The Fallacy of Spending Money to Make Money for Authors

by janbking on August 18, 2010

You hear this everywhere – “you’ve got to spend money to make money.”

So common this seems to be to the new mantra of the new economy that we’ve each individually got to determine when and if this is true. When is it worth spending? When you can prove on paper that the investment will pay off in a given period of time you can live with.

Our economy did not use to be based on credit, certainly not at a personal level, but on savings. We used to, as a group, save between 6% and 9% of our income and only when we had enough savings did we buy what we needed.

You would have borrowed money for the purchase of a house or a car, but otherwise you bought what you could pay for.

Sounds like a very old-fashioned notion. But thankfully we are coming back to this as individuals have no choice. Of course we are glad there is a safety net for those faced by catastrophic circumstances.

Dad went to work for a paycheck, entrepreneurs started businesses and this was a formula that worked because we got paid for what we did. Our skills and talents and experience dictated what that was. Moms went back to school and sometimes got whatever job could be found. We all worked long and hard and didn’t consider doing much complaining, even if we didn’t get paid as much as we would have liked.

The concern I see about “investing” right now is two-fold. I have seen authors pay for radio shows. With rare exception, this is a vanity project and only makes money for the people selling the time.

We also pay to attend seminars where the “experts” pitch us with buying more stuff. You might pay $900 for the day, just for the privilege of meeting people we can then spend another $3K for individual or group consulting.

I’ve also seen people pay a lot of money for book advertising – a complete waste of money.

Yes, you might have to spend money to make money, but there are no quick fixes, nothing for nothing and no amount of work you can bill for if you let others dictate what you spend money on.

You don’t need to spend money on community, media understanding and connections (create your own) and the number one thing you have no one else does? Author passion combined with your ability to pick up the telephone and send email.

I am extremely optimistic about the economy and the individual actions of small businesses. You will make the right decisions for you. Invest carefully. Pay for things you can use to leverage your time. Know how exactly you will use what you are getting to make money.

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