Your Time Is Money

Besides taking steps too increase your value, you must also increase the time you spend creating value to boost your income. If you are self-employed, then you are usually paid by the hour or by the job. So obviously, when you work longer hours and more days, your income will increase!

Now you may be saying to me, ‘I am already working 18 hour days! How much harder can I possibly work?’ Or if you are working for somebody else you may be thinking, ‘ this does not apply to me. As an employee, my hours of employment are fixed from 9am to 6pm. I do not get paid more for working longer hours.’

Well, when I talk about increasing the time you spend creating value, I do not necessarily mean that you must work longer hours. Rather, you must spend more of your time only on activities that create the greatest value…that generate the most profits for your company.

Whether you are an entrepreneur or an employee, you will have a list of things that you must do daily as part of your role. You will find that not all the things you do create the same amount of the value. There are some activities that create high value while some activities are low in value. I

n fact, I have discovered that for most average income earners, they only spend 20% of their workday doing truly high value creation activities while they spend 80% of their time on low value activities like checking email, attending unproductive meetings, chit chatting, complaining, waiting, finding lost items…stuff that does not generate profits or help clients meet their goals.

High-income earners are the opposite. They tend to spend 80% of their time on high value creation activities like business development, closing sales, innovating new revenue streams, marketing strategy, following up with prospects, strategizing on how to improve productivity, managing projects, getting feedback from clients…stuff that lead to high customer satisfaction and higher profits!

So start keeping track of how you send your time each day and focus more of your time on high value creation activities and your income will increase. Spend your time on high value activities and you will maximize you income, making you a millionaire in no time.

3 Types Of Income

Let us take a look at the different types of income. They are:

1. Earned Income - obtained from working for someone or a company.
2. Passive Income - income generated from business.
3. Portfolio Income - income generated from investments in paper assets.

Earned Income comes from having a job in a company or in someone else’s business. You get paid for your time and services rendered. In the previous section, we mentioned that workers work just hard enough not to get fired and employers pay just enough for workers not to quit.

This indicates that the income an employee can generate from working for an employer is limited. There is the possibility that an employee may devote extra effort thinking the employer will pay him/her more. It is a rare possibility particularly when business is difficult, but possible.

And even if it happens, it is still limited. Whatever additional profit gained by the employer as a result of the employee’s extra effort, the employer will get the bigger “slice of the pie.” You are, in effect, making someone else rich through your added effort. Don’t think I’m discouraging this. It is a good act.

I’m just stating a fact. It’s likely that you will be telling yourself mentally: “Hey, that’s not fair.” Fair or not, that’s the way life is, when you work for money.

If you are an employee, you get your money or paycheck after everything else. It is earned income, less taxes and everything else deductible, before money reaches your hand. And if ever the money reaches your hand, the next place it is bound to go is to pay your bills. If the amount is not enough, you are bound to borrow, which makes you debt-ridden if it accumulates. Now, this is one big mistake. Don’t ever get debt-ridden. It is the quicksand to poverty.

Earned Income is a safe way to generate an income. There is not much thinking to do. Except for a few high paying, high profile jobs, your work is mostly concentrated on a few things where you keep repeating the same functions. Unconsciously, this discourages creativity, so boredom starts to set in.

It is because of this boredom that getting to work every morning is such a drag and you keep on looking forward to weekends, holidays, and vacations.

Unless you really love what you do without consideration to the income it generates, or unless you are highly paid, or unless there is a lot more to learn in your job, or unless financial security is of no importance to you, there is no reason for you to stay long in the “rat race.”

The earlier it is to get out of the trap, the better chances you will attain financial success.

Passive Income is generated from businesses. You can sell products or offer services, or a combination thereof. Examples are buying/selling real estate, trading merchandise as in wholesaling and retailing, etc. In many cases, you need not be physically present in your place of business.

There are also small businesses like vending machines where you hardly require an employee to visit those machines for refill (since you can do it yourself). You can also go with franchising; either be a franchiser or a franchisee. The list is endless as long as you do what you love to do.

The beauty of going into your own business is that you work for you, not for someone else. You enrich yourself, not someone else. Your time is disciplined but more flexible because you can make your own schedule.

Another advantage of going into business, especially in your own corporation, is that you earn and spend before tax is deducted, unlike being an employee where you are taxed before you spend.

Portfolio Income, just like passive income, is making money work for you. Portfolio Income is generated from paper assets like bonds, stock market, certificate of deposits, and mutual funds. They are called paper assets because literally, they are businesses that revolve on papers.

It is in portfolio income where financial knowledge is of vital importance. Your intellect interacting with creativity can either unmake or make you rich.