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Tuesday, September 27, 2022

How to Buy Things That Make You Money

It’s easy to forget that you can buy things that actually make you money.

Image Credit: iStock

There’s an old saying that still holds true: You have to spend money to make money.

The first time you experience having extra money left over after paying bills is a great feeling. You’re financially secure! You can buy a new PlayStation, or make a down payment on a vehicle. You can go to a show or maybe out to a really nice dinner, perhaps even treat your friends.

The problem with the first two examples is you’re buying depreciating assets; regarding the last two, the enjoyment you get won’t last longer than the meal or the show. You’ve spent money that isn’t coming back.

There’s nothing wrong with spending money on entertainment, of course, or on stuff we want. We all do it, and virtually every day. But this is not the only way to spend money.

It’s easy to forget that you can buy things that actually make you money. There’s a surprising number of ways to do it, and it’s easier than you might think.

It can be as simple as buying an asset that has historically held or increased in value over time, like guns, gold, or artwork. Or it could be as complex as buying an entire business. You can even take things you have lying around and find ways to have them make you money instead of doing nothing, like a sewing machine for example.

Here are some things you can spend your money on that likely will generate a return on your investment.

1. Vending Machines

Vending machines aren’t cheap. Buying a new one can run anywhere from $3,000 to $7,000. But you can generally find good deals for them online, often for as little as $1,200. The hardest part will be finding a good place to put it. You will have to share some of your profits with the owner of the property you place it at. And of course you have to pay to keep it restocked and maintained. It’s also important to think about what the people who are at that location might need. Set your profit margins at a comfortable rate, and choose a location with good foot traffic. There are hundreds of tutorials online for how to get started. YouTube is your friend (although these days I prefer Rumble). You can generally get a vending machine business up and running for approximately $2,000. Use your profits to buy more vending machines, and build your empire!

2. 3D Printers

This coupon can get you an awesome 3D printer for only $100. I have used it to buy eight of them. Sure, there’s a learning curve, and the filament (plastic) that is used to make items costs about $20 each; but you can make lots of products for just one of those filament rolls. Whatever you make, and you can make a lot, you can sell online or in person. The cost of making one item varies, but typically it may cost as much as $2 in materials and electricity to make an item. Depending on what it is, you can sell it for $15 or more. That’s an incredible profit margin. You just have to be willing to learn the software and hardware. It took me less than a year to get good at it. I’ve spent maybe $1,500 to $2,000 on supplies and filament. I’ve earned 5 times that easily. Because of the technical hurdles, this market isn’t saturated yet because most people won’t take the time to learn how to use a printer, they just want the item you manufacture. Many of the things you print are available for free at Thingiverse.com, just make sure the item says that it’s available for commercial use, otherwise you need permission.

3. Start an Online Store

Print-on-demand used to be expensive, time consuming, and difficult to make money on. Now the opposite is true. It’s never been easier, faster, and cheaper to make your own product designs and ship them to customers. My secret weapon is Printify. The service doesn’t cost much, but the quality of items is fantastic. You can upload your design and list your item quickly. Set your profit margins by the percentage you want to make. I recommend getting a business credit card with a cash back program and using it for all your purchases. Then you get money back on money you were going to have to spend anyway.

4. Buy Dividend Bearing Stocks

I’m not a financial advisor and it wouldn’t hurt to talk to a professional before engaging in any investment strategy. That said, I like dividend bearing stocks. I prefer ETFs (exchange-traded funds), since these are a basket of different industry leaders and tend to be a bit safer than a direct stock. But many stocks that bear dividends can become a source of income once you’ve invested enough. And why not use your vending machine or 3D printer profits for that? But even if your stock or ETF doesn’t pay dividends, the market offers considerable upside, bearing a 7 percent after-inflation return annually, on average (though not in 2022). The key to being a good investor is to tie in the perceived value of a company, which is the stock price, with the actual valuable goods or services a company offers. If a company is offering solid, real-world value, a product people love and can use, or a service that others can’t compete with, then it might make a good investment.

It’s All About  Mindset

That should be enough to help you at least think about different ways you can spend your money to make money. And it’s probably not as hard as you think.

The truth is entrepreneurship really is for everybody. All it takes to do it effectively is a passion for value creation, imagination, initiative, the ability to cope with uncertainty and risk, a little bit of capital, and—above all else—the ability to identify and serve the needs of others.

That might sound like a tall order, but once you’ve acquired the right mindset, you’ll be amazed by all the opportunities you’ll see around. And the best part is, once you do, you won’t just be making some extra cash for yourself, you’ll be improving the lives of everyone around you because entrepreneurship is the engine of a thriving society.

“A society without entrepreneurs is a society of stagnation and decline, of monotony and impoverishment, of bureaucrats and paperwork,” FEE’s Lawrence Reed once observed. “Because entrepreneurs are consummate change agents.”

So the next time you have some extra cash left over from your paycheck, consider spending your money on something that will actually make you money. It could be the first step you take into a whole new world.