It was one of those parties large enough where folks had formed groups of different conversation each going on simultaneously. I decided to refill my wine glass at the bar, and on my return from the bar, heard bits and pieces of varying conversation as I move through the room. My attention was suddenly captured and drawn to a conversation when I heard the words ‘Yes, it would be a way of securing more of your money’ caught my ear, as I turned and gravitated into the group.
There I saw and heard the voice of Michael Hughes (not real name) aka the playboy and man’s man of financial gain in my circle of friends. He was at the center of a discussion where he was agreeing with some fellow over advice about finances that the fellow had gleaned from a television talk show whose guest were composed of “Sharks” (a business-themed T.V. show where multi-millionaire tycoons listen to people from all walks of life, who have come to pitch their dreams and ideas for the chance to secure funds in a business deal that could make them millionaires.) The Sharks' goal is to find a deal that brings a return on their investment and allows them ownership of a piece of the next big business idea.
The Sharks included billionaire Mark Cuban, real estate mogul Barbara Corcoran, QVC-famed Lori Greiner, tech innovator Robert Herjavec, branding expert Daymond John, and venture capitalist Kevin O'Leary. (These investors had found themselves being interviewed about keys to financial success.)
Our cocktail group conversation spring-boarded from that conversation about the show into other areas of money and success. As the conversation moved along I found myself going through my own mental check list of techniques I had tried over the years that worked and I found useful, but only when I would put them to work for me and my circumstance. Circumstance in one’s life is why a grain of salt is needed when taking any advice.
Having said that, this post is for that group of you who keep harassing me about my take on your financial decisions. To those of you that I have told on several occasions that finance is not my field of expertise! Well, I did learn something from that cocktail conversation encounter: that I had known more and forgotten it than I thought I did. It has given me the confidence to pass on these 7 tips, about finance that you may find useful to consider. I would suggest that you do your own research on it and only then to put it into action if you determine any of it useful to you.
Tip 1 - Be ready for when the poop hits the fan, because it always does
In life you learn that if you don’t like something give it 15 minutes because it is going to change. You and your financial picture will certainly see change happen. If you are looking for security in a time of flux or a downturn, then you would need to learn how to prepare financially and emotionally for the unexpected, because there's a 100 percent certainty the unexpected will happen. It is suggested that one way to be ready for change is to keep 10 percent of your total assets in cash.
Tip 2 - Follow your heart, but do not forget your brains
People can be so overzealous about their dreams to the point that they scare themselves out of moving toward them; or they go rushing in, blinded by their passion that they miss the realities of making their dreams realized. They need to see themselves and their ideas/concepts differently, perhaps more like a savvy entrepreneur, which is a person with a plan for success, with flexibility of focus both for their ideas/dreams and lifestyle. And not to forget that they will have to generate money to survive and thrive, not only for themselves but for whatever ideas/creation they want to birth.
Tip 3 - Cultivate healthy skepticism
You can expect as an entrepreneur, a preoccupation with your dreams/creation (that could even have you forget to breath, thank heavens breathing is automatic), you will find you want to do everything possible to maintain and financially secure it.
Know that successful people have learned to take the hit on both finances and dreams, but they grew from the hit, got up and stop feeling sorry for themselves and keep moving forward. In your financial world, you will need to apply the same strategies. Know there are opportunist looking to take a bite out of your savings, reputation and dreams. To protect yourself from paranoia about this, you must cultivate two types of focus - Knowledge and Wisdom. To do that I share a Marilyn Voss Savant quote: “To acquire knowledge you must study and to acquire Wisdom one must observe.”
Thus in your game plan development you have short term goal that involves learning to spot, what Sharks call, “Slick Willies.” These are slippery folks, quick to take shortcuts or shift stories, and they're often dishonest. Slick Willies are in every profession, from financial advisers to lawyers to real estate brokers, and the best way to tell if you're dealing with one, is to call a time-out and listen to your gut. Then proceed accordingly.
In your Long term game plan incorporate “the worst-case scenario” to every situation. For example, what would be the personal impact of a significant stock market correction in your life, if it happens in the next five years? What if a spouse, or parent falls ill and needs long-term care? What if your job downsized before you were ready to take your dream/concept full throttle, or before you were ready for retirement?
To incorporate action plans for such situations as these into your game plan, you will need healthy skepticism, or what Andy Grove, the former CEO of semiconductor giant Intel, calls Paranoia as suggested in his book “Only the Paranoid Survive” which deals with lives in sudden change.
Tip 4 - Know “Who’s On First”
The Sharks Tank show has two dramatic words, "I'm out," and when spoken, I am told, you can see the air go out of the person who is trying to pitch their idea / product. Comments of the various investors have been reported as saying: Mark Cuban of the show says: “It's an emotionally charged moment for the entrepreneurs, it is remarkably emotionless for the Sharks. That's because, ‘No deal is better than a bad deal.’ Understand the investment.” Cuban is reported as going on to say "If you don't understand what is going on, whether as an investment or a deal, then why are you doing it?" Lori Greiner said: “The problem is, most people either don't realize that when you have a dream, persistence pays off, you find a way.” Or as Barbara Cocoran says: “They lack the fortitude to walk away.” Daymond John says: "Money is purely a tool, and you shouldn't attach any emotion to it. But you see it happen all the time with the buying of homes or people living beyond their means. They get emotionally tied to something, and it eventually hurts them."
Tip 5 - Take a Risk, a Calculated Risk
Shark - Kevin O'Leary was purported as saying regarding risk - "A calculated risk is based on knowing the outcomes of similar investments over a long period of time. It means learning from the past when you're looking toward the future."
In our cocktail conversation, we talked about 3 components of risk reduction, which came down to:
Invest in what you know, and in what companies or products you love.
Do your homework. Research the idea or product, use your resources the Internet.
A New idea for me was reported to have come from Shark Tank’s Kevin O’Leary who was paraphrased as saying: “Prioritize return of capital. Instead of focusing on how much profit you can make; determine how quickly you'll recoup your investment. The key is return of capital first, not return on capital," He goes on to says. "If I give somebody $500,000, I first figure how that money is coming home."
Tip 6 - Negotiate Everything
“I am not interested in money but in the things of which money is the symbol,” said Henry Ford. One understanding of Money that I have come to understand a great deal more of, as of late, is from etymological origins of the word Money which means EXCHANGE, and later BARTER; In Latin origin - CAMBIRE "to exchange, barter; Celtic origin, from PIE root KEMP - "to bend, crook" (with a word sense evolution from "to turn" to "to change," to "to barter". Which suggest to me an exchange of services.
So much of life is a negotiation. It must be noted that it is a mistake when negotiating to think of the goal is ‘trying to get something over on someone’, it is more important to try to find that ground or medium where both sides walk away feeling they've gotten value. Few things are worse than remembering getting bad quality and service out of an exchange.
Understand then, Money as exchange or barter gives us all more opportunities to find ways to turn or better our situation and life. Look for new ways to bring opportunities of trade or barter to you.
Tip 7 - Listen and keep learning
Are you present in your dealings with people? Conscious of your transactions? Listening to others as well as yourself to be able to make corrections in a bad encounter or repeat the actions that produced a good outcome? What did you learn from the interaction? These questions encourage constructive thinking, and gives you tools to learn, to change, or adapt your dreams/ideas/projects as needed to bring about success.
So I had a lot to think over and distill, to come up with my conclusions as to what to share with you regarding cultivating success and financial security. One other point I would like to leave with you, is to look for the opportunity to make it abundant in your life. Marianne Williamson is quoted as saying: “The key to abundance is meeting limited circumstances with unlimited thoughts."
These were tips to help change your mind set about creating a secure future with new ways for you to think about money and doing business. If you take action and try some of these changes, shoot me an email. Tell me how it’s going for you.
