I would say a good amount of choices I have made have been made with an eye looking towards the future and reducing income risk. For starters, and this will apply to everyone's posts, we all are enrolled at the University of Illinois Urbana-Champaign which is ranked #44 by USnews for best national colleges. Being from the suburbs of Chicago and therefore the state of Illinois, eventually coming to UIUC was a no-brainer. Weighing the average cost for a 4-year university which is $24,061 (according to http://www.collegedata.com/cs/content/content_payarticle_tmpl.jhtml?articleId=10064) versus the average cost to attend UIUC which is $15,698 (http://colleges.usnews.rankingsandreviews.com/best-colleges/rankings/national-universities) that is a difference of $8363 saved by attending here over the average cost of 4-year public universities. Much less considering being able to drive myself and all my belongings only 2 hours to reach the campus is saving myself/ parents a large variable cost amount compared to if I went to school in California and had to pay for flights home/ move all my stuff out there and back/ store my things over summer etc. So attending the best public university in the state to get the lower tuition costs and the benefits of being a top-50 overall university (including private schools) is definitely a double win in my eyes. I have taken out student loans every semester and I would prefer not to say the exact amounts but we will put it at $80,000 (or $10,000 x 8 semesters) to have some easy math.
Here at UIUC I am an economics major. Although in my opinion my major is not as marketable to employers for the types of jobs I am trying to apply to, an economics background is right behind finance, marketing, and management majors that are in the business school here. In this sense I would say I have put myself in a decent position from my major choice to be marketable to employers; mostly based off the fact that I am graduating from such an accredited university. What will luckily help me out to reduce future income risk is that I have had internships the two previous summers at the same company in two completely different roles. I worked in a customer-oriented role for a third party logistics company where I would have direct contact with many people working at Costco Wholesale Corporation. I would take care of scheduling, issue resolution, accounting incidents, and just general operations of an enterprise customer account for my company. The second summer I worked in a sales-operations role where I (along with my mentor) would be responsible for 30-40 automatically booked trucks per day as well as transactional selling of freight to our same automatically booked carriers (trucking companies). We would have to track all the loads transit times, deal with trailer rejections (at the dock while loading or unloading), issue resolution usually related to breakdowns/flat tires (a lot of these), accounting incidents, and general operations of a sales account. These past experiences, as well as being employed for 2.5 years at a campus bar, have given me a very strong resume and many relevant skills/ experiences/ human capital development that I can talk to recruiters about while applying for jobs. The jobs I have worked the past three years (although I cannot give an exact $ amount) have most definitely reduced my future income risk vs. having no internship experience.
I am also a part of a social fraternity on campus (120+ members) and have served on the executive board multiple times. This is not as strong of a case as my previous job experience, but (in my opinion) one of the main hiring criteria for a lot of companies is a "culture fit". Culture and cool company culture (sponsored happy hours or monthly outings) are things I hear literally every company tout in interviews/ career fair/ on their websites etc. Being a part of a social fraternity and having relevant leadership positions within it have also helped me out a lot in recruiters eyes when it comes to "company culture". From a recruiting standpoint hiring the 15 people with the best GPAs (although a very important metric and indicative of good work ethic/ intelligence) is not how they approach their hiring practices. Recruiters obviously want as good of GPA/ coursework as possible but this metric is weighted against the culture fit. This is because the recruiters want to hire people they think will mesh with the office and just in a general sense someone who they think is a very normal, sociable person that they would be willing to see 40 hours per week every week for the foreseeable future. Being able to talk about a leadership role I had within a social organization combined with relevant job experience/ skills have made me a decent hiring candidate. I will say you could get the same effect from being a part of a business fraternity or an RSO that is related to your major/ type of job you are hoping to seek, but this is the choice I made.
So saving money versus the average cost of universities (staying in state), being at a top-50 university, having a solid resume from 2 separate internships, and being on the executive committee for a social organization are all factors/ choices I have made to reduce my future income risk. Also, hopefully when I am employed shortly after graduation, I plan on working in downtown Chicago and most likely living at my parents house for a few months to start saving money. This is absolutely to reduce my future consumption spending (living + utilities + food for the most part are free) and to save up some capital so when I decide to actually move downtown I will have money saved up. I will most likely move in with friends from UIUC who would be doing the exact same scenario I was (living at home) so my future place downtown will most likely not be in the gold coast or anywhere that is too expensive. I do not own a car nor do I plan on getting one anytime soon so I will be taking public transit, and I like to think of myself as a frugal person who does not eat out too much so I will also save money by cooking for myself. I definitely believe the choices I have made vs potential choices I did not make will reduce my future income risk to a good degree and that I will have a very content life with (hopefully) no big surprises.
Let me take on what you said in the first paragraph. There is a large implicit assumption, that the return from the investment wouldn't change much if at all. If the return actually did vary with the investment, the higher cost investment might be the better choice, depending on the borrowing costs and the different in the returns. I'm not trying to knock the U of I, but part of the issue I'm hoping for you to get at in this post is what determines those returns and how your decisions matter for that.
ReplyDeleteOn the prior work/internship front that indeed would seem to position to be a good hire though I wonder what fraction of interns end up working for the company after graduation, both as a general proposition and for the particular company where you were employed. One issue, apart from income determination, is learning whether you would enjoy such work post graduation. Some other students talked about older siblings who had good paying jobs that they ultimately quit, because they didn't like the work. So fit disposition-wise matters too and I wonder how you've done that way.
The social fraternity - awareness of corporate culture part - was interesting. I can see that cutting both way. One the one hand, they probably don't want to higher loners and instead want to higher people who fit in well with their co-workers. On the other hand, they probably want employees who are willing to work long hours when necessary. So I would think that one is a bit of a double-edged sword. I wonder how it will ultimately play out for you.
I did not elaborate on this in the post as well but regarding the 1st paragraph: My parents told me I had to go to school within driving distance of their house (Chicago suburbs) and I always wanted to go to a large-feel, real college town type of university. Essentially (in my mind @ the time) my choices were limited to about 3/4 of Big Ten schools. I got into Iowa, Indiana, Michigan State, and Mizzou (SEC but close in geographical terms) so in the regard of weighing U of I return of investment versus those other schools, which are all at the same level as U of I or considered a bit worse (comparatively, not overall) it was very clear. It seems like it was a good choice to come here for a cheaper price versus out of state tuition at universities that are very similar to here.
DeleteAt the company I worked at they specifically try and rehire all previous interns (unless the experience was just god-awful or something, very rare occurrence) so they do not need to retrain them. There is a decent learning curve for the job: not the day to day functions but just how to use the specialized-CRM software and understanding they way the freight market works, terminology, how to spot winners/ losers while bidding, etc. So a non-intern who gets hired goes through training for about 4 weeks in a classroom type of setting then 2-4ish more in a non-accountable sales position just to get their feet wet selling and find their voice on the phone. The internship (12-weeks) eliminates the whole training period and incoming previous interns only go through a 1.5-2 week crash course to re-familiarize themselves with how everything works.
The main reason I brought up culture fit as well is because the logistics firm I worked for is HUGE on culture. Very young workplace, no cubicles (rows upon rows of desks), people playing music outloud while working/ selling, very casual dress (only sweat pants/ yoga pants are not allowed. You could wear shorts, tshirt and flip flops everyday), etc. 25+ companies do the exact same thing that my company does just in Chicago alone so the culture fit and fun-workplace criteria is what makes the sales job a bit less monotonous and can be the deciding factor for a person to accept an offer vs. a bunch of other similar styled sales jobs (sales jobs as you probably know are not mindblowingly exciting). An incoming intern hire has already been vetted for the culture fit and they know the job function. However, I will say I do not see myself working a career there though to your point- it is kind of a meat grinder in there, very hard work. Also I like to think someone who is sociable and fun in the workplace can also be someone who works long hours too! not mutually exclusive.
Great post,
ReplyDeleteI also worked for a logistics company this summer and I am also an economics major so your post was very similar in nature to mine. It was interesting to see your experience within a logistics company and how it differed from my experience. I was more involved in the warehouse faction of operations where you had experience with customers in the sales division. This summer I have applied for an internship with a logistics company in their sales division so hopefully I can get the job and have similar experiences as you.
You touched on the culture of a company which I touched upon as well. I think it is very important to have certain social and communication skills when applying for jobs in the business world; therefore, having more than just a high GPA on a resume is crucial to actually getting hired. Being apart of a social fraternity has probably given you a multitude of experiences in social environments and plenty of connections that you could exploit while trying to find a job.
Ben,
ReplyDeleteI really enjoyed reading your post. The way you illustrated everything you have done during your time in school in order to reduce your future income risk was very easy to follow. I got a lot out of reading your post as I focused on a few different points in my post, so yours offered a little more insight. Specifically, I hadn't yet thought about some of highlights towards minimizing future income risk that you pointed out.
I too am an economics major, and I sort of agree with you that our major might not be as marketable as say an accounting or finance degree from the business school. However, I think this is only applicable to students right out of school while searching for that first job. I believe the skills we have learned as econ majors will pay off down the road and hopefully allow us to excel in the business world.