Affiliates struggling to earn $100 a month often find it hard to believe that other people could possibly earn as much as $10,000 or even $100,000 a month in commissions.
Believe it. Big commissions do happen. And you can expect to hear about even bigger commissions.
Forrester Research predicts that affiliate programs and affiliate networks will produce $280 billion annually in e-commerce sales by 2008.
In most programs, 5% of the affiliates generate the vast majority of the sales. If you're not in that 5% and want to be, you'll have to change what you're doing.
Here are 12 mistakes you could be making, and how to fix them.
1. Are you telling people how to make money on the Internet when you don't know how yourself?
Perhaps - just perhaps - you can succeed at this, but it's the most obvious trap into which new affiliates fall. You join a few affiliate programs and set up a site offering Internet marketing tips, work-from-home tips, instant-business tips, or be-your-own-boss tips.
The advantages of doing this include having great products to promote, high commissions and lots of help from Internet marketers.
However, if you do this, you face two massive challenges.
1. You'll have hundreds of thousands of web pages out there competing with yours.
2. You're competing with the planet's best marketing EXPERTS. Some of the brightest brains in Internet marketing are working full-time to grab the attention of your target audience.
I'm not saying you can't succeed in this field, but if you're new to affiliate programs, this is definitely NOT the best place to begin. If you're struggling, find a less well traveled path.
You don't have to abandon your existing website. Just launch a new one based on a new theme. Later, when you've learned more and really have something to offer, it will be time to revamp your marketing tips site.
Choose a new theme. Try a new niche.
Three Factor Model for Portfolio Management
Three factor model, popularly known as Fama and French three-factor model, is one of the most followed portfolio management
models. The model was developed in 1993by Eugene Fama and Kenneth French; by modifying other very popular investing model Capital Asset Pricing Model (CAPM). Three-factor model is widely followed by investors and fund managers to analyze risk and return associated with instruments/markets and to make highest return for risk taken.
For good understanding of three-factor model, understanding of CAPM, the original model, is necessary. CAPM consider only one factor, the market risk or beta, to determine the risk and return. The formula of CAPM is as follows
R = Rf + beta x (Rm - Rf)
Where R is the return, Rf is the return rate of risk-free investments, beta is the risk associated with a security/market, and Rm is the return expected from market. The model says that it is better to invest in instruments/markets whose expected return exceeds required return. CAPM successfully explains around 80% of returns.
Three factor model is more evolved than CAPM. In addition to market risk or beta, it considers two more market factors, size or market capitalization and value or book/market ratio of an instrument. The formula of three factor model is as follows,
R = Rf + beta x (Rm - Rf) + Bs x SMB + Bv x HML
Where SMB is ‘Small cap Minus Big’ (historic excess returns of small cap instruments), HML is ‘High value Minus Low’ (historic excess returns of value stocks), and Bs and Bv are beta corresponding to small cap and large cap portfolio having values either 0 to 1. For a portfolio having all small cap stocks Bs will be 1 and Bv will be 0 and for a portfolio having all large cap stocks Bs will be 0 and Bv will be 1.
The idea behind the three factor portfolio management model is that, value and small cap stocks often outperform large-cap stocks. Most possible reason for this out performance include 1) higher reward for compensating higher risk taken, 2) early mispricing of equities resulting in later corrections, and 3) small-cap companies often shows higher growth and this is reflected on their stock prices.
The widespread adoption of three factor model by investors is a result of the fact that mutual funds and portfolio managers following three factor model of investment outperformed most others. Investors can also add custom factors to the model to make it more precise and to enhance reward. But investing only in small cap or value stocks can cause problems for investors, especially in periods of high volatility. Investors should diversify their portfolio investments and should be aware of other risk minimizing strategies.
models. The model was developed in 1993by Eugene Fama and Kenneth French; by modifying other very popular investing model Capital Asset Pricing Model (CAPM). Three-factor model is widely followed by investors and fund managers to analyze risk and return associated with instruments/markets and to make highest return for risk taken.
For good understanding of three-factor model, understanding of CAPM, the original model, is necessary. CAPM consider only one factor, the market risk or beta, to determine the risk and return. The formula of CAPM is as follows
R = Rf + beta x (Rm - Rf)
Where R is the return, Rf is the return rate of risk-free investments, beta is the risk associated with a security/market, and Rm is the return expected from market. The model says that it is better to invest in instruments/markets whose expected return exceeds required return. CAPM successfully explains around 80% of returns.
Three factor model is more evolved than CAPM. In addition to market risk or beta, it considers two more market factors, size or market capitalization and value or book/market ratio of an instrument. The formula of three factor model is as follows,
R = Rf + beta x (Rm - Rf) + Bs x SMB + Bv x HML
Where SMB is ‘Small cap Minus Big’ (historic excess returns of small cap instruments), HML is ‘High value Minus Low’ (historic excess returns of value stocks), and Bs and Bv are beta corresponding to small cap and large cap portfolio having values either 0 to 1. For a portfolio having all small cap stocks Bs will be 1 and Bv will be 0 and for a portfolio having all large cap stocks Bs will be 0 and Bv will be 1.
The idea behind the three factor portfolio management model is that, value and small cap stocks often outperform large-cap stocks. Most possible reason for this out performance include 1) higher reward for compensating higher risk taken, 2) early mispricing of equities resulting in later corrections, and 3) small-cap companies often shows higher growth and this is reflected on their stock prices.
The widespread adoption of three factor model by investors is a result of the fact that mutual funds and portfolio managers following three factor model of investment outperformed most others. Investors can also add custom factors to the model to make it more precise and to enhance reward. But investing only in small cap or value stocks can cause problems for investors, especially in periods of high volatility. Investors should diversify their portfolio investments and should be aware of other risk minimizing strategies.
5 Action Items to Make a Six Figure Income
Studies show that 95% of people that attend wealth conference and purchase “how-to” books are in the same spot they were a year after they made a commitment to change their lives and get a handle of their money.
The only thing holding you back from being right in the same place you are now in one year is not taking action. If you don’t take action, it is likely that nothing will change. Here are five things you can do right now to do something about your current situation and improve whatever situation your finances are currently in.
Here’s what you need to do Today to Get Going on Producing a Six Figure Income:
Create a Budget: Use an online budgeting system, such as Mint.com, to manage your finances and create a budget. Analyze your income, the amount of money you are spending, and what you are spending it on. Figure out how much you can feasibly save a month.
Create a Debt Paydown Plan: Take the maximum you can save a month to payoff your loans. Use the Dave Ramsey debt snowball method to get out of debt as quickly as possible – paying the minimums on all of your credit cards except for the one with the greatest balance. Put as much money as you feasibly can to paying that one off, then move to the next one.
Open a High-Yield Savings Account: Once your debt is manageable, you need to create an emergency fund or you risk ending up right back where you started. One unexpected medical bill can drive you deep in debt, but not if you are prepared for these circumstances. Put this money in a high-yield savings so you earn a decent interest on your non-invested cash.
Start Investing: Now that you have paid off your debts and created an emergency fund, it’s time to start accumulating more wealth. Continue saving as much as you can so you can put that money to work for you in an investment account. As a result of investing in a diversified stock portfolio, your money will turn into more money. Not sure how to invest? No problem. Just simply invest in a life-cycle fund that is targeted to your expected retirement date. It will manage itself for you.
Build Additional Income Streams: In addition to keeping debts down, managing money, and putting their money to work for them, millionaires are skilled at producing several income streams.
The only thing holding you back from being right in the same place you are now in one year is not taking action. If you don’t take action, it is likely that nothing will change. Here are five things you can do right now to do something about your current situation and improve whatever situation your finances are currently in.
Here’s what you need to do Today to Get Going on Producing a Six Figure Income:
Create a Budget: Use an online budgeting system, such as Mint.com, to manage your finances and create a budget. Analyze your income, the amount of money you are spending, and what you are spending it on. Figure out how much you can feasibly save a month.
Create a Debt Paydown Plan: Take the maximum you can save a month to payoff your loans. Use the Dave Ramsey debt snowball method to get out of debt as quickly as possible – paying the minimums on all of your credit cards except for the one with the greatest balance. Put as much money as you feasibly can to paying that one off, then move to the next one.
Open a High-Yield Savings Account: Once your debt is manageable, you need to create an emergency fund or you risk ending up right back where you started. One unexpected medical bill can drive you deep in debt, but not if you are prepared for these circumstances. Put this money in a high-yield savings so you earn a decent interest on your non-invested cash.
Start Investing: Now that you have paid off your debts and created an emergency fund, it’s time to start accumulating more wealth. Continue saving as much as you can so you can put that money to work for you in an investment account. As a result of investing in a diversified stock portfolio, your money will turn into more money. Not sure how to invest? No problem. Just simply invest in a life-cycle fund that is targeted to your expected retirement date. It will manage itself for you.
Build Additional Income Streams: In addition to keeping debts down, managing money, and putting their money to work for them, millionaires are skilled at producing several income streams.
Subscribe to:
Comments (Atom)
