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Higher salary does not equate to better future, immediately

Posted in Personal Finance

A very long time ago (not a fairy-tale lah), someone told me before that there is no such thing as planning for the future. Could I even know what will happen in the future? How could I be so sure that the future would be like what I told him? He uses his salary he earned that year, within that year, sometimes sooner. I have lost track of this acquaintance. The value of money diminishes over time because of something we call inflation. In terms of inflation, it’s not that hard to see. Every time demand pushes prices up for anything at all, that’s general inflation. Anytime we feel we have a lot of money in our pocket and buys a few extra pairs of shoes, that pushes up our own ‘inflation’ a.k.a expenses. Well, unless of course those items that we bought could become an asset in the future.

How do we have more money in our pockets? Well, higher increments for example. The typical salary increment when we change job for a higher position may be up to 30 percent. If it’s just to change to a similar position for a higher pay, then perhaps up to 15 percent. Do try not to change for more pay and same job description. I love mee goreng but I hate to buy the SAME plate of mee goreng at a higher price every few months unless that plate of mee goreng adds in more stuffs, right? What happens when your same plate of mee goreng becomes too expensive and there are LOTS of other cheaper mee goreng? That’s when one get stuck in the same job and keep complaining all the time loh. Remember, when the market are full of other professionals who can do the same work as us for less pay, we are stuck. For some expensive countries, this was the reason why so many jobs were outsourced to countries where the workers can perform the same job for less money.

Okay, I will stop being long-winded. I am just 40 years old anyway. How do we earn higher pay then? When we look around us a little more objectively, we usually get the answer. There are a small percentage of our fellow professionals who work harder than everyone else. They are always able to come up with better ideas (Nope, not because they are cleverer but because they know more through reading more). They always seem very motivated in what they do because they are clearer about what they want to achieve (that’s because they read about success stories by some other people and they benchmark the best). They are either promoted by their company, faster than their peers OR they get head-hunted to join another organisation if their current management / company somehow missed treating these people as a special talent worth keeping. Actually, the cost of hiring, retraining and re-energizing new people would be many times more expensive than to pay a few thousand ringgit extra per month or to make these talents as partners to the company.  (stock options for example).  Nope, this is still not the end of my article. 🙂

Do these people have a better future when they get a higher pay? As long as their expenses are similar to their peers and they earn incomes which are 30-40 percent higher, of course their lives are going to be way better, in future. As for those who feels that corporate career ladder is not for them and do not wish to do something illegal, then invest those incomes lah. Here are some resources to do more. Or keep reading kopiandproperty.com for property investments. Malaysians can generally live to over 70 years old these days and maybe up to 80 soon. This is the reason why incomes we earn today must be stretched longer. So, it’s either earn more from our work or earn more from pushing our incomes to work. Of course, if we start a business which becomes as big as GRAB, then that’s another story altogether. Happy thinking and working at the same time.

written on 30 Sept 2017

Next suggested article: Investments? Minimising, Maximising and Solidifying

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