Thursday, September 26, 2013

Managing Future Income Risk

The choices people make often affect them in the future.  My father is a structural engineer and my mother is an architect, so when I first entered college I decided I wanted to also become an engineer.  So I decided to go for a computer engineering major in college and completed my foundation courses in math and science during the first three semesters here at the University.  However, once I dived into the technical core subjects of computer engineering, I realized that this major was not for me.  At first I was quite upset at myself as I believed I had wasted three semesters learning material I would never use since I was deciding to change majors.  However, I later learned I could use those math and science foundation courses as supporting coursework in economics.

Now as an economics major, there are many directions that my life can take in regards to finding a job.  Unfortunately, I have not planned anything in particular which is a huge risk in terms of income.  If I am unable to find a job I may not have a stable income stream making me unable to pay off the student loans that I am utilizing to fund my university experience.  Thus, there are many ways I can minimize this risk of not having a stable income stream after graduation.  One attempt would be to improve my grade point average.  Employers tend to look at the grade point average when hiring graduates and those graduates who do not meet the designated cutoff grade point average may be subject to an immediate rejection in terms of getting the job.

Furthermore, I could minimize my risk by attending career fairs and using the many resources that the campus career center has to offer.  Unfortunately, I have not attended any career fairs and have had no internships. I know this is a critical problem that needs attention and I believe that if I do not address this issue quickly I will have difficulties near graduation time .  This is because employers want to see that potential applicants have some sort of work experience and If I try to apply for a job after graduation I could be at a serious disadvantage for having no work experience.

In fact this was a serious problem for my friend Jim.  Jim graduated from the University in May with a double major in Economics and Statistics and had trouble acquiring a job after graduation as he had no work experience.  At first he was able to land an interview for an underwriting job, but he was not given the job.  Ultimately, it took him four months to get a job in an options trading company after graduation and he told me that work life is terrible.  The way he explained his job terrified me.  Essentially he told me that his job runs from 8 to 5 but his commute is one hour each way leaving him too tired to do anything when he gets home.  Furthermore, his job has a highly stressful work environment and people in the company are constantly getting yelled at.  Basically Jim explained that work is like constantly doing a project and that in college getting a B on a project is not ideal but acceptable; however, getting a "B" on a project in the company is completely unacceptable as the company in the situation is an options company, so for example, creating and using incorrect data models can lead to catastrophic monetary losses.

 Finally, Jim told me that staying in school for as long as possible is better than working as life does not get better!  This is quite interesting to me and even relates to managing future income risk.  I could complete my undergraduate work at the University in two years, but be unprepared for what I want to do in the future or could continue my education doing graduate work while giving me more time to figure out what I am doing.  The latter option could ease future income risk by allowing me to have more time to get more work experience and knowledge about a particular area of interest while strengthening my resume.  Of course this will require greater inputs in terms of time and money to stay in school.



3 comments:

  1. Yours is a thoughtful post. I believe this is the reality for many recent grads because the economy has not rebounded fully. It would be far easier to find a job right out of college if the unemployment rate was one per cent lower.

    I believe the issue of switching majors is on the one hand healthy, as it begins to show that you are learning about yourself and your inclinations, and on the other hand it is stressful, as you indicated. Did you waste time and money with the first major? I too went through a trajectory something like what you went through, with the difference that tuition was lower then and my parents paid it, so I didn't incur the loans. That can impact what you do next.

    Jim's story is indeed frightening but i suspect there are other stories that are much happier about work after school. It is a mistake to generalize from only one experience, but it can open your eyes as to wanting to find out what is really happening out there and then to better understand where you fit into the picture.

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  2. What made you switch into economics over other fields, especially other engineering fields where the science and math courses would probably still meet requirements. On the other hand, switching three semesters in still gives you a lot of room to get classes in, especially with the way the Economics major is set up. Are you still planning to graduate on time?

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  3. I did waste time and money in my first major, but as pointed out I learned more about myself. Ultimately, I do plan on graduating on time as I had credits going into college. I decided to switch to economics over other engineering fields as I just did not enjoy engineering in general and had more of an interest in economics over other majors.

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