Let’s start with some simple arithmetic. Joe Ordinary is 25 years old, makes $28,000 a year, and gets ordinary 3 percent to 4 percent yearly increases. Over a 40-year career, he makes approximately $2.3 million.
Elwood Extraordinary is not satisfied with ordinary. He follows the advice he gets in Early to Rise every morning and averages a 6 percent increase in wages over the same 40-year period. By the time Elwood retires, he’s earned about $4.3 million.
As you can see, increasing your income — even by as little as 3 percent or 4 percent a year — can make a giant difference over the course of a lifetime.
Imagine what’s going to happen when you do even better than that!
Today, I want to talk about how you can get BIG salary increases — double, triple, or even quadruple what your peers get.
And to get your New Year started right, I want you to set a goal for yourself to increase your salary by at least 10 percent.
First, a few words about how salaries work in a normal, free-market economy…
Businesses exist to make profits. As an employee of a business, it’s your job to perform a function that helps produce those profits. The more important your work is seen as being in terms of creating profits, the greater your salary is likely to be. Thus, salespeople generally make more than accountants and profit-center managers make more than engineers.
In other words, if you want to get your boss to pay you more, you have to make yourself more valuable to him.
So let’s talk about how you’re going to make that happen.
Make a list of all the ways you are currently valuable to your boss. Then make another list of things you can do to increase your value.
That list will be a good source of ideas for you. In January, for example, you might make it a point to get your boss his most important report a day earlier than normal. In February, you might tell him he can delegate to you the sales call he hates to make.
As the months roll by, your boss will recognize that you are operating at a higher level. He may be surprised at first — even feel a little threatened, if you aren’t going about it diplomatically. But he will appreciate how you are making his work life easier and more productive. And he’ll begin to depend on you.
Eventually — and this may happen in four months or it may take a year — he will see you as an entirely different and more important employee than any of the others he deals with. He will begin to think of you as indispensable.
At that point, you will have no trouble getting your 10 percent raise. You might do much better than that.
Here’s a key point: The habits you have to develop now in order to get yourself that 10 percent raise will be the same habits that will help you double or triple your salary in the future. Superstar employees don’t do a hundred things better than ordinary, good employees. They usually do just a handful. You’ll discover and perfect your handful next year in seeking to please your boss, and you’ll be able to use those new skills to go all the way to the top.
One caution: To get the raise you want, it’s not enough to do a better job and make your boss’s life easier. Sometimes, you have to ASK FOR IT. You have to promote yourself not only when your salary review comes up but throughout the year. (Remember, it’s your responsibility to make sure your efforts get noticed.)
Another caution: Sometimes, what you have to do to please your boss is not the best thing for the business.
Some businesses — and this happens more often with larger, corporate businesses than with growing enterprises — become politically divided. In such businesses, it’s possible to get a job working for someone who cares more about himself and his own power than about the company’s future.
If you have such a boss, you have to be a bit duplicitous. You have to do everything you can to please him. At the same time, you have to find a mentor at your boss’s level (or above) whose interests are aligned with those of the company.
Work to please your mentor at the same time as you work to please your boss. By pleasing your boss, you’ll get your big raise next year. And by pleasing your mentor, you eventually will be able to abandon your boss’s rotten ship and secure a much better position.
The greater your contribution to your company’s success, the higher the salary you will demand. And the best way to be a big contributor is to practice a financially valuable skill.
There aren’t a whole lot of financially valuable business skills to choose from. Though it’s good to know how to analyze a spreadsheet or engineer a new design, if you want to make dramatically more money than you’re making now, you are almost certainly going to have to start doing at least one of the three things businesses traditionally pay big bucks for: selling, marketing, and/or managing profits.
Yes, I know you’ve heard it from me before. And, no, I won’t be angry with you if you decide to stick with what you already know. I’m just pointing out that, in going after the goal of increasing your income, you might consider changing your profession. It really will jet-propel your progress.
But even if you choose not to do that, you can and should be able to boost your salary by 10 percent next year. And here is how you are going to do it:
1. Make a resolution to be more valuable to your boss and/or your business. Do it now. Write it down.
2. Make a list of all the ways you are currently valuable to your boss and/or your business.
3. Make a list of a dozen or so ways that you can increase your value to your boss and/or business. And pick at least one of them as your objective for January.
4. Figure out some way to communicate to your boss or to your company’s president that you want to make a bigger contribution this year. (No need to tell him you want a higher salary. He will “get” that” without your saying so.)
If you set for yourself the modest goal of getting a 10 percent raise next year — and get it. And then get an increase of just half that amount for the next 10 or 15 years… you’ll be worth millions more when you retire than you will be worth if you do nothing.
So start with that 10 percent goal. And develop the habit of continuing to make yourself more valuable. Don’t brag, but do promote yourself. Then watch your income grow.
P.S. Good for you! You’ve just made a commitment to get a big raise next year. And I’m sure you have some other big goals for 2010 — maybe losing weight, starting a business, or learning a financially valuable skill.[Ed. Note: Mark Morgan Ford was the creator of Early To Rise. In 2011, Mark retired from ETR and now writes the Palm Beach Letter. His advice, in our opinion, continues to get better and better with every essay, particularly in the controversial ones we have shared today. We encourage you to read everything you can that has been written by Mark.]