The huge burdens on Gen Y – student debt and high unemployment – are leading to fears of a lost generation.
But, even if you are a recent college graduate, you DON’T have to work as a Barista at Starbucks while falling into the clutches of ever more severe student and consumer debt.
Career Hack has developed a blueprint designed to help you make the most of your bachelor’s degree by gaining work experience abroad, before returning to the US free of debt and armed with the 21st century skills that will make you valuable and employable. The best part? This can be achieved well before the age of thirty.
The debt-hacking blueprint can be applied to those in this sort of situation:
- Recently graduated from any US university
- Student loan debt of around $30,000 (roughly the national average)
- Graduate in philosophy, anthropology, English or any other ‘useless’ degree
What’s the solution to the mountain of debt that you are facing?
Let’s find out.
RELOCATE TO WHERE YOUR SKILLS ARE VALUED
Clearing debt is in principle very simple – it’s a bit like dieting. If you maximise your income and minimise your living cost, paying off debt before it snowballs beyond your control is actually fairly straightforward.
US graduate tend to focus on the ‘earnings’ side of the debt equation, putting little or no thought into the culture of consumption and debt so prevalent in the US, as well as the consequences of high taxes.
You could be making $5,000 a month in NYC, living in a tiny apartment shared with four others, and still end up deeper in debt at the end of every month.
If instead you’re making $3,000 monthly in Asia, responsible budgeting can help you save $1,000-$2,000 each month, with a living standard either equal to or significantly superior to that you would experienced in Boston, LA, Chicago, or most other large American cities.
Most Gen Y young people are quite capable of saving $1,000 a month in Korean second tier cities, Taiwan, and second/third tier cities in China. Asia, colourful and dynamic, possesses enormous potential for both economic growth and business opportunity – arguably something which cannot be said for most of the developed world today.
So: your aim is to widen the gap between monthly income and expenses, bearing in mind the size of living expenses, taxes and a social life.
The US culture is one of constant comparison with peers and maintaining appearances. Taking on consumer debt to purchase the latest iPhone and plasma TV, or bending to social pressure and spending $300 at a nightclub, is entirely socially acceptable – even expected.
No such burden is present in Asia. Since you’re foreign, everything you do is automatically alien and different to traditional habits and customs. Being different is entirely acceptable in Asia – any idiosyncrasies you may have will be attributed to your status as a foreigner. Your saving and consumption habits will break free from peer judgement and attune themselves to your specific needs.
In any case, the argument being made is that as a recent humanities graduate, you are, whether you like it or not, of very little value to the job market. And the competition is fierce. Quite literally millions of recent graduates have been vying for the same jobs over the past few years.
Not a great place to be.
Even Obama can’t do much to solve this. The astronomical cost of healthcare may yet substantially worsen the Gen Y unemployment dilemma.
If, where you are now, you are of little value, your first decision should be to relocate to where your value is highest.
Right. Where, then, is a young graduate with a humanities degree most highly valued? Teaching English in Asia.
Once you have completed this step, you should have identified the ways in which remaining in the US presents you with a series of obstacles, preventing you from clearing your student debts. Moreover, you should have made a decision to take advantage of geoarbitrage to pay off your debts, while working in an exciting, emerging Asian market.
CHOOSE A DESTINATION
Ok. Now you’ve decided that going international is the fastest way to tackle your debt – what’s the best place to go?
First, choose a country and get an internationally recognised TESOL/TEFL/CELTA qualification – it will certify you as an English teacher and enable you to find work quickly. The exact certification you will require may vary depending on your destination.
To remove your debts as quickly as possible, Korea is the obvious choice. Second tier cities in Korea are second to none in terms of paying high salaries and sporting low barriers to entry into the national job market. The lifestyle is probably of inferior quality than cities like Bali – but if your priority is to obliterate your debt fast to enable you to get on with the rest of your life, it’s really a no-brainer.
It’s easy to save at least $1,000 every month in second tier Korean cities such as Busan and Suwon – all of which can go straight to paying off your debts.
While you won’t be enjoying the beautiful beaches of Thailand, if your goal is to destroy your student loan debt in under 3 years, you will have to make a few sacrifices.
TAKE A DEEP BREATH
Right – you’re ready to go.
You’ve now chosen an Asian destination, you’re getting all the necessary vaccinations and processing your visa documents.
As soon as you have landed, ensure that you get certified, find yourself a short-term job somewhere, and start looking for other opportunities straight away. Your very first job will most likely be arranged by the company you received your certificate from. Although this is useful and convenient when you’ve only just arrived, you’ll probably not be maximising your earning potential. Within the next six months, you should aim to transfer to a different school and a better-paid position.
A fairly leisurely 20-30 hour working week is roughly what you should expect as an English teacher in Asia. With the time remaining, you should begin to explore other opportunities and activities available to you, particularly those outlined below:
- Internship with multinational corporations
- Starting your own business
- Learn one new language, if not two
- Learn graphic design skills
- Learn online marketing
- Learn how to code
- Take free Stanford and MIT courses offered online
If your aim is to clear $30,000 of student debt, and you’re able to save a minimum of $1,000 per month, it will take around 30 months (two and a half years) to pay off your whole debt burden.
If you chose to base yourself in Korea, it’s best to bank either with a major US bank such as Citibank or Bank of America, or with the Korea Exchange Bank. The reason for this is that using international banks will place you in a better position in terms of transferring funds back home and repaying debts with minimal hassle every month.
A 30 hour workweek over two and a half years provides you with plenty of time to develop a variety of new, relevant skill sets and an extremely long period in which you can experiment with different business ventures, make mistakes, learn from them and enjoy small successes in the process.
If you begin following this blueprint immediately following graduation at the age of 22, by 25 you will be in an excellent position. You will have:
- Cleared all your student debt while still in your twenties
- Gained international work experience over two and a half years
- Gained international business and start-up experience over two and a half years
- Understood how to manage finances while abroad
- Learnt a new language
- Constructed a globalised network of friends, acquaintances and contacts
- Possibly set up one or two profitable enterprises
- Collected a host of location-independent skills, notably graphic design, SEO marketing, social media management, import/export expertise, coding, copywriting, editing and anything else you may have picked up during the enormous amount of spare time you will have
If you decide to head back to the US once you’ve cleared your debts, it’s certainly a possibility. A wiser alternative would be to keep scaling your business, or to develop your career with a multinational or boutique consultancy in whichever fast-moving Asian metropolis may take your fancy.
Which makes more sense as a path in life?
“Opportunities multiply as they are seized.”
Sun Tzu, “The Art of War”
Sticking to the Career Hack blueprint, paying off all your debts and acquiring a range of skills and experiences by 25?
Or putting up with a badly-paid temporary job at McDonalds or Staples, going steadily deeper into debt, and waiting for the state to save you?
Not a difficult decision.
Wonderful international opportunities are there for the taking – grasp them while you’re still young.