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 more 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 an industrial zone in Singapore (Tuas) where I stuck tape in a sweatshop-like environment along with dozens of co-workers. Besides clearly demarcated break times of 5 minutes long, we were not allowed to take breaks. Our breaks would be signaled to us every few hours through a alarm that blared throughout the factory. We were also not allowed to talk, use mobile phones, listen to music, nor visit the loo while working, even though one could argue that listening to music would make the monotonous, repetitive work more bearable as opposed to reducing our productivity.
The only thing we were supposed to do was to stick, stick, and stick all day long, for 8 full working hours, until the alarm rang for the last time at 5pm. We even had a supervisor who would watch us like a hawk to ensure we did not skive.
It felt like prison.
Needless to say, I didn’t last in the job. I quit after barely 2 weeks (I believe I was there for just 10 days), while my co-workers (some of them students like me) stayed on. I’d say that it was this job experience that made me realize that monotonous, repetitive work is simply not for me.
Moving Away from $6 an Hour… to $700 an Hour
Those were the days when I was paid $6 an hour. (That’s in Singapore dollars; 1 SGD is about 0.75 USD as of 2015.)
Today, the situation has changed. I charge well in the thousands range for my talks and workshops. On average, I earn over a thousand for each group coaching session (each session is 2 hours each, so it’s about $700 SGD per hour) and several hundreds an hour for private 1-1 coaching. Nowadays I limit the number of 1-1 coaching clients I take on, reason being it’s not a scalable way to help others.
Not only that, I earn money for every second I’m not working. That’s because I’ve structured my business to a passive income model so that my income wouldn’t be tied to my time, which then allows me to focus my time on high-value projects to reach out to more people.
How to Start Earning $1,000 an Hour (and More!)
While there are plenty of people — coaches and speakers alike — who earn much more to me (top speakers easily command fees of $10,000 to $30,000 an hour), 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 want to share how you can transit from earning $6 to $1,000 an hour or even more. The principles below will help you 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.
While the rules are written in the context of a business owner or a freelancer, these principles apply even to a salaried worker as well. It’s more important that you understand these principles, integrate them into your thinking, and then approach your own endeavors, projects, with this new mindset!
Rule #1. Value Your Time
Example: My Coaching Client
One of my past coaching clients was a high-profile 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. (1 EU is about 1.14 USD as of 2015.)
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 2-3 hours a day, on low-value activities like checking Facebook and email and (b) he would spend a lot of his time helping people and companies for free when he could be paid for his effort. While it’s not an issue to help others for free (I do that all the time with friends and strangers), (b) was a serious issue for V as he would spend copious of his time each week, including time in his own work hours, doing personal favors for others — sometimes without reciprocation or appreciation. Because he would give away so much of his time for free, he often wound up feeling drained. It was also arguable whether those people actually appreciated his help as well; some wouldn’t even follow up on the help he rendered!
I then asked V 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. Not only that, 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 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 own goals. He spent time on higher-value work and eliminated the lower-value work in his day-to-day routine.
Note that here, it wasn’t that V stopped helping others for free or that he looked at every request for help with a mercenary attitude. Rather, he became focused on how he could constructively help people while valuing his own time and needs. It’s about realizing that he has good value to give to others and he deserves to be paid for the value he is giving, just as how he is happy to pay companies and individuals (like myself) for high quality services and products. Interestingly, by making sure he is compensated properly, it has made him value his time further and put it to better use.
As it turned out, V reached his monthly revenue goal of $10,000 euros after less than 9 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 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 tasks like troubleshooting tech issues, coding, doing graphic design (say e-book covers and site buttons/banners), and administrative work. This work prevented me from getting to the higher-value tasks in my work like content creation, marketing, and business development. Such admin tasks would also cause me to work late till wee hours of the morning, because (1) I’m not a top expert in coding, tech, or e-book design and hence would need to put in extra time to learn the ropes and do the work and (2) the act of having to do something that I was neither an expert in nor enjoyed made the process very draining, which would make me take much longer than necessary to complete the task.
By not outsourcing or delegating the low-value tasks, I was effectively not valuing my time. For example, thanks to outsourcing portals and globalization, it is possible to get good quality help online today starting from $5-6 USD an hour. Yet, I was holding off from outsourcing because I wanted to save this money. Was my time not worth $5-6 USD an hour then? No, of course not! I was locking myself in with an illogical need to save money — even when I wasn’t in a shortage of cash in my business — with the blind objective “to save money.” The result was thousands of hours wasted, thousands of hours which could have been better invested in my business to further grow it and earn more income — which would well cover the cost I spend in outsourcing.
After I began to value my time, I saw the need of hiring. In the past years, I’ve been outsourcing ad-hoc design work to a graphic designer and working with a VA (virtual assistant) team. This year (2015), I did away with my VA team and hired a personal assistant for all my administrative work at PE. My PA has been phenomenal and I’d say she’s easily one of the best people I’ve ever hired in my entire life.
While hiring help costs money, the money I pay is well worth it as it frees my time to work on the important stuff. For example, a few hours that I spend writing a press release which can generate 2, 4, 8, or even 10 media interviews is easily worth hundreds if not thousands of dollars of value. A month that I spend creating a new program which becomes integrated into PE as a permanent course? 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’ll not be able to break through to a new income tier.
On outsourcing: Why You Should Outsource and How to Get Started)
More on being time savvy:
- The 8 Habits of Highly Productive People
- Put First Things First
- How to Achieve More With Less Using The 80/20 Principle (3-part series)
Rule #2. Say No to Low-Value Engagements
A big lesson I learned during my 2nd and 3rd 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 2nd 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 an average of $800-$1,000 SGD for a half day, 4-hour workshop. Deducting room rental fee and miscellaneous costs, my actual income was about $500-$700 SGD for the workshop or an hourly rate of $125-$175 SGD.
While it was a good rate at the beginning, after one year, I was more developed professionally and was ready to command higher rates. From a purely financial standpoint, it was no longer worthwhile for me to commit my time every month for a workshop which would take up almost a week to prepare in return for hundreds of dollars in earnings, when I could easily be working on other projects with higher long-term potential. There were also other factors of consideration like career training not being in line with my business direction of personal development and myself feeling that in-person workshop training simply isn’t a viable way to help, reach out to more people (compared to developing my online platform).
So, I terminated the engagement. While made me lose a monthly revenue stream of $800-$1,000 SGD initially, it was a necessary short-term cost to usher in long-term rewards. With this free time of not doing my workshops, I was then able to use it to build new products, develop my platform, create new quality content, and pursue my traveling goals (it was after I terminated the engagement in 2011 that I started my 7-month world trip to Europe and US).
In that same year 2011, 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 in 2011 was 50% higher than in 2010!
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.
Of course, it’s not just about money. Notice that I said Rule #2 is “Say No to Low-Value Engagements” as opposed to “Say No to Low-Paying Engagements”? Here, “value” is not synonymous with money; rather, value should be assessed holistically in the truest sense of the word. It’s possible that you can have a low-paying to non-paying gig that actually has a lot of intangible value in terms of exposure, learning opportunities, and long-term relationship building.
For example, most of you know about TED/TEDx talks: they are a global set of conferences, aimed to spread inspiring, thought-provoking ideas to the world. I was invited to speak at TEDx in Chicago this year, though unfortunately I wasn’t able to take it up due to other conflicts. A ticket to the main TED conference actually costs several thousands of dollars. However, did you know that speakers are not paid at all for their Ted/TedX gigs?
Yet, it’d be incredibly silly for a speaker serious about establishing themselves in the speaking circuit to reject an opportunity to speak at TED/TEDx just for this reason. That’s because the opportunity to speak at TED/TEDx talks is seen as a high honor in the speaking circuit, and speaking there gives you the opportunity to raise your profile, the opportunity to speak to a highly-targeted and esteemed audience, networking opportunities, among other benefits. For these reasons, many speakers actively network and approach TED/TEDx organizers and pitch proposals to them just for an opportunity to speak at their conferences.
Hence, evaluate your engagements holistically. I recommend to identify a base monetary rate that you feel is worthwhile of your time and effort. Then, with each engagement that you receive, evaluate it based on its rate, along with the intangible value that it offers, such as exposure, learning opportunities, and long-term relationship building. Only take on the engagements where you feel the value they offer outweigh the costs involved (the investment of your time, effort, and resources).
- How to Say No: Guide for Busy People
- Are You Self-Sabotaging Yourself? (Understanding Self-Sabotaging Behavior and Breaking It)
- The Superstar Effect: How to Get Maximum Results When You Have Too Many Ideas
Rule #3. Develop Your Expertise (Become the Best in Your Field)
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.
Notice how the relationship between price and expertise isn’t a linear one? It’s an exponential one. 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 in 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.
I share more about this phenomenon here: Have You Seen this Lady Before? (The Market Leader Effect)
On developing your expertise, read
Rule #4: Let Go of the 20% Low-Value Customers
In every business, it’s common to have high-demand customers. These people quibble and fuss about every single thing. They suck up your time and energy. And worst of all, they even haggle with you on your prices. These customers usually make up 20% of your clientele base but take up 80% of your time and effort, also known as the 20% low-value customers. (Read: The 80/20 Principle (3-part series))
For these customers, it’s best not to serve them and to move on.
I learned this the hard way. When I started my business, I didn’t know about the concept of 20% low-value customers. I thought it was my duty to put 100% of myself out there for my clients, even at the expense of myself. So, I would go out of the way to serve every single client perfectly regardless of their demands and requests. While this attitude is good and I continue to have this mindset when dealing with my clients, I eventually came across difficult customers with impossible needs, unreasonable expectations, and a lack of appreciation for what I did. With these customers, I would often spend 90% of my time just dealing with their concerns and issues alone, leaving me with little to no time for anything else at all.
Tired and drained, this began to affect my ability to perform my work at a high level. I was also not able to serve my other customers in the way I desired. It got to a point when I realized that the difficult customers were simply low-value customers I needed to let go, and keeping them was not only detrimental to (1) myself, but also (2) my other customers, and (3) the difficult customers themselves since their needs are obviously not being fully met with me serving them. This realization was very liberating for me as I was then able to free up significant amounts of time and energy, in turn better serving my current clientele, taking on new clients, and creating better value offerings for everyone.
The experience taught me that not all clients are equal. Some have incessant demands and expectations, ones that require you to dedicate nearly all your energy to cater to them. These are 20% low-value customers. On the other hand, there are the customers with adequate demands, whose needs are a good fit with what you have to offer, and who are great to work with. These are the people you want to engage. When you focus on the latter group, you are able to channel your energy into developing higher-value offerings and building your business, in turn increasing your credibility and earning power.
Rule #5: Provide a Solution to a Top, Specific, and/or Urgent Need
Over the years, I have noticed 3 types of needs which tend to have higher income potential than the norm.
Firstly, you want to create solutions that solve existing, top needs among your audience. What are people in your industry looking for? What are their top needs, aspirations? What are their top troubles, problems? What are their top burning pains (i.e. not just a regular pain, but a burning pain they want to get rid of and solve)?
Why is this tip important? That’s because
- While you can be very passionate about topic X and create a product/service on it, if X is not an existing problem/need, no one is going to care about your offering. It doesn’t matter what you are passionate about — your audience doesn’t care what you want; they want what they want. You give them what they want by understanding what exactly are their top needs and creating the best solution that addresses them.
- By targeting an existing, sought-after need, you don’t need to spend time/effort to educate your audience on why X is important for them — they already know that and they already want help on it. You can then focus on creating the best solution to address X and showing them why yours is the best solution, in getting them to buy your product.
For example, I’ve many products at PE. My staple, classics are Live a Better Life in 30 Days and Be a Better Me in 30 Days which are also the best-selling programs (in terms of sales volume) on PE. Why? That’s because they are designed around the core need of my audience: life transformation/excellence and character transformation/excellence. People who come on PE are already interested in life and self-improvement, so these 2 programs are the perfect fit. I always recommend anyone who’s new to PE to get these 2 programs, because they are like the jump-starter kits to accelerate your personal growth and get clear direction in your life, self.
On the other hand, I’ve a video course How to Stop Stress Eating Program on overcoming stress eating. While it is an extremely high quality product and is very affordably priced (it contains my best solutions to overcome emotional eating, a problem I struggled with for 10 years and finally overcame), revenue-wise it doesn’t match up to that of 30DLBL or 30BBM. Not even close. That’s because emotional eating is more of a “niche” need rather than a top need in a personal development audience. On the other hand, say I run a weight loss or healthy living blog — would this program be a better fit for my audience needs then? Yes, most definitely.
While this doesn’t change the fact that I would still have created my EE course (I already have my core programs that bring in staple sales, so I created my EE course out of passion, not money), I share this example because I want to drive home the point that it’s not just about randomly creating products on a whim. You want to do in-depth research in your field to understand your audience, really know what their needs are (vs. just doing guess work), and come up with a meaningful solution to solve their needs. Otherwise, it’d be difficult to help them in a meaningful way, and you’d only be left frustrated on why no one seems to care about what you’re creating.
Secondly, be specific. You should be solving a very specific problem and giving a very tangible outcome. The more specific and tangible you are, the more people will be likely to pay. For example, a weight-loss program like “Lose 5kg in 21 Days” can likely command a higher premium than “How to Lose Weight” since there is a very tangible outcome to be expected. The same goes for a business program like “Online Entrepreneurship: Earn $1,000 in your first 100 days” as opposed to “How to Start Your Business.”
The third factor is optional, but see if you’re able to tie your solution with a time-based need. Urgency often drives many purchase decisions, even if they come at a premium.
For example, I recently met someone who has been coughing for several months. He went to see a private ENT (Ear, Nose, and Throat) specialist who did a checkup on the spot and administered medication. The total fee was $800. While expensive, it was a cost that had to be expended because it was a pressing problem that needed attention right away. While my friend could have gone the public healthcare route which would have been much cheaper due to government subsidies, he would likely have to wait 1-2 months just to get a consultation alone (in Singapore, the wait times to secure an appointment in a public hospital can be very long, especially if the staff does not deem your condition as urgent), and this was simply unacceptable to him. He had been troubled by this issue for a while and uncovering the cause and fixing his health was much more important than saving the money.
Another example is how people with last-minute travel arrangements would willingly spend a premium just to get a booking at a hostel or hotel. Why? Because they need a place for the night and they have no time to look up other locations. It is either they pay this price or risk being left on the streets which would be very dangerous. Again, the urgency justifies the cost.
Urgency ties in with time, so consider providing a solution that’s timed with the season. 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 soulmate launched in the month of February (the month of 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.
Combining the 3 factors will most definitely increase your earning power by a good 10X to 20X. Of course, the assumption here is that you already have expertise and credibility in the very topic you are trying to help others in (see Rule #3). If not, please work on building your expertise first — there’s no worse thing than trying to create a product and charging others for something when you’ve yet to build your own skills in the domain!!!
Rule #6: Scale Up to a Larger Audience
The last rule is about scale. 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 that bumped my rate up to at least $500-$700 an hour today.
While is scaling up so important? In the context of coaching,
- More impact in my mission. I get to reach out to more people through group coaching as opposed to helping just one person in 1-1 coaching. I get to disseminate my teachings to more people, in turn creating a bigger ripple effect in the world, in turn gaining greater satisfaction this way.
- Benefits from working in a group. Participants gain from being in the company of like minds, hearing each other’s stories and progress, and getting support from each other.
- Greater affordability. Because it’s a group course and there are many participants enrolled, the price of each ticket is only a fraction of my 1-1 coaching fees. Participants get to benefit from my teachings, frameworks, and coaching without having to fork out the same fee for 1-1 coaching.
- Higher monetary earnings. All things being equal, it is generally easier to sell something to 40–50 people feel would be worth at least $200–$300 than to find someone who is able to afford (and is willing to pay) $10,000 for a very specialized solution. I gain from higher earnings per group than if I were to offer the solution to only one person (even if he/she pays a higher rate).
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 or $200 product to 100 people than a $2,000 product to 10 persons 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 6 Rules?
What is your hourly rate at the moment? How can you apply the 6 rules to achieve a higher hourly rate?
Check out all the articles in my Passion & Money series: How to Pursue Your Passion & Earn Money (series)