It’s interesting to note that until you get to the $75,000 range, you are likely to make more money as an employee than as a business owner. There is a higher percentage of entrepreneurs in the less-than-$20,000 income range. In the $20,000-$29,000 bracket, there are more employees than entrepreneurs. The same is true for people who make between $30,000 and $39,000: More of them are employees. On the other hand, only 7 percent of employees make more than $75,000 whereas 19 percent of the self-employed do.
All that said, you can still get rich from a paycheck. Consider this: If you can save $10,000 a year for a full career of 35 years (you can pretend you’ll work fewer years, but you’re just kidding yourself), you’ll retire a millionaire — thanks to compound interest. If you can save $25,000 a year — and I think you eventually can –you’ll be worth between $5 million and $10 million when you retire.
The secret to saving big bucks is to get paid more than you are making now – considerably more, if at all possible. This won’t be achieved by working harder. Your salary will go up, but so slowly that you’ll more than likely eat up the increases in a gradual escalation of your standard of living.
To save the big bucks, you need to get a few quantum lifts in your compensation. And you get them not, as I said, from working harder but rather from doing more valuable work. When I say “valuable,” of course, I mean what is valuable to your business.
To a business, a valuable employee is one who can make a critical contribution to the bottom line. All businesses need various skills and talents. But they mostly need, and mostly value, those that stimulate sales, increase customer retention, boost customer spending, and bring in a bigger profit. The jobs that generate cash — the marketing jobs, the selling jobs, and the merchandising jobs — fall into this category. You can cut corners here and there to save money when things get tough, but you can’t get rid of your salespeople or things will get a lot tougher.
People who generate sales have magic on their side. They are the people who do that first thing — sell the product — and then do it over and over again for as long as the business is operating. So long as these guys are operating, everything else – and everyone else – can keep going.
To put yourself on track to make the big bucks, you must figure out the magic of your own company. Study the sales and marketing programs till you discover what works and what doesn’t. Make suggestions and contributions. Help your boss make money.
If you work at this long enough and with intelligence, people will take notice. When you get your opportunity to move into the cash-generating team, seize it.
Then you will be well positioned to earn those big paychecks. And all you have to do to keep them coming in is work harder than everyone else.[Ed. Note. Mark Morgan Ford was the creator of Early To Rise. In 2011, Mark retired from ETR and now writes the Palm Beach Letter. His advice, in our opinion, continues to get better and better with every essay, particularly in the controversial ones we have shared today. We encourage you to read everything you can that has been written by Mark.]