Investing Versus Your Career
I was reading the March issue of Smart Money this past weekend and saw the following quote from Editor Fleming Meeks:
Our annual investment returns are seldom as great as our annual salary, yet too many of us spend more time trying to find the right mutual fund than the right personal trainer, who can help us ensure that our earning power won't be compromised by ill health.
The author mentions protecting your earning power against bad health because he was just diagnosed with Type 2 diabetes. But he brings up a great point overall. How many people spend hours talking about investing, reading about investing, writing about investing (on blogs, etc.), studying investing, and on and on yet spend very little, if any, effort on managing and developing their careers? The answer, unfortunately, is most people.
Yet your career holds so much more promise -- at least financially.
Think about it this way: If you spend hours and hours to improve your investment performance by a few percentage points or instead spend those hours developing yourself, getting extra education, reading to improve your work skills, or whatever it may be to make you a better employee/manager/executive, which do you think will have more impact on your net worth?
This is another reason I focus many of my investments on index funds. They perform well on a total return basis (partially because their costs are so low) and take a minimum amount of time. That gives me plenty of extra time to develop myself into the best manager I can be.
If you want some more thoughts on how to better manage your career, see these links:











As your nest egg grows, the payoff of improving your investment ability is greatly increased. But for the young up-start just getting going with their career, I think that advice is spot on. Get your income UP! NOW learn how to invest it. (With the caveat that if you're always focused on earning and not investing, you're losing precious time).
Posted by: Jesse | February 14, 2006 at 10:57 AM
I'll have to agree with Jesse. We met with a financial advisor last night and realized we have lost some precious investment time. We've been so busy trying to pay off our debt, including our mortgage, that we haven't spent much on investing. Should have made it more of a balance!
Posted by: Shannon | February 14, 2006 at 12:17 PM
I'm not saying that you shouldn't spend time on investments. I am saying that you SHOULD spend time working on/developing your career. Most people spend a ton of time on the former and neglect the latter.
Posted by: FMF | February 14, 2006 at 12:22 PM
Hmmm. A penny saved is a penny earned. A penny invested is 2 pennies earned. That's my motto.
I find most people focus on getting that next job with a 10% higher pay raise, and don't spend enough time on investing and accumulating assets.
Then their pay raises get eaten up by higher tax brackets, eating out excessively because they are too tired to cook, buying a work wardrobe, commuting costs, relocation costs that are not fully reimbursed, expensive lattes on their way to work, expensive gadgets to make us more "productive", and all the other ways our money is frittered away when we don't take it seriously enough to try to build up assets.
Balance is the key.
Posted by: Anita Campbell | February 20, 2006 at 03:48 PM
Do people really spend that much time learning about investing? I don't think so. I know I spend a lot of time, but most people I know are clueless about the very basics of investing...and that includes a fairly high percentage of college graduates.
Posted by: mysticaltyger | February 14, 2007 at 10:58 PM
The trouble is that it's hard to break down the time investment in looking to better one's career the way one can break down the time investment in bettering one's portfolio. You can research investment vehicles at any hour of the day or night, and spend any amount of time that's available on it...and when you have to put that down and do something else, the project will wait patiently for you to return. But finding a better job involves coping with prospective employers on THEIR timetable, not yours. Which is not to say that it isn't an important thing to do, but it's not a free substitute for working on improving investment returns.
Of course, the best way to maximize your career is to quit the W2 rat-race and start your own business...but a lot of employees don't know how to do that in a way that yields more income than working does.
Posted by: Matt | February 15, 2007 at 03:17 AM