Your friend Joe working in CT is making $45,000 in a finance job, and your friend Leslie is making $43,000 in Boston for the same type of job. Is one smarter than the other? A better negotiator than the other? Probably not- the salary differential is usually based upon a higher cost of living between one place and the other. For example, jobs in Fairfield County (CT) pay 3% more than jobs in Boston, and 7% more than jobs in northern CT.
Want to know how you stand versus other grads you know? Check out the Salary comparison tool at http://swz.salary.com/costoflivingwizard/layoutscripts/coll_start.asp
It will give you hard data and a graphical representation of the difference between the cost of living in two cities and the job pay for the same type of jobs. They also have some other interesting calculators, such as a benefits calculator. Check it out!
Salary comparison
Oh, Mohegan Sun
If you are from the New England area, you are bound to have heard of, if not visted, Mohegan Sun. The Pequot Indians own and operate this little gem of a casino in Unkasville, CT, and profit grandly from the thousands of 65-year-old women playing penny machines every day. As a finance major, I don't really like casinos. You know the odds are against you. Really against you. And most finance majors would rather take calculated risks than uncalculated ones. I am one of them. I always had disdain for the casino and pitied anyone stupid enough to go there on a regular basis. You never come out ahead in the long run.
Unfortunately for me, my finacee's family likes to go there. So, during the past few months, I've been reluctantly dragged to Mohegan Sun on more Sunday's than I'd like to admit to, to spend quality time with the family while we all console each other in our losses at the slots. After going a few times, I can understand why people get addicted. These machines have little characters that dance and have catchy music, and when people next to you win $400 from a $4 bet, you get all excited and can't wait until it happens to you! I can't say I want to go all the time, but it has been fun wining and losing with the family, eating at the buffet together, and then talking about who won what afterwords :) For a little recreational fun, something to do on a sunday afternoon rather than watch a movie (because I only let my fiancee play the slots so we've never lost more than the cost of an afternoon at the movies!), it's not so bad. :)
Where is mom when you need her? A grad's guide to the kitchen on their own
You've moved into your new apartment and begun your first few weeks on the job. Maybe it took you a few weeks, or maybe you knew it already, but having take-out for every meal gets expensive. Even just eating out lunch everyday adds up to over $100 a month - if you are frugal and only spend $5 for lunch! Spend $10 instead and you've racked up a $200 a month lunch bill. This doesn't even count dinner!! So you decide to conquer the kitchen and start making some of your own lunches and dinners.
The tricky part (and this is where having mom around would be nice) is figuring out how long you can keep the food you bought at the grocery store. You can smell it, but how are you supposed to know what bad ham smells like? Here is a quick run-down of some of the basics, and how long you can keep them around before they might cause some problemos. And you don't want those in your first few weeks. :)
Eggs: 3-5 weeks, but don't store them on the door because it isn't cold enough.
Milk: 5-7 days
Potatoes: 1 month
Cheese: unopened, check date on package. Opened, 3-4 weeks.
Salsa: unopened, a year, opened, 2 weeks.
raw hamburger, ground turkey, veal, or pork: 1-2 days. If frozen, 3-4 months
opened hot dogs: 1 week. Frozen, 1-2 months
Bacon: 1 week
fresh chicken: 1-2 days. Frozen, 1 year.
Check out http://hgic.clemson.edu/factsheets/hgic3522.htm if you have more questions on different food items! Be safe!
Setting up your work voicemail and unsure of what to say? Some ideas!
It's your first day and they set up your voicemail. Maybe you're a little nervous, or maybe your social graces aren't amazing. But you call the number to set it up, and you've got a blank. No idea what to greeting to leave with potential callers who miss you. Some ideas:
Hi, you have reached (Name). I am not in my office to take your call. At the tone leave your name, telephone number and I will get back to you as soon as possible.
Hi, this is (Name). I’m sorry I cannot answer your call right now. Please leave a detailed, message at the tone. I’ll call you as soon as I return. Thank you.
Hello, you have reached (Name) at (Company Name). I’m sorry I cannot answer your call at the present time. Please leave a message at the tone and I will call you back as soon as possible. Thank you for calling.
Hello, this is (Name) of (Department) at (Company Name). I’m sorry I can’t speak with you at the moment but if you’d like to leave your name, telephone number and details of how I can help you I’ll get back to you as soon as possible. Thank you for calling.
Credit Default Swaps and Bear Stearns: What are they and why does Bear Stearns' cost $49,000?
Heard a lot of talk about credit swaps in reference to the recent news story about Bear Stearns and the High-Grade Structured Credit Strategies Fund? Investors perceive the risk of owning Bear Stearn's corporate bonds as very high due to a high number of margin calls in the past three weeks on the High- Grade Fund, which had made bets of over 11 billion in the collateralized-debt market. Five-year credit-default swaps based on $10 million of the Bear Stearns bonds rose from $2,000 to $49,000, according to broker Phoenix Partners Group. An increase in the price of the contracts, used to speculate on the company's ability to repay its debt, shows deterioration in the perception of credit quality.
Wondering exactly what a credit swap is? A credit default swap is a financial instrument designed to transfer the credit exposure of a fixed income product between two parties. It is an agreement between a “protection buyer” and a “protection seller”, where the buyer is purchasing protection against default of the bond he/she owns. The buyer pays a periodic fee in return for a contingent payment by the seller upon a credit event (such as a default or failure to pay). A CDS is used to hedge against risk for the holder of the debt, although because there is no requirement to actually hold any asset or suffer a loss, a CDS is not actually insurance. The typical term of a CDS contract is five years. Thus, if I purchased a corporate bond of Bear Stearns and was worried they might default, I could buy a credit swap for that bond. I would pay a fee to the seller, and should Bear default on the bond I would receive X amount of dollars from the seller of the CDS (determined in the CDS contract) to cover a portion of my losses. If I had purchased them a year ago, I would have gotten a price much much lower than the three-month high yesterday, trading at $49,000.
Speed v. Accuracy
It's your first week in the office, and you want to dazzle your new boss with your genius. You attack your assignments with vigor and excitement, anticipating the moment when you hand your boss the assignment and he/she proclaims you the smartest, best analyst they ever experienced. You work quickly, so they see what an efficient, smart employee you are. In fact, you beat all the other analysts to handing in the assignment. You can see your name lit up in glory already.
Stop.
I'm sure you all wish that could happen. But in the collection of experiences I've had working at a number of different companies, employers value accuracy more than speed. And while I'm sure you are very smart, little formatting issues are very easy to miss when hurrying through an assignment. Little things, like how a report is spaced out, borders, fonts, and size all do really matter. Larger issues, like making sure the numbers matching on multiple reports when they should, and double-checking your work to make sure what you've created is accurate is really, really important. Taking the extra time to do this will impress your boss more than being the first one to hand in your (inaccurate and badly formatted) work. Let your boss hold up your work as the example to the rest- even if that means you hand it in last. And unlike them...you won't have to go back and fix your mistakes.
Investing in Commodities
Commodities are raw materials that are sold in bulk, such as oil, wheat, silver, gold, pork bellies, oranges, and cocoa. Onions are specifically excluded from the commodity list, thanks to a 1958 law. The Commodity Futures Trading Commission (CFTC) regulates the markets where commodity futures and options are traded. Its mission is to protect you as an investor from fraud, manipulation and other abusive practices.
Interested in investing in commodities? You can do this several different ways. You can invest in stocks of mining or energy companies. You can invest in funds or ETFs (such as streetTRACKS Gold Shares (GLD))that specialize in natural resources. A few even specialize in buying and selling commodities. But don't wade into the futures market alone: amateurs lose early and often. In fact, commodities trading is one of the riskiest investment activities around. Don’t invest in commodity futures unless you have a diversified investment portfolio and you won’t be hurt by large losses that can happen in almost no time.
The Business Lunch: Know your Etiquette
Your first day, the boss decides to take you out to lunch. Or, a few weeks in, you're expected to take a client out to lunch. Make sure you know the etiquette so you don't look rude during your meal!
1. Be on time!! Nothing looks worse than being late.
2. Turn off your cell phone before you get into the restaurant. On Silent. If you can hear it vibrate, so can the other person.
3. Don't glance around, looking at other tables or people. Stay with the person you are dining with. Looking around signals that you find other people more interesting than your companion.
4. If you are woman and this is business, it’s appropriate now to stand up and shake the hand of a male. Ignore the old-timers rule of women staying seated.
5. Make an opening statement as you are shaking hands. Offer a firm, warm handshake.
This is part of your first impression, so make it good. Use the guest’s first name either at the beginning or at the end of the statement. For example, "Thank you for taking the time to get together today, Jane." When needing to complete a group of introductions, highest rank rules over gender.
6. If you do the inviting, you pick up the check.
7. Immediately place the napkin on your lap. If the napkin is in your goblet, that usually means the server will place it for you. If you need to use the restroom, place the napkin to the left of your plate to let the server know you are not done.
8. Utensils start from the outside in and the dessert fork is by the dessert plate. Lay your fork and knife across your plate to let the server know you're finished.
9. Order with care. Don't opt for the messy BBQ sandwich - have a salad instead.
10. Be pleasant and polite with the wait staff. Nothing is more disenchanting than dining with a rude person.
11. Small Talk- don't just jump into business. Try and wait until at least you've done ordering.
12. Don't ask for a doggy bag!!
Enjoy your lunch!
Emerging Markets: Don't Overlook Brazil
Last week, Standard & Poor’s upgraded Brazil’s sovereign credit, to only one step below investment grade. Brazil is benefiting from strong exports,declining interest rates and a current account surplus. In response, the Brazilian real exceeded $0.50 to the doller for the first time since 2000. It has doubled against the dollar since its drop in October 2002, when the leftwing Luiz Inacio Lula da Silva became president. According to JP Morgan, its bonds now trade at a yield of only 140 basis points above Treasuries. This yield is the lowest on record and far below the 2,400 basis point spread when Lula was elected. Brazil’s benchmark Bovespa index has gained 1,146% in dollar terms since da Silva was elected.
Luiz Ribeiro, manager of the world's largest actively managed Brazilian equity mutual fund, the US HSBC GIF Brazil Equity fund($1.2 billion), has predicted that all three ratings agencies will classify Brazil as investment grade by the end of 2008. Brazil's growth is expected to remain strong as homebuilding takes off, retail sales expand and infrastructure improvements gain steam. Brazil is one of the countries comprising BRIC, a group of the fastest growing emerging markets. BRIC is made up of Brazil, Russia, India, and China.
Finding that perfect place: can you fit all those creature comforts in your budget?
I have a friend who begins working at GE in a month or so. She is in a Leadership Program that moves her around different departments in different locations, and luckily for her the first location is in Shelton, CT, only an hour from our hometown. But unfortunately, that hour turns into 2 or more in the morning rush hour traffic. So while she lives at home, she is checking out places to live close to her office. The problem is that Fairfield County is very expensive to live in, and while she has found some studios or one bedrooms in her price range, the ones she likes the best stretch her budget a bit. Like most of us, she's gotten used to the creature comforts supplied by parents. You know- central air, someone else cleaning the kitchen and the bathroom, granite countertops, and large bathrooms.
She asked me for advice on whether or not she should go with the nicer place. Here is my advice to all of you looking for a new place: don't live above your means. If you are making an I-banking salary, you probably can afford a pretty nice place. But if you're making anywhere around the average starting salary ($42,000) you have to think about it a little more. Sure, central air is nice. And someday, probably soon, you'll be able to afford it. But if you stretch your budget too much, to the point that every month you spend all that you make (you can't save) and you don't have enough cash to enjoy yourself once and awhile, is it worth it? I don't think so- if you can't save, the day your car breaks down and you need new brakes, you are going to be in trouble. Or when your car taxes are due. Or christmastime and you've saved no money for buying presents for your family. You get the drift. Don't live in a dangerous place, or in squalor, but don't allow yourself to ignore what your budget allows you pay for rent. Opt to live in a more conservatively price placed without an in-house gym, or without granite countertops or central air, until you get a pay increase and can really afford everything you want.
Finance: Retirement Savings in Your Budget!
If you've been reading the Accounting blog recently, Tom wisely reccommended you set up a budget. I know on a entry-level salary saving is hard, but you should at least consider and start planning for your retirement future. The sooner you plan, the faster you can retire! Setting aside money monthly from your salary towards retirement is very important. You can even have it auto-deducted if that is easier. Put it in a 401(k) if you have one or an IRA, and try to put away between 10-15% of your monthly income. Hard, I know! Even if you can't do that right away, put away what you can and make a plan to increase that amount as your salary increases. Also, don't automatically spend bonuses and tax rebates- put some of that away too! You'll need millions to retire- that's right, I said millions- and the sooner you start saving the less stress you'll have and the more money you'll have to plan with when you are 65 on the golf course!
Tip: try Bloomberg's financial calculators. I love them. They have everything from auto loan calculators to retirement calculators.
They are easy to follow and the reports are printable and easy to follow. Try it for different retirement saving scenarios (i.e. saving 5% a year, 10%, and so on) to see how much of a difference a couple of hundred dollars now could make!
Tips to Succeed on Your First Day of Work
After reading many articles of advice from seasoned career experts, here is a general list of tips and advice for your first day.
• On your first day, wear a suit. Always dress conservatively until you can gauge what is appropriate to wear based upon everyone else. Even after you’ve seen how everyone else dresses, dress for the job you want, even if it means a suit everyday when your colleagues are in khaki’s and a button-down.
• Plan out your route to work and have a few alternate routes in case of severe traffic or a roadway shuts down.
• Be sure to be polite on the way to work as well- you don’t want to cut off your boss (or worse!) on your way to work and have him notice you, in a bad way!
• Always arrive at work on time, if not a little early.
• Walk in with a smile on your face. Keep your head up and remember to make eye contact. Be polite and friendly to everyone you encounter, whether it's the receptionist or the mailroom clerk, your colleagues or your new boss.
• Stick to your lunch hour, and if you are particularly busy, eat at your desk or come back early.
• Understand that on the first day, you could be really busy, or you could be sitting around. Some companies prepare extensively for a new hire and prepare training and work for them. Others won’t know what to do with you on the first day and you might not get a badge or anything to do for days. Or they’ll give you something menial to do to fill up time.
• Introduce yourself to those you meet and remember that it's okay to ask questions. People generally like to help others and it usually makes them feel good about themselves.
• While it's okay to hold onto some of things you learned in your previous jobs or internships, and/or the knowledge you gained in school and use that knowledge in your new job, remember that every workplace has it's own way of doing things. Your first few weeks or even months on a job is not the time to change the way things get done. Do not utter these words: "That's not how we did it at XYZ" Your colleagues will just be thinking this: "Well, you're not at XYZ and if you liked it so much why didn't you stay there."
• LISTEN!
• Stay away from office gossip. You can pay attention to what you hear through the grapevine- that can be helpful. However don't contribute to it.
• Always knock before you enter. Although barging into your best friend’s dorm room may have been okay, barging into your supervisor's office is not okay.
• Answer the telephone politely, even if the call is internal.
• Find a mentor. Look for someone on your career path who is willing to take you under his or her wing. Your own supervisor may not be a good idea, but someone else under his supervision may be a good idea.
• Don't pretend to know things you don't. However, do your homework. Learn what you need to know.
• Don't be afraid to ask questions. If you are assigned a project and are not sure how it should be completed, ask. It's better to ask before the project is due, than to have it delayed because it was done incorrectly.
• Always stick to deadlines. Bosses usually want projects completed on time. If there is any flexibility, she will let you know.
• Pay close attention to corporate culture. Are relationships formal or friendly? Does everyone arrive early and stay late? Are lunch hours short or non-existent? At a minimum, do what everyone else does – if not more!
Current economy- job outlook!
Still no job? No worries- according to a report yesterday from the Labor Department, 157,000 new non-farming jobs were created last month! Higher demand for production in US factories and the influx of demand for new employees invigorated the economy and the dollar has risen to its highest value versus the yen in 9 months. The dollar is also at its 7 week high against the euro. The economy is expected to continue growing for the rest of the year. Foreign demand has increased production for companies like Boeing, which received 136 new orders in April, a record this year. The Federal Reserve announced it expects steady growth in the next few months and its main concern is inflation. With the Federal Reserve holding steady on interest rates, the dollar should continue to strengthen.
The other good news is that real incomes are increasing- so the base salary you will get is going to cover more than it did for grads last year, taking inflation into account! Year-over-year wages grew 3.8% over last year, which was more than inflation. Here’s a link to a Bloomberg podcast interview of Michael Englund, chief economist at Action Economics LLC. Mr. Englund comments on the recent employment numbers.
Bloomberg_vCBYm9yP2kp0.mp3
Nervous about your first day?
Some graduating seniors have the fortunate experience of accepting an offer for employment from a company they've interned for. They've been to the office numerous times, established a network of co-workers, perhaps even found a few friends in the intern staff who are continuing on and will join them at lunch! But for those of you who took a job at a company you've never worked for, the first day can be nerve-racking.
I'm nervous. I know I'm capable, but I really want to make a good first impression. I've had my outfit picked out for weeks, and I have a work survival kit for the first day, with extra pantyhose, pens, notepads, and deodorant. I've been reading some articles and they've suggested starting your "sleep pattern" at least a week before. Since I have to leave by 6:30 am, that means I'm going to bed at 10 pm and training myself to fall asleep early, so when the big day hits I'm not tired all day. Little things like this are worth planning; I feel better already.
