Cash Flow is King: Increasing Income through your Primary Job.

Date: 2019-08-05

Time to Read: 3 Minutes



Photo By: Alex Kotliarskyi

“Just make more money.” - Nobody Helpful

In my last post, Cash Flow is King: Reducing Expenses, I outlined a few simple strategies to effectively gain insight and control over your spending habits as well as introduced the general concept of cash flow.

Why did I lead off with that topic?

For starters, it’s the least interesting (for me at least) and also the simplest and easiest approach to impacting your cash flow equation in a positive manner. Also, it’s imperative that you cultivate efficient and optimal spending habits before tackling the much more complicated approach of increasing your income; primarily because if you do not have solid control of your spending habits then you will often find that your spending will eventually creep up to your income level no matter how high.

In these next few posts, I will explore on a very surface-level some of the categories for increasing your income (and I will dive deeper into each category with my own anecdotal experiences in future posts). Simply put, these categories have one very simple goal: cumulatively increase your cash intake or income.

So we’ll start with the first category.

Category #1 - Traditional W2 Employment

The most traditional driver of monthly income is your primary job (assuming you’re employed). I also view this as the most static and dependable source of income as your employer controls both the rate and hours worked (salaried, hourly, and overtime differences excluded). I’m also somewhat ignoring employment where compensation is determined by commissions and other variable circumstances.

Simply put, the advantages of traditional W2 employment is usually a dependable income source, a clear division of work and life (in most situations) and sometimes a multitude of benefits (e.g., health insurance). The disadvantages are the lack of control in your compensation. You can ask for raises or allow yourself to be at the mercy of inconsistent annual company-wide cost-of-living raises that may never come. Your superiors or HR department are responsible for gate keeping promotions and raises and oftentimes compensation increases are less a function of work output and more-so the result of other circumstances that you can not directly control.

With that said, the opportunities of moving the needle in this category may be limited but here are two approaches:

  • Ask for a raise or lobby for a promotion to a better-compensated position within your company.

    • The best approach is to present your case by showcasing your exemplary work and the impact that it has had on the company (documentation and metrics).
    • Warning: Better compensated positions may increase your responsibilities and workload tremendously to the point of impacting your quality of life. The grass isn’t always greener so always investigate other details besides simply a compensation increase when considering a new promotional role.
    • YMMV (Your Mileage May Vary) - You may be already be at the top of the promotional ladder at your company or department or in the top compensation tier in your company.
  • Apply to and join another company.

    • “Millennials have no company loyalty.” I’ve often seen the advice (commonly in software development circles) that the largest pay increases are the result of hopping between jobs every 3-4 years rather than staying at a single company for an extended amount of time. Between limited pay raises, promotional offers and seeing their parents’ loyalty to certain companies rewarded with mass layoffs following the 2008 financial crisis has left young people jaded about company loyalty; coupled with the evident pay increases of hopping between companies, I see why this is a popular strategy.
    • Once again, the grass is not always greener. Sometimes there are certain intangibles at your current job that you may not fully realize were present until you take a position elsewhere. For example, would you really rather go from your own office to an OPEN OFFICE? cringe What about going from a 10 minute commute to an hour commute? Another consideration, when switching to a new job at a different location, is the cost-of-living difference. Is $120k/year in the Bay Area REALLY better than $75k in some low cost-of-living location?

Now a lot of people would argue that time would be better spent developing your earning potential at your primary job rather than spending time in the next categories. I wouldn’t completely disagree with this sentiment, I do think that, barring exceptional exceptions, there is a certain ceiling on earning potential at a traditional job for most people that could be exceeded in the next categories.

Also, the ratio between hours worked and income earned is much more stable and consistent in comparison to these next categories which swing wildly for better or worse (more on this in later posts).

Cash Flow is King

03 September, 2019
I dive into the different strategies to optimize your personal cash flow equation which includes reducing expenses and a multi-faceted approach to earning more.
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Blake Adams is a writer, software developer, technical consultant, and financial independence enthusiast living in Oxford, MS.

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