Tag Archives: career

Salary vs Commission: Which Do You Prefer?

Salary vs Commission: Which Do You Prefer?Everyone’s job situation is different. Some people are paid hourly, others a flat rate for the year, and others on commission. There are advantages and disadvantages to each payment system, and it definitely takes some getting used to when changing from one system to another.

Here are the pros and cons for the 3 most popular compensation structures:

Hourly

Pros: It’s very easy to see that the more you work, the more you earn. If you are a hard worker, you have the potential to earn even more money for working overtime, which is often at a rate of 1.5 times the normal rate.

Cons: There is very little stability. Also, if you are sick or need a vacation day, you may feel guilty and go to work when you shouldn’t.

Salary

Pros: There is more stability here and it’s easy to know exactly how much you’ll make every pay period. You are likely entitled to benefits, which can help you take off work without having to worry about making less money.

Cons: There is not much ability to increase earnings since performance reviews are often once a year. Also, you may have to work more than 40 hours a week without being compensated for it.

Commission

Pros: The better you are at your job, the more you will get paid. There is no limit to how much you can earn.

Cons: You can never be sure how much money you will make in a given month, which makes planning difficult. Sometimes, factors outside of your control will determine if you have a good or bad month.

Throughout high school, I worked summer jobs, all of which paid me hourly. The more I worked, the more I got paid. So when I wanted to leave my job picking fruits and vegetables on a local farm at noon, it meant that I wouldn’t be making money during the afternoon.

After college, my first job was a set salary for the year. There was definitely a sense of security which I appreciated.

Now, my compensation consists of a base salary in addition to commission based on a percentage of sales. There’s no limit to how much I can make, which I like. I am able to motivate myself because I know that the harder I work, the better I will do, and the more I will earn.

What payment structure do you have? Do you like it? Which is your favorite?

Updated August 23, 2015 and originally published March 26, 2012.

How an Internship Abroad Helped Shape My Career Path

During my junior year of college, I studied abroad in Israel. I got an internship through school working for a venture capital firm in Jerusalem, and the 4 months I spent there changed my outlook and had a profound effect on my future career.

It wasn’t until a year beforehand that I decided I wanted to major in something business related, so I was very new to the world and had a very limited knowledge of what the venture capital world entailed.

Once a week, I’d go into the office, sat in on meetings with companies pitching their products, and speak with the managing partners about technology enabled services. It opened my eyes to all the possibilities ahead and I started thinking about things in a different way.

Most of the companies that came into pitch their products did not seem like they were destined for greatness. They were not world changing services or products, so the company passed on most, if not all, of the opportunities presented in meetings that I sat in on.

After learning a lot and contributing very little, I came away with a much deeper understanding of the world of technology and became much more interested in it. It helped solidify my decision to major in Information Systems, which was a mix of programming and business.

The following summer, I took an internship working for a jewelry store trying to improve their traffic and rankings. Having that internship experience was the only thing that made me qualified for the position. It was there that I got my first (and only) mention in the New York Times Freakonomics Blog.

Without that first internship in Israel, there’s no doubt in my mind that I would not have gotten the internship at the jewelry store and learned more about search engine optimization specifically. and there’s no doubt in my mind that it’s the reason I was given the opportunity.

After graduating from college the following year, I started working primarily doing database work and some programming for a large car insurance company. I got the job based on my coursework and my experience, which clearly started with the venture capital internship. Meanwhile, I started this blog and started thinking outside the box in terms of my future.

After 2 years I moved out west and after a few months of self-employment, I got my current job working in online advertising.

In college, I was a little single-minded. I planned on getting a job and working for about 40 years before retiring. I never thought that I could do something else with my life, start a business, and create my own destiny instead of relying only on others.

This internship I had while on a study abroad program kicked off a series of events that led me to where I am today and shaped the way I look at the world. I gained the valuable skills necessary to discern whether or not to pursue a recent business opportunity, and it opened the door to many more opportunities I continue to look for.

Making a Mid-Life Career Change

The average American will change jobs nine times before reaching their 33rd birthday. Some estimates suggest Americans experience a career change (changing not just jobs, but fields) a total of seven times, although the Bureau of Labor Statistics doesn’t track this information. And with Americans spending an average of just 4.4 years at an employer before moving on – a figure that is far less than the average throughout the rest of the industrialized world – chances are, you’ll change jobs sooner rather than later.

I have had 7 jobs so far (5 of which were during high school and college), but since graduating college, I’ve only switch jobs once, when I moved across the country to be with my now-wife. This change was a career change as well, from working with databases and programming to, after a brief stint of self-employment, online advertising.

The thing is, whether you’re looking for a new job or your first job, the process of choosing a career that’ll be a good fit for you – not just today but tomorrow, next month, next year, next decade – is much the same.

Finding Your Passion

Have you ever met one of those people who is quick to say they’ve never worked a day in their life, as they love what they do with such a passion that their job doesn’t feel like work? I have, and I’ve found myself being jealous of those folks. Finding your passion is the key to longevity in a particular career field. After all, there’s a reason for that old adage, “Do what you love, love what you do.”

But just how do you go about finding something that suits you? Taking a personal skills assessment can help you narrow down your strengths and weaknesses, the things that excite you and those that bore you. However, if you’ve  ever taken one of these, only to be told that your personality is ideal for working as a tax collector or prison guard – definitely not your dream jobs – then you may want to try a different method.

Instead, take a good look at the things you already do in your life that give you pleasure. Do you love working with children? Maybe education is right for you. Do you love learning about personal finance (that’s why you’re here, right?)? Working in the business world could suit you. Don’t rush this step; it’s all about taking the time to evaluate what makes you tick.

Test Drive A Career

There’s a community college in my area that has billboards up that read “Test Drive Your New Career.” I think this is a crucial element of any new job, whether you’re just starting out or well into your career. Talk to people who are already in the profession; ask them what they like and what they dislike, what they’d change if they could. If possible, shadow someone in the industry to which you’d like to make a career change or go even further, taking on an internship (often unpaid – a hindrance if you’re making a mid-life career change).

I know plenty of people who went to college with a certain career in mind, despite the fact that they had no idea how that particular field operated. After graduation, they spent a year or two in the career before realizing it wasn’t for them. Had they taken the time to “test drive” it beforehand, they could have made a far more educated decision.

Do Your Research

For some people, money is no object. I have friends who would be as happy earning a million dollars as they would $20,000, so long as they were doing something they loved. But this mindset isn’t for everyone; for some people, money does buy happiness, at least to a certain extent.

Visit a website like the Bureau of Labor Statistics to compare the salaries for various careers. Of course, salaries vary from company to company and even location to location, but getting a general idea of how much you’ll make on your chosen career path could ease financial anxieties down the road.

It’s important to understand what qualifications, specialized training, or degrees you’ll need to break into your new job. Make use of online resources that outline your options in detail.

Start Small

Making a career change – particularly if you’ve already invested years of education or on-the-job experience – is a monumental task. Simply launching the exploratory process can feel overwhelming, like you’re turning your back on your past.

That’s why it’s crucial to start small. Once you’ve decided to change jobs and have narrowed your choices down to one or two, sample them by taking on freelance work, volunteer work, or even a part- time job. Getting your feet wet slowly, instead of jumping all in, can help you avoid hasty decisions. On top of that, it can also help you avoid the financial pitfalls of job jumping.

Get Qualified

While you may be able to make a career change from journalism to media relations without batting an eye, changing jobs from unrelated fields – say, from education to medicine – takes far more time and preparation. It’s important to understand what qualifications, specialized training, or degrees you’ll need to break into your new job. Set a timeline for earning those qualifications, deciding on a financial plan and educational course of action to get you from point A to point B. With more involved career changes, be prepared to deal with the financial implications such as having to take out student loans or even cost of living loans to cover the gaps in your income while you make the switch.

Reader, have you ever made a career change? What motivated you?