7 Strategies to Get a Job

Get that Job!

Get That Job!  7 Strategies to Boost Your Odds

Hundreds of thousands of students will soon graduate from high schools and colleges across the nation and will seek either summer or full-time jobs.  It’s no secret that the job market continues to be very tight, especially for first-time job seekers.  In many cases, you’ll have only one shot at making a great impression.  Here are seven tips to get you noticed:

  1. Be early.  Expect the unexpected to happen and make sure you arrive early for your interview.  The last thing you’ll want is to start the interview with an explanation about how a traffic jam caused you to be late.  Action plan:  Plan to arrive thirty minutes early.  Wait in the parking lot so as to time your arrival five minutes early.  Use the time to focus on the key points you want to cover in the interview.
  2. Control your image.  Recognize that your very first impression will be visual so a neatly groomed and well-dressed appearance will make a difference.  I realize that crazy hair, facial hair (men only!) and body piercings may still be ‘cool’, but cool isn’t what most employers are looking for.  As old fashioned as it may sound, most employers are still looking for the All-American man or lady.  Action plan: Take a long look in the mirror before heading out on your interview and make sure your overall appearance is congruent with the job you are seeking.  Also be sure to review your Facebook page (and Twitter, Instagram).  You’d be surprised how many potential employers will review it to get a sense of who you are.  Pictures of you at the beach partying hard with your friends might not be the image you want for your employer!
  3. Research the company.  It’s never been easier to learn about the company you are interviewing.  Most companies have some Internet presence through either a company web site or Internet articles.  Action plan:  Develop three to five key points about the company about which you can discuss during the interview, particularly if you can relate to how you can positively impact the company through your job.
  4. Focus on the opportunity.  Too many job seekers focus on what the company can do for them versus how their skills can benefit the company.  Avoid initiating conversations about salary, vacation time or perks and instead focus your comments on how your skills can help the company achieve its goals as well as the opportunity you see for yourself in the company.  Action plan:  To the extent you can get the interviewer talking by asking both good questions and good follow-up questions, you’ll stand out from the pack.  Most people prefer to talk rather than listen so ask the interviewer to describe the job responsibilities; follow with a ‘drill-down’ question like, “Describe the typical workday or work week”.  Do your best to engage the interviewer in a conversation versus you simply responding to his or her questions.
  5. Exude confidence.  People want to work with people who are fun, relaxed, and confident in the way they deal with others.  You can help build your confidence by being prepared for the interview by following the tips in this article.  Also, the more you interview, the easier it will become.  Action plan:  Make a list of at least a dozen companies where you might be interested in working.  Interview first with companies you are least interested in working for and save your best prospects for the end.  Consider your initial interviews as ‘practice’ for your later interviews.  Your goal is to become a master at the interview process.  And don’t be surprised if one of your early interviews is with a company you love and hires you!
  6. Be prepared to promote yourself.  No one’s going to blow your horn for you so you’ll need to be prepared to discuss your unique skills for this job.  Action plan:  Think of two to three personal characteristics that make you a great choice for the job and be prepared to weave them into the conversation.
  7. Say, “Thank You”, in writing.  Most job seekers simply move to the next interview without so much as a thank you to the interviewer for their time.  Others do send a thank you note but rarely is that note handwritten.  Action plan:  Be a standout by writing a hand-written note of thanks to the interviewer on custom stationary.  This assumes you have good penmanship; otherwise it should be a typed note on fine stationary.  Be sure you include something specific that impressed you during the interview.

My partner and our Director of Operations, Greg Weyandt, CPA, says that what employers are looking for is the ‘Wow!’ factor…that something that makes you stand out among all the interviews.  It could be exceptional maturity, being very prepared, asking great questions, being very at-ease during the interview all while focused on communicating that you want that job! 

Stewart H. Welch, III, CFP®, AEP, is the founder of THE WELCH GROUP, LLC, which specializes in providing fee-only investment management and financial advice to families throughout the United States.  He is the co-author of J.K. Lasser’s New Rules for Estate, Retirement and Tax Planning (John Wiley & Sons, Inc.) and THINK Like a Self-Made Millionaire. Visit his Web Site www.welchgroup.com.  Consult your financial advisor before acting on comments in this article.

Wealth Creation

Wealth Creation: Own Your Own Business

Wealth Creation“Wealth Creation—Part 4: Be Your Own Boss”

More and more people are considering pursuit of the dream of owning their own business so they can control their own financial destiny.  It also happens to be the number one path to wealth creation.

Unfortunately, the majority of new businesses fail within the first four years.  Years ago I was the executive producer and host of a cable TV show where I interviewed self-made millionaire entrepreneurs who would share their secrets of success.  I’ll never forget the advice one multimillionaire business owner gave me.  He said the key to success for any business is three things.  The first key is, “Stay close to your numbers.”  Let’s see how we can apply this rule to tilt the odds of success in your favor.

I often hear that start-up entrepreneurs should expect to lose money for the first three to five years.  Nonsense!  Your business strategy should include a ‘plan’ to be profitable your first year.  Two key points here:

  • Before you start your business, you’ll need to develop a detailed month-by-month cash flow projection for the first 12 to 24 months of operation along with a less detailed projection of cash flow for an additional two to three years.  This exercise will suggest how much start-up capital you’ll need.  Technically, you’ll want to follow three sets of numbers on a monthly basis: Balance Sheet, Profit and Loss Statement and Cash Flow Statement.  The Balance Sheet lists all of the business assets, liabilities and net worth.  The Profit and Loss Statement tracks income and expenses to arrive at your profit (or loss).  The Cash Flow Statement tracks the sources and uses of your cash.  Managing your actual income and expenses against your budget will be one of your most important tools for success.  In good times, good cash management is your key to growth.  In bad times, it’s your key to survival!
  • Most new businesses require start-up capital to cover rent, equipment, salaries, etc. until such time as the business revenue can cover ongoing business expenses.  One of the biggest mistakes entrepreneurs make is underestimating these costs.  Often the entrepreneur is seeking capital from either a bank or friends and relatives and they typically ask for what they estimate will be needed, which more often than not, turns out to be inadequate.  Going back for additional funding typically proves to be a much more daunting task because the entrepreneur has now lost credibility from a business management perspective.  To your initial estimate, you should add 50% to 100% because my experience is that you will have underestimated your capital needs by that much money.

This entrepreneur’s second rule for success is, “Stay close to your customers”.  As a start-up entrepreneur, you may not have any customers yet but you do need a detailed written plan of who is your ‘ideal’ customer.  Further, you’ll need to develop a plan for how to serve these customers better than anyone else along with a plan for reaching new customers (your marketing plan).  The most successful businesses build growth based on a product or service niche.  How can you create a unique customer experience?

 The final key to success is, “Stay close to your employees”.  In the beginning, you may serve as the president, secretary, treasurer and janitor but soon you will need to develop your team.  Start by developing an organizational chart based on a successful business five to ten years into the future.  What ‘positions’ would need to be filled between now and then?  Look for people whose strengths counter-balance your weaknesses.  For example, if you excel at sales and marketing, hire someone who is excellent at operational details and managing financial systems.  One lesson I learned in building my businesses is to hire the very best people…people who are self-starters.  They will be more expensive, but they will be worth it.  Once you have great people in place, the best way to keep them is to set up a communications system that allows you to give and receive feedback regarding expectations, progress and ideas for improving the business environment.

Start your team by engaging ‘experts for hire’ including an accountant and business attorney and perhaps a financial planner.  Another excellent source of business talent that you can access for free is through SCORE.  SCORE is a nonprofit association dedicated to helping small business owners succeed.  Both working and retired executives and business owners donate time and expertise as business counselors.  For more information about SCORE, go to www.score.org.

The ultimate key to success will be your passion for your chosen business.  When you find yourself at a low point, it will be your passion for your business and your passion to succeed that will sustain you.

I’ll be writing more about creating wealth with your own business in an upcoming book I am writing for the Get Rich on Purpose® book series. Get Rich on Purpose® is dedicated to helping individuals achieve Financial Freedom through Financial Literacy and Entrepreneurship. To find out more, visit GetRichonPurpose.com

Wealth Creation

Wealth Creation—Invest Like a Millionaire

Wealth CreationWealth Creation—Part 3: Invest Like a Millionaire”

To achieve higher levels of wealth you’ll need to start by learning three basic things:

  • Learn to love saving. A wise lady once told me ‘Sleep on it before you buy it!’  Much of what we spend money on adds very little value to our lives in the long term.  It’s simply ‘impulse’ buying.  Your best strategy here is to ‘automate’ your savings by setting up automatic withdrawals from your paycheck or checking account to your investment or savings account.
  • Learn the difference between bad debt and good debt. Bad debt is anything that you borrow money to buy that goes down in value.  Examples include cars, furniture, appliances, and most credit card debt.  Good debt is anything you purchase that goes up in value or at least holds its value.  Examples include a home, money for a business and, perhaps, student loans.  To create wealth, you’ll want to avoid bad debt.
  • Learn how to invest. Investing can be complicated but it doesn’t have to be.  Start with an automatic monthly investment program described in my last post, Wealth Creation—Part 2.  Now, if you’re really ready to improve your investing skills, commit to reading 15 minutes per day about investing.  Are you willing to do this?  Because this is the minimum it takes to become a great investor.  You’ll be amazed at your knowledge in just one year.  There are lots of books and Internet resources about investing but if you need a good place to start, visit Vanguard.com.  Vanguard is a low cost no-load mutual fund company that has excellent information for the beginner investor.

To become rich, study the rich

My upcoming book, “THINK Like a Self-Made Millionaire”, is based on interviews I had with self-made millionaires. It is the first book in my upcoming Get Rich on Purpose® book series. I wanted to find out how self-made millionaires created their success.  What I found out was that their success paths generally fell into one of three categories:

  • The systematic saver. I recently met the sweetest lady in her early seventies who was seeking help managing her investments because she had just retired.  She had a great life story and one that epitomized the systematic saver.  After graduation, she took a secretarial job with a start-up bank and stayed with that company her whole career as a secretary.  She made a habit of living well below her means and took advantage of all the savings and investment programs the bank offered.  Here’s a person who never made a lot of money but who had the good sense to save for her future.  Amazingly she accumulated over $1 million!  I have seen so many cases of people who simply save their way to financial independence.  This retirement savings approach tends to take twenty to forty years depending on how you invest and how much you save along the way.
  • The real estate investor. In studying self-made millionaires, two groups achieved the highest level of wealth in the shortest amount of time.  The first group is real estate investors.  One of the reasons real estate has so much potential for growth is that it uses leverage so effectively.  For example, if you have a $100,000 to invest and invest in the stock market, typically you’ll buy $100,000 worth of stocks.  However if you buy real estate you could put down, say, $20,000 and finance the balance then use the rental income to pay the mortgage and expenses.  With $80,000 left to invest, you could do this four more times and therefore control $500,000 worth of property.  Eventually your mortgages will be paid off and hopefully, your property will appreciate in value.  For example, if the property grew in value at 3% per year, in thirty years the property would be worth over $1.2 million mortgage free…not to mention substantial monthly cash flow.
  • The business owner. By far the biggest winners in the wealth accumulation game are people who own their own businesses.  Owning a business allows you to use leverage in multiple ways including financial leverage, people leverage and systems leverage.  Lisa Renshaw was age 21 and $3,000 in debt but she decided she would become a millionaire.  She scraped together enough money to purchase a failing parking garage in the Baltimore area.  Not having the money to hire a twenty-four hour attendant, she moved into the garage using a carpet remnant as a bed and kerosene heater for warmth.  She focused on great customer service but she persisted for three years before she was able to move out and buy her second garage.  Today, she owns or operates over 30 garages and is a multimillionaire!   Persistence and determination are key character traits of successful business owners.

Choose your path to wealth and do whatever it takes to learn what you must learn to succeed.  My best tip is to find a mentor, someone who has done what you want to do, and ask them to help guide you. For more information on my upcoming book, THINK Like a Self-Made Millionaire, and other upcoming books in the Get Rich on Purpose® book series, visit GetRichOnPurpose.com.

Wealth Creation

Wealth Creation—The 5 Stages of Wealth

Wealth Creation“Wealth Creation—Part 2: 5 Stages of Wealth”

In Wealth Creation—Part 1, I discussed how to get started investing with as little as $1 a month.  This week, let’s look at the five Stages of Wealth and determine how much you must accumulate to become financially independent.

In my upcoming book, “The Fundamentals of Wealth Creation” (publish date: November 2016), I discuss the 5 Stages of Wealth.  This book will be the second book in my Get Rich on Purpose® Book Series, www.GetRichonPurpose.com. Take a moment to determine which wealth stage category best represents your current financial situation.

Wealth Stage One:  You achieve Wealth Stage One when you are paying all of your bills (on time!) and saving a minimum of 10% of your gross income.  Generally, saving ten percent puts you on a glide-path to becoming financially independent but it often takes twenty to forty years to reach that ultimate goal.

Wealth Stage Two: Here, you are paying all of your bills and the ‘growth’ on your investments is approximately equal to or greater than the amount you’re investing annually.  For example, if you’re investing $10,000 per year, the earnings (interest, dividends and capital appreciation) are also growing, on average, $10,000 per year.  Clearly, this is a significant step up from Wealth Stage One and will take a lot of years or a more aggressive investment strategy.

Wealth Stage Three:  With Wealth Stage Three, your cash flow (interest, dividends and capital appreciation) from your investments is equal to or greater than your earnings from work.  Congratulations, you are financially independent!  You get to choose whether you go to work or not.  For a lot of people, this is their basic retirement goal and happens between ages sixty to seventy.

Wealth Stage Four:  At this stage, investment cash flow allows you to significantly raise your lifestyle.  You’re not just paying your bills, enjoying the occasional night out and a modest annual vacation.  I normally think of this as you having at least two times the cash flow needed for your basic lifestyle and it’s what I refer to as ‘wealthy’!

Wealth Stage Five:  Very few people get to this stage and if you do, you are considered ‘rich’.  At this level your investment cash flow equals a minimum of five times what’s needed to cover your basic lifestyle needs.  You are free to travel extensively, own multiple homes, or become a philanthropist. You’ll also likely need extensive estate and tax planning.

How much is enough?  Achieving Wealth Stage Three

Let’s begin with the end in mind.  What’s your number?  How big of a pot of money do you need in order to retire (Wealth Stage 3)?  Let’s do a simple two-step calculation.  Step 1: Estimate what it costs to pay all of your bills for twelve months.  Step 2: Add a ‘0’ to that number.  For example, if it takes $50,000 to pay all of your bills for one year, then by adding a ‘0’, your ‘number’ is $500,000.  This assumes that Social Security will cover at least one-half of your retirement income needs.  As a footnote, according to the Social Security Administration, approximately 75% of Social Security recipients depend on Social Security for at least one-half of their income.  And approximately 50% depend on Social Security for 90% or more of their income.

If you want a ‘richer’ retirement, you’ll need to accumulate more.  I’m assuming your number is a bit of a shock and may come with some doubts about your ability to accumulate that much money.  I assure you it is possible as I’ve counseled hundreds of families who have achieved this level of wealth.   In fact, in Wealth Creation—Part 3, I’ll discuss strategies for achieving higher levels of wealth.

Retirement Strategies

5 Strategies for an Outstanding Retirement

5 Strategies for an Outstanding Retirement

You’ll likely spend approximately one-third of your life living out your retirement years so you want it to be a great experience.  Having no money or little income is not my idea of a pleasant experience.  Here are five strategies to help boost your retirement income:

  1. Trifecta Investing Strategy. If you fall into the twenty, thirty or forty-year-old age group, this strategy is for you.  When most people think of saving for retirement, 401ks and IRAs typically come to mind because of the income tax deduction you receive for your contribution.  It’s true that qualified retirement plans are one of the very best ways to accumulate wealth, not only because of the tax deduction, but also because your money grows tax free until you withdraw money during retirement.  And that’s when the problem begins.  If your entire retirement is built around qualified retirement plans, you significantly limit flexibility regarding income tax planning.  A better strategy is to accumulate money in different types of retirement ‘buckets’.  If, in addition to your qualified retirement bucket where withdrawals are taxed as ordinary income, you also had money invested in a personal investment (after tax) bucket, during retirement, you get to choose which bucket to draw from in a given tax year.  Depending on the cost basis of the securities in this bucket, withdrawals may be non-taxable, subject to the lower long-term capital gains rates or potentially a loss that can be used to offset ordinary income.  Even better is to add a third bucket, the Roth IRA.  Here, withdrawals are tax-free.  We have one client where we’ve avoided paying virtually any income taxes for more than ten years!
  2. Downsize your home. One of the best ways to improve your retirement income is to move into a smaller less expensive home.  Our number one goal is to have the client downsize so as to eliminate any mortgages while choosing a lower maintenance home, allowing them to win twice by eliminating mortgage payments and reducing expenses.  Even better is if they can downsize and retrieve some equity from their old home that can be used to add to their personal investment bucket.
  3. Home bonus strategy. A reverse mortgage can be an excellent strategy for someone who would like to maximize retirement monthly cash flow.  With a reverse mortgage, the mortgage company guarantees you a monthly income for as long as you live in your home.  If the value of your home drops below the mortgage amount, they take that risk and neither you nor your heirs will owe the mortgage company money at the ultimate disposition of your home.  Note that there are other reverse mortgage options as well.
  4. Work longer; start a new career. Retirement is overrated!  If you can find something you love doing during retirement this is the best choice for a lot of people.  Understand that a little bit of money goes a long way for retirees.  What could you do that would be loads of fun and make you some money?
  5. Choose your Social Security strategy. Give serious thought to when you begin receiving Social Security benefits.  Generally, the poorer your health, the sooner you’ll want to begin taking your benefit.  For those folks with great health, delaying benefits until age seventy can significantly boost lifetime benefits, particularly if you have a spouse.  At the death of the higher-earning spouse, the lower-earning spouse steps in to the higher-earning spouse’s place to continue reaping those big payout benefits.

Ultimate Fitness Quest 2016Ultimate Fitness Quest status report:  OK, I had a set-back last week (week #2).  My goal is to lose 15 pounds of body fat in thirty days.  For week one, I lost 5.8 pounds.  Then last week, I gained 2.6 pounds!  And I thought I did everything right but obviously I didn’t.  It’s a good lesson in goal-setting.  The road to success in achieving goals is littered with potholes and roadblocks.  What defines you is how you handle the obstacles.  If you’d like to follow my fight to get back on track or you’d like to challenge yourself to lose a few pounds before summer, join me at www.UltimateFitnessQuest.com or on Facebook.

Wealth Creation

How to Invest $100

How to Invest as little as $100

Think of someone you know who is rich.  How did they get there?  Well, one day they had a hundred dollars and decided not to spend it, but to invest it instead!  Over the decades I have spoken to hundreds of people who simply feel lost regarding how and where to invest.  They don’t know what to do so they do little or nothing.  Today, I’m going to eliminate that excuse!

How to invest $100 or more

The single most important step to investing is the first step…getting started!  And no, it doesn’t take a lot of money to set up an investment program.  Here are two simple alternatives:

  1. The Obama Plan– Recently, President Obama launched a new savings plan called MyRA. Under this plan, you can begin by investing as little as one dollar per month so there’s no excuse for not getting started.  The money goes into the Government Securities Fund which invests in government bonds and there is no risk of loss.  Interest rates change monthly but have averaged 3.2%.  Contributions are limited to $5,500 per year plus an additional $1,000 (catch-up) if you are age fifty or older this year. .  To qualify for the full $5,500 contribution, your income must be under $116,000 for single filers or $183,000 for joint filers. You can withdraw the money anytime but must pay taxes on the interest earned if withdrawn before age 59½.   Once the account reaches $15,000, you must roll it over to a Roth IRA.  For more information visit MyRA.gov.
  2. The Welch Plan– The Obama Plan offers an investment strategy that has no risks of loss but also pays only modest returns. Most people will need a higher rate of return in order to have a chance of meeting their retirement goals…which I’ll help you calculate in next week’s column.  This means taking on the inherent volatility of the stock market.  Seasoned stock market investors know that the market is impossible to predict in the short term but historically has earned seven to nine percent over the long term (ten years plus).  While there are a number of low-cost, no-load choices, a great choice is Charles Schwab’s One Source Funds.  A large number of these fund options allow you to invest as little as $100 initially plus add as little as $1 per month.  Two choices worth considering are Schwab’s S&P 500 Index fund (symbol: SWPPX; 5-year annualized returns: 10.5%) and their Dividend Equity Fund (symbol: SWDSX; 5-year annualized returns: 7.97%).  The S&P 500 Index fund invests in 500 of the largest companies in America while the Dividend Equity Fund focuses on the slice of the large U.S. companies that have a history of paying dividends.  This dividend-paying strategy generally makes them a more conservative choice.  If you invest in either of these funds, you should plan to remain invested for a minimum of seven to ten years.

My wife likes to use the phrase, “Bloom where you are planted!”  This phrase can be used in many contexts, but here it means start investing an amount of money that you can afford to invest even if it’s $1 per month!  Creating a habit of saving is vital to your ultimate success.

Clearly you should invest where your money has the greatest potential such as your company matching 401k plan, deductible IRAs or Roth IRAs.  Take a look at all of the places you could invest and then prioritize them in order of most powerful.  For example, if your company offers a 50% matching contribution on a portion of your own 401k contribution, start there.  Then, when you get a raise (or bonus), commit one-half of the amount to your retirement savings program.  That way, you receive a boost in spendable income while also stepping up funding for your retirement.  It’s a painless strategy.  Ok, no excuses for not starting your investment program!