How to Master Money & Wealth | Generate a Higher Income by Creating More Value

Although a large part of wealth creation entails proper saving and investing of your money, the path to financial abundance becomes far easier when you have an income that allows you to consistently make large contributions to your investments while still enjoying the lifestyle you want.

So how do you go about creating a large income?

First, consider how most people are taught to earn money.  Social conditioning says to go to school, get good grades, go to college, get a job and get a steady paycheck.  Now, if there is a particular occupation that you want to have like being a teacher or a video game developed, this is a great way to do something you love.  As far as making money goes, however, this is not the most intelligent way to go about things.  For a list of reasons why, check out 10 Reasons You Should Never Have a Job.

Instead of thinking of generating income by trading your time for money, it is more useful to think of income in terms of value.  Your income is proportional to the value you provide to others.  So, if you want a higher income, you need to create and deliver more value to others.

How to Create Value

The best way to deliver value to others and be paid well in the process, in my opinion, is to be an entrepreneur.  But how do you go about that process?  Clearly, creating your own business is a complex undertaking - something I can't cover in one article or even a series of articles.  What I can do is explain some simple, high-level consideration for creating a business.

1. Determine your interests - Starting your own business is not an easy task. It is something that requires hard work, dedication and perseverance to be a successful. So if it's something that you are going to do, it better relate to something you enjoy doing. So ask yourself, what do I love to do? What is it that I do that I would do for free? It is your passion and enthusiasm that will drive the success of the business.
2. Discover your strengths - A successful business will take advantage of your strengths while mitigating your weaknesses. If you don't already know where you excel, find out. What are some things that other people find challenging but you are really good at? What qualities do other people compliment you on? In what areas do you know that you are the best? What are your unique skills? Quite often, our strengths will follow from our interests. It is quite natural for us to spend a lot of time doing things that we like to do. Whenever we spend a lot of time doing something, skill develops over time.
3. Utilize your strengths with your interests to create value for others - Again, the basis of generating income is providing value for others. Knowing what you love to do and what you are good at, how can give something to others that provides value for them? The answer to this question is the foundation of your ability to generate income. Let's say you are interested in fashion and have a great sense of style. A simple way to provide value to others is to become an image consultant. The important thing here is to shift your focus from yourself to others. How can you benefit others?
4. Provide that value to as many people as possible - Assuming you have a quality product or service that provides value to others, your biggest challenge is likely going to be delivering that value to as many people as possible. Herein lies the importance of marketing. Anyone looking to become a successful entrepreneur should ensure that becoming a powerful marketer is on top of their lists of tasks. Fortunately, with technology today, reaching a large number of people with your product is easier than it ever has been (that's not to say it's easy though!). By leveraging existing distribution channels, you can reach a lot of people with your product or service. In the previous example of an image consultant, they may generate income both by giving one-on-one consultation and by writing an ebook and distributing it on the internet.
5. Leverage the value you created to generate income - This is where you finally make your money. Once you've delivered value to other people, you can use that create income for yourself. You can do this both directly and indirectly. A direct way of leveraging value is charging for it. You sell someone a product and receive money in exchange. However, there are also indirect ways to leverage your provided value. Consider the example of blogging. You provide valuable content to your readers and generate a lot of traffic. In turn, you can sell advertising on your site and based on your traffic, you receive money from advertisers.

What If You Are an Employee?

So what do you do if you currently have a job?  Do you just quit today and start your business? Maybe.  But for most people, this is not a realistic option.  You may need the income your job provides while you start your own business or maybe you just have no interest in being an entrepreneur.  What do you do then?

In this case, you can still consider yourself self-employed with your customer being the company you work for.  You need to find a way to provide more value for your company.  You must become more valuable to your employer.  You do this by increasing your skills and consistently increasing your job performance.  One way to do this is to consistently read.  Reading books relevant to your career will improve your performance. Make sure you are consistently generating more value for your company and going the extra mile.

Chances are, at this point in time, your income is determined by the amount of time you spend working.  However, spending more time working is not efficient way to generate income.  Try to find a way to link your income to your results.  You may have to get creative in order to do this.  It may require that you get paid on commission, a percentage of revenue or stock options.  If you are serious about this, many employers will go for such an arrangement because it ensures that they always get their money's worth.

An Example from University

 To illustrate the difference moving to a value-driven income can make, I will give an example from my own life.  In the summer after my second year of university, I worked as a research assistant.  I was paid a fixed salary for the summer working a typical 8 hour day.

In contrast, in the summer after my third year of university, I worked for myself as an entrepreneur.  At the beginning, I often worked long hours (12-16 hour days).  However, after the first month, I cut down my working hours to 4-5 hours a day.  My income was directly tied to the value I was providing other people.  At the end of the summer, I had worked fewer hours than I did the previous summer but had earned 8 times as much money.  Not just a little bit more.  8 times as much.

Why was I able to make so much more money in the latter case?  I delivered far more value and I linked my  income directly to the value I was providing.

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The takeaway message from this part of the series is to increase your income, you must create more value.  The best way to do this is to have your own business.  However, if you are an employee, you can still increase your income by generating more value for your employer. 

For the next installment, I will post a list of 25 ways to create value for others.

This post is part of a series on mastering money & wealth:

1. Intro
2. Raising Your Financial Awareness
3. Commitment and Focus
4. Wealth Mindsets
5. Clean Up Your Limiting Beliefs About Money
6. Generate a Higher Income By Creating More Value
7. 25 Ways to Create More Value
8. Create Multiple Streams of Income
9. The Key to Financial Freedom
10. Money Management