Why Negotiation Is Extremely High Leverage

Negotiation may take a few hours of time (and a bit of uncertainty/discomfort), but the result could be life-changing for you. In a place like Silicon Valley, where engineers are highly paid, successful negotiation could easily net you 5 or 6 figures of additional income.

In addition, an increase in salary will “anchor” your compensation and the benefit will compound since raises are based on this. e.g. a 5% raise is a larger dollar value compared on a $120K salary ($6K) compared to a $100K salary ($5K).

The Steve Ballmer story when he joined Microsoft is an example of one of the largest wealth increases ever due to negotiation: his net worth today is $120B (that's $120 billion!). Even though he joined Microsoft as employee #30 in 1980, he ended up negotiating 8% equity ownership of Microsoft, a deal that made him a billionaire many times over. (Read more about Steve Ballmer's deal here.)

The famous article from Patrick McKenzie (patio11) about negotiation: Salary Negotiation: Make More Money, Be More Valued