Every year, millions of Americans make New Year’s resolutions, often pursuing health-related goals. Then, every January like clockwork, interest soars for words like “diet”, “exercise”, and “gym”.
While I believe that physical fitness is important, we must remember that there are multiple types of fitness: physical, mental, emotional, spiritual, and financial.
Most people focus exclusively on physical fitness, often ignoring the other types, consciously or not. Those other types, however, are critically important to your overall wellbeing and cannot be ignored. If you are mentally, emotionally, spiritually, or financially broken, it does not matter how good you look.
Physical fitness is often turned into a New Year’s resolution because physical fitness is the simplest type of fitness to change. Generally, you eat better and exercise more. Improving mental, emotional, spiritual, and financial health, on the other hand, is far more complicated and challenging.
In this article, I want to focus on financial fitness and suggest that you resolve to start your own business in 2017.
Why should you start your own business?
Marc Benioff, one of my business heroes, once said, “The business of business is to improve the state of the world.”
While I agree with Marc, there is a far more practical (and obvious) reason to start your own business: you need to make more money.
Wages have been going down against inflation for decades. Companies are reluctant to hire full-time workers, often opting to hire contractors. Prices have been increasing since time began on everything from food and energy to homes and tuition.
Furthermore, the world economy is changing, moving from the industrial-age economy that we’ve come to know to the gig economy, which stands to disrupt the entire world.
In short, it makes sense to start a business and learn how to make more money.
I want to be clear that money is not the most important thing in life, far from it. But, the fact remains that money touches nearly every aspect of our lives. It is, therefore, critical to understand money at a basic level: how to make it, how to keep it, and how to grow it.
Money, in and of itself, is neither good nor bad. Rather, the person who possesses money is good or bad. Money does not change people; it reveals people.
If you give a person a mountain of money, you’ll see who they truly are. Their deep-seeded values and beliefs will rise to the surface. Their inhibitions will fall to the wayside. You will see if they were a truly nice person or if they were just being nice because they were broke and desperate to make ends meet.
How my dad changed my mindset about money
Several years ago, I was obsessed with saving money. I would cut costs at every opportunity. I ran myself into the ground to save every last penny.
One day, my dad looked at me and said, “You know John, you can’t save your way to being rich. Eventually, you have to make more money.” While simple, my dad’s insight was profound.
To this day, I have friends who will spend an entire afternoon clipping coupons to save $0.10 on bananas. They will drive to the other side of town because toilet paper is 10% off. They show little respect for themselves and their time, the one resource that no one ever gets back.
Saving money is good, and cutting costs mercilessly is a good short-term fix. However, the best long-term strategy is to find ways to make more money.
Once you admit to yourself that you want to make more money, you must find a way to do it.
The only way to make more money
At a high level, there is only one way to make more money: you must sell something.
“Ew, sales is icky,” you might be thinking. “I hate sales. I never want to sell.”
I hate to break it to you, but every single person on the planet is in sales, including you.
You can look for a new job and sell employers on reasons to hire you. You can ask for a big raise and sell your current employer on why they should pay you more money. You can start a business and sell prospective clients products or services that help them solve a problem.
Any way you slice it, you must sell something if you want to make more money. There are, however, different returns for different methods.
| Method | Time Required | Increase |
|---|---|---|
| Find a new job | 3-6 months | 10-20% |
| Get a big raise | 1-2 months | 5-10% |
| Start a side business | <1 month | 25-100% |
Looking for a new job
Looking for a new job is the most common method of making more money.
The theory goes that, if you get a new job, you will start at a higher level with a higher salary. While that sounds promising, job searches require a great deal of time, energy, and sometimes money, especially if you want to find a high-quality job. In my own experience, I would say that it takes 3-6 months to land a high-quality job, sometimes longer.
Once you find and land a new job, you will probably increase your salary by 10-20%. In most cases, that is not a good return for the time, energy, and money involved. I personally seek only opportunities where I stand to increase my salary by 50% or more, ignoring most other opportunities.
While I won’t be able to grow my salary at that rate indefinitely, I find that setting a target of 50% helps me eliminate “it sounded good at the time” opportunities and forces me to focus on the big wins. From my last job to my current job, I increased my salary by 56%. So I am still on target.
Negotiating a big raise
Negotiating a big raise strikes fear into the hearts of most people and rightfully so.
I have heard stories where people have lost their jobs because they asked for a raise. While I am sure that there is more to most of those stories, the point remains that asking for a raise can be incredibly stressful for some people.
Still, asking for a raise is in many ways better than finding a new job. Your employer benefits because they do not have to hire a new person to replace you, and you benefit because you do not need to go through the aggravation of looking for a new job.
That is especially valuable to an employer if you’re a high-quality employee who turns in good work, on time, with a positive attitude. Asking for a raise also benefits you because you do not need to spend three to six months looking for new opportunities, sneak out of the office to take phone and on-site interviews, or have that awkward conversation with your manager where you tell them that you don’t love them anymore. You also avoid the huge risk of starting a new job at a new company and hating it within the first year. That is especially true if you love your current role, company, coworkers, etc.
If you do make a move and you end up hating the job before the end of your first year, you find yourself in a very tight spot.
Employers are extraordinarily cautious about job hoppers who bounce from company to company every year or two. Plus, you get the added benefit of gaining promotions and salary increases under one roof, which looks great to future employers and puts you in a better strategic position to get a bigger and better job offer down the road.
Get everything you can out of your current company before you move to your next company.
Starting your own business
Now, let’s look at what I believe to be the best way to increase your income: starting your own business. (If you’re curious, I wrote an article about how I made an extra $11,430 on the side.)
While jobs and raises help you reach and sustain new levels of income, starting a business is by far the most scalable way to make more money over the long-term. In other words, you can grow a business far more and far faster than you can scale a job or raise. In some ways, there is actually less risk in starting a business.
Despite the hard slog that is entrepreneurship, there are some serious benefits to starting a business. The first of those benefits is a substantial and scalable increase in your income over time. The second benefit is the diversification of your income streams. The third benefit is the control that you have as an entrepreneur to run your business and your life your way.
Make no mistake, starting a business can be extraordinarily challenging. In many ways, starting a business is the hardest thing that you will ever do. However, starting a business is one of the best ways to grow yourself personally and professionally. You will learn more about yourself and others from starting a business than from almost any other method of personal development. You will increase your financial savvy, you’ll increase your human understanding, you will add value to the world and make a lasting contribution, and you will help others solve their problems and achieve their dreams.
If you’re curious to learn more about how to start your own business, join my free email newsletter.
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