This is a guest post from ESI of ESI Money, a blog about achieving financial independence through earning, saving, and investing (“E”, “S”, and “I” — get it?). It's written by an early-50s retiree who achieved financial independence, shares what's worked for him, and details how others can implement those ideas in their own lives. (Note: ESI is also the owner of Rockstar Finance, the leading curation site for top personal finance articles.)
You've heard it a million times before: To build wealth, you have to spend less than you earn. It's a great piece of advice — one of my favorites, actually. Too often, however, people take this to mean simply “control your spending”.
While your spending is certainly part of the equation, there's an equally-important component: your earning.
Here's what I think a lot of people miss: It's easier to spend less than you earn when you earn more. It's also easier to reach your financial goals. From my experience, the best way for most people to earn more is to grow their careers. Today I want to show you five ways to grow your career so that you make more money and enjoy greater job satisfaction.
The Case for Career Growth
I know, I can hear the collective groan.
For myriad reasons, many people dislike advice about growing their careers. It's probably because so many hate their jobs.
I get it. I've been there myself.
But I also understand that there's a paradox between hating a career and achieving your money goals. If you hate your job so much that you don't want to focus one extra second on it, you will actually prolong the time you need to work — the very thing you hate so much!
Instead, if you put a bit of time and effort into growing your career, you'll end up making millions more (literally), hitting your financial goals earlier, and (very likely) enjoying your career more.
If I were able to give you a few, simple, easy-to-implement tips to help you achieve this, would you be interested?
How Can I Be So Sure?
Before we get to the tips, let's address the elephant in the room: How can you be sure that the Bozo writing this piece can actually deliver?
In all honesty, you can't. But I do have a few accomplishments that might give you some confidence:
- Personal experience. I was able to grow my income by 8.16% per year throughout my career. Obviously people have done much better than this, but 8%+ isn't too shabby over almost 30 years. If you don't believe what a huge impact this can make, pick a starting salary and increase it by 8% each year for 28 years.
- Corporate experience. In addition to managing my own career, I saw countless colleagues and subordinates managing (or, mostly, not managing) theirs. I eventually became the president of a $100 million company, supervising the careers of hundreds of people. So along the way I learned a bit about growing your career, how to get ahead, and how companies view employees.
- Education. There are thousands of books (and millions of web pages) about career management. I've read many of them and tried a variety of techniques. I will say that most of them are virtually worthless, but there are some nuggets of wisdom that I've applied and learned from.
- Millionaires do it. I've interviewed over 30 millionaires (and more on the way.) Almost every one of them has developed a high income by applying the skills below which have accounted for a large part of their success.
The good news is that you can do even better than I did. It took me decades to come up with the tips I'm about to share. Most of them were discovered in the school of hard knocks by trial and error. You can cut out the pain of failure and get right to doing what counts.
You can also skip the thousands of tips you might gather from here and there. Simply apply the five steps below and you'll get most of the impact for a fraction of the work.
With that said, here are the five tips you can use in 2018 to grow your career…
Step One: Be Proactive
You may think this is not a tip, but it's actually a very important start. Proactivity is required for career success. (If you read last week's article from J.D., you probably undertand that becoming proactive is the key to success in nearly every aspect of your life.)
Based on my observations, there are three types of workers in the world:
- The “go-with-the-flow-ers”. These people do their jobs and mind their own business. They take whatever comes their way job-wise — the good and the bad. These can be great people, of course, but their careers are going nowhere with a que será será attitude. Go-with-the-flow employees get go-with-the-flow raises and promotions. And let me tell you, those are not high. Even if these people are high performers, many companies will take advantage of them with low raises until they say something — which they won't because they are going with the flow!
- The “work hard-ers”. These folks simply “work hard and let their efforts speak for themselves.” This strategy has the potential to provide a good outcome as sometimes companies will recognize good performance. But it's hit and miss for two reasons:
- Often these people work hard on things the company won't reward them for. Sure, they are putting in the effort, but it's misdirected and the company couldn't care less.
- Companies generally want to pay people as little as possible. So even people that work hard and perform often get basic raises. Why pay them more if they'll keep working hard no matter what?
This plan of action simply leaves too much to chance. My experience is that maybe one in ten workers who try to “work hard” achieve even a decent level of success and just one in one hundred make a significant impact on their careers.
- Those who are proactive. These people get noticed. They get direction. They make things happen that the company wants to have happen, manage the process, and as a result they get paid more and promoted. This is why being proactive is a vital first step for anyone who wants to earn more.
What does it mean to be proactive?
First, it's a mindset. You need to realize that no one cares more about your career (and its financial impact) than you do. So you have to do something if you want something good to happen. No one else is going to do it for you.
Second, once you have the mindset, you need to take action. What action you should take brings us to the next steps on our list…
Step Two: Discuss (and Document) Expectations
Let's say you hire a guy to mow your lawn. He charges $30 for the service. In exchange for his work, he expects you to pay what you promised. In exchange for payment, you have certain expectations of him.
You certainly expect him to cut the grass. You might also expect him to either bag or clean up the clippings. You might also expect him to edge the lawn.
If he does these things, you feel fine giving him $30. You expected him to do certain things, and he did them. You expected to pay him $30 and you did. All expectations are met and the payment is given. Everyone is satisfied.
Now let's say instead of just cutting the grass, cleaning up the clippings, and edging the lawn he does even more. He goes above and beyond. Let's say he also trims your bushes, fertilizes the lawn, and pulls weeds.
In this case, you love what he's done because he's done more than you expected. You are happy to pay him $30. In fact, if he wanted more (i.e., raised his rates at a later date), you'd probably pay it because he did way more than expected.
On the other hand, let's say the lawn guy didn't do what you expected. He mowed the grass but left a mess with the clippings and didn't even try to edge. Maybe he did some other tasks he thought you would appreciate but didn't — like rearranging your gnome family yard decorations.
In this case, you feel like your $30 has been wasted — at least in part. He did not meet your expectations (or even come close). Will you hire him again? Maybe, if you have to. But you certainly won't pay him more. In fact, you may ask for a discount next time.
The same performance expectations that you have for the lawn guy (and the way you evaluated him) is the same sort of relationship your company has with you.
They hired you at a given pay rate and expect you to do certain things for that pay. If you do more, they are open to paying you more. If you do less — or you do the wrong things — they certainly don't want to pay any extra. They may even fire you.
This then begs the question: What does your company expect from you? That's the problem: Most people don't know. They have a vague idea, at best. Sure, the company might have a job description that some HR person crafted five years ago, but those are often so weak that you can't ascertain anything tangible from them.
So how do people usually react to this situation? They guess. They make assumptions about what the company wants, how it measures success, and so forth.
And often they guess incorrectly. They might get some things right, but the chances of getting the full scope of what the company expects from you (as well as the level of expectation) by simply guessing is virtually impossible.
So what should employees do? It's simple: They should ask their boss what she expects.
I won't go through the step-by-step process of how to do this because I've already provided details elsewhere, but here are the highlights:
- Set up an appointment to talk with your boss. During an annual review is a great time.
- Tell her that you'd like to get specifics on what she expects you to accomplish.
- Tell her the reason that you want to know these is that 1) you want to be working on what she feels is most important and 2) you want to be sure you're delivering the results she wants.
- Next, have a conversation about her expectations. Get her to be as specific as possible and quantify whenever possible. “Grow sales” is worthless since you don't know what you're shooting for. “Grow sales 5% over last year” is specific and something you can use.
- Write down the details as you discuss them, and agree on expectations. This is a back-and-forth discussion, and your input should be part of the process. For example, if your boss says she expects you to “grow sales by 50%” and that's not reasonable, you need to manage the conversation and agree on an attainable (even if challenging) goal.
- Tell her you'll record these in an email and send for her review just to be sure you got them all right.
- Write them down later and send to your boss for approval. Adjust as needed until you get the ok.
Before I go further, let me say that your boss will love you for doing this. She'll probably be blown away by your willingness to ask and listen to her. She'll also be impressed that you want to know what the company wants so you can deliver it. I know that the handful of times someone did this with me, I was thrilled to work with them and to follow up later.
After the conversation, you know exactly what is expected of you. You also have it in writing. There's no room for error or misunderstanding at this point.
Next, it's time to make things happen.
Step Three: Over-Perform
Now that you know what's expected, is this what you strive for? Nope. You strive for more! Why? Because the company is already paying you to do those expected tasks! If you want to be paid more, then you have to do more.
Go back to the lawn guy. Would you be willing to pay him $50 if he just did what you expected? Of course not! You were willing to pay more only if he did more.
Those who do just what's expected get basic raises — and they're lucky to get those. They're already being paid to do their jobs, so why pay more for just that?
But for you, the proactive career-manager, it's time to get to work. You need to over-deliver compared to your expectations.
How do you over-deliver? Here are some examples:
- If your goal is to “grow sales 5% over last year”, aim to grow them 8%.
- If your goal is to “cut costs by $100k this year”, cut them by $125k.
- If your goal is to “sign up 50 new customers”, sign up 75.
You get the idea. Simply do more than what you and your boss agreed was expected.
As you accomplish these goals, don't assume your boss is aware of how you're over-performing. She's a busy person too and has her own goals to accomplish, so she might not be following your progress that closely. That's why you need to regularly remind her.
There are several ways to do this: as part of regular reports, in one-on-one meetings, at team meetings, and so forth. I used to do a weekly update via email that listed my expectations (the ones we agreed on) and what I was doing to hit them. I included numbers/data so it was clear that I was doing more than expected. I knew it and my boss knew it.
This way you will both be on the same page — you'll regularly remind her of what's expected as well as how you're accomplishing more than that.
Once you over-deliver (which usually takes several months or years), it's time to schedule a meeting, show that you've accomplished more than expected (this shouldn't be new news to her), let her know you can do even more, and ask for a raise.
Whether you deserve a raise or not should be a no-brainer by now. You deserve one! The only questions left should be how much of a raise you'll get and when you'll receive it. Asking for more during an opportune time like the annual budget planning process works best as it can be cooked into the numbers from the get-go. Mid-year raises aren't unheard of, but can often be more difficult to secure since budgets often aren't flexible.
Once you have the raise it's time to start the process over again with new, higher expectations.
Step Four: Be Likable
Here's a news flash: Nobody gets ahead alone. You need people to help you — those above you, below you, and at your level. And the fact is that people help others that they like. (By the way, people give raises to those they like, as well.)
Some studies suggest that being liked at work has more impact on being successful (and making more) than actual job performance.
Brazen Careerist author Penelope Trunk explains this issue thusly:
People would actually rather work with someone who is incompetent and likable than competent and unlikable. Most people nod in agreement when they read this. It's the unlikable people who form arguments in their head.
But there's more. At work, if you are unlikable, people start thinking you are less competent. So stop thinking you can skate by on your genius IQ because you can't. You need emotional intelligence as well. This situation is so pronounced that there are special-education classrooms rife with kids who could read when they were three. Social skills matter as much as intelligence when it comes to long-term success, even for the geniuses.
The truth is that both performance (over-delivering) and being likable are important. You don't want to choose between the two — you want to be both a high-achiever and a person people like.
How can you be more likable?
There's no clear science on how to make people like you, but here's a simple guide that I've seen work for most people in most cases: Treat people like they want to be treated.
If you do this and put others before yourself — if you're nice, helpful, considerate, and simply a pleasant person to be around — people will like you and your career will benefit as a result.
I also suggest reading a couple books:
- How to Win Friends and Influence People is full of tried-and-true wisdom on how to become more likable and benefit as a result.
- The Seven Habits of Highly Effective People — one of J.D.'s favorites here at Get Rich Slowly — talks about the emotional bank account. Be sure you make more deposits than withdrawals.
For those introverts out there, don't worry. You don't have to be the life of the party or a social butterfly to make this work. You don't have to be Mary Poppins or a back-slapping good ol' boy. Simply be friendly and thoughtful. It will go a long way in making you likable.
Step Five: Develop Your Talents
It's a fact of life that having certain skills can significantly increase your earning ability. It's also a fact that you likely won't be world-class in any of them. By definition, only a small minority can be world-class at any one thing.
But you can develop a high level of competence with a unique combination of valuable skills. This collection of abilities makes you very unique — and valuable.
For instance, you probably won't be the best salesperson in the world. Or the best negotiator. Or the best public speaker. Or the best analyst.
But you could become an executive with solid skills in sales, negotiation, public speaking, and analysis. Most people don't have anywhere near this skill set and thus having it makes you very valuable.
Dilbert creator Scott Adams calls combining skills like this “building a talent stack“. Here's how Adams explains what he means by a “talent stack”:
It's the idea that you can combine normal skills until you have the right kind to be extraordinary.
Understanding how a talent stack works is important. Normally, people think that success comes from developing talent in one skill. This works well in some fields. In medicine, the natural progression is to pick a specialty. In sports, you train to become best in your field, like Tiger Woods (golf) and Michael Jordan (basketball). In acting, you develop the best acting chops, like Robert De Niro and Morgan Freeman.
But besides becoming world-class in one skill, talent can come from having a unique stack of skills that no one else has. You can utilize different skills to create value in a way no one else can, thus becoming one-of-a-kind in your own league.
This concept is absolutely true. I've seen it play out again and again in my career and the careers of countless others.
So, you need to work on developing your talent stack. But how do you do this? How do you become proficient in specific skills?
You need to educate yourself and work on the needed skills. Here are some ideas:
- Take classes. You can either pay for useful college courses yourself or many companies will cover these costs.
- Seminars/workshops. Again on your own or company-paid. My companies sent me to time management, sales, and public speaking classes — on their own dime and during work hours. These skills benefited me throughout my career and in my private as well.
- Read. Books are great (and free at the library). My preference is finding trusted sources online and learning from them.
- Listen. Audiobooks can be checked out at the library and podcasts are free. Both can be listened to during down times like driving to and from work.
- Volunteer. Charitable organizations will often allow you to take on projects that your company might think you're not ready for. These can serve as great learning experiences.
- Cross-functional teams. Volunteer at work to be on a team that includes several different disciplines. You can learn all about marketing, sales, finance, operations, and more.
- Take on a special project. Ask your boss for a unique assignment. I did this a few times in my life and learned a ton every time.
Be proactive on developing your talent stack. Concentrate on those skills that most relate to higher pay. When you do you'll become more valuable because you'll be able to do and accomplish more. And as we've seen, those who do more than expected, get paid more.
That Sounds Like a Lot of Work
By this point, you may be thinking that these five “simple” steps seem like a lot of work — maybe more than you're willing to put in.
If so, I'd like you to consider the following before you dismiss them:
- To accomplish anything meaningful, you have to put in effort. If you're unwilling to do so, you're likely going to be limited in several areas of your life.
- Much of the work above can be done while at work, requiring no additional time commitment on your part.
- Some of the work (like educating yourself with podcasts and audio books) can be done while doing something else — driving, exercising, mowing the lawn, etc. Again, there's no additional time commitment on your part.
- The financial rewards can be staggering. As noted above, the math clearly shows that you can make millions more over your working lifetime by proactively managing your career.
- The time results can be staggering too. Earning more means you can save more, which leads to faster financial independence. Combine a strong income with even a modest side hustle and you can retire in ten years — at least a decade or two before you might otherwise.
- As for any costs, investing in your career offers one of the best returns available anywhere. Who wouldn't invest a few thousand for returns of hundreds of thousands?
Even with this compelling evidence, some will find excuses why they can't (or shouldn't) take action. There's not much I can do about them; they're not likely to take action no matter how great an opportunity exists.
But for the rest of you, don't let a few, minor challenges dissuade you. The time and effort is minimal, especially when compared to the reward.
The Brick Wall
It's worth mentioning that it's possible to take all of the steps above, do them well, and still get nowhere. Even when you do everything right, you can hit a brick wall — a company that doesn't recognize accomplishments or a boss who isn't supportive. There's no doubt that a situation like this is frustrating. (Thankfully, most bosses and companies aren't like this.)
If you hit a brick wall, don't despair. Your hard work is not lost. But you need to go back to step one and be proactive about managing your career.
If you've done all the above and still get nowhere, you have two choices:
- Stay put and simply grind it out at your current job/company
- Look for other opportunities either in another part of the company or with another company
This is a personal decision, so the brest course of action will be up to you.
I had to face just such a decision on several occasions.
Four different times during my career, I had to decide either to take it or move on. In each case, I ultimately decided to move on. In two of those instances, I had to stick it out for two more years before finding a better opportunity. It paid off in the end, though, because I found much better jobs each time. But I had to be patient. You might have to be patient, as well.
The career-focused work I completed while waiting prepared me to perform at an even higher level in my next job. This, in turn, allowed me to start the new company at a much higher salary and deliver results above expectations for years to come.
That said, in nine out of ten cases you won't have any problems. If you apply the steps in this article, your compensation will increase and you'll enjoy your job more.
And your net worth will certainly thank you for the results.