3 Ways to Make More Money – Making of a Millionaire
Pulling the income lever of Financial Independence
I’ve written in the past that nearly every issue in personal finance can be solved by pulling one of the two levers of personal finance. Those levers are the income lever and the saving lever. In this article, I will discuss three ways to pull the income lever by making more money.
Why the income lever is important
Ask yourself a simple question. If the amount you cleared on every paycheck were to double, would you be less stressed about money? Of course, you would.
The higher your take-home pay, the more breathing room you would have in your monthly budget. The average family spends nearly two-thirds of their income on “the big 3” expenses; housing, transportation, and food. That does not leave a lot of money left over for things like saving for retirement, paying off debt and spending money on things they value.
Let’s say you are like a lot of people right now. You can cover your living expenses each month, but there is not much left over to save and grow your wealth. Pulling the income lever will allow you to allocate every additional dollar towards your financial goals.
How to pull the income lever
There are endless ways to make more money, but here the three basic ways to make more money.
- Earn more per hour.
- Work more hours
- Start a business.
Let’s review the benefits and trade-offs of these ideas.
Earn more per hour
Let’s not overcomplicate things here. Personal finance is about managing two limited assets, time and money.
Where do we get most of our money from and where do we spend most of our time at? Our jobs.
If you want to better manage your time and your money, you need to make sure you are maximizing the amount of money you make for every hour you give to your job.
The simplest solution is to ask your boss for a raise. Here’s a quick tip on how to go about doing that. When making the case for a raise to your boss avoid phrases that start with “I”.
- “ I want”
- “I deserve”
- “I need”
Your boss is likely to reply “I don’t care”.
Instead, focus the conversation on the value you provide to your employer. Your employer isn’t paying you for your time, they are paying you for the value you provide during that time.
Don’t make it about what you need, make it about what your employer needs and how you can help provide those needs.
If you can make the case that your salary is the best bargain your company is receiving, you’ll be in good shape to ask your boss for a raise.
If you’ve already hit the earnings cap for the current role you are in then asking your boss for a raise might not do you much good.
If you’ve maxed out in your current role, start looking at jobs that pay more within your organization. Most companies put out internal job postings that display the description of the job, the compensation provided and the credentials and experience required for that job.
I would start by having a look at the job postings and see what experience and credentials are required for the job you want and begin working towards meeting those requirements.
If you can’t get a raise from your current role and there is no opportunity to move up the ladder within your organization, perhaps it’s time to start thinking about switching companies or careers.
Work more hours
Once you’ve exhausted your options for making more money per hour of work, your next best option to make more money is to simply work more hours.
There are three ways to start working more hours.
- Work overtime hours.
- Pick up a side hustle.
- Get a second job.
Again, let’s not overcomplicate things. If you work at a job that allows you to pick up overtime hours, that is the simplest solution.
The added benefit of working overtime hours is that depending on your local labor laws you may be entitled to increased pay if you cross a certain threshold of hours worked.
If overtime isn’t an option for you, the next best way to pick up more hours is to find another job. This can come in the form of a side hustle or a second “job”.
I prefer a side hustle to a second job.
If you have a side hustle like driving for Uber, you can pick when you work and when you don’t.
When you have a second job, that will likely come with set hours at a particular location which may make it inconvenient or impossible to fit in your already busy schedule.
Start a business
The final way to generate more income is to start a business. What constitutes a business can almost mean anything from starting a blog to investing in real estate to set up a brick and mortar.
Starting a business is the embodiment of the risk vs reward trade-off. You are not guaranteed to make any money when you start a business. Many people who start businesses lose money.
When I started my first online business a few years ago, I worked hundreds of hours and invested thousands of dollars and never made a dime.
I don’t say this to discourage you but if you start a business you need to do so with full knowledge of the risks.
Starting a business also provides unlimited upside to your income potential. The richest people in society are business owners.
Starting a business used to mean you would be required to have a ton of money to cover startup costs. Depending on what business you want to start, that may be true.
However, there are plenty of ways to create an online business that can generate additional income without big startup costs.
- Selling on Amazon
- Setting up an online store on Shopify
- Turn your knowledge into an online course
These are just a few examples of ways you can create online businesses.
In my online business, I have two products.
1. Writing Articles.
2. Online courses.
Creating both of these products can be done on my schedule. There is no set time or location I need to do this work. All I need is my laptop and inspiration.
The flexibility of an online business allows you to dip your toe in the water and work on it part-time. That means you do not need to quit your job. You should not quit your job for an online business that isn’t profitable.
If your willing to work on evenings and weekends, you can maintain the income from your day job and add the income from your side business. It’s a win-win.
If you’re looking to increase your income it’s best not to overcomplicate things. You have three basic options.
- Make more money per hour.
- Work more hours.
- Start a business.
How are you planning on making more money this year? Let me know in the comments below.
This article is for informational purposes only, it should not be considered Financial or Legal Advice. Not all information will be accurate. Consult a financial professional before making any major financial decisions