Sunday, October 20, 2019

Managing Future Income Risks

The prompt focuses on how we make decisions and how much they are based on considering the future possibilities or whether they are made because it seemed like a good choice at the time. I think the purpose of this prompt is to look back on decisions we have made and try to understand what caused us to make those decisions and whether we considered the uncertainty and risks involved in making such a decision. Many of the decisions I have made in the past have been based on the future and reducing income risks, whilst other decisions have been made simply because they seemed like a good decision at the time (sometimes regardless of the potential income risks).

While I do not have much of an idea of what job I will get, where I will work and what my salary will be, I have considered these when making decisions for my future. For example, when choosing my major when I was applying to colleges, I started looking at what skills are most sought after now as well as what skills are expected to be in high demand in the future (10 to 20 years from now). While I was already interested in Computer Science, this gave me a better incentive and more reason to opt for a major in Computer Science. I opted for Computer Science and Mathematics because I was always interested in Mathematics and I found out through research, that students who study Mathematics along with Computer Science are also highly sought after. Regardless of the demand in this field, I was taking a huge risk since I was going to be paying tremendous fees despite not knowing whether Computer Science was a field I really wanted to go in since I did not have much experience in the field.

After my sophomore year, however, I realized that I was no longer interested in Mathematics and decided to switch to Computer Science and Economics since I had already taken 3 Economics courses by that point and enjoyed them thoroughly. In this case, I felt there was a smaller risk than initially applying for a Computer Science and Math major. This was because I took a more informed decision this time since I was confident that Computer Science and Economics were both fields that I was interested in pursuing which is also increases my marketability for a job in the future since there is increasing demand and low supply of people with skills in both fields.

One of my friends who graduated last year applied for a major in Computer Science, but he chose that major because he felt that it was a growing field, despite not having much experience in it and not enjoying the experiences he had with coding. He struggled with keeping up with CS courses and ultimately decided to switch to a Civil Engineering major after his sophomore year, which was something he was always interested in, but had decided not to study it since he considered it to have fewer job opportunities after graduation. However, after switching majors he was doing much better academically and enjoyed his courses much more. After graduating, he got a job offer from one of the biggest automation companies in the world and is now working there. While he took a big income risk by changing his major, it worked out well for him in the end since he enjoys the work he does more than when he was studying CS. What I learned from him is that sometimes it is worth taking a risk to pursue what you really want to do, since he took a huge risk by doing so and it paid off for him.

2 comments:

  1. I'd like to make more sense of what you wrote in the first two paragraphs, by trying not to consider major at all, but only focus on the university that you attended. Did you have any possibilities of attending a less expensive university, but one with a solid reputation? I'm ignorant of what it costs to attend universities in other countries, if you are not a citizen. So let's consider this just as a hypothetical. Back in 1989 I did a Sabbatical at the University of British Columbia, in Canada. It's a university with a pretty strong reputation. What of that as an alternative. Or consider universities in the UK. I'm not sure of the right university to count as a peer for the U of I, maybe its not Oxford or Cambridge, but here the question is just about tuition and cost of living as a student at these places. Is that roughly the same as the U of I or not.

    If it is the same, then it seems that as long as you were going to attend some university roughly equivalent to the U of I, then the costs of doing so were pretty much determined by that decision. The risk then, as you suggested, is in choosing a major in a field where you don't have a lot of prior experience. For your information, I experienced the same sort of risk going to graduate school in economics, since I had hardly any economics as an undergraduate.

    Now let me flip this around. I believe the computer science and economics major is a new thing, maybe only a couple of years old. As I'm not privy to internal decision making in the Economics Department, I'm not sure what the incentives were to create this degree. But you may understand the appeal better than I do. If so, I would appreciate your explaining it to me.

    Regarding your friend who switch from CS to Civil Engineering, here is a different thought for you. There may not have been a safety play available. Staying in CS might also have been risky. You said your friend didn't like his courses. But there is a different between mild dislike and completely detesting something. Might it be that your friend was beginning to feel the latter. If so, while there are unknowns in doing something new, if the status quo seems unbearable, making a change may not seem that risky, in the sense of, could it really be that much worse than the current situation? So the perception of risk might be quite different for the person who is dealing with the situation compared to the outsider who is observing the situation but not experiencing it. That difference is worthy considering.

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  2. When considering all the universities I had the option of attending, University of Illinois was the cheapest option. I considered applying to universities in the UK, but the programs available there were not suitable for me since I would not be able to take any classes outside my major. I felt like if I attended university in the UK, I would not gain as much knowledge outside my major and since I was initially not completely sure Computer Science was what I wanted to study and was a career route I wanted to pursue, going to UK seemed far from ideal, despite the lower costs compared to the US.

    I had previously done Economics in high school and had Statistics experience (from free time) as well and those programs here are considered amongst the best in the world. I figured that if Computer Science did not work out, I would at least have good alternatives just in case and based on that, the University of Illinois seemed like the best option to me.

    The Computer Science and Economics major is really new; It was only added last fall in fact. While I am not sure about the incentive for the university to create this program (I wouldn’t expect the university’s incentives to align with mine), I can explain the incentives that encouraged me to switch my major to Computer Science and Economics. Firstly, I was interested in Economics which was a key factor but doing a double major in Computer Science and Economics did not seem like a good idea to me since I didn’t think I would be able to cope with it. I would have also considered Computer Science and Business which I feel would have been more useful in the long-run, but the university does not offer that major as of now. I also thought that doing CS and another non-engineering/technical major would allow me to gain knowledge that would help give me expertise and a new perspective that would set me apart and give me a unique selling point. I do not know of many students who are in the Computer Science and Economics major although this is probably caused in no small part by the fact that the major was only added as an option just over a year ago.

    Regarding my friend who switched majors, when trying to think from his perspective, I think I would agree that he probably detested CS, since he said that he was always frustrated and irritated when studying CS or working on CS assignments. What makes me think this now is that I remember him mentioning that he was changing his major immediately since deadlines were approaching and he didn’t want to be stuck doing CS, despite not having much time to plan or think about it. If that was the case, then it probably would not have seemed as big a risk to change majors, but I think there was still a risk, since he changed majors when he was in his junior year, and he would likely not be able to change majors again and still graduate within 4 years. He was able to switch to Civil Engineering and still graduate in 4 years since there are some overlapping lower level courses in CS and Civil Engineering, although had he switched to a different major later on, he most likely would not be able graduate in 4 years, which would have meant the added expense of tuition, housing and other costs for another semester. Therefore, while it may have not been such a huge risk to switch majors from CS from his point of view, it must have still been a huge risk from his point of view to do so without taking enough time to think about what major to pursue.

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