Link Roundup: The Value of Hard Work

During times of plenty, when there are more interesting articles than I can do a feature review of, I will combine them into a single post called a link roundup. Here is one such event.

  1. The value of hard work. This reminds me of my time growing up in the crucible of competitiveness that is the Bay Area. Investments made in oneself through education and knowledge pays compound interest down the road, establishing a solid foundation for improved performance and confidence, that feed off each other in a virtuous cycle. Take for example a high school student taking summer classes to prepare for the next quarter’s math and reading classes. That person will get a leg up in results for the rest of his or her life, because of repeated exposure and increased familiarity, not to mention having an easier time in the class. Compared to someone like this, if you’re not working hard every day, you’re falling behind your peers. Just like in athletics, average is over. Every day you’re slacking or doing something else is a day falling behind your peer competitors.
  2. What do future jobs look like? The thinkers of yesterday and today have a vision for how the future looks, and it doesn’t bode well for some. Unskilled work will be replaced by robots. Technical and computer skills will become more valuable. Good future areas to specialize in include AI, robotics, and VR. At the same time, some jobs like in health care that deal with human emotions, where empathy is essential, will be relatively shielded from the effects of technology. But then again, you would know this from reading my book.
  3. As a corollary to the above, university students increasingly recognize the reality of a tough job market for graduates, and are tailoring their studies accordingly. This means fewer liberal arts graduates and more social science, business, engineering, and “trades” graduates. That’s probably a good thing for individual finances but a tragic loss for the country. After all, from their pen would have come art, literature, and poetry – the stuff that gives colour and meaning to life. That’s what separates us from somewhere like Singapore or India, which are
  4. If you have truly niche technical skills, you can make bank. Just look at blockchain developers. Btw, software is one of the fields where if you have the interest and the talent, you can teach yourself and get a great job without having a degree in the field. That’s the path my dad took.
  5. Here’s a great story of a self made web entrepreneur with the vision to establish a business reselling cheap Chinese toys from Alibaba to American consumers willing to pay more. Wait… why don’t Americans just buy directly from Alibaba? Doesn’t sound like a very sustainable business model but somehow it works.
  6. Concierge medicine is taking off, and whispers are that you can have a lucrative practice with low patient volume, if you cater to the rich and treat everyone like a VIP. It’s not my cup of tea, but I see disruptive potential in different delivery methods for health services. Target mini clinics are good, as is the underutilized format of telemedicine.
  7. I can’t harp on the concept of geographic arbitrage enough. By moving to a cheaper location, your dollars stretch so much further. Not only that, but your kids can grow up multicultural with foreign language skills, interesting life experiences, and a great prebuilt application essay for Ivy League schools telling them how unique you are.
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Why Angular Beats Well-Rounded

It’s appropriate, especially given that this is the time of the year when high school seniors are opening acceptance packets and rejection letters from universities all around the world, to discuss the age old dilemma that many college applicants face: whether to be angular or well-rounded. Certainly it was the raging debate my high school classmates had when trying to sell themselves to colleges. They competed with each other for the most extracurricular activities (speech and debate, business club, sports, volunteering, music, arts, etc.) It became an arms race so ridiculous that we joked that to get into Stanford or the Ivy League, one had to be the captain of multiple sports teams, in student government, get > 4.0 GPA, have perfect SATs, and possess a “major” life accomplishment such as curing a major disease, starting a philanthropic organization, or winning one of the math/science Olympiads.

While being a modern Renaissance man (or woman) can be great for getting into these schools, and it certainly does make for a more interesting person, it’s not a guarantee for finding employment. Employers are looking more for an expert in a particular area, or at most someone with two related and complementary skills.

Just think of it from this approach. If you’re an employer looking at a candidate who has decent skills in finance, accounting, foreign affairs/diplomacy, programming, and photography, you may actually not want to hire that person. One worry is that by spreading him/her self out too thinly, the applicant may not truly be an “expert” in one particular area. Most jobs are defined by boundaries, specificity, and depth (you’re *just* going to crunch numbers), and while breadth is helpful in the upper echelons of management and for insightful business strategists, very rarely do companies recognize that and actually try to hire for those spots. More likely they luck onto a candidate with that vision from hires for other positions. Furthermore, companies like cheap worker drones that fit into narrow holes. A candidate with a diverse skill set is more likely to get bored, leave, or demand higher pay.

Therefore, it’s ok to have side dalliances and hobbies, but if you want to be a top worker bee and advance in a career, you’d better have a profession. Take for example the story of Urs Holzle. He was a pure computer scientist, and as such was able to push the boundaries of his own field, get hired at Google in a senior scientist position, and make bucketloads of money. If he had spent less time in his craft and more in say learning the violin to become “well-rounded” he may not have been as successful as he was.

As a last counterpoint, for those already on the well-rounded pathway, while you may not be the ideal workers, you are excellent entrepreneurs, possessing as you do the strategic thinking capabilities to integrate multiple fields and sense opportunities. Also important in the early days of a startup with limited manpower is the ability to fill and manage multiple business roles.

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Follow Your Passions, After Your Career

The story of the Hong Kong banker who quit his job to work in humanitarian aid is truly inspiring and definitely relatable.

One question that Asian children (probably others as well, but I’m speaking from experience here) agonize over when growing up is whether to pursue something profitable (often at the behest of their parents), or something that they’re truly passionate about. It’s rare that these intersect, unless your passion is money. Many times, these kids get so immersed into their studies in school that they don’t even find their passion until much later in life. Then they are filled with regret and resentment.

My approach is to have the best of both worlds. Grind through school in your 20s and get out into a great career. Work overtime and make tons of money early. Guaranteed high income fields like banking and medicine are very suitable for this. The reason is that it’s easier to learn new things quickly when we’re still young. Also, money earned when young is more valuable because it has time to compound.

Do this when you’re young enough and you can emerge in your mid 30s with enough money to retire and live purely off your investments. Then it’s time to find and focus on your passion. I suggest at this point some combination of travel, volunteering, philanthropy, teaching/mentoring, and entrepreneurship. More details on this to come in my upcoming book on happiness.

Doing the opposite by finding your passion when young generally means you have a brief happy time in your adolescence, but at the cost of potential financial destitution in mid life. You also lose out on important things like compounded savings and moving up the career ladder. This can make you profoundly unhappy. One caveat remains. This option may be a good choice that maximizes happiness if you know you’ll die young.

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Does Hard Work Pay Off?

I’m doing a bit of reading these days, and several passages from selected works stand out to me as epiphanies into the easy road of life.

Consider two siblings. The older brother works hard, studies, keeps his head down, gets good grades, graduates with a degree in engineering or accounting, and goes on to a satisfying middle class life with a steady job and income stream.

The younger brother hangs out with his friends, gets mediocre grades, and goes to a typical state school. There, he makes friends and through them joins a startup and eventually strikes it rich and makes it on boards of major corporations.

What is the difference between the two? A healthy dose of luck and circumstance to be sure, but there’s a fundamental philosophic difference between their approaches. The older brother tries to do things through the “official” recognized paths. The younger brother tried to find short cuts in life. In today’s world, there’s a lot of room for backdoor negotiations in smoke filled rooms, nepotism, and corruption. Going through the hush hush unofficial pathway can lead to greater riches for a lower price.

Take for example this passage from the book Hillbilly Elegy that I’m reading now:

It was pretty clear that there was some mysterious force at work, and I had just tapped into it for the first time. I had always thought that when you need a job, you look online for job postings. And then you submit a dozen resumes. And then you hope that someone calls you back. if you’re lucky, maybe a friend puts your resume at the top of the pile. if you’re qualified for a very high-demand profession, like accounting, maybe the job search comes a bit easier. But the rules are basically the same.

The problem is, virtually everyone who plays by those rules fails. That week of interviews showed me that successful people are playing an entirely different game. They don’t flood the job market with resumes, hoping that some employer will grace them with an interview. They network. They email a friend of a friend to make sure their name gets the look it deserves. They have their uncles call old college buddies. They have their school’s career service office set up interviews months in advance on their behalf. They have parents tell them how to dress, what to say,and whom to schmooze.

In the modern world, it’s not about how much you know, but who you know. The best jobs are usually not posted, or if they are it’s just for theater. The company probably has already identified an internal candidate or a friend of a friend for the spot. It sucks for those of us who bury our heads in the books and stay on the straight and narrow, but at least we now know what to change to be successful.

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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?

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Inspiring Business Ideas – Self Employed Specialty Consultant

Today I stumbled upon an interesting post by a medical resident on a specialty site for medical education. She describes how she has been able to charge an obscenely high rate of $388 per hour for her tutoring services. Here are the key excerpts (typos included as written):

I started tutoring at 10 years old. I tutored for free initially. It was fun for me. I love the moments when the “light bulb goes on” in my peers. I find learning so much more interesting when other people’s welfare in addition to my own depended on how well I learned. I guess that was an early sign that medicine would appeal to me. I relish the challenge and the privilege of someone else’s well-being weighing on my shoulder. It somehow made what I do more meaningful than if I were to just do it solely for myself.

Then in 10th grade, I started charging $10/hr for tutoring AP sciences. I loved it. I was the favorite of teachers & parents, many of whom confided in me all their worries about their kids’s academic performance and future prospects. I felt that not only was I helping the student acing AP tests, but also I was somehow part of their household harmony.

I continued to tutor in college. I worked for tutoring companies at first. Ecstatic at the pay raise, $23/hr, when I saw the newspaper ad. Only to learn that I was to drive to students’ home, in Bay Area traffic, pay for gas and maintenance for my car, foot the occasional car accident bills because I was so tired and distracted trying to find new students’ houses all over Bay area.

It came down to about $5/hr of my time, way worst then when I was my own boss in high school, when it was a solid $10/hr plus I had free rides, free food, and made my own schedule. The worst thing in working for others (tutoring companies) was to learn that my students paid my boss $65/hr while I got $5/hr.

Then I said to myself, “screw this. I’m not going to let some talker business man eat off my back when I’m doing all the hard work.” So I quit all my jobs where I was not my own boss. I put my credentials, experiences, tutoring results, student testimonials, & CV on craigslist. Before long, I was getting tutoring requests left and right at $23/hr, with students coming to where I am (so no driving, no getting lost, no parking tickets, no car accidents). I tutored the hours I wanted; I made the curriculum myself.

Shortly after my craigslist advertisement went up, I could not keep up with the demand of tutoring requests. So I said to myself, instead of working like a dog to fulfill every tutoring request, I’m going to raise my hourly rate, until I can comfortably satisfy the demand & still take care of my other responsibilities and still go out with my friends and have a life.

I continued to tutor because I love teaching and being my own boss. After Mini was born, students came straight to my house, paid me $100/hr, and were so understanding towards my role as a mother that I could put Mini in a front sleeper/carrier and tutor at the same time.

Did I say I love being my own boss?

I continued to tutor throughout medical school and into residency, as I take on more responsibilities in my medical training, & Mini demands more intellectual engagement, I had fewer & fewer hours allotted to tutoring. Yet, I still had lots of demands… more than I could fill.

So I kept increasing my hourly rate, to the peak of $420/hr while still in California. Now, I’m perfectly content with the equilibrium price of $388 for the past 2 years.

It’s an interesting read because of how she independently discovered the advantages of being a self-employed niche consultant, as described in my book. Let’s see which principles she recognized and applied.

  • Scale: It doesn’t have to grow too big. Actually, being too big becomes a hassle to manage. Instead of doing the work that was initially interesting, the owner eventually transitions into managing employees, inventory, and crunching numbers as an accountant.
  • Exit strategy: Going along with the previous point, she started out with a firm a goal for her earnings – to supplement her income from her day job, provide some welcome distraction, monetize a hobby, and not work too many hours at the same time.
  • Price adjustment: If there’s anything you should take away from this article, this is the point. Many times business owners starting out are unsure of how to price. One way is to price at the market median (look around at competitor prices), provide exceptional quality, and titrate the price upwards as the number of customers grow. This is especially key if you don’t want to scale up and up such that the company exceeds the ability of one person to manage.
  • Focus on your expertise: Her business was in specialty tutoring. While anyone can bill themselves as a tutor, she had exceptional and unique credentials that she could leverage into higher income. Imagine how much you could earn as a dedicated nanny+tutor to the children of the privileged wealthy, if you had a degree in medicine from an Ivy League plus a masters in early childhood education!

As a side note, the UC system is taking the price adjustment technique to heart. They have a simultaneous problem of a revenue shortfall and too many international and out of state students rousing the ire of Californians. They are implementing the best solution for this, which is to raise prices for those students, maximizing revenue and decreasing their numbers at the same time. It’s a win win for the system!

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The Eternal Debate – Angular or Well Rounded?

No, this isn’t about the dreaded question many college applicants have – should they portray themselves as interested in a single subject/area or as someone with multiple skills – but rather with what areas to study and what skills to develop in order to be able to succeed in an uncertain and ever-changing world.

Let’s first look at the angular approach. This can work in highly technical fields where the more specialized individuals, due to the shortage of supply, can command premium wages and outstanding job security. Examples include delving deep into medicine, engineering, or basic sciences. You can even carve out niche positions in the social sciences and humanities by focusing on say 17th century Czech literature. You will be the world authority on this subject and if ever something comes up in this field (say for instance a Robert Langdon style puzzle), you will be highly sought after to help decode it.

The big downside is that the narrower you go, the less choice you will have for work. If you want to make use of all that time spent in study and acquiring expertise, you have to find a job that offers that opportunity. This may not always be available, and the few that exist may have someone like you already entrenched in it. There can be a big letdown if you fail to find or secure that job and instead have to settle for something more menial. When super specialized people fall, they fall hard. They can instantly go from senior management or chief architect to barista. Finally, you are forced to go to where the jobs are. If your lifelong dream is to stay close to your family in rural Wisconsin, becoming highly educated and specialized for a job that’s only offered in global alpha cities (like a cardiologist specializing in a rare rhythm disorder) may not be ideal.

The other approach of being generalized is naturally on the extreme other end of the spectrum. Mind you, being well-rounded doesn’t just mean not specializing, but rather branching out and linking different disciplines that have the potential to mutually support and reinforce each other. For example, you can link business administration and communication, international relations and French language, media studies and marketing. This kind of chaining maintains versatility but also improves your competitive edge.

Compared to someone who only has one degree, having hands in multiple pots increases the range of jobs that you are a candidate for. Furthermore, during the interview can play up synergies between different degrees. In contrast to the highly specialized technocrat, you will mainly be looking at jobs that deal with people rather than machines, and are therefore amenable to people coming from all backgrounds.

This is a better approach for someone who doesn’t yet know what he or she wants to do in life and where to live in the future, for whom it’s important to remain general and not close doors prematurely. This is also a case where doing a “gap year” like JET, Teach for America, or Peace Corps can help with getting into the right grad school or internship.

Don’t be afraid to specialize after picking your niche. Say that you get a degree in politics and philosophy, go on a Peace Corps mission to Bolivia, and return for a masters degree in public health. Then you go around looking for jobs and end up as a junior analyst for the WHO drafting briefs and compiling data. This is a perfect time to improve your long-term prospects by shifting your career in that direction. Whether through a funded PhD in say epidemiology or simply by working at the job for many years, you will acquire specialized skills. That can later take  you to become a manager at the Gates Foundation focusing on vaccine development, for example.

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Save on College in the EU

 

Have you looked at the cost of school these days? Tuition for American universities keeps on rising. According to Collegedata, in 2015-2016, total costs are projected to hit $24,061 per year for in-state schools and $47,831 for year in a private school. For the price of four years of schooling, we could get a Ferrari or be a nomad traveling around the world for a decade!

What are some ways to get around being saddled with student loans into our adult lives or even retirement? One option is to win merit scholarships by being selective and judicious about which schools we apply to. Of course, not everyone can win these scholarships. This is where we need to think outside of the box.

In my book, I describe how much more affordable college is in other countries. Take Germany for example, which has waived all tuition fees at its universities.

More than 4,600 US students are fully enrolled at Germany universities, an increase of 20% over three years. At the same time, the total student debt in the US has reached $1.3 trillion (£850 billion).

Each semester, Hunter pays a fee of €111 ($120) to the Technical University of Munich (TUM), one of the most highly regarded universities in Europe, to get his degree in physics.

Included in that fee is a public transportation ticket that enables Hunter to travel freely around Munich.

Health insurance for students in Germany is €80 ($87) a month, much less than what Amy would have had to pay in the US to add him to her plan.

“The healthcare gives her peace of mind,” says Hunter. “Saving money of course is fantastic for her because she can actually afford this without any loans.”

To cover rent, mandatory health insurance and other expenses, Hunter’s mother sends him between $6,000-7,000 each year.

At his nearest school back home, the University of South Carolina, that amount would not have covered the tuition fees. Even with scholarships, that would have totalled about $10,000 a year. Housing, books and living expenses would make that number much higher.

Even outside of tuition-free Germany, EU schools are quite cheap in comparison to American ones. Don’t worry about competitiveness. So few American students actually apply, and the schools enjoy increased diversity so much that they reserve spots for foreign students.

Other options exist in Asia, such as the Monbukagakusho in Japan and a variety of options in China. In fact, I just recently read about the Schwarzman scholarship, which is new (just admitted their inaugural class) but gives awardees a full ride to arguably the most prestigious university in China – Tsinghua.

All in all, the American higher education system currently doesn’t serve its students well. Yes, the education is world-class, but the costs are such that they impose severe burdens on graduates for years after. For comparison, Switzerland has an elegant system of vocational training even for white collar professions like banking. Having graduates with work experience, contacts in industry, and the skills that businesses need has led to an astounding 3% youth unemployment rate.

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