Zone of potential agreement (ZOPA): The area where both you and the person you are negotiating with would accept an offer.
When you think about how you’re going to earn and save enough money to hit your financial goals, it’s really easy to think about how you can cut expenses. Cut lattes! Recycle dryer sheets! Peel off that 2-ply toilet paper and get double the usage! Make sweaters out of dust bunnies and belly button lint!
Sure, there’s some benefit to being wise about your spending. You want to spend money on things that align with your personal beliefs and what brings you the highest emotional value. If you can make a cup of coffee at home and get just as much hedonic pleasure out of that cup of coffee as you would from buying a latte at the retail coffee joint, then you should make coffee at home.
However, the best way, if you can do it, to accelerate your retirement goals, is to earn more money. The sooner you earn more, the longer you have time for that extra money, assuming you invest it rather than let your extra wages go to lifestyle inflation. We saw that in “Sacred Cows Make Great Burgers” – sacred cow #2, that, all things being equal, earning more is…well, you’ll have to read the article!
So we know that we’re better off earning more (or, at least, we do after we read that article), but the financial planning industry is pretty woeful when it comes to providing useful advice about actually improving your income. It’s like a personal trainer telling you to lose weight and decrease your body fat without giving you an exercise routine and some dietary guidelines for how to accomplish that goal.
With that in mind, I’ve compiled some articles that I think can really help you manage your career, no matter what stage of it you’re in. Enjoy!
The Ultimate Guide to Managing Your Career
Finding that first job
When you ask a doe-eyed career counselor what you should do, they tend to give the same responses:
Follow your passion!
Do what you love!
Do that and you will likely be a starving artist. Unless, of course, your passion is aerospace engineering, in which case, proceed on.
- Follow Your Passion is Bad Advice | Cal Newport | You should cultivate your passion. Competence and success in a job usually means that, over time, you’ll become…wait for it…passionate about your job!
- Career Test | CareerTest.net | You all know I love psychology, and this career test incorporates psychology into determining what you’d be good at.
- 12 Entry-Level Jobs With Big Earning Potential | Salary.com | Hey, may as well start from a good base, right?
- Smarter Job Applications in Seconds | Resunate | If your resume and cover letter stink, you’re probably not going to get the job.
- Avoid the Top 10 Résumé Mistakes | Monster | Make sure your résumé doesn’t look like it was written by someone who was learning English as their 15th language.
Also, once you get that first job, you want to rock it!
- Want to Shine in Your First Job? Follow These 6 Tips | Forbes | Be prepared for the heavens not to open up and no angels to sing when you arrive on the first day.
Negotiating your salary
Getting the highest salary that you possibly can is the foundation for future financial success. In your next job, your current salary will be a starting point for those negotiations. The more money you make, the more you can invest, the quicker you can pay down those student loans and other debts, and the more you’ll have to spend (yes, financial planning is about spending too!). Mo money, mo problems!
- Negotiating What You’re Worth | Katie Brewer, CFP® | How to STATE your claim to what you’re worth. Don’t know what I mean? Read the article!
- How to Negotiate Your Salary | J.D. Roth | J.D. takes two timeless negotiating classics and extracts the key points that you need to know. Funny how after reading this, you’ll wonder why negotiating with car dealers seems so difficult when they start out with a number!
- Thou Shalt Not Agree | The Ladders | Learn and master “the flinch.” Watch the other side flinch.
- My Friend Rachel Made $1,000 an Hour Negotiating a New Job | Ramit Sethi | A step-by-step guide for how to rock the interview and the salary negotiation
- 10 Salary Negotiation Mistakes | Dr. Randall Hansen | It also helps to know what not to do in salary negotiation!
Asking for a raise
Assuming that you have crushed it at work and delivered way more than your boss expected (you have, haven’t you?), then you should be in line for a bump in pay. Alternatively, if you undervalued yourself during your initial salary negotiations, negotiating a raise can be a great way to claw back some of the value that you left on the table during the first round of money talks with your employer. Remember, though, it has to be a situation where both sides benefit. You’re not going to get a raise just because you ask for one. You have to make the company incrementally more profitable as a result of your presence.
- You Should Always Ask for a Raise | Wisebread | Don’t be afraid! I particularly like #s 7 and 8.
- 9 Things You Should Never Say When Asking for a Raise | Salary.com | A lot of these are limiting internal scripts that we need to get over in order to ask for what we deserve.
- 6 “Shark Tank” Tips on Asking for a Raise | ABC News | How to treat asking for a raise just like you would an appearance on Shark Tank.
- How do I Ask for a Raise? | Daily Worth | Imagining you’re asking for a raise on someone else’s behalf helps calm the jitters.
- 3 College Majors Most – and Least – Likely to Ask for a Raise | MarketWatch | Apparently what you studied in college impacts whether or not you’ll ask to be appropriately compensated in the future.
Leveraging LinkedIn and networking
Over the years, I have been an infrequent but intense LinkedIn user. In my last company, I was a heavy networker, and I daresay that networking was what got the ball rolling on our first million dollar contract and kept us going afterwards. You may think of networking as a sleazy used car salesman gimmick, but I can assure you from personal experience that it is not.
- The Ultimate Cheat Sheet for Mastering LinkedIn | Hubspot | If your LinkedIn profile is blank or not optimized, nobody will find you, or, if they do find you, they won’t take it any further.
- Six Reasons to Use LinkedIn More Like Twitter | Inc. | It’s all about exposure. OK. It’s all about exposure to the right people.
- How to Use LinkedIn to Get a Job | Business Insider | Isn’t that the idea? Find an awesome, well-paying job?
- How to Revive a Tired Network | Harvard Business Review | We know in our hearts that networking is a key to career success; however, we rarely spend the time tending our network like we should. Learn how the BCDs can help you revive a neglected network.
- 20 Networking Tips for Building Your Career | Living on the Cheap | They make a good point about when to hand out business cards. I hate the people who are shoving their business cards in your face before even introducing themselves. It’s like trying to get to third base when asking someone out for a date.
- Networking Tips From the White House | Tim Ferriss | Palms up or palms down? Read and find out which one is the best way to approach networking.
Sometimes it just gets a little stale in your cube. You want to see if the grass is greener on the other side, stretch your wings, push the envelope, and create new clichés. After all, according to the Bureau of Labor Statistics, the average later Baby Boomer had 11.3 jobs from age 18 to 46. Chances are that a gold watch and golden handshake are not in your future. It’s better to prepare for that than be caught unaware.
- The Briefcase Technique – to Earn Thousands of Dollars | Ramit Sethi | I’ve used this when trying to earn business as an entrepreneur as well. It’s simple but powerful. OK. It’s not simple…you have to do a lot of work to make it go well, but the concept is very simple!
- The 10 Best Times to Switch Jobs | U.S. News | Yes, every time someone posts a slideshow on the Internet, an angel cries, but this has some good flags for signaling change, particularly if you’ve been in a rut.
- Top 10 Things to do Before You Change Jobs | The Undercover Recruiter | I particularly like the first one – you have to give someone a reason to want you.
- How to Change Jobs With Little to No Experience | The Careerealist | Sometimes you want a job for which you have no experience. This article will give you some good ideas for how to approach it.
- 8 Steps to Changing Jobs With a Current Employer | The Careerealist | Remember, you don’t have to change employers to change jobs. In fact, sometimes, your own employer is the best place to look for a new role!
- 5 Tips for Getting a Job After You’ve Been Fired | Monster | Trust me, it happens to the best of us. This article will help you dust yourself off and get back on your feet if you’ve been fired.
Negotiating a severance
Sometimes, either by your choice or by the company’s choice, you do get an offer of a golden parachute (or, at least, a padded kick out the door). Immediately, The Clash’s Should I Stay or Should I Go starts playing in your head. You usually don’t get much time to make an answer one way or the other. What do you do???
- Four Reasons to Accept Your Company’s Buyout Offer | The Chicago Financial Planner | Sometimes playing poker isn’t the best strategy. Roger Wohlner explains why.
- The Ins and Outs of Negotiating Severance Agreements | Hennessy Law Firm | Usually, an employment contract is going to include terms like non-compete clauses and non-disaparagement agreements. Your counter? A pre-negotiated severance agreement up front.
- Severance Negotiations | Mark Carey, Esq. | Sometimes you’re terminated for questionable reasons. Mark Carey explains how to document your claims and the process you’ll go through in negotiating severance packages.
- How to Negotiate a Severance Agreement | Fox Business | Mostly nothing new except for how much different people in different roles can expect in a severance package.
Benefits besides pay
Sometimes due to corporate oddities, you can negotiate benefits other than what comes in your pay packet. These can often be beneficial, as you can get pre-tax benefits that you would otherwise have to pay using your after-tax dollars. Yes, thank the IRS for those vagaries. But, if after using all of your newfound wisdom on negotiating the highest salary possible and not being able to budge them an inch more, you may be able to find other areas where your employer is willing to give you benefits that help you be a more productive and happy employee.
- Five Things You Should Negotiate At Work Besides Your Salary | Lifehacker | This is a good list, although be careful with #2. I am not a fan of being asked to do more work and have more responsibility while receiving the exact same compensation.
- How to Negotiate Non-Salary Benefits | CareerBuilder | This tells you how to do your homework before the negotiation even begins.
Telling them you’re retiring
Isn’t that the goal of career planning? There’s a beginning, a middle, and an end! As much as your employer loves you and wishes that you’d work forever, eventually you’re going to get a promotion to the retired life. Here’s how to handle that transition.
- Ready to Retire? What to do Before You Tell Your Boss | CNBC | An excellent list of what you need to do before you spring the news on your higher-ups. Too bad the tips come from someone who works for a company that charges front load fees on mutual funds.
- 6 Ways to Resign Gracefully From Work | AARP | Sometimes you leave on great terms, and sometimes, not so great terms. Here’s how to be the better person in the latter case.
- Timing of Notice Can Carry Unwanted Effects | Chicago Tribune | This article has excellent advice about when to make the big announcement of your pending departure.
- I’m Retiring. Can I Tell My Boss I Haven’t Been Happy at Work? | NY Post | A reader asks if he should let his boss know how much the work environment has sucked over the past few years.
- What if Your Employer Doesn’t Want You to Retire? | FFS Cambridge | What if your retirement announcement immediately causes stress ulcers for your boss? Ooh, the joys of leverage!
What do you think? Are there any articles I missed? Let me know in the comments below!