Some Thoughts on “How to Make Money in Six Easy Steps”

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A few days ago, I read Jason Fried’s wonderful article How to Make Money in Six Easy Steps. The article details Fried’s growth as an entrepreneur from a young child to running the successful software firm 37signals.

Fried’s “six easy steps” are as follows:

1. Understanding the buyer is the key to being a strong seller
2. It’s all about passion
3. Charge real money for real products
4. There are different pathways to the same dollar
5. Bootstrapping
6. Practice

This actually turned out to be one of the few articles from the ‘net that I actually print out, because I wanted to jot down some of my own notes on the margins. I realized, after I was finished, that these notes actually made for the backbone of a pretty compelling article in its own right.

So, without further ado, here’s my own “five easy steps for making money.”

1. Practice
This underlines everything that a person can do to make money. The greater your skill, the more money you’ll make by plying that skill. How do you improve your skills? Practice, preferably in a deliberate fashion. Break down what you’re doing into little pieces, and practice those pieces.

For me, that often means doing writing drills. Yep, I do writing drills pretty often. I’ll do little drills like “write a complete story in fifty words or less” or “compress this document as much as possible without losing any meaning” all the time, just for the sake of practice. It’s a skill builder.

I usually don’t find actual writing tasks to be that strong in terms of practicing. Many people assume that if they do the task professionally, they must be good at it. That’s akin to a professional basketball player believing they’ll stay on top if all they do is play games of basketball. The truth is that the best basketball players are constantly doing drills and never leave the gym.

So how do you practice things like selling? The article offers a good suggestion:

Go buy something on Craigslist or eBay. Find something that’s a bit of a commodity, so you know there’s always plenty of supply and demand. An iPod is a good test. Buy it, and then immediately resell it. Then buy it again. Each time, try selling it for more than you paid for it. See how far you can push it. See how much profit you can make off 10 transactions.

Start tweaking the headline. Then start fiddling with the product description. Vary the photographs. Take some pictures of the thing for sale; use other photos with other items, or people, in them. Shoot really high-quality shots, and also post crappy ones from your cell-phone camera. Try every variation you can think of.

I think it’s useful for almost everyone to practice transferable skills – like selling. Written communication is one type of transferable skill, as is public speaking.

If you want to be great, practice.

2. Care
What do I mean by care? You have to want to do the things you’re doing – and want to do them well. If you don’t care about it, you won’t be able to go the extra mile to stand out from the crowd.

This goes hand-in-hand with practice, of course. If you don’t care about the field you’re in, you’re not going to practice and you’re not going to rise to the top. Caring about your performance and what you’re doing is what will bring you to the top, and practice is a key component of that.

Quite often, this is intermingled with the idea of passion. In the end, they both point to the same thing. If you don’t have an emotional involvement and a drive to always move forward in this field, you’re not going to succeed.

3. Know what people want (or need)
You might think that the particular skill you have or the particular item you want to sell is a great thing. The question really is whether or not anyone else thinks that item or skill is a great thing (and thus worth paying for).

Something is only worth what someone else is willing to pay for it with their time, money, or effort. In my case, what I sell is generally paid for with the reader’s time (through ad space sold to banks and financial institutions on my website), though I do sell other items as well (such as my books).

How does it “sell”? People find value in reading what I write, whether it’s because they find it useful for their own personal growth or because they find it entertaining. There’s enough value there that people are willing to pay for it with their time (and occasionally their money).

People want to have a sense of control over their lives. My site attempts to fulfill that want, at least in part.

4. Make something distinctive that people will want (or need)
In order for that “sale” to continue, I have to continue writing worthwhile stuff that’s useful enough or entertaining enough for it to stand out from the crowd of sites that talk about personal finance and other topics. How do I do that? I talk about my own story in depth. I post very regularly so that there’s always fresh content to read. I use conversational language in my writing rather than the drier tones often found in financial writing.

It is those factors that make up the “special sauce” – the distinctive element – of The Simple Dollar. If I didn’t do those things, my site would be one of many personal finance blogs looking for an audience. It’s the distinctive things that makes The Simple Dollar stand out a bit, and I keep them in mind with everything that I do.

What do you have that’s distinctive? Don’t just look at your advantages – quite often, your disadvantages make you distinctive. I’ve seen the work of a blind painter. It’s stunning, but part of that overall picture comes from the disadvantage of the artist. Because he has overcome that disadvantage, it contributes something more to the finished product.

5. Create multiple revenue streams
Regardless of what you’re doing in life, there’s a big benefit to creating multiple income streams. Many people make their life more difficult by focusing only on one income stream – their primary job – and avoid creating more. Then, when that primary stream falls apart through a job loss, they’re in dire straits.

The solution is to find ways to create more than one revenue stream in your life. This requires some sort of investment on your part – money, time, energy, ideas, or some combination of them. The proceeds come in a fairly regular income. Sometimes, this income can be active (like a side business), which requires continuous work for more proceeds. At other times, it’s passive (like an investment), which does not require additional work.

This is going to be a significant theme of The Simple Dollar moving forward. As I write this, I’m working on developing a few additional income streams for the future, and I plan on writing about them once they’re in place.

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38 thoughts on “Some Thoughts on “How to Make Money in Six Easy Steps”

  1. I think your “special sauce” tastes much different to you than it does your frequent comment posters.

  2. You might want to add a few ingredients to your “special sauce” like – reading the comments and responding to readers question/requests for clarifictaion; doing research on a topic before posting; and prof reading your posts.

  3. I suggest you focus on improving your work at this blog, I’ve noticed a lot of slippage in the past few months. Make this blog good or great before you focus on developing other income streams.

  4. “You have to want to do the things you’re doing – and want to do them well.”

    Like, say, writing a blog?

  5. I can sort of see where this thread might be headed.

    With regard to your special sauce…

    Trent, I’m not even sure if you read the comments since you so rarely respond in the comments section…but if you do, this blog has gone a bit downhill.

    Yours was the first pf blog I found, and it was instrumental in me joining the blogging world and improving my own financial situation (this was back in ’07).

    Your tone has changed. There’s a distinct level of arrogance in many of your posts now, and it’s really off-putting. Take the post from the weekend, for example, where you slam a woman for not yet ‘arriving’ in her finances.

    I think your blog would do well for you to jump back into the comments section and show that you care about what your readers have to say.

    Also, a big slice of humble pie might be something to munch on. I hear they make vegan versions!

  6. @Kacie – I don’t know if this will get through, my last comment ended up in permanent moderation, but I am totally with you on those sentiments.

    That being said, however, I’m not sure I would want Trent back in the comment section. Anyone remember last time he tried to comment? You think he is arrogant in his posts, well, you should see when he writes off the cuff in the comments. He just doesn’t take criticism very well, which is probably why he stopped reading the comments.

    I would say the special sauce that keeps this blog afloat is: consistency, consistency, consistency.

  7. This is the only blog I read where the writer does not comment and it simply boggles my mind.

  8. Well, I for one, would be interested in the what Trent has to say about additional income streams he is working on. Some of these comments seem like duplicates from other postings. Why do people have to complain twice about the same issues? Someone even brought up the “swimsuit” controversy again. Enough already.

  9. I don’t mind that Trent doesn’t participate in the comment threads. As Des says, when he does, it usually doesn’t go well.

    When it’s just a difference of opinion, it’s probably best that Trent stay out of it completely. He’s entitled to his opinion on women’s swimwear, even if it doesn’t make any sense. What boggles my mind, though, is when Trent makes an egregious factual error, it’s pointed out by several commenters, and Trent simply lets it stand.

    For whatever reason, this blog gets noticed by some really high-profile people. You’ve got Mark Bittman linking to the post about oatmeal packets, for goodness sakes. The stuff I write for a living doesn’t get nearly this kind of readership. But we bend over backward to get our facts straight, and when we do make a mistake (hey, we’re human, and it happens), we run a correction. I just don’t understand how anyone could claim to be so passionate about being a writer of nonfiction, yet take so little pride in the “non” part.

  10. @#9 Johanna–

    YES! The errors really bug me. And the incorrect info in reader mailbags…yikes! It seems like there’s at least one bit of false or misleading info in each one.

    Factual errors really do need to be corrected with a note showing that it’s been edited.

  11. “Yep, I do writing drills pretty often.”

    They aren’t working.

    Your writing skills have not improved over the last few years; moreover, your tone has become increasingly self righteous and petulant.

    As for “compress this document as much as possible without losing any meaning,” how about: “abbreviate this document without changing its message.”

  12. I’ll pile on too – what Trent does that’s distinctive is allude vaguely to a hot topic and make minor to outrageous errors, which generate a lot of comments which ups his traffic.

    I don’t care whether he jumps in and comments, but it would be nice to occasionally see some reference to comments & how he stands corrected or gained some new insight from them as part of his ongoing self-education.

  13. I am glad to see that you will be tackling multiple income streams. I am reading “Making a Living Without a Job” by Barbara Winters and though I’m not far in yet, she talks about this, too, in the form of Multiple Profit Centers. I’ll be interested to hear what you get up to.

  14. What the heck? What is going on in these comments today? Is bashing Trent a new trend at TSD?

    I admit, I haven’t been reading this blog regularly for quite awhile, because I believe it’s stopped providing me the value that it used to. But…I don’t know where all this hate is coming from. It’s quite shocking, and unpleasant.

    Personally I thought this was a great blog post. I plan to save it as I try out a career in real estate investing next year.

    The article that inspired this post was very business-focused, so I found it a little inaccessible. I enjoyed this post much more.

  15. I did proofreading at one point, and the errors make it hard for me to follow the meaning of a post. I really would like to see corrections by Trent. One error that really bugged me, and caused me to doubt Trent’s fact checking was in a reader mailbag about taxes. The email mentioned tax day as April 18th 2011, and Trent’s reply stated it was April 15th. The reader was correct in this case, as the 15th is a DC holiday this year. Trent has many great ideas and posts. I hate to think that people will disregard the good stuff because of the errors.

  16. If you’re dissatisfied with the content, maybe if you ask nicely for a refund, Trent can give you back what you paid to read this post.

    (not saying he can’t improve, just saying…)

  17. Just as a backup to support my comment – which is in moderation, look at the last five posts.

    Some Thoughts on “How to Make Money in Six Easy Steps”

    Vague, some potentially good ideas but nothing is developed. Instead of two posts a day, spending time really focusing this post into a real article would be fantastic.

    Reader Mailbag: Presentation Video

    This is my favorite series and the reason I started coming to the blog … although it seriously is about the interesting answers in comments from other readers for me.

    Review: Enchantment

    I’ll be honest, I skim the book reviews.

    Walk the Walk Before You Talk the Talk

    Judgmental and absolutely UGLY. There is absolutely no empathy or understanding in this article and it displays and arrogance and condescending that is baffling from somebody who was once recently in the woman’s position. It was actually an interesting article, in that it revealed a lot, but not in a positive way.

    I Don’t Want to Be Your Client. I Don’t Want to Be Your Lender. I Want to Be Your Friend.

    This is another unpleasant article that was more rant than value. It also read like a failed exercise in generating social media traffic – I don’t know if that was the point, but that turned me off as much as the ranting.

  18. For me the irksome thing is the conflict between Trent claiming a “passion” for his writing, and then turning out sloppy columns with factual errors, prepositions at the end of sentences, inability to distinguish whether to use “I” or “me”, poor grammar, misspelled words, and things which are just plain incorrct. If you treat your passion with this distain, how can it be passion? Really, a bit of editing and spell checking would do wonders for these columns. On the other hand, Trent is cranking out money with poor quality writing. Perhaps it is sour grapes on the part of those who write well? Why should Trent bother to turn out professional work when he is paid equally for columns which are dashed off without spell check, fact checking or editing? You make your money and you move on to other interests.

  19. Trent, you would be well advised to read the comments of some of your readers. It is high time you stepped into the comments section and responded to some of these comments which raise serious concerns about your writing skills and the content of your posts.

  20. deRuiter, this is kind of nit-picky, but there’s actually nothing grammatically incorrect with ending a sentence with a preposition. The rule came about after the industrial revolution, when literacy began to trickle down to the common people. Various handbooks were published that sought to teach proper grammar to these formerly uneducated commoners, and, naturally, the publishers wanted to be able to boast that there book had the “most rules,” which led to the fabrication of some useless rules of grammar, such as the “don’t end with a preposition” rule. That particular rule is based on the logic that it’s grammatically impossible to end a sentence with a proposition in Latin, and therefore the same should be true for English. Never mind the fact that there’s no reason for English to derive all of its rules from Latin.

    The rule has been perpetuated by well-meaning English teachers throughout the ages. Unfortunately, the tradition has led to the baseless discrediting of otherwise fine writing (not necessarily saying that’s the case here). A similar remnant is the “double space after a period rule,” which serves no purpose in our world of word-processors and automatically adjusted fonts.

  21. I didn’t know that, Wes – very interesting.

    I think what bugs me most about the grammar-police comments is the implication that correct grammar is all it takes to be a good writer. Which it’s not, by a long shot.

  22. It may be interesting, but some of it is not entirely true; of course it is possible to end a sentence with a preposition in Latin (what it is not possible to do is split an infinitive).

  23. On the rule about ending a sentence with a preposition, here’s what Winston Churchill (arguably the supreme master of the English language since Shakespeare) had to say: “That is the sort of arrant pedantry up with which I will not put!”

  24. Skill building in the writing world means being able to take criticism and adjust your writing to your audience. Yeah, part of being able to develop as a writer is finding your own voice, but the overwhelming part of being a writer is finding a voice that people want to read. And these past few weeks, between “man-splaining” and going all “holier-than-thou” on people–not to mention that the last cooking post really did look like sheep’s vomit–have been quite depressing.

  25. I think he is throwing a little fit an punishing us for disagreeing with him. That’s probably why there was no post this am. We could always count on consistantly having two posts each day. Now that’s gone too. Guess that shows us who’s in charge.

  26. > Trent has many great ideas and posts. I hate
    > to think that people will disregard the good
    > stuff because of the errors.

    Yes, one can’t tell what the good stuff is when there are errors.

  27. Honestly, I couldn’t care less about grammatical errors that are minor. This is a blog. I don’t come here to have my mind blown by amazing writing. I come here for useful content. If the writing is top notch, that’s a bonus.

    I like a lot of Trent’s ideas, but here’s what bugs me. I don’t know if this was always the case and I didn’t know better, or if it’s actually getting worse – the factual inaccuracies. I know I’m probably above average in personal financial literacy, but it’s disconcerting that it does seem lately there are things just blatantly wrong in some of the mailbox responses. I’m not talking about differences in opinion wrong. I mean factually wrong, or a complete lack of effort to even explain why he’s recommending a choice. The most recent mailbox featured a comment about how it would be a good idea to convert to a Roth IRA as advice to one reader, and there’s absolutely no justification as to why. It’s just stated as matter of fact. There are instances where it’s debatable, and in those cases, I wouldn’t have an issue with Trent providing a different opinion than mine. But in that case of the mailbag, I just don’t see how it could possibly be considered a good idea. It drives me crazy because usually Trent is pretty darn pragmatic, which is how I am. But there’s this sheer blind faith he puts in Roth IRAs. I’ve seen numerous comments about it, and he never seems to peel the onion back any farther than he has on the subject, and even I know now that his view is overly simplistic.

    This is the same reason that Dave Ramsey bugs me – he has good ideas that work for many people on how to get out of debt, but he gives bad investment advice that is overly simplistic, and never improves on it, yet continues to give advice on that subject.

    I’d even be fine with it if he’d at least acknowledge this isn’t his strong suit, or would simply not give advice on those kinds of subjects he’s not as sharp on, or is unwilling to learn more about it, but over and over he tells people to invest in Roth’s or convert, even in blatant examples that I know that’s questionable advice.

    Some of the negative comments I’ve seen are to the point I’d consider them mean-spirited, and that’s not right. (That’s directed at you, Gretchen. Seriously, there’s nothing on this blog that’s bad writing. Average sometimes, or sub-par? Sure, it’s a BLOG! That’s like criticizing tweets for bad spelling. Bad?! Every single thing on this blog is readable. How about some perspective, please!) That doesn’t help anyone. And quite frankly, the “grammar police” critiques IMO come off as people trying to find anything to complain about.

    But I do feel that the sentiment that this blog isn’t the same quality as it once was is accurate to some degree. I’m just hoping Trent reads these comments and improves.

  28. Wes, as a practical matter what you said was fine. The custom in Latin was to end the vast majority of sentences with the main verb. Moreover, because Latin is an inflected language, it had far less use for prepositions than English does – the Romans used cases of nouns where we would use “of”, “by”, “to” and so forth.

    So, prepositions were limited in frequency and almost always directly preceded the nouns they modified; although you *could* end a sentence with a preposition, hardly anyone ever *did*.

    At least, not when they were writing. There is no particular reason to suppose that the Romans took any more care than anyone else to speak as they wrote (and not very many of them could write in the first place). So it is with English; whereas I would always write “the table at which I sat” because to my eyes (ears?) “the table I sat at” looks (sounds?) ugly, I would always say the latter and not the former.

    For this reason I do not mind in the least if anyone writes the latter; no doubt their aesthetics are different from mine, and no doubt their meaning is as clear if not clearer. One draws the line, perhaps, only at the apocryphal complaint of a child to her parent: “What did you bring a book I didn’t want to be read out of to up for?”

  29. Wow, you people need to get a life. If you don’t like Trent’s writing, go away. The funny thing is, the same “people” (probably one or two at most posting as different names) sit there and hit refresh waiting for Trent’s posts so they can be first in line.

    He’s got almost 90,000 subscribers and millions of page views a day. In the words of Steve Jobs to all the negative posters, “Do you create anything, or just criticize?”

  30. @Gretchen,
    Some do, but quite frankly I don’t care if they do or not. How passionate someone is about writing has absolutely nothing to do if something is written terribly or not. Terrible writing means completely incoherent, etc. You’re going out of your way to trash someone’s work.

    If you’re gonna be critical, at least be constructively critical.

    Even Pulitzer prize winning writers don’t even intend that everything they write is pure gold. I’m a IT Pro. I’m passionate in deploying rock solid networks. Does that mean that my home network is done as pristine as networks I deploy for customers?! Of course not! I never intended it to be.

    Please have some perspective – this is a blog! The very nature of a blog is more immediate, not as vetted by editors, etc. Why are you expecting articles the quality of something you’d find in New Yorker?

  31. i’m with Brian, comment #35.

    just. go. away. if you aren’t interested in reading the blog. such venom isn’t good for your health.

    i’d stopped reading comments here at TSD because they ARE so disapointing and rude. today tried again – thought some of you might have some interesting points to add to the discussion – how naive!

    only time i’ve encountered ruder responders – decided to see what comments followed a news story on yahoo. whew! those folks are even MORE ridiculous.

  32. Multiple revenue streams is a great source of economic security. I started my own consulting business several years ago, and feel much more secure than I ever did as an employee.

    We all probably know someone who’s been laid off, downsized, fired, etc., and when you lose your job, your world is in turmoil, and it’s extremely stressful.

    But by having multiple streams of revenue, such as many clients who regularly give you business, if any one client doesn’t have work for you, you’ll still be able to pay the bills by doing work for all your other clients. I’ve written about this idea a bit more on my blog (http://www.StartMyConsultingBusiness.com), where I talk more about the myth of job security.

    And if you think you need a giant emergency fund before starting a business, think again. Especially with a consulting business, it’s easy to become a consultant very inexpensively; you just need to know how to create and run your business successfully, like Trent mentioned in the post.

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