One common theme I see from people who are struggling financially is they do not invest enough in themselves. I have noticed that many of the people in this category don’t take deliberate steps to better their situation. More often than not people will expect that eventually their situation will change. One scenario is people think that after enough time at their job they will receive a raise or promotion. Unfortunately the workforce culture has shifted, especially after COVID. With remote work being relatively common now, employers can hire from a much bigger labor pool and not just the local community. Employers also look at outcomes and not just effort. They want results. This means it’s just not good enough to show up and expect good things to happen.
There are other ways I have seen people take a passive role in their success, but it all boils down to the fact that you must be deliberate in your success. Multiple studies have shown that a growth mindset is one of the biggest predictors of success. The Mind Over Matter report is a great read if you’re curious. Carol Dweck talks extensively about this in her book Mindset. I won’t belabor all the data and evidence since it has been done so well, but I do want to explore why more people are not using this in their everyday life. If it has been shown to get strong results, what is preventing people from using it? I see three primary drivers:
- People don’t know about the impacts of growth mindset
- People have a hard time funding their growth
- People struggle to find time for growth.
My goal of this post is to tackle the first two, and I will add a follow-up post to address the time. So how do we address the cost of our personal growth? The simplest way is to look at Return on Investment (ROI). Does the cost of growth result in greater earnings? For example, if a $5,000 certification will result in a $5,000/year pay raise or promotion, it has a positive ROI. Meaning after the first year the money you invested in yourself will have paid for itself and anything afterwards adds to your wealth. You can apply this process to many different situations. The trick is to define a tangible goal. Some increase in earnings is due to a specific activity or action. If I do x then I will get y.
What about situations when there is no tangible metric? As I noted earlier, the workspace has become far more competitive. How do you set yourself apart from everyone else who meets the criteria of a position you want? This is where you need to focus on overall development. You want to be as knowledgeable as possible in all things that are important to an employer. Knowing the core responsibilities of the job, but also having good communication and other soft skills. But these are hard to quantify and there are an ocean of resources you can leverage. So how do you know how to budget for an undefined skillset with no specific education pathway? I recommend using a budget to carve out a portion of your income to self development. I have seen a variety of numbers ranging from 3-10% of your income. I personally try and set aside 5%.
When I first read about this approach I was honestly a bit skeptical. Would someone making $250,000 a year set aside $15,000-$25,000 for self development? What would you even spend it on? Surprisingly, a lot of successful people do this. Doctors need continuing medical education (CMEs) which cost thousands of dollars. Executives will often take leadership boot camps or programs. What about the opposite end of the spectrum? For someone making $30,000 a year how are they supposed to save $1,500-$3,000 for development? Like most things it can be done when you pay yourself first and build it into your budget. Fortunately you can improve your skillset for far less than $1,500 a year. There are plenty of book platforms and free podcasts. Libby is a great online platform that lets you check out digital copies of books from your local library for free. Subscriptions like Audible are also cost effective. Coaching programs like my financial literary course are also great resources for knowledge.
Once you start to better yourself it becomes more natural, and honestly, easier. The law of attraction indicates that positive actions bring about more positive actions. This is the heart of the growth mindset. When you start to grow yourself and improve, it starts to snowball and build momentum. The more knowledgeable and skillful you are, the more valuable you are to an employer. This means you are more likely to get raises or promotions which increases your income. This means you can devote more resources to your growth, and the cycle repeats. Compare this to someone who is wanting the same opportunities you do but is not willing to invest the time and effort into themselves, and it becomes clear why you would be the preferred option.
I hope this has been an informative read. In a future post I will look at the third barrier to personal growth, time. There are tons of time management resources available so I will try and share some of the strategies I have used to build in time for my development.
