How to pay off $50,000 in student debt
More and more my student debt is starting to annoy me as it heavily increases my minimum required dollar amounts for bare necessities. I started thinking and came up with this grid:
$50,000 X 1
$25,000 X 2
$10,000 X 5
$5,000 X 10
$2,500 X 20
$1,000 X 50
$500 X 100
$100 X 500
$10 X 5,000
$5 x 10,000
$1 x 50,000
Pick a line, spend 1 week creating a plan. If after 12 weeks you haven’t made any progress, start over. This algorithm gives you 4 chances per year. My guess is nearly anyone could make this happen after 2 years.
Hate Your Life? Lucky you, get to work.
Yesterday I found myself between an empanada and an MGD at a Chilean festival near Lake Merced. This was familiar territory, not because I am an MGD drinker or because I hang out at South American festivals. It was familiar because I found myself telling my in-laws yet again which elements of my job were less than perfect.
This time, however, I was laughing at my complaints. You could say I was embracing them. I’ve done this before. I’ve been the disgruntled working for the weekend warrior. I’ve been the one morally espousing that I wasn’t put on this Earth to work but to do art.
Now, I was laughing because I knew that I had actually uncovered a long-term strategy for moving forward. Hating your job can be a very good thing (thanks to my father-in-law for corroborating this and not making me look like an MGD swilling ingrate).
Mid life crises are real and they are born out of comfortable situations. They are fed by individuals who put up with the fact that 5/7 of their week is something to get through. You’ll know these individuals by the calling cards of being lucky to have a job or being unable to walk away from the money. They are comfortable with their mediocrity or scared to acknowledge its existence.
Contrast this with someone who really hates their job. The intolerable pain they feel will usually force them to make a change. Experience this level of discomfort and you may avoid the slow death of mediocre work and oftentimes will go beyond yourself to do so.
Knowing what you do not want to do is a great template for moving forward. Remember the pain of a few things you hate and soon you’ll have painted yourself into enough of a corner that you will be forced to reach for something you love.
What if you’re not feeling intense pain with a certain aspect of your life? What to do then? Make a 5-year projection of your life if you make absolutely no changes. How does that make you feel?
Be sure to sprinkle in a few life events that happen to most people. Sorry, but it’s a rare person who is going to stay unmarried, not have kids and continue to live on $1,000 per month. Chances are you are going to progress through life just like everyone else. Better to be realistic about most things and a risk taking maniac about a few important ones.
Now, what is the one thing that makes you absolutely ill? Still happy being in that relationship in your mid 30’s with a kid? Is that job still good enough to supplement your art career? You are going to age. You will one day be an older version of yourself. What are you routinely doing that will turn you into the type of person you don’t want to be 5 years from now? What are you not doing that you want to be doing more of?
Think about this and make it hurt. The point is not to remove everything you don’t like and leave yourself with nothing. The point is to engineer a life that is filled with things, people and experiences that you love. And for some people it’s too scary to reach for and acknowledge those things. If you’re one of those people, the beautiful shortcut is to constantly remove what you don’t love and force yourself to embrace what you do want and love.
Let your customers pick the price
On Friday I left a job in the 200+ billion dollar spirits industry. I was working as the all purpose reports guru in the FP&A group which allowed me to see a detailed and categorical breakdown of how the money was spent and more importantly how it was earned.
As I leave the job I have been focusing on the most valuable takeaways. How does a non-essential commodity generate billions of dollars a year? Why are consumers happily supporting the industry and how can I apply these lessons moving forward in life and work?
Today I focus on one of my early lessons:
Charge what your customers are willing to pay.
One of the first projects I worked on was an analysis of raw materials. The goal was to better understand the compartmentalized cost of the finished goods. Alcohol can be produced cheaply. Very cheaply, in fact, the pricing was so lopsided it took me an entire week to realize I was calculating the cost of an entire case (9 bottles) and not just the cost of a single bottle!
I later asked a co-worker how we would be arriving at the shelf price based on my cost analysis. He looked at me strangely and said, “That’s not how it works. You find out what the consumer is willing to pay and work backwards from there.”
Looking back, my question was flawed in two major ways. First, I was focused on the cost of the product and not the value it brought to the consumer. Second, a cost based approach stifles the innovation process. A company focused primarily on cost winds up being a company which finds ever cheaper ways to repeatedly bring the same offering to market.
Defining value is a very difficult thing to do. This is why good companies will spend months understanding their customers before even starting work on a product. If a product team doesn’t know its customer, it is impossible to develop the right features. If the right features aren’t developed a company is forced to adopt a cost-based pricing model which does not reflect consumer demand.
This means that value must always be defined from the customer perspective. It’s not about how clever you were in creating your offering but did you deliver the customer what they wanted. A company that does this masterfully is Apple. Note the latest iPhone commercials and the way in which they promote Face Time. Not once do they mention the technological marvel it was to create real time video conferencing from a cell-phone.
There is no reference to video compression or audio codecs. Apple engineers value these things deeply, the customer however does not. The ads instead display shots of business travelers connecting with their families, grandparents seeing new babies and couples shortening long distances. This is what Apple customers are buying. Apple understands this and as such, they are rapidly becoming one of the most valuable companies in the world.
The beauty of this targeted value-based approach is that both company and consumer goals are aligned. Once the company has created a product and priced it at a level the consumer is willing to pay they have created a loop that allows both company and consumer to share in and create value. This is how brands are built.
These techniques are not just for large companies with billion dollar marketing budgets either. They can be applied to anyone looking to earn more and build brand equity. It’s commonplace to hear an individual say, “I want to make $100,000 a year.” It’s incredibly rare to hear someone say “I am going to provide $100,000 worth of value in my work.” More than companies even, it’s that kind of customer focused mentality that individuals can benefit from immensely.
The No Network Fallacy
“I don’t fucking know Oprah, I didn’t go to Princeton. Networking works for schmoozey d-bags and rich kids who have access to everyone under the sun. How am I supposed to get anything done without a network?” – question from a classic skeptic
Assume for a second you are in the window seat of a cross-country flight from San Francisco to New York. Two business travelers sit next to you and strike up a conversation. As you listen in on the conversation you come to realize that the guy in the aisle seat went to business school with an acquaintance of the guy in the middle seat. You, being a good skeptic, immediately roll your eyes, put on your headphones in disgust and assume your above point proven.
Or is it? Believe it or not, this kind of chance encounter is surprisingly common. It works out to a fairly simple numbers game. Let’s examine:
Fact: There are approximately 200 million adults in the United States.
Assume that each of those adults knows approximately 1,500 people.
Skeptic: “I don’t know 1,500 people! Are you crazy, an asshole or both??!!!”
Ok, take me for example. I have similarly claimed that I don’t have a fancy network. In fact, I still hang out with the same 10 dudes I’ve known since high school.
Although, there were about 200 people in my graduating class. I guess spending four years with someone qualifies as knowing them. Then there was college. I guess I could say, even as an introvert, that I met about one person per week (or 50 per year). Damn, another 200 people. Add jobs, social activities and any time I dared leave the house and I think assuming that I know 1,500 people is a fair or even conservative estimate.
Assuming these people are reasonably spread out around the country, the probability is about 1 in 100 that I will share an acquaintance with a random stranger, and more than 99 in a hundred that we will be linked by a chain of at most two connections.
Of course, one needs to be open to these types of connections before they can surface. If you’re too busy ignoring the world and complaining that you aren’t well connected then you’ll assuredly miss out on any and all connections.
The math is surprisingly simple, but unfortunately too lengthy for this post. For a related problem, see the birthday paradox.
The point is that regardless of your situation, the NUMBERS are overwhelmingly in your favor. Of course, this precludes any discussion about good networking, having a plan of attack, adding value to others lives or just plain being interesting.
Why mention this? Because so many people stop themselves at the gate by declaring without investigation that they don’t have a network. These are precisely the types of false barriers that unsuccessful people spend their lives declaring when a small amount of examination would prove the opposite.
And it’s not just skeptical losers who make this grave calculation error. Tim Ferriss in his book The 4-Hour Workweek writes of a challenge he offers to a Princeton class. The challenge is to “contact three seemingly impossible-to-reach people – J. Lo, Bill Clinton, J.D. Salinger – and get at least one to reply.” According to Mr. Ferriss 20 Princeton students were afraid to take on what he calls a “perhaps impossible” challenge.
Impossible? It actually gets statistically less difficult with famous people. In fact, in the case of well-known targets the number of connections needed is even smaller. Bill Clinton, for example, surely is acquainted with vastly more than our assumed 1,500 people. Thus, you have a higher probability of having a shorter network path to Bill Clinton than you do to my neighbor.
And once you know Bill Clinton, things get even more staggering. If you are N degrees of separation from Bill Clinton, then you are N + 1 degrees from Mick Jagger, Oprah Winfrey and a whole host of other celebrities.
The point of this post is not to amass a stupidly large rolodex of celebrities. The point is to examine and destroy the barriers that are entirely self- created as a vehicle to mask your fears.
For the first 9 months I was in a band, we got really good at sending e-mails and getting no response. We were amazing at it. We would send 10, 20 e-mails to venues asking them if we could play and not get a single response. Our inbox was so clean you could eat off it.
Unfortunately, this wasn’t our goal. Our goal was to play shows and we really wanted to. We tried hard too. We would e-mail bookers and say: “Hey, Check out our music. We’re really serious about our band and we’re willing to do anything to play here.” By doing this we thought we were offering a tremendous value proposition. If you knew us, a blank check from us was a big deal. We would do anything.
There was sadly a major communication breakdown that we weren’t aware of:
What we thought we were saying: We’ll go on in any slot, we’ll tell everyone we know, we’ll show up on time, we’ll get off the stage rapidly between sets, we’ll be nice to the staff, etc.
What the venue read (when they were done cringing): Thanks for the to-do list! Now, I need to listen to your music, check my calendar, find other bands like you, worry about you bringing in enough people, worry about you showing up on time, hope you’re not too wasted when you do show up, and hope you’re not as lazy as this e-mail.
What we realized after 6 months, is that venue bookers were lazy, busy or some combination of the two. What we realized after 9 months is that WE were lazy, busy or some combination of the two.
Before that, we weren’t doing any work. Telling someone that “you’ll play any night in 2011 and you’ll play with anyone” is a great way to waste their time. It’s actually a way to disrespect them. It’s saying we’re really enthusiastic, and you worked hard to get in a position of prominence can you do some more work for us?
After almost a year of e-mailing and hoping our enthusiasm would be interpreted, we realized the secret was to do the venues work for them. It only took an extra 30 minutes, but it put us in a better position than 95% of the other musicians in our situation.
We started checking venue calendars before we contacted them. We would contact other bands to see if they were available on the venues open dates and would they be willing to share a bill with us. Once we had a few yes answers, we were getting somewhere.
We then had a pitch that a booker could respond to. We had a pitch that showed respect for their hectic and busy schedule. What we were accomplishing was doing the bookers’ job for them. More importantly, we made it easy for them to say yes to what we wanted.
As I’ve grown into work, I wonder why even less people employ this technique at work. So many people want to find mentors, jobs and projects to work on. “They’ll do anything to please the gatekeepers of the world”. And yet most of the time they’ve done nothing.
Maybe this is because people think that everyone needs a job. Maybe it’s because they’re scared to make a decision, or don’t understand the process. Perhaps, if they just show up things will magically fall into place. This type of thinking is severely counter-productive. Willingness to do anything is not an excuse to have done nothing. It’s lazy. It’s waiting for someone else to give your life meaning.
The truth is, there is work to be done, but if you spend all your time waiting for someone to pick from the list of anything, you’ll be waiting for a long time.
The truth is you can leap frog the gatekeepers of the world by making it virtually impossible for them to say no.
The truth is making a decision is hard, but the only way to refine your decision making and understand a process is to do the process and make the decisions that create the process. Working through uncertainty is all the mentoring a lot of people ever need anyway.
Achieving Failure
Wednesday at 10:01 am, I was rejected from a job at Google that I had not applied to. A recruiter had found me on LinkedIn and asked me to come in for an interview. Despite not having applied, or even knowing that the department I was applying for existed, I became consumed with getting this job. For the past week it was as though this was the only thing I had ever wanted in the sum total of my existence.
I told five people about my rejection and their responses were of the I’m sorry/all things happen for a reason/maybe you’re better off where you are variety.
However, one of the text message responses I received broke trend. It was from a friend who works at Google. He said, “WTF!?!?! I’m going to reach out to [recruiter] now and get some intel.”
And so starts a blog…
Over the past six months, I’ve managed to make some fairly dramatic changes. I changed jobs, did some freelance work which resulted in a $30,000 positive change in net worth and negotiated double my hourly rate at a company where I was previously underpaid. While money isn’t everything, I recognized that after 2 years of being depressed, angry and in 5-figure debt I needed to change the way I approached my finances.
So, I start here using the above text message as one of a series of small techniques the B-students of the world can use to experience the success previously only available to the A-students.
These techniques, which allowed me to double my income, connect with recruiters at Google and start planning for things I previously thought to be impossible can largely be summed up in the title of the blog. The primary idea: Do not censor your thoughts of grandeur.
The recognition of situations, the application of strategy and the judicious use of tactics is what I hope to achieve by writing. The primary focus will be on a healthy mix of data and behavioral tweaks that push us toward optimal living.
Let me start by addressing all of the skeptics: I love you all but you are destined to be losers (you’ll get a few good great jokes in, but for the most part you have a life of complaining to look forward to). Example: If I had read the above paragraphs 2 years ago, I would have immediately said oh great, “some asshole had $80k in stocks made 20% returns and got a 5% raise at the job his dad got him.”
The reality: I had $50k in student debt, a demanding job at a failing company which paid less annually than my debt amount and middle class parents who have stalled in their own careers.
And truth be told, that’s all I was. Those things consumed me and I used them as proof positive that there wasn’t much else to be done. I wasn’t focused at all on the things I was doing well, or the things that were going right. I was settling into painful mediocrity and writing my own ticket with the ink of cynicism.
This isn’t just about work, although for me that’s the lion’s share. If you are languishing in mediocre relationships, letting your health deteriorate or just aren’t having as much fun as you used to. It’s time to realize you are writing your own ticket. And decisive change starts with tweaks in your behavior.
Step 2. Failure
Disclaimer: This isn’t about getting a job at Google. I didn’t get hired. If you are looking for tactics for getting hired, don’t read ahead. You’ll need to go elsewhere. In fact, if I am ever shrunk to the size of a nickel and end up in a blender I am fucked.
Last Tuesday night, I was minding my own business when a Google recruiter writes me a LinkedIn message telling me my background looks like it would be a great fit for an open req they had and he would like to speak with me about it.
Amazing! They contacted me. I was really psyched, Google has for a long time been on the short-list of companies I would like to work for and this was surely a sign that the stars were aligning in my favor. Since I had not initiated this process I did not take the appropriate psychological steps do deal with the potential crushing rejection.
I instead viewed this as a magical pivot point in my life that would change everything. Fast forward 1 week, 2 interviews and $500 in associated interview expenses and I have an expensive voicemail that says “not a good fit.”
When I got this voicemail I reverted. My first thoughts were: I didn’t want to commute to Mountain View anyway (Really?, didn’t you check for the nearest Google shuttle to your house?), It was an internal job, not consumer facing I don’t want that (So 1,500 internal Google employees aren’t customers?), I wasn’t ready for an engineering role (If not now, when?).
I should have behaved differently, but instead I was jumping into ego protection mode and making excuses.
What should I have done?
This question should also read, and when. The answer, I should have employed these tactics when I felt my brain psychologically moving all the eggs into the Google basket. I should have realized at this point that I was going after something I wanted. And because of this, rejection would be very painful and success would be very awesome.
As soon as I was aware of this, I should have made two lists on each side of a piece of paper. On one side: The 5 things I will do when I succeed. On the other side: The 5 things I will do when I fail.
Do this before the decision is made. Both rejection and success will create a flood of emotional responses that will bury your capacity for rational thought. You will not be adequately prepared to handle these emotions. Instead you run the high risk of severely jeopardizing your goal, or failing to optimize your success.
Here is the basic idea behind what my lists would have looked like:
5 Things I Will Do When I Succeed
1. Manage relationships with [list of people who will feel slighted by my leaving]
2. Have salary requirements ready and practice negotiations
3. Prepare old job for transition
4. Make list and schedule of necessities for transition into new job
5. Prep responses for inevitable “why are you leaving” question
5 Things I Will Do When I Fail
1. Send thank you note to all interviewers and set calendar reminders to send updates to recruiter on any work and/or blogging I do
2. Generate list of comparable organizations and people I know at those organizations
3. Generate list of comparable positions at Google for which I am qualified
4. Prioritize skills to be improved or refined in the next 3 months
5. Reach out to 3 people and ask them for relevant career advice.
This is why I love my friends’ text. He was not consumed by emotions but rather he was moved to action. My theory is that he had already (whether consciously or not) planned for failure and knew what his immediate outlets were. He was able to keep the process moving despite the sub-optimal outcome.
And that’s where I’m at. This ‘No’ answer is merely step number 2 in the ‘X’ step process that results in my getting an engaging job offer from a company I respect. I think this is an important point and one I need to internalize. Rejection by 1 of 25,000 employees at one organization hardly constitutes an end to the process. It’s just the thing which happened most recently, and only I can put an end to this process. I am the primary limiting factor. Not an HR department, not a job description — not even a logic puzzle.
Hall of fame quarterback Troy Aikman finished his rookie season, after being taken #1 in the NFL draft, with a 0 – 11 record as a starting quarterback. Each of those losses represented 11 of the first steps of his hall of fame career. And as much as I don’t like Aikman (for being on the Cowboys team that effectively ended the 49ers dynasty), I think it’s pretty admirable that he transitioned that failure into a dominant career. Of course, having Emmitt Smith didn’t hurt, but that’s a concept for another post.
Photo by Cheri Lucas.