Income Risk


We all want to optimize our returns but most people may be are taking risks at the same time. It is best to aware of the relationship between income risk and monetary return. By managing our risks, we can prepare better for unpredictable situations we may face. I don't think risk is a bad thing as long as it is controlled. Everyone learn and grow by facing and solve risks intelligently. If you know yourself, keep your skills up-to-date, and always work hard to develop yourself, you will be able to seize the opportunity to maximize your potential along with financial status.

Of course, I don't have any idea which job I will get, how much I will earn, and what other conditions might impact my future career. However, I want to talk about how I am managing my risk and preparing my future path. The time I was deciding what major I should study, I had a research on what majors are out there and what jobs or industries I can go with those specific jobs. I wanted to study that is interesting to me but the other hand, I considered what kind of jobs or industries I can go with that major. At that time, I didn't have an exact idea what I am good at, what I get interested at, and which job I want to pursue in the future. After vast amount of research, I decided to study statistics because I started to get interest in how much statistics can applied in our real life. I applied to various colleges and even got an offer of scholarship from one specific college. However, I decided to attend U of I because I found out that U of I has a good statistics program and it has a good Korean alumni connection. I have always wanted to work in Korea after I graduate, so having good alumni connection was a part of important factors choosing college.

After I decided to go to U of I, I had to discuss with my parents about tuition. Because I am an international student and had to pay expensive tuition, my parents' opinions were important to me. I declined the admission from college offering scholarship because in the long run, learning from better statistics program would teach me more deeper and wider contents and develop me better. It can be tremendous amount as tuition and not a small deal for myself and parents. But I took a risk of higher tuition hoping to have a better future outcome. In addition to my choice of university, I took several courses over summer in Korea last year. After studying and struggling with exams for 9 months, nobody wants to study over summer break. However, I was willing to take some academic courses even though I had to give up break times in Korea. By taking several courses and earning some credits over summer, I was able to take upper courses in the fall and make a step forward to graduation early.

It is important to think wisely and manage your risk, and I know one of my friend went through extreme story with a great risk. I met him at U of I when he was a junior and when I was a freshman. He was majoring in Statistics but he chose that major just because his parents wanted him to. He was doing good academically but studying statistics is not what he wanted to do. After his junior year, he decided to join the US army without graduating from U of I. He told me that he is willing to take a risk if there is another thing he is desperate to do. Because what he wanted to do was joining army, not studying statistics or graduating from university. When he was off to US army first, he seems to have a hard time both mentally and physically. But he soon adjusted to army life and last time when I talked to him on the phone, he seems to have a great life in US army. He definitely had a big risk because if he didn't like US army life, he would regret going to US army because it takes about 4 years for him to discharge. However, even though he gave up academic standing for 3 years, he is content with what he is doing and he does not regret at all. With his story, I learned that if there is anything you want to do, you should go for it even if you regret it. If you like it, good for you! If you don't like it, you learned from the experience.

Comments

  1. Professor ArvanOctober 19, 2019 at 1:12 PM

    There is something to be said about taking some years off before college and doing something else. In addition to taking off some of the pressure that many students seem to be feeling, because of the cost of college and also the need to find a good job after college, it would allow the person to mature somewhat. A more mature student might get a good deal more out of college academically, though would be somewhat out of step with classmates socially. I said this in response to your story about your friend who joined the army. It wasn't clear from what you said whether he meant that as a career or if only as an interlude before whatever comes next.

    While obviously we do things to please our parents, we also need to please ourselves and that requires finding some balance. Now having done statistics for a while, do you have any sense of whether you find it engaging? I will say I'm somewhat afraid of the mantra "data driven decision making" which seems to be the motivation for many who study statistics. There is a well know book review by Koopmans called Measurement without Theory. It is a critique of a pure measurement approach that is not informed by a prior theoretical understanding of the issues. I'm seeing a lot of amateurish attempts at understanding things by gather some data, whether the information really is informative or not. If you do ultimately pursue a job as a data scientist, I hope you keep this critique in mind while doing your work.

    Regarding coming to Illinois to find a good job back in Korea, judging by our class that seems a reasonably popular decision to make. But as you note there is inherent risk in it, because the payment of tuition is up front, so is far more certain, while they earnings you will have from working are off into the future and subject to a greater degree of randomness. I want to note that students who are residents of Illinois who get to pay in state tuition do so, in part, so they will work in Illinois after they graduate and then pay taxes to state government, in effect repaying their tuition discount. So I wonder if the government in Korea cares where you go to college. If so, perhaps they should be paying some of the tuition provided students attend the right schools, even if those schools are not in Korea. Doing that would shift some of the risk you and your family are now bearing onto the government in Korea. Such risk shifting seems to me an interesting policy idea that should get more attention.

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    1. Simon Kuznets Econ 490 fall 2019October 22, 2019 at 9:40 AM

      Sorry for unclear explanation of my friend's story. He wants to come back to finish his degree if he doesn't think army is the job where he wants to spend the rest of his life but he is unsure about it yet since it has been only half year. But he said he felt mature and learned various life lessons. Even though he decided to come back to finish his studying after few years, he said he will not regret it because it is just experience and he is getting developed himself. I think he is very serious about considering military man as his future career.
      Studying for few years of statistics, I find statistics very engaging and interesting. It if pretty fun to analyze the data and produce a result. It is very hard than I expected, but when I learn some materials and apply by myself, it is very fun and always looking forward to next step!
      Government in Korea does not care if we go to college to other countries. Since we pay tuition to other country and Korea government does not like that, Korea would not pay some of the tuition for students studying abroad. I would love that policy for the right education and future, but as of right now, I don't think that will be possible to happen. I agree that the policy will shift some of my and my parent's risks and hope that to happen.

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