Spend Money To Make Money

In any business you have to spend money to make money. This concept can apply to personal finance matters as well. Let me go through a few examples that illustrate this point.

Maintenance

Lets say your car starts making an odd rattling noise, is shaking more than usual or has a strong odor you don’t recognize. These three things can be symptoms of a minor issue. Yet if ignored it can lead to a greater more costly problem in the future.

If you do not address them immediately you are putting both you and your cars’ life at risk. You could be left stranded and in need of a tow. That small problem left unattended could damage your engine. A $150 repair job now can translate into a $300 repair job in the future if you’re not proactive about maintaining your vehicle.

This concept also applies to your home. It’s a great idea to do routine maintenance on your heating / cooling system, your swimming pool and the roof of your home to name a few. By spending money to keep your things in tiptop shape you may never have to replace them or do major repairs on them.

Selling Your Things

When you look around your house you may realize you have a lot of things, many of which you no longer need. Just because you don’t want them doesn’t mean other people don’t want them either? It’s possible that you could have hundreds of dollars worth of stuff you currently call “junk”.

So what should you do with all this stuff? Sell it of course. In order to sell your stuff you’ll need to invest some money first.

If you’re having a yard sale you might have to take a day off work or get some display tables. You can also rent some space at the flea market for the weekend. And if you want to sell your stuff on eBay be prepared to spend money on listing fees, closing fees and PayPal fees.

Fixer-Upper

Another example of needing to spend money to make money is by buying and then selling an old car or an old house. These two “hobbies” can be fun and financially rewarding as well.

If you know a bit about classic or antique cars you could scour the classifieds looking for a diamond in the rough. If you’re lucky you could land a classic car that needs some work. By investing your time and money into this project you could walk away with a very nice profit after it’s all said and done.

Likewise for a house, right now is the perfect time to purchase a rundown home if your financial situation is healthy. There are amazing dals on foreclosed homes that are currently priced way below market value. Sometimes, repairs and maintenance may not even need to be made. It would just be a matter if buying the house, waiting several years and then selling for a profit.

Anum

Anum Yoon is the founder and editor of Current on Currency. She loves all things personal finance, which is why you’ll find her work all over the PF blogosphere.

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