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.)
Both I and my husband are ~40, we have 2 kids of preschool age, we live in a high cost of living state on the East Coast. My husband is a stay-at-home dad.
What do you do for a living?
I work for a big consulting company, not as a consultant but as an expert in a particular field. For a few years I was as a consultant but then moved to my current type of job for lifestyle reasons. I work with both consultants and clients to provide them with solutions and advice in my area of expertise.
How much do you earn annually?
It varies every year but generally ~$250k
How does this amount break down (salary, bonuses, etc.)?
Base salary is around $190K, the rest is a performance bonus, which in recent years has been around $40-80K, and in some years there are other adjustments. I also get ~$20K as employer contribution to 401k. We also have a very good health insurance, I don’t know what would be the cash equivalent of it, but is worth a lot to our family.
How long have you been working?
I immigrated to the US ~13 years ago. Before that I worked for 5 years in my home country as bank department manager with relatively high salary in local terms (perhaps top 20% or so if there were stats), but in absolute terms not even remotely comparable to US levels. I got my MBA from an Ivy school here and started with my current company. So I’ve worked for about 16 years, but only the most recent 11 would count here
How long have you earned at least six figures?
10-11 years, I started in my current company at around $100K
What have been the key steps you have taken that have allowed you to earn this level of income?
I took a risk moving to the USA for my MBA. I already had a comfortable and well-paying job in banking, by moving here I took on a six figure debt and started work in a completely different field. The debt would have been higher actually, but I had a small scholarship, I worked as teaching assistant, tutor and admissions reviewer, I also landed a very good summer job. I could have opted to do my MBA in a third-tier school and pay my way through teaching jobs, but I believed and still believe that only an Ivy degree, combined with some luck, can help an immigrant land a job at that salary level. Friends who attended lower tier schools got mid-level management jobs at best and some who had to search during recessions ended up moving back to Europe. It also helped that I used my time at school to earn a couple of majors that would be most relevant to the job transition I wanted, and that I was among the top students in my class.
A few years ago I took a different type of risk, one which didn’t increase my salary, but got me the lifestyle I wanted to have at that point. Consulting life is very demanding both in terms of hours worked (a 60-70 hours week is an easy one), and also in terms of constant travel and stress. Moving to an expert position effectively cut off most of the growth potential in my compensation. However, what I lost in salary growth, I gained in flexibility – I often work from home, travel maybe once a month and frankly also enjoy my work more, as it turned out I am better suited to it than to my previous work, it plays to my strengths. I have been rated in one of the two top performance categories every year since I took on the new job.
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).
Combination of a) and c). I have never liked job jumping.
What are you doing now to keep your income growing?
I am advancing in my chosen field, already had one promotion and will try to get another one within a year or two, which will put me as high as I can go within my type of job in my company. What it takes is a combination of deepening my skills and expertise in the field, focusing on particular areas within it (specialization is key), as well as constantly innovating our services in the field and developing new products. I try to make a plan in the beginning of each year what would be the 2-3 big projects I would focus on, so that I have clear priorities and also a good report out of results at the end of the year.
I am not pursuing almost any side income opportunities. I have no time for this and I don’t intend to start my own business since I like my work. My husband has a few hobbies which could turn into something if he decided to try when kids reach school age. However, for the moment his being in home gives the family significant flexibility which is worth more to us than the additional income would be.
We do the cash back credit card rewards but with focus on simplicity. We have Chase Amazon as default for Amazon purchases at 3%. Amex Blue Cash Preferred for all groceries at 6% and gas at 3% and Priceline at 2% for all other purchases. These 3 match our spending patterns and are easy to remember, we get about $2k a year. Adding anything else would be too much complexity for a small incremental reward
What are your future career plans?
I could see myself staying with the same company until retirement, another 15 years or so. The work is diverse, the job benefits are great, and the lifestyle works for me. Once I reach the top of the ladder in my current job, I may at some point decide to try something else, the company is relatively open to lateral moves.
Have you been able to turn your income into a decent net worth?
Maybe it would be helpful to see it as a progression:
We could have accumulated more, but we prefer to avoid extremes in both saving and spending. We bought a moderate size fixer upper house well within our means, and we fixed it ourselves over a few years. We don’t have expensive tastes in cars, clothing or accessories, we rarely dine out. On the other side we like to take vacations in different countries, my husband has one expensive hobby and the kids go to a pricey private preschool. Since we are on a good path to retirement we would rather spend on things that matter to us instead of saving more to retire early.
What advice do you have for people wanting to grow their incomes?
I would offer one common sense advice about guiding your career, something that people often neglect to do, blinded by short-term considerations. Do a bit of strategy planning of your career early on to make sure you end up where you want to be. Once you have been working some years in a field, you should be able to say:
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.)
Both I and my husband are ~40, we have 2 kids of preschool age, we live in a high cost of living state on the East Coast. My husband is a stay-at-home dad.
What do you do for a living?
I work for a big consulting company, not as a consultant but as an expert in a particular field. For a few years I was as a consultant but then moved to my current type of job for lifestyle reasons. I work with both consultants and clients to provide them with solutions and advice in my area of expertise.
How much do you earn annually?
It varies every year but generally ~$250k
How does this amount break down (salary, bonuses, etc.)?
Base salary is around $190K, the rest is a performance bonus, which in recent years has been around $40-80K, and in some years there are other adjustments. I also get ~$20K as employer contribution to 401k. We also have a very good health insurance, I don’t know what would be the cash equivalent of it, but is worth a lot to our family.
How long have you been working?
I immigrated to the US ~13 years ago. Before that I worked for 5 years in my home country as bank department manager with relatively high salary in local terms (perhaps top 20% or so if there were stats), but in absolute terms not even remotely comparable to US levels. I got my MBA from an Ivy school here and started with my current company. So I’ve worked for about 16 years, but only the most recent 11 would count here
How long have you earned at least six figures?
10-11 years, I started in my current company at around $100K
What have been the key steps you have taken that have allowed you to earn this level of income?
I took a risk moving to the USA for my MBA. I already had a comfortable and well-paying job in banking, by moving here I took on a six figure debt and started work in a completely different field. The debt would have been higher actually, but I had a small scholarship, I worked as teaching assistant, tutor and admissions reviewer, I also landed a very good summer job. I could have opted to do my MBA in a third-tier school and pay my way through teaching jobs, but I believed and still believe that only an Ivy degree, combined with some luck, can help an immigrant land a job at that salary level. Friends who attended lower tier schools got mid-level management jobs at best and some who had to search during recessions ended up moving back to Europe. It also helped that I used my time at school to earn a couple of majors that would be most relevant to the job transition I wanted, and that I was among the top students in my class.
A few years ago I took a different type of risk, one which didn’t increase my salary, but got me the lifestyle I wanted to have at that point. Consulting life is very demanding both in terms of hours worked (a 60-70 hours week is an easy one), and also in terms of constant travel and stress. Moving to an expert position effectively cut off most of the growth potential in my compensation. However, what I lost in salary growth, I gained in flexibility – I often work from home, travel maybe once a month and frankly also enjoy my work more, as it turned out I am better suited to it than to my previous work, it plays to my strengths. I have been rated in one of the two top performance categories every year since I took on the new job.
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).
Combination of a) and c). I have never liked job jumping.
What are you doing now to keep your income growing?
I am advancing in my chosen field, already had one promotion and will try to get another one within a year or two, which will put me as high as I can go within my type of job in my company. What it takes is a combination of deepening my skills and expertise in the field, focusing on particular areas within it (specialization is key), as well as constantly innovating our services in the field and developing new products. I try to make a plan in the beginning of each year what would be the 2-3 big projects I would focus on, so that I have clear priorities and also a good report out of results at the end of the year.
I am not pursuing almost any side income opportunities. I have no time for this and I don’t intend to start my own business since I like my work. My husband has a few hobbies which could turn into something if he decided to try when kids reach school age. However, for the moment his being in home gives the family significant flexibility which is worth more to us than the additional income would be.
We do the cash back credit card rewards but with focus on simplicity. We have Chase Amazon as default for Amazon purchases at 3%. Amex Blue Cash Preferred for all groceries at 6% and gas at 3% and Priceline at 2% for all other purchases. These 3 match our spending patterns and are easy to remember, we get about $2k a year. Adding anything else would be too much complexity for a small incremental reward
What are your future career plans?
I could see myself staying with the same company until retirement, another 15 years or so. The work is diverse, the job benefits are great, and the lifestyle works for me. Once I reach the top of the ladder in my current job, I may at some point decide to try something else, the company is relatively open to lateral moves.
Have you been able to turn your income into a decent net worth?
Maybe it would be helpful to see it as a progression:
- ~10 years ago our net worth was negative $150K - from the student loans and credit cards before I started work
- ~5 years ago our net worth was about $100K – student loan mostly paid off, but we had recently bought a house and added a mortgage
- Now our net worth is about $750K – out of which ~$150K is in house equity, ~$500K in retirement and college accounts (mostly retirement) and ~$100K is liquid in taxable accounts and cash. I am thinking about paying off the mortgage in a year or two despite its low 2.75% rate, just to clean the last debt out.
We could have accumulated more, but we prefer to avoid extremes in both saving and spending. We bought a moderate size fixer upper house well within our means, and we fixed it ourselves over a few years. We don’t have expensive tastes in cars, clothing or accessories, we rarely dine out. On the other side we like to take vacations in different countries, my husband has one expensive hobby and the kids go to a pricey private preschool. Since we are on a good path to retirement we would rather spend on things that matter to us instead of saving more to retire early.
What advice do you have for people wanting to grow their incomes?
I would offer one common sense advice about guiding your career, something that people often neglect to do, blinded by short-term considerations. Do a bit of strategy planning of your career early on to make sure you end up where you want to be. Once you have been working some years in a field, you should be able to say:
- What are your strengths and weaknesses. Think of broad categories – technical expertise, people management, project management, processing/routine work, selling, numbers and analytics, etc, etc – whatever is relevant in your field. What are the things you are especially good at, what are the things you struggle to do, are there any that you may or may not do well, but you dislike?
- What are the potential career paths in your field, what is at the end of each road and do you like it (compensation, working hours, travel, locations, etc)? Each path will have requirements, which may or may not match with your strengths and preferences. You may not know enough about some careers – here is where some good old-fashioned research and/or informational networking with people in your field will help to understand your options.
This was great. Thanks for sharing. How did you and your husband decide that he would work as a stay at home dad? And do you have any advice for others considering a similar arrangement?
It sounds as if you can both comfortably live off of your income alone until retirement. Does he have any plans to re-enter the workforce, and did his income contribute significantly to your net worth prior to him staying home?
Posted by: VA | January 31, 2014 at 12:16 PM
Really inspirational story! Congrats on your achievements.
Posted by: Brooklyn Money | January 31, 2014 at 12:52 PM
@VA: Good question. It wasn't the initial plan, we got into this due to visa quotas issue (since mid-2004 it's been incredibly difficult to get a working visa, unless you find an employer not only to sponsor you but also wait months for you to get the visa). My husband did his MBA a year after me, going to a smaller and cheaper school, we were actually able to use my summer job earnings to pay his tuition, so we didn’t need to take additional debt. However, the school did nothing to really help him find work, he got stuck in the vicious circle of “you have no relevant [US] experience, but you have an MBA so we can’t give you an entry level position either” and by the time he finally found a job the visa quotas got cut and they couldn’t get him a permanent work permit, he had to leave after his student visa expired. Another example of "cheaper" MBA being a complete waste.
Anyway, by the time we got the green cards, he had an extra 4 years gap on his resume, we were expecting our first kid, still hadn't finished renovating the fixer upper, and my new job, albeit flexible, was not light on hours. So it really made sense for us to keep him at home. And it still does financially - the flexibility of having someone at home outweighs the possibility of cutting a few years off the path to retirement. Also if he takes a job at this point it won't be well paid, in our tax category the net gain will be likely at most another $17K or so in tax-advantaged space (assuming he gets a job with 401k which is not that likely) because we already max his Roth IRA.
Having said that, if you are considering this and can afford it, the biggest downside is not financial, it's morale. My husband does feel now and then depressed by the lack of "formal" appreciation of his contributions, not exactly rationally as he would himself say, but it's a feeling. If the person staying at home is happy to be a homemaker, or likes volunteering it's all good. If not, it may be better to keep a foothold in a regular work environment if feasible.
Posted by: Interviewee 12 | January 31, 2014 at 03:37 PM
Thank you for sharing your inspirational story. Although my salary is lower than yours, I can relate as another chief bread-winning woman/wife/mom. My husband works at a low paying job; however, every time we talk about him staying home, the morale issue and his insurance benefits (they save us $800/month) outweigh a stay at home arrangement that frankly makes the most sense and would be better support for my career to keep on growing.
Posted by: Ali | January 31, 2014 at 08:44 PM
The career advice really helpful, very inspirational. Yes, we need to chart out career plan considering our weakness and strength.
I too hate job hopping frequently, I feel it will not help for long term career growth.
Posted by: Weekend-Windup | February 01, 2014 at 10:30 AM
This was interesting, but I'd love more specifics. Details like what you state you live in, your area of expertise, and from which country you emigrated, would be helpful. As is, your story is so generic, it's kind of hard to relate to.
Posted by: Louisa | February 03, 2014 at 08:43 AM
Thank you for the response! I appreciate your honesty about the downside of the stay at home dad arrangement. That is definitely something to consider, as I know too often it's easy to overlook the benefits of traditional work, aside from income.
Best wishes to your family!
Posted by: VA | February 03, 2014 at 04:05 PM