Money Secrets

from Able Leader, May 2008

by Steve Kaye

Here are three uncommon ways to regard money.

Note: Almost everyone reacts with surprise when I talk about things like this in my Time Management Workshop.

My intent is to give you a friendly push toward possibilities that will make you more successful.

1) Your Financial Responsibility

Do this: Divide the annual gross income for your company by the number of employees.

Then repeat this calculation for all of the companies in your industry. Compare the number for your company with the numbers for your competition.

Result: You now have a handy comparison for employee effectiveness (and efficiency) in producing revenue.

Larger numbers are good, and smaller numbers are bad.

Who thinks about this: Your top management. They use these numbers to justify layoffs and reorganizations. They also consider these numbers when planning acquisitions (i.e., buying other companies) and liquidations (i.e., selling assets).

Your next step: Use these numbers to plan your career. For example, you might consider them when deciding which job offer to accept. You can also use them to make general predictions about future events (specifically changes) in your company.

And, of course, the number for your company shows how much is expected of you. Thus, use your time well. Avoid common time wasters such as pointless meetings, water cooler chit chat, and surfing the net.

2) Your Speaking Fee

Do this: Calculate the cost of your next presentation. It will be the product of the number of people in the audience, the length of your talk, and the average labor cost for those attending. Then add to this any logistical costs, such as room rental, supplies, and equipment.

As a rough estimate, you can use a labor rate of $100/hour, which is a conservative cost for business professionals in major corporations. And so, if you spoke for an hour to 20 people, your speaking fee is at least $2,000.

Who thinks about this: Your boss and other executives who are in your audience. Leaders want a positive return on their investment. Specifically, they want presentations that help them make decisions, discover new possibilities, or become more effective leaders.

Your next step: Realize that you are doing more than just giving a presentation. You are inspiring people to take actions that can change your business. And so, make sure that you prepare appropriately.

Thus, determine the goal for your presentation, interview key attendees to learn about their expectations, and rehearse your presentation. Make sure that you present new, thought provoking, valuable ideas.

3) Your Financial Future

Do this: Calculate how much you must save each month in order to retire with a million dollars.

You will need a financial calculator, a spreadsheet, or the help of a financial planner.

And to help, here are a few possibilities:

* Save $60/month at 10% for 50 years

* Save $160/month at 10% for 40 years

* Save $450/month at 10% for 30 Years

* Save $1350/month at 10% for 20 Years

Many of you are probably thinking:, "So what. It's too late."

And it may be too late to accumulate a million dollars if you have only a few years.

But consider this: do you know a teenager? Or do you know someone who is just starting a career? Because that fifteen-year-old could easily retire with a million dollars by saving only $60/month.

Note that I used a return on investment of 10%, which is less than the average growth of the DOW over the past 100 years. This strategy has the greatest likelihood of success when using standard mutual funds, instead of get-rich-quick stocks, which can drop in value faster than you can say, "Aw, nuts!"

Who thinks about this: Rich people.

Your next step: A small, methodical savings plan can make a huge difference over long time. Even if you have just a few years, something is better than nothing. And if you are young, this could be the key to having a financially comfortable future. Or, if you know young people, you may be able to offer this as priceless advice.

Much success,

Steve Kaye
714-528-1300