2837: The Easiest Way to Get a Raise is to Give Yourself One by Kiersten Saunders of Rich and Regular on Financial Future

[00:00:00] [SPEAKER_00]: This is Optimal Finance Daily. The easiest way to get a raise is to give yourself one by Kiersten

[00:00:07] [SPEAKER_00]: Saunders of Richandregular.com and I'm your host and personal finance enthusiast, Diana Merriam.

[00:00:14] [SPEAKER_00]: This is the show where I read to you from the best personal finance blogs on the web with

[00:00:18] [SPEAKER_00]: the author's permission of course. For now let's get right to it and continue optimizing your life.

[00:00:28] [SPEAKER_00]: The easiest way to get a raise is to give yourself one by Kiersten Saunders of Richandregular.com

[00:00:36] [SPEAKER_00]: As Mr. R&R mentioned, I got promoted! Woohoo! Some of you may be thinking,

[00:00:41] [SPEAKER_00]: wait, I thought y'all were retiring early? You're right, but the two events aren't as

[00:00:46] [SPEAKER_00]: mutually exclusive as they sound. We treat full-time employment, which is required work

[00:00:52] [SPEAKER_00]: where you trade time for money, as a season. We still believe that life is for living,

[00:00:57] [SPEAKER_00]: which is why we actively avoid lifestyle inflation in spite of how lucrative our

[00:01:01] [SPEAKER_00]: careers have been over the years. Taking this approach trains us to treat salary increases

[00:01:07] [SPEAKER_00]: as a byproduct of how focused we are at reducing the timeline and not another form of golden

[00:01:13] [SPEAKER_00]: handcuffs. The title is a bit of a spoiler alert about who I think the onus falls on for making

[00:01:20] [SPEAKER_00]: additional income, but leveraging our employers to earn more money has been an important part

[00:01:25] [SPEAKER_00]: of our journey, so let's talk about it. Earning more money hinges on your ability

[00:01:30] [SPEAKER_00]: to understand people, which is the emotional work known as office politics, also known

[00:01:36] [SPEAKER_00]: as the game. It's the thing where you agree to a never-ending feedback loop. You make

[00:01:42] [SPEAKER_00]: a point to solicit feedback at very specific times and then you act on that feedback in

[00:01:47] [SPEAKER_00]: very specific ways. You play the game and you hope for the best. In the wrong environments,

[00:01:53] [SPEAKER_00]: it becomes exhausting and leads to burnout. The right environment can lead to incredible

[00:01:58] [SPEAKER_00]: mentorship, the ability to learn new things, and rapid salary growth. This has been the

[00:02:04] [SPEAKER_00]: case for me. If my current salary is a scoreboard and every promotion is considered a checkmate,

[00:02:10] [SPEAKER_00]: then it's fair to say that I have played the game well. I just don't want to play it

[00:02:14] [SPEAKER_00]: for 30 more years. Apley stated, quote, when you work for someone else, you implicitly

[00:02:20] [SPEAKER_00]: accept a limited upside and unlimited downside. For a long time, I didn't understand how

[00:02:26] [SPEAKER_00]: limited the upside was. I was a tried and true careerist, but I also thought the game

[00:02:31] [SPEAKER_00]: we were all playing was chess. Turns out it's poker, end quote. Don't get me wrong. I'm

[00:02:37] [SPEAKER_00]: great at my job and have earned my place, but so did the people I've seen lose theirs.

[00:02:43] [SPEAKER_00]: My point is that I'm not special. I've just been lucky enough to avoid the downside.

[00:02:48] [SPEAKER_00]: Annie Duke talks about the difference between chess and poker in her book. With chess, there's

[00:02:54] [SPEAKER_00]: no hidden information. All the pieces are visible and you can see your opponent's moves

[00:02:58] [SPEAKER_00]: and react accordingly. If you lose, it's because there were better moves that you didn't

[00:03:03] [SPEAKER_00]: make or see. You can learn from your losses in chess, so it makes sense to keep trying.

[00:03:09] [SPEAKER_00]: In other words, the juice is worth the squeeze because the game is fair. But poker is different.

[00:03:14] [SPEAKER_00]: Poker is a game of chance where valuable information is hidden. Your actions will always

[00:03:19] [SPEAKER_00]: be based on the likelihood that something will happen. You don't know which cards will

[00:03:24] [SPEAKER_00]: be dealt or which hands will be played. You can still make the best decision based on

[00:03:28] [SPEAKER_00]: the information you had and still lose. In fact, there's so much uncertainty involved

[00:03:34] [SPEAKER_00]: in poker that it makes it really difficult to learn from the past. You don't know which

[00:03:39] [SPEAKER_00]: outcomes were a result of your skills and which ones were a result of luck. You can

[00:03:44] [SPEAKER_00]: use your experience as a guide, but to excel, it requires you to be comfortable with the

[00:03:48] [SPEAKER_00]: fact that you don't control the odds and still be willing to play all in. That sounds

[00:03:53] [SPEAKER_00]: like a 50-year career to me. It sounds bleak, so we develop these narratives

[00:03:57] [SPEAKER_00]: that normalize the risk as a way to cope. We start to call our colleagues family, and

[00:04:03] [SPEAKER_00]: instead of simply respecting company policies, we operate if we had an obligation to unconditionally

[00:04:09] [SPEAKER_00]: support them even at our own expense. So many of us are agreeing to spend the best

[00:04:14] [SPEAKER_00]: years of our lives playing career poker, 40-plus hours a week, knowing the house will always

[00:04:19] [SPEAKER_00]: win. We spend all year toiling to drive clicks to websites just to grow the pot. We go all

[00:04:25] [SPEAKER_00]: in with our time and hope that we're holding the winning hand during the annual review

[00:04:30] [SPEAKER_00]: and bonus process. Year after year after year, wagering our health for 2% here, 5% there.

[00:04:37] [SPEAKER_00]: Sometimes we win, other times we lose. But we keep on playing, year after year after

[00:04:42] [SPEAKER_00]: year. 2% here, 5% there. The only way to consistently win a game of

[00:04:48] [SPEAKER_00]: chance is to master the odds. That said, the easiest way to ensure you get the raise you

[00:04:53] [SPEAKER_00]: deserve is to give it to yourself. If you're an employee like I am, one of the best things

[00:04:58] [SPEAKER_00]: you can do with your paycheck is to build a routine that conditions it to work harder

[00:05:03] [SPEAKER_00]: for you. Assign every dollar a job, manage it like you would an employee, and invest

[00:05:08] [SPEAKER_00]: in systems that create new income with minimal demands on your time. Our paychecks played

[00:05:14] [SPEAKER_00]: a significant role in our journey to FI, but our net worth has increased by over $100,000

[00:05:19] [SPEAKER_00]: so far this year because we always pay ourselves first. For the last 5 years, we've given

[00:05:25] [SPEAKER_00]: ourselves a raise 2-3 times more often than our employers did. And not just through real

[00:05:30] [SPEAKER_00]: estate, certainly not this year. Our raises come from being bullish about the unsexy realities

[00:05:37] [SPEAKER_00]: of staying rich. We call them our rituals. Tasks like reducing expenses that don't align

[00:05:44] [SPEAKER_00]: with our values, buy cable, consolidating insurance, revisiting deductibles, avoiding

[00:05:49] [SPEAKER_00]: fees and managing our investment costs by converting to Admiral shares in Vanguard all

[00:05:54] [SPEAKER_00]: add up. I'm not going to lie, it can be frustrating to sift through fine print and it's mind-numbing

[00:06:00] [SPEAKER_00]: to keep pressing zero until you get the right representative, but eventually you get used

[00:06:05] [SPEAKER_00]: to it and build the same tolerance you use to sit in another meeting that should have

[00:06:09] [SPEAKER_00]: been an email at work. The bottom line is that no one will advocate for your money like

[00:06:14] [SPEAKER_00]: you will. Jen Cicero says it best, quote, if you're ready to make more money, you can,

[00:06:20] [SPEAKER_00]: you just have to do the math and master the odds, end quote. Since Mr. R&R started his

[00:06:25] [SPEAKER_00]: mini retirement, we're down to one paycheck, but we feel richer. The money he earned during

[00:06:31] [SPEAKER_00]: his employment still goes to work every day while he gets to spend more time with the

[00:06:36] [SPEAKER_00]: people he loves doing the things he loves. Now that's what I call playing to win. You

[00:06:44] [SPEAKER_00]: just listen to the post titled, The Easiest Way To Get A Raise Is To Give Yourself One

[00:06:49] [SPEAKER_00]: by Kirsten Saunders of richandregular.com. And I'll be right back with my commentary.

[00:06:55] [SPEAKER_00]: I like this article because it reminds me of a time that I used to think getting ahead

[00:06:59] [SPEAKER_00]: financially was solely based on increasing my salary at work. And don't get me wrong,

[00:07:04] [SPEAKER_00]: that is certainly a part of it. But I've realized over time that how I manage the money I already

[00:07:09] [SPEAKER_00]: have has had a much bigger impact on building wealth. I also often ponder the fact that

[00:07:15] [SPEAKER_00]: we understand the importance of diversifying our investments to manage risk, but we rarely

[00:07:20] [SPEAKER_00]: consider the risk involved in having our income come from one source, our employer.

[00:07:27] [SPEAKER_00]: I used to think that as long as I was a high performer at work, my income was safe, and

[00:07:31] [SPEAKER_00]: that increasing my income was solely dependent on doing a good job. But a lot of times keeping

[00:07:37] [SPEAKER_00]: your job or getting a raise isn't so objective. It's dependent on another person's subjective

[00:07:43] [SPEAKER_00]: opinion of you. And while you can get better at playing the game, there's a lot here that's

[00:07:48] [SPEAKER_00]: out of your control. I've seen in my own career that there's a lot of risk when your

[00:07:52] [SPEAKER_00]: income is dependent on trading time for money. And the best way to manage this risk is by

[00:07:58] [SPEAKER_00]: using that money you do earn to buy assets. Think of those assets such as stocks and real

[00:08:04] [SPEAKER_00]: estate as the best colleagues you'll ever have, because they will always be able to

[00:08:08] [SPEAKER_00]: work harder than you can at earning more money. And over time, the income you can derive from

[00:08:14] [SPEAKER_00]: your assets will exceed the income you can earn from trading your time for money, significantly

[00:08:19] [SPEAKER_00]: lowering the risk of the employment game. I really like how Kirsten described W-2 employment

[00:08:25] [SPEAKER_00]: as a season, because when you can frame it this way, you can see it as a stepping stone

[00:08:29] [SPEAKER_00]: rather than something you're required to participate in for most of your life. And that's it for

[00:08:35] [SPEAKER_00]: today. Thank you for listening. Have a great rest of your day, and I'll see you in tomorrow's

[00:08:40] [SPEAKER_00]: show where your optimal life awaits.