Walter Okpala: Status quo as a barrier to financial planning

Walter Okpala: Status quo as a barrier to financial planning: In this post, we are going to look at status quo as a barrier to financial planning. I know many people will be surprised as how status quo...

Status quo as a barrier to financial planning

In this post, we are going to look at status quo as a barrier to financial planning. I know many people will be surprised as how status quo can contribute to lack of financial planning. Status quo means remaining in the same state in which one is found, whether the situation is good or bad. In other words, we call it comfort zone. No one can make any significant progress in the comfort zone. In science, comfort zone really means a zone or condition in which one spends the minimum energy. Everything nature works in a way to conserve the maximum energy and spend the minimum. On the other hand, chemical reactions do not generally occur under minimum energy condition. We need to add more energy in order to activate the reaction. 

     Using this concept from science, comfort zone is what makes the subconscious mind comfortable. However, we need to activate our subconscious mind if we want to change what is inside it. Subconscious mind is a chemical reaction activated by emotion, images, desperation, etc. Many people do not have the ability to activate their subconscious mind. As a result, they are not able to make any changes even in difficult times. Why do some people kill themselves instead of adjusting their lifestyle when their income is reduced? Why do many people use credit card and continue accumulating debt? Why do some people choose a low-paying carrear course in college? Why do many adult children live with and depend on their parents?

     Although many will give different reasons such as lack of information, lack of financial education, lack of opportunity, etc., the main reason is the inability to make a change. Lack of eduaction or information, or opportunity may be the cause of the problem, but does not explain the reason for not making the change. Making a change is a behavioral issue. Changing the behavior of a person is very difficult because it involves changing what has been fed into one's subconscious mind. Resistance to change is the greatest human defect. Some people go for financial repairs counseling only when the situation gets worse. 

     Why should someone continue spending money when he knows his income has been reduced? A person does that because he feels comfortable with that. Reducing your expenses requires discipline and throws one out of his comfort zone. The same thing can be said of credit card debt. In the case of a low-paying carrear, many complain about this but continues in the same job. They do not make any move to change the situation. They are afraid of the unknown. Status quo is a disease inflicting some of the educated people. The uneducated people are not aware of the opportunities around them. However, some educated ones have a lot of information, but do not use them to change their lives for better. The case of adult children living with their parents imposes a burden on the finances of their parents. In some cases, parents go from taking care of adult children to taking care of their grandchildren too. This will be the topic of the next post.

     Status quo is a barrier which many have to fight against in order to have your finances planned or repaired. Defeating status quo implies making a change in your habit. The more you procrastinate it, the more you are drowning into debt. Consider changing your habit today!       

    

              

Walter Okpala: Lack of financial education as a barrier to financ...

Walter Okpala: Lack of financial education as a barrier to financ...: In my earlier posts, I have tried to explain some of the reasons why some people don't have financial plan. Today, we are going to look...

Lack of financial education as a barrier to financial planning

In my earlier posts, I have tried to explain some of the reasons why some people don't have financial plan. Today, we are going to look at another reason for not having financial plan - lack of financial education.   

     Although having money is considered the most important task, having financial education cannot be neglected. Many people think they can do without having a financial plan, this is an illusion because money is very volatile. Even with a plan, we can make a mistake, imagine not having one. Financial education is very important to financial planning.

It is unbelievable that something of such great importance is not taught in any level of formal education. We are taught many different subjects in schools except the one which deals with how to manage the result of our sweat or hard labor. Is it not ironical to hear that? We go to school to have knowledge and, consequently, use the knowledge to make money. But, after obtaining the knowledge and money, we don't know how to use the money wisely.

“Everything is taught in school except how to manage the result of our sweat”

How can one study with the objective of making money, and after obtaining knowledge, won’t have the right instrument to manage the money derived from the study. Personal finance is so important that it is supposed to be taught right from primary education level. The reason for early engagement is that understanding the importance of managing one’s personal finances from childhood turns the child into a future financially responsible adult. Most of the financial problems people have today have their roots from lack of financial education. 

     If educated people did not have financial education, imagine the uneducated. Financial issues are generally left to be solved by those in the financial market. However, these professionals study corporate finance. Some of these professionals are themselves in a mess when it comes to managing their personal finance. The reasons for the mess are two-fold. Firstly, corporate finance professionals deal with finance and investment in a highly standardized format while personal finance deals with day-to-day decision about what to buy or what not to buy. The problems arise in a disorganized way and there is no standardized way or formula to solve personal finance problems. Secondly, corporations have reserve funds which give them protection while most individuals live from paycheck to paycheck.

Personal finance or financial planning for individuals should focus its attention to the problems and challenges faced by the majority of the population. Examples of these problems or dilemma are:

(a) what should a person do in a situation of rising food costs? Does he or she have to buy cheaper brands, buy alternative products, or look for a cheaper grocery store?

(b) How should one react in the face of increasing house rent? Do you move to a cheaper house in the same neighborhood or move to a cheaper neighborhood? Do you go back and live with your parents or do whatever it takes to earn more?

(c ) what do you do if the school of your children increases the school fees while you are on the same salary? Will you transfer your children to public school, send them to a cheaper school, or continue with the same school and buy a used car or move to a cheaper house?

      (d) what would you do if your child was born when you were unemployed

       and live on a rented house? Do you take any job you see or run to your in-

       law to help you?

(e) how would you proceed if your grown-up children could not find work after college?

(f) what do you do if your son and his wife keep on requesting for money from you as a result of their low salary? Do you turn your back against them or do you help them?

(g) what do you do if you find out that your grown-up child does not want to work? Would you send him out of your house?

At first sight, the above highlighted points may seem the issues related to counseling rather than financial. However, all has financial implications which affect one’s personal finances and, consequently, your financial planning. The essence of financial education is to teach and prepare an individual in making the best decision when exposed to the common day-to-day financial challenges of life. Financial education does not eliminate the problems, but provides one with the right tools to make the best decision.   

Personal finance mainly involves administrating one’s income against expenses. For a salaried worker, the income is basically the salary. Remember the example I gave in my post about the effect of people around you. Some of these workers give financial advise to others, but cannot manage their personal finances adequately. 

     The day-to-day expenses people struggle with are mortgage payment, car lease, house rent, high tech products, school fees, groceries, apparel, entertainment, and personal maintenance costs. While salary is generally fixed if one is lucky to have one, cost of living is always changing because of inflation, law of demand and supply, market trends, effect of international politics, etc. The scenarios which affect personal finance and spending are complex that only people with good understanding of them can be saved. Those who do not understand the above mentioned variables will fall prey to others easily. A person without financial education does not have the necessary tools, and this poses a barrier to financial planning. Lack of financial education affects majority of the world population.

     Although formal education does not provide financial education, you can get it through specialized training companies. It is very important you go for it. It makes a lot of difference in the life of a person. Think about this!

Walter Okpala: Financial planning - the effect of lifestyle

Walter Okpala: Financial planning - the effect of lifestyle: In my last post, I gave examples of how people around you can affect your financial planning. The people around you can also affect your li...

Financial planning - the effect of lifestyle

In my last post, I gave examples of how people around you can affect your financial planning. The people around you can also affect your lifestyle. The examples I gave in my last post about buying the same cars and living in the same neighborhoods illustrate this. 

     Lifestyle is a way of living chosen by an individual or a group of people. One may decide to live a conservative or an extravagant lifestyle. Extravagant lifestyle may be good if you wealthy and have a very stable income. On the other hand, conservative lifestyle is adequate if you are on low-income. For example, a Ferrari car of $1 million may be compatible with a multi-million income of a CEO of a major company (Apple, Facebook, Google, hp, Exxon Mobil, JP Morgan, Citi Group, etc.), but looks extravagant for a worker on an annual salary of $500,000. Therefore, your lifestyle has to be compatible with your income in order for it to be sustainable. At a first lok, one would say think a yearly income of $500,000 is enough to buy one a Ferrari over 5 years of work. This is where the temptation starts. The problem is not only buying a Ferrari car of $1 million, the car tax on that, the cost of insurance, and the maintenance add up to another heavy expenses. To worsen the whole thing, you need to belong to the elite club of Ferrari owners. Remember most of Ferrari car users have investments. They do not depend on salary.        

The cost of maintaining an extravagant lifestyle without having the appropriate income for it will put you under financial stress to the point you cannot have any financial plans at all. I used a Ferrari car as an example here. However, extravagant lifestyle can be observed in different levels of the society. It is incredible to observe that about 95% of the population have this problem. Extravagant lifestyle is generally assiciated to the rich. But, extravagant lifestyle is commonly found in the working class and worst in the poorer class.          

Many workers live paycheck to paycheck with the hope that their pension after retirement will support them when they stop working. This makes them use any excess remaining from their compulsory contributions on cars, house rents, credit cards, and amenities. Imagine a situation whereby a worker decides to reduce his lifestyle and save money so he or she can retire as a millionaire. This is a hard sell. I will show this with numbers in my next posts so that it can be easily visualized. 

The question of the poor is a special case. One of the reasons people give for not achieving something is poverty. However, this is not the case. Many people in the poor class do not know what is building wealth in the first place. They do not have enough, but have the habit of spending everything they have. They celebrate their children's aniversariares every year even if it means going into depbt, they buy expensive smartphones, buy branded sneakers, etc. What makes their case worse is that they never think about investing in themselves or in something that can change their lives. 

Recently, one of my cousins in Nigeria was asking me to help him go for a graduate study. He told me he does not have money. However, he sends me message through an iphone while I am using Samsung iphone. Is it not ironical for someone using more luxirious products be begging for help from someone using a less expensive ones?

Lifestyle is a strong barrier to financial planning. It is difficult to correct because it is a behavioral issue. Our behavior is molded by what we have in our subconscious mind. Unless we change what is inside the subconscious mind, we cannot succeed in changing our behavior. This is the reason why many people struggle with changing their lifestyle. Some even go to the point of killing themselves instead of changing their lifestyle.

So, adopt a lifestyle that is compatible with your income. Think about this!    

  

Walter Okpala: Financial planning - the influence of people aroun...

Walter Okpala: Financial planning - the influence of people aroun...: Another major factor which restrains people from planning their finances is the influence of people around them. The influence people aroun...

Financial planning - the influence of people around you.

Another major factor which restrains people from planning their finances is the influence of people around them. The influence people around you have over is very big. The people around you can be defined as your colleagues at work, classmates, associations members, your neighbors, friends, and fellow club members, among others. People who belong to the same group in any situation always look at others as role models or copy something from them. These role models influence how they dress, speak, and also influence their spending behavior. For example, women generally desire clothes they see other women wearing. Let me use my wife as an example here.

My wife and I have family friends just like many other couples do. However, we have one family friend that is closer to us than the others. After sometime, I noticed that my wife always wants to buy the same clothes her closest friend has whenever we go shopping. This is because her friend used to describe how the clothes fit her and the amount she paid for them. In order to show her that she can also afford them; my wife started buying the same clothes. At a stage, I was upset and I started complaining about this unnecessary competition. What annoys me most, though, was that there may be cheaper and more beautiful clothes for her to buy, but she wants exactly the types her friend is using. Generally, other items, such as, shoes, handbags, and jewelry are bought together with clothes in order to match. This can sum up to a big amount of money over time and can be an obstacle to financial planning, especially, if the apparels are expensive. This behavior is very common of women in every social class. I used apparels to give example here, but there are other situations where the same phenomenon occurs.      

Another example I observed carefully was the case of colleagues working in the same organization. It is unbelievable how this influence derived from implicit competition works. The workmates in the Organization I observed, especially the peers, drive cars whose costs are within the same range of values. For example, if one buys Toyota Corolla car of $35,000, others will try to buy cars in the same price range. Other cars in the same price range are Honda Accord or CRV, GM Cruze, Volkswagen, Ford Focus, among others. 

Another area of influence I noticed was the similarity among the neighborhoods in which these co-workers live. About 80% of the workers in this Organization live in wealthy neighborhoods. Although receiving the same salary, their family backgrounds are different.

Some come from poor families, others, from low-income families, and the rest from middle-class families. However, they drive brand new cars and pay expensive house rents. Looking at them from the outside, one will conclude that everything is alright with them. But, breaking down their expenses will reveal that they are struggling. Although having the same salary, they are involved in a competition which makes some of them spend more than they should as a result of differences in their background. Consequently, their financial planning is prejudiced. Let me use figures to illustrate my point. 

These workers I am using as an example receive the same monthly salary of $10,000 each. This salary may not be so high for workers in the developed countries, but certainly it is a lot for those living in the developing countries. From the monthly gross salary of $10,000, 30% go as tax, 10% as social security contribution, another 5% is set aside for pension plan contribution, leaving a net monthly salary or take home pay of $5,500 for the worker. From the net amount, the worker pays school fees of $2,500 for a child, pays condominium fee of $700 and mortgage of $1,000 monthly. He pays a monthly car leasing fee of $500, and $300 for a training course. What remains for him after these financial obligations is just $500. However, he has to buy groceries for the family, pay for his personal expenses, electricity bill, gasoline expenses, car insurance and maintenance fees, telephone bill, cable television subscription fee, newspaper subscription fee, gadgets for the family and for the only child he has. If his wife does not work, he cannot be able to buy groceries. Here is now the question. How can someone on such good salary not afford to have a good financial planning?

One of the reasons is the influence of the colleagues which made him or her live in an expensive neighborhood and bought an expensive car too. If not because of the influence of colleagues, he would have lived in a cheaper neighborhood where he would have bought a duplex which has no condominium fee. This would have also made him to send his child to a cheaper school and buy a used car instead of leasing a brand new car. On the whole, he could have saved condominium fee, mortgage payment, and $1,000 from tuition fee for his child. This would leave him a surplus of about $3,000 every month. This surplus will go into financial planning.       

So, try as much as possible to reduce these influences. On the contrary, your financial difficulty will continue irrespective of your income. Think about this!

  

Financial Planning and lure of capitalism

In my last post, I listed some of the main barriers to financial planning. In this post, we are going to look at how factor obstructs some people's ability to think about financial planning. But first, let us define the term "lure".   

According to the Merriam-Webster dictionary, luring is a process of enticing or seducing people to pleasure or gain which may lead astray from one's true course. Goods and services are generally presented to the public through advertizing on television, radio, the internet, newspapers, magazines, banners, billboards, among others. Advertizing Agencies are hired to create needs so consumption can occur. The role of the ad agencies is to find very creative ways to entice people with products or services. Another way of luring people and creating demand is by constantly creating new versions of existing products using elegant packaging and labels.

These methods are used by many industries, such as those in the high tech sector, automobile, apparel, cigarette sector, among others. Have you ever asked yourself why the auto industry launches new versions of the same cars every 2 or 3 years? What of the launching of smart phones every 3 months? What about the transformation of notebooks into tablets? Or transforming smart phones into wearable technology? What of the latest designs in sneakers of top brands? The list goes on and on and on. 

These innovations occur so the attention of consumers can be constantly held in such a way they will continue buying the products or upgrading them. In this way, the companies will continue making profit. If you buy one car and there is no new design for a long time, for example, the auto manufacturer will go out of business and their staff will lose their jobs.

Another example is the smartphones. New smartphones are launched every 3 months. These are launched as 1, 2, 3, 4, 5, 6, etc. A person with an old version sounds out of fashion and obsolete. In order to follow the trend, may people keep on buying the updated smartphones. Even the poorer ones show the same habit of changing phone.   

The lure of capitalism is a strong barrier to financial planning. From the examples given above, it becomes clear that many are trapped in the continuous cycle of purchasing new products or upgrading them. This practice consumes the income of many people to the point that they cannot save anything. 

Consider the case where some people buy brand new cars every 2 or 3 years. Instead of buying a used car which their budget can support, they prefer leasing a new brand car. The problem of new car is not only restricted to paying high monthly leasing cost, but also the insurance cost, gasoline, maintenance cost, car tax, among others. At least, the costs of insurance and yearly tax are directly proportional to the cost of the vehicle. In Brazil, for example, yearly car tax is 4% of the value of the car. The car tax must be paid for a period of 20 years. These extra costs are never considered before buying a car. 

It is impossible for one to submit to the lure of capitalism and at the same time make financial plans. The decision is yours. Do you prefer working all your life and die in misery or retire in abundance? Think about this! 

Why many don't many people have financial plan?

Even with the obvious benefits of financial plan, many do not have it. Although some might have tried to have it, they are dominated by implicit forces which they don’t understand. This is because most of the implicit forces involve emotion of people. Emotion is one of two ways information gets into our subconscious mind. Emotion is very difficult to control. The subconscious mind is the part of our mind that controls our behavior. The implicit forces which hold people back from having financial plan are:

(a) the lure of capitalism;

(b) influence of people around you;

(c ) luxirious lifestyle;

(d) lack of financial education;

(e) status-quo, and;

(f) over-sustaining grown-up children.


In my next posts, I will explain how each of these factors or forces affect financial planning.

Plan your spending before your income arrives!

Financial planning is considered by many a technical term only used by specialists in the financial market. Others consider the term something reserved only for the rich or big corporations. But, it turns out that everybody needs to plan his or her finances in order to use it wisely and meet up with everyday challenges, especially, the emergency ones. But, what is financial planning?

In a simple language, financial planning is the organization of one’s finances and the necessary discipline required to meet one’s challenges. It can also be simply defined as one living within his limit. Even if you consider your income small, you need to live within your limit as you work hard to improve your income. It does not make sense spending more than you have just because you don’t have enough income. Instead, think of what you can do in order to improve your income. Financial planning, as some people might think, does not imply living in misery, but simply means living within your means.

In order to put your finances in shape, you must have a plan of how you should spend every dollar or anyother currency before receiving it. In this way you can have complete control over your spending. Buy a notebook and give it a title as house expenses book. Write down all your bills in this notebook, giving priority to must-pay ones. Some must-pay bills are the ones relating to energy, telephone, heating, house rent, condiminium fees, etc. Although some of your friends might laugh at you at the beginning, you should be persistent because they will copy your lifestyle when the result starts appearing. Using this method will save you from debt. There is nothing more satisfying than having control over your money.      

One must be very careful about spending money because this is what we receive in return for our sacrifice and hard labor. Therefore, planning your spending before receiving your salary is a way to honor your hard work. Think about it!  

Reaching your maximum potential

In motivational or inspirational sessions, the most common questions asked should be the following. Do you think you have reached your maximum potential? How do you know that you cannot go farther than where you are currently? What are the barriers that are limiting your progress? Does your mind tell you that you can go farther? Are the barriers you have imposed by others or by yourself? Are you telling yourself the whole truth?

     You need to answer these questions because the greatest enemy to our progress is within us. If you can defeat this enemy within, there is nothing you cannot do. We can only go as far as our mind can see! It is not the obstacles that block our progress, rather, it is what our mind can see and how it sees it is the limiting factor. If you can see your desire in your subconscious mind and work towards it, you will come to know that everything is possible. 

     Those who reached their maximum potential are not those without obstacles of life, but those who push harder in order to accomplish what their subconscious mind showed them. Watch high achievers or successful people when they speak or give interviews and you will notice that you are even more skilled than some of them. If they make it, why can't you? If you don't reach your maximum potential, you are wasting your talent. Think about this!       

Why are some people rich and others not 2?

In my last post, I asked the question about the main factor which differentiates the two. This question has been asked for many years and by many people including policy makers. Because of the variety of reasons or answers to this question, many policies have been formulated to tackle the problem of poverty. Among them are food banks, different types of charities, relief programs, social programs by governments, and of late, the social entrepreneurship concept. In many countries, various politicians have have used social programs to manipulate people in order to remain in power. Some even become dictators through this process with the justification that the majority of the population approves their government. Among the mitigation programs, Social Entrepreneurship is the one very close to the ideal solution to the problem of poverty. Why is it the best? 

     Social Entrepreneurship is the best because it makes people think and and participate in the process of creating wealth and not just being observers. This brings us close to the answer to the question: Why are some people rich and others not?

     The main factor that determines the side in which one is found is the mindset. Other reasons may be given for poverty, but the number one reason is mindset. The defect of all the poverty reduction programs is that it does not include work towards changing the mindset of the poor. As a result, the poor thinks he or she is entitled to be receiving social security. We can achieve everything we want only when our mindset is directed to that. What is mindset? Mindset is just the subconscious mind. Everything we do reflects what is inside our subconscious mind. Unless what is inside the subconscious mind is changed, there can be no exterior change. Some people call the change the paradigm shift.

     Let me challenge you. Do you work with your subconscious or the conscious mind? Please, send me your input!             

Why are some people rich and others poor?

Why are some people rich and others poor? This is a common question many people ask. If people were born and raised under the same condition, why should some thrive and others, not? Many reasons have been given for this. Some say lack of education is the cause while others point to lack of inheritance as the main reason. If we take education as a factor, why are many uneducated people rich? If we also consider lack of inheritance as a barrier, what can be said of 70% of American billionaires who started with nothing? Many people consider the poor as not working hard enough. I do not know if this is true. Even if it is considered true, I would like to ask the reader a provocative question. Doesn't the poor work hard because he does not want to or because he does not know why he should work hard?

     Other reasons people give to justify the difference are religion, bad habits, ignorance, bad choices, among others. Religion cannot be a barrier because there are rich people from every religion. There are also rich people with bad habits and ignorant. We have people with ignorance from both sides although the level may vary. What is then the main reason why some people become rich and others, not?

     Think about one main cause for this difference. This discussion will continue in the next posts!

               

How do you relate to your boss?

It is common to have bosses wherever we work, be it in a religious organizations, charities, non-profit and for profit organizations. My question in this post is: how do you relate to your boss? The answer might seem very simple. I relate to my boss professionally. Even under professional setting, you should first understand who your boss is.
     You should how your boss behaves. Try to know the right time to talk to him or her, the principles that guide him, his or her philosophies, among others. Although he is a boss, he or she is a human being and as such, has the same feelings and behaviors as we do. For example, some bosses do not like their subordinates complaining when they give them tasks. Others do not accept subordinates without initiative while others completely reject those who submit tasks or reports late. 
     Once you understand the type of boss you have, you have a greater chance of forming an excellent team.
     

Ask yourself questions about your work

Have you ever asked yourself questions about your work? Do you know exactly what you do and how you can do it better? In order to differentiate yourself, you need to master what you do and how you can improve on it. Understanding what you do, how and why you do it is very important for your career progress. Think about it!

What is your contribution to your Organization?

Some people only complain about their salary and their organization. It seems they are never satisfied what they have. Then comes the question: how can you earn more? To answer this question, let me go back to my earlier posts where I mentioned the factors which make you to earn more from your Company. I mentioned these factors as education, committment, and dedication, among others. These factors can really transform you into someone different in the organization. How will that occur?

     

     The transformation occurs when you you use these positive attributes to make a recognizable contribution to the organization. You may be the brighest employee academically or in terms of behavior, but that must be transformed into a measurable contribution. It is only when this done that you can be recognized as being different. When you are different, your income will automatically be different. It is not your level of qualification that guarantee your income, but you produce with it!

     So, think about it. Before you ask for a raise, first ask yourself what you are contributing to your Organization.

      

  

Work-Life Balance

Many times we are confronted with the concept of work-life balance. How to achieve it and the best practice for it. The best companies that offer this to their employees. Work-life balance is the having the equilibrium between professional life and personal life. But first, how do we define the equilibrium point? Is it 50%:50%? What should be the right proportion? Work-life means different things to different people and to different levels in the organizational hierarchy. For example, a CEO of a multinational has to be in contact with his or her surbordinates distributed in different countries and working under different time lag. What should be his or her work-life balance? What of a worker at the bottem of the hierarchy? It is obvious that the higher up one goes in the hierarchy, the more the responbility and as a result, the balance tends to skew to the professional more than personal. It is ironical that everybody knows this, but tries to complain. People want to be promoted to the senior position so they can receive higher salary. With higher salary comes more responsibility and less personal life. So, instead of discussing the life-work balance, one should first define what he wants. Do you prefer to be at the bottom of the hierarchy, receiving less and having a good balance? Or would you do the contrary? The choice is yours!       

Engagement at work

Questions often asked is why don't some people have enough engagement with their jobs? Well, many people may say I go to work every day and do my job. What else do their companies need in terms of engagement? In order to be fully engaged, a worker must understand his company's business and vision. I used the word understand the vision instead of knowing what the vision is. The driving force of everything we do is the vision. Once again it boils down to understanding and applying the same principles of entrepreneurship to career. Many workers do not know the mission and vision of their organizations. I know this fact because I teach business English in Companies and I always ask this question. To my surprise, a greater majority of workers do not have this information. 
     In my first earlier posts, I wrote about the factors for success as awareness, strong desire, vision, and te others related to the execution process. These same principles are applicable if one want to have a successful career. The level of engagement you have with your job turns you very important to your organization, and consequently, guarantees your job even during bad economic situation.
        

Career during economic recession

How does one's career work when the economy is in a recession? In my other posts, I mentioned the need for investment in one's career. I also commented that the time one needs investment in career the most is when the economy is in difficulty. However, some people asked me how can a person invest when he loses his job? The answer is that the first person to loose job is the less-educated. Therefore, he should go for education or some sort of training. There are ways to do that. Many governments offer unemployment benefits and requalification programs. In the US for example, Community Colleges in the US offer requalification programs at a low cost or even free. There is always a way out for someone who wants to make progress in life. It is obvious that someone without job has to forgo some things in order to get back on track. There is no miracle. One has to lose something in order to gain another thing in return. The problem is that some people are used to the carrossel life that they think life is just like that. The life of everybody is not like that. Think about it.
     


       

Entrepreneurship and career 2

If one applies the same entrepreneurship principles to career, one will attain more success. Try it and you will see the difference. Take your career as an entrepreneur and see what happens. Think about this!

  

Entrepreneurship and career

What is the difference between entrepreneurship and career building? How do people talk about these two terms? Why do people use different language when talking about entrepreneurship and another language when talking about career building? I would like to have your input about this theme.
 

The Human Capital 2

In my last post, I wrote about the main components of human capital. These components are education and behavior. Education implies in traning that leads to your area of expertise or specialization. Education is composed of formal and informal education. Formal education is the one we receive in a formal setting such as primary, secondary, and college level education. Informal education is the specific training generally provided or sponsored by corporations. Higher level of education is very important so corporations can have laborforce that can solve problem and not rubber stamp style. Secondly, we are in a knowledge economy. The more knowledgable the laborforce, the more productive and effective it is. It is also more innovative and can withstand the competition. Knowledge requires continuous learning and this must be provided by corporations so their products and services cannot be taken over by the competitor. The money invested in education brings return to companies.
     The second component of human capital is the behavior. Behavior or comportment implies how you take your job. Do you take it serious or just to pass time? Do you consider your job as the only option? Do you dedicate 100% to your job or less? How do you relate to your colleagues and your clients? How often have you been late at work? All these questions say something about you. If you are committed to your work, always on time and relate well with others, there is a high probability that your company will not lose its business. 
     In summary, good education and good behavior ensure a high level of human capital of an organization, and consequently, its success. What type of human capital does your organization have? Think about this!
            

The Human Capital of a company

Quite often, people talk about human capital in organizations. Human Capital or the Human Equation can be defined as those skills which people bring to the organization. The skills can be divided into two: the technical side and the behavioral part of it. The technical side is made up of educational trainings. The behavioral part is composed of the level of committment of the individual and his ability to work in group. The two parts are very important and complimentary in order to reach the desired objective. Quite often, leaders of organizations emphasize only the behavioral aspect by using the words such as a good team player to supercede the other qualities. 
     Here is an example to illustrate what I mean. In order to provide the highest service, one must have enough knowledge and skill about his job. However, only knowledge without teamwork ability, an organization becomes dysfunctional. On the other hand, no matter how one may be very sympathetic and good to everyone, a lack of knowledge implies he cannot solve any problem technically. This is also disastrous. The reason is that customers want organizations to solve their problems and relate to them in a humane way. Solving a problem is technical, but relating to customers is a behavioral issue.
     In the next post, we will look at how the tehcnical and the behavioral components can be constructed.           

Why do some people have successful career?

I have asked myself why some people have successful career while others not. Like in every aspect of our lives, some are successful and others are not. Success in any career shares the same principles as used in entrepreneurship or in wealth creation. The main principles are strong desire, committment, goal setting, strong education. If one can meet these qualities, he will be successful. On the contrary, the career will be unsuccessful. The notion that the boss will guarantee success to my career is not true. You are the one who guarantees your job and, consequently, your career. Therefore, ask yourself how you should apply these principles so you have a successful career. Think about it!

          

What is time management?

It is interesting to note that many people talk about time management without really understanding what it means. It is important to note that time is always in movement. As a result, it cannot be stopped or set backward. In fact, time cannot be managed. We can only manage ourselves in order to meet with the time. Therefore, time management really means self-management directed at meeting the constant movement of time and its demand. Think about this!



 

Breaking the taboo during career choice

It is very common to see families choose careers for their children without considering the financial aspect of it. It is also common to see the candidates themselves make the same mistake. It is understandable that our age as teens at the time of selecting the careers do not help us in thinking about this issue. However, even adults follow the same patern only to discover the mistake after graduating with a huge student debt. If money is so imprtant in our lives, why do people choose careers without putting this parameter into consideration? 
     One of the reasons is the taboo centered around money. It is always said that people should choose their passion and not money. Secondly, many tend to choose college courses which give status or prestige. In my understanding, it is a complete mistake not to consider the most important factor for going to college in the equation. Everybody knows that the essence of going to college is to get knowledge. On the other hand, there are financial obligations expected of you as an individual under capitalist economy. These expectations are higher when one has a higher level of education. If one cannot meet some of these obligations, the knowledge he or she has seemed to be useless. There is no way one can be justifying to others that he has knowledge but cannot meet the basic needs of the society. 
     Therefore, I advice people to break this taboo. My advice is for people to consider the money aspect of it as one of the main reasons for choosing your career in order not to regret afterwards or be justifying to your children why you find yourself in a mess!