The self employed

"Thank you" is a powerful phrase. "Thank you" is a powerful phrase.

Gratitude and grace go hand in hand, which doesn't leave much room for push-back when you've been slighted, especially when it comes to money. Demanding a raise from an employer often feels a little like unwrapping a present and then telling the giver, thank you, but this really isn't going to cut it for me.

But no matter how remarkably skilled or utterly irreplaceable you are, no employer wants to pay you what you deserve. Most folks will save money by any means necessary, even if it's at your expense. It's not personal, it's business. Which is why the etiquette around gratitude changes in a professional setting. There are no battles won by taking your first offer — you only get what you negotiate for.

So forget everything you know about settling, and focus instead on what's next: how you're going to ask for a raise.

According to the New York Times, when you ask for a raise can be just as important as how you ask. So before you begin scripting your speech and prepping your Powerpoint, be sure to talk dates. First, set aside a substantial brick of time. This is important — this is your livelihood. It's not a case you want to make in passing, en route to another meeting.

Next, make a point to schedule your conversation in the aftermath of a personal success of yours — did you just win a big client? Publish a viral story? Ride that wave right into your boss's office. "You want to enter a salary negotiation on a high note, with indisputable evidence of the value you're contributing to the company," says Devon Smiley, a negotiation consultant. No matter how strong and consistent your work is, you want to walk in with numbers.

If possible, consider the fiscal calendar of your company, and determine when is the best time to ask for a raise. As much as we'd like to believe that our higher ups have the power to make financial judgement calls when they believe in them, we're all beholden to a devious, evil thing called budget cycles. "Even though discussions may not happen until April, for example, those budgets have been decided months earlier, and that is when you need to start laying the groundwork for your raise," says Ms. Smiley. Once you make your case, someone else needs to make that case to the finance department. Making sure the company is in a good financial position when you ask for your raise, can make that conversation as seamless as possible.

Once you've decided on a good time to talk to your boss, start collecting your materials. While it'd be great if the merit of your testimony was enough, numbers speak louder than words. Arrive with documents. Know what you're going to say. Treat this like a presentation you might have given in the 8th grade at a science fair. "One recommendation is building negotiation experience and training," says Dr. Alice Stuhlmacher, department chair of DePaul University's psychology department. "Practicing in low stakes situations can build confidence."

I received my first raise (a whopping 5k), having presented a six-page proposal to three different managing editors. The first told me the decision was over his head. The second told me it didn't make sense in the current context of our budget. The third made both cases before I told him I would have no choice but to look for positions elsewhere under these circumstances — an assertion that ran counter to everything my mother had taught me about decorum and gratitude. Not 24 hours later, I received a raise — and an apology.

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The Federal Reserve sets the guardrails for the federal funds rate, and through that helps control the money supply for the nation.

When you take out a loan for a car, charge something to your credit card, or get a personal line of credit, there is going to be an interest rate that applies to your loan.

A lot of different factors go into what you will be charged, including your own personal credit score. But even those with flawless credit still see a minimum charge that they can't get around. That all goes back to the Federal Funds Rate.

One thing consumers rarely realize is that all of our banks are lending money to each other every night. Banks are legally required to maintain a certain percentage of their deposits in non-interest-bearing accounts at the Federal Reserve to ensure they have enough money to cover any withdrawals that may unexpectedly come up. However, deposits can fluctuate and it's very common for some banks to exceed the requirement on certain days while some fall short. In cases like this, banks actually lend each other money to ensure they meet the minimum balance. It's a bit hard to imagine these multibillion-dollar financial institutions needing to borrow money to tide them over for a bit, but it happens every single night at the Federal Reserve. It's also a nice deal for those with balances above the reserve balance requirement to earn a bit of money with cash that would normally just be sitting there.

The Federal Reserve The Federal Reserve


The exact interest rate the banks will charge each other is a matter of negotiation between them, but the Federal Open Market Committee (FOMC) (the arm of the Federal Reserve that sets monetary policy) meets eight times a year to set a target rate. They evaluate a multitude of economic indicators including unemployment, inflation, and consumer confidence to decide the best rate to keep the country in business. The weighted average of all interest rates across these interbank loans is the effective federal funds rate.

This rate has a huge impact on the economy overall as well as your personal finances. The federal funds rate is essentially the cheapest money available to a bank and that feeds into all of the other loans they make. Banks will add a slight upcharge to the rate set by the Fed to determine what is the lowest interest that they will announce for their most creditworthy customers, also known as the prime rate. If you have a variable interest rate loan (very common with credit cards and some student loans), it's likely that the interest rate you pay is a set percentage on top of that prime rate that your lender is paying. That's why in times of low interest rates (it was set at 0% during the Great Recession), a lot of borrowers should go for fixed interest rate loans that won't increase. However, if the federal funds rate was relatively high (it went up to 20% in the early 1980's), a variable interest rate loan may be a better decision as you would be charged less interest should the rate drop without the need to refinance.

The federal funds rate also has a major impact on your investment portfolio. The stock market reacts very strongly to any changes in interest rates from the Federal Reserve, as a lower rate makes it cheaper for companies to borrow and reinvest while a higher rate may restrict capital and slow short-term growth. If you have a significant portion of your investments in equities, a small change in the federal funds rate can have a large impact on your net worth.

Getty Images/Maria Stavreva

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