As you all know, I focus most of my attention on spending. I have devoted multiple posts to the psychology of spending and I continue to believe it’s more important than obsessing over investment allocations. I spend less time on earning money, partly because it’s more difficult to generalize and partly because it’s harder to do. It’s easy to spend less. It’s more difficult to make more. Still, that doesn’t mean it’s not a valid option, especially if you’ve already optimized your spending.
Most people making $80,000 aren't stuck there because of external factors. They're stuck because of internal limitations they don't even recognize. While you focus on saving every dollar, you might be unconsciously sabotaging your earning potential through psychological barriers that feel rational but are actually self-imposed income caps.
Something I’ve often discovered when providing career advice is the biggest obstacles to earning more usually aren’t the boss, the industry, or the economy. It's their own mind.
Note: This advice is only relevant to the private at-will market in the US. If you have a union job or are employed by the government, these options may not be available to you. If you work in a tenure-based system (versus a meritocracy), your best option may be to stay in your current position as long as possible.
Why This Matters More Than You Think
Additional annual income accelerates your path to FI if you save the increase rather than spending it, but the psychology of earning is different from the psychology of saving. Earning more requires you to think differently about your value, take calculated risks, and advocate for yourself in ways that feel uncomfortable.
The numbers have been clear. Historically, workers who switch jobs see median pay increases of 10% or more, with job switchers earning nearly double the pay gains of those who stay put. The average salary increase when changing jobs is 14.8%. Yet most people stay in underpaid roles for years, not because better opportunities don't exist, but because psychological barriers prevent them from pursuing those opportunities.
At my first employer, I made $18.25/hour. After four years of positive performance reviews, I made $22.50/hour. That’s a 5.37% raise annually.
At my second employer, I made $56.10/hour. I applied for a new job and the offer paid $76.92/hour. My employer countered with $59.30 to keep me. You can guess what happened. (I took the 37% raise over the 6% one.)
Note: I was compensated on salary, but divided my gross pay by the hours worked to come up with hourly wages.
The Four Mental Traps That Cap Your Earning
The "Good Employee" Delusion: Why Hard Work Doesn't Equal High Pay
What It Feels Like: You believe that doing excellent work will naturally lead to promotions and raises. You focus on being indispensable through competence rather than visibility.
How It Manifests:
Working harder instead of more strategically
Avoiding self-promotion because it feels "unprofessional"
Waiting for management to notice your contributions
Taking on extra work without negotiating compensation
Staying loyal to employers who don't reciprocate with pay increases
Why Your Brain Does This: The "just world" bias makes you believe merit automatically leads to reward. You were taught that hard work pays off, so you assume the system is fair and meritocratic.
The Real Cost: The average raise for staying at the same company is 3-4% annually, while the average raise for switching jobs is 10-20%. Over a decade, this compounds into hundreds of thousands in lost income. The "good employee" who never negotiates or switches jobs can earn hundreds of thousands less over their career than someone with identical skills who advocates for themselves.
Breaking Free:
Document your accomplishments and their quantifiable business impact
Have regular salary discussions with your manager, not just during annual reviews
Build visibility through strategic communication about your work
Set boundaries around unpaid extra work
View job switching as career advancement, not disloyalty
The "Fixed Value" Trap: Thinking Your Skills Have a Set Market Price
What It Feels Like: You believe your current role and skills have an objective market value, and you're probably being paid fairly for what you do.
How It Manifests:
Not researching salary ranges for your role in different companies or locations
Accepting first salary offers without negotiation
Believing you need to "earn" the right to ask for more money
Focusing on job responsibilities rather than business outcomes
Undervaluing skills that feel "easy" to you
Why Your Brain Does This: Anchoring bias makes your current salary feel like the baseline "fair" wage. You also suffer from the curse of knowledge. Skills that feel effortless to you seem less valuable than they actually are to employers.
The Reality Check: The same role can pay 30-50% more at different companies or locations. A software engineer making $80,000 in Indianapolis could make $120,000+ in Austin doing identical work. A marketing manager earning $70,000 at a nonprofit could earn $95,000 at a tech company.
Breaking Free:
Research salary ranges across multiple companies, locations, and industries
Frame your value in terms of business impact, not task completion
Practice salary negotiation as a skill, not a confrontation
Regularly update your understanding of market rates
Remember that companies expect negotiation—not doing it signals low confidence
The "Safety First" Career Trap: Choosing Security Over Growth
What It Feels Like: You prioritize job security and steady paychecks over roles that might offer higher earning potential but feel riskier.
How It Manifests:
Staying in comfortable roles longer than optimal for income growth
Avoiding industries or companies that pay more but seem less stable
Not pursuing leadership roles due to increased responsibility and pressure
Choosing large, established companies over growing companies with equity upside
Avoiding entrepreneurship or side income due to fear of failure
Why Your Brain Does This: Loss aversion makes you overweight the risk of losing what you have versus the potential of gaining more. Your brain treats your current income as a baseline to protect rather than a starting point to improve from.
The Real Cost: The highest-paying careers often involve some level of risk or discomfort. Research shows that wealthy workers are more willing to switch jobs and take risks because they have financial cushions, while lower-wealth workers stay in sub-optimal roles out of financial fear. Playing it "safe" financially often means staying financially stuck.
Breaking Free:
Calculate the actual cost of "safety". How much income are you giving up annually?
Build skills that make you more marketable, reducing real career risk
Start side projects while employed to test entrepreneurial waters
Target growth companies where rapid promotion is possible
Remember that your current "safe" job could disappear anyway
The "I'm Not Ready" Syndrome: Waiting for Perfect Qualifications
What It Feels Like: You believe you need more experience, education, or credentials before you can pursue higher-paying opportunities.
How It Manifests:
Not applying for jobs unless you meet 100% of the requirements
Pursuing additional degrees or certifications instead of seeking opportunities
Believing you need permission or external validation to charge more
Waiting for someone else to "discover" your potential
Impostor syndrome preventing you from pursuing leadership roles
Why Your Brain Does This: Research shows that women often only apply to a role if they have 100% of the listed qualifications, while men apply if they have 60%. The planning fallacy makes you overestimate how ready you need to be, and you conflate credentials with capability.
The Reality: Most employers don't expect candidates to meet 100% of job requirements, and competencies (skills + knowledge + ability) matter more than perfect experience matches. People with impostor syndrome often work extra hard and acquire more skills to compensate for self-doubt, ironically making them more successful once hired.
Breaking Free:
Apply for roles when you meet 70% of requirements
Focus on demonstrable results rather than credentials
Start charging or asking for what you want before you feel "ready"
Recognize that most successful people felt unqualified when they started
Take on stretch assignments that force growth
The Entrepreneurship Psychology: Why Otherwise Smart People Avoid Side Income
Even if corporate advancement feels risky, most people making $80k completely avoid entrepreneurship despite it being the fastest path to $150k+. Here's why:
The "Real Job" Bias: Believing employment is more legitimate than self-employment, even when self-employment pays better.
The "All or Nothing" Fallacy: Thinking you must quit your job to start a business, when most successful entrepreneurs start as side hustles.
The "I'm Not Creative" Excuse: Believing entrepreneurship requires unique ideas rather than solving existing problems better or more efficiently.
The "No Time" Delusion: Spending 20+ hours per week on entertainment but claiming no time for side income.
Reality Check: The average millionaire has seven different income streams according to the IRS, and most millionaires combine employment with side income rather than relying on just climbing the corporate ladder.
The Income Mindset Shift
Moving from $80k to $150k+ requires fundamentally changing how you think about earning:
From: "I hope they give me a raise"
To: "I will demonstrate why this compensation serves both me and my employer"
From: "I don't want to seem pushy"
To: "Advocating for myself is a professional responsibility"
From: "I need to be ready first"
To: "I'll get ready by doing the work"
From: "This is what people like me earn"
To: "I'll study what people earning my target income actually do differently"
From: "Side income is too risky"
To: "Relying on a single income stream is the biggest risk of all"
Your Earning Action Plan
Immediate (Next 30 Days):
Research salary ranges for your role across different companies and locations
Update your LinkedIn profile and resume with quantified business impacts
Identify one skill that could increase your market value and start learning it
Short-term (Next 90 Days):
Apply for at least 3 roles that stretch your qualifications (70% match rule)
Have a salary discussion with your current manager about your compensation trajectory
Start one small side income experiment (freelancing, consulting, digital product)
Long-term (Next 12 Months):
Make one strategic job move or negotiate a significant raise
Build your first alternative income stream to at least $500/month
Develop expertise in a high-value skill that differentiates you in the market
The Bottom Line
You can't build wealth while accepting artificially low income any more than you can build wealth while spending unnecessarily high amounts. Both sides of the equation matter.
The people earning $150k+ aren't necessarily smarter or more talented than you. They've just overcome the psychological barriers that keep most people accepting whatever income they're currently earning. They negotiate, they switch jobs strategically, they develop multiple income streams, and they think of themselves as valuable assets to be optimized rather than employees to be grateful.
Your spending psychology determines how much money you keep. Your earning psychology determines how much money you have available to keep in the first place.
The choice: You can either accept your current income as fixed and focus only on the expense side of FI, or you can recognize that increasing your earning potential might be the faster path to financial independence.
Remember: Every extra $10,000 you earn annually is $10,000 (minus taxes) you can invest toward FI if you maintain your current lifestyle. That compounds to hundreds of thousands in additional wealth over time.
The psychology of earning isn't about being greedy or materialistic. It's about recognizing your own value and ensuring you're compensated fairly for the impact you create. Your future financially independent self will thank you for having the courage to ask for what you're worth.