I have an Uncle, named Mike, he has a degree in computer engineering and he is very good with software engineering. In fact, I learn the basics of computer software development from him. He has taught in a few computer schools, lead the engineering teams in several start-ups with low pay, and now owns and runs his own start-up.
But despite having much software knowledge and being good at what he does practically, he is not doing well with his start-up, he is practically broke.
Now in his early fifties, he still struggles to pay his rent and give his two children a better education.
So why has this smart and experienced person ended up with no financial wealth?
Why will any person who is experienced in what he does get broke?
How on earth will a smart guy with a high-income skill have little to show for it?
In my Uncle Mike’s case, he simply lacks the knowledge of money.
YES
The knowledge of money and the Money Equation.
What is Money and What is the Money Equation?
Investopedia defines it as
Money is a medium of exchange; it allows people to obtain what they need to live.
If money allows people to get what they want or need to live, then how do you make money?
Simple,
You make money by selling something. Mostly what people want or need.
What you are selling can be physical products (electronics, cars, furniture, computers, etc), digital products (online courses, ebooks, photography, Web elements, etc), or services (web design, copywriting, plumbing, etc).
The amount of money you can make is determined by the price of what you are selling and the number of people you are selling to.
Revenue = Price x Number of customers
This means to have a high income at the end of each month, you either need to have product(s) of high value (e.g real estate, high-income skills) that you sell at a high price, or have a good number of people you sell to in a month.
Conclusion: Money is generated by selling something, which can either be a product or service. To make more money, you either need to increase your price or increase the number of people you are selling to.
