How to increase your income as a millennial

Welcome to the letter this week.

The last few letters have been about millennials’ need to better understand financial independence. This has included how you can think of retirement vs financial independence, how to find your place in the financial system, and practical steps to take to manage money.

This week, I want to present a topic included in financial independence that is not often discussed: how to increase your income.

There are many options to increase your income.

I’ve spent 10 years working in the staffing and employment industry, and I have a unique perspective on income and common behaviors around it. In this career field, I have placed hundreds of people into professional jobs of all levels, from corporate leadership to administrative assistants and everything in between.

Across the professional world, the most common approach to increasing income is to receive promotions over time and earn raises and bonuses. There’s nothing wrong with that. Taking this approach and leveraging the steps in A Millennial's Guide to Financial Independence will take care of you financially and bring you to financial independence.

However, there are additional ways to accelerate your journey to financial independence.

The way to accelerate this journey is to increase your income. Here are four strategies to increase your income:

Strategy 1: take a new job

This one is simple. Some employers are good at raising employees’ pay over time and some aren’t. If you have been employed with a company for over 5 years, props to you. It’s a sign of both loyalty and competence. The national median for job tenure was 4.1 years in 2022, according to the Bureau of Labor Statistics.

However, regardless of your competence and loyalty, your employer may not have the structure in place to reward you with significant pay increases.

How do you know if your pay is lagging behind the market for your skill set? There is great data available on the internet for most careers on websites like Glassdoor.

Data on sites like this is somewhat accurate, but it doesn’t account for your exact job history, skills, resume and current market opportunities. So, here is my recommendation.

If you have 5 years of experience or more with your employer:

• Apply to 10 jobs on LinkedIn. These need to be jobs that are relevant to your experience for which you meet at least 75% of the requirement. Rarely do employers find 100% matches and are often willing to interview someone without all required experience.

• Talk to at least 3 of the companies you apply with. If you don’t get responses from 3 of the 10, apply until you get at least 3 responses. It’s not crazy to apply to 30 jobs.

• Ask those companies two things:

  • The pay/salary range for the position

  • After they provide the first number, ask what flexibility they have for their ideal candidate

• Consider the data. This will give you 100% accurate data for what you can earn with another company. This gives you options, and options give you power. Those options are:

  • If you want to stay with your employer, bring this data to them. State your interest in remaining with your company, but your desire to catch up to the market financially and ask for a pay increase. If they grant it, you win and if they don’t, you now know where they stand, and you can make a well-informed decision to consider other jobs.

  • If you are open to those jobs, you have already started the process and continue down the interview/job offer trail.

ADP, a national payroll company, showed that the median salary increase for those who changed jobs in 2022 was 15%. This shows that it is normal to receive a pay increase with a new job.

We work in a competitive marketplace. Employers want good talent and are often willing to provide competitive job offers to candidates who can meet their needs.

I’ll give an example. I work with a contractor that came from working for another employer for over eight years. She is skilled, driven and a fantastic team player. The company she worked for went out of business and she came to work with me as a contractor. When she was hired, she was offered a premium to her prior salary. This was to compete with other offers and provide the typical premium contract workers receive (more on this in option 3). Within two years, she outperformed and earned a rate increase. Within two years of leaving her full-time role, she now earns 80% more than she did in her prior role.

An 80% increase across two years is a best-case scenario example. However, it was her skills developed over that time period that the market finally caught up to. It won’t always be this drastic, but I provide this example to show you what can happen when you consider your options.

I’ll finish with this for the extra-loyal people out there. Loyalty to an employer is good. However, employers are trying to achieve a business objective and employees are a means to that end. Businesses have business objectives, people have real-life human objectives. They are never totally aligned, so if you have long tenure with a company, it is completely ok to consider leaving a good employer for the purpose of increasing your pay and accelerating yourself toward financial independence.

It takes courage to step out and change your job situation but leaving you the comfort of your situation could earn you a higher salary elsewhere.

Strategy 2: sales

I’ll state my bias upfront: I’ve been in sales for 10 years. It has allowed me to stay with the same employer over this time and meaningfully increase my income.

Before going into sales, I could only picture sales in terms of a cheap car salesman. But once I was exposed to sales, I realized how different it can be.

Here is why more people should consider sales:

• Sales allows you to earn money for exactly what you produce. Rather than trading time for pay, you trade results for pay. It has changed my idea of work. It means you aren’t limited by salary bands and annual pay increases at your employer’s discretion. If you want to earn more, you have the ability to do it based on what you can produce.

• Sales doesn’t have to be pushy or sales-ey. The best salespeople are able to close deals without their clients feeling like they are being “sold” on anything. Great salespeople grow their income by building great relationships, representing a great product and staying consistent with it over time. Many sales roles don’t require you to push customers into anything.

• Sales jobs exist in almost every field. Sales isn’t just for salespeople. Products and services have to be sold in every industry for business to function. Those businesses often need people skilled in specific domains in order to sell that product/service. One of the most common examples I see in Houston is oil & gas corporations hiring engineers into sales roles. They need people who understand the technical part of engineering that can also communicate well with people.

Strategy 3: work as a contractor

There is a world of employment that exists that many full-time employees never consider. That world is contract employment. This is when an employer contracts employees of a consulting or staffing agency to work for them. There are many reasons to do this, and I’ll avoid that here for the sake of time.

Here’s why this is relevant to you in terms of increasing pay. I’ve commonly seen full-time employees increase their take home pay by 20-30% from making the switch to contract work. Some reach as high as 50% or more (as in the example above).

Like sales jobs, contractor jobs exist in a wide range of fields across the US and internationally.

You may be sensing a trend, but again, the same process of applying for jobs can be implemented here to explore pay opportunities as a contractor.

Strategy 4: side hustle

The internet has enabled business like no other time in history.

Over the last ten years, my primary route to increase my income has been through sales. However, for the first time last year, I started a side hustle to experiment with starting my own business.

In this process, I researched several different types of online businesses, and I’ve included a few here that I think are viable, although the options are endless:

• Ecommerce: This is the route I went. I set up a high-ticket Ecommerce store and sold high-end tools and machines. I made sales but after over a year, I decided not to continue. Many people make money in Ecommerce and it’s a viable business model. Like anything, it takes effort and consistency to see success.

• Copywriting: Content all over the internet from blog posts to social media posts are often written by copywriters, who write content for business or individuals. This is a job that is done fully online and on your own hours. It is heavily freelanced and allows you to grow your own client base and work as much as you choose.

• Coaching/consulting: For those that have a skill they have developed either within or outside of their full-time jobs, doing freelance work as a coach/consultant to individuals and businesses is another option.

• Fun option: If you are willing to hustle, there are fun options like GaryVee’s Trash Talk that can open your mind to side hustle possibilities. I thought Trash Talk was a cool example of making money on the side. Serial entrepreneur and mega-millionaire Gary Vaynerchuk believes anybody can earn up to $80,000 a year in a side hustle like this, flipping garage sale items.

Conclusion

People feel powerless when they don’t have options. The purpose of this letter is not to lobby for any of these options, but to say that there are options for you. You don’t have to make any of these changes. But if you feel stuck financially, I hope this gives you hope and helps you realize that we live in an amazing society and economy that allows you to increase your income. Despite the negativity of the news and politics, there have never been more options.

Next week’s preview: negotiation

I include this preview because it is extremely relevant to this week’s letter.

Great negotiation can bring you better success financially. Learning negotiation skills can help increase your success across the four options included in this letter and across so many other areas of life and business.

It’s a powerful tool that can be used ethically to empower you on the path to financial independence. Next week’s letter will be about what I’ve learned negotiating over the last 10 years and how you can use it for your benefit.