ABC Good Money Week 2 Pick Ideas Mail Bag

For those who are just joining us, I'm here with Ramit Sethi, ABC's personal finance contributor, as well as author of I will teach you to be rich in this block. Ramit is going to answer some viewer questions from our good money mailbag. All right, Ramit, thanks so much for sticking around. The first question comes from Michael, and he writes in asking, when do you give up on an idea? I've been working on several side projects lately. Some have borne fruit and some haven't. How do you decide that a project just won't work versus when it just needs more time and effort to perfect and spread enough? That's a very good question.

Good question. I like the way he's thinking because a lot of times we don't think about goals at all. I would suggest setting a goal to failure. Now, you might say, you know what? I want to give this project 100%, and in two months I want to have 200 customers or $2,000 a month, whatever the number is. Now, if you get to the two months and you have five customers or you're making $50 a month, you know that something's wrong. It's time to move on.

But how do you know you aren't setting an unrealistic goal in the first place?

That's a. You want to look at what other people are doing. You want to, if you're starting something like this, you want to make friends with other entrepreneurs, other people who have done something like this. And then you can sort of calibrate your goals.

So there is a friendly circle. It's not all competitive.

It's not all. No.

It's not like keeping your secrets close to you, Jess.

No. A lot of people are more than happy to share some of their insights along the way. That's how every, you know, the tide raises rising tide raises all. So people are more than happy to share information. Just ask them, like, hey, I'm starting out. I'd love some insight. Can I take you out to coffee?

Right. Perfect. Great. And so that gives you a sense of whether or not it's time to cut the cord.

That's right. And life is. Life is too short to spend time on a project that's just not working. So be prepared to cut the cord and move on if you need to.

And make those brutal choices sometimes. All right, Very good. Hope that Michael has lots of good luck there with his endeavors. Our next question comes from Jonathan P. Of Chicago, Illinois. And he writes in asking how do I choose between a more logical freelance idea for Example, Excel small business consulting versus strong interest area idea, cooking food and restaurants. Again, very good question, Great question.

If your goal is to earn more money, I would start with the idea that is most likely to generate revenue for you.

But Ramit, whose goal is not to.

Earn more money, no, that's not true. A lot of people start something just because they're passionate about it. They feel like someone has to hear what they've got to say. They just want to do it. So if the goal is to earn more money, start with that. But I'll tell you something about Jonathan's questions. I really like really clever people can sometimes take what's most likely to generate money and they can combine it with their passion. For example, with his question, I bet you there are restaurant owners who would love to have someone go in there, analyze their numbers, and say, you know what, you didn't realize this, but you're making a ton more money than you thought because of that.

So he can take that Excel small business consulting skill that he obviously has and apply it to the restaurant world. Yep, very good. You know, you actually, you bring up something which I think is sort of interesting because there are worlds where people tend to have strengths in one area, not necessarily in the other. And I'm not saying that restaurateurs or people who work in food don't have strong good skills, but artists, musicians, terrible at business.

So if you can go in there and help them, you can really add that other side of the brain that they're not. They usually don't operate with. So don't be ashamed to say, you know what, in general, artists probably are not the best business people. I could probably help them because I know something about business. That's a great way to earn money.

Fantastic. And if you're also interested in that world, some of that pixie dust might rub off on you.

And yeah, you can learn from them and they can learn from you.

Fantastic idea. All right, good luck. Jonathan P. Now we have a question from Erica, all the way from Singapore. And she writes in saying, I have two ideas for a niche, but I'm not sure which to go for. Either web design and development for freelancers and small business owners or ebook design for professionals in the fitness industry. Very specific. Any ideas there? What do you think?

Love that Erica is being specific. The more specific you can get, the more you can actually charge, believe it or not. For example, imagine that you are a new mother and you want a photo of your brand new, beautiful son. Who are you gonna go to? Are you gonna go to John Doe, the neighborhood photographer who photographs horses, humans and houses? Or are you gonna go to, you know, Rich Millington, who is the photographer that specializes in babies age 1 week to 2 months? You're gonna go to Rich and you're gonna pay him whatever he wants.

Very good point.

So this is a great question because she's getting really specific. I would suggest doing some research. Do your homework before you jump in with an idea and say, you know, are people offering these services for the freelance small business industry or are they offering these for the health and fitness industry? More competition is a good thing right now.

Why do you think that she has chosen the fitness industry? Do you think this is an industry that she has an interest in or she just recognizes needs more help in this area?

Well, two reasons. First of all, a lot of people choose industries because that's what they know. So maybe Erica happens to be really interested in fitness. But the other reason, this is a good one. If this is the reason, fitness has a lot of people who are willing to spend money, especially if it's great information. So, you know, we all know how many books are published on health and fitness every year, diets, working out, all that stuff. There is a rabid community of people who will pay virtually anything to improve the way that they live, the way they feel. So if she can narrow in on that and actually offer some amazing services, she has a really good chance of making significant amounts of money.

So let's say you are a web designer, someone that's good at web design. You're saying that if you become a niche web designer, a web designer just for people in, let's say, the fitness industry, you can charge more than if you are a general web designer.

That is one of the most profound and correct points of earning money. It's totally true. People think like, oh, let me appeal to everyone. No, appeal to as small a niche as possible and your rates will go way up. I've got students who have gone up from $25 an hour to over $200 an hour by focusing and niching it down.

And no danger you will ever exhaust that niche.

I mean, it's possible if you get real. I mean, you're talking about left handed people who are bald who live in this area. Now you're getting really specific. But most people don't go specific enough.

Right. All right, Ramit Sethi, thank you so much for all that fantastic advice. And if you have a question for Ramit or any of our other personal finance experts, go to our website@abc news.com click on the Money page and you can ask us your question. We'll do our very best to answer them all right here on Good Money.

Sam.