Ask HN: What is something surprising you learned about making money? - maximp
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arielweisberg
People will pay you wildly differing amounts for the same work.

People will lie to you about what you have to do to get paid more. They may
claim you are not good enough to try to con both you as an individual and
labor as a group into working for less. They can't hide from the invisible
hand. Look out for phrases like "next year", "next quarter", "maybe", "if", or
"try". These are synonyms for no and never. Those people are wasting your
time, and no they aren't entitled to your time.

Whatever you think someone is capable of paying it's usually more, but that is
not the same as them being willing to pay. You need to learn the levers. You
may need to maneuver into position years in advance. What you are doing now
leads to what happens next which leads to what happens after. You need to
create as much of your own luck as you can. Your time is valuable and
irreplaceable so put in the effort to make sure you are using it as best you
can.

There is a middle ground being making a lot of money and doing unpleasant work
and that middle ground is a lot of money and the more money you make the
better the work tends to be with one exception being the startup greenfield
project experience.

One way to make a lot of money is as an owner/founder of something. Risk
adjusted it's not all it's cracked up to be IMO. It's also the most work to
start. It's a lifestyle choice as much as anything.

------
bsvalley
When you make a lot of money you realize how crucial it is to learn how to
optimize your financial life. Unfortunately, a lot of rich people are rich
because they learned how to deal with “too much money” type of problems. I
don’t want to mention it here on HN, but setting up a smart tax strategy is
probably on top of the list. A lot of (not all) rich people get richer because
they endup paying less taxes. I’m not an advocate of that strategy but when
you face it in real life, there’s no more “rich people need to pay more
taxes”. It really hurts when you understand the potential of that big pile of
money you could invest in creating more jobs, innovation, etc. Again, I’m not
against paying taxes... just sharing a learning experience.

Also, donating money becomes natural when you get a lot of it. You become more
generous, which I thought would be the complete opposite. I guess if you
weren’t born rich, you’d most likely give back by becoming rich.

------
acconrad
There's always more to be made. Every time you think you're at a good rate or
salary, you'll find there's another bracket of people even higher than you.
It's a vicious cycle to get trapped into if you let it weigh you down.

If you try and be the best person you can, keep learning, and work on
yourself, it will unlock more for you _and_ you'll be happier than going down
the road of thoughts like "well if I make $X00,000, what do I need to do to be
making X+1 or X+1.5."

~~~
mping
I want to warn my fellow readers that this point, besides being absolutely
spot on, is insanely hard to do. The golden cage is real, at every level,
beginner to advanced.

Only when you say no to a better paying offer you can affirm that you learned
the lesson.

~~~
maximp
Could you expand on this? What is the golden cage?

~~~
mping
Golden cage, golden handcuffs means that you are a prisoner of your own
success - you earn alot of money (by some definition of "alot") and cannot
afford to leave for a lower paying job because of the upgraded lifestyle.

------
ourcat
It will not make you as happy as you thought in the long run.

Comfortable, maybe. But there's a depression that hits many people after their
'liquidity event' etc. For some it can remove their raison d'être.

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edent
There's a monetary cost to it. And it is often worth paying.

That is, a decent accountant will charge you money to make sure your taxes are
in order, that you're not claiming anything you're not entitled to, and that
your tax return is submitted on time.

I know so many people stressed out at the end of the tax year - whereas I
electronically submit all my receipts & invoices, and let someone else tell me
how much to pay in tax.

I always thought I'd rather save the money & spend the time doing that. Turns
out it is cheaper in the long run to pay someone who has skills that you
don't.

Another thing I once learned - it's OK to charge a "go away" rate. If I don't
want a client's business, I'll ask for double what I usually charge.

They either get to find a "bargain" elsewhere, or I get to reevaluate my day
rate!

Finally, almost no one will have an honest conversation with you about money.
Not industry peers, friends, or family. It is a touchy subject for many. Make
sure it isn't within your family.

------
revel
On the investing side, being excessively conservative with your money is often
worse than being too aggressive. By holding all your wealth in cash you're
trading an explicit set of risks for an invisible set. Holding lots of cash or
fixed income products is a huge mistake.

~~~
Rainymood
>By holding all your wealth in cash you're trading an explicit set of risks
for an invisible set.

I don't understand this sentiment, mind explaining?

~~~
tastyham
Keeping cash is a bet on inflation staying low, which is a very, very bad bet
historically.

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tonyedgecombe
The more people pay you the more they value your product/service.

The more people pay you the better they treat you, cheapskates are the worst
customers.

~~~
malux85
This - I got a lot better by dropping the lower 10% of customers who were
cheapskates and very demanding.

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dani_c
Surprisingly, you need money to make money. This I found quite true for many
of my past endeavours.

~~~
CamelCaseName
This is true, and not having cash flow that can support your growth can drive
you to insanity.

Dealing with this now and if I had two pieces of advice to give to
entrepreneurs, they would be:

Work in the field in which you want to build

Keep working while you build

------
bitL
Marketing (AKA hacking people) is the only thing that matters. You can
literally sell useless, low-quality stuff as premium if you master marketing
well.

~~~
vixen99
Yes but do you feel good about that?

~~~
nexus2045
We are talking about making money, not feeling good about your moral compass,
although that can always come later.

~~~
sharemywin
But, most of the time you make more with a win-win long term relationship.

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PappaPatat
That wages are basically "pay off" for the amount of abuse you're subject to.

That running your own business takes a lot of energy & involvement and is not
the route to make money easy.

That every raise / significant amount of money, inspires for about 3 months,
then it is the new normal.

That there will be people around you who do less and get paid more.

That budget is addictive and it hurts to shrink it.

That people who work for you or live with you, will not doubt that the money
flow is eternal and guarantied and take 0 measures to prepare for the day you
can not provide.

That it takes hard work & dedication to improve your income, and is freakishly
easy to sustain.

That there is one moment in time to do financial negotiations and that is
before the contract is signed, after that you will have to move to improve.

That when "the man" is hurting, employees instantly become assets that are let
go in the blink of an eye.

My initial projection to out perform my parents financial improvement compared
to their parents took rather drastic risks and I guesstimate my kids will have
a hard time to sustain that improvement.

Money does not make you happy, the lack of it makes you creative. What hurts
is having less then last year.

Income, costs & (net) results varies greatly per geographic area.

One man's fortune, is the other man's pocket money.

------
cdnsteve
You go chasing making it. Once you make it, what will you do with it? Do you
trust banks advisors who push you into bank based mutual funds with high fees
and low performance? Everyone chasing should take the time to learn more
themselves about managing and investing. Read books, open a direct trading
account and learn. No one will take more ownership of investing than yourself.

~~~
AznHisoka
How will opening a trading account and trading help me learn about investing?

~~~
mslate
How will going for a run teach you about running?

------
drinchev
I learned a lot about how you can fail to become rich by working, after I did
some digging into taxation in Germany [1].

The outcome is that you should not expect that working more will equal to
becoming rich.

1 : [http://www.drinchev.com/blog/germany-freelancing-and-
taxes/](http://www.drinchev.com/blog/germany-freelancing-and-taxes/)

------
chrisbennet
If you give clients a low introductory rate, when you raise your rate to
“normal” they will feel ripped off instead of grateful that you previously
gave them a deal. Example: charging a startup 50% of normal “until they get an
investor”.

Either charge your full rate or zero.

------
douglaswlance
Don't sell your time. Instead, generate value.

~~~
mancerayder
That sounds like a kernel of something profound, but leaves one hanging. Can
you elaborate?

~~~
sp527
He probably means a lot of things, but close to the top might be "bill for the
project instead of time spent".

If you bill by units of time, you will like under-exploit the information and
skill asymmetry between yourself and the client, and leave a lot of money on
the table.

You should instead price as a meaningful fraction of the value you're
creating. You may not know that number, but the client will more or less
signal it to you in negotiations if you're canny. Something that's relatively
easy for you to do (that might take a month, for example) could generate
millions in revenue for the client. You're entitled to a large chunk of that.

It's in fact this approach that can make consulting extremely lucrative:
someone has already gone through the work of acquiring leverage by building a
business and you're coming in with the rocket fuel. You arguably should never
take a contract where this isn't clearly the case, since committing to a
project has an opportunity cost in your own time.

~~~
LyndsySimon
“Entitled” may not be the right word, but I agree with this.

There’s a huge difference between someone able to build what a business needs
and someone who understands the business’s needs and can work hand-in-hand
with them to explore their needs and optimize to that. It’s very much worth
the difference in cost to the business.

~~~
sp527
You're right that "entitled" is a bit strong and it was quite perceptive of
you to point that out. That word choice was born out of my personal
frustration at how many developers either get shorted in negotiations or never
even understand how much value they could capture for their work. It is in
some ways highly exploitative, in my opinion.

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tim333
That an awful lot of wealth changes are through real estate not enterprise. I
was in Delhi back when almost everyone was poor and now loads of them are
millionaires and it's mostly through having owned land or properties.
Similarly in many other places. In London where I'm from also there are
probably 10x people who are millionaires through owning a house or two over
owning businesses.

------
ydnaclementine
On a personal level, being smart about saving money is a great way to build
wealth, irregardless of your yearly pay

see: Millionaire Next Door

~~~
m0rose
Agreed. Also see:
[https://www.mrmoneymustache.com/](https://www.mrmoneymustache.com/)

------
vpdn
Generally companies do not decide against a product due to the price tag.
There's always another, stronger reason.

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DougN7
B2B transactions are not nearly as price sensitive as B2C transactions,
because the business people aren’t spending their own money (unless you’re
selling to an owner). This was a revelation to me when I figured it out.

~~~
eb0la
Also for B2B the end of the year makes people _less_ price sensitive because
if they will loose the money if they don't spend it.

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cm2012
The people and companies that have money have soo much money to spend.

------
antman1911
One of the most powerful forces is compounding interest.

~~~
mythrwy
Yes, and what many people forget is that the same rule applies in reverse.

~~~
ropeadopepope
Could you elaborate on that?

~~~
maximp
I imagine he means interest on debt.

