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The Psychology of Earning income




Author of ‘Practical steps to financial independence’ and personal finance coach, Usiere Uko, writes on how to earn more from our income 

Many self-employed individuals believe that since they are earning income from their business, their job is done. They feel they are secured, especially when their business is going well and they don’t depend on others (like employees do) to earn income. So rather than reinvest some of their profit, they spend it all.

For many, growth means status upgrade – buying a better car, moving to a better neighbourhood, sending your children to more expensive schools, going for more exotic holidays etc. You can know when they have money because their spending pattern changes. Neighbours will say ‘their money has come’. I knew a guy who was using public transport with his family for years and then suddenly, ‘his money came.’ He bought four cars and started changing them like suits. I suspect someone must have annoyed him, so he is ‘showing them.’

The current economic hardship has brought to the fore one sad fact – people’s income was not earning income. They were essentially living from hand to mouth; even accountants and bankers who seemingly should know better. Many have become stranded because they lost their jobs or their business is down.


Some three years ago, I asked the question ‘are you a hunter or farmer?’ A hunter goes out to kill what he can and brings it home to consume, and then goes hunting the next day. A farmer grows and multiplies what he already has. He does not have to go hunting before he can eat. A farmer builds on what he has and diversifies while the hunter consumes all and creates nothing. A farmer can determine the size of his harvest while the hunter depends on hope and luck – factors outside his control.
No matter your source of income, if your income is not earning income and growing, chances are you have a hunter’s mentality. When the bush catches fire, you are in deep trouble.

The issue is your mindset
We have many excuses for not doing what we need to do. Rather than devise means to overcome constraints; we look for excuses to remain stuck in our comfort zone. There will always be challenges. I remember when banks started rolling out ATM machines, many people, especially those who have travelled abroad, laughed with scorn at such audacity. ‘Where are they going to get 24 hour electricity to run the machines?’ they scoffed.

They concluded it was impossible that it cannot work here. They were proved wrong. Again when the former Central Bank Governor introduced the cashless policy, professional critics had a time of their lives online and on social media bashing the idea.

They wondered where the Point of Sales machines and electricity to power them would come from. The CBN went ahead and did it anyway.

Many are snoring on top of their dreams and aspirations because they are waiting for 24-hour electricity. Many believe that the moment we have 24-hour electricity, ingenuity will jump on us and the economy will boom as everyone goes to work. I tend to disagree.

I have seen communities next door to oil facilities with 24-hour electricity and life goes on normally. Nigerians abroad have access to 24-hour electricity and another set of excuses. I am not saying we don’t need stable electricity. It will be a big boost to those already doing something. However, using it as an excuse for doing nothing is very lame.

If you cannot save the little you have, chances are you will not be able to save when you have much. You will attempt to save no doubt, but the effort will not last, as your consumption pattern or habit will catch up with what you are trying to save.

 Developing a new mindset
Without a new mindset, all you have are excuses. There are many ways of developing a new mindset. It ranges from reading / studying, meditation to positive peer pressure. Depending on your circumstances, positive peer pressure could be the quickest way to change. Our standards are a direct reflection of the expectations of our peer group. Show me your friends, I will tell you who you are. If you move with people that are prudent, have big dreams, save and invest, your consumption mindset will stick out like a sore thumb. Two cannot move together unless they agree. It is either you pull them down to your level or they push up to their level. That is why it is very critical to choose our friends wisely. You are stuck with your family but you have a choice of who your inner circle is. If you lie down with dogs, you get up with fleas, period.

Beyond your excuses (and I am sure you have very good ones), you can do what you really set your mind to. Where there is a will, there is a way. You may not see the way now. Your old mindset is blinding you. If you could see the way, you would not be where you are today. You would have made progress. Doing the same thing you have been doing, will produce the same results which keep you right where you are. It is a new mindset that will break that vicious cycle. That is why arguing with someone with a fixed mindset is often a fruitless effort. He cannot see what you are seeing / saying because he has refused to move from where he is standing to try and see what you are seeing. Imagine telling someone ‘come and see something’ and she refuses to move. How will she see what you are talking about from where she is rooted (like a tree)?

Change comes when you have had enough of where you are standing. When you decide enough is enough, you are ready to change. Often, experiencing massive pain or pain of embarrassment helps move you to this place. Until then, there will always be excuses to keep doing the same thing, hoping tomorrow will be a better day.

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