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Jessica, The Financial Mechanic, shares how she created a ten-year path to financial independence through a career shift and salary negotiations.
- Jessica earned a degree in mechanical engineering but pivoted into the software engineering field. She says that it is possible for anyone with a willingness to learn to break into the software engineering field. In fact, many of her peers did not graduate from college with a software engineering degree.
- If you are interested in working in the software engineering field, Jessica recommends starting with a project. Try to build something that solves a problem you have. You can use this challenge to learn throughout the process. After giving it a try, you can take courses to build out your skillset. Attending a coding boot camp is one way to learn but you can also take other online courses to learn more.
- Negotiation is something that everyone should do. If possible, you should negotiate before you accept a job. It is much easier to negotiate during the hiring process than when you are an employee at the company. If you need to ask for a raise at your current company, then work with your boss to meet and exceed their expectations.
- When you are negotiating, let the company set the anchor point. Allow them to make the first offer to ensure that you aren’t undervaluing yourself. Remember, you are not the only one at the negotiation table.
- Before you start negotiations, do your research to understand your worth. You can find out more about your market value on sites like Glassdoor. Don’t forget to include other benefits in your negotiation like time off, commuting benefits, and sign-on bonuses.
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Table Of Contents
- The Financial Mechanic
- Choosing A Path
- Pivoting To Software Engineering
- How To Ask For A Raise
- Actionable Tips For Negotiation
- Saving For Financial Independence
- The Hot Seat
- How To Connect
The Financial Mechanic
Jonathan: All right everyone, very excited about today's episode. We are getting the opportunity to speak with The Financial Mechanic, and this is Jessica. She writes at financialmechanic.com.
And listen, here's what you need to hear today, and this is why this can be so valuable for your life. Jessica started on the path to Financial Independence about three years ago.
In the intervening three years, she has managed to double her salary, increasing it to over a six-figure salary with a plan to reach Financial Independence from inception to end within about a period of 10 years. We're not going to stop there. This episode, we're actually going to dive into the tactic she used to double her salary. How she successfully asked for a raise and how you can too.
And even more than that, the title of her blog, Financial Mechanic. She was a mechanical engineer. She pivoted to software engineer. And let me tell you, that's not the same degree. In fact, that's an entirely different skill set. It was self-taught. No one gave her permission. She learned this on her own, pivoted into entirely different industry and charted a brand new course for her life.
I'm very excited about this episode. And to help me with this, I have my co-host, Brad, here with me today. How are you doing, buddy?
Brad: Hey, Jonathan, I'm doing quite well. Yeah, I think that is a beautiful thing. You don't need to ask permission, right? You don't need permission from anybody. You don't need a fancy diploma. What you need are skills, and that is what is amazing about what Jessica has put together here with her story.
I think that is a beautiful thing. You don't need to ask permission, right? You don't need permission from anybody. You don't need a fancy diploma. What you need are skills, and that is what is amazing about what Jessica has put together here with her story. It's about skills. It's about asking for raises. How do you ask for a raise and negotiate your salary?
It's about skills. It's about asking for raises. How do you ask for a raise and negotiate your salary? She has done a miraculous job at the age of 26, Jonathan. That is what is so remarkable about this, and she's on a sub 10-year path to Financial Independence. So, with that, Jessica, welcome to Choose FI.
Jessica: Hey guys, I'm thrilled to be here.
Jonathan: So let's talk a little bit about this. Now, I said that your goal is to reach Financial Independence by the age of what? 32 or so? And what that looked like based on what I read on your blog is about a $1.2 million portfolio. That's the goal. That's the dollar amount at which you feel comfortable being able to fund your life for the rest of time.
Basically, this is not a mandate that you need to quit your job, but that work becomes entirely optional from that day forward. You have effectively reclaimed 30, 40, 50 years of your life to do with what you will and that's a privilege. But it's also replicable in that we can take a look at the steps you took and they're accessible for anyone that would choose to do that, right?
Jessica: Definitely. I think one thing when you look at my story is, at first glance, it might seem a little extreme. I'm earning a lot and I don't spend anything and there's a big gap there. But ultimately, I'm just a regular person and I did take these steps to earn that much and negotiating. And to spend less and cutting back in certain areas without necessarily decreasing my standard of living.
Brad: Yeah, I think that is such a critical statement in there, that so many people think, “Oh, I can't do this. This is for someone else. It's for someone special. Oh, she makes six figures. I'm going to write her off. She's fortunate.”
But you made your own luck, and I think that is a critical distinction here. There was no silver spoon here. You forged your own path, you earned these skills, and I just love that.
Jessica: Yeah, I definitely think there are parallel paths of privilege and of hard work. And there's no denying the fact that there is privilege in having a family that helped to raise me and get me into a good school and kept me on the right track in terms of my studies and to graduate and to have that support in my life.
And then there's also the parallel truth of hard work and putting in the work. And doing those steps to excel in your career, and that also takes hard work. So I think it's definitely both. I will say that sometimes it's harder for other people than maybe it was for me in certain areas, but definitely that ultimately, you have to put the work in.
Choosing A Path
Jonathan: Well, let's talk about putting the work in because if we're really to lean on kind of this track that you picked, the track that you picked was mechanical engineering. You are not a mechanical engineer. So let's talk about that.
Jessica: Sure. So, in school, I wanted to pick a degree… I was trying to choose what to do and it was really hard. My freshman year, I told my parents over the phone that I wanted to be a philosophy major and they had a fit. And then I looked into maybe writing. I really love to write and I wanted to be an English major, really bad.
So then I was telling all these people who were asking, “What are you majoring in?” And I would just change it every time just to kind of test the waters and see how it was because you don't have to declare your major until your second year. And ultimately, what I realized is that engineering would give me options, and that's the most important part.
And not even just options with engineering to being a writer compared to trying to be a writer and then become an engineer. But in the field of engineering, mechanical engineering was also the most broad. So, I decided ultimately to pick the degree that would give me the most options, and that has allowed me later in life to become a software engineer.
Jonathan: So basically, mechanical engineering is like a synonym for undecided.
Pivoting To Software Engineering
Jonathan: All right. So, you graduate college with this mechanical engineering degree, and talk us through what happens next. Do you attempt to get a job in that field, whatever it may be, and realize that you wanted to pivot? Talk us through those first couple years.
Here's the picture. I'm graduating with my degree in mechanical engineering. My boyfriend gets into medical school halfway across the country in Portland, Oregon. I grew up in Colorado. So, I'm applying for jobs in a different state halfway across the country, and I'm just out of school. And I searched in indeed.com engineering jobs, and it's really as simple as that.
And they were all software engineering jobs. And I would search and I couldn't really find anything in my field. And I turned to my friend one day when I was at a coffee shop looking for jobs, and I was like, “What if I just applied to this software engineering job?” And they said, “I don't think you can do that.”
And that kind of poked the rebel in me to be like, “Actually, I think I can do that.” And so I applied, and it was a bit of a process, and eventually, I got a junior engineering position.
Jonathan: Okay. Well, we got to parse this a little bit. Let's put ourselves in the shoes of the recruiter, or the employer in this case, and they're taking this applicant with this great degree in undecided/mechanical engineering and they're saying, “All right. List of requirements, you need to be able to write in this code, you need to be able to do this, you need to approve this body of work, and what have you done?”
And you say, “Well, I got this mechanical engineering degree.” “Oh, all right. Well, let's get started.” Connect the dots there. How were you able to convince them that although you did not possess a software engineering degree or a software engineering skillset at point zero, that you would be a great hire.
Jessica: That is very observant, and I think that's definitely something when I look back at the job posting and I read it, I'm surprised that I got the job. Because it talks about needing to know Java and C Plus and a bunch of other, just going down the list, things that I know that I didn't know at the time.
So, one thing was just having the gumption to apply even though I didn't match 100% of the requirements. And then from there, I picked up a project at work. So, I did start an internship as a mechanical engineer straight out of school, and it was mechanical engineering.
But I asked for a project that would take data from the database and make visual dashboards, which meant learning how to code. So, for a couple months, just for a summer internship right out of school, I picked up a project that was software engineering. And then also, I would do courses based off of the languages that were in the job posting.
So, I did a couple of Java basic intro. I wrote some tests because they said that they want to test-driven development for example. So, it was a bit of self-taught on the job that I was already in, and then also picking up skills based off of what I kept seeing in these different job postings.
Brad: Okay. That all makes sense.
But when you go to apply for this job, did you do anything to stand out? Why did they not just throw your resume out? I guess that's what I'm curious about. I know when we had Chris Hutchins on in Episode 121R, and we called it how to get any job. And he talked about ways to stand out, like ways people were to get in touch with or ways to show that you were interested in that particular company. What did you do to stand out? How did your resume not just get tossed in the trash?
Jessica: I think one thing to understand for the junior engineering roles is that a lot of companies understand that even CS majors just coming out of schools still don't know the practical information that they need to know on the job.
So, when they're looking for applicants, they're actually looking for somebody who wants to learn, who has that passion, who they can tell is really interested. And when they talk about things that they're working on, they're really excited about it, and I think I brought that to the interview.
And then something else that maybe helped me stand out was the fact that I was interviewed and then I actually got a flight for $35 all the way to Portland and said, “I'm going to be in town. Can we talk then? Can we do a follow-up interview or something?”
So I think potentially that was another thing where I made it happen and I flew halfway across the country to talk to this company and also to visit my boyfriend who was also in Portland, so that was convenient.
Jonathan: You know, we're going to move into salary negotiation in a second here. But we have a real opportunity to expend some time on this because many people, I didn't, a lot of people don't know what they want to do. Snd they just pick a degree based on basically throwing an idea out there and seeing what their friends and family think of it.
And if enough people say, “Oh, cool. Yeah, you should definitely do that. I hear it's a hot field.” Then they're like, “All right. Well, I guess I'll do that.” I mean, is it absurd? I don't know. It's probably not too far off for many people.
But what that might mean is that you realize that you made a bad choice. It doesn't match up with your interest, it doesn't match up with your talents, and now you're acquiring significant student loan debt.
So, you want to pivot, but you're like, well, I don't have permission. I don't want to start over. What I'm noticing is you didn't start over. You didn't have to go back to school.
In fact, and here's what I'm really getting out with this, you kind of piloted this process for yourself. You didn't know someone else that had done this. You just basically did it just to be a rebel. Like, well, you say I can't? Watch me. But now you have done it, and I bet you as you look back you can say, “Man, if I knew that this is what I wanted to do, I could have optimized it so much more.”
And I wonder if the software engineering degree would have been the path you chose or you would have said, “Wow, I could have just bypassed all of this, I could have gotten these skills, I could have presented this way.”
Now as someone that's on the other side that's kind of risen through the ranks and probably has hired individuals, what's your perspective on what you could have done better realizing that there's hundreds of thousands of individuals that are going to hear this and might be three or four years behind you?
Jessica: I think one thing that I've learned is that I might not have needed a CS degree. And a lot of people that I've worked with in the field haven't had a CS degree. In fact, my very first team, there was an art major, a history major, somebody who was self-taught and I think only made it… He graduated from high school, but I don't think he made it through college.
So, that was my very first team and all of them were successful engineers. And in the online world now, we have opportunities to teach ourselves through these courses online. There are even lists you can sign up that will send you a practice coding question every day. There are podcasts to listen to.
And if I had known that there were so many more resources for me, and I think I knew some and I did utilize them. But you don't even necessarily need a mechanical engineering degree to get started.
And I know that there are boot camps for people who are getting really serious about moving into software engineering. And that's one where we've been hiring, at our company, grads who maybe studied something like history and decided they wanted to do software engineering, went to a boot camp.
It can be expensive, but it's a lot less expensive than going back to school. And you learn the skills that it takes to get a job in software engineering. And I know I've worked with several people and hired people out of boot camps. So that's one way to do it as well.
Brad: So, is that like the optimal way for someone as you described it? Like, they're in a completely different field. They think, hey, this software engineering, this coding, it might be interesting for me. Would you start with a boot camp? Are there other online coding academies or like courses? If you're talking to me, I'm an accountant, now I'm a podcaster I suppose, how would I get into this field?
Jessica: First, I would say the most important thing is to start a project. So, just like other careers, you want a portfolio. And you can start coding, make an app, make a website, and then you have the code online that people can look at and see that you're coding every day. And you can say, “here, look at my GitHub account.” And employers do look at that. And so, that's applied practice.
First, I would say the most important thing is to start a project. So, just like other careers, you want a portfolio. And you can start coding, make an app, make a website, and then you have the code online that people can look at and see that you're coding every day. And you can say, “here, look at my GitHub account.” And employers do look at that. And so, that's applied practice.
And then by doing that, you would learn, actually, I like accounting better than software engineering. Maybe I shouldn't quit my job and pay thousands of dollars for a boot camp. So, I would start with a project, a real live app, maybe pairing with a friend and a passion project, and then from there decide.
And then if that's something you really want to do, there are different avenues. You can look at boot camps. I personally haven't gone through one. But I have hired through them, so I know that that is a completely viable way to break into the field if you aren't sure if self-teaching is really going to be as productive.
So, I really think it takes a look at, what kind of coursework are you good at? Are you self motivated? Because a lot of times you start trying to teach yourself and it can be really hard to pull yourself out of complex issues and get kind of dragged into the software and bugs. And if you're at a boot camp or something, you have resources to help you pull out of that versus a singular project. So, it really depends on your learning style.
Jonathan: Let me take kind of your answer there and just and see if Brad just said this out loud and he's collecting advice. He's thinking about changing industries and we're just masterminding about this and thinking about it creatively. And so, let me just see how this type of advice might land and get your insight on what else he could do.
So, we talked about boot camps. But before that even, someone's like, “I want to see if I could learn how to code.” So would an appropriate way just be literally to hop on to something like a Skillshare, YouTube, just at the highest level, just see what's involved with the basics of some element of coding, and then see if you could apply that to an interest-led project, a problem that you want to solve, an app that you want to create, anything like that.
If you want to go a little bit farther, take a focused class that would build in the skill set at the front end that might build a flush that out and just go that far. And then move all of that to GitHub so you could then demo what you have actually done.
And then at that point, if you've actually invested the amount of time in the same way that you would stick with learning piano or learning how to do some hobby. If you can stick with it for that period of time, now you justified yourself that maybe you should look into a boot camp.
And if you've done all of that, there's now a body of evidence to support the fact that you're motivated by interest-led learning, and not only do you believe that you can learn anything, but you can show to a potential employer, “Hey, the people with the degrees, they have to all be taught what you need them to do anyways. I'm doing this on my own outside of a degree and its interest-led. Let my interest be your interest. Let's do this together.”
Jessica: 100%. I think that lands perfectly. That sums up everything. I think one thing I might add is that you can start picking up maybe projects on the job. If you work with Excel, there's a language behind Excel called VBA, and you can start writing your own scripts to maybe make your Excel documents work better. So, if you're an accountant and you're interested, you can go and try to optimize your work as it is and in that start learning to code.
Jonathan: Brad's Excel sheets are already perfect. There's no room for improvement.
Brad: Jonathan can't figure them out if his life depended on it.
Jonathan: What is this? What is going on?
Okay. This has been great. This episode that we're doing with you, I knew it has two very discrete parts to it.
One, the power of the pivot and the fact that it's possible. It's not predicated on the choice you made when you were 17 and the amount of student loan debt that you have. You can move in and out of any industry and it's based on what can you do, not what is your degree?
But the second half of this is the fact that you doubled your salary over the past three years, and that was not by accident.
How To Ask For A Raise
Jonathan: So, let's talk about it, how to ask for a raise. What did that mean to you? Tell us where you started and what you did.
Jessica: So, my very first offer that I got out of school, they said, “There isn't any room for negotiation. It's a summer internship, and this is what you're going to make.” And I said, “Okay, cool.” And I took it.
And then after that, I started to learn that you really should negotiate, even if they tell you that they absolutely cannot negotiate.
And so for my next job, they asked me what I wanted. I said, “Can I think about it?” And then I hung up and talked to my peers, and actually my boss as well. They knew I was leaving, and so they were willing to help me out with negotiation. So I asked and they were like, “Well, why don't you Google it,” which is also always the best answer.
So I looked at different salaries, the average salary for entry-level software engineers, I added a little bit extra and I told them I wanted $70,000, which now looking back is a little bit low, even for entry-level software engineers. And he said, “How about $60,000?” And I countered with $65,000, so that was my very first negotiation.
We ended on $65,000 and I started with that. And then throughout my career, I pushed for raises at that company and slowly built up how much money I was making.
And then I started looking at the industry and I realized I was making almost half, if not less than half, of what other people with my skill set were making, which is a huge red flag in terms of I want to be making the money with the skills that I have. And even if there's impostor syndrome of not having the right degree, I should be making about the same as the industry standard.
So, I started looking for other jobs. I started applying. I applied to several different places just to get the practice of negotiation. That meant a lot of screen calls where the recruiter asked you how much you want.
So, I started having that conversation over and over again and learning the different skills that you need to be able to go into those negotiations.
Brad: So quick question, you said that you were pushing for raises at your company, which is great, obviously. But then you subsequently learned that you were making half of what other people with the same skill set were making. When you were pushing for those raises, was it just a percentage? Was it based on anything? Like, did you look up salaries? I'm trying to square those two things. I'd love to just hear a little more flavor on that.
Jessica: Early in my career, it was more based on what I was making, which is called anchoring. So, in psychology and in behavioral economics, there's something called anchoring. For a negotiation, that's when you only have one data point and your first data point is something that you keep coming back to. And so I was thinking about my salary in terms of that $65,000.
So, when I made my next raise to $70,000, I was thrilled because that's $5,000. That's great. And then from there, I went to $77,000, which is also great. But then when I looked around and other developers were making more than $100,000.
In fact, entry-level developers, I'm learning some of my friends are making $90,000 right out of school, then that's a red flag that I've been anchoring myself to this previous salary and I need to really shake that off.
And ultimately, at my first company, there's no way I was going to go from $70,000 to $100,000. I had that conversation with my boss and it just is impossible. So, at that point, it's time to move on and to go to a different company and learn different things with a new company.
Jonathan: All right. So, I really want to slow down each piece of this. And while we'll bring in what raise you were able to negotiate, I want to talk about the mental construct that you were able to build along the way to support this because I think that's going to bring the most value.
So, let's talk about why negotiating is not negotiable. Why everyone needs to be negotiating and how that's going to set you up. So basically, just convince our audience that you need to negotiate.
Jessica: If you don't negotiate your raises every year, it might be 2% to 3% per year to keep up with the cost of living. If you negotiate, you potentially can be making leaps and bounds by 10% to 15%, or in my case, doubling your salary. So it's not negotiable.
Also, it's expected. A lot of people don't want to negotiate because they're scared that they'll lose the opportunity, that they'll seem too pushy. But ultimately, and I've talked to several managers that actually say that they respect people more when they know they're worth. And so that's another thing where it's just not negotiable.
And it's completely expected for you to say, “Is there any wiggle room in this salary?” Or to have that conversation. So, by not negotiating, you're costing yourself… They looked at the numbers, I think it's if you negotiate $5,000 more than your peer and you guys are going along the same path, over the period of their entire career, they will have made $1 million more than you over that $5,000. So, it's 100% worth asking for.
Jonathan: Because every raise is then based on what that first raise. So if you get that first extra $5,000 out the gate, then even if you never negotiate again, every 2% or 3% raise is then predicated on that first one.
Brad: I think they call that compounding, Jonathan.
Jonathan: Is that total return? I don't know. All right.
I think as we really get into this, one thing I want to talk about is some hard truths that people may not consider. And I'd love your perspective on this, and you can confirm whether this is true, but you can have the same job as your coworker and you can have completely different salaries.
Here's another hard one. People who get hired after you might make more money than you.
And then the third one, if you don't say anything, your company probably isn't going to look out for you. Is that wrong? Do you want to dispel that myth or truth?
Jessica: That's right. You got it.
Jonathan: Ouch. All right. Well, if that's true then, I feel like there are different personalities out there. Some people are more likely to ask for raises and some people will just quietly sit back. And if you are a personality type that's not super aggressive with these types of things and is willing to be a little bit quieter, how do you work around that?
Jessica: One thing is practice. So, applying to all those different jobs, having those screen call conversations. I learned that in that first call where the recruiter asks you, what do you want to make? You can say, “Actually, what does this role offer?” And I've never had anybody not tell me. And usually, their range that they're talking about is already way above what I would have said if I had just showed my hand way too early.
So practice is one. Because for people who are maybe a little shy, it can feel like a conflict. But really, they want you to be happy, you want to be happy and well paid. And so it's a conversation around, what are these skills worth? Don't just tell me what I'm worth. I want to investigate and find out for myself so you can look on Glassdoor or PayScale and find out.
And that way, it's a conversation. It's not you demanding certain salary. It's that I know what these skills are worth in the market. And to recognize that that time and effort that you've put in learning is part of that skill set. If they try to hire somebody else, they don't get the same experience level as you. And so they want you and that's the time to negotiate early on. And if you don't, it gets really hard once you're in the company. It's possible, but it's a lot harder to ask for a raise than to negotiate upfront.
Brad: All right. So, that is a huge takeaway, is that this is pretty much happening when you're starting a new job. That is a major, major aspect of this. And I love what you said, just ask that simple question, what does this role offer? You talked before about psychological anchoring?
If you started and said, “Okay, I expect to make $50,000,” When they were going to say $100,000, you're negotiating against yourself in essence, right?
If you started and said, “Okay, I expect to make $50,000,” When they were going to say $100,000, you're negotiating against yourself in essence, right? So let them set the anchor point and you work from there and there might still be wiggle room. Even if you were anticipating it being $70,000 and they say $100,000, while you're doing backflips and cartwheels in your head, there's still some wiggle room, I imagine, right? Because you know they're not leading with their best offer.
So let them set the anchor point and you work from there and there might still be wiggle room. Even if you were anticipating it being $70,000 and they say $100,000, while you're doing backflips and cartwheels in your head, there's still some wiggle room, I imagine, right? Because you know they're not leading with their best offer.
Jessica: Exactly. It gives you way more information and typically the company, like Jonathan was saying, the company is the one with most of the information. They know the rest of the industry. Hopefully, they've done their research and they know what other people are paying.
And so they're a lot of times banking on you not really having that plethora of information and then just blurting out the first number that you can think of based off of maybe your past salary, which now many states won't let you ask about your past salary, but they're still asking, what do you expect to make? And if you're anchoring on your past salary, that will really hold you back.
Jonathan: Can I pause you on that because I'm kind of out of the game a little bit here. So I'm trying to make sure I understood you correctly. A prospective employer in many states is not allowed to ask you what you made in your past role.
Jonathan: That's correct. So the verbiage that's been carefully crafted is to get you to volunteer that information by you saying first, what are you expecting to make knowing that you're going to rely on anchoring, right? You're going to say, well, I was making $55,000 over here, so it'd be really nice if I could make $60,000. I was hoping to make $60,000, something along those lines. That's interesting.
All right. So, before we dive into the tactics that you actually used, just give our audience a sense, I mean, raises, sometimes they do come because your company does a review and then they voluntarily will increase your pay. But sometimes you can force this outcome by suggesting or encouraging a salary negotiation.
Tell us how salary negotiation the role it's had in your actual salary from entry-level to I guess where you are now.
Jessica: To start, I started my job, like I mentioned, at $65,000. And then in the first six months, I got promoted to software engineer two. It goes two, three, four, five, six. So we're really boring. And from that, I didn't have to ask, which is sometimes a downfall because I didn't get to practice.
But what I started doing after that was starting a conversation with my manager six months before I wanted my next raise. And we went over a rubric that the company had and started checking off and making goals to make sure that when I came around, we had documentation. Because ultimately, I'm working with my boss. She or he wants to help me get promoted. And so, if I can help them have that documentation, then it helps both of us.
So, that was huge for my second raise from $68,000 to $71,000. And that was huge for my third raise, which was when we had that conversation, we talked about what goals I needed to hit, I went from $71,000 to $77,000.
And then a year from there, I was negotiating and that actually was I had a different offer. I wanted to stay at my company because I really loved the work that I was doing. And so I just let them know, hey, this is the offer that I have outside and they matched it to go to $83,000. And that was before I switched companies.
And in that, it was really that collaboration and those goals and making sure your manager isn't surprised at review time. Because if you show up and you're like, “All right, how did I do? Okay. Also, I want to raise.” They're not going to be very happy about that.
But if you've been talking about it, and then you show up and you're like, “Okay. So, how are we doing?” And you've had those weekly or bi-weekly check-ins with your boss, they're not surprised that you're looking for a raise.
Brad: So, when you have these bi-weekly check-ins or whatnot, and this is a six-month process you're talking about in essence of documenting this. Are you setting goals at the outset of that and saying I'm going to do X, Y, and Z in the next six months? Or here's what I've already done? Talk us through the actual language you use in those meetings from the outset forward.
Jessica: A lot of people when they get to the review cycle will have a list of paper and say, “This is what I have done. This is why I deserve a raise.” But that's a mistake. You should have that piece of paper with your boss six months at least before you're asking for a raise.
A lot of people when they get to the review cycle will have a list of paper and say, “This is what I have done. This is why I deserve a raise.” But that's a mistake. You should have that piece of paper with your boss six months at least before you're asking for a raise. And that's where you're identifying the areas that they want you to improve. You have an action plan.
And that's where you're identifying the areas that they want you to improve. You have an action plan. Sometimes there are roles or skills that you need that your manager actually needs to help you if you're… For example, if the next level you have to lead team meetings and currently there's a team lead, then how can you work with your boss in order to start leading some meetings if that's something that will get you to the next level?
Then three months out, you check and you say, “Am I on track? What do I need to do? How are we looking?” And you prepare then with your numbers that you're thinking, which are your wish, your want, and your walk numbers.. Which is what you're looking for, what you dream about, and then what you would walk away if they didn't offer you any raise.
And then ultimately, by the time you get to that final stage where you're talking to your boss, you're focusing on that value that you've already brought, you've already discussed with him or her. And then you make your case for the raise and hopefully you've already made it with all of those things that you've been doing and checking in.
Jonathan: Yeah. So you're using a term in there that I've heard before when we talk with Tori Dunlap, and that was that it's a collaborative process. I think what we said earlier is you say your company, you will not voluntarily… They're not going to always be looking to get you at the higher end of that pay scale.
But your employer, the person you're working with, the person that you're developing this working relationship with, if you can kind of move to almost this mentor or mentee status, they are trying to develop their employees.
And it sounds to me like what you're saying is, if you know you have a review coming up six months from now, you're not waiting till that review day to say, “Hey, look at everything I did.”
But six months ahead of time, you're saying, “Hey, let's start a conversation. I want to make sure that I'm really providing this company what they need and that I'm performing at the highest level here. Let me show you a list of what I've done, now what else I could do.” And that's the type of collaborative dialogue that you're having that allows you to then on that review day really go in and ask for this raise. This fair and commensurate raise.
Jessica: The important thing is that neither of you are surprised by this, or by the result. So, if you're going in and you're fully expecting a raise and you don't get it, then you know maybe if you've done all of these steps, that it might be time to move on. Because you've done all the work and you've had those conversations and it's not coming to fruition and it might be time to look elsewhere.
And also, your manager should not be surprised that you want that raise and that you're expecting it and that you've put in all this work. And so ultimately, yeah, it's a collaboration and getting those conversations going.
Brad: So obviously, everyone in the audience is not going to follow your exact path, but we're teaching skills here, right?
And one of the tactics that I'm curious about that you mentioned very, very much in passing was I think at that last raise right, the $77,000 to $83,000, where you said you had another offer. And I'm curious how that worked.
Was this you had a sense you were underpaid? Were you tired of your company? Because you have this offer in hand, right? So this is not like an empty thread or empty rhetoric, right? I mean, you had interviewed for another job and gotten an offer. Was that part of the strategy? Like, what were you hoping for as a resolution? Talk us through how that worked.
Jessica: This is definitely a strategy and one to potentially be careful with because it can backfire. But if you want to stay where you are but you're just not having that growth and you're seeing growth outside in the industry and you can get other offers, then you can bring that back to your company and say, “I have this offer.”
And there are a couple things is that obviously you don't want to be bluffing because they might call you on your bluff and then you don't have a job. Or they might not offer as much as you would really think. So then you have to decide, do I want to take this offer or do I want stay? But they already kind of know that I have one foot out the door.
So it can be a little risky if you want to stay. But ultimately, it really helps you get that practice that you need negotiating, finding out what you're worth in the market, and then applying it to your current job or realizing that maybe there are other things out there and you should be moving on.
Jonathan: It's interesting you talked about the pitfalls of competing offers, and it's a powerful play. But it is a power play, right? It's one that you get away with once, but you can't keep going to that well over and over again. But it can be useful and necessary sometimes.
So not being afraid to get a convenient offer, but knowing how to use it. I think the point here is to kind of show some emotional intelligence with how you go about asking for these raises.
And if you're going to add to that, I'm curious, in the context of emotional intelligence, one, let's say you're at work and you just happen to see your co-workers paycheck, pay stub. It happens. Many of us have experienced this and you just notice they're making $5,000 a year more than you are.
And you're like, “All right. I'm going to have this conversation right now. I'm not leaving $5,000 on the table. That's crazy. And I'm way better than they are. And I've been here longer. We're going to get this fixed.” One, how do you talk to that person down and give them a strategy that will be more likely to lead to success?
Jessica: This has happened so many times where somebody leaves their paycheck on the copier or tongues are wagging after work happy hour and you find out that you're not making as much as somebody. A
nd ultimately, the thing is when you bring it to your boss that you want to raise, or you can use it as motivation because now you have a little more information about what they're willing to pay for the job that you're doing.
But you should never make it about Bob is making $5,000 more than me. I should be making $5,000 more. It should be, this is the value that I'm bringing to the company. Don't bring up Bob's name at all if you can… Just don't. Just talk about you, the skills that you bring. And it's about whether or not they value you, not how much they value Bob, so that is definitely a potential pitfall in negotiating.
And I would add, also in negotiating, another pitfall is that potentially, some people don't have the introspection or the emotional intelligence, as you mentioned, to realize that sometimes you might not be at that level for a raise.
And that's part of having that conversation with your boss early because you might find out actually you're far away from qualifying for a raise and simply doing the job that you're already doing isn't enough. You need to go above and beyond and be working at that level that you're trying to go to. So, if I was going from software two to a three, I should be doing all the things that a software three is doing for a long time before I fill into that role.
Actionable Tips For Negotiation
Jonathan: What if you ask for a raise and it's the worst thing that ever happened to your life? That raise was not worth it. All this extra work that you're asking me to do, not worth it.
Brad: I mean, ultimately, you're saying here you need to have some level of intellectual honesty, right? Like if you're a B minus, a C plus performer and you go in and ask for a raise. Even if you follow all these negotiating tactics that you're laying out, they're probably not going to shower you with cash if they're just looking for a reason, in essence, to get rid of you.
I mean, that might be a little harsh, but what you're saying is start the ball rolling with your immediate superior and be honest. Try to get a sense of where you are and maybe be open. I mean, I say that kind of jokingly. Of course be open to some constructive criticism, right?
Like, this is where I'd like to see my career go at this company. How do we work together to get there? What do I have to do? What skills do I have to learn? What do I need to do better? I think that's a really valuable skill set. And like you're talking about throughout this entire episode, it's practice, right?
You're inoculating yourself, in essence, against these scary situations. That's why those calls with the recruiters, that made your life better, even if you didn't ever get any of those jobs, or didn't want to pursue them. You inoculated yourself against a situation that I know personally I would be scared of. Right now I can say 100% honestly, asking for a raise is outside of my comfort zone. But when you do it 5, 10, 20 times, it gets easier, right?
Jessica: Yeah. I remember the very first couple of conversations that I had, and I just remember trying to follow scripts from online or stuff that I had heard and just falling over myself and wanting to fill the silences. And so in that way, I wasn't really saying what I wanted to say.
And it took multiple times to be able to say what I wanted to say in a way that felt natural and felt like we're having a conversation about salary and it's not very uncomfortable because I know what I'm trying to get across and what they want ultimately as well.
Jonathan: So, you're 26 years old, and you negotiated your last pay bump. I think when we were kind of walking through how you've negotiated a raise, we kind of left at $83,000 was the last one you negotiated. But now, you have had one more salary negotiation that has occurred. Walk us through what you were able to negotiate and the context for that.
Jessica: When I was looking for my next job, it was really eye opening the amount more I could be making in the market, and it happened slowly. Because of that practice that we were just talking about, I first got an offer for $90,000. And then the next offer was $100,000. And then the next offer after that was $120,000. And this was happening sequentially. And just by tens of thousands of dollars, a massive shift in what I could be making.
And even that $120,000, I turned down because it wasn't quite the right fit. But now I know that that's the level I should be shooting for.
And something to remember is putting off talking about salary in the early stages. So making sure that they want you, that you've been through the process. They're going to try to get your number early on, but the longer you wait, the more time they've invested in you, and so you want to wait. So that's number one for negotiating your salary.
Number two, do your research to know your worth. We've talked about this already. But this is huge in the market, in Glassdoor finding out different levels and the skills that you have and similar positions. In fact, I had one manager send me screenshots of Glassdoor of what he thought I should be making and it was helpful in some ways, but I could send him back screenshots of companies that were his size and what other people were making, which was $20,000 more than what he was trying to sell me on. So having that, I don't want to say ammunition, because again, it's a collaboration, but the proof.
Third, remember you're not the only one negotiating. And that comes back to they're putting their time and energy in interviewing you. They are using up time to find out if you're the right candidate and to send you projects and to review them afterwards.
Remember you're not the only one negotiating. And that comes back to they're putting their time and energy in interviewing you. They are using up time to find out if you're the right candidate and to send you projects and to review them afterwards. And so it's not just you that wants to get the job. They also hopefully want you to also get the job.
And so it's not just you that wants to get the job. They also hopefully want you to also get the job. And that can help you a little bit with those nerves, that also they want this to turn out well for them as well.
Fourth, ask for their number before revealing yours. We talked about that. But it's huge if you can just ask what they're willing to pay, even if it's just a range for this position. What's generally budgeted? And if you want to push off the conversation, you can say, “I want to learn more about the role. But based on your experience of this role, what range will you pay.”
Then, if we go to five, negotiating is more than just talking about salary. You are talking about time off, you're talking about benefits, you're talking about potentially commuting benefits, taking the bus or even sign-on bonuses, and that one is huge. I learned in tech that you can just ask for a sign on bonus and they'll give you $10,000 to $20,000 extra dollars just for asking for a sign on bonus, so that's huge.
Negotiating is more than just talking about salary. You are talking about time off, you're talking about benefits, you're talking about potentially commuting benefits, taking the bus or even sign-on bonuses, and that one is huge. I learned in tech that you can just ask for a sign on bonus and they'll give you $10,000 to $20,000 extra dollars just for asking for a sign on bonus, so that's huge. Just remember, negotiation is more than just salary.
Just remember, negotiation is more than just salary. There's also their stock, so that's something else to think about.
Six. We talked about six, practice.
And seven, at the end, when you're wrapping up, always reject or accept the offer with grace. And that is a huge part of the communication and they'll probably want to know why you're either rejecting the offer. Or if you're accepting, you want to be gracious that you're so excited to work with them.
And if you're rejecting, you can let them know what about the offer was not quite up to par for you. And actually, I've had a company come back and say, “We'll pay you $40,000 more.” And I was like, “Why didn't you say that originally.” But by telling them that honestly, the salary just isn't up to my expectations, then they know for later. And by being graceful, they might still want to have you on.
Jonathan: All right. So I think what we've done here is we've walked through tips for these types of negotiations. What I think is actually interesting, you talked about a script, right? And that's kind of where it starts for most of us. We don't have these words, but at some point, we understand the power of the words we use when we're having these conversations as a place to start.
Until you can develop your own level of confidence, you can fake it by being very confident on the words that you have memorized. And I'm curious, give us an example of what the script actually looks like and what are the elements that make up the script.
Jessica: This is one of my favorite pieces because once I learned about a script and I had written down these elements to hit, it really helped with that falling over my words stuff I was dealing with in the beginning.
So ultimately, this is my script. You start with saying that you're excited about the opportunity. You can talk about maybe something that you've mentioned in the interview or you've seen about the company online that you're really excited about. And that sets the groundwork for you to say something positive and feel good about going into this negotiation. So, something like, “I'm excited about there's opportunity, and I know we can come to agreement about the salary.”
And then you go into the reasons. So, you've done your research and you would say, “Based on the market, what I've been earning, standard of living, other opportunities that I've been looking at, goals I've set for myself.” Essentially, anything that you've been researching and finding out about this role, that's where you put in, “Based on my research,” This is the third piece, “I would expect to be at the blank to blank range.”
So that's where you're putting in the numbers and you would normally want your low range to really be at your high range, if that makes sense. So, if you're shooting for $70,000, you would say, “Based on the market and what I've seen at other companies your size, I would expect to be at the $70,000 to $80,000 range within the 12 months.”
Jonathan: All right. That's interesting. So, let's dial in on that because you just finished that sentence, “Within the next 12 months, like this is what I want my salary to be.” Why would we talk about, at some point, it would become this? What's the purpose of planting that seed the way it is there?
Jessica: Good catch. And I think this is an optional part of this step. But this is allowing you to even add in more buffer.
So, if you say within the next 12 months, maybe you would even add $20,000, $30,000, $40,000 on top of it and say, “Actually, I'm looking to grow in this role. This is what I'm hoping to start at, and I would be hoping to eventually grow into a blank role and be making this in 12 months.”
And see what they say. Is there room for growth? You can have that conversation. Maybe it's a little early, so you can feel that out and maybe decide whether or not to add in the 12 months because definitely having that range is good.
Jonathan: I think I get it. So, what you're basically saying is you're giving yourself away to follow up. Like, let's say you really want $70,000 and you say, “Based on all the evidence that you've just provided, the body of research that I've done, I would expect to be making somewhere between $90,000 to $110,000 within the next 12 months.”
And which point they were to come back with, “Oh, okay. Well, unfortunately, this position will probably only pay around $85,000.” And you're like, “Oh, okay.” It's like actually giving you a fair response. You're like, “Oh, because of the other opportunities, I could see that being okay as well, but you're not all in on this number now, right?
Brad: And I mean, you're also interviewing your prospective employer, in essence, right? You're feeling them out. If they balk and they say, in essence, there's no upward mobility. I mean, there might be an employer who says, “No, this is the job. This is what we need you for.” You're learning information, right?
What you've been talking about this entire episode is gathering information, whether it's on salary, or about the company, or whatever it may be. I love that. Just get the information just by using a certain phrase, in the next 12 months, in the next two years, who knows? Whatever it may be. I think that's brilliant. I really do.
Jessica: You really do learn a lot from their very first reaction. They might say something like, “Oh, yeah, no problem. That's easy.” And you're like, uh-oh, you might have undersold yourself a little bit, but you have that information now.
And that's one thing that goes back to, if you can wait. Or some people ask me, is it possible if they say, “Oh, okay. Fine.” Can you go back and try to actually say, “Oh, actually, I'd really like more,” Because you can tell that they just accepted it without any qualms. It's harder to do that and it depends where you are in the process. But it is important to remember that step about you can negotiate other things other than starting salary.
So, if you set your starting salary kind of low, you might want to push harder for stock units if they were kind of too accepting. And then they might say, “That's more than what we budgeted for. I don't know. We'll see what we can do.” That's more about what you want to hear because you're still negotiating.
You'll find out they'll they might counter and you have the opportunity to counter maybe one more time and that's more what you want to hear. And then if they say, “That's more than what we were planning on paying,” That's fine too.
You just want to find out if they do have a number. And be sure to follow up on that and say, “Okay, what range were you thinking?” And that is totally fine, even if your ranges are completely off. It's really important information for you either moving forward, or to know what the reasons are for paying that certain amount. If you've done your research, there really shouldn't be a humongous gap there.
Jonathan: I think as I kind of think about what we've just discussed, and also your own story and what you experienced, I think that both a yes or a no to that request for a salary negotiation gives us additional options. It's not the end of the road.
In fact, some of your biggest raises came when you moved from a current job to a new job, right?
And I think you had commented how it's easier to negotiate when you have the skillset and you're on the outside looking in than when you're already in the trenches. And that's probably a predictable pattern other people will experience. But just kind of having this framework for working through it.
But this was your experience. I mean, to set the frame for our audience, you talked at the beginning about this parallel path between privilege and hard work, doing the hard work. And then these raises that you got did not happen by accident.
You moved out of a field. You didn't have a degree as a software engineer. You had this undecided mechanical engineer degree. And then you pivoted over, you built the skill set, you got an employer to give you a chance based on you could do the work or you could learn the work.
And then you negotiated your salary and changed employers sporadically over the last three or four years bringing you to the point now where you are on this path to FI within the next what? Six years? Something like that.
Saving For Financial Independence
Jessica: Yeah, I'm shooting for FI by the age of 32 with $1.2 million. And as a 26-year-old, I've saved $380,000, which sounds insane to say because a lot of that growth has happened very recently because of pushing for that high salary. And also, I spend less than 20,000 a year so I'm banking about $100,000 year because I'm making a little over $100,000 now.
Brad: That is smart.
Jonathan: So how do you pair that the 20… I guess that means you don't really have any fun. No, no.
Tell us a little bit more about what your lifestyle could afford with a budget of less than $20,000 a year. I know that you have a partner and that's just your finances. But give us a sense for how you're able to explore the parameters and replace maybe expense with creativity.
Jessica: What is really fun is that I found out about Financial Independence really early. I was 23. I was just starting in my work life. I had just started the beginnings of lifestyle inflation. So, I had just bought a 2009 Mazda Miata, which is a red coupe convertible and I was so happy with it. And I think two weeks later, I found Mr. Money Mustache online.
And I just facepalmed myself after binge reading this blog. And I started realizing that there were lots of ways that we almost increased our lifestyle inflation looking at fancier apartments, buying that second car. That ultimately we weren't getting joy out of it. And in fact, we hadn't made that step yet.
So, that was really, really fortunate in finding out about this so young because we didn't have to start getting rid of stuff or changing our lifestyle in a humongous way, and what we already had was enough for us.
So, that was really, really fortunate in finding out about this so young because we didn't have to start getting rid of stuff or changing our lifestyle in a humongous way, and what we already had was enough for us.
We had one car that could get us anywhere we wanted. I bought a bike so that I could start biking to work and we started cooking from home.
And I was bringing in my lunches because I used to… In Portland, lunches are maybe $10 to $15 eating out because I'm downtown in Portland, Oregon, the food capital of the country, I'll just say it. It's amazing food. But $15 a day, over time, we know with compound interest that's hundreds of thousands down the line. And so I'm starting to make my own food.
We downsized our apartment. We realized that we don't need the second room. And when we ended up moving across the country, we were looking for smaller spaces because we realized the space that makes us happy. And if we get more space, then we have to fill it with more junk that we don't need and we're eventually going to have to get rid of anyway and we're moving a lot, so we'd have to get rid of it anyway.
So, to your question, we have an amazing, fulfilling life on a lot less, and part of the secret was finding it early and not letting lifestyle inflation take hold and really digging into what do we value? And what are we going to continue to spend money on that really enhances our life?
Brad: I absolutely love that. What enhances our life. That's brilliant. And just the final word kind of on this move and your latest salary negotiation. It sounds like your salary went up dramatically.
Did your expenses actually go down? Because you left Portland, which is a pretty high-cost living area. I think if I'm right, you went to a lower cost of living area, right?
Jessica: Yeah. So last year, I spent $20,000 and I cataloged every single expense on my blog, so you can check that out. Then this year when I did the calculation.
Now, I don't budget ahead of time. So, when I sat down, I had no idea how much I had spent that year. I just knew that I was being economical as much as I could, but we don't have a firm budgetary process.
So, at the end of the year, I looked at what I spent, and it was $15,000. And honestly, I can't really believe it until I'm going through each expense. But a huge part of that was that we moved from Portland, Oregon, where my rent was $930 a month to upstate New York where my rent is $500 a month, and that's a huge difference that really helped me bring down that $5,000 difference of spending.
And so, yes, my spending has gone down, although I will say that we are moving to California in June and I expect that our housing will go back up. So it's very variable. I think it's important to remember that we can save now while it's all going well and we can spend less so that later when we have higher expenses in Santa Barbara, California, that we have the freedom to be able to make those different choices and spend a little more.
Jonathan: Do you feel like or do you worry that you have put your life on hold for Financial Independence by having your costs that $20,000 a year.
Jessica: In fact, I feel the opposite. I think dependence is easy, but independence is essential. If I had stayed at my job and wanted to work until regular retirement age, that would be dependence on that job and that would give me a lot less freedom.
And now realizing that I can buy back so much of my life and do things that I want to do beyond just mechanical engineering or software engineering. I mentioned earlier that the degrees I wanted to pursue originally looked like philosophy and writing. And while it's great to make a high salary for now in order to get me to FI, there are so many more paths to explore and I don't feel like I'm putting my life on hold. Basically, because I found it so early, I'm living the same life that I would want to live and I'm preparing myself for future changes.
So, a lot of people might look at me and say, “You're 26, what do you know? So many things can change. You can have a health issue, maybe you want kids or you're going to get married.”And to that, I say, “Yes, all of those things could happen, and that's why I'm really satisfied that I'm saving now when I can and when I'm young, and when I don't need as much stuff.”
Jonathan: All right. So, I use this example. I've used it multiple times over the course of the show. If the audience has been with us, they've heard me drop it, but I just want to point out the similarities to your story. I had a bachelor's degree, four years in school for a bachelor's degree, four years in school for pharmacy school.
And basically, Brad and I cringe every single time I say this term, but I had $160,000 in student loan debt, and I'm getting back to a net worth of zero. I'm getting back to broke. I'm getting back to the point that I was in my early teens, I'm getting back there in my late 20s now. All right? 28, 29, 30 years old, I'm finally getting back to a net worth of zero.
This is the lost decade, and many people that are pursuing the advanced graduate degrees for various reasons because they think the degree is what's going to fix it will find themselves in a similar situation. You got to pay that student loan debt back.
In your case, have a net worth of $300,000, in my mind, a very replicable career path and you have it by 26 years old. Like, I'm still in pharmacy school.
Jonathan: You say you're putting your life on hold, I'm living in a room with three other dudes. We're all sharing this common house together at the age of 27, 28, and I'm still taking out student loan debt.
If you never saved another dollar again, you worked paycheck to paycheck from the age of 26 to 50, you're going to have a net worth that's going to look a lot like $2 million.
I mean, I have to go run a calculation to prove that out and be sure, but just making an average market returns with $300,000 from 26 to the age of 50, that's basically $2 million. I mean, you just get options. And so I don't think you really are putting your life on hold either.
I think you basically are taking the time that everybody else is taking in the ‘easy path' to just take out student loans, get the degree at any cost, and then we have to fix that. You just kind of flipped that script on its head and I think you're a perfect case study of what can happen when you can replace dependency with the pursuit of Financial Independence. Thank you for sharing your story with us.
Jessica: Jonathan, it's so funny you mentioned that because there's also the parallel in my life where my partner is a doctor and he's in residency right now to become a doctor. And so he's putting in that time and effort early on in order to do something that he loves, which is a completely viable path.
But as somebody who's pursuing FIRE with this passion, it's fun to have somebody who loves what they do and with this audacious goal to become a doctor. And he is essentially going to be a fully fledged doctor the day that I become hopefully financially independent.
And it's kind of fun to compare the two different paths and I don't think either one of them is wrong. It's just two different ways to go about life and trying to figure out what do you value and how are you going to get there?
Jonathan: And I think what you highlight is an incredibly valuable point. And for young adults listening to this that are planning out their career path.
If they want to pick a profession, you should go into medicine because you love medicine, because you love and are passionate about being a doctor. You should absolutely not go into medicine for the money. Absolutely not.
If your goal is to make a ton of money, you need to go reevaluate this and do some math. But if you love medicine, you love helping people, you love that entire profession, then it's amazing. You're doing God's work. Go forward.
Anyway, I think we want to switch gears here a little here. I think on most shows, that would be the end of the episode. But on this show, we would love to give you a chance to tackle the hot seat. Are you ready for this?
The Hot Seat
Jessica: I'm ready, but are you guys ready? Because I was thinking I could ask you guys a couple of questions first, and then I'll go on the hot seat.
Jonathan: Oh, I don't know. This might break it. This might start a bad trend. I don't know if I want to give up control. Yeah, okay. I'm game. Let's cue the hot seat music.
All right, Jessica. What do you got for us?
Jessica: I want to know, after listening to you guys for now years, what changes have you made in your life to pursue FIRE that was the most beneficial to you.
Jonathan: Oh. Brad, you first.
Brad: I think to me it's mindset. So, everything about my mindset has changed in the last 10 years. I think I was… And it's hard to even remember this time, but I was the stereotypical fixed mindset. Oh, I'm “smart.” I have to win. All that kind of stuff that is important to me now.
And I think it has really been a 10 plus year journey of self-discovery. Kind of like we talked about with James Clear, it's that 1% better. And I think I've tried to make my life better in every possible way. And my relationships are better, my health is better than it's ever been.
Obviously, my finances are in great shape. We're at Financial Independence. So, all those years of learning, listening, reading has come to fruition I guess ultimately and has made this amazing life.
Jonathan: And mine's probably there's two things there.
One is, when I started, as with many of us, we were very fixated on the word retirement. It was called the FIRE community, the FIRE movement, and in large part popularized by Mr. Money Mustache who really grabbed the mantle of ‘I am retired'.
And in the 2013, 2014, 2015 as I was in this job pursuing this profession, I kind of grabbed that, wouldn't that be awesome to be able to retire early from my for my job? And I didn't even hate my job at that point. That happened later. But it was escapism, right?
Whereas now, I barely am concerned about the word retirement all together. It doesn't really hold any real meaning for me, and I say that to say that ChooseFI is my job, it's also my business. You literally couldn't pay me to walk away. And what that really is indicative of is the fact that my entire life is now really revolving around interest-led learning, which is something I never gave myself permission to explore.
As a high schooler, I just wanted to make sure I could provide a stable life for myself and for my future family at the time. I was very focused on that and that was flawed. And it really cost me a lot of time, a lot of energy, a lot of money.
And so what I do now is I get to get up every day, I get to spend time researching and exploring information that really lights me up, whether it be financial or otherwise.
And I'll say specifically, otherwise, it's spilled over. I have given myself radical permission to explore any hobby that I'm even remotely interested in. I play piano. I couldn't be bothered with it as a kid, but I play piano. I'm trying to learn how to draw and I spend multiple hours a week just practicing this and I'm horrible at it.
Actually, I was afraid of failure before. I didn't want to screw up. And that was actually kind of that fear of failure I think came from school, where your failure would kind of indicate where you showed up on a test score. Whereas now, it's just an opportunity to be a little bit better each and every day and that's transformative for me.
So, my mindset has shifted too, but that's kind of in my own version of self-discovery is, what if you just learn something for the sake of learning it and you're interested in it?
Which I think goes to your story, actually, with regards to how you moved over into coding. Let me solve a problem in my own life and then build that into a skill set, which can bring in revenue for me over your 10-year work stint in corporate America. All right.
Brad: You asked the question, you got a five-minute answer. So, let's get one more.
Jonathan: I also learned I'm incapable of 30-second answers.
Jessica: I love it because, Jonathan, when I asked this question, I thought about you and some episodes with… Like, for example, tread lightly, retire early, talk about water efficiency. And then I remember a story about you tracking all the electricity in your house. And those are very physical things of what do you do to try to save money.
But both of you focused on mindset and interest-led learning as something that you got out, which is really cool to hear. And I think that leads into the next question. And Brad, you kind of touched on what James Clear I mentioned about the 1%.
And I'm wondering what other lessons have you taken away from specific stories told on this podcast? You guys get to talk to hundreds of people all pursuing this path, but in different ways, and I'm wondering what impactful lessons have you taken away?
Brad: I think one of the biggest things I've taken away, and it actually ties into what we talked about today, which is skills. Learning skills, and you don't need permission. I think I lived my entire life following by the book until I was 23 years old and I kind of realized, okay, I need to maybe blaze my own trail here and saving money is important.
I think I always just followed society's path of get the good degree, get the good job, get whatever. And it was never to me about learning for learning's sake, it was never about passion. And I've seen so many people follow their passions and I think I've just been blown away by that.
I've seen just the ingenuity of people starting their own businesses, or like we talked about before with Chris Hutchins and how to get any job, the salary negotiation. Obviously, I'm saying multiple things we talked about today.
But if you would ask me this an hour ago, I would have said the same thing. I didn't think outside the box. And I think one of the hallmarks of the FI community is looking at a problem a little bit differently. And I would implore everyone out there to really think about that. Like, we have a reflexive answer, we have a reflexive, “Oh, I couldn't do that. It's not done that way.”
Well, we have 150 interviews of people who have done things outside the box, outside the norm, and they have succeeded wildly. Well, it's not like a very specific thing. It's very broad that you don't have to follow the script. You can follow your passions, you can pick up skills, and you can enjoy your life. And I find that so empowering.
Jessica: I love that. That's a great answer. Jonathan, do you want to answer that question, or do you want a different one?
Jonathan: You got more?
Brad: Yeah, lets go for another-
Jessica: All right.
Jonathan: You know you're giving up your hot seat. You have now moved away from the one question, now you are using your hot seat to hot seat us, and I'm okay with that.
Jessica: All right. Jonathan, what would you prioritize as most important for a beginner starting their FIRE path? One, tracking their spending, two, having a goal, or three, thinking of money in terms of life energy?
Jonathan: Wow. And you can just pick one?
Jessica: You can only pick one.
Jonathan: I can do more than one thing at once.
Brad: Jonathan, regale us with the story here.
Jessica: I'm making it hard for you. You got to pick one.
Jonathan: All right. So, my options are, if a person can only do one thing, or the most important thing, is track their spending, two, have a goal, or three, view money as life energy.
Jonathan: I think you have to have a goal. I think I can get everything else in under the umbrella of having a goal. And I think my goal is to be able to design my future. I work backwards from there and then you realize that that's going to look like knowing how much your life cost. And then you're going to have to want something more than you want stuff in order for that goal to happen.
But I wanted to be able to design my future and decide it on my terms. I'm living that life now. I haven't reached Financial Independence as a number on a times my annual expenses. That is in progress, and I would say it's almost on autopilot. It's an outcome that's almost guaranteed at this point.
But in the process, my goal was to design my future, design my life. And even recently, we keep making these marginal improvements. I kind of go into each week with like, how can you make this 1% better? What would it look like if this were just a little bit better? And sometimes it looks like buying stuff, sometimes it looks like decluttering, sometimes it looks like eliminating things that you were just saying yes to. But I have a goal which was to design my future.
Jessica: Awesome answer. All right. That's all I have for you guys. I don't know if you want to shoot one at me or if that's good,
Jonathan: Yeah, I'm torn on this one. Let's see. I think we're just going to do one for you. I think he used up all-
Jessica: Well, just one. That is totally fair.
Brad: So an inflection point in your life that was especially memorable or meaningful.
Jessica: An inflection point in my life was the fact that ultimately my parents crushed my dreams of going to my dream school. And at the time, it was very dramatic, as teenagers tend to be. And I was pretty upset about it because I had put in all this energy and trying, just like Brad was saying, to do the right thing and go on the right path.
But ultimately, in the end, we couldn't afford it. And something that I learned about money was exactly that, that I didn't know what my parents were making or what they had saved for college. I simply knew that we couldn't afford it.
And even though I felt like I had done everything right, I ended up going to our local public school, which actually is an amazing school and anybody who knows University of Colorado is going to say you're crazy for not wanting to go there.
I just had in my mind this dream school that would shape the rest of my future. And something that I learned about not going to my dream school is that… It was an inflection point in an inflection point. So, not every inflection point is going to necessarily make or break your entire life, so it's okay. And to let go of some of those preconceived notions of what your future is going to be like.
And then ultimately, the fact that something like a public school in an amazing state is still going to get you on the right path like eventually going into mechanical engineering and then software engineering. And that was actually only possible because I didn't go to a private liberal arts college like I wanted to go to.
So I think that's probably the biggest inflection point was having those dreams crushed early on. And that's with humor, I thank my parents for making that financial decision that actually set me up later in life.
Jonathan: That's awesome. All right. Well, I tell you what, we're going to bend just a little bit here. Your budget is about less than $20,000 a year. This is your bonus question. What is one purchase that you've made over the past 12 months that has brought the most value to your life.
Jessica: Imagine this, you're sitting in an airplane and you have a crying baby and the noise of the airplane and the jets going and it's hard to sleep. And then you put something over your ears and you turn it on, and suddenly all that noise goes away.
And something as somebody who has worked in multiple open office environments, it took me forever to pony up the money to get something that could cancel all that noise out. In fact, everyone around me in the office had noise-canceling headphones and I said, I don't want to pay for that.
And eventually, I did and I think it's one the best financial… It's one of the biggest purchases I made last year was the $350 headphones and it has served me really well. Actually, it was $250 after discounts. But anyway, a lot of money for me, and it served me really well.
Jonathan: They sound like they might be the Bose QC-35s.
Jessica: Indeed, they are.
Brad: That's so awesome. So, it just gets funnier. That would be my answer to the question as well. The purchase of… I bought the less expensive ones, the QC-25s, the wired ones. I think they're $150 on Amazon as I talk here. That has changed my entire life. I've used them every single day.
Jonathan: Do you really every day?
Brad: Every single day. I listen to my podcasts with them. When I wake up, I put them on. My brain loves that quiet and it's wonderful, but truly for travel. I used to be I guess a little bit of a nervous flier. But since I got these noise-canceling headphones, I love it. It's a party up there.
I just put them on, I flip that button, and it's like being in a meadow, as I describe it. Like, you're just in this wonderful place. It's great. And this is not a commercial for Bose, but man, that's the best… If mine broke tomorrow, I would click buy on Amazon within five minutes.
Jonathan: I have the QC-25s too by the way. I just figured based on the timeline and the price you set out, that was definitely 35. I was just trying to make the educated guess here. I will say full disclaimer. I want to be honest here. As a parent, with young kids, nothing cuts the sound of an infant screaming, not even the Bose. There's no get out of jail free card there. You're going to have to figure something.
How To Connect
Jonathan: All right. Jessica, people listening to this, if they want to find out more or they want to really find out the script that you actually built and all the tips you have, what is the best way for someone to connect with you and with your content?
And I'm really looking forward to hearing from anybody who finds this interesting or if anybody uses the script or negotiates at their next job, I'm really looking forward to hopefully I've helped people on this episode. So, I'd love to hear from you.
Jonathan: Jessica, thank you so much for joining us on the show today. This has been a real pleasure.
Jessica: Thank you guys for having me. I had a great time.
Jonathan: All right my friends. If you got value from today's episode, press subscribe on the platform you're listening to this on, whether that be Apple or Spotify or YouTube. Like, comment, subscribe. It just lets the providers know you're getting value from the show and you want to be here when we produce additional content.
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