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 (age, marital status, kids, where you live, etc.)
Age 39, married over 16 years, 3 kids (age 9, 6, and 3). Live in suburban Seattle.
What do you do for a living?
The official title is "Group Finance Manager", essentially I am mid-level finance manager at a very large software company. I am in a small but rapidly growing and highly strategic group, so I do report directly to the CFO of my organization.
How much do you earn annually?
Around $180,000 per year, can be a bit higher or lower depending on variable compensation components (bonus and stock award) which are based annually on performance.
How does this amount break down (salary, bonuses, etc.)?
$138,000 base salary, bonus can pay up to another 30%, and I have a stock unit "target" of $21,000 per year. Bonus and stock are based on performance. Stock grants vest over five years. So, after five or more years with the company, you do have five stock grants vesting at a time.
Do you receive any additional compensation/benefits from your employer (401k match, stock options, etc)?
Very rich medical benefits. The company used to have zero deductible, zero co-pay for almost all services, with also no employee contribution. The company recently moved to a HSA plan with a very low out-of-pocket max and really small co-pays (to avoid paying the ObamaCare "Cadillac tax"). Still a really good medical plan, just not as good as it was.
The company also provides plenty of other extras, for example, they pay for my gym membership at a world class gym near our corporate campus. 401k match is 50% up to a 6% contribution. There is also an extensive set of other benefits too lengthy to describe.
How long have you been working?
Depends on how you define "working". My first job at the age of 12 was delivering newspapers (that was 1986, 27 years ago). I made about $100 per month. Through college, I worked various jobs on campus and also had a job delivering pizzas to help pay the bills (that was 1992 through 1996). My first job out of college was at the local Boys & Girls Club in my hometown (1996). Eventually, I did take a couple of years out of the work force to get my MBA full-time. But since college, I've been working 15 years.
How long have you earned at least six figures?
Since 2006. So each of the past 7 years.
My job delivering newspapers netted me about $100 per month, which was a lot of money for a 12-year-old. By the time I was 16, I had about $4,000 in the bank, of course, I was not savvy with money and I blew that pretty quickly leading up to and into my college years.
My first job out of college as a youth coordinator at the Boys & Girls Club paid me $5 per hour, above minimum wage of $4.25 at the time. I took a job shortly thereafter as a bank teller making $7 per hour, which I thought was a lot of money at the time. Of course, as a teller I saw others' paychecks all the time, and soon realized in the real world paying my own bills for the first time that it wasn't much money. I moved up in the bank to become a new account rep and a loan processor, and was making about $8.50 after two years, but realized I had topped out in that business unless I had more education, so I went back to school for my MBA.
My first job post-MBA paid $70,000 with an $8,000 signing bonus. That was the first time in my life that I felt like I made a "man's paycheck". Two job hops later, I signed on with my current employer for $105,000 to start (plus a $20,000 signing bonus).
What have been the key steps you have taken that have allowed you to earn this level of income?
The MBA education I received and connections I made there were certainly important. But more than that, it's really about always wanting to end the day a little bit better, a little bit wiser, a little bit more effective than you started the day. If you want to advance in your career and grow your income, you need to always be asking yourself if you are doing this. And if you are not, you need to have a conversation with your manager, business partner, HR rep, or whoever has the power to change that. And if that doesn't yield results, then you need to move on to something else.
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've actually done a, b, and c at one time or another. Going back for my MBA was an example of c. Since my MBA, I have switched companies twice, so I have also employed b. And I was promoted once with my second company, and twice with my current company, so I've also done a. You never know what life is going to throw at you, and you never know what situation your employer or your organization within your employer will be in. You always have to be willing to do a, b, or c, depending on the circumstance.
What are you doing now to keep your income growing?
Mainly growing in place. My career is my primary source of income, and I am the only earner in my family. So growing my career is a key focus of my life.
What are your future career plans?
I am on the successor list for my boss's current role as division CFO. That is plan A. I have only been in my current role for a little over a year, so I am really trying to grow in this role before I work too much on what plan B is, but I definitely do want to have one.
Have you been able to turn your income into a decent net worth?
My net worth is approximately $650,000. Not as high as I would like it to be.
Why or why not?
The things that have held me back a bit are the debt that I incurred to get my MBA (although it was well worth it), plus the fact that I bought my current house in a high-cost of living area in 2006, very near the peak of the housing bubble. The house cost $489,000. You wouldn't know it if you looked at the house - it's a utilitarian 1800 sq ft, 3 bed, 2 bath split level built in 1975, although the location is fantastic. At the bottom, it probably was worth $350,000. It's probably back to about $450,000 now.
I bought it with an 80/10/10, with the second mortgage being at 8.50% interest. A year ago, I paid that one off, and not long after that I refinanced my first (which was 5.875%) at 3.75% for 30 years. Net/net, my housing cost decreased from roughly $3,000 per month to $2,000 per month - or about $2,200 per month if I want to pay the house off at the same end date as the original mortgage.
I would also say that I stayed at my first post-MBA job too long with a stagnant company and stagnant income. I was being paid below market for my education and skill level but didn't realize it.
What advice do you have for people wanting to grow their incomes?
Find work that you have a passion for. You don't have to "love" what you do, but I feel it is important to have some passion in your work. In the long-term, there is a correlation between being passionate about your work and performing well at it, and there is also a correlation between performing well and being recognized (and paid more) for it. If you're just going through the motions, your employer or your customers or anyone else around you will know it.
In the short-term, get a little better every day. If you're not a little better at the end of the day than at the start of the day most days, go somewhere else.
Avoid lifestyle inflation as much as possible, invest money automatically over time (pay yourself first).
Don't be afraid to take risks, but know the difference between a risk and a gamble.