For most of us, our careers will produce more income over time than any combination of investment assets that we will hold. By recognizing that our career is in fact an investment asset, we can start to plan for how to secure, diversify and figure out how to grow this investment asset.
Understanding You Career
A career can be compared with scaling a rock climbing wall. In this situation the climber is tasked with finding the right combination of hand grips and footholds to use in a struggle to reach the top.
Taking risks can result in great advancements, a slight slip, or they can even require the climber to start all over. Sometimes it is necessary to have a long pause at one station. Lateral movement can sometimes help.
Reaching the top of the climbing wall will take time and energy, and the climber’s pressure and desire to succeed will probably increase the higher the person climbs.
The reality is that most of us accept a first job and we build upon the experience and skill set to transfer to other positions, always seeking, either intentionally or due to life circumstances, the better handgrip or foothold.
The average American changes careers – not just jobs – on average, every five years. These changes are either be ascending, descending or lateral moves.
Progress can come all at once or it may not come at all.
In many instances it is okay to not advance up the wall, so long as the position on the wall will allow you to reach your financial and life goals. In other cases, it is necessary to make lateral moves or even to descend down the wall in order to move further up the wall.
It is important to understand where your career is in light of this analogy and how that fits in with your personal vision and financial and life goals. Understanding where your career is will help you secure your career.
Securing Your Career
Once you understand where your career is and where you need or hope that it will go, you can start taking steps to secure your career.
The first step is to obtain disability insurance coverage. Disability insurance provides for payments when workers become sick or otherwise disabled and unable to work. You can think of this as your climbing wall safety harness. Without this harness, any slip can cause you to have to start over and it can even cause you great harm.
Many of us my be lulled into believing that we will not be changing careers or that we will be working our new job for a long period of time. The statistics do not support this position. As such, once adequate disability insurance is obtained, the next step is to start preparing for the next major career move.
This preparation may include obtaining additional education, training or designations either in or outside of our current career field (yes, lifetime learning is here and we all need to do it), taking steps to establish expertise in particular fields (such as publishing articles or a blog), networking with other allied professionals to build up leads for other positions and to establish trust, or it may include getting involved in new activities and hobbies (hobbies often produce great leads for future careers because individuals heart or passion is often found in hobbies).
The third step is to build up an emergency fund sufficient to cover several months worth of unemployment. Experts tend to recommend an emergency fund equal to six months of current earnings. This may not always be possible, but it is definitely a good goal to set and work towards achieving. At a minimum, we should all take a few hundred dollars from our current earnings to set aside in an “okay, now I am unemployed fund.”
Taking these steps now can go a long way in helping ease the next career transition (that WILL happen and it WILL probably happen sooner rather than later).
Growing Your Career Income
Statistics show that the wages for the average American have not kept up with inflation. This means that most Americans have to work much harder today in order to have the same purchasing power or standard of living than they had in the past.
This is why it is imperative that all of us focus on growing our career income over time. This does not necessarily mean that we have to commit to working more hours. This does mean that we need to work smarter, be more efficient, or be lucky enough to find a job or start a business that pays more.
Where do you fit on this range of options? Can you (realistically) grow your career income at your current job or do you need to make a change? If so, you will know better than anyone as to how you should go about growing your career income.
For example, a school teacher might find that she cannot advance in her current position. She may find it necessary to obtain a real estate license or take the classes to sit for the certified public accountant (CPA) or certified financial planning (CFP) designations. There are any number of possibilities.
Once the newly minted CPA or CFP starts her new career, she should begin thinking what the next move might be if she chose or was forced to make another career move. Perhaps she would attend law school at night to become an attorney or obtain a MBA to become an investment banker.
Of course, the teacher may never have to make these career changes – the point is that she would be more prepared to do so if she needed or wanted to do so in the future.
Regardless of what moves she makes, by taking steps now and not waiting until she is forced to make a career change, she will have options. She will also be able to plan to grow her career income to enable her to meet her financial and life goals.
At some point most of us will reach a plateau where our career is producing enough income to enable us to meet our goals. At that point, we still have to continue to diversify our job skills and grow our network – in preparation for the worst, and to keep an eye out for further opportunities to increase our career income.
This opportunistic and always improving mentality will go a long way in increasing the income that can be earned by a career over time and, for most of us, it will be the best investment any of us will ever make.