How to Make More Money
How to Make More Money
If you want more money there are three things you need to do:
- Produce.
- Trade.
- Save.
The financially successful, develop their ability to produce, trade and save.
1. Produce.
If you want to earn more money, you need to have something to trade in exchange for money. That means you must produce something.
Production splits into two sets. You need to produce a Product or offer a Service.
Produce a product, means produce tangible goods, such as cakes or cars, a toaster or a table. You need to produce, or be involved in the production of a tangible product, that you can offer to others. Or,
Provide a service. A service is a non-tangible item, such as the ability to teach, play music, clean cars, play football, or repair lawn-mowers. You are selling your labour, your skills or knowledge.
Or you could do both.
You can combine these two aspects and both produce a product and provide a service. In fact, most companies do both. They provide a service, together with some tangible products. Or they provide a tangible product, together with associated services. For example, I bought a BMW car, (a tangible good) and the company offers a high degree of after sales service.
You need to be involved in one, the other or both.
2. Trade.
The second element is to successfully trade your goods and services, with others who have the money and the willingness to buy.
Trade also involves two subsets. Marketing, and selling.
Marketing. Marketing is the art of getting your name out there!
You need people to know about you, your products and your services. If nobody knows about you, then you won't make many sales.
Sales. Trading with others means perfecting the art of making the sale.
You need to communicate and negotiate a trade with others, who would like to have your product or service.
Sales is the missing link in most people's communication skills. Most people don't know how to sell themselves or their product or service. In a free market economy, Sales makes the world go round.
3. Save.
If you successfully market and sell your product-service, then you will have some cash flow. Your next trick is to make sure that you save some of it.
Don't spend it all. Almost everyone spends more than they earn and they get into debt.
- Governments spend more than they earn, and they get into debt. Example: Greece.
- Companies spend more than they earn and they get into debt. Example: RBS.
- Individuals spend more than they earn and they end up in debt.
Here is the golden rule of personal finance:
Spend less than you earn and invest the difference in things that gain value over time.
Memorise that message and ponder its implications.
Spend less than you earn and invest the difference in things that gain value over time.
Successful people often invest in property; which gains value over time.
Most people do the exact opposite.
Most people, spend MORE than they earn, and they buy things that LOSE value over time. (Bad money managers blow their money on flash cars, which lose money over time.).
You need to be able to save, so that you have some money to invest. You need to invest in your future: you need money to develop your products and services, your marketing and sales.
Product-service development, marketing and sales skills, all cost money, and that money is best taken from savings that you have accumulated by previous activity, rather than by borrowing money to fund your future.
Everyone needs savings. most people don't have them because they spend MORE than they earn.
Summary
If you want to do well:
- Spend less than you earn and invest the difference in things that gain value over time.
- Improve your personal marketing and sales communication skills.
- Develop your products and services so that they are better than your competition.
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Definition: Spend Less Than You Earn
In personal finance, the rule "spend less than you earn" says you must always keep spending below income, set the spare cash aside for things that grow in value, use a clear budget to guide choices, and stay free of consumer debt. Do all four and your money base grows steadily over time.
Show CG4D Definition
- Yearly spending stays below net income
- Surplus money is put into assets that rise in value
- Daily choices follow a written budget or plan
- Consumer debt is avoided so capital can build
Article Summary
You make more money when you create real value, tell the right people about it, exchange it for a fair price, and keep part of every pound earned so you can invest in your next idea. Produce, trade, save – repeat – and your wealth grows.
Frequently Asked Questions
Here are some questions that frequently get asked about this topic during our training sessions.
What counts as a product or service when trying to make more money?
How can I get people to notice my new product or service?
What is the "golden rule" of personal finance mentioned in the article?
Why must I save part of every pound I earn?
How does selling differ from marketing when trading goods and services?
Can I increase income without borrowing money?
What should I do with savings to help them grow?
Thought of something that's not been answered? Ask Us Today!
Did You Know: Key Statistics
HMRC recorded 753,168 new sole-trader registrations in 2022, a 21% rise on 2019 levels, showing more people now produce and trade their own goods and services. The UK household saving ratio reached 10.8% in Q1 2023, almost double the 5.6% seen in 2019, proving a stronger focus on saving and investing.About the Author: Chris Farmer
Chris Farmer is the founder of the Corporate Coach Group and has many years' experience in training leaders and managers, in both the public and private sectors, to achieve their organisational goals, especially during tough economic times. He is also well aware of the disciplines and problems associated with running a business.
Over the years, Chris has designed and delivered thousands of training programmes and has coached and motivated many management teams, groups and individuals. His training programmes are both structured and clear, designed to help delegates organise their thinking and, wherever necessary, to improve their techniques and skills.
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