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Sunday, June 25, 2023

Overlooked Ways to Earning Money

17 Wealthy People Revealed How They Actually Got Rich

By Liz Richardson

A while back, redditor u/LunarProximity asked, "To those who became wealthy, what are the most overlooked ways to earning money that people should look at?" People who got rich revealed their best secrets and business advice that helped them earn money, and wow, prepare to learn a TON.

And, of course, people are all at different stages in their lives, and not all of this advice will be applicable to every single person. So, feel free to take the tips that work for you and leave the rest. Here's what they had to say:

1. "When you’re making money, pretend like you’re not. I’ve possessed this mindset since 2020 and am the most financially secure I’ve ever been. Spend less than you earn — it can be so much simpler than people make it out to be. Creating a budget spreadsheet of your weekly/monthly expenses can be super helpful, too."


2. "Utilizing a high-yield savings account, and setting up monthly transfers (no matter how small!) to automatically pull into savings or investing. If it’s already gone, I don’t miss it, but if it’s there, I often spend it!"


3. "Network and ask questions no matter what. Whenever you don’t know something you need or want to know, ask someone to figure it out. It’s not embarrassing, and even if it is, knowledge is power — but a lack of knowledge is an obstacle. For instance, I could never seem to get local grant money or anything from the government for startups. I just randomly asked a guy through Facebook Messenger who I knew had received some. He turned out to be very helpful and basically walked me through it."

"He gave me people to talk to that I would have never found on my own because a lot of this stuff isn’t advertised; it’s just done 'in the know' amongst local businesses. I could have avoided looking like a noob at raising money and never got a dime from the government, but instead, I just asked a question, and it turned into money. This applies to other things, too: Overhear a guy at a Walmart complaining about a fence painting? Ask if they’ll let you paint it. Stuff like that — just a single question can turn into money."


4. "Don't get stuck with analysis paralysis; it's real. Focus on the small steps that push your business forward. For example, don't worry about how you will be able to ship 1,000 items a day when you're selling 0 items a day."


5. "To me, this is the most overlooked way to earn money and become wealthy: 'Compound interest is the eighth wonder of the world. He who understands it, earns it; he who doesn't, pays it.' It isn't fast. It isn't sexy; it takes many, many years before you really see the fruits of your labors, but if you can figure out how to stay away from consumer debt, especially on things that depreciate in value, while maximizing investments in things that bring value, you can become 'wealthy' even with a fairly modest income."

"If you start investing consistently and modestly at age 20, you will have a significant amount of money at age 45, and millions by the time you hit your 60s. If you start at age 45, you can enjoy life, and still have a nice nest egg at age 65."


6. "A lot of people simply MATCH what their employer puts into their 401k. They only contribute up to that amount. That’s a huge mistake. If you are able, you should max out your 401k every year with pre-tax funds. This lowers your tax liability to the government. You’ll pay taxes later in your golden years when you pull your money out, but you should be in a much lower tax bracket."

"The way I looked at it every payday: 'I don’t get to keep this money either way. Now, do I want to pay it to MYSELF (401k) or pay it to the government (in year-end taxes?' I chose door number one for over 20 years."


7. "If you start your own business, the best thing you can do is be a great boss. Not an okay boss, not a good boss — be a great boss. My family has a small business; we work on pools. We do everything except build them. My dad is my boss, and he’s the best boss I’ve ever had. He actually listens to his employees and takes their recommendations on how to finish jobs as gospel. The average starting wage for a basic pool cleaner in our area is $12. My dad starts off at $19 with no prior experience."

"He gives out raises twice a year by the dollar or dollars, not pennies and quarters. He gives paid days off, gives $3k–5k bonuses around Christmas, and tries to work around their schedule since most of his employees have families. The employee turnover rate in the pool business is extremely high; I think every two to three years in my area the last I checked. He has two employees who have been with us since before I was born, and I’m 24. He listens to them and drops customers we don’t like without question.

Last year, he hired a new guy with some experience and sent him out to clean up a few pools after a storm. Later that day, a customer who my dad has had since he started the business, over 30 years ago, called and said they don’t want a Black man in their yard. My dad immediately said 'f*** you' in the most professional way you can and hung up. (I know this situation is more about being a decent person and not a great boss, but I still love this story.)

He’s training me to take over in a few years and constantly tells me to not only be worried about feeding one family (ours), but I have to be worried about feeding nine families (we have eight employees). To me, being a great boss is one of the best ways to run a successful business and become wealthy."


8. "Stop spending money. Most people are actually pretty good at offense (making money). It's their defense (keeping the money) that sucks. Start a budget sheet. Track all your expenses into various categories, and track ALL of them. Yes, even that $1.50 candy bar. Track it all. This will tell you where your money is going."

"Reallocate your spending habits. Set 'caps' on your budgetary categories. Like, 'Only $200/month on entertainment' and stick to it. Pay yourself first. Put money into your investment accounts FIRST, then spend on luxuries. Do not save what is left after spending. Spend what is left after saving."


9. "Have a wealth strategy: The hardest path is having a job/career where you are just renting your time to someone else. These are most salaried corporate jobs and hourly pay jobs. To become wealthy doing this long-term, you need to rent yourself at a pretty high pay rate and live well below your means for a long, long time, saving and investing well."

"More realistically, your career needs to involve building equity in something. That could be starting your own business or could be getting equity in someone else’s business as part of your compensation. There’s no need for this to be anything innovative or sexy. Just something you are able and willing to put the effort into to be competitive and make happy customers. 

Another way of building equity is having a job with a generous defined retirement/pension program and taking full advantage of it. Cops and teachers, for example, while not considered to be particularly wealthy, often have good retirement programs that allow them to retire early (as early as age 50), and draw a pension equal or nearly equal to their salaries when they were working. Private pensions can be risky because they can be gutted as part of a corporate bankruptcy restructuring. But, depending on your wealth goals (i.e.: you want to retire early and live comfortably vs. always want to fly first class), some state and federal defined pension programs are good ways to go."


10. "I got a summer painting job at 16. Realized I was good at it and enjoyed the work. Stuck with the same company for long enough that I could honestly consider myself an expert. Started my own painting business and failed because I had no idea how to run a business. Went back to work with the original company and studied business on my own. Formulated a plan. Saved up $10k to start with and dove in again."

"I grew that into one of the most popular painting businesses in my area. We then expanded into drywall, finish carpentry, and specialized finishes. We are now planning an expansion into the cleaning industry as well. What started out as a summer job has turned into a career that allows me to live a fun life and set my own schedule. My best advice is learn something about business. Find a field you’re confident in. Start a business in that field. Be financially responsible but take calculated risks to grow, and don’t allow the fear of failure to hold you back."


11. "Cut out the waste. It’s not how much money you make; it’s how much you keep. Too many people start making good money and start to show off: fancy clothes, fancy cars, expensive houses. All their money is going to interest and waste. The wealthiest people I know don’t flaunt it."

"They’re some of the cheapest people I know because they didn’t get rich by wasting money. You couldn’t tell it by looking at them, because their money is in the bank, not on display."


12. "Overlooked ways to make money? I think most people overlook ways to make money by limiting beliefs. 'I need money to make money,' 'I need a programmer to develop this idea,' 'I need an investor,' 'I’m not smart enough,' 'I’m not qualified,' etc. I’m a high school dropout, and I knew I wanted to be rich since I was 11. Took me 'til 26 years old to make my first million. I wrote 100 ideas for making money. Then, picked the 10 best ideas."

"My criteria were: ideas I believe can make over $1M/year; ideas I can execute on my own, or learn the skills needed to do so; ideas that require no money (or are affordable without risking food or rent); ideas that can be done in the amount of time I had (had a day job most of the time). Out of the 10 ideas, eight ended up not fitting the criteria in real life, and two failed. Wrote another 100 ideas, and picked 10 — they were better than the last 10, but they still mostly failed. Repeat. I ended up starting about 80 projects (ideas picked out of long lists) until I found one that I was able to pull off. I counted once; I think it was 83 ideas that failed (due to being bad ideas, me messing up execution, or bad luck). Perseverance is key. Might even be the only trait that is actually a must."


13. "I've never considered myself wealthy, but I did buy my first home before I was 30, so I guess that makes me wealthy. I think seeing real demand is something that is often overlooked. A lot of times, (especially young) people are trying to get rich in ways they see other people getting rich. They're learning coding to make the next killer app. They're starting up YouTube/Twitch channels to try and build an audience. People who get wealthy (other than generational wealth and executives of larger corporations) see a demand that needs to be filled and fill it."

"Simple thing: My wife's great-grandfather found out that there was a demand in the oilfield for wood shavings, and they were paying a fairly sizable sum for it. He went to every single wood mill sweeping wood chips and shavings off the floor and then putting them into boxes. The wood mills were happy to get rid of their garbage for free, and he was happy to sell this stuff for an absurd price. Once the wood mills realized that there was money to be made on shavings, they gave him an exclusive contract, and now, all he had to do was come pick them up. Before long, he had pickup and delivery men and a small shipping fleet. He sold his company, retired, bought a plane, and then died. Even today, his surviving family members are still incredibly wealthy."


14. "Cutting cost (cheaper services or products) and avoid paying interests. I have earned about the same amount my entire working life except up until about 2019 when my bi-monthly income exploded by a third more, or about an extra paycheck. I consider myself not wealthy as in spending like there's no tomorrow, but I am 30 years ahead of my peers when it comes to money. House is paid off, golden investment property is being paid off, extra rental income, and cars have been paid off for the last seven years. My wife makes enough money to be happy. The only debt is under $6k. I have $15k in savings in the bank, pension set to help me retire at 54, deferred comp set to make me comfortable, and two checks a month that don't go into any bills ($3k). My trick has always been avoiding paying more than I had to."

"I remember the moment my strategy flicked on a lightbulb. All I did was after five years change cellphone providers. I was paying $250–400 for my cellphone, me and my wife's bill. It was frustrating as it was 24–40% of one of my checks. Then, car insurance was another $250. Then credit card debt — that's what killed me. Paying $100 a month in credit card debt for a year and still only paying off, like, 40% of the actual debt. When I did the math, I tore up that credit card and paid it off ASAP. Then, I NEVER again took on credit with an interest rate. Any time I've had to borrow, it's always on 0% for one year, and I limit what I borrow so I can pay it off in that year. My car is the exception, but I got lucky on a 2.9% interest rate."


15. "One thing I have found in my business is how often folks hire others to do things that could possibly be learned with a bit of time and effort (i.e. paying for a web designer vs. learning how to maximize an existing template). Like, learning about SEO and Google business analytics to make your business more easily visible in searches. Or, creating your own system for scheduling vs. paying a ton for a scheduling platform."

"It takes time and effort. It's really easy to outsource aspects of your business, when, in fact, you can save a ton by trying to learn as many aspects of business infrastructure as possible. And in case the math isn't obvious. Fewer expenses = more money."


16. "All you gotta do is save for a few years. Then, you do whatever makes you happy for a business. It takes just a few years of living broke while making money. It's a grind, but years down the road, it will feel like it went by fast."


And finally...

17. "My great uncle was a pretty wealthy individual. His advice? 'When it comes to finances and making money, I only listen to those who have more of it than me.'"


Note: Some responses have been edited for length and/or clarity.

"If your actions inspire others to dream more, learn more, do more and become more, you are a leader." - John Quincy Adams