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Archive for January, 2008

Top five tips on buying a new car

Thursday, January 31st, 2008

Salesman selling crappy carI generally advise against buying a new car because of the obvious depreciation of new cars. You lose hundreds (or thousands) of dollars just driving the car off the lot. That being said, I do own a new car and for those of you planning on buying one, it really boils down to a few things:

1) Know what you want and research it. Research your car. Research where you will get your car loan. I suggest a credit union.

2) Download my New Car Buying Price Calculator. For things such as the factory invoice price, those can be easily googled.

3) Stick to the calculator, do not let them say there are other necessary fees. There are not. I have bought two new cars in my relatively short lifespan and both times I have told them exactly what I will pay and both times I told them how much I would pay. They both resisted, I got up to walk out both times and both times they recanted and agreed.

4) Do NOT finance through the dealer. The guy in charge of finance will try to talk you into a billion different things. Say no to every single one. He makes his commission on longer warranties etc.

5) Research the internet for sites that give indepth looks at what to do. Here are some good links to read through:

Car Buying Tips

Edmunds (research)

Car Info

Smart Sense Car Buying Guide

Career tip #3 – How to get a raise – Guaranteed best guide to salary increase on the web or at least the most entertaining

Wednesday, January 30th, 2008

cabo with giant margIn an ideal world we would all be paid what we think we are worth and no one would ever have to ask for a raise. Then again in an ideal world I would be in cabo drinking a life size margarita right now. Unfortunately it’s not a perfect world, I am not in cabo, and gas is still 3 something a gallon. Anyway so you’re underpaid and unhappy. You haven’t had any automatic increases you say? Well it is time to take matters into your own hands, so here we go.

Before asking for a raise you should be doing some prep work. First of all you should be asking yourself a few questions. Remember the real goal is to align your paycheck with your value to the company.

Oliver Twist Asking for raise“Am I making a contribution toward my employers goals above and beyond what is expected or SHOULD be expected from someone in your positions?”
This doesn’t mean you are working 14 hours a day. It means that either your employer is demanding more of you than average or you are doing work above average.

“Have I been given a reasonable raise lately?”
If yes, maybe its time to wait a while, if no, then you are a go.

“Am I completely prepared for everything the boss might throw at me?”
Before you go in its good to understand that when you do go in there are three different things that could happen. One, you get a raise. Two, you do not get a raise. Three, you work out a deal where the boss evaluates your performance in a certain time frame and agree to meet back in the future. Ive read some sites on careers that say be careful, you could get fired. Quite frankly, I have never heard of anyone getting fired merely for politely asking for a compensation review.

Ok, so you are sure you are going to do it.

Steps to prepare:

1) Gather up all of the data that you need to present yourself in the most positive light possible.

2) If your company has peer reviews, collect peer reviews.

3) If your company has a development plan then make sure yours is filled out.

4) Gather data about all the things you have accomplished. This is important to have on hand.

5) Decide exactly what you think is a fair raise for your current situation.

6) Research the market for pay rates for your job. Salary.com is a great place to check out what other people withs imilar experience and jobs are being paid in your area.

7) Read your employee handbook. See if there is anything in it about development and pay increases. Its good to know when you actually go in.

8] Try and network with other people at other companies to get a feel for what people are making. Once again, its good to know. On a side note, apparently 8 followed by ) makes a smiley face. 8)

9) Make a list of your current responsibilities in your job. This is something it is good to compare to what you were originally hired on to do. There are cases where people started out doing an administrative or basic type job and have moved into doing jobs that include much more responsibility but are still getting paid based on the original salary curve!

10) Read up on negotiation tips.

Ok, now you have all the things you need. Next up on the agenda is to schedule a meeting with your boss. Its good to have specific time set aside so that you get your fair share of time. You don’t want to get into a situation where you just drop in on your boss and try and squeeze it in.
worried man asking for raiseMeeting with the boss:

1) Be direct. Say something like “I scheduled this meeting today because I want to discuss my performance and compensation with you.” Raise is a harsh word for managers to hear so don’t say it.

2) Review your contributions and responsibilities. Be as specific as possible and show how your contributions have really benefitted the company. They aren’t going to want to give you more money for no reason.

3) Stress your loyalty to the company. They want to know if they give you more money you are going to show them loyalty.

4) If you are pressed on it, show data comparing your salary to that of other people in similar situations. The truth is most employers follow things such as salary.com as well.

5) Remember chances are you will not get an answer right away. Remember to be respectful and thank him for his time. You want your boss to be your ally, not an enemy.

What not to do:

1) Drop in on your boss without scheduling a meeting. You really dont want to get cut off halfway through your pitch

2) Make it personal. You want to stress value to the company but you dont want to try and guilt trip your boss.

3) Being general. “Ive been working hard and doing well and would like a pay increase.” Thats sort of like saying “um so, like, give me money, mmmk?”

4) Stressing NEED instead of value. You do not want to tell your boss “I can’t make house/car/child support/crack dealer/whatever payment unless I get a raise”

5) Threaten to quit (unless you really do have another job lined up). Chances are this will backfire and then instead of rolling in a money pile you will be hanging out at the local commune.

6) Throw a fit for any reason. Remember calm is power.

7) Ask for a raise at an inappropriate time. If the company is cutting back and things aren’t going well, DON’T ASK FOR A RAISE.

Now lets examine the three possibilities and figure out what to do next:

1) You get the raisePile of cash -Thank your boss. Be happy. Buy a puppy. Then throw a party and have a beer. Buy your friends a beer. Buy me a beer. Take your significant other out to celebrate. Do whatever you want, be happy. OH and keep working hard.

2) You are told straight out no
-Ask your boss why and what you can do in the future to deserve further compensation. Inquire if there are other ways, sometimes you can negotiate a bonus or more time off or something along those lines. If not and you are unhappy, it may be time to start looking for another job.

3) Not right now
-Ask what needs to happen for it to happen. Ask what you can do and if there can be progress tracked. Set tangible goals to figure out further action. Remember that there is a difference between an employee who is doing a job as expected from a good performer and and employee who is really giving superior performance. They will most likely be looking for the second to give raises to.

Abbey Grand Bru Belgian Ale When it is all said and done, regardless of what happens you will be glad you did because there is nothing worse than working thinking you are not being treated fairly and having no direction. This way you will at least understand where you stand in the companies eyes which will allow you to re-evaluate your situation. I can’t reiterate enough how important it is to take responsibility for your career, no one else will do it for you.

Good luck. And if you get a raise because of this article, my favorite kind of beer is Belgian Ales. Abbey Grand Cru if we are gonna get specific.

The Hannah Montana Super Bowl effect

Monday, January 28th, 2008

I just got done seeing an article about some super bowl tickets selling for 15k and it reminded me of the recent Hanna Montana/ whoever Cyrus craze where people were paying these outrageous amounts of money in ticket bidding wars. Now, one tenant of sales is that the more valuable you perceive something to be to other people, the more valuable it becomes to you.

tickle me elmo blingingAnother good example was a few years back there was some sort of insane Tickle Me Elmo craze where parents were spending hundreds of dollars getting these toys right before Christmas.

The point is, next time you really want something and are getting caught up in chasing after it, take a minute and think about what it is really worth to you. A little trick I use is to think about how many work hours something costs. Do you really want to spend 3 days working for a talking sesame street doll? or a month working to take your child to see a concert?

What effect does the federal rate cut have on Britney Spears custody battle?

Friday, January 25th, 2008

My girlfriend is an avid supporter of E! network (or it could have been ET, I am not sure to be honest) and so I get a healthy (or unhealthy, depending on who you ask) dose of pop culture every day. Anyway they made a quick mention the other day of ‘The Federal Reserve cut rates, what do celebrities think of the economy?’ Well, I’m pretty sure most celebrities don’t care, but I can tell you what it means for you.

First off, what happened?
Earlier this week the Federal Reserve cut the prime lending rate by .75%, which is the interest that banks charge each other for short term loans.

How does it affect me?
The main benefit to consumers is that interest rates on almost everything will go down. Because banks are charging each other less, they can also charge you less. Mortgages, car loans, and even credit cart interest rates will all go down. This is great news if you are planning on making a big purchase in the short term. In fact thats what they WANT you to do…

So what is the idea behind a rate cut?
The idea is to free up peoples money so that they keep buying goods and invest in the stock market to keep the economy strong.

There are pros and cons to doing so and it really is just a temporary fix, but that will have to be the subject of a whole separate article.

Dont get screwed by big mutual funds

Wednesday, January 23rd, 2008

I was reading my favorite weekly football column called TMQ and he did a blurb about mutual funds that hit the nail right on the head:

Suppose the General Manager of the Miami Dolphins Awarded Himself the Same Bonus as the General Manager of the New England Patriots: Last week, this story appeared buried inside the business pages of The Washington Post. Why wasn’t the story on Page 1? The Post reports that the blue-blooded five, Wall Street’s five top investment banking houses, awarded their management $39 billion in bonuses for 2007 — a period when those firms combined to earn investors about $11 billion in profits. Merrill Lynch lost $8 billion in 2007, Morgan Stanley $3 billion and Bear Stearns $230 million, yet the executives of these companies were showered with billions of dollars in bonuses. Otherwise, they would refuse to do any work! Which, apparently, would be in shareholders’ interest. Merrill Lynch and Morgan Stanley could have done better by their shareholders in 2007 by simply purchasing Treasury bills; a software program designed to make simple conservative investment decisions about market-following mutual funds would have performed better in 2007 than the top management of most investment banking houses. And the software program would not have paid itself billions of dollars in bonuses for screwing up! (TMQ owns no stock in any of the mentioned firms.)

It’s one thing when profitable firms shower money on their CEOs and other top brass; often the amounts are indecent, but as long as shareholders come out ahead, the executives have at least some justification for their windfalls. But in the modern milieu of corporate kleptocracy, even when the company does terribly and the CEO makes decisions that blow up in the firm’s face, the CEO awards himself hundreds of millions of dollars, anyway. Why is this not seen as white-collar crime?

Last week’s buried Post story included this priceless quote: “‘To many people, [the bonuses] will be shocking and questionable,’ said Jeanne Branthover, managing director of Boyden Global Executive Search. ‘People in New York in the world of investment banking will understand it. It’s critical that pay is still there or you’re going to lose really good people.'” Beyond that executive headhunter firms such as Boyden have a self-interest in running up CEO pay — this can increase the search firms’ headhunting commissions — consider the reasoning: OMG, we can’t lose the really good people who cost our shareholders billions of dollars with dim-witted decisions! The notion that top corporate managers must be paid fantastic amounts because they possess incredible, astonishing expertise often is used to justify CEO pay, even when the managers who claim the incredible, astonishing expertise make foolish decisions. “We’ll put billions of dollars of money entrusted to our care into subprime gimmick mortgages backed by no documentation of income; my incredible, astonishing expertise tells me this is totally safe!”

Today the market fell sharply, while Wall Street executive bonuses rose in futures trading.
If corporate managers who screwed up received $5.85 an hour, the federal minimum wage, for the year in which they screwed up — that is, if their wallets were at risk when they perform poorly — then they might fairly argue for huge bonuses when they perform well. But there is no evidence that the people who made the big investment calls on Wall Street last year (except at Goldman Sachs, which avoided the subprime mess) are any better at what they do than people chosen at random off a Brooklyn street. You bet “people in New York in the world of investment banking” will understand huge executive bonuses paid in the same year as huge losses. What’s happening is basically a hustle, intended to enrich the executives while separating the investors from their cash. “People in New York in the world of investment banking” understand that, all right!

Pretty unbelievable… but then again I have been railing against actively managed mutual funds for quite a while.  They are making much more money on you than most people realize.

Career Tip #2 – Be organized

Wednesday, January 23rd, 2008

Dont be messy

This is something I am traditionally not great at. I have always just sort of taken care of things as they come and sorted things when I needed to. As I get older and older this works less and less. If I had a nickel for every time I said “I cant find…” I could buy half the stock in google.

There are a lot of reasons to get organized but lets go over a few:

1) It looks more professional
A clean desk and working environment makes you look (and feel!) more professional. Same thing with car and house. I don’t think I need to go into a lot of reasons why thats important.

2) Its easier to find things
There are few things more frustrating than trying to find some document that you put somewhere but have no idea where. I have a bad habit of misplacing bills and then forgetting about them. Not good.

3) It will save you time, money, and a lot of stress
And in more ways than just *ahem* avoiding late fees. There was a CD that in my college days I think I bought THREE times because I had no idea where it went. Well in relation to your career, lets say you have to leave on a business trip and you need all your business shirts. Now where is that black one? Is it in the pile of laundry? No? Ok maybe under the bed? No? Better go hurry and buy something to wear…

4) Studies have shown organized people earn more and are more likely to be promoted

Most career advice sucks

Monday, January 21st, 2008

…and by that I mean either obvious or just plain wrong. I have seen a lot of career advice on the internet and quite frankly a lot of it is BS. Here are some of the gems I found from various blogs, msn articles, and webzines:

“Be innovative” aka “Be creative” aka “Try new things” aka “..introduce new ideas”
-Written a thousand ways, and always I respond: ‘Ya think?’
“Volunteer for boards”
-Im not sure about you but there are no ‘boards’ at my work to volunteer for. Oh and the kind of companies that have boards generally SELECT people for them.

-“Don’t ruin your reputation”
-And here I thought getting super drunk and dancing around on the table at the company Christmas party was a good idea.

-“The best strategy is to just be the best in your area. That makes you indispensable”
-Wrong. In fact, I’ll give you a bunch of reasons why:
1) I worked at Hewlett Packard for six years. During the first threeish years I worked there, I did very little more than I was asked. Sometimes not even that. For the last three years I worked there I worked my ass off. During the last year I was there I was working on a large project and people around me were dropping like flies during the layoffs. I was originally supposed to be support for the project but because of the layoffs I turned out to be the only engineer on the project. Keep in mind I was in college, and so receiving college level pay, I was not a huge liability. Just as we finished the first phase of the project I was laid off. I was the ONLY engineering resource left on the project and the only one who knew fully how it worked. And I was let go before I could finish completely or do any documentation . There is no such thing as being indispensable. It doesn’t matter what you are doing or what you are getting paid or where you are on the ladder.
2) Now, its a good idea to be an expert in one area but you should also understand as much as possible in all aspects. Being rounded is a good thing. What if your area of expertise goes away, what then?
3) Getting pigeonholed into doing one thing all the time sucks. You know Bob in department B thats been doing the same thing for 30 years….do you really wanna be him?
Dont be Bob

“Do what you were good at in school”
When my dad was in college he was pushed hard by councilors to go into physics because he was REALLY good at it. As it turns out he hated working in a lab and went on to do other things. Just because you are really good at something doesn’t mean you should do it. This problem is particularly big when still in college. I switched majors somewhere in the range of four times before I finally settled on something. Just because a class is fun and you are good at the subject does not mean you should bank your life on it. Being good at something in college does not equate to real life success. Plus, there are very few jobs directly related to drinking beer.


Diversification and hippies with beads

Friday, January 18th, 2008

Recently at work a coworker was in the break room talking about how they have a “fully diversified portfolio.” Because I am a smart ass, I asked them how I could convert my partially diversified portfolio into a full diversified portfolio. She of course had no idea how I could do so because, well, she had no idea what she was talking about. So I thought maybe it would be a good time to give a good overview about what exactly this means.

The basic idea is very simple: invest your money into a bunch of different places so that you don’t have all your eggs in one basket. To take it a step further it generally means spreading your investments around into different investment areas such as stocks, bonds, mutual funds, money markets, gold, real estate, and the hippies down the street selling beads. If I were you, Id stick to the first few.

Hippies vs Stock

There are a few different types of diversification:

Horizontal Diversification:
This is when you diversify between same type investments. So this is like buying stock in Microsoft and Enovia.

Vertical Diversification
Vertical Diversification is the investment between different types of investment. It can be a really broad diversification, like diversifying between bonds and stocks, or a more narrowed diversification, like diversifying between stocks of different branches. This gives much more protection against changing economic conditions or say the collapse of the stock market.

As a general rule the upside of diversifying is that you have protection from losing all of your investment should something go wrong with one company or one sector. The downside is that the average of all the investment parts will always be below the return of the top performer. Stocks have the greatest upside, but also can have a huge downside where as some things such as bonds tend to be lower performers but stable. Just one more thing to think about.