You Only Have Two Choices...

Time or money.

Let me explain...

I received this question today from Scott in Detroit.

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John,
 
Thanks for calling me yesterday.  I appreciate the time that you spent on the phone with me.
 
I have a couple of questions.
 
If you don't mind me asking, what are you personally budgeting each month on your marketing campaign?
 
What should I expect to invest in my marketing campaign to get optimal results each month? 
 
If I have $2000 for marketing, do my results double or multiply by putting in $5000 for example?
 
Sincerely,
 
Scott G

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Your question brings up a valuable lesson I learned early on at The Rich Dad Company, and one of the biggest challenges new entrepreneurs face.

Here's the deal...

What I learned from Robert and Kim is that you can only invest two things: time or money.

Now, we all have the same amount of time in every day. How you spend that time is the key.

What I've learned, which has been confirmed by Mike Dillard in several of his newsletters and emails, is that the BEST way to increase your appeal, which will eventually turn into increased sales, is to work on yourself.

So, I spend a lot of my time working on me. From the motivational stuff I read, listen to and watch, to actual training in specific areas, like Google AdWords, copyrighting and how to run an online marketing campaign. I am nowhere near an expert in any of these areas, but I am an expert in learning (I have the certificate to prove it).

What I've also learned in the last month, specifically related to online business, is that you can either pay for traffic with money (purchase leads, buy advertising, etc), or you can generate traffic with your time (web 2.0, social media, blogging, teaching, giving away content, etc).

Since I am new to this whole thing, I have chosen not to spend a lot of money, but spend as much time as my family will allow (a delicate subject around here...).

Therefore, my budget for Google AdWords is currently between $500 and $1000 per month. The only reason I am spending ANYTHING on AdWords at this point is so that I can learn the system and learn how headlines and ad copy affect traffic and click-throughs.

Money well spent in my book.

You can only learn so much from reading other people's stuff or watching their webinars (I hate that word btw). I know I will probably not get that investment back in dollars (at least right away), but that is something I have chosen to invest in - my own education.

Robert once said that no one ever learned how to ride a bicycle from reading a book. The process of motion, mistakes and modification (which I have cleverly coined 'The Three Ms') is the MOST effective way to learn.

Get on the bike. Pedal. Fall down. Get up. Get on the bike. Pedal faster. Fall down. Get up. Get on the bike. Steer to the left. Fall down. Get up. Get on the bike. Steer right. Fall down. Get up.

You get the idea.

In fact, one of the best diagrams that illustrates this fact is the Cone of Learning.

Created by Edgar Dale in 1969, it shows us that the LEAST effective way to learn something (and the way that allows for the shortest retention of what you've learned) is...

Reading.

That's right. Reading is the WORST way to learn something, followed closely by lecture. Which are, as you may have already noticed, the two ways we are expected to learn in school.

More on that subject in a future lesson.

As for the free stuff, I am all over that. I am on betternetworker.com (WOOT!), constantly uploading podcasts, videos, articles, etc. I am slowly building a following so I can begin to teach what I've learned (like I am with you right now).

I am also on MySpace (never thought I would have an account there), Facebook, Twitter, Plaxo, etc.

In addition, I am starting to produce videos for my own site (johnseiferth.com). Again, I can spend all day creating videos and giving them away for free. I love doing that stuff!

For proof, check out youtube.com/richdadunderground. I produced and directed over 75 behind-the-scenes videos while at The Rich Dad Company. Some really good stuff in there, and more to come.

As for the return on your investment, that is something you'll have to figure out. That is where 'The Three Ms' come into play. Split testing, modifying headlines, changing copy, updating key words, trying new campaigns, targeting different audiences, etc. That is all up to you. There is no magic bullet.

It takes persistance and patience. Believe me, I know.

Also, I just found this quote from an Urban Cowgirl (they are experts in online marketing) teleclass I took:

Marketing Budget

- Your marketing budget will be 10% or less of your sales revenue

- Don’t spend all of your money on one advertising source or one ad

- Start slow, risk less. Plan for longevity

That is the advice I am taking.

As my sales increase, my marketing budget will increase as well. My goal is to eventually be spending $10,000 per month on advertising.

That would mean that I am making $100,000 a month in revenue.

You saw that right.

I know it may seem crazy to you right now, but that is the mindset I have.

I hope I've answered your questions Scott. And I hope you found some value in my rambling.

I promise to share with you what I've learned (and am learning!) as often as possible.

Take care -

John