That’s what an expert financial planner I know said to me after he discovered the industry. I’ve known for years that affiliate marketing can provide a steady stream of income—I’ve been doing it for over a decade—but it took the eyes of a man who retired at 35 years old to make me realize just how much wealth that money represented.
Todd Tresidder managed a very successful hedge fund for years. How successful? Well, when he sold the business he was able to retire!
In his own words he was tired of working to “make a few percentage points” for his rich clients and wanted to use the wealth-building skills he had learned to help people who actually needed it. That’s when he started his financial planning business.
Ten years later Todd decided to take his business online and came to Arlene and I for help with building a great website. One day when we were talking and Todd said something that just floored me. He said “you know. . .
“$100 Per Month is Equal to a $30 Thousand Retirement Plan”
That’s right. If you make just $100 a month from your affiliate marketing business, that’s the cash flow equivalent of having a $30 thousand dollar retirement plan.
Now Todd knows his numbers—he does run his own financial coaching business after all—but it took a bit of convincing before I was willing to accept that. It simply sounded too good to be true.
So I had Todd walk me through the math, referring to his past experience with retirement planning.
- His clients comfortably drew between 3.5% and 5% from their retirement assets yearly
- That percentage was profit earned, not skimmed from their investment
- That percentage replenish itself over the next year (just like a steady income from affiliate marketing)
- $100 per month is equal to just 4% of the profit earned on a $30 retirement package
The Wonders of a Passive Income
So how are affiliate marketing and years of financial planning, investing, and returns alike?
They both rely on passive income.
As Todd explained, retirement packages earn passive income indirectly through interest paid in return for investments. Affiliate marketing earns passive income directly through “automatic” sales.
That passive income must be measured differently. Todd calls it “leveraged income” and adds that “if you’re doing it properly . . . you can build a long term residual income stream.”
In other words, once you set up your affiliate marketing business and get things off on the right foot, you can make money reliably on a regular basis without doing any more work. (Of course the more work you do, the more money you will earn).
“That First $100 is Always the Hardest”
While $100 per month may sound like a lot to someone just getting started in the business, it’s easier to achieve than you may think. There are thousands of affiliates out there making much more than that. It takes persistence, skill, and a lot of planning up front but that number is very achievable. In fact, I know one affiliate marketer who earns thousands of dollars per year off a single article he wrote a long time ago.
On the flips side, those of us who have been in the business for a while and make might think about all the work we put into making that $100 and say that “that’s not really worth it.” Don’t fall into that trap!
Remember, that $100 is the cash flow equivalent of having $30 thousand sitting in a retirement package.
Planning Your Own Early “Retirement?”
Not everybody can afford to retire at 35 like Todd—even though many of us wish we could. But have you ever stopped and asked how much do I need to retire?
That’s a personal question and depends very much on the type of lifestyle you wish to lead. Todd’s written a book that can help you answer that question which, funnily enough, is entitled “How Much Do I Need to Retire?”
But if you plan on using income from affiliate marketing to fund at least some of your retirement, Todd has some advice for you.
If you’ve calculated that magical number (say $1 million) and wonder how that $100 per month you’re making from your affiliate business can get you there, Todd says that it’s just a matter of “multiplying it out at that point. You’re just adding zeroes . . .”
So if you want to be able to have the cash flow equivalent of someone sitting on a million dollar retirement package, all you have to do is bring home a little over $3,000 per month. It sounds like a lot now but getting from $100 to $3,000 per month is easier than getting from $0 to $100.
Don’t Succumb to the Number One Cause of Failure!
When I asked Todd what the number one cause of failure for those in the affiliate marketing business was he didn’t even have to think about it. He answered simply “lack of persistence.” Either people don’t put in the necessary effort to get their business off on the right foot or they give up on it before they ever see the real profit.
That’s not just true for affiliate marketing, it’s true for life in general. The more committed you are to a thing, the better chance you have of being successful at it.
Remember, it may take months before you make that first sale but if you “rinse and repeat” you will soon be well on your way to building that “million dollar retirement.”
About James
James Martell is a successful author, podcaster, and speaker. He’s a leading expert in affiliate marketing and outsourcing as well as a specialist in SEO. James is host of the Affiliate Buzz podcast on WebmasterRadio.FM (the first ever and longest running podcast about the affiliate industry), and creator of the Affiliate Marketers SUPER BootCamp. He lives in White Rock BC, a seaside suburb of Vancouver on west coast of Canada with his wife, Arlene and their four kids.
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Twitter: SBMommy
says:
Great article. What would you say is the most important factor in running a successful affiliate marketing program (other than persistence)?
ColorfulChildhood recently posted..Aviation-theme Rooms – Airports- Airplanes- Helicopters
Twitter: JamesMartell
says:
I would say the ability to stay focused. It seems to be an area where so many have trouble. The Internet by its very nature is distracting. It’s easy to start a new site or join another affiliate program. It’s a whole other thing to see it through to profitability.
James
James Martell recently posted..Do You Have a Plan To Get What You Want And How To Apply it To Your Online Business
Everyone should have a teacher or mentor in their field they follow. James has been mine since his first 2002 ebook release. He’s great as he teaches to build a site rich with quality content and backlinks. Can’t say anything other than great things about him.
Twitter: JamesMartell
says:
Hey Steven, thanks so much for the kudos. They’re much appreciated.
James Martell recently posted..Affiliate Buzz 205 – Affiliate Summit Meet-ups – Why You Should Attend One In Your Home Town
Twitter: DennisEdell
says:
Interesting math James, i’ll be giving this article another go through.
Dennis Edell recently posted..You Really Need to Read the Post- THEN Comment
Twitter: JamesMartell
says:
Hi Dennis, I had thought the same when Todd first presented it to me. He truly is an expert in his field and knows his numbers. It really is an exciting formula. If you work it out the math would say that a $3,000 monthly recurring income is equivalent to a $900,000 retirement fund.
Which is easier?
Saving $900,000 or developing a $3,000 per month affiliate revenue stream.
James
James Martell recently posted..Affiliate Buzz 205 – Affiliate Summit Meet-ups – Why You Should Attend One In Your Home Town
Twitter: DennisEdell
says:
Short of bank robbery, I’d say you’re on to something here.
Dennis Edell | Ditrect Sales Marketing recently posted..Google 1- The Plugin is Out
Twitter: azungawebdev
says:
I’d love a $1,000,000 retirement fund. Thanks for the post and information. I’ve been looking into affiliate marketing but I’m finding it tough to find the right path. Thanks.
Twitter: BetterBenches
says:
Azunga, if you want to get into affiliate marketing and find good solid information that you can build a business on, you’ll definitely want to check out James and the Affiliate Marketers Bootcamp. I’ve been a student for a little over a year, and the personal support coupled with the no-nonsense training are second to none. You won’t find a lot of over-inflated promises and hype here.
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Twitter: JamesMartell
says:
Hi Stan, thanks for the kudos. It’s been great to get to know both Deb and yourself.
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Twitter: BetterBenches
says:
I love this concept. It makes perfect sense, because what people are seeking for in retirement is a steady income stream. Having retirement savings of $300k, or even $1M, is simply a means to that end, as people seek to invest their savings in places that give them a good and reliable rate of return (an income stream).
An affiliate business can provide that same income stream in a different way.
I agree with Todd and James in that the most important things for affiliate marketers (and anyone, for that matter) to remember is to be persistent and to stay focused. It can be hard, but it is necessary to be successful.
Stan Horst recently posted..Oxford Garden Chadwick Bench – An Amazing English Garden Bench
Twitter: JamesMartell
says:
I love the concept as well. It does make so much sense. All the kudos to Todd for sharing the information with me that inspired this article. I have included a link below to Todd’s original article.
http://jamesmartell.com/featured-articles/how-your-affiliate-business-is-like-a-1000000-retirement-plan/
Focus is hard sometimes when your job invovles you being online all day, as you said the internet by its nature is distracting. I like your point about 100$ a month being equivalent to a $30,000 retirement fund
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Twitter: DennisEdell
says:
Do you realize the left hand social buttons disappear after hitting submit on a comment?
Dennis Edell | Ditrect Sales Marketing recently posted..Google 1- The Plugin is Out
Some great pointers there. The affiliate/internet game isn’t hard once you’ve made that first $100 then it’s all about testing and tweaking.
And you are spot on about people not realising that saving now will make so much difference to their future. The lack of financial knowledge most people have is just frightening.
daphcham recently posted..Chamonix
Twitter: JamesMartell
says:
I agree. If you can get to the first $100 you are on your way. Initially my first goal was to earn $100 a day. Once I hit it I never looked back.
James Martell recently posted..Affiliate Buzz 206 – How Many Backlinks Do You Need To Earn a 5-Figure Income
James Martell, thank you so much, man. The article is really useful, every person can learn so much from this. The affillate business grows fast, especially in my country.
Twitter: JamesMartell
says:
Thanks for your feedback. It’s much appreciated.
James Martell recently posted..Affiliate Buzz 206 – How Many Backlinks Do You Need To Earn a 5-Figure Income
Great article. A little percentage of profits, or salary for that matter kept in a savings account can add up to wonders. But the method I believe is to have that dicipline where a certain percentage is generated for that purpose and is never to be looked at until the right time comes. But on the contrary to my belief, looking at an increasing number can get one motivated.
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Twitter: JamesMartell
says:
I agree that “an increasing number can get one motivated”. That’s a great quote.
James Martell recently posted..Affiliate Buzz 206 – How Many Backlinks Do You Need To Earn a 5-Figure Income
Twitter: buyrightstocks
says:
It seems that the affiliate business is a good choice if we want to enjoy the early retirement.
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Twitter: JamesMartell
says:
Hi Dana, yes I understand it has a lot of potential. (tough in cheek)
James
Affiliate marketing, like any other online money making method takes real work and dedication.
Unfortunately, because of so much hypes and lies by many so called “super affiliate marketers” has so may people believe that its easy and quick. And that is why most people who start affiliate marketing, give up quickly because they fail to “get rich over night”.
satrap recently posted..Affiliate Marketing is not Easy but Possible
Twitter: opportplanet
says:
The beginning is always the most difficult part not only in affiliate marketing but in quite everything in life, it really requires hard work and motivation to even make a few dollars but when you get experience and start earning a few dollars, everything is much easier
Kostas recently posted..The benefits of affiliate marketing to promote your online store
I love reading articles like this one. They motivate me a lot in what I am doing which is building a passive income from online content through adsense and other networks and at the same time investing most of the online income in stocks that pay dividends and other types of income investments. One thing that many people don’t realize is that while the income may appear low at first it just keeps building up faster especially if you reinvest it. This is why I try my best to reinvest my online income even if its not really much.
I built a small website like 3 years ago and its still making cash and I haven’t touched it for like one and a half years. In fact monthly earnings have been going higher as more time passes. Other people reinvest online earnings buying more sites which is also a good idea. Passive income is the way to go for anyone that wants to retire early. In my case im 29 and if everything goes well I plan to retire at 40 and focus on online income and investments.
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Great article James! In working online it needs passion and determination to go through success. I love the idea that you have share here James. Thanks!
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