Tag Archives: career path

3 Strategies to Increase Your Lifetime Earning Potential

Life is all about choices. One of the areas in life that the effects of the choices you make will quite possibly be some of the most pronounced is when it comes to income - making moola! Sure, we all know that determining to be a sidewalk artist is quite different than setting out on the career path to be a Doctor and choices made while one is young often have long lasting effects BUT are there different things that we can do at any age to improve our lifetime earning potential? I say yes. Here are 3 different strategies that if executed properly will almost always lead to an increase in your lifetime earning potential:

#1 Start a Business

Uh-oh. I can already hear the excuses starting to roll in: “Starting a business is just so risky!” Well, entrepreneurial risk might not be all that much riskier than employment risk - especially if you go about it in a way that minimizes risk (i.e. continuing to work your “day job” and starting your business on the side). “Starting a business just costs so much money!” Well, maybe if you are starting a company that manufactures things and needs a large warehouse and lots of expensive materials BUT it doesn’t have to. Many companies can be started with very little startup capital. Starting a business is a great strategy for potentially increasing your lifetime earning potential significantly. Don’t let excuses stand in your way.

#2 Load Up on Degrees and Credentials

We have all heard the oft bandied about stat that people with a college degree will make somewhere close to $1,000,000 more than their counterparts without a college degree but setting aside whether that is accurate or not the Wall Street Journal recently published an article highlighting the fact that college graduates are much more likely to KEEP their job in tough economic times than those without a college degree. How’s that for an increase in lifetime earning potential? Increased future earning potential studies aside for just one moment - no matter whether you are an entrepreneur who is your own boss or someone looking for a job - having credentials and degrees is one sure fire way to at least get your foot in the door. Degrees and credentials alone won’t earn the money for you but they may just earn you that interview with a potential employer or that business meeting with that potential investor in your business. Quiz! Answer quickly - if I am introduced to you as “Joel Ohman is a Certified Financial Planner™ with an MBA… blah blah” do you think differently about me (and what I might be about to say/write) than if I were simply introduced as “Joel Ohman is a computer nerd that owns a website … blah blah” ? Chances are that learning my credentials and advanced degree certainly won’t impress you or cause you to believe anything I say carte blanche but it will at least likely cause you to want to give me the time of day and potentially listen to what I might have to say in the areas of business, financial planning, etc. … right? … maybe? … is anyone still there? guys? :)

#3 Get Some Specialized Training

It’s pretty common sense that as your career progresses you should have the mindset of always wanting to be learning new things (yes, “Mr. I’m-still-learning-how-to-use-the-fax-machine”, I’m looking at you) but to take it a step further be sure and attempt to learn some kind of specialized skill set that will see an increased demand in the future. Easier said than done? Maybe, but a lot of things you can spot coming if you just pay attention. If your company is making the switch to a new computer system then be sure that you are soon seen as one of the experts in the new system. If you notice that your bosses, managers, and other superiors all have taken certain classes and you haven’t then - sign up for those classes!

What do YOU Think?

What are some other ways that one can increase their lifetime earning potential? About the Author: Joel Ohman is a CFP® and serial entrepreneur. In addition to the car insurance website mentioned earlier he also has been spending time lately working on a website with information on finding the best business credit cards. He is a first time writer at Brip Blap and recommends that you check out the recent post by Steve titled “How to Develop Good Habits”.

average career salaries

If I could travel back in time and give myself a little bit of career advice, I’d spend some time talking to young Steve about earnings over a lifetime of work, or average career salaries. The median elementary school teacher salary in the US, for example, makes about $51,000 a year. The median attorney salary is closer to $91,000. The median auditor is closer to $58,000. Here is the difference, though: a median is just a median, meaning that half of the people with that profession make more than that figure, and half make less.

The school teacher population is going to be made up of a lot of teachers making between $40,000 and $51,000 a year – maybe younger teachers, or lower-cost-of-living areas. The other half might make $51,000 to $70,000 or so. There might be a few outliers in expensive areas – New York or San Francisco – but there will not be teachers making $450,000 a year. The system is not designed to allow anyone to escape into a significantly higher pay bracket (and we’re talking about teachers, not teachers who become administrators – that’s a different job).

That’s a real difference from some other professions. Take the Big 4 firms – Ernst & Young, Deloitte, PricewaterhouseCoopers and KPMG. An auditor in a Big 4 firm probably makes less than a schoolteacher to begin with (particularly on an hourly basis). These lower-level auditors make up the majority of the employees of the firm. For every partner, there might be five managers, each of whom might oversee ten staff (for example). So 6 of every 56 people are managers or above, and only 1 in 56 are partners (I made up those ratios, but based on my experience that’s a fair guess). So the median’s lowered to account for the huge number of lower-level staff.

But in an environment like that, the chance for exceptional rewards for exceptional performance exists. Now, if you’ve worked in a corporate environment or read my last post on stupidification, you know that exceptional performance is not always the requirement for getting rewarded. Sometimes it’s being the CFO’s nephew. But as compared to the teachers above, there is a chance that earnings can grow far, far beyond their starting levels. A teacher can’t, even if they win an award as the greatest teacher in their state. An outstanding diplomat can’t break out of the government pay grades.

What all of this means is that not only do you have to consider the starting salary for your career, but you have to look at what the possibilities for exceptional earnings are. I know earnings are not everything. Many people can also fall into the trap of believing that they will be the exceptional performer, but in a bottom-heavy organization far more people will quit or be fired than will make partner or executive.

So consider average career earnings, and then think about whether you are willing to be the exceptional performer. If you aren’t, maybe the average career earnings aren’t that critical. If you don’t plan to excel, a career where everyone can be expected to be compensated within a narrow range is fine. If you do plan to excel, make sure it’s in a profession where that excellence might result in reward. That’s not to denigrate teaching or praise public accounting. I realized early on in my career in public accounting I wouldn’t be a partner; I didn’t have the drive to be an exceptional auditor. So I joined the lower level of the median salaries and might have been happier – and done better over the course of my first 10-15 years of working – had I done a job search and chosen a different career path, with a narrower bank of average career salaries.

Note: I haven’t read Seth Godin’s Linchpin: Are You Indispensable? yet, but I gather that’s what that book is all about – the idea of making yourself into an “artist,” which Godin believes makes you deeply committed to becoming indispensible to your organization. Maybe I should read it…

teaching matters

I don’t really remember if I have talked about my stint in PhD school at length before. After graduating with a bachelor’s degree in mathematics I was accepted directly into a PhD program at a very, very large state university. My goal was to pursue a PhD in order to become a college professor. For a couple of generations, my family has been educator-heavy: my father was a college professor (he’s now retired); my mother is an elementary school gifted teacher; my maternal grandfather and paternal grandmother were both teachers, too. It seemed a perfectly reasonable career path for me. My part-time job through college was substitute teaching, so I was familiar with the day-to-day business of teaching. I arranged all of my classes each semester to fall on a Monday-Wednesday-Friday or Tuesday-Thursday schedule so I’d be free 2-3 days a week to teach.

So I arrived at graduate school with a specific goal: to become a college mathematics professor. Sure, I had dabbled with the idea of being a lawyer/diplomat/etc. throughout college but it had become clear to me after four years that I only enjoyed two subjects enough to be serious about them: mathematics and Russian. I also enjoyed computer science and linguistics, but I didn’t spend enough time taking classes in either discipline to have the credentials to go to graduate school without a fifth undergraduate year. I briefly considered Russian, but this was the early 90s, and Russia appeared to be descending into chaos; a PhD in Russian seemed to be a ticket to nothing more than reading Dostoyevsky in the original Russian. So I settled on mathematics.

Looking back, I realize that I was good at Russian and mathematics for only three reasons: I had some talent for languages, I was good at abstract thinking and I had young, enthusiastic and personable professors in both subjects. I’ve always thought of mathematics as a language: I can’t understand why someone who is good with foreign languages wouldn’t have the skills necessary to understand the “grammar” and “vocabulary” of mathematics. But without good teachers I would have lost interest in those subjects. I love history now, for example, but my history professors in college (and high school, for that matter), were boring, pedantic and uninspiring. It took me ten years after leaving school to rediscover my love for the subject.

To summarize my experience in PhD school: I didn’t make it past the first year. I didn’t enjoy my teachers. They weren’t teachers. They were researchers and writers who were forced by their sponsor - the university - to stoop down to teaching on occasion. Conversely, I did enjoy teaching the intro to calculus classes I had to teach as part of my graduate stipend. I think my students enjoyed them, too. But one thing leapt out at me early in my stay: I’d have to endure 5-6 years of horrendous “instruction” in areas I didn’t enjoy to become a college professor.

I think looking back I would have been happy enough to continue teaching intro to calculus. It’s hard to understand how another five years of abstract mathematics would have enabled me to teach better. It would have helped me write papers or do research, of course. But I wondered as I dropped out why I couldn’t have been on a “college professor” track instead of a “college researcher/writer who teaches an occasional class” track. The same thing can be applied to almost any discipline. Could I be a good history teacher, for example? I think I could, because I’m a good teacher. I’ve taught enough training classes in my corporate positions, mentored enough staff and done enough speaking to realize that you don’t have to be an expert to educate. And conversely, just because some of my professors in graduate school were brilliant at, say, field theory didn’t mean they could teach anyone how to tie their shoes. They were clearly bored with the concept of instruction.

There’s a tired old saying that makes me grind my teeth every time I hear it - in my younger days I actually punched a fraternity brother who was mocking me with it: “Those who can, do, those who can’t, teach.” Anyone who thinks that because they are an “expert” at something - sales, car repair, accounting, golf, whatever - that they can teach that subject should shut up and go run a course on that subject. They should develop lessons: not just a speech, but lessons. They should try working with slow learners while challenging fast learners. They should experience how easy it is to lecture and how hard it is to engage. Too many people think they can teach, when all they can do is talk.

Good teachers have inspired me. The same can be said of good mentors. My first manager in public accounting (now a partner) was a wonderful mentor and teacher. She patiently worked with me my first couple of years to develop my accounting and auditing skills. She was never too busy to explain and never impatient. It took me another four years of working for petulant, irrational and mentally and emotionally abusive managers in the firm to realize how rare she was. When it became my turn to mentor staff, I always remembered her example. Being a good teacher made me far more effective in corporate life; it made my relationships with the people who worked for me better. It made them more efficient, happier and more likely to turn around and train the people who worked for or with them well.

I’ll finish with another anecdote. When I started third grade my family very briefly moved to northern Illinois (I think we were there less than a full year) for my father to finish his graduate degree. My parents jumped through hoops to get my brother and me into a good public school, rather than the faraway and dangerous public school we were zoned for. Even then, I didn’t fit in with the kids there, and disliked most of my teachers. One teacher, Ms. Zider, took it on herself to help me since I was struggling so. She came up with extra lesson in geometry for me (this is third grade, keep in mind). She worked with me at lunch and after school. I was excited by the lessons and they are the only thing I remember from that long, largely sad year. As an adult, I can better appreciate what she did: she gave up her free time at lunch, time after school when she could have been finishing up lesson plans or doing paperwork to stay late with one friendless kid who was otherwise bored at school. Teachers matter.