I hear this question more times than others, “I would invest, but I don’t have the money.”

My response is simple, “Start a business and have it invest for you.”

Your Own Business
I’m not saying quit your job, buy into a MLM, or any such thing. Your own business can begin so easily as your hobby. What do you like to do in your spare time? What are you passionate about? The reason for starting a business can be something simple like wanting to make some extra money, but what you do in your business had better be something you like to do. Starting and running a business is tough! If you don’t like what you’re doing, it will be too easy to quit. That’s why I suggest starting with your hobbies; you’re already doing them in your spare time, it’s nothing to just add to it and make it a business.

Example:

Dave S. loves to exercise and lift weights. He has entered and won several weight-lifting competitions locally and has even gone overseas to enter international competitions, such as the Good-Will Games. He took some classes, got with an attorney to see what he needed to worry about from a liability stand point, bought some insurance against injury, and set-up his own personal trainer business. He’s doing what he loves in his spare time and kept his day job. He has plans to invest his income from his training into a website where he can have clients from all over the world and advise them over the Internet, and a long term goal of starting his own gym.

What I Did
As a personal example, I got my 1st iPod off of eBay and LOVED it! So does my wife, so we’re constantly fighting over who’s using it and what’s loaded on it. Realizing that I would be on the losing end of this (love ya hon), I went back to eBay and started shopping for another iPod. There were so many for sale, and I’m not kidding, they were all being sold! My eBay sales business began, with my niche being iPods. I would buy them as I could find them (locally on sale, thru an Internet retailer, Apple selling refurbished iPods, etc) and would mark them up as sell for profit. I was making a decent amount of money for what little time I put into it, but I gave it up. There were other things I wanted to spend my time on rather than bargain hunting iPods.

Once your newly formed part-time small business starts making a profit, then you will have the same problem that all CEO’s have: use the money to spend (dividends to shareholders), pay off debt, or use the money to expand the business to make even more profit. Its called capital allocation and it will determine not only how you see your business, but its future as well. At this point, the business is like any other investment, spend the income (not wise) or reinvest to help the income grow.

If you enjoyed this post, make sure you subscribe to my RSS feed!

Related Posts