Think about your life right now and where you want to be in five years. Now imagine where you could be if you set ambitious goals for the next 5 years and stuck to them.
Visualize your future and set ambitious goals for yourself, hopefully getting rich is one of your goals because this article will teach you how to make $500k annual profit in 5 years.
Five years is equivalent to 60 months, 260 weeks, 1,825 days, or 43,817 hours.
It may seem like a long time right now, but it always passes quickly. That’s why it’s so important to stay focused on the ambitious goals you set yourself. People that set goals tend to be more successful.
A study by Harvard Business School discovered that the 3% of MBA graduates that set goals and wrote them down ended up earning ten times as much money as the other 97% of their class put together in just ten years after graduations.
The greatest limitation to what you can achieve in five years time is your mindset. If you don’t think something is possibly you will never even make an attempt. You will have other limitations you may need to overcome such as your discipline and ability to work long hours, but these will be built up along the way. Right now you need to keep an open mind about what can be achieved in five years because it’s more than you think and you shouldn’t create limits.
This article will lay the foundation for making mid six figures ($500,000 in annual profit) from the internet in five years time. The process will start with creating a website, I have a free guide teaching you how to do it. This guide provides the top resources to ensure you build a solid foundation. A website is low cost, and can allow you to reach millions of viewers around the world.
You can make money from your website by having display ads, selling info products (ebooks, courses, etc.), and affiliate marketing (recommending products and linking to them, when someone buys the product the company pays you a percentage of the sale price, e.g. 40% of a $100 product = $40 for you).
It’s fun, the guide will teach you how.
Creating Your Anti-Goals and Conflicting Goals
One of the most helpful ways to make sure you are on the right path to achieving your goals is to write down your anti-goals. Anti-goals are what we need to avoid if we want to achieve our goals.
Example 1 – Personal Finance:
A 24 year old has just finished paying off his student loans and is working in his second year at Ernst & Young doing auditing. His primary goal is to be a millionaire by 27, which means he needs to increase his net worth by at least $1,000,000 in the next three years.
Example of obvious anti-goals would include:
- Only working at his career and not starting a side business
- Drinking heavily 2x per week and sleeping in on the weekends
Examples of conflicting goals would include:
- Trying to save money for retirement by investing in an S&P 500 index fund
- Writing his CFA exams to try to get a job in finance
- Rewriting his resume and doing interview prep to find a better job
The anti-goals are pretty easy for anyone to understand. If you want to get rich within a relatively short time frame you need to start a business, work hard at it, and not binge drink multiple times per week.
The conflicting goals would be more difficult for him to get away from doing. They are all steps towards society’s ideal of success, having aka following the script of high status career then retirement. If he told people he was doing any of the three things listed under this conflicting goals people would think “wow this guy is 24 and he really has his life together”, they may not say this but they would still provide encouragement for him to continue in the direction he is going.
Conflicting goals are more difficult to deal with than anti-goals because they are usually pretty good ideas, but they are not congruent with your goals. The way to deal with this would be for him to write down extremely detailed goals and his motivations for achieving them. He would look read his goals multiple times per day and prepare to take the necessary step of inevitably quitting his job in the next 6-12 months.
There are a lot of different ways he could get rich but my recommendation would be to start an online business. Making money online allows the ability to scale and reach millions of people online.
Choosing a Niche (Vertical)
When you decide to make money online you need to understand what type of a website you are building. Your website is going to a blog based around a vertical, that is a big money industry where billions of dollars are exchanged daily. Examples of verticals include:
- Health and Fitness
- Drugs and Alcohol
- Politics, Safety, and Crime
- Sex and Relationships
- Business and Finance
- Home and Garden
These are big money industries. Hopefully you see something on this list that you have are either passionate or knowledgeable about (if not both), this is the vertical you should build your site in. You need to build your website in a wide vertical because that’s the easiest way to hit $500k online profit annually, you need to get less than 1% of the overall market.
Your website will be a blog but broadly speaking will fit into the category of an information website. You are (or will become) an authority in this subject, and your readers will trust your recommendations of products and services.
Monetization Methods and Online Business Math
1) Display Advertising
Display advertising is what you typically think of as ads, you see these on all kinds of websites online. A visitor on your website reads an article and clicks a display ad and you get paid based on the number of clicks on the display ads. The most common form of display advertising in Google Adsense. If you ever search for recipes online the results that come up are covered in display ads and this is the main way they monetize their sites.
2) Affiliate Marketing
You promote products or services for companies in your vertical. If a visitor on your website clicks an affiliate link and purchases the product or service you get paid. These tend to be one time payments but there are also affiliate programs that have recurring payments (usually a % of the monthly cost or a fixed dollar amount), which are usually for subscription services a user pays for on a monthly basis.
3) Selling Products and Services
This one is fairly self explanatory, you directly sell products or services to the visitors on your website. If you’re selling products they could be either physical or digital products, and if you’re selling services they could either be one-time or recurring.
Let’s look at an example if you are in the fitness vertical. You could start selling physical products by buying unbranded foam rollers and stretching bands at wholesale/bulk prices and putting your own branding on them and selling them at a retail price. For digital products you could sell workout or diet plans. For one time services you could sell a single coaching Skype call to figure out a diet and fitness plan that’s specifically catered to a client’s needs. For a recurring service you could do online diet and training coaching where you make a bespoke diet and training plan for a client and have weekly calls to discuss their progress.
That’s an example I made completely off the cuff to illustrate how easy it is to stack different business models together in one website.
Understanding the math behind making money online is just as easy. For example if you want to make $500,000 per year in profit online.
|Time Period||Revenue per site|
|1 site||3 sites||10 sites||100 sites|
When you see this chart you might think it’s easier to make $500,000 annually by building a lot more sites. It actually ends up being more work because you need to build all these sites with content, and promote them all individually. This takes a lot more work and/or or money than simply building one or two websites.
The easiest way to think about making money online is by looking at the math. Revenue = traffic x conversion rate x payout. Traffic is the number of page views, conversion rate is the number of people that purchase a product, and payout is the amount of money you receive from each purchase.
Example 1: A conversion rate of 0.5% and a payout of $5.
Example 2: A conversion rate of 0.5% and a payout of $50
Example 3: A conversion rate of 1.0% and a payout of $5
Example 4: A conversion rate of 1.0% and a payout of $50
Math is the language of the (internet business) universe. This math is the universal truth of operating an online business, and if things get confusing you can always come back to the simple math formula. There is a lot more nuance to it, which you will discover in due time.
Therefore there are three ways to increase your revenue:
- Increase traffic
- Promote/sell products with higher payouts
- Increase conversions
This is the entire game of making money online. If you want to make really big money you should be focusing on all three, we’ll dive deeper into these in the next section.
The Power of Thinking Big and Avoiding Conventional Wisdom
In the online marketing world the most common advice given to beginners is to start an “Amazon Affiliate Niche Site”. Obviously the idea here is to start a site about a very specific tops (e.g. baseball bats) and advertise Amazon products on the site. When someone clicks through to Amazon the website owner will get a small % of the price of the product purchased.
This is not necessarily a bad idea for a website, but if you are building a website with a five year in mind you can do a lot better. You should aim to build higher tier of website that can evolve into an authority in a particular vertical. On a simplistic level, there are three tiers of affiliate marketing websites
Tier 0 websites – These are websites someone makes without a particular plan. Often the site doesn’t center around any topic so search engines and users do not give it much trust and it doesn’t get much traffic. Other times these are based on subjects that are very hard to monetize and make good money from e.g. book reviews.
Tier 1 websites – These are your typical “Amazon Affiliate Niche Sites”. For example a website about baseball bats that targets review keywords such as “best baseball bats”. The majority of content on the site will be affiliate articles linking to Amazon, the website will make decent money but will be greatly limited by Amazon’s low commissions as well as the limited search volume and amount of content that can be written on the site.
Tier 2 websites – These are your successful authority sites, that either target a vertical with a lot of traffic, and/or high payouts. For example this could be a site about health (high traffic), options trading and forex (high payouts), or personal finance (high traffic, and high payouts). The idea here is that if you are spending multiple years building a website you want to have an extremely high ceiling for how much the website can earn.
Of course this is an overly simplistic explanation, but most websites fit into one of these three categories. If you are building a five year plan to make $500k profit annually, your best bet is to build a Tier 2 site. The other option is to build a lot (20-100) Tier 1 sites, although I don’t recommend this route – it takes way too much time to create and rank content for all these sites, as well as doing maintenance work on them.
This frequently repeated by successful SEOs and online marketers in the The Bragging Thread – Inspire a Newbie on the Builder Society Forums (the best internet marketing forum imo). One comment stuck out to me above all the rest, and I wish I could have read this when I was getting started instead of wasting my time on Micro Niche sites.
Avoiding Shortcuts and Delayed Gratification
How many websites do you use that are less than three years old? How many blogs do you read that are less than three years old?
I bet you can think than of less than 5 established websites that you read that are less than three years old. You might read more blogs that are less than three years old
Most successful websites are at least several years old and took months or usually years to become established. You can’t just publish a website and Google immediately starts sending you thousands of visitors per day. With good marketing you can get thousands of viewers per day in your first month, just not from Google. That’s why it’s so important to actively market a new website by start sharing content across social media, different forums, and sites like Reddit. You want to get as much web traffic as you can.
The months or years it can take to build a successful online business lead people to try take shortcuts and try different schemes. And all these schemes are fundamentally the same; about getting rich without putting in the work.
Example 1 – Blackhat SEO:
Many website owners use different link scheme to try to rank higher in Google (the more relevant links a website has the higher it will rank, generally). These schemes include paying for links, building private blog networks (PBNs), and spamming comments. Many websites use blackhat techniques “successfully”, but it’s a huge risk as many webmasters learned following the Panda, and Penguin Google updates which destroyed a lot of sites traffic. Google has the most PhDs of any company in the world, if you are trying to cheat them you will probably get caught.
Example 2 – Dropshipping with Shopify:
This is one of the hottest get rich quick schemes. You set up an eCommerce store with Shopify and use Facebook ads to sell products that are made in China, directly from the manufacturer to your customer. Generally there are low profit margins that you overcome with high volume. You don’t control anything in this process from the manufacturing to the shipping to the ads, to the eCommerce platform. Margins (and hence profitability) can be completely wiped out if any of the following happen:
- The price of the Shopify platform increases
- Facebook ads increase in price
- Your manufacturer stops making your product, or increase the price
- Your manufacturer goes bankrupt
- The cost of shipping increases.
In Fall 2019 the cost of shipping is forecasted to increase as the United Postal Union attempts to compromise with the White House, which has been pushing for higher rates for other countries (read – China) to deliver their postage. “The bulk of the changes would apply to letters and packages, under 4.4 lbs., sent internationally.” Source
The majority of products that are dropshipped are under 4.4 lbs and sent internationally. Dropshipping is not looking like the most sustainable business model moving forward.
Online Business Synergies
Once you have an established website/online business it’s a lot easier to launch another product or service within the same vertical. This is best illustrated with an example. Let’s say you have a website about dogs, that is getting about 500,000 views per month and it has established social media profiles, and an email list with 75,000 subscribers. This website is making good money through a combination of affiliate marketing and display ads.
You’re feeling ambitious and want to more more money online so you decide to build an eCommerce store that sells dog accessories such as leashes, collars, dog beds, chew toys, etc. You can start promoting this new eCommerce store to your email list, you can create display ads for it on your site, and drive traffic to it via your social media followers. You could also create a iPhone app that teaches people how to train their dog better. You could launch this the same way you launched your eCommerce store.
Launching to an audience that already enjoys your content (why else would they be on your email list and reading your website?) gives massive credibility to your new eCommerce store and iPhone app. Your email list subscribers and loyal website readers are far more likely to buy from your store and download your app than cold traffic (e.g. that came to your eCommerce store or app from paid ads or Google Search).
Automation & Outsourcing
You should always be striving to become a more productive website owner. Productivity is output divided by time, you should do everything possible to ensure your website can earn more money while you spend less time working on it. This is not to say you shouldn’t be working hard on your website, but you should make the most of your 168 hours you have every week.
When it comes to your website there are processes you can automate and tasks you can outsource. For example you can automate social media posting (with Zapier or IFTTT) so when you post on one network it automatically posts to other networks. There are also platforms that allow you to schedule posts to social media, for example with Hootsuite or Buffer you can schedule your Tweets to send automatically. With Tailwind you can mass schedule Pinterest posts. These are just a few examples, there are a ton of free and paid tools to make your online business operate more efficiently.
People usually do not struggle with automating their online business. They may be too
cheap frugal to invest in the tools that will help them succeed, but they usually understand automation and implement it on some level. Where people tend to really struggle is outsourcing.
When you outsource a part of your online business you are hiring an employee, where it’s temp work or a full time virtual assistant (VA) you still need to go through a process of find the right employee and determining what to pay them. One of the greatest struggles for many businesses owners is finding the right employees.
There is an idea that you need to can’t have an employee that is cheap, fast, and high quality. This is an absurd idea, ask the thousands of businesses that underpay ambitious new college graduates. However it is hard to get all three, and it will take time to hire, manage, and motivate your employees. Even if you have a VA or content writer that lives in a low cost of living area such as The Philippines you should still treat them with the respect and dignity you would treat an employee you shared a physical office with.
Make an effort to give them proper incentives and reward good behaviour. If your online business has an absolute gangbusters year send them a gift or annual bonus. If they are an absolute stud consider setting up a profit sharing system with them, even a very small % of profits can provide the incentive for them to go the extra mile. The most important thing to remember is if you hire one VA or employee that does bad work it may be their fault, if all your employees/VAs do bad work it’s your fault, you’re a bad boss.
Task to consider outsourcing:
- Writing blog content
- Finding images for content
- Posting blog content
- Graphic design
- Web design
- Social media management
- Email outreach
Building an online business is an incredibly rewarding experience. Of course the money is a huge thing, but you also build self-esteem and self belief by starting a project that is built purely by your own vision, determination, and grit. The most important thing is to start building your website. The journey of a thousand miles begins with a single step. You have the right resources, now you need to put in the work.