The Only Way to Make Money
Every six to eight months I take a day to binge Medium. One time I came upon the gifted writings or Matthew Kent.
Recently, we got together to record a podcast.
In our podcast he said:
“What’s interesting with me is I think my path is pretty typical of a lot of people. Growing up and going to school, I felt like, “Why am I here?” Maybe there’s just a little bit of a rebellious spirit in me. I mean, I understand the point of schooling overall, we’ve got to educate the young people. But there is this kind of weird, nebulous idea that “I’m here and I’m going to learn what I need to know to make it in the real world.” But what does it even mean to “make it” in the real world? A big part of that is that you have to make enough money to feed your family, to do the stuff that you want to do, and survive. There’s this progression or this path that you go to school, then probably go to college, you decide on a career, and you get into that. But you are sitting there in high school during the day and you just learned about the difference between an igneous and sedimentary rock and you feel like, “How am I supposed to use this?” They don’t teach you about the topics that you really need to know about. You’re supposed to be doing all this so you can make it in the real world and make money. No one ever stops and says, “Well, here is how we think about doing that.” There are different reasons people get into teaching but some of them like to teach and that’s why they are there, but in all honesty, others are there because they need a job. They don’t even necessarily know how to make money. Some teachers got a degree in their subject and they are there teaching that to you.
“At some point, I ended up in this soul-crushing, dead-end job. I looked around and thought, “I could pursue climbing the corporate ladder.” It’s not a bad path for everyone necessarily. However, my boss was answering emails at two in the morning, traveling for work all the time, had all kinds of stress, and was constantly complaining. That’s not something I wanted for myself. I needed to make up for what was lacking in my education. If I wanted to know how this making money thing works, I was going to have to start thinking about it and figuring it out for myself.”
We aren’t taught a lot of the characteristics we need to know to #adult.
We aren’t taught about money. We aren’t taught about emotional intelligence (which is my jam! We’ve got to be nice people). We aren’t taught so many of the elements that are integral to the growth of humanity. They just leave it out of our education. Instead, our schooling only teaches us to all be managers for corporate businesses. They don’t teach us how to make money and the one way we make money.
So, you’re probably saying, “Only one way to make money? Are you insane?”
Okay, the truth is that there are a billion ways to make money and good money at that. If you think about it though, a lot of the ways we can make money in 2019 didn’t exist ten or so years ago. People can make millions being Instagram influencers. If you had told that to someone back in 2009 that would have looked at you like you were crazy!
For another example, people used to say that we needed to focus on school and stop playing video games. Video games, they said, we turn our brains to mush and make us lazy delinquents. Now there are video game competitions like The Fortnight World Cup. You can literally make a living playing video games if you are good enough.
Yet another example is make-up. So many people told us girls not spend so much time on our make-up because of vanity. Now there are literally people out there who make money by leveraging social media to show off their make-up and sell make-up.
There’s more to the picture than what we’ve originally thought about.
We need to stop and think about how money is made in general. Then we can figure out how to craft a career we actually enjoy, that we can leverage to make money, and that gives society something that they actually value.
If we were to ask the average person, what do you think they would say if we told them there is only one way to make money? They’d (most likely) say get a good job. Society pushes this on us saying, “Be a doctor or a lawyer!” It’s not for everybody, though, and we are pressured to accept it. College-aged students are told to “pick a degree” without knowing all that much about the world or about themselves. They are pressured to pick this degree that will define their job for the next 40 years. It’s terrifying because of the pressure to pick the “right one” so they can get that “good job.” It causes so much stress.
If you ask entrepreneurs the same question, they’d say work hard for it. Hard work is a part of it, but there’s more. You need to aim at the right things and do things the right way. Doing things the wrong was or aiming at the wrong goal.
If we all knew what it took to create money, we could all create situations for ourselves to create money that are much, much better than what we’ve been stuck with by default.
So, what is the only way to make money?
The Only Way to Make Money is By Selling.
Luckily, there are so many things you can sell. You can sell a product, a service, or an asset. You can rent stuff out. Renting is like selling an asset as a service (like renting a house or a power drill). You can sell someone else’s product, service, or asset and sell it (this is known as affiliate marketing).
Think about the way that you spend money. We live in a transaction-based economy which means someone provides you with something that’s valuable to you and you hand your money over, most of the time without thinking too much about it. This could be food, a service, a product, or an asset. Making money is the same thing but in reverse. You say, “I have this item you want or need and in exchange for that money.” There’s an infinite variety of ways we can do this.
What is the most common thing people sell? Time.
There’s nothing wrong with selling your time, to an extent. Some people even get a lucrative rate for their time. For example, if you work as an employee, you’re selling your time for a wage (if you’re paid by the hour) or a salary (if you get paid by the year). Service providers like consultants and virtual assistants can be paid very well if they can make their time as valuable as possible or even charge by the project.
The problem with getting paid for your time is that time and money are two constraints that many of us have. They are obstacles in living the life we want to live. If you don’t have these constraints and obstacles, then you probably wouldn’t be here reading this blog post. We need time and money to do the things we want to do. Ultimately, time is going to be more valuable to us. On our deathbed, we say, “I wish I had more time.” You probably aren’t going to say, “I wish I had more money.” You might, but I bet you that you wish for more time instead.
A common mindset is that you have to trade time for money. This works well when you’re younger. You have more time. But at some point, it starts to flip, and it will flip but not at the same time for everyone. You might want to spend more time with your family than make another X amount of dollars. Maybe you want to travel and see the world rather than trade that time for money. Perhaps you just want to relax and enjoy life rather than spend your days working your life away.
The Wait But Why blog has great illustrated posts about how to visualize your life. One of the posts is called The Tail End, he had different visualizations where each square represents a week, month, or year. Doing this, he found he could calculate how much time he had left to do different things.
We need money.
We know that trading time for money works because people are willing to pay us for our time. But what’s a better strategy? The interesting thing about time is that while we can save time, we can’t spend it later. We can’t save time like we can save money. If we say a colloquial like, “I saved ten minutes,” we actually mean that we did something more efficiently. Those ten minutes are gone in ten minutes. You can’t put them in the bank and save them up for later.
There are three things we can do with our time.
1. We can waste it.
This isn’t always a bad thing but it provides no current or future benefit. Things in this category include scrolling mindlessly through Facebook. Your mind is under control of this algorithm and you see if anything interesting pops up. This can become a habit and you have to watch out for that.
2. You can spend it.
Spending time is intentional and provides you with a current benefit but not necessarily a future benefit. Working for an employer falls under this category. You go to work and the hours you put in are basically spending time. You’re spending time and trading your hours for dollars. The drawback of this is that you won’t get paid in the future for the hours you put in ten years ago.
3. You can invest time.
Time is a resource just like money. You can invest time like you invest money. If you invest your time creating something you can sell. People have problems grasping this. The time you invest upfront will probably not be paid, but the product you sell can be purchased over and over and over again without you spending any more time on it. You can also scale it up without having to invest much more time in it. A classic example is a book or a CD. You create it once and you can keep selling it. Sure, you may do marketing like book signings or concerts, but that CD (or digital download!) or book keeps making money. They put in some work that they didn’t get paid for (and may have had to pay for) and sold as many copies as people they could reach.
Change Your Mindset
People balk when there’s no guarantee. They don’t want to spend all that time writing that book for it to flop. They don’t want to spend all that money learning strategy for it to get them nowhere. If this describes you, instead of getting scared you should change your mindset.
The core mindset change that needs to happen here is the one that views failure as being final to one that views failure as a stepping stone to success. The definition of failure here is a disappointment. Maybe your course hears crickets or your book only sells five copies and gets three two-star reviews on Amazon. You can think, “Okay, this isn’t for me,” and stop. Or you can think, “I wonder what was wrong with this. What can I do better in the future?” and decide to try again.
Experimentation is part of entrepreneurship. You keep learning and trying until something clicks and momentum takes over. Entrepreneurship is not a one-size-fits-all path. Everyone must try and try again until they make their own way.
Human brains are not equipped to think about compound interest.
Compound interest is the basis of all good things in life. When it comes to investing money, compound interest doesn’t look like anything at first. You say, “I sacrificed all this money and it’s only made a little bit of interest on top of it.” But the new balance will make interest on it, and it will grow and grow over time.
The same thing with investing your time. Don’t get caught up in the idea of “how much am I getting paid per hour.” It’s important to move past that so you don’t feel like “I invested X amount of time into this project and only made Y amount of dollars and if you do the math that’s a lower rate than what I make selling my time to my employer at work.” You need to keep putting yourself and your work out there and make more connections.
Each additional book/video/blog post you make with be an additional opportunity for someone to see your work and connect with you. Then they can see all your other great content and even subscribe. You have to have the mindset that you are going to be in it for the long haul.
Choose the mindset that you can do, a “can do” attitude. Say to yourself, “It’s not that I’m a failure. It’s that I’m just getting started. I didn’t know what I was doing. I need to learn and grow and try.” Many people don’t see the hard work, sacrifices, and behavioral changes that you have to make to change and grow.
Hard work and results are synchronistic.
The hard work creates conditions where others see your content and share it. You never know who that one person who could make a difference could stumble across your work. You never know when that one share could make your work go viral or when that piece of content that resonates with everyone will set the internet on fire. You might call it “luck” but it would have never happened if you didn’t put in the hard work.
Patience is so important. It’s not going to happen instantly. It’s important to have patience especially when you feel like you’re failing. You’re only failing in the try. Change it up and try, try again. Going a little woo-woo on you, but you have to trust that it’s all going to work out.
Trust and mindset are so key here. The book “Secrets of the Millionaire Mind” by T.R. Vekker has seventeen mindset shifts you need to adopt if you want to build wealth. One of them is “rich people see opportunities while poor people see obstacles.” This is so true for entrepreneurs. There are going to be hardships, failure, and things that you don’t see a way around. Instead of being paralyzed because you only see the obstacles, you need to look for ways around them and chase the opportunity.
You can find obstacles in everything. Are you thinking about the opportunity that’s there, or do you only see the obstacles in whatever you want to do? The person who focuses on the opportunities will be successful. The person who focuses on the obstacles will be over here saying, “I had that idea! I just didn’t know how to get started.”
Tell Your Friends Wisely
My biggest grievance with people is that they always say something to the effect of, “You want to be prepared.” I have so many ideas – big surprise, I know, I’m an entrepreneur – and when I talk to family members and friends they say this. No, you want to start before you’re ready!
On the note of telling people, you need to be careful. It’s normal for you to get super excited when you’re thinking about a new idea or project. Family and friends think that they are doing you a favor when they try to bring you back to reality by telling you that there is this problem or that.
However, if you tell them what you are doing and what the initial result is rather than your ideas, they will be much less likely to rain on your parade since you have momentum. Instead, they’ll say something like, “Oh, you’re doing this? That’s cool!” I’m not saying don’t tell people, but one of your friends could have a toxic mindset that will shoot you down before you can get off the ground.
You have to decide that you’re going to be happy – even if it doesn’t work out.
Think about a baby who’s learning to walk. No one looks at a baby who takes their first steps and falls over and says, “Psh, this baby clearly isn’t a walker.” No, instead they see a baby taking their first steps and exclaim, “Oh, my goodness! She’s taking her first steps!” This should be the mindset we have. When we are doing something new, we shouldn’t expect to walk (or run) right away. We should, however, celebrate the progress we make.
In the book Mindset by Carol Dweck, she talks about the fixed mindset versus the growth mindset. The fixed mindset instills in you that everything that you know about yourself is the truth and that you can never get more than 5% better. This means you believe if you’re not already exceptionally good at something then you’ll never be exceptionally good at anything. In the growth mindset, you believe that you can develop your talents and skills, whether you’re good at them naturally or not. It’s all about deliberate practice and knowing you can learn new skills and level up the ones that need it.
The one way to make money is selling, but there are a billion different ways to do it.
Some combination of skills that you have can be leveraged to do just that. If you want to get into the new media (podcasts, blogs, video, etc.) then you need to use your skills to educate, entertain, or inspire your audience. That’s what they want.
To make money with this, you can sell advertising, selling someone else’s product through affiliate marketing, products, online courses, printables, ebooks, etc. I just want you to find some way to leverage that trust you built with your audience by providing them a valuable service. If you can change and adapt, you can make money and find profit anywhere. Roads of opportunity will open for you and it’ll seem like magic.
Matthew Kent signs off by answering the question “What words of advice would you give our listeners?”:
“We need your contribution.”
P.S. Matthew Kent has added a webpage full of goodies and freebies for Becoming Virtually Free readers and listeners. Check out his website here.
*This blog post was taken from The Virtually Free Podcast with Amy Demone with special guest Matthew Kent. Listen here.*