Help a Reader: How to Grow an Income

Here's an email I received recently from a reader:

I have been reading your blog for a good while now and one important topic you write on is growing your income.  As I see it, there are two general ways to do this. One is obtaining income outside of my career job (as your soccer referee job) or by growing one's career job (as with obtaining an industry award). 

I am at a point where I could grow my IT type career by obtaining certifications and attempting to gain more responsibility at work but the rewards will not be as instant as obtaining income outside of work.  Also, I feel that to succeed at one, I would need to devote my attention to one or the other.  I understand that building the career will have a longer impact but I want grow my net worth now (by paying down debt and saving) rather than later. 

So, I ask: is it wiser to grow my income through my career job or outside of my career job (or somehow do both)?  (FYI, I'm 25 and married.)

What's your advice for him?

Comments

[Wayne]

It is normally wiser to work on developing your career first. It will more than likely be your bread and butter income. However, there can be exceptions depending on your interest and passion. A side job as a soccer referee has a very low probability of producing significant extra income. There are not that many referee positions at the professional level in the USA in soccer. However a job as a wedding photographer could easily have a higher upside as your develop your reputation.

[Bad_Brad]

At age 25, I would say invest in your career and your professional development. It is only human to want instant gratification but remember, wealth is a journey, not a destination.

[Rob Ward]

A way you could do both is by doing some freelance work. Find someone who needs outside help that is not directly related to your current job but that you know you could do. Then you have some new experience under your belt.

[KaseyD]

IMHO, you'll have plenty of time in the future to coach soccer gaimes, etc. A side job will not provide the long lasting wealth building that would come from enhancing your career.

I particularly think you should spend you time now in earning the IT certifications which will enhance your resume. The more elite the certification (well known, difficult to acquire, etc.), the better it'll be for your long-term career prospects. At the same time, follow FMF's earlier blogs on how to grow your job.

This is the path you will least regret in the future.

[Apex]

If you truly want good instant side income, get a second job. Being a Soccer ref or something like that which seems fun and light will never make you any significant money (and as FMF attests the per hour wage after factoring in costs is usually dismal, he doesn't actually do it for the money).

If you want long term extra wealth grow your career or come up with a good viable business plan. Unfortunately neither of those is a guarantee. You can get extra certifications, awards, even degrees and they may not increase your pay if its not done correctly and with relevance. You can think you have a great outside business plan but it will be a long hard road to success and many of those plans will still fail.

If you want a decent amount of secondary income right now, go get a night job stocking shelves at the grocery store or something like that. The long hours you put in will get old and you probably won't last at the moonlighting thing that long but you will make real extra money while you are doing it.

You just have to decide what path you want to go after. Growing your career is probably the safest but regardless of what people say that is no guarantee either.

[Mark]

Unfortunately, "growing your career" is somewhat short sided. It is all too easy to get stuck with a boss who doesn't appreciate your talents/skills and get railroaded. Remember, life isn't all about the $$ you earn, but also the life experiences you acquire. We are all disposable in the eyes of our employers, especially with so many desperate people willing to work for a fraction of our current salary.

[Strick]

Agree with Rob. Building your own independent work directly related to your job/knowledge seems to be the real ticket to both solid second income and starting that next business. Also see if you can get your current work to help pay for you (and/or give you the paid time off) to get further certifications. I don't know IT work that well but seems that that would fly and benefit your employer, your current job performance, and your outside job prospects, all at no loss.

[Matt]

Build your knowledge base of your career the best that you can. Build your resume and talents, it will make you more marketable to change jobs if you are not getting the growth you need. You will plateau and that is when you can look at other employment opprotunities.

I am looking at other emplyment opprotunities because the growth of my career is stagnant right now due to the fact that I have acheive my level but unable to move due to the economy. I am taking pay cuts and reduced hours just to keep my job so I am looking outside my career from the fact that there will be no growth in my current situation possibly for a long time.

[jim]

My gut answer is that if growing your IT career will pay off more long term then I'd put the effort into growing your career first.

Talk to your manager and the senior coworkers and find out from them what is the best way to grow your career. Maybe you'd be best off by getting a masters degree. Maybe a Cisco or Microsoft cert is the best way. Or maybe your employer doesn't even care about those things.

I'd also use whatever opportunity your employer gives to pay for training and improve your career on their dime and their time. Maybe they'll pay for the certs and allow you to study for them during work hours. Maybe they'll pay for tuition to go to college or get a masters.

You might be able to hit 2 birds with 1 stone by building your own side IT consulting business of some sort. That might help you build your resume and give you some immediate side cash.

I can understand wanting to grow your net worth "now" but theres no rush. You're 25 years old so your still young. You've got a good 30-40 years ahead of you till retirement.

[Suba @ Wealth Informatics]

I agree with Rob. Can't you try both? I guess you would have already done your research on what certifications will be useful in advancing your career. If the employer would pay for the certifications and they will be useful for your progress, definitely go for it. If you are going to get a side job, make it in something that will help your IT career, may be on something that has a lot of future in your field but your current job doesn't offer you the opportunity...

[MBTN]

I work in IT, first as a software engineer and now on the management side. From what I have seen, there are very few industry certifications that really help you in your career in IT. Most companies and hiring managers don't put much value on them when it comes to hiring and advancement. The only exception is the CISSP certificate, which seems to have value if you are in the area of security.

That being said, that doesn't mean that you should continue to expand your technical skills. With the number of new programming languages, tools, and technologies that come up, you definitely must keep up with them. If you decide that you want to stay on the technical side, one way is to pick a few new pieces of technology that maybe your company isn't using, learn about them, and then figure out how you can apply it at work. Then you become an expert in that new technology at your company, and you become that much more valuable.

If you want to move more on the management side, then you should see if you can learn more about technical project management (project planning, scheduling, budgetting). Depending on your goals, you may want to look into getting your MBA part time, as this combined with your technical experience will give you a leg up. Personally, I like to see IT managers who came up as techies rather than managers without any technical chops. My philosophy is that you can't manage somebody unless you've done their job yourself.

Good luck to you!

[bb]

Look at the salary upside of your career (IT). Grow your career by outperforming your colleagues and learning something that is valuable to the job. Once you reach the upper end of the salary scale, see if you are on the path to management. If not, or you're not interested, you should think about side jobs, own companies, or investing.

[texashaze]

Do both! But a side business will pay off more. Not only do you get extra dough but you build an asset. With some hard work and luck your side business could grow to big dough or be sold for big dough.

[Lop at Rebates Money]

I have to say starting a side job is much more lucrative. You DO NOT want to put all your eggs in one basket. What if you lose your IT job all the sudden? By having another source of income, you always have the upper hand. Who know..that this side business can lead to a passion which might lead to some serious money ;)

[Anthony]

I agree with "Lop at Rebates Money." It's job diversification, in a way.

My full-time job is an engineering job. It's great, and the compensation is wonderful. But I feel that I'm already putting 110% into the job. (There aren't certifications or anything like that I can go after.) I volunteer for extra work and put in extra hours whenever necessary.

My part-time job is an instructor job, teaching electronics theory. My part-time job is a way for me to develop my full-time job. But also, if I lose my full-time job, then I have a *little* bit of something to rely on.

[Nick]

I agree with the "personal" best and "both" advice. If there is a clear path to make more money by focusing on your job (more hours, different work, etc.) I would consider that. But I would also consider outside income (assuming you don't risk your first job by competing with them, breaching a restrictive covenant or just becoming a bad employee by focusing on other things).

You could just look at it as "how much will I make by dedicating an additional 10 hours per week to my job versus my side hustle." You could look at it as over the next 30 days, 6 months, 2 years, and 5 years (or more). As best as you can predict put a number in each column. Then see what is more attractive to you. That may help find an answer that you like.

But make sure it's about more than just the money. Make sure you like what you're doing and not risking your bread and butter for an unorganized chance to make money doing something you're not passionate about.

Good luck!

[Tim]

I agree with the above. As an IT guy, one thing I would add regarding certifications is to get ones that don't expire. CISSP for security, PMP for project management are two I have, and they have easily earned me an extra $25k/year combined each year. Only have to do yearly continuing education to keep them alive every three years. I had scores of technical certs (Microsoft, Cisco,etc) earlier in career as engineer, all expired in a few years. They were somewhat worthwhile also, quick return on investment, but not long lasting affects.

College degrees are similarly long-lasting, but less so in IT. My early technology degrees aren't counted as highly, because the technology is now dated. They of course take longer to get and kick in with $ return, but are worth it over the long term.

[Steve]

Whatever way you can grow your income (side consulting job, second job), you should not even consider it, just do it. It is always better to have a way to make more money than not. You don't want to get to a point where you are desperate for money and to find no way to make additional income.

[M18]

I'd say take the part-time work now, but be strategic in selecting it and limit it to a 1-year plan before you focus on more certifications.

Look at your job now. Look at the job/role you want next. What skill sets are required to do the next job that you're not already developing in your current role? (for example, people management if you are entry-level). What part-time options can help you both build that skill you need in advance of the next career job you want, and also provide some hedging against a downturn in demand for your core skills?

As an example - I was in an entry-level marketing role and thought I wanted to get into corporate training or people management. At 23, I could easily pickup babysitting, tutoring, or bartending for money, but I needed a resume line-item that would help make me competitive for the corporate trainer or team leader roles. So I used my tutoring experience to get a part-time teaching job where I got experience standing up in front of a whole classroom of students. It allowed me to develop, on the side, some of the managerial skills I would need and let me prove that I can lead and teach a class vs. an individual.