6 Things I wish I knew earlier when it comes to career and money
Here are six things I wish I knew earlier when it comes to choosing a career that pays well:
1- High salaries won’t make you rich
Sam Altman said it better than I ever could:
The biggest economic misunderstanding of my childhood was that people got rich from high salaries. Though there are some exceptions — entertainers for example — almost no one in the history of the Forbes list has gotten there with a salary.
You get truly rich by owning things that increase rapidly in value.
This can be a piece of business, real estate, natural resource, intellectual property or other similar things.
Choosing a career that pays well is great, but if you want to be wealthy, what you really need to do is to own things that increase in value.
2- One of the best ways to own things that increase in value is to make them yourself
That’s why I love programmers so much. They can literally sit down and with a few lines of code, create something valuable (an app, website, etc.). Authors, real estate developers, carpenters, movie producers, etc. can create assets that can increase in value and that they can own if they negotiate well. I’m not saying it’s easy, but when people from these careers succeed, they are usually much better off financially. Prioritize careers where you can actually build, create stuff that people want.
3- Your industry is hugely important. Choose it wisely
The industry you are in is similar to an elevator. Some elevators go up, some go down, and some don’t move at all. You can work hard and be the best at what you do, but if you are in a saturated or declining industry, you’re not going to do very well.
Ideally, you want to be in a new or a growth industry (not a very mature or a declining one). Those industries are the ones that will give you the most opportunities and will carry you even if you are not the most talented person.
4- Speaking of industries, avoid undifferentiated commodity businesses
A commodity business is when your product is easily interchangeable or substituted by the competition. The problem with those kind of businesses is that companies start competing on prices. And when that happens, they need to squeeze every efficiency out of you, the employee. You’ll most likely have to work more and more for a rather insignificant increase in salary.
5- To be compensated adequately, you need measurement and leverage
To get rich you need to get yourself in a situation with two things, measurement and leverage. You need to be in a position where your performance can be measured, or there is no way to get paid more by doing more. And you have to have leverage, in the sense that the decisions you make have a big effect. — Paul Graham
Unfortunately, for a lot of roles in a big company, it’s pretty hard to measure the value of your work because it’s tangled together with the work of so many other people, and you usually don’t get to have a say in any major decision until you are pretty high up.
The only exceptions seem to be salespeople and people in top-management roles. They can easily tell how much revenue they brought in in terms of sales, or how much revenues/profit the team they lead generated. And they do have leverage in the sense that their performance can make or break the company’s results.
Think of measurement and leverage when you’re trying to decide on a job that pays well.
6- Get good at selling
All great careers, to some degree, become sales jobs. You have to evangelize your plans to customers, prospective employees, the press, investors, etc. This requires an inspiring vision, strong communication skills, some degree of charisma, and evidence of execution ability. — Sam Altman
Especially for the best paying jobs, there is a big component of selling. At the beginning of your career, it’s easy to get bottled down to the technicalities of your day to day tasks. But if you want to make a lot of money, you should never lose sight that you need to become a good seller, and start developing that skill as soon as possible.
This article concludes our series on deciding what work to focus on. As a summary, when deciding on what to work on, try to find something that matches your interests, your strengths and which is in a growing market. You want the three to match:
- if you only follow your passion, but it’s for a skill you are not very good at and it can’t make much money, it won’t really be sustainable
- if you only follow what you can do based on what you have knowledge and abilities in, for example what you have studied at school, but it’s not something you are interested in and it cannot make money, it’s not really helpful
- if you decide on a career based on those « what’s hot » reports that project a massive growth in a certain domain, but you’re not good at it and it’s not in something you’re interested in, it’s not gonna go very far
Don’t settle to what you decided to major in when you were 17 years old. Or what you happen to have experience/expertise in if it’s not fun to you. Those are definitely good first steps, but I think it’s possible to find something that matches all those three questions for all of us.
