Motley Fool CFO Ollen Douglass is back with us for this episode of Motley Fool Answers (free on iTunes and Stitcher) to offer advice on how to negotiate a raise. Before that, we're going to talk about the morality of defaulting on your student loans and a financial-life-planning website to check out. All that and some gloating by Dayana in this week's episode of Motley Fool Answers.

ALISON SOUTHWICK:

This is Motley Fool Answers. I'm Alison Southwick, and I'm joined, as always, by Dayana Yochim and Robert Brokamp, personal-finance experts here at The Motley Fool.

So here's something fun we read this week. What's fun about this is that whenever we start talking about this op-ed in The New York Times that ran this last week, Robert just shakes his head sadly and looks like he wants to just, like ... I don't know. Not punch something, but definitely ...

DAYANA YOCHIM:

Definitely ground someone. Send someone to their room.

ROBERT BROKAMP:

Partially.

ALISON SOUTHWICK:

The op-ed was "Why I Defaulted on My Student Loans," by Lee Siegel, and it got a lot of people really upset. Slate even said that The New York Times needs to apologize publicly for publishing this op-ed.

In it, Lee Siegel talked about how, after pursuing not one, not two, but three degrees from Ivy League universities, the author chose to default on his student loans, and he recommended that others do the same.

ROBERT BROKAMP:

Yeah, here's my issue. Part of it is personal. I don't know if he's trying to elicit sympathy when he writes this, but here's what my wife and Mr. Siegel have in common: two master's degrees from Columbia, had to take out student loans, became writers. The difference is my wife paid off her student loans. He had to work part-time. She worked full-time. So his sob story just doesn't resonate with me at all.

DAYANA YOCHIM:

He had to work part-time through college.

ROBERT BROKAMP:

Right. See, that's the thing. When you read the article, things are a little fuzzy, and then there have been follow-up stories about it. In a follow-up story, he said that actually for Columbia he went on a scholarship. So how much money did he have to borrow? Then it was sort of implied that maybe it was his living expenses that he had to borrow.

DAYANA YOCHIM:

Right. Well, part of the argument in the article was, "I wanted to be writer. Sure, I could have taken a soul-crushing job, or gotten a different kind of degree, and paid back these loans, but my dream and my intention was to use my degrees to become a writer, and to be a writer I wasn't going to make very much money and therefore was unable to pay back the debts."

ALISON SOUTHWICK:

Yeah, I don't know. Like, there's a level of this is annoying that he didn't pay off his loans. But then he takes it to a whole other level by sounding like the most obnoxious human being in the world in this op-ed.

ROBERT BROKAMP:

Yeah.

ALISON SOUTHWICK:

Like the tone that he takes. So to your point about how he said that he could have taken a soul-crushing job -- the way he says it he's like, "This is the only way I could survive without wasting my life in a job that had nothing to do with my particular usefulness to society." Like he is God's gift to Earth.

DAYANA YOCHIM:

[Laughs]

ROBERT BROKAMP:

[Laughs] Where would we be without the writings of Lee Siegel?

ALISON SOUTHWICK:

Where would we be? And here I'm thinking, "Well, you know what? Maybe he would have been a really great refrigerator repairman and he just didn't know it. Maybe God put him on this Earth to repair my refrigerator, but no. Instead he's decided that his particular gift to Earth is writing ...

ROBERT BROKAMP:

Yeah ...

DAYANA YOCHIM:

The one thing we can't argue is that when he signed the documents to take on those loans, he did so with the promise of paying them back.

ROBERT BROKAMP:

Right. Meaning he broke a promise?

DAYANA YOCHIM:

Yeah.

ROBERT BROKAMP:

Yeah. And he pointed out that the banker was 50 and bald, which I don't think was necessary, as a half-bald man myself.

ALISON SOUTHWICK:

[Laughs]

DAYANA YOCHIM:

[Laughs]

ROBERT BROKAMP:

He does make some worthwhile points. Any 17- or 18-year-old, they have no idea what they're doing when they're signing those papers. They really don't. And he talks about morality, and stuff like that, and whether it's moral or not to pay back your loans, and I think it's worthwhile questioning whether it's moral for colleges to allow people to borrow this much to get, in my case, an English degree.

If it were up to me, it would sort of be like a mortgage. You can only borrow a certain amount of money based on your income and your assets. Well, if you're going to become an English major, you should only be allowed to borrow so much money. If you're going to be a doctor or a lawyer, it's a different story. But at that age, they do not understand it, and it needs to be imposed from without.

DAYANA YOCHIM:

Right.

ALISON SOUTHWICK:

I just love that being a writer and having an English degree is always the punchline for "you're never going to make any money in your life" -- and this is coming from a communications degree.

ROBERT BROKAMP:

I was an English major with a focus on poetry, OK, so ... fortunately I did not have to take out student loans. But I write awesome poems about retirement, let me tell you.

DAYANA YOCHIM:

We're going to need you to haiku us out of this segment.

ROBERT BROKAMP:

[Laughs]

ALISON SOUTHWICK:

The bottom line, of course, is pay back your loans, people, and don't become an English major.

ROBERT BROKAMP:

Not necessarily the last one.

ALISON SOUTHWICK:

Yes. The last one. We need to offer responsible financial advice. Make your mom proud. Go become a lawyer or a doctor like she always wanted, OK?

Practical financial tools for you to use

ALISON SOUTHWICK:

Now it's time for "Dayana-Tested, Dayana-Approved." Today we're looking at financial life coaches. You might be skeptical that there is yet another niche of life planner to tell you how to live your life better -- but Dayana is here with the skinny, because this one is actually pretty good.

DAYANA YOCHIM:

Yeah. So we're talking about financial life planners. How they differ from a traditional financial planner is that they go a lot deeper in trying to find the why behind the what. What is the goal of your goals? What kind of life are you really trying to achieve, and how can we arrange your finances so you can do that?

So you go to a traditional financial planner. All of them are going to ask, "What are you saving for? What are your goals?" You might say "early retirement," or "opening my own business," or "buying a new car, or a weekend lake house." Those are all fine goals. A traditional planner is going to take that example, put some numbers on there, and show you a way to achieve that.

With a life planner, they're going to look at all of that, and before they even crunch the numbers, they're going to dig deeper and ask why. Why do you want that lake house? Because if, as you have this discussion, it may turn out it's not the lake house, per se, that's the desire. What the client really wants is to spend more time with their children. They have fond memories of their family every summer at the lake house that they had, and the way to re-create that is with this very tangible black-and-white-numbers goal.

Well, if the person has pursued that traditional plan, they're working more hours. They're taking on more clients. They're pulled further away from the family. They're actually spending less time together, and therefore it becomes a very unsatisfactory thing when they reach that milestone. And the kids are then like cranky teenagers who really don't want to spend the weekend with Mom and Dad at the lake house after all.

So with a financial life planner, they're going to look at different alternatives. Maybe it's finding an affordable cabin to rent on the weekends. Taking on fewer side projects in the summer so they can have a longer break together as a family. And when you do these exercises, the Kinder financial life planners have found it turns out time is often what we crave much more than material things.

ALISON SOUTHWICK:

And so the creator of the financial-planning movement -- do I call it a movement? -- they just created a website that you can use.

DAYANA YOCHIM:

Yeah, and I love this. George Kinder is the founder of the movement. The website is called LifePlanningForYou.com. It has exercises on there that help you identify the why behind the what.

ALISON SOUTHWICK:

For free? Do I have to pay for this?

DAYANA YOCHIM:

For free. You register to get access. You can save your work as you go. And what's great about it is, say you're working with a regular financial planner or if you're just doing this on your own, it helps you articulate what those goals are.

ALISON SOUTHWICK:

What's that website again?

DAYANA YOCHIM:

LifePlanningForYou.com.

The right way to negotiate a raise

ALISON SOUTHWICK:

All right, well, I'm happy to say that everyone's favorite negotiator and chief financial officer is back in the studio. Ollen, thanks for joining us.

OLLEN DOUGLASS:

Well, thank you for inviting me back.

ALISON SOUTHWICK:

Well, back by popular demand, I'm sure. The three of us really like you. And we're not just saying that because you sign the ch-ecks ...

OLLEN DOUGLASS:

[Laughs]

ROBERT BROKAMP:

[Laughs]

OLLEN DOUGLASS:

Well, three is more popular than I was in high school, so this is still an upgrade.

ALISON SOUTHWICK:

Well, our listeners are going to love you, because today we're actually going to talk about how to negotiate a raise at work. With the economy on the mend and the unemployment rate at around 5.5%, experts say that now is actually a really good time to ask for a raise. Right?

OLLEN DOUGLASS:

Uh -- I'm conflicted with this whole conversation.

ROBERT BROKAMP:

Just to make it clear, Ollen is part of the salary negotiations here at The Motley Fool.

OLLEN DOUGLASS:

Yes, but I think this is generally a good time. Except for at The Motley Fool.

ROBERT BROKAMP:

[Laughs]

ALISON SOUTHWICK:

[Laughs] Well, did you know -- this is kind of interesting -- that if you're satisfied with your job, you are more likely to get a raise, but dissatisfied people are more likely to ask for a raise and less likely to get it. So that brings up the point about timing.

So when is it a good time to ask for a raise -- both you personally and thinking about the company?

OLLEN DOUGLASS:

It's what you're saying. A good time to ask for a raise is when things are going well for you personally in your role, and for the company as well. And I think that convergence is probably the best time to ask for a raise.

As I've thought of it, there's really three things that I would say to people to highlight what to do when it comes time to ask for that rise. The first one is to focus on the value that you've created rather than how hard you've worked. Working hard is something that a lot of people do. It's very subjective, and it's hard to separate yourself just by saying you're working hard.

I would go as far as to tell people to list out the accomplishments that they've done, and think about how that has created value for the company. It's not that you would ever hand that list to anyone, although someone may ask for it if it's particularly well done. But the idea is to prepare yourself so you can speak about your accomplishments in a very concise way and a very clear way to the person you're approaching.

DAYANA YOCHIM:

I am assuming if you can put dollar amounts on that, that's helpful.

OLLEN DOUGLASS:

Yeah, and even if it's not dollar amounts, I would say -- and this is where I'm working against myself, here, but numbers help. It doesn't have to be dollars, but certainly numbers help to quantify what you've done. "I've increased production on this amount of things." "I oversaw these specific projects, these events that X number of people attended." "My satisfaction rating in customer service that had increased the number of complaints about me has decreased."

All those things are helpful. They aren't necessarily explicitly tied to dollars, but there are people in the organization that can make that translation probably even better than you can. And what you need to do is, again, help them help you by giving them something that is quantifiable.

ROBERT BROKAMP:

There's a line that I like -- and I think it came from Ben Stein -- saying that it's not just ability, but affability, in terms of how much people like you and get along with you. What's your take on that? How much does the overall company's opinion of you -- and basically that you're a likable person -- factor into it?

OLLEN DOUGLASS:

I think it does factor into it. I would probably modify that, just a bit, to say that cultural fit is important and whether it's important to be likeable, or whatever the culture of the company is, that the more that you fit within that, the easier it's going to be for people to see you as an asset, to see you growing and developing, and be in a position to be able to envision you playing a larger role.

If you are someone who is upsetting people all around you, and that is not the culture of your company -- even if you're doing well -- it's hard to see someone saying, "Yes, this person's a jerk when he's managing three people. Let me see if I can put him in a position to manage 10 people."

ROBERT BROKAMP:

[Laughs]

ALISON SOUTHWICK:

And let me just say I make 10 people miserable at this company. My impact of making people miserable expanded by eight people over the last year.

ROBERT BROKAMP:

Give that person more money!

DAYANA YOCHIM:

I made four of them cry within the first week of them reporting to me.

ROBERT BROKAMP:

But that might be part of your company's culture, which is a good thing.

OLLEN DOUGLASS:

Exactly.

ALISON SOUTHWICK:

So what about research? Because I remember what I did when I asked for a raise once in the past, is I went online and found out what people in my job usually make. That seems like a pretty basic thing to research, too.

OLLEN DOUGLASS:

Exactly. Make sure you understand, for your area and for your particular role, what it is. There is some flexibility, and this is where you can help yourself. If you think that your role is not the traditional role, find that job description that matches up with what you think you're really doing. That can be an interesting way to help redefine what an appropriate salary range is for you.

DAYANA YOCHIM:

How much of the company's financial position weighs in on this? Because they might say, "Well, you have better benefits here than other companies," for instance.

ROBERT BROKAMP:

I think it's important to consider, because a lot of those salary websites don't factor that into it.

OLLEN DOUGLASS:

Right.

ALISON SOUTHWICK:

And we get the crazy benefits at The Motley Fool.

OLLEN DOUGLASS:

[Laughs] Yes, you do, and it's very important to take a total-comp kind of view of what you're doing. Look at the salary you're getting paid, the flexibility, and the benefits, and decide what it is that you really want. If you would like a little bit more flexibility during your work hours, don't ask for more money. Ask for more flexibility on your hours. More money -- if you are working too hard and you're feeling stressed out -- a lot of people go into an actual explanation. "I need to be paid more. If they're going to have me doing this, I need to be paid more."

The truth of the matter is that generally doesn't help. It may help for a very short period of time, but if you're overworked and stressed out, paying you an extra $2 an hour isn't going to reduce your stress. You don't have time to spend the money already. Even if you have more, you're still going to be overworked and stressed out. What you need is to revisit your role and your responsibilities, and to get a job that's more satisfying and that leaves you more time to manage your life. That's what you really need. Often people think to ask for a raise, but it's more than dollars that you can ask for.

DAYANA YOCHIM:

And there are a lot of studies that show that once you reach a certain point where you make a good living wage and you can cover things -- and still have a little bit of room -- that, that extra $10,000 a year, if you're making $100,000, doesn't make you 10% happier.

So I love that you say if you're working really hard, the extra compensation there might not be dollars.

OLLEN DOUGLASS:

Right, exactly. And then always understand the situation at the company. The economy is improving slowly -- some areas better than others -- but understanding the situation that your company is in is helpful for two reasons. One, it gives you a better sense of whether it's the right time or not. Also, the more aware you are of things beyond yourself, the more valuable you seem as an employee.

If the employee comes in and says, "Wow, we had a great year this year and we made some significant changes. I had a lot to play in that -- I did A, B, and C -- and I was wondering if this was a good time to revisit my salary and see if there's an opportunity for an adjustment," that's a much better situation on the one hand than if your company is laying off people, and that is when you decide to walk in and say: "You're laying off people. I'm important and I need a raise."

ALISON SOUTHWICK:

It's not just about the health of the company, though. Isn't it also about knowing when your manager needs to submit his budget and stuff like that? Are there specific times of the year?

OLLEN DOUGLASS:

Yes, all companies operate differently. Some companies do performance reviews on an annual basis. Some quarterly. Some do it real time. I don't think it's ever a bad time to start the conversation and to get it into people's minds. I wouldn't worry about when to bring the topic up. Just make sure that you're in the queue so whenever that comes around, that you're part of that conversation.

ROBERT BROKAMP:

What about a situation where you recognize that right now you're fairly paid, but you would like to earn more money, so looking around the company and saying, "OK, these are the people who are paid more. There's no opening in that department. Should I start working on being qualified for that position in the hopes that, at some point, there will be an opening and I can move to that?" Is that something you'd bring up to someone right now? Saying, "Listen, I would love to be working in this department. What do I have to do to move to that place?"

OLLEN DOUGLASS:

Yeah, that's a tricky one, and it depends on how that question is phrased. If someone phrased it that way, if they are a good employee I certainly would work with them to see if we can figure out a way to get them introduced to that. If they want to make more money, moving to another department makes me a little bit nervous, unless it's a true passion for them. What I would probably suggest, if I knew the real motive, is, "Let's talk about what you do well and let's talk about what areas are challenges for you. Let's think about positions that have greater responsibility and greater value-creation opportunities, and let's see if we can start to push you down that path."

If you're an accountant and you want to make more money, let's see if we can get you to be a supervisor. Let's see if we can get you to a managerial level. Maybe there are some courses you can take so we can give you more challenging projects where the rewards follow it. So it really is positioning that person to succeed given their own particular strengths. Sometimes that's a department change.

DAYANA YOCHIM:

OK. Let's say the answer is, "No, you cannot have a raise." Have you just done irreparable damage to your internal reputation?

ALISON SOUTHWICK:

How do you recover, too?

ROBERT BROKAMP:

I think you'll probably feel a little resentment ...

ALISON SOUTHWICK:

A little.

DAYANA YOCHIM:

But maybe the answer is completely fair. It's like, "Right now, we're not in a financial position to do this." Anyhow, the answer comes back no. How are you now perceived?

OLLEN DOUGLASS:

It depends on how you ask. I think probably the safest way to ask, if you're risk-averse, is to, again, have your accomplishments, but just ask for a salary review. Someone will go off and do their thing and come back and say whether you are over or under. I mean, there's only one reason why you ask for a salary review. It's not like ...

DAYANA YOCHIM:

"I think I'm making a little too much bank."

OLLEN DOUGLASS:

So you ask for a salary review. It may come back that "we looked and it seems like you're at the right level." But then you started a conversation and a question. And again, back to negotiating and asking for help, "Well, what could I do to move to another level?" Those kinds of conversations probably reflect favorably on you, because it shows you as someone who is ambitious, who's conscientious, and wants to not just get more money, but you want to earn more money. I think it puts you in a good light.

And then also the truth of the matter is bosses aren't always walking around thinking every single day, "My people need more money." So just making it known that you would like a higher compensation level is not a bad thing, because it just raises awareness for you that that's something that you think needs to be looked at.

ALISON SOUTHWICK:

When we talked about negotiating with your insurance company or your cable provider, you talked about knowing when you'd be willing to walk away. Do you feel you need to approach your salary negotiation the same way? And knowing that "if I don't get X, then I'm outsies."

OLLEN DOUGLASS:

I think that is true. That's a tougher one, but if you've done the research, and you feel like you're being underpaid, and that your skill set is of more value in the marketplace, sometimes it is a signal that you have to move on. You often find that when people get a degree while they're in a job. So someone who doesn't have a college degree gets a college degree in a specific area, and now, just by virtue of how they've come in, they're being paid significantly less than a new person coming in with the same credentials. And often the only way to maximize the value of those external learnings that happened is to move to another place. I'm not sure why that is, but I see it very often.

DAYANA YOCHIM:

So if they say that, you grab a stapler and some other office supplies on your way out.

ROBERT BROKAMP:

[Laughs]

DAYANA YOCHIM:

Sayonara.

OLLEN DOUGLASS:

And free chips.

DAYANA YOCHIM:

Yeah. And free chips.

ALISON SOUTHWICK:

All right, Ollen. Well, thank you for joining us today. I'd just like to wrap it up here. If you're looking to ask for a raise, focus on the value you've created for the company. Make sure you understand the state of the company -- the financial state. Also understand what the market is paying for your position and knowing where you stand. Any other advice you want to offer as a parting shot here?

OLLEN DOUGLASS:

I think that pretty much covers it. I don't have anything as a parting shot, right now, other than if you work at The Motley Fool, you're probably fairly paid right now, so none of this is particularly relevant.

DAYANA YOCHIM:

[Laughs]

ALISON SOUTHWICK:

[Laughs]

ROBERT BROKAMP:

I was going to ask. Let's say you started a podcast. What kind of raise should you ask for after that?

OLLEN DOUGLASS:

I would say that it would be great time to come and talk to us about a raise when the podcast reaches, maybe, a million subscribers.

DAYANA YOCHIM:

Wow.

ROBERT BROKAMP:

Gotcha.

ALISON SOUTHWICK:

All right, guys. Tell your friends.

ROBERT BROKAMP:

Tell all 999,999 of your friends.

ALISON SOUTHWICK:

We're going to steal a little fundraising thermometer, and it's going to go right up every day.

A moment of gloating

ALISON SOUTHWICK:

Dayana and I aren't ones to gloat, except for whenever we are right ...

So this week we have Marco Rubio to thank. A couple of weeks ago, we talked about how Marco Rubio was cashing out his retirement account. And while we can all agree this is usually a boneheaded move, Robert came to his defense, a little bit, to which Dayana and I were still skeptical. So, some more aspects of his financial life have come into light.

DAYANA YOCHIM:

Robert was craving more information ...

ALISON SOUTHWICK:

It's true. He was. He went, "Well, I want to know more about it."

Well, guess what? We've got some more information about Marco Rubio and his history with money, and it is not pretty.

ROBERT BROKAMP:

Well, you know, it's all on the spending side. He's made a lot of money.

ALISON SOUTHWICK:

So it turns out that between 1998 and 2008, he earned $2.38 million but ended up with an estimated net worth of $53,000. Which is a savings rate, I guess, of about 2%. That seems like a negative savings rate, actually, but -- this is me reading it from, yet again, The New York Times. Before we go too far down this road, I want to point out that we are not a political show. We don't like talking about politics, but we do feel it's OK to attack politicians for their personal money management. Yes?

DAYANA YOCHIM:

Absolutely.

ALISON SOUTHWICK:

OK.

ROBERT BROKAMP:

Totally agree. So when you dig into the details, yes. He made a lot of money and then he made some big purchases. The one that people talk about is the $80,000 boat, for example.

ALISON SOUTHWICK:

Which -- we all know -- instead of buying a boat, you should just go stand in your shower and rip up hundred dollar bills, as the old adage goes ...

DAYANA YOCHIM:

[Laughs]

ROBERT BROKAMP:

[Laughs] Right. So, there you have it. If you're in that situation where you're spending $80,000 on a boat, you have less of an excuse to be taking $68,000 out of your IRA. So, yeah. He definitely made a mistake on that one.

The only thing I will say for some people is they say, "You only live once, and I'm not going to save for retirement." Or "I'm going to use my retirement funds for something else." To them I will say that's fine -- if you never want to retire. And that's fine, too, if you want to keep working for the rest of your life. In Marco Rubio's situation, he's going to get a pension, so fine. But, yeah, I would not say what he did was a good thing.

ALISON SOUTHWICK:

So Dayana and I were right and you were wrong!

DAYANA YOCHIM:

Nah, nah, nah, nah, nah, nah.

ROBERT BROKAMP:

Yeah, nah, nah, nah, nah. I just didn't have all the information. I was just, you know, playing the devil's advocate or something like that.

ALISON SOUTHWICK:

Yeah, so, all right. We'll stop gloating.

All right, that's it for today, kiddos. Our email is answers@fool.com. The show is edited by Rick Engdahl. Theme music is composed and performed by Dayana Yochim. Tell a friend about us, especially if you're friends with Marco Rubio. That man needs some help.

For Dayana Yochim and Robert Brokamp, I'm Alison Southwick. Fool on!

[End]

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