How to make more money, but more importantly, keep more of what you earn

Most GenXers don’t spend their money wisely.

That’s not an insult on my peers; there’s plenty of blame to go around. Yes, we want what our parents had at 50 and we want it at 25, but part of the problem is the images all around us tell us we have to have all that. And if my education is any indication, the only financial education I received in school was an aside in a U.S. History class.

Let’s talk about how to earn more to dig out of financial ruin, and how to stay out.First and foremost, usually when people get to the point where they start typing “earn more money now” or something similar into Google, usually they need immediate help. A year ago, I was in that situation. Talking it over with the higher-ups didn’t help–a few months later I lost my job. Ouch.

I’d be lying to you if I told you I wasn’t bitter. I still am. But in a way it was the best thing that could have happened to me, because it forced me to look for opportunities. I already had been, but it forced me to find others that I probably wouldn’t have, otherwise.

There are a few ways to make a little money but it won’t necessarily happen immediately. If you have a web site, put Google ads on it. Click my link to find out how. Whether you get your first check in a month or in a year depends on how much traffic you get. A faster way to make a little money is to sign up for some online surveys. You won’t get rich, but a dollar here and five bucks there adds up. Sometimes you’ll hit the jackpot and qualify for a $25 survey. That won’t pay the mortgage but it will pay for a few meals.

Here’s another idea: Become a mystery shopper. Google for it. But don’t pay anyone to become a mystery shopper, not when there are legitimate outfits who are willing to pay you. Just keep in mind some of them want references. That’s actually a good thing. It protects your reputation and theirs. Again, it’s not big money, but it’s fairly easy money.

But I’ll be blunt: If you’re in some real trouble and there’s a bill that’s due in two weeks and you can’t pay it, then it’s time to make some sacrifices. Do you have any recent video games? Any collectible CDs or DVDs or VHS tapes? Collectible toys, such as Star Wars figures? There are lots of places that are willing to buy things like that, but to get top dollar you have to sell it yourself. Search eBay, find out what your items or something similar are selling for, and think seriously about liquidating some stuff. Don’t sell your family heirlooms, but if there are things that you can sell now to get you out of trouble and replace later when you’re out of trouble, consider it. While collectibles do increase in value, I’ll let you in on a dirty little secret: Most of them are doing well to keep up with inflation. None will increase as quickly as your debt–not for a sustained period of time, at least. If you have something that is, sell now. The bubble will burst, and you’ll be able to buy it back cheaper later.

And something sobering will happen as you research what some of the things you own are worth. You’ll find a lot of them aren’t worth anywhere near what you paid for them. There’s a lesson there. It’s much better to spend your money on things that hold their value than on things that have bling factor but have no value once the 14-day return period is over.

So when you have money again, spend less on worthless things so you have more to spend on things that do hold their value. A big truck turns heads and lets you bully people on the road (and the ads to some degree encourage it) but can you really afford $40 a week to keep gas in it? Do you have to haul stuff often enough to justify that expense? For the majority of people, it’s much better to drive an economy car and put the money you save on the lower payment and less gas towards paying off debt. Borrow or rent a truck those occasional times when you need to haul something. So skip the Hummer and get a house. You need a house anyway, and while a Hummer will lose value when you go to sell it, a house usually will gain.

Let’s go back to the eBay thing for a minute. Ebay does a lot of good things. Once you’ve sold your stuff, you have the option to go buy more stuff to sell. Buy what you know and only what you know, and only if you can buy low and sell high. If you can’t either double your money or make $10, don’t bother. It’s best to find something that lets you do both. But if you have the ability to do that, you have an asset that stands a chance of turning your financial situation around within a few years.

But it also does something else. It teaches you how to sell. There is no better, more useful ability than how to sell. Not everyone sells merchandise for dollars, but everyone has to sell ideas. If you regularly find that people don’t listen to you, then that’s a good indication that you need more salesmanship ability. Yeah, but those people are idiots, you say. Even better. There are more idiots out there than smart people. Most rich people got rich by getting idiots to buy their junk.

I remember reading a line in a book once that asked me if I could make a better hamburger than McDonald’s. Of course I can. So why did Ray Kroc have more money than me?

By the way, I don’t mean any insult by any of this if people don’t listen to you. There are a lot of people who don’t listen to me either. I need to work on my sales skills as much as anyone.

I did something else before I started selling my stuff. I took a walk. I walked at least once a day. But I didn’t just walk. I was picking up aluminum cans. At 40 cents a pound, an aluminum can is worth about a penny. There’s no way I can pick up 100 cans in an hour, so it’s a lousy way to make money. But nobody else was paying me to do anything else during that time. I made sure I didn’t walk during working hours so I wouldn’t be out if the phone rang with a job opportunity. At least I felt like I was doing a little something. It was very little, but it kept my mind off things so I didn’t get as depressed. It also helped me watch for opportunity. Those cans aren’t worth anything, but the ability to quickly spot things of value from far off is worth something. It made a few house payments when I didn’t have a 40-hour-a-week job.

That’s enough talk about making money. I’ll admit that they’re just general ideas. I can’t give specific advice because something that works where I live might not work 100 miles away. Something else works there. The nice thing about the United States is that there always is an opportunity, no matter where you are. Although politicians seem to be trying their best to destroy that, they can’t destroy opportunities as quickly as you can find them.

I read a study this past week that said 70% of college graduates today can’t balance a checkbook, and when presented with a 20-ounce jar of spaghetti sauce for $1.99 and a 32-ounce jar for $2.49, they don’t know how to figure out which one is the better deal. That should scare some people.

But it occurred to me that I didn’t learn how to do that in school. I learned it from my mother. And I think she learned it from her mother, who must have known it because she managed to raise 11 kids and her husband didn’t have any money.

They don’t teach that kind of thing in school. To me, that’s the only thing math is good for. But I don’t know how old I was when I realized math was useful for that. Before that I thought math was just something teachers used to prove they knew something I didn’t.

There are lots of books out there that try to teach you how to make more money. But a more valuable skill is learning how to spot the good deal. Learn how to calculate the cost per ounce and use it. Carry a calculator with you if that’s what you have to do. There’s no shame in that. A calculator is also a useful tool for keeping a running total of the cost of the stuff in your cart. So it might be a good idea to carry two calculators. They’ll pay for themselves the first time you use them.

And if you have any influence with math teachers, please hand them this word problem. It’s the only good use of math I can think of for a non-engineer:

A television costs $199 at a store two miles from you. The sales tax rate in your town is 5.75%. The same television costs $179 at a store 100 miles away. The sales tax rate in that town is 6%. Your car gets 25 miles to the gallon. Gasoline costs $2.00 a gallon. Is it cheaper to buy the television at the store two miles away, or is it cheaper to buy it 100 miles away?

I’ll conclude with the secret of getting rich. The secret isn’t to make lots of money. It’s human nature to spend more money as soon as you make more money. The secret is to spend less.

I remember when the first of my college classmates bought a house. He told me that at the end of the paper, it told him how much money the loan was for, and how much money he would pay between then and the end of the term. “Am I really going to make that much money?” he asked. Then he laughed it off.

He will. So will I. So will everyone. Most people living in the United States will make a lot more than a million dollars between their first job and retirement. The question is whether Nike and General Motors and Phillip Morris and Coca-Cola get to keep most of it, or whether the wage-earner gets to keep most of it.

I really don’t like the tone of this rant–and it basically is a rant–because it sounds like someone who made it looking back. I’ve only started the journey myself. I started 14 months ago. But my wife and I already have something to show for it. We have no credit card debt, we own two 2002 Honda Civics outright, and if we can keep up our current pace, we will own our house outright in a little over three years. Five years is probably more realistic.

Remember, around 12 months ago there wasn’t enough money to pay the bills. So if I can do it, lots of people can.

12 thoughts on “How to make more money, but more importantly, keep more of what you earn

  • January 23, 2006 at 8:44 am
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    Hi Dave,

    Excellent advice. While older than you and your wife, my wife and I are in a very similar situation. We recently managed to get our bills down to just the home mortgage (and it will be a struggle to keep it there in the short term since my 15 year old daughter needs braces quicker than we can come up with the entire amount of money!)

    But, as you said, selling things and learning the true value of things is extremely important. Through a lot of hard work I have managed to earn eBay power seller status while maintaining100% positive feedback rate (at well over 1,000 and counting). Getting out of debt and staying out is hard work. Living is hard work. Staying focused is hard work. All of that is true but it is worth it! eBay helps in this regard quite a bit.

    I managed to sell a “rare” variant Elvis CD for over $400 on eBay about three years ago, a CD I bought when CDs were first coming out and that I had assumed was worth abut $5 retail until I ran across one going for a lot on eBay.

    For my “part time” way to make money, I primarily sell comic books and related items on eBay (since 1982, actually). Staying with something, building up a base of customers (and trust) will take anyone far in life, whether it is selling stuff or in other areas.

    I am reading a classic book with a title that turns most people off (including myself). I have had this book for 30 years without reading it because of this but started reading it the other day and can now barely put it down. This book is a wealth of information and if you read it the way it is intended, you will learn more about yourself and how you interact with the world and how the world perceives you that you might care to learn!

    The book is written in a very conversational and clear style, if slightly different style since the writing is 80 years old or so. If you liked any of M. Scott Peck’s books such as “The Road Less Traveled” you will enjoy this book which covers many of the same things. It may be one of the earliest psychology related self improvement self help books. It is by Dale Carnegie and is called “How to Win Friends and Influence People” and is not, as the title implies, about manipulating people but improving oneself and one’s interactions with the world. The title is a natural consequence to those who follow the advice in the book, improve themselves and become more of an asset to the community at large.

    Well, I’ve gone on long enough and diverged from the start, but all of this related to the same theme: knowing oneself, what one needs and being aware of oneself in the all to commercial world we live in.

    Excelsior,

    Bruce

    • January 26, 2006 at 6:04 pm
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      Carnegie wrote a number of books, and two of them are on my reading list–Win/Influence, and "How To Stop Worrying and Start Living." I believe he is someone that everyone must read at some point in their life.

  • January 23, 2006 at 2:15 pm
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    Isn’t there something more important in life than two cars and a house?

    "If all Christians acted like Christ, the whole world would be Christian."
    Ghandi

    • January 24, 2006 at 7:36 am
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      Absolutely. The funny thing about the Dale Carnegie book I mentioned is that, if you follow his advice, you will be living in a very Christian manner. So, in that sense, Dale is saying nothing new but he is saying it from a secular perspective that many will find more approachable simply because of a lack of religious over tones.

      Don’t misunderstand me, I am not saying that this is good but simply that, in our culture, large segments of people are "not (currently) available" to hear the word. I suspect that, of these types, those who take Dale’s advice to heart will, perhaps despite themselves, be more receptive to the word over time…

    • January 26, 2006 at 6:00 pm
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      Yes there is. But owning your cars outright at my age is very unusual, and when I tell people when I expect to have the house paid off, usually they look at me like I’m from another planet.

      If this weren’t such a radical idea, this generation would be in a lot better shape. So would this country.

      • January 26, 2006 at 10:26 pm
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        "Bill Gates’ house is one of the most expensive houses in the world, and is a modern 21st century earth-sheltered home in the side of a hill overlooking Lake Washington in Medina, Washington. According to King County public records, as of 2002, the total assessed value of the property (land and house) is $113 million, and the annual property tax is just over $1 million."
        http://en.wikipedia.org/wiki/Bill_Gates

        Work on the mansion in heaven. The one on earth can get termites.

        • February 9, 2006 at 8:17 pm
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          Joseph, I fail to see what’s unbiblical about paying your debts and banking the savings. I’m not saying buy a McMansion. I’m saying pay your debts. So many people go looking for a financial blessing from God, not realizing they’ve already got one.

          Actually, I think consuming less, if anything, helps your faith. Shopping at thrift stores and eating peanut butter sandwiches for lunch–treating a trip to Arby’s to split a 5-for-$5.95 with my wife as a luxury–made me appreciate what I have and rid me of the sense that walking into a thrift store is slumming. I needed that dose of humility.

          I’m just trying to help people. If you don’t like it, it’s not like I’m forcing you to read it. Obviously you don’t need my help. I’m happy for you. But judging from the page reads, it looks like there are some people who might.

  • January 26, 2006 at 12:09 am
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    On a somewhat refreshing note, your ‘real world’ math example is essentially what Daniel and I have been going over this week in his Algebra homework.

    He groaned when I gave this one to him…

    …and yes, he did set it up correctly! (Yeah, dad!).

    • January 26, 2006 at 6:08 pm
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      Yay Dad is right. If he remembers how to do that and does it every time he buys something, he’ll be the richest guy on his block.

  • January 31, 2006 at 12:56 am
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    One can now have a Fit and save money. Do your Civic duty and go small.

  • February 8, 2006 at 10:19 pm
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    Have you seen Dave Ramsey’s Financial Peace classes? He has basically the same message as your experience, plus practical, hands-on tools for working elements of your financial plan. Live within your means, resist sales pitches, eliminate debt, organize savings and investments. A leader in our church picked up on his stuff and started classes as one project in our congregation’s small group ministry. His tools work well, and a couple families are really enthusiastic about sharing how much better off they are now.

    Peace,
    Karl

    • February 9, 2006 at 8:06 pm
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      I’m familiar with Dave Ramsey, having seen some interviews and glanced over his book Financial Peace. It’s good advice.

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