It Takes Money to Make Money - oh yeah, how much?

It takes money to make money. That's what they say, but you know what they say, "You can't believe everything they say."

And, I'm especially skeptical when someone has their eye on my money and keeps repeating the phrase about how I need to part with it so I can make more of it for myself. That always leads me to believe that their aim is making money for themselves simply by getting their hands on some of mine.

It doesn't seem reasonable to believe that others are interested in seeing me use my money to make more of it for me. Their first interest is to earn money for themselves, not me. There's nothing wrong with that, but just don't lose sight of that fact.

Now, being an individual with a background in starting and operating my own enterprise, I know that indeed it takes some financial resources to get the ball rolling. I also know that investing enough to almost succeed is worse than investing nothing at all, because it's a costly route to certain failure.

The key to understanding when the saying "it takes money to make money" is true, is to know exactly what you're investing in, why it's necessary, how it will facilitate income, and to have reasonable expectations in terms of return on investment. The idea of reasonable meaning that you have reason associated with your expectations of return (income), and not simply hope.

Many of us, myself included, would like to have revenue streams in addition to regular employment, so we need to be on guard when investigating business opportunities. There are lots of scams out there, so be cautious about all such interactions with others.

It's true that it takes money to make money, but it's also true that many a business can be started with very little capital outlay, so don't be in a hurry to invest your money until you are sure that it's a good investment.

Instead of simply following the suggestions of someone trying to get you to invest in a business, ask yourself a few good questions like:

  • Why this business? Do I have a passion or skill set that is especially suitable for success in this area?

  • Is the approach to success well laid out? In other words, is there a business plan associated with this opportunity?

  • How have other people started similar businesses?

  • Is there another, more cost-effective approach to starting this business?

  • Can I start this business more cautiously, like a limited effort or part-time endeavor, until I can see that it will be fruitful? If not, then why not?
Talk with others in the business and learn about their insights. If there are landmines out there, you'd like to know about them from someone who has crossed the minefield.

Whatever you do, don't expect to buy yourself into a business, unless you're really buying a business from someone who has it well established.

No doubt, it takes money to make money, but if you're sitting in front of someone who is trying to convince you to buy your way into a business of your own, then just keep in mind that their main objective is most likely to get money from you. Your success as an owner/operator of an enterprise is a secondary concern, if it matters to them at all.

Stay realistic. You can't buy your way into a business, you have to work at it. If anyone tells you that it takes money to make money, but doesn't address all of the work involved, then it's time to walk away. They're not being realistic about a real business opportunity.

Done with It Takes Money to Make Money, back to Avoid Money Making Scams

Back to Making Money

There certainly is a broad scope of topics here at Frugal Living Freedom. When you think about it, money permeates so very many activities in our lives, therefore, being frugal encompasses a wide range of interests, from being employed to taking a vacation, and just about everything in between. Enjoy the variety, pick up some new ideas, and start making frugality a part of your signature.

I'm a big proponent of being debt-free, and I mean entirely debt-free - no mortgage payment. It's not essential for financial freedom, but you'll love the feeling once you get there. If you didn't have a rent or mortgage payment, how much more could you do for yourself with your current level of income? I suspect plenty.

If you ever hope to see an abundance of wealth, you need to plug the hole in your boat. The wealthy don't necessarily make lots of money, instead, they know how to hang onto what they make, and make it work for them.