Six Figure Interview 10

Today we have our latest interview with a reader who has grown their income to at least $100,000 annually.

If you’re interested in participating in this series, please drop me a note.

This interview took place in November.

My questions are in bold italics and their responses follow in black.

Let’s get started…

Tell us a bit about yourself (age, marital status, kids, where you live, etc.)

I am a 35-year-old, single woman who is currently living/working in Western Europe, but I spent the first 30+ years of my live in the same medium sized city in the northeast.

What do you do for a living?

I work for large international company (>80k employees). I have had many roles in this company, but I am currently a mid-level manager responsible for a matrixed team of project managers and internal consultants across Europe.

I have an undergraduate degree in engineering and a master’s degree in business. I have been at the same company my entire career thus far.

How much do you earn annually?

In 2020, my income will land at about $199k.

How does this amount break down (salary, bonuses, etc.)?

• $149k: Base Salary
• $24k: Performance bonus
• $7k: Christmas, Vacation, & Special Project bonuses
• $17k: RSUs (Granted in 2017 & vested this year)
• $2k: Capital Gains on sale of ESPP stocks + Bank Bonuses

Do you receive any additional compensation/benefits from your employer (401k match, stock options, etc)?

Currently the international business unit I am working for doesn’t offer much in the way of these types of incentive structures, but I was able to leverage that to have a higher base pay. It’s nice to have that in guaranteed instead of variable compensation, but is not so nice because I tended to get paid out over 100% on my variable targets in USA. Less risk, less reward here…

Anyway, there is however, a required contribution to a government pension that amounts to just almost $8k/year of additional contributions that I receive from the company. Given that I don’t know how long I will stay in Europe, there is a chance I will never see that money.

Up until I moved abroad, I maxed out my 401k and my employer provided a match on the first 5%. Additionally, we had an employee stock purchase plan (ESPP) that I took advantage of for many years. We could purchase up to 15% of our salary at a 15% discount. This amounted to a few extra thousand dollars for me, but when the stock started to have more volatility, I stopped contributing.

Before relocating, I also had an annual ‘Long Term Incentive’ package in the form of Restricted Stock Units (RSUs) that were on a three-year vesting cycle. I will continue to have RSUs vesting through 2022 (thus contributing to my annual income), but I stopped earning new RSUs in 2020. I’ve had to adopt the mindset that “money isn’t everything”!

How long have you been working?

I have been working full-time since Feb 2008 – a month after I graduated from university.

That being said, I had earnings of an average of $8k/year since I was about 15 years old from part time jobs. This was mostly used as play money for myself as I wasn’t smart enough to start saving anything when I was that young!

How long have you earned at least six figures?

Since 2015, at age 30 and being 8 years into working full-time. 2015 was my first full year in a position where I had Management Incentive Plan (MIP), e.g. a performance bonus, which put me nicely over the 100k mark.

Here is my AGI as reported for the last 12 years for historical sake:

This is nearly all just salary from my primary job.

From 2015-2018 I had the ‘side gig’ doing consulting/advising at a local university for $6k/year (<5% of my total income). Additionally, I have a few thousand here and there for capital gains on my ESPP sales & from bank sign-up bonuses. (I move my money around multiple times per year to get these bonuses! In 2018 I made about $1,500 for nearly no effort. You’ll see later that I keep too much in cash, but at least I’m making something from it!)

Also, 2019 was a ‘fluke’ year for my AGI. The expense for my relocation (~$30k paid by my company) was considered income. I don’t quite understand all the details, but I was ‘grossed up’ so that there as no actual cost to me.

What have been the key steps you have taken that have allowed you to earn this level of income?

My first key step is focusing on Continuous Education. I started off a respectable $45k salary in 2008 after graduating with a degree in engineering. I quickly realized that if I really wanted to get ahead fast, I would need to develop my business acumen and not solely focus on technical acumen.

Therefore, three years into my professional career I decided to pursue an MBA. I advanced my career quite a bit after achieving my MBA & several other industry recognized certifications that I have picked up over the years. Developing myself and my team is something I feel very strongly about, and it shows in what I and my team have been able to achieve!

In 2011 I actually left my company for 8 months to complete my MBA full-time, after doing 3 semesters part-time first. (Hence my AGI being lower in 2011 than previous few years.) When I started working again in the spring of 2012 I grew my income from a base pay of $55k pre-MBA to $75k post-MBA. Funny enough, I landed back with the same original company, albeit a different business unit. That wasn’t the grand plan, but that’s how things worked out.

Additionally I have had the privilege of attending multiple ‘leadership development’ courses while working for my company as I had been identified as a ‘high potential’ talent in my early years due to my skills, achievements, and demeanor.

My second key step was ‘stepping up’. In late 2012 my team was downsized from 6 to 3. I survived this cut, but then the other two ‘survivors’ – one of which was by boss – quit! Therefore, the team went from 6 to 3 to me within 6 months of my starting that position.

I actually attribute the next 6 months of my career for catapulting me to where I am today. I worked like a mad-woman (60-70 hours a week) just to keep the function above water while we worked to replace the 2 who had resigned.

Because my boss had resigned, I got exposure to the leadership that I would certainly otherwise not have had. It was hell for those 6 months, but it helped me build my network and it showed evidence of what I had to offer. My boss & peer leaving put me into a position I was totally underqualified for, but instead of worrying about that, I just did everything I could possibly do to prevent a meltdown!

And my third key step is how I leveraged my network. After the grueling 60-70 hour weeks for 6 months I was 150% burnt out!

Once we had replaced & onboarded the new team members, I made it known I needed to find a different role. I realized I wasn’t passionate about what I was doing, so I took advantage of the connections I had made. I essentially asked our CFO to create a position for me to re-start a dormant process improvement function in our business unit. He had seen how hard I worked in the prior 1.5 years and decided to give me a chance!

Years later when I decided I wanted to move to Europe I leveraged personal connections, not HR or job applications, to find opportunities. I had built up a balance in my ‘credibility bank’ with colleagues over the years, so when I asked them to help me identify opportunities in Europe, multiple people stepped up to the plate for me.

Which of the following career advancing strategies did you employ (if any) and which were most effective: a. Doing well within your current company and being promoted. b. Jumping around from company to company always seeking a higher salary & responsibility. c. Entirely changing your career path from a lower earning field to a higher earning field (going back to school, etc)?

I have covered some of this already, but for completeness sake here it is again.

I have stayed with the same company for my entire career, but I have worked in 4 distinct functions and had 5 different ‘roles’ within the company. I have worked in Implementations, Business Analytics, Product Management, and Project Management/Process Improvement.

In that time, I also left the working world for 8 months to complete the back half of an MBA program. It was very challenging to have zero income for 8 months, but it DEFINITELY helped me in the long run, even though it cost me an arm & a leg!

What are you doing now to keep your income growing?

I’m nearly maxed out in salary at my current level (says HR salary bands). I’ll get some annual COL adjustments, but there’s very little room for any substantial improvements without (1) moving back to USA & returning to some of the additional incentive structures with my now higher base pay or (2) seeking a role at the next level up (VP) – for which I’ll also likely return to the states. I really enjoy what I do, and I am loving living in Europe, so I might plateau here for a couple of years in terms of salary.

That being said, to grow my overall income, I am starting to educate myself regarding rental properties (to be purchased in USA). I have a lot I need to learn, especially with tax implications given my situation. I also clearly need to find a local team I can trust since I will have a long-distance relationship with the properties.

Lastly, I’ve looked into the possibilities of side hustles here in Europe, but its complex and frankly I want to use my down time for traveling and enjoying life here, not doing more work!

What are your future career plans?

Honestly, I’ve been more of an ‘opportunist’ vs a ‘planner’ when it comes to my career. I consistently invest in myself through education and development opportunities, but I don’t have a grand plan of what I want to be when I grow up.

In reality, in a few years I will probably leverage my international experience to return to the US (likely with my current company) to a VP-level role in Operations, Project Management, or something of the like. Fingers crossed.

Longer term I want to get to FI status by age 45 so I can have more options open to me. For me FI will be a combination of about $1.5m in cash/investments and/or $25-50k of passive income streams.

I love the idea of working part-time or maybe starting a consulting business where I could take a few months off from client work to do some traveling or volunteering on occasion. Basically, I don’t think I will join the RE part of FIRE too early, but I want the option to!

Have you been able to turn your income into a decent net worth (what is your net worth)?

I’d like to think so. My current Net Worth is $656k and I am 100% debt free.

I have about $485k in my legacy 401k / brokerage accounts and about $165k in cash across two continents. I know it’s stupid to have this much cash, but I will leverage some of it for what I said earlier about rental properties.

Again, for historical perspective, here is how my Net Worth has grown over the years, tracked every year on Dec 31 (2020 being as estimate as of Nov 13, 2020). I remember thinking around 2008/2009 when the reality of paying back student loans sunk in that I would just be ‘over the moon’ to have a ‘positive’ Net Worth. I never dreamed I’d be where I am today, and as the first person in my family to go to college, I feel incredibly fortunate to be here now!

Why or why not?

In the end, I think it’s the ESI basics that have helped me achieve this level of net worth! – there’s no other secret sauce! I have worked hard to grow my income, but I’ve also tried to live below my means.

As an example, my apartment is only 14% of my gross income and my total spending is only about $55k/year. Despite this, I’m currently looking to move out of the city and to something less expensive.

My office, which I live very close to, is going to continue to be in ‘work from home mode’ for at least six more months & there’s talk of significant flexibility thereafter. Therefore, I think I can cut my housing expenses by 30-50% if I moved a bit further away.

Also, my investment strategy is super boring (buy balanced portfolio of ETFs and hold hold hold), but it works.

What advice do you have for people wanting to grow their incomes?

Most of my advice is going to be based growing your salary at your primary job as that’s how I’ve grown my income so far. (I could use advice on passive income generation!!):

• Find a job you enjoy – it makes it so much easier to do the job when you have a passion for it!
• Take advantage of all the training/education you can get for free via your company. I have taken over $20k worth of courses in the last 13 years and didn’t pay a dime.
• Realize that no one cares as much about you and your development as you do. Therefore, be sure to make it known what your interests are. It’s not enough to just ‘do good work’. This is especially important for women & introverts of all genders who tend not to ‘share’ these desires with their managers as much as men & extroverts.
• Volunteer for special projects BUT be sure they are full of ‘promotable tasks’. I don’t advise people (especially women) to volunteer for things like social committees. Volunteer to be a mentor or to help on-board a new hire. Don’t offer to plan the next office party.
• Realize that life is 10% what happens to you and 90% how you react to it. Stay positive in the face of adversity & change. This is something that all the best leaders I know do really well.
• PRIORITIZE and “do what you say you will do”. Remember, you can do anything, but you can’t do everything.
• Build a “Credibility Bank”. You need to make more deposits than withdraws when building relationships with people. I hate ‘Networking’ in the classic sense, but I love building relationships with people all across my company.
• When looking for your next role, consider moving laterally or moving departments. You don’t always need to move ‘up’. Also consider what gaps you have and what roles you can take to fill those gaps. Don’t just try to work your way up the same ladder.
• Negotiate your salary!! Gah, I wish I did this more often when taking new roles – I’d be in an even better place now!
• Read!

Here are books that helped me with my career progression, and therefore growing my income:

• The First 90 Days
• How Women Rise
• The Trusted Advisor
• People Styles at Work
• You’re in Charge, Now What?
• The Goal
• The Five Dysfunctions of a Team
• The Advantage
• The 5 Languages of Appreciation in the Workplace

I also subscribe to HBR.