My questions are in bold italics and their responses follow in black.
Let's get started...
Tell us a bit about yourself (age, marital status, kids, where you live, etc.)
I am 32 years old, married and have 2 kids with one on the way. We live in the northwest of Chicago in an upper middle class suburb (median income of $84,180)
What do you do for a living?
I have spent my entire career in software development and currently serve as a software development manager. My wife is a high school teacher.
How much do you earn annually?
I can earn up to $123K and my wife earns another $80k.
How does this amount break down (salary, bonuses, etc.)?
I have a base salary of $112K with a potential 10% bonus tied to company and personal goals.
Do you receive any additional compensation/benefits from your employer (401k match, stock options, etc)?
My company matches 50% of the first 6%. My wife receives no match in her 403b. Her union negotiated contact provides great costs for good health care so that is multi-thousand dollar benefit.
How long have you been working?
I hit 10 years in May of 2013. My wife has been working for 7 years.
How long have you earned at least six figures?
Right around 3 years.
What have been the key steps you have taken that have allowed you to earn this level of income? (Please provide as much detail as possible).
The most important part to doing it so quickly has been picking a career that has a high salary ceiling. Not to say it can’t be done but this would be a very different story if I was a social worker or something more liberal artsy. After picking your career, you need to find an employer that you can excel at. My first job was just a job. There was no desire or feeling of ownership in what I was doing. That mindset would never allow me to excel and deliver the results needed to get big percentage salary gains. I waited until I had 3 years of experience (a magic number in software development) and looked for a new opportunity. It was at this job that my salary growth took off. This environment was more collaborative. This allowed me to voice my opinions and ideas which raised my profile. I slowly became someone my peers and colleagues could depend on and would come to with their problems. This gave me a leg up when there was an opportunity to be a manager.
Which of the following career advancing strategies did you employ (if any) and which were most effective: a. Doing well within your current company and being promoted. b. Jumping around from company to company always seeking a higher salary & responsibility. c. Entirely changing your career path from a lower earning field to a higher earning field (going back to school, etc).
Making the jump from my first job to my second provided a 50% increase in pay. This was a combination of my first employer paying below market and my second employer paying well. The 6 years at my second job provided just shy of 100% salary growth. This is due to 8-10% raises my first couple years coupled with the 20% or so bump I received when I became manager.
What are you doing now to keep your income growing?
My current employer is a Fortune 500 company and I am now in the realm of 3% raises for eternity. If I really outperform, I could possibly get 3.5-4%. I’m fairly confident the 8% raise is out of the question at this company.
What are your future career plans?
I am the point in my career where I am looking for something to create and call my own. I have dabbled in the app store and currently have an app for sale. I think it has generated $200 in 2 years. Good thing it was more for learning and growing my skills than for earning potential. I always have ideas for bigger, grander apps but it’s hard to spend 8 hours programming every day and then another 2-3 after the kids go to bed. I will eventually figure this part of it out but for now, I’m good with the rather stress-free role I am in now (at least for a year)
Have you been able to turn your income into a decent net worth?
As of September 21, 2013, my net worth (including primary residence) sat at $461,962.70. Considering I was <$60k 5 years ago, this is really good. My goal is to be at $1mil by the end of 2021 (40 years old). If my contribution expectations are met, I only need modest market gains to get there.
Why or why not?
To go along with excellent salary growth, I had a spectacular 5 year run in the stock market. On top of that, I had a few large one time payments from my 2nd employer for various reasons. These totaled over $100K in extra earnings.
A quick tangent but my belief is that people early in their career should concentrate on their contribution rate and not so much on their total net worth. This is especially important early on. Remember, the first million is harder than the second. The fastest way to get to the first million is to contribute more.
What advice do you have for people wanting to grow their incomes?
First, set realistic expectations for your salary ceiling. Research what median salaries for your profession in your area are. Once you’ve come to terms with that, then you can start working towards it. As a manager, there are two main characteristics I’m looking for in a stand out employee.
1) Ask for tasks that will challenge you. No one who just “does their job” ever received an outsized raise. You need to show that you are worth more. You don’t want to be the “solid” employee. Solid employees don’t get fired but they don’t stand out. If you are afraid of failing, ask for help. A good manager and company will provide you with the support to stretch beyond your comfort zone. If you are in a place that doesn’t allow for failure, find a new place to work.
2) It’s a little cliché but “invest in yourself”. In my scenario, I learned how to program for the iPhone and iPad. This was a personal choice and something I leveraged in my career. I feel employers should pay for training but wanting training is different than learning and providing something useful to the business.
3) I know I said 2 characteristics but I thought of one more while finishing this up. Retain what you learn ON THE JOB. So many people will work through a problem, learn all about the issue and then not be able to help at all if a similar problem arises. Become a “go to” person.