While on the Twitter the other day, I posted the following:
My favorite moment of the whole month is when I get rent money. Money for nothing should be my theme song.
(As an aside, if you’re not following me on Twitter, you should start. See what you’re missing out on?)
Two of my followers called me out on my comment, saying that they doubted my ability to get money for nothing. And you know what? They’re absolutely right.
There is no such thing as money for nothing. With my apologies to Dire Straits, money is only a tool of exchange. For someone to give money, something much be exchanged. Even if somebody gives money as a charitable act, there’s still an exchange there. The giver gets the feeling of satisfaction from giving money, for whatever the reason is.
So saying that there’s no such thing as money for nothing, there is such thing as money for very little. Here are a few examples:
Lending– Whether you’re a bank, credit card company or private lender, lending money can be a great money maker for very little work after initially setting up the loan. As long as there is ample security or a enough people repaying at a high interest rate, lending money is an almost guaranteed money maker.
Banking is obviously a great industry to be in, especially the Canadian mortgage lenders. There are lenders out there who exclusively do loans that are guaranteed by CMHC. So if the borrower defaults, CMHC foots any loss the lender may incur. Seems like a pretty good deal to me.
Dividends– Once you’ve done the research, there’s nothing left to do but to sit around and watch the dividend cheques roll in. If one owns a stock they should be doing continual research to make sure the business is still going in the right direction.
Bonds– As long as you’re happy with the interest rate and the term of the bond, as well as with the viability of the company, there’s nothing left for bondholders to do than sit back and cut their proverbial coupon.
Of course, there’s a problem with all those things. They all require various amounts of capital to do in a meaningful way. So to make money for close to nothing, you need money to begin with. It’s a great situation to get yourself in, that’s what we’re all working for.
In the meantime, I guess I’ll have to go back to work and get some more money in exchange for physical labor. I’ll see you guys at the next Dire Straits concert.