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Do You Need Money To Make Money?



I don’t know if it was the same thing for you, but where I grew up; there is an old saying about money: you need money to make money. Is it linked to the old Christian mentality that money is the root of all evil? Is it a simple way to explain one’s failure to make money because he doesn’t come from a rich family? I don’t quite understand the whole reasoning behind this line of thought. All I know is that it has always bothered me. It’s bothering me because I don’t come from a rich family. I wasn’t sponsored nor had a rich mentor when I was younger. And still, I hope to make a lot of money in my life. Unfortunately, I have found that this old saying is sometimes right…


At the Age of 26, I Wanted to Buy a Tim Horton’s


A few years ago, I was living in a small city in Montreal’s suburbs. This city was recently booming since there wasn’t much land available for new construction nearbyMontrealand one of the only spot remaining to buy a decent house at a fair price is where I used to live. It was a very nice city only 25 minutes away from downtown. The city is situated right beside 2 highways which makes it quite accessible. Near the highway exit going towards this city, there was commercial land for sale. The land was right on a corner and it was the first spot before entering the city (or last spot before leaving for the highway). I thought to myself: I should buy this land and build a Tim Horton’s. For US readers, Tim Horton’s is almost as popular as Starbucks in Canada. Mind you Starbucks coffee is a lot better than Tim’s! The place was perfect for a last stop for a coffee before hitting the road. It was also the right time as we were seeing new houses blooming all over the place.


Here’s the catch.


The land was $500K, the Tim Horton’s was another $500K and at 26 with barely 20K in my pocket… I was frustrated because I was convinced I had a great idea but was short on money. For me, it was obvious that we could make money from this commercial spot… but we needed money to make money. What was even more frustrating is that a year after I had my idea of buying the land to build a Tim Horton’s, someone else did buy the land… and did built a Timmy’s on it! I don’t have to tell you that this coffee shop is making a lot of money right now…


Where Do All Rich Guys Come From?


The reason why I never believed that you need money to make money is because I couldn’t understand where all the rich guys come from. I mean; it’s not the hen or the egg here; someone must make money first before having money. Therefore; this guy had to be poor first, and then make his millions. To the best of my knowledge, I’m not aware of an island where millionaires grow-up before entering the real world. For those who know Montreal, I know that there are a lot of them in the West Island but that’s another story ;-).


In my quest to understand how someone could become rich while others stay poor or in the middle class all his life, I’ve started asking questions. Since I have the opportunity to meet a lot of rich individuals in my day job, I was able to gather a lot of information. Their stories are exciting and very interesting. I’ve found out that most of them didn’t have money when they were young. In fact, you don’t need to make money; you need a big fat heart! A heart so big that it is never tired; a heart that is ready to hustle day and night. A heart that never sleeps, that is always thinking about a project. This is how you grow rich: hustle and passion (did I ever write that? 😉 ) .


I’ve Done it with my Online Company on a Smaller Scale


According to our evaluation, our online company is worth at least 200K. It is currently generating over $100,000 in gross revenue and roughly $40,000 in after tax income. At 5 times the net income, the classic valuation still makes sense. So I could have built a 200K company starting with nothing back in 2008? In 4 years, we have built a real company making real money. 4 years ago, we didn’t have an internet empire. In fact, our only web property was this blog and we were getting 300 visitors… a month! Now we have over 300,000 visitors/month! We are now able to buy sites that worth 10K, 20K, 30K, and more! At first, we could have never be able to find so much money. Someone who wants to enter the blog business today and buy a web property will find it very hard since interesting sites are being sold for over 10K. But if you have hustled with a passion, you can do it today!


The thing is that money is an exponential accelerator. When you have $100, you can’t do much. But when you work very hard and amass ten $100 to make $1,000, you can do a little bit more. Then, you can amass ten $1,000 and make $10,000. And after that, you amass 10 $10,000 to make $100,000… you get the picture to reach the million? ;-).


How $10 Becomes $100, Then $1,000 and $10,000+


When we started TFB, it literally cost us $10 ($9.95 for the domain).


After a year, we were able to amass all the $10 we could to build a few hundred. We reinvested those few hundreds to make a few thousands.


Those few thousands were used to buy Intelligent Speculator [1].


Then, after another year, we amassed all the thousands we could and leveraged to buy Gather Little By Little [2].


Within a year, we sold GLBLand used the money to buy Dividend Guy Blog [3] & Green Panda Treehouse [4] and we still had money left in the company.


We have continued the strategy of saving as much money as possible in the company to reinvest it while using leverage when it’s the right time. We are now gathering near $4,000 per month net of taxes. I guess that we will eventually talk about bigger numbers in a few years since the revenue seems to grow big time.


What I came to realize is that you don’t need money to make money. When you have money, it’s easier to make even more money. This is what the old saying should say!


Readers; do you think you need money to make money or you can start making your own today?

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17 Comments (Open | Close)

17 Comments To "Do You Need Money To Make Money?"

#1 Comment By MD On May 30, 2012 @ 9:36 am

The other thing that needs to be mentioned is that you build serious momentum when you make money. Both online and at my part-time job, things didn’t pick up until I got that initial bit of momentum on my side. Then I had proof that I was onto something. This instills a certain confidence into you.

#2 Comment By MyMoneyDesign On May 30, 2012 @ 10:57 am

I think it takes “other people’s money” to make money. Rich people become rich when they take out loans or get venture capitalists to invest, and then they follow through and create a valuable return for themselves and the group.

However, your story with website is also very inspiring. To grow a company of blogs generating $50K and then have the gull to re-invest it rather than cash-out shows an incredible passion for thriving in this business.

#3 Comment By Jacob @ iHeartBudgets On May 30, 2012 @ 12:31 pm

It’s so frustrating but it is definitely true. It reminds me of applying for a waiter position and they tell you that you need experience first. HOW DO YOU GET EXPERIENCE IF YOU CAN’T GET HIRED WITHOUT EXPERIENCE?! UGH! But money definitely has a snowball effect when you starting building wealth. Especially when investing, the power of compounding interest gives you a TON of momentum to build your pile of money bigger and bigger. I love reading how you came from a small beginning to build a small empire in just 4 years. Very motivating as I start my own online venture.

Also, just a quick correction, the Christian saying is “the LOVE of money is the root of all KINDS of evils.” Money is not evil, it’s the hearts of the people that misuse it that are evil 🙂

#4 Comment By Lance@MoneyLife&More On May 30, 2012 @ 8:13 pm

You don’t HAVE to have money to make money but it speeds things up for sure. I’m hoping my blog will be an example of that. It didn’t cost much to start up but costs a lot of time!

#5 Comment By Sunil l Entrepreneurship & Personal Finance On May 31, 2012 @ 10:00 am

in today’s age the need for money to make money is certainly less.

TFB, your company nets you 40k after tax, which means each partner takes 20k home?

not bad for a somewhat passive online empire that your VAs are mostly managing?

#6 Comment By The Financial Blogger On June 1, 2012 @ 4:52 am


We are currently reinvesting most of our 20K each into the company but yes, it’s quite profitable when you consider the number of hours required to get to this level. Thx to my VA!

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#9 Comment By Eddie On June 1, 2012 @ 11:50 am

At age 26 I wanted to sleep with Jen Aniston, however, almost 3 years later that hasn’t happened. You story with wanting to own “Tims” is similar due to similarity in chance of that happening. If we both had half a “mill” and borrowed another half, our dreams could come true.

Anyways, glad you made it elsewhere. Tims dream may be gone for now, but you’ve got your self a pretty lucrative business now, and who knows maybe one day you’ll retire off of Tim Horton’s.

#10 Comment By Broke Professionals On June 4, 2012 @ 12:42 pm

Your Tim Horton’s story reminds me of my husband’s desire to open a Quaker Steak (not State!) and Lube restaurant in our current town – it would totally thrive, but we don’t have anywhere close to the required $1 million liquid assets to open a franchise.

#11 Comment By Andy On June 5, 2012 @ 12:00 pm

Right time, right place, not enought money. You should have used leverage to buy the land. For 20K, you could get a loan for 500K, got someone to co-sign and been rich today. Anyway, your blog is a great success to congrats on that. For me, I am now in the process of selling mine, to move on to the next venture.

#12 Comment By The Financial Blogger On June 5, 2012 @ 12:04 pm

Hey Andy!

in Canada, you need a lot more than a small cash down to get such loan ;-). You actually need to have enough income to make the payment on a 500K loan (even on 30 years, this makes some big payments!). banks are more conservative…

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#15 Comment By Evan On June 7, 2012 @ 8:51 am

I like the change in the saying because while you got there it did take longer! A 40% profit margin is fantastic, but I am not sure how you are spending so much running the sites (but I have said that in the past)

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#17 Comment By Denise Gabbard On June 11, 2012 @ 1:11 am

Great post–and yes, as has been noted above, very motivating for those of us who are not quite there yet!
Thanks for the little push— okay, kick in the rear, that I needed.