Career is the most critical aspect of personal finance


Recently, I’ve revisited my financial decisions since I graduated from college in the fall of 2011. You know what I found? Having a permanent, decent-paying job actually contributes the most to my assets and financial future. With money in my bank accounts and a stable income stream, I have been approved for good credit cards to build my credit history. The money I’ve saved has been put into my brokerage account so that I can learn how to invest. I’m 24, and I know there are a lot of things to be learned and a lot of money to be earned in the future, but I think I have a decent start, to which my income contributed significantly.

My post on investment returns: demonstrates how important it is to start investing early, and likewise implies how important it is to star your career early. The earlier you start making money the richer you’ll be at retirement, or whatever stage in life you are, ceteris paribus.

More importantly, the more dedicated you are to your job and the better you become at it, the higher salary you will get down the road, and you’d be hard pressed to find a faster, safer way to make money in the long run. And that is why my focus recently has switched to my career.

My job as an actuarial analyst earns me salary raises and bonuses as I pass my actuarial exams. Failing an exam, though it is not the end of the world, will force me to re-take the exam, which is a huge waste of time. The loss of bonuses and deferral of salary raises is not nearly as significant as the money I could’ve made for the hours spent on studying for these notoriously difficult exams. The standard amount of time to spend on an exam to pass it one first try is 300 hours; if I fail the first time I’ll have to put in at least 150 hours for the next try if I really want to pass. 150 hours at minimum wage is worth more than 1k, but the cost to my youth is a big multiple of that. I value my 150 hours at 3k at least. So by really focusing on my exam right now, I will “earn” $3,000. What!!!

My exam is on May 9th, and from now until then I am willing to have no life at all. You may have noticed a slowdown in new entries for the blog, but once I leave May 9th, 2013 behind I will come back at full power. With me luck!


Richard (Hiep Tran)

2 thoughts on “Career is the most critical aspect of personal finance

  1. Career is indeed one of the basic things that shape your finances. A good job with handsome salary will any day help you plan your finances better than a job with less salary. It helps one strengthen the credit score which is obviously one of the best records to have.

  2. Hi Richard
    What I have found is that a full time job paying a decent salary is step one but then I got a small part time position and that has made all of the difference as I now save 20% of my main salary and 100% of my part time salary. The cash is building up much quicker than I thought it would so my advice would be (if you can find a 2nd job) is to try and supplement your main income.

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