Thursday, September 24, 2015

Most Influential People - Jim Rohn

I was exposed to Mr. Rohn's self help material in the form of a six part cassette titled "The Challenge to Succeed".  My dear friend loaned it to me when I was 21 and in college which I believe was loaned to him from a mentor or friend.  The knowledge packed into that program completely changed my life for the better.  It was the right material at the right time.  I would have been too immature or unreceptive to the message had I received it sooner.

Perhaps his most radical idea which has become cornerstone in my life is what he calls "The 5 major pieces to the life puzzle".  They are:
  1. Philosophy - The sum of your knowledge
  2. Attitude - How you feel about what you know and the emotions behind the knowledge
  3. Activity - The manifestation of your ideas into reality.  Actions, habits, etc.
  4. Results - Feedback loop for self improvement and self evaluation.
  5. Lifestyle - Making Joy and Happiness priorities in life; building and maintaining relationships.
Amazingly, I was able to find a video youtube hasn't taken down yet of one of his weekend lectures which would have cost > $500 to attend.  In this video, he tells you about who he is and how he got to be where he is, which is a very interesting story alone.  He'll spend a good 30 minutes on each of these key points above as well as cover a ton of other things.

Yes, it's over 4 hours long and it covers a ton of material.  But if you seriously want to absorb the content and allow it to alter how you think for the better, than I suggest dedicating a full half day to it.  Grab a notebook and pen and take some notes too.  Then listen to it a few times over while driving or at work.  Let the ideas seep into your subconscious thoughts and you'll suddenly find yourself a different person.  

That's exactly what happened to me.  I still listen to this whole lecture occasionally, at least once a year.  So, without further adue, I give you my favorite business philosopher one of the most influential role models.  If you like this, I recommend all of his books and talks.  I've read and heard them all.

Walking the talk - Balancing quality of life with early retirement goals

I, like most Americans, am a materialist.  Perhaps more so than most.  I grew up with parents who earned slightly more than average, thanks to their entrepreneurship.  While they did have more freedom being their own boss and earned more than most, they also worked longer hours and happened to spend more.

Sure, we got to go on many vacations and enjoyed nice toys and went out to dinner several nights a week, but they worked well into the night, almost every night.  My dad especially would work 16 hour+ days often; I'd rarely see him daily for more than a few hours before I was in bed.  He'd leave in the morning before I was up nearly every day. What little time I did spend with him during the week was usually unmemorable; he was too tired to really play with us after working such long days. He also worked weekends often.

Of course he did all that he could, spending his free time taking us on trips and building things in his workshop.  My dad did what he thought was his best to keep up with the expenses and still be a good father. I argue that the opportunity cost he paid was too high however.  My parents spending habits have always mirrored their income, which is very unfortunate.  The more they made, the more they spent and thus the more they had to work.  They still likely won't be able to retire any time soon.

From what I just shared about my upbringing, I've concluded two things.  Number one, I never want my job to be more important than my family.  Secondly, I'd rather spend less and retire earlier.  The first point is pretty self evident, being the best father and husband I can be by doing all I can to spend as much free time with my kids.  And who doesn't want to retire sooner than later?  Even if you love your job, why would you desire the necessity to work due to bills?

Unfortunately, both of these goals seem to be at odds with each other.  One can pick a quick route to retirement by working several jobs or working hard at advancing their career.  Or they could take a job that lets them work minimal hours to cover their expenses.  Finding a balance between the two is very difficult when you have a family.  Had I spent my 20's working very hard and living very frugally and investing more, I would have been able to retire by 30.  On the other side, what I learned about myself and the experiences I had in my 20's are invaluable.  And now as a family man with two children, I no longer have that option.

My solution to the balance problem

So how does one strike a balance between advancing their career and earning enough, while making time to connect with one's family and friends?  The particular solution I've found won't work for everyone, but it may for many, especially in the rapidly changing economy of knowledge based work.

  1. Pick a career field that is based in knowledge work (i.e. a desk job) that involves a specialized skill set.
  2. Work harder on yourself than you do at your job, becoming more specialized in that area and an expert.
  3. Land a job with great pay, minimal work load, and negotiate 100% telecommute terms.
  4. Maximize your investments and minimize your spending.
Let me break this down.  Step one is pretty important as some lines of work will never allow you to work remotely, such as construction.  Most office cubicle jobs however can be done remotely, especially ones where work is handled asynchronously, like generating reports and analysis, or building code that doesn't require real time interaction over the phone or desktop sharing and doesn't have many meetings.  IT is great for this, but not all areas of IT lend themselves to such workflows.  The goal is to be able to be more flexible around when you can work, giving yourself the option of taking a 4 hour lunch to take your kids somewhere and then working later while they are in bed, etc.

Step two is my little gem I got from my favorite business philosopher, Jim Rohn.  By working harder on yourself, you increase your own value to the marketplace; your earning potential rises quickly. There are tons of free resources on the internet, free classes, books, etc.  Spend at least one hour every morning before you go to work studying and working on yourself, and I can almost guarantee you'll get a raise and promotion nearly every year.  I did better than that.  I've managed to double my income nearly four times over since I started working.  The core of my knowledge I use daily I didn't get from college, but self study on the web.

Becoming a renowned expert in your field not only lets you fetch high salaries and likely lets you negotiate telecommute terms, but you'll find that the high end jobs are typically less stressful and you'll likely do less actual work.  It's ironic how this works, but part of it is because you've become so highly skilled that you are able to complete work much faster than expected.  By being able to work remotely, and asynchronously, you can design each day to spend in how you'll spend time with your family and plan to get your work done in the most convenient way to you.

Taking a page from Mr. Money Mustache, step four is all about shortening your route to early retirement.  While I endorse what MMM preaches in finding gratification from things that don't involve spending money, I'm a materialist as I mentioned.  So I believe in delayed gratification; if you want a particular toy and you can afford it now without exceeding your budget, then go for it.  Otherwise, if you have to finance something, adjust your investment & savings budget, or sacrifice another necessity, it's probably better holding off.  The key is understanding all purchases in terms of how long they will delay early retirement and weighing the value.

So that's my current life balancing strategy.  I just got 100% telecommute again as well as a role with no on-call or after hours support, which means my time outside of my duties is mine.  This is very big for me since I've been on call at every job since about 2003.  One job I averaged 60-70 hours a week doing after hours support.  Never again.

That said, I'm involved with many other projects which eat into my personal time as my job is never my only source of income.  Landlordship, consulting, teaching, writing two blogs, and several startup endeavors just to name a few.  However, I still make sure that the responsibilities they bring take a backseat to my family.  The primary objective regarding maintaining work/personal balance is to keep your priorities straight.  It's not always easy to do this, especially if you love what you do and get sucked up by work projects and lose track of time as I do.  I find keeping photos of my family in field of view helps a ton since I'm a very visual person.

What I've found in progressing down my career path is an increased amount of freedom.  Becoming highly sought after by recruiters changes your thinking and sense of stability.  You aren't ever worried about being employed when you get daily phone calls and emails that are trying to sell you on their opportunities.  While I still keep my eyes open for anything that looks good, I've found a company that grants me exactly what I'm looking for, so nothing better has come along yet.

The other major piece to early retirement is minimizing spending.  I'll save the topic of budgeting for another post.

Thursday, August 6, 2015

Counterfit Curriculum Vitae

If you've very applied for a job, you likely have a Curriculum Vitae, known as C.V. or resume.  Perhaps you've slightly overstated the significance or accomplishments, framed minor achievements in different light to make you look better.  This is typical behavior for many applicants (34% according on one background checking firm) who are trying to make a huge jump in their career to a position they may not necessarily be qualified for.

But inflating your accomplishments is one thing, but outright lying about past work experience, education, job titles, or certifications will quickly damage your reputation and disqualify you from opportunities which you might have been qualified without the lies.  The prevalence of lying is perpetuated by the fact that there is no central "blacklist" that hiring companies can check.  Even past employers or job placement companies will never publish any defamatory information in fear of lawsuits.  Thus, those who lie can get away with it time and time again.

There's no shortcut to more senior positions; everyone must start at the bottom and work their way up in any field.  Sometimes rising through the ranks can be greatly accelerated by "working harder on yourself than you do at your job" as Jim Rohn puts it.  But you still have to put in the time and on the job experience can't be faked or replaced by any number of certifications or degrees.

While I don't condone any form of truth stretching as I feel that lying to yourself erodes your character and is not living consciously as well as immoral and unfair to others you are competing with, there are HR policies in most companies that you should know about that some take advantage of.  The biggest one perhaps is that most previous employers have internal policies about not not disclosing any information about your employment other than verifying your title and dates of employment.  While it's not law, most larger companies do this to again protect themselves from lawsuits. This includes not disclosing salary, reason for termination, disciplinary action, or even recommendations.

What this means is that one could lie about their salary history in trying to get a better offer.  While this might work to some extent, prospective employers can spot this pretty easily.  It turns out it's actually best to never disclose your salary history to anyone as you are more likely to be hurting yourself in getting a better offer.

Your CV should be a two page summary that paints you as a superstar employee, focusing on your work history, education, accomplishments, and achievements.  Highlighting your pros is not in any way stretching the truth and is what your CV is all about.  In many instances, padding numbers like number of clients sales or servers administered doesn't get you extra points; the fact that you did certain tasks is enough to portray competency.

What inspired this entry was actually what transpired out of a recent round of interviews I was brought in to participate in as an expert.  A very strong looking candidate's CV claimed to have very high level certifications and a degree.  When I noticed some irregularities in how the certifications were listed, I started investigating.  Not only was the certification numbers not provided, but the school which they supposedly graduated from wasn't accredited to award bachelor's degrees.  When pressed, they admitted to outright lying.

Even if you are able to land a job by using a fake resume, you are selling yourself short.  Most likely you won't be able to do whats being asked of you and you'll become over stressed and possibly mess up and get canned.  You could be found out as a fraud after the fact.  You'll miss out on the growth opportunity and other missed job offers better suited for your present skillset and abilities.  

Don't shoot yourself in the foot, do your time at the bottom of the career ladder, but spend an hour or two a day studying for that certification or take special training or do school part time.  Bettering yourself is the only way to shortcut your ascension to better paying jobs.

Tuesday, July 7, 2015

Budgeting 101: Credit cards are not evil - why I never use cash

The misconception that credit cards are evil is particularly bad for those trying to budget and track their spending.  We all know credit card debt on the other hand is very bad as it accumulates interest and can cost dearly if left unchecked.  So how does one strike the balance of benefiting from the financial tracking while avoiding accruing interest?

Paying off the card each month prevents you from being charged interest.  While this concept seems simple in practice, if you are struggling from paycheck to paycheck, this can be difficult.  Lets back up here and dig a little.  If you are living paycheck to paycheck, the chances are you are spending all of the money you earn because you're operating on what is known as a "cash-based" accounting mindset.

This means that you check your bank account (or wallet) often to see how much money you have before you decide to make a purchase.  If you don't have enough money, you don't buy something or you go for the cheaper option, whereas if you have extra money you'll splurge a bit and maybe buy something you don't need.

Even if you aren't living paycheck to paycheck, most of us do this naturally.  It's the most simple learned behavior from interacting with money, like kids with their allowance.  Sure you can save up for something big, but the quantity of money one has directly influences their purchases.

Accrual Accounting

The quickest way to get out of the paycheck to paycheck cycle is to upgrade your cash-based accounting mindset to the more advanced accrual accounting methodology.  This is a discipline that goes hand in hand with budgeting.  If cash-based is like taking the pulse of someone's heartbeat by hand, accrual accounting is using a full body monitoring system.  It takes more work to operating with accrual account, but the benefits are worth it.

Think about your bank account as a lake.  Water flows in (your income) and water flows out (your expenses).  If the rate of water flowing out is faster than flowing in, the lake dries up.  Accrual account is looking at the total spending vs the total income.  What accrual also means is that credit card spending is counted when the expense occurs, not next month when the credit card bill is due.  This lets you take advantage of your cards and earn points and miles as you use them to pay for everything from bills, rent, loans, to even your $3 daily coffee.

The more you use credit cards and keep them paid off, the better off you are for three reasons.  First, you earn all the points, cash back, miles, or whatever benefits you get from using the card.  These add up when all of your expenses are going through your cards. Secondly, all this spending and keeping your cards paid off dramatically increases your credit scores, enabling you to borrow more at better rates when you need to make big purchases.  And lastly, credit card companies automatically post each transaction to your statement, available online or even through the smart phone app.

This is really important because you can then download these expenses and put them in your favorite accounting software or just plan excel and figure out where your money is going.  This lets you make a budget and curb unnecessary spending habits.  It enables you to be honest with yourself and spend more consciously.  That $3/day coffee habit adds up to more than 3 times the cost of a coffee machine every month.

Thinking ahead

So instead of checking daily how much money you have in your account, you can load your budgeting app or spreadsheet and see how far over or under you are for your budget that month.  If you budget in automatic investments or transfers to savings, then you'll be able to save every month.  And if your income is volatile, knowing in advance how much you need to earn to cover your budget and planned expenses is invaluable.  If you regularly are hit with large, one-time expenses, having the accounting records to see a historical trend can help you budget for future expenses.

Using cash thwarts this system unless you manually enter in every transaction, what it was for, amount, paid to whom, classification, etc.  Using credit cards automatically does this for you.  You'll want to use accounting software or a service to import your transactions from all your cards and bank accounts to keep track of this for you automatically.  Writing checks is only slightly better than using cash; it's still less than ideal.  I only write checks if I have to; most bill collectors will let you pay with credit cards, though watch out, some will add a fee for doing so.

Converting to accrual accounting has never been easier with credit cards and automatic accounting software.  Don't say to yourself "well I don't make or spend very much money, I don't need to do this."  You need to start now before you start earning more money, or you'll end up spending even more.  Think about some time ago when you earned less.  You spent less because you had to.  Now you earn more and if you aren't saving, you are spending more.  The only way to get ahead is to not spend all that you earn.  You can only do that if you have visibility to where your money is going.

This is the first step to financial independence.

Friday, July 3, 2015

It's Alive!

Hi there, I'm Bryan, seasoned IT professional, investor, startup owner, landlord, life hacker, financial wiz.  I'm well on my way to early retirement; life has been good to me and I feel it's only fair to pay it forward and share what I've learned in positioning myself to live the good life.  I've also made plenty of mistakes in getting where I am now and I'd like to impart wisdom so others don't repeat them.  

I've been meaning to create this blog for at least 2 years when I came up with the idea and name (pronounced pown-ing).  The vision I have for this blog is to provide complimentary information and quick references for personal finance, taxes, small business practices, investment ideas and opportunities, career related advice, and other educational resources on how to become financially independent to retire early.

I was inspired to strive for a better life for me and my family by many great authors and bloggers. I'll be covering these authors in more detail in future posts, but for now here's my list of those who have inspired me the most:  Jim Rohn, Brian Tracy, Timothy Ferriss, Pete MMM, Steve Pavlina, Malcolm Gladwell, Napoleon Hill, and George Samuel Clason just to name a few.

This blog should serve as a jumping point for aiding in planning your short term and long term financial strategies by inspiring and educating.  I'll do my best to keep entries organized by type for quick reference.  There's an active Facebook group which is associated with this blog which serves as a general forum for discussing ideas and current events.  I look forward to engaging with you and helping you plan for the future.