Most Replayed Moment: Stressed About Money? Nischa's Step-by-Step Guide To Financial Security

Nischa Shah is a former investment banker and chartered accountant who helps people build financial security with clarity and intention. In this moment, she explains why so many people live paycheque to paycheque, even at higher incomes, and the first practical steps to taking back control of your money. Nischa outlines a clear framework that you can start today to build long-term financial stability. Listen to the full episode here: Spotify: https://g2ul0.app.link/6O48GqqCC0b Apple: https://g2ul0.app.link/EkemE5sCC0b Watch the Episodes On YouTube: https://www.youtube.com/c/%20TheDiaryOfACEO/videos Watch Nischa On YouTube: https://www.youtube.com/@nischa

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:04Steven Bartlett?

  So if someone's listening to this right now and they resonate with this idea of they're slightly avoidant, they don't really have a plan, they're kind of just, they get paid, they answer their bills and then they wait till the next payday, they're not being intentional with their money, is there a step one in taking back control?

• 0:20Speaker 01

  The very first thing, number one, that I would say to do is build a peace of mind fund.

• 0:26Steven Bartlett?

  A peace of mind fund?

• 0:28Speaker 01

  This is not about maths, it's not the mathematically optimal thing to do, but it is the psychological, because as we've discussed, money is as much about emotions as it is about numbers. So what I'd say is go through the last 30 days of your bank statements and calculate exactly how much it costs for one month of your living. So mortgage, rent, utilities, bills, minimum debt payments, car payments, whatever that total is, that's the amount that you want to save up for your peace of mind fund.

• 1:04Steven Bartlett?

  Okay, so I go through my last 30 days of my bills, I find out that it's cost me, let's say a thousand dollars.

• 1:11Speaker 01

  Okay, that's one month of your core living expenses.

• 1:15Steven Bartlett?

  Yeah, so I need to save one thousand dollars.

• 1:17Speaker 01

  You don't need to invest it, you don't need to save it, you don't need to, it's not for a holiday. The reason why you want to save this is because when life does what it does best, which is throw curveballs, you want to make sure that you have it handled. If a boiler breaks, your car dies on a Monday morning, the last thing you want on top of the stress of dealing with that thing is the financial stress of how you're going to pay for it. That's what this thing covers. It tells you, I've got peace of mind, whatever life throws at me, I can handle it. And saving that one month of living costs puts you ahead of 59% of Americans and 30% of people living in the UK.

• 1:56Speaker 01

  59% of Americans unfortunately can't pay for a $1,000 expense and 30% of people in the UK can't cover one month of their living expenses if something happened.

• 2:07Steven Bartlett?

  What is, what is step two in that regard?

• 2:09Speaker 01

  Step two, this is where we do move into the mathematical optimal thing. This is you cut the financial bleeding.

• 2:16Steven Bartlett?

  Okay.

• 2:17Speaker 01

  And what I mean by that is I get so many, so many times people ask me, Nischa, I have four thousand, five thousand sitting in my bank account, what should I do with it? And my first question back to them is, do you have any high interest rate debt? Because if you have savings of two thousand dollars earning four percent, but you also have credit card debt at twenty percent, you're leaking money more than you're making it. It's like pouring water into a bucket with holes in it and wondering why it's not going to fill up. So what you want to do is you want to take all of your debt that you have, rank it from highest to lowest.

• 2:50Steven Bartlett?

  In terms of interest?

• 2:51Speaker 01

  In terms of interest rate. And then everything above eight percent, you, you want to make minimum payments across everything first. And then everything above eight percent, you want to throw your extra savings into the highest interest rate first, to the debt with the highest interest rate, and then move down in that order.

• 3:05Steven Bartlett?

  And interest rate, is that paid monthly or yearly?

• 3:08Speaker 01

  It's paid monthly.

• 3:09Steven Bartlett?

  It's paid monthly. So if I have a thousand pound loan on a credit card and the interest rate is ten percent, I'm paying a hundred pounds?

• 3:17Speaker 01

  Paid monthly, over the year, they're going to pay a hundred.

• 3:20Steven Bartlett?

  Okay.

• 3:20Speaker 01

  But that's split out into monthly payments, assuming that they're not drawing down more on that credit card.

• 3:25Steven Bartlett?

  Are you against credit cards?

• 3:28Speaker 01

  Credit cards are good if you're using them the right way, really good if you're using them in the right way. And that means the points that you're using, the rewards that you get for it, the bonuses that you get from it, all really helpful, only if you're paying them off in full every single month. If you're not using that, or if you're not doing it in that way, which is kind of what they want you to do, because they want you to miss these payments, because that's how credit card companies make money, are your missed payments. If you're not doing that, then the benefits just don't weigh up.

• 3:55Steven Bartlett?

  Okay.

• 3:55Speaker 01

  It doesn't make sense. Use credit cards, but use it in a way that stacks up in your favor, not in the credit card company's favor.

• 4:01Steven Bartlett?

  It's almost paradoxical that you'd use a credit card, but only if you can afford to use a credit card.

• 4:05Speaker 01

  Yeah, that's exactly, yeah, you've got to, you've got to think about it. Can I, can I pay for this thing outright in cash? If I can, then I could ship it on my credit card. And that's the, the norm is property, if you're using it to make money, healthcare, education, but if anything else, unless it's making you money, yeah, you, that's the way you want to think about it, because it does encourage extra spending otherwise.

• 4:26Steven Bartlett?

  Okay, so I'm going to pay off my high interest debts first with any spare cash that I have.

• 4:31Speaker 01

  Yeah.

• 4:32Steven Bartlett?

  What's number three?

• 4:33Speaker 01

  Number three is build your emergency buffer.

• 4:37Steven Bartlett?

  Okay.

• 4:38Speaker 01

  So this, this is your core living expenses that we've already calculated in step one. And you want to times that by three if you are single, you have predictable income.

• 4:52Speaker 01

  Or you want to times that by six if you are head of household, you have a mortgage, you have unpredictable income. That's your emergency cushion. And it protects you from the bigger life things. It's a very, it's the third thing you want to do. It protects you if you lose your job, if you have a health scare, if there are dependents that you need to care for. This kind of buys you that time. But there's really interesting research from Vanguard that actually showed saving three to six months of your living expenses does more for your emotional wellbeing than earning over two hundred K.

• 5:25Steven Bartlett?

  So just the peace of mind again.

• 5:27Speaker 01

  It's that breathing room, yeah, three to six months of breathing room in your bank account. It just moves the needle. It's the peace of mind, it's the security, it's the stability. One of the core human needs. And it's interesting because we, we're kind of looking at making more money and earning more. And we're chasing the next number. And actually, the thing that's going to have the biggest impact or move the needle on our financial wellbeing is

• 5:50Speaker 01

  at this stage, having that three to six months of living expenses saved up.

• 5:53Steven Bartlett?

  It's all relative, right? At the end of the day, so if, and it's incredibly stressful. And I've been there when you don't know if you can pay this month's rent, if you don't know if you can feed yourself. But also the sort of back of the mind knowledge that if something were to happen, you'd be screwed. It's incredibly stressful way to live and you might not even realise the stress consciously, but you might just feel it. It might just be an angst in your life.

• 6:17Speaker 01

  Yeah, and I, this applies at any income level, even people earning six figures who are living paycheck to paycheck, who don't have that emergency buffer in place. They have that anxiety and also that same report showed that having that three to six months with the, the people that they surveyed, their productivity at work was better just from knowing that they didn't have that financial stress.

• 6:37Steven Bartlett?

  I know millionaires, people that have a lot of money, that are in a similar position in the sense of they are stressed and anxious because their overheads are also in the millions every month and there's a lot of money coming in, but there's a lot of money going out. So they're still sometimes just one or two months away from being at zero.

• 6:54Speaker 01

  Yeah.

• 6:54Steven Bartlett?

  It's a different type of stress because their subjective experience and lifestyle is better on a day to day, but it's interesting that it's really relative to your outgoing.

• 7:04Speaker 01

  Exactly.

• 7:04Steven Bartlett?

  What's the, what's the fourth point then? So I've got so far, I've got have a peace of mind fund, which is one month's expenses. Number two is pay off high interest rate debt. Number three is build an emergency fund, which is three times your monthly expenses if you're single and six times if you're in a relationship and there's people depending on you.

• 7:22Speaker 01

  Yeah. Most people actually stay here.

• 7:26Steven Bartlett?

  Okay.

• 7:26Speaker 01

  A lot of people just save, save, save, save, save. And I just want to, before we move on to step four, I want to say that if you're saving, you only want to save for one of two things, the emergency fund and the peace of fund, mind fund that we spoke about. And the second thing is for any goals that you have in the next five years, whether that's a house deposit, car deposit, other than that, you don't want to be saving that money. It's going to be, the value is going to be eaten away quicker with inflation if you're just keeping it saved in a bank account. So that's when you want to move on to step four and that is investing.

• 7:58Steven Bartlett?

  Okay. So you don't want to save, you don't want to over save.

• 8:00Speaker 01

  You don't want to over save. Know when to stop saving and start investing.

• 8:05Steven Bartlett?

  And when does one start investing and stop saving?

• 8:08Speaker 01

  After they've saved a three to six months of their living expenses.

• 8:10Steven Bartlett?

  Okay.

• 8:10Speaker 01

  That's the third step. At that point, once they've done step one, two, three, this is the point. And the reason why I say this, Stephen, is because if you start investing before you've got from steps one, two, three, and you don't have your savings set aside and the market goes down and you have an emergency, you're going to have to pull that money out at a loss.

• 8:27Steven Bartlett?

  Yeah.

• 8:29Speaker 01

  Or you're going to have to go into debt, which is why that was step two, cut the financial bleeding. So it's really important to have steps one, two, three done before you even think about investing.

• 8:39Steven Bartlett?

  Okay.

• 8:39Speaker 01

  Those three to six months is your core living expenses. So it's. Forget all your spending on the things that you love or the things that make life good. It's just the things that you need to absolutely survive. Because if you do lose your job, you're not going to be out partying and spending loads of money. You're going to think, okay, how do I pay my bills for the next three months? How do I survive for the next month? That's the thing that's going to cover that off.

• 9:03Steven Bartlett?

  Okay, great. So it's not like the season ticket at Manchester United, all the Louis Vuitton jackets.

• 9:09Speaker 01

  No, no.

• 9:09Steven Bartlett?

  It's just your heating, your bills, your food, survival.

• 9:13Speaker 01

  Yeah.

• 9:14Steven Bartlett?

  So number four is investing?

• 9:15Speaker 01

  Number four is investing. For a while, we've heard of the phrase save for retirement.

• 9:22Steven Bartlett?

  Yeah.

• 9:22Speaker 01

  Saving for retirement. You cannot save your way to retirement. With the way cost of living is going, with the way inflation is going, with the price retirement is going to cost by the time you get there. Saving is just not enough. You have to be investing your money. And there are two main ways that you can invest. But before I even say that, most people know that they should be investing, but they don't do it. They say, I'll do it tomorrow or next week or next year.

• 9:49Steven Bartlett?

  Or when I'm rich.

• 9:50Speaker 01

  Or when I'm rich. And then by the time they do start, they've missed out on the most powerful lever that they had going for them, which is time. That is one of the most important things when it comes to investing.

• 10:03Speaker 01

  Because of the way, when you start investing with small recurring amounts, it just compounds over time. So early, often, when it comes to investing, there's two avenues to invest through. The first is through your employer sponsored retirement account. And the second is through your own individual tax advantaged account.

• 10:22Steven Bartlett?

  What are those two things?

• 10:24Speaker 01

  The first is done through your employer. So what they do is they invest on behalf of you. In the UK, you're automatically enrolled into it. In the US, you'll have to check with your HR and get yourself enrolled into it. And what this does is your company, before it pays you or puts money into your bank account, it takes a small percentage. You could decide how much, and it puts it towards investments. For you, on behalf of you, pre-tax. So you're not paying tax on that amount. You're putting it into an investment account and then that money is compounding for you pre-tax.

• 10:54Steven Bartlett?

  Do all employers do this?

• 10:55Speaker 01

  Most employers do it, not all employers do it. And some employers have a match, which means if you put some money in, they will also match that amount that you're putting in.

• 11:05Steven Bartlett?

  So how do I know if my employer does this?

• 11:06Speaker 01

  Check with your HR.

• 11:07Steven Bartlett?

  And is there a cap?

• 11:08Speaker 01

  There is a cap to how much they will match.

• 11:10Steven Bartlett?

  Yeah.

• 11:11Speaker 01

  Um, so say if they match up to three percent, then you want to put in the three percent. But then you could keep going, but at this stage, you don't even need to go over the match at this point of the, the steps. You just want to put in enough to meet that match because you're getting the tax benefit and then you're also getting free money from your sponsored plan on top of that. You don't want to leave that on the table.

• 11:30Steven Bartlett?

  And when can I pull that money out?

• 11:33Speaker 01

  When you retire at retirement. So this is for your retirement. You're looking after your future self. It's today's you planting seeds for future you. That's what this is about.

• 11:42Steven Bartlett?

  What about people that say, listen, retirement's a long way away?

• 11:45Speaker 01

  Yeah.

• 11:45Steven Bartlett?

  You know, I'm, I'm going to be, what, sixty five, seventy five? It's just a long way away. I want to live a good, I want to live it up now.

• 11:52Speaker 01

  Yeah.

• 11:54Steven Bartlett?

  I don't want to be putting money in a box that I can't open for fifty years.

• 11:57Speaker 01

  And you want to spend the money now to live the good life?

• 11:59Steven Bartlett?

  Yeah.

• 12:01Speaker 01

  I, the most important thing when it comes to money is understanding what you want and then making sure your money backs those decisions. And I say this because when I was in the graduate scheme, there were two very different people who worked in my team. And the first person who sat opposite me on the bank of seats in front of me, he used to come in in his Ferrari. And he, on Monday morning, when we were talking about what we did over our weekend, what we did on the weekend, he would talk about the Michelin star restaurants he tried, the last minute trip to Italy, and his computer screen was the next car that he wanted. And on my left was Phil, who later became my mentor. And he came in with his packed lunch. He wore the same shirt tie combo that I could probably remember it and sketch it from memory.

• 12:45Speaker 01

  And he had his holidays, he had his vacations, but he was a lot more selective about them. And I didn't see it at the time, but now it's so clear to me that they were chasing very different things. The person opposite me, he was chasing this good life, this stories, the status, the memories, and that was important to him, and he went for it. But Phil, and I visited him just before I came to LA, him, his wife, his two kids, dogs, in their countryside home, and he was enjoying the retired life. He was loving life, he bought what he wanted, which was early retirement, freedom, time, choice.

• 13:27Speaker 01

  Neither path is wrong, but both paths, both people required taking a series of trade-offs.

• 13:33Steven Bartlett?

  Uh huh.

• 13:35Speaker 01

  Both had to make some sacrifices, and I think that's the thing that people miss. Sometimes it's so easy to say yes to the thing right in front of you, because the benefit is there, the benefit is immediate. You don't realise what you're going to miss out on later on in life.

• 13:47Steven Bartlett?

  So the guy that was sat opposite you with the Ferrari, what was the trade-offs he was making?

• 13:51Speaker 01

  He was probably going to be, end up working for the, until he had retirement money to spend. He was going to spend his life at banking, but he was going to live it big, but he wouldn't have the freedom, the choice, the time, because his spending and his income matched each other.

• 14:07Steven Bartlett?

  Uh huh.

• 14:08Speaker 01

  And so what I want to just say is, for anyone saying, oh, I just want to live it big, I want to enjoy the money, find out what is the thing that's most important to you, and make sure your money choices stack that decision, because the wrong choice isn't choosing the wrong path, it's just not knowing that you even had a choice in this whole thing.

• 14:26Steven Bartlett?

  Do you think the guy that sat opposite you with the Ferrari was in any way insecure? Was there an element of seeking validation?

• 14:35Speaker 01

  There might have been, yeah, there might have been, that's, that might have been what made him happy, but I think it's also not having the self-awareness to, if that made him happy, then by all means, but if it didn't make him happy, and a lot of people do that, do this, me included, I've, I've gone through this, I've done it, when you don't know what makes you happy, you end up just doing things that gets you that external validation. And for some people, it might mean, okay, you know what, I actually do enjoy this new car, it does bring me happiness, but for others, it might just be a facade, and later on, they, and later on in life, they just realise that actually no one really cared. The only person who cared was me, and although I did it for other people, it's now I realise that all the trade-offs I had to make as a result of it.

• 15:17Steven Bartlett?

  Because happiness and external validation, they're like cousins.

• 15:21Speaker 01

  Yeah.

• 15:21Steven Bartlett?

  But they're not the same guy. Do you know what I mean? They're like, they look, they're kind of like of the same family, but one of them's the like dysfunctional sibling. But they kind of look the same, you know? You look at that guy in his Ferrari, you go, oh, must be happy. And he comes in and he's probably got a smile on his face because he's talking about his Ferrari.

• 15:39Speaker 01

  Yeah, yeah, yeah. And that's what he's built himself on, I guess.

• 15:42Steven Bartlett?

  But I don't know if that's happiness. You know, the guy without the Ferrari might be.

• 15:46Speaker 01

  I think universally, most people, what they want is the freedom and the choice and the time. I think more people are after that. And that can make more people happier than any status symbol. Because when you do end up going down the route of buying something to make you happy, you're on a hedonic treadmill, but then buying the next thing and the next thing and the next thing. You get those spikes of happiness that never is really long lasting, fulfilling happiness.

• 16:16Steven Bartlett?

  So investing strategy number one is asking your employer about their investment scheme?

• 16:20Speaker 01

  Finding out if your employer has, yeah, a retirement plan and making sure that you're invested into it enough to cover the match that they offer.

• 16:28Steven Bartlett?

  What's strategy number two?

• 16:30Speaker 01

  The strategy number two is your own individual tax advantaged investment account. This is ISA in the UK. And this is where you put your own money after tax into an investment account. And then the money grows over time, tax free. So when you pull it out at the end, you could, with the UK, you could pull it out in five years and 10 years. Or in retirement, then you could withdraw that money tax free. So both of them have tax advantages. One is when you put the money in, you're getting the tax advantages. The other one's when you draw the money out, but they both have tax advantages. And so you're putting the money in and it's growing tax free. That's really a big deal. That's huge. That's money that's compounding for you and you're not paying tax on that.

• 17:12Steven Bartlett?

  But there's a limit.

• 17:14Speaker 01

  There's a limit annually, it's 20,000, but.

• 17:17Steven Bartlett?

  In the UK and the US?

• 17:18Speaker 01

  It changes year on year. At the moment, I believe at $7,000, but with a quick Google search, you could stay on top of whatever the current limit is for the account or the tax advantaged account that you're investing in.

• 17:29Steven Bartlett?

  So I get paid, I put it into my, in the UK, it's called an ISA.

• 17:32Speaker 01

  Yeah.

• 17:33Steven Bartlett?

  And the limit is 20K. So if I put 20K in, let's say.

• 17:37Speaker 01

  Yeah.

• 17:37Steven Bartlett?

  If it goes to 100K, because the investments go really well. Is the whole hundred K tax free?

• 17:44Speaker 01

  Yeah, you're not paying capital gains tax, you're not paying interest, I mean, sorry, dividends tax.

• 17:49Steven Bartlett?

  So pretty much that's the first place everyone should really be investing if they want an alternative to investing in their pension.

• 17:54Speaker 01

  Yeah, that's the first thing you want to cap out because of the taxable benefits that come with it.

• 18:00Steven Bartlett?

  Is it called a Roth IRA in the US?

• 18:02Speaker 01

  That's right.

• 18:03Steven Bartlett?

  So his max contribution is seven thousand to eight thousand dollars a year if you're fifty or older.

• 18:10Speaker 01

  Yeah, the specific amounts depending on.

• 18:12Steven Bartlett?

  Who you are.

• 18:13Speaker 01

  Where you are, yeah.

• 18:14Steven Bartlett?

  Standard employee contribution limit of twenty three thousand dollars, interesting.

• 18:16Speaker 01

  Whereas in UK, it's just a flat twenty thousand is the current.

• 18:22Steven Bartlett?

  And with my ISA, this tax free ISA that everyone is eligible to invest in, do I then have to pick the things it invests in?

• 18:30Speaker 01

  Yes.

• 18:31Steven Bartlett?

  Okay.

• 18:31Speaker 01

  This is the next, oh, we could talk about this now, actually, yeah. So when you are deciding what to invest in, this is with the employer sponsored account, the employer sponsored retirement account, you actually just choose what risk profile you have and it will do that investing for you.

• 18:46Steven Bartlett?

  So you'll say, I'm, I feel really risky or I'm not very risky at all.

• 18:49Speaker 01

  Yeah.

• 18:49Steven Bartlett?

  And it does it for you?

• 18:50Speaker 01

  And it does, it will invest on behalf of you.

• 18:52Steven Bartlett?

  Yeah.

• 18:53Speaker 01

  And so most people don't even realise that they're investing, but they are investing through their company if they have that employer sponsored plan.

• 18:59Speaker 01

  Then the individual account is you doing the investing yourself, you're picking what to invest in, yeah.

• 19:06Steven Bartlett?

  And what should I invest in?

• 19:07Speaker 01

  My principle with investing is very, very simple and it's just keep it, keep it simple and do it for the long term. So I say index funds and target date retirement funds is what you want to invest in.

• 19:18Steven Bartlett?

  What's that?

• 19:19Speaker 01

  An index fund, let's put out an index, think of it as a list of companies. So the S and P five hundred is a list of the largest, the top five hundred companies, to keep this really simple. Thirty one hundred is the top one hundred companies in the, on the London Stock Exchange. The fund is a pot of money that invests in the companies on that list. So by investing in an S and P five hundred, you've invested in a small piece of the top five hundred companies in the US. That's what an index fund is. And so even if one company goes down, you're diversified. And so there'll be another company that will, and the other companies will bring it back up again.

• 20:03Steven Bartlett?

  And what kind of performance can I expect from investing in the S and P 500?

• 20:07Speaker 01

  Historically speaking, the long term average has been eight to 10% per year, depending on the years and the timeframe that you're looking at. That is different to a one year holding period. It could go up, it could go down, you just don't know. So the longer you invest for, the chances of you getting that eight to 10% on average increase.

• 20:29Steven Bartlett?

  Is eight to 10% going to make me rich though, Nischa?

• 20:32Speaker 01

  How long are you doing it for?

• 20:34Steven Bartlett?

  You tell me.

• 20:36Speaker 01

  If you have a lump sum amount that you're like, okay, you know what, I have 2,000 that I want to invest. What should I do with that? It's taken me five years to invest this. I would say 1,900 of that, don't invest it. 100 of it, invest. I'll say why I'm saying this, 100, I want you to invest it, for anyone listening, I want you to listen. I want you to invest that because I want you to see and feel the emotions when you see your money go up over time. Sure, it's going to be small, it's not going to make you rich investing that. But you're going to instill that good habit early on and you're going to remember that. Because the remaining amount, you're going to put that towards increasing your income. That's the first thing you're going to do.

• 21:21Speaker 01

  Think of your income as a river and your specific milestones, life milestones as buckets across the river. So you have retirement, you have your house deposit, you have your car payment that you're all saving up for. Those buckets will fill up faster, the quicker and wider that river is. That is your income that's coming through. If you don't have much of an income coming through, those buckets are going to take ages to fill up. That's why I say if it's taken you a long time to save that amount, I actually would recommend you putting that money towards increasing your income first. Before investing it. If however, you have disposable income, you have a reoccurring amount that you can invest

• 22:03Speaker 01

  monthly, use that to your advantage, harness the power of long-term compounding growth because that is the thing that is going to make you rich. Sure, it will take twenty five, thirty years, but that is leverage that you don't get through your day job. It's your money working for you without you having to be there.

• 22:20Steven Bartlett?

  So you would suggest if you're really at that early level to focus on increasing your income, investing in increasing your income?

• 22:26Speaker 01

  Yeah, that's the first thing. If you're figuring out, okay, I need to increase my income. It's taken me a while to earn this amount and I only have a lump sum of two thousand, five thousand. Focus on increasing your income. Yeah, that's what I would say.

• 22:39Steven Bartlett?

  And how does one focus on increasing their income?

• 22:41Speaker 01

  There are a couple of ways to do this. So the easiest way to increase your income is asking for a pay rise, increasing your responsibility, the work that you do, your contributions, and saying to your boss or your manager, this is the value that I've bought, this is the responsibility that I've taken on, this is what the market is paying for a similar role, and this is why a pay rise is fair.

• 23:08Speaker 01

  The other option.

• 23:09Steven Bartlett?

  Did you ever ask for a pay rise?

• 23:10Speaker 01

  Multiple times, multiple, multiple times.

• 23:13Steven Bartlett?

  When you were in investment banking?

• 23:14Speaker 01

  Yeah. It's one of those things where if you don't ask, you don't get. Of course you'll get, but you sitting there and thinking the hard work is going to show without you asking for it, it's unlikely. You're going to have to build a case and say, okay, these are the things that I've done. This is the things that we said we were going to do or I wanted to work on in my performance review, which is what I had. Get to the end of the performance review and these are the things I actually did and this is where I went above and beyond.

• 23:44Steven Bartlett?

  So if I'm your boss, Nischa?

• 23:46Speaker 01

  Yeah.

• 23:46Steven Bartlett?

  If we just replay one of those conversations you had?

• 23:49Speaker 01

  Yeah.

• 23:49Steven Bartlett?

  You were sat in a performance review and what did you say to me?

• 23:54Speaker 01

  I would say, hey, Stephen.

• 23:56Steven Bartlett?

  Hey.

• 23:56Speaker 01

  Three months ago, or six months ago, we spoke about the things that I needed to do to get promoted or to get a pay rise. And we mentioned X, Y, Z. And I've done all of those things here and here is the feedback that I've got. Here is where I've gone above and beyond. And this is some extra things that other people, or the three sixty feedback that I've done and that this is what it says.

• 24:24Speaker 01

  Yeah, and that's when I'll say, do you think that this is the bracket that we discussed? Do you think that's fair?

• 24:30Steven Bartlett?

  Research shows that women are much less likely to ask for a pay rise. And when they do, they are less likely to get one compared to men.

• 24:40Steven Bartlett?

  Is that kind of what you found?

• 24:42Speaker 01

  Yeah, I've seen those facts and I think it's really such a shame that when a woman asks for a pay rise, it may not be seen in the same way as when a male counterpart asks for the pay rise. And the factors that we can control are the being prepared, having the book of all the things that you've done. But I recommend, and this is things that I've done when I was in an organisation, when I felt like even I was being paid less than my male counterpart, is speaking firstly, if there's a HR team in your department, speaking to them and asking, am I online or am I aligned to the average for my department and for what my role is? They could give you a really good guideline as to whether you are underpaid

• 25:27Speaker 01

  or whether you deserve a bump to be more aligned to the general pay in that role. And the second thing is have an ally or have someone in your workplace that you'd always speak to, whether it's a mentor, whether it's a colleague. And it's worth always speaking to other people about money. It's such a taboo topic.

• 25:47Steven Bartlett?

  Yeah.

• 25:48Speaker 01

  We hate it. We hate talking to someone else about their salary, what they're making. But the more financial transparency that we encourage, the more we can learn from each other.

• 25:58Steven Bartlett?

  Yeah.

• 25:58Speaker 01

  Openly ask the person next to you, hey, this is what do you get paid? As much, as hard as that is, open up that conversation. But the other way to increase your income is actually through switching jobs, switching companies. Because there's so much research that's been done.

• 26:17Speaker 01

  And the most popular one is actually one cited by Forbes. That says people who stay at the same company for two years or more on average earn 50% less over their lifetime.

• 26:31Speaker 01

  And I've made a video on my salary year by year over the last, over the nine years I spent in banking. And the biggest pay jumps that I saw were from switching companies. So those are the two ways that I would actually say, yeah, increase your income by asking for more or by switching.

• 26:53Steven Bartlett?

  What you just listened to was a most replayed moment from a previous episode. If you want to listen to that full episode, I've linked it down below. Check the description. Thank you.