You Will Have The Same Salary In 20 Years – A Case For Career Advancement
I will keep this one simple.
Assuming that you just get end of the year raises that keep up with inflation(3-4%), you will be making the same amount in 20 years that you are making now relitave to the cost of goods. Obviously your actual salary will be higher in 20 years, but that salary will buy you the same amount of stuff. If you started your job at $35,000, in 20 years you will be making almost twice that much at $67,287, but that will be the same as having a $35,000 job 20 years prior.
If this is a scary thought, don’t let fear paralyze you, but be motivated by the thoughts of a better position or career. If you really want to advance your career, get out of debt. It is a gigantic step that frees you to pursue positions that you couldn’t otherwise entertain with the chains of debt holding you back.
Here are two nice articles from the personal finance community to help get you started improving your career :
Is Capitalism Always The Answer?
Health Insurance: Can’t Afford It, Can’t Live Without It.
This is all too true. Most people don’t even seem to notice it. It is much more risky to stick with a mediocre pay than to take a risk for something better. Not to mention that in a good company/position your raises and benefits will also be much better.
@nick – You are right that most people don’t notice it, because it happens so gradually and inflation is generally hard spot spot on a small scale. You don’t notice a .10 cent hike in the price of bread a year, but after ten year it is a dollar more.
aww, man that stinks!
I think the more recent price hikes (especially gas have taken a little harder toll though. It makes it a little easier to realize you are just playing catch up
I dunno. The figures in your example are approximately the same as those in my real life. However:
I’m earning $62,500 after starting as a f/t Great Desert University faculty member at $35,000 about 15 years ago; if I stay for a total of 20 years, I may reach $67,200. But only because I quit teaching and moved to a quasi-administrative job. If I were still teaching, I’d be earning about $50,000 and wouldn’t have a snowball’s chance of ever making more than 60 grand. Probably would never reach that threshold. State employees–especially K-12 teachers and university faculty–may go for years at a time without a COLA increase; in other years we may get COLA increases but no merit raises. This year, no one at my university will get either.
Fifty thousand would probably buy the same as $35,000 did 15 years ago. Sixty-two thousand buys more, no question of it: the house I live in is more expensive to maintain than the one I had then, I pay a lot more (relatively) for gas, food, and clothing, and I put more into savings.
So, while I’d agree that the raises you get in the normal course of sitting in a job for 15 or 20 years just keep up with inflation, I think the amount your salary would grow is probably less than the figures shown. It’s important to get promotions or move into better-paying jobs with other employers as time passes.
this is a good point that way too many people don’t consider. And to add to that is all of the mergers that have been taking place in corporate america. I just recently got laid off as a result of a merger and I know about 4 people who have gone through similar things in different companies.
You are right. Inflation eats up our yearly increases so you actually never gain any ground.