Don't confuse popular with profitable
Posted
Aug 20 2008, 04:44 AM
by
Ryan MacClanathan
Rating:
This post comes from partner blog The Dough Roller.
Whether it comes to investing, making money blogging or just about
anything else in life, popularity can come with a hefty price tag.
With investing, following the crowd is a surefire way to lose a
lot of money as you repeatedly sell low and buy high out of fear of market
losses. With blogging, sometimes the rush of a "popular" article can
keep you writing content that is popular with social media sites like Digg or
Reddit but generates little income or lasting readership.
With spending, keeping up with the Joneses can drain your bank
account faster than a Kevin Trudeau infomercial. So what follows are nine ways
to become the least popular -- but most profitable -- person you can be.
Build out of brick,
not straw
"In
matters of style, swim with the current; in matters of principle, stand like a
rock." -- Thomas Jefferson
Whether you are building an investment portfolio, a moneymaking blog,
or a career, build to last. What does this mean? Here are a few examples from
the world of investing:
- "I just bought into financial stocks, which a friend of
mine who works at a bank says can't lose." (straw)
- "It was one of Money Magazine's '25 Funds to Buy Now!', so
it must be a good investment." (straw)
- "My investments are based on an asset-allocation
plan I've stuck to for years, during good times and bad." (brick)
The popular thing to do is what everybody else is doing. Sticking
to a boring asset-allocation plan won't make the cover of Money Magazine, but
your retirement fund will thank you.
Follow with care
"One
hundred thousand lemmings can't be wrong." -- Graffito
Did
you ever notice that people love to follow? If the market is down, people
follow out of fear by selling investments. When the technology field was hot,
many followed into dot-coms, investing both their careers and retirement
accounts in companies that never generated a nickel of income. In hindsight,
following almost always looks silly.
It
is important to learn from those who have something worthwhile to teach, and
life is all about taking calculated risks. But don't be a lemming.
Despise flattery
"Flattery looks like
friendship, just like a wolf looks like a dog." -- Unknown
Perhaps the worst character trait in a leader is the desire for
flattery. A compliment now and again is nice, but an overly strong desire to be
accepted and liked causes one to live life for others. Doing what the crowd
wants you to do can bankrupt you, financially and otherwise.
Think for yourself
"Trust yourself. Think
for yourself. Act for yourself. Speak for yourself. Be yourself. Imitation is
suicide." -- Marva Collins
We often take great comfort in following the crowd. If the crowd
turns out to be wrong, it does not seems as bad as being wrong all by
ourselves. The problem is that the crowd is wrong a lot. More importantly,
greatness is never found in a crowd. Even Einstein's views of the universe were
ridiculed at first.
Learn from failure
"I don't know the key
to success, but the key to failure is trying to please everybody." -- Bill
Cosby
One of the benefits of thinking for yourself and making your own
decisions is learning from failure. I made many mistakes when I began investing,
including buying high-cost mutual funds. But I learned early, corrected the
mistakes and kept investing.
I've also made many mistakes blogging. One such mistake was trying
to write articles that I thought would be "popular." At its heart, my
blog is about investing, retirement and money management, but not frugality.
Yet for a while I wrote a lot of articles about frugality. That's fine, to a
point, and my most popular article ever is 75
Money Saving Tips, with more than 40,000 page views. But that article has not been very profitable, and more importantly, it
distracts from the focus of my site. Besides, there are other blogs that do a
much better job at writing about frugality than I ever could, Being Frugal chief among them.
Learn from success
"All you
need in this life is ignorance and confidence; then success is sure." -- Mark Twain
When you make your own decisions, you can not only learn from
failure, but also from success.
I've spent a lot of time studying search
engine optimization. I've had both success and failure, and I've learned from
both. For example, I am now trying to improve the rankings for my site for a
particular keyword. At one point I didn't rank at all for the keyword. After a
while, I hovered around 50-60 (Page 5 or 6 on Google). Today my site ranks on
the second page for the keyword. I've learned from that success and hopefully
will eventually rank on the first page.
The point is that if you don't make decisions for yourself and
just follow the crowd, you can't learn from your success or failure.
Put money second
"Do not hire a man who
does your work for money, but him who does it for love of it." -- Henry
David Thoreau
It may seem odd that a blog about money recommends putting money
second. Actually, it would be better to say, "don't put money first."
I blog for money, but I blog about personal finance, investing and blogging
because I love reading, researching and writing about these topics. In the
make-money blogging world, I daily read bloggers pushing products and services "guaranteed"
to quickly make your blog profitable.
Buying into these short cuts is almost always the result of
putting money first. In the world of blogging, put quality articles first and
the rest will take care of itself.
Eschew fame
"Fame lost its appeal
for me when I went into a public restroom and an autograph seeker handed me a
pen and paper under the stall door." -- Marlo Thomas
When I first started The Dough Roller, I
knew absolutely nothing about blogging. Early on one of my goals was to get an article to
the front pages of social
media sites like Digg, StumbleUpon and Reddit..
What a waste. While I at times have received as many as a 1,000
visitors an hour from these sites, the revenue and lasting value to my site is
nil. It caused me to write articles that veered from my main focus. In most cases these social media sites are
not the path to blogging wealth.
Stay true to yourself
"A man
cannot be comfortable without his own approval." -- Mark Twain
Warren Buffett invests in what he knows and understands, which is
why he did not get caught up in the technology bubble. I blog about what I know
and enjoy: studying personal finance, investing and blogging. Doing something
simply because it is what everybody else is doing is a recipe for disaster.
Stay true to yourself, work hard, and never give up. You may not be the most
popular, but you'll have a better shot at being more profitable.
Perhaps Warren Buffett said it best:
"The most
important quality for an investor is temperament, not intellect. . . . You need a temperament that neither derives
great pleasure from being with the crowd or against the crowd."
Other articles
of interest from The Dough Roller:
The
Kiva.org credit card: Arguably the best card of all time
7
myths about S&P 500 index funds
Tutorial
-- how to start a money making blog
