According to him, there are two key models for making money. These are competence/skills and Hustle/flow. On the other hand, the two models for growing money are frugality/saving and investment/equity.
Professor Oyedeji identified all the approaches to making and growing money. We have compiled his thoughts for your reading pleasure. Below are his words.
THREAD: Making vs. Growing Money.
— Dr. Tayo Oyedeji (@tayooye) July 18, 2019
“Making vs. Growing Money
There are two key models for making money.
- Competence & skills
- Hustle & flow
And two key models for growing it.
- Frugality & Saving
- Investment & Equity
Both models are different. People get in trouble when they try to make money from a money-growing model.
1b. Making it: Competence & skills
Complex skills are more marketable and expensive than mundane skills. For instance, I once charged a fee of $10,000 for less than a full day of work for business operations consulting for a big firm – Ops Mgt is a relatively rare skill.
1c. Making it: Competence & skills
Do a quick audit of your skill-sets. Can they earn you a good income? If not, what additional skill-set do you need to build to earn a premium? Most people are lazy. They will not invest the time to build new skills. Be different!
1d. Making it: Competence & skills
In today’s world, technical skills are more expensive than non-technical ones. My AI mentor was a music composer who went from $25,000 a year to $150,000 in 12 months. He still plays music but is now a data scientist at @EpicSoftHosp.
2a. Making it: Hustle & flow
Many people are not wired for technical competence. They, however, have natural business skills that can help maximize their income. Others have both. They can hold down a regular job while hustling on the side.
2b. Making it: Hustle & flow
I have always done both. I sell competence during the day and hustle at night. Most employers will not pay you more than you need to live a decent life. To make more money, you will need to build a side gig that will multiply your income.
3a. Growing it: Frugality & saving
If you make $1m and spend $1m, the money just passed through you. You are not wealthy. You’re just a money conduit. On the flip side, if you make $2,000 a month and keep $500, you just grew your net worth by $6000 a year.
3b. Growing it: Frugality & saving
The first way to grow money is by living below your means so that you can save some.
1. Don’t buy crap you don’t need.
2. Sell anything you haven’t used in a year.
3. Don’t impress people with things, impress them with your investments.
4b. Growing it: Investment & equity
This erroneous notion is why people fixate on dubious/questionable ways to make money – FX trading, gambling, ponzi schemes, etc. The promise is that you can make a lot of money with a little amount of investment.
4c. Growing it: Investment & equity
The models for making money are skills & competence (employment) / hustle & flow (business). Frugality grows your savings and investments accelerate the growth. Learn to create value & make money first. You can only grow what you have made.
4d/ Growing it: Investment & equity.
If you try to make money with a money-growing model, you will chase risky propositions and lose money. The way to make money is by creating value with your skills or business. Then you save some, and grow it with investments. Here’s the formula again.
Make it with #makemoney:
1. Competence & skills
2. Hustle & flow
Grow it with #growmoney:
1. Frugality & Saving
2. Investment & Equity
Don’t try to switch the two models.”