This is a guest post by best-selling author and blogger Ramit Sethi.
For years, the most requested topic on my site, I Will Teach You To Be Rich, has been earning more money. Yet I intentionally stayed away because it’s almost always sleazy, attracting a ton of losers who simply want a silver bullet instead of actually working hard to earn money.
But if you’ve read my stuff, you know that I don’t spend much time on frugality, which I mostly consider a waste of time. Instead, I encourage people to focus on the Big Wins — automation, investing, negotiating, and understanding the psychology of money.
I’ve always said that you can’t out-frugal your way to being rich. So after nonstop requests for posts addressing earning more, I decided to make 2010 the Year of Earning More. The past 7 months have been dedicated to helping people earn more money by earning more on the side, and the response so far has been massive. Hundreds of thousands of people read, commented, and Tweeted and otherwise chimed in on earning more. Everyone wants to make more money.
Great enthusiasm — but there’s just one thing wrong with this…
Most people who say they WANT to earn more… never will.
Many of the same people who say they want to earn more also say they want to lose weight…only they focus on the “I wish I could lose weight” part instead of the “I’m going to go the gym 3x/week and eat 25% fewer calories.” They’re delusionally goal-oriented, focusing on the end result instead of how to actually get there.
As much as everyone says they want to earn more — and sure, they’d try it if only they could — most people will never earn a single dollar beyond their regular 9-to-5 paycheck. Fewer still will ramp that one dollar up to $1,000, or more, in side income. The pattern is always the same:
- ‘Earning more’ is sexy, so they get motivated, “$1,000 extra dollars on the side? I want that!”
- They get started with the actual work of generating an idea, and figuring out their target market, but quickly realize things aren’t as easy as they thought, “How come nobody wants to pay me $500 a month to manage their Twitter account??” (The worst is: ‘I’m good at writing grants. Maybe non-profits will pay me to write grants for them!’ No, they won’t.)
- They alternate between chasing a million things, and taking no action at all.
- They eventually give up, putting off earning more until they have “the right idea” (i.e. never).
Enthusiasm and motivation are VERY powerful ways to get started, but they don’t carry you through to your first $1,000.
What does? A system that helps you identify ideas, test them for profitability, and then scale up your marketing. Compare this to most people, who think that earning more is about finding a magical idea that will somehow urinate money on them from heaven.
Why so much emphasis on that first $1,000? In my experience helping people to earn their first rounds of side income, I’ve noticed that $1,000 is the key earning threshold. Earning $100 is good, but it could be a fluke. Earning $500 is a better signal that you’re on the right track. After you hit $1,000, you know that you’re doing something right. After that, you can implement something I call The Tuner Strategy to “tune” your revenue up as much as you want — from $1,000 to $3,000 to $5,000/month, and more.
Interestingly, for many people who do reach the key-earning threshold, going from $0 on the side to $1,000 is harder than going from $1,000 to $5,000. But the biggest hurdle to get past is that first $1,000.
3 reasons why MOST people never get past the $1,000 hurdle
…and how you CAN earn more money.
Excuse #1. “But my situation is different.” Maybe their skillset (“But I’m not a programmer!”) or their background (“But I didn’t go to STANFORD!”) or the other demands in their lives (“But I have a full time job and a partner/kids!”) or ANYTHING (“But I have special motivation problems because my parents didn’t push me hard enough,” “But I get sick easily,” “I’m too young, too old, not smart enough, etc.”) It goes on and on, and it always starts with a “But…” and ends with the person doing nothing.
It’s natural to make excuses about our circumstances because it’s usually far easier than actually doing something about them.
The truth is, our problems are almost never unique. There are a litany of excuses we use to justify not earning more, but every day, someone is out there solving the same problems you’re facing now. So the next time you’re tempted to make an excuse, try an exercise I call Be the Adviser. ALL of the most successful CEOs and leaders around the world have key advisers helping them to problem-solve their way out of the toughest situations. Today, you are your own adviser. What is the first thing you say? What are the specific takeaways that you want your client (in this case, yourself) to walk away with? What are the results that would mean you did your job well as an adviser?
Excuses are us looking at our barriers from one standpoint — ours. Being your own adviser is a way of looking at — and tearing down — our barriers from an alternate standpoint.
This is like when you listen to a radio show and you hear a girl call in, saying her boyfriend has no job, is a slob, and drinks with his friends all day. “LEAVE HIM!!” we all scream. But when it happens to us, we’re not sure what to do.
We’re not unique.
Be The Adviser to yourself and see what concrete steps you could take today to change your situation, or simply ignore it long enough to earn more.
Excuse #2. “I’m still working on the perfect idea.” Are you really ‘working’ on it? Or are you waiting around with no plan, simply hoping that you’ll stumble across a magical idea?
Here’s an easy way to tell: In the last week, what have you done to find and refine your idea? If the answer is nothing, you’re not “working” on an idea, you’re being lazy and doing nothing.
Yes, your idea is important — to an extent. It enables you to get started, but the most successful people — the ones earning incomes to dwarf even fat corporate paychecks — NEVER stop at their first idea. Instead, that first idea is just a tiny launch-point for an ongoing process of refining and improving their service offerings, understanding and marketing to their audience, and scaling up their business. This is how you turn your skills into income.
Your goal is to make it to that initial $1,000 — NOT start the next Google.
Here’s a quick exercise that should get you going in about 10 minutes: Brainstorm a list of ideas, pick your favorite and start with that. If it doesn’t work, either improve it, or cross it off the list and move on to the next one.
If you don’t have any ideas at all, look around at the marketplace. You don’t need to be unique to make money, and you don’t even need to be the best (another HUGE misconception about freelancing and earning more). You do, however, need to be consistent and persistent, and laser-focused on just one goal…
Your only goal with freelancing and earning more is to get 3 paying clients. With freelancing, 3 is the magic number — you’ll know it’s not a fluke, and you’ll have a client base that’s significant enough to show you what you need to do to improve your offering for maximum impact. Even if the rates aren’t high (don’t worry about that just yet), you’ll learn invaluable insights that you’d never otherwise have gained.
It’s not sexy to say, but it only takes an average idea with above-average execution to win.
Excuse #3. “Should I set up a Facebook page??” and other worthless tasks that replace making money. People tend to treat starting a business like they’re packing for a vacation — you pick out all the fun (or unchallenging) stuff first. “Social media profiles, check. Business cards with fancy logo, check. SEO-optimized blog, check.” What ends up happening is they spend all their energy STARTING a business and never actually DOING business.
YOU DO NOT NEED SOCIAL MEDIA TO EARN MONEY ON THE SIDE. Let me say that again. I recently paid someone over $50,000 for a few months of work. He has no website. He has no significant social-media profile. What he IS good at is understanding my problems and solving them. He makes over $10k/month from me now.
Please listen closely because this is one of the most pernicious myths around right now. Virtually every “expert” is telling you you MUST have a full complement of social media profiles, including Twitter, Facebook, LinkedIn, blog, etc. That’s complete BS.
How will Twitter get you paying clients? This is when people start hedging and coming up with ridiculous answers like “It will help me engage…and be a brand.” Your goal isn’t to build a brand. It’s to get 3 paying clients. Anything else is a waste of time.
There’s absolutely nothing inherently wrong with business cards or starting a blog or managing a Facebook profile, but be honest with yourself. Is that task mission-critical, or are you using it as a stand-in for talking to a real, potentially paying, client?
Key Takeaway: When you’re starting to earn money on the side, you only have one goal — get 3 paying clients. If you can do that, then you’ve proven not only your idea, but your execution, and you’ll be thousands of dollars ahead of today.
* * *
Baker’s Note: Hey gang, it’s Baker. I’m stoked to be able to feature this post today. From the very first week I started blogging, I’ve modeled Ramit’s approach to writing, branding, and business. These days, Ramit is constantly pushing me to focus my efforts on the key elements of my business that’ll enable me to earn more. Most importantly, he’s one of the only people online who is willing to call me out when I make excuses. He’s played a big part in helping me generate a couple thousand dollars of online income… and will be an even bigger part of my ability to make many more times than in the coming months.
Ramit’s recently launched a video course with step-by-step videos, case studies, worksheets, and live training on how to earn your first $1,000….and then grow it into more. It’s one of the most compelling and impactful courses I’ve seen anywhere. And in case you’re wondering, I’m not making a single penny for referring you. Ramit doesn’t need to pay me anything… he’s already directly contributed to me earning thousands of dollars more in my business. If you’re interested in doing the same, you can get a free preview of the course here.]
* * *
Ramit Sethi is the author of the best-selling personal finance book I Will Teach You To Be Rich. His new program is designed to help you earn more money on the side.