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Why Money Is The Only Metric You Should Care About

By: Elite Legacy Education, December 12, 2017

Ramit Sethi’s eBook, Your Move: The Underdog’s Guide to Building Your Business, can teach every business person an important lesson about money.

 

He starts by telling his readers how he’d given his friends and family access to his courses and paid content (for free!). He follows this up by saying why he no longer does this and instead, charges them the regular price. Suddenly, it makes sense why he only charges 99 cents for the eBook instead of giving it away for free.

 

If he gives it away for free, people may not value the content as much because it is free.

 

You see, Sethi found that when he gave his friend’s free access to his courses, they rarely complete them. But when he started charging these people after telling them why he was going to charge them, well, everything changed.

 

These people actually started going through the courses and even completing them. This proves that people place higher value on the things they purchase.

 

This is exactly why you shouldn’t be afraid to charge your friends for your products or services. If you think about it, you’ll actually be doing them a service rather than a disservice. Of course, you may have to explain why you’re doing it, but it’s a win-win if it works out.

 

The bottom line is that you should never feel ridiculed when asking for the sale and charging the true price of your product or services.

 

This is the first of many money lessons from Ramit Sethi’s book.

 

What are Ramit Sethi’s 3 Rules for Money?

 

Sethi says he has 3 Rules of Money Management which are essentially to your financial success in life. His 3 mind-shifting rules are:

 

  • People pay for what they value.
  • With more money, more value can be created.
  • Money means that you’re doing something right.

 

The 3 Rules of Money Management Explained

 

#1 – People pay for what they value.

 

His first rule is that people pay for the things they value. You’d have to imagine that people wouldn’t buy things unless it brought some sort of value to their lives. Whether it be entertainment, convenience, or some other benefit.

 

He says that if you can identify a pressing issue and solve that daily headache for someone, “the price is a mere triviality”. The more your service enhances the day-to-day lives of your customers the better.

 

It’s as simple as that.

 

If people place no value on it – you’ll make no sales. But if people do happen to place enormous value on it – well, then odds are you’re going to make a lot more money.

 

#2 – With more money, more value can be created.

 

While many people assume a businessperson is only in it for the money, a smart businessperson knows that you must reinvest in your business to make it even better.

 

After all, by putting money back into your business, it creates more value for your users. If we go back to Rule #1, you’ll quickly realize that this just adds up to even more money for your business in the long-run.

 

#3 – Money means that you’re doing something right.

 

It can be common for naïve entrepreneurs to focus on what we call vanity metrics – rather than the bottom line. The issue with vanity metrics is that the number of Facebook Likes on your page does not provide any useful statistic. Compare this to measuring how much revenue is being generated from your Facebook audience. Now this is much more useful.

 

Think about it. You can have all the Facebook followers in the world, but what happens if none of those people are buying from you? Well, you’ll likely run out of resources and eventually go out of business. The bottom line is that money is a sign that you’re going in the right direction.

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