Category Archives: Finances

The Secret to Creating Your Golden Years

Looking forward to your golden years? If you did 20 years of military service you will get there, likewise if you were diligent about saving and investing. Otherwise, join most of the rest of Americans throughout history whose retirement plan was very different. You might reasonably ask how this can be when the World War II and Korean War generation is having a relatively prosperous retirement. Consider the following:

The Secret to Creating Your Golden Years

People who are at least 70 lived through one or more of three of the most harrowing events in American history: the Great Depression, World War II, and the hot part of the Cold War – the Korean War. You would have to go back to the Civil War, almost a century before, to find a time when an entire generation of Americans collectively suffered so much.

These hardships had a profound effect on the behavior and values of what has come to be called the Greatest Generation. They matured quickly, married and started families young, climbed out of the depths of worldwide destruction by striving for and achieving a comfortable life. No generation since has suffered as deeply nor had the need to rebuild a shattered world. Neither the Vietnam War nor the worst post-World War II economic period, the recession of the early 1980s, compare.

Robust economic conditions coupled with a baby boom created the circumstances in which companies could offer defined benefit pensions and government entitlements had a broad enough tax base to support them. However, between 1979 and 2011, private sector workers with defined benefit pension plans declined from 31% to 3%. When first started in 1940, Social Security had over 35 million workers paying into a system that had fewer than 250,000 recipients, a ratio of 159:1. By 1960 that ratio had dropped to a still sustainable 5:1. Since 1980 the ratio has been in the range of 3.3:1 but in 2010, as the first Baby Boomers began to retire, it dropped to 2.9:1 and appears to be continuing down.

During the period from 1945 to 1970, there were 50 months of recession and unemployment rates were as high as 7.5%. During the next 25 years, although there were only 42 months of recession, the lowest recessionary unemployment rate was higher than the highest one during the previous 25 years and peaked at 10.8%. At the same time the birthrate has fallen to historic lows.

Together, these two trends spell the end of any chance that Baby Boomers and beyond as generations will be able to retire. While you might find this upsetting, in reality it is the World War II and Korean War generation that is the anomaly. The vast majority of people in the 19th and early 20th centuries worked through their lives to support themselves.

As you plan to live intentionally, I encourage you to take this reality into account, especially if you do not have a government pension or are not diligent about saving and investing. The good news is that it is beneficial to keep working since you will have a longer, healthier life as a result. For you, the good life means living a life you have planned for yourself. Intentionality will replace the ideal of the golden years.

Question – What are your plans for retirement? Please respond below.

Right and Wrong Way to Be Disruptive – And How to Use It for Success

Follow the entrepreneurship press and blogs and you will read plenty about being disruptive. It seems that no matter how things were done in the past they are wrong. I have not seen the term used yet but sooner or later it seems entrepreneurs will be called disrupteneurs. Are radical business concepts the route to success? Are people going to turn their lives upside down to adopt a new way of living or doing business?Right and Wrong Way to Be Disruptive – And How to Use It for SuccessMy answer to both questions is no. Here is why:

Do you remember DOS (short for Disk Operating System)? Complex and hard to use it nonetheless sought to disrupt the way people lived their lives and how commerce functioned. Yet it was not until Microsoft copied the ease and intuitiveness of the Mac Operating System in a DOS overlay called Windows that the personal computing started to become more widely adopted. The Mac OS and Windows helped people move far enough out of their comfort zone that they would try something new. DOS was too disruptive.

The first cell phones hit the market 40 years ago. They were very similar to push button landline phones except you could carry them around. The first smartphone, the IBM Simon, came out in 1994. It allowed people to manage their entire lives on a mobile phone. For all intents and purposes, it was a flop, lasting only six months on the market. It was too disruptive. Almost another decade and several iterations passed before people embraced smartphones.

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Successful business ideas today are no more disruptive than they were in the past. MIT Technology Review shows that with the exception of tablets, new technologies take seven to 30 years to achieve 10% penetration and another five to 39 years to go from 10% to 40% penetration. People’s lives are bettered in an essentially evolutionary way. Calling new products and services disruptive is a marketing ploy.

But before you consign disruptiveness to the trash heap, there is a place for unconventionality in entrepreneurship: at the conceptual stage of your product or service. Visualize combinations of completely unrelated products and services. From such disruptive notions, imagine a radical way of helping people and make it your vision, the end game of your business.

Then, figure out the incremental steps that people can take as their lives are changed for the better.

Question – Are you an early or evolutionary adopter and why?

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How to Achieve Better Health and Financial Well-Being

“When you have your health, you have everything. When you do not have your health, nothing else matters at all.” Augusten Burroughs

When you decide to live an intentional life, like most big changes typically the difficult part can be getting started. As I mentioned in my previous post, How to Get Your Life Moving in All Areas, I recommend you begin with fitness in the physical pillar. Progress toward goals in this area can be made quickly. Moreover, it is difficult to focus on mental and spiritual fitness when you are concerned about your health or financial matters.

How to Achieve Better Health and Financial Well-Being

The physical pillar of fitness comprises three realms:

  1. Health – Sleep | Diet | Exercise
  2. Finances – Cash Flow | Debt | Investments
  3. Play – Recreation | Hobbies | Entertainment

First, you need to assess where you currently are with respect to each realm. Some questions are:

  1. How much sleep do you get?
  2. What is the quality of your rest?
  3. How is your health?
  4. When was the last time you had a complete physical?
  5. What is your exercise program?
  6. What do you eat on a regular basis?
  7. How much income do you receive from salary, interest and investments, pensions, etc?
  8. What are your expenses?
  9. What preparations have you made for the future: emergencies, buying a house or car, retirement, etc?
  10. What activities do you engage in to relax?

These questions are designed to get you started. As you delve into this pillar you will think of others. You may need to consult with professionals, such as your doctor or financial planner. Chronic or debilitating conditions will complicate your plan to live intentionally, but need not derail it. Next gather sufficient information from reliable sources on such issues as sleep, diet, exercise, personal finances, and hobbies, so that you are comfortable making decisions about your life direction in each realm. Some of the resources I use are:

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Now, start setting goals. Three to five is generally the most you can work on at one time.  For example, you may be trying to get by on four hours of sleep a night but numerous studies show that seven is the minimum amount most adults require. If you want to lose weight, have more energy during the day, be able to work with greater focus, and have more patience with your spouse and children, being properly rested is crucial. So an excellent goal is to get seven hours of sleep a night.

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The essential tool for achieving goals in the physical pillar is self-discipline. Sleep disorders aside, getting the rest you need is a matter of being disciplined about the environment in which you sleep, the preparations you make before bedtime, the time you go to bed, and the time you wake up. It takes 21 days to ingrain a new habit but you should notice a change after as little as a week, perhaps less.

The state of your health, physical condition, finances, and play is essentially a factual matter, The path to improvement is well defined. Because you can control what you say and do it is within your power to improve your physical fitness. You are on the way to building your first solid pillar.

Start right now: Set your first goal toward better fitness in the physical pillar. If you have questions leave them below or email me and we will work together.

Question – How do you build self-discipline?

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Avoid This Basic Clash When Running Your Business

Perhaps the biggest challenge of being an entrepreneur, especially a service providing solotrepreneur, is the conflict that inevitably arises between keeping your marketing efforts going and serving the business that such efforts yield. Generally, in the beginning, everything is focused toward generating income-producing business. But once a sufficient amount comes in, the marketing efforts stop in order to take care of the clients. But once these jobs are completed marketing has to be ramped up again, often coinciding with a drop in income.

Avoid This Basic Clash When Running Your Business

For the first few years, I was in business I was caught in this seeming tug of war between marketing and serving clients. It was extremely frustrating especially since I felt I was always losing momentum while suffering through large swings in cash flow.

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I finally learned several lessons that helped me conquer this predicament:

  1. Marketing must never stop. Whether you are working alone or have a staff to service clients, your number one priority is to keep the marketing effort, and thus the flow of business going.
  2. The longer the lag time between acquiring a new client and getting paid, the more important consistent marketing is. Real estate agents have to constantly keep their pipeline filled because often there are several months between getting a client and closing a transaction. Also, many transactions are time consuming. It is tempting to be fooled into thinking that as long as you are busy working on deals you need not worry about marketing, But once all the escrows close, if you are starting essentially from scratch the commissions from the prior deals may not carry you through to the next batch of closings.
  3. Only a mature business can consider relying solely on referrals. Once you develop a reputation for quality work you will receive a lot of referrals. But changes in your industry may necessitate your still marketing for new business since mergers and clients going out of business often mean that referral sources wane or have to be courted again.
  4. Make your marketing efforts scalable. Whatever techniques you are using, be it networking groups, cold-calling, or social media, make sure that you can easily increase or reduce your time commitment so that you are consistently doing the same things while adjusting the volume. For example, early in your business, you might devote two or three hours a day to cold-calling. But as more of your time must be devoted to serving clients, rather than stopping just scale back your calling plan.
  5. Delegate your least productive servicing and marketing efforts. Determine which activities need to be sustained but generate the lowest return on investment, then, rather than stopping them, turn them over to an assistant. Interaction with clients, existing and potential, is probably the most fruitful use of your time. Once you thoroughly understand the less profitable tasks you can train someone to handle them.

Rather than being disheartened by the constant roller coaster of no business/ramp up marketing effort and too much business/stop all marketing, devise a plan that from the start has you consistently pursuing new business while providing excellent service to clients.

Question – What ideas do you have that would allow you to constantly pursue new business while giving the kind of service that will engender client loyalty?

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The Oldest New Concept in Entrepreneurship

Still looking for that brilliant idea that will guarantee your success in business? They are out there. And when someone unearths one and makes it successful they achieve tremendous wealth and fame. If this is your goal, by all means, keep looking.

But if you want greater flexibility to run your life, the ability to support your family, and less bureaucracy in your work environment read on.

The Oldest New Concept in EntrepreneurshipAfter 10 years running a small management company I found that numerous businesses like mine were being bought up because running them the way they had always been run was no longer profitable. Frankly, I had never had a great passion for property management. I was keen about eating, having a roof over my head, and many other things. I had two choices: innovate or sell.

Another 10 years later I did sell. By that time I was handling $25 million worth of property from my laptop. Wherever I had Internet access, be it a hotel room or Coffee Bean, I could take care of business. In these days of personal hotspots, I could have run it from the beach. My company was highly profitable because I substantially streamlined an administration-intensive business and made it virtually paperless.

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Dr. Samuel Johnson and Christopher Booker maintain there are only seven plots for literature and movies. To a large extent, that same can be said of businesses. Consider the following:

  • An online store is only today’s version of the Montgomery Ward catalog.
  • Blogging is just the latest means of pamphleteering and Twitter an even more up to date way.
  • Facebook is an asynchronous party line where you, instead of the telephone company, choose who listens to your calls.

The Internet is called a revolution. In reality, it allowed old ideas to be modernized.

Flourishing as an entrepreneur does not take genius or a unique idea. You need only find a way to do or make something better than your competition. Real estate agents at Century 21 The Masters are tops in the country because they are trained to concentrate intensely on the needs of people buying and selling homes.

Most successful entrepreneurs take a proven business and change something about it to gain a competitive edge such as:

  • Make a service more consumer-friendly. Mike Diamond plumbers show up at a specific time and are clean and well groomed. They get a premium over plumbers that only give a window during which they will show up and wear dirty clothes.
  • Handle business more efficiently. I leveraged off-the-shelf technology to save time, office supplies, postage, and many other resources. As a result, I could focus on my clients.
  • Offer greater choice. When you buy an iPhone you get a white charger and cable. But at Los Angeles Air Force Base there is a kiosk that has them in a rainbow of colors. At least two people are making money offering more choices than Apple does: the manufacturer and the vendor.

My success in property management came because I am very good at organization and efficiency not because I was brilliant at real estate. You can succeed by applying the skills at which you excel to a proven business. This is the surest path to entrepreneurial triumph.

Question – Where can you apply your expertise to improve the way a business is done?

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