Bullish: Are You Under-Reinvesting in Your Career?

Now, it’s certainly easier to cut expenses than to make more money. Anyone can cut expenses. Old ladies with coupon-clipping scissors can cut expenses. But there are serious limits as to how far you can cut. Attempting to double your income over the next five years requires more focus and cleverness, but offers an uncapped potential. Over the last five years, I’ve more than doubled my income — but I haven’t found a less-than-half-price apartment, or a way to squeeze down the cost of a can of beans by another 50%.

So, if you are young and smart, I think that living like a senior citizen on Social Security is a case of under-reinvesting.

What would it look like to reinvest instead of over-saving?

Let’s be clear: you should definitely save up an untouchable emergency fund, and if you have credit card debt, you need to take care of that first, either by cutting back or developing an immediately profitable sideline or second job.

But once you’ve got that taken care of, think about the next $2,000 you make and don’t immediate need in order to live. Obviously, you could spend it. You could put it in the bank, in a retirement fund, or in a money market account. Or you could re-invest. If you’re self-employed or an entrepreneur, you probably reinvest all the time. The best use of about $2,000 I ever made was when I promoted the internet marketing company I ran at the time by holding a day-long internet marketing conference for small businesspeople at a local private club. I made back the entire $2,000, and discovered that people really, really love to hire someone they’ve previously seen behind a podium. A few years later, I spent about five months doing unpaid, nearly full-time training to qualify for a gig I now have. And I maxxed out: I didn’t save a penny during that period. Instead, I hired someone to run my errands so I could do even more unpaid training. The gig was, as it turned out, pretty life-changing.

If you are employed in a regular job, re-investing options include taking a class to learn a new skill (it’s good to be a young whippersnapper who knows how to increase the search engine rankings through Twitter), attending conferences in your industry that your employer won’t pay for, or flying around the world to personally meet up with a mentor in your field. (While telling a luminary in your field that you’re flying from New York to San Francisco to have dinner with her is a bit creepy, you can always try “It just so happens that I’ll be in town for two days” and see if that prompts action — after all, scarcity enhances the perception of value! See more here on How Business is Like Dating).

By the way, a recession is a great time to start a business. And when you’re young and sprightly is also a great time to get moving. An entrepreneurial drive is much like a sex drive; strong (although perhaps unfocused) when you’re young, peaking at some point thereafter, and, for most people, in decline everafter. Time to reinvest is while you’ve still got the mojo to do so.

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    • georgeelliot

      All very sound advice, especially the bit about the legitimacy that accompanies being behind a podium. I had a similar experience when I was in my twenties and was invited to speak about graphic design at a conference. I wasn’t paid to give the talk and i actually lost a bit of money on it, but the credibility and notoriety that resulted were much more valuable than a stipend.