by Calvin Yeo, Managing Director of Doctor Wealth Pte Ltd
For most people, their work based compensation (i.e. salary, bonus, commission) make up most of their income. When it comes to financial planning, we are focused on managing current financials and projected financials based on status quo. Thinking outside the box though, you should also explore ways to give your income a boost.
Ensure That You Are Fairly Compensated
All salaried workers should expect to be paid at least market rate for their work. One of the first ways to figure that out is to look for job surveys published by recruitment agencies and job classifieds. They normally have a pay scale varied by industry and position level. Make sure your pay scale is at least in the middle tier or top tier. If you are not, you should renegotiate your package or look for alternative jobs
Plan Your Career and Upgrade Yourself
Plan out where your career is going and figure out how you can climb up the corporate ladder. All Companies want individuals who are willing to step up and contribute without being asked to. Show the initiative and work hard to prove yourself to the Company that you are ready for higher responsibilities. By doing so, you will eventually get recognized and be promoted, raising your salary packages and more. It is also necessary to keep educating and upgrading yourself, be it taking new courses, getting a MBA, picking up books on the industry and management. Learning never ends.
Opt for a Variable Package as Opposed to Fixed Package
A well designed salary package is often based on variable factors as opposed to a fixed salary. A good management knows that by tying rewards to contributions, employees are well incentivized to work harder. Similarly, you can try to get a job with a variable package such as sales, work really hard every month and you will see your rewards very quickly in terms of higher commissions and so on. Even if you are a manager on a fixed salary, discuss with your employer to see if they can tweak the salary package to one which is of lower basic but higher overriding or profit shared incentive. So when your division does well by having good profits, you get a higher compensation package as well, making it a win win situation. An even more daring approach would be to take up company stock options as opposed to getting a higher salary, the potential upside is a lot higher for smaller companies.
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About the Author
Calvin Yeo is the Managing Director of Doctor Wealth Pte Ltd (www.drwealth.com), which is an online financial planning platform. He is also a Chartered Financial Analyst (CFA) as well as Certified Financial Planner (CFP).