1) What is said here is my opinion, not that of Linden Lab.
2) It does not constitute financial or tax advice.
3) This advice is intended to be useful, and factually accurate, but neither of these things are in any way guaranteed.
4) If you have any ideas about how to improve this helpfile, please send them to me.
The single best way to get L$
Before we begin, there is one thing about L$ in SL that you absolutely must know. This is that jobs in SL typically do not pay as much as jobs in Real Life do. Therefore the most effective way (in terms of time) to get L$ is usually to get a good real life job and buy L$ on the LindeX or various other currency exchanges, such as SLX, or GOM. There are various currency exchanges, I suggest shopping around to get the best rate.
Reasons why buying currency might not be best for you
There are cases where it might be a good idea to seek a job in SL anyway :
* you have serious problems in your life which prevent you ever getting a good real life job - for example, you have severe disabilities.
* you have a decent real life job, but the banks where you live will not give you a credit card, and you can't get a paypal account. Thus you have no way of buying L$ from LL. In this case I would urge you to talk to very good, close, *trustworthy* friends about other ways of buying L$ - for example, in exchange for cheques in the post.
* you already have a good real life job, and you just want a job in SL to have something fun and rewarding to do.
* you have other priorities in your Real Life, such as saving for your kid's college fund.
A general introduction to (mostly low paying) jobs in SL
The first thing everyone should read on the subject of jobs in SL is : the jobs page on the SL wiki that lists common jobs in SL. This gives you an idea of many of the basic job categories in SL. Typically most of these jobs are identifiable because :
* they require a lot of "low intensity time" - that is, time you're around the computer waiting for something to happen, or otherwise not doing much. Examples : a security guard waiting for griefers to show up, a dancer/escort using animations and sometimes talking to customers waiting to get hired, etc.
* require relatively little skill. Examples : a security guard in *some* cases needs only to know who to ban and how to ban them. The 'who to ban' is usually covered by a set of rules given to them, and the 'how to ban' is usually as simple as shouting "/8 addt NAME" or similar to add them to the ban list of a security orb nearby.
* very similar jobs to them are done for free. For example, at many clubs, there are quite a lot of regular customers who have if not the power to ban griefers, at least the contact details of a club admin who can swoop in at short notice. There are lots of people in SL who are willing to have av-sex for free, indeed, some of the most popular locations in SL are based around the idea of free sex. Therefore, it is hard to earn L$ that way in Second Life because there are so many people willing to have sex for free.
* tend to be 'service' oriented. That is, if you're trying really hard to do something for someone else, you're probably in a much weaker position than someone who has people come to *them* for help.
Basic principles of how to earn more L$ and enjoy doing it
There are many jobs in SL that are low-paying and fall into the above category.
The SL wiki article above covers most of them. I do not mean to demean dancers, escorts, , security guards, etc.... I am simply pointing out that if you want to be rich, they are probably not the jobs for you. Personally, I think of becoming rich as rather like becoming happy - it's a background goal in life that you accomplish best by doing other things. For example, if you're always thinking about how unhappy you are, becoming happy becomes your goal, and then you start looking for short-term ways to become happy, like drugs or casual sex. Invariably these provide a quick-fix but leave the longer-term problem unsolved, and soon you are back where you started, even more unhappy because you remember that for a few moments you were happy. The effective way to become happy is to put unhappiness out of your mind - refuse to be unhappy - and settle down doing something you enjoy, something that helps you in the long term, something that challenges and distracts and motivates you and generally gets you interested in life again.
Similarly, the best way to earn L$ is not to be always focused on earning L$ - rather, it is to do things which have as side effects producing lots of L$, and to be so focused on doing these things well that you don't notice the amount of L$ you make. This has two advantages - firstly as you're not so distracted with L$ you can focus on your work and thus produce better quality work, thus earning more L$..... and secondly if you're focused on your work all the time your L$ tends to build up because you're so focused on your work you do not have time to spend it.
So, to summarise : the best way of making L$ is to pick something that you enjoy doing anyway and are good at, and try to find a way of making L$ from that. Develop your natural skills and try to use them to address a want or need people have. Use your mind (or hire someone else's) to do the things you can't do - for example if you come up with a great new idea for a product, sell it to a company that makes products like that. If you make products but are stuck for new ideas, hire some creative thinkers to get you back on track. Develop your own skills to a high level, and co-operate with other people who have other skills to make something that people will buy, then split the profits.
Of course, as with any capitalist system, the most lucrative job is the one where you come up with an idea of how to make something quickly and cheaply, yet this thing you make is in high demand and can be sold for lots of L$. By the time everyone else figures out that they could make this too, you've sold a ton of them and made a lot of L$.
Unfortunately these jobs are the hardest to get, because they require you to :
1) be able to identify what consumers need or want, before most of them are even aware of it themselves.
2) be able to design a solution to their problem that is both effective, appealing and cost-effective to produce.
3) be able to make people aware of your product and convince them to buy it.
The key to getting this kind of job is that you :
1) Identify what skills you have.
2) Identify what needs or wants other people have which are not yet met by any existing product
3) Figure out a way to meet a need or want that people have with one or more of your skills.
For example : In my case, I identified that I'm a good writer, and that I have years of experience doing various forms of roleplay online and offline. I realised that a lot of people in SL like or are curious about how to do good roleplay - but they don't know much about it because before I wrote what I wrote, information like that just wasn't written down anywhere in SL that I or anyone I asked could find. I saw a way to help people learn and thus improve the quality of their lives, by teaching them about something I knew about and they wanted to learn about. I could have tutored them one on one, but it is a far better use of my time to have a vendor selling my work 24/7 while I am off doing other things
My point is that I saw a way I could be useful to many people by making something for them - I made it - I started selling it and it is selling well.
To make a product that sells well, you have to match your existing skills to what consumers want. Develop your skills, identify what consumers want, make it, sell it, and profit from doing so. Try to make something that you *enjoy* making - as that will keep you motivated to do a better job and result in a better product more people want to buy.
Why you should always sell something you're personally interested in
Your peers and friends, the people you hang around with, are probably interested in roughly the same things as you are. If you use your skills on things you are interested in and thus make a product that people want, it will thus probably be tied to your interests, and thus be a way you get involved in the community as a businessperson. This is a good thing because it gives you social status amongst your friends as well as L$... and opens the door to opportunities in your business. For example, if your friends are interested in the same things as you, they might be interested in your product. If they're interested in your product then they might help you develop it in various ways like pointing out its flaws so you can fix them, or advertising it for you by telling their friends. You can encourage this sort of benefit by giving free samples of your finished product to your friends - if your product is good, they will recommend it to their friends and this is a great way to launch your product onto the market.
Thus, building a product based on your interests :
1) gets you social status if done well
2) is a great way to meet new people who share your interests
3) provides a great excuse *not* to meet people you don't like ("sorry, busy with business stuff atm", for example)
4) taps the resources your friends have, like the ability to give you feedback and help you develop your product, that may naturally lead to working together and thus building better friendships
5) allows you to make use of the community by using people you know to give you free advertising via free samples, for example.
6) motivates you - as you're MUCH more likely to work hard on a product you care about then one you don't care about.
7) makes your product better - as you can draw on your knowledge and experience when making it.... plus that of your friends.
...etc
In short, always try to combine your skills and your interests to fill a gap in the market - produce something that addresses the wants/needs consumers have.
Ways you can take advantage of SL's economy to make L$ - without harming anyone
As an example : creating some things tends to cost more than creating others. Sound files, textures, etc, tend to cost L$10 per upload. This means that :
1) if you're going to use lots of them, make sure you budget for this cost.
2) you want to use as few of them as possible.
There are other things, however, which are free to create (and thus, you can experiment with creating products on them for free - so even if your product fails you have not lost L$!). My favourite example of these is notecards. I saw an opportunity to sell notecards full of information in Second Life... it was perfect for me because I had the information anyway (so wouldn't spend anything to obtain it), creating the product cost next to nothing (because creation of notecards is free), and I could sell it for free too (because it really isn't that hard to make a vendor object in LSL script, and if you use free textures for your vendor, that's free too. Plus I found some malls that were just opening and gave me vendor space without needing to pay rent).
So, in summary, I worked out that I could create this product without needing to learn much in the way of new things, except how to script a vendor in LSL, which turns out to be very easy.
I created my product for a grand total of $0L, and started selling it, making L$ right off the bat, because it cost me nothing to make but people were buying it at between L$49 and L$199 per copy.
I'm not suggesting that everyone should scribble down anything they want on a notecard and try to sell it.
I'm simply saying that if you have a skill, or some knowledge about a special topic that you think might be useful to other people... try to find a way to turn it into a solution to one of their problems (even one they did not know they had) - and they may start paying you for being so helpful.
Business is built on the principle of getting paid for being helpful - if you can help someone do something, and nobody else can, you are in a good position to say "I will only do this for you if you pay me". Obviously you need to do a lot of helpful things for free *before* you can say that, but once you have a reputation for helping people solve their problems, it is only natural that you start charging for this as you have a valuable product/service which other people can't do as well as you... and you need some way to choose who you will help. Why not the person that pays the most? That's a quick way of deciding it that's impartial and turns the deals into both a win for the customer (they get what they want) and a win for you (you get the most L$ one can fairly demand for that product/service).
So, to summarise :
1) Identify your skills, knowledge, and assets.
2) Identify how to use what you have to meet a want/need that other people have, in the cheapest way possible. Look in places like the products wanted forum first for ideas about what people might find useful - then try to find a way to meet that need at the minimum cost to you.
3) Try to get some feedback from other people who know about relevant topics such as your skills and how much demand there really is for your product.
4) If the startup cost is low or you reasonably expect to make a lot of L$ at this, and you have the free time, go for it.
Two very quick ways to save/make L$
1) If you're going to sell Lindens, use a limit sell, timed so you catch the market when it's going down. Your Lindens may take you a few days to sell rather than being instant, but the effect is that you get about 6% more US dollars for your money. Getting a 6% bonus for 5 minutes work reading the LindeX is a very worthwhile thing to do! If you're going to buy/sell L$, you should check out the different currency exchange sites listed at the top of this article, as their fees vary, and you can save yourself money by shopping around. The principle of "shop around" works in your favour here. Other principles such as "where possible, cut out the middleman", and "buy low, sell high" may help, but they depend on shopping around... you don't know what's out there unless you shop around.
2) If you're not going to sell your lindens, yet, and you can afford to lose them entirely, stick them in Ginko or another high risk / high gain savings account. You might lose your money, there is always a chance of that. On the other hand, if you use it right, you can earn 3.3% interest per month on your balance, which almost offsets the 3.5% fee for selling L$. I'm not sure if this is a good way to make money or not on its own, but I think that if you get that 3.3% interest on all L$s before you sell them, AND you time your selling of L$ to sell when the market is right, using a limit sell, I think your chances of making money are much better.
3) Encourage your customers to pay you in L$, rather than using sites like paypal. There are several reasons for this. Firstly, PayPal are more expensive to use for business transactions - they charge a 2.5% fee for handling currency exchange, for example, which can be very significant if you're running a business in SL but aren't based in the USA. Secondly, PayPal will share your RL name with your customers unless you pay them extra for a business account. Thirdly, PayPal effectively lock up your money for awhile by taking what I consider to be far too long to process withdrawals. Fourthly, I used to use PayPal to process payments for another online business I have, but I pulled all of my money out of my PayPal account and then closed it completely after they charged me substantial fees for something that I felt was very unfair. Finally, people are more open to spending L$ than they are to spending USD, because they don't consider L$ to be 'real money', psychologically. Getting people to buy your product with cash is hard. Getting them to buy it with a credit or debit card is easier, because it doesn't *feel* so much like they're handing over money. Getting them to buy it with L$ is even easier still, as to them it feels like they're dealing with something akin to monopoly money... "game money" that isn't serious. So, when you can, set prices in L$. The only exception to this is when you are dealing with large-value items, in which case you don't want to set prices in L$ because the resulting numbers are huge, and it shatters the illusion. It is also rather unethical, as frankly if you're setting your prices in L$ to disguise the fact that you're asking for a lot of USD, you probably ought to be spending your time improving your product, rather than trying to fool people with marketing. So, to put it simply : set your prices in L$ where it is convenient, and especially for low value items. For high value items, setting them in USD is probably more ethical and protects you from market fluctuations.
4) Never, ever enter "lotteries". Similarly, never gamble. The reason is simple : the odds are always against you in the long term. The longer you play, the more and more likely it is you will lose a lot of L$ this way. Ultimately, in gambling, the house *always* takes your money in the long term. Remember : if you gamble - don't expect to win.
Lotteries are similar : at most they pay all funds paid into the lottery to a single lottery winner. Usually they pay a portion of what is paid into them. That means that when you enter a lottery you are trading L$1 for a ticket that is worth much less than L$1. You almost always lose money *and* value instantly, as soon as you buy a lottery ticket. For this reason, I would suggest that you never gamble and never buy lottery tickets, ever. I personally consider lotteries and gambling in general to be nothing more than a waste of money. I can see their appeal - they give you hope of a better situation in future - but it is false hope - they almost always make sure you end up poorer than when you started. In order to buy enough tickets to be in with a meaningful chance of winning a lottery, you have to spend so much on tickets that it is not worth entering. For example, lets say a lottery pays out 90% of its ticket sales in a jackpot. To be in with a 50% chance of winning a L$90 jackpot, you'd have to pay $50 in tickets. It's pretty easy to see why buying 50% of the tickets in that lottery is a bad idea : you have a 50% chance of getting L$90 and a 50% chance of getting L$0. That averages out to L$45, which is less than what you paid in the first place. Effectively, any time you are buying a lottery ticket, or gambling, you are trading L$ or real USD money for a 'chance' which is worth less than what you are paying for it in terms of L$ or (in the real world) USD value. This has been called "a tax on people who can't do math".
Put simply : don't gamble or enter lotteries unless you enjoy losing money.
Doing business ethically, and why you should
Put simply, most human respond to kindness with kindness and unkindness with unkindness. As a business owner, you are dependant upon your customers. Therefore, you should always treat them well, because if you don't they will leave you in the lurch.
Basically, you're dependant on your customers, and so if you wrong your customers, your business will suffer. Always be nice to your customers - without them your business will fail.
A few ethical business tips :
1) Be honest and accurate. Avoid mis-representing your product, your fees, or anything else about your business. Never, ever lie to a customer. You can emphasise the good qualities of your product, but you can never lie. You can say that "in my opinion, this is the best product for ______", but you cannot say "everyone thinks this is the best product", unless you have some kind of independent proof that *everyone*, without exception, really does think that.
2) Be reliable. Keep your prices steady to hold customer confidence. Make sure you or someone you appoint can handle customer enquiries in a reasonable time. Make sure if you promise anything, you keep your promises!
3) Be a team player. Work with other businesses. Try to learn from them... ask "what can I learn from _____?". Same with your customers. A lot of customers have this idea that the maker/customer relationship ends when they hand over the money. It shouldn't. You should give your customers an incentive to keep you in mind - that way they're more likely to mention you to other people and give you free advertising, and much more likely to feel like they had an enjoyable buying experience. Being cold and distant is not good for you emotionally or for the sales of your product. Personally, I reach out to my customers by offering them L$, from L$50 to L$500 for pointing out ways in which I could improve my product. I basically pay them to tell me what needs to be improved in my product, then I improve it along those lines. I also reach out to other businesspeople in SL. If I can't do a job, and it needs to be done, I look to hire someone with a reputation for quality results to do the work for me. I pay them to do it, too, and the price I pay them is based on a combination of what I can afford, what I think is a fair price for the work, what they think is a fair price for the work, and how much a similar service would cost elsewhere.
4) If you screw up, admit it, find out how to fix the problem and fix it. Don't let your pride get in the way of doing the right thing. A lot of people actually give a great deal of respect to a person who is mature enough to admit their mistakes and learn from them.
5) Make sure you have a few people who are both customers and friends. Typically, do this by giving free samples of your work to your friends in the early stages of development (they're the ideal beta testers as hopefully they share your interests, and your product is based on your interests). Once you do have a few customers who are also friends, try to encourage them to give you honest feedback on your product. A friend who says your product is great when it really sucks does you no favours. A friend who tells you it sucks because it does really suck when you think it is great does you a big favour. A friend who tells you it is great because it really is great, even when you think it sucks, is the most valuable of all as these are the people that really help you through even the hard times of running a business.
Unexpected costs
A tip for those considering starting a small business in SL : you face many unexpected costs.
For example :
1) The cost of the time you spend making your product and doing business-related activities. (reduce this by working on something you enjoy, and don't forget the community you're selling to!)
2) The cost of the land you buy/rent for your vendors or business-related activities. (reduce this by getting free placement in malls where possible, and seeking out value for L$ in terms of exposure to good potential customers versus cost of the advertising)
3) The cost of selling L$ on the Lindex or other currency exchange sites, to recoup any USD investment (currently 3.5% of value sold, IIRC).
4) The cost of getting LL/PayPal/etc to let you withdraw the USD value of Lindens you sell (up to $15USD per withdrawal if you use LindeX).
5) The cost of changing that USD back into your local currency (can be up to 5% in places, depending on your bank).
6) The time cost of how long it takes you to get L$ back that you've put into SL - and if you can afford to have your RL money tied up in SL.
The top 5 ways to make sure you make L$
1) Pick wisely from your skills, talents, knowledge, friends and business contacts - use all together to make a product that fills a consumer need/want.
2) Make it *popular* - general use items sell much better than niche items, unless you're SURE a niche is big enough to support your product *AND* that most people in the nice will and can buy it.
3) Market your product the right way. NEVER SPAM ANYONE. Instead, put your product info in your profile and ask permission to advertise it in places/groups/IMs about related topics. Target your audience and market towards them in a way they find USEFUL, not annoying.
4) Budget. Remember to translate your L$ profits/losses back into USD so you can see how much you're making *at most* - before fees as above are deducted.
5) If in doubt, get more feedback from other people. Try to get feedback from multiple TYPES of people too - coders on your scripts, artists on your art, builders on your builds/textures, marketing people on your advertising, etc etc etc.
6) Protect your product. Never give someone else enough information about the whole of your product/business that they could copy it and replicate your product themselves. Similarly, each industry is prone to a certain amount of illegal copying/piracy, which hurts creators in that industry. Consider how vulnurable your products are to copying, and if possible take steps to limit the risk of your products being pirated. You can give out free samples for advertising, and you can choose not to have copy-protection because many consumers are against it. Those are OK choices, but you should still be aware of the vulnurability of your product and *consider* what you can do to reduce the risk of piracy.
7) Don't expect to EVER make a lot of USD playing SL. SL is not geared for that. It's geared so you can make a bit of L$ doing something you enjoy. It's not geared to make mega-bucks unless you're prepared to invest mega-bucks. For example : say the rate of return on your investment was 10%. You'd need to invest 1000 USD to make 100 USD. If you have 1000 USD at your fingertips, then there is really no need for you to take on risky investments in SL, because you're probably well off already in Real Life
If on the other hand you'd struggle to find even 100 USD, then you probably can't afford to take risk with that money - you can't afford to risk it all on a "get rich quick" scheme because you risk losing everything, and you can't afford to lose everything. So... as a general rule, only invest in SL what you can afford to lose - and make sure you're doing it for your own enjoyment and education. Remember to balance what you have, what you can make, and what you risk/lose by making it. Remember that making a lot of USD in SL is hard (otherwise everyone would be doing it) and it takes serious thought/skill to do. If this fact bothers you, then remember that even playing SL itself is a luxury item (only 1% of the world's population own a computer). Again, it is usually best to make money with a RL job, and to spend some of it in SL. If you want to be a creator in SL, and get paid for your work, then remember : DON'T DO IT FOR THE MONEY. Do it because you love it (you'll do a better job *and* enjoy it more *and* get paid more that way).... and don't expect to make money. Plan for the worst and hope for the best. 
Remember your friends and the community. They're INVALUABLE sources of feedback, people to beta-tester your product, and so on.9) If it all goes down the pan, and you've tried hard at making something that makes L$ but it just doesn't work...... then release free, all-permissions copies of it to everyone who you think might be interested, so at the very least it helps them anyway and a future product might be made from it (and... it'll help build your reputation!).
10) Remember, the best ways to make L$ depend on hard work, and investment of time, skill and L$. Making L$ isn't easy - if it was, everyone would do it! It is, however, possible if you keep trying to do it the smart way - eventually, if you learn from your experience - you will hit upon an idea. If you don't... then that doesn't matter, because you've been sensible and remembered point #4 (Budget) - so you've kept your losses to a safe minimum that you can afford.
Quotes from other SL users
When you've been in SL awhile, you will suddenly think, "I wish I had <insert wish here>."
Build that thing and sell it.
Build that thing and sell it.
It is possible to make money in sl, but its like living in a poor country where the exchange rate to the dollar is terrible.
I've only just started playing this game, and the most I can make in a day is about l$1000 aprox 3usd.
Id rather do a days work irl and get paid £150.
I think if you really put your heart into it you probally could make about $100 a week from it, but its going to take time and alot of hard work.
But how you should view the game as a place to have fun, or a profitable hobby. Dont think your going to make your millions here, because thats very unlikely.
I've only just started playing this game, and the most I can make in a day is about l$1000 aprox 3usd.
Id rather do a days work irl and get paid £150.
I think if you really put your heart into it you probally could make about $100 a week from it, but its going to take time and alot of hard work.
But how you should view the game as a place to have fun, or a profitable hobby. Dont think your going to make your millions here, because thats very unlikely.
