2683: Two Huge Reasons Why Your Career Matters by ESI of ESI Money on How to Increase My Income

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[00:00:54] This is Optimal Finance Daily, episode 2683.

[00:00:58] Two Huge Reasons Why Your Career Matters by ESI of esimoney.com

[00:01:04] and on your host and personal finance enthusiast, Diana Merriam.

[00:01:08] Welcome back to Optimal Finance Daily, where I read to you from the best personal finance blogs on the web

[00:01:14] in about 10 minutes or less.

[00:01:16] And with that, let's get right to it as we optimize your life.

[00:01:20] Two Huge Reasons Why Your Career Matters by ESI of esimoney.com

[00:01:31] There are many aspects to growing and managing your career,

[00:01:34] and we'll discuss those during the life of this blog.

[00:01:37] Today, we'll focus on why you should take the time and effort to focus on your career.

[00:01:42] There are many reasons to do this as well,

[00:01:44] but from a financial standpoint, the key ones really boil down to two massive reasons.

[00:01:50] These are,

[00:01:52] 1. Your career is your biggest financial asset, worth millions of dollars.

[00:01:56] And number 2. If you take the right steps, you can make it worth millions more.

[00:02:01] Let's look at each of these in detail.

[00:02:04] Your biggest financial asset, worth millions of dollars.

[00:02:08] Your career is a multi-million dollar asset.

[00:02:11] Consider the following.

[00:02:13] If you begin a career today, starting at $40,000,

[00:02:16] and average 3% pay increases over a 45-year career,

[00:02:20] you'll make over 3.7 million during that time.

[00:02:24] So unless you have very low earnings or very little earning growth each year,

[00:02:29] your career is a multi-million dollar asset.

[00:02:32] What other asset do you have that's worth almost $4 million?

[00:02:36] The truth is that you probably don't have any financial asset that's worth more than your career.

[00:02:41] Not unless you inherited a fortune or business,

[00:02:44] or have saved over decades, which was enabled by your career.

[00:02:48] For the vast majority of us, our careers are by far our largest financial assets.

[00:02:53] Take the right steps and make your career worth millions more.

[00:02:58] Now consider this.

[00:02:59] What would you do if someone gave you $3.7 million right now?

[00:03:04] My guess is that you'd spend a lot of time managing it, protecting it, and growing it, right?

[00:03:09] Well, you do have something worth that much or more.

[00:03:12] So why don't you spend some time and money managing it, protecting it, and growing it?

[00:03:17] The good news, as if having a multi-million dollar asset isn't good enough,

[00:03:21] is that if you can differentiate yourself just slightly,

[00:03:24] you could increase the value of your career asset by a significant amount.

[00:03:28] Using the same numbers from before, let's look at some different examples.

[00:03:33] You double the earnings growth and average 6% increases per year.

[00:03:38] You end up earning over $8.5 million during your career.

[00:03:42] You earn a decent amount above the 3% and average 5% increases per year.

[00:03:48] You end up earning almost $6.4 million during your career.

[00:03:52] You earn slightly above average at 4% per year.

[00:03:55] You end up earning over $4.8 million during your career.

[00:03:59] Even if you only earn 1% more than average, you end up with over a million dollars more.

[00:04:05] And if you do a bit better than that, you can literally earn millions more during your lifetime.

[00:04:10] So doesn't spending some time, effort and money on developing your career

[00:04:14] sound like a great financial investment?

[00:04:16] It does to me.

[00:04:18] Think it can't be done?

[00:04:20] I shared previously that I've averaged over 8% per year for 25 years

[00:04:24] and the last decade or so, I haven't really been trying hard

[00:04:27] as I've put other priorities first, like time with family.

[00:04:31] So earning not only a bit more, but significantly more is possible.

[00:04:36] Bonus Reason

[00:04:38] In addition to the reasons we've already discussed, there's another great reason to work on your career.

[00:04:43] When you grow your career, you generally are able to do more interesting and fulfilling work.

[00:04:49] This is not always the case, but it's true in general.

[00:04:52] For instance, which would you rather be?

[00:04:55] In an entry level position or a company executive?

[00:04:58] Most would say the latter would be more desirable.

[00:05:01] Having work you enjoy is a side benefit of growing your career.

[00:05:06] Never too late.

[00:05:08] I want to address the people who think it's too late for them.

[00:05:11] You may be 20 years into a career and think that this post is not for you,

[00:05:15] that it only holds true for those at the beginning of their career.

[00:05:18] I have a couple thoughts for you.

[00:05:20] If you start taking the steps to grow your career now,

[00:05:23] no matter where you are in your career,

[00:05:25] you'll make more than you would have without doing anything.

[00:05:28] And sure, an extra 1% over 40 years is better than an extra 1% over 20 years.

[00:05:33] But an extra 1% over 20 years is better than nothing extra over 20 years.

[00:05:43] You just listened to the post titled Two Huge Reasons Why Your Career Matters

[00:05:48] by ESI of esimoney.com

[00:05:51] and I'll be right back with my commentary.

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[00:07:35] This post made me think of a fantastic book by Cal Newport called So Good They Can't Ignore You.

[00:07:41] I highly recommend it, especially if you're early on in your career.

[00:07:45] He encourages people not to follow their passion.

[00:07:48] Not because they might be wrong about what they think their passion is.

[00:07:51] But because research shows that following your passion doesn't align with what makes people most happy in their careers.

[00:07:58] Professional happiness comes from following what you're good at and achieving a level of mastery.

[00:08:04] You also need to have autonomy over what you work on and how.

[00:08:08] Working with people you like and trust and having a meaningful impact are also key to getting satisfaction out of your career.

[00:08:15] Cal also talks about how at a certain point in your career, you can start leveraging career capital to gain more autonomy over your time and your work.

[00:08:24] This is the route I chose to explore because I realized that one of the key reasons I'm pursuing financial independence

[00:08:30] is so that I can have full autonomy over my time.

[00:08:33] So to be able to experience that before I actually reach financial independence felt like a no-brainer to me.

[00:08:39] And when you have a good level of autonomy over your work and time, consider not trading that in for more money.

[00:08:46] More money at that point is likely to have very little effect over your quality of life.

[00:08:52] And that's another edition of Optimal Finance Daily.

[00:08:55] Thank you for listening and following or subscribing to the show.

[00:08:58] And thank you for sharing it with others.

[00:09:00] That's a big help to keep all of this going.

[00:09:03] Have a great rest of your day and I'll be back tomorrow where your Optimal Life awaits.