≡ Menu

Wealth Strategy: Offer More Value!

After going through some personal finance books that I’ve read before, I was drawn to a chapter from “Killing Sacred Cows” (excellent book by the way) on offering value that I resonated with.  The basic premise is that the more value you offer to others (society/company/people), the more money you can potentially make.  Money is simply the result of value offered.

Employees

The employees within a company that are paid the highest are most likely the ones that offer the most value to the company.  Employees that go above and beyond what is expected often are the ones that get noticed and get the promotions.

So instead of the mindset of what the company can give you, change it around, what can you offer the company?  What can you give over and above what is expected of you?  Can you upgrade your skills so that you are more valuable to the company?  What courses can you take?  What can you learn?

What you’ll find is that as you offer more “value” to the company, the more valuable you become.  As a result, you’ll be the one most likely to get that promotion and/or receive higher compensation.

Entrepreneurs

I’m of the belief that entrepreneurs have the highest potential for income.  Why?  Simply because employees are typically paid for their time and there are only so many hours in the day.  Entrepreneurs, on the other hand, are paid for the amount of value they add to society, which is potentially unlimited.

Just take a look at the successful businesses in your town.  Why are they successful?  If they offer similar products as other stores, what makes them stand out?  What value do they add that others don’t?

If you’re thinking about how you can add the most value to society as an entrepreneur, in my opinion, it all comes down to what you are passionate about.  If you enjoy doing something, then it’s more than likely that you’ll enjoy learning more about the subject and work harder on how to improve in the area.  If you can convert that interest into a service or product that will add value to society, the sky’s the limit.

This whole article boils down to one simple concept, offer more than you expect to receive.  Not only does this result in “feeling” better, you’ll find that you’ll receive more as a result.

-> If you would like to read more articles like this, you can sign up for my free newsletter service below (we will not spam you).

FT About the author: FT is the founder and editor of Million Dollar Journey (est. 2006). Through various financial strategies outlined on this site, he grew his net worth from $200,000 in 2006 to $1,000,000 by 2014. You can read more about him here.

{ 18 comments… add one }
  • Scott June 4, 2009, 10:34 am

    I’ve always believed the same — more value = more return.

    There are some weird exceptions to the rule, such as athletes, but that’s a different article.

    I seem to be living the other exceptions to the rule: government and union. I have two jobs (hence my lack of posting), one is government, the other unionized. Going “above and beyond” my job description in either situation will NEVER get me a pay increase or promotion. My wage is dependent on either a years-served “grid”, or a union contract.

    I can also honestly say that I have never encountered such slovenly abhorrent work ethic before in my life. Both government and union (in my specific experiences) produce lazy, corrupt, inefficient, ineffective, etc., employees. One major reason for this is that they do not control how much they can earn. Thus, the employee produces JUST enough value to “earn” that posted amount and will NEVER “offer more than they expect to receive”. In fact, they will usually offer less value. That, too, is a whole other article!

    Thankfully, because of the disgusting workmanship which abounds in my work-places (hey, it’s YOUR tax money that’s paying for that “valuable” $43K/yr gov’t secretary to “Facebook” for 7 hours a day!), it has driven me to think entrepreneurial.

    Also thankfully, both my jobs are stable (ie. extremely difficult to get fired), which is allowing me to work on my business plan etc. without having to worry about the all economic turmoil happening. I’m not sure how much value my planned business will add to society, but there’s only one way to find out!

  • DAvid June 4, 2009, 12:34 pm

    Sorry, Scott, but I have to disagree. In both Government and union situations, putting more effort brings rewards, and though it may not appear as wage increases, due to the contract, it does affect promotions, and other opportunities. If you want to muddle along in your government union job, you may well be able to do that, however it is more likely that those who achieve and meet their goals are more likely to be rewarded.

    I can think of LOTS of private sector jobs with no rewards either. You may be able to work excess hours for more pay (lots of the time at regular wages), however, there are often few rewards, especially for the low rung worker. Yes you can find other employment to better your situation, but that is not an improvement within, nor is it a reward for effort.

    Your final paragraph indicates that you are no different than the employees you ridicule. While the secretary may be using Facebook, between the tasks she is assigned, presumably for no future reward, you are claiming to be using similar time to work on a project for your own benefit. This seems little different than using your employer’s time and facilities (phone, fax, photocopier, etc) to operate your own business, and in my opinion, shows less respect for your employer that those other employees activities.

    DAvid

  • FT FrugalTrader June 4, 2009, 12:55 pm

    Scott, interesting thought about athletes. They are paid based on their entertainment value. So guys like Lebron James, who people tune in to see, is going to make more than guys who you’ve never heard of.

  • Tucker Wright June 4, 2009, 2:03 pm

    Great post, really enjoyed it. Athletes income is going to widen more and more with the top tier guys manking all the money and the rest of the league making league minimum ( still pretty good) NFL practice squad players can mkae up to $USD 600,000

  • Adam June 4, 2009, 3:54 pm

    I enjoy your blog immensely, but I must disagree with your statement regarding employees being paid accordingly for the value they offer. I work in the private sector and I can assure you, in all the jobs I have had – all private sector, it’s generally the lesser paid employees whom offer the most value. A great majority of companies hire based on a education\experience and will only offer you compensation comparable with the market value of your education/experience. Once your red circled, not much else you can do other than look elsewhere – or go back to school.

    Lot’s of seat warmers holding down senior level positions and working their staff like dogs for a fraction of the compensation. I don’t think the lot of executives at ING offered much, if any value, but they sure were paid as if they were ;)

    You want to be paid more? Get a solid education with some fancy letters after your name. THAT is how you get paid ;) Otherwise, you will have to work hard and offer extreme value for the rest of your life for little compensation.

  • FT FrugalTrader June 4, 2009, 4:03 pm

    Adam, thanks for the feedback. Everyone needs to start somewhere. Gaining experience (even at the lowest level) is adding value to the company. As well, your point about getting a better education, that was one of my points on adding value as an employee.

    What can you give over and above what is expected of you? Can you upgrade your skills so that you are more valuable to the company? What courses can you take? What can you learn?

  • Ms Save Money June 4, 2009, 4:40 pm

    I agree Adam, not everyone who gives value to a company gets paid the amount they deserve (ie. international students w/ MBAs) I have a few friends who work very hard and don’t get paid what they deserve because their companies exploit them.

  • nan June 4, 2009, 6:07 pm

    I have worked both union, and non union. Working harder in a union gets you no where. Show up, and do only what you have to do to not get fired. Actually it was the same situation when i worked for a private company. They didn’t care about me (we will put an add in the paper and have hundreds of people wanting your job), nor did i really care about the company.
    Private company = work hard and you will be compensated how they see fit. Work less hard and you will be compensated as they see fit.
    Union = you are compensated as per agreement.
    Even your fellow “brothers” will jump on your back. If you are lazy they will complain. If you worker hard/faster, and want to clock out a bit earlier/take a longer break they will complain you are doggin it.

    Bottom line = dont be lazy, or a go getter either. Just be average, or Canadian.
    Being Canadian = being average.

  • DBennett June 4, 2009, 7:28 pm

    How about becoming a lawyer, making a boat load of cash and retiring young?

    What do think of this strategy? By having law expertise you almost automatically add value and make more money (In theory).

  • Scott June 4, 2009, 9:50 pm

    DAvid — Whilst I am at work, I work. I do not bring my “life” with me to work and I try damn hard not to bring work home. I work on my other projects outside of my 9-5’er. That’s my burden for having work ethic…what ever that amounts to these days.

    I don’t “ridicule” my fellow workers. I state FACTS. I can give many, many, multiple examples of under-worked/over-paid government and union employees I encounter each and every work day — the $43K/year, 35-hour work-week Facebooking secretary is but one.

    These people are already being rewarded with a higher than average rate of pay and benefits for doing a less than average rate of work. This is the reason many don’t strive to do more in their position. And in many instances, there is no room for advancement (ie. true dead-end job).

    I always used to joke around about that old saying, “It’s not in my job description to do that” — that is until I actually heard someone say it, and actually mean it. I was very taken aback. Stunned actually. This is the mentality of gov’t and union emblobyees (you read that correctly).

    I agree with FT in saying the entrepreneur has almost unlimited earning potential. It’s the ‘preneur mentality that sets him/her apart from the comfy drones. They think of what can be done, they engage work, instead of thinking about how to get more for less and dodging work.

    Athletes/Entertainers: this is a weird one. They are basically billboards for corporate sponsors. Many people will pay to watch a $100 million Lebron, in hopes he will perform some amazing athletic feat, but in the end, he is still an employee of the team and it’s sponsors. The better the athlete, the more spectators, the more exposure, the more revenue for Nike et al.

    C’est la vie.

  • guinness416 June 4, 2009, 10:34 pm

    As an employee of course you have to perform well, but after that your salary is pretty much a function of your negotiating skills. You can work your ass off but at review time the boss will be delighted to give you fancy titles over more money if they can get away with it and you don’t fight for more. And we all know someone who was hired in and instantly earned more than their peers who’ve stuck around for years and years. I’ve never considered myself underpaid, and I’m not shy, but I’ve also never had an inhouse raise that was anything close to the raises I got by moving employers.

  • DAvid June 5, 2009, 10:17 am

    Scott,
    My apologies if I misinterpreted your final paragraph in Comment #1.

    DAvid

  • cannon_fodder June 5, 2009, 11:01 am

    Although I’ve never worked for the government or a union, both of my parents have and I understand where Scott is coming from.

    My dad was part of the CAW and he hated the fact that the union would fight to keep or reinstate an employee who was drunk on the job. He said it was crazy – the man was a danger to himself and others – perhaps even the prospective owner of the car he helped build.

    While my dad took pride in his work ethic he knew many cases of people doing the minimum. I remembered touring an automotive plant once (as part of a job I was doing to research RF coverage) and not only did we find little cubby holes in the parts warehouse complete with blankets and pillows, we actually discovered a guy sleeping on the roof. The manager remarked that it would probably take a few weeks to get the wiring strung in the rafters. I was surprised at the delay and he mentioned that during the hockey playoffs someone accidentally cut the TV cable and they lost the feed to the TV’s in the cafeteria. It was fixed within an hour!

    My mom worked for the CRA and she, too, was dismayed by the efforts that people put forth.

    But, as Scott mentioned, if you always feel unappreciated, either by your bosses or your employer or your customers, how many of us could say we could put our best effort forward? Especially if it was like this day after day, for years?

    I know I couldn’t.

  • cannon_fodder June 5, 2009, 11:17 am

    I sense that many people equate hard work with creating value. I don’t think they are the same at all.

    I’ve seen many people work hard and long hours – but in some cases that is because they aren’t as smart as others who can find better ways to accomplish the same task. It could be as simple as unfamiliarity with software programs if you are working with computers a lot, it could be lack of profficiency with carpentry tools if you are in construction…

    I’ve worked in sales a long time. Sometimes when we need a proposal to get done we enlist the help of several people not all of whom are in sales. They may be asked to compile the information, proofread, format and print it out. They often work very long hours to meet the deadlines. Yet, in most cases, this people don’t think strategically – they are all about performing tasks.

    The person who crystallizes the concept and the message and is able to articulate it so it resonates with the customer – that person may not put nearly the same amount of hours in but the value is much higher.

    There are so many instances in the private sector where managers have ascended to their station based on past performances. They no longer offer the value that they once did – part of getting older where we don’t have quite the energy or the drive to shake things up. What can happen is that it stifles the progress of the company because new people, with fresh ideas or refusal to conform are not heard.

    How many of you who have worked for a company for > 5 years shake your head at a new hire when they ask, “Why can’t we do that?” or “Why do we do it that way?”. Yet, it was probably the same thing you said soon after you joined the company!

  • Scott June 5, 2009, 11:32 am

    fodder: exactly. that’s one phenomenon which happens — a brand new employee enters a gov’t/union environment and either leaves because they HAVE to do more (physically and mentally), or they give in to the ‘Peter Principle’ and essentially dumb themselves down until retirement. Why give 110% when the guy in the next cubicle is giving 60% for the same wage?

    Productivity is almost always stunted when the employee does not and/or cannot control their earning potential in their given position.

    However, I can think of two private sector firms I worked for in the past where I was absolutely invited to earn more if I showed I could bring more to the table, and I did. But as a private sector employee, your salary is always determined by someone other than yourself (ie. your boss, the owner, etc.).

    Be an entrepreneur and your potential is unlimited because it’s a direct connection between you and your customers — you start at the top. You will, however, assume ALL the risks (unlike an employee).

    Someone mentioned becoming a lawyer (don’t get me started!). I would think a high degree of “speciality”, in whatever field, would be an equivalent form of offering more value for more return.

    I didn’t mean to turn this into a gov’t/union slamming thread. I just know what I encounter every day of the week. I’m sure there are some diligent G/U workers out there (FT’s wife), bravo to them.

  • DAvid June 5, 2009, 12:47 pm

    Scott said: “I didn’t mean to turn this into a gov’t/union slamming thread.”

    Then don’t. It has been stated a by a number of commentators here that the private sector can be equally problematic, and by your own admission, there are diligent gov’t/union workers.

    Working for someone else can be stifling, however, I expect far fewer than 1% of the general population has the intellectual wherewithal and skills to be a successful entrepreneur. If it were otherwise, there would be far more entrepreneurs, and far fewer employees. This also explains some of the reason why an entrepreneur’s potential is ‘unlimited’ — there are few entrepreneurs, and even fewer successful ones. For every highly successful entrepreneur there are scores of unsuccessful to middling ones.

    We can also see how some entrepreneurs create their financial success in news stories such as the eHealth scandal currently in the news in Ontario. Is it somehow acceptable for these folks to make excessive billings, while it is unacceptable for an employee to give something less than 110%?

    We are learning more about successful work patterns, and as cannon_fodder states, value is not necessarily closely correlated with either effort or time spent — recent studies are suggesting two 2 hour sessions daily of effort are likely more effective than a 7 to 8 hour day. If this is indeed accurate, then by most measures, the most successful individuals, are only meeting about 50%, as the rest is ‘downtime’ to allow the effective efforts to occur.

    Finally, many entrepreneurs spend far more unaccounted time working on their business than they suspect (due to their interest in it’s success), which may increase income, but also increases costs. Many large companies have played this game by contracting services to former employees. The company no longer has any HR expense, and the former employee now has to do all the employment accounting formerly managed by the company. While it looks great on paper — the contract appears to provide a higher wage rate to the employee, the final costs mean the entrepreneur is actually earning less, once the business overhead is included.

    cannon_fodder said: “How many of you who have worked for a company for > 5 years shake your head at a new hire when they ask, “Why can’t we do that?” or “Why do we do it that way?”. Yet, it was probably the same thing you said soon after you joined the company!

    And what have you learned in the intervening years? That the new hire has not gathered all the information necessary to formulate a decision, and once they gain the knowledge and experience, they will be better able to offer realistic options. The challenge as a manager is to be able to harness that enthusiasm, and channel it in a meaningful way, without alienating the new employee, and losing their talent and energy.

    I wonder where the inventor of the McPizza is right now? That was an expensive idea that anyone with a real understanding of the food industry could have said: “Here’s WHY we can’t (shouldn’t) do that.” The rest is history.

    DAvid

  • YoungEngineer June 5, 2009, 5:58 pm

    Hey, I don’t know if you’ve read any of his essays, but Paul Graham has an essay on the creation of value or his term ‘wealth’. I think many of your readers would enjoy the read. He has many other great essays on his site, but this is the one that I took the most out of.

    http://www.paulgraham.com/wealth.html

  • Finance Guy June 9, 2009, 3:01 pm

    I’m blessed, even in this deep recession, to be working at a company where everyone has the same values and works equally hard towards the same goals. That being said, our management team does a great job of adding incentives and helping us to see how our departments ultimately affect the bottom line for the whole company.

    I agree with your post that employees who work out of loyalty and try to give more will ultimately lead to success for the individual and company.

Leave a Comment