I have.

I’m tired of it taking a week to open a brokerage account because they need to make sure I’m not a security risk. Really? You have my money transferred from an account under my name to be traded in an account under my name. How is this a security risk?

I’m tired of the TSA. I have a choice: either get sexually assaulted or have them take naked pictures of me. Never mind the invasion of my privacy or violation of my constitutional rights against unlawful search and seizure.

I’m tired of the attempts to infringe on my 2nd amendment rights (right to bear arms). All the regulations in the world won’t keep the guns away from criminals. The laws don’t prevent domestic violence. They just make it harder for law abiding citizens to defend themselves.

How about all the regulations that they put in our way when trying to do business? Are you tired of hundreds (or thousands) of rules and laws that you need to follow? How can you make sure you are compliant unless you have a “compliance department?” How much time and cost does this add, all without adding any value to your customers?

In the end, none of these things add to our security. Criminals and terrorists know how to easily circumvent the security measures. They only make our lives harder, and bit by bit we give away our rights and freedoms.

A few weeks ago Tim Coffman asked me if I would publish an article he wrote. At first I was hesitant. Most of our posts at Wealth and Wisdom are focused on self help and entrepreneurship. The more I considered, the more I realized filled in an area that I don’t spend much time on….personal finance. So I looked at his article more closely and was impressed, and even though I mastered personal finance 101 years ago, his article taught me something new.

Everyone talks about credit scores, but few of us fully understand them. While most people know it’s important to pay bills on time (and not to apply for too many cards) there is actually far more to a perfect credit score than just that. More importantly, it’s not something we can afford to remain ignorant of. The strength of your credit score influences how good of a deal you get on mortgages, car loans and – increasingly – whether you get a job or not. It also takes time to build a good credit score (or rehabilitate a poor one.)

Here are the keys to a perfect score:

The Keys At a Glance

An MSN Money article on the anatomy of a Fair Issac credit score gives a quick breakdown of the individual components of a credit score (and how much each one counts for.) That breakdown is:

• Payment history (35% of the rating)
• Length of credit history (15%)
• New credit (10%)
• Types of credit used (10%)
• Debt (30%)

The lowest possible score is 300; the highest, 850. What jumps out immediately (or should) is that your income is not a factor. “A person can have a very high income and never pay their bills,” according to Craig Watts, public affairs manager for Fair Isaac. Never forget that your credit score is a measure of your creditworthiness, not your overall financial position in life.

Payment History

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The biggest deciding factor in your credit score is your payment history. Very simply: you want to fit the profile of someone who pays their bills on time. Late payments that are reported by creditors (as virtually all of them are) go into your credit report as negative entries. Accumulate too many, and it will knock points off of your score when it is pulled by someone you are trying to borrow from.

(Credit scores, by the way, are not static, unchanging numbers. According to Fair Issac, they are re-calculated each time a prospective creditor pulls your report.)

Length of Credit History

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When it comes to your credit score, it is not just the strength of your history that matters, but how long you’ve had credit. By making this 15% of your score, the credit bureaus are essentially saying “anyone can demonstrate good credit for a few weeks or months – what we’re looking for is someone who has paid creditors promptly for a long time.” That’s why it pays to have at least one credit card that you have faithfully used and repaid for a number of years.

New Credit

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Another 10% of your score is determined by new credit. If you are the kind of person who constantly applies for and obtains new credit, this can harm your score (at least in the short-term.) It is also harmful to have excessive numbers of hard inquires into your credit report. Hard inquires are when you give lenders permission to pull your credit report. Soft inquiries, which are when you look at your own report or score, are not harmful.

Types of Credit Used

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Another important and rarely discussed factor in your credit score is diversity of credit (or how many types of credit you’ve had.) Your credit score will never be as high as it could be if you’ve only ever had a credit card, or only ever had a car loan. Rather, the credit scoring formulas like to see that you have responsibly repaid several different kinds of debt during the course of your financial life. Thus, a “perfect” score might include:

• One or more long-held, frequently-used, always paid on time credit cards
• A successfully repaid (or in the process of being repaid) auto loan
• A successfully repaid (or in the process of being repaid) mortgage
• Successfully repaid student loans
• Other types of debt

Note, of course, that you should not incur debt for no other reason than building your credit score. Do not rush to finance a car, for instance, of you had no pre-existing plans to buy a vehicle. Just keep in mind that it does help to have multiple sources of credit on your report.

Debt

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Finally (and very importantly) 30% of your credit score is how much debt you currently have. Another way to state it is: how much of your available credit are you currently using? Remember, again, the purpose of credit scores: to help creditors decide whether they should lend you money (and if so, at what interest rates.) It is a way for creditors to judge risk. Keeping this in mind, it’s no surprise that how much money you already owe makes a big difference in whether someone would want to lend you even more.

As a general rule, the less debt you currently have, the higher your credit score will be. Strive to keep credit card balances at 25% or less of their limits.

About the Author: Tim Coffman is a freelance writer for Quicken. Quicken offers a budget worksheet that makes money management easy. Quicken’s products help people get their spending under control with helpful budgeting tips.

Over the last year or two we became concerned with the real estate market in Houston. We saw that ~20% of our neighbors were in financial trouble and that we would have several foreclosures on our street.

Our desire to relocate just added fuel to the fire. If the market crashed we were screwed. There would be no way to move without taking a significant hit when selling our house, assuming that we could sell it at all!

Taking the fear out of a scary decision

Going against conventional wisdom is always scary. It didn’t help that we had spent almost a decade in our home. We had renovated it from top to bottom, and it was pretty much exactly as we wanted it. Our kids had grown up here, and there were a ton of memories.

Immediately we started second guessing ourselves. What if we are overreacting and the market recovers? Do we really want to leave our home? Heck, do we really want to have strangers invade our privacy (showing your house to prospective buyers can be invasive)? Do we want to have to deal with keeping our home showroom clean?

Coming back to the facts made the decision simple

I learned a long time ago to create a pro/con list to help make emotional decisions. This simple tool cuts out the emotion (it becomes a data point) and helps you see the best course of action. If you really want to get fancy, weight each factor based on their importance to you.

What we found was that there was minimal downside. If we were wrong, it would only cost us a few thousand dollars in closing costs and our time. If we were right, it would save us financially. It would allow us to move on a moments notice.

Actual events validated our decision

Now that it’s been several months since we sold our house, actual events have validated our decision.

• Prices in our area dropped 8% two weeks after we finalized the sale.
• Housing sales almost came to a complete stop.
• Two houses on our street are in foreclosure. Two more are likely to be foreclosed by year end. Another is on the bubble. Since our street only had 22 houses, this means that over 20% of the houses could be foreclosures.
• Unemployment is picking up.
• Our neighbors are scared and don’t know what to do.

The biggest lesson

To be successful you need to learn to question assumptions, evaluate situations, and think for yourself. The problem with most advice is that it is aimed at the huddled masses, the lemmings, at the “other 80%.” The winner thinks for himself, and while he may look crazy at times (our neighbors thought we were nuts), in the end he looks like a genius.

Looking back, 2009 has been a roller coaster

• New government which has created a ton of strife. New regulations and laws looming that will change the face of this country (I’ll leave it to you to decide if it’s for better or for worse!)
• The economy degraded even further, and any recovery we’ve seen has been limited at best.
• The budget deficit has exploded as government spending has reached record levels.
• The dollar is plummeting.
• Housing sales are slow, there is a glut of foreclosures in the system, and a new wave of foreclosures is on the horizon.

All of this change will impact our lives. We have a choice on whether we will sit back and let life push us this way and that. This will test us, and while it will be challenging, it will also present some of the best opportunities we’ve seen in decades. It is our choice whether we are full of fear or hope, see crisis or opportunity, excel or drown in the turmoil.

Wealth and Wisdom has had quite a year

OK, maybe not the blog itself, but our life has been pretty full. From vacations to job changes to business launches, we’ve had a full and eventful 2009:

• Wrote a book about hacking your college degree: This alone has been an amazing trip and we’ve learned a lot. Marketing, Adwords, copywriting, writing and editing, web site design, setting price levels, list building….You get the picture!
• My JOB: yep, I still straddle being an employee and an entrepreneur, somewhat because we are not ready to go full time, mostly because I’ve enjoyed what I’m doing. This part of my life has been an event. 2008 I was the number one salesman in my company. 2009 I was number three. Since there are between 300 and 400 salesmen…this is a big accomplishment. But it hasn’t all been positive. My company reorganized and we spent six months wondering about how our jobs would change. I said goodbye to several good friends as they took opportunities with our competition. I’ve dealt with red tape and bureaucracy that drives me crazy.
• We’ve taken three amazing vacations: one a cruise in South America, one a Mediterranean cruise, one a trip to St. Maarten. Wow!
• We’ve found internet based business to be extremely challenging and frustrating. On the surface, it should be easy. We’ve started and run several successful brick and mortar businesses. I’ve run and managed a couple businesses. I’m one of the top salesmen and an acknowledged expert in my industry. But internet marketing requires a different skill set. It’s taken a while, but we’ve pretty much finally figured it out. Now it’s time to apply what we’ve learned.
• Started exploring other business opportunities. I’m a firm believer in having multiple businesses in place, especially if you can automate / outsource them and create passive streams of income. One business didn’t work, but the basic model is fantastic. We just need to find a better product. The other model is being developed and is looking like it could be a blockbuster. Remember how I said we could chose whether to see opportunity or crisis? I chose to find solutions to a major problem and create a business.
• Wealth and Wisdom has been stagnant. Two years ago we had grand plans for Wealth and Wisdom, but we never acted on those plans. Instead it has wandered along and almost become an outlet for my thoughts and a journal of my growth as an entrepreneur.
• My racquetball game has improved and I’m close to leaping to the next level. While I’ve had some ups and downs, much of that is having to internalize strategies and skills, which cause me to think too much and not execute. Perhaps most importantly I’ve discovered that I don’t like playing in extremely competitive venues. Not because I’m not capable, but because I don’t enjoy it. I find it brings out the worst in people and that isn’t why I play.
• Our son turned 16. Need I say more?

Coming up in 2010

2010 should be an eventful and profitable year. As we bring our businesses on line, as we learn and grow, we will share it with you. This includes our view on the changes to our government and economy. Don’t worry, we aren’t going political on you, we’ll be focusing on what to do to protect yourself and find the opportunities.

We’ve also finally defined our customer (Wealth and Wisdom), figured out our niche, and what our focus needs to be. Don’t worry, you’ll still see posts ranging from personal development to education to sales to business to personal finance. Wealth and Wisdom will still be a journal of our journey to entrepreneurship, and how we used our businesses to create freedom, wealth, and life balance. It will just be better defined and on purpose.

I also am not a big fan of the traditional college experience. When you look at the cost it is hard to justify. This is both for adults going back to school and for our children. If you follow the traditional college path the costs are staggering, and the traditional college lifestyle is not what most of us are looking for. Colleges are infamous for their party lifestyles and for indoctrinating our children in belief systems that often run contrary to ours.

You gain little by going to an elite school

While studies have shown that an ivy league education will result in higher lifetime earnings alternative research disputes these findings.

Researchers Alan Krueger and Stacy Berg Dale questioned whether it was the school or the student that created the improved earnings. What they found was that it was the smarter, harder working, and better motivated students that got accepted to elite schools. When compared to similar students who chose to attend state schools there was minimal difference in earnings.

In other words, that elite education just costs you more with no gain in results (private colleges cost an average of 2.3 times the cost of state colleges).

Why you need a degree

Most of us realize the profound impact education has on our careers. In fact, this is the number one reason adults go back to college. How much of an impact does your education have on your career?

Having a Bachelor’s degree makes you three times more likely to keep your job while earning you 230% more money. Add to this the (often) better working environment and you have a pretty compelling case.

Then reality sets in

Earning your traditional college degree is expensive and hard:

• The average in state (public) degree will set you back $57,332. That comes up to $14,333 per year. Ouch!
• Time requirements: 4-5 hours per week per credit. Even if you go part time it will take up 24-30 hours per week.
• Lack of flexibility: traditional college requires you to go to class at their convenience. If you work full time this can create problems.
• The time it takes to earn your degree: traditional college (part time) will typically take you eight years to earn your degree. At that rate your be retired when…

We needed to find a better way

These were all challenges I faced as I was nearing the end of my military career. I knew I needed to earn my degree, but there was no way I could go the traditional route.

Along the way we ran into a lot of scams. I’m sure you’ve seen them – send us a check and we’ll sell you a diploma. Right…Let me see, you will sell me a PhD based on life experience…

We also ran into a lot of legitimate schools that were not friendly to adult learners. Some required you to spend time on campus (one required three weeks each summer). Others required you to take their classes which were expensive. Others just cost too much money.

It took a lot of research, and I made some mistakes, but I eventually found a way to earn my degree quicker, easier, and for much less money. As I earned a second degree – and helped my wife and friends earn their degrees – we fine tuned our process, tools, and tricks.

It wasn’t until a friend asked “how do you do it…”

Except for helping a few friends and family, we pretty much kept this to ourselves. It wasn’t that we were trying to keep it a secret, it was just that we didn’t think anyone else would be interested.

Then we started our son on our program. He was 15 and wanted to get a jump on his college. His plan was to earn his bachelors in business by the time he was 17, and then go to Texas A&M for his MBA.

Several friends saw what we were doing and started asking question. It quickly became apparent that no one was aware that there were better ways to earn your degree.

We created Education 2.0

For the last few months we’ve been putting all that we knew into a system. After two rounds of beta testing we are finally ready to role out our program.

Our goal was to make it easy to earn a four year degree:

• Accredited: you need a real degree that will be accepted by employers and colleges.
• Fast: you don’t have years to waste.  4+ years is way to long for most adults.
• Flexible: earn your degree on your own schedule working around work, family, and your personal life.
• Affordable: you should be able to earn your degree without taking out a second mortgage!
• Easy: we supply the roadmaps, tools, tricks, and techniques. All you have to do is study and earn your degree.

As a bonus to our Wealth and Wisdom readers, for the next two weeks we are offering 50% discount. Just type “wealthandwisdombonus” (without the parentheses) into the discount box at checkout!

Paul was a successful entrepreneur who was diagnosed with non-Hodgkin’s lymphoma. He turned his back on his business in order to dedicate himself to his treatment and recovery. He borrowed from savings and started charging inventory to his credit cards in order to keep the business afloat. As a result he is $270k in debt and at risk of losing both his business and his home.

Three things jumped out at me:

• He wants to do right and honor his debts: Recovery starts with taking responsibility.
• By intermingling his business and personal affairs he has put everything at risk: This is why incorporating (or forming a LLC/LLP) is critical. Once you have the structure you must keep your personal life and your business separate. If he had done this it would just be his business in jeopardy. Now he may lose everything.
• This could have been avoided by Business Overhead Expense (BOE) insurance.

What is BOE insurance?

BOE insurance is a subset of disability insurance. It pays your rent, employee salaries, and other overhead expenses while disability pays your paycheck. It basically keeps the lights on until you can get back to work.

BOE insurance is common among profesionals (doctors, dentists, lawyers, etc) but is not so well known by small businesses. It isn’t for everyone but can be a tool to protect your company if something happens to the owner.

More info

Wikipedia

Bankrate.com: When you’re ill, BOE insurance inoculates your business from harm

The CPA Journal: Disability Insurance Planning for Professionals

Financial Web:Disability Insurance for Businesses

I would typically pull my money out of the market and sock it away someplace safe. I have neither the time nor the inclination to learn to become a trader. I believe my time is better spent growing my business than trading stocks!

We can’t rely on that option this time. IndyMac’s failure is the first of the bank failures. This casts doubt on the safety of our deposits.

I can rely on FDIC…or Can I?

I’ve always known that FDIC will protect my deposits. There has always been a lingering doubt on what that means. Is the $100k protection per account, per bank, or per person? What do I have to do to get my money after the failure?

Suze Orman wrote an article today on FDIC insurance. I recommend you read it to better understand what is involved. People are losing a lot of money on their deposits at IndyMac because they didn’t take the time to learn the rules. Some of the basics are:

• One name on the account:$100,000 per person per bank. What about two accounts at the same bank? The $100k total limit still applies.
• Joint account: $200,000 per joint account. This is in addition to the $100k per individual account.
• IRAs: Your bank IRA (why would you have an IRA through a bank?) is covered up to $250,000. Note: this is only cash instruments. No stocks or mutual funds.
• Trust/Pay on Death Accounts: complicated. Check with the FDIC and your advisers.

I again recommend you read the article and check your accounts to make sure you are covered. Also remember that I am not a financial adviser or planner. Please consult your financial professionals before you make any decisions.

“Joe, you look awful.”

“Wow, is that a good way to greet a friend?” Joe asked me. “But now that you mentioned it, I haven’t been sleeping well.”

Joe then proceeded to tell me about his family situation and the stress it was causing. His brother wasn’t able to pay the rent-again-and came Joe for a loan.

“I’m getting tired of always having to bail him out. I love him, but loaning him another grand won’t solve his problem. And I’m getting tired of everyone assuming that because I run my own business I have money to loan them.” After a bitter chuckle, Joe added “I don’t know why I call it a loan. They never pay me back.”

It wasn’t the first time

Joe and I have been friends for years-heck, he gave me my start in sales! I was familiar with this drama in his family and saw it repeat several times a year. If it wasn’t his brother it was his cousin or uncle. One time their car was in the shop. Another time they were a bit short until payday.

It was like his family thought that because he was an entrepreneur he was their personal bank machine.

The straw that broke the camel’s back

This time things were different. The economic downturn was hitting Joe’s industry hard. He was struggling to keep the doors open, and the last thing he needed was this. In fact, the reason Joe and I were meeting was that I was advising him on his company’s sales and marketing.

Bottom line: he had nothing more to give.

Loaning money to your family is a lose-lose situation

When it comes to family, money, and loans you can’t win. You are a bad mother/son/brother (fill in the appropriate relationship) if you say no. It will poison your relationship even if you say yes. No matter what you do it can tear a family apart.

For entrepreneurs it can be even worse. People assume that just because you own the company that you are rich and that they are entitled. You can easily become their personal bank…or their welfare system.

With this in mind I’ve developed the following guidelines to help deal with the situation. Some sound cold and heartless, but that couldn’t be further from the truth. This is a decision that can have serious consequences. The decision must be based on facts and on what is best for everyone involved. Remember, the best answer is sometimes the one that hurts the most. People often tell me that the best thing that happened to them was that someone told them no. It forced them to grow up and solve the problem themselves.

7 Guidelines when family asks for money

1. Your not the bad guy…

You know the drill. The guilt is being applied. “Just this once…” “Don’t you love me?” You can afford it.” “Blood is thicker than water.” To make it worse other family members are calling you and asking why you won’t help.

You have done nothing wrong. They put you in a bad position, one that you often can’t win.

2. Step back and take a deep breath

The only thing that makes this so hard is that you are dealing with family. With anyone else it would be much easier. When family members ask you for money they don’t use logic. They push your buttons. This sets the stage for a major family crisis.

Now is not the time to make a decision based on feelings. You need to step away and get some space. If they push tell them you need time to think about it. If they keep pushing start asking them questions. This will put the responsibility back on their shoulders. Remember this is their problem. They are coming to you for a favor.

3. Separate emotion from fact

Now I know I’m going to get an earful about this. “It’s your mother. You owe her.” “How can you be so heartless?” “Don’t you love your family?” “Why do you hate your sister?”

Let me put that to rest right now. Decisions based on guilt rarely work out. Don’t be afraid to use decision making tools (I personally love a weighted pro/con list). Feelings and relationships are a factor, but the decision needs to stand on it’s own without the emotions to prop it up.

4. Am I helping or enabling?

This is tough because of the guilt involved. One thing to keep in mind is that often you are only making things worse by handing out money. People need to take responsibility for their own problems. In extreme cases they need to hit bottom before they can start to get better. In these cases the only way to help them is to stand firm.

Now I’m not saying you should always say no. You just need to make a clear headed logical decision that is in everyone’s best interests.

5. What are they doing to solve the problem?

Just bailing someone out won’t solve the problem. Are their expenses exceeding their income? Then they need to take steps to fix the problem. Do they have a gambling problem? Then they need to get help for the underlying addiction.

They need to take responsibility and be willing to fix their own problem. Otherwise this will come up again and again. Each time it will be a little worse.

6. You have the right to say no

Just because it is family doesn’t mean you are obligated to give them money. I hear the argument all the time that you should “honor you parents.” That doesn’t mean you are indebted to them for eternity. Yes you should respect and thank them for bringing you into this world. Just remember that this is a two way street. You deserve the same respect and appreciation as well.

Now most people have parents that gave them love and nurtured them. That is a different story. Then again, most people with loving parents aren’t put in this position.

You have to make the right decision for everyone involved. This needs to be based on facts, not some emotional tug at the heartstrings. If the right answer is no say no.

7. Always a gift never a loan

If you decide giving is the right decision make it a gift. You should never loan money to family. I don’t care if you get the terms in writing, you will never be able to enforce the contract. What are you going to do? Take them to court? I don’t care if they tell you they won’t take charity.

A loan will only poison the relationship. Each time you have to call to collect on the missed payment it will damage both of you. Even if you don’t have to make the call (unlikely) it will always get in the way of your family.

Note: a gift means no future expectations. You don’t have the right to ask for it back. They don’t owe you. You can’t use it for emotional leverage. It must be given freely.

Every once in a while you hear someone who focuses on increasing your income. Most of the time it is based on working harder and longer. Often it includes being more productive.

Don’t get me wrong, it isn’t bad advice. For 80% of Americans, it is a step in the right direction. Considering the rampant abuse of credit cards, it is their path to salvation.

Path 1
This is the most common path you see personal finance guru’s advise. This is what you hear from the frugal blogger community. It is 90% of the help Dave Ramsey and Suze Orman give.

The concept is basic: reduce your expenses below your income. Interest and penalties are unnecessary expenses, so they must be eliminated.

While this is the foundation for personal finance, it is missing a key element to build wealth. By itself it leads to a safe and stable life of mediocrity. Yes, you can become a millionaire by using this path. It just won’t happen until you are too old to enjoy it. And how much will your nest egg be worth? By then a million dollars will be the equivalent of $700k. While this is a good chunk of money, it leads to a lower middle class retirement. Not the golden watch we all dream of!

Path 2
Ahh, this path is riddled with scams and charlatans. Don’t worry about expenses, increase your means. On the surface this sounds great. Keep enjoying the latte. Drive cars you can’t afford. Live in a house that is too big for your income. Trust that you will make enough to pay it all.

There are some real experts that tell you to focus on increasing your income. Michael Masterson is one. Robert Kiyosaki is another, though his status as “expert” is questioned by many. Most of their focus is on increasing your pay or starting a side business.

This road has major flaws.

• First, if you can’t manage your finances at $30k/year, it will just be magnified at $300k. This is a fact and has been proven in study after study. The typical person’s expenses increase faster than their income. What was a financial problem at $30k becomes a downright crisis as the income increases.
• Living within your means is safety. Your financial security is inversely proportional to your debt. For the non-math majors, that means that as you decrease your debt, your life becomes more secure and stress free.
• Dollar for dollar, decreasing expenses results in more free cash than increasing income. This is due to income taxes.
• The second path is littered with get rich quick schemes. There are legitimate businesses out there. Some of the advice is good. 97% is bunk.
• If you do find or build a legitimate business, you need more than just income. You also need expense control and budgeting. Hmmm…Doesn’t that sound like personal finance?
• There is truth to the belief that material things get in the way. They clutter your life. They increase your expenses. They are an emotional drain. I’m not saying we should live like monks. We should just be careful what we bring into our lives.

Path 3
This is Benjamin Franklin’s path. Decrease your expenses. Increase your income. This is the best of both worlds.

Dave Ramsey (and similar experts) touch on this, but often it is to help get you out of debt. “Take a second job to speed up your debt repayment” is their mantra. That is great to get you out of a bind, but is not a long term solution. You work 40 hours a week at your day job. You do 20+ hours as a pizza delivery guy. That doesn’t leave you any time for family and fun. Once you are out of debt, this is not the way to lead a rich and balanced life.

There may be many ways to bring in more money, but I find two to be most effective.:

1. Earn more at you job: What are your doing to earn a raise or promotion? Your compensation is based on your contribution. You must first increase your contribution if you want more pay. And remember, the training you receive while on the clock is to do your current job. It is the time you spend after work that will help you get ahead.Another thing to consider is whether your pay is appropriate for your industry. Often you find that other companies are paying more for your skills. If so, you have the justification to ask for a raise or find another job. For more info on job hunting, check our my post 11 Steps to the Job of Your Dreams.
2. Start a side business: My advice is to practice what Michael Masterson calls chicken entrepreneurship. Start a small business on the side. Stick to an industry you know well. Stick to your existing skills. Find a niche and identify their needs. Build your business around filling those needs. Start on a shoestring to minimize your risk. This topic is far too in depth to be discussed in this post, so look for it in the near future.

A similar post also came up on JD’s blog Get Rich Slowly as JD had a chance to speak to 70 graduating seniors.

How to Not get the Job
If you like wasting time sending out endless resumes, be like everyone else. Go to Monster.com and apply to everything you see. Don’t take the time to research the company. Don’t modify your resume to fit the position. Sit back and wonder why your phone doesn’t ring…I call it the shotgun approach to job hunting.

Or you can do something even worse. Use a resume blaster. If Monster.com is a shotgun, this is a nuclear device!

If you want a job, don’t apply to job postings
It only gets you thrown into the black hole known as Human Resources. Their job is to screen out applicants to a reasonable level. This is a case where you want a sniper rifle, not a shotgun. It may seem counterintuitive, but the fewer jobs you pursue the more successful you will be.

11 Step Strategy to Land your Dream Job
Here is my 11 step strategy. It has almost always gotten me the job. Everyone I know that has used it found it to be the easiest job search of their careers.

It may seem like more work, but it isn’t. You put in 10 hours up front and blow away your competition. You impress your future boss. You go in offering a solution to their problems, not asking them to help you with a job.

You also find the “hidden” jobs. The best jobs are filled internally. If they go out to the general public it is because they are required to do so by HR. They already know who they want to hire.

1. Identify 10 companies you want to work for.
2. Do basic research on these companies and the industry. Talk to friends. Ask family what they know. Google them. Your goal is to weed it down to 3-5 that are strong candidates.
3. Now you start the real work. Dig deep into each company. Go to the library and research them. Look up news articles and press releases. Get their annual reports.
4. Do the same for the industry. You want to be an industry expert.
5. Research their competition. Know thy enemy…
6. Get an informational interview with several people in the company. You need to know more about the company and your future boss. You may find you don’t like what you see, and now is the best time to change your mind.Do not try and turn this into a job interview. You need to be honest and be doing research. Often this will lead to an interview. They may ask you back for an official interview, but you are not ready yet. Push it out a few days out so you can get ready.Not only are you gathering info, you are getting to know the management team. You want to go in as a known candidate, not as one of the masses sent by HR. Also, if you meet several people and come across informed and capable, multiple jobs will appear.
7. Put together your portfolio focusing on how you and your skills will help the company succeed and grow. Things to include:
   • Resume/CV
   • Letters of recommendation: go to family friends, coaches, professors, ministers, etc…
   • certificates of accomplishment
   • diplomas you have earned
   • a copy of your transcript
   • executive summary of the company
   • executive summary of the industry
   • executive summary of the competition
   • summary of the projects you have worked on (listed last because it is the least important thing).
8. Think of ways you can help the company. Come up with several thoughtful questions about the company and the interviewer. Go through common interview questions and come up with good answers. Practice with friends.
9. Call your future boss and tell him you love the company. Let him know you have been researching the industry and think you have some ideas to help them ______(fill in the blank with your newfound industry knowledge and info from the informational interviews). Be polite and professional.
10. Go dressed in a suit. Shine your shoes. Get a hair cut. Look your best.
11. Send everyone you meet at the company a thank you card. Don’t email, write it out by hand.