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How Getting a Raise Can Cost You blog post image

How Getting a Raise Can Cost You

How Getting a Raise Can Cost You blog post image

Getting a raise at work should be all good. But many people fall into a trap and end up in worse shape financially. Discover how to stay out of the trap.

We discuss the trap that comes from getting a raise on The BIGG Success Show today. Here’s a summary of that discussion.

This show was inspired by our latest free resource. It helps you quickly discover how your finances compare to an average American in five key areas. (You can sign up below to get your free copy.)

Do you think a pay raise is a good thing? Of course, it is. Right? But only IF you understand the inherent problem that comes with it. That’s what we want to discuss with you today.
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When to ask for a raise for BIGG Success

The Best Time to Make a Pay Raise Request or Ask for a Promotion

When to ask for  a raise for BIGG SuccessWhen’s the best time to ask for a pay raise?

We were completely surprised by the answer.

Listen to this post! Click a player to hear George & Mary-Lynn on The BIGG Success Show Podcast! (Duration 4:22)


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[haiku url=”http://traffic.libsyn.com/biggsuccess/00845-011713.mp3″ title=”The BIGG Success Show #845″]
New research shows that, if the head of your company is a man, you’re likely to get a raise when his first daughter is born.

And female workers benefit more than the males! Women’s pay rose over one percent, almost twice the rate as men’s.

But if the baby’s a boy, you can actually expect to make less, no matter what sex you are.

So here’s the BIGG spin on this research: If your boss has a girl, jump with Joy (or whatever the new girl’s name is). If it’s a boy, run and hide!

Now is the time

The good news is that you don’t have to wait for a birth. But you better hurry!

Mark Di Vincenzo, author of Buy Shoes on Wednesday and Tweet at 4:00, says we’re in the best time of year to ask for a promotion, assuming your employer’s fiscal year is the calendar year.

The fall is generally not a good time because companies are looking to save money. January brings the start of a new fiscal year and a fresh budget.

He says 16% of all promotions occur in January.

Now think about that – each month represents about 8% of the year (1 month divided by 12 months in the year).

So January is double what you might expect.

In other words, now’s the time to get your promotion. You have two weeks if you’re reading this on the day we released it.

The BIGG spin

Okay, so that’s what the research shows. Now it’s time for the BIGG spin:

When is the best time to ask for a pay raise? After you’ve earned it!

We say that somewhat tongue-in-cheek, but we are serious. BIGG success is about entrepreneuring your life.

Your career is part of that life. Therefore, think like an entrepreneur to be a BIGG success in your career!

But it begs the question: How do you think like an entrepreneur in your career?

It comes down to one thing: results. When you make a pay raise request or ask for a promotion, talk about results.

For example:

  • How much have you impacted the bottom line?
  • Have you spearheaded an initiative that increased sales?
  • Can you point to cost-savings you’ve been able to achieve for your company?

You’ll be in the strongest position if you can show quantifiable results.

How much did your efforts impact the bottom line?

You can expect a raise in proportion to that impact.

But if you can’t do that, can you tell a good story? For instance:

  • How did you make customers happier?
  • Do you have letters or notes or any other evidence to show with your request?

But so far we’ve only discussed the past. Make sure you show you’re also thinking about the future:

What ideas do you have now to improve the bottom line going forward?

Show your boss:

  • you’re not a one-trick pony
  • you’re still looking for ways to increase sales
  • you’re still trying to wring unnecessary costs out of the system
  • you are still thinking like an entrepreneurial employee

It leads to BIGG success!

What are your tips for asking for a pay raise or a promotion?

Direct link to The Bigg Success Show audio file | podcast:
http://traffic.libsyn.com/biggsuccess/00845-011713.mp3

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Make 55 Percent More Money – Part 2

watch_time Last time, we discussed using the way a venture capitalist invests as a model for how we invest our time. We talked about a 4-step process to create a portfolio of activities that generates the greatest return.

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The example

Now we want to look at an example. Let’s say that you make $100,000 a year. You invest 2,500 hours a year – 50 hours a week for 50 weeks – to earn that money. We immediately see that you’re making $40 an hour.

We’ll simplify the 4-step process we discussed last time. Let’s say that you found that 20 percent of your activities generate 80 percent of your income. The old 80/20 rule. We’ll call these your highest-value activities.

So while you earn $40 an hour from your entire portfolio of activities, you’re actually making $160 an hour from your highest-value activities.

Also assume that further analysis showed that you aren’t making any money from 20 percent of your tasks. These are your lowest-value activities, which are really weighing down the overall return on your invested time.

before-snapshot1 

A bigg jump in income

Looking at the lowest-value activities, ask yourself if you can eliminate any of them. Let’s say you determine that all those activities are a complete waste of your time. Further assume that you could spend all of that time on your highest value activities. It’s unlikely that this would be the case, but it illustrates our point simply so let’s go with it.

Under our assumptions here, your income would increase 80 percent. You would make $180,000 instead of $100,000. Instead of making $40 an hour, you’re making $72 an hour. Sounds pretty good, huh?

But it’s really just making sure you’re allocating your time – your most precious resource – most effectively.

after-snapshot1 

Make 55 percent more

The problem is it’s not realistic to think that 20 percent of your time is completely wasted. In fact, we bet you waste very little. A more realistic assumption is that you would have to pay someone to do some portion of these lowest-value activities. But you can afford it now!

In fact, we found that you could pay up to $160 an hour for those activities and still break-even. But we want to do better than break-even.

So we assumed you would pay $50 an hour on average for those activities. In that case, you would make 55% more even after paying someone!

Synergy

Now think about it, you’re paying someone $50 an hour and before you were only making $40 an hour. This is consistent with things we’ve seen in our own businesses as we focus on higher-value activities.

But here’s something else we’ve found – your highest value activities may our lowest value activities. This is where synergy comes in. By partnering with people and organizations around core strengths – we work together, with you doing what you do best while we do what we do best – everyone makes more money without investing more time.

The importance of testing

But what if you just don’t have the money to hire someone to do these things for you? It’s important to test. Just try investing a little more time on your highest value activity.

You may have to give up something – even a little downtime – while you’re doing this. See if you make more money. If you do, keep feeding that task. To do that, find ways to delegate those lower-value activities for you, even if it costs a little money.

Just like a venture capitalist, if you keep funding those activities that generate the highest return and you move away from things that don’t, you’ll make that bigg money you know you’re worth!

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Thank you so much for reading our post today. Until next time, here’s to your bigg success!

Subscribe to The Bigg Success Show in iTunes. 

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Direct link to The Bigg Success Show audio file:
http://media.libsyn.com/media/biggsuccess/00328-021109.mp3

Related posts

Moving Beyond Personal Productivity

Are You a Victim of Your Own Success?

(Image in today's post by bluegum

Make 55 Percent More Money – Part 1

watch_time We recently did a couple of posts about project selection – how to choose the projects that are best for you. First, we talked about knowing if you should invest your money in a project. Then we integrated the value of our time into the project selection methods.

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Now we want to extend that concept. We hear a lot about the right mix of assets when it comes to investing in our retirement portfolios. But we don’t often think of the activities we perform – how we invest our time – as a mix of assets.

Investing time like a venture capitalist allocates money

We should because the things we do should add value to our lives or we shouldn’t do them. So we want to approach our investment of time like it’s a portfolio … specifically, a venture capitalist’s portfolio.

A venture capitalist invests in a bunch of companies. Then they see how they perform and make decisions. If a company is hitting its marks, they keep funding it. If not, they don’t. They are constantly allocating money to the companies that look like they will generate the greatest return.

We can use this as a model for how we invest our time.

Find your highest value mix of activities

We’ve come up with a four-step process to determine those activities which deserve more of our investment of time and those tasks that should get less. So we can make more money without investing more time.

Step 1: List all the activities you perform.

Step 2: Place a dollar value on each of those activities.
It’s relatively easy to figure out the value of activities that make you money, but what do you do with those tasks that don’t? You want to look at two scenarios:

  • How much would it cost to pay someone to do it for you?
  • How much could you make in that time?

For example, spring is about here. It will be time to get out the lawn mower. For the sake of simplification, we’ll ignore the cost of owning and maintaining a mower. Say you could find someone to mow your yard for $50. In that time, you could earn $75 after-taxes. Under these assumptions, mowing your own yard costs you $25.

Step 3: Rank your activities from high to low.

Step 4: Create a portfolio of activities that generate the highest return.
Just like a venture capitalist, you want to invest more time in those activities at the top of your list. You want to “fund” the winners (i.e. invest more time in them).

To find the time for those activities, look at the bottom of your list and find ways to eliminate or delegate those tasks. One by one, you’ll find more time to invest in your higher value activities. 

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Get the tips and tools you need to be a BIGG success.
Subscribe to the Bigg Success Weekly – it’s FREE!

Limitations

Admittedly, there are limitations to this process. Some activities cannot be measured with money. Going back to our example about mowing the yard, you may really enjoy that task.

It also doesn’t account for the fact that you need some down time to recharge. This is definitely a quantitative, not a qualitative, process.

This was the set-up. Next time we’ll discuss an example so you see how powerful this process can be. You’ll see how to make 55 percent more money without investing any more time.

Thanks so much for stopping by our site today. Until next time, here’s to your bigg success!

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Subscribe to The Bigg Success Show in iTunes. 

Subscribe to the Bigg Success feed.

Direct link to The Bigg Success Show audio file:
http://media.libsyn.com/media/biggsuccess/00327-021009.mp3

Related posts

Moving Beyond Personal Productivity

Are You a Victim of Your Own Success?

(Image in today's post by bluegum)

Starting from Scratch – Part 2

scratch_beginnings Today on The Bigg Success Show, we continued our discussion with Adam Shepard. Adam is the author of the book Scratch Beginnings, which describes his year-long real-life experiment to see if the American Dream is still alive. Last time, Adam told us about the initial stages of his experiment and what it took to begin his path toward independence. Let’s get back to the conversation …

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georgeAdam, have you ever thought about becoming a Wall Street investment banker, losing all your money and turning to the government for help?

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adam_shepard
I have not.

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marylynnMaybe that would be an interesting experiment! Adam, there was a guy in the homeless shelter who said something to you that helped you get a job that paid well. Can you tell us about that?

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adam_shepardThat’s my favorite part of this story. That was really the turning point for me in Charleston. I had been applying for jobs and two weeks in, nobody was hiring me. I was having spaghetti dinner at the homeless shelter one night and complaining about the economy. I mean, here I am – Adam Shepard, the king of the American Dream, “you can do it,” I’m proving the Dream – and I was complaining at a homeless shelter! The great thing about the shelter is that nobody is afraid to share their opinion; they’ll tell you what they really think. There was a guy – Phil Coleman – who piped in and said that I had to go out there and get the job. They weren’t going to call the shelter, which was the number I had put on the application. So I went to the moving company the next day, just like Phil Coleman had told me. I said, “Kurt, my name is Adam Shepard. I’m the greatest mover you’re going to find. So hire me or not. I’ll come in and work a day for free.” I just gave him this speech and he hired me on the spot. What’s interesting is that I took advice from a guy at the shelter who I wouldn’t have looked twice at in my “real life.” So that was a great humbling experience and it helped me turn the corner on this whole project.

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marylynnSomething else – you waited for that guy at the moving company to show up. I think a lot of us expect that phone call. We think we’ve done our part. We went in and filled out the application. Now they need to call us. But Phil encouraged you to go and do whatever you had to so you could have a face-to-face meeting with the guy who would hire you.

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adam_shepardExactly. And the moving company job was a job that I wanted. I was going to do anything possible until he sent me out the door with a definitive no. It’s a job that requires skill, of course, but it’s a skill you can learn if you’re willing to work. I wanted to meet the guys who were doing this work. It’s crazy – everybody’s moved their little apartment or home. But I wanted to meet these guys who were moving furniture eight to ten hours a day, six days a week, week after week after week.

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george
Or maybe even eighteen hours a day, at least once?

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adam_shepardOh, yeah, the eighteen-and-half hour move. That was just crazy, an incredible experience – to start at nine in the morning and finish, literally, in the middle of the night. The great thing about that move, and I won’t get into detail about it now, was that every move after that was a piece of cake! Once you’ve done a move like that, you’re ready for anything. It was tough; it was a challenge for sure, but it prepared me for the next steps.

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georgeHere’s something that intrigued me, Adam. You got a good job but you didn’t move out of the shelter right away. Man, I think I would have booked it. Why did you stay?

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adam_shepardThere are two reasons I stayed at the shelter. First of all, I was able to save money and then when I first moved out, I was able to buy a truck and I could move up from there. But also, I was meeting guys who were so much more fascinating than me. I wanted to be able to tell their story and to really talk to them and see where they come from. That’s what this was all about for me. It wasn’t just to dip into a homeless shelter for a week or two. I really wanted to stay there for a little while. But you’re right – the moving company was a great job to have – because I was able to go out, work hard, make $9 an hour and get a tip now and then. I was able to save a lot of money for sure.

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marylynnWe don’t want to tell anyone the ending, so we’ll stop here with the progression of the story. For anyone who has to go to a homeless shelter or wants to live vicariously through you, what are some tips for living in a homeless shelter?

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adam_shepardOh my gosh, so many tips. Bring your own soap. Bring your own toiletries and towel. When you go into a shelter, you have to keep to yourself. I didn’t go in and act like I was above the shelter. I went in, hung out, and sat in a corner. Eventually, I was able to work my way in to be part of the group. I think that’s what’s so important – I had to humble myself. And the way I was able to connect with these guys was what was so great. Stereotypes are being shattered while some are being proven true. The bottom line … the whole way through here … is that you can’t take anything for granted. It doesn’t matter where you live – in a homeless shelter or on the Upper East Side – you can’t take anything for granted. That’s what this whole story is all about.

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georgeThat is awesome. What I learned from this, Adam, is that it pays to spend money on conditioner but not lunch because you ate Vienna sausages on crackers for lunch. So we learned a lot about you just in those choices!

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marylynn
Even if you’re poor, you can be vain!

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We thank Adam so much for sharing his story with us. We highly recommend that you read his great book, Scratch Beginnings.

Subscribe to The Bigg Success Show in iTunes. 

Subscribe to the Bigg Success feed.

Direct link to The Bigg Success Show audio file:
http://media.libsyn.com/media/biggsuccess/00279-120408.mp3

Related posts

Starting from Scratch – Part 1

Finding Your Passion One Week at a Time