“In business, you don’t get what you deserve,
you get what you negotiate.”
~ Chester L. Karras
I recently wrote an article about a holistic concept of net worth and in the book, Women’s Worth: Finding Your Financial Confidence, author and certified financial planner Eleanor Blayney devotes a complete [excellent] chapter on ‘human capital.” She states: “…our most valuable asset…is our ability to turn our intelligence, education, skills, and experience into income through work.” She goes on to point out that significant wealth is seldom the result of investments in stocks, bonds, and other traditional assets. Rather, our human capital is the path to wealth building.
Blayney shares an illuminating worksheet that calculates the lifetime value of YOUR earnings and shows how things such as asking for a raise, leaving the work force for three years to parent full-time, or getting retraining impacts the value of human capital over time.
She asserts that “the value of your earnings are every bit as important to grow and manage as your investment accounts.” One way to do this to this is to obtain and sustain a competitive standing in the job market. Blayney shares, “Studies have shown, for example, that a college education can increase lifetime earnings by as much as $1 million.”
However vital keeping yourself re-tooled is, it is trumped by an even more important piece of the equation: “asking for more.” Blayney points out that this is something that men are MUCH more comfortable with. The current wage gap means women earn 77 cents for every dollar earned by men in the same job. This may not seem like much, but to put it in perspective, for female college graduates this will result $1.2 million dollars less in earnings over their working life then their male counterparts!
So far, this is my favorite sentence in the book–and may even be one of the most powerful statements I’ve read my whole life:
“I can state with certainty that the investment of time and money spent on improving [negotiation] skills can make women wealthy in a way that simply becoming savvier about investing cannot.”
I hope this is music to some of your ears, because I know how much you ladies dread comprehending your financial portfolios. Now, I’m in no way saying ignore learning about your investments, but it seems to me that there is something super efficient about using negotiation skills to uplevel one’s income. Blayney attests that it is the biggest bang-for-your-buck ROI. AND, negotiating skills can be leveraged in every area of our lives, not simply in our boss’s or client’s office. Think about how beneficial those skills could be in getting your partner to take out the garbage or accompanying you to that chick flick you’re dying to see!
So, ladies, be on the lookout for more information about developing successful negotiation skills because I’m seeing how important this is to rocking your money mojo–and we are going to be on it!
YOUR ACTION STEPS TO FINANCIAL SMITTEN-HOOD:
I’d like you to pull out your Money Journal and write about your response to this article. What images, words, feelings come to mind when you think about “asking for more” and/or negotiating? These are not typically feminine qualities, so I imagine there may be some conflict arising. I’d love to hear your thoughts about this, especially regarding the gender piece. Please share them with me in the comments section below!
{ 2 comments… read them below or add one }
I find this a really interesting question. I’m in my twenties and from what i can tell, myself and my female friends who work or have worked full time employed for a company tend to believe that your salary is set when you start a contract, and if you’re lucky you’ll get a raise in time when your manager recognises your added value! I don’t think ‘we’ expect more money as such and are probably more understanding if a boss says ‘i’d love to give you more but we just don’t have the money right now’, especially in a recession!. I now work freelance so set my fee or negotiate it, and use salary/fee comparison sites to make sure i’m setting my wages at a fair price. I think confidence in the value of your work and skills helps you set your rate higher or ask for more – but personally i’ve found i’m more open to asking for more and keeping my doors open to getting more since working freelance/self-employed. A good thing about being able to value your own work and decide a price for it is it makes you feel less cap in hand, more in control. And that someone else isn’t putting a limit on your income which can make you feel… owned? or in a less favourable position in a financial relationship?
I love this article and I think it’s so true! I remember the first time I negotiated for what I felt I was worth. I was 14 years old and a family with three kids had just paid me $20 to babysit for an entire day. I was livid. I called another woman I babysat for in the neighborhood for support and she suggested that I call the family back and tell them that my rate was much higher. I called the father of the family and told him my rate and that $20 to watch 3 kids for an entire day was unacceptable. I was completely terrified, of course. He was totally stunned that a 14 year old girl had the balls to stand up for herself. Recalling this story still makes me shake with nerves because it was so scary to negotiate, but I did it and it felt great. I never babysat for that family again, but I didn’t care because standing up for my worth felt amazing and I will never forget that moment. I ended up getting paid what I was worth and he got a good lesson in not taking advantage of young women. I know we’re both better for it. Thanks for inspiring me to take a walk down memory lane, Lora!
{ 2 trackbacks }