I have a new side job.  I mentioned before that I love to play tennis and that I was interested in a tennis side job as a way to make more money. Well, this new side job is not quite playing for a tennis club one day a week – rather it is a coaching position.

I used to play for a my college club tennis team.  Actually, at the time, we were not affiliated with my university because we were not an official club.  However, the students I used to play with have finally made the club official with the administration and they are in their first year.  They asked me to be the head coach of the team and I agreed.  Although the position is not paid this year, this is good for me for a few reasons.  I get to play tennis more often with people who are close to my level.  Additionally, I am also allowed to use the university athletic facility at any time for free.  Finally, the position is not paid because it is the club tennis team’s first year and they do not have a budget until next year.  However, if I remain the coach for next year, the position could be paid.  Essentially, I am laying the foundation for another source of income, while doing something that I really love.

Have any of you had a chance to do something like this?

Football season started recently, which has really made me happy! Oh how I’ve missed my football.

If you have been following football, you have probably heard of a guy named Michael Crabtree.  For those of you who have not been following his situation, he is a rookie wide receiver who was the 10th player drafted in the first round of this year’s draft.  Apparently, he is a diva and thinks very highly of himself.  As he considers himself a much better player than many of the first round picks, he wants a higher salary than those players.  He was drafted by teh 49ers and has been holding out and refusing to play until his contract is settled.  He was offered $20 million with $16 million guaranteed for a five year contract.  Crabtree, through his agent, has threatened to hold out for the season and re-enter the next draft.

I am interested to see how this will play out.  First of all, I think Crabtree is a little “crabby” (hehe I know, I’m corny) and also needs to get over himself.  He has a great offer with a $20 million contract and he should consider taking it.  I’ve written about negotations before and completely fail to see Crabtree’s leverage/power in this negotiation.  Sure, he is a good player and was a first round pick, but it seems like his ego is going to hold him back.  It appears like the 49ers could offer him more money, but not as much as the other first round picks and this offer doesn’t seem like it is going to fly with him.

If I were him, I’d ask for more, but if the organization came back and said now, I’d take the offer or at least try to make a contingent offer.  For example, add another piece of compensation for my performance (ie. if I score ___ touchdowns or have ___ receiving yards, I get ___ dollars in bonus).  Right now, he is a rookie with no proven experience.  He hasn’t even played one down in the NFL, which is on a whole different level than college football.  Furthermore, by holding out for this long, it shows his attitude and his inability to cooperate with the team.  This makes him less attractive as a player.  There are also plenty of talented receivers who will enter the draft next year.  If he were to wait and re-enter the draft, it is likely that he would be selected later and probably take a pay cut.  Plus, the 49ers don’t need him.  It appears like their offense is going to be more focused on running the ball.  All in all, Crabtree should suck it up and take the contract.  His alternatives really don’t look so great.

Two days ago, I went back to my alma mater to represent my company at the career fair.  Now that I am on the other side of the table, I can see all the things I had done wrong, the things I had done right, and the little things that I wish I had thought about.  Here is some advice for anyone who is at a career fair:

1. Do your homework – Career fairs are short and they tend to fly by.  You only have a few hours to go to every company that you are interested.  The night before, review the list of companies that will be attending and do some research about each one.  This will save you time so when you get to the career fair, all you have to do is look at the map and see where each company’s table is located.  Start with the companies that you don’t care as much about and end with the ones in which you are most interested.

2. Have questions – I was impressed with students who approached me with questions showing that they already researched the company.  The most awkward and annoying thing is when a job candidate comes up to you, introduces himself or herself, and then stand there (as if I am supposed to start the conversation).  Ultimately, you are the one looking for a job – show that you are interested with a set of questions.

3. Dress to Impress – Dress as if you are attending the interview.  The recruiter’s first impression of you in critical.  They will probably form an opinion of you within the first 10 seconds of talking to you.  Make sure your attire is appropriate.

4. Practice your handshake – I experienced some awful handshakes.  Some people had sweaty palms, shook too vigorously or did the princess shake (wrist bent, fingers pointed down, and no grip).  Those shakes did not give me a good first impression.  Give a firm shake and look the other person in the eyes as you introduce yourself.

5. Approach the table with confidence and without hesitation - This is something I didn’t know as a student.  I used to walk around looking for a table to approach and sometimes walk past a table before coming back to introduce myself.  The people at the tables see you do this.  It shows that you are not sure if you want to talk to that company and are unsure of yourself.  Know where the companies you want to talk to are located and go straight to them.

6. Always ask for a business card – Always ask for a business card and remember what you talked about.  Take the business card and jot down notes about what you talked about so you can email the recruiter/employee later to follow up.  You should mention something you talked about so that they will remember you.  Also, try to leave your resume or sign up on any sign-in sheet to show that you had visited the table.

Any other tips you would give to people attending a career fair?

In a previous guest post, my friend Rich wrote a guest post about investing in Exchange Traded Funds (ETFs).  He mentioned that ETFs are an investing instrument that decreases the risk of the stock market.  Now, the question is, how does an ETF decrease risk?  This can be explained by the concept of diversification.  As Rich said, each ETF tracks a wide range of stocks.  Simply put, diversification means that you are not putting all your eggs in one basket.  Having exposure to a number of different stocks in one portfolio can help in that if the stock of a particular market or sector performs poorly, the other stocks could potentially counteract that poor performance.  An ETF provides diversification without the need for a large sum of money to buy a number of different invidual stocks.

Now, keep in mind, just because your portfolio is diversified, it does not mean that you are free from any risk.  You can never diversify away all types of risk.  There are two basic types of risks – systematic and unsystematic risk.  Systematic risk can affect a wide range of assets, while unsystematic risk impacts a small number of assets.   Systematic risk is sometimes referred to as market risk because it can impact an entire market.  Unsystematic risk is sometimes referred to as specific risk because it is specific to a certain number of assets.  For example, if the employees of a specific company stage a strike and the stock price tumbles as a result, this is unsystematic risk (specific risk) because this particular company was impacted by the risk.

Through diversification, you can only lower unsystematic risk and can never eliminate systematic risk.  This is because by diversifying your portfolio, you expose yourself to different asset classes or stocks.  If one or a few stocks are negatively affected by unsystematic risk, the other stocks are not impacted.  However, with systematic risk, the entire market is affected and  a large number of your stocks could perform negatively as a result.

The lesson here is that you always need to diversify your investments.  That means, spread your investments out between different asset classes.  Examples of different asset classes could be cash in a savings account, individual stocks, index funds, mutual funds, ETFs, CDs, treasury bonds, corporate bonds, international markets, different market sectors and many more.  If you do not diversify, you are not only exposed to the systematic risks, but also to the unsystematic risks.

This weekend, I went to Foxwoods Resort & Casino in CT for a good friend’s birthday party.  We went for two nights and had an awesome time going to the bars/clubs at night, relaxing by the pool during the day, doing a little gambling, and my favorite, gorging at the buffets.  This fun trip was not too expensive, but did require spending some discretionary income, which was well worth it for me since I had such a fun time.

As I said, we did some gambling during the trip as that is one of the major forms of entertainment at Foxwoods.  I am not a big gambler at all, but I do enjoy playing the games every once in a while.  It is obvious that the games are all created to favor the house (casino).  Every game has different odds and can be very fun.  I think there are some important points to understand before gambling:

1. Be prepared to lose – When you start playing any game at a casino, the odds are stacked against you.  If you want to make money by gambling, you are better off  not playing.  Unless you are an absolute professional poker player or can count cards in blackjack, you will never have the advantage.  The idea here, is that you are paying for entertainment.

2. Have a set amount you play with – It is so easy to play with more money than you should at the casino.  This is the problem many people run into which results in the loss of excessive amounts of money.  Go in with a set amount of money that you are comfortable with losing.  Once it is gone, you are finished.  It might even help to leave your ATM card at home. For me, $100-$200 is the limit.  I think to myself, I am willing to pay up to $200 for the entertainment.  Once I lose that, I am finished and not particularly unhappy (I hate to lose so it can still be upsetting) since I already determined that I was willing to lose that amount of money.

3. It is an incredibly low chance that you will win big – You always hear about how someone you know won a hundreds of dollars or even thousands at the casino.  What you don’t hear about are the 10 other times that person lost a lot of money at the casino.  People prefer to tell stories of when they win.  This gives us a false idea of how good our chances are of winning a lot at the casino.  Just keep in mind, the odds of every game are stacked against you.  The longer you play, the more likely you will lose money.

4. Be careful of being too risky – I wrote in a previous entry about the psychology of investing.  The psychology of gambling can be very similar.  People have a propensity to be more risk adverse when they are in the domain of gains.  That means when you are winning at the casino, you would probably want to take less risks because you don’t want to lose your winnings.  However, once you see those winning diminish and when you lose it all, you feel the need to play more to “win it back.”  When in the realm of losses, people are more open to risk.  This is where the casino will get you.  Since over time, the odds are in the casino’s favor, you are likely to lose all your winnings.  This will result in you wanting to play more to recover your losses.