As I sit down to write my thoughts, I am drawn to the power of gratitude. Perhaps it is that Thanksgiving is near or just that my heart is full of gratitude for the people and things that have made a difference in my life.
At the end of last week, I watched a short video by Russell M. Nelson about the power of gratitude. One line in the video caught my particular attention. He said, “I have concluded that counting our blessings is far better than recounting our problems.” While our world and lives have many problems, we all have many more blessings. (To watch the video (1) President Russell M. Nelson on the Healing Power of Gratitude - YouTube). Focusing on our blessings provides a healing balm for all of our worries.
This year Thanksgiving will be spent with my wonderful wife and children. No travel. No in-person visits with other family members. No get-togethers. No turkey (the boys wanted gourmet pizza instead).
I am extremely grateful for wonderful parents and grandparents who helped point me in the right direction and provided great examples of hard work, sacrifice, obedience and love.
I am grateful for where I grew up. My childhood neighborhood was and is filled with great people who looked out for each other, loved one another and found ways to help each other.
I am grateful for my teachers who encouraged learning and unlocked imagination and creativity. As well as professors who pointed me to areas I could excel.
I am grateful to a loving Heavenly Father who has blessed me with talents and abilities and provided a way to return to Him through His Son, Jesus Christ.
I am grateful for a wife who loves me unconditionally and is far better than I deserve. She makes want to be and to be a better person.
I am grateful for my children. Their agency can make life challenging at times but with the sorrow, they also bring joy and I love them.
I am grateful for my business and wonderful clients who let me share my talents and insight with them. I am truly grateful for them.
I am grateful for friends and community. While my closest friends are many miles away, I am grateful to have them in my life and for the part they play.
I am grateful for my country and the freedoms I enjoy.
I am grateful for my ancestors – from those who were at the first Thanksgiving to those who later left the countries they loved to find a place where they could gather.
The list goes on and on.
The past few days have had some real challenges in them for me. Practicing gratitude, even in this simple writing, has made me feel better. Gratitude really does have the power to heal.
“Nothing in this world can take the place of persistence. Talent will not: nothing is more common than unsuccessful men with talent. Genius will not; unrewarded genius is almost a proverb. Education will not: the world is full of educated derelicts. Persistence and determination alone are omnipotent. The slogan “press on” has solved and will always solve the problems of the human race.” – Calvin Coolidge
As I have read about the Westward migration and settlement of the American West this year, I am in reverence for those who persisted in braving the elements, starvation, loss of loved ones and still put one bare frostbitten foot in front of the other; persisting to their goal. They are incredible examples of persistence and determination.
We have seen, through a simple study of history, the benefits of those who persist - from the founding fathers and mothers of this country to inventors of the modern conveniences we take for granted. Behind each of them is a story of persistence, passion, and determination. The survival of entire species depends on persistence – think of the great animal migrations, from salmon, whale, bird, caribou, and others. The survival of our human species also depends upon it.
Newt Gingrich once said, “Perseverance is the hard work you do after you get tired of doing the hard work you already did.” There has been a lot of hard work this year as individuals worked to provide for their families and keep them safe. There has been a lot of hard work as business owners to stay in business, support their customers and employees and keep them safe. There will be more work to do.
Those who find themselves successful on the other side of this pandemic will be those that kept moving forward putting one foot in front of the other, thinking of new ways to do things and doing the hard work to pivot, adjust and grow.
I am generally under the mindset that if you couldn’t pay cash for it, you shouldn’t buy it. This means I advise against debt if it can be avoided. There may be times when debt can’t be avoided and you need to get a loan. At these times, it is helpful to know what your banker or lender is looking for. Getting along with your banker often means getting a loan from your banker.
In your personal life, you may need to borrow to buy a reasonable house or a reasonable car. Some may also need to borrow to complete an education or training (in my opinion this should only be done if you are able to pay off the debt within three years from program completion). Day-to-day expenses should never be financed with debt. Debt should never be used to purchase anything that will be gone shortly thereafter.
In your business life, you may need to borrow to buy a building or a piece of equipment. At these times you will have to determine if a lease (or rent) (a form of debt without taking ownership) or a loan (debt secured by ownership) makes the best sense. Sometimes a rental agreement with a purchase option is best, giving you time to determine if you really need to own it long term and if it will be able to pay for itself.
Your lender will look for five things to determine whether or not they will grant you a loan. Whenever a lender gives you a loan, they are only doing so because they believe that you are more likely than not to pay it back and/or their loss exposure is small compared to the potential gain. These are the five C’s of determining if you are fundable or unfundable.
The first is Character. A good banker will take the time to get to know you to help determine whether or not you are the type of person who is honest, keeps promises and is deserving of a loan. They will also check your background and financial position. Some bigger lending organizations will only do this impersonally through background checks and reporting agencies and not get to know you.
If you don’t have a relationship with your banker, it is time to start one. Reach out to the bank or branch manager and introduce yourself. Get to know them and let them get to know you. Discuss your accounts with them and ask for advice. The better they know you personally, the more likely they will be willing to stand up for your character.
The second is Credit. A good banker will run your personal and business credit reports. They will consider your experience in the industry and your dealings with lenders in the past. They will look to see how much other debt you have and if you are servicing it properly.
The third is Cash Flow or Capacity to repay. The banker will want to determine that your business (or you personally) will have the cash flow to service the debt. They will want to see a track record of profits and good management of resources. It would be a good to identify and plug cash flow leaks before you apply for a loan.
The fourth is Collateral. The lender wants you to have skin in the game should you fail to service the loan. If your business fails, they don’t want to be the only one to suffer the failure. They will ask to secure the loan with business assets and personal assets. While you may have equity in your business, generally equity can’t be turned into cash unless you sell your business so most don’t consider equity as an asset. The lender will look at your capital assets and the value if they are sold as well as your cash and working capital positions. If you have collateral risk, the lender believes you are more likely to work through hard times to keep the business going.
The fifth is your CPA. Your CPA, believe it or not, can help tip the scales in your favor when applying for a loan. Going over your financials regularly with your CPA and at tax time shows that you care about your business and how it is doing. Knowing that you regularly have these meetings give the lender some comfort that you take your business seriously and are watching over how it is doing. Your CPA, if hired to do so, will help you improve your cash flow as well.
Getting a loan is not always easy, nor is it always necessary. Being prepared should you need one by keeping in mind the five C’s will help you get a loan if the need arises.
Henry James said, “Three things in human life are important. The first is to be kind. The second is to be kind. And the third is to be kind.”
As a young man I participated in the Boy Scouts and would weekly raise my arm to the square making the Scout sign and recite the Scout Oath and Law. I have tried to pattern my life after the precepts in those promises as I truly believe they turn boys to men and men into better men. “A Scout is…Kind…”
Throughout this pandemic, our anxieties have risen and uncertainty has caused stress in our lives. We have seen issues of racial inequity and inequality trigger riots and unrest. A contentious election season has added to the conflict we each experience. Many have become sick, many have died, many have lost their jobs and had their lives impacted by quarantine, schooling and working from home. There is much we can mourn. There is much we could become angry about. Who isn’t stressed, anxious or feeling out of normal?
It is in these times we must dig into our toolkits and find the tool that will help us through all we are experiencing. The simple tool of Kindness may be the right one.
This is not just kindness in words and gestures. It must be sincere. We must be kind because it is our nature and in each and every interaction we have with others it must be shown. It must be coupled with compassion. You can be kind and compassionate and strong at the same time. It will be contagious as well.
Boris Groysberg and Susan Seligson in a recent article for the Harvard Business School’s Working Knowledge publication gave some effective ways to show kindness. They share the following phrases we can use to practice kindness:
“I hear you.” Really listen. Be fully present and don’t judge. Encourage…questions and concerns. Listen actively…”
“Are you okay?” Show a willingness to provide comfort and monitor for signs of distress such as social withdrawal and poor performance. Know when to refer…to professionals.”
“What can we do to help?” It may be as simple as validating…personal challenges…But being kind might also involve taking an active role…”
“How are you managing these days?”…be sensitive to the issues of exhaustion and the difficulty of working…unorthodox hours…”
“I’m here for you.” Let [others] know routinely that you are there for them when they need to share concerns or simply require a sympathetic, nonjudgmental ear.”
“I know you’re doing the best you can.” This statement is, with few exceptions, true.”
“Thank you.” Say it with sincerity and say it often.”
Philo of Alexandria said, “Be kind, for everyone you meet is fighting a hard battle.”
This blog allows you to experience the raw, gut wrenching drama of human conflict through accounting in each of its three stages: preparing to do battle, the thrill of victory and the agony of defeat.