Liquidity is King

Over the years my financial focus has shifted as I have continued my money education.  I grab on to a phase and make that the it thing for the time.  Everything from real estate is king, to invest early and often to debt free living is the way to go!  Usually when I depart a phase that information does not go away, it just gets incorporated into what I know and my emphasis moves on!  The older I become and the more I learn about personal finance the more I realize that no matter what financial approach you are going to take the number one most important principal is liquidity.

What is liquidity?  Liquidity is how quickly you can get your hands on your money for immediate needs.  Checking accounts are highly liquid; the value of your business is not liquid.    I also add the requirement that the liquidity is present without a penalty being imposed for liquidating.  This would be the case with retirement accounts, CD’s and some other investments.  You may have a million in a money market account, but if it is under the umbrella of an IRA and will cost you a penalty to the IRS to get at it, then I do not consider that liquid.  Debt is also not liquidity, because ultimately debt will decrease your future liquidity by creating payments and extra expenses in the form of interest.  We are talking about cold hearted cash that you can get your hands on is liquidity. 

Why do you want to be liquid?  Liquidity gives you flexibility which allows you to create independence and freedom.  How?  Imagine all the times that having money available would have allowed you the ability to move on an opportunity that has been presented.  For example during a recession your competitor is about to go under and you can step in and buy them or their equipment.  You start a new business and because you have cash you can take longer to build your base and find the right customers versus operating in panic mode and going back to make adjustments latter.  You at the last minute are offered a vacation spot with your friends because of a cancellation and you have the cash to do it and enjoy it! 

Outside of winning the lottery and sticking all that money in savings how do you create liquidity?  There are three basics to follow: live on less than you make, diversify your types of assets and learn to say no to good opportunities.

The first step is to live on less than you make.  This is one of those things that you hear over and over but rarely actually listen to the advice and take steps to follow through.  Please take the time to stop right now and process this statement in your head.  It will help you with more than just financial liquidity.  It reduces stress, creates money for investing and allows you to take full control of your financial destiny.  Sit down and do a budget and start focusing on eliminating expenses or creating income until you are spending less than you bring in.  Then begin to put that extra money into liquid accounts for you to access when needed.  This concept should apply to you and your business.  If you don’t do this on the business side you are not making a profit, and at that point you might as go work for someone else!

The second step is to diversify your assets.  What I mean by this is don’t put all your money in retirement accounts, or real estate or even just a savings account.  Your money needs to be divided among different assets with varying degrees of liquidity.  This is beneficial because it not only creates a place for liquid savings, but encourages you to put away in non-liquid investments such as retirement thus creating more permanent long term wealth at the same time you create liquidity.  If the perfect real estate deal comes along you don’t want to have all your money in retirement.  If your goal is to save 15% of your income, break that 15% down to 10% retirement accounts, and 5% non retirement investments.

The third thing to do is learn to say no!  Just because you come across a fantastic deal does not mean it is a fantastic deal for you as your situation stands today.  This is a really hard one to put into practice because we all tend to want to get a great deal and then brag about it!   However if that great real estate deal that you get to brag about is going to jeopardize your liquidity and wealth then it is not worth doing.  Why, because life is unpredictable.   You may believe you can make the extra payments for a year and then you will get a raise, land a new client or sell your old place and then all will be back to the right balance. What if that is not true?  You cannot guarantee that a future event will happen today.  Basing current decisions on what might happen tomorrow is not a good way to make good financial moves.  Only seize opportunities if it is completely right for you today, based on today’s situation.  Say no with the confidence that it will put you further ahead and when YOUR right deal comes along it will be even better and easier to enjoy.

Freedom comes from having choices, allowing yourself liquidity creates choices.  Don’t box yourself in a corner, give yourself freedom.  It is easy by living on less than you make, allocating your assets across many areas, and learning when to say no!  You can do this and reap the rewards of good financial choices!

Are your goals yours?

Goals are not always YOUR goals!  I challenge you to think really think about what I just said.  Do you really want the goals you have set?  Consider this scenario: your goal is to become an attorney, but you don’t enjoy it and often times struggle with your classes.  Upon really looking at the goal of completing law school you realize it is your parent’s goal for you to be a lawyer, not yours!    This scenario is played out in more goals than you think.  When goals are not yours and you do not buy in and commit to them you will not achieve them or achieve them as quickly and effectively.  How can you really tell if this is a challenge that you have with your goals? 

Ask yourself these questions:

·         You are unhappy with no desire to achieve your goals

·         You are not achieving your goals.  No matter how hard you try. 

·         Do you have goals that work against each other?

·         Do I really want this? 

If you answer yes to any of these then re-write your goals!  Make them yours, achieving it will be much easier and you will be happier.  Make your goals your goals!

How to Become a Coach

Coaching is a rapidly growing profession, people are looking for a good process to help people and at the same time people are looking for added support in moving forward in their lives.  This creates a win win for both the client and the coach.  Do you think you would be a good coach?  Interested in finding out how to get started?  Following is an overview of how to obtain your coaching credentials!

In the world of coaching there is not a universal licensing program.  There is however one organization that is a front runner in the industry and offers a very comprehensive credentialing program.  The organization is the International Coaching Federation (ICF).  They offer three levels of credentialing based on your level of experience.  The basic level is the Associate Certified Coach (ACC) and requires a minimum number of training hours, a minimum number of coaching hours and mentor coaching.  You can gain achieve these minimum’s in two different approaches.

The first is by going through an approved training program and the second is by reaching your requirements on your own.  For new coaches or those just thinking about becoming a coach I recommend going through a training program.  I suggest this because these programs are designed to help you meet the credentialing requirements.  For example in my training program through ICA I don’t have to find a mentor coach, it is part of the program they have in place.

What do you need to consider when selecting a training program?

1. Go to the ICF website and search for approved programs under the education section
2. Then begin to review each program considering the following:
   1. How do you want to take classes – in person or via distance learning?
   2. The Total cost to get the correct hours of training.  Some programs offer multiple levels and you actually need more than the first one to get enough hours for the ACC.  Your cost can range anywhere from $2,000 to upwards of $10,000.
   3. Is the program inclusive of all the requirements you need for your credentials?  If not are you able to get the other items on your own.
   4. How long does the training last?
   5. Do they cover specific niches or just cover the basic skills of coaching.  For example ICA has five learning areas that include executive coaching, small business, life, spiritual and career coaching in addition to the basics for all coaches. 

After you have selected your program you simply need to get started in the training.  Followed by practicing your skills on willing clients and you are on your way to building a successful coaching business!

Do feelings have a place in business?

Do your feeling have a place in your business?  Is intuition a must or should all the touchy feely be left for our personal lives?  At one time I would have said leave your feelings at home and get to work, but over the years of running my own business I have realized if you don’t take your emotions into account then your business grows slower than it could.  While at the same time you must manage your emotions to truly thrive. 

Many times my clients appeared to be doing everything completely right and their business still was not growing.  Why?  One reason is that they had an emotional block that was not letting them realize their true potential.  So how do you release your emotional blocks and listen to your inner wisdom?  I recommend three steps – not to be followed in any specific order, or used only once.

First, be very aware of your mood.  I am talking about noticing very small (or sometimes not so small) shifts in how you feel.  When I was trying to decide whether or not to close my event planning business I really focused on my logical decision making process.  I continually reviewed aspects such as “I am established, I have a good client load, and my marketing is in place”.  What I was ignoring was that after the birth of my son the passion for fabulous over the top weddings was gone.  I still love them, but my desire to be immersed in the dissipated.  How did I finally feel this?  I walked into my office day after day and my mood changed.  I could be walking on clouds and take one step in my office and immediately feel like the world was riding on my shoulders.  I was heavy.  Finally one day it dawned on me; this is not right and I just stopped taking clients.  Pay attention to how your mood changes when you are working on different projects?  Notice it and try and focus on what your emotions are telling you.

Second, take time for quiet reflection that focuses on your business.  When we think about taking time for reflection many of us jump immediately to reviewing our personal lives.  This is wonderful but we also need dedicated quiet time to think about our business.  If you don’t slow down and review what is going on you will keep spinning your wheels.  I am not talking about quiet time to review your books and marketing plan but time to just sit and think.  For one week try spending 15 minutes a day, preferably before you start work, just listening to what your business is saying to you.  You will be amazed at the level of calm and direction you receive.  Don’t let your to do list run through your head, instead focus on creating a calm.  Try staring at a fountain, nature or even a wall.  Listen to your business and your intuition.

The final step is to remove your feelings from the business.  But I thought this was about adding feelings?  It is but sometimes we need to pull our feelings out and put other people’s emotions in, to see how our emotions are affecting business.  One of my clients was having an issue with a business partner; she received an email from the partner that immediately made her feel like someone had shattered her window.  You may be thinking this was a mean nasty email, which is what I thought, until I had her read it to me.  The business partner had been on vacation and had emailed that she missed my client.  That was all, nothing more to the email.  I told my client to imagine someone was reading the email who had no familiarity with the issue or either person.  What would they think?  How would they feel?  By looking at how another would react emotionally to the same situation she was able see clearly how her emotions were controlling the way she ran the business.

Your emotions and feeling are one of your most powerful tools to run your business.  Let them be heard while affectively managing them and you and your business will thrive.

Money Frustration

Yesterday while working on narrowing down my list of mutual funds for my invest 25 project I became a bit agitated toward the end of the process.  Why?  I kept running into road blocks on selecting the right fund to invest in. When I thought I had the perfect fund, I would get to the last step and one thing would throw it off.  Then it dawned on me.  If I spent as much time as I did on the research for this (at least 8 hours), and knew what I was looking for and understood the terminology and it still managed to frustrate me I could not even begin to imagine the frustration new investors feel.  Which confirmed for me even more how much help we need in the area of money education for our society? 

So what does this mean for you?  I want you to know that I understand your frustration; it’s like learning a new language late in life or worse yet me trying to learn physics!  I am here for you when you need guidance, just drop me a line.  I encourage you to commit to learning more over time.  Ultimately know that by taking small step to learning over time you will get to a place where you are comfortable with money.  Please don’t give up.  Only you can manage your money with the passion and heart that is your own.  So take the time and learn and eventually the frustration will go away, and be reassured to know that even those of us who are knowledgeable are sometimes frustrated also.

Do You Dream Big Enough?

Do you dream big enough?

This question came to me after a morning of reflection.  I was day dreaming about what I wanted my life to look like and something within me told me to dream bigger than I was,  I had not gone far enough yet with my visions.  So I pressed myself to expand my horizons and soon enough I was imaging more than I ever thought possible for me.  Then the big breakthrough came – a great idea for a new business.  As I continued to dreams about it and jot down the ideas I encouraged myself to dream even further about how this could get accomplished without me putting it on my idea list and having it sit there for six years.  I was shocked and amazed at how quickly this one idea began to transform my life vision.  All this because I allowed myself to go further into the process of dreaming than I ever had before.  This led me to asking “Do you dream big enough” and quickly followed by “Why not”?  What I came up with was fear and lack of imagination were the reasons our dreams do not grow as far as they should.    

Fear stopped me because what if I dreamed something and it did not come true?  What if someone made fun of my dreams for being too over the top?  What if my family was not on board with my vision?  The what if’s seemed to be endless.  Often when dreaming we become victims of the fear of failure and the fear of leaving our comfort zone, so we stop right before we truly reach our ideal vision. 

I had dreamed just to the point I knew I could achieve everything, it might be tough to get there but at least I knew I could do it.  I did not have to worry that I might not get there and thus be a failure.  But is failure really all that bad?  Failure teaches us what does not work, and provides valuable lessons to move forward with what can work.  Failure can be the universes way of pointing us in the right direction, leading us to our true path which can only be achieved by living through failures.  Would I be a coaching today if I had not taken my various career paths that seemed to continually end with no direction? Maybe, but the fact that they all seemed to be the wrong career for me enabled me to reach my dream job by expanding my horizons and helping me narrow down what worked and what did not!  How is that a failure when it leads to the best career for me?

I also dreamed just to the point where I did not have to leave my comfort zone or the comfort zone of my family.  If I stayed in the comfort zone then I did not have to fear the judgments of others so I was safe.  But was I really?  What good is living by the judgment of others?  Does it allow you to live your dreams?  If you are going to dream then why stop at the point others will be happy?  The point of dreaming is that YOU are happy beyond your wildest dreams.  To get to this point you must dream beyond your comfort zone, when others see how happy you are they will follow.   

How does lack of imagination stop you from dreaming about the best life possible for you?  Imagination is forming an idea or vision of something that does not exist for you.  So if you have never experienced your life vision then how can you imagine it?  It is almost a catch 22 scenario, how do you know what to dream if you can’t perceive it?  In steps imagination, this allows you to go beyond what you know to create new dreams. 

So how do you move beyond fear and lack of imagination? 

First you must leave your fear zone.  How do you do this?  You take your goal or vision and continue to push it one step further and feel the emotions as you continue to envision that goal.  Begin by taking on goals that you already have established and take it one step further from where you have it.  So if your goal is to be able to run 3 miles by the end of the year, imagine what running four miles by the end of the year would feel like.  As you step further into your dream feel the fear and embrace it, only then can you look it head on and move forward.  Go on it is just a dream you cannot get hurt in a dream; you may be amazed at how quickly the fear moves away!  Continue to practice doing this until it becomes second nature!

Second, begin to work on your imagination by letting your mind wander while gently prodding yourself to go further.  Begin by building your dream and then ask yourself “what next”, follow that with “then what” and keep asking yourself “then what” until your vision grows bigger than you ever thought possible. Eventually your mind will run wild and create more than you expected.  Remember to give it time and don’t let it stop, just keep asking “then what”.   Allow yourself the time and space to really get into your dream.  You will know when it is the right stopping point as it will feel right, I know that sounds odd, but when you hit it you will know it, just like you know home!

Soon you will be able to say YES I dream big enough and be able to move forward to achieving them!