How to Make More Money: Three Ways to Increase Your Earnings
There’s no doubt that frugality is crucial in personal finance – you can’t outearn bad spending — but attempting to grow rich by pinching pennies is like trying to win a car race by saving petrol. If you want to cross the finish line quickly, don’t be afraid to use the accelerator!
Today, I’d want to look into a better approach to increase your savings. Let’s speak about ways to make additional money. Your income is governed by three elements, whether you work for yourself or someone else.
Your knowledge and abilities. It pays to study more if you want to earn more.
Your efficiency. The amount and quality of your labour both influence how much customers are prepared to pay you.
Your capacity to promote yourself. You must ask for what you are worth to get paid what you are worth.
If you want to make more money, you must become more valuable in the job market – and show that worth to the market. Let’s have a look at how we can make that happen.
The more you learn, the more money you will make.
Education has a higher influence on work-life earnings in the United States than any other demographic component. What you earn is influenced by your age, colour, gender, and region, but nothing counts more than what you know. That’s fantastic news since you have complete control over your educational level.
How important is education? Here are some statistics from the U.S. Bureau of Labor Statistics 2014 Consumer Expenditure Survey:
The average college graduate makes twice as much as his high school-educated acquaintance.
A two-year degree from a community college is also beneficial. A worker with an associate’s degree makes twice as much as a high school dropout and half as much as someone with only a high school diploma. Two years of community college often increases annual earnings by $20,000 per year. (That’s about a million dollars throughout an average 40-year career!)
According to a similar study from the Current Population Survey, education has an impact on unemployment rates:
Of course, a college degree does not ensure that you will make more money. Some philosophy students end up working at convenience shops for the rest of their life, while others become millionaires after dropping out of high school.
Aside from outliers, the more you study, the more you earn.
When you are young and at the outset of your profession, it is ideal to seek education. Now is the next best time.
I understand how difficult it may be to find the time and energy to return to school when you have a family and work, but it is possible. Consider the following examples:
My friend Jeremy chose to become an accountant after 10 years as a used car salesperson. While taking online classes and studying for examinations, he continued to sell automobiles and spend time with his wife and children. He is now a full-fledged CPA.
Kim, my girlfriend, worked as the office manager for a big dental practice in the Sacramento area. She chose to work harder when she was 35. She resigned from her job to pursue a dental hygiene degree, and she now enjoys more compensation and greater job satisfaction.
I’ve done the same thing. When I was 28, I enrolled in evening and weekend computer programming programs at the local community college. I learned enough programming in eighteen months to supplement my main job as a salesman for the family box factory.
If you are unable to attend college, you can still improve your knowledge and skills through an ongoing campaign of self-education.
I’m a strong supporter of self-directed lifelong learning. I’m always reading personal finance books and blogs. I attend a nearby community college for writing classes. I consume podcasts and online courses. I go to conferences to learn from my peers. I’m also in the middle of a $2000 web-based course as I write this.
The more you learn and progress, the more valuable you will become in the employment market.
Tip: Transitioning from passive/consumptive interests — television, computer games, sports watching — to active/productive hobbies made a significant adjustment in my own life. I’m happier when I’m reading, writing, or doing web design (or exercising or creating anything) than when I’m doing something less constructive. And these things assist me in earning more money.
Work harder. Work More Effectively.
Education isn’t the only element that influences your earnings. Your remuneration is also determined by the amount and quality of your labour. You may raise your earnings by increasing the number of hours you work, your output per hour, or the value of your production.
Raise the number of hours you work each week for the quickest and easiest approach to increase your income. This might imply transitioning from a part-time to a full-time position. Working overtime may be necessary. For many folks, it means finding a second job
Working two jobs may be challenging, particularly if you have small children. And other people believe that doing a second job is beneath them. Recognize that a second job is not a life sentence to overcome these concerns. It’s a strategy to boost your revenue in the near run.
I know a well-paid scientist who works at posh clothes stores around the holidays. She earns more money and receives an employee discount, allowing her to affordably create her professional outfit.
After taking the computer lessons I described earlier, I was able to find a couple of part-time jobs that allowed me to put my new abilities to work. I used to work three jobs each week, totalling approximately 80 hours per week. Although the hours were difficult, the money I made helped me pay off my debt.
When my ex-wife taught high school science, it was usual for her colleagues to make the most of their vacations. They’d work as bookstores, tour guides, and even as bartenders!
If you are unable to add hours to your workday, you may increase your worth by performing more work in the time you have available. If you’ve been creating 10 widgets every hour, set a goal of producing twelve. If you’ve made forty sales calls per week,
You are more valuable when you generate more.
It is advantageous to enhance the amount as well as the quality of your job. Although this may seem apparent, you’d be shocked how many individuals “go through the motions” at work every day. You’ll never get ahead if all you do is pretend.
It’s difficult to give universal tips on how to accomplish a better job. “Better” varies depending on the work. However, you are aware of what constitutes quality work in your field. (If you don’t, that’s an issue you should address right now.)
Take note of the following counterintuitive method for increasing the worth of what you do: Change your workplace. Perhaps it involves changing jobs inside your present company. Perhaps it means working for a competitor. Or perhaps it requires altogether changing careers. (When my ex-wife decided she needed more money, she quit her job as a science teacher and went to work as a forensic scientist. Same set of talents, entirely different career.)
Your salary is decided by the worth of your labour, which is determined by your education and productivity. However, there is one more piece to this puzzle. Your earnings are also affected by how successfully you advertise yourself.
Whether you like it or not, you are a product. Your effort and expertise are valuable commodities.
Your boss wants to pay you as little as possible for your efforts. Your purpose, on the other hand, is to be compensated fairly. A clever money manager negotiates his wage to bridge the difference between these two figures.
Consider it this way: When looking for a new automobile, you want to spend as little money as possible, right? You might need that car, but you’re not going to pay full price for it if you don’t have to. At the same time, the dealer tries everything possible to entice you to spend more.
Your boss is the one who buys the automobile. She needs an employee but prefers to pay less than the “list price.” You’re similar to the auto dealership. You want to persuade the purchaser — your
If you understand the art of pay bargaining, you may enhance your lifetime earnings by half a million dollars – or more.
It’s one thing to know you should negotiate your wage; it’s another to do it. What’s the catch?
Career counsellor Jack Chapman offers a five-step technique that practically anybody may adopt in his excellent book Negotiating Your Salary: How to Make $1000 a Minute:
Defer pay conversations until you’ve been given a position. (Also, discuss a compensation rise following your performance assessment.)
Allow them to make the initial move. The one who names a number first loses, thus always letting the employer propose a pay first. (Watch this video and read this article for tips on how to deflect concerns about your wage expectations.)
When you hear the offer, repeat the top value — then silence yourself. This “flinch” is a bit of acting that buys you time while putting the employer under strain.
According to 2011 research published in the Journal of Organizational Behavior, not negotiating your beginning wage might cost you $600,000 throughout your career.
When it comes to asking for a raise, the same principles apply. Of course, the difference is that your firm already knows if you’re an asset or a burden. Prepare to make your case for a raise during your next performance review to maximize your chances of getting one. Promote yourself!
Only nearly half of all employees in the United States negotiate their pay. A money manager always does.
There are more strategies to advertise yourself and your profession. You may, for example, keep a portfolio of your achievements in the office. This is useful when asking for a raise or applying for a new job. When you network with peers at seminars and conferences, you are also promoting your talents and abilities.
You are solely responsible for your earnings.
What you make reflects what the market feels you’re worth. The demand for your expertise and abilities, the quality and amount of your job, and how successfully you sell yourself to potential employers or consumers all influence your income. You may easily generate money if you have a certain skill set by selling your services or educating others.
If you want to make more money, you must be more valuable.
What the market values may not appear “fair” to you — yet “fair” is meaningless. Is it unethical for professional athletes to get paid so much? Maybe. Should teachers be compensated more? Perhaps. But it makes no difference. These figures are the result of supply and demand. If you want to enhance your earnings, you must give more of what employers want.
It is now time to take action. Spend five minutes considering the following questions:
- What one thing can you do to broaden your knowledge or skill set?
- What is one thing you can do to improve the number or quality of your work?
- What is one thing you can do to improve your marketing to your employer — or other employers?
- Choose the right course of action for each question. Now comes the difficult part: Commit yourself that you will complete these three tasks during the following six months. Then come back here and let us know how it went!
Note: I’m moving old Money Boss material to Get Rich Slowly during March, including the articles that outline the “Money Boss approach.” This is the sixth article in the series.
- Part one of this series addressed the topic, “What is financial independence?”
- Part two discussed why you should operate your life as if it were a company.
- Part three of this series taught me how to create a personal mission statement.
- Part four looked at the significance of saving rates.
- Part five demonstrated why cutting back on the large ticket items is the greatest approach to save money.
- Expect new chapters in the “Money Boss technique” series twice a week until all of them have been moved from the old site.