The Psychology of Producing Cash Flow

How Hunger, Curiosity, Creativity, and Courage Help

Photo by Austin Distel on Unsplash

The greater your income compared to your expenses, the greater your positive cash flow. My article aims to reveal that your mindset, thinking, and behavior are significant drivers of cash flow. That may seem obvious to many readers. However, there are millions of people wondering what they could do to improve their income and create more cash flow.

Cash Flow Is

My father always told me that cash flow is the key to successful businesses, households, and people who understand the fundamentals of success and personal finances, if not business finance. As long as you can keep the positive cash flow going at home or in a business, you can work to improve yourself and your financial success. My father was a massive advocate of life-long education, and that was long before we knew much about neuroplasticity.

Cash flow is your income minus expenses. It’s either positive, break-even or negative. Your income leads to your quality of life in many senses. Income sources depend on several factors, primarily employment or earned income. Here are the primary sources of income.

1. Employment income. This is the most common source of cash flow for those who earn a salary or wages from their job.

2. Self-employment income. Self-employed people who own businesses generate cash flow by selling goods or services.

3. Investments. Income from investments such as stocks, bonds, mutual funds, and real estate can also generate cash flow from dividends and options.

4. Rental income. People who own rental properties generate cash flow through rental income from tenants.

5. Side hustles. People often engage in side hustles, such as freelance work or part-time jobs, to earn additional income. Many artists, musicians, and creative people earn income by selling their creative talents.

6. Government benefits. Some people receive income from government benefits, such as social security, disability payments, or unemployment insurance.

7. Gifts or inheritances. Individuals may receive cash flow from gifts or inheritances from family members.

8. Private loans. Some people generate income by lending their money to others. Some loans are unsecured, meaning there is no collateral for the loan. Others are secured, where there is recourse in the event of a default or non-payment.

Overall, people's primary sources of cash flow are generally related to earning income from employment, investments, or business ownership. Everyone must manage their cash flow carefully to ensure enough income to cover their expenses and achieve their financial goals.

The Psychology of Sales and Cash Flow

Mindset and character are crucial for creating cash flow whether you’re on a career, professional track, or self-employed. Let’s use the example of salespeople who sell products or services as their primary source of income.

According to data from Glassdoor, the average base salary for a sales executive in the United States is around $75,000 per year. However, total compensation, including bonuses, commissions, and other incentives, can range from around $45,000 to over $200,000 per year.

Let’s compare the median annual wage of all workers in America. According to data from the U.S. Bureau of Labor Statistics (BLS) for 2021, the median yearly salary for all occupations in the United States was $45,050. Half of all workers earned more than this amount, and half earned less.

Therefore, the salesperson makes 67% more income than the worker. And that doesn’t account for compensation beyond the average base salary.

Why do salespeople make significantly more than the average worker in America? It’s the value they offer to their employers and the competition to find, hire, and retain top-selling employees and contractors.

It’s not that salespeople are worth more as human beings because they’re not. They’re worth more in the marketplace because of their skill and value to the employers willing to pay.

Readers say, “But I’m not in sales and valuable, too! What the heck are you talking about?”

To Sell Is Human

I suggest that even if you’ll never see yourself as a traditional salesperson, there’s something to be said about the psychological and behavioral characteristics of salespeople that could help us increase our income and possibly our cash flow by keeping our expenses low.

One of the most outstanding books on improving your value in the workplace is "To Sell Is Human," by Daniel Pink. Pink suggests that even if you don't consider yourself a salesperson, you still engage in sales-related daily activities, such as persuading others to see things from your perspective, convincing someone to take action, or influencing people to adopt your ideas.

Here are some of the top keys to success in sales that Pink suggests, even for those who don't like sales:

1. Focus on serving the customer. The most successful salespeople focus on serving the customer's needs rather than their own. By understanding the customer's pain points and offering solutions, you can build trust and establish a strong relationship.

2. Focus on improving yourself. The most successful salespeople, like leaders, tend to be active readers and accelerated learners. They are hungry for knowledge and new skills to increase their competitive advantage and value in the market.

3. Practice active listening. Active listening means paying attention to what the other person is saying and seeking to understand their perspective. This can help you identify their needs and tailor your sales pitch accordingly.

4. Be honest and transparent. Being honest and transparent builds trust with your customer. Admitting when you don't know something and being willing to find out can also show that you are committed to serving the customer's needs.

5. Embrace rejection. Salespeople face rejection regularly. Instead of fearing rejection, embrace it as an opportunity to learn and improve. Analyze what went wrong and use that knowledge to refine your approach.

6. Cultivate resilience. Sales can be challenging, and resilience is essential in the face of setbacks. The same could be said for any job or role. Resilience is crucial. Learn to bounce back quickly from rejection and maintain a positive attitude.

7. Be hungry, curious, creative, courageous, and committed to doing your best. Successful people are constantly learning and improving their skills. Read books, attend seminars, and seek feedback to keep growing and evolving.

Remember, even if you don't consider yourself a salesperson, the ability to sell and communicate your value is essential in today's world. If you have a negative perception of sales and salespeople, shift your point of view and see selling as “helping people get what they want.” In other words, live by the Golden Rule and begin with yourself.

By focusing on serving the customer, practicing active listening, being honest and transparent, embracing rejection, cultivating resilience, and continuous learning, you can become a more successful employee, worker, or salesperson, regardless of whether you like sales. It’s all about your mindset and perspective.

Characteristics That Produce More Cash Flow

Using sales professionals again as our example, let’s look at the characteristics that set them apart from their peers. Furthermore, these attributes can help everyone improve their odds of getting a raise, promotion, new job, or breaking into their own business.

Here are some of the most important characteristics to consider for producing more income and cash flow:

1. Strong work ethic. Top sales professionals are highly motivated and committed to achieving their goals. They are willing to put in the time and effort required to succeed.

2. Excellent communication skills. Successful sales professionals are great communicators who can articulate their ideas clearly and persuasively. They are adept at building rapport with clients and establishing trust.

3. Active listening. Top sales professionals listen actively to their client's needs and concerns. They ask probing questions to understand the client's pain points and tailor their approach accordingly.

4. Strategic thinking. Successful sales professionals are strategic thinkers who can develop and execute a comprehensive sales strategy. They can analyze data, identify trends, and anticipate customer needs.

5. Emotional intelligence. Top sales professionals have high emotional intelligence, can read clients' emotions, and respond appropriately. They are empathetic, adaptable, and able to build strong relationships.

6. Resilience. Successful sales professionals are resilient in the face of rejection and setbacks. They have a positive attitude and can bounce back quickly from setbacks.

7. Curiosity. Top sales professionals are curious and always looking to learn more about their clients and industry. They are open to new ideas and constantly seek to improve their skills.

8. Results-driven. Successful sales professionals are highly results-driven and focus on achieving their goals. They can prioritize their activities and are persistent in pursuing their objectives.

9. Focus. Successful sales professionals understand the power of focusing on their ideal customers, following a consistent sales process, and providing excellent customer service.

Learn from top sales professionals who are highly motivated, strategic thinkers with excellent communication skills, emotional intelligence, and resilience. They can build strong relationships with their clients and are results-driven, always focused on achieving their goals. And with a burning desire, true hunger, you can, too.

In conclusion, cash flow is a critical component of personal and business finance, and many factors, including income sources, expenses, mindset, thinking, and behavior, influence it. While sales professionals are known for generating high income and positive cash flow, everyone can benefit from adopting their characteristics and mindset.

By focusing on serving customers, improving communication skills, active listening, strategic thinking, emotional intelligence, resilience, curiosity, results-driven mindset, and focus, you can enhance your value in the workplace, boost your income, and achieve your financial goals.

Building a solid work ethic, learning continuously, and committing to doing your best are essential to creating and maintaining positive cash flow.