Do You Have a Job or a Career?

In 2004 I made the very difficult decision to leave the Marines after my first enlistment was complete, and head back to Texas to try my luck in the “real world”. Being only 24 years old, I was young and ambitious. I knew that the Marines was a very difficult lifestyle on families, and I wanted to achieve two things as I exited: Raise a family, and make more money.

After returning home to Dallas, I tried several different jobs, only to realize that I was no good at driving a dump truck, and my construction skills were lack luster at best. I worked on FA-18 fighter jets while in the Marines, and I always had a strong knack for anything mechanical.

With a little luck, I landed a job at Solar Turbines in April of 2004 at the DeSoto, TX Overhaul facility. I knew very little about industrial gas turbines, and as my first job, I started off cleaning parts. I somehow managed to fall into good graces, and leadership recognized I was a go getter, and had a strong work ethic. I moved from position to position (inventory, disassembly, build etc..) and was thrilled at the ability to work as much overtime as possible.

In 2010, I realized that I wanted to do more than just manual labor. I began to look around at people, who just like myself started at the bottom and worked their way up into leadership, and eventually into engineering positions. My GI Bill was still effective, so I decided to go back to school while working 60+ hours a week. Learning and re-learning began to be my new adrenaline, and I slowly began refocusing my efforts to make my mind as strong as my back.

I graduated with a BA in Organizational Leadership in October of 2014, and in 2015 Solar Turbines allowed me to go through the CPS Six Sigma Black Belt course. Out of all the things in which I have been exposed to in my time at Solar, nothing has opened my eyes or sparked as much curiosity and interest as running projects geared toward process improvements and reducing waste. Utilizing statistics and data to draw educated decisions on areas of the business that require improvement, literally changed the way I look at all problems both at or away from work.

Today, my wife and I have started and successfully ran multiple small businesses, in which I owe our success to Solar Turbines and continuous education.

I said all of this in the hopes of reaching a young person, or someone struggling with the career decisions and choices.

Here is how to tell if you are working in a job or a career.

      A job is something that is temporary. Now this can be a mental temporary if you will. (I’m only going to do this until I can find something else) Well 20 years later, you might be doing the same exact job. I still refer to this as a job, as it is just something that is paying the bills, but you have not yet reached maximum level of fulfillment in regards to salary, job satisfaction, and of full utilization of your talents and interests. Job is actually defined as something that can be done in the short term to earn cash.

     A career is something in which you are no longer looking for the next big move. You have arrived in a field that satisfies your desires to learn and grow, utilizes your talents and experiences, and meets your financial requirements. A career is defined as a long-term pursuit of a life long ambition.

Patrick Wood

Unmanaged 401K Accounts

As we continue in the series related to managed 401k accounts, I want to take a brief moment and discuss the downsides of putting your money in a fixed retirement account, crossing your fingers, and hoping that by the time you retire, you might have enough money to live mediocrely in your glory years.

If you study the financial markets you will see that there are over $24 trillion dollars tied up in the US retirements accounts, and as of 2014, about $4 trillion of that (roughly 14%) is derived from 401k accounts. There are an estimated 50 million US employees contributing to 401k retirement accounts with a large majority tied to the stock market.

Companies hire firms such as Hewitt, Fidelity, TD Ameritrade and the likes, to put together investment options that provide employees with diversified account options for long term investments.  You could make an argument supporting these decisions, break down a few of these account options, and discover what these accounts are comprised of. However, the purpose of this article is to get you thinking outside of the box, and begin exploring alternative solutions that may be more viable and may provide greater returns.

The example that we will be using today, is an option provided by a major firm, in which they intended to set up accounts based on the the employee’s estimated year of retirement. Generally speaking, this is a terrific method of providing easy to understand options to the masses. A person looking to invest would find the year in which they intend to retire, dump all their hard earned cash into this account, and in this particular case wait 14 years for the funds to mature. Sound good? Well let’s look into the performance of this account before arriving at our conclusion.

So I did not have to do any deep diving to find the information above. I simply click on the investment option, and this is the first page we see. Taking a quick glance, we notice that we only have a year’s worth of data. Year to Date (YTD) we see a almost a negative 5 percent return, and looking out a year we see a negative 8.84% return. I don’t like using the word “return” in this scenario, as we are not gaining, but losing money. Most investors will tell you that for long term retirement accounts such as a 401k option, a healthy percentage for growth is between 7-8%, in which I agree. In a later topic, we will discuss in depth the benefits of compounding interest, but for now let’s agree on a relatively realistic return.

So looking into the exacts of this particular individual account, we see that this person put 59% of their account balance in the “Target Retirement 2030 Fund”. Like most, they assumed that if they estimated their retirement year, this option is a no brainer investment. Luckily, we intervened. This was a snapshot as of yesterday. This individual no longer has a stake in this poorly performing fund.

Our purpose is not to undermine or underestimate the power of long term investments, however,  our purpose is to provide an alternative way of thinking about investment strategies. Take your retirement accounts seriously. Do your research, become informed, and act on this empowerment.

Cheers,

Riverboat

If I Only Committed Myself…

As we waited in line to see Todd Snider, a local musician, known for his anti-establishment songs, and hippie lifestyle, we began to question whether or not this old decrypted building had an “alternative” entrance. Breaking out of the line, we headed for the back of the building, only to find a couple of older busses and one older van squeezed into what appeared be two parking spots. As we pondered the parking arrangement, a guy came out of the older van carrying what appeared to be a lawn chair. The lighting was less than impressive, and to keep from startling the guy, I just said “hi”. He continued to exit the vehicle and decisively picked the perfect spot to plop down in his lawn chair, not seeming to be the least bit concerned with our presence. Once he was settled, and after an awkward silence, he finally returned the greeting, with nothing more than “hey”.

To this day I’m not sure why we just stood there staring at this gentlemen, but we did. Was he a musician, a  roadie, or was he just a friend of a friend. Heck, was he even there for the same event as us? Fortunately, he spoke to us, and asked us if we were there to see Todd Snider? Bingo! We were on to something here. We replied with a cool, relaxed, yes! Ok, maybe it was not that cool, but we were in fact there to see Todd Snider.

As it turns out, this guy in the older van, was the opening act. He had been traveling the country for over 20 years playing in local dives, and taking any show that paid for his expenses. It appeared that he traveled light, with just his dog, a guitar, and that lawn chair. Simplicity is what he called it, and after spending some time drinking and telling stories, I agreed with his take on the simple life. As we talked, I couldn’t help but wonder what the hell this guy was doing with his life. How could you be content with living in a van? What did his friends and family think about his lifestyle?

Despite my thoughts, and despite our time being short with the man from the van, we achieved our goal of entering the concert through an alternate entrance. Little did I know at the time, but the man from the van taught me something about life, business, and entrepreneurship that can’t be learned from a class.

From my perspective the man from the van had nothing. And from his perspective, he had everything. He knew that he was only one performance away from being discovered, landing a record deal, or more realistically, selling a cd that helped pay for his trip to the next town.

If you have had thoughts of starting your own business, developing an idea, or creating a service that will improve people’s lives, make a commitment. The reality is, that most small business start-ups fail. The reality is that most people will lose money on their initial investments. Be like the man in the van. Be persistent, knowing that you are only one educated decision away from being an employee to an employer…

Cheers,

Riverboat

 

 

 

 

Managed 401k Accounts

If you are just joining us, I wrote a post a few weeks ago titled “401k” The Most Underutilized Asset. Please dive into that piece, as it is a trailer for my future posts on maximizing your investments using your 401k account(s).

Below, I offer real life screen shots to a managed 401k brokerage account.

Most 401k plans offered through corporations have limited options, and are primarily designed for the masses, who for the most part, could care less about managing their own funds, or have little to no knowledge on investing.

I want to rant about intelligent people spending their entire careers focused on climbing the corporate ladder while ignoring their own retirement funds, but I will pass. (Future topic)

If you dive into your options, most plans allow an individual to transfer money out of a limited option account, and transfer into what is called a brokerage account. Using this type of account removes the training wheels, if you will, and gives an individual an opportunity to trade on the open market.

For the record, there are still restrictions on what type of stocks you are able to invest in, however, you go from maybe 5 or 6 different options, to thousands of possibilities.

As you can see above, this is a real life example of a managed brokerage account, with a screenshot of today’s date and time of writing this article. A little background. I transferred 15K for an individual in early March of this year. Within about 10 business days we were able to grow this account to over $18k, averaging about $300 a day. It just so happens at the time of this screenshot we made $489 or 2.75% today.

Now the stocks that I picked have decent balance sheets with a ton of upside opportunity. This article is not designed to discuss stock picks, nor am I recommending the stocks shown above, but I do want to be as transparent as possible when explaining my reasoning.

So imagine, if you had $100k invested. If you were to gain %2.75 daily, you would be looking $2,750 a day in gains. Sure there will be some up and downs, and there were in my example. Actually, one day during this time frame the market dropped significantly, and to be quite honest, I was not concerned in the least. I had done my research, and I was confident in my picks. (Also note, we are not pulling out this money after daily gains, similar to a day trader, we are maximizing our gains utilizing individual stocks versus investing into a bulk investment options)

Let’s say you make $60k a year. Give or take, you are grossing about $230 a day. More than likely your bring home daily pay after taxes, insurance, retirement etc.. could be $130-$150 a day. My point being is that the power of investing allows an individual who is bringing home about $150 a day to maximize his or her daily earning potential by investing and fully utilizing your 401k account. Now instead of just bringing home $150 a day, you could be earning up to $450+ daily.

Ok, I know what some of you are thinking. This is risky.. I don’t know anything about investing.. I prefer to have someone manage my money.. The 401K is designed to be a long term investment, why are you worried about daily gains?

Yes, there is a bit more risk involved in this method, however, you should take control of your money and your future. Not knowing something is not called a problem, but an opportunity (Study). Yes, the 401K is designed to be a long term investment plan. Notice, I did not utilize all of the money in the account, I only used a percentage, in which I accept the known risk, in an attempt to maximize my earning potential.

In summary, take control of your 401K account. Study your options and look for everyway possible to maximize your earning potential. There are hundreds of ways to grow money, and today I just talked about one possibility.

Disclaimer:

The information provided in this blog and accompanying material is for informational purposes only.  It should not be considered legal or financial advice.  You should consult with an attorney or other professional to determine what may be best for your individual needs.

Riverboat5blog does not make any guarantee or other promise as to any results that may be obtained from using our content. No one should make any investment decision without first consulting his or her own financial advisor and conducting his or her own research and due diligence. To the maximum extent permitted by law, Riverboat5blog disclaims any and all liability in the event any information, commentary, analysis, opinions, advice and/or recommendations prove to be inaccurate, incomplete or unreliable, or result in any investment or other losses.

Content contained on or made available through the website is not intended to and does not constitute legal advice or investment advice and no attorney-client relationship is formed. Your use of the information on the website or materials linked from the Web is at your own risk.

Cheers,

Riverboat

 

 

 

“Get Rich Quick” Become an Overnight Sensation

I get asked all the time, mostly by kids, “how do I get rich quick”. Flip to YouTube, and type in “get rich quick”. There will literally be hundreds of cats trying to sell you on an idea. If you really watch some of the videos, like I have in the past, you will come to the realization that these long legged mack daddies are talking about nothing and everything at the same time.

One will be showing off his mansion while playing basketball with Mark Cuban, and another will be explaining how he works out, and eats healthy while traveling to exotic locations across the globe.

Want to know how these guys are getting rich? By selling you the idea of getting rich quick. Let’s face it. If you have 1k videos on YouTube, that is your job. If you need me to sign up for a seminar, and purchase product, that is your job.

Sure, there are overnight sensations that make it big, and they certainly need no introduction on this platform, however, you have greater odds of winning the lottery, getting struck by lightning, or lining up as a running back for your favorite NFL team, than becoming rich quick.

The reasons that these YouTube gurus sell you on an idea, instead of a specific process are as follows:

1. Each person has unique skill sets and talents. In order to grow wealth, you have to play on your talents and find your niche. It is nearly impossible to teach someone who is completely unfamiliar with computers how to create and run an Ecommerce business. You could not provide enough instruction, nor could you profitably spend enough time with that individual to walk them through each step of the process.
2. The market can only sustain so many people diving into the same industry. Just because someone on YouTube discovered a niche way to create wealth through drop shipping, does not mean that you are going to be a successful drop shipper. First of all, drop shipping is a dog eat dog world. If you can find a “dropshipper” that has prices lower than an item already listed on Amazon, you might have a chance. The harsh reality is, most of these people are ordering directly from the manufacturer, and the “drop shipper” that you are working with is really a middle man. (More on this in a future blog).

Think about it. If these YouTube gurus made millions or billions in a particular industry, why are they spending their time trying to help you become rich? Do they really want a million viewers flooding their market?

I know very successful business people who are extremely wealthy.  They are not on LinkedIn, rarely post on Facebook, and certainly do not concern themselves with attempting to help everyone become wealthy. It’s not that they don’t care about helping people, the fact is, they realize that not everyone can do what they do. Not everyone is entitled to a title.

Our society is so obsessed with getting rich quick that we forget that life is not solely focused on finishing the race, but rather running the race.

Obtaining and maintaining wealth is a process.

Cheers,

Riverboat

“The Dreamer”A Viable Alternative

I’ve spent most of my life looking for truth buried in alternatives. Life preparation leading up to high school graduation was a bit bleak for me. It seemed like we had two choices; go to college, or get a job. Realizing that due to my less than impressive grades in highschool, I was destined for the latter. I spent years in and out of junior college programs, and was honestly enjoying life living with three of my childhood friends. We were not focused on career ladders, retirement programs, nor did we care much about actually graduating college, it was just something that we were “attempting” to do for lack of another suitable option.

There was no doubt that our parents wanted what was best for us, but coming from a dual income home, both of my parents worked multiple jobs in order to support my sister and I. My dad and I would have long talks about what I would do with myself, when I finally “grew up” and entered the “real world”. It was not as if he did not have my best interest in mind, he certainly did, but I now realize that each generation must overcome ideological obstacles. My grandfather could not read and write. He worked as a barber, and trapped raccoons in order sell the hides on the weekends. Although this man had little education, I learned more from him as a kid than most of my teachers. He gave me my nickname that I take to heart (Riverboat), and taught me to drive when I was eight years old. He and my grandmother lived in an inner city, and despite being the only caucasian family on the block, my grandparents would cook every evening and feed all the local kids. This was an experience for me. I learned what it meant to love your neighbors, and I learned that stereotypes were often just that.

Not long after up and moving to Austin, TX at the age of 19, did I finally run out of options. My friends and I had all lost our jobs, and we were facing our second eviction notice in less than a year. It seemed that whether we liked it or not the “real world” was closing in. We had one last hoorah, and split ways. I moved back to Dallas, and eventually joined the Marines at the tender age of 20. The oldest in my platoon, I often regretted the decisions I had made that led me to this devastating event I like to call boot camp. I would have gone to college, I would have made good grades, found a decent job, and started raising a family. I would have done anything to escape such a predicament. I could only help think of the poor bastards in prison in which a single incident would forever change their lives. Luckily for me, boot camp only lasted three months.

It wasn’t all bad. Somewhere in the midst of signing papers, I unknowingly participated in the GI Bill program. I paid in a $100 a month for 12 months, and in return, I received monthly installments which far exceeded my initial investment. By this time, I had started working for a Gas Turbine manufacturer. I started off cleaning parts, and slowly worked my way up the chain. I could not see the forest for the trees, as I met the love of my life while stationed in San Diego, CA, and after we got married, we began having children right away.

Life was too busy not to be content. I could have cared less about a career ladder, as I was working as much overtime as I needed, and we luckily never went without. My wife on the other hand was thriving in corporate America. She was in sales, and later customer services. She had a knack for learning, and excelling well beyond her peers. It would be my wife that I would later name “The Dreamer”.

At some point, I decided that I better utilize my GI Bill, and I returned to college, this time with the mindset of actually graduating. I would go on to earn my BS in Business Leadership/Management, and shortly afterward go on to become a Six Sigma Black Belt (fancy course and title for using statistics to reduce or eliminate defects). I found my niche in working with people. I took a leadership position, and began to hit my stride in the “real world”.

“The Dreamer” was laid off in 2010. At the time this was a devastating blow as you might imagine. We became a single income family overnight, and it was apparent that some tough financial decisions had to be made. We sold her fancy new car, and bought her a used SUV to lug the kids back and forth to school. She began volunteering in the art room, and despite our financial situation, I was comforted with the idea of my wife being with the kids everyday. Little did I know that this would be short-lived.

After establishing what would turn out to be life long relationships while volunteering at the kid’s school, my wife was asked by one of the moms to create a unique, personalized wedding gift. Being the creative genius that she is, she came home that evening and began hammering through ideas. One after another. She would create something and then throw it away. All I could see at the time was us losing money. I would tell her just to create something, and I remember complaining that she was going to spend a week’s worth of wages creating a single gift.

This single gift idea would go on to sale over 4 thousand units in the first year. My house became a factory. We had people working for us, and we decided to expand to a retail location. On top of personalized gifts, we invested in embroidery and sewing machines, which opened another market opportunity that we thought might exist, but was unsure of the full potential.

“The Dreamer” changed my perspective on business, but more importantly my life. Search for alternatives, persevere through negativity, and most importantly, invest in people. My grandfather named me Riverboat. Although I may never understand the true meaning of the name, I will never forget his passion and drive to help people, and overcome stereotypes. I want to spend the next half of my life embracing alternatives, helping people become successful, and motivating those seeking opportunity.

Cheers,

Riverboat

 

“401K” The Most Underutilized Asset

I talk with people everyday who are worried about retirement. Most of the people that I meet with and interview are in the “Baby Boomer” era, as they have the most to be concerned about, and often times have the most questions. My parents fall into this category, and although they have been quite successful in my eyes, they are still working.

I met with an older gentlemen late last year that was interested in retiring. Being a good friend of mine, I offered to review his portfolio and wanted to help him with proper decision making. As I reviewed his accounts I was sickened. He had been working for the same company for over 25 years, and despite an excellent 401K option, matching 6%, he had not signed up. In his mind the pension was going to be all he needed. In his defense that is all that his parents had, and they had been retired for over 20 years. Needless to say, I was the one that had to break him the bad news. Even with taking SS at 62, and collecting his pension, the numbers were so bleak that he will end up having to work the rest of his life.

Now if your taking the time to read this article, I’m assuming that you have a 401k plan currently, or know someone that does.

In my experience of working in Corporate America, the 401k is the most underutilized asset in the hands of employees.

First of all if you don’t sign up, you are throwing away thousands ever year in matching incentives, not to mention compounding interest, and tax savings.

Secondly, if you invest and only look at this account once a year, you are not doing yourself any favors. Yes, I know that this could be considered a hot topic. Investing firms around the world will tell you to put your money into an account and leave it. The S&P will traditionally make you 7-8 percent on average over the course of 10 years, however, this does not take into account what happened in 2007-2008, where most of the Baby Boomers lost a majority of their hard earned money in the crash. Was it predictable? Maybe, but most did not see it coming. They sat back and grimaced as they helplessly watched their savings dwindle. If your lucky, you may have earned back the majority of your savings, however, that is not the point. You lost 7 years of gains…

Next, don’t invest in a fixed stock automatically when you get paid. This is absurd. As an example, I was reviewing an individuals stock portfolio. I was curious as to why every pay check he was investing in the company stock that had reached record levels near $108 a share. Because he had not reviewed his portfolio in years, he, like many were unaware that the company began paying the 6% match with company stock by default. The only way to change this investment strategy was to go in and request the change manually. I set his automatic bimonthly investments to go into a “Stable Fund” (An account that is treated like cash), instead of buying company stock at record levels. Together, we researched stock plans and corporations that we felt offered the most value. At intervals, we moved cash from the Stable Fund, and transferred to more viable options.

Last, don’t settle. At lunch with a former colleague, we discussed the difficulties that 2016 offer the world of business, and discussed ways to counter act the negative effects. If you were like him, you did not get a merit raise for the work contributed in 2015. We discussed ways to continue to be profitable even as an employee.

Instead of working through lunch or break on a project for your employer, take that time in the day to focus on your personal growth and understanding of the markets. Set financial goals and research options. Remember, that although, your 401k is a long term investment, there are plenty of opportunities to make thousands daily, that far exceed a merit raise at the end of a hard working year.

In the coming blogs, I intend to show real life gains through a managed 401k account, and give ideas and suggestions on how to maximize your retirement savings.

Cheers,

Riverboat

 

 

 

 

“The Mirage” Chasing Financial Independence

As I took off this past week to take the family snow skiing in the mountains of Colorado, I became enthralled with life outside of the traditional 9-5 grind. This was not a new thought, or even a phase, this was something that I have been thinking about for years. Is financial independence a mirage, or something that is actually attainable?

I like to think of myself as a practical person. I did awful in school as a child, and as it turns out, I was not necessarily ignorant as my family and friends often liked to joke about, but rather, I did not see the practicality of school. Sure it was good to know a bit of Geography in case I ever traveled outside the state of Texas, however, I thought an hour and half every day was a bit of an overkill. I remember staring out the window thinking “is this the best that life has to offer”?

Now as an adult, I catch myself staring out of my cubicle, watching employees move frantically around the office, while my mind slows everything down like a bombing scene out of Saving Private Ryan. I can’t help but to think that there has to be something more empowering, something more rewarding, something…

The truth is, financial independence is an end result, not a process..

Each avenue to obtaining the possibility of financial independence is going to look different for everyone, and this is a good thing. We each have different God-given talents.

While attending a college graduation for a childhood friend, a well-to-do alumni gave a speech that I will never forget. She started off by holding a ring in the air. The ring symbolized a traditional ring given to employees of companies after 30 years of service. By starting her own company, she earned a life time of wages in just a three-year stint. At the time, I thought she was a bit obnoxious about her success, but today, I realized that she was right. First of all her speech stuck with me, which should be the goal of any public speaker, and secondly, she wanted the soon to be graduates to go out in the world and create something from nothing. She wanted them to not accept the status quo of settling.

So what have I learned?

1. Each person should use his or her unique talents, skill sets, and passions, to work toward financial independence.
2. Find a niche. I used to despise this word, now I embrace it. Use your unique talents to develop niche solutions, in which you find your own space in the market place.
3. Perseverance. For the majority, failure is part of the process. Those who persevere will have greater chances for success.

 

Cheers,

Riverboat