We’ve been conditioned to believe that the more we work, the more we earn.
Most people get paid for their time. They either get paid by the hour (a wage) or by the year (a salary). Some people are freelancers who get paid by the project.
With all these traditional methods of making money, it’s hard to make more without working more.
- When you earn a wage you have to put in more hours to receive more pay
- When you are salaried you can either get a second job or work unpaid overtime as you angle for a promotion
- Freelancers need to take on more projects
Is it possible to escape this trap? Can you grow your income over time while actually working less?
The fortunate answer is yes, but like anything else when it comes to making money, it isn’t easy.
The Great Divorce
In order to work less and earn more, it’s essential that you divorce how you spend your time from how you make your money.
There is absolutely no way to do this on a wage. It’s possible on a salary, but very tricky to pull off. It’s a bit easier with freelancing.
Your best bet is entrepreneurship.
What’s the difference between freelancing and entrepreneurship? With freelancing, you’re selling your own skills and abilities. With entrepreneurship, you’re trying to build something bigger than yourself. Something that makes money while you sleep.
We’ll look at the ways you can use each approach to work less and earn more, starting with the most difficult (a salary) and ending with the best bet (entrepreneurship).
Work Less, Earn More on a Salary
This is tough to do. One problem that workers of traditional jobs run into is that their boss is very concerned with productivity, but very confused about how to measure it. So they tend to rate your performance in large part on how busy you look.
This is where the idea of “look busy, the boss is coming” comes from. It’s also one reason why there’s so much complaining on the job. Some amount of complaining comes from the fact that jobs tend to suck, but some of it is people trying to make themselves look busy and important. “Man, I’m swamped.” “I’ve been putting out fires all day.”
How do you break free?
First and foremost, you have to provide some kind of measurable value. You need to give management a way of evaluating your performance other than how many hours you spent in a cubicle.
When you provide tangible value, you can angle for raises and promotions on the basis of merit, not on the basis of your boss’s subjective evaluation.
But landing the promotion only covers the “earn more” half of the equation. To work less, you’ll need to avoid as many meetings as possible, and you’ll probably need to negotiate a work from home arrangement.
It doesn’t matter if you get to the point where you can make solid progress in just four hours if you’re forced to be in the office (looking busy) for eight.
But the best bet for earning more while working less might be to find a new job. You need to get a little lucky here. You can verify that you’ll get a pay bump before you accept the new job, but you won’t be able to guarantee that you can work less.
What you’re relying on is the fact that your new employer has no idea what to expect from you. If you’re able to provide tangible proof of progress to them, it doesn’t matter how long you worked, you’ve set their expectations for output.
If you can keep meeting their expectations while working less than eight hours a day, you’re set. The reality is that almost no office worker actually works eight hours a day anyway. They find ways to pass the time such as taking coffee breaks and chitchating. The main difference between this strategy and those traditional ones is that you aren’t in prison during your down time.
Work Less, Earn More While Freelancing
Find better clients.
That’s basically it.
When it comes to freelancing, there are terrible, demanding clients who want more work for less pay. They complain about everything and always want you to keep working beyond the scope of your initial arrangement. They don’t pay well and they don’t pay on time.
Then there are amazing clients who set clear expectations and pay extra if they want to expand the initial scope. They treat you with respect. They pay well and on time.
Chances are, you’ll start out servicing a lot of bad clients. This is fine at first, you need to build your skills so that you have something to offer good clients. But you should be on the lookout for better clients.
As a freelancer, you have more control over your rate than an employee does. Changing the price that you charge for your services is the best way to increase your income.
Here, again you want to divorce time from money. This time in the mind of your customer. You never want them to try to calculate how much you are making an hour. You want them to focus on what benefits they are getting.
Think about it like this. Have you ever had an emergency plumbing issue? A situation where there’s just water accumulating on your floor? Did you choose the plumber with the most competitive hourly rate, or the one who could get the job done the quickest? Heck, you might have even paid extra to have the guy come out on short notice.
When a person or business has a problem they need solved, your effective hourly rate shouldn’t be on their list of priorities. In fact, since you can raise your own effective hourly rate by decreasing the amount of hours you put in, once they agree on a price they should want your effective hourly rate to be high. A high effective hourly rate for you means that their problem is solved more quickly.
Find better clients.
Charge by the project.
Price on value, not labor.
Become efficient at your craft.
When you get a gig, put your head down, tune out distractions, and work until the job is done.
That’s how you work less and earn more as a freelancer.
Work Less, Earn More as an Entrepreneur
Becoming an entrepreneur is a pretty broad category, so lets narrow it down a lit more.
Work Less, Earn More as an Employer
Whenever you start a business, you’ve created a system where your pay can be separated from your labor.
But as long as you’re the one running the business, you’ll need to put in a lot of labor to earn money.
The magic comes when you’re able to start hiring people. As an employee, you got paid for your labor while the owners got paid for the value that the company created in the world. As an employer, you flip the script. Now you pay someone else for their labor, and you benefit from the value your business provides in the marketplace.
Of course, any dollar that goes into the pockets of an employee is one dollar less income for yourself. In the beginning, this can be a tough trade-off. But you need to take a long-term view here. Earning more is always hard for everyone. Working less is the real trick.
If you can hire people to take over running the business for you, you can still profit big in the long run as the business continues to grow. The scary part is cutting the cord and letting things run without you.
Work Less, Earn More With Real Estate
How many people are paying you rent?
That’s one of the most essential questions in real estate. Yes, there are other important things to worry about. But when it comes to making your income go up over time, the question you need to be asking is how can you get more people paying you rent.
Of course, the more properties you own, the more work is involved in being a landlord. One way you can keep acquiring properties without increasing your workload is to hire a property management companies. This will take a decent chunk out of your profit margin, but it will let you pull off the coveted “work less” feat.
Work Less, Earn More With Digital Assets
This blog is a digital asset.
It has taken work to create. It’s going to take more work to keep building.
But eventually the blog is going to be working for me.
One day, you’ll come back here and you’ll see ads. I’ll be making money off of those ads. I’ll be making money even if I’m on a lunch break. Or on vacation. Or sleeping.
The blog will become the world’s greatest employee: Working tirelessly around the clock to earn me money.
Don’t let me oversell you here. It takes a lot of work to get a blog to the point where you can monetize it. But the power of a blog (or other digital assets like YouTube channels) is that there is my labor can keep bearing fruit almost indefinitely.
The key ingredient in many ways is time. The more time goes by, the more posts I will accumulate on the blog. The more posts the blog has, the more valuable it is. Both for the reader and for me.
The more time goes by, the more Google will be convinced that I’m not one of those blogs that posts five times and ghosts forever. I’m a blog worth including in search results. Maybe I even deserve the top spot for a few keywords. Then traffic will explode.
The more time goes by, the more I will build up a following of readers who have benefited from my writing in the past and will come back for more in the future.
I’m playing the long-term game here.
In the short run, there’s lots of work and no money. In the long run, the money will just start flowing in.
It’s just a matter of time.
Making more money is never easy and making more while working less is a special feat.
It’s definitely something that can be done, but you have to be intentional about it. If you can pull it off, you get the best of both worlds: More money and more time. And ultimately that’s what personal finance is all about.
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