Making money from it, or from selling it

Someone has a method that reliably makes money. They are now spending substantial effort producing videos about it, running a community, and selling a course.

There is one question worth asking, and it is not whether the method works.

Are you making money from the strategy, or from selling the strategy?

Why capacity settles it

Almost every real edge has a size limit. This is the fact the whole lesson rests on and it is worth being precise about.

A method that exploits a small inefficiency stops working when enough money follows it, because the money removes the inefficiency. A method that requires finding underpriced things gets harder as more people look. A method that depends on being early is defined by not many people being there.

So a genuine edge has a capacity, and telling people about it consumes that capacity. The teller is not being generous — they are giving away the thing.

Which means: when someone with a real edge chooses to publicise it, they are either near their capacity limit already, or the publicity earns more than the edge does. Both of those are informative, and neither is what the audience assumes.

Predict

Someone with a genuinely profitable method publishes it in detail. What is the most likely explanation?

Choose one answer

They want to help people and can afford toThe audience is worth more to them than the method isThe method has unlimited capacity, so sharing costs nothingThey are lying about the method

Lock in answer

Following the revenue

Pointing the Engine teardown at an individual takes about two minutes and it is usually decisive.

Who pays, and for what? Course fees, a subscription community, affiliate payments from a platform, sponsorship, a share of a fund, a signal service. Each is a different business with a different pressure.

What has to grow for them to earn more? If the answer is "the audience", then everything downstream — the confidence, the frequency of content, the size of the claims — is being selected for audience growth, whether or not anybody intends it to be.

What happens to their income if the method stops working? For a practitioner, it goes to zero. For an educator, it does not change for a considerable time, because a reputation decays much more slowly than a return does.

What do they actually hold? Not what they say they hold. Someone whose income comes from teaching a method and who does not use it at any scale is telling you something specific, and it is not that they are dishonest.

Not the same thing

Paid by the strategy

Income comes from the returns the method produces on their own or clients' capital.

Measured in

Returns net of fees, on money actually at risk

For example

Someone who runs a book of capital and takes a share of what it earns.

Chase it alone and

Their interests align with performance but not necessarily with your risk — a share of the upside with no share of the downside is its own problem.

Paid by the audience

Income comes from people's attention and their willingness to pay for access.

Measured in

Subscribers, course sales, sponsorship, affiliate revenue

For example

Someone whose earnings would be unchanged if the method stopped working tomorrow.

Chase it alone and

Everything is selected for reach: certainty outperforms nuance, frequency outperforms patience, and a large claim outperforms a careful one.

Which is which? Put each one on a side.

• A fee charged as a percentage of the assets managed

  Paid by the strategyPaid by the audience

• A free daily video with a paid community attached

  Paid by the strategyPaid by the audience

• A payment for every person who opens an account through a link

  Paid by the strategyPaid by the audience

The honest version of the objection

There is a good counter-argument to all of this, and this lesson is weaker if it is not put properly.

Teaching is a real job. Some people are better at explaining than at executing, and there is no reason a skilled explainer should be required to also be a skilled practitioner before they are allowed to teach. Nobody expects a coach to be the fastest runner. And plenty of genuinely useful financial education is produced by people who make their living from producing it, including, unavoidably, this course.

The distinction that survives is between teaching a subject and selling a result.

Explaining how compounding works, or how a business earns, or what a fee does over thirty years, is teaching a subject. The teacher does not need to be rich for it to be true, and you can verify most of it yourself with arithmetic.

Selling a specific method that produces a specific outcome is selling a result, and there the teacher's own use of it is directly relevant evidence — because if the method works at scale, teaching it is a worse business than using it.

Check

Which fact would most change your assessment of someone selling a trading course?

Choose one answer

They show screenshots of profitable tradesThey have taught it to thousands of students with good reviewsTheir course revenue is a small fraction of what the method earns themThey openly discuss their losses as well as their wins

Check answer

›The same question, pointed at institutionsOptional

This is not only about individuals. The question works on any organisation that offers both a product and advice about the product.

A firm that sells you a plan and also sells the things the plan recommends has two revenue lines pointing in the same direction, and disclosure requirements in most places exist precisely because that combination reliably produces recommendations that favour the second line.

The mechanism is not corruption. It is that the products with the largest margins are the ones a sales organisation is best resourced to explain, so they get explained best, and being explained best is most of what makes something get bought.

Worth remembering

• The useful question about anyone with a method is whether they earn from the method or from selling it.
• Most real edges have a capacity limit, so publicising one consumes it — which means publicising is evidence about the edge.
• If the audience is the revenue line, everything gets selected for reach: certainty over nuance, frequency over patience.
• Teaching a subject can be checked with arithmetic; selling a specific result makes the teacher's own use of it relevant evidence.
• Screenshots, student numbers and reviews are all produced equally by a method that works and one that does not.