Wednesday, September 1, 2010

Life Skills – Part 1 of whatever

I recently attended a goddaughter’s wedding. During the reception, I was surprised (in conversation) by the lack of many basic “life skills” exhibited by the assembled younger wedding guests. Since they don’t seem to teach all of this stuff in school, here are a few of the most common:

#1 Your Money!

The 1st RULE OF MONEY – get control of your finances, else it will get control of YOU!

In his book “The Millionaire Next Door”, author Thomas J. Stanley offers the example of two doctors with very similar credentials and professional backgrounds. The first doctor lives comfortably, has amassed assets and investments, and has provided for his children. The second doctor has virtually no saving or investments, spends his entire paycheck, and lives in terror of not being able to provide for his family. See Rule #1 above (and maybe read this book?)

It is astounding how much debt young people have accumulated by the time when they graduate from college and joined the “working world”. It seems like they are trying to run a marathon race, while wearing CEMENT SNEAKERS.

CONSIDER BEST CASH FLOW: If you have a $10,000 student loan @ 6%, and $10,000 of Treasure Bonds paying 4% - congratulations – you’re LOOSING 2%! Doesn’t make more sense to sell the Treasure Bonds and payoff the loan? The answer depends on a number of factors (all of which are beyond the scope of this discussion); however the key point is - Consider the “big picture” batting order:
1. pay off all non-deductible debt (i.e., credit cards, revolving store charges etc.)
2. don’t add NEW DEBTS (stop digging yourself into a hole! Live within your means)
3. have a plan for paying off “useful debts” (home mortgages)
4. build an “Emergency Fund” of savings (i.e., cash which is easily accessed if car needs repairs, etc.) equal to 3-6 months of average expenses.
5. set-up a Special Funds (saving for a new house, major appliance, big vacation, new baby, etc.)
6. any excess cash should be used to build your long term investments (stock, EFT, etc.)
7. If you have access to a 401k (or similar retirement plan) – pay the best match amount (see below).

Should you do these in this order; or a little bit of each? That would depend upon your individual circumstances, and the amount of money which is available. Which action will give you, “the best bang for the buck”?

– Think about your Money Management; and make YOUR MONEY WORK FOR YOU, AS HARD AS YOU WORK!

The 401k is an interesting investment. The real value of a 401k Plan comes from the Employer Matching Contribution (which may actually double your contribution – hey 2 for 1; what a deal) plus tax-free investment income on both contributions. I doubt that a more generous investment is available anywhere. Your Plan Administrator can provide you with the “vesting requirements” of your plan – this is the point at which your employer’s “matching contribution” actually becomes YOUR MONEY! The real trick (if you want to call it a “trick”) is to minimize the expenses of the 401K, so that most of your income is compounded – don’t be fooled by “gross yield”. Consider that 7% Income less 3% Expense is a 4% Net Return on investment, whereas 5% Income less 1/2% Expense is a 4.5% Net Return on investment or ½ % more income per year – over 40 working years would be 20% additional investment value!!! A Final Note: if you leave your employer, the 401k is YOUR MONEY (plus the “vested contributions”). You can legally “roll over” this account into an Individual Retirement Account (IRA) at your bank, broker or Mutual Fund Company. The roll-over option can be a powerful tool to take full control of this investment potential while minimizing the administrative and investment costs, because you will have the full control – SO don’t goof it up!

A Final Note on Money
. Reconcile your Bank Accounts, Credit Statements, and Loan Balances – if a Bank makes a mistake, it will always be in their favor, so check monthly and keep them honest. To this end, you may also wish to employ some kind of Personal Financial Software (such as Quicken).

#2 - Time management – Time is your greatest asset!

You can’t control other people (friends, family or enemies); nor governments; nor financial markets, interest rates or currencies; nor even the weather. The only thing of which you may have a quantum of control over is: your own time – SO DON’T WASTE IT! Do you want to drive around with your buddies, shoot some hoops, play a round of golf, travel or just read a book? In the same way as the “MONEY” section discussed above; how you choose to spend your time is a very personal matter. The Critical Point is – know this truth and act accordingly.

My maternal grandmother lived a very stilted life. When she retired she spent every summer in the beachfront community of Ocean City, NJ; because she enjoyed it. One day, she had the opportunity to fly (her 1st time in an airplane at age 67) to Banff (Lake Louise) Canada. She had a marvelous time, enjoyed air travel, and began to plan a trip (with a lady friend) to San Francisco. However, shortly before Christmas of that year, she sustained a stroke, which paralyzed her to the extent that she could no longer travel – she died 7 years later, sadly having never seen San Francisco. KEY POINT: TRAVEL WHILE YOU ARE ABLE. Take advantage of work related travel opportunities, but don’t lie on your expense account!

#3 - The Law

Common Law Doctrine states that “Loss Follows Title”, this means (in simple language) that if you own it - protect it; and if someone else owns it – respect it. If you violate the first part, you may loss an asset; if you violate the second part, you may incur a liability (i.e., legal judgment, such as a fine). Hang on to your wallet or purse; don’t text and drive!

#4 – CYA: Get it in writing

With respect to dealing with other people, try and document (to the extent possible) their actions and reactions AS WELL AS YOUR OWN. The resulting paper trail makes it easier to defend your actions (if needed). While a written document is preferred (since this is what a Court is accustomed to reading), sometimes, send an e-mail is sufficient, i.e., “Per your discussion this morning – June 15th, I will call Bob and verify that he will….”

I once had a manager who categorically refused to put anything in writing; on the theory that if it worked - he could claim credit (because it was his unit); and if it didn’t work – he could deny any responsibility (I don’t know anything about it, I never agreed to that, I never authorized him to do that, etc.). In the days before e-mail, providing a well written Memo or Action Plan would be sufficient to document your assignment (and if he didn’t agree with your memo – why didn’t he object at the time???).

#5 – Everything, in life, is negotiable.

I highly recommend reading a book by Herb Cohen entitled: “YOU CAN NEGOTIATE ANYTHING” (Bantam Books - 1980). Since life gives us few “gifts”, most of what we have or become, occurs as a direct result of our ability to “make a deal”. In the novel “THE HONORABLE SCHOOLBOY”, the British spy says to the Chinese spy that he wants to make a deal; and the Chinese spy corrects him and says, “… you want a commodity; the deal obtains for you, the commodity …”. This is the key point in any negotiation: What Do You Want? Focus on your goals and objectives (what you want) THEN determine the best cost/benefit/ value way to obtain the objective

#6 - Work Is Not a Job, and a Job is not a career.

Nobody “owes” you anything in this world (I’m very sorry to be the one who tell you this simple fact). In some cases, there are a fixed number of seats at the table, so if you want a seat, you are going to have to push someone away – and (generally) they aren’t going to be happy about it! This means that your gain will occur at the expense (or detriment) to someone else. The best way to succeed, and get a seat at the table is to coop other people, such that your agenda becomes their agenda. Thus they “invite you” to join them at the table – they make room for you.

While it is important to do a “good job”, it is also important to be aware of the “political environment” in which you are working. Everyone with whom you come into contact has an agenda. Understanding how they can help or hurt you, will depend on what you want, and how any arrangement can be “mutually beneficial”.

In dealing with your Boss / Manager / Supervisor, it is very important to understand how they perceive the world and your place within it. Some bosses are mean, some are smart, some are kind & caring and (unfortunately) many are just scared (the most dangerous boss is the one who is VERY SCARED). If you find that you can’t work effectively with your supervisor (for whatever reason) and you’re certain that you have made a “best effort” (tried to “work it out with them”, talked to HR, etc.), then the only solution is to get out and do something else – Life’s Too Short, to waste your time working in pain (or working for a “Jerk Boss”). The alternate plan in this situation would be to stage a coup d'état and overthrow the tyrant.

Your Colleagues / Co-workers / Associates
“Plays well with others” is a box checked on your Kindergarten Report Card. This applies to the folks with whom you will work. Consider their agendas with respect to yours and that of the boss.

Support and Administrative Staff - having Big Friends in Small Places.
Good relations with the support staff, is a valuable (critical?) source of inside information and assistance. If you treat your support staff like dirt (after all, you’re a superior college graduate), they have mysterious and magical ways of getting back at you that you could even imagine (remember Melody Griffith’s character in the film “WORKING GIRL”?) Alternatively, if you are respectful and courteous, you can create lifetime friendships (I still get Christmas Cards from two of my favorite administrative assistants, and they each retired 20 and 15 years ago). KEY POINT: Never forget your manners – it pays huge dividends.

In the days before PCs, most large corporate offices employed a “typing pool” of staff workers. On fine day I was entrusted with a large report whose preparation in previous years, had encountered many logistical problems and delays (I got the assignment because I was the new guy and the senior people dumped this headache on me). Before the new years report was to be assembled, I met with the staff and manager of the Word Processing Dept. (in advance) to determine how the process could be “improved”, and implement many of their suggestions. The end result was that the report was prepared in record time, with fewer corrections and with superior quality. KEY POINT: I later wrote the supervising manager a short note of appreciation, which (being the 1st formal “Thank You Note” the unit had ever received) was immediately posted in their break room. From that day forward – all of my typing seemed to get higher priority. The next year, the senior staffer “fought” over who was going to do the report – but the Boss, having received so many congrats from his management – reassigned it to me.


If you are a slave to your job, then you are a “lamb for the slaughter”. You can gain some sense of empowerment by (on the first day on the job) typing your resignation, putting it in a sealed envelop and storing it in the top drawer of your desk. Whenever the pressures of your position become unbearable – you have already prepared your exit plan. The power to say: “I QUIT”, is among the most empowering statements in the English Language – see Money above, so you have the necessary Reserve Funds to carry you over until you get your next assignment.

The Annual Performance Review Process – Bark twice for the Dog and Pony Show. Sadly, the Annual Performance Review is the most poorly preformed activity in all of Corporate America – a wonderful opportunity to assess (a) your efforts within the organization and (b) how the organization perceives your value is usually missed because managers are usually too lazy (or incompetent) to job correctly. [POINT TO CONSIDER: Since each manage is evaluated in turn; don’t good performance reviews start with the Board of Director’s assessment of the CEO?]

Doing your own review is the worst managerial “cope out” of all time (and a very clear indication of a lazy supervisor). Since anything your say against yourself, will be used against you; I suggest you rate yourself EXCELLENT or 100% at everything; then make them explain why you’re not excellent – remember you get no points for “fairness” in self-assessment. Generally, managers only seem to remember the last 2 months of your efforts – so help them by keeping track of your activities and progress.

Here’s a great tip. (1) Block of some time before your leave on Friday afternoon, to summarize your week (I use 4x5 scrap paper). What did you do well? What did you do poorly, and how are you going to fix it or do differently next time? What’s on your TO-DO List for the next week? (2) On the last Friday of each month – summarize the results of the previous weeks. You may want to send the Boss an email of this summery. (3) When your performance is being evaluated, you will have a summary of your activities and their results. (4) KEY POINT - If you have staff in you direct reporting relationship – do a weekly sheet and summary on each of them; as this will aid you in preparing their performance review as appropriate. Improving the quality of the performance reviews which you give, as good as they can be helps to build loyalty and teamwork.

GOOD LUCK or as we say here in New Jersey, “BONA FORTUNA”


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