**Your Greatest Financial Asset: Why Your Career Matters More Than You Think**
When you’re investing in assets, what would you say is your greatest financial asset? Is it your house? Your investments? While those are important, unless you’re already retired, your greatest financial asset is most likely your **career**.
### The Importance of Your Career as an Asset
The average stock market return is around 7%, and commercial real estate averages about 9.5%. But these returns can only work if you have the capital to invest. Your career, on the other hand, is what generates that capital in the first place.
That doesn’t mean saving and investing aren’t important—they absolutely are! If you spend everything you earn, you’ll never build wealth. Make it a habit to save some money from every paycheck. Avoid leaving your entire capital in a low-interest savings account, or it will take much longer to reach your financial goals.
Instead, consider investing in simple, accessible instruments such as index funds, which even Warren Buffett endorses as a preferred investment method.
Your career is the driving force behind your ability to build your financial assets. By increasing your earnings throughout your career while keeping your spending steady, you’ll have more money available to spend, save, and invest.
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### Estimating Lifetime Earnings: Your Career as a Valuable Asset
Let’s estimate the lifetime earnings of a new graduate. Suppose you just graduated and earn an average of €2,500 per month or €30,000 per year. With a career spanning 45 years and an average pay raise of 3% annually, your total lifetime earnings would be approximately **€2.8 million**!
That’s a huge amount — and it means your career is an asset worth €2.8 million. For most people, this is their most valuable financial asset compared to anything else they own.
To grow your wealth, it’s crucial to maximize your career’s earning potential. Increasing the growth rate of your salary even slightly can have a big impact over time.
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### The Power of Salary Growth: Compound Your Earnings
Imagine your salary increases by 4% per year instead of the average 3%. Over a 45-year career, you would then earn about **€3.6 million** — €850,000 more than the lower growth rate.
What if you manage a 6% annual raise? You’d earn around **€6.4 million** — that’s 128% more income! Just by increasing your salary growth rate by 3%.
This effect is similar to compound interest: small improvements each year add up to substantial gains over time.
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### Compounding Like Warren Buffett: Invest Your Raises
You’ve managed to grow your salary, now what? Don’t just save—invest! If you invest the difference created by your salary increases over your career, your wealth will compound even more.
For example, if you earn 4% raises instead of 3%, after 5 years you’d earn about €36,500 annually. If you invest the extra income every year assuming a 7% market return, that 1% annual increase converts into an additional **€2.4 million** by retirement.
This means your €3.6 million in earnings plus the €2.4 million investment growth totals **€6 million** over your career. That’s the power of combining salary growth with smart investing!
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### My Personal Example: A 21% Return on Investment
I started working in April 2018 at a financial consulting firm. At the beginning, the salary wasn’t very high, but the growth potential was promising.
I work on short-term assignments with various clients, which broadens my experience and relevance in the sector. After a performance review in February, I aimed for a €400 raise and ended up getting a €477 raise plus a promotion!
This means I achieved a **21% return on investment (ROI)** from my career growth in just 9 months—which outperformed any of my individual financial investments. Career growth can be one of the best “investments” you make.
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### How to Achieve Above-Average Salary Increases
Want to catch those >3% salary increases? Focus on:
– Delivering excellent results and earning great reviews.
– Networking by attending gatherings and connecting with colleagues.
– Being a team player and offering help to coworkers.
– Continuously upgrading your skills through classes or courses.
– Mastering the basics.
– Communicating effectively and asking for feedback.
– Always exploring your options.
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### Final Thoughts: Make Your Career a Priority
If you’re willing to put in the effort, you can add millions to your lifetime income by focusing on an above-average career. This can reduce the time it takes to become financially independent significantly.
**Are you making your career a priority? What strategies are you using to maximize your earning potential?**
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*Start viewing your career as your greatest financial asset today and unlock its full potential for your future wealth!*
https://radicalfire.com/career-greatest-asset/