Social Media Marketing expenses paid by renting stocks

Paying your organic social media marketing campaign with rental income from stocks and cryptos can be good idea. Lending your stocks and cryptos can help you earn on an average of 10% p.a. This can be helpful in a falling market. This money can be used to fund your monthly expenses on organic social media marketing. The process is safe and devoid of market movements.

Introduction to Social Media Marketing

Social media marketing as we all know is reaching out to target audience by creating engaging content. As I scroll through the feeds of terrarium.imaginarium I consistently notice new posts and stories. This page is the work of art of someone who is a green artist. If you visit their page, you will see how the same tone and colour is used everytime. Everything is so green. All of their photos have the same filter on them to ensure they match — this makes their profile look professional, artistic, and organized when visitors, like myself, browse their page.

Their posts are shared regularly and gathers a lot of likes and shares. This is a perfect example of a successful Instagram marketing. Just like this social media marketing is done through various other channels like Facebook, twitter, LinkedIn etc. I am not going to discuss in details here as to how to do social media marketing. What I want to stress here is that this action requires a successful strategy. There are a lot of testing and analysis of data that needs to be done.

Finally, a successful social media strategy gives the following benefits:

1. It increases brand awareness:
2. Social media has been proven to boost brand awareness by driving up engagement. Social engagement includes things like comments, likes, shares, and reposts, and saves.
3. Generate leads and boost conversions:
4. Promoting and sharing your products and services especially through quiz, contents live videos helps to get customers.
5. Make better relationship with customers:
6. You can interact with customers and provide great customer service.
7. You can learn from your competitors:
8. You can keep tabs on your competitors — whether that’s in reference to their social media tactics, the products they’re promoting, the campaigns they’re implementing, or their level of interaction with followers.

Components of a social media strategy:

1. Research your buyer personas and audience.
2. Determine which social platforms you’ll market on.
3. Establish your most important metrics and KPIs.
4. Get to know your competition.
5. Create unique and engaging content.
6. Organize a schedule for your posts.

The automation part

As a small online business owner, you can do a lot of these tasks by yourself. But in my experience the most pain point becomes social media sharing which again if done at a specific point of the day gives best results. This is a repetitive task and hence can be automated. There are various tools e.g Hootsuite, buffer, buzzsumo etc, but all these costs a monthly subscription.

How to finance the social media strategy that you designed?

I am going to show you a way where you can get a fixed interest type income to pay this bill. This is by lending your stocks.

In the year 2019 – 20, Rs3.25 billion (325 crore) was earned by India investors by lending stocks that were lying idle with them. This is called the Stock Lending & Borrowing Mechanism. So, are you an investor who would like to finance your passion to profession business with your idle portfolio? Then SLBM is here.

Before I start let me tell you that SLBM is not just limited to India. It is also there in US. For other markets, you have to check in the country you belong to.

What is the Stock Lending and Borrowing Mechanism(SLBM)?

Through this mechanism you can lend your stocks to borrowers and earn a lending fee. Normal market yield is in the range of 5-6% per annum. Depending on the stock and market situation, these yields may vary in the range of 2% to 15% per annum. It can even shoot up 30-40% for short periods. The best part is that you would continue to remain the owner of the shares and even earn dividends, bonus and other corporate benefits if any are declared during the lending period. Note that these are annualized figures and the absolute return you get will be less because the lendings happen over short periods of 10-20 days.

What are the risks involved?

There is absolutely no risk involved in this process. This is because SLBM (stock lending and borrowing mechanism) is an exchange traded product. Thus risk failing to pay back the securities by the borrower is not there.

Who borrows your shares?

These are traders and institutions who want to hedge their positions in the futures and options (F&O) segment. While doing pair trading also this method is used.

What are the steps involved?

1. Open a demat and trading a/c and activate SLBM feature. This can be done online or by calling your RM.
2. The stocks that can be lent out are showed in the NSE and BSE websites. Also you may get a list of current opportunities from your RM.
3. The lending fees differs for each stock, the length of the lending/borrowing period as well as the market conditions. Once you hear all the details, you need to agree to lend the stocks.

What about the Lending period and liquidity?

Every lending opportunity is in the form of contracts and the following needs to be understood before entering into any contract:

• At any given point of time there are 12 contracts available.
• Each contract expires on the first Thursday of a month. This is the date when the securities get back to your demat account.
• The 12 contracts are usually for the upcoming 12 expiry dates. For example, let’s take the year 2022. If we consider the date of July 18, 2022 the next expiry will be on 4^th Aug, 2022. This is called the ‘Current month’ contract. The remaining 11 contracts are for the subsequent months until June 2021.
• The current month’s contract attracts the highest liquidity. But if there is an opportunity you can consider the future months’ contracts as well.
• It is compulsory that the borrower give back the securities one day before the date of expiry. However, the borrower can choose to give back the securities before the expiry date too. This depends on the number of days he is borrowing your stocks for.

What are the charges involved?

Your broking firm will charge a fee for providing this service just like brokerage is paid when you buy and sell stocks. Please check with your broker for more details.

This is a riskless way of earning money from stocks. In US even exchange traded funds qualify for this program. The money you earn from here, does not vary as per the stock price fluctuations. So, you can earn some passive income monthly to pay for your SEO tool subscription. It may or may not cover the entire cost, but whatever is covered is the money you save, which you can use somewhere else.

Prepare a financial plan considering the following:

1. Understand how much you have to pay per month as subscription.

2. Evaluate the total amount of investment.

3. Carefully select the lending opportunities available.

4. Lend whenever possible.

5. If you earn something extra in one month keep that to fill up the gap in a month when you didn’t earn enough from lending.

6. You may consider investing more in a good stock if more lending opportunities are available in it.