Here's the latest in my series of six figure interviews, discussions with everyday people who have grown their incomes to at least $100,000 annually.
My questions are in bold italics and their responses follow in black.
Let's get started...
Tell us a bit about yourself.
I am 35 (spouse 41), with no children, and we live in a high COL state in New England.
What do you do for a living?
I work in the insurance industry as a statistician/business analyst/predictive modeler. This is a slight shift from my previous position as more of a reporting analyst/SQL programmer/database developer, which also paid well. The data management skills are very compatible with the stats skillset. It helps to be able to pull your own data without having to rely on others. I am an individual contributor with no direct reports.
How much do you earn annually?
I earn about $125k annually, not including stock bonuses.
How does this amount break down (salary, bonuses, etc.)?
About $105k is base salary, with another $20k average as cash bonus (this is only because I have consistently been ranked as a high performer - employees with a lower performance ranking get lower bonuses or no bonus at all), and sometimes extra stock on top of that as a long-term incentive bonus. The stock vests on a 5 year schedule (50% in year 3, 25% in year 4, 25% in year 5). My stock will start vesting in 2014, and the first chunk will be worth about $15k (assuming the market doesn't crash).
Do you receive any additional compensation/benefits from your employer (401k match, stock options, etc)?
I get a 401k match of 4.5% on my first 6% of contributions. I also get tuition reimbursement from my employer (up to 8k/year for grad school), which I took advantage of to get a master's degree in statistics. This was not fun, but since I finished school I have received a raise from my company since statisticians are hard to recruit and retain (low supply/high demand field), and analytics is a trendy area to be in right now.
How long have you been working?
I finished undergrad and started working at the age of 22, but then I took a break from a dead-end job in my mid-twenties to go to grad school full time (for my first master's degree, in a non-lucrative field). I accidentally got into my current career while working as a graduate assistant when I volunteered to learn database development (MS Access). So I would say I've been working about 11 years now, but all of the years in my twenties were low-earning years.
How long have you earned at least six figures?
Just for the past 2-3 years.
I didn't start earning six figures until my early thirties. Until my thirties, my income stagnated as I worked for non-profits, universities, and smaller companies. I experienced one pay freeze after another in a generally bad economy post 9-11. In my current field, it took me about 5 years to get up to this level, but that doesn't count the years prior to that when I was floundering career-wise with no focus.
What have been the key steps you have taken that have allowed you to earn this level of income?
When I graduated with my first master's degree, I was at a fork in the road where I had two very different career paths ahead of me, and I chose the more lucrative field. I was getting better job offers and more consistent employment related to database development, so I took advantage of those offers. If I had any down time on my job, I used it to read tech manuals, get certifications, take classes, and generally develop skills that would make me more marketable. I also left a job at a smaller company during the middle of the recession in exchange for a job with a $20k salary increase at a Fortune 500 company (I negotiated them up $5k from their original offer).
Around this time I also decided to start paying attention to my finances and began reading personal finance blogs like FMF which emphasized growing your career. I applied some of this advice and focused on consistently being rated as a high-performing employee, and was rewarded with healthy salary increases and bonuses each year. I began being recruited by other companies and would network with recruiters so I could keep track of what I was worth on the market. When I found I was still being paid below market, I looked around for other offers and nearly accepted a position with another company, but because I was a high performer and my company wanted to keep me around, they agreed that I was being underpaid and gave me a mid-year salary adjustment.
I decided I had found the career that I wanted to stick with and that I wanted my education to align more closely with that career, so I went to grad school again (this time part time and paid for by my employer). I picked a complementary field in a slightly different area (statistics) because I could see that the company was starting to make a big investment in its analytics department and sensed that there was opportunity for me there. This decision to go through graduate school again was difficult, but it has already paid off.
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).
I would say I have done a combination of each at one time or another. I did entirely change my career path first, and then I did some job hopping before I settled on my current company. I've been at this company for almost 5 years now (in two different roles), but although I have received substantial salary increases, awards, and recognition for performance, I have not yet been promoted. I have had some offers to interview for management positions on various teams, but I don't think I've found the right opportunity yet. I may need to look at external opportunities soon if I want to move to the next level. Staying with the same company has its advantages, though -- if I stay, I will have stock vesting over the next 6 years, for example.
What are you doing now to keep your income growing?
I am continuing to set professional development goals each year. These include attending and presenting at one or two conferences each year in my field. I find that this helps me keep learning, impresses my employer, allows me to grow my network, and it doesn't hurt to practice my public speaking skills. I just finished grad school, so I will have to figure out what to do next to upgrade my skills. I usually brainstorm every year and come up with a list - some ideas on my current list are to learn Python or to study for some of the actuarial exams. I also recently started a blog related to my career field which serves as an online resume; this had been one of the items on my list for some time.
What are your future career plans?
The next logical step would be to try to get a promotion. I'm not sure if I want a position with direct reports, but it is still possible to move up another level as an individual contributor.
Have you been able to turn your income into a decent net worth (what is your net worth)?
I feel like I am about 6 years behind on this, but as with anything else, once you actually have a plan and are paying attention, you can start making good progress in a relatively short amount of time. We have no debt other than the mortgage and a combined net worth of about $620k, to which I have contributed about $220k (starting from a negative net worth when I first started tracking it back in 2010). We started out with student loans and car loans, which we have paid off. Now that we are finally moving in the right direction, we are trying to save at least 50% of our income to catch up to where we should be. We have a target of $1MM in net worth within the next 2-3 years, which I feel is attainable if we can stay on our current path.
What advice do you have for people wanting to grow their incomes?
Follow the advice on this blog.
Negotiate your salary. Know what you are worth on the market and apply that knowledge.
Change jobs if necessary, and career paths. Try to get into a field where you are in demand -- this makes such a huge difference. It is amazing to me that most of my income growth took place starting in 2008 and continued throughout the recession. In fact, my income tripled during the recession; this would never have happened if I hadn't changed career paths and jobs.
Invest in yourself. Have clear professional development goals (and income targets). You don't have to do everything on your list, but try to make some progress toward these goals every year and continually re-evaluate them.