Producing Value versus Being Important

Leaders and Creators need egos to persevere and enlist support for their endeavors. One of the traps of ego is the need for recognition. Receiving positive recognition for your accomplishments is rewarding for most people and in fact motivates many leaders. The trap comes up to bite you when you attempt to be important rather than of value to others.

In America today marketing takes precedence over research. The sizzle gets more attention than the steak. Do you remember the 1984 tagline, "Where's the beef?". It is common knowledge that we are both an impatient and impressionable society. This all feeds the ego into trying to be important rather than being of value. Being of value is a soft sell but a long term winner. Being important is a quick sell -or- a hard sell and typically temporary.

Joe Dominguez, referenced in other blog posts of mine, presented the following model in his workshop on "Transforming Your Relationship With Money"

HAVE-DO-BE versus BE-DO-HAVE

Have is the result whether its money or praise or recognition.

Be is the inherent qualities and attributes.

Do is the activity.

According to Dominguez, true success comes from BE-DO-HAVE. That is; BE honest, hardworking and professional when you DO your work and you will HAVE rewards.

He also says that failure comes when the focus is HAVE-DO-BE. That is; if I HAVE money, fame and resources then I could DO all these things and then I would BE happy or succesful.

Value is delivered in many forms whether it is the support and assistance you provide to those in need or the pleasure you provide to those who listen to your music and observe your art. Within organizations value can be multi-faceted across the various stakeholders.

Providing value to your customers is contexted by the product or service that you deliver but ultimately comes down to the customer receiving benefits that they value far beyond the money they pay you.

In educational organizations, some value comes from a degree or certification but true and deep value comes from the life-long benefits of the application of knowledge, skill and awareness or perspective imparted by the education. Value in education is also delivered through relationships both in the form of peer relationships with fellow seekers and in mentoring relationships with faculty members.

Leaders and creators who focus on providing value rather than being important are more likely to keep both themselves personally and their organizations, grounded and engaged in the work that will create value to society. When you regularly produce societal value then importance is an attribute given to you by others rather than an illusory and ego driven futile quest.

Financial Independence: Tough Times and Bankruptcy

When it comes to money, I continue to suggest that you read either the book, Your Money or Your Life by Joe Dominguez and Vicky Robbins or find the old taped course " How to Transform Your Relationship With Money and Achieve Financial Independence" by Joe Dominguez. Money along with Food are two things that live an emotional life within us that often distorts how we use and respond to them. This distortion leads to us acting in a way that may satisfy an emotion in the short-term but leads us away from what we want.

When you combine the emotion of your childhood regarding money, with the general lack of education we receive about it, it is no wonder that most of us have little to show for the amount of money that has passed through our lives.

The collapse of the real estate and stock markets in late 2008 and the tightening of consumer credit has affected both the overall economy and nearly every household in a significant way. I am in a tight financial position as a result of three events in 2007 and 2008.

1) My divorce settlement was negotiated in August through October of 2007, when the S&P500 peaked and my collective investments were near their maximum value. I agreed to current and near future cash payments to keep as much of my investments as possible. Although my non-real estate investments have bounced back since January of 2009, they are still significantly off their peak.

2) I have been subsidizing college costs for my three children for the last five years and thus spent down my cash reserves and increased my debt.

3) The collapse of the financial markets in September of 2008 caused an instantaneous disruption to the signing of new construction contracts. My primary source of income in 2008 was my position as VP of Finance and Operations for a small green energy construction firm. As the company completed its existing contracts we needed to lay-off nearly everyone and I left to go back to consulting and project management. My agreement had a significant profit sharing structure which was completely wiped out by the Fall of 2008 economic collapse.


In a nutshell, I took a hit which will take several years to overcome, but I am still in a better position than most American households primarily due to the principles in these courses and obtaining an education in how to invest.


Even in a period of temporary distress, the principles of achieving financial independence apply. Your ability to save and invest for the future is the primary lever due to the compounding effect of earning money on your invested money. The relationship between your spending and your fulfillment needs to be examined. Where do you get your morning cup of coffee? How much do you spend a year on it? Can you make it at home less expensively?


Change the word "coffee" to fast food or your favorite convenience or impulse spending item. The point is to either start saving some seed money or to at least begin paying down debt. I would suggest that you do both simultaneously. If you both build a cash reserve and add to the rate at which you pay down your highest remaining interest rate debt, you will both build a cushion in case of a lay-off or income disruption and create more money to build a cushion over time by reducing your outgoing interest payments. (In the current environment, paying off credit cards completely has lead to some people having their credit lines dropped so I would build cash reserves ahead of a complete pay down.)


What if the financial hole you are in is too big to work your way out of it? If your debt from real estate, credit cards, medical bills or the failure of a small business exceeds what you expect to earn in the next two years, you need to strongly look at bankruptcy. Bankruptcy is a legal remedy for obtaining a fresh start in a financial life. The rules are strict and bankruptcy will impact your ability to borrow money for the next 10 years but it can be a useful tool. Companies of all sizes use bankruptcy to secure a new life, when they can not both operate and meet their debt payments.


In many states, bankruptcy will not cause you to lose your home but in others it will. Your 401K and IRAs are protected in bankruptcy, so if they contain most of your savings, those savings will still be there after bankruptcy. One alternative option for eliminating debt that you will see advertised is debt restructuring for credit cards, this can halve your credit card debt but will create income tax liability for the debt that is forgiven as well as damage your credit rating. To see whether bankruptcy may be a tool on your road to financial independence, you will need to speak with a lawyer or financial advisor with bankruptcy expertise.


After two years, your bankruptcy will not affect your ability to qualify for a mortgage. The ten year damper on obtaining consumer credit may be a small inconvenience compared to having much of your income going to debt repayment and depleting your retirement savings.


The methods in the book, Your Money or Your Life, will help you live a life without taking on debt as a means of short-term funding. It is important to remember that even a person of modest means can gain leverage over their financial life. It is also important to remember that "possessing" money is not the goal but rather having that having financial resources supports the goal of living a grounded creative and values based life.

Financial Independence: Materialism and Fulfillment

When creating legacy, financial independence is about resources and means that are focused upon fulfillment as the end result not about the creation of additional material wealth as the end result although this may occur.

Materialism as defined by Merriam-Webster
http://www.merriam-webster.com/dictionary/materialism
b) a doctrine that the only or the highest values or objectives lie in material well-being and in the furtherance of material progress

When Madonna sang that she was "living in a material world" and that she was a "material girl". There was no need for a cultural explanation as we live in a world where material well-being, wealth and possessions are how we measure much of our success.

The allure and problem with materialism is that it works in part. Many of the most troublesome difficulties we face are those things that "work in part". The first money and first material possessions that a person obtains have a great positive impact on that person's life. In terms of Abraham Maslow's hierarchy of needs (first published 1943), they are used to meet the survival needs of food and shelter.

As you progress up Maslow's hierarchy to the Need for Love and Self Esteem money matters but increasingly less so. I remember in college being so poor at times, that I avoided dating because I could not afford it. I did not have enough money to take someone out to eat, did not have transportation and was somewhat embarrassed about in the relative wealth of my roommates and friends at Syracuse.

As our spending increases from necessities to comfort items our fulfillment per dollar spending drops off. When our spending moves from comforts to luxuries our fulfillment per dollar of spending not only drops off but can easily go negative. I first came across this concept while taking an audio course, Transforming Your Relationship With Money: Achieving Financial Integrity, Intelligence & Independence by Joe Dominguez. http://www.simpleliving.net/main//item.asp?itemid=930

Joe Dominguez died in 1997, but he formed the not-for-profit educational organization, the New Road Map Foundation with Vicki Robin. They published a book on the course called, Your Money or Your Life. You do not need to be as frugal as Joe or Vicki to enjoy the benefits of the insights and tools offered in the course and book.
http://www.financialintegrity.org/index.php?title=About_the_New_Road_Map_Foundation

My revelation for taking this course was not my experience as a poor student at Syracuse but rather my experience 15 years later when my income moved from $80,000 to $190,000 in a short time frame. This sudden relative affluence was followed by an increase in spending but not an increase in fulfillment.

As your standard of living increases the need to maintain a certain income and the complexity of your life also increases. To maintain my income, I found myself away from home about 15 of the 20 mid-week days of the month. I stayed in nice hotels and ate at nice restaurants with my business partner and clients while my children grew up at home with their mother. I also found myself as time went on doing work that was not fulfilling for people that I would not have spent time with if they were not paying me. (I did do a lot of fulfilling work with a lot of wonderful people but this was not always the case and as the financial pressures of the business grew we took work in a few very difficult environments.)

I began to question the fulfillment that I was gaining from both my spending and my income. In the area of spending, I began to make spending versus saving decisions. If I cut an area of spending then I could capture the savings and then make investments which would provide future income.

I began by measuring and then questioning the amount of fulfillment I was gaining from various categories of spending. Convenience restaurant eating (fast food and similar) was an area that our family had begun to spend a lot of money upon due to the pace of life. The food and experience was not very good but it was convenient. My estimate was that we were spending nearly $5000 per year on this. The fulfillment oriented decision was to only use convenience restaurants once per week and to work out a shopping plan and menu to handle most of the need for convenience.

We were able to implement this, save several thousand dollars per year and gain fulfillment through a healthier diet and saner eating experience around our dinner table. (I am not claiming that our dinner table was sane but it was saner than the same five people eating in a convenience restaurant.)

When you look at costs look at the annual cost of something. Dunkin Donuts coffee on the way to work costs about $2 a cup and 50 weeks times 5 days equals a $500 expense. For any daily business related expense you can use this metric: daily cost times 250 = annual expense. A $4 cup of Starbucks (my favorite) times 250 equals $1000. While I occasionally drink a cup of Dunkin Donuts or Starbucks coffee, I buy good coffee at Costco and make it myself at a cost of about $120 per year. By the way, I invested money in Starbucks in the late 1990's and made a decent profit from other people's coffee spending habits.

If you annualize your spending categories, you can get some insight into how you can transform your spending to create a pool of money for investing. Further blogs will discuss more thoroughly how relatively conservative long-term investments can help you create real financial independence that supports your spiritual path and creative vision.