Everyone aims to increase their income significantly. You might be working for a very successful organization, bringing home a handsome amount of money every month, and having all your utility bills and basic needs fulfilled. However, does life really mean working all day to earn just enough to fulfill your basic needs? There’s a high probability that you’re among the vast majority who have given up on their broad dreams because, at some point, you realized it wasn’t attainable. This is where you’re wrong! Your dreams are meant to be fulfilled and nothing you set for yourself is impossible. Let’s discuss what can be done to double or triple your current take-home income.
It All Starts With The Right Mindset
Some things are needed to be instilled in minds at an early age. The key to earning more isn’t impossible, but you can only understand if you have the right mindset for it. Learning this principle will lift all the limit barriers from your income and you’ll see yourself earning amounts that you never imagined while working for the same amount of time.
If, for instance, you’re taking home £30,000 and you look to double it. You will have to put in a lot of hard work to get to that point, even if you own a business that serves limitless clients.
Ever Wondered Why Your Income Is Limited?
The vast majority resorts to working 9-5 to earn a safe living. Understandably, they have a family to look after and they feel they don’t have enough space to take any risks that might disturb their monthly expenses. But what most people fail to realize is the fact that you’re selling your time for the money you earn. Put simply, you work for a particular set of hours and get paid accordingly. Regardless of your position in the organization, your income depends on the time you put in.
You need to understand that your income is restricted due to:
- The fixed number of hours you’re working for
- The fixed value you’re providing, or the set amount of work that you deliver every day
How Can You Bring More Value?
The reason why the trading time for money limits your income is that you don’t focus on the value you provide. Take the case of a first-line employee and the CEO of the same organization? Ever wondered why there is such a huge gap in the pay scales even though they’re putting in the same number of hours? CEOs invest less time in most cases but still earn huge amounts. This is because the CEO is bringing far greater value to that organization as compared to a first-line employee. Therefore, using the number of hours you work as a measure of how much you earn is wrong. Just working more will only exhaust you and bring you closer to your point of saturation!
The way to success is to enhance your value. How does one increase their value?
The Concept Of Leverage
Leverage is the ability to use something to gain maximum advantage or to get more with putting in less. The reason why a CEO earns more is that they have the authority to leverage. The more control you have over the entire process, the more value you will offer. The CEOs can leverage money by borrowing capital and expecting profits that will be greater than the interest to be paid. They can also leverage people i.e. the employees to get results that they won’t have to bring by themselves.
Applying The Concept Of Leverage To Your Income
The key to doubling your income is to increase your leverage. Let’s take an example of a corporation. When you go higher up the organizational hierarchy, you see people earning more. For instance, the middle-level managers get paid higher than the first line employees, because they control and leverage the employees under them to perform tasks they won’t have to do themselves. Similarly, the president of the organization earns more than the Vice presidents because they leverage vice presidents, who in turn leverage various middle managers. The CEO earns the highest because they leverage and control everyone and everything.
This establishes the fact that you can increase your income significantly when you get promoted to the upper levels of the organizational hierarchy. But bear in mind, this climb isn’t just made possible by working hard, it comes through the skill of leading and managing people.
Alternate Ways to Creating Leverages
Climbing up the corporate ladder may guarantee you success, but it comes with a lot of drawbacks as well. There’s no doubt that when going upwards, you attract a lot of jealousy and hatred that will pull you downwards. You might find yourself achieving big things one day and the very next day getting laid off, despite not putting a step wrong!
This brings us to another path of achieving leverage, which is safer and probably even better than the corporate world; investing your time in building up your own business or investing in stock markets.
You can always build and grow your own business. This is where you control and decide everything. Consequently, you create a system where you have the authority to leverage everyone you have hired and produce great results, without doing it yourself.
How would you react when you’re told you can possibly earn more than a CEO? Because this is totally possible by becoming a shareholder of a public company. Shareholders control and leverage everyone in the company they own shares of, including the CEO. This is how you can passively earn a good amount of money without even becoming a part of that company.
Ways to Grow Your Investment
Doubling your income is very much possible and this should be your aim when investing. There are several approaches to grow your investment. For instance, you can go for a diversified portfolio or put your investments in various assets. Generally, if you’re aiming to double your money via investment, you can either do it safely over several years, or go for a quick return, but remember, being impatient in this field could result in great losses. Other options are investing in penny stocks or to earn benefits from the retirement accounts given by employers, more commonly known as 401 (k)s.
There are several ways to reach your goals, but what you choose is mostly dependent on how much risk you’re willing to take and the time you have on your hands. Let’s take a look:
- The Slow Earning Process
The easiest and most popular way of doubling your income is to invest in a speculative portfolio or mutual funds. This will take a good amount of time but will give you great results in the longer run. You’ll have to keep your patience because expecting the returns to double in a year is not realistic. If your return rates are lower, you can use the old 72 rule to estimate the time it will take to double your money. You divide 72 by the expected annual rate to calculate the number of years it will take to double the money invested.
- Earning Through Bonds
Investing and earning via bonds is considered as the safest approach. You can purchase zero-coupon bonds to reduce your risks and expect a good return. This type of bond is purchased at a discount instead of the regular bonds that pay interest payments. So for instance if a bond £1000 bond that gives a 5% return annually, is purchased for £1000, you can get this on discount at £500, the bond will gradually grow in value when reaching its maturity and the bondholder will receive the face amount. Unlike the standard coupon bonds, there is no reinvestment risk involved in the zero-coupon bonds.
- Acting On The Right Time
Every investor looks for the perfect time to buy. Sometimes, the stock may be performing badly and when everyone is looking to get out of it, is the perfect time to purchase. Experts have suggested that the smart approach is to buy the shares of companies that are going through hard times. You will often see well-reputed companies suffer downturns when the volatile investors get out in great numbers. This doesn’t mean that you should always be in search of low-value stocks, but you should know that many times great investments are sold at a big scale and this presents a good buying opportunity. You should do extensive research in this regard. Usually, experienced investors take a look at the Price-to-earnings ratio and the book value of the company. These two measures present the average performance of broad markets as well as particular industries. When big companies, that have a huge capital, show downward trends in the averages of the two above-mentioned ratios, due to external factors, this is when smart investors jump in to double their incomes.