It’s Ok, Your Highest Earning Years Are Still To Come

Stop letting imposter syndrome control your life!

There’s no quick win when it comes to getting rich. And don’t even come at me with that ‘but you could win the lottery’ BS! It takes time to pay off debt, create good budgeting habits, and build your investment portfolio. That’s just life, but it doesn’t exactly encourage good behaviour. Spending money gives you instant gratification. You see people around you doing things you want to be doing (hello imposter syndrome!), and it’s hard to feel like you’re missing out. Saving money doesn’t give you that same instant boost. Sure, it will be great when you’re retired, but that’s SO FAR AWAY.

The hardest part of your journey towards financial independence will always be the beginning. You’re motivated and ready to jump in with both feet, but you probably don’t have the high income or the pre-existing investment base to fuel instant returns. It’s slow, and that motivation can be hard to maintain.

I get it…I’m right there with you!

Imposter Syndrome

When you’re reading up on good money habits, you want to learn from the best right? You are devouring everything you can about those people who are living their dream life. The problem? We too often forget that their dream life only came after years of following their own advice. They aren’t at step one. They were at one time, but not anymore.

So why are you comparing yourself to them? One of the most well known and highest income earning personal finance bloggers out there is Michelle Schroeder-Gardner from Making Sense of Cents. She now travels full time and earns over $100k per month from her blog. Life goals amirite?!

Not so fast. Sure, I enjoy blogging and would dance for joy if my blog made even a tiny portion of Michelle’s, but that’s not where I’m at. I have to remind myself that my blog is not my primary focus. My day job is my priority; the blog is a side gig. I can’t expect full-time profits from a part-time project. 

Your path is unique that’s ok. It’s important to remember what your end goals are and what sacrifices you are and aren’t willing to make to get there. Not all of us want to retire tomorrow, not all of us want to own a home, not all of us have the time, ability or desire to side hustle our way to wealth. You need to find that happy middle where your future aligns with your current lifestyle.

The Power of Compounding

If you’re at the beginning of your journey towards financial independence, then that end goal might seem impossibly out of reach. The early days are the toughest. The great thing about money is that it builds on itself. The more you have the more you’ll earn. Hello compounding my old friend.

It’s more than just compounding on your dollars though. The further along in your journey you get, the better you’ll be at many things.

Budgeting takes practice. The more you do it, the easier it will get, and the less time you’ll have to spend on it.

Combatting impulse spending? You guessed it; practice makes perfect. Ok, not perfect but way, way better.

Increasing your income won’t happen overnight but asking for regular raises and working your side hustle skills will ensure you’re trending upwards.

Breaking Down The Numbers

Let’s say you are a brand new graduate who just got offered an entry-level job in your dream career field. This hypothetical new grad’s money stats are as follows:

Debt: $15,000 student loans and $5,000 credit cards
Income: $50,000/year gross or about $3,400 net/month
Savings: $0
Contributions: $200/month
Expenses: $1,955/month

According to this article by Lowest Rates, it costs $1,955/month to live as a young person in Edmonton. Obviously, I have hometown bias but looking at the numbers they sound fair to me. If you’re living in a more expensive hub like Toronto or Vancouver, then that number will be higher. Alternatively, if you’re living in a small rural town, then your expenses will likely be lower. It doesn’t really matter; you’ll get the point either way.

If you are earning $3,400 net/month and spending $1,955/month that leaves you with $1,445 of excess income.

Paying off debt will be your focus but let’s balance that out with a bit of saving. How about we start with $100 per month for retirement (RRSP) and $100 per month for everything else (TFSA). That now leaves $1,245 to put towards debt. This hypothetical person isn’t in a bad debt situation but it’s still best to get it paid off in full. I would focus first on the high-interest credit card debt. You’ll have to pay at least $200/month towards your student loans so let’s make it $245 and then put the extra $1,000/month towards the credit card. You should have that knocked off in about six months. Hooray!

Now you can turn your focus onto the student loans. If you now put the full $1,245 towards your student loans, you’ll have those paid off in full in a little over a year.

Now we’re going to throw hypothetical new grad in a time machine and flashforward five years. Their new money stats come in at:

Debt: $0
Income: $60,000/year gross or about $4,000 net/month
Savings: $80,000
Contributions: $1,850/month
Expenses: $2,150/month

Way better right?

Let me explain how I came up with the new numbers. We already know that all debt was paid off within the first year and a half and those payments were redirected into savings. For the higher income, I assumed a pay raise of five percent in four out of the five years. Putting in the extra effort and making yourself a vital employee has its benefits. Expenses have also gone up at a rate of two percent inflation each year. The $80,000 in savings comes from contributions of $68,000 that earned a fairly conservative five percent rate of return.

If we were to jump forward again another five years, your investments would be worth over $225,000.

Your starting out point doesn’t sound so bad if you could have $225,000 in the bank in ten years, does it?

Choosing The Right Measuring Stick

Those trailblazers who are currently living your dream life aren’t your cohort; they’re your inspiration. Look to them for advice and inspiration, but not as a measure of your success.

The best thing to do? Compare yourself to yourself. You want to be on an upward trajectory as much as possible. Instead of comparing your income, your net worth, your weight, or how fast you run to some internet stranger, compare where you’re at now to where you were at one year ago. Look at the accomplishments you make year over year. Only you are living life in your exact situation, so don’t let someone else’s wins or losses diminish your own.

Easier said than done right? We all have a tendency to compare ourselves to others…it’s part of that whole being a human thing. And since I know you’re not going to stop it completely, I can at least encourage you to judge like by like. You wouldn’t judge a banana for being skinnier than a mango. Or a corgi for being slower than a greyhound. (blatant excuse for a corgi GIF)

Make your comparisons relevant by finding others in your peer group. Is your income on par with what other dental assistants are making with five years experience? Is your blog traffic similar to those who have also blogged for one year, work full-time and only publish once a week? Are you losing weight at the same pace as another female who also has fifteen pounds to lose?

We all want to know where we’re at but you need to make sure the data you’re interpreting is accurate.

Takeaway

Don’t get discouraged by a slow start. A few years, a bit of patience, and a commitment to your end goal will have you well on your way to being the person you’re currently comparing yourself too. A few years might sound like FOREVER, but it’s not. It’s a small fraction of the life you’ve still got to live, and negativity isn’t going to make it go any faster.

I’d love to get your input in the comments! What tips have you found successful in combatting imposter syndrome? 

Don't let imposter syndrome get you down by putting your starting point in perspective.

This post was proofread by Grammarly.

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12 comments

  1. Love the use of the corgi GIF! And I love the blog. I am 20 years younger than my older sisters and I often want what they have. But I have to remember that they had 20 more years to get to where they are now. I need to slow down, do the work and enjoy the journey!

    1. Thanks so much Helen! That’s a tough age gap when it comes to sibling rivalry. I’m an only child so I’ve never had siblings to live up to but I can imagine it can be tough. Definitely enjoy the journey and remember you have the added advantage of learning from their mistakes.

  2. This is such an interesting discussion! I’ve certainly felt blog envy when comparing myself to other (in my mind, better) bloggers. “Why haven’t I made any money from my blog?” Oh right, because I don’t do affiliate links very often and I don’t do ads. Problem solved.

    I also have to give myself a pass when I think about my savings compared to people my age. Since I went to grad school, I’m two years (at least) behind everyone else. Two years doesn’t seem like a long time but it makes a difference!

    1. Two years is a long time, especially when you’re off doing something that is costing money. Education is a good thing though, and grad school will hopefully bring with it higher incomes in the future.

  3. I love this! We all need to make the distinction between aspiration and envy, and that line can be difficult at times.

    I know lots of millennials look at my blog and get shocked at the numbers, but then I have to say – I have 10+ years on you, time is a great equaliser.

    1. Time is a great equaliser! And it’s not just about age, it’s more about when you started. You might be the same age as someone but went to grad school or aren’t in a career that has high income levels. Every situation is different.

  4. Great post! I swear it’s so hard to think that when will I be financially stable enough go do the things I want- seems almost impossible! These are some great tips! xx

  5. “compare yourself to yourself” is the BEST advice. This was such a perfect article. Especially since I surround myself with so many FIRE blogs making a killing, it’s easy for me to just feel bad about my low salary.
    I’ve learned that comparing myself from last year and the year before that is much healthier and beneficial.

    1. Thanks Steph! I also find it way more beneficial to compare where I’m at today with last year. It’s more relevant and much more positive.

    1. Maybe not actionable, but I think you’re completely right. I’ve also found that getting older has made me care less about what other people think.

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