Saturday, January 29, 2011

Optimism in the face of rejection


With all the doom and gloom in the news about the weak economy, high unemployment rate and entire states contemplating bankruptcy it’s no shock to anyone that now, is probably the most inopportune time to be looking for a job. In fact, nowadays getting one interview after sending out hundreds of resumes warrants treating yourself to a nice drink during happy hour. For the last few months I have been slowly trying to transition over from the world of number crunching to something more creative. Starting this blog last May was the first step and taking on copy writing gigs here and there, writing the occasional bio for a friend of a friend’s website was another. Having majored in English Literature for a little over a year back in college has left me forever fond of the written word. There are few talents I admire more than the ability to hold someone captive with just the words they put to paper.

One day, while looking through Craigslist for any job openings that had something to do with writing, I came across an ad that seemed like it was describing my dream job. It was for a Senior Copywriter and Editor position at a Business Public Relations Agency in Los Angeles. Part of the ad read like the following; “Looking for smart, creative news junkies who love to write and pitch stories.” I couldn’t believe what I was reading; I was smart…I thought to myself and a news junky? I’ve actually had friends call me that very same thing. I couldn’t send them my resume fast enough, there was a part of me that wanted to both email and fax my resume, but decided against it. I had to literally disguise my excitement in the cover letter I had included in the email as to not come off as too anxious or desperate. Then much to my surprise, I received a call the very next day from what sounded like a receptionist wanting to schedule an interview with me. “Be prepared to spend at least an hour with us, bring some writing samples and... there will be a writing test.” I spent the week leading up to the interview getting advice from close friends that I considered to be good writers or wrote for a living. I took a poll as to which one of my blog posts I should present as writing samples and even did a little practice Q&A with them to better prepare for an interview that I was already becoming very nervous about. The day of the interview I woke up earlier than usual to give myself plenty of time to calm my nerves and even listened to a saved voicemail from a close writer friend of mine for motivation. He was one of the first people that read my inaugural blog post and was very complimentary and encouraging. This guy was an author and an editor of a magazine at one point, if he liked my writing, then I must be doing something right.

By the time I finally arrived to the interview I felt like I had walked into a house that had been staged specifically to my own personal taste. There were plasma screen TV’s everywhere with news on every single one of them. Not only did I know what stations were on but I could identify most of the anchors by name as well. I had got there at 1:40 pm and my interview wasn’t until 2, but they met with me right away. First up was the Vice President of the company, who seemed to be the first line of defense. He asked me both typical and not so typical interview questions like “How do you think you would handle working on a story that wasn’t very interesting to you?” after about 45 minutes he led me to the President and founder’s office. I sat down and admired the view of Wilshire Blvd., eagerly waiting for her to finish a phone call she was on. So far so good I thought, he wouldn’t have had me meet with this woman had he not liked my answers. Once she got off the phone she too, looked over my resume briefly and commented on my experience and pulled up my blog’s URL on her laptop while she was still standing. She read a couple of passages out loud and even asked me about a picture of my dog that I had on one of my posts. She had nothing but good things to say and had to take another call, she politely told me to head back to the conference room where the remainder of the interview would take place. I then met with two junior associates of the agency, which was far more informal and casual than the previous meetings. In fact, the last two people I interviewed with were more conversational than they were anything else; one of the main topics at hand during my last meeting was the upcoming boxing fight between Manny Pacqaui and Antonio Margarito, things could not have gone better. The finale was the writing test I was dreading. The first person I met with came back into the room with a laptop and asked me to write a press release for the agency. The topic was, me being hired as their new Senior Copywriter. What a great topic, I said to myself; it was easier than I thought it would be. They gave me one hour to do it; I was done in about 40 minutes. By the time I left their office and got into my car, I realized that I had been there for almost 4 hours.

While I was driving home, I replayed every moment as if my mind had recorded a mental video of everything that had happened, every question, every answer and every reaction. At this point I knew that I was allowing myself to want this job too much, and as hard as I tried to keep things in perspective, it was too late. The very next day I sent a traditional hand written thank you card, thanking everyone that interviewed me by name and the day after that I got an email asking me for some business references. This stoked the fire even more and I gladly obliged. A few days later, I received a series of calls from each one of the references I submitted, one after the other each one telling me about all the wonderful things they had to say about me and how they thought I had this in the bag. My cautious optimism slowly started to transform into daydreaming. I began to put the cart before the horse. I started thinking about which clients I could keep and which ones I would have to let go. I thought about whom I could call to walk my dog in the event I had to work late; I started thinking about the best way to get to my new office without having to take on the dreaded 405 Freeway. I even started thinking of a good restaurant where I could take everyone who helped me prepare for the interview as a thank you. The position was scheduled to start in January, and all I could think of was “what a great way to start off the New Year”. Then as the days turned into weeks without hearing from the company, I began to get anxious. So I decided to send a follow up email, even though some of my friends told me not to, stating that it would make me seem desperate.

Truth be told I was desperate, I was desperate for a change, I was desperate to do something I loved, I was desperate for something to go my way. I sent an innocuous email, asking them how their Holidays were and reminded them that I was still interested in the position and whether or not they were able to contact my references, even though I knew they already had. And the reply I got 3 days later felt like a kick to the stomach to the likes of which I have never felt: “Hi Victor – Thanks for following up. We have filled the current position but would like to keep you in mind for the next opening as we continue to grow. You seemed to be a great fit and your references checked out fine. We simply had an opportunity to hire someone with more extensive media relations and PR experience. I’d like to stay in touch. If you haven’t heard from me or Tracy in six months, please feel free to follow up. Otherwise, I will let you know when we have another opening.” I was devastated when I first read it; in fact it’s still hard to read now. I felt like I had picked up my prom date in a fancy limo, gave her a lovely corsage showed her a great time and watched someone else take her home. It would take me a couple of days and a lot of encouragement from my dearest friends to get over the disappointment of coming so close to getting something I wanted so badly. “At least you got as far as you did and gained all that experience along the way” -one friend told me. “Hey, they didn’t have to tell you what they told you, there has to be a little truth in what they said about calling them back in 6 months”- another friend would say. As my deaf ears started to listen to reason again, I started to believe what my friends were telling me. Take what you’ve learned from this experience and apply to the next interview. At least I know what I want to do and what needs to be done in order to get there. It is possible to work on doing what you love while working to pay the bills and I am hopeful that one day the former will eventually turn into the latter. There is still plenty of time to make this year a great one. In the meantime, my writing has a home, albeit a humble abode, it is filled with character and characters alike with some of the best readers and followers anyone could ask for.

Sunday, January 23, 2011

A taxing time of the year.



With April 15th just around the corner, now is the time to begin the arduous process of gathering all of our financial information from 2010. This process varies for each individual from the highly organized, Excel spreadsheet, receipt- scanning person who finds joy in keeping stats at baseball games to those who stuff every imaginable piece of paper from their pockets into an overflowing shoe box full of movie tickets, post it notes, lint and the occasional receipt. Most of us, fall somewhere in the middle.

When it comes to getting our taxes done, if given the choice, most people would literally opt for going to the dentist for a root canal than having to deal with Uncle Sam. However a little organization and some guidance can make the looming deadline a lot less painful. Here are some tips and advice for the 3 main categories that represent the majority of working Americans.

The independent contractor or sole-proprietor:
Freelancers and consultants alike, these are people who are not on payroll and receive 1099’s as “non-employee” compensation for anything that exceeds $600. Independent contractors have the ability to write off a lot more expenses than someone who is solely an employee of a company such as:

• A percentage of the total square footage of your home office
• Business travel or mileage
• Phone usage/ cell or landline
• HSA plans or Medical Insurance
• Percentage of rent and utilities
• Certain qualified retirement plan contributions
• Work related equipment (i.e. computers, printers, software, etc.)

The business owner:
Anyone who has an incorporated company, whether it’s a C-corp, S-corp or LLC and has salaried employees. There are a myriad of deductions a business owner has. Here are the main ones to lookout for:

• Employees' Pay - You can generally deduct the pay you give your employees for the services they perform for your business.
• Interest - Business interest expense is an amount charged for the use of money you borrowed for business activities.
• Retirement Plans - Retirement plans are savings plans that offer you tax advantages to set aside money for your own, and your employees', retirement.
• Rent Expense - Rent is any amount you pay for the use of property you do not own. In general, you can deduct rent as an expense only if the rent is for property you use in your trade or business. If you have or will receive equity in or title to the property, the rent is not deductible.
• Taxes - You can deduct various federal, state, local, and foreign taxes directly attributable to your trade or business as business expenses.
• Insurance - Generally, you can deduct the ordinary and necessary cost of insurance as a business expense, if it is for your trade, business, or profession.
• Business-Related Education - Such as seminars, classes, educational tapes or CDs and conventions.

The W-2 employee:
W-2 employees are among those who have the least amount of deductions, but also have the most straightforward tax return. The biggest deciding factor as to whether an employee gets a refund or pays at the end of the year is the number of dependents the individual claims. This number can vary from 0 all the way to 10 or more. The less dependents you claim the more taxes get taken out of your paycheck, the more dependents you claim the more money you get to keep during the year. Here are what employees should focus on come tax time:

• If you own your home, the mortgage interest you pay will be one of your biggest write-offs.
• Mortgage interest from rental property
• Your actual dependents, which could be either your children who live with you and do not work or a retired parent or relative that you care for.
• 401k or 403b retirement plans
• Tithing or other charitable contributions
• Interest- from certain loans, such as school loans.

**Questions? Feel free to leave any questions you might have on getting your taxes done on the comment page below, and I will answer them to the best of my ability**

Sunday, January 16, 2011

Pressing the financial reset button: When bankruptcy becomes your only option.



This year may go on record as the one during which the recession officially ended. But the effects are clearly still being felt: More personal bankruptcies are projected to be filed since 2006; a year after new laws went into effect. And responsible consumers – people who pay their mortgage on time and save for retirement – are losing the most in the process. By the end of the year, more than 1.6 million people are expected to have filed for personal bankruptcy, according to the American Bankruptcy Institute. Almost 65% of filers chose “income reduction” as a reason for filing, while 42% listed “job loss” as a reason (debtors can choose more than one).

For those who have suffered job loss, have been hit hardest by the worst economic recession the U.S. has experienced in decades or for those who simply got in over their head and bit off more than they can chew: Bankruptcy is the only option they have to get their life back on track. I personally know clients and friends alike who have filed for bankruptcy in the last 2 years alone and have been far better off after doing so. I even accompanied a good friend of mine to their attorney’s office for moral support when they filed, and at one point I, myself considered it to be a very tempting option. Being deep into debt can have a very Sisyphean affect on your daily life. Each day you roll a bolder up a mountain of debt with the illusion of progress only to start all over again when a new month begins.

Before you decide to stop throwing good money after bad, you need to seek the professional advice of a Bankruptcy Attorney (most have flat rates and will take payments in installments) to see which chapter of bankruptcy is right for you and what assets you want to protect.

Chapter 7
Who it’s for: People who have no assets, like a home or car, to lose — or who have just enough to cover daily expenses (or less) but no extra for a payment plan.

How it works: Non-exempt assets are sold, proceeds are given to creditors and most debts are forgiven.

Chapter 13
Who it’s for: People who are trying to hold on to their assets and who also make enough money to cover daily expenses — with a little left over to pay creditors a reduced amount.

How it works: A payment plan is set up through the court, but usually for less than the amount owed. Payments are made over a three-to-five year period, and must equal at least the amount of money creditors would have received if you filed Chapter 7.

A home
Holding on to your home depends on the state you live in and the equity in your house. Florida residents can keep up to 160 acres outside of city limits and the home that’s on it, or up to half an acre and a home in cities. Texans can protect up to 200 acres of rural property or up to 10 acres in the city. And in general, if a home is worth less than the mortgage balance – that is, the owner has no equity – the owner can keep it as long as the payments stay current. For filers who do have equity, most states offer an exemption — money from the trustee’s sale of the home that stays with the homeowner. But over that amount, every penny of a sale is applied to outstanding debts and paying the trustee. In California, for example, the equity exemption is up to $175,000, but other states are far less generous: In Ohio, the state exemption for a home is up to around $45,600 if married or up to half that for singles. In Tennessee, the exemption is as much as $12,500 for singles and up to twice as much for couples.

Tax-exempt retirement funds
Most tax-exempt retirement funds, like 401(k)s and individual retirement accounts, are out of reach from creditors. IRAs are protected up to about $1.17 million per person.

Cars
Holding on to a car depends on several factors, including what’s covered by state exemption. In general, as with a house, owners who owe more than the value of the car can generally keep it, as long as payments stay current. Free-and-clear car owners can keep a car if it’s worth less than the state exemption, but drivers who have a car loan and some equity in their car can see their vehicle seized and sold, and recoup only their equity up to the exemption. Delaware and Nevada grant the most generous exemptions for cars, each up to around $15,000. In the 16 states that follow the federal exemptions, including Connecticut, New Jersey and Pennsylvania, the federal car exemption is up to about $3,450, but bankruptcy filers can also to dip into the federal “wild card” of up to roughly $12,000 to keep the vehicle. Married couples who jointly own the car can claim a federal exemption of up to $30,900. One of the strictest states is Florida, where the exemption is capped at $1,000 and there’s a wild card option of up to $2,000 per person, assuming the couple hasn’t claimed a homestead exemption.

Life insurance policy
Term insurance policies are safe after bankruptcy, but whole-life insurance policy holders aren’t always so lucky: These policies are considered an investment vehicle.
Depending on the state, there could be exemptions – Florida protects the entire policy, other states only protect a fraction. And in Ohio, life insurance policies remain intact when the beneficiary is a dependent; otherwise, there’s no exemption, and the state's wild card is around $1,075 per person.

College savings

The fate of the balance of a 529 plan depends on several factors. If a 529 plan is less than two years old, protection is limited to $5,000; creditors can take what’s been saved beyond that. The same mostly holds true for a Coverdell account. But after that two-year period, the plan is safe, as long as the person filing for bankruptcy is not the beneficiary; the account is not safe if the beneficiary is not the child or grandchild. If the filer is the beneficiary — for example, a 30-something with leftover college savings earmarked for grad school — trustees could cash out the 529 plan to pay creditors.

Filing for bankruptcy should be looked at as a last resort and not as a free pass. Regardless of which chapter you are filing for, a FICO credit score will take the same hit — a reduction of up to 240 points for a borrower with a score of 780 and a reduction of up to 150 points for a 680 scorer. Which means, anyone filing for bankruptcy will most likely spend the next 3-5 years rebuilding their credit, which can make qualifying for loans with low interest rates, credit cards and other financing next to impossible. You need to plan ahead and make sure that you do not need to finance anything before you file, or you can get someone to co-sign for car loans or rental lease agreements. Bankruptcy was designed to help people get off the financial treadmill and back onto solid ground, the number one lesson anyone should take away after filing “BK” is to not make the same mistakes again.

Tuesday, January 4, 2011

The upward mobility gap.

A great follow-up article to a previous post titled "Giving College The 3rd Degree" where I posed the question, is getting a college degree still worth it? According to Doyle McManus of the LA Times, college grads are not only on a different socio-economic class, but can be in a different world all together.

http://www.latimes.com/news/opinion/commentary/la-oe-mcmanus-twous-20110102,0,5332722.column

College-educated Americans live in a different country than high school dropouts. The best way to mend the divide is by providing access to a decent education.
By Doyle McManus

Here's a familiar fact: Economic inequality is rising in the United States. The rich have gotten richer, the poor have stayed poor, and families in the middle have seen their incomes stagnate.

Here's a less-familiar fact: Opportunity in America isn't what it used to be either. Among children born into low-income households, more than two-thirds grow up to earn a below-average income, and only 6% make it all the way up the ladder into the affluent top one-fifth of income earners, according to a study by economists at Washington's Brookings Institution.

We think of America as a land of opportunity, but other countries appear to offer more upward mobility. Children born into poverty in Canada, Britain, Germany or France have a statistically better chance of reaching the top than poor kids do in the United States.

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What's gone wrong? Thanks to globalization, the economy is producing high-income jobs for the educated and low-income jobs for the uneducated — but few middle-income jobs for workers with high school diplomas. Thanks to the decline of public schools, it's harder for poor kids to get a good education. And Harvard sociologist Robert Putnam argues that thanks partly to the rise of two-income households, intermarriage between rich and poor has declined, choking off another historical upward path for the underprivileged.

"We're becoming two societies, two Americas," Putnam told me recently. "There's a deepening class divide that shows up in many places. It's not just a matter of income. Education is becoming the key discriminant in American life. Family structure is part of it too."

Increasingly, college-educated Americans live in a different country from those who never made it out of high school. As a group, adults with college degrees have an unemployment rate of 5%, steady or rising incomes, relatively stable families (their divorce rate declined over the last 10 years) and few children out of wedlock. Adults without a high school education, by contrast, face an unemployment rate over 15%, declining incomes, a higher divorce rate and have lots of kids out of wedlock. (Among black women who didn't finish high school, 96% of childbirths are outside marriage; among white women who didn't finish high school, 43%.)

And those mutually reinforcing conditions tend to stick from generation to generation. That's nice for affluent kids but a bad break for the underprivileged.

"Success in life increasingly depends on how smart you were in choosing your parents," Putnam said. "And that flies in the face of the fundamental American bargain — that every kid ought to have access to the same opportunities."

Can anything improve this troubling picture? Actually, yes. If we focus on increasing opportunity for the poor, there's plenty that can be done — beginning with education.

Brookings economists Ron Haskins and Isabel Sawhill studied the noneconomic components of poverty and came up with a rule. "If young people do three things — graduate from high school, get a job, and get married and wait until they're 21 before having a baby — they have an almost 75% chance of making it into the middle class," Haskins said.

Think of it as a stool with three legs: jobs, family and education. Government programs can help strengthen all three.

But the availability of jobs now depends mostly on the pace of economic recovery; the Obama administration's already done most of what it can on that score. Government promotion of stable families is an elusive goal; President George W. Bush funded programs like "marriage education" to encourage low-income couples to marry, but it's hard to measure the results. (The one clear success story, Sawhill noted, has been a marked decline in teenage pregnancy, thanks to government-supported efforts in education and contraception; but 82% of teen pregnancies are still unplanned, so there's still more to be done.)

That leaves education, which is the most promising ground for government action, in part because most Americans agree that fixing public education is the government's responsibility. Haskins and Sawhill say there's still plenty that can be done to increase access to higher education for low-income kids, including relatively easy things such as simplifying the application for college financial aid, which is an intimidating 127 questions long.

But perhaps the most important thing the federal government can do to promote opportunity, they say, is to expand its current efforts to improve public schools. The focus, Haskins said, should be on giving low-income students "more order, more work and more recognition for achievement."

Education reform is already a bipartisan goal. Republicans support it as well as Democrats — incoming House Speaker John A. Boehner (R- Ohio) as well as President Obama. They will probably disagree over how much to spend and over how much federal direction to give state and local authorities. But overcoming those differences is a worthy challenge for this new year.

Most Americans accept inequality in the economy as long as the ladder of opportunity is accessible to anyone who wants to work hard. The best way for America to reclaim its self-image as a land of opportunity is to ensure that every kid has access to a decent education — now more than ever the first step onto the ladder. That's why bipartisan education reform isn't just about fixing schools; it's about repairing the fabric of American society.
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