How to Build Wealth with Singles & Doubles!
Image sourced by Antoine Schibler @antoine_schibler
When I worked at Citibank in the late 1990s, I worked with Brian W. who was a very successful banker.
We were a part of a specialty finance group that focused on Asset Based Lending, also called ‘ABL’.
ABL means the loans are backed (supported) by collateral.
A common example of an Asset Based Lending transaction is a home mortgage where the lender takes a security interest in the asset financed – the home in this case.
Another example of an asset backed loan is an automobile loan.
Simplifying the process, If the borrower Fails to make the agreed upon debt service payments, the lender can seize the collateral and use the proceeds to pay off the loan.
Brian was very methodical.
Strategically, he continually looked to expand his network of professional contacts in the ABL space. This way, Brian created more opportunities for himself – and sourced more deals and increased the likelihood he would make his production (revenue) goals.
Smartly, Brian focused on financing opportunities and transactions (deals) that based on his analysis and experience he could reasonably close.
Over time, Brian developed a Set of Rules – a Checklist – of red flags and pitfalls based on his ABL loan transaction experience and deal experience – a Set of Guidelines – a list of potential pitfalls and issues that could derail the transaction and cause the transaction to fail – not to close successfully.
When Brian was analyzing an ABL opportunity, he reviewed the transaction opportunity against his Set of Rules – his Checklist.
Whenever Brian identified 3 or more serious (material) Red Flags, he passed. Pencils down. He looked for the next transaction opportunity.
As the baseball umpire says, “Three Strikes You’re Out!”
Brian called his evaluation framework – his Go-No Go Decision – ‘The Three Strike Rule’.
Brian was ‘Steady Eddie’ or ‘Steady as She Goes’ – kind of like Henry Kissinger.
Based on my reading, Henry was the ‘glue’ in global politics and commerce – for decades. Henry Kissinger was part of the D.C. fabric and global political landscape, surviving generations of Presidents, Vice Presidents, Congressmen, Senators and numerous regimes.
Or perhaps as the world, regimes and world leaders go. . . Steady Eddie. Steady as She Goes!
That’s what Brian was – Steady as She Goes! Steady Eddie.
Brian’s banking career spanned over 35 years. Impressive.
Me?
Back in the day, I was a cocky kid – a freshly minted MBA – swinging for the fences, going after mega-deals that were potential grand slams. Because that’s how I thought I would get a big bonus, make the big bucks. I was decently wrong.
The problem – similar to our ‘friend’ Flamboyant Freddie – is that grand slams are harder, much harder, to get. A much lower probability than going for singles and doubles.
The problem with trying to hit the grand slam is that it’s more likely to strike out than hit the grand slam.
Truth be told, my on-the-job performance at Citibank was decent but not great – Below my potential.
NO More though!
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Looking to build lifetime wealth, gain peace of mind and retire comfortably and worry-free?
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Before we turn to the Action Steps Du Jour, let’s return to our new ‘friend’ Flamboyant Freddie who we introduced in the recent blog post 401k Plan Riches and the Employer Match!
Flamboyant Freddie Chastised Budget and Grow Rich® for Urging our members to enroll in their company’s 401k plan or 403b plan and at the least, contribute enough money to capture the entire employer match (employer matching contribution).
The point was that the employer match is FREE Money.
Freddie is a day trader in the stock market, trading in and out of stocks to grab a tick or two – small increases or decreases in the price of a common stock.
Investopedia defines a ‘Tick’ as the smallest price movement in a common stock – typically one penny, 1₵.
The trouble with Flamboyant Freddie is that he goes Boom Bust.
Some weeks Freddie is flush with cash, living large. Other weeks, he’s scraping for dollars, borrowing on his credit cards and not paying his bills.
Brian on the other hand, kept moving ahead, one step at a time. Through boom and bust cycles; bull markets and bear markets. Year in, year out, he made his production target.
In most years, Brian received a salary increase (raise) and a merit bonus.
And that’s Exactly the point – proceed slowly and methodically.
Slow and steady wins the race.
How about you?
Not one to break from Budget and Grow Rich® tradition, be sure to grab these 30 thought-provoking questions to help you double your salary, build wealth and enjoy the good life you deserve:
On the Job:
Do you have an in depth understanding of your job description?
What do you have to do to perform at least in line with the job description?
Do you realistically evaluate your on-the-job performance on a regular basis?
Are you meeting expectations? Exceeding expectations? Or falling short – below expectations?
Can you meet with your supervisor to review your on-the-job performance to get feedback, say every six to eight weeks?
How can you modify your actions and performance to exceed expectations?
Personal Budgeting:
Have you created your personal budget?
Have you analyzed your costs, expenses and spending in light of your income to determine whether you’re spending too much, especially in light of your income?
Have you rearranged your spending so it’s less than your income?
Are you continuously looking for ways to cut your expenses?
Is your personal budget up to date – current? Or should you revise your personal budget based on your current financial position and personal circumstances (for example a change in job or family status), financial goals – current and new ones – and any changes in your income or expenses?
Are you sticking with your personal budget?
Building Wealth:
Have you created a financial plan?
Is your financial plan up to date based on your current financial circumstances, financial position and what you see ahead?
Are you taking smart steps to follow your financial plan?
Are you saving enough money and investing enough money to achieve your financial goals and create lifetime wealth?
Are you investing your money and managing your money to build wealth and create wealth to enjoy a good retirement life?
Have you created an investment plan and an asset allocation?
Are you investing your money in a way that’s aligned with your investment goals and risk tolerance?
Have you enrolled in your company’s 401k plan or 403b plan (retirement plan)?
Are you contributing enough money into your company’s 401k plan or 403b plan to capture the entire employer match (employer matching contribution)?
Are you increasing your annual contributions to your 401k plan or 403b plan to reach the maximum annual contribution allowed by the IRS?
Are you contributing enough money into your company’s 401k plan or 403b plan so that you will achieve your financial goals?
If ETFs (Exchange Traded Funds) and/or mutual funds fit into your financial plan, are you investing in ETFs (Exchange Traded Funds) and/or mutual funds?
Is your investment plan working?
Should you modify your investment plan or asset allocation?
Monitor Your Progress!
Have you developed Your set of rules or sets of rules – your Checklist or Three Strike Rule?
Are you monitoring your progress and evaluating your progress regularly?
Are you on track to meet your personal goals, financial goals and wealth-building goals?
Is your investment plan working?
How can you improve your on-the-job performance so you double your salary?
What steps can you take to do better, to make more progress?
Take Action!
Success, doubling your salary and building wealth require planning, strategizing, effort and action.
Have you set an action plan in each of your key areas – goals and objectives?
Have you set deadlines when you commit – when you will take action?
Do you finish the projects you start?
Are you actually doing the things you need to do to achieve your goals and objectives?
Are you taking action?
If not now, when?
Singles and Doubles are the Key!
Steady as she goes!
See you in The Batter’s Box,
Arthur VanDam, CPA MBA
Build More Wealth Right Now Click here.
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Disclaimer: OH and Please Remember, we are Not financial advisors, financial planners, attorneys or accountants and are Not providing any specific financial, tax, accounting or legal advice here. Be sure to conduct your own due diligence and consult your own professional advisors to get sound professional advice that’s specific to your financial and personal circumstances, risk tolerance, time horizon and investment goals and objectives among other key factors!
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