Almost any piece of financial advice out there is based on the premise of living below your means. We are encouraged not to settle in every other area of our lives except when it comes to money. It seems more noble to settle for less than it is to know your value and seek out the earning potential that you deserve.
Not at The Money Fam.
We had an insightful conversation with Bola Onada Sokunbi who is a Certified Financial Education Instructor (CFEI) and money coach. These are some of the insights from the conversation with her.
First and foremost: define your value
How would you state your amount if you haven’t determined your value right?
According to Bola, “your value isn’t something that you can place a dollar amount on. When you do your job or run your business, it should never just be about the money. It should be more about what problem you can solve. Who are you going to be helping? And are you passionate about it? The value lies in whether this is something that you really want to do, and do you see yourself making an impact. Once that happens the money will come.”
However, happiness first does not mean settling when it comes to money. You can define what you need to earn in a dollar amount by looking at your competencies, your skills, and according to industry averages for your profession.
Once your value has been defined, negotiate
Bola further adds that for every offer that’s put down, HR’s job is to offer you the lowest possible. “You have a come back and you have a push back. [Other than your salary] so many people leave other things on the table like negotiating your vacation dates. Your benefits, your bonus. Those are the kinds of things that add into your full package.”
“When HR came back to me with an offer I would tell them “I want to negotiate this”. And the worst thing that can happen is that they say “no”. “
Get it right from the start
We’re often too excited when we get a job that we don’t negotiate the paycheck from the start. However Bola believes that we should get it right from the beginning.
“When you go for the interview, you’re interviewing with someone who’s trying to employ you. Starting from the interview they’ll ask you what your previous salary was or what you think you should earn. One of the things I did when applying for the job was to leave that space blank. I didn’t want to let them have an assumption about what my worth was. If I put $50,000.00 and they were willing to pay $60,000.00 then I’ve just lost $10,000.00. So I would just leave that space blank. And during the interview when HR came back to me with an offer I would tell them “I want to negotiate this”. And the worst thing that can happen is that they say “no”. It’s very rare, unless you do something horrible for somebody to rescind an offer because you choose to negotiate it. Be nice and polite and diplomatic. But do negotiate.”
“If they don’t budge on the salary then you can negotiate your bonus. Or your raise for the next year assuming you meet all the requirements to be successful at your job. You cannot be afraid to have the conversation. Too many people do not negotiate.”
Fixing it when you’re in the job
However, if you’re on the job already, it’s not to late to have the money conversation. Bola advises that if you’re currently in the job, before you step into your bosses office for the annual review to ask for the raise, make sure that you have the backup. “The backup means you want to tell them: “This is what I’ve accomplished for you in the last several months or years. This is why I want a raise. This is my value as an employee”. Don’t just go in there when you haven’t met any deadlines or added any significant value and say “hey, I want a raise”. You’re not going to get one. Also look at industry averages. Again, you cannot be afraid. You’re not going to get fired because you asked for a raise.”
Furthermore, never undervalue yourself. State your competencies. State your value then challenge yourself to over deliver and knock the ball out of the park.
Creating multiple streams of income
Once you’ve negotiated as far as you can and are willing to explore other methods of generating income. Bola says the first thing you need to do is research. “You cannot go by what your friends or family are doing or by hearsay.
Generating other income streams comes in 3 main forms:
Owning a small business
Investing in stocks
In fact, 90% of millionaires are business owners. Keep that in mind.
If you don’t understand something, do not put your money in it. You’ve worked too hard to gamble with your money.
Know that this means you’re going to have to dedicate time if you want to be successful in it. Your nights and your weekends. Having a full time job with a great stream of passive income doesn’t come without the sacrifice.”
“Sometimes you may have to take up a side-hustle you don’t like. Make sure you have a strong “why”. Your “why” will ensure that you do your job the best way possible. That you treat your customers with respect and have polite conversations. You’re not just angry and annoyed.”
Furthermore, network. This helps build relationships and opens doors and pathways that you would have never imagined just sitting behind your computer. At work, in your business; go out and network.”
My company won’t pay me, so I’ll be my own boss and pay myself
The idea of entrepreneurship as a means of making as much as you’d like is extremely appealing. However Bola warns that business is hard.
“Anyone who has the assumption that being an entrepreneur and starting their own business is simple is fooling themselves. When you have a job if you feel sick one day, you’re still going to get that paycheck. When you are in business the amount of work you put in is the amount of money you’re going to get out of it. Especially in the early stages. And it growing a business takes time. A lot of companies don’t start to become profitable until after 3-5 years. Some 6-7 years. You have to be in it for the long haul. Before you even invest a dollar into your business, you want to have a plan that considers all of this.”
Now that you know that you deserve to be a millionaire what are you going to do to get there?
If you believe you ought to be a millionaire by now, this is Bola’s take on your belief.
“Say you want to make a million dollars in a year. Have you actually sat down to plan the breakdown of what it’s going to take for you earn that million dollars every year? Look at it objectively. How much money do you need to earn every month for 12 months? How much money do you need to earn every week? Then how much money you need to earn every day to make a million every year? And then take that day and ask yourself what do you need to be doing to be able to earn that much in a day, every single day. What exactly do I need to sell to make that much? How many units? How many services? And does that amount include taxes and expenses or is it just revenue? If it doesn’t include those then you need to up that amount to make a pure profit of $1 million at the end of the year. That’s the beginning of answering the question at hand.”
“We all want to make lucrative amounts that we believe we should earn. But have we actually sat down and mapped out what it would take to get there? Most people haven’t done that. They say it but they have no plan for it. If you don’t have a plan then you don’t know how to get there.”