Increase Your Salary - A Proven Plan To Boost Your Income

by Michael Masterson

Want to double your income?

In a two-year period, I doubled and then redoubled my income by doing what you'll read about in today's message. At least a half-dozen people I know personally have also doubled (or tripled or quadrupled) their incomes with the same system.

Let's start with a little exercise in logic.

You own an ice cream shop. You pay George, an ordinary worker, £50 a day to stand behind the counter and sell your product. After paying for the cost of the product, rent, overhead, and George's salary, you are left with £25 a day in profits. One day, George quits and his brother, Dan, replaces him. Dan is a harder worker than George and, as a result, he increases your daily profit to £50 a day - £25 more than you were getting before.

Question: To keep Dan happy, would you increase his salary by, say, £5 a day?

Answer: Of course you would.

Now Dan quits and in walks Charlie. Charlie is better than Dan. He not only doubles the profit again, to £100 a day, he's got all kinds of ideas about opening up another ice cream shop, hiring Dan to run it, and bringing in more daily profits to your business.

Question: How much extra would you pay Dan?

Answer: Unless you were a fool, you'd pay him an awful lot. You might even cut him in on the action.

Before I decided to get rich in 1982, I put in 20 years working for all sorts of different companies. Looking back at my performance as a worker, I'd honestly say my productivity was all over the place. I've been a good employee, a bad employee, and everything in between.

The day after my big decision was made, I recognised that I needed to increase my income - a lot. To do that, I realized I could no longer afford to be bad, mediocre, or even good.

To merit big, dramatic salary increases (for that's what I was aiming at), I knew I had to learn how to become valuable and then invaluable to my employer.

In the real world, ordinary employees earn ordinary salaries. Good workers - individuals who work harder and smarter to accomplish more - get above-average pay. But above-average pay won't make you rich. To gain wealth, you need huge increases - 25%, 50%, and even 100%. And if you can make yourself valuable (and eventually invaluable) to your business, you can get raises like that.

So how do you become invaluable to your business?

The answer. To become invaluable to your business (it doesn't matter whether it's a business you work for or a business you own), you must:

1. Learn (and eventually master) a financially valued skill.

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

Step One: Learning a ‘financially valued’ skill

A financially valued skill is one that plenty of other people are willing to pay good money for. What is ‘good money’? I'd say £80,000-plus.

This is a somewhat arbitrary number, but it is not far from the mark. To get wealthy, you need to invest - and not just £500 or £1,000. You need tens of thousands of pounds. To get that kind of scratch, you need to make a decent amount. In today's world, an income of £80,000 a year will allow you to enjoy a reasonably comfortable lifestyle and put a nice chunk of that into savings.

A typical kid out of college today can expect to earn about £20,000 and get an average raise of about 4% or 5% - which will put him about one or two percentage points ahead of inflation. As I explain in my books Automatic Wealth and Automatic Wealth for Graduates, that kind of income growth is enough to make you reasonably wealthy over time - if, that is, you scrimp and save for 40 years!

By learning a financially valued skill, the typical college graduate can double or triple his income in a year or two. And then, by applying that skill to his company's main growth source, he can see his income skyrocket in not so many years.

You don't need to pinch pennies (or give up your Starbucks lattes) to get rich. What you need to do is greatly increase your income. The trick to improving your wealth while you enjoy your life is to limit the growth of your expenses as your income grows.

Taking the example of our college graduate. If he can get comfortable living on a £20,000 salary and then double his income in two years and double it again two years later, he'll be earning £80,000 by year four. (This is not unusual for people who master a financially valued skill.)

By investing most of his after-tax income into real estate, stocks, and small business opportunities, he can see his net worth explode in a relatively short time. I'm talking about three to seven years.

Let's talk theory for a moment. There are three basic kinds of jobs in the business world: administrative, technical, and profit-generating.

• Administrative jobs include most positions in corporate management, product fulfilment, operations, and customer service, as well as some positions in finance and accounting.
• Technical jobs include most positions in information technology and engineering, and some legal, financial, and accounting positions.
• Profit-generating jobs are those that are directly involved in producing profits for the company. Profit generators include marketers, salespeople, copywriters, people who create new products, and the people who manage all of these employees. The leading profit generator is usually the CEO, whose main job is to deliver a bottom line.

Administrative workers, on the average, are the poorest-paid group. Generalists by training, they compete against a large pool of other generalists in jobs that require no special skills or talents. As an administrator, and a very good one, you can expect to see your income rise as your performance improves.

But, typically, it will be at the 4% or 6% level - probably not enough to meet your wealth-building goals.

Technical workers are usually better paid than their administrator counterparts. This is especially true at the beginning of their careers, when even an entry-level position requires a high degree of specialized knowledge.

Computer engineers, information technology people, and certified public accountants frequently start at higher salaries than do fulfilment managers and customer service clerks, but the difference tends to diminish over time. Top engineers often make more than operational vice presidents, but not much more.

Profit-generators are usually the highest-paid employees. They not only bring in a significantly higher salary than technical and administrative positions, they also earn more than most professionals (doctors, lawyers, dentists, etc.) More important, they have the greatest potential for income growth.

The biggest advantage of profit-generating jobs is that they give you a chance to share in the profits. Getting a ‘cut of the action’ is, far and away, the fastest way to a monster income.

So, which are the profit-generating jobs? They fall into only four categories:

• Sales
• Marketing
• Product Development
• Managing Profits

Salespeople, new-product makers, marketers, and profit managers aren't the only people needed in business, but they are the ones who help businesses grow and produce profits.

All other employees - including the most valuable lawyers, engineers, and accountants - are considered ‘expenses’... especially when times get tough.