Knowledge is Money – It Takes Knowledge, Not Money, to Make Money

Does it really take money to make money? The answer is no, it takes knowledge. Knowledge is money. We are so accustomed to the idea that it takes money to make money that it may be difficult to realize that this common saying is false.

If we allow ourselves to think through this we will discover that knowledge is the ultimate asset, when it comes to making money. Nothing else on the planet comes close to knowledge in its capacity to make money.

The idea that it takes money to make money is false and restrictive. It is a poor person’s way of thinking. Such thinking must not be allowed to infect our minds. I say take all my money away and give me knowledge, for knowledge is the ultimate asset when it comes to money.

In this article:

• The rich get richer and the poor get poorer.
• Important differences between the average American and the rich American.
• Searching for Financial Independence
• It doesn’t take money to make money – knowledge makes money.
• How exactly does knowledge make money?
• How-can-I-Gain-the-Necessary-Knowledge-to-Make-Money?
• Start making money
• Conclusion – Knowledge is Money

The Rich Get Richer Because of Knowledge

Unfortunately we live in a time and age where the rich get richer and the poor get poorer. And this situation is compounded by the lack of financial knowledge (financial literacy).

The reality is that the rich generally have better opportunities when it comes to knowledge. If nothing else, they don’t have to worry about having to put food on the table or paying the electric bill. Arguably this frees them up to pursue knowledge.

On the other hand, the average American is at a disadvantage when it comes to knowledge, as he/she works an entire lifetime only to retire with little money. This lack of financial knowledge often applies to those with a college degree and with a good paying job. In fact, many people making six figures are scrambling to make ends meet. (See Why Upper-Middle Earners Are Living Paycheck to Paycheck).

However, these challenges don’t have to define you. We all have access to knowledge. The simple fact that you are reading this article is an indication that you are keenly aware that there is a better way. 

Those Who Own Property Are Rich

One of the interesting things about rich people is that they understand property ownership can be a great way to create wealth. The next time you are driving in an urban area, notice all the office spaces, stores, gas stations, apartment complexes, laundromats, etc.  In addition consider how the people that own those properties and businesses are creating wealth. What’s more, in most cases these individuals are increasing their wealth with minimal effort.

The people that own those properties and those businesses are rich.  Not surprisingly, rich people own the property and business that surround us.  These business owners earn money in their sleep, which is one of the keys to financial success.  Many of these individuals can travel abroad and have fun while still earning money.

Wouldn’t you like to be able to do the same?  Remember, you don’t need money to make money – knowledge is money. And therefore, you too can own these buildings and websites.

Important Differences between the Average American and the Rich American

As we study the subject of knowledge, let’s consider some of the differences between the average American and the rich American.  Below are some differences worth exploring, from the book “The Top 10 Distinctions between Millionaires and the Middle Class”

Searching for Financial Independence

To be clear, the goal shouldn’t really be to be rich. Instead, the goal should be to be able to live the kind of life that comes from being financially free.  This could mean being free from a mortgage payment and being free from debt. It could also mean being free from the worries of retirement and medical expenses. And it could mean being free to send your kids to whatever college or university you wish, being free to travel, being free to give generously, etc. 

If you are like most people, your income derives from earned wages. In other words, your income comes from a regular paycheck. If this is your situation, then financial independence may seem a little distant today. However, with a little financial knowledge, financial independence should be a very attainable goal. After all, knowledge is money.

In fact, chances are all you need to do on your journey to be rich is to take a few small steps in the right direction.  A few small steps today may give you the momentum to own some of those properties and/or businesses that will lead you to financial independence. 

I realize the first thought when it comes to owning a business and/or investment properties is ‘where do I get the money from’?

It is true that many rich people are rich because they inherited wealth. However, many rich people are simply money smart. They understand that knowledge is money and therefore they pursue knowledge.

According to a Market Insights Report for 2019 there are now over 12 million US households with a net worth of more than $1 million.  Even more striking, in 2018 there were 250,000 new millionaires. 

Without a doubt, at least some of these new millionaires started with little. However they did have a keenness, a knowledge, for money and finances. This knowledge is something we can all gain and cultivate. 

It Doesn’t Take Money to Make Money – Knowledge is Money!

Such keenness or knowledge is far more valuable than any amount of wealth. Investing in financial knowledge is the best investment a person can make. In fact, you could strip away all other assets and possessions from a financially keen person, and it wouldn’t take long for that person to acquire wealth and return to financial independence. 

Knowledge is the only investment I would guarantee can lead you to financial success and financial freedom. The best part is you can start gaining knowledge today!

How Exactly Does Knowledge Make Money?

Lets make one thing clear; If you have some financial knowledge, you would already have some money saved up to invest, or you would be already investing. But for now, let’s assume that’s not the case.

There are three main ways in which you can leverage knowledge to make money. Author Garrett Gunderson goes into more detail in the video below, but these are:

• Utilizing Crowd Funding
• Utilizing Your Ideas
• Through Networking

Utilizing Crowdfunding

According to Wikipedia, crowdfunding is the practice of funding a project or venture by raising small amounts of money from a large number of people, typically via the Internet. Crowdfunding is a form of crowdsourcing and alternative finance.

The assumption here is that you lead on a deal or a business idea and have the knowledge to make this business succeed, but you lack money. In the past, you would have to go to a lender to pitch your idea to get a loan.

Now days, many entrepreneurs with little or no money, but with knowledge, are using companies like Kickstarter or Gofundme to raise capital for investment opportunities. The website crowdfunding.com provides a way to compare crowdfunding sites.

Utilizing Your Ideas

Likewise, never forget that if you have knowledge people will be happy to pay you or partner with you. Put it this way, if you came to me with an invention, and idea, or a great deal I’d want to partner with you, even if you have no money. And just like me, there are plenty of investors out there willing to do the same.

Last year I read a book called One Simple Idea by Stephen Key. This book is really about making money from inventions. And yes, even patents cost money. Nevertheless, a good idea can really open up doors for entrepreneurs.

The key is to exercise your creative thinking and then leverage that knowledge.

Through Networking

As for networking, consider this example; I recently found an RV park for sale that has a lot of potential. When I was discussing this deal with the seller I realized I didn’t want to buy this property, but offered the seller to help him find a buyer. Without me asking, the seller pretty much offered a finders fee.

I didn’t take him up on the finder’s fee, because what I really wanted to do was to build relationships with sellers like him and with potential buyers. These relationships would be more important to me than the money he would pay me to find him a buyer.

I ended up writing an article for this property. The article is titled RV Park For Sale By Owner In Arizona. This article is one of the most visited articles in this website. This has helped me stay in touch with the seller and has opened up an opportunity for me to connect with other investors. Now, this is an example of leveraging knowledge to build relationships.

Putting it all Together

Have you considered that as the baby boomer generation retires there are a lot of property and business owners looking to cash out? There are cash flow investment deals out there where the owners want out of the business and are willing to sell their business with seller financing and sometimes with zero money down .

These sellers want the assurance that the buyer has the knowledge and ability to keep the business making money. These deals are not necessarily easy to find, but you can use creative thinking to find them. Then you can use crowd funding or your relationships to fund them.

In some cases, these business owners are even willing to train a new owner. How amazing is that?

Obviously, having some money saved up will open up many more opportunities. Also, keep in mind that with financing (seller financing or bank financing) you can leverage a small down payment into a big purchase. See how I bought a 36 space mobile home park with $36K out of pocket.

How can I Gain the Necessary Knowledge to Make Money?

If you want to gain the necessary knowledge to make money, you must invest your precious time to make this happen. Most people think education ends after they finish high school or college. Therefore, most people fall into the trap of thinking a paycheck is good enough. And instead of continuing to pursue an education they spend their valuable time watching television, playing videogames, etc.

Here are 3 things you can do to gain financial knowledge

1. Read and listen to podcasts
2. Network with knowledgeable individuals
3. Put your learning into practice

Start Making Money

Now that we are aware that knowledge is money, the next thing is to start taking action. Too many people gain knowledge without putting what they are learning into action.

You’ll learn more when you put what you are learning into practice. And this is exactly the part where you can see how knowledge is money. This is where you begin to see opportunities and appreciate the value of these opportunities.

In short, the way to begin achieving financial success through knowledge and action can be summarized in these three main steps:

1) Learn how to evaluate investment opportunities

• Determining the value of a given asset,
• Understanding the income and expense sides of cash producing assets, 
• Understanding Capitalization rates, return on cash, etc., and
• Financing – traditional lending, owner financing, and all other forms an investor can utilize to acquire assets.     

2) Save and put your money to work

• Tackling bad debt (credit cards, car loans, etc),
• Start saving, 
• Protect your current income source (protect your job),
• Find ways to earn extra money,
• Start investing,
• Don’t risk your hard earned money,
• Invest your money, and
• Protect and multiply your money. 

3) Investing in cash producing assets. 

• Continue applying what you have learned,
• Tap into the money you have saved, and
• Leverage your capital – utilize what you have learned about financing

Once you have this kind of knowledge, and the drive to take the necessary steps, financial success will be almost inevitable. Yes, you will have setbacks. However, every setback is a learning opportunity. You will also need to work hard. However, keep in mind the journey gets easier and easier as you strive for success.

Conclusion – Knowledge Is Money

By now, hopefully you agree it doesn’t take money to make money – knowledge is money. Maybe you can now explore new ideas. Perhaps your existing home could become your first rental.

My desire is to help those that are interested in gaining financial knowledge and financial independence. As we move forward, I’ll expand more on the subjects mentioned in this article. I will also do my best to keep things simple and easy to understand.

In addition, I will strive to point out other resources for those that are hungry to learn more and dive deeper into each subject.  For example, a small book I’d like to recommend is “The Top 10 Distinctions between Millionaires and the Middle Class,” by Keith Cameron Smith. 

Please drop me a note and let me know what other areas of business and finance you’d like to explore. Then, I’ll write more about your suggested topics as we pursue knowledge, financial success, and financial independence together. In addition, you can also follow me in twitter at @Cash_Keen