Strong Considerations During Career Transition

No matter how hard we try, we all inevitably face career transition. Having had experience with my fair share of career transition, I thought I’d share some of the things that successful career-changers have implemented…

Podcast Details

Podcast Title:  Strong Considerations During Career Transition

Podcast Series: Financial Literacy Boot Camp

Link to Show Episode

No matter how hard we try we all will be inevitably faced with a career transition–whether that be within the same company but a new position, a new company altogether or a complete career change and the ever so famous “starting your own business”. Having had my fair share of career transition I thought I’d share some of the things that successful career-changers have implemented.

Here’s a list for your “consideration”…

They consist of the following:

Consider Cash Flow
This is what will kill a new business quick if you are an entrepreneur. And it is not necessarily your business expenses, but your personal living expenses [that don’t stop] when you are trying to get a new venture off the ground.  Or perhaps you are going to a high base salary to a more commission based job.  Whatever the scenario, you’d do well to have good cash flow management strategies in place prior to your transition. A good rule of thumb for your bank account is to have 3-6 months in living expenses. This can be more but not less.

Consider Your Company Benefits
If you split this into 2 categories–current considerations and future considerations–you might think of things like company benefits such as medical care as something to consider in your career transition. How similar is the coverage between Company A and Company B?  If this is misunderstood, you can be leaving benefits on the table.   In the future consideration camp, consider “deferred compensation” and 401(k) accounts as things to try and maximize without leaving much behind.  A lot of people leave the money in the plan because they don’t know what to do with it but this is not the best choice in most cases. Another thing could be vested shares of stock or options or other types of incentive pay. These all should be carefully reviewed for the ramifications of you leaving or transitioning from the company.

Consider Your Biggest Asset–Your Home
Buy/Sell/Rent my home?
Check out another version of this explanation from my Facebook post.
One of the best financial decisions I made before starting my company was to refinance my home mortgage from a 30 yr loan to a 15 yr loan. This freed up some monthly cash flow and ultimately was the best decision for me and my family based on our long-term plans. I’d highly recommend reviewing your long-term housing plans prior to career transition to see if it makes sense to find a way to reduce interest, make improvements, etc before you take a pay cut.  I often get clients caught in whether they should rent, buy or sell when they are forced to move to a new city. Well, there is some math to this. If you decide to rent out [a previously purchased home], consider if the all-in cost of renting will be less in what you could charge. And if so, is that difference big enough for you to become a full-time landlord or pay someone to manage the property. If not, save the land lording for a game of Monopoly and look to sell your home.

What if you are upside down?
When you are underwater on the mortgage, it may be best to just rent our previously purchased home because you have no other choice.  But if you’re in a career that has you moving frequently and you haven’t purchased a home, you may consider renting until you get more stationary. Believe me, I know the hassle more than most being a military brat, but at some point, you have to be smart about your finances. And buying and selling homes without making any money is not a smart financial transaction and it will negatively impact your net worth.

Consider Your Mate
Hopefully, it goes without saying that if you are in a marriage relationship, you need to get your spouse’s support on any move.  If you want to add unnecessary stress to your relationship, just ignore my advice here.  Having been married for over 20 years, there hasn’t been any major move I’ve made in my career without the support of my wife.  When things are not looking rosy, you’ll need the support of your significant other in those times especially.

#financialplanning #careertransition #newjob #finance #financialadvisor #financialtips #financialadvice #episode55

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About Me:
Dominique Henderson, CFP® is founder of DJH Capital Management, LLC., a fee-only, registered investment advisory firm specializing in comprehensive financial planning and wealth management.

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How Do the Rich Really Get Rich?

Today we cover a subject that nearly everyone is interested in and that is getting rich. And more specifically, how that process happens. I provide the “Cliff Notes” version of the actual mechanism on how wealth is generated.

Podcast Details

Podcast Title:  How Do the Rich Really Get Rich?

Podcast Series: Financial Literacy Boot Camp

Link to Show Episode

What is Systematic Risk?
So there is a term called systematic risk. And I have to cover this because it will give context on “how you get rich”. Systematic risk is the risk inherent to a “system”. Think of investing in the stock market and the risk that comes with investing in equities.  There are risks inherent to that type of investment that are unavoidable and non-diversifiable. This would be defined as the uncertainty associated with investing in this system.

This is not to be confused with “systemic” risk which is risk similar to the collapse of 2009 where subprime mortgages almost took down the entire financial system. So if you invest in a system (e.g. commodity, stock, bonds, Bitcoin, etc.) you will have systematic risk. Lowering your total systematic risk will be a function of you accessing the types of risk, isolating them, and attempting to mitigate each individual risk. This is nearly impossible which is why it is inherent to the system.

What is Nonsystematic Risk?
Which now brings me to non-systematic or unsystematic risk. This is risk not inherent to the system but instead is very specific and is able to be diversified.  If you were an Enron employee in the early 2000s and most or all of your 401(k) was in Enron stock you have both systematic and nonsystematic risk, the latter due to the lack of diversification in your portfolio.  Nonsystematic risk can always be reduced or eliminated by spreading your investment dollars across multiple asset classes.

So How Do the Rich Rreally Get Rich?
Well, in short, they have a lot of nonsystematic risk in their portfolio. They have very concentrated positions in their portfolios. They usually use leverage to magnify their concentrated bet also.

Is this safe…?   It totally depends on the person.

In Ashvin Chhabra’s book, The Aspirational Investor, he has a chapter entitled: “How Do People Become Very Wealthy?” he talks about the Forbes 400 list and the 4 categories of wealth that comprise the list.

1) Business Owners comprise 60% of the list
2) Financiers comprise 20% of the list
3) Inheritors comprise 12% of the list
4) Real Estate Veterans comprise 8% of the list

#financialliteracy #financialadvice #financialplanning #forbes400 #wealth #rich #money #episode54

Helpful Links:

About Me:
Dominique Henderson, CFP® is founder of DJH Capital Management, LLC., a fee-only, registered investment advisory firm specializing in comprehensive financial planning and wealth management.

Sound bumps provided by www.bensound.com

Listening…The Advisor’s Best Tool

What is the financial advisor’s greatest tool? Hint: You have two ears, but only one mouth.

Podcast Details:

Podcast Title:  Listening…The Advisor’s Best Tool
Podcast Series: Financial Literacy Boot Camp

 

The latest research suggests there are:
  • over 400,000 advisors in the US
  • over 164MM working adults (26-65) or “potential clients”
Based on these numbers, every financial advisor would have about 400 families to serve, and everyone wanting financial services would have an advisor and every advisor that wanted to serve clients would have plenty of clients to make a good living.

Factors disrupting this Utopian like scenario would be…
  • DIY Investors (that will likely never hire an advisor);
  • Robo Advisors (that will absorb some of the need for investment management service specifically);
  • there are bad advisors that don’t deserve 1 client let alone 400;
  • there are good advisors that on their best day can’t serve that many clients
ThinkAdvisor asked Alan Alda (M.A.S.H actor and former financial advisor) the following question:
TA: Why is it critical for financial advisors to communicate well?
AA: “It’s important, not so you can sell people something they don’t need but so you can help them see what they do need if you understand their goals and how they can reach them. If they don’t understand you, your clients are in danger of leaving the way I had to leave my accountant when I couldn’t understand him because he was talking in jargon — for years and years.”

My point on his comments…
Jargon alienates people.  When I go to my doctor I expect him to break down in simple terms what’s going on.  Since he’s a good physician he should be able to use all the medical terms (as if he were with peers) and then switch to a good “bed side manner” as if he were with patients.  To me, this is the mark of a good physician.  He understands that my goal is not to become a doctor, and therefore, I don’t need all those fancy terms, I just want my problem fixed.  Same way with a financial advisor.  Clients just want their problem fixed and they want to know that you can help them.  No need for fancy terms, just solutions.  You can only do this when you listen.
Alda also mentions that some clients will be afraid to ask “what does that mean” when and if they don’t understand something.  Here’s the power of being able to conduct a dialogue with clients versus a monolog.  In many cases, I’ve seen where the advisor is talking so far over the client’s head that there is a disconnect. This only causes the relationship to drift apart eventually and unmet expectations ensue.

TA:  Generally, how does one relate better? 

AA:  “It doesn’t involve staring at someone in the eyes. It involves taking in the whole person. Some research I helped get done suggests that there’s a real advantage in increasing your empathy [stepping into the other person’s shoes] by paying close attention to who you’re talking to, trying to figure out what they’re feeling by observing their face. So there’s a little science suggesting it really does matter.”

My point on his comments…
So this is a really salient point because people really don’t care how much you know until they know how much you care.  Any service professional has the duty to listen to the client and place his or her self in the client’s shoes.  After all, the client is coming to you with a problem because they think you have a solution.  We do well to fully understand the problem before inserting a solution.  I talked about “diagnosing” on Maven’s Keys recently.  So I’ll use the physician analogy again.  Any good physician is going to first diagnose the malady prior to prescribing medicine.  Here’s where the experience factor for advisors really comes to play because after working with so many clients you will begin to diagnose more accurately after listening to the client.  Unfortunately, this isn’t necessarily taught in classrooms, and even when it is, it has to be practiced constantly for the advisor to become good at it.

#FINANCIALLITERACY #FINANCIALADVICE #FINANCIALPLANNING
#LISTENING#CLIENTSUCCESS #ADVISOR SUCCESS
#EPISODE53

Helpful Links:

About Me:
Dominique Henderson, CFP® is founder of DJH Capital Management, LLC., a fee-only, registered investment advisory firm specializing in comprehensive financial planning and wealth management.

Sound bumps provided by www.bensound.com

Tools for Your Personal Development

These are things I’ve learned over years of working with individuals that have had great success both in business and personally. These are 4 anecdotes for personal development…

Podcast Details:

Podcast Title:  Tools for Your Personal Development
Podcast Series: Financial Literacy Boot Camp

 

So on today’s show, I wanted to wind-up this series on “Solutions to the Career Transition” by talking about some things I have come across that will be helpful in your personal development.

Understand the difference between the necessary and the important…

  • Very successful people say “no” a lot more than they say “yes”
  • Very successful people prioritize things that are necessary (essential to life or their purpose) and focus on those things.  Important things (relevant, but not essential) receive less attention.  This is key in avoiding distractions and maintaining your focus.

To get a “return” on yourself, you have to “invest” in yourself…

  • Very successful people have invested and continue to invest large amounts of time into their personal development.  This is done consistently and intentionally.
  • Personal development is in direct correlation to your personal wealth. If you aren’t as wealthy as you want to be, then spend more time developing yourself.

Always be accountable to a higher standard…

  • Very successful people don’t allow their character to limit their opportunities.  Opportunity won’t take you where your character can’t sustain you…  You can’t be “two-faced” while rising to the top…not for long.
  • Very successful people have people around them that they trust and respect that call out their “blind spots”.  Not being aware of blind spots causes some of the worst traffic fatalities.  This is also true for career or personal failures.

Your energy for anything will be tied to how passionate you are about it, so FIND YOUR PURPOSE!

  • Very successful people have found their reason for being on this earth and this affords them the highest level of fulfillment/contentment you can find in life.  If you chase money, your level of contentment (if attained) will be fleeting, but if you chase a passion that is tied to helping others, you will always be fulfilled.
  • Very successful people realize that we as humans are designed to be in community with other people because a natural energy transfer comes from those interactions.

#financialliteracy #personaldevelopment #careertransition #success #episode52

Helpful Links:

About Me:
Dominique Henderson, CFP® is founder of DJH Capital Management, LLC., a fee-only, registered investment advisory firm specializing in comprehensive financial planning and wealth management.

Sound bumps provided by www.bensound.com

Solutions to the Career Transition Problem: “Developing a Millionaire Mindset” with Brandon M. Williams

This week on the show I bring on another former NFL athlete that has made a wonderful transition from the gridiron to the business world. Here’s my conversation with Brandon M. Williams.

radPodcast Details:

Podcast Title:  Solutions to the Career Transition Problem: “Developing a Millionaire Mindset” with Brandon M. Williams
Podcast Series: Financial Literacy Boot Camp
(Video and illustrations available on our YouTube channel here.)

Link to Show Episode

  • (3:07)–Brandon’s background and journey in college and professional football
  • (6:50)–Brandon’s transition from football to broadcasting; his mindset when leaving NFL and not reaching all his goals while playing in the NFL
  • (11:45) –Brandon’s perspective on wealth management and what drove his decision
  • (16:40)–Brandon takes us inside the NFL locker room;
  • (23:10) –Brandon and his passion for financial literacy and his partnership with Wisconsin’s new financial literacy legislation
  • (31:25) –Brandon’s life advice: “Lead with your life”.  HAVE VISION, BE INTENTIONAL WITH YOUR TIME, LIVE WITH STANDARDS
  • (40:20) –Brandon’s key to “developing a millionaire mindset”

#financialliteracy #athletetransition #athleteeducation #realtalk #careertransition #millionairemindset #moneylessons #NFL #BrandonWilliams #WisconsinFinancialLiteracyBill #episode51

Show References

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About Me:
Dominique Henderson, CFP® is founder of DJH Capital Management, LLC., a fee-only, registered investment advisory firm specializing in comprehensive financial planning and wealth management.

Sound bumps provided by www.bensound.com

Solutions to the Career Transition Problem: Discovering Passion from Adversity with Ernest Owusu

This week I spend some time with former NFL defensive end, Ernest Owusu, to talk about life during and after professional sports.

Podcast Details:

Podcast Title:  Solutions to the Career Transition Problem: Discovering Passion from Adversity with Ernest Owusu
Podcast Series: Financial Literacy Boot Camp
(Video and illustrations available on our YouTube channel here.)

 

  • (1:25)–Ernest’s journey into football, his perspective as an undrafted free agent competing in the NFL and what it felt like when he started to realize the “business” part of being a player in the NFL;
  • (8:58)–the transition process he went through when an injury related to his sickle cell trait caused his premature exit from the league and what some of the crucial decisions he made during that time;
  • (11:05)–we also talked about his money habits (and where they came from) and the discipline he employed while being in the spotlight of the National Football League; and
  • (15:15) –we talk about what Ernest did when coming out the NFL and what he feels are important traits to develop around networking
  • (19:55)–how he used a tragedy in his life to find a real passion around becoming an advocate for persons dealing with the sickle trait disease and all he’s doing now to build awareness around that subject within the athletic community;
  • (25:25) –Finally, we talk about some of the most important life lessons has gleaned from playing in the NFL and his advice to younger athletes

 

#athletetransition #athleteeducation #careertransition #finlit #moneylessons #NFL #CFL #ArenaFootball #NCAA #sicklecell #ErnestOwusu

Sign up for more our free newsletter with financial updates like these!

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About Me:
Dominique Henderson, CFP® is founder of DJH Capital Management, LLC., a fee-only, registered investment advisory firm specializing in comprehensive financial planning and wealth management.

Sound bumps provided by www.bensound.com