One of the greatest joys of writing Miller's Money Weekly and our premium publications is working with Alex Daley, Casey Research's resident technology guru, who also wears many other hats. While I can walk and chew gum, Alex can also whistle and juggle.
I've never reported to someone considerably younger than I am. What a treat! We are different in so many ways: I have a black book, he has a cell phone; my appointments are written on my big desk pad and his are programmed into his cell phone. You get the picture.
Normally, I write about some sort of investment idea every week. This week, Alex gave me a surprising challenge: "If you could give one message to your readers, what would it be and why?" He was serious.
Only one message? Well, it would be to America's youth, particularly those who are of working age, but either unemployed or underemployed. If there is one generational difference between my generation - and that of most of our readers - and theirs, it's that they bought the idea that good grades and a college degree guarantee instant success. Many now realize that's just not so and are disillusioned, seemingly waiting for the government to do something to help. They need to get moving and learn to fend for themselves without the government's help.
Alex responded with a couple of thoughts:
"This should be your last article of the year. Readers are hopefully chilling out and enjoying the holidays. It sounds like a great article, one that many parents and grandparents may want to forward to someone on their mailing list. Forget the number crunching for the week and share some of your life's experience."
Dear readers, this one is from the heart…Six Degrees of Un(der)employed
Not long ago, I proudly watched my grandson Justin roll his wheelchair down the aisle to receive his college degree. I sat and listened to several speakers tell the graduates that "the world is your oyster" and to "go forth and make a difference." Their unspoken message was that the hard part was over, they made it through college, and - to borrow the old Army recruiting slogan - now they could "be all that they can be."
As a parent, I believe our primary responsibility is to teach our children how to survive on this planet. If we can teach them to thrive, even better. As I saw Justin hitting the books over the years, I thought to myself, "How well is his education preparing him to survive and thrive?" I had my doubts.
In the October 19, 2012 edition of S&A Digest, Porter Stansberry published a letter from the son of a subscriber.
It was in response to an article Porter had written, with some solid advice for young people today. The bulk of the young man's letter outlined his budget and said that it's impossible for young people to accumulate even a modest amount of investment capital. He went on to justify his personal career choice, pointing out that people with a technical degree might be earning more money. Then he chose to ridicule Porter's credibility:
"And from what I got out of that guy, he said that college degrees are worthless and that he had a former sales job - so that says a lot about the integrity of his character, there. He is a salesman, and guys with that type of mentality will sell anyone down the river to make a buck and aren't ashamed at their own lack of integrity or self-image to obtain what they want."
As a person who has trained literally thousands of professional sales people throughout my career, and had many young folks come to me for advice, I wanted to weigh in. Here are my thoughts on how young people can get ahead in today's world, using two real-life examples.Joe, My Real American Hero
At one time in my life, I was fortunate enough to have a very interesting mentor named Joe. He was in his early thirties, with a track record the envy of men twice his age. When he was in high school, he got a part-time job at a corrugated-box plant. It was owned by a large chain with production facilities all over the country.
Joe started by sweeping floors after school. He was a likable young man sweeping floors in a heavily unionized shop, being paid by the hour. His general manager was named Rico, the son of an Italian immigrant.
Rico had a typical office for the time: a private door and large window so he could observe the production floor. Joe finished his sweeping and asked Rico if he wanted him to wash all the finger marks off his office windows. It wasn't long before Joe was responsible for the floors, office windows, and many other special tasks that Rico assigned him.
When Joe got out of high school, he enrolled in a local junior college as a part-time student. Rico had used him for several fill-in jobs when they were behind schedule on production, so he was familiar with the plant operation. Soon he was the head of a small department running their smallest press.
Working with union labor, Joe increased production and quality on the oldest press in the building. That did not go unnoticed. Joe continued to take on more responsibility, and at the age of 21 he was promoted to assistant shift supervisor.
Rico justified the decision simply, "Look at his performance." Joe exceeded expectations on every job he was given. He knew the business was very competitive. He understood that productivity, quality, and minimum waste were the key to profitability.
One of the jobs, generally described as a "huge pain," was keeping track of time cards. The hours had to be verified, some administrative work needed to be done, and it was quite time consuming. Joe knew how much Rico hated that part of his job, so he suggested Rico teach him how to do it. In less than two months, the word was, "If you have a problem, Joe is in charge of the time cards."
Soon they decided to add a second shift to their production line. Since Joe was now the assistant production manager on the day shift, he was promoted to production manager of the night shift. Their customers were demanding, and there were many short-run, technical, and tough jobs to run. Every time one of those tough jobs came in, Joe volunteered to produce it on the night shift. Within six months, the productivity and profitability of the night shift was better than the day shift's.
Soon, Rico called Joe into his office and told him to have his replacement trained within the next month. Rico then promoted Joe to assistant plant manager of a facility employing over 200 people.
Joe was responsible for production, but he also decided to get involved with customers. He traveled with their sales team to visit some of their top customers, and soon the word was out: if a customer wanted a new box designed, he knew to call Joe. There was a good chance his team could produce it better and cheaper, which in turn would get them the order.
Their plant continued to thrive both on the production side and in the marketplace. When the US vice president of production retired, they had over 22 plant managers in the country to choose from. Rico got the job.
Who was Rico's replacement? Joe, of course. Joe was the youngest plant manager in their entire company, still well before his 30th birthday.
Joe was also a terrific mentor at a time when I needed some direction. I asked him what the key to success was. His response surprised me:
"Denny, it is so simple. I can't understand why more people don't catch on. Working hard is only part of it. The key to success is responsibility. The more you have, the more successful you will become. All you have to do is do your job and watch your boss. You will quickly find there are parts of his job he either hates or does poorly. You will know what they are; listen to what he bitches about in the lunchroom. Ask him about it, and volunteer to help. People normally won't give you responsibility. You just take the job and start doing it, and soon the responsibility is yours."
His next point was this. "Ask your boss how his performance is measured by his boss. Make those your goals as well. Find ways for him to achieve his goals and look good. The easiest way to get promoted is to get your boss promoted."
I asked Joe about college. He flatly said, "I dropped out when I became the general manager of the plant. I had more important things to do."
Many young folks may dismiss these lessons because they happened 50 years ago. They may say you can't do those things today. I disagree. I think it's easier today than it was in Joe's generation. Here's how to start.
Go to your personal trophy case and throw out all the awards you got for "participation." Participating in life does not pay well, probably not nearly well enough to pay off your student loans. Second, forget your personal grade point average. If you have not figured it out, it does not appear on your diploma. And finally, if you think the Ricos of this world give a damn about your GPA, you are sadly mistaken.
For those who are members of the "Just enough to get by" club, I did not just suggest a free pass; quite the contrary. The lessons you should be learning are how to do your best and thrive in a competitive environment.
Take a look at the large number of students who drop out of a business statistics class because it's too hard or they don't want to hurt their GPA. Rico wants the guy who took on the challenge, busted his butt, and maybe got a C.
There are many occupations that require a college degree and a government license. I had several consulting engineering firms as clients that built relationships with engineering professors and regularly recruited on college campuses. Their common complaint was that the professors were always touting the engineer with the highest GPA. They didn't understand that the ideal candidate was an engineer who may have had to work his way through college with a part-time job, made time for student activities, and still found a way to do a good job in the classroom.
Once you have thrown away all your participation medals, what is left? Hopefully you have several that say first place, second place, and third place. It makes no difference if those awards were for athletics, band competition, or the debate team. Those are the important ones.
Life is a competition, and if you want to be successful, you have to achieve, not merely participate. Un-learn all the "fairness" garbage educators tried to force into your brain. The good news is, most of your peer group believes that stuff too.
When Joe started, his competition was WWII and Korean War veterans, and they knew the game. He believed in treating people fairly, but to succeed in business, you must be better than your competition. Understand it, accept it, and get to work.Ray Was No "Norma Rae"
I started my career as an accountant for a nationwide distributor of industrial chemicals. Yes, a clerical job. My boss was named Ray, and he was the vice president of the largest region in the company.
One of my early responsibilities was payroll for both hourly and salaried employees, including Ray. I knew how much money everyone made. We would prepare the payroll checks, and I would sign them and then take them to Ray as they required two signatures.
I quickly discovered that one of the salespeople in the Peoria branch was very well paid, a huge amount by my standards, and even more than his direct branch manager. I recall someone in our department commented in a venomous tone: "No SALESMAN should make that kind of money. That's not fair!"
When I took a stack of checks into Ray's office, I asked him how it was possible for a salesman to actually make more money than his boss. It turned into one of those treasured conversations that affected the rest of my life.
His first comment was, "I wish we could find a hundred more like him. I would love to pay every one of our salespeople that kind of money."
I was dumbfounded. Ray went on to explain that the salespeople were paid commission based on their gross profit contribution to their branch. The particular salesman in question had started in a small territory, worked hard, and now he was responsible for over one-third of the entire branch's gross profit, even though they employed five salespeople.
Ray then said, "Don't fret over what we pay him; look at the money he's bringing in for the company. If we had a hundred more as good as he is, imagine how much money our company would make."
I thought for a minute and asked, "If we paid him 75% of what he currently is making, do you think he would quit his job?" Ray showed a great deal of patience as he explained that this was a very competitive business. If we didn't pay him that kind of money, our competition would quickly hire him away, and he would take most of his good customers with him. He also pointed out that we really do not determine how much money he makes; like all the salespeople on the team, he determined his own earnings by how much he sold.
By then it was now well past 5:00 PM, and the clerical staff had gone home. I had to wait around until Ray finished signing all the payroll checks. He liked to chat in those relaxed, after-hours moments when the machines were turned off and the phones stopped ringing. Somehow he sensed what I was thinking: These salespeople were all making a whole lot more than the accounting people.
He continued to say:
"Denny, sales is the fairest profession in the world. It makes no difference how much education you have, what your ethnic background is, or where you are from. It pays on one thing, results. If you get the job done, you get paid. The better you do your job, the more money you make."
Ray added that they'd offered the salesman in question a promotion, but he'd turned it down. He loved what he was doing and did not want a pay cut.
Then Ray pulled out an article from a business magazine. It was about a survey of the top 500 US corporations showing that 62% of the top management had, at one point in their career, some real sales and marketing experience. I asked Ray why he thought that number was so high.
He said that many people don't realize just how competitive business works in a free market. Competition is stiff. There are always competitors trying to improve their products, or their production methods to lower their cost. They want to take away your customers. Understanding how to thrive in a competitive marketplace is mandatory if you want your business to survive. That cannot be taught in a classroom; you have to experience it in the marketplace, and salespeople have a front-row seat.
Ray said that you could make more money quickly in sales than in any other part of the business. If you wanted to move up the corporate ladder, a successful track record was a huge plus. He didn't want to hurt my feelings, but he could hire good accountants anytime. They were a dime a dozen. Finding a good salesperson was a much bigger challenge, and you had to pay them well to keep them.
Within a month, the job of credit manager opened up, and I jumped at it. I wanted to learn what it was like to visit customers and see how our products were used. Not long after that, I abandoned accounting altogether and jumped into sales. I never looked back.The Man with the Broom Will Be Your Boss One Day
Not too many years later, I ended up in the sales training business. That became my career for the next 35 years. I trained thousands of professional salespeople all over the world, serving over 40 of the top 500 US corporations.
The perception of the sales profession expressed by the young man who wrote Porter is a product of the university environment. Tell your counselor you want to graduate and go into sales. The typical response is, "You want to go into sales and waste your education?" They have little understanding of how business works in the real world. When I read the venomous tone in the young man's remarks, I honestly felt sorry for him.
Salespeople fall into two different categories, industrial sales and consumer sales. Industrial salespeople have a limited number of customers and must continue to sell their goods and services regularly. Repeat business is the name of the game. Integrity is critical to their success; without it, you're out of the game quickly.
The same holds true for salespeople in the consumer marketplace. For a salesperson to make a lot of money in that competitive arena, they must rely on referrals. Ripping off customers makes for a short career.
To piggyback on Ray's lessons, sales is the best way I know to truly learn about business. It is the fairest profession out there. The more you sell, the more valuable you are to your employer. And you're paid accordingly.
If a young person were to ask me about choosing a college major, I would tell him to get a technical degree. That's your entry ticket. But remember, engineers, like accountants, are a dime a dozen. While you may start out with a job and a decent salary, look at the salary for an engineer with ten years' experience who's still doing technical work. It's not that much different.
During my career, I had many top-name consulting engineering firms as clients. The top-paid engineers were the ones who learned how to sell and interact with clients. Oh, they had titles like "Business Development Manager," but don't let that fool you. They were in sales and made a darn good living. They brought in revenue-creating jobs and then passed off the technical work to the young engineers in the back room.
A good engineer who can work with clients can keep dozens, if not hundreds of other engineers employed. Revenue generators do not get laid off.
I was fortunate as a young man to have Joe and Ray come along at critical junctions in my life. They taught me lessons I never could have learned in college.
If you are a recent graduate and are un(der)employed, here is your challenge. Particularly here in Florida, seniors go out to dinner several nights per week. A good number of the folks waiting on tables are recent college graduates who grabbed what they thought was the only job they could find.
One young man told me the industry he wanted to work in and mentioned he was hoping a job in his field would become available soon. There is a local company in his chosen industry, and I asked him if they had any job openings of any type. He said, "Oh yeah, but I don't want them. They pay less than waiting tables."
I felt my wife kicking me under the table, warning me not to come unglued. I wanted to ask him several questions. Why was he screwing around waiting tables? Did he want to wait until he was 30 before starting his career? What made him think that there weren't 200-300 other folks waiting tables looking for that very job?
Let me be blunt. The job market is based on the law of supply and demand. If there were a great demand for jobs in your educational field, you would already have one. There is an oversupply of candidates, and demand is low. Waiting for things to "open up" is dangerously shortsighted. You may be well into your 30s before demand in your field opens back up.
How long do you want to hang out waiting tables? Unless you want to make your career in the restaurant business, you are wasting your time.
What the young man failed to understand was that if he got a job - any job - at the local company he wanted to work for, he could do two things. First, do a damn good job of whatever he was hired to do. Second, make it known to the personnel department that he really would like to earn a shot at a job in his field and that he'd like to be considered when it became available.
If you're waiting for your dream job to appear in the "Wanted" ads, you're going to be waiting a very long time. That job won't be on Craigslist either; the guy sweeping the floors or handing out the mail beat you to it.
There are differences between a job and a career. One of them is commitment. Find an industry you think you will love, one you can see yourself enjoying for the next several years. Then do whatever it takes to get a job in that field, even if it's sweeping the floors like Joe. Sure, you want to get along with people, but dare to be different. Follow the advice Joe gave me years ago; those principles still work today.
I want to address a sales career in particular. It's difficult to find a sales job because they want to hire someone experienced. How can you get it? Shoot for an inside sales job where you talk to customers and take orders. Get to know the customers and their needs. Learn your company's products and how your customers use them.
Most salespeople get their first big break by being promoted from within to the outside sales territories. Learn the business and work with your customers. Then, as Ray told me, "Make yourself so damn valuable, they have to pay you well to keep you."
When you look at the current Fortune 500 list of wealthy people, a surprising number are quite young, including a certain young "hoodie" wearing gentleman who started Facebook. I can guarantee you, none of these folks waited around for things to open up. They had more important things to do.Talkin' About My Generation
Now that I've said my piece, I'll briefly turn my attention back to you, my peers. Our sons, daughters, and grandchildren face a tough reality in the modern workforce - one in stark contrast to the convoluted ideology of the modern educational institution. An entire generation seems to believe that if you just check off all the right boxes, careers, promotions, and money will magically appear. We know that's simply not true. Success is hard earned.
A similar myth has pervaded our own generation: The idea that if you put in your dues, the government will uphold its end of the bargain, providing a decent base for retirement through Social Security and Medicare. Well, that's simply not true either.
I covered a lot of this in a recent article. All you have to do is look at the one graph on Social Security to confirm what we all know. Our retirement health is in our hands, and most of the basic assumptions about investing have been upended. I'm where you are, but now I have backup - a topnotch research team - that I'd like to share with you.
Our mission is to build a great Money Forever portfolio, conservative but ambitious enough to help us live out a happy, well-funded retirement.
At Money Forever, I try to explain things just as I would to a friend over the kitchen table. Many folks have accumulated a good nest egg but don't have the financial background to confidently manage it. That's where we come in.
Here are some of the topics we have already broken down in plain English for our subscribers:
- Building a steady and safe income stream from stable, dividend-paying stocks, inflation-protected bond funds and passive real estate investments.
- What you need to know before you even consider annuities, reverse mortgages, or other alternatives.
- Where investments like gold, silver, or TIPS really fit in your savings and retirement.
We're adding to that library every month with updated information, new strategies, and the best investments for building a lifetime portfolio, hand selected by our seasoned team of analysts.
Just as it's time for the youth of America to buckle down, learn a business and build a career, we need to ask ourselves whether we've really given retirement planning the careful attention it deserves.
So many of my fellow retired friends avoid the most basic planning or education by trusting their "guy" to take care of it, only to get blindsided later. Working together with the team at Casey Research, we've developed an indispensable guide to readying your finances for the future. In the spirit of the holidays, you can start building your lifetime portfolio for just $99, half off the normal price.
I encourage you to take my service for a test drive. Take three full months to look over all the materials in our growing library. After that, if you aren't satisfied, I'll give you back every last penny. So far our renewal rates have been outstanding; we aim to keep it that way.
Just call us, or even hit reply and send us an email, and we'll immediately issue you a full refund. I stand by the work we do, and I wouldn't have it any other way. So, go ahead and give it a try today.
Even if you don't take me up on my offer, I hope you'll forward this message on to a few friends or family members who could maybe use a little push in the right direction. It could be just the present they need.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.