Americans’ financial planning priorities are out of whack: They try too hard to save money when they should be focusing on earning more. So says Matt Manero, a serial entrepreneur who owns four businesses.
Matt Manero, author of “You Need More Money: Wake Up and Solve Your Financial Problems Once and For All” (Portfolio 2018) says he has found the key to financial independence.
In his new book, Manero, who is also an entrepreneur in the transportation equipment business and owns four companies, argues against blaming others’ for your financial problems, and says the best way to take control is to beef up your paycheck.
Of course, that’s easier said than done. The unemployment rate may have fallen to a 17-year low this year, but wages are growing slowly (if at all). About 14% of American workers aren’t getting any pay raises.
Employers are moving away from traditional benefits, like raises, and replacing them with lifestyle benefits, such as flexible hours, gym memberships and other perks.
Manero said employees have to find a company that aligns with their values and goals. If not, it’s time to move on, he said.
See: 7 ways to get ahead at work so you earn millions more
Manero spoke with MarketWatch about saving versus earning.
MarketWatch: I’ve heard personal-finance bloggers say it isn’t about how much you earn but how much you save.
Manero: They say save between 10% and 15%, but I don’t believe that does it. I think the savings rate has to move to the 40% range. If we start younger a lower rate works, but most people aren’t doing it in their 20s or, in fact, in their 30s so when they recognize they’re behind financially in their 40s, they’ll have to fund that retirement savings gap with a lot more.
That’s why I think 40% is the number. And that’s gross, not net. You do that in only two ways: You reduce your expenses or you make more money.
MarketWatch: How do you advise getting a raise at work?
Manero: I call it your annual report. Prove to your organization you are entitled to more money. What problems have you solved? What income have you generated in a sales capacity?
The perfect example: I had someone come in to my office who has been here for a year and wanted to know what I’d do about it. I said, “I don’t know what you are asking me. Just because you’ve been here a year you deserve a raise?”
I said that’s not how it works here. You have to go back and print an annual report and tell me what you did to generate value to the organization and, what do you know, she came back the next day with the most beautiful presentation with all the ways she saved money. She got the raise on the spot.
So many of us ask to be rewarded for time and we don’t get rewarded for time, we get rewarded for value creation. When we create value, we remove time. If you understand the value creation and an annual report, you can go to your boss every three months to ask for a raise.
So many of us ask to be rewarded for time and we don’t get rewarded for time, we get rewarded for value creation
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MarketWatch: How would you describe the current state of the workforce?
Manero: It’s never been better ever for people to earn more money. The economy is blissful and fantastic and the employee is in a stronger position that the employer today. It is hard to find good employees and the best ones know that.
MarketWatch: What about the gig economy? Is that helping people go from where they are to where they want to be and, if so, how?
Manero: Yes. People have to be clear on what the entrepreneurial experience is because the minute we leave and become entrepreneurs, we take on a tremendous amount of risk and pressure because now we have to do everything: Sales, accounting, IT, clean the toilets. I am very supportive of entrepreneurial departures, but only when done after research and analysis.
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Marketwatch: What is the biggest challenge of being an entrepreneur? And the biggest benefit?
Manero: The number one challenge is you become every job on the organizational chart and most people don’t think about that. You become responsible for all departments. If you’re good at sales but bad at accounting, that’s a problem for you.
However, the magic of being an entrepreneur is something. If someone has it in their DNA, it never goes away. They just have to be the boss. Carve out a problem and create a solution. It has never been a better time to be an entrepreneur today.
(This interview has been edited for style and length.)
Source : MTV
