How to Make Over $700k More During Your Career

Here's a simple but effective way to earn over $700,000 more during the life of your career:

Start at a higher salary

Money Magazine listed a chart in its May 2016 issue that compared the career earnings of two people. They both got 5% annual raises during their careers. But one started out earning $35k a year while the other started at $40k.

The difference in salary was over $700k throughout their careers.

The person who started at $35k earned $5.0 million during his career while the person starting at $40k earned $5.7 million during hers.

This is why it's a great reason to ask for more money when you're offered a job. A few minutes of negotiation can mean several hundred thousand more dollars to you during your lifetime.

Comments

[Steveark]

That's true if both get average raises every year. But who wants average? In the example after 40 years both employees are making 7 times their starting salary based on a 5% annual raise (1.05 to the fortieth power = 7). However in my experience talented employees can easily earn up to 20x or more of their starting salary over time if they are promoted and rise rapidly through the corporate ranks. Starting salary is a great headstart for sure but the other important factor is getting off the hamster wheel where everyone else is stuck and being seen as a star performer!

[FMF]

100% agree! (But that's for another post) :)

[freebird]

Just as in investments costs matter too. For example if a new grad is offered equivalent jobs, one paying 40k in NYC and the other 35k in Indianapolis, that 700k career wage difference will probably be eaten up and then some by the cost of living. IMO earnings appear on the bottom line, not the top line.

[Mrs. Picky Pincher]

Aaaaabsolutely. I'm admittedly a job-hopper, but that enabled me to double my $30k salary in just a few years. I didn't set out to do that, of course, but it was a happy consequence. Hopefully that means my lifetime earnings will be higher. :)