Perfect For Beginners!
Free Trading Education!
Free Demo Account!
Good Choice For Experienced Traders!
5 Reasons Why Software Developer is a Great Career Choice
This week I will give a presentation at a local high school on what it is like to work as a programmer. I am volunteering (through the organization Transfer) to come to schools and talk about what I work with. This school will have a technology theme day this week, and would like to hear what working in the technology sector is like. Since I develop software, that’s what I will talk about. One section will be on why I think a career in software development is great. The main reasons are:
1 Creative. If you ask people to name creative jobs, chances are they will say things like writer, musician or painter. But few people know that software development is also very creative. It is almost by definition creative, since you create new functionality that didn’t exist before. The solutions can be expressed in many ways, both structurally and in the details. Often there are trade-offs to make (for example speed versus memory consumption). And of course the solution has to be correct. All this requires creativity.
2 Collaborative. Another myth is that programmers sit alone at their computers and code all day. But software development is in fact almost always a team effort. You discuss programming problems and solutions with your colleagues, and discuss requirements and other issues with product managers, testers and customers. It is also telling that pair-programming (two developers programming together on one computer) is a popular practice.
3 In demand. More and more in the world is using software, or as Marc Andreessen put it: “Software is Eating the World“. Even as there are more programmers (in Stockholm, programmer is now the most common occupation), demand is still outpacing supply. Software companies report that one of their greatest challenges is finding good developers. I regularly get contacted by recruiters trying to get me to change jobs. I don’t know of many other professions where employers compete for you like that.
4 Pays well. Developing software can create a lot of value. There is no marginal cost to selling one extra copy of software you have already developed. This combined with the high demand for developers means that pay is quite good. There are of course occupations where you make more money, but compared to the general population, I think software developers are paid quite well.
5 Future proof. Many jobs disappear, often because they can be replaced by computers and software. But all those new programs still need to be developed and maintained, so the outlook for programmers is quite good.
What about outsourcing? Won’t all software development be outsourced to countries where the salaries are much lower? This is an example of an idea that is better in theory than in practice (much like the waterfall development methodology). Software development is a discovery activity as much as a design activity. It benefits greatly from intense collaboration. Furthermore, especially when the main product is software, the knowledge gained when developing it is a competitive advantage. The easier that knowledge is shared within the whole company, the better it is.
Another way to look at it is this. Outsourcing of software development has existed for quite a while now. Yet there is still high demand for local developers. So companies see benefits of hiring local developers that outweigh the higher costs.
How to Win
There are many reasons why I think developing software is enjoyable (see also Why I Love Coding). But it is not for everybody. Fortunately it is quite easy to try programming out. There are innumerable resources on the web for learning to program. For example, both Coursera and Udacity have introductory courses. If you have never programmed, try one of the free courses or tutorials to get a feel for it.
Perfect For Beginners!
Free Trading Education!
Free Demo Account!
Good Choice For Experienced Traders!
Finding something you really enjoy to do for a living has at least two benefits. First, since you do it every day, work will be much more fun than if you simply do something to make money. Second, if you really like it, you have a much better chance of getting good at it. I like the Venn diagram below (by @eskimon) on what constitutes a great job. Since programming pays relatively well, I think that if you like it, you have a good chance of ending up in the center of the diagram!
Top 7 Reasons to Save Your Money
You may have asked yourself why it’s so important to save money. If you have enough to pay for everything you need, why should you worry about putting something aside each month?
There are a variety of reasons to begin or continue saving money. Different people save for different reasons, but in general, havings savings will benefit you in the future, whether you’re avoiding hardship or going after the things you want. It makes saving easier if you have a clear goal or purpose for the money you are saving.
Here are seven reasons you should save your money.
Save for Your Emergency Fund
It’s important to have an emergency fund set aside to cover unexpected expenses. According to a 2020 Bankrate survey, only 18% of Americans said they could live off their savings for six months. In fact, nearly 40% would need to borrow money to cover a $1,000 emergency.
That emergency might be an unexpected car repair, expensive medical bills, or a sudden job loss. If you were to lose your job, you’d be thankful you socked away a good amount of money into your emergency fund to tide you over until you found a new job.
Ideally, your emergency fund should contain enough money to cover three to six months of expenses. The Bureau of Labor and Statistics estimates average yearly household spending at $61,224, or $5,102 per month. That means an emergency fund for six months should hold about $30,000.
Try to put aside at least $500 to start. If you are working to get out of debt, save what you can until you bring your emergency fund up to between three to six months’ worth of income. If you are single or living on just one income, you may want to go with a larger emergency fund, because you don’t have a buffer if that job is lost.
An emergency fund can also help you cover unexpected medical costs, which can pop up even if you have insurance. If you don’t have the option to save in a health savings account (HSA), an emergency fund is your next best choice.
Save for Retirement
Another important reason to save money is your retirement. The sooner you start saving for retirement, the less you will have to save in the future.
Saving for retirement often takes place within special retirement accounts, such as a 401(k). Money invested in these special accounts has the potential to appreciate in value, earning interest. When that interest is compounded, it grows even faster.
For example, if you opened an account with $1, deposited $100 every month for 10 years, and earned 6.5% interest compounded annually, you’d have $16,195.18. Keep it up for another 10 years—20 in total—and you’ll more than double your money to $46,593.89. If you started investing at age 25, with 30 years of saving $100 each month at a 6.5% rate of return, you’d have $103,656.45 (including compounded interest) by the age of 55.
Such a rate of return is not guaranteed, and you do risk losing your money by investing. However, historically the gains have all been positive, and with enough time in the market, even dips eventually recover.
If you have an employer-sponsored retirement plan, you should at least contribute up to your employer’s match. Eventually, you should aim to contribute 10% to 15% of your gross income. You can contribute to your 401(k) as well as an individual retirement account (IRA).
10 Reasons Why You Should Save Money (Even When Borrowing is Cheap & Easy)
With credit so easy to get, why would anyone want to save money and buy with cash? If you want something, you pull out the plastic and then pay it back with payments over who knows for how long. If you can afford the monthly payments, everyone does that; what’s the big deal? The unfortunate thing is that this sort of thinking is making sense to too many people these days.
Here are ten reasons why you should save:
1. Become Financially Independent
The measuring stick for being rich is different depending on who you talk to. However, the one thing that the notion of “being rich or wealthy” means to most people is having financial independence and savings to depend on. Calling your own shots, financially speaking, means having the freedom to make choices in your life separate from earning a pay cheque.
This may mean being able to take a vacation whenever you want to, leaving work and going back to school to switch careers, starting your own business or investing in someone else’s start-up, helping family members, taking on a lesser paying job that is more personally satisfying than financially beneficial, or a big one these days – retiring when you want to rather than working because you have to.
Financial independence isn’t the same as being rich, but not having to depend on receiving a certain pay cheque can sure make you feel rich beyond your wildest dreams! Having savings that you can rely on is what it takes to become “rich,” no matter how you define it.
To learn more about financial independence, check out Jonathan Chevreau’s popular (and easy to read) novel, Findependence Day.
2. Save 50% on Everything You Buy + 24% on Groceries
If you normally charge all of your purchases on your credit card, and then you don’t pay off your credit cards in full every month, because of added interest charges you are probably paying at least 50% more for everything you buy. If you are relying on your credit cards to afford your lifestyle, break your expensive credit habit by saving up for your purchases ahead of time.
With savings, you can buy things when they are on sale and take the time to make better spending choices. People with savings can also stockpile groceries when they are on sale (items that are non perishable or which can be frozen). One author suggests people who do this can possibly skip one grocery shop a month and save 24% a year on their grocery bill.
3. Buy a Home
The bank won’t lend you money to buy a house unless you have a down payment, and you are not allowed to borrow a down payment. You must have this money saved up or have someone give it to you—and not lend it to you. Your down payment needs to be at least 5% of the purchase price of the house, and then the bank will consider lending you the other 95%. There are all sorts of other costs and fees that you need to pay when you buy a home, so you will need an additional 5% just for those costs. Savings is what will open the door to owing a home.
4. Buy a Car
When you want or need to buy a new car, you will need to have a down payment in order to get a car loan at a reasonable interest rate. You could of course “borrow” the money from your credit card, but at 20+%, how is that getting you ahead? Zero percent financing is reserved for great customers, so a car loan is bound to cost you something—and it could be a lot. The best thing you can do is save up as large a down payment as you can afford, and then consider your options. Maybe buying a quality used car rather than a new one will be what it takes to get you the vehicle you want.
5. Get Out of Debt
If you ever want to get out of debt, you have to have some money saved. Sounds ironic, doesn’t it? However, the credit cards are never going to get paid off if you have to keep using them for every “emergency” that comes along. Even if you are an awesome planner, stats show that half of us experience at least one totally unexpected expense each year (and half of those will be unexpected car trouble).
So before you start aggressively paying off your credit cards, you should save up $500 to $1,000 as a reserve fund. Then when unexpected things come up, you can pay them out of your reserve fund rather than put them on your credit cards. Maintaining a “reserve fund” will also help you to notice if your spending is getting out of hand. For more tips on getting out of debt, click here.
6. Annual Expenses
If you want to have a good, relatively stress-free financial life, you need to save for annual expenses. These may include money for gifts, vacations, vehicle maintenance, minor home repairs, fixing appliances, property taxes and possibly income tax. It can be tempting to refinance a mortgage to pay off debt or to use a line of credit to pay off high interest credit cards, but it is dangerous to endlessly put expenses on credit without actually paying them off. The best way to manage these types of expenses is to save for them in advance. This will not only save you money, but it will give you peace of mind. To learn how to budget for annual expenses, click here.
7. Unforeseen Expenses
What will you do if your car needs some major repairs? Do you have $500 to $3,000 on hand? What if your house needs some repairs, or it is discovered that you are living in a building that leaks? You can’t always count on the bank to lend you money for all of these things. It is much better to anticipate a worst case scenario and have some money saved.
As much as we hope that emergencies won’t happen, we all know that they do. A family member can develop a health issue, you might need to make an emergency trip, you may have a car accident or breakdown, severe weather could flood your basement or crack your pipes, or you may have to fly to a loved one’s funeral. Any of these emergencies can be expensive, and we all know that we will likely encounter some sort of emergency from time to time. So why not be prepared rather than potentially become another victim of an emergency.
9. You Could Lose Your Job or Get Hurt
In good times, everyone thinks that their job is secure, but in bad times, many begin to realize that bad things can happen to anyone. You could suddenly lose your job, your business could dry up, you might get injured—either physically or psychologically or become too sick to work. Any of these things can happen to you. Employment Insurance (EI) doesn’t kick in until you have been unemployed for 6 weeks. Do you have enough savings to tie you over or will you be living on credit? Living on credit during a time like this can quickly make a bad situation worse. Minimum payments become higher and higher until they are unaffordable and credit limits no longer budge. Then when you finally do get some income, what used to be enough doesn’t get you by because you have all these new debt payments to make each month. So now you actually need more income than before because you’ll need to pay down these debts and eventually work to get them paid off.
10. To Have a Good Life
There are huge emotional, psychological and physical consequences to always living stressfully, from hand to mouth, pay cheque to pay cheque. People who don’t plan for their future seem to run from “crisis” to “crisis.”
There is a little known truth that happiness can come from being organized. Being organized isn’t going to make you happy all by itself, but it can sure help. There’s so much in your future that you don’t have control over, so putting aside some money to spend when you need it is actually organizing and taking control of your future and financial affairs. You have nothing to lose by saving – and only a happier future to gain.
Start Your Emergency Savings Fund Right Away
Start today by setting aside a little money each pay cheque until you have an emergency savings fund of $500 to $1,000. If you receive a bonus from work or an income tax refund, use that to get you started or to add to what you’ve already got set aside. As life happens and you need to dip into your fund, build it back up. It takes a bit of work, but it’s a habit worth getting in to.
You may need to create a spending plan to keep you on track. Here’s a free tool that has already helped a lot of people. Give it a try!
Related Reading – Here are some more resources that may help you:
|More on Saving|