Financial Literacy

There are many elements to career planning but the element I notice that is missing the most is annual skill building. If you would like an upward career trajectory for challenge, income, responsibility, control, fun, or whatever – it can only happen if you collect the necessary skills and experience to be awarded those jobs and promotions. The most certain way to make that happen is to add or advance one new skill per year. It could be learning a new foreign language, learning a new coding language, taking a course in negotiation, or a new technical certification. Today, there are endless ways to learn something valuable to offer potential clients or companies.

Most careers include moves to other companies, industries, and geographic areas. Naturally, the best way to get hired is to have a unique collection of valuable skills to offer potential employers. I’ve observed that workers in their 50s and 60s who lose their job fall into two groups. The first group was complacent, having never added or enhanced their skillsets – so they were reduced to a replaceable commodity that is younger and cheaper. People in this first group are either never hired again, or if they are, it is at a vastly lower pay than their last position. An example of this group would be someone performing a physical task in a warehouse who was automated out of a job. The second group found a way to accumulate highly specialized skills or knowledge that kept them in high demand. They usually find new employment quickly at their same level of compensation, possibly higher. An example of this second group would be someone who was active in bringing new speakers to their career association group, staying on top of changes in their industry, and getting certifications in upcoming methods of efficiency.

To build a career that is improving and growing, it must be nurtured and supported with new skills. The world economy will always slowly change and become more efficient, so you need new skills need to keep pace. If a new process puts your career on a downward spiral of obsolescence, then it is time to re-assess and focus on a career shift to one with an increasing demand.

Nothing is easier than criticism. This is true whether the subject matter is food, politics, the weather, or a movie. It takes no talent, no insight, is subjective, and doesn’t actually do anything valuable, productive, or helpful. Indulging this type of thinking on a routine basis can be caustic in the workplace with colleagues, clients, and supervisors. Another type of thinking is to discover and focus upon the positive elements of every situation. This is more likely to be nourishing to work colleagues, clients, and supervisors. Which type of routine thinking do you think boosts your career or tarnishes your career? One of my favorite quotes about avoiding negative thinking and complaining is by Henry Beecher, “When people ask me how I can accomplish so much more than other men, I reply that I do less than other people. They do their work three times over; once in anticipation, once in actuality, and once in rumination. I do mine in actuality alone, doing it once instead of three times.”

The whiniest complainers attempt to justify it with comments such as, “I’m just a realist,” or, “I just tell it like it is,” or tag the end of their dig at something with, “…, I’m just say’in.” I know a highly-competent woman in Chicago that has been unable to keep a job more than 2.5 years because of her negative thinking. She’s really good the first year when everything is new, but then her negative and critical thinking begin to fester. Instead of being pro-active about opportunities, her fake victim-mentality thinking prevents her from solving problems that are easily addressable and within her authority. These problems begin to chafe and then she sours on the job; either getting fired or quitting around year 2. This cycle repeats over and over, and yet, she has been unable to make the insight that she, alone, is the problem. As I write this, she was fired yet again, and this is occurring during her critical peak earning years.

No matter what your job may be, it will involve at least one of these three work categories:

1. Physically performing a task
2. Mentally solving problems
3. Conceptually setting strategy

You may choose to scan for, focus upon, and talk about things to criticize about performing them, or you can notice the positive elements of the situation and simply get it done. You can have a negative viewpoint habit and create a toxic work environment (even if you work alone), or a positive viewpoint habit and possibly foster an uplifting work environment. There is a lot of neuroscience around thinking negatively and how it physically shuts down your brain’s neocortex to discover and make better decisions.The best way to do this is find something interesting, challenging, fun, about what you’re doing or what that will accomplish.

Both of these basic attitudes are mostly simple habits. Changing your way of thinking may be difficult, but it is not impossible with repeated practice. I had one great mentor that trained my mind. One of the things he taught me is that whenever a problem arose, he’d say, “This is good because…” And offer a potential solution (either through or around the obstacle) that would leave us better off than before. After listening to him consistently reframe problems over a few months, I found myself automatically saying it to myself and others, and it forces you to come up with better options. Our solutions did not work all the time. However, this little reframe of the issue places your focus on the path of solutions, making progress, and maintaining the momentum that leads to successful problem solving.

Some politicians and activists talk about the “injustice” of the income inequality between the poor vs. the rich. Luckily, there are plenty of statistics and decades of studies that highlight the steps that lead to poverty vs. the steps that lead to financial success.

According to the Brookings Institute: if you can avoid combining all 3 of the following events, then it is virtually impossible to remain poor in the U.S. Here are the necessary landmines, that when combined, lead to poverty:

1. Drop out of high school.
2. Only have a part-time job.
3. Produce children out of wedlock while you’re under age 21.

No matter what an individual’s circumstances, avoiding all three of these events are within the individual’s control and there are no notable barriers to avoid these. If you can get a high school diploma, or get a full-time job, or delay having children until married (after age 21), then it is nearly a guarantee that you’ll advance into the middle class or beyond.

What if you’re not satisfied with a middle-class income? There are some additional hurdles that may assist you to advance into the top 5% of all income earners (today, that is around $230,000 per year). According to the Tax Foundation, the majority of people whose income is in the top 5% check off these attributes:

1. Have a college degree.
2. Are a small business owner or business executive.
3. Focus on career and financial goals every single day.
4. Are frugal and savers.
5. Have developed at least two sources of income.
6. Have +10 friends that are very successful.
7. Have a career or business mentor.
8. Have a positive outlook and avoid pessimistic people.
9. Enjoy what they do for a living.
10. Work more than 50 hours a week.
11. Took a significant financial risk to become rich.

Again, no matter what your circumstances, all of these traits are available to everyone to work toward. Only two of these items may require money upfront (the college degree and small business owner), the remaining items only require attitude, or making the effort.

Let’s ignore that most poor Americans today have a higher lifestyle than 99% of human history, and just examine income inequality. In the U.S., this statistic began to rise in the late 1980s and 90s. Coincidentally, this was the exact same time as the arrival of a new batch of billionaires: the business founders of Microsoft, Apple, Berkshire Hathaway, Cisco, Dell Computer, Oprah Winfrey Productions, and a few hedge fund managers. This handful of billionaires, providing value to millions of people, began skewing the income inequality statistics for the country. If you lived next door to a billionaire, would raising the minimum wage by $200 do anything to reduce the income disparity between you two? Not one speck. Rather than focus on income disparities, it is more helpful for the country to focus on increasing economic freedom. And individually, it is more productive to focus on moving up the steps of economic success.

The vast majority of us avoid criticism at cost. This includes countries, companies, and individuals. However, getting feedback is critical for advancing in the muddy waters of career, business ownership, investing, and many more financial matters.

In order to learn, improve, or change course you need new information, and that information is known by experts and mentors. The only way for you to access that information is getting specific feedback from others with proven track records of success. I’m acquainted with someone who has a stunted professional career, very poor investing results, and makes bad financial decisions. It is no coincidence she seeks no feedback and tries the opposite approach – everything she does is top secret from those that could help her. However, whatever isn’t immediately obvious will eventually become so over time; which makes her appear all the more ridiculous. She wants everything kept secret so that she won’t be judged or criticized, perhaps because she doesn’t have the maturity to cope with them.

Contrarily, I try not to make any notable financial decision without chatting with a few of the brightest and most successful people that I know. Invariably, they will offer decision-making facets that I hadn’t considered, a news item I was unaware of, or where to get more expertise. As a result, even the tiniest home maintenance decisions I make are more thoughtful, financially robust, and cheaper over time. I don’t care if the feedback I receive is abrasive, demeaning, insulting, or humiliating – I just want the information to improve and the sooner the better. A year out of college, I wrote a draft financial cover letter for the Controller and he sent it back to me, nearly dripping with red-ink corrections. My colleagues were aghast and so happy that they didn’t attempt the letter. But I viewed it as a great gift – my re-draft was great, it taught me how to convey financial information – how else could I have been taught so quickly? A lending mentor of mine repeatedly used the phrase, “It takes steel to sharpen steel” when he was about to give me some brisk suggestions.

What do you think happens if you’re taking the wrong path with the wrong approach? You head straight into a ditch. Getting mentors and advisers for feedback is likely the most important thing you can do for your personal success. There are people in your position making twice as much as you do. What are they doing differently than you every day? The easiest way is to find several and take them out for a meal and ask them, one at a time. Find out exactly what the people a level above your success are doing differently so that you can incorporate these tasks into your routine.

A mentor is critical to an advancing career because you must know what to do along with landmines to avoid. Advice on both of these fronts dramatically reduces the trial-and-error approach that most people follow, and it dramatically increases the time it takes to move ahead. This also applies to business ownership, stock investing, real estate, retirement planning, and personal budgeting.

Which person below is more likely be on a path to promotions and raises?

In a conversation with your supervisor:

• Person A, “I work harder than anyone else around here. Give me a raise right now or I’ll look elsewhere!”
• Person B, “I would like to become more valuable to the company. What skills, certifications, degrees, performance, and experience do you recommend for me to advance in the company?”

In my opinion, Person B has a far better long-term strategy to consistently earning more money through gaining more responsibility and corresponding promotions. Person A is more likely to be viewed by management as a whiny complainer, and hopefully they’ll soon quit on their own and be replaced with someone more compatible with the company.

There are 3 elements to getting a pay raise and all of them need to be addressed before you ask for a pay raise. Too many employees fail to do this and end up frustrated or look to quit out of anger when their supervisor refuses to give them a raise.

1. Employer’s Perspective

It is nearly certain that your employer has a budget and your supervisor has salary limits. For your current position, in your industry, in your geographic area, what is the high/low pay range? And now, where are you within that range? If you’re in the upper quarter of the salary range, that can be a problem because your supervisor can replace you with someone new and save a lot of money. Scores of people in their 50s and 60s are laid off for this exact reason. They are in the upper 10^th of the salary range and there are too many qualified people to replace them at a far lower salary. (I know someone who relentlessly badgered her weak-willed boss over years to ratchet up her pay far beyond her average performance. But then a new supervisor was hired and once he discovered her performance and prima-donna salary, she was let go.)

2. Your Relative Value

Do you consistently exhibit traits worthy of moving up in the company?

How would someone objective compare you to your co-workers?

Do you volunteer for more responsibility or duties?

Do you easily adapt to new systems and changes?

Are you a high or low-maintenance person at work?

These behavioral traits, and many more, are what your supervisor will consider to determine which people to offer pay increases and promotions vs. those people to pass over.

3. General Negotiations

Your exact pay is a function of a negotiation so it is best to have an idea of the negotiating authority of each side. Does your supervisor believe that you are easily replaceable or are they desperate to keep you? If you’re viewed as easily replaceable, then perhaps you have failed to distinguish yourself or you’re working somewhere where you cannot distinguish yourself; maybe this is the wrong company for you. Sadly, about a 20% of all managers are unqualified for their position. Do you wait it out until they are moved, or apply for positions in a different department, division, or company where you’ll be valued and respected?

When you’re initiating a discussion about a pay increase, the strongest negotiating position is to actually have a job offer from another company. If your supervisor isn’t interested in offering a raise or at least a career development plan, then you have the ultimate bargaining chip – to walk out the door.

Viewing a pay raise as a single confrontation with your boss is a very poor way to address it. The best perspective is to have ongoing discussions throughout the year on career development and paths to promotions, combined with knowing your value in the marketplace.

Very few careers move in a straight line from start to finish. Many people find their career options and aspirations change over time. Where ever you are in your career, it must be actively managed and include actions toward increasing your annual income. For example, I know an attorney that is relieved to get out of being a trial attorney and instead trades collectibles on eBay. Another friend who, later in life, is relieved to have switched from journalism to practicing law, later in life. Both are far more satisfied with their careers and both are earning more money, but these transitions do not occur by accident. It is common to seek a career that is fun, fulfilling, and changing the world, with a distant consideration of paying your bills. Scores of people try to become musicians, actors, artists, models, YouTube stars, etc., which is fine. But sooner or later, you need to do more than scratch out a living to support yourself and family. Many people fashion some kind of job or side gig around their passions or hobbies, but too many ignore growing their income until it is very difficult to turn around.

There are two times when career and financial gaps are glaringly highlighted:

1. In their 30s, a growing gap becomes obvious between people who obtain job titles such as supervisor, manager, director, vice president (or a business owner) and people that remain on the bottom rung of a career.
2. In the late 50s-early 60s, another gap appears between those able to retire early, in comfort, and those who will never be able to retire.

Let me provide an example from two acquaintances with whom I attended high school. One classmate retired in his late 40s from an empire of trailer parks and he now travels with his family by private jet. Meanwhile, another high-school classmate took a job stocking shelves at a hardware store after he graduated. Now in his mid-50s, he is still a stock boy at that same hardware store. He has gone through a bankruptcy and home foreclosure, both of his children are bitter about their childhood in poverty, and he has zero savings for retirement. Even if being a stock boy were his dream job – he made no effort to increase his income to support himself and family (besides a part-time job at Burger King that he quit after 10 days).

Financial stability and a career trajectory are always important, and become more so with a family and kids, along with retirement planning. So it is highly recommended that you put some thought, effort, and execution toward advancing them, alongside life goals along the way.

Adults complaining about the following generation have been going on for thousands of years. Even Socrates had some comments. So this perspective seems to be normal human nature. When it comes to business, I’m old enough to remember several iterations of consulting companies offering “how differently you need to address the new generation being hired now.” The new generation entering the workforce is somehow “totally different,” and so their particularities need to be catered to for both hiring and retaining them.

For a hundred years there have been slight differences between current workers and new hires in regard to expectations and behaviors. Most of these differences can be summed up by saying: You need to be extra sensitive and lower your expectations.

The latest generational label is Millennials and human resource directors read articles every month about how this generation is so very different than prior few generations. This is nonsense. Recruiting and retaining top talent hasn’t changed, ever. What are some timeless tactics for successful recruiting?

1. Outline paths to advancement
2. Go over the desirable characteristics of the company and position
3. Detail the vision, purpose, and values of the business
4. Never permit a slacker or critic in the door (or once discovered, remove immediately)
5. Fairly fulfill your promises to employees

While the exact benefits package will slowly shift over time, these 5 tactics will not. Each generation has a wide variety of talent and if you sort for the best then you have a chance of hiring the best. Each generation entering the workforce will trigger a new avalanche of consulting presentations. As long as you stick to the timeless 5 tactics, when the next “totally different generation” comes along, you won’t have to modify to your recruiting program.

In every profession, there is ample opportunity for complaint. Before you contact human resources or the press, though there are career considerations you need to assess. Likely, your action will kill your career at your place of employment, and possibly follow you anywhere that you go.

There could be a long general discussion on ethics and beliefs, and since each case is unique, I want to illustrate a starting point for your consideration. This is because I have friends, relatives, and colleagues that have ruined their careers for minor complaints or whistleblowing actions that they later regret. Most were warned about the backlash, and never expected any consequences to hit them personally, but they did. Plus, you’ve likely read or heard about numerous similar cases or very public ones that occur every day.

There is an old saying: “There is no such thing as a smart mob.” This also applies to employers, both public and private. Once you’ve been labeled as “a trouble maker” or “traitor/disloyal” then you become radioactive to your supervisor, manager, union, or anyone else with hiring authority. It is a permanent stigma that taints your reputation, no matter how justified the reason may have been. Perhaps you’re a hero for getting a policy changed for the better, but you will personally pay the price in lost career opportunity. The consequences for going to human resources, regulators, the press, or anyone with your complaint could be immediate dismissal (in spite of any state or federal rules to the contrary), or finding yourself demoted to the bottom rung of the career ladder for the remainder of your career. The more public your whistleblowing escalates, the higher your risk for smear campaigns, harassment to you and your family, blacklisted, death threats, and more by anyone else threatened by your actions.

If you are aware of imminent harm to befall others, that is a different level of issue than the person in the next cubical getting a slightly larger office that has less seniority than you. In this context, where on the spectrum of concern or consequences does your issue fall:

• Is the public unknowingly putting their lives or health at risk?
• Are customers being defrauded?
• Is there systematic unfair treatment against a group?
• Is this a personality issue between individuals?

Of course, if the public or people are being put at health or financial risk, action must be taken. But must it be taken by you? Could others already be aware of the situation and working on actions that you may not know about? Today, there are many ways to make an anonymous notification to regulators or law enforcement without anyone figuring out that you alerted them. Inside a large organization, it is possible in some scenarios to make anonymous accusations about issues. But be aware that without courtroom proof from someone coming forward to interrogate, human resources or regulators cannot do much or anything about it.

The big question you have to decide is: is this issue so important to you that it is worth ending or stunting my career? If it is, that is fine. But few people think through all of the career and financial consequences and are blindsided when their colleagues, supervisors, and others begin cutting you out of their lives. If there is an issue that is a big problem, but just for you personally and not worth potentially ending your career, it is time to get another job. If you’re working for a large company, perhaps you can move to a different department, division, or group. But for most, it means seeking employment with a different company or organization.

The average worker reads less than 1 book a year while top business CEOs read 60 books a year. These CEOs make 319 times more money than entry-level workers. Is there any correlation?

33% of high school graduates never read another book in their lifetime. Meanwhile, it is common for multi-millionaires to read dozens books on self-improvement topics, such as:

• Career development and advancement
• Business development
• Societal trends
• Biographies of remarkable people
• Leadership and psychology
• Learning and memory
• History
• “How to” titles
• Future forecasts

Success is dependent on increasing your skills and knowledge. Is your current book reading closer to the average worker or the top CEO? Do you have a daily habit of learning? Or are you leaving improvement to your competitors and colleagues that may be leaving you behind?