On Making Money.

Part 2 of Project D.

Now you got your dream mapped out, you’ve summoned the courage to start, what you need next is the resources to get you to where you want to be.

Money is a very important thing in life, there is no escaping from it.

My mother always used to tell me (in an old Chinese saying), that with money you cannot do everything in life, but without money you cannot do anything in life.

I’ve always believed that money is just a means to an end rather than an end in itself. What’s the point of having all the money in the world if you’re not going to do anything in your life with it? It’s not like it’ll be of any use when you’re 6 ft. under.

So here’s everything I’ve learnt about money summarised in a post, whilst I don’t pretend to be very rich or successful, these are the ideas that got me to where I am and I hope by sincerely sharing it with you, you can use these ideas to get further than where I’ve ever managed to go.

So what is money? How do we make more of it?

Here’s the secret, you have to realise that money is just a piece of paper.

It is a piece of paper that is meant to be a representation of value, the paper itself is pretty much worthless.

A good read or watch to understand this concept is the Ascent of Money (a book and documentary series by Niall Ferguson). Basically money evolved out from the barter trade system to ease transactions, i.e. trading a quarter of a live cow for a few pairs of sandals is pretty difficult, especially if you want to keep the cow alive, hence a common denomination was needed.

Thus the simple rule is: To make money, create value.

It’s amazing how many people seem to not realise that.

Money is not going to drop out of the sky, you can hope and wish all you want, and maybe you might win the lottery if you’re lucky, but for me I’d rather make my own chances.

A craftsman creates value by making goods. He creates goods that others need or want so that they can lead better lives.

A merchant creates value by bridging geographical distances. He buys goods from one area and sells it in another.

An investor creates value by bridging time. He buys when the market doesn’t need or want a certain thing and holds them till the market does.

So you have to ask yourself in whatever circumstance or situation you are in, how are you able to create value? And then ask yourself how can you monetise it?

No one’s circumstance or situation is ever going to be the same as yours, so you got to stop looking outwards for someone to give you a specific plan or instruction.

When I decided I needed quite a big sum of money to fund myself overseas to study and train, I knew I had to do something different from a part-time or salaried job because it would never pay me the kind of money I needed in 11 months.

I noticed then an opportunity to sell electronic systems and components to corporate clients as a finished product. Basically I started off by selling 2 television sets with peripheral equipment, provided the installation and typed out a set of instructions on how to use the system as a whole. Electronics and computers have always been an interest of mine since I was young and hence it came quite naturally to me. The value I was able to create was to simplfy and deliver a complex system that could be used by an everyday man. And for a couple days’ worth of work, I was making a very decent profit.

One project lead to another and things got big very quickly thanks to the economic boom back then. But at the peak of the boom, I decided to quit because I had the money I needed and decided to go pursue my original dream.

Must say it was tough to walk away because, I’ll be honest with you, earning lots of money and the things you can do with it is a very good feeling indeed. But as I said, you always have to remember that money is just a means to an end, and that was probably what saved me.

The market crashed in 2008 pretty much right after I pulled out of the market and took whatever money I had out of it to come to the UK to become a decathlete. If I stayed on to work instead of pursuing my dream I probably would have lost everything.

You have to look inwards and dare to take on opportunities. There’s going to be a lot of bloody hard work involved so don’t expect an easy ride, but let me tell you this, it is possible.

To end off here’s 4 books that I think anybody who’s interested in their own financial well-being should read.

The Richest Man in Babylon by George S. Clarson – Greatest personal finance book you’ll ever need. ‘A part of all you earn is yours to keep.’ Learn the rules, live it.

Rich Dad Poor Dad by Robert Kiyosaki – Great concept written in an easy to read manner that will make you realise why it is important to spend money on buying assets rather than liabilities. Do be careful though; Do not fall into the trap of buying book after book or attending those exorbitant seminars by the same group of authors thinking there’s a specific set of instructions in there for you to earn your millions, there isn’t. Learn the concept, look inwards for the way forwards.

Think and Grow Rich by Napoleon Hill – Interesting thing about this book is that not everybody will get it. When I bought this book many years ago an older gentlemen in front of me in the queue noticed I was going to buy this book and he told me he read it and it doesn’t work. Read it with an open mind, the secret is that your mind sees exactly what you want it to see.

The Intelligent Investor by Benjamin Graham – Written by someone who is widely regarded as the mentor of Warren Buffet. Took me 3 years to actually read through because it is incredibly dry, but learn the concepts involved and you will learn how to value and price anything.

Thank you for your read and I sincerely hope these ideas can help you achieve your financial dreams.

Stay tuned for the next post in the Project D series: On How to Free Your Mind.

Some of us, we were born to fly.