Author: dchopefuls

The Pitfall of Student Loans

I was very eager to attend graduate school right after undergrad. I thought it was the only way to get to D.C. and/or being taken seriously. I highly recommend listening to the several graduate school podcasts I’ve recorded to get a better insight into graduate school and how to use it. When deciding on whether to attend graduate school and which to attend there was one thing I never really thought much about.

If I had a time machine I would go back and let 30 year old me slap 22 year old me across the face, literally! 22 year old me never thought twice about the financial consequences of taking out student loans.

A few weeks ago a member of D.C. Hopefuls Fellowship reached out to me with exciting news. He had been accepted to his second graduate school program and offered a full scholarship! He is now faced with a difficult choice. Attend school A, which has the great reputation, is located in D.C., and offered him $20,000 off tuition, which means it will cost him about $40,000 to attend or chose school B, which is not as well known (still a great school), the program is a different style, it is not located in D.C., and the cost would be $0 thanks to the full scholarship. We spoke for a long time about the pros and cons of both schools. Each as very different things to offer and I know he will have a successful career regardless of what he picks. Eventually the conversation turned to money. After talking about it for a while I sent him the email below.

“I can’t stop thinking about this and here is one way to look at the true cost of grad school. If you go $40,000 into debt it will take you 26.5 years to pay it back paying at $215 a month. Over that time you would pay $28,000 in interest I gave you a 4.5% rate, which is strong, my wife and I both started at 6.8%. So that degree ends up costing $68,000. So the true cost if you choose to pay it off long term is $68,000 not $40,000.

If you want to get aggressive and do $285 extra, totaling $500 a month you would be debt free in 8 years. You would spend $7,600 in interest at that low rate of 4.5% which makes the degree cost $47,600.

BUT if you attend school B you would be debt free after you graduate in two years. Over those same 26.5 years you could take that $215 a month and put it into a 401k or any mutual fund. At the end of those 26 years you would have $144,000 in the account. This is assuming the market grows at 6-8% while historically it grows around 12% over long periods of time. If you did the $500 for 8 years you would have over $60,000 in that account.

In 10 years you will be 32 years old. You could be 8 years out of graduate school and have $60,000 (possibly as much as $80,000) sitting in an account. Or you could be 32 years old and just paid off your debt and be at $0 because most of your expendable income was used to pay off debt.

Debt is a dangerous thing and I don’t want you to fall victim to the ‘oh well school debt is good debt.’ I borrowed $65,000 to go to graduate school and I seriously regret it. I do not regret attending graduate school but I regret putting myself in such a financial bind. I could have slowed down and gone to graduate school over 3-4 years trying to pay as I went or attended the school that was half the price.

Here is something pretty depressing. I graduated in August 2011 and decided to not start making payments until January 2012. This was allowed and because I had no understanding of interest I thought ‘hey why rush to pay these back.’ So my actual $58,000 degree ended up being $65,000 as some interest accrued while I attended school for two years and the rest accrued while I waited to pay them back. My wife had taken on more debt than me and I am proud to say as of Christmas 2017 we have paid off over $250,000 in debt. On one hand it is an amazing accomplishment but it is also sickening to think about where we might be had we done it differently. My wife could not be a nurse anesthetist had she not gone to graduate school and my degree has paid serious dividends in my career but we could have been smarter. Had I simply attended a lesser known school for $20,000 instead of $65,000 we could have an extra $45,000 sitting in our account right now. That is the difference in a down payment or renting another year.

Beyond simple finances I am a living example of debt hurting your career. I have sat at a job I truly HATED because I couldn’t afford to take a pay cut or miss a single paycheck thanks to debt. When you are young you need to be flexible and agile while debt makes you slow, complacent, and STUCK. Bad financial decisions at 22 can slow your career so be wise and cautious as you make any financial decisions.

I’m not in the financial advice business but your professional career is not a vacuum. The steadfast spirit applies to all aspects of your life. Making bad financial decisions can stall and/or disrupt your professional flexibility.

Stay Steadfast,

Tommy Pevehouse
*Here are the links I used

http://www.free-online-calculator-use.com/early-loan-payoff-calculator.html

https://www.investor.gov/additional-resources/free-financial-planning-tools/compound-interest-calculator

I Want To Be Your Bobby Flay: Your College Degree Is Raw Meat

My wife is really into food network which means I now watch a lot of food network. I have to admit I’ve become a much better cook but I miss sportscenter.

Rachel Ray, Bobby Flay, and all the famous chefs are great to watch because they teach me how to take normal ingredients and turn them into something amazing.  I want to be your Bobby Flay! For years I’d look at my bachelors degree hanging on the wall, check out my beautiful Masters degree shining in its frame, smirk as I walked into the Pentagon for work, and just imagine all the great opportunities that would head my way….until they never did!  A college degree is NOT a beautiful meal, it is an ingredient. Heck it can be the beautiful rib eye you bought but it’s still just a piece of raw meat.

Your degree can be the meat, your leadership experiences can be the great spices, your high GPA can be some herbs, your internships can be the potatoes, and Washington, D.C. can be your kitchen.  Obviously you have to know the recipe to put them all together into an amazing meal.  Do you get my analogy? Many people think their ingredients will speak for themselves but you have to become a chef that can blend them together into something amazing.

Let me be your Bobby Flay and teach you how to do it! D.C. Boot Camp is like my own food network show for your career as I walk you step-by-step to becoming the seasoned professional you want to be!

Tommy Pevehouse

What Is The Steadfast Spirit?

A successful career in Washington, D.C. will depend on two factors:

1.  Can you manage yourself?

2.  Can you create, manage, and maintain relationships?

Many of my blogs will provide tactical solutions to mastering these two factors, but at the core it all comes down to the steadfast spirit. The dictionary defines steadfast as firm in belief, determination, or adherence. Spirit is the force within a person that is believed to give the body life, energy, and power.

To me the steadfast spirit is the overall attitude and demeanor of a person that has embraced the practice of devoting themselves to a lifestyle, while taking faith in the outcome. Steadfast spirit is holistic, daily, and vital.

Can you manage yourself?
Someone with steadfast spirit finds balance within themselves. Humility is central to the steadfast spirit, but this is never confused for a lack of confidence. A person with steadfast spirit is aware of what they can and cannot control, but finds ways to influence situations others would leave to chance. They are organized and self-motivating.

Can you create, manage, and maintain relationships?
The steadfast spirit appears confident but not arrogant. It means to always be appreciative of others’ time and always make people feel important. A person with steadfast spirit is upfront about what they do not know but never waivers in asserting their ability to quickly learn new things and grow.

The person with steadfast spirit speaks to every person with respect. They speak with the janitor who takes out the trash and always treats the receptionist with courtesy and appreciation. They are easy to talk to and not judgmental. They understand rejection is a part of life and use it as motivation.

In practice the steadfast spirit is many things. In undergrad it is the person who finds balance between school and extra-curricular activities. They do not join seven clubs, they have leadership roles in two. They pick their friends wisely and keep negativity at a distance. They are aware of their limitations and seek the counsel of others often.
The steadfast spirit is strategic at all times. It means understanding the role and importance of a resume, it means knowing when to ask for a favor, and it also means knowing when a favor must be returned. It means looking at a contact as a lifetime connection not someone who can help right away.

It is the understanding that anything worth doing is worth doing right, even when it takes a long time. The steadfast spirit is getting coffee with 20 people before you meet someone in the right office and it can mean taking a few entry-level positions before landing the right job.

There is a payoff! I can confidently say the people in my life who have been living examples of the steadfast spirit are experiencing the payoff. It took 4-7 years in D.C. for many of us, before we finally broke into our fields, but we did it the right way!

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Becoming Your Own Consultant…Avoid The Employee Mindset

Employees believe it is their employer’s responsibility to task them. They come to work and do the tasks they are given. They often complain their boss doesn’t delegate enough to them and spend a lot of time justifying their lack of output. This was my mindset for several years.

Traditional consultants are brought in by organizations to evaluate. They are hired for an outside perspective and to institute new procedures, technology, or sometimes office culture. Often consultants are hired for one reason and end up achieving success for something totally different. They are there to help the analyst use new technology in order to work quicker and realize that it is actually a lack of organization that has slowed them down. Consultants are not permanent they are hired to improve and move on.

You must think like a consultant even when you are a traditional employee on paper. I was inspired to write this blog because in less than 24 hours I heard the same advice on two podcasts. Both Colin Cowherd (sports) and Dave Ramsey (finance) said something along the lines of “we are all contractors/consultants a lot of us just have one client.”

Right now I only have one client and that is the Military Commissions Defense Organization. I try my best to approach each day like a consultant. My job is not to sit and wait to be given tasks but to identify areas for improvement and take it on! To leave the office better than I found it. On campaigns they call it ‘work yourself out of a job’ meaning you create enough structure while training those below you that three months later your job is being done by others and you are able to focus more on higher goals. Just like a consultant I look to make my client (bosses) life easier in any way possible. I look at my job as a one day contract each day and each day I make their lives a little bit easier I know they’ll want me back the next day.

Apply the consultant mindset to your job search as well. Imagine if someone was paying you to find your next job and build out your network….would you be fired soon? I work with many job seekers, primarily in D.C. Hopefuls Fellowship, and they fall victim to life. They get busy with other things, friends come to town, or they got a lead and decided to just sit idle until they hear something. It happens to us all! I use to wish that I could just pay someone else to build me a network and find me the right job. Of course I quickly learned only I could do that for myself and that I was not being a good consultant for myself, I had adopted the employee mindset. I expected people to just help me because I asked and waited for things to fall in my lap. I would go several days without doing anything and blame other people for my lack of success. Much like employees I waited for things to come my way rather than take the initiative!

I challenge you to take 5 minutes and reflect over the last month. If you had hired yourself as a consultant to go out and build the career you have always dreamed of would you fire yourself?

We are less than a month into 2018 and I’ve already to spoken to several young job seekers who probably all would fire themselves right now. The common short-coming of each person was the lack of a plan. They had no real strategy or goals they were all just throwing things against the wall to see what sticks. D.C. Boot Camp is a 16 module course that provides not only information you are lacking on how to best build the career you want but more importantly it shows you how to plot out a plan for success. Having a clear drawn out strategy with measurable benchmarks will do absolute wonders for your mental health, stress, and overall career success.

As you know by now D.C. Boot Camp is still free to the first 60 people who join D.C. Hopefuls Fellowship. Drop the employee mindset and become an amazing consultant for yourself!


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