Achieving financial success is everybody’s ultimate dream. Although it is a common goal, everyone must first learn to differentiate the basics of how to multiply their income. There are in fact three (3) basic ways of increasing income: trading time for money, trading money for money, and trading expertise or value for money.
Most of us are only familiar with the ‘trading time for money approach’ because this is what the formal education system teaches us. Trading time for money basically means, you working for someone else for a specific amount of time and then they pay you. This is the usual long and hard way of multiplying your income. Working for someone else drains your energy, and often you still do not make as much money at the end of the day.
The second approach is to trade money for money. I personally use this approach eventually to build up my own wealth.
What does trading money for money mean?
It is simply earning money through investing. You may choose to invest your money in a fixed deposit, a savings plan, the stock market, property and so on. This is the best way to make your money work for you instead of you working hard for the money.
Now you may be thinking that investing sounds great but how can you invest any money if you lack the additional funds in the first place? In fact, many people do not try this approach because they only have enough to pay for their personal needs.
The best way to achieve this is to use the first approach – trading time for money – to initially build up your savings. You need to work for money during the first few months or years. Set aside a small percentage of your paycheck every month as savings for your investment. Over time, you will ultimately move from ‘trading time for money’ towards ‘trading money for money’. Then you can sit back, relax, and let your money work for you.
The third approach is a great option for those who are adventurous, willing to take risks and think differently. This is the entrepreneurial option which involves trading expertise or value for money.
Entrepreneurs normally have flexible schedules, work less, and earn more. In this third option, there is no limit to the amount that entrepreneurs can earn in a day.
However, in order to earn money through trading expertise or value for money, you must first figure out and establish who you are and what service you can give. What knowledge and information do you have that could help others? You can find value from your previous work experience or even from your hobbies. This is how you create your intellectual property.
You do not need to be a rocket scientist to create your own intellectual property. You just need to have an area of expertise or access to an expert and a drive to succeed.
If creating and selling intellectual property is so simple, why isn’t everyone doing this?
Traditionally, through the formal educational system, we are taught to finish school and then become an employee at a company. The entrepreneurial spirit is often not promoted; in fact, it is almost shunned among several societies.
In addition, entrepreneurship is not for everybody. Entrepreneurship is extremely challenging and successful entrepreneurs need to be extremely persistent, dedicated, focused and patient.
Is it possible to multiply your income through any of these three approaches?
You can certainly multiply your income by trading time for money. But that is going to take a very long time. Plus, you may not find the time to pursue your passion because you are too focused in trading your time for money.
So, trading money for money is definitely more favorable because investments are a great way to make your money work hard for you. The downside to this approach is you need to have money saved up before you can start investing. Hence, you will have to first trade time for money to build up your savings.
Trading expertise/value for money is very attractive because this gives you the freedom to pursue your passion and earn money at the same time. The key question to ask here is: “Do you have the passion and determination to become a successful entrepreneur?”
In conclusion, I would recommend you to try utilizing these three (3) approaches to multiply your income. If you are working for money right now, take a small percentage out of your monthly paycheck and invest it into a savings plan or a fixed deposit. That way you are forcing yourself to save and make your money work for you. When you have some spare time, create your own intellectual property and try becoming an entrepreneur. Who knows you may actually find your true calling within the entrepreneur route.
About Your Guest Blogger: Chloe Hung is a woman who has a transformational message surrounding motivation and happiness through her personal success story. She is an International Actuarial Consultant and Coach from Singapore.