*This post may contain affiliate links. Please read my disclaimer for more information.
How Taking A Step Back Can Boost Your Career
A lot of recent college graduates have this belief that they are going to get out of college find a great paying job and then their income is just going to go straight up for the rest of their life. They see it as a straight line.
Sure, it’s possible that your income could look like this but it could also end up looking a lot like the stock market as mine does. You could get hired on to some great company right out of college, spend your entire career there and gradually increase your income through small yearly raises of 3 or 4%. But is that the best way?
Related: Is Your Emergency Fund Big Enough?
If your first job paid you $50k, you got a 3% raise every year and you worked there for the next 40 years you would be making over $163k/year by the time you retired at age 60-something. That’s a pretty good salary by today’s standards. However, with inflation at around 3% on average you have basically treaded water for your entire career. Now that doesn’t sound so great.
A Step Back
My first job out of college paid $32k/year. For my field it was a decent salary. I worked there for about the next 4 or 5 years and got some nice pay raises. However, I knew that this particular job and this field had a cap. There wasn’t a ton of room for growth and ultimately I knew that this was not a long-term option for me. So does that mean that I wasted 5 years of my life in a meaningless career? Thankfully the answer is no.
I gained some valuable experience, made some good contacts and gained valuable references along the way. But when the time came for me to jump ship and move on to the next thing in my life it wasn’t exactly a pleasant experience. I ended up taking an almost 20% pay decrease with my next job!
I knew that I needed to get into a different field. Something that had some upside potential. Somewhere that gave me more options. More options is always better than less.
After I made the move I also had some other “life changes” that came into play. I decreased my lifestyle down to nothing to try to make this work but it still wasn’t enough. I ended up taking a second job for a few months until I could turn things around. It wasn’t fun but I knew that ultimately it was the best thing for me long-term.
A Giant Leap Forward
I was able to leverage the contacts, references and experience that I had obtained at my first job to start down a path with a much brighter future.
It took a couple of years to get my salary back to what it was before and then surpass it. Now that I have successfully made the transition into a new field it has opened up a lot of doors for me and caused my income to increase exponentially. Now instead of my income being on this linear path that may plateau at any time my income now looks like this.
The red circle is obviously the step back that I took when switching careers. At the time I questioned whether this was a smart move or not. If you shrink this graph down to years one through five it does look pretty dumb. I was on an upward trajectory and then I purposely took a reduction in pay. But when looking at this graph from a 10-year time span or even a 20-year span it looks like a very minimal interruption in my salary.
The key, as always, is to be intentional. Before you make that career switch plan what your next step will be. Will this be a viable career for you 5, 10 or 20 years down the road? A career that gives you more options and more upside than your current path?
This worked for me. It may work for you as well.
Have you ever made a short-term sacrifice like a pay cut to have a better long-term trajectory?
If you enjoyed this post feel free to share it by clicking on one of the social media buttons below. Want to get the latest content from Millennial Legacy right to your inbox? Fill in your email address at the bottom of the page. Don’t worry, we don’t share your email with anyone and we never spam.