I’ve been thinking about this for some time. This is a follow-up to the previous post Lifestyle Design: Choose Where You Live. I took this picture during my vacation to help make the point:
It was taken on the famous Inca Trail to Machu Picchu in Peru. The classic Inca Trail takes four days and three nights of hiking.
The three people in the picture are a tourist, a guide, and a porter. You can tell who’s who by the amount of stuff they carry on their backs. The tourist only carries what she needs during the day: a camera, a jacket, a water bottle, a hat, sunscreen, etc. The guide carries his own gear for the day and the night including warm clothes and sleeping bag. The porters carry what the tourists need in the evening and gear for the group including tents, chairs, food, cooking pots, plates and utensils, and a propane tank for cooking. Yes, a propane tank on their back for the entire journey.
According to a guide book, a guide earns about $100 a day; a porter earns about $30 a day. What’s the difference between a guide and a porter? The ability to speak English (or whatever language the tourists speak). I’m sure the porter knows where to go and where to stop just as well as the guide but not being able to speak English makes the porter earn less while doing more work.
Is it fair that the ability to speak English is valued so much? No, but that’s the way it is. It behooves a porter to learn English and become a guide.
The media like to pick on English and Art History majors. A former colleague was an English major. He taught high school after getting his teaching credentials. He soon realized being a high school teacher wasn’t going to give him the financial security he’d like to provide to his family. Rather than complaining about low teachers’ pay, he quit and started working in customer support. Soon he was handling the most critical customers. He moved from customer support to sales support, then to business development. Now he’s a Senior Vice President of an international company. Choosing what he did made a huge difference.
Over at Bogleheads investment forum, we had a 19-year-old college student getting paid $20k for a summer internship. That’s a $80k/year pay rate for someone without a college degree when news reports would have you believe college graduates with degrees can’t find jobs. It’s not about whether you have a degree or not. It’s about what fields you are in.
I follow the blog Leigh’s Financial Journey. From what I read, Leigh graduated with a bachelor’s degree in the last few years, during the financial crisis and great recession. Nonetheless she’s earning six figures today and she’s getting good raises. Do you think it has to do with what field she’s in?
Choosing what one does makes a huge difference to one’s income. All jobs require that you put in a good day’s work. If you are working for pay anyway, you might as well work jobs that pay more. Jobs that pay more aren’t necessarily harder. Supply and demand make them pay more. That’s all.
What about doing what you love? I heard on NPR this story about someone wanting to become a professional ballet dancer. Not only it requires a lot of talent, a lot of investment in costumes and shoes, spending on lessons, years of practice and high risks of injury, now get this:
Ballet dancers start out earning about $60,000 a year — and pay raises are rare. That’s if you can get a job in the first place. Since 2007, 2008, companies are shedding dancers. They’re rarely hiring them. Careers are also pretty short: Dancers usually go pro around 17 and a lucky dancer will retire around age 40.
Doing what you love is a luxury few can afford.
Refinance Your Mortgage
Mortgage rates hit new lows. I saw rates as low as 3.25% for 30-year fixed, 2.625% for 15-year fixed, with no points and low closing cost. Check mortgage rates in your state.