Archive for July, 2010

Negotiation Do’s and Dont’s

How to Negotiate | July 31, 2010

How much time have you given to learning how to negotiate? If you are completely honest, your most likely answer is “none”.

Frankly, most people avoid negotiation whenever possible. Why? They don’t want to “feel bad” asking for a lower price. They don’t want to do the necessary research. They don’t want to feel “confrontational”. Interestingly, in order to purchase things, they are forced to deal with someone who does not “feel bad” about asking an unrealistic amount of money for the product they are selling. I think you can clearly see the mismatch here. One person is attempting to take advantage and another is signing up to be taken advantage of. Do you ever find yourself in either role? Here is some advice – you don’t want to be either person.

It may seem that being the person that takes advantage is the better position, but in truth it is not. It only makes that person feel greedier and more entitled. Eventually, as with all greed, they will succumb financially and emotionally. Bernie Madoff comes to mind. He seemed to be doing pretty well for a time. Well, his time is now up. The best negotiations lead to both parties feeling a sense of value. That is only achievable in win – win negotiating. The objective is never to destroy the other side. It is to work collaboratively with them to reach mutual satisfaction. This may require both sides giving up a few things that they would have liked to have kept. But it is necessary to achieve the significant things that one desires.

If you are married, this story may have a familiar ring. Have you ever sat down with your significant other and had a conversation about a trip, a purchase or a decision that both of you initially disagree on? As you work through the conversation, does it ever occur to you that you are winning the battle and losing the war? Your insistence on “my way or the highway” may eventually break down your partners will to continue. So they give in and you win. Fantastic! Good for you! Next time an issue arises, you’ll go back to the same strategy that “solved” the problem last time. This happens over and over through the years. You always winning and your partner always losing. You find it interesting that they keep coming back when they already know who the boss is. Until one day they don’t come back. New problem. New negotiation. New higher stakes. But this time they show up to the party with a person that negotiates for them. You feel a bit intimidated. So you go and hire your own negotiator. Now both of you have a win at all costs and punish the other person mentality. You because you’ve always played that role. Your ex partner because they are tired of being trampled and want payback. Both parties now lose sight of the real target. A settlement that works for both of you so that you can move on with your life. The attorneys may fuel this fire knowing that you are paying them hourly to hurt the other party. Soon, there is nothing left to split and both parties are left with very little except bad feelings, loads of negativity and tons of emotional baggage to work through.

Do you see how win – win negotiating would be a better avenue for these folks. More importantly, can you see how win – win negotiating may have not only saved this marriage but actually enhanced each partners experience with the other. These people may have truly been in love with each other. Once winning trumps everything, this is the path that you are on. Want to get off that path. Learn to give a little and take a little less. See if that doesn’t help your marriage, your personal relationships and your work relationships. See if things start getting easier for you. And don’t be afraid to ask for help. If you find yourself in this position, you didn’t just land here. Your present situation is a reflection of all of your past decisions, good and bad. Keep the good. Learn to extinguish the bad.

Don’t know how? That’s why I’m here.

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Rule # 5 – Think Positive Thoughts

The Psychology of Money | July 26, 2010

I work with a large cross section of clients. They range from Fortune 500 CEO’s to Artists (some of the artists are doing better than the CEO’s). Remember that, Mom and Dad, when junior likes to draw and doesn’t love calculus.

In any case, no matter what the client’s title is, there is one commonality. The people that are the most positive have more financial success than those that are negative. Now before you go all “of course people with money are more positive than people without money” on me, lets do one thing together. Let’s define financial success. You may have jumped to a conclusion (see rules 3 and 4 for advice about not being reactive or anxious). My definition of financial success is – having a positive relationship with money and meeting your own expectations for where you are financially. Need an example? Lets use a teacher. Do you know any teachers? If you do, do you think they became a teacher to make a ton of money? I can tell you that I have many friends and clients that are teachers and I don’t know any that are flying on their own private plane to their vacation home in the South of France. That said, I do know plenty of teachers that are happy, have a reasonable amount of debt and live in nice homes with a comfortable lifestyle.

The reason? I believe that teachers may be realistic types that have understood for a long time that their career choice comes with many benefits (serving society, positively influencing young people, some time off in the summer) in exchange for an income that is often less than they might earn had they chosen another profession.

The important factor is that most of the teachers that I know love to teach. That makes them happy with their job and lifestyle. As long as they live within their financial means they would be, according to my definition, financially successful.

We can check our math by looking at the other side of the equation. I also have experience with many folks who live in giant homes, drive fancy cars and have every toy you could imagine. They work at a frenzied pace to keep the money rolling in to pay all of the bills that they accumulate. They “work hard and play hard”. Unfortunately, many of them worry constantly, are physically worn down and have no time for many of the things they really want to do. Is this an example of “financial success”? I don’t believe it is. The main reason is that it is difficult to remain positive when you are in this situation. And without positivity there can be no real success.

Today’s rule is simple. Just keep thinking positive thoughts. Don’t worry. If you find yourself always worrying about the same things, maybe it is time to let go of those things in order to make more room for the positive things that you desire. “How am I going to make my car payment?” can be replaced by selling your expensive car and trading down to something that is easier to afford. Maybe you’ll work a few hours less now that you’ve reduced the pressure on yourself. Maybe you’ll start an exercise program with the extra hours or spend more time with your family. That extra time will bring things into your life that no automobile ever could. What if that first step led you to feeling more relaxed and seeing things and people a bit differently than you had before? What if it took the edge off of you?  What if your employees, co workers and customers took notice of your positive change and started responding differently to you? Maybe wanting to be around you a little more. Maybe wanting to do more for you and with you. What if it actually helped your business rather than hurt it? What if you made more money because you were a positive influence on all of the people around you?

That is what I would call “financial success”.

Good luck selling your car! Let me know if you need any help negotiating with the buyer.

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Rule # 4 – Don’t be Anxious

The Psychology of Money | July 17, 2010

Note: The following article is not intended to tell you that it is easy to overcome feelings of anxiety. On the contrary, it is meant to serve as an inspiration to help you take the first step if you are inclined to do so.

There are many definitions of anxiety. There are regular meanings, clinical meanings and personal meanings. They all have one commonality. None of the definitions have any positive meaning or usefulness associated with them.

If you took all of the things that get in the way of financial success and could only get rid of one – anxiety is the one you should choose. My definition of anxiety is: “Fear of the Future”. Anxious thought is always in the future.

“What should I wear?”

“What will they think?”

“Who will be there?”

“How much should I spend?”

Who? What? When? Why? How?

Any time you try to project into the future you are setting yourself up. After living as many years as you already have,  you should now be certain that you have little control over almost anything. So why give it any of your time?

In my practice, I see chronic levels of anxiety. It is present no matter how much or how little someone has. That makes it easy to dispel a lack of money as a root cause of anxiety. For if only lack of money caused anxiety, rich folks wouldn’t be anxious. I find that rich folks are more anxious than poor folks are. So does having money make you more anxious? Maybe. I think it depends on how much of it you spend.

You didn’t come here for a thesis so let me simplify anxiety for you. It’s no good.  And it’s bad for your finances.

Are you anxious? You know if you are.

If you are,  it is possible that you may have forgotten what it feels like to be free. Good decisions, financial and otherwise, come from a free mind.

A free mind is a present mind. Would you like to be free of anxiety? Then live in the present. You heard me. Right now. Live here. In this moment.

How? Well, its simple but not easy.

Frankly, you don’t have to do anything. Just stop thinking. When your mind is without thought, it is free to enjoy the present moment. You won’t miss anything that is happening now while you are thinking of what you will be doing later. And since whatever you think you’ll be doing later is going to be different than you thought anyway, you won’t continue to fantasize your life away. Meditation, guided imagery, tai chi etc. are all good studies to assist you with this. There are many other things you can try as well. Get curious. Try a few things. Enjoy the process!

So what does this have to do with money?

If you are a regular reader of mine then you know the answer.

Everything!

If you start to spend your time thinking about being grateful for what you have, you will see that you probably don’t need much more. You probably already have much more than you need. Once you realize that you already have everything you need, your mind becomes free of wants. When you want less, you have more. Does that make sense?

No. Well how about this? If you already have everything you need and you don’t want much more, then what will you do with your money? You know, the money you used to spend keeping up with the Smiths. The money you used to use to comfort yourself when you had a bad moment or two. The money you spent out of guilt, or obligation or habit. That money.

I’ll tell you what you’ll do. You’ll save it. You’ll invest it. You’ll help others with it. You’ll give yourself and your family financial security. You’ll have money for your retirement so that your kids won’t have to take financial care of you. Instead, they’ll be able to take care of themselves because they had a mom and dad that took the time to free themselves and their kids from anxiety. Do you need a better reason than that?

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Rule # 3 – Don’t Be Reactive

The Psychology of Money | July 12, 2010

I do yoga.

Funny story – the other day in yoga class I was able to lay on my belly and grab hold of both of my ankles. It is called “Bow” pose. I’ve been watching people perform this obviously simple pose for 5 years now. I say “watching” because until last week I couldn’t do it. I say “obviously simple” because I’ve never seen anyone else that hasn’t been able to do it.

Now for 5 years, while everyone else looked like a bow, I would be laying on my side looking more like a boat. A boat that sunk. But not on Sunday. On Sunday, I was in a picture perfect bow pose. At least it felt picture perfect. And truly, that is all that matters to me.

So. Yoga? Money? How are we going to connect those two seemingly unrelated topics? Easy. Whether you want money or you want to strike a perfectly beautiful bow pose, the way to achieve it is the same. Don’t be reactive.

If you have taken the time to start watching your spending habits. If you have become conscious of your feelings as they relate to your use of money. If you have sought out and found the right investment advisor and you own a portfolio of quality diversified stocks, real estate, cash and securities. Now what? I’ll tell you what. Keep doing it!

You see, many people start things with a lot of momentum. They get into something quickly. They put great effort into their new venture. They chart a course and head off into a new direction and then…………………….. well unfortunately most of them reverse course and head back to the dock, tie up the boat and get right back to whatever it was that they were doing before they got on that boat in the first place.

Would you like some examples? Diets, investing, exercise, saving, socializing, studying (do any of these sound familiar to you?).

The way to success is practice and patience.

If you have a savings plan and you contribute regularly you are doing very well. Keep doing it and you’ll be doing even better soon. As time goes on, you’ll inevitably come across some set backs. The stock market will go down. If it does? Keep buying stocks. If you can’t touch your toes you may want to keep trying. While you are doing that you take an assessment of other things that may be keeping you from being able to do it. Maybe losing a few pounds might help. Maybe stretching your hamstrings would be a good idea. Asking a trainer could give you the tip you need to put it all together. Consulting with a professional money manager may be the way to touch your financial toes.

Whatever you do, keep at it. Keep trying. Keep practicing. Be patient. Embrace your mistakes and try your best to learn from them. If you find something that works, keep doing it. If you see something that doesn’t work, try to find out why before you toss it aside. It is all to easy and unfortunately, all to common to say “I can’t do this” or “this doesn’t work”. Don’t react. Instead, try to be proactive. Look at everything in your life with new eyes. See if you can find a new perspective before you throw anything away. Whether it is a stock, a relationship, an idea or a strategy, make sure that it is not your lack of patience that does you in.

Take it from me. I could have quit hundreds of times over the last five years. If I did, I would never know the joy of the Bow.

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