The Need to Make Money

Making Money Can't Be Left to Chance - The PROBLEM and the SOLUTION

Financial Storm Clouds on the Horizon?

Inflation and Our Struggle to Keep Up

The Failing of Governments to Make Good On Their Promises

Self-reliance and the Necessity of Having an Additional Income Stream

Financial Independence and The Power of Leverage

The Need to Mind Your Own Business...

The Information Age - Its Challenges and Its Opportunities

Copy-Cat Business

The study of Making Money should be a subject of major importance in the educational system. But it isn't. We spend the majority of our lives slaving away for the stuff, yet the science of making money gets scant attention in school and university.

At best we get well educated in how to do a profession and then work hard for money, but we learn nothing about having money work hard for us.

No wonder that according to the US government, 95% of their population is dead or broke by age 65. That's shocking. (And later you will understand how this can be so.)

In light of the above, the main challenge facing people today is NOT the economy. It's lack of financial education (know-how) and how they think.

For example, there were more millionaires created during the Great Depression than in any other era of American history.

So, the main problem is not "out there." It, and the solution, is "in here" - inside our heads.

As a start, let's first get a better understand the World of Money that surrounds us and effects us so much. We will then be in a better position to navigate safely to the future of our dreams.

We have heard so much already about governments around the world financially bailing out corporation after corporation. And it's not the small or medium size companies either. It's the huge companies that are "too big to let fail." Companies like Chrysler, General Motors and Citigroup.

And some of them have already failed.

Is there something, that if powerful enough to bring down large companies, we should be mindful of, lest we suffer a similar fate?

Yes there is. In a few short words, it's Debt and Mismanagement.

Not just our own debt and potential mismanagement. Moreover, the debt burden on our government, and its policies for handling the nation's finances.

Coming back to these government bailouts of huge corporations...

A lot of these companies got into trouble because they expanded their businesses by inflating the amount of DEBT they took on - one way or another. (The actual way this may happen is not important here.)

And debt has to get repaid! The only value that debt has is the promise and ability of the debtor to repay the loan. It has no value in and of itself.

If the debtors are unable to make good on their loans, then the house of cards comes tumbling down.

Sometimes the house of cards can be BIG, as in all these huge corporations that have been failing all over the world.

And to make matters worse, when the US government bails out one of these companies, it does so with US Dollars which are backed by nothing but... you guessed it, debt. (More on this later.)

It's a house of cards, upon a house of cards.

But someone has to pay the bill on all this debt though. Who would it have to be...?

The only logical answer is... the taxpayer.

Ultimately, what propping up this money-system is your and my ability to generate value from our productive efforts, and to make the payments on this whole lot.

More and more of your income will need to be siphoned off via taxes, interest, and inflation to "fix" this mess. A mess you didn't create.

This is an insight into the World of Money that you didn't get in Sandpit 101. And probably not in Economics 101 either.

"Welcome to your debt-burden..."

As governments pump more and more money (currency) into the system in an attempt to rescue these kinds of economic situations, they only postpone the problem and make it bigger.

As they create new money, the existing currency in circulation is diluted and loses its purchasing power.

This is how inflation comes about. It is created. Those in the know call it "stealth tax."

The person/entity spending that newly created currency enjoys the full purchasing power of it before the process of dilution takes place. They enjoy this benefit at the expense of all those already holding that currency.This is why counterfeiting is immoral and illegal (at least for you and I to do).

Inflation is an invisible process, but its effects are very real and observable. Its effects are you having to work harder and harder just to maintain your lifestyle, as your money loses its purchasing power.

I used to think that inflation was a way of life, like gravity. But then I learnt that inflation only came about when governments started significantly increasing their money supply. And they do this voluntarily... all the time.

And this is only possible to do if your currency is nothing but paper (fiat) currency, not backed by gold or silver.

(Needless to say, the world's largest reserve currency, the US Dollar, is 100% paper money. As are all the other currencies.)

This poses a major problem for you: As a result, you have to work more and more just to maintain your standard of lifestyle, and you are not magically getting more hours in a day or month to compensate this with.

What's more, the days are coming when you will be too old (or tired) to keep working like you do, and will want to relax a bit and enjoy your "golden years."

But hang on, that's not a problem! Because the government or your company is going to take care of you, right?

Err...well, not actually.

Unfortunately, for years governments have been making promises they cannot keep. And this has been compounded by some of the laws they have changed or implemented over time. Like laws relating to pension plans and retirement.

And these laws effect everybody, not just those close to retirement. These laws will require the non-retired to subsidise (via taxes) the swelling baby-boomer retiree population.

In the old days, people could rely on a (Defined Benefit) pension plan that would guarantee them a predefined income until they died - whenever that occurred.

Courtesy of President Nixon, that all changed for US citizens in 1974 with the Employee Retirement Income Security Act (ERISA). Defined Benefit pension plans were then replaced with Defined Contribution pension plans.

The responsibility, expense, and long-term consequences of retirement passed from employer to employee.

These new (DC) pension plans are only as good as the contribution put into them. And today, most of them don't have enough funds in them.

What's more, most of these pension plans are funded with shares and mutual funds. So if due to mismanagement or a market-crash the person's pension plan takes huge losses, it's that individual's problem.

In addition to all this, the US government has been looting Social Security (a Defined Benefit pension plan for the poor) for years. And they are probably not the only government to have been doing things like this.

Soon over 70,000,000 baby boomers in the US will start to retire, needing money to live on. And most don't have enough money for retirement. In addition, their medical expenses will start increasing dramatically.

So if the government tries to help them, which it will, that will mean lots of new currency and more taxes for you.

You simply can't rely on the government having solutions for every problem. They don't.

Politicians are not necessarily well informed or wise in their policy-making.

If you don't believe this could be so...

US Congressman Ron Paul cited not so long ago, "There are members on the Banking Committee that still believe that the dollar as backed by gold."

President Nixon took care of the gold-backed dollar in 1971. I rest my case.

So, gone are days of relying on a government or company to take care of your financial future. Governments tend to be great spenders of money, not great makers of money. And besides, it should never have been their job.

Their job, in theory, should be to protect us and our property from physical threat, foreign or domestic, and to enforce contracts. Our job is to take care of ourselves and our families.

Placing our reliance on an uninvolved third party creates dependence and weakness. And dependence and weakness have never solved problems.

The good news is that you are the most qualified person to take care of your and your family's future. No one cares as much, and no one knows your situation like you. If you are smart enough to read and comprehend this article, then you are smart enough to create a future of financial independence. Not one of financial dependence.

You just need to be aware of a few rules - rules they didn't teach you in school.
It also helps to apply what you learn.

Financial Independence stems from the ability to do more and more with less and less. It is embodied in the concept of LEVERAGE.

If you can get yourself to think in terms of leverage, you will start to make rapid progress.

Leverage is all around us. Leverage (at least in financial terms) is either working for you, or against you.

If you work for a company, you are your boss's leverage. Even more so, you are the company's leverage. The bigger the company, the more leverage it has.

In addition, you are the government's leverage through taxation. And if you have financed your house, car, or washing machine, then you have made yourself the bank's leverage.

You are the one that does the work, and the other parties enjoy a benefit from your labour. Yes, you get a benefit too. But you only get a portion of the total benefit created by your labour.

Now, I am not making a moral case for or against how the system works. I only want to point out what the implications of the system are for you. Once you see things in this light, you are in a much better position to make well-informed choices for your future.

You don't have to change the system, but you may have to change how you see and do things.

The bottom line is this: The more other people are able to gain leverage over your productive efforts, the less benefit is left for you, and the harder you will have to work. And whether you do this by conscious choice or out of ignorance, it doesn't matter. The outcome remains the same.

Much of the time we do things out of default based on what we have been taught/conditioned to do. School and society are very effective in doing this.

Have you ever had the following drummed into your head? "If you don't get a good education, you won't get a good job. And if you don't work hard at a good job you won't have a good life."

Although this advice may have worked well for grandpa yesteryear, it doesn't seem to be cutting it these days. Hence both couples in the average household have to work flat-out just to stay afloat.

Over time the total amount of leverage working against the average family has been increasing, but families have not been counteracting with a proportional amount of leverage working for them.

So...

IF YOU WANT TO GET AHEAD FINANCIALLY YOU HAVE TO PUT MORE LEVERAGE TO WORK FOR YOU.

Working harder in your job or profession, or taking on an extra job is not going to bring about greater financial independence. It's not about working harder, it's about working smarter.

Exchanging more of your limited time for money is not going to solve what I call the Money Problem. It will just get you deeper into it. You need to get more leverage out of your currently available time.

And the only way to do this is via your own business - a business that leverages off other people's time and money. (And don't worry, I'm not talking about taking unfair advantage of people. I'm talking about win-win.)

We're talking about a business that has a system that enables you to earn more and more with less and less effort as your business grows. It is the system that works hard, and not you. Eventually you need to do very little work once your system has grown big enough. This is exactly how big businesses, once small, were able to become big.

In the past it was very expensive and difficult to build a large business system such as this. The average person was probably not able to do it.

When franchises came along a few decades ago, they allowed the average person a shot at tapping into an expanding business system. When Ray Kroc first started with McDonalds he was giving them away. Today a single McDonalds franchise can cost you over US$1 million.

In addition, franchises can become very costly to operate. The corporate head office wants its monthly cheque regardless of how your profits for the month are doing.

If you are not careful, you can spend most of your time and effort being head office's leverage. Building the wealth of the shareholders instead of your own.

But alas, in recent years a new form of leverage was bestowed upon mankind that has levelled the playing field between individual and large organisation. A form of leverage initially reserved for the technologically inclined, but not anymore.

This form of leverage has created the largest number of billionaires in the world.

You and I know it as... the Internet.

Now before you say, "Whoa, I don't know much about computers or the Internet." Let me inform you that technology has brought with it it's own solutions to its limitations.

I bet you don't know exactly how a telephone works, but you use it very proficiently. Sometimes too proficiently - as can be seen by your phone bill.

And I bet that the average person who sends an email knows nothing about POP, SMTP and TCP/IP.

To point is that even the task of setting up a website on the Internet has now become child's play. The only people not doing so are the indifferent, the lazy, or the uninformed. But since you are reading this article, that's probably not you.

Up to quite recently, the Internet had only been a great source of information for individuals, and not much more. Only companies were using it for commercial value. But that has all changed.

Individuals are able to set up their own home-based business online, in their spare time, and start to generate more and more revenue as their online business grows and grows. Their expenses are low (no leased office space, no employees, no inventory) yet their income has the potential to keep growing and growing over time as their client-base expands.

However, even though the Internet offers leverage, serious leverage, it can still pose significant hurdles to the uninitiated to use it as a platform for a viable commercial enterprise.

In my opinion the main hurdles are...

1. Finding/creating a viable opportunity to implement online, and


2. The know-how of going about setting up and operating an online business profitably.

(It doesn't help having an online presence, but no traffic and no revenue.)

Now, all this may all sound a bit daunting, but it isn't really if you are able to copy how someone else has done it.

The best business model that I know of for overcoming these hurdles and making money, is something called Network Marketing. More specifically, Internet Network Marketing.

I believe that a Network Marketing business, if done correctly, and coupled with the Internet, offers people like you and me the best shot at setting up their own (leveraged) business and obtaining real financial independence.

Network Marketing offers both the opportunity to build such a business, and the training/coaching necessary to do so. And you get to copy the successful marketing methods of someone else, instead of doing it trial-and-error all by yourself.

Robert Kiyosaki (author of Rich Dad Poor Dad) refers to Network Marketing as "the business school for people who like helping people." I agree.

It is a "school" that teaches the business skills required in the real world; and you only get ahead by helping other people. Win-win.

It really is a wonderful way of making money.

A quick disclaimer though: Not all in the Network Marketing fraternity are kosher. There are good Network Marketing organisations and there are bad Network Marketing organisations.

Some make use of proper business and marketing methods, and others make use of hype and harassment-marketing. The latter are easy to avoid - just listen for all the hype!

All in all, I highly endorse Network Marketing as a way to "mind your own business" and make money. It is an efficient and simple business model that anyone can put into practice. As long as you go about doing it the right way of course.

CLICK HERE to read an article on Network Marketing and learn more about this.

I hope you have found this article informative and helpful.

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Copyright 2009 by Tony Kennard