Investing in oneself

*Amanda Morrall talks to Heather Carpenter about how to grow your career capital.

As employees, we tend to think of ourselves as cogs in a machine over which we have no control. We clock the hours, cash the paycheque, spend and repeat the monthly cycle until the magic age of retirement, then wonder where it all went - both the time and money.

While it is true that basic living costs are a voracious consumer of our hard-earned cash, a job is more than a means of paying off the mortgage. Our ability to work is the single greatest asset most of us will have the good fortune to own in this lifetime.

Factoring in wage inflation of 3.5 per cent per year, a worker on an average salary of $50,000 stands to make $5 million between the ages of 21 and 65.

Heather Carpenter, who writes extensively about career capital in her new book Your 21st Century Career, says it is one of the most overlooked and undervalued means of investment.

"People are so busy investing in houses that if they understood a bit earlier the gains they can make by investing in themselves, it would be more helpful over a lifetime," says Carpenter, a career counsellor based in Hawke's Bay.

While many assume the best way to maximise career capital is to go for the best paid professions, Carpenter warns this will lead to empty returns if the decision is purely economic. Instead, she encourages individuals to explore their aptitudes, interests and attitudes as a means of leveraging a career into capital that does better than pay the mortgage. She says individuals with a genuine interest and passion about what they are doing stand just as good a chance, if not better, at earning a good living because the drivers are enduring.

Carpenter talked to Your Money about how go about the business of cultivating career capital.

When most people think of investments, they think property, start-ups and stock markets. What is career capital and what constitutes an investment in it?

People don't tend to look at themselves as an investment but they should. The money you invest in yourself is money in the bank. This concept of building your own assets is important because over a lifetime you are your best investment. You can look at external investments in the financial markets but you must not neglect your own personal career capital. I think by dividing it up into learning, connection and motivational capital, it gives people a really interesting way to assess where their capital is at any time.

What distinguishes the three types of career capital?

Knowledge capital is keeping up to date. Connection capital is all about relationships. It is not just whom you know, but who knows you. And thirdly, your motivational capital; keeping your inspiration alive by being in the right place. And the best right place at any given time. When you are inspired and interested, you are giving your best work and I'd say that's your best career, when you are in that place.

People often struggle with self- discovering, separating what they want to do from expectations or obligations.

You have to look for clues about what interests you, what gets your antennae going. What you look at that starts you thinking, "Gee, I'd really like to know more about that." It is as simple as that. But people tend to ignore these signs within themselves unless they think it is going to lead somewhere. But what doesn't lead anywhere is when you are in work you are not engaged by. People just become mediocre, they lack motivation and they are not particularly the kind of employee that people want.

In the book, you talk a lot about the transformative power of thoughts. Is this just positive thinking?

I think it goes beyond that. What I'm saying is that you should think with an informed framework. That is especially true in modern times because in the career world many people are stuck back in the Dark Ages, relying on old ideas and old structures.

What are some of the common mental traps?

The biggest one is the lack of understanding about self- management: that they are in charge of their career and they have to act, and be strategic and be thoughtful and find out what the best strategies are. In the old days, careers turned up in front of people, and organisations trained people and provided support for them that are no longer there.

Also, when we're in a job, it is easy to become settled and reactive, instead of keeping an eye on our career capital and thinking of ourselves as the craft we have, understanding that we need to build a reputation no matter what job we are in. These aren't hard things."

What constitutes advanced knowledge and skills?

Critical thinking skills, for one. The ability to analyse, to synthesise arguments, to pull complex ideas together in a way that people can understand so they contribute to projects more effectively.

What kind of leverage does an employee have with an employer who may fail to see their capital worth?

I'd say check that you have exhausted all the self-directed opportunities firstly. That you have done all the learning you can by observation and through practice, then if you think that the benefit that you are supplying to your employer has grown substantially or could be used better, that is a mutual thing. It becomes a negotiation. And if the employer can't offer it, then you look elsewhere. And that is what Generation Y has figured out.

How smart is it to change careers or go back to school in middle age, when you have a mortgage to pay and a family to support?

I say if you've got 25 to 30 years work left, if you want better options and better money, you have to find a way to invest in yourself. The alternative, which is the status quo, isn't usually attractive. At 45, we still have 20 years left. Some people look at it like a second career. And you might want to have a completely different vision of success at that time.

Where does work/life balance fit into career capital growth?

In the case of a family, it works better if couples do it as a joint project. They can work out how they're going to get this vision of work/life balance together. On the other hand, it must be said that people's idea of work/life balance is personal. Some people just thrive on work and they don't actually want the other kind of balance. It shouldn't be set in concrete, this idea that balance means you have to have your weekends off. That is only for people who want that.

In your book, you cite self- belief as an asset builder in terms of career capital. How does that contribute?

Self-belief has been so well validated now that we know it is 50 per cent of achievement. We have to take self-belief out of the apple-pie or dreamy file or whatever and understand what it means and use it in a more concrete way. People who do, do better. Optimistic people do better.

How can employers encourage self-managing employees?

They can acknowledge employees who are spending time to develop their skills, they can recognise the skills and they can note a complex skills when it gets used and validate it. Individual acknowledgement, recognition and making connections between employees that can help one another are all good ideas. Recognition alone is worth so much to people because it engages and motivates them but it is under-utilised by employers probably because they fear they'll have to back it up with a pay rise.

What's the biggest detractor of career capital?

A lack of self-interest, a lack of proactivity, not thinking ahead to what the environment might need so you can stay employable. And in terms of connections, when people are in an organisation for a long time they build their world in it and they might lose touch with youthful and interesting people beyond that organisation. So, if they lose their job the connection capital might be gone.

What role does confidence play?

A big one. Most people have far more values than they give themselves credit for because they've never done the job of thinking about it more.

How about multiple careers as a means of growing capital?

It is very common in New Zealand, especially for the 40 to 50 age group that wants more freedom. They start to think: "What do I want?" The freedom thing is about how can I leverage what I already have; create more freedom for myself, so I can work the way I want to. That might mean multiple income streams but they put it together somehow so it works for them. Freedom in the 50s is more development. The lucky ones are those who have passive income streams in place. For others, it is a challenge to find a way to construct that. But the earlier the better, if you understand how long your career is going to be.

As D T Hall wrote: "Capital accumulation is not inevitable: a dead-end job in which our current competencies and networks are reduced or become obsolete will result in a serious depletion of our capital. To make capital work for us, we have to work with our capital."

- © Fairfax NZ News