What you have to know to build your capital base. Savings, job security, and skills help you get an early start

USUALLY in this section we focus on the outgo side of the ledger -- wise management and spending of our money once we've got it. This month we'd like to focus on the income side: how we get the money to build our capital base. Most of us do this with a job.

``Your career -- your capacity for earning money -- is the most important asset you have,'' says Robert J. Martel, a certified financial planner in Lexington, Mass. Your earnings -- perhaps supplemented with an inheritance at some point -- are the raw material you have to work with when you fashion your financial plans.

``When I sit down with clients at the oval table in my office, one of the first things I ask about is their career: `Is there stability in your field? Do you want to stay? What are your options for a raise? Are you vested?' '' says Isabel Smith, a certified financial planner in Birmingham, Mich. ``And for those further along, I ask, `How long do you expect this income stream to continue? What about early retirement?' ''

The critical thing is to learn to save out of your earnings stream to build capital. Martel's rule is, ``Save 10 percent of everything you earn.'' That's gross, not net.

And once you get up to an annual income of ``around $35,000 to $40,000, you should be taking 15 percent off the top.

``There are always going to be things to spend your money on. But if you can't learn to save, no financial planner can help you.''

And what about developing a larger strategy to ensure that you have the most ``raw material'' -- and job satisfaction -- to work with?

Anna Rappaport, principal at William Mercer-Meidinger, compensation consultants, in Chicago, has a number of ideas for the kind of analysis of your workplace that ``it makes a lot of sense to do about age 30, after you've been on the job awhile.''

She suggests looking around to determine ``the attitude of the company in terms of willingness to let people move. Ask yourself, have able people moved up in 10 years -- or got stuck?''

It's also important to size up the support network. This doesn't necessarily mean elaborate ``career development'' strategies spelled out in the employee handbook. ``Informal human support works as well as formal support.''

Ms. Rappaport adds, ``Learning to recognize when you're stuck is important, especially for women,'' and so is developing ``the finesse to find out whether you have other options within the organization, or whether you should get out altogether.''

If you've mastered your current job, asked for some form of promotion, and got no response, it may be time to look outside. ``A progressive employer, even if not willing to promote you right away, should be willing to plan a strategy'' for your continuing progress.

To assure your long-term success, this consultant adds, ``Be sure you don't ignore communications and `people' skills -- written and oral. This is important to almost everything you do.''

Especially in technical fields, she says, younger workers often find their technical skills are their most important ones as they start out. But later on, the ``people skills'' become more important. Ultimately, someone with moderately good technical skills and very good people skills will outshine the techno-whizes who have let their ability to communicate atrophy. ``That's a common problem,'' says Ms. Rappaport, ``and it's worth investing some effort to build those skills. I tell people to go to Toastmasters,'' an organization that helps people develop public-speaking skills.

Something else you should pay attention to is the way your employer structures jobs. Some employers allow job descriptions to follow the direction of their employees' interests; other companies are highly structured. ``In some places, you're told, `You do X,' when maybe what you want is to do a little X, a little Y, and a little Z.''

It's also important, Ms. Rappaport says, to evaluate whether a company is a growing one. ``If a business has been stagnant for a while, there will be a lot of middle managers with no place to go. And you'll be underneath them.''

Another question is the size of the company. ``Bigger companies tend to pay better than small companies for comparable jobs,'' says Ms. Rappaport. ``But in a smaller company, bright younger people are likely to learn more and have more responsible jobs, and to be better off in the long run. . . . They can see the `big picture' better in a small company than in a large one, and they can parlay their responsibility into a better job later on.''

But you don't have to become prisoner of your niche in a large firm, says Wayne Chodkowski, a certified financial planner and president of Business & Wealth Advisors Inc., in Dunwoody, Ga.

``Let me play the devil's advocate on this one. If you're in a specialized niche in a large organization, there's nothing to keep you from reaching out to learn about other positions in the same company and progress from there. It's more of an individual thing.''

If you do feel it's important to leave your employer for a new one, Ms. Rappaport says she feels that to maintain the right impression of professional commitment and stability, ``You shouldn't leave a job in less than three years.'' She concedes, though, that this is ``not a commonly accepted rule.''

On the other hand, if you're younger and your job isn't ``a good fit,'' it's probably not appropriate to stay put just to appear stable. ``The additional earnings [you'll presumably have] with a better fit will more than offset'' whatever you lose by leaving the old job.

In any case, whatever kind of ``adjustments'' you make, you had better plan to come in for a landing by your mid-40s. ``For someone who is going to end up a nice, docile corporate employee,'' Mr. Martel's advice is, ``Settle in before you're 45. . . . Beyond 45, there is age discrimination in the workplace.''

Job-hoppers, even those who better their situation with each jump, may find themselves without benefits or vesting at some point. Sometimes it's worth hanging onto a less-than-ideal job for a year or so if the date of vesting -- typically after 10 years' service, but often less -- is within hailing distance.

Consultants point out that defined contributions plans -- typically ``salary reduction'' plans, whereby a certain percentage of earnings is deferred, and matched by the employer, to accumulate tax-free until distribution -- are usually more useful to today's mobile workers than defined benefit plans (what we think of as ``straight pensions''), which are useful primarily to long-term employees.

Once you're settled into a position, your strategy, of course, should be to do the best you can to command the best possible salary.

But performance evaluations ``can be a sticky problem,'' says Ms. Rappaport. ``It's important that your superiors be aware of your accomplishments, and if they aren't, you've got to make them aware -- and do it politely.

``Make sure you understand at the beginning of the salary period what's expected of you.''

The ideal is a company with a policy of ``management by objective,'' where responsibilities and objectives are explicitly stated. But if your employer doesn't take this approach, Ms. Rappaport advises taking the initiative yourself. Tell your boss, ``I want to be sure you understand what I'm doing, and are comfortable and happy with it. And if something isn't going well, get feedback. It's very hard. People don't like to say unpleasant things.''

You should understand company salary policy. ``Some companies respond to the blackmail system. Be aware of it, and decide whether you can live with it.

``It's always easier to negotiate a salary at the outset. But you have to psych out the situation -- to determine whether they really want you, or whether you're one of 50 or 100 candidates for the same job.''

In some organizations the supervisor directly above you is the only one you need to worry about as far as politicking for a raise goes. ``But in some organizations, you need the finesse to work with a lot of people.

Says Joel F. Levy, partner at Coopers & Lybrand in New York, says, ``In a larger company, with a formal review process, the politics of getting a raise may be beyond you.''

He adds that there are a lot of people perfectly happy in fields other than what they've trained for, and he describes a satisfactory career less in terms of ``subject matter'' or specific discipline and more in terms of workplace environment.

``Find a corporation and a culture that will give you what you want,'' he suggests.

If you're worried that a financial planner will try to talk you into a career just for the money, there's at least one who won't, Mr. Martel: ``Anybody who set out just to make money never did it. You make more at what you're happy doing. Do what you like, and what you're good at, and the money will come.

``After all, work is a third of your life, 50 percent of your waking hours.''

--30--{et