If you want to afford to buy or pay for what you previously could not afford or have not budgeted for, you basically have two options. To save or to increase income. Yes, there is the third option which is to borrow. But we are talking of responsible personal finance and not business working capital funding.
If you have been following my writings on personal finance, you will realize that I have spent a lot of time writing about the first option which is – SAVINGS. However, today, I wish to spend a little time talking about the other option—INCREASING INCOME.
So the question basically is—HOW DO YOU INCREASE YOUR INCOME?
To answer that question, we need to go back to high school and remind ourselves about what money truly is. We are taught in high school that “Money is the medium of exchange and a store of Value”. You will recall that we were taught about the earlier forms for exchanging value, which was “trade by barter” which basically involved the exchange of one commodity for another commodity. The only problem was that the other person needed to have what you wanted, and you needed to have what he wanted. Then there was the issue of measurement. There was no guarantee that even if we had what we both needed that the volumes were in appropriate quantity and quality. Thus evolved the need for “Currency” to replace the value of a commodity which then made the purchase of items easier.
If money is then the store of value, it means that the real money is not the paper but the value. So to increase your income, you merely need to create VALUE and exchange it for CASH. Therefore, what makes a man poor is not the absence of money, but the absence of value.
What is VALUE?
Value could be visible or invisible. We now live in a world where the invisible (the internet) is said to be worth more than all the oil fields in the middle-east. This means you are not limited to creating a product to sell, but you can actually sit down and craft an idea that can be disseminated virtually, making money in the process. I recall once telling an audience how writing a book didn’t cost me anything beyond the time I spent on my computer, but it was value for everyone who bought a copy with me smiling to the bank on the back of every purchase. Increasing your income can be cheap, just create Value.
Your value must meet a need?
The frequency of the exchange of your value depends on how much it meets a need. Wifey once opened a discount store in our former neighbourhood. She noticed that the local traders always had to travel long distances to big markets to get supplies. A process that added to their transport cost. So she got the idea to create a discount store where the same supplies can be obtained locally, thereby saving the traders the transport cost. It was a simple idea, but it met the needs of that local community. Is there a need you can meet in your office, community, church, mosque or nation? If yes, think seriously about it.
For business owners, it could be as simple as value-added services. Like providing free Wi-Fi for customers while they shop or gift vouchers for return customers or even just following up on a purchase or service to ensure that the customer has a good experience.
Consider the cost and seek for partnership
Some value can be created without cost. However, there are those that would require a certain level of investment in resources. The point is to do your planning and cost projection before starting implementation. Once done, seek partnership. It is better to be own 1% of 100 than 100% of 0. A lot of times what kills our ability to create value is a selfish desire to hold on to 100% as if our life depends on it. If your business is successful, that business can cover all your expenses as part of its administrative cost while still paying you a good salary and dividend.
Let me add that for those employed, creating value could also be as simple as increasing your skill-set and your academic qualifications. Sometimes it’s about getting that additional degree. While other times it’s just about learning how to use excel and powerPoint very well. You don’t know how many CEOs are so deficient in the use of excel that if you can offer value in that aspect alone, your career path can be accelerated. This acceleration, of course, comes with higher salaries and remunerations.
Let me conclude by saying that it is not the amount of money in your account that makes you rich, it is the value you can create that does. So we ought to be on the constant search of creating value because if it dries up, the money in the bank will with time dry up as well.
Start by asking yourself daily, WHAT VALUE HAVE I CREATED TODAY!