In a world where your Financial Independence equation is inextricably linked to:
Income minus expenses = savings rate
There is a lot of talk about in the blogosphere about achieving FI through frugal living to maximize your savings rate but less focus on how you make the most of your biggest asset – you – to optimize your income!
So why is there so little discussion?
Well, in any early retirement discussion, cutting out unnecessary expenses (or perhaps more appropriately, making the right spending choices) definitely has its place but it also has its limits. Telling someone to not buy that new car, or not be suckered by that smashed avocado on toast is easy – but how to maximize earnings potential – that’s a whole different ball game.
That’s not to criticize, I can understand the frugal living devotees but I’m not one of them. Not everyone wants to cycle to the store or live in a caravan knitting their own yoghurt so earning more is the only way to marry up with those early retirement ambitions.
To make it simple we can boil it down to three (legal) ways to maximize your earnings potential:
- Start your own business and become the next Uber or Air B’n’B.
- Become a YouTube sensation (perhaps eating spoonfuls of cinnamon).
- Get yourself a career.
I can’t help you with 1. or 2. but with over 30 years of working for one of the world’s largest consulting firms where I had responsibility for advising some of the largest global corporations as well as coaching, training and motivating the next generation I’d like to think I have some useful and practical insights to share.
As an additional benefit, it also seems to me that for some (not ALL just SOME) they are seeking FI because they’ve become disillusioned with work or possibly bored because of a perceived lack of progress. I’ve seen it so often and let me tell you some of this inertia is self-inflicted. A more fulfilling career with a higher earnings potential might reduce the desire to FI early or at least make the journey easier!
I am amazed when I read that graduates expect to never repay their student debt (“so why worry about it”) whereas I believe even those with a modest ambition should be capable of earning well into six figures. I say “capable of” as nobody is going to hand it to you on a plate and, especially in a large organization, where it can be difficult to get noticed. But with my top 10 tips, you have a much greater chance of success even if (like me) you are an average candidate.
So let’s jump in.
Tip #1 – Qualifications are not everything
There’s a war for talent out there and while a few years ago a degree was a must for getting a good job, the market has moved on and now even the largest consulting firms will consider people directly from school. A degree is still useful but do you really need that masters? Almost certainly not! When I was recruiting I was much more interested in those candidates who could show me some relevant experience (or even non-relevant experience provided it was interesting!). Adding Language skills is also a huge bonus.
Tip #2 – Take an interest in the organization
I used to run a class for students who had been with the organization for 2-3 years (and often longer) and I would always start that class with two questions:
- Who is our global leader
- What is our strategy
In a class of 25, I was lucky if anyone knew the answers. All the information was available online and our leader was regularly on TV but still nobody had made the connection.
Being able to understand what the organization stands for and where it’s going should form the basis of how you ensure your goals are aligned in your career discussions.
Tip #3 – Do everything to the best of your ability
Today’s millennial typically has an expectation of what ‘type’ of work they should be doing and is very conscious of whether it’s ‘at their level’ or ‘contributing to their development’. Here’s the thing though, if you’re too choosey about what you do then colleagues will be reluctant to approach you. Just do what you’re asked to do to the best of your ability EVERYTIME (even if it feels menial) and people will remember you as someone helpful and willing. As you build that trust, more challenging tasks will come your way – I guarantee it.
Tip #4 – Think about what you want to be famous for
Every large organization has a pyramid where there are only so many opportunities as you climb higher. Organizations are multifaceted and constantly changing so while you need to have a broad understanding of how the whole organization works, in order to make yourself stand out from the crowd you need to become known as the ‘go-to’ person in a particular field.It doesn’t need to be anything big but if you can demonstrate that you know one thing better than everyone else it will make you stand out. And here’s the best part, you should also pick something that you are really interested in or good at and then it becomes so much easier.
Tip #5 – Ask for what you want…
…but be prepared to listen. I remember a number of situations where the first time I became aware of someone was when they were sitting in front of me with a resignation letter as they thought they have been passed over for promotion or a pay rise. In large organizations, people won’t necessarily look out for you and you won’t get a promotion just by hoping that people recognize the good work you’re doing. You need to take ownership of your destination and if you expect a promotion in 12, 18, 24 months’ time – say it! That way you will not only set expectations but also flush out any potential blockers. But don’t just set the expectation, ask what you need to do to get there and go out and do it!
Tip #6 – Get yourself a sponsor
Everybody needs someone fighting their corner and particularly you need someone who has an influence on those who will make critical decisions about your career including promotions. Trying to have an influence on the leaders and decision makers will be much easier if you have inside knowledge of how those decisions are made, what you need to do to stand out and who your competition is. And the best part is most leaders will respond positively to a coaching request from a more junior staff member as it really shows that you’re taking your career seriously.
Tip #7 – Surround yourself with the right people
Sitting way down at #7 on the list but for me way higher. The best piece of advice I ever had was “don’t try and be the best at everything, focus on your strengths and surround yourself with people who complement your weaknesses”. I don’t think I’ve ever been that great at what I do but by never being afraid to ask for help from real experts some of that shine rubbed off! A word of caution, this doesn’t necessarily mean people you like – remember this is work – it means people who complement you.
Tip #8 – Don’t think you need to work long hours EVERY day
There’s no doubt that making it to the top in a large organization requires an amount of commitment that sometimes involves personal sacrifices. But here’s the thing, people remember mistakes for a lot longer than they remember good deeds and we make the most mistakes when we’re tired. You’ll achieve a much better result if you show you’re able to build a team that can deliver solid results every time …error free. The more you can do that the more flexibility you’ll get around how you manage your hours.
Tip #9 – Say positive things
It’s easy to complain at work and much less easy to talk about the good things – that’s human nature. But it will hold you back if you’re seen to be someone who’s complaining all the time. Don’t confuse that with giving feedback – giving and receiving feedback is an essential part of development but it should be done at a certain time and be both factual and constructive. The rest of the time you should thank people and talk positively about what the team and the company are doing to make people’s lives better. You might not believe it all but, rightly or wrongly, that’s seen as an essential quality of leadership.
Tip #10 – Be flexible and be ready to take action
You’ve tried points #1 through #9 and nothing seems to be working so maybe you need to move. That can be either a new department, new company, new city, new country or perhaps a combination of all of those! Large organizations love flexibility and adaptability. It’s often a big decision, especially if it involves moving away from family or friends, and I have seen many situations where people opting for redundancy over relocation or missing out on promotion because they weren’t able to move. I’m not saying that’s wrong or right but at some point that’s a decision you will likely face and if your priority is your FI journey then you may need to do it. I never had a fixed view on where I wanted to end up, but I knew I wanted to keep moving forward. The bonus is that every time you show flexibility it puts a deposit into your career ‘bank’ and as you become more senior and have more control over your own destiny you should be able to make withdrawals!
You might dream about FI, about traveling the world or sipping cocktails on some distant beach. Saving hard and investing well is part of the equation but with investment returns falling stoking the FIRE with more income will get you there so much faster and in order to do that you need to take ownership of your career….or develop a taste for cinnamon.