People often wonder how other people get rich. There aren't any secrets to becoming rich, you can get rich doing anything, even if you have no business sense or entrepeneurial spirit. You just need to make choices to give yourself the opportunity to be rich.
Recently, I've seen two examples of just such a choice. Let's call them Candy and Samantha (I changed their names, but they are real people). They have similar personalities - not particularly ambitious, not risk-takers, not entrepeneurial, with very limited investing experience. They both understand the concept of work-life balance, so they work 9-5 jobs, and enjoy active social lives outside of work. Neither spends any time balancing checkbooks (even Candy, the accountant!), nor thinking of ways to save a few dollars, and they both love to shop - sometimes extravagantly but never to the point that it won't be paid off within the month. They both made a recent decision that greatly changes their finances without sacrificing their way of life.
Candy had recently resigned from her previous position as a staff tax accountant, at which she earned $60 K annually. After receiving her resignation, management offered a promotion to tax manager with a salary increase to just under $70 K. Candy had been with her company for three years, and decided to widen her circle of opportunity by seeing what offers were available outside of her company also. She interviewed with several companies not local to her area. The offers ranged from staff positions to management positions, with salaries from $70 K to $110 K. The position she settled on originally offered her only $80 K, so she was going to reject the offer even though she though she liked the position - the offer was too far from the higher offers. But after I advised her to present them her then highest offer for $100 K, they immediately matched (another company offered her $110 K two days later). Additionally, the company offers the potential of up to 30% annual bonus, with average bonus at 15-20%. In the space of a few weeks, Candy's annual income went from $60 K to $100 K. She is only 29. Now she actually has a lighter workload than her previous job.
Key points: 1. Know your worth, don't sell yourself short. 2. Widen your options. 3. Everything is negotiable - including the details of the relocation package. 4. Choose the better job - easy right?
Samantha is 34 and in a very different field - cancer research. She graduated 1st in her undergraduate class from a highly regarded well-known university, and has a PhD in genetics from the same institution. For all her brilliance and years of experience, she was only making about $70 K a year. This is because she was working for a public research center, and she never thought much about how much she was paid as long as it was enough to live on. I frequently advised her to switch jobs, but she never took any action. After several years with the same employer, she finally made the switch outside of the public sector - her salary increased to $90 K, and she was granted some stock options. After only 6 short months with her new employer, her stock options are already worth $500 K. She consulted with me before accepting the position; I ran through the numbers with her and told her they were shortchanging her on the stock options. She was too timid/humble to ask for more, but I believe she could have asked for 2x what she got. But $500 K with a lot more upside ain't half bad, right? She's still doing the same kind of job she was doing before, with the same work hours, but now she's being compensated a lot more for the same work. The environment at her new job better enables her brilliance - more funding, a state-of-the-art lab, more resources all around.
Key points: 1. Negotiate. 2. Choose the job with upside potential. 3. Employers will offer the least amount that they think you will accept. 4. Public positions pay a lot lower (but have decent pensions if you stick around long enough). 5. If you spend your career as a non-management employee, the road to quick riches is through stock options. But don't choose any old company with stock options, choose a company where you believe in their future. Smaller companies offer a bigger share of the pie - there is a little extra job insecurity, but a) the potential payoff can be huge b) these days, job-hopping is common practice, and most jobs are insecure anyway. I interviewed at several companies before accepting an offer also - seeing a demo of their unreleased first product convinced me how revolutionary the company was, and talking with half of the employees there convinced me how smart my co-workers would be, so I wanted to be a part of it.
I think both Candy and Samantha are well on their way to becoming millionaires, on two different paths. But they share similar traits and habits: They are not entrepeneurial at all, and have no interest in doing any business outside of their 9-5 jobs. They both contribute to 401k, but talk to them about the stock market and they'll fall asleep or excuse themselves. They both look at real estate as a home to live in, not an investment. They both find challenge in and enjoy what they do for a living. Neither of them is dependent on the continued success of their employers - they both chose industries that they can easily find other positions in. Neither has any debt at all, except for the mortgage Samantha has on her SF house, and the one Candy has on her condo. They both pay off their credit card bills every month.