A PLACE TO LEARN THE BASICS OF FINANCIAL MANAGEMENT – BY WOMEN FOR WOMEN

Posts tagged ‘women friends’

Personal Legend

I am in a book club. There are a lot of great things about this book club. First, there are only seven of us in the club and we are learning a lot about each other.  We are a collection of women with differing views on lots of things; but we agree to be open to learning and accept that it is OK to disagree. We all do agree that being in book club expands our reading list to include books we might not have considered before, or even knew existed. I should mention that we live in the Port Isabel/South Padre Island, Texas, area which is on the Gulf of Mexico. Several of the group members have homes on the bay or live on the “island”. The scenery we experience while discussing books is pretty spectacular. We indulge in food and beverages (including adult beverages) which relate to the book.  On occasion a book doesn’t have much of a food theme or even much mention of food, so we freelance and use it as an excuse to make margaritas or have a bottle of wine.

The book we read and discussed this month is The Alchemist by Paulo Coelho. I had never heard of this book, even though it was published 10 years ago. Maybe I wasn’t keeping up on international authors, Paulo Coelho is from Brazil. Perhaps the title made me think of some science project and I don’t find it easy to wrap my brain around chemistry. Whatever the reason, I have now discovered the Alchemist with its spiritual tale of Personal Legends, challenges, hope, perseverance, love, and life. You may ask, what does this book and the concept of a Personal Legend have to do with a blog about financial freedom.  I say everything!

How we live and create our lives spiritually, professionally, financially, and with our family and friends is part of our Personal Legend. It is easy to think of great leaders and public figures as having Personal Legends. For example, when we think of Abraham Lincoln, we see his Personal Legend as changing the United States in a profound and long-lasting way. Well, we all aren’t going to be like Abraham Lincoln, but we do have the opportunity to create our lives and our Personal Legends.

I see a Personal Legend as a clever and profound way of describing an individual’s values, goals, and dreams.  It seems stronger, clearer, and more forceful than talking about destiny.

So what does this have to do with financial management?   A Personal Legend is a key component of a financial life.

The first question I would ask a person when meeting with her or him about finances was “What are your goals and dreams”? I didn’t ask how much money she or he earned, how much is spent, occupation, or credit card debt amounts, and other traditional financial information. The answers to those questions are part of the picture, but tend to reflect where a person has been or may be at the moment.

To some, goals and dreams seem like flakey esoteric terms. Ideally they are the first part of financial management.  Paulo Coelho reminds us that “… wherever your heart is, that is where you will find your treasure”.  The term treasure reaches beyond just the traditional capitalist view of something of intrinsic value.  Understanding what is valuable, or a treasure, differs from person to person. This means the traditional text-book financial management practices may not work for everyone.  Some people value stability over adventure, others value control of their time over big paychecks, while many value material goods over long-term financial security.

I have met people who value their faith above personal comfort, others who place more value on caring for family members than on their own needs, and some who could live a “big lifestyle”  but choose to give money to those in need. On occasion, I encountered those who treasured money as a symbol of success, power, or status.  These are just a few of the value choices, or treasures, which become the foundation of a Personal Legend.

A person who invests in understanding what is important on a personal level can then make conscious decisions to use his or her resources consistent with his or her values, goals and dreams.  This can be tricky in a world which constantly markets an overwhelming number of consumer products and services which promise to fulfill our dreams.  That is why I see a relationship between a Personal Legend and personal financial management.  They fit together.  Through his writing in The Alchemist, Paulo Coelho tells a wonderful story and subtly pushes the reader to thinking about her or his Personal Legend.  Nice!

Until next time.

Debra Hadsall

 

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Saving and Investing, Part II

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This is my $167 beer mug. I didn’t pay that amount to purchase it, but this is all remains from an investment two of my friends and I made during the mid-1990s. So, I think of it as an expensive piece of glassware. It also was part of a great learning experience and fun time we all had together.

Previously I wrote about how two of my women friends and I saved money each payday so we could take a trip or do something fun together, like going to a luxury spa. This was clearly saving, putting money in the credit union in a savings account. The money was not growing much, it was just accumulating. It wasn’t at risk of shrinking either. Plain old savings and it worked for us. Over time we spent most of it, but one time we had an extra $500 in the account and no plans for it. This time we were looking for something different to experience together and we opened our minds to a new opportunity.

Our adventure started with an ad in the Denver newspaper. A new brewing company was starting up and they were looking for investors from the general public. We read the information and became interested! Small brewers and brew pubs were becoming popular (and profitable) in several parts of the country, including Denver. The one we were familiar with was Wynkoop Brewing Company Brew Pub which is still operating today. It was created by some entrepreneurial folks who had the vision to see downtown Denver as it could be, a thriving social center. One of them was John Hiickenlooper who went on to be the mayor of Denver and is now the Governor of Colorado.

We also liked adult beverages. I was really the only beer drinker in our small group, but the others could definitely see how a specialty beer was a potentially profitable product. Most importantly, the initial investment was very small. We read all the paperwork, signed on the dotted line, submitted our $500 check and we were in. Yes, there may have been a little interest, and maybe even grumbling from our spouses, but it wasn’t money we needed for necessities or retirement. Our loss potential was only $500 and our lives would go on as before if we lost it all, so we weren’t worried. We were, however, optimistic that we would make a little money.

So we had done our due diligence. The company seemed legitimate and over time we could see it was a real business. The product was marketable, the business model had been tried, downtown Denver was growing rapidly, we could see other companies who had been successful with similar products, and the timing seemed good. We also were very clear about our goals for this investment. We accepted that it was a very risky investment. We agreed to accept the reality that we could lose the entire amount. There would be no blaming or “what ifs”. If we made money, fine. If not, we at least tried.

Things were pretty exciting. As the beer mug says, we were founders. We received updates on the progress of the business. We were invited to downtown Denver to the building where the business was located. We had lots of free and delicious food. Most importantly, we were provided lots of free beer to sample. This was better than going to a restaurant or a bar and we were treated like very important people. That $500 was beginning to look like a good deal. There was such fun, energy, and excitement all around us. There was another event which must have been the ribbon cutting. The press was there, founders were there, and the governor dropped by for the festivities. Things were looking good.

Then…silence. We didn’t hear much, but we didn’t worry. We were busy with our lives. We knew that businesses take time to grow and evolve. We figured it was normal to have a period of silence. In retrospect, it was not so normal for a growing business, normal for one which was struggling.

I don’t recall the details, but there were media reports that weren’t so great, and then probably some communication from the company where we learned the business was in trouble. Then the dreaded letter came which told investors (founders) that the company had folded. As I remember, it was about timing and market saturation. Seemed like a case of too many brewers all at once trying to do the same thing, and not enough customers to support them. Whatever the cause, our money was gone and so was the warm fuzzy feeling we had experienced. One of the spouses asked optimistically, “well, can you write it off on your taxes”?

We had our own view of the situation. Those folks who started the business and worked so hard had our sympathy. We were out $500, but they had lost much more.

Our Mile High Brewing Company experiences enriched our friendship, helped us to meet new people, taught us more about business and investing, brought us in touch with the re-development of downtown Denver, and gave us the chance to be called “Founder”. The best part of the whole process was that we had so much fun together. Each of us always felt that the money we spent gave us a huge return on investment, just not in the way we expected it. We were clear about our goals and accepted the risk so we had no bad feelings. We were fond of saying that we had gotten our money’s worth in food, beer, adventure, and new experiences. Mile High Brewing was a subject of many subsequent happy hour conversations.

Later on, when we accumulated a little money, we made another investment. This time it was in a large publicly traded company. The brokerage paperwork was incredible for a small investment by three individuals. We persisted. This time each of us held equal shares of the company in our individual names. This investment made money since the company had split shares and had performed well. We felt redeemed! I remember being grateful for those stock certificates because I sold the stock to pay some licensing fees for my business.

When Lee, Lea, and I started our savings program and ventured into investing (outside of retirement investing which we already had in place), we could never have truly envisioned the good times we would experience, or the closeness of our friendship. Sometimes “girls just want to have fun” and we did. It just took a little goal settling, planning, persistence, and a sense of adventure.

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