Beyond the Salary: Prioritizing Career Growth When Choosing Your Next Job
If you want to build exponential wealth and skillsets, focus on long-term growth instead of TC.
I recently had a two-week break that had me reflect on my long-term goals and career.
I felt very guilty that I couldn't write articles for a month due to project deadlines.
Work is more important than writing articles and building a personal brand because you abide by a contract with another entity. However, building your brand and writing articles may create countless growth opportunities in the future. One way to solve this problem is to take a more relaxed position so that I can focus more on writing articles, and the reason for not taking action boils down to the golden handcuff.
If you choose between two options, TC or growth, which one will you choose?
Would you choose:
a high-paying compensation but limited room for growth
an enough-amount compensation but focuses on long-term growth
The past me will choose the first option. However, after more reflection, I will choose the second option. Here's why.
Money is required to live a worry-free life. But more money, however, can't buy a healthier body or a more meaningful relationship.
Growth Can be Exponential
You get that dopamine rush getting a flying compensation. However, one month in, you realize you are wasting valuable time on things that don't grow.
Suppose growth doesn't exist in the stock market and real estate. As time passes, that investment will have a diminishing value return. Real estate investment is a great way to build wealth because it contains equity build-in, equivalent to growth.
To build wealth, you must exchange that short-term greed for long-term gratification. Growth is tied to delayed gratification because you won't see the result of your hard work until a few years later.
The famous 40 years of Stanford Research found that people with delayed gratification are more likely to succeed.
The Marshmallow Experiment began by bringing each child into a private room, sitting them down in a chair, and placing a marshmallow on the table in front of them. At this point, the researcher offered a deal to the children if he left the room, and if the child didn't eat the marshmallow when he was away, they would be rewarded with a second marshmallow.
If the child ate the marshmallow while the researcher left the room, they would not get a second marshmallow. This fascinating research study found that children willing to delay gratification and wait to receive the second marshmallow had higher SAT scores and lower levels of substance abuse.
When choosing a company to join, you should look for a great growth trajectory instead of one offering the highest total compensation.
My friend joined Doordash in 2018 when Doordash was worth 2.5 billion. They didn't give him high cash compensation, but he received a good amount of equity. 2 years later, Door Dash IPO'd with a 32 billion valuation, and he was able to reap the benefit from his hard work.
In the My First Million Podcast, Sam Pharr's wife, Sara, has worked in a startup that helped her become a millionaire. She used to work for Facebook, now Meta, and gets extensive equity from the company. Then, she moved to Airbnb when it was valued at $20 billion and has ridden the wave of exponential growth to 100 Billion. She became a millionaire based on the stock grant.
The wealth that software engineers accumulate comes from equity. Why? Because equity is not fixed, and there is an opportunity for exponential growth. Thus, even though they are not the company's executives, they still benefit from its success.
Salary is Temporary
I may make 400K this year. However, if I get lay-off next year, my TC will become 0.
If I took a position with countless growth opportunities, getting lay-off doesn't mean my skillset and learning experience would vanish.
Understanding that TC is temporary makes a bigger picture of whether or not to take that next gig. If they offer high TC without growth opportunities, treat it as short-term. It is like buying a million-dollar rental-properties that will stay a million dollars forever.
Chammath Palihapitiya said in one of the interviews with Happy Scribe that the single mental shift to understanding wealth is understanding the difference between labor and capital.
He was well compensated at Facebook as a senior leader. However, earning money through labor differs from earning it in the form of capital. Making money based on labor requires exchanging the value of time with money. Making money in the form of capital is called passive income.
Making money in the form of capital means you own a piece of a great business or skillset, and if you are an owner, you don't need to time the market. You need time in the market. You must consider owning a piece of that business when looking for a job. Another way to look for growth aside from equity is through experience and knowledge.
Think of your career like an investment and about the ROI of your investment. You are exchanging your valuable time for TC, equity, and experience.
TC doesn't Equal To Hours Per Pay.
Much of modern life is about trading time for money. Time and the value of money are intricately bound.
You may earn a high-flying TC, but you must work 100 hours per week like an investment banker. Even though the total compensation looks good on the balance sheet for this year's tax return, your health, and relationship may suffer.
More money is better, up to a point. It's easy to get addicted to new jobs with higher pay. However, as time goes on, money's value diminishes while time's value increases.
To accurately calculate the amount of money you generate, you can think about it in terms of the time-money exchange rate, which means hours per pay. For instance, earning 10,000 per week but working 60 hours per week is equivalent to earning 5000 but working 30 hours per week.
Before choosing a high-flying TC, consider how much you want to trade your time for money.
Recap
It is tempting to take the rewards/treats in front of you now instead of the rewards that will present in five years. You can calculate the opportunity cost in the 3 - 5 years term. Can you use your time in the next 3 to 5 years to do something worth more than the currently given compensation?
I want to leave you with a quote from Jack Ma, "If you want to be successful tomorrow, it's impossible. If you want to be successful a year later, it's impossible. But you have a chance if you want to win ten years later."
Think about your career choice in terms of long-term growth opportunity instead of shiny total compensation that is in reach, my friend!