Many financial experts highly recommend a household budget in order to keep family spending and savings goals on track. It makes sense that proper money management for a household is a necessity to ensure financial security for all family members. For those who do not yet have families, it is equally important to establish a budget to prepare for the future as well as survive day to day, especially when single individuals are just starting out on their own, financially independent from their parents.
Why Singles Need Budgets
Overspending income is the reason why so many people are facing debt problems. With a budget you can properly account for where all of your money goes on a weekly or monthly basis. Without a budget, it can be all too easy to spend cash as a single person because outside of basic financial obligations, there are likely no other responsibilities to tend to such as children who need things or spouse who should have a say in money matters.
As a single person without a budget, it is also easy to lose sight of the big picture. Spending what you earn as you earn it leaves little room for saving for the future or building a truly solid financial foundation.
How to Start a Single Person Budget
A budget is simple to get started. Sticking with the methods is what gets many people who end up ceasing their good financial habits. It makes sense to develop a simple budget that allows you to make simple entries that doesn’t waste time. A weekly review of a budget is all it really takes to ensure you are on target.
Developing a budget requires that you gather all of your financial obligations for a month including utility bills, credit card bills, mortgage or rental payments, and any other monthly expense paid out on a regular basis. You will also need to gather your income statements so you know how much you bring home each month.
These amounts along with the creditors who receive your monthly payment should then be listed on a personal budget worksheet. Once all of the information is entered, the total amount of expenses should be deducted from the total amount of income. If the difference is negative, it is a clear sign that you need to make cuts to your budget or find a way to earn more money. If there is an overage, the funds that are ‘left over’ each month should be allocated into a proper savings account for emergency situations, vacations, or retirement.
In addition to the compilation of expenses and income, single consumers should also take a solid month to track the money they are spending and where they are spending it. This is for all expenses outside of regular financial obligations, including coffee stops, dining out, and transportation-related expenses. By tracking every penny spent in a month’s time, you are able to develop a more accurate budgeting system and as a result, establish a much more solid and reliable financial foundation for the future.
This is a guest post by Tisha Tolar.
Kamis, 15 September 2011
Minggu, 11 September 2011
Understand Market Trend Before You Trade - NASDAQ and KLCI
If you have no idea what is stock at all, I suggest you read the following first: Stock Market 101: Understand How Stocks Get Started.
To be successful in stock investing, the first thing that you want to do is to analyze the entire stock market as whole and learn how the majority investors behave in the stock market. The stock market index is the indicator to tell you how the market moves. It represent everyone present in the market place. :D
I personally invest in US stock and Malaysia stock market. So 2 stock market indices that I"m interested are Nasdaq Composite Index and KLCI.. The following charts show the 1 year histrory trend.
KLCI - FTSE Bursa Malaysia Large 30 Index
KLCI comprises of 30 largest companies in Malaysia with approximately 70% of the total market capitalization of the FTSE Bursa Malaysia 100 Index.
Nasdaq Composite Index
Nasdaq Composite Index comprise of over 4000 innovative and fast growing technology companies in United States of America.
Note: What I like about this chart is when you click on it, it shows you the technical analysis of the chart. You can then perform the "Technical Analysis" on those chart. Basically technical analysis helps you to make investment decisions based on the study of charts rather than the stock fundamental. Interesting isn't it? But this is still something new to me but I will share with you more later on once I"m familiar with it. :)
What I don't like about this chart is only able to display up to 1 year trend. To view more than 1 year trend, you will have to use Yahoo Finance. But Yahoo doesn't have a way to embed the stock chart in a website or blog.If you know, feel free to share with me.
P/S: What about you? There are lot of stock market indices out there. Which market index do you refer?
To be successful in stock investing, the first thing that you want to do is to analyze the entire stock market as whole and learn how the majority investors behave in the stock market. The stock market index is the indicator to tell you how the market moves. It represent everyone present in the market place. :D
I personally invest in US stock and Malaysia stock market. So 2 stock market indices that I"m interested are Nasdaq Composite Index and KLCI.. The following charts show the 1 year histrory trend.
KLCI - FTSE Bursa Malaysia Large 30 Index
KLCI comprises of 30 largest companies in Malaysia with approximately 70% of the total market capitalization of the FTSE Bursa Malaysia 100 Index.
Nasdaq Composite Index
Nasdaq Composite Index comprise of over 4000 innovative and fast growing technology companies in United States of America.
Note: What I like about this chart is when you click on it, it shows you the technical analysis of the chart. You can then perform the "Technical Analysis" on those chart. Basically technical analysis helps you to make investment decisions based on the study of charts rather than the stock fundamental. Interesting isn't it? But this is still something new to me but I will share with you more later on once I"m familiar with it. :)
What I don't like about this chart is only able to display up to 1 year trend. To view more than 1 year trend, you will have to use Yahoo Finance. But Yahoo doesn't have a way to embed the stock chart in a website or blog.If you know, feel free to share with me.
P/S: What about you? There are lot of stock market indices out there. Which market index do you refer?
Minggu, 21 Agustus 2011
4 Steps to Set Your Investment Goals
Some people just feel lost in investment especially when they start investing in stock or when they don’t make a lot of money out of their investments. They will start wondering, what the hell am I doing here? This is all because of they don’t set clear investment goals.
When you do not have investment goals, you basically do not have measure of success.. When you do not have the measure of success, you do not know whether you’re at the right track. When you do do know whether you’re at the right there, you do not take actions (e.g. sell your stocks or mutual funds) and lastly you are lost because you simply do not know what to do. So, I hope this makes sense to you that why you must have investment goals for each investment that you make.
Let’s look at the following 4 steps on how you can set your investment goal. Check it out…
Step 1: Identify Your Personal Inflation Rate – X%
Well, before you even start thinking about setting your investment goals, you must first understand one of the most important elements in investing is to protect yourself from inflation killer. Thus, it is important to identify your personal inflation rate before you start investing. Let’s look at my previous article how you should get your own personal inflation rate rather than the reported inflation rate by your government:
You identify this as X% and don’t be surprise if your personal inflation rate is a lot higher than the reported national inflation rate especially if you’re a big spender. The chances this will happen is high too if you keep earning more and more every years.
Step 2: Identify Your Safest & Highest ROI – Y%
Your safest ROI could be your saving, fixed deposit (i.e. FD), or your retirement saving fund such as EPF in Malaysia, CPF in Singapore or 401(K) plan in United State. I don’t know what the rest of the countries call this. :) Usually the retirement saving fund (e.g. the EPF) has the highest ROI as compared to your FD or your savings. You identify this as Y%
Step 3: Identify Your Minimum Investment Goal – Z%
Once you have identified X% and Y%, your minimum investment goal that you set should be based on which one has the highest %. For example, if your Y% > X%, you minimum investment goal should be Y%. Hopefully your X% is less than Y%. If that doesn’t happen, you may want consider to change your lifestyle. If you don’t want to, that’s fine too. Then your minimum investment goal should be Y%. In short, Z% = MAX(X%, Y%). Hope this is not too engineering for you… :)
Step 4: Set Your Investment Goals
This is the final step is to set your investment goal after you have identified Z%. Basically, there are 2 types of goals that you can set. One is normal and another one stretch investment goals. If you achieve your stretch investment goal, you have basically exceeded expectation. Sound something familiar like your focal? Hahaha…
Well, no hard rules how you want to set the investment goal as long as you make sure it is > Z% but this is what I think normal and stench investment goals should be:
Let’s take myself as an example. If my Z% = 6% (based on the latest EPF data in 2010) , my normal investment goal will be 12% ROI. If my actual ROI is 12%, I’m meeting my goal. However, what if my ROI is > 18%? I’m basically exceeding my investment goal because I”m achieving my stretch goal. In order to meet these goals, I"m investing in mutual fund or unit trust, stock, gold, property and etc.
This is how my investment goals look like. So whatever I invest in mutual fund/unit trust, stock, gold, property and etc, my measure of success is based on 2Z% and 3Z%. What about you? If you don’t have any investment goal, probably you can start having one now…
Summary
What do you think of my formula? Sounds reasonable or unreasonable to you? If not, what do you think how one should set their investment goals? As mentioned before, setting investment goal is essential which as important as that you need to have clear financial goal. Without goals, you do not know your direction. In this article, I show you 4 simple steps how you can set your investment goals for both normal and stretch goals. Of course, you can define your own formula. Good luck!
P/S: Hope this is something useful to you guys. I”m going to take vacation off in 4 more days and will not be blogging for about 2 weeks. Yeah! Feel free to comment on this article and hopefully I can get back to you before my vacation. :)
When you do not have investment goals, you basically do not have measure of success.. When you do not have the measure of success, you do not know whether you’re at the right track. When you do do know whether you’re at the right there, you do not take actions (e.g. sell your stocks or mutual funds) and lastly you are lost because you simply do not know what to do. So, I hope this makes sense to you that why you must have investment goals for each investment that you make.
Let’s look at the following 4 steps on how you can set your investment goal. Check it out…
Step 1: Identify Your Personal Inflation Rate – X%
Well, before you even start thinking about setting your investment goals, you must first understand one of the most important elements in investing is to protect yourself from inflation killer. Thus, it is important to identify your personal inflation rate before you start investing. Let’s look at my previous article how you should get your own personal inflation rate rather than the reported inflation rate by your government:
You identify this as X% and don’t be surprise if your personal inflation rate is a lot higher than the reported national inflation rate especially if you’re a big spender. The chances this will happen is high too if you keep earning more and more every years.
Step 2: Identify Your Safest & Highest ROI – Y%
Your safest ROI could be your saving, fixed deposit (i.e. FD), or your retirement saving fund such as EPF in Malaysia, CPF in Singapore or 401(K) plan in United State. I don’t know what the rest of the countries call this. :) Usually the retirement saving fund (e.g. the EPF) has the highest ROI as compared to your FD or your savings. You identify this as Y%
Step 3: Identify Your Minimum Investment Goal – Z%
Once you have identified X% and Y%, your minimum investment goal that you set should be based on which one has the highest %. For example, if your Y% > X%, you minimum investment goal should be Y%. Hopefully your X% is less than Y%. If that doesn’t happen, you may want consider to change your lifestyle. If you don’t want to, that’s fine too. Then your minimum investment goal should be Y%. In short, Z% = MAX(X%, Y%). Hope this is not too engineering for you… :)
Step 4: Set Your Investment Goals
This is the final step is to set your investment goal after you have identified Z%. Basically, there are 2 types of goals that you can set. One is normal and another one stretch investment goals. If you achieve your stretch investment goal, you have basically exceeded expectation. Sound something familiar like your focal? Hahaha…
Well, no hard rules how you want to set the investment goal as long as you make sure it is > Z% but this is what I think normal and stench investment goals should be:
Normal Investment Goal = 2Z% (2 times of Z%)
Stretch Investments Goal = 3Z% (3 times of Z%)
Note: Z% is your mininimun investment goal.
Let’s take myself as an example. If my Z% = 6% (based on the latest EPF data in 2010) , my normal investment goal will be 12% ROI. If my actual ROI is 12%, I’m meeting my goal. However, what if my ROI is > 18%? I’m basically exceeding my investment goal because I”m achieving my stretch goal. In order to meet these goals, I"m investing in mutual fund or unit trust, stock, gold, property and etc.
This is how my investment goals look like. So whatever I invest in mutual fund/unit trust, stock, gold, property and etc, my measure of success is based on 2Z% and 3Z%. What about you? If you don’t have any investment goal, probably you can start having one now…
Summary
What do you think of my formula? Sounds reasonable or unreasonable to you? If not, what do you think how one should set their investment goals? As mentioned before, setting investment goal is essential which as important as that you need to have clear financial goal. Without goals, you do not know your direction. In this article, I show you 4 simple steps how you can set your investment goals for both normal and stretch goals. Of course, you can define your own formula. Good luck!
P/S: Hope this is something useful to you guys. I”m going to take vacation off in 4 more days and will not be blogging for about 2 weeks. Yeah! Feel free to comment on this article and hopefully I can get back to you before my vacation. :)
Jumat, 12 Agustus 2011
Refinancing Your Mortgage: What You Should Know Before You Do
Refinancing your mortgage may seem like a godsend at the moment, but before you jump in headfirst, there are some things you should know. For instance, are you prepared to shop around with at least three different lenders and three different title companies? Even though you might do less paperwork with your current lender, others might be able to offer you better rates, so it's definitely worth checking them out.
Here are some of the other things you should think about with a refinance.
There may be extra fees involved
All too often homeowners get caught up in that one little number – the interest rate. Sure, a drop of a half a percentage or more can save you big bucks on your monthly payment and on the total interest you'll pay for your home. However, you have to remember that refinancing comes with some of the same fees involved in buying a home originally, so the interest rate change may not end up saving you all that much after all.
Another thing to consider is something plaguing homeowners today: do you owe more on your home than it's worth? A high loan-to-value ratio these days can mean extra fees for your refinance, as the company doing your refinance has to protect itself, too. You might even end up paying private mortgage insurance, which can increase your monthly payment by $100 or more a month.
So, before you refinance, make sure you look at all the numbers and take everything into account. Unless you're getting significant interest rate savings, the refinance may not save you that much money after all.
You could tack more years onto your mortgage
Another thing to consider with a refinance is what loan term you'll use for the refinanced loan. Many homeowners who have been in their homes for five years or more take out another thirty year loan, not considering that it will be yet another five years before they pay off the house. Thirty-five years is a long time to be paying on one home!
In some cases, a longer-term mortgage may make sense, especially if the lower monthly payments mean keeping your home instead of going into foreclosure. In some cases, it may be in your best interest to pay extra on another thirty year mortgage, which will pay it off earlier and save you money. However, in many cases, it's better to take out a shorter-term loan – like a fifteen or twenty year – depending on how much you have left to pay off after the refinance.
Just keep in mind that by taking out another thirty year loan, it will take you some time to get traction in your mortgage and start paying off the principle significantly, so this is really only a good option if you plan to stay in your home for a while.
Find your break-even point
The best way to determine whether or not a particular mortgage deal is a good one for you is to find your break-even point. This is the point at which the extra costs of refinancing will break even for you. If you plan to be in your home through or well past your break-even point, then a refinance could be a good option for you. If not, though, it's probably better to hold off and just sell the house when you're ready.
There are plenty of great online calculators that will help you determine your break-even point with the best refinancing deal you can find.
Keep your credit score up during the refinance
Finally, just like when you're buying a house, when you're refinancing, you need to be sure that your credit score stays up the entire time – until your rates are actually locked in. Most lenders will quote you a rate at the outset of the refinancing process but will check your credit score again before locking in that rate.
One of the best ways to keep your credit score high during a refinance is to cut back on credit card usage. Use your cards responsibly, and pay off new balances every month. If you can, try to pay down your balances a little, too, so that your credit score is even a little higher at the end of the refinancing process than it was at the beginning!
This is a guest post by Katheryne Taylor.
Here are some of the other things you should think about with a refinance.
There may be extra fees involved
All too often homeowners get caught up in that one little number – the interest rate. Sure, a drop of a half a percentage or more can save you big bucks on your monthly payment and on the total interest you'll pay for your home. However, you have to remember that refinancing comes with some of the same fees involved in buying a home originally, so the interest rate change may not end up saving you all that much after all.
Another thing to consider is something plaguing homeowners today: do you owe more on your home than it's worth? A high loan-to-value ratio these days can mean extra fees for your refinance, as the company doing your refinance has to protect itself, too. You might even end up paying private mortgage insurance, which can increase your monthly payment by $100 or more a month.
So, before you refinance, make sure you look at all the numbers and take everything into account. Unless you're getting significant interest rate savings, the refinance may not save you that much money after all.
You could tack more years onto your mortgage
Another thing to consider with a refinance is what loan term you'll use for the refinanced loan. Many homeowners who have been in their homes for five years or more take out another thirty year loan, not considering that it will be yet another five years before they pay off the house. Thirty-five years is a long time to be paying on one home!
In some cases, a longer-term mortgage may make sense, especially if the lower monthly payments mean keeping your home instead of going into foreclosure. In some cases, it may be in your best interest to pay extra on another thirty year mortgage, which will pay it off earlier and save you money. However, in many cases, it's better to take out a shorter-term loan – like a fifteen or twenty year – depending on how much you have left to pay off after the refinance.
Just keep in mind that by taking out another thirty year loan, it will take you some time to get traction in your mortgage and start paying off the principle significantly, so this is really only a good option if you plan to stay in your home for a while.
Find your break-even point
The best way to determine whether or not a particular mortgage deal is a good one for you is to find your break-even point. This is the point at which the extra costs of refinancing will break even for you. If you plan to be in your home through or well past your break-even point, then a refinance could be a good option for you. If not, though, it's probably better to hold off and just sell the house when you're ready.
There are plenty of great online calculators that will help you determine your break-even point with the best refinancing deal you can find.
Keep your credit score up during the refinance
Finally, just like when you're buying a house, when you're refinancing, you need to be sure that your credit score stays up the entire time – until your rates are actually locked in. Most lenders will quote you a rate at the outset of the refinancing process but will check your credit score again before locking in that rate.
One of the best ways to keep your credit score high during a refinance is to cut back on credit card usage. Use your cards responsibly, and pay off new balances every month. If you can, try to pay down your balances a little, too, so that your credit score is even a little higher at the end of the refinancing process than it was at the beginning!
This is a guest post by Katheryne Taylor.
Sabtu, 30 Juli 2011
Latest Malaysian Tax Scheme for ESPP is Stupid
If you do not know what ESPP is, you may skip this article. Basically, ESPP stands for employee stock purchase plan. ESPP is one of the company’s compensation which allows you to purchase the company share with discount (e.g. 15%). Your company may or may not have this benefit and every company has slightly different way to implement this ESPP.
How this ESPP works is you can enroll this ESPP program for about let’s say 6 months. During this 6 months window, your company will deduct up to maximum certain percentage (e.g. 10%) of your salary every month and use this money to purchase the company share at the 6th month - the closing window (e.g. June 30) based on the “Subscription Value” with discount (e.g. 15%).
Let’s assume number of shares you have purchased with this ESPP is 50 shares and see the following example to illustrate the previous and the latest tax scheme for ESPP:
Subscription value = $30
Purchase price at 15% discount = $30 X 0.85% = $25.5
Stock price on June 30 (highest) = $51
Stock price on June 30 (lowest) = $49
Stock price on June 30 (average) = $50
No. of shares purchased = 50
Previous Tax Scheme for ESPP
Based on the previous tax scheme for ESPP, the taxable gain is based on the discount (e.g. 15%) the company gives you. In this example, the taxable gain will be $225 - see the calculation below. This tax scheme makes a lot of sense because if the company doesn't offer you the discount, you will still need to purchase the share price at $30 not at $25.5 Because of the 15% discount, $225 is the extra money your company gives to you. Thus, $225 to be considered as taxable income makes a lot of sense.
The taxable gain calculation based on previous tax scheme:
= ($30 – $25.5) X 50 or ($30 X 15%) X 50
= $225
Latest Tax Scheme for ESPP
However based on the latest tax scheme for ESPP, the taxable gain is no longer based on the 15% discount. but based on the average price of the last day of your ESPP closing window (e.g. 30 June). In this example, the average price on June 30 is $50. So it is automatically assumed that you gain $50-$25.5 = $24.5 although you didn't sell the share at June 30. Huh, what a crap?
The taxable gain calculation based on latest tax scheme:
= ($50 – $25.5) X 50
= $1225
So technically speaking, if you sell your ESPP share later at price lower than $50, you're actually being taxed more. Well, you may argue that what if you sell higher, then you're getting taxed less. Isn't that a good thing?Well, don't you know that capital gain in Malaysia is not taxable? If it is not taxable, why I sell higher, then I need to be taxed more? Think again!
Conclusion
Honestly if you ask me, there is something wrong with the latest Malaysian tax scheme for ESPP. The previous tax scheme is reasonable but definitely not the latest. Although similar tax scheme is being applied to the restricted stock units (RSU) and stock options, I'm still okay with that because we do not fork out our own money. It is just like you're getting less compensation, not really that a big deal. However for ESPP, we basically fork out our OWN money to purchase the shares and now you simply tax me. This is not acceptable!
Well, what can you do? You can protest to the government or just be alert of the price at the ESPP closing window (e.g. June 30) and if the price is high, you may want to consider a quick sell rather than keep it. I know this is suck...
[Update: 19 August 2011]: Let's look at the comment in this post from "HS Ooi". He gave a very good explanation why market gain is classified as the compensation instead of capital gain. Thus, it should be taxed. What do you think?
P/S: By the way, please don't confuse that you can claim back your money if your sell your ESPP share at lower price. I"m talking about taxable gain here and not the tax deduction in your monthly payslip. If there is extra tax deduction, you can only claim them back but this is not the case. The $1225 is reported as a taxable income in your EA form and it is part of your income.
How this ESPP works is you can enroll this ESPP program for about let’s say 6 months. During this 6 months window, your company will deduct up to maximum certain percentage (e.g. 10%) of your salary every month and use this money to purchase the company share at the 6th month - the closing window (e.g. June 30) based on the “Subscription Value” with discount (e.g. 15%).
Let’s assume number of shares you have purchased with this ESPP is 50 shares and see the following example to illustrate the previous and the latest tax scheme for ESPP:
Subscription value = $30
Purchase price at 15% discount = $30 X 0.85% = $25.5
Stock price on June 30 (highest) = $51
Stock price on June 30 (lowest) = $49
Stock price on June 30 (average) = $50
No. of shares purchased = 50
Previous Tax Scheme for ESPP
Based on the previous tax scheme for ESPP, the taxable gain is based on the discount (e.g. 15%) the company gives you. In this example, the taxable gain will be $225 - see the calculation below. This tax scheme makes a lot of sense because if the company doesn't offer you the discount, you will still need to purchase the share price at $30 not at $25.5 Because of the 15% discount, $225 is the extra money your company gives to you. Thus, $225 to be considered as taxable income makes a lot of sense.
The taxable gain calculation based on previous tax scheme:
= ($30 – $25.5) X 50 or ($30 X 15%) X 50
= $225
Latest Tax Scheme for ESPP
However based on the latest tax scheme for ESPP, the taxable gain is no longer based on the 15% discount. but based on the average price of the last day of your ESPP closing window (e.g. 30 June). In this example, the average price on June 30 is $50. So it is automatically assumed that you gain $50-$25.5 = $24.5 although you didn't sell the share at June 30. Huh, what a crap?
The taxable gain calculation based on latest tax scheme:
= ($50 – $25.5) X 50
= $1225
So technically speaking, if you sell your ESPP share later at price lower than $50, you're actually being taxed more. Well, you may argue that what if you sell higher, then you're getting taxed less. Isn't that a good thing?Well, don't you know that capital gain in Malaysia is not taxable? If it is not taxable, why I sell higher, then I need to be taxed more? Think again!
Conclusion
Honestly if you ask me, there is something wrong with the latest Malaysian tax scheme for ESPP. The previous tax scheme is reasonable but definitely not the latest. Although similar tax scheme is being applied to the restricted stock units (RSU) and stock options, I'm still okay with that because we do not fork out our own money. It is just like you're getting less compensation, not really that a big deal. However for ESPP, we basically fork out our OWN money to purchase the shares and now you simply tax me. This is not acceptable!
Well, what can you do? You can protest to the government or just be alert of the price at the ESPP closing window (e.g. June 30) and if the price is high, you may want to consider a quick sell rather than keep it. I know this is suck...
[Update: 19 August 2011]: Let's look at the comment in this post from "HS Ooi". He gave a very good explanation why market gain is classified as the compensation instead of capital gain. Thus, it should be taxed. What do you think?
P/S: By the way, please don't confuse that you can claim back your money if your sell your ESPP share at lower price. I"m talking about taxable gain here and not the tax deduction in your monthly payslip. If there is extra tax deduction, you can only claim them back but this is not the case. The $1225 is reported as a taxable income in your EA form and it is part of your income.
Minggu, 24 Juli 2011
Veterans, Baby Boomers, Gen X, Y and Z
I do not know about this generation stuff after I have gone through a training. So I think that is worth to share with you all about these 5 generations (i.e. Veterans, Baby Boomers, Gen X, Gen Y and Gen Z). I think it is important to understand the behavior or characteristics of these generations which may help you in all aspects. Here you go the high-level summary of all these 5 generations:
High-Level Summary
Veterans are very comfortable with directive, command and control management style. They prefer live to be predictable and not willing to change and not flexible. This is probably due to the effect of world war I and world war II because they have seen the worst.
Baby boomers tend to be very optimistic and work-centric. They will never think the employer will fire them. The reason why it is being called as baby boomers in this generation was due to the sudden increase of birth rates after the world war II.
Gen X has the “slacker” or “lazy” mentality because they born with almost everything ready. They are the first generation that has gone through day care, tuition and etc. Thus, most of the Gen X people are well educated. Loyalty is no longer in their mind, they change job or career frequently as long as they;’re unhappy. Work-life balance was invented by this generation!
Gen Y is very technology wise. They love gadget! They are way optimistic than the previous generations. They really want to do something that they really enjoy. Similar to Gen X but more extreme, they don’t give a damn about loyalty at all.
Gen Z is also know as Internet Generation. Most communication are gone through social network (e.g. Facebook, Twitter) and they do not understand or have not experienced the life without an internet.
Conclusion
Well, there is no hard rule. Let’s say if you’re Gen X, you must behave like Gen X. From one generation to another, they are always an overlap. Let’s take myself as an example – I belong to Gen X but I do not change job often, does that mean I”m baby boomer? At the same time ,I love gadget every much too! Well, I love to communicate through social network as well! It seems like I overlap 4 generations!
What it really means here is I can understand all types of generations and be part of them. lol When you’re one of them, it is easier for you to communicate or manage them.
Which generation you belong to? I bet you’re from Gen Y. : ) If wrong, then it should be Gen X! :) lol Hope article is useful to you!
High-Level Summary
| Veterans | Baby Boomers | Gen X | Gen Y | Gen Z | |
| Born Year | < 1946 | > 1946 < 1964 | >1965 <1979 | >1980 <1995 | > 1995 |
| Behavior | Very conservative and discipline Very respect law and order | Very optimistic and work-centric Believe employment is for a life. | Well educated generation Not interested in long-term careers | Very technology wise Expect great workplace flexibility | Never known a life without the internet Communicate through social network. |
Veterans are very comfortable with directive, command and control management style. They prefer live to be predictable and not willing to change and not flexible. This is probably due to the effect of world war I and world war II because they have seen the worst.
Baby boomers tend to be very optimistic and work-centric. They will never think the employer will fire them. The reason why it is being called as baby boomers in this generation was due to the sudden increase of birth rates after the world war II.
Gen X has the “slacker” or “lazy” mentality because they born with almost everything ready. They are the first generation that has gone through day care, tuition and etc. Thus, most of the Gen X people are well educated. Loyalty is no longer in their mind, they change job or career frequently as long as they;’re unhappy. Work-life balance was invented by this generation!
Gen Y is very technology wise. They love gadget! They are way optimistic than the previous generations. They really want to do something that they really enjoy. Similar to Gen X but more extreme, they don’t give a damn about loyalty at all.
Gen Z is also know as Internet Generation. Most communication are gone through social network (e.g. Facebook, Twitter) and they do not understand or have not experienced the life without an internet.
Conclusion
Well, there is no hard rule. Let’s say if you’re Gen X, you must behave like Gen X. From one generation to another, they are always an overlap. Let’s take myself as an example – I belong to Gen X but I do not change job often, does that mean I”m baby boomer? At the same time ,I love gadget every much too! Well, I love to communicate through social network as well! It seems like I overlap 4 generations!
What it really means here is I can understand all types of generations and be part of them. lol When you’re one of them, it is easier for you to communicate or manage them.
Which generation you belong to? I bet you’re from Gen Y. : ) If wrong, then it should be Gen X! :) lol Hope article is useful to you!
Senin, 11 Juli 2011
My Boss is Weak In Technical
My boss doesn’t know what I”m doing! My boss is lack of technical skills! I lazy to talk to my boss because he is weak in technical. A good boss supposes to know better than me, why he still ask me? Does this sound familiar to you? Well before you complain, let’s look at what are the management skills needed from a single contributor to first-line, middle and top managers in a company.
Notes
Is My boss Really Weak in Technical or….
Well I agree your boss is weak in technical. So you expect your boss should be better than you since he/she has worked so many years in the industry? If this is the case, you’re really in deep trouble because when your boss is better than you technically, you’re actually underperformed. Let’s look at the diagram above, a first-line manager supposes to spend less time in technical than a single contributor. How could you expect your manager is better than you since he spend less time than you? Yes, you’re underperformed!
If you look at the other way, let’s assume you’re not underperformed and you boss is really damn good in technical. You should start asking if your immediate boss focus on the right things? He should spend more on the human side for the skills. Does he do that? That is the reason why not all managers are suitable to be managers. In this case he is probably better to stay in the technical path (e.g. group lead, team lead) rather than in management path.
So think about it again. Is your boss really week in technical? It is expected your boss has less technical knowledge than you, and your role to explain to him and make sure he has the right amount of detail information.
Discussion
That is the general understanding of management skills. The higher you go, the less technical you’re as you’re now moving towards more human and conceptual management skills. Please set at least the right expectation to your manager. Having said so, one may still challenges this statement. The first argument of this is does this also apply to a technology company? Basically in a technology company, even managers are expected to be strong in technical? Is that true?
I myself work in a technology company and I have seen middle managers are damn good in technical and also both human and conceptual skills? Those are usually the outstanding manager. Is the expectation now set to the manager in a technology company somehow different? If that is the case, looks like being a manager in a technology company is a lot more harder. What do you think?
- Technical skill is a skill to perform each single detailed tasks. Human skill a skill to deal with human and resources to accomplish the company’s goals. Conceptual skill is a skill to understand the business need and set directions for the company.
- The area of the shape tells you how much the role should spend their time in technical, human and conceptual. The total area for each role or shape should be the same. We have only 24 hours a day. :)
Is My boss Really Weak in Technical or….
Well I agree your boss is weak in technical. So you expect your boss should be better than you since he/she has worked so many years in the industry? If this is the case, you’re really in deep trouble because when your boss is better than you technically, you’re actually underperformed. Let’s look at the diagram above, a first-line manager supposes to spend less time in technical than a single contributor. How could you expect your manager is better than you since he spend less time than you? Yes, you’re underperformed!
If you look at the other way, let’s assume you’re not underperformed and you boss is really damn good in technical. You should start asking if your immediate boss focus on the right things? He should spend more on the human side for the skills. Does he do that? That is the reason why not all managers are suitable to be managers. In this case he is probably better to stay in the technical path (e.g. group lead, team lead) rather than in management path.
So think about it again. Is your boss really week in technical? It is expected your boss has less technical knowledge than you, and your role to explain to him and make sure he has the right amount of detail information.
Discussion
That is the general understanding of management skills. The higher you go, the less technical you’re as you’re now moving towards more human and conceptual management skills. Please set at least the right expectation to your manager. Having said so, one may still challenges this statement. The first argument of this is does this also apply to a technology company? Basically in a technology company, even managers are expected to be strong in technical? Is that true?
I myself work in a technology company and I have seen middle managers are damn good in technical and also both human and conceptual skills? Those are usually the outstanding manager. Is the expectation now set to the manager in a technology company somehow different? If that is the case, looks like being a manager in a technology company is a lot more harder. What do you think?
Langganan:
Postingan (Atom)