Career Clinic #3: $25 Give Away

It has been a few weeks since I last ran a career clinic, and it is my pleasure to use this opportunity for the first ever Money and Such giveaway. I am hereby announcing a $25 cash prize giveaway. Here are the rules -

To participate in the contest, leave a one line comment on this post - no more than 10 words - by 5:00 PM Pacific Time on June 21, 2009. Your comment needs to include a useful piece of career advice. The winner will be determined by random drawing, and will be announced on Monday, June 22 on this blog. The winner must then contact me within 3 days. If the winner does not contact me, I will select and announce a new winner. The prize will be paid using PayPal.

Late addition: per reader questions, only one entry per person please. Also, please make sure there is a way for me to contact you - if you have your own blog and your contact info is on your blog, that should be fine, if not, please leave an e-mail address with your comment. Something like "shadox1 at the domain name google dot com" should be good enough to avoid spammers.

By the way, if you leave a comment, your chances of success are probably pretty high, given that I don't think I have ever received more than a dozen comments on any post I wrote here. I do hope to break that record...

To start things off, here is my own one line piece of career advice:

Careers can last for decades, build yours patiently.

And now, here are a few good career related posts that I noticed over the past week.

The Simple Dollar looked at the basic building blocks of a career. It's an excellent post and I couldn't agree more. I will take the article a step further - contrary to Trent's position in the post, pretty much everything you do is another "brick" in your career wall - it's just a matter of finding out how to apply what you are doing day to day to your career story. I am wondering if Trent was thinking of Pink Floyd when he wrote that post.

Julie of Wise Bread explains how online job boards can be used effectively. Here's is my suggestion: find a posting online, and then instead of applying on the site, find a way to get introduced to the hiring manager through a mutual connection. LinkedIn is my favorite method for getting that introduction.

Mrs. Micah offers advice for freelancers on how to charge customers for tasks that seem simple. Her point: you should charge your customers based on the value that you create, not the amount of time you spend doing the work. I am reminded of a story about a patient that complained to his dentist that he was being charged hundreds of dollars for having a tooth removed - a task that took only minutes. The dentist responded that if the patient preferred, the dentist could achieve the same result over several hours... it's all about the end result...

Free Money Finance talks about 20 things that you can do to nail an interview. It's a good list, but personally, I am not a big believer in thank you notes. Never read or responded to one that was sent to me. Of course, it could be that I am an exception. Probably couldn't hurt.

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The Reward of Diligent Investing

This bear market has been brutal, but those of us who have continued to invest through the worst of the market have been seeing some pretty impressive gains. I am glad to report that we fall into this category.

Yesterday I did my usual Quicken review of our portfolio and was happy do discover that my 401K is now at break even point. I joined my company in March 2008 and joined the 401K plan in May (I still maxed out my contributions for the year, don't worry). While my early stock investments in the plan are still down about thirty percent, the positions that have been purchased since November are all now above water. The combined result is break even.

I have written repeatedly about the fact that we have been putting more money into the stock market on a monthly basis throughout the crisis. My review of the portfolio revealed, for example, that a position we purchased in Vanguard's Total International Stock Index fund in March is now 38% above it's purchase price. Naturally, our portfolio as a whole is still very much down and will likely take years to recover, however the stock positions that we have been buying through the worst of the downturn are helping our overall portfolio to recover much faster.

Incidentally, I have now stopped our monthly mutual fund purchases (with the exception of my 401K contributions). For one, I feel that the stock market has been rising too quickly over the past couple of months. I don't think it's as huge a bargain as it was just a few months ago. I do believe that we are going into a recovery and that the stock market rally is for real, however I think that the current rally may be a bit over done in the short term. If this sounds a bit like market timing, you may be on to something, but the current aggressive skywards move makes me really nervous and I am going with my gut. I prefer to buy stocks on the way down... Another reason for my halting our new purchases is that I would like to keep a larger cash position on hand. I think we may be getting to the point where buying a house is something we would want to entertain, and if that is the case, I would like to have the cash to move forward while limiting our dependence on the short term performance of the stock market.

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Your #1 Career Tool

This may be a bit of a cliche, but it also happens to be completely true. Your ability to communicate is your #1 career tool. And no, I am not talking about that throw-away phrase people often put on their resumes or include in job descriptions: "excellent communicator" - that phrase has no real meaning. I am talking about specific skills and abilities that together mean that you are able to get your point across and get others to deliver what you need.

Work place communications are comprised of several sub-categories. I am not going to talk about all of them in one short blog post, but let me highlight a few of the important ones for you.

Learn to Speak in Public - Being able to speak well in front of a crowd is a vital skill for anyone who wants to develop their career beyond the realm of their own private cubicle. I am not just talking about giving speeches and presentations at professional conferences, I am also talking about delivering a coherent and well presented proposal to a room full of your colleagues, and a range of situations between those two extremes.

I don't frequently experience stage fright, and while it would be inaccurate to say that I am completely immune to it, it is not something that I feel acutely. However, I have seen many others get tongue tied, flustered or simply ramble on incessantly when they are placed in front of a live audience. Not good.

I am not going to go into an entire lecture here about how to be an effective public speaker, but I will say this: if it doesn't come naturally to you, then it's all about the practice. If you are uncomfortable speaking in front of people I would strongly recommend taking that challenge head on. Joining Toastmasters could be a good place to start.

Make Judicious Use of E-mail - a frequent method of modern corporate communications, e-mail is one of the most abused tools known to mankind. There are two pieces of personal philosophy I would like to share regarding e-mail: first, if you have any doubt don't send the damn e-mail. If you constantly hit the "reply all" button (which should be banned, by the way), you are not a good communicator, regardless of the content of your e-mail. Also, becoming a corporate spammer is not a good strategy for getting your point across. Send fewer e-mails and make them count. Second, get to the point. Corporate communications is not about showing everyone what a hard worker you are or how good a writer you are, it's about getting people the information that they need and doing so fast. Think about that before you hit the send button.

Give the Information that is Requested - you know how when you ask some people what time it is, they explain the history of watchmaking? There are three specific individuals in my company that fall into this category. One of them is a senior executive. Folks, this is not helpful. Here is my suggestion: if you are asked a yes or no question, the first word that should come out of your mouth is EITHER a "yes" OR a "no". If you then want to add more information, do so parsimoniously. If you are asked an open ended question, start with the basics. I may ask follow-on questions if I need more information, but don't force feed me raw data please. It's not helpful.

Make a Personal Connection - by far the most important type of business world communications are personal interactions. Whether you are holding a face to face discussion with your boss, or you are delivering a performance review to one of your team members, it's all about making a personal connection. In this type of setting there is one rule that I hold above all else: sincerity. There is nothing worse than coming off as phony.

Each one of these could be - and actually is - the subject of many books and articles, and perhaps I will tackle some of these in more detail at a later date, but for now this will do. Short and sweet.

On an unrelated note, later this week I will announce the first give-away / competition in Money and Such history. It will be career related, and I think it will be fun. Stay tuned.

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Productivity & the Financial Industry

Last night I watched a recorded episode of Real Time with Bill Maher and I heard a casually tossed comment that I hear all too many times these days. I am paraphrasing here, but Maher's position was that the financial industry is not productive - it doesn't create anything - it simply moves money around. Shuffling papers, if you will. To be honest, I think that this statement says more about Maher's ignorance than it does about the financial industry. However, let me go on the record with my own position on the subject.

The Crucial Role of the Financial Industry - ready? Here it is. The financial industry fills a critical and highly productive role in a capitalist economy: that role is resource allocation. Banks and other financial institutions may not build houses or churn out new cars, ships or jets, but they are the ones who allocate resources to all other industries. They are the ones that look at countless project proposals and decide whether or not each of these projects is worth the financial risk. In fact, financial institutions are the beating heart of capitalism. They are the crucial link between those who have money and those who need to borrow it.

Now, that's not to say that the financial sector did not grow overly large and bloated, and this has nothing to do with whether some insanely bad decisions were made (enough bad decisions were made to power a mid-sized African country for 300 years), all I am saying is that a healthy financial industry is vital to capitalism and anyone that doesn't recognize that simple truth needs to augment their financial and economic education.

Here are a few posts about the economy from other members of the PF community:

GenX Finance talks about how senseless it is to wait for things to get back to normal.

Consumerism Commentary explains what the GM bankruptcy means for you. For me it just means that the government is throwing yet another $30B of tax payer dollars at a company that should probably go extinct.

My Wealth Builder talks about government assistance as the new welfare program. Right on. See my point above.

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Financial Plan & Wishes: Birthday Edition

Yesterday was my 38th birthday, and that gives me a good opportunity to take stock of our financial position and to talk a bit about my birthday financial wish list. So where are we financially? Well, our financial position is sound. Nothing spectacular, but we are certainly on the right track:

Income: Our primary source of income is my job as an executive at a venture backed start-up. Until last week my wife had a part time marketing job with a different tech-company, but that is now over, and she is looking for the next opportunity. My job is secure for the most part, however my company is not itself a very stable organization. It will need to raise more money by the end of the year in order to survive. I am very optimistic that this will happen, but there are no guarantees.

Spending: Every month we make more than we spend, although with my wife's part time contract coming to an end last week, that may be tough to stick to for the next few month, until she finds a new position. For the time being we are not going to cut down on our expenses, although if things really get bad, we can always pull our three kids out of day care. This will reduce our expenses by 30% at a stroke... we live a very modest lifestyle, living in a rented townhouse and driving modest (read: old) cars. Our spending level is sustainable.

Savings: our savings are in surprisingly good shape. The stock market meltdown hurt like a bitch, but as of last week our net worth was down only 13% or so from its peak. Put that down to a well diversified portfolio which did not exceed our risk tolerance. This allowed me to stand my ground in the face of market losses and to increase our stock positions again starting last summer. Many of these purchases are still under water, but some are already showing impressive gains. Over the long run, I think that the market positions we have taken over the last 12 months will be some of the best investments we will ever make.

Debt: we have none. Nor do we ever plan to have any, unless we decide to buy a house and need a mortgage. I believe in self-financing anything you want to buy. "If you can't pay for it, don't buy it" is my motto.

I think we are in good shape financially.

My birthday personal finance wishes:

Retirement: I hope to retire in about 20 years - that will make me 58 years young. I can see a couple of scenarios for achieving this goal, although I will be honest and say that these are not fully baked. The most likely option is that my wife and I both work for the next couple of decades, we diligently save as much money as we can, we invest our savings and at the end of that period have enough to at least semi retire - i.e. hopefully I will be able to work a couple of days a week in consulting or advisory roles. The other possibility is the "Lottery" option. My wife and I both work in the high-tech industry. All it would take is for one of the companies we work for to go public or to be acquired for a substantial amount, and our stock options would be worth a sizable amount of money. It's possible, but we're not counting on it.

Career: my career is by far our biggest financial asset right now. Since my wife has been working part time (6 months or so) my salary has accounted for about 75% of our gross income. Hopefully, this will come back into balance as my wife finds a full time job. Regardless, I am an ambitious guy - for me it's not just about the salary - it's about getting to the top and about being the best at what I do. One day, I would like to be CEO of a tech firm - call it 5 to 10 years from today.

Stability: as my 38th birthday comes to a close, one of my biggest financial wishes is for... boredom. I hope our financial lives move forward without too much drama. I hope I never have to report any major upheavals in our economic condition on this blog. Let there just be a slow, steady and diligent progression towards financial independence.

Happy birthday to me...

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