Do the math

When it comes to making money online, it is likely that you will need to spend money in order to make money. Or, you may need to invest and manage the money you’ve already earned. It goes without saying that you’ll want to always make a net profit. For clarity, the formula for net profit is: total money made – total costs = net profit.

To further illustrate net profit, I’ll provide an example.

Say I have a lemonade stand. It took me $50 to build the stand, buy the lemonade ingredients, and buy all other supplies.

$50 is my total cost.

I run the lemonade stand for a day and I make $100. This $100 is my total profit.

To calculate net profit, I simply enter the numbers in the above formula.

total money made – total costs = net profit

$100 – $50 = $50

I made $50 running the lemonade stand for a day.

This is simple enough to understand without an example, but I gave an example just for illustration.

Unfortunately, calculating future net profit is always as the above example suggests. However, it is still incredibly important that you know you are making money, so always do the math.

Currently, I’m “doing the math”, and creating a strategy, for my Neobux venture. Admittedly, I should have done this a long time ago. I began Neobux without much of a strategy. Fortunately, it hasn’t cost me too much, but, while creating the strategy, I learned that I could easily make more money by using said strategy.

I haven’t completed my strategy, but, once I do, I’ll likely post it on this blog.

As I mentioned above, “doing the math” isn’t always easy since you may have to account for the unknowns. I’ve run into a few unknowns while creating my Neobux strategy. I’ve discovered that the best way to handle these unknowns is to assume the worst. To explain unknowns, I’ll use the lemonade stand example again. Let’s say I don’t know how much the sugar is going to cost me. So, I’ll assume the worst. I’ll assume that the sugar is going to cost me a lot, and then I’ll take this into consideration when calculating my net profit. If my calculations show that I’ll still make a net profit, even when considering the expected high cost of the sugar, I’ll know that I can afford the cost of the sugar. Now that I know I’ll likely be able to afford the cost of the sugar, I’ve prepared for the worst case scenario.

Doing the math relates back to my “stacking the odds” principle. When you do the math, you are stacking the odds for success in your favor. Additionally, doing the math helps to manage risk. There is always a risk when attempting to make money. By doing the math, you’re able to discover how much risk you are taking. Doing the math can also help you manage the risk, as shown in my explanation on how to handle unknowns.

Math is hardly my favorite subject, but I can’t deny its usefulness when trying to make money. So, do the math, and make some money.