This article is an excerpt from the Shortform book guide to "We Should All Be Millionaires" by Rachel Rodgers. Shortform has the world's best summaries and analyses of books you should be reading.
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Do you believe you deserve a promotion at work? How should you ask for more money?
Money is a complicated topic that people like to dance around. But at the end of the day, people rely on money for rent, food, clothes, and more. That’s why you need to learn what you’re worth so you know you’re getting paid the right amount.
Let’s look at how to ask for more money that you deserve.
Charge What Your Work Is Worth
In We Should All Be Millionaires, Rachel Rodgers argues that to know how to ask for more money, you must raise your prices to match the value you produce rather than the hours you work. So, for instance, instead of charging $1,000 because your rate is $50 per hour and you estimate that a project will take 20 hours, think about how much value you’ll bring to the final project and charge that—perhaps $5000.
If you’re an employee with a fixed salary, Rodgers suggests negotiating for a higher salary by explaining how much value you contribute to your company. Determine the value you provide by considering the results of your work—the clients you acquired, the time you saved, and the money you helped your company make.
|Learn to Promote Your Value
While determining the value you produce is important, you must also be able to promote your value to others. In Secrets of the Millionaire Mind, T. Harv Eker writes that how well you promote yourself significantly affects how much money you can make and argues that you should educate yourself on marketing and sales techniques.
To determine the value of your work, consider rating your product or service from one to 10 according to how much value you think it offers. If it’s less than 10, Eker suggests you figure out how to improve your product to increase its value. According to Eker, this can help you promote yourself and raise your prices with integrity.
Rodgers recommends value-based charging because if you charge by the hour, you actually make less money the more experienced you become at your work. This is because as you gain experience, you’ll be able to complete the work more quickly, thereby reducing your income from the project. For example, you might be a freelance artist who charges $20 an hour. As you gain experience and improve your skills, you might finish a project in 10 rather than 20 hours. Despite producing work of higher value, you’ll earn only $200 instead of $400 from the finished piece.
You might realize that your work is worth more than you’re charging for it, but how should you adjust your rates? Rodgers suggests you simply double your price, whether it’s your salary, hourly rate, or the price of your product. She argues that many people produce the same work you produce, but they charge much more. To increase your wealth, simply demand what you deserve and provide high-end results to match. When you increase your rate, your work becomes more valuable. As a result, you make more money and people become more eager to work with you.
|How to Change Your Rates
Experts provide recommendations on how to change your rates: Do it gradually. Start implementing your new pricing system with new clients and clearly communicate to your existing clients why you’re making this change and how much value you’re providing.
Rodgers suggests you double your price, but if you’re offering a service or a product you can also consider creating multiple packages, or versions of your service or product that have different features and prices. For instance, you might have a cheaper package with basic features and more expensive packages with premium features. When you create multiple packages, you’re still charging what you’re worth, but more customers will be able to work with you. As you implement new features and upgrade what you have to offer, you can then raise your prices accordingly, allowing you to make more money as you gain experience rather than less.
When you increase your price according to your value, you’ll not only attract more customers, but more of the right type of customers. When you charge a higher price, you draw in people who are more interested in acquiring something of high value than saving money. Such customers encourage you to make more expensive, higher-value products, thereby empowering you to charge what you’re worth.
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Here's what you'll find in our full We Should All Be Millionaires summary:
- Why all women can and should strive to become millionaires
- Why working harder and living more frugally will not make you wealthy
- How to develop a positive money mindset and grow your wealth