To achieve exponential growth, the key is using the power of leverage. The more you use the power of leverage, the faster your progress will be. On the other hand, those who don’t use the power of leverage will need to work just as hard every time to get the same results.

Living a Lifestyle of Leverage

I believe that leverage is so important that you should make it a part of your lifestyle. You need to live a lifestyle of leverage. That means seeking potential leverages constantly and using them whenever possible.

To see whether or not you are living a lifestyle of leverage, ask yourself this question:

Do I achieve more with less effort over time?

The more you can answer yes to the question, the more you make leverage a part of your lifestyle.

Here are two things you should do to live a lifestyle of leverage:

1. Creatively use what you already have to build new things
   Here the focus is in the present. Look at what you already have and find how you can use them to build new things. If you have a business then find what new businesses you can build based on it. If you have a machine then find other ways to use the machine.
2. Think of what leverageable assets you should build
   Here the focus is in the future. Instead of looking at what you now have, look ahead and think of what you want to leverage in the future. This way you can start building those assets so that they will be ready by the time you need them. Without such a planning, years might pass before you realize that you have nothing to leverage. Start working now to make your future easier.

The ability to build leverageable assets (a term I learned from Beyond Code) is a good way to see whether or not a career is good for you. There are many people who just work year after year without ever building leverageable assets. Consequently, ten years from now they may need to work almost as hard as they do today to get the same results. Choose a career that helps you build leverageable assets.

Leverageable Assets to Build and Use

Here are several leverageable assets you can build and use:

1. Contacts

Your network is a great source of leverage. When you need something you don’t have, you can reach out to your network to see if someone has it. Even if you can do something yourself, chance is there is someone in your network who can do it faster and better than you.

To maximize your network’s leverage potential, you should know people from as many different backgrounds as possible. It won’t help you much if all the people you know have similar backgrounds.

Of course, to be able to extract value from your network you should invest in it first. Help people in your network sincerely.

2. Knowledge and skills

When you already master something, you can use it to quickly learn related skills and knowledge. What you know becomes a foundation to build upon. For example, in the programming world once you know a programming language it will be easier for you to learn a second language. Why? Because there are similarities between programming languages and you can use your knowledge of the first language to learn a second one.

There is a category of skills that has especially high leverage power: transferable skills. Transferable skills are skills that are useful across different fields. Some examples are time management (or, even better, energy management), marketing, and communication skills. You can use these skills in many different circumstances, so they are something you should pay special attention to. The more transferable skills you learn, the more leverage power you have.

3. Passions

Just like you can leverage your knowledge, you can also leverage your passions. Your passions act like a power source that motivates you to go further and dig deeper than you would normally do.

So use your passions to your advantage. Follow them and tap into the energy they provide. Leveraging your passions helps you overcome the initial period of failure on your way to success.

4. Achievements

You can use what you already achieve to achieve even more with less effort. Let’s say you already build a successful business. You can use that business as a basis to build a new business. You may promote your new business to your existing customers. Or you may assign some of your staff from the first business to the second one. You may also use the equipment of the first business to build the new business. As you can see, there are many ways to leverage what you already achieve.

5. Money

Money has great leverage power as long as you use it wisely. Instead of spending the money you earn on consumable goods, reinvest a significant part of it. Use it to buy other people’s time and expertise. Use it to buy tools and equipment. Use it to experiment with new opportunities.

Photo by Davichi

Recently I realized that while learning is fun, it’s even more fun if it’s related to my practical needs. The thrill of learning something that can immediately improve my life is more than just learning for learning’s sake. For that reason, now I mainly learn new skills that can improve my life and help me achieve my goals.

The best way to do that is project-based learning. With project-based learning, you create and work on a project that uses the skill you want to learn. Rather than just absorbing knowledge, you create something real.

Here are some examples of project-based learning:

• To learn a new programming language, you create a simple game using that language.
• To learn web design, you create a design for your personal web site.
• To learn to play guitar, you prepare to perform at a local event.
• To learn a new language, you write a short story in that language.

Why Project-Based Learning is Good

There are several reasons why project-based learning is a good way to learn:

1. It motivates you

Project-based learning motivates you because you can see the results of your learning. You have something to show for all the effort you put in learning.

Furthermore, you have a clear goal to achieve. It’s similar to the way having a finish line motivates a runner. If the runner just runs without a finish line, I’m sure he won’t be as motivated. Having a clear goal is motivating.

2. It pushes you to take the shortest path

Since your goal is to accomplish the project, you won’t waste your time with irrelevant things. You will spend time only on things that can help you finish your project. You will take the shortest path. This is a big benefit because otherwise you may get distracted by unimportant things.

3. It gives you feedback quickly

This is important because it speeds up your learning process. Rather than guessing if something works, you put it out there in the real world. You can then use the feedback to improve your skill. At the end, you will have a battle-tested skill under your belt.

Steps to Do Project Based Learning

Here are some steps to do project-based learning:

1. Choose a skill to learn that meets your needs

The first thing you should do is choosing a skill to learn. I recommend choosing a skill that meets your needs because that will make you more motivated to learn.

Look at your life and work. Do you have a plan to improve your life in a certain way? Do you have a plan to create a side business? Whatever it is, there must be a skill that can help you achieve your goal. That is the skill you should choose for your project-based learning.

2. Create a project around that skill

The project should have specific goals so that you know whether or not you are successful. For example, when I learned a new programming language (I have a background in computer science), I usually wrote a simple game using that language. I looked at the games that were out there and chose one of them to write. This way I had a specific goal in mind.

3. Aim to finish the initial version of the project as soon as possible

As I’ve mentioned above, getting quick feedback can speed up your learning process. So you should get your project out there as soon as possible. Don’t wait until everything is perfect before you show it to others.

4. Use the feedback to improve your skill

Based on the feedback you get, work on the areas that need improvements and test the result to get another round of feedback. Repeat this process until you reach the level of mastery you desire.

5. Create a new project if necessary

The project you choose might hone only certain aspects of the skill you want to learn. In that case, you might want to create a new project that helps you learn other aspects of the skill. Or you may choose to learn a new skill. It’s up to you.

Photo by cogdogblog

Before you start a task, you are going to want to assess the potential limit you can hit in aspects of the project. If you are about to set up a meeting for 24 dancers in your local area for them to get to know each other, you want to take the time to see how far your skills can take the occurrence. Will you simply keep it as a networking event, or will you try to set up a future dance contest, or will you go even further, and have everyone provide their information to be part of an e-mail group that continues to communicate with each other?

You want to assess your potential before you take action, so that you can judge whether the ending results of your efforts will be satisfying. If you are invited to give a speech, and are not sure if it is worth your time, this is the time to judge how far you can take the event. You might be able to give the speech, and at the same time make it remarkable enough to have a chance at attaining employment with one of the hiring individuals (from your desired place of employment) that would be present in the audience. In that case, it would then be more than worth it. If you couldn’t see yourself bringing a lot to the table, the speech might not be a wise use of your time.

Lean Toward The Option Where Your Passion Increases Potential

If you are provided with two internships, with one being at a local government facility and another being at a factory, and you see the government internship as more lucrative, don’t let that cloud your thoughts of which internship will be more valuable to you. If you can see yourself making more of an impact at the factory, because you have an intrinsic interest in bringing efficiency to a hands-on workforce, it would be nonsensical to take the government internship in the hope that the more lofty position would speak to future employers louder than the passion you would show at the factory position. Wherever you go, people want to see you bring a lot to the table, or they get the feeling that you are in the wrong place, regardless of how high-end the place is.

Your potential is easy to judge. The first feeling you get about how you will perform in a function or project is the one you want to listen to. You can then reflect on past examples of your efforts to add to that initial feeling, in order to accurately assess how you will do, or how far you will go, in the task. Your past repeats itself all the time in your current actions, because your personality and mannerisms are fairly fixed in place, so it would make no sense to think that the past version of you is a different person. You may be calmer with items that would cause you more tension in the past, but the same things that irked you in the past are likely to irk you today, and the same items you excelled at are the same ones that are your strengths today.

Cross Out Tasks That Would Lead To An Unsatisfying End Result

The idea behind checking your potential ability in a task before starting it is to filter out those tasks or events that would come out as “good” or “average” experiences. Since the goal is to stay in the “great” or “remarkable” categories, you have to protect the usage of your time and effort for those actions that are fitting. Here is a streamlined checklist of the process:

1. you are provided with, or see, an opportunity
2. you assess how far you can take the opportunity with your current abilities and passion
3. you decline if you can’t take it to a suitable level of greatness, and accept if you can
4. the value of your time continues to increase

Since you know your potential ability better than anyone, it is up to you to use that knowledge to avoid activities that don’t match it, and take part in those that do.

Armen Shirvanian writes for Timeless Information on topics including mindset development, social interaction, communication, and competition. He has also created a compilation eBook that contains thorough discussion about 11 valuable quotations. You can check out his articles and eBook at www.timelessinformation.com.

The importance of energy management is discussed thoroughly in The Power of Full Engagement by Jim Loehr and Tony Schwartz. The book argues that managing your energy, not time, is the key to high performance.

Looking at my own experiences, I agree with them. If you want to be productive, managing your energy is more important than managing your time. To see if it’s true, just look at your experiences. Have you ever been so productive that you can accomplish a lot in little time? On the other hand, have you ever felt like you can’t accomplish anything despite having a lot of time?

These experiences show that the quantity of time you have isn’t necessarily related to your productivity. What makes the difference is your energy level. In the first situation, your energy level is high and that’s why you can accomplish a lot in little time. In the second situation, your energy level is low and because of that you can’t accomplish much.

So how should we manage our energy? Here are four proven principles discussed in The Power of Full Engagement:

1. Maintain your four sources of energy

There are four sources of energy: physical, emotional, mental, and spiritual. You need to maintain all of them so that you can draw energy from them. Miss one of them and your performance will suffer.

Here are several things you can do to maintain your four sources of energy:

• Physical
  • Have breakfast.
  • Have between seven to eight hours of sleep every day.
  • Do regular workouts.
• Emotional
  • Spend time with your loved ones.
  • Allocate time for your hobbies.
• Mental
  • Have positive self-talk.
  • Learn new skills.
• Spiritual
  • Define and follow your purpose in life.
  • Pray or meditate.

2. Increase your energy capacity

Rather than just maintaining your energy sources, you need to build your energy capacity. This way you can improve your performance over time.

To build your capacity, you need to expose yourself to more stress while giving yourself adequate recovery. For example, you may learn new skills in unfamiliar fields to expand your mental capacity. Or you may increase your workout duration to expand your physical capacity. In short, you need to move beyond your comfort zone.

Just don’t forget to give yourself enough recovery periods. Otherwise you may experience burnout.

3. Build positive rituals

Negative habits deplete your energy. To overcome them, you must replace the negative habits with positive rituals. Rituals are precise actions you consistently do in specific times to achieve certain objectives. Waking up at 5am every day, for example, is a ritual. Drinking water instead of eating whenever you are tempted to overeat is also a ritual.

The key thing about rituals is you have to make them automatic. Why? Because by making a ritual automatic you don’t need to push yourself to do it. Instead, you will be pulled to do it. Doing the rituals will be as effortless as brushing your teeth.

Of course, you need to train yourself to make a ritual automatic. The acquisition period lasts between thirty to sixty days.

4. Be a sprinter, not a marathoner

Effective energy management requires you to balance stress and recovery. In your daily work, one good way to apply that is by working like a sprinter rather than a marathoner. It means that you should have an intense work session (called ultradian sprint) for about 90 to 120 minutes followed by a shorter rest period. The rest period recovers your energy and prepares you for the next intense session. This is a much better way to work than working continuously because it follows your body’s energy cycle.

Photo by jam343

But what resources should we use to learn history? Here are my favorite resources:

1. Stuff You Missed in History Class Podcast

If you aren’t interested in history, Stuff You Missed in History Class Podcast is a good starting point. It discusses the interesting aspects of many historical events. For example, one episode talks about whether or not Genghis Khan really killed 1,748,000 people in one hour and another episode talks about the cursed tomb of King Tut. The episodes are short (usually under 15 minutes) so they won’t take much time to listen to.

2. Wikipedia

If you want to get a good introduction to a historical topic, Wikipedia is perhaps the best place to go to. It has articles on practically every historical topic imaginable. You may start with History of the world which gives you an overview of the world history. Next, you may learn history based on time periods so that you can easily see the context of each event.

Alternatively, you may browse the history by century. The interesting thing here is it gives you significant events of not only the past, but also the future (in the form of predictions). For example, do you know that Google aims to achieve its objective to organize the world’s information by the year 2300?

3. Visual History of the World

If you are a visual person, National Geographic’s Visual History of the World (or the smaller Essential Visual History of the World) is a book that fits your need. As its title says, it gives you a visual tour through the history of the world. The book starts at around 4000 BC and continues to the present time.

4. Guns, Germs, and Steel

While the resources above are good, they only discuss the surface of history. They tell you about historical events without telling you about the patterns and causes behind them.

For that purpose, the best resource I’ve found is Guns, Germs, and Steel: The Fates of Human Societies by Jared Diamond. Rather than just talking about historical facts and events, the book shows you the causes that shape history. Specifically, it discusses why some civilizations are more advanced than others. Guns, Germs and Steel is my favorite history book.

***

Do you know other resources that you’d like to recommend? Feel free to share them in the comments.

Photo by Tony the Misfit

One thing I notice throughout the book is the level of warfare and violence at that time. There was almost no time of peace. The warlords always fought each other even for seemingly simple matters. And the level of violence was horrible. Those who faced death penalty suffered brutal deaths. The winning party could do whatever they wanted to the losing one.

This happened not only in China, but also in other civilizations. You just need to watch movies like Apocalypto to understand what I mean.

It makes me grateful that we live in the world we live today. Sometimes we take the quality of life we have for granted, but we now live in a world that is way more civilized and prosperous than it was.

I’m not saying that the world today is perfect; there is still a lot of room for improvements. But the scale and intensity of violence today are much lower than they were in the past. We now have things like the Geneva Convention that keep things under control most of the time. People in most parts of the world can live peacefully without worrying about warfare or torture.

This gives me a good reason to learn history: to realize how much better our life is today and be grateful for it. Sometimes you might want to complain about small things that go wrong in your life. But you should realize that your life today is way better than those of billions of people in the past. You have many more things to be grateful for than to complain about.

Photo by Dmitry Kichenko

It will be even better if you learn from people with different backgrounds. Different backgrounds give you different perspectives. They can give you lessons you’ve never thought about before.

In this article, I’d like to share with you some career advice from the perspective of a mathematician. The mathematician is Terence Tao who received the Fields Medal (the mathematics equivalent of the Nobel Prize) in 2006 when he was 31. He is also the youngest ever gold medalist of the International Mathematical Olympiad (IMO). IMO is a high-school-level competition but he won his gold medal when he was only 13.

While Tao’s blog discusses many mathematical topics, it also has a Career Advice section. The advice targets aspiring mathematician but it’s applicable to other fields as well. I especially love the fact that the advice comes from the perspective of a great mathematician - a perspective I’ve never considered before.

You can read the Career Advice section yourself to get everything Terence Tao says about career, but here I want to give you the interesting lessons I’ve found. Here they are:

1. Build solid foundation first

Anything glamorous is likely to be highly competitive, and only those with the most solid of backgrounds (in particular, lots of experience with less glamorous aspects of the field) are likely to get anywhere. (source)

Many people want to gain recognition quickly and that’s why they want to do the glamorous things. But there’s a reason why those things are glamorous: they aren’t easy to achieve. So the best way to build your reputation is not by going after them but by building a solid foundation first. You need to patiently do the less glamorous things until you gain the proficiency required for something higher.

2. Focus on contribution

One should never make prizes or recognition a primary reason for pursuing mathematics; it is a better strategy in the long-term to just produce good mathematics and contribute to your field, and the prizes and recognition will take care of themselves  (source)

This is an important principle to remember because it’s easy to get distracted with prizes and recognition. If your focus is prizes and recognition, it’s easy to be disappointed when things don’t go as expected. You put yourself in an emotional roller-coaster that drains your mental energy. On the other hand, by focusing on contribution you keep your mental energy while increasing your value at the same time.

3. “Boring” things are important

… enjoy these competitions, but don’t neglect the more “boring” aspects of your mathematical education, as those turn out to be ultimately more useful. (source)

Some people just want to do the things they like. When they need to do something “boring”, they try to avoid it or just do it half-heartedly. But the fact is, there is always “boring” stuff you need to do in order to succeed. You can’t do only the fun part. Joel Spolsky said it well:

Oh, so, you’re saying I should hire you because you don’t work very hard when the work is boring? Well, there’s boring stuff in programming, too. Every job has its boring moments. And I don’t want to hire people that only want to do the fun stuff.

4. Diversify your experience

Even the best mathematics departments do not have strengths in every field, so being at several mathematics departments will broaden your education and expose you to a variety of mathematical cultures. (source)

No matter how good your current experience is, you still need to get new experiences. You need to diversify your experience to broaden your perspective. That helps you see things from different points of view.

5. Easy success hurts

If one is accustomed to easy success, one may not develop the patience necessary to deal with truly difficult problems. (source)

Many people want to achieve easy success. But that can hurt your career in the long term because you don’t expand your capacity. When the problems get tough, you won’t have the persistence to go through it. So don’t look for the easy way. Let your hard-earned successes prepare you to be even more successful.

6. Breakthroughs come from hard work

One needs to do a serious amount of reading and writing, and not just thinking, in order to get anywhere serious in mathematics; contrary to public opinion, mathematical breakthroughs are not powered solely (or even primarily) by “Eureka” moments of genius, but are in fact largely a product of hard work, directed of course by experience and intuition. (source)

Again, don’t expect easy success. “Luck” comes from hard work. As Thomas Jefferson said:

I’m a great believer in luck, and I find the harder I work the more I have of it.

7. Follow the passion, not the people

Ultimately, it is better to follow the mathematics than to follow a mathematician. (source)

If you follow someone, you may get disappointed when he or she doesn’t meet your expectation. So a better idea is to follow the passion. Do something because it matters to you.

8. Ask “stupid” questions

So one should be unafraid to ask “stupid” questions, challenging conventional wisdom on a subject; the answers to these questions will occasionally lead to a surprising conclusion, but more often will simply tell you why the conventional wisdom is there in the first place, which is well worth knowing. (source)

The questions you ask guide your thinking process. Asking “stupid” questions gives you deeper understanding of a subject which allows you to see opportunities.

9. Focus on building, not defending

It is better to spend your energies on creating new mathematics than trying to fight over your old mathematics. (source)

Many people spend a lot of time and energy trying to prove themselves to others. That’s not a good way to spend your resources. A better thing to do is to keep contributing and providing value. Let the quality of your work speaks for itself.

10. Remember why

It is really easy to get bogged down in the details of some work and not recall the purpose of what one is actually doing; thus it is good to pause every now and then and recall why one is pursuing a particular goal. (source)

Don’t be too busy with the details that you forget the big picture. If you find yourself in such a situation, stop and look at what you do. What’s the purpose of it? Is it aligned with your value? Will it take you closer to your dreams?

***

The lessons above will help you have a successful and fulfilling career. Which ones do you think you need to apply right now?

Photo by Babenson

In personal finance, one way to apply it is by focusing on the big expenses (like the interest you pay for your mortgage) instead of the small ones (like the three-dollar latte). Many people do the opposite by focusing on the small expenses instead of the big ones. As a result, they lose money more than they save.

But why don’t people naturally focus on the big wins? Isn’t it clear that we should focus on things that make the most difference?

Unfortunately, that’s not case. One reason is that the big wins are often not obvious. You can’t see them right away. You can immediately see that you save three dollars by not buying latte, but the amount you save on mortgage interest can’t be seen immediately. You can only see it by looking at the big picture and thinking long term.

That’s why it’s important to see the big picture when it comes to finding big wins. See how things will be in ten or twenty years. Think long term. What seems like a good deal in the short term might actually be bad in the long term. On the other hand, things that don’t give you immediate return in the short term might give you great return in the long term.

One more important thing to keep in mind is that not only should you identify big wins to get them, but also you should identify big losses to avoid them. If you focus only on the wins then there is a danger that one big loss could wipe them out. You need to be aware of potential losses as well so that you can avoid them before they hit you.

I learned this from personal experience. A few years ago, I went overseas with my family. Since I’m a book lover, I was happy to find used book stores that sell good books at discounted prices. So I bought many books. Only at the airport was I aware that all those books made my bag overweight. I needed to pay a hefty overweight fee that wiped all the savings I made from the discounted books. I loss money, in fact.

So don’t forget to look at both sides of the coin.

Photo by BombDog

That’s why I was glad to receive a review copy of I Will Teach You To Be Rich by Ramit Sethi. The book aims to help you optimize your personal finance. Though the word “rich” in the title might mean different things for different people, here is what it means for the author:

What does rich mean to you? For me, it’s about freedom — it’s about not having to think about money all the time and being able to travel and work on the things that interest me.

I agree completely. Being rich is not about having a lot of money. It’s about having the freedom to enjoy life without financial worries.

Inside I Will Teach You To Be Rich

The book starts with an introduction followed by nine chapters.

Introduction

When it comes to personal finance, the worst thing you can do is not taking action. Don’t wait until you get the perfect solution before you act. Instead, use what the author calls The 85 Percent Solution: a solution that isn’t perfect but is good enough to get you started.

To help you keep the balance between enjoying your life and controlling your expenses, here is a principle you might find useful:

Spend extravagantly on the things you love, and cut costs mercilessly on the things you don’t.

1. Optimize Your Credit Card

In the long term, having good credit can help you save thousands of dollars on large purchases because it can get you lower interest rate. So it’s essential that you improve your credit. The most important  thing you should do to improve your credit is paying off your credit card bills each month.

2. Beat the Banks

The next thing you should do is setting up the right bank accounts. You need to have two different accounts: a checking account and a saving account. Having these two accounts makes managing your money easier.

When setting up your accounts, one important thing you should pay attention to is the fees. Fees are often more important than interest rates because they could easily wipe out the interest you earn. Get yourself accounts that have the lowest fees possible.

For saving accounts, find one with high interest rate. An online saving account usually meets this requirement.

3. Get Ready to Invest

Investing is essential to get rich. In fact, the author said that investing is the single most effective way to get rich. Through proper investing you can achieve your financial goals and have enough money for retirement.

This chapter outlines five steps you should take to invest. The first step is contributing to your 401(k) to get your employer’s match. Then you can do the next steps to bring your investing to the next level.

4. Conscious Spending

Conscious spending means you make the decision of where you are going to spend your money. A Conscious Spending Plan has four major categories where your money can go to:

• Fixed costs
• Investments
• Savings
• Guilt-free spending money

One way to implement your plan is by using an envelope system in which you allocate money for each category. Once you spend the money in a category you can’t spend more, but you can transfer money from one category to another.

5. Save While Sleeping

You should automate your finances as much as possible so that you can spend your time on other things. For that, the first thing you should do is linking your accounts together. Then you should set up automatic payments and automatic transfers between those accounts.

6. The Myth of Financial Expertise

Financial expertise is a myth because the so-called financial “experts” don’t know what will happen in the future. You can often earn more by investing yourself because that way you minimize the fees.

7. Investing Isn’t Only for Rich People

Above anything else, the volatility of your portfolio depends on your asset allocation. So make sure that you have the proper allocation between different asset classes. You can do this by picking a portfolio of low-cost funds but you should remember that you should rebalance it regularly. If you don’t want to rebalance then pick a lifecycle fund where it is done automatically for you.

8. Easy Maintenance

This chapter gives you tips to on how to properly maintain your investments. It discusses how to rebalance your portfolio and when to sell your investments, among others.

9. A Rich Life

Here you can find many specific topics in personal finance such as student loans, wedding, salary negotiation, buying car, and buying house. It also gives you a summary of what it takes to get rich:

Getting rich isn’t about one silver bullet or secret strategy. It happens through regular, boring, disciplined action.

Conclusion

I Will Teach You To Be Rich is full of practical advice to improve your personal finance. Rather than giving you abstract ideas of what you need to do, it tells you exactly what you need to do and why. The book especially targets people in their 20s and 30s but its advice is applicable to other age brackets as well.

One differentiating characteristic of the book is its focus on the “big wins”. Instead of focusing on cutting small expenses, it focuses on cutting big expenses  like the interest you pay for major loans. The author argues that many people save three dollars on latte but forget to improve their credit and that costs them thousands of dollars.

In my case, since I don’t live in the U.S. I need to adapt some of the advice given. But I get a lot of ideas to implement.

Let’s start from the beginning by answering a basic question: what is money? Steve Pavlina in his book Personal Development for Smart People has a good answer:

The money you earn is society’s way of saying: “In exchange for your valued contribution, you are hereby granted the right to extract equivalent value from society at a time of your choosing.”

So the amount of money you earn is proportional to the amount of value you contribute to the society. What you need to do to make more money is simple: contribute more value to the society.

There’s a catch though: the one who determines the value of your contribution is the society, not you. In Pavlina’s words:

Your income depends on the social value of your work, not the personal value. Personal value is whatever you say it is. Social value, however, is determined by social consensus.

So here is a key principle:

To make more money, contribute more social value.

Here are several things you can do to contribute more social value and thereby make more money:

1. Identify your personal strengths

First of all, you should identify your personal strengths. What are you naturally good at? Working on your strengths will give you much more in return than working on your weaknesses. So it’s essential that you identify your strengths.

Action list

• Take the test in Now, Discover Your Strengths or StrengthsFinder 2.0.
• Create a life map and see the patterns of your strengths.

Further reading

• 12 Essential Lessons to Maximize Your Personal Strengths

2. Do your deliberate practice

By identifying your personal strengths, you should find where you can be very good at. For example, you may find that you can be very good at playing piano or programming. What you need to do is improving your skills there until you reach world-class level. That way you can provide tremendous value to others.

To improve your skills, you need to do deliberate practice. Here is a good explanation of deliberate practice:

Deliberate practice refers to a form of training that consists of focused, grueling, repetitive practice in which the subject continuously monitors his or her performance, and subsequently corrects, experiments, and reacts to immediate and constant feedback, with the aim of steady and consistent improvement.

It is generally accepted that this form of training calls for approximately 10,000 hours of concentrated effort if one is to achieve the optimum level of expertise.

Action list

• Decide the field where you want to do your deliberate practice.
• Allocate at least two hours a day for your deliberate practice. The more the better.
• Aim for consistent improvement.

Further reading

• The Role of Deliberate Practice in the Acquisition of Expert Performance
• Finding Niche: Where to Invest Your 10,000 Hours of Practice

3. Diversify your skill set

Aside from the skills you choose for your deliberate practice, you need to have other skills in your skill set. These skills complement your main skills and help you provide something unique (see point 5 below). You don’t have to be very good at them, but you should be good enough.

Action list

• Choose a skill to add to your skill set. This list of competencies may give you some ideas.
• Spend time to learn the skill. A good way to do that is by creating a project where you can apply the skill.

4. Expand your network

Your network is essential in helping you make more money. There are two reasons for that:

1. Your network helps you find demand
   It can connect you with those who need your solutions. It helps you find opportunities.
2. Your network helps you find supply
   When someone needs something that you can’t provide, turn to your network to find those who can. Or find someone whose skills complement yours.

Of course, to expand your network you must be willing to help the people there.

Action list

• Help someone in your network today.
• Meet new people and follow up.
• Join Twitter. It helps you connect with others (by the way, here is my account).

Further reading

• 106 Tips to Become a Master Connector

5. Find your unique value proposition

What value can you contribute to the world that others can’t? Answering this question isn’t easy but it will help you differentiate yourself. So take the time to find your unique value proposition.

Action list

• Read and apply the tips in Career Tips: How to Find Your (Potential) Unique Value Proposition.

6. Build your personal brand

After finding your unique value proposition, you need to get the message out to your target audience. If people don’t know you then they won’t come.

For that reason, you need to build your personal brand. By building your personal brand, people know what they can expect from you so they will come to you when they need it.

Action list

• Create your one-liner.
• Create a profile on LinkedIn.
• Buy a domain and create a web site.

Further reading

• The 10 Immutable Laws of Personal Branding
• 12 Things You Can Do Today to Strengthen Your Personal Brand

7. Open your eyes for opportunities

Opportunities often come in unexpected ways. You need to open your eyes and see what is around you. That’s how you improve your luck:

Unlucky people miss chance opportunities because they’re too busy looking for something else. Lucky people see what is there rather than just what they’re looking for.

Since they are observant, lucky people often see things that other people don’t.

Action list

• Watch trends. Here are three sites that help you do that:
  • Delicious Popular
  • Google Trends
  • TweetMeme
• Observe how people do things and what problems they have.
• Keep an idea journal.

Further reading

• How to Get Lucky
• A Simple Guide to Finding Opportunities

8. Provide customer-oriented solutions

When you see a need, look at what you have (your skills and network) and find a way to provide a solution. The broader your skill set and network are, the more likely you will find something.

Your solution should be customer-oriented and satisfy the customer. If the customer is satisfied, she may spread the word about you.

Action list

• Combine your skills and tap into your network to provide a solution.
• Aim for customer satisfaction.

9. Build upon what you build

I read about it in the blogging context, but it applies to making money as well. One of the best ways to provide more value is by building on the value you already provide. This is smarter than starting from scratch because you can leverage what you have.

Action list

• Look at what you have and ask yourself:
  • How can I use it to build something new?
  • What extensions can I add?
  • What related markets can I reach?
  • What untapped opportunities are there?

***

Applying these tips will take time, but it will help you make more money in the long term. Like Moliere said:

The trees that are slow to grow bear the best fruit.

Photo by Jeff Belmonte