5 tips to negotiate a pay rise

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What you’re paid vs what you’re worth

It’s probably time we tackle the fun subject of asking for a pay rise at work. Did I say fun? I meant awkward. But the key to being successful is to get over that awkwardness. Instead of feeling like you are just asking for money, look at it in a different light. You aren’t just walking in and asking for money, you are participating in a negotiation over what you’re worth the the company and the value you bring. If you leave behind the shackles of awkwardness about asking for money, and change how you view the situation then you will be better equipped mentally to succeed in your negotiations. With that out of the way lets move forward.

5 tips to negotiate a pay rise

(1) Be worth it

This should go without saying but if you are going to negotiate a pay rise, you need to make sure you are worth a pay rise. Which isn’t a hard prerequisite to meet. Make sure there is an intrinsic value that you add to the company such as great team leading, new innovations that you’ve brought to the company or saved the company some money in one way or another. There are other things you can do but the point is if you being employed ads value to the company then you’re worth it, and you can go and ask for the pay rise. Don’t ask for a pay rise if you don’t do anything special. If you just come to work, do your job, clock off at the end and repeat, then you might need to change your mindset and work ethic before asking for more money.

(2) Time and Place

There is a correct time and place to be asking for a pay rise and that isn’t at the Christmas party after a few too many shots. In terms of specific times of the year, the best time to ask for a pay rise is after the start of the new financial year and if you’re privy to the information, after the company budget has been written. Generally, companies will have money put aside in the budget to accommodate things like pay rises and bonuses. By getting in at the right time, you’re a head of everyone else in your office that wants a pay rise and you also get to set the bar for what value you provide to the company. You want to talk to your HR manager ahead of time and just ask if they can schedual you in for a meeting about your future within the company. It might not be that very day, but its a more friendly way to approach the situation than just barging into their office and demanding a pay rise.

(3) Start with your achievements

It’s okay to brag if you do it politely. Now is when you can bring up how much money you have saved the company, efficiency changes you have made and customer deals you have closed or successful marketing campaigns you’ve run. This is where you can lay it all out on the table and prove to the company just how valuable of an employee you are. Chances are this is already stuff they’ve already recognised. By showing how much value it is to have you working for the company you are more likely to get a pay rise.

(4) Know your numbers

Before you go into the negotiation, it’s imperative that you know exactly what you are asking for. Don’t walk in and say, “I dunno, maybe $1 or $2 an hour extra.” Not only is it incredibly unprofessional, it also gives your employer the upper hand and your not here to give them the upper hand, you’re there to get what you want. Know the specifics right down to the cent value of what sort of pay rise you are after. Helpful free tools like Payscale can give you accurate figures about the market value of your job as well as tell you the lowest amount being paid for it, the highest amount being paid and the median wage rate for other people in the country or area that have the same job as you. If your job is worth $22.04 an hour don’t negotiate for $22.00, negotiate for the full $22.04, even if that means you have to compromise to a lower amount which is a very likely possibility. You need to be the one to make the first offer. This is a negotiation and you need to establish your footing. Never let them make the first offer.

(5) Remember that this is a negotiation

It’s not a one sided conversation so don’t treat it like one. This is a negotiation where you want something and the person you are negotiating with wants something. Just like how they are going to need to make compromises with you, there are times that you are going to need to make compromises with them. You might argue for $25 an hour and they offer you $23. You could compromise by accepting $23 an hour and a change in working times or you can accept $23 on the condition that after 2 quarters there is a review that starts at $24. There are multiple different compromises that you can make but that’s the whole idea of negotiation. You are trying to get the best for you and they are trying to get the best for them.

Regardless of the outcome

Make sure to remain professional and if you don’t end up securing a pay rise. Ask the right questions. “What goals should I meet to become eligible for a pay rise?” “Is there anything within my job that I could be doing to achieve better results.” The answer no is not a be all and end all. It’s just a hurdle that needs to be jumped and you can figure out how to do just that.

Just don’t be afraid to ask. The worst thing that can happen is they can say no. Not much risk for a high reward if you ask me. If you don’t ask you don’t receive so, just ask.

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Is P2P money lending really worth it?

What is P2P Lending?

To decide whether it’s a good investment option you have to understand what it is and how banks lend money out. If you own a bank account then you are already lending money out to people. You store your money in the bank, and the bank lends that out and you earn interest on it. The bank uses your money and assumes the risk of the loan.

With P2P lending it get rid of the bank which was the middle man and there are a few advantages and disadvantages to this.

 Pros and Cons.

Pros:

When you get rid of the bank and lend money out using a P2P network like Ratesetter or Lending Club, you get a higher rate of interest on the repayment of the loans. When you have your money in the bank you might earn 2-3% interest but with P2P you can get a higher interest rate at roughly 6-8 percent and depending on your level of risk it can go higher than 10%.

A quick one for borrowing as well. Because of the nature of P2P, it cuts out a lot of the normal bureaucracy that happens in the bank which means it cuts costs. Generally, because there is less bureaucracy involved, they can offer a lower competitive interest rate compared to the banks meaning if it was a choice between the bank or P2P, overall P2P is going to win out on the interest rates.

It is a very cheap investment to get started on with Ratesetter having a begging investment of only $10 and other brands with minimum investments around the same price.

Cons:

This is where I would have to state that I personally don’t recommend investing in P2P Lending platforms. I have $100 in Ratesetter at the moment and when the loan comes to maturity I’ll be taking that $100.27 out of the account. That leads me to my first con.

Liquidity, or lack thereof. When you invest your money in P2P lending you don’t have access to that money and interest until the loan has been repaid (Understandably). The lack of liquidity is the biggest reason why I’ll be divesting when my loan has been repaid. Most lending platforms offer 3-5 year loan terms which means when you invest in a loan, you will slowly be paid back over the 3-5 years your principal plus interest. You can’t sell your loan like a share so if you invest $1000 it could be 3 years before you see that $1000 come back with $180 interest. This ties into my next point.

There is a possibility for you to lose your entire principal if a borrower defaults on their loan. Ratesetter offers a provision fund to protect it’s lenders but it is still not a guarantee that you will not lose your entire investment which Ratesetter themselves stress in their own information document about their provision fund. With the lack of liquidity you need to take into account the economy. It’s possible that there will be another recession which could result in millions of people losing their jobs, some of those people being your borrowers. In the event that happens I don’t see it as unlikely that the Ratesetter provision fund could run out. Because you can’t sell your investment, you might just lose the whole lot.

Tying back in with losing your entire principal, when you use P2P lending, you assume the risk of investment. Usually the bank assumes the risk and if the bank loses money that it invested from your account, you don’t wear the cost of that, they do. With P2P, you assume the risk hence the realistic likely hood to lose your capital. Also, if these lending companies go bankrupt, it’s likely that you will lose your principal there as well because the first people to get paid are the creditors of the company and technically you aren’t a creditor of the company, more like a user of their platform, so if they go bankrupt, you won’t be at the top of the list.

So what’s the verdict?

That con list is a little bigger than the pro list. As I previously stated, I have money invested within Ratesetter and I’ll be pulling that money out when the loan matures. My personal opinion on the matter, is that there are just better investment options out there that offer the same if not a better ROI compared to P2P lending as well as those options being easy to liquidate in the event that you wish to either access the money or move the money to a new investment. The lack of liquidity and not very competitive ROI means that it’s a no from me.

However if you want to borrow from these platforms, they do offer a very competitive interest rate compared to the banks so you can save your self thousands buy using these P2P platforms for borrowing as opposed to lending.