Some people receive unemployment or some kind of welfare. Others people own businesses or are employees. Some people got money from property they own, such as savings account interest, bank royalties and so forth. In a country in which business is not subsidized, the business buys merchandise at a lower price than its sells it for, although this causes inflation.
In the U.S for example, the money the central bank creates is loaned to commercial banks rather them spent. Business borrows and then must repay the money by charging higher prices and hoping someone will buy something. In this credit based economy, some people have reportedly become multimillionaires by playing American football, which other people are homeless. Some people make money by selling stock at a higher price than they bought it for, but they find paying enough attention to the stock market to do that to be work.
Use the law of supply and demand to your advantage
Most of us are familiar with the lay supply and demand- the more there is something, the cheaper it is; conversely, the rarer the product or service, the more expensive it is.
However, other than when we get to online for the latest fad toy that kids can’t get enough of, we don’t really apply the law of supply and demand to our own lives- particularly our careers. For example, if you’re aspiring to do something that many other people want to do (so much so that they do it for free, as a hobby) then it will be far more challenging for you to make money doing it.
On the other hand, if you do something that most people don’t want to do, or if you get very good at doing something most people don’t do all that well, then you can make a whole lot more money.
Recognise that time is money
This critical piece of advice is attributed o Benjamin Franklin, who was an accomplished American inventor, journalist, printer, diplomat, and statesman- the ultimate multitasker. Your ability to manage your time (and stop procrastinating) is a critical ingredient in your ability to make money.
Whether you have a job or are self-employed, keep track of what you’re spending your time on. Ask yourself “Which of these activities make most money, and which of them are waste of time?”
Do more of the former and less of the latter, simple as that. When you’re focusing on high-priority tasks, get the job done well, and get the job done fast. By working efficiently, you’re giving your employer or clients more time, and they’ll appreciate you for it. Remember that time is a limited resource that you’re always investing.
Jack up your prices
If you’re providing a skill, services or product that is in high demand and low supply, and you’re making the most of your time, you should be making good money. Unfortunately, there are many people who are too humble or fearful to demand that they get paid accordingly.
It’s the pushovers in life who get taken advantage of and exploited, so if you think you might be one of them; learn how to stop being a people pleasure. If you work for some else, ask for a pay raise or get a promotion, and if none of that pans out, revisit your career options as described previously.
If you’re self-employed, the first thing to do is to make sure your customers and clients pay upon time- this alone can substantially improve your income. Check your prices and rates against those your competitors- are you undercutting them? Why? If you’re providing a superior product or service you should be getting at least the average, unless your profitability depends on mass production, in which case you’re probably making a lot of money and wouldn’t be reading this article anyway!
Remember Murphy’s Law: “Whatever can go wrong will go wrong.” Make plans, complete with as many calculations as possible, then anticipate everything that can go wrong. Then make contingency or backup plans for each scenario.
Don’t leave anything to luck if you’re writing a business plan for example, do your best to estimate when you’ll break even, then multiply that time frame by three to get a more realistic date; and after you’ve identified all the costs, add 20% to that for costs that will come up that you didn’t anticipate.
Your best defense against Murphy’s Law is to assume the worst, and brace yourself. An appropriate amount of insurance may be something worth considering. Don’t forget the advice of Louis Pasteur, a French chemist who made several incredible breakthroughs in the causes and prevention of disease: “Luck favor the prepared mind.”
In studies of millionaires, people are surprised to learn that most millionaires aren’t doctors, lawyers, and corporate leaders with big houses and fancy cars; they’re people who religiously live below their means and invest the surplus into assets, rather than liabilities.
As you’re taking the above steps to make more money, keep in mind that increased income does not necessarily equal to increased wealth. Most people who flaunt their wealth actually have a low net worth because their debt to asset ratio is high- in other words, they owe a whole lot more money than they actually have. All of the previous steps have outlined aggressive strategies for making money, but you’ll never get anywhere if you have a hole in your pocket.
Know the difference between an asset and a liability.
An asset is something you own and a liability is something you owe. A home you own is an asset because you could sell it. A mortgage is a liability because it is money you owe the bank. A savings account is an asset. High risk investments such as stocks and mutual funds are also.
Any patents and copyrighted works you own are assets also. Theoretically, if you save enough money o invent or write something, your assets could earn enough money for you to live on.
Knowing hose to invest your money is extremely important when it comes to building your own fortune. There are many different ways you can invest your money depending on the type of risk you are willing to take. Stock market is a good place to start, do your research and invest in companies which might be a good investment.
By Isaac Kiddu