Have you ever wondered how much money your best friends, neighbors, or even family members bring home each year? It’s perfectly natural to wonder. Human beings are an inherently curious species and can be very competitive in nature, especially when money is involved.
In some corporate cultures, “survival of the fittest” is the best way to describe how employees get ahead. When there is an opportunity for advancement, it’s always better to be all business and never personal. But is this cutthroat persona always the best road to take when it comes to making money?
The reasons why some people make more money than others are complex and influenced by a combination of factors, both external and internal. Some people are just better skilled at negotiating and advocating for themselves, leading to higher salaries. Knowing how to negotiate for raises and benefits can make a big difference in total income over time.
Making more money than your friends and coworkers often requires a combination of smart financial habits, strategic career moves, and sometimes entrepreneurial ventures. Here are nine ideas to make more money than your friends and co-workers:
9 Great Ways to Make More Money Than Everyone You Know
1. Increase Your Value in the Workplace
- Develop In-Demand Skills: Learn skills that are in high demand in your industry, especially those that others may not have. Technical skills, project management, data analysis, or certifications can make you more valuable.
- Network Internally and Externally: Building relationships with higher-ups and other professionals can lead to new opportunities, mentorship, and insider knowledge about potential promotions or salary increases.
- Ask for Raises and Promotions: Many people don’t have higher incomes because they never ask. Prepare a solid case showing your value to the company and ask confidently. Aim to negotiate more during your performance reviews.
2. Explore Side Income Streams
- Multiple Income Streams: Many high earners have income beyond their primary job, such as side businesses, freelancing, or investments, which contributes to overall wealth.
- Freelancing: Use your professional skills to do freelance work. Writing, graphic design, web development, and consulting are popular freelancing options.
- Passive Income: Consider investments that generate passive income, like stocks (dividends), bonds, real estate, or even peer-to-peer lending. It takes time to build but can be a significant income stream.
- Start a Side Business: Starting a small business related to your interests can be very profitable. You could start a blog, sell products on Etsy, create an eCommerce store, or offer coaching in a field where you have expertise.
3. Invest Wisely
- Stock Market: Consistently investing in the stock market through ETFs, mutual funds, or individual stocks can lead to significant wealth over time. Educate yourself on how to make smart investment choices.
- Real Estate: Real estate can provide a stable source of income through rental properties and property appreciation. It requires a larger upfront investment but can yield substantial returns.
- Cryptocurrency (with caution): While volatile, some investors have seen massive returns in cryptocurrency markets. Only invest in what you can afford to lose and research extensively before diving in.
4. Master Budgeting and Saving
- Automate Savings: Set up automatic transfers to your savings or investment accounts as soon as you get paid. Saving consistently—even a small amount—can lead to a strong financial base over time.
- Reduce Unnecessary Expenses: Keep track of your spending habits and cut out unnecessary expenses. The less you spend, the more you can save or invest.
- Take Advantage of Tax-Advantaged Accounts: Use accounts like 401(k)s, IRAs, or Health Savings Accounts (HSAs) to maximize savings. These accounts grow tax-free and reduce your taxable income.
5. Look for Higher-Paying Opportunities
- Consider Switching Jobs: In many industries, changing jobs can increase your salary faster than staying with the same company.
- Seek Out High-Paying Fields: Careers in tech, finance, healthcare, law, and engineering generally have high earning potential. If possible, switch to an industry with a higher income ceiling.
- Move Up the Value Chain: Specializing in areas where you solve expensive problems can make you more valuable and thus command higher pay.
6. Networking and Connections
- Professional Connections: Strong professional networks can lead to better job opportunities, higher-paying roles, and insider knowledge about salary expectations.
- Mentorship and Sponsorship: Having a mentor or sponsor in the workplace can fast-track career growth, opening high-paying opportunities that might otherwise be out of reach.
7. Increase Financial Literacy
- Learn About Money Management: Understanding how to manage money effectively can help you retain and grow your wealth. Read books, take courses, and follow financial experts to increase your knowledge.
- Avoid High-Interest Debt: Pay down high-interest credit card debt and avoid accumulating debt on depreciating assets. High-interest debt eats into income quickly.
8. Start Investing Early
- Compounding Interest: The sooner you start investing, the more time you allow for compounding interest to grow your wealth. Even small amounts invested early on can result in large sums later.
- Retirement Accounts: Contributing consistently to retirement accounts can help you retire with significantly more wealth than those who delay. If retiring early is your end goal then you need to do everything necessary to have the funds in order to do so, even if that means canceling a subscription or two.
9. Be Open to Unconventional Opportunities
- Remote and Gig Economy Work: Remote work and gig economy platforms allow you to take on extra work during your free time, often on your terms.
- Buy and Sell Assets: Flip items like antiques, cars, electronics, or even websites and domain names for profit. You can use platforms like eBay or Etsy or start a small reselling business.
Things To Remember When It Comes to Making Money
While no single factor determines income alone, there are several conditions that interplay in complex ways to shape earnings. For example, some people benefit from circumstances like industry choice or family background, while others leverage skills, persistence, and strategic career decisions to boost their income.
Regardless, education level and specialized skills are going to be the primary reason someone will make more money. Higher levels of education open doors to better-paying jobs. Those with specialized degrees, like in medicine, law, or engineering, often have higher earning potential than those with less formal education. Usually, high-paying jobs often require specialized skills, like software engineering, data analysis, or technical knowledge. People with in-demand skills that are hard to acquire often earn more.
Another important reason that someone makes more money than you is their risk tolerance. Simply put, people who are willing to take calculated career risks—like switching jobs, moving industries, or even starting their own businesses—often end up making more than those who prefer a stable path or risk aversion.
Entrepreneurship is the perfect example of taking big risks, but it also has big earnings potential. Many of the world’s wealthiest individuals made their money through entrepreneurship rather than traditional employment.
By being proactive in increasing your earning potential, creating multiple income streams, and managing your finances wisely, you’ll be well on your way to earning more than your peers over time.
