Matthew Eisman / Stringer / Getty Images
There are smart ways to try and make more money — and there are not-so-smart ways.
Thanks to my five-year study of rich people (those with an annual income of $160,000 or more and a liquid net worth of $3.2 million-plus), I was able to uncover some of the best ways to make extra money.
Here are six of the best pieces of advice I found:
Can your hobby make you money?
1. Pursue something you’re passionate about as a side business.
Build a side business doing something that you love and that provides value to others and society. The self-made millionaires in my study who loved what they did for a living accumulated an average wealth of $7.4 million over just 12 years.
When you do something you love, you will devote all of your available time to it.
The Wright brothers ran a bicycle business full time, and on the side they conducted their famous experiments that eventually led to the invention of airplane. Over the course of five years, the two brothers often worked eight hours at their bike shop business and another eight hours on their passion, the airplane.
When you do what you love, you are somehow able to find the energy and the time to devote to your passion.
Nothing ventured, nothing gained.
2. Take calculated risks with your savings.
Success requires risk.
You have to risk some time and money in order to build wealth of any kind. I’m not talking about gambling, here. I’m talking about an entirely different type of risk called calculated risk.
This risk requires that you gain some experience and working knowledge in an area, and then put that knowledge to work by taking action (as opposed to diving blindly into an area in which you lack any expertise). It might be real estate, investing in a private business, starting your own business, or pursuing another somewhat-risky opportunity.
Stand out from the crowd.
3. Develop a niche in your career or business.
Those in my study who had a unique expertise in a particular area were paid the most by their company or were able to charge more to customers or clients than their competition. You can develop your niche on the side, in the mornings, at night, or over the weekend through self-study or by taking classes at night.
Most of the millionaires in my study read 30 minutes or more every day for learning, and many others went to night school to develop skills and gain knowledge that would eventually help them accumulate enormous wealth. While this takes time and effort, it is an investment in yourself that will forever pay dividends down the road.
It's hard to succeed on your own.
4. Organize a partnership with others.
Many of the self-made millionaires in my study organized joint ventures with other individuals. Organizing a team of like-minded, success-focused individuals makes it much easier to achieve success in life and build wealth.
Many hands make light work, plus you have multiple brains to tap for ideas and solutions to problems.
Andrew Carnegie, at one time the world’s wealthiest man, in the beginning of his working career organized joint ventures with others in the steel, railroad, and coal industry in order to leverage what little money he had at the time. His partnerships created many millionaires and resulted in the mammoth company famously known as US Steel.
Offer your skills part-time to someone you admire.
5. Work part-time as an apprentice.
Everyone is no doubt familiar with Donald Trump’s show "The Apprentice." The winners get a chance to work with and learn from the Donald.
If you lack skills in an industry you think you’d like to work in, seek out a successful person in that industry and offer your services as an apprentice or intern. This has a triple benefit:
1. It enables you to learn from a mentor.
2. You can make some extra money.
3. It gives you an opportunity to test the waters and see if you actually like the work. If you don’t, you can always quit and move on to something else.
It's never too late to give something new a chance.
6. Change careers.
One of the common threads I uncovered in my study was that self-made millionaires put their own ladder on their own wall.
Most people don’t do this. They pursue some career or profession that a parent, teacher or other influence in their life advised them to pursue. As a result, they are not pursuing their own dreams or own goals, but instead the dreams and goals of someone else.
As I mentioned previously, the self-made millionaires who pursued what they loved were able to accumulate an enormous amount of wealth in a relatively short period of time. Changing careers may require you to go back to school at night, but you can do this while you’re still working. Once you get your degree or certification, you can then leave your current job or business for a new one that offers increased opportunities and potentially more money.
It's up to you to make a change.
Making more money means doing something different than you are doing right now. It means working more or taking more risk or investing more time in yourself through either self-education or formal education.
But it can be done.
Many of the millionaires in my study were in the same boat as you at one time. The difference is that they took action to change their lives. Building wealth and becoming a success requires action.
If you do nothing, in 10 years you will be 10 years older and probably still where you are right now. Wealth does not happen on its own. You have to make wealth happen
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