Indian-origin self-made millionaire shares pointers on how to ask your boss for a raise

Ramit Sethi says the way most people feel about money is highly psychological. (Image credit: Ramit Sethi/Instagram)

For Indian-origin self-made millionaire Ramit Sethi, the first step to asking your boss for a raise is to plan way before you actually have the talk.

Sethi suggests a meeting with the boss first to gauge your standing. "Start by meeting with your boss," he said. "Say that you want to be 'extraordinary at this job' and work with them to identify two to three actionable goals to get there. As you work on those goals, update your boss on your progress every few weeks."

Months later, when you're able to show the progress you've made towards your goals, you can ask for the raise, Sethi suggested. He also recommended researching how colleagues in your position make and share the results.

“You don’t need to be confrontational — negotiation is a dance,” Sethi told CNBC Make It. "If your boss says they can’t offer a raise, that might be because they don’t have the 'budget or power' to do so. That’s okay. But what it means for you is that you need to make a decision on whether you want to stay in that job or not.”

Sethi, the author of New York Times bestselling book I Will Teach You To Be Rich, also spoke about what being rich means to people.

"For some people, rich means having a million dollars in the bank. For some people, rich means being able to go to yoga in the middle of a weekday,” he told CNBC Make It.

Sethi added that the way most people feel about money is highly psychological. “I’ve spoken to people who have $10 million in net worth, and they still worry if they’re going to have enough,” Sethi said. According to him, feeling rich is “uncorrelated to how much we have in the bank.”