To say people are interested in figuring out how to earn more money is like observing the sun is hot.
I see so much advice on side hustles, passive income, and work people can do from home. Most of it is well-meaning but misguided. It's also misleading, in the sense that it builds hope that earning good money can be done quickly and easily.
Some people succeed in all these alternative endeavors. And some succeed wildly. Their results say nothing about how likely it is any one person will succeed.
Today I discuss a method that has the greatest odds of success I know. It is not new and it is not easy. It takes time and hard work.
Get an Education, the More the Better
Go to school, stay in school, and work as hard as you can to do well in school.
If you are in the top half of your class, seek the next degree after you graduate. For example, complete high school and if you feel suited continue on to college. If you perform in the top half at college, continue on to get a graduate degree.
Successfully educating yourself will more reliably improve your lifelong earnings than anything else you do. There is good evidence to support this idea, at least in the U.S.
The U.S. Census Bureau performs research about Income and Poverty in the United States. In 2021 they published a report describing household incomes broken down by various characteristics, including educational attainment.
Look at this amazing distribution of income:
What does it tell us?
- Not completing high school is disastrous to your household income.
- Finishing high school and getting some college under your belt more than doubles your income.
- Graduating college more than doubles your income compared to finishing high school.
No One Is Actually at the Median
The figures above are median incomes, which means half of all households make more and half less. There are some extreme outliers at the high end, and not so many on the low end. That's because while you can’t earn less than zero, you can earn a great deal more than the median.
Many college graduates are unemployed or underemployed, meaning they work in a job that doesn't require their degree. Luck plays a part, no doubt, both good and bad luck.
What factors beyond luck contribute to determining how much your education will help you?
Not all education is the same
First, recall what I said above about your suitability for education. You should perform as well as you can, with the aim of reaching the top half of your class.
Today in the U.S. fully 70% of high school graduates aged 16 to 24 are enrolled in college. Not all of them will thrive there, as evidenced by the fact that 40% of them will never complete their degree.
If studying just isn’t for you, it is counterproductive to incur debt to be in college. This is especially so if you’re likely to be among that 40% who do not finish.
And there’s no point in collecting a degree that’s intrinsically not worth much, either because your school is not highly regarded or your grades are poor, or both. For more on this, see A Solution to the College Debt Crisis.
If you really want to increase your chances of moving up the income distribution, therefore, it helps to get into the best school you can and aim for at least average grades.
Not all work is the same
You will earn more if you get a job requiring the degree you just spent time and money acquiring. This becomes even more relevant at the graduate level, but it applies to your college degree as well.
To maximize your earning potential, you'll need to work in your degree-related job or profession for the bulk of your career. Switching jobs to work in different fields brings variety, but also means you start out less experienced in the new area.
Note that you can find new interests to provide variety while remaining in your degree-related job or profession. In fact, it's an excellent path to supplement your lifetime earnings.
More on that in a moment. First, let's address a glaring question.
Do You Need a College Degree to Earn Well?
No, not at all. If you're suited for education and do it well, education is a reliable path to higher earnings. But it's by no means the only path.
Here's a secret I'll share for free: a degree just gets you in the door. It is not your education that distinguishes your performance on the job. It is your attitude and outlook that create the conditions for you to excel in your job and get additional opportunities.
Your employer wants you to succeed. Good employers will offer on-the-job training to help you learn your job and get better. They will also want to see you develop new skills and will support your doing so.
For more on this, see James's Rules for Personal and Professional Success. No matter where you start, there are ways to distinguish yourself at work. This allows you to gain valuable skills and experience.
How To Leverage the Skills and Experience You've Gained
You can profit from your skills and experience beyond your job itself. Here are some ideas on how to leverage what you've learned and create opportunities for yourself.
- Volunteer in organizations outside work that are related to your work, or at least adjacent.
- Be helpful to everyone you can and keep track of the contacts you are making. LinkedIn is quite good for work contacts.
- Volunteer to speak at conferences or events in your area of expertise. Organizers are always looking for skilled speakers who are willing to take the time.
- Be open to opportunities that come your way. Your life rarely goes exactly according to a plan. But if you grab chances that become available, you can find success in ways you never expected.
Your Results Will Vary
Your circumstances are unique. Your abilities, experiences, and interests are too. Your path won't be the same as mine or anyone else's.
I suggest that a systematic approach greatly improves your odds of success, even though it will happen in unpredictable ways.
Education, building skills while working, volunteering, networking, and being open to opportunities.
Not easy, but much more reliable than trying to become the next crypto king or social media superstar.
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