Most people think that how much you work and how much you earn is a linear correlation: the more you work, the more money you earn.
Generally speaking, we can see this to be true, especially for dollar-per-hour jobs. But what about those people who work themselves to death at 70 hours a week for $15 an hour? And what about the people working 50 hours a week who make three times as much with a chill desk job or internet business?
It can’t be not just about working harder. It’s about working smarter on the right things.
And I’m sure there’s someone out there who isn’t as smart as you who is working half as many hours as you and making twice as much as you. So the question becomes, how can we work smarter to earn more and make less like them?
Warren Buffett did a question and answer session in India a few years ago. And he joked about how he was making thousands of dollars a second even though hadn’t done a damn thing the whole day yet.
How does he do it?
Well, he’s gifted in business economics and has spent decades developing his investing knowledge so that he could invest in some incredible companies that will earn the money for him. And you may not be able to do that, but you can emulate other parts of what he does.
For time management, he takes a simple path. He keeps his calendar simple. In an entire month, he may have only three major things to do. He writes these priorities down in his calendar book and makes sure he gets them done. Some people, like Bill Gates, like to create to-do lists for every moment of their day, but Warren has a different approach of uncluttering his mind and focusing on what matters most. It leads to a less stressful life with clear goals.
Here’s a simple technique I learned from Brian Tracy, a successful businessman, speaker, and author:
Find the one thing that you do that is the most important to the company you work for. It’s usually related to making more profit. Double down and spend more time on improving your skills at producing more of that one thing.
The Pareto principle says that 80% of results usually come from 20% of your work. Spend more time on the 20% of your work that’s most impactful. I’m almost sure there’s something you’re spending your time on every day that eats up your time, doesn’t have the most impact on your income, and could be out-sourced or delegated.
Most average people have the wrong mindset of trading their time for hours. Because of this mindset, they’re putting in minimum effort and often seeking opportunities to waste time and do nothing. While that may save them some work in the short term, that doesn’t set themselves up for higher earning power in the long term.
Instead, be the person who gets the results people want. If you deliver value, you get paid whether or not it took you 150 hours or 2 hours to achieve those results. If you can find a system to achieve those results with less time, which is what a business allows, you win at the game of wealth.
Following along the idea of minimalism for productivity, Brian Tracy said in his book The Focal Point that processes get exponentially harder based on the number of steps involved. The more steps you add, the more time, complexity, and error are involved according to this equation: n^2.
If it takes 1 step, 1^2 is 1, which is easy.
If it takes 2 steps, 2^2 is 4, which is harder.
If it takes 3 steps, 3^2 is 9, which is much more complex and error-prone.
So needless steps. If you tell someone to tell someone to do something, that’s three steps. And each of those steps has a chance for miscommunication or screw-up’s to occur. If you can create something without more efficiently, do it.
Mr. Buffett also has a saying that goes “The more you earn, the more you learn.” So if you can start learning about a few skills that will help you get more results, even if they’re not traditionally learned for your job, like public speaking, writing, drawing, or storytelling, you may be able to see your income rise.
What are your thoughts on income and work? I’m most interested to see if you have any stories of people who work a lot for little or work very little for a lot.