Did you know there is a difference between making money and earning money? Yep, although the terms are usually used interchangeably, there is a difference. Most of us spend our lives earning money and may never find ourselves making money. Some of us start out earning money, then use the money we earn to make money. Then there are the select few who never earned a drop of money a single day of their lives and only know how to make money.
The difference between making money and earning money is we trade our time for money when we make money, and making money provides an avenue for us to get our time back.
What Does It Mean To Earn Money?
When we go to work, we want to be compensated for what we’ve done. That’s because before starting work, there are terms, a barter of such, that both parties agreed to. You agree to do a certain job or perform a service in exchange for payment. A price was put on that service. That is how the majority of people are accustomed to working. Earning money is a result of exchanging your time for cash, payment, or a paycheck. If you don’t do the work, you don’t get paid. Once the work stops, the money stops coming in.
What Does It Mean To Make Money
This is different from earning money because, as some say, you can make money in your sleep. If you’re sleeping while you’re earning money, that means you’re ripping someone off. Making money is the process of using your gifts and talents to create or product or service that continues to make money for you. It’s not a one-time payment. Examples of this are authors who write books, creatives who create courses and sell them online. It could also include income from creative work that warrants licensing, copyrighting, or patents like music, art, and inventions, and other efforts like dividends from investments, advertising, rental property, or a business that generates consistent revenue.
When you create something that people need or want, you have provided an avenue to make money. When people can access your services or product any time they want, regardless of the time, yep, you can even make money in your sleep.
Why Is It Important To Know the Difference?
When you earn money, you’re dependent on someone else to pay you. You’re expected to deliver on their terms. How much you earn is limited to how much the person is willing to pay you. In essence, they are in control of your earnings.
Knowing that you can make money without always having to put the work in, because the work has already been done on the front end, gives you your time back. It opens up time freedom to allow you to do other things. That makes for more of a balanced life, rather than having to work the majority of 24 hours. It also provides you with a way to have as much money as you want. It puts you in the driver’s seat to control how much money you have. Rather than someone else telling you how much you’re worth, you’ve already decided your worth and live more freely.
The reason it's important to know the difference between the two is because if you want to acquire financial independence and time freedom, you need to know how to make money rather than earn it. Outside of that, it may not be important to know the difference at all.
Hope this was helpful to you.