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Inflation is rising, raises are not: How to ask for more money the right way

(FINANCE) It’s no secret that prices are increasing due to inflation, but end-of-year raises are not. What this means for businesses and employees.



inflation ahead sign

From groceries to gas prices, Americans have been feeling the effects of inflation. With inflation reaching a three-decade high and the annual inflation rate skyrocketing to 7% in the last month of 2021, many Americans are left wondering how long it is going to last, what has caused it, and how, if possible, can we remedy this issue?

Inflation spiked in 2021 due to COVID-19 induced supply constraints, soaring energy costs, labor shortages, increased demand, and, finally, low base effect from 2020. When ultra-low inflation is experienced the previous year, even a small rise in the Price Index can cause high inflation. The biggest contributor to the gain was energy, which rose to 33.3%, as compared to November’s 29.3%.

Fuel prices surged, rising from 49.6% to 58.1%. Shelter prices rose from 3.8% to 4.1%. Food costs jumped from 6.1% to a whopping 16.3%. As if a car shortage, brought on by limited production capacity, wasn’t bad enough; the cost of both new and used vehicles rose as well. New vehicles had a .7% increase (11.8% vs the previous 11.1%) and used vehicles saw an increase of 6%, with prices climbing from 31.4% to 37.3%. Finally, the cost of medical care services rose from 2.1% to 2.5%, which is not exactly ideal in the middle of a large-scale pandemic, where expensive medical treatments may be needed to combat the effects of COVID-19.

So, how long must Americans endure inflation and its effects? While experts aren’t exactly in agreement, inflationary pressures are thought to be likely to last well into the middle of 2022, where inflation will become moderate instead of high, and unfortunately, this seems to be one of the better case scenarios, with some experts expecting it to continue at a fairly steady rate for several years.

It’s hardly a secret that the cost of living has skyrocketed, while Cost of Living Adjustments (aka COLA’s) are not ample enough to keep up with an ever-increasing cost of living. Many employers do offer small cost of living increases annually. However, inflation outpaces the Cost of Living Adjustment increases. Sadly, employees can usually only receive a salary bump by leaving for another job, with more competitive pay. This, compounded with the “Great Resignation” currently underway is causing a mass exodus of workers and thus contributing to the labor shortage. Even large companies, such as Apple, who give an annual Cost of Living (COL) increase, cap it at around 3%. This is insufficient because employee living expenses rose to around 7%, therefore employees actually lost 4%, despite the raise.

Employers who can (such as the aforementioned Apple), should be making increases that match inflation if they expect employee retention. It would actually be more expensive for larger companies to attract, hire, train, and onboard new employees than it would be to match the COL for every employee. Despite all businesses being hit hard by the pandemic, they need to act quickly, if they want to retain their employees.

Beyond businesses adjusting their COLA to salaries at the rate of inflation, the burden of inflation reduction relies on the government. There are several things the government can do to help inflation, however, that could lead to unintended consequences. The government can use wage and price controls to help combat inflation, however, it can lead to recession and job loss. Governments can also put reserved requirements into place which places controls on the amount of money banks are legally allowed to keep on hand to cover withdrawals. Lastly, the government can implement a contractionary monetary policy that fights inflation by reducing the money supply in a given economy, via decreased bond prices and increased interest rates.

Jerome Powell, Chair of the Federal reserve, to contain the inflation surge, will include raising interest rates. Interest rates tend to have an inverse effect on the economy, meaning when interest rates are high, inflation tends to be low, when interest rates are low, inflation tends to be high. This works because high-interest rates slow businesses, which in turn, lowers inflation.

Despite businesses being hit hard in the pandemic with many businesses still recovering, businesses need to offer more competitive COLAs that match inflationary rates in order to keep their workers. The government needs to implement higher interest rates, to help lower inflation hopefully without further hampering already struggling businesses. Powell pro tighter monetary policies and is optimistic his plan to lower inflation over the course of the next year will be successful, starting in March. This, combined with a strong economy, and coupled with the pandemic hopefully winding down could lead to a booming job market with low inflation and an even stronger economy

Nicole is a recent graduate (okay fine, a recent-ish graduate) of Texas State University-San Marcos where she received a BA in Psychology. When she's not doing freelance writing, she's doing freelance Public Relations. When she's not working, she's hanging out with dogs or her friends - in that order. Nicole watches way too much Netflix and is always quoting The Office. She has an obsession with true crime and sloths.

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Business Finance

Win over investors immediately with a great 1st impression

(FINANCE) First impressions are everything, and it’s no different when it comes to approaching investors. We have the tips to win them over.



first impression handshake with investors

Going in for your first pitch meeting with investors can be nerve-wracking – especially if you haven’t yet met these investors in person. Fortunately, if you land a solid first impression, you can set the right tone for the meeting, and make the rest of the presentation a little easier on yourself.

But why are first impressions so important, and how can you ensure you make one?

Let’s start with a recap of the benefits of a strong first impression:

    • A reputation framework. Our brains are wired to make quick judgments about our surroundings. Accordingly, we tend to judge people based on our first interactions with them, with little opportunity to change those initial judgments later on. If you strike investors as a smart, likeable, and capable person early on, they’ll see your pitch deck in a whole new light.
    • Memorability. First impressions stick with people. If yours stands out from the other entrepreneurs pitching these investors, they’ll be more likely to remember you, specifically, and therefore may be more likely to eventually fund your project.
    • Personal confidence. If you know you’ve nailed the first impression, you’ll feel more confident, and as you already likely know, confidence makes you a better public speaker. You’ll speak more deliberately, more passionately, and with fewer mistakes.

So how can you make sure you land this impression?

    • Arrive in a nice vehicle. Show up in a luxury vehicle, or at least one that’s been recently detailed, sends a message that you’re already successful. This isn’t a strict necessity, but it can speak volumes about what you’ve already achieved, and how you might look when you drive to meet your future clients.
    • Dress for the occasion. Along similar lines, you’ll want to dress nicely. You don’t need to have ridiculously expensive clothes, but you should wear standard business attire that fits you properly and has no signs of wear. It’s also a good idea to get a haircut, shave, wear tasteful makeup, and make other small touches that improve your overall appearance.
    • Smile. Smiling is contagious, and it instantly makes you more likable. Don’t force a grin (or else you’ll look like a robot), but do flash a genuine smile as often as appropriate during the first few minutes you meet your prospective investors.
    • Use your investors’ names. When you speak to your investors, try to address them by name as often as possible. People love to hear the sound of their own names, so it might help you win their favor. As an added bonus, it will help you reinforce your association with their name and face, so you eliminate your risk of calling someone by the wrong name later on.
    • Warm-up with something personal. It’s tempting to get down to business right away, especially because your investors’ time is limited, but in most cases, it’s better to warm up with something personal—even if it’s only a few lines of a conversation. Tell a funny joke you heard earlier in the day, or share an anecdote about how your morning has been going. It makes you seem more personable and charismatic.
    • Find a common link. If you can, try to find something in common with each of your prospective investors. You might comment that you got your tie at the same place they did, or that you use the same type of pen. Look for subtle clues about their personalities, lifestyles, and hobbies, and forge a connection through those channels. People disproportionately like other people like them, so the more commonalities you can find with your prospective investors, the better.
    • Watch your posture. Your posture says more about you than you might think. Keep your back straight with your shoulders back, and walk confidently with your hands out of your pockets. This is crucial for projecting confidence (and feeling it internally as well).

If you can land a great first impression, you’ll set the stage for a killer presentation—but don’t think you’re out of the woods yet. You still need to make sure you have a fantastic pitch deck in place, and enough knowledge on your startup idea to handle the toughest investor questions. If this is your first pitch, don’t worry – it does get easier – but the fundamentals are always going to be important.

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Business Finance

Follow these 7 steps to get outstanding invoices paid to you ASAP

(FINANCE) For a freelancer, it’s more important than ever to bring up the issue of getting paid on time. Here are 7 tips to get your money.



Handing over card representing getting paid.

For many, an awkward topic of conversation revolves around getting paid. Whether asking for a raise or asking to borrow money, people often feeling uncomfortable when talking money.

This is equally, or possibly even more so, true for freelancers who are solely in charge of their finances. Without a system of weekly direct deposit, freelancers have to work overtime to keep their earnings in order.

The issue with this is that clients also have a lot on their plates, and something as simple as a freelancer’s paycheck is common to fall through the cracks. This causes freelancers to have to work friendly reminders into their repertoire.

However, freelancers may not always be knowledgeable of the best ways to keep their finances in check (no pun intended). Below are seven ways to enhance payment methods.

  1. You have to be willing to make billing a priority. Due to the fact that money is awkward to talk about, as aforementioned, many let this fall by the wayside. The best way to do this is to keep up to date with your invoices and send them as soon as they are done. Making a calendar specific for billing can help with this idea.
  2. This second bit dates back to when we were young and learning our manners: it is crucial to be polite. Not only is it the right thing to do, but it also increases speed in payment. Using “please” and “thank you” in invoicing emails are said to get you paid 5% faster.
  3. It is best to try and keep a complicated concept like finance as simple as possible. Make sure you are creating specific due dates. This will help to signify importance of payment.
  4. Now that virtually anything can be done online, it would make sense to use electronic payment verses an old-school check. Accepting online payments will get a user paid, on average, eight days faster as opposed to a check.
  5. This is an important notion to keep in mind for any aspect of your business life: be professional. Invoices are often seen by many eyes so it is best to include your business’s logo on said invoice. This has been found to increase chances of being paid on time by 10%.
  6. Specificity is urged again in the form of transparency. Make sure you are giving detailed descriptions on each invoice so that anyone looking at it knows exactly what you are being paid for. By doing this, you are 15% more likely to be paid on time.
  7. While you may be invoicing month by month, try to avoid sending on the 30th or 31st. Being that everyone, generally, sends their invoices in on these dates, it takes 10 – 20% longer to be paid. With everyone sending it at the end of the month, it has a tendency to back up payroll.

The most important thing to remember is that while the topic of money may be awkward, it is your money. If you let a few invoices fall behind because you are uncomfortable reminding your client, this has a way of adding up. Be sure to keep on track with your finances to earn what you are working for.

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Business Finance

What small business owners need to know about succession planning

(ENTREPRENEUR) We’ve all heard the phrase “You can’t take it with you,” but succession planning provides peace-of-mind when leaving behind personal assets.



Two silhouettes of people looking out over the sunset to discuss succession planning.

Succession planning is a forward-looking strategy to ensure the “next in line” is prepped for what is to come. Within an organization, executives or management create a blueprint in hopes of a seamless transition of operations to “partners, future generations, or successor owners,” as Patrick Hicks, the Head of Legal at Trust & Will, states.

Succession planning can be useful in both professional and personal environments, including handing off entrepreneurial businesses or assets of any value. It’s important to create an Estate Plan for whom you plan to replace you in regard to property ownership.

Hicks says that, “Property rights are the cornerstone of modern society.” Property rights include the authority to determine how a resource is used or disposed of after death. This can include giving in a neighbor, a charity, or the most common choice, your family.

“Giving it all to family is typical but giving it all to non-relatives gets second looks. An estate plan is the manifestation of your wishes. It doesn’t matter if anyone else approves.”

It can come as a shock to hear if your assets are undesired by family- or even worse- if it comes as a surprise to them after a loved one’s death. Some choose not to communicate succession plans during one’s lifetime as it could damage familial relationships, but on the other hand, it could also provide a smoother transition. If an heir does not wish to take on the property, there is a chance for contest or litigation that could reduce the benefits of having a succession plan in the first place.

Another scenario is if your dependents do want a hand in property assets after death, but your wishes are to relinquish it elsewhere. Hicks says, “Typically, children do not have a right to claim their inheritance, unless some special rule applies.”

An example is if you leave behind a minor child or surviving spouse, where in that case, they may be entitled to receive support. This could include at least of share of property if no estate plan was in place. However, the necessary support can also be provided by the dearly departed through life insurance or another means.

“When it comes to estate planning, there are societal norms and bounds,” Hicks says, but ultimately, no matter the wishes, having a succession plan can provide peace-of-mind when thinking of the future.

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