As a university student entering the job world, one of the best thing you can do for yourself is to negotiate your first salary. I did not and this is something I regret to this day.
When I got the offer, I had no real idea of how much I was worth and for me it was already a lot of money. Why should I appear arrogant and ask for 100 / 200 Euro more a month?
Well, let's assume a smarter version of me actually negotiated the first offer and got 200 Euro more per month, meaning 2,400 Euro a year. What difference would it make in 35 years time if the salary would grow at 3% every year? A linear assumption would take 2,400 Euro and multiply it by 35 times, resulting in 84,000 Euro.
However, this is excluding the fact that also that 2,400 Euro is growing on average by 3% a year. If you factor that in, the difference after 35 years is actually 151,862 Euro, almost double what the linear assumption would have led you to believe!
Guess what, this is again the beauty of compound interest rates!
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