I need some advice about career plans, graduate studies and whether to rent or to own. Mostly in the financial context but also, of the bigger picture view -- am I being overly optimistic, am I too focused on career?
I graduated in 2005 with a bachelors in science and started working as a programmer in the financial industry. Along the way, I grew to dislike the technical work and especially the culture, and decided I'll be much happier working closer to the business side. I now work in an analytical role that's between the technical and business sides (read: middle office) and enjoy the work and the fit.
I like where I am for the time being but I know that in one or two more years, I'll grow restless and want a more challenging job to learn more. Compared to the people I meet and work with (and where I have some ideas about working next), I have the soft-skills and technical skills but lack the strong financial background.
I started pursuing the CFA designation last year to fill in that gap but I find the syllabus and its study mechanical, lacking in substance and frankly, lonely. I'll write the second exam this coming June but I think graduate studies will fill my needs better.
Between an MBA and an MFin (master of finance), I've landed on the MFin and on a very specific program in my city. I've met the program director, the recruitment team, audited a full class, interviewed the current cohort, met with a program graduate, and the impression all around has been solid. Plus, the average student is 30 and established compared to the typical MBA student. I am ready to submit my application and am reasonably sure of gaining admission. The downside is that it's a two year part-time program and will cost me $45K each year.
In between all this, I am the only one amongst all my friends, younger and older, that is renting in this era of low interest rates. Some of my older friends have even confided to me that they have bought investment condos. (And they have young kids too.) I have no great desire to own my home but I do have great desire to not be financially stupid. Continuing to rent will not leave me in ruins but I think I might be foolish to continue when interest rates will remain low until the US economy recovers (read: reach full employment in the Federal Reserve's view).
Lastly, relevant facts:
- I am 30, single, male and a visible minority
- I have no debt other than the credit cards that I pay in full monthly
- I have cash savings of $15K, an investment portfolio of $95K and an incentive of $30K should I stay with my employer for another two years
- I also have tax sheltered investments of $80K that I cannot draw until I retire (or with extreme penalty)
- of my after-tax net income: a third goes to rent, a third goes to savings & investments and the rest is spent
- my parents are in their late sixties and in good health and I do not need to support them financially for the time being
- minor note: my monthly contributions to savings and investments have a tax reducing effect so if I instead use this cashflow to pay off tuition, my taxes payable actually increases
- I don't expect a huge salary increase for completing a masters degree. I am doing it for my own fulfillment and to access more opportunities than I would otherwise have. The ROI in cash terms is actually quite low. And I've met a lot of people who are doing or have done the tech to financial career path change so my skills are by no means unique. Am I pursuing graduate studies for the right reason, especially in these economic times?
- Since the 2008/2009 crisis, I've focused a lot on the career side of things to make unemployment less likely and have built up considerable savings in case I do get laid off. Friends around my age have instead focused on building home equity and starting families. Part-time graduate studies on top of full time work will only make my dating life, nevermind a steady relationship, harder. Am I focusing too much on the wrong things?
- Finally, am I stupid for renting and maintaining an investment portfolio?