In my research of over 100,000 people, I discovered that one of the top 3 barriers to earning more is “no free time.”
So how did Liz, one of my former students, earn $50,000 on the side as a law student? With a part-time job? And a new baby?
Today, she’ll share how. By the way, Liz is contributing this writeup as part of Women’s Money Week 2012.
Take it away, Liz…
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Last year I earned over $50k on the side. On the side of what, you ask? Attending a top law school full-time, working part-time during the school year and full-time during the summer, and starting a family. My son was born in November. How did I find the time and energy to do all this?
As a blogger, freelance writer, and website optimization consultant, I earn anywhere from $20/hr to $250/hr. Before incorporating the following principles I averaged $26/hr. But with these principles I doubled my hourly average to over $53/hr.
Here is how I incorporated many IWT methods into the 3-step approach I used to earn $50k on top of my already packed schedule.
Step 1: Take the Time to Prepare
Instead of “just getting started,” I prepare for success by setting up triggers and establishing accountability.
Set Up Triggers
In my favorite IWT interview, Stanford Professor BJ Fogg identified the three things you need for behavioral change: motivation, ability, and triggers. A trigger is reminder to do something now. For instance, placing a bottle of vitamins next to your bed is a cue to take your vitamin before you go to sleep. For me, triggers are the key to success. To earn more money in less time, I set up triggers that help me stay on task.
Here are my top three triggers:
- Place a Prewritten To Do List Next to My Computer — Each night before going to sleep I make a list of everything I need to accomplish the next day. I leave the list open next to my computer, so it’s the first thing I look at each morning when I start work. Doing this triggers me to immediately start working on the listed tasks and not get sidetracked.
- Have My Computer Open and On — I used to wait several minutes for my laptop to turn on each morning. While waiting, I would read emails on my phone and get distracted from that morning’s priority tasks. Now, I leave my computer on as a trigger to get right to work.
- Remove “Bad” Triggers — Because triggers cue you to do something, it’s critical to remove triggers that cue you to start the wrong task. Now, as a nightly ritual I remove anything from my workspace that would trigger me to start working on the wrong task.
Accountability is a powerful motivator. When you’re accountable you work more efficiently and you save time. Before I start a project I set up mechanisms to ensure that I will be held accountable.
Here are the top ways I establish accountability at the outset of a project:
- Work With Other People — For the biggest project I’m currently working on, I hired an independent contractor and gave her a stake in the outcome of the project. Working with another person motivates me to work when I might otherwise give up because I don’t want to let that person down.
- Set Deadlines — For any project I work on I set deadlines for myself. But that’s not always enough of a driver so I also tell whoever I’m working for when the project will be done, even if they haven’t given me an end date. Telling someone else the deadline holds me accountable to them.
- Pay For Services — I’m one of those people who has to pay for a gym, even though I know I can exercise for free at home. Why? Because knowing that I’m paying makes me go. The same is true of work. For one of the websites that I run, I wanted to start a monthly newsletter. So, before I had an exact plan for the newsletter, I signed up for a monthly subscription service. Knowing that I was paying for the monthly subscription service held me accountable to start the newsletter.
Step 2: Balance Certainty with Risk
My second strategy for making more money in less time is balancing projects that are certain with projects that are risky. Just like you allocate your investment portfolio between riskier investments and stable investments based on your needs and risk tolerance, you should also balance your time between risky projects and those that are certain to generate income. Balancing your time between risky and certain projects allows you to earn more money in less time.
Before I explain why, let me clarify what I mean by certain and risky.
Certain projects are those when you know you’ll make money and you know how much you’ll make. Most consulting and freelancing projects are examples of “certain.” If you know, that you will make $50 for writing a piece of content, and you also know that this piece of writing will take you no more than 2 hours, this is certain.
Risky projects are those that could earn you money — and hopefully more money than you’d earn with a certain project — but you don’t know if you’ll earn anything. Or when. For example, blogging, building apps, or running a startup are all risky. Even working for free to get a client in the door is risky. These projects are risky.
The bottom line is that a certain project guarantees that you’ll make a specific amount of money for doing a specific task, a risky project guarantees nothing.
Why Take on Both Certain and Risky Projects?
Some people might argue that you should only ever take projects that are certain. But the only way to earn more money is to take on more risk. The greater the risk, the greater the potential reward.
Another reason I advocate taking on risky projects in addition to certain projects is that, with time, they can turn into certain projects. For example, if you intern or take on a side project for free to show a potential employer your skills, that employer will likely end up hiring you (provided you’ve done a good job). I’ve interned at an organization for free, and once they saw my skills they hired me for a paid position. Another example is a blog that I started which led to a $250/hour consulting gig with a Fortune 100 company. The blog was risky (because it took time to create without knowing I would earn anything) but with time led to certain income.
Calculate the Certainty/Risk Balance That’s Right for You
To determine how much time you should allocate between risky projects and certain projects ask yourself three questions:
- How much money do I need?
- How much time do I have to get that money?
- What’s my tolerance for risk?
Last year, my goal was 1) to earn $150 a day in side income, 2) by the end of the year, and 3) with minimal risk.
So I allocated my time accordingly. I increased the number of projects I worked on that were certain to generate income (up to 80% of my time). And each day I did whatever I could to ensure that I earned $150 that day. For some of my consulting gigs this was only about a half hour of work. For other freelance projects, that required over 2 hours of work. And some of my writing gigs required 5 or more hours of work to achieve this goal. But, by allocating my time towards projects that were certain, I got the result I wanted.
This year, I’ve shifted to riskier projects. Right now instead of allocating my time so that I make a set dollar amount per day, I allocate over 75% of my available time to risky projects. I know that if I need to I can scale up the consulting gigs that are certain to make me money, but I love the thrill of trying something new and the possibility of having a huge payoff. These gambles are what make work fun for me.
Always Have Some Certainty
I recommend always having some certainty in your side projects. Besides the financial cushion certainty brings, when risky projects aren’t going as well your projects that are certain will build confidence and help you overcome your fear of failure. There’s nothing as confidence building as getting off a consulting phone call where not only did you help someone with their business problems, but you also earned side income. Success from certain projects gives you the confidence and skills you need to continue with risky projects.
Step 3: Protect Your Productive Time
Even when I’m prepared and have projects certain to bring in side income, last year would have not earned me more money in less time if I had not discovered how to protect my productive time. It sounds obvious, but it’s amazing how many small tasks eat away at our most productive hours of the day.
Find Your Productive Time and Space
Before I was able to use my productive time effectively, I first had to know exactly when I was productive. Ramit’s writing on testing helped me identify and maximize my productive time. I recommend starting with Test Responses at Bars, Testing Your Assumptions, and How a Beggar Uses Data to Optimize Donations. Use these methods to test to find out what time of day you’re able to get the most accomplished.
Don’t Let Anyone Mess with Your Productive Time
Once you’ve figured out when you’re most productive, protect that time and don’t plan anything during it. Seriously, during your productive time don’t schedule:
- doctor appointments
- coffee with friends
- or anything but those tasks for which you absolutely need full concentration
Personally, I’m a morning person. I get the most done between 6 am and 11 am. When I rescheduled the two things that used to consume most of my morning hours (taking classes and exercising) I was able to use those hours to more quickly and efficiently get the things done that require the most concentration. In the afternoon, writing an article used to take me 1-2 hours. In the morning, I can get it done in half the time.
Spend your productive time working on the tasks that require the most focus and will make you the most money.
“What if I have a 9-5 job?”
If you have a day job, decide how to divide your productive time. Ask yourself:
- Will you earn more money if you are more productive at your day job?
- Can you leave early if you’ve completed all your day job work?
- If the answer to both of the previous questions is “no,” can you rearrange your work schedule?
Then, allocate your time based on your answers to these questions. For example, if your most productive time is from 7am to 1pm and you earn more money at work if you get more done, ask your boss if you can rearrange your schedule to start work at 7am.
If you don’t have a flexible schedule or workflow, then test to determine your most productive hours during your normal work schedule. Adjust the factors that do have control over to get the most done in the least time.
“How Can I Earn More Money in Less Time?”
If you want to earn more money in less time this year, these 3 action steps will help get you started. Try implementing at least 1 step of this system for the next week. After a week, evaluate and determine how you can incorporate that step into your long-term work plan.
In the comments, leave the step you are going to implement this week and how you will implement it. Be specific.
If you want more case studies — including the word-for-word scripts they use — start here.