Thursday, December 18, 2008

What I Have to Say to New Graduates (and anyone else who'll listen)

Yesterday, I gave the commencement address at Columbia College (MO.) This is what I said.

Thank you President Brouder, thank you Dr. Smith. When I hear a flowery introduction like that, I’m reminded of this little ditty: I may pretend the introduction is a bore. But deep inside, I’m chanting "more, more, more."

It feels like only yesterday that I was sitting at my own college graduation trying to listen to some old person giving the speech. I was fading in and out and mainly thinking, “I’m hungry--I can’t wait to go out to eat afterwards.”

Now I’m that old person and I still can’t wait to go out to eat. I will try to keep it short.

Ever since Dr. Smith asked me to give this commencement address, I’ve been keeping a list of all the pieces of advice I thought might really be helpful both to you the new graduates as well as to your family and friends who join you here. These are the seven I believe are most important:

Lesson 1: Savor every moment. Right after I graduated from college, I rewarded myself with a vacation to Europe. I recall rushing through the Louvre so I could squeeze in two or three more tourist spots that day. Of course, I enjoyed the Louvre—one of the world’s greatest museums-- far less than I could have and should have.

Life goes faster than you can possibly imagine. So try to savor every moment-- this very moment, going out to lunch afterwards, looking at the cutie sitting near you.

Lesson 2. Ask for what you want. As I think back on my 3,000 career coaching clients, so many had lived such constrained lives because they were afraid to ask for what they wanted: “I’m afraid I’ll be imposing. I’ll be embarrassed. What if I’m rejected?” Rationally, they knew they could survive the rejection but couldn’t, without some coaching, make themselves ask.

And asking for what you want (if it’s ethical) can so help your life. An example that my wife suggested I share with you: I’m self-employed, have a home office, and take as many deductions I legally can, maybe even a few gray areas. So, perhaps not surprisingly, I was audited twice in three years. And even though the IRS found me clean both years, the next year, I got yet another audit notice. My wife saw me starting the laborious process of organizing my receipts for the audit when she said, “I’m going to try to talk the IRS out of your audit.” She came home bursting with laughter: “I got them to cancel the audit!” As long as it’s ethical, ask; if someone says no, ask someone else, and if necessary, someone else.

Lesson 3. Stop procrastinating--it’s a career killer. When I give talks to unemployed people, I ask the audience, “If you consider yourself a procrastinator, raise your hand." Most do. For curiosity sake, when I gave a talk to a group of highly successful people, I asked the same question and only a small percentage raised their hand.

In college, you may often have been able to get away with procrastination: You waited to start your term paper until the last minute and, lo and behold, you got a good grade anyway. Or you didn’t do the term paper at all and the professor gave you an extension. But in the real world, procrastination usually devastates your career. You must cure yourself of that bad habit.

Decide that you care enough about yourself to force yourself to get started early on every task--well maybe not cleaning out your basement.

Lesson 4: Spend smart and save smart. College may have taught you many valuable things, but perhaps not how to manage money wisely. Such a topic may seem too plebeian for a commencement address, but spending and investing wisely, especially in our slow economy, can transform your life: You’ll have more freedom to choose your career--If you’re a big spender, you may be tempted into a career you like mainly for the money--bond trader, insurance salesman, marketing person, corporate lawyer--rather than something you’d find more intrinsically rewarding: perhaps teacher or architect or writer. By spending and saving wisely, you are also more likely to avoid the terror of not being able to pay your credit card bills (or student loans!,) having your home foreclosed, and going bankrupt. Here’s the world’s shortest course in managing money.

On the spending side: here’s how to spend cautiously without being unhappy for a lack of material possessions:

Housing: Housing is the largest investment you’ll probably ever make. And an axiom of investing is: Never catch a falling knife. Well, housing prices are a falling knife. So even if you can afford to buy a home, this may be the time to keep renting. As they taught you in physics, objects, even prices. tend to stay in motion in the same direction. Right now, they’re going down. Wait for a change of direction: wait for prices to go UP 10%. That increases your chances of getting a house less expensively. And when you do buy, buy in a good but not prestigious neighborhood--you pay a huge premium for prestige, tens maybe even hundreds of thousands of dollars, without sufficient recompense. Too, buy a house that has a good layout but in which the veneer needs help: a coat of paint, redecorating, and yard work. You’ll likely save many thousands more than it'll cost to fix it up.

Car. I’ll be very specific here, again more specific than may seem appropriate in a commencement address, but it can save you so much money that you’ll be freer to live the life well-led implied in your liberal arts education. Make your rule: “Buy a three-year-old Toyota and keep it until it’s unreliable.” Why three years old? Because cars lose much of their market value in the first three years yet have most of their life left in them. Why Toyota? At the risk of sounding like a Toyota salesman, Consumer Reports for decades has told us that not only are Toyotas superreliable when you get them, they stay that way for a long time, and with minimal maintenance. All my family’s Toyotas have lasted 175,000+ miles. I kept my previous one for 273,000 and the only reason I sold it is because my wife insisted, “Would you please get a new car already?” If you buy three-year-old Toyotas and keep them until they’re unreliable, you will save hundreds of thousands of dollars over your lifetime without diminishing your quality of life.

Spending in general. Study after study shows that you can’t spend your way into happiness. You buy that pair of shoes and you feel happy for a little while but like a heroin shot, it soon wears off, and to regain your shopper’s high, you usually have to buy something more expensive. And your spending keeps accelerating to maintain your shopper’s high, just like a drug addict’s habit. So many Americans have shopped their way into bankruptcy: If you’re a spender and suddenly you or your cash-cow spouse loses their job, you can’t make that credit card or mortgage payment.

Shopaholics and people who try to keep up with the Joneses are far less likely to be content with their lives than are people who seek pleasure from relationships, volunteer work, and from self-expression, for example, performing, writing, or involvement in politics. Alas, I haven’t been able to convince my wife.

On the saving side: This remarkably simple approach beats most investors’ results including the professionals’--and certainly ensures you don’t get scammed by the likes of Bernard Madoff, who ripped off his supposedly sophisticated clients to the tune of $50 billion.

Every time you have $1,000 extra in your checking account, do one of two things: If you’re risk-averse, visit bankrate.com to find the highest yielding bank CD in the U.S. You’ll get a guaranteed 4% return in an era of 1% inflation--that’s a great deal. Or if you'd rather assume some risk in hopes of greater rewards, without trying to time the market, invest the $1,000 in a solid, low-cost mutual fund. My favorite is Vanguard Index 500, which at very low cost enables you to invest in America’s 500 largest companies, which attract most of the nation’s best and brightest people, and most of which do business all over the world, including China and India, which are likely to grow more than the U.S. during your lifetime. I like the idea of investing my money in the nation’s best and brightest and betting on China’s and India’s growth.

And that’s the world’s shortest course in money management.

Lesson 5. Be kind, even if it doesn’t pay. That doesn’t require sainthood or even a lot of time. It just means, moment-to-moment, doing the right thing without expecting anything in return. In fact, being nice can even bite you. For example, if you're always kind to your boss, he might reasonably assume, “Well, he’s satisfied so I don’t need to give him a raise.” Be kind anyway because every night, when you put your head down on the pillow, you’ll feel good about who you are. Also, being kind ensures that your life will have yielded a net plus to the world. Not everyone can say that.

Lesson 6. Beware of The Parasite Syndrome. Many people expend enormous effort avoiding having to earn a paycheck. They try to mooch off their parents or romantic partner. They’re forever seeking--pardon the expression—a bailout. Being a parasite ultimately  makes a person unhappy and powerless. Doing ethical work that pays the bills is much more likely to make you feel good about yourself and the life you’re leading than a lifeful of recreation, therapy, and affirmations.

Much of my feeling about the power of work comes from my career coaching clients, my friends, and originally, from my dad. He was a Holocaust survivor and rather than try to heal himself by reliving the Holocaust again and again, work healed him. When he was dumped from a cargo boat in the Bronx, NY, without a penny to his name, with no family, no education, and not a word of English, he did not take welfare and he felt no job was beneath him. He took a minimum-wage job sewing shirts in a factory in Harlem. And after a long day of work, he didn’t say, “I’m tired, I want to hang out.” He went to night school to learn English and because he didn’t want my mom, my sister and I to live forever in the Bronx tenement we were renting with the elevated train roaring 24/7, he saved up from his meager salary so he could afford the first and last month’s rent on a store--105 Moore St. in the worst area of Brooklyn--the only thing he could afford, but which offered hope that he might eventually earn more than the minimum wage. He did end up earning a middle-class living there, which enabled him to move our family from the Bronx to the bottom half of the duplex in the middle-class neighborhood in Queens where I spent the rest of my childhood. Hard work healed my dad and did good for his customers, my mom, my sister, and me.

Don’t be a parasite and, in looking for a romantic partner, beware of anyone you sense might always find a way to avoid contributing significantly to the family income. Unfortunately, given America’s likely descent from its position of worldwide economic dominance, it will likely get ever tougher to make ends meet on one income.

Lesson 7: Don’t look back. My father’s store was so small that he needed to display most of the merchandise out on the street on folding tables. He needed someone to watch that people didn’t steal the merchandise. So, as a young teenager, I would do it on some Saturdays. (I was no more intimidating as a security guard then than I am now.) One day, when business was slow, I asked my dad, “How come you rarely talk about the Holocaust?” I’ll never forget his answer. He said, “The Nazis took five years from my life. I won’t give them one minute more. Martin, don’t look back; look forward.”

We’ve all had bad things happen to us: Our parents abused us; our romantic partner left us; we made bad choices; we may have been victim of racism, sexism, classism, lookism, or homophobia. But the vast majority of my successful clients and the other successful people I know do not wallow; they rarely look back; they do look forward. They ask themselves, “What’s the next positive little step I can take.” I can offer you no better advice.

So, to summarize, may you all look forward, may you all not procrastinate (too much,) may you savor every moment because life goes faster than you can possibly realize, may you ask for what you want (as long as it’s ethical,) may you be kind (not a doormat but kind,) may you spend smart and save smart, and may you work hard. But today, have a lot of fun. You’ve earned it.

5 comments:

Dr. Fred said...

Forget about the new graduates! I can use that valuable advice, now, at 36.

Well said.

Dave said...

This is why I enjoy reading your articles and blog. Thank you for sharing your wisdom and life experiences. I have learned a lot over the past year. Everything in your address can be found in your articles -- 'asking for what you want' to 'not looking back.' My great grandfather and great uncle survived Dachau. They never looked back either. These lessons can be applied to all areas of life.

On being thrifty - It's hard to do that if you're married to someone who likes to spend money. My parents bought a brand new Volvo in 1984. My mother was the one who really wanted it. My father gave in and coughed up the $17,000. That was a lot of money for a car back then.

Also, I think it is best to pay cash for any used car. Who wants to make monthly payments on a second-hand car? I had a Volvo 240 in college. I paid $2,000 cash and it gave me 90,000 trouble-free miles over four years. It had 204,000 miles on the clock when I sold it.

On finding a teaching position for your spouse (the other Dr. Nemko) - This is one of the scary things about marriage. One can end up living in the other's shadow. You got lucky. What if your MBA spouse comes home and says, "We're moving to New York. I've got a job offer I can't refuse." Even if you find a job in your new area, you may not like it. What if it doesn't pay as well as your current job? What if your spouse resents you for it?

Again, it's an excellent address. The graduates will get a lot out of it.

Anonymous said...

Thoughtful and targeted to benefit the audience--not the speaker. Another good deed in the bank. Thanks for sharing it.

Jeff Shore said...

I want to be 22 again! Dr. Fred is right - great advice at any age.

Anonymous said...

Outstanding speech! It's great advice for anyone with a pulse. I also read the latest incarnation of "Cool Careers for Dummies" and found it to be one of the best books I read this year. Keep up the good work.

 

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