Posts Tagged ‘finances’

Time for a Change #24: New Ways To Finance Your Future

by William Reed on September 14, 2012

When thinking about financing your future, most people think of savings, investing, insurance, or financial planning. These are the disciplines that make up most what we think of as the world of finances. How we manage our money is the core of financial planning, but sometimes it helps to step back and reflect on how our money manages us. The ways that we think about money affects our behavior towards it, and the Mandala Chart can again provide multiple windows for reflecting on our thought and behavior regarding money. You can download the FINANCES MANDALA and follow it through the topics below.

Melodious Beans

In Japanese the character for abundance is written 豊 (yutaka), which curiously is made up of the radicals for melody 曲 and beans 豆, a happy image that might even please the bean counters in the accounting department. Soy beans are the source of many food products in Japan, one of the most popular being soy bean curd, known as tōfu. What many people do not know is that there are serious tōfu turf wars going on behind the scenes, which I wrote about previously in an article called Tofu Wars: Battle of the Bean Curd. It is a not so melodious story about how supermarkets in Japan sometimes sell tōfu below their cost as a loss leader to attract people into their stores. For the tōfu specialty stores (yes, they exist) this is a disaster, because they cannot possibly compete if they sell their core product below cost. My friend and co-author wrote a poem about this, which you can download as an excerpt from our book, Budo, Blogs, and Poetry.

What to the supermarket might only be a corner display, to the tōfu specialty shop is a move aimed at the heart. Supermarkets could rotate their loss leaders among different products to still attract customers without decimating the specialty shops. The tōfu shops on their part could offer varieties of tōfu not found in the supermarkets, and educate customers about the value that justifies the price difference, as well as how to prepare delicious tōfu dishes. And consumers can think twice about what happens to other businesses when they buy loss leader products. One secret of abundance is to take the Hippocratic Oath in business and do no harm.

The Straw Trader

There are also lessons in abundance from a Japanese folk tale called Lord Straw Stalk, in which a wandering poor and penniless boy was struggling from hand to mouth, doing day labor in exchange for his food. He often stayed at Buddhist temples, and praying to Kannon, the Goddess of Mercy, he received a promise that he would be blessed with a happy life and great rewards. It all started with a  stalk of straw, the end of which he tied a buzz fly to for entertainment. Seeing this toy, another boy offered him three oranges for it. These in turn he gave to a woman suffering from thirst, who gave him a roll of woven silk cloth in appreciation. He met a Samurai who offered to give him his tired old horse in exchange for the woven silk cloth. The boy nursed the horse back to health, and offered to sell it to a wealthy landowner, who instead gave him a patch of land to work. This he did very well, and thereby impressed the landowner to offer the boy his daughter in marriage, and the large house in which to raise their family. He became know as Warashibe Chōja, Lord Straw Stalk. The blessings of the Goddess did in fact come true, because he traded his way up to greater wealth, offering value to everyone he met.

A similar story can be found in the West, well known as Master Cat, or Puss ‘n Boots. The lesson is that quite humble things can be of great value when offered to others in the right spirit, and at the right time. It is possible to trade you way into abundance.

Move Less, Attract More

This was the title of an article I wrote on the Abundance Mentality for my Art of Flexible Focus column, Move Less, Attract More. It contains a Hasidic story related by Martin Buber about the difference between Heaven and Hell. Both were rooms in which an abundance of food was laid upon a table, and all of the people in the room had long wooden spoons tied to their arms, making it impossible to feed themselves. In the room called Heaven, all of the people fed each other, whereas in the room called Hell, languished and starved trying in vain to feed themselves. Both rooms offered the same conditions of abundance. It was selfishness and greed that created the condition of Hell, generosity and cooperation that created the condition of Heaven.

This is a simple and powerful story if you think about how it applies in your own life. How do you get fed when your hands are tied? Find a way to feed others first, and soon the mentality of abundance will spread to the benefit of all.

Rules of the Game

Know the rules of the game. They are not always spelled out clearly, but the world of finances is set up with certain rules and laws that ensure that somebody gets paid and comes out ahead. Many contracts are set up specifically for that purpose. While the systems may be complex, they are designed to reward the people who set up the rules, whether in real estate or in taxation. These rules do provide stability in society, but they are designed to serve the people who made the rules.

You may not be able to avoid those rules, but you can gain strength by playing in your own court. Find ways to work in your area of strength, where you know the rules and can sometimes have a hand in setting them up. This is one way to leverage your finances to abundance.

The other is through giving. Givers gain, because they play by the rules of a higher power. The universe rewards those who help others.

Conscious Consumption

One way to finance your future is to enhance the present moment. Zen Meditation can help you regain awareness and appreciation of what you have got, as well as help you discern what you really need. The mind is easily led into a path of unconscious and unending consumption. Meditation can help you become more calm and discerning, that will certainly make you more conscious of your consumption, less likely to be wasteful, and more open to real opportunities in your life.

It will also make you more conscious if you keep track of your receipts, separating them into categories so that you are more aware of where your money is actually going. Making purchases by cash rather than credit card can also give you a greater sense for what is going out, and more attention to why. The conscious consumer gets what he or she needs, and spends more wisely.

The Midas Touch

Everyone knows the story from Greek Mythology about King Midas, who in his greed for gold developed a golden touch, so that everything that he touched turned to gold, including his food and even his own daughter. Despite his riches, he died miserable and hungry.

Greed is a sure way to jeopardize your financial future. Gold Diggers are people who marry for money, where the motive force is not Love but Greed. Instead of a Golden Touch, why not develop a healing touch, a Green Thumb which gives life and helps things and people grow? Watch the people around you and help them to thrive, and you will build trust that will finance your future in subtle but certain ways.

Pull Power

If you want to travel far, you should hitch your wagon to the right horse. Associate yourself in a positive and helpful way with people who have the power to pull you forward. When you clearly express the value you have to offer, and your willingness to share it, people will come forward who want to associate with you for mutual benefit. If the relationship is based on trust and transparency, this can be a very positive way for both sides to finance their future.

The secret is to keep it simple and create a combination that makes things easier and better for both sides, a win/win relationship.

Remember and Help Them

No matter how bad you feel your fortunes have fallen, there are masses of people who are much worse off than you, and they need help as much or more. “I felt sorry for myself having no shoes, until I met the man who had no feet.” As you go about thinking of how to finance your own future, give some time, energy, and assistance to those less fortunate.

Study the inspiring work of Muhammed Yunus, founder of the Grameen Bank, a micro-finance organization started in Bangladesh, which gives loans to poor entrepreneurs without requiring collateral, helping them to leverage their skills and finance their own futures. The organization and it’s founder were awarded the Nobel Peace Prize in 2006.

Whereas most people search for bargains in which you buy one and get one free, there is an organization which takes the opposite approach of connecting buying to giving, Buy1Give1. This innovative approach to micro-giving enables businesses and individuals to choose projects that resonate with themselves and make a real difference in people’s lives. Your daily purchases can literally finance the futures of people around the world. Find out how it works and give it a try.

William ReedWilliam Reed specializes in applying practical wisdom from Japanese and Asian culture to solving the problems of modern business and living. He is the author of the Flexible Focus column on Active Garage, the syndicated column Creative Career Path and the book A Zoom Lens for Your life. William is also a Representative Director and Co-Founder of EMC QUEST Corporation, which provides Coaching for Communication and Change, World Class Speaking™, and Accelerated Action with GOALSCAPE™.
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Flexible Focus #21: The 8 frames of life: Finances

by William Reed on September 30, 2010

It is easy to understand the importance of finances in supporting and enriching the other areas of life. Finances occupy a significant portion of our time and energy.

They are difficult to get right, both because of the discipline required, and because the rules keep changing. It is important to put finances into perspective, because if you place too much emphasis on money, it can make your life miserable.

Peter Drucker, one of the greatest thinkers on management and life/work balance of our time, said that of the people he knew whose main goal was to make money, without exception, they were all utterly miserable.

Money should be part of the plan, a means to an end, not an end in itself.

Playing the right game at the right level

Wealth creation has many things in common with sports. There are spectators who pay to watch the game, and there are players who get paid to play. There are players at the amateur level, and players in professional sports, all the way up to the world stage. The investment, risks and rewards are vastly different, depending on the level at which you play.

In business and in sports, if you want to be a player, it is critical that you select a game for which you have some natural talent. The game must also be rewarding enough that you will stay with it long enough to achieve your aspirations.

Roger Hamilton, author of Your Life Your Legacy, created a system called Wealth Dynamics which helps you determine your path of least resistance to wealth creation, and the strategies which are most likely to help you achieve it.

Roger Hamilton studied the most successful and wealthy entrepreneurs of our time, and profiled their strengths into 8 types, Creator, Star, Supporter, Deal Maker, Trader, Accumulator, Lord, Mechanic. It is not enough to follow the approach recommended by a successful person. The way in which they created their wealth may be a proven concept for them, yet it might hold no interest or possibility of success for someone with a different wealth profile.

These 8 types are positioned on a Mandala-like matrix. The strengths and weaknesses, as well as business models and partnerships patterns can all be deciphered from the Wealth Dynamics Square. If you want to master wealth creation, a good place to start is to learn more about Wealth Dynamics, and how you can use it to find your flow.

Learning about business and economics

While Economics has been called the dismal science, when you view it with a flexible focus perspective you see how it is connected to everything else. This transforms it into something interesting and relevant. The fact that governments, bankers, and business people so often get it wrong proves that it is far from an exact science. Select and read from the books, magazines and news sources which help you make sense of the economy and business. Be sure to read from a balanced menu, and take it all with a grain of salt. The experts are often wrong.

Remember that wealth creation is not just about cash flow. It is more about creating and leveraging value, and this can often be done by barter and collaboration, without any cash exchanging hands.

The Mandala Chart helps as a tool for flexible focus, and also serves as a reminder that the world we experience depends on our interaction with it. It is best to keep positive expectations, and search for solutions rather than problems.

If you value wealth, then you should invest the time to read about wealth creation. Here is a list of 8 of my favorite books on this topic. These books cover the fundamental principles of finding your path of least resistance to wealth creation and preservation.

  1. Your Life Your Legacy, by Roger Hamilton
  2. 50 Prosperity Classics, by Tom Butler-Bowdon
  3. Found Money, by Steve Wilkinghoff
  4. Wink and Grow Rich, by Roger Hamilton
  5. The Five Rituals of Wealth, by Tod Barnhart
  6. A Kick in the Assets, by Tod Barnhart
  7. 60 Days to Change, by Peter Dunn
  8. The Other 8 Hours, by Robert Pagliarini

Download a Mandala PDF on The 8 Frames of Life: Finances, with a list of my favorite books about wealth creation.

In the end, money is a form of energy which is widely recognized for its exchange value. It can be a source of happiness or misery, of harmony or conflict. It’s constant presence at both polarities of our existence has led to some wonderful wisdom and humor on the subject of money, captured in quotes such as the following.

If your outgo exceeds your income, then your upkeep will be your downfall. ~Bill Earle

A wise person should have money in their head, but not in their heart. ~Jonathan Swift, 1667-1745, Anglo-Irish Satirist

Download a PDF of my Favorite Quotes on Money, for an extended philosophical and humorous perspective on this serious topic.

William ReedWilliam Reed specializes in applying practical wisdom from Japanese and Asian culture to solving the problems of modern business and living. He is the author of the Flexible Focus column on Active Garage, the syndicated column Creative Career Path and the book A Zoom Lens for Your life. William is also a Representative Director and Co-Founder of EMC QUEST Corporation, which provides Coaching for Communication and Change, World Class Speaking™, and Accelerated Action with GOALSCAPE™.
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The Tale of two budgets

by Brian Superczynski on August 30, 2010

It was the best of times, it was the worst of times. It was the age of ever-cooler technology. It was the age of ever-increasing spending on IT infrastructure.  It was that time of the year – the season to present our annual IT budget, with company leadership insisting on it being received, for good or evil.

After completing my fair share of budgets over the past several years, I admit there have been more than a handful of times where the budgeting process was comparable to a dark Charles Dickens novel.  The budget would be “packaged” and presented for executive approval as expected, but only after months of planning, reviewing, justifying, and negotiating savings opportunities.

How the IT budget is presented is the key to bypassing those “worst of times” and being able to confidently steer your organization to the best of times.  This may sound relatively straightforward but let’s face it – IT and finance organizations are not known for their marketing or communication skills; it’s just not in the DNA of either group.  So then, how do you take your technology budget, containing a multitude of services, from network to datacenter operations and from it, develop a sound IT operations plan and budget which the business understands?

It’s the tale of two budgets……

The solution is providing clarity and transparency, translating the ongoing costs of previously approved investments and providing options.  Focusing on these three areas will result in the view that your IT organization is a high-performing business partner and not just another allocation to the business for which there is little or no control.

First, focus on explaining your budget in a manner which does not require an IT decoder ring for the non-technical folks.  One of the qualities that I consistently see in high-performing IT executives is the ability to translate technology and corresponding costs into the business drivers of your organization.  Keep your presentation in tune with the corporate strategy and growth drivers. The easiest way to break your costs down and translate into business drivers is to identify the product portfolios you support.  For example, if you’re a pharmacy operator, identify how much of your IT infrastructure is required to support  traditional brick and mortar pharmacy services versus online pharmacy services.  Furthermore, if on-line pharmacy services is experiencing rapid growth and has become the cash cow be sure to explain the impact on the information technology cost structure. Next, translate how online services, supported by IT have improved the customer experience (and possibly lowered transaction costs).  The success of your presentation will be measured not just by gaining budget approval, but on your ability to provide transparency into your cost drivers.  If you’re really on top of your game, you can even show how segments of your IT shop (like online pharmacy services) are actually profit centers.

Second, you can further enhance your reputation as a trusted business partner by identifying the ongoing impact of approved investments that reside in your budget.  These investments are likely projects that were approved and implemented in prior years and now are part of the infrastructure, which require ongoing support and maintenance.  Having a previously-established governance process is necessary in order for this conversation to be effective in your presentation.  I once worked with a CIO who consistently reminded his organization there was no such activity that was referred to as an “IT Project.”  All projects within the IT organization either supported, enhanced, or created new services which were understood by the business partner – and the investment had previously been approved jointly with the business.  The governance committee responsible for establishing these processes should be made up of members from the executive committee who will ultimately approve your budget, so that they can be familiar, knowledgeable, and even involved in the investment as they are made.  Likewise, many of these investments are predicated upon creating savings in your infrastructure or elsewhere in the organization.  Therefore, be sure to not only identify the impact of ongoing costs but also identify where the savings or enhanced revenue have been realized in the organization.

Finally, identify the investment opportunities in your infrastructure and present them as ‘levers’ that the executive committee can ‘pull’ when they look for reduction opportunities in your budget.  These levers can range from outsourcing portions of your infrastructure, to investing in new technologies that will result in performance improvements or efficiency gains in the future.  In fact, outsourcing is typically an easy sell when it addresses an area of your organization that is not a core system or competency.  As an example, many IT organizations have become responsible for managing the telecommunications infrastructure and related invoices for the entire organization.  This can be a labor-intensive process which often requires specialized knowledge of telecom billing.  Many outsource companies today can provide services to automate the paying and auditing of your telecom invoices – and even make the carriers’ job of servicing your account much easier.  This is a prime example of a lever you want to present to an oversight or executive committee because although it makes fiscal sense, you also want to obtain mutual agreement that it will also result in tough decisions with respect to staff reductions. Presenting options such as this will prove that your IT shop is not only looking to be a partner to the business, but also stepping up as a leader in reducing cost and improving services and performance.

In talking with a number of colleges, this is the time of year many IT organizations begin to work through their annual IT budgets.  Presenting transparency, impact of prior investment through governance, and providing cost-saving options are the keys to providing sound fiscal leadership and to developing a reputation as a trusted partner to the business.  As mentioned at the beginning of the article, the only potential “evil” side effect of following this outline – now that you are an expert – is that you may get cajoled into assisting the marketing department with its annual budget planning.    As sometimes the case, no good deed goes unpunished.

Brian-SuperczynskiThis article is contributed by Brian Superczynski, CFO and Senior Partner at Datacenter Trust. Brian has extensive experience leading and advising information technology companies on financial and business operations strategies. His combined financial management and operations background allows him to follow the development of strategic initiatives from system design to detailed implementations
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