Congratulations to Legal Andrew on completing the bar exam. In this post he asks about advice for a new professional. Below are my thoughts. If you have any further suggestions for Andrew, please add them to the comments here or on his original post.
1. Live Beneath Your Means
Your first year as a wage earner will really set the tone for how you spend money. Making a conscious decision to live below your means establishes a habit that will give you flexibility in the future. If you can afford a $1200 apartment, look for ones in the $800 range. When I started out after college, I tried to live on 20% of my income. Later on this gave me a great deal of flexibility that allowed me to make certain choices that my peers just couldn’t make. Ultimately these choices resulted in even better pay.
2. Look at the learning potential of each job.
Especially when you are just starting out, the money you make is less valuable than the experience. Getting a solid base of experience will be far more valuable in the long run than taking the highest paying job right out of college. For example, you might be able to get management experience at a smaller organization that wouldn’t be possible at a large company–even if the pay is lower. Pay attention to your Work Zone so you know when it is time to start looking for a different job.
3. Take advantage of retirement and other savings options
This goes along with living beneath your means. It is much easier to put money away when you are starting out, than when you have a mortgage and family to support. Most employers offer some sort of matched savings plan, so at the very minimum you should put enough into retirement to get the maximum employer contribution. Also some retirement programs allow you to save money tax free and then use the money to buy your first home. Other programs will allow you to borrow from yourself at a very low interest rate.
Even if your employer doesn’t offer any type of retirement program, the government will still give you tax breaks for putting money aside for retirement. Take the time to understand the difference between a regular IRA and a Roth. Do some calculations to understand how each type can benefit you based on your career plans.
A Health Savings Account is another great investment tool. It allows you to save money pre-tax that can be used for medical expenses. The account stays with you even if you change jobs. By spending a few years fully funding this account, you can build up a nice cash reserve for medical expenses. In the future, this cash reserve can give you some flexibility to choose opportunities that may be very lucrative, but have little or no insurance benefits, e.g, starting your own business.
4. Take advantage of educational programs
I once worked at an organization where I was paid a fair amount based on what other employees were making, but where everyone was making much less than equivalent positions at other organizations. When I took the position, I had asked about educational benefits. They had a policy of paying for pretty much any additional schooling, but very few people took advantage of this. As a result, I had access to a budget to take as many classes as I could handle. The value to me worked out to more than $10,000 per year. More important than the monetary figure was the way the organization handled flexibility with school schedules.
To be best prepared for every future opportunity, you are going to have to be constantly learning new things. The average person finishes college and (other than on the job experience) stops learning anything new. By continually educating yourself, you hedge against outsourcing and other shifts in the market to assure yourself of always being in high demand.
5. Work for yourself
Even when you are working for someone else, you need to see yourself running your career like it is a business that you own. Your employer doesn’t owe you anything. Be the best worker possible, but don’t forget that you can work somewhere for 20 years and the company can still go out of business because of decisions that were completely out of your control.
Always maintain practices that will let you quit your job if you need to. Just having the option will keep your mindset in a much more positive state. For example, if you know you have enough savings to live for a year, it is much easier to be true to yourself and your convictions than if you are living paycheck to paycheck and just barely getting by. I’m not saying you should go around threatening to quit, but just knowing that you have the option does a lot to improve your self confidence and keeps you from getting stuck in a “master/slave” type relationship with your employer.
If you want to actually own your business someday, do your homework and learn all you can as an employee. By being prepared, you’ll be in the best possible position to launch your business when it will be the easiest on you and your family.
6. Learn to network
Start by making it a point to keep in contact with your college friends. Even just sending a Christmas card every year keeps you in some measure of contact. Most of the big opportunities in life are going to come from people you know, so increase your chances of success by not letting friendships grow stale.
When you leave one job for another, be sure you have a list of contacts to take with you of all your co-workers. You may have their email addresses and last names memorized now, but 7 years down the road simply remembering a guy named “Scott” isn’t going to help you much.
(Make sure you keep this contact list backed up. It isn’t a bad idea to print it off every few years and keep the printout somewhere safe. )
Be on the constant lookout for new people to meet. Don’t forget that you are looking to form two-way relationships. Finding people who need your help is a great way to make new friends.
7. Take vacations
Highly motivated people often overlook the need to take vacations. Don’t forget to consider vacation time when you are selecting a job. Sometimes if you can’t negotiate salary, you can negotiate an extra week of vacation.
Taking a vacation is not a sign of weakness. You need to take a break from work in order to be able to operate at your full efficiency.
8. Practice good habits
As you start your career, take the time to establish good habits. A regular exercise program, reading program, disciplined sleep schedule, healthy eating, etc. are all things that are easier to establish at the beginning of your career than trying to retrain yourself later on.
9. Make sure you enjoy what you are doing
Don’t just give up on your job just because it is hard, but you should be honest with yourself about your happiness. Don’t waste your life doing something you hate. There a plenty of opportunities for hard workers and it is possible to even change careers if you find something you like better.