Don't exagerate your pay to others

Most young professionals are probably make the average starting salary relative to their field. Depending on the job, these individuals are probably making a modest means, receiving insurance, and participating in company retirement plans. Not a bad start for anyone from a personal finance perspective. However, a few individuals will claim to be making ridiculous amounts of money (probably somewhere above $100,000).

Even though there may be a highly remote possibility that these claims are true (Investment Banking analyst can be making this amount), the person is probably lying to you. However, what these exaggerating individuals fail to realize is that no one cares! Most of the time people are turned off by braggers and don't want to be included in their company. This just alienates a young professional from his or her most important network, their peers. Plus, it is difficult to compare jobs across fields. How can a finance person really brag to a non-profit working about how much he or she is making?

I would guess however that anyone grossly overstating his or her pay has self-esteem issues. By using compensation to brag to others, individuals are able to superficially raise themselves up. Don't fall into the trap of trying to make yourself look good. If you really want to talk to someone about work, discuss issues your having or interesting projects your working on. People will be more responsive, and it will allow them to relate to you more.

A few things to remember from the fall of Bear Stearns

Yesterday, 14,000 employees found out they had a new boss. In a truly historic event (I’m sure someone is already brokering a book deal), JP Morgan Chase has purchased the investment bank Bear Stearns for a little less than $250 million. The deal price represents an almost 98% drop in value and comes just days after Bear Stearns management reassured investors the company was worth $11 billion!

This is an incredibly tragic event, but a few lessons can be gleaned for the freshman of the workforce.

1. Be careful about companies attached to one particular market

While Bear Stearns offered many different products to a wide variety of clients, it was one of the largest underwriters of mortgage-backed securities in the industry. The downturn of the market (one could argue signaled by the collapse of two Bear Stearns hedge funds) began to slowly impact the company in a wide variety of ways. Working for a company that is too closely tied to one market can spell trouble for employees during market downturns.

2. Don’t hold more than 10% of a company's stock in your retirement account

As you begin to move up the corporate ladder, stock options will become an increasing component of your compensation. Make sure this stock only represents AT MAXIMUM 10% of your total assets. Sell the rest you are given and invest it in a mutual fund. Although there will be years your coworkers will make more, you will be better protected and diversified. Bear’s stock fell from a little over $150 to $2 in a year.

3. Pay attention to rumors

Although they just may be rumors, you can never be too sure. Start updating your resume and thinking about emergency plans right away! The best defense can be a good offense. You might even want to think about what other industries you could enter if a market downturn is widespread.

4. Never be a martyr

Even with all the hard work and years of dedication the employees put in, it just wasn’t enough. To top that, the company was so broke there will definitely be no “reimbursement” to the employees. Never give your employer more than is deserved to them. Show up. Work hard. Do your best. But the days of “sacrifice” are over. I’m sure you can find something better to do with your life.

5. Have 6 months of living expenses in the bank at all times

The basic message of the Bear Stearns saga is you never know what can happen. Despite all of management’s positive reinforcement of Bear’s position, the company collapsed overnight and 14,000 people woke up without any job security. The average job search takes approximately 6 months to complete. Make sure you have enough saved away for the basics while your searching.

How to protect yourself in a bad job market

When the economy slows down and the job market tightens, it’s time to take a fresh look at your job. Most companies are cyclical in nature and begin to lose earnings and revenue in downturns. Once this starts, job and cost cutting begin.

You’ll first experience the turn of the rumor mill and hear about the “Reduction in Forces” (lovingly called RIFS) or you may see them firsthand. But before you go home to down the bottle of tequila and drown your woes, you need to go on the offensive. Don’t give them a reason to cut you. It’s time to prove your worth. So, here’s what you can do.

1. Align yourself with key players

Identify key decision makers. Even though NO job can be guaranteed during a slowdown, someone will be making the decisions on how to protect the company. Get to know this person or department and think of a project or opportunity you can use to build a relationship.

2. Think of a cost savings initiative

Companies love to cut costs during downturns. Think of your everyday work experience and see if there is someway to cut costs. Develop a way to implement the savings and pitch the idea to management. Even if they say no, you’re proving your effectiveness.

3. Become more efficient

Is something slowing you down? Eliminate anything inefficient and come up with efficiency ideas for the company. No one wants to fire someone an effective employee.

4. Stay positive

Who enjoys working with a miserable person? No one! One of the most important things you can do is keep a good attitude. Don’t give them a reason to get rid of you. If it comes down to you and someone who is always negative, you’ll always win in the end.

Obviously these are just a few ideas. But once you start hearing the word RIFS flying around the office take time to analyze your current role and potential. Most importantly, update your resume RIGHT AWAY! Companies will turn on you in a moment so always prepare yourself for the worst.

How to run an effective meeting

Most people think meetings are a waste of time and nothing gets accomplished. Here are some surefire ways to prove those people wrong.

1. Always have an agenda

If you can’t come up with a good agenda, you shouldn’t be having the meeting in the first place. Also, this is your chance to make sure you’ve allocated enough time to the meeting. Giving attendees an accurate meeting time is an excellent way to manage expectations. Does your planned talking points match how long the meeting is suppose to last?

2. Review the attendance list

Make sure the appropriate people are invited. If your looking for a decision to be made or someone to carry out a task, make sure you invite the people who have the ability or authority to get things done. A good idea is to go one level above the people who will be executing the work. This way the direction is coming from their boss and not you. This will give you much more leverage.

3. Prepare the basics

Have an appropriately sized room reserved and schedule a conference call number incase people will be calling in. Always prepare these BEFORE the invitations go out. You need to make things are simple for the attendees as possible. Also, send out meeting materials at least two hours before you meet. This way people will come prepared with questions and discussion topics.

4. Take meeting minutes

Make notes on who does the talking and write down important points brought up during the meeting. This could be your ammunition later on. If someone says they’ll do something, make sure to hold them to it.

5. Send minutes and include follow ups with deadlines

If anyone promises to accomplish something or get back to the group, include these in the minutes and attach the prescribed deadline. This way the entire group (and the individual) knows exactly what is expected.

6. Don’t have worthless meetings

This is the hardest point. It’s difficult to know exactly what will happen during a meeting, but you need to anticipate what you expect the end result to be. If your simply looking for information from a few individuals, it might be best to call them directly. However, if you want cross-collaboration between various departments, a meeting is probably your best bet.

Bottom line: don’t underestimate the power of face-to-face. People respond more when they can’t hind behind e-mails and phone calls. Everything becomes more personal. Plus, meetings are great networking opportunities!