Has someone ever said to you … if you work you will make money?  I can tell you it’s not true.  Yeah I know… just about everyone you know works to earn money.  In reality, they are not working in exchange for money, they are offering a service that is of a certain value.  That value is perceived.  The work you do is paid in arrears.  Hence, the money you make is a value exchange.  Now I promise you this: work for the rest of your life and see if you ‘make’ money.  I guarantee you won’t.  You will exchange your life for perceived value.  Here’s an experiment. Look at the value inherent in something popular and ask yourself… did they work any harder than you did?  I know people who are chefs that worked very hard but are no Gordon Ramsey.  Yet I have heard it said… if you want something you have to work for it.  True enough I suppose.  I think such a sentiment would be better expressed as: Whatever you want will require work but don’t fall into the trap of working and not building or growing.  If you want to make money you need a system that generates it while it provides ‘value’ to people’s lives.   That value will be exchanged for money … over and over and over again.

When you exchange something of value for something else of value that’s a ‘value’ exchange.  When you go to work you are trading your time, energy, creativity and personality for money.  Ask yourself this question: what could I do to exchange what I know now for more money?  What value could I add to someone’s life through what I know?  If you can answer these questions then you already know you don’t work to make money… you make money by exchanging value for value.  Think about it!  It’s not about hard work … it’s about smart work.  Creating value propositions for exchange is how you ‘make’ money.  It’s how your boss makes money from you and how you make money for someone else.   Think about what you can do to create your own value proposition.

I subscribe to [tag]problogger[/tag], like I imagine most bloggers do, and I came across this article this morning about full time blogging being a process.  In the article it referenced (I am academic what can I say) the article from Get Rich Slowly about finding the guts to follow your dreams.  Now, I am reading the E-Myth Revisted by Michael Gerber at the moment and I think he would have something to say about becoming a ‘full time blogger’.  Gerber identifies three roles of the business person:  The Entrepreneur (visionary), The Manager and The technician.  The manager runs the business whilst the Entrepreneur focuses on it’s creative growth when the technician is performing the duties required to get the work done.   A friend of mine says it this way.  There is the pioneer who blazes the trail and then there’s other people who support that work by being ‘administrators’ and keeping the work going.

One of the great revelations for me in reading the E-Myth was the realisation that it’s okay to be an entrepreneur.   I am totally the person who see’s the vision and knows what needs to be done and so forth.  I am a very bad manager however and an even worse technician.  If you are like that, then you will find management work to be boring, heart wrenching and difficult to do.    Judging by experience so far and what I read in the blogosphere, full time blogging really is not an entrepreneurial pursuit.  It’s another job.   So what’s the difference?

Work versus Entrepreneurship

Work is routine ‘technican’ work.  Blogging, even though it’s a creative pursuit is largely work.  Why?  There is a creative marketing element for sure.  You have to write articles that attract visitors, put advertising in sidebars and in posts and so on.   Blogging is a ‘technical’ skill that you become good at like most forms of writing over time.  Say my dream is to be a fireman and my friends dream is to be a blogger.  As a blogger he is self-employed and most people would say ‘entrepreneur’.  I would say my blogger friend is just using his skill to make money the same way as a fireman does.  There is no difference.  Two technicians in different application fields.

Entrepreneurship is based on creativity and growth work isn’t

Now you will use your creative abilities in your job as a fireman, for example but this does not mean you are reinventing the practice of fire fighting.  The fire fighter who reinvents and continually improves firefighting is the entrepreneurial fire fighter.  The blogger who reinvents the job of blogging continually to find new streams of income is an entrepreneurial blogger.   Why?  Entrepreneurship is not simply going out on your own and making a new business.  There is a pioneering element to entrepreneurship where a vision for something is put together.   I meet people who I would consider to be entrepreneurial academics.  These are people reinventing things and using creativity and vision to bring forth pioneering change into their lives.  Clearly, blogging can be entrepreneurial but in most cases this isn’t so.

What makes me realise this is just how hard it appears to be to make a living as a blogger.   Some people I have read about find it very difficult and metaphors are drawn between blogging and hand to hand combat.   A case in point is the Problogger versus Shoemoney interview.  Have a look at the amount of time Darren Rowse puts into blogging!  That’s a full time job.  Two hours of writing versus how many hours of routine, technican like work?  I rest my case.   Work is hard, routine and after all BORING to the entrepreneur.  I therefore submit that whilst blogging can be entrepreneurial, it most cases it’s just another type of job.

In a previous article I discussed the fundamentals of hardcore [tag]budgeting[/tag]. Like I always say it’s not good enough to show me the what, I need the how. So this post is dedicated to showing you how to save [tag]money[/tag] with a [tag]budget[/tag]. How you save money is by watching it as it comes in and making sure you don’t spend it as it goes out. Now, I love money because it helps me to live a secure life and to enjoy some of the things this world has to offer. It does not mean that I have to live the life of a millionaire but it does mean that I can be happy with what I have because I know how to look after it. What I am going to talk about here is not hard. You can do it. So how does it work?

What comes in…

You are paid money for working or if you are smart enough you have a system for making money. These are the only two ways I know to make money. You either work for it or it works for you. Peter Spann calls this leverage in his excellent book on finance which you can read more about here. However you do it, you have a certain amount of it coming in which we will speculate as $500 a week for now.

Gets processed…

That $500 gets processed by you to spend on your needs, wants or desires. Money is a system… an economic one at that. Ok, so this is very obvious stuff isn’t it? However, most people don’t get it. Money comes in and goes out and inbetween that is the bills. This process involves the money being extracted from your account and given to the man.

Must go out

The input (your money) gets processed (given to the man) leaving you with an output (not for most of us). That’s the rub of it right there. Now to make this easier to understand I have some pictures. The following example is a weekly budget.

In this example which you can download here you can see the inputs, the processing and the output of your budget. So as you can see it’s a matter of dividing the numbers into the right categories. Now, if you can do that and you are left with $0 that means you have a tight (not fun) but good budget. You are saving a little bit each week.

What about my personal goals?

You can work this out simply by working out how much you save each by dividing your savings by the cost of the item you wish to purchase. The resulting number will tell you how many weeks you have to save for to get said item. See below:

This, of course, assumes that everything stays put until disasters come. However, if you stick to it you will have money for car disasters, and you will have savings to draw from. To put hardcore budgeting to work you need a follow this kind of thinking right through. You can save money by consistently putting it away (when you can) and making incremental progress. The key is to find things to do with not much money and I will be posting on that this week… so stay TUNED!