In early October, 2007, I announced that I had retired in my forties. So I now join my wife, who had stopped working earlier to be at home with our child. As promised, I am writing a series on "How We Did It," of which this is segment #3. ( #1 is about our childhood and #2 is about education.) Our story is a boring one because we did it by working for established companies, spending less than we earn, and prudently investing our savings. There were no business start ups, lottery winnings, or inheritances involved. However, it worked for us. Read on if you still want to find out how.
For us, our jobs were the majority of our income sources - for living expenses, savings and retirement benefits. In hindsight, there were some things I did very well and there were other areas which I should have done better. I hope my story will provide some insights that others can use.
What I Did Well Initially
I accepted a job with high pay and high potential. Having majored in Chemical Engineering, I decided to start working in that field. The starting salaries were among the highest and I was looking forward to using my education. I had several job offers from oil, chemical and other industries hiring Chemical Engineers. The positions all had potential for higher level management positions, which is the career track I eventually chose.
Although I now recommend taking the job with the highest offer, I didn't at the time. In fact, I accepted the lowest paying offer(10% lower) because it had the type of work I most wanted to do.
Worked in a low cost of living area. While it was not the driving reason, the location of my first job was in a low cost of living area. Thus, my salary enabled me to have a comparable standard of living to accepting a higher offer.
What I Did Well Later (But Should Have Done Earlier)
After over a decade of an average career, I knew I wasn't achieving my potential. There were a number of peers advancing faster than me. While I had advanced one level, some had advanced two levels, and one had advanced three levels. I finally realized that doing good work wasn't enough to achieve the level of success I wanted. Exceptional work was needed to be compensated above average. Here were the three components of exceptional work that applied in my career:
Consistently influence the direction of a project to be bigger for the company. The operative words here are "consistently" and "bigger for the company." The company rewards results that benefit the company and reward people that do it consistently. Bigger often means delivering greater market share, lower product costs, higher quality or faster than before. It can also mean overcoming adversity (e.g. higher oil prices) better than competition.
It means doing detailed homework, being aligned with the corporate mission, and getting support of others who aren't in the direct organization. Sometimes it means figuring out and doing something that hasn't been done before. Often it means taking personal risk. It always means working harder than just completing what one is expected to do.
Commit to delivering an exceptional goal. Who wants a coach that commits to coming in third place? I want a coach who will commit to and do the work to win a Super Bowl. The same expectation is true in my company. People who commit to exceptional results get noticed. It's tough to get to and hold on to the top spot in the market place. It's hard to go from losing money to making money in one year. It's nearly impossible to increase market share by 10% in two years. Commiting to and doing what's needed to get achieve these exceptional goals will get rewarded.
Deliver the goal. Of course, we all know that saying and actually making it happen can be two different things. So the final step is actually delivering what one committed to doing. Exceeding one's commitment is even better. Then repeat over and over in different projects and different environments (e.g. favorable or unfavorable markets).
My Example
I still remember the day my department manager called me into her office and said, "Our General Manager has asked that we staff this project again. We've decided to do it and think you would be the best candidate. Let us know if you are interested." Even though it was not a glamorous assignment, I immediately agreed. The project started before my transfer and I decided to start working on it since I would inherit it. It became clear early on that the initial focus area had much less than a 50% chance of succeeding. At one point, the chance of success appeared less than 10%.
In my younger days, I would have used the infomation to explain to my manager why we weren't able to succeed. However, I now realized that exceptional meant telling my manager that we didn't yet have the solution, but we were committed to succeed and figuring out how to deliver the needed business result. Using extraordinary effort, I studied the historical records, enlisted experts outside my organization, and collaborated with another function to identify strategies to increase our chances of success. After choosing two options, we worked both of them to create the solutions, which were good but not guaranteed successes. While the solutions were not perfect, we had done sufficient homework to be better than our competition, and delivered a successful outcome, that everyone wanted but few had expected.
Over the next two years, the work we did made several projects into top priority areas for our General Manager. In addition, I used the opportunity to influence the creation of a global network of experts to better manage how we did the work.
After three years of similar results, I was promoted to a section manager. After three more years, I was promoted again to a department level manager. There were significant compensation increases with each promotion.
Since we consciously increased our standard of living at a much slower rate than my salary increases, we were able to put significantly more towards savings. This has enabled us to put away enough savings to be able to retire in our forties. In fact, the about 80% of our savings occurred after these promotions.
On the other hand, the ultimate path I chose required more effort, more stress and more personal sacrifice than my first decade with company. I know there are some that would think retiring early would not be worth the "pain." For me, in hindsight, I have no regrets. Although it would have been reasonable to take the opposite path and never advanced further than one level, the trade off is that I would have had to work much longer before retiring, in my late fifties at the earliest.
Next segment: Lifestyle and Spending Choices
Here's the series:
- Our Childhood Preparation
- The Value Of Higher Education
- Making The Most Of My Job
- Lifestyle and Spending Choices
- Setting Goals, Developing Plans and Tracking Process
- Staying The Course
- How Luck Played A Role
- My Personal Finance Mind Tricks
- The Professionals We Used
- When Preparation Met Opportunity
For more on Reaping the Rewards , check back every Friday for a new segment.
Photo Credit: morgueFile.com, Iván Melenchón
This is not financial or career advice. Please consult a professional advisor.
Copyright © 2007 Achievement Catalyst, LLC
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3 comments:
great post. thanks for sharing.
Good post. Many of the other finacial blogs seem to focus on becoming an entrepreneur as if that's the only way to get ahead. However having grown up in a self-employed family, and having watched various people who "don't want to have someone tell them what to do" strike out in the world of finance, I've seen and experienced first hand how hard it is and the real work it takes to run a successful business. In my opinion, you can focus just as hard on a good career, and if you do well, you will reap as great or greater rewards. Finally, in my mind, it also doesn't much matter where the income comes from, it always, always comes down to what you do with the money once you have it in hand.
@ Peter,
Thanks for your comment. As I explore possible retirement employment options, I agree it is as hard or harder to be successful being self employed. Many support systems available to a corporate employee may have to be done or hired out by the self employed person.
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