📚 I’m creating a series of courses, live coaching, and a peer community to help guide people on a journey from Employee to Solopreneur. The launch date will be in 2022. If you’ve ever thought about starting your own business at some point in your career, sign up to be notified. See you there!
Inflation is on the rise in the U.S., and the current annual inflation rate for the 12 months ending this September is 5.39%. In 2021, the inflation rate worldwide is already 3.5% higher vs. last year.
Compared to a year ago:
* Gasoline prices have increased 42.1%.
* Prices for used cars and trucks are up 24.4%.
* Food prices are 4.6% higher.
* Rent prices soared 9.2% in the first half of 2021.
* Energy (e.g., electricity, gas) is up 8.5%.
The pandemic and global shipping crisis aren’t helping matters much either. The supply chain is stressed and causing shortages and delays in almost every consumer good you can imagine (e.g., electronics, cars, shoes, exercise equipment). This has created a ripple effect in the cost of used goods too (e.g., the availability and price of used vehicles).
As a result, in 2022, the Social Security Administration will boost the cost of living adjustment to the highest level in 39 years as inflation soars in the U.S. That will certainly help retired folks. Unfortunately, the income in millions of working households is not being adjusted to keep pace with inflation.
Why am I sharing all of this? Well, simply put, if your income isn’t increasing to keep pace with inflation and the growing cost of living, you’re falling behind. Today’s dollar is worth less than it was a year ago.
If you aren’t receiving a sizable raise that exceeds inflation, you’re actually making less money every year because the dollar isn’t as valuable. It’s as if your annual salary was reduced by thousands. And, due to the rising costs of almost everything, it is getting harder to make ends meet.
You must ask for a promotion or raise
Yes, you should always have a household budget and strive to reduce your expenses. You know that I’m an advocate for living more simply and curbing extravagant spending. That’s one reason I left the Bay Area of California.
However, that doesn’t mean that you shouldn’t maximize your earning potential at the same time. If you want to get ahead and live a better life, you must ask your employer for the compensation you deserve.
Some people are comfortable requesting raises and promotions every year (Note: You shouldn’t expect a promotion every single year). I had a few employees like that. But, most folks don’t like to push or pitch themselves. Instead, they hope their hard work will speak for itself, and their manager will do the right thing.
But, I’m here to tell you that waiting and hoping is a risky strategy. Not every employer looks out for their employees. Not every boss is going to fight for you.
Many employers try to keep their expenses down, and, for most businesses, salaries are the most significant expense. If an employer has many employees (e.g., Walmart has 2.3M employees), reducing raises by a few percentage points can translate to millions in savings.
I want you to get comfortable with having a conversation with your manager about your performance every year before the employee review process begins. For many companies, this happens in late Q4 and early Q1. If you wait until the decisions have been made, it is too late.
I also want you to feel good about asking for a promotion (and the associated raise) when you know you are performing at the next level and deserve it. I want you to feel confident asking for the raise you should receive every year to keep pace with inflation and cost of living increases.
* Be professional.
* Be prepared.
* Don’t feel shy.
* Don’t be nervous.
* Don’t feel “greedy.”
When you are providing value to your employer, you deserve commensurate compensation in return. And, if your employer doesn’t understand that