If You Have to Spend Money to Make Money Is It a Scam?

Is it though? I used to think so.

Photo by Sharon McCutcheon on Unsplash

I just heard someone say, “If you have to spend money to make money, run the other way. It’s a scam.”

The more I think about it, the more I think it’s a very employee versus entrepreneur kind of mindset.

Previously, working as a civil engineer, I would have agreed with the above statement. I wouldn’t have even questioned it. Currently, working as an entrepreneur, I disagree completely. Everything we do for a business involves some type of investment for a return profit or a return on our investment.

It’s a bit of the scarcity mentality versus the abundance mentality. There is not enough for everyone versus there is enough for everyone.

Caroline Castrillon, Forbes, notes, “Most people, particularly in the corporate world, have been conditioned to have a scarcity mentality.”

Unfortunately in our society, the only scam is making money without any sort of investment. Even the lottery requires purchasing a ticket or having a relationship with someone that would give you a ticket on your birthday.

The currency you’re investing might not always be money, but you are investing something.

Here are a few ways you might be investing to make money.

Professional Job/Career

• Time (pre-profession): College, internships, co-ops, resume writing, interviews, and job hunting.
• Time (Profession): Working 9–5 (or 7–6, whatever it might be), networking, continuing education/training, holiday parties, and ruminating on work after work.
• Pre-Profession Money: College. The average cost for a 4-year degree ranges from about $103,000 to $215,000, based on data provided by educationdata.org.
• Profession Money: Wardrobe, continuing education, home office supplies, commute, residence location, and networking.
• Freedom: Don’t plan on being anywhere other than your desk from 9a-5p (or 7a-6p). Forget about taking that vacation when you want or for as long as you want.
• Mental health: Thinking about work after work, stress, stereotyped biases, and pressure.
• Physical health: Skipping lunch because you don’t have time. Skipping the gym because you don’t have time, but hitting up the happy hour.
• Interests: Do you spend more time at your job or with your hobbies, family, or passions? Likely more time at your job, so you’re investing time in the interest of your job over your passions.

Side Hustle (such as RideShare, Grocery Delivery, or Take-out Delivery)

• Time: You might be able to listen to a podcast, but you still have to spend time in your car or on your bike.
• Money: Gas, repairs, insurance, license, registration, and loan payment.
• Health: Unless you’re eating healthy and exercising to offset the sitting, it might be taking a toll.

Home Rental (short & long-term)

• Time: Maintenance, cleanliness, and readiness.
• Money: Maintenance, cleanliness, readiness, loan, insurance, permits/license, and investment.
• Personal Property: The physical space.

Selling a product (such as skin care products, weight loss supplements/regiment, or essential oils)

• Time: Marketing, networking, demonstrating, and testing the product.
• Money: The initial investment in the product, plus monthly investments thereafter in the product. Training and education on sales & marketing. Advertising, website development, and internet costs.

The next time someone tells you spending money to make money is a scam, they likely don’t know what they’re investing in their own job or business.

It might not always be money, but you are investing some form of currency in everything you do.