particular group project where the team really gelled.  I enjoyed it tremendously and learned a lot from it.
  I would decide how much time an assignment warranted, and then I’d do the best job I could within the allotted time.  So if I had to write a 10-page research page on European history, I might devote 8 hours to it total.  I’d slice up the 8 hours into topic selection, planning, library research, outlining, writing, and editing, and then I’d do my best to stay within those times.  This was a great way to keep me from overengineering an assignment that didn’t need it.
In a way this was my own method of academic load balancing.  Some of your assignments will be unbalanced in the sense that they seem to require an unreasonable amount of effort compared to how much of your grade they represent or how much you expect to benefit from completing them.  Sometimes I would decide that the effort to write an A-paper just wasn’t warranted.  Maybe I’d estimate it would take me 20 hours to do an A job but only 10 hours to do a B job.  And if the assignment was only 10% of my grade, perhaps I could accept a B there.  I often thought in this Machiavellian fashion back then, and often to my surprise I found that my B-quality papers would come back with As anyway.
6. Get an early start to each day.
I’ve written previously about the benefits of becoming an early riser.  I wasn’t getting up at 5am when I was in college, but I’d usually get up around 6-7am.  I found that getting an early start each day helped me get a lot more done, not just in the morning but throughout the day.  I began each day with a 25-minute run followed by a shower and breakfast.  This simple morning routine got me out the door feeling alert and energized.
I’d be lying if I said I got up early because I wanted to.  It was really out of necessity.  I had many morning classes, including 7:30am classes one semester.  But I’m glad I did that because if I didn’t have those morning classes, I just would have slept more than I needed to.  Even if you hate morning classes, you may find as I did that you’re a lot more productive if you schedule them anyway.
7. Reclaim wasted time during your classes.
Let’s face it.  Not every class is going to require your utmost concentration.  Sometimes teachers babble.  Sometimes they reiterate what you already know.  What percentage of class time requires your complete, focused attention?  For some classes it’s 90%.  For others it’s 20%.  If you aren’t actively learning during class, you’re wasting time.  If a class is really challenging, sit in the front and soak up every word.  But if a class isn’t challenging you, then sit in the back, do homework for other classes, and pop your head up every once in a while to see if there’s anything worth jotting down.  Always have a book open, so when your hippie professor goes off on yet another nostalgia trip about the 60s, you’ll have something productive to do.
This was a surprisingly great cure for boredom.  If the professor was droning on and putting everyone to sleep, I’d be working on programming assignments.  I used to write them out on paper and then go to the computer lab between classes and type them up.  That way I didn’t have to spend much time outside class in the lab, sometimes just 10-15 minutes if my program worked the first time.
You’ll be amazed at how much time you can free up using this method.  I was able to complete the bulk of my assignments in class (but usually not in the classes in which the tasks were assigned).  If you’re in school right now, I challenge you to see how much extra homework you can complete during your normal class time today.  Then estimate how many hours you’ll save every week from this practice.  It really adds up.
You can’t concentrate at peak efficiency continuously, so be sure to take breaks.  When you need a break though, take a real break.  I used to meditate or nap on the grass between classes in order to recharge myself.  I’d use my wristwatch alarm to signal when it was time to get up and go again.  Those breaks were very restorative, and I could go to the next class and work full out once again.  I never worked flat out all day long.  I worked in waves between total concentration and total relaxation, cycling many times per day.
8. Learn material the very first time it’s presented.
One of the biggest time wasters in school is having to relearn something you didn’t learn properly the first time.  When students say they’re studying, most of the time they’re making up for a previous failure to learn the material.
In software development it’s well known that bugs should be fixed as soon as possible after they’re introduced.  Waiting to fix a bug near the end of a project can take 50x as much effort as it would take to fix the bug the first time it was noticed.  Failing to learn what you’re supposedly taught each day is a serious bug.  Don’t try to pile new material on top of an unstable foundation, since it will take even more time to rebuild it later.
If you don’t understand something you were taught in class today, treat it as a bug that must be fixed ASAP.  Do not put it off.  Do not pile new material on top of it.  If you don’t understand a word, a concept, or a lesson, then drop everything and do whatever it takes to learn it before you continue on.  Ask questions in class, get a fellow student to explain it to you, read and re-read the textbook, and/or visit the professor during office hours, but learn it no matter what.
I was normally an ace in math, perhaps because my mother is a college math professor who was taking calculus classes while I was in the womb.  Plus my father was an aerospace engineer, so I’ve certainly got the genes for it.  But there were a couple topics I found incomprehensible when they were first introduced:  eigenvalues and eigenvectors.  I’m a highly visual learner, which is normally a strength academically, but I found these abstract concepts difficult to visualize.  Many of my classmates found them confusing too.  I invested the extra effort required to grasp these concepts and earned an A in the class because I treated my confusion as a bug that had to be fixed immediately.  Those students who allowed their confusion to linger found themselves becoming more and more lost as the course progressed, and cramming at the end couldn’t bestow complete comprehension.  Just like programming bugs, confusion multiplies if left untreated, so stamp it out as early as possible.  If you’re confused about anything you’re being taught, you’ve got a bug that needs fixing.  Don’t move on until you can honestly say to yourself, “Yes, I understand that… what’s next?”
Ideally there should be no need to study outside of class, at least in the sense of relearning material you didn’t learn the first time.  You can review old material to refresh your memory, but you shouldn’t have to devote a minute of your time to learning something that was taught a month or two earlier.
During finals I was probably the least-stressed student of all.  I didn’t have to study because by the time the final exam came up, in my mind the course was already over.  The test was just a formality.  While everyone else was cramming, I’d be at the arcade playing video games.  I’d already learned the material and completed all the assignments (at least the ones I was going to complete).  At most I’d just spend some time reviewing my notes to refresh the material the night before the test.  Isn’t this how academic learning is supposed to work?  Otherwise what’s the point of showing up to class for an entire semester?
During each semester ask yourself this question:  Am I ready to be tested right now on everything that has been taught up to this point?  If your answer is ever “no,” then you know you’re falling behind, and you need to catch up immediately.  Ideally you should be able to answer “yes” to this question at least once a week for every subject.
Falling behind even a little is an enormous stressor and time waster.  First, you have to go back and re-learn the old material when the rest of the class has already moved on.  Secondly, you may not learn the new material as well if it builds on the old material because you lack a solid foundation, so you just end up falling further and further behind.  Then when you come to the end of the semester, you end up having to re-learn everything you were supposed to learn.  But because you cram at the last minute, after finals you forget everything anyway.  What’s the point of that silliness?  It’s like overspending on a credit card that charges you 25% interest.  Eventually you’ll have to pay up, and it will cost you a lot more time in the long run.
Put in the effort to learn your material well enough to get As in all your classes.  It will pay off.  Much of the material you learn will build on earlier material.  If you get As in your freshman courses, you’ll be well prepared to pile on new material in your sophomore year.  But if you get Cs that first year, you’re already going into your second year with an unstable foundation, making it that much harder to bring your grades up and really master the material.  Make straight As your goal every semester.  In the long run, it’s much easier.  I found that C students tended to work a lot harder than I did, especially in their junior and senior years, because they were always playing catch up.  Despite my packed schedule, it wasn’t stressful for me because I kept on top of every subject.  Consequently, I had plenty of time for fun while other students experienced lots of stress because they constantly felt unprepared.
9. Master advanced memory techniques.
One of the keys to learning material the first time it’s taught is to train yourself in advanced memory techniques.  I used them often in classes that required rote memorization of certain facts, including names, dates, and mathematical formulas.  If a teacher wrote something on the board that had to be memorized verbatim for an upcoming exam, I’d memorize it then and there.  Then I wouldn’t have to go back and study it later.
I’m sure you’ve encountered simple mnemonic techniques such as using the phrase “Every good boy does fine” to memorize the musical notes E, G, B, D, and F.  Those kinds of tricks work well in certain situations, but they’re so grammar school.  There are far more efficient visual techniques.  The two I relied on most in school were chaining and pegging.
It’s beyond the scope of this article to explain these techniques in detail, but you can simply visit this site to learn all about them.  Or you can pick up a book on memory improvement, such as The Memory Book by Harry Lorayne.  I recommend learning from a book because then you’ll build a solid foundation step by step.
These techniques will allow you to memorize information very rapidly.  For example, with pegging I could usually memorize a list of 20 items in about 90 seconds with perfect recall even weeks later.  Experts at this are faster.  Anyone can do it — it’s just a matter of training yourself.
I still use these techniques today.  Chaining allows me to memorize my speeches visually.  When I give a speech, my imagination runs through the visual movie I’ve created while I select words on the fly to fit the images.  It’s like narrating a movie.  My speech isn’t memorized word for word, so it sounds natural and spontaneous and can be adapted on the fly to fit the situation.  Memorizing visually is much faster and more robust than trying to memorize words.  If you memorize a speech word for word and forget a line, it can really throw you off.  But with a series of images, it’s easier to jump ahead to the next frame if you make a mistake.  Our brains are better suited to visualize memorization than phonetic memorization.
I don’t recommend memorizing by repetition because it’s way too slow.  Pegging and chaining do not require repetition — they allow you to embed strong memories on a single pass, usually in seconds.  The downside is that pegging and chaining require a lot of up-front practice to master, but once you learn them, these are valuable skills you’ll have for life.  I also found that learning these techniques seemed to improve my memory as a whole, even when I’m not actively trying to memorize.  I think this practice trained my subconscious to store and recall information more effectively.
It’s a shame these techniques aren’t normally taught in school.  They would save students an enormous amount of time.  Do yourself a favor and learn them while you’re young.  They have a lot of practical applications, including remembering people’s names.
10. Have some serious fun!
Challenge yourself academically, but give yourself plenty of time for fun as well.  Don’t squander your leisure time hanging around doing nothing.  Go out and do something active that will blow off steam and increase your energy.
One of my favorite college leisure activities was frisbee golf (also called disc golf).  I used to play for hours at night with a couple friends, sometimes until my fingers became blistered… or until campus security gave us the boot for hitting one too many non-player students. 
While playing frisbee golf, we would often have to scavenge through bushes, wade through fountains, and climb over various hazards trying to recover errant frisbees.  It was always lots of fun, and we’d usually “play through” these obstacles.  Several hours of frisbee golf served as a delightful reward at the end of a challenging week.  I still remember an incredible “hole in one” shot I made from a second-story balcony to hit a light post at the edge of a soccer field.
My biggest regret about college is that I didn’t have a girlfriend during that time.  If I had it to do all over again, I probably would have added an extra semester and taken fewer classes to make time for that someone special.  I had the opportunity, but I had to pass it up because my schedule was too packed.  Girlfriends can be a lot of fun, but most aren’t very efficient. 
This article’s advice centers on making your college experience as rich and memorable as possible.  Get your school work done quickly and efficiently, so you have plenty of time for the variety of activities college can offer.  Join clubs.  Play frisbee golf.  Get a boyfriend or girlfriend.  The worst thing you can do is spend your time falling behind academically due to poor habits, feeling stressed and unprepared all the time, and then playing catch up.  Squeeze as much juice out of college as you can, and let it serve as a springboard to a lifetime of fulfillment.
People often assume my aggressive schedule must have been stressful and exhausting, but the irony is that it was just the opposite.  I seemed to have an easier, more enjoyable experience than my peers.  Students with lighter schedules slacked off and fell behind because they convinced themselves they could make up for it later.  But I couldn’t afford to do that because it would have been impossible for me to catch up on a dozen different classes… and way too stressful to even think about it.  If I fell even a week behind, I’d be in serious trouble.  So I was compelled to develop good habits that kept me perpetually relaxed, focused, and energized.  Many of the habits discussed above were simply the result of setting the goal to graduate in three semesters.  That goal dictated the process.  I’m very grateful for the experience because it showed me just how much more effective we can be when we push ourselves beyond our comfort zones.  It taught me to keep setting goals beyond what I feel certain I can accomplish.  Many times what we assume to be impossible just isn’t.  We only think it is.

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How to Make Money From Your Blog

Do you actually want to monetize your blog?
Some people have strong personal feelings with respect to making money from their blogs.  If you think commercializing your blog is evil, immoral, unethical, uncool, lame, greedy, obnoxious, or anything along those lines, then don’t commercialize it.
If you have mixed feelings about monetizing your blog, then sort out those feelings first.  If you think monetizing your site is wonderful, fine.  If you think it’s evil, fine.  But make up your mind before you seriously consider starting down this path.  If you want to succeed, you must be congruent.  Generating income from your blog is challenging enough — you don’t want to be dealing with self-sabotage at the same time.  It should feel genuinely good to earn income from your blog — you should be driven by a healthy ambition to succeed.  If your blog provides genuine value, you fully deserve to earn income from it.  It’s about balancing your needs with the needs of others.
If you do decide to generate income from your blog, then don’t be shy about it.  If you’re going to put up ads, then really put up ads.  Don’t just stick a puny little ad square in a remote corner somewhere.  If you’re going to request donations, then really request donations.  Don’t put up a barely visible “Donate” link and pray for the best.  If you’re going to sell products, then really sell them.  Create or acquire the best quality products you can, and give your visitors compelling reasons to buy.  If you’re going to do this, then fully commit to it.  Don’t take a half-assed approach.  Either be full-assed or no-assed.
You can reasonably expect that when you begin commercializing a free site, some people will complain, depending on how you do it.  I launched this site in October 2004, and I began putting Google Adsense ads on the site in February 2005.  There were some complaints, but I expected that — it was really no big deal.  Less than 1 in 5,000 visitors actually sent me negative feedback.  Most people who sent feedback were surprisingly supportive.  Most of the complaints died off within a few weeks, and the site began generating income almost immediately, although it was pretty low — a whopping $53 the first month.  If you’d like to see some month-by-month specifics, I posted my 2005 Adsense revenue figures earlier this year.  Adsense is still my single best source of revenue for this site, although it’s certainly not my only source.  More on that later…
Can you make a decent income online?
Yes, absolutely.  At the very least, a high five-figure annual income is certainly an attainable goal for an individual working full-time from home.  I’m making a healthy income from StevePavlina.com, and the site is only 19 months old… barely a toddler.  If you have a day job, it will take longer to generate a livable income, but it can still be done part-time if you’re willing to devote a lot of your spare time to it.  I’ve always done it full-time.
Can most people do it?
No, they can’t.  I hope it doesn’t shock you to see a personal development web site use the dreaded C-word.  But I happen to agree with those who say that 99% of people who try to generate serious income from their blogs will fail.  The tagline for this site is “Personal Development for Smart People.”  And unfortunately (or fortunately, depending on your outlook), smart people are a minority on this planet.  So while most people can’t make a living this way, I would say that most smart people can.  How do you know whether or not you qualify as smart?  Here’s a good rule of thumb:  If you have to ask the question, you aren’t.
If that last paragraph doesn’t flood my inbox with flames, I don’t know what will. 
This kind of 99-1 ratio isn’t unique to blogging though.  You’ll see it in any field with relatively low barriers to entry.  What percentage of wannabe actors, musicians, or athletes ever make enough money from their passions to support themselves?  It doesn’t take much effort to start a blog these days — almost anyone can do it.  Talent counts for something, and the talent that matters in blogging is intelligence.  But that just gets you in the door.  You need to specifically apply your intelligence to one particular talent.  And the best words I can think of to describe that particular talent are:  web savvy.
If you are very web savvy, or if you can learn to become very web savvy, then you have an excellent shot of making enough money from your blog to cover all your living expenses… and then some.  But if becoming truly web savvy is more than your gray matter can handle, then I’ll offer this advice:  Don’t quit your day job.
Web savvy
What do I mean by web savvy?  You don’t need to be a programmer, but you need a decent functional understanding of a variety of web technologies.  What technologies are “key” will depend on the nature of your blog and your means of monetization.  But generally speaking I’d list these elements as significant:

• blog publishing software
• HTML/CSS
• blog comments (and comment spam)
• RSS/syndication
• feed aggregators
• pings
• trackbacks
• full vs. partial feeds
• blog carnivals (for kick-starting your blog’s traffic)
• search engines
• search engine optimization (SEO)
• page rank
• social bookmarking
• tagging
• contextual advertising
• affiliate programs
• traffic statistics
• email

Optional:  podcasting, instant messaging, PHP or other web scripting languages.
I’m sure I missed a few due to familiarity blindness.  If scanning such a list makes your head spin, I wouldn’t recommend trying to make a full-time living from blogging just yet.  Certainly you can still blog, but you’ll be at a serious disadvantage compared to someone who’s more web savvy, so don’t expect to achieve stellar results until you expand your knowledge base.
If you want to sell downloadable products such as ebooks, then you can add e-commerce, SSL, digital delivery, fraud prevention, and online databases to the list.  Again, you don’t need to be a programmer; you just need a basic understanding of these technologies.  Even if you hire someone else to handle the low-level implementation, it’s important to know what you’re getting into.  You need to be able to trust your strategic decisions, and you won’t be able to do that if you’re a General who doesn’t know what a gun is.
A lack of understanding is a major cause of failure in the realm of online income generation.  For example, if you’re clueless about search engine optimization (SEO), you’ll probably cripple your search engine rankings compared to someone who understands SEO well.  But you can’t consider each technology in isolation.  You need to understand the connections and trade-offs between them.  Monetizing a blog is a balancing act.  You may need to balance the needs of yourself, your visitors, search engines, those who link to you, social bookmarking sites, advertisers, affiliate programs, and others.  Seemingly minor decisions like what to title a web page are significant.  In coming up with the title of this article, I have to take all of these potential viewers into consideration.  I want a title that is attractive to human visitors, drives reasonable search engine traffic, yields relevant contextual ads, fits the theme of the site, and encourages linking and social bookmarking.  And most importantly I want each article to provide genuine value to my visitors.  I do my best to create titles for my articles that balance these various needs.  Often that means abandoning cutesy or clever titles in favor of direct and comprehensible ones.  It’s little skills like these that help drive sustainable traffic growth month after month.  Missing out on just this one skill is enough to cripple your traffic.  And there are dozens of these types of skills that require web savvy to understand, respect, and apply.
This sort of knowledge is what separates the 1% from the 99%.  Both groups may work just as hard, but the 1% is getting much better results for their efforts.  It normally doesn’t take me more than 60 seconds to title an article, but a lot of experience goes into those 60 seconds.  You really just have to learn these ideas once; after that you can apply them routinely.
Whenever you come across a significant web technology you don’t understand, look it up on Google or Wikipedia, and dive into it long enough to acquire a basic understanding of it.  To make money from blogging it’s important to be something of a jack of all trades.  Maybe you’ve heard the expression, “A jack of all trades is a master of none.”  That may be true, but you don’t need to master any of these technologies — you just have to be good enough to use them.  It’s the difference between being able to drive a car vs. becoming an auto mechanic.  Strive to achieve functional knowledge, and then move on to something else.  Even though I’m an experienced programmer, I don’t know how many web technologies actually work.  I don’t really care.  I can still use them to generate results.  In the time it would take me to fully understand one new technology, I can achieve sufficient functional knowledge to apply several of them.
Thriving on change
Your greatest risk isn’t that you’ll make mistakes that will cost you.  Your greatest risk is that you’ll miss opportunities.  You need an entrepreneurial mindset, not an employee mindset.  Don’t be too concerned with the risk of loss — be more concerned with the risk of missed gains.  It’s what you don’t know and what you don’t do that will hurt you the worst.  Blogging is cheap.  Your expenses and financial risk should be minimal.  Your real concern should be missing opportunities that would have made you money very easily.  You need to develop antennae that can listen out for new opportunities.  The blogosphere changes rapidly, and change creates opportunity.  It takes some brains to decipher these opportunities and to take advantage of them before they disappear.  If you hesitate to capitalize on something new and exciting, you may simply miss out.  Many opportunities are temporary.  And every day you don’t implement them, you’re losing money you could have earned.  And you’re also missing opportunities to build traffic, grow your audience, and benefit more people.
I used to get annoyed by the rapid rate of change of web technologies.  It’s even more rapid than what I saw when I worked in the computer gaming industry.  And the rate of change is accelerating.  Almost every week now I learn about some fascinating new web service or idea that could potentially lead to big changes down the road.  Making sense of them is a full-time job in itself.  But I learned to love this insane pace.  If I’m confused then everyone else is probably confused too.  And people who only do this part-time will be very confused.  If they aren’t confused, then they aren’t keeping up.  So if I can be just a little bit faster and understand these technologies just a little bit sooner, then I can capitalize on some serious opportunities before the barriers to entry become too high.  Even though confusion is uncomfortable, it’s really a good thing for a web entrepreneur. Remember this isn’t a zero-sum game.  Don’t let someone else’s success make you feel diminished or jealous.  Let it inspire you instead.
What’s your overall income-generation strategy?
I don’t want to insult anyone, but most people are utterly clueless when it comes to generating income from their blogs.  They slap things together haphazardly with no rhyme or reason and hope to generate lots of money.  While I’m a strong advocate of the ready-fire-aim approach, that strategy does require that you eventually aim.  Ready-fire-fire-fire-fire will just create a mess.
Take a moment to articulate a basic income-generating strategy for your site.  If you aren’t good at strategy, then just come up with a general philosophy for how you’re going to generate income.  You don’t need a full business plan, just a description of how you plan to get from $0 per month to whatever your income goal is.  An initial target goal I used when I first started this site was $3000 per month.  It’s a somewhat arbitrary figure, but I knew if I could reach $3000 per month, I could certainly push it higher, and $3000 is enough income that it’s going to make a meaningful difference in my finances.  I reached that level 15 months after launching the site (in December 2005).  And since then it’s continued to increase nicely.  Blogging income is actually quite easy to maintain.  It’s a lot more secure than a regular job.  No one can fire me, and if one source of income dries up, I can always add new ones.  We’ll address multiple streams of income soon…
Are you going to generate income from advertising, affiliate commissions, product sales, donations, or something else?  Maybe you want a combination of these things.  However you decide to generate income, put your basic strategy down in writing.  I took 15 minutes to create a half-page summary of my monetization strategy.  I only update it about once a year and review it once a month.  This isn’t difficult, but it helps me stay focused on where I’m headed.  It also allows me to say no to opportunities that are inconsistent with my plan.
Refer to your monetization strategy (or philosophy) when you need to make design decisions for your web site.  Although you may have multiple streams of income, decide which type of income will be your primary source, and design your site around that.  Do you need to funnel people towards an order form, or will you place ads all over the site?  Different monetization strategies suggest different design approaches.  Think about what specific action you want your visitors to eventually take that will generate income for you, and design your site accordingly.
When devising your income strategy, feel free to cheat.  Don’t re-invent the wheel.  Copy someone else’s strategy that you’re convinced would work for you too.  Do NOT copy anyone’s content or site layout (that’s copyright infringement), but take note of how they’re making money.  I decided to monetize this site with advertising and affiliate income after researching how various successful bloggers generated income.  Later I added donations as well.  This is an effective combo.
Traffic, traffic, traffic
Assuming you feel qualified to take on the challenge of generating income from blogging (and I haven’t scared you away yet), the three most important things you need to monetize your blog are traffic, traffic, and traffic.
Just to throw out some figures, last month (April 2006), this site received over 1.1 million visitors and over 2.4 million page views.  That’s almost triple what it was just six months ago.
Why is traffic so important?  Because for most methods of online income generation, your income is a function of traffic.  If you double your traffic, you’ll probably double your income (assuming your visitor demographics remain fairly consistent).  You can screw almost everything else up, but if you can generate serious traffic, it’s really hard to fail.  With sufficient traffic the realistic worst case is that you’ll eventually be able to monetize your web site via trial and error (as long as you keep those visitors coming).
When I first launched this blog, I knew that traffic building was going to be my biggest challenge.  All of my plans hinged on my ability to build traffic.  If I couldn’t build traffic, it was going to be very difficult to succeed.  So I didn’t even try to monetize my site for the first several months.  I just focused on traffic building.  Even after 19 months, traffic building is still the most important part of my monetization plan.  For my current traffic levels, I know I’m undermonetizing my site, but that’s OK.  Right now it’s more important to me to keep growing the site, and I’m optimizing the income generation as I go along.
Traffic is the primary fuel of online income generation.  More visitors means more ad clicks, more product sales, more affiliate sales, more donations, more consulting leads, and more of whatever else that generates income for you.  And it also means you’re helping more and more people.
If you’re intelligent and web savvy, you should also be able to eventually build a high-traffic web site.  And you’ll be able to leverage that traffic to build even more traffic.
How to build traffic
Now if traffic is so crucial, how do you build it up to significant levels if you’re starting from rock bottom?
I’ve already written a lengthy article on this topic.  If you don’t have time to read it now, feel free to bookmark it or print it out for later.  That article covers my general philosophy of traffic-building, which centers on creating content that provides genuine value to your visitors.  No games or gimmicks.
There is one other important traffic-building tip I’ll provide here though.
Blog Carnivals.  Take full advantage of blog carnivals when you’re just starting out (click the previous link and read the FAQ there to learn what carnivals are if you don’t already know).  Periodically submit your best blog posts to the appropriate carnivals for your niche.  Carnivals are easy ways to get links and traffic, and best of all, they’re free.  Submitting only takes minutes if you use a multi-carnvival submission form.  Do NOT spam the carnivals with irrelevant material — only submit to the carnivals that are a match for your content.
In my early traffic-building days, I’d do carnivals submissions once a week, and it helped a great deal in going from nothing to about 50,000 visitors per month.  You still have to produce great content, but carnivals give you a free shot at marketing your unknown blog.  Free marketing is precisely the kind of opportunity you don’t want to miss.  Carnivals are like an open-mic night at a comedy club — they give amateurs a chance to show off their stuff.  I still submit to certain carnivals every once in a while, but now my traffic is so high that relatively speaking, they don’t make much difference anymore.  Just to increase my traffic by 1% in a month, I need 11,000 new visitors, and even the best carnivals don’t push that much traffic.  But you can pick up dozens or even hundreds of new subscribers from each round of carnival submissions, so it’s a great place to start.  Plus it’s very easy.
If your traffic isn’t growing month after month, does it mean you’re doing something wrong?  Most likely you aren’t doing enough things right.  Again, making mistakes is not the issue.  Missing opportunities is.
Will putting ads on your site hurt your traffic?
Here’s a common fear I hear from people who are considering monetizing their web sites:
Putting ads on my site will cripple my traffic.  The ads will drive people away, and they’ll never come back.
Well, in my experience this is absolutely, positively, and otherwise completely and totally… FALSE.  It’s just not true.  Guess what happened to my traffic when I put ads on my site.  Nothing.  Guess what happened to my traffic when I put up more ads and donation links.  Nothing.  I could detect no net effect on my traffic whatsoever.  Traffic continued increasing at the same rate it did before there were ads on my site.  In fact, it might have even helped me a little, since some bloggers actually linked to my site just to point out that they didn’t like my ad layout.  I’ll leave it up to you to form your own theories about this.  It’s probably because there’s so much advertising online already that even though some people will complain when a free site puts up ads, if they value the content, they’ll still come back, regardless of what they say publicly.
Most mature people understand it’s reasonable for a blogger to earn income from his/her work.  I think I’m lucky in that my audience tends to be very mature — immature people generally aren’t interested in personal development.  To create an article like this takes serious effort, not to mention the hard-earned experience that’s required to write it.  This article alone took me over 15 hours of writing and editing.  I think it’s perfectly reasonable to earn an income from such work.  If you get no value from it, you don’t pay anything.  What could be more fair than that?  The podcasts are all ad-free.  I’m also planning to add some additional services to this site in the years ahead.  More income = better service.
At the time of this writing, my site is very ad-heavy.  Some people point this out to me as if I’m not aware of it:  “You know, Steve.  Your web site seems to contain an awful lot of ads.”  Of course I’m aware of it.  I’m the one who put the ads there.  There’s a reason I have this configuration of ads.  They’re effective!  People keep clicking on them.  If they weren’t effective, I’d remove them right away and try something else.
I do avoid putting up ads that I personally find annoying when I see them on other sites, including pop-ups and interstitials (stuff that flies across your screen).  Even though they’d make me more money, in my opinion they degrade the visitor experience too much.
I also provide two ad-free outlets, so if you really don’t like ads, you can actually read my content without ads.   I first put ads on the site in February 2005, and although the chart doesn’t cover pre-February traffic growth, the growth rate was very similar before then.  .  You can select different Range options to go further back in time.
Multiple streams of income
You don’t need to put all your eggs in one basket.  Think multiple streams of income.  On this site I actually have six different streams of income.  Can you count them all?  Here’s a list:

1. Google Adsense ads (pay per click and pay per impression advertising)
2. Donations (via PayPal or snail mail — yes, some people do mail a check)
3. Text Link Ads (sold for a fixed amount per month)
4. Chitika eMiniMalls ads (pay per click)
5. Affiliate programs like Amazon and LinkShare (commission on products sold, mostly books)
6. Advertising sold to individual advertisers (three-month campaigns or longer)

Note:  If you’re reading this article a while after its original publication date, then this list is likely to change.  I frequently experiment with different streams.
Adsense is my biggest single source of income, but some of the others do pretty well too.  Every stream generates more than $100/month.
My second biggest income stream is actually donations.  My average donation is about $10, and I’ve received a number of $100 donations too.  It only took me about an hour to set this up via PayPal.  So even if your content is free like mine, give your visitors a means to voluntarily contribute if they wish.  It’s win-win.  I’m very grateful for the visitor support.  It’s a nice form of feedback too, since I notice that certain articles produced a surge in donations — this tells me I’m hitting the mark and giving people genuine value.
These aren’t my only streams of income though.  I’ve been earning income online since 1995.  With my computer games business, I have direct sales, royalty income, some advertising income, affiliate income, and donations (from the free articles).  And if you throw in my wife’s streams of income, it gets really ridiculous:  advertising, direct book sales, book sales through distributors, web consulting, affiliate income, more Adsense income, and probably a few sources I forgot.  Suffice it to say we receive a lot of paychecks.  Some of them are small, but they add up.  It’s also extremely low risk — if one source of income dries up, we just expand existing sources or create new ones.  I encourage you to think of your blog as a potential outlet for multiple streams of income too.
Automated income
With the exception of #6, all of these income sources are fully automated.  I don’t have to do anything to maintain them except deposit checks, and in most cases I don’t even have to do that because the money is automatically deposited to my bank account.
I love automated income.  With this blog I currently have no sales, no employees, no products, no inventory, no credit card processing, no fraud, and no customers.  And yet I’m still able to generate a reasonable (and growing) income.
Why get a regular job and trade your time for money when you can let technology do all that work for you?  Imagine how it would feel to wake up each morning, go to your computer, and check how much money you made while you were sleeping.  It’s a really nice situation to be in.
Blogging software and hardware
I use WordPress for this blog, and I highly recommend it.  Wordpress has lots of features and a solid interface.  And you can’t beat its price — free.
The rest of this site is custom-coded HTML, CSS, PHP, and MySQL.  I’m a programmer, so I coded it all myself.
Web hosting is cheap, and there are plenty of good hosts to choose from.  I recommend Pair.com for a starter hosting account.  They aren’t the cheapest, but they’re very reliable and have decent support.  I know many online businesses that host with them, and my wife refers most of her clients there.
As your traffic grows you may need to upgrade to a dedicated server or a virtual private server (VPS).  This web site is hosted by ServInt.  I’ve hosted this site with them since day one, and they’ve been a truly awesome host.  What I like most about them is that they have a smooth upgrade path as my traffic keeps growing.  I’ve gone through several upgrades with them already, and all have been seamless.  The nice thing about having your own server is that you can put as many sites on it as the server can handle.  I have several sites running on my server, and it doesn’t cost me any additional hosting fees to add another site.
Comments or no comments
When I began this blog, I started out with comments enabled.  As traffic grew, so did the level of commenting.  Some days there were more than 100 comments.  I noticed I was spending more and more time managing comments, and I began to question whether it was worth the effort.  It became clear that with continued traffic growth, I was going to have to change my approach or die in comment hell.  The personal development topics I write about can easily generate lots of questions and discussion.  Just imagine how many follow-up questions an article like this could generate.  With tens of thousands of readers, it would be insane.  Also, nuking comment spam was chewing up more and more of my time as well.
But after looking through my stats, I soon realized that only a tiny fraction of visitors ever look at comments at all, and an even smaller fraction ever post a comment (well below 1% of total visitors).  That made my decision a lot easier, and in October 2005, I turned blog comments off.  In retrospect that was one of my best decisions.  I wish I had done it sooner.
If you’d like to read the full details of how I came to this decision, I’ve written about it previously: Do you need comments to build traffic?  Obviously not.  Just like when I put up ads, I saw no decline in traffic when I turned off comments.  In fact, I think it actually helped me.  Although I turned off comments, I kept trackbacks enabled, so I started getting more trackbacks.  If people wanted to publicly comment on something I’d written, they had to do so on their own blogs and post a link.  So turning off comments didn’t kill the discussion — it just took it off site.  The volume of trackbacks is far more reasonable, and I can easily keep up with it.  I even pop onto other people’s sites and post comments now and then, but I don’t feel obligated to participate because the discussion isn’t on my own site.
I realize people have very strong feelings about blog comments and community building.  Many people hold the opinion that a blog without comments just isn’t a blog.  Personally I think that’s utter nonsense — the data just doesn’t support it.  The vast majority of blog readers neither read nor post comments.  Only a very tiny and very vocal group even care about comments.  Some bloggers say that having comments helps build traffic, but I saw no evidence of that.  In fact, I think it’s just the opposite.  Managing comments detracts from writing new posts, and it’s far better to get a trackback and a link from someone else’s blog vs. a comment on your own blog.  As long-term readers of my blog know, when faced with ambiguity, my preference is to try both alternatives and compare real results with real results.  After doing that my conclusion is this:  No comment. 
Now if you want to support comments for non-traffic-building reasons like socializing or making new contacts, I say go for it.  Just don’t assume that comments are necessary or even helpful in building traffic unless you directly test this assumption yourself.

Testing and optimization
In the beginning you won’t know which potential streams of income will work best for you.  So try everything that’s reasonable for you.  If you learn about a new potential income stream, test it for a month or two, and measure the results for yourself.  Feel free to cut streams that just aren’t working for you, and put more effort into optimizing those streams that show real promise.
A few months ago, I signed up for an account with Text Link Ads.  It took about 20 minutes.  They sell small text ads on my site, split the revenue with me 50-50, and deposit my earnings directly into my PayPal account.  This month I’ll make around $600 from them, possibly more if they sell some new ads during the month.  And it’s totally passive.  If I never tried this, I’d miss out on this easy extra income.
For many months I’ve been tweaking the Adsense ads on this site.  I tried different colors, sizes, layouts, etc.  I continue to experiment now and then, but I have a hard time beating the current layout.  It works very well for me.  Adsense doesn’t allow publishers to reveal specific CPM and CTR data, but mine are definitely above par.  They started out in the gutter though.  You can easily double or triple your Adsense revenue by converting a poor layout into a better one.  This is the main reason why during my first year of income, my traffic grew at 20% per month, but my income grew at 50% per month.  Frequent testing and optimization had a major positive impact.  Many of my tests failed, and some even made my income go down, but I’m glad I did all that testing.  If I didn’t then my Adsense income would only be a fraction of what it is now.
It’s cheap to experiment.  Every new advertising or affiliate service I’ve tried so far has been free to sign up.  Often I can add a new income stream in less than an hour and then wait a month to see how it does.  If it flops then at least I learned something.  If it does well, wonderful.  As a blogger who wants to generate income, you should always be experimenting with new income streams.  If you haven’t tried anything new in six months, you’re almost certainly missing some golden opportunities.  Every blog is different, so you need to test things for yourself to see what works for you.  Failure is impossible here — you either succeed, or you learn something.
Pick your niche, but make sure it isn’t too small
Pick a niche for your blog where you have some significant expertise, but make sure it’s a big enough niche that you can build significant traffic.  My wife runs a popular vegan web site.  She does pretty well within her niche, but it’s just not a very big niche.  On the other hand, my topic of personal development has much broader appeal.  Potentially anyone can be interested in improving themselves, and I have the flexibility to write about topics like productivity, self-discipline, relationships, spirituality, health, and more.  It’s all relevant to personal development.
Pick a niche that you’re passionate about.  I’ve written 400+ articles so far, and I still feel like I’m just getting started.  I’m not feeling burnt out at all.  I chose to build a personal development site because I’m very knowledgeable, experienced, and passionate about this subject.  I couldn’t imagine a better topic for me to write about.
Don’t pick a niche just because you think it will make you money.  I see many bloggers try to do that, and it’s almost invariably a recipe for failure.  Think about what you love most, and then find a way to make your topic appealing to a massive global audience.  Consider what will provide genuine value to your visitors.  It’s all about what you can give.
A broad enough topic creates more potential advertising partners.  If I keep writing on the same subtopic over and over, I may exhaust the supply of advertisers and hit an income ceiling.  But by writing on many different topics under the same umbrella, I widen the field of potential advertisers.  And I expand the appeal of my site at the same time.
Make it clear to your visitors what your blog/site is about.  Often I visit a blog with a clever title and tagline that reveals nothing about the site’s contents.  In that case I generally assume it’s just a personal journal and move on.  I love to be clever too, but I’ve found that clarity yields better results than cleverness.
Posting frequency and length
Bloggers have different opinions about the right posting length and frequency.  Some bloggers say it’s best to write short (250-750 word) entries and post 20x per week or more.  I’ve seen that strategy work for some, but I decided to do pretty much the opposite.  I usually aim for about 3-5 posts per week, but my posts are much longer (typically 1000-2000 words, sometimes longer than 5000 words, including the monster you’re reading right now).  That’s because rather than throwing out lots of short tips, I prefer to write more exhaustive, in-depth articles.  I find that deeper articles are better at generating links and referrals and building traffic.  It’s true that fewer people will take the time to read them, but those that do will enjoy some serious take-away value.  I don’t believe in creating disposable content just to increase page views and ad impressions.  If I’m not truly helping my visitors, I’m wasting their time.
Expenses
Blogging is dirt cheap.
I don’t spend money on advertising or promotion, so my marketing expenses are nil.  Essentially my content is my marketing. 
My only real expenses for this site are the hosting (I currently pay $149/month for the web server and bandwidth) and the domain name renewal ($9/year).  Nearly all of the income this site generates is profit.  This trickles down to my personal income, so of course it’s subject to income tax.  But the actual business expenses are minimal.
The reason I pay so much for hosting is simply due to my traffic.  If my traffic were much lower, I could run this site on a cheap shared hosting account.  A database-driven blog can be a real resource hog at high traffic levels.  The same goes for online forums.  As traffic continues to increase, my hosting bill will go up too, but it will still be a tiny fraction of total income.
Perks
Depending on the nature of your blog, you may be able to enjoy some nice perks as your traffic grows.  Almost every week I get free personal development books in the mail (for potential review on this site).  Sometimes the author will send it directly; other times the publisher will ship me a batch of books.  I also receive CDs, DVDs, and other personal development products.  It’s hard to keep up sometimes (I have a queue of about two dozen books right now), but I am a voracious consumer of such products, so I do plow through them as fast as I can.  When something strikes me as worthy of mention, I do indeed write up a review to share it with my visitors.  I have very high standards though, so I review less than 10% of what I receive.  I’ve read over 700 books in this field and listened to dozens of audio programs, so I’m pretty good at filtering out the fluff.  As I’m sure you can imagine, there’s a great deal of self-help fluff out there.
My criteria for reviewing a product on this site is that it has to be original, compelling, and profound.  If it doesn’t meet these criteria, I don’t review it, even if there’s a generous affiliate program.  I’m not going to risk abusing my relationship with my visitors just to make a quick buck.  Making money is not my main motivation for running this site.  My main motivation is to grow and to help others grow, so that always comes first.
Your blog can also gain you access to certain events.  A high-traffic blog becomes a potential media outlet, so you can actually think of yourself as a member of the press, which indeed you are.  In a few days, my wife and I will be attending a three-day seminar via a free press pass.  The regular price for these tickets is $500 per person.  I’ll be posting a full review of the seminar next week.  I’ve been to this particular seminar in 2004, so I already have high expectations for it.  Dr. Wayne Dyer will be the keynote speaker.
I’m also using the popularity of this blog to set up interviews with people I’ve always wanted to learn more about.  This is beautifully win-win because it creates value for me, my audience, and the person being interviewed.  It isn’t hard to convince someone to do an interview in exchange for so much free exposure.
Motivation
I don’t think you’ll get very far if money is your #1 motivation for blogging.  You have to be driven by something much deeper.  Money is just frosting.  It’s the cake underneath that matters.  My cake is that I absolutely love personal development – not the phony “fast and easy” junk you see on infomercials, but real growth that makes us better human beings.  That’s my passion.  Pouring money on top of it just adds more fuel to the fire, but the fire is still there with or without the money.
What’s your passion?  What would you blog about if you were already set for life?
Blogging lifestyle
Perhaps the best part of generating income from blogging is the freedom it brings.  I work from home and set my own hours.  I write whenever I’m inspired to write (which for me is quite often).  Plus I get to spend my time doing what I love most — working on personal growth and helping others do the same.  There’s nothing I’d rather do than this.
Perhaps it’s true that 99 out of 100 people can’t make a decent living from blogging yet.  But maybe you’re among the 1 in 100 who can.
On the other hand, I can offer you a good alternative to recommend if you don’t have the technical skills to build a high-traffic, income-generating blog.

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