When I post my financial reports each month, they reflect only a small piece of who I am as a person. My bank account balances are only a small part of my life although they are center stage on Consumerism Commentary. I try to avoid labels for this reason; when I reach a net worth of a million dollars, I will be hesitant to call myself a “millionaire,” a label that would describe only a small part of me.

Even when looking at my finances in whole, net worth is a small piece. You cannot forget about your net income, a number which will tell you more about your financial well being than your net worth. That is, if your net income is positive every month and your net worth is negative, you’re in better financial shape than if your net worth is positive and your net income is negative.

You can take your net worth, income, and cash flow and still have an incomplete picture of your financial wellbeing. That’s because these figures all neglect to include human capital, your ability to earn income in the future, and focus solely on financial capital, your assets.

The New York Times recently shared an article about using human capital to hedge your financial capital. If you have strong human capital, you can afford to take fewer risks with your financial capital, but if your human capital is weaker, you may need to take more financial risks to get to the same place.

The strength of human capital can be judged by the stability of your job and your ability to find work regardless of the economy. Can your skills be marketed across a variety of industries? If you are a mortgage broker, your immediate job security is tied to the real estate industry. That could be a dangerous sign for your human capital. But if you are a financial analyst, you might be able to find a job in any economy in any industry (not just finance).

If you are close to retirement, your human capital will be low. You may not be willing to spend several years training for a new job or career. Young people have a human capital advantage; time is on their side.

This measurement of human capital may be even more important and tell a more complete story about your ability to thrive financially than your financial capital. How would you characterize your human capital?

The Consumerism Commentary Podcast is in full swing with new episodes every Sunday. Listen and subscribe now!

Your Human Capital

Along with tracking my finances on Consumerism Commentary, I also mention when the situation at my day job changes. For example, two years ago I successfully posted for a higher-level vacancy in my department (as expected). Last year I mentioned when I received a lower annual bonus and raise than I would have liked.

I’ve known the amount of this year’s raise and bonus for a few weeks, and I received the bonus this past Friday. Of course, I am thankful to have a job with good benefits during this period of near 10% unemployment, but I am still disappointed in the low level of compensation. I’m not letting this bother me; knowing that I have more control of my finance regardless of what happens in the office helps me not worry about what happens there.

Are your employers still keeping raises and bonuses low, knowing that employees don’t have many options in this economic environment?

In my photography class today, we worked on panoramas. Thanks to Adobe Photoshop for making the stitching so easy. This isn’t one of mine, but here’s a good example from Flickr.

Here are some articles I’ve enjoyed recently and a reminder about the Plutus Awards.

How U.S. Olympians pay the rent. Not every Olympic athlete, even gold medalists, get multimillion dollar sponsorships. The cost of training, competing, and traveling is tremendous, and not every athlete comes from a wealthy family.

How to get your super-motivated boyfriend to marry you. Interesting article in which Sam, the author, describes five observations of men focused on careers or other goals and how the women who love them might need to adjust their expectations. Let me know what you think of this article. I think there’s an assumption here that the woman must adapt to the man, but in a perfect world the best course would involve some compromise.

Do you have to give up convenience in order to save money? I believe there are several stages to becoming financially secure or independent. There may be a time where it makes sense to save every cent possible. I went through a phase like that several years ago. I had to survive without a car (relying on friends and public transportation), eliminate cable television, and share an apartment with three roommates. Now that I’m earning more than what I need for basic expenses and long-term saving and investing, I don’t have to be as tight. I willingly give up some income in order to buy myself more convenience.

Vote for the 2009 Plutus Awards. Consumerism Commentary is up for a few Pluties. Be sure to vote for your favorite finance products (savings account, brokerage, etc.) and blogs before the ballot closes on March 16.

Photo: Richard0

The Consumerism Commentary Podcast is in full swing with new episodes every Sunday. Listen and subscribe now!

Raise, Bonus, and Weekend Reading

Dennis Kucinich is floating a proposal around the Senate which would create a six-month period in which anyone age 60 can retire voluntarily and receive partial Social Security benefits. This is a $15 billion bill funded by the bailout and stimulus. Kucinich estimates that by offering retirement two years early, a million workers will leave their jobs, creating opportunities for those actively looking for work.

Although the plan sounds good in theory, I’m not convinced it would work in practice.

Right now, it’s unlikely that this proposal will become a law. Congress is working on a different set of ideas to stimulate job growth. Employment has traditionally been the last aspect of the economy to improve during a recession, but some experts predict it will be many years before employment levels return to previous levels. Some people may find themselves without expense-sustaining income for years.

Do you believe lowering the voluntary retirement age for six months would help improve employment conditions?

The Consumerism Commentary Podcast is in full swing with new episodes every Sunday. Listen and subscribe now!

Reader Poll: Proposal to Lower Retirement Age

Last Thursday, Dallas/Fort Worth got more snow in one day than had ever been recorded before. People who had never seen a snowman before were suddenly able to roll their own, traffic was terrible, and offices were closed.

The next morning, when nobody was going anywhere, my employer (who is the second-best employer I’ve ever had, not counting Flexo) did a confusing thing. All my co-workers got an e-mail around 10 A.M., with the subject: SNOW DAY!!!! It went on to describe the record amount of snow, the beauty of the landscape, and encouraged us to go make snow angels and take pictures and stomp around, etc. Then in the last paragraph we were similarly encouraged to get some work done, since we were warned in advance to bring our laptops home.

A few hours later, my immediate supervisor followed up to explain that it was in fact an actual snow day, and if we found ourselves not working, it wouldn’t be deducted from our PTO / vacation time. So, the problem has been resolved, but not before I found myself complaining about it on Twitter (the gist of which was to explain to Texans, of which I am not a native, that a snow day clearly means “no work today”).

This was the latest of incidents where it seems like I’m forced to act like a jerk in order to explain basic concepts of how to be efficient, profitable, or improve employee morale, depending on the situation. Normally, I think I’d love to work from home, but when the whole area is shut down due to snow, we won’t be doing much consulting, since all of our clients are also out of the office.

Another example: seven of my co-workers spend two hours each week determining who will be responsible for which weekly milestones, and then at the end of the week, most of the milestone information is thrown away. Inefficient, right? So I tried to describe how foolish that looks to my manager, and our debate got more testy than it should’ve, and I ended up feeling like a jerk. I don’t feel wrong, just rude.

I try to communicate things in a diplomatic and polite way, but no matter how it’s sugar-coated, you can tell when someone is saying “You’re doing it wrong.”

The odd thing is that while I feel like I’m frequently challenging a broken status quo, regardless of my employer, I never really “get in trouble” for it. I was in a “quit or your fired” situation once, and in hindsight, I’m glad they made that decision for me, because even after I left, that boss didn’t get any better until he ended up in the hospital for stress. But aside from that, my employers love me, and they’re always telling me of the speed and high quality of my work. So why do I feel like a rusty wrench in the works?

Does this situation seem familiar to you? If so, what did you do about it?

The Consumerism Commentary Podcast is in full swing with new episodes every Sunday. Listen and subscribe now!

Am I a Jerk at Work?

When I started Consumerism Commentary in 2003, after about eight years of writing on the internet in a smaller, more personal capacity, I only had two goals: to track my finances while working to improve my money situation and to learn more about personal finance by finding articles, sharing links, and adding occasional thoughts of my own. Over a year later, I added advertising to Consumerism Commentary, and within another year, the website became more than just a way for me to track my financial improvement, it became an essential part of that progression.

For the last three or so years, I’ve been earning more from Consumerism Commentary than I have been from my day job. At times it has been significantly more, expressible in multiples — enough for me to consider leaving my career behind and write for the website and tend to other related business on a full-time basis. I’ve ultimately decided to make this jump, and now it’s only a matter of timing.

Throughout this time, I’ve been receiving request after request to write more about the income I receive outside of my day job. I’ve been reluctant to write about earning money from blogging. My primary reason for this reluctance is that the concept of blogging is not directly related to the concept of personal finance. Although the topics on Consumerism Commentary occasionally stretch away from pure personal finance, I want to remain focused.

Asking me to write more about blogging would be similar to asking David Bach to offer his opinions about the process of writing a bestselling series of books rather than about the content within those books. (I don’t mean to imply any similarity or equivalence between myself and David Bach.) An even better illustration would be asking Claude Monet to paint his impression of how he paints a scene rather than his impression of a bridge over a pond of water lilies. It’s too “meta,” an added level of abstraction between something that exists and its representation.

I also don’t want to write about earning money for blogging because I’d prefer not to draw attention to my success. Of course, that is antithetical to most people’s suggestions for broadening a “personal brand.” I think it should be obvious that at this point I have little desire to be a renowned expert. No one in the “real world” has any interest in taking advice from someone who calls himself Flexo, a name chosen in about five seconds when there were no expectations for growth. “Personal branding” is furthest from my intentions.

Despite this, I reluctantly admit that earning money from blogging, just like earning money from a career or saving money on non-discretionary expenses, is a legitimate aspect of personal finance. I shouldn’t shy away from writing about the process of blogging.

So here is what I have learned from almost seven years at Consumerism Commentary, and at a lesser extent, from fifteen years writing for the web and almost twenty years building online communities including a popular modem-based bulletin board system in the early 1990s. (I’ll be thirty-four next month; it’s up to you whether you want to consider my teenage years managing a BBS as experience, but it is surprisingly similar to what I do today.)

Consider some of these points before starting a blog to earn money.

1. Increase success by writing about your passions

Which comes first, the topic or the passion? Much of the “earn money by blogging” advice I’ve seen suggests would-be internet moguls should start their business by determining which topic generates the most income overall and creating content within that topic. Unfortunately, that leads to a lot of people writing about personal finance, a lucrative topic thanks to a proliferation of deep-pocketed advertisers in the financial industry. Even broader than the topic of personal finance, it also results in proliferation of less-than-inspiring content, more noise making it difficult to discover the signal.

I don’t see this as a path to long-term success. It leads to frustration when the dollars don’t appear quickly or don’t appear at all. The only path that seems to work well is to start writing only if you have a passion for a certain topic and only if you are willing to dedicate time and effort into creating content at the highest level you can. You don’t choose the topic, the topic chooses you.

2. If you write with dollar signs in your eyes, don’t bother

It’s true that financial success is expedited by focusing on the business aspects of your endeavor, and I often hear from people who believe that if an untalented writer like myself can earn a living by writing on Consumerism Commentary, anyone can. However, most people will not earn a living from blogging-related income.

Many dollar-chasers start writing about the lucrative topic of personal finance without either a passion or interest in the subject. I read perhaps thousands of articles each week and it is crystal clear to me when a blogger is inspired by the topic and when a blogger is inspired by potential income.

Here is what I think about when evaluating whether a blogger is motivated primarily by potential income:

• Is the writer more interested in quality or quantity? Quantity is necessary in order to get noticed by search engines, but quality provides a better experience for the reader. Attaining both would be a good goal; I try to find a balance while other successful bloggers take obsession over quality to an extreme and try to “save the world” with every article.
• Are the articles written for the benefit of the reader, the blogger, or the advertiser? I give exceptional writers free passes to throw in a post for affiliate income if the overall tone of the blog does not involve shilling for companies. If every article borders on advertisement, my impression is the blogger is writing solely for money.
• Does the blogger bother removing spam comments or spam links within comments? A website operator who can’t be bothered to filter noise from comments is not interested in creating a user-friendly experience. Many times I’ve stopped myself from linking to an otherwise excellent article that’s full of spam links at the bottom of the comments section.
• Is there any personality within the articles or does the blog read like it could appear in a textbook? When I was looking to add writers to the Consumerism Commentary staff, I found that those who considered themselves “freelance writers” had a more difficult time bringing something personal to the tone. I like to know that there is a human being behind the words.

It is good that talented experts and dedicated amateurs are able to earn compensation for producing quality content and for making it available to the internet-browsing and searching public. But as the popularity of earning money through blogging has increased, so have the bloggers who are interested more in fattening their bank accounts than they are in adding something valuable to the world.

3. Have a mission statement or at least a mission

Consumerism Commentary began without any income-related goals. Its purpose was to keep myself accountable for my finances and to help me learn more about money. That was, and is, the mission of this website. It sounds somewhat selfish on the surface; Consumerism Commentary is mostly for my own benefit, not for the readers.

This approach is, however, less self-focused than it sounds. The opposite approach would be to write a blog under the assumption that the author has all the answers and with the purpose of teaching others, ignoring the possibility that the author has more to learn. This is self-fashioned or self-proclaimed expertise, and I find it unappealing.

4. Earning money takes time

I don’t know exactly when Google created AdSense, but I do know it was not available when I started Consumerism Commentary. Very few blogs at that time earned money. I added the first AdSense advertisement to the website in November 2004, about sixteen months after my first post here. It was more of an experiment than anything else, and I had no expectations for income.

My cumulative earnings didn’t reach $100, the threshold for receiving the first check from Google, until April 2005. That is six months after the first ad appeared on the website, almost a year after Consumerism Commentary began, ten years after I had been writing for the web, and fourteen years after I started creating online communities.

I was lucky that there weren’t many, if any, other blogs discussing personal finance when I started Consumerism Commentary. There are thousands now, so it is more difficult to stand out in this particular niche. The same is true for the wider web, as well.

But great talent will always rise to the top. J.D. Roth is one of my favorite examples. He started writing on Get Rich Slowly in April 2006 and is one of the finest writers among those focusing on personal finance. Although there were over a thousand personal finance blogs when he started, he quickly rose to the top of the list. J.D. had been writing a personal blog since at least 2001, and that experience should not be ignored when looking at his path to success.

It is almost five years after I received that first AdSense check. Now there are more bloggers competing for advertisers, and putting the recession aside, more advertising dollars to go around. So I believe it is still realistic to expect income to come in slowly during the first year. If waiting six months for the first $100 seems like too much work for too little return, you may want to consider a different business venture.

5. Success takes more than just writing

I am reminded of why I’m perhaps not as successful as I could be. Over the past few years, I’ve been working harder at writing and managing this and several other websites. Unfortunately, I’ve put aside important aspects of building a successful website and community, such as participating on similar websites. As I mentioned above I read thousands of articles each week. About 70 percent of these articles are on “mainstream” websites or major media blogs and 30 percent are on amateur or independent blogs.

With more time, I would be able to participate in discussions and social networking media more. This participation in the larger community will assist with increasing the chance for success with a blog.

So is earning money through blogging unrealistic?

There is significant potential for earning money, possibly even earning a living, through blogging. For many people, especially those who are not passionate and dedicated, financial success will be elusive. My intent is not to discourage but to help manage expectations.

It’s great that free and widely available tools on the internet can help anyone can have a voice. You need to strive for excellence in order to stand out both to readers and to advertisers. It’s not enough to write occasional uninspired articles, put up a few ads, and wait for the money to roll in.

Readers can expect at least one more article on Consumerism Commentary about the specific ways I earn money from blogging with suggestions helpful to those who are writing about their passion and are ready to form a strategy for building diversified, self-sufficient income.

Because I was writing for new audiences, my recent ten-day tour forced me to write better articles than I normally write for Consumerism Commentary. This experience, in addition to my decision to put thoughts together for this article on earning money through blogging, helped me realize that I need to focus on improving my writing skills and find time for more participation within the community.

The Consumerism Commentary Podcast is in full swing with new episodes every Sunday. Listen and subscribe now!

Realistic Expectations For Making Money Through Blogging

This article is presented by Kelly Whalen, Consumerism Commentary staff writer who bought a second car with her husband last weekend.

As a busy mom of four and work-from-home parent, I often get told people don’t know how I do it all. It’s simple, I don’t. These are some of my techniques to save time, which means more money in my pocket, and more time for my family.

Whether you are a busy parent or a single person with a demanding job, most of us have a few items on our to-do list that stay there endlessly. After a hard day’s work the last thing we want to do is clean the soap scum off the shower walls or spend an hour cooking a healthy dinner.

While most of us think having help is only for people making six (or seven) digit salaries, there are ways to make your life run smoother without costing you all your hard earned cash.

Start by making a list of all the obligations, errands, and chores you do in a week. The best way to do this is personal finance style. Write down what you are doing as you go. You’ll want three columns: one for description, one for time (include driving time), and one for cost.

After a week or two you will have a solid idea of what you are doing, and how much money and time it takes. Now you can go through and order them from most to least important. I don’t know about you, but scrubbing the floor is usually the last thing on my list.

Now we start Round One of eliminations. Take anything extraneous, say that extra trip to the grocery store, and cross it out. Errands that can be combined should be grouped together.

Next, you want to look at what is costing you the most that you value the least. Value here isn’t referring to money, it’s referring to what you care about. For me that might be dry cleaning. For you it may be the car wash you get every week.

Now here’s where the tricky part is. You want to save say ten hours a week so you can earn more at your side gig (ahem) or spend more time with your kids. How do you do that without breaking the bank?

Hire help

The most obvious way to lighten your load is to hire someone to help you. While the cost may seem prohibitive, it can be cost effective if the payoff (time, more work hours) is worth it. Examples: hiring a babysitter, virtual assistant, or house cleaner.

Barter

Consider trading your services for something else you need. You can find people to barter with in your neighborhood, church, at your kid’s PTA, or on Craig’s List. For instance I have traded organizing services for pet care.

Bank on it

Have you heard of Time Banks? They are organizations that are aimed at helping members find free help in exchange for services performed. Think of it as bartering on steroids. For instance I could do some bookkeeping for one member, and in exchange I get time banked, and can use it to have another member fix my leaky faucet. Don’t have a local Time Bank, consider starting one.

Drop it off the list

Maybe you are an over-volunteerer like me, or maybe you have been doing the same thing for awhile and are looking for a change. Consider dropping everything off your list that you aren’t passionate about. Don’t be afraid to say no if new opportunities arise.

Reduce your needs

Try cutting back. If you go to the dry cleaners once a week, try cutting back to every other week. Next time you are shopping look for clothes you can wash and wear at home. Instead of getting an oil change every 3,000 miles check your car’s manual which likely tells you that you can wait until you hit the 6,000 mile mark.

Automate it

Have you considered trying Alice.com to get your toiletries delivered? You don’t even have to think about it when you need toilet paper, it arrives on your doorstep at regular intervals. If you sign up through my affiliate link you get a $10 credit after you spend $50. Other examples include getting a coffee subscription, and of course automating paying your bills.

Partially outsource

Another time saver is partial outsourcing. This could be ordering groceries online so that you can pick them up, signing up for a CSA, or getting the USPS to pick up your packages and drop off stamps.

I’ve found success in all these methods, and it has been eye opening to see how easily I can outsource some of my obligations, and get rid of others, while improving my bottom line, and my quality of life.

What about you? Have you outsourced some of your obligations? Tell me what you did, and what worked and didn’t in the comments.

Photo credit: Still Thinking

The Consumerism Commentary Podcast is in full swing with new episodes every Sunday. Listen and subscribe now!

Time Management: Outsource to Save Money and Time

The more profitable your employer, particularly if it is a large corporation, the more attention the employer pays to its biggest asset, its employees. Profitable companies offer perks to employees like vacation days, 401(k) matching contributions, health care subsidies, free lunches, on-site day-care, unlimited restroom breaks, and development opportunities. Don’t confuse these benefits designed to woo would-be and current employees with actual caring.

Corporations do not care about employees. Your boss and your co-workers might care about you as a person, and if they do, that’s a good thing. But a corporation provides benefits for only two reasons: to attract the best talent and to keep that talent motivated and productive. Even the primary purpose of health benefits are to keep you in the office doing your work rather than sick at home.

From a corporate point of view, employees are only seen as how they affect the bottom line. This is the same way you should view your employer. Forget about corporate loyalty.

In finance, the term “sunk costs” refer to expenses that have been spent and can’t be recovered. When making business decisions you have to ignore the past and decide what options are the best moving forward. The same idea applies to time you’ve spent with a company. I’ve talked to many people who say, “I’ve already spent fifteen years at this company, so I might as well stick around until retirement so I can get a package.” I’ve heard this even when the speaker had another twenty years before retirement!

The past is a sunk cost. Look only at the present and the future. Those retirement packages are designed to chain you to your employer but with some fancy maneuvering you might be able to get a better deal by changing jobs. Even if you haven’t been working long enough at the company for your 401(k) matching contributions to vest, you can use that when negotiating your compensation for your next job.

Think about your greater state of being in addition to your finances when making life choices, but when dealing with your employer, focus on the bottom line. Just like a company has a responsibility to its shareholders to maximize revenue and minimize expenses, you have the same responsibility to yourself and your family.

The economy is rough right now, and a lot of people I know are sitting tight waiting for better employment news and other indicators that certain companies are hiring again. One of my friends has been out of a job since 2008. Even though it’s an employer’s market, employees can’t let employers take advantage of their talents and work ethic.

Generation Y isn’t the only group of workers rejecting the unblinking loyalty to employers once favored.

• Always keep your eye open for new opportunities.
• Always have a basic résumé updated and ready.
• Always stay up-to-date in your field.
• Always say yes to manageable projects.
• Always look to meet new people in your industry.
• Always let outsiders know you are interested in moving forward with your career.
• Always look for ways to be successful working for yourself.
• Always have options.

What do you suggest to help ensure employers don’t take advantage of employees in today’s job market?

The Consumerism Commentary Podcast is in full swing with new episodes every Sunday. Listen and subscribe now!

Treat Your Employer How It Treats You

As part of my 2010 (pronounced “MMX”) goal to publish one entertaining thing a week, I’ve been casting a wide net to find audiences and formats that can showcase my creativity and wit.

(Aside: I’m not yet comfortable with self-promotion, so it’s a little awkward to be referring to myself as witty. But earlier in the week, when I heard the open-mic host say “Our next comic…”, and realize he was referring to me, I was forced to conclude that I’d better get used to it if I want to build an audience. Fortunately, and somewhat ironically, I write for Consumerism Commentary anonymously, so it’s easier.)

A friend of mine turned me onto The Rotten Tomatoes Show, on a cable network called “current”, which reviews movies on a weekly basis, using scores from critics and users of the Rotten Tomatoes Web site. The TV show also solicits video reviews from its viewers, and if any part of your video gets included on the show, you get $100.

I’ll let the co-host of the show explain more, with this week’s requested movies:

For me, this seems a perfect weekly thing to try, because:

• I need practice shooting video
• I also need practice enunciating
• even when I’m alone, I get nervous around microphones and cameras (until after I’ve started speaking, anyway), so I want to make that a habit
• it relies primarily on good writing and brevity, which is the soul of wit, and which we all need to practice, all the time
• there’s a chance of getting paid
• I’ve been reviewing movies concisely online in text form for nearly ten years, anyway
• it’s national TV!

What I need to decide, though, is if merely submitting a video counts as “publishing something entertaining”. I fear that I could do this on a near-weekly basis (I won’t always want to see one of the three movies they pick), and rest on those laurels, meager as they are.

Hmm.

No, I think I have to set the bar higher and say that it only counts if it gets used on the show. That’ll keep the pressure on to keep creating, and trying new things.

Incidentally, the comedy open mic show went quite well. Since this one only happens monthly, I’m going start calling places to try to book more appearances. Hey, look at that. I used the word “book” as a verb. Maybe I’m getting used to show business, after all.

The Consumerism Commentary Podcast is in full swing with new episodes every Sunday. Listen and subscribe now!

$100 For a Movie Review? I Was Doing That Anyway!

Today, at the beginning of the “10s,” I am thirty-three years old. By the time this decade fades away in the last few hours of December 31, 2019, I’ll be forty-something. (I’d rather not do the math.) Lately, one particular phrase keeps repeating involuntarily in mind: “Life is short. Life is short. Life is short.” I don’t understand why sometimes the voice repeating this phrase sounds like Sean Connery’s. I wouldn’t think voice-over work would be his first choice.

By third grade, I had been around adults enough to understand that as you get older, it is expected that you go to school, graduate, get a job and then work until you’re too old to continue. I probably knew this before reaching that age, but I mention third grade because it was at this point I decided what I wanted to do after graduating: teach. From third grade through high school, I hardly gave my career path another thought; I had already decided to become a teacher.

As I progressed through school, I was lucky to be given the opportunities to try a variety of activities: baseball, tennis, computer programming, music and religion to name a few, and on a smaller scale, theater, photography and swimming to name a few more. I had the opportunity to determine where I might excel and what might not be a good match for me. For example, I think I made contact with a pitch once during my entire season of Little League, and when I did, the ground ball I hit was fielded by the shortstop and tossed to the first baseman for the out. There was no delusion: I knew I would never play for the Mets.

In elementary and middle school I benefited from GT curricula that were designed to allow me to be creative and to explore academic subjects that I wanted to learn about. Then in high school, I enrolled in honors and advanced placement courses when I could, and I participated in a number of extracurricular activities. In college, I studied music education and dabbled in a number of different minors, all topics that interested me rather than areas that offered a significant potential for earning money (although computer science could have been a lucrative career). I balanced that with being an officer in several different student organizations and teaching in local high schools.

As a result, from primary school until I left my job at a non-profit organization in late 2001, I was spending almost all of my time involved in activities I enjoyed. Unfortunately, that changed when I realized I had no money.

The college professor whose primary responsibility was to direct a three-hundred-fifty member corps-style marching band explained how she was one of the lucky few — someone who gets paid for doing something she was completely passionate about. Most of the rest of us get paid to work and, if there are any passions, they are extravocational. With debt to be repaid and no money to do so, I opted to switch gears and enter the corporate world.

In the decade most recently superseded, I tried the business thing. I spent most of that time working for a large corporation. For a few years, I spent a lot of my time after work completing a master’s degree in business. I tried these, even knowing they didn’t feel right for me, because building a career is what sensible people do. And I know why, despite being a leader in just about everything I’ve done prior, and despite my talent and reputation for being able to do just about anything at work, I don’t make a very good leader in business: my heart just isn’t in it.

Also this past decade, I was fortunate enough to start writing Consumerism Commentary at a time when people were on the verge of realizing that the internet is a great place to discuss personal finance. Although I’m probably still a better musician than I am a writer, I’ve found a new passion in writing. To make this decade successful, I intend to continue to seek out opportunities to discover new and old passions such as writing and photography. I’ve enrolled in a second photography class this winter and I’m keeping my eyes and my mind open to finding ways to be involved with more of the activities I enjoy.

In addition to cultivating new and old passions, it’s also important to eliminate anything that doesn’t stem from passion as much as possible. The more you are doing things you love, the less you’ll have time for that which you don’t. I don’t think you can always “do what you love and the money will follow,” but you can do what you need to do only as much as you need to do it, so you can focus more of your energy on your passions.

What if you don’t know what your passions are? That’s an understandable situation but there is an easy solution: try everything. Don’t waste time, life is short. The best improvisational comedy relies on the “Yes And” rule. When you are part of an improv scene, your answer to every question is, “Yes,” but your answer doesn’t end there. You need to add another layer or level to the idea that is being tossed around.

To find your passion, say, “Yes,” to everything, even if no one asked a question. When by yourself, if you find your brain wondering, “Should I…,” there is no reason to finish the thought; the answer is yes.

I don’t like to write much about things like “fulfilling your intrinsic potential” or “becoming a wonderful human being” or “being who you want to be.” In my experience, most of the time people who talk like that are trying to sell something. But if there’s any one thing you can do right now to make this decade truly stand out, that one thing is to do something you love.

Starting now, I plan on spending more time pursuing my passions and less time on those things that don’t feel right for me.

This article is part of a series called Start the Decade Off Right on Consumerism Commentary. Previously: Pay off debt, open a high-yield savings account, invest for the future.

Photo credit: An Ta

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Start the Decade Off Right: Do Something You Love

If I were to tell you that I think I drink too much liquor, you’d likely conjure up some images of alcoholics you’ve seen, maybe picturing some guy falling down, abusing the people he loves, making terrible decisions and driving like an idiot. So I want to be clear right from the start that I am not a drunk, nor has anyone accused me of even coming close. I sympathize with those who suffer from real alcoholism, and I hope they all get help.

The truth of the matter is that while I don’t have an addictive personality, I do have A.D.D., and I’d been self-medicating without knowing it for the first thirty years of my life. Sometimes with sugar, sometimes with caffeine, and sometimes with liquor. But since I got diagnosed, I’ve been watching my behavior much more closely, and acting self-aware more often. I usually know just how much caffeine to take, and when to take it.

However, I think I’ve been overdoing it on the wine lately. Every so often some receptionist will ask me to fill out a form that asks, among other things, how much alcohol I drink. And I find that the answer I give – 1 glass a day on average – is becoming less true. It’s almost always at least two. More worryingly, some days I’ll come home and pour a glass as soon as the chores are done, which is before 5 PM. There have even been days when I want a drink before I even think about taking the garbage out.

I’m what you might call a quiet drunk, at least when I do it properly. Mostly, I just feel a lot less nervous and a lot more comfortable, as if I don’t have A.D.D. So, I’m not looking forward to losing that comfort, but I recognize that it’s artificial, and I don’t really want that for myself.

Why am I writing about this here? Well, because I’m the one who takes the garbage out, I see how many bottles of wine we go through. It is, not to put too fine a point on it, plenty of bottles. Let’s say there are ten glasses’ worth in each bottle (that’s a 1.5 liter bottle, you know, the big one), and my wife and I both have two glasses a day, and three each on Saturday and Sunday. This is a conservative estimate. That’s one bottle for the work week and just over half of another for the weekend.

In a month, that’s 68 glasses, or almost 7 bottles. Assuming we buy the cheap stuff every time, that’s about $70 a month. (Coincidentally, that’s the same amount we’re saving by switching off the cable TV.) Granted, sometimes I will want a glass of wine, and I’m not about to try banning it from the house. I’m not a prude, and I don’t seek frugality at the cost of comfort. But for myself, I’m going to try drinking less.

I’ll still have wine sometimes, but not every day as a matter of course. Like a visit to Starbucks, I think I’ll treat it like a reward for doing something I wanted to get done. And in 2010, I expect to get a lot of things done.

Photo credit delphaber.

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Mostly Clean and Mostly Sober

Ron Howard, famous mostly for playing Richie Cunningham on the television program Happy Days, is one of the film industry’s most successful directors and producers, having been involved with a long list of films. He directed, among others, Apollo 13, A Beautiful Mind, Cinderella Man, The DaVinci Code, Frost/Nixon, and Angels and Demons. I happened to catch Ron and the rest of the Happy Days team on television this weekend, to celebrate the 30th anniversary of the television show. The special aired several years ago and featured the actors and creative team talking about their experiences.

I’ve seen in previous interviews Ron Howard explain that he was always interested in directing. Garry Marshall, the creator of Happy Days, was a mentor to Ron, first worked with Ron on an episode of Love, American Style. This episode, “Love and the Happy Days,” was a nostalgic look at the 1950s that wound up being a precursor to Garry Marshall’s Happy Days. Garry’s advice to Ron and to others involved with the show was to wear many hats.

Ron likely knew by this time that his hair was thinning, and Garry’s advice may have inspired Ron Howard’s trademark look of wearing hats to cover up the fact that his is follicularly challenged, but I believe the advice was more meant to encourage action beyond acting. With Ron’s goals of directing, Garry wanted the young actor to experience a variety of aspects of film and video production as possible.

Specialism vs. generalism

Specialism, the philosophy of finding one thing at which you might excel and nurturing your abilities in that skill in pursuit of excellence without nurturing other skills. This is how many successful people eventually succeed. For example, take Mark Nuccio, the acting principal clarinetist for the New York Philharmonic. To be the principal clarinetist in this ensemble, you simply have to be the best (non-retired) clarinetist in the world as it is likely the most coveted position for classical performers.

It is more than likely that Mark has done not significantly much outside of performing and practicing music on the clarinet since high school. Any time he spent on any other activity would be time not focused on the goal of being the best clarinetist in the world. The world needs such dedicated souls.

I see the “specialist” argument used to encourage career growth:

• After 10,000 hours of practice, whether it is playing an instrument or coding in Java, according to Malcolm Gladwell, you are likely an expert.
• Experts are sought-after for most higher-level positions in corporations.
• Personal branding and marketing are stronger when they involve a single message.

Specialism may well be the ideal for today’s modern, capitalist culture. I’d like to encourage some people, especially those who might have a strong aptitude for many different fields or have no particular driving passion for any career choice to consider generalism. In Italy during the Renaissance, this was a highly regarded philosophy. Here is the concept of being a Renaissance man (or, today, woman):

It embodied the basic tenets of Renaissance humanism which considered humans empowered, limitless in their capacities for development, and led to the notion that people should embrace all knowledge and develop their capacities as fully as possible. Thus the gifted humans of the Renaissance sought to develop skills in all areas of knowledge, in physical development, in social accomplishments and in the arts.

Benjamin Franklin was a generalist. He is known as a printer, author, politician, political theorist, scientist, and inventor, among others. While he could have spent all his time focusing on any one of these activities, his historical importance relies on him being involved in activities that cross the spectrum. He, and most people who specialize, would not be considered the “best of the best” in any of these fields, but his broad skill set solidified his place in history.

The benefits of generalism are not confined to history.

Generalism makes you more marketable to companies. I mentioned it is easier for specialists to market themselves — or, more precisely, for marketers to work with specialists, as a specialist would by definition not be very good at marketing themselves unless their specialty is marketing. Even though it is easier, it’s not better. Unless you have evidence that you are among the best in the world at your specialty, it’s quite possible that someone more accomplished at the one skill upon which you are relying is applying for that same job.

In an economy where unemployment is high, there is more supply than demand. In a competitive environment, job seekers need to emphasize anything that makes them unique. When a company’s resources are low, they are more likely to be attracted to an prospective employee who can fill many roles. Someone with a variety of needed skills — someone who can take over the responsibilities of more than one function — are seen as a bargain for the salary.

Generalists make better business owners. Particularly during a start-up phase, a business owner needs to take care of various functions by herself. Particularly if the funds for outsourcing have not yet materialized, she needs to market the business, build the website, write up the business plan, secure funding, handle the accounting, negotiate with suppliers, research the market to stay ahead of the competition, advertise, service the existing clients, and find new clients. It is not a surprise that, according to the Small Business Association, half of all new small businesses don’t survive four years, even after taking to account that some of these attempts may be an entrepreneur’s second or third start-up.

Specialists are often drawn to entrepreneurship although they lack varied skills necessary for success. Success rates do improve after initial failures, after business owners can determine which skills need refinement.

Generalism leads to a more fulfilling life. Like Mark Nuccio, I could have spent every waking moment practicing clarinet. I would have become an excellent performer, perhaps even one of the 100 best in the world given the right opportunities and focus. It would still be very unlikely I would have become the principal clarinetist in a Big Five orchestra. Instead, I spent time performing on other instruments, such as trumpet, guitar, piano, and percussion. Experience on a variety of instruments would help me be a better music teacher.

Furthermore, I had instruments outside of music performance. I’ve been an amateur computer programmer since I started playing with a Commodore VIC-20 when I was about eight years old. In college, I started a number of minors, including computer science and psychology, eventually settling on music business. Several years ago, when I decided to pursue a Master’s degree in business when the opportunity was almost completely free, I decided against specializing in either finance or accounting; I took enough classes across the business spectrum to get exposure to as much as possible.

More recently, I’ve taken my interest in photography to the next level by enrolling in classes to help improve these skills even though they are not connected to anything I’ve ever done professionally. I have a long way to go before I my photography skills are comparable with professional photographers; in fact, even some of my friends who have had no formal training but have a certain knack often show me how their skills exceed mine. Regardless of my progress relative to others, expanding my knowledge into other areas keeps my brain active and adds more dimension to my identity.

Wearing many hats, as Ron Howard has done after advice from Garry Marshall, will protect that active brain.

Photo credit: SashaW

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Wearing Many Hats: Specialism Vs. Generalism

The open enrollment period for my company’s 2010 benefits came to a close yesterday. My procrastination came to an end when I logged into our benefits management website, reviewed the options one last time, and decided to stick with the same plan I’ve had since I joined the company, an HMO plan offered by Aetna and a dental PPO plan offered by the same provider.

Overall, including my other benefits such as long term disability, the cost of the deductions to my paycheck will increase 10% in 2010 over the cost in 2009. Part of this is due to a change in my company’s subsidy formula. In 2009, the company has been paying for a certain percentage of the total cost of my benefits on my behalf, but next year, the percentage is decreasing.

This is a big increase when considering the Consumer Price Index looks like it’s heading towards a rate of 3.4% this year according to the Bureau of Labor Statistics. This increase is the latest in a line of similar increases over the past several years. The price increases spurred me to consider High Deductible Health Plans and Consumer-Directed Health Plans this year, but after reading through the details, I decided the HMO continues to be the best option for me.

Even my 10% increase is overshadowed by the increases other people are seeing. Without dependents, some might say I have it easy. I can afford the increase. Well, I can afford it right now, but there is always the threat of that ability disappearing in the future. Consumers do not normally agree to pay an increasing amount each year for a service that stays the same, or in some cases, for a service that decreases.

I’ve also recently begun pricing how much I would pay for similar health benefits as a self-employed individual. To have a plan that is even remotely similar to the benefits I have now, I would be paying about twelve times my current premium. The more reasonably priced health insurance plans offer incredibly low benefits and high deductibles. I may have more affordable options by qualifying as a small business rather than self-employed, but that is going to require more research.

What is your annual enrollment story? Are your costs going up?

Photo credit: ZaldyImg

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Annual Benefits Enrollment: My Cost Increasing 10%

Over the next couple of weeks, six finalists will be auditioning for the opening of “staff writer” at Consumerism Commentary. Each will be providing two guest articles to share with readers. After the six writers have shared their guest articles, readers will have an opportunity to provide feedback before we select the staff writer.

This article is presented by Debbie Dragon, a full time freelance writer and co-owner of ReliableWriters.

When farming was a common way of life, more Americans were self-employed than not. With the growth of corporations in recent decades, many Americans decided to get on the corporate bandwagon in hopes of climbing the ladder to success. In recent years, due partly to the struggling economy, many people are turning to self-employment. When people are laid-off, many take their skills to the marketplace and become entrepreneurs.

Thanks to technology, many businesses can be started from home and with little capital. This is a good thing, since banks are hesitant to lend money to anyone, let alone a business start-up. For a few hundred or a couple thousand dollars, a business can be set up complete with a logo, website and business structure. While it’s true that a poor economy may mean less people have the money to buy whatever you sell — many successful businesses start during a recession and are then positioned perfectly when the market turns around.

According to the last U.S Census, more than 10 million Americans are self-employed. I would be willing to wager that the number has increased drastically in just the last five years, with more people starting freelance and home based businesses “on the side” to increase their income or as a replacement for a job lost to the economic conditions. Self-employed Americans do everything from construction to accounting to crafts, but the most commonly selected industry on self-employed income tax returns is “professional and business services.”

In previous decades, there was a tendency for self-employed Americans to be male and white. During the years between 1976 and 2003, a surge of women entrepreneurship blossomed, with an increase from 27% of self-employed workers being women to 39%. Many women start small businesses in an effort to both contribute to the family income and still have the flexibility to raise their families. You’ll also notice that self-employed people are over-represented at the top of the income curves for America, helping prove that greater rewards are given to those who take larger risks (in some cases). Entrepreneurship has always been valued in American culture, and a poor economy seems to nurture it rather than squash it.

For every depressing statistic and news story given about the economic condition it’s almost as if the entrepreneurial spirit is awakened in people who are determined not to sit by helplessly as jobs are lost. The economic conditions serves as motivation for some, whether that motivation is driven by plain fear — or hidden ambition.

This is a guest article by Debbie Dragon, one of six finalists interested in being Consumerism Commentary’s staff writer.

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The Economy Triggers a Rebirth of the Entrepreneurial Spirit

Over the next couple of weeks, six finalists will be auditioning for the opening of “staff writer” at Consumerism Commentary. Each will be providing two guest articles to share with readers. After the six writers have shared their guest articles, readers will have an opportunity to provide feedback before we select the staff writer.

This article is presented by VCMcGuire, a regular contributor to the New York Times and other publications.

I ran my freelance writing business out of my dining room until July, when my family moved to a bigger house. Now I run my business out of a dedicated room on the second floor — a room that we have to heat, cool, clean and furnish. Instead of sharing a 5-year-old inkjet printer with the rest of the household, I have an all-in-one printer, scanner and copier. And it’s time to stop scrawling my email address on a piece of scrap paper when I meet potential clients. I need to bite the bullet and order some business cards.

My business is going through what all personal finance junkies dread: Lifestyle creep.

Normally we think of lifestyle creep as something that happens to individuals or families. Investopedia defines lifestyle creep as “a situation where people’s lifestyle or standard of living improves as their discretionary income rises.” When this happens, people often commit to higher fixed expenses, such as bigger house payments, rather than using the extra income to reduce debt or build savings. Paying for an increasingly lavish lifestyle can make us too dependent too quickly on the new, larger salary. This makes it harder to change careers, retire, or weather a period of unemployment.

I’m learning the hard way that small businesses can get caught in the same trap. Moderate success can spur increased spending on the business itself, making it hard to return to the early days of running the business on a shoestring. As problems go, this is a good problem, especially in the middle of a recession. My business is becoming more established, less fly-by-night.

But I don’t want to get stuck in a cycle of spending long hours in my home office, working to pay for the home office. So I’ve been thinking of steps I can take to make sure my business expenses don’t eat up all my income.

1. Be smart about taxes. Now that I have a dedicated work space at home, I can take a home office deduction on my taxes. This means I can deduct a portion of our mortgage interest and utilities. I’ve also changed the way I save for retirement. Now that I’m paying self employment tax, I have a bigger incentive to contribute to my retirement accounts with pre-tax earnings. So I’ve stopped contributing to my Roth IRA, and instead I’m putting away money in a SEP-IRA.

2. Don’t overspend on self promotion. I’ve been thinking it’s time I put together a website to showcase the projects I’ve done and attract new clients. That means buying a domain name and hiring a web designer, and maybe a photographer to take a head shot of me. I already mentioned the business cards. I love the way letterpress printing looks, don’t you?

Wait a second. All this, just to promote a business that I can do part time, at home in my pajamas? If I’m not careful, I could easily spend all my freelance income and then some. There’s got to be a less expensive way to promote my business.

I can think of a lot of successful freelance writers who don’t have websites. Some link to online writing samples in their LinkedIn profiles, some write query letters to editors, and some get work through good old fashioned word-of-mouth. I could put together a simple site on my own without hiring a web designer. I have talented friends–one of them could probably take a perfectly good head shot. And I can buy a box of basic business cards online for less than $20.

3. Stick to a budget. I’m frugal when it comes to household spending, but for some reason it’s easy for me to justify spending money if it’s work-related. If I go to Staples, I usually end up walking out of there with some goodies that weren’t on my list. But they’re for work, so it’s okay, right?

It’s just as important to be frugal when buying office supplies as it is to be frugal at the grocery store. The tax deduction helps take the sting out of business spending, but it’s always better not to spend the money in the first place. Here’s where self knowledge comes in. I’ve learned I’m less likely to impulse buy if I’m in a hurry. If I go to Staples and wander around the store with a cart for 45 minutes, of course I’ll put things in the cart. But if I stop by for printer paper 10 minutes before an appointment, I will probably walk out the door with only printer paper in my hand.

So what’s a reasonable budget? It’s time to look at my records to find out how much I spend, average, on things like office supplies, computer equipment, and phone calls. Then I’ll figure out which expenses are fairly regular, like subscriptions and toner, and which big irregular expenses that can be anticipated, like computer hardware. Once I have that information, I can look for places to cut back.

4. Don’t be afraid to spend money. Sometimes spending money pays off. I was spending several dollars every time I needed to fax something, not including drive time to Kinko’s. Since I spent $125 on a printer with a built-in scanner, I’ve been able to get away with faxing less, because most companies will accept an emailed PDF file rather than a fax. I’m expecting the new equipment to pay for itself within a year, between reduced costs and increased efficiency.

5. Don’t skimp on insurance. Insurance is the bogeyman of the self-employed. It’s expensive, but it’s not smart to go without. I’m more fortunate than many freelancers because I have a part-time day job that gives me access to affordable health insurance. These situations, while hard to find, do exist. Other insurance solutions for the self-employed include joining a professional organization that offers group insurance rates to its members, or buying a high-deductible plan with a Health Savings Account. (You can see other Consumerism Commentary posts about insurance here.)

Believe me, I’m thrilled that I’ve graduated from writing at the dining room table. But now that I’ve got the basic ingredients to run a modest but successful freelance writing business, I need to make sure to keep my costs down and avoid the temptation to ratchet up my business expenses year after year.

Has your small business experienced lifestyle creep? What are your strategies for keeping your overhead low?

This is a guest article by VCMcGuire, one of six finalists interested in being Consumerism Commentary’s staff writer.

Photo credit: Kaspars Butlers

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Lifestyle Creep and the Self-Employed

The unemployment rate for young workers between the ages of 16 and 23 is 18%, and that is an increase of five points from a year ago. That age group includes high school drop-outs as well as college graduates, and for these people the future looks bleak. Adults are taking the minimum-wage jobs teenagers might be offered in other economic situations. Older workers, otherwise approaching retirement, are not leaving the workforce as quickly. The openings for younger workers aren’t there.

The bad news is starting your career in a recession is one of the worst things you can do for your long-term financial security. More bad news is that there is little any one person can do about the economy at large. Here are the numbers, from a study at Yale quoted in the cover story in today’s BusinessWeek:

For each percentage-point rise in the unemployment rate, those who graduated during the recession earned 6% to 7% less in their first year of employment than their more fortunate counterparts. Even 15 years out of school, the recession graduates earned 2.5% less than those who began working in more prosperous times.

Young adults might be destined to be a “lost generation.” Here are some suggestions for 16-to-23-year-olds who find themselves having a difficult time starting their career in this recession and want to mitigate its effects on long-term income.

1. Finish your education

It’s an issue of supply and demand. First, if you have not done so, completing your Bachelor’s degree will have two important effects. First, it will improve your marketability among entry-level employees when fewer open positions will create a competitiveness that ensures that the best qualified candidates will win. A Bachelor’s degree is a gateway to at least the middle class, and that’s going to be more important than ever.

Second, finishing college now will keep you out of the worst of the recession. This will allow you to stay out of the worst fight for jobs, but it has some drawbacks. Delaying the start of full-time income can also have detrimental effects on your long-term income — but if you wouldn’t be working anyway, this isn’t much of a disadvantage. Also, if you are relying on student loans, you will be amassing more debt that will require payoff down the road, perhaps shacking you to a job or career that is not best for you. New student loans have higher interest rates than they have in the past, adding to the pain of debt.

If you have your Bachelor’s degree, consider spending a few years to earn your Master’s or Doctorate degree. Are you worried about being overqualified? Don’t be. As we’re seeing in the recession where many workers are competing for few jobs, anything that helps you stand above the rest will be an advantage rather than a disadvantage. You might want to consider adapting your desired career to one better suited for an advanced degree, however.

2. Become an apprentice

In general, apprentices earn more throughout their careers than those who don’t hone their skills in a formal training program. Traditionally, apprenticeships are common for certain crafts and trades. Electricians, plumbers, and carpenters often get their starts through apprenticeship and there is significant income potential in these fields.

One creative answer is to become an apprentice for a career that does not traditionally fit this profile. For example, if you have musical talent and would normally consider performing or teaching in a better economy, consider composing music for films or television. You can contact a professional currently in the field and contact them about becoming an apprentice. One key to successfully finding an apprenticeship is the willingness and the ability to work for free.

3. Start your own business

I’m not talking about selling your possessions on eBay, but padding your savings account with cash rather than padding your home with useless objects is never a bad idea. Everyone has at least one marketable skill. It may require some time brainstorming to determine exactly how you can turn your skills into a service you can offer people or other businesses.

A recession is perfect timing to start a business, particularly if you can dedicate all your time to making it work (that is, you are otherwise unemployed). Many new businesses suffer because the owner needs to devote his or her time to the day job, a spouse, and perhaps even children. For young workers, the time will likely never be better for starting a business with the ability of giving it your full attention.

4. Save money

As a recent graduate or drop-out, you may have the option to move back in with your parents for a short time. After all, there is a recession and being able to save money on rent or a house payment is worth the temporary shame you might feel for going home with your tail between your legs. This is most likely the biggest opportunity for savings, but you don’t want to take advantage of the situation. Show your parents that you’re working hard to make the recession work for you, and they’re more likely to give you a break. And don’t forget to express gratitude.

Consider frugality as a way of life. In an economy where you have less control over your income thanks to fewer employment options, you can still control your expenses to a point. Take the extra time to determine what you are willing to cut back in order to help your money go farther. Occasionally, generic brands and store brands are good compromises.

Creativity leads to success

Surviving in a recession where it’s difficult to find a job relies on creative thinking. Use the opportunity to rethink your career path. If the acquisition of money has been your ultimate goal, realize that money by itself is not a goal. You may use the opportunity to break into a less popular field with a lower income potential but with a greater satisfaction potential.

Accept that the odds are against you if you want to compare yourself and your bank account against people who began their careers in the height of the economy, people who, on average, will out-earn those entering the workforce right now.

Photo credits: CarbonNYC, roland
The Lost Generation, Peter Coy, BusinessWeek, October 8, 2009

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New Graduates Facing Unemployment May Never Reach Income Potential

I just graduated a “Level One” (read: newbie) improv class. At first, I signed up for the class because I can think of few thing scarier than getting on stage with no script. I’m not known for thinking on my feet, I don’t “BS” well, and even when I know my lines, I get terrible stage fright.

So I made myself go to this class as soon as I knew I’d have eight free weekends in a row. It took about four years to get up the courage. I’d like to say that it also took some time to get the admission fee together, but of course the $200 went on a credit card (technically it came from the $800 that would otherwise have gone toward paying down the credit card, but the net effect is the same).

I didn’t have an extra $200 to take that class, but man, was it exciting. I had to deal with strangers, criticism, bad accents (most of them mine), and a basic requirement of acting in a scene where 1) you don’t know what you’re going to be saying, and 2) you also don’t know what the other people will be saying.

I didn’t think I could do it, but after eight weeks, we put on a show, and darn it if the audience didn’t laugh and cheer.

So, I figure, the class was 3 hours every weekend, for 8 weeks, for $200. That’s $8.33 an hour to have a creative outlet, learn to think on my feet, and re-learn to perform in front of strangers. I think that’s a reasonable price.

I still don’t have an extra $200. In fact, I’m still about $6,000 in a credit card hole, but I signed up for Level Two, anyway.

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Fulfilling a Dream for $8 an Hour

I think I come from a moderately humble background. My parents are both college graduates, which is a statistical leg up by itself, but my father had to work two jobs until I was 15, and I’m the youngest of my siblings. Mom also started working part-time when I was about 10, and then full-time later on. Suffice it to say we were not showered with gifts, though I only remember one particularly depressing Christmas, when I got a fancy pair of socks from Santa.

It was only later that I learned Mom had something of an addiction to JCPenney, and they were saddled with a pretty huge credit card debt until they were into their fifties. (It wasn’t all household shopping, of course. I’m sure that’s how they paid for part of our college tuition, too.) So, we weren’t spoiled, but we did pretty well. Lower middle-class, I guess you’d say. And I grew up into the belief that if you possess something, it’s because you earned it.

I knew kids poorer than me, and I knew kids richer than me. I remember listening to a conversation a “rich” kid friend of mine had with her mother, and her mother was lamenting the fact that when my friend was younger, she got everything she wanted. Her mother felt it gave her an unfortunate sense of entitlement. I don’t have that, and I hope I never get it, but as I get older, I can foresee some ways in which it might happen.

Ways I’ve already “cheated”

College

My college education was paid for by my parents. I had no student loans and no scholarships of any kind. I’m not sure I was even aware of the need to apply for such things, and though I took a part-time job working for the Dean’s office, anything I earned basically went toward feasts at Taco Bell and the occasional computer game.

I sort of feel like I cheated, in that respect. But if I know anything about parents, I know they’re happy to give their children opportunities to succeed. And I thank them for it all the time. I feel like I’m paying them back a little when I receive recognition in my field, or a raise.

Do credit cards count?

Okay, so credit cards are my enemy. If there is a little devil over my shoulder, he’s wearing Visa and Mastercard logos (and why are the little devils always men, huh?). Sometimes I want something, usually electronic, and I convince myself I’ve earned it, even when I can’t pay for it yet. I get it anyway. It’s cheating.

Except these things do eventually get paid for, and the interest payments seem like punishment enough. I know people who’ve reduced their credit card debt by more than half just by ignoring them for years. Their credit scores suffer, too, of course, but that’s the decision they make. It’s hard to tell in the long term which method costs more.

Being born into it

But there are people who don’t have modest backgrounds, and whose parents can’t help but give them everything they want. The brain is a funny thing, and so these kids grow up into adults who have an enormous sense of entitlement. Without any other educational influences (and thankfully, these are plentiful), such people will become impossible to deal with. A person like that could rationalize away never giving to charity, or hiding money in an offshore account, just because they can.

That’s not really cheating, but I think it’s really pathetic. I feel bad for a person who’s never felt the uncertainty of knowing where they’ll get the rent money.

Easy come, easy go

Instant celebrity (or anything similar to winning the lottery) can mess a person up. Parties and drugs aside, all too often they seem to make terrible decisions with their finances. If you go from $40,000 a year to more than a million a year, how do you not have the presence of mind to save most of it? And yet, the apparently overwhelming temptation is to buy lavish possessions, a mini-mansion, and then throw parties for your friends until the money runs out.

We know that record companies will do everything they can to steal from their latest money-maker, all the while making the artist feel like they’re financially secure. Hopefully this knowledge has filtered its way into every aspiring star’s consciousness, and they’ll be prepared with a reliable attorney.

Of course, it’s not just musicians who find sudden wealth. Sometimes you just have to be the random, somewhat-telegenic person in the right place at the right time. Monica Lewinsky, for example. All she had to do was tell her story, and she’s set for life. She didn’t earn that.

Ridiculous salaries

I get an itch every time I hear a phrase like, “Blah Blah, who earns $750,000 a year…” No, he doesn’t. Nobody “earns” that much. If the world were a reasonable place, the highest salaries would go to emergency workers, really great teachers, investigative journalists and people who find and stop wasteful spending in government offices (that’s not a complete list, just off the top of my head). But as it is, we reward athletes (who we often find were cheating with steroids), and executives who don’t actually do much, aside from make plans, smile at clients, and otherwise increase shareholder value.

But that’s capitalism for you. We give the money to people who make us money, not necessarily to the people who earn it. I don’t want to be the recipient of that kind of money. But if it were offered, would I refuse it?

Conclusion

I struggle with the concept of “taking advantage of the system,” because it’s impossible to know if I’m benefitting at someone else’s expense. And for me, that’s a deal-breaker: wealth should never come through a method that deprives someone else who is just as deserving as me.

I have an entirely new group of decisions to make, since my wife and I are incorporating a business, and we’ll have to weigh the consequences, for example, of “do we take a tax deduction on the part of the mortgage we’re using for business?” I don’t want to be a cheater, and I hope I never lose that attitude.

The Consumerism Commentary Podcast is in full swing with new episodes every Sunday. Listen and subscribe now!

Earning What You Have: The Mindset I Hope I Never Lose

Humans are by nature judgmental, and there are good reasons for this. Even though it is often premature, judging quickly helps people make critical decisions with limited information. That limited information, when combined with prejudices or generalizations, can result in poor decisions.

An interesting article from CNN Money asks if your name can prevent you from getting a job. Absolutely. If you have the “wrong” name — wrong in the eyes or ears of the reviewer — you are less likely to be called for an interview after sending a résumé identical to someone with the “right” name.

The National Bureau of Economic Research conducted a study a few years ago in which the authors responded to 1,300 employment ads, sending out 5,000 résumés. In addition to keeping recruiters and hiring managers busy, they measured that résumés featuring names like Emily Walsh and Greg Baker would receive responses 50% more often than those featuring names like Lakisha Washington or Jamal Jones. When comparing résumés featuring good qualifications with those featuring superb qualifications, the superb applicant has a 30% higher chance of being called if the name on the résumé sounds “white,” whereas superb applicants with a “non-white” name do not see an increased probability.

While this doesn’t measure the likelihood of getting a job after an interview, it does point out the initial judgment due to nothing more than a name. If you feel your name could be an initial detriment to your job search, there are several options, but none of them are very good.

1. Legally change your name. Your name is a symbol of your identity. Decades ago, it was common for immigrants to the Untied States to Americanize their names, and it wasn’t such a bad idea for those looking for a new life in the country. This practice is less common now, whether it is due to pride or the shrinking world. I believe for many people, changing a name to fit in with a prejudicial world is too much of a compromise to make.

2. Take on an Americanized nickname. Interestingly, it is apparently common for people born in China to take an English name but prefer to use their Chinese given name when living in the United States. Taking the opposite approach may help you fight the initial prejudice in the United States. If you feel your name is holding you back when searching for a job, keeping your last name but offering an American nick name might help you get your foot in the door.

3. Use only your first initial on your résumé. It would be interesting to see a study that measures the results of this tactic. It may only provide an advantage if the applicant’s last name doesn’t inspire a judgment.

I agree with the author of the CNN article: focus on the aspects of your image that you can control without sacrificing your identity. But this is only from my perspective as someone with a name that doesn’t sound very foreign. With the unemployment rate in the United States still high, perhaps more people are willing to compromise more for an advantage — or to level the playing field.

The Consumerism Commentary Podcast is in full swing with new episodes every Sunday. Listen and subscribe now!

People Will Judge You Based on Your Name

My wife and I recently started a business. Technically, I think we’re planning a business, since the incorporation papers are still winging their way through the mail, but it feels like it’s been started. We’ve got a P.O. Box, a domain name, and my wife the President of the company has been devouring books with titles like “Working for Yourself” and “Start, Run and Grow Your Own Business”.

For the moment, we’re focusing on finding work for her, since I rather like my day job (and subsequent health benefits… wouldn’t it be great to find affordable health insurance when you start your own business?), but I wouldn’t mind picking up some extra freelance work on the side. I’m starting to think that the only way I will ever pay off my credit cards is by increasing revenue to a level far above what I need to get by.

Our first outing as a company was a couple of days ago to a local Chamber of Commerce networking event. I had a couple glasses of wine so that I could pretend I’m not painfully shy, and though it was still awkward, I was rewarded to see people’s faces light up as I described the kind of work we’re planning. I saw some expressions on faces that seemed to say, “hey, we could use that kind of work at our business!”

But there’s still plenty for us to learn. Since the President seems to have the book-learnin’ angle covered (or could it be because my eyes get tired looking at words on paper?), I’ve been looking online for advice, and found that the Small Business Administration has a YouTube channel. The video production values are about what you’d expect from a bureaucratic agency, but I figured the content might still be worthy. As an example, here’s their video going over the “top 10 tips for small business owners”:

I noticed that “networking” isn’t in the Top 10, or perhaps everybody accepts it as a given. Either way, I hope this video series is useful to the rest of our readers who also have entrepreneurial tendencies. If you’re one of them, what other advice can you offer us newbies?

The Consumerism Commentary Podcast is in full swing with new episodes every Sunday. Listen and subscribe now!

Small Business Administration’s Top 10 Tips

This certainly isn’t the first or only Web site where one can describe a project and ask for donations, but if word of mouth is anything to go by, the new Kickstarter.com is the hip place to get funding these days.

I first heard about it on Twitter when one of my heroes Jesse Thorn linked to his project for people who want to learn to dress better, one might say “more sartorially”, if one were in the habit of speaking like a character in a PBS murder mystery series. Jesse described his project, tweeted about it once or twice, and the project is now over-funded and, one assumes, in production.

About 60% of the projects have been successfully funded, and they range from “help me produce my next album” to “experimental three-wheeled human-powered vehicle”. The trend seems to be that donors get a little something back for their effort, whether it be an autographed CD or credit in a Web series, etc.

I think I’m personally a little too old-fashioned and/or proud to ask for free money from strangers. If I have an idea for a new project (and I have them about once a month, most of them never launch), and I think it’s worth pursuing, and all I’m missing is the financing… isn’t that why people get things like loans and business partners?

Anyway, if you’ve used a service like this successfully, we’d love to hear about it in the comments.

Got a dream but no cash? The Internet can help, Matthew Goldstein, Reuters, Sep 4, 2009

The Consumerism Commentary Podcast is in full swing with new episodes every Sunday. Listen and subscribe now!

Hip New Funding Site: Kickstarter.com

Are you on this list? Chances are the following list of the highest paid CEOs does not include you, Don’t feel bad; I am not included either. In 2008, these ten individuals accounted for $2.2 billion in compensation in aggregate.

Whether or not CEOs deserve compensation at levels 17,000 times higher than the average worker in the United States or 50,000 times higher than the average worker across the globe is still up for discussion, particularly if compensation is not based on results. But for whatever reason, here are the amounts of total compensation for the ten highest paid CEOs of American companies.

1. Stephen Schwarzman, Blackstone Group: $702,440,573
2. Lawrence Ellison, Oracle Corp.: $556,976,600
3. Ray Irani, Occidental Petroleum Corp.: $222,639,705
4. John Hess, Hess Corp.: $159,566,940
5. Michael Watford, Ultra Petroleum Corp.: $116,929,392
6. Aubrey McClendon, Chesapeake Energy Corp.: $114,286,867
7. Bob Simpson, XTO Energy Inc.: $103,485,972
8. Mark Papa, EOG Resources, Inc.: $90,471,784
9. Eugene Isenberg, Nabors Industries Ltd.: $79,333,079
10. Michael Jeffries, Abercrombie & Fitch Co.: $71,795,744

According to the report from The Corporate Library, the organization that reported these figures, Schwarzman’s compensation amount includes the vestment of equity shares in the company he was granted when taking the company public. Only twenty-five percent of his total grant vested in 2007, and another twenty-five percent will vest each year until complete. That will keep him on top of the list for a few more years.

What would you do with $702 million — let’s say $350 million after tax? That would leave me with more than enough to start a foundation with an endowment and still have some left over to invest conservatively and provide myself a nice income for the rest of my life.

The top 10 highest paid CEOs are…, David Goldman, CNN Money, August 14, 2009.

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Top Ten Highest Paid CEOs: What Would You Do?

If you happen to be entering college and would like to decide the field you would like your career to be or feel the need to choose a major, you may want to consider a field that has growth prospects over the next twenty years or more. Even if you are already a few years into your career and it haven’t progressed the way you would like, now is a good time to consider shifting to a new direction. It would be impossible to accurately predict the future, but I can select a few careers I think will be growing based on current trends.

Information technology

Information technology (IT) is going to be huge, if not just in the next twenty years, for the remainder of the twenty-first century. While there is a trend of outsourcing jobs overseas, there are many types of careers that must remain local. Technology infrastructure is an exciting field. I expect broadband networks will be expanded to new areas and the populous areas already serviced by broadband will see upgrades. Beyond fiber optics, wireless broadband will be a strong trend as well.

Finance

Over the next twenty years, baby boomers will be retiring. Many still have pensions and many have 401(k) retirement plans. Retirees are going to need to know what to do with their money. Financial planners will have a strong market for their services, and so will investment advisers who sell products like annuities.

Health care

Politicians have their eyes on health care right now, and this is a valid response to the same social condition that requires more careers in finance. As the baby boomers, one of the largest demographics, continue to age, they will need more care. Home nurses will be in demand. Existing assisted living communities will increase capacity and new communities will be built. As an increasing number of people look to medication, more pharmacists will be needed.

Environmental scientists

Companies hire professionals to conduct environmental impact analysis whenever land is being developed. Not only is there still vast amounts of land that will be developed in the next twenty years, the focus on “green” will mean there will be even more work for environmental scientists. Environmental technicians will be in demand as well as entrepreneurs who create and manage the next generation of environmental consulting firms. The economy’s current slowdown means there may be less work now for environmental scientists whose work depends on new development, but I expect that to change when the economy recovers.

Not everyone needs to chase a career or job path that looks like it will be in high demand. I generally believe people should look to their own talents and desires before statistics in determining a course of study or career. I don’t deny, however, that fitting in to a carved-out path based on population patterns is a good idea for some people.

Are there any other careers likely to be in demand for the next couple of decades?

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Growth Career Fields for the Next Twenty Years

When it comes to financial success, your most important tool is your income. Without an income you can’t pay the bills, reduce your debt, or even buy the simple things you need to survive. With a properly maintained income, however, nothing is impossible. No matter what your personal financial philosophy, an income is one thing you can’t do without.

One the first things I learned about personal finance that has always stuck with me is the idea that risk is having only one source of income. I don’t remember where I read that little nugget of wisdom, but anyone can see the sense of it. The more places you have money coming from, the less likely you are to sink your financial boat.

Protecting your income streams can help you maximize your earning ability and simplify your life. Here are some of the things I’ve learned over the past few months:

Come to grips with your return on investment

It’s a good idea to know how you’re spending your time and how much money you’re making. An interesting exercise involves dividing up a week (or a month) into the different activities you spend your time on, and coming up with percentage of the total time spent. You don’t need to count sleeping or eating or relaxing, just focus on the things you do that make money (or have the potential to make money).

Once you’ve got your percentages figured out, calculate how much money you’ve made from each source. Your chart might look something like this:

• Job: 70% Time, 80% Income
• Hobby 1: 10% Time, 3% Income
• Hobby 2: 8% Time, 15% Income
• Side Job: 12% Time, 2% Income

After you’ve done this, it’s easy to see where your money-making time can be most effectively spent. Hobby 1 and the Side Job are taking up a lot of time, but aren’t necessarily making any money. Does this mean you should stop doing them? No! Of course not. Hobbies are great. You may, however, want to stop counting on them as sources of income. If you wanted to make more money, you could devote that extra time to Hobby 2, which appears to have some serious money making power.

This can be a tough exercise. Your hobbies and businesses on the side are usually things you’ve put a lot of thought, sweat and love into. You’ve got a lot of personal equity in the project, and deciding you’re just going to do it for fun kind of feels like giving up. You’re not completely giving up though, and you can always keep trying to change and improve it.

Anticipating change

Is there a pink slip coming your way? Are your contracts drying up? Start looking for another way to make money. So many people get stuck in between income sources and their problems snowball. Your job can be extremely enjoyable, a source of pride and joy, and even part of your identity, but don’t forget that at its core, it is a way to make money. It can be difficult to move on.

I’m at a position right now where I’m finally planning on leaving an internship where I’ve been for two years. I’ve got a lot of great memories there, and will miss out on some awesome perks. A new and better opportunity has come along, though and no matter how I’m tied to my old job, I can’t miss out on what the future holds.

Controlling spending

While income is important, wealth isn’t how much you make, but how much you save. Your income will be much more powerful if a lot of it gets to hang around in your high-interest checking account or some sweet mutual funds or an IRA. Lifestyle inflation can suck the power right out of a raise, so it’s important to remember that as you make more money, you should keep more as well. Spending smart is an important step to take.

Being proactive and finding new ways to maximize your money-earning time, plan for problems, and keep more of what you earn will help maximize your income and realize more of the benefits that come from the money you’re earning and maximize your income.

What are some of the things you do to make the most of your wages?

The Consumerism Commentary Podcast is in full swing with new episodes every Sunday. Listen and subscribe now!

Safeguarding Your Income

The summer following graduation is an interesting time for recently-former students. The newly-commenced young men and women, those not opting to pursue an additional number of years in an institution of higher learning, spend their time amongst activities such as attending backyard barbecues in celebration of their achievements, traveling to distant lands with newfound free time, and possibly beginning the first real job on their career path.

Not every job is the same, but for the most part there are a number of things in common.

• You need to make a positive impression on people you are meeting for the first time.
• How you perform on your first job sets the stage for your work ethic.
• If you stay in the same career throughout your life, your initial salary will be your most important negotiation.

Here are more specific tips for making the most of your first job.

1. Look the part. As much as it is superficial and stupid, people will judge you by your appearance. You need to dress and carry yourself in a manner that is expected and accepted by the people who work in your field. What is acceptable varies. If you work in banking in New York City, it’s almost guaranteed you will be expected to show up in a suit every day. If you work in the graphic arts, more liberal clothing might be acceptable. Find out what your manager or supervisor wears and emulate.

If you have not been accumulating attire during college, you may find the need to buy a variety of clothing at the last minute. This is one reason it may make sense to accept a controllable level of debt. Attire is a start-up cost associated with accepting a first job, and if you are required to dress well, your salary should cover these costs before long.

2. Negotiate. Graduates may be experiencing a “sellers’ market” while starting new careers this summer. With stories of the difficulty of finding a great job in the right field, it may be tempting to jump at the first offer. It is true that times like this call for adjusted expectations, but the dance of negotiation is an important and expected part of every job offer.

Not every job has this flexibility. For example, if you start as a teacher in New York City, your salary and benefits are determined by the union contract and you have no room for negotiation. If your first job is with a cash-strapped non-profit organization, you may face resistance. But the first salary offer you receive is almost always lower than the company’s true ability to pay.

The best suggestion is to be prepared to support your desire for a higher salary by researching your peers’ compensation and by explaining well the skills you can bring to the table above other candidates. As you may not have much experience in your field when you start your first job, you may not have a list of accomplishments, so be creative while being honest.

Here are tips for dealing with a low salary offer. Remember to look at the total compensation, not just the salary. You may have more wiggle room if you ask for more vacation days or for quicker establishment of your retirement benefits.

3. Enroll in your company’s retirement plan. When I started at the company where I currently work, I qualified for the company’s 401(k) on the day I began. Although a portion of my company’s matching contributions wouldn’t vest (become officially mine) until I had been working there for three years, my first paycheck included a deduction for my 401(k) and a matching contribution from the company. While enrollment is often automatic, some companies don’t start helping you put aside money for retirement until you tell them how much you want taken out of your paycheck.

Young adults with their first job often do not think about retirement, an event likely to be more than forty years in the future. Not enrolling in a 401(k) with matching contributions is the same as throwing away money. I understand that people who are just establishing themselves at work and in life have expenses, and retirement savings cuts into income. But putting aside two or four percent of your income — or up to the maximum matched by your employer — should not be a stretch.

4. Open an IRA. Your 401(k) contributions are taken right from your paycheck, so you might not even notice your money is being transferred to your future self. It may be more painful to your wallet to open an IRA, but if there is no pain, there is no gain. So open an IRA at a low-cost brokerage like Vanguard. When I started my IRA, I didn’t have the $3,000 minimum, so I jumped right in with TIAA Cref. I suggest saving money periodically in a special bank account until you have the $3,000 necessary to open an account at Vanguard because I have encountered some problems with TIAA-Cref.

If you already have a 401(k), open a Roth IRA. These two types of accounts have different tax treatment, and it’s good to diversify. If your company does not offer a 401(k) or its non-profit cousin the 403(b), split your money between a Traditional and Roth IRAs, if you can, to get the same tax diversification.

Your career and the skills and tools you use to thrive in that career are your biggest assets, even though you won’t see them measured on any balance sheet. Protect, refine, and showcase your self and your skills when you can. If your career is important to you, go above and beyond the call of duty.

The Consumerism Commentary Podcast is in full swing with new episodes every Sunday. Listen and subscribe now!

4 Important Tips for Graduates Beginning a First Real Full-Time Job

Overall, the worst of the economic recession may be over in terms of unemployment. If it isn’t, or even if it is, many companies are still struggling as they find ways to cut costs. The next expense that might be cut could be your job. If you receive the pink slip after missing the signs pointing towards the loss of your job then you have some catching up to do.

There is nothing like an expected bout of unemployment to remind you of the benefits of a fully-funded emergency fund. With cash in the bank, you can sit back at the beginning of your time away from working and approach your situation without stress. Stress will cloud your perception and cause you to make choices based on your short-term circumstances rather than your long-term aspirations.

Speaking of long-term aspirations, I’ll start there in a short exploration of suggestions for using your newly found free time effectively.

1. Re-evaluate your life goals. And if you don’t have proper life goals, now it a good time to think about it. A real life goal is not the specific, measurable, attainable, relevant, and time-based (SMART) goal that you hear about in corporate development retreats. Leave that to the MBAs. A life goal relates more to what the MBAs mean when they say “mission” and “vision.” (Disclaimer: I, too, am an MBA.)

So what is your mission? Here are a few things that it should not be:

• acquire a net worth of x by the age of y
• retire by the year z
• own my own business

All of these examples are means to an end, not goals in and of themselves. Your goal should explain what you will do with your money, what you will do with your time in retirement, or what you will do with your business. They need not be lofty, but life goals should not focus on numbers.

After you determine your mission, you have the opportunity to make decisions about your career, money, and time that align with that mission. If you need some more motivation, here are 9 tips for choosing a purpose in life.

2. Determine the steps for reaching your goal. With your goal or goals in mind, brainstorm your next steps. The only materials you need here are pen and paper. If you think hierarchically, create an outline in which your main points are the major milestones you’ll need to cross to reach your goals and the next level contain the tasks you will need to accomplish to reach those milestones. If you do not operate in this organized manner, just write down everything that crosses your mind when you think about what you need to reach your goal.

Even if your thoughts aren’t organized, determine the next step for your career. Your emergency fund won’t last forever. And here is what you need to keep your emergency fund as long as possible.

3. Get financial assistance. When you worked, you paid unemployment insurance premiums. Now is the time to be on the receiving end of the financial relationship with the state. Apply for unemployment insurance right away. Don’t stop to think about whether you need unemployment insurance with your emergency fund ready to help you out and with thousands of other people in more need. Unemployment is there for you, to make sure you have more freedom to prepare yourself for your next move.

You may also be entitled to health benefits through your former employer and COBRA. This means that you can still pay group rates for coverage rather than finding individual coverage. Group coverage can often be much less expensive, but you may find that you will still have to pay more than you did as an employee. Most companies subsidize or partially subsidize benefit premiums, and that subsidy disappears once you have left the company.

4. Make smart financial decisions. Here is a short checklist of the most important financial moves you can make while not working in addition to receiving unemployment and carrying over your benefits.

• If this is an emergency situation, don’t be afraid to tap your emergency fund. This is why you have it.
• With less income temporarily, take the opportunity to cut back on some luxuries. Evaluate your spending to determine where your opportunities are for reducing your expenses.
• If you have a 401(k) managed by your previous employer, consider moving it to a Rollover IRA. In many cases, you will find that your options for investing within an IRA are better than what you can find in most employer-sponsored 401(k)s.
• Don’t withdraw money from your retirement funds if you can help it. If you do, you will be required to pay taxes and penalties. It is not worth risking your future.

5. Refine your self-marketing package. It’s your move. If you have a goal in mind and you’re passionate about it, you’ll want to get back on track right away. Even if your goal hasn’t changed in step one, you have a chance to refine how you present yourself. Resumes and cover letters are not enough.

Even if you are not in a creative field, consider what examples of your work you might include in a portfolio. Just like a graphic designer won’t enter an interview without examples, don’t speak to anyone who has the ability to hire you without preparing some kind of presentation to showcase what you do, what you have achieved, and why you have what it takes.

6. Fashion yourself as an expert. This is part of your marketing package. A great way to establish yourself as an expert in your field is to publish articles in journals or magazines related to your profession. That’s the twentieth-century approach; today every writer is a publisher and every goal-seeker has the opportunity to show the world his expertise.

Start a blog, write frequently, and don’t stop. This works best if you possess writing skills, but you would be amazed at how many mediocre writers manage to find success. Find a community of bloggers who focus on your area of expertise and get to know the leaders of the group. Participate in discussions on their blogs, ask them for their advice, and give back to the community. Once you establish your online writing, look for opportunities to write for others, sharing your expertise to a wider audience. Don’t blog to earn money, blog to perfect your writing and give yourself public evidence of your passions.

7. Start networking with the right people without being obnoxious. Like Penelope Trunk from Brazen Careerist mentioned in last Sunday’s Consumerism Commentary Podcast (listen and subscribe if you haven’t already), sending a resume through an online job service is not enough. To get an advantage you need an “in.”

When someone I know is trying to “network” with me, I know it right away. They ask questions to determine my decision-making authority and anything else they feel I can do for them. Serial networkers tend to think only about themselves their needs; show more class by considering the larger picture, being empathetic, and showing your personal side.

8. Sharpen your skills. Your life goals may require you to establish new qualifications or credentials. There is nothing like time off to inspire you to enroll in a class, earn a new degree, or qualify for new certification. Above, while you were listing the steps for reaching your goal, education should have been at least one of the ideas you prescribed for yourself.

The great thing about pursuing additional educational opportunities, in addition to the knowledge you acquire, is it provides you with an answer to the question, “What were you doing between jobs?”

9. Start consulting. The steps for approaching your goals may lead you to working for yourself. But even if they don’t, start consulting in your field. With your blog established earlier, make it clear to the public that your expertise is available for a fee. You will have to do more than putting a billboard on your website, of course. Contact people, particularly the people with whom you networked in step seven, and ensure they are aware of your business.

Erica Douglass who writes at Erica.biz has a number of thoughts about creating a business identity for yourself online. In this upcoming weekend’s podcast, Erica has a number of suggestions for establishing your business as a self-employed individual. Her thoughts are destined for those permanently leaving the corporate world behind in favor of the make-your-own-rules lifestyle of an entrepreneur, but her suggestions will apply to those establishing themselves as a consultant as a means to advance their career and reach their ultimate goals.

10. Don’t lose confidence. Unemployment can be a financial and emotional strain on an individual and on a family. The good news is that all of these tips should keep you busy, and if you are busy, there is less opportunity to get drawn into negative feelings about your situation. Keep working, keep improving, and keep your ultimate goals in mind.

The Consumerism Commentary Podcast is in full swing with new episodes every Sunday. Listen and subscribe now!

Ten Things You Should Do When You Get Laid Off