After spending a decade as a pastor, I realized in May of 2018 that I was ready to make a drastic career change...into personal finance education.
I’ve always loved to write, so I wanted to first see if I could actually make money writing about personal finance. But I made a commitment to myself. In one year's time, I was going to have a day job where I helped people learn how to handle their money wisely. The question was just in what capacity.
So I set a deadline for myself. If I hadn’t figured out a way by May 2019 to make enough money as a freelance writer to pay the bills, I would get certified as a teacher and apply to be an economics teacher at local high schools.
J.D.'s note: In the olden days at Get Rich Slowly, I shared reader stories every Sunday. I haven't done that since I re-purchased the site because nobody sends them to me anymore. But earlier this year, Mike did. I love it. I hope you will too.
Earlier this year, I sent my wife a text message: "On a scale of 1 to 10, how freaked out would you be if I quit my job this afternoon?"
My wife and I had only been married a short while, but she'd known since our second date that I didn't plan to work in my traditional job until normal retirement age. She also knew that I hadn't been very happy at work in recent months.
We're very compatible financially — both savers raised in working-class families that didn't always have a lot. We make a point of having what we like to call "Fun Family Finance Day" from time to time. On Fun Family Finance Day, we do everything from competitively checking our credit scores to discussing questions that get at the root of our money mindsets to help us create our goals.
But this question wasn't part of the plan. Not then.
And it was never on any of the lists of questions that we'd discussed with each other. It was like a pop quiz, a pothole in the smoothest relationship road I'd ever traveled...and I was the one putting it there.
Dreams Remain Dreams Without Doing
My wife and I rarely argue, but when we do it's usually about food. It's the kitchen and the grocery store that are our battleground. Our finances are fine. Thankfully, when you're confident in the life you've created and the person you chose to build it with, it's a lot easier to be honest about what's on your mind.
That still doesn't always mean you get the answer you want. Or the answer you were expecting. She responded: "Wait what. Kinda. What would you do?"
A completely reasonable and fair question. Not to mention one that I'd probably have to get comfortable answering from a lot more people.
I think my immediate reaction was: We talk about this stuff all the time, where is my, "No worries baby, YOLO!"? (I must have watched too many romcoms back before we cut cable from our lives.)
Being a grownup, it turns out, is actually really hard sometimes. I was about to learn that talking about something, and actually doing it, are a world apart.
Life is full of dreamers and doers. Sometimes those two personalities cross over. But there are plenty of people who go through life talking about so many things they'll never have the courage to try — or the discipline and determination to follow through with.
Which person was I? The dreamer? The doer? Or that fortunate combination of both?
When I sat down to take my AP Computer Science exam at the end of high school, I knew it would be bad. As a class, we had no idea what we were doing for the entire year. Our teacher was in his last year of teaching and had already given up on us.
We entered the gym hopeless, a ragtag bunch made up of students who really just wanted to avoid taking statistics. The test began, and immediately three boys in the first row put their heads down for a nap.
I stared blankly at the first free-response question:
"Recorded sound often begins with silence. Write the method trimSilenceFromBeginning that removes the silence from the beginning of a song."
If Spotify were trying to get free labor from high school students in a hot gym, pencils scratching desperately, they were out of luck. I gave each question a half-hearted attempt, then passed the rest of the time writing sonnets in iambic pentameter. (At least they were computer science related!)
To my utter lack of surprise, I received the lowest possible score.
Based on this experience, I could have easily concluded that coding wasn’t for me. Maybe I didn't have a "logical" brain since it just didn't click with me. Maybe instead I should major in something that came easily to me, like psychology or English. I could have left computer science to someone who was naturally good at it, writing open source software in her free time and geeking out over dependency injection.
But I didn't.
Today, I am a software engineer because I didn't just "follow my passion". I made it happen.
Why “Follow Your Passion” is Bad Advice
There are two theories about following your passion when choosing a carrer.
- The "fixed" theory of passion posits that for every individual there are core passions that are set at birth. These natural inclinations are just waiting to be discovered. This is the one we trumpet from graduation podiums, encouraging young people to "follow your dreams!" and "do what you love!"
- On the other hand, the "growth" theory posits that passions are cultivated over time. This idea is that passions are nurtured, watered by continuous work.
It might be slightly less inspirational shouted from the rooftops — “Do whatever. If you work hard, you will like it eventually!” — but the growth theory is great news for those of us who fail something the first time. Rather than waiting around for passion to show up, we can take matters into our own hands and make our own passion.
Last week, I found myself revisiting the fantastic Inside Jobs project from The Atlantic. Atlantic staffers interviewed 103 American workers from all walks of life. The magazine then collected those interviews into a single, unified website.
Here's how one of the project's leaders describes her aims:
So much of my aspiration for this project was to hear from people affected by the realities that business writers so often cover: what it's like to be a minority in a workplace, or the challenges of working parenthood, or the struggle to remain relevant as an industry changes. And we succeeded in finding those types of stories — for example, the three female lawyers who started their own firm, or the coal miner who is adapting to the focus on clean energy.
The ones that most stuck with me most were the people in the jobs many consider mundane, such as the janitor who so acutely equated people's respect for his job with their ability to throw away their own trash, or workers outside of the traditional economy, such as the stay-at-home mother who struggled to find her place in a feminist movement that emphasizes women’s professional achievements.
The Inside Jobs website has a fun layout. Each interview has its own page. From the main index, you can filter stories by subject, or filter workers by industry, age, or other demographic factors. Or, if you're like me, you can simply scroll down and click on any of the 103 worker portraits to read a random interview.
What Do People Do All Day?
The Inside Jobs project reminds me of one of my favorite books from childhood, Richard Scarry's classic What Do People Do All Day? I've always been fascinated by the vast variety of work available to people, and how different each job is from every other job. Sure, there's a degree of sameness, but there are tons of differences.
- As a blogger, I sit at home all day and write. In a way, it's like I'm an artist (but without any sort of actual artistry). Everything about Get Rich Slowly comes from me. If I don't work, nothing happens here. (Actually, this isn't quite true anymore. Nowadays, Rachel manages social media and Tom is handling business development.)
- This process is similar to the one faced by my friends who are entrepreneurs or professionals. When you own your own business, it's up to you to make it succeed. When you have your own accounting firm or law office, it's up to you to build your reputation and client base.
- Then there are folks like my girlfriend Kim, who works as a dental hygienist. Whereas I see nobody all day long, she sees tons of new patients every day she works. Her work is physically demanding; mine is not.
- I have other friends who are band teachers and forensic chemists. I know engineers and salesmen and psychiatrists. I know lost of financial planners, of course, as well as factory foremen and county bureaucrats and hospital administrators.
It's just like Richard Scarry taught me when I was a pre-schooler: Everyone is a worker.
And it's just like Brenda Ueland taught me (in a book about writing, of all places): Everyone is talented, original, and has something important to say. It’s the personal histories that make up history (by which I mean the grand tapestry of world events). Without your story — and mine — the larger story doesn’t exist. The mass movements of kingdoms and cultures are built on our backs.
Maybe that's why I like oral histories so much.
Speaking of which, the Inside Jobs project naturally reminds me (and many others) of the work of journalist Studs Terkel.
I've been frustrated lately with the quality and quantity of my work. I haven't produced as much here at Get Rich Slowly as I would like -- due largely to Fincon and its aftermath (calls and meetings, calls and meetings) -- and what work I have produced isn't as good as I would like. This lack of productivity makes me agitated, which makes me even less productive because I'm not in a good place mentally. It's a vicious circle.
How nice, then, to rediscover the transcript of a 30-year-old talk from Richard Hamming, a former math and computer professor and researcher. (Hamming was also part of the team that worked on the Manhattan Project during World War Two.) Hamming titled his talk, which he presented on 07 March 1986, "You and Your Research," but his actual subject was how to do great work.
I re-read the transcript this morning while I was once more feeling exasperated with how little time I've had for writing lately. (For me, writing is my yardstick for productivity. It doesn't matter how much other work I've been doing behind the scenes here; if I'm not publishing, I'm not happy.) Although this talk discusses the work of researchers and scientists, I believe that much of the advice applies to me and to writing. I suspect that many of you will find its lessons valuable too.
It's a long talk, though. In order to make it more palatable -- and in order to help me remember more of this material -- I'm going to summarize Hamming's message. I hope you find it useful.
What Greatness Isn't
Most people think greatness is achieved by luck, Hamming says. They're wrong.
Yes, great ideas and achievements all contain elements of chance, but hard work and preparation are the necessary groundwork to bring about this luck. "Luck favors the prepared mind," Pasteur once said. And the brash Newton argued that, "If others would think as hard as I did, then they would get similar results."
Hamming would agree that luck is no accident. Unexpected good things are more likely to happen when you do the work needed create favorable conditions for them.
Nor is greatness achieved solely by genius. Sure, there have been many brilliant scientists. But there's been more great work done by folks who were less gifted yet willing to put in the time and effort to achieve the results.
Finally, it's never too late to be great. Yes, many researchers did their best work when they were young. But plenty of others produced greatness later in life, after they'd had a chance to accumulate knowledge and experience.
So, if luck and youth and brains aren't pre-requisites for great work, what is necessary? Let's take a look.
Yesterday at the Financial Careers forum on Reddit, a user named /u/unfoldcareers posted some useful advice for job-seekers. "I've reviewed and screened thousands of resumes," /u/unfoldcareers writes, "and I'm sharing my preferred resume format...along with my best resume advice."
The poster notes that "bad resume format" leads most folks to get little or nor response to their job applications. To help current job hunters, /u/unfoldcareers created a free resume template that can be downloaded via Google Docs.
The July 2018 issue of the AAII Journal -- the monthly publication of the American Association of Individual Investors -- includes an intersting article about how to "increase your retirement resources". This plain English piece summarizes some of the findings from the authors' research paper "The Power of Working Longer".
According to the article, there are three primary factors that determine "the adequacy of retirement resources". Those are:
- When a person begins participating in an employer-sponsored saving plan,
- What percentage of their earnings they save in such a plan (i.e., their saving rate), and
- At what age they retire and begin taking Social Security benefits.
Until Elon Musk invents a time submarine, it's impossible for a worker to go back to their youth and begin saving for retirement earlier. Because of this, the authors focused their research on the relative power of saving more and working longer.
There's no question that frugality is an important part of personal finance -- you can't outearn dumb spending -- but trying to get rich by pinching pennies is like trying to win a car race by conserving gas. If you want to reach the finish line fast, you can't be shy with the accelerator!
Today I want to explore a better way to boost your savings. Let's talk about how you can earn more money. Whether you're self-employed or working for somebody else, your income is determined by three factors:
- Your knowledge and skills. If you want to earn more, it pays to learn more.
- Your productivity. Both the quality and the quantity of your work affect how much people are willing to pay you.
- Your ability to sell yourself. To be paid what you're worth, you have to ask for it.
If you want to earn more money, you have to become more valuable in the job marketplace -- and demonstrate that value for the market to see. Let's look at how to make that happen.
Some folks claim that if you do what you love, the money will follow. Others say that a job is just a job — you're not meant to like it. The truth lies somewhere between these two extremes. There are few things worse than a job you hate; and many people enjoy fun, fulfilling careers while earning a good living.
Whatever the case, any job is more bearable if you're paid well. Plus, a high wage means more money to pursue your goals and dreams. One of the best ways to increase your income is at the source: during salary negotiations when you land a job.
Why You Should Negotiate Your Salary
For many people, salary negotiations are awkward or scary. But in his book Negotiating Your Salary: How to Make $1000 a Minute, career coach Jack Chapman argues that those few minutes during which you ask for more money in an interview can make a difference of tens of thousands of dollars over your lifetime. Maybe even hundreds of thousands. He says you can literally earn $1,000 per minute if you do this right.
Research backs him up. According to a 2010 study conducted by George Mason University and Temple University, failing to negotiate on an initial job offer could mean missing out on over $600,000 in salary during a typical career.
"We spend years thinking about what we'll be when we grow up," Chapman writes. "But when it's time for a raise, most of us just accept whatever we're offered. How many minutes do we spend negotiating the money? Zero."
Only about half of all applicants negotiate their salary; don't be one of these folks. If you don't ask for more money, your employer certainly won't just give it to you.
Before we look specifically at negotiating salary, let's review the basics of negotiation in general.
You Can Negotiate Anything
In his book You Can Negotiate Anything, Herb Cohen writes that there are three crucial variables in every negotiation:
- Power, or the ability to get things done. In salary negotiations, you gain power from perceived expertise or legitimacy. The better qualified you are for a position, the more leverage your have. You also gain power through persistence, attitude, and taking calculated risks. You have power if you’re willing to walk away; if you’re not, the company can name its price.
- Time. In negotiations, the side with the most time generally has an advantage. No matter how much pressure you’re under, always keep your cool, maintaining an appearance of calm. Having other options buys you time. You’re in a better bargaining position if you already have a job (or job offer) and don’t need to accept his one. When you believe you have to have something, the other side can easily manipulate you.
- Information is the final piece of the puzzle. The more you know, the stronger your position. Do your research before you negotiate. During negotiations, act on whatever new info comes to light. The interviewer’s questions, responses, and attitude all give you valuable information.
Now let's look at two (very similar) methods for negotiating your salary.
In 1987, Marsha Sinetar published Do What You Love, the Money Will Follow, a popular book about finding your dream job based on your passions. She urged readers to "follow their own hearts to the work of their dreams".
Sinetar is a proponent of what she calls Right Livelihood: Doing your best at what you do best.
"Each of us, no matter how ordinary we consider our talents, wants and needs to use them. Right Livelihood is the natural expression of this need," she wrote. "When we consciously choose to do work we enjoy, not only can we get things done, we can get them done well and be intrinsically rewarded for the effort. Money and security cease to be our only payments."
"Do what you love" sounds like a great idea -- who wouldn't want a dream job that was both fun and paid the bills? -- but as many people have pointed out over the past thirty years, it's generally poor career advice. When folks cling to the belief that they'll have no trouble if they do what they love, they run the risk of not being able to make ends meet.
One obvious problem is that not everything you enjoy doing can generate a reliable source of income. I like videogames, for instance, but I'll never make big bucks playing Hearthstone. It'd be foolish to try.
A few years ago, career columnist Penelope Trunk put it this way: "I am a writer, but I love sex more than I love writing...I don’t sit up at night thinking, should I do writing or sex? Because career decisions are not decisions about 'what do I love most?'"
There's another problem that's seldom mentioned. When people do manage to find what they think is their dream job, to make a career out of what they love, they frequently lose enthusiasm for the very thing they once valued. I've experienced this first-hand.
When I started Get Rich Slowly in 2006, I was working as a salesman for the family box factory. I didn't like my day job, so blogging was a fun escape. Eventually, I made enough from blogging that I could quit my job selling boxes to write full time. I was going to do what I loved! Awesome, right? In many ways, it was awesome -- but it also quickly became a curse. Writing went from a fun escape to a tedious chore, a slog instead of a joy. (That's one reason I sold this site in 2009.) When I repurchased the site last fall, I thought long and hard about how to avoid falling into that trap once again. (So far, so good!)
Having said all that, I don't think it's bad to seek your dream job. In fact, I believe it's a worthwhile goal -- as long as you have realistic expectations (and can be patient). The challenge is to juggle what you're good at, what you enjoy, and what people will pay you to do.