Your Money Could Have Done Way Better

I always thought I was doing the right thing managing my finances.  I worked hard (step one) and lived below my means  (step two) and maxed out my 401k and investments (step three).

Turns out I did step three wrong.  Really wrong.

I invested in mutual funds a lot of the time.  I read the summary sheets, saw that they had five-star ratings from Morningstar, and saw the graphs always going up and making big money.  That was the way for me!

Turns out that all mutual funds have four or five star ratings.  The ones that don’t perform well are closed quickly and you never hear about them.  Therefore, all mutual funds are winners…….

At the end of each year, I would usually saw that I made money, but not as much as the overall stock market did.  I thought I was just a bad stock/fund picker, and that was why my returns were less.  I didn’t tell anyone because I felt bad about it.

Turns out I was losing much of my gains to mutual fund fees.  Hidden fees that don’t show up anywhere, except in the fact that your gains are less.

I also noticed that I always did better with my personal stock investment accounts.  This was the “fun” money, where I picked stocks with my son.  We picked stuff like Jack In The Box (his favorite), Disney (both our favorite), and Under Armour (because he wears it all the time).  This “fun” money did wildly, massively better on a percentage basis than the mutual funds.  And I was paying supposed “experts” to manage the mutual funds.

It turns out they aren’t experts.  On average, the fund managers underperform the stock market.

For years, there was a voice in my head and a feeling in my gut trying to tell me that conventional money advice was wrong.  Tax benefits of having a mortgage?  Not really.  I knew better.  Invest in mutual funds ran by someone you’ve never met?  It seemed wrong.

Listen to your gut.  It’s always right.

Read Tony Robbins’ new book “Money – Master The Game” and you’ll learn a whole lot about your money and how to manage it.  It’s probably the best thing you can do for your financial well-being.

The Seven Most Important Words For Building Wealth

In ninth grade, I had an economics teacher who assigned weird projects.  He was also the wrestling coach.  He had a way of motivating people.

Early in the semester, he gave us all an assignment that went like this:

During that week, we had to go to the mall and find something priced $50 or more.  The mall was big, and near the school, and all the students went there anyway so it was a convenient assignment.

Once we found the item, our job was to negotiate a lower price.

I picked a sweater at a department store priced at $80.  It was a plaid Ralph Lauren sweater with the cool polo horse logo.  I had always wanted one.

I found a thread hanging off the bottom of the sweater.  Of course anyone could just cut the thread, and all would be well, and it would still be a cool Ralph Lauren sweater.

Instead, I used the thread as a bargaining tool, saying the sweater wasn’t quite right.

The girl behind the cash register had to ask her manager if she could sell the sweater for less.  The manager came over, and said she could cut the price from $80 to $55.

Suddenly, I felt powerful.  It was like I had figured out how to create something out of nothing.  And it was so easy.

I didn’t actually buy the sweater, as I didn’t have $55, but I learned a lesson that has lasted a lifetime.

These days, I don’t go around looking for defects in products to negotiate a better deal.  Instead, I use the Seven Most Important Words For Building Wealth, which are:

“Is that the best you can do?”

This phrase can be used for negotiating the price of most any product, although it works better in person than it does online.

Some examples of places where the phrase works really well:

Hotels: Even if you have already reserved a room online for a set price, use the Seven Words when you check in.  You will often get a better price on the spot.  If it doesn’t work when you check in, ask again when you check out.

Car Insurance: The agent is going to give you a quote for your premium.  Use the Seven Words once you have the quote in hand.  They will often come back with a better price, or give you options to bring the premium down.  Of course, you can use the Seven Words across multiple car insurance companies to get the best deal.

Home Services: You may be paying for house cleaning, pest control, pool services, or something similar.  Even if you have been using the service for a while, you can ask the question to get a better price going forward.  These are usually small companies that have lots of room to adjust pricing, and they often do.

Gym Memberships:  Another good example of where pricing varies widely from person to person.  Again, use the Seven Words even if you have been a member for a while.  Actually, use it especially if you have been a member for a while.

Craigslist:  Craigslist is already built for negotiating price, but you can use the Seven Words to get the conversation going.

Auto Maintenance:  The Seven Words are very useful for oil changes, alignments, and any other repair work.  Asking the question has a high success rate in this area in my experience.

Pretty Much Anywhere: Some of the weirder places and things for which I’ve negotiated a lower price: bath towels (Target), a trash can (Wal-Mart), a purse (Coach),  gym shoes (Nike), furniture (Crate and Barrel), and lots more.  You can use the technique anywhere.

Using these Seven Words will save you big money, which you can then save and invest.  You’ll build wealth faster.  And you’ve had the power the whole time.

A Couple Of Shortcuts On The Corporate Ladder

Climbing the corporate ladder can take years, or even decades.  That’s a long time to wait to find out if you are executive material.  Here’s a couple of shortcuts to shorten the wait.

1. The Well-Placed E-Mail:  This is about the only time you should email your boss’s boss or higher.  When a senior executive comes to town to deliver a speech, town hall address, all employee meeting, etc, send them an appreciative e-mail the next day.  Keep it very short – two sentences is plenty.  Just mention that you appreciate the time taken, and that you enjoyed hearing the information/vision.

Only do this if you are sincere about your appreciation.  If you aren’t sincere, your two sentences will show it.

Keep the email purely positive.  Do not make any suggestions, offer to help, or ask any questions.  This should be a ‘dead-head’ email – one to which a response is not expected.

When the senior level person sees your name and reads the e-mail, your name will be associated with goodness, positivity, and the fact that you paid attention.  This will help roll your name to the top a little quicker for future opportunities.

2. The Background Check: This one also applies to communication with higher-ups.  When any senior executive is coming to town or coming to dinner, study their background the night before.  This is especially easy now with the use of LinkedIn, and can be done much more in-depth.

Find out where the VIP’s went to school, where they worked, positions they have held, interests, etc.  Most of all, find out what they look like so you can recognize them on arrival.

Find some common ground. Maybe you both went to the same school, or played the same sport, or have similar interests.  Maybe you have some of the same people in both of your networks.  You will be able to find some sort of common ground with just about anybody.

Now, when the opportunity for conversation comes up, you have all the background and preparation you need to make yourself memorable, and potentially skip a rung on the corporate ladder.

Does Multitasking Work?

Some musicians play guitar and sing at the same time.  That’s multitasking that works.

In  most other areas of life, multitasking doesn’t really work.  You can only do one thing at a time, unless there are two of you.

Some examples of where multitasking does not work:

1. Looking at your cellphone while talking to someone.  This sends the message that you hope someone more important is calling you, or that you have absolutely no interest in what that person has to say.  If you are talking to an employee, or on a date, or at lunch with a friend, or in church, or in a meeting, put away your phone.  It can wait.

2. Spending while saving.  The only money you really save is the money that goes into the bank and stays there.  And never comes out.  If you bought a Playstation Four on sale for $100 instead of $400, you didn’t actually save $300.  You spent $100.  You only saved $300 if you put the money in the bank, and it stayed there.

3. Listening to music while studying (or writing, as in this example).  To study and retain information, your brain needs less distractions.  Your brain finds it hard to concentrate on a textbook and Taylor Swift songs at the same time.  Same goes for TV.  Do not study for finals while watching NFL football.

4. Driving while texting.  If you are a commuter, you probably see people texting and driving every day.  Again, whatever it is, it can wait.  There’s no safe way to text and drive.  This includes the “typing by talking into Siri” method.  The driving while texting attempt at multitasking puts more than just the driver at stake.

5. Putting the phone on mute.  This happens all the time in the corporate world.  You call into a teleconference, only to put the phone on mute and then write emails and go about your day.  This sometimes leads to you saying “I’m sorry…….what was that?” when someone finally asks you a question in the telecom.  It can be embarrassing.  In reality, you can’t listen and type at the same time.

There’s only one of you.  Give your full attention to one thing at a time, unless you learn to play a guitar and sing.

5 Signs You Should Keep Trying

Some days you need to bang your head against the wall until you break a hole through it.

You can’t give up on your dreams.  You gotta keep trying.

Here’s some everyday proof that you should keep trying:

1. New Songs On The Radio:  Carrie Underwood could have said “You know what? All of the good country songs have already been sung.  The other singers beat me to it.   There’s no point in trying.”  Thank goodness she didn’t say that.  New songs on the radio are proof that there’s room for anyone who wants to put in the effort.  And we need new songs.

2. The Oakland Raiders:  This team went a full year without winning a football game.  Finally, last week, on national TV, they won a game in their home stadium.  That victory was more meaningful to that team and those fans than a Super Bowl win.  Now they have new life.  And fans can wear their Raiders gear proudly.

3. The First Sale:  If you are starting a business, your first sale will be electrifying.  Once your have the first customer, you have proof it can be done.  After that, it’s an awesome, albeit challenging, journey of learning and tweaking and satisfaction.  And income.

4. Every Time You See A Fed-Ex Truck: The idea for Fed-Ex started as a college term paper.  According to most sources, that paper earned a “C”.  In the interest of full disclosure, it was from a Yale student, from a successful business background, so it was probably a decent paper.  The point here is that many good ideas are shot down at first.  They just need someone to believe in them.  And move them forward.

5. Your Track Record:  If you are reading this, you made it through every tough time you’ve experienced.  You survived whatever it was – a broken relationship, job loss, natural disaster – you survived.

And it made you stronger.

Ingredients For A Great Morning Commute

The average morning commute in the United States is 25 minutes.  Many folks spend that time learning the words to the latest Taylor Swift song, which could now be on either country radio or pop radio.  She’s unescapable.

If you switch from the radio to your smartphone, however, you can instead find lots of value-added options for your commute.  These are opportunities to make you better instead of supporting Taylor Swift’s world domination.

Your smartphone is the pathway.  It can obtain the two main ingredients: the podcast, and the audiobook.

Let’s start with:

1. The Podcast:  The topics for podcasts are more varied than radio stations, and many are recorded in the 25 minute range to fit your commute.  A good chunk of podcasts are intended to be educational and self-improovy-like.  And they work.  If your listen to podcasts on the morning and evening commute for a year, you’ll end up with more “real world” credit hours that you did in a year of college.

Check out I-tunes for a good selection of material.  Some of the top programs are the TEDTalks (look this up if you are not familiar – great learning and motivation stuff), The Daily Show without John Stewart, and Stuff You Should Know.   These and other podcasts will make your brain better, and best of all, you can pick your own coursework.  Now, on to

2. The Audiobook:  To be a normal person, you are supposed to read the book “The Fault In Our Stars” before seeing the movie (both are good FYI).  With the advent and accessibility of the audiobook on your smartphone, you can now say “I sort of read the book first” when your wife asks about it.

Audiobooks are another opportunity to improve yourself during the commute.  Check out some biographies of some folks you admire, or some financial advice via audiobook.  Even the new Tony Robbins finance book is available via audio format.  Again, the choices are more varied than your radio or your college course catalog.

Every once and a while, go back and check your radio.  Taylor Swift will have a new song.  And it will still be good to learn the words.

Two Tricks To Guarantee A Great Presentation

Here’s two easy tricks to help guarantee a great presentation or public speech:

1. Begin With The End In Mind.  During the three days leading up to your speech, do some visualization.  Visualize applause at the end of your speech. Visualize your audience or boss smiling and saying “great job” as you shake hands following your talk.  Really visualize it – just as an athlete would visualize making a great play.

This gets your subconscious working on what it has to do to make the positive feedback happen.  It is a matter of convincing your mind that the speech can only end one way: positively.  Your brain will backtrack the sequence of events from there, and help make you successful.

Of course, you still need to put in the work of preparation and practice.  Videotaping your practice or presenting to a mirror are time proven and still effective ways to improve your speech.

2. Post It Notes: In today’s corporate world, there is a good chance you will be making presentation in a teleconference format, usually using Microsoft Powerpoint.  The telecom format provides the equivalent of an open book test, if you can use the format to your advantage.

First, print out a full size copy of your presentation.  Then, using post-it notes on each page, write down responses to questions you might get on that slide.  Anticipate and write down answers to the tough questions.  Write down key statistics.  Write a couple of key quotes you might need.  Cover half of the page with post it notes if you can.

Then, have your post-it-note covered copy of your presentation ready when you conduct your teleconference.  Now it’s an open book test.

Things That Change Your Social Circle – Fitness, Sobriety, and Starting a New Business

Deciding to make a change in your life can be challenging.

Going through and actually making the change can be far more difficult, because sometimes you have to do it without the support of friends and family.

If you are fortunate, you have chosen a group of friends that will stick with you no matter what.  Through good decisions and bad decisions, they are there.  They like the heart of you, not the behavior of you.

Some people aren’t as skilled at forming good friendships.  They follow in the footsteps of their childhood, which may have been dysfunctional.  Sometimes friends and even family reinforce bad behavior, like drinking or poor health or work addiction.

If you want to quit drinking, for example, it’s going to impact your social circle.  Chances are you were drinking with a group of friends (also drinkers), who are going to be at least puzzled, and at most offended, at your decision to go sober.  Drinking was probably a key link in your friendship in the first place.  People bond when they have something in common – in this case: drinking.

The chances of those friends still inviting you out after you go sober are  low.  Turning down beers and wine eventually gets awkward, and offering to be designated driver may not even work.  These people are still good people.  They just don’t have a need for sobriety.

The same distance can form if you decide to get healthy and lose weight.  People can bond over food just as they do over drinks.  If you decide to go for salad instead of cheesecake, it creates distance.  People don’t like to eat cheesecake next to someone eating salad.  It can take the fun out of it for them.  You may notice less invitations to lunch as you start to improve your health.  If you are lucky, some friends will follow you on the path to health.  If so, these will be good friends.

Starting a business can be another friend-changing experience.  Before choosing this path, there’s a good chance your friends were made up of non-business owners.  To make the leap to entrepreneur, you’ll need to network with other entrepreneurs.  This can again cause some distance from your old friends.  This could be for the best, because your current group may be uncomfortable with your decision to branch out.  Some of them may even want to see you fail.  That way, you’re just like them.

This is especially true in large corporations.  In some of companies, you can’t even mention having a side gig.  Your life is supposed to be devoted to the corporation only and forever.  Self improvement in the entrepreneurial fashion is frowned upon, and can cause some distance.

Eventually leaving a job will change your social circle, too.  Just like quitting drinking will shed your drinking buddies, quitting your job will shed your work buddies.  The main thing you had in common is gone.

Making a big life change can be challenging and unfamiliar.  But, you will find it to be friendly and accepting.  Your destination, whether it’s sobriety, health, business ownership, or some other big change, will be full of new friends that better fit and support the you.  Just be aware that big changes may mean leaving some things behind.

5 Books To Build Your Future

I was a single parent with 40 cents to my name when I figured out I had to do something different.  I didn’t have any mentors or family to guide me, but I did have access to books.

Without books, I’m not sure what might have happened.

I went from days away from being homeless, to being an executive at a top 50 Fortune 500 company, largely due to the following five books.  I hope they provide the same lighting for your success:

1. The Dark Side Of The Light Chasers, by Debbie Ford.  This book will produce a huge transformation if you complete the exercises.  Do not rush through and read to the back of the book.  It is important to complete each step.  Reading this book taught me to accept all parts of myself, and I’ve had a great relationship with myself ever since.

2. The Millionaire Next Door, by Thomas Stanley and William Danko.  I found this book because someone left it behind in an airplane.  I am so thankful that I found it early in my adult life.  This books teaches you that wealth is built only by living beneath your means.  Think about it: if Donald Trump spent more money than he made, he would be broke.  “Millionaire” also teaches you to work for the best deal, and the value of education.

3. London, by DK Eyewitness Travel Guides.  Eventually, my corporate career took me on an international path.  Too bad I was terrified of international travel, having never made it much outside of the Midwest U.S.  This book taught me the world had a ton to offer and explore.  This book opened up my mind, and my career. I bought several more travel books from DK as I progressed.

4. Rich Dad Poor Dad, by Robert Kiyosaki.  I read this one a few years after “Millionaire”, at which point I had some money to work with.  This book teaches you to buy only assets, and the truth about home ownership and what it does to your cash flow.  I recommend reading “Millionaire” and “Rich Dad” in that order.

5. Choose Yourself, by James Altucher.  This was one of the first digital books I ever read, and perhaps the most powerful.  It is equal doses of hard truth, hope, and motivation.  While you read it, your gut will be whispering “I told you so”, as it tells the truth about today’s corporations.  The rules are different now, but the odds are stacked in your favor if you are willing to put forth some effort for Yourself.  This book is an essential current-day read.

The Easiest Path To Passive Income

It’s the dream of most employees to one day develop some sort of passive income.  Some way to earn money while sleeping, without much effort.

There are a few ways to do this.  Online businesses, independent publishing, and some other ways that don’t require much down payment, other than a person’s time, effort, blood, sweat, and tears.

However, there’s one simple opportunity that everyone has to gain passive income, and it’s happening right now.  Even in your sleep.

The opportunity lies in your monthly bills.

This includes your internet bill, cell phone bill, car insurance premium, cable TV bill, and gym membership.  All of these are automatically debiting from your checking account each month, even while you sleep.

If you can renegotiate your terms for these services – in other words, reduce the price you are paying – you are achieving the same positive effect to your cash flow as passive income.

If you are not already doing so, make it a habit to check with your service providers every 90 days to see if there is a better deal.  Be sure to talk to a real person.  Do not use the “online chat”, or send an e-mail.  It is far too easy for the company to say “no” to your requests in an electronic format.  Talking to a real person will open up the conversation.

Keep the customer service representative talking.  It will open up alternatives.

Some examples they might offer will include:

1. Use of paperless billing.  This can cut your bill in half in some cases.  If you still gets bills in the mail, check this one out now.

2. Increasing your deductible.  Maxing out your car insurance deductible can bring your premium down significantly.

3. Bundling.  Be careful with this one, and ask lots of questions.  Bundling your services may require you to reset your contract terms, and you may be signed up for a fresh two years on everything.  But, it can result in significant savings.

At the same 90 day interval, also shop around for prices from other service providers.  You may find that State Farm offers better car insurance premiums than Geico, or vise versa.  Gym membership rates can move around quite a bit also.  Cable TV can be more challenging to move around, but take heart: with your iPad or tablet, you may not need cable TV much longer.

Also note there are no real set rates at a gym or fitness facility.  The monthly fee is different for everyone in there.  Always be checking on these places.

A last resort, but often effective method is “the walkaway”.  If your conversation with the service provider does not lead to a better deal, you can start asking about cancellation of the service.  There’s no need to be boisterous or threatening about it, but calmly start the conversation.  It can often lead to new offers of lower prices.

These service providers want to keep thier passive income as well.  For them, a reduced rate customer is better than no customer at all.