The dream of most people is to make a lot of money. What does that mean is the question.
Money is a very personal thing, and that's the truth. A billion dollars is a lot of money, but only a few people in the world have that much. Is a million dollars a lot? In terms of total wealth, no. A small percentage of the population has a million dollars or more to leave to their children or grandchildren, mostly because real estate has gone up in value. But if someone made a million dollars a year, they would be one of the highest paid people in the world.
The amount of money a person can expect to make depends a lot on how they see themselves. This is because the two things that have the most impact on earnings—how skilled you are and how much you ask an employer to pay you—depend a lot on the person. Also, a person's skill is partly based on how confident they are and partly on how smart they are, but the amount of money they ask their employer for is completely up to them.
The two are obviously connected. You can't expect to make a lot of money with just a few skills. But many people with great skills are paid less than their peers with similar skills. Why?
The truth is that they probably didn't ask, or if they did, they didn't ask in a way that showed they really thought they deserved what they wanted. Most of the time, the boss knows how much he or she can pay, but will be happy to pay less if the worker agrees.
Obviously, the boss won't tell the worker how much he or she can really pay. But this isn't too hard to deal with in the Information Age, because you can look up salary ranges for different places and jobs on the Internet. The real challenge is not asking for a lot of money, but feeling like you deserve it.
To do that, you need to know how much different amounts of money are worth. We've already talked about how amazing it is to be a billionaire and how getting a million dollars over a lifetime is not as amazing as making a million dollars a year. What about lower incomes, the kind we usually see in our daily lives?
What does a lot mean?
In 2006, the federal poverty line for a family of four was set at $20,000 by the U.S. Department of Health and Human Services. By definition, a family that makes this much or less is poor.
In 2006, the reported median income for a family of four ranged from $45,867 in New Mexico to $87,412 in New Jersey. These numbers include both single-income and multi-income homes.
Think about a person in New Jersey who has a degree in a field with average demand. Will he or she take $20,000 a year? Most likely not. Expecting a salary of $87,412 may seem like too much, though, since that would be the average income of a family of four for a single worker.
But is it too much? Actually, no. If the median salary is $87,412, which means that the same number of people make more and less than that amount, the candidate could confidently ask for $90,000 or more. A hiring manager's response would depend in part on the industry and in part on the specific skills of the applicant. But someone else could ask for it and get it at a different job. The key is to be brave enough to ask.
A story that really happened.
When I got out of college, I knew someone who made $40,000 a year. He said that his goal was to make $50,000 a year. He worked hard to improve his education and career, and he took on special projects as a volunteer to gain new skills.
The next job offer surprised him: it was for $73,000. He took it, and was shocked by how much money he now had. But after a few months, he saw that other people in the same field made a lot more. He worked hard to learn new skills and kept up with his professional growth.
After a year on the job, he asked for a raise and gave his boss information from salary surveys and other sources. He got a raise to $89,000 and was offered a bonus plan based on how well he did his job.
He chose to leave after three years. Several top companies were excited to meet him at interviews. One person offered him $110,000, and then someone else offered him $115,000. When he decided he liked the first company better, he asked them if they could make a better offer. Despite the fact that he knew this would need to be approved, he offered to start with a salary of $100,000 until the end of his probationary period. They said yes.
Four years ago, his goal was to make $50,000 one day. He makes $115,000 a year now, and he thinks $200,000 will be easy to get in a few more years. ...why?
He asked, so I did.
