May 2004: On Money

Life engenders life. Energy creates energy. It is by spending oneself that one becomes rich.--Sarah Bernhardt

Aloha mai kakou,

April 15th has come and gone and you've another year's income tax filing behind you. This month, let's talk money.

What makes you rich?

Ironically, when you live on an island in the middle of the Pacific Ocean, over two thousand miles from the nearest continent, water is rare. You treasure all sources of fresh water and learn to conserve it. So it's no surprise that the Hawaiian word for richness or wealth literally translates to "double water." The word is waiwai; wai is the word for water (kai is sea water). Ho'owaiwai is to enrich, to bring about prosperity and abundance. I share this with you for it says much about the simplicity and purity of life's richness: our island ancestors made a distinction between wealth and richness, and so should we.

I got a wonderful gift from a massage therapist at Hualalai on my very last day of work there: she said she didn't want me to go without knowing what I'd done for her. She came to share with me her story of what came to be after she'd read an open letter I'd written for the employee newsletter at the start of the year 2001. In the letter I'd challenged the staff to make their New Year's resolutions count, and one of the things I urged them to do was to give themselves the benefit of a financial education, promising themselves they'd never let money limit them again.

I remembered the circumstances that had led me to write it: I had just finished reading RICH DAD, POOR DAD by Robert T.Kiyosaki, and I was inspired - I was on fire! Like most books about finances, he'd pointed out very eloquently how much money-compounding time I'd already lost, and I was determined not to let my kids or my staff lose any time either. I gave my children a $20 dollar allowance bonus to read the book for themselves, with another $30 if they could discuss it with me and create a better plan for their allowance and any other earnings thereafter: they could have half of this bonus in cash, the other half went into their college accounts. For my employees I'd started my campaign with that open letter.

I can't tell you how many times managers have said to me, "all my staff cares about is the money." Money is a motivator and you can't get around that - and why should you? Instead, you should harness that energy and get it to work in your favor. When I decided to teach the Alaka'i Nalu (the Hualalai watermen) about the department's monthly P&L, the first class I did on the subject was actually about 401k plans and why they should join up - for one thing, the company matched a portion of their contributions and at the end of the year they got free money - tax free! I explained why they needed to get in the habit of paying themselves first, before Uncle Sam, and even before their monthly bills. I wanted them to think of themselves as professionals - in every way. Within our discussion I openly revealed my own financial strategy and I admitted to my motivating factors.

Lucky for me, my parents had given me some straightforward money lessons: "Earn your keep, never put yourself in a position where you'll collect welfare or unemployment. Be a good citizen and pay your taxes, but the goal for April 15th is zero: no payment, no refund (a refund = poor planning on your withholding, don't ever think of it as a savings plan). Above all, do what you love: wealth comes from how you spend what you make, no matter how much or how little that may be."

If I was managing other employees today, we'd probably be talking about the big splash that Google is making right now with their decision to go public - but on their terms. When you treat your employees like business partners, everything in the business section of the newspaper is fair game: they join your efforts to benchmark the best company practices out there. What Google is attempting to do may be wildly successful for them, or it may backfire, but I applaud the fact that they are mixing things up, defying convention, testing new waters and demonstrating such bravery. All the kinds of things I loved talking to my staff about. I betcha anything they raise that $2.7billion they're shooting for, and I hope they do. Companies as well run as Google deserve to succeed.

My massage therapist? She went to Costco after she'd read my letter, and they happened to have David Bach's SMART WOMEN FINISH RICH on the book table. She bought it, put his strategies to work, and as she put it, "I don't work for money anymore; I've learned how to make my money work for me instead. I haven't been stressed out about money since then, and life is good. I love what I do, and I will always love my job here; no matter what I earn I can make it work." Employees are not just motivated by the money: they just may need your help in keeping it from being a de-motivator.

David Bach recently released another outstanding book, THE AUTOMATIC MILLIONAIRE and you can read it in less than a few hours: today it's the one book on money I recommend to everyone I coach (It'll be summer reading for my kids). Get one for yourself, and start thinking about giving the gift of a financial education to your own employees. Then you can work on all the other stuff you want them to care about.

Ho'owaiwai,

Rosa

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