The article notes that the least prestigious jobs tend to be higher paying than many of the more prestigious jobs. I did find it amusing that “real estate agent” was on the bottom of the list, even below “actor” and “accountant”. Are people grouchy about their house value dropping or what?
Personally I don’t really place prestige very high on my list of important factors in choosing a job… I usually just tell most people I do “stuff with computers” and they just nod and move onto something else. But here’s a good time give a shout-out to my friend Tom who just graduated from Fire(fighter) Academy!
Whew! I’ve slept in seven different beds so far in the last two weeks, not including airport lounges. How about some updates?
The Big Move. Sadly, we no longer in Oregon. We are leaving a great city, great food (tachos and microbrews!) and even greater friends. Luckily, we managed to secure a very generous relocation package from our employer, complete with full-service movers that packed almost everything for us, from the dishes to the furniture. The bad news is that we had a lot less incentive to properly shed ourselves of all our clutter, and instead it’s coming with us. I’m keeping our exact location vague for privacy reasons, but I’ve hinted before that it has a high cost-of-living and is near the Pacific Ocean.
New Digs. We are actually going to be staying in a relative’s extra rooms for now. We have been living out of suitcases for a while now and it has actually been nice, so the plan is to keep living as such for as long as we can. If we don’t find any acceptable houses to buy, we will then start to look for another house to rent. Our biggest problem currently is trying to convince our relatives to accept money from us!
New Jobs. Soon after we arrive we will be starting our new jobs. Again I won’t name our employers, as sharing detailed financial information anonymously online is one thing, but sharing them with co-workers is another. I will reveal that we will now both be making six-figure incomes, and they are in categories listed in my six-figure salary survey results. Accordingly, you will be seeing a boost in our monthly net worth changes.
I’m 29 years old now. I know the number shouldn’t matter, but I’m sort of happy that all these things have happened before I turned 30. We are not millionaires or anything spectacular, but we are settling down somewhere for the long haul, surrounded by family, gainfully employed, and moving forward. What more could one ask for?
While traveling today I was reading in a local newspaper an article by Suze Orman (couldn’t find it online) about how to close the wage gap between men and women. The tips to getting a higher salary were equally applicable to everyone, so I took some quick notes:
Don’t expect them to recognize you automatically. Seriously, you may think you are on the same page as your boss, but if you don’t talk about it specifically, you may be terribly disappointed. I’ve seen lots of coworkers come out of their performance reviews in shock.
Make goals and document your accomplishments. Everything is driven by numbers these days. Work with your boss to identify goals, and then record the steps you took to reach them, and which ones you accomplished. Your boss will likely need to justify any raise to his/her boss as well, and concrete reasons help. I think this is critical.
Argue your case, and don’t be afraid to ask for a future commitment. If you don’t get what you want even after stating your case, discuss reasons why they refused, and ask “what would it take next time” to get what you feel you deserve. Get a commitment that if you reach certain benchmarks, then you will get that 10% raise or whatever.
Be prepared to quit. Sometimes you just can’t see eye-to-eye with a company. While it is often easier to find a new position while still at your current one, having a healthy emergency fund can also give you the flexibility to avoid settling for another dead-end job.
As I’m going back to being a W-2 worker again soon, I’ll definitely keep these tips in mind.
I don’t mean to be a downer on this holiday, but I still want to point out the results from CareerBuilder.com’s 2007 annual Father’s Day survey of full-time working fathers:
27% of working dads say they spend more than 50 hours a week on work and nearly 1 out of 10 (8%) spend more than 60 hours.
38% of them would take a pay-cut to spend more time with their kids, if given the choice.
25% of working dads spend less than one hour with their kids each day. 42% spend less than two hours each day.
It’s sad that some fathers wish they could cut back on hours but can’t.
My father worked long hours to provide financial stability for our family, and I will always appreciate that. I learned from him to respect hard work and the importance of really finding your own passion. However, I was bitter about what I felt was being put on the back burner to his career pursuits for many years, and that experience has always shaped my career outlook.
While it sometimes it may seem like I’m solely focused on making money, I’ve actually made an additional rule for myself: I can work crazy hours now, but when I’m a father, I’m not working more than 40 hours a week no matter what. My actual goal is to work less than 20. Hopefully I can properly share how I am closing in on this goal in the next few years by developing the right skills and and keeping the consumerism down.
Both the Wall Street Journal and CNN Money recently ran articles about a new study that concluded that American men in their 30s are earning less than their father’s generation after adjusting for inflation.
In 2004, the median income for a man in his 30s, a good predictor of his lifetime earnings, was $35,010, the study says, 12% less than for men in their 30s in 1974 — their fathers’ generation — adjusted for inflation. A decade ago, median income for men in their 30s was $32,901, 5% higher than 30 years earlier. Ms. Sawhill said she isn’t sure why men’s wages have stagnated. “It seems there’s been some slowdown in economic growth, it’s possible that the movement of women into the labor force has affected male earnings, and it’s possible that men are not working as hard as they used to.”
“The expectation that each generation will do better than their parents has become a fundamental part of what we call ‘The American Dream,’” said Morton. “But this new analysis suggests this bedrock belief may be shifting under our feet.”
The problem with statistics like this are that they really don’t tell us anything. Maybe more men are staying at home to take care of the kids, or are otherwise choosing to earn less money to balance work and life. Maybe the government’s method of measuring inflation is inaccurate. Maybe it’s due partially to globalization. Maybe it’s simply supply and demand – families as a whole are making more to dual-income households. Maybe the blue-collar jobs don’t pay as well as they used to. Maybe a 30-year old these days is more likely to have spent an extra 5 years “finding themselves”. Don’t people get married a lot later these days versus 1974? Ten different people could read these articles and come up with ten different reasons for the income decrease based on their own personal beliefs and experiences.
As for me, I don’t really get why it even matters what my father earned? Poor, rich, whatever, all we can do is see what challenges exist now, and work to meet them head on. Even if we earned 50% more than our father’s generation, I don’t see how that would change my behavior. It just creates excuses and distractions. Am I missing something?
It’s graduation time again, and I’ve heard more than my share of cheesy commencement speeches in my life. But here is one by Steve Jobs that I really enjoyed.
Here is the text of the speech as well, but Jobs is a good speaker so I’d recommend listening to it. Here’s the Cliff’s Notes summary:
You have to trust that the dots will somehow connect in your future. And the only way to do great work is to love what you do. If you haven’t found it yet, keep looking. Don’t settle. Your time is limited, so don’t waste it living someone else’s life. Don’t be trapped by dogma ? which is living with the results of other people’s thinking. Stay Hungry. Stay Foolish.
Weird fact about me: Even before hearing this speech, I would think about my mortality in order to keep things in perspective during stressful times. It really helps to strip away the fluff, and helps you do scary things like change career directions or ask that pretty girl or boy down the hall out
Even though this blog is about money, and the source of most people’s money is from their jobs, I don’t really talk about careers that much. One reason for this is because I’m not experienced at the corporate game. I’ve never reached the point in the corporate ladder where I got to boss around others. Why listen to me?
Another reason is that I believe one’s salary is not necessarily related to how smart they are, or even how hard they work. Some people are lucky, in that they love to do something that already makes a lot of money. Maybe they love investment banking, and all the numbers, long hours, and competition that goes with it. Others have tougher decisions. Maybe you like working with under-served populations and being a social worker. However, you’ll also have to accept that living in a penthouse loft with a view is unlikely to happen. I’d love to be the newest host on Globe Trekker, but I don’t think I have the talent for it. I think striking a good balance between these three factors is critical to a happy life:
However, once you do decide on a career path, learn everything you can. This could be via an apprenticeship, graduate school, or on-the-job training. Don’t just sit around and wait for things to happen for you. People making a six figure salary have one thing in common: specialized, in-demand skills. (I bet “people skills” count too.)
Also, I’ve noticed that with couples you can take the balance thing one step further. For example, if one person is happy with a stable professional 9-5 job, that might provide enough stability for the other person to pursue riskier activities like starting their own business or switching careers. Otherwise, the person by themselves may not chose to take that risk, for fear of loss of the sole paycheck or losing group healthcare benefits.
Finally, it’s not what you make, it’s what you keep. Of course, it’s also a lot easier to keep more if you make more. On that note, when late summer comes around, don’t be surprised if our net worth charts show some even bigger increases. We both now have full-time jobs lined up and both of us have the potential to earn annualized incomes in the six-figures. Unfortunately, we are also moving an area with a cost-of-living that is over 30% higher than where we are now, and housing costs that are 300% higher. So I’m not entirely ecstatic. Looking at houses online is even depressing
$100,000 Isn’t That Much… Is It?
Many people expressed that $100,000 is simply not very much money anymore, especially in certain urban areas like the San Francisco Bay Area. I went out to find some numbers to back this up.
Initially, I quoted a study that stated that only about 5% of individuals in the United States made more than $100,000. But if you take into account entire households instead, 16% of them nationwide earn over $100,000. However, in the San Francisco Bay Area almost twice as many households (31%) made that much. Here is a graph from Wikipedia that compares the income distribution among Bay Area households to the national level.
Having almost a third of households over the $100k mark would definitely skew perceptions. This is supported by the CNN Cost of Living Calculator, which says that earning $100,000 in Atlanta is comparable to earning $172,000 in San Francisco. Put another way, earning $100,000 in San Francisco is comparable to earning $58,000 in Atlanta.
That’s a bigger difference than I thought. Still, remember that the 16% and 31% figures are household figures. Also, the majority of the people that I know who work in San Francisco don’t own houses there. In the end, while making $100,000 as an individual may not be considered “rich” in certain areas, there is still no way it can be considered “poor”.
Who’s Making Six Figures?
Based on the completely unscientific comments, I made a chart showing the the breakdown of six-figure earners by job description. The categories were all very general, and some were very tough to pigeonhole. For example, what is a self-employed software project manager? Tech? Small Biz? Management?
What does this chart show? Really, not much with regards to specific professions. My two takeaways were that (1) there is a very wide variety of jobs that can make a healthy salary, and (2) you need a useful skillset and effort. Nobody responded that they simply moved papers back and forth, or that they coasted into their position. Everyone needed some combination of talent, passion, ingenuity, education, and hard work to get to where they are now.
Really, this is not to suggest that making $100,000, or $200,000, or whatever, should the primary goal for anybody. As with many things, it is about balance. Many folks noted that they used to make more money, but now make less but are happier overall. Others noted the high debt levels and long education (and thus missed salary) that come with certain professional careers.
Also, we didn’t focus on the total compensation package, including health insurance, stock options, pension benefits, or other perks. I know plenty of lower-paid state workers that have enough years under their belts to get both guaranteed pensions and health insurance during their entire retirement. Think of how much that will be worth! This was mainly an exercise in curiosity, and I’m glad I did it.
Finally, it’s not how much you earn, but how much you keep.
Even though the $100,000+ salary club gets less exclusive each year with inflation, it is still considered by many to be a sign of success. According to reports, only about 5% of workers nationwide make six figures. Although it is by no means necessary to make that much in order to lead a fulfilling life and even a comfortable retirement, I think many people (including me) are still curious as to who makes six-figures.
As I approach my 30th birthday, many of my friends are reaching or surpassing this mark as they graduate with advanced degrees or move up the corporate ladder. Here are some examples of people I know who are earning more than $100,000 per year. Keep in mind I live on the West Coast, so salaries are higher overall. (Cost of living calculator) Many of these are expected, but some may surprise you.
Investment Banker – Education needed: Bachelor’s in almost any field, preferably business or engineering/math related. If you love competition and working 100 hours a week, you can easily make much more than $100k per year.
Lawyer – Education needed: J.D. Work hard, schmooze a bit, get a good clerkship, land a job at a respected firm and you’ll be a 6F’er. As an associate you’ll also be putting in 80+ hour weeks. However, if you want to work at a non-profit, your salary will be significantly less, maybe in the $40k range.
Physician – Education needed: M.D. plus 3-10 years of residency. Salary varies wildly for doctors too. Many pediatricians make less than $100k per year, while a cardiac surgeon (10 years of residency) can make $500k+ per year. Keep in mind during residency you’ll be earning $40k a year and also working 80 hours a week.
Small Business Owner – Education needed: None. These are mostly the parent of my friends, who have created successful small businesses worth millions, from restaurants to import/export to service/construction. The common thread between all these people is that it takes enormous commitment and dedication, often at the expense of family life. Be prepared to work seven days a week, all the while knowing that you could easily lose money each month. Read the rest of this entry…
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