Bridging The Income Gap
Today we're going to talk about "bridging the gap" (otherwise known as how to get there from here) between where you are in your life right now and where you want to be.
The problem for most of us is that our earnings are directly linked to the amount of time that we spend at work or performing a service. As a result, even if we earn a high hourly wage we eventually hit a ceiling where we just can't earn any more money...even if we attempted to work 24 hours a day/ 7 days a week (not something I recommend by the way).
If you followed the steps outlined here (which describes setting low, middle and high level overall goals for your life) then we now need to take two additional pieces of information to start building the bridge to our goals.
- A meaningful goal that is both inspirational, attainable and measurable
- A plan for how to accomplish those goals
Traditional ways to earn money won't help you to get very far at this point; allow me to explain:
Say someone earns $48,000/year and has an income goal of $1,500/month extra; that is the equivalent to an $18,000/year (or 37.5%) raise - which generally aren't being handed out much these days.
You might manage a big income jump by switching to a higher paying career or employer, but it's not something you can realistically expect to repeat year after year.
Working more hours or getting overtime won't be much use to you either if you value having free time or any kind of a life besides work.
To bridge the gap we need to start generating income in a way that most of us haven't done before; by completely eliminating the dollar-per-hour earning system.
So the question becomes, how can we raise our income without getting a raise or working more hours?
The answer I recommend, is to start selling products or packaged services.
But before we jump into the how and the why, let's tackle Gap Analysis as way to hit our targeted goal(s).
How To Do A Gap Analysis
Conducting a gap analysis on your goals versus your current reality helps you to define your overall objective and break it down into bite-sized chunks.
Here's how it works:
- Take the amount you want to make.
- Subtract it from the amount you currently make.
- The difference is the "gap" between where you are now...and where you want to be.
So if I make $50,000 a year and want to make $150,000 a year - it would look like this:
- Amount I currently make: $50,000
- Amount I want to make: $150,000
- Gap Amount: $100,000
So if I wanted to raise my yearly income to $150,000, I'd need to find a way to generate an additional $100,000 per year.
Now, I wouldn't recommend trying to triple your income in your first year; that's like expecting to hit three grand slams the first 3 times you ever take an 'at bat' in baseball. But since this is a fantasy example...let's just run with it.
What we want to do is to carve up that big, scary six-digit "gap number" into something more manageable. So if we divide it by 12 we'll get a monthly target, if we divide it by 52 we'll get a weekly target and if we divide it by 365 we'll end up with a daily target.
So $100,000 becomes:
I don't know about you, but $274 dollars a day and $1,923 sounds a lot more attainable to me than $100,000/year.
Again, I don't recommend setting this high of a goal right out of the starting gate because it's too ambitious. I just wanted to give you an example to show how to calculate your gap analysis and then what to do to break down the original number to a much more manageable size so you can start planning how to achieve it.
I'll give you a recommended starting figure to aim for a little further down in this post, for now lets move on to...
The Benefits of Selling Products
When you sell products, you greatly reduce the link between the time you spend working and the amount that you're paid.
This is especially true when you have a near-infinite supply of product and the ability to sell 24/7/365 - which we have because of a great invention called the internet.
When selling products, the more you sell the more you earn;
the biggest limitation becomes your ability to sell rather than the amount of time that needs to be spent per hour doing the task
Sometimes making just a single sale is all that you need to make an "Additional Income" goal.
For instance, if I my goal was to earn an extra 1,500/month, and I happened to sell a $1,500/month coaching product, I'd only need to sell one to hit my goal.
That's one sale out of thirty days, you just need one success out of thirty days to hit your goal. Now you're starting to stack the odds in your favor so long as you can get at least 300 or more people in front of your offer.
Your ability to successfully sell will be impacted by several factors:
- How well you understand your audience and their problems
- Your ability to be able to "get in front" of this audience so they know your solution exists
- Your ability to communicate the value your product or service provides using their language & perspective
- How easy your product is to use and how much actual value it produces for your clients
- How easy your product is to buy
Getting Over The Stigma Of Selling
Many people get their back up when the word "Sales" is mentioned.
Direct Response marketer Joe Polish, put together a great video about whether selling is "evil" or not I highly recommend you check out. Here it is:
One other thing to consider, you'll never achieve an abundance of time, money and mobility if you do what the majority of people do, the math just doesn't work (remember that 1% of the population controls 90+% of the wealth).
Since the majority of people don't sell, can't sell or won't sell... it stands to reason that this is an area of huge opportunity for you should you decide to start selling products that you believe in and that provide value to your audience.
What Can You Sell?
Selling your own products is hard, but it can be done, especially if you already have some skills that others would be willing to pay you money for.
You'll need to brainstorm a list all of the things that you know and that you're passionate about. Review your list to see what jumps out at you, it might just be the best place to start creating a product that you can sell.
Right now online courses are all the rage, and you can join sites like Thinkific, Teachable and Udemy to create an online course to sell to others. Last time I checked, each of these sites have a free option, so the only time you need to pay them is when you make a sale. Then a percentage of your earnings will be retained by the platform along with whatever transaction fees are involved from the payment gateway.
The key to building your own product of course is to start with a minimal viable product or MVP.
This is where you create the smallest functional unit of your product and attempt to sell it before spending months of your life developing it into a huge offering that potentially nobody wants.
In fact, you can even pre-sell something that you haven't created yet.
Bryan Harris of videofruit.com recommends using Gumroad.com to manage your pre-sale products. It can run a micro transaction to test the credit card for a sufficient amount to cover the price of your product, but won't actually place the charge until you deliver the actual product.
Just remember the golden rule, unless you can successfully get multiple people to pay you money for your product or service in advance...then don't build it.
Lots of people can tell you that you're a genius, that your idea is awesome and of course they'll buy one of whatever you're selling...but the sad reality is that most won't ever put their money where their mouth is.
That's just the way the cookie crumbles.
But if you're just starting out and aren't quite sure you're ready to develop your own course, there's another route you can take...
Earn Commissions Instead of Selling
You can always earn commissions by promoting other people's products for affiliate commissions.
Now, affiliate marketing gets a bit of a bad rap at times. Mainly because greedy affiliates can get a little overzealous with plastering affiliate links all over the world wide web.
That's not the right way to do it.
It's also not cool to promote products you know nothing about and have zero interest in.
If you think promoting something because it has a great commission is a good idea, you might find your interest lacking when you have to slog through writing promotional articles, videos or audios for something you truly don't care about.
Don't do that.
But when you promote products you know, like and actually use it becomes possible to generate a semi-passive income without having to build your own product from scratch.
This helps you shortcut the whole product brainstorming and creation process. Trust me, many a well-intentioned "exit planner" has been mired in the bog of "unfinished product" while attempting to create something from scratch...
...I know that I certainly have.
There's also a lot of fear that crops up when you create your own product; is the product good enough? Is it ready for someone else to actually use it? What if they think it sucks etc.?
if you go the affiliate route and promote products because they're awesome and would do so even if they didn't have an affiliate plan...then you know that you're on the right track.
I've been promoting affiliate products since 2010, and thus far have made the bulk of my online income from them. It's an income stream that I want to expand on which I touched on in this post.
I like affiliate marketing because you can cut straight to the marketing and not have to worry about creating, delivering or servicing a product.
I've made over $1,000 with affiliate marketing in the last 12 months without doing any real promotions, so I'm curious to see what happens if I actually make a push for it.
Can I consistently hit and grow over $100+/month? Can I break far beyond $1,000/year?
It's definitely possible.
James Schramko went from nothing to earning six figures ($100,000) by affiliate marketing.
6-Figure Affiliate Recommendations
Schramko earned the majority of his six-figure affiliate income without using major affiliate networks. In a mastermind call from September 2015 he told that he prefers dealing with private affiliate companies because he can establish a closer working relationship with them and arrange for higher earning percentages and arrange special deals due to their smaller size. That's just not going to happen with a giant like Amazon.
I've also earned the majority of my affiliate income thus far from small affiliate programs online, so I have to say that I agree with James.
The Hybrid Approach
If you really want to be a ninja with this stuff, you can take the hybrid approach with blends both affiliate marketing with product creation.
Interested in learning more? I thought you might be...
What you do is offer a minimum viable product that is the perfect complement to an existing product and give it away for free when someone purchases through your affiliate link.
This was a key method that Schramko used to break six figures and being to establish himself as an authority online.
You get paid your affiliate commission and the customer gets two products for the price of one.
It doesn't really cost you anything to do this with a digital product, and if you're smart you'll obtain a qualified buyer lead as the means to deliver your product - so you're building a list of buyers as well.
You also have the chance to get some feedback on your minimal viable product and determine if there's interest in expanding the product and selling more.
So this method can be a goldmine for the right person in terms of creating market research, developing a mini course into a full blown in-demand and profitable course or membership while earning an affiliate commission at the same time.
Sounds like a win/win/win situation to me!
Next Step - Setting & Achieving Your Goals
Will you create a product, become an affiliate or go the hybrid route and do both?
Regardless of which you choose, you're going to have to set an initial goal to work with. I recommend starting with $100/month for a few different reasons:
- It's achievable
- It's worthwhile (if you randomly found $100 - it would instantly qualify as one of the best days of the whole year)
- It's also the cutoff point where many affiliate programs pay out - especially if you're not based in the United States
Then, you'd map that goal out like we did in the gap analysis section earlier.
The $100 dollar/month goal means that you have approximately 30 days to make $100 (or $3.33/day).
Now, go out there and make it happen!
What? You need a little more help on the next step? Sure thing, there's two steps you can take. One of them will be hard, the second one will be even harder:
- Wake up every day and ask yourself, "What can I do today to earn $100?" - then do whatever it is. Do that every day. It might be writing a blog post, it might be emailing your list, it might be creating a Youtube video or tweeting about your new book or course. Just do it and keep doing it.
- Chart your progress on a graph > you'll have $100 at the top right and you'll chart your sales (and especially your zeros) along the way. (I first heard about this from a smart marketer by the name of Marlon Sanders in one of his free newsletters - hardly anyone else even talks about this!)
I virtually guarantee that you won't be able to do step #2, but there's a reason why it's so powerful.
Confront "Failure" - Face Your Fear
Charting your progress daily forces you to confront your "failure" every. single. day.
Here's what the chart looks like:
- Example of a 30 Day Sales "Waterfall" Chart
The red line is your daily sales target - $3.33 dollars a day right up to $99.9.
The blue line is your actual sales each day.
Every day, you'll either enter a zero or the number of dollars you earned for that particular day. You'll either hit your goal or you won't. What happens next is where you start to take control of your destiny online.
Notice the quotation marks around "failure" in the heading for this section?
I did that because "Failure" is an idea, it's a concept and therefore it can't really hurt you.
If you're alive, then you get to play again tomorrow, so don't get hung up on failing. I prefer using the word "feedback" instead (you can even say "results", because there are positive results and there are negative results, either way you get one form of results or the other based on the actions that you take).
As long as you learn from them, negative results are extremely beneficial. As the saying goes, you learn more from your failures and mistakes than you ever learn from winning.
So set your target for the month, you have either 30 chances to make $100 in a single day, or you can earn $50 every 14 days or $25 every seven days - whatever. As long as you hit your goal of $100 at the end of the month, you're on track.
But if you have a string of days, of weeks where you're charting nothing but zeros...it'll be hard on you.
You'll want to avoid it, you'll want to escape it.
That's when most people quit, change niches or do some sort of busy work instead of solving the real problem: how to make a sale or a commission today.
This is hard stuff. So don't feel bad.
It's like a scout leader handing you two sticks and telling you to go out to the woods and start a fire without any further explanation or materials.
Earning income online is hard as well for similar reason, but your online exit plan from your current reality relies on you figuring out how to make it happen.
The good news is that you're not alone, because I'm right here with you as well.
Achieve fire (earn your first $100 online) and you'll have learned something new, and seen first hand that there are real possibilies behind this online stuff.
Give up, and you'll still have to figure out the fire sometime later. Only you might be a lot older or a lot more desparate next time.
I recommend you dig the well before your thirsty.