It’s the age old question and one not easily answered – how to make money. There are as many ways to make money as there are people to make it – how you eventually go on to make it depends on you.

Nothing happens until something is sold

This oft repeated adage is the bedrock upon which economics professors have been teaching econ 101 upon since there were schools to teach it. In order to generate money, you need to give someone something they want, or provide a service they need. This is the consummation of a sale, and that is the beginning of how to make money.

Find a need, and fill it

Taking the last statement to its logical conclusion, one has to simply find a need and meet that need and the resulting transaction will generate money. If it sounds simple, that’s because it is simple – deceptively simple. Most people never grasp this concept and continue to wonder why the prospect of making money eludes them. Whether the need you are filling is labor that someone else requires, a product, or a service, the mechanics how to make money is all around you – you just need to look.

Labor

The easiest way to make money is to do a job that someone requires, and is paying you to do. This is called employment, simply put. Most everyone from the lowliest janitor to the Fortune 500 company CEO understands this principle. What people on the lowest rungs of the employment ladder usually miss, however, is the laws of supply and demand. The janitor in the previous example is doing a job literally hundreds of thousands of people can do. The skill set he needs to possess in order to do that job comprises a short list, and many people who aren’t janitors already possess most of those skills. This means he is not in demand, and is paid accordingly. The CEO on the other hand, has skills that few in the country possess – perhaps a few dozen at most – and these skills are prized and therefore more valuable. Note to self: acquire skills that are in demand, and you will realize how to make money.

Products and services

When labor is taken out of the equation, we realize that each of us requires certain products or services regardless of our social station. The janitor will require toilet paper as will the CEO, and nowadays they probably buy the same brand. Therefore, it only seems fitting that an individual who makes toilet paper can sell to both, and generate a profit. The same goes for services – both janitor and CEO will need dental work at some point, and there will be a dentist around to serve them both, and charge them accordingly. Note to self: How to make money involves making something someone needs, or providing a service that someone needs.

It’s stunning to imagine that there are only three methods involved in how to make money, fundamentally. Make a product, perform a service, or provide labor. You can’t count interest bearing investments, because you need to supply money for those to make money. Making money from nothing will always involve those three things – so what are you waiting for??

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