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We already discussed whether you should spend less or grow your income. The answer was that ideally, you should do both to reach Financial Independence (FI) faster. In this post, I am going to focus on growing your career income. There are other ways to grow your overall income such as side hustles or real estate investment. But I am not going to cover them in this post. I am also not going to talk about starting your own company. I will only cover your main career income in this post.
There are several ways to grow your main income. Some of them are easier than others. And some of them are best applied to some field but may not work in some fields. There are no simple get-rich-quick ways to increase your income. It will take time and commitment. But if you are really committed to increasing your income, you will get a better salary.
In the next sections, I am going to talk about increasing your salary. However, you may also try to get new advantages. Getting Restricted Stock Units (RSUs) from your company is very good. If you can participate in an Employee Stock Purchase Plan (ESPP), you will also get some very interesting extra income. You could get your company to participate in your fees for commuting or your health insurance fees. Or you could get a better pension plan. There are many other things that you could get. You need to look at the bigger picture!
1. Ask for a raise
The first obvious solution would be to ask your manager for a raise. If you have not had a raise in a long time, this may be a good time to do it. Or if you feel that other companies are paying more than your current income, you can use this argument as well.
Of course, a raise needs to be justified. If you want a raise, you should work accordingly. You should come to work on time, maybe even early. You should not leave your work for private errands. And of course, you should perform your duties efficiently and produce good quality service (or goods). If you are a good employee and are valuable to your company, you will see that getting a raise is often not as difficult as you think.
Ask for a raise if you deserve one!
You also need to make sure that it is a good time to ask for a raise. If your company is in a bad financial situation, the odds of getting a raise are quite bad. If you just got a good review or delivered a nice new product or service, it may be a very good time to ask for a raise.
As to how you much you should ask, this is a difficult question. It will highly depend on the situation. If you feel you are strongly underpaid compared to other similar companies, you can ask for a raise accordingly. If you did a good job in the last year and are exceeding expectations, four to five percent is generally a good raise. A ten percent raise is only for exceptional work. But this also highly depends on your company and your field. And it also depends on how much you really are valuable to the company.
Finally, if you ask and get told no, do not despair. There may be good reasons for you not getting a raise. Ask your manager what would it take for you to get a raise. Also, ask for what reasons your raise was refused. If you have a good manager, he will explain this to you. Then, you have to decide if you want to follow the offered path or if you want to choose another path to increase your income.
2. Get a promotion
Another solution to earn more is to get promoted. A promotion is always accompanied by a salary raise. It is more difficult to get a promotion than a raise. However, the idea remains the same. You need to make sure you are a valuable asset for your company. To get a promotion, you need to do more than what is expected of you. You need to show some initiative. You need to show that you want to do more and that you are capable of doing more.
In some companies, you cannot get a promotion without becoming a manager or a project manager. In that case, it may be a different story to become a manager than to get a promotion and keep the same kind of job. On the other hand, in many companies, there are several levels of jobs before the manager. So you can get a promotion without becoming a manager.
As I said, the basic concepts on how to get a promotion are the same as asking for a raise. However, you may need to do some extra courses or extra work to get a promotion. In some companies, it is not very difficult to get a promotion, especially the first one. But in some companies, it is almost impossible.
You really need to focus on making your manager’s job easier. He needs to be able to trust in your work and in your abilities. You need to be an example for the entire team. And you need to be proud and committed about your work. At some point, you will have to tell your manager that you want a promotion. You may not need to ask for it directly. But let your manager know that you are willing to do more to get a promotion.
3. Take on more responsibilities
Most of the time, managers have a higher salary than employees under them. It is not always true. But it is almost always the case. Therefore, one way to get a large raise is to become a manager, if you are not one already. This is quite different from getting a promotion in your current job. In most companies, this is actually a totally different job than your current job. You will have to manage people. This is not for everyone. I would not want to become a manager. But I can see the appeal for some people.
If you are already a manager, you can also probably become a higher-level manager. Many companies have several levels of managers. You could become a manager of managers.
Once again, you need to prove that you are valuable to your company. In that particular case, you need to prove that you will be more valuable as a manager than in your current position. You will probably need to take a few courses and pass several interviews. Make sure that this is what you want. Not everybody is made to be a manager.
4. Improve your education
A lot of time, getting more education can help you get a raise. Of course, this will take you a lot of time and you may have to pay to get the education. You have to decide if the investment is worth it. And of course, you need to take an education that is valuable for your company. You want to get more money by improving your education. Therefore, there is no point in taking a course totally unrelated to your company or your field.
Today, there are several ways to get more education while not leaving your day job. You could get some online courses in your field. Or you can take some evening lessons. Of course, you will have to invest some time into and some money. There are also some ways to get more education without courses. For instance, you could start a side-project or read some specific books. But this is harder to prove to your manager as extra education.
Not only can you extend your education to get a raise. But you can also refresh it. Some fields (computer science for instance) are evolving really fast. It may be very valuable to refresh your skills by learning some new techs. Or familiarize yourself with some new technology that is trending. Or if you know of a new technology that could benefit your company, learn a lot about it and propose it to your manager to improve on the current system.
5. Change company
Even though you may like your company, it may not be the one paying you the most. Sometimes, some companies are highly underpaying compared to others in the same field and the same region. Sometimes, you may start with a good salary but your salary is not growing as fast as it could be in other companies. It is often worth it to check offers even though you have a good job. You may find an even better job with a better salary.
This has another advantage. If you find a good opportunity but wants to stay in your company, you can use this as leverage. You can try to negotiate to get a raise or new advantages or you may leave the company.
To find a new company in the same field, you need to get information about how much other companies are paying. Sometimes you can find that information online. Of you may contact someone from inside the company if you have contacts. If your goal is to get the highest salary, you should pick the one that pays the most. But I would advice to also consider a good job as well. There may be some companies that are paying more but have much worse work conditions. Once again, you need to put everything in the balance before you decide.
If you decide to apply to a new company, you will need a strong resume. The Money Mix has a great article on how to make a Killer Resume! A strong resume can go a long way in securing a very good opportunity!
6. Move into another country
The most extreme change you can do to grow your income without changing job is to move into another country. There are very large differences in salary between countries. For instance, in Switzerland, several jobs are highly paid and yet there are not enough candidates from Switzerland. As a result, many people are coming to work in Switzerland. Software Engineer is a good example of that in Switzerland. Many of my colleagues are not Swiss.
Although this may result in a very large increase in income, it is a very important change. You will have to leave your friends and family and move to another country. Also, you may have to learn a new language and new laws and rules. This is a big commitment.
However, this can have some very positive impact on your income. Depending on the country you are leaving and the country you are joining, you can expect from 50% to more than 100% increase. Of course, do not forget to consider the cost of living in the country you are moving too. Switzerland may pay well, but the cost of living here is quite higher than in most countries. Do not forget to put that into the balance as well.
7. Change job
Another way to raise your income is to change job. If you really like your job, I do not think it is a good idea to change the job just for the sake of the income. If you do not like your job, however, this could be a good occasion to pivot. However, this is the most complicated of all the ways to increase your income. Indeed, you may need to start an education again. Or you may need to start lower in the other job to hope for better growth.
Once again, there are many things to consider if you want to change job to grow your income. You need to make sure you can actually grow your income by doing that. If you need to take more courses, you need to make sure that this is a good return on investment. I would not advise you to change job just for growing your income unless you are really sure about it. It is a big change and it is difficult. But it could be worth it.
As you can see, there are various ways to grow your main income. Personally, I do not advise you to get a job that you do not like just because it is paying really well. I prefer to have a good job first then work on increasing my pay. Having a terrible atmosphere or bad work conditions will definitely pull you down. This is not healthy. But some people will advise you to get the highest paying jobs to work fewer years to reach Financial Independence (FI). Balance is really important for me. But in the end, the choice is always up to you!
My personal case is not exactly the same. I changed to a new company this year. I got a very large salary increase. But before, I was employed by my school as Ph.D. student. Once I finished, they did not offer me anything interesting. And Pied Piper offered me some very interesting conditions. So I joined them! I did not exactly change the company for more income.
Personally, I do not plan on getting a raise this year. However, I am going to work towards getting one for next year. I am already going to do my best to show my value to Pied Piper this year. And hopefully, this will be picked up by my manager. But this is talk for the future I am going to talk about this again when I set my goals for 2019.
If you want to find another way to grow your income outside of your career, you can read these great ways to grow your income.
To learn some tips about salary negotiation, watch these six tips:
Did you manage to grow your income these last years? Do you know other ways to increase your main income?