In my last column I discussed Warren Buffett’s advice to young people that “they follow their passion” in terms of finding a fulfilling occupation. He has often said he pities people who say “I’m just going to do this job for the next ten years—and then I’ll do something I truly love.” Buffett has remarked that life is too short not to pursue your passion or do something just for the money. However, money and paying your bills are both realities.
Some may dismiss Buffett, saying it is easy for him to give such advice since his net worth is more than $53 billion. Or, his advice gets misinterpreted as people think “Oh, Buffett followed his passion…and now he is worth $53 billion—I’ll follow my passion and be mega rich too.”
Unfortunately, that is not the way the world works. The “follow your passion” statement is not about money. It references back to knowing how each of us are uniquely built and then following a path that best utilizes your specific skill set. This does not mean you were necessarily created to make lots of money.
If you obtain aptitude testing at the Johnson O’Connor Research Foundation and it tells you to be an engineer, then most likely in today’s world your skill set will be in high demand. According to Salary.com seven of the top ten starting salaries are for engineers—with average beginning pay of more than $63,000 per year. The top category goes to Petroleum Engineers who command a whopping $93,500 in starting pay.
However, should all college kids become engineers? Obviously not. As a kid, I was great at handing my father, the electrical engineer, tools on weekend projects—but that was the extent of my engineering abilities. I was great at taking things apart—but rarely did they ever get put back together correctly.
Education, art and communications are on the other end of the pay spectrum. If your skill set says you were put on the face of the earth to be a public school teacher, graphic designer, news reporter or school counselor then your passion may require you to live within a tighter budget. These occupations often pay one third to one half that of a starting engineer.
Does this mean lower paying occupations should be avoided? No–it just requires greater discipline.
Many of today’s problems come from worrying about what your neighbor has or what they are doing. In discussing wealth and lifestyles, Buffett has jokingly said that envy is one sin you’ll have no fun at. Furthermore, after twenty years in the financial services industry you’d be very surprised to see who has real wealth and who does not. Looks can be very deceiving and often the people with high net worth’s are not the ones with the highest salaries.
Instead, it is a matter of discipline.
Understanding this, recognize that you are in control of your life—not your neighbors life. Focus on the things that are within your control.
Live below your means. Just because some ad tells you to buy a car capable of racing down Highway 59 at 800 miles an hour, doesn’t mean you should. As you are racing down the roads of life, strange and unexpected things will happen. If you live below your means you have greater flexibility to deal with life’s many issues.
Save and invest in all markets. I have no idea what the financial markets will bring tomorrow, next week or next year. However, I believe in the power of compound interest and capitalism. These are the concepts that allow us to accrue financial wealth over long periods of time–no matter what our given occupation may be.
Finally, as a society we are all living longer. It stands to reason that we should also work longer if physically able. I cannot imagine retirement prior to age 75. If you are going to do something for fifty years, it needs to be something you are truly passionate about.
Dave Sather is a Victoria Certified Financial Planner™ and owner of Sather Financial Group. His column, Money Matters, publishes every other Wednesday.
Originally published June 11, 2013 at 8:33 p.m., updated June 11, 2013 at 8:33 p.m. Victoria Advocate