The Incredible Secret Money Machine

In 1978, Don Lancaster — a computer and electronics geek — published a book called The Incredible Secret Money Machine. Though the title smacks of get-rich-quick schemes, The Incredible Secret Money Machine is really about starting and running a small business.

To Lancaster, a “money machine” is any venture that generates “nickels”. Nickels are small streams of revenue from individual customers. If your goal is simply to earn a comfortable income for yourself by doing something you love, then this book can help you explore the idea of business ownership. It’s not going to help you launch the next Google or Microsoft, though. Lancaster is all about nickels, not about dollars.

Getting Started

Lancaster says that in order to build a money machine, you must adhere to four basic beliefs. (Note that I’ve left his very-1970s language as-is.)

  1. You have to be heavily into a technical or craft trip on a total lifestyle basis. “Your own trip has to be the absolute center of everything you do, everything you work with, and everything you believe in. Doing it has to be much more important to you than making money, more important than worrying about what people think, and more important than behaving, competing, or complying the way that other people think you should.”
  2. You must want to stay in control. “For your money machine to work, you have to want to spend much of your time, energy, and effort improving both yourself and the general goodness of the technical or craft trip you are into.”
  3. Your income goals should be just enough to keep going. “Getting filthy rich should be nowhere in your plans. So long as you can continue doing what you like in the direction you want to go, that’s all that should matter. The great irony of your incredible secret money machine is that the less you strive for income, the more of it will come your way, and, more importantly, the more you will be able to do with what you already have.”
  4. Be gentle. “Your money machine should be forever small and decentralized. It should never compete head-on with others. It should complement and advance what others are doing. Your money machine’s products should genuinely help people at a fair or more-than-fair price, never being a rip-off either to suppliers or to customers.”

This isn’t the sort of advice I expect to get from a book about entrepreneurship. I expect to read grand promises, and glowing talk of profits to come. I expect money to be the object. Money isn’t the object with Lancaster. It’s one of the goals, to be sure, but it’s more important to create a “lifestyle business”, one that you enjoy and want to pursue.

Tips for Building a Money Machine

But how do you build your own money machine? What’s the best way to start the stream of nickels? And how do you keep them coming? Though The Incredible Secret Money Machine is only 160 pages long, it’s packed with strategies and tactics for building a successful business, including:

Have as many different sources of income as possible

By this Lancaster doesn’t mean you should work multiple jobs — he means that you should have as many customers as possible. It’s better to have 1,000 people each giving you a nickel a month than it is to have one person giving you $50 a month. If that one person decides to spend $50/month elsewhere, you’re in trouble. But if even 100 people stop paying their nickel, you’ll still earn $45/month.

Have complementary sources of income

Another way to keep your cash flow strong is to operate two money machines. Many entrepreneurs I’ve known have done this. I have a friend who is a published novelist; in his spare time, he also takes on freelance writing projects. My aunt baked wedding cakes, did catering, and was a professional photographer. My wellness coach doesn’t just counsel clients about physical fitness, but she also does stage entertainment.

Deal directly with the customer

If you write a book and publish it traditionally, for example, there’s an entire industry designed to suck the profit out of the process before you get your nickels. Instead, content yourself with fewer sales at a higher margin by dealing directly with the customer.

Work toward deferred income

“What you do for your money machine should generate nickels both today and tomorrow,” Lancaster writes.

You should work toward automatically generating yourself a long stream of future nickels that needs little or no more attention from you. This is admittedly very tricky to do, but if you can pull this off, your money machine will fly by itself, freeing you in the future to do bigger and better things.

An obvious way to generate residual income is to ensure you have satisfied customers. Satisfied customers come back for more, and they tell their friends about your services.

Know the difference between cold cash, imaginary money, and megabucks

Megabucks are the big jackpots you get from writing a bestseller, from winning the lottery, from inventing the next Rubik’s Cube. Megabucks can make your rich, but the odds are basically zilch that you’ll ever find them. Imaginary money is the kind you dream about: “If I’m able to sell my Thneed to Wal-Mart, I’ll be set!” Imaginary money doesn’t exist. It’s potential money contingent on a lot of things. Lancaster encourages readers to focus on cash: “Cold cash is what you get when you supply a quality product to a known bunch of customers at a bargain price. It is the only type of income your money machine should seek.”

Separate frugality from stupidity

Know when you can cut corners to reduce costs and know when it’s important to pay for quality. (And always be sure that you deliver quality to your customers.)

Avoid psychic energy sinks

Anything that distracts you from your purpose is a psychic energy sink. Lancaster decries television as a prominent energy sink. But he warns that debt, divorce, and anything else that produces “bad vibes” should be avoided. Stay positive. Stay focused.

These are just a few of the strategies and tactics Lancaster shares in The Incredible Secret Money Machine. You won’t find the specific details necessary to start a business here. The book doesn’t give step-by-step instructions for how to form a partnership, or how to publicize your product, etc. Instead, it’s filled with broad ideas and suggestions. Some of them are out-dated. All of them are enhanced by (or suffer from) Lancaster’s brash style.

A Real-Life Money Machine

As I was reading The Incredible Secret Money Machine, it reminded me of another book I’d read recently. In John T. Reed’s How to Write, Publish, and Sell Your Own How-To Book, the author describes his “money machine” at length (though he never calls it that).

  • Reed has self-published over 70 how-to books. He actively sells more than 30 of them from his website. This gives him 30+ different sources of income.
  • He writes about four different subjects — real-estate investing, coaching youth sports, success, and self-publishing. This gives him four complementary audiences.
  • Reed deals directly with customers instead of with book distributors. This gives him many sources of nickels instead of just one or two sources of dollars.
  • His books give him deferred income. They keep producing income year after year.

Reed’s book business seems to embody the “money machine” philosophy. I’m glad to have read his Self-Publishing book at roughly the same time that I read Lancaster’s Money Machine — the latter provides the Big Picture, while the former looks at nuts and bolts.


Some of the advice in The Incredible Secret Money Machine (believe in biorhythms!) now seems quaint, 30 years after the book was published. (Lancaster produced a revision in 1991, but I haven’t read it.) The author’s “hip” language and many of his examples are outdated. But smart readers can extrapolate, and still learn a lot. You have to be able to read Lancaster’s advice on letterhead, for example, and think of it as advice for websites.

Although Lancaster believes that you must be into your money machine on a total lifestyle basis, I’m not sure that’s true. I think you can have a part-time money machine. A full-time money machine will be more profitable, of course, but a part-time money machine is a great way to start. (Get Rich Slowly has been a part-time money machine for me, for example.)

Finding the Book

This book can be expensive and hard to find — it’s an underground classic. My county library system doesn’t have it. I bought my copy for $15 from Powell’s. Amazon currently has seven copies under $10. In theory, you can order the revised edition from the author’s website. I’m going to give it a shot, but I’m wary — the site looks as if it hasn’t been updated in ten years. (You can take a sneak peek at the second edition in this PDF from Lancaster’s site.)

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