Came across an article on savings and compound interest. The author’s intent was to encourage savings by showing the power of compound interest.
The chart in the article showed how a $200/month investment at 3.5% would lead you to save $24,200 over ten years, and gain an extra $4853 in interest, for a total savings of $29,053.
Didn’t make me want to save any more.
How about this:
- Write a book
- Print 1000 copies for a total cost of about $5 bucks each. That includes cover design and layout and editing. And probably delivery to you.
- Sell 250 books at $20 to cover your costs
Note: Pretty much anyone can sell 200-500 books via their existing contacts. You can also give them away as gifts that have a much higher perceived value than the $5, especially if you sign and personalize them. If you give this $5 gift to friends and relatives in place of a $20 or $50 gift you would normally present, those are substantial savings.
After 250 books are gone and your production costs are covered, you will have 750 books with a cover value of $15,000. Even if you sell them in bulk at a 50% discount, that’s $7500 of product you can sell over the next few years. And you will have more than doubled your money.
Don’t want to spend that much money up front? Ok, put your book on Kindle and get it printed on demand via Createspace. (But get some help with cover, layout and editing!)
Spend a few bucks on a book marketing course or some book marketing books to accelerate sales. (Start at Kindlepreneur.com and also John Kremer’s 1001 Ways to Market Your Book)
If you have written in the non-fiction area, it’s easy to get speaking gigs which are effective avenues of selling your book and can in their own way be quite lucrative.
Now, I’m not against saving, especially as a Canadian with the TFSA option open to me.
But I also want to invest in something that will bring more than 3.5%.
Investing in yourself and building an asset apart from cash in the bank, which this case of writing and selling a book is only an example, is one of the best investments you can make.
I’ve done it twice and will do it again.
Because when you write and publish a book, not only are you generating money, you’re increasing your capacity to earn money.
P.S.: Before someone else says it, let me agree: It’s not either or- we must also save some money. But given the choice, I will invest it in something that both generates income and builds me up.