Making money.

The earning season is drawing to an end. But even before it began, we already knew that a lot of companies were in big trouble. Their dividends told us.

Historically, far more companies have raised their dividends as opposed to cutting or suspending them. But in the first quarter of 2009 - for the very first time since 1955 when Standard & Poor’s started tracking this - the ratio reversed. For every three companies that raised dividends, four cut them.

This is yet another red flag indicating how tight credit still is.

But how about those dividend hikers?

Many raised their dividends by 5 to 10 percent or more this past quarter. And you can even find some - including Shell and AstraZeneca - that have upped their dividend payments by over 10 percent.

Raising dividends in this period of tight credit and slumping demand is either a huge bullish statement on the prospects of the company in question or…

The biggest con job this side of the Madoff scandal.

Occasionally I find a dividend hiker I don’t like. For example, General Dynamics raised its dividend last month but also announced that it would be laying off 12 percent of its workforce. This is not a company confident about its future earnings growth.

But I’ve found that 98 percent of dividend hikes are legit - made because the company has deep reserves of cash and solid revenues.

Companies like that are good investments right now. You’d be getting a double bang for your buck: increasingly big dividend checks and share prices poised to go up.

[Ed. Note: You can read the investment advice and musings of Andrew Gordon every day in ETR's sister publication Investor's Daily Edge . ]

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What products and services sell best in a recession?

Hint: This is not a trick question. The answer is the one that immediately popped into your head when I asked it.

Before you started over-analyzing this…

The products and services that sell best in a recession are the cheaper ones. That’s right - the ones that cost less.

I recently read in a biography of Milton Hershey that he believed his business was recession-proof and depression-proof because he sold an affordable product. He reasoned that, even if a person couldn’t afford new shoes or a new car or a vacation, they could always afford a nickel for a Hershey’s chocolate bar. (That was the price in those days.)

Milton Hershey was right.

According to an article in Ad News, as the economy continued to tank in the fourth quarter of 2008, the Hershey company increased its advertising budget by 23 percent. And as consumers switched from expensive premium chocolates they no longer felt they could afford to Hershey’s, the company’s net income for the fourth quarter of 2008 rose 51 percent to $82 million.

Similarly, with the restaurant business in its worst slump since 1991, McDonald’s worldwide sales rose 7.1 percent in January 2009. Diners may not be able to afford steak anymore, but they can still afford a Big Mac.

I have found the same thing - consumer preference for lower-priced goods and services during an economic downturn - to hold true for the two little businesses I run: information marketing and freelance copywriting.

In my online publishing business, my low-priced products are e-books selling in the $19 to $79 range. My mid-range products are DVD and audio CD albums selling in the $100 to $150 range. And my high-end products are multimedia programs selling in the $300 to $1,000 range.

In recent months, my customers have clearly been telling me that (a) they are worried about money, (b) they really appreciate my reasonable prices, and (c) for now, they prefer offers for low-priced products.

They are not asking for special discounts or “recession sales.” They just want me to focus on offering products that sell for under $100, which seems to be the magic recession-proof price point for my market.

Whenever I advertise mid-range or high-priced products to my customer list, I always get at least one e-mail from a reader telling me she wants to buy the product… but can’t because she has lost her job!

If you are an information marketer, I suggest that, rather than fighting this trend, you accommodate your customers by:

• Expanding your product line, especially with the lower-priced products (like e-books).

• Offering your readers more free content (such as special reports and teleseminars).

• Bundling products into packages that enable customers to get related materials at handsome discounts (e.g., buy two e-books, get the third one free).

I am also finding that offering low-priced service options works for my freelance copywriting business.

To make $10,000 as a freelancer, you can either do one $10,000 project or five $2,000 projects. These days, I am doing a lot more $2,000 projects for clients who want to continue their marketing but are focused on controlling costs.

For instance, I am saving my clients money by helping them do more marketing online and a bit less offline. We are also using marketing methods that can be tested at minimal cost before rolling out the campaigns (e.g., small test mailings of 1,000 instead of 10,000).

One thing that has worked especially well is a new service bundle I call the “Starter Package.”

Normally, I charge $500 an hour for consulting. With a 10-hour minimum, payable in full in advance, that works out to $5,000 - affordable in normal times, not so affordable during an economic crisis. With the Starter Package, I offer new clients 90 minutes of my time for a flat fee of $750.

There’s no reduction in my hourly rate. I merely allow people to start working with me for a lower initial commitment.

I picked 90 minutes deliberately. Not only is it enough time to give prospects a taste of how my advice and copy can benefit them, but it comes in at a price point under $1,000. And that is within the comfort zone of a new client who doesn’t know me all that well.

More important, the Starter Package shows prospects that I empathize with their desire to cut back on spending and have designed a service to accommodate their smaller budgets.

Interestingly, what usually happens is that, after reviewing the Starter Package offer, prospects call me to get a quote for the full service they really want. And more often than not, that’s what they choose to go with.

So while I don’t actually do a lot of copywriting and consulting under the Starter Package arrangement, it makes prospects more comfortable with me as a vendor who respects their budget concerns and limitations. And that’s been keeping my freelance business active and profitable.

[Ed. Note: Bob Bly is a freelance copywriter and the author of more than 70 books. To subscribe to his free e-zine, The Direct Response Letter, and claim your free gift worth $116, click here now.

It IS possible to make sales during a recession. As Bob Bly explained, you need to know what to sell... but you also need to know HOW to sell. Tomorrow morning, we're unveiling a brand-new power-packed program that will give you everything you need to become a master of ultra-profitable sales. Keep an eye on your inbox for this limited-time opportunity.]

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When starting a small business, your first steps should be researching your target market, developing a marketing plan, and testing offers. In other words, taking action to turn your business idea into a real business by making sure you can sell your products at a profit.

Unfortunately, many first-time entrepreneurs let their anxiety about such things as tax codes, website security, and the right corporate structure sidetrack them into spending all their time on endless rounds of research.

Sure those things become important, but only after your business is up and running. And once the business is actually making money, you can afford to hire professionals (an attorney, accountant, Web designer, etc.) to worry about them for you.

It may seem like you are working on your business while you are trying to figure these things out for yourself. But as MaryEllen Tribby, ETR’s publisher and CEO, points out (often in her “tough love” comments to attendees at our conferences):

“Instead of helping you get ahead, these things could actually be preventing you from achieving the success you want.

“Whenever you think you MUST do something to help get your business started, ask yourself, ‘Will this help me achieve my marketing goals?’ If the answer is no, it may not be worth worrying about it.”

[Ed. Note: With ETR's 5 Days in July business-building conference, you may not learn much about advertising laws or accounting practices. But you WILL get a comprehensive education in starting your own profit-producing Internet business. Get the details here.]

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It’s often said that you can use certain sales messages over and over because, let’s face it, your target market is a marching army. Over and over, they revisit the same points in life… they discover the same needs and wants… you show them how to satisfy those needs and wants… and the cycle just repeats.

That may be only half true. 

While a lot about selling never changes, consumer expectations can change quite a bit. Take today’s “lifestyle” cutbacks, thanks to the economy. What feels like “cutting back” to today’s crowd is actually a step up in living standards when you roll back to nearly 30 years ago. On a more subtle level, that’s even true when you roll back to just 10 years ago… or five years ago… or a couple of years ago.

Modern consumers expect more. In some ways, they also expect to work less hard to get it. This just goes to show you that the promises you’ll make in your sales pitches can’t remain static. They have to keep getting bigger. Or at least sounding bigger.

Whether this is a good thing or a bad thing, I can’t tell you. After all, innovations happen when everyone from big companies to mom-and-pop outfits are pushed to compete.

On the other hand, it can go only so far. There’s only so much luxury and service we can sell before the expense of it breaks us… or drains the consumer’s bank account and available lines of credit.

So what happens when no marketers can afford to offer more… and no customers can afford to pay for it?

A while back, two marketing experts saw a whole new consumer trend coming down the pipeline. After the wake-up call. After the bust. After the recovery.

The boomers, they predicted, would sideline their ambition for a life of luxury and convenience… and start yearning for something a little beyond the material. When they said that, I figured they’d gone a little loopy. But now I’m wondering… could they be right?

Gene Schwartz once wrote, in his landmark book Breakthrough Advertising, that people’s superficial desires weren’t all that tough to spot.

But only the best marketers knew that all people share an even deeper, second “secret” desire.

It’s the desire not just for products, services, or pitches we “like”… but a deeper desire for products and services that help us flesh out our own idea of who we are. Not to mention who we could be. And maybe most important of all (to us), who OTHER people think we are.

I’ve long said - and I wasn’t the first - that the deepest desire shared by most prospective customers (a.k.a. people) is the desire to be loved and respected. Or at least respected.

In good times, when it feels like everyone is getting richer and living larger than the next guy, respect comes from living like a king. Piling up stuff. Earning luxuries. Getting pampered.

In tougher times, character starts to matter as much… or more. Austerity becomes honorable. Excess, an embarrassment. Security, prudence, sound judgment - those become the hot sellers.

We start rolling back to the fundamentals. Looking for answers. Or at least looking for people who seem like they have the answers… and the substance to back them up. Credibility, always important, becomes even more so.

Could it be that this is where the boomers - the biggest market in the history of capitalism and the driving force behind more than six decades of economic growth - are headed next?

Maybe.

Look, for instance, at how many things have trended back toward fundamentals. People walk more, use glass instead of plastic, cook at home, eat healthier, cut up their credit cards.

It might well be out of necessity. Yet even necessity has a way of wooing her bedfellows. By simplifying, we may very well find ourselves in a position to rediscover the things that matter.

Is that why advertising hype is dead? Is it why “relationship marketing” has become the most powerful force online? Is it why so many marketers love to talk about “brand,” not realizing that brands don’t matter until a consistent relationship of quality has been established?

Your guess is as good as mine.

Personally, I’m guessing yes. 

[Ed. Note: To get more of copywriting expert John Forde's wisdom and insights into marketing (and much more), sign up for his free e-letter, Copywriter's Roundtable, at www.copywritersroundtable.com. Or send an e-mail to signup@jackforde.com. Get a free report about 15 deadly copy mistakes and how to avoid them when you sign up today.

Knowing what your customers want, what keeps them up at night, is one of the keys to success. Discover how to identify products the market is hungry for, create a website, and get prospects to buy at ETR's upcoming 5 Days in July business-building event. You will set up your own Internet business... and discover how to set yourself up for income for life. Find out more here.]

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Consider the following sentences:

• “Whey protein has been proven through scientific research to be very beneficial….”

• “Yet few of them understood the investments they held, many of which had proven to be junk.”

• “It’s not as if this exact rumor hasn’t been proven false time and time again….”

In each of the above examples, proven should be proved.

According to Bryan Garner in Garner’s Modern American Usage“Proved has long been the preferred past participle of prove. But proven often ill-advisedly appears….” He goes on to explain that proven “properly exists only as an adjective,” as in “a proven success.” An exception is traditional legal terminology, e.g., “innocent until proven guilty.”

• • •

Follow-up: In a recent column, I pointed out that the word antisocial implies hostility and aggressiveness, so someone who simply wants to be alone should be described as unsociable. “What about the word asocial?” a reader asked. “How should that be used?”

Here’s my answer: The prefix a- means not, and asocial can mean both unsociable and antisocial. Because of that ambiguity, I recommend that you avoid it. Choose unsociable or antisocial, depending on which meaning you want to convey.

[Ed Note: For more than three decades, Don Hauptman was an award-winning independent direct-response copywriter and creative consultant. He is author of The Versatile Freelancer, an e-book recently published by AWAI that shows writers and other creative professionals how to diversify their careers into speaking, consulting, training, and critiquing.]  

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The summer of 2009 will mark two years of the housing crisis being in full force. Nothing in recent times has wreaked as much havoc on the lives of homeowners. On the other hand, nothing else has created as much opportunity for you to make a fortune in real estate. Even if you have bad credit or no credit, even if you don’t have any money to invest.

Sound too good to be true? Give me a few minutes and I’ll make you a believer.

Today, I am going to give you two ways to bring in extra income (or build yourself a small fortune), starting this week, in spite of the economy.

Strategy 1. It’s a Numbers Game

One of my students, Matt, impressed me so much that I began partnering with him on investments. And we evolved a system that works like a Swiss watch.

You start by looking at lower-priced houses, $150K and under. You are going to buy them for about half of what the fair market value is, and you are NOT going to do anything nasty to achieve this. The catch is, you need to make about 25 offers in order to get one deal. You want to focus on houses that are already listed below fair market value - and the longer they have been on the market, the better.

Your formula for this: Fair Market Value x 60% = Your Offer

In other words, for a house that has a fair market value of $100K, you would plug in $100,000 x 60% = $60,000. That would be your maximum offer, give or take. If you have good credit, banks will very likely lend you the money because you’ll be getting the property for so much less than market value.

Matt does this and, in most cases, he rents the property out for cash flow. You could also flip it to another investor. Buy it for 40 percent off; sell it for a 20 percent profit. If you find a property that is already discounted 20 percent, you offer less - say, 30 percent less than the asking price. Matt offered 10 percent less on a bank-owned house that was already at 50 percent and it was accepted. He had a buyer lined up before he closed on it, and presold the house for a $20K profit.

By the way, only 10-20 percent of the properties we buy are foreclosures. The rest are owned by people who just want to get out immediately.

If you don’t have the money or credit to use this strategy, find private money. There are plenty of people out there who would love to earn more than their 401(k) or IRA is delivering now, and would be delighted to invest in properties where you’ve done all the legwork.

Remember, it’s a numbers game. You’ll need to make 25 offers (on average) to get one deal.

Strategy 2. Control With Contracts

This strategy allows you to put cash in your pocket in 5-20 days. Ideally, you’ll have a few people lined up to help you when you need them: a realtor to help you find deals, a broker to help you get your buyers approved for loans, and a lawyer to draft/okay your notes/contracts.

You also have to create a list of people who buy investment properties. To find them, simply run ads in your local Pennysaver, put out flyers advertising “Houses 50% off,” get phone numbers from “I Buy Houses” signs, check out REI (Real Estate Investing) Clubs, etc.

Then you build a list of potential tenant-buyers - 10-15 people who would be interested in a lease-option deal (renting with the option to buy). Again, use Pennysaver ads and flyers. In addition, advertise on CraigsList, tell your realtor that you will do some rent-to-owns, and post signs at apartment complexes, bookstores, convenience stores, etc.

And then it’s time to find the properties.

You’re looking for motivated sellers. People who are behind on their payments are perfect. Find them with the same advertising techniques mentioned above, using phrases like “stop foreclosure” and “debt takeover.” Get expired listings from your realtor, and look for “For Sale by Owner” signs.

You’re also looking for houses that don’t need much in the way of repairs. You’ll wrap the cost of necessary repairs into the down payment you ask for from your investor or tenant-buyer, so get an idea of what you might have to pay for painting, carpeting, roofing, door and window replacement, etc.

Now you put it all together.

You get the houses under contract as cheaply as you can. (Check comparable prices on homes in the neighborhood on sites like zillow.com and realtor.com and in local real estate listings.) You tell the sellers that it will take you anywhere from 5 days to 60 days to pay off their notes because you are going to wholesale or lease-option the property. And you write the contracts as “and or assigns” so you can turn them over to someone else.

As soon as you get a property under contract, call the people on your investor list. Tell them all about the house. Mark up the price a little (or as much as you can). But make sure they can still make plenty of money on resale or they will move on to another deal.

If you cannot flip the property to an investor, go to your tenant-buyer list. Pick the one with the most money for a down payment or the best credit. (Your mortgage broker will help you.) Offer to put that person in the house with a 12-month lease-option. Let as much money as you can stand go toward the down payment for three months or so. The mortgage company likes that - and you should have their mortgage done in 3-6 months.

Basically, none of it is your money. You use the tenant-buyer’s money to get the house.

Go and Invest!

I always look for positive solutions to problems. That is why, instead of giving in to the gloom and doom of this down economy, I look at the current real estate market as an opportunity to make money while helping others.

Let’s say property values in your area are down 20 percent. Put out 25 offers at around 60 percent of market value. (If a property is listed at $200,000, maybe you offer $120,000.) In my experience, you can expect one of those offers to be accepted. Now you have a house with a fair market value of $200,000 that you can purchase for $120,000 - and you can easily find someone who will want to purchase it for $145,000, because that is still $55,000 under value.

You have just made $25,000 without risking any of your own money… and you have helped someone else find a great deal.

[Ed. Note: Dean Graziosi has been an active real estate investor for over 20 years. His first two books, Totally Fulfilled and Be a Real Estate Millionaire, were New York Times bestsellers. And his newest book, Profit From Real Estate Right Now, is already out-selling his previous book - which was the fastest-selling real estate book in America.

Dean offers proven programs that teach people to succeed as investors, starting with little or no money, credit, or experience. His free online investors' website and free training calls reach thousands of people every week. For more information, please visit www.deangraziosi.com.]

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Most of us think that bad things can never happen… or that they only happen to “the other guy.” But what happens when you become “the other guy”?

You - and I - need a “back-up plan.”

This could be:

1. Investing prudently and building your net worth to the point where you can live off your investments.

2. Learning a second skill or profession.

3. Creating and selling a line of products - anything from candles and perfume to exercise videos and how-to books.

4. Collecting a sizeable inheritance that will enable you to live the life of a gentleman or lady of leisure.

5. Marrying someone with a good income who will support you in the style to which you would like to become accustomed.

Of these options, my own back-up plan is #3 (mainly because #4 and #5 didn’t pan out).

A few years ago, I began to think, “What if something happens that makes me unable to continue making a living as a freelance writer?” So I started my own Internet marketing business, creating and selling information products - e-books, audio programs, and videos - online.

Today, my little Internet marketing business generates a six-figure income for me… yet I spend only an hour or two a day on it!

Do you have a back-up plan? If not, do you intend to put one into place soon?

[Ed. Note: Bob Bly is the author of more than 70 books and is an undisputed master of the art of selling. Subscribe to Bob's free e-zine, The Direct Response Letter, and claim your free gift worth $116.

If you don't have a back-up plan, here's an idea: Do what Bob did and set up your own Internet business selling information products. ETR can help you get started. Learn the details here.]

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Conventional buy-and-hold stock investing is not working in today’s market. Trading E-Minis is a great alternative, because you can take full advantage of the market’s volatility.

You can easily make money in a market that is going up or down. You can, for example, make a bundle if you go “long” or buy an E-Mini contract and the market goes up. And if you go “short” or sell an E-Mini contract, you can just as easily make money when the market goes down. This adds an entirely new dimension of opportunity for investors.

An E-Mini is an electronically traded futures contract on the Chicago Mercantile Exchange (CME) that represents a smaller version of a standard futures contract. E-Mini contracts are available on the S&P 500, Nasdaq 100, S&P MidCap 400, and Russell 2000 indices. One example: The E-Mini S&P 500 futures contract is one-fifth the size of the standard S&P 500 futures contract.

E-Minis have a low margin requirement, which makes trading them easy and affordable. You can get started for as little as $500 per contract. And because standard stock and index options currently have high premiums due to market volatility, your leverage and profit potential is higher with E-Minis.

E-Minis allow investors with small amounts of risk capital to participate in the Dow and S&P 500 at a fraction of the cost of purchasing the actual stocks outright. You would have to pay thousands of dollars in commissions alone to buy all the stocks in the S&P 500, for example. But by buying an E-Mini S&P 500 futures contract, you can participate in all those stocks for a commission of less than $10!

Bottom line: Start trading E-Minis if you’re looking for an exciting, highly versatile, efficient, and economical way to capitalize on the daily swings in the stock market.
[Ed. Note: Ted Peroulakis is a writer and analyst with Investor's Daily Edge (IDE), ETR's sister publication. Find out more today.

The best way to learn the ins and outs of trading (and making huge gains with) E-Minis is with the Velocity Strategy, developed by IDE editor Rick Pendergraft. Using this simple strategy, he was able to make 99.15 percent gains in 2008. Learn more here.]

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Although the markets of the BRIC countries  (Brazil, Russia, India, and China) have crashed along with those of the rest of the world, these countries have tremendous growth potential - which could mean investment opportunities for you.  

Their growth potential is due to several factors, including abundant natural resources, low labor and production costs, and increasing foreign trade.

I gave you an overview of Brazil and Russia yesterday. Today, let’s look at India and China.

India has great long-term potential due to its stable economy and position as a low-cost producer of manufactured goods. And consumer demand is exploding as India’s standard of living increases. Because so many people in India speak English, many companies from English-speaking countries have sales and service operations in India. And India’s highly skilled and educated workforce has led to a strong software development industry. 

The best way to play India: PowerShares India (PIN). This exchange-traded fund holds a nice basket of Indian stocks and seeks to mirror the Indian stock market as measured by the Indus India index. 

Although China still has a communist dictatorship, the country is open to free trade and capitalism. China is the main outsourcing location for manufacturing today. Labor is still very cheap, and logistics between China and the U.S. are very good. It will remain the top low-cost producer of manufactured goods for years to come. Furthermore, with the Chinese enjoying a higher disposable income, domestic consumption is exploding. As a result, retail sales are hitting record highs. 

The best way to play China: iShares FTSE/Xinhua China 25 Index (FXI). This exchange-traded fund holds a nice basket of Chinese stocks and seeks to mirror the Chinese stock market as measured by the FTSE/Xinhua China 25 index. 

[Ed. Note: Investment expert Ted Peroulakis and 8 of his fellow moneymakers will be gathering in Miami this June to share exactly how you can use their top recommendations to make a fortune in today's market. Get all the details here.]

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When I began searching for the secrets of success many years ago, I discovered something interesting: Success leaves tracks.

So if you want to be a big success, look for those tracks. Find out what successful people in your field are doing, and do the same things. You will shorten your learning curve and accelerate your results.

That’s what I did.

When I studied the interviews, speeches, biographies, and autobiographies of successful men and women, I found that they all had something in common. They were all described as being “extremely well-organized.” They used their time very, very well. They were highly productive and they got vastly more done than the average person in the same period of time.

I followed their paths and it made me who I am today.

Here are two things you can start doing immediately to put this idea into action:

First, develop a plan to learn from the actions of the experts in your field. This can save you years of hard work.

Then, study everything you’ve learned and choose one of those things - the most important one - to implement. Decide how to do it. Then do it.

[Ed. Note: With Brian Tracy’s Flight Plan, you can discover how to achieve more, faster than you ever dreamed possible. You also receive 2 BONUS CDS!

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