You’ve been on a quest to get your money game straight; you read financial websites, watch money shows and buy lots of books. Perhaps you’ve even talked to friends and family—or even an advisor—about how to improve your finances.
But you still find yourself with more bills, debt and problems than actual money.
Could all the information you’ve devoured be wrong?
But consider this: Maybe you’re focusing on the wrong thing. Much of the financial information we consume focuses on saving money, reducing expenses and living frugally while completely ignoring ways to increase income.
Consider what I call the golden formula of financial freedom:
Money needed for wealth creation = Income – Expenses
In other words, spend less than you make and you’ll be on your way to financial freedom. Too often, however, we focus all of our attention on reducing expenses through frugality while ignoring ways to increase our income.
The problem with this, which you’ve likely already discovered, is that you can reduce your expenses by only so much. There is a limit to how much you can cut your spending, but there is no limit to the amount of money you can make.
Don’t get me wrong. Being frugal and reducing expenses is important, but it should not consume all of your effort. The most financially savvy among us concentrate on both reducing expenses AND increasing income.
My belief is that 50 percent of your effort should be spent finding ways to reduce expenses while 50 percent of your effort should be focused on making more money.
So how do you increase your income?
1. Look to your current job.
Are there new skills you can learn that will lead to a raise or promotion? A recent Money magazine article highlighted the 21 most valuable career skills that can help you land more money. For example, learning and mastering SAS (Statistical Analysis System) software, for instance, commanded a 6.1 percent pay premium. Some companies will even pay you to obtain additional skills, certificates or education.
2. Take advantage of the skills you use every day and turn them into money making opportunities.
This is truly where we sell ourselves short. You may think you have nothing to offer, but truth be told, each one of us possesses skills and talents others would pay handsomely to acquire.
A close friend of mine hires a reading coach to help his 6-year-old with her reading. The reading coach is a teacher, who has turned her teaching skills into this lucrative side gig.
Are you a social media maven, Facebook fanactic or WordPress wonder? Could you leverage those skills to show local businesses how to use the Internet and social media to attract more customers?
Are you great at English? There are millions of blogs that need proofreading and editing.
Perhaps you’re proficient in photoshop. People would love to throw away their confusing manuals and have you tutor them instead.
You have the skills people would be more than eager to pay for. Just be willing to acknowledge and share them.
3. Turn your hobbies or passions into profits.
Tony Tremonto loved collecting sports memorabilia, but he quickly became disgusted with having to pay $65 to $85 to have his memorabilia framed. He decided to do it himself, then he started selling his services at sports card shows. Before long, he was opening his own retail shop. And it all started with a hobby.
Do you have a passion you can turn into profit? For instance in you’re a serious sport fan, you could leverage your love of the sport by officiating at local league sports events.
For instance, if you’re a serious sport fan, you could leverage your love of the sport by officiating at local league sports events.
Maybe you enjoy collecting coins or stamps. Write an online guide or ebook to show others how to get involved in the hobby.
The possibilies for increasing your income are endless. It just takes a little bit of ingenuity and confidence in yourself and your abilites.
BMWK, what are some of the ways that you’ve increased your income?
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