3 Steps To Increasing Your Income

Most accountants, financial planners and wealth-building experts agree that there are really only three ways to increase your income. You can either:

1. Increase your revenue (make more money)

or

2. Decrease your expenses (spend less money)

or

3. Do both 1 and 2

However, what is not so obvious are the words that should always follow these "income-increasing" statements. Accountants, financial planners and wealth-building experts are often so close to these principles that they assume we all know them to be true. They also tend to believe that everyone has the necessary discipline and patience to automatically make them happen. Here are the reality-based revised versions of the statements that, although might not be as easy to relate to, really make more sense and, if you follow them to the letter, will help keep you on track. If you want to increase your income you must either:

1. Increase your revenue (and at the same time keep your expenses the same or less than before)

or

2. Decrease your expenses (and at the same time maintain or increase your revenue)

or

3. Do both 1 and 2

One version of Parkinson's Law is that "expenses rise to meet income." Put another way: "The more you make, the more you spend." If you truly want to increase your income, it is important to maintain the same, or even a scaled-down, style of living for a period of time.

For example, if you make $45,000.00 per year and receive an annual raise of 10%, you gain an additional $4500.00 per year ($375.00 per month) for a new total of $49,500.00. It is awfully tempting to spend this extra $4500.00, rather than invest or save it. In addition, it is easy to talk yourself into "upgrading" your lifestyle by trading up for a more expensive car, taking an unplanned vacation, or some other "deserved" reward. After all, you just "increased" your income by $375.00 per month. Right? Wrong ? if you spend it!

If you spend the extra money, you have not really increased your income at all. In fact, if you spend it and then take added taxes and other liabilities into account, you may actually have less income than you had before the raise! Weird, huh?

The point here is that it's not just about making more money. It's about what you do with the extra money that determines whether or not you have truly increased your income. The reverse is also true. Let's say that instead of the 10% raise, you get no raise at all. But, you decide to "raise" your income by cutting expenses. If you find a way to cut your expenses by 10%, you actually are gaining over $375.00 per month. If you are able to cut your expenses by $4500.00 per year, in reality, you just increased your annual income by 10%. Weird again, but true.

Your desire, ability and willingness to both cut expenses and increase revenue will determine how fast and how much your income will jump. It's a powerful combination, and this is the "secret" that most wealthy people use all the time.

Dr. Dan Strakal has been an expert on the changing workplace, job transition, and career development for nearly 20 years. He acts as a trusted client advisor and consultant within the corporate sector, government agencies, civic organizations, small businesses, and educational institutions. He also provides business, executive and career consulting, coaching and workshops for individual clients and is the coauthor of and contributor to two books, Better Job Search in 3 Easy Steps and Better Job Skills in 3 Easy Steps. Dan is often called upon by the national and international media as an expert and has appeared in The Wall Street Journal, Self Magazine, SmartMoney.com, Computerworld, Diversity Inc. Magazine, Chief Information Officer (Australia's Magazine for Information Executives), the Radio America Program: News You Can Use, KBS Radio Canada and many other media outlets. He is on the Board of Directors of the Career Planning and Adult Development Network and is a Platinum Member of the Career Masters Institute. More info at http://www.capable-consulting.com

---

How To Be the Ultimate American Consumer

Feel like a lemming lately? Ready to follow the crowd... Read More

How to Make More Money

When I was a student in London, I had a... Read More

Ben Franklin Didnt Quite Get it Right

When Ben Franklin said "a penny saved is a penny... Read More

The Difference Between Wants & Needs

So you want to become wealthy? While there is no... Read More

Financial Intelligence - Natural Marketing For Lone Rangers

"Ooooooh," you may say, "I could NEVER be good at... Read More

Pennies From Heaven

I want to share an experience I had in common... Read More

Re-discovering the Fundamentals of Financial Planning

To lose weight in the 80's, we went on low-calorie... Read More

Super-charge Your Dream of Retiring Rich with the Roth 401K!

This retirement account is so new and unique that you... Read More

Gain More Control of Your 401k - What It Can Mean to Your Future

Points to ponder as you consider what can be done... Read More

Controversial Wealth Audit Reveals Over 90 Percent of Us Could End Up Working Forever...Are You One

Results from a new tool developed by UK based firm,... Read More

Use Feng Shui Coins To Increase Your Income

Feng shui coins can allow you, among other things, to... Read More

10 Ways to Save $50 Per Month: The Art of Pinching a Penny Until It Screams

1. Save up to 50% per month on convenience cleaner... Read More

3 Simple Ways to Generate Cash Flow

This article focuses on generating cash as a full time... Read More

Creating Money, Prosperity, and Abundance Now (Part 1)

I have given many prosperity lectures over the years and,... Read More

Endowments and Endowment Shortfalls - What You Need To Know

Endowments and endowment mortgages have received a lot of bad... Read More

A College Degree or an MBA is NOT NEEDED to be Financially Free

Look at Forbes' top 10 United States wealthiest people. Notice... Read More

What it Means to be Rich

Many people have a false understanding of what it actually... Read More

The Wealthy Mindset

What is the difference between wealthy people and poor (even... Read More

Wealth Building Strategy

There are many of us who are working on our... Read More

Your Money Or Your Life

Have you stopped to realize that although you go... Read More

You Can`t Cheat An Honest Man

Author: James Walsh ISBN: 1563431696: Publisher: Silver Lake PublishingIn... Read More

Financial Planning for Beginners

Financial planning at an early age may seem complicated, however... Read More

Discover the Secrets and Possible Solutions To Money Problems

It is sometimes pitful how many projects are never born... Read More

Let Me Inspire You - You Aint Seen Nothing Yet! (PART-1)

You know about compounding right? You understand what pyramiding your... Read More

Wealth Building Tips: Manage Your Money

As someone who loves to shop, enjoys holidays and owns... Read More

The Secret Barrier To Wealth - Underearning

Is the ghost of "Money Past" haunting you? Do you... Read More

3 Steps To Increasing Your Income

Most accountants, financial planners and wealth-building experts agree that there... Read More

Wealth Secrets: Saving Your Way to a Fortune

SCENE 1: Pharaoh has just woken up from a very... Read More

Building Wealth: A Wealth Building Strategy Is More Than Simply Diversifying Your Investments

Wealth - an abundance of values. Each of us determines... Read More

Mastering Your Money

One of the things most of us have old ideas... Read More

What is Your Creative Retirement Plan?

The idle are a peculiar kind of dead that cannot... Read More

WARNING: The Biggest Lie About Compound Interest

Have you wondered why financial experts only tell you certain... Read More

Dont Leave Your Financial Success To Chance

Recently I was reading a book called The Millionaire Mind.... Read More