| Real Life Strategies for Building Wealth
Why I Fell in Love with Dividend Growth Investing and You Should Too

Why I Fell in Love with Dividend Growth Investing and You Should Too

Editor’s note: Tonight I give you an article on dividend growth investing. Dividend growth investing is the kind of investing I’m yet to learn more about and experiment with. This is why, this post is written by Lewys Thomas who by day is studying for his university degree and by night blogs about dividend investing on his blog FrugalStudent.co.uk. Hope you find this blog post helpful.

Interest rates are rock bottom – The Bank of England cut them another 0.25% because of the uncertainty around Brexit. Banks are slashing the interest rates they are paying customers with the popular Club Lloyds account and Santander 123 account reducing the interest they pay.

Today you have a few choices:

  • Leave your money in your account and watch it get eroded by inflation; or
  • Give peer-to-peer lending a try.

With peer to peer lending you could get anything between 2.8 – 7% a year in interest on your money. My problem with peer-to-peer lending was that I was investing in smaller, very risky companies. Sure, RateSetter and Zopa offer fixed rates backed up by solid ‘safeguard funds’ that protect you from bad debts but locking up for 4.2% for 5 years or earning just 2.8%-3.9% for 1years didn’t really appeal to me.

I’m not knocking Peer to Peer lending – it is a good way for people to make a modest return on their money. If you’re interested you can explore the main options below. Just remember that peer-to-peer lending isn’t covered by the FSCS and there’s no ISA option at the time of writing.

dividend growth investing

Right, since peer-to-peer lending didn’t appeal to me, so what did I do with my cash?

There’s another option that is less well known and needs a higher level of knowledge and understanding; it can also bring decent return.

I present to you

Dividend growth investing

Now, many people share a certain perception of the stock market. They imagine a floor full of screaming traders and the possibility of huge gains and even larger losses. This is the world of complex charts and big earners, right?

Guess what? This is not how it works, really. There are no longer over-excited traders, not that we can see anyway. In fact, today investing in the stock market is relatively silent and solitary activity: it is between you and the internet platform you use to buy and sell shares.

Buying shares, and making profit from it, is always about buying a small part of a very high quality company. There are two main ways to make profit known as value investing and dividend growth investing. In the former case you make money only from the increase in the value of the company, in the latter you make money also through the share of the profit that this company awards its shareholders, or dividend.

These payments, or dividends, are the seeds of dividend growth investing.

Now some of you may be asking ‘What’s a dividend?’

Simply put a dividend is a company’s way of rewarding you for owning their shares.

For example, I own shares in McDonald’s. For every share, I own they pay me close to £4 (depending on currency exchange) dividend. So owning 10 shares would pay a yearly dividend of around £40.

How do you know what to expect? You can check the percent of ‘interest’ a company pays by taking a look at its Dividend Yield. For example, investing £100 (less fees) into a stock that has a 3% dividend yield, means you’ll receive £3 a year in dividends.

The formula for dividend yield is:

Dividend per share/Price per share

Let’s take a look at a real life example!

By going over to Hargreaves Lansdown’s website and searching for ‘Lloyds Banking Group’ in the top right search bar we get the information below:

dividend growth investingHighlighted in red here is Lloyds Banking Group’s dividend yield. A 3.45% yield means that £100 invested in Lloyds would pay you £3.45 yearly.

Not that complicated right?

Ok, so now that we understand what dividends are we need to go a step further to understand what dividend growth investing is.

Quite simply, dividend growth investing is investing in dividend paying stocks for a return. I’m a Dividend Growth Investor which means that I buy dividend paying stock in companies that have very long history of increasing their dividend payments. This tells me that pay-out is relatively reliable. Not only that, but as these companies consistently raise their dividend I can expect that my pay-out will rise too!

Look, for example, at Johnson and Johnson’s dividend history.

dividend growth investing

We can see clearly that Johnson and Johnson has increased its dividend payment, for the last 22 years; were we to take this further back in history, we’ll see that Johnson and Johnson has in fact grown its dividend for the past 54 years! Imagine the power of those increases and what will happen if you reinvest the dividend over just 30 years.

Now, I know that Maria has written an excellent article on ‘the myth’ of compound interest but I do want to show the other side of the coin on this issue. Maria is right – compound interest is somewhat overrated. People usually get the maths wrong and overestimate their future returns.

Nevertheless, compound interest remains a powerful tool if time is on your side and you combine compound interest with yearly increases in this ‘interest’ through dividend increases. Here’s how compound interest works with dividend growth stocks.

dividend growth investing

It is also worth remembering that you can get up to £5,000 worth of dividends TAX FREE and that you can invest in dividend stocks through an ISA which means you are not going to pay tax on your dividends and on capital gains.

My investing style goes beyond dividend growth investing but I’m trying to keep things simple here. The important point is that my net-worth has gone from zero to over £13,000 invested in the market. I also have a steady, although still small, stream of dividend income.

Dividend growth investing isn’t going to make you rich overnight. It takes patience and perseverance. But a 3% return from dividend payments sounds a lot better than most bank accounts offer right now – and 3.3% the next year sounds even better. Re-invest your dividend payments for long enough and compound interest will start working its magic.

Have you fallen in love with dividend growth investing yet?

Investing for Beginners: Five Ways to Make Your Money Work for You

Investing for Beginners: Five Ways to Make Your Money Work for You

By popular demand, I’ve decided to publish a number of blog posts on investing for beginners. Yes, from anyone else this may be a tad patronising. Not me.

I think I could get this one right and offer some helpful investment lessons. Do you know why?

Because until about four years ago I was an investing virgin, so to speak. Yes, I had been paying into a pension but this didn’t really require even basic knowledge: It was a no brainer. My employer used to have one of the best and best run pension schemes in the country so joining was a sign of sanity rather than financial savvy. Yes, we do have a house that has increased in price nearly fivefold in 20 years but this wasn’t down to me either. John had already put an offer on the house when we got serious and the British government didn’t build enough housing.

You see, investment virgin, I tell you. Just like a very sizable proportion of the British population; particularly women. We women, you see, are good at paying off debt, frugality and saving but when it comes to investing we tend to chicken out; or leave it to our men folk who…Okay. I’m not even going to get there.

Four years ago investing wasn’t even in my vocabulary. This is what happens when you grow up in a country where you saved for specific reason and the only source of income was labour. Oh, and connection but this is a different matter.

Then four years ago I decided that investing is something I should learn and start doing. I started dabbling and opened an account with Nutmeg. I started reading and researching.

This is how I know about investing for beginners: I had to learn a lot to become a beginner. Last year, my overall return on investment was 22.6%. It may be beginners luck. I prefer to think that I have learned something; and Fortune smiled on me.

I learned quite a bit about investing and would like to help you start learning as well. Today, I’ll tell you about the five ways to make your money work for you. Knowing about these is, I believe, the corner stone of all investing for beginners.

These are:

  • Investing in financial instruments
  • Investing in luxury goods
  • Investing directly in business
  • Investing in starting a business
  • Investing in developing your competencies.

(I’m not including investing in property today. This is a specialised kind of investing that is very capital intensive and probably a stage after investing for beginners. If you still would like to check out property investing have a look at the House Crowd and what they do.)

#1. Investing for beginners: investing in financial instruments

Since this is for real beginners, I’m not going to make it more complicated than it has to be. You’ll have to remember, however, that investing in financial instruments is very diverse and complex affair; some would say that this is a minefield for the beginner.

For now, you need to be aware that these instruments include investing in: bonds (bonds are the way of governments (and others) to borrow money from us; options, futures etc. (sorry, not even going to go there – these are fairly speculative, you really need to know what you are doing and even then…); mutual funds (these are investment strategies that allow you to pull your funds together with other investors and purchase a basket of stocks, shares, bonds and other investment instruments); and Exchange Traded Funds (ETFs) (this are basket investment instruments).

One investment instrument possibility that is exceedingly popular (and underpins many of the more complex investment vehicles mentioned above) is investing in stocks and shares.

Trading stocks and shares in on any investing for beginners list while many people are not entirely clear about what this means. When you buy stocks and shares, in effect you buy a (small) part of a company. There are three main ways in which you make money from stocks and shares:

  • Speculation. This is when the price of a particular share is going up because many people are buying it. Conversely, the price goes down when many people are selling their shares. Buying and selling in this case is subject to rumour, misinterpretation of information, emotion etc. Speculative volatility doesn’t have much to do with the value of the company. A tweet by a celebrity can have a large albeit temporary effect.
  • Company value. This is when the price of the shares is directly linked to the increase or decrease of the value of the company.
  • Dividends. This is a sum of money paid by companies (usually once a year) to their shareholder from the company’s profits.

Why am I telling you this?

Because you can do very little about speculative fluctuation except not fall prey to them. Don’t agonise over how your shares are doing and don’t check them every fifteen minutes – this will be a monumental waste of time and opportunity.

The other two, have given rise to two very different types of investing: ‘value investing’ and ‘dividend investing’.

When doing the former you look for companies that are undervalued for some reason with the expectation that their value will increase. My Rule Breakers portfolio is an example of that: I’ve bought companies that are either fairly new or they have had a mishap that is being remedied. And yes, my portfolio is doing well.

Dividend investing is about buying stocks and shares in companies that pay generous dividends. I have a guest post for you on dividend investing that you could read tomorrow: I’m still learning about this one myself and have not experimented with it.

Last but not least, robo-investors ought to be mentioned here. I’ll be writing more about these as well. You know that I have been investing with Nutmeg rather seriously (and persistently) and now I’m starting an experiment with Scalable Capital.

#2. Investing for beginners: investing in luxury goods

This is about investing in things like art, wine, jewellery and vintage cars. In principle, investing in the ‘finer things in life’, particularly investing in wine, is fun. In practice, it needs a lot of specialised knowledge because every time you buy a piece of art you are betting that its value will increase. Only people who understand art have the eye.

You want my advice on this one? Stay out if you don’t have the eye for, and encyclopaedic knowledge about, a particular class of objects; thought this investing can surely spice up your portfolio.

#3. Investing for beginners: investing directly in businesses

This is the investing I’m really keen on and with, what I believe are, rather good reasons.

You see, risk is the bane of any investing and the biggest reason why people don’t do it. What is not very well understood by most every-day investors is that our perception of risk is correlated with our level of control. Simply put, this means that the less control we have over something, the higher risk we perceive it to be.

Don’t believe me? Let me ask you: would you be worried about nuclear war if you controlled the switch? No you wouldn’t.

It is the same with investing. We worry about losing our money on stock market because we have very little control over what is happening. Frankly, it many cases we have imperfect information as well never mind how hard we try to keep abreast.

When you invest in local businesses directly the risk-control seesaw swings.

You have more control and hence the risk is lower. This is why we bought 50% stake in a local MOT and car service garage.

Can you fail? Of course you can. At the same time, if you follow some fairly simple rules for selecting the businesses you invest in you have to be a real klutz to fail big time.

#4. Investing for beginners: start a business

This is usually the big, scary one that hides in the cupboard and every time it tries to come out you kick the door shut.

Yes, I get it. It is scary to start a business and branch out on your own. You’ll have complete control over how the business develops but the flip side to that is there is no one to blame for anything.

At the same time, investing in starting a business is one of the most satisfying and profitable investments you’ll ever make. Take my case, for instance. When I started dabbling in online publishing I forced myself to see it as a hobby; this way it was less pressure. Now my websites are a very neat side hustle; I have no doubt that were I to take the plunge and focus on these full time they will become a nice, proper online business. What started as a pleasurable way to spend 10-15 hours a week (writing and talking to you) may turn out to be my ticket to fulfilment and location independence.

To start a business you need ideas and the grit to realise them. Of these, coming up with ideas is the easy part. Here are, for example, 150 ideas on how to make money.

Acting on ideas is much harder. But it can be learned.

Starting a business, including an online business, is not all flowers. It is still so much worth it!

#5. Investing for beginners: invest in yourself

Finally, a way to make your money work for you is through you. What I mean is that it is always worth investing in yourself, in gaining new and varied competencies.

These can range from cooking and baking to coding and public speaking. Investing in yourself can be spending money to develop a healthy habit; or get rid of a very unhealthy one.

Do you know that the £250 I spent in 2006 on a stop smoking workshop is one of the better investments I’ve made? To start with, I have not smoked for over ten year. Let’s, for simplicity sake, say 10. Are you surprised that by investing £250 for the workshop I’ve saved over £20,000? I am. And my lungs have recovered so my health has benefited. You see now why this is a cracking investment.

Remember also that education always pays off. And I’m talking about education, not degrees.


These are the five ways to make your money work for you that every manual about investing for beginners should include.

I know this is too much to take if you are just starting out. If you think this will help bookmark this post and see it as the skeleton on which we’ll be putting more muscle. Eventually we’ll get to the skin and even make up; have some faith.

Have you started to invest? What have you invested in? (Please don’t be shy and share; we can all learn from each other.)

This is What You Need to Know about Starting an Online Business and It Is Not All Flowers and Glitz

This is What You Need to Know about Starting an Online Business and It Is Not All Flowers and Glitz

Are you thinking about starting an online business?

I bet you are. After all, you read blogs and when the small matter of making a large income comes on the agenda what do you hear?

You hear that to make more money you should start a blog.

Even I told you to start a blog as one way to make £1,000 per month. It was fifth on the list, true but it was still there. Usually, we bloggers sell the idea of starting an online business by emphasising the (relatively) easy entry. For instance, we tell you that to start an online business will cost you very little (low level of investment) and it is so simple that anyone can do it.

While all this is true it is by far not the whole truth. Starting an online business is not all flowers and glitz. Anyone who tells you different is hiding from you the hard work, continuous learning, varied competencies, technical expertise, long hours, dedication and emotional upheaval that success on the internet requires.

If starting, and maintaining an internet business is so easy why is the average lifespan of a website approximately 100 days? This is slightly longer than 3 months which doesn’t seem long at all.

Even assuming that you have grit and can keep a website going, what makes you think that you’ll get any traction? Do you know what the competition looks like?

I’ll tell you exactly what the competition looks like. According to some statistics I was looking at there are approximately 1 billion websites on the internet at this very moment. Okay, may be you can add or deduct several million but you get the picture.

Starting an online business demands not only persistence, ingenuity and talent but it is made harder by the fact that the internet is an extremely noisy space. It is hard to make yourself heard even if you have a rather nice voice.

Do I have your attention now? Because while starting an online business is not all flowers and glitz, you can still become an awesome blogger if you follow a number of rules; and practice, of course.

Starting an internet business is not an easy way to make money because:

  • You need to become a writer who can stand her/his ground against any bestselling author.
  • You need to master the craft of journalism so that your posts can, with some more work, get into the most reputable newspapers. Or large online publications.
  • You need to perfect the technical aspects of running a website; e.g. you need to learn about website structure and SEO and about how networks, more specifically the World Wide Web, work. And you need to keep learning.
  • You need to learn about the psychology of marketing.

Most of all, you need to bring all these strands of mastery together to create an online business powerhouse.

This can all be learned but you’ll need time and dedication.

Now, let me tell you something. I don’t want to brag but being a professor and having done two PhDs helps me little where The Money Principle is concerned. It is by far not what it could be and my failing as a blogger and internet entrepreneur is that I approach it mainly as a writer. May be the time has come for me to learn and apply the rest of it.

But I’m digressing a bit. What I want to offer you tonight is a checklist of the competencies I believe you need and some helpful resources to help you succeed.

#1. Starting an online business: becoming a writer

The other day I was telling my middle son that this is the time to be a writer. You see, when I was young it was next to impossible to make money writing if you are not a bestselling author. Even then, we joked that if you write a bestseller in the US you get a new lifestyle, if you write a bestseller in Europe you may get a new typewriter (some of you, friends, may not remember typewriters but this is what I used when I started writing).

Today business is moving on the internet and every website needs ‘content’; which is writing. Learning how to write for websites – yours or other people – is probably the most useful skill you can master at the moment; apart from coding.

Every aspect of writing is important.

Did you know that writing the title of your blog post is an art form spelling incredible success or condemning your post to an un-remarkable failure?

(You can learn how to write catchy headlines and blog titles.)

Next, you’ll have to figure out what kind of internet writer you are. There are, I reckon, three main kinds of internet writers:

The story teller. You can spot the story tellers easily on the internet. They are the ones who educate and entertain by lulling you into their stories. My favourite story teller is probably Jon Morrow. Read his post ‘On Dying, Mothers and Fighting for Your Ideas’ if you want to know about story tellers at their best.

The diarist. These are the writers who transmit ideas through their experience. There are some great examples of diarists on the internet. Probably my favourite diarist is J. Money: reading BudgetsAreSexy is like sitting down to have coffee with a treasured friend.

The analyst. These guys are the hard, cold facts writers who research, analyse and tell us what they found. An example here would be Sam from the FinancialSamurai.com; you can check out his analysis of mortgage interest rates by race in the US to know what I’m talking about.

Each of these has different writing proclivities and develops a very different style. You can settle on the one that suits you.

#2. Starting an online business: journalism and research

This is mainly about perfecting the skill of research and investigation, and developing a ‘nose’ for a story. You see, you may be a great story teller but people won’t read you if you are telling the wrong story. Or if your story has unforgivable gaps because of sloppy research and deficient information.

People will read your site and buy your products if they trust in your integrity; don’t compromise their trust by not doing your research properly.

#3. Starting an online business: technical stuff

Now I’ve reached my blogging nemesis: all this techie stuff, as a sometimes flippantly refer to it.

You see, for building and maintaining successful websites hot writing is a necessary but not sufficient condition. You need great content; you need writing that is helpful, educational and fun. You also need to understand search engines, SEO optimisation, how to analyse the data from Google Analytics and use this knowledge to make you site better etc.

Do you know what my problem is? I am perfectly able to understand the technicalities involved in optimising a website; I just find it so lacking in excitement that these tasks somehow get to the end of my ‘to-do’ list.

Do you know what I was doing before I started writing this for you? I was reading a detailed and helpful guide to internal linking. I’ve read about ‘cornerstone content before’; I know a lot about networks and their power. Still, I’ve done little to link the articles on The Money Principle in related clusters which will make it much easier for readers to understand the deeper notions behind blogs.

I’m writing this article, instead of finishing and implementing the guide to linking. May be I should start now; or get back to it when I’m finished.

Don’t be like me. Learn about the technical stuff you need to do to build and maintain a successful online business and do it; do it regularly and with care. It is boring but it pays off big time.

#4. Starting an online business: psychology and marketing

There are many great marketers out there. If you ask me where to start unravelling the psychology of marketing I’d say read Robert Cialdini’s ‘Influence: The Psychology of Persuasion’.

It is very good and very readable.


Lately starting an online business has come to be considered as speedy highway to fame and fortune. In fact, success in the network economy (on the internet) requires a unique combination of competencies, knowledge and the persistence of very determined mule. You’ll need to determine whether you are a Story Teller, a Diarist or an Analyst and hone your craft. You’ll have to learn how to do research and investigate a story; how to keep your site up-to-scratch technically; and as if this is not enough, you’d learn to comprehend people.

Are you sure you wouldn’t rather tend to people’s gardens or do their shopping?

Which of these you find hardest? How are you going to tackle this hardship?

photo credit: oneroadlucky rose via photopin (license)

You May be Killing Your Opportunity to Increase Your Income

You May be Killing Your Opportunity to Increase Your Income

increase your income

“This blog post is completely useless. It either tells you to get a job to start a business.”

This is the comment someone left on one of my posts about making more money.

I beg your pardon? You want to make money but don’t want to work for it?

And this is a sure fire way to kill your opportunity to increase your income: failing to appreciate the straight forward link between the work you do, the value you contribute and the money that hits your bank account.

I’ve written about different ways to make money and I’ve discussed ways to increase your income. This is important, you see. Increasing your income and getting to a ‘prosperity profile’ is the fasted route to getting out of financial trouble be it large debt, no savings or meagre pension fund.

You can make money either by working or through (relatively) passive investments.

Still, for most people, most of the time the main source of income – the main way to make money – is work.

The important thing to remember here is that this source is not set. You can manipulate how strong – or weak – it is by minding three elements. These are:

  • Time;
  • Skills and competencies; and
  • Attitude

Many people completely miss this one. They think that their income is about ‘the job’. In fact, their income is determined by:

  • The work they do;
  • The work they wish to do;
  • The work they are qualified to do;
  • How much work they do (how long do they put into it); and
  • How they feel about the work they do.

Now, let me tell you how you kill your opportunity to increase your income.

#1. Killing Your Opportunity to Increase Your Income: Time

Are you careless with your time?

If you are, you should think again: time is THE most valuable resource you have. All other personal resources you can use for a happy, fulfilled and successful life can be expanded: money, skills, knowledge, worldview and attitude. The only resource that is truly limited is your time; it is even worse because you never know how much time you have.

This is why being irresponsible and wasteful with your time seriously damages your opportunities to increase your income.

These are some of the way in which you are hurting your chances; you:

  • Waste time;
  • Spend time on activities that don’t bring value to your life;
  • Procrastinate;
  • Spend your time worrying;
  • Spend your time being afraid;
  • Spend time on things that are non-essential or irrelevant.

There are techniques and hacks to deal with all those (and I have no intention to repeat these here).

What is less known and less discussed is that when it comes to increasing your income (and thinking about time in terms of your work) you need time for:

  • Doing the work you are supposed to do;
  • Developing the skills and competencies you need for your next job (promotion, new line of work);
  • Achieving a level of mastery that increases the value of your time (honing your craft);
  • Build reputation that will make you one of the top performers in your field (some people never get to this one).

Instead of killing your opportunities to increase you income by procrastinating and focusing on the wrong things, divide your time appropriately between these activities and just watch the awesomeness that will follow.

#2. Killing Your Opportunity to Increase Your Income: Skills and Competencies

To increase your income through work you really have to build and develop the skills and competencies you need.

Here, you are hurting your prospects considerably by:

  • Not knowing what you really want to do;
  • Not taking the time to figure out what are the key competencies for the work you do;
  • Not developing these skills and competencies all the time;
  • Not being curious about how far you could get;
  • Not talking to your ‘role-model’ (or not having one);
  • Working to your weaknesses not your strengths;
  • Over-estimating how good you are;
  • Not daring to follow your dream (or even being scared to dream.

#3. Killing Your Opportunity to Increase Your Income: Attitude

This is probably the most underplayed part of the ‘success at work’ triangle. In fact, it is equally, if not more, important than the other two.

Today, in most occupations what gets you the job (work) is not your technical skill (your skills and competencies) but your attitude.

Where attitude is concerned, you can hurt your opportunities to increase your income in the following ways:

  • You don’t have a dream;
  • You drift through life without direction;
  • You do what you are told;
  • You do only what you are told;
  • You deliver on or after the deadline;
  • You think your job is about tasks when it is about making people’s tasks easier;
  • You never go the extra mile;
  • You complain a lot;
  • You think in predicaments;
  • You never appear eager;
  • You look (and feel) miserable.


There are numerous ways to kill your opportunities to increase your income through work but these largely fit under three groups: one around your coping with time, one around your willingness to develop your skills and competencies and one around your attitude.

While dealing with the separate issues within these groups will help you improve your opportunities to increase your income, this gain can be multiplied when you start looking across groups.

For instance, are you putting a lot of your time to work on improving your weaknesses? (You realise that you’d get much further by putting the time into using your strengths, right?)

Are you drifting through life and wasting your time (procrastinating) because you don’t know what you want to do next?

Are you always late with deadlines because you can’t muster the motivation to finish a work project?

I suppose, you get where I’m going with this one and I’ll stop now. What I’d do though is, I’ll write another post about how these three elements intersect. After that, I’ll develop a test so that you can know whether (and to what degree) you are damaging your prospects to increase your income.

Take a good look at the three groups of issues. Do you find that you suffer from some of them? Which ones are the most serious and how you deal with them?

150 Wonderful Ways to Make Money and Why You Should Try Some of Them

150 Wonderful Ways to Make Money and Why You Should Try Some of Them

Do you know what you are looking at?

No, this is not a trick question. Still, if you though ‘machines’ you’d be wrong.

What you are looking at is the future of employment.

I took this picture couple of months ago at Schiphol Airport, Amsterdam. Do you remember the time when there were smiling and polite people at airports helping you to check your luggage, find the gate of your flight and re-direct if you’ve missed your connecting flight.

Well, I remember this time as well. But here is the deal: it’s gone!

Today, most airports are automated to some degree. Schiphol is a leader in that. It is like something from the science fiction novels I used to read in the 1980s.

You arrive at the airport and you either check in (using a machine) or you just collect your boarding pass (using the same machine).

Next, you go to the machines that take your luggage away.

After that, you use the scanners at passport control; there are still some people at security but it is only a matter of time before they are replaced as well.

And the machine on the picture?

Oh, well. This one you use if you’ve missed your connection and have to re-route your flight.

Now, I can tell you about the elderly little ladies looking completely lost; about the bother when any of these machines malfunctions and the aggravation when solving your problem needs a bit of flexibility and imagination.

But this is not what I’ll be telling you about. Automation is advancing fast and we’ll need to learn to cope with it.

Thing is, automation has very clear implications for labour markets and employment.

One is, that most people will have to compete for jobs that cannot be automated and these usually demand high level of imagination, creativity and flexibility. This is why, I believe that education today should snap out of the mode of raising experts and start creating mavericks – people who have flair, imagination and can generate ideas as fast and as smoothly as the blood flows through your veins.

The second one is that jobs are not only becoming different (demand different skills) but they are becoming fewer. This is why it is so important to be able to come up with ideas to contribute value, create work and make money.

What used to be ‘a bit of side hustle’ is becoming the way in which we generate income and sustain our lives.

I happen to believe that making money is no rocket science: you just have to spot opportunities, generate ideas and act on them. I’m also the first to admit that jump-starting this way of thinking is not easy.

This is why, I published the ‘Fifteen Ways’ posts: Fifteen Ways to Make Money Enough to Fill Your Fridge and Fifteen Ways to Make Money for Your Monthly Bills.

In this post, I share five awesome blog posts overflowing with ideas on how to make money. Between them (and my two post mentioned above) they contain approximately 150 diffrent ways to make money.

These ideas were created and published by bloggers that are not only on top of their craft but are also proven entrepreneurs. Here they are:

  1. 20 Weird and Wonderful Ways to Make Money [Step Change, Money Aware]: Yep, these are twenty tips on how to make money that you won’t find normally. Let’s put it this way: babysitting wasn’t mentioned at all and this is certainly a winner in my book. My favourite is becoming a ‘hangover helper’. Intrigued? Go check them out!
  2. 29 Smart Ways to Make Money on the Side in 2015 [ThePennyHoarder.com]: Okay. This one does have babysitting but you can’t avoid it forever. These smart suggestions more than compensate for it by (mainly) offering ways to make money that are (or can become) ‘proper’ freelance opportunities.
  3. 20 Ways to Make Money in Your Spare Time [MoneyWise.co.uk]: Now, this is different. How would you like to be a movie extra? (I did this when I was at university and in my opinion the fun is over-rated; still the money may be worth it.) Or renting your house to movie makers?
  4. 35 Ways to Make Money for 2015 [ChristianPF.com]: Some really interesting and actionable ideas here as well. I suspect that John would love to do the fourth one (test websites for money) – the man can break any programme, any site (and will make a list of the problems and send them for free; so why not get paid?).
  5. How to Make Money [wikiHow.com]: Many claim they’ve developed a ‘comprehensive’ guide and it’s usually BS. This post is the closest one will ever get. If you want to get ideas – and a lot of them – go have a look. It’s fun as well.
  6. How to make money blogging [AuthorityHacker.com]: much has been written about making money blogging still this is not an easy thing to do. Here is a detailed analysis of how 21 bloggers making decent income on line.

You see, my fiend; a bit of thinking, a bit of research and…there are close to 200 ideas on how to make money in these posts. Even allowing for some duplication, you still have easy access to 150 simple and actionable ideas on how to make money.

I dare you to try 20% of them! And let me know how it went.

How to make more money in one simple step: from ‘working harder’ to ‘working smarter’

How to make more money in one simple step: from ‘working harder’ to ‘working smarter’


Editor’s note: I published a version of this article first on JeanChatzky.com several months back. Today I’m giving you, my reader, the updated version of the article.

How did you do it?

This is what people ask me when hear that we paid off £100,000 (and the interest) consumer debt in three years.

First I tell them that we had a simple strategy.

‘Be more specific’ – people say.

Then I tell them that frugality is not the answer.

‘What is the answer, then?’ – they say.

So here is my answer:

To be financially healthy and build sustainable wealth increase your income.

The specific ways to increase your income are many but in the end these boil down to three general strategies:

  1. You can take on more work (working hard);
  2. You can increase the level of pay you command (working smart); and
  3. You can try a combination of the two whereby you increase the level of pay you command and the amount of work you do (accelerated strategy).

Working harder you can make more money; unfortunately there are limitation in that your time is limited, it is exhausting and is impossible to sustain long term.

Working smarter’ or making more money by increasing the level of pay you can command, is a winner on two counts:

  • It gets you to your financial goals much faster. Remember the shameful amount of debt we paid off in three years I was telling you about? Well, this was done by using the intensive strategy to increase our combined income by about 30%. Yes, we worked hard but we worked even smarter.
  • It doesn’t get you ill from exhaustion. Not a joke. Working over certain number of hours per week and not getting enough rest has many negative consequences for our health, including high blood pressure, constant fatigue, clouded judgement and getting fat.

Moving from ‘working harder’ to ‘working smarter’ is the key for anyone who wants to make sustainably more money.

To achieve this shift, you have to realise that ‘working harder’ is about selling your time; ‘working smarter’ is about selling your reputation.

How much you’ll be able to charge for your services (and goods) depends on the ‘reputational capital’ we have amassed.

Here are the main differences between ‘selling time’ and ‘selling reputation’.

Selling time Selling reputation
Being technically good(A good seamstress can make you a black cocktail dress.) Being an artist(Coco Chanel created THE little black dress.)
You are in the realm of the replaceable(Your competencies and skill are easy to replicate and there are many who can take you place/job. Copy writers, for instance, even good ones are easy to replace.) You are in the realm of the unique(You have gone beyond the reproducible and hence your competencies are unique; there is no replacement. No one can replace Kurt Vonnegut.)


Replication(You are very likely to replicate things and your ‘products’ are for the mass market.) Creation(You create something new and unique; you are not part of a trend, you are creating trends.)
Being found(It is likely that people find you when searching for the product or service you offer; in other words, you rely on ‘passing trade’.) Being sought(People look for what you offer.)


One can switch from ‘selling time’ to ‘selling reputation’ in any occupation.

Muhammad Ali said that if he wasn’t the best boxer in the world, he would be the best rubbish collector in the world.

How to get there?

Try this six ingredients for switching from ‘selling time’ to ‘selling reputation’:

  • Choose your areas wisely. This is about choosing the area/field in which you can make the switch from selling time to selling reputation with care. Worn out as the ‘find your passion’ mantra is, there is some sense in it. But I don’t believe in finding passion, I believe in creating passion. So choose wisely but remember that the area where you could sell reputation will be the cross over between talent, interest (yours and others), inspiration and loads of hard work. It pays off, I promise.
  • Education. Words are important and you should note that I used ‘education’ not ‘a degree’. What will get you to the peak of your reputation is education, the systematic gathering of varied knowledge; some of it appearing completely useless at the time.
  • Continuous learning. Education is the knowledge you have acquired, learning is the process through which you acquire it. To be able to sell reputation you have to keep on top of your game; this means that learning ought to be your constant companion.
  • Patience. Switching from ‘selling time’ to ‘selling reputation’ can happen overnight and usually there are many nights involved. Be patient and keep yourself occupied by appreciating the wonderful steps that are taking you there.
  • Focus. Longer term endeavours often fail; more often than not they fail because somewhere along the way people lose sight of what they were looking to achieve. A technique to keep your focus that works for me is to ‘plan backwards’: I’d start with an image of where I want to be, work out the conditions to get there and then prepare these with the dedication of a cult follower.
  • Self-promotion. You could create unique artefacts but you are not an artist, and would never be sought, if people don’t know about it. Which brings me to the key point here: don’t tell people who and what you are; show them. This is the difference between telling people that you are ‘passionate about X’ and showing them your passion through your creations. It is the difference between saying ‘I am a great writer’ and stating ‘I wrote X and Y’. Self-promotion can be a great tool for reputation building when done with finesse and evidence.


Creating wealth is not only about making more money; it is also about creating immense value in exchange for which you get paid.

You can choose to continue selling time and working hard but I’ve made my choice: I am working towards selling reputation and working smart.

photo credit: carbonated via photopin cc