Why your time money multiplier is the key to attracting more income

Swapping your time for money might be unpleasant, but it is a vital component of nearly every wealth-creation plan, at least at the beginning. You can try working harder and putting in more hours, but that could impact your health and wellbeing. The other option is to work smarter and increase your ‘time money multiplier’ (TMM) so you get paid multiple times, rather than once, per hour worked, writes Steve McKnight, bestselling author of Money Magnet.

Working harder

A proven way to attract money is to sell your time. Not only will your wages pay the bills, they’ll supply the capital to invest and support your ability to borrow and use the power of leverage.

Irrespective of whether you get paid by the hour, by the month or by the task, your pay is a function of this formula: Pay = Time × Rate.

The formula provides the answer to how to earn more: you can either work harder (work more hours) or smarter (earn a higher rate).

Pay increase

So how can you get paid more? The quickest and easiest way is to get a pay increase. How do you do that? Simple, ask for one! Or, even better, ask your boss, “Boss, what can I do to add more value to your business so I can increase my pay?”

Skill up

Another way to increase your pay rate is to acquire new skills. This can take time though, so it is more of a long game than a quick fix. Still, if you have time up your sleeve, and you are keen to learn, then pick a skill that is in high-demand but short-supply and that someone is willing to pay you more for possessing.

The rule of 168

Alternatively, you can work more hours. This is problematic though, because we all have a fixed and unchangeable time allotment of 168 hours per week. You can’t have more, or less. All you can do is prioritise your allotted 168 hours.

If you want to calculate how many extra hours you might have to earn some extra dollars, then start with 168 and deduct hours for sleep (approx. 56), work (say 38), leisure (let’s go with 35), cleaning, care and grooming (cross off 21) and eating (let’s agree on 7). You’ll likely discover you have 6 hours left – that’s less than one hour of free time each day.

You could think about re-jigging your 168 hours and doing less of something to free up time for something new. But that’s easier said than done. Your options are less time eating, less leisure time or less sleep; all of which are not viable long term solutions.

In conclusion, monetising your free time is unlikely to make you much wealthier.

Listen to Steve McKnight on the Flying Solo podcast:

Working smarter

Instead of trying to get paid more dollars per hour worked, savvy folks seek to increase their time multiple of money (TMM), which is the number of times they’re paid per hour worked. Most folks earn money on a TMM of one: one hour of work in exchange for one payment.

To have a TMM greater than one, you need to be paid more than once per hour worked. For example, mortgage brokers, who write and place loans, receive two streams of income: an upfront commission when the loan is written, and a smaller commission that is paid monthly or quarterly as long as the loan isn’t repaid. As the time taken to source the loan, write it up and get it approved will result in more than one payment, the TMM is greater than one.

Income accelerators

You can also explore income earning opportunities outside your normal day job. In fact, more and more people use ‘Income accelerators’ – side-hustles you do in your spare time – to earn extra money.

Your side hustle could just be extra cash from using your free time cashing in on a hobby, delivering flyers or pursuing a network marketing idea that works for you. However, as mentioned earlier, the money will be handy, but it’s unlikely to be game-changing.

The secret to attracting more money is to get paid more dollars, and more frequently, per hour worked. Beware the trap of working more hours though, as it isn’t sustainable and can result in burnout and cause you to go backwards financially.

This is an edited extract from Steve McKnight’s Money Magnet: How to Attract and Keep a Fortune that Counts (Wiley $32.95), available at all leading retailers.

This article was first published on Flying Solo, read the original here.

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