How You Can Get 15 More Pay Raises a Year

Getting more pay rais­es is quite sim­ple & obvi­ous. I’m real­ly sur­prised it’s not a com­mon met­ric for eval­u­at­ing invest­ment per­for­mance since rais­es are so much fun to receive!

Your Elephant’s Paycheck port­fo­lio for 401K rollovers is based on 2 key prin­ci­ples:

  1. Invest in div­i­dend aris­to­crats; com­pa­nies with a long his­to­ry of annu­al div­i­dend increas­es
  2. Reinvest div­i­dends each quar­ter; and mea­sure your results with met­rics designed to high­light the ben­e­fits of com­pound­ing rein­vest­ments (increas­ing rais­es over time) and let­ting time do the heavy lift­ing.

As an investor with an Elephant’s Paycheck Blueprint port­fo­lio, each of these two prin­ci­ples rep­re­sent events that deliv­er a pay raise for your Elephant.

More Pay RaisesEach year when your com­pa­nies increase their div­i­dend? Raise!

Each quar­ter, when the div­i­dends you receive are rein­vest­ed? Those new­ly rein­vest­ed dol­lars buy more shares that give you a larg­er div­i­dend in the fol­low­ing quar­ter. Raise! Raise! Raise! Raise!

The quar­ter­ly raise is going to hap­pen four times a year, so you’re get­ting more pay rais­es than you’d think. In fact, each raise is larg­er than the one before it because of the effects of com­pound­ing.

Each com­pa­ny you’ve invest­ed in deliv­ers five rais­es a year. A port­fo­lio with just three com­pa­nies in it, 15 more rais­es a year than you’d get just from your own pay­check. Three’s a num­ber I like for the Elephant’s Paycheck port­fo­lio. Take our free 10-part email course and you’ll get our stock selec­tion work­sheet in les­son #7 that explains how to pick the right com­pa­nies to get start­ed.

Are You Standoff-ish With Your Brokerage Statement?

So many peo­ple are, I think because the mar­ket goes up and down seem­ing­ly at ran­dom. When a company’s stock price goes down but it looks like the com­pa­ny is doing well it’s con­fus­ing. You invest in a good com­pa­ny, it does well, and the stock goes down. You won­der “who understand’s this stuff?” and respond by pay­ing atten­tion to some­thing in your life that you have con­trol over. When it makes sense, and good behav­ior (invest­ing for your future) is reward­ed, you par­tic­i­pate active­ly. When it’s not reward­ed, you with­draw. Or, just “do what you should do” (by con­tribut­ing to your 401K/IRA) and hope for the best.

Statements are also bor­ing. Well, no kid­ding. Why should state­ments be any­thing oth­er than bor­ing?

Why shouldn’t they be fun? If I give you a choice — fun or bor­ing, which would you choose? Fun every time.

Therefore, giv­en the choice, why not mak­ing invest­ing fun?

What’s fun about investing? More pay raises!

Using the Elephant’s Paycheck Blueprint, instead of look­ing at your bor­ing state­ment at the end of every month, you get to count your pay rais­es 15 times a year. How cool is that? And, each pay raise you get accel­er­ates over time because the rein­vest­ments com­pound each quar­ter. (You’ll earn div­i­dends on past div­i­dends that were rein­vest­ed.)

In order to mea­sure how well we’re doing with all these rais­es, we’ve intro­duced a new met­ric in our track­er called “Actual Return”. The Actual Return mea­sures your Elephant’s Paycheck rel­a­tive to the start­ing size of your port­fo­lio. Brokerage state­ments don’t think to mea­sure it this way because it’s not how you pay tax­es on your invest­ments. It’ too bad, because rais­es (yay!) are much more fun than tax­es (boo!).

It gets bet­ter.

Not only do you get a lot more rais­es each year, the rais­es become easy to project into the future. We can antic­i­pate the rais­es, which mag­ni­fies our fun. Anticipation boosts hap­pi­ness (for invest­ing, as well as for vaca­tions).

Using our port­fo­lio track­er (les­son #9 in our free 10-part email course) we’ll project our raise for the next 12 months. It’s a con­ser­v­a­tive pro­jec­tion, but still helps to keep us on track. In fact, our sam­ple port­fo­lio that we’ve been run­ning for about 13 months now shows a pro­ject­ed 12-month raise of about 13.5%.

It might be hard to believe, but it gets even bet­ter.

You might have expe­ri­enced this at work. Early career years of your 20’s, full of pro­mo­tions and rais­es, have turned into the flat­ness of your 30’s. Promotions are there, but the rais­es are less grand . At some point in your late 30’s, espe­cial­ly these days, you might only be receiv­ing some­thing close to a cost-of-liv­ing increase. Maybe a lit­tle more1. Your Elephant’s pro­ject­ed pay raise doesn’t flat­ten out (unless some­thing goes wrong with the com­pa­ny, but this is in com­par­i­son with a company’s stock price where they can seem to do every­thing right and still the stock price goes down or remains flat for years at a time).

In fact, our Elephant’s rais­es accel­er­ate over time because the rais­es tend around a per­cent­age over time, like Exxon’s 6% aver­age raise year-over-year for the past 30 years2.

An exam­ple of this can be seen in our sam­ple port­fo­lio. Over the last 13 months we achieved a 15.6+% raise. Next year, we are pro­ject­ing a 13.5% raise — a low­er per­cent­age than last year3. However, the actu­al dol­lar amount is just about the same $275. Even with a low­er per­cent­age, the raise mea­sured in dol­lars is equal. When the per­cent­age is con­sis­tent, you can see that the actu­al dol­lar amount is high­er.

This is what makes the Elephant’s Paycheck Blueprint so pow­er­ful. Increasing rais­es year-after-year-after-year.

Maybe if it were more obvi­ous how to have fun invest­ing, more peo­ple would be able to stick with their invest­ment plan?


  1. Congrats if this is the case, nice­ly done! 

  2. This sta­tis­tic comes from the Exxon investor home page. 

  3. In case you are won­der­ing why the pro­ject­ed per­cent­age is low­er than last year’s accom­plish­ment… it’s because we project con­ser­v­a­tive­ly. The details of the con­ser­v­a­tive­ness are also cov­ered in les­son #9. 

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