{"id":235706,"date":"2018-03-22T05:00:28","date_gmt":"2018-03-22T12:00:28","guid":{"rendered":"http:\/\/getrichslowly.org\/?p=235706"},"modified":"2023-12-05T14:25:28","modified_gmt":"2023-12-05T21:25:28","slug":"earn-more-money","status":"publish","type":"post","link":"https:\/\/www.getrichslowly.org\/earn-more-money\/","title":{"rendered":"How to earn more money: Three ways to boost your income"},"content":{"rendered":"
There’s no question that frugality is an important part of personal finance<\/a> — you can’t outearn dumb spending — but trying to get rich by pinching pennies is like trying to win a car race by conserving gas. If you want to reach the finish line fast, you can’t be shy with the accelerator!<\/p>\n Today I want to explore a better way to boost your savings. Let’s talk about how you can earn more money. Whether you’re self-employed or working for somebody else, your income is determined by three factors:<\/p>\n If you want to earn more money, you have to become more valuable in the job marketplace<\/strong> — and<\/em> demonstrate that value for the market to see. Let’s look at how to make that happen. <\/p>\n In the United States, education has a greater impact on work-life earnings<\/a> than any other demographic factor. Your age, race, gender, and location all influence what you earn, but nothing matters more than what you know. That’s great news, really, because you have total control<\/em> over your level of education.<\/p>\n How much does schooling matter? Here are some numbers from the 2014 Consumer Expenditure Survey<\/a> conducted by the U.S. Bureau of Labor Statistics:<\/p>\n <\/a><\/p>\n The average college graduate earns twice as much as his friend whose education ended with high school.<\/p>\n Even a two-year degree from a community college helps. The average worker with an associate’s degree earns twice<\/em> the annual income of a high-school dropout and 50% more than somebody with only a high school diploma. Two years of community college typically boosts income by $20,000 per year. (That’s almost a million dollars<\/em> during a typical 40-year career!)<\/p>\n Similar research from the Current Population Survey shows that education also affects unemployment rates<\/a>:<\/p>\n <\/a><\/p>\n A college degree doesn’t guarantee<\/em> you’ll earn more money, of course. Some philosophy majors wind up working in convenience stores for the rest of their lives, and some high-school dropouts become billionaires<\/a>.<\/p>\n Outliers aside: The more you learn, the more you earn.<\/strong><\/p>\n The best time to pursue education is at the start of your career, when you’re young. The next best time is now<\/em>.<\/p>\n I know it can be tough to find time and energy to go back to school once you have a family and career, but it can<\/em> be done. Let’s look at some examples:<\/p>\n If you can’t commit to college, it’s still possible to improve your knowledge and skills through an ongoing campaign of self-education.<\/p>\n I’m a vocal proponent of self-directed life-long learning. I’m always reading books and blogs about personal finance. I take writing classes at the local community college. I listen to podcasts and online courses. I attend conferences to learn from my colleagues. And as I write this, I’m in the middle of a $2000 web-based course about how to build a better online business.<\/p>\n The more you know and the more you grow, and the more valuable you become in the job marketplace.<\/p>\n Tip:<\/strong><\/em> A key change in my own life was moving from passive\/consumptive hobbies — television, computer games, watching sports — to active\/productive hobbies. I’m happier when I’m reading, writing, or doing web design (or exercising or building something) than I was with less-productive pastimes. And<\/em> these things help me earn more money.<\/p><\/blockquote>\n Education isn’t the only factor that affects your income. Your pay is also based on the quality and quantity of your work. If you want to earn more, you can increase the number of hours you work, your output per hour, or the value of your output.<\/p>\n The quickest and easiest way to boost your income is to increase the number of hours you work each week. That might mean going from a part-time employee to a full-time employee. It might mean working overtime. For many folks, it means finding a second job.<\/p>\n Working two jobs can be tough, especially if you have young children. And some people feel like a second job is beneath them. To overcome these objections, recognize that a second job is not<\/em> a life sentence. It’s a way to supercharge your income for the short term.<\/p>\n If you can’t add hours to your workday, you can enhance your value by doing more work in the time you have. If you’ve been producing ten widgets per hours, challenge yourself to produce twelve. If you’ve been making forty sales calls each week, find a way to do fifty.<\/p>\n When you produce more, you’re worth more.<\/strong><\/p>\n In addition to increasing the quantity of your work, it pays to increase the quality of your work. This may seem obvious, but you’d be surprised at how many people “go through the motions” at the office every day. You’ll never get ahead if you’re only faking it.<\/p>\n It’s tough to provide general advice on how to do better work. “Better” varies from job to job. But you<\/em> know what quality output looks like for your profession. (If you don’t, that’s a problem you should solve immediately.)<\/p>\n Note:<\/strong><\/em> Here’s a non-intuitive way to enhance the value of what you do: Change where you work. Maybe that means moving to a different position within your current firm. Maybe that means taking a job with a competitor. Or maybe that means changing careers completely. (When my ex-wife decided she wanted to earn more money, she left her career as a science teacher to become a forensic chemist. Same skillset, completely different job.)<\/p><\/blockquote>\n Your income is dictated by the value of your work, and the value of your work is determined by your education and productivity. But there’s one last piece to this puzzle. Your income is also influenced by how well you market yourself.<\/p>\n Like it or not, you<\/em> are a product. Your work and expertise are a commodity.<\/p>\n Your employer wants to pay as little as possible for your work. Your goal, on the other hand, is to be paid what you’re worth. To bridge the gap between these two numbers, a smart money boss negotiates his salary.<\/p>\n Think of it like this. When you shop for a new car, you try to pay as little as possible, right? You might need that automobile, but you’re not going to pay sticker price if you don’t have to. At the same time, the dealer does its best to get you to pay more.<\/p>\n Your boss is the car buyer. She needs<\/em> an employee but would prefer to pay less than “list price”. You’re like that car dealership. You want to convince the buyer — your employer — to pay a premium price for your services.<\/p>\n You can increase your lifetime earnings by half a million dollars — or more — if you learn the art of salary negotiation.<\/strong><\/p>\n It’s one thing to know that you should<\/em> negotiate your salary, but it’s something entirely different to do it. What’s the trick?<\/p>\n In his excellent book Negotiating Your Salary: How to Make $1000 a Minute<\/em><\/a>, career coach Jack Chapman promotes a five-step process that almost anyone can use:<\/p>\n\n
<\/span>The More You Learn, the More You Earn<\/span><\/h2>\n
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<\/span>Work More. Work Better.<\/span><\/h2>\n
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<\/span>Sell Yourself<\/span><\/h2>\n
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