The Daily Dinar

Free Money Finance has a great post demonstrating the importance of managing one’s career. They offer a case study of four college students who each graduate at 22 and start off with jobs earning $25,000 p.a.

Graduate A didn’t manage his career well and only managed a 3% average annual increase in wages. Graduate B did an adequate job and managed a 5% average annual increase. Graduate C did a good job and managed 7.5% and the last graduate did an excellent job and was able to achieve 10% average annual increases over the course of his career.

The difference between the increases may not seem particularly significant but, assuming each graduate worked till the age of 65, look how they ended up:

• Graduate A ended up making $89,113 the year he turned 65. He earned $2,226,210 in his career.
• Graduate B ended up making $203,742 the year he turned 65. He earned $3,778,575 in his career.
• Graduate C ended up making $560,408 the year he turned 65. He earned $7,699,175 in his career.
• Graduate D ended up making $1,506,002 the year he turned 65. He earned $16,316,019 in his career.

Therefore, growing wealth isn’t just a function of how little you can spend, but also how much you can increase your earnings over time. As one’s career is the principle source of income for most of us, it makes sense to pay attention to it and invest in it. For example, ongoing education is one form of investment as is choosing roles that offer the best opportunity for skills development and boosting one’s future earnings potential.