7 Ways to Increase your Income
Personal finance at the most basic level examines the flow of money in and out. The balance of income and expenses. As a high-income earner, it's often more favorable to control major expenses, then focus on the income side of the equation. Don’t worry about the daily coffee when you can make adjustments and earn an additional $50,000. Let’s discuss ways to increase income to accelerate financial progress.
Negotiation
Negotiating is extremely important. Despite hospitals saying patient care is top priority, it’s about the dollar. Hospitals and agencies will do everything to pay you less.
Negotiations come down to the ability to say no. If you can’t walk, you aren’t negotiating with much force. It’s ideal to find a solution that works for both parties, but ultimately the healthcare systems have the upper hand. I have seen many times where hospital systems decrease compensation of current employees and it's up to the CRNA to say no and walk away. Quit the job or take the pay cut. This doesn’t even sound easy, but it’s extremely difficult in practice.
Consider relocating the family, starting new social circles, and finding a new place to live. There are many headaches associated with leaving a position. Without the ability to say no, you are limited by what is offered through your employer.
Make the most of your ability to negotiate fully while you can. Maximizing your earning potential during your early years will translate to significant financial security later in your career. This will ultimately allow for maximal flexibility.
The Job
The easiest way to increase income is to accept a higher paying job. Leaving a job paying $220,000 per year W2 for a job paying $250,000 per year W2 increases your inflow by $2,000 per month. This extra income goes a long way towards financial progress.
Other income considerations include more time off for the same rate, sign on bonuses, retention bonuses, or a greater benefits package. Some of these areas are negotiable while others are not. Starting salary, benefits package, and sign-on bonuses should be negotiated with every contract. Anything can be negotiated. Aspects such as a 401(k) match are set by the employer and equal among all employees, so there’s no wiggle room.
Examine the total compensation package. Don’t overlook an employer retirement match of 15%+ that looks to maximize retirement accounts. or health insurance if that’s something you struggle acquiring on your own.
The degree of sacrifice to upgrade compensation is variable. Oftentimes desirable locations have positions influenced by the sunshine tax. Think those jobs down in Florida that sound desirable with a nice winter and a mild climate. Those positions often pay significantly less than a job in the Midwest. A location with less than desirable winters and far fewer amenities. International airports are few and far between. And even a local Target is sometimes difficult to find.
Other ways to increase pay with the new job maybe additional responsibilities, additional coverage, and more weeks worked. Bringing a unique expertise or accepting a chief position may also be accompanied by higher compensation.
Increase Hours
Many have the ability to work extra shifts in today’s market environment. Working overtime or picking up extra shifts is an easy way to supplement income. These hours may carry a pay premium. 1.5x for W-2 overtime! It’s not a reach for W-2 providers to NET $1,000 per extra shift. Locum providers may be closer to $1,500+ per shift.
This is a matter of trading time for money. If you have more time than money, it may be worth the trade. Making this trade early in one’s career will pay dividends overtime. About a 5x dividend over 30 years after inflation. So that $1,000 net income will have the same purchasing power as $5,000 today if invested in a low-cost index fund. This means working a few extra shifts per year could shave months or years off your retirement timeline.
It's most convenient to work extra shifts at your current facility. You already know the workings. The other option is to sell back some of your PTO weeks. This could mean working extra shifts during PTO weeks, or finding a moonlighting gig 3 or 4 weeks out of the year. Maybe covering weekends somewhere.
It's common to see overtime paid at a higher rate for full time employees. Moonlighting locum shifts likely bring a higher premium. Both options are great ways to increase annual income.
Specialization
I already mentioned accepting a chief position may increase annual compensation by $10,000 or $20,000. This is a viable option for those seeking a leadership role (and a highly undesirable option for many).
Consider specializing in areas of clinical practice such as cardiac, pediatrics, and obstetrics. From the job postings I’ve noted, cardiac appears to be the specialty most consistently earning a bit extra. This is a very desirable opportunity for those who enjoy cardiac.
Pediatric positions may also pay a bit more. If the direct compensation for cardiac or pediatric position is not increased, there are likely other perks such as less call or cardiac/peds only call.
Specializations also include skillset. Commonly requested skills are epidurals, spinals, regional anesthesia, and line placement. I found that these don't commonly come with pay increases, but lacking these skill sets may disqualify you from certain jobs. Having proficiency in these areas may set you apart from others.
Locum Work
Locum work has the most significant impact on annual income. The average W-2 CRNA earns about $250,000 annually. Consider another $50,000 in benefits for a total package around $300,000 annually with 6 weeks PTO.
W-2 weeks are valued at $6,500. Locum weeks average $9,500 with the potential to earn far more. A few of these shifts is significant. A major boost. Full time locum for the full-time boost.
I estimate locum work to gross between $322,000 and $621,000 annually for most full-time locum providers. The average being around $437,000, with 6 weeks off annually. Subtract the cost of benefits. Add the 1099 benefits. Full-time locum work is easily an extra $150,000 annually for the same work.
If you want to know how I calculated those numbers, try this link: Locum CRNA Financially Independent in 5 Years. It sounds wild to know that serious locum work for 5 years can reasonably allow someone to achieve FI!
The caveat to the extra income is the long list of inconveniences. The many reasons people don’t locum. I expand on the following list here: Is Locum Work for Me?
Willingness to Travel
Family Considerations
Spouse’s Career
Kids in School
Logistical Headaches
Work Instability
Agencies/Recruiters
Fluctuating Job Market
Not the best option for a new grad, but highly recommended for those looking to add rocket fuel to their income.
1099
This may or may not be a way to increase gross income. For those traveling full-time, 1099 work is the only solution.
I find access to a Solo401(k) to be the most significant. Maximize the employEE and employER side of the equation of the 401(k). Depending on your situation, there are third-party hosts that have a Roth and After-tax Solo401(k) basket. This ensures you have access to the entire $70,000 annual contribution limit -- $140,000 with a spouse. Big fan.
The full potential of the Solo401(k) is only realized if you ONE, earn enough money. TWO, save enough money, and THREE, continue to fund a bridge account. For all of the talk about Mega Backdoor Roth contributions, most CRNAs don’t utilize them. A Solo401(k) isn’t a prerequisite for financial success.
As a contractor, I have expenses such as health insurance and malpractice. Expenses that would have been previously covered by my employer. My income as a contractor must be higher than my time as an employEE to compensate for these costs.
Many make a big deal about expenses, and yes, they impact your top line. Keep in mind that business expenses are still dollars spent. In a way, spending $1 to save $0.40. Great if you need whatever you are buying. Not great if you are buying things just to lower taxable income.
There are often extra costs involved with being an independent contractor. There are also more headaches. At the end of the day, you will probably increase your net earnings for the same amount of anesthesia.
Beyond Anesthesia
There are endless investment opportunities outside of anesthesia all with varying success. We should all strive to have our dollars work as hard for us as we did to earn them. The easiest way I have found is to invest in low-cost, passively-managed index funds. This provides market returns with minimal fees and minimal effort. I use a dollar cost averaging strategy every Monday morning to ensure I catch all market moves.
Many look towards real estate which can be a great avenue after building a financial foundation. Real estate is more labor intensive than the simple “click to purchase” index funds. That being said, the returns in real estate are potentially far higher than the returns in a broad market index fund. These returns require more of your time. Time that could be spent giving anesthesia with a guaranteed income.
If the income from my day job was lower, say $20-$50 per hour, actively-managed real estate would be far more desirable than it is today. Knowing that I can earn a couple thousand dollars working a single shift, it would require every day away from anesthesia to produce 4 digits of net worth increase.
There are an endless number of business endeavors that can supplement or even replace one’s anesthesia income. Again, the factor is time. Entrepreneurs rarely turn a profit from the start. It takes time. Time that could be spent giving anesthesia and earning $9,500 per week. Still a slave to the paycheck, but only until the portfolio returns really produce. Production starting around $1M: The New Starting Line.
This is quite literally an endless topic with an infinite number of results. That being said, just know the opportunities are there. Undertake new adventures as you see fit. I’m always interested to learn what others are doing and what they have found success with.
In summary
Anesthesia providers have an amazing income. An income that propels most CRNAs to the upper-middle class within a year or two. Income that erases student debt in a couple years. Income that builds a $1M shortly there after. Income that allows for early FI.
Control the major expenses and don’t worry about the small stuff. Enjoy the little luxuries and life. Don’t sweat the $7 lattes or eating out on the weekends. Sure, there’s a balance, but a single gas passing shift pays for a latte every day of the year.
Up your income. This can be done with base compensation, overtime, or local work. All of which can be negotiated. Thanks for reading. Check out any of the links for more on that topic. If you haven’t looked into the course as a tour guide for your finances, check it out here.
