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How I increased my income 62% in 14 months…

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... and why you might not be able to do the same. I'm sorry if I got your hopes up with the title, but I couldn't fit the whole idea in. I'll make it up to you by not giving some abstract generalizations about how to double your income (I hate those), but giving you the concrete steps I took. Be forewarned that you might not be able to duplicate what I've done, but perhaps one or two of the ideas will help you. More than likely you'll chalk some of it up to the happenstance and luck.

It started off when I was at my old company. A co-worker found a list of salaries on a copy machine or a burned CD fell into hands. I didn't really dig into the means that the information was acquired rather than the information itself. I found that I needed about a 30% raise to get what most of my equals at work were making. One could say that was not a very good day. In fact, I found that I made less than 5% more than one particular junior level co-worker - and she only worked 4 days a week!

At this point, you can imagine what I did. I went to ask for a raise. I couldn't say that I know everyone is making less, but I made a very strong case with proof of how I went above my job description - finding and recruiting our new CTO. I also used data from Salary.com that showed that I was being underpaid (way under their 25 percentile range). It didn't matter how good of a case I made, I was told that there wasn't much money, everyone was taking salary cuts, and invited to go look for a new job. As a consolation prize, they gave me a 6% raise leaving me still a far distance behind my co-workers. Alas, at least the raise was something. I had increased my income a small amount. Getting the raise actually made me more angry. It meant that the company could "forget" about me and another raise for probably another year.

It was at this point that my wife, not happy with her own job, decided to apply for a military transfer in San Francisco. It turns out that you can tell the military when and where you want to go if you are a pharmacist rather the other way around. The position she applied for was going to be more responsibility and get her closer to being a high rank officer. However, it was a 1 in a million shot as everyone applies for San Francisco since the military adjusts the housing pay significantly. Much worse, my wife had no experience at this kind of job. As usual, she continues to amaze me and got the job. Combine that with my dissatisfaction at my current job and we were on the move - paid for by Uncle Sam.

It was my search for a job in Silicon Valley where I got the bulk of my income increase. There were no raised eyebrows when I asked for a 40% raise due to the cost of living. In fact it was to be expected as it would put me in the middle of Salary.com's range for my experience. However after a few interviews, I got one offer that came in at onlya 22% raise. Except for the money being a little low (but still more than I made before), the job was exactly what I was looking for. It came with a lot of intangibles that didn't show up in the paycheck. One of them being free lunches, snacks, and dinners. While this saved me money, I can't count this in my increased income.

I had started Lazy Man and Money a few months previous to moving out west, but it was at this point that it occurred to me that there might be money to be made by advertising on blogs. With only a few readers and a total Adsense of something around $5 for 5 months, I decided to go all-in with blogging. I went as far as paying $10 for this domain name and another $20 or so for a years' worth of hosting. I lastly spent $24 to become a Friend of PFBlogs.org. It actually hurt to spend this money, but once I got going this website started to become a business and earn a modest income - less than I'd get if I spent my time at a part time job.

Just recently my company announced a weird perk that I've heard of at only one other company. If you live within 3 miles of the office you'll get some extra money in your paycheck. Happily I already do live within the range, so I'll pocket another small chunk of change. Overall it's going to amount to another 5% bonus. Come October, I will have been at my job for a full year since I started, and I think it will be reasonable to ask for a raise to my base salary. Since I'm not exceptional at my job, I don't know what I'll get, if anything, but I would expect something that's at least around the cost of living increase.

So to review the keys were to a) start off extremely under-paid b) ask for a raise c) move to a locale of high cost of living for a bigger raise d) start a business where you can extra income e) get lucky with a job bonus. I suppose I'm stuck offering you generic advice after all.

I didn't write this to gloat. I wrote it because it seems like most people live each day like the last. I was in the same situation. I just wasn't making significant progress towards my financial goals. What can you learn from all this? Start thinking about ways you can make more money. Really get obsessed with it just a little bit. Then implement something.

Aerosmith sums this up well in their song, Get a Grip:

Same old same old every day
if things don't change you're just gonna rot
Cause if you do what you've always done
you'll always get what you always got
Uh could that be nothin'

Posted on August 9, 2007.

This post deals with: ... and focuses on:

Income Growth

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33 Responses to “How I increased my income 62% in 14 months…”

  1. anonymous says:

    I don’t know where you lived before, but a 62% raise that involves moving to the bay area isn’t much of a raise at all.

    I live about 800 miles North of the bay area. My mortgage on a 2600 sq. ft. house positioned on 5 acres of land, a 15 minute commute from work is $1200. In the bay area, that would be an $6K per month mortgage (at least, and assuming all else is equal).

    I’m glad you like it out there, but they couldn’t pay me enough to live down there…

  2. Lazy Man says:

    I lived in Boston. Mortgage prices are ridiculous to talk about here around San Francisco, so I don’t bother – just rent and be done with it. My rent now is similar to what I paid in a Boston suburb in 2002 – for an equivalent unit. Most of the other high costs can be kept down as well. This means that the raise does indeed go into my savings.

  3. Eric says:

    Thankfully you have that BHA money. That’s got to help. I admire the heck out of you for doing that. I’m 26 and knocking out the rest of my degree and planning on my company merging one or two more times before I eventually get the axe. Then I want to take my severance and roll off to the valley. I’m really nervous about it, but if I can stick it out long enough, I can make a little bit of money, and move back to Alabama and live like a king. I just can imagine my same sq. ft house that cost me $111,000 costing me $600,000 up there.

  4. Did you find the Friends of PFBlogs to be worth it? I have be tossing that one around?

    I am working on being pretty under paid right now too. I am about to get promoted to a senior engineer, and I know that they will need to bump my salary about 3k bump just to get me to the minimum senior salary.

    I don’t argue too much, because I am close to finishing an MBA, which my company is paying all $52,000.

  5. OK, Step 1: Get wife to join Army.

    Most get-rich-quick schemes overlook that step.

  6. NatalieMac says:

    Hey – it worked for me, though a bigger increase over a longer period of time. I basically did steps a, b, c, and d and scored a 380% increase over a period of three years. If I could just do e somehow, I might be able to make that 400% in four years.

  7. Brip Blap says:

    Raising your income is always a tricky way to look at things. Raising your ‘net profit after taxes and housing’ is a better way, I think. My income has gone up about 50% in the last 5 years all while living in the New York City area (first in Manhattan, now right across the river in Jersey). However, my expenses have gone up about 51% in the meantime due to the exponentially rapid increase in housing prices in NY. I bought a house before the REAL run-up in prices but after it was already ridiculously high.

    Nonetheless, that 62% is fine, as long as your expenses haven’t gone up 62.01% (and it doesn’t sound like they did). I find that raises are less important if you can (a) live within your means and (b) figure out alternative ways of generating income. In the last year I’ve raised my hourly rate by 11% and my housing expenses (and other expenses) remained flat, so that’s worked out better than my 50% over 5 years with the huge initial increase moving from a rental to a purchased home.

  8. I count nominal +36% (6%, 22%, 5%) but do not see the other half of the 62% or the net gains (cost of living).

    I always appreciate real-life examples so thank you for posting.

  9. Joseph Sangl says:

    Great job!!!

    I gave myself a HUGE raise just by paying off all of my debt! I then negotiated myself a nice 50% pay CUT so that I could go do what I was put on earth to do.

    It is amazing what you are able to do when you are debt-free, have money in the bank, and a dream to pursue!

  10. Hello. Is your new San Francisco location where you got the $35 parking-in-fire-lane ticket because there is not enough parking for you and where you had the car break-in for the $720 loss? Thank you.

  11. Lazy Man says:

    By new SF location if you mean a year ago, then yes. The parking issue has been resolved and it wasn’t really any better than my other location in Boston.

    The $720 car break-in can happen anywhere. I’ve had friends have their cars broken into in Boston and elsewhere.

    These one time events are not on-going costs of the location.

  12. Moneymonk says:

    I have to agree with Joseph, paying off debt can also give you a raise

  13. That’s really good! However, did your available cash flow increased?

    When I finished my university degree 5 years ago, I took the first job I saw. Then, I looked around and my salary increased by 23% just by changing job (2 blocks away from my previous one). Then, I worked as hard as I could for my 3 months probation and I got another raise. Within a year, I increased my income by 40% without having my expenses increased. Unfortunately, my situation was like you ; I was simply underpaid. I do not think I would be able to reproduce the same increase next time!

    Was the $24 for being a PFblogs.org friend worth it?

  14. Midg says:

    Congrats on such nice increase in income. Hopefully you will see more nice increases living in the Bay Area. Salaries can be quite nice here. I’ve lived and worked as a software engineer in the Bay Area most of my life. A group I worked in was down sized at one company and a coworked decided it was time to look for a new job. A week later he started a new job with a 20% raise. The day he started that job he got a job offer at another company for 20% more than his new job. He gave 2 weeks notice that day. He ended with a 44% pay increase.

    My luck usually runs the other way. I’ve had only 2 pay raises in the last 7 years. But I’ve kept my job when hundreds of others around me were laid off. I’ve survived 10 lay-offs in the last 8 years.

    I’d advise you to becareful about asking for pay-raises in the Bay Area. That can work if you have backup but I have seen many shown the door who have tried.

  15. Nice! Now you know why I live here. I love the weather too!

  16. Jonathan says:

    Congrats on the catchiest post title of the day. Oh, and taking action, having a kick-butt wife, and all that extra money too. :)

    I think you should look for another job soon if you’re not satisfied, all my friends in the Bay Area got at least $10k more for each job jump, even if it was from a failed startup to another failed startup.

    “If you live within 3 miles of the office you’ll get some extra money in your paycheck.”

    What’s the reasoning behind this? Save the earth? Or that fact that you can be called to work easily?

  17. Shadox says:

    Here is another vote for the Bay Area.

    Midg – I don’t know what you are talking about when you say be careful in asking for a raise. I think that you may be working for a really lame company. I would seriously consider looking for another place to work, if you are worried about ASKING for a raise.

    Lazy Man – this is a great post. I too was underpaid (still somewhat am), and have received about a 30% raise in the past 7 months. It’s almost worth it to be underpaid! ;-)

    On the blog side – my blog makes about $2 a month. Sweet, sweet income…

  18. the baglady says:

    This post made me laugh because I found out about my coworkers’ salaries too at one of my jobs. The CFO put everyone’s salaries and offer letters on the network drive under a shared folder called public/companyname. It was pretty sad because I was an engineer but got paid less than the newly hired front desk lady. Also we found out that the women engineers definitely got paid less than the men. That really pissed me off so I actually told one of the company founders about it. He was really surprised by all of that and gave me a 11% raise and gave a lot of other engineers raises too. Then they had the CFO move all those important files to a folder with more security permissions. I left the company shortly after that and got another raise at the new company. In the Valley I guess you just get the most raises by changing jobs.

  19. Tim says:

    ok, i’m never going to read this blog again…come on!!! quoting aerosmith?

  20. Lazy Man says:

    Shadox: People still haven’t discovered your wonderful site? I added you to my blogroll maybe it will bring you a tiny bit of love.

    Jonathan: I believe Facebook offers $600 for living with a mile. I don’t know why there’s extra money for living close. Maybe it’s because there are studies done that show if you live closer, you get more work done rather than fighting traffic.

  21. Midg says:

    Shadox: Read your post “Asking for (Another)Raise”. I think you are right on target.

    I’m not worried about my pay. I’ve always been paid at the high end or over the scale for the work I do. Part of the reason is I am good at what do and part is I will to do whatever it takes to get the job done. I like the company I work for. It’s one of the best places I have worked. The only reasons I’d consider leaving right now is to get a shorter commute. I live in South San Jose and commute to Oakland.

    If you are underpaid you should ask for a raise or find another job. You have nothing to loose in either case. I was saying be careful because I have seen people let go right after asking for a raise. I wasn’t in any of those meeting so its possible the person asking did something bad like say give me a raise or I’ll quit or find another job. When asking for a raise stay calm, have you facts straight, and be polite.

  22. Patrick says:

    Congratulations! It’s always great to see your income grow. Especially with something like your blog, which you put so much work and soul into.

  23. Dong says:

    I’ve never asked for a raise, but I do think if you ask for one you should ideally have another job that you would take lined up already. Leverage both ways is important.

  24. Lazy Man says:

    By asking for a raise, it would probably be more like asking for an annual review. It’s been my experience that it’s unusual to stay at the same price range for more than a year. If nothing else companies typically realize that inflation happens and can at least give a 3% raise. It’s not like I’d be asking for 15%. I would just like to be recognized for being there a year and being much more valuable than I was 8 months ago. Of course I’m not at a year yet, so it’s a moot point.

    The job market in Silicon Valley is my leverage. I can very easily find a new job and/or we can survive quite well on just my wife’s income.

    My situation is probably different than most people, so yes, people should ideally have another job lined up before asking. If asking for a cost of living raise is a fireable offense, I’m better off getting out of there anyway.

  25. Lazy Man says:

    I’d be asking for a 3% cost of living raise. If that’s a fireable offense I probably don’t want to be working there anyway.

  26. MoneyNing says:

    I live 1.2 miles from the office. I need to forward this article to my boss!

    I work for a small company and we usually get a review where it’s standard practice to get an automatic raise. Actually, my boss has once told me that if the employee doesn’t get at least 3% raise, he wouldn’t be working here anymore.

    It sounds like not all employees should expect an automatic raise every year from what you are saying but can you confirm?

  27. Flexo says:

    Thanks for sharing these experiences. My company is pretty stingy about raises, but they’re usually pretty good with low-to-average automatic increases as long as you “score” a 3 out of 5 (no one ever gets a 5, people rarely get 4s) on the annual review. It’s worse working for an expense center rather than one of the money-making businesses of the company. Anyway, glad the blogging is working out for you, too. The bulk of my income increases over the last two years has come from my blog.

  28. story says:

    Thanks for sharing all this. I think the coolest thing about it all is that you and your wife are both so brave to take consistent action toward getting what you want. I think often taking any kind of action can make a huge difference.

  29. Harm says:

    I have to say, living in the Bay area would be worth a lot in
    terms of quality of life….
    btw, I hope you aren’t paying too much to pfblogs, they just
    aren’t accessible any more.

  30. I love this blog.

    I remember the time when I cried because I couldn’t get a job, any job. My husband would get on the phone and call around for me….(because I was so down that I couldn’t do it myself) When I recovered a bit, I bought a used thermal-paper fax machine for $15 and faxed my resume until I got a job at $8 per hour in a software company. They gave me a raise to $10 per hour in two weeks on the job. LOL..

    It was Haven. I thought I will work there till the day I am ready to retire.. LOL… Was I wrong.. I got bored very quickly…

    A couple jobs later, I was lucky to lock into my own micro-small business and I am now a full time special event entertainer.. By the way, it could be a great part-time gig too, if like this kind of things.

    As for me, I am a full time balloon artist. I am paid to do what I do best, goofing around.. How much do I make? $100-$250 per hour and I work on improving these numbers.

    The best things is, I am in total control here. My previous employers tried to re-hire me back. But, I wouldn’t work for anyone where I am not in total control now…

    I recently gave away that fax machine on Freecycle to someone who is desperately trying to get employed at any job…. I felt her pain…

  31. […] #7: How I increased my income 62% in 14 months – […]

  32. […] for the crossover point, a year ago, I might have been closer, but with the increase in my income over the last year, I fall short. I’m almost exactly at 1X my income. I’ll happily postpone my retirement […]

  33. Jess says:

    I’m puzzling over the rationale of bonuses for living within three miles.

    I would think providing commuter bonuses for those in more distant job pools would increase the number of qualified applicants.

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