mavens corner

Let’s Talk Money!

talkmoney

Let’s have an open forum about money. I want to start off with how I started learning about money and building wealth and hopefully you guys will chime in in the comments section.

It all started after I graduated college, and started working, I quickly realized this path would probably not get me to my multi-million dollar dreams, so I decided to study money, Seriously! I knew that there was a lot I didn’t know about it and figured the best way for me to make more of it was to research it and the people who had it. I started my research with the Forbes Billion dollar list and went through the richest 400 people in America and read their story. moneyroll After googling every name, I realized that NO ONE said I got a job, worked really hard and earned a Billion dollars while working. Instead, they all had a product! The number one guy, Bill Gates, developed a computer program and sold it to millions of people. Then in between there was the Walton’s, the Wal-Mart family; Michael Dell, Dell computers; Steve Jobs, Apple computers (ipod); Warren Buffett, stock investor, etc…

Then I started researching people who made millions of dollars. Actors (Will Smith & Tom Cruise), Athletes (Michael Jordan & Tiger Woods), Lawyers, Doctors, CEO’s. These people developed an expertise and sold their services for a very high price.

Lastly I got to everyone making below a hundred thousand a year. They all had what we call a regular 9-5 job. I then concluded that my 9-5 job by statistics alone was not going to get me very far. However, I did understand there are people who sell products that are broke and others who have jobs and are millionaires. There are always exceptions to the rule, but the general pattern was the one I outlined above.

What I have learned is there are basically 3 ways to make money. You can get a job, sell a product, or provide a service (If there are any other ways, please leave them in the comments section below so we can discuss). Also, I would put investing in the product category because you are essentially trying to buy low (at cost) and sell high (at market value).

I then examined myself and said why am I not selling a product or providing a service. And from that point forward I knew that is what I needed to do and never looked back. Somethings I have done along the way and still currently doing are sell custom apparel and shoes, trade stocks, sell advertising, develop websites, small business consulting, and so forth. Now I challenge you to do the same. Your first product doesn’t have to be a million dollar idea, I have seen plenty people with a simple product make hundreds of thousands in profits. If your job is your only source of income, then you need to find a product or service you can sell to get another stream of income. Take your ideas and wrap them up in products to make money! That is what I say! So now I want to hear from you. Leave comments so we can discuss and I will respond with advice from my experiences. Also, if you have a success story or mistake story leave a comment on how you made it so it can help others!


Discussion

23 comments for “Let’s Talk Money!”

  1. Man I never thought about it like that! If I can get something and sell it for like 20 or 30 bucks I will be in there! My mom sells vitamin supplements for a company. She gets like 3 dollars for each bottle she sells. She going good now, selling like 230 bottles a week part time. Thanks like an extra 700. I just looked at it as her job and never thought of me doing something similar myself. Now Im about to look into it. Thanks MoneyMaven!

    Posted by Matt | October 28, 2009, 1:27 pm
  2. Matt – exactly, One thing I used to sell was t-shirts with cool sayings on them. I made one design that I knew a lot of people liked. I got about 30 of them printed up. It cost me around $250. Then I sold them for $20 a piece. So I brought in $600. That was $350 dollars profit. Took me about 2 weeks of selling to get it done. Then I went back and bought more. This time I had 80 shirts. Sold them for $20 a piece, some I sold for $15 to close friends. I made $1500 profit. Just like that, I was counting money outside of my job!

    Posted by TheMoneyMaven | October 28, 2009, 1:33 pm
  3. I like this… Very important to distinguish which of the 3 you’re going to tackle.

    Posted by Franny | October 28, 2009, 10:57 pm
  4. I would add that saving money, is also a form of making it. Not a savings account per se, but investing in products and projects that save money over the long run…companies do it all the time. One example might be to buy fluorescence light bulbs for your house…over 5 years you could save hundreds of dollars on your electric bill and old light bulbs. That saved money can be used to buy t-shirts to sell and make more money…LOL!!

    Posted by WBeamen | October 28, 2009, 10:59 pm
  5. Let me preface this by saying that I am NOT against building wealth based on entrepreneurial avenues. However, I would like to explore more into why you didn’t think your 9-5 would “cut it” to get to that point of “success” in dollars and cents. I believe anyone can get to multi-mill status with their 9-5, it just depends on the type of career path, financial discipline, and the time period in which you want to achieve it in. Digressing a bit…how does one break out in a oversaturated product providing market and make it last for generations like Waltons and Gates?

    Posted by Dawson | October 28, 2009, 11:02 pm
  6. WBeamen – Saving money? hmmmm, I guess that could be one. I trying to wrap my head around it. If you are under the assumption that you always have to spend money and you learn how to spend less of it, I guess it could be a way of making money. I can dig it.

    Posted by TheMoneyMaven | October 28, 2009, 11:04 pm
  7. Dawson – I do think you can get to the point of “success” through a 9-5. I put in there that there are exceptions to the categories. The CEO of the Fortune 500 Company I worked at, started there right out of college, worked 20 years there, became CEO and now is worth something like 400 Million dollars. So it is definitely possible. What I made note of is when I researched all the people on the Forbes list, all those had started their own empires and none of them went through the 9-5 job route. So I came to the conclusion that if I wanted to be like them, I had to do what they did. With that being said, I feel like in your career, you are doing either two things. Working towards your goals or working towards somebody else’s. The thing is when you are working towards somebody else’s goals, you aren’t the owner. And when you aren’t the owner, you are always swapping time for money. So let’s say you worked 50 years. That is 104,000 hours of work that you would have put in. In order to make a billion dollars you would have to make an average of $9,615 dollars an hour!!!! I don’t know too many jobs giving out those wages. So that is why I said the 9-5 route won’t cut it.
    For the question on how to be like the Gates or Walton’s, I have not made it their yet so I really couldn’t give you great advice. However, Malcolm Gladwell did a good job in his book, Outliers, trying to explain their successes and I think it is a great read.

    Posted by TheMoneyMaven | October 28, 2009, 11:15 pm
  8. Franny – Thanks for the comment. I really appreciate it 🙂

    Posted by TheMoneyMaven | October 28, 2009, 11:17 pm
  9. Yeah the assumption is that there are some things that you have to spend money on…my example was electricity…a manufacturing plant might say a certain piece of machinery. If there is a new piece of machinery that can out put 40% more while reducing $XXX,XXX waste per year…then that company’s income statement is going to see positive results from that new investment…thus the money saved from waste won’t be seen on the income statement as savings, but as higher net income…especially if an expense was “waste removal”.

    Posted by WBeamen | October 28, 2009, 11:31 pm
  10. WBeamen – definitely with you on that one. Just like you can create a value add to make money, you can create a value add to save money. I guess the only thing that has me is it is only a limited amount of money to save but unlimited when it comes to making it. Good insight WBeamen!

    Posted by TheMoneyMaven | October 28, 2009, 11:34 pm
  11. Agreed. I brought it up to get varying perspectives. It’s always a great topic of debate. I think whether you own the vision or are working towards someone else’s vision that swapping time for money will always be a factor. Your ultimate goal will dictate how much and how long especially when you’re comparing millions vs. billions. Thanks for the book suggestion…keep pressing*

    Posted by Dawson | October 28, 2009, 11:36 pm
  12. Dawson – Thanks. I appreciate the comments. I like to engagement because not only does it get me thinking and hearing other perspectives but it does the same for the readers of the blog.

    Posted by TheMoneyMaven | October 28, 2009, 11:39 pm
  13. Yeah its definitely not the fastest way, but over time it adds up…how many times do you see women, usually white women, who pull out 100 coupons in the grocery line. Now I’m just making an assumption, but I would say that they are usually well off. It’s just another way they add to their wealth…

    to comment on DAWSON’s question…the key to breaking out is to offer something that your competitors can’t…many times that comes from intangibles that lie on the inside…these offerings create value above and beyond a sticker price. Any competitor, especially a big one, can duplicate your product, slash prices lower than yours, etc. but they can’t match the intangibles within that keep your customers coming back.

    Clearly that’s easier said (or written) than done.

    Posted by WBeamen | October 28, 2009, 11:53 pm
  14. I agree with all the statements so far but I think this is the key. The point of making money should be to become wealthy not rich. There are situations where a 9-5 will help you get rich but very rarely can you become wealthy. When you are an entrepreneur and you build your business correctly you are building generational wealth meaning your grandchildren’s, grandchildren will not have to worry about money. I have come in contact with employees of companies who have made a ton of money but if they stopped working the money would stop. Think about your favorite athlete most of them are very rich but they do gain wealth until they start a business or through investments. That is why so many athletes go broke because when the money stops coming in they do not have any investments (businesses, real estate, stocks) to rely on. However there are a lot of entrepreneurs who fall in that same boat because they have not built there companies correctly. Here is an example if an entrepreneur takes a day off or goes on vacation the business stops. So guess what that means no vacations and no days off for the entrepreneur. There is a big misconception going around that if you are an entrepreneur you have to work 18 hours a day 7 days a week to be successful. To me that is crazy. When starting a business the key is systems this way you can place anyone in that system and the business still runs like clockwork. Wow I am long winded lol. Just my 2 cents.

    Posted by Cmajor | October 29, 2009, 12:44 am
  15. CMajor – My Man! Great comments, I definitely agree.

    Posted by TheMoneyMaven | October 29, 2009, 12:56 am
  16. CMajor…Great points…I stated before on Twitter that an entrepreneur is merely an organizer of talents…he finds the right talent to do the right job…for example: why spend 2 weeks trying to learn Dreamweaver when you can pay a web designer (or hire your boy O), and focus on your talent which might me sales or marketing. The money you pay for a web designer is way less than the opportunity cost of neglecting other areas of the business. Quite simply…Entrepreneurship=Talent Management…those who are successful have found the best suppliers, distributors, marketers, etc. Don’t get me wrong, entrepreneurs MUST get their hands dirty in order to succeed, but they just have to pick and choose their spots.

    As far as athletes, I feel you, but athletes go broke because of lifestyle. I’m not the greatest investor like TheMoneyMaven, but I can do math pretty well…and I know that putting $1 million in a BASIC savings account (3%) will yield approx $30,000 a year. That’s an old school mom and pop savings account. Not to mention most sports give pensions after 5-7 years of service (which I guarantee is more than I would get after 30 years). So with the type of money they make, they don’t even have to start businesses, real estate, or stocks to live comfortably. But their problem is when the money stops, THEY continue to BALL out until it’s all gone. Players with Eddie House money try to hang and ball out with players with A.I. money. Mathematically, it’s just not possible.

    Posted by WBeamen | October 29, 2009, 10:48 am
  17. WBeamen – I agree on the athlete thing. I think they provide a service and therefore are still swapping their time for money. However, they are getting paid a whole lot so they get to live a different lifestyle. That is why I like products so well. Once they are created, it allows you to step away from it personally and you can still make money without putting in all your time.

    Posted by TheMoneyMaven | October 29, 2009, 12:07 pm
  18. I am hearing a lot of good things in these comments and I love it!!! One thing I realized after I started working for myself was that it is important to have all 3 types of income. And it is better if all 3 come from one idea. I for one LOVE real estate, so I try to focus on creating income anyway possible from my passion. I have become a real estate agent to sell property part time (product), I the Real Estate Investment Managing Partner for Maven Investment Group (job, if you want to call it that…lol), and I am putting together classes pertaining to buying homes for first time home buyers. To wrap this up, I am actually only doing one thing, which is Real Estate, but I have created several different income streams from it.

    Posted by AgentMaven | October 29, 2009, 3:03 pm
  19. This is actually a good topic…I’ll end mine with one more comment towards AgentMaven..

    You are correct about finding the “one thing”. In business it’s called a Core Competency. It’s basically what you do the best and building from it. Take Honda for example…they make a ton of products: Cars, Motorcyles, Trucks…but many don’t see the smaller products, Lawn Mowers, Power Generators, Snow Blowers, and Water Pumps. The one thing they all have in common is the ENGINE which is Honda’s true product. They found a way to take an engine, make it the best, then expand upon it.

    Another example…NIKE, we all know what products NIKE has, but is shoes and clothing their competency? No sir…because they aren’t really the greatest products out there…it’s MARKETING. It’s what they truly do best, because I can’t tell you how many “air bubbles” have popped on my Nikes, but I can tell you what made me buy them, and why I keep coming back…LMAO!!!

    Finding a competency is easy…but being good at it and building on it with innovation is the trick. The winners in this game are those who invest in their competencies and outsource what they aren’t good at (i.e. stereo systems in Honda Accords or the material used in Nike’s clothing).

    Ok…that’s the last comment I swear!!! LMAO.

    Posted by WBeamen | October 31, 2009, 4:56 pm
  20. WBeamen AgentMaven – I like that. I never thought about building different incomes around one core competency. Even though I am and have done it subconsciously, I never really just focused on it. I think I like that.

    Also, I realized marketing is so major with products!! I sat down and really thought why did I have to have a BMW over the next car. But more importantly why would someone buy a Lexus over a Toyota. They are really the same exact car!! But I digress.

    P.S. WBeamen, comment all you want! The Sky is the limit!

    Posted by TheMoneyMaven | November 1, 2009, 11:25 am
  21. Man I have to get in on this good comment action.

    I have been listening to Warren Buffett’s book, “Warren Buffett And The Interpretation Of Financial Statements” and it is excellent! I mention that here because in the book he focuses on investing in companies that have a durable competitive advantage in their industry. Not to dive to deep into the content of the book, but Warren spends all of his time in search of those special companies because he knows they will make him wealthy in the long run if he continues to hold on to them.

    Like WBeamen stated in his comment understanding what your good at and building on it is vital, this is essential to any great business that has longevity. The same holds true for our own ideas we put in business models. And if you can figure out a way to automate what you do best, and outsource what you don’t do best, you will create passive income that leads to wealth.

    Please keep the comments coming.

    Iron sharpens iron!

    Posted by RedMaven | November 2, 2009, 9:10 pm
  22. MoneyMaven. Im loving this because this is exactly where I am. I realized that my 9 to 5 will not lead me to success. I am not saying that working a 9 to 5 cannot lead to success. I believe “success” is setting goals and meeting them. Unfortunately for me my goals cannot be met with my everyday job. I am very excited about projects that I have coming up but like u said I want to first understand everything. I preciate the website and look out for me. Im coming.

    Posted by Naud | November 8, 2009, 5:22 pm
  23. Naud – I see you! I definitely think if you stick with your goals I will see you at the top. If you have any questions feel free to ask and thanks again for the comment!

    Posted by TheMoneyMaven | November 8, 2009, 5:25 pm

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