Financial Samurai

There’s a big difference between getting fired and getting laid off.  Most of what you read in the papers is about people getting laid off due to a “reduction in force”, or RIF as many companies call it nowadays.  Getting fired is almost always due to cause.

You may have sent out a blast e-mail with company secrets by mistake.  Or perhaps you said some sexist joke about women when the female HR manager so happened to walk by.  Whatever the case, you don’t want to get fired, nor should you quit if you don’t have to.

If you are fired or quit, a number of things can happen:

1) You will not be eligible for our government’s gregarious 99 weeks of potential unemployment benefits.  The logic is, you did something wrong that forced your company to fire you, hence it is your own fault you are unemployed, hence no soup for you.

2) You might have a black mark on your record if you’re fired, making you damaged goods for future employers.

3) You may lose supporters who would have written letters of recommendation.  But, since you were fired or quit, they might not want to risk their reputation on you anymore.

4) You might die alone.  Few things in life are worse than dying alone.  You’ll understand how difficult it is to do your own thing, or quit with no back-up in the post.

GET “RIFFED” AND BREATHE EASIER Read more…

Housekeepers on cruise ships make around $40 a day working 12-hour days on average. They get zero days off for the duration of their contract of 6, 8 or 10 months. That’s right, zero days off, 12 hour days, and no visits from family or friends. You think your 10-hour a day job is hard?  Please, reconsider and think again.

What’s even more impressive than working for only $40 a day is the service staff’s positive attitude. For 12 days and 12 nights, never was I greeted in a less-than-happy manner. Whether I was asking for directions to the theater or requesting the New York Times in the morning, the service staff were always eager to serve.

The entire service staff was from either Indonesia or the Philippines. Hence, $40 a day might be equivalent to $200 a day back in America or Europe based on purchasing power parity.  Furthermore, after working for 300 days straight with not one weekend off, one could theoretically accumulate $12,000 US dollars + a bonus, equaling roughly $50-60,000 dollars of buying power back home.  Not bad at all!

The service staff I spoke to said that they send roughly 80% of their pay back to their families. Their expenses are little because they all get free room (two to a room) and board. A couple of them had the option of doing 6 month contracts, but insisted on 10 month contracts as they wanted to work more and make more. They wanted to take full advantage of their opportunity.

I asked whether it was easy or hard to get a job on the cruise ship, and they said, “not hard.” You just have to apply, and go through the training. “Always be positive”, they told me. Sounds pretty straightforward to me.

DON’T BE AFRAID Read more…

Despite taking 6 weeks off (30 days + weekends) last year, I’m having a difficult time repeating this feat this year.  Taking all my vacations is a new year’s resolution because it’s actually damn hard to do!  The guilt always washes over me like the monthly floods in Venice.  I recently took a two week cruise and now I want to take another week off just a month and a half later.  I can’t seem to pull the trigger.  Perhaps you’ve experienced the same paralysis?

Right about the 5th week of vacation time, colleagues and friends start guilting me.  A female friend who is having her third child in 5 years said, “Wow Sam, you really know how to maximize the system.  I need to do a better job of taking a vacation.”  I’m thinking, come on, did you really just say this after you’ve taken four weeks off already, and are going on a 3-month maternity leave for the third time in 5 years?  I’m all for a 3-month maternity leave, or even 6 months as they do in Europe, as someone has to give birth.  Just don’t make me feel bad for taking my allotted vacation time!

I asked my father whether I should take another week off before the end of the year to go visit him.  He said, “Sam, it sure seems like you are taking a lot of time off, and that you’re never there.”  How does he know if I’m never there since he isn’t there working with me?  That said, it doesn’t matter, because perceptions are important, and one should be careful not to err to far from center especially as we come to year-end.

UNDERSTANDING THE FEELING OF GUILT Read more…

The older I get, the more I realize how necessary it is for people first starting out to find a mentor.  A mentor is there to guide you through all the landmines in a career or start-up venture.  In fact, I encourage everyone to get a mentor with every serious endeavor they are about to undertake.

“You are special.  You deserve the world and can do anything.“  These words do more damage to young people than any insult.  If all you hear growing up is how special you are, you’re going to develop the biggest entitlement attitude ever!  You’re going to think you walk on water and your shit don’t stink.

Is there any wonder why the most typical complaint by the 99% protest movement is not getting a dream job after going tens of thousands of dollars in debt?  What is wrong with picking crops and making hamburgers? College graduates are told to go to school, don’t be afraid to take out massive debt because their lives will be great since they are so special.  As a result, they aren’t willing to put in the hours to get straight A’s, work unpaid internships every summer to gain experience, and develop technical skills beyond the classroom.  Being told they are special DOOMS them.

This is why growing up in a free and developed country like the United States is pretty easy, ironically.  If you don’t have the “I’m special” attitude, then you will never be delusional.  And since so many of your peers think they are special, they aren’t willing to put the extra time and effort into whatever they are doing.  Just realizing you are just another nobody will put you far ahead in this world.

In “How To Succeed The Dumb And Easy Way” on Untemplater.com, I try and knock some sense into folks who need a nice kick in the pants.  I love the stories and interviews there because it shows how people can live differently.  The Untemplaters make it look easy, but that’s what skilled people do.  Feel free to share your thoughts here or there!

Do you believe you’re special?

Photo: Hissing Stray Baby Cat, Venice, 2011.  Sam.  Can you guess the symbolism?

Best,

Sam

If you enjoyed this article, please sign up for my RSS Feed or E-mail Feed to keep in touch.

Peter and I were golfing buddies for years until one day he started asking me about my compensation.  I refused to tell him for weeks until he mentioned he was in a tough situation, negotiating a package with a potential new employer and sought my advice as someone several years his senior.

As I stood over my ball, ready to attempt a 30 foot birdie putt, Peter chimes up, “Sam, you’d really be doing me a favor by letting me know, so I can go back and counter them in case they are low balling me.“  Peter then proceeded to tell me what he was making at which point I felt forced to reveal my income because he was so upfront.  When I did, he quieted down, walked to the next hole and smacked his driver down the pipe.

“280 yards with only a sand wedge in!” I applauded after I missed my putt.  “Hmprh“, was the only sound that came out of his mouth as walked further and further away.

As weeks turned into months, I realized he no longer pinged me to play golf.  It also turns out that he never took the new job offer and remains at his company ’til this day.  Peter turned cold and I later found out that the reason why he never took the new job was because he countered them so high based on what he heard from me that they pulled the offer.  Peter blames me for not getting the job and not making the money he feels he deserves to make.  I have no control over what the potential suitor was willing to pay so why is it my fault?

NEVER REVEAL YOUR INCOME Read more…

You’re mistaken if you believe the 99% will just rage against the 1%.  They won’t stop until they protest against half of America, and then they will turn on themselves.  After reading all the “We Are The 53%” submissions, I was inspired to write my own. The 53% figure refers to the percentage of working Americans who pay for 100% of all federal taxes in our country. The 53% blog is a response to the “We Are The 99%” Occupy Everything movement, which also shares some moving posts about people who are having trouble getting ahead.  Unfortunately, there are also some incredibly misguided posts that put blame on others for their own mistakes.

The 99% movement doesn’t represent all 99% of us because the 99% isn’t one big pity party that we’re being made out to be.  Some of the reasons for protesting are down right embarrassing.  If you have student debt and can’t get a job, please protest your school’s career service office.  If you are against corporations, please don’t use an iPhone and then go charge it at McDonald’s.  If the damn insurance company is denying you benefits, protest right outside their corporate headquarters and at the homes of their execs!  There are thousands of first generation legal immigrants who come to the States, don’t speak English, and find a way to live a better life.  We at least have a head start with the English language!

The 99% movement might represent 10% of Americans who are fed-up and outraged by the super wealthy and our inept politicians and want to protest. For the rest of the 99%, we aren’t complaining.  Instead, we’re focusing on making ourselves better. We’re not depending on the wealthy or the government for anything.  We’re depending on our own initiatives to make things happen.  You do realize that we taxpayers made money bailing out the banks to the tune of $10 billion dollars right? Thanks Wall St!  We’re still waiting for GM to give us our money back.

Stop thinking about yourself and what the country and the government can do for you.  Start thinking about how you can add value to society and help someone before you help yourself.  Being selfish gets you nowhere because nobody will want to help you, especially if you are protesting the very people who donate to charity, provide students scholarships, help fund cures for cancer, and provide employment opportunities!

Here is my note. I hope you can share your own.

REPRESENTING THE 53% Read more…

It’s trendy to rage against the top 1% nowadays.  We’ve discussed how the world will go through further employment pain thanks to the decline in the stock markets, EuroZone debt crisis, US state-level budget problems, and political impotence.  Things are not pretty to say the least.

From my rental property article, you discover that the top 1% are a couple who met in law school at 25 and are now 28 year old 2nd year associates making $380,000 combined.  The top 1% is also the 28 year old Google software engineer from Caltech who brings in $450,000 a year and has $400,000 in savings.  The top 1% is the 35 year old cardiologist who is finally making over $300,000 a year after 11 years of post high school education and 3 years of residency work at $60,000 a year.  By the time he’s 45, he will probably make over $1 million dollars.

Where else can we find the top 1%?  Oh yeah, MBA grads who join Wall Street firms such as JP Morgan and Goldman Sachs at the standard $150,000 base salary and $30,000 sign-on bonus at age 29-30.  But, you knew this already since that’s who so many people are demonstrating against.  If they can last through the treacherous ups and downs of the markets, the multiple rounds of layoffs every year, the intense pressure of 60-80 hour work weeks, not to mention all the internal political landmines, they too will make over $380,000 a year by the time they are 35 year old second year Vice Presidents.

THE TOP 1%: COME OUT, COME OUT, WHEREVER YOU ARE Read more…

Let’s pretend we’re Founders of a new high tech company.  Competition is fierce, but we’ve raised money from some Venture Capitalists to pay for equipment, marketing, and personnel.

We are looking for hungry recent college graduates in engineering, marketing, and sales who are willing to work hard and accept a “below market” rate salary of $30,000.  In exchange, they will each  get $25,000 worth of options struck at $1/share with a three year vest.

We believe our company will grow by 50% a year for the next 5 years.  In other words, a new hire’s $25,000 worth of options will be worth $200,000 in five years, and if the company keeps growing by 50% for another 5 years, the options will be worth $1.45 million, 58X the original amount.  Finally, employees get options every single year they work at a discounted price, meaning one could potentially earn multiple millions of dollars in 10 years.

Of course, we also realize that execution is key because ideas are a dime a dozen.  All our stock and options could expire worthless if we don’t property execute.  People are what will make our company successful.  Because we aren’t paying the market rate of $60-70,000 for recent graduates + options, we don’t have the pick of the litter.  If only everyone believed in our company as much as we did, they would be lining up to work for us.

One of your favorite posts is, “How Much Do The Top Income Earners Make” which makes a statement that “the rich will always pay more than their fair share” as the top 1% earn 20% of all income but pay almost double their share of taxes at 38%.  38% is 18% more than 20% no matter how much you think the rich should pay.

You then come across this one recent graduate who is looking for a job.  She leaves this comment as a retort to the post.  Obviously she’s brighter than most because she reads personal finance sites and spends the time to comment.  She’s available for hire and is willing to relocate anywhere to get the job.  However, nobody has hired her, she may have a difficult time working more than 40 hours a week, and she didn’t go to a great school.  Do you go for it?  You’re in desperate need of people to build your company!

READY FOR WORK, HIRE ME Read more…