Bull vs bear describes investment trends that have the power to impact the global financial market. It’s a phrase you’ve probably heard thrown around or referenced before…but what does it mean? And how does it affect you and your investments?
Let’s take a look at bull vs bear markets, examples of each, and the impact they have on your financial strategy, to set the record straight.
The difference between bull vs bear markets
In a nutshell:
Bull market = Market is up
Bear market = Market is down
That’s it.
.
.
.
Oh, you wanted more? Great! Let’s take a dive into each market and see how you can recognize one when it happens.
Bull market: Market is up
You’ve probably seen this statue before.
This is the famous Wall Street Bull — and its placement within the beating heart of America’s financial institution is no mistake.
“Bull market” is a phrase used to describe an economic environment that is growing and optimistic. And though there’s no set way to identify a bull market, it typically means that asset classes of all types — such as stocks, bonds, real estate — rise for an extended period of time.
That’s why you’ll hear about investors who are confident in the market being described as “bullish.”
Other key indicators of a bull market:
High gross domestic product (GDP). If a country’s GDP is high that means consumer spending is also high — a common indicator of a flourishing economy.
Rising stock prices. More people are confident that the market will continue to go up, so most major indices will also rise.
More “long” stock trading. Since the financial climate is hopeful, investors are more hungry to buy shares during a bull market and hold onto them, confident they will continue to rise. This is known as long stock trading.
Low unemployment rates. Growth in businesses means growth in the workforce. More people will have jobs in a bull market.
When a bull market occurs, it’s typically here for a long time. Morningstar conducted a study that took a look at market trends from 1926 to 2017 and discovered that the average bull market lasted NINE years.
Post-WWII. The years during and following WWII (from the 1940s through the 1950s) were exemplary of a bull market as the U.S. economy prospered when millions of soldiers returned home.
The 1980s-2000s. A long bull market occurred from the early-1980s up until the dot-com bubble bursting in the early-2000s. During this bull market there was an average market gain of nearly 600%.
Today. As of writing this in 2017, the United States is currently going through a bull market. Jobs are growing, the average returns on investments are high, and we’re starting to bounce back from the effects of the housing market crash and subsequent bear market that occurred in 2008 (more on that in a bit).
That’s a bull market in a nutshell. Just like light is to dark, though, the bull market can only exist with its opposite: the bear market.
Bear market: Market is down
If the bull market describes growth and stability, the bear market represents the inverse: pessimism, loss on investments, and a usually regarded “bad” economy.
I spent way too much time on this meme.
A bear market describes an economic trend in which there is pessimism about the market. Generally, there’s stagnation or a downward trend, people’s confidence in the economy is low, and more people are selling stock than buying. A bear market is also a good indicator of a recession — a long-term period of negative growth.
As such, investors who are pessimistic about market trends are typically described as being “bearish.”
Other key indicators of a bear market:
Loss of jobs. Low employment rates are typically a sign of a bear market. As companies lose business, this results in layoffs and the loss of work.
Market prices are falling. Fewer people are willing to buy stock. As a result, prices of shares go down and the market falters.
More “short” stock trading. This is when investors sell shares they don’t own in order to buy the shares later at a lower price. It’s one way to benefit from a down market. A very bearish move.
Though a bear market seems bad, it doesn’t typically last long. Remember that study from Morningstar? It shows that the average bear market lasts only 1.4 years, while the average cumulative loss from a bear market is 41%.
Also there are several ways investors can benefit from a bear market. One example: would you rather be buying a house when prices are going up or down?
Another: Would you rather invest in the market at its bottom or at its peak?
Notable bear market examples
The Great Depression. The stock market crash of 1929 kicked off the start of the most famous bear market period: The Great Depression. It didn’t end for years afterward, and during that time millions of Americans lost their jobs, homes, and well-being. It wasn’t just America either. The entire world felt the impacts of America’s bear market.
The dot-com burst. The years following the dot-com burst of the early-2000s saw a massive dip in the stock market as well as the shuttering of countless tech companies. Household wealth also took a hit of over $6 trillion leading to a recession, according to FiveThirtyEight.
The housing market crash. Though nearly a decade has passed, the housing market crash of 2008 is still a fresh wound for many people. In its wake, millions of workers lost their jobs, homeowners lost their houses, and consumer spending fell by 8%. Though we’re in a bull market now, we’re still feeling the effects of the crash and its subsequent bear market today.
Bear markets can be scary, but they don’t tend to last very long — though that’s admittedly cold comfort for investors going through one.
The origins of bull vs bear market
Now you know the difference between a bull vs bear market! Congrats! But why the heck are they called that?
Traditionally, it’s believed that the term comes from the way each animal attacks.
A bull, with its squat legs and sharp horns, attacks by swinging its head upwards, like the upward swing of the economy in bull market years. Bulls are also typically lively and ferocious animals, not unlike the optimistic investor.
A bear on the other hand will swat downwards with its paw when it attacks, like the downward trend of a recession. That, coupled with the fact that bears can also be found hibernating for long periods of time, makes it no surprise that “bear” will be used to describe slow market periods.
Others believe that their connection to the stock market can be traced back to the Elizabethan period and ancient Rome. During this time, the two animals were the center of bloody bear- and bull-baiting shows, where the two animals would fight for people’s entertainment. Over time, the association stuck and became associated with the financial sphere.
What do bull vs bear markets mean for YOU?
Simply by doing your research, and looking up terms like “bull vs bear” or “portfolio rebalancing,” you’re already ahead of 99.99% of people out there when it comes to planning for your financial future.
That’s why we want to offer you The Ultimate Guide to Personal Finance.
In it, you’ll learn how to:
Master your 401k: Take advantage of free money offered to you by your company…and get rich while doing it.
Manage Roth IRAs: Start saving for retirement in a worthwhile long-term investment account.
Spend the money you have — guilt-free: By leveraging the systems in this guide, you’ll learn exactly how you’ll be able to save money to spend without the guilt.
Enter your info below and get on your way to living a Rich Life today.
And even if you do everything right (like pay your credit card bills on time, keep your credit score high … ) you STILL might run into a situation where your personal finance structure is compromised by your credit card.
One of the most common examples: Erroneous credit card charges. They’re a credit card owner’s worst nightmare. A few examples:
Your gym accidentally charged you for an extra month.
After canceling a flight, your airline still charged you a luggage fee.
Discovering that somebody swiped your credit card information and went on a week-long shoe shopping spree.
Luckily, you don’t have to put up with ANY of that because I have the perfect system to help you dispute any erroneous charges that show up on your statement.
How to dispute credit card charges with your own personal army
A while back, I decided to cancel my mobile plan with a certain nameless cell phone company. When I canceled though, they told me my account had a $160 charge.
“For what?” I asked. Wait for it…
“An early cancellation fee.”
An exclusive GIF of my reaction:
First off, I knew I had already negotiated out of an early cancellation fee a long time before that call. (Some cell phone companies make a lot of money from pulling shady moves like this, hoping customers get frustrated, give up, and just pay.)
Secondly, ever since the same cell phone company tried ripping me off a few years before, I started keeping records of every single phone conversation I’d had with them (more on that later). That came in handy when the customer service rep — though very polite — insisted she couldn’t really do anything to erase the charge.
OH REALLY?? To that, I pulled out the notes I had taken the previous year and politely read them aloud to her.
As soon as I read them, a miraculous thing happened: She suddenly had the ability to waive the fee. Within two minutes, my account was supposedly cleared and I was off the phone.
Wow. Amazing! All I had to do was meticulously detail our transactions the year before and explain to the company how they screwed up!
However, that’s not the end of the story. Even though they told me that they wouldn’t charge me, THEY STILL DID IT ANYWAY.
By this point, I was so fed up, I decided to call in the big guns (i.e. my credit card company).
Many people don’t know this, but credit cards offer excellent consumer protection. This is one reason I encourage everyone to make big purchases on their credit card.
So I called my credit card company and told them I wanted to dispute a charge. They said, “Sure, what’s your address and what’s the amount?” When I told them about my experience with the cell phone company, they instantly gave me a temporary credit for the amount and told me to mail in a form with my complaint, which I did.
Two weeks later, the complaint was totally resolved in my favor.
Why am I telling you this? Because you need to know that your credit card company is on your side when it comes to disputes. In fact, the credit card company fights the merchant for you.
Follow these steps and you can leverage your personal credit card army to help you fight erroneous charges.
Step 1: Dispute the charge at the source
Honestly, this step is optional because you can get your money back without having to interact with the merchant. However, in the spirit of giving you all of your options, I want to show you how you can get your money back from the source.
After all, you might have a relationship with the merchant and you don’t want to ruin it due to an error on their part. Plus, if the erroneous charge is due to something like merchant or mathematical error, most businesses would be happy to rectify it for you to keep you as a customer.
(I say most because there are the exceptions to this, as evidenced by my awful experience with my former cell phone provider.)
According to the Federal Trade Commission (FTC), you have “60 days after the first bill with the error was mailed to you” to notify your credit card company of the charge. So if you want to see if you can straighten out the issue with the merchant, you need to contact them AS SOON AS POSSIBLE when you see the charge on your statement.
Here’s an email script you can use to bring up the charges with them:
SUBJ: Erroneous charge on statement
Greetings,
I went over my credit card statement today and discovered that I have been charged an extra month for my gym membership.
Could you refund my money back as soon as possible? If not, I’ll be disputing these charges with my credit card company.
I look forward to this situation being fixed.
Best,
Ramit
Notice something about this email? It leverages your credit card company as a threat. Businesses HATE fighting credit card companies in disputes. So you’ll often be able to get your money back based on that alone.
Note: The FTC also provides a handy sample email you can use to file a complaint with your merchant. No matter which you choose, I suggest you include the threat of disputing with your credit card company into the message.
After you’ve sent the email, expect the merchant to get back to you soon. If they haven’t contacted and given you a full refund within a week of sending the email, move on to the next step. It’s not worth waiting for them if they’re going to treat you like that.
After all, disputing with the merchant isn’t always going to work — especially in cases where:
There is credit card fraud.
The merchant isn’t responding to you.
You’re dealing with a low-class, no-good, scammy cell phone company that wants to renege on an agreement you already had YEARS before—
…sorry about that. I get emotional about my finances. If you can’t deal with the merchant directly, move on to step two:
Step 2: Gather all relevant information to dispute the credit card charge
Aside from your credit card company, your most powerful ally in the fight against the merchant is information.
So before you even think of calling your credit card company, gather any and all information you might have that is related to the charge you want to dispute.
This includes things like:
Receipts
Bank statements
Credit card statements
Emails
Phone calls
If you want to take your game to the next level, I’d like to suggest a system that can be your best weapon against businesses trying to take advantage of you. Remember when I mentioned that I kept records of every single conversation I’d had with my phone company? You can do the same with any business you patronize.
Things can get really heated when you’re disputing charges. Instead of getting mad, open a spreadsheet that details the last time you called, whom you spoke with, and what was resolved.
You wouldn’t believe how powerful it is to refer back to the last time you called and cite a rep’s name, date, and call notes. Most businesses will fold like a lawn chair if they know you’re not here to mess around.
This information is going to be vital in the next step of the process:
Step 3: Contact your credit card company
Now it’s time to get down to brass tacks and call your credit card company. Here is a list of phone numbers from the major credit card issuers you can use to dispute the charge:
Visa: 1-800-847-2911
American Express: 1-800-528-4800
MasterCard: 1-800-307-7309
Discover: 1-801-902-3100
Capital One: 1-800-227-4825
Chase: 1-800-432-3117
Most of these companies will send you to an automated voice menu when you call. There you’ll have the option to dispute a charge.
You’ll then be put into contact with a representative. Simply tell them, “I want to dispute a charge on my credit card statement,” and describe the situation using the information you gathered in step two.
Your credit card company will begin investigating the matter and issue you temporary credit until their case is resolved.
Once they’ve (hopefully) found that you were in the right, they’ll issue something called a chargeback that will refund you the credit and charge the merchant what you originally paid.
If you want to email your credit card company, here’s a great script you can use to contact them straight from the FTC.
Dear Sir or Madam:
I am writing to dispute a billing error in the amount of [ $______] on my account. The amount is inaccurate because [describe the problem]. I am requesting that the error be corrected, that any finance and other charges related to the disputed amount be credited as well, and that I receive an accurate statement.
Enclosed are copies of [use this sentence to describe any information you are enclosing, like sales slips or payment records] supporting my position. Please investigate this matter and correct the billing error as soon as possible.
Sincerely,
[Your name]
REMEMBER: You need to do this within 60 days of the charge appearing on your bill. Once they receive the complaint, they’re legally required to respond to you within 30 days. The process will be roughly the same as when you talk to them on the phone — they’ll open up an investigation, issue you temporary credit, and either facilitate a chargeback or deny your complaint.
If your card was stolen or you find evidence of fraud on your card statement, your credit card company will cancel your credit card and issue you a new one as well as credit for any fraudulent charges.
No matter what happens…congrats! You now know how to dispute your credit card charges.
Bonus: Make your credit cards work for YOU
You can now get a full chapter of my New York Times bestselling book, I Will Teach You to be Rich, on optimizing your credit cards for free.
It’ll help you tap into even more perks, max out your rewards, and beat the credit card companies at their own game.
I want you to have the tools and word-for-word scripts to fight back against the huge credit card companies. To download it free now, enter your name and email below.
Our product team has been working on something so interesting, I asked them to share some of the insights we’ve discovered.
Alistair Clark, one of our product developers, has been speaking with people who have already done the basics of personal finance: These people have already set up automated savings accounts and invested. Many have accumulated considerable amounts of money in the hundreds of thousands (or millions) of dollars.
So what’s next? What do you do when you’ve already done the basics of personal finance?
Alistair got the kind of behind-the-scenes access that few of us have. He spoke to wealthy people about their hopes, fears, and dreams around money — and discovered that once you’re at a more advanced level, your concerns change. Your goals change. And whether you intended to or not, your lifestyle changes.
Let’s see what he found.
Alistair, take it away…
_
Every week, Ramit gets thousands of emails with questions about personal finance.
99% of the time, his answer is the same: “Go read my book, I Will Teach You to be Rich.”
But 1% of the time, he gets a really interesting email that doesn’t have a simple answer, and he’ll forward it over to the IWT product team to see if we can help.
For example, check out this email a reader sent to Ramit after reading the IWT book:
It’s too beginner for me. I finished because of the entertaining styleand I like to vet books before recommending them. My stage is this:
Zero debt… pay credit cards to zero, twice a month. Paid off my mortgage 25 years early ($230k). Haven’t paid a car loan in over 5 years. And my twins are now in school (so no more $1,500/mo child care any longer).
I’m self-made with a video production/photography business + my wife is a psychologist with the VA, so we have a decent income.
We each have contributed $18k into our 401ks (mine is a solo-k) for years.
We have maxed our ROTHs for about 7 years each (more on this later).
We are very frugal (our two spending items are 1. quality food (groceries) and 2. travel).
I’m about to turn 38, wife is 34.
We have $750k-$775k invested/saved and adding our house puts us over a million.
WHAT NOW!?!
At IWT, we love seeing emails like this. Here’s someone who actually took action, implemented our personal finance advice, and is now in a great place with their finances.
From the outside in, there’s absolutely nothing to worry about! And yet, we continue to get emails just like this from people worrying about their finances.
What’s going on here? Why do we worry about money even though we’re doing everything right?
The psychology of why we worry about money
In Ramit’s book, he outlines what we call “The Ladder of Personal Finance.” People loved having a clear roadmap telling them exactly what to do next.
“The Ladder of Personal Finance” from Ramit’s book, I Will Teach You To Be Rich
But eventually, you get to the end and there are no more rungs on the ladder. You’ve checked all the boxes. All you’re left with is that same empty feeling we had after finishing our favorite video game that we spent hours trying to master. Except… you don’t have another game to play. With your finances, it can seem like the only thing left to do is sit and wait for the next 30 or 40 years until you retire.
I don’t know about you, but that sounds boring as hell.
I’m impatient. I want to be optimizing, tweaking, and doing something to keep getting better every single day. If someone came to me tomorrow and said, “OK Alistair, you’ve checked all the boxes for your business. Now you just have to put it on autopilot and go sit on a beach for the next 30 years,” I’d tell them they were crazy.
Humans are problem-solving machines. We aren’t good at sitting on our hands and being patient. For example, just look at this video of a woman in a self-driving car for the first time. Does she look relaxed? No! She is freaking out and worrying because she has nothing to do.
If money is supposed to buy us peace of mind, then why do some of us act just like this woman in the self-driving car? And what is the “last mile” that can get us to be more zen about our finances?
3 things we noticed from people who don’t worry about money
As I mentioned above, I’m on the product team here at IWT. We’re in the course-making business, which means solving some gnarly problems for our readers. And this is the type of big question we LOVE to tackle to see if we can find interesting, counterintuitive solutions.
Over the past month, we’ve been digging into the tactics and mindsets of the wealthy to find out what they do once they’ve “checked all the boxes” and mastered the basics of personal finance.
How do they get to that enviable position where they never have to worry about money again? What do these carefree people know that we don’t?
Today I’d like to share three examples:
1. They are prepared for everything
Earlier this year, the New Yorker ran a fascinating article titled “Doomsday Prep for the Super-Rich”. In the piece they described how some of the smartest, most successful people from Silicon Valley and Wall Street are preparing for the apocalypse (yes, you read that correctly). They are buying remote property, building self-sustaining bunkers, and sometimes even stockpiling ammunition to prepare for the eventual breakdown of civilization.
When asked the simple question of “Why?” here’s what Yishan Wong, the former CEO of Reddit, told the New Yorker:
Most people just assume improbable events don’t happen, but technical people tend to view risk very mathematically … The tech preppers do not necessarily think a collapse is likely. They consider it a remote event, but one with a very severe downside, so, given how much money they have, spending a fraction of their net worth to hedge against this … is a logical thing to do.
Maybe you’re not ready to drop a few million on a bunker in rural Kansas, but that doesn’t mean you can’t be prepared for the future.
In speaking to our students who worry about money, I’ve noticed that a lot of people are afraid of unpredictable things that might happen in their future. Some people refer to these as “the things you don’t know that you don’t know” or “unknown unknowns.” Here’s how one student described his fear:
What worries me isn’t job loss. What worries me is the million other things that could pop up. What’s hiding around the corner that I don’t know about?
This type of fear can be incredibly powerful, because your imagination runs wild with worst-case scenarios. It’s like when you are walking down the stairs into a pitch black basement of a rickety old house. It’s terrifying. Anything could be lurking in those shadows.
But there’s a simple solution: Turn on a light.
You can do the same thing with your finances. Instead of being afraid of “unknown unknowns,” you can shine a light on your financial future by learning from people ten years older than you who can tell you exactly what to expect.
Ever see a news story about a rock star or athlete going bankrupt and wonder, “How is it even possible to lose that much money?” ESPN’s documentary Broke investigated the phenomenon of very rich athletes going completely broke. The statistics are shocking:
According to a 2009 Sports Illustrated article, 60 percent of former NBA players are broke within five years of retirement. By the time they have been retired for two years, 78% of former NFL players have gone bankrupt or are under financial stress.
One of the primary causes of financial problems for these athletes was not extravagant spending. It was mostly due to bad investments, ranging from real estate to restaurants to car washes.
It’s an interesting cautionary tale because one of the most common questions I get from students who have “mastered the basics” of personal finance is “How do I make my investments grow faster?”
As your wealth grows, you’ll find the investing opportunities start to grow as well. Instead of just a “boring” target date fund, now you can buy real estate, invest in start-ups, and take sizable positions in individual stocks. At a certain level, the world of hedge funds and private equity start to open up as well. It’s tempting to throw your money at these exciting opportunities and promises of outsized returns and it’s easy to develop an obsession with growth and moving faster.
I find this fascinating, because the research I’ve done revealed that the most successful wealthy people have the opposite approach. Instead of asking “what can I gain?” their #1 question is “how can I avoid losing money?”
This is more a matter of mastering your own psychology than any new tactic or fancy asset allocation. There’s a reason at IWT we consistently recommend boring, simple investments like lazy portfolios and target date funds.
But we’ve also spent enough time studying the psychology of personal finance to know that being a 100% disciplined monk with your investments is near impossible. No matter how much you read about the merits of basic index investing and why stock picking never works, there’s still a little voice in your head saying, “Yeah, but what if I find the next Amazon stock? I’d be a millionaire in five years!”
Here’s what we recommend: instead of suppressing that voice in your head, embrace it. Take 5% of your portfolio and put it aside for whatever crazy idea you have for making your money grow faster. Invest in Bitcoin. Buy $5,000 in Tesla stock. Invest in your cousin’s car wash if you want.
Do whatever you want, because while you might lose that 5%, you can sleep well at night knowing 95% of your money is still safe and protected.
3. They don’t do it alone
There’s a great scene in Entourage where the agent Ari Gold is introducing the management team of actress and singer Mandy Moore.
(Heads up: You may want to put in headphones for that link, there’s some NSFW language in that clip.)
It’s kind of eye-opening as he goes down the line introducing this super-team of six people who are required to manage the career of just one person: manager, music agent, publicist, attorney, music manager, theatrical agent, etc.
It’s also possible to develop the same type of super-team to manage your finances and literally outsource your worry to someone else. Attorneys, accountants, life insurance specialists, financial planners, investment advisers, and even a psychologist or psychiatrist could all be part of your financial super-team.
You might be thinking, “Wait, what? I thought Ramit hated financial advisors. Doesn’t he spend an entire chapter in his book telling me NOT to hire a financial advisor. So what’s going on here?”
I asked Ramit about this incongruence, and he pointed out a really interesting and counterintuitive insight: Once you reach a certain point, the basic personal finance rules no longer apply.
Normal people with ordinary financial needs don’t require an advisor. That’s why we tell most people it’s not worth their time. But once you’ve conquered the basics, then the basic rules no longer apply.
Here are a few scenarios where it DOES make sense to pay an advisor:
When you have a lot of investable assets (~$1MM+) and have much more to lose if you make a mistake.
If you have complex situations (imagine having three kids, planning for college, and buying a house at the exact same time).
When you just want a second set of eyes to make sure you have everything done right and aren’t missing anything.
When you’re short on time and want to pay for convenience (e.g., you can hire a bookkeeper who you forward bills to and who pays them for you).
When you run your own business, an accountant is a no-brainer who can “cover your ass” and also look out for things you don’t know about.
Is hiring an advisor expensive? Yes, of course. But ask yourself, how much is constantly worrying about your finances costing you?
If you’re looking at getting help with your finances from a professional, then we recommend beginning your search at the National Association of Personal Finance Advisors (www.napfa.org). These advisors are fee-based (they usually have an hourly rate), not commission-based, meaning that they want to help you, not profit off their recommendations.
***
If you read I Will Teach You to be Rich, applied everything, and you’re now running into new, more advanced problems where there aren’t clear answers… it can feel weird to bring stuff like that up to friends. “Hi, do any of you know what to do after you max out your 401k and pay off your house? Thanks!”
But here at IWT, you’re with your fellow weirdos. It’s safe, we promise. In the comments tell us how you’ve “leveled up” and what you need help on next. We want to help.
So you want to learn about portfolio rebalancing? That’s awesome! Seriously, not a lot of people bother to do it or even take the time to learn what portfolio rebalancing means.
And it’s not just a meaningless financial buzz phrase. Portfolio rebalancing is one of the most important things you can do for your investment strategy.
That’s why I’m going to give you the lowdown on exactly what portfolio rebalancing is, how you can do it today, and also how you can set up your finances to never worry about it ever again.
What is portfolio rebalancing?
Imagine you’re a 25-year-old whose target portfolio is 90% stocks and 10% bonds.
But after a year, you’ve found that your investment in bonds has grown. Good job, you! So now they make up 20% of your overall portfolio:
Since you’re still young and have a higher risk tolerance, you’ll want to continue investing more in stocks. That’s why you should rebalance your portfolio to go back to your original plan.
In essence, rebalancing your portfolio is the process of modifying your asset allocation as the amount of money in each investment fluctuates with the constantly changing market.
It all boils down to one thing: Asset allocation. This is how much money you invest into certain “asset classes” in your portfolio, the major ones being:
Stocks and mutual funds (“equities”). When you own a company’s stock, you own part of that company. These are generally considered to be “riskier” because they can grow or shrink quickly. You can diversify that risk by owning mutual funds, which are essentially baskets of stocks.
Bonds. These are like IOUs that you get from banks. You’re lending them money in exchange for interest over a fixed amount of time. These are generally considered “safer” because they have a fixed (if modest) rate of return.
Side note: Sometimes I use the phrase “asset allocation” at cocktail parties to sound smart. The host, whose party I am crashing, usually looks at me, surprised, and asks me one question: “How did you get in here?” But is soon so charmed by my weirdness that I’m allowed to stay.
Aside from a phrase I use to alienate people, asset allocation is the single most important aspect of your investment strategy. A 1991 study discovered that 91.5% of the results from long-term portfolio performance came from how the investments were allocated. This means that asset allocation is CRUCIAL to how your portfolio performs.
So we know that asset allocation is very important…but how do we rebalance our portfolios in order to stay in line with our target goals? Two ways:
Manually — through buying and selling
Automatically — through lifecycle funds
Let’s break down each.
Manual portfolio rebalancing
Manually rebalancing your portfolio might appeal to you if you want a more hands-on approach to your investment strategy.
Maybe long-term investing is a little too boring for you?
Maybe you want to occasionally change up your asset mix?
Whatever the case, you’re going to have to take three steps in order to rebalance your portfolio:
Step 1: Find your target asset allocation.
Hopefully, you set out a target percentage for each of your asset classes when you began investing. If not, that’s okay! Check out my article on asset allocation to help find one that works for you.
In the example above, your asset allocation target was 10% bonds and 90% stocks. This is what you want your portfolio to look like once you rebalance it.
Step 2: Compare your portfolio to your asset allocation target.
How has your portfolio changed since you last saw it? Which investments got bigger and which need “pruning”?
In the example above, your portfolio changed to 20% bonds and 80% stocks over time. You’re going to want to rebalance your portfolio now to reflect your target asset allocation.
Step 3: Buy and/or sell shares in order to get your target asset allocation.
To get your original asset allocation back in the above example, you’re going to need to either invest more into stocks OR sell your shares in bonds in order to go back to your original 80/20 split.
Once it’s reverted back to your target asset allocation, congratulations! You’ve successfully rebalanced your portfolio!
A good rule of thumb is that you check your portfolio once each year to rebalance it and stay in line with your target asset allocation.
And of course, your asset allocation will change over time as you get older and become more risk averse. To help you get a sense of how your asset allocation might change, check out this page from my New York Times bestseller.
I don’t actually suggest manually rebalancing your portfolio. The reason is due to psychology. As humans, we have very limited willpower. That’s why things like cutting out lattes to save money or manually paying our bills each month are hard for us to do.
And when it comes to portfolio rebalancing, our willpower takes a hit in two ways:
People want more $$$. It’s psychologically difficult to take money out of one asset class that is performing really well and put it in one that isn’t performing nearly as well.
People are lazy. Rebalancing portfolios isn’t exactly on top of everyone’s list of things they really want to do. It’s like cleaning your gutters: Something you know you “should” do but never really get around to. So we put it off or just forget to do it altogether.
So how can you get the benefit of asset allocation without the constant maintenance? Simple: Choose funds that do the rebalancing for you.
Automatic portfolio rebalancing with target date funds
I wrote about this in my article on strategic asset allocation, but it’s worth mentioning again: Target date funds (or lifecycle funds) are great funds for people who don’t want to worry about rebalancing their portfolio every year.
They work by diversifying your investments for you based on your age. And, as you get older, target date funds automatically adjust your asset allocation for you.
Let’s look at an example:
If you plan to retire in about 30 years, a good target date fund for you might be the Vanguard Target Retirement 2050 Fund (VFIFX). The 2050 represents the year in which you’ll likely retire.
Since 2050 is still a ways away, this fund will contain more risky investment such as stocks. However, as it gets closer and closer to 2050 the fund will automatically adjust to contain safer investments such as bonds because you’re getting closer to retirement age.
These funds aren’t for everyone though. You might have a different level of risk or different goals.
However, they are designed for people who don’t want to mess around with rebalancing their portfolio at all. For you, the ease of use that comes with lifecycle funds might outweigh the loss of returns.
One thing you should note: Most lifecycle funds need between $1,000 to $3,000 to buy into them. If you don’t have that kind of money, don’t worry. I have something for you at the end of this article that can help you get there.
To recap: No matter how motivated you are about investing right now, you will find other things more urgent and important later. We are all cognitive misers with limited cognition and willpower. Investing in a target date fund lets you compensate for your natural weaknesses and biases by automating complex asset allocation decisions.
For a more in-depth explanation, check out my video all about lifecycle funds.
Master your personal finances
Asset allocation isn’t hard.
What IS hard is getting started — which is why I’m happy you’re here.
If you’re interested in tactical asset allocation, chances are you already have a good idea of how you want to approach your investments.
However, if you want to earn MORE money so you can invest even more, I have something for you:
The Ultimate Guide to Making Money
I’ve included my best strategies to:
Create multiple income streams so you always have a consistent source of revenue.
Start your own business and escape the 9-to-5 for good.
Increase your income by thousands of dollars a year through side hustles like freelancing.
Download a FREE copy of the Ultimate Guide today by entering your name and email below and start earning more for your investments today.
Readers will be surprised to hear that I wasn’t always the charming, hilarious, and stylish personal finance expert they know now.
Hell, I was so awkward I made Urkel look like Robert Downey Jr.
Which is why I had to smile when I got this email from an IWT reader named Emily a while back:
“How do you approach companies/or anything else when you don’t have any confidence? I seem to go mentally blank. And the words don’t come out at all. Backwards and not in order.”
And you’ve probably been there before:
You walk up to a group of friends talking. Stand there awkwardly while waiting for one of them to notice you. Wish for death.
You go to an event and instead of meeting people, pull out your phone and furiously check email.
It’s a fascinating paradox. With your friends or family, you tend to have the BEST stories, but if you just met a group of people, all of a sudden your mind goes blank and you have nothing to say. Most people are willing to say “that’s how it is,” but you can actually fix by implementing the right systems.
Today, I want to teach three systems that helped me know exactly what to say in social situations, and — more importantly — how to say it.
They are:
Perfect Words
Story Toolbox
Question Toolbox
Let’s get to it.
How to talk to people system #1: Perfect Words
A while back, I went out to coffee with a good friend of mine. Now normally, when I order coffee, I just say, “Hey, I’ll have a latte. Thank you,” before going on my way.
But when my buddy went up to order his coffee, he had four people around him absolutely cracking up within seconds. The barista was smiling. People around him were laughing. And everyone seemed to just really enjoy his presence.
And guess what he said that got all this going. It was, “What’s good today?”
That’s it! From that one line he was able to start a great conversation.
Now I want you to check out the rest of his conversation — and see what you notice:
MY FRIEND: What’s good today?
BARISTA: (smiling) Everything is good.
MY FRIEND: (teasing) Everything isn’t good. Tell me the truth!
BARISTA: Well, we just got a new cold pressed coffee machine and I hear that’s supposed to be good.
MY FRIEND: No, I mean what would YOU get if you could get anything?
BARISTA: (laughs) I actually think that our scones are the best things ever.
MY FRIEND: Well, I’ll have two of those please!
A few takeaways:
He’s just saying normal things. There’s no magic line or canned jokes here. My friend was just saying simple things that, on their face, aren’t very clever…but none of that mattered!
He had a lot of energy. The way my friend said things was way more important than what he said. If he went into this situation with low energy and delivered everything in a monotone voice, he would not have gotten the same positive effect.
The cashier LOVED this. She spends all day listening to those aforementioned monotone voices order the same thing over and over. Finally, she got someone who broke that monotony and made her smile. My friend brightened her day and was memorable.
My friend did all this by leveraging a system called the “Perfect Words.”
What are the Perfect Words? Luckily for you, they created a whole book of them called…
…the dictionary.
The truth is thereare no Perfect Words.
Instead, it’s how you say things that determines how you come off.
To show you what I mean, I’m going to give you three phrases and show you exactly how you can use them to open a great conversation:
Hi, how’s your morning going?
Hi, I don’t think we’ve met. I’m Ramit.
Good morning. How are you?
These three simple phrases have no “magic” to them — and yet they’ve worked millions of times since the dawn of conversation openers.
What I want you to do now is start to consider the different ways you can deliver these phrases.
Here are three simple ways you can do that:
Smiling. Many of us don’t typically smilewhenwe’re opening a conversation. We’ll say things like, “Hi, how’s your morning going?” and deliver it like we’re a doctor giving bad news.
But when we DO smile, it’s the instant ice breaker. And it’s so simple to do.
So practice letting your smile “fill your face.” I used to videotape myself speaking to find out I wasn’t smiling enough. It gets easier once you start practicing.
Slow down. The speed in which we say something can have a huge effect on how people perceive us. When we’re nervous, we tend to speed up the way we talk. When we slow down though, it gives people time to connect with you. Couple that with a good smile and you got a winning system.
So try slowing down what you’re saying by 50%. It will feel sluggish, but this is perfect for everyone else. It helps to enunciate your words too. Young Ramit got way ahead using this one tip.
Change your tone. Way back in the day, I had no tonality whatsoever when I talked. I’m sure you could close your eyes and not tell if you were conversing with me or Ben Stein. Eventually I realized this, so I started to speak with more energy — and it did WONDERS.
Try taking whatever level you’re at when you normally talk, and add 50% more energy into your voice. What feels weird to you is NORMAL to everyone else.
Action step: Implement the Perfect Words 3x/day for a week
I want you to use the three phrases above every day for seven days on different strangers. It can be your Amazon Prime delivery guy, your barista, the checkout lady at the grocery store, whoever!
As you use the phrases though, keep in mind the different ways you can change up how you deliver your words (smiling, slowing down, and changing your tone).
A few other things to remember:
They’re called social “skills,” and like any skill, you can get better at them. We’re starting small on purpose. As you get more used to it, you can start to scale and open conversations with more people.
Most people you talk to are bored all day long. This means you’ll be doing them a favor by engaging with them just like my friend was with the cashier at the coffee shop.
Note their reactions and your reactions. Did the person you’re talking to start smiling and laughing because of your energy? Or did they retreat because you made them uncomfortable? How did you feel while you were smiling or talking slowly?
Don’t worry if this doesn’t feel comfortable right away. It’s not supposed to. Just trust the system.
How to talk to people system #2: Make a Story Toolbox
I’m a firm believer in the idea that telling a story is the best way to engage someone. It doesn’t matter if you’re with friends or if you’re trying to sell a product. A good story can make a world of difference when it comes to building a good first impression (notice the beginning of this very post…).
That’s why you always want a large well of great stories to draw on.
You can create your Story Toolbox using any tool you prefer, such as:
Google Docs (what I use)
Microsoft Word
Microsoft Excel
Evernote
A physical notepad
It doesn’t matter what you record them with as long as you ARE recording them. These stories could be funny, entertaining, or serious — and you might actually want to organize them as such.
Action step: Create your Story Toolbox
Designate a place to put your stories, and start by adding five of them.
If you can’t think of five good stories, think back to the last time you hung out with your friends or family.
What did you talk about?
What made everyone laugh?
Every family has an embarrassing/hilarious story. What is it for your family?
Hang out with your friends or family in the next few days, and write down the things you naturally talk about. This will help seed your Story Toolbox for the first time.
How to talk to people system #3: Make a Question Toolbox
If you want to keep the other person you’re talking to engaged, there’s no better way to do it than with a thought-provoking question. It helps you always have something to say and talk to someone you don’t know.
Of course, depending on the context of your conversation, you’re going to want to have different questions for different scenarios.
I remember once, my friend noticed me checking this girl out at a bar, so he goaded me into talking to her. So I approached her and this exchange went down:
Ramit: Hi, I’m Ramit.
Woman: Hi, I’m [whatever].
Ramit: You look like a vodka soda girl. (I know, I know. I don’t know where this horrific line came from.)
Woman: …no.
I was surprised by how she just shut me down, so I decided to have some fun.
Ramit: Aw, c’mon. I’ve been right 100/100 times for the last 5 years. How are you going to break my streak like that?
Woman: I’m a recovering alcoholic.
Shortest. Conversation. EVER. But a funny story now.
If instead, I came in with my question toolbox filled with questions that weren’t awful pick-up lines, I might have had better luck. That’s why you’re going to want to craft different meaty questions for different scenarios.
Action step: Create your Question Toolbox
So the next time you’re making small talk, take note of great questions you hear and ask. Save them in your Question Toolbox for later.
Here are a few good sample questions to get you started:
Networking events/industry conventions:
What made you decide to do X?
What are the biggest challenges when it comes to your industry?
If you had to do X again, what would you do differently?
As you gained more experience in X, what became more important and why?
What would make today/this event successful for you?
Playful questions like: Which do you like more — pancakes or waffles?
What do you hate most about dating? (This question is both interesting and can help you avoid doing the thing they hate.)
What’s your favorite restaurant in the city? Why?
Which Spotify playlist is the soundtrack to your life?
Baristas/wait staff:
What’s your favorite thing on the menu? Why?
What’s the craziest thing someone tried to order this week?
Have you ever written somebody’s name wrong on purpose because you didn’t like them?
BONUS: If you really want to exercise your social muscle, check out my video on improving your social skills. It’s less than 30 minutes.
Enhance your small talk
Small talk is a CRITICAL part of life and building relationships — it’s what helps people get to know each other, establishes meaningful connections, and lays down the foundation for great long-term relationships.
The term “small talk” is actually a complete misnomer because of its HUGE impact on forming relationships and developing unshakable confidence. As such, it takes a lot more care and nuance than just getting right down to the point.
If you walked right up to a CEO you admired at a mixer or convention and said, “I REALLY LIKE YOU. GIVE ME A JOB, PLEASE!” how do you think she’d react? She probably wouldn’t give you that job.
But if you went in with some care, and drew her into an amazing conversation and THEN asked her for a job (or better yet just advice or a coffee meeting), she’d be a hell of a lot more susceptible to it.
The key is realizing that confidence and the ability to carry a good conversation are skills — and like any other skill they can be learned, honed, and mastered.
I used to feel uncomfortable and out of place during social events too — but over time, I’ve developed hacks for confidence in new situations.
I’ll show you exactly how I do it in these 3 short videos. Just enter your email for instant access.
But first, you need to understand what freelance marketing is though. Doing so will provide valuable context for the following tips and help you get a better sense of what you’re getting into.
What is freelance marketing?
Freelance marketers help companies and businesses promote their brands.
Your job is to help:
Grab attention
Drive potential clients to a website/business
Convince them to buy a product
And most EVERY business needs marketing help in one shape or another — especially new ones. Think about it: The busy founder of a new tech start-up isn’t going to want to focus on writing great sales letters or coming up with tweets.
That’s where YOU come in.
Maybe you’re a creative hustler who wants to make a career out of your skills.
Or maybe you work a typical 9-to-5 and want to earn extra money on the side. Or maybe you’re a stay-at-home parent who wants a way to make money while spending time with your kids.
No matter your situation, we want to help you get started.
Let’s jump into our six beginner freelance marketing tips.
Freelance marketing tip #1: Find your niche
Marketing offers a lot of roles — and the direction you take depends on your skills, talents, and interests.
Here are just a few potential freelance marketing roles you could own:
Copywriting. Writing the text needed for marketing products/services including sales pages, email campaigns, and landing pages. If you’re trying to sell something, you’re probably writing copy.
Content writing. Writing and crafting content for blog posts, articles, white papers, videos, and podcasts. Content writing typically emphasizes informing or teaching people rather than selling them something (that usually comes later).
Social media / community management. This covers posting and promoting a company’s brand and content on social media like Twitter, Facebook, Instagram, Pinterest.
Search engine optimization (SEO). This is the process of getting a business’s web content to show up in the results of search engines. It’s very important if you want to drive traffic to your site through Google.
And while it can be tempting to say, “I’M GOOD AT EVERYTHING. PLZ HIRE ME” those people don’t get hired. It’s best if you niche down your role and decide on a specialization.
Why? The more specific you are, the better you can market yourself.
For example, which fitness book do you think will do better?
The book telling everyone that working out will make you feel better
The book for millennial women looking to get six-pack abs
That’s a pretty simple example but the truth is there: The more specialized your offers are, the more actual buyers and clients you’ll attract.
If you’re reading this and don’t have any idea which freelance marketing role you want to own yet, don’t worry!
Here are three questions we’ve developed to help you come up with a profitable idea:
What skills do you have? These are the things that you are really good at that could translate into freelance marketing. Example: Do you have a great eye for analytics and trends? SEO management might be for you.
What do your friends say you’re great at? What others say you’re good at can give you insights on talents you didn’t even know you had. Example: Your friends are always telling you how much they love your stories. Maybe content or copywriting is in your future.
What do you do on a Saturday morning? What do you do on a Saturday morning before everyone else is awake? This can be incredibly revealing to what you’re passionate about and what you like to spend your time on. Examples: Are you a social media hound firing off clever tweets and posting awesome photos on Instagram? Companies would pay you for those skills.
Think about who exactly will be using your services:
How old are they?
Where do they live?
What are their interests?
How much do they make?
What books do they read?
Once you have the answer to those questions, you can come up with your niched-down role.
Here are a few examples:
The copywriter for mid-sized veterinary clinics
The SEO specialist for tech start-ups <5 years old
The social media manager for upscale French restaurants
The content writer for personal finance and development gurus
(Hmm that last one seems familiar…)
And don’t worry. If you try something out and don’t find it’s a good fit for you, you can always change your roles. That’s the beauty of freelancing.
Once you’ve found your niche, though, you’re ready to get started finding clients.
Freelance marketing tip #2: Find clients where they live
If you’re a beginner, finding clients can seem like an intimidating endeavor. After all, you’re selling yourself and your passions, which can be an incredibly vulnerable process.
However, the process can be rendered much less intimidating if you remember one thing: Start simple. Find smaller businesses and clients who are more willing to work with a beginner freelance marketer.
Luckily, there are a number of sites that businesses turn to in order to find freelance marketing talent.
Chief among them: Upwork, a job and gig site catered toward freelancers.
“In the beginning [of my career], I relied heavily on freelance websites such as Upwork,” says freelance marketer Kirsty Price. “I’d highly recommend Upwork for those just starting out in their freelance careers too.”
And getting started with the website is simple. You simply create a freelancer profile and start applying for various projects on the site such as:
Content writing
Copywriting
Editing
Graphic design
SEO
“The support from staff and fellow freelancers is incredible and there are fresh opportunities coming in constantly,” Price says.
It should be noted that while Upwork can be a great place to find clients and build a portfolio, you shouldn’t necessarily rely on it to find all of your clients.
“I’d avoid over-relying on places like Upwork,” suggests freelance copywriter Mac Hasley. “Because if you have to log in to Upwork every week and write a hundred cover letters and you’re competing against bottom-of-the-barrel projects, you’ll end up burning yourself out.”
Instead, Mac suggests employing a technique we here at IWT like to call “Going to where your clients live.”
And no, we don’t mean stalk your clients.
Instead, you’re going to go to the message boards, forums, and websites your client might frequent and be incredibly helpful.
“Finding an online community where you can be helpful and active is one of the best things you can do for yourself as a freelancer,” Mac says. “I’ve found clients by going to online forums like Facebook groups and other online message boards and just answering questions.”
You can use this framework to find your clients as a freelance marketer.
Want to freelance your social media skills? Start answering questions about social media on Quora or Facebook groups for small-business owners who need your talents.
By engaging in these communities, you’ll be building your networks that’ll prove valuable to you down the line.
Freelance marketing tip #3: Be flexible with your rates (at least at first)
Beginner freelancers tend to get confused and anxious when it comes to their rates.
After all, there are no hard and set rules for how much you should charge.
“In the beginning, I definitely obsessed a little too much with industry standards and what other people were charging,” says Price. “So I ended up totally undercharging and undervaluing myself in the early days, simply because I was scared that I wouldn’t be able to pay my bills.”
But if there’s one thing you should know about your rates, it’s this: Don’t sweat it too much — at least when you start.
In fact, you can even…
…brace yourself…
…do work for free.
Before you storm out screaming “If I’m good at something I shouldn’t do it for free!” you should know that working for free is totally fine — IF you do it strategically.
Some good examples when it’s okay to work for free:
You’re building a portfolio of work you can show to future paying clients
You want to build connections with businesses you admire
The person you want to work for is well-connected. And if you do a good job, they’ll connect you with other people
You already have a full-time job so you can afford to trade time for experience
“If you’re brand new and just need experience, you can offer your services for free to friends and family for a set amount of time,” says writer and social media manager Kristy LaPointe. “My first few paid jobs came out of work I had done for free.”
This flexibility is key to any freelance marketer starting out.
Of course, you’re going to want to eventually charge, you know, actual money.
To help, we have four different pricing models you can use to base your rates off of:
Hourly. You set an hourly rate and a client will pay you per hour. The benefit for the client is that they mitigate their risk since they can just stop paying you whenever they want if they’re dissatisfied. It also stops the clients from piling on work without paying you.
By project. You’ll know exactly what you’re getting paid for an entire project, with more concrete deliverables for the client. This method is nice because when you’re done with the project, you’re done. So you might end up getting paid more than your hourly rate. However, you do run the risk of the client adding more work onto the project as you move along, so communication about what a “project” entails is important.
By retainer. Your client will pay you a set amount monthly. This allows the client to have access to you at any given time during that month. As a beginner, you’re probably not going to find a client who is willing to hire you on retainer until you’ve built up enough experience working with them. However, it’s a good goal to have and something to keep in mind as you get into freelance marketing.
Commision/bonus. This payment model can work in conjunction with all of the other ones and can provide a healthy incentive for you to get your work done. For instance, if your client promises you a $1,000 bonus for attaining X amount of leads with your landing pages.
If you’re a beginner, I suggest you charge hourly because most clients are going to be unsure about whether or not you’ll be able to do a good job. As such, they might not want to give you a fat project fee.
Once you’ve gotten your first three or so clients though, then you can move on to different pricing models.
Price suggests the retainer model.
“I prefer working on a monthly retainer model rather than charging by the hour, as I don’t feel that freelancers should be penalized by becoming more efficient with experience,” she says. “After all, does it really matter to a client if you put in four hours or two hours if the end result is of the same value?”
And when it comes to how much exactly you should be charging, there’s no right answer.
However, we here at IWT have a few solid rules-of-thumb that can help you ballpark a good rate:
Drop Three Zeros Method
Simply take your ideal (read: realistic) salary, drop three zeros from it, and voila, you have your hourly rate!
For example, say you’d really like to earn at least $40,000. Just take the three zeros from the end and you now have your rate: $40/hour.
Double your “resentment number”
I love this one because it’s both really interesting and effective. Ask yourself: What’s the lowest rate you’ll work for that’ll leave you resentful of your work?
Say you’ll work for $15/hour at the VERY LEAST. Just double that number so now you’ll earn $30/hour.
Do what the next guy does
Go to Google and search for the average hourly rate for whatever service you’re providing. You’ll get a good sense of where to start when you’re charging your clients.
And remember: Even if you’re an “established” freelance marketer with a few clients under your belt already, it’s okay to go under your rate if you really want to work with a certain client.
“I’ve told plenty of smaller businesses and non-profits I wanted to work with, ‘Look, here’s my general hourly. I know you’re a small business and it might not be in your budget. But I really want this project. I’ll work with you,’” says Mac. “I’ve never not gotten my full offer when I’ve done that. If you’re really excited about a project, clients will pick up on that and they’ll be excited to work with you.”
She continues, “Being a human is more important than being a stickler about your rates.”
Once you’ve gotten your client, it’s time to move on to another very important freelance marketing tip that even the most seasoned freelancers forget:
Freelance marketing tip #4: Meet your damn deadlines
If you are the freelancer who meets their deadlines, you’re automatically ahead of the vast majority out there.
That’s due to the fact that businesses would rather have an okay freelance marketer who meets their deadlines than an amazing freelance marketer who constantly misses them.
“Meet your damn deadlines,” Mac says. “I work my butt off never to miss a deadline because that’s one thing that other freelancers are crap at. If you do the work and you do it on time you’re MILES ahead of the other freelancers out there.”
Of course, you’re going to want to provide great, quality work either way — but do so while meeting your deadlines. This shows that you:
Are a professional
Are good to work with
Aren’t interested in wasting your clients’ time
When you do provide great work and meet your deadlines, that means you’re prepared to move on to our next tip:
Freelance marketing tip #5: Get referrals
Referrals are clients that you get from existing clients and they are the lifeblood of any freelancer.
For a few reasons:
You can raise your prices when you get a referral. The client who referred you has automatically added value to your work by recommending you. That means you can charge more for your work.
You get better clients. When you charge more, you’ll start attracting high-quality clients who can afford you. They’re also much less likely to waste your time if you’re being paid top dollar. It’s a win all around.
You can more than double your income. Check out this case study from a freelance project manager who went from charging $25/hour to $75/hour just by getting a referral. This is a HUGE win.
“At this point the majority of my clients and contracts come through referrals,” says LaPointe. “When clients are happy with what I’ve done, it’s natural for them to recommend me to their friends and colleagues.”
And asking for referrals is easy — if you have the right script.
Luckily, we have a proven script from our article on how to get clients to help you ask for referrals:
CLIENT’S NAME,
I’m so happy to hear that you enjoyed my work. If you know of anyone else who’s looking for my services as well, I’d be grateful if you passed my contact information along to them.
Thank you,
YOUR NAME
It’s simple, direct, and gets results.
Freelance marketing tip #6: Treat yourself like a business
Remember: As a freelance marketer, you are your own business.
That’s why you need to start treating yourself as one.
From Mac:
If you think of yourself as a typical freelancer, you’re going to get yourself into trouble. Freelancers have a mindset of feast and famine, where finding clients and work can often be a bit of a unicorn.
If, instead, you looked at yourself as a business, then you start looking at ways you can be sustainable. So be a name someone knows in a forum and wants to go to. Be a great blogger. Build credibility.
If you were a business owner, you’re not constantly talking to customers one-on-one and hoping they buy your stuff. You’re thinking of ways to make customers think of you and keep you top of mind.
This mindset shift is hugely important if you want to find success as a freelance marketer.
And remember: Business is also about balance.
It’s easy to blur the lines between work and life when your office is literally in the same room you sleep in. But finding that balance is important if you want to prevent burnout, keep your sanity, and enjoy your work more.
“I’m a huge fan of work-life balance,” says Price. “So I try to stick to working no more than 40 hours per week. I’m able to do this by being (probably) a little bit too militant about time management — a habit I picked up out of necessity from juggling a huge workload in my agency days.”
Of course, as a freelance marketer, you might not be working a typical work day. As such, you’ll have to be even MORE diligent about allocating time for work.
“Especially in social media, there is no 9-to-5, because you need to be checking in on what’s happening online and on your accounts. The internet never sleeps,” LaPointe says. “One of the best things I’ve done is set aside intentional time away from the internet and work.”
She continues, “Sometimes it’s an evening out with friends, sometimes it’s a week-long camping trip. It’s not always easy to organize, but it is always worth it.”
So find time to relax outside of work. And if you can’t find time, make it. It’s important for your mental well-being as well as your business.
You can even add it to your calendar.
As Ramit says, “If it’s not on my calendar, it doesn’t exist.”
Ramit’s actual calendar
Put all of your goals on it too. That includes work meetings, writing times, or even times when you just want to disconnect and not be in contact with anyone.
Doing so will give you a great visual cue to work from and it’ll keep your goals at the top of your mind.
BONUS: The Ultimate Guide to Making Money
If you want even more information on becoming a freelance marketer, be sure to check out our articles on the topic below:
Managing money can be intimidating. From the list of financial to-dos to the endless array of acronyms for different accounts, it can easily feel like there’s too much to know, let alone if you’ll ever get it right. If you’re feeling overwhelmed and confused when it comes to managing your finances, you’re not alone. 39% of Canadians feel like they do not have their financial future under control. – The Financial Blind Spots Survey, FPSC Ready to take charge of your finances but unsure where to get started? Below is a list of common financial blind spots that might be plaguing your money mindset, and how to fix them! Sweating the small stuff Clipping coupons might save you $0.30 on groceries, but you’d be better off axing a few lunches or a dinner out each week and saving $30.00 instead. When it comes to supercharging your finances, focus on dollars before […]
One of my favorite things is planning the vacation. Nothing makes me feel better than a well-formatted calendar with flight info and dinner reservations.
Check out this itinerary I prepped for a recent trip to Singapore:
I even include things like the weather and information for airport lounge access.
Why show you this? Three reasons:
I want you to be 100% clear of how much of a weirdo I am.
I want to show you how seriously I take my travel planning (right down to options for what I’m doing during my free time).
I want you to realize that this level of vacation planning helps make my trip MUCH easier.
Planning a vacation doesn’t have to be a pain. That’s why I want to show you a great system you can use to plan the perfect trip.
It looks like a lot…and it is. However, you can make the process a lot simpler with a few productivity systems.
My suggestion? Put it on your calendar.
Some of these steps will take a few days to accomplish (e.g., deciding where to go), whereas some will take just an hour or so (e.g., calling your credit card companies).
Delegate time on your Google Calendar to each step so you have all the action steps organized.
To help you even more with planning your vacation, we also talked to a few notable travel bloggers and professionals on how you can get the most out of your vacation planning. They’ve dedicated themselves to helping others get the most out of their travel experiences — and now they want to help you.
So without further ado…
Step 1: Decide where and how to go
Naturally, where and how you go is determined by your individual circumstances:
Are you more crunched for time or money?
Are you traveling alone or with friends or your family?
Is your work flexible with when you can leave or do you have a set time frame when you can travel (e.g., a teacher)?
Do you want to go somewhere close by where you can drive, or would you have to fly?
And depending on your situation, you might break from the suggestions in this article — and that’s okay! I only want to provide a framework you can work from. What you do with it is ultimately up to you.
Knowing this, you’re going to want to decide where you want to go. Doing this first is important for two big reasons:
It helps you psychologically. The mental benefits of setting a good goal are enormous. Having a goal destination in mind gives you something to work for when you’re preparing for your trip.
It determines practically every aspect of planning. No two vacation destinations are alike, which means each destination is going to change the way you tailor your budget and itinerary.
It can often be hard though to decide where you want to go.
After all, you can travel anywhere in the entire world. With all of your choices, how are you going to decide?
There are three great areas you can look towards to find your next vacation spot:
Recommendations
Social media
Friends and family
Recommendations
People you trust can be great sources of destination inspiration — and it’s the main way Matthew Karsten, aka the Expert Vagabond, decides where to go next.
“Word of mouth is probably my top source for recommendations,” Karsten says. “[When I hear of a good place], I keep a bucket list of destinations I want to visit in Evernote, along with details about possible activities and links to relevant online articles.”
Ask your friends and loved ones for good vacation recommendations. See what they liked about the place and what you can do there if you decide to visit.
Also, create a “bucket list” of destinations you’d love to go to.
It doesn’t have to be on Evernote either. It can also be in a Google Doc, Excel sheet, the Notes app on your phone, or in your middle school diary. Every time a friend recommends a place to go, write it down. You can refer to this later when deciding where you want to go.
Social media
Your Facebook and Instagram aren’t just for getting likes, you can also use them to find awesome vacation destinations.
“I use Instagram’s ‘collections’ feature to save other people’s photos based on location,” says Karsten.
He continues, “Instagram changed travel a lot. All of a sudden, destinations that never saw too many tourists are getting swamped with people trying to copy popular photos they saw on Instagram.”
Though you might not want to copy other people’s photos, you can leverage Instagram collections like Matt and start compiling your own images from places you’d like to go. For information on how to exactly do that, check out Instagram’s page on it here.
Friends and family
Sometimes the best vacation destinations are where your friends and family are. Not only can they help you save money on accommodations but they can also fill you in on things to do there.
“I’ve been traveling more for friendships than anything else,” Naveen Dittakavi of the travel deal website Next Vacay says. “It’s nice to bond and catch up with old friends — especially as we get older.”
Do you have a friend you’ve been meaning to visit for a while? Or maybe a family member you haven’t seen in a long time? Reach out to them and use the opportunity to visit them.
ACTION STEP: Decide where you want to go — and get specific
Once you decide where you want to go, I want you to get specific with it. It can be anywhere. Say you decide, “I want to go to London!” I want you to get even more specific with it.
A good example: “By July, I want to go to London for a week with my boyfriend.”
If you want to take it a step further, set a SMART objective for your vacation plans.
SMART stands for:
Specific
Measurable
Attainable
Relevant
Time-oriented
It’s the solution to vague goal setting that gets you nowhere. Like whenever anyone says, “I want to get fit” for their New Year’s Resolution or “I want to travel in the future.”
The way it works is it niches down these big vague goals and gets precise with them. This leads to better focus when you set out to accomplish your goals.
Traveling is like a game of Twister: It’s best to stay flexible.
When you travel is just as important as where you travel. In fact, your timing can mean the difference of hundreds, possibly thousands of dollars in airfare.
Let’s say you want to take a 7-day trip to Cabo from New York City.
Here’s what a flight from July 6 to July 13 costs:
And here’s a flight two months later:
Time matters! Which is why you should be flexible with your travels.
“Flexibility is the most important thing in finding a cheap flight,” travel blogger and entrepreneur Nomadic Matt says. “You need to be flexible in your date. If you have to go to Paris on a specific date, then you have to pay the fare. There’s no magic bullet to make the price go down.”
He continues, “But by changing your date by a day or two, you might be able to drop the price.”
If you want to find the best time to travel to a destination, consider these three things about the location:
Peak season. This is the time of year when most tourists will visit a location. This is often due to good weather and holidays surrounding it (e.g., the Grand Canyon or Mount Rushmore in the summer). Flights and accommodations tend to be the most expensive during this time.
Off-peak season. This is when the majority of tourists aren’t visiting a destination — typically due to weather (e.g., a ski lodge in the summer). You’ll normally find very affordable flights and accommodations during this time, but on the flip side, there’s usually a reason for it being “off-peak.” In some countries, off-peak can mean a monstrous monsoon happens nearly every day.
Shoulder season. This is the time between peak and off-peak — and a good time to take advantage of the benefits from both seasons.
“Shoulder seasons are my favorite time to visit,” Karsten says. “You don’t want to visit during the wrong season.”
Shoulder seasons allow travelers to take advantage of good weather at a certain destination, AND there’s the added benefit of lowered cost on flights and accommodations.
(Also you don’t have to deal with a bunch of annoying tourists.)
ACTION STEP: Find a date to go on vacation
Pull up Google Calendar and start looking at dates that work for you.
If you’re looking to save extra money on travel, consider your destination’s off-season or shoulder season.
Nailing down when exactly they occur isn’t difficult, though, as long as you take into account several factors. The biggest of which are:
Weather. Summer is always going to be an incredibly busy time for common vacation destinations like cruises, beaches, and…well, anywhere where there are outdoor activities. Also the fact that school is out for the summer means families will be traveling a LOT during this time.
Holidays. You know what’s more expensive than vacationing in New York City? Going to New York City on New Year’s Eve. And if you’re budget conscious, you’re going to want to keep in mind the holidays when YOU travel. Depending on the destination, flights and hotels are going to be more expensive if it lands on a major holiday.
Bryce Conway, CEO of the travel hacking site 10xTravel.com, leverages this knowledge when he travels, saying:
“One of my wife’s and I’s favorite thing to do each year is to go to Western Europe either over President’s Day weekend or MLK Day weekend. It’s not a holiday over there. The weather is not as nice as it is in America, but everything is half price and you can walk straight in.”
A few other ways you can find an area’s peak season:
Call the local tourism office. Most every country, state, and city will have a tourism office that’ll be more than happy to help you with your travel plans. Simply ask them, “When’s your peak season months?” (For a comprehensive directory of tourism offices, follow this link.)
Compare flights and hotel prices for different dates online. If you find that the date you’re trying to book is WAY more expensive than another one a few months away, you might be booking on peak season.
Remember: Not all destinations are alike. That means their peak, off-peak, and shoulder seasons will be different.
Once you know where and when you want to travel, it’s time to…
Step 3: Take time off of work
SAD FACT OF THE DAY: The majority of Americans don’t use all of their vacation days.
A 2016 study conducted by Project: Time Off (an organization dedicated to improving people’s work culture) discovered that Americans lost 222 million unused vacation days over the course of the year due to pressures at work.
This. Is. RIDICULOUS!!!
You’re losing time and money by not taking your vacation days. These are benefits ensured to you by your employer. Use them!
And if you’re on vacation, you’re definitely going to want to use them (yes, even YOU remote and freelance workers).
ACTION STEP: Take time off of work
The difficulty of requesting vacation days varies from job to job. However, you canmake the process simple for you and your company by using some good old-fashioned scripts.
Oh look, here’s one now:
Subject: Vacation request (October 2nd through October 6th)
Hi [manager’s name],
I’d like to request vacation time from Monday, October 2nd, through Friday, October 6th because I’ll be taking a family vacation over those days.
While I’m gone, I’ll be reachable by phone but not email. I’ll be making sure that we have coverage in the support queue while I’m gone, and I’ll also be distributing a playbook to my team so it’s clear who owns which issues.
Is this OK?
Thanks,
-Ramit
This is a great script to use even if your vacation is during a “busy time” for your company.
Why? First, consider why your boss might want to deny you vacation time:
You own a project and it might not get done while you’re gone.
The work might end up on your boss’s plate.
Your boss might have to delegate YOUR tasks to other workers (which nobody likes doing).
This script addresses all of these points in the last paragraph. By showing that you’ve already gone the extra mile to make sure that your responsibilities will be taken care of in your absence, you allay your boss’s concerns that your work won’t get done.
It also maintains a friendly tone throughout the message AND you give a good reason for your absence. You’ll want to send this email weeks — possibly even months — in advance. It’s far easier for your boss to say “yes” when the company has time to plan for your absence.
Using travel credit cards to pay for flights is a Big Win.
Say a round-trip flight from New York to Paris costs $500.
If you book using the card we’re about to suggest, you could get that same flight for FREE.
In fact, you can save THOUSANDS each year if you leverage reward points. And the more time you have to plan, the more points you can amass — many cards even give you sign up bonuses.
But with so many options out there, which one should you get?
“If you want to use credit cards for their reward points, I suggest that card,” Naveen says. “It’s classic, it’s solid, and the redemption options are incredible. An all-around great card for a beginner.”
A few fast facts on the Preferred:
Annual fee: $95 (waived the first year)
Bonus: 50,000 points (after spending $4,000 in the first 3 months)
Double points on dining and travel: If you’re automating your finances and have a Conscious Spending Plan laid out, you’ll be able to have plenty of money left over each month to earn points through travel and dining purchases.
1:1 point transfer to other travel programs: This helps you get first class seats on international flights with Chase’s affiliate airlines.
The 50,000 points also amount to about $625 towards your airplane ticket if redeemed through Chase’s Travel Rewards program.
And remember, you can also use your points to redeem things other than flights including hotel rooms and rental cars.
For more information on travel credit cards as well as how you can maximize them, be sure to check out our article on the subject.
NOTE: If you’re in credit card debt DO NOT sign up for a travel credit card…or any other credit card for that matter. Instead, check out my article on how to get out of debt fast.
If you’re nervous about getting into travel hacking through credit cards, that’s okay. There’s another solution that’ll help you find ridiculously cheap flights.
Sometimes their mishaps lead to some great deals for you through “error fares.” Error fares are airline tickets that are, temporarily, a WAY lower price than they’d normally be (typically through technical or human error). These fares often mean travelers can get tickets from mainland U.S. to places like Europe and Asia for a few hundred dollars or less.
To find these errors and deals, there are a number of websites that are dedicated to hunting them out.
Here are a few that I suggest you leverage the next time you’re finding flights:
Secret Flying. This site immediately posts any errors or deals they find. You can even use their handy search function and enter your country of origin and destination so they can find a deal more suited for you.
The Flight Deal. Another great site to find amazing deals on airfare as well as hotels, rental cars, and travel credit cards. They also give you information on flight deals happening in almost every major U.S. metro area.
Scott’s Cheap Flights. A tried-and-true resource when it comes to finding error deals. Scott’s offers a free newsletter that’ll notify you whenever they find a deal along with instructions on how to book it.
Next Vacay. This is Naveen’s (one of our Zero To Launch graduates) very own site that helps travelers find the best deals. Next Vacay automatically crawls through various airfare sites to find you the cheapest flight possible.
One key thing to remember when purchasing an error fare:
DON’T CALL THE AIRLINE COMPANY TO BOOK!!
You’re taking advantage of their mistake. If you point out how they messed up, they’re going to realize it and not let you have the deal. Stick to booking through the sites above or through third-party sites like Skyscanner instead.
Also don’t ignore an amazing flight deal because it’s departing from a different airport than the one closest to you. Remember how it’s important to be flexible on whenyou leave? Same goes for where you leave.
This is key to a process called “repositioning.”
Repositioning simply means that you’re willing to depart from an airport that might not be close to you. Also, you might be arriving at a destination that might not be your final one.
From Naveen:
“You don’t have to fly out of your own home city. I’m from Atlanta. However, when I flew out to India a few years ago I didn’t fly out of Atlanta. I booked a few different tickets that took me from Baltimore, then back to Atlanta, then to Paris, then to Bombay. I ended up coming back through my home airport — but it was cheaper than trying to find a flight from Atlanta to India!”
Say you live in Denver and want to fly to London. All the flights from your airport are crazy expensive ($900+).
However, you find a flight going out of Chicago to London for $200 on Scott’s Cheap Flights. A quick search on Skyscanner shows you that a flight to Chicago is just $90 from Denver.
It’s cheaper then to fly to Chicago and catch that amazing flight deal for $290 total.
“If you’re willing to go to a different airport, you can save a TON of money,” Naveen says. “If you want to go to say Paris, but there other cities in Europe on sale like Dublin, you can then take a flight to there and hop on over to where you want to go in Europe via train or plane.”
By repositioning your origin point and destination, you can save a ton of money on airfare. It’s going to take more time but the trade-off is huge for your wallet. Remember: When traveling you’ll often be pressed for either money or time. Choose your flights accordingly.
ACTION STEP: Start searching for error fares — and reposition if you have to
Sign up and start following the sites we mentioned above to find great deals on flights through error fares.
You might even get lucky and find an error fare through an airport near you!
Once you have your flight, you’re going to want to make sure you have a place to stay while you’re on vacation too. That brings us to…
Step 5: Find a good place to stay
Finding a great place to stay that doesn’t break the bank sometimes seems impossible.
However, finding a great deal on accommodations is simple IF you’re willing to break the mold.
“[My wife and I] were in Switzerland a couple of years ago and we stayed at a hostel in a private room,” recalls Naveen. “There are no budget hotels in a place like Switzerland. It’s either a hostel or ultra-glamorous hotel. The hostel we stayed at was still very comfortable and affordable for us though.”
Along with hostels, travelers can also find great, affordable places to stay through home sharing sites like Airbnb or Couchsurfing.
“If you really want to save money on accommodations, backpacker hostels are the way to go,” Karsten says. “I once spent a month living in a Nicaraguan hostel for $5 a night!”
If you really prefer to stay in a hotel though, that’s okay! You can book awesome deals on hotels using travel credit cards since they often allow you to spend points on hotel rooms.
There are even awesome cards like the Starwood Preferred Guest Credit Card that allow you to maximize your points for hotel stays.
Many websites also exist to help you get the most out of your hotel bookings.
“One site I really like is i-escape.com,” suggests Naveen. “They have sweet deals for hotel accommodations at different price points. Another great one is Hotels.com. They have a program that holds 10% of your spend with them, and eventually they give you a free night. So every 10 nights or so, you can get a free night in a hotel.”
ACTION STEP: Book a great place to stay
By being flexible and a bit judicious with your accommodation search, you can find an awesome place to stay during your vacation and not break the bank.
Use the tools below to help you find some of the best deals on places to stay.
Airbnb. More than just renting spare bedrooms, you can find some really cool places at a relatively low cost if you are diligent in your search (you can even stay in a freaking castle!).
Hotels.com. They’ve aggregated accommodations ranging from uber-luxury hotels to small mom-and-pop bed and breakfasts. Also, they’ll kick back a free night in a hotel for frequent users. Awesome.
i-escape.com. Though a bit more limited in selection, i-escape gives travelers only the best accommodations at the best prices.
HostelBookers.com.With over 35,000 hostels in over 170 countries, HostelBookers should be your first stop when trying to find a good hostel. You’ll have no trouble finding an awesome (yet budget-friendly) option here.
HostelWorld.Another great option to find hostels. The site’s 24/7 customer support is also at your call in case you have any questions or concerns about your bookings.
Step 6: Call your credit card companies
Imagine you’ve finally made that trip to Paris you’ve always dreamed of. You’re taking in the sights, the sounds, and the people. You LOVE it. So you decide to buy yourself a nice meal to celebrate your first night — and it’s amazing.
Then comes time to pay for your check. You hand your credit card over. Your waiter scans it…and scans it…and scans it again.
He hands it back to you and shakes his head.
Declined.
You don’t have any other way to pay for it. Soon you’re in a French gulag, breaking big rocks into smaller rocks until you can repay your debt. This is what could happen (probably) if you don’t warn your credit card company about your travels.
Credit card companies get nervous when they see you make purchases you don’t normally make — especially when those purchases are somewhere you don’t live.
That’s why it’s important to give them a heads up before you go.
From Naveen:
“I call my card companies beforehand in order to tell them about our travel plans. Most of these companies don’t even need you to talk to a rep — it’s fully automated.
You just call up the company and say, ‘travel plan’ at the prompt. Then they’ll ask you for the countries you’re going to in order of your visit, when you’re going, and when you’re coming back.
Then they authorize the cards to be used in each of those countries.”
ACTION STEP: Tell your credit card companies about your travels — but prep for the worst
Call your credit card company and tell them about your trip.
Here are the numbers for the major card companies out there to help:
Visa: 1-800-847-2911
Mastercard: 1-800-307-7309
Discover: 1-800-347-2683
American Express: 1-800-528-4800
Simply inform the representative that you plan on traveling and that you’ll be using your card. They’ll ask you where you’re going, how long you’ll be gone for, and voila! You’re prepped for travel.
Much like airlines, credit card companies often screw up even when you give them the heads up.
You might find yourself in a situation where you’ve warned them that you’ll be traveling and they still cancel your credit card when you try to make a purchase abroad.
That’s okay! Because you’re an IWT reader, you’ve prepped for this situation by packing two alternatives:
Cash. It’s always a good idea to carry $100 – $500 in emergency cash just in case something goes wrong. “I bring cash with me just in case my card doesn’t work while traveling,” Naveen says.
ATM/Debit card. One of the biggest hassles when it comes to getting money while abroad is international fees — especially when it comes to ATMs. However, you can circumvent that with the right cards.
“There are certain cards that will refund your ATM transaction fee. Charles Schwab’s debit card is a great example,” Naveen says. “In fact, I have a friend who keeps a certain amount of money in his Schwab account so he can use it if he’s abroad or in Vegas or something since the fee is refunded to your account by the bank.”
Step 7: Budget consciously for the trip
There are TWO ways you can prep your vacation budget.
Save money for travel
Earn money for travel
Both can be simple, painless, and really fun (seriously).
How to save money before travel
One of my favorite ways to save money for a trip is through a process called “mental accounting.”
Pretty much what mental accounting looks like.
Mental accounting is a psychological technique wherein people treat money differently depending on how they got it and plan on spending it.
A great example of this: Using a sub-savings account.
Most banks allow you to create a sub-savings account along with your normal savings account (you can even name them too!). You can put money into this account each month and know that it’s going towards your traveling goals.
By mentally accounting this money for travel, you’re leveraging a powerful psychological trick of focusing your savings goals.
You can even couple the sub-savings account with another great system I love: Automated finances.
Automating your finances is a system wherein your money works passively for you. It’s the ultimate cure to never knowing how much you have in your checking account and how much you can spend.
When you receive your paycheck, your money is funneled to exactly where it needs to go — whether that be your utilities, rent, Roth IRA, 401k, or your savings account.
“I always have a budget for travel,” Naveen says. “That includes saving a couple hundred dollars a month towards a travel fund. This is the money that I saved through the IWT system. I use for hotels and restaurants.”
ACTION STEP: Automate your finances
If you want to learn more about how to automate your finances, check out this 12-minute video of me explaining the exact process I use below. Setting everything up won’t take more than one or two hours out of your day, but it will save you thousands of dollars over your lifetime.
Earning money while traveling
Saving money isn’t the only way you can hold onto cash during your travels. There are actually a variety of ways you can earn money while abroad too.
That’s why my team and I have worked hard to create a guide to help you navigate all the systems that’ll help you earn more money today: The Ultimate Guide to Making Money.
In it, I’ve included my best strategies to:
Create multiple income streams so you always have a consistent source of revenue.
Start your own business and escape the 9-to-5 for good.
Increase your income by thousands of dollars a year through side hustles like freelancing.
Download a FREE copy of the Ultimate Guide today by entering your name and email below — and start blowing up your net worth today.
“The Ladder of Personal Finance” from Ramit’s book, I Will Teach You To Be Rich
