Better Professional Career Planning by applying principles of Personal Financial Planning
Every individual has a significant aspiration to start and grow in their respective professional careers. We are all one or other way good in managing our personal finance by saving and investing based on our knowledge and backgrounds. I am trying to attempt to co-relate how we can plan our professional career similar to personal financial planning.
Personal Financing planning includes earnings, savings, investments and derived profit to achieve short term and long term financial goals to manage individual and family needs over the period of time.
In similar terms Professional Career Planning is all about choosing the right education, build skillset, employment, salary, and career growth to achieve individual career aspirations and family needs over a period of time.
We begin our journey with a goal to acquire a good education. Education has always been the first stepping stone towards the growth of an individual, globally and hence a very significant investment for both parents and the child. Every parent saves 10% to 30% of their earnings for the education of children. Best school/college comes with higher fees. A good education opens the window for a good career and better prospects. Also, the investment cost increases with additional time and money for coaching.
In financial planning, there are always multiple investment options available like low/high risk, Debt, Equity, FD, Bonds, Hybrid, Real estate, etc. Higher risk means higher profit, lower risk means lower profit. Based on our risk appetite we choose the right investment options.
Applying the same understanding in our career planning, we always try choosing safe education options. We speculate and follow the trend. Speculation based investment can not be good investment. While choosing topics for expertise in education, we need to analyze the current & future market demand.
Example: You invest in X stock because it’s in an upward trend(speculation) without analyzing company fundamentals like assets, liabilities, sales, volume, profit margin, growth for few years, future prospects. By chance, if the stock falls due to weak fundamentals, your money is lost along with its value and purpose of investment.
If we educate in an area that has no future scope and demand, we may end up with no Career! Strong foundations and solid knowledge are essential to perform better in future assignments. Its like stock having good fundamentals perform stably even in a difficult market situation.
Warren Buffet quoted “the Best Investment you can make, is an Investment in Yourself…the More you Learn, More you Earn”.
Once formal education is complete, the next phase is Employment — First Employment with the right employer with an appropriate job profile that is based on your skills set and aspiration is very important. Because most of the time, you may have to carry forward a similar job profile throughout the professional journey.
It is like Mutual Funds investment, Large caps gives a stable return, medium risk. Mid-caps & Small-caps are volatile, high return and high risk.
If you choose a big & stable company, challenges are less by design, learning may be limited. Start-Ups are like mid-small caps, high learning, more challenges and risky too. Whatever we choose, we need to continuously monitor what you can add value and what you gain in terms of compensation and learning. Continuous monitoring is the key point to implement.
It’s like growth and dividend. Funds or stocks should either grow in value or pay a good dividend. Again I would like to quote Mr. Warren Buffet’s saying “It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.
Job Switch: Switching a job to meet individual aspirations and family needs is not a crime! There are many so called talented people mesmerized with company brand name or hypnotized by fancy roles and stuck in a career without trying for newer opportunities. At the same time, smart and opportunistic people keep switching companies and have achieved a comfortable situation sooner than later.
There is always an argument on long term commitment and “Loyalty”. But I believe “Value” addition from both the ends is the most important factor than “Loyalty”.
Think like, Is your investment portfolio giving you enough returns to meet your goals and in comparison to other possible options? If an investment is not growing by value or not giving a good dividend means it is time to switch. If you continue holding non-performing investments thinking of “Long-term” then “Don’t you think it’s a big opportunity lost?”.
There is a great saying by our beloved former President of India, Abdul Kalam — “ Love your job. But don’t love your company, because you may not know when your company stops loving you”.
In a nutshell, It is essential to plan and take ownership of career development and achieve success.
Disclaimer: I want to be clear that I am not stating this as a one-size-fits-all solution. To each his own. But I am only attempting to trigger a dynamic thinking process towards career planning, which usually is required for sound financial planning. Ultimately for the infinite investment, we make on a daily basis, everybody deserves a fair return, that beats the inflation.
