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Leveraging Your Career Toward Financial Stardom

Photo of author, Coleton Berletch.
Coleton Berletch
Data Analyst

If you are anything like me, the lack of sports in recent times has created a void in your everyday life. ESPN’s The Last Dance influenced me to dig into all sorts of NBA history to fill my sports itch until the day they return. Consequently, I thought of free agency; one of the most exciting times to be a sports fan. For a few weeks each year, fans get to imagine their team with new stars and hope for the next year, while the most prominent of stars take their pick of which team they wish to play for. Though exciting, these decisions are often surprising and sometimes rather puzzling to understand from a fan’s perspective. For some of us, these decisions may inspire us a desire to have the type of decision-making freedom in our own lives that these players have.

Some athletes choose to play for the team that offers them the most money; but each year a handful of players across every sports league accept deals that pay them less money compared to other offers. In last summer’s NBA free agency, for example, Golden State’s Kevin Durant and Toronto’s Kawhi Leonard left $57 million and $59 million, respectively, in guaranteed money on the table to sign with other teams.

Each player had different reasons. For Durant, it was to go play basketball with a longtime friend. For Leonard, it was to further his career outside of basketball in Los Angeles. I’ve seen players go elsewhere to be closer to family, or even just for better weather.

As I spoke with McKinley Carter President/Chief Investment Officer David McKinley on this subject, we agreed that these players are stars, and thus they have established levels of wealth that enable them to consider other factors above pay in their decisions. The question then became: For those of us who aren’t elite level athletes, how can we reach a similar point of "stardom" in our own lives? One that would give us the luxury to make decisions not based solely on financials. In other words, how can we, too, reach financial autonomy?

As a newcomer to the financial services industry, I learned that while investing is paramount and perhaps the most critical element of any financial plan, many people fail to realize the value of their own careers in their planning efforts. In fact, at McKinley Carter, advisors tell clients that their career and skillset may just be their most valuable asset, even if it's difficult to put an exact price tag on it.

By advancing your career, you can save and spend at the same rates, yet create a substantially greater level of wealth at retirement. To demonstrate that point, we often run "time value of money" calculations to determine a rough estimate of just how much difference advancing one's career can make. While most people get a yearly cost of living adjustment to their paycheck, we ask the question: What if you could advance in your career in a manner that, on average, yields you a 5% raise each year?

Here's the scenario: Assuming you invested 5% of your $50,000 salary without any employer match, you would accumulate $1,850,000 more at retirement by advancing your career at just twice the rate of inflation. The returns are extrapolated from McKinley Carter's asset allocation, which returned 6.2% annually from 2005 to 2019. Saving 10% of your salary nets nearly 4 million dollars more for you at retirement. These numbers are a testament to the value of one’s career and serve as proof that sometimes, the best investment you can make is in yourself.

Additional Education is Key to Career Advancement
Outside of performance-based pay increases, one of the best ways to advance your career is through additional education. Advanced degrees and certifications put a professional in an advantageous position, as possessing market-valued knowledge increases one’s value. Thus, someone possessing a master’s degree or an advanced industry certification increases their marketability, and salary as a result. It may seem like common sense, but often people lose sight of educational goals in the day-to-day grind of their workday. A steadfast commitment to professional education is key.

Career guidance is an important role of your wealth management advisor. We take great care at McKinley Carter to put each client in the hands of a capable team of advisors who seek to learn about your personal situation and position you for sustained financial and life success. Every day, we help clients plan for their families, businesses, properties, and careers, leveraging our vast professional networks to prepare you for your own "Good Life" stardom.

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