The world is littered with bad advice on how to make money, and knowledge is the key to making money. There are many ways to make money, and while most of the information available, that is not a scam, is correct that it is a way to make money, remember the saying “Work smart, not hard”. How do you do that? What must you know and what must you do? You’d be surprised that it is not that hard, but very few learn how to make money properly, because you must self teach yourself. Most people would rather pay tens or hundreds of thousands for someone else to teach them. If you can’t self teach yourself, you won’t have the self motivation to execute either.
Educate Yourself
First thing first, you must educate yourself on general business and investing terms, methods, and techniques. Working as an employee makes you money, but only when you are actually working. Whether the owner is working or not he is still getting paid though. Do not waste time on reading articles about how to make money quickly or how to make money easily as most of these will tell you how to make pocket change. The truth is if you want to learn how to make money easily, it’s not going to be so easy at the very beginning. You’ll need to study hard and learn from experience. You must understand what cash flow is, what gross and net income are, what cash on cash return means, what the difference is in habits between the rich and the poor, and the importance of using other people’s time and other people’s money. Explaining all that you should know in this area would take an entire book, or several. I would highly suggest you learn how to make money by reading Rich Dad, Poor Dad: What the Rich Teach Their Kids About Money–That the Poor and Middle Class Do Not!
Reduce Debt
Second, if you have debt, come up with a debt reduction plan, and work on paying it off. Paying off debt is as good as generating new income. It increases your cash flow, which turns into your available cash you have to use in generating more income. I would suggest using the debt snowball technique to get your debt paid off. To summarize the technique, it goes like this: Add up all your minimum payments, add extra to the amount (how much more can you afford to pay), pay the minimum on each and add all the extra to one payment to get that one paid off first. Once it is paid off, use the same amount you were paying, and pay all the extra towards the second one you choose to knock off your list, and so on and so on, until all are gone. For some wise advice on eliminating debt, visit this blog on debt negotation.
Earn Passive Income
Third, start generating passive income. What is passive income? Passive income is money received on a regular basis with little effort required to maintain it. What are some passive income methods?
- Earnings from owning a business that does not require direct involvement from the owner
- Income from real estate rental properties
- Royalties from licensed patents
- Royalties from publishing a book or other intellectual property
- Earnings from internet advertising and sales
- Earnings from repeat sales of products and services that must be renewed
It takes work and dedication, but mostly, it takes education. It is not hard to learn. You don’t need to be a genius. And I wouldn’t exactly call it hard work either. But it does take self-motivation and follow-through. In fact, most people that get paid passive income start out doing it for themselves to gain the knowledge and then outsource the work to others to sustain growth of their income. If none of the above sound like fun to you, think harder about the first one. Start something you like to do, figure out how to make money off of it, start generating income, then train others to do the work for you. You can never get laid off or fired, and you can have as much free time as you’d like.
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