Success in Finance: Maximizing Your Personal ROI

Later Guys

2008-12-10T13:32:00.000-08:00

Well guys, it has been a pleasant run- but much like Seinfeld that ended on an upswing, I will be retiring from this blogging community.
Here is my last bit of food for thought: Apply to grad school. This goes for those who have a job as well as those without. I’m currently looking at different opportunities in the business field- whether it be an MBA or an MS program- education can never hurt. In the interim, I’m almost done with a well known and respected insurance designation…which can’t hurt. Remember people of the internet- they can take away your jobs, but they can never take away your diplomas! (points to those who thought I was going to say freedom…)

Tis December

2008-12-04T12:37:00.002-08:00

This may be a premature post since I still have a few weeks (I’ve decided not to blog next semester although it has actually been quite fun), but I’m going to leave a few tid bits of wisdom (seeing as I am all of 25 years old, I am full of it…wisdom…).
I often feel that in this world-especially in the US and in the finance industry, we all run all over the place to get ahead essentially for more money. I have in the past week come to a conclusion. Money is probably the worst reason to make a change that can exist (unless you’re talking about money you need to say, survive). If you have job satisfaction, if you are respected in your workplace, if you wake up and smile, if you’re genuinely happy in your situation- don’t give that up for any amount in the world- because trust me, it is not worth it.
I’m really running out of topics due to a complete lack of activity on your part! Next week is going to be about commuting if you guys don’t wake up!!

Retirement & your career: Baby Boomers head to Early Bird Specials

2008-11-24T02:31:00.000-08:00

Hello readers of the blog.

Here is a quick survey I’ve decided to conduct.

I read this morning on the front page of the AI CPCU (American Institute of Chartered Property Casualty Underwriters) about the increasing job opportunities and the vast opportunities that will exists in the next ten years or so, based on the fact that the Baby Boomer generation is ready or getting ready to retire (if they haven’t lost their entire retirement fund in the market, forcing them to work until approximately age 90.) This made me ponder the many points of my career thus far, which although I don’t pretend that I’ve been around for all together that long, I have met my fair share of people considering.

We work in financial services, an industry that is so incredibly welcoming to young talent willing to bust their chops to climb up the corporate ladder. Think of our friends for a minute who work in other industries, who had to start out as someone’s assistant to eventually work their way up to a decent salary and a position where they hold some responsibility for the results they are supposed to produce. Finance generally speaking offers enormous opportunity right from the get-go where young graduates can actually get their hands wet with clients instead of just fetching coffee.

This brings me (finally) to my point, using the age of 55 as a threshold, I really don’t find that there are THAT many baby boomers that will be leaving open positions. I’d say that 85% of the brokers I’ve collaborated with or other underwriters I’ve worked with are actually under 45, meaning that they have another 20 years MINIMUM to work before I can even begin to think about usurping their position!

So my question to you- demographically around your office- do you see that there will be lots of new opportunities popping up in the next 5-10 years- or is the Media just toying with our emotions?

Ask and Ye Shall Recieve

2008-11-20T08:01:00.000-08:00

Hi Guys,
in the complete and utter absence of questions from the crowd, I’m going to talk about exactly what I did today at work.
I walked into the office at roughly lightening speed at 9:02 am, because the Tram I take to get to work was running late (LIAR- I accidently slept for 15 more minutes).
I turned on my computer and accessed the various systems that I might need over the course of the day- one for checking Claims activity, the Archiving system, and Outlook. This took about 15 minutes during which I updated myself on msnbc.com, corriere.it (major Italian newspaper) and did a Wikipedia search on the history of Santa Claus... which seemed like the right thing to do at the time.
Then I went and had a lovely caffé macchiato, which took about five minutes.
After that I spent about 3 hours responding to emails, correcting policies, translating an extension from English to Italian, trying to avoid a broker who called me 5 times for something that isn’t even from my department.
Then I went to lunch. I had a lovely plate of pasta al forno with a Coca Light followed by a normal caffé. After lunch, I took a lovely stroll behind the Columns of Saint Lawrence (San Lorenzo).
After lunch, I received a few Bind Orders- because I’m cool like that, so I sent instructions to book the premium into our system and confirmed the coverage to the respective brokers. After confirming said coverage, I had a lovely but totally non insurance related conversation with one of these brokers, who kind of loves me in this moment because of a fantastic quote I put out about a week ago.
That is my story.
Questions?
Comments?

Risk- not just a board game (Australasia...is, fyi, the key to success)

2008-11-13T03:01:00.000-08:00

Ciao Ragazzi,
Another week in the financial world that has made me think of some interesting things. But essentially I’m going to skip over all those interesting things and go straight to something I read this morning on one of my favorite political blogs.

Political risk in foreign markets. This is something that I’m sure we’ve all studied, and definitely something that we have to think about from the Insurance side of the world. I also happen to find this fascinating. The article in sweetness & light spoke of how foreign investors are pulling out of Russian markets due to an instable political situation which caused a precipitous fall in trading. This goes back to some of my recent posts about the fantastic mingling between finance and government. Who controls assets- and what does that mean to private entities?

This is something that we think of often (or at least we should) as Insurers- especially to be honest, since I’ve been working in Europe. Why you may ask? Lets think of a basic Commercial General Liability (RCT as abbreviated in Italy) policy for an international law firm. Lets say, this firm has 3 offices, one in New York, one in Milan (otherwise I probably wouldn’t care to look at it being a snob about these things) and one in the middle of Kenya (you know, like most big international law firms have that oh so important Kenyan office). As an Underwriter, one must take into account the political enviroment in NY, Milan and Kenya and the possible ramifications on the property if, as happens so very often in New York, tribal wars break out. Seized or destroyed property becomes an Insurance claim.

While underwriting Professional liability, lets say, for our imaginary international law firm, the socio-political enviroment is something that should weigh fairly heavily on rating applied to said prospective Insured. For example, Americans (and particularly certain jurisdictions within America) are far more litigious than Italians here, which is why we can underwrite policies at premiums that are shockingly low compared to the premiums that would be generated in the New York marketplace.

Just some food for thought, which I find interesting (I TOLD you all that if you didn’t ask questions that I was going to ramble on about Insurance…I don’t lie about serious things like this).

I put my pants on one leg at a time, and once I've got my pants on, I make gold records

2008-11-05T00:47:00.000-08:00

Hello readers,
Sorry that it has taken so very long to post this week- but I’ve been rather caught up in election fever. The only solution was clearly more cowbell. But now, its all over so we can all go back to our everyday American (ex-pat) lives. While I’d love to blog about the outcome of the election and the effect it will have on the market, I will not- partially because I’m upset about the actual outcome and partially because I think the Obama tax plan will- in the long run- stifle the economy. One of the key strategies for getting out of this mess is to allow the free flow of capital through the markets and economy in general (who didn’t like that little extra something from President Bush a few months back…I used it to pay my student loan for a few months, therefore buying myself peace of mind). It is of course, much harder to allow the free flow of capital through the markets and economy when the taxes you pay are higher and therefore you don’t have the money to blow on those little things (I so wanted to buy a vespa…mint green…very Roman Holiday).

Anyway, a lot of corporations are getting ready to release 3rd quarter results. What are you all expecting??? It won’t be good for anyone I dare say- but frankly, I think that in the next 2 quarters we’re going to see a bottom from which we can all grow. With everything that happened in September how on earth is it going to be possible to post gains??

But then again, this might really be the opportunity for our generation to build up a nice investment portfolio at those rock bottom prices that will bring us our millions in the future. This is a lesson I learned from my father- who got it from his father. My Grandfather worked for AT&T, he wasn’t an executive but he was a hard worker who believed in his company- or at least believed enough in his company to invest in it too. It worked well for him, and at these prices you can’t lose (well, you can- but you get it).

Take my investment advice here my friends, my hot tip last week (you know, forget the markets and place bets on the Phillies) turned out to be spot on, which makes my hit ratio higher than Jim “buy Lehman stock even though its going to fail in a week” Cramer.

My new investment strategy- The Phillies

2008-10-28T02:10:00.000-07:00

Who else is sick of watching the markets??? I checked randomly yesterday about 3 times while I was at work (consider that I still work in Milan, and so there is a 6 hour time difference usually), and all three times I checked, there was a different snap shot. Roller coaster doesn’t even begin to correctly describe the action. So, to go back to my post of a few weeks ago saying that a solid job/future for all you business majors could lie in Directors and Officers insurance, I have some news.

EVERYONE is looking for D&O underwriters right now it seems. I was looking around the internet today at some of our competitors and that is the one consistency I found- D&O- everywhere you look D&O.

In other financial news, I made a 10 Euro bet with one of our marketing people (who oddly enough happens to be a huge – and informed- baseball fan) on the World Series. Since I went for the Phillies it seems like I’m going to see a positive return on this. Which given the state of things, is probably a safer “investment strategy” than actually investing. So yes, I’m going to try to supplement my retirement with well placed bets on American sporting events against uninformed Italians.

Maybe if I can fool enough people into my little Ponzi scheme here I can retire after the Super Bowl…build an empire based on nothing.

PS- If you think that this is a legitimate way of making money, or find this theory mildly fascinating- check out the experience Sports blog. The link is on the right.

Comic Relief??

2008-10-19T05:03:00.000-07:00

Who doesn't need a laugh....courtesy of NBC.com and SNL

WHY CAN'T MY JOB BE CREATIVE??? or Things that upset me, Part I

2008-10-18T06:33:00.000-07:00

Dearest readers of my blog,
In taking a break from the high stress, tumulous, armaggedon style news bits that we’ve all been reading about the financial community in the past few weeks, I bring you what may be the first enstallment in a series of “Things that upset me”. This particular “thing that upsets me” stems from a conversation amongst my roommates a few days ago. Because our landlords control who takes the rooms in our house (and in exchange we pay rent per room and not a fixed amount for the apartment), we found ourselves living with a student in her first year of the Prestigious Italian university- “Bocconi.” Bocconi, for those who don’t know, is the Italian answer to Harvard (although that is probably giving it too much credit), but it is widely considered the best university in Italy with a renowned Business program.
Now, we were discussing her major and she had mentioned that she wanted to major in Marketing because ultimately she wants a job where creativity abounds. So, naturally, as someone who frankly loves her job- I said, “Sara, why not try insurance??”. Her response was something to the effect of “Insurance?!?!?! Blecchh.”
This brings me to my point- THINGS THAT MAKE ME UPSET: Why is it ASSUMED (and we all know what they say about ASSUMING) that there is a complete and utter lack of creativity in the financial sector?
Look, creativity isn’t SOLELY defined by those working in the arts, or at least it shouldn’t be. I think that creativity is best encompassed by being innovative in thoughts, processes and practices. If the financial services industry wasn’t CREATIVE, we would all still be trading food for animal pelts. Most of the insurance coverage that exists in the market today are the result of somebody identifying an uninsured hole and figuring out a way to indemnify loss. The act of placing monetary value on promises (which is what most financial services are- promises to cover insurance claims, speculation that an investment will go up, etc) is nothing short of an act of calculated creativity based on a working professional knowledge.
Hey, I’ll even go one step further to say that a lot of what we see in the news is based on creativity- “creative accounting” – and who’s idea was it to bundle sub prime mortgages into AAA rated bonds!?!
So don’t tell me that people who work in Finance aren’t creative- oh Italian roommate of mine! Its simply not true.
Sincerely,
Lydia (who recently headed up a group who won a new products competition- Professional Liability for Priests- If that’s not creative, I don’t know what is)

Brother can you spare a dime, and other 1929 classics

2008-10-13T01:44:00.000-07:00

Dear Financial Markets,

WHAT ARE YOU DOING!?!?!?!? On behalf of all financial services professionals five years or less out of college- PLEASE “check yourself before you wreck yourself.” Or perhaps its too late…A good chunk of America has seen their hard earned money disappear into thin air over the past two weeks- and this clearly is going to have serious repercussions over the most innocent of us whose only act of “corporate greed” (as the socialist left would put it) has been to show up at work and dedicate our days to making our company better, and financially stronger. But this blog is REALLY supposed to be about jobs, and most importantly finding the right one for you and how it looks once you’re in your cube farm.

The one thing that this financial crisis hasn’t changed is the need for certain positions in the financial community. Granted, with the massive layoffs that the industry has seen since the collapse of Lehman, it is certainly not the time to walk into your boss’s office and demand a 30% raise, a promotion or a week of vacation because “you need a break” (ps- I’d like a raise, a promotion and a week of vacation if anyone is reading this…I’m exhausted). The traditional and obvious doors may be temporarily shut but, for those looking for a job, there may still be a way to sneak in through the window. Here are some things I’ve noticed in the past few weeks.

Accounting: if you have a penchant for numbers, this may just be the way to get into your dream corporation right now. I work for one of the companies that have been making headlines lately, and although new hires have certainly slowed down- one thing I have noticed postings for is Accountants of various levels. WHY? Because when you’re in a financial pickle- some of the most important people in the organization become those people who tell you where your money is going and how much is coming in. It’s a simplistic thought but a well staffed accounting department is fundamental, especially when a company is having a hard time.

Marketing- if you have a background in marketing, and you are trying to enter the financial world right now, while this isn’t in itself a qualification, it is a fantastic talking point. Listen, you might say to the person interviewing you, in these tough times, in a soft market, one of the most fundamental elements of a company’s sustainability is retaining existing clients. For growth, one must bring in new clients, and this is most effectively done through good marketing and relationship management. BOOYA- marketing people- USE THIS ARGUMENT! (If talking points can work for political parties- why can’t they work for job hunters?)

Lastly, if you think that there is no way that despite the above you can find a job, maybe its time to start making a strategic investment in yourself- maximizing your ROI is after all, and the name of this blog. In a tight job market, the general idea is to have your resume stand out more than the next guy (and maybe the next guy went to Harvard- what do I know??), and a wonderful way to show interest and dedication to a field where you might not have any practical experience is through professional examinations. So, if in your long days of hunting experience.com or monster or job fox, you are still frustrated- perhaps its time to pick up a text book. Start your Series 7, your CPA exams, your CPCU (Chartered Property Casualty Underwriter) or any other of the number of titles offered through the American Institute of Chartered Property Casualty Underwriters. It is a better option than watching day-time television anyway!

Let think positively and proactively- and WE can make all the difference in the next 40 years of financial history!

The Following Is Entirely MY Opinion...

2008-10-06T05:52:00.000-07:00

I’m sitting at my desk today drinking water like a marathon runner- maybe because the past few days have been a marathon of insurance and market news. But, as I’ve said, for real news- and not just opinions or speculation- read Bloomberg- because largely financial blogs are speculation and advice should come from professionals (even though Cramer is and has been wrong many many times- so choose your professionals wisely).

Here is my weekly food for thought:

The election and the bailout. Who’s to blame? Who should we vote for? What does the current financial situation tell us about the US Financial System and what has happened in the past.

The origins of these questions, history major that I was, lies in the very foundations of America. Back in the days of Alexander Hamilton (famous now for the old “Got Milk” commercial), the first US Secretary of the Treasury, there was a big debate as to the beginnings of a UNIFIED American bank. This issue of Individual states rights vs. Federal control harks to the very foundations of our nation, and hits every major issue from Finance, to the abolition of slavery, to women’s rights- and one of the fundamental differences between Republicans and Democrats. The financial industry has long been governed state to state- as Insurance continues to be through various state regulators, but along the way in the past 250 years or so, there was a gradual move in the banking industry towards cross state chartering, national regulation, mergers and acquisitions along the lines of different financial services, establishing financial holding companies and eventually- Deregulation.

Now, where to place the blame. First of all, placing blame in this situation is rather useless in the sense that the damage is done, and now we have to find a way to deal rationally with the fall out. It is also subjective as everyone, in the completely partisan USA would rather blame the “other party”. However, when examining a series of legislation, especially since Clinton’s overhaul of the Financial sector in 1999 (the Financial Services Modernization Act), which heavily deregulated the industry (and brought up to date by today’s congress) and allowed banks to engage in other “financial services” where they previously could not- like Insurance (previously left to the Insurers) or mortgage lending.

Another major problem with the Mortgage crisis is that it is something that was developed in the Government rather than the Finance Industry. Legislation passed during the Carter and Clinton administrations made certain types of sub prime lending illegal- outlawing redlining (also illegal in property insurance- its refusing to lend or insure in certain areas based on demographic information. It speaks to the Adverse Selection risk the finance industry faces, which is a term used to describe the fact that the guy who lives on an earthquake fault line is more likely to want to insure his house than the guy living in an area that’s never had a hurricane, earthquake, flood or tsunami). This opened the industry to an incredibly heightened risk when all of a sudden banks were forced to recognize Unemployment checks as a legitimate source of income.

Now, as an Underwriter, we are paid to exercise our good/professional judgment in assuming risk on behalf of our organization. When Uncle Sam reaches his hand over my desk forcing me to accept clients I know have an increased probability of default. - Something is going to happen.

So who do we blame???

Can't get a job? Try Insurance!

2008-09-29T06:10:00.000-07:00

For those of you just starting out in your “finance careers”, welcome to the worst situation we’ve possibly seen since the late 70’s where unemployment lingered around 11%. Remembering however, that the scope of this blog is not to talk about Financial Markets (read Bloomberg for that!), because I’ll leave that to the experts, like Maria Bartiromo (who is also Italian-American, making her even more brilliant). The scope of this blog is to talk about careers and career possibilities in Finance. Here for a moment I’ll agree with my predecessor- if you have a job that’s steady (i.e. - you don’t work for Lehman brothers three weeks ago) - now is probably not the time to ask for a 200% increase and 9 promotions.

Instead let’s look at those new graduates, or the ’07 class of graduates who found themselves wading in the beginnings of a financial tsunami. Consider insurance. Perhaps you had dreams of analyzing companies’ financial soundness or business structures, making your evaluation and turning it into dollars and cents for your employer. Well, the good news is- you still can.

As the financial crises in the Wall Street area progress, there is one thing that all these companies have in common or are wishing they had in their portfolio- and that is Directors and Officers Insurance. Directors and Officer’s insurance- or D&O as we call it, is a financial insurance product in which we (the Underwriter) evaluate a company based on their finances, but also the Board of Directors makeup, structure, experience, and business sector. Essentially what D&O covers is financial loss (either to the company (referred to as “Side B”) or to the Directors themselves (referred to as “side A”)) in the case that an Officer is held accountable for a wrongful act in their capacity as Director/Officer of a corporation. Claims frequently come from, well shareholders…

What does all this mean? In light of everything going on now in the financial world, D&O is quickly becoming and has been since the days of Enron and Parmalat, an invaluable Insurance coverage. And now, as companies begin to suffer, these claims in upcoming years are inevitable. For recent graduates however, it may be a golden opportunity to join one of the most consistently secure (and profitable) industries out there!

Alive since the days when men would essentially bet if ships would make their journeys home or not, Insurance has been a primary risk hedging tool since the 1600s! If it was good enough for James the First, why not you!

European Market takes over Finance blog! BOOYA

2008-09-23T12:51:00.000-07:00

Hello New Readers!
I’m Lydia, formerly of the Ventures Abroad blog and now of Finance central! I’m going to start by laying a few ground rules for this new chapter of the Finance Blog at Experience.com.
Actually, there is only one rule: ASK ME QUESTIONS!!!! If you guys don’t ask me questions, I will inevitably ramble on for WEEKS about my specific field: Financial Lines Insurance. You will be bored- and I will get fired. So, ASK ME QUESTIONS!

That being said, for those who didn’t follow my Ventures Abroad blog, I work in the Financial Lines Department of a major Multinational Insurance company. I also happen to work in their Milan, Italy office where I wound up after 2 years in Manhattan. So, we can talk about that.

Additionally, unlike most of you who are probably reading this blog, I did NOT major in business. I didn’t major in Finance, or Economics, or Marketing nor did I study in one of the many fantastic Risk Management programs that there are around US Universities. No, silly me, I majored in History and Italian Literature and Language- and despite the fact that this didn’t necessarily put me on the fast track to Wall Street- I wound up there within weeks of my college graduation.

This brings me to my first point: YOU ARE NOT YOUR MAJOR. Especially in this tumulus job market, a recent grad may be asking themselves “How can I turn an English Lit degree into a fruitful job?” The answer is: Don’t think of your degree literally, but rather think of the skills you can offer. For instance, an English major knows how to write exceptionally well (not to say that business majors don’t, but I have seen some atrocities coming out of the industry). Communications majors understand- well, communications- which to a corporation is invaluable.

So lets get a dialogue flowing, because in the absence of questions- my next blog is going to be about D&O insurance in the 21st century…

Check out 1982

2008-08-26T20:57:00.000-07:00

OK for all of you caught in the slow economy, there were some worse times in the 70's and early eighties. Imagine unemployment of 11% and interest rates of 21%. That makes what we are in right now a bit pale in comparison. You can imagine the way people must have felt that were looking for work then or trying to get a mortgage. What is hard is to think that it will turn around when you are in the depths of it. So my advice is if you are employed maybe wait out the career changes for later and if you are looking for work never give up, since the turnaround will be one company at a time and maybe the one you trying for will be the one hiring. I also find it is good to talk to as many associates as possible so you can understand that slow times are not directed at you but more endemic. You may also find just the right call lands you the right connection. I often call my alumni and ask if they know of anyone that maybe be hiring and approach the alum by asking their opinion on where to look for work. Chances are they do not have jobs to give you but may know of some other companies to try.

Do we have the right education choices available?

2008-08-17T12:00:00.000-07:00

I was just reading Evan’s blog on Education in this country. What a great piece and it got me to thinking that our personal ROI is not only our own responsibility through the choices we make and investments in our selves, but it also a function of what options are available to us. Certainly if you read through some of the ideas that he puts or references he makes, it would be a good idea for us to support some of the initiatives that are needed to promote a strong education in this country.

When deciding how to invest my money in myself on education or self improvement I make choices based on cost and availability of programs. Should I take a $75k MBA; an online PhD; go to trade school etcetera. If I choose the one that I think is the best then I might have to reconsider if there are no grants available or if I can not work at the same time. If you think of the even bigger picture then I should also be aware of what career paths are most in demand. To this point the government should make it more clear what skills are needed in this country so that the global skill set helps the economy.

I think the most input I got before going to school was that you should have a university degree and why not get one that has some jobs when you get out. I never recall looking at long term projections of how those four years would push me into a highly marketable job skill area. So hopefully with a new government in place and people like Even and others being politically active, maybe we can push the boards of education to be more communicative with the fresh crop of teenagers that about to enter into colleges and universities.

Development starts by the time you are about 15 and lasts a lifetime; so let’s see if collectively we can push our government to have a more cohesive plan for education that is personal and effective. Just think of the money that we spend on the Iraq invasion every month for no long term ROI... now if we had part of that invested in education!!!

Interested in Finance? Learn more about this popular industry at Experience.com

Life Coach?

2008-08-17T10:20:00.000-07:00

Last week I was talking to a long time friend of mine who said he was discussing how to deal with the downturn in his consulting business over the summer. A few reactions occurred to me when I heard that; (1) if there is a downturn then how can you afford an outside consultant to help you; (2) why can’t you just figure out what is wrong about your business on your own.

After my initial reaction I started to think about what he was really getting from that coach and I remember a few years ago that ‘his team’ had sent me a survey asking for my opinion on that person and to answer some specific questions.

So after some reflection I realized that there was probably a very useful need for a coach or at least to be introspective about what I was doing right or wrong with my day and career. A quick check of the back account revealed that hiring someone at $75 plus per hour was out of the question. Now to plan ‘B’, why not try to be somewhat objective about my strengths and foibles and then make a plan all on my own to improve in a few areas at a time.

I found first that a life coach deals with a broad base of inspiration from sociology, psychology, career counseling, and mentoring. Wow, that should unearth some things about me if I really spend the time to look at my life through those different lenses. So I have started to do that and although I am not finished yet realize that I need to listen better to close friends and associates that may have good advice in the form of being a mentor; try to set some goals in areas that I put off; and maybe even try to do some behavior modification. I guess for now the most important thing I see is to set and reach goals and in doing that it will make me change for the better….and save $75/hour.

Is it the economy?

2008-07-31T02:30:00.001-07:00

Arrgh. Here we are again in another recession...victims of bad policies and greed. So is it all that bad if all the readers of this blog have jobs? Maybe it is a good buying opportunity...

Anyway, I am one of those unfortunate statistics and find myself looking for work after a private equity funding source crumbled under the weight of IndyMac's collapse and the general problems in the banking industry. So now, some days I wake up ready to pursue the world of job hunting and other days I am discourage by the hole that is called online application submission.

But wait! Didn't I just talk to some guy that was all cheery about having hospitals competing for him as he got near to completing his nursing degree. Not that I would be such a great nurse (probably spend too much time at the nursing station chatting!) but it made me think about why the same types of jobs come up as "in demand" and how I manage to take some other route. Back to my point...is it the economy?

I venture to say that my personal recession is probably due to ignoring the wisdom of the pundits and even friends in the know and doing what I love the money will follow. OK, so lesson #1: listen to the gurus if you want to be employable and go into long term or medium size rising businesses.

You even need to keep an eye on finding some other source of income all throughout your career. The reason I say that is because I understand most of the jobs are created by small business...so that must mean that big employers are not the real drivers. Enjoy the security of a permanent job and the benefits packages but be ready in case that goes away some time. You may need to rely on your own ability to create work at some point in your career.

Read this CNN article which conducted a study with ADP the big payroll company. And, by the way enjoy the extra cash from a side job consulting or whatever but put it away in savings! Good luck to you all during this recession.

Small Start Ups Need Funding

2008-07-07T10:27:00.000-07:00

It has been an interesting time begin involved with many micro start ups in the capacity of senior financial officer. I can never get over the unwavering confidence of the perceived success of the entrepreneur's product.

When I asked a founder one day what he thought made someone a successful entrepreneur he stated simply that it is the belief that the product will work, be accepted in the marketplace and somehow get funded. As for the functionality and market acceptance I am not sure I could be visionary enough to lead that every day.....what I do however is raise money for these people. And, when it comes to micro caps the need to raise funds is often a life and death situation because they have often tapped out all the friends and family money and are fighting to survive.

So how do we get the message out? Of course the first thing in my mind is to model the business' flow of funds....how do they generate enough revenue to cover the fixed and variable costs. In this process, with the aid of a few pie charts (can't resist graphics), we work on getting a better understanding of the business.

I can say that few entrepreneurs fully understand their product mix and have really thought about the contribution margin of the products they sell. Once this is done in enough detail we know that the business is well enough understood so that when we are pitching for funds we won't get blind sided by some savvy investor asking a basic question about the business that we can not answer.

So what presentation do we use? Often a 10 slide PowerPoint, a one page summary of the business and an executive summary. Now it is off to network to find investors who will listen. That is the big challenge. There are angel investor groups, people who want to take you public into a pink or OTC stock. Now you have to learn about what their reason is to invest the money versus what your objective is for using the money. Before we get into that in a later post consider how well you could explain the detail of how you turn a dollar of revenue into some net income.

photo from merchantfunding.org

The Personal Part

2008-07-06T19:47:00.000-07:00

Each day I try to push myself away from my focus on career. Whether it is to spend an hour to play piano or guitar or to hang out with some friends doesn't matter. The reason I do this is that it is important to find a diversion that brings fresh perspective to the day.

It is too easy to be busy all day long; work; commute; eat; chores etc...but often the things that mark time best of all in the long run are the extra curricular activities. I can remember work in general as blocks of life, but the real differentiators have been the fun stuff like playing in a band; putting a 110% effort to help do something for a friend that made a difference; going on an unplanned trip etcetera.

I think this lesson should be applied to the career as well. Namely spend an hour a day to do something that gets you ahead instead of being just busy. I can always respond to emails; tweak an analysis a bit more; have another meeting but not really get ahead. Now I try to spend some time networking with people that is outside of my direct needs; keeping old contacts current; reading articles or books that change the way I think or work. I make people a priority as well as making sure I complete requests that are made of me (usually :).

Using this strategy has given me an edge by being ready for new tasks and more importantly I am mentally more confidant to take on new tasks. Delegating might be necessary to be ale to get a block of time opened up or maybe even it is required a bit of time in the evening. Whatever it takes, give it a shot and see if at the end of a month you really did force yourself to do something new and unique that will stand the test of time.

Cash Flow and the Small Business

2008-06-20T12:20:00.000-07:00

After sitting through many lectures on finance, discounted cash flows, etc etc, it always seemed that the income statement and balance sheet were the focus of analysis and value creation.

Now, after traveling the country as a business consultant, and preparing many presentations for investors, I have a better respect for the statement of cash flow and cash flow forecasting. Part of the shift in focus is from the school's need to use static analysis of financials versus the reality of running a business day to day.

Since I am now in the operations side of business, I find that my skills in preparing pro forma statements of cash flow and cash flow forecasting is very important...the key to a company's survival. So how does this translate into your personal ROI you might ask? Aha, the key is in knowing once you enter the business world that the real engine of business is cash and the ability to generate it will make your finance career more bullet proof.

So if you can think along the lines of generating free cash flow for where you work then you are starting to get the focus of a finance person. And...if you can be the steward of creating free cash flow then you are really the master of creating shareholder value! Keep these shareholders happy and you will be successful. The prez will take you to lunch and life is good.

Career Mentors

2008-06-17T15:48:00.000-07:00

It is almost summer and I sit reflecting on my career...albeit by the pool. The reason for the introspection was that I had just interviewed a candidate for a job in finance and when asked why he might choose a path with my company he said he had a few choices but no mentor to help him decide. I could totally relate to that since I have fortunately have had a mentor from time to time.

To me a mentor is someone who takes more interest in the outcome of your situation than you do and that they have the wisdom to guide you without being opinionated. These people are good listeners and have often been exposed to a lot of outcomes over the years...the kind of person who can help you maximize your personal ROI.

Let me share an example of some of the wisdom that has been imparted to me during the years.

(1) When you work for someone it is a two way street; make sure that you learn a skill that will be good for your resume every year.

(2) When you are trying to decide some big career decision think of how you will reflect on that choice when you are 70 years old and looking back on life.

(3) Read a lot of job descriptions to see what skills you will need in a certain career to be employable; my favorite site for this is www.indeed.com.

(4) To be a leader you don't have to be impressive but instead reliable, competent, and original.

(5) Sometimes you have to move to where the hub of the type of job is; NYC or Raleigh-Durham for finance; California for entrepreneurs; Houston for oil and gas etcetera.

There is no substitute for finding someone who is truly a deep thinker and is not just a follower. Don't get me wrong, you can do well following a path but for a mentor it is good to find someone who knows what lies off the beaten path so they can suggest why several choices can take you a certain way. In my experience these have been people who have had to make some sacrifice to get where they are .

The Semester in Review by Books

2008-05-09T16:11:00.000-07:00

We're down to the last week. I know all of you have different schedules with your jobs and schools, but I assume you're all near the end of this semester as well. For me, this is literally the last week: Commencement ceremonies begin on Thursday.

We have covered a lot this semester. I'm not financial expert, but we've covered my focus of public finance, and even explored some more traditional financial industry questions. And don't forget those nice videos.

Now, as we wrap up the semester and the year, I wanted to finish with a review of the semester...by books. These are some great educational books on a variety of topics. Again, I'm not the expert--there are tons of these books out there and I haven't read all of them to tell you which is best (check out reviews on places like amazon.com).

These are the books I've read, and I'll tell you the good and the bad. I'm sure most books of this nature are pretty well-written, so take this review as both a suggestion of the specific books and a topic list. You can find my entire collection in my amazon.com listmania!.

The most fundamental book in my collection is William Strunk Jr. and E.B. White's The Elements of Style. It covers all the important elements of writing, including usage rules (adding "'s", commas, colons, and elusive semi-colon), composition, misused words, and clever and concise style tips. Elements of Style is pocket size--take it with you anywhere and learn in just a few pages how to be a better writer. I'll be saying this many times: the advice in this book is applicable in every position at every company. Learn how to write and you'll be indispensable.

Once you learn how to write, learn how to say what you put on paper. The Elements of Great Public Speaking is a great start to using your voice confidently and effectively. Like the Elements of Style, this guide is pocket sized, easy to read, and a great primer for learning to be a powerful communicator. And like the tips for writing, some of the ideas for public speaking are both simple and yet, easily missed. The book covers the important business basics: presentations, introductions, and meetings. It also goes beyond and hits the public speaking events you might not immediately associate with your job or your career. But you never know who's listening, and opportunities such as toasts, speeches, presenting and receiving awards, and master of ceremony presentations, could end up being just as important. Again, this is important for any job. Anyone can deliver a fact-based presentation with authority after hours of practice. Read this book and learn to be "calm, confident, and compelling," as the cover promises.

On the subject of presentations, one of my favorite books of all time, Beyond Bullet Points, dives into the important idea of making your presentation interesting. It seems so simple, but we've all been there: the presentation comes on, the background is some silly business looking graphics with a globe or something, the title glides in, and the bullet points appear. At this point, I'm already dreading the rest. But then, the presenter starts in. First, he or she looks at the screen, then starts to read the bullet points out loud. For me, this type of presentation loses credibility, and I doubt the importance of the material. There is a better way: avoid the bullet points.

This book is a great issue-specific guide. It takes you through the entire process of designing an effective slide show, including brainstorming, creating the ideas, writing the story, putting PowerPoint to work for you, and delivering a fantastic and engaging presentation. It even includes design tips for slides that are great for other reports and documents. Follow this guide and you'll make a great presentation that keeps the audience engaged and focused. You'll be convincing and, maybe even more importantly, unique. Try this technique in a board meeting and I'm willing to bet you'll be seeing that promotion a little bit sooner. Try this technique at a conference with a bunch of presentations and watch the audience. When people are reading off the slides, people drift off. They might be listening and taking notes, as they are expected to do, but they're not hooked. Then, watch as you take them through the journey of your presentation, with minimal and simple yet effective graphics and text on screen to emphasis your important points. It's an incredible difference.

Also, for an example of a great presenter using many of the principles of this book, check out Steve Jobs. When he introduces new products for Apple Computers, he doesn't just throw up a list of bullet points. He walks us through the history, the development, and the new product. It's a wonderful experience. Check out this video below where he reveals the iPod Nano (the suspense is great):

UPDATE: Microsoft Considers Hostile Takeover

2008-05-02T08:41:00.000-07:00

The WSJ, the NYT, and others report today that Microsoft is considering a hostile takeover of Yahoo! This rumor comes after Microsoft's initial offer to buy Yahoo! outright was rejected at the offered price. Since that time, Yahoo! and Google have pursued a potential cooperative advertising strategy.

As I mentioned before, the news always covers the implications of an acquisition or a hostile takeover to the board, or maybe the shareholders and C-level employees. They don't pay as much attention to the everyday employees. In this case, its everyone including senior programmers, cafeteria workers, and maintenance crews. And this information should be important to Microsoft management--if Yahoo! employees leave out of frustration, Microsoft's value of Yahoo! is decreased. In addition, the WSJ mentions a policy Yahoo! has in place as an "anti-takeover" measure. Specifically, "Yahoo's poison-pill antitakeover defenses essentially require any would-be hostile acquirer to remove its board."

Microsoft claims to be able to enter the online advertising business without Yahoo! in their goal to compete effectively with Google, but this hostile takeover rumor hurts their credibility. Stay tuned to this story--either way it will drag out for a while.

What if it was you?

2008-04-23T18:54:00.000-07:00

It's not hot-off-the-press news, but the Yahoo! dealings have been making the papers on a daily basis. The basic story: first, Microsoft made an unsolicited bid for the internet staple, which Yahoo! mostly rejected. From that point until now, Yahoo! has been examining other options, including using Google advertising. Check out some of the stories from the Wall Street Journal

On a nice side note: if you're interested in business, finance, or just the world, you should read the Wall Street Journal. It has the best business coverage and fair coverage of the mainstream news, except for the right-leaning editorial section. They offer student discounts and I honestly enjoy reading this paper. I'm not on their payroll; this is a personal recommendation. I originally subscribed because the paper was required reading for a class. Now, I extended my amazing discount for the rest of the calendar year. Most important tip: Read the two columns on the left side of the front page. These are the most informative and if you have no time for the entire paper everyday, read these columns.

WSJ (must be subscribed) Yahoo Studies Alternatives to Microsoft
Some antitrust implications: USA Today
Keep up with the story: Google News

My WSJ advice aside, the rest of today's edition is really more of a question. Namely, what would you do if your company was heading towards a likely merger or acquisition? Would it be different if you worked for a giant media/online giant like Yahoo!? Working for a small company seems to have the risk of changing corporate structure inherent in the job, but we all saw Yahoo! an an internet tradition.

I've heard some stories about Yahoo! employees leaving, but I'm not sure if that would be my initial response. I guess it's one of those things that you don't know until it happens to you. Share any of your thoughts in the comments below.

80,000

2008-04-11T09:48:00.000-07:00

A few weeks ago I wrote about the economic stimulus package designed by Congress to slow this recession. Well, according to the New York Times, things are still heading downhill. The paper reported a loss of 80,000 jobs in the month of March alone. It doesn't seem like we can mince words anymore; if this isn't a recession, then what is?

Back on the idea of an economic stimulus, in response to the 80,000 figure, Speaker of the House Nancy Pelosi suggested a second economic stimulus package. I just wonder where the first one went?

People are desperately looking for new jobs and, like many of you, I'm looking for my first one. My search is still moving along at the same constant and slow pace. I had a phone interview with one campaign organization the other day, but other than that, I'm still sending out applications and waiting to hear back. As I've mentioned before, I also have my networking contacts helping out. Every time I submit an application I check with a few people to see who they know, always looking for inside tips and contacts.

For all of us looking for a job, I'm continuing a highlight of the etiquette videos online. Today, with this focus on getting a job, we have a nice focus on the little things that matter; the thank you.

In this time of job loss and an economic downturn, the little things are maybe even more important than normal. If you want the coveted job, well you better make yourself standout in every single way possible. And very important: did you hear the tip on time? Send your thank you notes within 48 hours. That's the details of the details.

I've already admitted I'm not the expert, but if you have questions about anything in the finance world, from specific jobs, certain industries, government intervention, or general career questions, please post them below as a comment. I'll take a look and give me thoughts and pass your question onto a real expert for a more thorough response.