Now, I know that there are other important aspects of managing your money. Saving is critical, and so many personal finance enthusiasts have a natural inclination to focus on frugal choices and living within one’s means. Believe me, if you’ve read my posts in the Squirreling Gone Wild series, you can see that I can relate
Beyond that, we need to invest our savings. I’ve written before about how the rate of return is important to focus on, and how it can make a huge difference. Thus, investing is a vital part of our personal finance strategy.
There are other aspects we should consider as well, such as risks. But when you put it all together, before we can save and invest our money, we need to make money first.
I look at our earning power as something like the fuel that drives the wealth engine. Without incoming cash flow, we simply can’t get to where we want to go. If we’ve already reached a comfortable destination later in life, and the car stops, at least we’ve reach where we need to go. But we’ll be hard-pressed to get there without that engine working properly. So, we need income!
Exploring this further, I’ve come up with 10 things that we can do to enhance our earning power. There are probably countless other things to add to this list (please feel free to leave them in the comments below), and this might be a somewhat unconventional way to look it. But this is, I think, is a well-rounded starting point:
Understand the market
Okay, this might not be the first thing that one might think of. But the reality is that goods and services generally yield what the market will pay. So, if we are in a line of work that doesn’t pay well, we won’t make as much as we could if doing something that paid more. The concept of supply and demand for income is one to think about, recognize, and take advantage of!
Think career, not job
We should of course be thankful if we have a job, given that plenty of bright, well-intended people are out of work at any given point in time. That being said, I’ve noticed over the years that people that truly think of themselves as having a career rather than a job or series of jobs tend to advance more quickly in their field. To go back to the analogy of the engine, if income is the engine driving our finances, one’s career is the engine driving income
Value a formal education
I know that college is getting more expensive, and jobs are absolutely not guaranteed to anyone just because of a degree. While some spin this as meaning that college doesn’t pay anymore, I think it’s the opposite. To me, an undergraduate degree is more important than ever. In many fields, a graduate degree is essential as well. Valuing education while being cognizant of the cost/benefit proposition of different schools and degrees is the way to go.
Always keep on learning
Yes, the aforementioned formal education is a starting point and entry ticket to get started. Beyond that, we need to realize that we’ve only gotten started, and that learning doesn’t really stop. I’m not sure if this matches your experience, but to me it seems like the rate of change in technology and business in increasing. Thus, we have no choice but to keep learning about different business models, technology, software, and the like.
I can’t really give any stats on this, but can go by my own observations and empirical evidence accumulated over time. In that regard, it seems to me that a trait of those who can really succeed is the ability to be persistent. This means keeping focused on a goal and being able to keep on going despite obstacles and frustration.
Given that things seem to be changing at a faster rate it would seem to be a good idea to be adaptable. I’ve seen reorganizations in the workplace, layoffs, and many other examples of how things can often be fluid. Since change is a constant, we might as well try to be good at embracing it! Admittedly, this is something that is a work in progress for me, and I know there are people better at this, but working on it I sure am.
As far as networking is concerned, what I mean is that it can be very helpful to regularly do so. Again, this wasn’t something that came naturally to me but I’ve learned to embrace it by trying to think of ways to give and help without expecting anything back. Ultimately, it indirectly helps (though not the explicit intention), as opportunities are often presented to those we know or to whom someone we know can recommend. There is much to respect about having a strong professional network.
Maintain an entrepreneurial mindset
People have jobs in many cases because their work is needed in order to make money for the organization or to save it money. Keeping that in mind, if we demonstrate that we can improve the bottom line, it can make us more essential and valued. Plus, for those who take it to the next step, they could have a side hustle to diversify and even supercharge income.
Don’t rest on your laurels
I’m sure we’ve all seen this concept in play. What comes to mind for me are companies or communities that might have had great success in the past but then got a little bit too comfortable. It seems like to progress we probably want to keep our “edge” and always think forward.
Do you think that this should have been at the top of the list? I can see how this might be the most important thing we can do. If we can’t stay healthy and have to deal with medical issues, we might not be able to stay in the game. Not only is keeping away from major ailments critical, but it’s also important to make the right decisions each day. I don’t know about you, but I tend to work so much better and more productively when I take care of myself. This means getting a good night of sleep each night, and I’m convinced that there is some correlation between sleep and wealth. Also, at least for me, eating the right food helps productivity.
My Questions for You
What do you think of these ways to improve earning power?
Do you focus on any of these in particular?
Do you have any others to add?