In Part 1 we covered how the internet changed the economics of content creation.
Now, in Part 2, we cover The Principles Of Ethical Monetisation:
- Both the consumer and the producer should benefit from any transaction
- The producer should not sell things that don’t deserve to exist
- The consumer should not expect something for nothing
- The producer should make clear the cost upfront
- If the consumer doesn’t know how much they’re paying in fees, it’s probably a scam
This is how I think about monetisation. Your mileage may vary.
Sometimes readers email me to say that they don’t agree with me on everything…as if that’s possible. Hell, even I don’t agree with me on everything.
We’re looking for win-win outcomes here.
The basis of a fair deal is that both sides should benefit. Both the producer and the consumer should gain from any transaction. Both sides have enough information to choose and neither is forced or tricked.
This may sound obvious but there are plenty of products that don’t help the consumer. So many ways to make money fail the basic test of: “does this product deserve to exist?” and “does it make the world a better place?”.
Should this exist?
Whenever I’m online, I see endless adverts selling FX trading courses, drop-shipping and online casino betting. Do these products deserve to exist at all?
Then there are the products that do deserve to exist…but there’s too much of them already. Insurance for example. There’s a place for insurance but if you’re paying for it on a new mobile phone where the phone costs £250 and the annual premium is £150 then something has gone wrong.
People buy too much insurance. Who’s to blame? Well, product providers often sell expensive stuff that people don’t need. But the consumer is not always blameless.
Direct or indirect funding?
There are plenty of consumers who want everything for free. If you’re not prepared to pay for something directly, you end up paying for it indirectly…or it shrivels up and dies.
As we explored in Part 1, you can pay for content direct (let’s call this the Queen’s Gambit model) or you can fund it via advertising (the Love Island model). The funding model leads to very different outcomes in the quality of the output.
Show me the incentive and I will show you the outcome.Charlie Munger on the power of incentives
As consumers we can’t have it all ways. I’ve often heard the financial media complain about low deposit rates AND bank charges AND about banks closing down high street branches. But if you want the product / service to exist, then it has to get paid for.
How will you get paid?
If you’re a blogger, content creator or anyone with a side hustle, you need a clear idea of what you are trying to achieve. What change do you seek in the world? And how will you get paid?
You can get paid with praise and warm words. Or you can get paid via the sheer enjoyment of creating the content. Or you can get paid with money. Or some combination thereof.
But content creators have to get paid or the whole enterprise is doomed. Creating original content is hard work and if the creator does not get paid in some form they will give up.
No incentive => no content. This is why there are so many corpses in The Finance Blogger Graveyard.
If you want to support bloggers / content creators, one of the best things you can do (short of paying them direct) is pay it forward and tell your friends.
It’s OK to make money
If you are playing the financial independence game, you are an investor and a mini-capitalist.
It’s hilarious when trolls criticise a blogger for attempting to monetise their site. Is there anything more entitled than someone that expects to get everything for free?
Does the product / service fit with your ethos?
The question is whether the monetisation is honest, ethical and transparent. And does it fit with your message?
Some readers will read this blog and then want more help. This is what The Escape Manual was designed for.
But if I start offering Escape Artist snowglobes, fridge magnets and keyrings, well then you’d be entitled to question my motives.
If I just wanted to make money quickly, I’d have the obligatory “How To Start Your Own Blog” article with an affiliate link for a web hosting company…even though anyone can start their own blog for free on WordPress.com. Go figure.
People sometimes ask me why I don’t push peer-to-peer lending links. It’s because I worked in corporate finance and restructuring and saw what happens to sub-prime loan portfolios during recessions. It wasn’t pretty.
I do include affiliate links on the books that I recommend. Sometimes people suggest that I’m getting rich off those. Rrrright. I make about £150 a year from book links. There are kids stitching trainers in Bangladesh who would laugh at The Escape Artist’s effective hourly wage rate.
Give before you take
You have to give to your community before you take.
Too many people try to shortcut this. They bang up a couple of listicles eg “5 EASY HACKS TO FINANCIAL INDEPENDENCE” or “TEN BEST WAYS TO MAKE £££ ONLINE” and then the pop-up email sign up form assaults you.
That’s not for me. I’ve been doing financial coaching for >6 years now. I’m in this for the long haul and I want the best for readers of this blog.
If I can put out good quality content that helps people for free, then why not do so?
But you still have to have boundaries: I can’t answer all requests for help and I charge for coaching.
My time is a scarce resource and unfortunately they’re not making any more of that. So if you want my time, energy and attention, there’s a cost.
Wealth managers often charge 2-2.5% of a portfolio per year. If you end up with a £1 million pound portfolio, you’re paying £25,000 a year.
What exactly do you get for that? As Jack Bogle said in relation to fund manager charges: you get what you don’t pay for.
Consider the cost of online platforms. % commissions often work out very expensive on larger pots. Flat fees are fairer and more accurately reflect the cost of delivering the service.
No one likes charges but I want clarity. I prefer to pay flat fee £ charges rather than % commissions.
The Advice Gap
The one thing that everyone agrees on in the financial services industry is that there is a huge advice gap.
It’s easy to blame (some) financial advisers. And, to be fair, some of them have given us plenty of reasons not to trust them.
But one of the main reasons for the advice gap is that many consumers are not prepared to pay for advice…whatever the charging structure. And whilst that remains true, the Advice Gap will never get closed.
DIY or get help?
You can try to do everything yourself without any help, but the truth is that most people do a bad job of managing money on their own. Better to pay for help than panic sell in a crash…or, worse, never get started.
Price is what you pay, value is what you get and the two can be very different. It makes no sense to be penny-wise and pound foolish.
I don’t give regulated financial advice and I don’t recommend or sell financial products or services.
I offer something different: financial education and coaching. I’m in the business of teaching people to fish for themselves…not selling them fish. And I charge fixed fees that are 100% transparent.
Where I ended up
I believe in equality of opportunity and social mobility. This is why this blog is free. It’s my contribution to helping other people.
It’s also free of adverts as I think it would clash with the core ethos of the site. Plus most adverts are annoying and make the user experience worse.
If you want more help and financial coaching, you can subscribe to The Escape Manual…or not…I respect people’s right to make their own choices.
I’m not saying that my way is the only way. There’s lots of room for different models.
But that is how I think about monetisation.
The Escape Manual is explained * here *