The politics of our hometown might get more headlines, but the economics of D.C. tell a story that’s just as complex and compelling. We’re fortunate to be in one of the country’s most active financial hubs, even amidst the turmoil of 2020.
Taking stock of data prior to the pandemic (thanks to Data USA), the area’s median income in 2018 stood at over $85,000 – more that 30% higher than the U.S. median, and growing at a clip of 3.44% per year. D.C. has a higher concentration of legal, life sciences, and of course public administration professionals.
The point? There is great opportunity in this town, but also fierce competition. Professionals looking for an easy ride are likely in the wrong place.
Hard work brings its rewards, though: D.C. ranks 2nd in the country in millionaires per capita. Professionals on this path should be looking to secure their lifestyle and their future, ensuring that their efforts lead to the best financial outcomes.
Think long-term early
If you’re on a strong career path, when do you start thinking more formally about the future?
The easy answer to this question is: now. The sooner you put your mind to it, the easier it will be to build a career you really want. The career planning process typically begins with the choices you make at school. You want your education to provide you with the necessary skills and expertise to succeed in a wide variety of jobs. This means that you need to make smart choice about the courses you pick. Just because you are looking for a career in the financial services industry doesn’t mean you should exclusively take finance courses. Other subjects like English, psychology, history, etc. can help you develop some of the skills that will help develop your career path. While college can give you a lot of the basic skills needed in the workforce, certain jobs may require more extensive training and/or advanced degrees (i.e. doctors, lawyers, etc.).
Gaining knowledge and skills is the first step, but that is only part of the puzzle: you also need to expand your personal network. The more people you know, the more opportunities you will have. Once you’re in the workforce, you should attend conferences, serve on a board, or volunteer in order to meet and develop new relationships. If you work at a large enough firm, you might accept a job in another unit or work with people from different divisions on a project.
As with most things in life, success is seldom linear. You can’t control the entire trajectory of your career – there are simply too many factors beyond your control that will shape your job options: global economic trends, political elections, and technological changes, just to name a few. The important thing is to not get discouraged and keep moving forward.
Don’t keep up with Joneses
It’s easy to get distracted by showier financial displays around you, especially in a highly competitive financial environment. Stay focused on your own goals and needs.
It’s common to look at someone else’s life and feel envious. They may look like they have it all—the nice house, fancy cars, designer clothes, and landscapers and house cleaners to help them maintain it all. But the truth is, you really don’t know their financial situation. They could be drowning in debt from all of those material items.
Next time you’re about to make a big purchase, take some time to examine your motives. Are you purchasing this item or service because you really need it? Because it will make your life inherently better? Or because you’re worried about what the neighbors (or your kids or in-laws or best friends) think of you?
If the answer is that you just want to look more successful, walk away. Spend some time with the people you love best for a happiness recharge and brush those Joneses right out of your mind.
Given today’s climate, change in the markets is sure to come. How should professionals prepare?
The first step to dealing with uncertainty is to accept that we can't plan for everything. Let go of those things that you can’t control and focus on those you can. One way to create this focus is to set a schedule and stick to it as much as possible. Try to create big and small activities in your day and week that are consistent, for example:
- Exercise at the same time every day
- Go to bed and wake up at the same time everyday
- Do your chores at the same time each week
- Make the bed every morning
Whether you are financially astute or inexperienced, uncertain times often mean we all end up a little out of our depth. Now may be the time to seek guidance from a professional regarding your finances. As financial planners we know full well that the future is uncertain. Even a carefully constructed and well-thought-out financial plan, can be disrupted by some unforeseen event. What we can do is help plan for and protect against some of these “known unknowns,” such as illness, disability, loss of a job or death. And while some issue may go beyond our expertise, chances are we know where to go for help.
We love this town and everything that comes with it. We stay involved in the community and are proud of our long-term D.C. roots. We know what it’s like to grow up, live, and work here. If you are interested learning more about managing your financial life in one of the country’s true economic hubs and how we can help, please contact us.