In 1978, Congress passed the Revenue Act, which included a provision that gave employees a tax-free way to defer compensation from bonuses or stock options. The law went into effect on January 1, 1980. This created an opportunity for employers to create
In 1981, the IRS issued rules that allowed employees to contribute to their 401(k) plans through salary deductions, which jump-started the widespread roll-out of 401(k) plans in the early 1980s.
By 1983, nearly half of all companies offered, or considered offering, a 401(k) plan. This provided companies with a cheaper alternative to pensions.
I have to believe the 1980s is when the phrase “diversify your portfolio” hit mainstream America. It’s been an important concept as individuals and families tried to make sense of this new retirement world. The basic advice has been:
- The sooner you start investing the better. Compound interest is a beautiful thing.
- You can be riskier early in your career vs. later. This means you’ll want to hold more stocks in your 20s, 30s, 40, and 50s to take advantage of a higher yield, but minimize risk in your 60s and 70s via bonds.
- Even within stocks, you should spread your investments across
cap, mid cap, and small cap companies in both the U.S. and globally to further mitigate risk. large
Now I’m not a financial advisor, and I’m not here to give you financial advice (nor should you listen to me on the matter). I’m also not trying to give you a history lesson of the 401K. I pulled the above information from CNBC, so feel free to read more here if you’re interested though.
However, I think the lesson of diversifying your financial portfolio in the 20th century can be applied to how you approach your career in the 21st century.
Say what? Keep reading…
The Times They Are a Changin’
The world is changing. Fast. And I have no reason to think it’s going to slow down any time soon. In fact, I think the speed is only going to accelerate. For example, I work in an industry that isn’t taught in today’s colleges and universities. Yet, somehow the price tag of college keeps going up? (I’ll write more about the issues of higher education later.)
It’s also why I think those of us in
The freelancer model is becoming more and more popular. Everything operates online now, which creates new opportunities to make money and increase your flexibility e.g. Etsy, Amazon marketplace, etc. You can decide at any moment to get in your car, drive around, pick people up and make money. You can start a blog and show ads to make money while you sleep. (Quick plug for my wife’s amazing food blog: aimeemars.com).
If you’re like me, this is both exciting and terrifying at the same time.
Why You Should Diversify Your Career Portfolio
In the 21st century, more than ever, You’re the CEO of Your Career. I hope you’re reading this with a sweet 9-5 gig, or you’re an entrepreneur running a successful business. But maybe you’re in a rut. Maybe your job sucks and you feel rudderless. Whatever your situation is, the below advice applies to you.
And let’s be honest…help is not on the way. If you’re on the back end of your career, and you think the government is going to help you learn new skills, find you a job, or make you happy – it’s just not going to happen. Despite its best efforts, the government has failed at this time and time again. So you need to look within and be accountable for your future. The same with recent college graduates. It’s astonishing how many clients find six weeks working with me more valuable than four years at an ivy league school. It’s not me necessarily; it’s just that common sense, accountability, and practical advice go a long way.
How to Diversify Your Career Portfolio
I break down career diversification into three parts:
- Financial stability
- Multiple revenue streams (Side Hustle)
Lets dig into each one.
A Diverse Skill Set
Over the course of your
After doing all the right things in college (strong GPA, internships, sports, student government, etc.), I was struggling to find a job in New York City. While I received offers from companies in my hometown and near my college, it was NYC or bust for me.
Finally, I got a job at Pfizer working in the marketing operations department. I studied marketing in college, so this was in my wheelhouse of interest and capability. In reality, I was a
My next stop was Opal Financial Group, a financial services company that hosted financial conferences around the world focused on foreign exchange, alternative investments, real estate, etc. My job was to ensure we had sponsors at each conference. Highlights included learning a lot about event marketing, financial products, and I got to visit Monte Carlo! Again, I made a pitiful salary and the work environment was insane. I’m not kidding.
After working at a startup, I wanted to stay in marketing, but move to back to a larger company with more stability. I soon joined the photo assignment desk at AP Images (Associated Press). It wasn’t exactly the gig I wanted, but the salary was marginally better and it was cool to learn the ins and outs of the photo news business. Plus, I really liked the team I worked with.
After two years, I was promoted to Partner Manager. (Side note: It’s perfectly fine to be promoted every 2-3 years. Your overzealousness in seeking a promotion every 12 months is exhausting to your manager. 12 months is the minimum in which you can even show whether or not you’re competent in a role. Remember, there’s a difference between being patient and being stupid.) This was a really cool role because I built a nice multi-million dollar business from scratch. The gist is we would go out to other photo agencies and ask them to put their photos on apimages.com to bolster the AP collection and split a rev share on each photo sold. It was a cool role because I was doing business development, sales, marketing, client relations, financial analysis and forecasting, royalty payments, etc. Plus, I worked cross-functionally with many, many parts of the AP. Partners included: NBC Universal, NFL, Kyodo News, Agencia Estado, etc.
Eventually, my growth stagnated, my compensation increases weren’t on par with my performance, and my VP was a narcissist. On the outside, it seemed like a great gig and friends and family told me to stick it out and things would get better. I thought I was being patient, but in reality, I was being stupid. I was at the Associated Press for five years, but I should have left after three. I was miserable and I needed to make a change.
Quick tip: This is why investing in a career coach and listening to your gut is important. Your friends and family mean well, but they don’t really know your situation. Most people have no idea what they’re doing in their own careers and probably miserable on their own job. Plus, your family will ultimately project biases on you whether they know it or not. It’d be like going to an overweight trainer to lose weight – no thanks. I was a fool to some for leaving the AP, then a genius to others when things panned out a couple years later.
At this point in my career, I was pretty business savvy and good at working with clients. I had also shown flashes of strong leadership and public speaking skills. But I wasn’t technical, which was something I wanted to add to my tool belt.
After a long, arduous process I joined AppNexus as a Demand Solutions Specialist, which is easily the worst job title in the history of ad tech (it quickly morphed into a Technical Account Manager role). Again, on paper, this career move seemed like a step back. However, I had faith in myself that if I took 1-2 steps back, I could take 4-5 steps forward by working my tail off.
Every day for at least three months, I would get to the office at 8 AM before everyone else, pull out a notebook and write, “I will succeed at AppNexus” 10 times. Every single day. I honestly think it’s the only way I survived.
Eventually I became a pretty good Technical Account Manager. I wasn’t the most technical, nor the most outgoing. But I was well rounded. Once that happened, I was able to bring some of my other strengths to the table: coaching and mentoring, client-facing skills, public speaking, collaborating with executives, common sense, intellectual
From there, I became a team
At this point in my career, I’d say the top 10+ skills I possess are:
- Hiring rock stars at scale
- Career Coaching
- Public Speaking
- Customer Service
- Client Strategy (service models)
- Client Training
- Sales Engineering
- Cross-Functional Collaboration
- Sales & Marketing
- Business Development
On any given day, I’m using several of these skills. While my sweet spot is leadership and management right now, I can double down on any of the above throughout my career if I want or need to.
By the way, I picked up some bartending skills when I was working at the AP and we needed some extra cash while my wife went all-in on her fashion company and we dropped to one income. If I ever lost my job and push came to shove, I could always walk into a restaurant and
Taking an inventory of my skills was a good exercise, and I recommend you do the same. I bet you have more than you think you do. Is there anything you think you’re missing? A successful career strikes the right balance of being able to go deep in 3-4 areas, but diverse enough that you handle situations outside of your wheelhouse. A girl on my team wants to be a COO someday, so she left a services role and joined the product team. She’s intentionally obtaining skills that will help her reach her dream role.
While you’re investing in yourself by growing and improving your skills, you also want to put yourself on solid financial footing. Moving away from a paycheck-to-paycheck lifestyle and investing in a safety net and your future is really important for your career.
My favorite book store in the world is the Barnes and Noble on 86th street in Manhattan. When my wife and I lived on the Upper East side, we spent a ton of time there reading and drinking coffee. The self-help section is also comically large, which makes me think people are buying self-help books but not executing on what’s in them.
You don’t need to read 50 books on finance or pay attention to the stock market every day to retire with a million dollars. You only need to read three books by three people and do what they say. If you ever take any advice for me, this should be it. Just pay attention to these three people, do what they say, and you’ll be financially free. I guarantee it.
- Dave Ramsey. Dave provides you with a framework for how to become financially free. Specifically, his “7 Baby Steps” will walk you through going from debt to having enough money for retirement and giving money to those who need it more than you do. The thing I love most about Dave is he’s a no-nonsense guy who has made two significant financial mistakes in his own life, and he’s just teaching us what he learned himself. Pick up his book, “The Total Money Makeover” and get started on your $1,000 emergency fund asap.
- Ramit Sethi. Ramit’s message is really catered to those in their 20s and 30s, and the thing I love about his message is his philosophy on money. Ramit doesn’t get stressed out about $5 lattes and focuses more on getting the big things right: how to negotiate your salary, your rent, the importance of doing your research, and why home ownership isn’t all its cracked up to be, etc. He’s also hilarious. Check out his book, “I Will Teach You to be Rich” to learn more.
- Tony Robbins. Yes, I’m telling you Tony Robbins can help you with your investing strategy. In Tony’s book, “Money Master the Game” he breaks down how Wall St. has rigged the system against the average investor and what you can do about it. A lot of people prefer to whine about the injustices in the world, but not Tony. He wants you to learn how the game is played and do your best in it. For example, Tony discusses why it’s important to ensure your financial advisor is a fiduciary because the average advisor isn’t legally bound to doing what’s in your best interest unless they are one. Crazy, right?
Quick note: The above advisers occasionally contradict each other, but I trust your ability to decipher what works best for you based on your own unique situation. When in doubt, I generally stick with Dave’s philosophy. I encourage you to add all three to your social media outlets as well for daily advice and
A reasonable question at this point is, “what does this have to do with my career?” My firm belief is everything is interrelated when it comes to your career, including your finances. If you’re $100,000 in debt, it’s not like you walk into work and forget about that. It creates a stress that looms over you and mitigates your ability to take rational risks in your career.
Here are a few financial things my wife and I did that helped us personally and professionally:
- Debt-free. My wife and have zero debt right now, and it’s a liberating feeling. I’d much rather own a GMC than lease aka “fleece” a BMW. I should note this was a long haul, particularly after a decade of stupidity in my 20s. But I wouldn’t have changed the grind for anything because I’m that much more appreciative now.
- Built a three-month emergency fund. It’s amazing to know that if something bad hits us, or I lost my job, or something else…we have a nest egg to pull from. Again, the anxiety over having debt and very little margin to operate with was stressful for a long time.
- Not buying a house. It’s astonishing how emotional people are when it comes to making the most expensive investment they’ll make in their lives. My wife and I have done a good job taking the emotion out of this purchase and have been patiently saving for our 20% downpayment and waiting for a red hot real estate market to cool. This is despite going to birthday parties and barbeques for three years answering the question, “when are you guys buying?” Stop worrying about what other people think, and do what is best for you. We’re slated to buy a house we’ll live in for 10+ years, and we’re doing it within our means (25% of our net income). Renting is not a bad thing, and America’s dream of home ownership is misguided at best. Rent until you’re really ready to buy a house and all that comes with it. Most people think if I bought my house for $500K and sold it for $550K five years later, they made $50K. WRONG. They’re not including taxes, fees, maintenance, etc.
Get out of debt, build up an emergency fund, save aggressively for retirement, and don’t lose your mind when you decide to buy a house. All of these things will help your career out immensely. You’ll be able to make more (thoughtful) risks and handle the inevitable blows that will come your way over a 40-year career.
Multiple Revenue Streams
This is the top of the pyramid because it’s the hardest part of diversifying your career portfolio. Just like our parents needed to diversify their financial portfolios, I think we need to take it a step further and try to diversify our revenue streams.
Enter the side hustle. There’s probably something you are passionate about and/or good at outside of your day job. Perhaps it’s something you could spend 5-10 hours a week to earn a little money on the side. For me, it’s career coaching. My entire side business stems from being passionate about all things career-related, making mistakes in my own career, learning from them, a passion for
It’s easier than ever these days to make money. You could teach a class online, drive for Uber or Lyft, sell products on Etsy, or create a YouTube channel and make money from ads, self-publish a book, or even get into real estate. The list could go on-and-on. I recommend taking an hour this weekend to get a blank sheet of paper with a coffee and doing a complete brain dump on any good, silly, or dumb idea that comes into your head to make money. Then get started on it next week. You never know what can happen.
Creating a side hustle can be fun, give you independence, creates another way to make money, serves as a backup should you ever lose your day job, and it could grow into a full-time business. However, there’s no need to put that pressure on yourself. Again, j
The 21st century is already proving to be a lot different than the 20th century. Jobs, careers, and industries are changing fast(er). More than ever, you need to be the CEO of your career. Expecting the best and preparing for the worst provides peace of mind in the present and future no matter what will happen to you.
Finally, the best career investment of all is the one you make in yourself. Keep getting better, be patient but not stupid, stay away from debt, build a rainy day fund, maximize your talents into multiple revenue streams, and enjoy the process – not just the accomplishments.
If you feel in over your head, it’s OK. I know that feeling too. But if I can overcome many of the mistakes I made in my career, I know you can too.
Drop me a comment. I’d love to get your feedback on this post – whether it’s good or constructive.
Thanks for reading,