Which Decision Will You Make? The Right One or The Popular One?

Michael was thrilled.  He had just been promoted at work.  He would assume his new responsibilities on Monday.  His hard work had been recognized and rewarded.  He’d receive a pay raise.  Best of all, he didn’t have to move.  His family could stay in the house they loved and the children could continue to go to school with their friends.  What more could he ask for?  It sounded perfect.

Michael went to work Monday morning expecting his friends and co-workers to welcome him with open arms, smiles, and hearty congratulations.  Imagine his disappointment when his co-workers greeted him warily, murmuring terse hellos and going right to their assigned tasks.  Michael realized that his co-workers no longer saw him as “one of the guys”; he was “one of them” … management.

Late that afternoon, Bernie, the guy he usually ate lunch with, approached Michael and explained that his mother-in-law had made a surprise visit and would there the remainder of the week.  Bernie asked if he could take the rest of the week off since he liked his mother-in-law and rarely got to see her.

Michael’s first thought was that granting Bernie’s request would demonstrate that he was still “one of the guys”.  His second thought was that Bernie was a key member of the team that had a project deadline on Friday and, if Bernie was gone, the deadline would not be met and the company’s reputation would be damaged, perhaps irreparably, with the client.  Reluctantly, he told Bernie that the answer was no … the deadline could not be extended.

At the end of the day, Michael’s mentor, Jake, pulled him aside and asked how the first day had gone.  Happy to have a sounding board, Michael shared the incident and asked Jake if he’d made the right call.  Jake responded by telling him this story …

“Michael, the first time I was put into a leadership position was when I was elected to be Senior Patrol Leader of my Boy Scout troop.  I realized very quickly that I would be asked to make important decisions that affected everyone else in the troop.  And, I found out really fast that I could make the right decision; or, I could make the popular decision.  What I finally figured out was that being popular didn’t necessarily make a decision the right decision.  If I was going to make a decision, I had to make the right decision; the one that provided the greatest benefit to everyone.”

Great leaders follow Jake’s wise example.  Popularity doesn’t necessarily make a decision the right decision.  Great leaders weigh the options and choose the one that provides the greatest benefit to the team.

Help! I’m Retired and Can’t Afford to Run Out of Money!

My friend Jack’s widow called me recently and told me that her brother had died.  She still hasn’t finished settling her husband’s estate and now she’s responsible for settling her brother’s estate, too.  While going through her brother’s papers, she found that she would be receiving a significant sum of money from the sale of his property.

“Help,” she said.  I need to create an income that I can’t outlive.  This is all the money I’ve ever have.  I can’t take a chance that it will be gone before I am.”

I was happy to tell her that there is a way to create an income that will last as long as she does.  It is called an annuity.

An annuity is a contract issued by an insurance company that can turn a lump sum of money into a monthly income.  The person receiving the income is called the annuitant.  The annuitant can receive this income for as long as he or she lives; or, by using an option known as “life income with period certain”, can receive an income for a specific number of years or for life; whichever is longer.  Consider this example:

Mark and Martina recently retired after selling the business that they had owned for 30 years.  They planned to travel and see all of the sites that they had dreamed of visiting over the years.  Sadly, Mark suffered a massive heart attack and died.

Quite naturally, Martina feared that she might outlive the money that they had received from the sale of their business.  To ensure that this could not happen, she purchased an annuity from the Shifting Sands of Daytona Insurance Company.  However, she also wanted to make certain that, if she died in the near future, the money that was left from the sale of the business would go to her daughter.

Her insurance agent recommended that she create a lifetime income guaranteed for a minimum of 10 years.  The annuity would pay her a monthly income of $1,500.  If she died at the end of the second year of payments, the contract would pay her daughter the remaining eight years (96 months) of payments; $1,500 per month.  On the other hand, if Martina lives another 20 years, the annuity will pay her $1,500 per month for as long as she lives.  Martina cannot outlive the monthly income; but, the income could outlive her for the benefit of her daughter.

Clearly, annuities are not the perfect answer for every situation.  But, if Jack’s widow is concerned that she might outlive the money she receives from her brother’s estate, an annuity might be the answer to her concerns.