**Your Greatest Financial Asset: Your Career**
When you’re investing in assets, what would be your greatest financial asset? Is it your house? Your investments? Consider this: the average stock market return is about 7%, and the average return on commercial real estate is approximately 9.5%.
Unless you’re already retired, your greatest financial asset is most likely your **career**.
That doesn’t mean saving and investing aren’t important—they absolutely are! If you spend everything you earn, you’ll never build wealth. So, try to save some money from every paycheck. If you don’t invest and leave your entire capital in a savings account, it will take much longer to reach your financial goals.
Investing in simple, accessible structures like index funds is a smart move. In fact, this is also the preferred investment method of the famous Warren Buffett.
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### Why Your Career is Your Greatest Financial Asset
Your career is the driving force behind building your financial assets. If you’re able to increase your earnings throughout your career while keeping your spending steady, you’ll have more money available to spend, save, and invest.
Let’s illustrate this by estimating the lifetime earnings of a new graduate.
Imagine you just graduated and will earn an average of €2,500 per month, which comes to €30,000 per year. If you work for 45 years and receive an average of 3% pay raises each year, you will earn a total of approximately **€2.8 million** over your career!
That’s a huge amount of money. This means your career is an asset worth €2.8 million—not too shabby! For most people, there are few other assets worth more than their career itself.
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### Growing Your Wealth: Increase Your Salary Growth Rate
To grow your wealth, it’s important to increase the growth rate of your salary—similar to how compound interest works.
For example:
– At a 3% annual raise, your lifetime earnings are around €2.8 million.
– Increase your raises to 4% per year, and you’ll earn about **€3.6 million** — an extra €850,000 just by increasing your salary growth rate by 1%.
– If you push that further to a 6% annual raise, your lifetime earnings jump to **€6.4 million** — which is 128% more total income for just an additional 3% salary growth!
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### Compounding Like Warren Buffett
Now, imagine you’ve increased your salary. What next? Don’t just save—**invest**!
If you invest the money saved from your salary increases throughout your career, the results become even more impressive.
For instance, with a 4% yearly salary increase, after 5 years, you’ll be earning about €36,500 annually. Investing the extra income difference over the rest of your career, assuming a 7% average market return, can turn that 1% extra salary increase into an additional **€2.4 million**.
So, if you combine your €3.6 million earned with the €2.4 million gained from investing, that’s a total of **€6 million** across your lifetime. Pretty amazing, right?
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### My 21% Return on Investment: The Power of Career Growth
I started working in April 2018 at a financial consulting firm. My starting salary wasn’t very high, but the growth potential in this sector is significant.
In my recent performance review, I requested a €400 raise and ended up receiving a €477 raise **plus a promotion**—a 21% return on investment in just 9 months! That’s better than any individual investment I have made so far.
This experience highlights how rewarding investing in your career can be.
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### Focus on the Right Skills to Boost Your Salary
To consistently achieve salary increases above 3%, focus on the following:
– Deliver excellent performance measured by positive reviews
– Network by attending industry events and connecting with colleagues
– Be a collaborative team player offering help to coworkers
– Enhance your skills via classes, courses, or certifications
– Master the basics of your job function
– Communicate effectively and ask for feedback
– Stay aware of your market value and explore job options regularly
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### Conclusion
If you’re willing to put in the work, you can literally add millions to your lifetime earnings by focusing on an above-average career trajectory. In this way, achieving financial independence doesn’t have to take 45 years.
Are you making your career a priority? What are your thoughts? Share your ideas and experiences in the comments below!
https://radicalfire.com/career-greatest-asset/
