I Negotiated My Salary When I Was 25 (pt. I)
The impact of negotiating your income at the beginning of your career
Here's the thing: The more money you make in salaries and bonuses early on in your career, the higher your future earning streams are.
What this means is that when you negotiate for more and get it, every pay bump moving forward will be based off a higher number than if you did not negotiate.
Negotiating has the potential to make you hundreds of thousands to even millions of extra dollars in your lifetime!
Let me show you how...
Let’s say “Monica” and “Rachel” are starting the same job at the same company. Monica negotiates and gets a starting salary of $57,000; Rachel doesn’t negotiate but still gets an admirable $50,000.
Then let’s say they each earn a 3% raise every year throughout their 40-year careers. Here’s what that would mean at the end of year 40:
But people usually change jobs throughout their careers. So now, let’s say that Monica and Rachel both get new jobs every five years.
Monica negotiates and gets a 10% increase in salary each time; Rachel doesn’t negotiate but gets 7% more each time. In that case, after 40 years:
What this means: By not negotiating in the beginning or when switching jobs, Rachel lost out on over a MILLION dollars during her career.
AND this does not even account for how she is getting less money in employer 401kmatch OR potential investment returns she would have gotten if she had more money to invest!
Hopefully this was a good start in showing you the potential earnings negotiating can bring. Stay tuned for more information on how and when to negotiate!