Diversify your portfolio. This is good investment advice, but it applies to more situations than you might think.
After all, putting aside a portion of each paycheck into a retirement fund or other financial assets isn't the only way to invest now for future returns. Indeed, unless you are very wealthy or very lucky, the most valuable asset you possess is your own human capital. This is a bundle of physical and mental abilities, knowledge, skills, and relationships that allow you to earn an income and, in turn, support yourself. your family.
Education and childcare are also investments. The same goes for the process of forming, deepening, and maintaining relationships with relatives, friends, and acquaintances. The concept of diversification applies to human and social capital as well as financial capital. By putting too many eggs in too few baskets, you are exposing yourself and your dependents to undue risk.
In my own career, I have never relied on a single source of income. I continue to push myself to learn new things, acquire new skills, and expand my circle of relationships.
I started writing this column for a North Carolina newspaper when I was still an undergraduate, already taking time out of my busy schedule with school and other part-time jobs. He then worked as a non-profit executive while finding time to write columns, magazine articles, and books. I also worked in broadcast media and began teaching, first in the Leadership Program and then at Duke University's Sanford School of Public Policy and Triangle Dance Academy (back in the early 1980s, my first part-time job was tap dancing). ). .
I know there are many people working in professions that don't offer the flexibility that I enjoy. Still, nearly everyone is good or can be good at multiple skills that are valuable to employers. Finding ways to develop and demonstrate these skills is a great strategy for maximizing your income and minimizing your risks.
Consider the findings of a study just released by the National Bureau of Economic Research. The paper's five authors (three based at American universities and two at Chinese universities) use data from the American Community Survey to estimate the employment and earnings of college graduates. I tracked it down. Their hypothesis was that undergraduates who earned a double major would perform better over time than otherwise comparable undergraduates.
More specifically, they thought that people with two majors tended to weather economic storms better than those with only one major. That's exactly what their research found. A 56% drop in income is “shocking” for the double major.
On the other hand, the authors write, “specializing in one field will likely allow you to capture more human capital in jobs closely related to your college major.” Students will be able to present themselves more attractively if they major only in business administration, communication, psychology, or nursing and immediately enter their chosen profession after graduation. initial employer.
But for double majors, “by investing in more than one field, you can gain knowledge and skills across a broader range of fields, potentially making you more versatile and adaptable in the labor market.” increase in unemployment, decrease duration of unemployment, or other positive labor market outcomes.
Well, the bottom line here is that not everyone should Become a double major in college. In fact, as the researchers themselves note, the study design did not allow us to determine whether double majoring was effective in reducing risk. caused This may be due to degree choice or simply reflects the fact that young people who earn double majors are more likely to have already mastered and practiced a variety of skills.
Actually, that's good news. This is through a conscious strategy of continually acquiring new skills and knowledge, regardless of whether you are in a position to pursue two degrees or are old enough to make such a choice. , suggests that you are likely to better yourself. Find a new basket. Fill it with eggs.
John Hood is a director of the John Locke Foundation. his latest book, mountain fork and people of the forest, Combines epic fantasy and early American history.
