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Starting Salaries, Annual Raises, and How They Affect Your Long-Term Earning Ability

By Erik Folgate

Over at Free Money Finance, there is a great article about starting salaries and how annual raises compounded over a long period of time will greatly affect your earning capacity.  However, a true money crasher would be thinking of ways to take the shackles off of their earning potential by creating alternative creative streams of income that are limitless.  Don’t settle for an annual raise and salary jobs. 

If you are reading this blog, then I am sure you have read Free Money Finance’s Blog, but I encourage you to go through some of his most popular blogs.  This is one of the most popular personal financial blogs on the net for a reason. 

Erik Folgate
Erik and his wife, Lindzee, live in Orlando, Florida with a baby boy on the way. Erik works as an account manager for a marketing company, and considers counseling friends, family and the readers of Money Crashers his personal ministry to others. Erik became passionate about personal finance and helping others make wise financial decisions after racking up over $20k in credit card and student loan debt within the first two years of college.

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  • http://www.forestcotton.blogspot.com/ Jim

    I would like so very much to comment about career risk along with a few other matters related to employmet and education.

    The first thing is this I am a fairly intellgent person but I have never been able to develop a concept of what the job market is really all about. Yes I know that theirs jobs that are skilled as opossed to unskilled. But here’s the thing how does one define what skill is for example a janitor is clearly a unskilled job or very low skill job and a dentist with twenty ears under his belt is clearly a high skilled job’ but what about everything else in between the two. Someone that drives a van and makes local delveries is clearly not as skilled as someone that drives a eighteen wheeler over the road. But is the job driving a eighteen wheeler really a skilled job or not. What about the head manager of a seveneleven would their job be considered skilled. What about a helicopter pilot. What about a car salesmen compared to a certified auto mechanic. Is the car salesmen considered a skilled job or not. I could go on and on but I think you get the point its much harder to define what skilled is or isn’t. In other words where does one draw the line when it comes to skilled or unskilled.

    Another area I would like to comment about is formal education. Yes its true that people with more education make more money than those with less education. But break it down a little bit and its not so clear. If I randomly select 100 college grades and remove the twenty highest paid grades form the list’ I would be willing to make a educated guess that those twenty highest paid grades make as much money as the other eighty combined.

    What about this If we take two college students that are identical in almost everyway with one exception. One of them is one or two credits short of their bachelors degree. The other completed their education and received their degree. Now its safe to say that the student without a degree is just about equal to the student with the degree. We could say that they both would be just as likely to perform as well in the same job yet the student with the degree would be considered better educated and more likly to be hired and receive more money than the student without the degree’ but really theirs essentially no difference between the two the difference between the two is a just a technicality. In other words the difference between the two is more like a class distinction than anything else.

    One other factor to also consider is this the type of person that attends college is more likly to be more intelligent and also more ambitious than the person that graduates from high school and just goes out and gets a job instead of attending college. So at least part of the difference in pay can be attributed to the qualities that I just stated. In other words a person thats very bright and ambitious whether they have just a high school deplomia or a college degree would be more likely to be promoted on the job simply stated bright and ambitious people are more likely to be promoted on the job than people that are not bright and ambisous and most of the people that are not bright and ambitious just attended high school. It just so happens that most people that are bright and ambitious attended college.

    The third thing I would like to comment about is this ranking accounts for a significant amount of the pay difference between two individuals. Take to people that both work at two different banks they both attended the same college or university they both have the same years of experience they both took the same courses in school got exactly the same grades the same degree the same sat and act scores. They each have worked at the bank the same number of years. They both have equal experience in the same banking speciality. They both have performed the same tasks. They both do the same amount of work they both have six people working under them. Their job performance review is exactly the same. Everything between the two is equal with one exception Bank employee number one is a senior vice president’ employee number two is a junnior vice president. Banks have always been big on titles. employee number one makes considerably more money than employee number two and its entirly due to the differnt ranking and really nothing else.

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