Hear that?  That is the sound of another self righteous employed person complaining about the unemployed sucking up resources and driving the government deficit further into the red.  Who cares employed people??  You guys aren’t the ones who are struggling to find a job in this economy!

There are several tautologies here:

1) Few can live a comfortable lifestyle off of unemployment benefits which average $200-3oo a week

2) The vast majority of people who are unemployed want to make more money, find jobs, and do something meaningful with their lives.

3) Our budget is headed towards a $1.4 trillion+ deficit, so who cares if we’re going to spend another $50 billion to help millions of unemployed people survive for up to 99 weeks?

THE BUDGET DEFICIT DOES NOT MATTER WHEN YOU HAVE NO JOB

The big debate over the Republicans and Democrats on the latest unemployment benefit extension is how the government will pay for the bill?  The Democrats say don’t worry, it’ll come from somewhere while the Republicans say cut spending elsewhere to not add to the deficit.  Whatever the case may be, the budget deficit doesn’t matter if you’re struggling to survive, and at the margin are going to cost the economy an even bigger burden?  We’ll have to provide for shelters and more public safety officers when crime creeps higher as desperation kicks in.

The ramifications of a budget deficit are only theoretical.  People say the government will need to raise interest rates to attract foreigner capital to fund our greedy spending.  With higher rates by government, a crowding out effect occurs where efficient capital doesn’t get directed to the private sector.  Meanwhile, borrowing costs for citizens increase, also choking off investments.  Last I checked, the 10-year yield is close to 3%, and foreigners are happily funding us.  Meanwhile, plenty of people are smartly refinancing their mortgages and saving money.

People say budget deficits are also bad for our children.  How can we live with ourselves knowing that our children are the ones who are going to fund our bad spending habits?  We live with it just like we live with the fact that the older generation will happily collect their social security checks, while the younger generation continues to pay without expectations of anything in return!

Once again, all this budget deficit talk is just theoretical nonsense that carries very little weight in determining whether or not we should help our fellow needy citizens or not.

THE ONLY WEIGHT ON THE EMPLOYED

A portion of our paychecks are paid for by the employer.  This expense (unemployment insurance) is effectively calculated into a working person’s total compensation.  If the unemployment insurance expense is 6% per anum, one can assume that if an employer didn’t have to pay this expense due to 0% unemployment, perhaps a couple percent of the 6% may lead to a higher paycheck.

So here is the thing for those who argue it’s a bad thing to spend another $50 billion bucks extending unemployment benefits.  Would you rather have the Federal Government pay or pass a bill to increase the unemployment insurance paid by employers by another several percent?  If you choose the latter, prepare for MORE layoffs.

CONCLUSION

It continues to perplex me how vocal some employed people are about not helping the unemployed.  Unless you’ve been unemployed yourself, you have no idea what you’re talking about!  When you’re unemployed for an extended period of time you start doubting your self worth.  You ask yourself what’s the point of life if nobody is willing to give you a chance.  You give up looking because you can’t bare another non returned phone call or e-mail.  Each rejection is like a blade jabbed and then turned in the soul.

As I come to the end of this article, I realize why so many employed people are so smug about the unemployed.  The reason is they are very unhappy with their jobs.  They can’t stand the fact that someone is getting $1,200 a month to “do nothing” while they have to work 40 hours at their miserable jobs to only earn $3,500.  Miserable people like to make other people miserable.  The next time you see someone irrational complaining why helping others is a bad idea, just know that they are going through their own torment.

UPDATE 7/27/10: The more I think about it, the more I believe the reason why people are so smug is because they are insecure with their own jobs and angry about their current situation.  The smug take their contempt out on the unemployed to make themselves feel superior.  If you were happy with your job and made millions of dollars, don’t you think you’d be more supportive of trying to help your brothers and sisters out?  I think so!

Readers, why do you think there are so many people against helping the unemployed through federal funding?

Do you have a better idea for helping lower unemployment?

If you are a smug employed person, please share with us your reasoning why you are against the extension.

Regards,

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

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

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Bloomberg highlighted an interesting chart stating that for the first time ever, working seniors outnumber teens in the labor force.  Currently 6.6 million people over the age of 65 are working or are looking for work compared to 5.9 million 16 to 19-year-olds.  Back in 1948, the numbers were only 2.9 million people over age 65 and 4.4 million teens, respectively.

This chart has enormous implications for the American workforce as people live longer and longer.  Let’s go into the reasons why there’s been a decline in teenage workers and such a rapid increase in older workers shall we?

TREND ANALYSIS

1) Longer Lifespan. A longer life ironically means more years you need to take care of yourself financially.  Can you imagine if you lived until age 1,000 how many years you’d have to work to save money?  Maybe a couple hundred years!

2) Information Dissemination. The Internet has allowed people to find more jobs more efficiently.  There’s always been a problem with matching skill sets with company needs.  As a result, seniors have found jobs where they would otherwise have never had the opportunity.

3) Boredom. Let’s face it, playing golf all day and lounging by the beach gets boring after a certain amount of time.  Retirement really isn’t what it’s cut out to be, otherwise you’d see a DECLINE in the number of 65 and older workers instead of a rapid increase.

4) Quality Of Worker. If you are an employer, wouldn’t you rather hire a clear-headed person with 40 years of experience than someone with practically none?  The choice is easy and teenagers are unfortunately being crowded out.

5) Too Many Distractions. It must be exciting growing up as a teenager nowadays.  The amount of gadgetry and things to distract are astounding!  There seems to be the idea that anybody can get rich quick online, so nobody wants to make just $8 an hour bagging groceries anymore.  It is interesting to see the media perpetuate the stereotype that Gen Y is a bunch of lazy, I want it now folks.  Maybe the data serves as evidence.

KEY QUESTION: Is it fair that younger workers are being crowded out by older workers?

It’s clear there is a US unemployment issue and much of the world frankly.  As more seniors re-enter or stay longer in the work force, the question becomes is this right for those who are just starting off?  On the one hand, teenagers will argue that senior people have had their chance in the work force already.  40 years is a long enough time to be working, and if they are taking entry level jobs traditionally allocated to teenagers, that’s just wrong.

On the other hand, senior folks can argue that if their kids actually took care of them in their old age, they wouldn’t have to work!  But then, the counter argument would be that they should have found ways to take care of themselves after 40 years of work.  So it seems as if everything is rational from a financial point of view.  Both sides are at “fault.”

Hence, the real reason for the rapid increase in older workers and a commensurate decline in younger workers is simply desire.  Teenagers have less desire to work because the world owes them something, and older workers have a greater desire to work because they are bored out of their minds!  Hence, the crossover is actually a market driven phenomena that is completely rational.

Readers, what are your thoughts about the crossover?

Why do you think there’s been a surge in older workers and a decline in younger workers over the past 20 years?

Should older workers stop working and give younger workers a chance since they had theirs already?

Regards,

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

Follow on Twitter @FinancialSamura and subscribe to our RSS feed.

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One of the most anticipated NBA free-agent announcements came when Lebron told the world he’s heading to South Beach to play for the Miami Heat.  Of the six teams coveting him, really only three stood a chance: Miami, Cleveland, and New York City for obvious reasons.  The other three teams: Chicago, LAC, and New Jersey will just be footnotes and forgotten.

What’s most interesting is not Lebron’s decision to make millions of dollars less to join two guys he thinks he can win championships with.  Instead, Lebron’s decision to completely spurn President Obama is what really gets me thinking!  No less than seven times has President Obama made a public statement insisting that Lebron join the Chicago Bulls. As you know, Obama was the Senator of Illinois before he became President.  Many pundits also believe that Chicago is a better candidate for Lebron to win championships with Carlos Boozer, Luol Deng, Derrick Rose, Brad Miller, and Joakim Noah.  But, nope.  Not Lebron.

If Lebron James, who is a huge Obama fan, doesn’t even listen to Obama’s words, why should the general public?  It wasn’t like Obama was saying go to the Minnesota Timberwolves where they have a snowball’s chance in hell of winning.  Chicago is a seriously legitimate team if not the best choice!

FIVE REASONS WHY LEBRON DOESN’T LISTEN TO PRESIDENT OBAMA

* Relationships are most important. Lebron, Dwayne, and Chris created an amazing relationship after winning gold metals in the Beijing Olympics.  Their friendship transcends money, which jives well with the theory that money can’t bring happiness but friends can.

* Location matters. Let’s face it.  Chicago is a crappy place to live 6 months of the year.  Why on Earth would Lebron decide to move from crappy weather Cleveland to crappy weather Chicago?  He might as well stay in Cleveland!  Ever wonder why it wouldn’t be easier to get Dwayne Wade and Chris Bosh to go to Cleveland?  It’s because Cleveland is a hard place to live unless you have family there.  If you’re going to make a move, you might as well go all out and either move to Miami or LA because we all know that weather in NYC and NJ is horrendous as well.

* Charity is a good thing. At the end of the interview with ESPN, Lebron announced he is donating all proceeds raised from the “The Decision” to the Boys & Girls Club he’s so intricately involved in.  With President Obama limiting the tax break for charity deduction to 28%, that penalizes those in the higher income tax brackets who are the onse who make up the majority of this country’s donations!  The clear repercussion of this proposed legislation is that giving will decline by billions at the margin.

* Just say NO to discrimination. With President Obama allowing for an even higher progressive tax system, he is saying it is OK to discriminate against people based on their income.  If you worked hard and spent an extra 8 years of your life after college to become a physician and make $500,000, the Democrats believe it’s OK to tax you 39.6%.  Meanwhile, if you decide to goof off in school, not study and make $25,000 a year for the rest of your life, you are rewarded by only paying 15% in Federal income tax.

* Lower taxes is the result of fiscal prudence. Although Lebron has to pay 39.6% on his mega millions a year, he won’t have to pay state tax, which is a 10% savings compared to playing in California or New York, and a 6% savings compared to staying in Cleveland.  If you make conservatively $50 million a year after endorsements, you’re saving $5 million in state taxes a year!

CONCLUSION

It’s been a year and a half since President Obama came to office and some people are getting tired of rhetoric.  We’ve had a great recovery in the financial markets, but our employment outlook still looks murky.  We are spending record amounts of money on government programs, yet the government tells other people to practice financial austerity.  Federal government employees are raking it in with recession proof jobs and rising wages.  Lebron has lost faith in the President and his ability to help out the Midwest and his home state of Ohio.  As a result, he no longer listens, so why are you?

Readers, has anybody else lost faith in our President and his promises?

For basketball fans, did Lebron make the right choice going to Miami?

Why do you still not play or follow sports when America is a nation of sports enthusiasts?

** Very few people can claim to have worked in one job for 7 consecutive years right out of school.  So before you go bashing Lebron for his decision, like Cleveland Owner Dan Gilbert who just lost hundreds of millions in franchise value, take a look at your own track record.

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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The following is a guest post by Hime, one of Financial Samurai’s first readers.  Hime is a manager at a strategy consultant firm who likes the violin and going on unplanned adventures.  Hope you enjoy!

All right everyone, how many times have you read an email and said to yourself “I don’t feel like replying now I’ll just do it later” only to have that email disappear into the deep abyss and completely forget that you left the sender hanging?

Come on, I know you’ve done that at least once.  If you do that more like every third email – CLUNK!  That is me hitting you over the head with an oversized rubber hammer as I resist the urge to shake the stubbornness out of you.  Think I’m overreacting?  Maybe a little but I am trying to save your career and relationships so please pay attention!

DON’T LEARN THE HARD WAY

I’m generally fast and consistent about replying to emails right away (24 hours at the latest), especially to friends, family, clients, and the coworkers that I like…whoops I mean all my coworkers.  However one time last year I goofed up big time….

I have a difficult client that is notorious for being very impatient and demanding, often with requests that my firm can’t accommodate due to breach of contract or financial limitations.  One day I got a terse email from him complaining about a project my team generated late.  He was in denial that the reason the report was late stemmed from his team giving us incomplete data that we had to chase down from them on multiple occasions.

I was so irritated that he was blaming us for their incompetence that I let the email fester in my inbox while I moved on to other things.  He didn’t deserve any more of time!  Boy was I stupid.  What I didn’t realize was that because my client was upset (justified or not), he ended up becoming furious that I ignored his email, and he ended up calling my boss’s boss to chew him out about my insolence.  Ouch.  All of a sudden I became the idiot for not handling the situation and having to bow my head to the man who signs my paycheck.  Whoops!

Even though we all receive 100s of emails a day, it is crucial to actively watch for emails that are addressed to you specifically or to your team.  There will be times when a client may be lashing out for something that wasn’t your fault but it’s your responsibility to explain that to him/her in a timely manner whether over the phone or in a non aggressive email reply.  Your career will depend on it.  Don’t risk losing a client, a friend, or your reputation for being known as the infamous non-responder.

Tips for taking control of your email:

• Can’t respond right this minute?  Use the Mark as Unread function so you’ll remember to reply later.
• Create email rules to automatically sort and route email for you.
• Stay organized and develop a system that works for you.  My inbox only contains emails that I haven’t addressed.  Everything I completed gets filed into a folder.
• Create meaningful folders and subfolders.  A filing system is only effective when you know where to go to retrieve something.
• Prioritize and handle the most urgent emails first.  Many programs like Outlook let you assign different color flags for tracking prioritization.  You can even assign a category name for each color flag, very useful!
• Need to do research before having an answer to a client’s email?  Reply right away to the client letting them know you’re investigating the issue and will follow up in a few days.
• Watch your total inbox size & empty your trash.  A lot of servers will stop sending you new emails if your account has gone over the size limit.
• Steer away from arguing, complaining, and snide remarks in emails.  Emails leave a permanent trail that you don’t want to sneak out and haunt you later.
• We’re all busy but that doesn’t mean you can ignore emails from your friends.  Family will probably forgive you for being flaky but friends will hold it against you if you never respond to them.
• Check your spam folder regularly.  Spam filters aren’t perfect and sometimes important emails can end up in there by mistake!

CONCLUSION

If you can practice all of those tips regularly you’re actively improving your communication!  Don’t down play email skills – staying on top of emails and responding in a timely and curtious manner are key skills now equally as important as face to face meetings in our current work environments.   A lot of work places don’t record phone conversations but I can guarantee most of them are archiving every email you’ve ever sent!  Get active with your email and avoid being known as the person with the black hole inbox!

Readers, how many e-mails do you have total in your inbox?  How many of them are unread?

What would you say your average response time is over e-mail?

Is e-mail your preferred way of communication?  If not, what is?

Keigu,

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

Folllow on Twitter @FinancialSamurai and subscribe to our RSS feed.

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If I’ve learned anything in the work place, it’s that most people simply want recognition for a good day’s work.  Pay and promotion are secondary to a simple gesture of a pat on the back or a “well done.“  Yet, why is it that praise is so often lost in the shuffle?  When just saying “thank you” is so easy and cost effective, silence often replaces.

I remember going through a rough stage in my career where I felt invisible.  Like Ralph Ellison’s protagonist in the Invisible Man, even with 1,369 light bulbs shining brightly around his basement room, he still felt like nobody noticed.

“I am a man of substance, of flesh and bone, fiber and liquids – and I might even be said to possess a mind.  I am invisible, understand, simply because people refuse to see me.” This quote has stuck with me for well over two decades since first reading Mr. Ellison’s 1952 classic in high school.

THE MYSTERY

The conundrum is that even during my most dejected times, when all I wanted to do was give up, I got promoted like clockwork.  One would argue that everything is in the mind, and that if the company is promoting me then by default, they are recognizing my work.  Yes, to a large extent this is very true.  What people don’t realize is that with each promotion comes a higher and higher hurdle to achieve until one day, the hurdle stands 20 feet tall and becomes physically impossible to clear anymore.

The pace of progress has slowed, and I’m left wondering how to continue improving.  It’s like making money.  Even a multi-millionaire can make an extra buck.  It never ends.  The pull of other people’s success draws me to create my own.  Again, a comparative issue which is hard to avoid.  Once you become the manager of the first floor, you begin to wonder what it’s like to be the manager of all ten floors.  Pretty soon everybody expects you to keep succeeding and peers no longer praise you because you are expected to win.  Here’s when things begin to unravel.

LOOK OUT FOR OTHERS

The solution is to never stop giving.  At some point in our careers we have the duty and the power to nurture others.  It’s like waking up one day at 35, realizing you’re not the youngest person in the crowd anymore.  There’s no novelty or glee in telling others how far you’ve come at such a young age, because you’re just not that young anymore.  There’s always a new crop of people coming in, and it’s up to you as the senior person to recognize other people’s efforts openly with no concern of your own.  Stop thinking about yourself.

Refuse to not see someone and all their talents.  Don’t let them be invisible.  Allow them to turn off all their light bulbs except one.  All anyone needs is just one.

Readers, have you ever felt invisible in your career, with your friends, or family?  What about in the online world if you have a website?  If so, how do you cope and make sure you don’t let the feeling of irrelevance keep you down?

Regards,

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

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May retail sales drop 1.2% or the most in 8 months as more and more people turn to personal finance bloggers for frugality advice!  I’m pretty certain nobody has ever come up with this statement, but think about it for a little bit.  Why is it that the public should take personal finance advice from BusinessWeek, for example?  The articles are written by relatively well-paid writers who are on a mission to report the news.  They do a fine job at that, but perhaps not as fine a job making things visceral like the personal finance community.  What’s more personal than a real person like Jeff delivering pizzas to get out of debt?  Not much!

It’s very hard for the mass media to compete against a team of personal finance bloggers such as the Yakezie.  We’re real life people responding to comments and putting ourselves out there.  There’s a two-way street with us.  If I were Editor in Chief of any mass media publication, I’d go out and hire an bunch of influential personal finance bloggers and put them on my payroll.  $75,000 a year will do or perhaps $150,000 a year if you want us to write an article a month exclusively for you.  By doing so, the Editor will inject new life, new readers, and therefore a wealth of new advertising dollars to the publication.

As evidenced by May’s retail sales figures, we are creating the news with our frugal ways instead of just reporting the news.  There’s a movement underway, can you feel it?  Maybe we’ll band together and talk about how we should never buy new cars again, causing June’s new car sales to dip.  Or maybe we’ll discover how amazing one person’s unsung journey is to fight poverty in Uganda and direct millions of dollars their way.  That counts for something.  Let’s make a palatable difference with the words we write.  Someone is out there listening.

Have a great weekend everyone!

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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The LA Lakers and Boston Celtics have met 11 times in the finals.  Combined, the two teams have won an incredible 32 championships in the NBA’s 63 seasons.  Purists will note that only 10 of LA’s 15 championships came in LA, while the other 5 were in Minneapolis from 1949-954.  Either way, there’s no doubt that the Lakers are one of the best teams in NBA history.

How is it that two teams alone combine for about half of all championships in league history?  The answer is simply superstar cities which offer high wages, a huge fan base, and enough diversity in all things to keep one entertained.  Let’s be frank.  There’s no way the Cleveland Cavaliers, Dallas Mavericks, Charlotte Bobcats, and Utah Jazz will ever win an NBA championship.  Not to say any of these cities aren’t nice, they just don’t match the star power of places such as New York, LA, and Boston.  Eventually, the best players and staff all gravitate towards one of the major metropolitan areas to really compete for a championship.

MOVE IF YOU WANT TO RAISE YOUR STANDARDS

There’s a reason why the best and brightest flock to the big coastal cities of America.  It’s where the best jobs, and therefore the best pay reside.  The networking opportunities are amazing, and if you have New York City on your resume for example, it’s like a stamp of approval that you can handle anything.

Some will say that big city living is expensive.  True.  But, that’s because you are making so much more money it evens out in the beginning.  As you progress in your career, your income starts to completely outstrip your basic living costs and real wealth starts to build.  The upper limits of the income band are much higher, which is one of the key competitive advantages.  A big city provides you the platform to make things happen.

CONCLUSION

By the time you retire from a superstar city, you can practically move to any other city in the world, and your living expenses will be cheaper.  Whereas if you start off in Altoona, Kansas, you’re pretty much stuck.  It makes sense that if you want to be the best, you should compete with, and surround yourself with the best.  The Lakers have the marquee player in the West with Kobe Bryant and the best coach in Phil Jackson.  Boston’s Doc Rivers and the big three aren’t too bad either.  The A players want to be in the best locations, and so should you.

Readers, for the younger readers especially, what’s holding you back from moving to a bigger city if you’re looking to build greater wealth?

Do you believe superstar cities offer more career and wealth building opportunities?  Or do you believe bigger cities just cause you to go broke?

Who do you think will win the NBA championship?

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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Pick any private school.  The cost is about $200,000 over four years.  These figures don’t surprise anybody anymore given the ever rising application volume to storied institutions such as Harvard, Yale, and Princeton.  That said, there have to be some who believe $200,000 for a private school is a hard pill to swallow over an excellent public school for just $40,000.

With an estimate 17% of people aged 20 through 24 unemployed, swallowing a bowling ball may be easier than finding a desirable job post graduation.  Let’s say you are one of the unlucky few who can’t find a job after a $200,000 education.  Does it really matter? Let’s think about why it doesn’t really matter from the eyes of several recent graduates.

THE BOY WHO WAS FORCED TO GO

Jimmy graduates from Columbia this year with a degree in History, European History to be precise.  Despite his best efforts to land a summer internship last year, none were available, so he decided to go Euro-railing with his buddies for three months.  What a blast, as he traversed the continent and collected bottle caps and coasters from every bar he patroned.  The total cost of his trip, including airfare, food and lodging was a mere $10,000, just 1/5th what his parents pay for 9 months of school!  What a bargain he reasons.

Everything is a bargain to Jimmy because he doesn’t have to pay for anything.  He was happy to attend a SUNY school for a fraction of the price, but his parents pushed him to attend Columbia.  In return, they would pay for everything, so long as he promised to just do well.  The pressure Jimmy faced was immense.  How could he live up to his parent’s expectations?  He knew he couldn’t.

With Jimmy’s fancy Columbia degree, he reasons that he’s held up his end of the bargain.  He didn’t drop out and instead flourished with a 3.7 GPA and a cum laude designation on his diploma.  Yet, with no job waiting for him at the end of the rainbow, is all for not?  Not so says Jimmy.  The diploma is worth it, and if people don’t want to hire him, it’s their problem and not his.

You see, Jimmy’s parents are multi-millionaires who live in a $2.5 million dollar house in Greenwich, Connecticut.  His father is the CFO of a Fortune 500 company and his mother has never worked a day in her life.  In fact, the nanny who raised Jimmy since birth is still living with his parents even though they are empty nesters.  Someone has to clean up the 5 bedrooms and run errands.

Like Jimmy’s mother, he never needs to work either because his trust fund can easily support him for the rest of his life.  Jimmy is not unique, because all of his friends at Columbia are wealthy.  Just by graduating, Jimmy and his friends legitimize themselves to the world.  To think about starting at the bottom of any corporate is beneath them, when they are the sons and daughters of business leaders.  Hence, who needs a job?

THE WOMAN WHO PAYS HER WAY

Now lets compare Jimmy with Allison, who paid her way through Columbia.  She too, could have decided to attend a school 1/5th the price, but she did not.  Instead, she chose Columbia out of the belief she would get a superior education, and land a dream job in marketing.  With over $100,000 in student loans, Allison is suffocating from debt, and her repayment starts 6 months after graduation.  Allison has no job offer either, and has decided to wait tables until she does.

Allison doesn’t want your pity, so don’t give her any.  She made the choice to spend $200,000 on education even though her middle class parents, who earn a combined $80,000 a year couldn’t afford to offer much help.  Only a small few get to attend such an elite university, and for that, she feels proud to have the opportunity.  Some day, she will see the benefits of her Columbia degree, just not now.

Unless the right job offer comes a long, Allison is happy waiting tables.  She won’t settle, even though it may seem like she already is.  If a year goes by without finding her perfect job, she’ll just go to graduate school for another $50,000 a year.  Allison knows she’s smarter than most people and has a tremendous amount of pride.  Don’t pity Allison for not finding work, because she’s content with her own choices.

THE SUPERSTAR

Sandeep stands above Jimmy and Allison for his brilliance.  He won the National Spelling Bee at age 9, finished multi-variable calculus by the 10th grade, and is on the US national juniors squash team.  Sandeep has a full ride to Columbia and like Jimmy, doesn’t have to spend a dime.

Despite Sandeep’s achievements before and during college, he too, cannot find a job as a strategy consultant.  Sandeep doesn’t care, because he had a grand old time playing squash, experiencing the NYC night life, and learning something new on the side.   Besides, what’s $200,000 when none of it came out of his, or his family’s pockets?  Absolutely nothing.  As far as Sandeep is concerned, his dream job hasn’t found him yet.

Mentally, Sandeep figures that he can take the next four years off since he worked so hard during the past four years.  Maybe he’ll go explore the world and live on a shoe-string budget.  Maybe he’ll try to become a squash pro in Europe.  The uncertainty of his future excites him, especially since he’s armed with a free Ivy league degree!

CONCLUSION

People who go to private schools aren’t stupid, nor are they irrational.  Even under the most difficult scenario where one has to pay their way such as Allison, she doesn’t want your pity.  They knew what they were getting themselves into, and took a risk with their finances in order to experience “the best” education in the world.

The reason why $50,000 a year tuition exists is because enough people believe it’s worth it.  If not, tuition prices would adjust accordingly.  Hence, there’s really no need for mass media schadenfreude gleefully reporting that private school kids aren’t finding jobs.  There’s no need for concern either.  The only people making noise about a tuition bubble are parents who probably can’t afford $50,000 a year, but who believe their kids deserve the best, whatever that is!

Readers, why do you think people make such a big deal about private school tuition?  Harvard could charge $100,000 a year today, and there would be more demand than seats.

Who are the people feeling sorry for private school kids without jobs?

Do you think private schools are worth it over public schools?

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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The following is a guest post from @NealFrankle of Wealth Pilgrim.  Neal is a Certified Financial Planner, a fellow Yakezie member, and all around good guy.  Hope you guys enjoy!

During strong markets, anyone can make money. During weak markets, everyone gets hurt. For the most part, all ships rise and fall with the tide, financial adviser or not.

So what’s the point of having an adviser?

(I have my own answer to this question and it may surprise you.)

But before we get to my answer, let’s explore the wild and wonderful world of financial advisers and our clients.

1. Financial Advisers are Salespeople.

I know. I’m a financial adviser. We sell products and ideas. We sell baby….we sell.

In fact, most of our training is in sales, not financial planning and not investment management. If you read “How to Become a Financial Planner” you realize this is true. A financial adviser might have specialized training as a Certified Financial Planner (for example) and that does provide education that helps us plan. But we’re still salesmen. We gotsta make a living and that means most of us are going to sell you something if we can. Show me a financial adviser who has been in the business and survived more than 10 years, and I’ll show you a pretty sharp salesperson.

2. We don’t have a crystal ball.

If you really expect your financial adviser to beat the market year in and year out you should get a job as a stand-up comedian because you’re funny – and not in a good way. If your adviser does great is some years, she’ll do crappy in other years. It’s this risk/reward thing you’ve heard about. (Unfortunately, it is the way the world works.)

3. We have feelings.

If you cut us…do we not bleed? If you tickle us…do we not chuckle?

Yes…. we do.

However, and this is a huge one, if we’re any good, we don’t let our feelings interfere with our work.

This is one difference between us and you that explains why the best of us are worth what you pay us.

I’ve been in this business for over 25 years. Do you want to know how many times smart (I mean super smart) clients call me up with ideas that are super dangerous? How about, “all the time.”

When the market is strong, you get greedy. You want to take more risk and that’s a bad idea. And when I say “bad”, I don’t mean it in the Michael Jackson cool way either. I mean, bad as in…really dumb.

Let’s say you work out a 20 year investment plan that ends up with you sipping Sake on some sandy beach when you retire. You look at a number of 20-year periods and see that the historical worst-case is a loss of 40% for an all-equity portfolio. That’s too steep for you so you select a portfolio with less potential risk – and lower historical worst-case losses.

Everything runs great – until the market takes off. At this point, left to your own devices, you get greedy and put everything into the market. The moment you do that, your risk skyrockets and if things don’t turn out, you might get wiped out.

But if you work with a good financial adviser (and listen to her) this won’t happen. She’ll remind you of your long-term plan and bring you back down to earth. Don’t thank us….it’s our job.

4. We know what works.

I’m speaking here about long-time veterans. We’ve worked with clients for decades and we’ve seen every mistake known to man. We’ve seen what happens when people get greedy or afraid. We’ve seen what happens when people try to predict the future or ignore it. We’ve seen what happens when people don’t force their children to be financially responsible.

Tap into our knowledge and experience. You’ve got one financial life. We’ve been part of hundreds of them. No we’re not any smarter than you are. We’ve just changed more financial spark plugs than you have. We know the right wrench to use.

5. We know what’s good for you.

That’s right. You read it right. We know what’s good for you and you don’t.

How many times have you gone to the dentist for a cleaning only to find out you need a new crown? Me too. It might hurt but you’re better off by knowing the truth and taking care of it…right?

The same thing happens in financial planning. You come into the office thinking everything is “wunderbar”. We stick a financial thermometer up your……I mean…in your mouth……and we tell you what medicine you need to start taking.

We tell you:

Which retirement plan to participate in.

How to protect your beneficiaries.

How often to update your trust and what to look for.

How to balance your portfolio.

How to use Inherited IRAs.

6. We aren’t perfect.

We’re just people. The vast majority of us are honest and want to help you. But a few of us aren’t. You’ll have to use your own judgment to find the right person to work with.

As nice and honest as we are, we make mistakes. We work with a lot of people and we forget things. When we do…don’t get angry. Just remind us and be kind.

Bottom line, being a financial adviser is the best small business idea I could think of. I love being in it. Not because I think I make you more money – although I try to do that as best I can. I’m proud of what I do because I help people get what they want out of life with less risk and less cost.

I charge for what I do and I’m worth it.

Regards,

Neal

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If you look carefully around the web, you’ll read scores of articles about the desire to retire early.  Yours truly wishes to finish up no later than 45, as I believe working for 20 or so years is a long enough time.  I’ve done the math with various living and return scenarios and it can be done.  But the question is whether it’s a good idea?  Perhaps not.

Now that the economy is in recovery mode, it’ll be interesting to see how attitudes change towards early retirement.  Will those who’ve short circuited their careers feel the pull to return to full time work and maximize their earnings potential again?  I believe so.  What about all our “lifestyle design” and “digital nomad” friends who had a rough time landing something stable they truly love?  Possibly they’ll come back too.

Those who are able to retire early are often cherished.  I certainly admire those who are able to cut down their desires to the bare bones and live a very frugal lifestyle.  I also admire those who’ve been able to strike it rich very early!  That said, perhaps early retirement isn’t a good idea for the large majority of people.  Let’s explore several reasons as to why people want to retire early, why they exist, as well as understand why it may not be a good idea.  Someone has to argue the other side, so it might as well be me.

WHY PEOPLE WANT TO RETIRE EARLY (IT ISN’T THAT OBVIOUS!)

1) Haven’t found the right job. The number one reason why people want to retire early is because people haven’t found a job that gives them enough fulfillment to do for the rest of their lives.  Nobody quits a job they like.  If there was a job paying $80,000 a year to hike in the mornings and get massages in the afternoon, I’d do that forever!

2) Easier way out. People give up or are sub-optimal performers at what they are doing now.  Let’s say you are a research scientist who after 10 years never produces any relevant research, and finds no cures.  Instead of going on with your failure, you decide to give up, and get out of the game.  Early retirement is kind of like the cowards way of not having to be the best any more.  Some even liken it to suicide.

3) People are lazy and want things now. Society has shifted our ideals from hard work and thinking long term, to instant gratification.  Nobody has the patience to work for decades before being eligible for a pension.  We all think we know more than we do, and deserve to be the rich boss now.  When we don’t get our way, we quit, rather than letting people know we couldn’t reach our potential.

4) A feeling of hopelessness. During the downturn, a tremendous amount of people began writing about a location independent lifestyle, and breaking free from the 9-5 and really doing what you want.  It’s because of this downturn, that many people were displaced, and had nowhere to go.  If they did, perhaps they’d think differently.  In an economy where everybody is losing money left and right, what’s the point of working?

5) Realization that time is precious. With the median lifespan hovering around 80 years old, you only have 15 years of retirement to enjoy your life if you retire at 65.  People in this camp have a heightened awareness of time, and therefore do everything possible to make sure they are financially stable sooner, rather than later.  I’m a strong believer in this thought process, but at the same time, I don’t want to cut short my potential.

THE DANGERS OF EARLY RETIREMENT

1) Oops, you change your mind. Imagine retiring at 37 after 15 years of work after undergrad.  You spend the next 3 years traveling the world, living a leisure lifestyle and experiencing new things.  At age 40, you realize the reason why travel and play is so fun is because of work!  You have the urge to get back into the game, but who’s going to risk hiring a 40 year old with a 3 year employment gap? The employer will suspect you are rusty, and may just bolt after a year.

2) You run out of money. No matter how conservative we are in our retirement money needs, something unforeseen may happen.  Maybe you have a medical disaster, or your house blows down.  Maybe your investments tank due to a massive economic downturn.  Who knows what the future holds.  But if you partake in “normal” early retirement, without the mega-millions windfall, you may find yourself needing more one day.  Again, a large employment gap is perceived as riskier by the employer and you may be un-hireable.

3) You lose touch with friends and family. It’s nice to have all the time in the world to do whatever you want.  But, if your friends and loved ones are busy working all day, they can’t join you on your midday hike or adventure to Bora Bora.  They may also have a family to attend to during the evenings and on weekends.

4) You may find it difficult to start your own family. Unless you have a tremendous amount of money, raising a child may be too expensive an endeavor to undertake as early retirees.  If you never wanted to start a family, chances are you haven’t been saving for a family.  Let’s say you’re a woman who turns 35 and suddenly realizes the safety window for having a baby is closing rapidly.  May be tough to even get pregnant, let alone support a new born without the right support network.

5) You lose your own self-respect, and the respect of others. Unless you’re out there saving the world,  you might start getting depressed you are contributing very little to society.   Others will stop respecting you because you aren’t doing anything productive either.  A great many rich early retiree friends from the Dotcom bubble have mentioned they wish they didn’t get rich so quicky work a little harder for their money.

CAREFUL WHO YOU LISTEN TO

Early retirees will croon about how great their lifestyles are.  I’m sure, in some ways they are spot on.  But notice how they seldom write about the hardships they face.  They can’t, because it’s important they continue highlighting how awesome everything is, to justify their decision to no longer work.  Can you imagine spending 16 years going to school (grade school + four years of college) only to work for 10 years?  Some would surely say that’s a waste, would they not?

The worst that could happen is some aspiring scientist, musician, lawyer, or teacher decides to give up their careers because they believe traveling around the world on a shoe-string budget is so glamorous.  Years later, they realize their fingers don’t remember the notes anymore and the chemical formulas are one big haze.  Maybe they would have made it as a concert pianist, or helped discover the cure for seasonal allergies, ACHOO!  What a shame they never reach their full potential.

EARLY RETIREMENT IS SELFISH

As I strive to fulfill my goal of retiring by 45, I’ve come to the realization there’s an unhealthy focus on self.  “What do I need to amass to be comfortable?” should be replaced with “How much do I need to be comfortable while helping others?”

It’s absolutely selfish for me to even consider working less than the number of years I went to school.  I think back upon my childhood years and how much effort my parents put into raising me.  My mother would spend hours a week sitting down with me after dinner to explain mathematical equations.  My father would read all my essays and fix all the punctuations and grammatical mistakes.  I would feel like a disgrace not to at least try and do great things.

45 is just an age goal.  If I haven’t achieved my potential by then, I don’t plan on retiring even if I have the money to do so.  The point of having an earlier-than-normal retirement goal is to help keep someone focused to achieve whatever it is they set out to achieve.  Like an exam that’s 3 months away, we don’t study until the week before.  Hence, better to believe the exam is only a week away so that we are better prepared.

CONCLUSION

Early retirees sometimes like to pity those who have to work.  Yet perhaps we should empathize with those who are lost and haven’t found something they truly love to do (point #1).  It’s impossible to all be great humanitarians working tirelessly until the age of 65.  It’s easier just to give up and tell the world how fabulous your life is, and how you’ve retired on your “own” terms.

As the economy recovers, perhaps we’ll be able to bring back our lifestyle design friends to their home countries to work again.  Our early retiree friends will stop fearing failure as employers open their arms wide open and allow them to succeed.  Entrepreneurial ideas flourish once again due to an abundance of capital.  The more the wealth gap widens, the more the early retiree crowd will want to get back to work, and realize their full potential.

There comes a point when working isn’t about money anymore since we have enough.  If we all reach this point, we’ll no longer be focusing just on ourselves, but on helping others as well.  We’ll be doing something we love, that provides a sense of purpose.  Here’s hoping we all get there!

Readers, do you agree or disagree that early retirement is a selfish proposition?  Are we all just inherently selfish to begin with?

What is your ideal age of retirement and how do you know when is the right time?

Do you think once we’re back to a raging bull market, there will be less people who want to retire early?

Keigu,

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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Oh, the monotony of it all!  Imagine clocking in, day in and day out with really no change to your job.  You’ve got little risk of getting fired, and in 10 years you’ll retire with several million to last you a lifetime.  In the back of your mind, you wish you didn’t have job security because you despise boredom.  At the same time, you realize you’ve got it made and shouldn’t be so spoiled in your thinking.

One day a headhunter gives you a ring asking if you want an opportunity to make 50% more money a year guaranteed for two years.  The catch?  You’ll be working for a start up with no such promises of job security after year two.  You’ll also have to move to a different city where the cost of living is also 25% higher.  The hours and stress will most certainly more as well.  Welcome to Kathy’s world.

10 YEARS COMPLETED, 10 YEARS LEFT TO GO

Kathy is a brilliant woman with an equally brilliant resume.  She graduated #8 in her class of 6,000 from Berkeley and did a stint at Oxford as a Rhodes Scholar.  What drove her during her twenties was her unquenchable thirst for knowledge.  Everything she did was to answer a why or a how.  How can we increase inventory turnover to improve revenue?  Why are competitors expanding in the northern region while reducing capacity in the south?

A week before she turned 30 something happened.  She stopped wishing to learn how to do things better.  Instead, she began thinking about starting a family.  Despite all the progress women have made, she still feels that no matter how far she climbs, there’s a void without a man to share her life with.  This was 3 years ago.

At 33, she’s alone because her boyfriend broke up with her largely because she spends too much time at work.  He would tell her that working more than 60 hours a week isn’t healthy.  She realizes it’s unhealthy, but as a Senior Vice President, she has responsibilities that cannot be shirked.  What really irks the ex-boyfriend is Kathy’s workplace seniority and far superior earnings.  Men are petty this way.

Kathy makes up her mind that she will be retired in 10 years at 43.  She hopes that within a couple years she can find someone to start a family with, but she’s not forcing the issue.  She strongly believes in destiny.  If it’s meant to be, it’s meant to be she often tells herself.  Her insecure boyfriend can go jump off a bridge for all she cares because she won’t settle.

THE OPPORTUNITY

The firm loves Kathy.  She’s hard working, praises her employees openly, and generates a tremendous amount of revenue.  Her revenue generation is so impressive that her competitors secretly call her “Killer Kathy.”

Killer Kathy’s phone rings one afternoon with a headhunter asking if she’s willing to move to New York City from San Francisco for a new start-up firm.  A long with her transfer is a two year guaranteed pay raise that’s 50% higher than what she’s currently making.  We’re talking more than a couple hundred thousand a year more guaranteed.

If you include school, 14 years is a long time in the Bay Area, and perhaps it’s time for a change.  Despite generating large amounts of revenue for the firm, she’s basically flat-lined over the past three years because she’s already at the top of her game.  Instead of progress, she’s just maintaining, trying to keep her competitors at bay.  It’s no fun being the senior player at an established firm.  When she slips from #2 to #3, she feels the pressure.

Instead, the idea of starting over at a new shop where she can create a new business model and watch her company grow sounds intriguing.  She longs to build something from nothing, and hear the praise of going from nowhere to Top 10!  With the headhunter’s phone call, Kathy is given a rare opportunity to build something new, with the security of a guaranteed income.

What’s equally interesting is the thrill of being in a bigger city with the opportunity of meeting that someone to share her life with.  She’s been to New York City plenty of times before, and each time she’s tickled by the amount of available bachelors.  If finding someone is a numbers game, perhaps she should be there!

CONCLUSION

There’s something to be said about security and comfort.  To know that you’ll likely never be unemployed must be a wonderful feeling.  Furthermore, San Francisco is a beautiful place!  It’s not like Kathy is just surviving either.  As a department Vice President, she’s making good money and will undoubtedly retire in 10 years if she stays with her firm.

Despite Kathy’s security, she can’t stop thinking about the opportunity in New York City.  Even if things implode after two years, she’ll have a hefty savings cushion due to the increased compensation.  Mathematically, working for 50% more for 2 years is like working for 3 years at her existing place.  Deep inside though, Kathy knows that if she found someone here in San Francisco, she’d most certainly never leave.

Readers, if you were Kathy what would you do?  Should Kathy leave her cushy job to find new adventure, or be satisfied with what she has?

Is it reasonable for her to feel that a life is not worth living if she doesn’t have a man to share it with?

As a woman, would you choose career or family if you had only one choice?

Keigu,

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

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

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My name is Lyndon and I’m overwhelmed by all the feedback from “The Curse Of Making Too Much Money And Not Pursuing Your Dreams.“  Thank you guys for sharing your thoughts, and thank you Sam for presenting my dilemma in a tasteful manner.  It’s only right for me to provide some feedback and give everyone a little more insight.

WEALTH IS AN ILLUSION OF HAPPINESS

One of my happiest memories was studying abroad in Chile for an entire semester.  I lived off beans and rice, and slept on a wooden plank bed.  At night, sweat would bead up on my forehead until it dripped down across my temple and into my ears.  It was that hot.  Yet, despite having no money, I was so happy.  Life was simple and the greatest pleasure I got was learning from others.

At the time, I told myself that if I could just earn $1,000/month and have my trusty camera, I’d be happy.  Well, I lost my way when McKinsey gave me a job offer.  Nobody turns down McKinsey, partly because nobody gets into McKinsey.  The curiosity of the job compelled me to take it rather than pursue my interests.

I recognize I’ve been blessed with the opportunity to work for a respectable company that may one day allow me to retire comfortably.  Yet, I wonder about that semester abroad in Chile all the time.  A couple years ago I went down to Chile and revisited the old AC-less dorm room where I used to live.  It brought back so many good memories.  Afterwards, my friend and I went back to our 4-star hotel, sipped on a Mojito and ate some ceviche.

It was then that I realized that despite living in a much nicer place on 100X the budget, my happiness compass pointed towards the dorm room of the past.

CAVORTING WITH THOSE WHO UNDERSTAND

One of Sam’s lines that hits me most is, “Ironically, it is the sympathy that Lyndon seeks, which makes him only hang out with people of his same socio-economic class.  He understands that most of America won’t understand him so he shuns most people.”

It’s hard to read, but it’s true.  I realize many won’t empathize with me, simply because only a minority of people in America make $300,000 a year.  I expect people to throw mud and make fun of the situation while calling me a cry-baby.  I realize it is equally ridiculous to try and garner sympathy, hence I don’t try.  I keep quiet.  I keep to myself because otherwise, you’ll think I’m arrogant when I discuss buying a European automobile, or discuss last night’s symphony.

Yes, most of my friends are all working stiffs who make six figures and lead relatively decent lives.  We don’t expect anybody outside of our circle to understand the grueling hours required to make our income.  We don’t expect people to understand that ever since we were kids, we were told we better succeed or else.  Many of our parents are doctors and lawyers and politicians.  Yet, how many people on earth can become successful doctors, lawyers, and politicians?  Not many, and that is why the pressure is immense.  We are not our parents nor do we live in our parents’ generation!

You’ll have to forgive me, and people like me for seeming callous and insensitive towards others.  The truth is, we fear backlash and insensitivity by you, which is why we keep so closed off.  In fact, perhaps this is why there are so many congregations of ethnic communities in big cities, the Chinatowns, the Little Italy’s and Harlems, etc.  Maybe we all fear a certain type of backlash, and just want to feel safe.

IT JUST CAME

I didn’t ask to make the money I make.  Income growth just comes with longevity.  Longevity is due to performance, which ultimately means value creation for a company.  A person makes $1 million a year because he probably generates $10 million a year in revenue for the firm.  There’s nothing really fancy about income.

What I don’t quite understand is if people want to make more money, why not just join an industry that pays well?  What not be a banker, lawyer, doctor, consultant, trader, engineer, Internet guru, Brittany Spears, professional athlete, or politician?  OK, it’s hard to become successful at one of these professions, but that doesn’t mean you can’t try.

Photography is my passion, but I realize that I’d have a better chance at becoming the President of the United States than making a living doing what I love.  Yet, I still long for it, and practice every chance I get.  On weekends I scout locations for my next photo shoot.  I’ve got a website where I’m actively selling my services.  I’ve even planned out my next three vacations to remote locations so I can capture that rare brilliant shot.  I won’t stop trying.

THE DECISION

The bonus check hit the bank account the other day and I’ve made up my mind.  I cannot leave McKinsey to follow my dreams.  Someone in the comments section wrote so aptly, “Once your hobby becomes your job, it stops becoming your hobby!“  I’m afraid that if I become a professional photographer, I’ll begin to hate the entire industry.  I’ll start being overly critical about my own work, and scoff at others who’ve been accepted.

I love photography too much to risk not loving it anymore.  When Sam wrote about my situation, I was at the darkest stage of the year where I worked for 11 months without knowing what my bonus would be.  Now I’m in the brightest stage of the year where I’ve worked for only one month and have the year ahead of me.  I’m under no illusion that come March next year, I’ll have a part of me that will wonder whether I made the right choice.

As of right now, I’m happy again because I know what I must do.  It’s important I create a realistic exit strategy and live below my means.  You’re right.  A $4,000/month two bedroom apartment is fixable.  I’ll be looking to get a more “reasonable” 1-bedroom $2,500-$3,000/month apartment in Manhattan instead.  A spreadsheet is open right now pro-forming my financial life over the next 10 years.  All I know is I want to be done by the time I’m 40.  Knowing this, means figuring out a financial plan to get there.

THANK YOU ALL for your thoughts.  I appreciate every single one of them.  THANK YOU Sam for letting me gain more perspective and finding a solution!  Wealth is an illusion of happiness, but don’t let me stop you from trying.

For happiness!

Sincerely,

Lyndon

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

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After writing “The Art of The Interview“, I realized after interacting with readers that interviewing is completely like dating!  You’ve got a first chance to make an impression, and if it’s a good one, you get to go on more dates until you finally get “the prize”.

Let’s talk about five connections that prove interviewing and dating are so much alike.  We can make an argument that the Casanovas of the world are much more adept at finding employment and potentially staying employed than those with no game.  As men are generally the ones to initiate a date, the following connections will be from a man’s point of view.  That said, all of the interview concepts are the same for both men and women.

1) HOW YOU ROLL

Date: Do you pick up your date in a Black Range Rover Super Charger, or a Volvo station wagon with missing hubcaps?  The majority of women will be more impressed with your Range Rover even if they don’t admit it.  The gracious woman will always say it doesn’t matter what car a guy drives, but we all know there is at least some value in appearances.  Beyond the element of flash, a woman will care about safety and creature comforts.  Heated seats during the winter anybody?  That’s always an option to choose if you are buying a car and using it in to search for love.

Interview: Do you wear an ironed shirt and a sleek dark colored suit, or a hodgepodge outfit with loose threads? Your employer wants you to be a good ambassador to the firm.  She imagines sending you to visit senior colleagues, or important clients and she needs to feel confident you are presentable.  Appearances matter more than you think.  Invest wisely.

2) DEPENDABILITY

Date: Have you just come out of a multi-year relationship and no matter what you do, you’re labeled as a rebound?  What about if you’ve been single for a while, and you’re getting up there in age?  Girls start thinking something is wrong with you.  Either way, you’ve got an uphill battle convincing your date you’re an eligible partner.  As a result, you’ve got to work hard to show you are a committed person who will make her happy.

Interview: Are you a job hopper, or someone with a long employment gap?  Interviewers don’t like seeing someone move every couple years because they think you’ll move on them soon, thereby wasting their time training you.  Interviewers will also question a long hiatus from work.  The longer the employment gap, the more logical their thinking.  If you are such a good candidate, why didn’t someone hire you by now?  Focus on what you can bring to the table now, instead of the past!

3) CREATIVITY

Date:Do you bring her to Chucky Cheese or to Spago’s with live jazz music playing in the background?  Instead of a restaurant, what about taking her to a park along the beach on a warm, sunny day for kite-flying and a picnic?

Interview: Do you give rehearsed answers or do you find a way to address them differently?  Rather than respond, “My biggest weakness is that I work too hard”, may I suggest saying to a female interviewer, “My biggest weakness is that I can’t stop eating chocolate-covered strawberries.  I know they are bad for my waste-line, but I can’t help it.“  Chances are, your interviewer will smile, and during your follow up thank you card, you can also include one chocolate-covered strawberry to bring her back to the point of the interview.  Sending a box is over-kill, but sending one with a very formal note of thanks will do wonders!

4) PRESENCE

Date: Are you confident and give off a sensual aura?  Do you look into her eyes and truly listen when she speaks?  Do you look away for a moment during thought, respond, and then ask her a similar question to engage her?  Do you stand up when she excuses herself to go to the restroom?  Are you self-deprecating but confident in your delivery?

Interview: You have to have a presence in the interview because you want her to remember you when the session ends.  If you’re not engaging in active listening, you’re already disrespecting your interviewer.  You want to be like that movie that leaves the viewer wanting for more after the credits start rolling.  Be unforgettable by being genuine and engaging.

5) THE CLOSE

Date: Do you drive her home, or at least make sure she gets in a cab safely?  At the door, do you shake, hug, or kiss her cheek?  Or do you go for the kill and lay a big fat wet one on her lips?  Hard to tell what she’s willing to accept, so be careful!

Interview: Shake firmly with a dry palm.  Mention to the interviewer it was a pleasure meeting while thanking her for her time.  Ask what are the next steps if she does not offer.  Follow up with a thank you note on e-mail or a card, and don’t forget that one chocolate covered strawberry.

CONCLUSION

Interviewing is a lot like dating.  The more dates you go on, the more you will be able to close.  Hence, interviewing is a teachable skill that grows with practice.  Ask your friends and family to interview you before the real deal.  The more you practice, the better chance you will have to create a long term partnership with the person or company of your dreams.

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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“If there’s a mile long track, and the first lap you travel 30 mph, how fast do you have to travel on the second lap to average 60 mph for both laps?” asks the stuffy man in the corner office.

I bumbled and stumbled around until I responded, “Hmmmm, obviously it’s not 90mph, but…… let’s walk…. it through!” My instincts told me it wasn’t a straightforward answer, but I really had no idea how to solve the problem. Instead, I got the first part right by addressing the trick question, and proceeded to stall long enough so that he couldn’t help but tell me.

FIGURE IT OUT YET?  NO CHEATING!

After about 20 seconds of thinking out loud, he blurted out, “Infinity Speed!  Imposible!” “You see Sam, since it takes 2 minutes to average 60mph for both laps, you just can’t do it because at 30mph on the first lap, that already took you 2 minutes!”

I quickly chimed in, “Ahh, of course! You beat me to it!” Whew. Of course he beat me to it because if we continued talking for eight hours I still wouldn’t know the answer!

The interview process is absolutely the most vital portion of your job application process. I don’t care whether you went to Harvard, have a 4.0, and dance like MJ. If you come across as a pompous fool, or you don’t show that you really care about the position, you will never get the job.

Putting it another way, think about all the people you aren’t particularly impressed with at work. How did they get through security? They simply interviewed well. Once you’re in, it takes a long time to get you out!

Below are some helpful tips I’ve compiled after interviewing over 250 candidates in my career so far.

FINANCIAL SAMURAI’S TOP 10 INTERVIEW TIPS

1) Don’t be late or too early! Nothing drives an interviewer crazier than a late candidate, or a super early candidate. Half the time, the interviewer is there because it’s part of his job requirement, or it’s a favor to one of his colleagues.  You won’t believe how many times I’ve heard an interviewer write-off a candidate just because he’s even 1 minute late. On the flip side, a super early candidate is annoying, because it puts pressure on the interviewer to alter his or her schedule.  Arrive 10 minutes early and ask your greeter to announce your arrival 3 minutes before the scheduled interview.

2) No limp handshakes or sweaty palms. Studies show that a first impression is impossible to shake. If you come out with a limp and sweaty palm, your interviewer is going to remember this because this will be your only physical contact.  Keep a small hand towel, perhaps with some talcum powder to keep your hands dry.  Shake firmly!

3) Dress appropriately. I’ve had many guys and girls come in dressed like they were about to go clubbing with their mini-skirts, and corduroy jackets. This isn’t Tryst in Vegas.  Dressing inappropriately conjures up images of immaturity and trouble.  Always dress equal to one half step better.  See “You Aren’t Going Clubbing, Interview Attire 101”

4) Maintain eye contact, but don’t stare. If you’re constantly looking at the floor or wandering, you will give your interviewer the impression that you have no confidence, and/or that you don’t care. FBI studies show that during the shake down process, liars have a difficult time looking their interrogator in the eye.  At the same time, you don’t want to have crazy eyes and pretend it’s a staring contest. You will make your interviewer uncomfortable, and wonder if there’s spinach in his teeth. Maintain eye contact and practice looking away briefly during times of thought or transition.

5) Research the heck out of the company. If the company recently reported fantastic first quarter results, read all about it and figure out what drove earnings.  Understand the company’s strategic vision, which will hopefully jive well with your own.  No company has grown in a straight line, so pinpoint the stumbles as well, but understand how they learned from their errors and improved.

6) Research the heck out of your interviewer. More often than not, the HR person will give you a heads up on who you will be speaking to.  It’s important to research the person to the point where you are like a CIA operative.  Know everything you can about the person and their accomplishments.  If they studied Polish in college and like corgi dogs know it.  The idea is to not reveal to them everything you know, for that would be stalkishly freaky.  Instead, it’s important to be able to weave related interests with your potential colleague at choice times.

7) Interview them as much as they interview you. After a certain number of interviews, you should have a sense of whether they want you or not.  At this point really start using the opportunity to ask them about their experiences, likes, and dislikes about the company.  It’s unacceptable to not have any questions at the end of each interview.  You may be speaking with someone who actually hates his/her job, but have no idea because you aren’t asking about him/her.  Ask and investigate without being too nosy.  “How many years do you think the average person has been with the firm?” is a good question to always ask.

8) Always bring enough copies of your resume.  The idea is to make the interview as easy for the interviewer as possible.  Unless you’re speaking to HR, the interviewer is not a professional interviewer.  They could be speaking to you in between meetings on a hectic day.  Bringing your resume and other information for them to look over shows you are thoughtful and prepared.  The average time spent looking at a resume is 10 seconds, which also equates to the average amount of time an interviewer prepares to interview you!

9) Be self-effacing while showing signs of brilliance. The arrogant interviewee will get booted faster than a rat on your favorite lemon meringue pie.  Talk about your failures and how you’ve overcome them to succeed in new ways.  Provide concrete examples of success, backed by results i.e. sales grew in my department by 25% after introducing a new method of selling.  Stay humble but show them your confidence.

10) Always follow up within 24 hours with a thank you e-mail or card. In each e-mail or card, do not write a generic message saying.  Instead, pick out a critical moment in the interview where you think brings out the best in you, or gives you the opportunity to show your skills further.  Perhaps the interviewer asked you about your most difficult moment, and you didn’t answer it well.  Use the thank you note to address the question further.

CONCLUSION

The number of qualified resumes are seriously piling up on my desk, making competition that much more difficult.  Focus on these initial tips to help yourself get ahead.  As a potential colleague, we just want to work with someone who shows promise and is a good person.  Don’t forget that when you do get accepted, to treat your job as if you won the lottery and not take your good fortune for granted!

Readers, any other interview tips you’d like to share?  How is the hiring front looking like at your company? Did you get the answer to the beginning of the post right without cheating?  Any good tough interview questions you’ve had?

Keigu,

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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The luckiest people on earth are those who don’t make a lot of money.  They’ve got very little downside and can really pursue their childhood dreams.  Imagine if from the moment you graduated college, you landed a plum corporate job that paid just enough to keep you motivated, but not enough to enjoy your freedom.  The longer you work the more you realize there’s really no escape, because there’s simply too much at stake.  This is the problem that plagues my friend, Lyndon.

THE STRATEGY CONSULTANT WHO MAKES BANK

Lyndon just turned 30 and is having a mid-life crisis.  He’s worked for 8 consecutive years at McKinsey & Co, one of the prominent management consulting firms in the world, and makes roughly $300,000 as an “Engagement Manager”.   Obama says he’s rich, but Lyndon isn’t buying it when his 1,200 square foot, two-bedroom apartment in New York City costs $4,000/month.  If he wanted to buy the condo, he’d have to shell out over $1,000,000, even in today’s market.  To add further injury, $300,000 is really only $180,000 or so after federal (33%), state (7%), and city (4%) taxes!

All Lyndon ever thinks about is being a National Geographic nature photographer.  Every single vacation is planned around some remote destination that takes two days to reach, and therefore another two days to return.  Yet as a consultant, Lyndon is at the mercy of his clients.  Instead of traveling to Mt. Kilamanjaro, he’s on a plane to Minneapolis in the middle of winter.

In 5 years, Lyndon knows he’ll probably continue to make more money and perhaps make millions as a partner in his 40′s.  But what’s the point if he’s not completely happy?  The 65 hour work weeks and minutiae are wearing his soul thin.  He wants out.  Yet, how does a 30 year old, who’s on a straight path to multiple-six figures rationally decide to quit his job and try and make it as a nature photographer?

NO SYMPATHY

An ant is playing the world’s smallest violin somewhere underground.  While thousands are unemployed, Lyndon is on a path to financial freedom, with one of the most prestigious companies in the world, yet he’s unhappy.  He doesn’t feel the plight of the less fortunate, who in his eyes are just in temporary dislocation.  Everything to Lyndon is logical.  When markets crumble, people get dislocated, but eventually get relocated when the markets rebound.  Oh, how Lyndon too, wishes he was dislocated.

Unfortunately, nobody will give Lyndon much sympathy, except for his fellow well-to-do friends.  Ironically, it is the sympathy that Lyndon seeks, which makes him only hang out with people of his same socio-economic class.  He understands that most of America won’t understand him so he shuns most people.

ONE TEMPORARY SOLUTION

In two years, Lyndon will have served 10 years at McKinsey, a long enough period of time for him to not feel guilty about taking a sabbatical.  He’s never taken a 2 week vacation at once, and he’s never taken more than 4 weeks off for the entire year.  How could he, since the firm is paying him so much?  It wouldn’t be fair to his clients he justifies to himself.

The problem with taking a sabbatical in two years is that he still has to work for another two years!  He wants to see the world now.  He’s restless, with unwavering confidence that he can always come back to the industry of advice and fortune.

WALKING AWAY

Lyndon decides that one of his New Year’s resolution is to reboot.  After his bonus hits his bank account, he wants out, but is afraid to pursue his dreams.  He’ll have $250,000 in savings with no debt to his name if he quits.  Remember though, that if he works another year, he’ll save another $80,000, and then another $80,000+ every year forever.  The key issue is the word “forever.”  What would you do if you were Lyndon?

The article is featured in The Wall Street Journal.

Readers, should we have sympathy for Lyndon?  Is he cursed for making too much money?  If so, what advice would you give him?

If someone so young can make so much at a company so prestigious and still be unhappy, what does this tell us about the human condition?

Have you ever experienced something to what Lyndon is experiencing now? If so, what did you do about it, and do you regret the change?

* UPDATE: To see Lyndon’s response, please read “Wealth Is An Illusion Of Happiness”

Keiju,

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

Follow on Twitter @FinancialSamura and feel free to subscribe to our RSS feed

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