As a high school teacher I get a real kick out of asking kids what they might want to do for a living in a couple years and then helping them build some skills with that goal in mind (approaching education this way seems to have a much higher success rate than telling students they have to learn information because someone else thought it was important for them to learn it). Inevitably many of them are not sure, and while this is a good thing, I’ve noticed that the default option for many young women is to say “cosmetology.” Now there is nothing wrong with pursuing a career in cosmetology, I just think there is a smart way to go about building a career in that field, and then there is the path that most young women take. In my area, physical labour is the default option for men that don’t know what to do, and fortunately because of the farming and energy sectors, there are still very high wages available for anyone willing to put in a hard day’s work. I do sympathize with some of these young ladies who are probably just saying that they want to cut hair for a living because that seems to be more socially acceptable than simply stating, “I’m not sure what I want to do yet, but I’m keeping my options open.” Unfortunately, when you say this enough times, it seems many people convince themselves that this is their future, and consequently all motivation to reach their academic potential goes out the window.

Reality vs Perception

When you’re in high school the job of beautifying people all day long must look pretty good. I mean makeup and hairstyles are a huge part of your life, and becoming an expert in applying those techniques is probably very alluring. After all, we now tell kids to pursue their own interests no matter what the cost, because you have to love what you do every day (ignoring the fact that many of us don’t have a lot of interests other than hormones and establishing our own identity in high school). While pursuing interests is a great thing, we should probably realize that kids need time to mature and realize what they really have a passion for, before committing to that career path.

What these ladies don’t realize is the incredibly low rate of pay they will likely receive and how hard they will have to work for it. After putting my renowned Google research skills to use, I found that the average wage for a cosmetologist in the USA was about $12.00 and most cosmetologists in both Canada and the USA earn less than $30,000 per year. In order to get this wage, these people must work a job where they are on their feet all day, hunched over (apparently back and neck problems are common in the field), talking to many people you don’t really like, and digging around in hair that may not be very clean. I personally think that if this reality was made more apparent, few girls would be so quick to jump into the field.

Run Your Own Show Instead!

Now that is not to say that no one is making money in the field of cosmetology. If you are into the whole hairstyling thing (I’m not going to lie, I’m a pretty low maintenance guy) you no doubt know that the price for someone to work on your look for an hour is a whole lot more than $12.00 plus the cost of product. There is money to be made – just not by being an employee. Instead, my advice to people that want to get into the cosmetology field is to run your own hair salon, or cosmetology business. Take advantage of outsourcing the work, and instead focus your education on running your own business. Whether that means going the college route or the university route, it doesn’t really matter, the reality of that business model makes a lot more sense than working full time to make $30K a year.

The Road Less Travelled

By going to university and taking a Bachelors of Business Administration, or a similar college course, you will cover the basics of how to run a business including basic economic theory, marketing, HR, taxes, payroll, and making a business plan. Not only this, but in your classes you could focus on making a bevy of very important connections that will be a great help to you as you go forward. The friends and contacts you make while going through a business-related education will give you a great pool of human capital and resources to draw upon when you need help or recommendations for the various aspects of business life.

There are many indirect benefits to pursuing this goal relative to the far more common one of going to a cosmetology training school. Instead of devaluing the education all around you in high school with an attitude of, “I won’t need to know this in life,” I believe that students would be more willing to strive to learn new things, especially in math and business courses. If your business eventually fails for one reason or another, you are now left with some very marketable skills, and a ton of valuable experience. This is a much more enviable position to be in than fighting for a spot in a salon with dozens of others who are just as qualified as you are. The smart move is not to default into doing something you’re not sure about, it’s to put yourself in a position to take advantage of the fact that there so many people out there who are willing to let the default position become the path they choose.

The Wealthy Cosmetologist?

The Wealthy Barber didn’t get wealthy because he was a better barber, he got wealthy because he was a better businessman. I’m fairly certain that as a future entrepreneur looking to get into the cosmetology industry, you could pick up the vast majority of what you need to know on the fly by talking to experienced people in the field. An alternative arrangement might be to cut in a very experienced cosmetologist who has a long client list as part of your ownership team. In exchange for her expertise you would get to learn from the best, and promote the fact your product is top-notch. If all else failed, there are plenty of 6-month courses out there being advertised if you felt you really needed training in the art of cosmetology. Trust me, your business skills will be in much higher demand than their hairdressing background. The supply of trained cosmetologists far exceeds the demand. Don’t end up on the wrong side of that equation, take advantage of it instead!

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No I am not trying to sell you an eBook on how to make the perfect podcast and I’m not looking to rent you my god-like podcast consulting services at an “ungodly” rate. I don’t care if you make a podcast, what I want to talk about today is how to use a podcast from a listener’s point of view. It seems that everyone out there these days is experimenting with podcasts (I may even jump on the bandwagon myself at some point), and apparently they are the much ballyhooed (there’s a throwback word) “next big thing” in the web world. Given my initial experiences with this relatively new medium of communication, I can definitely see that there is potential for a lot of people to tune out of podcasts and not see the benefits of them if you don’t know how to use them properly.

Isn’t Podcasting Basically Radio?

When I first seen this whole podcast idea, I was skeptical to say the least. I thought, “When do I have time to sit down and listen to someone talk for 45 minutes?” It turns out I was basically right. I tried to listen to a few podcasts concerning topics I was interested in, and I just didn’t find it all that stimulating, and for someone who is used to reading through blog posts and academic journal articles and full speed+, the information seemed to be delivered so slowly and with so much fluff (BTW, if you thought this was a post on how to make a great podcast, that experience should be a big hint – get rid of the fluff and condense your content).

There were two things that changed my view on podcasts and got me thinking about how to use a podcast to maximize entertainment value and efficiency. The first was doing dishes and the second was Bill Simmons. I’m probably the only person to ever say that. Doing dishes is my contribution to the food preparation process in our house. I’m not a terrible cook, but I have no patience for it, and I don’t particularly like to try new things, so my girlfriend generally dominates that part of the operation. When I’m doing dishes I found I liked to keep my mind busy with other things, and since I’m not a big music guy, I started listening to “The Sports Guy” Podcast by Bill Simmons. I have read his columns for years (big plug here, if you love sports and want to waste copious amounts of time at work then Bill Simmons is your boy) and thought I’d give his podcasts a shot. While I didn’t find them as hard-hitting as his columns, the podcasts were pretty cool in a talk radio/background noise kind of way. So it became kind of a ritual for me to do the dishes and tune in to some sports talk. (more…)

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Say “HI” to Teacher Man, Y&T.ca’s staff writer!

Hello fellow personal finance readers. I go by the pen name “Teacher Man” due to the fact that I recently graduated from university and am in my second year of teaching high school. About 9 months ago my partner and I started a website called My University Money. It is aimed at helping young people (with a specific focus on post-secondary students) and just talking about financial and student lifestyle issues in general. Young & Thrifty was one of the first bloggers to really reach out to us and give us a little recognition when we were just starting off.

Is It As Simple As Degree = Money?

It used to be considered common knowledge that the way for middle class people to get ahead in life (or really any class of people for that matter) was to do well in high school, apply to a bunch of universities/colleges, and then go to the best one that you got accepted into.  The consensus was that borrowing money to get a degree from a well-respected institution of higher learning was the best investment you could make.  Universities and colleges across the land are still reading from this gospel, but it is not nearly as true as it once was.  More and more often we read stories in the newspaper of people with fine arts degrees who are $120,000 in debt and have little job prospects.  Now, there are obviously some benefits to school that can’t be measured by dollar signs, but it is worth noting that the once sacred truth that you had to attend a university or college to be successful is no longer valid at all.  Don’t take my word for it, go ahead and Google the resumes of Bill Gates, Steve Jobs, and Mark Zuckerberg.  You won’t find a university/college degree.

 

Teacher vs Labourer

We aren’t all computer geniuses who can drop out of post-secondary school and become billionaires, but here is more of a layman’s example.  When detailing potential career paths for my students I often use my career as a teacher for one part of the case study, and for a comparison I use my high school friend Chase.  Chase and I both grew up having fathers that harvested wood for a living.  While I decided on one -40 day that being a teacher was a good idea, Chase likes working with machines and was a solid operator.  After high school I went to university and Chase went to work in the oil patch out in Alberta.  I spent 5 years in school and came out debt free with a pair of degrees, due to the fact I had a great summer job.  This put me ahead of the vast majority of graduates, but let’s compare my financial situation to Chase’s:

Chase earned an average of $65,000 a year during those 5 years.  I’m not sure of his exact investment levels or returns, but let’s say he listened to his know-it-all teacher buddy and saved the cardinal rule of 10%.  Now he actually made some great investments in property so I think he did much better than the average in terms of investment returns, but let’s say for the sake of argument he received an annualized return of 8%.  After 5 years TM is leaving school with a net worth of $0 (give or take the value of an old car).  Chase has $38,132.91 in the bank.

But now it’s time for our favorite staff writer to catch up right?  I mean, it’s common knowledge that someone with two fancy degrees (ok, so my degrees aren’t that fancy) should make a lot more money than a labourer right?  WRONG.  As one of the best paid teachers in the world, I start at $50,000 a year, and max out around 80K.  I would imagine Chase’s salary will grow substantially as well, but again, let’s be conservative in order to prove my point and say he continues to make $65,000 (easily doable anywhere in Alberta and Saskatchewan right now).

If we check in on TM and Chase in another 5 years and assume that I have been saving 10%, and getting the same returns as my buddy I will have $35,199.61 in my investment account.  My hard working friend will have accumulated $94,162.66.  After twenty years from the date of our high school grad (*shiver at the thought of awkward reunion*) if we keep the same assumptions, Chase will have an investment nest egg of just under $300,000!  The teacher guy will be severely trailing his friend as he brings in $184,642.54 and this is factoring in that I should be making a little more income that my buddy is at that point.  Even assuming that I would be able to able to save a little better percentage of my money at 15%, I would still trail my friend who made the “wrong” decision out of high school.

 

I Still Like Being Me, But…

All this being said, I would not trade places with my friend for anything.  I had an unbelievable time during my post-secondary education and enjoyed experiences that I would have never got while working.  I simply want people to understand that they can choose not to believe the multi-billion dollar propaganda machine that is post-secondary education.  My buddy has great work connections at this point.  He has investment experience that I can only read about.  He has the financial backing to start his own business if he so chooses, and he is making more money than me!  These are factors that I would not take lightly, and he single-handedly proves the point that there is not one singular path to financial success.

 

Why Jam A Square Peg Into A Round Hole?

North America is in dire need of tradesman, hard workers with heavy equipment experience, and a variety of other less publicized careers.  If you like doing this work why should you try to force yourself through years of university or college?  My example above illustrates the fact that compound savings often beats increased income, and I would guess that at Chase’s real income over the next 20 years, if he were to consistently save 10% and invest in basic index funds, he would have more in the bank at retirement than many lawyers, teachers, government employees, and the majority of people with degrees.  Make your own choices when it comes to what sort of career you want to pursue, and try to ignore these “rules for success” that people put in place 40 years ago.  They are not relevant today, and can actually be harmful, especially if that is not what you want to do.

 

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Hello fellow personal finance readers. I go by the pen name “Teacher Man” due to the fact that I recently graduated from university and am in my second year of teaching high school. About 9 months ago my partner and I started a website called My University Money. It is aimed at helping young people (with a specific focus on post-secondary students) and just talking about financial and student lifestyle issues in general. Young & Thrifty was one of the first bloggers to really reach out to us and give us a little recognition when we were just starting off.

Attacking the lack of financial literacy in Canada and the USA has become the norm these days, and with good reason.  In my opinion there is a direct correlation between not knowing how to properly handle money, and the problems caused by excessive debt in the marketplace right now.  The vast majority of people agree that something should be done, and the public school system appears to be the best medium for delivery.  At least, it appears that way until you factor in the makeup of the average teaching staff.

We Have People For That

I am routinely amazed by the lack of financial literacy within the ranks of teachers.  I often talk to my fellow educators and many of them have no clue about how much we pay in union dues, how our pension fund is handled (luckily it is actually handled pretty well, not as good as simple ETF or index fund, but still far better than most mutual funds), or even how to do their own taxes.  When I told people I was doing my own taxes last year just because I liked to know exactly where my money is going and why, I drew a lot stumped looks.

 

It’s Not Our Bag

So why can teachers teach everything from Shakespeare to the Pythagorean theorem and not personal finance?  Well, to start with, we have educational backgrounds in many of the subjects we teach.  My university’s Faulty of Education did not allow economics courses to count towards a “teachable major and minor.”  This means that you couldn’t get into the faculty if you focused on financial areas in school.  Furthermore, if you look at any poll of teachers, by far the weakest area overall is math skills.  Math teachers generally know something about geography, while humanities teachers generally avoid math like the plague.  You don’t have to be NASA employee (re: rocket scientist) to get the basic calculations required in personal finance, but it still helps to be comfortable with numbers.

 

Aren’t The Answers At The Back Anyway?

This lack of base knowledge could probably be remedied by a couple of hours with a textbook and the infamous “Teacher’s Edition,” but the problem runs deeper than that.  Teachers are the epitome of financially spoon-fed public employees.  This isn’t necessarily a bad thing or a good thing, but it is relevant to creating an effective financial literacy course.  It seems most teachers have realized they are better off having someone else worry about their finances, and that they are willing to give up a ton of personal choice in the name of paying someone else to take care of personal finance for them.  It’s not as if teachers don’t pay for their benefits, it’s that they don’t have a choice, so they can’t really make bad ones.

 

Seen Many Starving Teachers Lately?

To begin with, teachers make a wage that is far above the median in Canada.  My wage is public knowledge, and as a second year teacher I make about 53K a year.  In Manitoba, teachers with 10 years’ experience generally make around the 80K mark.  Anytime you make that much more than the average, life gets a little easier.  Going out for supper a couple of extra times a month, or buying a coffee everyday doesn’t have the same proportional effect on someone who is guaranteed a good salary.  Teachers also disproportionately end up marrying other professionals, which further augments the idea that personal finance gets easier with more discretionary income.  Most teachers also never worry about creating an “emergency fund” because our unions give us such unbelievable job security.  I have literally witnessed teachers who work maybe 1-1.5 hours a day, and they don’t even get talked to.  As long as they give students great marks, and don’t do anything terribly objectionable, they are fine to cross days off of the calendar and fly under the radar.  There are very few jobs that have that job security in the world.  How do we in good conscience tell kids to save money because they could lose their jobs some day when the thought rarely crosses most teachers’ minds?

The Drawbacks To Superb Benefits

The other reason that teachers can get away with ignoring their emergency funds is our excellent benefit packages.  If you get hurt (mentally or physically) you are often covered for 70-80% of your net wage (probably still more than the median wage for Canadians), plus you have a very large amount of sick days every year (I get 20).  Our benefit packages mean we don’t have to worry about comparing life insurance, or understanding whole vs term because it will always be there for us through our mandated union plan.  Not only that, but our premiums for extended Blue Cross, life insurance, dental insurance, and long term disability are all fairly low because of the huge number of us under the same plan.  This takes away a lot of the decisions that other people have to worry about, but it also makes us experience-poor in terms of material that can be drawn on for teaching a personal finance course.

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This is a post by Teacher Man from My University Money.  My awesome staff writer who has graduated from college more recently than me.  Enjoy!

Finding a career after graduation

If you were lucky (or smart enough) to choose a career path that was in demand while you were going through post-secondary education, then congratulations, you’re transition into the working world will be made a whole lot easier.  For those of us who chose to become “well-rounded” students and take courses of study that had a less-defined labour market (ie: we’re not really directly qualified for anything) the journey can be a little more interesting.  In my specific case I was in the position of being qualified for a very specific job (high school humanities teacher) that is not even remotely in demand.

Those Who Can’t Dig… Teach

Here is a great case study for post-post-secondary schooling.  I graduated with a B.A. and a Bachelor of Education (after 150 very long credit hours).  Several of my friends graduated with a Bachelor of Science with a major in Geological Sciences (B.Sc, G.Sc) (120 credit hours) and so I was privy to their after school plans.  I spent my whole last year in a fairly constant state of worry as more and more information and vague gossip about the job market poured into our tower of academia.  To put it mildly, the outlook was not good, specifically for someone like myself who is not bilingual, and has shied away from the sciences.  I studiously prepared for the shark tank of job market I was about to be released into (more on that later) and generally took nothing for granted.  My buddies on the other hand spent their whole last semester being wined and dined by big wigs from various mining companies.  Apparently this whole taking stuff out of the ground thing is pretty lucrative!  For them, finding a career or job after university was about choosing the path they wanted to start down within their industry.  Their options allowed them to pick the company that best fit their preferences.  As you might imagine, this was definitely different from my experience.

Wait, I Can’t Drop This and Take It Again Next Year?

The transition from being a student, to being a prospective employee was a humbling and scary for me.  I had interviewed for several summer jobs over the years, but my core identity revolved around me being a student and the subsequent structure that was a part of that life.  I knew that every fall school would commence, every spring it would let out, and in between, the exam and test dates were usually pretty similar year-in and year-out.  I figured out how to “play the game” that is post-secondary schooling, and once you have a pretty good grasp of how to achieve success in that arena, it is a pretty straight forward “rinse-and-repeat” process.  While the light at the end of the tunnel looks great when you’re striving to get there, when you’re suddenly thrown into it, everyone reacts differently.  For me, the loss of immediate control was very disorienting.  No longer was my success in my hands.  In school, I knew that if I followed a certain criteria set I would be rewarded.  This whole notion of trying to appeal to people (school principals and superintendents) that I had no connection to was not a good feeling for me.

That Shiny Diploma/Degree On Your Wall Isn’t That Unique

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