I’ve always been intrigued by the concept of compounding money to scale your income and wealth.
Listen to this, as an interesting theory…
If you take $1. Yes, just a single dollar.
And you find a way to invest it into something, which makes you $2 in return (that’s double your original investment), then you have your original dollar plus a second dollar in profit.
Y’all with me so far? 😉
Now rather than running off down to the dollar store and buying two awesome shiny things, you take that two dollars and re-invest it the following month, to double your money again.
That turns your $2 into $4.
In the spirit of your new found optimism, you now re-invest that $4 (that’s the original dollar you invested + everything you have made from that investment) into something which will double it again the following month and you’ve made a whole $8.
See where I’m going? That $8 becomes $16. Then $16 becomes $32. Then $32 becomes $64 and just 7 months into this process, you’ll have made $128. That’s a $127 profit on your original investment!
TIME TO RETIRE!!!
Okay, maybe not.
This 7-month reinvestment period seems like a shit-ton of work for a measley $127, right? Especially as you haven’t (yet) taken a single penny of it to enjoy for yourself!
But the interesting part about this whole thing is the way that ‘compounding’ has a cumulative ripple effect and picks up momentum.
In other words, the more this little game plays out, the faster you make money.
So, starting with your $1…
…and doubling your money each month…
…for just 20 months…
…will result in a payout of…
Yup, that’s over $1million in profit in under two years – starting with a $1 investment.
Don’t believe me? Let’s work it out together…
Month 1: $1 x 2 = $2
Month 2: $2 x 2 = $4
Month 3: $4 x 2 = $8
Month 4: $8 x 2 = $16
Month 5: $16 x 2 = $32
Month 6: $32 x 2 = $64
Month 7: $64 x 2 = $128
Month 8: $128 x 2 = $256
Month 9: $256 x 2 = $512
Month 10: $512 x 2 = $1,024
Month 11: $1,024 x 2 = $2,048
Month 12: $2,048 x 2 = $4,096
Month 13: $4,096 x 2 = $8,192
Month 14: $8,192 x 2 = $16,384
Month 15: $16,384 x 2 = $32,768
Month 16: $32,768 x 2 = $65,536
Month 17: $65,536 x 2 = $131,072
Month 18: $131,072 x 2 = $262,144
Month 19: $262,144 x 2 = $524,288
Month 20: $524,288 x 2 = $1,048,576
(I always got told to show my ‘workings out’, when I was at school!).
Pretty cool, right?
Even better, this scales up, perfectly…
If your starting investment is $100 (that’s 100x more than we just discussed) the end result is 100x bigger. That’s a finishing return of $104million.
(And it is a BIG but) —
Whilst it’s a NICE theory – and it’s always been intriguing for me – it’s pretty hard to put into practice.
I mean, how can you actually take $1 and double it to $2? And, even more complicated, how can you do it EVERY month.
So, whilst $1 to $1mill in 20 months is a beautiful concept, for most people it’s little more than a pipe dream. Something fun to teach people for a chuckle.
Then something hit me.
Something VERY exciting…
I was talking to a couple of my Internet marketing chums about Facebook advertising.
See, I’m currently working on building a simple sales funnel consisting of:
– a free gift;
– a simple one-time-offer;
– an upsell.
The plan, is to drive evergreen Facebook ads traffic to it, identify the perfect target audience, optimize the shit out (technical term) of the ad and the funnel, so that for every $1 I invest in Facebook ads, it generates $1 in return.
That means I get to build my list (of customers and subscribers) for free.
In other words, the amount of money that I make in sales will cover the cost of the traffic.
No profit, but we all know that the “money is in the list”, right?
As the list grows, I can then continue to profit by promoting related paid offers and selling those new customers and subscribers into my higher ticket and more expensive programs.
Nothing groundbreaking. Standard IM business model. Yada yada.
Imagine if I then continued optimising that funnel and refining things until every $1 invested in Facebook ads was to generate $2 in revenue?
In other words, $100 in ad spend would generate $200 in sales.
Guess what? This puts us in a position to do EXACTLY what I just described… for real.
You put $100 in and generate $200. Then, instead of spending any of that money, you re-invest it all.
That would turn it into $400. Then that $400 becomes $800 and so on.
A REAL, provable and scientific way to implement this compounding idea.
After 20-months of following this plan, that original $100 investment would become…
That’s ONE HUNDRED AND FOUR MILLION, EIGHT HUNDRED AND FIFTY SEVEN THOUSAND AND SIX HUNDRED DOLLARS as it would appear on a cheque!
And creating a funnel which turns $1 in ad spend into $2 is NOT that difficult.
It takes work, focus, dedication, action and precise tweaking.. but it’s far from impossible.
You’ll probably have to spend a few thousand dollars in ads to get it to that point, but hey, what’s a few thousand dollars from $104million?
Want a more ‘quantifiable’ example? Okay, consider…
You have a paid front-end offer which converts at 5% from Facebook ads traffic and sells for $27. This has an upsell which converts at 30% and sells for $47.
If you were to drive 1000 targeted visitors from the Facebook ads to your funnel, you would get:
50 x $27 = $1,350 in sales
12 x $47 = $705 in sales
Total sales revenue = $2,045.
That means you could optimize your Facebook ads to cost $1 per click and you would get your 1,000 visitors for $1,000 – except you’d be making $2,045 in return.
Now this is just a casual example based on ‘made-up’ figures, but these numbers are NOT unrealistic, if you put a little time and effort into learning each stage of creating and optimizing good sales pages, profitable Facebook ads strategies, etc.
Once you have the basic tools and strategies, you can use this simple maths to reverse engineer a way to build this ‘compound’ strategy into your business.
Then, once you have something which turns $1 into $2 and then $2 into $4…
…you have something which can turn $100 into $104million in under two years.
Here’s my new project and challenge. Are you up for trying it out for yourself?
Rob J. Temple
PS. Wait a minute, imagine if you built a funnel that turned $1 ad-spend into $3? Holy shit…