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Editor's note: Today's edition is a little unusual. It's not in our standard essay format. It's an extremely useful interview with our friend and mentor Mark Ford. Mark is a multimillionaire entrepreneur and educator. He's practiced and taught every wealth idea worth knowing. Below, you'll find some of his most useful advice ever...

How to Get a Raise at Work

By Mark Ford, wealth coach, The Palm Beach Letter
Wednesday, April 3, 2013

Stansberry & Associates: Mark, you're a successful entrepreneur... a highly paid consultant... and an accomplished writer. You've also built a reputation as one of the country's foremost experts on wealth building.
 
For many people, the biggest source of potential wealth is their salary.
 
We've heard you say that earning just a few percentage points more each year will help you become a millionaire by the time you retire.
 
Could you explain how to get a raise... and how it can make a huge difference to a person's long-term wealth?
 
Mark Ford: Absolutely... There's no question about it. Earning just a few percentage points more each year can make you much, much richer over a lifetime.
 
To show you how, let me start with an example...
 
My brother hired SP for $20,000. On the same day, he hired LJ for $30,000. Keep in mind... I'm using initials to avoid embarrassing these people. They both had the same qualifications: college degrees, a bit of experience interning for investment companies, and the desire to make a lot of money.
 
SP stood out from day one. He was the first one to work every morning and stayed after everyone else, including my brother, went home at night. LJ was good but rather ordinary.
 
Flash-forward 13 years. SP is making more than $2 million every year and LP is making $38,000.
 
SP has already outpaced LJ by more than $10 million. By the time they both retire, SP will have a net worth well in excess of $50 million, while LJ will be lucky if he has anything in his bank account.
 
S&A: What accounted for the difference?
 
Mark: It was not intelligence. It was simply the fact that SP decided to become a superstar while LJ was content to be ordinary.
 
That's how I see it. But let me try to prove it to you with some simple arithmetic.
 
Joe Ordinary is 25 years old, makes an ordinary $30,000 per year income, and gets ordinary 3.5% yearly increases. Over a 40-year career, he will make a little more than $2.6 million.
 
Sarah Superstar, also 25, averages 5% yearly increases. Over the same 40-year period, she will earn $3.8 million – more than $1 million more than Joe.
 
If Sarah can keep her expenditures down and live on the same amount of money that Joe is making, she will retire a millionaire while Joe will be forced to live on food stamps and handouts.
 
That's how big a difference a mere 1.5 percentage points can make when we're talking about raises.
 
And that 1.5 percentage point difference, from the studies I've read, is what Sarah can expect by working hard and making smart decisions throughout her career.
 
S&A: Is there a plan someone can follow to achieve that "extra" 1.5 percentage points?
 
Mark: There is... and if you stick with it, you could become a multimillionaire in no more than 20 years. But there's something even more exciting than that. Your path to wealth must start somewhere. So in addition to that "blueprint," I can also give you a plan to get an increase of at least 10% one year from now...
 
S&A: To most people, that sounds almost too good to be true. Where do we begin?
 
Mark: Let's start by taking a look at how salaries work in a typical business environment.
 
Businesses exist to provide products and services to consumers. Healthy businesses measure their success in terms of their long-term profits.
 
As an employee of a business, it's your job to help your company produce those long-term profits. You may think your job is something other than that. You may think, for example, that your job is to answer the phone or deliver the mail or write marketing copy. Nothing could be further from the truth. Your job is to produce long-term profits.
 
The secret to getting above-average raises each year is to accept that as your fundamental responsibility – and to transform the work you are doing now in such a way that it will produce those long-term profits. The better you can do it, the more money you will make. It's as simple as that.
 
Salespeople generally make more than accountants, right?
 
That's not because salespeople are smarter than accountants. Nor do they necessarily work harder. But the job they do is seen as more financially valuable than the job accountants do. That is the one and only reason they get paid more.
 
S&A: What if you are working as a low-ranking employee right now?
 
Mark: I would tell you not to worry. My plan works just as well for a low-ranking employee as it does for top brass. In fact, it works better.
 
Conventional business roles and conventional salaries are the reality for 80% of the workforce – for people who come to work and put in a full day and have a good attitude and hope for the best.
 
For most of the other 20% – people who are smart and willing to work harder – the business world will reward them with better raises and more in total earnings over a 40-year period.
 
But there is a smaller group of employees – maybe 25% of that 20% (or 4% of the whole) – who will average even higher raises. Those employees will also earn far more throughout their business careers... enough to make it possible for them to retire rich.
 
There are more than a dozen employees I've worked with personally during the past 20 years who have taken this less-travelled road. None of them are older than 45 (most are in their 30s), and they are already all multimillionaires.
 
If they continue as they have been – and there is no reason why they shouldn't – they will all be among the top one-half of 1% of the population in wealth when they decide to retire.
 
S&A: So let's talk about how you're going to make that happen for yourself.
 
Mark: Start with this: Make a commitment to become the most valuable employee in your department in six months and the most valuable employee in your boss' view in one year.
 
These two goals are not necessarily synonymous. As you may already know, what your boss thinks about you and who you are may be two different things. The first job of anyone who wants to become a superstar is to actually start doing more valuable work. The second job is to gradually let your boss (and your boss' bosses) know that.
 
Make that commitment now.
 
Then make a list of all the ways you are currently valuable to your boss. And then make another list of things you can do to increase your value.
 
That list will be a good source of ideas for you. Let's say you implement this plan at the start of the year. In January, for example, you might make it a point to get your boss his most important report a day earlier than normal. In February, you might tell him he can delegate to you the sales calls he hates to make.
 
If you use a daily task list, you should be making great progress by the spring and have completely upgraded your responsibilities by the middle of the year. Now is the time to start letting your boss know about your achievements (in the event that he hasn't noticed already).
 
Guide all of your business decisions by one sole criterion: How will this action help my company increase its long-term profitability?
 
Meanwhile, be sure to stay humble and credit other people for their assistance when they have, in fact, helped you.
 
Be conscious of your boss' ego, too. Give him credit whenever anyone compliments you on some achievement. A statement as simple as "I couldn't have done it without Jeff's help/wisdom" will usually do the trick.
 
And take the time to write your boss and key fellow employees the occasional memo thanking them for their help.
 
By following a two-tier strategy – contributing more to the business and making friends along the way – you will ensure that your path to success will be quick and easy.
 
As your responsibilities increase, your boss will begin to depend on you.
 
Eventually – and this may happen in six months, or it may take a year – he will see you as an entirely different and more important employee than any of the others he deals with. He will begin to think of you as indispensable.
 
At that point, you should have no trouble getting your 10% raise. You might do much better than that.
 
S&A: Is there anything else an employee should do to make sure they get that raise?
 
Mark: Yes... and it's very important not to skip this step...
 
Establish relationships with other employees who have a higher rank than you. Ask them for their help and insight. Volunteer to help them do their jobs, and do that work after hours.
 
Your goal is to develop a back-up network of powerful people who see you as an up-and-comer. These people can be instrumental in getting you the raise you deserve if your boss, for whatever reason, fails to give you your due.
 
If you can, develop relationships with colleagues from other businesses in your industry, too. You never know – a few of them may offer you more than 10% to come and work for them.
 
Here's a key point: The habits you have to work on now in order to get yourself that 10% raise will be the same habits that will help you double or triple your salary in the future. Superstar employees don't do a hundred things better than ordinary, good employees. They usually do just a handful. You'll discover and perfect your handful next year in seeking to please your boss, and you'll be able to use those new skills to go all the way to the top.
 
S&A: But what if the actions you have to take to please your boss are not the best thing for the business?
 
Mark: I receive this question often. Some businesses – and this happens more frequently with larger, corporate businesses than with growing enterprises – become politically divided. In such businesses, it's possible to get a job working for someone who cares more about himself and his own power than about the company's future.
 
If you have such a boss, you should really try to find a better one. But if you can't, you will have to be a bit duplicitous. You will have to do everything you can to please him while you are carrying out your plan. But at the same time, find someone else in the company, someone with power, who is willing to mentor you.
 
That person will be either one of your boss' equals or one of his bosses. Most importantly, he must be someone who is committed to the company's long-term profitability. Remember, that is the bottom-line measuring stick for the success of any business.
 
Work to please your mentor at the same time as you work to please your boss. By pleasing your boss, you'll get your big raise next year. And by pleasing your mentor, you eventually will be able to abandon your boss' rotten ship and secure a much better position.
 
S&A: All great advice. Any closing thoughts?
 
Mark: The greater your contribution to your company's success, the higher the salary you will demand. And the best way to be a big contributor is to practice a financially valuable skill.
 
There aren't a whole lot of financially valuable business skills to choose from. Though it's good to know how to analyze a spreadsheet or engineer a new design, if you want to make dramatically more money than you're making now, you are almost certainly going to have to start doing at least one of the three things businesses traditionally pay big bucks for: selling, marketing, and/or managing profits.
 
You've probably heard this before... and you might be thinking this advice does not apply to you because you don't work in a sales or marketing role.
 
That's not the case at all...
 
You don't need to change your profession to contribute a financially valuable skill to your employer. While you work as an accountant or lawyer or engineer, work also with the sales and marketing team to find out how you can help them.
 
Do this voluntarily. Make friends and connections. Do honest and good work for them. Eventually, you will be seen as someone who can step up to take a senior position.
 
I know two accountants, three lawyers, and one engineer who did that. I also know a data input operator, a proofreader, and a customer service person... they are all CEOs or COOs today making hundreds of thousands with seven-figure net worths...
 
But even if you choose not to do that, you can and should be able to boost your salary by 10% next year. And here is how you are going to do it...
 
First, make a resolution to be more valuable to your boss and/or your business. Do it now. Write it down.
 
Second, make a list of all the ways you are currently valuable to your boss and/or your business.
 
Third, make a list of a dozen or so ways that you can increase your value to your boss and/or your business. And pick at least one of them as your objective for next month.
 
And fourth, figure out some way to communicate to your boss or to your company's president that you want to make a bigger contribution this year. (No need to tell him you want a higher salary. He will "get" that without your saying so.)
 
If you set for yourself the goal of getting a 10% raise next year and you get just half of that, you will still be much richer when you retire than you will be if you ignore this advice and go back to accepting the ordinary.
 
So please – start with that 10% goal. Decide to be a much better employee in six months and have a network of people in place who understand your value in one year.
 
Then get that raise and watch your wealth grow.
 
S&A: This is all very useful information. Thanks, Mark.
 
Mark: You're welcome.
 




Further Reading:

Read more wealth-building ideas from Mark:
 
A Dream Retirement in Paradise for Less than $50,000
"If you think you might want to make a dream like this your reality, you need to do several things right now."
 
Why the Government Pays Me $1,250 Every Month
"Add it all up, and it comes to an additional $5,000 to $7,000 extra every year in savings and/or extra income... And it's all guaranteed and supported by the federal government."
 
I Bought an Investment with a 17% Yield Last Month
"There are four critical elements to being successful as a landlord..."

Market Notes


"VIRTUAL BANKS" ARE RECOVERING

Income investors take note: "virtual banks" are in a new uptrend.
 
Steve Sjuggerud coined the term "virtual bank" to refer to mortgage REITs, like Annaly (NYSE: NLY), Hatteras (NYSE: HTS), and Two Harbors. These companies act like banks, borrowing money at low, short-term interest rates and lending it out at higher, long-term rates. They pocket the difference (called the "spread").
 
The bigger the spread, the more money these companies earn... and the more cash they pay out in dividends. With the Federal Reserve keeping interest rates near zero percent, companies like Annaly are able to pay out double-digit annual yields to their shareholders.
 
But last fall, improving economic data caused people to worry that interest rates would rise... which would reduce virtual banks' spread... and make them less money. Investor panic pushed Annaly shares from nearly $18 all the way to $14 – a massive, 20%-plus drop.
 
Smart investors took advantage of the weakness and scooped up shares at dirt-cheap prices. The market has taken notice... last week, Annaly hit a five-month high. And it's still yielding more than 11%.
 
– Sam Latter
 
Annaly (NLY) Shares Have Rebounded from Last Fall's Selloff

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