By the end of this issue, you’ll have a clearer way to think about what actually increases your income, whether your current salary is limiting what you believe you can earn, and how to use each raise to building more freedom, not a life that needs a larger paycheck.

This week, I said three things that probably sounded like separate ideas:

But they are really all part of the same conversation.

Your income is not determined solely by how hard you work, and your current salary is not necessarily an accurate reflection of what your experience is worth. 

Over a decade I multiplied my earnings more than tenfold, and to be honest, if I had to build my career again, I would still chase the money.

When I was younger, a larger salary was totally the final goal, but as I grew older, I realised that financial security, not the large salary, was really the true goal. 

I say this because money solved real problems, it created breathing room, it gave me choices that were not available when nearly everything I earned was already spoken for. Looking back, I realise how few choices I had when I struggled to even pay rent each month.

As I got older, I realised there was a second part to the goal: I did not want to build a life that required that paycheck. I wanted to use a temporary income to build things that could outlast the job.

I worked incredibly hard throughout my career, but I did not suddenly become ten times smarter, ten times more capable, or ten times more hardworking as my income increased. 

Don’t get me wrong, I worked myself into the ground and totally burned out, but it didn’t just happen overnight and working harder wasn’t the only thing that multiplied my income.. 

What changed was the value and scope of the problems I was being paid to solve.

01  I moved towards more valuable problems

I moved toward roles with more responsibility and greater scope, and found that the more valuable the problem I could solve, the more valuable my work became to the companies hiring me. 

02  I learned what the market would actually pay

I stopped assuming that my current employer had the final say on what my experience was worth. I researched what similar roles paid within my industry and outside it, looking at both base salary and total compensation.

An annual review tells you what your current company has budgeted for you; interviewing tells you what another company may be willing to pay, and there can be a big difference between the two. 

When you start interviewing and testing the waters, one conversation can be anecdotal, but when you start to see a pattern across several conversations, it starts to look a lot more like market data.

03  I was willing to move when my growth stalled

My biggest pay increases did not come from annual reviews. They came from changing companies, and sometimes industries, and learning to negotiate far more confidently than I had earlier in my career.

Keep in mind, it’s pretty standard for most employers to offer a 0-3% annual raise. There were years when I worked incredibly hard and my income did not change at all.

That does not mean you have to leave every time someone offers you more money, but it is difficult to make an informed decision when the only company you have asked to value your experience is the one already paying you.

ONE IDEA TO KNOW A Higher Income Can Make You Less Free

Getting the higher salary is only the first game. The second is making sure you do not immediately build a life that consumes all of it.

Lifestyle improvement is not inherently bad. I spent more as I earned more. I travelled. I bought things I wanted. I made parts of my life easier and more comfortable. But I tried not to upgrade every fixed expense at the same time.

A better house, a newer car, and several small monthly upgrades can all feel affordable individually. Stack enough of them together, however, and the income that was supposed to create freedom becomes the income you cannot afford to lose.

That is how golden handcuffs are built. Not always through one extravagant decision, but through dozens of perfectly reasonable ones.

THE ADVANTAGE Use The Money To Build Freedom, Not Dependence

Most career advice asks: How can I earn more?

Most financial advice asks: How can I spend less?

I think we need both questions, but I would add a third:

What is this income building that can eventually make the income less necessary?

For me, that meant increasing retirement contributions before I became accustomed to the extra money, building investments outside retirement accounts, and creating enough financial flexibility that every career decision did not depend on my next paycheck.

I also started tracking net worth rather than using salary as the only measure of progress. Salary told me how much I was earning. Net worth told me how much of those working years I had actually kept.

Look at the last meaningful increase in your income. How much of it permanently increased the cost of running your life? How much built savings, investments, flexibility or future options? How much went to paying off debts?

There is no perfect percentage. The point is simply to notice where the money went and then decide what the next increase is meant to build before it arrives. 

Career leverage helps you earn more.

It comes from solving more valuable problems, taking on greater scope, understanding the market and being willing to negotiate or leave for something better when your growth (or income) stalls.

Financial leverage helps you need the income less.

It comes from keeping enough of what you earn that the next career decision is not dictated entirely by the next paycheck.

One without the other can still leave you stuck.

Career leverage without financial leverage can produce an impressive salary and very few real choices. Financial discipline without career leverage can make progress unnecessarily slow.

The real advantage is building both at the same time.

In this week’s full conversation, I’m sharing the five things I did as my income grew, and how I tried to use a higher salary to build freedom rather than greater dependence on the paycheck.

WATCH THE FULL CONVERSATION → HERE

What would you want your next increase in income to fix or build?

Hit reply and tell me. I read every response.

Charlotte
Founder, The Redhead Advantage  ·  Build a life you’re proud of.