I’ve been thinking a lot about risk versus reward lately . Taking risks and managing risk is really the key to success in business and affiliate marketing. Every person you read about that has been successful was able to take some big risks that paid off. But I guarantee, those risks were fully weighed out and calculated in almost every case.
It’s true that it takes money to make money, and that is one of the hardest parts when you are starting out with affiliate marketing. I remember how nervous I was on my first media buy 3 years ago when I had to put $10,000 up front. I had done my research though and was confident it would pay off. The risk was managed as much as possible by research about the traffic and expected results.
More recently I took a calculated risk in the stock market. I had done a post using the recession to make some bold moves. When the market was basically collapsing and in sheer panic I bought Citigroup at 1.05. Talk was they were about to go Chapter 11, but my research and gut told me to take a calculated risk. I’ve since made a 195% return on that trade. Of course, not all risks pay off, but this one paid off enough to cover some not so great ones.
Pay per click can seem risky when you are starting out, but there are some ways to lower the risk.
- Use PPC coupons to start out, that way you are using free clicks to test your offers.
- Don’t spend more than you can afford to lose. This week I talked to a guy on email who had ran up $5k on his credit card with PPC and had 0 conversions on the campaign. He didn’t have the money to pay it back and was in trouble.
- Watch your campaigns closely and set daily budgets. That way you don’t go to bed one night and wake up in the morning with a costly suprise.
In general, risk is part of success. When an opportunity comes along, don’t be afaid to jump on it, but only after you have researched every possible thing you can about it. Then it might not seem so risky after all.
I think it’s a matter of calculated risks paying off with big rewards. You can drop money on a whim and hope for the best, or research, like you did, to look at the pros v. cons. If I’m thinking of making a large purchase, I’ll even make a list of pros and cons on paper (or Word). In any questionable situation, it’s good to do some research.
I am a big risk taker so can relate to what you are saying here. I think it does pay off in the long term if you do your research and don’t feel obligated to participate everyday.
I am not keen on PPC but take my risks in the stock market and property investment since I have the capital to do so.
For stocks I try and buy at unusually large dips in the price and with property it is about investing in my home where I buy a property with development potential at a market dip and stick with it for several years. Before this I may rent accommodation.
Yeah, I can definitely relate to you on this one Chad. I got into my first media buy a few weeks ago for $12k, ended up losing $4k before calling it off. I guess it all comes down to calculating your risk and doing your homework before hand like you said. You can always learn from your mistakes but it’s never easy to swallow.
I think with risks… you won’t always win… but as long as you have a good winning percentage, than that’s all that matters in the end. Offcourse…you have to make enough money for that ratio to be even worthy, lol.
So Have you sold your shares of Citi Yet? Or are you going to hang on to it for the long run?
Till then,
Jean
Yes it is definitely true that there are risks involved especially with the higher reward opportunities in investing, and like you said the best way is to be prepared and by preparing you are reducing the risks involved with the investment. It’s like like when Walmart or any other big company opens up a store in a new location, they research the location, the market, and analyze the situation completely before building at that location, they know pretty much before they have even built the place, just how much success it can generate. That’s how good sometimes you have to be when dealing with your own investments.