How To Burn $18,000 as a New Affiliate

Posted on 14. Nov, 2010 by Aaron in Internet Marketing

This is my own story, one which no new affiliate or one yet to make any serious money online can afford to miss. Potentially taking a few minutes out to read this admittedly long post will save you from certain financial ruin and shows how easy it is to let your spending run away from you, but more importantly find out from my mistakes and learn how to take control of your finances when venturing down the affiliate route.

So many people tell you buy this, buy that, this will make you six figures a year, look at my shiny new Lambo.

Ok, to start, 2010 has been a really great year for me so far, most importantly I can see financial freedom on the horizon which is something I wasn’t too sure I’d ever see for reasons that will become apparent as you read on. Although I have had to put my business hat on this year, which is why I thought I’d write a post about something that is rarely talked about in a negative light in affiliate circles

….. and that’s money.

So many people tell you buy this, buy that, this will make you six figures a year, look at my shiny new Lambo. Meanwhile in the real world there’s people like you and me saying ….. ‘oh shit I’m running out of money and I have bills to pay, what the hell am I going to do? I know I’ll buy another course.’

Even though right at this moment I’m making a nice stack of cash from my affiliate sites I’m in a position where I’m still not earning enough to cover my mortgage and bills yet (this is about as much as I’ll ever divulge on my affiliate earnings), this wouldn’t normally be a problem but currently my day job looks a touch shaky, and my web design business is only just taking off and it’s currently being used to kill the huge credit card debts which were solely incurred from my affiliate endeavours.

Ironically the internet side of my day job has been performing amazingly well year in year out since I took over the position, but there seems to be issues elsewhere in the business which I’m not at liberty to talk about and don’t fully understand, this is my main area of worry at the moment as my affiliate activities are making money but just not enough to live on full time without the day job, so agonisingly close yet so far.

And worst of all using my forecasting I can see I’m a month away from maxing out one of my credit cards at nearly $14,000

So coming back to the subject in question, my spending on affiliate bits and pieces really didn’t come to light until I hired an accountant, mainly for my new web design company. That’s when I found after prepping my accounts I’d spent just over $18,000 over the last three years on hosting, domains, software, hardware and the biggest culprit ……. Training. (WSO’s, books and memberships) yet made a big fat $0, in fact you can see my first ever affiliate commissions on my aptly named first ever accountability update.

Like a lot of new affiliates I spent a lot of time learning but not much time taking action until for me, the last few weeks of 2009.

Most normal people would be horrified at this but I can now see light at the end of the tunnel. Strangely enough I know I’d do exactly the same again in a heartbeat, with a few key changes though. The thought of not having a day job ruining your weekends (and holidays in my case), or more importantly your life in general was incentive enough to go absolutely eyeballs out on this affiliate marketing thing and give it everything I’ve got.

And I bet there’s loads of affiliates who can relate to this whole story, with maybe just a lucky few who’ve hit the big time right off the bat wondering what the hell I’m talking about.

So lets deal with the main areas of spending common to most affiliates (minus one that I barely entered and still managed to rack up $18k in spending) and how I went about cutting costs like any business would cutting out the dead wood.

Domains (Nearly $3000)

This is one of my large areas of spending, every time I used to crank up Micro Niche Finder I’d find myself buying a handful of domains to develop but in reality soon after I’d find a new affiliate method to try out and forget about developing the domains I’d bought.

Really what I should of done in hindsight is buy a small batch of say 5 at a time, then develop them, then when it comes to renewal time look to see if the revenue earned was more than what the domain is worth (factoring in the hosting too).

What I have to do now is monitor my domains due every month to see which I really want to let go to avoid more unnecessary expense on the credit card bill.

I still have some absolutely cracking domains in my portfolio but I’d say most people would look and say they could easily afford to lose 15-20% of what they own because they either have no intention of developing those domains, or some have become dead niches and past their peak, which in my case were a load of movie review domains.

Hosting (Couple of dollars short of $2000)

I rarely get wound up enough to swear but …..
OH F*CK IT!!!!!

Hosting should be a straightforward choice, but when you’re starting out and not too sure what direction you’re going in this can creep up on you with no real warning if you’re not tracking your finances. My aim was to build a network of sites all grouped up on different IP addresses so I could take advantage of building a few links here and there from different IP addresses instead of linking in and out from the one hosting account IP address which would have been completely pointless.

What I should have done is start a reseller account, which is what I have done now and it’s saved me a nice chunk of cash every month. A couple of unexpected bonuses are that I can now administer all my Cpanels from one login, and I can scale up my hosting easily without having to move a bunch of sites.

Not to mention as and when my sites get strong enough in authority to use for link building I can buy a unique IP address for each domain at $2 per month.

If you already do have a whole load of WordPress sites to move, WP Twin is fantastic for this, I used it for one of my most heavily modified WordPress sites and the whole process was a breeze, what could have been a complicated process was very simple. Plus it avoids the clunky operation of moving from one Cpanel to another Cpanel, it might just be me but I didn’t find it the most streamlined of operations, maybe I haven’t done it enough times.

Finally if you have a lot of sites interlinking to each other from different IP addresses because you have them on different hosts and you’re going to put them on the same reseller account IP then weigh up whether you can really afford to lose these links from your link profile, you won’t lose your external links, social bookmarks, article links etc as essentially they’ll all be pointing to the same domain name where ever it’s hosted, but all the links from each of your own sites internally will essentially be coming from the one IP address in the end which will diminish the strength of those links greatly.

The biggest culprit by far …….. Training ($11,000)

Oh my god ….. how much did I spend? All the sellers tell you, all the experienced affiliates tell you but nobody you really know or trust tells you which is why you pay no real attention to it.

The word is, not the bird (excuse the Family Guy humour) but ….. Concentrate on the one income source, master it, then move on to another and master that.

Oh why the hell didn’t I listen? If a family member who had experience in making money online had said this I’d of listened but no, people I didn’t know were telling me, I rarely get wound up enough to swear but ….. OH F*CK IT!!!!!

All those “little” $7, $17 and $49 payments soon mount up to something nasty.

Now I’m not saying all training is bad, there’s a lot of good training out there, but from nearly $11,000 worth of training over three years (nearly 80% of the $11,000 was spent in 2009) the ones that stand out head and shoulders above the rest are … (I have a few other good products I’ve used that I still want to review at a later date but these were the cream of the crop. I’m not saying buy them, by all means take a look, but when I look and stripped everything back, these were the three on their own that were solely responsible for me making money online).

1) Affiliit
Even though I’ve pretty much culled everything I spend on the credit card on a monthly subscription basis in way of training memberships and services this is the only one staying for sure, Clint and Chris were not only the catalyst for me taking major action and finally making money online this year but they also have everything you could possibly need in the way of training on Affiliit, you have a choice of paid traffic or free methods it’s up to you and they’re really helpful guys.

2) Niche Profit Course
Amazon is one of my regular income streams now and I’d say after numerous Amazon courses this is by far my favourite, if any friends or family wanted to try affiliate marketing this is the one I’d recommend them to buy first and only, in other words master it, only then move onto other methods.

Chris Guthrie has done a fantastic job of creating a course that will help anyone who’s starting from scratch and doesn’t know anything. To people like me who’ve done a lot of courses but still feel like there’s some missing piece of information they’re looking for.

Which I think for me was being shown some of Chris’s very own money sites, also explaining why he thought they work, cementing proof that selling on Amazon does work.

If you want more on this I’ve created a blow by blow account of every single course module on another site here ….

3) Ken Spano (Kenster on the Warrior Forum)
Ken is one of those rare few who when he posts up a WSO everyone who’s bought from him before dive in like rabid dogs to get what’s on offer. The two guides I bought from him were centred around CPA offers but reading through them you’re not just presented with a system but a new way of thinking.

The best one by far, and to be honest the all time best ever CPA related WSO on the Warrior Forum is Rags to Riches, I’ve not bought much for a while on the Warrior Forum but it’ll be hard to eclipse this WSO,

There’s hundreds of people on the Warrior forum who’ll agree 100% that this is solid stuff not only giving you a great foundation but also offering new ideas of his and creating the same mindset yourself to create your own ideas.

I can’t vouch for his latest course basically because I’m 100% focused on what I’m doing right now and I know for certain I’ll get sidetracked if I sign up.

(Late Addition – 20-11-10)
4) Warrior Forum – The War Room
I can’t believe I forgot this one, inside the Warrior Forum there’s a paid section called the War Room, I think if you click the forum section half way down you’ll get instructions on how to join.

What you’ll find in there is a gold mine of information, beta software trials and top marketers strategies and plans. There have been quite a few Warrior Special Offers go live for free in there just as a trial run. Every post has to be moderated before it goes live and the only criteria is that the post has some value. I paid $30 a couple of years back, I really do not know how much it costs now but I think it’s around $37 (one off payment). I would say if you’re short on money this is the one I’d recommend but that would be doing the War Room an injustice and would almost devalue the amazing content in there.

For the other $2000

This came out as regular run of the mill expenses like hardware and a couple of pieces of software, in comparison this didn’t seem too bad as I’ve had 2 monitors, 1 new computer, laptop, a couple of printers, ink, backup drives and various software, I won’t bore you with the rest.

So after all of that what can you take away from this agonising story of debt?

Concentrate on just one or two income streams your comfortable working with, I’m really hoping this post will prove the point that’s been repeated so many times yet so many people ignore this right up to the point of bankruptcy.

Any training I buy now, anything I read, all my time spent working is seriously focused on my main areas of income, nothing else.

Even though you’re thinking this is just a bit of spare money to start when you get your first few cheques, it can and almost certainly will turn into a business believe me, in which case you’ll need an accountant and you’ll need to keep track of your finances. Do it now, make a habit of it, start making PDF copies of all your purchase receipts, file them in an orderly fashion and create a simple spreadsheet of all your transactions and do this religiously every month, it doesn’t need to be any more complicated than that.

This not only keeps your spending in check so you can spot potential problem areas not just from past spending but forecasting what’s coming up ahead, also when it comes to the time you feel you need to get an accountant it’ll save you weeks of trawling through your past spending. Just as an example it took me 3 weeks, actually think it was longer and it was as boring and depressing as hell, so I could basically account for all my spending and claim it back off my tax bill.

Another little tip is to use one credit card or bank account for all your affiliate related purchases if you can, when I opened a business account, and had spending spread across multiple credit cards and bank accounts then explained this to my accountant. I’m sure while I was explaining it he was gritting his teeth and making a stabbing action with his pen at the desk.

And finally, this will blow your mind but I’ve only ever spent less than $300 on paid traffic, ironically I’ve spent more on paid traffic related courses. It really does scare me to think where I’d be now if I had to add this into the equation, more likely on the streets or living back at my mums house, or maybe a very slim chance of being rich.

So, be careful, even though this might be a hobby for you, treat it as a business because it soon could be.

And for me? Well I’m using all my affiliate and web design business income to rectify my mistakes and clear my debts, I know for certain I’ll have a bright future ahead but I’ve now got to wade through a pile of crap to get there, although I have learned a valuable lesson from my mistakes in not treating this as a hobby and making it more like a business endeavour which is so ironic seeing as this is exactly what I do successfully day in day out as an ecommerce manager.

So please don’t make the same mistakes I did.