Most parents will be quick to dismiss the arts as a career for their children. They encourage them to be doctors, engineers, accountants, and probably not graphic designers, musicians, or photographers. Is this the right call?
The truth is, it’s not about being right or wrong. One path isn’t inherently better. The science vs. art debate is, in fact, the risk-return tradeoff spoken in a different language. Higher risks for potentially higher returns aren’t inherently bad. And when it comes down to it, this career advice is simply from protective parents who prefer the safer route.
The risk-return tradeoff applied in real life
Risk and return go beyond economics and finance. The tenet is about taking more risks for potentially higher returns. The operative word here is potential because risks don’t always pay off. And when they don’t, you’re left in a worse position.
A classic example is between being employed and entrepreneurship. Being employed is safer, but entrepreneurship has more earning potential. Or how about leaving your money in a bank vs. investing in the stock market.
This principle applies in real life, too. Here are a few uncommon examples of the risk-return tradeoff applied in real life (Follow the link for more examples.)
Running a marathon, going too hard: If you run too hard, you risk blowing up and not finish the race. But if it pays off, then you finish at a faster record.
Singing, belting high notes: People might praise you for your vocal prowess. But if you go too hard, then you risk embarrassing yourself with voice cracks or mid-track adjustments.
Academics, controversial takes: A controversial paper might get you the Noble Prize, or the ridicule of colleagues.
Safer isn’t always better
There’s no inherently better option in all of the examples I mentioned. Some people value the safer route and prefer to run slower, ensuring they finish the marathon, while others value winning more and go all out!
In other words, the right choice depends on your preferences and priorities. For example, a larger emergency fund is safer, but safer isn’t always better. They’re just choices based on your preferences and priorities.
In choosing careers
Careers in the sciences are the safer choice. You’re likely going to get a job as a doctor, engineer, or accountant. On the other hand, careers in the arts are the riskier choice. But because emotional purchases in the arts aren’t based on rationale, the potential to earn more is also higher. Think about the successful photographers or musicians and how they earn big. Of course, the likelihood of failure is also great, which is why it’s the riskier route.
As a parent inclined to the sciences, I understand it can be hard to discard biases. But as much as I’d like to protect my child from uncertainty, I also know having choices is what’s best for him. We’ll never know if the choices we make today pay off in the future anyway. All we can do is understand our preferences, of safety vs. reward, and go from there.
Dan Dima-ala is a 2-time real estate board exam top-notcher, real estate investor, entrepreneur, and former corporate finance professional. He has a degree in economics & finance and is a certified Accounting & Finance Mentor for GoNegosyo. As a financial freedom advocate, Dan shares his unique insights at freedom locker PH.