April 24, 2006
Pay Yourself First: Not Just Good Financial Advice

Keynote Speaker:
James N. Crutchfield
President & Publisher, Akron Beacon Journal

More than 30 years ago, I probably was making all of about $12,000 a year as a young newspaper reporter when i got some sound financial advice from a guy trying to get me to invest even though i said i had no money.

He said: "Pay yourself first."

I haven’t always followed his advice. But it is important. I have remembered it and I think it a lot – and not just about money.

Of course, money is important.

Most of you don’t know me well enough to know that I'm a political junkie. I consider politics an honorable business. I think most relationships, on any level, are a form of politics. Life is about the trading of self-interests for the mutual benefit of people. That’s my definition of politics.

In my career, I covered a lot of politics, and I worked a couple of years for one of the truly honorable people in politics today, United States Senator Carl Levin.

He’s not a household name here in Ohio: one, because he’s from Michigan, but also because he cares about his work, not so much about being the center of attention.

I tend to think in political terms, and one of my favorite phrases came from the great California political figure Pat Brown. "Money," Brown said, "is the mother’s milk of politics."

Frankly, one reason I like that phrase is that money isn’t just the mother’s milk of politics. It feeds a lot of things.

There used to be a radio and television preacher, the Rev. Ike, I believe it was, who would say that money isn’t the root of all evil – it’s the lack of money that is the root of all evil.

So despite all that is good that Heart-to-Heart stands for, I'm not going to stand up here and try to say that you should stop caring about money and only care about heart.

Having a good heart alone isn’t going to feed, cloth, shelter or provide glasses and dental care for the kids who live along South Arlington, and it isn’t going to give them hope when all about them is bleak.

For the past few years, I've been a reading tutor at Barber School in Goodyear Heights. I’ve seen the hope and the hurt in children’s eyes as they think about our world outside of theirs. Yes, if you’re here today, it’s probably because you and I live in a world of privilege that seems as remote from theirs as ours does from mars.

I look into these children’s hopeful and hurting eyes, and I fear for the day when their hopes and hurt are so crushed that there won’t be anything but emptiness in those eyes, all of the feeling and the spirit gone – and we will have lost yet another generation. Who knows what could’ve been when we lose children.

My first wife taught in one of the toughest schools in Detroit. But she didn’t find guns and drugs the greatest danger there. Apathy was the problem. Her students didn’t have hope.

Those kids along South Arlington need love, but their mothers, fathers, grandmothers and grandfathers also need good jobs and resources that only money will give them.

When you fly, the flight attendant tells you on takeoff that in the case of a sudden loss of cabin pressure, a mask will fall from the space above you. If you’re traveling with small children or someone who needs your assistance, first place the mask over your nose and mouth before helping them with theirs.

In other words, pay yourself first. You must help yourself before you can help others.

You can’t help others if you’re too weak yourself – and that includes mind, body and soul.

So let’s talk some more about the money.

David Bach, a financial expert who is the author of "Start Late, Finish Rich," on CBS’s early show a couple months ago gave similar advice to what I got a long time ago.

"Pay yourself first, at least one hour’s worth of income every day," he said.

Technically, Bach says that you should pay yourself the first 12.5 percent of your gross income. But he thinks it’s easier for us to remember that we should pay ourselves an hour a day.

If you’re a late starter, that is, more than 40 years old and looking to retire at 65, you’ll have to do better than that.

As a late starter, you’ll need to set aside the first and last hour’s pay for yourself each day. In other words, you’ll need to pay yourself two hours a day.
Even if you can’t do what he says at first, do what you can – and stick with it.

Says Bach, obviously a baseball fan, "It’s like just trying to get on base. You don’t have to swing for the fences every time."

It’s Monday, the beginning of the fourth week of April, one month into a new Spring, at the start of a new century and a new millennium — have you paid yourself yet?

Of course, paying yourself isn’t just a financial issue. How are you paying yourself healthwise?

How do you feel?

Dr. James Rippe, a professor at the Tufts University School of Medicine, reports that 90 percent of the population rates its health as good or excellent. At the same time, he says, 75 percent of us are inactive and 30 to 40 percent are obese.

Among executives, most self-report their weight as average. Yet, 36 percent are obese and only 27 percent exercise enough.

"Entrepreneur" Magazine surveyed the CEOs of its "Hot 100" companies and found 100 percent said they were healthy. One said he was "normal weight" with an asterisk: "overweight according to my wife and doctor."

Executives generally are highly educated, affluent and used to acting on data. Yet, they deny the facts about their own health and don’t handle their own health nearly so well as they run their businesses.

What should you be doing to pay yourself?
See a doctor regularly.
Get 30 minutes of real exercise on a regular basis.
Schedule routine testing. Have your cholesterol checked. Women, this means breast exams. Men, get your prostate checked.
Some of you may know that my brother died following prostate cancer surgery in 2004 – and that I had prostate cancer surgery last august. My doctor insisted on checking me out after learning of my brother’s death. My life may have been saved by the loss of my brother.

If you’re in this room, you’re probably a leader. On health, you should be leading by example.
Eat well on the job (instead of the junk, we should be snacking on peanuts, fat-free pretzels and Fig Newtons).
Exercise on the job. Provide a time and place for exercise and reward healthy behavior.

Remind people that good health leads to better job performance. We’re talking
physical health and mental health.

Leaders are perceived as superhuman and usually try to act the part. Of course, that’s a terrible thing to do to yourself.

Two Houston businessmen received national attention recently after they started sharing their stories with other CEOs.

John Sage was a star linebacker at Louisiana State who went on to become a successful Houston real estate entrepreneur.

Philip Burguieres built billion-dollar companies in oil services after being the youngest CEO of a Fortune 500 company at age 35.

But at the peaks of their careers, both of them wanted to die, and they were sure the world would be better off without them. They were depressed.

Casual acquaintances, they happened to meet one night when they were both out to dinner with their wives. Burguieres had been reported ill, and Sage asked about his health. Burguieres confided his depression, and Sage confided his, too.

The wives went home, and the two men stayed behind and talked. And they talked on the phone the next day. For the next year and half they talked on the phone every day and met more than once a week in Burguieres’s office, what they called the ‘depression suite."

Today, they’ve recovered, and they credit their relationship with getting them through the tough times.

Psychologists say that the causes of unhappiness among business leaders have roots in the corporate environment and in the personality traits that make leaders successful: The take-charge, self-sufficient attitudes prevent leaders from getting help or recognizing they need it.  Building an identity on achievement makes them vulnerable to business downturns.  Boy, do I know about that.
 

Every week, every month or every quarter, you get a report card. Those damn earnings reports. It’s relentless pressure.  You’re isolated. You can’t take the mask off. The day that Burguieres checked himself in for treatment, the Houston newspaper said he stepped aside for health reasons. The company’s stock fell 10 percent.

Success is a letdown. The exhilaration comes from the climb. If you turn risk-averse, you have no goals.
Hard-charging success is hard on intimate relationships.  Executives have the wherewithal to mask problems.
So how do you pay yourself?

For some, it’s spirituality.

John Sage accepted that he was a child of god, that life wasn’t just about him. His achievements in sports and business were not the only measure of who he was. He developed a sense of service.

For others, it’s the development of meaningful connections with family and friends.

In the Sage-Burguieres magazine story, "even CEOs get the blues," Hara Estroff Marano wrote: "People connect not by parading their strengths but by confiding their fears, their disappointments, their hurts, as well as their hopes and dreams."

When you measure you self-worth against others, somebody or something is always bigger.

Burguieres refocused on the family he’d left behind as he climbed the ladder, but he, too, also focused on service.

One of his fellow patients in a professionals-in-crisis program told him that he would make it and he had a duty to help others. She said, "I want you to remember that, because I'm not going to make it." She committed suicide a year later.

Today, he sets aside time to meet with troubled CEOs and devotes a third of his time to improving mental health services in the community. He lobbys for services to the indigent and homeless in Houston.

Sage founded an organization that brings prisoners together with victims of crimes so that the prisoners can confront the consequences of their actions and the victims can repair their lives. Sage hasn’t used an antidepressant for five years.

Sage and Burguieres are paying themselves with service to others.

But we have to remember not to make service too difficult.

We have to pay ourselves first.

At the risk of offending my hosts today, I will say that Akron, Ohio, is the 7:30 a.m. meeting capital of the western world and that is not a good thing.

How many of you here today have children at home, particularly young children?

How many of you hugged your child before you left for here this morning?

How many of you talked to your son or daughter or your wife or your husband before you left today? Or did you get up before dawn and get out before anyone else was much awake?

I have a friend who’s not here today because she’s a single mother of a three-year-old, and she can’t take her daughter to child care before 7 a.m. Besides, she wants to spend some quality time with her child before heading off every day to run an important agency in this town.

We have traditions set up by guys for guys who had wives who stayed at home. Today, we have dual career couples, working parents, and single parents facing competing pressures for their time.

We don’t make it easy for younger men and women, particularly women, who want to serve in this community. It’s very stressful, or impossible.

And some of us wonder why we don’t have more young people involved in the leadership of this community!

My friend made a decision to pay herself first this morning, and I applaud her for it.

We need to be better examples – and let me be very clear, I count myself first among those who need to do better. We need to show those who work for us that we know how to better balance home and work – including these non-workplace meaningful connections.

Our corporate cultures need to change to allow the flexibility to make some of these meaningful connections during the regular workday.

We need to show how we pay ourselves first.

There are payoffs for paying yourself first.

You do a good job financially, and you can afford a comfortable life past age 65. You eat well and exercise, you’ll feel good and probably live longer and happier. You’ll certainly be happier if you look out for your mental health.

But life’s full of adversity, and none of us is Pollyanna, unaffected by the difficulties that buffet us.

I was born in a little steel town, McKeesport, PA., About 15 miles southeast of Pittsburgh.

My father was a steelworker, a smart man with only a 10th grade education. He also was an alcoholic and a heavy smoker. He died when he was 52 years old.

On the street and at the mill, Chuck Crutchfield was everybody’s friend, a great guy.

At home, he was an abusive husband.

My mother didn’t drink a drop of alcohol, nor did she smoke. She grew up in the country, in the Shenandoah Vally of Virginia, on the same homesteads, tending the same big white houses, where those in her family before her were slaves. She was proud to have graduated from segregated Manassas High School.

Genteel Virginia was a place where the racial divide was so deep that when the United States Supreme Court ordered the end of segregation in America’s public schools, the schools closed rather than integrate.

My mother was a religious woman who raised her three sons in the Baptist church and with true Judeo-Christian values. And let me say parenthetically here, true Judeo-Christian values mean respecting those who believe differently.

My mother was religious, traditional and honest, but she was no fool. She learned how to pay herself first.

She took jobs as a domestic. One of those jobs, by the way, was for the family of my second grade teacher. And when she and my teacher saw that I couldn’t read, they worked with me and on me until I could read. Otherwise, I wouldn’t be here today.

I also remember the day when she, this mild-mannered, if not meek, woman who normally simply did what she was told, stood up to a cop who wanted to take her oldest son off and intimidate him. "You’re not taking him anywhere," she said, and he didn’t.

From her jobs as a domestic and self-trained seamstress, she stashed away a little money. Also, I learned only when she was nearing death, she would show my father receipts indicating that she paid more than she really did for groceries so she could stash away some more money.

Finally, days after my baby brother finished kindergarten, she, my two brothers and I ran away from home. She left when my father was at work because he would have killed her rather than let us go, she said.

We moved to the housing projects in the big bad Hill District of Pittsburgh. I slept in a twin bed and my brothers in bunk beds in one bedroom, my mother was in the other bedroom. We had no furniture in the living room.

I do remember the prayer she placed inside the front door of our apartment. Every day I

went out I could read it: "God grant me the serenity to accept the things I cannot change, courage to change the things I can and wisdom to know the difference."

I have a copy above my desk today.

As a boy growing up and playing baseball on Pittsburgh’s Hill, I fell under the spell of a Pittsburgh Pirate player named Roberto Clemente.

Some of you — maybe many of you, since I’ll talk about him to any of you who will listen and probably even if you don’t – know that Roberto Clemente played baseball the way I wanted to play baseball and the way I want to live. He played all out. He would crash into the outfield wall to chase down a flyball in old Forbes Field in Pittsburgh. Then he would get up, to crash into the wall again another day. He died taking relief supplies to earthquake victims in Nicaragua because he got on an overloaded plane to try to make sure the supplies would get to the people who needed them, not to the government profiteers.

Why do I tell all this?

My mother and Clemente were models of resilience.

Resilience comes from investing in yourself, from believing in yourself, from paying yourself first.

My mother complained that my brothers and I didn’t know we were poor. But she didn’t treat us like we were poor either. She valued quality over quantity, and she gave us the best of what she could afford.

She also expected from us the best we could do. Today, my brother, Bob, a sociology professor at the University of Washington in Seattle, is one of the best in his field. My late brother, Russ, was a human resources manager who was on the transition team when his company in Reading, PA., was bought by FirstEnergy. I have fond memories from his visits here.

I have crashed into some walls lately.

A little less than two years ago, my otherwise healthy mother was taken down by cancer. Six months later, my brother, Russ, died following his surgery for prostate cancer. And, you know, you never think you’ll live longer than your baby brother.

Six months later, my doctor told me that I had cancer.

Within another six months, my company was up for sale. Then I learned that my newspaper would be sold again. I don’t have much of a clue who will own the Akron Beacon Journal in the very near future.

Often, these days, I'm asked how am I doing. It is asked in the same tone that I heard when I was facing surgery, like I'm a dead man walking.

But I’m doing fine. I’ve got a lot resiliency in my account. I’ve paid myself pretty well over the years.

As Daryl Conner said in his best-selling "Managing at the Speed of Change:" "Change is not perceived as negative because of its unwanted effects as much as because of our inability to predict and control it. Thus a critical factor affecting our perception of change as positive or negative is the degree of control we exercise over our environment."

That’s another way of saying, "God, grant me the serenity…"

By paying myself first, I’m in a better position to try to help my colleagues for whom this period of uncertainty is traumatizing.

I want them to understand that change is an ever-unfolding process that’s doesn’t have to mean calamity, that staying the same is more costly than making a transition and that the discomfort of ambiguity is a natural reaction.

As a matter of fact, this resiliency is a key need in today’s workforce. Tiger Woods has opened an innovative, inner city learning center to foster a sense of hope – maybe the ultimate payment to self.

Paying yourself first requires getting real with your yourself and with others.

You have to pay attention to your own needs. If you’re not healthy — financially, physically and emotionally — then you can’t help yourself, your family and your community — in that order.

We need to encourage others to pay attention to their needs. Encourage them to use wellness programs and personal and community connections. Don’t let them wait until it’s too late.

By the way, Burguieres, the Houston oilman says, "CEOs know all of the tricks (about treatment)…they go at 6:30 in the morning and they pay in cash."

No matter what, we have to be honest with ourselves to pay ourselves what we need.

It’s what I understand Heart-to-Heart is all about, connecting hearts to benefit the minds, bodies and souls.

Self interest is the best motivator on the planet.
So go ahead, pay yourself first.

Serenity Prayer
Reinhold Niebuhr

God, grant me the serenity to accept the things I cannot change,
courage to change the things I can,
and the wisdom to know the difference.

Although known most widely in its abbreviated form, above, the entire prayer reads as follows:

God, grant me the serenity to accept the things I cannot change,
courage to change the things can,
and the wisdom to know the difference.
Living one day at a time,
enjoying one moment at a time,
accepting hardship as the pathway to peace;
taking, as he did, this sinful world as it is, not as I would have it;
trusting that he will make all things right if I surrender to his will;
that I may be reasonably happy in this life,
and supremely happy with him forever in the next.
Amen