The 4-Hour Workweek

I finally got around to reading The 4-Hour Workweek: Escape 9-5, Live Anywhere, and Join the New Rich, by Timothy Ferriss. I have to say it was an interesting read. The basic premise of the book was that there is a class of "new rich" who can do what millionaires do without having a million dollars. They do this by automating their work so that they don't need to be present in order for their businesses to run, and by taking advantages of currency differences.

Ferriss seems to strongly advocate owning your own business, in particular some kind of an internet-based business. In my opinion, this isn't practical for most people. If you're considering doing this, the book might be even more valuable to you.

I did think he had a few interesting ideas though. For one, he has a pretty good chapter called "E is for Elimination" where he focused on streamlining your work life and time managment. None of it is really new stuff (the 80/20 principle etc...), but it will definitely make you think twice about the things you spend your time on, which is something we all need to do from time to time.

He also suggests going on a "one week media fast" where you don't read any newspapers, magazines, websites, or watch any news shows for a week. I think this has both its pros and cons. The main pro is that I think we all waste too much time reading news that we can't use and can spend the time doing more productive things. The cons are that for some jobs, especially more creative, higher-level business jobs, it's important to stay current on the happenings in your field and sometimes the media is the best source of information.

The chapter that intrigued me the most, and the one that really pushed me towards recommending this book, is "Outsourcing Life." In this he suggests getting a "remote personal assistant" from a company in India or elsewhere. He mentions Brickwork and Your Man In India as two potential companies to use. He says you can get a well qualified assistant to do some of your work for you, freeing up your time to do other things. Best of all- they can do it fairly inexpensively and they can work while you sleep. I actually tried this out with pretty good success, and I will hopefully write a post about that sometime in the future.

For now though, I'd say if you're the kind of person who's always looking to improve the way you work, and can overlook the rather drastic premise of this book, I think this is definitely worth spending some of your time (and a little of your money) on.

Final thought- can you achieve the four hour workweek by reading this book? I'd say the odds are very slim. I do think it might help you cut a few hours out of your work week though.

Job Hunter Tip

Let me make this very clear. You can never be too well prepared for an interview. You can never can know too much about the company and the position you're applying for. I am famous for overpreparing for interviews. Read every keyword in the job description and know what it means. The Internet is your friend. I'm going to assume you know how to do the basics, which include at the very least:


-look up the company on google

-find out what it sells

-read the 10-Ks and 10Qs if it is a public company

-understand how it makes money/where most of its profit comes from

-visit the company's websites and read as many press releases as you can

-look up the job function on google

-google every keyword in the job description


You can take this to the next level by doing things like:

-Looking up SEC filings on Edgar.

-looking up recent sell-side analyst reports on the company if it is a public company. I can't tell you how great these reports are as a resource. Most management teams read these things, and the reports usually address some of the most important issues facing that company.

-doing all of the above for every one of the company's competitors

-purchasing the company's product or service



But if you really want to go the extra distance, it will sometimes cost you money.

For example, let's say you get an interview at a well-known financial firm for a job that involves, among other things, working on fairness opinions. "What the heck is a fairness opinion?" you might ask. Well, the definition of fairness opinion is easy enough to find.

But what if you could find a fairness opinion written by the company you're looking to join? Wouldn't that give you a leg up?

That's where a company like The Consus Group comes in. Browsing through the site, you can find a fairness opinion written by a well-known financial firm (in this case, Sandler O'Neill Partners). It will cost you $42, but you have to ask yourself... is it worth it if it means coming off as more knowledgeable in an interview? If you have any shot at getting the job, the answer is most likely yes. There are a number of sites like this. I guess the moral of the story is don't be afraid to pay a little if it means giving you an advantage in a job interview.

A Look at Salary Data (from an MBA perspective)

The issue of pay is an extremely sensitive one. It's personal, it's private, and it's very important if you want to support yourself. You should periodically evaluate your salary and make sure you're being at least fairly compensated (or you can be like a friend of mine, whose goal is to be overcompensated).

One good tool I've found for current, prospective, and former MBA students to get a feel for what MBA holders (An aside: I don't like calling people "MBAs" because the term suggests a nonexistent homogeneity.) are being paid is a survey put out by the Graduate Management Admissions Council (GMAC).

Before I continue describing the survey and my take on the recent results, let me first issue a disclaimer. The GMAC is a not-for -profit "educational association" that administers the GMAT. Seeing as the GMAT is a computer-administered test that costs $250 a person to take I'm pretty sure that despite the fact that it's not the organization's goal, it manages to turn a profit anyway.

Most surveys are conducted by people with an agenda or some kind or another. In fact, any time I see a number or a presentation put in front of me, my first question is "Who put this together, and what is their agenda?" In this case, I assume the GMAC's agenda is to get people interested in going to business school to get an MBA. This will make the schools who run the GMAC happy, and it will bring the GMAC more of those hefty GMAT test-taking fees. I like to think of GMAC as basically a marketing tool to get people to want to go to business school. In fact, I think all of the MBA surveys you see (US News and World Report etc...) are mostly marketing tools used to get people attracted to MBA programs, and the data therein should be considered, but considered suspiciously.



That said, I still think this survey is useful. In fact, I am one of the survey participants myself, and have been filling out the survey every year since I got my own MBA. The results of the survey make sense to me, and I use this as a general data point when evaluating my own salary.



The entire survey is available here: April 2007 MBA Alumni Perspectives Survey (gmac.org) and I recommend taking a look at it.



The questions on the survey run the gamut from job functions to job satisfaction, to whether or not you are satisfied with your MBA degree, but I immediately zeroed in on two questions: Annual Base Salary and Weekly Work Hours. I find the other questions interesting, but I care the most about this hard data.



Flipping to page 38 of the survey, based on 2,577 respondents who graduated between 2000 and 2006, the mean annual average salary was $94,825, with a median of $90,000 and a 25th percentile of $70,000. This is a good general starting point, but these broad numbers are skewed by greater than average earnings in some industries such as consulting, and below average earnings in things like nonprofits. It's hard to place my salary (which is below the mean) within this group.



On the next page, salaries are broken out according to job function. Here we can see median earnings broken out by industry group. I'll show a few selected groups below:

• Consulting: $100,000



• Finance/Accounting (me): $93,000



• Manufacturing: $90,000



• Nonprofit/Government: $67,800

And broken out by job function:

• Consulting: $100,300



• Finance/Accounting (me): $87,000



• General Management: $100,000



• Human Resources: $84,760



• IT/MIS: $87,000

And finally, by job level:

• Entry Level: $60,000



• Mid-Level (me): $86,000



• Senior Level: $100,500



• Executive Level: $120,000

There is also one other interesting piece of info that breaks out salaries by age. It shakes out this way:

• 27 and younger: $56,950



• 28 to 34 (me, just barely): $88,000



• 35 and older: $100,000

I just barely fall into that second group, so I'm going to unscientifically say that these numbers put people my age (28) somewhere between $70,000-$80,000 a year. My base is above $80,000.

One last piece of salary data I would have liked to have seen in there was a survey of salaries by job location. I know that people in NYC generally make higher salaries than those in Idaho, for example, but this wasn't in the report.

From the above data, this we can gather that senior level consultants make the highest base salary out of all MBA graduates. However, I happen to know a few consultants, and we need one more piece of data before we can be jealous of their cushy jobs and high salaries: hours worked.

Flipping ahead to page 33, we get to the "Weekly Work Hours" table. According to the 2,964 respondents, 4% worked fewer than 40 hours a week, 37% worked 40 to 49 hours a week, and 59% worked 50 hours or more each week. Unfortunately, I fall into that last category.

The first category of less than 40 hours a week is extremely tiny. I don't think people go to business school to work nine to five jobs. As a brief aside here, this category made me think of Timothy Ferriss and a book that I've heard a lot about lately, but have not gotten the chance to read - The 4-Hour Workweek: Escape 9-5, Live Anywhere, and Join the New Rich. I'm not going to recommend it because I haven't read it yet, but I certainly plan to.



Getting to the information I was looking for, the table on the next page shows that the 411 respondents in the consulting industry worked an average of 51.8 hours a week, whereas those who worked for the "Nonprofit/Government" sectors worked an average of 44.6 hours a week. The difference of 7.2 hours doesn't seem like much upon first glance, but think about it for a second... this is an entire day's worth of work for most people. This seven hours represents the difference between coming home in time for dinner and eating cold leftovers or fast food every night. It represents the difference between leaving your office while the sun is still shining and getting home just in time to stumble into bed. It represents the difference between a Saturday morning in the office and a Saturday morning at the beach. It represents the difference between stressful, harried days fueled by caffeine and relaxed days fueled by conversation with your coworkers and a feeling that you're doing something good for the world. I think you get the picture here.



Doing a little math on those results, dividing the median consulting salary of $100,300 by 52 weeks in a year gives you $1,928.84 a week. Further dividing that by 51.8 working hours in a week gives you a consultant's "hourly salary" of $37.24.



The same computation for "Nonprofit/Government" would start with $67,800, divided by 52 weeks, which gives you $1303.84 a week. Further dividing that by 44.6 working hours in a week gives you a "Nonprofit/Government" "hourly salary" of $29.23 an hour.



Of course, one glaring omission from the math above is that it does not factor in bonuses, which can be rather large for private sector consultants and rather small for government and nonprofit entities. In fact, the survey also goes into additional compensation and shows on page 42 that 22% of Nonprofit/Government respondents reported getting no additional salary beyond their base salaries, as compared with only 6% of consultants. So consultants are rewarded even more handsomely than $37.24 an hour.

Even if you don't have an MBA, it's a good idea to periodically review salaries for your job function to be sure you're getting everything you should be. External sources for salary data are a huge negotiating point when you're talking with your boss/hr representative about a raise or starting salary. Salary.com is a great starting point for most areas, and I'm sure there are more specialized surveys out there on the internet if you dig around and look for them.

Getting Motivated

I occasionally read http://www.codinghorror.com/ which is a great blog written by programmer Jeff Atwood. I'm not a programmer, but I find a lot of interesting stuff in Jeff's posts. I felt like I had to share this one with you today. Sorry for the foul language, but sometimes this stuff crops up in life.

It is on the subject of motivation. Sometimes I feel a little guilty for neglecting this blog. However, it is usually because im off in the world of finance getting things done, which this post helps me feel a little better about.

I think we've all faced bouts of motivation and laziness in our lifetimes. There are a number of ways to get over them, but Jeff's post talks about probably the most basic one.

I'm going to file this under "increase your income," because if you follow the advice in there, you probably will increase your income in some way.

To Get Rich... Do Nothing?

I came across this article on Yahoo finance today, courtesy of TheStreet.com. The link was yet another list of things to do to make yourself rich. The link I clicked on was entitled "Twelve Ways to Motivate Yourself For Wealth," which is a headline tailor made for today's personal finance-minded Internet audience.

As I went through the list, I found myself thinking how if a person wanted to make a lot of money and did a few Internet searches for how to do so, he or she would find probably 99% crap that will waste his or her time, and 1% interesting information.

The law of diminishing returns kicks in over time as you go through these lists and do all of these largely administrative things. Yes, set up your 401K right. Allthough, I'm sorry to say it's not going to make you rich if you only make $30k a year for the rest of your life. And spending an hour debating whether you should have 5% or 10% international stocks in your portfolio isn't going to make you rich either.

I think about a wealthy investment banker I know, and I try to imagine him keeping a daily financial journal, as thestreet.com's #5 way to stay financially motivated suggests. If this guy wasted his time keeping a journal, he wouldn't be out there studying new financial instruments, accounting pronouncements and marketplace trends that create opportunities for him to sell his services to deep-pocketed corporate clients. The scant free time he has is too precious to waste on a financial journal or playing credit card cash advance arbitrage.

Anyway, what I'm trying to say is to look at your job, your business, or whatever your income sources may be. Those are the things that are going to make you rich. Spend an hour getting to know your company's business better. Look at how the financials work, even if you aren't involved in the finance side of the business. Look at how you can do things better. Make yourself more valuable to your employer (or to yourself if you're self-employed). I admit this is easier said than done, but the amount of time poor and middle class people spend reading about these fluffy "wealth" topics is a huge waste for them.

I am guilty of sometimes passing these tips along, but I hope you know not to focus on these things too much while neglecting the most important part of your financial future, which is your income or your business.

How I Got Through Graduate School Debt-Free

I graduated from college with a BS in Business at the tender age of 20 years old. I'd taken advanced courses in highschool and that allowed me to lop a year off of the end of my undergrad experience. It wasn't an easy decision- I gave up on another year of fun living away from home with a bunch of friends (including my future wife), but I had a longer-term view in mind.

I remember my first year on my first job. It was a pretty big adjustment, and I was the youngest person in the office. I wasn't even old enough to legally drink at my first company Christmas party. However, I was also one of the most interested in what I did, interested in improving how I did my work, and my salary went from $33,000 to $50,000 in about a year and a half.

Did I buy a flashy car? Did I buy fancy clothes and go out drinking every night? No. I socked most of this money away. I had my fun every now and then, but I ate peanut butter and jelly sandwiches almost every day.

I really wanted to do more than my entry level job, so as soon as I got settled, I started planning for my MBA. I got as much information as I could on starting salaries, tuition and board costs, GMAT scores needed, attributes the admissions folks looked for, school rankings etc...

My commute home from work was about an hour, and I remember entire train rides spent looking at my savings balances, forecasting when I would have enough cash to be able to support myself through school, and determining how much I would need to save out of each paycheck to make it happen. I filled legal pads with plans and ideas.

I got really lucky in a few ways. My job was pretty well suited to my abilities, and it was something I was interested in, so I stood out as one of the better performers. I was able to live in my parents house, paying low rent. Most of my friends were still away in college for that first year, so I didn't have as many offers to go away for the weekend, or do other things like that. In short, I was able to focus, probably more than I ever have in my life.

My savings grew little by little. I discovered high-yielding online banks. I remember my first CD had a 7% yield. I opened a small "play money" Ameritrade account (it was Datek back then). I learned all I could about business and finance. I read books, I got to work early, I volunteered to do extra projects, and before I knew it, I had a pretty healthy amount in my savings account.

Then the company I worked for folded. It was a very difficult time for me in many respects but after some time, I regained my focus and I was still ahead of the game. I used my extra free time to study for the GMAT. I put a sign above my desk that said "1290690 or burst." I scored exactly 1290 690 on the exam. I wrote my admissions essays, I got recommendations from former professors and coworkers, and I sent in my applications. I took a paycut, but found a new job where I worked for six months, at the end of which I found out I was accepted into graduate school. I had about $40,000 in my bank account at that point.

I went to a state school, I worked as a graduate assistant to earn some extra cash, as well as a reduced tuition rate. I lived in a modest apartment. I brought peanut butter and jelly sandwiches for lunch. I worked a paid internship during the summer between my first and second years of school. When I graduated, my savings account had just about $1,000 left in it. However, I had an MBA, and the starting salary at my next job was much higher than it was at my previous job. I think I came out ahead.

That was how I did it.

It seems like many people have resigned themselves to the mountains of debt they think they need to incur to go to graduate school. If you plan ahead and discipline yourself to do it, you can save enough money to either avoid debt alltogether, or at least keep it to a minimum.

I was inspired to write this after reading a Think Like the Rich post about about another strategy for avoiding debt in graduate school. A graduate degree is starting to seem like a prerequisite for getting some of the more interesting, higher-paying jobs out there right now. There are many approaches to getting one without going into a ton of debt.

Attention Spreadsheet Users

If you're like me, your life revolves around 5-10 excel spreadsheets a day. If you're not like me... consider yourself lucky.

If you're learning excel, or if you already know how to use it and want to know more (looking up a specific formula or a way to do something, for example), I highly recommend you head over to John Walkenbach's site. The Spreadsheet Page. He's the closest thing to an Excel guru that I know about, and there are some great tips on his site.

Some of the excel tasks I do at work everyday have grown to a point where I need to automate them, and to do so, I am writing a few macros with the help of one of my favorite Excel books:Microsoft® Excel 2000 Power Programming with VBA by Mr. Walkenbach himself.

Some of these macros go beyond what the macro recorder can do in Excel, and most of the stuff the macro recorder creates ends up being highly inefficient, so if you have the time, the need, and the inclination, you might want to brush up on your VBA (Visual Basic for Applications) programming skills.

A word to the wise- if you expect to be doing VBA programming after an hour's reading, you might want to temper your expectations. If you don't have any programming experience, it's quite a bit to wrap your head around. I'm by no means an expert, but I find that when I'm really motivated, I tend to pick things up pretty quickly. If I get this automation work done, I can save myself about a half hour a week that I would normally spend generating these reports, which would be a huge benefit over time. I can spend this time working on more visible projects that will hopefully bring me closer to a promotion and a pay raise.

Perhaps even more importantly, I'll save my company that time and I'll leave these timesavers behind me so that the person who takes over my job can build on them. This might make my company more productive, and make the American economy more efficient. In a tiny way, I am contributing to the future of my country. If you've seen the recent slate of presidential hopefuls, you'll know that I'm going to be giving help where help is needed!

For more on the topic of non-programmers like you and me getting into the software business, see Steven Smith's excellent blog post "When Non-Programmers Write Software."

Earn Extra Money by Participating In Focus Groups

I've heard of a lot of things people do for side income over the years, but I think one of the most efficient ones I've found is volunteering for the occasional focus group.

Some years back I was introduced to a guy who makes his living getting people together to fill focus groups for companies. I gave him my information (age, marital status, current job title etc...) and every once in a while when something opens up that I qualify for, he gives me a call to do a quick screening interview. If I qualify for the group, I'll sign up to go to someplace in manhattan, usually the headquarters of an advertising agency, and give my opinion on a particular product or service.

The average focus group lasts about an hour and a half, and the average pay is about $100-150. Every once in a while it is more than that, particularly when they are looking for people who fly frequently for business, or some other kinds of executives. Another bonus is that they usually provide some food- sandwiches, cookies and things like that.

I see this as a very efficient use of my time if I can do it after work. I can use it as a place to get dinner, and I earn about $100 an hour. Of course, I can't put in many hours doing this because I don't get that many calls and because they discourage you from signing up for focus groups too much.

The typical focus group is probably what you would expect. You sit in a room with a moderator and a group of people roughly your age. There is a big mirror or window, behind which stands one or two people and a video camera. The moderator asks a bunch of questions and you react to things, usually advertisements or new product concepts.

I won't talk about any focus groups in specific because they make you sign a waiver agreeing not to discuss what went on in the group, but in general the groups I have been to have been very interesting. I've seen new products before they were introduced, tasted a few new drinks before they were introduced, and given some feedback on some advertising campaigns that I have never seen since.

One word of advice I have is to be friendly with the person who fills the groups and above all, show them that you are reliable. The person filling the groups needs to know that I will be there when I say I will be there, and I have never missed a group or showed up late.

Another piece of advice is that you shouldn't lie. If it's a focus group for people in the market to buy an SLR digital camera and you don't know an SLR from a hole in the ground, you are going to be wasting everyone's time by going to the group and even the best BSer probably won't be able to last an hour without exposing themselves as someone who is only there for the money and the free food.

The best part of focus groups is that they are stress-free money. You have to give nothing but your opinion, so you can go in there relaxed and come out happy, carrying an envelope full of cash, which they always give you in big bills in an envelope on your way out.

Anyone have some other ideas for some high-paying side jobs?

Should You Be Getting Overtime

Bankrate.com has a fairly interesting piece entitled "Should You Be Getting Overtime."

I haven't worked a job with an hourly salary for a few years now, and even though I know I'm not entitled to get overtime, I was very interested to read this opening paragraph "If you've been putting in extra hours, you might be entitled to extra pay. Whether you're hourly or salaried, blue-collar or white-collar, if you've been giving your boss more than 40 hours per week, you're due time-and-a-half for each hour of overtime, unless you fit into one of the exceptions."

For a brief moment, I pictured myself getting 10-20 hours of overtime pay every week.

Unfortunately, though, the article went on to explain that there are certain exemptions, and I fall into the "exempted" category, meaning that I am not entitled to overtime.

According to the article, the three criteria that make you exempt from overtime pay are that:

1) You receive flat salary, rather than hourly wage.

2) You earn the same amount each pay period (regardless of how many days or hours you've worked).

3) Your weekly salary is equal to or greater than $455. (The minimum may be higher in some states.)

However, if you don't fall into one of the categories above and your boss is not paying you overtime, he may be doing something illegal. Check into your local labor laws, and you might have some extra money coming your way.

Continue Your Education For Free

As a mentor and professor once said to me- you should never stop learning. In particular, the subject he taught was business, so he recommended getting a subscription to the Wall St. Journal, or some other business magazine so that, once you finished college, you could continue reading "case studies" about how certain businesses approached particular problems or opportunities. Things are constantly on the move in the business world, and the concepts you learn about might not change, but they are applied in new and different ways every day.

I took his advice to heart, and being a naturally curious person by nature anyway, I've tried to keep up with things happening in the world around me, looking for opportunities of my own.

The Wall Street Journal will cost you about $150 for an annual subscription, which includes paper delivery every day (except Sunday), as well as online access.

However, if you don't want to subscribe to the journal, you can always continue your education for free.

Obviously, the first place that comes to mind is the Internet. Many newspapers have websites that let you read some stories for free, and many blogs (such as the one you are currently reading) are worth their weight in gold.

Another place you can hit up is your local public library, where you can often get many magazines and periodicals for free. When I first got out of college, I would try to stop by the library once a week to read some of the more expensive magazines such as the Harvard Business Review, The Journal of Finance (whose forthcoming articles you can read here), Fortune, Forbes, etc... You don't have to read the whole magazine, just pick a few stories that interest you.

My library also offers an extensive online catalogue. Whenever I feel like I need to learn a new skill, or brush up on something, I just head to the database, where I can find pretty much any book that isn't brand new, as well as some of the more recently published titles. If my local branch doesn't have the book in stock, I can simply request it online, and in a week or so, it will be waiting for me to pick up. This is a completely free service that my tax dollars pay for, so I am more than happy to take advantage of it. If I find a book I will want to refer to time and time again, I will usually head over to my favorite category at Amazon.com and pick it up there.

Another new learning tool I've been getting into more lately is the iPod I got for Christmas. Granted, the iPod isn't free, but you can use it to download a ton of free lectures and other course material from some different universities. For example, UC-Berkeley makes quite a bit of lectures, syllabuses, homework assignments etc... available through iTunes. A quick link over to the site shows that they offer info on Arts and Humanities, Computer Science, Chemistry, Biological Sciences, Engineering, Social Sciences, Natural Resources, Physical Sciences, and Information Science. Stanford also offers some course material through iTunes. The best part about them is that they're all free.

A Wall Street Journal article today "Yale on $0 a day" also mentions that Yale University "has announced it will produce digital videos of undergraduate lecture classes and make them available free to the public. This academic year, it is taping seven classes -- from Introduction to the Old Testament to Fundamentals of Physics -- to be posted online this fall." If this catches on, it might give people an even better reason to get their hands on a video iPod.

A final thought on the iPod education... in case you missed the recent coverage, check out this ESPN article on how baseball players are using iPods to study film. I didn't have one for a long time, and I never knew what all of the fuss was all about (I had a generic MP3 player for a while), but the iPod has really become a cultural phenomenon. I have to admit I am a convert, and I don't give much credence to recent stories about iPod/iTunes sales slowing down. Who knows? It still might be a good time to get in on AAPL stock, depending on whether or not you think this product, and other new products from Apple are going to become "must-haves." The value investor in me balks at the 30x trailing P/E ratio and the hype around the company, but when I think about the potential role iPods could end up playing in our daily lives in the coming years, it at least makes me stop and think.

I didn't think I was going to go there with the last paragraph, but I did, so I'm going to slap the "investing in stocks" tag on this one, along with "increase your income," because I believe if you continue to learn, you will make yourself more valuable to your employer (or to another employer) and use that value to increase your income.

The Value of a Saturday at Work

Many people bristle at the thought of working on the weekends, but every now and then it might pay you to go into the office on a Saturday. I went in for 6-7 hours yesterday and I was able to get a ton of stuff accomplished.

The biggest benefit is the lack of distractions. The kind of work I do often involves long periods of concentration, working out numbers, trying different solutions, and seeing which fit the best. The chances of getting 2 straight interruption-free hours of work during the week are practically zero for me. There are always coworkers coming over to interrupt me, phone calls to be answered, "urgent" emails, or other things that throw me out of whatever it is I was working on.

Yesterday, I had absolutely none of that. I had complete control over my day, and I used the time to get through some work that was particularly frustrating to try to do during the week.

The second biggest benefit is just the amount of time it adds to your week. There are only a certain number of hours I can work in five days without feeling fatigued, burned out, or just plain sick of the place. I estimate that to be somewhere around 60 hours. After that, I am not as effective. Working on Saturday gave me a fresh day, and some more work hours that I did not have to squeeze into my five day week. Knowing how much I was getting done, realizing I could leave whenever I wanted, and not having coworkers asking me for things also made the day incredibly stress-free.

I was also amazed at how pleasant the commute was. Instead of taking the bus and the train to work, I was able to drive all the way in because there was no traffic. I found a parking space pretty easily, and I made it in to work in about half the time it usually takes me during the week.

Another big benefit is that I ran into a fairly high-ranking company executive while I was there. We had a brief chat in the elevator. A chance meeting, but if that person talks to my boss's boss, or if I am ever applying for a job change into their area, it is the kind of thing that tends to leave a good impression.

Finally, just getting all of that work out of the way is a benefit in itself. I am going to feel much better when I get into the office on Monday and I'm not immediately hit with the giant workload that I had when I left on Friday.

There are downsides too, especially if it becomes necessary or expected for you to work on Saturdays, and they start to interfere with your personal life. I didn't have anything in particular to do yesterday, so it was completely my choice to go in and work. If I was asked to go in, I'm sure I would have resented it. I feel like my weekends are mine, and I should be able to use them however I want to.

Anyway, I am not going to make this a habit, but I think a Saturday every now and then (once every few months or so) could be a great tool for getting through a pile of work, reorganizing, and refocusing.

If you've never done it before, I recommend you try working on Saturday once or twice, and pay attention to how you feel while you're doing it. If you're like me and you don't have to go in, but can do so every once in a while to catch up, it's probably a good use of your time. It will make you a more valuable worker, and over time, your salary should grow to reflect that value.

Please remember that I'm not aiming this advice at people who feel overworked and hate their jobs. If you feel like you have to work weekends just to keep up with your workload, if your boss expects you to come in over the weekend, or if you work ungodly hours during the week, I would seriously rethink your decision to remain in your current job. You might be getting well paid, but is all of that stress really worth it?

College students: get good at Excel and Powerpoint

If you're in college and looking to climb your way up the corporate ladder when you graduate, I have one small piece of advice that is yet another way to set yourself apart from the pack: learn MS Excel and PowerPoint inside-out.

When you start your first job, you're not going to be given a ton of responsibility. But, your goal should be to get noticed for how well you can do what you are asked to do. If a manger asks you to put together a spreadsheet or a presentation for them, you don't want it to take you three days and have it come out looking like a piece of junk.

It's easy not to pick these things up in college. I know presentations in school are often done in a group format, and the group will often settle on the Excel or PowerPoint expert to do up the spreadsheet and the presentation. In the short run, that's a nice way to do well on the project, but in the long run, if you are never that expert, you might go through college without learning what are without a doubt two of the biggest skills a new college grad can have.

A student with a business degree will have more opportunities in their first year to impress a boss with a well put-together presentation (deck, slideshow, or whatever else you might call it) than with their knowledge of Michael Porter's 5 Forces.

I admit this is low-level stuff, but this is a piece of advice I wish someone would have given me in college when there were so many learning resources around me.

I'm not saying you fall asleep in your competitive strategy class, but don't expect the CEO to ask your opinion on which markets to enter during your first year working at a Fortune 500 company.

Chances are if you make a name for yourself as someone good with these programs, many of the more senior workers who never learned how to use them properly will come to you to ask for your assistance. You will be seen as smart and competent, and you can get to know people you might otherwise not have come in contact with.

I'm not going to go over all of the things you need to know. You can read about those in a how-to book, or learn about them in any class worth its salt.

A few things I believe would set you apart in excel would be: using the TABLE function, using pivot tables, creating custom charts to standardize the way you show pie/line graphs (if your company does not already have a standard), learning how to get quick with keyboard shortcuts (quick tip on this: go to Wall Street Training's website and download the WST macros as well as the excel shortcuts pdf file), being able to create and format financial statements, mastering print settings (such as rows to repeat at top, set print area etc.) so your work looks good when you show it to someone, and using VLOOKUP/HLOOKUP. This is not an exhaustive list but a place for you to start.

When it comes to powerpoint, I'd say some of the key things are learning formatting, proper spacing for bullets and heights for letters (there's a lot more to this than you would think), standardizing layouts/templates, using the align functions to make sure pictures/shapes are perfectly lined up, getting colors perfect (a neat tool I like here is Color Cop which is free), pasting in tables etc. from excel, and in general just creating simple, pleasing formats. For practice, look for powerpoint presentations that may be posted on company websites and see if you can duplicate them from scratch. If you're going into finance, pay specific attention to the investor relations websites of public companies for good examples.

None of the above applies to anyone in visual/graphic arts. The kinds of presentations you'll create in these areas are likely much different from general business presentations.

If you cant figure out how to do something in MS office products, remember GOOGLE IS YOUR FRIEND. You can just google pretty much anything and find an answer very quickly. For example, google "how to shade every other row Excel 2007" and look at how many answers/tutorials you find.

If you really want to get fancy, you can also check out The Visual Display of Quantitative Information by Tufte. This is an intensive study on how human beings process data, and the best way to present it in a visual format. It is very theoretical, but I highly recommend reading the book and studying it a little because people often create ridiculous charts for no reason when something simpler and more elegant would do a better job of conveying a message. The book is not specific to Excel, but you can definitely use the info in it to help you to create better looking and more informative charts, graphs, and data tables in Excel.

For what I think is a great take on big picture PowerPoint theory, check out Guy Kawasaki's 10/20/30 rule of PowerPoint. Of course, you're often at your boss's whim when putting together a PowerPoint presentation, but I think Guy makes some great points about how to put together a great presentation. I'm getting a bit off-topic here, but he also wrote a post about how to get a standing ovation when you make a presentation. If you have the ambition and the nerve... try for a standing ovation during your next presentation.

Anyway, just my thoughts on a couple of high-value skills college students sometimes overlook.

Peace!

Kaizen

Back in the 1980s I was a young child wearing short shorts, socks pulled up to my knees, and lighting ants on fire with a magnifying glass, but I vaguely remember hints of this big American obsession with Japanese management styles, and how America was falling behind in the world. If you’ve seen the movie Gung Ho (imdb), then you’ll have some idea of what I’m talking about. That whole era and the literature (Amazon) it produced focused on the old-fashioned, pre-PC, manufacturing-centric view of the business world. NBC put out this seminal work (wikipedia)related to the whole craze, if you’re interested.

While I don't discount everything that came from that school of thought, part of me just squirms when I read books that talk about dictating memos to your secretary, reading stock quotes off of a ticker tape and other old-fashioned workplace relics, and these references are hallmarks of books written about the Japanese management craze. By the way, the craze had sort of a predictable ending - despite all of our admiration for Japan, its economy peaked around 1989 and showed basically no growth for the next 13 years.

One interesting concept to come from that time that continues to be popular today, particularly as a part of six-sigma (wikipedia) training courses and things of that nature. This is the concept of Kaizen, (wikipedia) a Japanese word meaning “change for the better” or often thought about in English as “continuous improvement.”

What Kaizen basically stresses is that small improvements add up over time, and that workers should try to do things a little better today than they did yesterday.

This isn’t a revolutionary concept, but it was something that popped into my head while I was thinking about my 2007 goals, and how I might try to approach things a little differently when I go back to work tomorrow. Sometimes we tend to stagnate, and making a big change seems like a daunting proposition. Why not go for a bunch of small, steady changes over time? I think this is something you can do no matter where you work, or what your position is.

Maybe you can set up a macro to take a few steps out of a task you frequently run in Excel. Maybe you can cut out your morning recap of espn.com and instead use the time to plan out your day. Maybe you can get a file holder for your desk to keep more frequently used files within closer reach. Nothing huge, but just enough to be able to say that you have done things better today than you have yesterday.

Hopefully a focus on little improvements over time, Kaizen, will make you more valuable to your employer, and as a result, more highly compensated.

Organize Your Work With a Notebook in 2007

One of the recurring themes of this blog is that the best way to get richer is by increasing your income. For most of us, the best way to do this is by doing our current jobs better and getting the raises and bonuses we deserve. This post walks you through a system I use to organize my work and manage my time on a daily basis. It has done wonders for my organization and recall, has been a real timesaver, and I think it has contributed to improving my performance.

The system is incredibly low-tech, and consists of nothing more than an ordinary spiral 8.5' x 11' notebook that I use to take notes on virtually everything I do. If you walk by my desk, you will always find one of these books right next to my computer, open to a page with the date on top.

Each day I get into work about a half hour before everyone else. This gives me some good quiet time to plan my day. I usually start by flipping a new page in the notebook, writing the date on top, and making my to-do list, which I sometimes populate while reading my emails and flipping through the previous days' pages.

Then I keep my notebook with me throughout the day so I can write things down and cross off my "to-dos" as I get through them. When I said "virtually everything" goes in my notebook, I meant it. Some examples include:

• Each time I make or receive a phonecall related to a work project, I write down the person's name and number along with a summary of the important points.

• Each time I come across a word or a concept that I don't understand, I make a note to research it when I get some down time.

• I bring the notebook into every meeting I attend, where I list the attendees and my notes on the important discussion topics.

• If I get some particularly important handouts at a meeting, I scotch tape them into the notebook so I can easily reference them at a later time.

• I have multiple sets of usernames/passwords, and I keep them on a certain page of the notebook, disguised so that someone who found the book would not know how to use them.

• If I accomplish a task that wasn't on my to-do list, I make a note of it.

• If an idea comes to me in the course of working on something, I immediately write it down so I don't forget it.

• If a new employee joins the company and they are introduced to me, I write down their name and department, and possibly a few other details about them (where they used to work etc...) because those are the kinds of things that tend to immediately fly out of my head right after I've met someone new.

• If I write down something important that I will need to come back to over and over again, I go over it with a highlighter so that I can easily find it. One example of this is a procedure I run through quarterly to access data from a website and format it for a certain report.

• I often write a brief postmortem after I’ve completed a project or solved a problem. Sometimes when you get an answer, it sticks in your head for a short period of time, then leaves. When the question comes up again, you have to reinvent the wheel and figure it out all over again. If you’ve written it down, you can just go back to your notes instead fo doing extra work.

The single notebook system is a great way to make sure that I'm not always searching for materials, that I don't forget things, and that I can recall phone conversations from years ago. I can't count the number of times where this system has helped me out. For example, just the other day I was in a meeting where we were discussing a certain transaction we did some months back, and nobody could remember the dollar amounts involved. I simply flipped back to the day I called someone about the transaction and pasted into my notebook was a summary Excel table I had made with all of the relevant details. This made me look extremely efficient and organized.

It is also a great place to keep phone numbers. I find that I often lose business cards, napkins, post-it notes, and various other scraps of paper that people use to jot down phone numbers. When they are taped or stapled in my notebook, all I have to remember is the approximate date I had the conversation, and I can immediately find them.

Another great thing about having this notebook is that it comes in extremely handy around annual review time, especially when I am asked for a list of my accomplishments throughout the year. Reading through my notebook at the end of the year is a great way to get all of my accomplishments fresh in my mind before heading in to a performance review.

I make sure to put the book away in a drawer at the end of each day so the cleaning staff doesn’t accidentally toss it. And when I go on vacation I usually try to lock it in a drawer to make sure someone doesn’t walk off with it.

This technique is also a great one for the disorganized college student (which I was during my first couple of semesters at college). If you keep one binder or notebook for each class, bring it to every class, and keep all of the materials together, you will never lose anything. You are also much less likely to forget due dates for assignments.

If you want to improve your organization at work, I highly recommend you try using a notebook. Once you stick with the system for a few weeks, it becomes second nature to keep your notebook by your side and should lead to a noticeable increase in your productivity.

You can adapt the system any way you want but I would say the three keys to making it work are:

1) Starting each new day on a new page
2) Putting the date on top of each page
3) Resisting the urge to take notes anywhere else (like a post-it or the back of an envelope)

Best of luck with this, and I'm always happy to hear if this helped, if you do this differently, or have any additional tips on how to be more organized at work.

Beat the Average Raise

I read an article in the Wall Street Journal today that referenced a Mercer Human Resources Consulting survey that said the average annual pay raise this year was going to be in the 3.6%-3.7% range.

The key word there was average. This is further reinforcement for the idea that you need to perform well at your job. You want to give your boss a reason to give you an above average raise.

So this year has already pretty much passed you by. Were you a mediocre performer this year? Did you do just enough to get by with outbeing fired? Are you going to get your usual 4% raise this year?

If you answered yes to any of the above questions, and you want to earn more money so that you can achieve your financial goals, you need to make a change. If you do a 180, you will be able to laugh when this same survey comes out again next year, and says the average raise is going to be 4%.

A lot of people have asked me how to make a change at work and break the yolk of mediocrity. I don't claim to be an expert at what you do, but I will offer you a few suggestions on how you might get started:

1) Ask your boss. During your annual performance review (if you are fortunate to have one), ask your boss what it will take to be labled a high performer next year. Chances are he will be able to tell you a few things, but not all bosses are prepared to give you enough feedback.

2) Answer your company's questions. Pay attention at meetings and when senior management speaks. Are there questions that keep coming up each month that nobody seems to know the answer to? Are they wondering how one competitor keeps taking all of your sales? Are they wondering why certian projects consistently come in under-budget while others come in over? I don't know what your company's questions are, but if you keep on the lookout for them, you will definitely begin to notice them. Take your best shot at answering them. Even if you don't come up with a solution, if you find some new insight, your boss will appreciate that.

3) Get some training. Do you always find yourself asking a coworker for help creating an Excel spreadsheet? Does someone else always get assigned to work on projects because of their knowledge of MS Access? There are plenty of classes and books out there designed to improve your skills in these areas and others. Maybe your company will even pay for them!

4) Watch the star performers. Is there someone in your group who is your boss's "go-to" person when they have important projects to work on? If that person isn't you, you need to observe the go-to person and how they work. Do they get in much earlier than you? Do they have better contacts within the company than you have? What do they do that is different, and how can you gain their skills?

5) Read. Reading is one of the most underrated ways to improve your performance. The more you read about your company and your industry, the more ideas you take in, the more you are able to speak intelligently about important current events, the smarter you will be perceived. Don't take this to the extreme, however. We've all worked with the low-level brown-noser who reads an article or something and attemts to impress everybody with their knowledge. Usually this ends up working against them because people resent anyone who tries to flaunt their knowledge. A sincere effort to better educate yourself on your company and your industry will pay huge dividends down the road.

My lowest raise was something like 7.5%. Admittedly I am still young and haven't had the chance to really settle into a career yet, but I intend to do everything possible to keep my streak of above-average raises alive!

You can check out the Journal article here:

http://online.wsj.com/article/SB116658391005855379.html?mod=home_whats_news_us

How to Do Great Work - Hamming's Take Part II

Continuing the series on Richard Hamming's "You and Your Research" and how it can help you become a fantastic worker and therefore increase your income. The full text of the speech (which you can read instead of these blog entries) is available as a .pdf here.

Accept ambiguity - Hamming says that "Great scientists tolerate ambiguity very well." He says that doing great work requires a delicate balance between believing in the idea well enough to go forward, and doubting it enough to notice errors. I have often engaged in this balancing act while working on bigger long-term projects at work. What this says to me is that, if you have an idea and you get some data or a result that disputes it, don't let that anomaly crush your idea, rather let it refine the idea, or guide you to a new one.

Be emotionally committed - Hamming speaks of the power of being so committed to a problem that it works its way into your all-powerful subconscious, which has an amazing ability to solve problems. "...when you have a real important problem you don't let anything else get the center of your attention - you keep your thoughts on the problem. Keep your subconscious starved so it has to work on your problem, so you can sleep peacefully and get the answer in the morning, free." This quote speaks to two points. The first goes back to drive and dedication. Working hard on something for a long period of time will ensure that it becomes the center of attention. The second is the amazing ability of our subconscious. Your mind can do some amazing things while you sleep.

Work on important problems - "If you do not work on an important problem, it's unlikely you'll do important work." Hamming admits that this is an obvious point, but says he noticed in his experience that the average scientist spends all his time working on unimportant problems. From what I've seen, the average worker also spends all of his time working on unimportant problems. To a certain extent, you have control over what you're working on. If you don't have control over what you're working on at the moment, do a good job with the work you're given and you will eventually get that leeway.

Hamming also had what he called "Great Thoughts Time." Every Friday during and after lunch, he would only discuss great thoughts, such as "What will be the role of computers in all of AT&T?" By setting aside a specific time to think about great thoughts, he made sure he didn't get caught up in the little things. I know that Bill Gates does something similar, but instead of Friday afternoons, he gets it all done in one "Think Week" every year. You can read about think week in this article. This think time also gives him a chance to take a step back and examine whether or not the stuff he is working so hard on every day is really the right stuff to be working on.

Work with the your door open - Hamming made this observation- "I notice that if you have the door to your office closed, you get more work done today and tomorrow, and you are more productive than most. But 10 years later somehow you don't quite know what problems are worth working on; all the hard work you do is sort of tengential in importance." This seemed counterintuitive to me at first. It seems like all of the interruptions I get throughout the day (unfortunately I work in a cubicle and don't have the ability to close my door) are nothing but disruptive. However, Hamming's point is that you have to know what's going on around you, and keeping yourself open to the occasional interruption is one way to do this. In the short run it seems like a pain in the butt, but over the long term, you get to learn things about your organization and the world around you. Important things.

Sell your work - Hamming spoke about how selling does not always come naturally to a scientist who makes a discovery. "The world is supposed to be waiting, and when you do something great, they should rush out and welcome it. But the fact is everyone is busy with their own work. You must present it so well that they will set aside what they are doing, look at what you've done, read it, and come back and say, 'Yes, that was good.'"

He says there are 3 important ways to sell: write clearly and well, give formal talks, and give informal talks. If you're like me, the idea of giving talks makes you shudder. It made Hamming shudder also, at first. But given some time and practice, he became much more comfortable making these talks (the equivalent of presentations people give at my company).

So that's pretty much everything I took away from reading the text of Hamming's speech. Hopefully you had a chance to read it and take away some ideas and/or inspiration from it. Let me know if I missed anything important, if you think I got anything wrong, or if you have another take on this.

How to Do Great Work - Hamming's Take

I read widely and often find pieces of personal finance inspiration in fields outside of finance.

One of my favorite non-finance bits of inspiration is a transcription of a speech given by Richard Hamming, a mathematician who was highly respected in the fields of computer science and telecommunications. He was one of those scientists whose research led to a number of things being named after him: Hamming code, Hamming matrix, the Hamming window, Hamming numbers etc... Needless to say, he was one of the greats, and made contributions that I don't even pretend to understand (not being a scientist myself), but I know earned him a great deal of respect.

The title of this particular speech was "You and Your Research" and in the talk, he attempted to give his answer to the question "Why do so few scientists make significant contributions and so many are forgotten in the long run?"

He then goes into what separates great scientists from the average scientist, and I think the lessons apply to separating great anythings from average anythings. Financial analysts, marketers, human resources people etc...

Being great at what you do at work goes a long way towards increasing your income, which is without a doubt the most important thing you need to do if you want to become wealthier than you are today. When you go to your boss for a review at the end of the year, if you can put a record of great accomplishments in front of him, you are going to make it easy for him to offer you a raise, or risk losing you.

I'm going to break out what I learned from reading this document over the next couple of posts because there was just too much good insight in there to limit it to one. I highly recommend you read the entire text here (direct link to a .pdf document at cs.virginia.edu).

So what's the secret to setting yourself apart from the pack?

It's not all luck - Hamming argues that some people don't even set out to do great work, because they believe all of the great breakthroughs were the result of luck. He contradicts this thinking by giving examples of scientists who did a number of things in their lifetimes and says that luck might have played a part in their accomplishments, but, quoting Pasteur, concludes that "luck favors the prepared mind."

It takes courage - Hamming says that courage is another thing that distinguishes great scientists. He says "Once you get your courage up and believe that you can do important problems, then you can." I notice this a lot in my line of work. The people who do better work in finance are the people who don't hide when they come across something they don't understand. They believe that they can understand it, and they work to do so. Just because something at work is complex, does not mean you cannot figure it out and do it. If you hide from big words and difficult tasks, someone else is going to do them and get paid for them as well.

It does not take ideal working conditions - "What most people think are the best working conditions, are not," Hamming said. This wasn't a particularly great insight to me. I remember the book "On Writing" where Stephen King said he wrote his first few novels in a cramped closet in the back of a laundromat. Apple Computer started in a garage...the list goes on and on. You don't need the ideal working conditions to do great things, so stop complaining about your quirky mouse, your squeaky chair, and your coworker who is always making personal phone calls.

It takes drive - Paraphrasing a colleague, Hamming said that "Knowledge and productivity are like compound interest. Given two people of approximately the same ability and one person who works ten percent more than the other, the latter will more than twice outproduce the former. The more you know, the more you learn; the more you learn, the more you can do; the more you can do, the more the opportunity"

I think that is worth reading again. Go back and let that sink in. If you're the type of person who does this, print it out and post it someplace where you can see it. I think this quote speaks to those of us who get caught up reading sports stories at work, or not putting in the hours we need to when we need to. Quite simply you have to work hard in order to do great things.

One other thing he adds to this topic is the fact that you must intelligently apply your drive. As hard as you might be working, if you aren't working on the right thing, you are just spinning your wheels. Sometimes it takes a great deal of awareness to be sure you're working in the right way on the right thing because you can get caught up in the moment. In the next post I'll get into what I think Hamming's solution for this particular problem is... it involves setting aside time for thinking some form of what he calls "Great Thoughts."

Get rich by increasing income, not cutting expenses

I've seen a lot of personal finance advice thrown around on a lot of different websites/blogs/books that focuses on the little things. For example, people are advised to re-use teabags to save money, clip coupons, make coffee at home instead of buying it on the way to work, and other tips that I would put in the general category of "being frugal."

This advice definitely has its place. Being frugal will allow you to save more money in the long run. If you can cut your expenses dramatically, you can definitely become richer (from a financial standpoint).

However, I think people sometimes tend to focus too much on the expense side of the equation. Instead, they need to focus on the income side. I would argue that it is dramatically easier and will make a more significant change in your life if you increase your income than if you cut your expenses by a small amount.

Don't get me wrong, I think most of us have a good $100 a month we can squeeze out of our budgets, and I recommend that we all take the time to identify this $100 and eliminate it. However, once you wring the big stuff out of your budget, your opportunities for cutting costs are very slim. You can cancel your cable television, get a cheaper cell phone plan, sell your old junk on eBay, give up the Starbucks habit, but eventually you come to a point where you're splitting hairs. Once you find yourself washing out sandwich bags, I recommend you stop your intense focus on being frugal and instead shift your efforts towards maintaining your expenses and especially on growing your income.

So how do you grow your income?

This answer is different for every person reading this blog. I hope to shed some insight into this in future posts (I have more than doubled my income since I first started working in 1999). If you're in my position, you will want to make yourself a better employee. If you're a small business owner, you might want to look for ways to increase sales, add new value for your customer, or something else along those lines.