Ever played magic the gathering? I only ask because some otherwise plebeian cards become very powerful when used with each other. It's colloquially called a "combo".

In basketball, there's a similar thing. Teams perform well and win a lot, even with less talented players - as long as their skills complement each other. Sometimes the reverse is true, talented teams underperform if the star players don't find a way to maximize each other's strengths. This time it's called chemistry.

In business, the same thing also exists.

Take the popular mixed-use real-estate developments here in the Philippines. The condominiums, office buildings and malls are conveniently just walking distance away from each other. And though it's advantageous to the residents/employees, it's even more advantageous to the business. Those developments are usually owned by the same corporation. Whatever you need or want, they'll gladly provide it for you; no need to pay a rival or some other third party.

In a similar vein a lot of big conglomerates (Ayala, SM, Aboitiz, etc.) own banks. So that if their other businesses ever need money for expansion, the profit is kept "in the family" so to speak.

This time, it's called synergy.

And it's a nice idea to ponder; something we might be able to do in our own day to day lives.

Take cellphones, for example. Millions of families have them, and usually there's one for each family member. If you're all using prepaid, it's not totally insane to consider being your own eload retailer.

Sure, you won't actually earn money by selling to your family members, but at the very least you save money. Those meager "profits" can just be rolled over to buy the next credits - effectively buying your load at a "discount" price. (Of course, this comes with the usual caveat of responsible use and that your family doesn't simply freeload off you.)

And if it so happens other people start buying from you too, then you may even end up making money, which is always good.

Another way is something probably a lot of people are trying or at least have heard of.

Do your shopping at the most reasonably priced grocery or dept store - using a credit card or debit card that offers rebates (or one that offers a reward/gift which is actually something you need). Couple this with a loyalty card for that store - and then either sell the reward/prize or wait until you can redeem something that you actually need.

Basically, you're trying to compound your savings

(Side topic: loyalty cards work well if you really shop at that store a lot. For example, I've never availed of loyalty cards for National Bookstore and Powerbooks. I did the math, and I wouldn't even earn back the membership fee before the card expired. Once my daughter starts going to school, that will most likely change.)

But if you want to make money, you' probably well-served by building complementary skills or assets.
Do you like following movie stars and the latest gossip? Or just the movies and tv shows? or myabe you like the latest gadgets? Or kikay items?

Even if you like nothing more than old books or weird news, then start something with that. A book club or a blog maybe. If you put in more time into it (which should be easy, becasue if done right, you actually chose one of your shobbies/stress relievers and not just the latest fad from your friends) it could turn out to be profitable.

An example: Some co-workers like to shop online because of the prices can be so much lower. They'd even check in periodically, just to see if there were great deals. They also happen to know other people who liked the same stuff. Eventually they started selling to their acquaintances.

Even if you don't sell to your friends, you can save on shipping costs by telling your friends and splitting it between you.

(Caveat: obviously shopping can be a money-drain; so do it responsibly.)

But probably the example I like best is one I read on a article (which in turn was based on advice from a reddit user): Invest where you spend your time.

Restrict your spending to where you spend most of your time. Life is full of conveniences and fears. Listening to all of them will drain your wallet, no matter how much is in it. Instead focus on where you spend most of your time (- and hopefully that's where you want to spend your time, otherwise that's a different problem altogether.)

If you travel a lot, focus on things that can help with fuel efficiency or lower transportation costs.

If you're always out shopping, then focus on comparing prices and quality. (and looking out for rebated and loyalty cards)

If you love and regularly drink coffee, then brew our own coffee. Buying a French Press, which according to investor juan is the best way to brew coffee, and is still much much cheaper than buying coffee from you-know-where

The thinking is that by doing so, the frivolous spending should fade away naturally - maybe even without that much effort. Even if your passion is expensive, you's still come out a winner if only because you're spending the same amount but are much happier.

If you liked this article, please subscribe to my feed, like me on Facebook, circle me on Google+, or follow me Twitter @thePFApprentice. It's free, you won't miss new articles, and you'll also get my free ebook: the Super Savings Guide.

Enter your email address for your free subscription

photo credit: l2k85 via photopin cc

No comments:

Post a Comment