Should you lease a car?

Posted on by
4
Should you hire someone to mow your lawn? This seems like an innocuous question, right? But the answer to this question can teach you a great deal about personal finance. Here are the classic answers to the “should I hire someone to mow my yard” question:
  1. Of course, your time is worth more than what you can pay someone else to mow it for you.
  2. No, it’s an absolute waste of money, and you can do it yourself.
Neither of these classic answers are actually the best answer. In my opinion, you earn the right to make this decision. If you are broke and/or are in debt, then you haven’t earned the right to make this decision. So therefore the answer is do it yourself. If you have earned the right to make the decision, then I still don’t think it’s a money decision. I think it’s a lifestyle decision. You don’t want to mow your lawn? Cool with me. Pay someone to do it. I don’t think it’s a poor financial decision at all, as long as you’ve earned the right to make the financial decision. I feel the same way about leasing a car.
I received this email the other day. Check it out:
Soooo…. I was having a vehicle discussion with my brother yesterday and I mentioned to him that I might look into leasing my next vehicle and my mom chimed in to say that was a terrible idea because in the end, you don’t own anything.  I’m not that concerned about having something of “my own.”  Should I be?
I’m 30 yrs old, not married, and the thought of a newer vehicle (aka maintenance-free vehicle) sounds pretty good to me!  Others I know lease and the idea of having something newer every couple of years for that reason of having less maintenance with a newer vehicle would be nice (I probably have to have something “major” done every year, if not every other, i.e. new brakes, electrical issues, steering column something or other, new tie rods, etc.).  I don’t necessarily need a brand new vehicle for looks or anything — I’m not concerned about that.
My current vehicle is nearly 10 years old (I’ve had it for about 5), has 137K miles on it, and I will have it paid off this year.  I plan to drive it as long as I can but want to have something in mind for when/if I have to look at a “new” vehicle (rather than be in a fire-drill situation where I have to make a fast decision if something happens to my current vehicle and in the end not knowing if I made the best financial decision for myself or not).
Can you identify some pros & cons to leasing vs buying for me please?  I’m trying to educate myself on this topic so I know what to do in my situation when the time comes.
Thanks for your help in advance!
Lauren
There is a not blanket answer for the question “Should I lease a car?” Whereas some financial experts will tell you that it’s a waste of money to rent a car, I completely disagree. That being said, I personally will never lease a car. I hate having a car payment. I don’t care whether the car I’m driving is “under warranty” or not. And I don’t care about having the latest, greatest car. I’ve earned the right to feel this way.
If you constantly want a new car, want it under warranty, and don’t mind having a car payment, then consider leasing…if of course you have earned the right to choose. If you have a ton of debt, several other monthly payment obligations, and you don’t know what the level of your financial stability will be in the near future, then you gotta stick with the car you have.
The reality is that, in a vacuum, you shouldn’t lease. The down payment plus the renting plus the constant payments equals generally not a good idea. But we don’t live in a vacuum. I don’t think that leasing makes financial sense. But having helped thousands of people over the last 14 years, I know that “it doesn’t make financial sense” isn’t always the divine directive that it should be. I can tell you that it doesn’t make financial sense, but if you value a low monthly payment, a relatively new car, and a car that’s consistently under warranty, do you really think that I’m going to convince you to not lease with a simple “it doesn’t make financial sense?”
I don’t think you should eat red meat. I don’t think you should smoke. I don’t think that you should use recreational narcotics. So what am I supposed to do, say screw you and wish you luck? No. I need to help you operate your financial life within the constraints of your lifestyle preferences. It’s the financial abstinence conversation. I’m never going to convince you that not driving a new car is better than driving a new car. It’s not going to happen. Therefore my solution is simple: earn the right to make the decision. If you don’t earn the right, via sound financial principles, then you don’t get to indulge your preferences.
So it looks like this. If I got to choose your car acquisition method, then I would choose the following in order:
1. Pay cash for a used car.
2. Pay cash for a new car.
3. Buy a used car with a loan.
4. Buy a new car with a loan.
5. Lease a new car.
6. Don’t ever lease a used car.
This list is based on what I value in a vehicle. It also happens to make the most financial sense. But if you value different things in a vehicle, then just be smart. Earn the right to indulge your preferences. Otherwise, you will be forced to drive what you are driving for much longer than you want to drive it.

How much should you spend on clothing?

Posted on by
8

 

“You look like a million bucks!!!” – A friend of yours complimenting you on an outfit that you love.

Clothing, whether you like it or not, is a necessary evil. In order to walk out your front door, go to the grocery store, and go to your job, you need to hide your genitals. Laugh if you like, or stop reading if you are offended, but it’s the truth. Clothing, from the very beginning was to meant to cover your “areas”. Some people feel compelled to do this with style and panache, while others choose to take a utilitarian approach. Neither approach is right or wrong; they are just different philosophies. This post is for those that enjoy looking nice. If you don’t care, then you don’t care. I’m not judging. You just don’t care.

What you might not realize is that even if you care, you may not have the right to care. If you aren’t in a financial position to care about clothing, then whether you actually care or not, is trumped by your inability to do anything about it. To some degree, this is the same way I feel about smoking, drinking, fine dining, or art. Arguably, they are all vices. Whereas clothing is more essential than tobacco usage and alcohol consumption, it’s your financial stability, or lack thereof, that should truly guide your decisions on all accounts.

But I digress. Back to clothing.

Call me shallow and clueless, but I’m convinced that personal style is important. This doesn’t mean that you have to spend like a moron to complete your look. I just think how you present yourself is very important, especially in a professional setting. Recently, Harris Interactive conducted a survey of more than 500 HR professionals. The survey revealed that 90% of HR pros believe being well groomed is key to making a strong first impression and setting yourself apart from less tidy competitors. When I see someone with cool shoes, cool glasses, or a nice dress, I don’t think “wow, those are expensive”. I think “wow, they care.” I happen to think that your business/career wardrobe is an investment. But I think that you should plan your purchases wisely. This post will help you do that.

The Numbers

Pete the Planner’s Ideal Household Budget allocates 5% of your household income to clothing. This is assuming that you live in a debt free house. It’s much much harder to allocate 5% of your income, when you are still hypothetically paying for that great handbag that you bought last March. Here’s what 5% of some different incomes looks like:

$40,000 gross is about $28,000 net. Clothing budget $1,400/yr

$60,000 gross is about $42,000 net. Clothing budget $2,100/yr

$100,000 gross is about $70,000 net. Clothing budget $3,500/yr

$150,000 gross is about $105,000 net. Clothing budget is $5,250/yr

What’s included in the clothing budget?

Everything. Clothes for you. Clothes for your kids. Clothes for your spouse. Workout clothes. Work clothes. Casual clothes. Bridesmaid dresses. Rental tuxes. Dry cleaning. Clothing repairs. Shoes. Handbags. More shoes.

You may have been excited by the raw numbers, but the “what’s included” section may have brought you back to earth. Like I was saying, this requires planning and forethought. The first step in my opinion? You MUST take care of your current clothing.

Tips for making clothing last longer

  1. Clean, polish, repair- Grandpa Dunn always said “you will take care of your bike the way you take care of your car.” He meant that you must take care of the things that you buy, no matter the cost.Do you launder your clothes correctly? Do you regularly clean shoes and bags? Do you repair shoes and clothes when they are broken? You should do all of these things. Don’t treat your clothing poorly. You spend 5% of your budget on it!!!
  2. Add to your rotation- I used to have only one good suit. It was wearing out quickly because it was doing all the work. I bought another suit that helped split time with my original suit. This extended the shelf-life of the first suit, and helped me maintain the new suit. I eventually added another suit, and so on and so forth. All of your suits don’t have to be high end. Hell, none of them have to be high end. But you should probably read tip #3.
  3. Sometimes quality matters- Some clothes are crap. This isn’t me being a jerk. This is me being a realist. Some clothes look great, but are made poorly. They will get you by in a pinch. Sometimes it makes sense (when your budget calls for it) to buy business formalwear from a “warehouse” type store. However I believe that you can get more use and better effect from a nice clothing store. I like to support the local designers in my town. One of my favorite places for high quality clothing at great prices is J Benzal. (Check em out. They have a great online store.)

Starting from scratch can be intimidating

Let’s say that you are starting your first job. Or better yet, let’s say that you decide that you want to kick up your style a notch. How should you get started? Can a person making $40,000 actually build a wardrobe? It takes strategy. That’s why I’m called Pete the Planner. I plan EVERYTHING.

Cheap, good looking stuff is the key. Some of my favorite stores, for men and/or women, are Uniqlo, H&M, and Gilt. Make a list of things that you need, and then use sales to your advantage. Buying things on sale is great when you actually need what you are buying. For gents, you need one or two suits, five dress shirts, five to seven ties, a pair of khakis, a pair of black pants, a pair of brown shoes, a pair of black shoes, a brown belt, and a black belt. That’s it. That’s all you need to get your wardrobe started. Ladies….I’m not even going there. However, I would love for you to leave comments on what you find to be the equivalent of the men’s list above. What are the essentials?

The bottom line is that you need to plan your clothing purchases. If you need to spend more than 5% of your take-home pay, then cool. Just spend less on some other budget category.

Final thoughts and tips

I spoke with Nikki Sutton (left), interior designer and fashion advocate, she is easily one of the most stylish people that I know. But while her look is distinct and powerful, it doesn’t scream “I just dropped thousands of dollars on clothes.”

She feels quite strongly about clothing’s role in her career, “My outfits influence how I feel about myself, how others perceive me and most importantly, provide me a daily opportunity to be creative, to succeed and to fail. I think of my clothing purchases as investments in my personal brand.”

She’s right. Caring about how you look is important. It’s not vain. And it’s not stupid if you do it within your budget. Nikki shops on a budget, “That sweater may have only cost $20 however, by NOT buying it, I mentally reserve that $20 to put towards a pair of bada$$ shoes I simply can not live without. Actually, I weigh everything I buy against the latest pair of shoes I can’t afford: If I don’t go out to eat tonight, that’s $30 I could put towards something I have been wanting.” That’s just smart. The Pete the Planner Ideal Household Budget encourages you to move the pie pieces around. Make choices. Don’t just say yes to everything.

Bonus tip: Buy clothes that fit. A well-fitting, tailored suit, shirt or pair of pants can make all the difference in the world. Clothes that fit don’t cost you more money. And if you can’t find something that fits the way it should, then find a good tailor. Many dry cleaning places will tailor your clothing for a reasonable price.

The main takeaway is simple: don’t ignore this seemingly simple budget category. Although clothing should only account for about 5% of your budget, it’s quite a challenging process to make sure that you arrive to that 5% safely.

 

The top 2 celebrity endorsement equity deals of all time

Posted on by
Reply

What’s the best part of being a celebrity? The fame? The VIP status? No, I would argue that the ability to slap your face on a product, and get paid for doing absolutely nothing. In other words, being an endorser. While people like Kelly Ripa and Peyton Manning make millions of dollars on endorsements, some celebrities choose to use their business sense, to make cents. And by cents I mean hundreds of millions of dollars. Here are the top two craziest endorsement deals of all time.

  1. 50 cent- When Coca-Cola bought his Vitamin Water drink, Formula 50, Curtis Jackson (50 Cent) made somewhere between $100-$400 million on the deal. Galceau, the original manufacturer of Vitamin Water, had hired 50 as an endorser and drink creator, and he chose to take his compensation in stock. That was a really good idea. He got rich and didn’t even have to die tryin.
  2. David Choe- He’s come a long way from tagging bridges. Famed graffiti artist David Choe painted murals in the Facebook world headquarters in 2005. Instead of accepting cash to paint the murals, he chose to take his compensations in stock. His share of Facebook is rumored to be worth $200 million. Not bad for a vandal turned artist.
So the next time you are famous and are offered money to endorse a product, consider taking equity shares instead.

There has never been a better time in the history of America to buy a home

Posted on by
3

Mark the day. I’m officially bullish on the housing market. I believe that we have hit bottom on both interest rates (within a few bps) and residential real estate prices. Of course there are pockets all over the country where prices haven’t completely bottomed out yet (e.g. south Florida). And there are various statistics that still point the other way. But the reality is when the numbers officially point to the turnaround, then the turnaround already happened. I think that time is now. And hey, if Cision wants to name me the fourth most influential personal finance expert in the nation, then I might as well use my influence. Right?

Don’t stop reading and call your REALTOR. Read this whole post, digest it, and then evaluate how, or if, it affects you. And if you skip the bottom part of this post that discusses who should buy and who shouldn’t, then you will get what you deserve. That’s not a good thing. Your diligence in trying to understand what I’m saying is crucial.

The two measures that support my assertions are interest rates and housing prices. Let’s take a close look at both.

  1. Interest rates- Mortgage rates remain at historic lows. It has never been less expensive to borrow money to buy a home. According to the chart below (courtesy of mortgagenewsdaily.com), rates have fallen consistently since 1980. My best guess is that mortgage prices will stay very low for the next 12-18 months. To me, this means that 30 year fixed rate mortgages will stay well below 5%. Rates are currently in the mid 3% range. The lower the rates, the lower your payment will be. Or the lower the rates, the more home you can afford. You decide which route you would like to take. Just stick to my 25% rule. Keep reading. Look at the rates over the past 40 years (below).
  2. Housing prices- The housing market crash is now a good thing…if you are wanting to buy a home. Inflation-adjusted housing prices have returned to normal levels. They were absurd from 2002-2007. Those housing prices were driven by banks lending money to people that never should have been able to borrow money. This drove demand, thus prices increased. It was basic high school economics. But now lending has tightened, foreclosures have driven prices down, and the realistic capitalist in me knows that this is a good thing. I hated seeing people lose their homes. But I don’t hate seeing people get denied loans that they shouldn’t get. It’s not a matter of sympathy. It’s a matter of economics. If everyone starts getting loans again, despite the fact that they shouldn’t, then we will repeat the housing market crash. The big banks have a small amount of culpability in the housing crash, but I believe that the majority of blame lies with the consumer. That is unless you believe that McDonalds is liable for obese America.

Why mortgage rates matter

Let’s examine a current interest rate (3.75%) and a “normal” interest rate (6.0%). Below you will find the first 24 payments of a 30 year fixed rate mortgage for each rate. The comparison is meant so show the relative affordability of today’s mortgage rates.

The first 24 payments at 3.75% 30 year fixed rate mortgage

The payment of $926.23 is acceptable if your net income is $3704.92 or more per month (based on Pete the Planner’s Ideal Budget). That translates into a gross annual household income of about $60,000. Thus a family with a $60,000 household income can afford a $200,000 mortgage because the mortgage payment based on a 3.75% rate ($926.23) is 25% of their household income. The 25% allocation towards housing is the foundation of being able to truly afford home ownership. But it’s not the only factor. More on that later.

The first 24 payments at 6.0% 30 year fixed rate mortgage

The payment of $1,199.10 is acceptable if your net income is $4796.40 or more per month. That translates into a gross annual household income of about $75,000. Thus a family with a $75,000 household income can only afford a $200,000 mortgage if interest rates were at 6.0%

Additionally, getting a mortgage at 3.75% versus getting a mortgage at 6.00% will save you $98,233.15 over the life of the loan. That’s nothing to scoff at either.

Depressed housing prices

Sounds depressing, right? Wrong. Depressed housing prices means that homes are more affordable than they have been in the last several years. In fact, sales prices have depreciated 25.2% over the last 5 years in Indianapolis, IN (for example). Homes aren’t only for sale, but they are now ON SALE. You can use the historically low mortgage rates to buy more home…if you so choose.

Of course there’s a big but

Are you excited? If so, things are about to get real. All the above information is great, but we are neglecting one major factor. Should YOU buy a home?

There are two groups of people: people who should buy a home, and people who shouldn’t. This isn’t measured once and judged forever. These two groups are constantly reassessed. It’s quite possible, likely, and encouraged that someone who is in the “shouldn’t own” camp on February 1st, 2012, could find himself in the “should own” on February 1st, 2013. If you can’t afford a home now (by my measure, not the banks), don’t get angry. Just get going. Put yourself in a position to be in the “should buy a home” group.

There are three main factors to consider when assessing your ability to afford a home. We dealt with the foundation factor earlier (mortgage payment at 25% of your net household income). But there are two other factors.

  1. Mortgage payment no more than 25% of your net income- While you can get approved for more, I suggest that you try to keep your allocation to 25%. In fact, just buy less house. Don’t push the limits. If you “underhouse” yourself, then your life can be much more fun.
  2. Down payment of 10%- Yes, I realize that you need 20% equity to prevent Private Mortgage Insurance (PMI). But there are other ways around that. My 10% requirement is based on the fact that if you can’t afford to scrap together a 10% down payment, then how are you going to afford the expenses of a homeowner? How are you going to be able to replace that furnace? How are you going to be able to keep your yard looking nice? How are you going to be able to afford an increase in property taxes? If you can’t put 10% down, then don’t buy a home this time around.
  3. Stay in the home at least 5 years- You expose yourself to great risk when you move into a house on the premise of moving again within five years. Not only was this a popular strategy during the real estate boom of the 2000s, but it had a name: starter home. “Oh, we’ll just move into this house for a couple of years until we can afford more house.” Wha wha what?!?!?! Your goal should never be to constantly afford more. A grounded person’s goal is to constantly need less. Be a homeowner to own the home…long term.

Other considerations

There has never been a worse time to get an Adjustable Rate Mortgage (ARM). If rates are at historic lows, then that means that they are most likely going to rise. ARMs adjust every 3, 5, or 7 years. This means that your mortgage rate, if adjustable, will rise just when mortgage rates find their “normal level.” You don’t want to be in the middle of this normalization. Get your 30 yr or 15 yr fixed rate mortgage now, and leave the ARMs for people that can’t read historical rate charts.

Be smart. Don’t grow into your payment. I said that the housing market is coming back, not employment. Many a young person has put him/herself in a terrible spot by projecting desired income and using that information to make a housing decision. If you have the 10% down payment, then just follow the 25% of household income rule, and you can’t go wrong.

Did you accomplish anything in January?

Posted on by
1

January is over. Gone. Done.

How’d it go for you? Did you accomplish anything financially? Did you go backwards? You need to evaluate your progress towards your financial goals today. Take time to access your progress. If you failed to set goals, then you failed. If you failed to reach your January goal, then you failed. If you fail to set a goal for February, then you fail. Stop failing, and starting progressing. You start by setting a goal for February, and then you start trying to win weeks. By win weeks, I mean make wise financial decisions for an entire week. These decisions should lead you towards your February goal.

This is how I think: you need to win three weeks to win a month. You need to win two months to win a quarter. And you need to win three quarters to win the year.

What are your goals for February? Do you want to have saved another $500? Do you want to pay off $1000 more debt? Do you want to ask your boss for a raise? Whatever it is that you decide, write it down and get to work.

I’ve got a really cool partnership that I’m going to announce in February. The good news is that this announcement will help you set and achieve your goals for March. Just make sure that you take care of February, so that we can work together in March.

Pete the Planner’s guide to selecting the right job

Posted on by
2

Last week, a dear friend of mine was at a career crossroads. He had a job, but was inline to be offered two other jobs with two other well-respected companies. He was torn. He was stressed out. And he was losing sleep over the prospect of making the wrong choice. His current job paid well, it was in his dream industry, but it still left a lot to be desired. One of his suitors offered to match his current pay, but the health insurance benefits became an issue due to their added expense. The other suitor offered to pay more, but the position presented some challenges of its own. Don’t get me wrong, he was in the midst of “good” problem, but a problem none the less.

He needed an objective way to make an informed decision. He would be foolish to accept the highest paying job based solely on the fact that it is the highest paying job. This was his career that we were talking about, not just a paycheck. Assuming that you aren’t willing to take just any job that you can find, selecting the correct job is vitally important to your financial life. There are times when income is all that matters, but for your career’s sake, letting the income guide your path is a really bad idea.

There are several factors to consider when selecting a job. Ignoring the “other” factors will often result in leaving a job after just a couple of years. Money isn’t everything. And for that matter, base salary isn’t the only thing you should consider in regards to money. Below you will find what I feel to be the ten most important factors. They are in no particular order.

  1. Base income- Traditionally, base income is the very first factor in whether or not you should accept a new job. We’re talking dolla dolla bills, ya’ll. Don’t be ashamed if all you care about is base (guaranteed) pay. I get it. There are times in life when your base income is all that matters. However, I urge you to think bigger. The longer you have been in the workforce, the more you will care about other things.
  2. Additional compensation- Will your potential new job allow you earn commissions, bonuses, or overtime? If so, you need to fully understand how difficult it truly is to earn this additional comp. Don’t just take the hiring manager’s word for it. Ask to speak to someone else in a similar role, and make sure that the compensation claims actually are possible.
  3. Income growth potential- Some jobs will only allow you a “cost of living” salary adjustment from year to year, while other jobs will allow you to earn substantially more money as your role increases. Don’t take the higher paying job now, if the lower paying job can be higher in just a couple of years. Be sure to think long term.
  4. Health insurance benefits- Health/dental/vision insurance benefits are not created equal. Don’t take a job unless you have fully investigated the insurance benefits that come with it. I have seen several instances of people accepting “higher” paying jobs, only to find out that the higher cost of insurance caused the new job to be lower paying.
  5. Retirement options- Does your new job have a retirement plan? If so, does the company add money to the plan for you? Will you have a pension? A pension is MUCH different than a 401k. Make sure you know what you are getting yourself into.
  6. Equity options- Does your potential employer offer stock options? Can you own part of the company? I have had several friends take jobs with tech startups based on the equity shares they received. Not only did they get a job, but they were given partial ownership of the company. This isn’t all roses, though. Often times this sort of benefit is given when job stability is in question.
  7. Professional development- Is your mind turning to mush at your current job because you are in a rut? That feeling could stem from a lack of professional development. Some employers truly see the value in developing talent within by pushing (in a good way) their employees to be more. Other companies just don’t get it. They don’t help you work on you, and everyone suffers.
  8. Distance from home- Will your new job force you to commute hours per day? Or will your potential new job allow you to work to work? I moved my offices from 12 miles away from my home to .25 miles away from my home. This is so I could walk to work. The cost of a commute can be substantial. Make sure you factor these costs into your decision.
  9. Time commitment- Does your new job force you to travel all over the globe? If so, is that a good thing or a bad thing? Do you have to work longer hours in order to get a higher pay? Some people would rather give up thousands of dollars in salary in order to manage their own schedule. Consider how flexible your hours are when you select a new job. This matters tremendously, especially if you have children. Kids get sick, kids have soccer games, and kids need their parents to sleep at home, not in hotel rooms on the other side of the country.
  10. The people factor- Have you ever seen the videos of people “losing it” at work? I’m sure you have. They are throwing computer monitors, tipping over desks, and various other acts of temporary insanity. All of that can be caused by an unhealthy work environment. As we discussed the other day, office bullies are real, and they can make your career hellish. You need to consider the people who you will work closely with. Don’t make the wrong people choice. You’ll end up spending all your extra money on therapy, seriously.
I tweeted a few weeks that I respect people who leave one job for a lower paying job. What I didn’t explain was why. Income, as you can see above, is just one factor when deciding what job is right for you. But more importantly, it’s your ability to manage your household finances that allows you to take a lower paying job. You earn the right to leave a job you don’t like, when you have your financial house in order. Hate your boss, but can’t afford to quit your job? Then focus hard on your household budget, and give yourself the option to accept a lower paying gig.
If you are thinking about changing jobs, then take yourself through this matrix (below) first. Line up the jobs on the matrix, and then list the different details of each factor. Then circle the winner for each category. Obviously each factor is weighted differently. You aren’t going to take a job that is two miles closer to home despite the fact it pays $25,000 less than another job. In my opinion, the biggest factors to consider are: income growth potential, professional development, time commitment, and the people factor. Below the matrix, vote and tell me what you think the most important factor to consider is.
Job #1Job #2
Base salary
Additional compensation
Income growth potential
Health insurance benefits
Retirement options
Equity options
Professional development
Distance from home
Time commitment
The people factor

Remember, if you are in a competitive situation in which you are being aggressively recruited, make sure that you step back from the sales pitches, and look objectively at the offers. Conversely, you should consider all of the above factors even if you don’t have any other job prospects. If you are currently in a job that is lacking, then use the above matrix to help find you a better position with a better company. Again, try to make your decision on something besides pay. You won’t regret it.

 

The CLASSIC student loan story

Posted on by
6

When I wrote a book about student loans, I never expected the sort of backlash that has occurred. How can so many people misinterpret my message? Or worse yet, how could so many people judge a book by its cover, literally? For someone who HATES drama, I found myself in several heated debates over the last couple of weeks. My favorite was a debate with a man that chose to debate the author of a book that he hadn’t read. He accused the content of being fraudulent and undoable. Huh? Sigh.

Anyway. The book isn’t about avoiding college. It’s about avoiding student loans. I encourage you to pickup a copy for your favorite high school student. No seriously, buy the book. Why? Well, I’ll let Sally tell you. Thanks to my Google Alerts (which tells me when people mention my name in cyberspace), I found this post by a blogger named Sally. Go to her blog to read the whole thing, but here is a crucial excerpt. The post is titled A Student Loan Story: In Defense of Pete The Planner’s Stance on Student Loans.

I changed my major 4 times while in college, and it took me 5 years to finish school. Most of my peers were the same way. I worked a part-time job all through college and that money was used to supplement what student loans and credit cards didn’t cover. I graduated, and despite my best efforts, I was unable to find a job in my field. Knowing I had student loan payments coming up in 6 months, I took a job with Verizon Wireless as a customer service representative. I made $12.00 and hour and received benefits. I was in heaven with my $25,000 a year job.

I was clearing about $1600 a month after taxes. I set myself up with a nice little apartment and started assimilating into the adult world. I wasn’t making much money, but I was doing well enough to provide for myself. I thought I had it made.
“Bring on the student loan payments!”, I thought. “I can afford loan payments!”
I got my first student loan bill in the mail December 2007. I opened it expecting an affordable bill. The reality was much different…
Amount due by January 2008: $600.12

Then came the bill from SallieMae.

Amount due by January 2008: $200.34

This is why you must avoid student loans. You don’t have to put yourself in a terrible financial situation upon graduation. Read the rest of Sally’s post to get the whole story. Oh, and buy the book.

Kindness: The ultimate business skill

Posted on by
14

I go to Trader Joes every Sunday morning, after church. I get there at about 10:30. The timing is more important than you might think. I want to see George, and George’s shift ends at 11:00. George is why I love Trader Joes. George is a store-worker who brightens my day every time that I see him. Seriously. I’m not making up some BS story here. I know his name. He knows mine. He loves my daughter. She loves him. She runs into the store looking for George. His coworkers love him, and so do all of the other customers. He possesses the ultimate business skill: kindness.

I will always trust George. If he tells me to try new food, I will. If he tells me that my favorite food is gone for a good reason, I will believe him. George has earned the right to accomplish anything within his workplace because of his kindness. But what if George wasn’t nice? Could he accomplish as much in the workplace? I say no.

What can harshness accomplish in the business world? Can rudeness be productive? Is kindness, weakness? Nothing. No. No.

What do you want people to say about you when you leave a business meeting? Take a moment, and really think about this question. What do you want a person to say to their co-worker the moment you leave their presence during a business engagement? “Oh, he’s super smart.” “Wow, he’s really funny.” “Hmm, he was kind of a dick.” “What a nice guy!”

In my opinion, kindness is the aim. You can accomplish any business goal that you might have, yet still employ kindness. You can fire someone compassionately. You can interrogate someone with care. You can appreciate a job well done with sincerity. We’ve all left a business encounter with someone who values something else. They might value power, belittlement, or superiority. Can these negative aims accomplish something that kindness can’t? Nope. Quite the opposite. Aggressive behavior is counter-productive and a career killer.

My dad always told me that “you can attract more bees with honey, than vinegar.” This statement has always resonated with me. But then again my father is a very kind man. I think this is why I see value in kindness. I resolved long ago that I’m not willing to forego human connection in lieu of “business.” No one likes an a-hole, so why be one? Power comes with influence. You can either force your influence on someone by being aggressive, or you can earn their respect by being kind. Your kindness will then result in influence, earned influence, not taken influence.

There’s an increased scrutiny of bullies in our society today, as there should be. But have you encountered a workplace bully yet? Wow. It sucks. There is an entire organization that was created to help people deal with the psychological damage of workplace bullies. I can’t fathom having a co-worker go home at night psychologically damaged by my actions. Yet it happens all the time. Well, not my co-workers. But you know what I mean. So not only are people not being nice, but they are the other extreme, rude. So rude that they literally ruin the days of their coworkers, day after day. Don’t let this be you. And if it is you, why? Why in the hell would you do that? Stop, man.

You won’t always succeed in your goal to be seen as kind. I’m sure that people have left interactions with me saying something less than “wow, he’s really nice.” We aren’t always at our best. But I don’t think we will ever be at our best if we aren’t kind people. If I somehow was able to accomplish every career goal, but did it at the expense of relationships and people, then the accomplishment would be pointless. I choose kindness. You?

“Don’t you take my kindness for weakness” – Dilated Peoples