The 3 Choices That Could Cost You Millions of Dollars.
The Power is in Your Hands, Your Choice of . . .
There are three decisions that can affect your finances more than any other choice you’ll ever make. And though making a budget is necessary, and controlling your spending is required, if you choose wisely when making these decisions, you’ll set yourself up for financial success. Your choice of college, career, and city will set the foundation for financial success.
Because we all know that you could save $5 on coffees all you want, but if you’re only pulling in $25k per year, or paying $4k rents, it’s going to be tough to make much headway.
Want to know what these choices are? Most likely, you’ve already put them behind you. But that doesn’t mean you couldn’t call “re-do”, and choose again. You can always make a positive change starting now.
And just to make it interesting, I added in some alliteration . . . because I can. 😉
The first choice that we all make . . . or perhap already made is:
Your Choice of College – or not.
It’s well documented that college graduates on average earn a million dollars more over their lifetime. Sure, you can choose to skip college. And sure, it’s not for everyone. But if you skip college, what’s your plan?
Will you pursue a career in the trades, the military, or entrepreneurship? These are all fantastic options, but many more choose neither of these.
They seem to be content working their minimum wage job in perpetuity. And whether by deliberate choice or maybe other life choices, they are stuck in a low income hard life.
On the other hand, even if you do go to college, you can still screw it up. You could go to school, and not graduate. Or you could take out tens of thousands in student loans and live it up.
How to Pick a College.
You should pick a college in order to minimize your costs. Avoid student loans at all costs. Yes, it can be done. Go to a local community college, or pick a lower cost state school. You can work during school, and you can also apply for scholarships. Will it be easy? Of course not. And this should go without saying, but make sure you graduate.
Ideally, you would pick a school where you could live at home, and more importantly, you would graduate either debt free or with very little debt.
If you pick a school that you can afford, you’ll be decades ahead of the average American – who is buried in student loan debt. Instead of starting your life with a negative net worth, you’ll start out at zero or perhaps even positive.
Your Choice of Career
This is very similar to the choice above. But what do want to be when you grow up? What major will you choose in college? Or what trade will you learn?
Your choice of career can have a huge financial impact on your life.
There are three main factors that should go into what career path you take. Ask yourself these questions to narrow down your options. Start with all the careers that are available, and hopefully after you go through these questions, you’ll have a good idea of what a great career would look like for you.
1. What do you want to do?
Find some skill or something that you are passionate about. Maybe a few things. Then see if you can’t parlay that into a career. If you get stuck in a job that you hate, it won’t matter what the salary is. You’ll hate your life.
If you have good analytical or problem solving skills, perhaps engineering would be a good fit. Or maybe if you love people and helping others, a career in nursing or healthcare would work for you.
If you like building or making things, any one of the trades (carpenter, electrician, plumber) would be a great career choice.
What sometimes happens is, a person with great people skills gets stuck in soul-sucking customer service job when they could do much better in sales or management. In order to stay out of that trap, you have to have a plan. Where do you want to be 10 years from now? And how will you get there?
2. Of those things that you want to do, which one has the best job market?
You’re looking for a career path in which their are thousands if not millions of jobs available in a broad sense. You can specialize after you get the job. Most employers don’t expect an entry level position to have all the training they need coming in.
And it’s no good to pick a career in which there are only a thousand jobs available in the whole country – even if it’s something you absolutely love. Think: High School Music Teacher. There’s likely one or two of these per high school. As opposed to a general high school teacher who happens to love music, where there are dozens or more teaching jobs available per high school. The market is much broader for a high school teacher.
You also don’t want to specialize too quickly. Most employers will offer on the job training that is specific to their industry – for free. You don’t need to get that on your own. If you do, you’re only locking yourself into a narrow career choice. And if it doesn’t work out . . . it was wasted time and money.
As an example: as a mechanical engineer, I design and build ultrasound probes for industrial applications (aircraft engines, refineries, etc.). A former employer of mine offered multiple classes on ultrasound and its applications. I was able to get some of the specialized training I needed – for free – after I got the job.
Don’t stay in school to get your Master’s degree or even PhD without a good plan. You’ll end up being overqualified for many jobs, and limiting your job market unnecessarily.
3. Finally, pick a career with a good income potential.
It’s all well and good to serve in some capacity as an underpaid social worker, or culture the masses through the arts. But you still have bills to pay. If you don’t have the skills or personality for some of the more well known high paying jobs (doctor, lawyer, engineer), perhaps you could find something else.
Check out this listing of 100 best jobs in America. No surprise, many of them are in the healthcare field, but you can still do well in the trades. For instance, a plumber has a median salary of over $51k per year. Not too shabby with no student loan debt.
And a web developer could earn north of $70k per year.
If you love numbers and statistics, you could be an actuary ($100k), a statistician ($80k), or an accountant ($68k).
The bottomline is that your choice of career will determine your income. You don’t have to settle for a minimum wage job.
Do your research before you pick a dead-end career.
Your Choice of City.
So after you’ve decided on a career plan, and whether you need college or not, there is one other major decision that can either make or break your financial future.
Or course, it’s where you choose to live and pursue said career. Notice I said “choose” to live, and not “forced” or “required”.
This is where many go wrong. They choose wisely with their career and education, but they blow it on the city in which they reside. They have little to no student loans. But the cost of living is so high for their income, that they can barely make ends meet.
It’s no good to make $100k per year if your rent is $4k per month in say, New York City, San Francisco, or DC.
And they feel like they have to live in a certain area because “that’s where the jobs are”, or their family pressures.
Listen closely, You can live where ever you want. In today’s world, it’s relatively straightforward to travel a few hours by car or plane to see family. Pick a region with lower cost of living where you can get a good job.
The choice of city or region in which you settle will set a baseline cost of living that will be with you for as long as you live there. And if you’re like most people, you won’t want to move once you buy a house and have kids. You’ll be almost stuck at that point . . . almost.
Unless, you start out in a big city, and move after a few years to a lower cost of living area. This is known as geoarbitrage. This is also what I and my family did.
The great thing about geoarbitrage is that the salary point at which you enter the market is higher if you start in a big city. And when you move or leave the city, you don’t necessarily have to take a pay cut. I was able to keep my same pay, but dramatically reduce my costs.
Don’t get caught living where you grew up, just because everyone you know is there.
After reading through all of that, if you feel discouraged, don’t be. If you feel like you made all the wrong choices, it’s ok. You can still make a change. It’s not too late. You can always move to a new area, and make a career change. Sure it’s always harder the longer you wait, but that doesn’t mean impossible.
The results of these three decisions could mean millions of dollars over your lifetime. Your choice of college, career, and city are vital to your finances. I can’t state it enough. Your cable and cell phone bill won’t impact your finances are much as these choices.
How did these 3 choices work for out for you? If you could go back, what would you change?
Please leave me a comment and let me know. Thanks for reading and sharing.
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