The FIRE movement is everywhere these days and at times it seems like every possible related topic has been covered. But somehow, I haven’t seen a lot of discussion of the topic I want to cover today. As a finance guy, I’m all too familiar with how taxes work. When I was younger, that was one of the reasons I wasn’t too keen on getting a high paying, high commitment job – although I eventually found myself in one anyway. What my younger self saw, and what will ultimately lead to my much earlier than average exit from such a situation, is that there is a diminishing return effect. And that is especially true when you consider that in most cases, making more money requires working more hours. Those hours are literally the building blocks that make up our lives.
The more you make, the more of your money is taken away. It can
seem fairly innocuous when you’re working forty hours a week and making an
income somewhere in the average realm. In fact, all things considered, many
people are breaking even or even getting more than they put in to begin with.
But someone has to pay the bills, and if you’re working closer to eighty hours
a week and making six figures (or more), that someone is you. For some folks,
the reality is that when all taxes are considered, about half the money they
earn is gone before they ever see it. So in another way of looking at the
situation, they’re working twice as much, but only being paid for half the
Why would anyone take that deal? Sure, some people are
workaholics. Some truly love what they’re doing to such an extent that they
would be doing it even if it paid nothing. But for the vast majority of us, we
do it because we want the money because we have expensive lifestyles to pay
for. But what good is an expensive lifestyle if you’re spending well over half
your waking hours working? What good is it if you don’t even get paid for a lot
of those hours when all is said and done?
The cheaper your lifestyle, the less you have to work for
free. Let’s say you only spend about $20k a year, as my ex-wife and I did when
we were first out of school and clinging to the student lifestyle for a little
longer so we could pay off our student loans quickly. If all you needed was
$20k a year, you could work a job paying just a little more than that and live
very nearly tax free (actually, you would almost certainly be getting back more
than you paid in). In another way of speaking, your income efficiency would be
at or around 100%. If you could tolerate that lifestyle, there would be an
incredible upside in terms of having to invest very little in it. But now let’s
say you spend $50k a year, which is actually still below average for United
States households I believe. There’s no way you’re going to make that much
without paying taxes. So your income efficiency goes down and your lifestyle
costs you more of your life. And the trend continues until you’re well into the
six figures and your income efficiency gets to be as low as roughly 50%. It can
go even lower than that in places like California. And lifestyles tend to be a
tad expensive there too, so it’s no surprise that those people are fleeing to
Texas in droves.
It pays to keep your lifestyle expenses as under control as
possible – quite literally. And remember, to the extent that more money
correlates to more hours worked, you are literally paying for your lifestyle by
working more hours (in other words, giving away part of your life) for free.
This brings me back to the title of the post. How much of your life will you
spend working for free? The foundation of the answer is in the cost of your
So next time you’re considering spending money on something,
you may want to try framing the question this way. Would this purchase bring
enough value into my life to compensate me for spending even more of it working
for free than I am now? In some cases, the answer is going to be yes. Most of
us have decided that being able to drive where we want, when we want, in a safe
and reliable vehicle, is worth it. But you have to decide where to draw the line.
Most of us aren’t driving Ferraris, for example. Today my suggestion is that
you take the portion of your life you are literally giving away into account as
you make these decisions. You only get so many hours before your time is up.
I’ve reached a critical point. The stress of my situation has increased to such a degree that I need to address it in a very purposeful way in order to keep it from destroying me. It has literally begun to manifest itself in physical symptoms – terrible headaches that refuse to go away, shortness of breath at times, my heart rate speeding up for no apparent reason, etc. Obviously, I need to first acknowledge that I’m creating the symptoms by handling things the way I am on a psychological level. Then I need to figure out exactly what I’m doing, why I’m doing it, and what changes I need to make. I have the entire day (I’m writing this on Sunday) to dedicate to doing just that while I also work on the usual chores everyone has to do to keep life moving along smoothly. As part of that, I decided to write a post about the situation. I’m hoping that it will both help me to see things in a different way and inspire someone else to work through something of their own.
The heat is up about as hot as it can go. My employer’s
firings have continued and while we’re being reassured that anyone left is safe,
that, of course, means nothing beyond that the company has an interest in
tamping down the panic among its remaining employees as much as possible. Already
a couple they didn’t intend to lose, including our perennial number one rep,
have escaped and the consequences to the bottom line will be severe. They’ve
done it to themselves with their panicked reaction to the circumstances – and it
goes way beyond simply firing a large percentage of the sales force. I’m very
happy for him because it sounds like he is in a genuinely better situation with
enormous potential. But guys like that will always have employers lining up to
pay them basically whatever they want. For me and most of the other reps who have
neither been fired, nor found the door on our own, better options aren’t
necessarily available, especially at a time like this.
Every last one of us is looking, of course. But it’s not so
simple. Over the last year or so, our broader industry has been absolutely devastated
by a massive oversupply problem that has crushed revenue, putting hundreds of
small, medium, and even large businesses under and thousands of people out of work.
If one of us were to find a job at another company within the industry, we
would very likely be jumping out of the frying pan and into the fire. You never
know the reality of a job until you’re actually doing it and under the current
circumstances, that reality is very unlikely to be a good one – no matter where
you go and no matter how much a biased recruiter gushes about how great the
opportunity is. Every company is dealing with its own version of the same
problem right now.
So how about getting a similar job in a different industry?
No dice there either. First off, most of us are finding that there is very
little interest in our services in other industries because even though our skillsets
are extremely valuable in the right circumstances, we are not exempt from the fact
that most employers these days want someone who is already doing exactly the
same job they are applying for. While this is obviously a short-sighted attitude
that has made hiring quality people more and more difficult and caused significant
structural problems in our workforce, it’s still reality. Besides, even if I
could get into a different industry, it probably wouldn’t solve my problem for
Why not? I’m in a barometer industry. When things get ugly,
we tend to get hit first. When things improve, we also tend to see that first. So
if I leave now after fighting a year of industry wide recession, I will
probably find myself in rapidly worsening conditions as the recession spreads
to my new industry. And to make matters worse, my current industry will likely
be in recovery mode by then. But having just changed jobs, I would be taking a
huge career risk at that point by doing so a second time in a short timeframe. It
is best to be in that 3-5 year tenure range before you make a switch if at all
possible. Anything less is likely to produce a suboptimal outcome in a variety
So what should I do? I believe my best option is to continue
to stand and fight. I’ve made it this far and besides, bailing out doesn’t appear
likely to be possible, or even profitable. Going back to the beginning of this
post, since I can’t adjust the outside circumstances, I need to look inward to
improve the situation. I’ve already made the disappointing decision to stop
taking flying lessons. I was really enjoying them, but I simply can’t afford
the time the overall process was taking up anymore and it’s not something that
can be “half-assed.” I’ve also cut back on writing for this blog, although I did
so a little more than intended, dropping from three posts a week to one. I
intend to get that back up to two as I had planned.
The biggest thing I need to work on is to focus on
optimizing everything I can control and not letting the things I can’t stress
me out the way they have been. That means doing all those things that I know are
crucial to my continued success to the best of my ability every day. It also
means shutting out the noise. Or, as one of my more senior colleagues told me,
in times like this, you just have to keep your head down and work. This is one
of Stephen Covey’s seven laws and if you haven’t read his book, I strongly
recommend that you do.
I have to be as mentally strong as I possibly can right now.
The pendulum is going to swing back the other way for us. It always does. For
all I know, it could happen as soon as a few months from now. Even if it doesn’t,
it is almost certain that we’ve seen the worst of things. It would be a tragedy
to fight so hard for so long and then fall apart so close to the finish line –
the equivalent of being among the last soldiers killed in a battle that has
already been materially won. I’m not going to let that happen to me. And on the
other side of the finish line? A scenario where the market is improving again
and anyone who survived the purge is well positioned to take advantage. Every
hardship I’ve ever faced has made me a better man in some way. This one isn’t
going to be any different.
By the way, it appears this is my 100th post on this
blog. Thank you to everyone who has been along on this journey with me and I
hope you all have a great day!
Happy Friday! This is the follow up post to Wednesday’s. In that one, I talked about the downsides to having a high paying job. Today, I’m going to end the week on a positive note by talking about the opposite. It may seem a little ridiculous to write a post about reasons someone would want a high paying job. But I’m going to try to stay away from the obvious and go into the aspects someone who hasn’t had the experience might not think of. Let’s get this going.
You will face huge challenges that will force
you to grow in ways you may never have otherwise.
I’m talking about great big,
existential challenges here. As in how do I make something happen over an
extended period of time that my employer claims to want (and bases my pay and
continued employment on) but seems to do everything in its power to prevent
from happening? This may sound like a negative, and on its face, it is. But nothing
worth having comes easily. In this case, you’re stepping up to face some things
that have the potential to break you, and often will come close to doing just
that. However, if you’re up to the challenge, you will come away with something
far better than money. In my mind, there is no greater reward than going into
every subsequent life experience being able to look back at the incredible
things you’ve been able to accomplish against the odds and knowing that there
is very little on this planet that can stop you when you’re at your best.
You will learn how to deal with people more
effectively than you ever would have thought possible.
We’ve all met those difficult
people in life. You know, the ones that make you wish you never had to interact
with them in any way. The ones who have you thinking “his poor wife!” The
higher you rise in your career, the more difficult personalities you’re going
to encounter. The upper echelons, at least in the business world, are mostly
populated by people who were just too stubborn of assholes to allow anyone to
stop them from getting there. The egos are enormous and manipulation, bullying,
threatening, belittling, etc are all everyday tactics. These are people who don’t
have to worry about HR since they often own their own companies or are the most
powerful people in them if they don’t. Avoiding these people is not an option. And
neither is failing to get results while dealing with them. For a while, you
will hate it. Then, one day, you will wake up and realize that there is almost
nothing left in this world that can intimidate you. The hotter the fire, the tougher
the resulting metal that was forged in it.
You will make tons of powerful friends.
When I started out in my career,
networking was always a dirty word in my mind. This was mostly because I knew
very few people who could do anything for me, which made it feel like all I
could do was beg for help. Not a fun feeling. But once you’re in the club of
people who eat, sleep, and breathe work, most of your interactions are with
people who control all kinds of different decisions – both within your company
and in others. Just like in any other job, you naturally make friends, and
enemies, in the process of your day to day activities. And suddenly, networking
You, yourself, will become powerful.
Most of us spent at least the first
several years of our careers feeling trapped in dead end situations. In my
case, no matter how hard I worked, it didn’t seem like it made any difference. But
over time, if you’re highly capable and you work hard, it does. And one day,
probably sooner than you would have expected, you find yourself in a position
where almost everything you do makes a difference. And while that comes with a
ton of risk and responsibility, it’s also a pretty nice feeling at times to
look at a situation and realize that you made it happen through sheer force of
You will enjoy yourself at work – at least
some of the time.
One of the reasons I ultimately
decided not to go to law school is that law is an incredibly competitive
industry where about half the people simply don’t make it and eighty hour work
weeks are pretty much the norm. At the time, I couldn’t fathom working that
much or that hard. But fast forward less than a decade and here I am working in
the incredibly competitive finance industry, where a high percentage of people don’t
make it and I’m basically working most of the time I’m awake. If you’re not
already in it, that may sound like a nightmare. It certainly did to me. But
somewhere along the line, I think I realized that I could either have a
mediocre, unsatisfying career or I could put everything I had into a good one. Sometimes
people manage to find that sweet spot in between the two, but those situations
are pretty rare and typically don’t last. Our economy is just too competitive
now and where there is inefficiency, it will usually be discovered and destroyed
– one way or another. Going “all in” is the only option I found that allowed me
to truly make an impact. And in that way, I feel I gained something rather than
lost it. Instead of spending forty hours a week doing something that feels
pointless and barely pays the bills, I’m spending significantly more hours than
that, but I’m doing meaningful work and the bills are not a concern at all. Of
course, that last part also has a lot to do with keeping lifestyle inflation in
check. Don’t ever forget that you can outspend any income.
When you become valuable to a company, the
way it spends money on and around you changes.
I still remember when I was booking my first flight in my current job. I was talking to my then new boss about a couple of possible options. One was cheaper than the other, but involved a layover. “Don’t forget the value of your time,” he told me. And it’s true. If you think about what the company pays me in a typical hour, it doesn’t make sense for me to spend a significant part of my day sitting at some airport in Detroit or some other God forsaken hellhole because the airfare was a hundred bucks cheaper. And it doesn’t stop there. Customers need to be entertained and the only rule I was ever given was to “use your judgment.” Lunches, dinners, football games, golf outings, etc are regular parts of my working life now. My recent college graduate self wouldn’t have believed the expense reports I routinely turn in today. Obviously, I do try to keep things within reason. After all, we’re running a business. But even with the company and the industry going through a very difficult time, no one has suggested cutting these kinds of expenses. They understand that if that needs to happen, we may as well just close the doors because if we don’t make our customers feel great about doing business with us, someone else will.
I think that in a lot of areas of
life, you really do get what you put in. A high paying job is definitely not
for everyone, because you will have no choice but to make it your top priority
in everything you do. I went into that and several other drawbacks in Wednesday’s
post because I think it is very important to understand the reality of what you’re
getting into. But if you’re willing to pay the very high cost, a high paying
job will at least give you a lot back in return. I don’t know how long I will
dedicate my life to working this way. But the good news is that as time goes
on, because of the work I’ve already done and the way I’ve managed my money, I should
have an ever widening range of options available to me. Have a wonderful weekend!
I don’t want to send the wrong message. I’ve chosen the path I’m on, I take full responsibility for it, and knowing what I know now, there is a good chance I would still do it again. But if you’re frustrated with your income, I want to pull back the curtain and give you a taste of what it really costs to make six figures and up. I don’t want to trivialize your situation. I spent years of my life in circumstances of scarcity to the point where I still struggle with strange personality quirks that are probably rooted in those experiences. I don’t want to go back there. So in the interest of presenting both sides as fairly as I can, I’m going to write a second post to follow this one called “Why You Want to Make the Big Bucks.” But today, we’re looking at why you wouldn’t want to. Here are my reasons, in no particular order.
You will have very few friends at work.
Sure, people might act friendly to
your face. But nothing happens in a vacuum these days. They may not know the
exact amount you make, but they know it’s a lot more than they do. And jealousy
can definitely make people treat you differently. You may even have people
trying to take you out in an attempt to get what you have for themselves. Additionally,
in order to survive in a very high income position, you have to do unpopular
things. If you’re in management, you will have to fire people, you will have to
tell people NO all the time, and you will have to choose between options that
seem terrible to everyone below you while ignoring the options they prefer
because they simply aren’t feasible. If you’re in sales, you will have to fight
for your deals. Hard. You can do all you want to try to maintain a relationship
with an office employee. But when he is standing between you and payday, you’re
going to roll over him or go over his head. If you don’t, you not only won’t
make money, but you’ll eventually be fired for lack of production. Having more
power may appear to give you more options. But once you have it, you realize
that those options are limited by factors people on the outside rarely see.
You will have a difficult time knowing if you
have friends at all.
I have some wealthy friends who you
would never think have more money than anyone else. If you were to meet one of
them in a day to day situation, you’d see someone driving a normal car, wearing
normal clothes, living in a normal house, etc. This isn’t just an effort to
save money, or even to live modestly out of personal preference. It’s also an
effort to hide. Lottery winners and sports heroes often don’t have that option
and that is one reason so many of them wind up broke. They’re human beings just
like anyone else, and they want to have normal relationships in their lives.
But bad actors know that and they work their way in, taking advantage of any
trust that is placed in them. Of course, there is a big difference between
Adrian Peterson, who everyone knows has (or had) tens of millions to his name,
and someone who has a mere one or two million in the bank. But the concept
works similarly for both. Is that new girlfriend with you because she likes you
and enjoys spending time with you, or is it because she can smell a payday if
she can only get herself married, pregnant, etc? You want to trust her. But it
is very difficult to know if you should. Often you won’t find out for sure
until it’s too late.
You will have a huge target on your back.
Like most companies in our
industry, my employer has been under serious financial stress recently. Cost
cutting has become necessary. And guess what? Firing highly compensated
employees is a much quicker method of accomplishing that than firing low or
average paid ones. I’m not saying people in the latter group will never lose
their jobs. But if you make a lot of money and you’re not an elite level
performer, you’re definitely the low hanging fruit. Even some of our most
successful sales people are feeling the heat now.
You will be in high demand…until you’re not.
I wrote about how a lot fewer people than you think make big money just last week. That means that especially within a particular industry, most people near the top will at least be aware of each other. If you’re fired, word will get out quickly along with all sorts of rumors and theories about why it happened. If you want to move to a different company, you will probably wind up working with people you know from the past. This can be either a good thing or a bad thing. But in a world where even the nicest people have to do some pretty ugly things to get to the top, it is bad more often than it’s good. And if you lose your job as a result of your industry tanking, it’s going to be very difficult to find another one because the other companies that could best utilize your skillset probably aren’t hiring. There are plenty of those people in my life right now, whether they’ve been fired or are just at the point where they feel a switch is their best option.
You will be expected to give absolutely
everything you have and it will never be enough.
There is no clocking out when you
make six figures. You can’t really even go on vacation. You would basically
just be working from home, except from a different place. If you have a family,
friends, or other personal commitments, they will come second more often than
not. The other option is to find another job. And remember, you’re a highly
compensated employee. So when you succeed, well, of course you did. That’s what
we pay you for and frankly, you still should have somehow done better. And when
you don’t, you’re crucified – whether it was a result of factors under your
control or not. Simply put, you’re paid to win, that’s expected, and anything
less is a failure even if you did the best job you possibly could have.
You will make a lot less money than you
Political pandering aside, the
reality is that unless you’re part of a small fraction of the top 1% of income
earners, you don’t have access to most of the accounting tricks that allow the
truly rich to avoid some of their tax liability. And even if you are, the
numbers don’t lie. In 2016, the top 1% of income earners made just shy of 20%
of income in the US, but paid nearly 40% of the taxes. For the top 10% of
earners, those numbers were about 50% and 70%, respectively. Meanwhile, the
bottom 50% made almost 12% of the income, but paid only 3% of the taxes. Keep
in mind that these statistics are just for federal income taxes. Making a lot
of money is very expensive just about anywhere the government is involved. Long
story short, the more you make on paper, the less of your income is actually
When people talk about money, they tend to focus on the
benefits and ignore most of the costs. The grass is always greener on the other
side of the fence, as they say, but things are never quite as easy or wonderful
when you make the effort to put yourself in someone else’s shoes and view them
objectively. Like I said at the beginning of the post, my personal verdict is
that I’ll take the money – at least for now. But everything has its cost.
Plenty of people would be capable of making very high incomes, but they choose
not to make the sacrifices required. And that’s fine – perhaps even admirable.
There are definitely more important things in life than money and the higher
you go on the income ladder, the less of any of them you tend to have. The most
effective decisions in life are made when all costs and benefits are factored
in. If I’ve given you a window into the costs of something very few people
actually get to personally experience, then I accomplished my goal with this
post. And it isn’t all bad by any means. Stay tuned…
Happy Monday, ya’ll! I decided to take a break from my Annual Expenses series of posts as the concept was feeling a little stale. I’ll probably pick it back up next week. But for today, I want to tell you about a recent purchase, give you a general update, and do one other thing I had said I would but forgot about until now. Let’s get to it!
Over the last year or so, I’ve noticed a trend where “deals”
pop up when I’m looking at my online accounts with different banks. Usually,
it’s in the form of “spend x dollars at a particular store, get a y dollar
reward.” I haven’t messed with them until now because I’ve been busy, the
offers usually didn’t apply to anything I particularly wanted to buy, and the
dollar amounts didn’t entice me to do things differently. But recently, I saw
one with American Express that changed all that: spend $25 at an office supply
store, get a $5 reward. Toner cartridges for my printer cost way more than that
and I have to replace them every pretty routinely, so I went to the local
Office Depot. The cartridge I needed seemed a little pricier than usual at $90,
so I checked online. The first option I saw was $60 – and interestingly enough,
it was at Officedepot.com! I asked one of the clerks if they would price match
their website, it turned out they would, and just like that, I had saved $30.
Tack on the $5 from the good people at American Express and the cartridge was
The lessons here are pretty obvious, but bear repeating as a
reminder. First, keep your eyes open for easy opportunities. It took me less
than thirty seconds to read over the Amex offer, come up with a plan to take
advantage of it, and click it. Second, a price is not set in stone. It was a
little shocking in this case that Office Depot’s brick and mortar location was
substantially more expensive than its website (and no, the online price did not
say it was a “sale price”), but even when it’s someone else’s website, a lot of
stores will price match now since if they don’t, they will probably fall victim
to “showrooming.” Third, regardless of the situation, it never hurts to ask and
you can’t get what you don’t ask for. ‘Nuff said.
My current career situation could be described as “frustrated
and angry, but opportunistic.” In the throes of panic mode, my employer is
making life incredibly difficult for those of us out in the field with a
seemingly impossible double standard. Their words say “we want tons and tons of
business.” Their actions say “we’re not going to let you do any business unless
we absolutely have to.” And some other actions have already made it clear that
“if you don’t do tons and tons of business, you’re fired.” It seems
infuriatingly disingenuous, particularly when you consider that numerous
firings have already happened and not one of the people left employed appears
to be safe. But then you remember that these management guys are likely facing
similarly impossible double standards that have been set by the guys above them
and the whole thing just kind of becomes a shared nightmare for all.
The only thing that’s certain is that it’s time to put up or
shut up. As a result, I’ve been busting ass like never before and thankfully,
succeeding like never before in spite of terrible market conditions. In fact,
not only have I become one of the higher performers in the entire country, but
of the handful of people who have been hired in my division over the last five
years or so, I’m literally the only one left standing. I’m damn proud of that,
even as I feel for those who didn’t make it. There are two ways to look at this
situation. Sure, it’s difficult and in many cases unfair. But life hasn’t been
fair since the kid in preschool took the toy from you without asking, you
pushed him, and the teacher only saw the second part. Or even before that when
one kid was born into almost unimaginable wealth and opportunity in the US by
world standards, while another was born into almost guaranteed poverty.
Bottom line, there is opportunity in everything, even when
things look extremely bleak. I do my share of bitching, no doubt. I need to
work on not letting things phase me as much. But at the end of the day, I’m the
guy who’s out there in all out attack mode when many others are retreating. I
may go down swinging anyway, but that’s virtually guaranteed if I don’t try. In
the mean time, I’m making more money than ever and building on what had already
been a pretty promising career. This terrible period could be the one that
takes me from pretty successful to extremely successful. Someone has to come
out on top, right? As many people who have gone on to give the best
performances of their lives have said, why not me, why not now?
Like it or not, few entities have more data on us and our finances than the credit bureaus. We can either waste our time being angry about that, which will change nothing, or we can use the opportunity to indulge our inner data geeks and glean some valuable insights. Recently, someone from Experian emailed me about a post on their blog. It is a comparison of mortgage debt held by different generations and since typing the word “millennial” is basically page view gold, it of course approaches the topic from that perspective. I think the data is presented in some pretty interesting ways. Of course, if you go to their blog, they’re hoping you will click on something else and buy something. But the post is free. And full disclosure, I’m not getting anything from linking to it other than to help a fellow blogger out. Check it out here.
That’s all for today, folks. Have a great Monday and an even
Howdy folks! This week, we saw something a little different.
My employer’s latest round of firings caught just about everyone by surprise
when it was done on – gasp – a Tuesday. Not even the last day of the month. Now
I think they’re just toying with us. But in any case, nearly half of our
division, by far the most productive in the country, is now gone – and that
includes several people I truly love and care about. Yours truly survived again
thanks to two very good months followed by a July so stellar it literally eclipsed
any previous QUARTER I’ve had by itself. Can I keep it up? Only time will tell.
The industry is in absolute shambles, with widespread attrition happening. That’s
why I haven’t been able to simply leave. Very few viable companies are hiring
and even if they were, I’d likely be jumping out of the frying pan and into the
fire. But this latest round has opened up an opportunity for me that I believe will
result in a lot of new business. So stand and fight, while diversifying by
growing my side business as much as possible, seems to remain my best available
course of action for now.
Do you like to play chess? I loved it as a young lad. And lately, I’ve found a fairly convenient way to get back into it a little bit. It wasn’t exactly difficult. I play on www.chess.com. You can play with a computer at various levels or with human players from around the world who you are matched with based on both of your ratings. It works pretty seamlessly. There are lots of different game settings, different types of tournaments you can participate in, analysis, lessons, different ways to practice, basically, it seems to have everything you could want. I’ve only been playing the free version and while it offers plenty of functionality for a casual player like me, there are also very reasonably priced paid versions for more serious players. I highly recommend the site if you enjoy playing chess. And if you give it a try, who knows? You may find yourself facing off with me – although you likely won’t know it.
That’s all for today. Have an awesome Friday and an even
I decided to skip my latest Annual Expenses post for today and share a little excitement instead. I previously mentioned that my employer let a number of people go recently. That’s not the exciting part, of course. But I had the opportunity to recommend one of my former colleagues to a hiring manager and I was happy to do so. He is a great salesman and a great man as well. And over the weekend, I was thrilled to learn that he wound up taking that job!
It took him less than a month and given how specialized our
field is, that’s not bad at all. And while his new opportunity is with a fairly
unproven company from the standpoint of people who do what we do, I came away from
my conversation with the hiring manager very impressed. The business model is
fairly open ended compared to that of my employer and I believe it offers a ton
of opportunity. I’m just so happy for my former coworker and his family! I
think he is going to absolutely kill it out there. My employer didn’t have the
right opportunity in his territory but I really don’t believe it was his fault.
I know he worked his ass off nonstop and left no stone unturned. I’m looking
forward to hearing how it goes for him in the coming months.
This kind of stuff is what life is really all about in my
opinion. I was actually feeling pretty down for most of the weekend. But that’s
because I was focused on myself and my own problems. A little perspective goes
a long way. In this case, I’m not unemployed with a family to support and am in
very little danger of losing my job right now. In fact, I just closed a deal
that more than doubled my previous best and I have exceeded my previous best
quarter’s total in just July alone. Plus, my side business is doing better and
better. But all those good things, and many more going on in my life still aren’t
enough to keep my spirits up all the time. However, hearing awesome news from
someone else is a game changer and in this case, it may have saved my weekend.
As an added bonus, I talked to another of my friends over
the weekend and learned he made a big move with his business last week. I’m
really proud of him for taking a shot at making a business out of doing something
he is truly passionate about and I’m looking forward to hearing more about how
that goes as well.
Here’s hoping we can all get some great news like this in
the week ahead. Have a great Monday!
“Annual income twenty pounds, annual expenditure nineteen [pounds] nineteen [shillings] and six [pence], result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.” – Wilkins Micawber in David Copperfield, by Charles Dickens
Lately I’ve noticed a new trend in the media that I would
like to address. In most areas of life, it is generally accepted that you have
to walk before you can run. You don’t just walk into the gym one day, throw
four plates on each side of the bar, and start deadlifting it repeatedly. You
have to start with a much more manageable amount of weight and train your body
to handle more and more through sustained effort over time. And 405 is more
than many people will ever deadlift in their lives so there is the crucial
element of being realistic as well.
But with personal finance, there seems to be a backlash
against that concept. If anyone dares to repeat the totally valid, if tired,
advice that people replace $5 coffee drinks with $.10 ones they can make at
home and enjoy just as much, they’re met with ridicule or even the vicious
personal attacks that have sadly become commonplace in a world where so many
people seem to in an ongoing competition to be more outraged by seemingly
innocuous things than anyone else. Chase Bank, a bank I have mixed feelings
about at best, was crucified for posting simple, actionable advice of that sort
– advice that could help a lot of struggling people. And its CEO, again, a man
I have very mixed feelings about, has become a political punching bag for some
people who appear to have made it to adulthood without learning basic economics
at any point along the way.
The theme of these attacks seems to be that people in
general don’t make enough money, so giving them any financial advice that
doesn’t involve being paid more money (by someone else) is condescending and
insulting. In other words, it’s all someone else’s fault. It’s time for a
reality check. No one on this earth is entitled to anything. And no, this is
not political. I have to say that because the word “entitled” has been infused
with bullshit political implications to such an extent that its mere utterance
has become almost a war cry. In most of the world, people live in a reality
where if they themselves don’t make something happen, it won’t. The fact that
we live in the relative comfort of an incredibly prosperous place where life is
incredibly easy does not change this reality. We’re all adults here. The days
of someone else being responsible for us should have ended long ago.
If you want something, you have to earn it. If you want
someone to pay you a lot of money, you have to give them a reason to do so.
This typically involves using the infrastructure and resources of their
existing business to make them more money, some of which can subsequently be
paid to you. And outside of some very lucky folks, no one is exempt from this.
If the board of directors didn’t think Jamie Dimon was creating more value than
what he is being paid, I can assure you they would not be paying it to him.
If you don’t accept that concept, it’s going to be very
difficult for you to have a successful career. Even if you start your own
business, which is very difficult to do without experience, capital, or both, I
can’t see a path to prosperity for you if you don’t believe everything has to
be earned. It is imperative that many of us stop blaming our problems on others
and start taking an honest look in the mirror and changing the things that are
holding us back. It’s the only way anything is going to improve.
To that end, no, if you’re living paycheck to paycheck, you
can’t afford a $5 cup of coffee. Even a few of those per week could cause you
to pay a bill late and fall into a cycle of paying interest, late fees, etc,
that could become very difficult to get out of. And it doesn’t stop with the
paycheck to paycheck crowd. I very rarely buy a $5 cup of coffee. It is simply
too easy to enjoy not just drinking great coffee, but making it, at home – and
at quite literally 2% of the cost. This isn’t to say I never get coffee from a
coffee shop, because I occasionally do. But usually I’m meeting with a
customer, a friend, a date, etc, and the coffee itself isn’t the real reason
I’m there. Buying the coffee is just an expense I have to incur in order to
spend time in a particular place for a particular purpose. I’m already wealthier
than most people and I’m only in my early thirties, but I didn’t get here by
ignoring reality. In fact, I doubt almost anyone who is highly successful got
there by enjoying luxuries before they could afford them. The only way to
change reality is by first accepting it.
This is so much more than just coffee. No one is literally
saying that cutting out a coffee shop habit is going to make you a millionaire.
It is just an example of a very important concept that can be applied to many
different areas. The same applies to a restaurant meal, which if made even a
once a week routine, could easily turn into a $100 per month premium over
equivalent food that could be made and eaten at home. I’ve seen people using
Uber when they could drive to the same places and turning $10 worth of parking
and gas into a $50 round trip in the process. Again, even at once a week, this
costs over $100 a month over and above what it would cost to get the exact same
thing done. It all adds up – and usually pretty quickly.
I think most of the outcry over this very valid and
legitimate advice amounts to some bad actors trying to score points by telling
people they don’t actually have to deal with reality. It’s easy to make people
feel good telling them things like that. But it does them absolutely no favors.
Some people see a $5 cup of coffee, a $15 restaurant bill, etc, and don’t
realize what they represent. These are examples of doing things in wildly
inefficient ways and especially when you’re first starting out, expenses like
these can be the inches that make up the difference between winning and losing.
How important are the inches? Just look at the quote I
opened the post with. If you spend less than you earn over a sustained period of
time, even by just a little, you will build assets and life will get easier. If
you spend more than you earn, you’re doing the exact opposite. The average
person in this country has roughly $10k of credit card debt. Most of them
didn’t rack that up overnight. It usually happens when someone is living at or
close to the edge and gets hit with the inevitable unexpected expenses. If they
can’t cover them with either excess income or savings, then the only option is
to borrow. Too many people turn to credit cards, one of the worst forms of
borrowing. It’s so easy. Almost anyone who can fog a mirror can get a credit
card. And if you just pay a little bit each month towards the ever increasing
balance, you can have pretty much whatever you want.
But there is always a cost. In this case, it is that as the
interest grows, it becomes an expense of its own that does nothing for you and
increases each month unless you pay down the principal. Instead of living on
the edge, you’re now beyond it and gradually burying yourself deeper and deeper.
It doesn’t seem like a big deal at first. But over time, the situation will not
only get more and more difficult to dig out of; it will deprive you of
opportunities you won’t even know you’re missing out on. Those opportunities
come in many different forms, but the theme is the same. If you have money, you
can use it to make more. The more you have, the easier life gets. That, in
essence, is the American Dream – work, save, invest, prosper. What a tragedy
that marketing departments, and another kind of enablers with political
motivations, successfully turn so many people away from it before they even
know what they’re passing on by taking the path of least resistance.
But those people don’t control you. Only one person on this
earth does. You get to choose where you get your information, how you process
it, and how to proceed from there. This is both a privilege and a
responsibility, so take it seriously. The quality of your life depends on it.
If anyone is trying to feed you sugar – something that tastes sweet in the
short term but seems just a little too good to be true, ignore them. The
sweetness is gone as soon as you swallow; but the fat ass you’ll develop over
time is going to be with you much longer than that. Whether we’re talking about
food or finance, you want to be taking advice from the same people: the ones
who give you the tough love that doesn’t feel so good in the moment, but keeps
you on the path of true progress. They’re usually the same people who are
succeeding in their own lives – and these days, sometimes being demonized for
that very success. They can help you get there as well. In fact, paying it forward
is something many of them enjoy doing very much. But in order to benefit, you
have to ignore the yes men (and women) who peddle easy answers that never
deliver results. And then you have to listen to the proper advice and work your
ass off carrying it out.
At the end of the day, it’s about who you want to be. Mr Micawber was a tragic character in David Copperfield. He realized his folly, but not until it was too late. Don’t let that happen to you. You can join the masses of lazy people telling lies, pointing fingers, and bitching because they haven’t been handed the results they want in life. Or, you can admit you don’t know what you don’t know (there is power in that, NOT shame), learn what it takes to actually succeed, and then get to work. The latter will get you results. The former will keep you from getting any further than you already have. Reject that. Learn, grow, and live a better life. It all starts with taking responsibility for yourself.
Happy Friday, folks! As most of you probably know, employers often do their firing on Fridays. Recently, mine followed that same philosophy, firing over twenty percent of our sales force and some office employees as well. We all knew it was coming; or at least we should have. There were ample signals from management in both words and actions. And even if there hadn’t been, it’s common knowledge that revenue in most of our industry collapsed late last year and has not improved ever since and our “numbers” have reflected that. Simply put, it wasn’t if, but when. But here comes the plot twist. In spite of almost certainly having been “on the list” at one time, yours truly not only survived, but wasn’t the slightest bit concerned about whether he would. There are two reasons for this.
First, since being personally warned that attrition was coming, I’ve been able to produce literally the best numbers of my young career in spite of the state of the market. I’ve gone from somewhere in the lower middle of our division to one of the company’s top performers in the entire world. How did I do it? Sure, I started pushing myself a little harder. But mostly, I kept doing exactly the same thing. I had always been working diligently to develop my new territory – even when the results weren’t reflecting it. It takes about two years to do that successfully and my employer is well aware of that. Had management pulled the plug early, they would have been making an extraordinarily expensive mistake. But economic stress often forces companies to make decisions from a very short term perspective. Luckily for all involved, my territory has absolutely exploded with production over the last couple of months to the point where the mere notion of me being fired would be absurd. At this point, it’s all I can do to keep up with the business I have. If the market recovers even a little bit, look out.
But there is another, more important reason for my lack of
trepidation over my job – I don’t need it anymore. The minute my boss broke the
news to me, the wheels in my head were already turning. He did me a solid by
giving me a warning. But nonetheless, before the conversation was even over, I
had mapped out my plan. A key part of it was to replace employment income
altogether in my life. I have always harbored a healthy hatred of authority;
and alliteration aside, I don’t take that word choice lightly. After spending
my life watching reliance on employers result in devastating consequences for
so many people and finally having it threaten me as well, it was time to act.
My real estate business was only in its early stages at the time. But no
matter. I decided it would be paying all of my expenses by the end of the year
and began ramping it up aggressively. And today, it appears that goal is going
to be accomplished ahead of schedule. Admittedly, the fact that I keep my
expenses low means that wasn’t as high a bar to clear as it may sound like. But
still, success is sweet.
Make no mistake, I still want my employment income. I want
to see my real estate business cover the bills and then some for at least a
year or two before I take the plunge. So the plan is to kick ass in both areas
for the time being and see where it takes me. However, to commemorate the
occasion, I must admit I’ve adopted a rather expensive new hobby – flying. This
is the first thing in my life I can think of that I’ve done without any plan or
goal in mind, but instead, simply because I enjoy it. I am taking lessons and
hope to have my private pilot’s license by around the end of this year. From
there, we’ll see what happens. As long as I’m enjoying myself, I’m happy. But
if I can’t keep an awful lot of money flowing in, I won’t be able to afford to
fly as much. So that should keep me hungry for a while.
The moral of the story? Believe in yourself. If someone
doubts you, be thankful. It’s just more fuel for your fire. If you know you
have a good hand and someone bets against you, be happy. The size of your
payday just increased. And if times get tough in your life, get excited. This
rough patch may be exactly what you needed to convince you to take things to
the next level. Happy Friday, folks! Have a wonderful weekend!
About two months ago, I mentioned that I’m in some career trouble. Simply put, the increasingly difficult economic conditions have put my employer in a precarious position and as a result, only the bona fide superstars are truly safe. And even they are only safe because they are marketable; no one who relies on my employer is because the company itself isn’t certain to survive. While I have been squarely in the rising star category for a while, I haven’t made the next leap yet and my status isn’t good enough in a situation like this. I could be let go any day and I don’t have a big enough name in my industry to ensure I’d be snapped up quickly if that came to pass. Since I found this out, I’ve addressed the situation with maximum effort in three different areas. While there hasn’t been an outright victorious moment yet, there are very encouraging signs in all three areas.
It seems only logical to hedge one’s bets in a situation like this and to that end, I’ve done what I can to find a new job. Unfortunately, I’ve found myself in a position that, while highly valued, is not terribly common. It is perfectly normal for someone in my position to cover a large territory – sometimes a whole state or even several. And there are only a handful of companies that do what my employer does – and some are only regional. So while I could try to get into something a little different, there are not many “smooth transition” options available. I’ve applied for two opportunities over the last two months. Of those, I quickly withdrew from one when I learned some disconcerting things about the company as I did my due diligence and narrowly missed getting an offer from the other (this was the major positive development I was hinting at for a while in some of my posts). I will continue to keep my eye on the market, but given the economic reality of this moment in time, very few people are leaving positions of this kind and very few employers are creating new ones.
My second area of effort is also obvious – I’m trying to put
out the fire in my current house in case I can’t escape it. This has actually
been enormously successful. The last two months have averaged out to be more
than double any other two I’ve had with the company and have included a fair
number of deals the company cares a lot about because they are crucial to the
bottom line. If I can continue at this pace, there is almost no chance I will
be fired. However, there is no guarantee that will happen. In fact, my recent
success has been wildly improbable given market conditions. For months, almost
all of my peers have been doing significantly worse than they typically do, just
as I had been until I suddenly caught fire. And even if I can keep the magic
going, there is still no guarantee the company will survive.
Enter my third area of effort: my side business. A deal just concluded very successfully, I see more opportunity, and I’m ready to push in more chips. I’ve pulled some money from other investments, which was easy to do given my views on where stocks are headed in the short to medium term, and I’m plowing it into the business. I’m not going all in, but I’m betting enough that the possibilities of enough income to cover all my annual expenses and significant pain are both on the table. This project has proven it CAN work. Whether it can be scaled up efficiently or not remains to be seen. But I’ve decided it’s time to have some balls and give it a shot.
There is one other thing I’m focused on: enjoying my life
and not worrying too much. I’ve gone to great lengths to set up my finances to
withstand even an economic catastrophe. And whatever happens, I’m still going
to be the same person who accomplished all I have up to this point. I am
confident that even in a worst case scenario, I would eventually find success
again. Besides, it’s kind of invigorating to be taking big swings at things
that are suddenly very important. Yes, there is a chance I’ll hit the canvas
before this is over. But there is also a chance I will be more successful than
ever before. Either way, I will almost definitely grow for having tried. And at
the end of the day, I think that’s the most important thing.