Thursday, March 13, 2008

success means courage of your convictions and your moneytree

Success Secrets from Mike Wallace, Mary Higgins Clark, J.K. Rowling and More

Dyan Machan ow did Mike Wallace of 60 Minutes become TV's most celebrated investigative reporter? How did Mary Higgins Clark become one of the world's highest-paid writers? How did Diane von Furstenberg come to head a multimillion-dollar fashion empire? Certainly they all have talent, but plenty of talented people never reach the top. Talent leads to extraordinary success only when it is paired with smart decision making. As J.K. Rowling wrote in Harry Potter and the Chamber of Secrets (Scholastic), "It is our choices... that show what we truly are, far more than our abilities."

How do successful people make the right choices and manage to see things through? By doing the following...

1. Get more credit for accomplishments. We might get a bonus or a promotion for an idea that makes our employer money, but most of the spoils go to the company. Capturing a significant share of those gains for ourselves can mean the difference between a solid career and a hugely successful one.
Example: Michael Flatley, star of the hit Irish step-dancing show Riverdance, left in 1995 to start his own show, Lord of the Dance. He had seen the money other people were making from his dancing and risked his savings to make those profits his. He gives his net worth now as close to half a billion dollars.

2. Stand out from the pack. Doing what everyone else is doing rarely leads to extraordinary success.

Making the leap from talented to spectacularly successful often involves a decision to take the untrodden road.
Example: Shoe designer Kenneth Cole spent his entire advertising budget for 1986 on an ad about AIDS that ran on billboards and in 23 magazines. His advisers warned him that it could kill his company to be associated with the disease. Instead, the ad campaign generated so much buzz that it helped him stand out in the crowded shoe market.

3. Discover what is really important. Sometimes a crisis or tragedy can force us to reevaluate our lives.
Example: In the 1950s and early 1960s, Mike Wallace made a good living reporting the news, hosting game shows and appearing in commercials. Only after his 19-year-old son, Peter, died in 1962 did he devote himself to investigative reporting. The tragedy convinced him to make a change despite the financial risks.

4. Find a role model for facing fear. Diane von Furstenberg, founder of a hugely successful clothing company, reminds herself that her mother survived a Nazi concentration camp. Compared with that, what is there to be afraid of in a career decision?
Successful people tend to understand that it isn't our failures we'll regret at the end of our lives -- it's the opportunities we let slip away.
Example: Drew Nieporent, founding chef of famed New York restaurant Nobu, learned to take risks because his parents could not. His father talked for years about buying New York City real estate but was too scared to take the plunge. His indecision cost him millions of dollars in potential profits. Nieporent decided that when he had an idea he believed in, he would act.

5. Know what's worth the risk for you. Successful people don't always know that their crucial decisions will work out when they make them, but they are willing to take the risks to pursue their dreams.
Example: Singer Sting had a burning desire to be a musician, so he left a secure job with Inland Revenue (England's IRS) for a job as a teacher. The shorter hours gave him time to pursue his music.

6. Remember, there are second chances. The old saying about opportunity knocking only once isn't always correct. If we work hard and interact with a wide circle of people, we might get multiple shots at making life-changing decisions.
Example: Mystery writer Mary Higgins Clark's first book, a biographical novel about George Washington, was a commercial disaster. She determined that thrillers sold better and got back to work. She now makes more than $12 million per book.

Bottom Line/Personal interviewed Dyan Machan, an award-winning financial journalist, based in Ridgewood, New Jersey. She is researching a forthcoming book about decision-making.

How to Get Cash in a Flash your money tree
Madeline Noveck, CFP
Novos Planning Associates, Inc. uppose life throws you a curve ball and you need money fast. Where can you get the cash? Options -- and traps to watch out for...

1. Ask your employer for an advance. The terms may be informal or written as a promissory note. This option works best when the need for immediate cash is very small and the boss is approachable.
2. Borrow from your relatives. This quick fix comes with emotional potholes. If you don't repay the money, there may be resentment from the lender, as well as from other relatives who may feel slighted or jealous.
What to do: Use a formal promissory note stating the interest rate and repayment terms.
Trap: Without such a written note, the IRS may bar the lender from writing off a bad loan on grounds that it was a gift.
Caution: Such a loan doesn't have to bear interest. But if it does, the lender must report that interest as income. If the loan exceeds $10,000, and the interest is below the applicable federal rate (AFR) -- currently just under 5% -- the lender must report not only the actual interest, if any, but also the "imputed interest," which is the difference between the actual interest and the AFR.
More information: At the IRS Web site,, type "applicable federal rate" into the search box.
3. Borrow from your 401(k). If your plan allows it, under federal law, you can borrow up to 50% of your vested account balance or $50,000, whichever is less. You usually have up to five years to repay the loan.
Advantages: You can't be rejected for the loan -- you may only need to make a phone call to the plan administrator or complete a short loan form... the interest rate, set by the plan, will be relatively low -- usually a couple of points above the prime rate, currently 6% (this is low compared with credit card rates, which can be up to 25%). The interest you pay goes back into the account.
Disadvantages: The money borrowed diminishes what could be saved for retirement... if you leave the company before repaying the loan, you must pay it back -- any outstanding balance will otherwise be treated as a taxable distribution (and subject to a 10% penalty if you're under age 59½).
4. Tap your IRA. Pledging an IRA as collateral for a loan or "borrowing" from it is treated as a taxable distribution (subject to a 10% penalty if you're under age 59½). But you can use money from your IRA for 60 days, tax and penalty free.
Big danger: You must replace (redeposit) the money in any of your IRA accounts within 60 days, or pay tax on it. Whatever isn't put back becomes taxable as ordinary income.
Caution: You can make only one such withdrawal/redeposit, called a rollover, within a one-year period.
5. Borrow against your life insurance policy. If you have a cash-value life insurance policy (whole or universal life), you can borrow against the amount accumulated in your account. Just call your insurance agent or insurance company to receive a check within 48 hours to two weeks.
Borrowing limit: The cash value in the policy.
In today's market, the annual interest rate on such a loan is about 7%, but many companies will reduce the dividends they credit to your account for as long as you have the loan -- in effect, upping the interest rate. Usually, you can repay funds when and to the extent you choose, but if payments don't at least cover interest, the cash value of your policy continues to be further depleted because the interest not paid is subtracted from the cash value.
6. Use a margin account. Margin borrowing allows you to leverage securities you hold at a brokerage firm to access a convenient line of credit -- using checks issued by the firm to access your line or by receiving a broker's check (often the same day you ask for it). You can even have the funds wired to your bank account. All you need to do for this kind of borrowing is sign a margin account agreement.
Limit: 50% of the current market value of a stock... 90% for Treasury and agency bonds... 70% for corporate bonds... and 60% for municipal bonds. Some securities (e.g., equities trading below $3 a share) are excluded.
Interest rates, which are based on the broker call rate (the broker's cost of money), vary and the more you borrow, the lower the interest rate.
Example: Fidelity's rate for borrowing less than $10,000 is currently 11.075%, but borrowing $500,000 or more has a 6% rate.
Note: Interest on margin accounts may be tax deductible as investment interest by those who itemize deductions. You must use the money to buy or carry investments, and you must have investment income at least equal to the investment interest. You must also not be borrowing against tax-exempt securities.
Caution: If the value of the securities falls below a certain level while your loan is outstanding, you'll get a margin call -- a demand from a broker to provide money or securities to bring the value of the account back to the required level. You'll have to sell some of your holdings to cover the shortfall if you don't find other money to pay down the margin debt.
7. Get a home-equity line of credit (HELOC). Your bank will approve you for a specific amount of credit. Many lenders set the limit on a HELOC by taking a percentage of a home's appraised value and subtracting the balance on the existing mortgage, if any. The process can take a week or more to arrange, but once the line is in place, you can write checks against it.
HELOCs typically use variable interest rates based on the prime rate (current HELOC rates are around 7.5%). Look for a lender that will waive all costs of establishing the loan, such as an application fee, an appraisal fee and closing costs.

8. Take a cash advance from a credit card.
Drawbacks: Very high interest rates -- rates for advances typically range from 20% to 25%, in contrast to the average rate on credit card purchases of around 16% to 17%. In addition, cash advances usually carry an up-front fee of 2% to 4% of the amount advanced.
9. Borrow from a pawnshop. Pawnshops are in the business of making short-term, small-money loans, with personal items used as collateral. A pawnbroker will appraise your jewelry, small appliances, musical instruments or other items and typically lend 50% of the retail value. Interest rates and fees for these loans are state regulated, but the term of the loan is usually 30 days to several months and the fees are generally high.
Example: New York pawnbrokers have a collateral loan period of four months, and the interest rate is 4% a month, which means an annual percentage rate (APR) of 48%. There may also be a service charge -- the maximum charge for loans between $50 and $100 is $3 (loans above $100 are $5). If you don't pay back on time, your collateral can be sold.
10. Take a "payday" loan. If your employer won't give you a wage advance, consider a payday or "fast cash" loan.
These loans (offered at payday loan stores and at such sites as, and are popular because they're easy and quick to arrange -- you can get funds in as little as one hour.
These loans don't require a credit check -- they're based on just a few criteria, such as the applicant's monthly wages (usually a minimum of $1,000). The maximum loan amount is between $500 and $1,500, and the loans are for short periods, usually one to four weeks.
These loans are pricey -- finance costs (fees) run from $25 to $45, regardless of the size of the loan. Sounds reasonable? It's not. Charging $45 for a two-week loan is the equivalent of $1,170 for a year. If you borrowed $300, that's an APR of 390%!

Bottom Line/Retirement interviewed Madeline Noveck, CFP, president, Novos Planning Associates, Inc., a financial planning and investment company, 28 W. 44 St., New York City 10036, and a past president of the Institute of Certified Financial Planners (now the Financial Planning Association).

Tuesday, March 11, 2008

make stress work for you

on How Stress Can Help You

Americans are stressing out as never before. Last year, a survey of 1,848 people by the American Psychological Association found that a disturbing 70% of respondents reported having physical and psychological symptoms of stress. But the survey also had some good news -- 60% of those polled said they would be motivated to change, including learning to manage stress more effectively, in order to feel better. With that encouraging news in mind, I called life coach and frequent Daily Health News contributor, Lauren Zander of the HandelGroup ( for her unique advice on managing stress.

First, Lauren says, it is important to understand what stress really is. Sometimes stress comes from painful circumstances, like illness or loss of someone dear, that only time can heal. But there are loads of other potential stress triggers, from unpaid mortgages to difficult relationships or health problems, that you can do something about. These circumstances themselves do not create stress. Rather the stress results from how you respond to them. "Stress comes from wishing something were different and the worry that you cannot change it, which leads you to feel stuck," says Lauren. You feel upset, you feel helpless and the result is you feel "stressed."
However, Lauren doesn't believe we should always view stress as negative. She views it as a natural outcome of an increased desire for a better life. "We live in a smarter world today," she says, "and our agenda now is to do well for ourselves." Stress symptoms can serve as an invaluable ally to help people achieve a better life. They are an informing voice that tells us it's "time to do something" -- if we try to ignore the voice, it gets louder and more insistent. Lauren teaches her clients to make stress work for them, instead of against them. How? First step is learning to accept it as a positive force and motivator... kind of like a wake-up call or feedback from a good friend.

Given that stress is a call to action, it is critical to investigate the nature of life stressors to decide what the appropriate action should be. There are two levels of stressors... the first, Type 1, belongs in what Lauren calls the "to-do" world. This incorporates bills, appointments, arrangements and the many other tasks that involve making and spending money and managing life as a grown-up. Although people moan and complain about the frustrations of handling these aspects of their lives, Lauren points out that in the to-do world there are always solutions. You may not love the solutions -- for example having to rein in spending habits to live within a compromised income, or disappoint someone by saying no to an invitation -- but they are there for you to find and implement.

Type 2 stressors, though, include the ones few people talk about... they are the "scary" ones in the world of emotion, says Lauren. Fear fuels many of these stressors -- fear that underneath it all you aren't capable... or lovable... or that your marriage is no longer working... or that you aren't attractive enough... or that you will get a terrible illness. The list of hidden stressors in the emotional world is long and complex, but this is where stress can be used to make life better, as we shall see.
If you feel stress because you've gained 15 pounds and don't feel sexy, that's a call to action -- but if you weigh the same as always and still feel undesirable, it's different. This feeling deserves a confession. You can "tell on yourself" to your husband or a friend, which is how to get what you need to feel better, such as a hug or a compliment, a "you're crazy, you have the best body and I love it!" Personally, I use funny consequences for "bad mind habits." When an inner dialogue causes stress, I charge myself a dollar if I dwell in those negative stressful thoughts longer than 30 seconds... and it stops me dead in my tracks. My "no harping" rules keep me from adding stressful thoughts and feelings to my life.

You can learn to view your worries as an alert to take an action to feel better. When you actually go to the gym, make the phone call you've been putting off, or pay the bill that's weighing you down, you will feel calmer. You will have heard what the stress is telling you and responded to it. It is only when you don't take such an action that stress continues to build. This is how your body and mind communicates about what is not working well in your life.

Once you recognize these two types of stress, it becomes feasible to take control of them on both levels. Here are Lauren's recommendations for doing that:
Start observing your crazy-makers, the things that annoy or irritate you. It may be easiest to make a list. Most, if not all of these are truly insignificant -- small stuff such as traffic or long lines. Stressing about them is useless. One way to eliminate the stress of crazy-makers is to alter whatever you can in your schedule or arrangements to decrease what annoys you so much. Leave earlier to escape heavy traffic, take care of errands on off-hours whenever possible... don't say yes to social invitations you don't really want to attend... that kind of thing. Changes like this will help, but a shift in attitude about them will likely help even more. Deflate the stress by refusing to take these situations so seriously or accept demands as "required" and you will see that their upset-quotient begins to diminish.
Write out the list of your responsibilities that fall somewhere between Type 1 and Type 2 stressors. These are in the "to-do" world and therefore, have "to-do" ways to solve them. Start with those that most distress you, but include them all. Big to-dos such as paying off debts or dealing with a difficult medical diagnosis for you or a loved one can seem especially difficult and overwhelming. Cull through the list slowly and carefully and come up with ways you can address these problems. Ask for help if you need it and consider the value of hiring someone when appropriate. For instance, if you have no time to clean your house, hiring someone will cost money of course, but it may pay dividends for you in time, positive energy and orderly surroundings.

The next challenge is the big one -- to take on the Type 2 stressors directly. Write out what you would like to change about you and your life. Oftentimes these desires live just under the surface as unconscious wishes and exist as stress because you are frustrated or unhappy with your current situation. The act of writing them out makes them conscious and gives you the means to evaluate their content. Your wishes might include a different career, living in another city, being nicer, thinner, or maybe more athletic. A good deal of your stress, though, may come from factors you cannot possibly change -- wanting to be young again, say -- or can't change now, such as moving. In those cases Lauren says a shift in attitude is mandatory. Pining away for something you cannot have -- ever or for the time being -- only heightens stress. It may feel hard to do this at first, but here is how you make such an attitude shift -- tell yourself that this is the way it is, just like some days its raining when you wish it was sunny. You can't control it, so you accept it. Once you accept the fact of your situation, realize that you are capable of living with it. Tough, yes, but you can do it... which leaves you free to move on to the stressors you can do something about now, and put this in the category of "later."

Now decide what life changes on your list you consider important enough to tackle... and gather ideas about how to achieve some solution. You may even find that among these are ways to address even the seemingly impossible ones. Let's say you wish your mate didn't have a serious disease, Parkinson's for instance, but you have accepted that you can't change the diagnosis. What can you do? Find activities that you and your partner can continue to participate in together, in spite of his/her disease. But remember, select just one or two areas to start with and take baby steps toward your goal. You will see that even small changes here and there bring you to a place where you do indeed feel better, says Lauren, and that you are not so stuck after all.

Stress will never go away. "It's called being alive," says Lauren. Once you see it as a necessary and useful tool to make life better, stress becomes your friendly messenger, an ever-present well of energy for you to draw from.