Mindset: Conquer the Fear of Losing Money
“Never Let the Fear of Striking Out Get in Your Way” – Babe Ruth
It takes money to make money. You’ve heard this a million times, but implementing it is hard when you don’t have a lot of cash and you’re not sure what you’re doing. I know how hard it is to lose hundreds with no results, and no one’s there to give you any feedback.
I knew from day one I wanted to do paid traffic. I didn’t have the patience for free traffic methods such as SEO – and as far as I knew, the biggest guys in the industries were spending thousands of dollars a day, to make even more thousands of dollars a day. I wanted to join this club.
Actually, so do tens of thousands of people out there, but the success rate is quite low. The fear of losing money is a huge barrier, and it’s a different kind of fear. One friend I know has skydived a few hundred times, and another one is an amateur MMA fighter. They’re definitely not pussies, but they can’t seem to get over their fear of losing money.
Keep in mind that your body naturally wants to stay in the same position. It’s EASY to keep working your job, surf reddit all day, and play video games. It doesn’t want to take risk or feel uncomfortable. It’s up to you to power through this.
Here are some of my thought processes that have helped me over the years.
The Process of a Successful Campaign
To start off it’s important to understand what most campaigns are like. Most newbies just kinda launch campaign after campaign, hoping one of them sticks. They don’t really have a process and their strategy is more based on luck.
Here’s what a better campaign scenario looks like (Keep in mind this is very generic for educational purposes)
- Launch. Collect data. Maybe a $100 spend and $30 revenue. Some guys might see that it’s -$70 loss and move on to the next campaign. The fact that it generated $30 shows that the offer converts, and the only way to go is up.
- Test #1: Split test 5 different offers. Collect data. Ok now you see that Offer C was the best offer (highest total revenue). Now send all your traffic to Offer C. Collect data. Since you’re running a better offer, your revenue goes up. Now It’s $100 spend and $60 revenue.
- Test #2: Split test creatives. 10 different images There were two images that did very well. Since your CTR’s higher, you can lower your bids. $100 spend, $100 revenue. Sweet now we’re breaking even, and there’s still a lot more tests you can do.
- Test #3: Landing Page vs Direct Linking. The landing page does better than direct linking. You switch all the traffic to using a landing page. $100 spend, $140 revenue. Now we’re profiting!
There’s a LOT of things you can test. Occasionally you’ll hit something that’s profitable from day 1, but some of my biggest campaigns were complete shit when I first launched.
Profitable campaigns are kind of like mining for diamonds. Some guys expect to dig into the ground and find a perfectly shiny diamond. Truth is you find a rock that could be a diamond. What you have to do is keep polishing and polishing it (aka optimizing). It can either become a baller diamond, or stay an ugly rock. The key is to keep going even if you keep finding rocks, because the next one could be a diamond.
Reframing the Loss
When I lost my first $1,000, I was on the verge of quitting this all together. I started getting mad thinking about all the things that money could’ve gone to: a large payment on my student loans, some nice dinners with my girlfriend, a new macbook etc.
I had a choice: Take my losses now and tell myself I at least I tried, or suck it up and keep pushing forward. I chose the latter.
I realized even though I lost money, I learned and was making progress. If I kept going, eventually I’d hit a tipping point (profitability).
Seriously there was no Plan B. It was either get rich off internet marketing, or live of boredom.
What If I Don’t Have a Lot of Money?
I understand. I wasn’t making much money after college. After rent, car payment, student loans, etc. it barely gave me any money left for savings. There’s only two things you can do…cut expenses and find additional ways to generate income.
- Cut expenses: I stayed home on the weekends, I cooked my meals, I clipped coupons, I read instead of buying video games.
- Generate income: I sold things I didn’t need such as my Xbox, I wrote articles for people in the BTS section of WickedFire, I found crazy deals on the internet and flipped the items on Craigslist and eBay.
- Don’t use money you don’t have. I’ve known newbies that funded campaigns with credit cards thinking they’d come up with a profitable campaign and then pay it off. All it left them was regret and a few thousands dollar in credit card debt.
- Whatever money you spend should be disposable. Pay your rent, make sure there’s enough food on the table, pay your bills, etc.
I found myself with about $500 to spend each month; it wasn’t much but I worked with what I had.
I had absolute confidence I was going to be a full-time internet marketer. First off, I set the bar low for success. Back then there weren’t a lot of “affiliate marketing” ballers. I just wanted to make around $40k a year and go travel in 3rd world countries. I calculated that was about $110 a day I needed to make, and that seemed a lot less intimidating.
I know a lot of guys preach to have big goals, but I prefer setting realistic and attainable ones. If I my goal was $1 million my first year, then I would’ve been scared to take action, and scared to fail.
Another idea is given enough time, I can be pretty good at anything. If I spent 5 years cooking, I’d be a pretty good cook. If I spent 5 years learning how to play piano, I’d be decent. Would I be the world’s best? Nope. But I didn’t need to be the world’s best internet marketer to be happy.
Emotionally Detach Yourself From Money
If I lose $x in a day, I don’t really get pissed off or have a reaction anymore. If I make $x in a day, I don’t go on a shopping spree. I look at the numbers as just numbers. Too many guys let their daily earnings dictate their emotions.
I think of my business kinda like a video game, and the goal is to keep improving my score ($$$).
I mentioned earlier that my budget when starting off was around $500 a month. It was important that the $500 was for internet marketing only. If I lost all of it, I didn’t think about the opportunity cost of that cash. It was a $500 investment each month into my education and my future.
Lower What You Need in Life
A lot of people fear money because they’re scared of changing their current lifestyle.
There are guys out there who are so concerned with what others think about them, and they overspend to compensate. They can’t handle losing money because they need the money to fund their lifestyle. Typical expenses include leased cars, overpriced bottles at the clubs, materialistic girlfriends, etc.
Compare that to another guy who’s making the same amount but lives more humbly. He spends a lot less, so he can afford to lose more.
Don’t tie your self-worth to your net worth. Rich or poor, you’re still awesome. Keep in mind that you’re making temporary sacrifices in your lifestyle for a chance at a greater one. If you don’t take action, you’re a hamster running in a wheel. You’re moving, but you’re not going anywhere.
The End Goal
Why put yourself through so much uncomfortable feelings? Why risk your hard earned money when nothing’s guaranteed?
For me it was because internet marketing was my last hope. I did not want to settle for 2 weeks vacation a year. I did not want to work 100% to make my boss rich. I didn’t want to be in an never-ending cycle of debt my whole life. I did not want to grow old and wonder what if?
When your WHY is strong enough, no excuse is valid.