“If I had learned education I would not have had time to learn anything else.”
— Cornelius Vanderbilt
Recently I received a fairly disturbing text…
“Nobody has a proper job.”
This from a good friend who happened to be having dinner with 4 buddies all of whom I know personally. Just a few years ago, the thought of these well-educated, experienced, former Wall Street professionals being without work (or even the prospect thereof) was unthinkable.
“Seems the days of ‘proper jobs’ are dissolving right before our eyes…” I typed.
“Gone baby gone,” my buddy responded.
There are many reasons for this. Perhaps chief among them is the evolving (dissolving?) relationship between formal education and gainful employment. Over a year ago I tweeted a link to an opinion article from The Economist discussing the declining value of secondary education with respect to stable, long-term employment.
“…the demand for educated labour is being reconfigured by technology, in much the same way that the demand for agricultural labour was reconfigured in the 19th century and that for factory labour in the 20th. Computers can not only perform repetitive mental tasks much faster than human beings. They can also empower amateurs to do what professionals once did: why hire a flesh-and-blood accountant to complete your tax return when Turbotax (a software package) will do the job at a fraction of the cost? And the variety of jobs that computers can do is multiplying as programmers teach them to deal with tone and linguistic ambiguity.”
In other words, this is one of the most important issues facing the United States (and other developed nations). If current world leaders don’t get this right, we’ll likely experience the true nature of Darwinism… and much sooner than any of us expect.
For the sake of clarity and full disclosure, let me state that I’m not against formal education. Quite the opposite in fact as I have two post secondary degrees of my own. Further, I think that a love of learning and broad-based exposure to different ideas and disciplines is critical to the development, advancement and maintenance of a civilized society. It’s not a mistake that historically, inventions and new ways of doing things have accelerated in tandem with the spread of ideas through books and other means of idea sharing. Formal education was simply an attempt to standardize that process.
The problem (as I see it) is that the years of employers pursuing university students with liberal arts educations has reached and passed its nadir. Innovation and global competition have forced many employers to pursue students with more focused resumes as opposed to hiring “good athletes” that can be taught the employer’s business. Further still, jobs once used as entry level positions have been all but automated, relocated and/or eradicated.
The Problem Graduates
This is not just a problem for undergraduate students. Graduates of professional programs are experiencing much the same dilemma.
Historically, law firms have hired legions of freshly minted lawyers comfortable in the knowledge that the cream would rise to the top and that each class would yield a few potential revenue producers to consider for partnership. The introduction of new technology and the global economic contraction have done much to undress that model and expose its flaws. Big firms no longer have the luxury of employing large groups of associates and busying them with discovery and research… not when their competitors are taking advantage of technological solutions and passing the savings on to ever more cost-conscious clients.
The phenomenon is not limited to the practice of big firm law.
- Small firms and Sole Proprietorships have to contend with shrinking revenue piles as a result of DIY alternatives such as Legal Zoom.
- Turbo Tax has been encroaching on accounting firms for years now.
- Architects have seen a decline in small residential jobs as more and more potential clients choose the DIY route using widely available software.
- Discount/Electronic Brokerage has decimated the margins of full service brokerage firms.
These changes along with an explosion of applicants in the labor pool, have led employers to look at prospective employees with an increasingly critical eye. They have become far more interested in employees that can help fill a critical need immediately or, at minimum, be additive in very short order. As a result, a lateral hire associate with a couple of years of experience on another firm’s dime will have a better chance at new slots than the law student who spent her third year developing an expertise (and relationships) in an emerging technological space or on a new securities issue who will be in a much better position (all else equal) than the 3rd year law student who spent the year lowering her golf handicap.
Yeah OK, So What Mr. Trader?
What does all of this mean as a practical matter? Is the liberal arts education another casualty of societal “advancement”?
I think not.
However, I do think that learning for the sake of learning will be more and more relegated (or elevated depending on your perspective) to personal tastes and effort as opposed to remaining an institutional objective.
Critical thinking is likely to become a requirement of secondary schools as opposed to their end goal. Today’s student must become more focused on a specific career and sooner, rather than adhering to the old advice suggesting he “has time to figure it all out.” Global competition for “brain jobs” is reducing that time window opening to barely a slit at an alarming rate.
So why have I written about this on a trading related blog? At the risk of turning this post into an infomercial, its simple… learning to trade can reduce the pressure on the “how to earn a living” decision. Further, it opens the range of career possibilities by helping to circumvent the compensation question at least partially anyway. Imagine how many more motivated teachers we would have if an individual knew he could add 20 or 30 thousand dollars to his annual teacher earnings each summer by trading instead of working two traditional jobs.
Additionally, learning how to trade and developing proficiency at it can finally help put retirement income angst to rest. As short term traders know, 5% 20 times is worth far more than 100% 1 time.
Finally, although it almost never appears on the “best of” lists, trading is one of (if not the) best side hustle opportunities you can find.
To be clear, trading is certainly not for everyone… and I would never suggest as much. That said, it’s definitely a worthwhile addition to the mix of considerations in this time of economic contraction and declining employment opportunities. Do yourself a favor and give it a look. At minimum, you may learn a better way of looking at your personal and retirement savings/investments. On the other hand, you might just discover a new career direction.
This post was originally published on TheArtofSimpleTrading.com 20 December 2012. While we’ve clearly emerged from the economic contraction that was still in full force at the time of publication, most of the points made remain valid.