How to Give Yourself a Raise When Your Boss Won't
We all want to earn more money at our jobs. Unfortunately, sometimes the company we work for doesn’t have the resources (or simply isn’t willing) to pay us more for our labor and skills. This leaves it up to you to give yourself a raise. Thankfully, there are a few different ways to increase your cash without working the night shift.
Change your perspective
I looked at my expenses an entirely different way once I started thinking of them in the context of my pre-tax income rather than my net.
Let me explain: if you own a car and spend $200/month on gas, $100/month on insurance, and $200/month to park at work, you might think your monthly transportation costs are $500, or $6,000 per year. They’re not. You actually spend much more than this. If your average income tax rate is 25%, you actually need to earn $8,000 in gross income to afford those $6,000 per year vehicle costs. What percentage of your salary is $8,000? I’m guessing it’s a fair chunk of change devoted only to shuffling you to and from the office. If you can switch to public transit, which is typically a tax-deductible expense, you not only reduce your overall transportation costs, the tax advantage means you pay for it with your gross income instead of your net, making it more affordable from all angles.
This point of view doesn’t just apply to vehicle expenses: take a hard look at buying lunch on workdays or how much you spend on your professional wardrobe. It might be time to change your ways, or even change jobs.
Pay your debt
Want to make your income go further? Ditch your debt. For every $100 of your net income (that’s $133 of your gross income!) going towards debt each month, it’s $100 less that can be used toward any of the endeavors above or toward other goals, like home ownership. The sooner you eradicate your debt, the sooner you can keep all the money you work so hard for. So long as you still owe to creditors, the money you earn isn’t really yours.
Furthermore, like I mentioned above, your debt is something you pay with your after-tax income, which means you have to gross much more to afford it. The sooner you pay off what you owe, the sooner you can keep more for yourself. If you really want to give yourself a raise, reduce how much claim outside creditors have on your net income.
Become a shareholder instead of an employee or consumer
A number of publicly traded companies offer employee share purchase plans, which let employees purchase shares at a discounted rate and often hassle-free by deducting the amount right off their paycheques. Nevertheless, very few take advantage of this. When I worked for Apple, we were allowed to purchase shares at 15% below their average market value over the past six months. This meant I automatically got a 15% return on my money invested and, as the stock grew over the year, those gains became mine as well. I more than doubled my investment in Apple stock when I was an employee, and I can tell you they definitely didn’t double my salary in the same timeframe!
If the company you work for is not publicly traded and doesn’t have stock to offer, it’s time to start investing in companies that do. Learn how to invest in the stock market and allocate a portion of your income each month to grow your portfolio. Passive income through dividends and capital gains will boost your income each year—without you having to do anymore work.
Start a side business
As many as 1 in 3 millennials consider themselves entrepreneurs and already have a side business. If you’re not already part of this side hustle crowd, now is the time to join. You can create a small business out of your home or online, and even a few extra hundred dollars per month can translate to thousands added to your net worth each year. If you’re lucky, your side business could grow to produce an income even greater than what you earn from your full-time job, giving you the opportunity to leave and work for yourself. If there’s one way to always ensure you get a raise at work, it’s to own the company yourself.
There are a number of ways to add more money to your bank account without putting in overtime at your job—you just have to find them. Change the way you see your money, change the way you spend it, and finally change the way you earn it. You’ll find it’s easy to increase your salary by 10%, 20%, or more.
Flickr: littlemoresunshine