re-engineering your thinking


I spend a lot of time working on business process re-engineering (famously promoted in Keith Ferrazi’s “Never Eat Alone,” a great book), or business process management, or whatever you want to call it these days. If you aren’t familiar with it, I’ll define it this way:  you take a company organized along function lines – accounting, sales, distribution, and so on.  You take that company and reorganize it by process:  the process of selling, accounting for and distributing a particular product is studied and roadblocks to efficiency are removed.  So instead of spending management time worrying about the accounting department’s systems, you spend management time making sure a product “moves” through the process of production, sales and accounting to a customer.    To me, it’s like organizing all of the food you need to make a meal so that you can prepare it quickly and well, rather than buying a new stove to cook it faster.

Most people think of their lives as independent little blocks:  health, money, career, family, kids, friends, fun, etc.  We try to focus on one area.  Let’s think about some of the written-in-stone truisms of personal finance:

  • I need to save for retirement!
  • I need to be more frugal to save more money!
  • I need to invest in the market because people who stay out of the market are missing out on the 7% returns we know as gospel, because the market always does well!

A lot of time is spent on the function of making money. Save.  Be frugal.  Invest. All good ideas, but let’s face it:  if you save money and you’re frugal and you’re investing, you may increase your net worth a bit, but to what end?  You have increased your personal system’s ability to put money in your pocket, but the process of making money can still be broken.  Why save?  Why be frugal?  You may bake your own bread, for example, but why?  Financial freedom?  I thought I wanted that for a long time, but as time has gone by and I’ve thought more about money, I’ve realized that wanting financial freedom is somewhat meaningless.  You have to think more about how you make money (or manage your health, or career, and so on) in relation to your whole life.  Or, to put it more simply, freedom from what?

Why save for retirement? Should you save money on food, or medical care or on things that make life more enjoyable (and less stressful) to ‘save for retirement?’  Which one of those three jumped out?  Saving money on medical care can make sense to a certain extent but you don’t want to economize in that area if you want your retirement to be enjoyable.  I’d rather work a little longer and have extra money for dental care, or routine exams.  Think about the process:  living a happy healthy life until you are old involves more than just accumulating money.

These days I’m trying to think more and more about how to spend money in meaningful ways, and how to make my career meet my goals instead of trying to make my goals fit my already-developed career. You want free time?  Don’t be an employee or a small business owner:  those are time suck careers.  Be a consultant or an entrepreneur with a franchise-model system (read the E-Myth Revisited if you don’t know what I mean).  Want to retire early?  Answer two questions first:  (1) is it really necessary to achieve what you want, and (2) is it just the work you hate or are you hoping for a different life in retirement?  Are you hoping free time gives you the answers?  It won’t.

If you pick up a financial magazine, they’ll tell you whether to get a Roth or a traditional IRA, and they’ll tell you why you need $1.8 mil socked away by age 56 to retire early.  What they won’t tell you is that – if you look deep inside yourself – your idea of sailing the world might actually bore you to death when you do it at age 57, and maybe you would have enjoyed fishing with your kids a few weekends and working until 62 instead. Focusing on the end game all the time can be frustrating, demoralizing and ultimately self-defeating.  Learning to enjoy the process is a better way to spend your money, time and effort.

photo by toolfan.hess

the art of the business trip


I just returned from my first business trip in almost four years. I thought I might rediscover the art of the business trip. But the art is gone.  It changed a lot post-9/11.  I was around to see that transformation – the relaxed and woefully security free trips became long and painful waits in endless security lines.  Remember how you used to be able to go to the gates without a ticket to meet people?  But what I hadn’t experienced yet was travel during the Great Recession. What little comfort there might have been for a middle manager or a consultant like myself is a thing of the past.  Business class?  Don’t be ridiculous. Meals on the plane, or even decent snacks?  Not on these flights. Water? Endangered. Any sense of adventure or anticipation? Gone.  Worth it?  Not in my book.

Business travel remains a mystery to me. I have access to video conferencing, scanning, faxes, web conferencing and even collaborative online work environments like Google Docs. Why I need to go somewhere to accomplish my work comes down to a simple factor – the idea that somehow I benefit from peering into the eyes, the windows of the soul, of my clients (or maybe they benefit from peering into my bleary, red, post-airplane eyeballs). Does pressing flesh and sharing oxygen increase the value of professional work? I would be willing to bet that outside of sales or related functions, that’s a flimsy proposition. If you applied a cost benefit analysis to business travel – considering the airfare, hotel, cars, meals, and the simple loss of efficiency from tired, jet-lagged workers – you’d find a small benefit, if any.

Yet it continues. Shoes off, frequent flyer cards out, business travelers continue to move from one state to another for knowledge work. Physical presence can only be justified if somehow it facilitates human connection. People feel less intimidated by the auditor – or perhaps MORE – if the auditor appears on-site. Maybe in my line of work my physical presence is helpful in that it raises the level of fear, or respect, or builds trust.  I know that I do a good job of putting people at ease; I’ve been doing this job long enough I know how to crack a joke and calm some nerves.  In my opinion, though, it’s not a good enough reason to haul myself across country.

But as I departed on this business trip, I was at least a bit curious to see what travel is like after the end of the cushy years. I was accustomed to traveling business class, staying in higher-end hotels and cruising through airports via lounges and expedited security lanes.  Even after 9-11, the idea was that if you were traveling heavily, you’d benefit from the perks because then (a) you might be more productive in-transit and (b) you wouldn’t quit the job so damn fast if they made sure you stayed fat and happy with nice dinners at high-class restaurants and threw in a company-paid dirty martini or two.   I would haul out a computer in business class from time to time and catch up on work, sure.  Can you do that in coach?  Much tougher.

I am a good example of someone who got spoiled by the good times. I am ruined for the new days of frugal air travel.  Those good times are never coming back, I suspect.  For a certain level of professional, the good times are still there, but in these days when even Fortune 500 execs are being shamed into traveling with the commoners like me (and rightfully so), the art of the business trip lies mostly in the ability to avoid it.

photo by Idle Type

use Your Citi Card for $5 tickets to blink-182 and some other cool music

I don’t know if I’ve ever made it very obvious, but I’m a big fan of the goth-rock group The Cure (yes, I was, and yes, I am, stop judging me!) and more specifically of the lead singer, Robert Smith. I’ve also always liked blink-182’s music, and when I heard the blink-182 duet with Robert Smith I decided that blink-182 could move into the “approved by the Cure and therefore by me” category.  Citi and Live Nation are offering some good deals for concerts – including blink-182 and a few other great groups – this year. Throughout July and August, Citi credit and debit cardmembers have access to $5 Lawn Tickets to tours like blink-182, Crue Fest 2 (another favorite of mine – back in high school I loved AC/DC and Motley Crue), and Nickelback, among others. Starting today, cardmembers can visit to get a special access code that will allow them to view information and purchase tickets to all participating $5 Lawn Ticket concerts.

linklings, wanna be in the roundup? edition

I had a few things to say about health care, and the climate in the US this week, and about the state of the NFL’s Michael Vick.  I wrote them all, deleted them all, and instead decided to share some music I like.  Hope you like it, too.  If not, hope you enjoy the links.  By the way, when I’m putting together link roundups I usually ask for contributions on Twitter. Follow me and you could end up included in the next linklings!

Why Bail From Success?

By Curmudgeon


In the first installment of this series, I noted that I am approaching the 30 year point in my career, and certainly have a mixed track record in the many and varied jobs that I’ve held.  In my last post, I focused on my failures.

Today I’d like to talk about success, those jobs at which I have been damned good. I’m in one of them now, which is largely a good thing, given that comparable jobs are likely to be difficult to find in today’s environment.

What makes me damned good at these jobs? In at least one case, one of my successes was very similar work to one of my failures, so while my effort (or lack of such) may have been a factor, it doesn’t seem to be an overriding one.

Like I did when I described my failures, the corporate culture has a lot to do with it. I joined this company just over a year ago, and had a couple of colleagues that I had known from years past who were able to clue me in.  And I had a new colleague who unexpectedly helped make me more comfortable in developing my role.

But I was also able to define my role expansively. Not all companies let you do that; in some cases, departments and individuals jealously guard their turf.  There were plenty of things to do, and in general not enough people to do them.  So I pitched in.  That accomplishes two things.  First, I gained more experience in the business as a whole, and was able to better integrate my core activities into the business goals.  Second, it made me known to others in the organization, outside of my niche, and let me develop a network of people who knew me and knew my work.  We would trade favors, getting work done without having to use the ubiquitous chain of command.

The natural question is why did I ever leave such jobs? In most cases, I was paid well, worked in a decent environment, and most important was highly thought of.  In most cases, that led to one or more promotions and significant pay raises.

The circumstances are different in each case. In one, the schedule was undemanding, but normally required working in the afternoon and evening.  After I got married, such a schedule proved to be unworkable with my home life.

In a second, the handwriting was on the wall for the office I worked in for years before it was actually closed. Resources were being devoted elsewhere in the company, and our business was in decline.

The important point about all of these circumstances is that things change. Your life changes, or the company changes.  We can’t expect everything to stay the same over the course of years, let alone an entire career.  If we’re already in a great situation for our skills and personality, chances are that those changes will be for the worse.

If you can engage in your job, and reach beyond what you were hired to do, you are likely to be considered a high performer.  Don’t let that go to your head (the subject of the next post in this series).  Your needs, or your employer’s needs, will change over time. Instead, use the opportunity to broaden your skills and your network, and to think about what might be next.

And recognize the potential costs of that engagement and subsequent effort.  You may be working many extra hours, perhaps out of enthusiasm or a sense of accomplishment, and giving up your personal life.  You may associate your own self-worth with that job, and when it goes away (it will someday), it may perhaps take that part of you with it.

I speak of obsession. You can do a fine job without being obsessed with it.  Knowing when you have done what you can is perhaps the most difficult skill to learn, but if you want to be damned good at your job, you must master it.  Otherwise, long term success with remain an elusive goal.

Photo by AlphaTangoBravo / Adam Baker

how much emergency fund is enough?


The term “emergency fund” is misleading.  Is a new tire for the car an emergency?  Is a new TV, when your last good one dies?  Most of us have a good idea what an emergency means when we consider the extreme case:  a sick child, a roof with a gigantic hole allowing the rain to come in, a car that won’t start.  When you get to the more “iffy” emergencies it gets a bit tougher.  Is it an emergency when you need a new dryer?  I mean, you COULD hang clothes out to dry for a while.

I’ve read many times that you should have $1000 in an emergency fund, or that you should establish a three month or six month or eight month emergency fund before investing. Should you start thinking about Roths versus traditional IRAs as soon as you have $1000 in an emergency fund?  Should you even be thinking about paying down your credit card debt that quickly?

We just went through seven months of a “zero-income” household, although we did have a few sources of alternative income.  Neither my wife nor I were working jobs or earning money in our fields, and although we had to tighten our belts to a small extent, we were able to live more or less normally the entire time.  Why?  Because we had an enormous “emergency fund”, equal to more than a year of expenses.

I know there are people who can live on the razor’s edge, dancing around on margin and leveraging their next income-generating venture. If you’re that type of person, more power to you.  I’m not.  I’ve been able to rest easy and take my “mini-retirement” thanks to saving whenever we could in our emergency fund.  It’s a lifestyle choice, but I’d argue that if you’re the type of person who gets nervous when the money runs out, you’re better off having an adequate stash laid by when times are good.  When times are bad, you won’t be sorry you have enough – or even more than enough – saved up.

The argument against this might be that you can’t build wealth by keeping your money in cash (or “almost cash”). You need to put that money to work.  True – but nothing is more of an impediment to building wealth than hitting a hard patch that causes you to go back into debt.  In this economy it can happen quickly, and the length of time without income can be extensive.  Nothing would derail your future prosperity worse than going into debt during a sudden but protracted unemployment.

So think twice before accepting the idea that a three-month or six-month emergency fund is enough. It’s never really enough. I’d love to have a three or four YEAR emergency fund.  Cash in the bank is, well, cash in the bank.

photo by Paul Keleher

what a week at work feels like


Having just returned to a contract consulting position after seven months “in transition” (as the career coaches might say) I’m struck by how nothing has changed. In my case the locale is different – Florida, not Manhattan – and the timing has meant a lot (when I was last working, George Bush was still lame ducking to retirement). But I’m still working, more or less, in the financial services industry. I’m still doing contract consulting. I’m still in a cube, drinking the free coffee and cursing Word 2007.

Corporate employees are an oddly stressed but relaxed bunch. Stressed because they feel the need to create the appearance of great activity, stress and therefore accomplishment. Relaxed because they don’t want to finish TOO much, TOO fast. They know they need to put the face time in to stay past the boss’s departure. They get some perks – free coffee, for example. A lot of adult companionship, too; maybe not the friends you would choose in the normal course of events, but still people of similar backgrounds and ambition.

I was nervous for the first 30 minutes that maybe over my long break my mind had turned to jelly, but it hadn’t. I can still do all the work AND stare out the window AND calculate how many days until I can retire on a spreadsheet. The work, like most contract consulting work I’ve done, is a mix of the mundane, the boring and the challenging. Mundane and boring are self-explanatory: if you have staff and a consultant, the consultant will get the less interesting work. Staff need to develop. The challenging work mainly arises from the assumption that I know more about the industry and the company than I do.  That can actually be interesting, learning about a company on a rapid basis.  As an auditor, you’re expected to understand the company well enough to question someone who’s worked there forever.  It’s not easy spending a few hours boning up on a subject then interrogating someone who’s been working on that subject for 20 years.  But at least it’s not boring.

So nothing changed. I have a different attitude towards contract consulting now.  It helps me keep a “professional career” active, which is useful in securing mortgages, meeting people and establishing a network in a new city.  It doesn’t have to be 100% of my work life, but it’s the part that can generate big chunks of cash in short order.  If I can handle health care – and I’ll be writing about that more over the next month – contract consulting could be a nice way to dip in and out of mini-retirements, a la the “fourty” hour workweek.  So while I’m staring out the window at the tree, I”m trying to imagine the end of the contract, and another couple of months on the beach.

photo by jacreative

how much is that tree out the window?

Over the course of the past 15 years I’ve worked in a variety of physical environments.
I’ve worked in the offices of a fashion conglomerate (think glitzy and Carrie-Parker-ish), major financial institutions (grim, serious places), factories, office parks, high-rises… you name it.  Since my work is project based, I tend to work in the offices of clients more than in my own.  Since 2005 I haven’t even HAD my own office.  I camp out 100% of the time at clients.  The settings are sometimes grim (windowless industrial lighting) and sometimes stunning (a beautiful penthouse office in the center of Buenos Aires).  Much of the time they are somewhere in between.

If you work in a corporate environment, a window is considered a real perk.
In cubicle farms, only the lucky worker assigned to a cubicle up against a wall of windows gets this perk – often by accident.  In most office layouts, cubicle dwellers may even be the only people with a chance of a window view – many middle managers’ offices are interior offices.  Promoted to the windowless office – hurrah.

At my latest client – my first in Florida – I’m lucky to have a view of trees and a boardwalk along a riverside.
I’m sitting in a cube that gives me what most people would consider a solid view.  It’s only a fluke of fate – I happened to start on a day when another contractor had just left, so I got the unoccupied cube.   I spent most of 2008 in a windowless room, shared with dozens of other consultants and lit by fluorescent lights.  The view is better, without a doubt.

But what is that view of trees worth? And what does it mean when that view is so highly prized?  Does it carry a price?  I have noticed in two days back in a corporate office that my back once again hurts, I started coughing from the spaceship-like recycled air and my eyes have taken on a pinkish sheen.  Ever since I moved to the Northeast, I had suffered from dry skin and weak lungs.  A month in Florida had fixed that, making my skin and lungs feel as good as they had in years.  I thought it was the harsh climate up north, but maybe it wasn’t.  Maybe it was life amongst the cubicles.

I know it can be tiring for people who feel stuck in ‘wage world’ to hear people who’ve left corporate life drone on about the benefits of ‘going it alone.’ It’s tough to leave a corporate wage behind.  Knowing you can make all that money makes stepping away from it tough.  For me, so far, it’s impossible.  I’m not an employee anymore, but I still dip back in from time to time for another go at the trough.  But I can tell you:  even though I haven’t worked in seven months, as soon as I finish my current contract I’ll take off more time.  The mental and physical strains of cubicle world are stunning.  You may not notice.  You may be used to those strains.  I was – I assumed it was normal to have a sore back, a mild but persistent cough and tired eyes all the time.  I learned this year, staying at home, that this is NOT the normal way to feel.

That tree that you can gaze at all day out the window is worth a lot, but the simple fact is that the you are not looking out the window at that tree, wistfully – that tree is looking IN at you… and it feels bad for you.

Photo by dlco4

You Call This a Career?

By Curmudgeon


This coming fall I celebrate (if that is the right word) 30 years as an adult professional (for an idea of what that means, watch this). In that time I have held eleven jobs, and have been unemployed a total of seven weeks (one of which was intentional).  Of those eleven jobs, I’ve failed at two of them, was no better than mediocre at two, and was good to damned good at seven.  For the last eighteen of those years, I’ve had my own LLC and side business that has brought in anywhere from a few thousand a year to the high five figures.

Is this a typical career today? I have no idea.  But I would like to do several postings for Steve over the coming weeks of some things I’ve learned in the process.

Today I’d like to focus on failure. When I say that I’ve failed at two jobs, I mean that I’ve gotten criticized, demoted, fired, and in one extreme case, sued.

What did I learn from these failures? First, I learned that I can’t predict them.  If I am going to change jobs and go into a new company, even if it’s in a similar role to what I’ve done before, I will always run the risk of failure.  Hopefully it is a small risk, but there are many unknowns.

Is it me or what? That is the seminal question.  Well, certainly it was in some part my doing.  I lacked engagement at the two jobs at which I failed.

Could I have been engaged? That had to be my failure, right?  If I’m getting paid six figures (in one of the cases), my employer has the right to expect immediate engagement and productivity.  Well, I think in both cases there was an institutional aspect that contributed to my failures.

Fundamentally, in both I lacked an awareness of the culture of the organization. For different reasons, both were cultures with which I couldn’t adapt to.  In the first, it was a culture of surprise and attack.  In the second, it was a culture of blame.  I lacked the skills to respond effectively.

I can’t criticize either, and perhaps I am being harsh in my assessment, but it is certainly true that they were organizational cultures that I lacked the ability to adapt and respond to.  Should you wish to avert such a failure, you need to be perceptive to the culture of your company, and whether your own personality is compatible with the way that your employer works.  If not, flee while you can.

I do know that failure can be averted, but you need inside help. In my current job (at which I am damned good), my boss asked me to support the firing of a colleague.  I refused, and instead delivered a strong defense of her work.  Although I didn’t know it at the time, that defense not only saved her job, but also changed the way our senior management perceived her efforts and results.

The moral of that story is to know the people that you work with, their strengths and weaknesses, and more important, what they contribute to your goals. And know what is in their hearts, if you can.  If they can make a difference, go to bat for them.  And maybe hope that in the future someone does so for you.

But in the course of 30 years, make no mistake – you will fail. It’s not a badge of honor, but nor is it a scarlet letter.  If you are reaching, and trying new opportunities, failure is a certainty.  You need to let some time pass, and soberly assess and learn from the lessons.  But more immediately, you need to move on.

Photo by kevindooley

linklings, back on the chain gang edition


I’ve alluded to it a few times, but after more than half a year staying away from corporate consulting I’ve decided to hop back on board. I’m going back to the world of stale coffee, cubicles and Outlook (and no Gmail) once again.  Oddly enough, it wasn’t so much the money as the “street cred.”  What do I mean?  I mean that banks won’t look at you twice when you want a mortgage if you’re a freelancer without a couple of years of steady income.  I’m not unhappy renting – not at all.  But I do want to have options to buy into the Florida market, which is seriously underpriced (and therefore good for buyers), and I don’t want to have to explain how my net worth, large amount of liquid assets and good credit score should be enough to let me buy a house.  I want to have a nice little biweekly check to prove I have a “stable” job with a good company – which is apparently what the banks want to see.   So I’m back in for at least three months for some more consulting.

Returning to the workaday world should be interesting, if nothing else. Having worked in New York for almost 12 years, and not having worked in the south in about 15 years, I’ll be interested to see what corporate life is like.  My guess?  Corporate life is corporate life – hard, strained and full of politics.  I’ll hope I’m wrong, but if I’m right I’ll be glad I’m a consultant and not an employee.

Your Home is Not an Investment – Don’t Treat It Like One: I couldn’t agree more. The idea that the place you live is an investment – let alone the most important one in most people’s portfolios – drives me crazy.  Your home is a place to live, not an investment.  If you profit, great, but don’t let that be a reason to buy it.

When To Give Up A Side Hustle: Frugal Dad doesn’t say so, but I suspect he might be talking a little bit about blogging in response to the reader question. I’ve thought of dumping this blog more than once, especially since the financial returns have slipped during 2009… but I still enjoy writing and reading comments, so I keep at it.  It’s tough sometimes, though.

Taxes Must Go Up Eventually: Taxes will go up. There is no other way the debt will be reduced in the long run. Get ready for it. All of the spending today WILL be paid for, and unlike the happy-go-lucky Laffer curve days, nobody believes it’s going to come from taxes on increased growth.

How we travel to cities for $1000 per person (all inclusive): I was skeptical about the title, too, but these are some good – and detailed – tips on taking an inexpensive (not cheap!) vacation.

Are Depression-Era Values Back in Style?: HIS NAME WAS ROBERT PAULSON! If I notice a post referring to Robert Paulson, I link to it. And yes, I still doubt dumpster-diving is “en vogue” yet, except if you call freecycling dumpster-diving. People (including me) are foolishly prideful about taking other people’s trash. Sometimes I’d like to, though, especially now that I live in a neighborhood full of millionaires.

A few more good links:

And congrats to Madison! Our Baby Girl is Here!

I also participated in Carnival of Personal Finance #212: Independence Day Around the World Edition | Darwin’s Finance

Photo by moriza

blog talk radio with ask mr. credit card

I’m never quite sure where to put these “non-post” posts. I’ll be appearing on Ask Mr. Credit Card’s blogtalkradio program this afternoon at 2 pm eastern US time.  You can listen in (or download it later – there are a lot of options). Information about the program can be found by clicking on this image:


Update:  Here’s the show itself!

getting a job on wall street, circa 2009


I got an email from a fellow alumnus of my university asking for help in finding a position on Wall Street. The first thing I replied was – of course – that I had left New York and now lived in Florida, so his attempt at networking would be virtual instead of meeting in person. My second point was that this was not the time to be finding work in New York as an inexperienced graduate of a small public university in the southeast.

I’ve spent enough time around young people to realize that they dream big. When you are young, you are invincible and old people are pathetic losers. Everything is possible and the only reason you’ll fail is that you haven’t been hitting LinkedIn or Facebook hard enough. Well and good – perhaps that is the truth, and perhaps that may be the way to go in the future.

When I arrived in New York almost 12 years ago, I had the experience and skills to make most companies swoon – an MBA, experience working in the world’s most insane market (Russia) and hardcore Big 4 experience. I didn’t have to network – doors opened up for me without asking. From day one in New York I earned more than I spent – and I spent a lot. But four things happened that changed things forever: 1, the dot com meltdown; 2, Enron (and Sarbanes-Oxley); 3, the real estate market collapse and 4, the end of Wall Street as we knew it.

I always suspected the good times wouldn’t last forever. Money was insane in the late 90s and early 2000s. If you had the basic skills and some half-hearted charisma, you’d go far. When the four crises hit, things went south – you suddenly needed more than to be a well-spoken grad of a southern public university.

Right now you can’t get in with a good firm unless you’re willing to accept a reduced lifestyle. Times are tough. Nobody wants – or needs – to hire a fresh-faced grad at a premium price. Grads are a dime a dozen, and the only people being hired are people who are willing to suck it up now in hopes of a future reward. I wasn’t one of those people. I bailed on the high-cost-of-living, low-quality-of-living lifestyle. Would I have bailed if I was younger, or single? Probably not. New York is the Mecca of single, young American lifestyles. But now I couldn’t think of a single reason to stay.

What could you tell a young person today? Stay in New York at a deflated salary, living in a horrible neighborhood and struggling out a difficult existence in hope of future returns? I probably would. Why not? There’s time enough for the suburbs in the future. But it’s sobering to get an email from a young college grad and realize that for them – today’s grads – the fun times and glory days that some of us had in the dot-com years and shortly thereafter are gone, and gone for good.

Photo by David Paul Ohmer