How Do We, & How Should We, Examine Economic Data?

Economic data and financial news might be the most analyzed and, at the same time, the least truly understood information in the news today. For example, is the fact that, if, China's economy continues to grow good or bad news, and why? One analyst might report that China's continued growth is indicative that there is still growing worldwide demand, which should be good for the world's economies. At the same time, other analysts will see this growth as occurring as a result of the Chinese government pumping large infusions of monies into their economy, and at the same time, artificially keeping the value of the Chinese currency "cheaper" than it would be if it were permitted to be freely traded on world markets. Still another economic analyst states that this growth is causing runaway inflation and an overheated economy, that the analyst then refers to as "The flip side of the American economic problems." All the time, others discuss how accurate or truthful, the data China publicizes may, or may not be!

The economic analysts breathtakingly await the various weekly "reports," including the jobs reports (which should actually be referred to as the 1) Those submitting new preliminary unemployment applications; and 2) The official unemployment rate. Then, they argue about the numbers, which are invariably either better or worse than "expectations." Whose expectations, and why do we continue to refer to them if the actual numbers are almost either better or worse than anticipated? The official unemployment or joblessness rate is another curious number because it only includes those that are still actively searching for employment- that is, are presently collecting unemployment benefits. Therefore, this does not refer our count the under-employed, the consultants whose income have dwindled, commissioned salespersons incomes, or small business owners (who are ineligible for unemployment benefits). Many believe that the approximately 5.7% official rate becomes closer to 9 or 10% (or even more), when these situations are also included.

The inflation rate, or the manner in which the Cost of Living rate are calculated is another controversial situation. If gas at the fuel pump, and home heating oil have risen dramatically, and airfares are significantly higher, and tolls and train fares have jumped, and food per ounce is significantly more money, am I the only one that wonders how the official inflation rate is stated as being very, very low. On the other hand, some economists refer to lower oil and gas prices, as being a negative scenario, while most of us consumers, rejoice when we pay less at the pump. Terms like seasonally adjusted, commonly used, essentials, non essentials, etc., further confuse the issue. Suffice it to say that I doubt there are too many people who believe that inflation number. Of course, for we conspiracy theorists, we might find it curious that the same government who has a vested interested in keeping the official numbers low (political, Social Security Indexing, government union contracts, etc), are also the ones that calculate this index.

One month we show improvement in housing starts or housing sold. Another month a drop. However, is this an increase or drop from what levels, and how long does a homeowner have to wait to have his home sold today versus a few years ago, and at what price point. Also, since this differs from region to region, and even often without a smaller geographic area, is there much real value, in observing these, out of context?

Mortgage interest rates remain low, which most consider a positive thing, but others state shows weakness in the economy. The flip side of this, is that seniors, who often depend on the interest they receive on their principal, are challenged when banks pay, such small interest rates!

The point of this discussion is simply that we should all be cautious and beware when we see these financial and economic indexes and numbers. While they no doubt, may have some limited value, I question whether that value makes up for all the 'spin," confusion, and misinformation that we receive whenever any of this data is released.

Why We Need To Re - Focus on the Fundamentals of Educating?

When I went to school, the philosophy was to teach the "3 R's," reading, 'riting and 'rithmetic. Having come into contact with many college students and even graduates, I have found that many exhibit poor writing skills. When I have interviewed young people, and requested three paragraphs from them as part of the process, the result has convinced me that today's educational system has not sufficiently emphasized this aspect. While certain new developments and advances have furthered educated, this de-emphasis in necessary skills has been detrimental to our future generations. In our day - to - day lives, the lack of these fundamentals often complicates many processes and activities, because individuals find it challenging to clearly communicate, and/ or understand some instructions, guidelines and ideas. Understand that many processes and transactions include somewhat complicated instructions, paperwork, etc., and/ or a certain basic understanding of some math concepts. Think about this, as it relates to either the real estate, or investing processes!
 
Many of these young people are otherwise extremely bright and talented, so the lack of writing skills cannot be attributed to a any lack of intellect, or intelligence. My conclusion is that when schools and school "policy makers" decided years ago that other things were more important to teach than the "3 R's," they de - emphasized formal writing skills. Many of the same young people who have difficulty writing, have an incredible grasp of concepts, and an otherwise superb skill- set. However, it appears that many schools have maintained emphasis on only one of the "R's," reading, while placing far less emphasis on either writing or arithmetic. Many of the young people who exhibit writing challenges also have far less mastery of basic mathematical skills, such as addition, multiplication, subtraction and division. These individuals have been taught many sophisticated ideas and concepts mathematically, but a large number must depend on a calculator or some other device to do even the most basic of mathematical functions.

Have there been some benefits to today's students because of this change of emphasis? There certainly have been in the areas of technology, technology usage, interpretation, music and the arts. However, where I believe the system has "let down" these "kids" is in mastering many basic skills. In the attempt to educationally "reinvent the wheel," and correct some of the "malfunctions" of previous educational policy (such as teaching by rote, memorization, and not relating what was being taught to practical usage), the "new education" causes huge gaps in necessary skills. For example, if someone cannot adequately put thoughts to paper, how is one able to express himself to others? Today's over-dependence on such things as "texting language," has created a generation weak in grammatical skills, spelling ability, and vocabulary. The "abbreviations" used instead of words, the shortcuts, etc., are fine when using SMS or MMS media, but are not the optimum way to communicate in a regular written document, either on paper, in a Web- article, in a well- written Blog, etc.

Hopefully, educators will realize that written and basic mathematical skills are a necessary learning block that must be taught, used and mastered, if more sophisticated ideas are to be optimally learned. Educators must also learn that while the "3 R's" may not be "fun," they are necessary in the real world of everyday life and business. Many colleges and universities have realized the lack of these skills in their students, and have begun to emphasize important skills, such as writing. However, isn't it somewhat unfair to college students to have to shoulder addition stress and burden to have to first master these skills in college (often extending the length of time it takes to graduate, plus the additional expense), when the basics should have been adequately taught prior to that. One of the reasons that the SAT exams now has a written component is because of the recognition of writing as a necessary and essential skill.

Parents should emphasize these needs to their School Boards when children are younger, so that college students are far better prepared. Parents should do this from both an educational as well as financial point of view. Does anyone really believe that this educational deficiency and the fact that most students average five or more years to finish college today, are unrelated? Let's get back to some basics, so that students will be better equipped to handle life's challenges and needs!

Why Negotiating Is Both An ART & A SCIENCE?

Have you ever thought about how many aspects of life are related to, or involve negotiating? Isn't it a fact that nearly everything we do ends up more successfully if we are capable negotiators? However, despite the fact that it is so important, whether we are involved in selling, leadership, contracts, any business aspect, as well as in our day - to - day interpersonal dealings, very few individuals ever fully explore the needs, requirements, components, techniques, or nuances that are so relevant. Unlike many other techniques, effective negotiations must be understood as both an ART, as well as a SCIENCE! Never under - estimate how important quality negotiations are to most activities. It is not a simplistic activity, but must be understood, practiced, and perfected. When one selects a Real Estate Professional, it is extremely relevant and important, to fully consider how professional and capable a negotiator, your prospective agent might be!
 
1. The A, R and T of ART should help propel us towards creating the best opportunity for success. Of course, it begins with the right attitude, which must be positive, proactive, and one that willingly cooperates. When this becomes the opening mindset, the negotiations are approached to bring forth a win - win scenarion, rather than an adversarial beat you opponent one!

2. Never go into a negotiation unless you do so by seeing reality the way it is, rather than merely the way you might wish it to be! This requires a commitment and search for actually understanding needs and nuances, and going forth with an open mind, rather than prejudging.

3. No negotiation, no matter how well trained or qualified the negotiator may be, will bring forth the results you desire unless you understand that there must be mutual trust between negotiating parties. However, one can't just hope for, expect or ask for this type of trust, but rather must earn it, by a combination of his actions, empathy, and commitment to absolute integrity.

4. As essential as the ART is to this activity, it must also be understood that there is also a SCIENCE involved. This must always begin by focusing on your search for agreement. How can this go anywhere meaningful unless both sides commit to, and seek agreement/ meeting of the minds?

5. It is important to aim towards some degree of common ground, where neither side feels he is merely winning or losing.

6. While you can use all your efforts and best intentions towards achieving these necessities, one can never control what others do or how they may behave. Therefore, it is important to proceed with ingenuity and absolute integrity.

7. Listen effectively, and view needs from the eyes of the other party. Only when there is a focus on empathy can progress be made the way you desire.

8. Remember that things are rarely simply black and white! Effective negotiating requires mastering the various nuances.

9. You must have a certain degree of clarity and consideration, if you want to end up with a contract where both sides feel resulted in a fair and reasonable manner.

10. Is your energy level maintained at a the highest possible level, in a positive, meaningful and significant manner? Lethargy and negativity are generally the cancers to successful negotiations!

The better you understand what negotiating involves, the more effective you will be. The combination of a variety of skills, perceptions and attitudes, used in a synergistic manner, will usually get you to the point you wish to be.

How To Choose A Consultant?

Many individuals represent themselves as qualified consultants. These people often represent themselves as experts in specific fields of endeavor, with special skills, knowledge and expertise that makes paying their sometimes exorbitant fee justifiable, and even a necessity. Many so called experts are simply trying to set some product, service or program that often benefits the consultant to a greater degree than the organization. Whether you are seeking help and/ or assistance, on a personal issue, business or organizational one, or seeking the best representative/ consultant to meet your needs in real estate and/ or finance (e.g. selecting a Real Estate Professional or Financial Adviser), it is important to be able to select the best individual to meet your needs.
 
If one is searching for a consultant, I would strongly advise staying away from any consultant who insists on using a one size fits all approach. A good consultant is an effective listener, who thoroughly listens before making any recommendations or proposals. I have witnessed far too many so called consultants who made self serving recommendations that ultimately are harmful to their clients. In my three decades plus of consulting, I have worked hard to develop a reputation for always placing my clients first. I steadfastly object to those that soil the reputations of all consultants by acting in unscrupulous manners, and hurting the image of the many honorable and reputable consultants.
When considering retaining a consultant, it is essential to get recommendations from others. However, like so many other times, the individuals given for recommendations are either friends or others that are certain to only give glowing recommendations. Consultants should dedicate themselves to their clients, and serve the need of their clients.

It is the responsibility of a consultant to listen thoroughly before making any proposal. Each organization has a different ethic and culture, different needs, different financial considerations, different demographics, and different membership and leaders. Professional consultants have learned to always collect their fee up front, because otherwise it may be difficult to give an unbiased and honest opinion. After observing and listening thoroughly, a consultant must help the organization to create a risk/ reward chart, and be certain that the leadership of the organization fully understand and appreciates the complete ramifications of all actions. Consultants must also be able to explain that doing nothing is in and of itself, taking an action. I believe that a good consultant needs to explain to an organization's leadership that taking no action very often has far more dire and adverse results that even taking the wrong action. Far too many organizations do many things less than optimally. They often budget incorrectly, do not see the big picture, spends too much on certain items and too little on others, and almost universally, spends an inadequate period of time effectively training its leaders.
Many organizations can benefit from using the services of a consultant, but it must be the right consultant. Choose wisely.

Factor in risk/ reward, quality, approaches, and how well you believe you will be able to work with a specific individual, etc. Often, who you opt for, as a consultant, will directly impact how well you proceed! 

You Will NEVER Get What You Want, UNLESS You Ask, & Close The Deal!!

Everything we do in life involves the sale of either a product or a service. While many professionals often cringe at agreeing with that premise, the reality is that in some manner or other, each of us need to sell either ourselves, or someone else, on either an idea, a service or a product.
Having trained salesman and marketers, as well as their managers, for over three decades, I have observed innumerable individuals who never achieve the results that others, who often appear to have less talents or abilities, end up with. Many marketers and salespersons make the mistake of painstakingly preparing and rehearsing their presentations (or "shpiels"), and often give a technically near-perfect presentation. However, often others with lesser presentations end up with far superior results. Whether you are involved in a person - to - person business (such as being a Real Estate Professional, or Financial Adviser), or work in a customer relations position (understanding that all interactions with the public, involve some degree of customer service/ relations), or have issues with family inter - reactions, you still need to understand how important it is to ask, and how to do so efficiently, and effectively.
 
The main reason for this often is something that is referred to as "closing," or "the close," or "the ask." When someone does not ask the person he is presenting to for some sort of commitment or agreement, he rarely will get it volunteered. Effective and productive presenters realize that one must ask something like, "Doesn't it make sense?" and wait quietly for a response before proceeding.
When these same people role play, or rehearse their technique, they nearly always do close. Then why don't they when the real opportunity comes up? At one point, I over-analyzed this situation nearly to death. I "bought into" all the philosophical "mumble-jumble" that is given by those without true experience or expertise, who have simply read or heard something somewhere. However, over time, I have come to a very simple reason why closing is not done in real-time situations. Many individuals have difficulty going outside their own personal comfort zones, to ask for the "sale" or "deal" or "agreement." When one does not ask, they almost never get to the "deal" stage.
The same is true in negotiations. I have conducted hundreds of negotiations in the last three decades. One only has a chance of getting any type of adjustment or concession during a negotiation if you ask openly for what you want.

Therefore, it is important that each of us understand that it is not the presentation that counts, as much as the "close." If you really want something, you must ask! Too many of us make excuses, and blame others when we do not achieve our objectives. Achieving objectives is very often dependent upon taking personal responsibility and doing what is necessary to get it done

Budgets - The Revenues Versus Expenses Discussion

One of the most widely, and often hotly discussed issues debated in almost every organization, is whether budget gaps/ deficits should be closed predominantly by addressing revenues/ income received/ generated, or by reducing expenses. In nearly every case, the discussion deteriorates to the level of vitriol, with both sides of the debate seemingly unwilling to listen to the other. However, the reality is, that in most cases, balancing a budget responsibly can only be done through a balanced approach. When there is too much cost cutting, particularly when it is simply done either randomly or across the board, the result in the long term is often far more detrimental than the starting point. When the concentration centers almost entirely on raising revenues, especially when that revenue will mostly be gained by raising either dues or fees, there is often a resultant attrition of membership and/ or supporters. No organization ever grows or benefits (especially in the long run) as a result of either reducing what it offers or provides, or when it prices itself out of relevance. This discussion, although specifically focused on organizations, and not - for - profits, is relevant to every business, whether large or small, or even every small independent contractor (such as Real Estate professional, financial adviser, etc)
 
1. Are most organizations' budgets bloated and/ or out of whack in certain areas? Absolutely, and that is precisely why there must be attention to detail and ramifications used when preparing these budgets. It must also be remembered, however, that even the best thought out and developed budget loses its impact when the organization simply adds expenses to it throughout the fiscal year. The best way to create a budget continues to be by using zero - based budgeting, and evaluating each expense on its own merits. Expenses must be looked at in terms of how much is being spent in relation to its priority for the group, as well as whether the organization is getting the most bang for its buck. Is the group getting its maximum benefit, or can the desired result be achieved using an alternative, often less costly approach. Should the expense area be kept the same (meaning it is optimum under the fiscal conditions), reduced or increased. It should be reduced if either it is not being done effectively, or if the level of priority has been reduced from what it was. It should be increased if at that spending level the organization needs to spend more to achieve a priority that has an essential impact. I refer to that process as ramification expense priorities.

2. Should, and must dues, fees, and other member - directed revenues be adjusted upwardly? Groups need to look at their fees in relation to what other similar groups charge, as well as by the economic realities of the day. Has the organization created a strong enough feeling by distinguishing itself by the value and services it provides? How loyal are its members, supporters, donors and sponsors? What has been done in terms of motivating positive feelings and support? The reality is that revenues often need to be adjusted, but must be done in a way that the overwhelming number of supporters question the value of remaining involved. That can only be done when a rational, balanced approach is utilized. The most sustainable organizations have come to realize that small inflation - indexed dues increases rarely create negative feelings or ramifications, and thus they use a cost of living adjustment method of annually increasing revenues. Those groups that try to maintain their dues, etc., at present levels, and then find itself needing to make a substantial increase at a particular time, are usually the ones that create resentment and resistance.

Every action an organization does has ramifications. Failure to act can threaten its very existence and financial stability, but acting without analysis and balance can have an even more deleterious impact.

Profitability Trumps Revenues!

Nearly every day, financial gurus analyze and often over - analyze the performance of a wide variety of business organizations. We often hear these individuals discuss an organization's performance in relationship to what are generally referred to as expectations. However, since businesses almost always either under or over perform in relationship to these expectations, an objective observer should realize and understand that there is a significant difference between expectations and facts. In addition, in many cases, there is far too much attention paid to gross revenues, when a company's bottom line is more dependent on profitability, which is the difference between revenues and expenses. When you invest money, are you looking at the long - term profitability, which will eventually create higher stock prices (in the long - term, but not necessarily immediately), or do you become excited by the hype created when a company's revenues increase, even if it is not accompanied by an increase in profits? Those selling their homes, must consider their personal needs, and not become overly dependent upon what they initially paid (do they consider other costs), opportunity costs of money, and their personal needs. While revenues might often be a somewhat relevant indicator, you must understand that their context, and especially, the bottom line, is far more important!
 
1. When company's prioritize revenues, they often do so at the expense of their bottom line. They do so because if these revenues come about because of ever - increasing costs such as materials, marketing and labor, the organization often does not benefit. The reality is often that, especially in more trying economic times, being overly sales oriented without paying sufficient attention to costs, diminishes and adversely impacts the bottom line. When a Realtor markets a house, does he consider how much time, money and other resources he expends, before merely celebrating the commission made. When these factors are understood, what might be initially viewed as a large fee, is realized to be, far less, in real terms!
 
2. Often, it may be easier to address controlling costs than increasing revenues. This can be achieved by a combination of factors, including spending more efficiently, being more effective, wasting far less time, and creating a strategy that objectively looks at the relationship between costs and revenues. No one can accurately see into the future, and thus, addressing expenses is often far more reliable than forecasting increased receipts. However, management must take care not to overreact and take draconian measures when more moderate, fiscally responsible approaches are called for.

3. The key to a business' success is their bottom line, not simply in the short term but into the foreseeable future. This means addressing all expenses and examining if one gains the most bang for the buck. Management must be careful that they do not cut the wrong expenses, but merely reduce the bloat, inefficiencies, and seek better and more efficient alternatives. Smart executives generally begin by utilizing a carefully prepared, organized and realistic zero - based budget, that is used as a true planning tool. Sometimes, draconian cuts will address the short term fiscal picture, but if done without planning and foresight, will often adversely impact the long term picture and performance.

Success is not based merely on how much revenue might be brought in, but rather the amount, degree and consistency of the profits. Smart business managers and leaders are far more concerned about profits and sustainability, than they are solely about revenues alone.