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If I asked any group of Americans if they believe their lives would be better if they could increase their income, probably 90+% would respond, “Yes!”
But, in the reality of our full financial lives, it’s not just how much money we make. It’s how much money we end up with that determines our financial quality of life. In other words, it’s not just a matter of income. It’s a matter of what’s left over from your income, after your spending, to accumulate for the future.
In the SMART Wealth System™ course we teach you how to maximize what we call your Accelerator Margin™. That’s the money left over after you’ve paid all necessary expenses each month. It’s the only money most people can use to accelerate paying off their debts and building enough wealth to achieve financial freedom.
If you don’t maximize your Accelerator Margin™ and use it to accumulate wealth for your future, you’re dead in the water and will have to work until you die. So a growing Accelerator Margin™ is critically important.
And there are, obviously, only two ways to increase your Accelerator Margin:™
- Reduce your expenses
- Increase your income.
In the SMART Wealth System™ course we teach many specific ways to reduce your expenses, but that’s only half the Accelerator Margin battle. In this post I’m going to focus on the other half: increasing your income.
And because your Accelerator Margin™ is the result of a financial battle, what I have to say in this blog will not be sugar-coated. The only way I can help you is to be clear, direct, and honest.
The topic of one’s profession and income is highly personal. It’s been reported that most people would be more open to discussing their sex life than their finances. This is probably because people attribute a significant portion of their self-worth to their job and the income it produces. If this is true, there’s at least some probability I may offend you somewhere in this presentation.
While that’s not my intention, if it jogs you out of complacency, I’ll be happy to take the heat for it. However, be assured of this: I am making no judgments about you or your career in this presentation. I am simply offering facts upon which you can base your own judgments and make your own decisions.
So let’s get started.
My more than six and a half decades on planet earth have proven to me that there’s no magic to increasing your income. Neither is it rocket science. Your income is the result of a simple mathematical equation. The value of what you do each hour times the number of hours you do it. Notice that there’s nothing in the equation about how hard your work is, only how valuable it is. We’ll get into how that value is established in a moment.
First, let’s kick up a little dust. Try this fact on for size.
You are currently earning what you and the marketplace have agreed that you are worth.
You need to understand and accept this truth before you can harness the great opportunity it offers you.
But you might be screaming inside, “Hey…wait a minute, cowboy. I do not agree with how little I’m being paid.”
I respectfully disagree that you didn’t agree with the marketplace.
Let’s dig a little deeper to see why. All the dollars that will ever come into your life will come from other people. That’s not a revelation, I’m sure. But if you ask yourself WHY they would give you dollars, it becomes more interesting.
Since you are not a government taxing agency, other people will only give you dollars voluntarily, and logic would tell us that they will only voluntarily give you their hard-earned dollars in exchange for something of value that you provide to them.
That’s the foundation of my statement that you are currently earning what you and the marketplace have agreed that you are worth.
The Value Exchange
You see, earning an income is nothing more than a value exchange with the marketplace.
You provide the marketplace with value, usually through your employer. The marketplace then pays you, through your employer, the amount of money it has decided is fair for that value. We could break that down to say that the marketplace pays your employer what they have decided is fair for the value of the product or service your employer provides, and then your employer pays you what they have decided is fair for the value you contribute to the creation or delivery of the product or service your employer is selling to the marketplace.
If you have a business, this value exchange is more direct and clear. Your price is usually determined by what the market is willing to pay.
This is “agreement” is evident in the transaction of selling a house. You and your realtor might set an asking price, but the real value of your home is what someone is eventually willing to write a check for. When you come to that price through negotiations, you and the buyer have AGREED on the value of your house.
For simplicity sake, I’ll just cut out the middle transactions and say we are all compensated by the marketplace for the value the people in that marketplace attribute to what we do for them.
The marketplace has established ranges of value for each trade, profession, skill set, and academic credential…in a given geographical location.
That means that by choosing a career path you are choosing a potential income range, and by choosing to live in a given location you are potentially restricting that income range. When you make these choices you are making your “worth agreement” with the marketplace.
When you decide, “This is what I want to do for my work, and this is where I want to live,” you are agreeing to the marketplace’s valuation of that work in that location.
So…to increase your income, you essentially have five choices:
- Increase your value to your current employer.
- Find a better paying employer for your skill set and qualifications.
- Move to a higher paying location for your skill set.
- If your skill set or qualifications are your limiting factor, you can choose a new, more valuable career path and gain the qualifications to pursue it.
- You can start a business of your own.
Whichever of these paths you choose, it should be with the idea of providing more value to the marketplace, because that’s the only way you’re going to receive significantly more income. And, as with our house-selling example above, it is the customer, the buyer, the marketplace who determines that value.
In other words, you can’t say to the marketplace, “I want to do this job or business, and you have to pay me what I want.” The only way it works is that you have to find out how much the marketplace values various occupations or businesses, and find a way to become something the marketplace values as much as the income you want to receive.
So which option should you choose?
It depends on what factor is limiting your income:
- Your performance?
- Your current employer?
- Your skill set and/or qualifications?
- Your location?
I don’t have the space to deal with these factors in detail in this blog post, but the good news is that we have a comprehensive training on the four income-increasing pathways, and we want to give it to your for free. Just CLICK HERE to get the free “How to Increase Your Income” training package with our compliments.
We look forward to helping you get on the right track towards a much more prosperous future. It won’t necessarily be easy, but it will be worth it! And it can be easier if you know the steps to take. You’ll find them in our free “How to Increase Your Income” training.