The myth
To invest in the stock market, you need money to buy stocks. To start a business, you need money for inventory, manpower, equipment, and other essentials to get your idea off the ground.
Even a 9-5 or a side hustle requires some initial costs, like the time and money it takes to build skills. This is why people say you must spend money to make money.
Risks of believing this myth
This phrase can either inspire or discourage you, depending on how you look at things. On one hand, you might believe that investing is only for the wealthy and that building wealth with limited resources is impossible.
On the flipside, you may take it as motivation to start investing, understanding how it can help you achieve your financial goals.
For those who already invest or engage in money-making ventures, this saying can sometimes serve as an excuse. It might lead them to take unnecessary risks or accept extreme losses under the assumption that it’s all part of the journey to building wealth.
The reality
Does it really take money to make money? The short answer is yes, it does.
Rather than feeling discouraged, you can use this idea as motivation to develop smart money habits, such as:
1. Saving early
Instead of viewing money as a barrier, see it as a tool that helps you achieve what you want in life. To make the most of it, you need to take care of it—starting with saving as much as possible.
After all, you can’t grow what you don’t have. Before you begin investing, it’s wise to have an emergency fund covering 3 to 6 months of living expenses. This safety net ensures financial stability, allowing you to stay invested without interruption.
2. Spending mindfully
As you get into the habit of saving, you’ll understand how every little bit of your money counts. You may want to be more mindful about where your money goes, and so you’ll set a budget and start tracking your expenses.
Mindful spending helps you avoid unnecessary debt and manage existing obligations effectively.
It’s best to pay off high-interest debt before investing, so interest payments don’t diminish your potential returns.
3. Investing consistently
How much money do you need to make more money? That depends on your chosen path—whether it’s starting a business or investing in stocks, bonds, or pooled funds.
Investing may be more accessible than you think.
Today, there are technologies and financial products designed for smaller investors.
These include Retail Treasury Bonds (RTBs), tokenized bonds, and fractional shares.
Pooled funds also allow you to invest in diversified assets with relatively lower amounts.
Even small investments can add up over time and help you reach goals.
The key is to start early, stay consistent, and make informed choices as you go through the ups and downs.
4. Managing risks
There’s always a risk of losing money when investing or running a business. However, this doesn’t mean you should accept excessive risks simply because of the saying, “It takes money to make money.”
As an investor, there are ways to manage risk like keeping some of your money in cash, diversifying your portfolio, and investing within your risk tolerance.
Verdict: True.
Money is essential for making more money, but it’s not the only factor in success. Thoughtful decision-making, disciplined saving, and consistent investing matter just as much.
Building wealth isn’t just about how much you start with—it’s about how well you manage and grow what you have.
