income-up

The Biggest Challenge to Increase Your Income This Year

income-upEvery beginning of the year, most of us have a common activity, that is to make your new year’s resolution. When you are still studying in school, the normal resolution would be to study harder, get more ‘A’s in the exams. As we grow older and into adulthood, the common resolution would be to make more money.

Think about it. If you are in the sales department, or a business owner or a self-employed salesperson, the very first goal you would set for the year is how much increment you want on the sales revenue.

If you are under employment, your boss will give you a new set of higher key performance indicator (KPI). You would probably commit to perform better and try to get a raise, if not a promotion on the coming round of performance review. Most likely, most new year resolution has something to do with money and earning more income.

Setting a Higher Goal

When it comes to personal financial matter, I normally urge people to set a higher target of savings and investments. It is easier to achieve if you can make a higher income this year compared to last year. Of course, bigger goal comes with bigger challenges. I’ll talk about the biggest challenge of all in this article. Just a hint – it is not about the lack of discipline, lack of strategies, lack of time…You can make a guess now but keep on reading.

What’s your New Year Resolution?

Okay, enough about money. What about other types of resolutions you set for the new year? If you want a better relationship with your family, you might commit to spend extra time with your kids, or date your spouse more, like at least once in a week. When you spend that extra time with your kid, you want to really get into their world, and not just letting your son to play on the iPad while you watch the latest TV shows.

If you have a new year resolution to have a healthier body, you might have committed to eat more vegetables and cut down your fat intake. You might subscribed to a gym in order to work out more frequently. Extra effort needed if you really want to look good and young.

Some people also have a resolution to travel to certain places. For example, I have a friend who blocks out the vacation dates on his calendar. He knows exactly where he will be visiting for the whole year. Air tickets are booked early and he will simply reject all other events including wedding invitation that falls within his vacation period.

All these different resolution is believed to be able to contribute to your overall happiness. More or less, each one of those commitment is going to make your life better. Assuming that you successfully make it all, you are supposed to live happier, healthier and wealthier at the end of the year.

Making a new year’s resolution is easy. The big problem now is how to do it all. All these stuff require not just money, but also a lot of your time commitment and effort. These two resources is what majority of us lack of.

For example, if you spend more time to make money, you are left with not much time to spend on building a better relationship. You don’t have much energy to exercise and build a healthier body. Under stressful working environment, some people even tends to eat more just to relieve the pressure.

Here is the biggest challenge

Let’s dig deeper to the crux of the matter. What I think is the biggest challenge of all is that most people start with zero on 1st of January.

If you are a salesperson, you start with zero order until you close the first case. Last year’s production is considered done and it is counted for last year’s, not this year’s production. If you are an employee, your performance is reset whenever your boss is replaced. Your pay is of course starting from zero every day since you are paid as long as you work for your employer. If you are in those kind of business that relies on new sales every day, you basically start from zero at the beginning of the year.

So to make more money this year, you got to repeat the effort you put in last year, and plus some more effort to secure an income increment. I can say most of the people who are earning an active income are facing this problem. To make more money this year, you have no choice but to work even harder, if not smarter this year compared to the years before.

Not to start with ZERO

What can you do about this? In fact, there are some important elements that when done right, you don’t have to start with zero every year. I’ll give some examples of how this concept work.

First example, I subscribe to some services that I use on a regular basis on my business. These include the mailing list application which I pay several hundred ringgits a month, the website hosting service which I pay a few thousands ringgits a year, and the several magazine and membership subscription I renew regularly. These service providers I just mentioned don’t start with zero sales. They have a ready subscribed customers who will continue to use their service as long as the service is good and updated.

Another example is the unit trust consultant. These consultants not just get paid when clients deposit new fund to invest. They are also paid a certain fee on the asset under their management. So they starts with a basic amount of pay. The effort they put in this new year is going to contribute to the bottom line, increasing their commission paid on the total fund under their management.

Take a look at the household items at your home. Do you subscribe to Internet, Astro, water filtering system? More and more businesses are moving into providing subscription based service or products. This is how they can scale bigger and take in more business on top of the existing subscribers.

Start with a base

The whole picture is different when you start with a base. So the effort you put in these year to grow your income will be built on top of your last year’s revenue. If you structure your career or business this way, you will have the luxury of having more time to commit to your other non-money-related resolutions. You’ll have more time to improve your relationship, your health, your look and ultimately your happiness.

It is important to increase your income every year, so that your other non-money related resolutions can be met too. So that’s why I said that the biggest challenge to increase your income this year is the reality that you start with zero on 1st of January.

Now, I want you to think hard about how you make money. How your business is structured? How your career is allowing you to leverage on what you’ve done on previous year? What is important to do this year that will still have an impact next year and the future? If you can arrange your business model in such a way that you start with a subscribed clients, repeat customers, renewal income etc. Congratulations!

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