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This post is by staff writer Honey Smith.

I’ve written about the power of personal networks before. Unfortunately, lots of people find networking intimidating for a variety of reasons. Certainly, I used to! For me, breaking networking down into a system that I can follow helps me overcome nervousness and network effectively. Here are the two main networking strategies that I use.

Networking via “keeping it warm”

What it is: Keeping it warm is a pretty straightforward strategy. It means that you don’t wait until you need something before getting in touch with your professional connections.

I try to meet my grad school friends in the area every so often for lunch or a quick drink. I ask questions about their careers and lives and tell them about mine. If I hear about an opportunity that they’d be perfect for, I am proactive about letting them know.

Challenges with keeping it warm: This strategy assumes that you have the time, energy/health, at least a little bit of discretionary money, skills you are interested to market, and connections other people would find interesting. However, there are ways to get around these challenges. Setting calendar reminders can ensure people don’t drop off your radar. If you’re busy or sick or can’t afford lunch right now, an email may work just as well. This GRS article on job search advice even gives you some email scripts!

Why it works: Putting effort into keeping up with someone’s life and career, even when everything’s going great for you, has a couple of advantages. First, it means that they don’t view you as self-centered. Second, it means that their image of you is of someone competent and in control of their life. This prevents you from being the person who only contacts them when you need help. Regular contact also keeps you on the forefront of their mind if they hear of an opportunity that you’d be perfect for. Additionally, if you can help them first, they will be invested in returning the favor.

Who it works on: The main target for the keeping-it-warm strategy is former colleagues or even supervisors that you were friendly with. These are people who are familiar with your skill set. It’s like my friend said:

I already know you’re an excellent writer, so I don’t have to interview you. I just have to show you the nuts and bolts, and you’ll pick it up fast.

A significant percentage of jobs are either never advertised in the first place or are advertised but the company already has someone in mind for the position. That’s evidence of people out there keeping it warm.

My results: While the freelance work that my friend set me up with did peter out eventually, I earned almost $5,000 before that happened. I’d call that a success! And I’ve been able to send some work his way as well.

Traditional networking via group memberships and websites

What it is: This is what people usually think of when they think of networking. While you may have something in common with these individuals, they’re probably not anyone that you ever worked with directly. This may include people that you know socially but not professionally, or individuals you’ve never met but have something in common with as a result of your group membership (an example might be a college alum club or a professional conference).

Challenges with networking groups and websites: The issue with these sorts of groups is twofold. First, it’s easy to join (or be part of) a group, only to fail to put in the work (whether due to introversion, lack of time, or other factors) and then wonder why it’s not paying off. Second, even if you are putting in the work, it is challenging to come across as genuine when the whole point of the group is to (awkwardly) put people who (allegedly) have something (superficial) in common in the same space, whether physical or virtual.

Why it works: One of the reasons that this strategy can work is that everyone’s on the same page: If someone contacts you and references the group, then you don’t have to wonder what their motive is. Additionally, many people in these groups are ready and willing to help, but due to introversion, lack of time, or other factors, don’t end up reaching out themselves. They may be relieved if you take the initiative! Bonus points if you are friendly and attempt to make a personal connection so the exchange doesn’t feel clinical or self-serving.

Who it works on: People who are members of the group or website, natch. This approach does require a little more work in terms of demonstrating your fit, since the person doesn’t necessarily know who you are. Once a connection has been made, it’s important that you keep it warm. In other words, you want to think about making long-term connections. Since 9-to-5 jobs may be getting harder to come by, these types of connections may become increasingly important.

My results: In 2009, I joined the networking site LinkedIn and connected to everyone in my address book who also had an account. Within weeks, an alumna from my sorority who lived on the opposite side of the country had passed my name along to an editor who hired me to design an online writing course. At the time, my day job was furloughing workers due to the economic meltdown, and I made enough money with that one freelance gig to replace 10 percent of the salary that I’d lost.

More recently, I attended my local sorority alum club’s annual membership brunch. I ended up talking with a woman who used to work in a position very similar to mine before leaving to start her own business in a related industry. I made sure to get her contact information and sent a follow-up email. She’s already responded and we’re setting up a lunch. I’m looking forward to picking her brain about our mutual interests and sharing what I know in return!

Networking can be intimidating — but it doesn’t have to be

I really didn’t feel comfortable networking at first. But I found that, the more I practiced, the less intimidating it became. It didn’t take too long for me to build confidence and overcome my fear. Recently, by engaging in “pre-emptive networking,” I am starting to make connections before I need them. That way by the time I find myself in need, the groundwork has already been laid and all I will need to do is to reach out and ask for help.

Do you network regularly? What strategies did you find to be successful? Did you ever have reservations about networking, and were you able to overcome them? If so, how?

This article is about Career, Hints and Tips, Relationships

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This article is by staff writer April Dykman.

For years I’ve tried to keep a daily meditation habit. Every time I read a new study about how meditation can improve your health, I vow to start again and to do it every day. Sadly, the habit lasts for about a week. But I recently learned about a non-health reason to meditate: Some money experts credit it with their financial success.

For instance, Reuters reported that some of the most successful hedge fund managers credit their success to meditation. According to the article, money managers who meditate cite the following benefits:

  • In a crisis situation, they’re able to remain calm and focus on what’s most important.

  • They are more willing to accept reality for what it is. For example, they report that meditation has made them less likely to succumb to “confirmation bias,” which is the tendency for people to favor information that confirms their preconceptions, regardless of whether the information is true.

  • They believe they are more creative at problem-solving.

Brent Kessel, cofounder of investment firm Abacus Portfolios, shows people how to combine good money management practices with meditation and yoga, arguing that most money problems start internally. “No matter if they are rich or poor, everyone struggles with money,” said Kessel in an interview for U.S. News. “I counsel people who have hundreds of millions [of dollars] of net worth and others who are $100,000 in debt. The money doesn’t seem to make a difference. The patterns that people are stuck in seem to go on and on, year after year, regardless of how many self-help books they read and what financial planner they’re working with.”

In the interview, Kessel says that a big source of unhappiness (and money problems) is the “wanting mind,” which is never satisfied.

But the wanting isn’t just about wanting and buying material stuff. “Virtually everything that passes in our minds has a wanting component to it,” said Kessel. “When you see that, you see it’s insatiable…The issue is: Are you blindly following an endless train of [desires], where as soon as you satiate one, another pops into its place?”

If so, Kessel says that meditation can break that cycle. “A big part of it is where you put your attention — if you put your attention on what you already have and what is enough,” he says. “One way to do that is when your mind is saying, ‘I don’t have enough,’ you ask yourself if that’s true. It’s a surrender game. You get to that place where that voice starts to lose more and more of its power.”

I’m definitely aware of my own “wanting mind.” It wants everything from a new fall wardrobe to homemade pumpkin spice lattes to a swimming pool in a xeriscaped backyard. I blame Pinterest.

The lack of data

Of course, unlike the studies on the health benefits of meditation, the benefits to your finances are difficult quantify.

For instance, hedge fund managers can’t really prove that meditation increases their creativity. “It may simply be that calm people are more able to be creative than frenzied ones, or it might in turn [out to] be that meditators wrongly attribute their good ideas to the practice,” writes James Saft for Reuters. “The lack of data is probably the biggest impediment to evaluating the impact of meditation on investment performance. It is also why we are not likely to see it becoming a widespread marketing point for fund managers any time soon.”

But the results, whether or not they can be quantified, caught the attention of at least one business school: In 2013, Georgetown University’s McDonough School of Business announced that it would begin to offer a semester-long class on meditation.

Another reason to try again

Whether or not the financial benefits can be quantified, I suspect that meditation is beneficial for money management, even if it’s only indirectly beneficial.

For instance, debt can be a huge source of anxiety and depression. When I had credit card debt, I definitely had anxiety about it. I hated opening the bank statements. I even hated checking the mail, for that matter. But meditation has been shown to ease anxiety and depression. And it seems reasonable to assume that someone in a more positive frame of mind will get out of debt faster than someone who feels like the situation is hopeless.

At any rate, it’s just one more reason that I want to give daily meditation another try. Now if only I could sit still long enough to do it…

Readers, what do you think? Would you try meditation as a way to improve your finances?


This article is by staff writer Kristin Wong.

The first time I felt the intimidating pressure of adult responsibility, I was three months out of college. It was my very first job interview, and I was wearing an old sweater and a pair of ill-fitted slacks, sweating. My would-be boss, the man sitting across from me, was only five or six years older than I was, which made me even more nervous. I’d never met someone in my age group who was that confident and self-assured. It was distressing.

He led me through a series of noisy workshops filled with strange smells and industrial machinery. He managed a small engineering firm, and I was applying to be their technical writer, which I was excited about because, if I got the job, I’d be a writer (technically).

The interview was going pretty well; but at the end, he asked me one final, bottom-line question:

“Are you confident you could write a thorough instruction manual for this piston?” He pointed across the workshop to a piece of equipment that looked like a prop from a Ridley Scott movie.

“Yes,” I lied. “Definitely.”

Surprisingly, I got the job, and, even more surprisingly, a few months later, I did write a thorough instruction manual for that thingamajig. (I was more formal in the manual).

As with most intimidating things, I’ve found that, after you attempt them, they’re not nearly as terrifying as they seem. Here are some things that terrified me at first but turned out to be pretty simple, actually:

  • Driving downtown

  • Moving across the country

  • Parallel parking

  • Investing

Investing intimidated me for a few of reasons. First, it seemed like a really, really boring topic. Two, some well-meaning people told me it was like gambling. Three, there was just so much jargon (see Reason #1).

But I treated it like I did the technical writing. I didn’t understand it, but I broke it down into a series of small bites to digest and that seemed to help in terms of how overwhelming it was. There’s still a lot of stuff about it I don’t understand, but I’m much further along with it now than I was even a year ago. Here’s how I started, step by step.

Searching for my lost 401k

Two years after I quit my job and moved, I decided to look into my old 401(k). On the plus side, I was at least smart enough to take advantage of my company’s match. But for two years, I had no idea what to do with it or even how to access it. In that time, I undoubtedly incurred high fees and missed out on better returns.

When I started getting my finances in shape, I realized I needed to do something with that old 401(k), which was my money, parked in some mystery location. I emailed my old employer, got the necessary info and decided I should continue saving for retirement. That meant rolling it over into an IRA.

Now I just had to find out what an IRA was.

Opening a retirement account

At this point, I needed to know a couple of things:

I learned that there were two main types of IRAs: traditional and Roth. We’ve written about this topic at length, but if you’re unsure of the difference, start here. To sum it up:

“The biggest difference between a Roth IRA and a traditional IRA is the tax treatment of contributions and withdrawals. With the Roth, contributions aren’t tax-deductible, but withdrawals are tax-free (as long as you follow the rules). For the traditional IRA, contributions might be deductible; investments grow tax-deferred, but withdrawals are taxed as ordinary income — the highest rate possible.

The conventional wisdom is that a traditional IRA is better if your tax bracket today is higher than what it will be in retirement.”

I decided to roll my 401(k) over into a traditional IRA with Vanguard. It just seemed easier, and I felt like it was more important than anything just to start saving. Vanguard talked me through the process. I learned that I had to specifically initiate a rollover. I couldn’t just take the money out and then open an IRA separately; that would mean all kinds of crazy taxes and fees.

(Lately, I’ve been thinking about switching to a Roth, or opening one up separately because I appreciate the idea of tax-free growth.)

But — yea! I opened an account, and it was time to start investing and saving.

Learning about index funds

About two months after I rolled over my 401(k) and saved a little bit in my new retirement account, I decided to look at the earnings. “What’s going on here?” I thought. “Nothing has changed.” There were no earnings, no real action whatsoever. I called Vanguard.

“Your funds are in a money market account,” they told me.

“Oh! Okay.” I said. “Now, what exactly is that?”

I learned that a money market account is basically a glorified savings account. My money was parked there, not really doing anything for me — not exactly the way investments are meant to work. It was time to pick my actual investments. This was much easier when I had a company-sponsored 401(k). They gave me a menu; I pointed to what I wanted.

But now I actually had to find out what made up these menu items and build my own portfolio. So I did what anyone does when they need to understand something that’s way over their head: I Googled it.

Of course, I also looked through Get Rich Slowly’s massive investing archive, and I found that index funds were the way to go. From our intro article on index funds:

“With active investing, an investor tries to pick stocks that will outperform other stocks. With passive investing (also known as index investing or ‘investing in index funds’) an investor simply uses mutual funds to buy all of the stocks in the market. The basic idea is that with greater diversification and lower costs, a passive investor will generally do better than someone who buys actively-managed mutual funds.”

That sounded good … I guess? I had no idea what half of those words meant, and I spent a lot of time looking up definitions while reading that article. It took me at least an hour to get a grasp on even the basic definition of an index fund.

But in that hour, I digested a bit of information that would benefit my finances enormously. I also learned that there were different types of asset classes in which to invest, namely stocks and bonds — and there were index funds for those too. Since I already had Vanguard, I decided to go with their funds.

Figuring out how to diversify

After learning that diversification meant investing in different assets, I needed to find out how to do it.

There are a lot of different resources and calculators you can use to figure out how to diversify your investments. I started with a basic allocation of 80 percent stocks and 20 percent bonds, but I’ve tweaked it a bit since then. Honestly, it’s something I’m still learning. I’ve found that Personal Capital’s investment checkup tool is pretty helpful. It actually tells you how your current portfolio is invested and how they suggest you invest based on the information you give them.

A lot of people would scoff at that oversimplified 80/20 allocation, but the bigger point was that it started me in the right direction.

Investing beyond the standard IRA

As a self-employed writer, I no longer had the luxury of 401(k). And IRAs have contribution limits. I was determined to save more than that, so I started learning about retirement options for self-employed people. I read “The Money Book for Freelancers,” per El Nerdo’s suggestion. They listed all kinds of options and, after doing more research, I decided to go with a SEP-IRA.

After a while, the earnings in my retirement accounts were so good that I wanted to invest my non-retirement savings too. I wanted to make big returns on my regular savings, without having it locked up in retirement. So I opened up a taxable brokerage account and I started to invest in index funds within that account as well.

Understanding taxes

Finally, I learned that there are those investing accounts that are taxable and those that are tax-advantaged. Ideally, you want to invest in tax-advantaged accounts first, to take advantage of those, uh, “advantages.” Common tax-advantaged accounts include:

  • IRAs

  • 401(k)s

  • 529 college savings

  • HSAs

But if you have a savings goal, maybe you want to put it in a regular taxable account, like I did. Either way, it’s important to understand how taxes work when you invest. I learned that when you sell your investments, if you earned money on them, that money is called a capital gain and it’s taxable.

Separately, stocks earn dividends and bonds earn interest. Those are taxable too.

Sure, there are a few things I could have done differently. After opening my taxable brokerage/savings account, I learned that you can withdraw your contributions from a Roth IRA, penalty free. (Only contributions, though). So I guess I could have opened a Roth IRA and used it as a place to park my savings.

To recap, the steps I took to get started with investing:

  1. Find my abandoned 401(k).

  2. Learn about the different types of IRAs and open one.

  3. Roll over my 401(k).

  4. Learn what index funds are.

  5. Figure out how to diversify my investments.

  6. Pick some index funds to invest in, based on that diversification.

  7. Find other ways to invest aside from standard IRAs.

  8. Understand how taxes work in regards to my investments.

Of course, this is a very basic overview, and I’m still learning — but that’s kind of the point. Investing is something I never thought I’d understand or even care to understand. But now, by jumping in and taking small steps, I’ve found it’s actually not that hard. I actually understand what people are saying when they talk about their portfolios and stuff. And, more important than that, my finances are the better for it.


This article is by staff writer Holly Johnson.

I have two second cousins who serve in the military — both brave young men I am proud to call my family. We don’t always talk much, though. The age gap can be a roadblock and those boys are always traveling around, serving overseas and living on bases in order to fulfill their military duties and finish school.

Still, social media makes it easier than it used to be, and emails are a quick and painless way to stay in touch. So I wasn’t surprised to receive an email from my cousin, Michael, asking for advice on his future financial goals.

So, what’s the deal? As part of his military compensation, Michael will soon start receiving $2,124 per month for housing and wanted ideas on how to parlay that money into long-term wealth.

Buying rental property, and getting rich slowly

But it wasn’t random; he contacted me for a specific reason. He and his wife are toying with the idea of buying a property to live in temporarily, then rent out. And since he knew I own rental properties myself, I’m pretty sure he expected me to support this idea wholeheartedly.

Boy, was he in for a surprise.

Too dumb to be afraid

It’s not that I think he’s too young. Truth be told, my husband and I bought our rental properties when we were just a few years older than my cousin (at ages 25 and 26). It’s been almost nine years since then and we’ve learned a lot in that short amount of time, including the fact that we were not prepared to be landlords when we first started out.

I’ve said it before and I’ll say it again — when we bought our rentals, we were too dumb to be afraid. We were too young and inexperienced to understand the many things that could go wrong, and what those things really meant for us. Simply put, we were ignorant.

Asking the right questions

So when my cousin asked what I thought about his aspirations to be a landlord, I had a ton of questions to ask — the same questions I wish someone had asked me before I got started. After a short introduction email, here are the questions I sent in reply:

  • What is the average price for housing where you live?
  • What is the average rent where you live?
  • Why do you want to buy a house?
  • How long do you plan to live in Maryland? One year? Five to ten years?
  • Would you plan to keep your rental property for the long term? If so, what is your plan to manage it from a distance?
  • Would you get a 30-year loan?
  • Would you hire a property manager? Have you factored that cost into the equation?
  • Do you have considerable savings to take care of home repairs?
  • Do you have the money to pay for multiple repairs and vacancies all at once?
  • Do you have a down payment? Do you plan on paying PMI?
  • Have you factored property taxes into the equation? How high are taxes where you live?

After talking through instant message for quite a while, I got answers to most of those questions. First, they planned on living in the house for a few years and intended to rent it out after that. He hoped to hire a property manager to manage the home while he moves elsewhere in the country. And since he could qualify for a VA loan, he didn’t need to worry about paying private mortgage insurance (PMI).

However, I could tell he hadn’t considered many of the other factors I mentioned — including a savings cushion for those inevitable repairs.

“No, I don’t have the savings currently,” he told me, after some prodding.

The truth about being a homeowner

Kristin Wong recently asked whether homeownership is still a good measure of financial success and examined why the appeal of owning a home is currently on the decline in some groups, including Millennials.

“Ownership is a sign of financial stability and freedom, but it seems like a lot of people are questioning the rush into that,” she wrote.

In my opinion, waiting it out seems like a good idea.

I spent my 20s watching shows like “House Hunters,” “My First Place,” and “Property Virgins,” and believing every word. While entertaining, they would have you believe that the housing market always goes up and that there are no bad investments — only good, better, and best.

That was before the housing crash of 2007-2008, a time when people believed that real estate could never go wrong.

Now we know better.

Where things break down

But fluctuating real estate prices aren’t the only reason homeownership isn’t attractive for everyone. Let’s talk about repairs.

Over the course of eight years in real estate, I’ve replaced a roof and two air conditioners, paid nearly $10,000 for interior and exterior drainage and sump pumps to be installed in the yard of a property with a water problem, and repaired $6,000 worth of damage left behind by a tenant.

Most of those repairs were paid for from the profits I brought in from our rental properties or insurance, but not all of them. Unfortunately, being a landlord (and a homeowner) means shelling out some of your own money for repairs from time to time.

The fact is, things break. Often. And as a landlord and homeowner, it is your sole responsibility to fix them when they do.

Far too many people rush into homeownership without realizing the financial implications of doing so, and it is generally to their detriment. Most experts recommend having an emergency fund of three to six months to take care of unexpected expenses, including home repairs.

But landlords need far more than that. Owning rental property generally means having multiple furnaces, air conditioners, and roofs to take care of, and more money to go with it.

Sometimes your best route is to think long term

After nearly scaring my cousin to death with all of these issues, I gave him the best advice I could muster.

“Rent the cheapest place you can while you’re young,” I said. “Put all of your money into savings and investments and don’t look back. One day, when you have the money to own a home, and perhaps rental property, you can reassess.”

“Sometimes progress means taking it slow,” I added.

That advice may sound funny, but I’ve found it to be true.

When I was 25, my thoughts on making progress in the wealth department were entirely different than they are now. In those days, progress meant taking huge risks and making moves. Progress meant doing something and making things happen — not just waiting to let things happen to me.

But now that I’m older, I realize that the opposite approach usually works best. I don’t regret buying our rental properties or becoming a homeowner, but I also realize that I wasn’t prepared at the time. We would have been better off if we had more savings ahead of time, for example, and done a whole lot of research. Instead, our success can mostly be attributed to luck … and good timing.

The truth is, sometimes progress is boring. Sometimes the best thing you can do for yourself is literally nothing, except to see where life takes you and make the best decisions you can with the information you have at the time.

One of the best decisions you can make is to keep saving because, as we all know, having money means having options — the option to stay put and rent, the option to buy a home or even to become a landlord if that’s what you really want to do. Especially when you’re 25 years old, the more options you can give yourself, the better.

Are you building wealth by taking risks or are you taking time to plan your investments more carefully? Has your idea of making progress on building wealth changed over time? Do you regret any of your financial decisions?


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