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:
The 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.
- Take the test in Now, Discover Your Strengths or StrengthsFinder 2.0.
- Create a life map and see the patterns of your strengths.
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.
- 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.
- The Role of Deliberate Practice in the Acquisition of Expert Performance
- Finding Niche: Where to Invest Your 10,000 Hours of Practice
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.
- 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:
- Your network helps you find demand
It can connect you with those who need your solutions. It helps you find opportunities.
- 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.
- 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).
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.
- Read and apply the tips in Career Tips: How to Find Your (Potential) Unique Value Proposition.
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.
- The 10 Immutable Laws of Personal Branding
- 12 Things You Can Do Today to Strengthen Your Personal Brand
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.
- Watch trends. Here are three sites that help you do that:
- Observe how people do things and what problems they have.
- Keep an idea journal.
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.
- 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.
- 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