Not all of us are materialistic, but we can probably all agree that making more money is a good thing. It’s true that setting a strict budget, cutting your expenses, and saving more money can go a long way in maximizing your personal financial growth, but these strategies pale in comparison to one major variable in your life–your income. Everything else being equal, making more money makes life easier.
Most people realize this, but so many neglect certain fundamentals and throttle their income potential. For example, take these seven stifling habits that could put a stubborn limit on the amount of money you make:
1. Failing to negotiate
Everything is negotiable. That doesn’t mean you’ll always get what you want, but you won’t get what you don’t ask for. Let’s consider a salary negotiation. The first offer most employers throw out isn’t the highest they’re willing to make. If you’re confident in your skills and experience and you’ve done the research to know your ballpark worth, there’s no reason why you can’t ask for more. The worst that can happen is that they say no and respond with a counteroffer–and it’s still more than you would have gotten otherwise. I took a class in college called “Negotiations 101,” and one thing I learned really stuck with me–never accept the first offer, even if all you say is “Can you do a little better?” It’s one of the best pieces of advice I’ve ever received.
2. Failing to invest in yourself
According to famed investor Warren Buffet, “You are your own biggest asset by far.” You might invest in stocks, real estate, or some other material possession, but the best investment you can make is in yourself. You are the force responsible for earning money, and you’re the one making the decisions in your life. Equipping yourself with greater knowledge, more skills, better health, and more experience means you’ll be worth more to your future employers, you’ll make more valuable decisions, and ultimately, you’ll earn more money.
3. Tunnel vision
If you’re going to invest in something, you might as well invest all the way. This is common for a lot of careers; most people toil away the hours in the office, hoping to climb the corporate ladder, or they might invest every penny they have into their new startup. On the one hand, this is admirable, but tunnel vision can interfere with your long-term ability to make more money. It’s actually a safer strategy to hedge your bets by setting up multiple income streams, and never relying too heavily on one source; you never know when your business or career might be disrupted. If you have backup strategies, such as a rental property or a side business, such a devastating event won’t ruin you.
After a few years on a chosen path, you’ll probably find yourself losing enthusiasm or motivation. You’ll become complacent with who you are, what you do, and where your place is within the organization. Complacency manifests itself in many areas; for example, you might invest less time and energy in your work, resulting in less value for the company. Or you might become complacent with your salary and stop asking for raises as you gain more experience and skills. If you think you’re experiencing burnout, take steps to remedy it.
5. Only doing what’s expected
Goals are important for achieving success, but they also have a limiting effect. For example, take the impressive feat of a runner’s marathon: 26.2 miles. That’s a very specific distance, and I’d argue that the majority of marathon runners out there would have no problem if the bar were raised to 27 or 28 miles. Yet everyone stops at 26.2 miles because that’s the target. Setting targets in your life–with your education, skill set, position, or salary, can trick you into achieving the bare minimum you set for yourself. Always strive for more.
6. Excessive loyalty
Many of us have been in at least one position where we’ve found ourselves wanting to stay somewhere because of loyalty rather than any objective value. Even if you know that your job is a dead-end that will never give you the potential you seek, you stick around because of a feeling of loyalty to your employer. This is the comfortable decision, and it isn’t a bad one–I consider myself a loyal person, and I admire loyalty in others. However, if you sacrifice your goals for your loyalty, it starts to become a disservice to you.
7. Failing to put your money to work
This follows a similar thread of logic as the “hedge your bets” approach. Once you’ve accumulated some modest savings, don’t let your money just sit in the bank; make it work for you. Invest in stocks, bonds, or mutual funds and start reaping passive income, or use the money to invest in more education and opportunities for yourself. Your money can make you more money–so don’t leave it lying around.
It seems so obvious, but making more money is the first step to accumulating wealth; it takes money to make money. Whether your goal is to pay off your debt, accrue enough money to live independently, climb the corporate ladder, or just be in a better overall financial position, you first have to rid yourself of these seven habits. It helps to choose a field with a high potential salary or to move to a high-income area, but these fundamentals serve as the foundation for your long-term financial future.