Besides reading as many articles and books on the subject as you can, here are some tips that aren’t immediately obvious.
1. You must have money in order to make money by investing
It sounds obvious now but many first-time investors, don’t know this.
Many young adults and teens ask for investment advice in forums and on social media, and register surprise that they need money in order to start investing.
One can’t make a 10% annual return on investment on RM0.
But this lack of understanding may stem from environmental factors. High-income families tend to have more conversations about business and investment than do others.
2. Pick one to do first: Save money or earn money
Now that you know you need money to make money, which is a better way to get their initial sum of money – by saving or earning it?
Some people belong to the #savemoney team, others to the #earnmoney team.
Ideally, if you want more money, you should do both. But many are naturally drawn to their “default”, which is either saving money or earning money.
It is understandable why. Doing both simultaneously can be overwhelming. Some people are like… “cook my meals at home AND work extra hours as a Grab driver? No thank you!”
This list of pros and cons below will help you make a decision.
Saving money: Pros
• Easy and intuitive to start. One just has to reduce “entertainment” spending, or simply stay home more often.
• Can be turned into fun lifestyle experiments. For example, reducing one’s food budget by going on a cook-at-home vegan cooking challenge.
• As the quote goes, “It’s not how much you earn, it’s how much you save”, which is true.
Saving money: Cons
• Impossible to do if you’re not currently earning an income.
• There’s only so much you can cut from your budget before all that’s left are essential items.
• Hard to sustain for people with a shopping addiction or self-control issues.
• Some money-wasting habits like smoking is hard to break.
Earning money: Pros
• Technically unlimited income potential.
• Easy to enter the gig economy and become a freelancer/independent consultant. Tonnes of opportunities here.
• The opportunity to turn a hobby into a source of income.
• If done well, will bring amazing self-satisfaction and fulfilment.
• Comes naturally for some people. Some get started simply because others know they’re good at the skill and get work requests, for example home cooking, home repairs, etc.
Earning money: Cons
• High-paying gigs are practically non-existent for unskilled and low-skilled individuals.
• Tough for people who don’t have time, capital, equipment and/or contacts.
• Mindset matters. People with a “fixed mindset” tend to give up fast.
• If not done well, will affect relationships and health.
• Analysis paralysis – don’t know what to do or where to start? Should you negotiate for a higher salary? Earn a side income? Which one? Picking one is hard.
Look at the list of pros and cons, then pick one for now. You can do the other later.
It doesn’t matter which road you take because the destination is the same – financial independence (hopefully).
3. When in doubt, try it out
Each failure to make money serves as a lesson to be learnt. Or like Thomas Edison put it, “I have not failed. I’ve just found 10,000 ways that don’t work.”
4. Less talk, more action
Some people never make enough money because they complain a lot. They always have an excuse as to why they can’t do something instead of how they can.
The fact is, people who do what they have to do to make money don’t have the time to complain.
If you could go back in time, you would wish you spent less time complaining and more time doing. The latter makes money. The former doesn’t.
Here are some examples:
• Instead of complaining about the high cost of living, do more things to save and earn more money.
• Instead of complaining that salaries are low, learn high-value skills and switch to that industry.
• Instead of complaining that the government is not doing enough for your industry, make the proposals to create opportunities anyway.
This article first appeared in ringgitohringgit.com/money-making-tips/
Suraya is a corporate writer-for-hire and the blogger behind personal finance website Ringgit Oh Ringgit. She is more of a minimalist, less of a consumerist, a konon DIY enthusiast, a let’s-support-small-businesses-over-big-corporations kinda girl. Prior to her current role, she worked in various capacities within the non-profit industry.