How To Make Money Online - The 3 Levels

when I was 12 years old I had this dream of making money on the internet now 13 years later and with a ton of failures and experience under my belt I make over 3 times as much money from the internet on the side as I do in my full-time job as a doctor in the NHS the UK's National Health Service this is the video I wish I would have had when I first got started hey friends welcome back to the channel if you new here my name is Ali and on this channel we explore the various principles strategies and tools to help us live happier more productive lives and we're talking about money in this video because firstly more people should do it and secondly because money is such a massive source of stress in most of our lives we often feel like we don't have enough of it and most of us trade more than 80 thousand hours of our lives a huge chunk of our short time on this earth to go to work so we can make money which we need to live but being able to make money online outside of our day jobs is pretty cool it means that if we're lucky enough to be doing a job that we love then happy days we've got some spare cash to go on holiday with but if maybe we're not entirely happy with working 40 to 80 hours a week then we've got the option of going part-time or taking a job that pays less but that we enjoy more or even to stop working altogether if that's what we want now obviously this isn't an overnight thing it takes a lot of time and effort and luck to get to the point where we can quit our jobs and stick it to the man but to be honest I don't think anyone watching this with say no to having an extra few hundred dollars a month kicking around and the process of getting there isn't as mysterious as it can sometimes feel so let's break it down basically there's only three ways three legit ways of making money online but before we go there we need to talk about what money actually is and there's a poem from the early 1900's that goes as follows money is a matter of functions for a medium a measure a standard a store and so putting this all together at its core money is just a medium for exchanging value like we all use money to buy things that we find valuable and so if we want to make money or make money online we need to be providing some kind of value that someone else is willing to pay for so there's basically three forms of value that people will pay for over the Internet and these are are three levels of making money online and that is level one services level two products and level three attention I've been doing variants of all three over the last 13 years like I started off selling services as a web and graphic designer I then moved towards selling product so products for med school applicants and online question banks and now it's mostly through the attention that I've got on platforms like YouTube that I can leverage to superpower the sale of services and products and those are sort of the three levels of making money online level one make money online by selling your services this one's probably the easiest way of making money online it's the one I've recommend to everyone to begin with and it was how I got my start there's only two things we need to do firstly we need to develop a skill that people are willing to pay for and secondly we need to find people who are willing to pay for that skill step one develop a skill that others are willing to pay for if you're thinking that I don't have any valuable skills that's okay you've got the internet and you can learn when I was 12 I decided I wanted to be super cool and therefore learn how to code through using Google and finding a ton of free resources online I taught myself HTML and CSS which are the basic and a markup languages of websites and then because I wanted to make a videogame for my nerd friends I decide to teach myself PHP which is a server-side programming language and I did that in 2006 with just free information on the Internet way back when all of these online courses and stuff were a thing so you can pretty much learn anything online for free these days there's hundreds of ways you can learn how to code online I'd recommend starting with the basics of HTML and CSS by following random YouTube tutorials or by paying for something like code school or code Academy and then trying to build your own personal website and if you want to learn proper coding I'd recommend the introduction to Python course over it brilliant who are sponsoring this video but I'll tell you more about them later if you're not into coding there are literally hundreds of services you can offer online like if you just look on the websites Fiverr or upwork and browse their categories there are literally hundreds if not thousands of different things that people will pay you for some of them are related to doing stuff on the computer like coding and websites and graphic design and illustration and stuff but there's no other things like writing and copywriting and data entry and being a personal assistant and admin service isn't and just there's just like this whole world of stuff that you can do on the internet wherever you are in the world pretty much as long as you have a reasonable internet connection another easy ish one to learn is video editing if you want you can check out my skill share class on how to edit videos in Final Cut and after working through that you'll be pretty good like not having a monetizable skill is not an excuse anymore at all if you want to actually make money online because you can literally teach yourself anything over the internet and then you can sell that skill to other a step to find people who will pay you money for that skill or service now there's two sorts of people who will pay you for your services essentially there's a people in real life or secondly people in the internet I got started with people in real life I learned how to make websites when I was twelve thirteen and then I sent an email to like my eight email contact and told all of my friends that I was gonna be designing websites and I made this really terrible looking banner thing to advertise my services I had my home phone number on it at the time don't worry it's not my home phone number anymore we've moved houses many times since then but I actually found that one of my friends dad's on to the web site built and so my first web site that I made was there's a janky looking HTML CSS thingy that I made for my mates dad and he paid me thirty pounds for it so that was pretty solid alternatively and a much more viable long-term solution is that you can find people to pay you for your services over the Internet now I've got my start on a website called get a coder com where you know people would post projects saying they need a web designer or a developer to do these various things and I would bid on those projects and say ah I'll do it for ten dollars I'll do it for five dollars I would basically undercut everyone else in the market because I was like twelve thirteen and for me five or ten dollars was like oh my god I'm rich these days this place is like upwork and fiber that seemed to be the biggest ones and you can just kind of browse through all the different things people are looking for and then you can sell your services there you can say ah do it for a fiver I'll do it for ten I'll do it for twenty hundred fifty and over time as you get better at the thing you can start charging more and more especially as you start getting decent reviews and you start building up your own portfolio of whatever the thing is that you're doing and so I did this whole selling services thing for a few years but I realized pretty quickly that ultimately what I was doing is I was trading my time for money and that's ultimately not very scalable model because obviously my time our time is is limited and so if you really want to make money online then we want to get to level to level to make money online by selling products when you start selling products like physical or digital goods then your ability to make money online magnifies a lot because it suddenly becomes scalable like it's not directly tied to the amount of time you're putting it now if we want we could sell pretty much anything online but the ideal thing that we want to sell is something that has a one-time cost of time or money to make but then we can sell infinite copies of and we want the cost of reproduction to be zero and ideally we want the cost of distribution to be zero ideally we want the ongoing time commitment to be as low as possible so we can make the thing once and then we can sell it like a million times without having to spend much more time so the ideal product category then is digital goods or digital product now a digital good is anything from a website to an app or an online course or an e-book all of these things have a one-time cost of production a zero cost of reproduction zero cost of distribution and hopefully a zero cost of maintenance as well all right so we can either sell digital or physical stuff but obviously I think digital is it's better but there's basically two ways of selling it like we can either sell other people's stuff or we can sell our own stuff level two basic is selling other people's products now there's various different ways of doing this but just to simplify for clarity the two that we're going to talk about today are firstly drop shipping and secondly affiliate marketing let's start with drop shipping the basic idea is that we could make a pretty-looking website that sells nice-looking watches let's say for a hundred pounds apiece when a customer orders that watch we then buy it from a third party that's actually selling the watch and we arranged them to ship it to the customer so we're making fifty pounds without ever handling the watch at all now I've never really done this myself and I would recommend you probably stay away from it as well just because I've seen so many kind of online courses that seem to seem a little bit scammy about how you can make money online by drop shipping I also don't like the fact that drop shipping January focuses on physical goods and as we've talked about physical goods are just not as fun to sell as digital stuff because you actually have to pay for it you have to arrange the logistics and the shipping is just a massive bollock whereas digital products really are the way to go the second way of selling other people's products is with affiliate marketing affiliate marketing is when you're selling someone else's stuff but you're getting a commission from each sale like there's a really good review website called wirecutter and they do reviews about the best electronics in different categories and they have Amazon affiliate links so when someone clicks on that link and buys from Amazon then wire car to the website will make I don't know 1% 2% 3% Commission on that sale and so if you get enough visitors buying enough things you can make a load of money from affiliate marketing or you can do what I do which is to have affiliate partnerships with certain products like there is the paper like screen protector who I've been evangelizing for the last two years because I genuinely love the product and so if someone buys a paper like screen protector for the iPad pro using my link I will get some percentage Commission on that sale and if enough doing that that can make a reasonable amount of money so that is how affiliate marketing works you're selling someone else's stuff but you're getting a percentage Commission on the sale if you're interested in learning more about this there's a dude called Pat Flynn who runs the website and a podcast called smart passive income and they've got a load of materials that teach you the ins and outs of how to do affiliate marketing properly but selling someone else's stuff is absolutely fine but really we want to be getting to the Holy Grail and Holy Grail is level to expert level to expert is when we're selling our own products if we're selling our own stuff then we control everything from the aesthetics to the price to the distribution to the logistics that are the entire customer experience we are controlling ourselves so here there's kind of three broad categories of things that you could sell you could try selling physical products Peter McKinnon has done very well selling his camera bag Pat Flynn has done really well selling this switch pod which is a tripod for vloggers it's quite hard selling a physical product it's a lot of work you have to manufacture it distribute like logistics it costs a load of money I wouldn't recommend doing the physical product thing it's something I'm kind of looking into myself when it comes to selling merch but it's it's kind of hard and I think personally more trouble than it's probably worth secondly you could make a website or an app and you could sell access to that like for example let's say you make an iOS game or something and people buy it from the app store you're making money off of that or let's say you're making a website that's offering some kind of service and you're charging people a subscription fee or something for access to that service this is something that my brother and I did in 2015 we both know how to code and so in the summer of 2015 we built an online question bank for students in the UK applying to medical school taking these certain exams and so we charge people for access to the question back and through the platform they could do the questions they can mark their answers right they could see solutions but the problem with this whole I want to build a website and make money off that is that it's really quite hard to do in general you need to know how to code usually want to find some co-founders you can go down the start-up route this this kind of so much stuff out there for essentially building an app that makes money but if you're a complete beginner to make money online the very first thing you should do probably shouldn't be to try and get rich off making an ass it's really very hard and it's kind of a more advanced way of doing things point number three is I think a much easier way that anyone can make money online and that is by selling info products so buy info products I mean things like ebooks or digital downloads or online courses because if you can teach something and you can teach it in a compelling an interesting way online increasingly it's becoming easier and easier to find people who are willing to pay you for that online education you know more and more people are turning to online education so if you can teach something well you can make money off of that so with me for example I've got a series of online courses aimed at medical school applicants that teach them how to do well in these exams and medical interviews so that makes some money every week every month by selling online without me having to put any more effort in I've also got online courses over on Skillshare like of course on how to edit videos and a class on how to study for your exams and again those generate passive income ie I've put the effort into creating the course once and then it's just selling itself repeatedly without me having to do much else and to be honest it's reasonably straightforward to develop the sort of expertise that then means you can teach the thing and I think a lot of us really struggle with this because we think oh I'm not an expert therefore I can't teach online but you can because if you're a beginner you can teach other beginners right now if you're thinking I want to make money online you could very easily sign up to a free trial of skill show and then you could watch my course and how to edit videos in Final Cut Pro and then you could make your own course for complete beginners on how to edit videos on Final Cut Pro like it's it's so easy you could literally learn anything online and then you can make an online class teaching that thing to other people and if you want you can set it through your own website or if you want you can scout it through udemy course or a skill shed there's all sorts of different platforms that you can sell your expertise on and as long as it's good obviously has to be good because you know we make money online by providing value if it's valuable then people will buy it and you'll just kind of make money and a pretty kind of magical system really but as you might be thinking you know we can make all of the digital products that we want the physical products that online courses whatever the problem is we still need to find people who are willing to part with their hard-earned cash to buy the thing that we're trying to sell them so how do we do that and that's where level 3 comes in level 3 is when we supercharge our money making powers with attention now there are all ways that you can get your product in front of people whatever it is you could try running Facebook or Instagram ads you can go around knocking on doors in your neighborhood you can send a cold emails to mailing list whatever you want but really the easiest way of selling anything online is by using attention and that's the attention of people who know like and trust you and by far the easiest way of getting people to know like and trust you is by providing valuable content on the Internet completely free of charge for example if you wanted to write now you could start a blog about productivity tips and every week you could write one or two blog posts sharing your favorite productivity from books from academic papers from articles from podcasts from your own life and over time if you do this consistently and provide value because again this is an exchange of value we all care about value there's no snake oil you can sell here there is no shortcut to making money online you're providing value for free across the internet over a long period of time and then in three years time you build up a mailing list of 20,000 people and now when you want to run your own productivity course you've got this mailing list of 20,000 people who know like and trust you from the value that you've given them for free over an extended period of time and now they're far more likely to buy your thing you've got an audience of people that you can sell to as a guy called Gary Vaynerchuk who you should definitely be following across every single social platform if you care about making money online and you haven't heard of him you know Gary Vaynerchuk loads of links in him in the video description he's got a book called Jab Jab Jab right hook and the model for that is that a jab it's like kind of a boxing analogy I think a jab is when you give someone content and valuable content for free and a right hook is when you ask them for something or try and sell them something and he says and interviews that actually he wished he could have called the book jab dab dab dab dab dab dab like 25 times and then right hook but obviously you can't do that because it's a title of a book because that's the ratio that free content versus paid content needs to be you need to be providing 25 pieces of valuable free content for every right hook that you're launching every time you're asking someone to buy stuff and really this is the exact playbook would word for word that I've been following with this YouTube channel since 2017 I've been following Gary Vaynerchuk for years I've been following people like Tim Ferriss who kind of modeled this perfectly over time by just flooding the market with a ton of really valuable free content not really worrying about trying to charge people for things and then later on you know once you've got this audience of people who know like and trust you hopefully you know through this YouTube channel I've managed to do that now for me if I want to sell an online course if I want to put a class on Skillshare I automatically have this audience of six hundred thousand people who are willing to hear my message and will be far more likely to buy the thing from me and so if you can build up that personal brand that professional reputation this this audience of people that know like and trust you at that point you are supercharging your abilities to make money online because now you can sell goods now you can sell services and in fact you can even sell attention directly by doing sponsorships and stuff like that like I do to an audience of people that cares there's just that that's it like completely an utterly life-changing when you've got this huge audience that you can leverage to make money online and in fact the audience doesn't even need to be that that big like there's a load of podcasts you know my friend Noah Kagan runs one about marketing and he shows that even with a very small amount of people if you've got the right audience following you you could easily sell a product there's a guy called Kevin Kelly who wrote a famous essay ages ago called 1,000 true fans where if you can just get a thousand people following you on the internet and those are your true fans those are the people that let's say you're a musician they're the people who will you know go to every show they'll buy the special edition of your album if you can get a thousand people who like you enough to potentially pay you $100 a year for the stuff that you make you're making $100,000 a year you've got a full time living from a thousand true fans and so the audience doesn't need to be that big but the way of building any kind of audience as Gary Vaynerchuk and Tim Ferriss say is to just produce a ton of really valuable free content over a long period of time but only if I give away content for free people won't buy my paint stuff that's not how it works people will buy your paid stuff but only if you give them content for free you don't build an audience by selling them stuff you build an audience by giving them a load of stuff for free and then you can sell to them three years down the line and so for me right now I'm at the point with passive income where I make so much more money on the side through these online activities through selling goods services and attention online then I do in my day job of working 60 hours a week of being a doctor in the UK now honestly all of this started thirteen years ago when I decided that I wanted to be a super nerd and learn how to code and so if you're watching this right now and you're thinking that you want to maybe stop this journey one thing that I'd really recommend is that you learn how to code yes in this day and age you don't absolutely have to learn how to code but it's it's the sort of thing that really helps if you're trying to sell any kind of and a software product online and honestly the best place that I'd recommend you learning how to code is firstly teach yourself HTML and CSS using random free tutorials on YouTube you can learn HTML in a single day you can learn CSS in two days and then you can try building your own personal website then once you've done that you should definitely go over to brilliant for their online course on learning Python and fundamentals of computer science brilliant or Connelly sponsoring this video they're a fantastic online platform for math science and computer science courses and their introduction to Python and also their kind of advanced Python courses are really good at learning Python which is the world's most popular programming language and with Python you can do anything from making an app to making a website to making even a question Bank that you know gives people access to medical questions which is sort of the things that me and my brother did so if that sounds good you should head over to brilliant or forward slash alley and the first 200 people to click on that link will get 20% of the annual premium subscription but yeah those are the three levels of making money online if you're interested in learning more I put together a playlist for you right here that has a lot of my other videos about how to make money online to watch those read the books I recommend and then I promise you'll start on your path to you know getting rich by making money on the internet so thanks for watching and see in the next video you

Channel: Ali Abdaal

Views: 979,400

Rating: 4.9527783 out of 5

Keywords: Ali Abdaal, Ali abdal, how to make money online, dropshipping, how to make money on the internet, making money online, business advice, entrepreneurship, how to become an entrepreneur, business inspiration, online business, starting an online business, how to start an online business, how to make money from home, income streams online, how to build income streams, how to get rich, how to make a lot of money, how to make money, entrepreneur, online entrepreneur, doctor vlog

Id: TH0nNn6SmXw

Length: 18min 26sec (1106 seconds)

Published: Tue May 19 2020