What’s an information interview and why aren’t you doing it?

March 20 11 Comments latest by Anna

This is a guest post from J.D. Roth, who writes about smart personal finance at Get Rich Slowly.

Finding a job can be tough. Competition is fierce, and even if you’ve got the skills, it’s a challenge to make yourself known to the right people. According to Michael Hampton, Director of Career Development at Western Oregon University, informational interviews are a valuable networking technique that can give you an edge on your competition.

The informational interview is designed to…help you choose or refine a career path. You can learn how to break in and find out if you have what it takes to succeed…Spending time with one your network contacts in a highly focused conversation will provide you with key information you need to launch or boost your career.

An informational interview is not the same as a job interview. It’s an opportunity to find out more about a particular career or company. These sorts of interviews can be valuable for anyone, not just those looking for a new job. You might consider this approach if:

• You’re a recent graduate exploring possible career opportunities.
• You have an established career, but would like to discover what it might be like to work for another company.
• You feel as if you’ve done as much as you can in your current job and are interested in chaging fields.

By meeting with somebody experienced in the field you’re considering, you can find out more about what the work is really like, about how much it pays, and about the drawbacks.

The first rule

Before you begin seeking informational interviews, it’s important to understand a couple of rules:

1. The first rule of informational interviews is: do not ask for a job.
2. The second rule of informational interviews is: do not ask for a job.

If you meet with somebody under the pretenses of gathering information and you attempt to turn the encounter into a job application, you’re just going to make her angry. If, after the interview is finished, she thinks you’re promising and she has a position available, she’ll contact you. Do not ask for a job.

Conducting the informational interview

Your first step is to find people with jobs that look intriguing. Once you’ve identified some likely candidates, prepare a simple phone script to make sure you get everything you need in your initial contact. It can be helpful to approach the informational interview as if you were a reporter. Pretend you’re gathering information for a news story. This can help calm your nerves. Make sure to adhere to the following guidelines:

• Ask politely. If the person declines the interview, respect her boundaries. If she accepts, select a time and location that works for both of you. (Phone interviews are fine.) Confirm the time and location.
• Be prepared. Dress appropriately. Be punctual. Do your homework — learn what you can about the company from trade magazines, press releases, and past (and present) employees. Research will allow you to skip questions that could have been easily answered via another source. You want to use this opportunity to ask more intelligent, relevant questions.
• Listen. Be ready with a list of open-ended questions. Let the interviewee talk about herself. Good questions include:
  “What is your typical day like?”
  “What do you like most (and least) about your job?”
  “How does your company differ from its competitors?”
  “What is the future like for this industry?”
• Take notes. Remember that you’re conducting this interview to gain insight into a possible career. Write down anything that might be important. Ask follow-up questions.
• Be brief. Keep track of time. Don’t rush the interview, but don’t overstay your welcome, either. If you’ve done your homework, you know which questions to ask. Get the information you need in a timely fashion, and then let the person return to her workday. Pay attention to signals that it’s time to leave.

Don’t forget to send e-mail or a brief hand-written note to thank the person for taking time out of her day to meet with you.

Informational interviews aren’t just for job seekers. You can use them to locate mentors or to pick the brains of experts on a favorite subject. I’m preparing to write a book, for example, and have been fortunate to find half a dozen authors (including Ramit!) who have been willing to take time to describe their experience with the publishing process.

Conclusion

Although the primary rule of the informational interview is to never ask for a job, there is an exception. Says Western Oregon University’s Michael Hampton:

If you discover a job that you want to apply for during the interview, wait…The next day, call the employer and tell your contact that the informational interview not only confirmed your interest in the field, but made you aware of a position that you would like to formally apply for.

The best part about the informational interview? Few people use them. Add this weapon to your arsenal, and you’ll have an advantage on everyone else who’s out there looking for a job.

Email Print Share: Digg/Del.icio.us/Permalink

11 Comments latest by Anna

What is the Best Way to Make More Money?

March 19 15 Comments latest by What is the best way to make more money? Payrise? Blogging? Consulting? Investing? Starting a business? « How to Make 7 Million in 7 Years™

The following is a guest post written by FMF of Free Money Finance, a blog devoted to helping readers grow their net worth. FMF posts daily on a wide range of money issues including making money in a variety of different ways. Some of his successful money making ideas include maximizing your greatest asset, getting the most from cash back credit cards and turning a hobby into an extra income. These and other ideas have helped FMF dramatically grow his income through the years.

I’ve faced a money making question a few times in my life and I’d like to get your thoughts on it. Here’s the question:

As we all try to grow our incomes, which is better, doing more of what we’re currently doing or trying something totally new?

Let me give you an example.

A few years ago, I had developed my writing hobby into a fairly nice income. I was writing for top-notch magazines and getting paid anywhere from 40 cents to $1.25 per word (just to note, they give you a word-count for each assignment — you can’t simply rattle on for 30 pages to make $100,000.) I was making a few thousand dollars a year for what really wasn’t much work, maybe 3-4 hours per article. Not to mention, my family and friends (and me too) loved seeing my name in print.

However, like with anything, there were downsides. Editors were becoming more and more demanding on extras for each article, there was more competition for each article I secured, and new publications took a lot of marketing, not to mention luck, to break into. I was confident that I could get some more business from my current publications as well as break into a couple more, but this would take some time and effort. So I asked myself whether it was worth it or not. Even more, was it even worth me writing for the same publications or should I do something different with my time?

Well, I guess it depends on what my alternatives were, right?

Here are some options I had for making money in my spare time:

• Focusing on my investments — I had them fairly under control, but I needed to spend some good hours really sorting through my strategy for dealing with some past bad decisions. I knew that getting things straightened out totally would net me a decent return.

• Consulting — I had a few people asking me to do some side work for them and help them out in their businesses. The per hour rates were equivalent to what I make at work if you include the benefits from my current job.

• Blogging — Back then, no one thought you could make any money blogging. But it was something I could do easily and I thought it had potential.

• Starting a new business — Or maybe even buying an existing business. I had a few ideas for this option, but I wasn’t sure of the time commitment (which I thought would likely be high).

Each of these, like my hobby income, had their own list of pros and cons — potential income, time commitment, “hassle factor”, and so on. But before I selected one I had to decide what was my best option — to keep doing more of what I had been doing or whether I should try something new.

Millions of Americans face similar decisions every day. For instance, many people who work hourly jobs are asked to work additional hours or maybe even overtime. Each time they say “yes” or “no” to these offers represents them making a decision on which is better — doing more of the same or trying something new. And for the rest of us who aren’t hourly, we still face the issue when we look at making extra income — should we try to make more doing what we do at our jobs every day (as a side business or maybe even spend more time at work in hopes of getting promoted/earning more) or do we focus on something else during our off-time?

How does this situation apply to you? Consider the following questions that following in the same line of thinking as described above:

• Is it better for you to stay in your current profession and progress in it or consider an alternative profession?

• If your current profession is acceptable, is it better to work on advancing in your current company (working extra hours and harder to get raises/promotions) or is it better to consider doing the same type of job at another company?

• Then again, maybe the best way to maximize your income is to simply do a good enough job to remain employed, then spend your extra time on outside income-producing projects.

• And which outside project(s) should you choose? Ones you’re familiar with or ones that are new/different?

• Ultimately, is it better for you to spend all your time on outside pursuits (such as your own business) versus any time on a job?

It’s certainly a lot to consider — and obviously money is not the only factor. But if you honestly think through all the options and their associated payouts, risks, time commitments, levels of personal fulfillment, and so on, you’ll be able to pick the option that makes you both the wealthiest and happiest.

For me, this latest decision came down to the following:

• I was tired of writing for mainstream publications.
• I was tired of dealing with editors demanding more work for less pay.
• I wanted to try something new.
• It wasn’t like I was making an extra $50,000 per year, so the risk of losing everything by trying something new was low.
• I had the feeling I could make some big money with one of the ideas.

In the end, I cut back on all but the easiest to maintain/work with publication (which still gave me 3-5 articles a year) and focused my remaining time on getting my investments on track. Once I completed this (it took me a couple months), I started blogging. So far, it’s turned out to be a great decision as:

• I can do much of it from work — with my employer’s blessing, they are the main sponsor of my blog
• I make a great income — While I now donate all the blogs proceeds to charity, that doesn’t mean I always will.

So, now the question is in your court. Which do you think is better: doing more of what you’re currently doing or trying something totally new?

Now I have to get back to deciding whether I should do more blogging or try something new.

Email Print Share: Digg/Del.icio.us/Permalink

15 Comments latest by What is the best way to make more money? Payrise? Blogging? Consulting? Investing? Starting a business? « How to Make 7 Million in 7 Years™

Benchmarking Asset Allocation Investment Performance Using Indices

March 18 6 Comments latest by leroygardner3.com | finance | technology | more » Blog Archive » Asset Allocation the most important aspect of investing…

Kent E. Irwin is the President and Co-Founder of eFinplan, LLC, the first online comprehensive financial planning software for consumers. He is also a Chartered Financial Consultant (ChFC), a Chartered Advisor in Philanthropy (CAP) and a Chartered Life Underwriter (CLU).

My article entitled The Asset Allocation Style of Investing, highlighted this method of investing made popular from the study by Garry P. Brinson, Brian D. Singer, and Gilbert L. Beebower that found that over 91% of long-term portfolio performance is derived from the decisions made regarding asset allocation, and not market timing or security selection.

In that article I compared 5 fictitious model portfolios to help demonstrate different risk levels: very conservative ‘Volvo portfolio’, conservative ‘Lexus portfolio’, moderate ‘Acura portfolio’, aggressive ‘BMW portfolio’, and lastly the very aggressive ‘Porsche’ model portfolios – each investing in a different mixture of cash, bonds and stock, as well as different allocations of large, mid and small cap stock and foreign stocks.

Benchmarking
The chart below provides historical rates of return for each asset allocation model from the article, based upon the respective indices. Investors should take into consideration expenses and timing and have a healthy historical perspective.

The Expense Factor

The table below compares the GROSS rates of return that you would have earned in any of these portfolios if you invested in index funds that held investments identical to the index. Gross rates of return are before any expenses, such as:
* Mutual fund management fees and expenses
* Taxes
* Commissions
* Transaction costs
* Financial planner’s management fee

Timing

In order to have earned these rates of return, you would have had to invest at the same precise time of the time period represented. Fluctuations in the market can make a drastic difference in your actual rate of return, so if you invested a lump sum of money on a day that the market was down or up, or you invested each month (perhaps using dollar-cost-averaging), you may and will experience quite a bit different results than illustrated here.

Historical Perspective of Indexing

Index fund investing (passive) has been popular because people hear in the media frequently that a majority of actively managed mutual funds do not consistently beat their respective index.

Actively managed mutual funds usually have higher expenses, thus making it more challenging for them to out perform their passive brethren. However, investors may want to consider looking for mutual funds that beat the indexes (net of expenses), they might even find some that have a lower risk (volatility) than their index.

The preference to invest in index funds is a fairly recent phenomenon. Now you can even invest in ETFs or exchange traded funds, a hybrid of index investing that has emerged in the last several years. The charts below illustrate returns all the way back to 30 years, however index funds and ETF’s didn’t exist for each of the indexes used to make these calculations back that far.

Past Performance an Indication of Future Performance?

Anyone who as ever glanced at any financial product advertising or literature will see “Past results are not an indication of future performance” pasted all over the place. This sentence is required by the security industry’s regulating authorities and it is very true. However in order to make intelligent decisions, historical information is very useful for comparison purposes, in addition to a lot of other financial information including your own personal financial plan.

The Indexes

The indexes used to compile the historical rates of return are below. Keep in mind there are dozens of different indices. These ones many feel most closely represent the benchmark for each category. There is some differing of opinion in the investment community as to the best indices that should be used for benchmarking.
* Cash – Money Market (3-month CD
* Intermediate Long Bond – Lehman Bros Aggregate Bond
* Large Cap Value — S&P 500
* Mid Cap — Russell Mid-Cap Index
* Small Cap – Russell 2000
* International Equity – MSCI EAFE Equity Index.

	Historical Rate of Return
	Portfolio Model	‘Volvo’	‘Lexus’	‘Acura’	‘BMW’	‘Porsche’
	Model Type	Very Conservative	Conservative	Moderate	Aggressive	Very Aggressive
	1 year	6.10	5.94	6.06	5.75	5.60
	3 year	6.73	7.47	8.49	9.08	9.87
	5 year	8.80	10.33	12.02	13.46	15.11
	10 year	6.32	6.56	6.75	7.03	7.37
	20 year	7.14	7.32	7.72	8.19	8.65
	30 year	9.55	10.04	10.15	10.83	11.32

If you do your own investing - active or passive or hire someone to invest for you, it is prudent to make sure that you are doing as good as the benchmark. The benchmark is a minimum expectation of rate-of-return that you should be achieving. It is a way to hold yourself or your investment advisor accountable. It is important that you know why your investments are either not doing as well or much better than the benchmark. Either could be cause of concern: it could be merely a timing issue or it could be because your advisor made a mistake or is not doing their job. It is important that you are in the know and asking the right questions, and getting the right answers.

Asset allocation investors do not just invest in funds similar to the S&P 500 or the DOW (the most common benchmarks), therefore they should compare their results to aggregated benchmarks that include indices that closely match their allocations.

Email Print Share: Digg/Del.icio.us/Permalink

6 Comments latest by leroygardner3.com | finance | technology | more » Blog Archive » Asset Allocation the most important aspect of investing…

Previous Page

Next Page