Don't hinge Your Career Earnings on Technical Skills Alone
Why relying on your technical skills to earn you a living throughout your career is dangerous; The importance of acquiring a financial education.
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There is this school of thought that says that kids coming out of secondary schools should go do an undergraduate degree in Science, Technology, Engineering and Mathematics (STEM). Some of the reasons laid out by the study STEM school of thought are:
The world economy depends on STEM.
There will always be jobs for STEM graduates.
There are millions of unfilled STEM jobs.
STEM jobs pay more on average than non STEM jobs.
All nice and good one might say. However, the goal of this post is not to focus on what STEM is and on what benefits it presents - I studied computer science - but to make the case that one must not rely solely on their technical skills developed doing a STEM degree to make a living. One must also add financial education to their arsenal.
Samuel Andrews, Credited with creating Fractional Distillation and Co founder of Standard Oil.
Samuel Andrews, a brilliant chemist and inventor born in 1836 and died in 1904, was one of the founding partners of Standard Oil. He was the technical brain behind John D Rockefeller's oil business and a founding partner of Standard oil. The brain behind a lot of the early technical innovations in oil refining that allowed Standard oil to quickly dominate the oil refining business in the 1870s.
In 1874, a new technician started to make waves within Standard oil. His name was Ambrose McGregor. Rockefeller promoted McGregor, age 32, to the role of Superintendent of all six Standards Oil’s refineries and manufacturing operations in Cleveland. This was an indirect message to Samuel that his inventions were no longer valued and that McGregor was the person with new technical ideas; Samuel was the past and McGregor the future.
Rockefeller and Samuel eventually clashed in 1878 which lead to Samuel wanting out of the business. Rockefeller bought up Samuel's shares in the Standard Oil for one million dollars. The liquidity event from this sale enabled Samuel to retire rich and live out the rest of his life.
Can you imagine what would have happened to McGregor if he had no equity in the business? He would have probably left empty handed and struggled to get work. Not because he wasn’t brilliant but because he would have had to come up with something new to make him competitive. Especially as Standard oil was the biggest refinery in the world in the late 19th century and thoroughly dominated the American oil market.
For a counter example to Samuel Andrews, Enter the world Of Nikola Tesla. The man who mastered electricity and illuminated its secrets to the world
Nikola Tesla, born on 10th July 1856 and died on 7th January, 1943, was one of the greatest known geniuses to have walked upon earth in the 20th century. Tesla was an inventor, a discoverer of new principles and an enigma.
In 1884, after a disappointing incident - not offered the money promised to him to fix the power plants at the Strassburg railroad - while working for Continental Edison Company in Paris, Tesla was advised by Charles Batchelor to move to America and work for Thomas Edison. Tesla at this stage was not well known and in his late twenties. Tesla promptly left for America and arrived in New York where Edison offered him a job based on Batchelor’s letter of recommendation.
Within a few months working under Edison in New York, Tesla had discovered ways in which dynamos could be improved to operate efficiently. Like most entrepreneurs who love increasing output and lowering costs of operation, Edison was intrigued at this possibility and offered Tesla fifty thousand dollars if Tesla succeeded in improving the design.
In the coming months, Tesla achieved the outcome he had set out to achieve. He had improved the dynamos such that they could power machines at lower costs and increased output. Tesla asked Edison to pay the fifty thousand dollars that Edison had promised if Tesla was successful in his task. Edison’s response was
Tesla, you don’t understand our America humour
Tesla was incredibly disgusted. Here he was being refused what had been promised him, after spending months working overtime and inventing new technologies. This led to Tesla resigning from his job immediately in early 1885.
He had built a reputation working for Edison and a group of promoters in conjunction with Tesla formed a new company. He was tasked with developing a practical arc light to illuminate streets and factories. He achieved his objective under a year, creating various inventions - which were patented - during this period. Incredibly for the second time under two years in America, he was cheated from a financial perspective. When the company was formed, his compensation was agreed to be in the form of equity. However, once he had achieved the development of the arc light, he was pushed out of the company.
For all of Tesla’s technical brilliance, he was very non commercially aware. His inventions generated a lot of money for others while he spent his later part of his life broke. A little bit of financial education and business knowledge might have saved him a lot of pain.
I provided the two exhibits above to lead to the raison d’etre of this post
This leads me to the raison d’etre of this post. As a technical person in your career, you must not rely on your technical brilliance or rest on your laurels. You must acquire some financial education. There is a tendency for technical people to think that they are the best; That they will always be on top; That will be always be creative; That their inventions won’t be usurped quickly by newer inventions. However, history says otherwise. Life was quite unpleasant to Tesla; He died alone and poor depending on handouts from former associates. A tragic end for one the most creative minds of the early twentieth century.
What can be done you may ask? I suggest that you acquire some financial education; that you invest your surplus earnings into other asset classes to enable you grow your equity to either earn consistent cashflow or provide liquidity events. To use a scenario, assuming that you’re a software engineer working at one of Facebook|Apple|Amazon|Netflix|Google -also known as FAANG- and earning $300,000 a year gross, I suggest that you take your surplus cash and invest it. The key theme here is that you grow other lines of revenue for yourself. That you don't have only one source of revenue. Not every one is going to be a founding partner at a firm like Samuel Andrews but most highly technical people especially in the west can invest in other ventures.
I want to hear what you think in the comments section below. Do you agree with the theme of this post? Do you know about others that have had similar experiences to Samuel Andrews or Nikola Tesla? If you invest your surplus income, how do you do it? I look forward to seeing your comments in the comments section. Don’t forget to like the post.
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