Lets me ask you a question.
Would YOU rather be in charge of how your wealth grows with a high return, or would you let someone else tinker with your money hoping for the best?
Well, the answer is obvious, you would like to be in control of how your wealth grows and how your savings are being invested. That is completely normal, most people would answer like this. Because everyone likes to get a good return on what they invested. That is the whole principle of investment and the reason why you invested in the first place.
The question that arises now is; Why then, do so many people have money in high-interest saving accounts or term deposits. The typically plus we are looking at is around 2-3% annual return. In other words you put in $1 and get $1.03. This isn't great right?
Or, what about stocks and bonds? The Australian Stock Exchange has published recently a report showing that over the last 30 years Australian shares have produced a 9.5% return per annual or investment. To show this with $ signs, you spend $1 and get $1.09 after a year.
Now, these were just two examples so let's take another look at a way people are making money these days. Let's take the example of Real Estate. The market has climbed down to an annual return of 11.8% per year over the last 20 years. If we just look at the numbers this is golden in comparison to the others 2 options, but this isn't the kind of 'money transformation' that gets your business to the next level or a healthy bank account. Because after putting in $1 and getting $1.11 you aren't a rich men/women.
Not very inspiring, right? After reading about these numbers and seeing that your money is burning away for a return that doesn't even buy an ice cone, it feels like all hope is lost. But what if I told you there is a way to get an annual return of 50%. That would be something you could work with, right? Or what about an annual return of 150% that would be even better. So, would you believe me if I'd say there is a way to get an annual return of up to 305% and even 850%?
Probably not, because something that profitable couldn't be out there otherwise everyone would be doing it. But wait it is out there, and we are engaging with it every day. I am talking about Advertisement. Here two examples of an investment into Facebook Advertisement:
Spend - $5,989.09 | Return - $163,969.49 | Return of investment in (%) - 2,737.80%
Spend - $14,230.51 | Return - $152,475.53| Return of investment in (%) - 1071.41%
I think you can see that the investment you made into your advertisement got a return that stands crushes to options above. Furthermore, you have control while investing into your advertisement. You control how much money you want to spend, to get a desired outcome. That is because the higher the Ad Spend is the higher the return on your investment.
So, the big question is how much should you invest into your advertising for your business?
I read a lot of books on this topic and there are whole university courses talking hours and hours on how much is enough and how to calculate the best amount. They say things like you should spend 10% of your turnover on marketing. But here is the thing: you should only have a marketing budget if your marketing strategy isn't working out. Because if you are putting in $1 and getting out $3 ...why wouldn't you want to put in as much money as your cashflow allows.
I read in a book that you can think about it like a vending machine. You pay $1 and get for it $5. It is like buying money at a discount rate.
Now, you have the opportunity to make the evolutionary change from investing money in something that is awarding you with a return lower than the cost of an ice cone, or you could start investing into your business inform of marketing and get yourself and your brand to a whole new level.
You decide when to start the vending machine!