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Big pay off for an awkward five minutes

Big pay off for an awkward five minutes

Women almost never negotiate salary or wages when it comes to job offers or increases, but current economic conditions make it an ideal time to begin doing that now.

New Zealand’s own bestselling financial authors in common sense finance and personal wealth, Martin Hawes and Joan Baker, told an Insurance and Lending Group Seminar on Wednesday (7 September 05) that a simple key to improving finances is to increase income.

“Get income up, but keep your spending where it is. The surplus will get you ahead with investments.

Baker said in her industry experience, women settle for too little on salaries or wages, and almost never negotiate, whereas men always do.

“It’s no accident men with similar experience and qualifications are earning 20 or 30 per cent more than women.”

Baker said that with job shortages in every field, now was a good time to ask for a pay rise.

“Getting an increase is a big pay off for an awkward five minutes. Salaries and wages almost always go up, not down, and the beauty of a pay rise is that you receive that increase every month forever.

“Employers expectations are that they will have to pay more to encourage people to shift jobs to their company. It’s not being greedy – but it is the easiest way to get back on track to accomplish your financial goals.”

Baker said she regularly received emails, particularly from women, to say they did what she suggested and ended up with a bonus or a pay rise.

“Part of asking for an increase is about valuing your time. Set yourself a goal for how much you will want to be worth an hour at the end of this year or 2006, 2007 or 2010.

“If you are being paid, for example $30 an hour, the next time you spend 30 dollars ask yourself if this thing is worth that hour you worked. Is it worth giving up an hour of your life energy for?”

Hawes and Baker told the seminar that some of the keys to financial independence include:

1. Dreaming – building castles in the air has lots to do with building wealth. Picture what your dream life would be like if money was no obstacle. Without the dreams, you won't find the energy.

2. Goals - goals are numeric, time bound, measurable and require you to sit down and write some numbers down. Goals should also be specific achievable, relevant and in writing.

3. Planning – planning requires knowing what you need and developing a series of actions that will help you bridge the gap between where you are, and where you want to be.

Both Hawes and Baker suggested some keys to wealth, which included:

1. Use your income to develop capital in property or shares.

2. Use other people’s money, but borrow only to buy shares and property investments, because they return rents and dividends.

3. Defer gratification. It’s about being in control of your behaviour to give up something today to get something better tomorrow. * Have a plan for spending, it’s called a budget; * Budget to live on less than your income; * Grow your income – ask for that raise. * Up-skill it’s never too late and the market will pay for those skills. * Pay yourself first – take your cut off the top first, and then pay the bills. A good way to do this is set up an automatic payment to your savings. * Use money to pay off your debt, and then build up a savings or investment. Work an hour a day for yourself.

4. Think of wealth creation as a business. The greater the effort the greater the progress, because you cannot sleep walk your way to wealth. * Open files, set aside some space, drawers, a filing cabinet; act like you have bought a business. * Invest in your professional advisers. If dealing with a professional is expensive, wait until you deal with an amateur.

5. Practise patience, persistence and perseverance are essential for achieving your goals.

Hawes said that the hardest action was to actually go away and do something about it. Insurance and Lending Group Director, Greg Frittelli, told the seminar that I&LG’s approach to building wealth was to use a pyramid model.

“When we think of the Egyptian Pyramids, we think stable, strong, dependable and longevity.

“At the bottom of your business, individual and family financial planning are the foundations –home, retirement planning, Wills, risk protection, a budget and an emergency fund.

“Once the basics are in place, we can get into the fun stuff - gearing, direct shares, property and managed funds.”


About Insurance and Lending Group

Insurance and Lending Group was established by one of AMP’s leading financial brokers, Greg Frittelli, in 2004 to provide a facility for all financial solutions under one roof – including business insurance, finance and risk management; fire and general insurance for families and businesses; and family risk, investment and lending.

Today Insurance and Lending Group is an independent brokerage with more than 200 insurance and lending products – including marine and the ‘hard to place’ areas such as woodworking and plastics risks.

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