Prioritizing~Week 1

If you’ve seen my January Digest you’ll recognize the phrase “Evaluate. Prioritize. Organize.” Well, every Sunday this month I’m going to share a verse to help us remember the prioritizing part. Enjoy!

Photo credit: Erin Joyce

Continue reading Prioritizing~Week 1 …

From Econobusters.

The Other Side of the Frugality Fence

In a recent post at Get Rich Slowly, J.D. defined the “basic law of frugality” as this: “Decide what’s important to you. Give yourself permission to spend on these things. Pinch pennies on everything else.” That’s a pretty spot-on definition, in my opinion.

The more I thought about it, though, the more I realized that it speaks to the problems that both overspenders and cheapskates have.

Overspenders?
In most situations, it is easily possible for a person to spend substantially less than they earn. So what causes a person to spend more than they earn?

The answer is hidden in that phrase. Overspenders stretch their definition of what’s important to them to cover a lot of things.

I’ll use myself as an example. Back in my overspending days, there were a lot of optional things in my life that I defined as being important enough to throw my money at. I went golfing a lot. I bought gadgets by the truckload. I bought more video games than I could ever possibly play. I bought carts full of books.

The end result was twofold. First, I often didn’t have time to actually enjoy all of the stuff I had bought. Second, because of all of the spending, my life was in a rough place.

My definition of what was important in my life was skewed. I had elevated too many things to the threshold of “permission to spend freely.” Because of that, I spent much more than I needed to spend, but I had too many things in my life to actually thoroughly enjoy the things I was spending money on.

The solution? Cut back. Ask yourself what things you most enjoy doing and toss the rest of it. Look for ways of minimizing the costs of the things you do enjoy.

Frugality is often said to be miserable because you have to give up so much. In reality, frugality means not giving up the things that are actually important to you. The trick is stepping back, looking at your life, and figuring out what things are important and what things are not.

Cheapskates?
On the other side of the coin are cheapskates, a role that I’ve almost fallen into a time or two over the past few years.

Cheapskates apply principles of penny-pinching to every aspect of their life, even the important ones. Although they have financial stability in their lives, they do it at the expense of other elements of their life that could add a great deal of value.

Here’s an example from my own life. I love to read books. I read several books a month beyond what I review on The Simple Dollar.

For the better part of a year, I refused to buy a single book. Instead, I just reserved books that interested me at my local library and patiently waited for them.

Several titles came out that I was eagerly anticipating. I was able to read some of them fairly quickly (within three months) of their release. Others? I’m still waiting.

Even more noteworthy is that at least two of the books I checked out and read during that period were books that I strongly fell in love with and wanted to read again (and I was quite sure I would read them many times in the future, as I love returning to books that really make me think).

But I was cheap. I didn’t buy these books. I resolved to just check them out at the library when they became available again.

One Saturday afternoon, I was sitting at home, having just finished a book. I looked at my unread books and realized that the book I most wanted to read wasn’t there – a book I had read before and returned to the library after thoroughly enjoying it. The library didn’t have it, either. I checked on Amazon and realized I could have the book for just $7. And I talked myself out of buying it.

That’s when I realized I was being a cheapskate. I was avoiding spending $7 on something that I knew would give me many hours of enjoyment now and quite a few hours of enjoyment later on, plus it would be a book that I could recommend to friends and loan to them while they loaned me books as well. To not spend $7 on something I cared so deeply about – and it was a $7 I could easily afford – was pure cheapness.

It’s okay to spend money on things that are truly important to you. In fact, it’s good, because spending money specifically on things truly important in your life directly raises your quality of life much more than any other way you could spend your money.

Reading is important to me, so I’m no longer afraid to spend money on it. Yes, if I see a book I want to read, I’ll check to see if the library has it and read it from them first. Yes, I use PaperBackSwap religiously. But if those outlets don’t connect me with a book I’m passionate about, I’m no longer scared to go to the bookstore and pick up that book that I want. Doing so raises my quality of life quite a lot.

The Winners Are in the Middle
The best place to be is at that place between the overspenders and the cheapskates. People who know what’s truly important to them and aren’t afraid to spend money on it enjoy a higher quality of life than people who spend themselves into debt (adding a lot of stress and challenge to their lives) and people who never spend a dime (missing out on things that they truly value in life).

What are your central values? What’s really, truly important to you? Give yourself some permission to spend in those areas without worry – but then lock down the ship in the other areas of your life.

Continue reading The Other Side of the Frugality Fence …

From The Simple Dollar.

Never Eat Alone: Expanding Your Circle

This is the eighth of sixteen parts of a “book club” reading and discussion of Keith Ferrazzi and Tahl Raz’s Never Eat Alone, where this book on building a lifelong community of colleagues, contacts, friends, and mentors is teased apart and looked at in detail. This entry covers the fifteenth and sixteenth chapters, “Connecting with Connectors” and “Expanding Your Circle,” which appear on pages 105 through 127.

One of my old friends, Darwin, is a connector. He’s simply one of those people who knows lots of other people and often knows exactly who to call in any given situation. He’s also deeply in touch with what’s going on in the community.

In other words, Darwin is the type of person that’s infinitely useful to have as a friend – and because he’s so useful, he tends to attract lots of friends.

Naturally, this ties into his personality. He’s a gregarious extrovert who’s good with names and has a strong sense of tact. That goes a long way toward making the grade.

Still, in the end, there’s something else there – an innate desire to connect with others, perhaps. Even though Darwin and I have very little community overlap at this point, I can still call him up and ask for help if I need it – and if he can’t provide it, he probably knows someone who can.

That’s valuable, any way you slice it.

Weak Ties
On page 129, Ferrazzi cites a 1974 study by Mark Granovetter that explains how the small relationships we build with lots of people – acquaintances, distant friends, members of the same club – really help us:

As a result of the study, Granovetter immortalized the phrase “the strength of weak ties” by showing persuasively that when it comes to finding out about new jobs – or, for that matter, new information or new ideas – “weak ties” are generally more important than those you consider strong. Why is that? Think about it. Many of your closest friends generally do the same work and exist in roughly the same world as you do. That’s why they seldom know information that you don’t already know.

Your weak ties, on the other hand, generally occupy a very different world than you do. They’re hanging out with different people, often in different world, with access to a whole inventory of knowledge and information unavailable to you and your close friends.

I have a ton of weak ties in the blogging community. I send them emails every once in a while, read their blogs (and comment regularly), and link to them in my weekly roundups and on my sideboard. If they ever visit the mid-Iowa area (which simply isn’t a hotbed of blogging, other than a few moderately well-known very conservative political bloggers), I usually will go out and have a drink or a meal with them.

Yet, time and time again, when I’ve had a major project and I’ve needed help, I’ve been able to tap this community. I have dozens upon dozens of people I can write to for suggestions when I’m traveling, for ideas for an upcoming book, for a guest post in a pinch, and for getting the word out about anything big I’m doing (like a new book).

These weak ties are a big part of the success of The Simple Dollar. I’d call all of these people my friends – but they’re not close friends. We share passions, but are separated by distance and a lack of a long history with each other.

That doesn’t mean they’re not valuable – they are, and I’m quite happy to help them when they ask. They’re just simply “weak ties” – and I’ve found that, time and time again, a pile of “weak ties” can be more helpful than just a few strong ones.

I Don’t Want to Do This
On page 130, Ferrazzi makes a case as to why you probably shouldn’t want to be a “super connector”:

[...] what’s most important is developing deep and trusting relationships, not superficial contacts. Despite Granovetter’s research, I believe friendships are the foundation for a truly powerful network. For most of us, cultivating a lengthy list of mere acquaintances on top of the effort devoted to your circle of friends is just too draining. The thought of being obligated to another hundred or so people – sending birthday cards, dinner invites, and all that stuff that we do for those close to us – seems outlandishly taxing.

Only, for some, it’s not. These people are super connectors.

I’m not a super connector. I’ve probably got more connections in my address book than the average person, but I’m far from the level of many people I know. Nor do I really want to be – I’m simply not outgoing enough and the thought of adding hundreds more cards to my Christmas card list seems painful.

Instead, I’m happy with the set of close friends and the larger set of “weak ties” that I have. I don’t feel a strong need to focus on building stronger ties with all of those “weak tie” folks – not that I dislike them, but that there’s some factor (usually distance) that makes building a stronger tie more difficult.

So, for now, I’ll focus on just keeping those relationships healthy – and occasionally adding a few more weak ties or building a new deep relationship.

If You’re Not A Super Connector…
… then what should you do? Ferrazzi summarizes it clearly on page 137:

In one word: connect. In four better words: connect with the connectors.

As I mentioned at the start, one of my friends is clearly a “super connector” of sorts. I have a few other friends who are also very strong connectors, each with surprisingly little overlap with each other.

What I find is that these people tend to be particularly valuable friends. By default, if I need help with some fairly non-personal area of my life, they’re among the first ones I turn to, simply because I know they have access to answers.

It’s well worth your time to figure out the people around you who are exceptional connectors – and befriend them.

Finding a Partner
What if you don’t know any “super connectors” but want to meet lots of new and interesting people? One effective way to do it is to find a partner of sorts – someone who also wants to meet lots of new and interesting people. A peer in your workplace, perhaps. On page 139, Ferrazzi lays it out:

The most efficient way to enlarge and tap the full potential of your circle of friends is, quite simply, to connect your circle with someone else’s. I don’t think of a network of people as a “net,” into which you wrangle contacts like a school of struggling cod. Again, it’s like the internet, an interconnecting series of links in which each link works collaboratively to strengthen and expand the overall community.

Such collaboration means seeing each person in your network as a partner. Like a business in which cofounders take responsibility for different parts of the company, networking partners help each other, and by extension their respective networks, by taking responsibility for that part of the web that is theirs and providing access to it as needed. In other words, they exchange networks. The boundaries of any network are fluid and constantly open.

To put it simply, Ferrazzi is advocating meeting the friends of your friends.

This actually is a great way to meet new, interesting people and build new friendships. Accept invitations to events where you know some of the people – and those people know the rest of the people. Then, encourage the people you know to introduce you to the people you don’t.

You can facilitate the same thing yourself by hosting a party where you know all of the guests, but some of the guests may not know each other. This allows you to introduce them to each other and perhaps provide the foundation of a new, useful friendship between two people you’re concerned about.

A “Shared” Party
So how do you utilize such sharing? On page 140, Ferrazzi offers a great example of a dinner party:

“Lisa, let’s share a few months of dinner parties. You hold a dinner party at the Bel-Air and give me half the invite list. Then I’ll hold one of my dinner parties and give you half of the list. We’ll split the tab for each event, saving each of us a bundle of money., and together we’ll meet a lot of new, exciting people. By cohosting the events, we’ll make them that much more successful.”

Co-hosting parties almost always results in an interesting mix of people, as both hosts are drawing on their circle of friends which often have little overlap. This provides a great opportunity for you to meet these people, plus have the opportunity to build new relationships between the guests, many of whom won’t also know each other.

To some this seems uncomfortable, but in practice, it goes surprisingly well. All of the guests are in the same boat – they know one of the hosts. This provides a very nice conversation opener with people – you’re in the same situation, so you can talk about the gathering – and each other – from a similar perspective.

I’ve been to two gatherings like this and each time I wound up building a few new relationships out of the event. That’s worthwhile, if you ask me.

Never Forget…
A good point of advice comes on page 141, something that applies very well to all social situations:

Never forget the person that brought you to the dance. I once mistakenly invited a brand new friend to a party without inviting the person who introduced us. It was a terrible mistake, and an unfortunate lapse of judgment on my part.

This is an important key to remember for your own benefit, because the person that brought you is often the person who is most effective at introducing you around and facilitating your friendships. Until you’ve established a good relationship on your own, it’s always good to have the “person in the middle” available.

On the flip side, it’s very good to be that “person in the middle.” If you are, that means you’re adding value to both people’s lives by introducing them both to someone that they might value. If their friendship takes off, their impression of you will only grow.

Whenever I have a chance to introduce people who I think might hit it off, I always take that chance. I don’t try to set up dates or anything, but I do make an effort to make sure they know each other. If they click, everyone’s a winner.

On Wednesday, we’ll tackle the seventeenth and eighteenth chapters – “The Art of Small Talk” and “Health, Wealth, and Children.”

Continue reading Never Eat Alone: Expanding Your Circle …

From The Simple Dollar.

Business Card Doodles

Perhaps the most well-known post in the history of The Simple Dollar is Everything You Ever Really Needed to Know About Personal Finance on the Back of Five Business Cards. That article was borne out of my attempt to summarize my views on personal finance down to five small illustrations – and it was a big hit.

Whenever I go to meetings, I tend to wind up with lots of business cards. Most of those business cards come from people that are just trying to hand cards to everyone – and I have no interest in contacting those people, ever. Instead of chucking them, though, I usually save them in a pocket in my laptop bag, and I’ll often pull them out when there’s an opportunity to doodle or an idea comes into my head. The backs of business cards make nice little spots for doodles and short notes, so I take advantage of it.

Sometimes, those doodles are really pointless – swirls and the like. Those cards end up in the trash.

At other times, I’ll jot down a phrase or an idea or a picture that succinctly nails some idea that’s floating around in my head. Those are the cards I hold on to. I stick them back into another pocket in my bag and go through them every once in a while. After years of doing this, I have a big pile of them.

The other day, I was searching through my bag for a computer memory stick when about half of these cards popped out all over a table. A friend of mine was standing there, picked up a few, and leafed through them with a smile on his face. He laughed at the last one, then scooped up a bunch more and browsed through them. I didn’t really mind too much.

After going through all of them, he said, “Some of these are great. You ought to pick out some of the best ones and share them with your readers. Seriously.”

So I’m following up on his suggestion and presenting ten of the business card doodles I particularly like. You’ll notice that some of these relate quite directly to earlier articles on The Simple Dollar – and some are completely out there on their own.

Enjoy. If this is a big hit, I may post another batch someday. If not – well, it was a noble experiment. Big props to Gapingvoid and xkcd, both of which inspire me with their similarly spartan drawings.

Oh, and feel free to print off any of these and do whatever you want with them. If you want, remix them, redraw them – whatever. If they inspire you, that’s all that matters.

Dearie

I Hate Work.

Don Draper on Nostalgia

Jay-Z

More or Less

Microsoft Card Flipside

Choices

I’ve Got a Plan

Lemon

Diversification

Continue reading Business Card Doodles …

From The Simple Dollar.

The Sleeping Fox Catches No Poultry

I love reading essays, and I have a collection of essays that have truly inspired me and made me think. Among these is Benjamin Franklin’s classic The Way to Wealth – something I often read when I need a piece of financial inspiration. If the circa-1750 language is rough on your eyes, here are the principles summarized well by Art of Manliness.

Just a few days ago, I read The Way to Wealth again. I was inspired to read it by our survival of the “summer of low income” – I made a tough choice to switch my advertising revenues for The Simple Dollar that resulted in basically no income during the summer, but we made it through to the other side with little problem.

As I was reading through The Way to Wealth, one phrase really stood out at me this time:

The sleeping fox catches no poultry.

What exactly does that little phrase mean in terms of our modern lives? I see it as a call to five things.

It’s a call to be alert. Our world is full of opportunities. Sales. Small investment opportunities. People trying to get rid of things. New jobs. New careers. Love interests. Friendships. Ideas. Purely lucky events, like finding fifty dollars in a parking lot. Every day, we’re brushed with many of these things. If we’re alert, we can see them – and if we choose to, we can take advantage of them, jumping in with abandon. You’ve got to keep your eyes open and see the world as a field of blossoming opportunities.

It’s a call to have resources in reserve. Of course, many of those opportunities are hard to pluck if you don’t have anything to pluck them with. It’s incredibly useful to have some money in reserve. However, money is just one of many resources that’s useful to have in reserve. Do you have relationships you can tap for advice or other things? Do you have time – are you not booked to the maximum with no flexibility in your schedule? Do you have patience to wait for good things to come? Do you have skills and talents that you can apply and share? Resources mean more than just money – much more.

It’s a call to know what you want. The fox sleeps outside the henhouse because he has a hunger for chickens. What are you hungry for? What are your passions? Figure them out and follow them, because when you’re chasing your passions, you’re showing others – and yourself – that this is a life direction that you want. You see more opportunities because you’re passionate, and you’re able to follow up more often because of the knowledge and insight you’ve picked up chasing your passions.

It’s a call to be aggressive. If you’re sleeping, you’re letting the world pass you by. Instead, seek out the opportunities in life. Instead of glancing at that yard sale, stop there. Instead of debating whether to pay $35 for that oak desk, offer $20 for it. Instead of thinking how fantastic that job would be, ask for it. Learn how to be assertive and go after the things you want.

It’s a call to get out there and DO something. Today.

Are you the sleeping fox? Or are you out there, alert, aware, drawing on all of your resources, and catching those hens that you hunger for?

Continue reading The Sleeping Fox Catches No Poultry …

From The Simple Dollar.