The whether or not to follow your dreams post

…As if most 18-22 year olds have a real dream that doesn’t involve playing for the NBA.  But let’s settle for various shades of liking different majors different amounts.  Never mind that how much you like a major is only part how much you like the subject material and a much larger part how good the faculty is at teaching it.

Sorry.  Getting ahead of myself.

A big debate on personal finance blogs is whether someone should major in what they “love” and the money will follow, or whether they should major in something that will provide them a job when they graduate in 3-5 years.  If you do the former, you’re doomed to work at Denny’s the rest of your life.  If you do the latter, you have no soul and are doomed to a life of drudgery.

A related debate concerns the same question, but whether or not (or how much) you should go into debt for graduate school.  That will be addressed in a future post.

Turns out that the answer is not either or for either question, though which side of the rich in security vs rich in life spectrum you’re on is different for the two questions.

Let’s start with college.

Unless your dream involves becoming an engineer or nutritionist or some other major that you need the degree and training for, your major does not really matter.  And even with these specific fields, you can always take more classes after graduation and get a masters if you are willing to pay for the career change.  It is true that math majors make more than general studies majors, and that is for two reasons:  1.  math majors ON AVERAGE are smarter and more focused, so having a math major signals that your average smarts are higher than your average general studies majors and 2.  the supply/demand of how mathematicians think is less in supply/more in demand than for the way a general studies major is taught to think (do general studies majors perceive the world through specific methods?)

What a lot of the folks who tell you to “follow your dream” don’t seem to realize is that how how much you enjoy doing a specific job is only part of the utility maximization function.  Some people have things in their utility functions besides dinosaurs (assuming said person is over the age of 10) or Victorian romance novelists or whatever a person enjoyed studying most in college.  Some people like things such as… free time, job security, oh… and high salaries.  Some people like having nice things, or traveling, or taking vacations.  Sometimes, if these people take a job that they really like instead of a job that they would love if they were employed, then they get to max out on all these things in their utility functions.

Another thing that follow your dreamers often don’t seem to understand is the idea of compensating differentials.  Basically, people will pay you more to do a job that’s unpleasant for the majority of people.  People will pay you less to do a job that lots of people enjoy doing.  In economics terms, people will pay you X amount more to take on Y amount of disutility.  That’s one reason that economics jobs pay more than history jobs… it is more fun being a historian than being an economist.  (And yes, it is true that a lot of crappy jobs also don’t pay well, but they pay better than they would if they weren’t crappy… disutility is only one portion of what goes into a wage– skills, credentials, productivity, etc. these all drive wages up or down.  Being a professor is more fun than flipping burgers and pays better, but it also takes a lot more education.  If flipping burgers was fun, they’d be able to pay less to do it depending on minimum wage constraints.)

Then there’s the demand-side for passions.  A lot of people seem to have similar passions, meaning that you might not be able to get a job with your passion even were you willing to accept a lower wage for it.  And really, if I were to follow my passion, nobody would pay me for it.  There just isn’t a market for sleeping in and reading novels unless it’s combined with something distasteful like not getting to choose the novels or having to write about said novels, and even those fields are difficult to break into.  Heck, most schools you can’t major in that… maybe that’s what all those general studies majors are doing.

So should you follow your passion?  Well, weigh ALL the pros and cons.  Your work is only one part of your life (even if you’re an academic).  Think about your second choice options.  How much more do you love your passion than doing something else.  Look at employment statistics and wages and career paths for your passion compared to second choices.   Are you willing to waitress as a day job while applying for acting jobs?  Or live in a rural area not of your choice possibly adjuncting for a few years before landing a position teaching college-level English?  Weigh pros and cons and probabilities.  Think about the desirability of the back-up plans.  It isn’t an easy decision.  If you love your passion more than anything in the world and are willing to put up with hardship of one form or another to pursue it as a job instead of a hobby, then go for it.  If your passion pays well and has good employment stats and you’re good at it… well, that sounds pretty obvious.  If you’re not crazy about spending a few years in the minor leagues possibly never getting into a major, well, then maybe your back-up position in engineering that you enjoy and are relatively good at is a better idea.  You can still play amateur on weekends and after work.

Where do you fall on the following your dreams question?