I like to say that frugality has bought my freedom. Frugality is important after all because a savings rate is the primary indicator of how short (or how long) it will take us to reach financial independence.
But, frugality is only the first factor that affects your savings rate. The second factor is your income. To maximize the savings gap between your income and your expenses, you have to optimize both.
So, in this article I’m going to focus on a strategy to make more money, whether your money comes from a job, entrepreneurship, investments, or mix of everything.
Money is the Consequence, Service is the Cause
Old-school teacher Earl Nightingale explains in his classic Lead the Field the essence of making more money:
Money can’t be sought directly. Money, like happiness is an effect, and the result of a cause. The cause is service.”
I love that. Money is an effect, not a cause.
If you want more money, ironically it doesn’t make sense to focus on the money. Instead, if you focus on giving better and more service, money will flow to you naturally because it’s a cause-effect relationship.
If you think about it, this concept is really the essence of economics in general.
For example, someone is hungry and too busy to cook a meal. A local entrepreneur recognizes that need and creates a restaurant in order to serve that person and others like her. If the restaurant owner consistently and profitably serves the customers well, it will thrive. If it does not, the business will die.
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Super-successful fast food restaurant Chik-fil-A is a perfect example of this basic success formula. What do you think all of the servers at Chik-fil-A ask when a customer is ready to order a sandwich?
“How may I serve you?”
An attitude of service is rare. Therefore it’s also valuable in any job or business.
It doesn’t matter whether you are a plumber, a real estate investor, a teacher, an engineer, a nurse, or a salesman. The essence of your job is service, and focusing on service will help you to create more income.
Why does this work? Because if you make service your priority, the people you serve can sense it, and they appreciate it.
Customers will buy from you again and also refer their friends. Bosses will promote you and give you raises. Employees and colleagues will give you their respect and their loyalty. Vendors will give you the best price possible and their top priority.
Service is not a gimmick. It requires the best in you. You will need creativity, patience, hard work, and humility. But few strategies come close to its simplicity and effectiveness for earning more money.
Align Your Goals With Service
If you choose service as your core strategy to earn more money, how do you implement it? The answer for me has been to align my business goals with service goals.
My core business is real estate investing. We buy properties and then rent or resell them.
The most difficult function of my real estate business has always been to buy the right properties at good prices and on good terms. Because acquiring properties has been the bottleneck, it has made sense to create goals around this function. I might have a goal, for example, to acquire 10 properties in one year.
But, following this strategy of focusing on service, I need to convert that goal from the consequence to the cause.
The people I serve in this part of my business are property owners who need to sell in an unconventional manner. They have reached out to me because they want to sell their property quickly, privately, and without hassles.
So, in order to actually measure my service, I transform the goal from “# of deals done” to “# of offers presented to sellers.”
Every time I meet with someone about their property, I am serving them. I listen to them, ask questions, and try to understand what they are trying to accomplish. I typically make them an offer to purchase their properties, but in all cases I try to educate them about their options so that they feel hopeful about their situation.
I never know for sure if I will buy a property when I make an offer, but I am confident in my ability to serve. The end result is that I will usually buy 15-20% of the properties I make an offer on.
The number of offers is what I measure and prioritize. The number of deals takes care of itself as long as I’m doing a good job of serving.
The key here is measurement. What you measure shows what you value.
Normally we just measure money, but what I am suggesting is that you measure service, whatever that means for you in your work or business. When you measure and create goals for your service, it will cause you to focus on it and get better at it.
BE More Valuable, Make More Money
Creating goals aligned with service is an important first step to making more money. But, becoming better at your service will increase your income as well.
In my example above where I measured the number of offers, the better I became as a real estate investor the more people I was able to help and the more offers I was able to get accepted.
Becoming more valuable is like a medical doctor who goes to school and trains for 10-15 years before beginning a full career. An entire decade or more is required to become valuable enough to serve a patient.
Is it any wonder with such long training that medical doctors typically earn more money than average?
This principle works with any profession or business. Core skills and knowledge must be learned and practiced over and over again, sometimes for years (check out this short video about Jordan, Mozart, and 10,000 hours of practice).
Here is an important exercise to perform if you want to increase your value and make more money.
Take out a piece of paper and a pen (or a blank document on your computer), and write down the 5 most important skill areas in your profession. What skills and/or knowledge define a professional who can deliver an excellent service?
For example, here is what I wrote down for my business as a rental real estate investor:
- Real estate valuation (comparative market analysis, income approach to value, market trends, etc)
- Marketing and sales (generating leads, prescreening prospects, negotiating, making offers)
- Deal analysis (net operating income, cap rates, internal rate of return, cash on cash return)
- Raising capital (private lenders, seller financing, bank financing, risk management)
- Systems and paperwork (purchase agreement, leases, LLC documents, checklists, filing systems)
If I want to provide the best service as a rental real estate investor, my team and I need to be excellent at these skills.
What I have done here is basically outline my curriculum for self-education and training. I need to be honest with myself to assess where I am weak and where I am strong. Then I need to seek out the education sources and the training to make this happen.
Like a medical doctor who attends medical school, becoming better does sometimes cost money. But don’t think you need to break the bank or go into debt, especially with a lifestyle business that can begin on a shoestring.
Also, don’t think you need to wait until after your education to get started. Some of the best training is on the job. If you can work for someone who already does what you want, you will learn while also making a little money. I’d even be willing to work for free for a period of time in the right circumstances.
There are also a lot of free and inexpensive sources of education on the internet. For example, with real estate investors, BiggerPockets.com has an enormous archive of free information and a large community with helpful support.
If you have the desire to become better, the path to mastery will open itself up to you. Just remember there are no short cuts. We must pay our dues and deliberately study and practice the skills we want to master.
Service Brings Money & Happiness
It is one of the beautiful compensations of life that no man can sincerely try to help another without helping himself.” — Ralph Waldo Emerson
In the big picture, service is not about getting. It’s not about me, me, me. Service is about giving. It’s about making sure the other person is taken care of.
But when we serve someone, it also just feels good. Our brains literally produce the natural versions of morphine or heroin!
Getting addicted to service sure beats the other choices!
And I need to remind you that what I am writing here is not what I’ve perfected. I write it as a reminder for me as much as for anyone else.
I tend to get anxious and stressed with business and money. But almost without fail, if I can stop myself and switch from the perspective of getting (“what’s in it for me?”) and shift to service (“how can I help?”), the stress and anxiety disappear.
It’s amazing. Try it for yourself.
Pause for a moment, close your eyes, and just think about serving someone. How can you help someone today?
Doesn’t it feel good?
What if you could channel this feeling daily in your work and business? Service could literally make your entire life happier!
A focus on service has the potential to make you a lot of money. It has the potential to help a lot of people. And it has the potential to make you happier.
I say let’s all go out and start serving today and every day!
In what ways do you serve people in your job or business? What are your core skills that will help you serve better? I always enjoy hearing from you. Please leave your comments below or comment on my Facebook or Twitter pages.
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[…] a job or running a business is not a bad thing. Serving others with your time, energy, and skills can be incredibly fulfilling. But getting stuck at a less than ideal job can quickly erase idealistic notions. Even a great […]