I think this is relevant to a lot of people on this sub. For those outside Australia, The Barefoot Investor has been called the biggest financial cult in Australia (and that is actually a good thing). I don't know if he has much presence outside Oz, but he does offer good advice in a very readable form, and also is a pretty good guy! Anyway, here's a snippet below I thought might be useful:
… you do need to ask for a raise.
Why?
Well, if you don’t get at least a 5% pay rise this year, you’ll be going backwards.
That’s because the prices of things are inflating at the fastest rate in years … and they haven’t stopped climbing.
Think of inflation like being stuck on a treadmill that keeps getting faster and faster. You have no choice but to keep running, otherwise you’ll faceplant and be ricocheted into the poorhouse.
Okay, the scary movie is over and I’ve put the exercise equipment away.
So, what can you do? Two things:
First, understand that the employment pendulum has swung in favour of workers.
The jobless rate is edging in on 50-year lows, so many employers are having to pay up to attract new hires. So the obvious thing to do is spend five minutes googling to make sure you’re getting paid the current market rate.
Second, try the ‘Career Compounding Strategy’ that I lay out in my Barefoot Investor book.
Basically, it’s a step-by-step process that gets you to look at your job from your boss’s perspective, choose their three most important outcomes (not yours), and write ambitious goals for how you are going to achieve them in the next 12 months.
You then share those goals with your boss and ask for regular feedback throughout the year. You never talk about money or promotion in these meetings, but instead ask what extra you can do to help make your boss’s life easier, without sounding like a brown-noser or bursting into tears. That’s when you can ask for a promotion and a hefty raise. (For more info, borrow my book from the library.)
It’s simple, sure.
Yet very few people actually do it. And yet you will spend around 90,000 hours of your life at work. When you factor in sleeping, eating and Netflixing, there’s not a lot of life left over. So spending a few hours working out how to compound your income can have a dramatic long-term impact on your wealth.
Better yet, over the years I’ve received letters from readers who’ve used it to get 20% increases, and often a lot more.
Disclaimer: – I have absolutely no connection with Mr. Pape other than I have bought two copies of his book, one for me and one for my best mate.