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Sunday, January 30, 2011

King of ALL Virgins

"I believe in myself. I believe in the hands that work, in the brains that think, and in the hearts that love." - Richard Branson

Richard Branson, the king of all Virgins. The brilliant entrepreneur behind Virgin United, Virgin Atlantic, Virgin Mobile, Virgin Brides, and many many more! Although admirable what he's done with his commercial Virgin empire, more impressive is what he's done with his non-profit arm - Virgin Unite. I'm lucky to have had the opportunity to see him speak recently. This man is incredibly humble despite all he's achieved. The quote above is one of my favorite quotes by Branson...but when asked about it he couldn't remember that he actually made the quote. Branson also jokingly said he was probably stoned when he came up with that quote.

The premise of Branson's visit to Orange County, CA was to discuss peace and his non-profit arm of Virgin. Their mission?

"We unite people to tackle tough social and environmental problems with an entrepreneurial approach. Our aim is to help revolutionise the way businesses and the social sector work together – driving business as a force for good. This is based on the belief that this is the only way we can address the scale and urgency of the challenges facing the world today. Virgin Unite also works on behalf of vulnerable young people across the globe."

Virgin Unite attempts to tackle tough problems/topics such as AIDS, carbon emissions, and creating a sustainable economy for impoverished nations. Virgin Unite also tackles other less publicized social issues.

I had a chance to ask Branson about Virgin Unite and how Virgin Unite dealt with the evolution of philanthropy across different cultures. Branson's answer was that they only went where their lines of businesses operated. Once they determine a need, they partnered up with local organizations to ensure the philanthropic acts are a cultural fit.

It's hard to describe the vibe Richard Branson gives off, but he is definitely a revolutionary thinker and makes you want to "do good." So the call to action this week is to think about how you can make a difference in someone's life. How are your actions bettering the world? Step by step we can be better neighbors(globally and domestically)and create a better world to live in.

Sunday, January 16, 2011

Goal Setting

The reason most people never reach their goals is that they don't define them, or ever seriously consider them as believable or achievable. Winners can tell you where they are going, what they plan to do along the way, and who will be sharing the adventure with them. - Denis Watley

It's that time of the year again. It's time to lose all that weight gained from the holidays, it's time to do this and it's time to do that. There's plenty to do, but it seems like everything you're doing is getting you NOWHERE. We all have that feeling of treading water and accomplishing nothing, but feeling tired and weary at the end. Why is that? Seldom few ever define their goals much less put them down on paper. People are whimsical, paper is not. Writing your goal down on paper allows you to benchmark your progress versus your goals. Writing your goals down allows you to focus on how to get there instead of coming up with excuses as to why you didn't succeed. Goal setting helps you avoid getting sidetracked with all the little projects that you think you want to do, but that really take you away from what you REALLY want to do. This person sounds familiar...oh wait, it's me. At the end of the day, we can all identify with this person.

I recently came across the results of a study sponsored by the Ford Foundation that claimed:

- 23 percent of the population has no idea what they want from life, and as a result, they do not have much.

- 67 percent of the population has a general idea of what they want, but they do not have any plans for how to get it.

- Only 10 percent of the population has specific, well-defined goals, but even then, seven out of the ten of those people reach their goals only half the time.

- The top 3 percent, however, achieved their goals 89 percent of the time.

Amazing huh? 90% have no idea what they want from life or have plans to achieve any goals they may have.

I decided to take the dive to define and write down my goals. How did I go about doing this? I sat there with a bottle of Jack and did a little soul-searching...Joking aside this is a soul-scouring process. Here are a few steps to start your own goal setting session.
  1. Make sure you're alone
  2. Be brutally honest with yourself and your goals - No BS
  3. Break it down into a few sections (1 year goal, short term goal, mid term goal, long term goal, and finally life time goal)
  4. For each of the sections stated in section 3) make sure you break it down to each segment of your life (Educational goals, monetary goals, work goals, personal development, spiritual development...etc)
  5. Find pictures on the internet and create a collage of images that resonate with your comprehensive life plan
  6. Create an excel spreadsheet with all the hours of the day you're awake and fill in what you're going to be doing every hour and make it a regular schedule
  7. Post this up on your bathroom wall - this ensures you see it on a daily basis and friends that see it will keep you accountable
Most of you that have been over to my place can attest to seeing something similar to the above. Yes, I am a freak. You should have seen it when I was applying to grad school. All in all I was applying to 12 schools - my bathroom wall was completely covered with timelines and question prompts. Lately though, I've fallen off the goal setting and tracking thing.

One of my major goals for this year is to exercise 5 days a week for at least an hour at a time. After my surgery last year I never really recovered physically. Now that I'm fully healed up, I've made it my goal to get back on track and exercise like I used to. There. Out in the open, so now I have to really hold myself accountable to it. Good luck with your goal setting!

If there is a topic you're interested about and would like me to blog about, let me know! Until then, have a great week.

Monday, January 10, 2011

Retirement Accounts (IRA's, 401k's...etc)

I recently had someone ask me about retirement. Retirement is a pretty broad topic to touch on. I may make this multiple posts over time, but for now I'll touch on the most common facet of retirement. Most people working corporate jobs have access to a 401k, SEP or profit sharing plan. For others its access to an IRA.

Thats a whole lot of acronyms and numbers. Lets define 2 of them and discuss them.
  1. 401k - name is derived from internal revenue code 26 U.S.C 401(k)
  2. IRA - Individual Retirement Account
What is the purpose of an IRA or 401k?

The purpose of an IRA or a 401k is to allow for you to save for retirement tax deferred. Also, you can invest in stocks and bonds...etc.

What is the benefit to saving money into a "retirement account" versus a savings account or a standard brokerage account?

Saving money into a retirement account allows you to (1) possibly decrease your taxes (2) defer taxes on the growth of your money.

Can you give me an example of what you mean?

For example, if you make $50,000/year and save/defer $3,000 in an IRA or 401k, your taxable amount that year would be $47,000. This is good because it helps reduce your taxes for that year. In some cases deferring money can actually keep you at a lower tax bracket.

Ok, great I know what you're talking about, but whats the difference between a 401k and an IRA?

Fundamentally the two allow you to do similar things - save for retirement and defer your taxes on the money saved in the retirement account. The real major difference is the contribution limits and investment choices. A 401k usually has limited investment choices ranging from a few to dozens. An IRA is more flexible and you can choose the investments. 401k's by employers typically match contributions (you'll need to check your company's policy to determine how much and what the vesting period is.) IRA's do not match. Most importantly though, the limits are different. The maximum you can contribute to a 401k for 2011 and have it deducted from your gross salary is $16,500 for those under 50. For those 50 and above, you can contribute $22,000. IRA's on the other hand only allow $5,000 for those under 50, for those above 50 the limit becomes $6,000.

Other information regarding IRA's and 401k's

Keep in mind that in order to receive this benefit of deferring taxes on the contribution and the growth there has to be some "catch." The catch is that you cannot take the funds out and use it until 59.5 and after. If you take it out prior to 59.5 there usually is a 10% penalty on top of paying ordinary income tax on the funds. There are circumstances where you can take the money out prior to 59.5 such as disability, college, first time home buying, medical bills while unemployed...the list goes on.

In general, there are advantages and disadvantages to contributing to retirement accounts. One thing that might be good practice is to have 3-4 months of savings before you start to contribute significantly to your retirement accounts. Retirement savings are a great way to start to sock away for retirement, but for most people this should be the only savings you have for retirement.

Just as a disclaimer, this post is not meant to be specific investment advice. Please speak with your CPA, attorney and financial advisor regarding any legal/professional advice.