Want to Make More Money? Understand the Multiplying Effect.

How much money do you want to make every year? If you haven’t seriously asked yourself that, you should. Why wouldn’t you? It’s a very easy question to answer. And until you’ve really thought about it, it’s impossible to determine how you’re going to get there.

When I was in my early twenties, my father sat me down and asked me that same question, point blank. The advice he gave me after fundamentally changed the way I thought about work and led me to my current career.

I told him I wanted to make $100,000 a year. At the time, I thought that was a lot of money. You’ll work for about another 30 years, he told me. So how much money would I make in my lifetime? I did the math: $3 million.

He asked, was I happy with that amount? If I wasn’t, what was I going to do about it?

My father was a smart man. Three million didn’t seem like a lot of money over 30 years, given taxes and living expenses. The math didn’t add up: Life is short, and it didn’t seem like enough for a lifetime of work. When I looked at the last paycheck I had received, I wasn’t happy.

My father told me the only way to create wealth was to find a business opportunity that had a multiplying effect and that didn’t require my presence. It took me some time to figure out what that meant. The latter part was easy enough. He explained, “A doctor can only help so many people in a day and in a year. A lawyer can only try so many cases.” To create great wealth, I needed to find something that didn’t require my hands or my presence. Fair enough.

The second was trickier: What did having a multiplying effect mean? He told me that I needed to piggyback on or create something that would be used over and over again -- that people never stopped needing. In other words, he explained to me the idea of collecting a royalty. That made sense to me. And it’s what spurred me to start licensing my ideas.

Today, there are many examples of businesses that share these qualities. App developers, for one. Franchises are another. And of course, there are countless examples of more traditional methods, like the stock market, bonds and real estate. 

For me, the concept of the multiplying effect was tremendously attractive. Some people derive pleasure and contentment from being masters of their craft, from working day in and day out with their hands. That’s not me. I wanted to make money and I wanted to be able to do new things, to constantly challenge myself in new ways.

How much money do you want to make? How are you going to make it? Finding my multiplying effect -- writing a book, offering a course and licensing my ideas -- has allowed me to live where I want, have people working for me elsewhere and be my own boss. It is incredibly freeing. It works for me.

I’m not saying it’s for everyone. But I want you to critically ask yourself how much you want to make. And do the math.

5 Clever Ways to Trick Yourself Into Saving More Money

The savings rate in America is dismal, and it's heading in the wrong direction. According to the latest data from the Bureau of Economic Analysis, the personal savings rate in America is 4.5 percent, down from 5.6 percent the previous year.

But do you know what's the greatest hindrance to you increasing your savings? You. Your brain is the biggest thing holding you back from saving more, and one of the best ways to combat this is to trick yourself. You have to make savings a game. Here are five sneaky ways to do so.

1. Take the 52-Week Challenge and Increase Savings Weekly

The 52-week savings challenge helps you save more money without even realizing it. Starting with the first week of January, save $1 in a piggy bank or savings account of your choosing.

For every week, you increase your savings based on the corresponding number of that week. For example, during the second week of January you'll save $2 for that week. The third week you will save $3 in your piggy bank. And now you have $1, $2 and $3 for total of $6 saved over the first three weeks.

By December, you'll be saving $49, $50, $51 and $52. And at the end of one year, you will have saved $1,378.

Even though the year has already started, it's not too late to start the 52-week challenge. You won't have to add much money to your piggy bank for the initial few weeks.

There is a great 52-week challenge worksheet from Jeff Rose, a certified financial planner, on his website, Good Financial Cents.

2. Set Aside Your Savings from the Grocery Store

Every time I buy something at the grocery store, the cashier hands me my receipt and tells me how much I saved during my trip. The savings, of course, come from using my loyalty card.

My mother-in-law and father-in-law have a great system for their grocery loyalty cards. They take the amount listed on the bottom of their receipt that they saved with their loyalty card, and they put that in the savings account or piggy bank.

It's money that you would've spent anyway if you had been shopping without your loyalty card. And it is a fast way to build up your savings without even realizing that you're doing so.

3. Only Use Folding Money, and Drop the Change in a Coin Jar 

Not only do my wife and I balance our family's monthly budget with a credit card, but we also do not spend coins. Instead we make as many cash purchases as we can by using only bills. 

At the end of each day, we take all of the change that we've accumulated and put it in a coin jar. My coin jar sits on top of my dresser, where it reminds me to put my change in it.

You'd be surprised how much money you can save that way. My wife routinely saves more than $500 a year in change.

4. Find Debit Cards that Round Up Your Purchases

There are a host of credit cards and debit cards on the market today. You can find cards that provide you reward points, frequent flyer miles, double miles, membership in elite clubs, and the list goes on and on.

One interesting type of debit card rounds up your purchases to the nearest dollar. Your bank then deposits the amount rounded up into a savings account. At Bank of America, the programs called Keep the Change. Using such programs, your painless savings can quickly add up to a couple hundred dollars or more over the course of a year.

5. Keep Making 'Payments' After You Pay Off a Loan

What do you do after you have paid off your car loan? What should you do with cash you've dedicated to your mortgage payment after you own the deed to your house? Keep making the payment to yourself, of course, and put the same amount of money into a savings account.

What you want to avoid is lifestyle creep. You'll never know that it is missing from your budget. You already have it factored into your monthly spending. Simply keep making those payments to yourself.

Saving money doesn't have to be a long, laborious endeavor. It doesn't have to be a pain. In fact, you will have better success if you can make it a game.

Americans are not saving enough money. We are underfunding our retirement accounts and have inadequate emergency funds. But it doesn't have to be that way. We do not have to be victims. We can trick ourselves into saving more.