How To Make A Quantum Leap In Your Income

3 minutes read

]If you’re struggling with entry level wages, or haven’t seen a raise in years, you’re probably wondering how to significantly raise your income. Surely, there must be more to life than making median wage till your retirement day right? Well there is; but it’s important to step outside your comfort zone, and be ready to put in extra effort. Here are some ways that even new entrants to the workforce have boosted their income:

1. Make sure your financial plans involve both growth, as well as budgeting

If you find your income is stagnant, a common reason is a one-sided focus on budgeting. You may be disciplined in how you spend; but this alone is not enough to find financial freedom.

The reason is that there’s a limit to how much you can budget. Even with cutting out cab fares, expensive coffee, buying cheaper meals, etc., you will eventually get to a point where there’s nothing left to cut from your expenses. This places an absolute cap on

how much you can save, or set aside to invest.

Conversely, there is no theoretical limit on how much more money you can make. There is no ultimate ceiling, for instance, on how much you could possibly make from dividend returns, rental income, your own business, etc.

For this reason, it’s important to combine budgeting with active attempts at wealth accumulation. Besides just budgeting and saving, you should push yourself to invest and find returns, run side-businesses, or even take on a second job if you have the capacity.

Your monthly financial planning should not just have expenses planned – you should aim at two to three other ways to try and grow income every quarter; even if it’s as simple as dog sitting or helping your friend to run their ecommerce site.

(Take notes on what pays the most for the least amount of effort, so you know where to focus your growth)

2. Set targeted goals for income growth

As the saying goes, failing to plan is planning to fail. There’s no point sitting around daydreaming about whether you might earn more next year. Rather, you should have milestones for income growth, just as you have for other milestones like retirement.

One example of this is to focus on finding a consistent source of income. You could, for instance, aim to make an added $500 per month, for three or even six consecutive months.

(If you can’t maintain consistency for three to six months, it might just be a fluke, and you need to keep testing new ways to raise income).

Another approach is to have incremental growth targets – such as planning to grow your income by five per cent each year (this will also help you to outpace inflation).

To meet these goals, you will have to try many different approaches; and these may take you outside your comfort zone. It may involve running a side-business, for example, or finding income generating solutions like renting out a room.

You need to record the performance of each of these attempts, and shift between them as you try to find those that match your goals. It’s definitely a lot of work and commitment; but it’s a necessary cost to growing your income.

3. Find alternative income streams

Warren Buffet famously said that ‘If you don’t find a way to make money while you sleep, you will work until you die.”

Like businesses, we all face the issue of scalability. Even if you’re very talented at what you do, you don’t have infinite hours in a day; and you cannot be everywhere all the time. Consider, for example, someone who has a natural talent for tutoring:

Even if they can attract a long line of clients, they are limited by how many students they can tutor in a day. Once their “bandwidth” is taken up, they have hit their income cap – they can no longer make more out of this particular business.

There’s also the fact that some services have an upper limit to their value. No matter how skilled you are making french fries, you’re not going to get $35,000 a month to work in a fast food kitchen. Sometimes, even being the best is not enough to break the

income ceiling.

This means that you must look beyond your job, for ways to grow your income. Some possibilities include:

● Dividend income from stocks

● Returns from REITs and Unit Trusts

● Creating a product that generates recurring income (e.g., selling digital content like videos)

● Jobs that offer recurring income in the form of commissions (e.g., you get paid for a client’s recurring orders or subscription, even if the process is automated and you may not have to work for it each time)

Needless to say, careers in the finance industry give you an edge here, as such jobs also force you to learn about such products.

4. Be aware of how much you should be earning

It should be common sense, but not everyone bothers to check how much they should earn. Being underpaid for your role and qualifications is not uncommon, and sometimes a simple move is all it takes (e.g., this 29-year old who boosted her income by US$22,000, just by doing the same role in a different company).

Inertia is a common barrier to higher income. This is when we settle too comfortably into our jobs; to the point where we no longer bother to check industry standards, or won’t even consider the troublesome nature of a move.

Make it a point to follow your industry trends, such as by signing up for job alerts on different career sites. Even if you don’t intend to change companies, you can at least observe the market rate and offers for your skills.

It’s okay if you decide you don’t want to move out of loyalty; but don’t let complacency be your reason for lower pay.

5. Practice a growth mindset, and reject the common excuses

The “secret sauce” to growing income is to have the right mindset. Singaporeans have a strong tendency toward to two negative beliefs, which get in their way:

The first is that “I don’t have any money to invest”. This is completely the wrong way around. You don’t wait until you have a lot of money before you invest; you invest so that you will have a lot of money. Singapore is a global financial hub – some banks have

blue chip investment programmes that start for as low as $100 a month.

It’s important to start with what you have. The first $100 you invest is a bigger step than reading a dozen books on “How person X made it big”.

The second common excuse is “I have no good money making ideas.”

No one actually knows what is or isn’t a good idea, until it’s tried. People have become millionaires from selling common rocks; keep that in mind whenever you think your ideas are “stupid” or “impossible”.

If you feel it’s time for a change, or want a head start, you can also consider a career that has no income cap.

This is possible in the finance industry, where even fresh graduates – through gumption and proper mentorship – have the potential to earn as much as workers several years their senior.

At Exodus Capital, we help to nurture young talents who seek this potential; and we extend the same offer to employees who have hit their ceilings, and want a career with better financial rewards. Contact us today for help!

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The content, views and thoughts expressed in the post belongs solely to us and not of Manulife Financial Advisers Pte Ltd or any group of organisations. It may not be applicable to everyone or all contexts. None of the information stated here constitutes an offer to buy or sell product, financial instrument. Any expression or opinion is personal to the author and the author makes no guarantee regarding the completeness and accuracy of any information supplied.