The end of the year often signifies the holiday season and the season of giving. This causes both great joy and great stress as the obligatory gifts of Christmas, Hanukkah, and all the hoopla around Thanksgiving (Black Friday, Small Business Saturday, Cyber Monday, and Giving Tuesday) kicks off. This is often the time people start stretching their finances and worrying about their creditworthy-ness. We will discuss more on credit in December. But for this issue, we’d like to focus on income.
Income is a major component of your finances. We have been led to believe that getting a good job will allow you to fulfill the American dream and you will be able to have all the trappings of consumerism. With that one income you can have all your heart’s desire! Well, you don’t need me to tell you how erroneous that falsehood has been. Relying on one source of income is a detriment to your financial health and your overall financial success. One does not need to look very far to see examples of this. The newly elected New York City congresswomen, Alexandria Ocasio-Cortez openly discusses this. According to a tweet of hers, “40% of ALL Americans currently struggle to pay for one basic need like food or rent. Most Americans are barely scaping by.”
CNBC backs this up by saying “40% of American middle class face poverty by age 65.” In that same article, the author notes, “That risk has been driven by depressed earnings, depressed asset values and increased health-care costs — causing 74 percent of Americans planning to work past traditional retirement age. Additionally, both private and public pension plans have been allowed to become seriously underfunded.” Of course the disparity between people who live in rural America as opposed to cities is stark as is the gaps between black men and women to their white counterparts.
If these statistics sound troubling, they should. In a country that is currently in an economic boom, we should not being such stark contrasts between the have’s and the have nots, as well as a continuous shrinking middle class. If these statistics scare you because they sound familiar –
o you are living to paycheck to paycheck
o you are concerned about debt especially student loan debt
o you worry about how you are going to eat and feed your family
o you have little to no savings then the tips below are for you
The problem with a job, whether salaried or hourly as that you are allowing other (the company) to dictate what you are worth –
• what your time is worth
• what your skillsets are worth
• what you bring to the table is worth
So how do you start to know your worth and take control back:
1. Pay yourself first
If you know you are valuable and you value the time and effort you have put in to get your check from your job, pay yourself first. This can be putting a certain amount or percentage into a bank account. We recommend credit unions as you are not only a client of the bank but also a stakeholder. If you have enough money in this account, then start investing $500/$1000 in an investment fund that works best for your needs. This can be a real estate investment fund or a small business investment fund, life insurance/annuities, stocks, bonds, or commodities. TEC has a great investment product that allows those new to investing who want control and an education to become smart and safe strategic investors.
2. Transferable skills
There’s a reason why you were able to sell yourself and land this job (and previous ones) in the first place. Do an honest assessment. What skills do you bring to the table? Do you pay attention to detail? Are you organized? Are you a good communicator? Do people like you on your job? Do you organize office parties? Are you good at reading the room? Do you meet deadlines consistently? Are you reliable? Once you realize all the ways you bring value to your current employer, there a couple things you can do to leverage this assessment
A. You can negotiate for a higher salary and title promotion
B. You can put out feelers for other potential offers to see if other companies are willing to pay you more of what you are worth
C. You can use those skills to start consulting and create a side hustle for yourself. If you pay attention to detail and are organized, you can start seeing if there are there small businesses/start ups that need someone to act as a personal assistant. You can build up a clientele while still working your current job. And if your clientele becomes strong enough, you can be a full time entrepreneur, setting your own time and dictating your own worth.
3. Get into the gig economy
The gig economy is another way to supplement your current income. What’s great about the current gig economy is oftentimes, the only investment is your time and you generally get to dictate how much you work and make each day. You can, of course create your own side hustle/gig (see above), but if that seems too daunting there are gigs already out there:
A. Become a realtor and/or mortgage broker
B. Become a life insurance agent or financial advisor
C. Become a driver through shared ride platforms such as Lyft or Uber
D. Turn your house or apt into an income producer through rentals or Air BnB
E. Work with TEC as an agent
4. Find a side hustle (or two or three)
What’s great about getting a side hustle or two or three is the only limit on your income earning potential is you. You can do these while you are still currently employed. You can fall back on them if something happens to your employment. If you are strategic about it, your side hustle money will eventually outweigh the money you are currently getting from your job. You don’t have to ask anyone for a raise. You create the opportunity to make the amount of money you want to make each day, week, month, or year.
Kwamara Thompson is the founder and principal of TEC (Thompson Education Consulting), a consulting business that focuses on Financial Education, Business Education, and K-12 Education. To contact Kwamara or TEC, please click here