Chapter 9

Making the Most of Your Career

IN THIS CHAPTER

check Jump-starting your career

check Making the most of your education options

check Considering your options in the world of small business

check Being prepared for a career change

check Coping with unemployment

What’s your most valuable asset?

As a young adult, it’s probably your future earning potential.

That’s why I devote this chapter to helping you make the most of your career and future employment. In addition to tips to jump-start your career, I discuss furthering your education and training, exploring your entrepreneurial options, and handling job changes and loss.

Getting Your Career Going

As you transition from school to the workforce, you can maximize your chances for financial and career success. This section discusses arranging your finances and making decisions to further invest in your education and training.

Putting everything in order

If you just graduated from school, or you’re otherwise in the your early years in the workforce, your increased income and reduction in educational expenses are probably a welcome relief to you and your family — but they’re no guarantee of future financial success.

Here’s how to start on the path to financial success when you first enter the job market:

  • Avoid consumer credit. The use and abuse of consumer credit can cause long-term financial pain and hardship. Shun making purchases on credit cards that you can’t pay for in full when the bill arrives. Here’s the simple solution for running up outstanding credit-card balances: Don’t carry a credit card unless you are always able to pay it in full when your monthly bill comes due. If you need the convenience of making purchases with a piece of plastic, consider a debit card (see Chapter 3).
  • Cultivate the habits of saving and investing. I’m often asked, “At what age should a person start saving?” To me, that’s similar to asking at what age you should start brushing your teeth. Well, when you have teeth to brush! So I say you should start saving and investing money from your first paycheck. Try saving 5 percent of every paycheck, and then eventually increase your savings rate to 10 percent. Ideally, you should put your savings into retirement accounts (through an automatic deduction) that offer tax benefits, unless you want to accumulate down-payment money for a home or small-business purchase or some other purpose. (You’re probably not thinking about buying a new home or retiring, though, if you’re just entering the job market.) If you’re having trouble saving money, track your spending and make cutbacks as needed (see Chapters 2 and 5 for more assistance).
  • Get insured. When you’re young and healthy, imagining yourself feeling otherwise may be difficult. But because accidents and unexpected illnesses can strike at any age, forgoing health insurance coverage can be financially devastating. When you’re in your first full-time job with limited benefits, buying disability coverage, which replaces income lost because of a long-term disability, is also wise. And as you begin to build your assets, make a will so your assets go where you want them to in the event of your untimely passing. (Check out Part 4 for more information about insurance.)

Educating and training your way to career success

The Bureau of Labor Statistics has data that clearly demonstrates that the more education a person has, the more money the person makes and the less likely the person is to be unemployed (see the most recent full year’s data and chart in Figure 9-1).

Graph depicts more education translates into lower unemployment rates and higher earnings.

Source: U.S. Bureau of Labor Statistics, Current Population Survey

FIGURE 9-1: More education translates into lower unemployment rates and higher earnings.

Now, you must be careful applying group data to your own situation, because assuming that having more education and spending more on education is always better would be inaccurate. But the data clearly shows that more education is generally better, as it enhances your employability and income-earning potential and reduces your chances of being unemployed.

Seeking value for your education dollars

You and your family probably don’t have an unlimited supply of money to spend on furthering your education and training. So, just as with buying anything else — computers, clothing, and so on — you should look for value when spending your education dollars. Value means getting the most (quality) for your money.

Remember Keep the following pointers in mind to ensure you get value for your educational dollars:

  • Realize that you don’t always get what you pay for. Just because you spend more for education doesn’t mean that you’ll get better quality than something costing less. For example, the best state colleges and universities offer better value to in-state residents than do some private colleges and universities. Increasing numbers of faster and lower-cost educational alternatives to traditional colleges provide valuable training that leads to in-demand jobs.
  • Look beyond sticker prices. Because of the availability of financial aid, including grants and scholarships you don’t have to pay back, you can’t simply compare the sticker price of various traditional colleges and assume that the price is your actual cost. You should always consider a range of schools and higher-education options, apply for aid when possible, and then compare your expected benefits to the bottom-line cost at each school.
  • Be careful when examining rankings of colleges (and other higher-education options) and which program’s graduates earn the most. Lots of data and rankings on the best colleges and universities are available. We’re starting to see more such data for other higher-education options. One challenge when evaluating this data is that many of the highest-rated schools are private and quite expensive, and they selectively admit the most qualified candidates. So their graduates tend to earn more. Be sure to compare what each school provides and what each costs after factoring in financial aid awards.
  • Consider employer assistance. Check out what education assistance your employer may offer. Just be sure that it makes sense for you and your career to stay with that employer for whatever additional time may be required.
  • If you have specific fields of work in mind, research what education and training best prepares you. Talk to folks currently in those fields and consider training programs as well as technical training programs where appropriate.

Considering a liberal arts education and alternatives

First it’s helpful to define what is generally meant by a “liberal arts education.” My alma mater, Yale University, defines a liberal arts education as one that teaches students to think critically and express themselves clearly. Yale asserts that a liberal arts education is a solid foundation for all professions and can help students lead successful and meaningful lives.

That sounds all well and good, and for some people, a liberal arts education may be a good fit. But for others, a liberal arts degree can be a significant waste of time and money.

Also, please keep in mind that many folks like myself, who attended the leading liberal arts colleges and universities, end up going on to graduate school for advanced degrees, for example in business, law, medicine, and so forth.

In our increasingly competitive global economy, I think there are some potentially better alternatives to consider.

  • Last-mile programs, including “boot camps”: The most popular last-mile programs are “boot camps” that focus mostly on coding — a skill in demand like never before. Coding boot camps are full-time endeavors. Classes are small, and most of the time is spent actually working in teams on projects. In a survey done by job search engine website Indeed, 80 percent of technology hiring managers reported hiring coding boot-camp graduates, and an astounding 99 percent of those said they’d hire more.
  • College minimal viable products (MVPs): College minimal viable product (MVP) programs combine the technical skill training and placement of traditional last-mile programs with sufficient cognitive and noncognitive skill development that students get from a good college. Graduates of these programs pay through income-share arrangements (ISAs) in which they repay money owed to the program through paying a portion of their employment income for a short period of time.
  • Apprenticeships: Once relegated to industrial trades such as electricians, plumbers, carpenters, and iron and steel workers, apprenticeships are now gaining momentum in industries like advanced manufacturing, healthcare, pharmacy, and IT.
  • Staffing firms: Staffing firms like Manpower, Allegis, Adecco, Randstad, and Kelly Services offer last-mile training to workers and staff them out to clients. Revature, an IT staffing company, hires experienced software developers. The founder of Revature noticed around 2011 that his client companies also had an appetite for entry-level software developers. Today, the company has partnerships with numerous colleges such as Arizona State, UNC Charlotte, UVA, Davidson, and more and offers a free 10- to 12-week advanced training program on campus. Meanwhile, Avenica places students from many colleges and offers last-mile training across many industries.
  • Vocational and trade schools: Also known as career and technical education (CTE), vocational and trade schools provide gateways to a wide range of jobs. They typically exist in several different entities including community colleges, high schools, and other area CTE centers and are constantly evolving to meet the changing economic environment and jobs that exist today. Here is a sampling of industries vocational and trade schools provide training for:
    • Automotive industry: Repair technician, body and paint technician, collision repair and refinishing, diesel mechanic
    • Culinary arts: Prep cook, sous chef, pastry chef, line cook
    • Emergency services: Firefighters, paramedics, police officers, CPR and first-aid instructors
    • Healthcare: Nursing aides, certified nursing assistants, licensed practical nurses, vocational nurses, registered nurses, medical technicians, surgical prep technicians, dental hygienists, dental assistants, phlebotomy, sonography, radiology, pharmacy technician, mammography, laboratory technician, veterinary assisting, veterinary technician
    • Other skilled vocational jobs: Welding, electrician, plumbing, web designer, carpentry, construction management, pipe-fitting, machining, computer-aided drafting, network administration, civil engineering technician, paralegal, court reporter
  • College cooperative educational experiences: A number of four-year colleges offer so-called cooperative programs. The idea behind these is that during a portion of the student’s college experience, the student works part-time or full-time at an employer. This work for an employer is done during what would normally be the academic part of the year, counts toward school credits, and is paid. These programs vary greatly from school to school, so you really need to do your institution-specific research to find something that is a good fit. Also be aware that at some schools, it may take five years rather than four to complete all the graduation requirements. Some colleges that offer co-op programs include: Cornell University (Ithaca, New York); Drexel University (Philadelphia, Pennsylvania); Georgia Institute of Technology (Atlanta, Georgia); Northeastern University (Boston, Massachusetts); Purdue University (West Lafayette, Indiana); Rensselaer Polytechnic Institute (Troy, New York); Rochester Institute of Technology (Rochester, New York); Stevens Institute of Technology (Hoboken, New Jersey); University of Cincinnati (Cincinnati, Ohio); University of Florida (Gainesville, Florida).

The growing “alternatives” trend is good for you, the higher-education consumer. Competition for your time and dollars is slowly spurring some positive changes at colleges and universities, as it should. Colleges should earn your business, not get it by default.

Remember Traditional colleges and universities are not the only pathways to success. Keep an open mind about the alternatives available, because they too can lead to career satisfaction and a bright future.

Understanding the world’s number-one universal language: Business

I think everyone can benefit from gaining background about business. It’s the universal language of the workplace. Even if you want to work for a nonprofit, you should understand concepts such as revenues, customer acquisition and service, marketing, expenses, financial statements, and so on.

If you’ve already completed your college degree or are attending a college that doesn’t offer business courses, don’t despair. You can find out about the world and language of business in numerous other ways:

  • During the summers of your latter years of college and immediately after, go to work in business. Find the best organizations that you can, work hard, and be a sponge, soaking up all you can.
  • Read the best business books and publications, especially those on small business and entrepreneurship if that’s what you’re most interested in. Among books that I recommend are those written by James C. Collins, my Small Business For Dummies (coauthored with Jim Schell and published by Wiley), the classic How to Win Friends & Influence People by Dale Carnegie (Pocket Books), The Greatest Salesman in the World by Og Mandino (Bantam), and How to Win at the Sport of Business by Mark Cuban (Diversion Publishing). Inc. Magazine is a monthly publication that has lots of worthwhile content, in print and on their website at www.inc.com.
  • Take some free or very-low-cost online business courses from leading colleges and universities. You can do this through Coursera (which offers online courses from top universities like Northwestern, Stanford, the University of Pennsylvania’s Wharton School, and Yale), EdX, MIT’s OpenCourseWare, and Udacity.
  • Make use of taxpayer funded resources. Check out the short courses/videos offered by the U.S. Small Business Administration. The Small Business Development Centers (www.AmericasSBDC.org) nationwide offer “free” services. Their offices are frequently found on college campuses. They offer feaibility studies for business ideas, use of software to develop your business plan, counseling with social media specialists, cash flow experts, website professionals, and so forth.
  • Watch the best business television shows. Among those worth checking out are Shark Tank and The Profit.

Investing in your career

In my work with financial counseling clients over the years and from observing friends and colleagues, I’ve witnessed plenty of people succeed in their careers. What did they have in common? They invested in their careers, and you can and should do the same. Some time-tested, proven ways to do that include

  • Networking: Some people wait to network until they’ve been laid off or are really hungry to change jobs. Take an interest in what others do for a living and you’ll benefit and grow from the experience, even if you choose to stay with your current employer or in your chosen field. Online services like LinkedIn enable you to network and see what jobs you may qualify for.
  • Making sure you keep growing: Whether it’s reading high-quality books or other publications, learning from experts in a particular field, or listening to good podcasts, find ways to build on your knowledge base.
  • Considering the risk in the status quo: Many folks are resistant to change and get anxious thinking about what could go wrong when taking a new risk. When I was ready to walk away from a six-figure consulting job with a prestigious firm and open my own financial counseling firm, a number of my relatives and friends thought I was foolish. I’m glad I didn’t allow their fears and worries to dissuade me!

Exploring Entrepreneurial Options

Small business has generated more wealth than investing in the stock market or real estate. You can invest in small business by starting a business yourself, buying an existing business, or investing in someone else’s small business. The following sections give you an overview in doing so.

Starting a small business

When you have self-discipline and a product or service you can sell, starting your own business can be both profitable and fulfilling. Before you start, consider the following:

  • Determine what skills and expertise you possess that you can use in your business. You don’t need a unique idea or invention to start a small business.
  • Begin exploring your idea by first developing a written business plan. Such a plan should detail your product or service, how you’re going to market it, your potential customers and competitors, and the economics of the business, including the start-up costs.

Remember Of all the small-business investment options, starting your own business involves the most work. Although you can do this work on a part-time basis in the beginning, most people end up running their business full time — it’s your new job.

In most people’s eyes, starting a new business is the riskiest of all small-business investment options. But if you’re going into a business that uses your skills and expertise, the risk isn’t nearly as great as you may think. Many businesses can be started with little cash by leveraging your existing skills and expertise. You can build a valuable company and job if you have the time to devote to it. To begin your own business, check out the latest edition of Small Business For Dummies (Wiley), which I cowrote.

Purchasing a small business

If you don’t have a specific product or service you want to sell but you’re skilled at managing and improving the operations of a company, buying a small business may be for you. Finding and buying a good small business takes time and patience, so devote at least several months to the search. You may also need to enlist financial and legal advisors to help inspect the company, look over its financial statements, and hammer out a contract.

Good businesses don’t come cheap. If the business is a success, the current owner has already removed the start-up risk from the business, so the price of the business should be at a premium to reflect this lack of risk. When you have the money to buy an established business and you have the skills to run it, consider going this route.

Although you don’t have to go through the riskier start-up period if you buy a small business, you’ll likely need more capital to buy an established enterprise. You’ll also need to be able to deal with stickier personnel and management issues. The organization’s history and the way it works will predate your ownership of the business. If you don’t like making hard decisions, firing people who don’t fit with your plans, and getting people to change the way they do things, buying an existing business likely isn’t for you.

Warning Some people perceive buying an existing business as being safer than starting a new one. Buying someone else’s business can actually be riskier. You’re likely to shell out far more money upfront, in the form of a down payment. If you don’t have the ability to run the business and it does poorly, you have more to lose financially. In addition, the business may be for sale for an undesirable reason — it may not be very profitable, it may be in decline, or it may generally be a pain in the neck to operate.

Investing in a small business

If you don’t want the day-to-day headaches of being directly responsible for owning and managing a business but you do like the idea of profiting from a successful one, then investing in someone else’s small business may be for you. Although this route may seem easier, few people are actually cut out to be investors in other people’s businesses. The reason: Finding and analyzing opportunities isn’t easy.

Are you astute at evaluating corporate financial statements and business strategies? Investing in a small, privately held company has much in common with investing in a publicly traded firm (as is the case when you buy stock), but it also has these differences:

  • Private firms aren’t required to produce comprehensive, audited financial statements that adhere to certain accounting principles. Thus, you have a greater risk of not having sufficient or accurate information when evaluating a small, private firm.
  • Unearthing private, small-business investing opportunities is harder. The best private companies that are seeking investors generally don’t advertise. Instead, they find prospective investors by networking with people such as business advisors. You can increase your chances of finding private companies to invest in by speaking with tax, legal, and financial advisors who work with small businesses. You can also find interesting opportunities through your own contacts or your experience within a given industry.

Remember Consider investing in someone else’s business only if you can afford to lose all of what you invest. Also, you should have sufficient assets so that whatever money you invest in small, privately held companies represents only a small portion (20 percent or less) of your total financial assets.

Changing Jobs or Careers

During your adult life, you’ll almost surely change jobs — perhaps several times a decade. I hope that most of the time you change jobs by your own choice. But in today’s increasingly global and rapidly changing economy, job security isn’t great. Downsizing has affected even the most talented workers.

Remember Always be prepared for a job change. No matter how happy you are in your current job, knowing that your world won’t fall apart if you’re not working tomorrow can give you an added sense of security and encourage openness to possibility. Whether you change your job by choice or necessity, the following financial maneuvers can help ease the transition:

  • Keep your spending lean. Spending less than you earn always makes good financial sense, but if you’re approaching a possible job change, spending less is even more important, particularly if you’re entering a new field or starting your own company and you expect a short-term income dip. Many people view a lifestyle of thriftiness as restrictive, but ultimately, those thrifty habits can give you more freedom to do what you want to do.
  • Keep an emergency reserve fund. You should have a “rainy day” fund to deal with emergencies and the inevitable curveballs that life throws your way. I suggest keeping it in a money market fund or savings account, and it should cover at least three months’ worth of living expenses.
  • Evaluate the total financial picture when relocating. At some point in your career, you may have the option of relocating. But don’t call the moving company until you understand the financial consequences of such a move. You can’t simply compare salaries and benefits between the two jobs. You also need to compare the cost of living between the two areas, which includes housing, commuting, state income tax and property taxes, food, utilities, and all the other major expenditure categories. There are various cost-of-living calculators online that enable you to compare different locations.
  • Track your job-search expenses for tax purposes. If you’re seeking a new job in your current (or recently current) field of work, your job-search expenses may be tax-deductible, even if you don’t get a specific job you desire. If you’re moving into a new career, your job-search expenses aren’t tax-deductible.

The Young and the Unemployed

Your job search may play out like a daytime drama, which is no surprise if you’re having a difficult time finding a job. But being unemployed means you need to be especially concerned with your personal finances. The following sections point out why unemployment strikes younger people harder and what you can do during difficult times.

Understanding how joblessness can hit younger adults harder

During the severe recession from 2007–2009, high unemployment rates were all over the news as the unemployment rate surpassed 10 percent in the United States. But that double-digit level of joblessness paled in comparison to the high level of unemployment for young people, especially those who were less well educated.

Despite the multi-year expansion that the U.S. economy enjoyed after 2009, the youngest adults (those under 25) continued to have higher levels of unemployment than the rest of the working adult population. Adults without a high-school diploma have an unemployment rate far greater than the average, followed by high-school graduates who have no college experience. College graduates have by far the lowest unemployment rate. (Figure 9-1 earlier in the chapter helps you understand the rate of unemployment and average weekly earnings based on education level.)

During the government-mandated COVID-19 economic shutdowns that happened to varying degrees in different parts of the United States in 2020 and continuing into early 2021, unemployment quickly spiked higher and then began improving. Thankfully, jobs have been returning far more quickly than during the period after the 2007–2009 Great Recession. But, as with the prior recession, those who were younger and had less formal education generally suffered more with layoffs. Those in industries and careers where work can more easily be done remotely tended to suffer the least.

Although you can’t do anything about your age, you can do something about your education and training and career options (see the earlier section “Getting Your Career Going”).

Accessing unemployment benefits

If you’re laid off and unemployed, you should collect unemployment benefits if you’re eligible. You must be actively seeking employment and meet any other eligibility requirements in your state.

Tip The simplest way to find the state unemployment insurance office nearest you is to visit the website www.CareerOneStop.org and click “Unemployment Benefits Finder” on the home page. CareerOneStop operates this site — a U.S. Department of Labor–sponsored website that provides “career resources and workforce information to job seekers, students, businesses, and workforce professionals to foster talent development in a global economy.”

Unemployment benefits are provided at the state level, and each state has its own program. If you’re turned down for benefits, be sure to clarify why, and don’t be shy about appealing the decision if you feel there’s a chance you may get approved if you’re able to furnish more information.

Taking action

You can make the most of your finances and be best prepared to handle life’s challenges if you stay on top of your financial affairs. That said, losing one’s job often comes as a surprise and presents some unusual stresses. Here are some tips to keep in mind if you lose your job:

  • Batten down the hatches. Evaluating and slashing your current level of spending may be necessary. Everything should be fair game, from how much you spend on housing to how often you eat out to where you do your grocery shopping. Avoid at all costs the temptation to maintain your level of spending by accumulating consumer debt.
  • Work at your job search a few hours daily but not on a full-time basis. Searching for a job is hard work and creates stress for most people. You’re probably not going to make the most of your job search by making it your full-time endeavor. Make some calls; arrange some appointments; send some résumés; and do some research on industries, companies, and organizations of interest every day. But I suggest doing so for no more than four to six hours per day. If you can find part-time or temporary work, spend some time doing that to earn some money and to break up the monotony of looking for work.
  • Try to exercise regularly. Exercise clears the head and lifts your mood. Daily exercise is best, but if that’s not possible, try to get some exercise at least every other day.
  • Eat healthfully. As with exercise, eating a balanced and nutritious diet can go a long way toward maximizing your mental (and physical) health and outlook.
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