Creating your own luck

I am continuing on with my Toastmaster's speech progression. It is a lot harder to consistently think of interesting topics to speak about or it is at least proving more and more difficult. I am finding myself turning to self-help topics for speech subjects. I can't help but feel a little corny doing this but I also want my speeches to serve a purpose or convey a moral.

Toastmasters has a monthly magazine publication that typically contain a couple useful articles to help your speaking chops. The August 2008 issue had a good article by former Toastmasters World Champion David Brooks titled "Seven Staples of Public Speaking." Number Four on his list of public speaking strategies was "Speak with your audience, not to them." Brooks pointed out that "today's audiences generally want short, practical presentations- more tightly focused and with an emphasis on 'What's in it for me?'" I have taken this to heart which, I believe, explains why I keep coming back to these self-helpy subjects.

My next speech is about creating your own luck and I have pasted it below. I am not thrilled with it because it is lacking in references to my own experiences with luck. I might just not be super excited in general with the topic because it's a little hokey. In any case, here it is:

Luck…everybody wants the good kind and no one wants the bad kind. But there’s a problem. You can’t just get it or create it because luck happens by chance right? ---Wrong--- Surprisingly, it turns out that each of us, in large part, controls our own luck. Thus like the oft heard idiom, luck is the residue of design. What I am telling you is that luck is the byproduct of our own planning and can, in fact, be controlled and created. Sounds crazy right? Well its not. What’s the secret?

For the past eight years, Richard Wiseman a PhD in psychology from England has studied what makes some people lucky and others not. After conducting thousands of interviews and hundreds of experiments, Wiseman now believes he's cracked the code.

It turns out that luck isn't due to kismet, karma, or coincidence. Instead, lucky folks -- without even knowing it -- think and behave in ways that create good fortune in their lives. Wiseman has since revealed four approaches to life that turn certain people into luck magnets. Each of us can therefore, learn to be luckier.

The first luck creating principle is to:

Maximize Your Chance Opportunities

Lucky people are skilled at creating, noticing, and acting upon chance opportunities. As part of his study, Wiseman asked a large group of people to flip through a newspaper and count the number of photos in a certain amount of time. While the “unluckier” people simply plodded through the exercise the lucky people were quick to notice an ad on the second page right next to one of the pictures that read “you can stop counting, there are 43 pictures” and then, a few pages later, the lucky people found another add reading “seriously stop, there are 43 pictures and if you tell the proctor now you will win $150”. The unlucky people totally missed these opportunities because they failed to look outside their task. To increase your luck- keep your eyes, ears and mind open to all possibilities.

Next you’ve got to- Listen to Your Lucky Hunches

Lucky people often make more effective decisions because they listen to their intuition and go with their gut feeling. How many times have you taken a test, intuitively felt an answer was correct but picked another answer only to learn later that your gut feeling was right? I know I sure have and I’ve wanted to kick myself each time. Sort of like “Spidey Sense” lucky people recognize and react to their intuition.

Third, Lucky people Expect Good Fortune

Lucky people are certain that the future will be bright. Over time, that expectation becomes a self-fulfilling prophecy because it helps lucky people persist in the face of failure and positively shapes their interactions with other people. I like to think that the night is always darkest just before dawn. People with good luck persist through the darkness and are ultimately rewarded with the light at the end of the tunnel. Those that often feel plagued with bad luck tend to give up when things are most bleak and fail to follow through causing them to miss out on the good things to come that are right around the corner.

Lastly, lucky people…..

Turn Bad Luck Into Good

That is, they essentially always see the glass as half full. When presented with a bad luck situation lucky people naturally focus on the positive. For instance a lucky person accidentally crashes his car into an unlucky person. The unlucky person curses their bad luck for the damage to their car and the increased insurance premium they are sure to face. The lucky person on the other hand, facing the same issues, chooses to focus on the good luck that accidents happen and fortunately no one was seriously injured. Rather than letting an unfortunate situation control them, lucky people take control of their situation.

As you can see these 4 principles of luck have a lot to do with our perception of the cards life deals us. By trying to keep our eyes open to new opportunities, listening to our hunches, expecting good fortune and turning bad situations into good ones we can work to bring more good luck into our lives than bad. In this day and age we can all use any additional luck we can get. Design a way to assimilate these four luck principles into your life and you’ll soon find yourself with a lot more luck residue.

One way to win friends and influence people: Don’t argue

About a year or so ago I raided one of Lacey's brother's bookshelves, as I do periodically for new reading material. I grabbed a copy of Dale Carnegie's famous book "How to Win Friends and Influence People" because who doesn't need to win new friends? It is a great book I would recommend to anyone and includes a number of thought provoking ideas about how people generally interact with each other. I recently stumbled across the following article at adverselling.com which does a great job of briefly encapsulating one of Carnegie's important concepts for winning people over- "Don't argue." I have included the article below:

"I’m sure you’ve heard of the book How to Win Friends and Influence People. It was published in 1937 by Dale Carnegie, has sold over 15 million copies, been translated into 16 languages, and is still on Business Week’s latest list of best sellers (7/14/08, p. 99).

But have you ever read it?

Until a few years ago my answer was no, because I always thought the title sounded silly and manipulative. Then I opened the book and became its biggest fan. In fact, I have learned more about everyday human behavior from this book than from all the books I read to get my Ph.D. in psychology from Harvard. It’s now near the top of my list of the top business development books for lawyers.

One senior lawyer who read the book on my recommendation told me that this book “changed my life.” All right, he was pulling my chain, but just a little. I know because he recommended the book to several of his partners. And one of them found it so valuable that he kept it in his bedside table for night time reading.

When legal marketers sign up for our Certified Coach Program, each gets a copy of Carnegie’s book. (They also get two others: Neil Rackham’s SPIN Selling Fieldbook, and my book AdverSelling.)

Some of the most valuable advice for lawyers is found in Carnegie’s chapter on “A Sure Way of Making Enemies,” starting with the story of an attorney who argued the case of Lustgarten v. Fleet Corporation before the US Supreme Court. When one of the justices said “The statue of limitations in admiralty law is six years, is it not?” the attorney replied, “Your Honor, there is no statute of limitations in admiralty.”

“A hush fell on the court and the temperature in the room seemed to drop to zero,” the lawyer later reported (p. 126). “I spoke better than I ever spoke before. But I didn’t persuade. I made the enormous blunder of telling a very learned and famous man that he was wrong.” The lawyer may have won the argument, but he lost the case.

Of course, in many situations it is a lawyer’s job to argue. But when the time comes to win friends, influence people, and develop new business, “You can’t win an argument... If you lose it, you lose it; and if you win it; you lose it. Why? You will have made [the other person] feel inferior…he will resent your triumph” (page 117).

Or, as Ben Franklin put it: “If you argue and rankle and contradict, you will achieve a victory sometimes; but it will be an empty victory because you will never get your opponent’s good will” (page 118).

When my colleague and friend Joyce shopped for new kitchen cabinets, she found the lowest price at a lumber store about a mile from her dream house. But the designer in that store argued with her about having two separate sinks in her kitchen, and told her that the shaker-style cabinets she wanted had become a cliché. Now Joyce may be even cheaper than I am, and she tried to convince herself to ignore the argumentative sales person and save money by buying at this store. But she ultimately decided to pay a little more and buy the cabinets elsewhere, just to avoid working with that designer. In fact, she even tells her friends to avoid the place.

If you’d like to read dozens of other examples of arguments that backfired, just Google “winning an argument” and scan the blog accounts of arguments with spouses, relatives, and friends. You will find one piece of evidence after another for Carnegie’s central idea: The only way to get the best of an argument is to avoid it. Especially if you want to develop new business." -Jim Hassett; http://www.legalbizdev.com

I think one of the most important concepts is to recognize an argument before it occurs and take evasive action to move the subect in a more productive direciton. How many times have each of us sensed an arugment's approach, whether it be with a spouse or loved one or co-worker etc? And how many times have we then gotten into that argument because our ego would not let us back down before things heated up? And how often do we look back on arguments and think to ourselves "I am glad we had the argument!"? Not very often.

Arguments generally produce deleterious results. I think instead of trying to win an argument the most productive endeavor is to work towards coming to an agreement on whatever the subject of potential arugment was going to be...If that makes any sense.

Toastmaster's Speech on Living Below Your Means

I joined Toastmasters several months ago to work on my public speaking chops. Once you register for membership, you are provided a manual with a progression of 10 speeches that help you work on various aspects of your public speaking. I think this, essentially free, organization is invaluable.

I have already completed my first speech, the "ice breaker" and I am now on the brink of presenting my second speech geared towards organizing your speech. For this second speech I chose to talk about my own life experience of learning to live below my means. I have pasted a copy of my speech below:

"Who here hasn’t heard the famous quote attributed to Ben Franklin - “A penny saved is a penny earned?” And all of us, at least ostensibly, know it’s important to save money. However, few of us innately understand the true importance of saving - I know I was clueless for a long time.

Looking back on life I was lucky to be born into a fairly affluent family I wasn’t spoiled per se, I just never wanted for anything. While I was a fortunate to have grown up so comfortably that comfort was a small curse in the sense that I never developed an appreciation hard-earned money and the importance of saving it.

I remember getting to college and my parents providing me a monthly stipend. Pretty sweet right? Well despite this “Free” money, I constantly over drafted my checking account. There are few things more embarrassing than waiting in one of those interminably long lines of people at the bank only to finally get to a teller and have them tell you your checking account is $295….overdrawn. Oh my god. ummmm…what?! I vividly remember being immediately overcome with heart palpitations and sweats followed by me quickly transforming into whisper mode so as to avoid the other people in line getting a good laugh about my predicament. I could imagine them thinking “Wow I thought my finances were bad…look at this clown!”

At that time in my life…I was a compulsive purchaser. Anything I felt I wanted to needed I bought. If I were hungry I would go out to eat wherever I felt like it. I couldn’t walk by a music store without stopping in to buy a few cds at $20 a pop (yes that dates me a bit). That I really didn’t have enough money to afford this lifestyle just never seemed to register. I am just so grateful it never occurred to me to get a credit card in order further fund my lifestyle at that time. But clearly, I was headed in that direction. I was on the path to being that guy with a really nice car and really nice clothes and a really big pile of debt.

I wish I could tell you the intervening force that halted my meteoric plummet into debt was a financially savvy friend or family member; but it wasn’t…it was an issue of Money magazine I randomly picked up one day. In it, there was an article on the importance of saving your money and living below your means. And explained to me how a Penny saved is actually worth more than a penny earned. The article presented me with several intriguing concepts a couple of which I would like to briefly discuss with you.

First, we’re all aware that pretty much all our earned income is taxed. So, if you are in the 25% tax bracket every dollar you earn is essentially only worth .75, this value drops even further due to state and local taxes. But what I came to realize was that each dollar saved or each dollar in my checking account has already had taxes taken out. Fairly obvious right…but when I thought about this in the sense of the things I was constantly buying it hit me. In order to replace the $20 I paid for each cd I bought I would actually have to earn around $25 or $26 due to taxes. I really started to realize the importance of saving the money I earned.

Second, I learned of the time value of money. The article asked me if I would rather have $1,000 today, or $1,000 in a year? Well I of course thought, I want it now! And while this is the right answer, I felt that way for the wrong reason. At that time, I would want the money now so I could buy things now. But the real reason it’s beneficial to have the money now is because the money is worth more now. Why? Well aside from inflation, which is a whole other troubling issue, you want the money now because of its earning potential. You can earn interest on the money right now. Such that my $1000 in a high interest savings account will be worth more than $1000 a year from now. And if I spent that money now, I will lose out on the accrued interest of that immediate money. So it dawned on me that the less money I spent now…the more money I would have down the road.

From all of this, I came to understand that a penny saved really was worth more than a penny earned and so began my new life of parsimony. I quickly began to view saving money as a personal competition and a test of my will. How little could I live on and still be completely comfortable? Well of course that approach can get a little out of hand and each of us needs to find our happy medium of frugal living. I know I have found mine.

The car I drive exemplifies a perfect example of my financial paradigm shift. I drive a crappy car. It’s a black Saturn ion with a crumpled in rear fender, poor acceleration and a rattle that let’s everyone in my neighborhood know when I’m coming and going. I think a lot of people would be embarrassed to be the owner of my car. I know the old me would have been. The old me would not have stood to be seen in such a jalopy and would have run out and purchased a much more expensive car on credit and gone into debt for it.

But now days, I take pride in the fact that I have had my car for over 5 years and plan on having it for at least another 5 years. Because my car, as crummy as it is, is paid for and costs me nothing more than gas and routine checkups to keep it running. And I know the money I save now by not having a nicer car will be worth so much more in the future and will allow me and my family to live just that better of a life later on. I always try to remember that a penny saved is really worth more than a penny earned. And while I disagree oh so slightly with Ben Franklin’s famous advice, I think he would understand my perspective and be proud."

How to balance competing savings goals

Lacey and I have finally unified accounts for the most part. Just when I had figured out how to manage my own finances I am thrown the curve ball of accounting for both of our finances. Further, because I am dealing with joint finances, I am trying to get our financial house in order while giving equal weight to Lacey's ideas and goals. Fortunately, we share very similar goals.

One, very minor, difference in our savings philosophies relates to our individual interests in saving for a house and saving for retirement. I cannot help but be a huge proponent of proper retirement savings. Lacey, understandably, is more focused on purchasing a new house within a couple of years. Both of us are interested in both we just favor one a little more over the other.

We have agreed to apportion all savings in a 60/40% split. That is, we set 60% of our savings aside for the down payment of a new house. The other 40% of our savings is allocated for our IRA savings. All the money goes into a high-interest bearing savings account at E-Trade. So we have a "B & L House savings" fund and a "B & L IRA savings" fund. The initial balance of these two funds is quite lopsided because we put all of our wedding money into the house account.

My biggest hang up with the situation is my fear of failing to max out both of our IRAs each year. I know all too well the importance of time with respect to compound interest. So I can't help but cringe at the idea of failing to top off our individual IRAs. On the other hand...our time horizon for purchasing a new house is two years. Therefore, we have two years of the split savings where it will be a real grind to meet my goals for our IRA. I am confident that within two years we will be able to purchase our next house. From that point forward our savings split will be much more retirement heavy (we may even be able to get into taxable accounts at that point). So I think I need to calm myself and look at the big picture. I also need to be happy with the split we have agreed on as is and thank my lucky stars for having such a like-minded and understanding wife.

All is not lost

This blog is not defunct...yet. I have fallen off the personal finance wagon as of late because Lace and I have been working to get our accounts unified. With this comes the task of completely reworking our budget and savings goals. I had just gotten to the point where I had all of my personal expenses and savings automated and now it's time to start from scratch. I am excited to see what our finances boil down to and see what we can begin to save every month.

We have agreed to allocate our non-work retirement savings to 60% house and 40% IRA. At least I think that's what we have agreed to. Our goal with the IRA is to save up to Vanguard's $3K minimum contribution limit, open one IRA and then do the same for the next $3K and then spend the rest of the year trying to max each account out.

With the house, we are about half way to our goal amount of 20% down on a ~$200K house (this includes savings for all the closing costs etc.). I put us on about a 2 year time horizon to reach the point where we have ample funds for a proper down payment. Although lately, we have been getting a little carried away with exploring the purchase of houses now. While it would be theoretically possible for us to purchase a home much sooner than two years we also have the goal of holding on to our condo as a rental property. I think we have to stick to our guns.

Friday Briefly

B: $1
L: $0
D: $0

Very brief!

Daily check in

Daily check in....

B: $0
L: $0 (the filing clerk Joel did me a solid and brought me left over KFC)
D: $25 (meeting my mom for dinner tonight)

Gas is getting bruuTAL. I drive so much for this job and still only get compensated the same flat rate as when I started and gas prices were a dollar less a gallon. I have an impending meeting with my boss in the near future to talk raise and stipend bump. I have never asked for a raise before...so to say I am a bit nervous is an understatement.