Be Your Own Boss

Zion, IL
By A.B. Dada
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Someone at a church I work for asked me this weekend “How can I make money fast?” It’s the third most common question I’ve heard this year. My fast respond is: “Learn how to spend it slow” but that doesn’t help people who are in dire straights. As far as I can tell, there is no way to help yourself when you get to the point that you become desperate for money. My recommendation for most is “Get a second job” right after “Stop spending.” Yet I hear so many ridiculous schemes for making fast money, that I realized I had to write something quick — and email the link to everyone who has asked me the magic question.

Before we can even look into opportunities in making money, fast or otherwise, we need to look at the four primary ways one can make money. I say primary as there are other ways to receive an income, such as gifts and inheritances. Those are rare enough that they’re more a bonus than something you can aggressively find a way to receive.

The four primary ways are the title of this article, and I will define each one:

Jobs: A job is a process at which you exchange labor for income. You work, you get paid. Jobs can vary, of course, in amount ofpay, speed of pay, and security/consistency of pay. I prefer high commission/low salary types of jobs that are tied to my performance. Many people prefer consistent pay so that they can budget based on expected future income. In my experience, a good performer on commission has better job security than a wage earner, but many people have no opportunity for performance-evaluated commissions or bonuses since their jobs don’t have a way to gauge their performance. Some of the other income sources may have a portion of their income produced through work, so they might partially be considered a job.

Investments: An investment is a process where you put up your own capital, usually money, in exchange for a share of future profits. In order for a process to truly be an investment, it MUST return portions of the profits on a regular basis (quarterly or yearly is common). Profits are usually called dividends, and if they are not issued, the process you put money or capital into is not an investment, it is a gamble. An investor is properly seen as a co-owner of a business or venture.

Gambling: Gambling is a process where you risk money in hopes that you will receive more money after the process than you risked. Gambling can come in the form of casino wagering and lottery tickets, but the process of gambling is also common in most processes we mislabel “investing.” Gambling inherently has more risk, and less reward, than investing.

Savings: Savings are safe investments, with insurance or a guarantee product that protects the future value of the savings process, without adding the benefit of an upside reward. If an investment has a guaranteed upside, and no downside possibility, it is savings, not investing. Insured CDs, money markets and savings accounts are typical savings processes. Uninsured savings is an investment, and in some cases it is a gamble.

The primary focus I have in recent years is to stop using the term “investment” for most stock and bond market deposits. Every month I’ll receive an email asking me about the latest “get rich quick” stock scheme, which historically have made someone else rich, but the “investor” poor. The reason why most stock investments are gambles is because they are not truly investments. I have reviewed numerous stocks over the past 15 years, and very few of them are investments. Almost all of them are gambles, especially stocks that have the potential for fast money (and fast losses). Why is this? Most stocks don’t issue a realistic dividend or profit-share. If you buy a portion of a company, you should have a direct payment in positive performance of that company (profit) or you may have to pay a direct payment in a negative performance (loss). Stocks today rarely issue dividends of any value. If the company you own makes a 20% profit at year’s end, you should get an equal portion of this profit based on how many shares you own versus how many shares are outstanding. If you own 1 share out of 100, and the company makes $500 profit in a year, you should receive a $5 dividend as income. This is an investment. Instead, if the company generates $500 in profit and you receive nothing, but your stock value goes up slightly, this is a gamble. You are looking for someone else to buy the stock from you, but that is more risk than reward.

Many people explain that companies that don’t issue dividends ARE worth more money over time because they reinvest their dividends to grow the company. This is true — and a good reason why the gamble of investing in them can pay off. Yet the only way a company that continuously reinvests will ever pay you a profit share is if it is liquidated (usually in bankruptcy, pushing the value to zero), or if they change their policy towards slower growth and higher profit sharing. I won’t touch companies that don’t issue profits/dividends on a regular basis. I don’t gamble in that market as there is too little transparency in running the company.

That doesn’t mean I won’t gamble. I take gambles when I risk my own capital to enter a new market for a business that can’t possibly pay a profit early. As soon as the company becomes profitable, the process switches from a gamble to an investment. Before the first profit, it is a pure gamble. I also like low house edge games at the casinos on a rare basis, such as craps. This is pure entertainment value, though, and I know that mathematically there is no possible way to beat the house after infinite hands of play. The entertainment value is not financial income, but it is a profit in terms of increasing my enjoyment. I prefer wagering in craps than buying a stock that is assumed to go up in value (but not pay dividends). I don’t recommend casino gambling for people who want to get rich, though, as the longer you play, the more likely you are to lose everything. There is only one way to bet in a casino that decreases your long term chance of loss, and gives you the only chance for a bit win: double or nothing on your entire stake. Betting $5/hand out of a $500 bankroll in a casino will generally get you to $0 over the long run, as the small house edge chips away at your wins. Betting $500 on one hand gives you the best opportunity to making money, since the house edge only comes up on the one bet. Mathematically, it doesn’t matter much either way, but it is far wiser to take the big risk for the big reward than take the little risk/little reward with the same grinding edge. Again, I don’t recommend any form of gambling to make money fast — neither stocks nor the craps or blackjack table.

Savings, to me, are a way to save your money without risk. Most savings have a negative result, though, as the interest rate paid is far lower than the cost of inflation (inflation being the process at which our government prints more money over time, making your money worth less, so the price of products goes up). Even a 5% CD is a negative investment if the cost of goods in your house go up 10% a year. It would be far wiser to take a risk and buy a lifetime to toilet paper today than invest that money in a CD and buy less toilet paper as prices go up over your life. Of course storage is an issue, but it’s just an example of bad savings.

So how do you make money quickly? In my experience, the fastest way to make money is to find a target audience with a strong need that they won’t do themselves. That target audience should be wealthy, and their need should be easy to close a deal on. There are many examples of strong need in the wealthy homeowner market, but penetrating that market is difficult, so the risk is high.

I’m always surprised at how well some young ladies I know do just by petsitting and petwalking, but this is a job that is sold more easily by an attractive young adult than by a 30-something dad. I have many pets, and I can tell you that they’re a pleasure, but a money pit. People will feed their dogs and cats with food that is more expensive than the human food they consume. Some wealthy households spend 5 figures a year on veterinary care for their pets. The labors of taking care of a pet can be a worthwhile form of income, but they’re very time consuming. It’s a tough market to penetrate.

Of course, before you can focus on monetary growth, you need to focus on cutting spending. Reducing spending is the easiest thing a person can do to see an instant return on their time and income. The hardest part about quitting spending is your pride, but I found there is more pride in being financially stable and owning less than being a financial wreck but living rich. When I sold my Land Rover and started to drive a 10 year old Nissan, my respect from my wealthy friends went up, not down, as they were amazed that I would accept an old car that cost me nearly 1/10th the maintenance cost of the expensive one. That savings alone allows me to travel almost 5 weeks more per year! No one asks me about my car, but they ask about my trips. That’s clout, and something to be proud of, I feel.

How about MLMs, or so-called pyramid schemes? I do believe they work, but only for a rare few who are really aggressive and dedicated to the program. I own and run an MLM myself (currently in the testing stage, but about 6 weeks from going public) that I think many of you may actually be interested in, because it is a “no-sell, no pressure, low risk” style MLM. The 18 week trial run as shown that over 90% of the people who invested early have made their money back and at least 200% more in return over that time frame. I was shocked at the simplicity of the program, and the low risk and seriously zero work needed to generate an income. I was also shocked that no one else thought of it. I will post details to the MLM in coming weeks, so stay tuned (and subscribe to our RSS feed or email updates).

I do believe that there are get-rich-quick schemes that are legal and relatively safe, but they require a huge commitment. They’re better suited for the unemployed but cash-rich. In order to make money, you have to have some money to live on, to purchase hardware or software, and to market your product or service. If you have no money, your own solution, honestly, is to get a job. Get two jobs. If you don’t have kids, get three jobs.

Many people ask me about how to make money on the Internet. I want to dig deeper into the programs and tactics I use to generate a reasonable amount of money on my websites. Lately, though, my sites barely break 5 figures annually, so the time spent working on them pays less than minimum wage. I do believe they’re a net positive, though, and they’re a huge profit in terms of information I learn from comments and emails. They’re also a form of entertainment for me, better than watching the telly most times.

So I’m sorry to say that there is my answer to how to get rich quick:

1. Cut spending to the bare minimum. I’m serious about the bare minimum. That means no cable, switch to dial-up Internet, reduce your cell phone minutes to the minimum and cut out text messaging (changing your number if you have to), stop eating out, stop driving far for useless pleasures, and quit drinking and smoking if possible.

2. Increase the amount of time you spend working. If your boss won’t give you more work, get a second job. I know one friend who earns over $80,000 per year at his primary job, but works two more jobs for less than $14 per hour each. He is deep in debt.

3. Make savings a priority over paying off debt if you don’t have a nest egg. Having some money in the bank now versus putting it all to paying off debt is required if you want to take some of the edge off of how you will survive a short term problem.

4. Consider selling assets you have and don’t need, even if you take a big loss. I find that getting rid of extraneous televisions, video game systems, and even books results in freeing up some of your time for a temporary second job. The number one reason why people seem to not want a second job when they’re cash poor is laziness. Take away the things you do that make you lazy, and you may find yourself driven to acquiring that second job.