Search Alot, Shop Alot and Invest The Difference

November 18, 2009 at 10:48 am Leave a comment

Last month a member of our GrooveVC community posted an interesting concept in the GrooveVC forums under the title – “How to Make $10k Out of Nothing at All – Search Alot, Shop Alot & Invest the Difference” .  Given its focus on matters of personal/consumer finance, it seems that his ideas could be beneficial to many if not most of our members. Visitors to our blog far outpace the number of members who visit our forums, so I thought I would post the article on the blog so that more members will get exposure to it.  Here is an excerpt with a link to the full article at the bottom:

Download the Alot toolbar or use the Alot home page to shop all consumer financial goods/services in your budget – your auto insurance policies, your homeowners insurance policy, your life insurance needs (shop for best term products), your credit cards (shop for lower rate, lower fees or better rewards), shop rates for home equity lines of credit or consolidation loans to lower your interest rates and/or improve cash flow, shop online banking offers for better rates on emergency balances and interest earning checking accounts and even shop your investment accounts – there are discount stock brokers who can provide all the service you need to buy stocks, bonds, CDs or mutual funds at a much lower cost structure than the brokerage arm of your retail bank.

Since making my first investment in Vertro about a month ago at 30 cents per share, I have done my own experiment using the Alot search to find better rates on all the consumer finance products/services that are components of my typical clients’ financial profile. I have been pleasantly surprised to find how much money can be saved using the various services that run keyword advertisements through Alot when I search for terms related to home, life and auto insurance, credit cards and consolidation loans.  Some of the services actually do alot of the work for you, getting quotes from multiple sources so that you can choose the best fit.  These services make it easy to shop multiple providers and usually result in a substantial savings over existing policies or services.  Between the lower premiums on home, term life and auto insurance, the lower credit card rates and/or money saved by consolidating with a home equity loan or other consolidation loan and better interest earned with the online banking products, we saved or improved each clients bottom line by close to $1,000 per year.

If we take that $1,000 and invest in Vertro stock at today’s prices, I believe it is entirely possible that these clients can see that investment grow to $10,000 within the next year.  The Groove’s due diligence report lays out the case for a 10 bagger better than I can, but the stock doesn’t have to grow by 10x to make this a good approach – the $1,000 in savings is real and even a nice double digit return per year is better than most investments in this market. .The main thing that makes me believe in the possibility that this investment can double, triple and even grow 10x is the money that Vertro makes while each new client shops those items.  I used the keyword spy service (Thanks for the link Steve) to find out how much Vertro makes on clicks for these keywords and I was surprised – many of them pay over $25 per click to be the top ad.  If you assume that the others pay even half that to be on the list and assume that each client shops at least nine or ten of the options for each search before deciding which offers the best deal, Vertro can probably make nearly $500 while the client shops and saves his $1,000.  Its a win/win proposition – use their service to save $1,000, invest the $1,000 in their stock and watch the stock price go up each quarter as the money you made them with your searching (and hundreds of others made them with their searching) begins to have an impact on the earnings they report.

For the Rest of the article, please click below:

http://groovevc.websitetoolbox.com/post?id=3736919&pid=36256014#post36256014

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