Today we have our latest interview with a reader who has grown their income to at least $100,000 annually.
If you’re interested in participating in this series, please drop me a note.
This interview took place in November.
Today we have the blogger from Eat Money.
My questions are in bold italics and their responses follow in black.
Let’s get started…
Tell us a bit about yourself (age, marital status, kids, where you live, etc.)
I’m 32 with a wife of nearly 10 years (wow!) and 2 toddler age children.
My family and I live in the Midwest.
What do you do for a living?
I’m an engineer in the medical device space. Essentially I help design things that go into people. It’s a fascinating job and one that I don’t take lightly.
I started out as a design engineer and have worked my way up over time to be a product/engineering manager. I work in a small company (think less than 50 employees) and perform a variety of tasks: engineering, operations, work with customers, negotiate contracts, etc.
It’s a fun environment and one that brings new challenges every day.
How much do you earn annually?
In 2019 I made $122,000.
That number will go up slightly this year.
How does this amount break down (salary, bonuses, etc.)?
My salary was $97,000 and the bonus was $25,000.
Do you receive any additional compensation/benefits from your employer (401k match, stock options, etc)?
I do receive what I would consider normal/typical benefits.
Low single-digit 401k match.
How long have you been working?
I have now worked for my employer since 2011.
My 10-year anniversary at this company is coming up fast.
How long have you earned at least six figures?
This was actually my first year. I joined the company when they were developing their technology and weren’t yet profitable. It took much longer than they thought (there is a significant amount of regulation in my industry) to get to profitability.
Because of the fact that we were losing money, there was very little in the way of bonus compensation given until last year. There were certainly some but it wasn’t a meaningful part of my compensation.
I have been very successful at my job and have grown with the company. My salary started out at $58,000 and I have grown that, on average, by 6.6% per year. While it looks like my bonus is a key driver of my compensation it was a result of compounding my income for so long at such a high rate.
One thing that I’ve learned about compensation is that, in a typical industry, it’s all driven off of percentages from the previous year. The “standard” raise in a big company is 3% and anything seen above that would be considered good. Your bonus is also a percentage of your salary.
The important point I’m trying to pass along is that it’s most important to drive up your income. If you are good at your job it’s unlikely you’ll ever make less than you are now unless you reach the c-suite where things are a bit more volatile.
What has been the key steps you have taken that have allowed you to earn this level of income?
There are just a few other people at my level in the company. One of them is our technical leader and he’s ~10 years older. The others are all 20+ years older than me which makes me the outlier.
Here are a few keys to the success I’ve had thus far in no particular order:
I am a learning machine.
For as long as I can remember I’ve been a learning machine and have always worked to develop myself. I spend an incredible amount of time learning about two overarching topics: wealth creation and business. I’m fortunate that I’m this way. I am trying to get better every day and believe that learning is a big part of that.
Here are some examples:
- A few years after I graduated with my engineering degree I approached my boss about my desire to get an MBA. We were early enough as a company that we didn’t yet have an education policy so asked him in what ways he’d help with the cost. He said if I came to him with a logical plan that he’d cover it all. I found the best value (notoriety vs cost) MBA program and he did end up covering every last dime of it. To hold up my part of the bargain I did everything I could to succeed. I ended up graduating with honors and gave him frequent updates about my work and progress. Side note: The number one priority in my life is my family. I knew obtaining an MBA would be a significant time investment. I didn’t want my kids to be grown up enough to remember me studying for school while they were playing and growing up. Therefore, I believe the best times to get an MBA are before you have children or when they are in high school.
- On average over the past 10 years, I have read a book every two weeks. The vast majority of these books cover wealth creation, business success, leadership, and personal development. I want to read and learn about things that I can directly apply to my life to get better.
- I didn’t stop at an MBA. Most people wouldn’t consider getting an MBA. If they do (bravo by the way), they stop there. I continue finding new ways to learn about new topics and invest in myself.
I am reliable.
Over time I’ve realized that a good part of being successful at your job is getting the right things done. The two overarching pieces of getting the right things done is never forgetting anything and always working on the highest priority item. While that sounds so simple hardly anyone does it. I work with people that are much more experienced and they tend to just work on the most urgent item.
With that being said I work with an app called Todoist (ESI Money actually recommended this a few years back) to track everything I need to do. I use that program to prioritize what needs to be done. Every day I work to tackle the biggest priority items.
I realize that this sounds simple. However, my boss knows that he can count on me to get the right things done. He hands things off and doesn’t give them a second thought. This is both very valuable and not as common in the workplace as you’d think.
Side note: I rarely work between 5-8 pm because I’ve been clear about my priorities with my family (see above with the MBA). Others that I work with consistently work between 5-8 pm. There is nothing wrong with that, this is just a decision I’ve made. One thing I do though is not let that keep me from getting things done. I go into work early or take care of things super late. I make sure things get done just in line with my other priorities.
I am a generalist.
Because I have learned about and have an interest in a variety of topics I have a working (but not expert) knowledge in several areas. While this may be a hindrance to a larger company, it has been a significant benefit in a smaller company.
Because I have to wear so many hats, it is a huge help to be able to have intelligent conversations about so many different topics. Building trust with my boss and colleagues over several topics hasn’t happened overnight.
I have never said no.
Being one of the younger employees at a small company leaves me doing a lot of jobs that aren’t all that glamorous, especially earlier in my career. One thing I’ve never done is say or act like any job is beneath me. I attack every job or project I’m given with tenacity to prove that I can handle it.
Over time the projects and responsibilities I’ve been given have grown considerably. I have seen several younger employees tell their bosses that certain things are beneath them. Why in the world would someone trust you with a large project if you can’t handle (or even complain about) a smaller one?
Whatever I’ve been given I get it done to the best of my abilities. Over time these small wins have built a track record of me getting things done.
I am proactive.
Being proactive is severely underrated. While you may have a certain job description or responsibilities think about what your job actually is. Your job is to make your boss’s life easier. I highly recommend someone to look outside of the parameters of their job description and think about what you could do, however small, to make your boss’s life easier.
I regularly do things that no one else in my company does just because I think it helps. These types of things aren’t easy to define so it may take some time to think through and identify opportunities but it is 100% worth it.
I am lucky.
None of the success I’ve had thus far would have happened without some amount of luck. I stumbled into a company that fit my current (at the time) and future (right now) skillset. They were growing and I was able to grow right along with them.
However, I have prepared for this luck. I have taken advantage of it. I haven’t sat on my hands and thought okay was good enough. Luck is great but, if you aren’t prepared to take advantage of it, you’ve wasted it.
Which of the following career advancing strategies did you employ (if any) and which were most effective: a. Doing well within your current company and being promoted. b. Jumping around from company to company always seeking a higher salary & responsibility. c. Entirely changing your career path from a lower earning field to a higher earning field (going back to school, etc)?
You can tell from my answers above that I have definitely taken path “A”. I have worked for my current employer for 10 years. My job responsibilities when I hired on are long in my rearview mirror.
I will add that this path isn’t for everyone. On more than one occasion I have thought about leaving for other opportunities. If you work in a larger company and are ambitious I think the best path for you is to jump companies to get more opportunity. I have several friends who have taken this route and it has worked out well. One thing I would caution you about is jumping too frequently.
What are you doing now to keep your income growing?
I am continuing to do the things I mentioned above. I still learn every day. I continue to attack all projects with the same mindset. Even after all the success, I’ve had I still get asked to do projects that aren’t all that glamorous. What do I do when that happens? I get them done just like I would any other project.
When it comes to learning one thing I would recommend is learning about things you don’t have a working knowledge of. I’m an engineer by training. While I don’t have a lot of traits of the “typical” engineer I certainly am not a boisterous salesman.
With that in mind, I have spent time learning about emotional intelligence, marketing, and leadership. Learning about these topics has brought fresh perspectives and made me even more well rounded
I’ve also started a blog. While this doesn’t seem like learning to some it has taught me so much about marketing, business development, and other related areas. One HUGE benefit that has come from blogging is that my communication is more clear. My boss has even commented on it (without knowledge of my blog). I think you’d be an idiot to not learn a thing or two about writing and communication after publishing 100,000+ words.
What are your future career plans?
I have no plans to leave my current company. I think we are just getting started and have a lot of runway left. With that being said I’m not being completely ignorant that I can’t have this job forever.
Two career paths have really been of interest as of late and think they are the most likely next step. I don’t foresee either of these coming together in the next 5 years but, if they do, I’ll be ready. Preparing myself for these paths consists of continuing to develop myself and creating other streams of income.
The first career path is being the CEO/executive of a startup or, more likely, a small business. There are so many opportunities out there and think I could do really well at something like this. I am not interested in climbing the corporate ladder of a large enterprise. I am much more interested in owning/starting something small and building it over time.
The second career path is called micro private equity. The idea here is that someone/a group would buy several small businesses and help them grow over time. This is an area that fascinates me a lot and something that I believe I’d excel at.
Have you been able to turn your income into a decent net worth (what is your net worth)?
I am a big believer in net worth and track it every month. When I graduated from school my net worth was negative $70,000 or so. Right now it’s right around $375,000. Therefore, I’ve increased my net worth by about $450,000 in 10 years.
Because I track it every month I’ve been able to see continual progress over time. It’s been extremely gratifying and educational.
While I’m no millionaire I would imagine I’d hit that status in the next 10-12 years.
What has been the key driver of net worth growth thus far?
Thus far my net worth growth has really been due to stock market gains, a rental home, and appreciation of my primary home. Nothing sexy but it has worked.
I’m a firm believer in tracking/measuring the things that matter. While a good income is a fantastic start to growing your net worth, the second largest factor in my opinion is controlling your spending.
While I track my net worth every month (have for over 5 years now) I’ve also been tracking my spending. I see lifestyle inflation ruin the possibility of a stress-free future because of lifestyle inflation. I’m not letting that happen to me.
Of course, our spending has gone up over time. I absolutely want to make memories with my family and enjoy life so spend money there. However, there is a huge gap between that and getting carried away. I’ve seen others get carried away. Do you know what it leads to? Stress.
Every month I set up a budget, track every transaction, and then debrief the month so I can understand what is working and what isn’t. This sounds daunting but it doesn’t take more than a couple of hours a month.
The return I get on those couple hours a month is staggering.
How do you plan to increase your net worth in the future?
I mentioned above how I’ve been able to get my net worth to where it is today. In the future, I plan on there being two things added to the list.
The first item I plan on growing is my rental business. Currently, I have one rental and have utilized that as a way to dip my toe into the water. It seems to be going reasonably well so plan to purchase more rentals (hopefully 2 in 2021) to get things moving in the right direction.
Over time I hope to acquire 6-12 more properties. No reason to get carried away but certainly think this is a great way to grow my net worth. Until I owned a property I didn’t really truly understand the benefits. The combination of the monthly cash return, debt paydown (by someone else), and appreciation really makes for a solid win.
The second area I hope to use to grow my net worth is in the online/digital space. I mentioned previously I’ve started a blog. The blog discusses the tools that I’ve used to grow my net worth and want to help others do the same.
While this blog hasn’t made money yet I hope to utilize the lessons I’ve learned to both monetize my current blog and create new digital ventures over the coming years.
What advice do you have for people wanting to grow their incomes?
To sum up my advice in one sentence it would be:
“Be patient in the long term and impatient in the short term.”
I think expanding on that a bit is important. Being patient in the long term is not needing to see results the next day. It takes years to build up trust and a reputation of getting things done to truly pay off. It took me two years to get my MBA and it really didn’t start paying off until a couple of years after graduation. Building up a network of relationships takes time as well.
Being impatient in the short term means attacking each day. Just because you don’t expect to see results for a couple of years doesn’t mean you should sit on your hands. Do the learning, working, and hustling required to truly win. Work to get better every single day.
To be honest that really sums up my outlook on life. I think the biggest winners in life are the ones that work the hardest AND wait the longest to reap the rewards. I have accomplished more than I ever would have thought in every aspect of life in the last 10 or so years and I truly think that I’m just getting started.