Investing in Your Identity Capital - When is It Worth Going into Debt to Advance Your Career?

Guest post written by Stephanie Halligan

There’s an inspiring (and terrifying) TEDTalk circulating the web. In this video, clinical psychologist Dr. Meg Jay, author of The Defining Decade: Why Your 20s Matter and How to Make the Most of Them, boldly and fervently proclaims that your 20s are the most important, defining decade of your life. And if you just muddle your way through these crucial years, says Dr. Jay, you’ll set you up for utter failure in your 30s and beyond.

So yeah - no pressure.

Life After College readers already know how dually exciting and frustrating your twenties can be. After graduation is your chance to grow, explore, make mistakes and and shape your career. And, according to Dr. Jay, this is the moment to be focusing on building some serious “identity capital.”

Your identity capital is your career toolbox: a collection of tools, skills, jobs and interests that you accumulate over the years. It’s the patchwork quilt of your career, elements that are pieced together to make your career narrative unique. And, as Dr. Jay argues, your twenties is exactly when you need to be assembling all of these tools.

Even if you’re in your late twenties (or thirties), there’s still time to start investing in who you are (and who you want to become). And the good news? You don’t have to leave your job and go into thousands of dollars in student debt to start shaping the identity you want.

Building Identity Capital vs. Investing in Education

When you think of investing in your career, you may immediately think: grad school. And if your current job is boring and unchallenging, or you’re not quite sure what you want to do with your career, an advanced degree seems like an easy way to invest in your identity capital and add another credential to your resume … right?

Well, not necessarily. While getting a degree would definitely be an investment in your education, graduate school isn’t necessarily always the best investment in your identity capital -- and it’s certainly not a the silver bullet to help you find the career you love. Most importantly, grad school is a major financial investment - one that could actually negatively impact your future if you don’t proceed smartly.

So while investing in identity capital is critical in your 20s, avoiding unnecessary debt is just as important. Before jumping head first into an advanced degree, make sure you can answer “yes” to the following questions:

  1. You love your fiend of work and you’ve hit a “degree ceiling” – If you’re in a field that you love, you may be already looking to take the next step forward – only to find that only having a bachelor’s degree is holding you back. If you keep coming across job descriptions that read “masters degree required,” grad school may be right for you. But ask yourself this: how far could I truly get with my current level of education if I wanted to? You’d be surprised how fungible some job requirements can be.

  1. Your current student loan debt situation is manageable – If you walked away from your undergraduate program relatively unscathed by student debt, congratulations! You’ve got the financial green-light to go to grad school. However, if you’re considering graduate school to buy some time before you have to pay off your existing loans, think again. Sure, you might be able to defer repaying some of your debt until after you earn your advanced degree, but you’ll likely end up worse off by the time you graduate (most of your loans will still be accruing interest while you’re in school).

  1. Your return is worth the cost – There are a lot of variables to consider when applying to grad school: cost of tuition, how much you have to borrow and how much time you have to take off from your career to go back to school. So before jumping head first into a $100,000 MBA program, ask yourself, “What’s my return on investment?” Compared to the costs, will grad school yield a significantly bigger return for your career and identity capital in the long-run? Remember, you’re never guaranteed a high-paid job with an advanced degree. If the math adds up and you do decide that another degree is worth it, be sure the costs (and what you borrow) doesn’t skew the equation.

If you answered an enthusiastic “Hell yes!” to the above, grad school is an awesome solution for you and a great way to add to your career toolbox.

If not, you still have plenty of opportunities to boost your identity capital. In fact, you don’t need to spend money or time earning any credentials to start building the career you want today.

How To Boost Your Identity Capital For Free (and Right Now)

You can do a few simple things today to start accumulating meaningful, career-relevant experiences – all without quitting your job, going to school and taking out a ton of loans.

  1. Start a side hustle – Do you have a natural gift for editing or writing, but have absolutely no experience making money from it? Have you been curious about web development, but not quite sure you’re comfortable leaving your stable, full-time job? A side business (or “side hustle”) is a great way to test the waters in an area of interest and build in-demand skills. Starting a side project is like turbo-charging your resume while keeping the financial stability of your day job – just be sure you don’t burn out while taking on extra work.

  1. Say something online – I started my website The Empowered Dollar because I wanted to establish my personal finance expertise. But more than anything, I wanted to write my own professional narrative and not rely on the title of my current job to do that for me. If you’re looking to establish authority in your field of interest, blogging is a great place to start. Decide how you want to establish your “brand” and start writing blog posts about topics where you want to build your credibility.

  1. Stand up on stage (or in a small group) – Public speaking is an easy way to legitimize your expertise. Not sure you have the public speaking chops to say anything intelligent in front of a group of strangers? You don’t have to be a rockstar motivational speaker to get up in front of a group of people and say something meaningful. Think back to the last time you had a conversation with your friends on a topic you loved – one you felt like you could talk about for hours. You can channel that same passion and energy into a speech, a presentation or even a small group discussion. Start by looking for smaller speaking opportunities or consider hosting your own area Meetup group.

Regardless whether or not you choose to go to grad school or you decide to boost your career one personal project at a time, whatever you do will add another piece to your ever-growing identity capital.

We’d love to hear from you in the comments: How do you invest in your identity capital? What’s one thing you could do by the end of the year to boost your career?

Stephanie Halligan

More About Stephanie Halligan

Stephanie is the creator of The Empowered Dollar, where she helps millennials fix their finances and find their stride in money and life. When she's not blogging, Stephanie is designing online curriculum and games to teach students about smart money management. Follow her @EmpoweredDollar.