5 Psychological

Traps Holding
You Back From
Earning More
How to Uncover and
Destroy the 5 Invisible
Barriers Keeping
You From Making
More Money
By Ramit Sethi
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Table of Contents
Welcome . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
How to recognize invisible scripts in your life . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Trap #1: I need to gure things out rst before I decide to
earn more on the money. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
The Solution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Trap #2: Starting a small side business would be great, but
good business ideas are SO hard to nd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
The Solution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Trap #3: I should try to make passive income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
The Solution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Trap #4: Ill never get a raise in this terrible economy. . . . . . . . . . . . . . . . . . . . . . . . . . 12
The Solution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Trap #5: My salary is non-negotiable. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
The Solution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Thanks for reading . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
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I dont usually watch Bollywood movies, but when your Indian mom asks you to do
something including watching a movie (matinee of course), getting the mail from
the mailbox, or buying her a car you do it. Anyone with an Asian/Indian mother
is nodding right now, fearful of the earth-shattering guilt trips that mothers have
relentlessly honed over decades of surgical use.
Anyway, as I was watching this Indian movie, I started realizing how many invisible
assumptions it revealed about Indian culture. I call these assumptions invisible
scripts.
As I took a step back and thought about the American movies I watch all the time, I
realized that these movies also reveal a tremendous amount about our own culture.
Invisible scripts are so deeply embedded that we dont even realize they guide our
attitudes and behaviors.
And thats how, over time, these scripts can become dangerous psychological traps
that hold us back.
What, exactly, are the invisible scripts that govern our lives -- and how do they turn
into traps?
Welcome
Ramit Sethi is a New York Times bestselling author and the
founder of I Will Teach You To Be Rich, which hosts over
500,000 readers every month. His personal nance and career
advice has been featured in The Wall Street Journal, CNBC,
FORTUNE, NPR, CNN and ABC.
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How to recognize invisible scripts in your life
Can you recognize the invisible scripts guiding your
life? Most of us cant.
For example, Renting is just throwing money away
every month. Buying a house is the best investment
you can make! (This isnt true, but weve heard it so
many times that its become an invisible script.)
Theyre called invisible scripts for a reason -- and the
traps that they become cant be resolved by simply
thinking positively. In fact, these scripts are so subtle
theyll usually pass through your mind completely
undetected -- all the while inuencing what you think,
say and do. That what makes them so dangerous.
As you can imagine, any invisible script you adopt
has the power to shape your life tremendously --
especially when it comes to earning more money. Over
time, certain negative scripts become traps, and their
power to hold you back increases signicantly.
After years of research and hundreds of thousands
of data points from talking to readers like you, Ive
discovered the 5 specic traps that most frequently
hold us back from earning more money. But they dont
have to if you know how to move past them.
Now, Im going to uncover these traps for you --
and Im going to show you the exact strategies for
destroying them one-by-one.
I asked my readers to tell me
some of the invisible scripts that
had guided them throughout
their lives, and they came up with
over 150 incredible responses.
Heres just a brief sample of what
they reported. Do you recognize
any of these in your life?
Go to grad school and get
your graduate degree as
soon as you can because
learning always get harder
with age!
If you want to start your
own business, its better to
wait till you have worked
at a corporate job at least
a couple of years
Courses and all those
skill learning things (such
as Earn1K) are SCAMS
Public transportation is
only for poor people.
Having more facebook
friends means more
people like me.
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Trap #1: I need to gure things out rst
before I decide to earn more on the money.
We think more information alone will change everything.
Its such a deeply embedded belief, it becomes a psychological trap.
We even hear these scripts from professors and so-called experts! Give people
information so they can make the right decision.
We internalize the idea that information alone will
help us change, and we start saying things like, I
need to gure it out... and I need to get all my
ducks in a row before I start....
But the truth is, information alone is one of the
WORST ways to change our behavior. We already
KNOW what we need to do. Do you think an
overweight person doesnt KNOW they need to eat
less and work out more? Do you think someone in debt doesnt KNOW they need to
stop overspending and automate their payments?
Once you internalize the idea that information alone wont change your behavior, you
start to see it everywhere. We hear phrases like the more you know and believe that
just one more morsel of information...just one more insight...will change everything.
But weve been snacking on those information tidbits for years, and very little has
changed.
When consuming more information doesnt work, we shift our attention to learning
new tactics.
Theres just one thing we forget: By focusing on tactics, were doing exactly the same
thing we did LAST YEAR! And the year before, and before that...
Information
alone is one of
the WORST ways
to change our
behavior
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After we try a few tactics, and they dont work, we blame ourselves. Im just not
motivated right now, we say. Its really busy at work for the next few weeks.
Ironically, trying these tactics -- which were doomed to failure, anyway -- makes us
less likely to succeed over the long term.
What are we missing here?
The Solution: Get Out of Research Mode
This comfortable belief -- that we just need more information -- actually keeps
people from taking action and learning from REAL, PAINFUL mistakes.
As we get older, we stop exposing ourselves to new areas where we might fail...and
retreat behind our computer screen to read about them. How many of us read blog
after blog every morning...then do nothing?
Think about learning to ride a bike. Did you study the mechanics of the bike and read
diagrams on how to cushion yourself when you fell? Of course not. You got out there,
started riding, and fell down. Then you did it again and again.
So whats the best way to get of the sidelines, stop researching and nally take
action?
I like to use a technique Jef Bezos, CEO and founder of Amazon.com uses: Its called
the Regret-Minimization Framework, and it basically says, Will I regret not trying
this when Im 80 years old?
Top performers know success isnt just about tactics or more information. If it was,
everyone would be t, wealthy, and happy! After all, the information is out there --
free!
They dont lean back on the same mental crutches that most people use: They know
research is important, but its just one small part of being successful and happy. They
dont chase magic bullets.
And neither should you.
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One of the best ways to increase your earning power is to start a side business to
bring in extra money. In my Earn $1K on the Side course, Ive taught thousands of
students how to successfully create a side income stream that brings in at least
$1,000 per month (and often much more).
Still, one of the biggest psychological traps beginners fall into is the false notion that
good business ideas are hard to nd.
Usually, this psychological barrier comes in one of several varieties:
I have no idea what skills I have that people would pay for.
I have lots of great ideas - new ones every week - but Im not sure how to even
start turning them into money.
Every idea that I think of has already been done somewhere else. I need
something original.
I start idea after idea, but I never follow through. What should I do to stick
with one idea?
If youve ever tried to start a side business, then ran into one of these traps, youre
not alone. But how do you overcome them?
The Solution: The Pay Certainty Technique
Starting a business can be confusing, full of self-doubt and misres. But you dont
have to worry about coming up with many good ideas in order to nd one that sticks.
In fact, all you have to do is nd one protable idea. Just one.
Then, build a side income around it.
There are several several tools and techniques you can use to understand what youre
Trap #2: I dont have a business idea.
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already good at. But oftentimes, the protable skill is something close to home. In
fact, sometimes, youre so good at something -- it comes so naturally to you -- that
you dont even realize its a skill.
First, take an inventory of what you know youre good at, what other people tell you
you excel at and your general interests. Where do all of those lists intersect? How can
you use one of your skills to solve a problem people already have?
If youre not sure, dont worry. You can check if your
idea is protable idea BEFORE you spend months!
(Almost nobody realizes that they can pre-test an
idea for protability before taking the leap.)
This sounds basic but is actually a totally diferent
approach than most people take.
One of the best ways you can determine if your idea
is worth pursuing is by employing a very simple
principle I call The Pay Certainty Technique. Start
by asking two questions about the prospective
customer:
Do they have the ability to pay?
Do they have the willingness to pay?
You can use it right now.
Consider a freelance web designer who wants to know who he should try to sell his
services to.
You know how a lot of web designers dont know who theyre serving, so theyre just
serving everyone? Or you have web designers who will say: Oh, I want to go do web
design for nonprots..and they almost never make any money? Thats because they
havent used something like this.
But what if you say: Hey, I want to nd a small business in the automobile industry
that needs an improved design to sell more cars. Oh, and they have to do revenue
between 100k 500k a year.
Almost nobody
realizes that they
can pre-test
an idea for
protability
before taking
the leap.
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Do they have an ability to pay? Yes, they make 500k a year.
Do they have the willingness to pay? Yes, they want to make more money. Theyre
willing to pay a little bit. They pass The Pay Certainty Technique.
THAT is how you start niching it down..and thats how you quickly nd a good idea
that you KNOW will work.
And if you use The Pay Certainty Technique and youre still having trouble coming up
with a good idea, use my free Idea Generator Tool to get you started.
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Trap #3: I dont want to work for my money.
I want passive income. Thats what Warren
Bufett does.
Many of us are deterred from creating a second stream of income because
we assume that it will just bring the additional stress of another job. So in our
desperation, we stay up until 3am watching scammy infomercials or clicking on
banner ads, hoping to stumble upon the fabled passive income secret.
The truth is, if you ask most of these passive chasers how much they earn, theyll
quickly start stuttering: Uh, well...this month Im still growing, so uh...
In other words, would you rather earn $0.52/month passively...or $500-$5,000/
month actively?
I understand the appeal of passive income:
You dont want a second job. You already work hard enough. The thought
of coming home, exhausted, and having to work on a second job isnt too
appealing...no matter how much you make! But you know you need to do
something diferent to change your situation -- otherwise youll always be
stuck here. So how can you get over being exhausted and overwhelmed?
The idea of passive income is exciting. Lots of people talk about it. The
ability to travel to Thailand for 3 months or work from the beach in Argentina.
The joy of waking up in the morning and seeing how many sales you got while
sleeping. Who wants to trade time for more work?
But the bottom line is that youre still stuck where you are. Now what?
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The Solution: Increase Your Active Income
I love when people talk about passive income because you can tell they have no idea
what theyre talking about. Its kind of like trying to identify people with bad taste:
Just go to the local Hometown Bufet. Theyre all there.
I have a lot of friends making 6- and 7-gure
incomes. Some of them even make it passively. All
of them work harder than you would ever imagine,
even the passive guys. In order for me to go on a
3-week vacation and make money passively, it took
nearly a year of building systems, hiring people, and
systematically testing how far we could push it to
remove me from day-to-day management.
I hate to say it but most of us dont need to focus
on passive income, we need to improve our active
income our jobs.
How? By becoming more skilled, solving more
problems for our bosses, and basically out-hustling
co-workers. Then, negotiating our salaries,
automating our nances, and freelancing along the
way.
A lot of people dont like to hear this because it means that instead of reaching for
some dream of $500/day in passive income, they actually have to do some work
right now at their jobs. But outperforming others at your job, negotiating your salary,
and starting a freelance business are the best ways to signicantly increase your
income.
I have a lot of
friends making
6- and 7-gure
incomes.
Some of them
even make it
passively. All
of them work
harder than
you would ever
imagine
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Trap #4: Ill never get a raise in this
terrible economy.
In the last few years, the media has hammered it into us: Theres a national recession.
You should be lucky to have any job at all!
Most of us simply accept what we read in the mass media, which is produced for
the LCD -- lowest common denominator. We believe that companies dont have the
money to give us a raise. We believe that even asking for a raise could be grounds for
termination. Thats what they want the LCD to believe.
I dont give a damn about the LCD. Im not writing this for people who are content
to their their 3% cost-of-living raise and shufe quietly back to their cubicle, just
thankful that they have a job at all.
Im writing this for people who want to understand the game thats being played
around them.
The truth is, theres a lot your boss isnt telling you.
The Solution: How Companies Really Think
About Money
Ive been on both sides of the negotiating table many times. Ive negotiated my
compensation as an employee and consultant, and Ive had my staf negotiate against
me.
Let me share the biggest insight from having those two very diferent perspectives:
$5,000 or $10,000 means nothing to a company, but it means everything to you.
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Lets assume your current salary is $60,000. That
means your company is paying around $100,000
fully loaded, when they include taxes, health
insurance, benets, furniture, and everything else.
And thats just for junior people!
If your company employs 10+ people, theyre likely
doing at least 7 gures in revenue -- often many,
many times that. $5,000 is nothing to a large,
medium, or even small company! They do not want
to lose you over a few thousand dollars. Thats
pocket change to them.
Companies spend an average of approximately $6,000 recruiting new college
graduates. As you get more and more senior, that number increases. Factor in
training and onboarding, and your company has already spent well over $10,000 just
in hiring you.
Keeping their business running is far more important than counting pennies to them
-- and for most companies, thats exactly what $5K or $10K is equivalent to.
Curious about the exact words to use when asking for a raise? Watch this free video
where I reveal the exact, word-for-word script.
$5,000 or
$10,000 means
nothing to
a company,
but it means
everything
to you.
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Trap #5: My company wont let me
negotiate my salary.
Most of us dont negotiate -- with our bosses, our clients, even our cable companies.
We know were leaving money on the table, but were not sure what to say. We dont
want it to be awkward. And what if they say no?
So we create reasons not to negotiate, like:
Negotiate? In this economy? I should just be lucky to have a job.
I need to get more experience before I negotiate.
I just joined this job 6 months ago... it would look bad to ask for more now.
But negotiating your salary is the easiest way to instantly increase your earning
power -- often by as much as 20% - 100% in a matter of minutes.
We cant let psychological traps stand in the way of learning such a life-changing skill.
The Solution: Think Like a Top Performer
Top performers know that if you do it the right way, negotiating your salary actually
makes you more attractive to your employer. When you use the right phrases and
mindset, you can convince your boss to give you a raise -- and hell be happy to do it.
If you go home at 5pm and never contribute anything useful to your workplace
beyond your basic duties, you should stop reading this and close the window.
Yes, the economy is tough. But that means top performers are valued even more now
because companies want to hold onto the best people who are helping them stay
competitive.
To overcome your mental barriers around negotiation, rst you need to shift your
mindset to that of a top performer.
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While average performers feel that they have no options and are afraid to rock the
boat (what if they re me for trying to negotiate?), top performers know they
always have options and that great companies are always looking for top performers
-- so its actually in everyones best interests to negotiate.
Remember, youve already been hired. The company already invested thousands of
dollars to recruit and train you. If they lose you, they not only lose everything thats
in your head -- but they also have to go out and spend more time and money to nd
and train somebody else. Its a huge hassle.
You are valuable. They dont want to lose you.
As a top performer, when you go into the negotiation room with the correct mindset
and a well-researched approach, your salary is always negotiable.
If you really want to accelerate your skills, Ive created a free 1-Day Negotiation Mini-
Course for you. Enjoy!
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Thanks for reading
I hope you enjoyed this book on psychological traps keeping you
from earning more money. Deciding to overcome these barriers
can be one of the most powerful choices youll ever make.
If you know someone who would enjoy or benet from any of
these strategies, please feel free to forward this guide to them.
If youre interested in learning more techniques or strategies to
earn more, improve your career or live a better life, you can join
my free newsletter, where I send out new material every week.
And dont forget to write me an email and let me know which
psychological traps you overcome. I read every email.
Thanks for reading,
- Ramit