When it comes to building wealth there are two things that I am well aware of. The first is that in order to become wealthy you must invest and the second is that some investments are better than others. With that being said, in this article, I want to go over the best investment I’ve ever made and how I turned $1,000 into $100,000 in just three years time.
Now before I get into all of the details of this investment I first want to share the back story of what prompted me to make this investment in the first place. Roughly five years ago, I began my professional career. Working in management consulting, I was grinding 50 to 60 hour weeks and while you would assume that my compensation would be aligned with all the hard work I was putting in, quite frankly it wasn't. Every two weeks I would receive my paycheck and wonder where the other half of it was. Needless to say I wasn't exactly swimming in money. In fact, shortly after starting my career I moved into an apartment with my girlfriend. While it was definitely a fun experience at the time, the accumulation of costs such as rent, groceries, car insurance and of course utilities was a lot to bare on my meager salary. If I’m being honest, this living situation left me with no disposable income at the end of every month. Having gone from living at home where I was able to save a good amount of money every month to being in a position where I was barely scraping by, this moment in my life was a rude awakening as to how hard it can be to financially support yourself in the real world.
After living paycheck to paycheck for a couple of months, I couldn't overcome this sense of entrapment and the thought that if I continued at this rate I would never be able to afford to live the lifestyle I desired. I thought to myself that even if I could save a couple hundred dollars a month, a whole year’s worth of savings could be erased in an instance by an unforeseen event. However, rather than feeling sorry for myself, I decided to take action but the investment that I decided to pursue was well outside of the norm.
The investment that I dove into at the time, which has now become the best investment that I've ever made, is starting a YouTube channel. Now I know this is not a traditional investment however it still maintains similar properties to investments that you would normally think of. In the case of a YouTube channel, your inputs are time and in many situations money and the hope is that these inputs will yield you sizeable returns when your channel takes off. You can liken this to investing in the stock where you put up an initial amount of money and hope that the stock rises in value over time and that when it does, you can collect your profits and move on.
Now, you may be wondering what made me choose YouTube as my saving grace when it came to improving my financial position. When I look back, I think this decision surprised a lot of people in my life because as someone who has been traditionally trained in the accounting field, one would think that I would be investing in assets like stocks, bonds or mutual funds rather than putting my money into an online business. However in order to soothe the emotional distress I was feeling after working 10 or more hours every single day at work I would often come home and watch YouTube.
One day, I stumbled across a YouTube channel called Improvement Pill. Little did I know that these animated self-improvement videos would be the basis for an investment that would change my life forever. After watching a few of his videos, I came to realize that he had a devout following. His subscribers would leave comments of total admiration and love for not only the content but for the creator as well.
This devotion instantly made me think of Kevin Kelly's 2008 essay around the power of amassing 1000 true fans. The main take away from this essay is that if you can build a tribe of 1000 true fans, you can earn enough money from your supports to sustain yourself financially. With roughly a million subscribers at the time, I knew that Improvement Pill had already gathered his 1000 diehard fans and it inspired me to build my own tribe. This is when the Betterment Boss channel was born.
(The original Betterment Boss Channel Banner)
Since you’ve already read the title of this article, I think it's obvious how much money I've invested and how much I've earned throughout the course of my YouTube journey. However, you may be interested in what these initial start up costs were comprised of so I will detail those items now.
Luckily for me I had many of the components that anyone would need to start an online business. I had a somewhat powerful Dell laptop that was gifted to me by my uncle when I started college and I also had access to high speed internet. With those two bases covered off, the only other two items I needed to initially buy was animation software and a microphone. As I was starting my own YouTube journey, the animation software that was very popular at the time was Videoscribe. Fortunately, I was able to capitalize on a rare one time buying situation where I acquired a lifetime license to the software for just $150. With the software installed, I figured it would just be a matter of time until my channel started to take off. Boy was I wrong…
After recording audio on my iPhone for the first 10 or 20 videos I came to realize that my audio quality was simply too poor for anyone to remain engaged in my videos. This prompted me to consider shelling out some cash on a higher quality microphone. Therefore, I did what just about anyone would do and start watching microphone review videos on YouTube. I settled on the Blue Yeti and once I had a new and improved microphone I continued pumping out content.
However it wasn't smooth sailing from here. I literally had no content plan meaning that I would post anything from fitness and health related videos to general self-improvement content. Between my mediocre animation skills and my channels lack of clear direction, I spent over a year spinning my wheels and only gained about 100 subscribers. Now at this point most people would have quit. After sinking easily a 1000 hours or more into my YouTube journey and only gaining 100 people who wanted to watch my videos on a regular basis, it would have been easy to stop getting up at 4:45am in the morning and move on to another money making endeavor. However, hopping from one idea to the next never worked for me in the past therefore I remained steadfast in my pursuit of YouTube success and instead decided to double down. This is where the other $700 of my initial investment came into play.
I knew that I needed to get expert advice on how I could improve just about every aspect of my channel. From the video topics to the channel’s branding, the whole situation needed to be overhauled. Well, who better to get advice from than the channel that inspired me to start this ambitious journey in the first place!
I reached out to Improvement Pill and we discussed setting up a coaching call. For $500, I got a one hour Skype call, a 30 minute analysis session of my YouTube channel as well as the ability to gain feedback on my new changes within the first 90 days of our call.
While this was a ton of money to be investing into an endeavor that was bearing no fruit, I had to have some faith that things would work out which is traditionally the case in any investment scenario. After getting feedback, I did start to notice some improvements on my YouTube channel. However after about another year of grinding out more time on YouTube, I still wasn't anywhere close to where I wanted to be. Around the middle of 2019, I decided to seek further advice and reached out to a new up and coming channel called Mitch Manly. Luckily, this coaching call was slightly less expensive and only cost me around $200 which may be because he gave me the fellow Canadian discount. At this point my total investment was $1,000 into my YouTube channel and luckily with all the advice that I had been provided, my YouTube channel did eventually take off and as they say the rest is history.
Now, those of you reading this article maybe saying to yourself, “Well Adam, what about the time you invest into buying your channel, isn’t that a cost too?”. While I do highly value my time, at the end of the day, the reality is that our time is worth absolutely nothing. In fact, as Gary Vee puts it, “Your time ain't worth shit”. I know this sounds a little harsh but it's totally true. Most people spend the bulk of their free time playing video games, watching Netflix or mindlessly scrolling through social media, therefore when I consider that being the alternative to dumping hundreds and probably thousands of hours into YouTube, the opportunity cost really didn't exist from a time perspective. Not to mention, during this YouTube endeavour, I was building numerous skills that I wouldn't have built if I was sitting on the sofa watching TV. These skills include how to network online, how to create a personal brand, how to tell better stories and how to remain resilient in the face of adversity. In fact, when it comes to adversity, I faced more than my fair share of it and now I want to dive into the struggles of this investment and how it compares to other more traditional investment vehicles.
Whenever you invest, there are two factors that you need to keep in mind. The first factor is financial stress and the second is opportunity cost. With a traditional asset like a stock, the financial stress component is pretty evident. The stock’s value rises and falls day after day and this can lead to financial stress as you wonder whether or not you've made the right investing choice. Then, there's opportunity cost. With opportunity cost, you need to be asking yourself what else could I be doing with the money that I've invested into this asset. In a traditional sense, you may ask yourself, “was it a good idea to invest in that ETF or should I have bought shares of a REIT instead?”
When it comes to investing in an online business like YouTube, the challenges are very similar in many respects but can be quite unique in others. For instance, there is still the financial stress like in a traditional asset because you don't know whether or not the money you've invested in your start up equipment will actually pay off. Not to mention, there is an opportunity cost given the fact that you may never gain traction on the platform and all that time invested may have been better used in pursuing other business endeavors. Therefore there definitely are some similarities between the investment I chose and more traditional ways of investing.
Beyond these two factors, I believe that YouTube presents its own set of challenges for those who create on the platform. For me, a lot of the adversity came from those in my social circles. Having to invest a ton of time into creating videos every single week, the commentary back from those closest to me was always the same. They would ask, “Adam, why are you wasting all your time on that computer making animated videos?” In fact, my parents would always rag on me for staying in on Friday and Saturday nights working on my YouTube channel rather than going out to meet girls or spending time with my friends. And when it came to dating my girlfriend at the time, well let's just say that me prioritizing making YouTube videos or over spending time with her did not bode well for our relationship. So in some way the biggest struggle I faced in this investment journey was to maintain belief that if I saw this endeavor through that it would pay off and I'm beyond happy to say that it has.
With that being said, let's now jump in to the screenshots of my YouTube analytics so that I can show you that yes I have actually earned $100,000 on the YouTube platform.
As you can see, You Tube has turned out to be a very lucrative investment. When you crunch the numbers you will come to realize that turning $1,000 into $100,000 is a return of 9900%.
I think you'd be hard pressed to achieve that type of return in most other investment vehicles. Speaking of other investments I want to share with you some perspective of how lucrative this investment been compared to some of the other investments I've entertained over the years.
When I was just starting my investing career, I began to buy individual stocks in Canadian oil and gas companies. Returns from these stocks typically ranged from about 5-10% but in some cases I had to report losses on poor investment choices. Since moving away from buying individual stocks and sticking to a consistent mutual fund investment plan my returns have averaged about 10%. Therefore, when investing in more traditional assets I've never even come close to the type of return that YouTube has offered me.
Now, how does YouTube compare to my second best investment to date? The investment I'm referring to is my education. If you're unfamiliar with my educational journey, I have a college diploma, a bachelor’s degree, a Master’s degree and a CIA and CPA designation.
My costs for each are as follows:
· College: $9,000
· Bachelor’s Degree: $20,000
· Master’s Degree: $25,000
· CIA & CPA: $7,000
If you sum up all of my educational costs, the investment has been roughly $60,000 to date. This investment was over the course of roughly 7 years and since starting my professional career I've earned roughly $300,000. This equates to a return of 400% and while it is still very respectable, it pales in comparison to how lucrative it can be to invest in an online platform like YouTube.
If you were to ask me whether or not I would recommend others to make this same investment, I would say yes 1000 times over. I think that beyond YouTube, the Internet offers many avenues for making a ton of money. But sticking to the example of YouTube, here are a couple of reasons why I think it's a great investment opportunity if you're willing to put in the time.
The first reason that YouTube makes for a great investment is that it really doesn't cost that much money to get started. If animated videos aren't your thing and you are more interested in being on camera then likely the smartphone you already own will be more than sufficient in getting you started. Perhaps the only extra things you would need to buy is editing software and a microphone which will probably cost you less than $500. Next, there really isn't anything overly complex how about starting a YouTube channel. Sure, there are some back-end techniques that you should understand if you want to see faster growth on the platform, however, if a 7 year old can make millions of dollars reviewing toys then I think you can figure out how to make a few thousand dollars with whatever type of YouTube channel you start.
As you've seen, YouTube can be very lucrative, but the sad reality is that most people will never invest in this way and I believe this to be the case for three primary reasons. First off, most people have never watched YouTube income report videos or have read this article therefore they probably have no idea how much one can make by producing and uploading videos to YouTube. Second, the majority of people are so preoccupied with their daily distractions like staying up to date on their social media feeds or being consumed by the news, that the thought of starting a YouTube channel and using it to grow their wealth never even crosses their mind. Finally, many people simply back the ability to delay gratification. They want quick wins and this is something that You Tube simply cannot offer. From January 2018 all the way until October of 2019 I made absolutely no money on the YouTube platform while I was putting in 40 hours or more a week into making videos. For most people, this is simply too much time to invest before seeing a return and as a result they will never be able to achieve the returns that many people have on the platform.
In summation, YouTube has been a great investment. It has allowed me to gain faith in my ability to build and sustain an online business, it has allowed me to create lasting friendships with my online social connections, it has taught me that I can achieve anything as long as I stick to it and finally it provided me a financial return that I can now use to further invest and grow my wealth. And that is the story of how I turned $1,000 into $100,000.