Some people think that money is the root of all evil. They think having money is bad, or wrong. I disagree. I see money simply as a tool. Money in itself is neither good nor bad. It is used for whatever the owner wants to use it for. For me, money is a tool that brings me the things that I need in life, and some of the things that I want in life. I don't mind having money. In fact, I find it quite useful. And apparently I'm in good company, as many other people like the idea of having money also.
The problem usually isn't a question of whether someone wants money. There aren't many people who wouldn't enjoy having money. It is, instead, a question of how they can get a lot of money. In many cases, people work and work and work, in an effort to make more money, and they don't get anywhere. Is it because of lack of effort on their part? No, not usually. It is because they aren't following money making principles.
Money is ultimately just a means of exchange. It enables us to trade our various products and services with each other without having to barter with a dozen people before getting what we want. We can see a product in a store and trade some money for it. We can then work in order to make more money, which we can trade in for more stuff at the store. Money is used as a middle man. A common form of value that everyone can agree upon.
When you earn money, what you are really doing is providing something of value in exchange for money. For example, you can get a job and trade in your time for money. You can have a garage sale and trade in your stuff for money. You can charge someone rent for staying in your house, apartment, etc. Earning money is really an exchange where you trade in something you have that is considered valuable in exchange for money.
You can earn more money by following a certain set of principles. I call these the Money Making Principles. These principles are aimed at optimizing the exchange of value for money. In many cases, these principles don't actually involve working harder, or longer, on your part. Instead, they involve being aware of the principles, and aligning your actions with them.
The price that people are willing to pay for something is ultimately determined by how much the customers are willing to pay for it. It is determined by how valuable they believe the product or service is. It has nothing to do with how valuable you believe that it is. It has everything to do with how valuable the customer believes that it is. In order to fetch the highest price for the value that you're providing, you have to show the customer how valuable it is.
Many people are already doing this, albeit unconsciously. If you're an employee working for a company, that company is your customer. You are exchanging your time for money, and how much money you make is dependent upon how valuable they believe that your time is. Employees increase this perceived value in various ways. They dress nice for interviews. They smile and appear confident. They dress up their resume, and appear eager and ready to work. At work, they try to appear busy, even if they aren't actually doing anything productive. Employees are quick to point out how hard they work, or how long they stay at the office. This is all done in order to increase their perceived value so their customer, the company they are working for, their boss, or their managers, will give them more money.
Companies and businesses maximize their perceived value by running advertising campaigns in order to increase their company image, or the image of their product. In the commercials, the hamburgers are always perfect. The cars are always shiny. And all of the benefits of ownership are always pointed out. A 10 year warranty. Great customer service. Good reliability. These things are all done on purpose, in order to increase the perceived value of the product so the customer is willing to pay more for it.
Perceived value has nothing to do with actual value. People who know how to work the system have gotten very good at taking advantage of this. The executive at work, who wears a suit and tie, smiles all the time, and always appears confident. Yes he knows how to work the system. He could very well contribute absolutely nothing to the organization. But people think that he's valuable. And he gets paid according to this perception of value.
It's all about how valuable other people perceive something to be. If someone thinks something is valuable, then they will be more likely to pay a higher price for it. It doesn't matter if you're selling hamburgers, cars, your time, or some work that you created. If other people think it's valuable, they'll pay you more for it.
Even if you have a good product, at a great price, and do an excellent job maximizing its perceived value, your customers may not be sold. Not everyone has the same perception of values. No matter how hard you try, you're not going to sell a hamburger to a vegetarian. It just isn't going to happen. Everyone has their own perception of values. They have their own wants and needs, which may not be easily influenced by you.
If you try to sell a hamburger to the first person you see, and if he just happened to be vegetarian, you may encounter great difficulty. Believe it or not, but some sales people will still try to sell meat products to vegetarians. Instead of seeking out other customer's who actually want their product, they repeatedly try to sell to the vegetarians. Then they wonder why they can't make the sale.
In order to get the greatest amount of money out of the sale, you have to find the best customer. The one that really wants and needs what it is that you're offering, and who is willing to pay for it. In the case of the hamburger, you would look for people who really love hamburgers. Preferably, you would find someone who is starving and loaded with cash. You would be amazed at how much money a starving millionaire in the middle of the desert would pay for a simple hamburger.
In the case of selling your time or skills to a company, you want to find a company that really needs and wants people with your skill set, and who are willing to pay top dollar for what you do. If you go to work at the first company that offers you a job, you may be trying to sell a hamburger to a vegetarian. Certainly, the company may hire you. But their benefits may be crappy, and the compensation may be horrible. The only way to really know that you're getting paid what you're worth is to shop around and collect offers from other companies. You have to find the best customer, or customers, to sell your product and services to.
The money that you make should be in alignment with the value that you provide. If you do good work but never demand to be paid accordingly, then someone else is making off with your money. Investors. Executives. Managers. Other employees. Customers. Someone else is getting rich at your expense.
The biggest and most common mistake that people make in this regard is taking a job that pays by the hour. Sure, there may be a few benefits. You get a consistent pay check. You get to take advantage of systems and capital that are already in place. It doesn't have any upfront costs, and the only thing you have to lose is a pay check. But in the long run, if you're a good worker, someone else is making off with the rest of your salary, because the money that you make is out of alignment with the value that you create. You're a generous soul, but you're giving your money away to the wrong charities.
If you get paid by the hour, then no matter how hard you work, you are still only going to get a certain amount of money per hour. No matter how much value you actually create in a week, you still only get paid your weekly wages. The rest of the value that you create is always getting siphoned off to pay for other things and people. The office building that you work in. The manager who is telling you what to do. And the owners of the company. In many cases, the owners of the company will continue to profit from the work that you did even after you no longer work there. The products that you designed. The programs that you created. The systems that you optimized. All of these things have lasting value that you will never get paid for.
Whenever you fail to charge a fair price for something that you are selling, you are not in alignment with this principle. This doesn't just apply to your time and energy. It applies to everything that you sell. Your used car. Your house. Your investments. Your kitchen table. Whenever you sell something for less than it's actually worth, you're getting screwed by someone, somewhere. If you try to sell something for more than it's actually worth, you may wind up screwing yourself, as you may never find a buyer. It is a delicate balancing act of aligning the money that you are receiving with the value that you are creating.
Everyone is blessed with different skills and abilities. They have different interests, and passions. Some people may be more physically fit than others. Some people may be more intelligent, or knowledgeable in certain areas. Everyone has something different to offer to the world.
Some of these things pay more than others. Some jobs are in high demand, while other jobs are in low demand. Most people can actually perform several different jobs, but will get paid significantly more for performing a certain kind of job over another. A skilled mechanical engineer, for example, could make hamburgers. But he would likely get paid more for designing and engineering new products.
In order to earn the most amount of money, you have to figure out what the best job for you is. What do you naturally excel at? What are you passionate about? What do you enjoy doing? What kind of skills do you posses? Answering these questions will help determine what you're naturally good at. By aligning your value creation with something that you naturally excel at, you can create more value and reap greater rewards.
There's an old saying that you should do what you love, and then find someone who is willing to pay you for it. This is good for keeping people happy, but it may not always be practical in the real world. I enjoy watching movies, playing video games, and reading books. But I have yet to find anyone who will pay me to do these things. It's good to find something that you're passionate about. But if other people don't see any value in it, you may not be able to keep it up for long. Finding your ideal method of creating value for others involves finding a balance in yourself first, between doing what you love, and getting paid for what you do.
All other things equal, how much money you make should come down to how much real value you're creating for other people. The best way to create more value for other people is to upgrade your own skills and abilities. If you're making hamburgers, find a way to make good, quality hamburgers faster. And then convince others to pay you accordingly. If you're looking to get into a higher paying job, then go to college. Go to a trade school. Get the skills necessary in order to do the job well. If you want to become a writer, then try practicing your writing skills. Go to some writing classes and seminars. Learn how to become a good writer. Whatever it is that you want to do, go learn how to do it. Whatever it is that you're currently doing, learn how to do it better.
Many people vastly underestimate their own potential. They never try, because they are too afraid of failing. They aren't motivated enough to put forth the energy required to accomplish their goals. Instead, they mope around, wallowing in their own misery. They never climb the mountain because they never take the first step.
Everything in life involves taking that first step. Is there a job that you're really passionate about, but don't have the skills or abilities required to do it? Take the first step. Go to college. Get the skills. Get the job. Provide the value to others, and reap the rewards of your labor.
Would you like to get paid more? Go ask your boss what you can do to make this happened. Go ask your customers how you can make your product better, or how you can improve your service. Implement their ideas. Provide better value. Reap greater rewards.
Everything always starts with the first step.
Carpe Diem.