How To Play The Money (Making) Game

2TSj...cEUn

25 Apr 2024

114

Lately, I have been talking to someone.
And if that is not weird enough, that someone has a similar financial background as I did while being in a very different part of the world.

Not A Game

As I wrote before I have been in debt for most of my life, and I remember a wise person telling me that making money is a game.

At that time I was like "Right, easy for you to say. You are not in my shoes with holes due to being in debt."

I did not see it,
I did not believe it,
I really did not get what I was told.

How can it be a game?
I struggle every month to make ends meet. I lie awake at night worrying about what happens if...
If next month I get an unexpected bill. I know I can´t pay it.
That is not a game, that is a serious mofo bringing you down and keeping your energy low. And worse it keeps you working way too hard.

Running After Things

You are always running after the money you are missing, running makes you tired and it gives you stress.

Stress is the worst financial advisor you can have, it´s even better to take financial advice from a baby than from your stress persona.

The thing is when we are struggling, we are trying to hold on to what we have. We are spending, pending all that energy to keep that status quo.
That is exactly what this debt-driven society is built on:

keeping you running
keeping you spending
keeping you working so hard that you have no time to think and plan.

And during those scarce moments that you find some time to relax the last thing on your mind is money....and the lack of it.

You prefer spending that time having fun, buying a new outfit, or smoking something that helps you forget your troubles.

This is why I called Bull Shit when someone who had no financial troubles told me it was a game.

I was like: There is nothing game about working your ass off.
And you know what Dear reader: We were both right!
Working your ass off to pay the bills is no game, but making money is.

The Money Game

Making money is a Mindset, and it helps to see it as a game.
For most people, money is a way to pay bills. But if you distance yourself a bit money is nothing more than a means to exchange goods and services.
It´s nothing more than a scale, that balances your effort against something that allows you goods and services.

The game is all about balancing the scale in your favor.
Picture that ancient gold dealer, holding that scale....you know he cheates but you can not prove it. You have to accept whatever he gives you....
You are not in control, till you are the one that started holds the scale.
At the moment that you own the scale, the game begins.

The Game

The game is not easy and it is played on many levels. Like any game, the best way to learn it is by starting to play it.

Level One

And unfortunately, most of us start playing at level one.
Level one is all about getting control of the scale. Making sure your finances are balanced, and balance them in your favor.

Getting a hold of that balance can be done in many ways, but some ways are better than others depending on the level.

Many think that the easiest way to make more money is by working more hours. But how about spending less, and investing? What tactics will turn the balance in your favor?
When you get in at level one investing does not make sense, even if you try.

At level one your inflows and outflows are not properly balanced, therefore if you start investing before balancing your scale you will take out your investment and spend it within six months.

Investing is something that comes into play at level two.
At Level One you better have a look at your spending first.

Spending Time

How do you spend your time?
If you are working for a boss, you have little control over the hours that you work. But you might have some influence on working overtime, working weekends, and working on bank holidays.

Is there a way to work the same amount of hours but make more money per hour?
If you can work the same hours for money, without having additional costs such as childcare, do it any day can be a day off.

Without working extra hours you only have two real options:

Are you good enough to get or ask for a raise?
Is there an open position within the company that pays just a little better?

If you can ask for a raise, change the role, if you are comfortable in your company they often will be happy to keep you. Hence they will support you.

At this point you don´t want to start looking at changing jobs, all that matters right now is making the balance work in your favor. Changing jobs is a risk and a distraction at this level.

The Side Hustles

If you already checked what you can improve at your day job, we can get to the more fun part, your side hustle!

Nowadays with the internet being the place to be Side Hustles are the magic word. You keep reading the clickbait articles about the most profitable side hustles, but there is some truth to the fairy tale.

To make money you need to have money, and side hustles allow you to make just that bit you need to get yourself started and move onto level two.

Warning

It sounds great but it might not be automatically the way out.
You really need to keep a good eye on the inputs and outputs of your side hustles.
The biggest trap is being too eager to sell.

You Need A Plan Again

Your side hustle needs to be balanced, your time is valuable so if you exchange it for goods your price per hour needs to make sense.

Do not make the rookie mistake of thinking of your time as an investment you will regain later.
Because many side hustles fail for many reasons. Therefore it needs to be worth the effort from the start.

A Side Hustle is no Start-Up. It might become one, but don´t treat it as such from the start.
If you have a start-up you invest, or have an investor... but that is a start-up on which you focus all your energy, not a hustle next to your day job.

And often you get an investor that pays the cost, while you put the energy into your start-up. That is not the case for a side hustle, so do not confuse the two.

I had many side hustles and if it does not get too big you might cheat a bit with the taxes at first. Not financial advice, but it works like that.
But keep in mind that you ought to pay taxes.

Return On Investment (ROI)

What do you put in and what do you get out (after taxes)?
I had side hustles that made me less than a dollar per hour. They were fun, but they would not move the needle of the scale.

Still, if you enjoy the hustle, and do not need to do it solely for the money .....go for it. But consider it a hobby not a Hustle.

If you want to move the needle you need to work smart and not hard. Whatever you offer, you need to ensure you know the financial details.

It really starts with knowing the cost of your product!
Production Costs + Packaging Costs + Shipping Costs + Storage Costs + Marketing Costs + Admin Costs = Manufacturing Costs
Always include things like electricity, and bookkeeping, on top of the cost of the raw materials/manufacturing process. And especially with goods that are shipped include a margin for returned products and guarantee returns.

There is one more step:
Manufacturing Cost + Profit Margin = Retail Price
And if you think that is the key part to making your side hustle successful, think again. We did not touch the biggest trap yet.

What is my market?

Many hustles start from hobbies, meaning proper market research is never done. But you do have useful data, which is Gold when it comes to knowing your market and demographics.
If you know those, you know what sells where, and more importantly what does not sell!
I know all products are your babies, and it´s hard.... but you have to kill your darlings. You have to let go of what doesn´t sell and what does not have a proper profit margin.

You need to limit your offering to those products that make you a serious profit or allow for the ideal upsell opportunity.

Do not invest time to please a few customers with a product that hardly sells and has no margin, cut your loss and focus.

The Ideal Up-Sell Opportunity

Focus on ensuring your main products are well-balanced cost-wise, and if you want to squeeze more out of each customer; upsell, like a Coke with your burger.

You can make a package deal set up or add a product that appeals to kids or husbands (anything that would make your female buyer feel less guilty about their purchase).

Those up-sell items are not to drive your sales, but to please your customer's requirements. Therefore they do not need to drive the market but make you more money with less effort.
That requires them to have a good profit margin, above the margin of your market drivers.

Because people are easily tempted when something looks like an offer.... trust me I know.
Everything else that you tried and did not meet the market expectations, do the Frozen thing and let it go.

You can not have an endless inventory.
A controllable range of products allows you to prepare and stock your inventory in advance. That buys you time to properly display your whole inventory, instead of being trapped on working on new products.

If you have a standard product or a range of products that move the market the only add-on is an up-sell option. That will save you time, and time that can be used to market your product, reduce manufacturing costs and time, and keep your inventory limited and prepared.

Now I am talking about a product, but services are as good a product as anything. If you are a text writer, you can also offer formatting and display suggestions to upsell your product.
But balance it out, make sure the effort put in repays itself. Once you get all of the above sorted you are almost ready for level two.

There is just one more thing... if you work too much you spend too much.

Spending Money

If you are stressed and tired you are more likely to spend money on things that could have been avoided.

Things that make you feel better, but only for a short while.
Like doing two hours of overtime, making $40, and then spending $25 on a food order because you are too tired to cook. And another $10 on a charging cable for your phone, because your tired head lost or misplaced it.

Watching your spending might make you more than working.
I know I am super cheap being Dutch, but getting a hold and insight on your spending is key

Level One

Get Control Of Your finances in such a way that money works for you instead of you working for money.

But more about that next week because this post is getting way too Long.

Bikini Bottom Line

What I am trying to say is that as long as you are running after the money you will never be ahead of the game. When you pause, plan, and balance things that is when the game starts....the game of having money below the bottom line of the balance.

Once You See The Game It´s As If You Stepped Out Of The Matrix