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There are two ways to get more money.

The way that most financial gurus like to talk about is by cutting expenses. Meaning, to reach $1 million, you cut your way to $1 million. You cut vacations and cable. You stop buying coffees on the way to work. You skip dining out and eat ramen at home with the lights off instead.

More on this below…

But first, I want to focus on the other way, which is making more money. Because my guess is that 70% of people who are in their current jobs are perfectly qualified and capable of getting a higher-paying job.

A lot of people don't really consider leaving their jobs, though—not until they’ve reached the point of maximum pain because they're so miserable.

Maybe you’re in this boat and don't realize that your bargaining position is much better than you think. If you’re a productive employee and valued within your company, your employer really doesn’t want you to leave.

Focus on the Revenue Side

In 2001, I had a $45,000 annual salary. Now, I could have focused on cutting expenses. I could’ve said, “I’m going to stay at $45,000 a year and cut my way to $1 million!”

But that’s lunacy.

Instead, I focused on the revenue side, and in six years I was making $850,000 a year. Okay, not everybody can make that jump. I get it. But cutting your way to $1 million is typically not the solution.

Of course, cutting expenses can help—at least in areas that move the needle. But first, you should determine whether your income aligns with your worth.

Are you a top performer? If so, can you demand a raise? Or will another company pay you more than you’re currently making? These are all questions you should be asking yourself. Because chances are, you could be making more.

What Moves the Needle

It’s still important to mind your expenses. Some economic sacrifices are worthwhile, such as your house and your car.

No, you shouldn’t give up your house and your car. That’s not what I mean.

What I'm talking about is many people have too big a house with too big a mortgage. So, you're paying too much interest. You have tens of thousands of dollars going out the door.

Many people also own cars that are too expensive, and they’re paying thousands of dollars in interest on their massive loans.

The average person in the United States makes around $50,000 a year. The average person in the United States has $11,000 in credit card debt and pays $2,000 in interest a year on that debt.

So, let me ask you something: What would you rather do? Would you rather give up coffee for five years, or would you rather not pay that $2,000 in interest?

Focus on big luxuries first. Not the pee-wee stuff that doesn’t move the needle.

Jared Dillian