My Top 2 Salary Secrets – How to Earn Much More, Much Sooner

I’m going to share with you the answer to a question that I keep getting asked and that is, “Keith, how do I increase my salary?”. This question keeps coming up the whole time because it’s SO important.

The answer to this is pretty simple. It’s a particularly easy concept to understand, but it’s one that I don’t think people quite appreciate how powerful it is.

It’s all around asking for a raise and why, just from a pure money and mathematics point of view, it’s really important to ask for a raise as soon as you are deserving of one.

Here’s why.

Time

The sooner you receive your raise, the more valuable it is to you.

It’s pure maths and you may know it as the compound effect.

In a nutshell, with anything that’s going to increase over time, the sooner you start, the more valuable it becomes.

It’s what happens to your savings or your pension plan.  The sooner you start saving the exponentially larger your savings will be.

And it’s the exact same with salary. If you actually start earning a year or two earlier, the compounding effect of that little tiny bit of interest makes a whopping difference over the long term.

It may not seem like much of a difference at the time, but over the course of your career it can be a huge amount, just because of the compounding effect.

 

To give you an idea – if you’re working for a corporate, typically you’re going to have maybe a 1 or 2 or 3% salary raise each year and maybe you’ll get a promotion every five years of, let’s say, between 8 and 12%.

So what does that mean?

What is the difference between getting a $1,000 raise today, versus a $1,000 raise next year?

Well…. that $1,000 is actually worth $3,000 to you if you over the course of your career.

Why? .

It’s just maths. Every year your salary is going to be increasing a little bit, sometimes more if you get a promotion or two.

Now here’s the thing.

For most companies, your salary increases at a percentage of the salary you have now. Do you recognise this? It’s a percentage increase on what you started with. The more you start with, the higher the percentage increase is.

If you start with a salary of $50,000, then you get a 10% increase, that’s a $5,000 increase.

If you are on $100,000 and you get the same 10% increase, you are getting a $10,000 increase.

The difference is, if your salary is just $1,000 higher as you start this, then over the course of your career, that $1,000 is going to be equal to $3,000 for you, versus if you had waited just one year to get that increase. Makes sense?

So whenever you’re thinking about salary increases, the sooner you get that the better. Every year earlier you get that $1,000 is essentially $3,000 for you.

The Compound Effect and Your Salary

Amount

The second thing that’s really important – this is the really obvious one – is the amount. Really obvious. If you ask for $1,000, you’re better off asking for $2,000. Or $5,000. The greater the amount of raise you get, the better for you.

Really obvious.

But think about it.

I asked for a $1,000 and I got it and that was worth an additional $3,000 over the course of my career.

What happens if that had been $2,000? Well actually it’s a straight multiplication.

$2,000 would have been $6,000 over the course of my career.

$5,000, multiplied by 3, $15,000.

You get the message?

These are the two factors to always think about. If you are due a promotion or due a salary increase, get it now. Ask for it now.

Don’t put it off till your next performance appraisal.

If you deserve it, if you’ve taken on, you know, the biggies – taken on more staff, taken on more responsibility, taken on more departments.

If you’re doing any of those, you need to be asking for that salary increase. Now.

When To Ask For A Salary Increase

It’s in your interest. It’s in your family’s interest.

Because this is money you could be spending on your kids. It could be money you’re spending on your vacations. It could be money you’re spending on your education.

So this is yours.

Go and get it.

Go and ask for it.

It’s really important that you ask for your salary raises as soon as they are due.

See you next week.

If you haven’t already done so, be sure and sign up for my FREE insights and training on how to Master Your Income.  And if you’re a podcast person you can subscribe to the Career Hacker iTunes podcast.

 

Ask for A Raise As Soon As You Are Deserving

 

The Sooner You Get a Raise The Better

 

Two Things To Consider - Salary Raise

 

Ask For Your Salary Increase Now

Transcription

(For those of you who just love my accent…;-) )

Hi. I’m Keith McEvoy, CEO of Success That Works and Founder of Supercharge Academy.

Today I’m going to share with you a question that keeps coming up the whole time and it’s around salary. This is a particularly easy one to get, but it’s one that I don’t think people quite appreciate how powerful this is.

It’s all around asking for a raise and why, just from a pure money and mathematics point of view, that it’s really important to ask for a raise as soon as you are deserving of one.

Okay. Here’s why.

The first one is: Time. This is the first reason why asking for a raise as soon as you are deserving of one is absolutely critically important to you. Here’s exactly why. If you’ve seen a few of my videos, I keep drawing this graph. It’s the compounding effect graph.

Basically, it’s that anything that’s going to increase over time, the sooner you start, the more value gets delivered and it’s the exact same with salary.

If you actually start earning a year or two earlier or if you start saving today versus if you start saving in ten years, the compounding effect of that little tiny bit of interest makes a whopping difference over the long term.

For example, if you start saving here and with interest, there is the amount and there’s time. You start saving here, you’ve seen this graph, it’s basically an exponential. So initially, it doesn’t seem to be that much but over time you managed to save a huge amount, just because of that little compounding effect of interest.

Whereas, if you start here and start saving again, same curve, look! Massive difference. Massive difference! And the only reason that difference is there is because you’ve started slightly earlier. Exact same thing happens with your salary.

To give you an idea. If you’re working for a corporate, typically you’re going to have maybe a 1 or 2 or 3% salary raise each year and maybe you’ll get a promotion every five years of let’s say it’s between 8 and 12%.

So what does that mean?

What does it mean if you get just $1,000 today, rather than $1,000 next year? Just 12 months apart. Say $1,000, everything else the exact same.

But because of this effect, that $1,000, if you get it now versus next year, is actually equal to $3,000.

Now why? Keith, you are making up numbers.

Well it’s just maths, ok?

If I give you, so let’s say you are on your course and every year your salary is going to be increasing a little bit. There’s my promotion and another promotion. That’s what your salary is going to do from now until whenever, yeah? Increasing every single year.

Now here’s the thing.

It always increases or for most companies increases at a percentage of the salary you have now. Because that sounds yeah—do you recognize this? Its percentage increase on what you started with. The more you start with, the higher the percentage increase is.

If you start with a salary of $50,000, then you get a 10% increase, that’s a $5,000 increase. If you are on $100,000 and you get the same 10% increase, you are getting a $10,000 increase. Yeah? Makes sense? Maths?

The difference is if your salary is here, if your salary is just $1,000 higher, just $1,000 (that’s tiny writing), $1,000 higher as you start this. Over the course of your career, that $1,000 is going to be equal to $3,000 for you versus if you had waited just one year to get that increase. Makes sense? Yeah?

So whenever you’re thinking about salary increases, the sooner you get that the better. Every year earlier you get that $1,000 is essentially $3,000 for you. Right?

The second thing that’s really important – this is the really obvious one – is the amount. Really obvious.

You’re better off if you ask for $1,000, you’re better off asking for $2,000. Or $5,000. The more amount of raise you get, the better for you. Really obvious.

But think about it, right?

This one here I asked for a $1,000 and I got it and that was worth an additional $3,000 over the course of my career. What happens if that had been $2,000? Well actually it’s a straight multiplication. $2,000 would have been $6,000 over the course of my career. $5,000, multiplied by 3, $15,000.

You get the message, yeah?

These are the two factors to always think about. If you are due a promotion or due a salary increase, get it now. Ask for it now.

Don’t put it off till your next performance appraisal.

If you deserve it, if you’ve taken on, you know, the biggies – taken on more staff, taken on more responsibility, taken on more departments, if you’re doing any of those, you need to be building in now and asking for that salary increase.

Now.

It’s in your interest.

It’s in your family’s interest. Because this is money you could be spending on your kids. It could be money you’re spending on your vacations. It could be money you’re spending on your education, yeah?

So this is yours. Go and get it. Go and ask for it.

Ok, so I hope this helps. Hopefully you’re getting the maths. If not, drop me a note and what I can always do is reshoot this in a different way because what I’m hoping you’re getting from this is, it’s really important that I ask for my salary raises as soon as they are due.

Hope this helps. See you next week.

If you enjoyed this video and found it useful, I’ve got two things that you can actually do right this second.

The first thing is click the button just here and subscribe to my YouTube channel and that means that you won’t miss any future episodes from me.

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If you haven’t already done so, be sure and sign up for my FREE insights and training on how to Master Your Income. And if you’re a podcast person you can subscribe to the Career Hacker iTunes podcast.

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