Lessons Learned


It all began with bullet journaling. Toward the beginning of this year, I decided to start (or restart) bullet journaling. I have a coworker who I’d seen use the technique before, so I asked him about it. Over the course of a few conversations, I ended up participating in a 30 day program to help envision my future self and make a concrete plan to get there. That program gave me daily journal prompts. I’ve spent the last two months keeping a daily journal because of it.

I had a little notebook I bought a year ago, and I made it my bullet journal. Aside from tracking daily tasks, I used it for the daily journal prompts. I also used it to collect other useful information: birthdays, definitions, and a table of companies whose financial reports I wanted to look at.

And, as February ended and March approached, I’d nearly filled the notebook. I was surprised it had gone so quickly.

I’ve found it very useful to keep that daily journal. Now that the 30 day program has ended, I have to come up with my own prompts. Usually, though, there’s something on my mind in the mornings. That becomes the basis for that day’s prompt.

The journaling helps me reflect. It helps me envision. And it helps me plan. It gives me a chance to put thoughts down. And knowing that nobody but I will read them helps me be more open in my reflection.

Anyway, I don’t have a ton more to say here. It’s been a long week, and a typical one. I just want to express my gratitude for journaling and recommend it.

finance, investing, Lessons Learned

Early Steps Toward Financial Freedom

I want to be financially free someday. And to do that, I need to figure out how to get my money working for me. I can’t constantly fritter it away and it can’t sit idly in a vault. It needs to go out into the world, work, and bring more money back.

So, I’ve embarked on a self-educating adventure. I want to find the places where I can start putting money to work. I’m conservative by nature, and I haven’t got a lot of money to begin with, so I’m probably not going to invest in some brand new business venture. But, investing in stocks seems like a simple, relatively safe, first step.

And I mean investing. I don’t have any interest in trading and trying to make my gain off market forces of supply and demand. I want to find a few decent, durable, reliable companies and buy a piece or two of them. I want to see them grow, and pay me in dividends and in the growing value of my stock in them.

To that end, I’ve spent the last week or two looking at the financial statements of a different company each day. Mostly, this is training exercise for me. I’m learning where to find the statements, how to evaluate them, how to compare two companies’ different statement, and the variety of ways companies structure their finances.

I suppose this could be boring work for some, but I find it fascinating. I’ve focused mostly on companies I interact with regularly: Apple, Microsoft, Amazon, Google, Facebook, Coca-Cola, Twitter, and others. I look at their most recent statements, either their quarterly or annual. And so far, I’ve focused on their Income statements and Balance Sheets.

I’ve found that I can easily get these statements directly from the SEC via a system called EDGAR. These statements are awesome and come in three basic forms. The most detailed is an iXBR format (I think they call it) that presents the data as an elaborate web page with hyperlinks to define numbers and filtering to get at exactly the piece of data you seek.

The EDGAR iXBR formatted income statement gives useful information about every piece of data and makes it easy to find a specific data point.

It’s almost too much information, but it’s useful when I need to find something specific or understand what I’m looking at. In contrast, the Interactive Data format is a more concise presentation of the data. The lack of clutter makes it easy to see the numbers.

The Interactive Data format presents data in a clean and concise form that makes it easy to see the whole picture

But my favorite format is XLSX. Right up there above the sidebar on the Interactive Data format, is a link to “View Excel Document.” That gets me all of the same data in a workbook where I can format it, clean it up, and calculate from it to my heart’s content.

This gives me the power to compare two different businesses. I start by going through the Income Statement and the Balance Sheet, defining names on specific cells. Did you know you can do this? A lot of people don’t because it’s something of a hidden feature.

Right-click a selection in Excel to access Define Name

After selecting one or more cells in a workbook, you can right-click and select “Define Name” from the pop-up menu. You can also find this as a button on the Formulas ribbon. Using this feature, you can give a specific name to the region of selected cells and refer to it anywhere you’d like to use it in calculations throughout your workbook. So, instead of writing a calculation to define “Current Ratio” as “=$B$7/$B$20”, you can write something more meaningful, like “=Current_Assets/Current_Liabilities”.

After naming several key cells, I then start breaking down the sheets a bit. In the Income Statement, my goal is to understand how efficiently the company operates. How much of their revenue do they retain? And where do they spend their money? On the Balance Sheet, my goal is to understand how the company structures its finances. Do they keep money on hand? Do they have a lot of property? Do they rely more on debt or on equity?

To compare different companies, I express the numbers as percentages. On the Balance Sheet, for example, next to each value, I calculate that value as a percentage of its relevant section. Say, Accounts Receivable, an asset, is in B4. In B5, I’ll enter the calculation “=(B4/Total_Assets)*100”. I divide all of the values in the assets section by “Total Assets” and everything in the liabilities and equity section by “Total Liabilities and Shareholders’ Equity”.

A Balance Sheet in Excel after calculating values as percentages and reformatting

Finally, I go through and do some formatting to make it easier to parse the data. I remove trailing decimals, I bold various totals, and I increase the font size on major sections’ totals. The end result is a workbook that I can compare to another company’s workbook so that I can understand how they equate to one another. I can see where one company has 80% of its business finances on liabilities while another company has only 20%. I can see where one company spend 50% of its income on R&D while another only spends 5%. All of this, hopefully, helps me know which of the two is in a better financial and operating position, and is, therefore, a safer company to invest in.

Really, this is all a learning exercise. Fidelity, my brokerage, does a lot of this for me. I can just look at the data they’ve compiled. But at this stage, I find it useful to do it myself. It helps me understand where the numbers come from and how they work. It also gives me some freedom to explore beyond what my brokerage provides.

And it’s been fascinating to see how different companies work. Even when I don’t know all that there is to know about a company, I have a much better sense, after looking at the finances, of which company is a safer investment. I have a better sense of the company’s longevity. And I understand better how it operates.

In the weeks ahead, I hope to use this information to give me the confidence to make some first, serious forays into the stock market. And in the years ahead, I hope to build on this foundation, perhaps to invest in developing a business that can deliver greater returns. All told, I believe financial freedom is possible with the right work.

Lessons Learned, management, positive

Forcing Functions

I’m glad I committed to write weekly on this blog. During the week, I don’t think about it much, if at all. I might ask myself whether some experience or thought I’ve had is worth blogging about, but that’s the extent of it. When the weekend comes, though, the knowledge of my commitment drives me to write something, anything to keep the commitment.

This is a “forcing function.” It’s a constraint I’ve put in place that compels me to act in a certain way. I’ve also committed to being positive on this blog. That forces me to filter my activities and thoughts during the week through a lens of positivity. This is useful because it’s easy to fall into a pattern of negativity when I’m surrounded by it in the news and on the Internet.

In journaling this morning, I thought more about forcing functions. What other forcing functions could I introduce in my life? I don’t think they need to be huge. I’ve noticed, for example, that there are things I avoid doing at work because they would be forcing functions that might drive me in ways I don’t want to go, or steal away some of my “freedom.”

For example, at work, I try to avoid saying what I’m going to do. Instead, I do it, and report it later. This is a way to avoid committing to something I’ll later be held accountable to deliver. It seemed like a good idea when I developed this habit, and it may have merit in some situations. But I think it has downsides, too.

Stating my intent to do something is like making a little promise. And because I value my status amongst my peers, that little promise becomes a forcing function that drives me to action. Add to that a deadline and it will drive me to deliver faster. It doesn’t have to be a big bold statement. A simple statement like, “Let me take a look at that and get back to you later today,” is enough to do the trick.

This is a habit that can be tremendously useful in helping me achieve my goals. I don’t need to state my intent about everything I’m planning to do. If I save those statements for actions that will push me in the direction of goals, then they will have the advantage of compelling me to move in the direction I want to go.

That’ll be a focus for me in the weeks ahead at work, and maybe even outside work, too. Making this statement here is a perfect example. Having made it, I’ve made a commitment, and I already feel compelled to act on it. Here’s hoping it pays off…

Lessons Learned, management

Finding the Right Job for the Candidate

Somewhere in Hollywood is a building with pale green carpets and plain white walls. I sat in that room with a dozen other boys like me, child actors, committing my lines to memory and building my emotions into a rage. When my time came, I stood in front of the casting director, the director, and a camera, and I read my lines with such fury and anger that they had to ask me to scale it back. It was a great interview.

A few days later, the call came. They’d loved me. The interview had been great. They wanted me for the part. But I was too tall.

That was interviewing. There was always something. Especially during those awkward teenage years when I was growing so fast that my photos couldn’t keep pace with reality. I was too big for the kid parts and too young for the high school parts. I was too this, not enough that. I got the part, they changed the concept, I lost the part. I can’t tell you how many times I was this close to working with this famous director and that famous actor for a movie at that major studio.

What I learned about interviews was that they were about judging and being judged. They were about a hundred kids and their mothers packed in a small room working their way through a process that would whittle the herd down to one lucky kid who might get the role that would make them a star. And when I got to be an adult who interviewed for “real-world” jobs, those interviews felt much the same.

Over the course of my career, I’ve been on the other side of the table many times. I’ve been the interviewer instead of the interviewee. I can’t recall ever having been trained to that role. It always seemed like the occasional job responsibility. Program this, help the customer with that, and, oh yeah, judge this person so we can decide whether they get to work or not.

I guess, what I’m saying is that it has always felt kind of cold and heartless. I know it shouldn’t be, but nobody really trains you how to do it better. What training does exist almost seems like it’s tailored to drive home the point that your job is to be a passionless interrogator intent on getting at the truth that will help you know, without a doubt, that you’ve hired the right candidate for the job.

This week, I sat in an interview again. But it was different this time. Maybe it’s years, now, of practice. Maybe it’s my different perspective, my aim to help others and to mentor. I don’t know. But as I sat there, I felt less as though it was my job to judge the fit of the candidate to the job at hand, and more my responsibility to fit the job to the candidate.

It’s a subtle difference in perspective, but I think it’s important. Candidates are good people who want to work. They’ve gone to school, they’ve compiled a resume of past experiences, they’ve dressed up and practiced, all to impress me because they hope I will give them a chance. They want a chance to work, to grow, to make some money to put food on their table. The problem of an interviewer is seldom that the candidate is unwilling or unable to do the job.

The real problem is finding a candidate who will become an employee who stays and who continues to grow. That requires a candidate who is motivated by what I, and my company, bring to the table. Part of that is the basic stuff – the salary, the benefits, the workplace. Most of it, though, is the job itself. Is it work that is intrinsically interesting to the person on the other side of the table?

As I prepared for and participated in the interview this week, this was what on my mind. I asked questions aimed at understanding this person’s aspirations and interests. What did this person want to be known for, what did they want their coworkers to say about them? “Go see ___. They are great at x!” What is x? Conversely, what aspect of themself does the candidate want to work on that they feel they need to improve?

And then, I looked at the role at hand and asked myself whether it was a role that would help them achieve these aspirations. Was it a role where this person could really get good at x? Would this role be one that aligned well with their desire to improve in this other area?

As an interviewer, I have a chance to make someone’s life better. Obviously, it’s better when they are working, and I would love to give a job to everyone who wants one. Barring my ability to do that, though, I can help improve lives by helping candidates find a job that really speaks to them. I’m hiring a candidate not just for this job, but for the next one, too, the one that this job will prepare them for.

I hope that the candidate will stay, of course. I hope they’ll thrive in this job. I hope that they will grow in the job and feel invested in it. All of that, though, is far more likely to happen if this is the right job for them. If this is the right job for them, they will want to stay, they will want to grow, they will work at it because it interests them, and they will find joy in the job.

Interviewing is a chance to help others. It’s a chance to help people find the job that will help them become what they want to be. And that’s something I care about.