Excerpt from a YouTube interview ("Greatest Investment Vehicle in the World" featuring Dan Lok and Sabri Suby) discussing how business owners commonly view advertising as a cost on the profit & loss statement versus an investment. Sabri Suby contrasts low returns from bank deposits (1–3%) and typical real estate (~12%) with much higher advertising returns, giving examples such as 800% return and an example where $1 invested returns $8. The exchange emphasizes reinvesting in advertising when a profitable channel is found.
Questions this video answers
Between 1% to 3%.
About 12% (noting this is a general example).
He cites that it's not uncommon to get an 800% return on advertising dollars; he also gives an illustrative $1 -> $8 example.
Talk to us a little bit about. I want to ask you this so when you work with a client, I can share the story where it's a client that went bad, that they don't listen, or it's a. It's a wrong fit. Give us an example of that then. I'll give you.
Yeah, I think that typically what happens is if you look at most businesses, Dan, like, they look at advertising as a cost on their P and L, right? They're like, yeah, look at this cost. Like, how can I do something to make this bill smaller? Right? So they're like, they go to their accountant and their accountants, like, have you lost your mind? Like, you're spending so much money on marketing. Let's just chop that cost off and your business is going to be so much more profitable. Right. And that's the mindset shift of, like, people don't understand that. Like, you know, if you look at, for instance, like, if you've got a bunch of money as a business owner, which I hope you would have, and you've got a sitting in the bank account, like, depending on what country that you're in, you're going to be earning between 1 to 3%, right. On that money, if you're lucky, meaning you give a dollar to the bank and they give you a dollar and three cents back. Or even real estate, like, typical real estate investment. Like, I'm not talking about, like, buying crappy homes and doing them up and flipping them. I'm talking about real estate as an investment vehicle. Like, typically, it's like 12% returns, right?
In my city, a lot less.
Exactly. So, and then if you look at advertising, it's not uncommon that if you find something that works that you can basically get an 800% return on your advertising dollars. So the thing that I see is that with the clients of ours that, you know, it's kind of like banging their head up a brick against a brick wall for them to get this thing where it's like, okay, we're putting $1 into this machine, right? There's a vending machine at the end of the street of where your business is located. And we've walked down there together and I've shown you years, and we've put $1 in and $8 has come back out. What do you think that we should do now?
Yes, put it back as much as possible.
Exactly. It's like a feedback loop that accelerates in volume where they don't look at it that way. And they're like, well, you know, I think I should just spend less on it. It's like, no, no, no, no, no. Like, this is the fuel. This is the gasoline, the accelerant you put on the business to accelerate. Accelerate it. And you need to put that money to work. That thing is a workhorse. And if you can put some money into a machine and it multiplies, like, you need to keep doing that until you find the breaking point where it no longer is as lucrative to keep doing that. Right? And that's the thing that most people don't do. Like, they don't look at their business like this investment vehicle and this machine that they got to kind of put, like, grease on the wheels and keep the thing moving. So the clients that I've seen as, like, we get some immediate wins, we're multiplying their money, and then their accounting gets in their ear, and they decide that they kind of want to, like, taper off and not be so aggressive on marketing, and that's when it all kind of goes pear shape. Hey, guys, if you enjoyed this video, make sure that you click the like button and subscribe. We're dropping a video on YouTube every other day, and if you've got any questions about any of the content that I covered in this video, just basically leave a comment with heysubri in the comment section and every wiggle also trying to go through all those questions and get them answered. So go ahead, click subscribe, and we'll see you in the next video.
