20 Aug The Most Important Employee
Navigating a career isn’t easy. Much of The Compass Solution represents an “insider’s perspective” on things you need to know – and not always what others are going to tell you. (to include your company, by the way)
So in that vein, here’s a little clue on something that up to 70% of those out there on the career trail may never achieve – and this after investing so many hours and so much effort to forge a path.
The driver of your career will tie back to how completely you understand and embrace the power of The Compass lodestar – Personal Accountability.
There’s an important dimension to that cardinal point I encourage you to carefully factor in your journey.
I’ve watched far too many who never did.
But first – an important qualifier. Maybe you just like working for work’s sake. Maybe you don’t give a hoot about establishing a level of financial independence or you’re a “trust fund baby” who just dabbles in a career for the fun of it. If you are in that category then just ignore this blog.
For all the rest – read on.
In the fourth month of my career I found myself in some nondescript office in a small town where the crowded physician waiting room demanded a lot of patience for a young salesman vying for time. I was already late to my next appointment and time was wasting away. I picked up a magazine on the table beside me and began to thumb through an article that caught my attention. It dealt with the subject of financial planning.
Now let me say that at the time I knew how to balance a checkbook. I could pay my apartment rent with the help of my new wife. If things worked as we hoped there was a baby somewhere down the line too. And my parents had instilled in me the lessons of being frugal and saving my money.
Life was going along just fine, thank you.
But the article fascinated me. And the more I read the more I realized how little I really knew about my finances. The author’s name I forgot years ago but his message – well, his message stayed with me a lifetime.
Making money, he opined, was the easy part, figuring out what to do with the money was another matter.
Hooked on the premise of quality investing, the next week I bought a few used books on the subject and it clarified how little I understood about what to do with my earnings (which, by the way, were not particularly substantial at that point.)
My operating premise up to that time mirrored the same myopic view I had on my job and my career – just work hard and good things will happen. This logic is just one level above the wisdom of assuming wealth accumulation is a matter of selling your molars to the Tooth Fairy.
The Tooth Fairy Model is not too far fetched for a lot of people. A recent CBS News Poll suggests:
- Less than a third of working Americans have accumulated any savings for retirement
- Only 18 percent of working Americans are confident they will eventually have enough to retire
- A significant percentage of luxury car drivers are not millionaires
- Only a third of working Americans between the ages of 30 and 49 have even begun to put away money for retirement
- 26 percent of adults between the ages of 50 and 54 have no savings and 14 percent of those over the age of 65 have none
- Up to 70 percent of adults have trouble saving anything at all
Your goal in building a career is not to someday lay your head on your pillow and whisper softly to yourself, “Boy, did I do well.”
You donate 100,000 hours of your life and you expect the return to include some degree of financial security at journey’s end.
This is what I learned all those years ago – my hard earned paycheck really was my very first employee.
That meant I had to reverse the paradigm. It wasn’t a matter of me working for a paycheck – it was an issue of my paycheck working for me. When I understood that and when I began to treat my earnings as an employee I began to look at my career differently. More important, my load was lightened.
But I also saw the inverse (a lot) – I watched a great many who treated that paycheck like a betting chip on the roulette table – and when the gamble was lost so too did the stress increase.
Here are the three fundamental steps I put into play in the first years of my career. They turned out to make a huge difference in my life.
- I learned the basics of financial investment.
- I put at least a portion of my paycheck to work early – even when I couldn’t afford to do it – and I never stopped. The difference in the dollars accumulated was staggering when I fast-forwarded 20 years.
- I invested in my company’s 401K (and every other vehicle available) to the maximum. That was a foundation but an important one – and it taught me the discipline of saving.
The discipline involved wasn’t always easy. Like a great many I associated wealth with the number of toys I could show the world I owned. I didn’t realize that real wealth came with the confidence of knowing my money was working for me – quietly and behind the scenes.
And as the years passed and my family’s financial security grew I reminded myself of a lesson I first had to pound into my own thick head – one I’m sure my sons have heard far too often when it comes to building real net worth.
“When you’re rich enough to buy anything you want I hope you’re smart enough not to.”