Making a $1 Million, 25 Cents at a Time Making a $1 Million, 25 Cents at a Time
Infomercials are famous for the “get rich quick” program that only costs $59.99. Why do these commercials exist in the first place? Somebody must be buying them or they would not spend the money producing these things. But is the “get rich quick” scheme really just a scam?
How Is Wealth Created?
Wealth is not made; it is acquired through the endeavors of family members. That is the easiest type of money to attain, and honestly, the least fun to maintain. The second is earned through hard work, talent, and a pinch of luck. The third, and least likely way to become wealthy, is to simply stumble upon it. We have read in the papers about the person who bought $2 in lotto tickets and won the jackpot. Poof! They instantly had $26 million. For most of us, inheriting wealth or winning the lotto simply is not an option.
Wealth Through Hard Work and Talent
Making $1 million 25¢ at a time is nothing new. It is a catch phrase often used by someone selling a gadget for 10¢. It leads to a larger context of wealth and business strategy that is often omitted. It is easier to convince 1,000 people to pay you $1, than it is one person to pay you $1,000. Many people make the mistake of pouring their energy into creating the “next biggest thing.” Yet that same amount of energy could have poured into making 1 efficient and small thing.
Large transactions are the least profitable way to make money. For example, think of a toy that sells for $100. Behind this toy is thousands – or even millions – of dollars wrapped up in research and development, marketing, sales strategy, and salaried workers.
On the other hand, consider a small plastic toy that costs 3¢ to make including production and marketing, and other costs. This small toy may sell for $1, and after subtracting 3¢ cents for the items mentioned, plus another 25¢ for shipping, the seller is making 72¢ per toy. As a percentage, this method offers a greater profit than the company selling their toy for $100.
People are conditioned to think big. Why bother with making 72¢ per transaction when they can make $100? For a number of reasons, the smaller transaction makes sense. It costs less to produce, which means less risk. The owner makes a larger profit (as a percentage) than the more expensive toy. Finally, he or she has an easier time selling 100 toys at $1 each than 1 toy at $100. In order to think “big” you have to think “small.”
You can attain wealth or financial security more easily with small bites. If you have worked in a business environment, you understand the largest accounts, biggest transactions, or most important projects take a lot of time to cultivate. These types of transactions take up valuable time and energy.
Picture a loan office trying to close a loan. He may focus on finding someone who wants a million dollar home, which means a nice commission check. He can spend hour after hour trying to entice this person. The time and effort, which are finite resources, are spent on the big fish, not the little ones. The most successful loan officers have dozens of transactions each month, but they are not the million dollar kind. They go fishing for smaller fish and earn more than their counterparts who troll for the trophy fish.
Becoming wealthy begins with perspective. If you are spending time and effort trying to sell the most expensive product or service, be prepared for trying times. Toyota sells less expensive cars than Rolls Royce, but which company has higher profits? Nike became a juggernaut by selling shoes, not booster engines for the space shuttle. These companies operate on the principle of making $1 million dollars, 25¢ at a time.