Most people make money by selling their time. We call this getting a job. This could be any job that pays a salary like being a doctor, plumber, teacher, etc. Some people attempt to play the margin too and invest the money they earn by selling their time so that someday, if they are lucky, they can retire and stop selling their time.
I’ve chosen to think differently about making money and come up with some categories for how people make money that are helpful for finding an alternative approach.
Ways People Make Money
- Selling Time – Like I said above, this is probably the most common among regular folks like you and me. We get a job and are paid by someone else by the hour or get an annual salary. The problem with this is that time is our most limited commodity. We only live so long, so there’s only so much time we have to sell.
- Playing the Margin – This is the most common method among people who make a lot of money. In simple terms, think of it like buy low & sell high; the margin is the difference between the two. People that play the margin often hire people, pay them by the hour, and leverage their time to them into more money. Then they take this money and play the margin more by investing in other things like growing their business. Many people with retirement plans also play the margin by putting money in investments, with the hope that someday they can stop working for a living. Commission based sales jobs are an example of playing the margin too. These folks leverage their time into making money, although sometimes these folks are encouraged to stoop to using manipulation to increase the margin.
- Manufacturing is similar to playing the margin, but differs by adding value through creating something new from raw materials. In other words, manufacturing takes the addition of skill & time which makes it different from purely playing the margin.
- Providing a Service is also similar to playing the margin too because it takes outputting value to deliver a service people want to pay you to provide.
- Mining is sort of like manufacturing but is different because you turn labor into the production of a raw material.
- Stealing – Some people just take other people’s money or possessions. The Islamic State is growing by leaps and bounds in the Middle East by stealing what they want. Stealing is all bad.
- Manipulation – Some people trick people out of their money. The classic example is a snake oil salesman who puts scented oil in an bottle and convinces people it’s a remedy for all their troubles. Tricking people is all bad, so if you sell something, deliver the value you promise.
- Taxation – Governments take what they think they need to govern a nation. Taxation isn’t all bad if it fairly distributes the money that make the nation stronger.
Boiling it Down
Except for playing the margin, stealing, and manipulation all of these pay you for your contribution to society. That’s the key to transforming your income from a single income stream – a job – to a resilient multiple income stream model.
If you can find a way to contribute more without spending incrementally more time, you not only free your time up, you become more self-reliant. Think of it like taking your income off-the-grid.
How to Build Income Streams
We all have skills & knowledge that other people do not. We may not be the ultimate expert in our field, but we probably have more to contribute to society than can be delivered through our day jobs. In other words, we all have untapped potential.
So why not package-up our skills & knowledge in a format that can be delivered to other people. The Internet is an ideal way to connect with more people than can be connected with in person. We don’t even need to sell anything to earn money online when we monetize our websites with ads.
We essentially become manufacturers and/or service providers that deliver our own unique value directly to people that want it.
Diversity is a key for the same reason having only one job is a liability. If we have a variety of things to offer, multiple websites can build diversify too; or maybe a focus on one theme and the delivery of multiple products and/or services can build diversity.
How I Did It
I’m a bit of a jack of all trades. I’m trained & educated in Art. I’m a decent designer. I know how to build a house from end-to-end. I know how to code a web application from end-to-end. I’m a do-it-yourselfer to a fault, and often get in over my head. But I’m happy to muddle though challenges and puzzles. I get bored if I’m not being challenged and learning new things. So I took these strengths & weaknesses and made them work for me.
I started blogging and designing tiny houses as therapy mostly. It was 2007 and the real estate had just crashed; and I found myself trapped in a mortgage. But my entrepreneurial spirit led me to finding ways of earning a side income from my therapy.
Most of the ideas I share online are free, some I’ve polished into downloadable tiny house plans people can buy for less than $10. I even drew a book and self-published it via an Amazon company called Create Space (which I highly recommend).
Initially the main way people found my websites was though internet search engines like Google. But today, with the explosion of social media, that reach has been multiplied many times over. As my website traffic grows, my income grows too. Giving away free content actually seems to pay more than selling stuff thanks to Google Adsense.
I like to think I add value to society simply by sharing what I create, write, and share. It might not be much, but I think it’s a positive contribution.
I stopped climbing the corporate ladder a long time ago to have more time to be home with my family. I still work for that same company and still sell them some of my time. I’ll stay as long as I add value and it benefits my family.
If I lost my day job, I’d loose a big income stream and it would hurt – but now that I’ve balanced that income with other income streams I would not be forced back into the job market. My backup plan is to take that time and redirect it toward drawing more tiny house plans and writing/drawing more tiny house books. In the mean time, I’ll continue to use that income to downsize my debt, and slowly work toward building those additional income streams as time allows.
Ultimately I want to move my family back to Mendocino County and make pottery again. I’d love to have a little homestead near the coast to grow old on. I don’t want much, just low stress and time to enjoy life. I do not expect to need to rely on retirement savings, instead I’ll work to keep my steady passive income growing.
What to Do?
I’m sharing all this because I think others can do this too. It’s not a pipe dream, and doesn’t take money to make money. It just takes finding a way to connect people with what you contribute to make a bigger positive impact.
Consider the different ways people make money I’ve listed above. Consider leveraging your skills & knowledge and find a way to share it online. You don’t need to necessarily sell stuff either – if your website is monetized with ads.
It’s very unlikely that anyone would ever get rich overnight this way, but it’s so low risk it’s a shame more people still think a job and retirement savings is the best path. Begin small, put yourself out there, be authentic & honest, and you should see positive results.
Learn from the feedback people give you and adjust your course accordingly – but never forget to do what feels right for you. Don’t sell out. Oh, and don’t quit your day job or make that a priority because you may risk those thoughts detracting from the value you provide to that employer.
The bottom line is… think different about money and work… then work differently. Provide value to the people you connect with by sharing your skills & knowledge. There is no set limit to this approach, like there is with selling your time.