Calculating Risk vs. Investment With Your Life Choices

There is a big difference in sacrificing for something with a near guarantee of return versus taking a big risk and reaping the rewards.   In the first case you are almost always just paying your dues into a system and in the second case nobody knows if it’ll work out.  I’ve recently had a few different people in my life who had to make this decision, the decision to invest in something akin to a sure thing to get where they wanted to be in life.   One chose to do what needed to be done the other didn’t.  One was generally happy and one wasn’t.   Do you want to guess who was happy and who wasn’t?

Before I get into the story of these two folks, I want to make it a point that I’m not talking about risk taking.   You see investing with risk nearly everywhere.  All you have to do is pay attention to the business pages and you’ll see how big companies are investing in new technologies.  There is absolutely no guarantee of return in many of these investments.  It’s not just big business, it can happen on an individual level as well.    I have a family member who did quite well for himself.  He was the quintessential career risk taker and very much followed a financially offensive strategy.  He lived for that lifestyle and at one point in his career got lucky in that he had negotiated a small piece of a small company as his compensation.  The company went public.  That set him up well for being flexible to take on greater risk, and consequently, greater reward.  For the last hurrah in his career he bought a small company he intends to grow and I’m sure his goal is to take it public or sell it off.  I hope I’m in the will.  This type of investment seems similar to what i’m talking about in this commentary but very different in that there is no guarantee that you will succeed.   Today I’m discussing investment and sacrifice that pretty much gets you what you want in life, or at least where it impacts work and life.  

The key about investment or sacrifice in a sure thing to get what you want is that you have to be willing to pay the price.  I know a guy, let’s call him Harry who, in his late 30’s, went back to school.  He had spent the majority of his career in the military, working construction jobs, and for cities in their utilities department. He’s a big burly guy with a full beard that’s slightly greying.  He was a rough outdoor kinda guy doing rough outdoor work and it was starting to wear him out physically.   Harry also had started working himself up the organizational chain and realized he didn’t have the right personality to be a manager over utility crews.  He could easily see the writing on the wall and decided that a career in high tech would both suit him better and be more financially rewarding.  He saved up and took a couple of years off from working to go back to school.  Not only did Harry go to school, he was naturally inquisitive.  He did all of his work, and then some additional experimentation after hours to just play around with the tech he was learning.   Harry was even critical of his teachers for not pushing him hard enough.  There is no question in my mind he’s going to get a tech oriented desk job that’s easier on both his body and has a greater positive impact on his wallet.  

Harry’s story is unique in that he’s single with no kids. As he did not take out a huge pile of student loans he had to save quite a bit and live very frugally to get through the two years of school.  He did it all without a life partner to support him.  This is a guy who paid his dues.  There is a slim chance that he won’t land his target job, but from what I know of the job market for his technical skills he should do just fine.  With his personality he’ll probably double the income he was making when he was in charge of the large utility department and do it with half the stress.   

One of the challenges with making the investment is knowing if you are making the right investment.  My own personal story has to do with getting my master’s degree. When you talk to the recruiting folks at the university they give you a litany of job opportunities you will have with the new degree. This happens with every program at every college. It is incumbent upon the person about to make the educational investment to learn the reality of the opportunities the degree will provide.  To be clear, I’ve never actually seen someone completely lie from a university.  What they always do is give you the best case scenario after you have invested in the degree and some time on the job. There’s never any hard statistical evidence as to what percentage of people are at what income level or holding what job at various periods of time after the attainment of the degree.  This is one of the reasons that I have mused why we have a student loan crisis.  The promises are valid, it’s the return on that investment over time that is sort of obfuscated.  When you look at my own personal case, I thought I’d get a master’s degree and then be able to teach at a community college. My assumption for the teaching gig was a full time job. I did get a full-time job at a community college but it wasn’t teaching, it was more aligned to my business background. What I didn’t realize at the time of my decision making is that the  majority of educators at community colleges are adjuncts.  I’m not exaggerating when I say the majority. It’s typically over 50% of teachers at community colleges are only teaching part time.  You have to put in years as an adjunct to get yourself in line for a full-time position.  These full time positions are incredibly rare and hard to get.  Still, if you look at my journey, I worked evenings and weekends for years to get the degree. Then I worked for years in the system both as an non-instructional employee in the environment and as an adjunct instructor. It was only after several years did I start getting interviews for the full-time teaching positions.  It took a few more years after that before I landed one. If I had known that this was the journey I would have to go through when I first made the decision to make the educational commitment, I’m not so sure I would have spent the time getting the degree.

Sometimes it’s hard to pay the price.  I had a conversation with a very close friend of mine.  We’ll call her Leanne.  I was sitting and having a drink with Leanne and she was complaining that the whole world has off except her and she has to work long hours.  She also lamented that she is expected to be on call informally when she takes her leave.   Leanne’s point of reference was from the fact that all of her friends are teachers.  Consequently she was looking at the world through the rose colored glasses of a government benefits package which included lower wages but more time off.  In the case of her teacher friends it’s a lot more time off but a lot lower wages relative to the educational attainment level needed for their jobs.  Going back to Leanne, she has a normal job.  She works in Corporate America and has your typical corporate benefits package.  This means limited time off and a use it or lose it leave policy.  The culture at her employer also includes a pretty standard private sector work ethic.   The norm at the company is to work long hours getting in early and leaving late.  As an example, the day before the Christmas break her company did not let anyone go home a few hours early.  She didn’t have PTO that grew with her tenure or was banked if she didn’t use it. She didn’t have summers off like all of her teacher friends. As my very close friend she felt that she had the right to be annoyed with me because I, in my new teacher job and like her other friends, had so much flexibility with my time and she didn’t.  I of course pointed out that I had put in my time to get the time. I made the investment for what I thought was a sound return.  I wanted a job I could enjoy that afforded me flexibility to do the other crazy stuff in my life I like to do like blogging and producing podcasts.  (Editor’s note, please subscribe and write a review)

Being the good friend that I am, and truly meaning what I said, I offered to help her achieve the same thing. I offered to help her find a program that would get her the teaching certificate.  My assumption was if we targeted something like special ed where there’s always a huge need, then it’s probably a safe bet she’d quickly get a job that met her wants. Considering my own personal story, I would still probably talk to a bunch of hiring principals just to make sure that’s the case.  I talked to her about potentially selling her house and moving someplace less expensive so the financial burden of the transition would be lessessened. I offered to watch her kids so she could study in the evenings and on the weekends.  In effect, I would help make it possible for her to make the big investment over the next few years in time and money to get to the position in life that she wanted.  This is where things got a little strange and where I was motivated to write this article. She didn’t want to make the investment.  She didn’t like the idea of going to school, or back to school as the case might be.  She didn’t want to give up evenings and weekends to study. None of it was appealing to her. She didn’t even want the teaching job that would have granted her all the time. She just wanted the time.  

If you want time off with stable income, the only way I know to get it with any guarantee of employment in the profession is as a teacher.  If you want to be a teacher, you need a gatekeeper credential known as a teaching license. If you don’t have it, you have to go through the process to get one which includes schooling.  If you are a mom with kids at home and responsibilities that require a full-time job then you have to give up time with the kids and on the weekends to make the transition happen. I see this more as paying the price for a guaranteed investment versus taking on a big risk with no guarantee of return.  If your not willing to do all this, then why complain? I keep thinking of that age-old adage of wanting to have your cake and eat it too.  She wasn’t even willing to take baby steps, for example, just taking one class a semester.  It takes you two or three times as long, but you would eventually get there.  That’s how I did it. Admittedly my tactic wasn’t about the lessened impact of the education on my free time, I just wanted to cash flow my education.  

She does have other options.  One alternative is a school related job that doesn’t require much in the way of educational investment. Here in North Carolina the teaching assistant / school bus driver job only requires a simple CDL license.  Day-to-day the hours are a little bit longer but you get the weekends and holidays off that the school calendar provides for. The biggest negative of this job, aside from having to be up so early, is that the pay is in the toilet.  I want to say it’s in the upper twenties or lower 30s a year range.  Other non-school options are part-time jobs.  There’s less regularity in the schedule when you’re doing two or three part-time jobs, but you do have more flexibility with your life.  Unfortunately, these options generally come with very low salaries as well.  All that being said, if she really didn’t want to go to school and still enjoy the benefits of more free time she could always cut her life to the bone. I know she has enough equity in her place to go buy a trailer somewhere and live there rent-free.  She doesn’t want to do that either.  In her defense most people don’t want to give up the lifestyle they’ve become accustomed to.

She’s not single, she has a boyfriend.  Even if they were married I doubt he would encourage her to quit and just stay home.  He’s not wealthy.  I guess she could always go out and find a guy with a lot of money who wants her to be a stay-at-home mom.   I doubt that will happen as it’s not her style  to leave her boyfriend for a different guy to get what she wants financially.  

In all these ways she could pay what she needs to pay, one way or another, to get the thing she wants.  Since she’s not willing to do that I don’t know how to counsel her.  Leanne is a tough case and her story is  more than a narrative about investment for the long term to get to her own version of a perfect work and life balance.  This is a commentary contemplating how one should deal with paying the price.  The biggest question is: Does it do you any good to be upset about something if your not willing to try to change it?  I feel for Leanne but I have to admit she helped me more than I could help her.   Whenever I’m upset about something in my life I’ll think of her and remember that it’s on me to make the investment and complaining won’t do a damn bit of good.  I say it, but that’s not entirely correct.  It definitely makes for interesting drinking conversation.

Posted by Mike Peluso

Mike Peluso writes about the collision between between the business / professional world and life. He also writes about the journey involved with the Peluso Presents efforts including the Blog, Books, and Podcast so that others may benefit from his efforts. From Mike: I spend hundreds of hours working on these articles every year with no compensation other than support I get through donations. You can support with a tip and by Subscribing to the Podcast (and writing a review on iTunes would be really appreciated as well!) One time tips:

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