?You have to spend money to make money? is a popular business adage but the wisdom of this advice can be applied to your personal finances as well.
Spending money in business is all about assessing risks, taking chances which will grow your brand, and looking for opportunities. These are all attitudes you should take toward your personal finances in order to make your money work even harder, and to have the skills and knowledge to make the best investments.
Successfully making money by spending it will mean following these four tips to ensure you choose the right spending options which will make you money.
1) Conquer your fears
In order to spend money with the aim of making more, you need to actually spend it in the first place. However, most of us work so hard for our money that when it comes time to part with it again, we can hold a bit of a tight rein.
It?s easy to doubt yourself and question whether an investment really is the right thing to do with your funds ? what if you lose the money, what if it?s all a scam, what if it doesn?t work?
You can sit for days on end thinking of reasons not to spend money to make money, but once you?ve made the decision to expand your wealth in this more aggressive way, you need to keep taking steps towards your goal. To help manage your feelings of fear about your investment, set yourself a budget and be as generous as you can. With that portion of money dedicated to your investment, it is already spent in your budget, so make sure you go ahead and spend it.
It is possible you will lose some of your investment, or break even for your troubles, however, if you are willing to keep researching and keep investing, your risks can take you where you want to go. There is no ultimate secret to making money through investments ? it comes down to the fact that if you want to make big returns, you have to put in big investments and along the way you will gain the knowledge you need to take the risk out of the equation.
2) Invest in appearance
Significant amounts of a business? income will be spent on their branding. This includes their website and business cards, as well as their advertising, promotions and PR. While we?d all like to think it?s what?s on the inside that counts, there is no escaping the fact that we are all judged by our first impression, and businesses know this.
That is why they work hard, and spend hard, to create the right image from the beginning. Even if a business is one guy working from his basement, it is important that he starts on the first day of his business with the image he wants to portray. It is easy to start out with cheaper business cards you?ve designed yourself or a Hotmail email address, however it is not as easy to change the public perception of yourself and your business once it?s out there.
You will be branded from the beginning based on how you appear to the world, so if you are going to spend money to make money, invest in your own branding. No matter what your goal in life, make sure you are ready to achieve it, and that you exude that confidence.
To be successful in any industry, whether you are a gardener or a lawyer, people need to feel comfortable in order for them to put their trust in you. Therefore, rather than turning up to quote for landscaping in a truck with equipment falling out of every window, invest in storage systems, invest in keeping your equipment clean, tidy and new and your customers will invest in you.
3) Invest in efficiency
Businesses also realize the importance of efficiency in their products, services and business operations because the turn around on a product or service can be the difference between you getting the job, or the contract going to your competitors.
It is also just as important that when you promise efficiency you can deliver and so successful businesses will start from a position of strength when it comes to their operations as well, investing in the equipment and technology which will allow them to deliver the best solutions from the start.
There are a number of lessons you can learn about efficiency in investments and the first is to do things right the first time. Don?t start out spending your money on investments without the professional advice of a financial planner or investment broker relative to your investment medium.
It is not an efficient investment practice to start out on your own, so plan to enlist the help of an expert when you can afford it, because without expert knowledge and advice you may never get to the point of being able to afford it!
Spending your money with the help of experts in the field will not only make your investments more profitable, but more efficient to fit into your lifestyle. You may not be able to afford to quit your job and become a career investor, but as the money you spend returns to you, you may have that option in the future. Until then, you need to get on with your job and your life, and with the help of a financial planner or broker, you will have the tools and technology to keep up with your portfolio, make decisions and stay informed with the minimum investment of your time.
4) You get what you pay for
You can spot the difference in quality a mile away between a Burberry trench and a department store knockoff and in order to spend money to make money, you have to spend it on the best. Work with the best people with the best experience in their field to advise you. Do your research into the best companies, stocks or properties in which to invest.
Most importantly expect the best at every turn because as soon as part of your team fails, it can bring the rest down with it. Don?t be afraid to maintain the best, because you are after all, paying top dollar and expect top dollar performance and results in return.
Alban is a personal finance writer at Home Loan Finder, a home loan comparison website.
Do you think there are things we should spend money on that have the potential to make us even more money? It doesn?t have to be investment, but anything that might improve job or business prospects, enhance income or reduce spending?the field is wide open, so have at it!
While I agree with you mentally, when it comes to parting with what little I now have in my life – I have to be honest and say it is hard to do. But I have seen and read about the stuff you mentioned and it does work. It is just the taking the leap of “faith” part that has always been hard for me. I guess it comes from being homeless right now technically. While I do have a place to stay (with my boyfriend), at age 52, I would rather have kept things the way they were – he has and I have mine. Words can never express the “depression” I face on a daily basis knowing I have to do this or be in the streets. Great info!
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Angela, I think it is hard to do this when you’re unemployed or going through some other financial crisis. But if you’re in “normal times”, what ever those are anymore(!) you really do have to spend some money in order to go forward.
Alban is right that you don’t want to look like the budget player in a new field that you’re going into.
Hi Alban, Good tips! One thing I would recommend to people is to go to Robert Kiyosaki’s Website and pick up his Cash Flow game. It teaches how to invest and uses fake money so you can practice without losing money. It doesn’t teach everything but it will definitely get a person to the right kind of attitude and give some insight as to what to look for. I play it with my family and they love it! Even my kids love playing – they want to get out of the rat race too!
Thanks again for the tips!
Great tips! Being an expert and being an entrepreneur are two totally different things. We have to invest in ourselves and businesses. Most people try to cut corners here because they have the knowledge. I invested in my professional logo when I started my business in 2009. At the time it did make sense, but I knew the importance of branding.