Why Timing is so Pivotal

           If you are like me, as you get ready for 2014 you'll be thinking about the timing of making moves to improve your life. After all, life is about timing and timing can be pivotal  to whether you succeed or fail. Some things like self improvement habits can be started on any day of the year, whereas the timing of career moves and investing should be more strategic. This blog will explore some of the pivotal scenarios and what we can do to increase our odds at good timing.

 

My personal list

 Here's a list of things in my life that I've relied on good and bad timing:

• Good: buying and selling my first house
• Bad: matriculating in law school in a year when the application pool doubled twice in 2 years
• Good: starting college when tuition rates had not yet skyrocketed
• Bad: starting graduate school after tuition rates had skyrocketed 
• Good: finding my first post graduate school job in an industry on the rise
• Bad: finding my first job out of college in an industry that went into a recession a few months later
• Good: taking a trip using frequent flier miles on a special promotion   
• Bad: tearing my calf muscle playing flag football when I was getting close to a peak fitness level     

          I could have listed dozens of more examples. Each of us will have to make decisions about when to take advantage of opportunities when the timing takes a turn for the worse. We will also have unplanned setbacks at the exact wrong time that may look like bad luck, but it may become a blessing in disguise later on. I may do a post on this in 2014.

 

The timing of your career path

        Being strategic with your career moves is absolutely critical in today's job market, since the average worker stays at each of his or her jobs for only 4.4 years. Over the duration of a 35 year career, you might switch jobs 8 times. Case in point, I left my first job out of law school after less than 15 months mainly because a competing company made me a substantially better offer. Of course, the offer came only after a recruiter contacted me and I decided to interview for the position. I have been with that company now for over 5 years with no regrets.

         There are a lot of factors in deciding when to make a career move. Some of the moves might be forced while others might be due to being burned out with or hating your current job or maybe you were just offered a better one. The latter scenario is almost always predicated by effort to find a new opportunity.

        The industry you are working in often has either an outlook of expansion or contraction. Two middle-aged salesmen (Owen Wilson and Vince Vaughn) in the movie The Internship found themselves looking for a new career when the watch industry was dying and their company suddenly folded. Much like these two salesmen, you'll probably land in an industry that is cyclical at some point in your career. If you find yourself in one of those cycles, you may be on the move more often than you'd prefer. Welcome to the 21st century job market.

       Opportunity recognition and having a wide array of skills will be helpful in making smooth transitions from one job to the next. Becoming qualified for jobs that are on the rise and being mindful of the warning signs of when your industry is going to collapse could have helped Owen Wilson and Vince Vaughn in the aforementioned movie. Doing your homework on the new company and industry you are considering will help you avoid colossal mistakes. 

          Conan O' Brien gave this sage advice a few years back:

I abandoned all preconceived notions of my career path and stature…Your path at 22 will not necessarily be your path at 32 or 42. One’s dream is constantly evolving, rising and falling, changing course. 

Life lesson: Be very cognizant of the future of your industry and alternate industries that have a brighter outlook you can qualify for. Your skill development over time may lead you to a field that is not even created today, so keep a flexible outlook and maintain a broad skill set.

The timing of buying your first house 

         Most people I know bought their first house just weeks or months after they qualify for a loan and had enough money for the down payment. This random approach can either be a future financial windfall or a major liability. Certain roller coaster markets like Phoenix, Las Vegas, and California the market can fluctuate dramatically depending on the year. Thus, there's a big difference between buying in a seller's market (2004-2009) when you'll eventually be underwater (i.e. owe more on your house than it's worth) or buying in a recession (2010-2012) when the property will increase in value sometimes dramatically in later years. 

          While it's impossible to know exactly when to buy or sell, there are definite warning signs that the market is priced too high or is in a recession. If there are multiple bidders for the house or the buyers are expected to pay closing costs or the price is at a historical high or the prices are higher than average income levels can afford, the house might be over priced. On the other hand, if prices are at historical lows, the seller is picking up all the closing costs, you are the only offer, those could be signs that it's a good time to buy.     

Life lesson: Being in a position to take advantage of an opportunity is a good thing, but you should take your time and wait for favorable market conditions to pounce. It's not easy to be patient, but it could prove to be a financial windfall to make that sacrifice. 

The timing of investments/retirement

           The timing of when to start investing in retirement plans will impact how much you can rely on compound interest to increase your nest egg. With an average 7.2% rate of return, your money doubles every 10 years. The longer you wait to start saving, the harder you'll have to work. Your best case scenario is that your disciplined approach to save money early will make you the majority of money needed to retire early. This is an absolutely no-brainer approach to the timing of saving for retirement.  

           Similar to real estate, being successful in making money in the stock market relies on good timing. Buying low and selling high makes each of us take educated guesses on the peaks and valleys of the market, which usually leads to a limited return. Of course, the best strategy is to hold stocks in good companies for decades. The novice investors who try to time the highs and lows don't usually do too well. However, if there is a crash, it's better to sell on the first day rather than wait it out. Some of the larger shareholders may have trouble moving their shares in a timely way. Crashes often lead to a 40% drop in your portfolio. However, after a crash is often a good time to buy.   

Life lesson: Start early in investing for retirement and recognize the warning signs of buying and selling your investments. Buying and selling stocks can be akin to gambling if you don't know what you're doing, so be very careful. 

The timing of dating

         The quality and quantity of your dating opportunities are greatly impacted by how old you are, how many chances you take, and whether the persons you are interested in are looking. You can't control who and when others are putting themselves out there to find a person to date. Some people are in dead end relationships, thereby losing opportunities to meet someone with long-term potential. What you can control is how many chances you take to find someone new. Increasing your odds by taking more chances to find motivated people to date can help you find the type of person you are looking for. Procrastinating making the push or making a half-hearted push to date makes it less likely that the stars will align aka the timing for the person you are interested in lines up with your timetable. 

          The best time to date for most people is when they are young (18-35). In fact, it's one of life's goals that procrastinating might have dire consequences. Your quality and quantity of prospects generally decline over time, so it's a risky proposition to sit at home during your prime dating years. However, you don't want to be so in love with the concept of marriage that you overlook major deficiencies in the person you are interested in. I knew someone who decided that she was going to get married in six months. She didn't know to who, but that was her goal! I don't know how that turned out for her, but I do know that it is not typically in our best interest to rush into marriage. 

Life lesson: Date while you are young and take your shots until you find someone you're excited to be with. Take some risks and go all in. You'll miss 100% of the shots you don't take.

Conclusion

          The adage that timing is everything is mostly true (being in a position and recognizing the opportunity are two other crucial elements). You will either miss opportunities or take advantage of opportunities based on timing. Although timing isn't usually 100% in our control, there are often indicators that increase our odds at success. Taking a big picture approach rather than a day by day approach in 2014 may give you the premonition to pounce during a good timing phase or to walk away before a bad timing event. Be patient and well positioned and good things will happen.