Musings on Lucrative Traditional (and Untraditional) Jobs

Shifting gears now, I will now raise some recent examples of lucrative traditional jobs and how eye-popping their pay can be. Yes, I’ll be using some real world numbers here.

  1. Uber drivers: This article show the reality of how workers from all over rush to SF to earn the Bay Area premium (as a freelance taxi driver) which comes out to about $7 per 12 minutes, before expenses, which is much more than what someone unskilled can make in the Central Valley or Sacramento. What is striking is that they can make as much as $1500 per day, as the article states, though it’s work working hard and being opportunistic in monitoring for surge pricing. At the same time, they need to keep their expenses low by
  2. Temp workers: Don’t think of these guys as just lowly paid undocumented immigrants. Some of the most lucrative positions out there can be found by filling in as short-term workers, especially if you have specialized skills. But there are some out there that don’t neen need skills, just willingess to work in “undesirable” areas. Examples of this include a friend of a friend who went to Alaska to work in the canneries as a regular laborer. Hours were long and the environment was unforgiving (if pristine). He worked hard (16 hour days and a dangerous line of work) but took home $50,000 in 3 months. My book has other examples of geographic arbitrage opportunities like this. I’ll keep an eye out for more “gold rush boom” opportunities that arise and let you know on this blog.
  3. Nurses: You can get one of these degrees after just 2 years at a community college, so it’s an insanely accessible career path. You need to learn some protocols and get some practice, but at the end of the day it doesn’t involve deep cognitive processing. Things also get easier with practice and longevity, making life and work easier with time. There’s also great career stability and a nationwide shortage. Oh, and the schedule (3 shifts per week) can’t be beat. Just today I learned that the pay starts at about $60-70 per hour and you can get 2.5x base pay for working “unseasonable hours” like weekends, holidays, nights, and as emergency call up.
  4. Corrections officers: Thanks to unions, the prison system in California is generously funded. Despite a declining prison population, you can get a very generous pay and pension package in corrections. The promotional website boasts six figure salaries starting out (after accounting for overtime and vacation/night pay), with a monthly stipend during your cadet training years. There’s even a controversial article on WSJ about whether being a prison guard is better than getting a degree from Harvard. Sure, if you go to work right away and keep your job without getting laid off. My perspective is that a Harvard degree gives you more flexibility and opens doors to more types of jobs, including more interesting and cognitive based ones that are more resistant to automation and outsourcing.

Business Principle – Make Lives Easier, Simpler

Sometimes on here I’ll post interesting business ideas I have, right down to the specifics. At other times I’ll speak more on general principles guiding a successful business.

Let’s start by identifying a need. One thing I’ve always needed since I was young is a way to save interesting articles online for posterity and re-reading later on. I was a big reader and when news and blogs emerged online, I wanted to save things before they got deleted or moved behind a paywall. In other words, I was practicing something similar to scrapbooking, which was a great childhood hobby for many people in the previous generation.

Now for someone who is technical, it’s easy for me to save documents as html files or print via chrome as a pdf, create a series of folders, and organize things the way I like. It’s so quick and easy for me that it’s hard to fathom that the same is not intuitive for people who are not so technical. This represents a larger global need but not a personal need, and it’s hard to be a successful visionary creating something that you personally don’t need.

In this example, someone can start a company letting people easily pin photos or essays or articles onto their own free personable shareable scrapbook. It’s called pinterest.

The principle here is to meet a need (especially old hobbies in a changing world) and to make life easier and more convenient for all involved, but especially the non-experts.

What would be something analogous yet uninvented? In my own field of health care, there’s a need for the medically illiterate to help them manage their medicines. What about a personal pill tracker that synchronizes with your medical chart at the doctor’s office and give you timely reminders to take your medicines on your phone, as well as information about why you’re taking a certain medication and side effects or precautions to watch out for? Google is already attempting something with its own Google Health initiative, which syncs nicely with its Android devices.


The Superstar Effect

From this:

the entire gain in the U.S. stock market since 1926 is attributable to the best-performing four percent of listed stocks.

It’s stating nothing more than what we know. If only a few “superstar” stocks drive the majority of earning (and some like ADP and Altria spin off many other successful companies), it’s all the more reason to diversify. If we just pick a few stocks, what are the chances we’ll have a proportional amount of those mega winner 4% stocks? Not good, despite how great a stock picker you think you are. Just look at my thought experiment for details. After all, if Harvard’s endowment could hire the best and brightest and still underperform the market, despite their pedigree and venture into “alternative investments”, how well can you as an individual do?

In other news, there is a similar superstar effect in the labour market.

The recent fall of labor’s share of GDP in numerous countries is well-documented, but its causes are poorly understood. We sketch a “superstar firm” model where industries are increasingly characterized by “winner take most” competition, leading a small number of highly profitable (and low labor share) firms to command growing market share.

The winners are disruptive because they are more efficient, able to do more with fewer workers. This is not much solace to those displaced as a result of old firms going under.

To survive in this world, we need to learn the skills of superstars. Stay in the few remaining jobs that remain, save and invest like crazy, and start our own businesses. That’s the key to success. My book is your guide to this.


Your Personal Inflation Rate May Vary

Inflation? The official figures have total CPI for September (measured year over year) as 2.1%, roughly at the Fed’s preferred target. However, for individuals, each household’s perception of true inflation is different, thanks to a different mix of goods and services consumed. As Morningstar wrote: “If consumers rent, use a lot of medical care, and use a lot of energy, inflation could look pretty nasty, as much as 4% or 5%. If someone uses a lot of food, buys a lot of apparel, uses a lot of imported goods, and owns their own home, their inflation rate could be closer to 1%. So one-size inflation rates aren’t always very helpful or descriptive on an individual level.”

Here’s the accompanying graph:

As you can see, inflation rates on goods are generally low. To avoid being hit by high inflation, we should seek to limit our spending in the categories of energy, housing, medical care, and transportation (closely linked to energy).

My book on wealth has many tips on how to save in each of these areas. Some highlights include:

  • Live close to where you work to minimize the commute
  • Consider biking or walking to work
  • Stick to being a one car household, with that one car being a cheap used one
  • Bundle up with more layers instead of turning up the heat
  • Buy a house you can afford, move, or shack up with roommates
  • Stay healthy and practice good habits to minimize sudden unexpected medical bills

The last one can be hard to do, which is why I’m working on a book on health as a follow-up to my Evidence Based Approach to Wealth. Stay tuned.


Why It’s Easier to Create a Tech Startup

Picture this. You are a new biology PhD, and you have a great idea for a new drug that will cure a disease. It will be revolutionary and improve the life of millions. You will have complete monopoly of the market and you’ll be able to charge astronomical prices. You work hard, spending years of nonstop research, jumping through FDA hoops, and all the time attracting little funding and earning little money for your efforts. Finally your efforts are rewarded and you cash out in stock after twenty long years.

The opposite story is that you are an unemployed tech worker laid off in the 2008 recession. You team up with one of your college roommates to launch a new social media platform or sharing economy app. You attract incredible venture attention, get to siphon off six figures for yourself in income, and even though the product isn’t profitable, you have enough “eyeballs” to get bought out by a big company like Google or Facebook.

This isn’t too far from reality. The first story is roughly that of Gilead Sciences, a pharmaceutical company behind sofosbuvir, a revolutionary treatment for hepatitis C. Though the company was founded way back in 1987, it took them until 1992 to go public, and they only got $86.25 million in IPO proceeds. Many decades of slogging through developing later they finally got to their big moneymaker, only for it to make headlines for being too expensive, gaining FDA and legislator scrutiny.

The second is pretty much any moderately successful tech startup. YouTube probably fits the bill the best, but Uber and Airbnb are comparable as well, both of which are valued in the tens of billions.

It’s a headscratcher. Innovation in biology and medicine is tough. There’s a lot of man hours spend pursuing potential drugs, some of which don’t pan out. And then when you finally do discover something, gain FDA approval, and expect to make a reasonable profit, you are blasted by the media for price gouging. Why would any budding entrepreneur focus on bioscience, when there are faster and cheaper ways to wealth in tech? In contrast, tech is capital-light, valued highly by the market, and doesn’t take much expertise to get going.

Think about it this way. Any unemployed guy in his family’s basement can bust open a coding book, learn how to make apps, and start a company. It takes true skill and deep expertise to do the same in the biosciences. Innovations in biology arguably add more to human happiness and lifespan than a new app that remembers where you parked your car.

One is true innovation, the other is mere banality. But when it comes to making money for the lowest investment, there’s no comparison.


Want to Make Money? Work in Health Care

Marketwatch has an article about the latest U.S. News rankings for various jobs (side note: since when has U.S. News ever seen something that they didn’t want to rank into a list?). Guess what? Health care jobs dominate. Let’s take a look:

  1. Dentist: $152,700
  2. Nurse practitioner: $98,190
  3. Physician assistant: $98,180
  4. Statistician: $80,110
  5. Orthodontist: $187,200
  6. Nurse anesthetist: $157,140
  7. Pediatrician: $170,300
  8. Computer systems analyst: $85,800
  9. Obstetrician and gynecologist: $187,200
  10. Oral and maxillofacial surgeon: $187,200

I’ve highlighted in bold the health-related jobs on there. Wow. That’s a whopping 8/10 on the list! And they all make or come close to 6 digits. In fact, the only two non-health jobs are the lowest in average salary. The secret to easy wealth from a standard job in the U.S. is in the protected fields of health care and state/local government. Read my book on wealth for more details. Mind you, this list neglects other great health care jobs that don’t require a lot of schooling, such as regular registered nurse, physical therapy, and respiratory therapy. Though they don’t make it quite as high on this list due to lower pay, they can be great options if you like a stable job with great security, flexible schedules, and good pay.

What about those of us who heeded the call of STEM? Well, I have a low opinion of straight up science fields. Biologists and chemists have a hard time findings employment due to the surplus of graduates, many of whom had starry-eyed dreams of medical school. Tech is ok, and it makes it onto this list at #8 but doesn’t feature more prominently because of its boom and bust nature. If you’re a programmer and times are good, you can do well at a big company, or you can make it big in an IPO. However, there’s little barrier to entry and you’re always facing competition from H1B workers. When there’s a bust you can be laid off quite easily.

How about other engineering fields? You can generally get good security in nuclear, civil, mechanical, chemical, or petroleum engineering, but those fields are quite niche and there’s not a lot of job opportunities. The schooling is also quite demanding.

I hope you’ve boned up on your math, because the best STEM job on here is #4 at statistician. Statistics is the red headed step child. Not quite as applied as engineering but also not quite as theoretical as pure math. It’s actually the best of the bunch because it’s relevant to so many fields. Whether we’re in research, government, business, think tank, or NGO, chances are there will be need for someone with good understanding of probability and running comparisons for large pools of data. Especially now with the new trend being “big data”, there’s increasing need for someone with the aptitude to sift through that data and find significant correlations.

So if I have a child who doesn’t want to do health care, my next recommendation would be a double degree in statistics and economics. That’s a good mix of versatile fields, one more mathy, and one sorta leaning towards the social sciences, to prepare one for any career. Oh, don’t forget about languages either. Those can be your final oomph to get you over the hump and into a job.


Yellen’s Wisdom

As revealed to University of Baltimore graduates, was essentially what I wrote in my book on wealth. See for yourself:

“Like technological change, globalization has reinforced the shift away from lower-skilled jobs that require less education to higher-skilled jobs that require college and advanced degrees,” she said. “The jobs that globalization creates in the United States, serving a global economy of billions of people, are more likely to be filled by those who, like you, have secured the advantage of higher education.”

In short, in a competitive world, to just tread water, we need to reach a higher level of education and rack up more student loans. No wonder everyone is so stressed.

Even as she acknowledged higher debt levels, Ms. Yellen said the benefits of a college degree outweigh the costs.

“Some of you may be worried about paying off loans you have taken out to pay for your education,” she said. “The good news is that the vast majority of student borrowers who complete their degrees find work that allows them to keep up with their payments and pay off their loans.”

That’s great, as long as you graduate and do so in a field that’s employable. There’s a world of difference in being a chemical engineer vs say an art history major.

Yellen does throw a bone to those being left behind.

“It concerns me, as it should concern all of us, that many are falling behind,” she said. “Improvements in elementary and secondary education can help prepare more people for college and the opportunities college makes available, but for those who do not attend college, we must find other ways to extend economic opportunity to everyone in America.”

The problem is that people are fundamentally lazy and entitled. Those who work hard and hustle do so quietly. They get an education, move to the big cities where the jobs are, and start climbing the ranks. Or they start their own small business. Those who yell a bit louder want more freebies handed to them. Just look at what Trump promised (to bring the old high paying manufacturing jobs back) vs what Clinton promised (to subsidize retraining programs in new areas like nursing and IT). How many old fat miners and truckers with chronic back pain addicted to opioids are willing to go through the rigours of retraining?


Making Out Like a Bandit While Your Startup Burns

That’s what skewered shareholders are accusing of Theranos founder and CEO Elizabeth Holmes of doing.

Funny, this whole thing reminds me of that Futurama episode when Fry is convinced by a snazzy partner to launch a startup with all pizzazz and show and no actual substance. The goal of course is to angle for a buyout/cashout while eventually jilting the investors. This is really what Theranos has done.

Let’s look at the facts behind the situation:

  1. Elizabeth Holmes assembles a prestigious group of people more for their credential and connections than for actual talent and knowledge of the industry
  2. She dresses like and bills herself as the female Steve Jobs, leveraging her Stanford professor and school name
  3. The company says it has a secret technology that will disrupt and revolutionalize the lab testing industry (if this were real, the 800 lb gorillas like Medtronic, which is making continuous glucose monitors for diabetics, and Quest, which processes many lab specimens, would have jumped on it already and innovated themselves or bought the technology from Stanford)
  4. The company actually ran some specimens on Quest machines and sent the results on as their own
  5. Internal dissenters who warned and tried to whistleblow were fired, bought out, or otherwise silenced

What can we learn from this? Well, the company is likely bankrupt from shareholders and the FDA bombarding it with lawsuits. The stock is worthless. The big question that remains is whether Holmes gets to keep any of her salary and already cashed out stock, or if there’s some attempt to claw it back by shareholders. If the clawback is unsuccessful, this will set a precedent for future entrepreneurs that selling the idea is more important than having an actual product.

So go ahead and try it at home. Craft a pitch of a zany idea backed by data that makes it plausible. Hype it up, attract investors, grow the userbase (easy to do in tech) or hire enough big name people to generate enough buzz, and then cash out or sell out.


Is Social Media Conducive to Success?

I’m shaking my head at young kids these days, stuck on their phones, obtaining (and believing) all their information from the internet and social media, regardless of how authoritative the sources. At times, I feel like an old fart, stuck with dialup and landline phones, grumbling about the decline of Usenet and email, and not yet adopting the new technology.

But really, more often than not, social media makes you dumb. It’s a time waster where friends tempt you seemingly glamorous lifestyles, which are in reality carefully cultivated slices of their life. Being exposed to those things can lead to depression and endless peer competition. By focusing too much on the virtual life, we lose track of reality. Tangible things like reading, studying, exercising, and connecting with people in the real world become lost. We lose motivation and don’t spend time doing productive things.

However, given the large audience base, it’s unavoidable for big companies to have a presence on social media. This also applies to small businesses that we start, where viral marketing can really enhance growth. After all, who can turn down free advertising.

The best balance that I’ve found is to have accounts on Facebook and Twitter, and have them be driven by bots. Automatically post articles and such on these sites, automatically add people, accept all friend requests/follows, but minimize the temptation of actually personally opening the app or site to send messages to others.

Maybe if enough people adopt this strategy, the entire Twitterverse will be filled with bots spamming other bots!