How to stay ahead of inflation?
How to stay ahead of inflation?
(OP)
I have never been aggressively ambitious. I didn't get into engineering looking to become rich. I don't desire to be an executive. However, I want to improve my families lifestyle. How do you get beyond cost of living increases and start getting more money to spend? Are the only options entering management or job hoping? What has worked you?





RE: How to stay ahead of inflation?
I probably could have done even better if I’d pushed a bit harder in salary negotiations etc but overall can’t complain.
After a slightly secretive team meeting we had this morning I’m starting to doubt that just working my a** off and meeting or exceeding expectations is going to be enough here.
RE: How to stay ahead of inflation?
My experience (16 years)with rare exception until my current employer is that for most people "in the trenches" the way to increase your pay is to move from one company to another. I know thats not what you wanted to hear but it's a pretty common practice.
If you don't want to do that then I would suggest the following: Arrange a time to speak with your boss and tell him of your desire. Ask him point blank to take time with you to layout what his expectations and requirements are (ie) align your goals with your managers. Give that a year. If you still get a crappy raise then suffice to say you will not get a good one under the current management team.
good luck
RE: How to stay ahead of inflation?
RE: How to stay ahead of inflation?
Before looking for a new job, look for the so called 'low hanging fruit'. Is there a project that you could invest a few hours a week into which will provide a positive, tangible benefit to the company? Are their additional tasks that you could (reasonably) take on and not adversely affect your commitments at both work and home? Are there software tools that you can generate in your off time that may help the engineering staff complete their tasks more efficiently that you can program? Complete some or all of the above may get you noticed and bring you positive benefits.
If you are unhappy in your job, or unable to advance to your liking, you may look at taking outside training to improve your skill set or even start checking out available positions both inside and outside your current company.
Assuming none of the above works, then you may look into a 2nd business. If it doesn't violate your companies policy, if may be possible for you to do engineering work on a contract basis for other companies, or perhaps yourself, if you follow you local laws and have the proper accreditation.
More simply (and less glamorous) is to look at your budget and spend less! In the short term, control what is going out of the bank account is easier than what's coming in.
--
Erik
MO P.E.
RE: How to stay ahead of inflation?
Do learn to save and invest.
I know a number of people who are successful at buying, improving, and reselling real estate.
RE: How to stay ahead of inflation?
Or, just for kicks, try writing down all that you spend for a week or two. You will be shocked at the "little" amounts that add up to big amounts. $2 for a coffee when you stop for gas, stuff at the grocery store that was "on sale" that you didn't really plan to buy, etc. Most people don't blink at spending $1.50 for a pop at McDonalds, but you can usually buy 2 2-liter bottles for that amount on sale at the grocery store! Oh, and do you eat out every day? You can save more than $100 a month by brown bagging, and that is usually a lot healthier than fast food every day. After you start to see your spending patterns, you can see where the money is really going each month. Then you can set a realistic budget and see just how much you really have. I'd start there.
It's not always how much you are making, but how much you are spending that matters.
If that doesn't work for ya, try selling some of the stuff you don't use anymore on Ebay.
RE: How to stay ahead of inflation?
As an engineer, you need to do the math. Everything is a tradeoff. Divert money from where you are wasting it to where you want it to make a difference. Are you buying a new car every two years? or leasing? Are you buying too much stuff, in general? Are you paying $5 for a cup of coffee? Are you eating out at lunch time?
If you can't save 10% of your salary, then you're basically overspending to being with.
TTFN
RE: How to stay ahead of inflation?
-The future's so bright I gotta wear shades!
RE: How to stay ahead of inflation?
I'm guessing that bonus season will not be coming around this year. I've hit the 7X amount, but as bonuses are purely discretionary, I can never count on anything.
I've always just looked for a second job. To date, investing, bartending, and repainting/repairing sportbike bodywork have all supplied extra cash. I'm currently trying out the home improvement market, albeit slowly.
RE: How to stay ahead of inflation?
So in three years my pay almost doubled, merely by working somewhere else for a while.
Anyway, if you want more money in the future the easiest thing to do is to stop spending it now. Why have you got a car loan? Why haven't you paid off your house loan? Why do you pay interest on your credit cards? Why have you missed buying shares in the biggest bull market EVER?
I laid out a six year plan to get 'rich'. It took five years to get to my original target (investment income sufficient to cover my weekly living costs, including rent at the time) but I've decided that that is not an adequate goal. I drive a 24 year old car, live in a small house, bought with cash, and cook much of my own food, but spend a lot on books and eat out in decent restaurants once a week or so. It takes me about 3 hours a week to run my share portfolio, but I only make about one trade a month.
Cheers
Greg Locock
Please see FAQ731-376 for tips on how to make the best use of Eng-Tips.
RE: How to stay ahead of inflation?
We all know what assuming does after all!
RE: How to stay ahead of inflation?
RE: How to stay ahead of inflation?
The "good times" were defined by my being happy in my work. The "bad times" were when I wasn't. Money never was the big driver of the happiness scale.
David
RE: How to stay ahead of inflation?
Some years back I wondered where all my money was going. My wife & I bought Quicken and fanatically recorded every expense for a period 3 months. The pie chart of expenses showed the biggest percentage of expenses was..."miscellaneous" through the ATM card. Think about it: you get a $20 bill from the ATM, get lunch, buy a coke, get a candy bar, stop at the store on the way home to get a six pack and poof! Bye bye twenty. So you get another. In one week you've taken out $40 from your hard-earned available cash.
I gave myself a 20% raise by budgeting my expenses and being frugal.
A couple years ago, a friend of mine told me that you can make a decent living from working for others. The only true source of wealth is ownership. So I'm working on that, now.
TygerDawg
RE: How to stay ahead of inflation?
I got Plan B in the works, same as the TygerDawg approach.
IRstuff, I see your point but there are some areas such as the DC, SF areas where young engineers (two incomes) are moving out because they cannot afford a townhouse, those national salary averages that you see in surveys do not mean a thing in some areas.
RE: How to stay ahead of inflation?
I bought my first house when interest rates had fallen DOWN TO 13.5% APR, back in 1982, when the previous high was something like 19% APR and housing prices were grossly inflated, so all this whining about prices is just that much whining.
Have any of your "hard-working" friends built up a nest egg for a down-payment, or have they actually been "hard-playing" or "hard-drinking" with maybe less than $1000 in their checking accounts?
There's a financial help book that dsecribes an encounter the author had with a couple that was asking about whether they had enough to retire on. Upon hearing that they were a single-income family whose breadwinner was a teacher with $40K salary, the author figured it would be trivial to look over what he expected would be a meager pittance of a savings account. Much to his chagrin, the couple had saved over $400K, while the author, a well-paid financial adviser had less than $100K in his own savings.
As for starting your own business, you should read Kiyosaki's "Cashflow Quadrant." He talks about the 4 types of people, employees, investors, business owners, and self-employed. Each type has different mental outlooks and goals, and therefore different financial outcomes. Since most engineers are, in fact, employees, there's a large desire for security. Without understanding one's desire for security and without overcoming that desire, it would be difficult to move out into a different quadrant. Kiyosaki tends to be a bit of a salesman, but his reasoning tends to be sound.
TTFN
RE: How to stay ahead of inflation?
Your are right I was more interested in how to grow a salary without the job hoping or leaving engineering. It is interesting that most of the answers imply that the best way to achieve the same results is through other means. That the best way to improve my lifestyle is to control my budget and find additional income outside of my employer.
There has always been a strong theme on these boards of dissatisfaction with the opportunities as an employee in engineering. However as several people have pointed out we need to have a broader perspective. The 90s are 7 years ago. It is time to accept that the job market is stable or shrinking for engineers.
So to review this thread the best ways to stay ahead of inflation so far are.
Work hard try to achieve promotions not annual raises
Spend less/save more
look for additional income
Invest
Don't expect too much unless you change jobs or own the buisness
RE: How to stay ahead of inflation?
At my last place in the UK, where I took the 'working hard and performing well/above expectations' approach it paid off. I only got one promotion as such, I was allowed to drop the "Junior" from my title, but had several well above inflation pay increases. I did however pick up extra responsibilities, especially some project management, did OK and was well rewarded financially. Often times if I perceived that something needed doing, even if it was outside my duties, rather than wait to be told I'd just get on and do it, more often than not I got it more or less right and so didn't end up wasting much time as what I’d done was of use.
Other people at the same place though had got stuck in a rut and weren’t getting the pay raises even though they were arguably of more value to the company. Mostly this seemed to be due to personality issues.
Also this was the first few years of my career so I was learning a lot and arguably my value to the company was increasing faster than that of most of my more senior colleagues, hence the faster increase in pay. (Note, I’m talking about rate of change of pay & value, almost all of the more experienced guys were of far more absolute value to the company than me, I have no illusions about that.)
I guess maybe you just have to adapt to fit in to your unique situation. Look what others around you have done to get ahead, and assuming you can live with it morally etc, do the same. Or, ask your manager what you could do to advance yourself, obviously be careful with the wording but hopefully you get my point.
At my current place I’ve worked hard, tried to apply the same philosophy and although my manager is more than happy with me the fact is Sales are down in my division, hence the pay raises wont be big this year, no matter how hard I’ve worked and what I’ve achieved.
RE: How to stay ahead of inflation?
Live beneath your means.
RE: How to stay ahead of inflation?
RE: How to stay ahead of inflation?
Here is an analogy. Why is some team willing to pay $70 million a year to player A, and another team only $50 million?
Your worth is often determined by other people's needs. That is why people often "job hop". Another company is willing to pay more because their need is more. Does this make sense?
If your current employer is not willing to pay you more (yes, I have seen many raises that did not keep up with inflation), the only way to make more is to go somewhere where they value you more.
"Do not worry about your problems with mathematics, I assure you mine are far greater."
Albert Einstein
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RE: How to stay ahead of inflation?
If there seems to be limited opportunity at your company, you might consider changing jobs. This can certainly earn you at least a temporary pay boost.
Increased pay generally comes with:
1. Increased capability (personal growth)
2. Increased responsibiltiy
3. Competitive pressure
Maybe there's a pot of gold somewhere else, but maybe there isn't. It depends on where you are, what you do, and how willing you are to re-arrange your life to make more money -like moving across the country (a few times) perhaps.
And of course, no one **ever** thinks they have enough money.
RE: How to stay ahead of inflation?
Jeff Mowry
www.industrialdesignhaus.com
Reason trumps all. And awe transcends reason.
RE: How to stay ahead of inflation?
"The Millionaire Next Door"
Pretty much stated that most of the wealthy were those that did not show it (by driving the BMW, the Plazma screen, the big house, etc), but were those that preserved it (by living in the same house, driving a 10yr or older car, not buying the latest and greatest, etc)
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This is normally the space where people post something insightful.
RE: How to stay ahead of inflation?
RE: How to stay ahead of inflation?
For those of you who read the book, she is what they call a hyperconsumer, LOL.
RE: How to stay ahead of inflation?
Go to work because you enjoy it but don't plan on using that for a great retirement strategy. My 7 layoffs have taken care of that.
The book that got me started was "Rich Dad, Poor Dad".
RE: How to stay ahead of inflation?
Contracting is more risky but the money is far better.
Expat if your not averse to moving
RE: How to stay ahead of inflation?
There is little to no loyalty from most companies nowerdays, so why should employees show any?
If your yearly raise is 3-6%, and a job change nets 15-50%, why the heck stay (unless you believe what are are learning now is worth the dollar-value loss)?
As someone on here has as a signature, "you don't get what you deserve, you get what you negotiate"