Are you reluctant to spend money? You might be making a costly mistake if you are not basing your decision on the right factors.

I'm sometimes surprised when people talk about the cost of something without any reference point. For example, when they hear that advertising on Google might cost them $10 a day, they will say, "It's too expensive".

My response: Compared to what?

Sure, $10 a day is expensive if it ends up getting you $5 in return. But if it makes you $11 a day, it's worth it, isn't it?

Charles Dickens put it like this (in a slightly different context):

"Annual income twenty pounds, annual expenditure nineteen pounds nineteen shillings and six pence. Result: Happiness.

Annual income twenty pounds, annual expenditure twenty pounds and six pence. Result: Misery."

I was talking to an Internet guru recently.

I was talking about this to my friend and colleague Ed Keay-Smith, who is Australia's #1 expert - and one of the world's leading experts - on getting more traffic from Google.

Recently, he's been working with Sandy Forster, who's been marketing the hit DVD The Secret in Australia. At that time, Ed and Sandy had been using Google advertising to get people to Sandy's Web site. They had set a modest but reasonable budget for their Google ads, and it was ticking along just nicely.

Then they heard that Oprah Winfrey would be featuring The Secret on her show. As you can imagine, when Oprah promotes a product, it can be a big success for the lucky business selling that product. And so it turned out.

Ed and Sandy anticipated a massive increase in hits, and increased their budget to.

Well, let me hand over to Ed.

Ed told me the story in an interview, which I recorded. You can listen to that extract from the interview, and hear the story in his own words:

It takes less than 10 minutes. If you don't have the time, the bottom line is that Ed and Sandy increased their daily advertising budget to 15,000 dollar so they could cope with the increase in hits to the Web site. And of course, they were making much more than that in sales. What's in it for you?

As Ed says, if you gave somebody 1 dollar and they gave you $2 in return, wouldn't you keep giving them 1 dollar every time? Of course you would.

So the next time you catch yourself saying, "It's too expensive", ask the crucial question, "Compared to what?"