Make More of Your Job

Get More Done by Going Public

I love public transportation. I know, I’m probably the only person living in a major American city that would say that out loud, but it’s true. I’m not a big fan of dirt, stench or public drunkenness. What I am is a huge fan of making the most of my time, and in my life, public transportation is one of the greatest tools I’ve got.

I don’t live too far from my office, but in big city traffic, it can easily take me an hour to get to work when I drive. Public transportation takes me only about 40 minutes. You may be thinking that 20 minutes isn’t enough of a personal savings to make it worth while, but let’s take a look at some “lifestyle math” to see how much taking the train contributes to my life on an annual basis.

• Commuting 20 minutes each way is 40 minutes a day. With 5 work days a week, and about 50 working weeks a year, that boils down to 166 hours and 40 minutes (almost exactly one full week of waking hours) that I can spend with my friends and family, or doing things I love, instead of in a car white-knuckling it through traffic.
• My train ticket costs me $6.20 per day. Driving, I use 2.5 gallons of gas (at a $3 average that’s $7.50), plus between $15-20 a day for parking. That’s an average daily difference of $19. Again, multiply that by 5 work days, 50 weeks a year, and I end up with $4750 a year! If I invested that much money every year directly in the S&P 500 (using the last 30 years average growth rate), over a 40 year career I’d end up with an extra $2.3 million dollars at retirement. You read that right: $2.3 million!
• On top of just saving the 20 minutes a day in travel time, the 40 minutes I do spend on the train, I can spend reading - something you can’t (or at least shouldn’t) do in a car. It takes me an average of 4 hours to read a book (assuming about 350 pages), so with 80 minutes a day freed up for reading, I can read an extra 84 books a year or an extra 3,320 books over a 40 year working career. I know I read quickly, but even at a pace of a page every 2 or 3 minutes, the extra reading time freed up is amazing.
• Last, but not least: the difference it makes to the environment. By taking the train, instead of driving alone in a car I can help save about 2.8 tons of carbon emissions a year. It may not change the world, but it’s a simple way I can do my part to protect our environment.

Now do you see why I like public transportation so much? When I get on a train in the morning, even if it’s dirty or crowded, I’m not thinking about the downsides. I’m thinking about all the ways that taking that train contributes to my life. The goal of this post isn’t to make everyone rush out and start using public transportation (though that would be great), but to illustrate how a little flexibility in your life can create great value. We may not be able to wave a wand in our lives and create piles of money, or more hours in the day. But with a little agility and some creative thought you can make a huge difference in the quality of the live you live, and the world you live it in.

How Much Do Dreams Cost?

When I was a little kid, I wanted to grow up to be a superhero. I probably don’t need to tell you that that dream didn’t happen for me.  It’s true, the dreams we have as children are often unrealistic and unattainable.  As we grow up, we realize that things aren’t so easy and many of us even get to the point where we believe that dreams, as a category, are unattainable and not worth our time.  Nothing could be further from the truth.

In fact, I’ve always found that dreams are the biggest motivating factor in my professional life.   But unlike the pie-in-the-sky dreaming of our childhoods, being motivated by our dreams as adults takes deep understanding about what it will take to get us there.

I have a good friend (let’s call him "David") who often says that he dreams about being able to retire while his kids are still in high school. He remembers that, by the time he was that age, he rarely saw his father at all.  When he talks about this dream, it’s said wistfully, as if that dream is totally unrealistic. But the truth is, it’s not!

The last time he brought it up, I asked, “So what would it take to do that?”

“A lot," he said. "I’d have to be able to retire in 12 years.” I started peppering him with questions.  Here are some of the details I got as he answered my queries:

• He makes about 90K a year, and is unwilling to lower that number, even in retirement. It’s the lifestyle his family is accustomed to.
• In his late 30s, he has about 175K saved towards retirement.
• He puts 10% of his income away each year and his employer matches 3% of his income through his 401(k) plan.  That’s $11,700 a year he’s putting away.
• Over the past 5 years, his retirement accounts have averaged about 6.5% growth.

As we talked, I pulled out my laptop and plugged some numbers into a quick spreadsheet. With these numbers, he would end up with just under $600K as his first son entered high school.  At 6.5% returns, that would only generate about $39K in income a year, far less than his goal of $90K. 

“See,” David told me, “It’s just not going to happen.  Besides, I’d need way more than $90k, because if I was retired I’d have to pay for benefits out of pocket, not to mention college savings.  I’ll probably never get to retire.”

Not so fast, buddy. Click through to read how within reach his dreams really were.

A Workplace Lesson, Brought to You By Tax Day

It’s tax day, ladies and gentlemen! Believe it or not, paying your taxes can teach you a lot about yourself, including valuable lessons about your tendencies as a worker. To accomplish your goals, you’ll need a heightened ability to self-analyze and the willingness to alter your habits.  Let’s take a look at a statement surrounding tax day and explore what it might say about you.

"I filed my taxes"... Hopefully everyone reading this can utter those words, the last enemy any of us wants in life is the IRS.  If you’re looking to grow as a person, however, the question to ask yourself is “when did I file my taxes?"  If you filed more than 2 weeks early, give yourself an “A” on this assignment. If you were closer to the deadline, however, you might want to look a little bit closer at the situation.

Paying your taxes close to the due date suggests that you might be a procrastinator or a bad planner. If you paid late because you owed money and had to wait until the cash was in hand, ask yourself how you could have planned better. If you filed late but did not owe the IRS, ask yourself why it took you so long to file for the money that the government rightfully owes you. The answer to both questions will probably apply throughout your work and personal life.

Taxes are a stressful topic, and putting off stressful tasks until the last possible moment is a common human trait. It’s also one that can crush your upward mobility at work.  Employers look to promote employees who display grace under pressure, which means having to confront difficult situations when they arise. Procrastinating at the office can cost the company serious money, so if you did it with your taxes, it’s time to look at your habits at work. 

The good news is that acknowledging our counterproductive habits is a huge factor in the battle to get better.  Once you notice that you tend to procrastinate and have a desire to plan better in the future, beginning to change your habits comes easily.

Another question to ask yourself: did you owe money or get a refund this year? Your goal every tax day should be to owe $0 and get as close to $0 in refunds as possible.  Nobody likes to cut a check they weren’t planning on when they owe, and getting a refund means you let the government borrow your money at no interest for an entire year.

If you owed, or received a refund greater than $500, talk with your company’s payroll administrator about raising or lowering your exemptions to help you control that number next year!

Get Rich Quick? Not So Fast.

America’s obsession with get-rich-quick schemes is out of control.  If you’re looking for financial and professional success in your life, the only way to guarantee a positive result is by earning it. That takes effort and time.

During a recent sleepless night, I was up watching television around 2AM and it seemed like the only thing on TV was idiots pitching get-rich-quick ideas.  "Make money buying foreclosures! Get rich purchasing tax liens!  Develop wealth by beating the stock market!"  Ask yourself this question: if the guys on these advertisements are so rich from their schemes then why do they need to earn money through an infomercial?  If flipping properties is making them so wealthy, why are they wasting time selling videos?

Why does this get-rich-quick culture get me so fired up? I own several real estate companies, and I can tell you from experience that buying foreclosures isn’t something that you’d be prepared to do successfully after watching a video. I invest heavily in the stock market, and despite reading dozens of books and using professional advisors, I’ve never made “thousands a day starting with just 100 bucks." I haven’t personally ever been involved with the purchase of tax liens, but did you know that every state has different laws when it comes to tax liability? Additionally, the penalties for inaccurately paying taxes are steep, even criminal. Do you really think you could trust your future success $199.99 info pack to prepare you to be a rousing success? Doing it right takes months or even years of experience. 

Sure, there are some people who make a lot of money with these schemes, but there are also some people who become millionaires in the lottery.  The one factor that links both of these kinds of people is, quite simply, luck.  Get-rich-quick schemes are about timing and don't require much skill, not to mention usually taking advantage of someone else. Therefore, very few people will ever make a single cent by getting involved. 

These schemes allow otherwise capable and skilled individuals to keep hopping from pipe dream to pipe dream and never focus on real success. Financial success comes from working hard, educating yourself and managing your resources.  If most of these folks would just stop buying get rich quick packets, they’d have more resources to actually invest their money productively. Instead, they spend time and money hoping that they will hit the jackpot like the paid actors and spokesmen on TV. Hope, as they say, is not a strategy.

So the next time you catch one of those get rich quick commercials on late-night TV, remember that the only person likely to be making any money on the deal is the greaseball peddling the product.  If you want real success in life, you’re going to have to do it the old fashioned way.

Taking Risks Requires Planning

So many of the people I talk to about career advancement feel like they could really do more with their lives, but leaving their job would just be too much of a risk.  Unfortunately, there is almost no such thing as a big career move that comes with zero risk; so many people end up staying put instead of moving their life to the next level.

Let’s use two imaginary employees to illustrate how to manage risk in career advancement.

Dick and Jane are both up for the same promotion to Director of Operations at their company.  The job pays about $20K more that either Dick or Jane is earning today, but it is also a highly visible position in the company, and therefore comes with a significant pressure to perform.  Success in the role would guarantee huge financial gains. Failure in the role, however, might lead to quick termination and certain financial loss.

• Dick looks at the opportunity and is terrified.  Dick and his family have been living paycheck to paycheck and the thought of losing his job right after a big promotion is his worst nightmare.  If he were unable to perform in the new role, he wouldn't be able to support his family and would be viewed as a failure.  Dick knows that he couldn’t handle that kind of pressure and do the job well, so he takes himself out of consideration for the role.

• Jane looks at the opportunity differently.  Jane and her family live modestly and have put away a few months worth of funds in case of an emergency.  Jane can’t afford not to work and the thought of failing at this new role is scary. However, the $20K increase would mean a lot to her family’s future and the challenge of a new position would be exhilarating.  Jane knows that the worst case scenario is that the job is a bad fit, in which case she could try to get her old job back or at the absolute worst get a job similar to it at a new company.  Money for bills during a subsequent job search could be taken from the emergency fund if it came down to it.  The best case scenario is that the job goes swimmingly and the $20K increase is just the tip of the iceberg.  After weighing her options Jane believes the possible gain vastly outweighs the risk and fiercely pursues the position.

The key difference here? Jane has planned accordingly to take advantage of risk in her life. She expects and welcomes risk, knowing she has a safety net. Dick shies away from it because there will be nothing there to catch him if he falls. And as we've discussed before, worrying about your financial situation can only hinder your productivity at work. If Dick is so worried about his finances and his performance, what's really motivating him to perform?

Both Dick and Jane could be qualified for the job, but non-work life decisions might make it impossible for one of them.  It’s a shame when poor planning get in the way of a talented employees future prospects, as both the individual and their company lose.

The key to a successful and balanced career isn’t avoiding risk, it’s understanding how to manage it and planning your life accordingly. It’s true that any new career opportunity comes with risk, but it’s possible to balance your life so that the risk isn’t nearly as scary.   

Maybe it’s time to ask yourself if you have planned your life to lessen the impact of future risk. Or are you setting yourself up for failure before you even get started?

Cost of Living Calculator

Looking for a creative way to increase your lifestyle?

We frequently discuss using career advancement as a means of increasing your lifestyle, but believe it or not, getting a promotion isn't the only way to do it.

There are some people who are at points in their career where being promoted isn’t a likely next step. If you are an employee at the highest position in your field, were recently promoted, or if your industry is not growing in your area, there may be another way to kick your standard of living up a notch: consider moving. Any employee who keeps the option of relocation open has a pretty good chance of making the market work for them.

There is also a wide range in the costs of living depending on where you’re willing to live. In fact, if you're willing to transfer locations on your current salary, you might find you could afford a completely different life. If the idea appeals to you, check out this cost of living calculator to begin learning about what options might be out there waiting for you!

Workplace Myths: Raises Should Come with Tenure, Part 2

Yesterday we talked about the difference between wage increases and raises. Today we’re going to talk about how you can get one and what factors are in your control.

Wage Increases

Remember, wage increases are intended to maintain your current standard of living, so they should happen automatically when inflation occurs. Assuming you continue to have the same job description and perform at an average rate in your role, most companies look at wage increases annually. Historically these wage increases should be between 1.5 and 4 percent.

When it comes to wage increases there really isn’t much you can do to ensure you get one. They are usually a company-wide decision, though often times different roles get different percentages based on the market.

If prices are increasing, you’re doing your job, and the company consistently fails to provide you with a wage increase it’s probably time to start looking for another company. In an inflationary economy the average company is making more money. So if they aren’t doling out wage increases, they're using that money to improve their profits while their employees' standards of living are dropping.

The good news is that most companies have become accustomed to routine wage increases. In fact, in most white collar jobs today, the average annual wage increase is generally higher than the actual amount of inflation, which means the employee is winning each year. Even so, the difference between actual inflation and the wage increases given is likely to be only a percent or so, which will hardly give you a big boost in your standard of living. If you’re looking to improve your lifestyle, the way to do it is to get yourself a raise.

Raises

Raises are intended to be a reward for providing a greater value to the company and for over achieving in your role. There are only three times that an employee should be given a raise, as there are only three ways that an employee can impact the bottom-line profitability of their organization.

• Increased Productivity – If you consistently get more done and deliver better results as time passes, you are probably a good candidate to receive a raise. The most typical way that increasing productivity will lead to a raise is by getting promoted. Each time you take on greater responsibility in your current job or deliver more results in the same amount of working hours you are sending a message to the company that you are capable of doing more. Before long, you’ll be on the fast track for promotion, and with that new job a raise is almost always a part of the package.
• Reduced Expenses – Another way to deliver more value to your company is by helping to reduce expenses. A company’s job is to deliver the best profits possible to their shareholders and a large part of that process is expense control. If you can find new ways to reduce expenses without affecting the productivity of your organization, you will soon become highly valuable. Each time you find a wasteful expense that you can help your company eliminate or a more cost effective way to run your business, you are adding dollars to the profits of your organization. When a good company is able to achieve a better profit margin, they will always look to pass on a portion of those profits to the employees that helped get them there, usually in the way of a raise. By becoming a crusader who finds ways to eliminate wasteful spending, you will ensure that your name is on that list.
• Added Revenue – The fastest way to secure a raise is by helping drive more revenue for your company. Too often, people think that the only people who can impact the revenue at a company are the salespeople selling the product. It may be easier to directly impact revenue if you’re in sales, but the truth is that anyone can impact revenue by providing innovative ideas about how to increase productivity, penetrate new markets or even develop or market new products. Every employee should constantly be thinking of ways to help the company earn more revenue, and every good company should be open to hearing their people’s ideas. Without fail, if you’re the person who finds a way to bring more dollars in the company’s front door, a raise will be just around the corner.

Earlier: Workplace Myths: Raises Should Come with Tenure, Part 1

Workplace Myths: Raises Should Come with Tenure, Part 1

Somewhere in the history of the modern workplace, the line between a raise and an annual wage increase has become blurred. It seems that most people believe that for every successive year that you work for a company, you should automatically be given an increase in salary. If you look for the logic behind that statement, however, you’ll find that it doesn’t exist.

Companies are in business to make money. If they paid out more to their employees every year, even if revenue were shrinking, they would be in bad shape in no time. I believe that the misguided expectation of an annual raise has come about because, as a corporate community, we no longer draw a distinction between raises and wage increases. Let me explain the difference.

Wage Increases

As capitalism developed through the beginning of the industrial revolution, the impact of business on national economies was dramatic. As unemployment dropped and productivity increased, demand for many products (from energy to housing to material goods) increased.

Along with demand came inflation and an increased cost in living. Wage increases were introduced into the economy to make sure that as inflation occurred, employees were able to afford a consistent standard of living.

The idea behind a wage increase is that, as time passes and the economy ebbs and flows, no individual employee should feel a significant difference in their personal lifestyle. Therefore, if inflation took prices up 4% in a year, each employee’s compensation should be adjusted to match that inflationary quotient. Wage increases were never intended to slowly improve an employee’s standard of living over time, but only to ensure that as time passed price increases and wages stayed even.

Raises

A raise is a different animal entirely. Raises came about in the modern workplace for two reasons. First, it gave employers a way to stratify and motivate their employees. If the best person in a position made more than an average person in the same position, paying that person more would both reward them as well as motivate the others. Second, raises were designed to increased compensation for added work or responsibility -- in other words, raises were awarded for promotions.

Unlike wage increases, raises have always been intended to reward performance rather than to balance economic factors.  As such, they should only be given when the employer feels it is appropriate.

The Confusion Begins

Two major issues evolved over the years which contributed to today’s misguided notions about compensation increases: the end of wage decreases and annualized raises or promotions.

In the early days of the modern business world, employees were given wage increases when inflation occurred, but they were also given wage decreases in recessions or when the cost of living decreased. This makes sense as the companies in question were always adjusting compensation to keep employees in the same standard of living based on the economy and keep their profit margins similar from year to year. Sometimes employees made more and sometimes they made less, but they could always afford the same lifestyle if they were doing the same job.

As labor laws developed, however, most companies continued to give wage increases when inflation occurred but stopped giving wage decreases when deflation occurred. Once wage increases became standard and wage decreases disappeared, people began to believe that each year they were entitled to more money to increase their standard of living.

Around the same time, as larger companies became the norm, organizations started implementing all of their raises and promotions at the beginning of the fiscal year. This coincided with the timing of wage increases, which contributed to the belief that raises and wage increases were really more or less the same. At this point, unless an employer made a specific distinction, many employees began to believe that wage increases and raises were exactly the same.

Today, when people get a 1% or 2% increase in compensation, they are often upset with the amount of their “raise” when it was, in fact, a wage increase. As with all wage increases, it was an adjustment to compensation that reflected an increase in cost of living, not an increase in performance or responsibility.

The bottom line is, each of us should be able to count on our company to help us maintain our current standard of living as long as we maintain our current job description and performance. That assistance should come in the form of a wage increase as the economy grows. If what we want is to increase our standard of living, the only way to achieve that is by getting an honest to goodness raise. Tomorrow we’ll talk about how to make sure that happens.

Financial Worries at Work: Identify Your Type

We talked on Monday about how financial problems can distract you from the task at hand at work. However, there are different ways in which your financial well-being can affect your performance.

When it comes to financial stress impacting work performance, there are two major types:

Type 1: Employees who aren’t making ends meet today - According to the Pew Research study I cited yesterday, 36% of Americans spend more than they can afford. Even worse, 50% of those who make just enough to pay their bills spend more than they earn. If you're always feeling the pinch between paychecks, you're in this category.

Type 2: Employees who stress about what the future holds for them - Pew Research found that, in almost every demographic category, a majority of Americans felt they could be saving more. Furthermore, 77% of Americans say they are always looking for new ways to pinch pennies and save money. If you have a handle on your finances, but continue to look for ways that you can store your money away for the future, then you're in this category.

For both types, the good news is that you can take control of your financial life very quickly. It takes guts and commitment, but it doesn’t take a degree in finance. Once you begin to see the picture a bit clearer, you can start to chase away the stress and uncertainty that’s holding you back from doing your best work. Through a combination of better controlling your finances and renewing your commitment to making the most of your job, you’ll be able to make short work of the problem.

Type 1 - If you have a hard time making ends meet now:

• Track your spending (every penny) for a full month to get a grasp of where the money is going. Through this process, you’ll find some simple ways to start saving and uncover some deeper issues you’ll need to attack.
• Write out a realistic budget that adds up (with some emergency funds) to what you take home each month.
• If you always receive a tax refund each year, consider raising the exemptions on your paycheck. This will help give you a bit more money each month rather than a lump sum each April.
• Find a mentor or advocate that you can discuss your financial situation honestly with. Make sure that the important people in your life are on the same page when it comes to your financial goals.

Type 2 - If you worry about your financial future:

• Learn everything you can about 401k, IRAs, 529 college education plans and the like. Most people begin to reduce their stress about the future as they learn more about their options.
• Seek out a financial advisor who can help you figure out precisely what you need to achieve the future you want. It’s impossible to feel stable when your long term goal is a moving target.
• Take full advantage of your company’s benefit plans: If your employer matches your 401k, max it out. If your company offers tuition reimbursement, take a class about finance or investment. Don’t turn away freebies that could help you get on the path to your desired goals.

In the weeks to come, we’ll spend more time discussing steps to improve your financial standing, and ways to keep stress about money from impacting your work. I’ll also recommend some resources to help you take control of your financial and professional future.

Earlier: Financial Problems Can Affect Your Job

Financial Problems Can Affect Your Job

We’ve spoken many times now how important a role that improving your productivity on the job will play when it comes to advancing your career. For many of us, making strides in any of those categories is easier said than done. If the steps were simple, then surely a large number of folks would be making the changes in their life that could lead them to a more rewarding career. But it seems like one thing always gets in the way: money.

A recent poll by Pew Research found that 72% of Americans worry regularly about money. With numbers like that, it isn’t difficult to see why many people think that getting a raise or promotion might be the solution they need for their problems. The truth, however, is that the equation really works the other way around: it’s worrying about money that often keeps American workers from getting a raise or promotion.

What do I mean by that? Employees who are constantly worried about making ends meet have a much more difficult time focusing on their job than workers who have financial stability. We can all think of a co-worker who spends a lot of time paying (or looking at) bills online, calling their spouse about funds, speaking to creditors about payments or billing errors all on work time. Even if that person is phenomenal at their job, they just don’t spend as much of their time at work doing work as their peers and it will probably prevent them from moving up.

To make matters worse, living expenses later in life (kids' college tuition, retirement and medical care) are skyrocketing while pensions and retirement programs are falling off the radar. Even the future of social security is in question these days! That means that even employees who have done a good job living within their means may start to feel worried about their financial future and, in turn, stunt their career growth.

The emotional impact of these worries can affect our performance. I know that my employees are always at their best when they feel comfortable and stable in their lives. When things are going right, they have more energy, more enthusiasm and the willingness to think creatively or take risks. Employees who are down about money often times feel routinely negative, place only the safest bets when it comes to ideas (after all, they can’t risk losing the job -- that would make things worse) and even project their pessimistic financial attitude onto the job itself. When you feel like you can’t afford to live a decent life, it’s hard not to blame your job. It’s almost unavoidable you’ll end up feeling like you’re underpaid even if you aren’t!

This week we'll continue our focus on finance and introduce two types of financial worriers that I've briefly discussed here. How can each type take control of their finances and, in turn, take control of their careers? Check back to find out.