5 ways to make money

  • ThomasBeyer

    Status: REIN™ Member

    Posts: 9,638
    Joined: 30 Aug 2007
    From: Alberta and BC - The Top 2 Places on the Planet to live and invest !

    Occasionally I speak at events and people ask me about real estate investing or making money in general.

    There are really only 5 ways to make money .. and you can do all 5 in time .. but you have to take them all seriously, especially step one !

    1) You work

    This is the most common way to start. You work, i.e. you exchange your time for money. The more time you give, the more money you get. A pretty linear relationship. Proven though through centuries !

    Many people fail at that stage already. They don't take it seriously. They show up late. They chat with friends online. They do personal business on the side. They don't understand the business they're in. They don't give 110%. Maybe 50% or 85% .. or 35%.

    Yes, you can hide for a few days or a few weeks. Most employers realize after a while who is an excellent performer and who isn't. If you work hard at your job, you get ahead. Give the extra 10% or the extra 4-5 hours every week. Read up on your industry. Go to industry conferences. Seek a mentor. You get promoted. You get more $s per hour. If you have more skills, you get more $s. So, yes, formal and informal education helps. If you work hard, and get more $s than you spend, you can save some $s. Hence:

    2) You invest your own $s.

    You buy real estate or mutual funds or stocks or GICs or bonds or whatever seems to fit your risk tolerance, skills and timeline. Like 1) it takes time to find out what a good invetsment looks like. Take it seriously. This investment could be more passive (say a stock or mutual fund) or more active (say real estate or active stock trading)

    3) You invest other people's money.

    Once you've mastered 2) you have the right to ask for OPM (other people's money) such as JV partners or money partners or mortgages or lines-of-credit to invest, for example in real estate: Usually a combination of your own time, your own money and OPM (mortgage, LOC, JV money or all 3). You borrow money at, say 6%, and invest it for 12% to 150% ! This assume a modest degree of risk as you must pay the rate your agreed with OPM but invest at a more uncertain, yet frequently much higher rate. This assume 1) and 2) is in ship-shape !

    4) You use other people's time / employ other people

    You have a small or large business where you pay people a wage/salary/hourly wage and then use their time to make money for yourself. This works usualy only if you're good at 1) 2) and 3) as usually your have to work hard too to lead by example and have some (of your own or other folks') money at risk.

    5) You have Intellectual property (IP)

    Intellectual property or royalties make money for you once you have created them: maybe you have written a book. Maybe you have written lyrics or songs or music. Maybe you have painted a picture and it is copied widely for a fee. Maybe you have invented a name and copyrighted it. Maybe you have a patent or a system that can be used for a fee. Elton John makes money in his sleep today - but he was very good at 1) in the beginning of his career.

    So, there you have it in a nut shell: 5 ways to make money. Are you aiming to fire on 5 cylinders ? Or is it only 1/2 ? Try harder .. or try different ways .. but usually they go in that order of: 1, 2, 3, 4 5 ..

    Did I forget something ? Any insights from the REIN world at large ?

    Anyone out there with success in 3) or 4) or 5) and who did not work hard at 1) or 2) first ?

    Fire away !
    Thomas Beyer, Honorary REIN Member & Member REIN Advisory Board
    President, Prestigious Properties [@facebook .. @twitter]
    T: 403-678-3330 E: tbeyer at prestprop dot com - www.prestprop.com

    >>> Read here how use your RRSP or TFSA for real estate or  here for our latest investment opportunity in Alberta for as little as $20,000 <<<
    >> My book "80 Lessons Learned on the road from $80,000 to $80,000,000" is out: order it on Amazon or as an e-book for Kindle, iTunes or kobo format <<

                                
  • ChrisDavies

    Status: REIN™ Member

    Posts: 1,205
    Joined: 19 Feb 2008
    From: Edmonton

    Those are some terrific insights Thomas!

    When I talk with people about things like my personal Belize, even if they understand what I'm trying for they don't understand how I'm going to get independent without winning the lotto. I'm focusing my efforts on 3,4,5, as well as developing a career I enjoy.

    I'm sure there are lots of people who have made the same list you did, but yours is nice and succinct. Thanks!

    Chris Davies, REALTOR® 
    RE/MAX Real Estate (Edmonton Central)
    Cell: 780-905-7562 Office: 780-488-4000
    Edmonton's Best Free MLS ® Search
    You should follow me on Twitter here and check out my blog here

  • RebeccaBryan

    Status: Forum Member

    Posts: 784
    Joined: 17 Sep 2007
    From: Edmonton, Alberta

    quote........"Try harder .. or try different ways".


    Just a little something that I learned from a seminar I once attended a few years ago. "Trying" doesn't work.

    Do this simple exercise:

    Throw a pen onto the floor in front of you. Now, try and pick it up.

    My point. Only doing works.

    Thomas, everything else in your post makes perfect sense to me. And, yes I know what you meant by "trying". It's just that way too often, peole make the mistake of claiming they are either "trying" when they actually are not, or vice versa they are not giving themselves enough credit and they are actually "doing" and using the word "trying". I hope that was articulate enough to get my point across.
    Rebecca Bryan
    Edmonton, Alberta, Canada

    rebeccabryan@telus.blackberry.net


    Proud recipient of the REIN 2008 Michael Millenaar Memorial Leadership Award

    My philosophy, in essence, is the concept of man as a heroic being, with his own happiness as the moral purpose of his life, with productive achievement as his noblest activity, and reason as his only absolute. -Ayn Rand

    "Of all the judgements that we pass in life, none is as important as the one we pass on ourselves, for that judgement touches the very center of our existence." - Nathaniel Branden
  • ThomasBeyer

    Status: REIN™ Member

    Posts: 9,638
    Joined: 30 Aug 2007
    From: Alberta and BC - The Top 2 Places on the Planet to live and invest !

    I should add that REAL ESTATE covers items 1) 2) and 3) .. and/or 4) if you do it as a small business with perhaps a P/T accountant and/or P/T money finder/partner and/or P/T property manager and/or P/T repair guy ..

    that's why I LOVE REAL ESTATE !!

    btw: I used to own a software and consulting firm which did reasonably well and actually provided much of my seed capital in the late 90's .. but item 5 - IP was hard and very expensive to get .. and item 3 - OPM was hard too .. much easier in real estate, more fun, more rewarding, more options and more scalable !

    btw2: if you are not good at 1 - work .. likely you'll fail at real esate as well as it is a lot of work .. the deals or the mortgage or the unique clause in the contract or the investor money or the gains or the JV partners don't just fall in your lap .. it is a lot of work to get them .. only after a lot of work intially does it seems "easy" later on .. Tiger Woods or Donald Trump or Don Campbell or Robert Kyasaki make it look easy .. but they did and do work VERY hard still !!
    Thomas Beyer, Honorary REIN Member & Member REIN Advisory Board
    President, Prestigious Properties [@facebook .. @twitter]
    T: 403-678-3330 E: tbeyer at prestprop dot com - www.prestprop.com

    >>> Read here how use your RRSP or TFSA for real estate or  here for our latest investment opportunity in Alberta for as little as $20,000 <<<
    >> My book "80 Lessons Learned on the road from $80,000 to $80,000,000" is out: order it on Amazon or as an e-book for Kindle, iTunes or kobo format <<

                                
  • joeiannuzzi

    Status: Forum Member

    Posts: 12,691
    Joined: 2 Sep 2007
    From: Calgary

    Thomas I think you pretty much covered it!

    There are only three things you can ever do with money once you have it in your hands.

    1) Spend
    2) Lend
    3) Invest
    If you want something you've never had, you must do something you've never done.

  • ThomasBeyer

    Status: REIN™ Member

    Posts: 9,638
    Joined: 30 Aug 2007
    From: Alberta and BC - The Top 2 Places on the Planet to live and invest !

    QUOTE (joeiannuzzi @ Feb 23 2008, 02:39 PM)
    Thomas I think you pretty much covered it!

    There are only three things you can ever do with money once you have it in your hands.

    1) Spend
    2) Lend
    3) Invest


    almost right: you can also DONATE .. but maybe that falls under "invest" in your category .. i.e. invest with benefits accruing to others than yourself !

    How about these phases in life: learning, earning, returning !
    Thomas Beyer, Honorary REIN Member & Member REIN Advisory Board
    President, Prestigious Properties [@facebook .. @twitter]
    T: 403-678-3330 E: tbeyer at prestprop dot com - www.prestprop.com

    >>> Read here how use your RRSP or TFSA for real estate or  here for our latest investment opportunity in Alberta for as little as $20,000 <<<
    >> My book "80 Lessons Learned on the road from $80,000 to $80,000,000" is out: order it on Amazon or as an e-book for Kindle, iTunes or kobo format <<

                                
  • joeiannuzzi

    Status: Forum Member

    Posts: 12,691
    Joined: 2 Sep 2007
    From: Calgary

    QUOTE (thomasbeyer2000 @ Feb 23 2008, 01:50 PM)
    almost right: you can also DONATE .. but maybe that falls under "invest" in your category .. i.e. invest with benefits accruing to others than yourself !

    How about these phases in life: learning, earning, returning !



    Sounds good to me!
    If you want something you've never had, you must do something you've never done.

  • RedlineBrett

    Status: REIN™ Member

    Posts: 2,232
    Joined: 24 Oct 2007
    From: Calgary

    QUOTE (thomasbeyer2000 @ Feb 23 2008, 02:50 PM)
    almost right: you can also DONATE .. but maybe that falls under "invest" in your category .. i.e. invest with benefits accruing to others than yourself !

    How about these phases in life: learning, earning, returning !


    Excellent topic Thomas!

    I would only comment that while you've done an excellent job in framing the five principle ways to make money what I find is to be more challenging is deciding when is the right time to 'graduate' yourself and move up to the next rung on the ladder.

    How many properties is enough to go out and start pitching money partners?

    How much business do you have to have to go out and get an employee? Move out of the home office?

    At which point is your business/system good enough to go out and market the IP behind it? Franchise the business or open up another shop in another town?

    While my business partner and I know the 'end game' that we want to achieve and have a pretty good understanding of the steps to take along the way the business it's when to take these steps that's the hard part for us.

    But I think that's just the way it is when you're running your own business.. no one else can really make these decisions for you.. you just have to feel when it's the right time and go for it same as getting married, having a kid etc.

    thoughts anyone?
    Brett Turner, B.Sc Eng,  Broker / Owner
    Redline Real Estate Group  www.redlinerealestate.ca 

    Specializing in Calgary Realtor and Property Management Services




  • gwasser

    Status: Forum Member

    Posts: 1,194
    Joined: 22 Oct 2007
    From: Calgary

    It is true, Thomas' five ways of making money summarizes most forms of money making. It is also true, that no matter what you do, you'll have to work at it. With a bad work ethic you will hit the wall no matter what you do. Yes, you can select the way to make money that suits you most. However, many started with paid job and then graduated to investing and/or running their own business. The luckiest ones, such as Robert Kyosaki, made money from royalties. In fact, I suspect Robert made more money from his seminars than from any other source. He may be a very talented teacher, but from what I read, he is not necessarily a very talented employee, businessman or investor (just my personal opinion).

    But with all this, there is one thing missing. You need seed money to start investing, to start your business (like Thomas Beyer) and have the resources to write and publish say a book. This requires you to be good with your money. No consumer debt, living below your means to maximize savings (without living in utter misery - there is a balance) and finding a secure spot to park your money in preparation for your next move.

    Your next move, when will it come? Simple, when you're ready! Both financially and mentally you have build the skills to succeed in your current way of making money. You just feel you like doing something else, like... expanding,... diversifying. That is how it usually goes. When you're ready to move, the right opportunity will present it self; the only thing you have to do is grab it - after some study, analysis and plain pragmatic thinking.

    ---
    Godfried Wasser

    I love investing
    Un-Retired Geologist who also was a Realtor-

    http://www.canadiandiversifiedinvestor.com/

    e-mail: nicecalgaryrental@gmail.com

  • ThomasBeyer

    Status: REIN™ Member

    Posts: 9,638
    Joined: 30 Aug 2007
    From: Alberta and BC - The Top 2 Places on the Planet to live and invest !

    How many properties is enough to go out and start pitching money partners?

    >>> I'd say after 3 or 4 .. but if you're bold and good .. maybe 1 or 2 only ..

    How much business do you have to have to go out and get an employee? Move out of the home office?

    >>> you'll notice .. once you do too much stuff you do not like or are not good at !

    >> home office: keeps expenses low and the commute short .. what's wrong with that ? Or use Tim Horton's or Sheraton hotel lobbies to meet clients .. a 5000 location enterprise !! We finally moved into an office once we hit 8 buildings, 4 employees and 500+ units .. before it was all home based because it works as it keeps expenses low and the commute short ...

    At which point is your business/system good enough to go out and market the IP behind it? Franchise the business or open up another shop in another town?

    >>> if you see patterns .. and if this pattern is sellable .. but selling this patterns takes work too .. so the work involved to sell may not be worth the IP income !

    While my business partner and I know the 'end game' that we want to achieve and have a pretty good understanding of the steps to take along the way the business it's when to take these steps that's the hard part for us.

    >>> or the good part .. YOU make the call not someone else .. if it were easy everyone would do it ..

    nothing ventured .. nothing gained ...
    Thomas Beyer, Honorary REIN Member & Member REIN Advisory Board
    President, Prestigious Properties [@facebook .. @twitter]
    T: 403-678-3330 E: tbeyer at prestprop dot com - www.prestprop.com

    >>> Read here how use your RRSP or TFSA for real estate or  here for our latest investment opportunity in Alberta for as little as $20,000 <<<
    >> My book "80 Lessons Learned on the road from $80,000 to $80,000,000" is out: order it on Amazon or as an e-book for Kindle, iTunes or kobo format <<

                                
  • RedlineBrett

    Status: REIN™ Member

    Posts: 2,232
    Joined: 24 Oct 2007
    From: Calgary

    QUOTE (thomasbeyer2000 @ Feb 24 2008, 06:36 PM)
    How many properties is enough to go out and start pitching money partners?

    >>> I'd say after 3 or 4 .. but if you're bold and good .. maybe 1 or 2 only ..

    How much business do you have to have to go out and get an employee? Move out of the home office?

    >>> you'll notice .. once you do too much stuff you do not like or are not good at !

    >> home office: keeps expenses low and the commute short .. what's wrong with that ? Or use Tim Horton's or Sheraton hotel lobbies to meet clients .. a 5000 location enterprise !! We finally moved into an office once we hit 8 buildings, 4 employees and 500+ units .. before it was all home based because it works as it keeps expenses low and the commute short ...

    At which point is your business/system good enough to go out and market the IP behind it? Franchise the business or open up another shop in another town?

    >>> if you see patterns .. and if this pattern is sellable .. but selling this patterns takes work too .. so the work involved to sell may not be worth the IP income !

    While my business partner and I know the 'end game' that we want to achieve and have a pretty good understanding of the steps to take along the way the business it's when to take these steps that's the hard part for us.

    >>> or the good part .. YOU make the call not someone else .. if it were easy everyone would do it ..

    nothing ventured .. nothing gained ...


    Thanks for posting smile.gif I agree - if it were easy everyone would be doing it. And I prefer this 'hard work' to when I was working for the man 100x over
    Brett Turner, B.Sc Eng,  Broker / Owner
    Redline Real Estate Group  www.redlinerealestate.ca 

    Specializing in Calgary Realtor and Property Management Services




  • ThomasBeyer

    Status: REIN™ Member

    Posts: 9,638
    Joined: 30 Aug 2007
    From: Alberta and BC - The Top 2 Places on the Planet to live and invest !

    QUOTE (joeiannuzzi @ Feb 23 2008, 01:39 PM)
    Thomas I think you pretty much covered it!

    There are only three things you can ever do with money once you have it in your hands.

    1) Spend
    2) Lend
    3) Invest


    What's the difference between lending and investing ? Isn't lending just a sub-set of investing options ? Lending is usually at a fixed interest rate (although it could be tide to equity) wheeras investing is usually equity based / not fixed ?
    Thomas Beyer, Honorary REIN Member & Member REIN Advisory Board
    President, Prestigious Properties [@facebook .. @twitter]
    T: 403-678-3330 E: tbeyer at prestprop dot com - www.prestprop.com

    >>> Read here how use your RRSP or TFSA for real estate or  here for our latest investment opportunity in Alberta for as little as $20,000 <<<
    >> My book "80 Lessons Learned on the road from $80,000 to $80,000,000" is out: order it on Amazon or as an e-book for Kindle, iTunes or kobo format <<

                                
  • UTCVenturesLtd

    Status: Forum Member

    Posts: 196
    Joined: 9 Jan 2008
    From: Calgary, Alberta

    QUOTE (thomasbeyer2000 @ Feb 23 2008, 11:48 AM)
    Occasionally I speak at events and people ask me about real estate investing or making money in general.

    There are really only 5 ways .. and you can do all 5 in time .. but you have to take them all seriously !

    1) You work

    This is the most common way to start. You work, i.e. you exchange your time for money. The more time you give, the more money you get. A pretty linear relationship. Proven though through centuries !

    Many people fail at that stage already. They don't take it seriously. They show up late. They chat with friends online. They do personal business on the side. They don't understand the business they're in. They don't give 110%. Maybe 50% or 85% .. or 35%.

    Yes, you can hide for a few days or a few weeks. Most employers realize after a while who is an excellent performer and who isn't. If you work hard at your job, you get ahead. Give the extra 10% or the extra 4-5 hours every week. Read up on your industry. Go to industry conferences. Seek a mentor. You get promoted. You get more $s per hour. If you have more skills, you get more $s. So, yes, formal and informal education helps. If you work hard, and get more $s than you spend, you can save some $s. Hence:



    I think most people get caught up in a work and spend cycle and years go buy and they have no or little equity built up. There is just enough money to get to the next paycheque if they are lucky so they think. You work, you earn money and have bills that have to get paid which is money telling you what to do and then the rest, you get get to tell what to do. Each of those dollars that flow through your hands have the potential to earn many more dollars but if you spend them, that opportunity is gone. You are transferring your wealth potential to someone else! Step 1 is to stop, reevaluate your entire situation, create a "budget" to pay what you really need to live within your means, pay down bad debts and try to set aside as much investment money as possible with the "goal" to create enough passive income through a variety of means that you are comfortable with, to be in a positon to eliminate your "job" and live comfortable with passive income and enjoy the freedom that comes with it.

    One thing to be said about a "job" is that you are capped with the amount of hours that you put in and the number of days in a week! When you can take it to the next level, getting educated, develop a system for your situation, add a variety of investments, you will really begin to grow your wealth! Once you have the basics down pat, a system in place, you will be surprised what will happen as time goes on! It is all up to "you!"

    "It is not to late to be all that you could have been!"
    Dean
    ve6eee@yahoo.com
    Private Real Estate Investor
    Corporate Real Estate Investor - "United Team Capital Ventures Ltd."
    www.unitedteamproperties.com - "Helping Investors Find Properties"
    www.thewanderinghobo.com - Personal Website of Travels of N. America
    "Nothing Ventured, Nothing Gained!"
    If you do not know where you are going, any road will take you there!
    It is hard to fail, but it is worse never to have tried to succeed. - T. Roosevelt
    If you lend a person $20 and never see that person again, it was probably a wise investment!
    Here is the key to success and the key to failure: We become what we think about. - Earl Nightingale
    Your chances of success in any undertaking can always be measured by your belief in yourself. Robert Collier
    What you get by achieving your goals is not as important as what you become by achieving your goals. - Zig Ziglar
  • ThomasBeyer

    Status: REIN™ Member

    Posts: 9,638
    Joined: 30 Aug 2007
    From: Alberta and BC - The Top 2 Places on the Planet to live and invest !

    learning .. earning .. returning ..
    Thomas Beyer, Honorary REIN Member & Member REIN Advisory Board
    President, Prestigious Properties [@facebook .. @twitter]
    T: 403-678-3330 E: tbeyer at prestprop dot com - www.prestprop.com

    >>> Read here how use your RRSP or TFSA for real estate or  here for our latest investment opportunity in Alberta for as little as $20,000 <<<
    >> My book "80 Lessons Learned on the road from $80,000 to $80,000,000" is out: order it on Amazon or as an e-book for Kindle, iTunes or kobo format <<

                                
  • xcrider

    Status: Forum Member

    Posts: 4
    Joined: 5 Dec 2007
    From:

    There is another way to make money, STEAL it... make sure you steer clear of those who would.
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