Earners,

Whether you believe me or not, it’s very likely that you are going to earn millions throughout your lifetime.

If you started working at 25 years old making $50,000/year and stayed at the same company with a modest 5% raise every year, you will have earned $6.04 million throughout your life. That is a pretty low bar if you ask me.

So it’s more a question of how many millions, how quickly you will earn them, how much you will retain and how much you grow what you retain. The best way that you can influence that end number is to be laser-focused on your average annual increase in compensation.

Those Sweet, Sweet Percentages

Have you ever heard about the butterfly effect? Where if you travel back in time and proceed to sneeze when you weren't supposed to and that in turn leads to a series of events that causes LeBron James to reject his career as an NBA player to become an accountant? Well - it’s the same with your career earnings. More clearly, small adjustments throughout your career have a multi-million dollar influence on your earnings over time.

This can include which job opportunities you take, how hard you negotiate your job offers/raises, which projects you choose to work on at work, what side hustles you pursue alongside your career etc. If you can make adjustments throughout your career that upwardly influence your average annual earnings increase, the exponential math will take you to the promised land. Let’s look at how influential each percentage point can be.

In each scenario, you start at 25 years old making $50,000/year:

So what?

You may look at these numbers, like me, awe-inspired to figure out what the hell you can do to make those percentages increase every year. Or, you could be thinking “So what?! That doesn’t include taxes, expenses and life in general!”

Okay sure - so let’s assume the government takes 50% of everything you make (they don’t, but let’s just say they did for this example). Then, let’s take that baseline 5% case. That leaves you with $3,019,994 post tax. If you were to save 20% of your post tax income, that leaves you with $603,998. That’s with a 0% increase in your savings or it being invested - that’s literally if you kept it under your mattress. It would be well into the millions if invested in the market over that time and that’s with an INSANE tax of 50%. After a fairly aggressive stress test of life expenses, we are still talking a TON of money. Furthermore, the reason your lifetime earnings matter so much is because your earnings set the table for your personal bottom line and is the biggest lever you can pull to change your financial life. Any way you slice it, these percentages matter a whole hell of a lot. They should be a key focus in your financial plans.

Now, is it a bit ridiculous to expect to earn 10% more on average per year for your entire life? Maybe…or maybe not. Remember that with one career move to a new company, it’s not unheard of to see a 20-30% increase in compensation, which picks up the slack for those years that you may have a lower increase, such as a cost of living / performance bump of 5-6%.

Run The Numbers

Below I have included the calculator I used / will likely keep using for our different scenarios. Feel free to check it out - you can also use others but the calculations should be the same. Maybe I’ll make a super cool one for you someday. It’s essentially a summation of your earnings with the percentage growth baked in. Something along the lines of:

Lifetime Earnings = Year 1 Earnings + Year 2 Earnings i.e. Previous Year Earnings x (1+y%), where y is the average annual increase, then you just repeat the addition for however many years you would like.

But we aren’t in prehistoric times, so no need to do all that math on paper. I encourage you to play around with the numbers. It’s super fun and similar to a long-term investing calculator, which I am sure we will chat about very soon.

https://www.calculators.org/savings/lifetime-earnings.php

Overall, I want you to see why you should absolutely sweat that yearly raise, as it can compound ridiculously over time. The math doesn’t care if your boss is a jerk. If they aren’t giving you those sweet percentages, it’s time to find someone who will, baby.

Lastly - I wanted to ask: have you been enjoying The Career Earner so far?! Please let me know! Reply to this email and tell me if you have been liking the articles!

Earn more,

Nate