I’m an ultra extra mega super-duper wooper positive kind of guy. I’m the guy that always looks for the positive in every situation. I don’t see the glass as half-full. For me, it’s completely full, half with water and half with potential!
But there are some people who are the pessimists. They look for the negative in every situation. They see the glass not as half-full, not as half-empty, but they see the glass as half-empty with a chip on the rim and this water’s not cold enough!
I recently encountered one such person on a train. She was sitting a few seats back from me and talking rather loudly. As she spoke to the person she was with, the whole carriage got to hear her take on just how terrible the whole world is how life in general is just so unfair.
Her main gripe seemed to centre around how hard and unfair life was for people like her, and that how sports people, celebrities and the rich had everything so easy. As she continued her dissertation, she explained that it was outrageous that such people made so much money for doing what they did. They, she explained, were no better than she, she worked hard and was just as deserving. How could anyone justify these people making so much when she made so little?
As I sat there listening to all of this unfold, without even consciously thinking about it, the thought came into my mind, it’s just like Hot Dog money.
What I mean by that is the money that these sports people, celebrities and super rich make is the same money that she makes, the same money that I personally make, and the same money that you make. It’s all Hot Dog money. In other words, we’re all paid equally, commensurate with the value that we bring to the world.
Don’t Believe Me?
Suppose for a moment that you had a Hot Dog Cart on a street corner. You want to make as much money as possible right? Well, one way to do that is to cut down on expenses. So you cut all your expenses down to a bare minimum.
You categorise everything that you currently purchase into 2 categories. Essential and Extras. In the Essential column, you would basically just have Hot Dogs and Hot Dog Buns. That’s all you really need to sell Hot Dogs right?
Then you have all the Extra’s. These are things that are not absolutely essential. Things like napkins, sauces, mustard, drinks. You could potentially sell Hot Dogs without any of these things, after all, people are really only paying to get a Hot Dog on a Hot Dog Bun right? The money that you save by not buying all these unnecessary things, means more money to you right?
Or Does It?
The problem is that a lot of people like having sauce or mustard on their Hot Dog, a lot of people would like a napkin with their Hot Dog and a lot of people may want a drink as well. So if you’re not offering these options, then you’re leaving the potential for another Hot Dog Cart to open up down the road. Suppose another Hot Dog Cart opens up down the road and they give people their Hot Dog with a napkin. The give people sauce, and they can sell drinks too.
All of a sudden, people realise that if they go down the road, they can get the same kind of Hot Dog, but with a napkin, sauce and mustard, all for the same price. If they want, they can buy a drink too. So they all start going down the road. Your sales start to plummet, and so does your profit.
The guy with the Hot Dog Cart down the road is making heaps of money because he’s doing a roaring business. His overhead expenses are more than yours because he’s buying all the napkins and sauces that he gives to people without charging for them. But BECAUSE he does that, he gets heaps more customers and makes heaps more money.
So, you start to learn a valuable lesson. That is, in business, you want to keep your overhead expenses as low as possible to maximise your profits. However, there are some things, like napkins and sauces for example, which are not absolutely essential but are nonetheless worth spending money on because they will boost your overall sales and hence boost your profits.
Well this principal, I call it The Neill Andrew Law of The Hot Dog Money, applies to any business. You want to keep your expenses low, but sometimes there are things that are worth spending money on because it increases your sales.
Say you’re the CEO of a major Rugby League Club. You’re paying players hundreds of thousands of dollars, in some cases millions of dollars. But like any business, you want to keep the money you pay your players as low as possible. You could offer them $30,000 per year. But the problem is other Clubs will offer them more. The best players, will attract the best money.
Same goes for celebrities. Why would a TV station offer a celebrity hundreds of thousands or millions of dollars to appear on TV? Why not pay them $30,000? Because someone else will offer them more.
Why is this the case. Well, it’s the case because all of these CEO’s are firm believers in The Neill Andrew Law of The Hot Dog Money. They all want to make money. The best way for a TV station to make money is to increase ratings. Then companies will pay more to advertise with them instead of their competitors because more people will see their add.
The best way for a Football Club to make money is to win as many games as possible. They’ll get more people come to the games to watch, so their revenue will go up. They’ll get more of the prime-time games on TV, so they’ll make more money from sponsors, because sponsors will pay more to have more people see their brand.
All of these CEO want to keep salaries as low as possible, but they know they need the best talent in order to produce the best results. So they’ll pay the talent as much as need be in order to prevent the talent from going to their competitors.
Does That Make Sense?
No TV station is going to pay a celebrity $1 Million when another celebrity can pull the same ratings numbers for $800,000. But if you have a celebrity making $800,000 and someone else offers them $1 Million and you can’t find anyone else that can bring in as many ratings numbers if they leave, then you’re going to have to offer them at least $1 Million to stop them from going to the competition. So again, the CEO will pay them as low as possible to stop them from going to another station, even if ‘as low as possible’ is $1 Million. That’s the same reason why some top CEO’s will make tens of millions each year or more and top sports stars in the US and Europe will make hundreds of millions each year.
The same goes for me personally. At the moment, I currently charge $900 for my Platinum Coaching Program. People want results in their life and they want them at the lowest possible price. No one in their right mind is going to pay me $900 to coach them if they could find a Coach for $800 that would get them the same results. How come so many people pay me $900 to Coach them? Well because that’s the lowest price they can pay to get the results that they want. If they pay someone more and they only get the same result, that’s a waste. If they pay someone less but can’t get the results they want, they’ll pay me more instead because they want the results. And I’m certainly not the greatest Coach to have ever lived. There are some Coaches out there who can charge $5,000+ for a coaching package because they’re better than me. Want Tony Robbins to personally coach you, it’s going to cost over $1,000,000, that's if he agrees to take you on.
So where does this leave that delightful woman on the train?
Well, just like you and me, celebrities and spots stars from across the globe, she also gets paid Hot Dog Money. If she went to her boss and asked for a raise, and the boss said no, what is happening there is the boss is really saying to her, “I don’t care if you leave, because if you leave I can get someone to do the same work for the same price. Your leaving won’t affect my profitability”.
When I think of my time in the Corporate World, that’s exactly how things work in most corporations. All people with the same Job Title don’t necessarily make the same money. It’s a total meritocracy. They’re all paid based on the value that they bring to the company. If you’re leaving would have a negative impact on the profitability of the company because you’re so good at what you do, then they’re going to pay more to keep you there. If they don’t, someone else will.
So what does this mean for you? Well, this is actually really good news. Because it means that we get to set our own wages. We’re all paid Hot Dog Money. If you go to the boss and ask for a raise and they say no, it means they can get someone else to do the same work for the same price if you leave, so why would they pay more. If you want more, all you need to do is increase your worth to the company. If they WORRY that you might leave, it means you, and YOU PERSONALLY, are valuable to the company. If you leave it would adversely affect their profitability. If you leaving would cost the company $50,000 because they can’t get anyone to do the same work as you for the same price then even if they paid you an extra $40,000 per year more than you’re making now, it’s still a great investment for the company. Paying you $40,000 extra isn't going to COST them an extra $40,000, it’s going to SAVE them $10,000 because they’d be down $50,000 if you left.
So if you want to earn more, all you have to do is increase your value to the company. Work for yourself? Increase the value that you deliver and people will pay more for it. So ask yourself this question, are you happy with the Hot Dog Money that you’re receiving at the moment. If not, then what are you going to do about it?
Leave your answers in the Comments section below….