If you are patient and read back far enough in this blog, you’ll see that it all got started when this Chipamogli here was living in South America, more specifically, in Santiago de Chile. While there I had the great idea to climb an active volcano called Villarica in the southern part of the country. About halfway up I ran out of steam and went back down.
Anyway… it has since had a big eruption! I wonder if it’s now easier to climb.
I have a friend who is struggling to find a job in his field. He is hard working and intelligent, but like many young people today despite graduating from a good program he has had no luck. It pains me to watch him struggle through volunteer positions which he hopes will boost his resume while he slides further into debt.
My friend, let’s call him G, knows who the culprit is: it’s the government! Here is his reasoning…
In Canada, educational institutions are heavily subsidized by the government. The government therefore has a fair amount of control over the types and sizes of programs offered. The government also has access to information about the economy and what jobs are in demand.
G’s suggestion is this: the government should do some research and try to get students into fields that will actually lead to jobs.
But that’s not all. It should severely limit funding to programs that do not lead to jobs. Many programs, such as in the humanities for instance, should be shrunk to only allow a few top students to enter, which hopefully means they will get the few available jobs once they are done.
“But it’s not like today everyone can study whatever they want. Universities still have entrance requirements and a limited number of spaces. Besides, shouldn’t a student choose for themselves what to study?” I asked.
“Come on, how many 18-year-olds have a clue about what they should study and how that will affect their future?” He replied.
I see his point but I don’t know how comfortable I am with it. On the one hand, universities respond to market demand. If enough students want to get a degree in basket weaving to make it profitable for a school to offer that program then that’s what will be offered, and then lots of people will graduate with a nice piece of paper that likely won’t get them anywhere (not hating on basket weaving here, btw). No one is warning these students about their debt-filled future. One can say that young people are being exploited.
On the other hand, it seems to me G is overly optimistic about the ability of government to do things in an intelligent way. Even if the government decided to take on this endeavour, I highly doubt it would be successful. The government is too big and complex and has too many people with vested interest in different things. I simply don’t trust ’em 😉
Besides, even at 18 I would’ve been pretty insulted if someone told me I was too young to have a clue. Okay, so I probably didn’t have much of a clue but not all 18 year-olds are clueless.
Furthermore, if we’re going to put limits on the choices of students, why not control other groups as well? For example, the government can set laws to regulate banks and the credit industry. Why not stop allowing people to take on such big mortgages or credit card debt? At least student debt is “legit”, as opposed to people buying random crap they can’t afford. In fact, why doesn’t the government create laws to protect us from our stupidity in all aspects of our lives?
I think at the end of the day, we can blame the government and whoever else for not getting what we want. But at some point we need to start making the best decisions for ourselves despite the obstacles and whatever life throws at us, and not expect any government help. I realize that’s hard when one’s down on their luck, though. I hope my friend G will find a job that makes him happy soon.
Update: G found a job, so it’s all good 🙂
So this weekend Toronto got some snow and I was thinking I’d retrace the route I took when Toronto got some rain…
I really should visit this place more often!
A few years ago I stumbled upon a blog about financial independence. I can’t quite remember what led me there… maybe I was looking for tips about save money, or maybe I was unhappy with my work situation and was trying to see if anyone out there felt the same way.
In his blog “Early Retirement Extreme“, Jacob Fisker writes about the nature of work and its affect on our lives, as well as other finance topics. Jacob has indeed made some extreme (to some) choices: he drastically reduced his living expenses and built up a DIY skill set to be able to live off wisely-invested savings and not need a job. He was in his early thirties at the time.
He later admits that using the term “retirement” in the blog name was unfortunate:
“Apparently, for some, the word retirement really does mean moving to Florida, taking one’s medicine at regular intervals, and ABSOLUTELY not accepting money although consulting is okay(!)”
Jacob’s “retirement” was actually quite active. One of the reasons he did it was not to simply retire but also because he liked solving complex problems. Could he really make this happen? Well he did, but I guess after a while he got bored. He is some sort of math genius so when he received an interesting enough job offer he decided to take it.
Even though Jacob retired from retirement, his blog still has quite a following. Yesterday I was fortunate to go to the Toronto meetup for ERE readers. It was great to talk about one of my favourite topics with like-minded individuals!
All were practicing various levels of frugality and DIY-ness, and saving at least half of their income. And all were proof it was possible to lead good, happy lives, on averge incomes with high savings levels, even with dependent children.
We hung out on the PATH, the underground walkway network in downtown Toronto.
One thing I need to work on is my investing knowledge. Yesterday we talked about the “Permanent Portfolio“, a way to allocate assets that not only allows for growth but also protects against uncertainty. A fellow reader sent me some ETF suggestions that I can select to be part of this portfolio.
It was funny how we all had a “financial independence” age in mind. One reader was telling us how in his household he’s the one in charge of day-to-day finances, and when he showed his wife their net worth she was shocked by how much they saved! Another reader said Jacob’s writing completely changed his outlook on life.
Do members of your family lend money to each other, or is it more like a gift because you know you’ll never get it back?
In my family our finances are all separate. I have my life and my parents have theirs. I lived at home rent free when I went to university but I did pay for my tuition by myself. I thought that was pretty normal but I later realized that it’s not uncommon to have different arrangements.
I have a friend whose parents paid for all her expenses, including a vehicle and anything else she needed. Once she graduated and got a job, she paid her parents back for the car and gave them most if not all of her paycheque. They also bought a property together: the parents took care of the downpayment and she covers the mortgage and other ongoing expenses.
A few years ago I needed a bit of a cushion after a large purchase that cleaned out my bank account. I borrowed money from my parents and they gave me five years to pay them back. With interest! I wrote them a bunch of post-dated cheques that they’ve been depositing monthly. I think that’s pretty reasonable, but to some people it might look strange.
The recent economic downturn triggered an interesting movement. This article describes how a number of people decided that they are better off broke. While there always were a few outliers, or hippies, or whatever you wish to call them, there must be enough people now that these ideas warrant attention.
“[They] not only eschew [luxuries], they’ve consciously chosen to both earn and spend far below their capabilities. For them, living on the economic edge is neither a brutal nor shameful experience. It’s a preference.”
Or maybe this is not new at all. Lots of people all throughout civilization focused on things other than making and spending as much money as possible, but in North America we are so immersed in our consumer culture that we haven’t been paying attention.
One of my friends works at a company where the employees take a lot of… abuse, let’s say. They work long hours and are not spoken to kindly by their bosses when things beyond the employees’ control are not done on time and in the way the bosses imagined. One position in particular has seen a lot of turnover. They just can’t keep anyone there, as everyone either quits from the pressure or is fired when they don’t perform to the impossible standard set by management.
While my friend doesn’t like it, she’s not too worried and simply continues to look for other options. She and her husband paid off their home so she’s not feeling a lot of pressure. She tells me things are not the same for her coworker. At a more senior position he gets to take a lot of the heat on behalf of the team, and he doesn’t handle it so well.
“He has a big mortgage and a kid in private school, so he’s stuck”. She tells me.
****
I saw another friend of mine recently… and somehow we got onto the topic of real estate prices. He has recently renovated his condo and was saying he was totally happy with his small space. “It’s incredible how people keep getting the biggest houses they can get loans for… instead of looking at the smallest houses they can get away with!”
How nice to hear this voice of reason.
****
In my opinion, there is no need to feel stuck. But we have to put a lot of thought into how we want to arrange our lives and what is truly important.
I have a good friend who immigrated to Canada a few years ago. She came from a place in Latin America where the economy is not highly developed and from which many people try to emigrate to find more safety and stability. Given that she spent parts of her adulthood in both countries she is able to make a comparison.
She says that compared to her home country, people here in Canada are very isolated. They have a hard time forming families and must rely on immigrants to maintain the population. And the reason, according to her, is our culture…. in her country, the culture encourages living in large groups and being very social. It also seems easier for young people to connect, marry, and have children.
I, too, spent some time in Latin America. But I lived in Chile, a country that in the last 20 years has been developing quite quickly. Although still traditional, life for many Chileans is changing. People are earning more money and shopping more. The malls are packed and the roads are full of big cars. Personal debt is sky rocketing. Already there are reports of an aging population and educated people having fewer children.
I think if my friend’s country becomes developed, the people within it, too, will change. So is it really the culture? Or is there something about economic development that affects people in some way? I think it’s more of the latter. Or maybe a mix. Who knows? 🙂
What were your expectations when you were a student? Did you think that once you graduated you’d be able to find an awesome job that will set you on the path to your dream life?
When I was in university I attended presentations by visiting recruiters. They wanted to find the “best and brightest” and did their spiel to sell their companies. They talked about the perks, the great training, and the exciting opportunities.
Some time later I was seated around a table at a social event, and the discussion turned to how the “real world” actually wasn’t what the recruiters promised. Many of us newly minted professionals were working long hours for low pay, and were not doing very exciting tasks. We realized not all companies were willing to give us that many opportunities so we needed to shuffle and figure things out on our own. Many of us were not happy with where we were.
“I can’t believe you guys are doing that to yourselves,” said one young lady, “I wouldn’t work in a job where I’m not happy”. Someone else at the table explained that sometimes you have to go through an unpleasant stage in order to get somewhere good later.
This lady left numerous jobs because she didn’t like being seated for 8 hours a day, or she didn’t like to be standing/moving around, or she decided she no longer liked what she studied in university so she moved away from the field… Lucky for her she was able to rely on the kindness of friends and family to help her out when she needed something she couldn’t afford.
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I had this classmate in university. Let’s call him S. After graduating I ran into S on the train. I asked if he was now working full time. He said “What? Working full time is so unhealthy for you, I might as well take up smoking!”
***
Not everyone is into “moving up in the world”: working, getting a raise, buying a nice car, house, etc. The effects of stress, sedentary lifestyle, and other health-decreasing realities of the working world are well documented. I’m still undecided about exactly where my career is going, but long hours and a high amount of stress are simply not worth it for me.
But I don’t think it has to be this gloomy… Imagine you can diversify your income and create cash flow from passive sources. In your years of hard work you put enough aside to buy an income-earning rental property or a strong investment portfolio. In the future, you won’t need to work as much, or as hard.
It’s not just about not wanting to work. Anything can happen: illness, obsolescence of your industry/skills, lay offs at inopportune times, loss of energy that comes with aging… Have I become such a radical thinker? I don’t consider myself as such, but I look around and it seems everyone thinks things will be the way they are forever. Or maybe they think things will work out somehow, and the government will take care of us?
To be honest, I have no problem with someone who chooses to opt out. However, if this is done too early they will never get to a strong passive income stage. Which is also fine, as long as they are not being a burden on anyone else (whether it’s their aging parents or society in general).
Toronto can get rained on pretty heavily but that doesn’t mean you have to stay home! I still ventured outside yesterday in the rain… but it helped that it wasn’t cold.
Actually, even if it is cold, there are cool indoor things to see. I decided to head over to the Allan Gardens Conservatory located on Jarvis St, between Carlton St and Gerrard St East.
On the way home I stopped by the new Loblaws. Well it’s a few years old now, but it’s inside the Maple Leaf Gardens, the building where the historical hockey arena was located. It’s a really nice grocery store now and they’ve maintained the historic significance by marking on the floor where centre ice used to be, and on one of the walls they attached a big maple leaf made out of blue arena chairs.
Live Free Chipamogli 