We all want to make more money and at the same time have more freedom. Generally people think that in order to make more money you have to work harder and work more hours. An hourly worker thinks in terms of putting in overtime, sales people think in terms of getting in front of more customers, while lawyers and doctors think of obtaining more clients.

This is all a middle-class mindset, where your income is dependant upon how much you can do in a single day. Unfortunately, there really is only so much one person can do and only so many hours in a day. You can sleep less, work through lunch and give up your weekends to squeeze every extra minute out of life to earn more money, but is that really the way to live?

There is a magic formula that can allow you to work less and make more money. It’s the same formula that the ultra wealthy live by. It is also the same reason that building your own business is the key to achieving financial freedom. That secret formula is leverage.

Leverage allows you to use tools and other people’s resources to get more done for you. When you use leverage, you are able to get 10 times the amount of work done and make 100 times the amount of money.

Let’s say you work at a bakery that pays you $0.10 for every donut you make. On a good day, you can create 5 donuts a minute, which allows you to make about $30 an hour, but you also need to make the dough and take regular breaks. One day you discover a machine that will allow you to automatically make 50 donuts a minute. The machine will cost you $2,000, or about a two full weeks of pay after taxes.

You immediately think that this machine costs way too much money and you just can’t afford it, but then you meet another donut maker who is a multi-millionaire, but hardly works a day in his life. You ask him how in the world he does it, and he tells you that it took some time, but it was all through leverage. Here’s how:

1. He sacrificed a little bit at first to come up with the $2,000 to buy the machine.
2. The machine, which makes 50 donuts a minute, allowed him to quickly make back his initial investment since he is now making $300 an hour as opposed to $30 an hour.
3. Since the machine is completely automated, the money he made allowed him to purchase a second machine, and then another shortly thereafter.
4. Soon the millionaire owned 10 machines, making $3,000 an hour, so he decided to hire a couple employees to run and maintain all of the machines.
5. Now he is able to run the machines 24 hours a day with 3 shifts of employees, and is making over $50,000 a day after paying his overhead and expenses.
6. The millionaire donut maker hasn’t actually made a single donut himself in over a year, but has exploded his income through the power of leverage.

Millionaire Money Habit: Find a way to produce an income that can be automated and then scaled. When you can tap into the power of leverage, your income potential can become limitless.

One way to improve your net worth is to increase your income so you can stash away more money in long-term investments. So can a graduate degree help you boost your pay?

When I look at some of my friends that went on to get a masters degree or PhD, it seems that all they did was increase their debt by taking on more student loans. Those that are receiving higher salaries have only a bachelor’s degree or no degree at all. Most these high-income friends are business owners, successful investors or have a commission-based sales job.

But does that picture say it all? Can you increase your salary and not just your debt?

According to the Bureau of Labor Statistics, those with higher educational degrees od make more money annually and have a lower unemployment rate. This average income data is from a 2006 survey of full-time earners that are 25 years and over:

According to the results from this survey, it does pay to obtain an advanced degree in your profession. While the numbers initially do not seem staggering, over the course of a year they do add up. The difference amounts to almost an extra $10,000 a year for someone with a bachelor’s degree that goes on to get a master’s degree.

If that person with a bachelor’s degree continued on to get a PhD, they would make an extra $25,000 a year. Over the course of a lifetime, that adds up to an extra $750,000 for someone who is 35 and retires at 65.

Even though this does not take into consideration the cost of education, your employer may offer a program to pay for your tuition and fees if you are seeking an advanced degree for your current profession. And according to this survey, once you have that higher degree you are more likely to find and keep a job.

But what about wealthy people who never graduated from college or with only a bachelor’s degree?

Having an advanced degree does not guarantee that you will make more money, and it certainly is not the only way to create a high income. There are countless stories of high-school dropouts who went on to become self-made millionaires, or even billionaires.

As evidence from high income people I know without degrees, many of these non-degree holding millionaires have become successful by building their own businesses. This, though, did not come without risks, effort and costs. While the sky is the limit when it comes to generating cash from a profitable business, the success rate is not in your favor. Obtaining an advanced degree, however, offers a high likelihood that you will earn a respectable income level the rest of your life.

Millionaire Money Habit: An advanced, graduate degree is always a wonderful opportunity that looks great on a resume and allows valuable opportunities to network. But make sure you advanced degree will increase your salary and not just put a gold star on your resume, or you could get caught in more debt and not necessarily more income. The skills you will develop from your educational experience will help you achieve more no matter your professional, financial or personal goals.