Comment of the week: Going from $20k/year to $90k/year

Ramit Sethi

On a recent blog post, James left this great comment:

Ten years ago, I was working in a lumber yard. I asked myself, “What do I want my life to be like in five years?”.

I knew two things: that five years would pass, and that if I didn’t do anything different my life would still be the same (ie, I’d still be poor).

I took computer classes. I picked the hardest classes with the fewest students. That would put me in a smaller pool of people with those skills, increasing my value.

In five years I went from making 20k /year to 90k /year. I had to pay for the classes myself, but I’ve never regretted it and I’ve never looked back.

What if you’d done that five years ago? What if you did it today?

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  1. Amy

    Wow. That is powerful – thanks James and Ramit for giving us something to think about. Sometimes you have to invest in yourself to make more

  2. guinness416

    It’s a good comment alright. Several times I’ve read that people overestimate what they can do in a year and underestimate what they can do in five years, which sounds right to me but I always find it tough to plan out that far.

  3. Ben

    Ramit & readers,

    Not trying to brag here, just being honest. I make $90k a year now doing the whole computer shtick. How I can identify the next corresponding jump (say, doubling this)? My friends are going back to school for an MBA, a JD, etc, but I’d like to consider options that don’t put me back $300-400k in tuition, expenses, and opportunity cost.

    What would you recommend just for exploring? Informational interviews? Career coaching? Particular books?


  4. Battra92

    It’s a very good point and definitely one to explore.

    I work in desk side support and telecom for a utility company. My boss has told me before that work would pay for me to take telecom classes on work time so long as they aren’t sending me far away. I’m also debating on also taking A+ and Net+ and Cisco classes just to increase my worth (it’s more that I’m not sure which road of my career I want to go down.

    My question to you is: what are the best ways to find such courses and such? I’ve asked some of our vendors and they, not wanting to lose us as a customer are too hesitant to give details. What do you suggest?

  5. Elijah M

    I spent the bulk of my 20s chasing a livelihood as a musician, and realized that while my friends had been reaping the financial and creative rewards of the first Internet boom, I had developed one skill (musician) that actually cost me money to use, and another skill (waiting tables) that enabled me to subsist and nothing more, while slowly killing my soul. So at he age of 27, I got a job as an admin at Northeastern University. It didn’t pay well, but it allowed me to attend 12 classes a year at night, free of charge. Since I had taken on the equivalent of a full-time class schedule, I was eligible for Stafford loans, which complimented my decreased income (and payed off much of the debt I had incurred in my previous career). Five years later, I finished school and got a job that almost tripled my income.

    Equally important: I enjoy that job as much as I enjoy playing music. I don’t know how relevant this was for James, but when I settled on a degree program at Northeastern, I didn’t think all that much about what I was going to earn when I was finished. I just chose the program that had the most interesting classes. I probably make less money than James, but I also find it really easy to supplement my income with an extra 10-20 hours of freelance work every week. I don’t think I could handle that if I didn’t love what I do.

  6. Bear

    I am in the same boat right now. About two months ago I realized that my life will be exactly the same next year if I don’t start doing something different. I stopped my normal routine and just focused on getting my web marketing consultancy off the ground. My friends and family have no idea what my service is or does, and don’t understand why I can’t hang out anymore; but a year from now I know I’ll be in a much happier place professionally and financially, and that the sacrifice was well worth it.

  7. Tina

    AHHH, I love this post! I’m doing this with my life. I needed a push in that direction though and the push was that I got laid off from a job I loved but knew wouldn’t give me a lot of profit. Now I’m going back to school to gain skills where I will most likely make more money than my ex-job (I say this because it’s a proven statistic, I’m going from artsy field to health care specialized if I go for my master’s). I’m not only going for the money though as I’ve been interested in this other industry for a while now, but my point is that I know this is an opportunistic~ time in my young 20s to carve out time for school again and reap a higher income in the end.

  8. Pev

    This is very true, and very inspirational. Now, all I need is a good idea that will make me 6 digits.

  9. Writer's Coin

    My favorite part of that post?

    What if you’d done that five years ago? What if you did it today?

    Forget about what could’ve been—what can you do about it now, today? That’s the important part….

  10. mike

    Beautifully written post! Four years ago, I moved overseas at the request of my employer. That move alone accelerated my salary level by at least a decade (ie – it would have taken me 10 years to get to where I am now, only 4 years after the move). As a side benefit, my wife, kids, and I are experiencing a different culture (way different!), traveling around parts of Asia we thought we’d never see, and putting away short-term and long-term savings at a much improved rate.

    @ Ben (above comment) who asks what he can do now to make the next big “jump” in salary: If you’re already near the “ceiling” of your job’s salary scale, look for diversification in income streams. Keep your day job, but consider taking some of that $90k/year and investing in the stock market, real estate, or a start-up/business opportunity. In future years, the “passive” income stream may be enormous compared to your current $90k.

    As a side note, passive income makes up about 4% of my current net income. In 5 years, I’d like to see it closer to 10% or more.

  11. RYM


    what do you suggest about the course to get to that next stage! Should be a gradual pace, plugging away a little bit every day to get to that next level, or should it be like halting everything and doing all of it in a go!

  12. Big Al

    I am in the same situation at the moment. I’m currently a tech lead for an advertising agency in downtown Chicago. I essentially almost trippled my salary from 38 to 90K/year by knowing the right people and switching jobs at the right time. I had 2 job jumps going from 38k after graduating from college to 65k after 7 months, then 68K to 90K after 1 year. It’s been 5 months at the new job and the checks are nice and heavy — netting $5,200 every month (with 5% 401k contribution as well). Financially, I can say I am doing fairly decent.

    I have always been an entrepreneur and at this moment, I’m living debt-free — no car or mortgage (I’m renting at a super, uber low rate). Being single and skimpy, my expense is less than $1,500 a month. After paying all my debts last year, I’ve been building up a small cushion of cash and I am seriously thinking about take a plunge into my savings, pack my bags, and move back home (a much, much cheaper Asian country), then work my butt off on my web service for 6 months. I’m planning to stretch my savings as long as possible since the dollars go a long way outside the US.

    However, as the economy slumps, and I know my job is secured (they can’t fire me, somebody still needs to do deployment every Sunday night, write up proposal for new functional discoveries, and actually implement new code for the web site), and with my level of income, I can really invest in real estate, rental properties specifically. If I stay and do what I’m doing now, I can get at least one properties every year or so. Condos are selling for 75K a pop 5 minutes away from my current place. Save, put 20% down payment ($15K, about 4 months worth of savings at my current saving rate), get the place, rent it out. Rinse and repeat. Essentially, I will be doing really okay 5, 10 years down the road automatically by just keep going ahead and invest smartly.

    However, I’m really, really thinking about quitting my current job and go do what I dream about: working on my own web start up. I’ve been moonlighting for a while but working 12, 13 hours a day can only work for so long. Quitting gives me the freedom of not working, and moving to a much cheaper country gives me the financial power to stay free for longer. I’m thinking about getting ready to do it in May (I need to build up more cash for reservation, at least 20K in the bank to be on the safe side — after closing a 75K condo I’m buying). But quitting means that I may miss the opportunity to invest in such a bargain environment like now. Maybe I’m greedy, maybe I’m thinking too much, maybe I should just close my eyes and take the leap.

    What would you do if you’re in my shoes? In short, I’m 24, single, web developer making 90K/year, ~ $1,500 of monthly expenses.
    A) Keep working and moonlighting (e.g. having no life for a while), and wait till pay dirt; meanwhile keep investing.


    B) save up, pack my back, travel half the world to a much, much cheaper country where with my family is at to work on my start up for 6 months, then figure out what to do next?

    Any comment or suggestion is more than welcome.

  13. Broke Wall Streeter

    It’s not what you know, it’s who you know. I have the same job description today as I had 10 years ago. The difference is I got a position at a Wall Street firm (thanks to a friend). Same job, but an annual income of $124k vs. $48k (avg in the previous 4 jobs). I don’t have an advanced degree, nor have I taken any classes on my own. In my opinion, networking and reputation is more important than education.

    Only get an MBA from a top school. If you can’t get in, don’t bother if you want to work on Wall Street. If you’re a career changer, you need a specialized advanced degree anyway, so a MBA doesn’t help you unless you get a dual degree. Too much time and $ there. For IT, specialize in 2 related fields. IT Security and Risk Management. Business Analysis and Project Management. Windows/Linux and SAN Engineer. Cisco LAN/WAN and VOIP/Call Manager. This way, if there are any cuts in your dept, they’d rather keep you to do 2 jobs and work you until tears, than cut the person that can’t.

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  15. Evan Goncalo

    In comparison, anyone that works hard, and dedicates themselves to moving upwards can do this… even without taking “advanced classes.” My success has been largely through networking. I just turned 21, have an associate’s degree (in an unrelated field), yet I am making 75k a year via salary, not including my other perks. I’ve worked my butt off in every job I’ve held, made plenty of friends in the industries I’ve worked in, and built up a broad network of internet contacts on websites like LinkedIn. I’ve never joined a company without a connection, and my last three jobs have been brought to me. I’ve been working full time in tech industries since I was 18, and have taken classes at the same time. I went from $8.50 an hour to 75k a year in three years… anything is possible. All that matters is you work hard, and make connections.

  16. John

    5 years ago I was making around $75k per year. Today, I’m making over $225k per year. Sure, the salary from my day job has increased a lot, but the huge surge has been from starting my own business, which my wife (who wanted to stay at home with our kids) and I run part-time. And it’s not slowing down.

    This isn’t meant brag, but to inspire. Honestly, the idea wasn’t anything ground breaking. What made it work is persistance and a lot of hard work. I’ve actually tried to teach or partner with friends and family, and they usually give up because they can’t or don’t want to keep up with the work. This stuff isn’t easy. But I’d rather be working on growing my business, improving my job skills, etc… than watching TV.

    Ramit would approve of this, we’re now saving most of the increase.

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  18. Su Prieta

    It really is an inspiration to read these comments. I did everything in the reverse. I went to a top law school in my twenties and am not earning $100+K as a business consultant.

    I went from lawyer, to consultant and am now looking out over the next five years of my life and am planning to phase out my corporate livlihood in favor of owning my own business and exploring other alternative income sources. My goal is to be untethered from an office by the time I have children (hopefully soon), while also being financially independent.

    My only downfall is that while I am able to build savings and my 401(k) (12% of my salary), I am sitting on about $90k in school debt. So, the next five years is as much about debt reduction for me as financial independence.

    If anyone is thinking of taking up university study… I strongly urge you to forgo loans… there is alot of grant money out there to take advantage of if you look hard enough.

  19. prospero

    nice article, but I think one has to choose the right subject / course to be so succesful. It includes motivation and alo luck ! but nevertheless, be patient and be motivated, then you’ll reach what you want ! good luck !

  20. Dee

    Teach me! I have been in my career for 22 years and while it has been good, I am looking for new challenges and would love to run my own business vs. work for someone else. I’m serious!

  21. John


    I’ve owned a few companies, and this is the first one that has really made money. I’m a firm believer in doing, having suffered through many years paralized because I didn’t have The Great Idea. So while I’m not expert, I do have some ideas on how to go about doing what I’ve done. But again, it’s more about how you do something versus what you do. I could go into a little more if Ramit wants, seeing as this is his site and I don’t want to step on any toes.

  22. Dee

    Thanks for answering so quickly! I love this site, thanks so much Ramit~
    Could not agree more John, on the importance of doing things the right way….over the years I have had many ideas and not acted on them, only to watch others succeed while I plugged away. It is not that I am not successful, by most standards I am, it is just that I want more 🙂
    Want to learn more, grow and contribute, because my current position is limiting in that way and I also want more freedom later in life for myself and my husband.
    If Ramit does not want more discussion here, I totally understand, but I am all ears!

  23. Dee

    Tell you what you can just email me, that way no toes are stepped on..

  24. James

    How I figured out what to go for:

    I searched for job openings that excited me. Ones that made me think, “Wow, it would be so cool if I could do that.” I wrote the key hard and soft skills into a list.

    I kept referring back to the list, to remind myself of where I wanted to go and the skills it would take to get there.

    How I got there:

    I put my key goals and thoughts in places where I would see them every day. I made sacrifices. I refused to give up.

    The steps I took created opportunities. If they aligned with my goals, I took them. The opportunities were small at first, but I often said “yes” when no-one else would. My efforts helped me to cross paths with people who presented yet more opportunities.

    Everything I did was with an eye toward increasing my market value, in line with my life values. The pool of people with my skill set became smaller and smaller. Eventually, I was presented opportunities to write books and teach others the skills I had developed.

    What’s next:

    I’m not yet where I want to be. I still gather “dream” job and life descriptions. I still have daily reminders of what’s important to me and the direction I want to head in.

    I continually learn and practice the skills needed for my next steps. One of those is managing my money better, which is why I also read Ramit’s blog.

  25. John

    Dee, it’s not that complicated. Of course, I’ve learned a lot of things along the way, but here are the keys I’ve found. These are learned from online retail, because that’s what I do, but I’m sure parts relate to other services.

    1) Find an industry that is missing something…has a hole that could be filled. It’s easiest to pick something that you already enjoy. To find these holes, pay attention to the complaints you have. For instance, if you’re forced to go to two different web sites for items that work together, there’s an ineffeciency. If you can’t buy a certain combiniation of items, there’s an ineffenciency.

    2) Fill that hole. This is the part where you just have to do something. Anything. The hardest part is taking the first step. Buy a domain name. Build a simple website. etc… Buy some products.

    3) Be efficient. I can’t hammer this enough. I’m brutally efficient. I spend a large chunk of my time making every part of the process easier and faster. If I can do it 20% better than a competitor, I can offer lower prices.

    4) Continuous improvement. Never be satisfied with how well you’re doing. Someone could show up tomorrow and do it better. Add more products. Improve the checkout process. Add a newsletter. Promote promote promote.

    Hope this helps!

  26. Chelsea

    John, thank you so much for your post! I am in my mid-twenties and am just waiting for my great (or even simple) idea to come along. I constantly remind myself to note my complaints, and jot down “effectiveness/efficiency boosting” ideas.. I know that something will come to me one of these days, and then I will really have to get to work!

  27. April

    Wow. That is the simplest, most concise answer I have ever heard in response to the question “how can I get rich/become successful.” Many books have been written on the subject when it really just comes down to be an expert in a field that is in demand. Thanks!