Make Money Jot

Every Friday is special report day.  Each week, I am going to build on a topic to cover more detail and depth on the important details for making money.  This first special report series is about the philosophy of making money.

Before we start to address the philosophy of making money, let’s get the myths of making money out of the way.  Josh Hyatt, a senior writer for Money Magazine, wrote about the five myths of making money for CNN (check it out here).  I’ve added a sixth which is debatable, but I’m going to cover it anyway.

Myth 1: You’ve got to have incredible charisma

Jack Welch, in his book Winning, covered an understood reality that business, like life in general, is more successful for an extroverted person rather than an introverted person.  We all learned this in high school.

The fact of the matter is that no matter what your social nature is, it’s how you handle your responsibilities at work, how you respond to opportunities for advancement, and how you manage your money that contributes to your ability to make money.  If you are relying on leadership opportunities to improve your financial status, see 7 Steps to Lead without Inherent Talent.

Myth 2: You must be able to see into the future

This is only true if you are relying on winning the lottery or day trading.  While creating a foundation for innovation in business does rely on the knowledge of the business and the creativity of the people, some of the greatest innovators of our time, created the future and didn’t interpret it – Henry Ford, Sam Walton, and Steve Jobs for example.

For the rest of us, there are many articles written about sound business and investing principles to guard against NOT knowing the future.  One of the greatest investors and one of the world’s wealthiest, Warren Buffett follows the principles of Benjamin Graham for investing in a market place with extreme highs and lows.  Check out: How to Think Like Benjamin Graham and Invest Like Warren Buffett.

Myth 3: You’ve got to stick to your guns, no matter what

Thomas Edison said, “Genius is one percent inspiration, ninety-nine percent perspiration” and “I have not failed. I’ve just found 10,000 ways that won’t work.”  Keep perspective.  Albert Einstein defined insanity as, “doing the same thing over and over again and expecting different results.”

Sometimes, you have to learn from your mistakes.  Sometimes, you have to listen to other’s advice.  Don’t get discouraged; get encouraged when people give you feedback.

Myth 4: You need to take big risks

Some people enjoy playing high stakes.  For those, I’d recommend reading Playing the Highest Stakes in HedgeHogging.  For everyone else, I’d recommend following the advice of the world’s greatest investor, Warren Buffett, How to Think Like Benjamin Graham and Invest Like Warren Buffett.

Risk Management is a valued skill set for three reasons – you know how to mitigate risk, you know how to guard against risk, and when the worst happens, you are still traveling on the money making adventure.

Myth 5: You need a burning desire to get rich

It is certainly true that passion and desire drive the best to get better, but having a passion and desire to get rich is not going to get you very far.  Having a passion that you can make money from, that will take you places.

For most entrepreneurs, the desire is not about money.  The desire is for achievement.  Money is merely a way to keep score - an entrepreneur is achievement oriented.

Debatable Myth 6: You need money to make money

This tends to be true for most people who do make money – they had money to start with.  Even in Entrepreneur’s Hot 500 Fast-Growth Companies, 387 of them started with the savings and personal funds of the entrepreneurs themselves.

In this day and age, you can build a website and make money online with what you know and very little actual cost.  Other entrepreneurs are able to use other people’s money to make money – venture capitalist, angel investors, or loans and credit.

But, by large, if you have money and you manage the money well, you will make money.  If you do not have money, you need to learn more and be more reliant on what and who you know.

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