Mar 29, 2010

Shopping Update

Spent $450 at Ann Taylor yesterday after 4 hours trying on just about everything in the store. Why must every single top have some weird ruffle on it this season? Not only do they look ridiculous, in the rare cases they didn't, I just thought what that poor ruffle would look like after being through the wash once or twice. Or even hand wash. I don't like to do dry clean only for my tops.

Showed my boyfriend my $350 worth of Theory purchases and while he liked my sweater jacket thing, he disliked the dress (I don't really like it either) so that's going back to the store. $150 return. Cha ching. As for the Ann Taylor stuff, I got a grey pencil skirt that fit nice (but may wrinkle too much... why must things wrinkle?), a pair of size 12 petite black pants that are a little bit too big (the 10s looked like i was going clubbing the way they hugged my ass, so I opted for the larger size), a kind of pretty navy blue shirt with short sleeves, and a pair of patent leather shoes that don't fit at all... they are going back to the store too. So my $450 trip will be a $300 trip and my $350 trip will be a $150 trip once I make all my returns.

I'm forcing my boyfriend to come shopping with me tonight. I don't agree with his taste in everything, but he did help me go through some of my clothes in my closet last night, and we discovered that while I own a lot of "slutty" clothes as he likes to call them (I call them thin-strapped tank tops, not work appropriate) I don't have much when it comes to work wear. I'm throwing something together for today that I'm not 100% happy with. Really, the most important thing I need to get are shoes. I own one pair of shoes that will work for today but they're so worn out on the heal that they make me walk crooked. They were great while they lasted.


Mar 28, 2010

Her Makeover Attempt: Clothes for Work

This weekend, I have frantically been scouring department store after department store (and smaller shops) to find the perfect outfits for my first week at work. While back in my high school days I'd have trouble narrowing down my piles of "loves" on shopping trips, these days I can't find things I even remotely like. Partially, as my body ages I've developed curves in places clothing designers are terrified of admitting existence, so few things I try on even fit. Then, there's the question of - what does a 26 year old wear when trying to dress older and more professional but not too old or too professional to a job that interfaces with many different types of people... in an informal left coast city?

The other thing is, I really don't want to spend my entire paycheck on a new wardrobe before it's even deposited in my banking account. I will if I have to, but that seems really silly. I do have expensive tastes, but in the past my purchases were more often sale rack than full retail, even in nicer stores. But in this role I really feel like I need to look expensive. Does this mean my clothes need to be?

Some days, I wish I was a guy. Men have it so easy. Wear a pair of slacks, a button-down shirt, slick your hair, wear nice shoes, and you're done. Being a women... there are way too many variables for the professional world. What hair style do I wear? Up or down? Should I wear a skirt, pants, or a dress? Long sleeves or short sleeves? Or a jacket over a tank? Can I take the jacket off at work if I get hot? What shoes do I wear? Closed toe? Peep toe? Should I wear heels or can I get away with flats? Yikes.

Yesterday, I spent the morning shopping at Bloomingdales because they are having a 20% off sale and I also had a $25 off coupon expiring in April. Figured it was worth a look. The whole shopping experience there infuriated me. First off, finding my size... or anything close to my size... in items I liked was fairly impossible, with the exception of when items were "small, medium, large" -- I'm somewhere between a 10 and a 14 depending how the designer cuts the clothes. Petite only in my inseam but everything else is, well, average to large. 31" waist last time I measured. Probably bigger than that now. I have big hips, a protruding behind, and thighs that don't look like they belong on legs with a 27.5" inseam. Thanks mom.

Even when I found a few things I liked that seemed to fit I had to stop and ask myself -- does this make me look too young? Can I be taken seriously in this? There is one skirt there by Marc Jacobs that I've been eying for months and I was surprised they still have it. It's a $200 a-line black skirt in a thick fabric that just feels really nice on. Size medium was a little too tight, but I almost bought it because I have a habit of buying black skirts knowing I'll wear them. Then I looked at the skirt again. It was flattering, covering my belly bulge with the exception of where it was slightly cutting into my stomach (must exercise), but it just didn't make me look older. In fact, the whole outfit made me look younger. I tried the skirt on with the sleeveless shirt and sweater they were showing it with on the rack. The shirt, which looked like something I'd wear when I was 5, was a sleeveless with hearts on it and these gaudy gold buttons. The sweater was grey and preppy but oversized, and only available in a large or extra small. I grabbed the large and headed into the dressing room to try out the look. And, yes, I looked like I was 5.

Who wears this stuff, I constantly asked myself browsing all the expensive options by designer labels... half of the collections at the store look like they're designed for people in high school or maybe college, and the other half (ralph lauren, eileen fischer, etc) look to be designed for women in their 40s. What do professional 20/30 year old women wear?

I've always found myself drawn to certain brands which seem to come close to what I'm looking for. Theory, one of my favorite brands in terms of style, had a few options. But at $200-$300 an item, I stop to wonder, can't I find this style some place cheaper? Do I need to spend $250 on a pair of pants to earn the respect of my colleagues and move up the corporate business chain? And even if I do, is Theory the right brand to get me there? Surely, it's a better option than anything offered by Marc Jacobs (really - WHO WEARS THIS STUFF?) but with each outfit costing $700-$1000, it's tough to splurge without it being perfect. And nothing was perfect.

I found a nice grey half-sleeve sweater that I instantly knew would become a classic in my closet, so I felt that was worth the $200 price tag. There was a blue sleeveless cotton dress with ruffles on the neck which I could see looking nice under the grey sweater if I had a brown leather belt to tie it all together. So I bought that, the sweater, and a t-shirt length black turtleneck, all by Theory. Total cost after discount: $355. And really, I don't have much of an outfit there. I still need shoes and a belt and handbag to make the dress/sweater look complete. The $75 black turtleneck feels like heaven and will be worn, but I'm not sure what bottoms to put it with.

So today I'm still looking for what to wear tomorrow. I really want to look like a million bucks without spending anything near that much money. But how? Sure, I could buy a suit at Macys for $99, but a suit really isn't right for this environment. It's too formal, especially for my role. Funny how it costs much more to do business casual than true-blue business. At least for women. I could definitely find a nice suit outfit for under $200 on sale. But to really look slick, slightly trendy but also professional, that's where the money starts to become an issue.

The other thing I realized is... I don't have much of a life outside of work. I mean, maybe all the clothes they sell at Bloomingdales are for women who dress up to go out at night and on the weekends. But I don't go anywhere. On occasion my boyfriend and I go to dinner but I don't really need to buy new outfits for that. I have plenty of dresses and things that work for my non-professional life. I have no reason to spend $1000 on an outfit that I wouldn't be wearing to work. So I never would. I like to spend my money on nice clothes for the office because I'd end up wearing them most of my life. And it's the only opportunity I have to dress up and look nice in my life. Even with my potential $100k salary, I live a $40k life. And I'm ok with that. I just like to dress up sometimes and where else am I going to do it other than the office?


Mar 26, 2010

Honesty is a Good Thing...

I was checking my bank account this week when I noticed a good chunk of extra income from my last employer. While it was tempting to not notify them about this accidental bonus, I knew it was the right thing to do. Besides, they'd probably figure it out eventually and then it would be a bigger mess than it's worth. I admit, I was hoping they'd tell me to just keep it and thanks for being honest (it's not like I asked for the extra funds, they just appeared in my account, heh) but I figured they'd want their money back. And rightly so. Oh well, I was kind of excited to think maybe somehow my severance hadn't been paid in full and I was owed more money, but my bank account will say so-long to the extra half-month's income. Luckily I'm doing fine this month, even without my unemployment checks (I have not figured out how to get my unemployment checks so I've kind of given up at that since I have a new job starting Mon and figure California needs the money more than I do right about now.)


Mar 25, 2010

Image Makeover for Corporate Success: Part 1 - New Hair?

Until recently, my hair has always been on the short side. As a child, my mom loved to approve of the bowl cut, and eventually let me have hair a few inches past my shoulders. I was convinced my hair just wouldn't grow longer than that, but in reality it was my hair dresser who refused to let it grow any further.

So I grew up with a complex about my hair, among other things, always admiring the other girls who had long, beautiful hair when mine would just not grow. As an adult, after chopping off my hair to chin-to-shoulder length for the ease of it during college and for a show I was in shortly after, I let my hair grow. I've had a few trims here and there, but basically I've been all about the long hair style. My boyfriend loves long hair on me, and even though I never know what to do with it, I admit it's the more flattering for my round ball head than most other looks.

But with my new job and my dedication to creating a professional image for myself, I'm torn. Do I cut my hair off and look corporate slick, or keep the hair long the way I (and my boyfriend) like it and just wear a bun or something when I'm at the office. It's not like I work in New York, and business casual around here is a little looser to define than in some other environments. However, if I'm going to be doing any world travel, the culture quickly changes, and I want to look like I mean business.

It's kind of amazing how many powerful women have short haircuts. Just look at the list of Forbes 100 Most Powerful Women of 2009 and you'll see what I mean. Granted, most of them are in their 40s and 50s when a short hair style makes more sense, but most of them have short, really manly hair styles. It doesn't even look that good, but I guess it makes them less sexually desirable by men, so they could be taken seriously. It makes me sad to think that might be true, but why else would all these high-power women want a crop top? Just to limit prep time? I'm not so sure.

In addition to figuring out what hair style to get (likely I'll just go for the trim this time around), I need to figure out how often to get my hair cut. Up until now I've lived by the two cuts a year rule. I think it's silly to spend money getting any more hair cuts, really. I feel like it's a huge conspiracy by the hair dressers who want you to pay them more often. That said, my hair probably could use to be cut more often than twice a year. And with this image makeover I'm doing for myself, getting a trim every 8 weeks won't kill my budget, and may help a lot with my overall presentation.

What do you think? How often do you get your hair cut? What style do you wear and is it appropriate for your job?


Trying to Get My Parents to Budget is Like...

What would be the correct metaphor here? I don't even know. My parents are way worse than I am when it comes to finances and both of them are in massive denial over their spending problems. It doesn't help that my dad likes to blame my mom for everything and sees no fault in his own actions. Ever. Trying to get them to agree on a serious budget is like... impossible.

Towards the end of 2008, I made my mom sign up for a account so I could see exactly what they were both spending all the money on. My father would never let me spend time on his Quickbooks, where he says he carefully tracks all the finances. When I visited home recently, I sat down with my mom to review their 2009 spending. What I saw didn't shock me, but it scared me a little.

They spend $13k a month, on average, not counting my sister's tuition, which they pay in full as well. Neither of them are working. My dad receives a sizable pension and disability right now, but not enough to support that kind of spending. This year, he told my mother that they should be spending $6-$7k per month at most. The 401k will be available next year, so he keeps saying "once we get the 401k we will be fine. We just cannot spend a lot this year." I'll talk about the 401k issues later. But for now, simply, my parents need to spend no more than $7k per month on just the two of them and their house. That sounds like it should be do-able, right?

My dad told my mom that she can spend $2.5k on all her stuff per month, he'll spend $1.5k, and the remaining $3k will go towards the mortgage, taxes, insurance, and other necessary costs. So I sat down and worked out a $2.5k monthly budget with my mom. I think this helped her start to understand how much things actually cost. She spends so much money on clothes and other random things. Not really nice things usually. My dad spends most of his money on medical (he has terminal cancer and is being treated in the city so pays a lot for transportation and his co-pays, pills, etc.) Both of them spend way too much on food per month (about $1,000 total for two people!) though I let my dad's food spending slide to an extent because he earned the entire household income for his entire life, is dying within the next few years, and loves food more than he could ever love anything or anybody else. He won't get to enjoy his 401k/retirement years, so I'll let him spend a little too much on food without being picky. He deserves at least that.

My mom, however, looks at the budget and says "ok, that helps a bit. I don't think I can stick to that. But it helps me understand how much $2,500 a month is worth." Ugh. She doesn't understand that she has no choice other than to stick to the budget. Granted, my dad has about $1M in the 401k, and even with the $300k left they owe on the house, they still are doing ok spending too much, for now. It's hard to put everything into perspective, because the nitty gritty of the situation is that my dad is going to die within the next 10 years and my mom could live a very long time... so she's the one who should be worried about having enough to live on for the rest of her life. And given her spending habits, I'm not so sure she will.

The unfortunate thing is -- the $1M in retirement plus pension may be a good retirement amount for this day in age, but my father's health costs may continue to rise before he passes. With terminal cancer, you just don't know how much the treatment will all cost, but it's going to be expensive no matter how you look at it. My mom will surely be left with a decent amount of retirement savings, but not the $2M my dad had hoped for them both to retire on before he became ill and before the stock market crashed. So she's going to HAVE to budget eventually. She can't just be in denial about her spending forever. Or can she?

It's not just her, though. I went through their entire budget and figured out that, not counting things like food, clothes shopping, medical, and other purchases that should fall in my mom and dad's personal budgets, last year they spend about $9,000 per month (!!!) on everything else. Between the mortgage, home taxes, insurance, utility bills, cell phone bills, they spent about $3k per month (which is how much more they should be spending beyond their personal budgets.) But then it gets messy. Where does that extra $6k per month go? Well, it goes to a lot of things... house cleaning (every week, last year it cost about $10k for the whole year!), home improvement (painting rooms, new furniture, fixing the air conditioner, etc), and then other random things that we couldn't categorize, even after all of the checks were in order and labeled.

Right now, I'm mostly concerned that my mom will not have enough money to live for the rest of her life. I'm hoping that once my dad is out of the financial picture she will let me sit down with her and plan a serious budget. Because currently my dad won't openly discuss all the finances with her (he calls her stupid, etc, and doesn't have patience to explain to her the reality of the situation. He just says "spend $2,500 a month and no more") so once all that's left is my mom and all the banking accounts, I can help her seriously budget. It's really not a place I'm comfortable being in. My father has always been set on leaving behind money for his kids, when I talk about my own retirement savings he would say "why are you saving for retirement? You'll be fine with what we will give you and your sister after we're gone." Or something along those lines. I didn't listen to him, I've been saving, but it just is unfortunate that in the end, I'll be the one to budget that dream of my fathers out of the picture. I know if my dad was budgeting, he'd factor in what he'd like to leave behind for his heirs. My mother won't do that. Or even if she does, she'd somehow manage to spend it anyway and use it as her yearly cushion. I don't want to have to convince her whether she should save money for my sister and I, that is just an awkward place to be in. That's the least of my concerns, but it all factors into my parents extremely poor financial habits and ability to think about anyone else by themselves when it comes to money or anything else.


Mar 23, 2010

Paying Yourself a Salary

In my last post, an anonymous user advised that I should put all of my income into a business account and pay myself a set salary out of that account. While that is not a terrible idea, I believe it is not the best approach in my situation. Mr. or Ms. anonymous, I would like more information on why you feel this is a good idea, based on the following information. And for the rest of you, I'd love to hear your opinion in a comment about if this concept would make any sense.

If all goes as planned this year (which, chances are it won't)...

1. I can earn up to $120k net for the year in a W2, hourly position.
2. I can earn up to $40k in 1099 freelance income if my side projects remain consistent throughout the year. I'm thinking it will more likely be $6k.
3. I may earn much less than this on either or both areas of my income streams.

The concept of putting all of my earnings into a business account and then paying myself a salary makes sense only if all my income were 1099. But there is no benefit to setting up an LLC and a business account for my business income if my major source of income is now W2.

Thus, instead, I'll be looking for ways to shelter as much of my income from taxes as possible. That means in a way I will pay myself a set salary for "spending money" and the rest will be put places that I can't touch now or for a while, unless absolutely necessary.

Do you think this is the right way to go about this?


Mar 18, 2010

Dear Investing Newbie and Simple in France

Since both of you left such great comments on my last entry, I thought I'd follow up in another entry to clarify, while still being vague enough to hopefully keep anyone who finds my blog from knowing who I am. (It's getting tougher and tougher to do that while being 100% honest on my earnings!)

Simple in France recommends that, since I don't know exactly what my income will be over the year, I budget for one that's "shoestring" and save everything else. There's no harm in saving. And I agree. I have a feeling my income this year will double, if not triple the $60k I was making last year. Yes, there is a chance, albeit a small one, that I could even hit $200k. I could also "hit" $10k - if for some reason after a week into the job they end up hating me. Not saying that's going to happen, but anything is possible. And it's so easy for them to say so long when you're not a full-time employee. I can't count on anything.

I'm trying to continue my goal of having diverse income streams, but it is difficult to maintain more than one job when one is a major 40+ hour-a-week commitment. The good thing about being on an hourly contract is that you're pretty much limited to 8 hours a day of work. That means you probably won't be working 60 hour weeks at one job, or if you are, you're getting paid for those extra hours. So that leaves room for picking up (or keeping) other freelance gigs. My biggest concern, though, is that I'll be asked to work those extra hours and I'll struggle to keep the balance of my diverse income streams. At least when I'm in a contract position I feel like it's fair to accept other work (unless the contract is salaried and specifies they own you for a set period of time). I never want to only have one income stream, I know I can be laid off at any time, or a company could go under. I don't care how much I'm making at one job, I need something else that at least covers the rent and minimal food just in case. At the moment, I have a part-time contract gig that moved from 8 hours a week to 16 hours a week recently. That pays slightly less than the 40 hour a week gig, so if I had to chose one to keep it would definitely be the 40-hour-a-week one. But there's no harm in working 4 hours extra 4 days a week (or spreading out my time even more) to save more money. And that's my goal. Save as much as possible this year. I'll probably -- best case scenerio -- get myself into a ridiculously high tax bracket, have to pay self-employment tax on some of my income, and end up earning not as much as I could have at a lower-paid, full-time job with benefits. But, I think it will work out ok, as long as I can keep this all going. And I'm going to make this work somehow. To prove to myself I can. And to save a lot of money. Because right now I'm either look at going to grad school or buying a condo (???) in the next 1-2 years and I don't mind keeping my spending low to increase my savings.

Investing Newbie asks if I know what I'm guaranteed as income, and that I should budget based on that. Yes, and no, is the answer. As stated above, in a contract role "guaranteed" for only half the year, the most I'm guaranteed for -- even if I am amazing at my job -- is 6 months worth of work. They also are perfectly free to tell me that they don't want me to come back in to the office at any time. They could even tell me that before I start my first day. I doubt they will, but I accept weirder things have happened. Then, my other income streams, while smaller, are a little bit more predictable. I have a blogging gig which, at the most, can bring in $500 a month. That I've been doing for a while. I got behind badly in Feb but did well in March. I just need to get up early and spend about 30 minutes to write a blog post for 20 posts a month. It's totally do-able. That gig is probably the most stable of them all, but the company that runs the blog could chose to shut it down at any time. Then there's the 16-hour-a-week project I noted above, which is sort of guaranteed at 16 hours per week for the next two months. It's with a stealth startup where I'm doing some writing work that I can basically do whenever (ie, night time, after work, weekends.) That also could end at any time. So the simple answer is -- I have no idea what my gross income will be for the year. There's a good chance it could be way more than I've made in the past. There's a chance it will be less. I don't know what to plan for. Other than to plan for a little bit of income ($35k about) and budget off of that.

Investing Newbie also writes that I could open up a plain savings account with a good rate and save up money for 40+ years or to invest if I feel comfortable with it. I do have savings accounts and investment accounts, and I plan to split my earnings among those accounts. Since I started working, I've put $5,000 a year into my Roth IRA, but if the best-case scenario works out this year, I won't qualify for a Roth. Again, not the worst problem in the world to have, but I would like to put money away for retirement. I also don't want to put everything away for retirement because -- as I said -- I either want to buy a house or go to grad school in the next 1-2 years. So where does that savings go?

Up until now, I've been fairly aggressive in my Sharebuilder investment account, in terms of stock and ETF purchases. I started slowly and was down a lot (like everyone else) when the markets crashed, but kept investing when they were down (bought a lot of a few companies I thought were on sale) and am now up 25% and have an account worth about $10k total. Still, I only invest $100-$400 a month. It would be a lot harder to put $2000 a month into my volatile stocks and ETFs. I also have a Vanguard account (besides my Roth IRA) that's just a mid-cap index fund. It's doing ok. I could put more money into that (or open up another taxable Vanguard fund) but I'm still a little nervous for shorter-term investing. Granted, I'm young enough where if my networth goes down I can recover. Maybe I'll have to take out a bigger loan for grad school or not buy a house in the near future, but it wouldn't kill me. I'm fine renting and living with roommates. I don't need a lot to be happy.

So, yes, I could just put whatever extra money I make over my shoestring budget and put it directly into a basic savings account or FDIC-insured laddered CDs. I'll probably lean more towards investing anything over my monthly expenses. I think for the first time in my life I'll have access to a 401k plan (though I'm not sure how good it is) so it probably makes sense to put some money away pre-tax. It's SO HARD to figure out if that makes sense, though. If my yearly income is less than $80k (or whatever the cut-off is for a single person this year) I am better off funding the Roth IRA first. But if it's more than that, the 401k makes a lot of sense. I probably won't know until next December which of those will be accurate. I guess there are ways to fund one thing and move money around until the year is over, but that's a huge pain. I'd like to just pick something and stick with it. The Roth IRA has been the no-brainer for the last few years, but it sounds like I should take advantage of the 401k while I have access to it.

Other places I could stash my cash? The 529 plan (which has, like, $1200 in it right now (enough for - what - one month's worth of MBA textbooks?) which is only free from federal taxes... I could buy a condo now and give up on my grad school dreams... and also trust that I can continue earning some decent income for the next 50 years, I could put about $2500 more into the HSA plan which I may or may not continue... I'd have to get it in there before I cancel the insurance, and pay a yearly fee forever to keep the account open, but that's a place where I can put pre-tax money and not have to pay taxes if I use the money for health expenses... and that makes more sense than the FSA which is also available with my new employer. I don't like the idea of FSA's since you lose the money if you don't spend it at the end of the year.

Anyway, I'm going off topic. I'm in a good situation right now all things considered, but the way I look at money, and savings, is drastically changing. I don't understand how to lead a six-figure lifestyle. Especially one that isn't guaranteed to be a six-figure lifestyle. It's fine to live this year like I'm making $35k and ignore anything above that I make. But when in my life will it be ok to stop and live a slightly nicer lifestyle? Go for a massage every once in a while? Buy a good road bike? Get a better car (mine will die soon, so I will need to invest in another car anyway)? Sign off on a condo or small house? All these luxuries... at what point in income and income stability do I need to be at before it's ok to spend more than a shoestring budget? Or is the key to never do that, no matter how much money you make?


Mar 16, 2010

Shooting Through My Glass Ceilings

This year has been full of fiscal ups and downs. After making a solid salary at a full-time job, I was laid off in February and ended up picking up part-time gigs which, while paying great by the hour, didn't cover enough hours to meet my prior salary. And then I interviewed for a bunch of jobs and got a few offers. In the end, I landed a six-month contract with very strong hourly pay.

It's almost funny how just a year ago I was writing about how what I was making then would give me so much extra to save, and then I quickly found that I while I had money to save, the cost of doctor's bills and life kept my savings per month low. And now, looking at the next few months of income, I'm more excited than ever about helping my networth move out of being stuck in $35k. My goal, by the end of 2010, was to have a networth of $50k. Now, I'm aiming for $75k.

What will that take? Mostly, being amazing at my job, which I plan to do. Also, I can't look at the number I'm taking home and get as much out of my bank account into savings accounts before I have a chance to get near a mall or travel website.

I'm not going to complain about how much I will make because I'm thrilled that I'll be able to save for grad school and a house (MBA, here I come), but it makes savings a lot more complicated. I don't know how many of you can relate because there's a chance this year I'll hit six figures. I'm not sure it will happen -- I will only really know for sure next winter. It's certainly possible for the first time in my life.

With that type of income I move out of the average American household and hit what many people in America would consider rich for a single person. In the least, there's a chance I will make over the limits for a Roth IRA. For the past five years my Roth IRA has been my primary retirement savings vehicle. I'm not really sure where else to save money for retirement. I might be able to set up a 401k but it's going to be kind of messy to do that since I'm a contractor. None of the companies I've worked for in the past have had 401k funds, so if I am able to participate, even without a match (there won't be a match), I will. I probably should put a good amount of my monthly income into a 401k if I can open one. I can always max out my Roth IRA at the end of 2010 if I don't end up making the higher end of my potential earnings. Or a traditional IRA if that makes more sense. I also may put a lot more into my 529 plan for grad school, though I'm nervous about putting too much in that account as there's a chance I'll never end up going to grad school. I do want to have children, so I'd like to think if I don't spend my 529 plan for me, I can pass it on to my children one day. But that's a long time off, it's tough to put more than $100/month in that account without worrying about wasting money on that account. I can always take it out for something else, but I'll have to pay a fine. And in my state the money put into that account is only tax deductible on the federal level, not state. Still, it's probably worth it this year to put a larger amount than normal in that account, since I may not have access to a Roth IRA.

It is hard to plan when the amount you may make over the year is not set in stone. On one hand, it's kind of exciting. It makes me want to work extra hard to prove myself and earn as much as possible. As I grow in my career, my blog title becomes more and more misleading. I'm not going to be overconfident with this as so much is up in the air. When I'm 10 years out of undergrad (in 2015) I will write a post on how my income fluctuated over the years. I'd love to know what will be in that post, but I like being surprised by life too.


Mar 15, 2010

Negotiation Update

Success. While the hourly dollar figure I quoted was considered way too high, I did get them to go $5 over the top of their hourly range. And, while the officially paperwork isn't in my inbox yet, it sounds like the job is mine. And I'm beyond ecstatic. Ok, I'm nervous as all hell, because I need to prove myself to the company in a role that isn't easily defined and where success isn't an obviously calculated metric. I will do whatever I can to be successful, but in the end, there's a lot to the success of my job that is out of my control.

For the first time in my life, I'll be making a real solid annual salary (albeit one paid hourly and that could be terminated at any time, with a contract end date looming from the start.) I'll be making the type of money where I could see being able to raise a family on, even though as expensive as this area is I'd still have to rent and live on the cheap. Beyond the hourly pay, the opportunity is great for my resume and future employment or graduate school prospects.

So maybe getting laid off wasn't that bad after all. I was in a start-up going nowhere fast. I didn't want to jump ship, though I had a few recruiters try to snatch me with alluring emails of positions with more stable companies. But it was at the point in the company where my role was no longer needed for the direction the business was headed, and I was let go. It was all very civil and as positive as a lay off could be. Still, I was unemployed, and my freelance income did not match my annual salary -- more due to the limited number of hours I could pick up than my actual hourly rate, which was about what I'll be making now, except now I have a guaranteed 40 hours per week and the self-employment tax paid for by the employer.

On one hand, this all feels surreal. Just last week I felt so hopeless and now I'm almost on top of the world, but also stressed, because there is a lot to prove every day in this role, and a lot of it I will have to define myself. While at my last company I showed up in jeans and a t-shirt, here I will have to dress a bit nicer. I'm sure jeans and a nice shirt are ok but I really want to dress to impress every single day. I'm usually too lazy to blow dry my hair and it's just a wavy poofball in a ponytail but I think with the increase in income I'm going to get a nicer hair cut and spend the time blowing it out every morning. I'm going to make sure I look professional. And while I let my tongue slip at my previous employer, being too honest with my opinions, this time around I'm going to be very careful with how I communicate. Because so much of how you're viewed is not so much what you say or your ideas, but how you say them, and how you make other people feel (esp your superiors.)

In any case, this is huge for me and I'm ready for it. I'm excited about the increase in income to add to my savings and bump up my networth this year, but I'm even more so excited that I did this. I got this really awesome job because I happen to be very qualified for this specific position. It feels great to know that I've earned this. Now I just have to keep earning it, and prove I'm worthy of being hired full time when my contract expires in the fall.



Breathe in. Breathe out.

This is an exercise in staying calm while all cards are on the table, lying face down. You study the deck, eyes squinted, imagining how if you can see clear through to the other side, this game would be so much easier. Instead, you breathe. You wait.

There are a few different jobs I've interviewed for over the past month. Some are better than others. A few pay pretty good salaries. There is one I really want. The job requires a ton of responsibility. Global travel. It's a great opportunity for me from every angle, except that it doesn't provide benefits or paid time off, etc. It's hourly. But that shouldn't matter if the hourly price is right.

And that is where the cards are lying right now. Except in this negotiation there is a mediator. Someone hired for the sole purpose of finding out what my cards are, bringing them to the company, and deciding if I'm worth what I'd like to make.

I did what I normally do and asked for a range they were looking at first. The range was somewhat low, although not necessarily lower than I expected. I inquired if it would destroy my chances of getting the position if I asked for more. Are there other candidates? The answer - yes, there are two other candidates who made it to the final round. But they like me the most. They seem to really want to hire me. That's great. I think they're right because I'd be really good for this job. Given my normal lack of confidence on these sorts of things that says a lot.

But what I don't know is where those other two candidates stand. Am I really the top candidate? Are they willing to negotiate with me until we settle on a fair hourly rate? Or did I high ball too much? Too little? It's hard to say. It's hard to figure out what is comparable to an annual salary when you drop all benefits. Even my last job, which paid an average annual salary, ended up being worth more with a severance, stock options, conference fees, and a free computer. Those stock options, in theory, could one day be worth even more. In a contract position all you get is your hourly salary. So why not try to get a fairly high rate?

I'm just not sure what counts as high and what counts as "she's crazy for asking for that much." On one hand, there's a part of me that feels like I did that right now, on the other hand this is a short-term project and if they don't like me or think I'm worth my rate they can easily terminate me at any time, so it's not like they have a lot to lose if I'm not all that and the bag of chips they think I am.

Right now I'm trying to figure out what the lowest I'll go is. The range I was quoted seemed a bit vague. My title isn't generic, so it's hard to say what level it falls under. Even researching what other people are paid in this position elsewhere is tricky, there just aren't many specialists in this type of role out there. At least not with enough experience to get this far in the hiring process.

I'd really love it if I got a call today that said "ok" to the dollar figure I quoted. I have a feeling they're going to come back with something lower. How much lower... I don't know. I really hope they wouldn't say "you're too expensive for us so we decided to pass." That would be the worst thing to hear. Yes, there are other opportunities. Yes, it wouldn't be the end of the world. But I really want this job. It would be so good for me. And I think I can really make a difference in this organization. Show my stuff, so to speak. Move to the next level.

God, I hate waiting. I was told they will get back to me fairly quickly. Sounds like they want to hire someone yesterday. It would make my year if they just said yes, and gave me a start date. Fingers crossed for the best possible outcome when our hands are flipped face up.


Mar 13, 2010

W2 Contract Negotiation Questions

After two months of unemployment I feel like I've gotten to a good place where I'm in solid running for two positions. One, which was fairly difficult to be offered -- is the one I'm leaning towards. Not just because it was hard to be offered it, but it has by far the most growth potential of the two positions.

However, the "better" position is a W2 Contract role. That basically means full-time without any benefits (paid days off, health, etc) except the employer's part of SS insurance, Medicare, and unemployment insurance. So, ultimately, the W2 position needs to pay a lot more to equal what a salaried position would pay, and at this point I have no idea what they're planning to offer, or how to go about this negotiation.

Now, normally a W2 Contract position would start with an Agency and they'd farm you out to a company. Most of what I've read about W2 Contracts has to do with programmers who have specialized skills that these agencies can sell for short-term contracts with high hourly rates. The agency then basically gets the programmer their job, and in exchange they make 35 - 50% on top of whatever hourly fee the contractor is making, all paid by the client. And it sounds like the client has no idea how much the contractor is making and what the agency makes of the fee they pay... which just seems like an uncomfortable client-contractor relationship. Or -- does the client (ie the person who would be your boss) never find out what you make? And if that's the case, how do you ever get promoted?

W2 Contracts often have non-compete clauses, from what I've read, which means you can't get hired by the company you're working for within x number of days after the contract is considered complete. So does that mean you screw yourself out of a potential full-time job if you chose to leave the contract? It really isn't clear from the Internets.

The thing is, the W2 Contract makes sense for a programmer. They go in, they do their job, get a project done, move on, and have many other companies willing to hire them for short-term gigs. My position is very different, it's in marketing, and I don't really view it as a contract role, other than the fact it is because that's the way big companies hire around here.

I've spent some time working the numbers to figure out what my last job was worth with benefits for the year, and it really is a lot on top of the salary. Getting paid holidays is nice too.

The thing is, I figure to make approx what I made at my last job on W2 contract I'd have to make at least $45 per hour (equiv in my calculations to about $60k with full benefits). But because of the responsibilities that go with the potential role, I believe the position (regardless of who is hired in it) deserves more than that. It's a little hard to figure out my full compensation at my last gig because it was at a startup where in theory a good amount of my pay was in stock options which, if the company succeeded, would be worth a lot. Not sure how to value those in determining my pay at my last job. Additionally, this job will require a much longer commute and basically take over my life. So what is fair compensation for this? Taking myself out of the picture and just looking at the role itself, the dollar figure I come up with is a lot higher than $45/hour. Additionally, I've been signing short-term clients for projects and they're paying anywhere from $50/hr to $100/hr depending on the assignment. And that's more the range I'm looking for. I'd think the higher end of that makes sense for this company, but again, I have no idea what they are paying for this role. I managed to avoid the salary talk all through my many interviews so I'm going into these negotiations blind.

I'm speaking with a representative from the hiring agency early next week to discuss fees over the phone. I prefer salary negotiations in person. Additionally, I didn't interview with the hiring firm, nor did they find me for the job. I was referred internally by someone within the company and have interviewed with people in the company. The agency has, thus far, just scheduled the interviews. And now I have to negotiate my rate over the phone with someone I've never met. Normally in negotiations I'd have a good idea of what the other person wants. In a startup it was very clear because basically ever dollar saved was another second the startup could survive, so it was about more than just salary. Here, though, what does the hiring manager want? Are they given a range to negotiate with? Do they negotiate?

Also, I'm not clear I'm offered the job yet. I am the top choice, clearly, and was told by the agent that my interviews went very well and everyone likes me. So now it's time to talk fees. I'm nervous about what this means. I normally would let my employer put out a range first if possible, but I'm not sure if doing that this time around would hurt my chances of getting a good rate. If I understood what the agency wanted... (ie -- if they get 35% of what I make on top of what I make, isn't it in their best interest to negotiate a higher hourly fee that the client is willing to pay for -- or does the agent get paid more if they are able to negotiate a lower fee? Or is there no negotiation at all?)

Anyway, if you have any insight into the W2 Contract Negotiation situation, please do let me know what you think about all this.

Well, the other potential job is