a better you
/////////////////////////////////////////////////////////////
CHANGING JOBS AS A PATH TO FINANCIAL GOALS
By Leida Speller, CFP®, ChFC®, RICP®
M
Y PRIMARY OBJECTIVE AS A CERTIFIED financial planner (TM) professional is to determine whether and how clients can achieve life goals through maximizing financial resources. My client’s goals are often no small feat. They typically include some combination of saving for a house, accumulating college funds, and saving for retirement, among many others. Cumulatively, the cost of these goals can reach well into the millions. It is no surprise that the path to success often includes leveraging our most valuable asset during our working years: our own human capital. Accumulating wealth to meet the objectives that contribute to enjoying and maintaining your desired standard of living requires a sufficient balance of funding your current lifestyle, with saving and investing for the future. It is also best achieved when your personal commitment to your goals is paired with the expert guidance of financial professionals to equip you with the information, strategies, and solutions necessary to realize your dreams. Yet, none of this makes a difference without net positive cash flow. In its simplest terms, this means it is necessary to have more income coming in than you do expenses that deduct from it. Ideally, we maximize income and minimize expenses. The best way to control expenses is to plan for them and spend accordingly. One of the most effective ways to increase income is to know the value of your human capital and match your talent with the optimal investor. In other words, be willing to change jobs… frequently! While career trajectory and job tenure are generally a personal choice based on multiple factors that go beyond salary, research suggests that consistently remaining employed at a company for longer than
12 | BLACK IN HR
two years can decrease lifetime earnings by 50% or more. According to New York-based CPA and tax expert, Cameron Keng, employees can typically expect an annual pay increase in the area of 3% when remaining with an employer; but can expect to receive an increase of 10% - 20% when leaving for a new one. In pre-Covid 2019, the average pay increase for executives who chose to switch employers was 28%. There are pros and cons to deciding whether to pursue other opportunities and how often. It is important to understand your professional worth and where your background, skills and experience fit into the current marketplace. It is also important to understand that as you move through your working years, you are depleting your human capital, or the remaining years you have left to earn an income. The window for achieving your financial goals also becomes smaller. As your human capital is declining, your financial capital should be increasing. Maximizing income during your working years can have a significant impact on your ability to effectively secure wealth. The decision to change jobs to increase earnings should take many factors into consideration, including other benefits that make up total compensation. These decisions should be made after conferring with others you trust to be sounding boards, such as a spouse, mentor, coach, and financial advisor. Dream big, know your worth (and the market) and go for it!u Citation: *Wellemeyer, James. “This 29-year-old just boosted her salary by $22,000 - here's how she did it.” MarketWatch 08/24/2019, https://www.marketwatch. com/story/more-peopleare-job-hopping-temptedby-better-salaries-and-thehighest-number-of-openingssince-2000-2019-08-08
WWW.THEBLACKINHR.COM
