Today’s Jobs and Economy – Part 5 – Financial Investor

This blog looks at the career option of being a Financial Investor … earning a living from your own financial portfolio.

The initial question is what do you need to make a living as an investor? Short answer … money. If you don’t have a lot of money it’s going to be very difficult to earn a living from the return on your investments … especially if you try to be somewhat conservative to reduce the risk of loss.

But for the sake of this blog let’s say you do have enough money. What’s the key requirement you need in order to be a successful investor? You need to have a great deal of knowledge about the financial markets, how they work, and the skill to work them effectively and efficiently … as well as patience and discipline. I believe most of us have known some people that we felt were skillful real estate investors over the years. But when things changed significantly starting in 2008 in the real estate market their skill couldn’t help them. Many, if not most, lost big time.

The past few years if you wanted to invest in someone’s traditional small business you weren’t considered an investor, you were actually more of a contributor to a losing cause or maybe just being philanthropic. I don’t mean to be negative here, but since late 2008 through 2012 this category was hit hard and harder. Commercial institutions wouldn’t even participate in this category even though they had plenty of cash on hand.

How about the stock market? People do great there, don’t they? A few do, at least from time to time. But I know more people who have lost than won big, especially in the last decade. It’s almost impossible to have guaranteed returns when you’re not in control. And believe me, as an investor you are not in control … neither is your paid financial adviser. Anything can happen. And it can happen quickly … sometimes overnight.

While I know this is going to make this blog longer than I want, I think it would be wise if I share with you a story to illustrate my point. A good friend of mine was living large. They had sold a company and were working as a highly paid consultant. They received an offer from a large client of about 180,000 shares of stock in the company they were consulting for at the time. It was publicly traded on the NASDAQ and was selling for about $46 a share, which meant their value of the stock was over $8-million. They now had a big income and a great portfolio. Life was going great.

They used part of the stock to secure a loan to build a $1.85-million dream house along with all the accouterments that go along with that type purchase. They didn’t sell off any of the stock and diversity because they knew the company was doing great, was in great shape, had a good product, and a strong sales organization. Then something happened … something that was out of their control. Almost overnight the stock went to $36 a share. Turns out a group of investors targeted the company and shorted the stock. In other words, the lower the stock price went, the more money they would make. They thought this was ridiculous because they knew the company was in good shape … so they bought some more shares at $36, using their existing stock as collateral … sure the price would go back up. It went to $31. They bought more shares. It went to $25.50. All of a sudden my friend started getting margin calls, which means that if they didn’t pay immediately, they were going to start selling their shares to cover their losses … which they didn’t have to send.

Unfortunately, the stock continued to go down … all the way to $9 a share … and my friend’s $8.2-million was gone. Zap! All in about ninety days. As I understand it, the stock did eventually come back and the company was taken private for about $65 a share. But my friend wasn’t able to capitalize on it. They were wiped out financially. Kaput!

Could they have been smarter? Absolutely. Did they make mistakes? You bet. But here’s the lesson: If you’re going to be an investor, you have to accept that things may be taken out of your control from time to time. You have to be disciplined enough to set funds aside plus diversify your investments. The set-aside funds should be separate from investments – non-touchable dollars – that are safe from those in the market. And then when that expensive lesson happens you are ready with a safety net.

Just know that earning a living as your own investor with your money is not a good career choice for most of us. Be very careful, know your limitations, and be in control as much as possible.

Next: Creative’s

What are your thoughts or comments on making a living as an investor of your own money?

© Phil Hoffman 2013. All rights reserved

Today’s Jobs and Economy – Part 4 – Private Business Ownership

This blog touches on the option of starting your own business. Now you’ve got the chance to call the shots … be your own boss. Kind of an exciting idea isn’t it? I’ve learned a lot from others and from my own experience in this area and believe it’s best if I break this into a few different perspectives.

First, in the traditional business ownership scenario, they usually use their own money … life savings, take on debt, and many either borrow money from friends and family or include them as partners in order to get started.

Second, in many instances they take on additional debt through signing leases (offices, buildings, trucks/cars, etc.) and giving personal guarantees.

Third, once they get up and running they find themselves focusing on a myriad of matters of importance instead of focusing on what they have been good at (such as sales or operations) … all of a sudden they have to be all things to all people. They have to address local issues, legal matters, accountants for financial matters, negotiator for purchasing matters (or at least approve all transactions), serve as babysitter for some employee matters, and a collection agency for your accounts receivable matters. Sometimes you will find you are carrying out the garbage, cleaning areas, etc. Seems as if they find themselves doing everything except what they were good at in the first place.

Fourth … all of a sudden they realize they’re in a struggle. Instead of owning the business it seems like the business owns them … 24/7. They have to follow up on everything … be the first in and the last to leave. Then after everyone is paid they are wondering if there is going to be enough money left to pay their own bills, let alone reduce the debts they have incurred to start the business.

Finally, they either succeed or fail over a period of time. The bank, who was willing to be so helpful at the start is suddenly having to deal with “new issues” that have come up due to the economy (or their new policies or ownership, etc.) since you submitted your business plan and worked out your agreements. All of a sudden, what was agreed upfront doesn’t matter … they need to “re-evaluate” everything, and even though you may be meeting the agreed terms and governances. This means based on their input … not your input or experience. If you are being successful and don’t need their money or have other options for money this won’t be a problem. But if not, your position of negotiation has changed and they begin mentioning people whom you have never met before who seem to have more power and authority than you. In essence at some point in this journey the business is either successful, or they fail … many times forcing them to file for bankruptcy and falling back to a corporate or sales job.

Whoa … that doesn’t sound to romantic does it? My suggestion is that if you haven’t started your own business before, ask several friends who have … and be sure and talk to someone who has failed and listen to their input carefully … this is real life stuff. I promise you they didn’t start out thinking there was any chance of failure or they wouldn’t have done it. I believe you will find this description is more accurate than you may imagine. Many people who start their own business aren’t worried about getting a good return on their investment … all of a sudden they just want a return OF their investment … or even to get out whole. The last five years the economy has taken a hard and severe blow on many businesses … and not all are startups. Just be sure you go in with your eyes wide open, that you have done thorough reseach, and you have plenty of cash available.

Next: Financial Investor … earn a living from your investments.

What are your thoughts and comments on owning your own company?

© Phil Hoffman 2013. All rights reserved

Today’s Jobs and Economy – Part 3 – Sales

In this part I am covering Sales ….

Sales

There are those that want to be more independent than the blue-collar or white-collar workers. Their goal is to be paid for their own production instead of by the hour or on a salary basis whereby they work you all the hours they can over 40 hours for the same salary.

This is a more adventurous approach but carries a lot of stress and requires strong self-confidence to be successful. Most truly successful sales people had a good mentor or coach who helped them see the advantages of sales and what it takes to be a winner.  I’ve know a lot of salespeople and my experience is that the typical salesperson has a time early in their sales career where everything will go perfect … everything they touch seems to turn to gold and they make some really good money.

As soon as this happens, they decide to set their lifestyle at that level of income. They buy a new house, get new cars, put their kids in the best schools, and maybe purchase a vacation home … a new lifestyle. Everything is going great … for a while. And then, something changes.

The home office changes the compensation plan, changes their territory, a new competitor surfaces, new company ownership or a new boss … or both, they lose their best customer, the economy goes into a recession, the new technology makes their situation less lucrative or less valuable … or government  regulations change their industry … or their customer’s industry. These are just some of the possible changes. There are many more reasons why the salesperson’s world could – and probably will – change their situation where there income is affected.

When some of these things happen – along with the new big lifestyle they started – now forty hours or two nights a week out on the road a week isn’t enough to pay the bills … so they go to fifty hours a week … then sixty … maybe seventy. All of a sudden their life gets small. Yes, they have a lot of good stuff, but they don’t have the time to enjoy it.

The other unspoken factor of the salesperson’s career path is they still start at zero the next day. It can be frustrating and tiring … but a good salesperson never complains, always has a positive attitude. After a while it gets tiring living under that kind of pressure over a period of time.

Can a sales career pay the bills? Yes, usually. But how does the future look? What are your options? Change company’s and the cycle starts all over again.

Sobering thoughts ….

Next: Private Business Ownership (start your own company)

What are your thoughts on the sales path?

© Phil Hoffman 2013. All rights reserved

Part 2 – Today’s Jobs and Economy

In my last blog I started an eight part series concerning “Today’s Jobs and Economy” which was a brief outline of what I intended to accomplish with this series. I noted that I would breakdown today’s business jobs into six basic categories and give a brief explanation of each.

In this Part 2, I am covering Blue Collar Career/Jobs and White Collar Careers/Jobs in their simplest forms.

Blue Collar Career/Jobs

I started out by going to Wikipedia and seeing their definition of the blue-collar worker. Here’s what they say:

A blue-collar worker is a working class person who performs manual labor. Blue-collar work may involve skilled or unskilled, manufacturing, mining, oil field, construction, mechanical, maintenance, technical installation and many other types of physical work. Often something is physically being built or maintained.

To paraphrase in my own words … someone who labors to fix, build, clean, make, or service something.

And I might add, that anyone who has ever done blue collar work knows there is a certain pride or satisfaction in a job well done.

Note: Today there is a trend toward skilled labors that are highly trained to operate large efficient machinery that does the work of many workers. Based on the necessary training and efficiency requirements it is hard to classify these as blue-collar workers … but we tend to think that way for some reason. This is an example of the changing ways toward the new economy.

White Collar Career/Job

Next, I went to Wikipedia to see their definition of the White Collar Career/Job. Here’s what they say:

The term white-collar worker refers to a person who performs professional, managerial, or administrative work. Typically, white collar work is performed in an office or cubicle..

To paraphrase in my own words … someone who is employed by someone else to do work other than manual labor or sales.

It seems that many people choose a white collar career, as it is one of the most socially acceptable occupations available. Many consider it to be a safe and secure option, which in my opinion has changed the last several years. For years, there was an implied unwritten contract that, if you were loyal to the company, the company would be loyal to you. And this contract is gone now. In my experience, there are two types of people who do this type work … Doers/Fixers and Stealth-workers.

Doers/Fixers are the people who want to do their job at a high level. They are energetic, motivated, and ambitious. They offer up ideas or solutions with the goal of moving up the corporate ladder. But there seems to be a downside for the Doer/Fixer. Once it is known that a person is a Doer/Fixer, they become a target of others. Their boss or other higher ranking individuals see them as threatening to their jobs, so they start coming up with ways to hold them back, or begin to take pot shots at their reputation. Then their peers see them as someone who will either embarrass them or keep them from getting a promotion … so they start to do what they can to undermine their accomplishments. Therefore, in order to remain a Doer/Fixer and survive in this hostile environment, a person must become good at something that has nothing to do with their work … and that is learn corporate or office politics. They have to learn how to navigate the “politics” by outwitting their enemies and strengthening their relationship with powerful people above them within the organization. In fact, it seems that some of the most successful people in the business world are not Doers/Fixers at all … they are pure politicians. Therefore, if you decide to work in the business or corporate world and want to be a Doer/Fixer, you need to realize that you must become a good politician also.

Now let’s address the Stealth worker. These are the people who HATE office politics and just can’t play that game … but they need a job. They learn not to be the ambitious Doer/Fixer. They don’t stand out … they don’t speak up in meetings … they don’t submit new ideas … they are almost invisible. They keep their heads down and do as they are told … no more, no less. They do just enough so that they aren’t talked about negatively. They simply want to survive. Moreover, this has worked for many years. But in today’s New Economy, it’s becoming much more difficult to be invisible.

Next Post:  Sales

What are your thoughts on the blue collar and white collar workers?  

© Phil Hoffman 2013. All rights reserved

Today’s Jobs and Economy – Part 1 of 8

This is an introduction to a new eight part blog series on Today’s Business Jobs. Here’s what I plan to touch on in this series.

1. What are Today’s Jobs. After this introduction, I will break today’s business jobs into six basic categories and give a brief explanation of what each of the six categories consist of today. I believe this is an important topic as we experience the constant changes of the economy, the leadership or lack of leadership of our government, the tepid but strategic efforts of big businesses, the slow growth of our gross domestic product, and the constant struggle and demand for more efficiency with less labor.
2. After this introduction and reviewing the six jobs categories, I will touch on the evolving New Economy. What are some of the possible momentum areas for the middle class that will enable us to succeed in this changing economy and what might be coming of age after slugging our way through the recession.

My goal in this blog series is to provoke some personal analysis of what is going on around us that is going to affect us all over the next three … five … ten years. I hope you will follow along on this blog series and share your thoughts and comments along the way.

© Phil Hoffman 2013. All rights reserved

Core Values – Culture

There are times when we need to take a close look at the core values we have established for our organization and re-evaluate them. And if we do not have formalized core values then we need to get them formalized and in writing. The best way to do this is to schedule uninterrupted time with your key leaders (no matter how few or how many) and delve into an open dialogue. Your goal is to shape the culture of your organization. How do you want to respond to opportunities or to crisis? What is you Driving Force? How do you want your people to behave when they come together? Most likely, there are behaviors you want to re-enforce and there are behaviors you want to weed-out.

Begin with the understanding that “the process” is probably going to be more important and more revealing than the result. So embrace the “process” and be aware of the journey you are undertaking. Ask the question: What are our Values as an organization? You will find that the values you discuss become the behaviors that will be discussed. Ask: What are the things we need to do that will get us to a good place? Encourage open discussion and then let them percolate with you and your team for a while … don’t get into a hurry. Let the interesting things that will surface sink in … there will most likely be some good and some bad. Don’t discount any. They will add to your knowledge base of what you have and serve as a guide to where you want to go.

For the sake of this blog, I am going to suggest six areas for consideration and discussion. You may end up with fewer or more … that will be up to you. I am always in favor of less is best, but that depends on your organization and what your leadership wants to accomplish as a guide. Here we go …

1. What can we do to Make it Better? Seek feedback to push improvement throughout the organization … make everything better. Some call this continuous improvement … and it is; but keep it simple and make it inclusive.
2. Make it Personal for everyone. Get everyone involved. One of my mantras is that every employee should consciously be trying to improve revenues for the company. Every organization has to have revenues to operate and be successful. If an employee is out shopping and overhears someone needing something that your company offers, don’t ignore it because you aren’t at work … speak up and say, “I work for a company that offers that. How can we help you?” Small focused efforts by everyone helps everyone be successful.
3. Collaborate. Talk, discuss … add synergy of the group. Seek willingness on everybody’s part to be successful. Don’t be too proud to ask for help. Don’t be too busy to be helpful. Your goal is to leverage the talents and skills of your leadership team and all employees. You want everyone shoulder to shoulder and facing the same direction on important matters … plus pulling or pushing at the same time, not against each other.
4. How do we replace ourselves? This is not meant in the manner of succession planning, but in whom can I delegate to and empower so that I can do more for the company and they can do more for the company. Empty your cup of knowledge into the leader coming up behind you so that you can do more. You want to have a team of leaders who attract leaders so that the company grows and improves and everyone participates in the growth and successes. In a growing organization, there is change and we have to be willing to change also. When we take on responsibility, we need to own-it; but when it’s time to pass it on, we need to let go of it. Therefore, a good core value should include being open to change and being willing to facilitate change.
5. Get Fit; Be Fit, Stay Fit. We all bring our personal lives to work with us. Therefore, it is important that everyone get fit and stay fit through a balanced life. Some may think this is too personal, but the success of the company is for the benefit of everyone who works there … therefore, it is personal … and important. By being Fit I’m referring to taking care of yourself in all areas: physically, spiritually, relationally, financially, and emotionally.
6. Remain open-handed. Here’s an exercise that while simple may prove very beneficial. When you are discussing difficult matters, have everyone sit with their hands on the top of their thighs with their palms open and up … you will find that everyone will be more likely to share their ideas and feelings in a more honest and open manner than you would ever imagine. This simple but proven technique will help everyone learn more and manage better when asked questions along the line of new ideas, innovation, and change. Furthermore, you will find that a sense of solidarity and camaraderie will become part of the involvement of the leadership team.

In closing let me remind you that the goal is to establish or re-evaluate your core values … and state the behaviors we expect of each other in every conceivable situation. We tend to think of setting core values as a way to resolve problem areas, but you also want to evaluate your successes so you know why you are successful and continue to improve.

What are your thoughts on Core Values and Culture?

© Phil Hoffman 2013. All rights reserved

Selling in Today’s Economy

I have a good friend who has been an independent sales person for many years. They are paid straight commission. They are very successful. Yes, they have had some frustrations from the tough economy by having their territory enlarged while their car and travel allowance have been reduced to save the company money. In addition, the company’s’ advertising and co-op programs were trimmed considerably.

But they continue to do well. What is their secret?

Here’s what they shared with me …

1. They are serving the needs of their existing clients, getting referrals and closing new business.
2. Their mantra is “activity breeds productivity.” While there may be a downturn in business at times – and recently for an extended time – that doesn’t affect the level of service they provide. Rather than talking about bad or sad news, they stay positive and are seeking the good news or opportunity in every story they hear or read … in every conversation … in every client contact.
3. They continue to stay abreast with changes and new introductions into their market, and keep learning all they can. They listen to a lot of podcast while driving and search for current events to bring up with their clients that are positive.
4. (Here’s a key one) They make it a habit to contact every one of their existing clients at least every 30 days. Simply asking how they are doing. Finding out what they are doing to conserve cash or to generate new business (the client).
5. They show their clients that they care and want to be helpful when possible but always available and supportive. They never miss an occasion to give good wishes, birthdays, happy holidays, New Year, anniversary (personal and business), etc.
6. If they have not been successful in talking with the client on the phone or in a face to face meeting within a three-week period they send them a personal note or card.
7. They email their clients any trade news updates that are specific to their area of expertise as a way of sharing and as way of getting their opinion. They also email them anything of personal interest that they follow (i.e., fishing, hunting, sports, football, music, etc). They are very careful to control this so they don’t come across as an email “pest.”
8. They include in every conversation or contact these words, “What can I do for you today?” Their goal is to always offer to give first … ask later. When the time is right to ask for something, they always ask first for their continued business, second for referrals or ideas of how to increase business, and then close with saying how much they appreciate them and value their friendship.

Do you think this sales person is ever going to lose a key account … or that the “home office” will consider taking any of their clients away from them? Seems to me they have a pretty good system for making themselves bulletproof or indispensible in their territory.

Do you have any experiences in this area?

© Phil Hoffman 2013. All rights reserved