I was thinking about using leverage the other day and had in mind the simple see-saw playground ride. On both sides the leverage is equal, two small children having fun alternating a ride up or down on the ride. Probably the only time you might have enjoyed the see-saw ride of going nowhere but up and down.
Then the fat kid gets on. Plump! Ride over.
Only longer leverage on your side will continue the ride. That is what we as travel nurses must look for. We need to make sure we have hold of the big end of the stick. The old adage for leverage in business is time, money, and talent. Yet for the travel nurse who earns a paycheck for time worked, this doesn't strictly apply. So I have changed the basic business principals to the ones below.
About nine months before moving to my first travel assignment I had a meeting with three individuals, I promised coffee and they agreed to help me out. The individuals were a personal estate lawyer, a mortgage broker, and a real estate agent; another person unable to attend was my accountant, though I met with him later that same day.
I had drawn up a personal financial statement and listed prioritized personal goals to share with them, after reviewing the information, the three went to work advising how I could accomplish these goals. In less than a year the direct results from that meeting reaped tens of thousands of dollars and continue to save me money every month.
In contrast a travel nurse recently shared with me a story about the thousands she owes in taxes this year after failing to comply with the IRS rules of travel exemptions. Turns out she stayed on at one assignment for a year to win a large completion bonus only to find out that paying taxes on her travel stipend would far exceed the bonus amount.
"Her recruiter should have warned of that", some might think, and most likely the story will make the rounds on internet forums. I will grant you that a few nurses may read a forum and learn a lesson or two but to really leverage your ability to acquire information go to professionals.
Use an accountant to help you prepare for taxes a year in advance, not a tax preparer for the past year. Get legal advice from a lawyer that you have paid for, not a relative who knows one.
Keep in context who is giving you advice. Go as close to a direct source of information as possible. Need rental car information for a city? Call rental companies in that area; don't talk to a used car salesman in your town. Sounds silly, doesn't it? Yet it is amazing how often we rely on information from relatives, travel nurse acquaintances, internet forums, and recruiters.
Leveraged information is most often costly information, but not nearly as costly as free information. Be willing to pay for information and advice that increases your leverage.
Earnings leverage is something I have posted about several times on this blog. In business, financial leverage is achieved by using other people's money. As a travel nurse, earnings leverage goal is to break dependence on a week to week paycheck, thus opening up options and opportunities rather than needing to take the first position available.
Ideally, earnings should come from multiple sources of income. A topic best left up to others to write and post about, as they can vary by as many readers of this blog.
Lastly talent is a leverage the travel nurse may often neglect. The talent may be your own, such as expanding your experience in other nursing realms in order to enlarge your scope of practice and job opportunities. Yet I want to suggest looking for opportunities to use other people's talent.
How about using a professional to prepare your resume', a travel agent to book your trip, or have you considered a VA, virtual assistant?
A virtual assistant can assist with all kinds of research and online work, they are available for as little as five dollars an hour and the amount of routine chores they do can proves invaluable. For more info simply use Google and I could also suggest the Tim Ferris book "The Four Hour Work Week" for a comprehensive study into optimizing virtual assistants.
How much leverage do you want on your side? It's up to you to decide. In adult life don't let the "fat kid" have the advantage in the real playground of life.
Last week Mary and I returned from a visit to a shopping mall (this part of California is full of them). Mary spent time trying on dresses while I wondered off to a large book store in search for something interesting.
What ended up surprising me was the lack of books in the store that were of any interest to me at all. In the finance section, an area where I could previously find hours of interesting reading I was bored with how-to books on getting out of debt, other books detailed how the current financial crisis occurred, and of course the handful of books detailing how to save your way to retirement.
It was these last books that brought the cynic out in me. First of all, every one of these books started with the assumption that the reader was in debt and gave their suggestions to correct this. Now I have debt, but it is debt that holds assets, not personal debt, a distinction these books rarely identify. My debt creates leverage that works in my favor rather than the bank’s.
After addressing the debt issues these books then go on to describe various paper instruments such as 401k’s, IRA’s, and bonds, as well as stocks, and particularly mutual funds as the preferred choices for building wealth. This is where I differ with them.
After suffering a 50% yearend loss in my IRA along with most U.S. savers, I find small comfort in retirement savings. I recently added up how much it would take for me to save monthly for a comfortable retirement over the next fifteen years. You ready for this? Three thousand dollars a month! Yep, $3,000 a month to generate a decent draw for when I turn 65 years of age.
Small wonder these books are full of ideas to trim your daily budget so that you can increase your savings. Of course these authors are now suggesting new ideas such as postponing retirement to a later age, and rethinking retirement as just another change in jobs. I pity the Wal-Mart greeter who has been so stereotyped as the old timer who failed to plan for retirement.
After the shopping trip I took my frustration to Andrew’s house. Andrew is a wealthy neighbor that is in his mid fifties and already tried retirement only to find that he missed the excitement of making “the deal” and returned to building new businesses, his true passion. “Perhaps”, I thought, “Andrew might have an idea of what I am missing from the book shelves”.
“Gary” says Andrew, “you have to realize there won’t be books for you.” “Most people are in debt with the wrong kind of debt and that is where the market for books is.”
Andrew was right, best seller books are the ones that sell to the most people, and most people want to know how to get out of debt. Then, after getting out of debt, people want to learn how to save. Stock brokers want you to save, mutual funds want you to save, and Wall Street wants you to save. Why? That’s how they make more money.
Andrew had me sit and visit for awhile as we shared a bottle of wine, and while he spoke I picked up on a theme that had gotten blurred to me, probably because of skimming through all those bestselling books. That theme was to look for the leverage.
It was Archimedes who stated that “Give me a lever long enough and a place to stand, and I can move the Earth”. Andrew reminded me that success is often rewarded to those who best apply the principle of leverage to their ideas. While other people look for a lucky break, or struggle to make it on their own, Andrew is always looking for the leverage.
To lift a heavy object, you have a choice: use leverage or not. You can try to lift the object directly – risking injury – or you can use a lever, such as a jack or a long plank of wood, to transfer some of the weight, and then lift the object that way.
Which approach is wiser? Will you succeed without using leverage? Maybe. But you can lift so much more with leverage, and do it so much more easily!
So what has this got to do with travel nursing?
The answer is. A lot. Without leverage, you may work very hard, but your rewards are limited by the hours you put in. With leverage, you can break this connection and, in time, achieve very much more. This is such an important ingredient to success, yet is surprisingly absent in career and financial planning books.
Over the next few posts I will be addressing the different aspects of leverage for the travel nurse and how to apply them to leverage your way to career, travel, and life success.
Today I will begin by comparing life with and without leverage.
The travel nurse, who doesn’t use leverage, drives their own car to an assignment by simply using a road map and using a car that they still owe payments to the bank. The loan on the auto is upside down, meaning the loan value is greater than the car’s worth.
They are glad to move to a company provided home as they just lost their home to repossession, though the stipend will still be taxed because they didn’t bother checking with a CPA regarding tax laws. They wanted to save money by doing their own taxes.
Even with the increase in weekly pay from the travel assignment this travel nurse still has to work overtime to make ends meet paying consumer debt. After a few years of being away from friends and family this same travel nurse hopes to somehow get above just treading water and maybe get ahead some day.
Another travel nurse leveraged someone else’s time to help plan their trip to the new location, or they may have leveraged their time even more by flying to the new location. On the road they can use technology leverage by using a GPS device to help them with driving directions.
This travel nurse understands that a car is just a tool and doesn’t get strapped with excessive payments for a depreciating asset.
This nurse understands that successful assignments are the result of building a team of professionals behind them, and even on assignment at the hospital, behind the scenes is a team ensuring that taxes, investments, and career planning has been assembled at their behest.
Interested in learning more?
I’ll be writing a series of posts on leveraging;
Time
Resources
Knowledge and education
Technology
