Sunday, January 2, 2011

Capping your earnings

The title 'Capping your earnings' is the idea that people put a cap on their income by selecting certain professions.
Every profession/job has a minimum and maximum pay, and although there is usually a huge gap between the best and worst performers, or best and worst salary negotiators, the salary is known well before the career is even selected.

Uncapping the salary cap usually involves moving into management of the field you practiced. However management involves different set of skills and challenges. A good mechanic, won't necessary be a good boss for other mechanics. Instead of working with tools and cars, now the work becomes managing people.

There is yet another way to uncap your salary. Going to business for your self, removes all caps. Although there are good estimates of what a gas-station makes, there are no good estimates for what a chain of gas stations can make in 5 years. The best example of uncapping your salary comes in forms of Bill Gates and Mark Zuckerberg. The figures those people make were unimaginable before their time.

Starting a business presents many challenges. Many more than going into management, or switching careers, or any other way of removing the cap of earnings.
I greatly respect and admire people who've done it.