Making an income online can come through various means.
If you are looking for a way to make money online, there is some preparatory work to do before you dive in. I will go through three options and tell you what you should look out for in each of them.
Nothing is cast in stone in this article but they represent 100% my opinion and I hope it is useful for your decision.
Option 1: Forex Trading
Forex trading is one of the lucrative ways to make money online but you can also lose big.
The secret is not about being careful with trades though a certain level of due diligence should be exercised.
To put in a very blunt way, the forex market has no concern whatsoever on what you think of it. You may think that it is a bullish or bearish trend but that’s just your opinion. The market won’t adjust to your opinion (That’s just wistful thinking!)
However, having an opinion is absolutely important for forex trading but it cannot just be an opinion. That’s where the rules of engagement come in or commonly known as ROE.
What are ROE?
Essentially, the rules of engagement in trading tell the trader when to place trade and when to exit. On top of that, a profitable trader has to be able to read market signals and predict movements.
Trading in a nutshell is not an easy skill to acquire.
Many people went into speculative trading by knowing one or two things. However, without a clear set of rules of engagement and sound fundamentals of trading signals, they easily fall into what is known as emotional trading.
Emotional trading is highly dangerous and leads to account blowouts. This usually occurs when traders try to chase a losing trade and end up over-committing. I came close to it myself and let’s just say the experiene did not make me richer but it caused my stress level to hit the roof.
The end result is a loss that is many times more than the original and in some cases, it dealt damaging blows that are irrecoverable.
I won’t go into the specifics of trading but as you can foresee, trading is not an easy route. As I have blogged about trading in my website, people do ask me my opinion.
This is what I say. Trading is suitable for people who:
- Can afford the extra cash to learn how to trade. Trading course/mentorship is not cheap. I paid over US$5000 for my course. You may get free resources online and try to piece everything together. Possible but not easy for the majority
- Have the money to ‘lose’. When you trade LIVE eventually, the golden rule is never trade with money you can’t afford to lose. If you depend on that money to survive, pay the bills, put food on the family table etc., then you SHOULDN’T trade
- Possess discipline. To be frank, this has to be trained. I observed many people perform excellently when they paper-trade but the moment they start with real money, it’s a totally different ball game and if discipline is not your forte or if you haven’t quite acquired the necessary will power to stay on track with a pre-determined ROE, trading is NOT for you
- Are NOT looking for a Get-Rich-Quick-Scheme! Many programs try to lure people into the world of trading by ‘showing’ how easy it is to make money. Within minutes, money changed hands and their accounts grew from a few tens of dollars to thousands. Real traders show their winnings but more importantly, they will also disclose their losses!
An interesting fact to mention here is that to become a profitable trader, you just need a win rate of 55-60% of all your trades by letting your winning trades roll and stopping your losses early. We all know that but it is easier said than done.
If you are not qualified in any of the above, it is best not to venture down this route.
PRO –> It takes relatively little time to trade and if depending on your trading style (i.e. swing trading), you may just be trading only once every few days
CON –> Trading comes with HIGH risk of losing capital QUICKLY. Unless you have a healthy amount of CAPITAL to weather through the drawdowns (inevitable periods of losses…even when you are doing all the right things), it is extremely risky to your financial and emotional health
Option 2: Become An Online Seller/Merchant
The traditional way of making money is to sell goods.
Today, technology is making it easier for more people to start their online business selling products.
Good examples include eBay and Carousell where you can make your products (either NEW or USED) available for sale through these online sites.
With eBay or Carousell, people do make some money from the sales but it is not a substantial amount and not a regular income replacement option.
The other option I prefer is Amazon FBA (Fulfilment by Amazon) where you register to be an Amazon Seller and peddle your products on Amazon.com.
I wrote an article recently to explain what Amazon FBA is and the points to look out for if you are keen to pursue this route. READ IT HERE.
In a nutshell, online product selling will work out well for those who:
- Passionate about selling physical products
- Have the capital to invest in the initial inventory. We are talking about hundreds of units of the same product as most suppliers won’t just sell you a few pieces. With bulk purchase, it is also easier to negotiate for a better pricing
- Who doesn’t like to write long form articles/content. You still need to craft content for your product description but they are more straightforward and less lengthy
- Skilled in product marketing. This is a bonus if you are creative with your marketing strategy. Products sell because of marketing FIRST and then rave reviews
Can online physical sales bring in income? With millions of sales going through e-commerce sites like Amazon, there is great potential.
However, it does not imply quick money either as at any point, your product is competing with other private labels, essentially entrepreneurs like yourself who are selling similar products but under a different brand name.
PRO –> When you hit a jackpot product that is selling well, you can really thrive on that for continued income.
CON –> Initial capital is required. Well, it may not be that high compared to traditional brick and mortar business but stocking up inventory can easily set you back by a few grands, depending on item
Option 3: Become An Affiliate Marketer
If you are risk averse, trading may not work for you.
If you have no interest for holding onto inventory, Amazon Selling will not gel well either.
This brings us to the third option which is also the one I’m doing right now and that is to become an affiliate marketer.
Instead of creating and branding your own physical products to sell, you sell for others by means of product reviews that eventually lead someone to buy the product through your affiliate link.
Though you don’t get the full revenue for the sales, the commission from each sale does add up especially when you are promoting subscription based products such as membership sites.
With subscription based products, you get paid every month as long as your referrals stay with the product. Over time, it really builds up and becomes a credible replacement for your income.
Affiliate Marketing is really suitable for those who:
- Do not want to invest a lot of money upfront. Don’t get me wrong! You still have to pay for website hosting, WordPress themes, miscellaneous add-ons like autoresponder etc. but compared to the first 2 options, it is significantly lower. CLICK HERE for my blog post on Starting Costs For An Affiliate Business
- Enjoy reviewing product and sharing them in written and/or video form
- Have the PATIENCE. We are talking about months before you start to get any traction. Why? Because your website and videos (i.e. YouTube, Vimeo) take time to be indexed and to rank favourably compared to others
PRO –> Easy to start and relatively low cost. For less than USD 500 a year, you can start your affiliate marketing business and break even in less than a year. Over time, your business cost stay more or less the same while your revenue continues to build up
CON –> You have to enjoy writing or be comfortable in front of a videocam! With affiliate marketing, your money making product is your content, the product reviews you upload to your website. Expect plenty of research, writing and if you are game for it, videos to promote your affiliate products. Just head over to YouTube and you will see product reviews by different YouTubers. By clicking on their affiliate links, they earn when you purchase any of their reviewed items
So what’s it for you?
Trading, Amazon Seller or Affiliate Marketing?
All three options are legitimate and scam-free. What you choose really depends on your situation and appetite. However, there is a common thing. None of them are get-rich-quick. In other words, if you depend on creating an online income from scratch to quickly meet your financial needs, none of them is the right option.
They work well when you are already receiving a stable income but wanted something more so that you don’t have to be chained to the 9-to-5 corporate desk or stuck in a job that doesn’t pay you well.
As mentioned earlier, I am into affiliate marketing and it is turning out very well for me because my capital outlay is low and sales are coming in as my blog reviews gain a greater outreach over time.
If this also appeals to you, I invite you to join this membership site known as Wealthy Affiliate. It is a membership site that provides extensive and updated training for aspiring affiliate marketer at any level. On top of that training, resources and tools are also included on the platform so that you can get your website up and running even from Day 1!