There are many meaning of ‘worth’ and let me make it clear from the beginning: here I am not talking about net worth or your worth in the most profound existential sense of the word. If I wanted to hear about your ‘net worth’ I would have asked ‘how much are you worth’; if I wanted to know about your value as an individual I would be making the next version of the L’Oreal advert – ‘because you are worth it’, you know.
This is about something else. Most people’s potential to accumulate wealth is mainly about ‘selling their labour’ or more simply put earning a pay check. In other words, what you are worth is measured by how much people are prepared to pay for your labour. Knowing your current worth, and how to increase your value, is important: this for most of us the way to increase our increase our positive cash flow, build our net worth and change the structure of our earning moving away from pay checks to passive (and automated) income.
Calculating how much you are worth at the moment is straight forward; just use the following formula:
(gross salary/wage + side hustle income)/time = personal worth
Even better, The Money Principle has a tool that will allow you to calculate what you are worth; to use the tool click here.
I know that currently, accounting only for my regular pay check) I am worth roughly £36 ($56) per hour. I suspect that accounting for the fact that I work longer (much longer) than the legal work week (35 hours) and that as an academic I do many tasks for which the payment is far below the minimum wage (examining PhD theses is one) my real worth is somewhat lower than that.
But this is not the point; knowing your worth – or how much your labour is worth – is just a useful starting point for increasing it.
And here are six strategies to increase the value of your labour, or what you are worth. I would like to emphasise that you increase your worth only by increasing what you are paid per hour; not by increasing the number of hours your work – I tried this one and it only gets you really tired.
Strategy 1: Specialise
Specialisation is important because it allows us to focus attention and effort on a relatively narrow area. This area, however, has to be chosen very carefully – it has to be a) something you have a gift for; b) something that is relevant to others; and c) something that has leverage and underpins other possibilities. Choosing the area of specialisation is very similar to the focused clusters goal setting strategy I have already discussed.
Strategy 2: Develop competencies that are rare and needed
Value crucially depends on two factors: deficiency and need. In other words, the less there is of something and more necessary it is the higher its value is likely to be. This is true about oil, water, gold as well as about education, skills and competencies. It is certainly true about labour markets – the value of your labour will be higher if you have skills and competencies that are rare and necessary.
One can identify such competencies in any occupation. What will make you stand out from the rest?
Strategy 3: Become the best
This sounds pretentious but it is so only when taken out of context; and we should remember that ‘being the best’ is always context specific. Be the best in your work unit; be the best in a relatively narrow niche; be the best in a locality. It is possible and anyone can do it: becoming ‘the best’ is usually a matter of a bit of talent and much hard work and persistence. Remember Muhammad Ali said that if he were not the best boxer in the world he would be the best rubbish collector in the world.
Strategy 4: Let people know you are ‘the best’
Any architect knows that ‘if you don’t build it, it doesn’t matter how much work you put into it’. In other words, from the point of view of your worth it matters whether you are ‘the best’; but it matters even more whether people around you realise that you are. Letting people know that you are ‘the best’ requires a lot of tact: there is a fine line between shameless self promotion and stating a competence claim.
Strategy 5: Move
This is particularly important for the ones amongst us who are employed by organisations. Most employers tend to under-estimate the value of the people they already have and are prepared to pay more for bringing people from ‘outside’. This is why in many occupations people progress faster and earn more if they move from organisation to organisation.
Strategy 6: Use anchoring to your advantage
Anchoring, I believe, can be used a short cut to signal your competencies and that you have become the best. A very well know case of anchoring is about black pearls coming to be regarded as beautiful and valuable. When they were first discovered they were neither – there was a whole beach of them and no one paid any heed to them. Until pictures of jewellery made from black pearls appeared photographed next to diamonds and a link was established.
Anchoring in the context of increasing the value of your labour is about creating associations between you and the best people in your niche.
During the last couple of years I have been experimenting with those – and they are just starting to pay off. Do you think they may work for you? Or you have other strategies to share?