4 Skills To Have If You Want To Succeed

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What do the leaders in a business have that you don't? Very few people rise to the top of an organization and lead it successfully. So what attributes do they possess, what skills, and knowledge do they bring to the table.

Business brings with it a daily supply of problems. They may include many different types of issues. They all have to be addressed. The hard part, the skill that separates us from the leaders is their ability to determine the critical issue of a conflict. They have the ability to listen carefully and spot the real issue of any situation.

 Issue Discernment
The problem is for the skilled listener is to cut through the distractions, spin and noise. Listening and asking the right questions because you need to understand the facts of a problem. You must have the ability to get to the underlying issue by cutting through the motivation and personal agenda of all you talk to determine the facts. Cutting away the fat of the problem till you get to the meat of the issue. If you can do that, you will succeed.

 Ability To Lead Change
Now that you have identified the issue at hand, it's time to work a solution. Here you will deal with upsetting the status quo. You have to convince people to change direction. This is sometimes tough to do because habits are hard to break. You make enemies along the way, but you must be able bring your people along in through constant communication. The process must consist of explaining the benefits to the company and the employees who will implement it. You will have resistance, so with those people you may have to refine the process and ask the difficult people to join you in the changes. This set of skills is what real leaders have and what it takes to be in the top positions of business.

 Picking Your Battles
The third skill to have is the ability to choose you battles wisely. The best kind of battles are those with no opponent. For example instead of having a cost cutting campaign that will cause derision, have instead a quality improvement drive. A lot of negatives arise from the first, but who would not be on board with the second. The trick is to avoid direct confrontation with organized opposition.

But is it really a battle with no opponents? If your fighting against entrenched procedures, it will feel like a battle. The best battles are against those things that will have the greatest benefit across multiple departments. You will make many allies for future battles.

 Inspire People To Greatness
The last trait to have is to bring extraordinary results from ordinary people. Most organizations have ordinary hardworking people in them. If you can get them producing you be appreciated by your own superiors and boost your capital in the organization. The leader must know how to get exceptional results from the average producers in the company.

Your not going to have these great results come over night, but is possible to bring them up incrementally. To do this you must set up an environment of instruction and training that helps them make better decisions. With that you will get better results from their work produced. You may not get superior results at times, but you will get above average results which is the norm of your competition. The kind of environment you give your people for making better decisions and the bringing them along as an equal will get the results you want.All the while really leading as a dictator.

These traits I have listed are only a start. If you have the ability to lead, your own traits must come forward and be put to work. It's easy to discount the abilities the leaders in an organization have as inconsequential. Yet they are the leaders and your not.

What Are Guaranteed Retirement Accounts?

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In my last post I reported how there is talk in congress to supplement Social Security with a new type of account called a Guaranteed Retirement Account. The plan itself has been finalized and has been talked about for several years. At the present time boosters of the plan are trying to sell it around Washington.
This account is the idea of Teresa Ghilarducci.
There are many pros and cons to this plan. It will have a hard time being accepted because of the current dissatisfaction with government. I will try to give a concise explanation of its workings.

How Guaranteed Retirement Accounts work

Structure. 
Guaranteed Retirement Accounts are like universal 401(k) plans except that the government, as befits a large and enduring institution, will invest and manage the pooled savings.
Participation. 
Participation in the program is mandatory except for workers participating in equivalent or better employer defined-benefit plans where contributions are at least 5% of earnings and benefits take the form of life annuities.
Contributions. 
Contributions equal to 5% of earnings are deducted along with payroll taxes and credited to individual accounts administered by the Social Security Administration. The cost of contributions is split equally between employer and employee. Mandatory contributions are deducted only on earnings up to the Social Security earnings cap,2 and workers and employers have the option of making additional contributions with post-tax dollars. The contributions of husbands and wives are combined and divided equally between their individual accounts.
Refundable tax credit. 
Employee contributions are offset through a $600 refundable tax credit, which takes the place of tax breaks for 401(k)s and similar individual accounts and is indexed to wage inflation. Eligibility for the tax credit is extended to part-time workers, caregivers of children under age six, and those collecting unemployment benefits. If an individual’s annual contributions amount to less than $600, some or all of the tax credit is deposited directly into the account in order to ensure a minimum annual deposit of $600 for all participants.
Fund management. 
The accounts are administered by the Social Security Administration and funds are managed by the Thrift Savings Plan or similar body. Though funds are pooled, workers are able to track the dollar value of their accumulations, as with 401(k)s and other individual accounts.
Investment earnings. 
The pooled funds are conservatively invested in financial markets. However, participants earn a fixed 3% rate of return adjusted for inflation, guaranteed by the federal government. If the trustees determine that actual investment returns have been consistently higher than 3% over a number of years, the surplus will be distributed to participants, though a balancing fund will be maintained to ride out periods of low returns.
Retirement age. 
Participants begin collecting retirement benefits at the same time as Social Security, and therefore no earlier than the Social Security Early Retirement Age. Funds cannot be accessed before retirement for any reason other than death or disability.
Retirement benefits. 
Account balances are converted to inflation-indexed annuities upon retirement to ensure that workers do not outlive their savings. However, individuals can opt to take a partial lump sum equal to 10% of their account balance or $10,000 (whichever is higher), or to opt for survivor benefits in exchange for a lower monthly check. A full-time worker who works 40 years and retires at age 65 can expect a benefit equal to roughly 25% of pre-retirement income, adjusted for inflation, assuming a 3% real rate of return. Since Social Security provides the average such worker with an inflation-adjusted benefit equal to roughly 45% of pre-retirement income, the total replacement rate for this prototypical worker will be approximately 70%.
As you an see there are many problems to overcome:

• Mandatory participation.
• Additional payroll deduction in addition to Social Security.
• Administration by Federal government.
• Fixed rate of return.
• Balance minus 50% returned as death benefit.

This plan may have a chance if all the mandatory and restrictive dictates are removed. The plan should not be run by the government. It should be in the public sector. If this plan and a adaption of the Chiliaen Retirement Plan could be implemented, we may have something.

Uncle Sam Wants Your 401(k)

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If you thought you only had to worry about the government messing up Social Security, think again. Now you have something else to worry about, your 401(k). If  Sen. Tom Harkin, D-Iowa and Sen. Bernie Sanders, I-Vt. get their way your 401(k) will be illegal. On Oct. 8, 2010, the two senators from Health, Education, Labor and Pensions (HELP) Committee held a hearing on"Retirement Security in America." Among the proposals discussed was"Guaranteed Retirement Accounts" or GRA's.The purpose of the GRA proposal is to force Americans to stop putting their retirement savings in 401(k) accounts and send your money to the government instead. Your retirement tax deduction would also disappear. This proposal states that you would receive 2% interest on your money. You would receive your monthly payment out it. If you died with a surviving spouse, they would receive only 50% of the balance.    

In February, President Obama released the"Annual Report of the White House Task Force on the Middle Class". GRAs are among the proposals recommended in the report for further study.

Can the government believe that we would give up our 401(k)'s to them? People already have little faith in their Representatives. To hand over 3 trillion dollars of our money to the people who already botched the Social Security system is insane.

The facts of this proposal are still in flux. It would be to every ones benefit to keep an eye out for further developments. But with the shift in power in the House of Representatives this may be D.O.A.

Related articles

• Don't Rely on Social Security (thesimpledollar.com)
• The Big Rip Off Settles In (barbaradiamond.blogspot.com)
• Peter Orszag and the Drive to Cut Social Security (my.firedoglake.com)
• Liberals aiming to destroy your 401k? (chicagonow.com)

Why Women Need To Save More For Retirement

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In a conversation with my wife about our future financial plans the subject of longevity came up. We discussed our possible longevity and how it would effect our retirement. Our estimation of a possible life into our 90's came up. Determining we could live so long and the statistics of women living longer had to be factored into our plans.

The fact is women live longer than men. Lucky them. Because of this it makes sense that they should prepare by saving more money. If a women is single and never marries she has the whole burden alone.

Women have a second problem to deal with and that is they don't have complete earnings parity with men. Some of this has to do with the type of job and some with history. But whatever the reason is they are not there yet. If the salary difference is 15% it puts women at at a disadvantage in saving for retirement. So this can only be made up by saving and investing more.

Another problem only women face is whenever they have a child, they leave the workforce for a period of time or maybe permanently. Men don't have this problem. Staying home with junior ceases the salary and savings.  Men are lucky they aren't put into this position. Here is when mom has to depend on dad for current support and future retirement support. So men let's be grateful you are trusted to carry out your role.

Men don't have to depend on their looks as women do. Sadly our society sees women's looks as a diminishing asset. Over time age takes the focus from older women to younger women. You see in the media how the once beautiful starlets are tossed aside for the newer, younger models.

Time and our culture work against women in the workplace. Maybe in the future, someday we will see economic equality in the workplace. But for the time being women have to compensate by saving and investing more.  

Your Weekend Roundup

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Welcome to the Weekend Roundup. I am listing some of this weeks great posts. Enjoy.

• Over at Personal Finance By The Book, Joe had a great post "How Do You Define Wealth? Hope For The Little Guy". It was very thought provoking and personally challenged me.
• The Biz of Life has been running a great series of videos, one of my favorites was "Does Government Intervention Help or Hurt In the Long Run?" Its an interesting look at government intervention in our financial markets.
• Consumerism Commentary wrote a post "The Worst Investment California Has Seen" it tells of Meg Whitman's spending of $160 million of her own money running for governor of California. It received a boat load of comments.
• Get Rich Slowly had me thinking with their post "More Women Participating in Retirement Plans". It was a good look at what the lady's are doing and should be doing with their finances.
• Canadian Finance Blog post for potential home buyers "Owning a Home - Be Prepared For the Expenses". It's an eye opener for you first time home buyers.
• Oblivious Investor has good advice for investing, "Simple Investing Is Better Investing". Good advice for beginners or pros.

Good news for me, I was mentioned at Mint.com. How Do You Handle Your Finances? Mint's Personal Finance Roundup".

The 5 Best Financial Quotes

Quotes convey a lesson given by a learned and respected person. We try to remember the good ones so people will think we are smart. I am including some of my favorites that have a financial application.


1. "You can finance for your child's education, but you cannot finance for your retirement."


 I don't believe this a notable quote but maybe just a motto used by financial planners. It's true because the first goal makes the second goal harder to do. Every penny you put into that college fund is one that you can't put into the retirement fund. Those of you without children skip this quote. If you are smart the idea of financing is wrong. Replace the word finance with saving and you'll be better off.


2. "The most powerful force in the world is compound interest."


This quote is attributed to Albert Einstein, one of the smartest men ever to have lived. It's strange to have a scientist make such a quote. You would think he would have his mind on more scientific things. But, it makes sense that someone who spent much of his time putting the universe into mathematical equations would notice, compound interest. He seemed to be a frugal and down to earth man so saving must have been important to him. His professor salary must have been meager and saving was a necessity. He was involved with the most powerful energies of the universe and equating it with compound interest is incredible. He was a student of math and must have been impressed with the beauty of such a simple formula and it's encompassing benefits.


3. "A man is not a retirement plan."


I don't know who said this statement, but I can agree with it. This quote is so important. I would say it to my sister or my daughters.  It's a truth and also a warning. It means you must prepare for your own financial future and not depend on anyone. It's something you don't usually say to a male because you take it for granted a man will support himself. But in our culture we want to take care of our lady's. It was the culture coming out of the 50's and a chivalry mindset. If you have daughters like I do you probably have already drilled in the notion to stand on your own two feet. That's through a good education and a good paying job.


4. "Money doesn't buy happiness."


This is one of my favorite quotes. I don't really know who said it but I take it as an axiom. I think we can all agree it's true. It's only when we don't have a lot of money  can we truly agree with it. But the idea is true happiness is a state of mind which can not be attained by  material things. It can only be had by positive interactions with other people. While money buys material things, that decay with time, and experiences that can give momentary happiness. Real happiness can only be attained a giving and receiving heart.


5. "A penny saved is a penny earned."


Of course we all know Ben Franklin gave us this quote. It's a colloquialism  for saving money. But I has a deeper meaning. It could mean that the function of saving money is actually akin to work. You are performing a unit of work by saving money. Or maybe it means that the money you save is more valuable than the money you spend. The money that is spent has a value received that immediately dissipates after the purchase. While money saved maintains it's full value and gains more value with time.