Jobs and Income

For many people, working isn’t just about earning income. It’s also about building a career and the satisfaction that comes from making your mark. That’s the difference between a job and a career. Typically, a job is more of a short-term position, while a career is the sum of all your jobs.

To get a job, you’ll need to meet certain requirements. Some careers require specific training and education, others focus more on experience and skills. For instance, medical professionals go to school—often for years— and usually complete additional training. As a result, most stay in the medical field for the duration of their working life.

Other career fields are more flexible, and lend themselves to entry and exit. For instance, if you work as a freelance writer, you may do that off and on throughout your career. Or if you train as a massage therapist, you may do that for a few years and switch to a different field. Some people have many careers in their lifetime. Even within the same industry, few people remain in the same job for their entire career. Instead, they pivot within a company or industry to increase their income and career opportunities.

Before deciding on a career path, consider your personal talents and interests. How do you like to spend your time? Do you prefer to work with others or on your own? Do you want a desk job or to work in the field?

Take time to research specific careers along with the education requirements, salary ranges, advancement opportunities, and more. Speaking of salary—one of the main things that determines how much you’ll make in your job is the career field you pick. For example, jobs in the technology field, like engineers or developers, will usually make more than jobs in the service industry, like hotel workers or hair stylists. Of course, that isn’t always the case, but it can be a helpful thing to consider when you’re just getting started.

There are benefits to sticking with a single career field. This includes building expertise and increasing earning potential. But there are downsides too, like job stagnation, which happens when you feel burned out, bored, or lack enthusiasm for your job. Also, you risk that your experience in one job field may not apply to another field if you decide to switch careers.

Continuing education, specialized training, and in-field experience increase a worker’s human capital, which is the value their unique combination of skills, knowledge, and experience brings to an organization. These things also increase productivity and earning potential, too.

But, of course, getting more education and training costs money and requires time and effort. You’ll need to weigh the future benefits with the current costs. For instance, if you want an additional certification you hope leads to a promotion, you’ll need to pay for the required training and find the time and motivation to complete it. Remember, there is never a 100% guarantee that these efforts will lead to a promotion or increased earning power.

Becoming an entrepreneur is another career choice. This means that you create your own business. Sometimes that business is just you, and other times you hire other employees to work for you. You’ll enjoy more freedom than working for a traditional employer—you can set your own hours and be your own boss. This route comes with added responsibility, too. If you don’t do the work, you won’t earn any income. As your business grows, you may become responsible for other people’s incomes, too.

You’re also liable for any risks that come with starting your own business. If something bad happens, it’s all on you, not your employer. Think through whether you’ll make enough income as an entrepreneur to make the risks worth it.

No matter your job, any income you make isn’t money straight in your pocket. Your gross income is the wage or salary you earn from your employer, but it isn’t what actually gets deposited into your account or sent to you as a check. Your net income is whatever take-home pay is left after taxes and other payroll deductions, like retirement account contributions and health insurance premiums.

Whether you earn wages, salary, commission, tips, investment income, or self-employment income, you’ll need to pay taxes on that money. A percentage of your income also goes to the government to pay for programs and services. Your employer contributes the money to these benefits on your behalf—you pay 6.2% and your employer pays 6.2%.

These deductions go towards Social Security, a federal program that provides retirement, disability, and survivor income benefits for workers or their dependents. Federal tax dollars also fund various programs that provide income support and assistance for people who qualify, whether from low-income, disability, or other criteria. One example is Medicaid, a national health insurance program for people with low income.

If you’re self-employed, you don’t have an employer to automatically pull taxes and federal deductions from your paycheck, or to match your contributions. So you’ll pay both the employer portion (as your own “employer”) and employee portion towards Social Security and Medicaid, due whenever you pay your taxes.

Think through all these considerations related to career mobility, income, and training before setting your sights on a particular career field.