Ways to Make Money Online That Seem Great but Just Aren't Realistic



The internet provides an


entirely new way to make money. If you need a quick paycheck, you can try selling something on Craigslist or tapping into the gig economy. If you need a long-term means of producing income, there are plenty of suitable options — I should know, given that I’ve been making money by writing online since I graduated from college.

In some ways, though, the opportunities for making money on the internet are not so different from how people have been trying to get rich on the frontiers of society for centuries. One example: In the 19th century, many English and Irish people (mostly men) abandoned their homes to start new lives in New Zealand, attracted by not only the gold mines but also the abundance of opportunity in industries like timber, wool and hunting seals. In The Penguin History of New Zealand, historian Michael King quotes an article from that time: “Here — where the social disabilities, the exclusive caste, the overstrained competition, and the stereotyped conventionalism of the Old World have not yet taken root — there is a clear field for men of talent, skill and energy to climb the social ladder and to attain to a degree of wealth and social elevation that is possible only to the favoured few in other countries.”

Doesn’t that way of thinking — the optimism, the belief in meritocracy — sound like the logic that brings people to the web? Of course, not everyone who went to New Zealand found gold or became rich. The gold mines became crowded, the seals were overhunted and, in a short time, an opportunity that seemed like free money had become wildly competitive.

The same can be true on the internet. Take a look at online gambling sites like DraftKings or FanDuel, both of which claim to give new users $500 for a “risk-free” first bet. It seems straightforward at first, but your money is refunded as site credit, which incentivizes you to keep gambling against people who probably have more resources, more experience and fewer scruples than you. If it were really so easy to make money on the internet through gambling sites, they wouldn’t need to offer you $500 to lure you in.

I probably don’t need to tell you that sports gambling is a bad way to consistently make money online. But this represents a lot of ideas about acquiring income on the internet: They all start with an easy win or a flash of excitement — something to draw you in — but then prove more difficult and competitive.

Related: 17 Passive Income Ideas for Increasing Your Cash Flow

So how can you tell whether your income-generating idea is more than a flash in the pan? Start by remembering that an idea is not the same as a business. You need to be able to outline precisely how to go from your first step to the last step (presumably generating revenue or passive income). It’s simple, but it’s worth saying: If you actually want to make money on the internet, know how you’re going to make money on the internet. You can’t be these guys:

 

It’s certainly not impossible to earn an income online with these strategies, but it’s a longer and more convoluted road from step one to profit than you might expect.

Becoming an Instagram influencer

Again, it’s possible to make money online as a social influencer. You don’t even necessarily need a million Instagram followers to do it: Many brands look to maximize their money by spreading their budget across micro-influencers (people with fewer than 10,000 followers and sometimes even 1,000 or fewer), who often have smaller-but-more-dedicated audiences than bigger-named celebrities. In fact, Rakuten Marketing interviewed 719 marketers across the United States, Australia, the United Kingdom, France and Germany, finding that respondents spent 40 percent of their influencer budget on micro-influencers (compared to just 28 percent for celebrity influencers).

By the numbers alone, you’d think there’s plenty of money to be made online this way. Influencer Marketing Hub projected there would $6.5 billion spent in influencer marketing in 2019, stemming from 4.4 million Instagram posts using tags like #spon, #ad or #brandname, denoting that they were ads from influencers. In the same report, Influencer Marketing Hub claimed only 11 percent of influencers are currently fully compliant with legal guidelines, meaning there are likely many more than just 4.4 million sponsored posts.

That may seem like a high number, but consider this: According to Hootsuite, 1 billion people use Instagram every month, and 500 million people use Instagram Stories every day. A 2016 Reuters article claimed Instagram users posted about 95 million photos and videos every day — over the course of a year, that’s over 34 billion Instagram posts, amd that number has only gone up since 2016.

According to those estimates (4.4 million ad posts, 34 billion total posts), only about 0.01 percent of Instagram posts are actually sponsored.

Even if you crack into that upper echelon of Instagram users, there’s no guarantee you can earn a stable income from your posts: Emarketer claims that even for influencers with between 30,000 and 500,000 followers, an Instagram post only pays an average of $507. For nano influencers (500 to 5,000 followers), a post only pays about $100.

If you need to reach the top 99.99th-percentile of your profession just to earn $100, there are better ways to make money online.