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Anchor Price Your Salary
- Image by Dalboz17 via Flickr
Conventional wisdom says that, when negotiating your salary or a raise, you should make whatever crazy ninja maneuvers it takes to get the other person to name a number first.
Horse pellets.
Have you ever watched an infomercial? Those masters of of impulse marketing geared towards insomniacs, invalids, and inebriates?
“How much would you pay for this fabulous meat tenderizer/eyelash waxer? $399? $299? No! If you call within the next 73 seconds, we will let you take this home for the low, low price of just $99.99!”
That’s the magic of anchor pricing.
The first number you hear is the number you will base all further numbers on. If you hear a high number, other lower numbers will feel much lower by comparison. The number doesn’t even have to be about money.
There was a study done that had the subjects compare a price to the last two digits of their social security numbers. Those with higher digits found higher prices to be acceptable, while those with lower prices only accepted cheaper prices.
What does an infomercial marketing ploy have to do with your salary?
If you are negotiating your salary and your potential employer gives a lowball offer, every higher counteroffer after that will much, much higher than than it would otherwise. On the other hand, if you start with your “perfect” salary, they amount you will be happy to settle for won’t seem to be nearly as high to the employer. At the same time, you will be less likely to accept a lowball offer if you set your anchor price high.
For example, if you are looking to make $50,000:
The employer offers you $40,000. $60,000 seems too high by comparison, so you counter with $50,000, then compromise and settler for $45,000. Or, you could start at $60,000, making the employer feel that $40,000 is too low, so he counters with $45,000, leaving a compromise at $52,000. That’s a hypothetical $7,000 boost, just for bucking conventional wisdom and taking a cue from the marketing industry.
How have you negotiated your salary?
What do you do?
You’re not your job. You’re not how much money you have in the bank. You’re not the car you drive. You’re not the contents of your wallet. You’re not your ******* khakis. -Tyler Durden
“What do you do?”
They typical answer is usually something like “I’m a computer programmer.” Or a DJ, a cop, a barista, a stripper, or whatever.
The answer is always given in the context of work. Is work the center of your life? Is your career the most important thing you have? For many, it is. Our jobs become a fully integrated piece of our identities. Even when we pay lip-service to putting our families first, all too often, we spend more of our waking hours working than actually living.
We spend 40, 50, 60 hours each week at our jobs. It’s natural for that to become a part of us.
We go too far.
I am not my job. I am not my career.
I am a father, a husband, a writer, a blogger, and more. I have hopes, dreams, and ambitions entirely apart from my career.
I hope you do, too.
The next time someone asks you what you do, try responding with your passion.
“I’m a parent.”
“I grow freaking awesome roses.”
“I travel whenever I can.”
“I obsess over politics.”
Leave the tradition work-centric script behind. You’re going to confuse the people who are expecting it. They think they are asking about your job and you are responding with something that truly matters to you.
What do you do?
4 Ways to Change Your Life for the Better
Everybody has bad days. Everybody has horrible days. That doesn’t matter. The important thing is how you feel about your life as a whole. What can you do to make your life more worth living?
1. Get out of debt. When you’ve got no debt to pay, you have more options and less risk. If you’re paying $1500 just to service your debt, it will be $1500 harder if you lose your job. If you’ve got no debt payments to make, the impact of losing an income stream is far less. On top of that, you’ll have that much more money to do the things you love every month.
2. Find something you love to do…and do it. Everybody has to do things they hate. For some, it’s cleaning up the cat’s litter box, for others, they die inside a little each time they punch a time clock. Life isn’t all puppy dogs and ice cream, but it’s important to have a little ice cream in your life. What do you love doing? Is there anything you love that you can start doing? Start a business, write a book, volunteer for a charity that matches your values, or grow the world’s largest pumpkin. Whatever it is, it’s time to get started.
3. Eliminate the things you hate. Life’s too short to live with the things you hate. If something is destroying the value of your life, get rid of it. Now, I’m not suggesting you off your mother-in-law, but it may be worth ignoring the phone when her number shows up on the caller ID and skipping Sunday dinner with her. If you hate your job, find another. If you can’t find a way to eliminate what you hate, embrace it and learn to love it, or you will eventually hate more of your life than just the bit driving you crazy.
4. Let the ones you love know you do. Do your children know you love them? Does your spouse? Are you sure? If a meteor fell on your head today, would your kids spend the rest of their lives wondering how you felt? If your wife were in a car accident today, would there be anything you wish you would have said? Now, today, this morning, this second is the right time to let your loved ones know you care. Don’t wait. If you haven’t made it a habit, it may feel awkward. Get over it. Your wife and kids will love you more knowing beyond doubt that you love them. A tight bond with your family can’t be bought, it can’t be bribed, and it can’t be faked. It is worth everything.
What’s one thing you could do today to make your life better?
Inadvertent BOGO
I refuse to buy my kid more expensive video game systems. He’s got a friend who’s got one of each, going back 15 years.
We don’t do that, so he’s spent the last 6 months saving to buy his own XBox 360. After his birthday this month, he finally had enough, so we ordered it a few days ago.
Wednesday was the Great Unboxing.
I was making dinner in the kitchen while the punk and his friend unpacked the box from Amazon.
The squeals were normal. The shouts of “Dad, why did you buy two XBoxes?” were a surprise.
Two?
No.
Actually, yes. There were two of the things in the box. Did I order two? Did I accidentally pay for two?
Nope. The packing slip only listed one, my order history only showed one, and my credit card was only charged for one.
Yet, there were two in the box. Free XBox! Woot!
That means an XBox in the bedroom for Grand Theft Auto and Red Dead Redemption, and an XBox in the basement for Madden and Star Wars. No fighting. No turns to take. And it didn’t cost us an extra $200.
That’s all win.
If there’s nothing on the packing slip, then Amazon didn’t know I had it. Even if they did, I didn’t do anything to make them send it. There was no fraud. Legally, I had no obligation of any kind to do anything other than enjoy my new prize.
Lots of win.
The kids were excited. Everyone gets a turn. Multiplayer games.
The parents were excited. We get a turn. M-rated games.
So much freaking win in that box.
But….
There’s always a but.
We didn’t order it. We didn’t pay for it. It wasn’t ours.
A friend told me to sell it. She knows how hard we’re working to pay off debt.
A coworker said, “Screw them. They’re just a big corporation who’d be happy to screw you first.”
But it wasn’t ours.
I spent 12 hours trying to rationalize a way to keep it that wouldn’t be unethical, make me feel guilty, or–most important–send a horrible message to my kids.
I couldn’t do it.
It wasn’t ours.
I had a talk with my son. It was his money that got this little prize into our house, after all. He wanted to keep it, naturally. He’s got a lot to learn about persuasion. He acknowledged that sending it back was the right thing to do. He agreed that it would suck if the roles were reversed. His only argument in favor of keeping it was “I want it.”
Even he admitted that was completely lame.
It’s going back. I let him think that was his decision.
I talked to Amazon. They apologized for the inconvenience and gave me a UPS label to send it back at no cost. It didn’t cover pickup, but I’ve got a drop box in my office building, so I can deal with that.
My wife was pissed. The customer service rep never bothered to say thank you. She called Amazon to complain to a manager. After reminding him that we had no duty to return the free XBox, he gave us a $25 gift card to say thank you.
I love my wife.
My son, for deciding to to the right thing, gets to spend the gift card. My wife, for being awesome, gets to be with me. I miss my free XBox.
What would you do? Would you keep the free XBox, sell it, or send it back?
7 Benefits of Investing Internationally
When it comes to financial investments, it’s always better to go with an informed decision than one that relies merely on chance – besides, gambling only works when luck’s on your side. Fortunately, international investments are a financially secure and reliable form of investing as long as you know your limitations. So, in keeping with the idea of sound financial decisions, here are seven benefits of investing internationally:
Diversification of Your Funds
A diversified financial portfolio gives investors options in terms of economic fluctuations and, by investing internationally, your finances will have alternative sources of stability. In other words, if your money is spread out among various countries, then an economic crash in one country won’t affect other investments.
It goes without saying that with diversification also comes a learned understanding of various global economies and markets, but with the help of a financial adviser or with a little research, you’ll have the ability to make informed global investments, which is always better than the “eggs in one basket” approach.
Investing Abroad Means More Options
Just like there’s diversification with investing internationally, there are also many options when it comes to the way you want to invest your finances. And, with international investing growing in popularity, the investment options available in today’s market are quickly becoming commonplace.
Three of the most popular forms of international investments are mutual funds, exchange traded funds (ETFs), and American depository receipts (ADRs). And, although mutual funds are a common form of investment, ETFs and ADRs trade much like stocks and therefore take a little more financial knowledge to navigate.
International Protection and Confidentiality
If you’re the type of investor that’s worried about financial scares associated with foreclosures and lawsuits, investing internationally has an added advantage of asset protection. With investing abroad, many foreign financial institutions are able to protect your investments from seizure and other threats.
Likewise, investing internationally also comes with confidentiality concerning your finances. International financial institutions are not legally required to divulge your monetary details to anyone. Confidentiality isn’t to say that international investments are exempt from legalities, but they’re entitled to more freedoms.
Investment Growth on an International Level
In terms of household incomes, import/export strengths, younger working populations, and the lean toward free-market economic policies, investing internationally has the potential for more growth than investing in the United States alone, which translates to an increase in return potential in overseas investments.
In fact, according to the International Monetary Fund, the United States is expected to fall below the rest of the world for the next two years when it comes to economic growth. Because of this, companies like Fisher Investments Institutional Group are strategizing toward international investments in strong economic climates across the world.
Currency Diversification Strengthens Portfolios
Much like international investing gives your portfolio safety in numbers as opposed to having all assets invested in one country’s economy, so do currency differences from country to country. In relation to the US dollar, many countries across the world have stronger currencies, which helps boost returns over time.
The flip side of this coin is the idea that fluctuations in currency strengths can just as easily work against your portfolio as they can strengthen it. It’s wise to keep an eye on international currency rates and how they compare to the US dollar, but never invest solely based on rates as a country’s currency can drop in strength overnight.
A Reduction in Taxes
Otherwise known as tax havens, many countries across the world offer attractive tax incentives to foreign investors. These incentives are meant to strengthen other country’s investing environments as well as attract outside wealth.
These tax incentives are particularly attractive to US investors due to the increasingly high taxes in the country. As a result, the United States government is creating more defined restrictions and laws when it comes to international investment tax incentive regulations.
Investment Potential in the United States is Dwindling
Because the United States has both the world’s largest economy and stock market, financial opportunities are almost maxed out due to over-investing. On the other hand, emerging markets in other countries are growing in size and strength, which is quickly resulting in stronger economies and more investment opportunities.
By ignoring the potential of other world markets, you’re also ignoring global economies and stock markets that offer unforeseen investment potential when compared to the United States, which is something every investor should keep in mind.
So, from portfolio diversification to investment growth, investing internationally is a great way to expand your financial horizons.
This is a guest post.
