Tuesday, March 30, 2010

2) The Maiden and the Tax Collector

Once upon a time, there was a Fair Maiden.

            One day, a Tax Collector, Sam, came aknocking on her door.  The Fair Maiden kept the chain on the door when she peered through the crack to greet Sam.  Sam told her that he was her uncle, and that she must pay taxes.

         The Fair Maiden apologized, and asked him if she could have more time to pay her taxes.  Sam grimaced but consented, and told her that she had 40 days to do so.  The Maiden was a little nervous because she had heard news, and stories from friends, about big bad wolves coming to the door and threatening to huff and puff and blow their houses down if they did not pay their taxes.  But she took Sam at his word.

The Maiden quickly set about making a list and organizing herself so that she could figure out how much tax she must pay.  She knew that a Judge of the Land had said that there were rules, but that no one must pay more than their fair share.

First, the Maiden called her Trusted Family Advisor.  He gave her a list of the basic items that she should organize.  He told her that afterward, he would help her do the rest.

So the Fair Maiden set about her chores.

First, she made a list of her income.  It was somewhat easy since almost everyone who paid her had given her a note of how much.  Not only had she earned income from work, but she also had saved a little, so she earned interest on her savings.  She had also invested in a friend’s bakeshop in town.  The bakery was turning a tidy profit, and yielded her a nice little dividend.  Finally, she sold a pig for a profit and she listed it, too.  She had once overheard a fat merchant in town doing such a thing - albeit on a much grander scale, a capital gain.  She knew that she invested her ‘capital’ in the pig and concluded that her capital had gained value.  She was very proud of herself for both understanding the concept and for having made a profit!

Next, she set about making a list of the money she spent on the things that the people of her land valued most: health, a home, helping others with losses - like if her house burned or she was robbed -, charity, some of the money she spent for her work, and money she spent on paying others to help her with her money, and figuring out how much tax she must pay!  She also made a list of the taxes that she had to pay other tax collectors, because she knew that if she told Sam, he would have to allow her to deduct some it from what she must pay him!

She thought, “I think I’m ready.  I must call my Trusted Family Advisor and tell him that I am ready to meet for the next step.”  And she did.

Her Trusted Family Advisor came to visit at the appointed time, bringing his abacus, a small chalkboard and his very fine timepiece.  She served him tea and cakes from the bakery and they sat to review her efforts.

“Very fine organizing”, he smiled and said.  Then they talked about each item and some more.  The Maiden learned a lot; she asked many questions.  Her Trusted Family Advisor, patiently explained all of the answers, even the ones that she thought were ignorant and was scared to ask.  When they each had answered all of the other’s questions, the Trusted Family Advisor took her work with him to do some calculations - but not before she wrapped a few more of the fine baked goods from the bakery.

A few days later, her Trusted Family Advisor, again, called upon her with a few more questions.  A few days after that, he returned triumphantly, and told her how much tax he calculated she must pay.  She thanked him profusely, and paid him a fee for such a fine job.

She was so excited and so proud that she told closest friends, and they all wanted to meet him.

Soon, Sam came aknocking on her door again.  She was very confident about opening the door wide, announcing what amount of tax she owed and then dropping the coins into his open hand.  He just watched.  And then he smiled.  He said not a word, and just turned around and walked away.

After some three years went by, she had never again heard from Sam, the Tax collector, so she knew she never would.  And she lived happily ever after!

Thursday, March 25, 2010

1) ...In the Beginning


 have diverse interests and a handful of favorite things in this life: food, exercise, sex, travel, the beach, my 10-speed bike, my ‘78 Firebird, my Adidas Superstars, my Seiko chronograph, business & money, intellectual, cultural & spiritual pursuits, Star Trek, women, and my friends & family - not necessarily in this order.

I believe in honor, integrity, and balancing ‘doing’ with ‘being’.  I also believe that, while on this Earth, we have certain priorities in which we must involve ourselves; priorities that may not be important if there are other Universes or an afterlife.  These assets must be employed, and skills honed, to survive.  To thrive, we must learn to integrate and balance them: body-mind & spirit.

I founded Simons Financial Network in 1981 to change the world one client at a time.

In spite of having studied business at New York University, and enjoying a fast-track career in health & fitness, it began to look like I wasn’t going to get to start my nationwide chain of health clubs.  So I created a financial services boutique.

I, the ‘Trusted Family Advisor’, offered ‘one-stop shopping’ that included basic offerings such as financial planning, investments, insurance and tax preparation, but later added specialties such as Divorce Financial Planning (I helped found the Association of Divorce Financial Planners) and Credit Rehabilitation (where I taught the topic at New York’s Learning Annex for 12 years) and my flagship Personal Business Management service where I became the personal CFO for executives, professionals and people in the arts (I came from a show business family).

However, later I was struggling and no longer enjoying the daily grind.  My marketing consultant asked me ‘why not do something you enjoy, not just something that earns money?’  I thought, ‘how smart was that?!’

I knew that I, basically, liked what I was doing but I was ‘lost in the forest’.  We analyzed my practice, and what we came up with was amazing!  I made two lists: one of my most profitable clients and one of my favorite clients.  We compared the lists to see who was on both; they were all women!  He looked at me and said, “Eric, you’ve been doing this by accident, it’s time to do it on purpose”.

I’ve never looked back.  That’s the way the Universe is.

            Women have critical needs and special interests as their earning power grows and familial relationships change.  Financial professionals and the media seldom adequately address these issues.

            When it comes to money, women have different skills, attitudes, and strengths than do men.

Historically, women went from ‘Daddy’s house’ to ‘Husband’s house’ and en route seldom felt confident about money.  They were given a household allowance to manage but seldom dealt with investments, taxes and estate planning.  Yet they were expert at creating budgets, saving, and prioritizing; skills many men disregard.

 Men often act empowered about money, a great leadership skill - and in fact, they may be great earners.  But earning money and managing money are two different things.

Many men suffer from ‘a little knowledge is a dangerous thing’, thereby encountering what Joe Mancuso, business consultant, coins as ‘Ready, FIRE, Aim!’  They get to boast at the cocktail party about the ‘killing they made in the market’, but they don’t mention their numerous losses.  They suffer from greed and holding investments too long (i.e. lacking a disciplined ‘sell strategy’).

Conversely, women are more motivated by goals such as making sure that the rent is paid, the kids are tended, that she can periodically vacation, and that she can afford to retire versus becoming a  ‘shopping bag lady’ - still one of the most prevalent fears. 

Men often have a financial team (e.g. accountant, banker, broker, insurance agent) where women don’t.  These professionals often address most of their comments to the man (i.e. ‘the decision-maker’) and lack the patience and skill to explain concepts and details to a woman.  (Yet women control the majority of money in America even if the money isn’t in their name!) 

Today’s woman doesn’t appreciate not having important decisions explained to her; she wants to learn and then make her own decisions.

Men tend to categorize; women tend to integrate.  Money can be ego and power for a man, but is a tool for a woman.  And financial planning presumes the integration of many separate but related areas such as divorce, tax, retirement, college funding and long-term care.

I like to teach (in addition to being trained as a financial planner, I’m trained as a teacher and have taught for New York University and numerous other organizations); women like to learn - how symbiotic!

Women make plans and patiently stick to them; men often want to know how much money they made by the close of ‘market’.  Women don’t feel this need to hit ‘home runs’ versus consistently ‘hitting doubles’. (Babe Ruth was both the ‘Home Run King’ and the ‘Strike-Out King”).  Consistency wins.

Women are willing to delegate and don’t feel the need to micromanage their money.  In return, they expect a high level of service, respect, and effective communication.

Women stick to their plans, giving the plan time to work, the way seeds need time to take root and grow.  They monitor their progress and make adjustments as necessary, like watering a garden and pulling weeds. (During the ‘90’s women made more money in the stock market than did men - not due to better security selection, but due to lower trading costs since they traded less frequently!)

Women are also profitable clients as they are loyal and appreciate the economies of scale that one-stop shopping provides.

Women also send referrals since it is in their nature to openly communicate and share.

I like women.  Women and money, let’s sing: ‘…these are a two of my favorite things’.