Tuesday, May 20, 2008

Income CAGR

There is an interesting article over at Free Money Finance on income growth.


It suggests a strategy for growing your income, based on the authors twenty years of experience. The strategy can be summarized as follows

  1. Get a professional qualification.
  2. Actively manage your career.
    1. Ask for raises
    2. Promote your work and contributions, especially to your bosses
    3. Outside of work, expand your skills and contacts
    4. Switch to higher paying jobs
    5. Don’t settle for the initial offer in any negotiation
  3. Turn your hobbies into income
  4. Spend less than you earn and utilise the power of compounding growth.
I was pleasantly surprised to find that, without any specific intention, my strategy over the last ten years, has been almost identical to the authors. The only minor differences being in professional qualifications (Mine is a CISSP not an MBA) and CAGR (Mine is 24% not 13.78, although mine is measured over 10 years and not 20).

Though I did not have the specific intentions his strategy suggests, I did have the goals of retiring early, earning a "large" salary (which I eclipsed three years ago and replaced with a new goal) and now my more ambitious goal of attaining NZD 1,000,000,000!

My strategy can be summarized by this simple statement.

Set goals and when you reach them, set new and more ambitious ones.

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