Friday, October 30, 2009

Find Your Strengths, Collaborate, and Be The Best!

The book of the week was Strengths Finder 2.0 by Tom Rath. This book was a recommendation of Amazon and I didn't know what to expect when I bought it. However, Amazon's recommendations have led me to great books in the past and I wasn't disappointed by this one either. That being said, the book's format definitely threw me. There is only about 50 pages worth of reading because the main point of this book revolves around an online test. You read about 50 pages about the importance of your strengths and identifying them and then you log into the strengths finder website, using a one-time code in the back of the book and take your strengths finder test. The results will bring up your top 5 character themes out of 34 different types. The point of identification is to help you improve on your best traits. The book helps you do this by giving you a summary of your 5 different themes, showing quotes from people with the different themes and creating a personal action plan to get your specific themes even stronger. Like a muscle... a great personality theme only gets stronger when it is worked out.

I want to stress upon you the importance of identifying your strengths. So often people focus only on their weaknesses and tirelessly try and improve on the things that they are not good at. The problem with this mindset is that you will work yourself into the ground and will most likely never be as good as the best. A physical example would be basketball, if you are 5' 2", 130lbs and practice for hours everyday to be the next Shaq, you will eventually be on the court with a person 2 feet taller and 200 lbs heavier than you and they will have the advantage.. resulting in years of time that could have been utilized more effectively. Now I am not saying that you shouldn't focus on your weaknesses... you should be aware of all your weaknesses and try to improve those skill-sets, but it should not be the most important thing you are working on. If that same, 5' 2" 130 lbs person, was naturally great at writing, and worked tirelessly on improving their writing skills. It would come naturally and expediently... and they may become the next Mark Twain. In Strengths Finder 2.0 Tom Rath tells a story famously described by Mark Twain in fact. Story goes, a man was at the Pearly Gates and asked Saint Peter a question... "Who was the greatest general of all time?" Saint Peter responded, "Oh that's simple, It's that man right over there." The Gentleman said "You must be mistaken, I knew that man and he was just a simple laborer." Saint Peter said "That's right, He WOULD have been the greatest general of all time, if he had been a general."

It is very important to analyze yourself and find out what your real talents are... To put this in terms of getting rich: If you find that you are great at marketing, but don't have the ability to negotiate, hire, speak publicly, budget etc... you build yourself a team. If each person in your team is as expert in their given field as you are at marketing, you'll have a cash-cow team! Whatever product or service you decide to dive into will be a winner. Additionally, it is important to know what your natural talents are when making the transition from school to the "real world." When you find your natural talents, you can represent yourself accurately and impressively to potential employers and really land yourself a great career path.

My 5 character themes after taking the Strengths Finder 2.0 was Achiever, Competition, Maximizer, Futurist, and Learner. I think it is very accurate and I will use my newly acquired action plan to strengthen my skills in those areas. I also know I need to keep a look out for the additional 29 character themes within people to make my professional network a complete powerhouse! One of the most important things I have learned is: You can't be the best at everything by yourself, so surround yourself with people that compensate for your shortcomings.

I recommend this book to absolutely everyone. The book will take about 45 minutes to read and the quiz should take about 30 minutes. The results will really help you identify your talents. It is very difficult to self-identify all your strengths so use this book as a resource. If you have any questions on the book don't hesitate to ask. I would be more than happy to help anyone that wants it.

Additional FREE Resource to Identify Strengths:
Myer's Briggs Typology (Strengths Finder 2.0 is much more helpful)

Saturday, October 24, 2009

Wealth Laws From 8000 Years Ago...

It has been a challenging week, but I managed to get my book done, The Richest Man in Babylon by George S. Clason. This classic is a favorite of many of my preferred authors, so I thought I would add it to my repertoire. Clason is a fascinating man, born in Louisiana, Missouri in 1874 and started his Babylonian-based writing in 1926. This book has very solid messages and it's no wonder why this book has become a finance classic.

Clason uses parables set in Babylon to make his points throughout the book. One chapter does a really great job of encompassing several financial points, The Five Laws of Gold. Each of the five laws are very simple and if used can work wonders in building your wealth.

Five Laws of Gold

1: Gold comes gladly and in increasing quantity to any man who will put aside 10% of all he earns to build an estate for his family and future.

2: Gold labours diligently and contentedly for the wise owner who finds it profitable employment.

3: Gold clings to the protection of the cautious owner who invests it under the advice of men wise in its handling.

4: Gold slips away from the man who invests it in businesses that he is not familiar or is not approved by those skilled in its keep.

5: Gold flees the man who would force it to impossible earnings or who follows the advice of tricksters or schemers or who trusts it to his own inexperience and romantic desires in investment.

I feel Law 1 is the most useful thing anyone can use when starting to accumulate wealth. I have touched on this in a couple blog posts, but I want to really drive it home. The best way for you to really start making a large sum of money is Paying Yourself First. YOU is the most important investment your have. YOU should have the mentality that YOU are your most vicious creditor you have. You owe YOURSELF before you pay anyone else.... Figure it into your budget. When you get your paycheck have a set number each month that you owe YOURSELF, I like no less than 10%. Never budge on paying yourself and always do it first. In my last blog about I Will Teach You To Be Rich, I showed you how to automate your finances. This makes it very easy to pay yourself. If you have $500 a month coming out of your checking account, and into your ING Direct or Emigrant Direct Savings Account, the day after you get your paycheck, you won't even consider that spending money. ING and Emigrant Savings Account pay 1.3% interest right now and it takes a day or two to get money when you do a transfer. I definitely recommend either of these accounts. I challenge you to start paying yourself first... trust me, you are worth every single penny. PAY YOURSELF FIRST!

More on ING and Emigrant Direct Accounts.... I just changed from Emigrant to ING because ING allows you to have several sub-accounts under the same over arching account. You can create nicknames for each of your accounts and each can have automatic savings plans for each separate account. Let's play pretend... You have and ING Account with sub accounts named Wedding, New House, and Vacation (I will discuss retirement accounts in a separate blog down the road... saving accounts should be used for short-term expenses: 3-6 years). You want to Pay Yourself First so you have get paid on the 1st each month and on 2nd you have ING pull $500 from your checking account. This $500 will be split among your accounts $150 to Wedding, $250 to New House, and $100 to Vacation.... In 5 Years we will have... drum-roll... $9,294 for your Wedding, $15,490 for your New Home, and $6,196 for your dream vacation... Total Savings = $30,980. Determine what you want you pay to be and work your budget so you pay yourself before anyone else... be vicious... get creative and figure out a way to pay yourself what you want. I want to make a point that much more money can be accumulated than this for the long-term... More on that later.

-Link for ING Direct's Homepage
(If you intend to start an account with $250, I can send you a referal from my account that will get you an automatic $25 more.. email if your interested
-Link for Emigrant Direct's Homepage

The Richest Man in Babylon is a great book with lots of great parables. It's not a long read just some different language usage. I think it would be a good read for anyone that has a little extra time... probably a vacation read... in 5 years you'll have plenty saved up for that! If you have any questions on the book don't hesitate to ask. I would be more than happy to help anyone that wants it.

Wednesday, October 7, 2009

Who is the Average Millionaire?

The book of the week was The Millionaire Next Door by Thomas J. Stanley and William D. Danko. Both authors are Ph.D.s and stumbled across some fascinating research which they based this book around. The two surveyed and interviewed thousands of millionaires to figure out what the living habits of the average millionaire really are.

Some Shocking Statistics about these Millionaires:

-The average taxable income for them is $131,000
-They live on less than 7 percent of their wealth
-Many of their occupations could be classified as dull-normal such as: welding contractor, auctioneer, mobile-home owner, paving contractor, coin and stamp dealer
-They invest on average nearly 20% of their household income
-Most of them are homeowners (97 percent) and their average home value is $320,000
-80% of millionaires today are first generation millionaires

That last statistic was shocking to me. There is a huge misconception in society about the wealthy. The media portrays the wealthy as a legacy of the rich, one generation just passes it on to the next and the idea of getting there is represented as just a pipe-dream. The fact that 80% of the millionaires surveyed were first generation millionaires should really open someone's eyes to the possibility of being a millionaire an accessible dream. The other thing the media skews about the wealthy is the living habits. They show millionaires spending money like it's going out of style. They have great big mansions, fancy cars, and more toys than any adult really needs. Real millionaires don't spend like this. The media loves to cover the abnormal... that is why they cover crime, lottery winners, celebrities and so on and so forth. This book does a great job of laying out what a T.V. show about the average millionaire would look like. Just think of it... a man with a slightly above average career, diligently focuses on his finance and investing habits, living below his means, and double checking his budgets before he spends even a $500 on a new television. Not the most interesting T.V. show, however, that is what that average millionaire does.

No matter how much money you make there is one golden rule to accumulating wealth... ready for it?... Live below you means! If you have $5000 coming in each month after taxes then do your best to live on $4000 and then invest the rest. This is the only sure fire "get rich quick scheme"... and it really works. Throughout this blog I give tips on what may make a good investment and why, but you will surely fail investing and accumulating wealth if you do not have the first step completed... live below you means. The average millionaire spends over twice as much time budgeting and analyzing their own spending habits than the average non-millionaire. So focus on not only what money is coming in, but also pay just as close attention, if not more, on the money going out.

Being frugal pays big... A lot of these millionaires are just your average blue-collar entrepreneurial Americans and the way they made it to financial freedom is through frugality. They spend much less on their cars than non-millionaires... in fact the average millionaire buys 3 year old cars. At that point they have a lot of the first 30k miles bugs worked out and they still ride like a new car, but at 75% off the original price. There is no reason to finance out your life... Getting over your head in debt just amounts to unneeded stress and a bunch of "in-the-moment" toys. You can only keep up with the Jones' so long before you realize you are 50 years old with no retirement and just lots of cars, toys, and a big house with no equity. I don't mean to be too brash, but I want everyone to understand the importance of living below/within your means. The alternative is living well off with equity in several properties, a couple reliable cars, travel the world retire early, have the ability to teach financial discipline to your children and live without a lot of unneeded stress!

The book is very interesting and is well written especially taking in account it was written around research. Sometimes research-based books have the tendency to be boring. The Millionaire Next Door has it all right... great data and great case studies to reinforce the main points. Pick it up... I'm sure you'll discover a few helpful tidbits to increase your net-worth and put you on the track to being a millionaire. If you have any questions on the book don't hesitate to ask. I would be more than happy to help anyone that wants it.

Amazon Link to Buy The Millionaire Next Door

Friday, October 2, 2009

It Only Takes a Few Minutes to Get Ahead...

I read another classic book among fortune 500 companies, The One Minute Manager by Ken Blanchard and Spencer Johnson. I was happy with this book. It is exactly what is says it is.... a book that focuses on skills of a great manager and more specifically centered around the idea that the skills can be done in one minute.

The book is written in a fictional story format, however, the principles can also explained in a list format which is what I will focus on for this week's blog. The three key tools used by the manager in this book were The One Minute Goal Setting, The One Minute Praising, and The One Minute Reprimand.

The One Minute Goal Setting- Each employee writes down their goals on about half a page. Something that can be read in 1 minute if needed. I think having goals is the best way to make big things happen. You will have a hard time getting someone from point A to point B if they don't know what or where either one of those points are... so help your team set goals.

The One Minute Praising-
You need to praise your people... The one thing humans crave more than anything on Earth is attention. When you give people attention for doing good things, they want to do more good things. Praising is one of the most affective and simple ways to get a person to do something. Take, for example, a baby, when they are getting ready to take their first steps. At first they may get up and stumble the first time and hit the ground, but parents are around to cheer them on and give them big hugs for their attempt. Then the next day the baby liked that treatment, so they try again... after a few times the baby actually takes their first full steps and is given more praise than ever before! Then the parents use the same "management strategy" to encourage the first words out of a baby, then good grammar, great driving habits, and before you know it you have a full grown kid living in Minneapolis, working 60 hours a week, starting a real estate business and writing a book blog in his little free time.

The One Minute Reprimand- This book's One Minute Manager uses the technique of watching for his employees to do the "right thing." However, when he saw something that was below their ability they would get a reprimand because he wanted to reinforce that they could do better. This is one of the most difficult skill sets to master as a management professional. It is difficult because you need to reprimand a behavior and not the person.

The book gave a clever story of a couple trying to train their dog to do it's business outside. When the dog made an accident on the rug the couple would take the dog and shove it's face in it and then throw him out the window in the kitchen into the backyard. The couple asked if this was a good technique and they were told they were just training their dog to jump out the window after it had an accident on the rug. People, like animals, need to know the ultimate goal before they can try to replicate it. Humans are easier to train than animals because we speak the same language. Once the person knows what the goal is they will try to make it happen for their craved praising. And if you know they have the ability to reach that goal and they intentionally fall short it may be time for a reprimand.

Leading people is a very important skill set! I can't stress how much it can make your life and the lives of those around you more successful. To lead people you just need to leave the bread crumbs... just like the child we were training in the analogy earlier... once the baby was able to walk you don't jump up and down every time they walk for the rest of their lives. You go on to the next skill you would like to train them on... after they have all the skills you are able to train them on they will go on to be as good or better than you... and that is what we want of those around us right? To live great big successful lives? And doing this will make your life easier.... if you train someone to do everything you know how to do, you have an easier load because you have employees that are capable of handling all the responsibilities that at one time were all on your shoulders. Great managers have much more available time than poor managers...

This book has a great story that can really impact a management professional or anyone that wants a little help with leading people. It's a very quick read and written by the same author of the book Who Moved My Cheese which was a great hit on this blog. If you have any questions on the book don't hesitate to ask. I would be more than happy to help anyone that wants it.

Amazon Link to Buy The One Minute Manager