Download (direct link):
And that's not the only way investing in learning a financially valued skill is like investing money. Because once you learn a financially valued skill, the amount of money you earn from it is mostly about leverage— about knowing how to apply that knowledge to increasingly lucrative opportunities. In other words, the same skill that can earn you $130,000 when your business is relatively small might earn you $260,000 or even $560,000 (or even 10 times that much) if you moved to a larger business or your business grew. Your knowledge compounds over time and so can the opportunities toward which you apply it.
This is what you want—to be able to earn a great deal more money in the future for the same amount of work you are doing now. That can best be ensured by learning how to make your business grow and then enjoying the salary raises as it does.
Step 4: Radically Increase Your Personal Income 123
or more. And your idea can’t be a one-time deal. The $250,000 extra your work has to contribute must be generated again and again in the future.
To maintain a much-higher-than-average salary, you need to have a very substantial effect on your company’s growth in income.
This rule of thumb is true for most growing companies. It may not be true for a business that is large and static. Large businesses, as a rule, offer stability of employment and predictability of income in place of high salary curves. It stands to reason if you think about it. Big companies attract smart, hardworking but sometimes conservative people. There is sometimes more good talent than is needed.
In general, you’ll have the best chance of radically increasing your income if you work for a business that has
• Significant sales (in the millions or, preferably, tens of millions of dollars)
• Reasonable profits (what “reasonable” means depends on the industry)
• A recent history of growth (both in sales and profits)
• A vision of further growth
And, as I suggested, a small number of employees (so your contributions will stand out).
If the business that you are working for meets none or few of these criteria, start looking elsewhere. Unless you can single-handedly turn such a business around, there won’t be enough financial resources available to meet your financial objectives.
Your ideal situation would be to position yourself as an invaluable profit producer in a small, fast-growing, and highly profitable company. If you can do that, great. If not, don’t worry. There are plenty of other ways to dramatically boost your income.
Changing Yourself into a Profit Producer So . . .
If you want to make a superhigh income, you have to become a supersignificant contributor to your company’s bottom line. That means being an influential force in product creation, marketing, sales, or profit management.
124 AUTOMATIC WEALTH
WEALTH PRODUCERS VERSUS WEALTH WASTERS
In the simplest terms, there are only two things that you can do with your money:
1. You can save it.
2. Or you can spend it.
Saving your money increases your wealth. Spending it makes you poorer.
By the same token, there are only two basic roles that you can play as a worker:
1. You can produce profits.
2. Or you can reduce profits.
A profit producer is someone who creates a product, markets it, sells it, or manages the bottom line. A profit reducer—like it or not—is everybody else.
Yes, this is an oversimplification. Individual workers, at any given time, might be engaged in either or both kinds of activity. But when it comes time to reduce or expand the workforce and award raises, that binary perspective is in the back of every business owner's mind.
The key to long-term job security and big-time pay raises is to get your boss to think of you as a major profit producer. The only way you will be able to get your boss to do that is by actually doing it.
Want a big, $130,000-plus salary? Start generating big, million-dollar-plus profits for your business.
If your current job is outside any of these areas, you must either switch roles or expand your position so that it is directly involved in one of them.
This is not as far-fetched as it might seem. Let me give you two examples of people I know who have done that.
When I met Ted Johnson in 1998, he was employed as a midlevel manager for a direct-mail business I consulted with. I was impressed with him right away, because he had the courage to disagree with me at our first meeting. I had advised his boss to take a certain course of action regarding an advertising campaign. And although Ted was hardly a marketing expert at the time, he said, “That doesn’t make sense to me.” And so we discussed it.
Step 4: Radically Increase Your Personal Income 125
Ted wasn’t right. But his reasoning was sound and his instinct for marketing was apparent. I told his boss that she should groom Ted for a marketing position. Within a year, he was in charge of one of the products.
After that, there wasn’t a week that went by when I didn’t hear from Ted. He was constantly bombarding me and his boss with all sorts of ideas about how to sell more product, increase customer satisfaction, and so on. Not all of his suggestions had merit. But those that did were implemented.