Friday, October 14, 2016

Components of managing income risk

I believe I have always had an eye for the future and ensuring I am effectively managing my future income risk for after I graduate. The most effective way, in my opinion, is the fact that my GPA has been high for throughout most of my collegiate career. I have been on the Dean's List multiple times and since my aim is to attend law school after I finish my undergraduate studies here at the University of Illinois, having a high GPA is essential to receiving the most financial aid and being accepted into the most prestigious law schools. I would like to add I have taken the LSAT and will be receiving my score next week, if I do well on that, that would be my next most essential component into managing my future income risk. There is a strong correlation between attending the top 14 law schools and having a relatively high salary your first few years out of school.

I chose to major in economics and minor in political science for two reasons in particular. First, I enjoyed my economics courses in high school and my interests mostly included joining the business sector rather than the medical sector or scientific fields. I had an interest in marketing, but I believed economics gave me a stronger fallback if law school does not work out and having a degree in economics from the University of Illinois is great in terms of potential job prospects. Secondly, I enjoy politics and believe it would provide me with a solid foundation for law. Additionally, my mother works in real estate, where I have developed an interest, and I believe economics has wired my mindset to be more logical and think more thoughtfully. I am very lucky and have not had to take a single loan out because my parents have paid for all of my school, room and board, and a majority of my expenses. In return, I have worked hard in order to keep my grades up and I work for myself, but I also work for my parents so I do not disappoint them. This has allowed me to have a head start because I will not have to worry about paying student loan payments each month. While law school may cost me more, I have put myself in the position to receive substantial financial aid.

Additionally, I have had many job experiences throughout my collegiate career. First and foremost, I have held a bar job on campus as a bartender where I worked my way up from a doorman to a bartender. It taught me hard work and have me the realization in life that hard work is necessary in order to become successful in anything you do in life. I believe that is of value. Additionally, I have had internships at real estate firms, AK Homes and RE/MAX Showcase, where I have been responsible for various tasks such as contacting multiple real estate offices to set up appointments, preparing brochures, and preparing contracts. I believe having this experience may allow me to obtain a better job in the future or possibly even get me into a better law school which could manage my future income risk. I also have been on the executive board for my fraternity and the Illinois Men's Club Soccer team, which has allowed me to gain valuable leadership experience. Additionally, I am the social chair of my fraternity meaning I have managed thousands of dollars of the chapter's funds and I have also been the one in charge of contacting businesses, which I have used to practice dealing with people in the professional world.

My older brother is a dental student at the University of Michigan so he has yet to go through the job market. However, I have any fraternity brothers who have gone through the process and advised me to be patient and weigh your options. They said particularly to not jump at your first offer, but take the time to ensure you are making the right decision for yourself financially. They also said to consider where you will be living and your living expenses based on your location. 







5 comments:

  1. Your focus is very much income risk in the near term - through law school and a few years thereafter. Some of that risk you really can't manage - what the overall labor market will be like when you graduate. Bu some of the risk you can impact. Entry level jobs do matter, but what of the second or third job? Are there things you've done now that might impact how you will do with those?

    There is also the question of how financially leveraged you might be and its impact on future decisions. Some students in the class will be carrying a fair amount of debt with them after graduation. While interest rates are low now, the need to service the debt can impact decisions in a way that makes immediate income generation a higher priority. Some students wrote about older siblings counseling patience. Do you take the first job offer if you don't have another, even if you don't really want to work with that company? And questions like that. How much debt you hold can impact how you answer that question.

    Let me add something I tried to stress early on in the class. While your GPA is measurable externally, your actual human capital accumulation is much harder to measure but it may be more important for determining your earnings and your second or third job. Do you know if you are well positioned that way?

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    1. I do believe I have done certain things that can have an influence on my future success on my 2nd and 3rd jobs, as I mentioned in my post, I learned to climb the ranks at the local campus bar I work at and I also worked at a miniature golf course where I went from working as a cashier to manager. I understand each step in life (in this situation, jobs) is a learning experience and my past jobs have taught me how to improve in a real working environment. Additionally, I believe I have developed excellent communication, teamwork, and leadership skills through playing organized soccer and being part of a large social fraternity.

      I believe you do take the job even if you do not want to work for the company under certain circumstances. For example, if you are not stable financially, you should take the job and continue looking for something else while you do. I believe we need to take a look at how long someone has been ready to join the work force as well. How long someone has been searching for a job can impact this decision. For example, if someone has been out for three weeks and only has one job offer, they may be less inclined to take such a job they do not want as opposed to one who has only had one offer in the last three months.

      I agree with your opinion on GPA because I do not believe it is a fair representation of one's actual human capital. I stated my GPA due to law schools weighing it so heavily, unfortunately this is one of the largest deciding factors for applicants, but where you are accepted to law school is a large factor in future job prospects.

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  3. I wanted to expand on Professor Arvan's final point on human capital accumulation. Let's say you do take your only job offer despite the fact your interests do not align with the company's. As you begin work, you can either apply yourself and learn about the structure of business or simply show up and do only what is asked of you. By choosing the former option, I feel your comprehension of business organization and interpersonal skills will greatly increase. The experience gained may help when searching for a job more acute to your interests.

    As far as your comments on GPA, I agree that earning a quality grade in a class is very important; especially with grad school right around the corner. However, what you do as an individual to enhance your educational experience offers a much greater payoff than simply studying for a test and doing well.

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  4. my impression of law school is that it is very expensive, and will definitely send you back a bit while you are there. do you feel that you will be able to balance everything once you are in law school? many people i know who have gone to law school have taken a gap year in-between their undergraduate degree and law school so that they can save money, travel, and do other things that would help them. have you ever thought about this?

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