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5 Ways To Get Your Money To Make Money

The phrase “use money to make money” is prevalent and if you’ve ever wondered how most millionaires built their fortunes, I can assure you they didn’t do it by solely exchanging their time for money. Instead, wealthy people make their money work for them and here are a few of the best ways I feel that you can use money to make more money!

Method #1: Investing in wealth-building assets

The first way money makes money is through wealth-building assets. These include rental real estate, dividend-earning stocks, treasury bonds, businesses, and high-yield savings accounts. Granted, these valuable resources will generate impressive earnings over time. As opposed to non-cash generating assets like cars and houses taken on a mortgage, these assets don’t drain money from your wallet. Instead, they add to what you already have. Out rightly, this incredible ability to build a fortune is what attracts millionaires and middle-class earners alike. In particular, we have two asset classes that can be super-lucrative to buy into. The first one is rental properties. The thing is, the demand for housing will keep shooting upwards as long as the human population increases. This means that rental properties will remain to be an asset in high demand and the best part is, this type of real estate can generate income in multiple ways.

The first one is through rental income. When you own a rental holiday home, for instance, you’ll earn a predictable rental income every time someone stays on the property. To add to that, the property might also generate appreciation gains if its market value increases. Assuming the market value rises from, let’s say, $300,000 to $375,000, that’s a profit of $75,000. Assuming you own multiple real estate properties, you can rake in significant profits over the years.

This also applies to other assets like high-yield stocks, bonds, or private equity investing. All you need is to conduct extensive research of currently undervalued assets, buy them at a relatively lower price, and then wait for their respective markets to realize their true values and cash out your profits!

Method #2: Buying other people’s time

Secondly, you can leverage money to generate more money by buying other people’s time. The thing is, all of us only have 24 hours in a day, and 7 days in a week. At the same time, there’s a jumble of life responsibilities to attend to. From family, jobs, side-hustles, education, physical fitness, and spirituality, it can be stressful to keep all of them afloat. So how can you tend to all these things without losing your sanity? Unfortunately, you can’t and if you try, it will be challenging to maintain a perfect balance between all of them. Ultimately, you’ll end up giving too much airtime to one aspect while painfully undermining some essential elements.

The only way to become a good dad, a competent employee, a successful C.E.O, and a healthy, fit individual is to embrace the idea of delegation. Delegation typically comes through buying other people’s time. It’s the sole-answer to making the most out of limited resources such as time. Besides, one person can’t be good at everything. For this reason, most wealthy people don’t try and do everything themselves. Since they have the financial resources, they opt to hire people to take care of mundane tasks to have time to focus on those that attract higher earnings.

For instance, let’s assume that that you have two dogs that have to be walked an hour a day and you also work as a bookkeeper. Working your bookkeeping job pays you $60/hour. Considering you can hire your neighbor’s kid to walk your dog for $10/hour, it would be wiser outsource this task to someone else and profit the difference between the dog walking cost and your income from performing your bookkeeping tasks. This simple exchange is how the rich get ahead.

Similarly, when you exchange other people’s productivity for a monetary fee, you’re able to achieve more. It saves you time while boosting your productivity at the same time. This can be beneficial in the business world.

As an entrepreneur, it can be overwhelming, bearing the whole load by yourself. If you’re not careful, you may find yourself wearing the hat of an accountant, an advertiser, a copywriter, and a customer assistant. Before you know it, you’ll often be too exhausted to give your clients 100%. Additionally, since you’re trying to juggle multiple responsibilities at one time, you’ll find that you’re only able to manage a handful of clients limiting your overall revenue earning potential.

Method #3: Buying other people’s expertise

Just like buying other people’s time, it’s also possible to buy other people’s expertise. While it’s true that you can’t be good at everything, it’s also true that you can benefit from other people’s talents. How is this possible? It’s simple — by connecting gifted individuals with a target market that actually cares about what they have.

The truth is, someone can be good at something without an idea of where to sell it. If you can intervene and provide these people with a platform, then re-sell their expertise for a profit, you’ll unlock a different financial power. A good example is accounting and auditing firms. When these firms hire educated and apt auditors, they don’t pay them the total amount of the clients’ contract. Usually, the hired auditors are leveraged to boost work output quality, which is then sold to clients at a higher price.

In the same way, if you say you are a good teacher, you can open a tutoring platform and buy the expertise of other tutors to increase your output. Once you agree on how much you’ll pay them, you can set your client rates that leave a comfortable profit margin for your business.

Method #4: Starting up a business

Starting a business is another obvious strategy for making your money work for you. If you find a good niche, investing in a sustainable business can yield wholesome profits. But is it as easy as it sounds? What are the necessary steps for building a business from the ground up until it stands?

Of course, the first step is to conceive a lucrative business idea. Think of a product or service that can solve a problem or make life more convenient. A good business idea should fill a gap in the market and should have minimal competition. Going into an over-crowded niche will lower your chances of reaping profits. On top of that, a niche with many people will require you to spend more money on distinguishing your products and advertising them. To be on a safer side, take the road less travelled.

Once you’ve identified a potential business idea, your next step is to conduct market research. Who are your competitors? Which companies are the brand leaders in your niche-of-interest? At this point, your aim should be approaching your target customers to gauge if they’d be interested in your products. You can use surveys, one-on-one interviews, or just observe the market you want to step into.

Once you have a go-ahead from your potential customers, your next task is to draft a business plan. Is it necessary? Absolutely. The thing is, a business plan is the road map that steers your business in the right direction. A plan is also necessary if you intend to seek funding from investors. Honestly, no one wants to invest their hard-earned money in a venture that has no future. A business plan will include aspects like a marketing plan and financial projections, which offer a grim picture of the businesses’ future. But suppose you have enough money to cover the initial business costs. In that case, you can save yourself the hustle of seeking funding.

Once you obtain sufficient funding, you can now kick start your business activities. If it becomes successful, you’ll get to enjoy the profits, plus equity. I’m sure you’ve seen people scaling up businesses into million dollar-enterprises, right? That might be you if you stick it out.

However, it’s essential to prepare yourself for both worlds of entrepreneurship. Most business owners have admitted that the first few months in business can be challenging. You’ll probably be working more hours than you worked in your corporate job and will be loaded with stress. To add to that, brace yourself for a meagre monthly stipend until your business is entirely on its feet.

Overall, owning a business is an intelligent way of using money to make more money. Jeff Bezos is a brilliant example of how this strategy plays out. Bezos used the $300,000 he got from his parents to build one of the most successful businesses in history. Today, Amazon is worth a whopping $1.7 trillion. So if you have this big business idea, don’t be afraid to invest in money and bring your visions to life!

Method #5: Investing in self-education

Lastly, money makes money through self-education. This is an investment approach that’s anchored on spending money on your brain’s financial wits. While it certainly involves learning, self-education isn’t necessary acquired from an educational institution. All you need is the sheer willingness to sharpen your skills and discover different ways of developing your personal finances.

So, how can you acquire self-education? It’s easier than you think. The thing is, a big chunk of financial wisdom is buried on the internet. You can root it out through listening to podcasts, reading books, watching interviews with financial bigwigs, or reading financial columns. These resources will significantly contribute to helping you become a better financial manager. Self-education will also expose you to lucrative income opportunities, regardless of your age or economic background.

For instance, if you’re a student, you can learn a skill such as web designing and start making money while still in school. Platforms such as Udemy are well-equipped with tutors and experienced, practicing professionals that will help you excel in your craft. On average, a web designer generates up to $43,000 annually. It doesn’t matter whether you’re self-taught or you acquired your skills from the standard classroom setting. Most clients just want you to do a great job!

Besides landing you great opportunities, self-education can also boost your market value in the job market. While formal education might secure you an entry-level job, self-learning will multiply job opportunities for you, and expose you to higher income scales. Because in a world that’s evolving rapidly, I’m sure your career or business does so too. This means that the only way to keep a foothold in the job market is to constantly familiarize yourself with the changes sweeping over the job market. Whether this means teaching yourself how to handle software or learning how to network with successful people in your niche, it could go a long way in advancing your career.

Moreover, self-learning will build your confidence. When you’re incredibly knowledgeable about a subject, you become aggressive in grabbing opportunities when you spot them. You’ll be brave enough to approach your boss and negotiate for a raise or even apply for that promotion you’ve been eyeing. And when you eventually bag that raise, you can teach yourself how to save and invest part of it. Financial discipline is one crucial skill that school will never teach you. Yet, it’s something you can’t build wealth without. You’ll need financial education to learn how to manage debt, avoid lifestyle inflation, and save for retirement. Finally, self-education trounces formal education in the aspect of customizability. With self-learning, you can easily filter what you’re interested in from a plethora of information. If it’s strictly accounting or graphic design, you don’t have to subject yourself to a whole four years of integrating it with things you don’t care about. The learning is, therefore, faster, convenient, and more fun!

There you go, 5 ways you can get your money to make money!

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