How to Make More Money

Posted by Donald Latumahina

In the post Making Money with a Purpose, I wrote that having the ability to make money is more important than having money. Now I’d like to discuss how to increase your ability to make money and therefore make more money.

Let’s start from the beginning by answering a basic question: what is money? Steve Pavlina in his book Personal Development for Smart People has a good answer:

Make more moneyThe money you earn is society’s way of saying: “In exchange for your valued contribution, you are hereby granted the right to extract equivalent value from society at a time of your choosing.”

So the amount of money you earn is proportional to the amount of value you contribute to the society. What you need to do to make more money is simple: contribute more value to the society.

There’s a catch though: the one who determines the value of your contribution is the society, not you. In Pavlina’s words:

Your income depends on the social value of your work, not the personal value. Personal value is whatever you say it is. Social value, however, is determined by social consensus.

So here is a key principle:

To make more money, contribute more social value.

Here are several things you can do to contribute more social value and thereby make more money:

1. Identify your personal strengths

First of all, you should identify your personal strengths. What are you naturally good at? Working on your strengths will give you much more in return than working on your weaknesses. So it’s essential that you identify your strengths.

Action list

Further reading

2. Do your deliberate practice

By identifying your personal strengths, you should find where you can be very good at. For example, you may find that you can be very good at playing piano or programming. What you need to do is improving your skills there until you reach world-class level. That way you can provide tremendous value to others.

To improve your skills, you need to do deliberate practice. Here is a good explanation of deliberate practice:

Deliberate practice refers to a form of training that consists of focused, grueling, repetitive practice in which the subject continuously monitors his or her performance, and subsequently corrects, experiments, and reacts to immediate and constant feedback, with the aim of steady and consistent improvement.

It is generally accepted that this form of training calls for approximately 10,000 hours of concentrated effort if one is to achieve the optimum level of expertise.

Action list

  • Decide the field where you want to do your deliberate practice.
  • Allocate at least two hours a day for your deliberate practice. The more the better.
  • Aim for consistent improvement.

Further reading

3. Diversify your skill set

Aside from the skills you choose for your deliberate practice, you need to have other skills in your skill set. These skills complement your main skills and help you provide something unique (see point 5 below). You don’t have to be very good at them, but you should be good enough.

Action list

  • Choose a skill to add to your skill set. This list of competencies may give you some ideas.
  • Spend time to learn the skill. A good way to do that is by creating a project where you can apply the skill.

4. Expand your network

Your network is essential in helping you make more money. There are two reasons for that:

  1. Your network helps you find demand
    It can connect you with those who need your solutions. It helps you find opportunities.
  2. Your network helps you find supply
    When someone needs something that you can’t provide, turn to your network to find those who can. Or find someone whose skills complement yours.

Of course, to expand your network you must be willing to help the people there.

Action list

  • Help someone in your network today.
  • Meet new people and follow up.
  • Join Twitter. It helps you connect with others (by the way, here is my account).

Further reading

5. Find your unique value proposition

What value can you contribute to the world that others can’t? Answering this question isn’t easy but it will help you differentiate yourself. So take the time to find your unique value proposition.

Action list

6. Build your personal brand

After finding your unique value proposition, you need to get the message out to your target audience. If people don’t know you then they won’t come.

For that reason, you need to build your personal brand. By building your personal brand, people know what they can expect from you so they will come to you when they need it.

Action list

  • Create your one-liner.
  • Create a profile on LinkedIn.
  • Buy a domain and create a web site.

Further reading

7. Open your eyes for opportunities

Opportunities often come in unexpected ways. You need to open your eyes and see what is around you. That’s how you improve your luck:

Unlucky people miss chance opportunities because they’re too busy looking for something else. Lucky people see what is there rather than just what they’re looking for.

Since they are observant, lucky people often see things that other people don’t.

Action list

Further reading

8. Provide customer-oriented solutions

When you see a need, look at what you have (your skills and network) and find a way to provide a solution. The broader your skill set and network are, the more likely you will find something.

Your solution should be customer-oriented and satisfy the customer. If the customer is satisfied, she may spread the word about you.

Action list

  • Combine your skills and tap into your network to provide a solution.
  • Aim for customer satisfaction.

9. Build upon what you build

I read about it in the blogging context, but it applies to making money as well. One of the best ways to provide more value is by building on the value you already provide. This is smarter than starting from scratch because you can leverage what you have.

Action list

  • Look at what you have and ask yourself:
    • How can I use it to build something new?
    • What extensions can I add?
    • What related markets can I reach?
    • What untapped opportunities are there?

***

Applying these tips will take time, but it will help you make more money in the long term. Like Moliere said:

The trees that are slow to grow bear the best fruit.

Photo by Jeff Belmonte

Categories: Finance, Working

Please use your real name and note that I reserve the right to delete inappropriate comments.

24 Responses so far.

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  2. Chris Perry says:

    Donald, great post!

    To go along with #1 Identify Your Strengths and #6 Build Your Brand, take the Myers-Briggs Type Indicator (MBTI) and identify your personality type. You can take this assessment online for free in multiple places. Then Google your four-letter type and learn more about how your type functions in relationships, at work, in teams, as a leader etc. This will help you understand yourself better, identify your strengths and weaknesses and start building your brand.

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  4. Chris,
    Thanks for the useful tip! That will certainly be helpful to identify your strengths and build your brand.

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  6. Steve says:

    Wow! is all I can say. You hit the jackpot on this one. Thanks for the hugely practical and helpful ideas from this post. This one is going to be re-tweeted, stumbled, and digged by myself. Thank you!

  7. Spencer says:

    I have found over the past month that I am wrapped up in too many things (all at once) to be effective at anything. I have multi-tasked myself into a corner and I am feeling the pain.

    I believe it’s time to drop all the balls I’m currently juggling and focus on only one. The one I should focus on, according to this article, would be my strength. It’s time to do some soul searching to make absolutely sure I focus on my true strength.

    All the steps outlined here are perfect and should guide me to where I need to be in life. These steps should lead me to more money because I will be giving more value.

    Thank you for the reminder to stay tuned into our strengths to get the greatest benefit by adding the best possible value. I am realigning beginning today.

  8. Anthony says:

    Great tips. I’d like to stress spending less and saving a lot more. There’s no point in earning lots of income if you can’t control your spending.

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  18. George says:

    Actual the hardest part of making money is when to open your eyes for opportunity at the right time, many people do wait to realized later that they have left an opportunity to pass

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  20. Mark says:

    It’s not what you know that makes you great. It’s what you know you don’t know.

    Find you weakness and own it.

  21. Mark says:

    For example, mine is spelling ‘your’.

  22. Abraham says:

    It all start with diversifying your skill set. Then every other thing on the list will follow.