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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.
The best way to grow your income is to increase your career income. For this, you should work to improve your human capital.
There are several ways to grow your primary income. Some of them are easier than others. And some of them are best applied to some fields but may not work in some areas. Unfortunately, there are no simple get-rich-quick ways to increase your income. It will take time and commitment. But if you are committed to increasing your income, you will get a better salary.
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; you should not leave your work for private errands; and of course, you should perform your duties efficiently and produce excellent 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. For example, if your company is in a bad financial situation, the odds of getting a raise are pretty bad. On the other hand, if you just got a good review or delivered a nice new product or service, it may be a perfect time to ask for a raise.
As to how 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 an excellent job in the last year and exceeded 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 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 it would take for you to get a raise. Also, ask for what reasons he refused your raise. 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 way to increase your income.
2. Get a promotion
Another solution to earn more is to get promoted.
A salary raise always accompanies a promotion. It is more challenging to get a promotion than a raise. However, the idea remains the same. You need to make sure you are a valuable asset to 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 need to focus on making your manager’s job easier. He needs to be able to trust in your work and your abilities. You need to be an example for the entire team. And you need to be proud and committed to 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. Of course, it is not always true. But it is almost always the case. Therefore, one way to get a significant raise is to become a manager, if you are not one already.
Becoming a manager is quite different from getting a promotion in your current job. In most companies, this is a different job. You will have to manage people. Being a manager is not for everyone. I would not want to become a manager. But some people like it a lot.
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 (a director).
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 an education. So 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 human capital. Therefore, there is no point in taking a course unrelated to your company or your field.
Today, there are several ways to get more education while not leaving your day job. For example, you could get some online courses in your field. Or you can take some evening lessons. But, of course, you will have to invest some time 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 fast. So it may be precious 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. Work more efficiently
If you want to be more valuable to your company, you may have to work more efficiently.
In several fields, there are many people able to deliver the same quality. But some of these people can deliver at a much higher pace than others. If you can do twice the amount of work of your coworkers, you may become very valuable. And once you are valuable, you have more leverage to increase your income.
There are many ways to work more efficiently. Many techniques will depend on your field. But here are some general tips on getting more things done:
- Avoid distractions. This tip is essential since you want to work without interruptions and be focused on your work. Do not check your phone or social media while you are working.
- Get organized. If you are well-organized, you will have an advantage over many people. One methodology I like is the Gettings Things Done (GTD) methodology.
- Work Deeply. Try to aim at long uninterrupted periods of work. These periods are where you are going to do your best job. The Deep Work Book explains this very well.
If you work on these tips, you will be able to get more things done. And this may lead to you being more valuable and your company paying you more.
6. 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.
Looking for another company has another advantage. If you find an excellent opportunity but want to stay in your company, you can use this as leverage. For example, 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 advise you to 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.
7. Move to another country
The most extreme change you can do to grow your income without changing jobs is to move to another country. There are substantial differences in salary between countries. For instance, in Switzerland, several jobs are highly paid, 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.
Although this may result in a substantial increase in income, it is a fundamental change. You will have to leave your friends and family behind and move to another country. Also, you may have to learn a new language and new laws and rules. Doing so is a big commitment.
However, this can have a 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 the country you are moving to. 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.
8. Change careers
Another way to raise your income is to change careers.
If you like your job, I do not think it is a good idea to change the job just for the income. If you do not like your job, however, this could be an excellent 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 the job to grow your income. First, you need to make sure you can increase your revenue by doing that. Then, 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 your job to grow your income unless you are sure about it. It is a significant change, and it is difficult. But it could be worth it.
As you can see, there are various ways to grow your primary income.
I do not recommend you get a job that you do not like because it is paying well. I prefer to have a good job first, then work on increasing my pay. Having a terrible atmosphere or lousy work conditions will pull you down. Working like 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 essential for me. But in the end, the choice is always up to you!
Working on my career is the primary way I plan to increase my income over time. I think the returns on investment could be excellent in the long term.
In these sections, I have talked about increasing your salary. However, you may also try to get new advantages. Getting Restricted Stock Units (RSUs) from your company is excellent. If you can participate in an Employee Stock Purchase Plan (ESPP), you will also get some 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!
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 primary income?