Want to increase your income? Change the way you think
It starts with getting rid of limiting ideas. I often get irked by the phrase — the rich get richer, while the poor get poorer. It’s one reason that pushed me to quit social media last year. For a long time, I couldn’t quite place my finger on why it annoyed me. Or perhaps it had to do with the tone and association it had with acts of making money.
On one side sat the ‘greedy’ corporates, always out to get us and bleed us dry. On the other side sat the average working Joe, toiling away at the same old job for the past thirty years, being pushed out of his livelihood by machines, on top of everything else.
Then it hit me.
It was the over personification of other people’s life decisions by the internet that didn’t sit right with the growth mindset I was trying to adopt.
Money isn’t evil, nor is it good
Money is a medium of exchange. That’s why your banknotes are almost worthless in another country. You need to get them exchanged into the local currency for it to have value.
Your personal values and relationship with money also determine the actual value of the money you have.
According to this study on income and happiness, psychologists concluded that a person making $200,000 is approximately no happier than a person making $120,000 per year.
The current cutoff point for household happiness is $105,000 in the US. This is the satiation point — the point where you technically have enough to live a comfortable life with enough surplus left over to do the things you want.
The researchers built this study on the findings by economist Angus Deaton and psychologist Daniel Kahneman in this paper, originally published in 2010, that placed the satiation point at $75,000.
For many of us, the thought of making $75,000 today still seems farfetched. However, it is highly obtainable.
When you break it down, $75,000 isn’t that much. It’s approximately $6,250 per month — or $1,442 per week.
Or $205 per day.
The hard part is figuring out how to make $205 per day — or however much you need to be happy in your city and living situation.
There’s more to growing money than just having money
A lot of us go through life generating a straight line income, with slight increases over time to accommodate inflation and expected wage growth. The issue that many people have is that income is often not high enough to give the surplus required to enjoy life for what it is.
If you’ve got debt, the surplus is even smaller. Your happiness fund gets cut and eroded away through interest rates and repayments.
The general assumption is that the more you make, the higher that surplus band will be. Besides this, there’re more opportunities available, less financial worries, and general mobility to do, to think, and to just be.
When you fall into the trap of thinking the rich get richer, you are telling yourself that you don’t have the capacity to make more. You are as you are — unchangeable — and that the world should change around you instead.
To get out of the cycle of not having enough money, you need to get out of the cycle of blaming others for your plight. No one owes you more money just for the sake of it. The first step is to take ownership and to take responsibility for your own earning potential.
Sure, there are many people who inherited their wealth. Lucky them.
However, there’s a growing number of people who are also moving out of their current socio-economic status and into the space that allows them to live a more comfortable and happier life.
Information and learning are no longer regulated to those who can afford it. The Internet and local learning communities have increased the democracy of opportunities. Ad-hoc knowledge growth allows for targeted specialization in particular areas such as business and technology.
People who leverage this cross-border global democracy give themselves the ability to move ahead. They don’t get caught by the current financial situation they’re in.
Money growth mindset comes in many forms
Getting to that $205 a day mark is a major milestone. For an 8-hour workday, that’s about $25.62 per hour. If you can double your hourly rate, you only have to work 4-hours a day.
Working a day job will only generate a straight line output, regardless of your overall effort, skills, and general input.
The growth and appeal of hustling, side gigs, and passive income streams are that it has the potential to meet the daily minimum required with the lowest amount of hours required.
Before you can figure how to grow your money passively through investing, you need to figure out how to make more money.
Getting a pay raise for doing the same job at the same skill level is not true monetary growth. Moving into a different industry that offers a steeper growth slope with a higher wage ceiling is a better way to do it.
However, the issue with a traditional job that pays based on hours worked is that you’re limited and capped by how much you can physically work.
When you decouple that with endeavors that don’t tie your time with the final amount you make, the relationship with making money changes. Rather than selling your time, your hours become investments that stack up against future earnings.
This kind of work often generates active-passive income — that is, you still need to put in a certain number of hours to create a system that facilitates the generation of income even while you sleep.
Your hours are not worth the same
Yes. On a technicality, we all have the same amount of hours available at our disposal. But our life circumstances can also increase or reduce it accordingly.
If you’ve got kids, your hours are automatically reduced.
If you’ve got a low-paying job, your hours are worth less.
If you’ve got a high-paying job but have a high debt ratio, your hours may pay more but leave you with less because debt ate into your spending power.
Rather than thinking about how many hours you can sell, flip your thinking into how many hours you can save.
Then set your personal worth and work towards it.
When you want to be worth $100 an hour but take on jobs that only pay $15 without prospects of growth, then you are short-selling yourself.
If you aren’t able to command that $100 an hour, then you need to look at what those that can earn at that level are doing. There are a likelihood and a large discrepancy between you and them.
Being trapped under the glass ceiling is a cycle of performing the same patterns we’re taught
At some point, you’ll notice a glass ceiling.
It comes in the form of wage stagnation and no matter how much effort or work you put in; the increment is only slight. To get out and go beyond it, you need to do something different from what you’re doing. The world will not change for you — no matter how much you complain, protest, go on strikes, and whatever else.
What’s happening is that you’re protesting and complaining against a system that someone else created. If you’re not happy with the compensation for your time, the alternative is to leave.
Then it gives you two choices — find another system you’re happier with or create your own.
The thing with systems is that it is a collection of skills, leveraged in a way that generates more value collectively, resulting in generating money that gets redistributed between the workers (you) and the system makers (upper management or your boss).
When you go rogue and create your own systems, you will see gaps in your knowledge that filled by other people within the system.
When you start out, you might not have the funds to do so, leaving only you as the option. However, as your income generated by the system you created grows, you have the power to reduce the time load and give it to someone else. The difference between what you end up making minus the cost of delegation is what you keep.
The moment you get to this point, you get your hour back, and the money that someone or something else generates for you.
At its simplest, this is what the alternative to breaking the glass ceiling looks like.
Reframe your systems to recreate the financial situation you want
We’re all systems existing inside other systems. There are some things we can’t negotiate or change, like taxes and the law. The people that seem to have made it are those that have figured out the systems and how to create one that works for what they need.
Looking at your current systems can help you determine where your shortfalls are. Looking at the systems of others can help you determine what you need to change to get the results you want.
The hard part is looking beyond the dollar value generated by other people’s systems. Why? Because it’s just a distraction. The final dollar value results from the long-term growth of a system — in addition to optimizations, market captures, and any other information and situational things that occurred during the construction of the system.
The system doesn’t have to be dramatically big or require lots of initial funding to bootstrap. It can be small and grow like a seedling. Not every financial growth endeavor needs a crazy amount of fertilizer to grow. What it needs is good soil and someone to help it grow.