Monday, August 29, 2016

Detention Taught Me How to Sell


"Here's to the crazy ones, the misfits, the rebels, the troublemakers, the square pegs in the round holes... the ones who see things differently -- they're not fond of rules... You can quote them, disagree with them, glorify or vilify them, but the only thing you can't do is ignore them because they change things... they push the human race forward, and while some may see them as the crazy ones, we see genius, because the ones who are crazy enough to think that they can change the world, are the ones who do."  -Steve Jobs

I was a good kid growing up (my mom just rolled her eyes).  Seriously!  I got decent grades.  I didn't get in too much trouble (nothing major anyway).  But I spent A LOT of time in detention, mainly for skipping class.

A good friend of mine, Mike Penney, and I were chatting about this the other day.  He is a Marine veteran also and fellow entrepreneur.  He had just released his latest podcast about the Insecure Entrepreneur (check it out... listener discretion is advised... http://www.cigarsandseastories.com/114-insecure-entrepreneur/).  I loved the podcast because he talked about how the misfits and rebels who were bored at times in school, but good kids, ended up in detention, the military, and later started businesses.  The script wasn't a good fit for them.  They needed something different to get engaged.  There are certainly some parallels about throwing away the script.  Those of you who know me well know that I often go off script.

Penney and I reflected on our countless hours of detention.  As we were chatting I realized that I learned how to sell in detention!

I would skip class and go feed puppies at the humane society... or something like that.  I don't recall exactly what I did but I'm sure it was noble and trying to save the world somehow.  Then I would finally come to class and the Vice Principal would pull me out of class to send me to detention!  She was out to get me.  Nobody believed me until she targeted my cousin, who probably should been have granted Sainthood (if that's a thing), because she found out we were related.

The Veep called me into the office one day WITH MY PARENTS!!!  She threatened to kick me out if I didn't show up to school more.  Are you kidding me???  My grades were solid.  This was BS!  

I went off script.  I channeled my inner Perry Mason and told her how ridiculous it was to pull me out of class when I finally showed up.  BEST. ARGUMENT. EVER.  (mic drop).

She countered my epic rant by assigning me to 8 weeks of Saturday detention.  (GULP). Excuse me, did you say Saturday?  DOH!  Epic rant turned epic fail.

The first Saturday detention was a great learning experience.  It was a few hours long, maybe 8-12?  I quickly realized that nobody (including the teacher) wanted to be there.  I spent some time networking and getting to know the landscape.  The teacher had a night job too and slept in the extra bit instead of eating breakfast.  Bummer.  I got home around 12:30, having already missed the morning feedings at the humane society...

The following Saturdays I drove through McD's on my way into confinement.  As it turns out I was never as hungry as I thought I was when I ordered.  I'd usually get home around 8:45.  My mom was pretty excited to see me.

Moral of the story- sales is all about finding THEIR win first.

Raise a glass.  To the MISFITS (and the teacher who let me out of detention...)

Cheers!
Nick   


Wednesday, August 24, 2016

Financial Planning Part 2 (of 4)


William Shatner once said, “If saving money is wrong then I don’t want to be right!”
In part 1 of the financial planning series, I mentioned the beginning elements of a financial plan, coming up with a budget to help you hit your goals. Now it is time to walk a bit further down the path and put some of that “extra money” to work.
One place that people sometimes forget about focusing on is an emergency fund. I view it as a piece of the foundation in the road.
Things happen in life that are unpredictable and often expensive.
Note it is an emergency fund, not a vacation fund. That can be one of your goals. One thing to remember is if you have to use it, you need to prioritize replenishing it.
There are 5 questions to ask yourself as you build your emergency fund to replace income.
  1. How much time will it take to replace your income? The gold standard is 3-6 months. If you’re in a specialized field or high up in a company it may take longer to find a similar job.
  2. What could you do as a side hustle to offset the delta while you’re out of work? Side jobs, teaching skills you have, consulting, selling some of your stuff online… All of those could help bring in some money.
  3. How much flexibility do you have? In your lifestyle? In your career? In your location?
  4. What’s your plan for healthcare? What are your options?
  5. What resources are available to help? Use sound judgment when reaching out for help, but it is important to know where you can turn in a pinch (not just for money).
Once you have an emergency fund in place it is time to focus on removing debt and investing. There is a lot of debate about which should come first.
The best thing to do is to crunch the numbers for your individual situation to see where you can get the most for your money.
We will start by talking about debt. There are a few numbers to keep in mind when talking about debt. In general, the rule of thumb is try to keep your housing expenses, which includes mortgage, tax, and insurance, under 28% of your gross pay (before taxes). And your debt to income ratio should be less than 20% (excluding housing) of your take home pay. The other number to know is your credit score. Credit cards companies will provide it to you. There are also several companies out there that will monitor it for you. It is worth reviewing your credit report to ensure it is correct. If it is not, address it immediately. It is important to maintain good credit history because it directly impacts the rates you can borrow at if you need to.
If you do have too much debt, the first thing to do is assess the situation. Make a list of everything you owe and the terms. From there come up with a plan to tackle it. You can either pay off the lowest amount first or the highest interest rate first. The most important thing is to have a plan and go after it. Once you do, you will really be able to accelerate your investing towards your goals.
As I mentioned in the Investing 101 series (Basics of Investing and Investing Risk and Noise), there is no once size fits all approach to investing. Everyone comes at it from a different angle. Understanding what your objectives are and how much volatility you’re willing/able to stomach will help you determine the appropriate approach for you. There is a lot of information out there about investing… Too much in my opinion. It is easy to get confused. If you don’t understand what you’re investing in, the risks, and the fees it is probably not a good fit for you.
When talking about investment objectives, we focus our attention on a few buckets: preservation of money, current income, and growth. There are some variations within each bucket as well, but some things to consider when determining the appropriate bucket for your situation are age, how much time you have to reach your goal, your stage in life, your financial position, and your individual circumstances.
In general, it is a good idea to focus retirement investing on tax advantaged accounts such as 401k, IRA/Roth IRA before opening a standard brokerage account. Once you have your retirement investing plans in place you can start focusing on college funding, then paying down your mortgage. There are many people out there that can help you weave through this process. Finding an advisor that is a fiduciary, which means they have to act on your behalf, is strongly encouraged.
Remember the power of compound interest? The sooner you start paying down debt and investing the more power it has.
That’s enough to digest for now. In my next post, I’ll continue down the path of the elements of a financial plan and discuss insurance and taxes. Then I’ll conclude the elements of a financial plan series by discussing retirement strategies and estate planning. Have a great day!
As originally posted at http://centsai.com/financial-planning-part-two/

Wednesday, August 17, 2016

People Have to Know You, Not Just Your Product/Service

"People don't care how much you know until they know how much you care."  - Theodore Roosevelt


Combine that with the fact the people do business with those who they know, like, and trust.  And to top it all off, we live in a largely digital world that complicates things even more.  At the end of the day, it is hard to grow a business.


I talk to financial advisors every day about helping them grow their practice.  Many of them walk me through their process of meeting with prospective clients.  It is a fact finding mission and borderline interrogation!


When they do talk about themselves, it is typically about investments.  Many of them are missing the mark.  They are "getting to know their customer", but not allowing their customer to get to know them.  After all, their value to their clients is not the investment piece, it is in the relationship.  It is in the plan they create to help people achieve their goals.


Not everyone is looking for a comprehensive plan, but those who are should get help from a fee only CFP (ideally one that uses Divvy for the investment piece (insert your favorite smiley face emoji here...maybe even one with sunglasses)).  Find one you know, like, and trust.


You have to make your interactions with people meaningful.  You have to make your interactions count.  You have to be yourself and get to know each other.  


I read an article a couple weeks ago in Inc by Chris Heivly, managing director at The Startup Factory.  He knows a little bit about startups and meetings... Click here to read the article.


It talks about a friend of his who had a pretty intense meeting with General Wesley Clark.  According to Heivly, the interaction changed the way Chris looked at meetings... forever.  WOW!


That got me thinking about the most impactful meeting I've ever been on.  In sales/business we want to do an info dump to show how great we are.  We also know that we should ask questions to learn about our prospect and provide a solution to their problems...heck your product is so great it could probably solve the world's problems!


The most memorable meeting I've ever been in was about 10 years ago.  I was in sales for a large telecommunications company at the time and I managed all of the federal accounts in NC.


After several failed attempts, I FINALLY landed a meeting w/ the Commanding General (3 stars) at Camp Lejeune.  I was aware I only got the meeting because his current provider recently upset him.  It didn't hurt that I am a Marine veteran as well.  Either way, I had one shot with this guy.  He didn't like sales people.  And he certainly didn't like taking time out of his busy day to have a meeting with one of them.
He was cordial but firm at introduction.  He made it clear I had 20 mins.  I set my phone on the table (on silent) just to keep track of time.  About 5 mins into my song and dance, my phone rang (on silent but I saw it).  Then again.  And again.  My wife knew where I was and had just called me 3 times in a row.  NOT a good sign.  It is those moments when you have to make a decision and know where your priorities are.


To the General's disapproval I explained what I just saw on my phone and told him I had to take it.  I excused myself and called my wife.  As I came back in the room the General looked at his watch and asked if everything was ok.  I began to gather my stuff up (knowing that I just blew a REALLY BIG deal) and told him, "Yes, sir.  My wife just wanted to inform me that 2 bunnies were doing it in our back yard."  I apologized and told him to have a good day.  He burst into laughter!  We ended up going to lunch and chatted for another hour or so, mostly about how ridiculous our wives were.  We got the sale.  And I educated my wife on what constitutes an emergency regarding multiple calls.

Moral of the story.  People have to get to know you not just your product/service.
 

x

Thursday, August 11, 2016

Getting Started with Financial Planning

Financial planning. We’ve all heard the term before but what does it really mean? Aren’t financial plans just for the uber rich? Well, I’m here to explain that you don’t need to have a 100 foot yacht with a helicopter landing pad on it to start thinking about putting together a financial plan.
Some financial plans are more complicated than others and can range in cost from a hundred to tens of thousands of dollars when completed by an industry professional, depending on the complexity.
A good place to begin is to note that a financial plan is something just about anyone could use. It is essentially a road map for you, which details where you are now and gives you action items to get where you want to be. Also worth noting is that it should not just be a tool used by an advisor to find ways to sell you more stuff. If you use an advisor to help you with your plan make sure you understand how they get compensated before you begin. I’d recommend looking for someone who is a fiduciary, which means they have to act in your best interests.
My goal is to help you to understand what a financial plan is and shed some light on the some of topics which should be included in it.  Let’s get started…
What is a financial plan?
A financial plan is an evaluation of your current financial state compared to your desired future financial state with action items to help you fill in any gaps.
It is something that should not be rigid. It is a fluid document that should be reviewed annually and whenever an important life event occurs.
What a financial plan is NOT? As I mentioned earlier, it shouldn’t just be used as a tool to sell you stuff. It is also not set in stone.
Why do you need a financial plan? A financial plan is something that will help you clarify your goals and give you action items to help you achieve them. It will also help you be better prepared for life events.
General Patton once said “A good plan executed now is better than the perfect plan executed later.” I like that quote a lot. To me it means: have a plan, take action, and adjust as needed.
Earlier we talked a bit about a financial plan being a road map to help you achieve your goals.
The real value in the plan comes from the actions you take to get to where you want to go.
A general process in working through a financial plan begins with figuring out your goals, then looking at where you are now. After that you should assess the gaps, come up with strategies to overcome them, and specific action items to help you along the way.
Goals- This is fun part! These are financial goals. There could be many. You should assess each one separately. Start general and work your way into more specific goals. As you get more specific make sure you have a definitive way to measure your progress. You can adjust it as you go. Remember it is a fluid document after all. Each goal should have its own time frame as to how long you have to save for it and potentially how long it will take to spend the money saved.
Now that you have some goals in place, it’s time to assess your current situation. The most important thing to do here is be honest. Take a solid inventory of where you are now. From there you can make some assumptions as to where you will be if you continue the current trends. I recommend being conservative with your assumptions. It will only help you make better decisions as you go. Some questions to ask as you’re working through the assumptions include: How much will you be able to save with future income? Raises? Inflation? Benefits? Investment earnings?
So far we’ve figured out goals and assessed our current situation. Next we need to address any potential gaps between where we are and where we want to be. With each goal come up with a strategy or approach to filling the gaps with specific action items to help you do it. There are several tools out there that can help you with some “what ifs”.
Part of figuring out specific actions items to help fill the gaps involves sticking to a budget. I know. I know. I said the dreaded B word. A lot of people think of budgeting like dieting. When times are tough they tighten the belt and when money is flowing a bit more they forget all about where the money is going. I refer to that as yo yo budgeting. It’s similar to yo yo dieting where people lose weight while on a new fad diet then gain it back as soon as they stop. It we just eat balanced meals, focus on moderation, and exercise we’d probably be better off than bouncing around to a bunch of different diets. It doesn’t mean we can’t ever eat chocolate. The same goes with budgeting. Budgeting does not mean you can’t have fun. It just means that you allot for where all your money goes. It is important to make sure you allot some for entertainment each month.
There are several tools out there to help you track your budget. Starting out I recommend doing it the old fashioned way, with a pen and paper. Every day for a month, write down everything you spend money on. You may be surprised when you see the results.
After you have a solid log of spending, it is time to see where the opportunities are. Check all of your fixed expenses. Are there any areas that could be scaled back? You never know until you ask. Check the variable expense. Are there any area that could be scaled back there? Once you find the opportunities to save, you make a budget for the next month. You can reallocate the savings towards your goals. Remember to make sure you continue to allot some for entertainment. Rinse and repeat.
Hopefully you now have a basic understanding of the first few elements of a financial plan, which focus on awareness. In a future post we will talk about saving, investing, and debt. Have a great day!
As originally posted at http://centsai.com/getting-started-with-financial-planning/

Thursday, August 4, 2016

Investing Risks and Noise

“Risk comes from not knowing what you’re doing.” – Warren Buffett
In a recent post titled Getting Started: Understanding the Basics of Investing I mentioned there are varying degrees of risk and reward with investing.
There is no one size fits all approach to investing. Everyone comes at it from a different angle. Understanding what your objectives are and how much volatility you’re willing/able to stomach will help you determine the appropriate approach for you.
When talking about investment objectives, we focus our attention on a few buckets: preservation of money, current income, and growth. There are some variations within each bucket as well, but some things to consider when determining the appropriate bucket for your situation are age, how much time you have to reach your goal, your stage in life, your financial position, and your individual circumstances.
In general, the less time you have, the more conservative you should be because you won’t have a lot of time to make up for potential losses that may occur. And if you have a lot of time on your side, you may be able to afford to be more aggressive because you’d have more time to make up for any losses that occurred and you’d be able to benefit more from compounding interest. A more conservative approach tends to focus on protecting the money you’ve accumulated. An aggressive approach would focus on growth and not be concerned about volatility along the way.
Peter Lynch, who is considered one of the top investors of all time, said “Everyone has the brain power to make money in the markets. Not everyone has the stomach.”
When the markets are going up, it is easy to be euphoric about your strategy. When the markets go down it can be hard to look at the big picture. If you are losing sleep about the volatility of your investments, you are probably taking on too much risk in your investments.
Another factor that is helpful in determining your risk tolerance is how much you want to be involved. Do you have the time/desire to research and understand which investments are most appropriate for you? Just because your neighbor is investing one way, it doesn’t mean that is the best thing for you. The most important thing to remember about risk tolerance is that it is individual.
At any given moment, you could go online and find what seems like a million different theories on how you should invest your money. How do you know which one is right for you? How do you cut through the noise?
At a basic level it is important to realize that is possible to have multiple paths to the same end result. There is not a one size fits all approach to investing. Your job is to educate yourself enough to know what could fit into your overall strategy and just let the rest remain as white noise in the background.
The way to do that is to make sure you understand what you’re buying, understand the risks, and understand the fees. As a whole the financial services industry has confused the masses. If you don’t understand what you’re buying, the risks, and the fees it probably isn’t the right investment for you. Let it be noise. Let most of it be noise.
There are billions of dollars (maybe trillions) that flow in and out of the financial services industry. At the end of the day the talking heads are most likely trying to get a bigger slice of the pie.
Investing is not a hard science where there is concrete answer. It is a soft science that deals with people and emotions. The fact is that when economists predict the next Great Depression and financial analysts predict the next great stock, they are expressing opinions. Those opinions are based on data, but the data have one HUGE assumption. That assumption is that they know how humans and their emotions will react to certain events. That assumption in itself has some flaws. Nobody can predict with 100% certainty how humans and their emotions will react. And since the buying and selling in the markets are largely driven by humans and their emotions, it is important to realize that economists and analysts are expressing their opinions.
Educate yourself enough to understand your strategy. Understand what fits into that strategy. Understand what you’re buying, the risks, and the fees. Beyond that, let all that noise become white noise in the background that helps you sleep.
As originally posted at http://centsai.com/investing-risk-and-noise/
Cheers!
Nick