One of the mistakes I made early in my career was to think of my career as a way to earn an income to pay the bills.

While there is nothing wrong with this approach, there’s an alternative approach that I did not consider explicitly and early enough in my career.

That is the idea of working in part for assets. 

Let me explain the difference.   

Income is money you are paid for your labor. An asset is something that provides you with income, a multiplier to your income, or an accelerator to your career path (which typically correlates with higher income at some point).  

This lesson really hit home right as I was leaving McKinsey. At the time, there was an Analyst a year behind me who bought a condo in NYC. It was a tiny studio, but it was his. This was back when apartments in NYC were dramatically less expensive than they are today.

In the 2 years he worked at McKinsey, which ended when my 3rd year did, he sold his condo to relocate to his next job.

I knew what he had paid for the place and what he sold it for, and I realized that in the 5 minutes it took him to sign the paperwork to buy, then sell his condo, he had earned more from his investment than I did from the sum total of my McKinsey paychecks over a 2-year period — while working 70 – 100 hours per week.

So his “5 minutes” of effort yielded the same financial result of my 7,000 hours of work. The ironic thing is I could have bought a condo too. It would have been hard. I would have had to be creative about it, but it would technically have been possible.

The only problems were 1) at the time I didn’t know how, and 2) it never even occurred to me.

But, I never forgot that lesson.

Incidentally, that person went on to be an entrepreneur and has sold multiple companies probably in the $100+ million range. And is today a venture capitalist.

Investing in a financial asset like real estate is only one kind of asset. There are other assets too. Also, keep in mind not all assets that can be acquired or built necessarily need a lot of money.

Another asset is one’s network. This is another area that I never paid much attention to early in my career because I always had a negative, sleazy, inauthentic perception of it. I realized today that my thoughts on this were totally wrong.

Here are two simple ways you can invest in building your network today, so it provides value to you (in aggregate) in the future.

1) Stay in Touch with People You Know

Here’s one simple way. Get the contact info of all of your friends from school, current co-workers, and former co-workers. Once a year, send all of them card to say “hi.” Since we celebrate Christmas, we send a once-a-year Christmas card to everyone on our list. We also include a one-page letter that’s a personal update of what’s going on with each of us (me, my wife, and each of our 3 girls).

We’ve been doing it for years and this year we debated whether or not we should continue doing so. At my wife’s recent HBS reunion, everyone mentioned that letter to us and it was a simple way to feel connected, despite distance and lack of in-person contact.

So guess what? We’re writing the letter again this year.

2) Help others who need help.

When you meet people, especially people of influence (but not limited to just those people), ask them or determine through your conversation what they’re struggling with, what’s going on in their lives, or what their goal is in life or their career. Then offer to help. If you make a commitment to help‚ actually follow through.

If you make it a habit of being useful to the people around you, they are far more inclined to help you in the future. It is not a direct 1:1 payback. Don’t keep score of who you helped and who “owes” you; it doesn’t work that way. It’s more of an aggregate thing.

The total effort you invest in helping others will come back to you in often highly unpredictable ways.

Yes, there will be people you help that never help you back. And that’s okay. Give with no expectation in return.

But, realize that for every 10 people you help out, at a key time in your life or career, one of those ten (or a friend of one of those ten) will help you out in a critical way.

The key thing here is to stay in touch with the people you help. Make it easy for them to find you and vice versa. By the way, LinkedIn is great for this.

There’s no more need for me to email everybody I know every few months to be sure I get their latest email address update (which used to be a huge pain).

Incidentally, your clients will very willingly use LinkedIn (even the senior clients) because they too “get it.” To them, LinkedIn = Self-Updating Rolodex (address book).

So far I’ve talked about several kinds of assets including:

1) Financial assets
2) Relationship “assets”

Now let’s talk about two more types of assets:

3) SIGNALING assets
4) SKILL assets

A Signal asset is something on your resume or bio that signals expertise or achievement of some sort. A Harvard MBA is an example of a signal asset. Even if you learned nothing from a Harvard MBA, you would still benefit immensely from having graduated from there.

My Stanford degrees are a signaling asset for me, as is my McKinsey background. In my work today, my television appearances and media quotes also provide signals of credibility to others.

I’ve often been asked to provide my insights to reporters as an expert source. For example, I’ve appeared on live TV for Fox, and been quoted by TIME, The Wall Street Journal, Forbes, Entrepreneur, and many others.

In my speaking engagements and corporate client work, I make sure to include those “signals” in my bios and that others mention them when introducing me for a speech.

Those signals did not happen by accident. I was very conscious and deliberate about getting them. I invested time, effort and dollars in securing those media placements.

Because in my world, having graduated from Stanford and being ex-McKinsey is a slight, but not an enormous differentiator by itself. And quite ironically, I find the average person (you know, my mother and mother-in-law) are far more impressed that I was on TV than anything else I’ve done in my career.

So signaling assets are another kind of asset you want to think about in your career. And in a moment, I’ll tell you how to think about them in your career plan‚ right after I discuss the final type of asset — SKILLS.

A SKILL asset is acquiring some knowledge or ability that makes you more valuable to others in the future. While I certainly did get a signaling asset from my time at McKinsey, I also got a huge skill asset as well.

I use what I learned from McKinsey (+ a lot of other stuff I learned elsewhere) nearly every day in my personal life and career. There’s just something exceptionally useful about being able to create certainty out of uncertain situations.

In any career decision, you want to consider not only the income you’ll earn from a particular opportunity, but also how a particular decision does or does not increase your personal assets — financial, relationship, signaling, or skills.

One of the interesting things I noticed about my own career choices is that at nearly every step, I took that career opportunity with the lowest income.

My McKinsey offer was the lowest paying job offer I received. But I took it anyway, because it offered the highest increase in my ASSETS (particularly in signaling and skills). And with the benefit of hindsight, that ended up being a very good decision.

In all the jobs following McKinsey, I also ended up taking the lowest paying jobs — in those cases mostly for the SKILLS value. Those employers would let me do things and take on responsibilities that 1) others wouldn’t, and 2) would build the skills that I wanted to develop. Those too turned out to be good moves as well — though it took several years for that to become apparent to me.

Even going back to my college days, I interned at Merrill Lynch for free — for mostly signaling value, but I also got some skills out of it too.

I encourage you to evaluate both the income and ASSET growth value of any career decision. The highest income opportunities are often not the highest asset growing opportunities.

From a personal standpoint, I have been a very aggressive acquirer of skills — often at the expense of income. I don’t think I was very conscious of this at the time, but looking back, I realize I have been very consistent on this point.

The other factor to keep in mind is the cumulative effect of acquiring assets. For example, at the time I interned at Merrill Lynch for free, I was also working a part-time job elsewhere. The other job helped to pay the bills, but had no asset value what-so-ever. So I worked one job for income, the other for assets.

At the time, I had no idea what would happen from that one decision — as is often the case with these decisions. But I’m certain the Merrill “signal” on the resume got me more consulting job interviews about a year later.

My resume went from being probably good enough to get an interview at some firms, to definitely good enough to get an interview at every firm. On the margin, that additional 10% – 15% improvement in my resume from Merrill made a noticeable difference.

That of course, led me to McKinsey, which led me to industry, then to entrepreneurship, and I accumulated assets all along the way.

Significantly, I could have very easily said “no” to the Merrill internship. It was about 15 hours a week. It was at night during prime studying hours. I had to do my homework on all the other nights of the week — including weekends.

So I didn’t get to play as much. I still had bills to pay so I had to work my other job to pay those bills… and I could have very easily said, “forget it.” And in fact, most people did exactly that.

These efforts at acquiring assets have a powerful long-term cumulative effect. If you plot out your career trajectory, if you can get a 10% slope advantage over your peers, over a year or two it doesn’t make that much difference. But over decades, that can make a big difference — especially if you keep trying to increase the magnitude of that advantage.

You can apply this approach to signals, skills, relationships or financial assets.

A strong signal on your resume early in your career makes it easier to get the next signal, and the next one.

Developing even 2 or 3 strong relationships with others in your industry, and keeping in touch over years and decades, makes it easier to build relationships with even more people, and more influential people.

Acquiring a financial asset early in life (like my McKinsey colleague’s Condo) allows that advantage to accumulate as well (I’m sure he went on to his 2nd and 3rd investment, well before I ever got to my first).

So the bottom line is that income is not the only factor to consider in a career decision. In fact, I would argue that once the income is enough to not starve to death, acquiring ASSETS should be the top priority.

On the flip side, I have watched people I know continually turn down opportunities to acquire the assets I describe… and they are now paying a penalty for doing so.

One person I have in mind took a higher paying job, but one that did not allow him to stay current in his field. Given the opportunity to network and meet others in his field or to play, he took every chance to play and relax.

If you do this in any one year, there is no really obvious negative consequence. But quite often, momentum takes over. In his second year at his job, he still had a good income, but his skills were even more out of date and his network only included people with skills that were equally out of date.

I’ve followed this person’s career for well over a decade, and at this point it is very hard for him to get the better paying jobs because his skills are completely obsolete. His lack of investment in acquiring new skills has made him unable to contribute to employers around him in valuable ways.

What was interesting about this story, now about 15 years in the making, was I saw this problem in year 2 of his current career path. It was hardly a major insight.

All you had to do was read any major publication in his field (which I had a passing familiarity with) and you could see which skills were in demand and rising, and which were fading — his were fading.

So why does stuff like this happen?

In a nutshell, acquiring career assets early in your career is either 1) financially expensive, 2) time consuming, or 3) highly inconvenient — often all three.

Yet it is precisely early in your career where increasing the slope of your career trajectory by 10% or more has the greatest cumulative value.

With the benefit of hindsight, was I glad I did the Merrill Lynch internship many years ago (even though I gave up income, free time, and had to make up my study time and income elsewhere)? Absolutely.

Could I tell at the time that it would end up being a good investment of my time? Absolutely not.

The core tradeoff is this:

1) Short-term Cost with Long-term Benefit


2) Short-term Benefit with Long-term Cost

Explicitly pick your tradeoff, and don’t be surprised by the consequences. Take one path or the other and eventually you get what you’ve earned (or haven’t).

Just keep in mind that with the first approach (short-term cost with long-term benefit), the short-term cost is… well.. a cost.

The tradeoff isn’t short-term no cost + long-term benefit.

It is a short-term cost (time, money, energy, hassle) to get a long-term benefit.

I find most everyone wants the long-term benefit, but comparatively very few people are willing to consistently endure the short-term costs to acquire the assets that provide the long-term benefit.

That’s my thought for today.

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