Archive for the 'Career' Category
Wednesday, May 30th, 2007
Both the Wall Street Journal and CNN Money recently ran articles about a new study that concluded that American men in their 30s are earning less than their father’s generation after adjusting for inflation.
In 2004, the median income for a man in his 30s, a good predictor of his lifetime earnings, was $35,010, the study says, 12% less than for men in their 30s in 1974 — their fathers’ generation — adjusted for inflation. A decade ago, median income for men in their 30s was $32,901, 5% higher than 30 years earlier. Ms. Sawhill said she isn’t sure why men’s wages have stagnated. “It seems there’s been some slowdown in economic growth, it’s possible that the movement of women into the labor force has affected male earnings, and it’s possible that men are not working as hard as they used to.”
“The expectation that each generation will do better than their parents has become a fundamental part of what we call ‘The American Dream,’” said Morton. “But this new analysis suggests this bedrock belief may be shifting under our feet.”
The problem with statistics like this are that they really don’t tell us anything. Maybe more men are staying at home to take care of the kids, or are otherwise choosing to earn less money to balance work and life. Maybe the government’s method of measuring inflation is inaccurate. Maybe it’s due partially to globalization. Maybe it’s simply supply and demand - families as a whole are making more to dual-income households. Maybe the blue-collar jobs don’t pay as well as they used to. Maybe a 30-year old these days is more likely to have spent an extra 5 years “finding themselves”. Don’t people get married a lot later these days versus 1974? Ten different people could read these articles and come up with ten different reasons for the income decrease based on their own personal beliefs and experiences.
As for me, I don’t really get why it even matters what my father earned? Poor, rich, whatever, all we can do is see what challenges exist now, and work to meet them head on. Even if we earned 50% more than our father’s generation, I don’t see how that would change my behavior. It just creates excuses and distractions. Am I missing something?
Posted in Career | 32 Comments »
Friday, May 18th, 2007
It’s graduation time again, and I’ve heard more than my share of cheesy commencement speeches in my life. But here is one by Steve Jobs that I really enjoyed.
Here is the text of the speech as well, but Jobs is a good speaker so I’d recommend listening to it. Here’s the Cliff’s Notes summary:
You have to trust that the dots will somehow connect in your future. And the only way to do great work is to love what you do. If you haven’t found it yet, keep looking. Don’t settle. Your time is limited, so don’t waste it living someone else’s life. Don’t be trapped by dogma ? which is living with the results of other people’s thinking. Stay Hungry. Stay Foolish.
Weird fact about me: Even before hearing this speech, I would think about my mortality in order to keep things in perspective during stressful times. It really helps to strip away the fluff, and helps you do scary things like change career directions or ask that pretty girl or boy down the hall out 
Posted in Career | 12 Comments »
Wednesday, May 16th, 2007
Even though this blog is about money, and the source of most people’s money is from their jobs, I don’t really talk about careers that much. One reason for this is because I’m not experienced at the corporate game. I’ve never reached the point in the corporate ladder where I got to boss around others. Why listen to me?
Another reason is that I believe one’s salary is not necessarily related to how smart they are, or even how hard they work. Some people are lucky, in that they love to do something that already makes a lot of money. Maybe they love investment banking, and all the numbers, long hours, and competition that goes with it. Others have tougher decisions. Maybe you like working with under-served populations and being a social worker. However, you’ll also have to accept that living in a penthouse loft with a view is unlikely to happen. I’d love to be the newest host on Globe Trekker, but I don’t think I have the talent for it. I think striking a good balance between these three factors is critical to a happy life:
However, once you do decide on a career path, learn everything you can. This could be via an apprenticeship, graduate school, or on-the-job training. Don’t just sit around and wait for things to happen for you. People making a six figure salary have one thing in common: specialized, in-demand skills. (I bet “people skills” count too.)
Also, I’ve noticed that with couples you can take the balance thing one step further. For example, if one person is happy with a stable professional 9-5 job, that might provide enough stability for the other person to pursue riskier activities like starting their own business or switching careers. Otherwise, the person by themselves may not chose to take that risk, for fear of loss of the sole paycheck or losing group healthcare benefits.
Finally, it’s not what you make, it’s what you keep. Of course, it’s also a lot easier to keep more if you make more. On that note, when late summer comes around, don’t be surprised if our net worth charts show some even bigger increases. We both now have full-time jobs lined up and both of us have the potential to earn annualized incomes in the six-figures. Unfortunately, we are also moving an area with a cost-of-living that is over 30% higher than where we are now, and housing costs that are 300% higher. So I’m not entirely ecstatic. Looking at houses online is even depressing 
Posted in Career | 36 Comments »
Saturday, February 24th, 2007
Two weeks ago I asked people with six-figure salaries to share their stories. There was a great response, and I wanted to both summarize and add to the discussion some more.
$100,000 Isn’t That Much… Is It?
Many people expressed that $100,000 is simply not very much money anymore, especially in certain urban areas like the San Francisco Bay Area. I went out to find some numbers to back this up.
Initially, I quoted a study that stated that only about 5% of individuals in the United States made more than $100,000. But if you take into account entire households instead, 16% of them nationwide earn over $100,000. However, in the San Francisco Bay Area almost twice as many households (31%) made that much. Here is a graph from Wikipedia that compares the income distribution among Bay Area households to the national level.
Having almost a third of households over the $100k mark would definitely skew perceptions. This is supported by the CNN Cost of Living Calculator, which says that earning $100,000 in Atlanta is comparable to earning $172,000 in San Francisco. Put another way, earning $100,000 in San Francisco is comparable to earning $58,000 in Atlanta.
That’s a bigger difference than I thought. Still, remember that the 16% and 31% figures are household figures. Also, the majority of the people that I know who work in San Francisco don’t own houses there. In the end, while making $100,000 as an individual may not be considered “rich” in certain areas, there is still no way it can be considered “poor”.
Who’s Making Six Figures?
Based on the completely unscientific comments, I made a chart showing the the breakdown of six-figure earners by job description. The categories were all very general, and some were very tough to pigeonhole. For example, what is a self-employed software project manager? Tech? Small Biz? Management?
What does this chart show? Really, not much with regards to specific professions. My two takeaways were that (1) there is a very wide variety of jobs that can make a healthy salary, and (2) you need a useful skillset and effort. Nobody responded that they simply moved papers back and forth, or that they coasted into their position. Everyone needed some combination of talent, passion, ingenuity, education, and hard work to get to where they are now.
Who Cares?
Really, this is not to suggest that making $100,000, or $200,000, or whatever, should the primary goal for anybody. As with many things, it is about balance. Many folks noted that they used to make more money, but now make less but are happier overall. Others noted the high debt levels and long education (and thus missed salary) that come with certain professional careers.
Also, we didn’t focus on the total compensation package, including health insurance, stock options, pension benefits, or other perks. I know plenty of lower-paid state workers that have enough years under their belts to get both guaranteed pensions and health insurance during their entire retirement. Think of how much that will be worth! This was mainly an exercise in curiosity, and I’m glad I did it.
Finally, it’s not how much you earn, but how much you keep.
Posted in Career | 19 Comments »
Sunday, February 11th, 2007
Even though the $100,000+ salary club gets less exclusive each year with inflation, it is still considered by many to be a sign of success. According to reports, only about 5% of workers nationwide make six figures. Although it is by no means necessary to make that much in order to lead a fulfilling life and even a comfortable retirement, I think many people (including me) are still curious as to who makes six-figures.
As I approach my 30th birthday, many of my friends are reaching or surpassing this mark as they graduate with advanced degrees or move up the corporate ladder. Here are some examples of people I know who are earning more than $100,000 per year. Keep in mind I live on the West Coast, so salaries are higher overall. (Cost of living calculator) Many of these are expected, but some may surprise you.
Investment Banker - Education needed: Bachelor’s in almost any field, preferably business or engineering/math related. If you love competition and working 100 hours a week, you can easily make much more than $100k per year.
Lawyer - Education needed: J.D. Work hard, schmooze a bit, get a good clerkship, land a job at a respected firm and you’ll be a 6F’er. As an associate you’ll also be putting in 80+ hour weeks. However, if you want to work at a non-profit, your salary will be significantly less, maybe in the $40k range.
Physician - Education needed: M.D. plus 3-10 years of residency. Salary varies wildly for doctors too. Many pediatricians make less than $100k per year, while a cardiac surgeon (10 years of residency) can make $500k+ per year. Keep in mind during residency you’ll be earning $40k a year and also working 80 hours a week.
Small Business Owner - Education needed: None. These are mostly the parent of my friends, who have created successful small businesses worth millions, from restaurants to import/export to service/construction. The common thread between all these people is that it takes enormous commitment and dedication, often at the expense of family life. Be prepared to work seven days a week, all the while knowing that you could easily lose money each month.
Read the rest of this entry…
Posted in Career | 254 Comments »
