We have been discussing the three principles of financial achievement – managing, multiplying and maintaining your money. Last week, we outlined the four cornerstones of managing your money, explaining how to make smart decisions with the money you currently earn.

Many people hope that their working income will give them all they need to make ends meet and achieve their goals. The reality is that for most people, the regular job will never supply enough money to enable them to become financially successful. Today, we will look at the steps you can take to earn more money.

Create Extra Income

As we confirmed last week, proper budgeting is vital to all financial decisions. Once you fill out your budget accurately (you can download one at www.financiallysmartonline.com), it will show if you’re spending too much money or not making enough money.

If you’ve cut back on non-essentials and still can’t find enough to pay your basic expenses, then earning more is your only option.

The first step is to break down your monthly deficit into a smaller amount that seems easier to achieve. For example, if your shortfall is $15,000 JMD monthly, ask yourself “What can I do to make an extra $3,750JMD per week, or $500JMD per day?” Dissect it even further – how can you make $50JMD profit from ten people daily?

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An obvious, but underutilized way of finding more money is to try to earn additional income on the job. Why not check with your human resources department to see how you can upgrade your skills to get a salary increase, or if you can work overtime on a project? If that isn’t possible, try to obtain a second job or consider finding a better-paying job.

In the current recessionary times these options might be limited, so you may be forced to do it yourself. There are basically three ways to create your own income: find a need and fill it; find a problem and solve it; and find your talent and market it. Look around your community, workplace, school or church to identify pressing problems or unmet needs – which you can satisfy by using your creativity and talents.

Put Your Money To Work

Once you have identified ways to earn enough for your everyday needs, you need to kick-start the wealth-creation process by learning how to make your money work for you. Investing is when you put your money into an activity to make a profit. You expect that your investment will increase in value in the future, to be sold at a higher price and/or provide an income. Investing also helps to protect the value of your money over time.

Many years ago I read Robert Kiyosaki’s best-selling book Rich Dad, Poor Dad, which opened my eyes to the importance of becoming a good investor. Kiyosaki explained that if you wanted financial independence, you had to be very knowledgeable about investing options. There are several ways to invest: the money market, bonds, stocks, real estate and business, among others.

In Jamaica, you can start an investment account with just J$1,000. It’s best to go to a licensed investment advisor to learn more about making your money grow; fortunately, many companies offer this service for free.

Start Your Own Business

Many people dream about financial freedom through their own business, but few realise that there are many principles that guide successful entrepreneurship. Ignore these rules and your business can lead to financial ruin instead.

Some key considerations include:

. Does your business idea make use of your talent or involve doing something you love?

. Is your product or service in demand?

. How will you let people know your product or service exists?

. What kind of competition will you face?

. Do you have money to pay the expenses until your business becomes profitable?

Being successful in business requires you to be properly equipped. You will need a business plan to guide you, and sources of affordable financing to supply essential cash flow. Seek expert advice from agencies such as the Jamaica Trade and Invest (formerly JAMPRO), the Small Business Development Agency, or the Jamaica Business Development Centre.

Earn Passive Income

If you really want to be wealthy, you have to find ways to consistently earn more. Unfortunately, there is a limitation on how much work you can do, as there are only 24 hours in a day. The answer is to create passive income, which is money that you get without physically working for it. Think of designing a machine that will continue to supply cash in the future.

You have to work very hard at first to create a passive income stream. Some opportunities include: royalties from music or book sales, network marketing, coin-operated machines, franchising your business idea, and Internet sales.

Next, we will look at ways of maintaining the money you have earned, throughout your life and beyond.