MoneySmarts U: Career Risk

MoneySmarts U: Taking career risks

When you’re in your twenties, you can and should take career risks. Find out how to go about it—and how debt can hold you back.

Podcast transcript

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ALEX: Welcome back to another week at the MoneySmarts U podcast with Pete the Planner, my name is Alex Eaton. We’re going to change it up a little bit this week. On this podcast for the past couple of seasons, we’ve been doing a lot of solid actionable financial tips. Things you can do to put yourself in a good position both through college, and to set yourself up for a good after-college life. But today, we’re going to still talk about money, but in a different sense than unusual, Pete. We’re gonna talk about it, dare I say, it’s a little bit more of a philosophical point of view.

PETE: All right, well, let me grab my philosophy book here from college.

ALEX: We won’t be quoting Socrates, but it could come up. So the angle I wanna take on this, is the idea of taking risks while you’re in or preparing to leave college, specifically related to career moves and different things that would affect you financially. So things like taking a safe job versus taking a risky job, or something that I did is, knowing you’re gonna have debt, anything like that, taking a trip or spending an amount of money to do something you want to do or to pursue something you love.

PETE: Yeah, there are so many ways to look at this. I wanna start here. I interviewed the CEO of a billion dollar corporation once on my radio show. Super smart guy, had sold numerous companies. He’s worth hundreds of millions of dollars. And he looked at me and he said, it’s ridiculous to think that in your 20s, that something is too risky to do. Because there is no risk when you’re in your 20s, right? Because that is the time of which you should take chances. Now, you still have to be responsible and not go nuts. And you can’t justify stupid things by just calling it a risk, but he’s got a really good point.

ALEX: Yeah, and it’s something that definitely as I have personally dealt with this issue in decisions I’ve made and thinking about it. It’s something that requires some perspective. So I think a lot of times, it is very, very helpful and why I wanna talk about it today to have someone who is older tell you that. Because a lot of times, especially when we’re young, we’re so caught up in the moment of what we’re doing, that everything is crazy. If we fail a final, it’s the end of the world. Everything like that means so much when you’re in school, that sometimes it helps to have that perspective that this is the time when you have the least risk, even when you feel like everything is on the line.

PETE: Now, there’s a lot going on there too, because a lot of this has to do with instant gratification. They’re like getting that feedback, that the decision you made, the right decision, and you’ll know this because there’ll be markers along the way, that pat you on the back, and say good job. And that’s just, that’s not reality, like a great decision can result in a horrific three years.

ALEX: Absolutely, and sometimes, what could be a good decision, wont be approved by people that you would regularly think that would have the right frame of mind. And maybe that is your parents, or the people at your school telling you to do this certain thing or take this certain job. Sometimes it won’t feel right at first, but this is where, and it’s a very long journey, but it’s self-awareness and kind of knowing and realizing what you want, and allowing yourself to kind of go for it.

PETE: Now, and the courage involved with this is a little different than people think, and this is how I would think about that. So this is weird, call it mystic, or magical, or whatever you want. I always feel like if you’re good at, do what you wanna do, or if you get to live your passion. You owe it to yourself and to the world to actually try your hardest.

ALEX: Absolutely.

PETE: It sounds really strange but you can’t give half effort. Yes. If you will, you cannot half effort.

ALEX: For lack of a better word that we all know.

PETE: When you take a risk.

ALEX: Yeah.

PETE: Because you think, well, it’s a risk so I’ll hedge. Maybe I won’t go all in. And the reality is, especially from a career perspective, that foot out of the water is the one that gets you in trouble.

ALEX: Yeah, and that also can tear you up in many different ways. That hedging is, one, what’s gonna not allow you to focus, and not maybe be successful where you could have. But it’s also this weird point-of-view, where you’ll feel torn between them. And it’s not even that you won’t be as effective, it’s that you will actually mentally be stuck in the middle. And that’s a very easy way to not be happy with your situation.

PETE: And if you think about what allows you to take risk, well, being young is not enough, right, and being- I got nothing to lose. Well, maybe you have nothing to lose, but what allows you to take risk is that you haven’t put yourself in a jam with student loans, with student credit cards. You graduate and you buy a new car means the dumbest thing you can possibly do because then you’ve got obligations that you do have something to risk.

ALEX: Right, and that’s maybe the point of this podcast is we’ve been trying to give these actionable tips with finances, and making sure you’re gonna get stages of student loans, knowing how to handle it. Maybe the goal of this is for these tips to allow you to be in a position to take the risk you want to take when you graduate from school. Being in a good financial place is great, in general, it’s something everyone deals with. But the higher level thinking of it is so that you can take those risks you want to take and do the things you want to do.

PETE: Every student loan refunded check that you get in the mail just after the start of the semester that you don’t turn back in, put you in a position in which you cannot take risks. Because if you’re taking out more student loans than you need to, then you are putting yourself into a position where you may have to take a job that you do not wanna take because you have obligations.

ALEX: Right, and guess what? If you have this thing you’re really passionate about and you want to do, that is an automatic hedge that’s created whether you like it or not. You have to be one foot in, one foot out, because you’re spending all of the time on that obligation.

PETE: Let’s see how much you’ve learned here, all right? What are the two economic resources that exist for everyone? Please, get this right.

ALEX: Time and money.

PETE: Time and money, my buddy, time and money. So when you’re in your 20s and you talk about risk, naturally, everyone goes to well, it’s a financial risk. You’re leveraging how much time you have in order to take that financial risk. So again, convenience, let’s talk about this from a reverse perspective. Convenience is when you turn in money to buy time. You’re hungry on the way home from class, and instead of just going back to your place and making a sandwich, you stop and buy a sandwich. That’s exchanging money for time, right? In this scenario, how we use those resources, what we’re saying is, I have all the time in the world. I’m in my early 20’s now, and I’m going to use that and forego economic opportunity in the short term, and really take advantage of the other resource which is time.

ALEX: Yeah, and time, especially as you grow older. You can attest to this, Pete.

PETE: How am I the old guy?


ALEX: As you grow older, it becomes more and more important which is why in all these worlds, this is a little bit aside. All these different companies that are getting huge right now. The Ubers, fast food in general, it’s about giving people back time in their business. And people care about it so much especially as you start to realize that you don’t have as much time, and that’s why that financial risk to take advantage of the time is important especially when you’re young, because that is the time to take that risk. That is the point in what you need to do.

PETE: All right, let’s have a very transparent, honest conversation about you and me in this regard about time. Okay, right. So look at your life now, by the way, you worked a ton. I mean, you’re putting in 50-ish hours a week maybe?

ALEX: At least, yeah, on average. At least? But a lot of people would say, that’s not a ton, let’s be perfectly honest.

PETE: No, but I am biased. I think it’s about the right amount for someone in your position. You don’t wanna get burnout early. You’ve also already learned what is busy work and what is real work.

ALEX: Yeah, very true.

PETE: Those are fun lessons, right? Yeah. So I would say, arguably, your 50 hours if that’s what we’re going with, they’re all pretty legit hours, right? Now, look at my time. Now, we talk about who doesn’t have time? I sleep on airplanes so I can have sleep for that 24-hour period, right? And so it’s like, for me, I don’t have the luxury of leveraging time. You have all the time in the world to leverage from a relative perspective, you all have 168 hours a week. So from that perspective, your original assertion here is exactly right. You have more ability to take risk from a time perspective than I ever could at this point in my life.

ALEX: Yeah, and especially from the responsibility level. Not even the busyness, and the schedule in terms of business and work, but outside of that in people’s personal lives, and it gets worse. Once you graduate from college, you realize this. Is that, as you are young and you get older, you continually grow in responsibility. It never goes backwards. You will never be as free with your responsibilities and your time as you are now. And I think that’s something that has to be considered and probably taken advantage of.

PETE: Well, not to terrify you. By the way, it’s not jaded, but I love the real perspective that, that’s how it is. You just continuously discover how it works.

ALEX: Yeah.

PETE: How about this? I think back to when I was say, 24, right? I think back to when I was 24, and my idea of hard work then compared to now is ridiculous.

ALEX: Totally.

PETE: And if that changes going for the same amount of time into my 40s, I’m terrified.

ALEX: Yeah.

PETE: Because that means what I’m doing now, which basically feels like it’s killing me, is nothing, like that’s awful.

ALEX: It’s really weird. And I think, yeah, I mean that’s crazy from your perspective cuz I know your schedule, and it’s insanity right now with all the travel and everything. But also it’s wondering how that will change, and if priorities change and all these factors and all that, it may be for a kid listening to this your priorities will change.

PETE: Yeah.

ALEX: But you’re not gonna figure out these things unless you go out, and you do things, and experience. So I guess where this is all leading back for it with me is what do you do if, let’s just say for job specifically. If you have a nice, safe job that people approve of, or you have something that’s more risky that you can attempt to do. Whether it’s starting your own business, working for a startup, a small business, or completely not business related. If you’re someone who wants to pursue photography instead, something completely off the rails from what you are doing. The fact of thinking that’s a huge risk right now, and I guess this is us trying to give you the perspective that if you’re going to do it, now is the time.

PETE: I 100% agree with that. But what prevents you from making a rational decision there, is getting yourself in a financial jam.

ALEX: Absolutely.

PETE: And I will say it, and I’ve said it to parents I speak to all the time. When a student graduates with student loans debt, their ability to take their risks that they should be able to take diminishes. And that’s the problem, so this is why we’re talking about this on our financial podcast, because the decisions you make as a sophomore and junior in college, not only academically, but financially. Your work over the summer, what that funds. Whether you go on Spring break or not.

ALEX: Huge difference.

PETE: I mean Spring break is not a risk as much as it is a free moment. You’ve compared your Europe post-graduation trip. That is, to some degree, a risk cuz you’re going out to do something. That’s not Spring break.

ALEX: I would heavily say too that I did not go on Spring breaks, because I saved that money for my trip, which is a very different type of trip. And I think that’s the whole point definitely that we’ve been leading back to, is people really struggle in college with thinking that money is important. And it’s a bland topic, and people don’t wanna discuss it. They don’t wanna worry about it, it’s okay to be broke. But this is what we’re trying to get you to realize, is that if you take advantage of this now, and realize why it’s important, and make the right steps. That is what’s going to allow you to have fun, and do what you want, and take the risks that you want to when you graduate. There is a purpose there.

PETE: I always think of, from athletics in college. You and I both played college athletics. You train, you run, you get in shape, so that you can actually enjoy what you’re doing, because your fitness levels are at a level well then you can just perform. Whereas, if you were worrying about your fitness when you’re trying to perform, you’re in trouble and it’s an awful experience. It’s not that different from what we are talking about with, if your finances are in order and then it’s time to take risks, you’re solid. If they’re not, you gotta take a risk, it is the least enjoyable thing you will ever do.

ALEX: Absolutely, and it’s gonna take away even from that risk you’re trying to make, so I think that is the big takeaway from this discussion. And we covered a lot of different places and topics, but I really feel strongly that it was worth taking an episode out to discuss some of the higher level topics behind money. And why we are trying to help you out with this and teach this, is because it is important. And you want to be able to do the things you want to do. It sounds very cliche, but handling this now and getting yourself in a good position near the end of college is the way to make sure you can do that. So thank you for listening. I really hope this was helpful to provide some perspective for you, and why this is so important. If you want to be on a MoneySmarts U podcast, and maybe you have some goals you wanna do, these risks you wanna take, we can chat with you about how to get there, and how to take those risks in the right way. Feel free to go to the MoneySmarts website, Fill in the application and we’ll reach out. We’ll schedule a time, we’ll get you on the show. Or if you just have a question, feel free to reach out. Even on Twitter, we’ve got @petetheplanner on Twitter. I am @eatongood, E-A-T-O-N good. Feel free to each out with a question, even if you don’t wanna be on the show. You have a question, maybe a one-off question that wants to be answered, please reach out. We are here for this specific purpose. So until next week, thank you very much for listening. This has been the MoneySmartsU podcast for Pete the Planner, I’m Alex Eaton. We’ll see you next time.

PETE: Bye, bye.