Jim Hopkinson is an author, writer, and speaker living in New York City. His focus is on career development for the new economy, showing how new media, technology and branding are changing how people look at their career and lifestyle. Read more...
Imagine Joe starts a new job right out of college making $50,000 a year as a programmer at a major insurance company near his hometown. He works hard over the next two years and during performance reviews does a good job negotiating and is able to increase his salary to $65,000.
During those two years, he lives below his means, keeps expenses low, and still conducts his life as if he’s being paid $50,000. While the job was a great start right out of school, lately there’s been some management changes, some of his favorite co-workers have left, and he’s not really excited about the work he is doing.
Suddenly, a major opportunity comes up. Two friends from school call to say they are working for a rising new startup doing mobile game development in Seattle. The job would involve moving to a great new city, working in an exciting startup atmosphere, having major input on the direction of the company, programming for games and not insurance deductibles, and generous stock options.
The catch? The bootstrapping startup can only afford to pay a base salary of $48,000. If Joe had matched his spending to his increased salary of $65,000 and was living month to month, he couldn’t afford to take a $17,000 pay cut. But since he was still living as if he were earning $50k, and had put some money aside, he’s able to seize this opportunity if he wishes.