Boost Your Income, 1

 

Vocabulary

plus	average	dramatically
scrimp	inflation	net worth
achieve	mediocre	all sorts of
rule (2)	ordinary	all over the place (2)
worth	raise (2)	thereafter
profit	generate	invaluable
go over	hold true	it doesn’t matter
define	apply (2)	across the board

 
 
 
 
Adapted from Michael Ford

Becoming Rich

Want to become rich?

Many people do.

To become wealthy, you need to make big money. But what exactly is “big money”?

I would say $150,000-plus, annually.

The Real World

In the real world, ordinary employees earn ordinary salaries. Good workers (individuals who work harder and smarter) get above-average pay.

But above-average pay won’t make you rich.

A typical college graduate today can expect to earn about $31,000 at his or her first job, and receive an average raise of about 4%, which is around one or two percentage points ahead of inflation.

That kind of income growth is enough to make you reasonably wealthy — that is, if you scrimp and save for 40 years; by the time you will have retired!

My Story

With my net worth, I am considered “well-off”. But it hasn’t always been that way.

Before deciding to become wealthy one day at the age of 31, I had put in twenty years of working for all sorts of individuals and companies. Looking back, I now see my performance and productivity as having been all over the place.

I was a good employee … a bad employee … and everything in between.

On that day in 1982, I realized that, in order to gain wealth, I needed to increase my income. Dramatically: 25% … 50% … and even 100%. To achieve that, I could no longer afford to be bad, mediocre, or even good.

The Ten-to-One Rule

I remember when one of my bosses gave me my first big raise. He said, “To be worth a $1,000 raise, you must contribute at least $10,000 worth of additional value to the company’s bottom line. I call it the 10-to-1 Rule.”

So if you want to increase your current salary by $25,000, you have to increase business profits by $250,000. And that’s not just once: it’s every year thereafter.

The truly valuable employee not only generates profits and pays for himself, but also for other employees. On the other hand, employees who do no more than pay for themselves are, in fact, an expense for a company.

The Secret

So what’s the secret?

Here it is.

To command huge raises, you have to make yourself valuable — and eventually invaluable — to your company or business (it was in this manner that I was able to double . . . and then redouble my income over a two year period).

So how do you become invaluable to your business?

The Answer

Answer: you must

1. Learn — and eventually master — a financially valued skill.

2. Apply that skill to your company’s core profit-generating activities.

And it doesn’t matter what industry, company or business you work for or own; this process holds true across the board.

Let’s go over these in more detail.

A “Financially Valued” Skill

By learning a financially valued skill and then, by applying that skill to a company’s main growth source, the typical college graduate can double or triple his income in a year or two.

But first, we must define what a “financially valued” skill exactly is.

Simply put, a financially valued skill is one that other people are willing to pay good money for.

Questions

1. The only way to become rich is to invest in stocks or own a big business. True or false? Can you become wealthy through your salary?

2. Is it possible for any university graduate to become wealthy?

3. Did the writer start off wealthy or did he learn “the hard way”?

4. What is the ten-to-one rule”?

5. The secret of having a high salary is simple. Is this correct or incorrect?

6. How do you become invaluable to your company or business?

7. Do universities or the government determine what a financially valued skill is?

 

A. My friends and I all want to become rich. Yes or no?

B. Do you know anyone who earns a lot of money? Who among your friends, colleagues or former-classmates earns lots of money? What do they do? What is the profession?

C. I know people who have dramatically increased their salaries. Is this right or wrong? How did they do it?

D. Are there skills that are valuable that employers or clients will pay a lot for?