If you follow my journey a little, you should know by then that I’m not the most frugal guy on earth. Though I respect frugality and anti-consumerism, I still enjoy spending money “normally”, going to the restaurant with friends once and then and I also own a house where I’d like to raise my (future) kids.
In order to live that life and reach all my goals, I needed to be able to increase not only my dividend income at a rhythm a lot above inflation, but also my salaried income. Here’s how!
Why am I working so hard on increasing my salary?
Because more salary equals more capacity to fully refund my mortgage and personal debts at a faster pace while saving a lot to invest in quality dividend growth stocks. This should help me to retire before my 45th birthday which is in 13 years.
To have an healthy budget, one can decrease spending and increase income. Decreasing spending is a lot easier than increasing income actually. But at some point, except if you’d like to sleep on a bench-park and eat at the dollar store, you won’t be able to cut them more than to their minimum. Right?!
Someone could argue that I could sell my house and live in a cheap apartment but even cheap apartments can cost a lot these days and the rent always gets indexed by inflation (or more based on offer and demand which is what happens around my job office). I could live with friends and share the rent, but nah… my friends are just too… Well… I love them but… some of them aren’t very… hygienic! 😉 This part of my life is over! And I’m glad it is!
I could sell my car and ride my bike, but here in Canada you’ll see that it’s pretty cold to ride a bike most part of the year and I would have to pedal 60 miles per day just to go to work back and forth… I’m not that in shape yet… I could take the bus, but for me, taking the bus all along would take me twice the time it takes if I partly take my car and the bus and I would be spending more than 3 hours and a half (heavy, stupid, cruel traffic) every morning just to go to my job one way… I’d still have to come back after.
Since I work downtown, apartments would cost twice as much as my mortgage so no savings there and I don’t want to live and raise kids in an apartment in the big city. I spent countless hours thinking about solutions just to end up telling myself that I should just endure and retire early. Less trouble! Plus, this “lost” time is used to share my journey with you on my blog! 😉
To cut spending even more, I could eat only very inexpensive stuff but I like eating good food. That’s one of the things I enjoy the most on earth so I’m not interested in cutting too much there. Also, even if we cut, inflation on food is a lot faster than on anything else here in Canada. Meat, bread, they increased at rates far above inflation in recent years and I suspect it’s a tendency that is not going to reverse.
But, seriously, I could still compress my budget to some extents and I will. But for me, it was only part of the solution and honestly I don’t really want to as you can read here… (doesn’t my excuse sound like “sorry Mrs Brown, my dog ate my homework”). I’m just happy that way and I enjoy to complain.
Real inflation is a lot more than 2% – here’s why!
I didn’t do any serious study on this. I didn’t compile any statistics to support my opinion here, but judge by yourself.
Inflation is eating our power of purchase slowly but surely. If you accept that your salary stagnates or even decrease (job loss and new job at a less decent salary – which often happen these days) then you accept to impoverish yourself over time.
Last year, taxes on my house increased by 20%. The year before, by 14%. This year, I anticipate the same kind of increase since they already have announced it in the news. Electricity bills are going to increase by 4,6% in 2014. Food price, as I said, has increased at a rate a lot higher than inflation to my own belief.
My mom was working in a grocery and saw price of food increase and quantity decrease at a high pace in recent years. I know it is not very scientific but my point is that food price increased a lot in Canada.
But companies have a trick to hide their price increase. The container remains the same. They only increase the price a little at the time every year. But at the same time they decrease the quantity in the container. It doesn’t show. But you get less for the same price thus increasing the price per unit. Nice strategy huh?!
When they say that inflation is at 1,6% it always makes me laugh because it’s just not true. It’s funny how the government like to treat citizens as if they were stupid cows. My bus pass has been increased by more than 3-5% clip every year for the past 5 years. It’s a public service! Gas for my car… Well I just don’t want to go into that discussion…
House price rose by more than 4%-8% every year in recent years in Canada.
I’d like the economists to stop lying to people. It is possible that the “global” inflation is just 1,6%. But when you earn 30,000$ per year you only spend your money on housing, food, transportation. And in these fields, inflation is well above 1,6% while your salary increase (if you’re lucky enough to get one) is often less than 1,5% per year.
When I realized that, I understood that I had to increase my income by at least 5% per year if I could. I would have loved to be able to increase it by a lot more than that, but I had to be realist… 5% is already a lot in that market.
How to increase your income by getting a promotion
One of the fastest way to increase your income without going back to school is for sure by getting a new promotion.
I’ll share with you seven tips to help you get a promotion. I don’t pretend it’s the Saint-Graal but it has worked for me more than once.
#1 – Start over new
You have been working in the same position and for the same company for years? Quit and start over somewhere else.
I don’t say it is not feasible to get a promotion if you’ve been there for a while but the problem is that everybody has already an image of you, of what you are and of what you can do. You could change you reputation slowly but it’s gonna take quite some time and chances are that you will fail because if you go too fast, people are going to notice and might think you’re acting weird. And if you go too slow, you might retire before you get a promotion. Finding the right pace is not an easy task and changing what people think of you is not easy either.
If you start fresh somewhere else, people won’t know you. You’ll have a hundred days or three months to show who you are, what you are worth and your potential. All the attention will be on you during that time-frame. After that, you will become another piece of “furniture” owned by the company if you fail to get noticed.
Remember the last time you bought a new car. You probably noticed everybody on the highway driving the same car as yours? But after a while, you stopped…
It is the same thing when you get hired somewhere. People notice you. They talk about you when you’re not there. They make an opinion. And one day, they stop… Your goal is to make sure everybody has the best opinion of you before it’s crystallized in their mind. And make sure key people of the company have good things to say about you.
#2 – Become an alpha male or female
When you’ll get your new job, take the time to analyze everybody. Who are the leaders? Who are the followers? Who can help you get a promotion or make you get fired? Who are the negative leaders, those influencing the crowd negatively and be mad at the managers for their “wrong” decisions.
If you want to get a promotion, you’ll have to make sure to avoid staying around the negative leaders, and avoid being classified as a follower by those who take decisions.
You’ll want to be seen as a positive person who is part of the solution and able to lead others and motivate them to reach their objectives.
Make sure you speak to everyone and make good impression. Don’t talk behind the back of others and study cliques. There are always groups within an office. Some are powerful some aren’t. Make sure powerful ones like you and support you while powerless ones respect you.
#3 – Dress and act like the true leaders
An alpha male don’t stick with the crowd, they enjoy the company of other leaders. This doesn’t mean you should only talk to the leaders. In fact you should talk to everybody positively but make sure that you slowly start to look and act like other leaders. Make friend with them.
Be cautious not to look like the manager’s pet though. But remain present in their mind.
One way to differentiate yourself from the crowd is to be dressed like a leader. But don’t over-exaggerate! If managers wear suits and ties and employees wear jeans and sneakers, then maybe a pant and a shirt tucked into it with nice and clean black shoes will make you look professional. Just look a little better than the crowd, and while time will pass, slowly differentiate yourself even more by occasionally wearing a tie or a suit without a tie.
In french we have a saying “l’habit ne fait pas le moine”. Which means that it is not because you are dressed like a monk that you are a monk. But, in people’s subconscious, if you are dressed like a manager, they will probably already treat you differently.
#4 – Be good at what you do
Make sure to reach and surpass your objectives. If you need to study at home after work for a while do it. Be great, but don’t fall into the trap of being too specialized. Leader’s are able to evolve well in many environments and tasks. Make sure you show that trait.
If you want to get a promotion you need to be very good at what you do but show that you would be even better at what you want to do.
#5 – Become a resource inside your team
There is a handbook of policies, procedures or something else like that?
No one seems to know them by heart and no one wants to search about that subject but everybody has to refer to them frequently? You’ll see that people are asking a lot of questions to others about the same subject. It is the same in every company. Something is very important and boring so people have a tendency to be lazy about it and they prefer asking others than to do their own researches.
This is your chance. Become the master. Study these procedures or that guide by heart and become the reference for your colleagues and, better, for the managers. Being resourceful helps a lot and managers will notice you.
Talk about it in team meeting and show that you want to help you team. It will position you as a positive leader in the team. Try to reach that position within 6 to 12 months maximum.
#6 – Find or propose solutions to resolve team of job problems
There are always inefficiencies in a team or a job. Be the one who finds them and become the problem solver. Try to think outside the box. It should be easy for you. You are a newbie there.
Make sure key people are aware. Leaders are problem solvers.
#7 – Share your plan with the right people
You know what promotion you’d like to get? Your 3 months are over and you slowly became a resource in your team? It is now time to let key people know what you want!
You should know who can become your mentor and make you get a promotion by now. You should already have a positive contact with that person too.
Share your plan with him or her and seek for his or her help. Make sure you show that person that you respect her, her knowledge and that you are willing to learn more, that you are well-motivated and positive.
Be modest. You are asking someone to help you. Be helpful and help that person in return.
Important stuff to remember :
Getting a promotion might take some time. You will need to build your credibility and win small battles to eventually win the war.
Promotions are given to people who have leadership, who have the same views then their boss and affinities with them. They usually give promotion to influential people (alpha male or female) that can make people be a better team.
Be and act as a leader. Make sure influential people are aware and that they will help you and 95% of the job is done.
If they post a job offer and everybody thinks that you will have the job, it is because you succeeded in getting it.
You don’t get a promotion during an interview. You have to get it before the interview and even better, the posting should be posted just for you. They won’t say it. But you’ll know.
If you succeed in positioning yourself as if you were already doing the job (without using authority) than you’ll get the promotion.
Don’t stay too long in the same position. Make a couple great realizations, get noticed and jump further.
This is how I increased my salary from 42,000$ in 2008 to 89,000$ in 2013. And I just got another promotion last week!!!
Do you have any other tricks or comments to share about getting promotions? Have you gotten a promotion recently?
Image courtesy of Franky242/ FreeDigitalPhotos.net