The Personal Finance Podcast - The 10 Commandments of Salary Negotiation (Increase Your Income!)

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Starting point is 00:01:40 If you have any questions, hit me up on Instagram at Master Money CEO. That's Master Money Co. And follow us on Spotify, Apple Podcast, or whatever podcast player you love listening to this podcast. And if you want to help out the show, leave a five star rating and review on Apple Podcast. And if you want to check out video, we have a YouTube channel. And you can check us out at Master Money on YouTube as well. We're putting out a bunch of great content, two videos per week right now, so that you guys get some new fresh content over on YouTube as well.

Starting point is 00:02:13 Now today, we're going to be talking about the 10 commandments of salary negotiation. And I think this is one of the most important skills that you can have in your wealth-building journey. Because once you learn how to increase your income, you can truly accelerate your path to wealth. And I don't mean just by taking your wealth path step-by-step a little bit faster. I mean, you could take off a rocket ship on your wealth journey. Because this is the biggest way to accelerate your path to wealth. It is to increase your income. It will supercharge the amount of money that you can earn. And once you start to build up this skill, it is truly the most valuable skill that you can master. Because this is this.

Starting point is 00:02:52 This is a skill. Understand that going in. Negotiating your salary is a skill. It is something that needs to be worked on. It needs to be defined. It needs to be practiced. It's not something that you could just walk into someone's office and wing. You have to work on your negotiations.

Starting point is 00:03:07 And the biggest thing you need is you need a strategy and you need a strategy that is bulletproof. Now if you haven't heard our salary negotiation episodes, we have two of them back in episode eight and episode nine. We talk about the exact system. on how to ask for a raise at your current job and how to negotiate your salary. And this system is extremely important. So if you haven't heard those episodes, I would definitely check those episodes out. And I also wrote a free ebook for you guys.

Starting point is 00:03:36 So I'll link it up in the show notes as well. I know a lot of you guys were having issues downloading that ebook. It is all fixed now. So the link below will help you download that ebook so you can check out my exact system because it's very important to understand my system as we go through this episode. The way we structure asking for a raise at your job or negotiating your salary is very systematic. And you have a plan in place and something that you can implement each and every day. So check out the ebook in the show notes if you haven't read it yet.

Starting point is 00:04:06 Now, why would you want to do this? Why would you want to actually negotiate your salary? Well, in the ebook, we talk about this because someone who negotiates their salary in the ebook, we reference a study. And that study shows that someone who can negotiate just an additional 5,000, $1,000 a year and who starts at the same exact salary, will make over a million dollars more in their career. Now, here's the thing about this. If you're an introvert and you're someone who doesn't like negotiating, you don't like internal conflict, you don't like the thought of hanging to go up to someone and go back and forth with banter to sell them on yourself. That gives you nightmares at night to even think about doing that.

Starting point is 00:04:45 Well, just think about it this way. Is doing that worth a million dollars to you? because it's definitely worth a million dollars to me. I'm someone who is naturally, believe it or not, an introvert. And for me, specifically, I had to learn how to specialize this skill when I was doing this because this skill is so valuable that it's truly life-changing. Because you can make over a million dollars more over the course of your career just by negotiating a little bit each and every single year.

Starting point is 00:05:12 That is why this skill is so valuable. And here's the thing to understand up front. Every single company out there is negotiating with you. you. Every single company, it's whether you know it or not, they are playing a game. And if you're not prepared, you're going to lose that game. And right now, if you don't know that they're playing a game, then you're probably losing the game. Listen, I started my career making $30,000 a year. And when they offered me the offer, I just took the offer. I was happy to even just make money out of college. I was a clueless college graduate. They won the game that day, but I would never

Starting point is 00:05:44 take that offer again because now I know better and as time went on I realized how the game was played I realized how it was played and I implemented the system that I talk about here and my wife has used this system and as time went on I realized how the game was played and I implemented the system that we talk about in the e-book and my wife uses the system as well and it has tremendously increased our income over time so let me tell you guys learning how to negotiate your salary is going to change your life. And if you can understand this skill, you are learning a multi-million dollar skill, especially if you get really good at it. Let's say you hit up to executive-level jobs. That's a multi-million dollar differential just by learning the skill of negotiation.

Starting point is 00:06:27 So if you're about that big bankroll life, let's get into it. So the first thing to understand is that negotiation starts way earlier than you think. See, every recruiter out there, every person who's, interviewing you, whether in the HR department or they're a recruiter, is going to ask you about your salary expectations when they first start interviewing you. Now, do not, and I repeat, do not give them a number because what you want to do is keep as much information as possible to yourself about what you expect with your salary and let them do all the talk when it comes to financial discussions.

Starting point is 00:07:03 Your job up front is to sell them you and why you're going to deserve down the line the amount of money that you want. So what you do instead is when they ask about your salary expectations, you ask for a range as to what they budgeted for this role. And you can even say it this way. Can you tell me the salary range for this level? I'm happy to let you know if it's within my range. And we can discuss specific numbers later when I've met the team.

Starting point is 00:07:27 See, you can say it this way, and that deflects the question back onto them so that they have to give you information. See, what you're going to do is you're going to use this information to win. You're going to use this information to get what you're. want because in a negotiation, information is king. Whoever has the most information about what truly matters in that negotiation is going to win. And the keys are understanding what truly matters in a negotiation. You know what doesn't matter in a negotiation? Talking about the

Starting point is 00:07:56 tidily little things that aren't the big picture, which you're there to have a balanced work life and you're there to make money. That's what you're at work to do. You're there for a balanced work life, career advancement, to make money. It doesn't matter what it is, but focus on the things that truly matter. And specifically, if you're going to be going to work every day, why not make more for doing it? Number two, never tell them what you currently make. So along with expectations, they may ask you what you currently make. This is information again that you do not want to give them.

Starting point is 00:08:30 In some states, you're not even allowed to ask this question. But do not give them this information because this information does not help you all if you give this away to the recruiter or the HR department or your boss or whoever is interviewing you. If they ask you this question, just reply with another question. See a trend here? If you're asked a question that you don't want to answer, reply with another question so that you can collect information. So you just ask them, well, what does this role offer? This puts you in the driver's seat and gives you the extremely valuable information of what they're willing to pay. Because understanding that early on, understanding that as early as possible is going to help you in your

Starting point is 00:09:06 negotiation because if it's a low number, there's a lot of things that you can do to sell yourself to make that number come up. Number three, mine for Intel during interviews. Now it's time to get out the old pickax and hard hat because we're going mining folks. So when you go into an interview, you've got to be ready not just to answer questions, but to ask questions of your own. Now this is why it's so important to have questions prepared before an interview. Everybody knows that. At the end of an interview you need to be asking questions, but don't just ask generic questions. You're actually trying to collect information. So you need to ask questions that will get you the answers so that you can utilize that information to win this negotiation. So here's a few examples of questions that you can

Starting point is 00:09:49 ask. Number one, what's the biggest priority for the team right now? What this helps you understand is what the team truly needs and how you can sell your skills to fulfill what that team needs. Number two, why is the role open? Why did the last person who's in that role fail? Why are they not still in that role? Did they get promoted? Well, that's a good sign because that means there's a promotional track within that role. Or did they leave the company because they didn't like that role or the work-life balance wasn't good or the pay wasn't enough?

Starting point is 00:10:19 All of these are going to help you understand what you need to tell them. Number three, what's the biggest challenge for someone stepping into this role? Understanding the challenges is going to actually give you as much information as you need to understand what are some of the downsides of this role and what are the challenges that you can overcome to make this easier for the person above you? How can you make this job easier for your boss so that you can go get promoted? Because as we've talked about in the episode where we talk about how to ask your boss for a raise, you need to put together skills that actually makes them say, there's nothing else I can do but give this person a raise. And then the fourth one,

Starting point is 00:10:57 and this is a huge one. How does the organization structure on the teamwork? Because you need to understand is there roles where I can get promoted here? If you're in a deadened spot and you're in a role where there's no promotions available, then there's no reason to be in that job because you're in that job to increase your income over time and get promoted over time to advance your career. Especially if you want to pursue something like fire or financial independence, then advancing your career is how so many people get to fire away sooner. Why?

Starting point is 00:11:26 Because as your income increases, then you could take that money, invest the excesses. cash so that you can retire even faster. You're spending the time at work anyways. Why not get to your goals faster? Number three, don't give in to the pressure. So once you've been offered a role, a recruiter's job actually flips from evaluating you to closing on you. Now they become the closer. So what you want to do is be ready for that because you're going to see the demeanor change. You're going to see the negotiations change. Everything is going to be different because at the beginning, they're collecting information from you and now they're going to be providing. you with more information. This is when you can mine for a ton of intel. And see, most experienced

Starting point is 00:12:07 recruiters are going to ask you again and again to put up your number for your salary. And clever people may even say they're going to go up to bat for you. All this means is they're going to take that information and try to get close to it, but it's most likely going to be under. So here's how to combat that. Here's the biggest way to combat this issue. And we talk about this in the e-book as well. And this is not when you do it yet, because you're not giving into the pressure, but what you're going to do later on is you're going to give your highest number as the lowest number on the spectrum.

Starting point is 00:12:36 So if you want $80,000 a year, you're going to say, I would love to have $90,000. So maybe you say I want $90,000 to $110,000 a year. The reason why you're doing this is because inside of your range, if they even hit the lowest number on your range, you're getting more than what you actually want.

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Starting point is 00:15:33 CBC News. Okay, when I sell my business, I want the best tax and investment advice. I want to help my kids, and I want to give back to the community. Ooh, then it's the vacation of a lifetime. I wonder if my out of office has a forever setting. An IG Private Wealth Advisor creates the clarity you need with plans that harmonize your business, your family, and your dreams.

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Starting point is 00:16:29 Usually they have a separate team and it's usually called like a compensation committee or something like that who actually sets all the salaries and they take into account a number of things, including your background, your interview performance and everything else like your current level that you're currently at. And what they do is they give recruiters a number to go with. And usually when you're talking to these compensation committees, they give a number to a recruiter, and every time you want to negotiate, the recruiter has to go back to that compensation committee for reevaluation every single time. So what do clever recruiters do? They set you up

Starting point is 00:16:59 with a number up front to save themselves a bunch of legwork. Unfortunately for you, if you're in this situation, it may hurt your chances of getting more on your offer later because it deprives you of valuable data, the valuable data we've been talking about. You can't mind for as much data if the system is formulaic. So a couple things to think about. If you get caught in this loop where you're going back to the compensation committee and back and forth and back and forth, most companies will consider new information like another offer to reopen negotiation. So if you're stuck with this back and forth and you're truly not getting anywhere, then look to see, do you have other offers from other interviews? Utilize those as an negotiation tactic and this is why you want to keep

Starting point is 00:17:40 those under the vest until you actually have to use them. So you hold information for as long as possible until you have to use it. Because remember, any information that's not selling yourself, it's just information that they're going to use against you instead of you being able to utilize it for your benefit. And don't forget, one last thing is that you can actually use an offer at your current company as well. That's fair game. So think through, have you gotten offers from different companies?

Starting point is 00:18:05 Or is the company that you're at actually compensating you and giving you offers to stay at a higher level? Number five, you have to learn how to read between the lines when it comes to salary negotiation. So your initial offer that you get from a company speaks volumes as to what you're getting yourself into. And if you know how to interpret the data of what they're stating, then you have a huge competitive advantage. So let's say you're applying for a higher level role at a big company. And let's talk through this for a second. Let's talk about if the offer comes in low, if the offer comes in at the middle of the road, and if the offer comes in at high. If the offer comes in

Starting point is 00:18:40 at low, the people interviewing you may feel like that you have a lot of room. for growth. And so if this happens, if your offer comes in low, dig deeper and find out why the offer is so low. This way, if you can get that information, you can fix any misconceptions before you even start negotiating. Because an offer comes in, you haven't started negotiating yet, just mind for some more data. Ask, why is the offer coming in low? Maybe ask for feedbacks from these folks and they can tell you a bunch of things because trying to tell them that you're the greatest project manager of all time is just not going to cut it. That's not going to work out for you. So understanding why this offer is coming in low and then going back to them and providing them

Starting point is 00:19:18 with new information that you can use to see if they'll bring that offer up. The second one is if the offer comes in in the middle of the road, this is the most common offer out there. But over 80% of people get offers in the middle of the road. Now typically what this means is if you're just getting a standard middle of the road offer, you don't have someone who's interviewing you that's going up to bat for you. You don't have somebody who truly loves you and you didn't truly sell the team that's interviewing you. So it's tough to win in negotiation if you don't have someone up to bat for you. So if at all possible, see if you can meet with people from the team or some of the interviewers and see if you can try to sell them more on your skills. If you can't do that,

Starting point is 00:19:59 I understand it sometimes it's tough to go back into another interview when they've already sent you an offer. But if you can do it, this is the way to try to get someone to go up to bat for you because if you don't have someone batting for you, you can't get those high-end offers if someone doesn't truly love you. Now, if the offer comes in at the top of your range, if it comes in high, then think through this for a little bit. This is how you read between the lines. There may have been discussions about putting you at a higher level.

Starting point is 00:20:24 And if those discussions have been in place to put you at a higher level, then maybe you can actually go up and get even more money. You could push for an even higher offer. But you've got to be able to feel this out by asking the right questions. So think through some of the questions that you would ask if an offer comes in at the top of your range. So you can feel it out to push for an even higher offer. Because what if you can get an offer way above and beyond your expectations?

Starting point is 00:20:48 A lot of people can do this if you're really good at negotiating. Number seven, your job when you're in these interviews and when you're negotiating your salary is to win minds, but you also got to win people's hearts. Now, this is something that I found along the way. There are a lot of people in the corporate world and in the blue collar world. It doesn't matter what world you work in. There's a lot of people in those worlds who just rub people the wrong way. the time and they're hard nose and they try to negotiate all the time the hard way but your job

Starting point is 00:21:16 is actually to win conversationally but also psychologically and i know that kind of sounds crazy but you're trying to win people over everything in life comes down to sales and you're trying to sell yourself so the best way to sell people is to also pull some of their heartstrings a little so there's things that you can discuss in interviews like questions on how you can create a meaningful impact with this team. How can you improve this team, bring the team up morale or whatever it is so that you can increase the bottom line overall and truly help this company make more profit? And you can even come up with different ideas that you can suggest based on some of your interviews thus far. And there's bonus points because if you discuss obstacles to you taking

Starting point is 00:21:56 on the role, that's going to help them give you more information that you can utilize in this negotiation. Number eight, do your research. So here's a big thing. In this country, there's a lot of people who are underpaid who deserve to make more money. And if that's you, I'm talking to you here because a huge reason for that is that people don't fully evaluate their offer before they start negotiating. Let's change that. My goal is to change that to help you educate yourself enough so that you understand how much you truly should be making. And if you're not making that much, utilize this system so that you can increase your income and build generational wealth for you and your family. That's the goal. Learning how to increase

Starting point is 00:22:37 your income, not saving money on lattes every single day. What is that going to get you? You can save $1,000 a year by not going to Starbucks or you can make tens of thousands of dollars a year by negotiating your salary. Which option do you want to choose here? So here's questions that you can ask. Is the offer competitive that I just got? So you can browse a bunch of sites. You can look at Glass Door, but Glass Door is now getting oversaturated. So there's other sites like candor.com, which is a really cool site and I'll link it up in the show notes as well. Well, how does this offer work? Are you getting company stock in addition? If you are getting company stock,

Starting point is 00:23:11 make sure you understand how that process works as well. Then think through the other options. Does this all add up? Consider your taxes or bonuses. If your offer comes in high and you could be $5,000 less but pay significantly less taxes, then you need to consider that option as well and discuss this with your employer. They're going to understand if your tax benefits are drastically different just by a small amount differential in your salary.

Starting point is 00:23:34 And if you have gold compensation or compensation, based on hitting goals or the goals realistic? Because a lot of people have bonus-based compensation or merit-based compensation. And if that's the case, make sure what they're asking you to do

Starting point is 00:23:49 is realistic and that you can actually hit those goals. Doing your research is so incredibly important. So make sure you're doing this so you're not underpaid. Number nine, you have to compare offers. Now think through this for a second because when you start getting offers,

Starting point is 00:24:04 let's say you went through multiple interviews with multiple companies. Not all these offers are made equal. And usually, offers are intentionally confusing via companies. So it seems obvious that you should look at the compensation, but there's a number of other things that you need to look at as well. I know a guy who is a very high-level person at a company we all know, and he got to that level because he would actually take demotions

Starting point is 00:24:28 if different roles had a better trajectory to get promoted later on. Now, that's a very hard thing to do is to take a demotion because you know you have a better track to get higher up later on in the future. But this is what he did because he saw how to navigate the road. So look at which companies have a better trajectory. Can I get promoted more in one role than the other? How do promotions work?

Starting point is 00:24:50 How does someone get promoted? Do a lot of promotions come externally or do a lot of promotions come internally? Because you want those promotions to be coming internally. Here's a big one. Look at through the interviews. Is your manager influential enough to pull for you when it's time to get a promotion? This is a major factor because if they don't have enough pull, it's going to be much harder to get a promotion later on down the line. So you can look at different companies, see if they're actually compensating enough, compare those offers so that you know are you on track to make more money going down the line?

Starting point is 00:25:21 Because getting paid more up front doesn't always mean you'll make the most overall. You have to understand this. And this is how you plan accordingly is thinking through this. Number 10. Time to make the ask. Now it's time to get the information. Now it's time to make that money. This is where the money is earned, is making the ask.

Starting point is 00:25:40 So it could be awkward to ask for more money. I understand that. Especially if you don't like negotiating, it's an awkward thing to do at first. But trust me, everyone expects you to negotiate your salary. And on top of that, it doesn't help that a lot of advice out there is conflicting. So here's how you ask. The low number in the range needs to be your highest number. Do whatever it takes to remember this.

Starting point is 00:26:02 Write it down, circle it, highlight it. it, but the low number and the range needs to be your highest number. So if you want to make $70,000 per year, you would say, based on what the market is and what I've seen at company is your size, I would expect to be in the $70,000 to $80,000 range. What this does, it gives you a potential employer room to negotiate above your highest number. And if you really want to go for it, make the number even higher than your highest number. Because I've seen people ask for more than their highest number and they actually get it. And this is the cool thing about this strategy is making the low number, your highest number, because you're going

Starting point is 00:26:39 to get more money that way. I can tell you that right now. Now, don't make it something crazy where you want to make half a million dollars in the role only offers $50,000 a year. But what you're doing is you're making it the highest number that you're willing to accept within that role. And utilizing the strategy allows you for breathing room. It allows you for a negotiation room so that you can get to the point exactly where you want to be and you're happy with your compensation in the long run. Listen, I hope these 10. tips are going to help you guys negotiate your salary. Definitely make sure that you're checking out that e-book so you can see the exact system

Starting point is 00:27:11 that we take. And there's step by step in that e-book on exactly how to do this and how to negotiate your salary. And if you have any questions, hit me up on Instagram at Master Money Co. And follow us on Spotify or Apple Podcasts or whatever podcast player you love listening to this podcast to. And if you want to help out the show, leave a five-star rating and review on Apple Podcast. And go ahead and check out the YouTube channel as well.

Starting point is 00:27:33 and if there's videos out there of YouTube videos that you want me to do, leave them in the comments on a YouTube video. And I'll make sure to go look through those and we'll go knock out some of those videos for you guys so that I'm giving you guys the content that you actually want. Listen, I appreciate each and every one of you guys. I can't thank you guys enough for listening to this podcast, sharing it with your friends and family,

Starting point is 00:27:54 and helping this podcast grow. I could not do this without you guys, and I truly appreciate it. You're helping each and every person out there start to truly build wealth, because that's what we believe here. Every person in this world can build generational wealth for them and their family and they can do it with small amounts of money and grow their income over time like we talked

Starting point is 00:28:12 about today so that they can have generational wealth for their family. And each and every person listening to this podcast, my goal is to make all of you millionaires. Every single one of you by using small amounts of money, investing it over time, and making sure that you're disciplined. You can do this. You can build generational wealth. And that's what we're here to teach. So thank you guys again.

Starting point is 00:28:33 much for listening to this episode and we'll see you on the next next. Rosen lasagna, medium power, 15 minutes. Sounds like Ojo time. Let's play. Feel the fun with Play-O-Joe. The online casino with all the latest slot and live casino games. What you win is yours to keep with no wagering requirements, instant payouts and no minimum withdraws. Hey, I just won.

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The Personal Finance Podcast - The 10 Commandments of Salary Negotiation (Increase Your Income!)

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