How to Reinvest Your Online Income

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When you start making money online, one of the most important things you should do is reinvest a portion of your income.

The reason why is because of the old saying: You have to spend money to make money. Since most teens don’t really have any money to spend before they start working, it’s not really an option in the beginning.

Yet, once you start earning money, you should take a portion of those earnings and reinvest it into ways that can make you even more money. This is a very common business practice for most businesses as well as investors.

Reinvest In Your Online Business:

One of the most common ways that businesses reinvest their income is by putting that money directly back into their business. They do this by taking some of the money they earn and spend it on ways that will help them grow their business so they can earn even more money.

Reinvesting in your company helps speed up the growth of the business so you start earning more money sooner rather than later. While many people dislike the idea of reinvesting in their company because they view it as spending money, not making money, you shouldn’t look at it that way. That kind of thinking will only slow down your growth and keep you from succeeding sooner.How to reinvest your online income

Another plus side to reinvesting your income is it reduces the amount of tax you’ll have to pay on your earnings. The amount that you reinvest in your business is considered a business expense and can be deducted from your overall earnings. That means you only have to pay taxes on this reduced amount of earnings, not the amount you made before you reinvested. So not only do you get to pay less in taxes, but the money you spent went back into your business and will help you earn even more in the long run. This makes reinvesting a win-win situation.

So how much of your income should you reinvest? That all depends. In the very beginning, when you’re not making a lot of money, it’s okay to invest all of your profits back into your business. Since you’ll probably be making less than $100 at that point, it’s not really a lot of money so it’s perfectly ok to reinvest it all (unless you really need to keep some of it for personal expenses or etc.)

Once you start making more money, you’ll want to scale back how much of your profits you invest. There is no magic number for how much you should reinvest, it just depends on how much you earn, how much it costs to run your business and how much you can spare.

That being said, don’t invest large amounts of your income into one thing that has an unclear return on investment. Instead, start out by investing smaller amounts into multiple methods (such as advertising, outsourcing, etc) and keep close track of what works and what doesn’t work. It may take a bit of experimenting, but you’ll eventually figure out which reinvestment method is the most profitable. Then, all you have to do is follow the old saying: do more of what works and less of what doesn’t.

So now that you know why you should reinvest, here’s how to do it:

Hire a writer – If you run a blog or website, hiring writers to write your income-earning articles is one of the best ways to reinvest your income. If you hire multiple writers or at least one writer who can produce a lot of articles quickly, you can greatly increase the number of articles on your blog over a short period of time and therefore greatly increase the traffic and earnings. If you refused to spend that money and instead did all of the work yourself, it would take you twice as long to build up your blog and twice as long to start earning serious money. Save yourself some time and hire some writers.

Hire a virtual assistant – If writers are not what your site needs, you can instead hire a virtual assistant to take over your numerous small duties, such as returning phone calls, answering emails, managing social media and etc, to give you more time to spend on the things that make you the most money, whatever they may be. Spreading yourself too thin by taking on too many duties is one way to slow your progress down, so why not help speed things up by letting someone else do the busy work while you focus on more important things.

Hire a project manager – When you’re managing the day to day details of a business, it’s sometimes hard to see the big picture and realize what needs to be done to move your business forward. A project manager can help with that. They have the experience, the knowledge and the foresight to see where you need to go next and help identify the steps to get you there. If you’re running a blog, a project manager can help identify key pieces of content you should create to increase your traffic. If you run an online store, a project manager can identify which pieces of inventory you should focus on more and which you should phase out. Whatever your online business is, a project manager can help.

Redesign your website – If you run a website, blog or online store, you could also hire web designers to suggest and implement improvements that will help increase the functionality of your website and make it more profitable. Perhaps your site is slow, the layout is confusing, the products/articles aren’t properly showcased for maximum efficiency. A website redesign can solve all of these problems and increase your sales, click through rates or whatever it is that you want your visitors to do.

Advertise – Another simple way to reinvest in your business is to pay for advertising. This advertising can be in the form of Facebook ads, Google ads, private advertising spots on blogs, sponsored posts on blogs, or whatever you think would be the most beneficial for your type of business. Advertising isn’t cheap, which is why it isn’t really an option for a teen just starting out in online business.

But, once you start earning some money, it becomes a lot easier to purchase some ads and expand your audience or customer base. In addition, it will help diversify your traffic sources so that you aren’t relying on only one traffic source such as social media or search engine traffic. You don’t want your site or business to be at the mercy of one single traffic source that can fluctuate at any time.

Start a New Online Business:

If you don’t have an online business and are instead earning money by taking paid online surveys or completing micro jobs, user-testing jobs or etc, one thing you can do is take some of your earnings and use it to start one.

This online business can be something as simple as a blog, an e-commerce store, publishing ebooks or any other online business that might require a small amount of money upfront to get started (usually between $10-$100).

Start a blog – For a blog, you can use the money to purchase a domain name and pay for hosting. If you’re not a good writer or don’t have the time to write articles, you can also use the money to hire writers to write articles for you. Writers cost anywhere from a few dollars to $15 dollars an article, depending on where you hire them. The thing to remember is you get what you pay for. Paying $2 for an article may be tempting, but the quality of the article is going to be poor. It’s best to pay somewhere between $5 to $15 and make sure the writer is actually good before you hire them. Some places to find decent writers are elance.com or ecopywriters.com.

Start an ecommerce store – For an ecommerce store, you can also use the money to buy a domain or pay for supplies, listing fees and other business expenses. These expenses all depend on where you decide to host your store and what type of products you decide to sell. Some places to sell goods online are etsy.com or ebay.com. You could also use the money to buy goods to sell through Amazon’s FBA (fulfillment by Amazon) program.

Write and publish ebooks – For publishing ebooks, you can use the money to hire an editor and an ebook cover designer. Both of these things will cost you between $100-$200 at the very least. Many people try to skimp on this or try to do it themselves but I strongly advise against it. Editing and proofreading your book is almost as important as writing it. Typos and errors in your book will lead to bad reviews which will greatly hurt sales. A bad cover will also hurt sales because it will look amateurish and wont catch anyone’s attention.

If you don’t know how to write or don’t enjoy it, you can use the money to hire ghost writers to write the book for you. This is very similar to hiring article writers except it costs a lot more – usually around a few hundred dollars for a book. Be very careful with who you hire and make sure they are a decent writer or your book will get bad reviews and your sales will suffer. Some places to find ghost writers are elance.com or ecopywriters.com

So there you have a number of ways to reinvest your online income and make even more money. Hopefully these tips will point you in the right direction and get you on your way to increased earnings.

Fore more information about money management for teens, check out our article Teens and Money.

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