Improving Your Personal Financial Value

An important aspect of financial planning is the decision about how to optimize your income potential.  Create savings and investment capability by increasing income instead of by reducing spending.

The place to start is similar to what a business thinks about around new product possibilities.

  1. Start with what the world wants to buy or would want to buy if the product existed.
  2. Choose the ones that we could actually make or provide.
  3. Eliminate any that remain where the capital requirement is too high.
  4. Eliminate the ones that we cannot provide at a profit
  5. Study the rest and eliminate ones where competition is possible.
  6. Eliminate any of the few that remain if they cannot begin small and scale up quickly after proof of concept.

In choosing a career, or upgrading an existing one, recognize that employers and customers will pay you only for what they see the value of the task that you perform.  They care little about your personal worth or value.  You on the other hand, might want to consider the task value you possess compared to minimum wage.  How many times can you provide.  3 times, 5 times, 100 times.  How about 25,000 times.  About what a Bill Clinton speech will cost.

Step 1) Strategically you should look for careers that provide solutions to problems that people care most about.  Doctors make more than barbers because most people care about their health more than their hair.  Pick something that has a reasonable expectation of financial success.

Step 2) Eliminate ones where you cannot qualify.  Basketball players earn a lot, but if you are five feet five and 210 pounds, the odds are not in your favour.  Similarly if your marks are weak, medical school is likely out of bounds too.  There are many paths that work.  Do not get hung up on difficult choices.

Step 3) Toss the ones that have a high financial barrier to entry.  It does not matter how good the long run may be if you cannot afford the short run.

The last three business steps are different for people.  Look for satisfying.

Be cautious of labels.  Diamond cutter in Amsterdam means something different than it does at Yankee Stadium.

Career development should be ongoing.  Many of the skills in one career easily transfer to another.  Pay attention to the soft skills that come along in your current position.  Learning how to lead a meeting, write letters or proposals, resolve disputes, hire successfully, control costs, or motivate others are valuable skills. 

Develop them and be sure you get paid for having them. Sometimes employers can overlook the values you provide.  Remind them. 

Eventually you find you are entitled to whatever you can negotiate.  Maybe you should work on negotiating skills.


Don Shaughnessy is a retired partner in an international public accounting firm and is presently with The Protectors Group, a large personal insurance, employee benefits and investment agency in Peterborough Ontario.

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