I would typicaly pull my money out of the market and sock it away someplace safe. I have neither the time nor the inclination to learn to become a trader. I believe my time is better spent growing my business than trading stocks!

We can’t rely on that option this time. IndyMac’s failure is the first of the bank failures. This casts doubt on the safety of our deposits.

I can rely on FDIC…or Can I?

I’ve always known that FDIC will protect my depostis. There has always been a lingering doubt on what that means. Is the $100k protection per account, per bank, or per person? What do I have to do to get my money after the failure?

Suze Orman wrote an article today on FDIC insurance. I recomend you read it to better understand what is involved. People are losing a lot of money on their deposits at IndyMac because they didn’t take the time to learn the rules. Some of the basics are:

• One name on the account:$100,000 per person per bank. What about two accounts at the same bank? The $100k total limit still applies.
• Joint account: $200,000 per joint account. This is in addition to the $100k per individual account.
• IRAs: Your bank IRA (why would you have an IRA through a bank?) is covered up to $250,000. Note: this is only cash instruments. No stocks or mutual funds.
• Trust/Pay on Death Accounts: complicated. Check with the FDIC and your advisers.

I again recommend you read the article and check your accounts to make sure you are covered. Also remember that I am not a financial adviser or planner. Please consult your financial professionals before you make any decisions.

As a result of this we had a surge of trafic and our reader base grew significantly. It was also a lot of fun interacting with such a large audience.

Welcome New Subscribers!

Our growth has been strong (38% growth per week). Add in yesterday’s subscriber surge and we have a lot of new people. Since we have so many new readers I thought it would be a good time to introduce ourselves.

We started Wealth and Wisdom because we saw a gap in the market-we experienced it ourselves! We know that entrepreneurship isn’t for everyone. That being said it can be the best way to wealth, a balanced life, and security. Also, many of the same principles apply whether you are an employee or the employer.

We were looking for one source that could provide:

• Business and entrepreneurial information and advice without hype or scams.
• How to build a business that supports the lifestyle you desire.
• How to grow as a person and become more effective.
• How to balance family, business, and your personal life.
• How to go beyond personal finance 101. Now that you are debt free and have a savings what do you do?
• How to protect your assets.

And Wealth and Wisdom was born…

Help us serve you better

We firmly believe a business should be focused on it’s customer. Everything it does needs to support it’s customers and make their experience better. This principle is what our blog and the companion website are founded on.

We welcome your feedback and suggestions. An active community is much more fun and productive. Your comments help draw out the finer points that may have been missed in the initial post. Your unique perspective can help show an issue from a different light. It also helps up develop to better fit your needs.

If you get a chance please take a moment and stop by and read Network Your Way to Job Security. Take a moment to look around as JD has put together a great blog on personal finance.

Visitors from Get Rich Slowly

Welcome to Wealth and Wisdom. Please take a look around and make yourself at home. I’ve picked out some articles you might find interesting:

How to respond when your family asks for money

Three paths to financial abundance

11 Steps to the Job of Your Dreams

The Real Housewives of Orange County…In Houston Texas

If you like what you see leave a comment and let me know. I’m pretty good at responding to all comments though it may take a few hours. I would also like to invite you to join our blog for free. You’ll save time by having our articles delivered to your RSS reader. Don’t have an RSS reader? Feel free to sign up for our email subscription at the top of the page.

Visitors from My Super-charged Life.

Welcome to Wealth and Wisdom! I’ve listed a few of my articles below that you might enjoy. Feel free to read them and any other articles that catch your interest.

• How to respond when your family asks for money
• Recessionproof your sales
• 8 Lessons You Can Learn From Winning
• Three paths to financial abundance
• 11 Steps to the Job of Your Dreams
• 7 ways losers win

If you like what you see please let me know by leaving a comment (I do respond to most). I would also like to invite you to join our blog for free. You’ll save time by having our articles delivered to your RSS reader. Don’t have an RSS reader? Feel free to sign up for our email subscription at the top of the page.

For the Smith family holiday weekends usually result in a significant project. While for some people this is an imposition we enjoy it. Having a purpose and accomplishing something major is a lot of fun. So for the last few days we’ve been tearing out tile and getting ready to install hardwood flooring. I apologize if I’ve been less attentive this week but a man must have his priorities. This week getting my house back together is job one!

Working with Uncle Sam

I’m not a big fan of government work. Oh, I know there are people that make a lot of money selling to the government. I just don’t have the patience for red tape. I spent over a decade fighting it while I served in the Navy. I didn’t like it then and I like it even less not. That being said, I am looking at using my connections to work with veterans and our service men about to enter the civilian community. I like the idea of making a profit while helping the men and women that protect our liberties.

Recently Ben Jones at Ben Means Business published part 3 of his government contracts series. If this is an area you are considering I suggest you check his blog out. His hands on experience as a government contractor can save you a lot of time and energy.

• Guide to Getting Government Contracts: Part 1
• Guide to Getting Government Contracts Part 2
• Guide to Getting Government Contracts Part 3

Today would also be a good time to reflect on your independence. What are you doing to free yourself from the daily grind? Have you started a business or are you still on the sidelines? If not take action today. Start small and let it grow into something profound.

If you are already out on your own, what have you done to allow yourself to enjoy the fruits of your labors? Have you set up systems and procedures so you can begin to outsource or hire employees?

Entrepreneur/Business Articles

1. Ben Means Business
   Home Biz Blues
2. Business Pundit
   The Format Wars: Sony Proves that It’s the Player, Not the Game, That Wins
   How Failing Helps You Win
3. GetEntrepreneurial
   Your Niche, Your Ideal Client and Your Message
   Do You Have The Courage To Be Indiana Jones?
   Keep On Your Track
4. Small Business CEO
   Seeing Your Invention Thru From Start to Finish
5. Small Business Trends
   5 Services to Streamline Your Business Operations
   Are You Hunting or Harvesting?
   Downsized Into Entrepreneurship, the 21st Century Way
6. Business Opportunities Weblog
   Improve Your Listening Skills
7. Successful Blog
   The Pendulums, The Level, The Relationships and Commerce
8. Startup Nation
   Overcoming Failure to Launch
   Five mistakes people make with startup businesses
9. Young Entrepreneur
   Is College Worth it for Entrepreneurs?

Personal Development Articles

1. Lifehack
   Don’t Bring Me Answers, Bring Me More Questions!
   4 Firefox Add-Ons to Ease Your Online Life
   Why Haven’t You Organized Your Passwords?
2. My Super-Charged Life
   11 Ways To Make Your Apologies More Meaningful and Effective
   Resist Change At All Costs Even If It Is For The Better

Personal Finance Articles

1. Get Rich Slowly
   We’re All Going to Die Someday: Making Informed Insurance Choices
2. I Will Teach You to Be Rich
   “But I earn $300/year from switching banks!”
3. Moolanomy
   REAL Wealth Building Framework
   Are We Financially Worse Off Than Our Parents?
   Are You Financially Healthy? The 5 Stages
   

Blogging and Just Plain Cool

1. The Blog of Tim Ferriss
   How to “Peel” Hard-Boiled Eggs Without Peeling
2. ProBlogger
   Why I Use Aweber To Deliver My Newsletters

QBQ! The Question Behind the Question

John G. Miller. Putnam Publishing Group 2004, Hardcover, 128 pages, $19.95

Personal responsibility isn’t a new topic. It is a core topic for every self help and business guru’s system. Whether you are an entrepreneur or trying to make changes in your personal life responsibility is a key to success.

In QBQ John Miller takes a unique approach to this old topic. He looks at the questions we ask continuously throughout the day. Some we ask out loud: “When are you finally going to finish your project?” Some we ask ourselves: “Why does my boss always say one thing and do another?”

These questions are at the root of personal responsibility. A powerful question leads to action and improvement. A weak question leads to blame and procrastination. By becoming conscious of our internal and external dialog we become more effective. We become change agents. We become better leaders.

In a nutshell we make better choices moment to moment by asking better questions.

3 Guidelines to good questions

• The question must begin with a “what” or “how”
  • Leads to solutions.
  • Don’t ask why: Why is the word of victims. Why me? Why didn’t he finish on time? Why doesn’t he spend more time on my needs? This does nothing to solve the problem. It only adds to stress and worry.
  • Don’t ask when: When implies we have no control over the schedule. This leads to a loss of control and to procrastination.
  • Don’t ask Who: Who is the language of blame. You are basically looking for a scapegoat and it leads to finger pointing. John uses the old phrase “a poor sailor blames the wind.” This could be changed to fit any situation. For example, “a poor manager blames his workers.”
• The question must contain an I
  • I can change only me: The key is to focus on what you can control. Your circle of influence begins with yourself. This is where you have the most influence. You can’t change others. You often can’t control events. It is only our thoughts and actions that we can really control.
  • Take ownership of the situation. Fix the problem and stop trying to blame others.
  • Have integrity: your actions and words must match. This means that you must do what you are asking of your employees. Also, what you say in the office and in your personal life need to match. If you can’t, you either need to enact change or find another place to work. Believe or leave. You must have integrity. What you say in the office and away need to match.

• The question must focus on action
  • People avoid action due to the perceived risk. Remember, there is risk in inaction as well.
  • Action solves the problem and moves things forward.
  • Action leads to learning and growth.
  • Action leads us toward solutions while inaction holds us in the past
  • Action requires courage while inaction is caused by fear.
  • Action builds confidence while inaction destroys it.

What if I’m not in a leadership position?

Leadership begins with personal accountability. He asserts that leaders can be found at all levels. It is something we see in sports all the time. There is often a critical player that helps make everyone else better. It is often a mid level role player, not the star or the team captain.

We see the same things in the businesss world as well. Look in any group and someone always stands out. This person is usually the go to guy (or gal) in the department. The interesting thing is that senority is not the main factor. It is the person who tends to find solutions.

In conclusion

I recommend this book to anyone looking to be more effective or who wants to be a better leader. All in all this is a well written book. The ideas are thought provoking and can be easily applied to all areas of your life. While it is a quick read John comprehensively covers the topic.

“Joe, you look awful.”

“Wow, is that a good way to greet a friend?” Joe asked me. “But now that you mentioned it, I haven’t been sleeping well.”

Joe then proceeded to tell me about his family situation and the stress it was causing. His brother wasn’t able to pay the rent-again-and came Joe for a loan.

“I’m getting tired of always having to bail him out. I love him, but loaning him another grand won’t solve his problem. And I’m getting tired of everyone assuming that because I run my own business I have money to loan them.” After a bitter chuckle, Joe added “I don’t know why I call it a loan. They never pay me back.”

It wasn’t the first time

Joe and I have been friends for years-heck, he gave me my start in sales! I was familiar with this drama in his family and saw it repeat several times a year. If it wasn’t his brother it was his cousin or uncle. One time their car was in the shop. Another time they were a bit short until payday.

It was like his family thought that because he was an entrepreneur he was their personal bank machine.

The straw that broke the camel’s back

This time things were different. The economic downturn was hitting Joe’s industry hard. He was struggling to keep the doors open, and the last thing he needed was this. In fact, the reason Joe and I were meeting was that I was advising him on his company’s sales and marketing.

Bottom line: he had nothing more to give.

Loaning money to your family is a lose-lose situation

When it comes to family, money, and loans you can’t win. You are a bad mother/son/brother (fill in the appropriate relationship) if you say no. It will poison your relationship even if you say yes. No matter what you do it can tear a family apart.

For entrepreneurs it can be even worse. People assume that just because you own the company that you are rich and that they are entitled. You can easily become their personal bank…or their welfare system.

With this in mind I’ve developed the following guidelines to help deal with the situation. Some sound cold and heartless, but that couldn’t be further from the truth. This is a decision that can have serious consequences. The decision must be based on facts and on what is best for everyone involved. Remember, the best answer is sometimes the one that hurts the most. People often tell me that the best thing that happened to them was that someone told them no. It forced them to grow up and solve the problem themselves.

7 Guidelines when family asks for money

1. Your not the bad guy…

You know the drill. The guilt is being applied. “Just this once…” “Don’t you love me?” You can afford it.” “Blood is thicker than water.” To make it worse other family members are calling you and asking why you won’t help.

You have done nothing wrong. They put you in a bad position, one that you often can’t win.

2. Step back and take a deep breath

The only thing that makes this so hard is that you are dealing with family. With anyone else it would be much easier. When family members ask you for money they don’t use logic. They push your buttons. This sets the stage for a major family crisis.

Now is not the time to make a decision based on feelings. You need to step away and get some space. If they push tell them you need time to think about it. If they keep pushing start asking them questions. This will put the responsibility back on their shoulders. Remember this is their problem. They are coming to you for a favor.

3. Separate emotion from fact

Now I know I’m going to get an earful about this. “It’s your mother. You owe her.” “How can you be so heartless?” “Don’t you love your family?” “Why do you hate your sister?”

Let me put that to rest right now. Decisions based on guilt rarely work out. Don’t be afraid to use decision making tools (I personally love a weighted pro/con list). Feelings and relationships are a factor, but the decision needs to stand on it’s own without the emotions to prop it up.

4. Am I helping or enabling?

This is tough because of the guilt involved. One thing to keep in mind is that often you are only making things worse by handing out money. People need to take responsibility for their own problems. In extreme cases they need to hit bottom before they can start to get better. In these cases the only way to help them is to stand firm.

Now I’m not saying you should always say no. You just need to make a clear headed logical decision that is in everyone’s best interests.

5. What are they doing to solve the problem?

Just bailing someone out won’t solve the problem. Are their expenses exceeding their income? Then they need to take steps to fix the problem. Do they have a gambling problem? Then they need to get help for the underlying addiction.

They need to take responsibility and be willing to fix their own problem. Otherwise this will come up again and again. Each time it will be a little worse.

6. You have the right to say no

Just because it is family doesn’t mean you are obligated to give them money. I hear the argument all the time that you should “honor you parents.” That doesn’t mean you are indebted to them for eternity. Yes you should respect and thank them for bringing you into this world. Just remember that this is a two way street. You deserve the same respect and appreciation as well.

Now most people have parents that gave them love and nurtured them. That is a different story. Then again, most people with loving parents aren’t put in this position.

You have to make the right decision for everyone involved. This needs to be based on facts, not some emotional tug at the heartstrings. If the right answer is no say no.

7. Always a gift never a loan

If you decide giving is the right decision make it a gift. You should never loan money to family. I don’t care if you get the terms in writing, you will never be able to enforce the contract. What are you going to do? Take them to court? I don’t care if they tell you they won’t take charity.

A loan will only poison the relationship. Each time you have to call to collect on the missed payment it will damage both of you. Even if you don’t have to make the call (unlikely) it will always get in the way of your family.

Note: a gift means no future expectations. You don’t have the right to ask for it back. They don’t owe you. You can’t use it for emotional leverage. It must be given freely.

F r u s t r a t i o n

I’ll be the first to admit that this drives me crazy. The worse part is that these are basic areas that would have a significant impact on my life. For example, I have had an enormous problem when it comes to time management. I start most weeks off with a bang, but run out of steam midweek. It doesn’t matter what tool I use. My wife jokes that I own more day runners than the average Franklin-Covey store!

The solution that I didn’t grasp at first

For quite a while I’ve been reading Leo at Zen Habits. Leo is a big proponent of breaking your goals into mini-goals and focusing on them one at a time. Ah, it all seems so clear now, but at the time I had the opposite opinion. I always tried to build mega goals that wrapped several smaller goals into one. Kill two birds with one stone was my mantra. Yet I fell down time and time again.

Then a couple weeks ago Leo posted Autopilot Achievement: How to Turn Your Goals Into Habits.

One thing at a time

When you are making a major change you really are setting many smaller goals. His premise is that we can only focus on a limited number of things at a time. Take weight loss as an example. This is a simple sounding goal, but when you look at what it involves it is really a series of steps:

• Daily exercise
  • Resistance training to build lean muscle mass
  • Cardio/interval training
  • Stretching
• Nutrition
  • Monitor your caloric intake.
  • Eat the right balance of food.
  • Multiple meals
• Stress reduction: stress hormones interfere with fat reduction and increase fat storage.
• Consistency: you need to eat well and exercise daily.

Is it any wonder this “simple goal” is so hard to obtain? It is really more than eight distinct goals!

Turn that goal into a habit

The solution that Leo offers is to break these major goals into what I call micro-goals. You then focus on one goal at a time for three to four weeks until it becomes a habit. Only then do you move onto the next micro-goal and repeat the process.

What ends up happening is that you actually create lasting change in your life. It is easy to maintain a habit once it is developed.

But it takes so long!

This is what kept me from using this technique until now. I understand how it is hard to wait. You see the change you desire and want it now. So you make a major change and hit the ground running. The big question is how long will it last? A day or two? A week? How many times will you make the change only to fall back into bad habits? How long does that take?

It’s a marathon not a sprint

We need to change our mindset from instant gratification to long term gain. On the surface it looks like the slow and steady approach takes too long. It is only when you look to the future-and at our past failures-that we realize how quick this really is.

This is where your goal setting comes in. What do you want to accomplish or become? Break your goal into micro-goals. Prioritize those micro-goals and focus on changing one thing. Wait, this sounds awefuly familiar. This is continuous improvement on steroids!

My change…

For the next three weeks I will be focusing on one thing. I will start each day with a plan. Will I execute that plan? Will I procrastinate? Will I let minor things intrude? These questions don’t matter. Right now I am working on having a daily/weekly plan. I can work on my execution in a few weeks once I’ve developed this habit.

My challenge to you

What one change would have the biggest impact on your life? Is it to eat more consciously? Maybe you need to prioritize your to do list. Do you need to exercise daily? Should you start each day with a plan?

A tale of two companies
The contrast couldn’t be sharper.

Company T had lost it’s direction and was sinking fast. Where sales were once $18M, they ultimately plunged to less than $6M. Where they once set the standard in their industry for customer service, now they were the joke of the town.

Company C was a different breed. It had always been the small respected underdog. At $6M is was a third of company T’s size. Where everyone else in the industry had lost over half their business, they were holding fast and had doubled their customer base. They were poised to exit the recession as a dominant player.

Why was company C thriving in the recession while company T (and the rest of the industry) foundered? They had a strong sales focus. They seized the chance to grow market share. They saw the opportunity to eliminate several bottom feeders that constantly drug down prices.

7 Keys to selling during a recession

1. Go back to basicsWhen things start spinning out of control it is time to reevaluate. What does a good coach work on when his team is slumping? He goes back to basics.It isn’t exciting, but think back to your early days when you were learning sales.Take a deep breath, step back, and look at sales 101.
2. Focus on the customerBusiness starts and ends with your customer. Identify his needs. This becomes the basis for your products/services. No, that doesn’t mean you give away the store. It just means that every aspect of your business needs to support your customer. Anything else is a waste of time and money.Most businesses focus on their systems and expense control. Their criteria for all decisions is making their own jobs easier. Guess what…the customer doesn’t care!
3. Focus on your nicheThis is not the time to try new techniques, find new markets, or launch new products. That is a desperate act that just wastes your time and money. If anything you should actually focus your resources on your top products, services, and markets. Remember, jack of all trades, master of none.Take a minute and define your focus. What is your niche market? What are their needs? What are you doing now to service them? What could you do better? How can you dominate your niche and grow your market share?
4. Increase your sales budgetContrary to what your operations manager says you can’t cut your way to a profit. Business starts and ends with the customer. Yes you need to tighten your belt. Expense control is important. Just be smart where you spend your money. Ask the question “will it grow my business?”Increase your sales expense budget. Spend more on strategic lunches. Give your top salesman a bonus. Reward your sales support team. Thank your top customers for their loyalty and send them a gift.

   Compare this to what your competition is doing. Right now they are reigning in their salesman. In fact, they probably just fired a few! You stand out and can take market share if you are smart.

5. Dump the deadbeatsFire the bottom 20% of your customers. I can hear the screaming now. “We can’t afford to lose any more business.” This is bunk. These customers take 80% of your time for 20% of the income. Cut them loose and spend your resources on customers you can satisfy!
6. Guard your customer baseRight now everyone is hungry. They are eying your customers like a starving wolf eyes a young lamb. Take care of your customer. Give them such value and service that they wouldn’t dream of going elsewhere. Build deep relationships with the key decision makers-remember that the buying decision is emotional. Logic is used to justify the decision.Make a list you your customers and rank them. Focus your time and energy on your stars.
7. Branch out to new accountsThe flip side of guarding your customers is to go on the attack. Remember that your competition is cutting back on spending. They have let a few salesmen go. The remaining salesmen are overloaded and overworked.Make a customer wish list. Look at the competition and identify their top customers to target.