Archive for April, 2011

Invest in Yourself to Increase Your Worth

April 27, 2011 Leave a comment

It’s difficult to manage your money if you don’t have any money (or if you feel like you don’t have any money).   If you feel like you’re constantly treading water when it comes to managing your money, paying down debt and increasing your net worth, you may want to think about another aspect of money management called human capital.

Human capital is your ability to earn income and the value of that future income.  The younger you are, the larger your human capital because you have more time to work and earn money.  Developing and protecting your human capital is an important part of managing your finances.

The Wall Street Journal has a great article which discusses the importance of knowing what you are worth.  It looks beyond the standard idea of net worth (how your liabilities (e.g., mortgage, student loans, etc.) stack up against your assets (e.g., home value, retirement accounts, investments, etc.)) and discusses how your worth also means your human capital.

Building your human capital can increase your income and can increase your ability to reach your financial goals in the future.  Essentially, you are investing in you.

How Do I Cultivate My Human Capital?

Training and Education.  Is there a certification you’ve been eyeing that will increase your chances of getting promoted?  Is there a class you can take that will allow you to learn new skills?  Don’t overlook classes and trainings that will increase or diversify your skill set.  Are you interested in changing to a more lucrative career?  Take local classes during the weekends and in the evenings so that you can build skills that will allow you to become qualified to do the work you want to do.  Take on volunteer work that will make you more marketable.

Active Involvement in Your Career Development.  When I started my legal career, I went to work, got my assignments, put my head down and worked.  My academic success came from hard work so why change what works?  Because success in business is not just about who works the hardest.  Who you know, what you can offer your company and how you relate to people are all extremely important.  You could be the smartest person in the office but if people can’t relate to you, it’s unlikely that people will have your back when promotions are being discussed.  Cultivate relationships and seek out mentors.  Volunteer for new projects.  Become an expert in a new area.  All of these things will help you develop important human capital.

Network and Maintain Contacts.  You are more likely to get your foot in the door if you know someone behind the door.   Join a professional organization and meet new people.  Maintain contact with people and don’t wait until you need something to cultivate those relationships.  Make sure your relationships are a two-way street.  Offer to help people and you’ll receive help when you need it.

How Do I Protect My Human Capital?

Disability Insurance.  What happens if you become injured and can’t work?  You want to protect yourself and your family by having disability insurance.  Disability insurance will cover part of your salary when you are unable to work.  Disabilities can often have a devastating effect on your finances because not only are you not working but you are also running up medical bills to treat your injury. Protect yourself and your capital.


Free Resources in Your Community

April 12, 2011 Leave a comment

Perhaps no place in any community is so totally democratic as the town library. The only entrance requirement is interest.
– Lady Bird Johnson

Pssst…I know where you can find free resources in your own backyard.  Oh, and by the way, it’s National Library Week.  When is the last time you visited your local library to make use of its many resources?  I meet a lot of people struggling financially and they wonder where they can get cheap entertainment, learn new skills, figure out the steps for starting a business or work toward a career change.  Your local library can help with all of these things.  Many people think of libraries and envision lots of old dusty books, but libraries have so much to offer and these things are free.  You really can’t beat that.

I have a warm place in my heart for libraries.  Reading has been one of my favorite things to do since I can remember.  As a child, I would pull out a flashlight after my parents turned off the light so I could continue reading into all hours of the night.  I loved to watch Reading Rainbow on PBS.  I would watch as LeVar Burton would introduce me to new books and me and my Mom would head to the library to see which ones I could check out.  But somewhere between childhood and adulthood, I forgot about the library.  Whenever I needed a book I would visit Barnes & Noble or order books off of  When I rediscovered the library and all it has to offer, I wondered how I had been without it for so long.

Libraries are great sources of free entertainment. Reading is expensive!  I try to avoid buying hardcover books because of the price but even paperbacks can add up.  Much like coffee or cocktails, spending a couple of dollars here and there can do serious damage to your budget.  The library allows you to feed a reading habit for free.   But you don’t have to love books to get some use out of the library.  Many libraries have great DVD collections.  I’ve been able to cross recently released movies off of my Netflix list because I was able to pick them up at my local library.

Libraries are a great source of free classes and information. Libraries are continuously holding workshops, seminars and classes on finances, home buying, investments, etc.  Libraries are offering help with career guidance, resumes and job-searches.  They also provide resources to small business owners.  I went to several classes on starting a business at the New York Public Library and it allowed me to learn a great deal about being a business owner.   And I have personally taught personal finance classes at the Brooklyn Public Library.  If you feel like you’re lost when it comes to investing your money, check and see if your library offers any classes.  Even if their aren’t any classes, they will most likely have a variety of books on the subject.  If your library is offering classes and information that would be helpful to you, don’t ignore such a great resource.

Libraries are a great source of free space. Starbucks and coffee shops have become home offices for many small business owners.  But your local library is also a great place to get work done and you don’t have to feel compelled to spend $3.00 on a cup of coffee.  I’m guessing that your library has computers, free wi-fi and lots of space for you to sit quietly and work or study.  We too often think that libraries are the domain of school children and college students.  But your library may have plenty of resources for you.   You may even be able to reserve an office or conference space in your library.  I’ve reserved a room at my local library in order to meet with clients on several occasions.  It’s clean, free and quiet.

The bottom line is that libraries have many great resources that are available to the community. If you’re looking to get a lot of information at no cost, the library is a great place to start.  If you’re on a tight budget with it comes to entertainment you shouldn’t ignore your library.  And if you have a little money to spare, don’t forget to donate to your library.  Libraries are an important part of our communities and have a lot to offer to anyone who is interested.

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Protect Your Information

April 8, 2011 Leave a comment

How many emails have you received this week telling you that your email has been exposed to unauthorized parties?  At this point, at least four companies have told me that Epsilon, a company that manages customer’s emails, has had a breach that puts me at risk for spam.  Epsilon is used by a wide variety of companies so there’s a good chance that you’ve received an email informing you about the breach.

At best, spam is an annoying part of internet life that you have to put up with from time to time.  At worst, it’s an invitation to have your identity, personal information and/or money stolen.  According to Consumer Reports, in 2009, 1 million households had lost money or had accounts misused as a result of phishing (the practice of trying to obtain sensitive information through fake emails that look trustworthy).

But there are several things you can do to protect yourself.  A Consumer Reports article lists 6 tips you should follow to protect yourself.  By taking some simple steps such as safeguarding your personal information and refraining from clicking on any links in any email, you can make sure you don’t become a victim.

For more ways to protect yourself, check out this article on Yahoo! from CBS   Make sure you’re doing everything you can to keep your information and your money safe.