Sunday, April 1, 2012

The Best Way To Earn Money

The best way to earn money is sometimes to spend.  I have talked a lot about utilizing credit card rewards, but that is just a way to earn some cash on your normal expenditures.  There are often lots of opportunities to be made by just spending all the money in your wallet or maxing out your credit cards.  There is a saying that you can't earn money until you spend, and whether you are running a business or just looking to consume goods, that can't be more true.  The extra benefit that we get out of just making a purchase can often help us be better at our jobs and give us more earning power to get more money in the future.

The key insight into this logic is that there is some additional opportunity you have with every purchase.  See those shoes you really want to buy?  There is a small chance that the value of those shoes are much higher than what you are purchasing.  That possibility often does not come into consideration when we use our day-to-day thinking and budget planning.  Thinking about going to an upscale restaurant?  Although the food is much more expensive, the higher quality will improve your health as well as nourish your body better for future activities.  There can be immense benefits by having an expensive meal before important events like an exam or when a critical work project is coming due.  There is even a compounding effect if you continue to splurge the entire week or month before you need to do some real work.

Sometimes, spending money on things that don't seem to give you any realistic benefit at all can be extremely rewarding as well.  For example, lottery tickets, which have negative expected value, can bring people immense joy at the idea and hope of actually winning the jackpot.  Oftentimes, people only buy the ticket thinking about the chance of winning; however, if they took into consideration the benefits in happiness they get from buying lottery tickets, there would be many more lottery tickets out there.  Not to mention that real people are winning the lottery every week (like the three people splitting the $656 million Mega Millions jackpot this past week) and it could be you next!

Saving for the future sounds fine and all, but sometimes there are real opportunities you just have to take advantage of in the present.  And unless you can be absolutely sure with each and every decision you make, you may be better off just taking all opportunities as you see them, without regard to how much you have left in your wallet.  The joys just from living in the moment may make everything worth it, and that joy can easily translate into quality work which will help you earn even more money.  And, this increase in consumer spending will help accelerate the economy which means more jobs for people and higher wages which ultimately mean you make more money.  Make sure you let everyone know about this way of earning money because if we all do it together, we all win.  Happy April 1st!

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