Like it or not, money is a reality we all have to face. Most of us understand that the things that are really important in life are experiences, friends, and family, but it is hard to escape the fact that financial freedom gives you a lot more time to make the most of those things. Couple that with the fact that not being able to pay your bills is one of the most stressful experiences a person can have, and you begin to understand that the ability to generate income is a key skill for most people. So what can you do to most effectively increase income?
1. Make a plan.
As with most things in life, the key to making money is to have a good plan in place. Having a set of instructions to follow will keep you on task and help you feel like you are making progress even on days when it is hard to see any movement. Each week, think of what you want to accomplish and write down the things you will need to do to get there. Break down the steps you will take to reach you goal and assign each of them to a day on your calendar. When that day comes, make sure you are doing everything you can to move towards success.
2. Prioritize your actions.
It is a simple fact of life that 20% of the work you do will be responsible for 80% of the success you achieve. Whether you call it the 80/20 rule or Pareto’s Principle, the lesson remains the same: you should prioritize the 20% of your work that is likely to lead to success. Identify and focus your energy on proven sources of income or projects with a good probability of paying off big time. You still need the other 80%, which is usually side projects or ideas in the making, but build your day around your core projects and avenues for success.
3. Try something new.
Nothing will erode your confidence like spinning your wheels on a project that ends up going nowhere. If you have committed a lot of time to a project that isn’t paying off, don’t be afraid to walk away. There is a principle in psychology called justification of effort that says people are more committed to things that they have invested a lot of time and energy in already. This can lead to stubbornly wasting your time on things that will never pay off. Know when you cut your losses and move on to something new.
4. Say “no.”
Your time is the most valuable resource you have and overextending yourself will drain it. Taking on too many projects will also lead to increased stress and less opportunity to pursue exciting opportunities. Cultivate your ability to say no to things. When a new opportunity comes along, ask yourself if the investment of time it requires is likely to pay off in a way that you feel is appropriate. If the answer is no, walk away.
5. Surround yourself with success.
It may seem counter-intuitive, but a great way to achieve financial success is to act like you already have. The notion of “fake it until you make it” actually holds some water. If you spend your time hanging out with successful people in places where money tends to concentrate itself, you will stumble into more opportunities to achieve success yourself. Make friends with people who have already achieved what you hope to achieve and use those ties to your advantage.
6. Be a leader.
A well-known key to success in business and in life is the ability to recognize an opportunity before anyone else. With that in mind, you should always be on the lookout for the next great path to success. Keep your mind as open as possible and never stop engaging with the world in creative ways. Expose yourself to as many conflicting perspectives as you can by reading books to disagree with and taking meetings with people you don’t like. Viewing something from all angles is the best way to really understand it and will help you blaze a new trail.
7. Understand time versus replication.
The idea of time is so important, it is worth mentioning again. It is the only resource you can’t do anything to change. No matter who you are or how much money you make, there will still only be 24 hours in a day. For that reason you should focus your energy on sources of income that you can easily reproduce. Do something once and then replicate it as many times as possible to bring in the most money. This is the philosophy promoted my creator of the Dilbert comic strip Scott Adams in his book How to Fail at Almost Everything and Still Win Big and it holds true for you too. Now he makes a living drawing a single comic and having it published in thousands of newspapers all over the world. Time is valuable, so make sure your work transcends it.
Featured photo credit: 401(K) 2012 via flickr.com