This post is part of 30 Ways in 30 days to Redesign Your Life and Travel the World. This series seeks to give you the practical, real world steps you need to take to get from wherever you are, to exactly where you want to be– traveling the world and living the lifestyle you want.
The title of this post makes me want to roll around on the floor giggling, because honestly, wouldn’t that be nice. A little post from Christine and everyone who reads it just starts making more money. Brilliant!
I’m writing about it today not because I have some secret advice to share with everyone, but because no one does. I’ve received a lot of emails and comments about this, along the lines of, “Traveling sounds great, Christine, but first, how do I make more money? Because that’s the only thing I need right now.”
The problem is, as far as goals go, it’s almost impossible to achieve unless you’re willing to compromise something else. I’ll get to that in a minute. First, let me quickly tell you why more money and travel don’t necessarily go hand in hand.
More Money = Less Time = No Travel
Don’t believe me? Ask anyone with a lot of money how much they travel. Then ask anyone who travels how much money they have. Retirees don’t count. Neither do lottery winners. How many hours per week do the people who make double your annual salary work?
Ah, but you’ve figured it out, you’re going to make more money in less time. You’re going to earn income passively.
Passive income is the result of active work
I love Tim Ferris. I love what the 4-Hour Workweek has done for so many people: it’s made the idea of redesigning your life possible. But the whole passive income thing is kind of a joke. Being more efficient is one thing. Sitting back and watching a healthy wage roll in on literally four hours a week, well… come on. Not even Tim Ferris pulls that off.
Yes, I could set up a website to sell something, but first you have to test (straight from the book). You run with your idea- you buy a little advertising to make sure people will click through, you monitor results, you make a decision on whether or not to proceed. One idea fails, another succeeds. Forget for a moment that you have to figure out how to use google adwords or build a website or how to set up a buy now button or a dummy sales page or save enough money to pay someone else to do it or learn what click through rate is good enough to start your business. You’re really smart, that will only take you, what, 30 minutes? But then, what if your idea doesn’t work? How many ideas will it take? Eventually you will find a business that is profitable and requires no hand holding. But when? In a year? In two? Are you really earning passive income if it’s the result of slowly building up your business over a few years? I don’t think so. And Tim Ferris, the wonderful marketer that he is, knows this too. He’s built his brand with hard work and lots of hours. He loves it, so he doesn’t count that time (as he says on his own blog). Will you love your passive business?
Ok, fine, let’s get to it. How to make more money…
The obvious answers: get better paying job or charge your clients more or get a second job or take on more work (more pat answers here).
Transition from your day job to self employment. In most careers there is a limit to how much can make. If you truly want to increase your earning potential, you have to cut out the middle man: your boss. As long as the company makes money off of you, you’ll always be making less than you’re worth on the open market. The added benefit of starting a business is that you can also outsource your responsibilities for less and by building efficiencies you can profit off of other people’s work. This all takes time, a learning curve and a bit of luck.
Don’t spend as much. I know spending feels like a reward for all that hard work, but unless you get control of it, you’ll outspend your earnings, no matter what you make. Cut your spending in half and you just gave yourself a 50% raise. Think it’s impossible? Read this post. Or this one.
Calculate your per hour rate. If you’re working a full-time job, calculate the hours you spend, from getting into your car in the morning, to getting out at the end of the day. I’ll guess it’s about 10 hours a day or more. Then divide your take home pay by the number of hours you spend “working”. I did this once when I was a manager at a small publishing firm and came up with$13/hr. It was my first big job of college, but it wasn’t until after I did the math, that I realized my new 80+ hour job wasn’t actually paying me that well. If you’re a freelancer, this number is your cost to your client minus your overhead.
Cut loose those activities that aren’t moving you forward. We’re not just talking about low paying clients, but also those networking events that haven’t resulted in a promotion in five years or spending a few extra hours at work each week with no raise. Ask yourself, is this helping me move forward or is it giving me the illusion of action? Am I spinning my wheels and seeing very little movement forward? It’s time to treat your income like the big experiment that it is. Try something, monitor the results, then move on. Keep what works, ditch what doesn’t.
Don’t just turn your hobby into your business. It’s tempting, but don’t do it. Instead use the skills you have, even the boring ones, as your base. So instead of starting an ill-advised career writing about high school football, use that accounting degree to start your business. It doesn’t have to be an on-the-nose interpretation of it, for instance, you might combine football and accounting (having a website with exhaustive stats and performance predictions) to give you an edge over other folks. The first question should always be: what is my competitive edge?
Don’t wait for the big idea. This always kills me, because I know people in my life who have been talking about starting their own business for… ever. Have they started? Nope. They are waiting for the big idea. The problem is, it doesn’t work like that. The way to figure things out is to get in there. You’re not informed enough to know which ideas are big, and which ones stink until you take some time playing with the real-world applications. Test the idea on some people. Do a sample run. Try it out as a side project for a few months. You will learn so much and then it will come to you… the big idea that changes everything. First, you have to get your hands dirty.
Oh, and It’s Not the Money Preventing You From Traveling
I used to think like that too. That’s why I waited until I was over 30 to do something about it. I finally hit all my financial goals and I was left thinking, “Huh? That’s it?” I still had to go through the same process as everyone else… having money didn’t change a thing. No one ever has enough, but the truth is, you already have plenty. It doesn’t take more than a minimum wage job and a year to save. You’ll get that next raise or promotion or big bonus check and it doesn’t mean a thing. It’s you. You have to want to travel. You have to commit to doing it. The money thing, it’s just a thing, no more and no less than getting your passport or booking a flight. It’s a detail to be handled. It’s not going to give you permission to travel. It’s not going to change your life for you. Put it on the list, but keep it there. Make more money if you want, but don’t let it become more than it is– a means of exchange so you can buy back your life.