How much is one raise worth to me?
It’s worth way more than you think.
We live in an era where delayed gratification pays significant dividends, especially if it’s financial. But physiologically, our brains push us to focus on short term gains, on immediate gratification. This is why it’s so hard to get people to do what’s best for “future you.”
Retirement savings and making healthy lifestyle choices are the most common modern examples of how delayed gratification and compound interest pay dividends.
• Saving $5k a year starting at 22 with net you over $1M by age 67
• A 500-calorie daily calorie deficit will have you lose over 50 lbs in a year
The impact of a one-time raise is just as significant, but no one is talking about it. This is particularly surprising because there’s an element of immediate gratification if you’re able to increase an offer, yet only 39% of professional workers tried to negotiate their last job offer.
And that data is from 2017, when there was a significant shortage of skilled talent in the job market. Today, even fewer professionals are comfortable negotiating salary because they’re concerned about losing an offer by asking for too much. But in reality, they’re leaving thousands of dollars on the table.
A $10,000 raise is worth much more
A $10k raise now is worth over $500k, HALF A MILLION DOLLARS, in career earnings if you’re working for 30 more years.
That figure accounts for inflation, but that’s it. Earning more now makes it easier to land a higher paying job. Earning more now means contributing more to your retirement. Earning more now means having more money to invest.
It’s not easy to negotiate an increased job offer, but you’re likely leaving over $500k on the table if you don’t at least try.
Want to know what a one-time salary increase can do to your career earnings? Check out our Career Earnings Calculator.
One crucial element in salary negotiation is setting yourself up for success. Make sure you answer the dreaded “what’s your target compensation?” question effectively.
And when you have an offer, consider working with someone on our team to maximize your final offer.