Comfort, Challenge and Compensation

Your career is the biggest asset you have in your financial portfolio. It provides a lifetime of financial dividends, appreciates in value when well managed, and has controllable costs.

Nearly all financial instruments have 3 key variables to weigh…

  • Income (dividends)
  • Appreciation (growth)
  • Cost (investment)

In Career terms, these map to three core considerations for career decisions, the “3 Cs” of…

  • Compensation – pay (income)
  • Challenge – growth, OJT, stimulation (appreciation)
  • Comfort – satisfaction, hygiene factors, perks, culture (investment)

Seth Godin touches on the balance of income and appreciation in his post What are you seeking at work?

“Some people want safety and respect. They want to know what the work rules are, they want a guarantee that the effort required is both predictable and rewarded. They seek an environment where they won’t feel pushed around, surprised or taken advantage of. Other people want challenge and autonomy. They want the opportunity to grow and to delight or inspire the people around them. They seek both organizational and personal challenges, and they like to solve interesting problems.”

The 70-20-10 Rule is not fixed in this context. Rather, it is dependent on your individual circumstances and priorities like balancing any portfolio.

Typically, a young person at the outset of their career will adopt this balance…

  • 70% Challenge
  • 20% Compensation
  • 10% Comfort

They are young, hardy and energetic with fewer competing demands (costs) of family, maintaining assets. The “young man’s game” is the time to work hard with each hour laboured investing in credentials, experience and skills. This period is when people trade off earnings for growth in their earnings potential with internships, night courses, stretch projects, etc.

At this early stage, the bottom two of compensation and comfort might flip. University or other training is the ultimate in ‘challenge’ where you are direct contributing to your professional growth, and the ‘compensation’ is actually negative. The luxury to focus on pure learning (or just the fun of college life) could be seen to put ‘comfort’ up to the 20% level.

Later in mid-career, the balance tends to shift to the following…

  • 70% Compensation
  • 20% Comfort
  • 10% Challenge

They are at peak or near peak earnings so the capital appreciation of ‘challenge’ is deprioritised. They have other big assets in their lives (eg. family, house) that require attention and investment so ‘comfort’ is a higher priority. But this balance, very much depends on the priorities of the individuals. Many people will flip comp and comfort choosing to apply their strong earning capacity (per hour worked) to a greater comfort with fewer hours worked (or fewer other investments like commute time). Especially later in the career, comfort can become more of a priority as wear-and-tear or age demands it or years of strong compensation have built up financial assets enough to afford it.

In any career step you are considering, consider what your 3 Cs stack ranking is and then ask yourself how the option you are considering maps to those priorities.

(Of course, there is always the “Wally” model, illustrated in the Dilbert comic above, which puts comfort at the top throughout.)

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