Wealthy people are those who have learned how to get their money and resources to do more than one thing for them at a time — they know how to put their assets to work for them to make more.
It has been said that if given $1 million, the average person would misuse that money in less than 10 years and end up with the same sum of money they started with. But a financially principled person knows the power of the “multiplier effect,” and rather than squandering or sitting on their resources has learned to put them in motion to continually make more.
Here are 6 ways to put money and resources in motion to make more money:
- Turning a profit again and again from a single notion. How many times have you had an idea pop in your head that you thought was an absolute stroke of genius? Have you ever considered that some of these ideas could be set in motion to create additional wealth? One of my clients I’ll call Mindy did. As a dental hygienist she spent countless hours pouring molds of people’s teeth. As she poured the molds she thought it would be a fun idea to use plaster to make molds of a baby’s hands and feet. From that idea she designed a keepsake product for parents to make molds of their children’s hands and feet, the first such product of its kind. In the beginning Mindy sold over 40 of these kits a month. In time, retailers like Walmart and Shopko began signing distribution agreements with her to sell her kits in their stores. Sales took off and Mindy was asked to appear on QVC where she sold over $100,000 of product in less than 8 minutes. Mindy no longer works as a dental hygienist and the “little idea” has begun turning a profit for her in a way she could never have imagined. This one idea, which she had in one single moment, is now producing untold wealth for her over and over again.
- Making money from existing property: Chargingsomeone to live or work within a space is an obvious way that people can make a profit from an existing asset. Finishing a basement of an office building and then renting it out can be a great way to do this. If you don’t have the money to finish the basement space of an office or home, you could find a tenant who is willing to improve the space all while getting credit off the rent for the money they spend on making improvements. The right tenants will like this arrangement because they don’t have to pay rent while they are using the space and making improvements on it, and you as the landlord will love it when you get a finished rental space out of it that you can then charge full rent on.
- Getting your talent to reward you again and again. We all have skills we use on a daily basis, but when was the last time you examined all your talents to determine which of them could be used to turn a profit for you? If you have writing skills, for example, you could use these as a ghostwriter or other professional writer and then receive royalties on that writing for years afterward. It only took you a few months or even a year or so to write the book, for instance, but if you structure contracts correctly, you could be receiving a profit from that one-time effort for years to come.
- Leasing: Turning need into a continual source of profit. One Money Mastery client wanted to get into the wedding business by leasing wedding decor. When she ran across a sale on Amazon for 25 white bistro chairs at a really good price, she bought the chairs and began adding to her collection over the next several months. After a year, she had 250 chairs that she stored in a shed in her back yard and began renting out for garden wedding receptions. She average four weddings the first summer, recouping half of her investment. After two summer wedding seasons, she had replaced the cost of purchasing the chairs and now turns a continual profit every summer of at least $4,000 between the months of June and September. There is very little cost for her to store and maintain the chairs, so she keeps most of the profit. Buying equipment once and leasing it over and over again is a very lucrative way to put money and/or resources in motion to create more.
- Buying trust deeds to generate additional wealth. If you have a chunk of money you can work with but don’t know what to do with it, other than not wanting to risk it in the stock market, why not consider buying trust deeds on bankrupt properties from banks? One of my clients I’ll call Guy did this for approximately 18 cents on the dollar. At one point he became interested in a defaulted triplex with a price tag of $140,000. Its actual appraised value was $$190,000 but Guy offered the bank $50,000 to take it off their hands. At first the bank balked at his offer, but knew it wouldn’t be cost effective to try to maintain the property until it could be sold closer to their asking price. The bank did not want to be hassled with trying to find tenants and keeping up the grounds so it sold the property to Guy. He then found suitable renters and began renting each unit for $850 per month, generating over $30,000 in one year. Using this profit, he made improvements on the property and turned around and sold it for $225,000. He then used his profit margin on this property to buy additional defaulted trust deeds to continue to the process.
There are lots of ways to make your money and resources work for you if you will just take the time to think about what you’ve got and how it could be put to work for you. For more information on this powerful concept, contact me, firstname.lastname@example.org.