Saturday, October 30, 2010

How Do You MAKE MONEY (legally)?

WHAT?!? How do you "make money"? What kind of question is that? The answer is: GO TO WORK! DO YOUR JOB.  You'll make your wage or salary and walk home with a paycheck or smiling at the automatic deposit in your bank account.

But that is not what I am talking about. I'm not referring to how you earn currency. I am talking about creating new money for which you can obtain currency. Here is what I am referring to.

Money is defined here as: Anything of use and trade-able value.

Again: Money is anything of usefulness and can be traded for something else. That means you can make almost anything into money. In the 1970's one man turned mere rocks into a purchasing craze: Pet Rocks. It lasted only a short time but for that short period millions of dollars exchanged hands and many people prospered because mere stones became "Pet Rocks" that people used for fun and happily traded currency for. It was fascinating.

If a farmer owns some land with a lot of stones on it and s/he collects those stones into a wire rack on a pallet, s/he can trade those rocks for currency - dollars and cents -  to a stone mason who may build a stone retaining wall for a customer who pays currency for the usefulness of the wall now owned by the customer. Those rocks became trade-able money by being collected onto the pallet, thus becoming building material instead of a mere nuisance to the farmer. 

The stone mason created more money by turning the rocks into a useful retaining wall for which the customer traded currency, perhaps. Maybe s/he traded another form of money, such as grain, fuel, or other labor such as automotive work or voice lessons. 

Money, obviously, using the above definition, can be anything that has a use, therefore if one wants to get rich all one needs to do is discover what others need and labor to provide it. Thus the sayings, "Find a use and share it" and "Find a need and fill it", and Zig Ziglar's famous statement, "You can have everything in life that you want if you will just help enough other people get what they want.

 It is said, "It takes money to make money", and that is true. So what is a person who is just starting out to do? How does a person who has nothing get a start? Where does s/he get the money to get going making more?

God gave us four forms of free money: 
1.  physical strength and ability, 
2.  intellect, 
3.  time, 
4.  the earth. 

Each person can increase the value of physical skill and intellect by study and practice. This also increases the value of that person's time and perhaps the value of what that person makes from what s/he obtains from the earth. If that person wants to make money, s/he starts with what s/he obtained from God and begins creating something of value - new money - ultimately to trade the money s/he created (and does not need) to someone else to fulfill a need. The "poor" person may trade the ability and intellect and time God provided for currency to create some form of money - anything of use and trade-able value - for some other "rich" person who owns something of the earth. 

Trading time for money is a great way to begin getting wealthy. The "poor" person may labor to plow or sew or fish or mine or build, trading labor for currency as s/he labors to create  the product - the money - for the "rich" property owner, increasing his/her wealth (hopefully). Thus we have manufacture and exchange which is the essence of economy, the stability of society, the origin of opulence.

The "poor" person can save the earned currency until property can be bought. The unwise "poor" buy things, toys, liabilities that require more money just to keep, maintain and use - cars, stereos, computers, boats, etc - thereby actually becoming more and more "poor"; their liabilities' costs of maintenance add to their regular costs of living, requiring them to labor more, trading their time and skill just to keep up with the costs and not to become wealthy themselves. 

Wise "poor" people buy assets that earn/create more money - cash-flow real estate, stocks, lease-able equipment, businesses - thereby becoming more wealthy until finally those people find themselves members of the "Rich" society who hire others to create profits for them. Through wise use of God-given money each person can become wealthy by making new money and using it to fill the needs of others, for a profit, of course. Honest profit is, in this way, a good Divine gift.

As Robert Kyosaki says in his book "Rich Dad, Poor Dad", 
*  "Assets are things that put money into your pocket; liabilities are things that take money out of your pocket" and 
*  "The rich build assets that they use to purchase other assets. The poor only have expenses" and 
*  "If you want to be rich, simply spend your life buying assets. If you want to be poor or middle class, spend your life buying liabilities.

So true wealth is to have lots of things, assets - lands, equipment, businesses - that produce enough to pay both people you hire to keep those things producing and you. Your labor, then, is to simply keep the people and tools producing new money, not to do the producing yourself. Supervision is almost always less physically taxing and it takes less time, thereby freeing the supervisor to use the free time in other ways. Taking a cruise is a nice way to use free time!

If, on the cruise, the wealthy property owner finds other people to serve with the money s/he creates, both hopefully, optimally, become wealthier with the exchange. What a way to improve the economy!

Again, Robert Kiyosak: "I have a problem with too much money. I can't reinvest it fast enough, & because I reinvest it, more money comes in. Yes, the rich do get richer." How do they get richer? By putting their money into investments that create new money and distribute that new money to those who have need and currency with which to trade. Get rich by making new money and trading it for currency. Thus the rich get richer. 

Do the poor get poorer as the rich get richer in this way? No. When more new money is made available, purchased, and used by the very rich, the older money is either sold a a great discount or cast off completely, thereby becoming affordable to those who are less rich. The "poor" actually become more wealthy as the "rich" buy new money and cast off their old, still very functional old money. Thus society on the whole becomes more and more opulent in its lifestyles. 

This is described in full in John Adams' book "The Wealth of Nations" circa 1776. It is very worthwhile reading and the true principles apply today as well as they did when Mr. Adams wrote them down. I suggest you at least give it a good scan. 

God Bless until next time.

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