Recently every post skips over the most important personal finance point. The best investment is in finding a new job, competing your salary, getting a new skillset. Posts instead jump to how can I make the most with this $10k windfall, or how can I retire at 50 with an $85k income. None of the wikis hammer the point home. Even a $5k per year salary boost from switching jobs is probably worth the same as $150k with 3.5% interest in a bank account.
Go out and get those $5 salary and skillset gains!!! /rant
Posted by atlas-85
10 Comments
I do agree that there’s not enough discussion around this. However, that’s not usually the type of the questions that people ask here.
Henryfinance is a pretty good sub for job discussions
It’s impolite to assume that someone is struggling financially because they are a slacker, just as with assuming that they buy too many lattes.
Who skips this? The only way you have more free cash flow is to either increase your income or cut your expenses. And you can only cut your expenses so much.
Not that I disagree with you, but there is a reason this sub is “personal” finance, and not just “finance.”
Not everyone is willing or has the flexibility to chase the money. For example, the job with more flexibility but lower pay may be preferable to some. Plus with today’s economy, layoffs are frequent and the job market is incredibly hard (especially if you’re early career), and not everyone has the luxury of time or finances to build skills on the side, so it’s a little out of touch to say “just find a higher paying job”. Sometimes people have to take what they can get in order to pay the bills.
Sometimes people have to do with what they’re given for that moment in time, and that is okay. There are subs and resources out there on how to quickly climb the ladder in each respective field.
I will keep hammering this point too. While salary is important, it shouldn’t be the only thing (or even the first thing) you consider when changing jobs.
When I listen to Dave Ramsay shows debt free screams. I’ve noticed all of the guests are making significantly more money than when they started paying off debt.
Just like fitness requires diet and exercise, personal finance requires more money and less spending.
I suppose so, but that’s vastly over simplified. There’s a WHOLE lot of high income/zero or negative net worth people out there. You can hustle all you want but if you blow it all, make stupid investments, etc. you’re still broke at the end of the day.
Ramit Sethi’s youtube is a good illustration of this. Numerous people making literally hundreds of thousands a year and they’ve got like one month of savings, if that.
You can have a big income and be broke AF. I don’t feel like people talk about that enough personally. It’s a really common problem. You can make 400K a year and still be poorer than the person making 80K who saves and invests wisely. Some of the wealthiest people I’ve known in my life weren’t hustlers, grinding for pay raises, but rather practical, diligent people who saved and invested over time.
You claim income is the most important financial point, and there is truth to that, but it is also irrelevant to most topics on this sub.
Almost anyone with 2 brain cells to rub together knows that “make more money” tends to better their financial positions in most cases. However that “solution” isn’t viable for everyone, is actively being pursued but not currently possible, or is completely out of the scope of the question.
Let’s take the “what should I do with a 10k windfall”, how would you suggest turning that into a higher income. College course work is significantly more expensive than that, learning a new valuable skill rarely requires you to spend that amount of money, certification of a new skill maybe. Or they could invest it and see it grow into ~180k in 10 years.
As for people asking how to retire at 50 with an 85k salary, they are explicitly not asking “how can I make more money” they are asking what is necessary to accomplish this stated goal so they can measure feasibility. Saying that goal is stupid and they should focus on the income side of the equation misses the point of the question entirely. By answering the question that is asked, you are providing them the information necessary for them to make the decision on what their plan moving forward should be. Can they afford to save 25k a year out of that 85k for 20 years by the time they are 50? If yes then they might send it, if no then they know they need to expand their retirement horizon or increase income.
Name some certificates and skills people can “buy” with a little bit of time investment and a windfall