Does one really have to spend money to make money?

Answer 1

In essence, yes. In order to go to work, you need money for gas/bus fare, your lunch/dinner, your uniform/clothing, etc. In order to obtain a well-paying job, you need to have a good educational background which takes money to finance.

When making investments, you need some capital in order for you to even be in that arena. If you have no money in the bank, how else will you earn interest?

It's funny how we look at the penny . . . but without that first one, we could never make a dollar and so on. So yes, money needs to be spent in order to make it (unless you are the US Mint!).

Answer 2

For the most part, it takes money to make money. But I guess if you get a job, you really don't have a spend money, unless you consider a college degree or work uniforms or anything of the nature. I would say yes, it takes money to make money.

Answer 3

For a business - absolutely. You have a lot of up-front costs to pay rent, get equipment, hire people and such to operate a business.

For just job-seekers, you need postage for resumes, good paper, transportation to interview sites, and professional clothing for interviews. For occupations where you will interact with people, like a real estate agent, you need several nice suits.

The question is, do you really need to spend that money? Sometimes you do, most times you don't.

Answer 4

To a degree yes. My experience has been that you have to spend money to market yourself or your product to generate more business and thereby generate more income. There is probably a law of diminishing returns that can come into play though. A savvy business owner will be able to find the balance between income and expenses to keep the business improving, growing and prospering.

Answer 5

Have you ever tried?
You wont have much of a business if you dont want to spend anything to make it. Even a business such as cutting the grass in the neighbourhood, you gotta buy the lawnmower, gloves, proper footwear, and safety equipment, and then fuel, blade sharpening, yada yada yada..you get the poin
yes you gotta spend money to make it, and the more you wanna make, the more you are going to have to fork out.!

Answer 6

"YOU HAVE TO PLANT A SEED BEFORE YOU CAN GROW A PLANT, BUT YOU DONT ALWAYS HAVE TO BUY THE SEED."

Read these Article carefully.


This is addressed primarily to inventors. It's theme is don't spend money unnecessarily. The old saw, "You have to spend money to make money", is extremely dangerous to those not skilled in business. The better saying is, "The way to make money is to not lose what you have".

We're seeing far too many inventors rushing off to a patent attorney with their first idea. If you want a patent to hang on the wall and you have an un-needed $5,000 laying around, fine -- but that's not the way to make money. The odds are at least 100 to 1 against you, i.e., you have at best a 1% chance of getting that money back -- let alone make a profit.

The way (for an inventor) to make money is to go find a customer with a problem, solve it, and sell him the solution.

"But I have a solution to a problem that everybody has."

You don't sell to "everybody" -- you sell to people. Go ask some people whether they'd buy it -- and not your next door neighbor.

You have a sporting goods product? Go to a few sporting goods stores and ask the buyer, "If you had a product that does such-and-such (whatever benefits you perceived when you came up with the idea in the first place), would you buy it?" If you expect it to sell through retail, ask the retailer, not the end user.

Then "At what price?". The product will have to be manufactured at 1/4 to 1/6 of the retail price. Get a feeling for whether that's in the cards.

Then "What reps that call on you carry this kind of product?". And go talk with the reps and ask the same kinds of questions.

Now you have at least some objective notion of whether the thing might sell, and you know at what cost you have to bring it in at. If you're honest with yourself, this alone will screen out 90-95% of your ideas. You've spent some time -- but, importantly, no money.

This applies whether you're intending to manufacture or license. If a potential customer doesn't get excited about the possibilities of buying from you, it's not likely they'll get excited about buying from anyone else.

For ideas that get through this screen, ask yourself, "Do I have the sales and business skills necessary to put this across?" Carrying it half way (or even most of the way) doesn't count. You'll have spent money, but there'll be no return (at least no profit) until the end, i.e., until the product is actually selling in the marketplace.

Again, this applies whether you're intending to manufacture or license. It's just as hard, maybe harder, to negotiate and sell a license than to start a business.

If you don't have the sales and business skills, and are unable or don't want to learn them, you have two choices -- hire them or find a partner who has them.

Under the principle. "don't spend money unnecessarily", first choice is to find a partner.

How do you find a partner? You get out to meetings and events where you'd expect to find the type of partners you're looking for -- trade association meetings, Chamber of Commerce meetings, the Enterprise Forums...

For example, if you're looking for a partner with selling skills, see if there's an active manufacturers rep association meeting in your area. If there is, ask if you can sit in on one of their meetings to get a better feeling for how their business works. And when you attend, make a concerted effort to mix and mingle. Try to meet everyone there. Get them to talk about what they do and the problems they encounter -- and tell them a little about yourself and your interests.

For those you seem to have a little rapport with, stay in touch. Call them occasionally with a question. Offer to help them with a task or expertise when appropriate. In other words, build relationships. If you do this well in advance of the need, when the need becomes real, you'll have some choices -- and the experiential knowledge to make some reasonable choices.

If you insist on waiting until the last minute and hiring the missing skills, recognize there's a good possibility you're going to get burned -- more likely because of mis-communication than dishonesty, but the effect's the same.

Look for people who are willing to break their work down into small quantifiable tasks costing no more than what you're willing to write-off to education.

Be very careful with contracts. Take the time to ask yourself, "What are my options if the other party doesn't perform?". The Termination clause is the most important clause in any contract.

Don't expect a contract with no risk. Every business transaction involves risk. Just try to negotiate an equitable division of benefits and risks. And, to the maximum extent possible, make your risk loss of time and effort -- not loss of money.

Keep in mind -- the best way to make money is to not lose what you already have.

Answer 7

Yes. Generating income requires some initial investment to put the system in place. Whether that means buying product, leasing a location, or hiring people, there is always an up front investment. Who pays for that investment is dependent upon how business savvy you are.

Answer 8

That wold definitely be a yes. Look at it this way you have to by product in order to run the business. So you see you have spend first then reap the rewards later.

Answer 9

Generally, you have to invest something - money, time, labor, a future promise to perform - to get a return.

But there is one notable exception, and the way the majority of very wealthy people made their fortune.

They inherited it.

Best to you.

Answer 10

Of course, to make money, you have to spend money.