Career Advice

Financial Advice for Graduates – 2020

17 Jun 2020  

If you follow my blog, you know that each year about this time I post some financial advice. It is primarily for the new Kellogg MBAs about to graduate, but I think it is relevant for anyone starting out on a new career. The advice is based more on hard-learned lessons than advanced financial modeling. Think of it as a marketer’s thoughts on personal finance.

This year’s advice will be familiar; the core concepts don’t change from year to year. The emphasis is different, however, informed by what has been a very difficult 2020: my father passed away, we’ve struggled with a pandemic, and U.S. cities are flooded with people calling for important changes in the treatment of African-Americans.

Be Generous – And Thoughtful

Every year I encourage people to be generous, to share some of what they earned. This year I want to begin with this point.

As a Kellogg MBA, you are in a rare situation. You are talented, smart, and skilled. The world needs your contribution. Jobs and opportunities await. Share some of this success. Be generous.

When it comes to charitable causes, just remember there are two types of giving. One type is giving when you have a clear personal interest. There is a benefit for you. You might give to your child’s private school, and a better school means a better education for your child. You might donate to Kellogg (and you should!), and a more successful Kellogg enhances the value of your degree. You might give to the local dance company after your friend invites you to sit at their table at the annual gala, and this helps you in many different ways.

A different type is giving solely to impact society and help others. I think this is a more pure sort of giving, aimed just at having an impact. When you look at the wealth gaps in the world, and the challenges many people face in society, this second type of support is particularly important.

Be Ready for Turbulence

If there is anything we’ve learned from 2020 it is this: be ready for turbulence. Things can change in an instant. The sun does not always shine. There are dark days ahead. Sunny days, too, but those are easier to navigate.

This means you should always be ready for bumps and have an emergency fund in place. Ask yourself a simple question. What would happen if I had no income for the next year, and stocks sank by 50%? Remember that layoffs and stock declines often happen at the same time.

If you have an emergency fund, you will have less stress. Money sitting in the bank doesn’t generate much of a return, but it provides peace of mind. Think of cash as the ballast in your household – the stabilizing force that lets you take risks and move forward.

Get a Small House

One of my best financial moves in recent years was not moving to a larger house in Chicago. A while back my wife and I went on a search for a bigger place with more bedrooms, a yard and a home office. We never found something that was quite right, so we decided to stay in our lovely but smaller place. Nobody will confuse our house with a chateau.

That has proven to be a great decision, even though that home office would have been nice this year. Our taxes are high but not completely absurd. The house isn’t so big that when the kids eventually head out we will be left rattling around a big empty space.

Housing is a huge fixed expense, and fixed expenses put pressure on your financials. As a philosophical taxi driver explained to me during a trip to Dublin a couple of years back, you can only sleep in one bed at time, and sit in one chair. You just don’t need ten bedrooms. Live in a small, nice space in a great location.

Buy Stocks and Hold On

This lesson seems particularly good this year, given the roller-coaster of a year we’ve seen in the stock market.

In the perfect world, you would have sold all your stocks and moved to cash in February, then moved back into stocks at the bottom to enjoy the rebound. Looking back, that seems like an obvious move. But timing the market like that just isn’t possible. Just tell me this: what should you do right now? Buy or sell?

To learn something important about investing, write down a forecast for the stock market 12 months in the future. Or just write down where you think the S&P 500 will finish 2020. Then check back. You will be wrong, but you will also be a smarter investor.

A good way to invest is to buy stocks and hold on. I find a mix of individual stocks and index funds is ideal. Individual stocks are better in terms of cost and taxes – you can harvest the losses and give away the gains. With a few index funds, you won’t completely miss out on high-flyers like Amazon and Tesla.

Plan Your Estate

After my father died this year, taken too soon at the age of 99 (he was busy planning his 100th birthday party the day he collapsed), I have helped administer his estate. I have been so impressed with how he arranged things. It was easy to find the needed documents. There isn’t any uncertainty about what is supposed to happen. My father spent time to think things through with his attorney and financial manager, and this has made everything easier.

Planning an estate is not fun but it is important to do for the people in your life. As New York Life’s stunning Super Bowl spot explained this year, the highest form of love is service.


Ultimately, the best careers and lives are dedicated to service of others – your family, your friends, and your community. Good luck and keep in touch.

3 Responses

  1. Stephen Calkins says:

    A small house also reduces your carbon footprint.

  2. Twinkle says:

    “Ultimately, the best careers and lives are dedicated to service of others – your family, your friends, and your community.” Well said! Can’t agree more. Excellent advice for anyone.

  3. Kathy Kraas says:

    Fantastic advice. Not surprisingly coming from you Professor Calkins. I always remember you comparing cash back cards vs. airline point cards when we had a coffee once. Cash back is optimal you told me. Stuck with me all of these years. Gratitude.

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