Do You Work for Income or Assets?

One of the mistakes I made early in my career was to think of my career as a way to earn an income to pay the bills.

While there is nothing wrong with this approach, there's an alternative approach that I did not consider explicitly and early enough in my career.

That is the idea of working in part for assets.

Let me explain the difference.

Income is money you are paid for your labor. An asset is something that provides you with income, a multiplier to your income, or an accelerator to your career path (which typically correlates with higher income at some point).

This lesson really hit home right as I was leaving McKinsey. At the time, there was an Analyst a year behind me who bought a condo in NYC. It was a tiny studio, but it was his. This was back when apartments in NYC were dramatically less expensive than they are today.

In the 2 years he worked at McKinsey, which ended when my 3rd year did, he sold his condo to relocate to his next job.

I knew what he had paid for the place and what he sold it for, and I realized that in the 5 minutes it took him to sign the paperwork to buy, then sell his condo, he had earned more from his investment than I did from the sum total of my McKinsey paychecks over a 2-year period -- while working 70 - 100 hours per week.

So his "5 minutes" of effort yielded the same financial result of my 7,000 hours of work. The ironic thing is I could have bought a condo too. It would have been hard. I would have had to be creative about it, but it would technically have been possible.

The only problems were 1) at the time I didn't know how, and 2) it never even occurred to me.

But, I never forgot that lesson.

Incidentally, that person went on to be an entrepreneur and has sold multiple companies probably in the $100+ million range. And is today a venture capitalist.

Investing in a financial asset like real estate is only one kind of asset. There are other assets too. Also, keep in mind not all assets that can be acquired or built necessarily need a lot of money.

Another asset is one's network. This is another area that I never paid much attention to early in my career because I always had a negative, sleazy, inauthentic perception of it. I realized today that my thoughts on this were totally wrong.

Here are two simple ways you can invest in building your network today, so it provides value to you (in aggregate) in the future.

1) Stay in Touch with People You Know

Here's one simple way. Get the contact info of all of your friends from school, current co-workers, and former co-workers. Once a year, send all of them card to say "hi." Since we celebrate Christmas, we send a once-a-year Christmas card to everyone on our list. We also include a one-page letter that's a personal update of what's going on with each of us (me, my wife, and each of our 3 girls).

We've been doing it for years and this year we debated whether or not we should continue doing so. At my wife's recent HBS reunion, everyone mentioned that letter to us and it was a simple way to feel connected, despite distance and lack of in-person contact.

So guess what? We're writing the letter again this year.

2) Help others who need help.

When you meet people, especially people of influence (but not limited to just those people), ask them or determine through your conversation what they're struggling with, what's going on in their lives, or what their goal is in life or their career. Then offer to help. If you make a commitment to help‚ actually follow through.

If you make it a habit of being useful to the people around you, they are far more inclined to help you in the future. It is not a direct 1:1 payback. Don't keep score of who you helped and who "owes" you; it doesn't work that way. It's more of an aggregate thing.

The total effort you invest in helping others will come back to you in often highly unpredictable ways.

Yes, there will be people you help that never help you back. And that's okay. Give with no expectation in return.

But, realize that for every 10 people you help out, at a key time in your life or career, one of those ten (or a friend of one of those ten) will help you out in a critical way.

The key thing here is to stay in touch with the people you help. Make it easy for them to find you and vice versa. By the way, LinkedIn is great for this.

There's no more need for me to email everybody I know every few months to be sure I get their latest email address update (which used to be a huge pain).

Incidentally, your clients will very willingly use LinkedIn (even the senior clients) because they too "get it." To them, LinkedIn = Self-Updating Rolodex (address book).

So far I've talked about several kinds of assets including:

1) Financial assets
2) Relationship "assets"

Now let's talk about two more types of assets:

3) SIGNALING assets
4) SKILL assets

A Signal asset is something on your resume or bio that signals expertise or achievement of some sort. A Harvard MBA is an example of a signal asset. Even if you learned nothing from a Harvard MBA, you would still benefit immensely from having graduated from there.

My Stanford degrees are a signaling asset for me, as is my McKinsey background. In my work today, my television appearances and media quotes also provide signals of credibility to others.

I've often been asked to provide my insights to reporters as an expert source. For example, I've appeared on live TV for Fox, and been quoted by TIME, The Wall Street Journal, Forbes, Entrepreneur, and many others.

In my speaking engagements and corporate client work, I make sure to include those "signals" in my bios and that others mention them when introducing me for a speech.

Those signals did not happen by accident. I was very conscious and deliberate about getting them. I invested time, effort and dollars in securing those media placements.

Because in my world, having graduated from Stanford and being ex-McKinsey is a slight, but not an enormous differentiator by itself. And quite ironically, I find the average person (you know, my mother and mother-in-law) are far more impressed that I was on TV than anything else I've done in my career.

So signaling assets are another kind of asset you want to think about in your career. And in a moment, I'll tell you how to think about them in your career plan‚ right after I discuss the final type of asset -- SKILLS.

A SKILL asset is acquiring some knowledge or ability that makes you more valuable to others in the future. While I certainly did get a signaling asset from my time at McKinsey, I also got a huge skill asset as well.

I use what I learned from McKinsey (+ a lot of other stuff I learned elsewhere) nearly every day in my personal life and career. There's just something exceptionally useful about being able to create certainty out of uncertain situations.

In any career decision, you want to consider not only the income you'll earn from a particular opportunity, but also how a particular decision does or does not increase your personal assets -- financial, relationship, signaling, or skills.

One of the interesting things I noticed about my own career choices is that at nearly every step, I took that career opportunity with the lowest income.

My McKinsey offer was the lowest paying job offer I received. But I took it anyway, because it offered the highest increase in my ASSETS (particularly in signaling and skills). And with the benefit of hindsight, that ended up being a very good decision.

In all the jobs following McKinsey, I also ended up taking the lowest paying jobs -- in those cases mostly for the SKILLS value. Those employers would let me do things and take on responsibilities that 1) others wouldn't, and 2) would build the skills that I wanted to develop. Those too turned out to be good moves as well -- though it took several years for that to become apparent to me.

Even going back to my college days, I interned at Merrill Lynch for free -- for mostly signaling value, but I also got some skills out of it too.

I encourage you to evaluate both the income and ASSET growth value of any career decision. The highest income opportunities are often not the highest asset growing opportunities.

From a personal standpoint, I have been a very aggressive acquirer of skills -- often at the expense of income. I don't think I was very conscious of this at the time, but looking back, I realize I have been very consistent on this point.

The other factor to keep in mind is the cumulative effect of acquiring assets. For example, at the time I interned at Merrill Lynch for free, I was also working a part-time job elsewhere. The other job helped to pay the bills, but had no asset value what-so-ever. So I worked one job for income, the other for assets.

At the time, I had no idea what would happen from that one decision -- as is often the case with these decisions. But I'm certain the Merrill "signal" on the resume got me more consulting job interviews about a year later.

My resume went from being probably good enough to get an interview at some firms, to definitely good enough to get an interview at every firm. On the margin, that additional 10% - 15% improvement in my resume from Merrill made a noticeable difference.

That of course, led me to McKinsey, which led me to industry, then to entrepreneurship, and I accumulated assets all along the way.

Significantly, I could have very easily said "no" to the Merrill internship. It was about 15 hours a week. It was at night during prime studying hours. I had to do my homework on all the other nights of the week -- including weekends.

So I didn't get to play as much. I still had bills to pay so I had to work my other job to pay those bills... and I could have very easily said, "forget it." And in fact, most people did exactly that.

These efforts at acquiring assets have a powerful long-term cumulative effect. If you plot out your career trajectory, if you can get a 10% slope advantage over your peers, over a year or two it doesn't make that much difference. But over decades, that can make a big difference -- especially if you keep trying to increase the magnitude of that advantage.

You can apply this approach to signals, skills, relationships or financial assets.

A strong signal on your resume early in your career makes it easier to get the next signal, and the next one.

Developing even 2 or 3 strong relationships with others in your industry, and keeping in touch over years and decades, makes it easier to build relationships with even more people, and more influential people.

Acquiring a financial asset early in life (like my McKinsey colleague's Condo) allows that advantage to accumulate as well (I'm sure he went on to his 2nd and 3rd investment, well before I ever got to my first).

So the bottom line is that income is not the only factor to consider in a career decision. In fact, I would argue that once the income is enough to not starve to death, acquiring ASSETS should be the top priority.

On the flip side, I have watched people I know continually turn down opportunities to acquire the assets I describe… and they are now paying a penalty for doing so.

One person I have in mind took a higher paying job, but one that did not allow him to stay current in his field. Given the opportunity to network and meet others in his field or to play, he took every chance to play and relax.

If you do this in any one year, there is no really obvious negative consequence. But quite often, momentum takes over. In his second year at his job, he still had a good income, but his skills were even more out of date and his network only included people with skills that were equally out of date.

I've followed this person's career for well over a decade, and at this point it is very hard for him to get the better paying jobs because his skills are completely obsolete. His lack of investment in acquiring new skills has made him unable to contribute to employers around him in valuable ways.

What was interesting about this story, now about 15 years in the making, was I saw this problem in year 2 of his current career path. It was hardly a major insight.

All you had to do was read any major publication in his field (which I had a passing familiarity with) and you could see which skills were in demand and rising, and which were fading -- his were fading.

So why does stuff like this happen?

In a nutshell, acquiring career assets early in your career is either 1) financially expensive, 2) time consuming, or 3) highly inconvenient -- often all three.

Yet it is precisely early in your career where increasing the slope of your career trajectory by 10% or more has the greatest cumulative value.

With the benefit of hindsight, was I glad I did the Merrill Lynch internship many years ago (even though I gave up income, free time, and had to make up my study time and income elsewhere)? Absolutely.

Could I tell at the time that it would end up being a good investment of my time? Absolutely not.

The core tradeoff is this:

1) Short-term Cost with Long-term Benefit


2) Short-term Benefit with Long-term Cost

Explicitly pick your tradeoff, and don't be surprised by the consequences. Take one path or the other and eventually you get what you've earned (or haven't).

Just keep in mind that with the first approach (short-term cost with long-term benefit), the short-term cost is… well.. a cost.

The tradeoff isn't short-term no cost + long-term benefit.

It is a short-term cost (time, money, energy, hassle) to get a long-term benefit.

I find most everyone wants the long-term benefit, but comparatively very few people are willing to consistently endure the short-term costs to acquire the assets that provide the long-term benefit.

That's my thought for today.

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20 comments… add one
  • Francisco Jul 14, 2012, 7:23 pm

    Dear VIctor,in my case I have been applying your tendency since i graduated from college. I have always focused on the signals and skills assets that each job opportunity can bring to my personal learning experience , as well as trying to get the best on each task assigned. I have to recognized that ignoring the “Income” factor on these job issues has not been so easy and at times the sacrifice has brought a few regrets a long the road. MY questions to you at this time are:

    How long does it take for these intrinsic assets to show the cumulative powerful effect on the average citizen?

    In your opinion, what are the top skills assets require to achieve success in consulting and similar careers?

    KIndly regards


  • Dhawal Jul 11, 2012, 11:42 pm

    Excellent read, Victor.

    I learned about relationship asset in this book called “Never Eat Alone” by Keith Ferazzi

    But your perspective on “Signalling” was new for me. I agree one should assess one’s career options keeping all four assets in mind.

    Thanks for sharing.


    • Victor Cheng Jul 11, 2012, 11:54 pm


      Thanks. I heard Keith Farazzi speak at Harvard Business School a month ago. While his books are decent, he is much more interesting, sincere, and impressive in person than in writing.


  • Victor Cheng Jul 10, 2012, 8:06 pm


    The top firms don’t really check references. What they care about is which firms you worked for and how well you did (defined as promotions, on the job accomplishments).

    Perfect doesn’t exist. So there’s no point in beating yourself up over it. Whatever you do, do a great job. Make smart decisions. Put in the effort, the let the rest unfold.

    You don’t control the output, only the input. If the input you contribute is good, over the long haul this yields excellent results.


  • Jon Jul 10, 2012, 7:49 pm


    Another great article from Victor. Btw, I took your advice and accepted the offer from uToronto. Now this article also brought a question to me.

    Does Mckinsey or BCG seriously cares about your references or your past relationship with your supervisor, colleagues or even clients. I am asking so, for I am panicking 24/7 at my current job thinking if i do this wrong or if my smile is not big enough, I will not receive the recommendation and be thus rejected by the big consultant firm. This has gotten to the point where I cannot even do my job properly due to the stress of being “perfect” to get that spectacular comment to impress the top consultant firms.

    I mean they must understand that to get to where you are today, you had to “fail”.

    Victor, how do you set your limit? For a 19 years old, my work experience is spectacular, but the more i move up the ladder, the more i want, and my problem is that i always thing big…so the promotions i get are meaningless.. Where do you set the bar. Like at this position, I will be the happiest man on earth.

    Example, i got into utoronto, but because i didn’t get into upen or harvard, it feels like i failed…when many people would sell their kidney to get in.

    Now to the rest of you, what satisfactions do you get after obtaining that MBA from these “prestigious universities”. How do you manage to survive in a business world where no one does anything for free, and people are only nice to you due to “business ethics”.


  • Joe Jul 10, 2012, 6:11 pm

    I may not have much of signaling assets on paper. What I do is put myself out in front of people. It is a surefire to improve my skill assets in return I build a better signaling assets. Often, being in front of people such as at a conference and the opportunity is generate better in a dynamic environment better than a static resume.

    I have volunteered doing grunt work and be a eager learners. Those action has lead me to financial reward and enable me to meet more people.

    • Victor Cheng Jul 10, 2012, 7:41 pm


      I have clients who I suspect are similar to you — much more impressive in person than on paper. Once you know that about yourself, you leverage your strong suit — in person appearances.

      Once thing to consider is to parlay those in-person efforts into a stronger network. Strong signals on paper do NOT automatically translate into more relationships, but doing things in person IS much more conducive to that — so consider building relationships, helping those people, and stay-in-touch over the long term.


  • Akash Jul 10, 2012, 10:52 am

    Hi Victor,

    These are excellent advices. The article is quite appropriate especially at my current career stage. I just joined a new company after completing my MBA and the decision was a very difficult one. This was the least paying job offer among all but with the opportunity to do the latest cutting edge work that has great potential in the future. So this article is very re-assuring. I hope I made the right choice.

    Please do keep writing! Thanks

    • Victor Cheng Jul 10, 2012, 7:43 pm


      It’s hard to tell in advanced, but I can say this. Since the big strength of your current role is cutting edge work, make sure you actually get to do it and consider any opportunities you can to share the work your doing with the rest of your industry (writing white papers, writing articles, giving speeches at industry conferences).

      It is one way to parlay a skills asset into a signal. The key with all of this is to know what you want to get, what you are getting, and what you want to get next. It is all about converting one asset into another as you go, and eventually a lot of those assets into income at some point. It’s dynamic process.


  • Ana Jul 10, 2012, 6:42 am

    Hi Victor

    It would be stupid to not agree with the message your article is delivering, it is a great article.

    I have one question though.
    The name of the company I’m doing my internship currently isn’t a big one, it’s a boutique firm. So it is a rather weak Signal Asset, but it has offered me a stronger Skill Asset.

    I strongly believe that, as a soon to be graduate, my CV is scanned for Signal Assets.
    I also am convinced that the average recruiter will not spend the time to search/infer Skill Assets on CVs, when the Signal assets are so much easier to spot.

    Direct on-line applications seem to yield few responses if one doesn’t uses its network.

    What is the best way to communicate that I do possess the Skill assets in the very first stage of applications?

    p.s. your website is an invaluable resource – thank you!!

    • Victor Cheng Jul 10, 2012, 12:42 pm


      Your objective should be to parlay a skill asset into a signal asset – especially early in one’s career. In terms of getting a recruiter to see your skills, rather than the skills implied by your signals, there are two things that will help:

      1) for consulting, don’t apply through recruiting. Network your way to meeting someone in your target firm that is a consultant… And have them submit your resume for you, preferably after they’ve met you and personally determine your skills. The ideal would be to have that person walk your resume down to recruiting and say we need to interview this person. See all of my articles on networking and “non-target” schools which poses an analogous, lack of signal, problem at

      2) for industry, never apply via HR. Always try to find your way directly to the hiring manager. If you see a job posting on a company website, particularly for a smaller company where there execs are listed on their website, try to reverse engineer their email name convention and directly contact the person most likely to be behind the job posting. The hiring manager’s job is to say yes. The HR managers job is to say no.


  • Ig Jul 10, 2012, 2:47 am

    Wow! A really insightful piece.

    I really now see that this ‘asset building’ is a very deliberate effort and not a ‘by-product’ or nice to have.

    It definitely takes a lot of discipline and vision to execute!

    Thanks for this!

    • Victor Cheng Jul 10, 2012, 7:44 pm


      You’re welcome!

  • Sankalp Jul 9, 2012, 11:22 pm

    Hey Victor,

    Great thought !!
    I’m happy to share that I have also been valuing learning opportunities during my education and work life. I too did free, let me call it honorary :), internships at The Planning Commission of India, Corporate Executive Board, etc. Definitely those have helped me get more signaling and skill building opportunities in future. A lot of my decisions in life have been focused on the value we get from the learning opportunities. In-spite of being in the top 5% of the batch (amongst), I took the lowest paying job at the campus to pursue what I like doing.

    Also, I think another good idea is to follow your hobby seriously. I started teaching Physics part time to some students when I just entered college. I was just one year senior to them. And now, I have been teaching various subjects part time for the past 8 years. Not only it gives satisfaction but also it has now started me rewarding financially as well. (So much so that my current job pays me the same amount that I get from teaching. Although the time investment is of the ratio 7:1) But I’m still continuing my current job to ensure that I’m on the learning curve. What do you think about this ?

    Victor, It’s always great to read your mails and articles. Also, I thank you for your free case interview coaching materials on the net. Those have been really helpful. Would soon be writing you a personal mail in detail.

    Best Regards

    • Sankalp Jul 9, 2012, 11:37 pm

      Correction : 5% of the batch (academically)

    • Victor Cheng Jul 9, 2012, 11:46 pm


      Your situation is what I call the synthetically created perfect job. Most people look for THE perfect job. The reality is this often does not exist. But taking a portfolio approach, like a portfolio of stocks, it is possible to get the optimal mix of all the various things you seek – income, assets, personal satisfaction, etc…

      So if you get satisfaction from teaching, and the other job gives you skills and income, it can be a good approach.

      The second key thing is there is no one way to be right. It depends on your personal values and what you seek at a particular stage of your career.


  • Catherine Chen, Health Coach Jul 9, 2012, 8:13 pm

    Hi Victor,
    Very insightful points. What I also learned is that delayed gratification can lead to increased satisfaction with life in general. Raised by immigrant parents, I was brought up with the mantra “no pain no gain” which your article seems to suggest. I think this approach to a career is all well and good as long as one finds meaning and significance in all assets, otherwise one may wake up one day with the realization that the hard work resulted in no real fulfillment.

    • Victor Cheng Jul 9, 2012, 8:26 pm


      It helps a lot to like what you do… So instead of no pain, no gain,.. It’s more little gain + later bigger gain.

      For example, I deliberate do NOT keep in touch with influential people I do not like. I don’t enjoy it. It doesn’t feel real. Conversely, staying in with people I actually do like does take some effort, but is enjoyable in and of itself… And of course the habit has long term value as well.

  • Arjun Nair Jul 9, 2012, 8:10 pm

    Great text. This is a thought that keeps going on for me, is one getting too comfy with the skill set and the professional circles one hangs onto, or is it time to get out and experiment. As a 2nd year MBA student, i took the leap to experiment, and now is when the latter part of your text, which pertains to keeping in touch is coming into play. Initially i kept in touch with my ex-colleagues / bosses, but fell out of touch. Now, i am working hard to get back in touch with them. I have a question. If i send them interesting articles that i read / some status updates once in a couple of months, do you think it would look like spam? Would love to know what you think.

    • Victor Cheng Jul 9, 2012, 8:24 pm


      When you send people stay in touch emails, send emails 1 at a time. Always reference a shared memory or experience or something from your last conversation.

      If you’re going to write a newsletter and do a group email (I have one friend who does this), ask them if that’s okay.

      By the way, the value of a 1 person email is much higher than a group broadcast. Half the time it’s the fact that you took the effort to email them that is the valuable part.


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