Tuesday, March 27, 2007

CEO Pay Executive Compensation

Tired of your boring job? Feel like you will never get ahead? Looking for ways to increase your compensation. You need to be the CEO of the company. Executive compensation was on a tear in 2006. Here is just a snap shot of some of the highest paid CEO from last year.
  1. Merrill Lynch CEO, Stanley O'Neal $91 million
  2. AT&T CEO, Edward Whiteacre, $60 million
  3. Coca Cola CEO, Neville Isdell, $32 million
Check out this chart from the Wall Street Journal on Executive Compensation for 2006. I don't know how someone survives on $91 million a year, but I am willing to try.

Businessweek just did and interesting article on the relationship between a CEO home size and the stock performance. There study indicates that company stock of the CEOs who have a smaller home tend to do better than the ones who have the mega mansions.

Related reading: Rites of Passage at $100,000 to $1 Million+: Your Insider's Lifetime Guide to Executive Job-Changing and Faster Career Progress in the 21st Century

I hope you enjoyed this post. If you have a question or a idea make sure you leave a comment and I will try to research it and write about it. Final thought if you enjoyed this post why not Subscribe to Strategies for Life its free.

Sunday, March 25, 2007

Saving for College, 529 plans, Coverdell Accounts

Saving for College

Great article over at Yahoo Finance on Saving for College, here is what they said along with my comments.

Both students and parents can make the most out of the educational dollars they set aside by exploring the many savings tools available. Since the cost of higher education is rising faster than the rate of inflation, traditional saving vehicles like CDs and savings bonds just can't foot the bill alone. Fortunately, options such as Coverdell Education Savings Accounts (CESA) and 529 Plans make planning, saving and paying for college easier.

For Students: It is never too early, or too late, to begin saving for college. If you earn your own money from a part-time job, try to put some away before you decide how to spend it. Start out small with maybe 5%, and gradually increase the amount as your earnings allow. As your piggy bank grows, put your savings to work for you. Open a bank account that lets your hard-earned money grow but still offers easy access. Most banking institutions offer traditional savings accounts and certificates of deposit that pay interest. It is interesting to watch how different families approach the issue of paying for college for their child. Some families feel as parents they need to fund the entire costs and they stress about this because they don't know how to do this. Others think it is ok for the student to take on studet loans and pay for the education themselves over time. I think it needs to be a balanced approach. My personal experience was I paid for college myself, when I left high school I had saved enough money for only 1 year at the university however, I went to a community college for 2 years which effectively allows you to cut your tuition costs in half. Every summer I worked a full time job and cut lawns on the weekend and I was able to earn enough money to pay for my room and board and even a $1000 per year in spending money. I drove and $800 car, went to the bar on Thursday nights and did three spring break trips. I finally ran out of money in my last year of college and my parents paid for $800 of my tuition. It can be done and I did it without any loans or finanicial aid. On the financial aid part I was stupid because there were several merit scholarships that I could have received if I would have met with a counselor and explored the options.

For Families: Saving money is the primary way to prepare for the costs of college. By setting aside a certain amount each month or payday, your family can build up a viable fund for college. For instance, investing just $100 a month for 18 years will yield $48,000, assuming an 8% average annual return. In addition, if parent and child begin saving early, the amount you have to set aside each month will be smaller. Regardless of the amount you can afford to save each month, it is important to consider what savings or investments will minimize risk while maximizing the return on your money. Some of the most common investments are described below. Several ways to approach this as the article mentions, we started saving for our kids college costs when they were born. We have gradually increased the monthly savings rate as they got older and I could afford to do so. Several articles that I have read all point out that the parent should not take out the loans to pay for the childs education. As the parent of a college student you are most likely 38 to 48 years old and should be thinking about retirement. Taking on an additional $100K in debt as you push toward retirement will not help you sail into retirement easily.

Coverdell Education Savings Account (CESA)

Formerly called Education IRAs, the Coverdell Education Savings Account helps families save money for the education expenses of a child. One important difference between a CESA and other education savings plans is that funds can be used to pay for primary and secondary (K-12) education as well as higher education. This provision is set to expire in 2010 unless Congress passes a law to extend it. The CESA allows you to make an annual non-tax-deductible contribution of $2,000 per child into an investment trust account. As the funds in the account grow, they are not subject to federal taxes. Additionally, withdrawals for qualified education expenses are also free from federal taxes (although they are usually not free from state taxes). Qualified expenses include tuition, books, and fees at an eligible educational institution. Contributions must be made in cash before the child reaches age 18. Anyone can contribute, including grandparents, family, friends and even the student, as long as the income qualifies. To qualify for a full or partial contribution, the contributor's adjusted gross income must be less than $110,000 if single and $220,000 if married. Funds are controlled by the account owner at all times and can be used for education expenses of a sibling if the money is not used for the originally intended beneficiary. To learn more about a Coverdell Savings Account, speak to a financial advisor. This is a plan that my wife pointed out to me a long time ago. We have not done this yet but we should. It is an excellent way to help defer the cost of private K12 educational expenses.

529 Savings Plans

Now, no matter what state you live in, there is a 529 program available for you to begin investing in. These state-sponsored plans help families set aside funds for future college costs. Commonly referred to as "Section 529" plans (after the Internal Revenue Code that authorized them) these come in the form of either prepaid tuition plans or savings plans. The 529 prepaid tuition plan allows you to pay now at today's rates for school tomorrow. Your account is guaranteed to pay for tuition and fees at public universities and colleges in the state by the time your child graduates from high school. Room and board is not covered in a prepaid tuition plan. While you may use a prepaid tuition plan to pay for a private or out-of-state school, you may risk forfeiting some of your plan's value to do so.

The 529 savings plan, on the other hand, allows the full value of your account to be used at any accredited college or university. The 529 savings plan also covers all qualified higher education expenses, including room and board. Each state determines its plan design, including what the maximum contribution per student per year will be. Investments in 529 plans grow tax-deferred until the child is in college, at which time they will be subject to the child's presumably low tax rate. Distributions to pay for the student's college costs are federal tax-free, and individual states may offer additional tax breaks as well. To learn more about 529 Savings Plans, speak to a financial advisor. We finally have a 529 for our childern. Thanks to my father in law who got of the dime and got it done. He contributed some and we did also. Now we can look forward to tax free growth on these savings.

Saving isn't the only way to pay for college. Federal, state and private grants and loans can bridge the gap between your savings and tuition, even if you think you make too much to qualify.

I hope you enjoyed this post. If you have a question or a idea make sure you leave a comment and I will try to research it and write about it. Final thought if you enjoyed this post why not Subscribe to Strategies for Life its free.

Sunday, March 18, 2007

My favorite books on investing

Some of my favorite books on investing include books by Warren Buffet, Jim Cramer, and the founder of investors business daily, William O'Neal.

1. The Warren Buffet
2. Jim Cramer Mad Money Books
3. How to Make Money In Stocks

In regards to magazines and newspapers I would recommend the Wall Street Journal, Investors Business Daily and Baron's Weekly.

1. The Wall Street Journal
2. Investors Business Daily

Free credit report? Really?

Interesting article called The true cost of a `free' credit report: $79.95 here is what they said along with my comments.

FreeCreditReport.com is not the place for free credit reports. If you didn't know that, you may have paid for something that you did not want or that should have been free. Apparently the company that operates FreeCreditReport.com had its own sort of confusion. A federal court ordered the company to stop misleading consumers last August. Then last month, the Federal Trade Commission said the company was still not telling customers what it should, under the settlement order. I always wondered what this company was about. After all they pound us with their radio and TV ads and it seemed to good to be true. Last summer I went to their site and started to click through and I noticed that you had to put in a credit card, so I went slow and started reading. I ended up not putting in the credit card number because I could see there was going to be a charge for my free credit report.

In late February, the FTC said Consumerinfo.com, which is a unit of Experian, the credit bureau, didn't adequately disclose that anyone who signed up for the "free" report at FreeCreditReport.com would also automatically be enrolled in a credit monitoring program that costs $79.95. An expensive free credit report as far as I am concerned. Consumerinfo.com paid $950,000 to settle the original charges. Now, the company has to pay another $300,000 for violating that settlement order. Experian spokeswoman Heather Greer said there was a problem in one of the company's television ads that was fixed last year. Meanwhile, if you want a truly free copy of your credit report, the place to go does not have free in its web site address. It's annualcredit report.com. I tried this one and it actually is free. If you want to get your actual FICO score there is a charge for that but I felt I didn't need that.

Where to go for your possible refund: Anyone can use that site to get a free credit report once every 12 months from each of the three credit bureaus. Anyone who was unwittingly charged for credit monitoring by Consumerinfo.com may be eligible for a refund. The settlement covers customers between Nov. 1, 2000 and Sept. 15, 2003. For more information, go to ftc.gov/freereports. Or send a letter to: Consumerinfo, P.O. Box 19729, Irvine, CA 92623-9729.

Saturday, March 17, 2007

Maxed out on Debt?

Maxed Out on Debt! "The Movie"
I found and interesting article titled, Maxed out on debt? The cool thing is the offer that help's on way, in a film and a book. So if you are a person that would rather wait for the movie you are in luck it is available. Here is what the article said about people struggling with debt along with my comments.

Checkout the following video from the Movie Maxed Out! Shop for the movie Maxed Out.

The twofer this month is the feature-length documentary Maxed Out, and a companion book, Maxed Out: Hard Times, Easy Credit and the Era of Predatory Lenders. The movie opened in select markets last week. I think every high school at least should find a way to get the film shown to its student body. James D. Scurlock, author and director of Maxed Out, hopes to do with the overselling of credit what former Vice President Al Gore has done for global warming -- elevate people's consciousness about a terrible threat to our existence. In this case, it's our financial well-being. As you prepare for retirement financial planners will recommend and coach that one of the most important things to do it eliminate your debts prior to retirement. This doesn't mean you take on a giant debt consolidation loan right before you go into retirment. Additionally, most people don't realize how quickly you are paying for something 2 to 3 times when you finance the items with credit card debt. If you have a credit card with 18% annual interest, according to the rule of 72 you will pay interest equal to the amount of the purchase in just 4 short years. If you want to play around with this check out the rule of 72 calculator.

Both the book and film examine the proliferation of debt in America. Among others, Scurlock interviews debt collectors, a Harvard professor, pawnbrokers, people in debt and the people who have watched loved ones struggle with debt. I laughed when Scurlock shows old black-and-white clips of students being taught how hard it is to qualify for credit. You have to have good character and a proven capacity to pay it back, an unnamed man tells a young boy and girl. Credit is easy to get now a days and it is just as easy to get in trouble with credit. When someone extends you credit and you use it you get debt. Your goal is to not be in debt. Simple rule of thumb, never use credit to purchase something that doesn't last. Don't pay interest on the dinners you ate out last month, or the vacation you took in February. It doesn't make sense. Use a special savings account and establish a budget to help you pay for these items and control your expenses.

Shop for the book. I was most moved by two mothers, Janne O'Donnell and Trisha Johnson, who sit side-by-side and talk about their children -- college students -- who committed suicide largely because of credit-card debts. O'Donnell's son had amassed a debt of $12,000 on 10 credit cards. Johnson's daughter was a freshman when she spread her credit-card bills on her bed and then hanged herself. She owed $2,500. Scurlock's book takes you along on his journey to make the documentary. Credit is just too easy to come by, when I was in college I did not have a credit card. In the days of debit cards I don't think any college student needs a credit card. It is just too easy to get in trouble with. A college roomate of mine had $5000 in credit card debt when he was in college. He had no way to pay it off. He didn't have a job. I would never want that hanging over my head.

He takes a few missteps in the beginning when he criticizes radio talk-show host Dave Ramsey, who rightly encourages people to get out of debt and shun credit (except for a home mortgage). As in his film, Scurlock's snide references to tithing come off as useless pot shots rather than insightful dialogue. People are not in debt because they tithe, as he seems to suggest. But when Scurlock focuses on the larger issue of easy credit, he's right on the money. "The federal government -- and the majority of Americans -- can no longer get by a single day without taking on additional debt," he writes. "And as more borrowing goes to simply pay off old debt, or to make interest payments, the new debt does little more than increase banking profits."

Some facts Scurlock points out:
  1. The Commerce Department reported that the nation's personal savings rate for all of 2006 was negative 1 percent, the worst since the Great Depression.
  2. From July 1, 2005, to last June 30, there were almost 1.5 million personal bankruptcy filings.

  3. Credit-card issuers have increased the number of mailed credit-card offerings sixfold since 1990, from just over 1.1 billion to a record 6 billion in 2005.

  4. Revolving credit-card debt, the amount you don't pay off every month, increased 6 percent from $827 billion to $876 billion in 2006.

  5. Low- and middle-income households have, on average, $8,650 in credit-card debt.

"There is an even greater misconception at work," Scurlock writes and presents in his film. "A misconception that debt is not what it used to be. That there is `good' debt, for example, and `bad' debt. The idea that one should stay out of debt, period, is now considered unrealistic. Even more frightening is the notion that debt is our friend -- a magical tool that allows us, in the words of Napster's new ads, to `own nothing, have everything.'"That deserves an "Amen." Scurlock said his goal for the book and the movie was to "paint the story of our debt-fueled culture in broad strokes." He says he wants to challenge the assumptions about the way we live our lives and shift the debate. "Do we really want to be in perpetual debt?" he asks. Read this book or watch the movie and perhaps you'll answer with a resounding "no."

I hope you enjoyed this post. If you have a question or a idea make sure you leave a comment and I will try to research it and write about it. Final thought if you enjoyed this post why not Subscribe to Strategies for Life its free.

Five Principles for Happiness in 2007

I found a great article by David Bach, author of The Automatic Millionaire, the article's title Five Principles for Happiness in 2007 focuses on The Live Rich Factor. The 5 principles of the Live Rich Factor are: millionaire millionare

Principle 1: Give Yourself a Break
Principle 2: Get Connected with Your Truth
Principle 3: Stop Judging Yourself
Principle 4: Stop Judging Others
Principle 5 : Pursue Fun with a Vengeance

Read the complete ariticle

Other books by David Bach.

Start Late, Finish Rich: A No-Fail Plan for Achieving Financial Freedom at Any Age
Smart Couples Finish Rich: 9 Steps to Creating a Rich Future for You and Your Partner
The Automatic Millionaire Homeowner: A Powerful Plan to Finish Rich in Real Estate

I would be curious about your thoughts on the article. If you have a question or a idea make sure you leave a comment and I will try to research it and write about it. Final thought if you enjoyed this post why not Subscribe to Strategies for Life it's free.

Tuesday, March 13, 2007

Are you an average American struggling with debt and more debt

Are you and Average American Struggling With Debt
Did you know that in 2005 Americans had $2.2 trillion in total consumer debt, more than twice the consumer debt that they had in 1994.  That doesn't even take into account the amount of debt our government has racked up.  On top of that, the average personal savings rate in the United States in 2005 was -0.5% which was the first time this rate has dipped below 0% since the Great Depression?  Unfortunately we are a have it now society and we incur a lot of debt. This all forces the next point, 70% of American workers plan to work into retirement. Unfortunately, 40% of the future retirees will end up having to leave the work force earlier thank expected due to health problems, disability or company downsizing. Coupled with all of this the average American had $12,000 in home equity loans that was needed to pay off credit card debt.

So with all that whats a person to do. Fortunately that is what this blog is all about. Check out the following articles about these challenges.
  1. Debt consolidation and paying off your debts
  2. Saving for your retirement
  3. Setting up a family budget
I hope you enjoyed this post. If you have a question or a idea make sure you leave a comment and I will try to research it and write about it. Final thought if you enjoyed this post why not Subscribe to Strategies for Life it's free.

Sunday, March 11, 2007

12 Steps to becoming a millionaire as an employee

Kiplinger.com had another article that talked about becoming a millionaire while you are an empolyee. The article title Making It Big on a Paycheck by Follow these 12 steps to become a millionaire as an employee. Here is what they said with my comments.

A number of the people profiled made their millions as entrepreneurs. But working for the Man doesn't mean you have to be a wage slave or resort to buying lottery tickets to strike it rich. The trick is to maximize your income on the job (and know when to move on), make the most of your employee benefits and tax breaks to pocket more cash, and use that extra money to start investing. Here's what to do:

  1. Keep your eyes peeled for better ways to do your job. Streamline a procedure, shave costs, create a new profit center, become an expert on a specific topic, volunteer for a company committee, anything that will make you stand out as a prime candidate for a promotion or a pay boost. I wrote an article Top 11 ways to get noticed at work which covers this topic in detail. Many people will leave work right on time at 4 pm while the boss hangs out and works his but off until 5:30 pm and they wonder why they don't get ahead. You have to add value to you company. It is an information society, use your brain, think and help find a way to make the company better. Over time you will get noticed.
  2. Don't be afraid to negotiate. In a study of master's-degree graduates from Carnegie Mellon University, economics professor Linda Babcock found that those who negotiated their first salary boosted their pay by 7.4% compared with those who didn't bargain. As I have always been told you get what you negotiate. The only real time that you can negotiate your salary is when you are coming an going. You really cannot negotiate when you are already and employee, you might have a little chance when you receive a promotion but even then when you get a promotion the company already has something in mind in regards to the salary increase.
  3. Get your ducks in a row and your numbers on paper. If possible, quantify how much your efforts add to the company's bottom line. If that's not feasible, spotlight your value with comparable salaries for workers in your position from a Web site, such as Salary.com, or from a professional association. This helps prime your boss that you are really underpaid or he/she should think about a good merit increase next year instead of the 3% he/she was thinking about offering you. If your boss really values you and you know you are underpaid and now they know it. They will get the clue that you are probably looking around and might pursue outside opportunities. So, if they want you to stay they will have to figure out a way to keep you. Note: This only works for a while and you cannot continue to extort larger pay increases from you boss. It will get old and eventually the boss will grow tired of the game. If you really feel you are underpaid test your options outside of your company, see point 4.
  4. Plot your strategy when it's time to move on. Create a professional-looking page on MySpace that tells prospective employers why you're an exceptional candidate, recommends John Challenger, of the outplacement firm Challenger, Gray & Christmas. And don't neglect more-conventional networking: Join a professional association, or show up at school reunions toting business cards. I guess I would have to disagree here with the MySpace comment. There are not too many sites on MySpace that are professional in nature. You might be better off posting the resume on Monster.com or on Hotjobs.com.
  5. Milk your benefits. Contribute as much as you can to your 401(k) and other tax-deferred retirement plans. You'll not only build a bigger nest egg, but you'll also cut your tax bill. In the 25% federal tax bracket, every $1,000 you contribute to a 401(k) trims your taxes by $250. And you'll save on state income taxes, too. The goal here is to become a millionaire. You can only save so much so why allow your employer to help you get there faster. For most people the 401K is also one of their largest tax deductions and the best way to defer income.
  6. Flex your tax-saving muscle. Contribute pretax dollars to a flexible spending account to pay for dependent care or out-of-pocket medical expenses. If you set aside $1,500 per year and you're in the 25% bracket, avoiding federal income and Social Security taxes means Uncle Sam will subsidize almost $500 of your expenses. I use this all the time, the thing to be careful on is how much to save. One year we contributed $3000 because we were paying for my daughters braces. So that was easy we just submitted the bill every month. Last year I only contributed $1200 and it was difficult to spend so everyone got glasses and contacts at the end of the year to use up the funds.
  7. Review your tax withholding. If you're expecting a refund this spring, you're having too much tax withheld from your paycheck -- and making an interest-free loan to Uncle Sam. That's no way to become a millionaire. Put more money in your pocket by using our withholding calculator and then filling out a new Form W-4. I have never been very good at this. On the other hand this does have an advantage of being a forced savings. We usually apply our tax refund to paying off a debt or saving it for kids college or something else.
  8. Stash savings in a Roth IRA, if you're eligible. Withdrawals in retirement, including decades of compounded earnings, will be tax-free. This year, income-eligibility limits for a Roth increase to $114,000 for individuals and $166,000 for married couples.
  9. Invest like crazy. Don't delay. The quicker you get a jump on putting money aside, the easier it will be to stuff a seven-figure cushion. If you start at age 25, for example, investing $286 per month will get you $1 million by age 65, assuming you earn 8% annually. Most people now days to do not have pensions. You have to save your way to retirement. In general, I think you need about $3 million to retire so it is 40 years of savings and the earlier you start the better.
  10. Invest automatically, either through your employer's retirement plan or by setting up a regular deposit to a mutual fund or broker. You'll never miss the money, and you'll avoid two big mistakes: buying too much when stock prices are high and not buying at all when prices fall. Another automatic savings that I have found to be very useful is a special savings account. These accounts are great to help you pay for things like Christmas, vacations, property taxes or whatever. Don't you hate it when the Christmas bills come in January and you think how and I going to pay for these. Use a special savings account and pop in $100 or $200 per month and when January Christmas bills come you just pay them off from that account. This of course works if you have maintained a budget and have not run over the amount you have saved. Either way it helps ease the pain in January.
  11. Watch for fund fees. The more you pay, the tougher it is to earn an above-average return. The typical hedge fund, for example, takes 20% of any gains, and that's a huge hurdle to overcome. A better bet: no-load mutual funds with low expense ratios of 1% or less. If you trade individual stocks, watch those commissions. Picking the right mutual fund is always a challenge. I prefer not to pay loads on funds. Additionally make sure that you have good diversification and don't hesitate to get a good financial planner.
  12. Keep it simple. Be wary of get-rich-quick schemes or sales pitches for complex investments, such as oil-and-gas partnerships, that trade on the millionaire cachet to lure investors into buying high-fee products they don't understand. Most millionaire households accumulate their wealth over the long term by sticking to a regular investing plan in a balanced portfolio. Unfortunately there are not a lot of sure fire ways to get rich quick. If there were everyone would retire at 35 and have a great life. The number one rule of Warren Buffet is don't lose money.
I hope you enjoyed this post. If you have a question or a idea make sure you leave a comment and I will try to research it and write about it. Final thought if you enjoyed this post why not Subscribe to Strategies for Life it free. Free is good right?

8 Point Plan to Become a Millionaire

Kiplinger.com, March 2007 had an interesting article that I actually listened to on their Podcast titled Yes, You Can Make a Million. Whether you're an entrepreneur or you earn a salary, take a lesson (or two) from 11 people who made it.

Maybe a million bucks isn't what it used to be (there are nine million households worth seven digits in the U.S. today). But by the same token, making a million is a more-attainable goal than ever. Not there yet? Then let us inspire you with the stories of 11 men and women who started off just like you and then made it. Each of them offers advice you can use. And we'll add our own 12-point plan for launching you on your way to your first million. The rest, as they say, is up to you.

In summary the 8 points are:

  1. "Believe that it's going to happen"
  2. Seize an opportunity.
  3. Exploit your talents.
  4. Learn the ropes
  5. Have a plan
  6. Put in the time
  7. Be patient
  8. Take a chance

I hope you enjoyed this post. If you have a question or a idea make sure you leave a comment and I will try to research it and write about it. Final thought if you enjoyed this post why not Subscribe to Strategies for Life it free. Free is good right?

Monday, March 05, 2007

How to transistion into a new career

CNN had an interesting article titled Following Your Dreams and Seven Tips to Transition to a New Career. Here is what they said along with my comments.

Whether you're in an industry that's desperately seeking workers or one that's continually announcing layoffs, you've likely toyed with thoughts of dropping everything to follow your dream career. But making that leap is often difficult. Another option that is very popular when looking at career changes is the change from employee to business owner or self empolyed. A lot of people end up starting their own business when the find that labor contractions in their particular industry make it difficult to replace their previous position.

For some workers, now might be a good time to consider a switch. The national unemployment rate was 4.6% in January -- and 2.1% for those with a college degree -- according to the U.S. Labor Department. The employment picture "really gives job seekers a cushion that doesn't always exist," said John Challenger, chief executive of outplacement firm Challenger, Gray & Christmas. Another thing to consider when make a career change is the state that you live in. The unemployment rate varies a lot between states. See chart also from CNN.

"There is a lot of demand right now for skilled workers" in many industries, he said. If the job change you make doesn't work out, you're not necessarily facing a dire job market, he said. Here are seven tips that career counselors say will ease any transition:

1. Think career shift, not wholesale change
Don't think you have to make a 180-degree career turn, said Barbara Moses, a Toronto-based career-management expert, president of BBM Human Resource Consultants Inc. and author of "What's Next: Find the Work That's Right for You." Often, those who wish to change jobs "conjure some kind of Madonna-like reinvention," Moses said. That's often requires going back to school and, after that pricey endeavor, it's likely you'll end up in an entry-level job in your new field. This has always been a concern of mine. My wife always wants us to move to Florida. The problem is that I would in the automotive industry and not the banking industry. Most likely I will end up taking a big step backwards if I was to change regions and careers. "Typically, employers will not pay you for that 15 years of amazing management experience you've garnered over the years," Moses said. "Five years and a very expensive education later, they're 50 years old and unemployed." Instead, she said, consider a career shift. Apply your skills to a new industry or job type. "Take those skills ... into a stronger industry like health care or energy," Challenger agreed. "Look for new companies with better environments, more recognition, better pay, less commuting, room for advancement -- whatever it is that's driving you crazy," he said. I do find some of my friends and associates that have been able to effectively change industries and regions of the country by appling this strategy. I am glad to see them find success in this.

2. Translate your skills
Break down what you do into broad skills. For instance, "a journalist is someone who uses words to tell a story," Moses said. That skill might be in demand at a TV production company or in a lobbying firm, she said. Once you've described what you do in broad terms, assess your tastes. "Do you work best in a fast-paced environment or do you prefer to work on one or two things at a time? Do you get your energy from people or do you prefer to work by yourself?" Moses said. "Develop a profile of your skills, your best/worst environments, the kind of features in a job that you need to feel happy and engaged." Your list of skills and job tastes will help you make the move to a new industry, she said. "If you've got 15 years of experience in one industry, it is very important that you drill down to the underlying components of that work, so when you go to sell yourself to a new employer, you're not completely mired in the identity of your previous job," she said. You want to "disentangle your identity from your job, job title and industry." This is an excellent point. A friend of mine got into sales and he went from selling carpet to fork lifts to car parts. In other words the selling skill that he has can be applied to many industries. Make sure that you find a new career that takes advantages of the skills that you have already developed.

3. Time for self-reflection
People usually go about making a career change the wrong way, says Andrea Kay, a Cincinnati-based career counselor and author of "Life's a Bitch and Then You Change Careers." "They say, 'what's out there?'" Kay said. "Wrong question. The question is, 'What's in me? What are my most joyful skills? What do I know about? What do I want to know about it?" she said.
Your imagination will come in handy, she said. "Your fears are going to get in your way," Kay said. "If you cannot have a clear picture and imagine what it is you see yourself doing, it's going to be hard to convince others that it is doable." It would be great to find a job that you really love. Most people I know do not love their job. Actually, I only know 2 people that really love their jobs. You have to be careful that you don't jump from one job to the next before considering how well you would be matched to that type of work or industry.

4. No goals, no go
People often say, "I work all day. How am I supposed to incorporate a career change?" Kay said. "It's doable if you sit down and decide, number one, what's my goal, by what time do I want to accomplish it, what's reasonable considering that I'm working full time and ... what do I need to cut out? TV? Time with friends?" she said. "People have preconceived ideas that they won't be able to do this. They say things like, 'I can't afford it' or 'I don't have time,'" Kay said. Instead, ask questions. Rather than saying, "I can't afford it" find out how much money you're likely to spend on the new endeavor. "You don't know what it's going to cost you time-wise, money-wise, relationship-wise. You need to poke around at your preconceived assessments and see what's accurate and what's not," she said. Only then can you decide whether it's worth it. "Do I want this badly enough to sacrifice the time that I will miss with my family? What am I going to have to cut out? Am I willing to do that?" Kay said. The power of writing down your goals is really quite amazing. If you right down where you want to be in 5 years you are ahead of most people because the majority of people do not have any goals at all. The next important step in accomplishing goals is to list the actions, information, time, and money that you will need to accomplish this goal. After you have completed your brainstorming and orgainzed all your actions the next step is to start working systematically completing the actions on your list.

5. Research the possibilities
"After you've done your online and book research about your new career direction, you're ready to talk to people who can give you real feedback," Kay said. When you talk to others, don't focus on specific job titles. "If you approach it with openness to the possibilities ... you'll go way beyond your little world of a title," Kay said. For example, she said, one client, an engineer, wanted to become an industrial designer. People in the field told her to attend an upcoming trade show. "Sure enough, there were speakers, industrial designers, people from corporations. She came away from that energized, full of information she hadn't even considered -- and even a job title that fit what she was looking for but that she wasn't aware of until she came in touch with it," Kay said. Also, while still at your job, write up a list of the people you know. "You've got to devote time to having lunch with people, talking to people ... your referrals will help you be successful," Kay said. Then, "target your search to fast-growing industries, said Eva Wisnik, president of New York-based Wisnik Career Enterprises. Read the local paper's business section regularly, she said. "Which companies are getting a lot of venture money? Which companies are leasing more space? Which are moving into the area, or are going public, or have the fastest growing revenues?" This is really good advice. One suggestion that I have is to read the local business magazine. My work subscribes to Crain's Detroit I really enjoy flipping through this magazine because not only does it talk about the automotive industry (which by the way has not been doing good for the last three years) it focuses on all the other businesses and industries in our region. It just gives you a really sense and feel for the other possible places to work in your region.

6. Think like a recruiter
Say you want a job selling financial products to young people. What kind of skills would a recruiter want to see? A recruiter would "want someone who could quickly establish rapport with a younger person [and] you'd obviously want somebody with an understanding of financial products," Moses said. Then, write your resume pairing examples of your expertise with what a recruiter would want. "Maybe you organized a successful fundraiser which focused on 20-something guests," Moses said. This process improves your resume, and helps to identify any gaps. If you don't have direct experience with young people, maybe now's the time to organize that fundraiser. This is a popular Anthony Robbins strategy, "Act as if you are in charge even if you are not". The one caveat here is to have a level of expertise that will allow you to indicate that you have some knowledge or ability in that particular topic. Getting the appropriate experience or even surogate experience as the article suggests will help you not only build the resume but also your confidence.

7. Learn the lingo
You don't necessarily need another degree, but consider your local community college for a class to improve your skills. "I do not think people need whole new degrees. Look for that hands-on training that will help you walk in the door adding value," Wisnik said. "You want to sound like someone in the industry already. That helps you sound like an insider versus someone who is trying to get in. It's the lingo, the training." Another route: Join a professional association at least six months before you make the jump, Wisnik said. Such groups often offer certificate programs and workshops, or even training courses during industry conferences, as well as networking opportunities. This is great advice. Don't be a dinasuar, take a computer class learn a new skill. Keep up to date on the industry. There is an old saying that says if you read 15 minutes per day on a particular topic in one year you will be an expert on that topics.

I hope you enjoyed this post. If you have a question or a idea make sure you leave a comment and I will try to research it and write about it. Final thought if you enjoyed this post why not Subscribe to Strategies for Life it free. Free is good right?

Saturday, March 03, 2007

Want more money, how to ask for a raise

CNN had an interesting article on how to ask for a raise. Here is what they said along with my comments.

Want more pay? Some disturbing news. Asking for more money takes some cajoling, but more so for women than men, experiment suggests. Quick confession: I really dislike dealing with demanding, arrogant women. But just for the record, I also really dislike dealing with demanding, arrogant men. In both cases, the phrase "vexation to the spirit" comes to mind.
My equal-opportunity displeasure isn't shared by everyone, apparently, at least not at the office. A few items to remember, the only real time that you can ask for more money is when you are coming and going. That is, when you are interviewing to work at the company or when you have given your notice that you are leaving. Don't expect more than an annual increase of 3% to 4%. The really only way to get ahead inside the same company is to take on more responsibility and get promoted. You most likely will have difficulty asking for a raise about and beyond the normal merit without getting promoted.

In a study conducted by Carnegie Mellon economics professor Linda Babcock, male and female subjects were asked to evaluate videotapes of job interviews with a man and a woman who had completed a company's 1-year management training program and needed to be placed in a division. The subjects looking at the tapes were asked: How willing would you be to hire these people for your department?

There were two scenarios for each job candidate – and for the sake of consistency, the candidates were played by the same actors in each scenario. When the candidate was asked what he or she thought of the salary for the position, in one scenario the candidate said it was just fine. In the second scenario, the candidate said in a somewhat cocky manner he or she would rather be paid at the top of the salary range for the job and would like to be considered for a year-end bonus. I always tell sales people you have to ask for the order, the same goes for job interviewing. You get what you ask for or you might not get what you ask for but you could get more than they originally offered. A lot times when you are asked your current salary it is wise to understand what market rate salaries are for your particular job. If you don't know you could be selling yourself short. Additionally when they ask what is your current salary you have to watch for a potential trap. If your current salary is below market and you have a good understanding of what this job should pay you need to stress what your salary expectations are if you were to receive and offer. In other words don't worry about that fact that you might be making $20,000 less than you expectation. If you have the skills and education and know what the market rate is for this job go for it.

The women evaluating the tapes said they were less likely to hire both the male and female candidates in the scenarios where they asked for more money. The men in the study, however, said they'd only be less inclined to hire the female candidate who tried to negotiate. They didn't penalize the male candidate for doing the same. Both the men and women rated the female candidate who asked for more money as being highly demanding, while in the scenario where she just accepts the salary offered they gave her high marks for likeability. After you have had an initial interview and might be called back for a second don't hestitate to find out what the salary range is by asking the hiring person. I like to say before the second interview, "I want to make sure that I am not wasting your time I just want to make sure I understand the salary range for this job." If they tell you a range and it is in the ball park of what you are looking for you should keeping moving forward with the interview process.

It's not that women can't negotiate successfully for more money, but they might do better for themselves if they used a softer approach, said Babcock, who coauthored the book "Women Don't Ask: Negotiation and the Gender Divide." (The same approach, it seems, might work for men with female bosses.) Babcock cited research that has shown that working women are as effective as their male colleagues when they use a more social style to make a point and relate to coworkers. I'd prefer it if everyone at work exhibited more graciousness and relatedness to colleagues, subordinates and bosses alike. But in lieu of that, it's disturbing that women more than men might have to carry that burden alone or risk being penalized financially. A way to get around this point is to get and offer first. In most cases if the company gives you and offer they will negotiate. But you have to judge the situation as to how early you negotiate. Usually I wait until they have given me a written offer and then I will negotiate. In general get the offer and then cross the t's and dot the i's. There is a good book on this called In Business As in Life, You Don't Get What You Deserve, You Get What You Negotiate I could not agree more. A good friend of mine does and excellent job of this and I am always amazed at what he negotiates for himself when he changes jobs.

Also disturbing is that women often aren't even bothering to ask for more money, according to Babcock. She notes women are 2.5 times more likely than men to say they feel "a great deal of apprehension" about negotiating, and they tend to undervalue their work more than men.
She found women's salary expectations are up to 32 percent lower than the expectations of men in the same job. And when women do ask for money, Babcock's research suggests, they tend to ask for and get less money than their male counterparts.

Making your move
Working up the courage – and a compelling argument – for why you deserve a raise or a bigger starting salary takes some doing for everyone. So here are some negotiating tips from Lee Miller, coauthor of "A Woman's Guide to Successful Negotiating":
  1. Time your move: Approach your boss with requests for a raise a few months before your review because by the time the review rolls around, chances are he or she has already settled on a number and gotten approval for it from on high.
  2. Prepare: Compile a list of your accomplishments in the past year and new responsibilities you have assumed. And find out what the market pays for the type of job you have or seek. Networking with acquaintances at other companies or in professional groups, as well as checking salary surveys, can give you a good ballpark range.
  3. Avoid the empathy trap: If it's true that women are more effective at work when they use a social style, then women can use their relationship-building skills to their advantage. "It's always harder for someone to say no to you if they know and like you," Miller said.
    But it's just as easy for a woman to avoid asking for something for fear of jeopardizing her relationship with a boss. "It almost never hurts to ask. While you may not get everything you ask for, you will be amazed at how often you get most of what you want," he said.
    Imagine you're negotiating on someone else's behalf: It's hard for everyone to negotiate for themselves, but women especially so, Miller noted. So pretend you're representing a client's best interests. "If you do your homework you will know what is fair and reasonable to ask for," Miller said. "Don't settle for less."

Thursday, March 01, 2007

Moonlighting and other things you do to get by

Found and interesting article on The dark side of moonlighting here is what they said:

Having two jobs can help ease your financial burden, but with double the pressure, both jobs and your mental health can suffer. Achieving work-life balance is already a juggling act. Throw a second job into the mix, and it can become a lot harder to perform. Having a second job can really help when you are saving up for a special expense like paying for college or paying off your credit cards. If you are going to work this hard having a second job make sure you plow the money into something that will help you get ahead. You will have virtually no life when you are working 2 jobs so try to make it count.

More than 5 percent of U.S. workers hold more than one job, according to the Bureau of Labor Statistics. Willie Floyd Brunson has been part of this group for decades. A transportation manager by day and a security guard by night, Brunson says the cost of living in the Washington area has driven him to an 80- to 90-hour workweek. ''To maintain good living conditions, I have to work two jobs,'' he said. ''You can't do it on one job,'' he added. Think about that number 5 percent of 300 million people is a big number can you say 15 million people. Unfortunately, if you do live in an area were the cost of living is high you may need to work that extra job.

Brunson, who is preparing for a second marriage and perhaps a new family, said he wouldn't consider quitting the night job. He describes himself as ''old school,'' saying that as a man it's his responsibility to pay the bills. It's not easy -- while the decision to moonlight was ''financially rewarding,'' he said, "emotionally it wasn't.'' Those who hold two jobs must occasionally reweigh the money against the minuses. You have to give this guy a lot of credit he is being responsible and trying to do the right thing. There does approach a point though when you need to think about how you are going to get ahead in life and not have to work two jobs all the time. Education and skills are the way for you to get ahead in life.
For about four years, Tiffany Guarascio, now a staffer for Rep. Frank Pallone, D-N.J., took on extra work. She had started waiting tables while a college senior and kept some shifts when she got her first ''real job.'' But when Guarascio started working on the Hill in 2004, she cut back to waitressing on Sundays only, at an establishment owned by a friend. The job was flexible -- 'It was very easy to say `I need a month or two off,' '' she said -- and it became a social outlet. But last summer, when Guarascio recognized that the service she was providing was starting to reflect her resentment over working so much, she quit. It's important to know when your are over doing it. Remember all work and no play make you a dull person. If you work all the time and never relax you will suffer from career burn out.

Taking an additional job primarily to make extra money can be stressful and unproductive, according to Renee Lee Rosenberg, an author and career coach with the Five O'Clock Club in New York. Her clients with second jobs often ''get very angry and depressed and start resenting their primary work also,'' Rosenberg said, and sometimes, with better budgeting, a second job isn't really necessary. This is a key point. When your bills are too high you need to consider if you lifestyle is out of control. Cutting back and living within your means if the surest way to a happier life style.

She stressed the importance of researching what a job requires before saying yes, so you can know whether ``you can function the next day.'' Some second jobs can lead to more enjoyable primary jobs. ''It builds an opportunity to build a new network and ultimately it may develop into a new career,'' said Kathy Blanton, a career management consultant for Spherion in Nashville, Tenn.

By day, Mike Graglia manages a team working on education in Africa at the World Bank in Washington. A few evenings a week he teaches yoga. He wanted to do more yoga and figured teaching would be the next logical step in his practice. He often schedules his flights to Africa around his yoga commitments and swaps classes with other teachers when he's out of town. It's common to find Graglia at the yoga studio with a suitcase -- either coming back from a trip or on his way out. ''I love both my jobs, and they balance each other out,'' Graglia said. ``Yoga is a genius one because it keeps you healthy and keeps you moving.''
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