Have You Met Mr. Market?

Do you know the allegory of Mr. Market? This useful parable—created by Warren Buffett’s mentor—might change everything you think about the stock market, its daily prices, and the endless news cycle (and blogs?!) built upon it.

The Original Mr. Market

The imaginary investor named “Mr. Market” was created by Benjamin Graham in his 1949 book The Intelligent Investor. Graham, if you’re not familiar, was the guy who taught Warren Buffett about securities analysis and value investing. Not a bad track record.

Graham asks the readers of his book to imagine that they have a business partner: a man named Mr. Market. On some days, Mr. Market arrives at work full of enthusiasm. Business is good and Mr. Market is wildly happy. So happy, in fact, that he wants to buy the reader’s share of the business.

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But on other days, Mr. Market is incredibly depressed. The business has hit a bump in the road. Mr. Market will do anything to sell his own shares of the business to the reader.

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Of course, the reader is always free to decline Mr. Market’s offers. And the reader certainly should feel wary of Mr. Market. After all, he is irrational, emotional, and moody. It seems he does not have good business judgement. Graham describes him as having, “incurable emotional problems.”

How can Mr. Market’s feelings fluctuate so quickly? Rather than taking an even emotional approach to business highs and lows, Mr. Market reacts strongly to the slightest bit of news.

If anything, the reader could probably find a way to take advantage of Mr. Market’s over-reactions. The reader could buy from Mr. Market when he’s feeling overly pessimistic and sell to Mr. Market when he’s feeling unjustifiably euphoric. This is one of the basic principles behind value investing.

But Mr. Market is a metaphor

Of course, Mr. Market is an imaginary investor. Yet countless readers have felt that Mr. Market acts as a perfect metaphor for the market fluctuations in the real stock market.

The stock market will come to you with a different price every day. The market will hear good news from a business and countless investors will look to buy that business’s stock. Will you sell to them? But a negative headline will send the market tumbling. Investors will sell. Please, they plead, will you buy my shares?!

Don’t like today’s price? You’ll get a new one tomorrow.

Is this any way to make rational money decisions? By buying while manic and selling while depressive? Do these daily market fluctuations relate to the true intrinsic value of the businesses they represent?

“Never buy something from someone who is out of breath”

Burton Malkiel

There’s a reason why Benjamin Graham built Mr. Market to resemble an actual manic-depressive. It’s an unfortunate affliction. And sadly, those afflicted are often untethered from reality.

The stock market is nothing more than a collection of individuals. These individuals can fall prey to the same emotional overreactions as any other human. Mr. Market acts as a representation of those people.

“In the short run, the stock market is a voting machine. Yet, in the long run, it is a weighing machine.”

Benjamin Graham

Votes are opinions, and opinions can be wrong. That’s why the market’s daily price fluctuations should not affect your long-term investing decisions. But weight is based on fact, and facts don’t lie. Over the long run, the true weight (or value) of a company will make itself apparent.

Warren Buffett’s Thoughts

Warren Buffett is on the record speaking to Berkshire Hathaway shareholders saying that Mr. Market is his favorite part of Benjamin Graham’s book.

Why? Because:

If you cannot control your emotions, you cannot control your money.

Warren Buffett

Of course, Buffett is famous for skills beyond his emotional control. I mean, the guy is 90 years old and continues his daily habits of eating McDonalds and reading six hours of business briefings. That’s fame-worthy.

Warren Buffett

But Buffett’s point is that ignoring Mr. Market is 1) difficult but 2) vitally important. Your mental behavior is just as important as your investing choices.

For example: perhaps your business instincts suggested that Amazon was a great purchase in 1999—at about $100 per share. It was assuredly overvalued at that point based on intrinsic value, but your crystal ball saw a beautiful future.

But Buffett’s real question for you would be: did you sell Amazon when the Dot Com bubble burst (and the stock fell to less than $10 per share)? Did Mr. Market’s depression affect you? Or did your belief in the company’s long-term future allow to hold on until today—when the stock sits at over $3000 per share.

The Woefully Ignorant Sports Fan

I know about 25 different versions of this guy, so I bet you know at least one of them. I’m talking about the Woefully Ignorant Sports Fan, or WISF for short.

The WISF is a spitting image of Mr. Market.

When Lebron James has a couple bad games, the WISF confidently exclaims,

“The dude is a trash basketball player. He’s been overhyped since Day 1. I’m surprised he’s still in the starting lineup.”

Skip Bayless: ESPN's different rules for me and Stephen Smith
Stephen A. Smith and Skip Bayless: Two Gods of the WISF world

Wow! That’s a pretty outrageous claim. But when Lebron wins the NBA finals and takes home another First-Team All-NBA award, the WISF changes his tune.

“I’m telling you, that’s why he’s the Greatest of All Time. The GOAT. Love him or hate him, you can’t deny he’s the King.”

To the outside observer, this kind of flip-flop removes any shred of the WISF’s credibility. And yet the WISF flip-flops constantly, consistently, and without a hint of irony. It’s simply his nature.

Now think about the WISF alongside Mr. Market. What does the WISF actually tell us about Lebron? Very little! And what does Mr. Market tell us about the true value of the companies on the stock market? Again, very little!

We should not seek truth in the loud pronouncements of an emotional judge. This is another aphorism from The Intelligent Investor book.

But I Want More Money!

Just out of curiosity, I logged into my Fidelity account in late March 2020. The COVID market was at the bottom of its tumble, and my 401(k) and Roth IRA both showed scarring.

Ouch. Tens of thousands of dollars disappeared. Years of saving and investing…poof. This is how investors lose heart. Should I sell now and save myself further losses?

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No! Absolutely not! Selling at the bottom is what Mr. Market does. It’s emotional behavior. It’s not based on rationality, not on the intrinsic values of the underlying businesses.

My pessimism quickly subsided. In fact, I began to feel silver linings. Why?

I’m still in the buying phase of my investing career. I buy via my 401(k) account every two weeks. And I buy via my Roth IRA account every month. I’ve never sold a stock. The red ticks in the image below show my two-week purchasing schedule so far in 2020.

Buy when high, buy when low. That’s the Lazy Portfolio way!

If you’re investing for later in life, then your emotions should typically be the opposite of the market’s emotions. If the market is sad and prices are low and they want to sell…well, great! A low price for you increases your ability to profit later.

And Benjamin Graham agrees. He doesn’t think you should ignore Mr. Market altogether, but instead should do business with him only when it’s in your best interest (ooh yeah!).

“The intelligent investor shouldn’t ignore Mr. Market entirely. Instead, you should do business with him, but only to the extent that it serves your interest.”

Benjamin Graham

If you log into your investment accounts and see that your portfolio value is down, take a step back and consider what it really means. You haven’t lost any money. You don’t lock in any losses unless you sell.

The only two prices that ever matter are the price when you buy and the price when you sell.

Mr. Market in the News

If you pay close attention to the financial news, you’ll realize that it’s a mouthpiece for the emotional whims of Mr. Market. Does that include blogs, too? In some cases, absolutely. But I try to keep the Best Interest out of that fray.

For example, here are two headlines from September 29, 2020:

Just imagine if these two headlines existed in another space. “Bananas—A Healthy Snack That Prevents You From Ever Dying” vs. “Bananas—A Toxic Demon Food That Will Kill Your Family.”

The juxtaposition of these two headlines reminds me of Jason Zweig’s quote:

“The market is a pendulum that forever swings between unsustainable optimism (which makes stocks too expensive) and unjustified pessimism (which makes them too cheap).”

Jason Zweig

More often than not, reality sits somewhere between unsustainable optimism and unjustified pessimism. As an investor, your most important job is to not be duped by this emotional rollercoaster.

Investing Based on Recent Performance

Out of all the questions you send me (and please keep sending them!), one of the most common is:

“Jesse – I’m deciding between investment A, investment B, and investment C. I did some research, and B has the best returns over the past three years. So I should pick B, right?”

Wonderful Readers

Great question! I’ve got a few different answers.

What is Mr. Market saying?

Let’s look at the FANG+ index. The index contains Twitter, Tesla, Apple, Facebook, Google, Netflix, Amazon, NVIDIA, and the Chinese companies Baidu and Alibaba. Wow! What an assortment of popular and well-known companies!

The recent price trend of FANG+ certainly represents that these companies are strong. The index has doubled over the past year.

Mr. Market is euphoric!

And what do we think when Mr. Market is euphoric?

How do you make money?

Another one of my favorite quotes from The Intelligent Investor is this:

“Obvious prospects for physical growth in a business do not translate into obvious profits for investors”

Benjamin Graham

You make money when a company’s stock price is undervalued compared to its prospects for physical growth. You buy low (because it’s undervalued), the company grows, the stock price increases, you sell, and boom—you’ve made a profit.

I think most people would agree that the FANG+ companies all share prospects for physical growth. But, are those companies undervalued? Alternatively, have their potentials for future growth already been accounted for in their prices?

It’s just like someone saying, “I want a Ferrari! It’s such a famous car. How could it not be a great purchase?”

The statement is incomplete. How much are you paying for the Ferrari? Is it undervalued, only selling for $10,000? Or is it overvalued, selling at $10 million? The product itself—whether a car or a company—must be judged against the price it is selling for.

Past Results Do Not Guarantee Future Performance

If investing were as simple as, “History always repeats itself,” then writing articles like this wouldn’t be worthwhile. Every investment company in the world includes a disclaimer: “Past results do not guarantee future performance.”

Before making a specific choice like “Investment B,” one should understanding the ideas of results-oriented thinking and random walks.

Farewell, Mr. Market

Mr. Market, like the real stock market, is an emotional reactionary. His daily pronouncements are often untethered from reality. Don’t let him affect you.

Instead, realize that only two of Mr. Market’s thoughts ever matter—when you buy from him and when you sell to him. Do business with him, but make sure it’s in your best interest (oh yeah!). Everything else is just noise.

If the thoughts of Benjamin Graham, Warren Buffett, and the Best Interest haven’t convinced you, just look at the financial news or consider the Woefully Ignorant Sports Fan. Rapidly changing opinions rarely reflect true reality.

Stay rational and happy investing!

If you enjoyed this article and want to read more, I’d suggest checking out my Archive or Subscribing to get future articles emailed to your inbox.

Source: bestinterest.blog

Dear Penny: How Do I Save for Retirement on a Teacher’s Salary?

Dear Penny,

I’m 51 years old and don’t have a large nest egg. I’m a single parent with three kids. I’m a second career middle school teacher, so there is not a lot of money left over each month. 

How much money should I be saving to be able to retire in my 70s? Where should I invest that money?

-B.

Dear B.,

You still have 20 years to build your nest egg if all goes as planned. Sure, you’ve missed out on the extra years of compounding you’d have gotten had you accumulated substantial savings in your 20s and 30s. But that’s not uncommon. I’ve gotten plenty of letters from people in their 50s or 60s with nothing saved who are asking how they can retire next year.

I like that you’re already planning to work longer to make up for a late start. But here’s my nagging concern: What if you can’t work into your 70s?

The unfortunate reality is that a lot of workers are forced to retire early for a host of reasons. They lose their jobs, or they have to stop for health reasons or to care for a family member. So it’s essential to have a Plan B should you need to leave the workforce earlier than you’d hoped.

Retirement planning naturally comes with a ton of uncertainty. But since I don’t know what you earn, whether you have debt or how much you have saved, I’m going to have to respond to your question about how much to save with the vague and unsatisfying answer of: “As much as you can.”

Perhaps I can be more helpful if we work backward here. Instead of talking about how much you need to save, let’s talk about how much you need to retire. You can set savings goals from there.

The standard advice is that you need to replace about 70% to 80% of your pre-retirement income. Of course, if you can retire without a mortgage or any other debt, you could err on the lower side — perhaps even less.

For the average worker, Social Security benefits will replace about 40% of income. If you’re able to work for another two decades and get your maximum benefit at age 70, you can probably count on your benefit replacing substantially more. Your benefit will be up to 76% higher if you can delay until you’re 70 instead of claiming as early as possible at 62. That can make an enormous difference when you’re lacking in savings.

But since a Plan B is essential here, let’s only assume that your Social Security benefits will provide 40%. So you need at least enough savings to cover 30%.

If you have a retirement plan through your job with an employer match, getting that full contribution is your No. 1 goal. Once you’ve done that, try to max out your Roth IRA contribution. Since you’re over 50, you can contribute $7,000 in 2021, but for people younger than 50, the limit is $6,000.

If you maxed out your contributions under the current limits by investing $583 a month and earn 7% returns, you’d have $185,000 after 15 years. Do that for 20 years and you’d have a little more than $300,000. The benefit to saving in a Roth IRA is that the money will be tax-free when you retire.

The traditional rule of thumb is that you want to limit your retirement withdrawals to 4% each year to avoid outliving your savings. But that rule assumes you’ll be retired for 30 years. Of course, the longer you work and avoid tapping into your savings, the more you can withdraw later on.

Choosing what to invest in doesn’t need to be complicated. If you open an IRA through a major brokerage, they can use algorithms to automatically invest your money based on your age and when you want to retire.

By now you’re probably asking: How am I supposed to do all that as a single mom with a teacher’s salary? It pains me to say this, but yours may be a situation where even the most extreme budgeting isn’t enough to make your paycheck stretch as far as it needs to go. You may need to look at ways to earn additional income. Could you use the summertime or at least one weekend day each week to make extra money? Some teachers earn extra money by doing online tutoring or teaching English as a second language virtually, for example.

I hate even suggesting that. Anyone who teaches middle school truly deserves their time off. But unfortunately, I can’t change the fact that we underpay teachers. I want a solution for you that doesn’t involve working forever. That may mean you have to work more now.

Robin Hartill is a certified financial planner and a senior editor at The Penny Hoarder. Send your tricky money questions to AskPenny@thepennyhoarder.com.

This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.

Source: thepennyhoarder.com

Should You Obtain Building Permits When Flipping Houses?

I have done many rehabs in my career as a house flipper, landlord, and even overseeing rehabs for banks as an REO agent. We have worked with many cities and counties pulling permits for remodeling jobs, but when is a permit needed? Depending on the quantity and type of work you do, you may or … Read more

Source: investfourmore.com

The Workplace of the Future: How to Prepare and Preserve Your Career

Workplaces have always evolved with technology, trends, and research. The changing environment of our global economy and advances in technology mean organizations have to adapt to stay competitive. This also means employees should keep their eyes forward and focus on the skills that will keep them employed and open new career opportunities. 

Looking into our immediate future, we’re seeing offices embrace telecommuting tools and implement flexible schedules to retain qualified employees and maintain social responsibility for the health and wellness of their teams. 

With increasing reliance on technology, we’re also seeing a large shift towards prioritizing soft skills. Early adopters of artificial intelligence technology are reporting a 16 percent increase in the need for business leadership roles as the need for researchers drops and advanced technology fills the gap. 

The best way to prepare for the office of the future is to set career goals and develop new skills, like how to run a productive meeting and collaborate within a team to increase productivity. Taking ownership of your skills and output can impress your manager and set you up for success when you negotiate your salary at your next performance review. 

Read more about workplace trends and how to invest in your future below:

Sources: Global Workplace Analytics | NPR | CareerBuilder | SHRM | Gartner | Gensler | Lifesize | KFF | Cengage | Deloitte | IWG | World Economic Forum | Journal of Experimental Social Psychology

The post The Workplace of the Future: How to Prepare and Preserve Your Career appeared first on MintLife Blog.

Source: mint.intuit.com

What I Would Change About My College Experience

 

Recently, I published the post How I Graduated From College In 2.5 Years With 2 Degrees and Saved $37,500. While I did graduate quickly and there are benefits related to that, there are things I missed out on by rushing my college experience.

Now I wouldn’t say I had the worst college experience, but I also wouldn’t say it was the best college experience in the world.

I understand that you can’t go back and change the past, but sometimes you can help others learn from your mistakes.

Below are some of the things I would change about my college experience:

 

I would have started paying off my student loans while I was in college.

While I did pay off my student loans quickly, I didn’t really put much towards them while I was actually in college.

Instead, I worked full-time and put most of my money towards things I shouldn’t have been spending on, such as for clothing and restaurants. It was a huge waste of money, and I can’t help but bang my head on a wall when I think about how much money I wasted.

Truth is, no one remembers your outfits and spending all your money on fast food is just stupid.

 

If I could do my college experience differently, I would have gone to a cheaper college.

I love the undergraduate college I went to, but sometimes I wonder why I was so stupid and didn’t just go to a state school instead. Luckily I learned from this college mistake and I went to a state university for my graduate degree. It saved me a ton of money and I still earned a quality degree.

While I did save money in certain areas, such as through cheap textbook rentals, taking as many college credits as I can, and more, I definitely could have saved a little bit more money.

 

I wish I would have taken more classes that mattered in order to have a better college life experience.

Instead of focusing on just classes that were needed for college credit, I wish I would have taken more time to carefully select my classes. Instead, I just took what I needed and what fit perfectly into my work-life schedule, and never really went beyond that.

Knowing what I know now, taking a broader range of classes would have been more enjoyable.

 

I would have taken college more seriously.

I had a great GPA when I graduated from college, but I didn’t really take my classes too seriously. I was so focused on working, that I didn’t really focus enough on college. This meant I often skipped classes in order to work, I would often try to debate whether or not I should do homework or if I should sleep, and more.

If I could go back, I would have attended more of my classes and learned how to budget better so that I didn’t have to work so much.

 

I would have liked to be more active on campus.

99.9% of the time, I would just go to class and then go straight home or straight to work. I never stayed on campus except for just a handful of times.

If I could go back, I would be more active on campus. I would have joined more school clubs, stayed for college activities/games, and more.

 

Studying abroad would have been a fun college experience.

The university I went to has satellite campuses all over the world, and I wish I would have taken advantage of that. Instead of being so focused on making money, I’m sure I could have done something in order to take one semester off from work.

 

I should have made some college friends.

Since I was so busy with working and going to school, I didn’t make any lifelong friends from college. Yes, I am Facebook friends with a few and I would talk to people during my college years, but that is not the same.

Instead, I stuck with my same group of friends from when I was in high school (however, none of us went to the same high school). I love them all, but I’ve even had people tell me to my face that it must stink to not have made any lifelong college friends.

It makes me wonder “What if?!” 

What college mistakes did you make?

What would you change about your college experience?

 

The post What I Would Change About My College Experience appeared first on Making Sense Of Cents.

Source: makingsenseofcents.com

LaMelo Ball Staying in Cam Newton’s Cool Condo in Charlotte, NC

LaMelo Ball Charlotte Condorealtor.com, Jared C. Tilton/Getty Images

Charlotte Hornets point guard LaMelo Ball has snagged a place to stay in Charlotte, NC.

The heavily hyped hoopster has moved into a condo owned by Cam Newton, the New England Patriots quarterback, according to Triangle Business Journal.

View this post on Instagram

A post shared by LaMelo Ball (@melo)

A report on social media seemed to fuel the headlines.

Newton bought the unit for $1.6 million in 2012, about a year into his tenure with the Carolina Panthers.

With his career in Charlotte coming to a close, Newton first placed his unit on the market in 2019 for $3.2 million. After signing a free-agent deal with the New England Patriots, he then relisted the home over the summer for just under $3 million. The price was then sliced again in November to $2.6 million.

There’s no evidence of a sale, and the property is still held by an Atlanta LLC connected with the quarterback. So instead of waiting for a buyer to emerge, Newton probably called an audible and struck a deal with the teenage hoops prodigy to lease the place.

___

Watch: Not a Slam Dunk: Why Won’t Michael Jordan’s Massive Mansion Sell?

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Off the court, Ball can now familiarize himself with the Uptown neighborhood. The posh pad is located in a boutique building called The Trust, whose modern charms have appealed to athletes and celebrities who prefer an exclusive address in the Queen City.

The NBA legend Michael Jordan (and majority owner of the Hornets) has reportedly occupied the entire seventh floor. And the rocker Chris Daughtry, of “American Idol,” purchased a unit in 2014, according to the Charlotte Agenda. With just seven luxe residences, the building offers ample privacy.

It’s quite a score for the 19-year-old. The spread, fit for a star, offers three bedrooms and 3.5 bathrooms on 3,335 square feet, and occupies half of the fifth floor.

Noted details of the modern design include an open living and dining space, as well as a state-of-the-art kitchen with Sub-Zero, Bosch, Miele, and Wolf appliances. A “Zen-like” master bedroom retreat with a spa bath boasts an enormous walk-in closet. Other perks include a wet bar and a glassed-in solarium. The property also comes with a Crestron home automation system.

LB
Kitchen

realtor.com

LB
Living area

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Dining area

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Master suite

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Cam Newton’s Pepsi machine

realtor.com

There’s been no word whether the Cam Newton Pepsi machine remains in place.

Ball was selected by the Hornets with the third overall pick in the 2020 NBA draft. He has two older basketball-playing brothers: Lonzo, who stars with the New Orleans Pelicans, and LiAngelo, currently in the NBA G-League. LaMelo has a signature shoe with Big Baller Brand, the company of his father, LaVar. He also has a role on his family’s reality show on Facebook Watch, “Ball in the Family.”

Newton was represented by Shane McDevitt, with The McDevitt Agency.

The post LaMelo Ball Staying in Cam Newton’s Cool Condo in Charlotte, NC appeared first on Real Estate News & Insights | realtor.com®.

Source: realtor.com

How to Be Confident but Not Arrogant

In 2007 I had my first baby. I was extraordinarily fortunate to spend a year at home with her. That year was a gift, full stop. But as I learned in 2008 when I returned to the workforce—new job, new company—taking a year off also drained my confidence tank.
 
Pre-baby, I knew what made me shine at work. Post-baby, I felt like I’d lost my mojo.
 
According to Psychology Today:
 
Confidence is a belief in oneself, the conviction that one has the ability to meet life's challenges and to succeed—and the willingness to act accordingly.
 
I knew how essential not only feeling but being able to display confidence was in my professional life. But after taking that year away, I wasn’t sure how to rediscover mine.
 
Previously I’d been a relationship-builder, a talent strategy advisor, and an analyzer of human capital data. Upon re-entry in 2008, I feared I’d lost my edge. And I was determined to show that fear who's boss. So I set my mind to making my mark, showing the world how smart and capable I was.

It was a total miscalculation on my part. And I got some serious feedback to prove it.

I did this by having something—actually, a lot of somethings—to say in every meeting. I was quick to offer solutions to problems. And when something needed to be done, I had it covered. No help needed. And that strategy went really well for me.
 
Kidding! It was a total miscalculation on my part. And I got some serious feedback to prove it. I’d been so focused on seeming confident that I’d shown up as arrogant. I will be forever grateful to the boss who gave me that feedback early and counseled me to course-correct.
 
I learned the hard way, but I learned a lot about what distinguishes confidence from arrogance. And today I share the biggest lessons. Here's the feedback my boss gave me, which I ran with. Thirteen years later, I'm delighted to pay it forward.

1. Know what you’re here to do

Arrogance happens when you over-index on you—how you’re showing up and being perceived. Confidence is focusing on the work—the outcomes you’re there to deliver.

The conviction that you have the ability to meet a challenge begins with being super clear about what challenge you’re there to meet.

Exuding confidence begins with experiencing confidence internally. The conviction that you have the ability to meet a challenge begins with being super clear about what challenge you’re there to meet.
 
Before an important interaction, ask yourself: What’s my role in this, and what am I expected to influence or deliver? Asking and answering those questions will center you. It will allow you to home in on where your voice has power, and where your silence or observation may add more value.
 
In 2008, I was so focused on seeming confident—which I somehow translated into a need for verbal diarrhea—that I lost sight of what I was there to do. I wasn’t hired to seem smart; I was hired to develop talent plans to fuel the business’s success.
 
Early feedback from that wonderful boss reminded me I didn’t need to offer a point of view at every turn. “Have the confidence not to speak up sometimes,” I remember her telling me. And having the poise to listen and observe when that's what's called for makes you seem all the more confident when you do offer an idea or point of view.

2. Listen like you mean it

Arrogance is pausing to give others a turn to speak. Confidence is truly hearing and absorbing what they have to say.

Ask probing questions to extract more meaning.

I was deeply guilty of pausing but not listening. Only when my boss called me out did I realize she was right. I was so focused on what I had to say next that I wasn’t taking in and reflecting on the value that others were bringing to the conversation. The pressure to seem smart led me to overuse my words and underuse my ears. And this backfired, positioning me as more arrogant than wise.
 
RELATED: Listen Up! Not Listening Is Holding Your Career Back
 
Again, that clarity of purpose should light the way. I was there to build a talent plan to help the business achieve its goals. So when the leader was talking about his goals and talent needs, that was my cue to listen. These were the moments that would provide meaningful insight and data to support my work.
 
Feedback from my boss helped me become an active listener. I wasn’t silent, but rather I was using my voice to restate what I had heard, or to ask probing questions to extract more meaning.

3. Let them see the sausage-making

Arrogance is believing the path from start to finish should be paved only with your ideas. Confidence is knowing you don’t know everything and having the humility to recognize that other people's good ideas won’t dull your shine.

Confidence is knowing you don’t know everything.

So as you’re working toward a deliverable, don’t wait for it to be fully baked or polished before you do the big reveal. (That works on HGTV, but not so much in real life.) As you move work along, build check-in points into your process. Let people watch as you make the sausage, and give your peers, your leader, your stakeholders a chance to influence the flavor before it’s fully cooked.
 
It does take confidence to pull back the curtain on an unfinished product. But it will better the outcome every time.

4. Say the bold thing

Arrogance encourages you to say what someone wants to hear. It will make you a hero just for today. Confidence allows you to say what they need to hear, and it will make you the hero in the long-term, where it really counts.

Arrogance encourages you to say what someone wants to hear; confidence allows you to say what they need to hear.

Fueled by feedback from my leader, I started finding moments of courage to push back on what my business client, George, believed was best. 
 
George was a salesman. His own climb up the corporate ladder was driven by his excellence in sales, and so he believed finding and growing great sales talent was the key to his business’s success. In our early days, as long as I showed George a plan designed to do just that, he’d praise my genius. 
 
But in time I came to realize this was a short-sighted play. We had great sales talent. The problem wasn’t finding more, but rather, finding ways to enhance collaboration between sales and client management. A stronger partnership between the teams would enhance the customer experience, in turn delivering bigger business results.
 
The first time I suggested this to George, there was no smile. But I'd done my research. I’d compared us with other companies doing the same, and ultimately, I won his support.
 
My recommendation delivered success in the long-run. But it took me time to find the confidence to say the thing he wasn’t ready to hear.
 
2008 was a painful year for me. And yet it delivered some of the most important lessons I’ve learned along the way about confidence. And as I pass these along to you, I realize there might be a fifth bonus insight: it takes a lot to share your own journey of failure (mine) in service of someone else’s success (yours). I choose to hope that’s a reflection of the confidence I’ve gained along the way.

Source: quickanddirtytips.com