b&b82 How to crush your income goals in the New Year
Most of the time, we think about what to do with money we already have – either spend less or save more. It’s money we can control, so we focus on this. Failure and success can be easily measured and contained. Thinking about increasing income means you have to leave the results of your efforts in the hands of someone else. It’s out of your control. That’s kind of scary. Sometimes, no matter what you do, it might not work. On the flip side, there is a limit to how much you can save and spend. you can only work with what you have. More than investment returns or saving or being frugal, increasing your income is the most impactful way to financial success. Most people take a passive role in earning income. Today we talk about how to take an active role in increasing your income and taking more control of your earning power.
Pam: There’s three ways an advisor can be paid: There’s fee only advisors, fee based advisors, and commission based advisors. So let’s start with commission based advisors, ‘cause I feel like that’s the easiest to explain. Commission based is basically they sell you a product and they make commission off of it. Now, this goes with insurance and investments, and any other products they sell. They might also get a little referral fee for sending you to someone like an attorney or an accountant. They might get a kickback for that, or another agent or something, but they basically earn commissions off of products. …Fee based advisors are kind of a hybrid of fee only, which I’ll go into in a second, and these commission based advisors. So, fee based advisors, they charge you a fee for financial planning, so financial plans aren’t usually free with the fee based advisors, and usually with fee based advisors, the financial planning fee is the bulk of their revenue, it’s the bulk of what they make, but at the same time on the flip side, they might also be an insurance agent or they might sell investment products and get a commission off of that.
Pam: Always, always ask how your financial advisor makes money. I cannot stress that enough. Because you need to know for your own sake, and to also understand what their motivation is for recommending certain things to you.
Pam: Something about spending and saving, it’s comforting. It’s something where you have this limit on what you can do with it, and that sort of gives you this comfort zone, and thinking about increasing your income means that you have to step out of that.
Pam: Making income and thinking about income and setting income goals is a scary thing, but it is a very very necessary thing, because at the end of the day there’s only so much you can do in terms of limiting your spending and saving. The money that you have can only go so far.
Pam: Break up your goal into bite sized actions. Track your monthly income. And also create goals that are tied to an action and not necessarily to a result.
Pam: How to crush your income goals in 2016 really quickly: set income goals through cashflow projections, ask for a raise or raise your rates, supplement your income through side hustles, break up your goals into bite sized goals, create goals that are tied to action and not results, and start putting yourself out there however small that is, just start telling people about what you do and you’d be surprised how many people come to you and say that they need it.