“Sam, I absolutely hate my company and hate my job.  I can’t wait for some sucker to give me a big package so I can blow this joint and retire early.” January 17, 2011.

These are the words of an acquaintance who hit the jackpot when an upstart company in his industry decided to give him a two-year guarantee for 50% more a year.  In the employer’s mind, they think they are getting an experienced person with a great attitude and a long term commitment of building their business for 5+ years.  In my acquaintance’s mind, he’s jumping ship because he sees the dollar signs and plans to retire as soon as his two-year contract is over.

HOODWINKING, SOFT LIES, & MISMATCHING MADE PERFECT

After 5-10 years of experience in whatever field you are in, there will inevitably be competing firms who will want to hire you away if you are a good performer.  If you are a super high performer you will always have opportunities thrown at you.  Your biggest problem is deciding when is the right time to leave for the bigger bucks.

The sad part about the scenario above is that I’ve known the hiring manager for over a decade and think he is a brilliant business builder.  Yet, even a brilliant man like him can get hoodwinked by a miserable guy with different intentions.  How does this happen?  Here’s how.

The dark pieces of you can sometimes shimmer.

Nobody is completely melancholy.  We all have things we get excited and happy about.  Those specific thoughts are what you have to concentrate on to pass a lie detector test.

Interviews are the only way for an employer to directly ascertain how you are as a person.  This is when you need to throw away all your disdain, and less than desirable attributes and start performing.  You are the lead actor in a play, and your goal is to make your audience love you.  Don’t underestimate the importance of “looking the part”.  They do play huge parts in making good impressions.

You must smile and say sweet words of kindness.  You must pretend your motivations are pure, and that you are there for the long term.  All your intentions seem real, because you are thinking about things that will potentially make you happy if you get this job – a lot of money, an early retirement, and sticking it to your old firm.

Important positions need to be carefully vetted because once someone enters your organization, it is brutally difficult to get them out thanks to employment protection laws.  As a result, you will go through multiple interviews over many months to make sure you are the right candidate.  You need to keep your game face on and replicate your happy enthusiasm consistently over and over again.  You must not break.

Even Ghengis Khan has allies.

The next vital step is having superb references.  Even if you are the most evil person on earth, you will at least have a handful of people who will sing your praise.  Identify those people and feed them to your perspective employer.  Give your references a heads up that you have done so and be extra kind to them for at least a month before the process.  Take them out for lunch and help out anyway you can.

Five references is generally enough.  A lot of employers stop at three, so if you give them more, you will look like a credible person.

Sugar-coated donuts are unhealthy, but everybody still loves them.

You’ll undoubtedly have some weaknesses which are less than desirable with your prospective employer.  No matter, because you are smiling and demonstrating your fantastic fake enthusiasm about the hiring company.  You have implanted sugar coated donuts into the hiring manager’s head that you will be the perfect candidate for the job.

The interview process is exactly the time where you can over-promise on what you can do.  You make them salivate like Pavlov’s dog.  The more you promise them, the more they will want to pay you.  Forget the sugar shaker, you bring out the industrial powder sugar machine that rains goodness 10 donuts at a time.  You know that once you are in, it’s too late.  You’ve got them by the balls because everything is in writing.

The more you think about waterfalls in a crowded place, the more you will need to pee.

People can’t help but follow the herd.  As soon as your prospective employer gets a whiff that someone else might be interested in hiring you, your stock will rocket to the top.  You need to create that anxiety even if it might not be entirely true.  It’s easy to say have been approached by a competing firm, but nothing has transpired yet.  Once your prospective employer hears that, they’ll start thinking about Niagara Falls baby!

NOW YOU KNOW WHY UNDERPERFORMERS SURVIVE

You must master your own presence.  Like an actor in a big Hollywood movie, you are able to turn on the charm once the cameras start rolling.  If you can do that, you will forever be employed because you’ll always be able to jump around.  By the time your employer realizes they’ve made a mistake, it won’t matter because you’ve got that fat contract, or you’re already moving on to your next employer!

Readers, any tricks you have for getting hired when you know you don’t deserve the position or have no intention of staying longer than your contract?  Why can’t employers see through bad hires more often?  Do you know of people who keep landing on their feet, even though they are less-than-optimal performers?

Regards,

Sam

One of my predictions for this year is that the job market will surprise on the upside.  With cashed up corporate balance sheets and a revival in demand, there is little doubt in my mind that unemployment levels will continue to improve.  Unfortunately, 2011 has proven to be a little more challenging than expected, with unemployment levels staying at above 9%.  This is why now more than ever, you need to get all your documents in order, starting with your resume.

It’s in the first half where ideally all hiring shall be done because: 1) The best available people are still available.  There is a bias against people looking in the 3rd and 4th quarter because rightly or wrongly, companies will be wondering what’s wrong with you for not having found something earlier;  2) Companies need to spend their budgets while they are still available.  There’s no time like the present; 3) Hiring an employee at the start of the year gets the most out of the employee, especially if there is a guaranteed compensation package.

Now that it’s the second half of the year, things will get even more challenging for job seekers.  I’ve seen over 3,000 resumes in my career and hopefully this article and subsequent articles linked within can help you out.

THE IMPORTANCE OF AN UPDATED RESUME

Just last week, I had breakfast with an old boss of mine who moved on to do different things last year.  What I thought was a friendly meet up turned out to be a soft sell on why I should join his firm.  “We should talk more next week Sam,” he concluded.  “I think you’ll be amazed at what we’re doing here.”  I proceeded to discuss my meeting with another old colleague of mine who then said, “Sam, actually we also have a 5 year runway to build something great.  You should send me your resume.”

“No problem“, I said.  Truth be told, my resume was one year old and needed some updating.  But, that’s OK, given the changes were quite minor as I’ve been with the same firm for awhile now.

It never hurts to keep employment dialogues open, even if you don’t currently plan on leaving your company.  It’s a courtesy to them, and you never know when someone wants to pay you big bucks for a guaranteed length of time to join their organization!  It’s generally I who evaluate resumes, so it was kind of exciting to update my own to send to someone else.

IMPORTANT RESUME TIPS TO KNOW

* The 7 Seconds Rule. The average amount of time a reviewer spends on your resume is 7 seconds and that’s it!  It’s partly because we have so many resumes to look at, and it’s partly because we’re lazy.  Make sure the top half of your resume pops and everything is clear.

* One Page Resume Or Bust. If you have a resume longer than one page, you just quadrupled your chances of having your resume crumpled and tossed in the bin.  More is much less in this situation.  Having a one page resume shows that you are concise, clear, and to the point.  Again, we only spend roughly 7 seconds on your resume, so don’t bore us with irrelevant details.  It’s all about what you’ve done lately, your education, and an interesting fact about you.  Anything more and we’ll ask you during the interview.

* Don’t Over Think Design. Unless you are a graphic designer looking for a job, there’s no need to over think the design of your one-pager.  Contact info, latest two or three jobs with responsibilities, education, and hobbies done.  Segment the page out in titles, use bullet points if you will, and make that one page as simple to read as possible.  We really don’t care about what type of font you are using, whether the paper has a thicker weave, and all the nitty gritty details of your latest project.  Like blogging, content is king!

* Don’t Hide Obvious Things. If you’ve never had a real job before or are still within 5 years out of undergrad, you better not hide your GPA.  Hiding your bad GPA is a 90% guarantee of getting your resume tossed because it shows that you think reviewers are stupid enough to not realize your grades are missing.  We’ll start thinking the worst, so don’t hide your GPA!  Don’t hide any of your contact details either.  That will surely piss off your reviewer if she wants to contact you.

* A Good Resume Is Standard, Nothing Special. A good or great resume doesn’t make the person.  You and your interview make the person.  A good resume should be standard, which means it’s all the important not to have a bad resume.  A bad resume obliterates your chances, and a good resume is the absolute minimum.  There is no one golden resume format.  It just has to be easy on the eyes.  From the examples below, you’ll see that all are acceptable resumes.

* Customize Your Resume As Much As Possible. Don’t use a generic resume for all your applications.  It’s important to highlight specific skills, attributes, and experiences you have that would be an asset to your new employer.

* Do The Not So Obvious. If you’ve sent out hundreds of resumes already, and aren’t getting any responses, do something different.  Put a picture of yourself up on the top right hand corner.  Change your resume color to a green back ground.  Make your objective statement a prediction on who will win the Super Bowl and why?  Then parlay that with a follow up interview if your prediction holds true.  If you aren’t getting any call backs, you have nothing to lose.  I guarantee you that if you do any one of the following things above, you will stand out and get the recruiter’s attention.

EXAMPLES OF GOOD RESUMES

I like how Adam states right up front his objectives and qualifications.  His resume is easy to read.  Unfortunately, there is no GPA, and his work experience isn’t much to write home about, depending on what job he’s looking for.  If he’s looking to apply as a restaurant manager, he looks like a perfect candidate.  Resume Rating: 8/10.

Edgar has a classically formatted resume which I like.  He must be just graduating from business school because he over emphasizes his education, and under emphasizes what makes Edgar the man.  We already know Edgar went to Darden b-school if I’m reading his resume, so putting his education at the very top is wasting valuable real estate.  Also, I know nothing about Edgar as a person, which doesn’t create any affinity.  Resume Rating: 7/10.
Pamela’s resume has almost everything I want to see.  I like how she highlights a “Profile” portion up top, lists her experience, and then her education and activities.  I would love to know more about what makes Pamela tick.  Also, I would consider removing her earliest work experience and expand a little more on her interests.   Resume Rating: 8.5/10.

CONCLUSION

A good resume is standard, which also means good resumes are everywhere.  If you have a badly formatted resume with glaring holes, your job seeking life is over.  You might as well become an entrepreneur or lifestyle design blogger instead, because nobody will be willing to give you a chance since you can’t even present yourself properly on one sheet of paper.  Beyond the basics of resume writing, it’s the content which really helps get you an interview and that job.  Now that you’ve digested everything, go read “The Art of The Interview” where I discuss some very important aspects to lock down that dream job.  Good luck!

Note: After more than a decade of looking at 50-100+ resumes every year and participating in the hiring of dozens of people, I really suggest you take this post’s advice to heart if you’re looking for a job.  Competition is fierce!

If you liked this post, sign up for my RSS feed or e-mail list and keep in touch.

Best,

Sam

Social Security Act FDR

The following is the second and last part of my interview with Charles Farrell, the author of “Your Money Ratios“.  We discuss the much maligned 401k, whether Social Security will survive, and crowd favorite, how raising personal income tax levels further will ruin America!

The 401K AND ALL ITS GLORY

Question: Why do you think there are so many detractors of the 401k plan? Furthermore, do you think it is fair that the pre-tax limit contribution is only $16,500 for some 22 as well as someone who is 45? Presumably, the average 45 year old is making much more than the average 22 year old, so how come the government doesn’t propose an increased pre-tax contribution scale the older one gets?

Answer: Many people don’t like 401(k) plans because they believe the burden of funding retirements should fall on employers and not employees; thus they would like to see us go back to defined benefit plans that are funded by employers. Well, that is just not going to happen. Employers have no appetite for guaranteeing to pay their workers for 30 or 40 years after they stop working for them. And DB plans are not flexible enough to accommodate a globally competitive marketplace, plus they discriminate against individuals who change jobs or careers. Moreover, many DB plans (particularly government plans) are significantly underfunded and many who thought they had guaranteed retirements may be unpleasantly surprised at some point. So I think the “romance” with DB plans is misguided, but many people would like to see those types of plans again. I just don’t think it’s going to happen.

Then there is another set of individuals who don’t like 401(k) plans because of the limited investment choices and sometimes high expense structure of the plans. I agree with people on this front, and there are problems with some 401(k) providers, particularly those smaller plans that can’t drive better deals on their investment platforms.

But, most plans do offer competitive options and are low cost. It’s important for readers not to lose sight of the primary reason to use a 401(k) plan, which is the huge tax benefit provided to those who contribute; and if you get a match, that is just makes it more attractive. The tax deduction, the match and the tax deferral on growth are incredibly valuable tools to help build your capital. So even with some restrictions, the plans are basically the best place to build your retirement assets.

Regulators Are The Problem! (401K Con’t)

Now, the 401(k) plan itself is not the problem. 401(k) is just a reference to the tax code section that allows for pre-tax deferrals, which is a great idea and a great tax benefit. It’s the regulations and the heavy costs of ERISA that create the challenges. At some point, we may see the ERISA issues relaxed and allow for more open plans. Some big plans already are very flexible and allow employees to open their own brokerage accounts within the 401(k), but unfortunately many aren’t. As technology improves, I expect we will see more flexibility on the investment side.

I wrote an article on the prospects of eliminating or reducing the ERISA burden for Investment News last October that your readers might appreciate.

If you happen to work for a large employer, ask about a self directed brokerage option; you may have one and not even know it; or you might be able to get your other co-workers to help push for that option.

Plus, as mentioned in the book, a lot of this could be addressed by increasing the IRA limits to equal the 401(k) limits and then let employees choose how they want to save. If you like your employer plan, then use it. If not, use your own IRA with the same deduction limits.

With respect to the tax deduction, there is one limit for those under age 50, which is $16,500, and another limit for those 50 and over, which is $22,000. I personally don’t think it’s fair to have a disparity in contribution limits based on age. Everyone should get the same tax benefit opportunity, which at this time means everyone should be able to do $22,000 if they desire.

SOCIAL SECURITY

Question: Social Security’s existence is something you vigorously defend in your book. You highlight that even if nothing is done, people retiring 30-40 years from now will still receive at least 70% of their benefits. You also discuss how you are afraid that the government will over-shift the burden of social security onto those who need it the least. Why do you think the government doesn’t do a better job in aligning the costs of the program with the users?

Answer: Social Security is one of the most successful programs because it is pretty simple. We take in money as a contribution from wages and we pay out money to retirees. It is a good hedge because the assets are not invested in the markets and it’s not a bad idea to have a portion of your income guaranteed by a government pension that you paid for. Having a basic social security benefit actually allows you to take a little more risk with some of your other money.

The problem comes when you pay out more than what people contributed, which is what is happening. The reason this happens is because of a flaw in the structure of social security. It was structured as a social welfare program, not a personal property or ownership plan. Thus, Congress can change the rules whenever they want. And it is easy to grant benefits to get votes especially if you don’t require people to contribute more to fund those benefits. I mean who wouldn’t want a bigger retirement benefit without having to pay for it?

That is what needs to change. We each need a property right in our contributions, meaning it’s our money and in general our payment is based on what we put into the plan. This is critically important to ensuring its long term viability. People get frustrated when they pay in and then don’t receive a fair deal on the payout.

Readers should fight for a property right because they are contributing a huge amount of their pay into Social Security. It is about 12.4% of everything you make up to about $107,000 (you pay half and your employer pays half; or if you’re self employed you pay the full 12.4%). Then readers must save another 12% to 15% in their own plans, which takes us to a savings rate above 25% of pay which is more than sufficient to ensure a secure retirement. But if that 12.4% that goes into Social Security is primarily granted to someone else, then you’ve got a big problem.

The funding issues can be easily fixed at this time if voters insist on electing political leaders who promote a property right to Social Security. Politicians won’t do the right thing until they are convinced that voters want it, so let them know that’s what you want.

INCOME TAXES

Question: Taxes are set to go up for “the rich” who make $200,000 or more in 2011. How high do you think the marginal federal tax rate can go before Capitalism stops working? We’re strong proponents of a flat tax system on individuals above the poverty line given as a percentage of income as well as the absolute dollar amount of taxes paid is completely equal. What are your thoughts on the flat tax, and why people argue against its fairness?

Answer: I am also for a flat tax system for most taxpayers. To me, it makes the most sense. Far too much of our productive brain power and resources are going toward tax management and it’s quite honestly a waste of energy. The only reason we have to do it is because the tax code has become so complicated. I used to be a tax attorney, so I know this area pretty well. But the reason it is complicated is because so many taxpayers lobby for exemptions and want special treatment. They don’t want to compete on a level playing field. And since tax benefits are one of the main ways legislators can reward voters, we have a 10,000 page tax code that is basically incomprehensible.

As far as rates getting too high, we have been through multiple high and low tax cycles. So if rates rise too high, they will reduce economic growth and in the end hurt the average American, at which point people will eventually vote in leaders who want to reduce taxes. The key is to try to reduce your tax rate as much as possible during the high tax cycles by using every tax planning tool that applies to your situation.

As far as the actual tax rate, if you raise individual rates (combined federal and state) up into the 40% range, then I think it will have a detrimental effect on the economy. We are there in many states in the U.S., and I think it will hurt those states.

Readers, would love to hear your thoughts on whether you think Social Security will really be around in 30 years.

Do you think maxing out your 401K alone is enough to retire comfortably on, especially if you believe there’s no SS in your future?  Is $16,500/yr max + any matching really enough to retire on?

Finally, if a smart fella like Charles believes in the flat tax, why don’t you?

Keiju,

Sam @ Financial Samurai – “Slicing Through Money’s Mysteries”

Follow on Twitter @FinancialSamura and subscribe to our RSS or E-mail feed.

Charles Farrell

As I wrote in my review of “Your Money Ratios”, Charles’ book sings to me. Charles has the ability to simplify complicated financial topics for the average reader to understand. His book is seriously one of the best books I’ve read on personal finance in a long while.

One of the keys to progress is learning from experts in their various fields.  Charles is gracious enough to answer some follow up questions I’ve been burning to ask after reading his book.  This will be a two part post due to the 2,800 word length of the interview.  In part I, we discover Charles’ motivation for writing his book, strategies for early retirement, and his conservative and debatable 50%/50% investment split between stocks and bonds.  In part II, we discuss the much maligned 401K, personal income taxes, why Social Security will survive, and why the flat tax is the right way to go!  Please enjoy!

WRITING “YOUR MONEY RATIOS”

Question: Was there a particular lightning bolt reason why you decided to write this book? For aspiring authors, what suggestions do you have to get your worked published in this ultra competitive field of business?

Answer: I wanted to write a book that would help average readers understand the most fundamental and critical relationships among one’s income, capital and debt, and how those things must be managed throughout your working career to build financial independence. So I took what are often quite complicated topics and figured out a way to present them in a very simple format that anyone can follow. I would like more people to enjoy the benefits of financial independence, and I hope this book does that.

As far as writing, all I can say is write about what you believe in. Hopefully, if you believe in it strongly enough, you’ll develop some expertise and then seek out ways to spread your ideas. Try to develop some niche that is reflective of your expertise. So I developed the ratios and they came out of my background in tax, finance and also working with individuals.

Think about what you do that is a little different and try to focus on that unique nature of what you do. It is a tough slog because the field is very crowded and often the least valuable information gets the most press. But you have to accept that reality and still push ahead. And then you need a little luck. Your message has to somehow get into the hands of people who appreciate and understand it. And that is hard to predict, which means you need a little luck to get it out there. So if you are going to pursue that path, I think you need to accept those realities of the marketplace.

EARLY RETIREMENT

Question: There seems to be a big movement among the Gen Y crowd to “retire” earlier, rather than the traditional age of 60-65. For those who wish to retire by 45, what would you suggest their Capital To Income Ratio target be, as well as thoughts on getting into mortgage debt?

Answer: Retiring early is a great goal, and if you want to do so, here are some things to consider: Because you won’t qualify for a social security benefit at that age (and won’t accrue the maximum benefit as you are not working through age 65) and you won’t have medical coverage through medicare, you would need to bump up your CI Ratio to at least 16, which at a 5% distribution gets you to 80% income replacement at that age. But the math on those numbers is pretty tough. In your mid 40s, you’ve probably only been working for 20 years or so. Thus, it would be difficult to accumulate savings of 16 times pay after only 20 years of work once you factor in taxes. But if you have some sort of windfall event, like selling a business, getting fortunate with stock options, or an inheritance, then that would help.

Also, with respect to a mortgage, once you want to live off the returns on your financial assets (retire), you really need to be debt free. I can’t stress how important that is. Thus, by the time you stop working, you want to be out of debt. But, that doesn’t mean you should be a renter, because if you rent you are paying a “deemed” mortgage, meaning the mortgage of your landlord, and your rent will continue to go up year after year, so you never have a rent free place to live. Thus, if you want to retire early, you may need a mortgage to buy your house and then you need to work hard to get it paid off by your early retirement date.

Question: I have a fear that once I get to retirement, I’ll ask myself “Now what?” and “Is this all there is?” In other words, I’m fearful that retirement isn’t as fun as the journey to retirement. What are your thoughts, and are these fears irrational?

Answer. I think you are correct to be concerned about “now what.” You have to think of retirement as another phase of your life; one where the returns on your capital give you freedom to do things that maybe you couldn’t do when you didn’t have financial independence. Think about what you enjoy doing and who you enjoy working with or spending time with, and allow the returns on your capital to facilitate more of that lifestyle.

Question: Do you think some people choose to not really care about their retirement? Perhaps those who retire with nothing are actually the luckiest people on earth? They were able to live life to the fullest for 40 years after college, and spend everything they earned. Using an extreme example, Bernie Madoff lived a life way beyond his wildest dreams. At 75 years old, an in prison, who really wins? Some would argue Bernie.

Answer: Yes, I think there are many people who just simply don’t want to plan. Some will get lucky and may do alright even if they don’t plan, just like somebody wins the lottery every week. But most who do not plan will experience lots of economic hardship as they age. And you just have to ask whether you want to run that risk.

INVESTMENTS

Question: You suggest keeping a fixed Investment Ratio of 50% stocks, 50% bonds from ages 25-59, and to 40% stocks and 60% bonds ages 60 and beyond. A number of readers, myself included wonder whether this is too conservative? Would your advice have changed if you wrote the book before the crash of 2008-2009?

Answer: I have always been a big advocate of balanced investing, meaning a split of your money between diversified stocks and very high quality fixed income holdings. I wrote the book before the recent market declines, it’s just that it takes awhile to get things published. The 2008 to 2009 decline just helped emphasize my point. So I have always pushed investors to adopt this approach.

Think about it this way, when you invest in stocks, your return is uncertain. There are no guarantees and past performance is not indicative of future returns (you’ve seen that warning before). And there are periods in modern markets where returns are negative for 20 or more years, Japan for example. So you can’t ignore that possibility. Now couple that with the fact that you will only live one historical cycle in the markets.

If you get stuck in a bad cycle, you may end up saving for 30 years and not have much to show for it. So I like to have a plan B, which is the interest return you get from fixed income investing. I lay this out in the book and go through the theory of why I think it’s important to have a plan B. And the amount in fixed income needs to be sufficient enough to make a difference, and 50% is, which is why I suggest people consider that type of allocation.

Basically, the interest payments from bonds serve to balance out the uncertainty of investing in stocks. And I think you need to build a base in high quality fixed income to allow you to invest and take the risk in equities.

But of course, every person needs to decide for him or herself how much risk they want to take. My feeling is that investors have been warned multiple times about the potential longer term risks of investing in stocks, and if they choose to ignore the warning, then they do so at their own peril.

Readers, feel free to share your thoughts on whether you think a 50/50 bond/stock split is appropriate throughout your investing life.  Don’t bonds look quite bubblicious right now?

Why does there seem to be a movement to retire early?  How feasible do you think it is to get a Capital to Income ratio of 16X?  Note: The CI ratio is simply the the amount of liquid assets you have to survive off of, divided by your average lifetime yearly income.

Stay tuned for part II where we can really sling some mud!

Keiju,

Sam @ Financial Samurai – “Slicing Through Money’s Mysteries”

Follow on Twitter @FinancialSamura and subscribe to our RSS or E-mail feed.

Friday’s post entitled, “The People Asked To Get ROCKED And A Boulder Fell On Their Heads” wasn’t supposed to go up.  I’m trying to limit the amount of big government love related posts, but “every time I try and get out, they pull me back in”!  Let the record show that I’m not against Democrats, I’m just disappointed in the system.  I do apologize to readers for the John Edwards of the world though.  At least politicians make life a little less boring.

The Samurai Fund is down 2.7% YTD, which compares favorably to the S&P 500 down 3.7% YTD.  Still, losing money is disappointing and I wonder if we have to change our outlook and investments given the anti-capitalism rhetoric by the government.  Should we raise cash?  Sell some of the winners?  Need some thoughts from the contributors and readers in general who have investments in the markets.

Perhaps now is the best time to open up the fund to 2 or 3 new entrants given the declines.  I will need help from someone to do a screen shot each week, because my 12″ monitor on my rocking 5 year old iBook G4 can only fit 17 entries!

The Freedom Fund continues to chug along slowly, with a $2,000 increase for January.  Nothing special, just savings from cash flow.

VIDEOS AND POSTS OF THE WEEK

* Conan’s speech was very moving and tells us never to be cynical, take care of the people who brought you here, and appreciate what you have.

* “Blogging For Money” on Monevator is an older post that captures a very cynical view on making money on-line.  It’s a good wake up call for all of us, but don’t let the pessimism get you down.  Join and succeed in Samurai’s Alexa Challenge, and you will flourish.

* “Your Mind And Your Money” is a series of posts by Roger, The Amateur Financier.  Really good effort to discuss the mental aspects of finance Roger.

* David over at Money Ning highlights a video about what to do just in case your gas accelerator gets stuck in response to Toyota’s (-8.5% YTD) massive recall.  Unfortunately, The Samurai Fund is a shareholder.  Key points: Don’t panic, press your brakes hard, put in neutral, turn off the car.

* “Make Money Freelance Writing” is a guest post on PT Money by Debbie Dragon (yes, real name).  The money making potential is impressive, as well as the revelation that there is a blogger out there who bought 600 articles to put on his/her blog!

* “The Samurai Alexa Challenge” on Sweating The Big Stuff is a great initiative by Daniel-san to aggregate the participants from the original post.  Daniel-san will  hopefully add some new tweaks, because the competition is not between us, but a challenge for ourselves.  The goal is for us to collaborate and help each other out.  Anybody who would like to join the challenge, please say so in the original post with your rank and send Daniel-san an e-mail.

Keiju (Regards),

Sam @ Financial Samurai – “Slicing Through Money’s Mysteries”

Follow on Twitter @FinancialSamura and subscribe to our RSS or E-mail feed.

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A Brazen Breed of Gin

I’m pleased to highlight a new series of articles focused on understanding the thoughts of successful entrepreneurs.   For our inaugural series, entitled, “The Samurai Mask,” I speak with the CEO and Founder of BULLDOG Gin, Mr. Anshuman Vohra, 31.  “Shu” was once a JP Morgan Banker who gave up his lucrative career to start BULLDOG Gin three years ago.  I was very inspired after watching his story about overcoming rejection on Donny Deutsche’s “The Big Idea” and I’m pleased he’s here with us today.  This is his story about finding entrepreneurial success, and going against the odds.

INTRODUCTION

FS: Shu, thanks for taking the time to speak.  First of all, tell us about Bulldog Gin, and why it is such a hot product?

Shu: It’s good to speak to you and it’s an honor to be the inaugural interviewee for your new series.  BULLDOG Gin is a quadruple distilled, ultra premium gin with dragon eye and other distinctive botanicals.  This is not your old folks gin, but a younger, brazen breed of  gin that you can imagine Steve McQueen and James Bond drinking.

FS: Sounds pretty rock and rolling to me!  I’m sure many readers will wonder how you could give up a lucrative job to join a startup.  How did it all come about?

Shu: I was looking to leave the banking industry for a while.  After several years on Wall St. I found it wasn’t really for me.  A former colleague of mine brought up the idea of creating a hip new gin – taking a page from the playbook of brands like Grey Goose and Ketel One – this immediately peaked my interest.  Vodka is a saturated market, but gin is ready for a revolution!

However I didn’t take the plunge until the 11th hour.  All conditions for success were right, namely that we had raised a first round of financing,  got our distributor and done all the necessary production development work.  I think it’s very important to hold on to your current job, while exploring different avenues and then make the switch when the time is right.

My income now is a fraction of what I made at JP Morgan, but that’s just short-term thinking.  For me it’s about building a product from nothing, and watching it grow into something recognizable and consumable.  I believe that if I’m successful in doing that, monetary gain will follow.

FS: What is the culture like at BULLDOG Gin and how important is company culture to you?

Shu: Culture is very important.  Unnecessarily bureaucracy permeates in 100K+ organizations.  I want to offer the most fun work environment with no unnecessary hierarchy, and an organization of responsible professionals all working towards making BULLDOG a success.

MOTIVATION & DIFFICULTIES

FS: What are your Top 3 motivations for success?

Shu: 1) Creating something that’s tangible and lasting of value to people everyday, 2) Fulfillment and 3) Freedom from “”The Man.”

FS: What’s the most difficult part about running your start up?

Shu: Going from a big corporation to a start up is not easy.  I didn’t realize how much administrative work goes into running your own company.  Big corporations have a very uniform atmosphere where there’s established process. and protocols  Not only did I have to market my company, I was in charge of supply chain and at the same time, I had to figure out how to do payroll taxes and by the tech help desk!  Furthermore, I am the HR manager, which is definitely a full time job by itself!  I run into Murphy’s Law daily, where whatever can go wrong, will go wrong!  It’s important to just roll with the punches.

FS: During the downturn, how did you cope?  What was going on in your heads 12 months ago?

Shu: Frankly, I was very nervous and immediately cut some overhead expense as well as focused on raw material cost cutting.  Thankfully, liquor is more recession resistant that most other products given people tend to drink when they’re merry as well as when they are sad.  During the downturn, we just continued to focus on stuff we had control over, and things we do right.  Sentiment has definitely improved since 1Q09, and we are entering the peak holiday season for spirits.  We do 65% of our business in 2H.  Despite the downturn, volumes are up 70% to date.

FS: You’ve been interviewed by The Wall Street Journal and countless other high profile publications in the past.  What is something big media didn’t ask you, that you wished they did.

Shu: Yes, we have a good publicist that gets us great press.  Clearly we’ve hit a new high with Financial Samurai!

The other publications focus on the glory of being an entrepreneur rather than the day to day complexities involved in running a business.  I certainly understand why they did so, and in the interest of full disclosure, a large part of my mental capacity is visualizing the “glory.”

Nobody ever asked me about the strains involved in getting things up and running.  It’s brutally difficult to raise capital when you’re a first time entrepreneur with just an idea on paper without anything tangible to go by.  Anything that will go wrong does go wrong. So, it’s important to be a wall and let the hardship bounce off of you.

But, I tell you, it’s hard.  You’ve got to be relentless and resolutely focused with keeping your eye on the prize every moment.  I get up everyday with the end goal in mind, and that is for BULLDOG Gin to be as big as it can be.  (By the way, look out for Bulldog Gin in the Financial Times this month!)

TAKEWAYS FROM STARTING YOUR OWN COMPANY

FS: What is the one thing you’ve learned from being an entrepreneur that you can share with us?

Shu: The greatest idea in the world is nothing unless there’s proper execution.  If you build it, they will come is NOT a viable strategy for success. You’ve got to really get your name out there and invest in advertising and sales.  Look at Coca Cola - one of the most recognizable brands on the planet – they don’t just rest on their laurels, rather the still spend billions a year on advertising.  There’s constantly an endless supply of work that needs to get done with never enough time to relax.  The “highs” of the business as an entrepreneur are much higher, and the “lows” are much lower and lonelier.  That said, I’d take the entrepreneurial equation any day.

FS: What is something nobody will ever tell you about running a start up?

Shu: Nobody in the world will believe in you and your product more than yourself.  So you have to set a vision for the company and everything should start with that.  I take everything associated with the business incredibly personally and therefore have a very long memory of critics who tried to impede my progress.

THE FUTURE

FS: Where do you see BULLDOG Gin 3 yrs from now?

Shu: We are currently concentrated in the northeastern US , and have an international presence in Spain and the UK.  We hope to expand further in the US, especially in the Northern California market, and make BULLDOG Gin as big as it can be.  Much like personal finance, it’s important for us to expand strategically, and not overspend too early.

FS: Here’s a curve ball, would you ever have imagined you’d make Gotham Magazine’s Top 100 Bachelors next to the likes of Leonardo Di Caprio, Bradley Cooper, Edward Norton, and Robert Pattinson from Twilight?  That’s like hitting the love jackpot!

Vinnie Chase

Shu: Ha!  I never would have thought in my wildest dreams I would be on the same page as my idol, Adrian Grenier aka Vinnie Chase from Entourage!  I still can’t believe I got on the list!  I’m grateful for it, and to the extent it helps BULLDOG Gin, that is the most important thing.

FS: Hypothetically speaking, if JP Morgan came back and offered you $5 million a year for two years, would you take it?

Shu: I wouldn’t even think about it.  Well, maybe for a nanosecond, but that’s it.  This is not a knock on JP Morgan as Jamie Dimon has done a fine job and I really enjoyed my time there.  For me, fulfillment lies not in creating large paychecks, but in creating something and working on something I can truly call my own.  Money is certainly a key motivator, but I see it more as a byproduct of success.

FS: If Diageo or Constellation Brands buys you out for $500 million one day, what would you do?

Shu: To be honest I’ve never thought about that question.  I’m not a very materialistic person, so my answer may disappoint some people.

Hmmm… I might go to Disney World, and I’ve always wanted to live in the South of France and chill out on the beach there for 6 months while brushing up on my French.  I think it would be an enjoyable respite after all these years of working 100 hours a week!  I’d probably come back and finally find myself a decent apartment in Manhattan, compared to my extremely humble spot in the East village.  Ok, maybe I’d like to kick it with the boys for a bit.

FS: Thanks for your time Shu, and I wish you all the success!

Shu: Absolutely.  Thanks for the opportunity to be interviewed, as well as your support of BULLDOG Gin!

CONTACT

For more info, please feel free to contact Shu Vohra by visiting his site at BULLDOG Gin.  You can also find Bulldog on Twitter @BULLDOGGin and join the legions of fans on Facebook.

BULLDOG Gin on CNBC’s The Big Idea with Donny Deutsche

Any entrepreneurs out there who would also like to share their story with us?  Please feel free to drop us an e-mail!

Keigu,

Financial Samurai – “Slicing Through Money’s Mysteries”

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