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Your Biggest Financial Asset is Not What You Might Think

If I were to ask you what your biggest financial asset is, what would you say? Your home? Your investments? Unless you’re close to retirement, your biggest financial asset is more likely your ability to earn an income.

That’s not to say saving and investing aren’t important. You won’t grow wealthy if you spend everything you earn. However, your career is the driving force behind building financial capital. The more you are able to earn throughout your career, the more money you have available to spend, save, and invest. This is why I consider your career to be your biggest financial asset.

Capitalizing on Your Biggest Financial Asset

To illustrate this point, let’s calculate the lifetime earnings of a new college graduate. According to a 2014 salary survey, an average accounting major would start working at the age of 22 with an annual salary of $55,600. That’s about $10,000 more than the overall average starting salary. If the college graduate works until age 65 and receives a 3% raise every year, he or she would earn a total of $4,951,092! That’s a massive sum.

biggest financial asset

If you’d like to grow your wealth, managing your career is essential. But what’s the best way to grow your biggest financial asset? To grow your lifetime earnings, you’ll need to do one or all of the following:

  1. increase your starting salary
  2. increase your salary growth rate
  3. work longer

Start With a High Salary

biggest financial assetIt always easier to earn more if you begin with a higher starting salary. This is exactly why many choose to pursue higher education, even if it means taking on student loans. Studies have shown that college graduates often start with higher salaries than those with only a high school education, and those with graduate education often begin with a higher salary than those with a bachelor’s degree.

Let’s compare the lifetime earnings of an accounting student who earned their master’s degree. Take the student who started with an average salary of $66,300 at the age of 24, worked until age 65, and received a 3% raise every year. He or she would earn $5,438,138! Even though the student missed out on two years of the workforce, he or she earned about $500,000 dollars more!

Grow Your Salary

It’s not just about your starting salary. It’s also about how you grow your career. You’ll bring home a lot more if you’re able to grow your salary by 5% or 10% year after year.

Take our accounting student with a bachelor’s degree. If they manage to raise their income by 5% every year over the course of their career, they will earn $8,403,552! That’s three million more dollars than the master’s student whose salary only kept up with inflation. The rate at which you grow your income is much more important than your starting salary. As you can see from the numbers, if by managing your career you are able to consistently raise your income over the years, your career can bring in an outstanding amount of money.

What can you do to raise your income by 5% or even 10% this year?

In order to be paid more, you have to provide more value. So what can you do to provide more value to your employer? Can you attend training to increase your skills? Is there a book you can read to grow your knowledge? As you become more skilled, you can present a great case to your employer to negotiate an above average raise. (Derek’s comment: This can absolutely be accomplished. Since graduating, I have increased my job income by an average of 11% per year)

It’s important to increase your knowledge, skills, and abilities if you’d like to get paid more. But it’s also important to grow your network. Most people earn significant pay raises when they change jobs — and people find new jobs through their weak connections. Can you reach out to a colleague on email or LinkedIn today? Can you attend a conference later this year?

Becoming an expert — and commanding a high salary — takes years of continued effort. If you concentrate day after day on growing your skills, knowledge, abilities, and social connections, you’ll likely soon earn that pay raise.

Work Longer

For many of us, we’d really rather spend less time working. However, if you find a job you enjoy so much that you’d like to continue working forever, this will certainly increase your total lifetime earnings.

Not only do people who do what they love work longer, they often make more money than those who are just after that big paycheck. It’s much easier to put in all those extra hours of reading, studying, and working if you enjoy the work.

The Take-Away

Learning to manage your career is just as important as learning to manage your money. If you grow your biggest financial asset, you’ll be able to spend, save, and invest more to live a great life while building wealth.

Are you ready to grow your biggest financial asset?

This post has been written by our amazingly talented staff writer Jenna who hails from

Make Money Money


My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.


  1. Yep, high income goes a long way to reaching financial freedom much quicker. My $10M plan is heavily reliant on a high income, which more easily allows for a high savings rate.

    Cutting expenses has a floor, where income theoretically has no ceiling. I tend to find myself spending about 20% of my energy keeping expenses low and the other 80% figuring out how I can earn more and thus enjoy more luxuries guilt free.

    Meaning when I earn more I don’t feel so guilty stealing from my future self.

  2. I like that 80/20 ratio way of thinking about income vs expenses. Most of us probably do the opposite!

  3. Moving jobs can be a huge career and income boost. My husband was feeling stuck at his previous job and wasn’t getting raises even after earning a prestigious license. Instead of staying stuck he got a new job where he’ll gain more marketable skills. The best part is, he finds this work much more interesting as well.

    I will say that sometimes people will act like their income is their only financial problem, when they make plenty and are not doing the best job planning how to spend their money. But you’re right on that the ability to earn income is a huge asset.

    • That’s awesome that your husband went and got the new job. And yeah, it’s totally possible to spend more than you earn no matter how much you make.

  4. You can only be frugal to a certain extend. Eventually you will reach a point where you cannot save extra money… this is where earning higher income is important.

    • Yeah, there’s a limit to frugality but no limit to increasing your income. To build wealth you need to do both.

  5. Higher income speeds the process immensely. I think there’s a bit of an oversimplification on the masters though.

    I have a finance and accounting degree and have worked at a variety of Fortune 500’s. While it may (or may not) help you get in the door, it’s also largely irrelevant once your working. Your salary level will tend to equalize with the undergrad only employees after a few years, so you won’t see a continued salary premium.

    Not to say you shouldn’t do it and it can help in a lot of other ways. It may open up better employment options, or help your skill set or make you more competitive. But there’s no automatic salary premium. My suggestion would be start with the undergrad, and if you want a CPA, CFA, etc… do it on the side while you work.

    • That’s totally possible — I have no personal experience with accounting. Studies do show that those with graduate degrees do earn more over their lifetime, but it might be due to more than the initial salary increase.

  6. One way to look at it is having 300K invested making 7% interest is the same as making only $10.50 an hour based on a 2000 hour work year.

    • When you think of it that way, it makes you want to get that $300k in the bank, huh? It’s nice to make over $10 an hour without doing any additional work.

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