Guest Post - Don’t make these mistakes when networking

Young entrepreneurs try especially hard to become the next big thing, often failing at the first hurdle. However, only those with true entrepreneurial spirit have the ability to brush themselves down again and face the pitfalls, and learn from their mistakes. If your ego can’t take this, then maybe have a look at what you want from a career.

Effective networking is not hard if you can get the fundamentals correct. Dress smart and be smart, remember that you are doing this to meet new people. Do not get this confused with a sales pitch; if you can successfully build up relationships with people then you will eventually be in a position where the sales will come in naturally from your charm and personality.

Forcing your business card down people’s necks is never a good move. In fact the truth of the matter is, the more you give out then the less credible you could look. If you are tactful with whom you give your cards to then they will become more valuable as you know someone wants to keep in touch. This is not to say don’t give out your business cards, far from it, as these are calling cards that will be a necessity to building up contacts but don’t just provide them to anyone and everyone. This brings me to my next point.

If you have contact details then use them, by not following up, you have effectively thrown away a potential relationship to someone who could be very useful to you in the future. Something that follows on from this question is why did you even go to the networking event in the first place? You must set time aside to make some form of communication with these people.

It is as much about them as it is about you. Relationships work two ways; you need to be able to have time to hear about them, their business and what they do as much as they need to put the time aside to listen to you. It’s also impossible to network if you are only willing to stay with the people that you came with, or already work with. Confidence may hold many people back here but, that said, being overconfident could come across as cocky and not do you any favours. If you can show that you are cool, calm and collected, then this will look good to employers and show that you can handle stressful situations really well.

I would always suggest being prepared for these events; don’t throw away easy contacts by making a fool of yourself or being overt or extravagant. Behaving in a professional manner will work wonders for you in the long run, hopefully opening up a world of opportunities and contacts who will be valuable assets for you in your future career.

This is a guest post by Matt Jones, who is currently working with Vistaprint who specialise in free business cards.

Investing in Podcasts

Today I listened to my first podcast.

Saying that now makes me feel like a father of four.  I used to be so aware of technology.  

I stumbled across one which by the sound of the title alone seemed like the most tediously-presented-public-broadcasting-possible yet probably something-which-actually-offered-sage-practical-advice - Marketplace Money from American Public Media, presented by Tess Vigeland.  

*Cough*

Within five seconds of turning it on my latter predictions all proved correct, and then some.  The content was informative, insightful and, at times, hilarious?  They had on one of my favorite American comedians, Michael Ian Black, reading from his new book, You're Not Doing It Right.  Somehow they made it work and I was treated with Black's brutally honest humour about his personal experience of becoming a BMW-owning d*****bag (unquote).

Among many other guests and segments was author Jane Hodges speaking about the emotional rationalisation some of us may go through when we choose to buy a home over renting, and the organisation's China Correspondent, Rob Schmitz (woah, this thing must be bigger than I thought), discussed why people in the PRC can react so openly when asked about how much money they make (compared to Westerners).

I was glued to it for the entire hour.

Listen to the whole thing here.

Saving vs. Less Debt

For the past twelve months I’ve been weighing the merits behind saving whilst I pay down my student loans versus throwing as much as I can at my outstanding balance and leaving my savings account to flat-line.  And when I say savings I am talking about long-term savings here (ie. retirement).  There may be a valid business case to save up for a car while you pay down debt (or even borrowing more to buy a car sooner). As we'll soon find out, you just need to be sure the return outweighs the cost.

So I think the easiest way to prove this is via Excel.  But first a few assumptions:

1. There are no tax benefits to saving money or paying down/holding debt.
2.  Inflation isn’t doing anything Zimbabwe’ish whilst you save in a different country/currency (or for all the economists in the room, purchasing power parity holds).
3. There is no value/life experience to be had from saving your money whilst clearing your debt.

That last point is an especially important one.  I could gain no personal benefit from learning the action of opening up - and depositing money into - a Lloyds 2% fixed-interest savings account.  On the other hand, there may be something to be had from learning how to properly invest in stocks or other securities (even if my performance was equivalent to that of a 2% savings account). 

Given the above, this is obviously quite a limited test – so please don’t rely on the outcome alone when making your investment decisions.

Alright, so let me put on my storytelling cape and hat in what will most likely be a god awful attempt to engage you in some compound interest magic. 

Simon and Garfunkel both just graduated Kent University’s masters programme in management studies.  They both came out with exactly the same amount of student debt - £60,000.  Fortunately however, after much perseverance, hard work and dedication, they got a job.  To the marvel of many.

After consulting with each other through the medium of song, they discovered that they would both be able to earmark the same amount of cash to pay down their debt (£10,000 per year).  But Simon’s friends told him he was better than that; he could do much better if he abandoned the plan and saved some of that cash instead.  Garfunkel was not averse to saving; he just knew where his priorities lay.

Simon saved 25% of his allocated income and used the remaining 75% to make payments on his loans.  His debt had fixed interest of 4% and his savings 2% (see belief above).  In the end, it took him 10 years to pay off the bank.  When this was done he was sitting on a cushy £28,605.45 in savings.

Garfunkel stayed true to his heart and put 100% of his allocated income towards his loan.  Just like Simon, he paid the same rate of interest.  There’s no doubt that Garfunkel would, and did, pay off his debts first – three years sooner in fact.  And with his debt now paid off, he was free to place 100% of his allocated income into a 2% savings account.  By the time Simon had paid off his debt, Garfunkel was worth £30,632.70.

Even if Simon went on to place 100% of his allocated income into his savings, his net worth would never surpass that of Garfunkel's.  In fact, the gap between them continues to grow.

So that proves it.  Given a higher rate on my loan I should not save any money until it is paid down. Annoyingly cheesy and condescending way to arrive at that point I apologise.  But the fun doesn’t stop there.  Now we can discuss the other considerations not tested.

For instance, what about the rationale behind saving an emergency fund?  Assuming both of our singer-songwriters started off their working lives totally skint, Garfunkel took a risk not putting anything aside for a rainy day.

What about salary increases?  What about only being 20-something once?  Why save at all?  Why not live so far below your means, that you pay your debt off in two years instead of ten?

Personally, I hate having debt (woah!).  I think it is a necessary evil to take on debt in order to go down certain paths in life, but should be shed and avoided as much as possible thereafter and in every other circumstance.  I have a conservative emergency fund and everything else I can spare goes to my loan.  Otherwise I am borrowing to save (provided I cannot find an investment with a return larger than my debt’s interest).  

P.S.  Simon and Garfunkel are sweet.

The Reverse Time Value of Letting it Ride and the Risk-Reward ratio on Speaking Up: Practical Examples

6 Months Ago... I was happy.  Happy that someone had finally given me a chance.  Happy that I had a home.  I was Over the moon.  My mother was proud.

5 Months Ago... I was clueless.  There was just so much to learn.  I was scrambling against the curve.  Making juvenile mistakes at every bend.  And my colleague was being a pain in the ass about it.

4 Months Ago... I was insecure.  Doubting where I had put myself.  Would I enjoy this?  How did I end up here?  Where would I go?  Who would I become?

3 Months Ago... I was depressed.  I couldn't even lie to myself anymore.  I had no passion here.  It had become a job.  Not a career.  But where would I go?

2 Months Ago... I stuck my head out.  People around the office were talking about something I had an interest in.  And I made it known that I wanted to be a part of it.

1 Month Ago... I helped convince our risk-loving CEO that we drastically needed to hedge our FX exposure.  He gave me permission to purchase $160,000,000 in call options.  The largest single hedge ever taken out in the company's 20-year history.

2 Weeks Ago... I could have saved the company $450,000 if they had taken my advice.  Instead they paid someone else for theirs, and lost it.

Today our CFO told me that I'd go far.

A lot can happen in six months.

Week #1: Add Men

Few times in life does one get to walk through a set of revolving doors, approach an attractive young woman behind a desk and say, "Good morning, my name's Mr. New Guy, and I start work today on the 10th floor."

Few is probably an overstatement, and for that I am grateful to be here.

I'm not going to lie, my preparation for this day didn't involve much. I watched three episodes of The Office, and eight of Mad Men. I had feared that this might not be enough to prepare me for the highly provocative and often outrageous world of investment accountancy, but here I am. In one piece. Without the loss of my morals, or my dignity.

But there's always the week to come for that.

Having been at the office for so short a time, I can't really comment on what I think of it. I look forward to going in on Monday morning, so there's that. But I think it'll be at least a few more months, perhaps a year before I know if this is the right place for me. But then again, I've always said that anything is what you make of it. So there's that.

I can tell you what I think of London though. It's definitely made an impression on me. Probably best to illustrate with an anecdote.

Time: 7:57am
Location: Random market near Paddington Station

TNG: "Excuse me, could I buy an apple please?"

Old Lady looks up at me, wiping her nose on a tissue.

TNG: "If, your open..."

Old Lady: "You know very well I can't do that!"

TNG: "Sorry?"

Old Lady: "You know very well I can't do that!!"

TNG: "Um.. okay.. no sorry I didn't know very well, I'm not from around here."

Old Lady: "Do you have a pound?!"

TNG: "It's okay, I'll go somewhere else."

Old Lady: "Do you have a pound?!!"

TNG: "That's quite alright, I'll just go to that Tesco Express right there that's trying to put you out of business."

I proceed to the supermarket, but figure there has to be a vendor here somewhere that wants my business, so go to the one literally on the curb outside Tesco. Guy sells me an apple no trouble. I thank him for the apple, and his niceness.

I walk down the street finding a place to sit, wash my delicious looking breakfast, and take a bite. Rotten.

I love this city already!

Rejection #2: Ernst & Young

Disclaimer:

The following may upset the company mentioned, but what haven't I done on this blog already that could potentially put me on their noughty-list (hah... see what I did there?). Obviously, I do not endorse using my answers on your own application. That would just be stupid.

I should also say that I am not bitter that these companies rejected me. They are just doing what they have to do. These posts are strictly for entertainment purposes only.

To protect the identities of people, places, some organisations and myself, some information may be changed or removed. Of course, if the named-company wanted to find out who I was, it would be no problem at all.

To that I say, I don't care.

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What factors have motivated you to apply to Ernst & Young?


What attracts me to working with Ernst & Young is that the company offers me a number of job aspects that I deeply value. Most notably:

• The opportunity to be working face to face with clients in different business environments. I pride myself on my ability to harness and build strong relationships, both in my personal and working life.
• The chance to study alongside my career and gain an ACCA qualification.
• And finally, being a highly ambitious and competitive person, the offer for successful personnel to be put on an accelerated development programme. I plan to enrol on the ALP.

What is your motivation for applying to a role in Restructuring?

Considering the work I have done, and the lessons learned, I believe I would be a great fit for a role in Restructuring. With a first-class degree in Hard Work & No Family Contacts, I come forth with a wide range of knowledge and skills most beneficial to understanding today’s global business environment. This is supported by an array of completed academic projects involving companies facing adversity in their line of business. I have written and presented on past and present global giants, such as Bear Stearns, Vodafone, and GlaxoSmithKline. And I have competed against other students in a team-based business simulation game, making decisions for our firm and researching solutions to real-world management issues. The details for all of which are expanded upon within my CV.

What is it that interests you in the Business Trainee role?

I am very keen on learning about the obstacles that face companies in the course of business, and how these obstacles can be overcome. And I am particularly attracted to the prospect of getting to work with a variety of different businesses across varying industries. Being able to look at a struggling company and turn it into a viable one is an extremely valuable skill to have, and one in which I would very much like to acquire. I require diversity in a career and see the Business Trainee role as offering this.

What is your understanding of the work undertaken by the Restructuring team?

It is to my understanding that restructuring is primarily concerned with turning distressed companies into stable-run businesses. This can be achieved in a variety of ways but relies heavily on assessing the firm's working capital requirements, liquidity, and credit. Where inefficiencies can be found, efficient solutions are proposed. Also, it would seem useful for a company facing a strong likelihood of acquisition or merger, to employ a restructuring team to look for ways it can prepare the company so that it receives the best possible price for its shareholders. This can include eliminating or trimming divisions where no economies of scale would be realized by the bidder. And in the process, placing emphasis on the parts of the company that made it an attractive target to begin with, therefore making it more valuable.

Can you tell us of any events that have happened recently that would fall under the remit of the Restructuring team?

I imagine that the poor trading conditions facing the travel industry has seen a lot of companies bring in restructuring teams to seek out ways to protect themselves from becoming insolvent. However, regarding UK tour operators, these companies have little in the form of assets to move around, which has seen numerous firms collapse over the past year (WSJ, 2010). It is also likely that British Airways has been seeking much advice on the structure of its company after numerous labour disputes have caused profits to drop (Daily Mail, 2010). And we cannot forget the collapses, bailouts and buyouts in the financial services industry, which would have seen much activity in the way of restructuring in order to appease the various stakeholders involved.

References:
http://online.wsj.com/article/BT-CO-20100818-707463.html
http://www.dailymail.co.uk/money/article-1299081/BA-black-year-announces-164m-loss.html?ito=feeds-newsxml

What are your long-term career objectives?

Within ten years, my goal is to be in a management position in the financial services sector. Within twenty years, my goal is to be in an executive position in any company that interests me, but to preferably remain in financial services. And before I retire, my ambition is to make it onto the board of the company I most enjoy working with.

Do you actually read the Daily Mail?

Not a chance.

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I submitted this application mid-September 2010. To this day I have not received any sort of response. Thanks for your consideration, E&Y! Sound company.

What Next

Well this one is very hard for me to write about. I have thought about it repeatedly for a few weeks now, but I had trouble finding the right words.

Those few weeks back I received a phone-call. A phone-call I always thought might come, but in what way, shape or form I knew nothing of. It still does not feel real.

Today I received an envelope; an envelope that contained a lot of information. Information I have been looking for, for quite some time now.  What was inside made clear to me a number of things.  Among them: what I would do, who I would report to, what I would study, where I should turn up, what I would take home. But most importantly it told me what was next. Something I have thought about my entire life. Something I have been asked about my entire life. What next?

Next, I become an Investment Accountant.

Signed & dated,

The Noughty Graduate
10.02.2011