IronBridge Private Wealth

Forward with Confidence

The Federal Reserve Trading Scandal: Just the Tip of the Iceberg?

In the past three weeks, there have been three prominent Fed officials who have been caught in trading scandals.

For those not familiar with this scandal, you can read about it here:

https://news.yahoo.com/a-timeline-of-the-federal-reserves-trading-scandal-104415556.html

In summary, last week, Robert Kaplan and Eric Rosengren, Presidents of the Dallas and Boston Federal Reserves respectively, both “retired” amid revelations that they had actively traded stocks and investments that directly benefitted from the Fed’s actions.

Last Friday, yet another official, Richard Clarida, reportedly moved millions of dollars out of bonds and into stocks the DAY BEFORE the Fed announced trillions of dollars of market stimulus.

This is a conflict at best, and flat-out criminal at worst.

If an employee of any financial institution did this, they would be fired. And probably banned from the financial industry for life.

But the Fed officials simply “retired”.

The End Game: Losing Confidence

The financial markets have risen on the back of Fed printing for over a decade now.

For many years, our clients have been asking (and we have been wondering), “When will the next bear market begin?”

And for many years our answer has been, “When the market loses confidence in the Fed.”

Well, this may very well be how it starts.

In our opinion, the single biggest risk in global financial markets is a mistake by the Federal Reserve.

Thus far, they have consistently erred on the side of being supportive of financial markets. And prices have gone up in response.

But the recent tumult inside the Fed has a different feeling.

The blatant and intentional actions of these men were for one reason: to make money.

By itself, there’s nothing wrong with that.

But when you “front-run” major announcements intended to change the direction of global financial markets, you go from simply trying to make money to committing acts that violate any basic conflict of interest rule. And likely go far beyond that.

These men should be investigated. Just like any other member of the financial industry.

But unfortunately, they probably won’t.

Neither will the many people in Congress who do the same thing every week.

It’s almost as if there is a ruling class that is above the law.

Stock Market

What effect might this have on the stock market?

Markets have become volatile once again. Maybe it’s just a long overdue pause, or maybe it’s because of this scandal.

Either way, the Fed is such a HUGE part of the markets these days, anything they do (good or bad) will likely have an impact.

The extent of that impact is still unknown.

On the one hand, this could be the first domino to something bigger. A weakened Fed opens itself up to major criticism, and rightfully so.

Up to this point, the Fed hasn’t had to deal with much criticism. Trump was a vocal critic of the Fed, until he became president and wanted markets to remain strong. Ron and Rand Paul have both been critical, but their voices have quieted since COVID began.

And when new Fed chairs get appointed, they may or may not have the stomach to fight such criticism.

On the other hand, maybe this criticism causes the Fed to double down on their printing machine. Maybe they announce continued support of the markets because they don’t want the one-two punch of both bad publicity AND a weak stock market.

At this point, weakness in the market appears to be normal.

After all, we went nearly a year without a 5% correction. That’s pretty abnormal, as these types of declines happen 1-2 times per year on average.

But if the stock market has peaked (which we’re not certain that they have), then we very well may look back at these trading scandals as the moment the Titanic first ran into the iceberg.

Invest wisely.

The Wolf and the Crane

Aesop was a Greek storyteller who lived from 620-564 BCE. His stories were verbally passed down through time, and often included tales of animals and inanimate objects that could speak and solve problems.

Many of Aesop’s Fables are commonplace even to this day. We are all familiar with the story of the tortoise and the hare.

But a lesser known fable is that of the Wolf and the Crane.

In the fable, the Wolf gets a bone stuck crosswise deep in his throat. He asks the Crane, with her long neck and lengthy bill, to reach in and pull the bone out. If she successfully removes the bone, he promises to reward her very handsomely in return.

So the Crane uneasily put her head into the Wolf’s throat, and removes the bone.

But when the Wolf felt that the bone was gone, he started to walk away.

The Crane anxiously asked, “But where is my reward?“

The Wolf whipped his head around and snarled, “Haven’t you already got your reward? Isn’t it enough that I let you take your head out of my mouth without snapping it off?”

The moral of this story is that you shouldn’t expect a reward when you are serving the wicked. (FYI, the full text of the fable is at the bottom of this page.)

This may seem harsh, but it is appearing more and more that the Fed is the Wolf.

And we are the Cranes.

We have benefitted from 12 years of strong markets on the back of the Fed printing press. The excesses of the banking and housing expansion before 2009 were never truly worked off. Only covered by a tsunami of digital dollars.

The Wolf, aka the Fed (and more broadly the largest U.S. banks), asked us to do something for them: increase consumption by using low-interest debt. Oh, and to buy stocks.

And we consumers obliged.

Total consumer debt has consistently risen over the past 30 years, as shown in the chart below.

Total consumer credit since 1990

Consumers benefitted in the form of easier access to credit and interest rates that are literally the lowest in recorded human history.

Investors benefitted as well.

The next chart, courtesy of our friend Lance Roberts with Real Investment Advice, shows the Federal Reserve balance sheet versus the S&P 500 Index. We discussed this chart in our Strategic Growth video series HERE.

Each time the Fed turned on the printing press since 2008, stocks went up. After all, this was the goal of their policy. They wanted stocks to go up in order to create confidence in the real economy.

Flooding the financial system with liquidity worked, and it continues to work to this day. If we look at all the problems in the world right now, it is easy to see that U.S. stocks simply don’t care about any of them.

GDP cratered over 30% in the second quarter of 2020. We’re in a global pandemic that is nearly two years old. There is massive unemployment, huge inflationary pressures, supply chain disruptions, major tax legislation, self-induced geopolitical messes, natural disasters, generational social discord, increasing wealth disparity…the list goes on.

Despite all of this uncertainty, we haven’t had a 5% pullback in almost a year.

As Jay-Z might say, “I got 99 problems but the market ain’t one”.

At least not yet.

This summer we wrote The Fed is Stuck. In it, we discussed the mechanisms that allowed the Fed to have a direct impact on financial markets.

Now, there is discussion that the Fed will start to reverse course.

Over the next few months, you’re going to hear a LOT of the word “taper” from the financial media. And rightfully so.

The Fed has created an economy and financial system completely dependent on its easy money policies.

If we can agree that the massive liquidity injections had a positive effect on the markets, one would also assume the opposite to be true.

So it is logical to begin to discuss the potential consequences as the Fed begins to reduce its support of the financial markets.

What Happens when the Fed Tapers?

Merriam-Webster defines “taper” as a verb that means “to diminish gradually”.

When the Fed “tapers” its asset purchases, it simply means they will slowly reduce the amount of money they are force-feeding into the financial system.

This HAS to happen at some point.

There is no way to continually print trillions of dollars and expect to not have any consequences.

So far, the only “consequences” have been mostly positive.

Inflation has been a consequence, but up to this point it has only been in the form of asset price inflation. Stocks have risen, bonds have risen, and real estate of all kinds have risen.

Federal Reserve Chair, Jerome Powell

What we haven’t seen is the negative inflation that will inevitably stall the economy. But it is starting to appear. In Austin, multiple restaurants have started to raise prices. Your grocery bill is likely a bit higher this fall than it was a year ago. Let’s not even talk about housing affordability.

At first, we the consumer will absorb the real economic inflation. But as these inflationary pressures build, the Fed simply can’t continue on its current path. We are nearing a point where the Fed must stop doing what it is doing.

So what is the Fed actually doing?

It is doing two things: shoveling $120 billion per month into the financial system and keeping interest rates artificially low.

So there are technically two things the Fed could start doing: reduce the $120 billion number, or increase rates.

Taper or Raise Rates?

At their meeting next week (September 21-22), it is widely expected that Jerome Powell will announce a tapering program.

This means that they are likely to reduce the $120 billion number. That leaves two very simple questions: By how much will they reduce it, and over what timeframe?

While most people are predicting the Fed to taper, it actually might make more sense for them to raise rates first.

The financial markets have been focused on the flow of assets into the system. The $120 billion per month results in a net increase in demand. When demand outpaces supply, prices go up. A reduction of the $120 billion would then logically either slow the rate of increase in the market, or at some point lead to an actual price decline.

But an increase in the interest rate environment would have a more subtle effect.

Adjustable rate debt would go up. The interest rates on new loans would likely go up. And what would essentially happen is the cost of funds would get slightly more expensive to slow down major purchases and leverage.

This would be a good thing in the early stages of an inflationary environment.

It also would result in a positive surprise to the financial markets.

That said, it’s very difficult to predict what the Fed will do. And even more difficult to predict how the market will react to it. We’ve yet to read much about the potential for the Fed to raise rates before slowing down their asset purchases.

Either way, it would be more of a surprise if they did NOT act next week.

So we should expect a clearer path forward from Mr. Powell next week, and a path that includes a slow down of Fed activity.

The Wolves Inside the Fed

One other reason to expect a tapering announcement next week is less grounded in economic reality, and has more to do with political grift.

Members of the Federal Reserve do not have major restrictions when it comes to their own personal investments. Or at least they didn’t until last week.

As former employees of large investment firms, we have dealt with trading restrictions for many years. Heck, even a small, independent firm like IronBridge has trading restrictions and requires disclosure of investment holdings. These are important so that we aren’t abusing our knowledge of future trades that we may do for all of our clients, and “front-run” the trade hoping our investment actions will boost the price of that stock.

However, the Federal friggin’ Reserve bank, the most powerful financial institution on the planet, does not have restrictions on what their active, policy-creating members can and can’t do.

Case in point…last week it was revealed that the Federal Reserve Bank of Dallas President Robert Kaplan (pictured below) owned nearly 30 positions in individual stocks valued at over $1MM per stock. He had 22 stock purchases last year of over $1MM per trade.

Dallas Federal Reserve President Robert Kaplan, aka a Wolf

Mr. Kaplan actively sets monetary policy. And that policy is designed to literally make stocks go up.

Conveniently, as the Fed is about to change course and start to taper, he announced that he magically found his ethics and will sell all of his individual stock holdings.

Funny how that works.

Mr. Kaplan isn’t the only one either.

Boston Fed President Eric Rosengren conveniently found ethics as well. He announced he would be selling all of his individual stock holdings by September 30th.

There are only 12 people who officially vote on Fed policy. And two of them (that we know of) are going to liquidate their holdings at the same exact time the Fed is changing their easy money policy.

This is a different kind of wolf, but a wolf nonetheless.

Maybe it is coincidence. Maybe these gentlemen are noble, ethical people. Maybe the Fed won’t reverse course and will keep pumping. Maybe stopping the massive amounts of liquidity going into the system isn’t going to slow this market down.

Or maybe they know exactly what they are doing.

And maybe like the Wolf, they won’t care what happens to the market and economy when they stop.

After all, we Cranes escaped the financial crisis and COVID crash with stock prices and home prices higher than when it all started.

Cognitive Dissonance

The other thing to watch in next week’s meeting is that the Fed will likely blame everything but themselves for the inflationary pressures building in the real economy.

This cognitive dissonance is important because it allows them to change policy without worrying about the negative consequences of what their change in policy might do to asset prices and the real economy.

This allows them to sleep at night believing that what they did was noble.

And maybe it was noble.

But if there begins to be negative fallout from the Fed stopping the printing presses, we should not expect the Fed to reverse course this time. In fact, we should expect the opposite going forward.

The Fed believes we have already received our rewards. We were “saved” from the jaws of the financial crisis and COVID crash.

The Fed didn’t chew the heads off of us Cranes. They “let” us escape unharmed.

And for the first time in many, many years, it appears that they are truly about to change from an easy monetary environment to a less accommodative one.

Therefore, now is not a time for complacency.

The markets are getting closer to a major top. We may not be there just yet, but we are definitely getting closer.

We don’t know if it will be three months, six months or five years before things change, but we are closer today than we were yesterday.

So stick to the basics:

  • Stay disciplined. Don’t let a small loss turn into a big loss.
  • Do not let your emotions get the best of you. Don’t become overly bullish or overly bearish…anything can happen.
  • It’s okay to be wrong. We can’t pick the top. And we won’t try. But if things are not working you need to change course. What’s not okay is to stay wrong and try to fight the market.
  • Use data to make decisions, not narratives. Always remember that the media exists to sell commercials, not give you objective investment advice.

So let’s watch what the Wolves will do next week with great interest. Whatever the Fed may do, we will be prepared.

Invest wisely!

The Wolf and the Crane

“A Wolf had been feasting too greedily, and a bone had stuck crosswise in his throat. He could get it neither up nor down, and of course he could not eat a thing. Naturally that was an awful state of affairs for a greedy Wolf.

So away he hurried to the Crane. He was sure that she, with her long neck and bill, would easily be able to reach the bone and pull it out.

“I will reward you very handsomely,” said the Wolf, “if you pull that bone out for me.”

The Crane, as you can imagine, was very uneasy about putting her head in a Wolf’s throat. But she was grasping in nature, so she did what the Wolf asked her to do.

When the Wolf felt that the bone was gone, he started to walk away.

“But what about my reward!” called the Crane anxiously.

“What!” snarled the Wolf, whirling around. “Haven’t you got it? Isn’t it enough that I let you take your head out of my mouth without snapping it off?”

Donor Advised Funds: Tax Benefits, Growth and Control

Alphabet letter wooden blocks with words GIVE in child and parents hands. Family and charity concept

Donor advised funds have been around for decades, but they’ve only become wildly popular vehicles for charitable giving over the last several years. They offer immediate tax benefits as the assets or funds in the donor advised fund convey a tax deduction in the year in which they are gifted. Inside the fund, the assets can grow tax-free and not have to be distributed immediately to a charity. 

How popular are they? Total assets in donor-advised funds have more than quadrupled over the past decade, to more than $140 billion. Roughly $1 of every $8 given to charity in America now goes to a donor-advised fund.1

The funds offer an extremely flexible way to craft a gifting strategy that can allow for the gift to be invested and managed, to potentially grow over time, and for the gifter to maintain control over the assets.

Understanding Donor Advised Funds

A donor advised fund (DAF) is a savings vehicle that allows for charitable donations and tax benefits, all while the donor still has control over where the assets are to be donated. Donor advised funds are irrevocable, meaning that you can’t withdraw funds after donating. Still, you can specify how the donation is to be invested and to which charity you’d like to donate.

Given their versatility and flexibility, DAFs have become a popular choice for those with a charitable heart. According to research from the National Philanthropic Trust, contributions to DAFs in 2019 totaled almost $39 billion, an 80% increase since 2015.2

With donor advised funds, you aren’t limited to donating just cash. Acceptable donations range from stocks and bonds to bitcoin and private company stock. Donors can deduct up to 60% of adjusted gross income if donating cash and up to 30% of adjusted gross income if donating appreciated assets.3

To make sure a donation qualifies for the full benefits, the fund administrator must be a public charity that falls under the qualifications of a 501(c)(3) organization.

How They’re Managed and How to Contribute to One

First, it must be opened at a qualifying sponsor. After selecting a sponsor, donors must make an irrevocable contribution to the fund. At that time, they can take the immediate tax deduction and begin naming beneficiaries and successors for the account.

After making a contribution, the sponsor firm then has legal control over the funds. It can invest the money in accordance with the donor’s recommendations, until the donor is ready to decide which charity they’d like the distribute funds to. Since the fund manages the money and handles the administrative tasks that come with donating to charities, administrative fees need to be considered when deciding on which sponsor to use, as those fees are deducted from the donor’s contributions.

When Does It Make Sense to Contribute to a Donor Advised Fund?

There are many situations where it may make sense to contribute to a donor advised fund, but some of the most common are:

  • If you own highly appreciated assets
  • If you’re looking for a tax-deductible transaction
  • If you want to make a sizable future donation

For example, let’s say someone bought Amazon stock when it was $10/share, and it grew to $3,000/share and they didn’t want to pay capital gains tax on the appreciation. With a donor advised fund, they could donate the stock, and no capital gains would be due.

The Pros and Cons of Donor Advised Funds

When contributing money to a donor advised fund, the donor receives an immediate tax deduction on the amount they contributed, even though the funds may not be distributed to a charity until a future date. This allows for greater control and flexibility when compared to making a regular donation directly to a charity.

Additionally, contributing to a donor advised fund makes record-keeping simpler than making multiple donations to different charities and keeping track of all the documents. This is because the fund can act as a “hub” for all donations, and it will record all contributions and provide a single tax document containing all information needed.

Though versatile, a concern amongst many donors is the fees associated with donor advised funds. For example, the fund might charge a 1% administrative fee, which is being taken directly out of the funds to be donated. The underlying investments may also have fees, so it’s important that you carefully evaluate where your money is going and how fees play a role in the donation.

The Takeaway

Overall, donor advised funds are a versatile tool when it comes to making donations. They provide tax benefits and allow donors to choose where their money goes, all while those donations can grow tax-free until a charity is chosen. However, there’s more to consider than just the benefits, so to make sure it’s the right move to make for your financial situation, it’s recommended to talk with a financial advisor before establishing a donor advised fund.

  1. Frank, Robert. Billionaire philanthropist John Arnold says donor-advised funds are ‘wealth-warehousing vehicles’. CNBC. August 11, 2021.
  2. National Philanthropic Trust. The 2020 DAF Report. NPTrust.org
  3. What is a Donor Advised Fund? Fidelity Charitable.

The information contained herein is intended to be used for educational purposes only and is not exhaustive.  Diversification and/or any strategy that may be discussed does not guarantee against investment losses but are intended to help manage risk and return.  If applicable, historical discussions and/or opinions are not predictive of future events.  The content is presented in good faith and has been drawn from sources believed to be reliable.  The content is not intended to be legal, tax or financial advice.  Please consult a legal, tax or financial professional for information specific to your individual situation.

Strategic Growth – Episode 1

In this episode, we discuss the recent surge in COVID due to the Delta variant, compare this surge to the UK on when we may expect cases to begin to drop, look how previous surges in cases have effected both the S&P 500 and bonds, and compare different assets to get a sense of where the market may go from here.

Be a Mercenary: 3 Ways to Improve Your Investment Process

Photo of a soldier in camouflage and tactical gloves putting money in pocket.

When investing, listening to common wisdom can be very productive. But not all “wisdom” is worth listening to.

Here are three philosophies that can help you improve your investment results.

1. You Don’t Have to Own Stocks Forever

There is a lot of potential risk in markets right now.

But guess what? There always is.

We’ve been trained to think that if you buy stocks, you must own them forever or else you’re doing it wrong.

Don’t buy into that kind of thinking.

It’s okay to get out. It’s okay to have stop losses. It’s okay to allocate capital to stocks right now, as long as you have the proper risk management strategies in place. In our opinion, that means having rules to move out of stocks and back into cash.

In fact, we think that you should intentionally be thinking shorter-term when it comes to stocks right now. There are signs that the stove could get hot. But avoiding it means you may be passing up on solid investment returns in the meantime.

2. Separate your Emotions from your Actions

We believe in having rules. This allows you to not have a vested emotional interest in the outcome of the stock market.

When humans predict something will happen, they create both a confirmation bias to that prediction as well as an anchoring bias to the predicted outcome.

A confirmation bias is when we look for things that support our way of thinking. Politics and social media are the ultimate examples of confirmation bias today. People like to watch and read things that support their view.

Anchoring bias refers to how we view an array of information based on an initial assumption or data point. If we view the market as one that should be rising, we tend to subconsciously view that as the primary outcome we should expect. And we don’t only actively seek out confirmation of our theory, we interpret data points and events to be supportive of that belief, whether that is the accurate way to interpret it or not.

Both of these biases result in viewing markets without the objectivity and discipline needed to be successful investors.

3. Be a Mercenary

This means you want to fight for the side that both pays you the most money and avoids the most harm.

Tech is doing well? Great. Invest there.

Inflation is coming? Great. Invest in areas that are showing benefits to that inflation.

Markets are crashing? Great. Have more cash.

Bottom line: Don’t be dogmatic. Don’t be a permabull or permabear. Try to fight for the winning side. You won’t always be right, but you’ll be on the right side of the big trends when they happen.

Having a process will help tremendously when markets get confusing. Remembering these three

Retirement Plan Choices for Small Businesses

Inspired mature grey-haired woman fashion designer thinking on new creative ideas at workplace. Smiling beautiful elegant classy middle aged older lady small business owner dreaming in atelier studio.

As a small-business owner, figuring out retirement choices can be a little intimidating. How do you pick the most appropriate retirement plan for your business as well as your employees?

There are a number of choices when creating retirement plan strategies for you and your employees.

Here, we will review three of the most popular for small businesses: SIMPLE-IRAs, SEP-IRAs, and 401(k)s.

This article is for informational purposes only and is not a replacement for real-life advice, so make sure to consult your tax, legal, and accounting professionals before implementing or modifying a retirement plan.

SIMPLE-IRAs

SIMPLE stands for Savings Incentive Match Plan for Employees. This is a traditional IRA that is set up for employees and allows both employees and employers to contribute.

If you’re an employer of a small business who needs to get started with a retirement plan, a SIMPLE-IRA may be for you. SIMPLE-IRA’s provide some degree of flexibility in that employers can choose to either offer a matching contribution to their employee’s retirement account or make nonelective contributions.

In addition, employees can choose to make salary reduction contributions to their own retirement account. Some small business owners opt for a SIMPLE-IRA because they find the maintenance costs are lower compared with other plans.1,2

Distributions from SIMPLE-IRAs are taxed as ordinary income, and if taken before age 59½, may be subject to a 10% federal income tax penalty. Generally, once you reach age 72, you must begin taking required minimum distributions.

For a business to use a SIMPLE-IRA, it typically must have fewer than 100 employees and cannot have any other retirement plans in place.1

SEP-IRAs

SEP plans (also known as SEP-IRAs) are Simplified Employee Pension plans. Any business of any size can set up one of these types of retirement plans, including a self-employed business owner.

Like the SIMPLE-IRA, this type of retirement plan may be an attractive choice for a business owner because a SEP-IRA does not have the start-up and operating costs of a conventional retirement plan.

This is a type of retirement plan that is solely sponsored by the employer, and you must contribute the same percentage to each eligible employee. Employees are not able to add their own contributions.

Unlike other types of retirement plans, contributions from the employer can be flexible from year to year, which can help businesses that have fluctuations in their cash flow.3

Much like SIMPLE-IRAs, SEP-IRAs are taxed as ordinary income, and if taken before age 59½, may be subject to a 10% federal income tax penalty. Generally, once you reach age 72, you must begin taking required minimum distributions.

401(k)s

401(k) plans are funded by employee contributions, and in some cases, with employer contributions as well. In most circumstances, you must begin taking required minimum distributions from your 401(k) or other defined contribution plan in the year you turn 72. Withdrawals are taxed as ordinary income, and if taken before age 59½, may be subject to a 10% federal income tax penalty.1

1. IRS.gov, March 4, 2021
2. Investopedia.com, April 25, 2021
3. Investopedia.com, February 23, 2021

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG, LLC, is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright 2021 FMG Suite.

How to Treat Your Career Like a Sport

When thinking about your business or career, it might seem odd to make comparisons to a sport. But when you zoom out and look at the similarities, they’re more closely related than you may think.

For example, a common problem many people face as they end their careers and enter retirement is a loss of purpose and a feeling of emptiness. The thing that consumed eight hours a day for the past 40 years is now gone.

Athletes face these same struggles. But they tend to face it much sooner in life. However, some athletes find themselves thriving in life after sports. Those that succeed learned many valuable lessons and picked up traits from their sport that can translate into other areas of life.

Derek Jeter, former Yankees shortstop and first-ballot Hall of Famer, is now CEO and part-owner of the Miami Marlins and co-founded the media company, The Players’ Tribune. Hall of Fame defensive end Michael Strahan took his talents and football knowledge to live TV and has co-hosted Fox NFL Sunday, $100,000 Pyramid, and even Good Morning America.

While your career may not lead to headlines and TV gigs, there are a few ways that you can treat your career like a sport to set yourself up for long-term success.

The 10,000 Hour Rule

In his book, The Outliers, Malcolm Gladwell claims that it takes roughly 10,000 hours of work to master a skill. While the specific number of hours has been challenged by many, the principle will always make sense: to be great at something, you must put in the work.

Athletes dedicate years, sometimes decades, to their craft to be the best that they can be. We shouldn’t treat our own careers much differently.

Over the course of your working career, you’re most likely going to put 10,000 hours of work in by just showing up. However, if you’re intentional about the work that’s being put in, you can begin to propel your business to heights you never imagined possible.

For example, you may want to pursue a graduate degree or additional certifications that allows you to move up in the ranks of your profession more quickly.

Possibly more importantly, putting in the work of connecting with like-minded people on the same path as you might pay major dividends. Growing an alternative skillset could lead to a career change that provides higher potential income and happiness.

When you put in the work, it’s hard not to make progress.

Be Prepared for Uncertainty

Just like athletes devote time to be mentally and physically prepared for competition, an effective way to level up in your career is by being prepared. Whether you’re interviewing for a new job or giving a presentation to your team, preparation is critical and impacts how you perform the given task.

When you’re prepared, you’re more confident. The stress that comes with uncertainty disappears when you’ve prepared appropriately, and with that, the likelihood of achieving the desired result is increased.

Be Accountable in Your Work

Being accountable is a trait that impacts many areas of life, even outside of your career. When things don’t go right, it’s easy to blame other people or external factors.

However, by taking ownership of your work, you’ll stand out from other workers, and you begin to build trust with the people around you.

While being accountable to others is excellent, it doesn’t stop there. It’s also important to be responsible for yourself and your goals.

For example, if you want to get promoted over the next year and you’ve laid out the steps needed to make it happen, stick to them. Too often, we set goals for ourselves, like New Year’s Resolutions, and end up leaving them behind when life gets in the way.

Embrace Your Team

In both the workplace and sports, being successful almost always requires good teamwork.

The backbone of a championship team usually consists of two essential factors: cohesion and communication.

But one doesn’t come without the other.

Cohesion is formed through effective and consistent communication. These two traits then begin to form a solid foundation of trust, leading to better, more efficient work.

Having a good relationship with a team or coworkers can create healthy competition, and a great example of this is the sales profession.

Imagine being a salesperson who works alone, didn’t have a team to fall back on, and didn’t know how the rest of the team was performing. They might get discouraged or lose sight of the end goal. So, there’s a reason that most sales teams operate together – it can create a healthy competitive atmosphere, increases engagement, and keeps everybody’s motives and goals aligned.

Aside from the performance aspect, embracing your team and having an enjoyable workplace makes work that much easier, and the foundation is built through being reliable, offering help to others, and being a good teammate.

The Takeaway

In our careers, it’s easy to lose sight of an end goal and feel like we’re not making progress.

But when you treat your career like a sport and strive to get better, it starts to feel like a natural part of your life, not just another task to check off the list each weekday.

The information contained herein is intended to be used for educational purposes only and is not exhaustive.  Diversification and/or any strategy that may be discussed does not guarantee against investment losses but are intended to help manage risk and return.  If applicable, historical discussions and/or opinions are not predictive of future events.  The content is presented in good faith and has been drawn from sources believed to be reliable.  The content is not intended to be legal, tax or financial advice.  Please consult a legal, tax or financial professional for information specific to your individual situation.