How To Get From Earning $6/hr to $1,000/hr (6 Essential Rules To Increase Your Earning Power)
Back when I was in junior college, there was a time when I took on vacation jobs to gain exposure to the working world.
One of the memorable jobs I took on was a blue-collar job where I had to stick double-sided tape onto blue foam boards all day long. (The boards were supposedly printer parts.)
Every morning, I had to report to this dilapidated-looking factory in Tuas (an industrial zone in Singapore), where I stuck the tape in a sweatshop-like environment, along with 20 co-workers. Besides clearly demarcated break times (of five minutes long), we were not allowed to take breaks. Our breaks would be signaled to us every few hours through a loud, overhead alarm that blared throughout the factory. We were also not allowed to talk, use our mobile phones, listen to music, nor visit the loo while working.
The only thing we were supposed to do was to stick, stick, and stick all day long, for eight full working hours, until the alarm rang for the last time for the day. We even had a supervisor who would oversee us like a hawk to ensure we did not skive.
It felt like prison.
I didn’t last in that job. I quit after barely two weeks (I believe just 10 days), while my co-workers (some of them students like me) stayed on. (Kudos to them for their persistence; personally that job made me realize that monotonous, menial labor is simply not for me, ever.)
Moving Away from $6 an Hour… to $700 an Hour
Those were the days when I was paid $6 an hour.
Today, the situation has changed. I now earn up to $700 an hour for my group coaching programs. I charge several hundreds an hour for private one-to-one coaching. (Technically, I don’t do one-to-one coaching anymore, except for special cases, reason being it’s not a scalable way of reaching out to people.)
Not only that, I earn money for every second that I don’t work, thanks to my passive income business.
How To Start Earning $1,000 an Hour (and More!)
Compared to top coaches and leaders in the world, the rates I’m earning today are honestly nothing to shout about. Some top speakers easily command fees of $10,000 to $30,000 an hour.
Yet, my hourly rates are significantly more than what I used to earn. They are also a sign of higher rates I can achieve if I continue what I’m currently doing.
Today, I will share how you can transit from earning $6 to $1,000 an hour, or even more. While I have yet to command the latter rate, it’s a matter of time before I do as I grow professionally. The principles below will help you to attain higher hourly rates, whether it’s from $6 to $100, $100 to $500, $500 to $1,000, or even $1,000 to $10,000 an hour. They will also apply regardless of whether you run your business, are a freelancer, or are a salaried employee—simply tweak them to fit your context.
Rule #1. Value Your Time
Example: My Past Coaching Client
One of my past coaching clients was a high-profile business investor, V, who ran his own investment business. At that time, he was earning $4,000 euros every month (mainly passive income) and wanted to raise that to $10,000 euros.
Talking to V, I realized his major blocks to jumping to a higher income tier were that (a) he often spent significant time, at least two to three hours a day, on low-value activities like checking Facebook and email, and (b) he spent much time helping people for free, when he could be paid for his effort. The latter would even drain him sometimes as he would spend copious amount of time following up on personal favors (often without reciprocation or any appreciation) than doing things for himself.
I then asked him one simple question. “V, do you value your time?”
No sooner did the words leave my mouth, was he shocked and sent into deep thought.
“No, actually I don’t,” he responded, after mulling for a few seconds. “I don’t value my time at all. That’s why I spend so much time doing these things for others, for free. I could easily charge people for the value I’m giving, but I don’t, and it hurts me because many of them don’t appreciate the value I’m bringing to them. I see what you are getting at, Celes.”
Following that, V became more conscious of how he allocated his time. He only picked up projects which were in line with his personal and professional goals. He stopped going out of the way to help people and organizations for free, instead putting that time to better use in his personal goals. He spent time on higher-value work and eliminated the lower-value work in his day-to-day routine.
As it turned out, V reached his monthly revenue goal of $10,000 euros after less than nine months. It was almost as if the universe was waiting to make that happen for him. It was as if he was the one who was blocking himself in that goal, and my coaching with him had helped unravel those blocks, after which his $10,000 euros a month goal then manifested itself.
Example: Why I Began Outsourcing
I remember I used to scrimp and save when starting my business. I would do everything myself if I could, from graphic designing, to coding, to marketing, to administrative work. I held off outsourcing for a long time because my philosophy was, “Why pay when I can do it all myself?”
But I realized that I was wasting much time, usually hours on end, on low-value work such as troubleshooting tech issues, doing graphic design (say e-book covers and site buttons/banners), and administrative work. This work prevented me from getting to the high-value stuff—which were business development activities, including content creation and marketing.
By not outsourcing or delegating those low-value work to someone else, I was effectively not valuing my time. Those work could be easily off loaded at a rate of say, $5 to $10 an hour thanks to globalization. Was my time not even worth $5 to $10 an hour? Of course it was! In fact, it was worth much more than that (and even more so today)! I could easily be creating programs and doing activities that would generate me much more revenue to cover back the cost, and then some, with the time I save by outsourcing.
Valuing my time has made me undertake outsourcing decisions with ease. I already have a graphic designer and a VA team working with me; I’m currently hiring one new designer and I intend to hire an IT person soon to handle my IT issues. A personal assistant may come in due time.
While these people cost money, the rates I’m paying them are still lower than than the value I assign to my hour, which is priceless. An hour I spend writing a press release which can generate two, four, eight, ten media interviews? I say that’s easily worth hundreds if not thousands of dollars of value. An hour I spend creating a new program which becomes integrated into PE as a permanent course, for sale? That is a life-long income stream. That’s definitely priceless, both in terms of monetary value and spiritual value (from helping others grow).
Do You Value Your Time?
Here are my questions to you: “Do you value your time? Do you willingly spend your time on low-value tasks or do you triage often and focus only on the high value tasks? What is the actual value you assign to your time?” Because until you do the latter, you will not be able to break through to a new income tier.
More on being time savvy:
- The 8 Habits of Highly Productive People
- Put First Things First
- Achieve More With Less In Life Using 80/20 Principle (3-part series)
Rule #2. Say No to Low-Value Engagements
A big lesson I learned during the second to third year of running PE is to say no to low-value engagements, defined as engagements below my rates or which cost more time and effort than they are worth.
In my second year, I secured an exclusive training partnership with JobsCentral, one of the leading job portals in Singapore. It was a revenue-sharing arrangement so my earnings were dependent on the number of signups for each workshop, but overall I was getting $900 to $1,300 for one half day workshop (which works out to an hourly rate of about $200 to $300).
It was a good rate at the beginning, but after one year, I was at a further place professionally and was ready to command higher rates. From a purely financial standpoint, it was no longer worthwhile for me to set aside time every month for $200 to $300 an hour trainings, when I could easily be working on other projects which could bring me a higher revenue. (There were other factors of consideration like career-trainings not being in line with my core direction of personal development and me preferring to go the passive income route than actively trading my time for money every month.)
So, I terminated the engagement. Sure, that made me lose a monthly stream of income of $900 to $2,000 initially. However, this was a necessary short-term cost to usher in long-term rewards. I used my free time (from not doing the workshops anymore) to build new products, development my platform, and create new quality content.
In that same year, PE hit a million page views a month. The traffic increase indirectly led to higher advertising revenue and higher product sales. Consequently, my annual revenue that year was 50% higher than the previous year.
By taking on low-value engagements, you say no to high-value engagements. When you agree to take on a project at $15 an hour, you say no to a rate of $30 an hour. When you agree to a job of $30 an hour, you say no to other jobs that would pay you $100 an hour. For every engagement you take on, there are always trade offs to consider.
The approach I would recommend is this: What is the base rate for you to feel worthwhile of your time and effort? Stick with that and don’t take on any projects with lower rates than this, unless there is intangible value (such as exposure, learning opportunities, and long-term relationship building) which makes you feel it’s worthwhile to take it up.
- How To Say No To Others: The Only Guide You’ll Ever Need
- Are You Self-Sabotaging Yourself? (Understanding Self-Sabotaging Behavior and Breaking It)
- How to Get Maximum Results When You Have Too Many Ideas (Harnessing The Superstar Effect)
Rule #3. Develop Your Expertise (Become the Go-To Person)
People pay you money when you offer value to them. The value you offer (and subsequently the rate you can command) increases exponentially when you become the expert in your field.
* Graph of price people are willing to pay you vs. your expertise
Notice how the relationship between price and expertise isn’t a linear one; it’s exponential. That’s because it’s easy to acquire a skill but it’s extremely difficult to be the best in it. For the people who break through and become the best in the field, they get to command exorbitant rates.
Case in point: Anthony Robbins, one of the top motivational coaches and speakers in the world. Having spent 30 years on motivational coaching and speaking, he is now the widely regarded as one of the best, if not the best, in the field. For the same reason, he commands ten thousands of dollars for his coaching and hundred thousands for his speeches. He has coached world leaders like George H.W. Bush, Bill Clinton and Mikhail Gorbachev before. In 2007, Robbins earned approximately USD$30 million from business activities. He probably earns a lot more today.
People may think Robbins’ rates are crazy and not worth the value he delivers. It doesn’t matter what they think though. The point here is he’s regarded as one of the top leaders in the field, which is why he can demand those rates and be hired at those rates.
Another example: Kobe Byrant, one of the top basketball players in the world. He has won the All-Star MVP Award four times, tying him for the most All Star MVP Awards in NBA history. A 14-time member of the All-NBA team and an 12-time member of the All-Defensive team, he is also the youngest player ever to receive defensive honors. His expertise in basketball and established profile have made him the highest-paid NBA player in 2012 at $27.9 million USD.
“What is it a basketball player does that justifies receiving that salary?” some may challenge. Again, it doesn’t matter. The point here is that Kobe is a star player and Lakers can’t do without him. He is indispensable, or rather, his expertise has made him indispensable.
If you are number one in your field, no one is going to say no to paying you high rates. That’s because you would have unparalleled expertise and insights to offer which no one else can.
On developing your expertise:
Rule #4: Target Audience with (High) Purchasing Power
In every business, you have the high-demand, low-paying customers. These people quibble a lot. They fuss about every single thing. They suck up your time and energy. And worst of all, they are unyielding with their money. These customers usually make up 20% of your clientele base but take up 80% of your time and effort. (Read: The 80/20 Principle (3-part series))
These customers, you want to avoid like the plague.
I once had a coaching client who had extremely compounded issues. She would cry severely during each coaching session. She had deep angst against the world which had never been addressed prior to our coaching.
Sympathetic to her predicament, I really wanted to help her. I created many exceptions for her. Each coaching session with her would drag from one to two, sometimes three, hours, because she had so many issues to be processed. There was a point where she said she was running into financial difficulties and was not able to afford the coaching, and asked me if I could give her a special rate. I relented, and allowed her to pay me a donation fee of (!) $10 for each session instead. This was very early on when I started my business.
There came a point where she was sapping much of my energy and time without adequate compensation. The coaching was going nowhere as she was not able to internalize the lessons covered during each session, often returning with similar grievances as from the past. Helping people aside, I had a bottom line to meet and there were other clients on my waiting list I needed to get to. The coaching relationship was clearly not working out and it was best that I ended it sooner than later.
So I broke the news to her one day, after a session. I said that following the completion of the current round of sessions (I did extensions in sessions of four at that time), I was unable to grant the “special” rate to her anymore and we had to revert to my usual rates if she wanted to still continue on with them.
Taken by surprise, she asked me why I was doing that. She then confronted me about how I promised to help her with her problems and offer her the discount until she had more finances. (Note that at this point we already had 20 sessions, the longest running coaching relationship I have ever had with any client. A real, productive coaching relationship should not be this long; it should usually be 8 to 10 sessions tops.) I reiterated my stance politely to her, but it was clear she was not happy with how things had panned out. Since it was out of her budget (or at least more than what she was willing to pay), she chose not to continue with the sessions.
The experience taught me that not all clients are equal. Some are draining, with steep demands, and are best left unengaged. It’s not that they suck, but that your needs and theirs are simply not compatible. On the other hand, there are people with high purchasing power, with reasonable demands, and who are awesome to work with. These are the people you want to engage.
I subsequently had other encounters with such low-value, high-demand clients, and began to let go of them, one by one. One method I found has been effective in filtering out low-value clients and attract high-value, high-paying clients is by fixing my rates and standing firm by it, i.e. not taking on any client that cannot afford that or tries to haggle.
Another thing which I’m beginning to do lately is to center my courses on high-level problems (i.e. how to create a passive income business, how to run a top blog, how to excel in your career, etc.), than address low-level issues (i.e. how to use WordPress, how to find a job, how to deal with hate, and the like). The former are topics that interest people of higher consciousness or of a higher development stage in their life, and hence tend to be people with higher purchasing power, while the latter, being more elementary problems in comparison, tends to attract people of lower income standing (or at the very least, with low desire to invest in their growth).
Rule #5: Provide a Solution to a Popular, Urgent, and/or Specific Problem/Need
Running my business (especially an information platform) has given me the fluidity to create whatever products and services I want for whichever topic I like. I have noticed three types of problems/needs which have higher income potential than the norm.
To increase your earning power, firstly, identify and address popular needs. What are the buzz topics in your industry? What are people usually looking for? What are the top problems they face?
For example, my top earning course so far is my passive income course, which I conducted at $700 an hour, higher than my other courses. I was not surprised that this became my top earning course as it addresses a popular need (after all, who doesn’t want to earn passive income?). When people are already sold on on the importance of X, it’s relatively easy to sell a product or service on X at a premium price. Other example topics are how to earn more money, how to attract the opposite sex, and how to lose X kg in X days (weight loss products).
Secondly, look for urgent needs to fill. You’d be surprised at how urgency can drive many purchase decisions, even if they come at exorbitant costs. For example, I just met someone yesterday who has been coughing for several months. He then went to see a ENT (Ear, Nose, and Throat) specialist which did a checkup for him and administered medication. The total fee was $800. It was a cost that had to be expended because it was of a pressing problem.
Another example is how people with last minute travel arrangements would willingly spend $500 or $1,000 for a night at a hotel. Why? Because they need a place for the night and they have no time to look up other locations. Again, the urgency justifies the cost.
Urgency ties in with time, so provide a solution that’s time sensitive or season sensitive. For example, a weight loss program at the start of the year since that’s when people set their new year’s resolution to lose weight. A program to meet one’s soul mate launched in the month of February (for that’s Valentine’s Day). A fitness and toning program during the bikini, summer seasons. A retreat program at the end of the year as it’s the perfect chance to do annual reviews.
Thirdly, be specific. Firstly, identify the specific problem you are solving. Secondly, provide a very tangible outcome. The more specific and tangible you are, the more people will be likely to pay. For example, people will likely be willing to pay more for a course “How to Overcome Emotional Eating” (a very specific need) than “How to Lose Weight” (which sounds generic). A weight-loss program like “Lose 5kg in 21 Days” can fetch a higher price than “How to Lose Weight” since there is a very tangible outcome to be expected.
Combining any of the three factors will increase your earning potential by at least 1.5, if not 2 to 3 times.
Rule #6: Scale Up to a Larger Audience
While cutting low-value engagements (rule #2) and developing my expertise (rule #3) helped me transit from a rate of $20 to $200–$250 an hour, it was group coaching and webinars that bumped my rate up to at least $500 an hour today.
After all, it is easier for me to design a solution which 40–50 people feel would be worth at least $20–$30, than to find someone who is willing, or even able, to fork out $1,000 an hour for private coaching.
Not only that, by creating a concentrated solution to a problem which a group of people are facing, everyone gains. The participants gain from being in the company of like minds. They save money from a lower cost per pax. I gain from having a higher revenue per group than if I were to offer the solution to only one person (even if he/she pays a higher rate). I also gain emotionally and spiritually as I get to help more people, as opposed to one person with one-to-one coaching.
Likewise, it’s much easier for you to command a higher rate from offering your work to a large audience than restricting to just one or a few people. Everyone benefits from the economies of scale—you earn more for your time, each person pays a lesser fee, more people benefit from your work, and participants get a richer learning experience (if it’s a workshop or seminar).
Think about (a) how you can design solutions for a larger crowd, such as a $20 product to 1,000 people than a $2,000 product to 10 person and (b) how you can expand your existing work to a larger audience. The digital medium has made it easy to do so, since digital products can be replicated and sold to an additional customer at zero marginal cost.
I’ve written a fair bit on scaling up here: Million Dollar Tip #4: Scale Up Your Work
How Can You Apply the Six Rules?
What is your hourly rate at the moment? How can you apply the six rules to achieve a higher hourly rate? Share them in the comments section.
If you want to see more of such high-value articles, please tweet, share, tumblr, etc. this post. Thanks!
« 5 Common Mistakes to Avoid When Writing Business Proposals (or Any Pitch for That Matter) [Examples Included]
Introducing: 24/7 PE Members Portal for 30DLBL, 30BBM, and Other Course Owners! »