Danielle and Brian were cut from the same cloth.
They were both from middle class families in the Midwest. Both lived in the same modest house all of their life. Both of their fathers worked the same job for the past 30 years while mom stayed at home to raise all three kids. Danielle and Brian both left home for college, graduated four years later, and landed nice corporate jobs after graduation. Both moved 800 miles away to a brand new town; but neither cared. The job market was tight and all of their friends were working hourly jobs back home; so they were thrilled to have a salary with benefits at a Fortune 500 company.
This is where the similarities end.
Brian bought right into the corporate life. After he watched the new graduate presentation HR gave on day one, he was hooked. He could see himself staying with this company for a long time. He started to envision his career: 5 years, 10 years, 25 years down the road — Manager, Senior Manager, and then Director. So Brian started climbing that ladder.
Danielle was excited about her new career too. She watched the same new graduate presentation, but wasn’t completely sold on the pre-mapped out career path. She knew the economy was evolving and gone were the days of 30 year careers at the same company. Danielle knew most corporations have very little loyalty to their employees. And she saw many young, new graduates job hoping from company to company in order to progress in their careers. Some were even relying on freelance work and solo-preneurship to get ahead and to pay the bills.
Brian and Danielle both grew up believing that homeownership was a big milestone — an achievement of sorts. After all, isn’t that the next step in the American Dream? Graduate college, land a nice job, and then you buy the house. But none their friends could afford their own place. Most of them were living back at home with mom and dad.
Brian bought a house within the first few months after starting his new job. In the suburbs. The down payment and mortgage payment was a pretty big stretch for him. The monthly cash outlay ended up being 40% more than he could rent for, but he managed. Brian didn’t buy for financial reasons. Sure he thought it might be a good investment and he was tired of throwing his money away on rent, but he bought for different reasons. He wanted to prove to his friends and parents that he made it. He wanted to be the first one of his friends to own a house. He believed homeownership equaled success. Brian really wanted approval and affirmation from others much more than he wanted to own that house.
Danielle took a different approach. She rented a cheap apartment downtown. Near the nightlife. She chose to view her first job out of college as an opportunity to learn and to network. She had no desire to make a large financial commitment at such an early stage in her career. She was more concerned with spending time with friends and connecting with the city. Instead of buying a house, she decided to take her additional funds and invest. She believed that renting wasn’t a waste of money, after all, her rent was providing for a roof over her head. She didn’t care to impress her friends by buying a house, even though she could.
Fast forward five years.
Brian didn’t get the promotion he was promised. He wasn’t selected for the fast track corporate role he was gunning for. But now he feels stuck because of this house. Sure he could sell it, but he’d be out quite a bit of cash. Instead of taking his lumps and cashing out, he opts to stay. He would love to hop to a different company, but he can’t. His options are limited based on location and salary. He’d be willing to go work for another company and take a lesser salary, but he can’t. He’s locked into this mortgage payment. So he stays. He got his standard 1.2% raise this year. He wishes he would have never bought that house.
Danielle’s career is flourishing. She’s actually working for her third employer, in a different industry, and is living in a new state. Because she was renting, she was able to stay mobile. And with each job hop, she increased her responsibility and is now managing a team of 6 people. She looks back at her first job and is thankful she didn’t view it as a final destination. Danielle is also now engaged to be married. She and her fiancé love the city they are living in and have started talking about laying down some roots to raise a family. She plans on using the funds she’s invested to make a large down payment and keep her monthly payment low.
Consider this, a recent survey showed only 26 percent of new college graduates stay in their first job for longer than a year. Another survey revealed only 9 percent of Millennials expect to stay in a job longer than 3 years!
Now think about Brian and Danielle. Who is in a better position to jump on a new opportunity in another state? What happens when the career path laid out for them doesn’t pan out? What if the company or career they’ve chosen isn’t what they thought it would be? What happens if they get laid off, start dating someone in another city, or don’t like the city? What if they don’t like the corporate scene all together and want to start their own business? These are all real scenarios young professionals will encounter early in their career. The first job rose colored glasses can fog up pretty quickly if you don’t prepare for change.
I’ve personally watched this scene play out twice since I started worked for a large corporation three years ago. Both cases were young sharp guys. Brand new college graduates. They bought houses they were really proud of. They came in hungry, ready to work hard, aiming for the promotion, and naïve. They put in their 50-60 hours a week, brown-nosed for a few years, and slowly realized the goals they set for themselves and their careers were not going to happen. One guy sold, almost broke even, and moved away. The other guy is stuck in a town and company he desperately wants out of.
Image credit: Rosmary