What Tim Bradley can teach us about Undeserved victories in Business and Life

The sports world is up in arms about this past Saturday nights championship fight between Bradley and Pacquiao. Many are screaming that the fight was fixed and that Bradley clearly did not win that fight. Even Bradley looked as if he didn’t feel he won the fight. But there are a few important lessons to be learned by Bradley’s unexpected and possibly undeserved win over Pacquiao that the public and especially business people should not miss.

Lesson One – Sometimes you lose when you think you should win and sometimes you win when you think you should have lost. Life is not fair.

Tim Bradley controlled the one thing that he could control about the outcome of the fight. He trained hard, came to the fight prepared and gave everything he had. People are screaming that the fight was fixed but anyone who watched that fight saw Bradley fight with his whole heart and do his very best. If the judges fixed the fight they clearly didn’t tell Bradley before hand.

In business everyone has major and minor setbacks but what most successful people won’t tell you is that a great deal of massive success is also about dumb luck. Ask Warren Buffet, Bob Johnson, or Mark Zuckerburg how much luck, timing, and undeserved good fortune helped them become champions in business. Like Tim Bradley they worked hard to prepare but they also showed up to the fight and won. Many with even more talent failed or never achieved success on such a massive scale.

Lesson Two – It’s going to be painful win or lose

People are so mad at the outcome that they totally missed that undefeated Tim Bradley fought almost the entire fight with a fractured foot. Could you go 12 rounds with a broken foot against one of the greatest boxers in the world? Business like boxing is a world where you sure to get your butt kicked each time you make a mistake and drop your guard or make a bad decision. Sometimes you keep making the same bad decisions and you keep getting punched in the face like Bradley did each time he didn’t block the left jab.

In the end no judge could have given Bradley the fight if he hadn’t stayed on his feet and made it all 12 rounds fighting his heart out. You can’t win the game if you aren’t there at the end and if you watch that fight Bradley went through a lot of pain to be there at the end. 

Successful business people all have a story about fighting against great odds. financial misfortunes, bad markets, lawsuits, and outright disaster but most who stay focused, come out the other side and win big. Unfortunately the majority quit too early and only have stories about the pain but not the reward. Bradley could have quit and I’m sure he wanted to.

Lesson Three – When you get an undeserved win be humble about it and gracious to the loser because chances come around

I gained total respect for Tim Bradley because of how he handled things after the decision was given. He complimented Pacquiao on a great fight and acknowledged that the crowd didn’t agree with the decision but he would keep his word and give Manny a rematch in November as promised. He showed so much class in that moment and didn’t fake it like he had really beaten the Pac Man. He got lucky because he was prepared well and finished the fight strong. He didn’t get a big head about winning because he knew he needed to do better and that he wasn’t the best fighter that day.

In business we all have some victories that are right place right time victories and we see others who are more talented fail. It is important to be humble and acknowledge our good fortune especially to ourselves. Being grateful and humble is a hard lesson to learn in America because we have a bragging culture but we also have a country full of people who were lucky to be born with opportunities they did nothing to earn. Bradley showed how to win with class.

A good friend of mine told me Bradley was clearly out classed in the fight and didn’t think Bradley ever has a chance of beating Pacquiao. I totally disagree. Go look at the Ali vs. Frasier where Frasier beat Ali like he stole something but Ali came back and took Frasier out in the next fight. Look at Ali vs Foreman”Rumble in the Jungle”, Ali was losing the entire fight and almost died in the ring but walked out a champion. Look at Moorer vs. Foreman, where a 50 year old George Foreman became Heavy Weight Champ of the World on one punch at the end of the fight.

In Boxing and in Business you always have a punchers chance even for an undeserved victory,

 

Wishing you Wealth Wellness and Wisdom

Manager of Wealth

 

The Myth of Dollar Cost Averaging

Tony Brayboy of Matrix Wealth Management

The Truth of the 401k

If you have a 50% loss in the market you have to have a 100% gain to get back to even. So for those who think the market is back please watch this video and keep that in mind. There is an alternative.

Life Insurance is not the Plan, it is the Funding Source of the Plan!

If you read my last blog post then you know that I believe you should have a plan to replace your income in the event something unfortunate happens to you. Everyday I see examples of families that failed to plan and the hardships the surely come with the lost of that income.

Let’s be clear I know you don’t want life insurance. You want your family to be able to carry on and accomplish the dreams and plans you had for them. Maybe by the end of this series you will want life insurance when you realize how much you can use it to make your dreams come true while you are alive. The important thing is that having Life Insurance does not solve all of your planning issues because a large sum a money going to your family will not solve the main challenge facing your family. The main challenge is a clear and effective plan.

Many people just leave money to their families and before long the money is gone and then the financial struggles begin. Why not set a plan in place using your will to say exactly how the money is to be dispersed?  Why not have the money go into a fund the preserves the capital but pays a life time income to your  surviving family members and passes the principal on to the next generation?

The insurance is only the funding source for the plan. If you have 2 million dollars in life insurance why not have your trustee set up an annuity that pays $100,000.00 per year to your heirs and then passes the payments on to future generations when the pass. Most people don’t do this because they did not know it was an option. Never leave provsions without instructions.

Your gift to your family could be multi generational if you plan well. Can you imagine your two million paying out 5 million over fifty years while preserving the principal? That’s the power of a couple hundred bucks a month in the right hands.

Remember of the plan,Life Insurance is not the Plan, it is the funding source!

Wishing you Wealth Wellness and Wisdom,

Mark

Manager of Wealth

If your Mortgage/Rent payment is higher than your Savings deposit you are in Trouble

The title of the article says it all. Simply put, If you are paying more for your home than you are into your savings every month it is just a matter of time before you fall into major trouble. After a decade of being a mortgage broker and two decades of working with people’s investment needs I have noticed a trend that supersedes all others. 90% of the middle class pay more toward mortgages than toward retirement. This is very dangerous.

Growing trend among American professionals

The professional with all of her bills paid on time, perfect credit, and everything going according to plan is who I’m talking to. This article isn’t about those struggling but about those who are seemingly doing better than ever before.  The last boom in the economy came just in time for my generation. Chances are that if you are a professional person you have earned between $75,000.00 and $125,000.00 a year for the last decade. Last year I interviewed over 100 such professionals average age 39 with 15 plus years in the work world. For the last decade almost all had earned between $750,000.00 and $1,000,000.00 but not more than 6 had saved more than $100,000.00. I’m not talking about people who bought a lot of fancy cars and partied it all away. I’m talking about average joes who purchased their piece of the American dream.

Why is this trend a disaster waiting to happen? We live in an era of “defined contribution “plans(ie IRA and 401k) not an era of “defined benefit” plans(ie, pension plans) like the last generation. All we will have when we retire is what we have saved and the interest in can produce.  If the majority of our income goes toward houses, cars, private schools and taxes we are going to have a huge number of very poor seniors about 25 years from now.

Our system allows you to spend 30% to 40% of your before tax income on housing. Our system also takes about 30% of your income in taxes. The taxes you pay locally pay for public schools but many parents are sending one or two children to private school at an average cost of $1000.00 per month. The car payments average $450.00 per month.  The last consideration is being able to set aside 10% to 15% of income for savings.

Upward Mobility has a cost

For most the cost will be financial stability in their senior years. A $320,00.00 home with a $2500.00 payment will cost you $900,000.00 in mortgage payments. $2500.00 monthly payments into your savings over thirty years at 6% earns you $2,600,000.00 which will totally secure your retirement. So the house is costing much more than money.

The same is true for cars and expensive private school educations. Making these purchases before setting up a proper savings plan is costing you. It feels so good right now to live in a great community, drive a great car, and send your kids to great schools.  You won’t feel the pain until you turn 50 and realize you have a few years to correct your financial mistakes. Of course most never do.

Everyone teaches you that the answer to this problem is simply to make more money. It’s not. With more money you will make the same errors in judgement on a larger scale. Ask anyone making $300,000.00 in 2008 who lost their job and now can’t find one.  Ask them what kind of house they bought when they were making $300,000.00 a year and ask them how hard it is the pay for it now.

Common Sense is not so Common

You can fix these financial issues pretty easily if you have courage, a goal, and the heart to follow what you know to be right. Use my plan and you can have your cake and eat it to. Use the plan that 90% of African-American professionals are using and you can eat your cake for a little while until it runs out.

Tomorrow I will give you the steps to getting on track to have the best decade of your life.

Wishing you Wealth Wellness and Wisdom

Manager of Wealth

In Life as in Theater, A Professional Production has an Understudy waiting in the Wings, Amateurs hope for the best

Yesterday I was talking with a dear friend who is starring in a wonderful stage play and is playing every night to rave reviews. In live theater, every night it is a different experience for the actors and the audience. In short it’s like real life.

My usual questions were about how last night’s performance had gone and how the critics reviews were going when I learned something  interesting. Two nights ago the entire production was thrown into jeopardy because one of the main actors had overslept and the show could not go on without him to play his role. Being naive I asked, why the understudy couldn’t take his place. I learned that in most regional and community theater there are rarely any understudy.

Apparently one monkey can stop a show in regional theater. On broadway, in movies, even in Vegas there is always a backup plan but in everyday theater if one cast member gets sick or has an emergency it can bring the whole production to a  halt.

It seems that regional theater is run like most Americans run their family lives. Everything is ok as long as nothing major happens. If something does happen there is rarely a real well thought out plan.

The recession caught many of us without a plan. Deadly car accidents catch families unprepared everyday, when parents are suddenly taken away and no provisions are made. Deaths from cancer, heart disease, and diabetes are killing more young people in their 30s and 40s than ever before.

How many funerals have you been to in the last few years for young people? Few had a really solid plan in place to take care of their families and continue the work they had been engaged in everyday of their lives. No plans to replace income or address the expenses that come from a parent not being there. No college plan left in place. No financial legacy left for the next generation.

There were however devastated and overwhelmed survivors; there are always survivors. Devastated by the lost and overwhelmed by having to carry on life without a partner or parent.

Life is a professional production and it should be run that way. There must be back up plans, understudy, and back up dancers waiting in the wings in case the stars of the show can’t perform. If community and regional theaters want to truly prepare actors then they need to prep for what can go wrong.

You may not be wealthy but you need to have a well thought out back up plan like the wealthy.  The pain caused from not having a plan is greater on a small family. Plan for every eventuality  and you can more easily concentrate on the rest of your life.  Get advisors to educate and train  your family.

Good luck in the professional production called Life.

“Break a leg”

Lebron James’ Failure to Win the Championship is a great business lesson

In case you haven’t heard, the Miami Heat lost the NBA Finals and the Dallas Mavericks are the Champs. The Mavs winning it all is the secondary headline however. The primary story is “Lebron James Failed.”

The Mavs did everything they needed to do to secure the championship. They played hard, smart and made up for each others shortcomings; never putting themselves out of contention. In fact, if you are a real sports fan then you know that this was the closest series ever played in NBA history. 4 points decided the winner from the loser in the games leading up to last night’s victory.

Now the sports media is giving Lebron James the beat down for a season that ended in failure. I think there are a few business lessons in this season that we can all profit from.

First

The decision to go to Miami and join forces with D Wade and C. Bosh was the right decision.

Every team owner in the country does exactly what James, Wade and Bosh did last year. They try to put the best possible team on the floor to win the championship. When the owners bring players together and they get to the finals they are regarded as brilliant but when the players dare to determine their own best interest the media and fans have a problem. The feeling is these dumb jocks need to shut up and play but this is a business and these are business men. Their decision got them within two games of their stated goal. In business you will fail and fall short but you have got to be mindful of your progress. The world will laugh at you for even trying but you are getting closer every second. Don’t get caught up in your failures, they are only a distraction.

Second

Sometimes the environment beats you and sometimes you beat yourself.

If you watched the last two games of this series it was clear Miami failed itself. They simply failed to do their best.

In business, if you can acknowledge that you could have done more and figure out what else you could have done, you give yourself a chance to succeed next time.

Third

Hate is terrible fuel and will often clog your engine at the worst possible time.

Since the 1990′s many athletes and entertainers have said they used peoples’ hate as their motivation. The outcomes are always bad. Think Puffy(death of Biggie), Kanye (total public mental break down), and now Lebron. The reason hate is a bad fuel is that it will get you through many obstacles but when it gets really tough you start thinking about your enemies. You get embarrassed and you start thinking about failing at the worst possible moment. I saw James play the first three series and he was thinking about winning, in the last two games  he was thinking about losing. It was all over his body language.

The mind can only hold one thought at a time, in business you can not allow that thought to be the voice of your competitors or detractors. That voice must be positive and affirming.

Lebron James is on the right track to accomplish his dreams and he is on the right team to make it happen. He just needs to work on his mental game because he came really close and I have no doubt he will get there.

What about you? Have you made the right decisions and surrounded yourself with the best people? Is it your environment or your actions that are keeping you from your goal? Are you fueling your mission with the positive energy of your supporters or the hate of your detractors?

Make the mental adjustments and go win your championship!

Mark Fuller

Manager of Wealth

Reasons to mind your Parents’ Financial Business

The old saying goes “Once an adult, twice a child”. If you are blessed you will one day know what this saying really means. Either because your parents will get old and need you to care for them; or you will get old and need your children to care for you. If you are blessed and lucky both will happen. Regardless, you should not wait to have conversations about money and how things should be handled until it is too late and someone has lost the mental of physical ability to have a direct conversation. I was reminded of this yesterday on Mother’s Day while visiting my parents.  We had a brief conversation about a matter they needed my help with. It is unique a situation for parents and children to have open conversations about finances.

There are many reasons your parents need you minding their financial business but I’m going to talk about four very quickly.

1.Things get more expensive in the future

You can be debt free and have your house paid off but it will not stop the cost of bread, eggs and gas from going up in the future. Gas was $1.16 in 1990. Everyday people who live in paid off homes and are debt free are struggling with $4.00 gas and $4,000.00 property taxes.  As a family you must sit down with an adviser and talk about how to prepare for the future. Parents are not prepared for $8.00 gas and $12,000.00 property taxes, but those things will happening anyway.

2. If you get sick and need government help the government expects to take your assets down to your last $2,000.00 before they will help you. This is avoided ONLY by proper planning.

Hopefully your parents and older relatives will live a long time. Of course, living  a long time means possibly being ill from time to time. This is a fact of life and so there is a safety net called Medicare. Medicare is a good safety net for a lot of Americans who can’t afford medical care. Here is what you don’t know about Medicare.If you get sick and need medicare to help you they will take up to your last $2000.00 in assets before they will pay a dime. In addition, they will do a five year look back into your finances and if you transferred assets out of your name to other people in that time they want that money too!

There are lots of people who are not rich but they are not poor either. Getting sick even once can and does wipe out a life savings. Chemo is expensive, hip replacement is expensive, rehabilitation is expensive, nursing homes are $5,000.00 per month and up.

Losing everything can be totally prevented by getting paperwork in order and making sure assets are titled properly.

 3. Today’s financial instruments are complicated.

Do you know what a reverse mortgage is and how it works?  Do you really know or do you know what you have heard?  In almost 2 decades of talking to people about money few take the time to learn about options until they are in trouble. The wealthy use instruments like reverse mortgages, insurance , and annuities while the middle class and poor use IRAs, mutual funds, and live in paid off homes. You need to understand the reasons for this. Your family needs to protect everything your parents have worked for.

 

 4. Well advised families take advantage of the fact that nobody lives forever. Many middle class families with a great advising created generational wealth from this absolute certainty.

Only two things in life are certain, death and taxes.  GE found a way around the tax issue but no one lives forever. Every person in your family could use their mortality to generate 1 to 2 million dollars for the family trust fund. If the principal of that fund was not touched,  the interest of that fund could pay future generations. How well off would your family be in two generations?

People always talk about the trust fund babies but a lot of trust funds are no more than simple insurance policies and annuities. A family had the foresight to set this up a generation before. Parents think all they have to leave their children is a house. Most children sell their parents’ homes. That money might have bought the parents an even larger insurance policy or allowed them to generate and even greater nest egg.

These conversations need to happen because the law of unintended consequences is lurking in the shadows.  So many missed opportunities because of poor planning. Some think they are so well off there is no need to plan further ; others don’t think they have enough assets to warrant a plan. Both are wrong.

 Mind your parents business and watch your own financial IQ grow.

Mark Fuller

Manager of  Wealth

Calculating the Value of a Life in Financial Terms

Responsible people should do an analysis of what their life is worth in financial terms. I’m not talking about net worth which is you assets minus your debts. That is totally another discussion. For the sake of this discussion let’s calculate the value of your life the way an attorney would if you had been accidentally killed and someone was at fault.

An attorney is going to look at your age of death and how many years you could have been expected to work until retirement. You are 40 years of age and expected to work until age 65. Now multiply that number by your current salary, $65,000.00.  Normally they are also going to add something in for inflation but we will leave that out for now.

Life valuation by income = (years until retirement) * (current income)

By this calculation (25yrs * $65,000.00) = $1,625,000.00 is where an attorney would start the lawsuit against the responsible party. In a court your life is worth at least$1,625,000.00 but people are walking around with little to no insurance to protect their incomes.  Who is left bear the financial pain and loss of $65,000.00 a year, in addition to the emotional loss?  Your spouse and your kids, that’s who!

Please don’t tell me you have insurance on your job that you don’t plan to have the rest of your life. This is big mistake. People change jobs every three years on average in the United States. Change jobs or get fired and your family’s protection goes way. You need to own your family’s protection. The older you get the harder it is to qualify and the more expensive the cost of insurance. Get a permanent plan while you are young.

Don’t tell me money is the issue because money isn’t the issue when it comes to the house you live in, the car you drive, or the school your kids go to. It isn’t an issue when it comes to the clothing you wear or the lifestyle you live.  You just don’t know how little it really cost to properly protect your income for your family.

Even those with insurance walk around with too little to meet the family’s needs and the wrong type of policy. That’s tomorrow’s lesson.

For today make up your mind that you are going to find out how best to protect your income and your spouse’s income if you have one. Protecting your income for your family is smart and practical and not doing so in negligent or your part.

I’m going to refer you to the smartest guy I know in the world of finance to help you figure out how to put together an affordable plan to really cover your family. The way you know you have the right plan is that it works weather you live to 100, get disabled and can’t work, or die tomorrow, you and your family still have your income and the security it provided.

Call Tony Brayboy of Matrix Wealth Management LLC and talk to him about your family’s needs and how to replace your household income between now and retirement. Tell him I sent you and get an hour consultation free of charge (normally $250.00 an hour).

Don’t leave your families security to chance,

Mark Fuller

Manager of Wealth

Wealth Wellness Wisdom

General Public should back NFL Players and Retirees, Period

The general public seems to look at the dispute between NFL owners and NFL players as an argument between two greedy parties that have no right to complain about the their life. The perception is that these are a bunch of wealthy owners vs. hundreds of wealthy athletes that have played or do play a kids’ game for millions of dollars. Listening to the general discourse you would believe that this was a meeting of equal parties but in fact it is far from that. In my opinion there are three huge factors the public needs to consider before making a judgment about this dispute. If the average American weighs these factors they will come down on the side of the players.

Fact 1 – You Think Everybody who ever played Football is Rich Factor

The vast majority of past and future players in the National Football League will play less the four seasons and never be paid a million dollar salary. So often I hear people saying,” they make all this money and they have the nerve to complain!” The facts are whatever the salary, 80% will make it for about 3 years and then they are back out in the regular work world with the rest of us.

“Imagined Contract Envy” is the biggest problem facing the players because when you say football player people think of Ray Lewis not the 40 guys on the Ravens team you can’t even name. If they went to USA Today and looked up their favorite teams salaries they would see that there are fewer than 10 guys on the team making a seven figure salary. The rest are risking certain life time injury for much less. People also feel like if you ever played in the league you are rich for life. The fact is that 75% of former players of all races and nationalities are bankrupt five years out of the league.

Fact 2 The Earl Campbell Factor

Most people who play this game will need lifetime medical care because they have broken bones and trauma from the game. Imagine having a job for three years and being in pain everyday for the rest of your life and needing medical care. The league has done a poor job, and the owners left to their own devices have done next to nothing to take care of all the legends you grew up watching. From brain trauma to bad knees like legend Earl Campbell has, the owners’ record is horrible. And they fight every disability claim that a former player makes no matter how many championship rings that player helped to earn for the team. Players have to act now to protect themselves because the owners have shown for decades a callous disregard for the players’ health and well being after they leave the field of play.

Fact 3 The Flashly Black Male Factor  

Race plays a big part in how people see this issue. The image of the players is they are all a bunch of flashy young Black males and the owners are all a bunch of hard working white male American business owners who gave these inner city youth a chance to make some incredible money. Don’t believe me?  Close your eyes and think NFL Player. Now, close your eyes and think NFL owner.

Well, the truth is there are more young black males in the league now but this dispute affects all your older white heroes too. This is about Bert Jones, John Elway, Dan Fouts and Deion Sanders. It is about all those white guys that played on your favorite teams in the 60s and 70s when whites dominated the league. It is those guys that need medical care badly. Guys who never made big money even during their playing time and are broke and in need of care from the empires they helped to build. If it helps you understand how serious the situation is think of Broadway Joe instead of T Sizzle.

Lastly this is a struggle between guys who are lucky to play a few good years and owners who own the teams forever. The NFL Players and the retirees have a lot more at stake than do the owners. The players have to look down the road and assume the league will try to do what it has always done. The owners always deny, deny, deny when it comes to the former players. There are 66 players on a team at a time. 56 of them you will never know their names and they are the main beneficiaries of this fight for fairness. Remember that when you think about this conflict.

This is an important labor fight by American laborers; don’t let contract envy, racial bias, or perceived wealth, color your decision to support the guys who risk their lives to keep us entertained.