Why You’re Still Underpaid (Even If You’re Great at What You Do)

THE BRUTAL TRUTH ABOUT MAKING BIG MONEY

Like playing chess, painting, or writing novels, making money is a SPECIALIZED SKILL.

But for some reason, we view and treat the skill of money-making differently. No one complains when a few people surpass all the rest at playing chess, painting, or writing novels. But when a few people make more MONEY than the rest, we get editorials and protests saying this is WRONG.

Why is this? The pattern of effort and skill variation is no different than for any other skill. So what causes people to react so strongly when the skill is MAKING MONEY?

The Bank of Mom & Dad Trap

I think the biggest factor is what I'll call THE B-of-MD TRAP or THE BANK OF MOM & DAD TRAP.

When you're five years old, you think the electric sockets create electricity. You don't realize there are power plants somewhere out there generating the actual electricity. Likewise, it doesn't occur to kids that wealth is something that has to be created. It seems to be something that just flows from parents.

Because of how children encounter it, they tend to misunderstand wealth. They confuse it with money. They think there's a FIXED amount of it, and they think of it as something distributed by AUTHORITIES rather than something that has to be CREATED.

Because kids are unable to create wealth, whatever they have has to be GIVEN to them. And when wealth is something you're GIVEN, then of course it seems it should be DISTRIBUTED EQUALLY. Like their insistence on the same number of presents at Christmas.

The Fixed Pie Illusion

They come to see it as a FIXED pie—that there's only so much to distribute. Thus, there's a fixation on doling it out "fairly." If one sibling gets more than another, they cry "Unfair!" and insist on equality.

And they carry this FIXED pie perception and need for "FAIRNESS" out into the real world. But in the real world, wealth is something you have to CREATE. The pie is NOT fixed—it's ever-expanding. And it's NOT something distributed by B-of-MD, the government, or your company.

Since the effort and skill to CREATE wealth varies from person to person, it's NOT created equally. Beyoncé, Ed Sheeran, and Taylor Swift can fill coliseums, while other equally hard-working musicians can't fill the local pub. Stephen King, JK Rowling, and James Patterson can sell hundreds of millions of books when other authors can't even get a book deal.

The Market Reality

You get paid by doing or making something people WANT. And those who make more money are often simply BETTER at doing or creating what people WANT. People HATE hearing that. But that's the reality—like it or not.

In the U.S., the CEO of a large public company makes about 100 times as much as the average person. Basketball players make about 190X as much. Baseball players 93X as much. The media quotes these statistics with HORROR. Is one person really 100 times as productive as another? Evidently, yes.

Steve Jobs saved Apple when it was in terminal decline. He turned it around into the most valuable company in the world. Was Steve worth more than 100 times as much as the average Apple employee? Considering the delta between bankruptcy and Apple now being a THREE TRILLION dollar company? Um, yeah. I think so.

What People Really Want

When we say one kind of work is OVERPAID and another UNDERPAID, what are we REALLY saying? In a free market, prices are determined by what buyers WANT.

Is it right that a person who plays a game all day should earn millions when the average worker makes tens of thousands? It's saying, evidently, people like sports more than poetry. So athletes make more than poets.

To say that certain work is "underpaid" and "unjust" is saying that people want the wrong things. And I say... Are you new here? Of course people want the wrong things! It would be naive to be surprised by that.

Question yourself: Have you watched more Netflix than read Shakespeare lately? Have you scrolled Instagram more than read poetry? Have you watched more sporting events than visited museums? Um, yeah, exactly.

Your Value Creation Strategy

So what do we take from this? Besides a healthier perspective about money, income, and wealth creation:

1. Embrace the Abundance Mindset Instead of viewing wealth as a fixed pie to be distributed, see it as an ever-expanding creation where you can have as much as you want by applying ability, innovation, and effort.

2. Accept Market Reality You don't have to like it or agree with it—you only have to deal with it. Your earnings will be proportional to the VALUE you bring to the human marketplace.

3. Focus on What People WANT I'm continually amazed at how many people pursue what THEY are "passionate about" without clear eyes to see what people really want. People are transparent—they tell us what they want by what they BUY.

Here's the thesis for market success: Give people MORE of what THEY WANT.

If you want more income, increase the VALUE you bring to the marketplace. If you want a raise, increase the value you DELIVER to your employer. If you want to raise your prices, increase the value you DELIVER to your clients.

It's as simple (but often forgotten) as that.

Ready to charge what your value is ACTUALLY worth?

You've increased your value. You deliver exceptional results. But when it comes to pricing conversations, do you freeze? Discount before they even ask? Explain and defend instead of stating with confidence?

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👉 Your turn: What's stopping you from charging what you're really worth? Share in the comments.

#BeTheException