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People Will Judge You Based on Your Name

by Flexo on September 17, 2009

in Career and Work

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.

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Podcast 19: Giving Yourself a Raise

by Flexo on August 30, 2009

in Podcast

Our guest today is Matt Jabs, blogger and founder of Debt Free Adventure, a blog designed to help the author stay accountable for getting out of debt. Debt Free Adventure is one of my favorites among new personal finance blogs.

Today’s discussion focuses on the concept of giving yourself a raise, an important way to improve your financial condition, particularly in an economic environment that is supporting fewer raises from your employer. Tom Dziubek and I explore this concept with Matt Jabs and discover a number of ways you can give yourself a raise today.

 

To listen, use the player above (Adobe Flash required), download the podcast here, subscribe to the podcast RSS feed, or use the iTunes link. Note: open links in a new window (Ctrl-click or Command-click) to avoid interrupting the podcast.

[00:00] Introduction from Tom Dziubek
[00:33] Interview with Matt Jabs of Debt Free Adventure
– [01:10] Matt’s inspiration for writing about personal finance
– [02:57] Giving yourself a raise at home
– [04:26] How to give yourself a raise
– [08:41] Creating a personal trigger to change your mindset
– [10:24] Living outside the box
– [12:16] Finding and following your passions
– [14:29] The journey is as important as reaching the goal itself
– [15:59] Dealing with customer service reps
– [21:39] Do it yourself
– [25:17] How it adds up
[28:04] End

We always welcome feedback from listeners. If you have any comments for this episode or for any other, or if you have suggestions for future episodes, please leave us comments here or email us at podcast at this domain name.

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Top Ten Highest Paid CEOs: What Would You Do?

by Flexo on August 17, 2009

in Career and Work

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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Posts of the Week

by Flexo on August 1, 2009

in Personal Finance

For some fun reading, I recommend these articles written recently and published across the internet.

Estate Planning: Are You Ready When Your Time Comes? Lazy Man narrowly avoided death recently, but it is my grandmother’s condition that leads me to link to this timely post. Here, Lazy Man offers several tips to help prepare the loved ones left behind for handling your responsibilities following your passing.

What Works for Me: Debt Reduction Mindset. It’s always fascinating to see someone else’s motivating factors in any task. Motivation varies greatly from person to person. In this article NCN describes what motivates him to getting out of and staying out of debt. You may come away with some suggestions for keeping yourself on the debt reduction path as well.

Want a High Paying Job? Do the Math. Mr. Tough Money Love points out a recent survey that shows that the college majors resulting in the top job offers in terms of starting salary are strongly weighted towards those requiring strong math skills. Most of these jobs are various forms of engineering.

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Growth Career Fields for the Next Twenty Years

by Flexo on July 27, 2009

in Career and Work

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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Ten Things You Should Do When You Get Laid Off

by Flexo on June 26, 2009

in Career and Work

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.

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Citigroup Employees to Receive 50% Pay Raise

by Flexo on June 24, 2009

in Career and Work

After receive bailouts from the government on two separate occasions, Citigroup has announced that it will be increasing its expense for the salaries of the company’s rank-and-file employees, not upper management, by 50 percent. This will be a nice benefit, designed to compensate employees for smaller bonuses and raises last year.

The government’s new “pay czar,” Kenneth Feinberg, has the authority to only oversee the compensation of the top 100 employees of companies on government assistance.

Of all the wackiness involved with Wall Street compensation, this is not a big deal. I don’t see any valid reason to start breaking out the pitch forks and marching on Citigroup headquarters. The rank-and-file employees who stayed with the failing company deserve recognition. The executives who oversaw the bank as it buried itself and made the decision that led to the demise should be thankful these employees stayed with the company (even if the reason for doing so was the lack of a job market).

Unfortunately, it seems the employees will also receive a company stock benefit. There’s a chance that could pay off nicely, but it seems like a risky proposition right now, considering the ambiguity of Citigroup’s future.

How do you feel about Citigroup’s employees, as a group, receiving a 50% pay raise? Some will earn more, some less, but it looks like the bank is investing in their employees here.

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Podcast 9: Penelope Trunk from Brazen Careerist and Leo Babauta from Zen Habits

by Flexo on June 21, 2009

in Podcast

Penelope Trunk and Leo Babauta are today’s guests on the Consumerism Commentary Podcast. Penelope Trunk is the author of Brazen Careerist: The New Rules for Success and founder of the career advancement website Brazen Careerist. Tom Dziubek and I speak with Penelope about maintaining careers in today’s recession and she presents a number of tips for finding jobs right now.

Our discussion with Leo Babauta, author of The Power of Less and creator of Zen Habits, centers around the concept of minimalism and how this philosophy can improve your personal financial situation.

 

To listen, use the player above (Adobe Flash required), download the podcast here, subscribe to the podcast RSS feed, or use the iTunes link. Note: open links in a new window (Ctrl-click or Command-click) to avoid interrupting the podcast.

[00:00] Introduction from Flexo
[00:48] Interview with Penelope Trunk
[01:35] — The economy’s effect on the job market
[02:45] — Generation X versus Generation Y
[05:52] — Applying for jobs online is not enough, hire a resume writer
[08:14] — Standing out among a large pool of applicants
[09:30] — Cover letters
[11:15] — Personalizing the job search with social media
[14:15] — What Brazen Careerist offers career seekers
[16:50] Interview with Leo Babauta
[17:35] — The definition of minimalism
[18:48] — How minimalism is related to personal finance
[19:40] — Minimalism versus frugality
[21:49] — Applying minimalism to buying a house and car
[24:51] — Small changes to spending in line with minimalism
[26:48] — Gradually shifting to minimalism
[28:27] — Minimalism helps you lose weight
[30:15] — Applying ten healthy dieting principles to debt elimination
[35:05] End

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