So I’m 20 and I’ve started looking at the salaries of jobs/careers, and this is the impression I’ve gotten. Like that you could spend years cramming a ton of knowledge about a very niche field, and still only get 2-3x what a run-of-the-mill job makes. Is this true? If yes then I guess this route to wealth would only make sense (due to the diminishing returns) if the topic truly spoke to you, right? Are there alternative career paths to good pay than being really good at something really specific?
Is there a field where that red curve is flipped so that each extra aquired unit of expertise earns you exponentially more money?
It’s hard to overstate how much money “2-3x what a run of the mill job makes” is over the course of a lifetime. I guess to you right now it doesn’t seem like much, but someone who makes three times more money than someone else is significantly more well off. There aren’t any wage jobs that are going to net you exponential salary growth. Your only hope there is to strike gold and found PayPal or Microsoft or something.
This is very true
Some people fall into the lifestyle creep trap and get accustomed to spending what they make. If you make 2x average and live relatively normally you’ll find your savings grow quick.
Even if you do make good money, it’s best not to let that go to your head.
To build on your comment: cost of living has a surprisingly fixed price. Different qualities of living don’t cost massively different. If the average person has to spend their whole earnings on living an “average life”, if you make 2x and want to live twice as nice of a life, it likely only cost 1.5x the “average life”. Earning 2-3x opens up a lot of luxury even though it may not seem like it.
Con man? CEO? Hedge fund manager?
But seriously, generally anything having an exponential return in this world is pretty unusual and generally not guaranteed if it’s a desirable outcome.
Particularly in a capitalist economy, the business only has to pay you just enough to not leave for a competitor, they don’t need to pay you the true value of your ability unless you’re basically the only person on the planet with the necessary skills.
On the flip side, in booming industries that require specific skills such as tech, you can generally get a pretty linear progression for a while before it plateaus in a good number of organisations.
Continuing to work for the same company will only provide +2% to +4% per year regardless of knowledge gained. You aren’t paid for how much you know.
To get the large gains in income, you have to re-set your salary by changing jobs, at which point you get one big bump, then go back to +2% to +4% per year.
Not true for everyone. My pay rises over the past 5 years were around 35% on top of my starting wage, specifically linked to how much knowledge or experience I have gained in the role.
In curious where you are in the career curve?
When I started I had similar experience where I was rapidly getting promoted and raises. Eventually that slowed down.
To be honest, when you continue to work for the same company, your knowledge will also only grow by +2% to +4% per year.
You’ll be the go-to guy for a number of things, all of which you’ve done a thousand times. Doing something else will decrease the team’s efficiency, cause someone else is the go-to guy with the expert knowledge on that.
And you only work within the context of your company, without getting exposed to how other companies do things.
It takes a certain soft skill to break out of one setting and hit the ground running somewhere else, which most don’t have. And after you switch, you bring a valuable outside view into whatever company you enter. That’s part of the reason you can demand more at a new workplace.
Staying for a long time in one place also offers comfort and familiarity, which have value for people, especially with families.
Employers need to pay more to make up for that loss in “value”.
I’m one of those people that’s switched skill sets and jobs multiple times. It’s great for me because I love learning new things and using the new things I’m learning as it applies to the current job I’m doing. But there is a disadvantage to this in that recruiters don’t know what the hell to do with you and bosses are always suspicious that you will jump ship at the drop of a hat. The ones who do take a chance and hire me have always been happy with my work though.
