dont put all your eggs in one basket

Don’t put all your eggs in one basket [PMP #288]

Today, I wanted to share a story that illustrates exactly why you shouldn't put all your eggs into one basket. Especially when it comes to your income.

Either as a business owner or a salaried employee, don't put all your eggs in one basket. Meaning, don't get all of your income from one source. You never know when something may happen and the rug gets pulled out from underneath you. By having a few sources of revenue or a side hustle, diversification is the key to protecting yourself.

Don't want to read the transcript, listen to the podcast instead:

In my business, I generate revenue from consulting. I also earn an income from affiliate marketing, I get commissions from clients on the software that I refer, I can sell Pipedrive and Asana subscriptions, I have courses on my website, I sometimes do sponsorship sponsored videos and other things. So I'm actually getting an income from a range of different sources. Obviously, the main driver of revenue in my business is the consulting income, but if that were to dry up or drastically decrease all of a sudden, for some reason, I do get income from other sources, which is good.

But even if you are a salaried employee, I would also consider; is getting all of your income from your salary, the right move, could you develop a side hustle or some other way of making an income that just protects you so you've got something else coming in, should anything ever happen?

Hopefully, my story today will explain why…

Starting at the beginning of August, I noticed that my YouTube ad revenue revenue went down about 80% basically overnight. I was generating probably around USD $ 1,500 – $2,000 a month from YouTube. And then overnight it went down about 80%. All other metrics were fine. My videos were still performing well. The sort of search volume going to my videos, the people, the time people were spending on videos, I couldn't see anything that explained all of a sudden why the income had dropped.

My first thought actually was that a big advertiser had just pulled out and now I'm not getting this ad revenue. This felt unlikely as I don't think I'm getting that much YouTube revenue from one advertiser, but it could be a factor.

And I actually reached out to a few people I know to ask whether they had seen anything like this before. Any ideas why? Nobody could really pinpoint what had happened. I think it was then… In early September, I noticed that a friend of mine, Francesco D'Alessio, over at Keep Productive, had mentioned on Twitter that his channel had been affected at about the same time.

So that was kind of comforting. To know that,  well at least this is not just happening to me. I reached out to Francesco to find out what was going on, and it was at this time that I learned that it had something to do with invalid traffic on YouTube. Which at the time I had never heard of. Turns out invalid traffic on YouTube is basically fake traffic. It's bots that are… Looking at videos, I guess.

It sounds like the issue is more with YouTube. From what I've seen now on Twitter… Seeing what other YouTube creators are talking about and the timing, we all line up where this change happened in early August and we all seem to have gotten affected at once. And it's still going on today. Fortunately for me, my YouTube ad revenue isn't the main source of income for me. For me, YouTube is more of a lead generator. I put out videos on YouTube to market myself and get interest in my consulting services. And then people come to me and then I charge for the consulting support that we offer. That's really where we generate the revenue.

Don't get me wrong, the YouTube ad revenue is a nice extra income. Like I said, it goes back to having a diversified business. But fortunately for me, it's not the main source of my income. But like I said, there are people that I've seen, having now spent some time looking on Twitter, there are YouTube creators where this is basically their bread and butter.

They are, the main source of their income comes from YouTube. And to then all of a sudden experience an 80 percent drop in, in revenue, in income for them is, is massive. So this illustrates why you really don't want to rely on one source of income as a business owner or as an individual employee. Because you never know, if you are relying on one source of income, you never know when that might just, that rug might just get pulled out from under your feet and now you are left scrambling.

Fortunately for me, I was like, okay, well this sucks, but… As long as I'm focusing on the other areas and the other sources of income are okay, I'm fine. I really didn't lose too much sleep when this issue happened. And hopefully, this invalid traffic issue with YouTube gets resolved and hopefully it's all be sorted soon.

But I really do feel for the YouTube creators that are now, you know, a couple of months down the road and… their income has been significantly affected. So I guess more than anything, I'm just grateful that I've, my business, I've, I've put my business in the position it's in where I do have a few sources of income coming in.

I even remember back to the early days when I was starting my business. I thought, I really don't want to rely on a platform. Or a centralized authority, you know, social network when it comes to the advertising of my business.

My website is a WordPress website. There are loads of different options for building a website. There's Squarespace and Wix. I like WordPress, number one, because there's lots of support from developers on WordPress. It's probably the most popular website CMS in the world. But it is all open-sourced software. I can host the website myself on my own hosting platform. I'm not really relying on someone to host my website. Same thing with my courses. When I developed my online courses, I don't, I didn't put those on a teaching platform like Teachable, I wanted to host those myself on my website.

I've talked about this before on my podcast, but I use Bitcoin to store some of my personal savings, and some of my company profit. Because then I'm keeping some of my savings outside of the banking system where you're essentially trusting someone to look after it for you.

And if you're listening to that thinking, oh, you know, you're probably taking it too far. Well, look at what happened earlier this year, in March, when Silicon Valley Bank Basically collapsed and they didn't have enough money to pay everyone.

Even Asana, whom I provide consulting services, I got an email from Asana that said, don't pay any invoices to this bank account because SBB is, we, we can't rely on that bank account anymore. So, that was a major issue at the time and it illustrates exactly why. Even with your banking, you probably don't want to, if you have a lot of retained earnings and big profits, you don't want to keep it all in the same basket.

So that is my cautionary tale. I hope this is useful. If you are someone like a YouTuber an influencer, if you do a lot on Instagram, TikTok, if you rely heavily on some kind of platform for marketing your business, for generating an income, think carefully about, you know, what would happen if the rug was pulled out from under your feet?

Are, would you still be able to support yourself? Would your business still operate? I hope I'm, I'm really. Again, I'm grateful that it hasn't been a big deal for me, but I know it has affected other people. So I hope this cautionary tale has been interesting.