I’ve been thinking a lot lately about something that I learned in one of my architecture courses: When you have a parcel of land, it is significantly more valuable than it will be once development begins.
I remember writing that idea down and summarily ignoring it and most of the course notes once the professor argued with me about how you didn’t need to discount future income but you had to discount future expenses — because that’s how he “proved” that the building in our example made more money the longer we carried our huge mortgage. But I digress.
Recently I’ve been thinking a lot about that phrase. I’ve recently graduated which makes me (in terms of my career) an empty parcel of land.
Obviously I have zoning restrictions — I can’t be a skyscraper (engineering), or a hospital (medicine) or a school (teacher) but I can be a retail store (business) or a bank (banker) or a courthouse (paralegal) or a whole range of other choices.
The problem is, once I’ve begun developing my parcel of land, it will be less valuable (easy) to develop anything else. If I start building a courthouse (as I did in 2010), it takes an enormous effort knock the foundation out and start anew. This is why I’m so frightened and am really taking my time in the job search — what if I build the wrong thing again? It’s much easier for me to build a bank later if I don’t have a 10000 square ft retail store foundation set — just like it’s easier to get zone changes (new degrees) now, than it will be once I’ve started development.
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Very good analogy.
Although it may be one way of looking at it, I do think that you can’t wait forever though. A decision must be made as time is passing. And if you wait too long, other development opportunities will pass you by (ie: good job openings) and you’ll just be left with undeveloped land (ie: you with no job). And that won’t look good to any developers at all. (ie: employers).
Bear in mind that there are still costs associated with a plot of land even if you don’t develop it. Speaking as a sky scraper, I know my building has the potential to house retail developments, offices and housing. There’s nothing preventing you from building a restaurant and a bank branch into a retail store either. Don’t worry yourself too much about external appearances too much. Industrial buildings turn themselves into great lofts, and gyms can pop up everywhere. Buildings can change purposes, so it’s good to think about that in your planning. Don’t however let your planning turn into paralysis.
Cassie recently posted..So Far So Good
What an amazing analogy! I love the idea of thinking of your life as a piece of land and you develop it in the choices you make! Certainly helps to keep the bigger picture in mind!
Savvy Scot recently posted..The Passive Income Series – Method 1: Get Paid to Browse the Internet
I love the analogy, and it is sadly very true. After spending the last two years of business school in a big IT firm, I found it very hard to apply for other jobs, even as a new graduate. Plus with professional connections it makes it much easier to stay in your field. But I didn’t enjoy it and took those jobs for the money only to end up miserable. Take your time, there are a few good personality tests that can help narrow down the possibilities of what you would really be good at. Not Cosmo’s tests, the kind employers do.
Pauline recently posted..13 money resolutions for 2013: #8 be happy!
Cassie pretty much nailed the problem with your metaphor, but I’ll add a little. There’s an opportunity cost to not developing your plot right away. Right now you’re holding off on developing, making sure you put up the right building. Except:
a) Most people don’t stay at the same job for 40 years, and they all manage to change buildings. I’ve changed buildings several times in the 11 years I’ve been working full time.
b) And for every minute you don’t put up a building, you’re losing money. There’s opportunity costs at play here, Getting the return on a less optimal building for a little while is better than no return at all.
Financial Uproar recently posted..It’s Time To Take The Next Step
I really like this analogy, but don’t let it frighten you off. Career switches happen – and early in your career, expect it! But look at it this way… before any skyscraper or school was built on that site, there was probably something smaller and unassuming there first. Perhaps it was added to, or perhaps that was torn down to make room for something completely different. But there was probably something there to start.
Mrs. Pop @ Planting Our Pennies recently posted..Equity Vs. Liquidation Value
Love this analogy, and I often think about that when I’m thinking about different skills that I could develop to further put myself in a niche in my field. I want to be careful and make sure that I’m developing the right skills, otherwise I might end up in an area of my field that I don’t even like!
Jordann @ My Alternate Life recently posted..Thundershirt Review and Giveaway
Wow – a land-use planning analogy. You’re awesome! I cannot comment any further because I’ve never seen anyone who isn’t a planner, make a planning analogy. Please excuse me while I gather myself up.
Country Girl recently posted..Financially Thinking: Introverts vs Extroverts
[...] yourself? The question was brought up incredibly well in a post on Vanessa’s Money called Developing my parcel of land. Vanessa brought it as discussion of her career, but the same principle applies, as for most of us, [...]
I really love how you worded this. It got me thinking and served as some of the inspiration for today’s post on my blog. Thanks!
A decision must eventually be made, but remember career changes are pretty standard these days. Your parcel of land can be redeveloped *grin*
Alex recently posted..Money and Happiness: What is Personal Branding?
[...] Developing my parcel of land at Vanessa’s money [...]