Tuesday, June 30, 2009

Bare Naked Bucks--Prepared for Sudden Wealth?

Last week a number of young men have moved into an expected sudden wealth financial category based on their draft status with the NBA and NHL. While this is good news for them, it also comes with a number of strings attached.

Because these guys were expected to make big money, I am sure that tons of "lost" relatives have come calling. In addition, some of them will have collected best buds faster than Facebook friends.

What some of these people will not do is protect the long term investment. The average NBA career was just under 5 years. If we apply the average (mid level) exception salary for the past 5 years (2004-2008), we get about $26 million. HOWEVER, the NBA pays its stars very well and most players on a roster make LESS than the average salary. The more acccurate number to use is the MEDIAN salary. (You get this number by ranking the salaries from smallest to largest and stopping in the middle.) For this past season it was just above $3 million. If we assume that the median salary and the mean salary have grown in similar percentages over the past 5 years, then the median salary over an average 5 year career is actually $14,213,779.

Take the rookie scale for draft picks. In 2005, out of 30 first round draft picks that are given automatic raises annually, their first option year is the 3rd year of the contract. At that point, only the top 4 picks exceed the median. So 26 rookies are actually trying to get above the median on their 2nd contract, which many may never see as it comes after their 4th year in the league.

Anyhow, take that almost 3 mil/yr and subtract federal taxes (34%) and a standard agent commission (4%). We will skip over the variety of state and local tax possibilities and look at the average player as a person with $1,762,509 annually for 5 years. After that time it is likely that the salary will drop significantly for the remaining work years.

By the time the player gets a place to live and spreads some of that money around to the "friends & family" just how much will really be left to live on when you retire in your mid 20s?

To all my newly rich "friends" that were drafted, be careful with your money and don't collect an entourage...unless it is the DVD box set!

Wednesday, June 24, 2009

CSI - Lose my trust, lose my business?

On Saturday, I was convinced to stop by a fast food place that had a special deal. Fair disclosure requires me to say that I stop by fast food places about 10 times a week. What was different about this stop was the way they pulled their deal off the table.

I can live with a company getting overwhelmed by a deal or running out of an offer and making adjustments. The jury is still out on the long term effects of this oops as I wait for my KFC coupon. What I find amazing was that the other place pulled the Saturday deal and offered no alternatives. That makes me question your integrity. Once I am not sure that I can trust what you say, how can your advertising be anything but a waste of time and money. It's like that Lucy & Charlie Brown thing with the football.

When one of the little Unsorted Thinkers calls you out, you know that your organization has done wrong.

This leads me to the following simple suggestions from my customer service days.

  • If there is a special deal, make sure the staff know about it and how to process it in your POS system.

  • If you run into a problem, e.g. run out of the special--identify an alternative

  • Share the alternative with the staff...along with how to process it in the POS system.
It's really not that tricky.

Soon, we will touch on another CSI that came up at the same franchise (different shop.) It almost made my my jaw hit the floor because it was just that unbelievable. I will make an adjustment to some of my fast food patterns now that I know...I just cannot trust some places.

Sunday, June 14, 2009

How are you TAPped in?

Going back to the 1970s, families relied far less for technology than we do now. The big expense was the standard home phone with separate charges for local and long distance communications. Most families had no access to daily pay TV, mobile communications (phones & text messaging), internet access, or data transmission (fax, e-mail, VOIP, etc.)

Today, we all spend money on technology, but how does the expense fit into your planned use of technology? Even at the basic level of a home phone, people no longer lease the physical phone from the local phone company. You purchase your phone from somewhere. That phone may be wired or cordless; it could have an answering machine or not; it may use features like caller ID; it may have speed dialing features.

This weekend we officially shifted farther away from free TV. Digital television requires a converter box and antenna to get “free” channels. This change brought me to think about my technology action plan (TAP). While many may not think about their TAP, each person has one no matter how passive it might be.

Just in case you know someone that still needs help with the Digital TV conversion, you can find local assistance through this link.

Think about the technology that you actively use. What purpose does it serve for you? Have you compared it to the alternatives? Is it cost effective? How do these answers change for people in a larger family unit?

We will TAP in much more in the near future.

Sunday, June 7, 2009

A Toast to Dear Friends

Maybe I should have looked online before I was responsible for a wedding toast, but in truth--when I did my first, being on AOL was cutting edge. So much advice that I have never used. Fortunately, I think I stumbled into most of the right thing if this lady gives good advice.

I owed a couple a copy of a toast I did. Unfortunately, I don’t write these things down. Once the basic ideas are in place, I absorb a little from the environment and just flow. I'd say that is the warm & personal part. I don't do 5 minutes for a toast--that's a segment in a celebrity roast. While this isn’t exactly it, I’d call it a reasonable facsimile.

Some of us lead lives with lots of structure, like an elegant picture frame. Others have wonderful lives that possess a special, artistic originality. The lives they lead paint beautiful images. When we are fortunate enough to bring the two together, great things can happen. The frame gives a stabilizing influence to the picture. The portrait brings out the artistry that exists in the details of the frame.

Today, we honor and salute this couple.

Of course the names were omitted to protect the innocent. Just know that I think they are great folks.