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The problem is taking a low salary at the start limits the increases you can get for the rest of your career and your also ignoring the time value of money.
by C1sc0cat 7y ago
The problem is taking a low salary at the start limits the increases you can get for the rest of your career and your also ignoring the time value of money.
- kragen 7y agoDon't tell future employers or clients your previous salary; then it won't limit the increases. (Again, not applicable if you're at a company that it's reasonable to work at for your whole career, but I'm assuming that's not the case.) What will limit the increases you can get are things like staying at the same company too long, living in an economically depressed area or in Britain, ex-coworkers who don't want to work with you again, a résumé with 10 years working on a shitty project in a forgotten language, and not being able to deliver results to clients and employers. The time value of money is maybe 5% per annum. Your skills are a much better investment than that; you should be able to average 10% per annum increases early in your career, mostly by switching jobs for a 25% raise or more. And remember that things like living expenses don't accrue investment income the way savings do. A 35% raise means more than a 35% increase in your savings per year. So focusing on immediate earnings is not justifiable based on the time value of money, at least for most of us.