How To Work Less

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How to Work Less

Work Less and Enjoy LifeThere is no doubt that hard work is a key to success. However, this character trait is not one we can teach. Some people become harder workers as they mature, but seldom does a zebra change its stripes. There are generally hard workers and not-so-hard workers. The goal of this section on Leverage is to help you get the most out of any level of effort. Whether you fancy yourself hard working or laid-back, Leverage can help you get more out of your desired amount of effort. In this chapter, we will discuss the capacity problems of Leverage, how education can increase your ability to Leverage your effort and then suggest ways physicians can overcome the barriers of capacity.

You Can Leverage Hard Work…But Effort Is A Capacity Problem
The basic and inherent problem with effort is that you only have two hands and two feet, and there are only 24 hours in a day. If we consider the case of two landscapers (Lazy Larry and Manic Mike) with very different work ethics, we can illustrate these physical constraints we all have.
Let’s assume that Lazy Larry and Manic Mike earn $50 per house per week. If Lazy Larry works five days per week and landscapes 8 houses per day, he will earn $2,000 per week before paying overhead, staff, equipment, taxes, etc. Manic Mike can work seven days per week and landscape 10 houses per day. This would give him precious little time off for family or personal time, but he would earn $3,500 per week before all of his expenses.
Both of these landscapers might consider themselves successful (depending on their goals and values). But if hard working Manic Mike wants to make more money, there aren’t enough hours in the day or days in the week unless he does something that earns him more money per house or he finds a way to Leverage something other than his own effort. The next application of Leverage could help Mike do just that.

Leveraging Education
The idea of leveraging education to create wealth is no secret. In fact, it has become part of the American Dream. For over a century, immigrants have come to America and have taken advantage of the educational system. They have pushed their children to do well in school in hopes that they would get a good job and enjoy a higher standard of living. They have also pushed their children to find careers that pay them more money than a career like Manic Mike chose.
Leveraging education is a key element of building and protecting wealth. To prove this point, consider the following salaries of highly educated professions. When considering the earning potential of these professions, keep in mind that the median U.S. household income for the year 2007 was $48,201, which means that half of all United States households earned less than $48,201 per year. (US Census Bureau’s 8/27/07 Current Population Survey (CPS)). According to a USA Today article on 1/18/06, the first year salary plus signing bonus for an MBA (2 years of graduate school) was $106,000.
According to MD Salaries (, the first year salary of a neurosurgeon ranged between $350,000 and $417,000 in each of these cities: Houston, New York, Miami, Los Angeles and Seattle. Neurosurgery requires the completion of four years of medical school, a one-year internship, and a rigorous 5- to 7-year residency. Thus, there is no doubt that leveraging education can help you earn more money per year and increase your wealth faster than if you had a job with a lower level of education. Physicians use this type of Leverage quite well.

Education And Effort Are Not Enough
Would you be surprised to hear that the neurosurgeon mentioned above and Manic Mike have the same problem? While we are not saying that Mike is performing brain surgery, we are suggesting that they both have the same fundamental problem—albeit at a different level of income. Mike doesn’t have enough hours in the day or days in the week to increase his business. Similarly, a neurosurgeon’s income is limited by the number of surgeries he can perform as well as constrained by the number of hours in a day and days in a week. Even if you assume that there is an endless supply of patients who need brain surgery, and there is an endless supply of lawns to be mowed, the surgeon is limited just like Mike. In other words, a landscaper earning $50 per house has the same capacity problem as a neurosurgeon earning $500 per hour because:
1. They are limited in the amount of money they can earn until they figure out how to Leverage what they do
2. They only make money when they are actually working
This is a lesson that savvy business owners and investors figured out long ago. As a result, the most successful business owners:
· Always focus on the Leverage of any business.
· Never consider increasing effort as a legitimate, long term means to increasing income.
· Never enter into a business that requires them to constantly “work” to make money.
For these reasons, we prefer to focus our articles, seminars, books, and personal consulting recommendations on strategies that help Leverage assets and Leverage people.

The Diagnosis
All teenagers have parents, teachers and coaches who tell them to work harder. We prefer to tell you—and show you—how to work smarter without having to work harder (or having to clean your room or take out the trash). The Lesson applies to anyone—no matter how hard working or lazy you may be. If you want to work less and build more, you can do it. Applications of this “smarter working” lifestyle will be the focus of the next two chapters.

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What is a Revocable Living Trust?

Posted by & filed under Blog, Education.

An RLT stands for Revocable Living Trust.  An RLT is a list of instructions that you create for a person to follow (executor or trustee) if you have become incapacitated or you pass away.  This document is a signed and notarized legal document that serves as a list of instructions when someone dies or is incapacitated or in the hospital and is not able to handle their affairs.  A lot of people fail to realize that an RLT has the incapacitated component to it.  Actually, many people often think a Revocable Living Trust is only for death and they don’t have to be concerned with it. However, incapacitation can happen at any time, and that’s why it is important to have it in place.  The Revocable Living Trust ensures who will take care of you and who will take care of your loved ones.

There are several things to think about with a Revocable Living Trust.  Probate is one of those key issues.  If you just have a general will that’s not bad but your family will still have to go through a probate, and a judge will decide the way your estate will be handled. So the way you list things in your Will is the way it is going to be.  The judge oversees the probate process, meaning the judge will be given all the information; the will, the beneficiaries, etc…and will take what the Will states and distribute that appropriately and based on his or her understanding.  This is done to eliminate conflict among the family members in which the probate is being settled.  However, if you have an RLT, you bypass the trouble of a probate.  It will be done without court supervision and it is much easier and cheaper to deal with.

In California, you should have a RLT if you own a home and/or $125,000 assets (in bank or investment accounts) and do not have a RLT, you will be placed in the probate arena. So to avoid probate, it’s very important to think about the benefits of having a Revocable Living Trust.

Another big reason why people get a RLT is for control.  People want to be in charge of their assets and all other things to be passed down and whom it belongs to.  The RLT also specifies what the trust maker wants to give to his/her beneficiaries and trustees or kids to make sure that the kids grow up in an environment similar to how they would have experienced if the parent or trust maker was around.  Sometimes, you have a sudden death, and there are no instructions.  If you have an RLT, the instructions within it tell you exactly what to do.

The instructions within the RLT do not have to follow any specific rules or regulations. You can just give out the money, or put restrictions on the inheritance that allows for access to, etc, etc…This is good because if an 18 year old were given $200,000 and there are restrictions on it, you will have the peace of mind that the money will be used for proper purposes such as college and not a brand new Ferrari.

There is also a named trustee in the RLT that is in charge of the beneficiaries and work with the restrictions.  It is an honor to be named the trustee for an estate, but you also incur some major responsibilities.  You now become situated in the proverbial legal hot seat with everyone looking to you and coming to you for information and money.


Revocable Living Trust


Kevin, is the lead assistant in the Estate Planning Department and Wealth Strategies Department.  Kevin has been with the firm for over 5 years and is a major contributor to the departmental cases.

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