What do you do with a business with an artificially bloated cost-structure that sells a product that has steadily lost consumer favor for decades? And refuses to take the necessary steps to turn itself around? There are two choices: let it fail or save it, and each involves bankruptcy. Chrysler is headed for Chapter 7 Bankruptcy and will probably be liquidated if it can’t strike a deal soon to partner with Italy’s Fiat SpA. General Motors’ (GM) will probably pursue some kind of government-sponsored reorganization, which is a euphemism for Chapter 11 Bankruptcy. The Ford Company, the other member of the Detroit Three (Stooges?), appears to be surviving on its own without the need for Government subsidy, at least for now.
The automakers are understandably in denial and doing their best to delay the inevitable. President Obama is understandably reluctant to force severe terms on the auto workers union (UAW) that got him elected. However, the Obama Administration rejected both GM’s and Chrysler’s latest reorganization plans and indicated it will not continue to subsidize the auto companies in their current form. It also says preservation of a U.S. auto industry is important to our economic and national security. Consequently, it is clear that the substantial reforms needed are not likely to occur without the assistance of a formal bankruptcy.
So, why don’t they just get on with it? Instead, the Obama Administration is further delaying the inevitable and announced on March 30th that it is giving GM 60 more days to present yet another reorganization plan and Chrysler 30 more days to reach an agreement to partner with Fiat or another automaker. Besides the agonizing and futile time extension, this supposedly last extension is likely to cost U.S. taxpayers another $16.6 billion for GM and $5 billion for Chrysler on top of the $17.4 billion they collectively received last December. Will the Administration pull the trigger and force terms for a viable reorganization on GM and the UAW and let Chrysler fail, if those companies don’t successfully execute their respective dispositions by deadline? If the Administration is serious about getting this done, shouldn’t it have called for the resignation of UAW’s President, Ron Gettelfinger, when it forced GM’s CEO Rick Wagoner to resign?
Senator Bob Corker’s reorganization plan presented last December is most likely to be the template for the inevitable course of action that will occur once the decision-makers reach the conclusion most of us already, if reluctantly, accept. The Corker Plan proposed letting Chrysler go into liquidation and a reorganization of GM according to terms that a bankruptcy proceeding might require. According to Corker’s analysis: GM bondholders would need to accept 30 cents on the dollar to help reduce GM’s $27 billion debt load; worker wages should be reduced to be consistent with foreign competitors operating here; and payments to workers receiving almost full compensation up to four years after termination would need to be eliminated. It should be noted that rank-and-file employees under UAW contracts earn $70-74/hour including benefits, while competing foreign companies operating in the U.S. earn $42-44/hour. In addition, half of the $24 billion GM owes to the UAW’s health care account for retirees would need to be paid in GM stock.
With the passage of time and the further deterioration in the auto business generally, it is likely that the terms of the ultimate reorganization plan will be even more draconian than those proposed by Senator Corker. This problem isn’t going to resolve itself. So the question is: When will the Obama Administration do what is necessary to save the U.S. auto industry?
Tuesday, March 31, 2009
Sunday, March 29, 2009
Stock Market Crash 2008-9: Lessons for Investors (Part 1 of 2)
The value of global financial assets shrank $50 Trillion during the past two years, half due to the bronco-busting ride in the stock market. Those still standing or with the courage to consider getting back on that horse (or should I say bear?) might consider some of the lessons learned from the harrowing experience:
WE LIVE IN A GLOBAL ECONOMY WITH A GLOBAL STOCK MARKET. The U.S. is still the primary growth engine of the global economy. However, the European Union is today the world’s largest single economy and the BRIC economies (Brazil, Russia, India, China) along with other emerging markets will most likely drive global economic growth for the next several generations. Ten years ago the U.S. comprised half of the world’s stock market capitalization, but today its share represents about a quarter of the global stock market. U.S. investors will need to consider the risks and opportunities that will come from being inextricably connected to that global marketplace.
DIVERSIFICATION IS STILL THE ONLY "FREE LUNCH" IN INVESTING. Many believe that the recent downturn in all stock categories means that diversification does not work. However, diversification only promises to reduce portfolio risk by mitigating the specific risks attendant to individual investments; it never promises to insulate investors from overall market risk, which is exactly what we’ve experienced during the past two years. Diversification is still an important risk mitigation tool that arises from combining several asset categories (stocks, bonds, etc) or combining variety within a particular asset category, such as stocks. In fact, many experts believe that, for maximizing risk-adjusted returns, a portfolio mix of many types of assets is even more important than the mix of stocks in a portfolio. Therefore, first consideration should be given to allocating resources to stocks, bonds, gold, cash, etc. The stock allocation should be a secondary consideration. Within the stock category, investors traditionally seek to diversify according to industry sectors, geography, investment style (e.g., growth versus value) or market capitalization (e.g., nano, micro, small, medium, large, mega-cap) in order to minimize specific investment risks over the long term.
STOCKS SHOULD BE CONSIDERED LONG TERM INVESTMENTS. The dramatic increase in stock market volatility in recent years has created a professional trader’s paradise, but has also created a treacherous environment for other investors. Consequently, investors should have a long-term horizon of at least 5 years and preferably 7-10 years for their stock portfolios. Long time horizons provide flexibility to recover from protracted and dramatic market setbacks. Strict “buy-and-hold” strategies for individual stocks are not recommended, but needing to sell out of stock positions on short notice to raise cash for other purposes will not produce satisfactory investment results. Stocks may be “liquid” investments, but “fire” sales at steeply discounted prices provide little consolation to sellers.
INVESTING IN "BLUE CHIP" COMPANIES NO LONGER GUARANTEES INVESTMENT SUCCESS. During the last year, several venerable long-standing institutions disappeared or were saved from extinction by heroic government bailouts. AIG, Citigroup, Lehman, Fannie and Freddie and many other household names are on that list. An examination of the 30 stocks comprising the Dow-Jones Industrial Average shows that even major non-financial companies dramatically fell in value, some below $10 per share, during the past year. The past two years has proven that the idea of buying stock in today’s great companies and blindly holding them forever is a thing of the past.
Part 2 will highlight lessons specific to managing your money in these uncertain and turbulent times.
WE LIVE IN A GLOBAL ECONOMY WITH A GLOBAL STOCK MARKET. The U.S. is still the primary growth engine of the global economy. However, the European Union is today the world’s largest single economy and the BRIC economies (Brazil, Russia, India, China) along with other emerging markets will most likely drive global economic growth for the next several generations. Ten years ago the U.S. comprised half of the world’s stock market capitalization, but today its share represents about a quarter of the global stock market. U.S. investors will need to consider the risks and opportunities that will come from being inextricably connected to that global marketplace.
DIVERSIFICATION IS STILL THE ONLY "FREE LUNCH" IN INVESTING. Many believe that the recent downturn in all stock categories means that diversification does not work. However, diversification only promises to reduce portfolio risk by mitigating the specific risks attendant to individual investments; it never promises to insulate investors from overall market risk, which is exactly what we’ve experienced during the past two years. Diversification is still an important risk mitigation tool that arises from combining several asset categories (stocks, bonds, etc) or combining variety within a particular asset category, such as stocks. In fact, many experts believe that, for maximizing risk-adjusted returns, a portfolio mix of many types of assets is even more important than the mix of stocks in a portfolio. Therefore, first consideration should be given to allocating resources to stocks, bonds, gold, cash, etc. The stock allocation should be a secondary consideration. Within the stock category, investors traditionally seek to diversify according to industry sectors, geography, investment style (e.g., growth versus value) or market capitalization (e.g., nano, micro, small, medium, large, mega-cap) in order to minimize specific investment risks over the long term.
STOCKS SHOULD BE CONSIDERED LONG TERM INVESTMENTS. The dramatic increase in stock market volatility in recent years has created a professional trader’s paradise, but has also created a treacherous environment for other investors. Consequently, investors should have a long-term horizon of at least 5 years and preferably 7-10 years for their stock portfolios. Long time horizons provide flexibility to recover from protracted and dramatic market setbacks. Strict “buy-and-hold” strategies for individual stocks are not recommended, but needing to sell out of stock positions on short notice to raise cash for other purposes will not produce satisfactory investment results. Stocks may be “liquid” investments, but “fire” sales at steeply discounted prices provide little consolation to sellers.
INVESTING IN "BLUE CHIP" COMPANIES NO LONGER GUARANTEES INVESTMENT SUCCESS. During the last year, several venerable long-standing institutions disappeared or were saved from extinction by heroic government bailouts. AIG, Citigroup, Lehman, Fannie and Freddie and many other household names are on that list. An examination of the 30 stocks comprising the Dow-Jones Industrial Average shows that even major non-financial companies dramatically fell in value, some below $10 per share, during the past year. The past two years has proven that the idea of buying stock in today’s great companies and blindly holding them forever is a thing of the past.
Part 2 will highlight lessons specific to managing your money in these uncertain and turbulent times.
Thursday, March 19, 2009
How Much Are Your Social Security and Pension Benefits Worth?
As investors watch their investment portfolios dramatically shrink, they have come to realize that their social security and other pensions have become a more significant part of their financial security in retirement. But how do you compare monthly life-long payments with other lump sum asset totals shown on your financial statements? It is helpful to estimate the upfront, lump sum value of that life-long stream of monthly benefits. That estimate will answer the question: How much money would you need today in a lump sum to generate that same monthly social security or pension benefit for the rest of your life?
First, you need to make some assumptions: What is your monthly social security or pension benefit? What is your life expectancy? Those two assumptions indicate how much and how long your lump sum must provide benefits. What interest rate should you assume that lump sum earns while it's rendering those monthly payments? Finally, and for the sake of simplicity, let’s assume that the benefits end with your death. A simple example illustrates these assumptions in action. Let’s say your monthly benefit is $1,000 and you expect to live another 25 years. Generally, you would select as your interest rate a long-term treasury rate equal to or greater than your life expectancy, because you would want to invest your lump sum to insure the safety of principal and interest for the rest of your life. In this example, you might select a 30-year treasury rate, which currently yields nearly 4%.
Armed with your assumptions, there are two easy methods for performing the actual calculation. The first method is to use a sophisticated hand calculator that has financial function keys and do the same calculations you would do if you were calculating mortgage payments. With mortgage calculations, you typically enter the mortgage balance, mortgage rate and mortgage term and solve for the monthly mortgage payment. In order to calculate the lump sum value of your social security benefits, you enter the interest rate (instead of a mortgage rate) and your life expectancy (instead of the mortgage term). You then enter your monthly benefit (using the mortgage payment key) and solve for the lump sum amount (obtained from the mortgage balance key). With a typical mortgage calculation, you enter the mortgage balance and solve for the monthly mortgage payment. With the lump sum calculation, you enter the monthly benefit and solve for the lump sum balance. Don’t forget to use monthly interest rates and express your life expectancy in months, if you use monthly benefits in your calculation. Otherwise, use annual interest rates, your life expectancy expressed in years and your annual benefits in the calculation.
The second method is to use a present value ordinary annuity table and find the annuity factor that corresponds to your interest rate and life expectancy assumptions. In our example, we assume a 4% rate and a 25-year life expectancy, which according to the table, indicates an annuity factor of 15.6. Multiplying your annual benefit of $12,000 by that 15.6 factor, the estimate of the lump sum value of social security benefits in this example is $187,200. Either method works, so you decide which to use.
Lump sum value estimates can be useful in your investment allocation planning process as they allow you to translate guaranteed monthly income streams into upfront totals that can then be easily compared to the amounts of other assets in your portfolio. They also offer additional insight into the potential net worth of your investment holdings. However, you should realize that those values are intangible, analytic in nature and exist only on paper, i.e., you can't cash them in at a bank. They are also likely to change as interest rates, your life expectancy, and social security benefits inevitably change during your lifetime. Due to their tentative nature and potential volatility, such estimates may be useful in formulating a long-term strategy for your finances, but less useful in making specific, tactical investment decisions.
First, you need to make some assumptions: What is your monthly social security or pension benefit? What is your life expectancy? Those two assumptions indicate how much and how long your lump sum must provide benefits. What interest rate should you assume that lump sum earns while it's rendering those monthly payments? Finally, and for the sake of simplicity, let’s assume that the benefits end with your death. A simple example illustrates these assumptions in action. Let’s say your monthly benefit is $1,000 and you expect to live another 25 years. Generally, you would select as your interest rate a long-term treasury rate equal to or greater than your life expectancy, because you would want to invest your lump sum to insure the safety of principal and interest for the rest of your life. In this example, you might select a 30-year treasury rate, which currently yields nearly 4%.
Armed with your assumptions, there are two easy methods for performing the actual calculation. The first method is to use a sophisticated hand calculator that has financial function keys and do the same calculations you would do if you were calculating mortgage payments. With mortgage calculations, you typically enter the mortgage balance, mortgage rate and mortgage term and solve for the monthly mortgage payment. In order to calculate the lump sum value of your social security benefits, you enter the interest rate (instead of a mortgage rate) and your life expectancy (instead of the mortgage term). You then enter your monthly benefit (using the mortgage payment key) and solve for the lump sum amount (obtained from the mortgage balance key). With a typical mortgage calculation, you enter the mortgage balance and solve for the monthly mortgage payment. With the lump sum calculation, you enter the monthly benefit and solve for the lump sum balance. Don’t forget to use monthly interest rates and express your life expectancy in months, if you use monthly benefits in your calculation. Otherwise, use annual interest rates, your life expectancy expressed in years and your annual benefits in the calculation.
The second method is to use a present value ordinary annuity table and find the annuity factor that corresponds to your interest rate and life expectancy assumptions. In our example, we assume a 4% rate and a 25-year life expectancy, which according to the table, indicates an annuity factor of 15.6. Multiplying your annual benefit of $12,000 by that 15.6 factor, the estimate of the lump sum value of social security benefits in this example is $187,200. Either method works, so you decide which to use.
Lump sum value estimates can be useful in your investment allocation planning process as they allow you to translate guaranteed monthly income streams into upfront totals that can then be easily compared to the amounts of other assets in your portfolio. They also offer additional insight into the potential net worth of your investment holdings. However, you should realize that those values are intangible, analytic in nature and exist only on paper, i.e., you can't cash them in at a bank. They are also likely to change as interest rates, your life expectancy, and social security benefits inevitably change during your lifetime. Due to their tentative nature and potential volatility, such estimates may be useful in formulating a long-term strategy for your finances, but less useful in making specific, tactical investment decisions.
Monday, March 16, 2009
Government Deficit Spending Means More Taxes, High Inflation and a Weak Dollar
Everyone knows that Government spending today will mean higher taxes tomorrow. Far fewer realize that the huge budget deficits being created now will almost certainly bring us high inflation, even hyperinflation, and a significantly devalued dollar. This year the Government will need to borrow at least $2 Trillion, and if the Obama Administration has its way, trillions more will be needed during the next several years. However, regardless of Mr. Obama’s appetite for spending, the magnitude of U.S. public debt and its size as a percentage of our gross domestic output are projected to grow at astounding rates during the next several decades.
How will we pay it all back? Historically, the Government raised money by issuing debt that Americans and foreigners alike eagerly held as investments. Currently, Americans, including our Government, and foreigners each own half of our public debt. According to a recent report by Fox News, China alone owns a quarter of our debt and is seen as the most likely buyer going forward, given its rapidly expanding appetite for our debt in recent years. But China too has its own economic problems and is getting serious reservations about increasing its exposure going forward. The other method of repaying debt is to raise taxes, but doing so in any meaningful way during this recession would be ill-advised. So where will the money come from?
The Government will likely have no choice but to print the extraordinary amount of money it needs, which will be highly- if not hyper- inflationary. (There is no agreement on a definition of hyperinflation but suffice it to say that if you quote monthly, rather than annual, inflation rates you’re probably there.) Checking inflation won't be easy either. Normally, during periods of high inflation, especially inflation induced by expansionary monetary policy, the Government raises interest rates to choke off inflation. But this time its hands would be tied by a seriously debt overburdened American public that would suffocate from the proportionately greater impact that higher interest rates would have on its household finances; finances dominated by high levels of mortgage, auto and consumer credit. Consequently, the Government is unlikely to curb our prospective high inflation by potentially pushing our economy into another Great Depression.
Needless to say, deficit-spending-induced high inflation will devastate our currency. The likely combination of high inflation and a weak dollar will further diminish the purchasing power of all Americans, especially retirees living on fixed incomes. Many economists believe that a good proxy for an economy’s stability and strength is the stability and strength of its currency, so a weak and unstable dollar will likely tarnish America’s star status in the world economy. America will also be seen as a riskier place to invest and cause many investors to flee our capital markets; effects that will further raise our interest rates and weaken our dollar.
I am hopeful none of this will happen, but many believe it will, at least to some degree, if we don’t change our spending habits. Given the risk of this scenario playing out, it would not be surprising to see investors favor inflation-hedges such as gold and other commodities and U.S. companies with significant exports abroad. Investors will also shy away from dollar-denominated investments by generally diversifying globally. The implications for our policy makers should be crystal clear: be extremely careful when spending our money, especially money we don’t have and need to borrow.
How will we pay it all back? Historically, the Government raised money by issuing debt that Americans and foreigners alike eagerly held as investments. Currently, Americans, including our Government, and foreigners each own half of our public debt. According to a recent report by Fox News, China alone owns a quarter of our debt and is seen as the most likely buyer going forward, given its rapidly expanding appetite for our debt in recent years. But China too has its own economic problems and is getting serious reservations about increasing its exposure going forward. The other method of repaying debt is to raise taxes, but doing so in any meaningful way during this recession would be ill-advised. So where will the money come from?
The Government will likely have no choice but to print the extraordinary amount of money it needs, which will be highly- if not hyper- inflationary. (There is no agreement on a definition of hyperinflation but suffice it to say that if you quote monthly, rather than annual, inflation rates you’re probably there.) Checking inflation won't be easy either. Normally, during periods of high inflation, especially inflation induced by expansionary monetary policy, the Government raises interest rates to choke off inflation. But this time its hands would be tied by a seriously debt overburdened American public that would suffocate from the proportionately greater impact that higher interest rates would have on its household finances; finances dominated by high levels of mortgage, auto and consumer credit. Consequently, the Government is unlikely to curb our prospective high inflation by potentially pushing our economy into another Great Depression.
Needless to say, deficit-spending-induced high inflation will devastate our currency. The likely combination of high inflation and a weak dollar will further diminish the purchasing power of all Americans, especially retirees living on fixed incomes. Many economists believe that a good proxy for an economy’s stability and strength is the stability and strength of its currency, so a weak and unstable dollar will likely tarnish America’s star status in the world economy. America will also be seen as a riskier place to invest and cause many investors to flee our capital markets; effects that will further raise our interest rates and weaken our dollar.
I am hopeful none of this will happen, but many believe it will, at least to some degree, if we don’t change our spending habits. Given the risk of this scenario playing out, it would not be surprising to see investors favor inflation-hedges such as gold and other commodities and U.S. companies with significant exports abroad. Investors will also shy away from dollar-denominated investments by generally diversifying globally. The implications for our policy makers should be crystal clear: be extremely careful when spending our money, especially money we don’t have and need to borrow.
Wednesday, March 11, 2009
Mr. President, Our Economy Needs Focused, Hands-0n, Non-Partisan Leadership
Dear Mr. President:
You must feel the weight of the entire free world on your shoulders, and I do not envy or minimize the difficulty of the mission you have before you. Notwithstanding the heroic efforts by you and your administration thus far, and with all due respect to you and your office, it seems painfully obvious that a timely and robust economic recovery will require more focused, hands-on and non-partisan leadership from you.
First, your administration should set a priority to solving our most immediate problems in the critical path of recovery before undertaking any long range economic planning. The banking crisis should have your complete and undivided attention, and is at the root of housing foreclosures, unemployment and our broader recession. Amending mark-to-market accounting rules and reinstating stock uptick rules would be a good place to start and doing so could realistically strengthen and stabilize the financial system. Current mark-to-market rules distort true market value and provide an unrealistic value assessment of bank assets. Re-instated uptick rules will thwart the senseless, relentless short selling that serves no useful purpose but to panic investors and drive otherwise viable companies out of business. Amending both rules should not be viewed as expedient solutions to our banking problem, as they make long run sense for improving our financial system.
You want to capitalize on your popularity by pushing through your entire long-term agenda right now. It seems obvious to me that energy independence, healthcare reform, and education reform cannot take place unless and until we fix banking, housing and the general economy. Also, your “drink from a fire hose” approach has been received as somewhat reckless and appears that you’ve bitten off more than you can chew. It’s difficult for us to swallow too. Also, you must be aware that if you are successful in solving our global banking problem, you will become an international hero and perhaps the most popular political leader in modern history. With such an achievement, your broader agenda would likely pass during your likely second term in office.
Second, America needs you to personally steer us through this mess. Save your energy and forego the unnecessary travel and superficial speaking engagements. You need to demonstrate that you have your hands around our nation’s critical issues and need to speak specifically and convincingly about their resolution. Delegating authority to Congress to draft and expediently pass trillion dollar legislation that could profoundly and irrevocably change our lives does not instill a lot of confidence that you are in charge of the process or fully appreciate its importance.
Third, you should resist implementing politically expedient policies that will likely hinder the rescue our economy. Dispense with the politics-as-usual you promised during your campaign. Your trusted advisors can tell you that massive and wasteful government spending, especially for gratuitous earmark projects, is an ineffective method of reversing an economic recession. Raising taxes on small business, the investments of the rich, and on energy (from a cap and trade policy) won’t help either. Use the tremendous political capital you possess to do what you know is right and told us you would do in your campaign. You’re a popular President in the “honeymoon” period of your administration. A more judicious approach to spending and a truly fiscally responsible posture would go a long way toward rebuilding confidence in our government and our economy.
Widespread confidence in you and your policies will be required to restore America’s prosperity.
You must feel the weight of the entire free world on your shoulders, and I do not envy or minimize the difficulty of the mission you have before you. Notwithstanding the heroic efforts by you and your administration thus far, and with all due respect to you and your office, it seems painfully obvious that a timely and robust economic recovery will require more focused, hands-on and non-partisan leadership from you.
First, your administration should set a priority to solving our most immediate problems in the critical path of recovery before undertaking any long range economic planning. The banking crisis should have your complete and undivided attention, and is at the root of housing foreclosures, unemployment and our broader recession. Amending mark-to-market accounting rules and reinstating stock uptick rules would be a good place to start and doing so could realistically strengthen and stabilize the financial system. Current mark-to-market rules distort true market value and provide an unrealistic value assessment of bank assets. Re-instated uptick rules will thwart the senseless, relentless short selling that serves no useful purpose but to panic investors and drive otherwise viable companies out of business. Amending both rules should not be viewed as expedient solutions to our banking problem, as they make long run sense for improving our financial system.
You want to capitalize on your popularity by pushing through your entire long-term agenda right now. It seems obvious to me that energy independence, healthcare reform, and education reform cannot take place unless and until we fix banking, housing and the general economy. Also, your “drink from a fire hose” approach has been received as somewhat reckless and appears that you’ve bitten off more than you can chew. It’s difficult for us to swallow too. Also, you must be aware that if you are successful in solving our global banking problem, you will become an international hero and perhaps the most popular political leader in modern history. With such an achievement, your broader agenda would likely pass during your likely second term in office.
Second, America needs you to personally steer us through this mess. Save your energy and forego the unnecessary travel and superficial speaking engagements. You need to demonstrate that you have your hands around our nation’s critical issues and need to speak specifically and convincingly about their resolution. Delegating authority to Congress to draft and expediently pass trillion dollar legislation that could profoundly and irrevocably change our lives does not instill a lot of confidence that you are in charge of the process or fully appreciate its importance.
Third, you should resist implementing politically expedient policies that will likely hinder the rescue our economy. Dispense with the politics-as-usual you promised during your campaign. Your trusted advisors can tell you that massive and wasteful government spending, especially for gratuitous earmark projects, is an ineffective method of reversing an economic recession. Raising taxes on small business, the investments of the rich, and on energy (from a cap and trade policy) won’t help either. Use the tremendous political capital you possess to do what you know is right and told us you would do in your campaign. You’re a popular President in the “honeymoon” period of your administration. A more judicious approach to spending and a truly fiscally responsible posture would go a long way toward rebuilding confidence in our government and our economy.
Widespread confidence in you and your policies will be required to restore America’s prosperity.
Monday, March 9, 2009
The Truth About Luxury Apartment Living In South Florida
Like many of my generation, I left fast pace, aggressive city living for a kinder, gentler lifestyle in South Florida. I sought temporary living accommodations, because I was sure that my housing wants and needs would become more apparent and defined once I settled into the tropical lifestyle, assuming they didn’t change altogether. So, I set out to rent an apartment from among South Florida’s abundant supply of luxury apartment communities.
Once I had made my decision to move I was eager to find a place to live and allotted myself a week in which to accomplish the task. Before leaving for Florida, I started my groundwork and searched online using a variety of websites that cater to the needs of people relocating and seeking housing in Florida. After I arrived in Florida, I picked up a couple of free paperback guides at the local supermarket, which proved more useful than I ever would have imagined. Finding a new home was going to be a snap, I thought.
IF YOU DON’T KNOW WHAT YOU WANT, YOU WON’T FIND IT HERE.I quickly learned that sometimes too many options can be (almost) as frustrating as too few, and came down with an acute case of “analysis paralysis” trying to sift through the dozens of possibilities I had before me. Initially, all I really knew was that I needed a place to live and that I wanted it to be somewhere on Florida’s Gold Coast, that vast region stretching from West Palm Beach south to the Florida Keys. With the Atlantic Ocean bordering the region to the east and the everglades to the west, I felt fortunate that my region of interest was fairly narrow, even if it had been longer than I would have preferred.
My next move was to buy a map of the region and select some criteria to focus my search and further limit my search area. Some considerations were more obvious than others were. For example, I knew I’d need a job and that, in my field, the prospects for finding one would dramatically increase with my proximity to the larger, denser urban areas of Ft. Lauderdale and Miami. However, I also knew that, with my luck, it was more than a possibility I’d land a job in less likely West Palm Beach and probably the day after the ink dried on my apartment lease in a community in the midst of one of those more prominent cities. I decided to hedge my bet and search within the nondescript area of Southern Palm Beach County-Northern Broward County, somewhat equidistant in space and time between the polar extremes of West Palm Beach and Miami.
In an attempt to further minimize my potential commutation time, I figured it might be a good idea to find a place near the region’s two major north-south highways, I-95 and the Florida Turnpike. Seeing still too many options on my list, I knew that further limiting myself to moderately priced communities would be sure to eliminate both the high end and more affordable extremes. I soon discovered that seeking moderate pricing would also narrow the geographic scope of my search, as I would now be looking too cheap to be near the Atlantic Ocean, but expensive enough to avoid sleeping with the gators in the glades.
Although I had done my best to winnow my list, I still had too many communities to evaluate in detail within the week’s deadline I had set for myself. I also knew that the kind of evaluation I needed to do would require more than a seat-of-the-pants review of the various apartment websites and paperback guides that I had at my disposal. It was time to get out in the field and kick a little dirt and wrestle with some bricks and mortar.
YOU CAN’T GET THERE FROM HERE. How hard could that be? I wondered. I had limited myself to a mere twenty-mile radius centered somewhere on Military Trail, between Boca Raton and Delray Beach, and I already possessed the complete addresses for all the communities I intended to visit. All I had to do was plan a logistically sensible itinerary, hop in my car and go take a look. As I started to plot each day’s itinerary on my map, I realized that having an address offered little insight into a destination’s location. After all, this was laid back Florida where residents come and go at a leisurely pace and show little concern about how long it takes to find their destination. Sure, South Florida has addresses, but no one abides by them, not even the mailmen. Around these parts, if you want to know where to go, you ask someone for directions, and get accustomed to hearing them in terms of mileage, number of traffic lights, or counting local landmarks like Winn-Dixies or Mobil-Exxon stations.
I learned quickly that most street addresses are useless, especially those on streets that don’t extend more that a couple of miles, or those on streets that change their names occasionally along the route. Adding to the confusion is the fact that every other town seems to have a road, street, avenue, or boulevard named “Atlantic” or “Ocean,” or has street numbers and directional designations that from the perspective of passersby seem to emanate from some fictitious place. Streets that don’t calibrate evenly like, for example, NE (Northeast) 47th street, followed immediately by NE 52nd street, and then NE 89th street are bad enough. But, when they intersect, say, SW (Southwest) 11th avenue, you start to wonder if you’ve found a new wrinkle in our universe’s space-time continuum.
Many apartment communities just make matters worse by concocting their own “exclusive” street addresses specially designed to give their locations cache, even if they lack a spatial context. In reality, the addresses exist only on their own community site maps and usually relate to nothing more than a long driveway extending from public access roads to their front gates.
LOTS OF DATA, BUT NOT ENOUGH INFORMATION. Street address numbers are among the most heavily guarded secrets in Florida. Many places don’t even bother to display them or display them so poorly that even a pair of eagle eyes and x-ray vision can’t spot them modestly displayed behind palm trees, store signs, shopping center marquees and the like. Besides, in my experience, following address numbers are more likely to hinder than help. Sometimes they lull you into a false sense of security as you observe them ascending or descending toward your destination only to find them jump ahead or completely reverse direction when you pass from one town to the next.
After these revelations, I knew that nothing short of some serious old-fashioned dead reckoning was going to be required in order to find my way. That meant picking up a phone, calling leasing offices, and asking for specific driving directions to their apartment communities. In some cases, I literally had to simulate in my mind taking the actual trip by visualizing all its landmarks before ever leaving my driveway. Gone were the days when travel directions were a matter of pinpointing a major intersection near a destination on a map and then leaving the rest up to an organized grid of roads to get there.
As I approached the entrance of the first community on my list, I couldn’t help feeling the sense of accomplishment I imagined Magellan had felt after circumnavigating the globe, albeit on a much, much smaller scale. However, I realized my celebration was pre-mature as I sat in my car outside the property’s heavy metal gates trying to guess the magic words that would get me inside. I followed the instructions posted on the gates’ sophisticated telephone directory system, but was denied access just the same. I ultimately ended up sneaking in behind a resident entering with an electronic key card. I learned during subsequent visits to these so-called secured, gated communities that sneaking in was part of the normal routine, which explains why none of the representatives I met at the various leasing offices I visited ever wondered how I got in without their assistance.
GOOD LEASING FOLKS CAN EASE THE PROCESS. I’m pleased to say that most of the leasing representatives I met at the more than two- dozen communities I visited that week were highly professional and efficient in discharging their obligation to enlighten me about their apartments. The really good ones cut to the chase and sized-up their offerings quickly. Many answered questions before I had asked them and usually with a few well chosen words and the aid of brochures, fact sheets and apartment floor plans and site maps. I was particularly glad when some representatives dispensed with filling out all the pre-application paperwork until after showing me their available units. As far as I was concerned, it was a complete waste of time for both of us unless and until I decided I wanted to live there.
DON’T BE FOOLED BY SMOKE AND MIRRORS. The fun part of the process was actually making inspections of the apartments. It was also the time I felt the need to start paying close attention to what I was doing. Some apartment communities will only show you model apartments they reserve specifically for that purpose, which are designed to help prospective tenants visualize living there. Needless to say, virtually all the models I saw looked brand new, tastefully furnished, and in much better condition than the apartments actually available to rent. And, except for giving a sense of the layout of a floor plan (and some communities have many) and how furniture might be arranged, models give little insight into the finish quality of the apartments actually available to new tenants. They also offer no sense of your neighbors or any other features that relate to the ambience of your apartment, such as its views or its exposure to light, air, and noise.
PRETEND YOU LIVE THERE. I learned quickly that the easiest way to become enthusiastic about or eliminate an apartment was to examine its layout, especially paying particular attention to room configurations, connecting walls and sight lines. If, for example, while standing at the front door, I was able to see all the bedroom and bathroom doors, I knew immediately I was ready to move on to the next apartment and hopefully one that would give the appearance (if not the reality) of more privacy. If layouts flowed logically with, say, kitchens situated near dining areas but separated from other living areas, I was satisfied and moved on to examining the rooms themselves.
During my inspections, I came to appreciate that room quality was not only a matter of size, but also shape and wall space considerations. Large rooms are great, but those with imaginative polygon shapes create odd angled corners that are difficult to utilize. In the same way, wall surfaces that are too encumbered with closets, windows and doors could make even rudimentary furniture placement a frustrating exercise.
The number and placement of doors and how well they separate living spaces was another consideration. For example, some master bathrooms have toilet closets, but no doors separating the shower/bath tub from bedrooms, which won’t suffice if you’re claustrophobic or finicky about not wanting shower humidity spreading throughout your home. Kitchens without doors can be troublesome too, unless adequate care has been taken to prevent cooking odors from wafting throughout the home.
While examining rooms, I took particular note of the number and spacing of electric outlets, and telephone and cable jacks available throughout an apartment. It came as no surprise that older properties do not usually cater well to today’s space-age electrical, entertainment and telecommunications requirements.
SOME PRISONS HAVE MORE WINDOWS. Windows were by far the biggest disappointment I encountered in all apartments across the board. Generally, there aren’t enough of them, they’re small and rarely found in kitchens or bathrooms. To make matters worse, most (if not all) tended to be on one side of apartments. It amazes me that in a place like Florida with all its sunshine, clean air and pleasant climate (at least 6 months a year), more care isn’t taken by architects and builders to optimize the use of windows in residential structures. Suffice it to say that fresh air cross ventilation is hard to come by in Florida, so get used to working your air conditioner hard, because you’ll need it and every ceiling fan you can install to pump air through your home all day long, all year long. Another important factor about windows is simply the direction they face. For example, if you like it cool, you should select a northern exposure, or alternatively, if you’d rather bask in sunshine all day long, then a southern exposure will be to your liking. A preference for cool mornings or cool afternoons will translate into a preference for western and eastern exposures, respectively.
SO MUCH FOR AN OUTDOOR LIFESTYLE. Patios were my second biggest disappointment with Florida apartments, and for similar reasons as windows. In general, they’re too small and confining to provide a relaxed, comfortable living experience. Most amazingly, few patios are screened-in to provide adequate protection from all those lower forms of life that seem to outnumber humans by many orders of magnitude, especially during the summer. In addition, surprisingly few have overhanging roofs or eaves to provide that little extra protection from sunshine and rain that at times can enhance the patio living experience. On the other hand, most patios have such poor views and overlook such noisy mechanical equipment that you probably won’t want to spend any quality time out there anyway. Those of you who look forward to napping on the patio will best appreciate the importance of these seemingly nitpicky comments.
Among other factors, don’t overlook the importance of elevation to the overall quality of the apartment living experience. Most of the apartment communities I visited charge a nominal rental premium for an upper floor apartment (approximately $25 per month), probably because upper floor apartments don’t have pesky noisy neighbors overhead throwing cigarette butts off their patios. They are also less likely to be flooded from rainstorms and tend to receive fewer visits from all those critters you’ll find on your unscreened patios (ants, spiders, lizards, etc.) that Floridians have learned to coexist with. However, along with the superior views and access to light and air that upper floors provide is the excessive heat and possibility of leaks (on top floors). Upper floor units sometimes offer the amenity of a vaulted or cathedral ceiling that can enhance the light and air or feeling of spaciousness in an apartment.
DON’T BE TOO IMPRESSED WITH ALL THE SHINY GADGETS. During most of my apartment inspections, the leasing representatives did their best to talk around the aforementioned design flaws and tried to “sell” me on all the gadgets and labor saving conveniences that typically come with luxury apartments. Many apartments come equipped with washers and dryers (which I prefer to be installed in utility closets off the kitchen or outside on the patio, instead of adjacent to carpeted living areas). By the way, if washers and dryers aren’t featured in an apartment, you better get a peek at your apartment community’s on-site laundry facility. Many communities offer dishwashers, garbage disposals, oversized bathtubs, microwave ovens, refrigerators with icemakers, and one or more ceiling fans, in order to enhance the comfort of their apartments.
MAKE IT YOUR BUSINESS TO STRETCH YOUR LEGS. After touring apartments that met my basic criteria, I spent some time walking the communities to get a sense of their residents, a feel for their comfort and ambience and to inspect their amenities. Also, as I strolled I took particular note of how well properties appeared to be maintained. Although most luxury apartments will be up to snuff on the day you move in, even the newest and best built will require routine maintenance and repairs from time to time. Walking around may also give you some insight into the mindset and proficiency of the management and maintenance crew. If the common areas are well maintained (e.g., clean and recently painted, parking lots well paved, landscaping well groomed, and few signs of deferred maintenance), chances are better that the same philosophy and vigilance will apply to the upkeep of your apartment.
The best single place for a maintenance inspection is the pool and its surrounding lounge area, which usually is the most popular common area within a community. Most leasing tours for prospective tenants begin with a tour of the pool area, which is usually centrally located adjacent to the property’s leasing and property management center. As a community’s showcase, these areas are usually better maintained than other less visible areas. So, if the pool area needs a renovation, you should wonder how the rest of the property looks.
SWIMMING POOLS OR CEMENT PONDS? Even if the pool area is well maintained, you may not be all that impressed with the scale and scope of those facilities. Before I started my search it was inconceivable that I would find such woefully inadequate pool facilities in a place where sun bathing and swimming take place more than 300 days per year. In general, pools are small and shallow (barely 5 feet deep in some cases), not very well maintained and surrounded with only enough lounge chairs to accommodate 5% of their tenant population. Most of the places I visited had whirlpool spas, but some are barely larger than bath tubs, are not particularly well maintained, and are as likely to be out of service as they are to be operating on any given day of the week. Even more surprising is the fact that some brand new apartment communities I visited, which typically pride themselves on being loaded with recreational amenities, are not even bothering to build these all-popular whirlpool spas into their otherwise state-of-the-art properties.
DO-IT-YOURSELF TORTURE CHAMBERS. In most cases, health clubs are small, dark unfriendly spaces that suffer from a serious lack of cable TV entertainment and exterior light and views. If I had to use such facilities, I know I’d be even more eager than usual to finish my workout. Except for basic treadmills, stationary bicycles and free weights, the other equipment in some of these facilities looks as though it is borrowed from The Smithsonian. As for other forms of recreation, some apartment communities provide tennis courts, bicycle paths, basketball courts and kiddy playgrounds, but not necessarily in a state of repair you might consider inviting.
DON’T TAKE ANYTHING FOR GRANTED. After one inspection, I started to pay attention to some of the amenities I would normally take for granted, such as where and how tenants go about retrieving mail or disposing of garbage. Tenant mail facilities range from the expected (i.e., located near apartments, sheltered from the elements by a breeze way or some other structure) to the ridiculous (i.e., all huddled together in the middle of a parking lot completely unprotected from the rain and sunshine, and dangerously close to moving vehicles). You may not mind waiting for the rain to stop to pick up your mail, but you can rest assured the mailman isn’t going to wait when he/she delivers it. If you live in one of those unfortunate places, you better have your mail delivered to a post office box, or get used to opening soggy mail.
As for the trash disposal, I resigned myself to the fact that the best I could expect would be having one large compactor and storage facility located near the exit of my community, regardless of how large an area that might be. The obvious advantage of such an arrangement is that tenants won’t have to smell or look at garbage anywhere else within the community and won’t have to be bothered by noisy garbage men carting it away in the wee morning hours. However, I’m still getting used to a routine of hopping in my car every time I need to dispose of trash or coordinating garbage runs with my daily travel schedule.
PEEK OVER THAT SECURITY GATE BEFORE SIGNING ON THE DOTTED LINE. Before registering a community on my short list of acceptable options, I made sure I drove completely around its periphery, and noted its proximity to public utility plants, highway interchanges, or some other equally undesirable land uses. In the process, I was sure to check out its neighborhood amenities, especially within a five-minute drive. Most appealing community locales were off main drags but near most of the daily conveniences I’d likely need, including supermarkets, restaurants, drug stores, banks, movies, etc.
Communities within 15 minutes of shopping centers, entertainment hubs and other desirable landmarks were placed high on my short list. As a contrast, some of the communities I visited were long hauls from commercial activity of any kind, and some were near special facilities I’d be more likely to visit on a monthly or annual basis, like Lowe’s Home Improvements, Home Depot, furniture outlets, vacuum cleaner distributors, and so on.
FINAL OBSERVATIONS. I am pleased to report that I live in a community that provides a reasonable blend of the four major features I had sought from the outset: decent living accommodations (spacious, functional layout, with a view); basic community amenities (good swimming pool and safe, convenient access to personal mail boxes and trash disposal facilities); abundant neighborhood shopping opportunities; and good accessibility to major highways and regional employment centers. Best of all, I reside near the intersection of two important road arteries, which means visitors can find me on a map even using the most schematic maps of the region.
Over the course of my inspections, certain facts emerged as apparent truths. And, you should be aware that some of the foregoing comments apply to other areas of Florida and other types of housing (like condominiums and single family homes) as well as luxury apartment rentals. Readers are encouraged to verify similarities and differences across geographic areas and housing types based on their own experience.
Some general comments are worth noting. Notwithstanding the extreme volatility in residential real estate markets recently, Luxury garden-apartment-style communities in this area of South Florida still rent for $1.00 (give or take) per square foot per month. That means a 900 square foot apartment will rent for approximately $900 per month. Not surprisingly, one bedroom units have the highest per square foot rents; three bedroom units the lowest. Some communities charge extra for water, sewer and trash removal. Most charge a rental premium for certain apartment views (especially golf course or lake views), upper floor apartments and pets.
Newer doesn’t always mean better and be aware that down here 10 years is considered old, if not a lifetime. Unlike other more traditional regions of the US, old residences down here are not considered classic, vintage, or quaint, but rather just plain obsolete and undesirable. However, as the expression goes, “they ain’t building them like they used to” and if you want spacious, well proportioned, logical layouts you’re going to have to look at the old stuff. The best compromise is to find an old unit that has recently been completely renovated and refurbished.
Age 55 plus communities cater to the seniors, but those without such designations don’t necessarily cater to the young single adult population. In my experience, the only tangible difference between the tenancies of the two types is the existence of lots of toddlers and teenagers in the latter.
Like everything else in life, tradeoffs do exist in trying to find that perfect blend of apartment features. In South Florida, within a given price range, if you want to be near the Ocean, you’re going to accept older, lesser accommodations. Newer properties tend to have more and better site amenities, such as pools, health clubs and tennis courts, but tend to be located farther away from regional employment centers and shops and facilities you’ll need to visit daily, such as food stores, restaurants, drug stores, banks, etc.
Finally, if you want to enjoy fresh air, sunshine and truly experience the lifestyle that has fostered Florida’s growth during the past several decades, you’ll just have to go to the beach!
Once I had made my decision to move I was eager to find a place to live and allotted myself a week in which to accomplish the task. Before leaving for Florida, I started my groundwork and searched online using a variety of websites that cater to the needs of people relocating and seeking housing in Florida. After I arrived in Florida, I picked up a couple of free paperback guides at the local supermarket, which proved more useful than I ever would have imagined. Finding a new home was going to be a snap, I thought.
IF YOU DON’T KNOW WHAT YOU WANT, YOU WON’T FIND IT HERE.I quickly learned that sometimes too many options can be (almost) as frustrating as too few, and came down with an acute case of “analysis paralysis” trying to sift through the dozens of possibilities I had before me. Initially, all I really knew was that I needed a place to live and that I wanted it to be somewhere on Florida’s Gold Coast, that vast region stretching from West Palm Beach south to the Florida Keys. With the Atlantic Ocean bordering the region to the east and the everglades to the west, I felt fortunate that my region of interest was fairly narrow, even if it had been longer than I would have preferred.
My next move was to buy a map of the region and select some criteria to focus my search and further limit my search area. Some considerations were more obvious than others were. For example, I knew I’d need a job and that, in my field, the prospects for finding one would dramatically increase with my proximity to the larger, denser urban areas of Ft. Lauderdale and Miami. However, I also knew that, with my luck, it was more than a possibility I’d land a job in less likely West Palm Beach and probably the day after the ink dried on my apartment lease in a community in the midst of one of those more prominent cities. I decided to hedge my bet and search within the nondescript area of Southern Palm Beach County-Northern Broward County, somewhat equidistant in space and time between the polar extremes of West Palm Beach and Miami.
In an attempt to further minimize my potential commutation time, I figured it might be a good idea to find a place near the region’s two major north-south highways, I-95 and the Florida Turnpike. Seeing still too many options on my list, I knew that further limiting myself to moderately priced communities would be sure to eliminate both the high end and more affordable extremes. I soon discovered that seeking moderate pricing would also narrow the geographic scope of my search, as I would now be looking too cheap to be near the Atlantic Ocean, but expensive enough to avoid sleeping with the gators in the glades.
Although I had done my best to winnow my list, I still had too many communities to evaluate in detail within the week’s deadline I had set for myself. I also knew that the kind of evaluation I needed to do would require more than a seat-of-the-pants review of the various apartment websites and paperback guides that I had at my disposal. It was time to get out in the field and kick a little dirt and wrestle with some bricks and mortar.
YOU CAN’T GET THERE FROM HERE. How hard could that be? I wondered. I had limited myself to a mere twenty-mile radius centered somewhere on Military Trail, between Boca Raton and Delray Beach, and I already possessed the complete addresses for all the communities I intended to visit. All I had to do was plan a logistically sensible itinerary, hop in my car and go take a look. As I started to plot each day’s itinerary on my map, I realized that having an address offered little insight into a destination’s location. After all, this was laid back Florida where residents come and go at a leisurely pace and show little concern about how long it takes to find their destination. Sure, South Florida has addresses, but no one abides by them, not even the mailmen. Around these parts, if you want to know where to go, you ask someone for directions, and get accustomed to hearing them in terms of mileage, number of traffic lights, or counting local landmarks like Winn-Dixies or Mobil-Exxon stations.
I learned quickly that most street addresses are useless, especially those on streets that don’t extend more that a couple of miles, or those on streets that change their names occasionally along the route. Adding to the confusion is the fact that every other town seems to have a road, street, avenue, or boulevard named “Atlantic” or “Ocean,” or has street numbers and directional designations that from the perspective of passersby seem to emanate from some fictitious place. Streets that don’t calibrate evenly like, for example, NE (Northeast) 47th street, followed immediately by NE 52nd street, and then NE 89th street are bad enough. But, when they intersect, say, SW (Southwest) 11th avenue, you start to wonder if you’ve found a new wrinkle in our universe’s space-time continuum.
Many apartment communities just make matters worse by concocting their own “exclusive” street addresses specially designed to give their locations cache, even if they lack a spatial context. In reality, the addresses exist only on their own community site maps and usually relate to nothing more than a long driveway extending from public access roads to their front gates.
LOTS OF DATA, BUT NOT ENOUGH INFORMATION. Street address numbers are among the most heavily guarded secrets in Florida. Many places don’t even bother to display them or display them so poorly that even a pair of eagle eyes and x-ray vision can’t spot them modestly displayed behind palm trees, store signs, shopping center marquees and the like. Besides, in my experience, following address numbers are more likely to hinder than help. Sometimes they lull you into a false sense of security as you observe them ascending or descending toward your destination only to find them jump ahead or completely reverse direction when you pass from one town to the next.
After these revelations, I knew that nothing short of some serious old-fashioned dead reckoning was going to be required in order to find my way. That meant picking up a phone, calling leasing offices, and asking for specific driving directions to their apartment communities. In some cases, I literally had to simulate in my mind taking the actual trip by visualizing all its landmarks before ever leaving my driveway. Gone were the days when travel directions were a matter of pinpointing a major intersection near a destination on a map and then leaving the rest up to an organized grid of roads to get there.
As I approached the entrance of the first community on my list, I couldn’t help feeling the sense of accomplishment I imagined Magellan had felt after circumnavigating the globe, albeit on a much, much smaller scale. However, I realized my celebration was pre-mature as I sat in my car outside the property’s heavy metal gates trying to guess the magic words that would get me inside. I followed the instructions posted on the gates’ sophisticated telephone directory system, but was denied access just the same. I ultimately ended up sneaking in behind a resident entering with an electronic key card. I learned during subsequent visits to these so-called secured, gated communities that sneaking in was part of the normal routine, which explains why none of the representatives I met at the various leasing offices I visited ever wondered how I got in without their assistance.
GOOD LEASING FOLKS CAN EASE THE PROCESS. I’m pleased to say that most of the leasing representatives I met at the more than two- dozen communities I visited that week were highly professional and efficient in discharging their obligation to enlighten me about their apartments. The really good ones cut to the chase and sized-up their offerings quickly. Many answered questions before I had asked them and usually with a few well chosen words and the aid of brochures, fact sheets and apartment floor plans and site maps. I was particularly glad when some representatives dispensed with filling out all the pre-application paperwork until after showing me their available units. As far as I was concerned, it was a complete waste of time for both of us unless and until I decided I wanted to live there.
DON’T BE FOOLED BY SMOKE AND MIRRORS. The fun part of the process was actually making inspections of the apartments. It was also the time I felt the need to start paying close attention to what I was doing. Some apartment communities will only show you model apartments they reserve specifically for that purpose, which are designed to help prospective tenants visualize living there. Needless to say, virtually all the models I saw looked brand new, tastefully furnished, and in much better condition than the apartments actually available to rent. And, except for giving a sense of the layout of a floor plan (and some communities have many) and how furniture might be arranged, models give little insight into the finish quality of the apartments actually available to new tenants. They also offer no sense of your neighbors or any other features that relate to the ambience of your apartment, such as its views or its exposure to light, air, and noise.
PRETEND YOU LIVE THERE. I learned quickly that the easiest way to become enthusiastic about or eliminate an apartment was to examine its layout, especially paying particular attention to room configurations, connecting walls and sight lines. If, for example, while standing at the front door, I was able to see all the bedroom and bathroom doors, I knew immediately I was ready to move on to the next apartment and hopefully one that would give the appearance (if not the reality) of more privacy. If layouts flowed logically with, say, kitchens situated near dining areas but separated from other living areas, I was satisfied and moved on to examining the rooms themselves.
During my inspections, I came to appreciate that room quality was not only a matter of size, but also shape and wall space considerations. Large rooms are great, but those with imaginative polygon shapes create odd angled corners that are difficult to utilize. In the same way, wall surfaces that are too encumbered with closets, windows and doors could make even rudimentary furniture placement a frustrating exercise.
The number and placement of doors and how well they separate living spaces was another consideration. For example, some master bathrooms have toilet closets, but no doors separating the shower/bath tub from bedrooms, which won’t suffice if you’re claustrophobic or finicky about not wanting shower humidity spreading throughout your home. Kitchens without doors can be troublesome too, unless adequate care has been taken to prevent cooking odors from wafting throughout the home.
While examining rooms, I took particular note of the number and spacing of electric outlets, and telephone and cable jacks available throughout an apartment. It came as no surprise that older properties do not usually cater well to today’s space-age electrical, entertainment and telecommunications requirements.
SOME PRISONS HAVE MORE WINDOWS. Windows were by far the biggest disappointment I encountered in all apartments across the board. Generally, there aren’t enough of them, they’re small and rarely found in kitchens or bathrooms. To make matters worse, most (if not all) tended to be on one side of apartments. It amazes me that in a place like Florida with all its sunshine, clean air and pleasant climate (at least 6 months a year), more care isn’t taken by architects and builders to optimize the use of windows in residential structures. Suffice it to say that fresh air cross ventilation is hard to come by in Florida, so get used to working your air conditioner hard, because you’ll need it and every ceiling fan you can install to pump air through your home all day long, all year long. Another important factor about windows is simply the direction they face. For example, if you like it cool, you should select a northern exposure, or alternatively, if you’d rather bask in sunshine all day long, then a southern exposure will be to your liking. A preference for cool mornings or cool afternoons will translate into a preference for western and eastern exposures, respectively.
SO MUCH FOR AN OUTDOOR LIFESTYLE. Patios were my second biggest disappointment with Florida apartments, and for similar reasons as windows. In general, they’re too small and confining to provide a relaxed, comfortable living experience. Most amazingly, few patios are screened-in to provide adequate protection from all those lower forms of life that seem to outnumber humans by many orders of magnitude, especially during the summer. In addition, surprisingly few have overhanging roofs or eaves to provide that little extra protection from sunshine and rain that at times can enhance the patio living experience. On the other hand, most patios have such poor views and overlook such noisy mechanical equipment that you probably won’t want to spend any quality time out there anyway. Those of you who look forward to napping on the patio will best appreciate the importance of these seemingly nitpicky comments.
Among other factors, don’t overlook the importance of elevation to the overall quality of the apartment living experience. Most of the apartment communities I visited charge a nominal rental premium for an upper floor apartment (approximately $25 per month), probably because upper floor apartments don’t have pesky noisy neighbors overhead throwing cigarette butts off their patios. They are also less likely to be flooded from rainstorms and tend to receive fewer visits from all those critters you’ll find on your unscreened patios (ants, spiders, lizards, etc.) that Floridians have learned to coexist with. However, along with the superior views and access to light and air that upper floors provide is the excessive heat and possibility of leaks (on top floors). Upper floor units sometimes offer the amenity of a vaulted or cathedral ceiling that can enhance the light and air or feeling of spaciousness in an apartment.
DON’T BE TOO IMPRESSED WITH ALL THE SHINY GADGETS. During most of my apartment inspections, the leasing representatives did their best to talk around the aforementioned design flaws and tried to “sell” me on all the gadgets and labor saving conveniences that typically come with luxury apartments. Many apartments come equipped with washers and dryers (which I prefer to be installed in utility closets off the kitchen or outside on the patio, instead of adjacent to carpeted living areas). By the way, if washers and dryers aren’t featured in an apartment, you better get a peek at your apartment community’s on-site laundry facility. Many communities offer dishwashers, garbage disposals, oversized bathtubs, microwave ovens, refrigerators with icemakers, and one or more ceiling fans, in order to enhance the comfort of their apartments.
MAKE IT YOUR BUSINESS TO STRETCH YOUR LEGS. After touring apartments that met my basic criteria, I spent some time walking the communities to get a sense of their residents, a feel for their comfort and ambience and to inspect their amenities. Also, as I strolled I took particular note of how well properties appeared to be maintained. Although most luxury apartments will be up to snuff on the day you move in, even the newest and best built will require routine maintenance and repairs from time to time. Walking around may also give you some insight into the mindset and proficiency of the management and maintenance crew. If the common areas are well maintained (e.g., clean and recently painted, parking lots well paved, landscaping well groomed, and few signs of deferred maintenance), chances are better that the same philosophy and vigilance will apply to the upkeep of your apartment.
The best single place for a maintenance inspection is the pool and its surrounding lounge area, which usually is the most popular common area within a community. Most leasing tours for prospective tenants begin with a tour of the pool area, which is usually centrally located adjacent to the property’s leasing and property management center. As a community’s showcase, these areas are usually better maintained than other less visible areas. So, if the pool area needs a renovation, you should wonder how the rest of the property looks.
SWIMMING POOLS OR CEMENT PONDS? Even if the pool area is well maintained, you may not be all that impressed with the scale and scope of those facilities. Before I started my search it was inconceivable that I would find such woefully inadequate pool facilities in a place where sun bathing and swimming take place more than 300 days per year. In general, pools are small and shallow (barely 5 feet deep in some cases), not very well maintained and surrounded with only enough lounge chairs to accommodate 5% of their tenant population. Most of the places I visited had whirlpool spas, but some are barely larger than bath tubs, are not particularly well maintained, and are as likely to be out of service as they are to be operating on any given day of the week. Even more surprising is the fact that some brand new apartment communities I visited, which typically pride themselves on being loaded with recreational amenities, are not even bothering to build these all-popular whirlpool spas into their otherwise state-of-the-art properties.
DO-IT-YOURSELF TORTURE CHAMBERS. In most cases, health clubs are small, dark unfriendly spaces that suffer from a serious lack of cable TV entertainment and exterior light and views. If I had to use such facilities, I know I’d be even more eager than usual to finish my workout. Except for basic treadmills, stationary bicycles and free weights, the other equipment in some of these facilities looks as though it is borrowed from The Smithsonian. As for other forms of recreation, some apartment communities provide tennis courts, bicycle paths, basketball courts and kiddy playgrounds, but not necessarily in a state of repair you might consider inviting.
DON’T TAKE ANYTHING FOR GRANTED. After one inspection, I started to pay attention to some of the amenities I would normally take for granted, such as where and how tenants go about retrieving mail or disposing of garbage. Tenant mail facilities range from the expected (i.e., located near apartments, sheltered from the elements by a breeze way or some other structure) to the ridiculous (i.e., all huddled together in the middle of a parking lot completely unprotected from the rain and sunshine, and dangerously close to moving vehicles). You may not mind waiting for the rain to stop to pick up your mail, but you can rest assured the mailman isn’t going to wait when he/she delivers it. If you live in one of those unfortunate places, you better have your mail delivered to a post office box, or get used to opening soggy mail.
As for the trash disposal, I resigned myself to the fact that the best I could expect would be having one large compactor and storage facility located near the exit of my community, regardless of how large an area that might be. The obvious advantage of such an arrangement is that tenants won’t have to smell or look at garbage anywhere else within the community and won’t have to be bothered by noisy garbage men carting it away in the wee morning hours. However, I’m still getting used to a routine of hopping in my car every time I need to dispose of trash or coordinating garbage runs with my daily travel schedule.
PEEK OVER THAT SECURITY GATE BEFORE SIGNING ON THE DOTTED LINE. Before registering a community on my short list of acceptable options, I made sure I drove completely around its periphery, and noted its proximity to public utility plants, highway interchanges, or some other equally undesirable land uses. In the process, I was sure to check out its neighborhood amenities, especially within a five-minute drive. Most appealing community locales were off main drags but near most of the daily conveniences I’d likely need, including supermarkets, restaurants, drug stores, banks, movies, etc.
Communities within 15 minutes of shopping centers, entertainment hubs and other desirable landmarks were placed high on my short list. As a contrast, some of the communities I visited were long hauls from commercial activity of any kind, and some were near special facilities I’d be more likely to visit on a monthly or annual basis, like Lowe’s Home Improvements, Home Depot, furniture outlets, vacuum cleaner distributors, and so on.
FINAL OBSERVATIONS. I am pleased to report that I live in a community that provides a reasonable blend of the four major features I had sought from the outset: decent living accommodations (spacious, functional layout, with a view); basic community amenities (good swimming pool and safe, convenient access to personal mail boxes and trash disposal facilities); abundant neighborhood shopping opportunities; and good accessibility to major highways and regional employment centers. Best of all, I reside near the intersection of two important road arteries, which means visitors can find me on a map even using the most schematic maps of the region.
Over the course of my inspections, certain facts emerged as apparent truths. And, you should be aware that some of the foregoing comments apply to other areas of Florida and other types of housing (like condominiums and single family homes) as well as luxury apartment rentals. Readers are encouraged to verify similarities and differences across geographic areas and housing types based on their own experience.
Some general comments are worth noting. Notwithstanding the extreme volatility in residential real estate markets recently, Luxury garden-apartment-style communities in this area of South Florida still rent for $1.00 (give or take) per square foot per month. That means a 900 square foot apartment will rent for approximately $900 per month. Not surprisingly, one bedroom units have the highest per square foot rents; three bedroom units the lowest. Some communities charge extra for water, sewer and trash removal. Most charge a rental premium for certain apartment views (especially golf course or lake views), upper floor apartments and pets.
Newer doesn’t always mean better and be aware that down here 10 years is considered old, if not a lifetime. Unlike other more traditional regions of the US, old residences down here are not considered classic, vintage, or quaint, but rather just plain obsolete and undesirable. However, as the expression goes, “they ain’t building them like they used to” and if you want spacious, well proportioned, logical layouts you’re going to have to look at the old stuff. The best compromise is to find an old unit that has recently been completely renovated and refurbished.
Age 55 plus communities cater to the seniors, but those without such designations don’t necessarily cater to the young single adult population. In my experience, the only tangible difference between the tenancies of the two types is the existence of lots of toddlers and teenagers in the latter.
Like everything else in life, tradeoffs do exist in trying to find that perfect blend of apartment features. In South Florida, within a given price range, if you want to be near the Ocean, you’re going to accept older, lesser accommodations. Newer properties tend to have more and better site amenities, such as pools, health clubs and tennis courts, but tend to be located farther away from regional employment centers and shops and facilities you’ll need to visit daily, such as food stores, restaurants, drug stores, banks, etc.
Finally, if you want to enjoy fresh air, sunshine and truly experience the lifestyle that has fostered Florida’s growth during the past several decades, you’ll just have to go to the beach!
Thursday, March 5, 2009
South Florida Real Estate: Treasure or Fool's Gold?
Many observers are pointing to falling home prices as a once-in-a-generation opportunity to buy homes, especially here in South Florida . They believe buying real estate in these distressed markets is child’s play, as apparently low prices seem to offer significant downside protection against further price declines. I think it’s more likely a game of high stakes hot potato, where buyers should reconsider their positions when the music stops and shudder at the potential consequences of being “fortunate” to win their purchase bids.
Buyers don’t want distressed properties; they want financially and operationally secure properties that happen to be available at distressed prices. But aren’t foreclosures and short sales (pre-foreclosures) great deals? Maybe. In the case of a freestanding single family home, a foreclosure/short sale may be a great deal. These days, however, many of the newer homes are available only within planned communities and come with financial strings attached, called homeowners associations (HOA). These HOAs cause owners to effectively become financial partners with everyone in their community. Buying foreclosures/short sales in these planned communities are trickier. A buyer may fall into a money pit requiring payment of a “special assessment” resulting from all the unpaid maintenance charges from other foreclosures in a community. (Mortgage lenders repossessing homes are not generally liable for the unpaid monthly maintenance charges and assessments of deadbeat borrowers.)
Condominium communities are potentially the biggest nightmare, because owners are so inextricably and substantively linked, e.g., they share roofs and walls, not merely some recreational common areas. Consequently, monthly maintenance charges tend to be much larger with condos than with other types of housing. In addition, communities that sold homes at astronomical prices during the height of the real estate boom, 2006 give or take a year, are most likely to have a higher percentage of foreclosures, because those owners are significantly upside down on their mortgages, i.e., they owe significantly more on their loans than their homes are currently worth. In extreme cases, special assessments can increase the ultimate cost of acquiring a foreclosure or short sale by several thousand dollars. Along with financial considerations, buyers should further consider the negative psychological effect of living in a community abandoned by a significant share of owners.
To add to the potential nightmare, today many mortgage lenders have very limited capital and lending to homes in problematic communities are not high on their list of new business opportunities. Such a lack of available liquidity hinders acquisitions by new buyers, further reduces prices and thwarts the operational and financial recovery of such communities.
Unfortunately, the dramatic imbalance of the supply and demand for homes, especially in South Florida, combined with the current difficulties facing our lending institutions, most notably Fannie Mae and Freddie Mac, means it will probably be months before our housing markets stabilize and years before they fully recover. Going forward, and once markets stabilize, mortgage lenders should be encouraged to subordinate their claims against homes to those of homeowners associations, thereby enabling HOAs to recover unpaid maintenance charges from lenders when foreclosures occur in the future.
Why propose an initiative that could potentially hinder new loan activity? I believe that encouraging lenders to reserve capital for homeowners associations like they already do for property taxes and insurance will reduce their loan-to-value ratios and ultimately improve the quality of their loans. Encouragement to secure the fiscal integrity of HOAs will in the long run prove beneficial to homeowners and mortgage lenders that right now need to be bailed out, and will favor all the taxpayers who ultimately pay the bill.
Buyers don’t want distressed properties; they want financially and operationally secure properties that happen to be available at distressed prices. But aren’t foreclosures and short sales (pre-foreclosures) great deals? Maybe. In the case of a freestanding single family home, a foreclosure/short sale may be a great deal. These days, however, many of the newer homes are available only within planned communities and come with financial strings attached, called homeowners associations (HOA). These HOAs cause owners to effectively become financial partners with everyone in their community. Buying foreclosures/short sales in these planned communities are trickier. A buyer may fall into a money pit requiring payment of a “special assessment” resulting from all the unpaid maintenance charges from other foreclosures in a community. (Mortgage lenders repossessing homes are not generally liable for the unpaid monthly maintenance charges and assessments of deadbeat borrowers.)
Condominium communities are potentially the biggest nightmare, because owners are so inextricably and substantively linked, e.g., they share roofs and walls, not merely some recreational common areas. Consequently, monthly maintenance charges tend to be much larger with condos than with other types of housing. In addition, communities that sold homes at astronomical prices during the height of the real estate boom, 2006 give or take a year, are most likely to have a higher percentage of foreclosures, because those owners are significantly upside down on their mortgages, i.e., they owe significantly more on their loans than their homes are currently worth. In extreme cases, special assessments can increase the ultimate cost of acquiring a foreclosure or short sale by several thousand dollars. Along with financial considerations, buyers should further consider the negative psychological effect of living in a community abandoned by a significant share of owners.
To add to the potential nightmare, today many mortgage lenders have very limited capital and lending to homes in problematic communities are not high on their list of new business opportunities. Such a lack of available liquidity hinders acquisitions by new buyers, further reduces prices and thwarts the operational and financial recovery of such communities.
Unfortunately, the dramatic imbalance of the supply and demand for homes, especially in South Florida, combined with the current difficulties facing our lending institutions, most notably Fannie Mae and Freddie Mac, means it will probably be months before our housing markets stabilize and years before they fully recover. Going forward, and once markets stabilize, mortgage lenders should be encouraged to subordinate their claims against homes to those of homeowners associations, thereby enabling HOAs to recover unpaid maintenance charges from lenders when foreclosures occur in the future.
Why propose an initiative that could potentially hinder new loan activity? I believe that encouraging lenders to reserve capital for homeowners associations like they already do for property taxes and insurance will reduce their loan-to-value ratios and ultimately improve the quality of their loans. Encouragement to secure the fiscal integrity of HOAs will in the long run prove beneficial to homeowners and mortgage lenders that right now need to be bailed out, and will favor all the taxpayers who ultimately pay the bill.
Sunday, March 1, 2009
Manage Your Career or Someone Else Will!
In the opening scene of “Annie Hall,” an old movie by master director Woody Allen, Mr. Allen tells a joke in which one elderly lady complains to another about the poor quality of food they’ve been served, and the other lady agrees but adds that she thinks the portions are too small. Mr. Allen makes the point that the joke depicts his view of life—that it’s filled with misery and unhappiness but it ends much to soon. Unfortunately, the sad truth is that most of us who’ve worked for many years feel the same way about our jobs, yet live in constant fear of losing them to a restructuring, a corporate merger, a new technology, and these days recession or even depression!
Ask seasoned working people how they feel about their jobs and more than half will tell you how they hate their bosses, feel unappreciated, or are just plain bored to death or trapped in a dead end. Internet based companies and the New Economy was supposed to change all that until things fizzled earlier this decade. So now what? While you’re waiting for that dream job to come along, you need to make the most of the career you have.
Know the difference between jobs and career opportunities. What’s the difference? Probably very little when you’ve just left school and need to start paying off those student loans. A “job” keeps you alive; a “career” can make you feel alive. I’d be the first to admit that when you’re looking for your first job and have little or no experience, just about any job in your chosen field may seem like a career opportunity. When you’re starting out, it’s far more important to validate yourself in the workplace than it is to worry about whether you’re doing your best for mankind or pushing back intellectual frontiers. Besides, during the first several months of a new job, you’re usually busy learning the ropes of business etiquette, such as how to answer a telephone properly, or how to communicate with your superiors, colleagues and others in your office.
Consequently, time spent at virtually any job in your field is probably time well spent—for awhile. However, if you’re in the wrong position, it won’t take long for the “honeymoon” to end and for you to lose your infatuation with the idea of being gainfully employed. Suddenly, getting up in morning is a little more difficult, the workday drags, you’re bored, and you’re downright annoyed to be asked to work weekends.
So now what? The good news is that whether you’re working yet or not, you’re still holding all the cards: you’re young, educated, personable and eager to start working! Now, all you need is a strategy. Don’t believe that every move you’ve made since elementary school makes a profound or irreversible statement about who you are and what you’re all about. Careers are durable and flexible and don’t need to be precisely calculated every step of the way to be successful. The marketplace is somewhat forgiving of a background that meanders a bit at inception, and sometimes sees some diversity as beneficial to a well-rounded professional in these times of smaller, leaner organizations whose members must wear many hats.
However, careers need to be managed, and preferably with some strategic focus that guides you toward some long-term goal. Also, the meandering that may be favorably viewed when you’re 25 can be viewed as a lack of focus or commitment by the time you reach 35. By that time, a career floating with inertia can become much more difficult to navigate, and you’ll be spending a lot of time justifying your past and proving your commitment to your next job.
Suffice it to say that your careers are likely to be far more varied and volatile than ever before. Long gone are the days of feeling secure, confident and comfortable by honing a set of specific skills that you will use for your entire career. The career ride going forward is likely to be bumpy and risky. You’ll need to run faster just to avoid falling further behind on the job!
If you take the following steps to manage your career, you’ll be more satisfied and may actually end up doing something you enjoy.
Step 1. Know who you are. Carefully consider your personality, aptitudes, talents, skills, personal values, interests, and most importantly, your likes and dislikes. Few things in life will give you more pleasure than being paid for something you love to do, so it’s worth spending time to get it right.
Step 2. Strategize, don’t predict, your career. Set goals and objectives, identify the universe of possibilities, seriously consider your options, and go for it! Just remember to be flexible and open-minded; even allow yourself to dream. Few accurately predict where they’ll end up when they begin their careers, but those who act deliberately usually get ahead. Never rule out the possibilities that an uncertain future might bring, and be ready to capitalize on opportunities that might arise by chance or just plain dumb luck.
Step 3. Hunt eagerly (but efficiently) for opportunities. Take advantage of the full spectrum of publicly available sources at your disposal. Read, surf the net, network with contacts, and collect information and ideas. Temper your energy and enthusiasm with judgment and common sense and pursue only the most realistic and promising opportunities. There’s no shortcut for hard work and the inefficient process of trial and error that will be discouraging at times. Remember: nothing ventured, nothing gained.
Step 4. Sell yourself actively (if not aggressively) to employers. Begin with the paper chase of resumes, cover letters, and follow up letters; continue with telephone cold calls, making your sales pitches and attending networking meetings, and eventually you’ll get your share of interviews. Face the fact that your future employers won’t know why they need you until you tell them.
Step 5. Critically size up your opportunities. Consider all the basics: company growth, profitability, reputation, the job itself and how it relates to your goals and expectations, and your new boss and colleagues. Be diligent in your review. Ask hard questions and be satisfied with the answers. Take the time to determine if it’s opportunity or just temptation knocking. You’ll make well-informed decisions if you temper the facts with your gut instincts.
Step 6. Weigh all offers. Most people want employers to show them the money. Money is the easiest way to measure an opportunity’s attractiveness and it’s the most universally accepted method of keeping track of your career progress. You need money to survive, but money alone won’t keep you alive. Early in your career, you should select opportunities that build skills and experience, which will make you more valuable and marketable in the long run. Take a long-term perspective when making decisions.
Step 7. Frequently review your career options. Has your job measured up to your expectations? Is it the best use of your time at this point in your career? Is it time to move on? Is it difficult to admit you’ve either made a mistake or have outgrown your position? Sure, the truth sometimes hurts, but remember it’s the lies that leave the scars.
Like it or not, you’ll repeat this cycle many times during your 40 year career, but practice makes perfect. You’ll learn from your mistakes and remember the lessons you learn each time through the process. Eventually, managing your career will get easier.
Some things will never change. Industries, companies and technologies will come and go, but the nearly 7 billion people on the planet are still creatures of habit who won’t likely abandon their ways of relating to one another. The bad news is that the unpleasantness of working for a living will continue, probably forever. The good news is that employers will continue to seek out the traits and talents in each other that have served mankind well since the dawn of time: the ability to think, apply oneself to learning, a willingness to work hard, and a cooperative attitude. If you’re willing to adapt to and embrace change, the future will be a very exciting place to be, especially considering the alternative; if you’re not, my advice would be to marry well, enjoy early retirement, and let the rest of us get back to work.
There’s no job like the right job. Some say the hardest job you’ll ever have is looking for one, but eventually everyone who wants one finds one. Finding the right job may take a lifetime, but having the wrong job can feel like an eternity. For more on the topic, readers are referred to Training Wheels: A Candid Guide to a Career in Business, available through www.Xlibris.com.
Ask seasoned working people how they feel about their jobs and more than half will tell you how they hate their bosses, feel unappreciated, or are just plain bored to death or trapped in a dead end. Internet based companies and the New Economy was supposed to change all that until things fizzled earlier this decade. So now what? While you’re waiting for that dream job to come along, you need to make the most of the career you have.
Know the difference between jobs and career opportunities. What’s the difference? Probably very little when you’ve just left school and need to start paying off those student loans. A “job” keeps you alive; a “career” can make you feel alive. I’d be the first to admit that when you’re looking for your first job and have little or no experience, just about any job in your chosen field may seem like a career opportunity. When you’re starting out, it’s far more important to validate yourself in the workplace than it is to worry about whether you’re doing your best for mankind or pushing back intellectual frontiers. Besides, during the first several months of a new job, you’re usually busy learning the ropes of business etiquette, such as how to answer a telephone properly, or how to communicate with your superiors, colleagues and others in your office.
Consequently, time spent at virtually any job in your field is probably time well spent—for awhile. However, if you’re in the wrong position, it won’t take long for the “honeymoon” to end and for you to lose your infatuation with the idea of being gainfully employed. Suddenly, getting up in morning is a little more difficult, the workday drags, you’re bored, and you’re downright annoyed to be asked to work weekends.
So now what? The good news is that whether you’re working yet or not, you’re still holding all the cards: you’re young, educated, personable and eager to start working! Now, all you need is a strategy. Don’t believe that every move you’ve made since elementary school makes a profound or irreversible statement about who you are and what you’re all about. Careers are durable and flexible and don’t need to be precisely calculated every step of the way to be successful. The marketplace is somewhat forgiving of a background that meanders a bit at inception, and sometimes sees some diversity as beneficial to a well-rounded professional in these times of smaller, leaner organizations whose members must wear many hats.
However, careers need to be managed, and preferably with some strategic focus that guides you toward some long-term goal. Also, the meandering that may be favorably viewed when you’re 25 can be viewed as a lack of focus or commitment by the time you reach 35. By that time, a career floating with inertia can become much more difficult to navigate, and you’ll be spending a lot of time justifying your past and proving your commitment to your next job.
Suffice it to say that your careers are likely to be far more varied and volatile than ever before. Long gone are the days of feeling secure, confident and comfortable by honing a set of specific skills that you will use for your entire career. The career ride going forward is likely to be bumpy and risky. You’ll need to run faster just to avoid falling further behind on the job!
If you take the following steps to manage your career, you’ll be more satisfied and may actually end up doing something you enjoy.
Step 1. Know who you are. Carefully consider your personality, aptitudes, talents, skills, personal values, interests, and most importantly, your likes and dislikes. Few things in life will give you more pleasure than being paid for something you love to do, so it’s worth spending time to get it right.
Step 2. Strategize, don’t predict, your career. Set goals and objectives, identify the universe of possibilities, seriously consider your options, and go for it! Just remember to be flexible and open-minded; even allow yourself to dream. Few accurately predict where they’ll end up when they begin their careers, but those who act deliberately usually get ahead. Never rule out the possibilities that an uncertain future might bring, and be ready to capitalize on opportunities that might arise by chance or just plain dumb luck.
Step 3. Hunt eagerly (but efficiently) for opportunities. Take advantage of the full spectrum of publicly available sources at your disposal. Read, surf the net, network with contacts, and collect information and ideas. Temper your energy and enthusiasm with judgment and common sense and pursue only the most realistic and promising opportunities. There’s no shortcut for hard work and the inefficient process of trial and error that will be discouraging at times. Remember: nothing ventured, nothing gained.
Step 4. Sell yourself actively (if not aggressively) to employers. Begin with the paper chase of resumes, cover letters, and follow up letters; continue with telephone cold calls, making your sales pitches and attending networking meetings, and eventually you’ll get your share of interviews. Face the fact that your future employers won’t know why they need you until you tell them.
Step 5. Critically size up your opportunities. Consider all the basics: company growth, profitability, reputation, the job itself and how it relates to your goals and expectations, and your new boss and colleagues. Be diligent in your review. Ask hard questions and be satisfied with the answers. Take the time to determine if it’s opportunity or just temptation knocking. You’ll make well-informed decisions if you temper the facts with your gut instincts.
Step 6. Weigh all offers. Most people want employers to show them the money. Money is the easiest way to measure an opportunity’s attractiveness and it’s the most universally accepted method of keeping track of your career progress. You need money to survive, but money alone won’t keep you alive. Early in your career, you should select opportunities that build skills and experience, which will make you more valuable and marketable in the long run. Take a long-term perspective when making decisions.
Step 7. Frequently review your career options. Has your job measured up to your expectations? Is it the best use of your time at this point in your career? Is it time to move on? Is it difficult to admit you’ve either made a mistake or have outgrown your position? Sure, the truth sometimes hurts, but remember it’s the lies that leave the scars.
Like it or not, you’ll repeat this cycle many times during your 40 year career, but practice makes perfect. You’ll learn from your mistakes and remember the lessons you learn each time through the process. Eventually, managing your career will get easier.
Some things will never change. Industries, companies and technologies will come and go, but the nearly 7 billion people on the planet are still creatures of habit who won’t likely abandon their ways of relating to one another. The bad news is that the unpleasantness of working for a living will continue, probably forever. The good news is that employers will continue to seek out the traits and talents in each other that have served mankind well since the dawn of time: the ability to think, apply oneself to learning, a willingness to work hard, and a cooperative attitude. If you’re willing to adapt to and embrace change, the future will be a very exciting place to be, especially considering the alternative; if you’re not, my advice would be to marry well, enjoy early retirement, and let the rest of us get back to work.
There’s no job like the right job. Some say the hardest job you’ll ever have is looking for one, but eventually everyone who wants one finds one. Finding the right job may take a lifetime, but having the wrong job can feel like an eternity. For more on the topic, readers are referred to Training Wheels: A Candid Guide to a Career in Business, available through www.Xlibris.com.
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