$$$ KPO and CZM $$$: Our Salary 2020 + Passing Up Promotion

Saturday, March 6, 2021

Our Salary 2020 + Passing Up Promotion

CZM and I were given our annual compensation/new salary and bonus recently. It was mostly sad news given that 2020 was a crazy year where the whole world went into lockdown. Anyway, CZM had a 2.5% increment and a 1 month bonus. As for myself, I had NO increment and a 0.85 month bonus. However, considering that I changed company in June last year and had already gotten a 16.97% increment, I should look on the bright side and be contented with what I have as I am pretty sure I will not be getting such an increment had I chose to stay with my previous company.

CZM is on track to getting her next promotion next year so there's something to look forward to. Hopefully, she will get a double-digit increment? Otherwise, she's not going to be motivated enough to continue to work as we are close to retiring her already (within the next 5 years)! Hahaha. Shall elaborate more later.

Surprisingly, my manager also brought up the possibility of trying to get me a promotion next year too but the thing is I am no longer interested in climbing the ladder. I enjoy what I am currently doing and the workload is manageable. However, attempting to get promoted would mean an increase in responsibilities and workload in order to get the additional visibility which means more effort/time from my end and more room for mistakes. I can already feel the increase in workload and meetings I was sent to attend/lead in order to get those visibility. It's so ironic because previously, I would be asking my ex-managers if I can get promoted the next year and what do I have to do to get it. This year, I did not plan on asking and it was presented to me. 

I remember when I first joined the bank (6 years ago) and one of my colleagues who was just an associate (my current title) was awarded a 20 years long service award. At the back of my mind, I was pretty judgemental and was wondering how can one work for so long but not get promoted? Now I can totally relate and understand that it was actually by choice. The idea of passing up promotion is generally perceived to be negative and I need to communicate it tactfully that I will still do my best at work (at the end of the day, I still need to ensure that my performance remains as one of the better ones in order to get a decent increment and bonus) but I have no interest in moving upwards with more responsibilities (attending more meetings, working overtime, etc.). I discussed this with CZM and she agrees with me too (considering that she's probably biased and just wants me to spend more time with her and baby. lol).

With CZM understanding and support, I communicated to my manager that I would like to pass up on the promotion a week later because I would like to prioritize my family given that we just had a baby and I feel that it is not a good time to put in the additional effort/hours to get the promotion. In addition, I feel that I am not ready to be promoted to the next level so I wanted to let him know early in order not to waste his effort in grooming/providing me with the opportunity/visibility and that he can give it to the others in the team that wants the promotion. However, my manager said I should not be selling myself short and we can change it to a 2-year promotion plan while we continue to build up my visibility with no expectation in additional hours/OT. I can tell that he is genuinely concern/cares about my personal development/career growth when he provided me more advice that I'm at a crucial point of my career where I need to decide if I want to go technical in-depth or more broad/managerial role and to do that, I can't just be doing BAU/daily routine kinds of stuff. I need to start thinking and plan my career path. The thing is I actually enjoy doing BAU because things are more "predictable" in nature and a typical career length for the majority is about 30-40 years which definitely requires careful planning while ours are just 10-15 years. We are happy as long as we do not need to OT/have night calls. Anyway, I think it sort of backfired and CZM is laughing at me now cause I still need to do all the additional work for more visibility but no chance of promotion now. lol.

Our initial plan/forecast was to have a $1 million portfolio generating a 5% yield by age 40 to retire early but the forecast has been accelerated by the increase of our salary as well as the use of leverage to invest - Leverage Performance 2020. I have just updated the spreadsheet in Our Goals and the latest forecast shows that we will have our first $1 million portfolio by the age of 33. However, with a baby now, our expenses have increased beyond what we had forecasted and we are not comfortable retiring with just $1 million. Hence, the plan is we will/can retire CZM first once we hit that goal and I will continue to work till at least 40 or until we are extremely comfortable/confident things will work out. After all, it is almost impossible for our passive income to exceed/replace our active income and the decision to give up our active income will not be an easy one to make.

With that, both our salaries have increased by >100% since we first started to work a few years ago. 164% increment for myself since 2015 and 170% increment for CZM since 2013. These increments are achieved from either changing company or getting a promotion. The percentages are meaningless without an actual number but the whole point is your salary increment isn't going to be linear and you should work hard to increase it especially at the start of your career when you still have the energy and time. The Woke Salaryman published this article which I found it to be pretty meaningful - The Single Mistake Everyone Makes In Their 20s Trying To Build Wealth. Focus on the big win, increasing your salary if you are young. Seedly has this pretty comprehensive salary guide - The Ultimate Salary Guide For Singaporeans. For those that are below median income, do take some action to get yourself above it. Once you are above median income, work towards getting $6k in order to beat/maximize the CPF "game".

Salary Spreadsheet
I have a spreadsheet to project our salary increment and track the actual increment. Based on our starting salary and an assumption yearly increment of 5% (I thought this is conservative but CZM thinks otherwise), it would have taken me 20 years and CZM 20 years to reach our current salary.

Ministry of Manpower (MOM) published a summary table on Singapore Median Gross Monthly Income From Work (Including Employer CPF Contributions) of Full-Time Employed Residents. For the year 2020, it is at $4,534 including the employer CPF or $3,778.33 without employer CPF. If you compared it against the previous year, it actually dropped. I'm guessing that is because there are people that actually took a pay cut due to the impact of COVID-19 on businesses.

I will be using the 2016 median income ($4,056) as an example in the spreadsheet (because it was created then and I am lazy to change the numbers), excluding the employer CPF portion ($3,467) because who does that! Imagine people negotiating with HR for a higher salary with an X% increment based on their current salary including the previous employer's CPF contribution. lol.

The cells highlighted in yellow are for you to input manually, everything else is formula linked. The spreadsheet projects your yearly salary based on an assumption of 5% increment. The "Salary Projection" projects based on your first drawn annual salary while the "Revised Projection" projects based on the latest "Actual Salary" specified by you. As you can see, it would have taken this imaginary person 6 years (31-25) to reach his current salary (27-25).

You can get the google spreadsheet here - $$$ Salary Projection $$$

All the best to our readers! Hope you get a nice increment and bonus!

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  1. Your projected salary curve is the wrong type (exponential).

    It should be logarithmic curve, where salary increases at a steep gradient for the first 15-20 years and then tapers off i.e. flatline.

    In other words, the % increase in the 1st decade is higher than the 2nd decade, which is much higher than the % increase in the last 2 decades of a typical working career. Instead of a constant 5% (or X%) increase throughout.

    Your actual salary curve is following the first portion of the logarithmic function so far.

    1. Haha. Good point. Mine is more simplified I guess. Just change the numbers in the spreadsheet to whatever you think is more suitable/realistic for yourself :)