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The Peter Principle – How It’s Been Hurting YOUR Career! (and your money by extension)

Updated: Feb 7, 2023

Truthfully, I’ve been having quite a LOT of writer’s block. This is probably the most writer’s block I’ve had in my entire career.

Part of it is because… The entire time that I was re-branding, I was preoccupied with learning about my future.

What’s next for Money Maverick?

For the most part, I don’t know anything about corporate, or what it means to have a career. I’m just a 27-year-old neighborhood school graduate who didn’t even go to local uni.

And when you spend a lot of your initial years in a job just trying to figure it out, you suddenly find yourself entering your 4th year with no clues. Thank goodness my clients have helped me make it this far.

Recently though - I realized that I’m looking awful at an inevitable area of business –


Which brings us to the Peter Principle.

Wherever you are in your career right now as you read this, you’ve PROBABLY been screwed over by the Peter Principle sometime before.

It’s negatively affected your health, your happiness, your potential career options and generally it’s made you considerably more miserable than you needed to be.

It sucks.

And here’s what it is.

The Peter Principle and Implications

Have any of you ever looked at some of your immediate supervisors or managers and just thought…

i) How on earth did someone SO INCAPABLE get into this particular position of power?

ii) Why is this person such a MEAN/BAD person to me?

iii) How is someone who is such an ethically or MORALLY POOR person, be my superior?

A lot of this has to do with the Peter Principle.

The concept in Management by Lawrence J.Peter (hence the name), the occurrence became so popular in both mainstream and finance that it’s even earned its own listing in Investopedia.

The Peter Principle is an observation that the tendency in most organizational hierarchies, such as that of a corporation, is for every employee to rise in the hierarchy through promotion until they reach a level of respective incompetence. In other words, a front-office secretary who is quite good at her job may thus be promoted to executive assistant to the CEO for which she is not trained or prepared for—meaning that she would be more productive for the company (and likely herself) if she had not been promoted.

One of my favorite examples is Michael Scott, from The Office.

Some people are simply much better at the skillset that they have or the tasks assigned to them, and hit the peak of their incompetence in their highest promoted role. This basically tells you that every single person who is working above you is the MOST INCOMPETENT they've ever been, with a decent chance that they may NEVER BE MORE COMPETENT.

The concept is of course, statistically prevalent enough to be a viable theory (and why I’m sharing this, since you’ve probably experienced this).

Here are some additional and important observations:

1) They are usually promoted based on ‘competence’

Not everyone is competent at a job that warrants promotion, but they’re competent at SOMETHING.

It could be how much people like them, or whether they spend more time at work.

Of course, there could be actual merit – meaning, good quality of work – but in a nutshell, not everyone is promoted because they’re suited for it or because they truly deserve it.

2) They will often not turn down those positions

What’s the alternative?

Imagine if it were you – even if I gave you the benefit of the doubt.

You’re an amazing worker who produces serious results, and now I tell you that based on those results I want to promote you.

To a position of power, a higher pay raise, maybe a nice new office and other perks.

Even if you knew in your heart that you were completely unqualified for the nature of your new role, would YOU say no?

3) They will remain in those positions

Some alternatives have been:

a) Promoting ‘Manager’ -type people – Or who display better abilities at managing people. But of course, this would mean overlooking people better at TASKS… And this can cause its own set of problems. It certainly wouldn’t be meritocratic.

b) Randomness – some corporations have tried a random rotation system, where people take turns to practice management. Even in the army, this helps to filter out people who should take on a varied type of responsibility.

But do I really have to explain how unfair this could end up being?

4) Incompetence breeds professional, personal and moral idiocy

The worst part of the Peter Principle – we often wonder how people who supervise us could reach such a level. It is rare for anyone to start out as such.

But job failure has an dreadfully powerful impact on people – we start to make compromises in ways we didn’t consider before, before it becomes a slippery slope.

Failure to overcome this usually leads to resignation.

Not the good kind, where they leave you alone and stop screwing with your work and life – the ‘resigned’ kind where they are resigned to their role, and they get lazy or fat or used to taking credit for your stuff.

Sound familiar?

...And enough failure keeps you at that role, but not enough to get you fired.

Most Importantly

So now you kind of know how to explain that feeling why your job is so difficult when it comes to dealing with your superiors. This could be a pretty good reason.

And unfortunately, this could happen to YOU, too.

I can only assume that most of you reading this are not horrible human beings.

Often, people who put themselves out on a very volatile public platform, join a group of complete strangers and just watch complex arguments on solving personal and financial problems is probably someone who is taking active action to improve the lives of themselves and their loved ones.

That’s really great.

(Unless you’re like me, who also sticks around to watch people fight and eat popcorn. But you can do both, yknow)

But we often think the best of ourselves already. Hell - I often think so, and I’m regularly mean to people who give me a hard time.

So, it becomes a sudden shock when we’re rewarded for our competence, get into a role we’re not used to and suck tremendously at it.

Being unprepared and promoted to an area you’re incompetent at hurts people who you care about, or who used to be your colleagues before they became your underlings. And it hurts their careers, livelihoods and their families.

It’s a lot of responsibility.

See the other side of the fence too, because it could happen to you.

As For Me…

I hope that this article can show you what’s on my heart and mind, because even though I’m not competent at this area yet – I’m really trying to be.

I wish this article was about solutions, but its not. It’s just about awareness.

Management has little to do with my current role and skillset, but it could mean:

i) A lot more responsibility, like holding someone else’s career and their entire family in my hands

ii) A lot less money if I’m bad, and

iii) EVEN IF I was good at it, I still might not be liked!

Moving up in the world is a very scary thing and a big part of me would rather not…

…But I have to.

It matters to you, the potential client or prospect.

No Financial Consultant can service 500, 600, 1000 clients all to themselves - without some kind of plan.

Management is a solution.

After all, when you’re picking your Financial Consultant – if they tell you that they’re in this for the long term…

…How so?

We often worry when we pick our consultant that they’ll leave this industry, usually because they couldn’t cope in it.

But what if they do well instead?

What if they do have a successful practice, in some small part thanks to you – but even so, WHAT THEN?

Doing well causes its own problems for you, the client.

Do they have time for you, especially if you’re a small case size?

Will they still do reviews with you?

Will they send you messages and promotions because you’re still valued?

Will they help you with their claims, even if they’re busy or overseas?

Will they leave this industry because they’re doing well, not because they’re doing badly?

What kind of arrangements would be made if they did have to leave?

How do they intend to address any current and future conflicts of interest?

The Peter Principle could have hurt you by now in your life and career.

Make sure it doesn’t hurt your Financial Planning, either.

Money Maverick

Investments are also available using CPF (Ordinary Account), SRS (Supplementary Retirement Scheme) and Cash.


3) The Office - Like Stories of Old:

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