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Cover image for My Biggest Mistake When I Started Earning Six figures

My Biggest Mistake When I Started Earning Six figures

nialljoemaher profile image Niall Maher ・4 min read

A Tale of Caution to Avoid My mistakes

I talk more about this whole situation here or keep scrolling to read. 💻

A Little Bit of Background

Just 12 months before I started earning over €100,000 a year, I was working selling fine wines in a small shop and building some websites between customers for people. I was earning €400 (before tax) a week or just over €20,000 per year, so I forgive myself a little for the huge mistake I made (from excitement) when my income was over the space of twelve months, literally multiplied. I had started earning €40,000 a year as my first "real" software development job and honestly still struggled a little from all of the debt and overdrafts I had accumulated over the years of working for little money and paying for rent, bills and food.

Fast Forward to Getting My First 6 Figure job

9 months into my first major web development role (which was a baptism by fire and a story for another day on how I ascended so fast) I got a call from a now good friend of mine about an interview for a "Senior" developer role. I of course, like most newer developers, coveted and wanted that "Senior" title. I wanted that title so much that I decided "f*ck it, I might not be ready, but I might as well see what kinda stuff they ask in those interviews". I went and to my own surprise actually nailed the interview, thus receiving an offer I wasn't expecting. 

The position was a contractor role with Bank of America which was going to pay me €475 per day on a 6-month contract(€75 more than I was making in a whole week 9 months previous). As you can imagine, I got very excited and decided I had to take the offer and become a contractor. 

5 months flew by, and I was ecstatic when I got a call to say they wanted to extend my contract by 12 months, this is when I stopped being cautious and assumed I would now and forever be showered in cash...

Over the weekend after getting this call, I went to a showroom and put a deposit on a brand new Mazda MX-5, a small sports car I always wanted. I was so proud of my achievements and so excited about at least 12 months more of this income I really did feel invincible. I even picked up the recruiter who got me the job in the first place in the car to celebrate over lunch. 

Two days into my new contract I then received an unexpected call...

"Hi Niall, there have been some budget cuts in the bank, and unfortunately they have decided to give you your notice of 30 days."

My heart sank into my stomach a little; I like the idiot I was, had spent every penny of my savings on buying that car, living beyond my means even with what I was earning and now had just lost my job. I had spent the money I had not yet actually earned and as a result, had left myself in a terrible situation. 

My Advice to My Younger Self Or You...

Don't spend money you haven't earned yet!

Stop trying to impress people with material things and look after your future self...

No matter how secure you feel, make sure you have a rainy day fund before anything else to cover yourself if you end up in a place where you lose your job. If you are getting something like a car loan or a mortgage at the very least wait longer than I did (at least a year or two) to make sure the change in fortune wasn't just a fluke and that you will be able to keep up with payments. Worrying about money is stressful, the high of feeling like a superstar is a lot less than the low of worrying about your next paycheque.

This may sound obvious, but trust me is much more difficult than it sounds when you are sitting in your dream car and have enough in your bank account to cover it. Things like the "Gamblers Fallacy" can kick in where we can think we have a lucky streak or that the odds are in our favour even though mathematically speaking nothing has changed. I after my fortunate year thought that it was now going to be a lucky streak. 

I missed 5 times in a row! I must be on a lucky streak

I Landed on my Feet

Thankfully, my friend who had gotten me that job lined me up a new one within a couple of weeks of that news which paid pretty much the same, so I survived that blow. I didn't spend a single day unemployed thankfully so I recovered (and still have that Mazda). 

I now invest money, have a rainy day fund (which still is being built) and try every month to see how I can improve my finances. This is a slow and tough mindset change, but it's something I know I need to work on so I don't ever want to have that sinking feeling again or the pain of growing more and more in debt every month. 

When you are not used to having money, it is a tough thing to learn how to respect money.


This article is for informational purposes only. It should not be considered Financial or Legal Advice. Not all information will be accurate. Consult a financial professional before making any major financial decisions.


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Discussion

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coly010 profile image
Colum Ferry

This is life advice beyond that of just a developer earning a lot of money and should be preached more.

If you're earning 25k/year and are surviving somewhat month to month and find yourself in a new job earning a lot more, yes, grant yourself some enjoyment with the increase in earnings, but also remember that you were surviving on the lower salary and therefore the increase is money that you can use to save and invest, without impacting your current financial situation.

I made similar jumps in pay in the past year, the first helped me to start getting debt on track, and the second is being used to, mostly, save and invest. I've never felt as financially secure in my life and it's a wonderful feeling, not worrying about the next paycheck.

It really allows you to focus on your family, job and daily life more.

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nialljoemaher profile image
Niall Maher Author

Absolutely, totally agree! I wish I knew a little more than money before I got it so fast...

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jwp profile image
John Peters

Nice post. I've shot myself in the foot before on a number of occasions. I try to avoid it now that I've learned my lesson. I haven't used a credit card now in over 20 years as a result.

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nialljoemaher profile image
Niall Maher Author

I have never got a credit card after that as a result.

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mancvso profile image
Alejandro Vidal Castillo

I will jump and defend credit.

It is a smart way to use your money to generate more money as long as yield of your investments are greater than the interests your are paying.

I mean, seriously, you can put all your wage to work and live on credit... as long as your total debt is lower than your total savings.

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nialljoemaher profile image
Niall Maher Author

Just credit cards! Not all debt is bad but here in Ireland there is no bonus for having a credit card. No nice rewards and it doesn't impact your credit score that much (unless you're bad with one).

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jwp profile image
John Peters

Credit card interest rates in the U.S. are 17% compounded daily, if one makes only the minimum payments the cards are never paid off. To put one's money to work it would have to earn more than 17% to have a positive cash flow. I see no way to do this consistently.

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anshulnegitc profile image
Anshul Negi

Great post though I just started acquiring financial knowledge and getting more into it.
Here is the book The Richest Man in Babylon I think will enough to change one mindset.

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nialljoemaher profile image
Niall Maher Author

I got gifted this book a few months after this believe it or not 😂

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Tomer Raitz

Very important article! thank you for this!

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nialljoemaher profile image
Niall Maher Author

Glad you think so 😁

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bc profile image
Brian Canzanella

Sound advice, thanks for sharing your story!

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nialljoemaher profile image
Niall Maher Author

Thanks for reading!

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andrewbaisden profile image
Andrew Baisden

A valuable life lesson good read I guess you learned from your mistakes back then :)

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iexa profile image
iexa

you were a lucky one to learn this lesson in such a fortunate way.