Retiring in your 40s without striking it rich

Even though I'm still far away from retirement, I'm already looking forward to the day when I can work because I want to rather than because I need money. Undoubtedly, others are in the same boat no matter how old you are currently. This is the first year that Danielle and I maxed out our 401k contributions (though we've been aggressively contributing before that, just not to the max) in the hopes that early savings can lead to early retirement.

And apparently it can work! MSN Money has an interesting article titled, "Retired by 50: What it really takes." Granted, they aren't talking about retiring and traveling the world or spending every day on the golf course. But they do point out that making some sacrifices and saving diligently early in life will reap rewards later. (Thank you compound interest!) Another key piece of advice from the article is eliminate all debt. How can you save when you still owe others?

I'm not advocating giving up stuff you enjoy so that you can retire early at all costs, but just use reason and moderation when making decisions and pocket the extra money. Some of the examples in the article are a bit extreme, like living in a van while working as an engineer at Sun Microsystems but others make perfect sense such as living a minimal life. "It's not about what you have, it's about how little you need."

I've found that living in a one-bedroom apartment with my wife not only saves us rent money each month, it also saves us from buying things we don't need because we simply don't have space for more "stuff". We'll be at the store and see some new gizmo and get all excited about it. Then we ask ourselves "Where will we put it?" and 95% of the time we walk out empty handed.

Anyway, check out the article for some good stories about saving money early on and getting out of the rat-race while you're still young.

MSN Money - Retire by 50: What it really takes

What you need in order to get to the top

One of my favorite sites, lifehack.org, had a great article the other day titled What is most likely to help you reach the top? This seemed appropriate for this site considering that's often the goal of many people pursuing an MBA.

The article lists ten things you should (and shouldn't) do if you want to make it to the top in today's business world. However, there is a recurring theme throughout most of them and it's a simple lesson. Be nice. Seems easy right? Actually the do's and don't are more about being well-liked by everyone in your office and a lot of that can be summarized by simply being a nice, genuine, caring person.

"When it comes to success in today’s world, being the kind of person others like outranks all of the fashionable traits like competitiveness, willingness to work harder then anyone else, piling up qualifications, or blind obedience to the demands of the people at the top. Pleasant, likable people have the best chances of being hired, promoted, and rewarded."

"Being nice" can lead to "being liked" if done right even though the two aren't the same thing. (And if you can't remember all ten points in this article, "being nice" should cover you pretty well.) Once again, going back to something fundamental like this can be your ticket to the top. Remember to focus on these fundamentals. Don't make anything, including getting to the top, more complicated than it needs to be.

What is most likely to help you reach the top? at lifehack.org

Life is not inside a computer

How many times do you find yourself moving from one screen at work to another after work? Let's face it, a lot of us sit in front of a computer most of the day because we're so-called "knowledge workers." But do you ever find that after a hard day of work you come home and plop yourself right back down in front of the computer again? Arguably you are probably not working any longer, maybe you're reading your personal email, browsing Facebook, or checking out the latest lolcats. This might be how you relax, what you do for fun. I do too.

I'm guilty of this all the time. Some of you may choose a different screen to sit in front of, the TV. I even do this too and I don't have cable! (Though I do have a very active Netflix account.) Lately, I've been starting to feel more guilty about this. Perhaps it's the time change. It's dark at 5:30pm now and I feel like the day is over before I'm even home from work.

But there's something to be said for "unplugging" and doing something besides sitting in front of the screen. Even boring chores like washing the dishes or doing the laundry give me a refreshing sense of activity compared to sitting in front of the computer. I find I feel even better if I walk downtown to run errands or just go for a stroll with my wife.

I think a big part of this feeling is that although I love computers and the internet, sometimes I feel like life is passing me by while I surf the web. Ferris Bueller said, "Life moves pretty fast, if you don't stop and look around once in awhile, you could miss it." I hesitate to make any commitment to changing my own behavior but I'm definitely going to try to be more conscious of this and limit the time I spend sitting in front of a screen, at least at home. I challenge everyone to give it a try. Force yourself to take a "screen break" for at least two hours after you get home from work. Instead, spend the time talking to your spouse, cooking dinner, or doing some reading. See if it improves the quality of your life.

(Yes, this is an actual photo of my apartment.)

Conflicting needs for stock price

If you work at a company where they give you "stock option refreshers" based on your performance I'm sure you've been in a similar situation. Chances are that you already own some of your company's stock, so of course it's in your best interest for the stock price to go up.

But then, assume that you've done a great job this year and your boss comes to you after your annual review and says "The company would like to thank you for your hard work thus far and your continued commitment to the success of our company. Here are 100 company stock options." (Remember, cash bonuses are to reward past performance, stock options are to retain top quality people.)

Usually, these new options are granted based on a stock's price for a certain date. You want the grant price to be as low as possible so that you make the difference between the current price and grant price whenever you sell them. What if there's another wrench in the system though too? What if your company enforces a very strict trading window saying you can only sell shares or exercise option between certain dates?

In this case you can find yourself in a bind. You want the stock price to soar so that you can sell your current options while it's high. But you also want it to drop so that your new options have a low grant (strike) price. It's a dilemma and I'd rather have prices going up since the new options don't vest for at least a year in most cases. I'd argue it's best to stick with the long-term outlook and therefore the new option grant price won't be a big issue if the company is healthy and overall the stock prices continue to rise over the new 5-10 years.

Dilbert's Career Advice

Would you consider taking career advice from Dilbert? Ok, maybe not the cartoon with the goofy tie but you might want to consider listening to Dilbert creator Scott Adams about what it takes to have an extraordinary career. This was posted in July but it's worth revisiting. Scott says,

But if you want something extraordinary, you have two paths:

1. Become the best at one specific thing.
2. Become very good (top 25%) at two or more things.

The first strategy is difficult to the point of near impossibility. Few people will ever play in the NBA or make a platinum album. I don’t recommend anyone even try.

The second strategy is fairly easy. Everyone has at least a few areas in which they could be in the top 25% with some effort. In my case, I can draw better than most people, but I’m hardly an artist. And I’m not any funnier than the average standup comedian who never makes it big, but I’m funnier than most people.

This makes a lot of sense. As soon as you can do two or more things moderately well, the unique combination sets you apart from your peers.

Full article - Career Advice from The Dilbert Blog

Why Won't Google Stock Split?

If you watched the stock market Thursday you no doubt saw Google's stock (GOOG) break the $700 mark for the first time. Analysts said they thought it might hit $700 by the end of the year, but few believed it would happen just weeks after Google released their quarterly earnings.

SFGate.com had an article about this big day and noted it took less than a month for the stock to go from $600 to $700.

But I found this quote the most interesting:

Google co-founders Larry Page and Sergey Brin, who regard Buffett as an inspiration, have resisted requests to split their company's stock so more people could afford to buy a few shares. Their theory: a high stock price tends to attract more patient and knowledgeable investors who pay closer attention to a company's long-term strategy than its ability to hit short-term earnings targets.

To me, this seems like solid thinking and probably part of why Google isn't another dot com bust. Google has a record of doing things differently and it's been a big contributor to their success. If you recall, they held an auction-style IPO. Sometimes if you want to be successful, you can't just follow the path of others, you need to do your own thing even that goes against the accepted norm. Disclaimer: These are my own independent views (and those of SFgate.com as quoted in the article) and not associated with my employer.

What is "The Poor Man's MBA" All About?

This is officially the first blog post on thepoormansmba.com. At this point, you're probably wondering what this site is going to be about. I am too. Well, I've got a rough idea of what I want to write about but I guess I'll just see how it goes. Here are some subjects you can expect to see covered on this blog:

Advancing your career

Differences between good companies and great companies

Unique business insights

Management tips for time, priorities, and people

Work-Life balance

Looking at situations in unique ways

Current business trends

Applying to business school

Personal investing and financial decisions

And much more...

These days an undergraduate college degree is about the same as a high school degree was 30 years ago. And because of this, more and more people are flocking to the top business schools for an MBA and hoping that this will help them stand out from the crowd or give them the opportunity to pursue their dreams. I know because I'm one of them. But you can learn a lot on your own and immediately test what you've learned at your current job. This blog aims to share successful strategies for the workplace that anyone can use.

Some recurring themes you'll see in many blog posts will be the ideas outlined in the subtitle of the blog:

Consume information - read everything you can get your hands on; be a sponge for knowledge and learn from others

Look for connections - identifying connections between two seemingly unrelated things can be important for unlocking something brand new

Focus on fundamentals - success often comes from breaking things down into their most basic parts; good solutions don't need to be complicated

Think for yourself - don't bother copying what others are doing because you'll already be behind; have the strength to do your own thing