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Coming out of high school, I was split between engineering and business majors. I enjoyed my science, math, accounting, and economics classes, however, I enjoyed the business and economics classes slightly more. Ultimately I chose what I saw as the safer choice, engineering. Engineering degrees typically earn more money and it is easier to get into the business field  with an MBA, regardless of your undergraduate degree. I didn’t have a strong preference, so I picked the safer option. This is similar to the equilibrium game where the Pareto dominated outcome is the expected outcome. Although I enjoyed my business classes slightly more, I went with what I believed had the lowest risk. As you can probably tell, this decision was the right one for me because I am now happily in economics. Looking back at it, I wish I was more risk prone and had originally chosen  a business related major.

Each summer I worked or had an internship to gain experience and ultimately get a better job after college. I knew that many internships give return offers to successful interns and working in general is a good way to get your foot in the door. Although I didn’t necessarily mind working, I could have travelled or simply relaxed all summer. Doing this would most likely mean I wouldn’t receive a decent job offer after graduation. This wasn’t a risk I was willing to take and quite frankly simply relaxing for three summers would get old and boring. Over the past summer I had an internship, and fortunately was offered to return full-time. So ultimately avoiding the risk of doing nothing all summer was a success; however, doing nothing all summer clearly has a very low chance of being a successful choice. Even though the prompt is focused on those uncertain what their income will be, knowing exactly what my salary will be somewhat changed my consumption. Because I know what I can afford in the future I am more willing to be risk prone. Although I am generally more of a saver than a spender, recently I have been more willing to take risks and spend more of my savings. One of my favorite hobbies is playing golf, and most people know that golf is an expensive sport. I have been using the same clubs for multiple years and they are in need of an upgrade. They are decently outdated and my putter I purchased for $5 from Goodwill. I could have purchased nicer clubs earlier, but this would have required me to drain a large portion of my savings, something I wasn’t willing to do. However, even though my savings are roughly the same as before, I am looking to buy new clubs because I know in a few months I will have a full time job. In the somewhat near future I will be able to boost my savings back to where it was prior to my purchase. I am now content with spending more of my savings now; however, I am not immune to risk and will still try and find a good deal. I am fine with letting my savings drop slightly, but would not want to risk having zero savings and needing to purchase something essential. 


Comments

  1. There were a few things you said I simply didn't understand. You opted for the safer choice out of high school - engineering. Then you said the decision was the right one for you, though you enjoyed business classes a bit more. This was followed by saying your are happily in economics now. That last line is a disconnect for me as a reader. I'm inferring that you transferred from engineering into economics. If that's right, how was engineering the right choice? At a minimum, if you had to pay the engineering surcharge in tuition while you were in that college, wouldn't it have been a better choice for you if you majored in economics from the get go? So some explanation of what happened needs to be offered to clear up the confusion I have as a reader.

    I'm glad you wrote about recreation and, in effect, talking about life balance between play and work. I used to play golf, so have some thoughts about that to relay. The real cost compared to other sports, tennis for example, is the time it takes to play a round of golf. Even if you only play nine holes, that's usually a two hour commitment, plus depending where you live the golf course may be more remote than tennis courts are. So an issue is whether you have that time to devote to the game. Weekends it would seem possible. Weekdays may be a different matter. When I was an assistant professor, a group of us would get to the course very early, maybe 5:30 AM, and try to play a round ahead of the mower people. Then you'd try to put in a full day's work after that. Academics, of course, don't punch a clock. And doing research can happen any time of the day. Whether this sort of thing is possible in other jobs, I don't know. If not, you may need to find something else to do as recreation during the work week. Some physical activity is a good counter to work stress.

    Regarding the cost of the equipment, there is a story about Lee Trevino competing with amateurs while using a coke bottle instead of a driver. The point is that if you're skilled enough, the equipment may be less important. My sense of this is that modern equipment makes even the duffer able to perform at a proficient level. I see that as both a bad and a good.

    From what you said I was unclear on whether you are taking the job that you were offered at the end of last summer or if you are still looking for the something else. It's comforting to have an offer in your pocket. You can sleep better that way. But you might have also written about whether that internship was engaging for you while you did it. That matters too.

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