6 Money Skills I Have Learnt Over the Last 3 Years

There’s one thing about being successful – it’s best learnt from those who have already done it. In the last few years, I have read tons of internet articles and books on making money. Well, I guess it’s something anyone wants to learn. If you feel that your life is moving forward and your wealth isn’t surging accordingly, you’ll be keenly picking multiple sources to see what you can do to improve your situation.

In this article, I have highlighted all lessons I have learnt on the subject of making money. You can also benefit greatly from these insights as I believe they have enriched my life in a significant way.

1.      Money is Freedom

Make no mistake – money equals freedom. One of the best books I ever read on the subject of wealth taught me that without enough of it, it’s impossible for most people to live life to the fullest. Of course, there are a lot of people who’ll disagree with this notion, but it certainly makes great sense. The rich know it. I’m not trying to say that money can buy freedom. What I’m trying to say is that having enough money gives you the freedom to choose what you want to do, and when you want to do it. So rather than committing all your time to the 9-5 office job so that you can be able to pay your bills, you’ll have the freedom to think beyond that. Think about it! If you really had a lot of money right now, would you still be doing that job? And what if you get sick. Could you be able to afford the best doctors medical practice has to offer?

2.      Invest Daily

Yes, at this stage, you’ve already learnt that money is freedom. But how do you actually start making that money so you can enjoy this freedom? The time is right now. If there’s one thing I have learnt from the rich, it’s that every day is the time to make investments. Opportunities are always there, you just need to open your eyes to be able to see them. That conversation you had with your friend, parent or colleague the other day could be the unique opportunity you’re waiting for. Think about Mark Cuban, internet billionaire and a ‘shark’ on the popular TV program ‘Shark Tank’. The guy used to sell beer, alcohol and that kind of stuff in a bar. But then he got an idea about starting a video site. The idea became really successful and eventually he sold it for billions of dollars! So never say that there are no opportunities anymore. Just look very closely and you’ll definitely see them.

3.      Don’t Spend

I have learnt that not spending is the same as making money! But this doesn’t mean that you have to become a penny pincher. It just means that you need to sacrifice in some areas so that you can make enough money to invest elsewhere. For instance, if you’re flying from one city to another and a plane ticket costs more than $3000, why don’t you take a seat in business class and save $1,000. Somehow, you’ll have earned a thousand bucks, which you can channel to an investment somewhere. Money working for itself is money you don’t have to earn again!

4.      Invest in Assets

And not just assets. I have learnt this from a number of articles written by some of the most successful entrepreneurs today. There’s the middle-class syndrome, and I guess that’s where I belong. We are the guys who earn a substantive amount of money, and then squander all of it on ‘lifestyle’. We buy expensive clothing, accessories, cars, etc. Instead, we should be investing in appreciating assets! It’s that simple!

 5.      It’s About the Skills

If you’re still employed and earning a decent sum of money, have it in mind that it could all go away in a snap. So never take comfort in your paycheck. Rather, focus on the skills. You’d rather get a low paying job in your 20s, and then become a multi-millionaire in your 40s. So if there’s anything you can do to increase your skills when you’re young, bank on it.

6.      Don’t Put All your Eggs in the Same Basket

Don’t make this mistake that a lot of people still make. The wealthiest people will never put all their money in one or two stocks. They will diversify it to include a variety of investments, bonds, stocks, mutual funds, etc. Think about Sir. Richard Branson. His company, Virgin Group, owns over 400 other companies. So if one sector of the economy gets hit really hard, Mr. Branson can always afford to smile. Because he made the smart decision not to put all his eggs in one basket. Instead, he put them in so many baskets!

Well, I’m not a self-declared tutor, but those are some of the important things I have learnt about money, making it and keeping it. So try to see whether you can borrow a leaf!

Making Money is Dirty?

Since that episode at the playground when I was twelve years old, I’ve always looked at making money as dirty. That there was something immoral and suspect about making a huge profit. I looked at capitalists and business people as somewhat dirty and morally suspect as well. Things didn’t improve when I went to college. I went to college at the University of California at Berkeley which is a very liberal college and my friends were very big on the idea of the government taking care of people from cradle to grave. They think that the whole solution to all of the humanities’ problems can be found in the hands of government and government experts. This was the whole assumption that my college years were based on. The problem is it’s easy to be a socialist when you have no money. It’s easy to be a socialist when you don’t have a job. I learned the hard way that after I got out of college and got a job that Uncle Sam was taking a nasty chunk of my pay and even though my payslip will say that I made a decent amount of cash, a huge chunk of that was missing thanks to this concept called taxes. Still, I believed in the whole idea that government is the solution to all sorts of problems. It was a very hard ideological habit to kick. Part in parcel of that was the whole employee mentality that I developed.

I always thought that the way to get ahead was to work for somebody else. I never really looked at myself as capable of being self-employed or owning my own business. Again, this is all a part in parcel of that talk my father and I had when he discovered me and my brother were making a lot of money by reselling candy. The employee mentality that I developed in my 20’s was a big handicap because it limited my ability to develop a realistic conception of money, wealth creation and even my own appreciation of what I’m capable of. I developed a fairly crippling attitude regarding money that I have to be an employee for me to make a living. It was some small consolation to know that I was not alone. In fact, the vast majority of Americans have the same exact employee mentality.

My First Taste of Arbitrage

For the longest time, I was quite happy with my employee mentality. I would just show up to work, do my job in the most efficient, quickest and most effective way possible and my boss would let me go home early. To me, this was the best of all possible worlds. My idea of being the perfect employee was to do a really great job, producing work quickly, showing up early and leaving early. In fact, my supervisor loved me because unlike other employees, I was able to do eight hours of work in only three hours.

I was very happy working as an insurance adjuster in Los Angeles for several years. In fact, it got to the point where I would come in at nine in the morning and leave at eleven. How was that efficient? I was getting all sorts of raises and promotions and I was happy with that lifestyle. I could spend the rest of the day at the beach. I would often go to El Matador Beach near Malibu and enjoy the rest of the day there. However, my life was about to change when my boss Frank White told me to adjust certain BMW rims. I had to go to the west side in Brentwood to adjust this woman’s BMW. She apparently kit several potholes and this five thousand dollar set of stainless steel crone rims that she had were damaged. In my mind, I was expecting like really warped and chipped rims. I was expecting the worst when I showed up at the body shop that her car was located in. I was surprised that these rims were at least from a very superficial level, look perfectly intact. They didn’t look warped at all. They weren’t even chipped or nicked, but when the body shop manager took them off and we ran some tests, there were slight warps in one of the wheels.

According to company policy, if a full set of rims had one wheel warped, you have to replace all four. I basically argued with my boss and we’re going to spend five thousand dollars replacing a whole set of stainless steel crone rims when only one of these wheels was messed up and it was slightly messed up at that. Do we really have to pay five thousand bucks? That was how big of a company man I was. My supervisor Frank said ‘we have to replace all four’ because that’s company policy. Being the boy scout that I said to Frank ‘well Frank, what if we get defrauded? What if she just buys a replacement rim for that one wheel that was screwed up and keep the rest of the money?’ Frank had a stuck answer. He said ‘well, this is a common practice in our industry, you just take all the items that you paid for and to make sure that the body shop replaces all those rims. Of course, the natural question that followed was ‘what am I going to do with these rims that are going to be replaced?’ The next sentence out of Frank White’s mouth changed my life forever. He said ‘I don’t care what you do with them. Just make sure that you remove them from the body shop.’ So I told the body shop manager ‘remove the rims and put it in the trunk of my company car’ and I got the hell out of there. Without a moment hesitation, I went and placed an ad on the Los Angeles Recycler.

Recycler was a buy and sell classified ad magazine where people sold used goods. Just to be sure that I was complying with company procedures, I called Frank and I said ‘well, are you sure that I could keep these rims?’ In no uncertain terms, he said ‘yes, you can keep those rims.’ I was in the free and clear so I put an ad selling these rims for fifteen hundred dollars. Sure enough, a day didn’t even pass when my phone rang and some Afghan guy called and he said he wanted to take a look at the rims. To make the long story short, within twenty-four hours I was able to sell those rims which cost me nothing for nine hundred dollars. This was an experience that changed my life. This showed me that I didn’t have to live my life as an employee. Also, it showed me the value of creating value for other people. When you make money off of the exchanges, you make money selling stuff, when you make money selling services, you make money because you offered value. You didn’t steal from other people. You didn’t transfer wealth from somebody’s slice of the pie to make your slice larger. You basically offered value for value. This one experience changed the way I looked at wealth. It changed the way I looked at myself and it changed the way I looked at how I’m going to make a living from that day forward. You have to remember, at that stage of my career, I was making somewhere around in 2014 dollars, seventy-five thousand dollars a year. Not too shabby. I also have a company car, full health, and dental and I was working at one of the biggest insurance company in Southern California, but that experience showed me that I was capable of something more.

After three years in law school in San Francisco, I was ready to become self-employed. Originally, I wanted to own my own private practice law firm, but the Internet blew up in 1996. I became so fascinated with making money online using websites that in my first year of law school, I started my own academic essay consultation company. In that year alone, we made seventy-five thousand dollars. That was the beginning of my long journey in self-employment. I have never held a job ever since. To me, a job is a step-down. To me, a job is really nothing short of slavery. Nothing to me is more pointless than making somebody else’s dream come true. Your job as a human being is to make your own dreams come true.