4 Ways To Increase Your Income

9 minute read

How much should you get paid?

Are you wondering how much you should get paid for the work you do?

This article is for you.

In this blog, we cover 3 areas of your personal finance:

1. Earning money, 2. Saving money, and 3. Investing your money.

Today, we’re going to cover the earning of money.

Let’s face it, there’s only so much money we can save. Up to a certain point, we have to generate more income if we want to live comfortably.

There are many ways to generate more income, and we’ll talk about that in another article.

Today we’re going to talk about what exactly determines your income level.

A lot of people think that they should be paid X amount because that’s what everyone else is getting paid.

But by the end of this article, you’ll have an exact list of the factors that will determine your income…

So that you can work on them and start earning more money.

Defining Income

Let’s define income as money received for the work that we do.

And compensation is money awarded to someone in recognition of what was given up.

So from understanding what income is, we know that we have to give something in order to receive.

The most common thing that people give in exchange for money is their time.

But you can also give other things like your products (business), your money (investor).

Regardless of what you’re offering to the world, these 4 rules of income will almost always determine how much money you make.

Because we want this blog to be practical, we’ve turned these 4 rules into questions you can ask yourself now so that you can look for answers after reading this article

Rule 1: Is there a demand for what you’re offering?

In other words, do people want or need what you have to offer?

When I was younger, I used to follow my dad to the store where he would buy a GPS system for RM1,00+.

But if someone offered you a bulky GPS system for RM1k today, you’d tell them to get lost.

People don’t need it anymore.

Back then, smartphones didn’t exist and people needed GPS systems to navigate while driving.

Another example would be Taxi drivers.

Before E-hailing was a thing, Taxi drivers were in demand if you needed a private vehicle.

But with the introduction of Uber and Grab, taxi drivers struggled to make their regular income because most people prefer E-hailing services

Which brings us to the 2nd Rule of income…

Rule 2: How good are you at delivering that offer?

This boils down to competence.

Going back to the taxi driver example, most people preferred E-hailing services because objectively, they were more accurate, safer and more reliable.

The reason why e-hailing became more widely used than regular taxis is because Uber and Grab were better at delivering the service of private transportation when compared to taxi drivers.

Another classic example is between a general practitioner, and a heart surgeon.

If you had a heart attack, you would most likely be willing to pay for a heart surgeon who has the skills and experience needed to fix your problem rather than a GP.

The more you develop your skills and experience, the better you become at delivering whatever you have to offer.

Which brings us to the 3rd Rule of income…

Rule 3: How easily replaceable are you?

A few years ago, there were people working as lift operators whose job was to bring the lift to the level you wanted

Because at the time, lifts could not stop perfectly on your level.

Instead, a lift operator had to manually control it by judging when to stop the lift and when to open and lock the doors.

But now, you just press the button on the lift and off you go.

The need for a lift operator disappeared.

And now you’re seeing self-check out machines at grocery stores because the job of a check-out cashier is easily replaceable.

You need to become irreplaceable to whoever you’re working for.

Whatever your job is, you need to continually work on your skills so that you become so valuable that no one’s gonna replace you any time soon.

And you need to know what type of skills that are unlikely to be replaced by automation in the future…

We’ll talk about this in another article.

Rule 4: How many people do you serve?

The 3 previous rules can put you a high income earner category if you follow them.

But if you want to make more than that, like in the millions, you have to serve more people.

There are 2 ways of looking at this:

i) serve multiple employers by working more than 1 job.

If you had 2 or 3 jobs, you would usually have more income.

Although your income may be increasing, working multiple jobs can be exhausting and it’s not for everyone… which brings us to the second way —

ii) your work affecting multiple people

Now what do I mean by this?

If you can produce a product or service that impacts multiple people and serves their needs, then you can drastically increase your income.

In business, we call this scale.

Real World Example

The reason why Mark Zuckerberg is a billionaire is because billions of people use his creation — Facebook.

And Facebook is serving the basic human need of connection.

So the more people you serve with either your time, your product or service, the more income you will generate.

Practical Steps For You

OK, so that was a lot of information.

Let’s recap and break it down into simple steps that you can take right now, no matter what your situation is.

Situation 1 — Rule 1

If you don’t have a job, or you’re fresh out of university…

or if you’re graduating soon, here’s what you can do:

Find out what you can offer to the world.

If you’ve never worked a job, now is the time to get one.

It doesn’t matter if the pay sucks or if you’re not getting paid at all.

What’s more important is going into that job with the intention of finding out how you can contribute to the people around you.

If you don’t want a job or for whatever reason you just can’t get a job in your area, start creating your own jobs.

You could offer to wash all the cars in your neighbourhood, or help people clean their windows or you could buy snacks and drinks and resell them at a concert or whatever. 

The important thing is to be useful, by providing a product or service that people need i.e. there’s a demand for it, and you will get paid. 

Situation 2 — Rule 2 & 3

OK, if you’ve already been working at your job for a while, and you want to increase your income…

Ask yourself: how good are you at doing your job.

And how replaceable are you not just by automation but by another person.

If someone else were to apply for your job, and that person had the same skills as you but is willing to receive a lower salary or less benefits, how long will it take until your boss considers replacing you?

If you’re in this situation, we recommend investing a portion of your income into your own education. You could read a book that would help you do your job better. 

Keep developing your skills and avoid being complacent.

Remember: the more problems you solve for your employer, the more valuable you become.

So if you want to increase your current income, you need to be more valuable and eventually irreplaceable to your employer.

Situation 3 — Rule 4

If you think that what you have to offer is in (1) in demand, and (2) you’re good at delivering it, and (3) it’s hard to replace what you have to offer…

Then you can start applying rule 4 which is to serve more people.

Instead of working multiple jobs like I did, you can create something that could serve a lot more people.

Thanks to the internet, you have access to literally billions of people in the world who could benefit from your creation.

But that’s another topic for a different article.

For now, focus on rules 1-3 and you will see a rise in your income.

Give credit where credit is due

Now, these 4 rules are not something that I came up with magically and I have to give credit where it’s due. 

I’ve read many books on personal finance, but the one book that contributed the most the idea of these 4 rules was a book called The Wealthy Gardener by John Soforic.

If you haven’t heard of this book, it’s because this book was self-published and does not receive a lot of publicity like other mainstream books. 

I’ve read it twice, and I think it’s a timeless classic that has lessons about money, work and wealth designed in a form of a story so that it’s more entertaining. 

If you want a book that’s easy to read and teaches you the basics of money, finance and wealth, then I highly recommend this book.

You can order the physical book on Amazon, but for me personally I like listening to audiobooks and I found this book on Audible.