I loved college … at least the parts I still recall. But I remember the start of my career far less fondly. Frankly, I had no idea what to do in a job interview, other than shake hands and act serious, and I knew even less about what to do in my first job.
Thankfully, I did know what a 401k was and had the good sense to contribute aggressively as soon as I was eligible. But that was probably the only thing I actually got right the first time. Otherwise, my early career was a case study in getting experience through the school of hard knocks, all of which were self-inflicted.
Hopefully, you have more of a clue as a recent graduate than I did. I sincerely hope you do.
But even if you don’t have any clue what to do after graduation, the good news is that you’ll figure it out as you go. Just keep your chin up, and be prepared to learn from your mistakes.
All the same, I’d like to see you start on the right foot. So, in no particular order, here are a few career tips I’ve picked up along the way.
Tips for Starting Your First Job: Be Appropriately Audacious
Before your first interview, I strongly recommend you pick up a copy of Dale Carnegie’s classic How to Win Friends & Influence People and read it cover to cover.
Yes, it’s a cheesy-sounding title. But to date, it is the best book I have ever read on genuinely making people like you. That matters. Getting your first job is not simply about having the right degree or the right grade point average. The interviewer needs to believe that you’ll be able to work well with your would-be coworkers.
But once you’ve built that solid rapport and you have a job offer, don’t be afraid to push a little for a higher starting salary. They’re not going to rescind their offer or kick you out the door if you ask. The worst they can do is say no.
And believe me, that initial starting salary matters. If you allow yourself to get low-balled at the beginning, it can be hard to catch up without jumping ship to another company. And worse, you don’t want to start your career with a reputation as a doormat. So again, don’t be afraid to ask. The squeaky wheel gets the grease.
Tips for Starting Your First Job: Pay Yourself First
If your new employer offers a 401k plan, take advantage of it. At the very least, contribute whatever the minimum is to get full employer matching.
To get an idea of why it matters to start early, give the late Richard Russell’s classic article, “Rich Man, Poor Man,” a quick read. Russell covers two investors. The first started contributing $2,000 per year to an IRA at age 17 and then stopped contributing at age 26 after just seven years. The second investor started investing when the first investor stopped — at age 26 — but then continued to contribute $2,000 per year, every year, until the age of 65.
The first investor contributed a whopping total of $14,000, whereas the second contributed $80,000. But guess who had a larger account at age 65?
You guessed it. Despite contributing far less, the first investor entered retirement with a larger nest egg because he started earlier, and the magic of compounding was on his side.
So again, plow as much of your paycheck as possible into your 401k plan, and start as soon as you’re eligible.
Tips for Starting Your First Job: Bonus Income Isn’t a Guarantee
If a potential employer tries to entice you with the promise of a large annual bonus, remember that a bonus is exactly what it sounds like — it’s extra income based on performance and based on the company’s profitability and ability to pay.
If the company has a rough year, you’re not likely to get much of a bonus, no matter how well you perform your job.
Now, I’m not criticizing the concept of the bonus. I think a good bonus structure rewards high-performing employees and incentivizes hard work.
But the promise of a bonus is not the same as money in the bank.
Tips for Starting Your First Job: Benefits Matter … Somewhat
This advice might sound very contrary to everything you’ve heard until now, but hear me out. When you’re young and fresh out of school, benefits really don’t matter all that much.
And by the time you’re at a stage of life when they do matter — married with children — you will have likely switched jobs multiple times by then.
Think about it. You’re young and healthy. You rarely get sick. Does it really matter to you if your company offers a Cadillac health plan?
Obviously, there are exceptions. If you have preexisting medical conditions or if you’re expecting to start a family in the near future, a good health plan matters. A lot. But for the average recent graduate, the health plan really shouldn’t be the deciding factor in what job offer you accept.
If your employer offers multiple plans, your best option will likely be the cheapest plan with the highest deductible. And if the plan includes an option for a Health Savings Account (HSA), all the better. Contributing to an HSA can lower your tax bill and even act as a secondary retirement plan if it offers investment options.
Tips for Starting Your First Job: A Career Is Your Most Valued Investment
20 years ago, long before I starting managing money professionally, I remember a little nugget of wisdom my mother’s financial advisor Daniel gave me: “Your career is a far more important investment than any stock or bond I’ll ever buy for you.”
It was the late 1990s — at the tail end of the greatest stock market bubble in history — and I was a kid fresh out of college. The thought of grinding away in a cubicle for the next 40 years of my life was laughable to me. I was going to be a dot-com millionaire and retire by 30!
I often hear older men say that they’d love to go back in a time machine and kick their own asses for some of the stupid decisions they made in their youth. Well, I don’t have those urges because the 2000-2002 bear market did it for me.
In retrospect, it was fantastic timing. I had the get-rich-quick mentality bludgeoned out of me by a nasty bear market. It taught me discipline and humility. And from that point on, I took my career a lot more seriously.
Daniel was right. Getting serious about my career was the best investment I ever made. And by putting my nose to grindstone and getting to work, I advanced and managed to escape the greyish hell of the cubicle in just a few short years. I still work for a living, but today I have the freedom to make my own hours and work from anywhere in the world.
So again, work hard and advance your career. Yes, you’ll be a peon for a few years — just view it as a necessary stepping stone.
Charles Sizemore is the principal of Sizemore Capital, a wealth management firm in Dallas, Texas.