Don’t Accept a Raise Unless It’s in Stock Options

I met a bank teller many years ago who said that her husband turned down a raise to become a regional manager at another bank. The raise, net of income tax, was about $5,000 annually. He calculated that this would be $20 more money per day, for significantly more time and energy being put into the job. He was very smart. 

Outside of jobs which pay disproportionately large commissions, such as high-level executive positions at Fortune 500 companies (which include stock options), actors, entertainers and athletes who are performing at the highest levels, it’s too tough to find the connection between raises and becoming wealthy. 

Empirically, there seems to be a connection between a raise and poorer quality of life…unless your raise is in stock options. Stock options can reward you disproportionately for your time spent but raises will not.