Spend Cash to Make Money – The Gist of ROI for the Average Joe

by David@MoneyNing.com · 16 comments

Return on Investment (ROI) is a concept that entrepreneurs and marketers know all too well. If you can spend a dollar to get more than a dollar in return, you should keep spending.

Awesome, but why do I care? I struggle with 40 paid hours a week and another 20 of what I called “I have to” hours of unpaid work. How does spending money help me?

Like you, ROI has always been something I care little about. Now that I started making investments to improve my business though, I see the true value of investing for the individual too. It may not be as direct and measurable as an advertising campaign, but investing in oneself is actually more beneficial than any investments a business owner can make.

Let me elaborate by giving you some suggestions.

  1. Reading – No, I’m not trying to get you to buy my book (although it would be appreciated *hint*hint*). I’m talking about career, self improvement and business books. So many of us spend thousands of hours watching Everyone Loves Raymond, but imagine what you can learn by reading books like Good to Great instead. Reading doesn’t make you money per se, but it stimulus your thinking, gives you a glimpse of the thought process of successful people and improves your language skills. All else being equal, will you promote the person who seems to think beyond the obvious or the person who just follows instructions?
  2. Continual Education – I can’t believe I’m saying this since I hated English class growing up, but I’m seriously thinking about taking creative writing classes. Other than helping with my often awkward grammar and sentence structures, I also want to increase the critical thinking and reasoning aspects of my writing.

    If you are in a field that’s ever changing, you can continually go to classes (or professional networks) to help you keep up.

  3. Learn a Related Skill – From updating the website to designing book covers, I knew just enough to make small changes without the help of others. It not only saved me money but even more importantly, it saved me tons of time and stress as I didn’t need to communicate what I wanted to another person. Marketers who know a bit of photoshop are often much more efficient at communicating his/her vision to designers using language that everyone understands. Managers in a technology company who keeps up with latest trends are always one step ahead of others. Teachers who embraces technology are often able to do multiple tasks in the time it takes others to do one. Are there any skill sets that you can learn to compliment your position?
  4. Management Classes – Whether it’s managing people or time, we are always judging and trying to maximize limited resources. It may not feel like an improvement at first, but with some practice, you will reap the benefits.
  5. Practice – By now, you probably realize that investing your time takes more commitment than the money you need to spend. Setting some aside and letting go of your ego by practicing takes even more commitment than taking a class, but once you hear about a new way of doing things, practice turns it into a habit.

For the most part, you probably won’t see the effects immediately but don’t lose heart because investing in yourself is incredibly beneficial for the long run. Think about it. Making a one time investment gives you life long benefits. Who would say no to that?

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{ read the comments below or add one }

  • Lee says:

    Here in the UK we have a site called QuidCo. The idea is you get cashback on things you’d normally buy anyway (car insurance, credit scores, gadgets… that sort of thing).

    The cashback is usually either a fixed amount, “We’ll give you £5 if you sign up for a £6.99 membership”, or “We’ll pay you back 10% of your order total”. If you’re having to spend out on these things anyway, then you’re a fool not to do it via QuidCo.

    But, the law of unintended consequences occurs occasionally and helps to make true Return on Investments. Here’s my most recent example:

    A payday loan company was offering £65 cashback to get a loan from them. Ordinarily, they’d expect you to take out £500 or an amount along those lines… but the minimum amount they’d lend was £80. With their horrific interest rate, paying back this loan 30 days later resulted in me being charged £100. But, it actually resulted in £45 profit (after taking out the £20 ‘fee’).

    It’s not often you’ll get paid for borrowing money and I just love searching for little loopholes like that.

    Is there a ‘QuidCo’ for the USA?

  • Wilson Pon says:

    Ning, I truly agreed with your thoughts, especially the first and the last parts. Honestly, I found most of my inspiration from reading. Once the concept had been carried out, it’s time for practicing, as practice makes perfect.

  • Jessica Griffin says:

    While blogging is a pleasurable hobby, I am apprehensive about making it my only source of bread and butter. What is the guarantee that i will make money off of it? I prefer to write for pleasure, rather than for an income.

  • RB @ Financial Samurai says:

    Hey David – Wow, I didn’t realize you blog full time. That’s fantastic. I understand what you are saying regarding transitioning from hobby to your sole source of income.

    I have to imagine if Financial Samurai was the only thing that fed my family, I’d probably obsess over it immensely. It may not be healthy for someone like me, b/c once I sink my teeth into something, I go 20 hours a day for months.

    My goal is very simple, but a little daunting. Save up $3 million cash by age 42, and live off the $120-140,000/yr in interest income. And then, maybe, I’ll be like you but blog off my private deck on a cruise somewhere in the Mediterranean. 🙂

    I’ve happily put MoneyNing.com on my blog roll. Hope to hear some of your thoughts in the commentary section of Financial Samurai sometime.



    • MoneyNing says:

      Good luck with your pursuit for your $3M goal. It’s a lofty target but already aim high to strike big.

      Thank you for adding me to your blogroll. I will for sure check out your site.

  • Save Money Hound says:

    Reading and continual education are important. Luckily, these days there are some great resources out there, some for free for those who can’t outlay a lot. It’s certainly worthwhile in the long run to invest some money in your own education. MoneyNing – What are your favourite all time recommended resources that have really influenced you?

  • Lenny says:

    It’s funny how I just came back from a meeting where the boss gave a 30 minute lecture on ROI. I literally wanted to tell him that what he’s doing is definitely not worth the investment of his money (our time at work) and that if these useless lecture kept up, we would definitely be thinking about our ROI of working at the firm.

  • marci says:

    Reading and researching also allows you to learn from other people’s experiences, and from their mistakes, without having to make the same mistakes yourself. It can give you a ‘feel’ for the opportunity, a chance to size up the situation before hand, and see if it is something you can deal with or if it is something that might have pitfalls that might make it worth avoiding.

    Learning – have to say that Freshman English in college was THE most valuable course I ever took. Layout, logic, follow thru, persuasion. Great stuff 🙂 Highly recommend it.

    Skills – any do-it-yourself skill that you can use to save money is a wonderful skill. And most learning (books/videos) is free 🙂 (from the library)

    Practice – it builds confidence, and that enables you to do it naturally and without having to spend much time thinking about it. Saves time in the long run. As an example, my goal this year was to improve my canning skills and can meats. The first couple times were ‘watch’ and soak-it-in (a friend was teaching me). The next time I stepped up to bat and did the work under supervision. Then last Sunday, on my own, I just tackled the whole project all alone. GREAT feeling of satisfaction over having accomplished something that a month ago I didn’t know how to do… and increasing Confidence with each run thru the process 🙂 I can Can 🙂 (Yes, I can Can-can, too) 🙂

  • RJ says:

    Big believer in investing in yourself. Great choice of topic.

    This is why I don’t have trouble spending money on something like a book, that I will reread and mark up many times. The investment of $15 is quickly recovered as long as I act upon the advice.

    • MoneyNing says:

      You are certainly on the right track. For me, it’s not so much the direct advice that the books give. Most of the time, it triggers me to think further than the written words and spawns into ideas that help me much more than the face value of the book.

  • RB @ Financial Samurai says:

    Hi David – Thanks for your response. Yes, retiring at 45 sounds fun (lucky him.)… and actually my goal was to retire at 40 until the downturn hit. I’ve more realistically extending my retirement goal out to 42.

    When I say retirement, it’s not really to stop working, it’s just to stop working after 20 years in my management consulting business. I’d love to devote 4-5 hours a day on “Financial Samurai”, but no can do. I have an obsessive type of fortitude who, without time limits, would probably spend 10 hours on my site.

    What I do have is dedication and perseverance. Since I don’t plan to “retire” for another 8-10 years, I must imagine that Financial Samurai should gain a decent following by then. 🙂 How amazing it would be to just blog for a living.

    Glad to have found your site David. It’s fun to blog and interact with the community.


    • MoneyNing says:

      I look forward to seeing more of your insights.

      I blog full time for a living and it’s literally like a dream come true. However, I must warn you that once you rely on your blog as your way of living, the pressure for you to perform will change your attitude about it. Don’t get me wrong, I love what I’m doing but the blog is no longer a hobby when it’s the very thing that feeds your family.

  • Lance says:

    The investments you outlined are good but it’s very hard for individuals to see the rewards. Like you said, commitment of money is one thing but the huge amounts of time is another. Usually, people end up spending the money but not putting in enough effort to support the “investments” that they made. They buy the book but don’t read it. They pay for courses but skip half of them because they rather go on a date Thursday night.

    Prepare to commit the time first, then make the monetary investment.

  • RB @ Financial Samurai says:

    Education is key as well as measuring how much time you spend on each activity.

    For my site, “Financial Samurai”, I promise to spend no more than 1.5 hours a day given I have a normal day job. I’m happy to have a co-writer in Shogun, who is retired at 45 and doesn’t have to work anymore.

    • MoneyNing says:

      Time management is important but setting a hard limit on productive activities may be limiting your blog’s growth potential.

      Of course, having a blog partner would alleviate some of this issue as he can work on the blog more often.

      On a side note, retiring at 45 sounds like fun.

  • Randy says:

    I took some time management classes and the methods that they teach are quite interesting. I would highly recommend it.

    Btw, I’m having serious trouble commenting because it’s taking forever and it takes several tries. Is something wrong?

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