APPENDIX B
Financial Planning for New Career Realities

ACCORDING TO THE National Bureau of Economic Research, the Great Recession officially began in December 2007. Ordinary citizens, however, felt its effects long before, as factories closed, unemployment rose, and the housing market took a tumble surpassing the dot-com bubble burst in the first few years of the new millennium. The Great Recession has been by far the most severe downturn since the Great Depression, and it has caused comparable levels of economic trauma. A look at that era provides another instructive example. The decade immediately preceding the Great Depression, the “Roaring Twenties,” was a time of conspicuous consumption that came to an abrupt end in 1929. Sound familiar? Well, that depression fundamentally changed the consumption patterns of Americans for the next forty years.

Research done by Deloitte and Harrison Group presented a compelling case that “years of keeping up with the Joneses, spending beyond limits, and a tolerance for wastage also seem to have come to an end,”¹ just as it did following the Great Depression, and the changes are likely to last for several generations as well.

The message throughout this book has been that if you want to find work, manage your career, and help your children with their careers, you must know that the job-hunt rules have changed. In a different time and under different circumstances people thought of the financial planning they did after they had been laid off as “contingency planning.” That was when white-collar terminations were rare and contingency planning was optional. Today, we must stay on our toes at all times. Careers don’t last a lifetime, and jobs sometimes don’t last long enough for the ink on the offer letter to dry. How someone manages his or her financial affairs requires close attention and careful planning.

This new urgency applies especially to married white-collar couples. They are mostly two-income families with an unprecedented ability to take on debt. For them, job loss can be doubly damaging. For instance, Tim and Doris felt good about their careers. Married five years with one child, and a combined income of $130,000, they were living the American dream. Their college degrees had paid handsome dividends. So they were sick and tired of the continual nagging from Tim’s parents about the importance of financial planning and the warnings that they had taken on too much debt. The advice frequently came in the form of irritating “conventional wisdoms” from what seemed like ages ago. “My dad grew up during the Depression,” Tim’s father would begin, “and he always reminded us that it was not how much you make—it’s how much you spend.”

From Tim’s perspective, their cash flow easily allowed them to meet monthly obligations. They wondered if his mom and dad were just jealous of their lifestyle. Then disaster struck. Their worst nightmare took the form of successive notifications from their respective employers that their jobs were scheduled for elimination. An MBA provided no protection against downsizing.

They quickly saw that their monthly financial obligations would overwhelm the limited funds they had available. The mortgage payment alone took up most of one of the paychecks. Then they had two car payments, high credit-card debt, a bill consolidation loan, and other monthly “necessities” just to live. Their intent all along had been to do some serious financial planning. Now they were in scramble mode.

Prudence and better financial planning would have helped them avoid their predicament. That story can be multiplied thousands of times around the country. The American consumer is in the midst of a sea change with respect to white-collar jobs and the financial benefits that come with them. Americans have begun to tighten their belts, change their consumption habits, and generally prepare for a very different kind of economic future. It makes sense for you to do the same. You can start by coming to grips with the reality that sound financial planning and career management consider workforce instability as a matter of course now. In this brave new world, the value you learn to create becomes the bridge to your next job opportunity. This is a much easier journey if you have sufficient cash on hand while you cross.

Financial Planning

First, understand that this section is not about how to invest. “Financial planning,” according to Ken Little, a well-respected personal financial planner, “is nothing more than being very intentional about how you spend, save and invest.”² While this has a lot in common with career management, the objective here is much simpler, and in many respects more immediately useful.

Most people understand the need to do some form of financial planning but they put it off. They make it a priority only when there is a pending event (the birth of a child, applying for a mortgage) or an imminent crisis (loss of one’s job). Parental reaction to the skyrocketing cost of college is a case in point. When asked, most people say they intend to pay for their children to attend college. Yet a full majority do not set aside sufficient funds to make that happen.

Saving for retirement suffers from the same shortsightedness. We know we should plan, but most of us do not save at a rate that will allow us to retire at our preretirement standard of living. Long-range planning simply isn’t as urgent as the next month’s rent check. Retirement moves up the list only when it gets closer at hand.

The changes in rules for finding white-collar work have put financial planning and career management on an equal footing. Flying blind in either instance will not necessarily end in disaster. But by taking appropriate action now, you can improve your chances of successfully navigating the inevitable career turbulence that awaits practically all of us. You need to know certain essential tools for survival. These include:

Managing the debts on your immediate horizon

Getting a grip on your cash flow

Understanding what a real rainy-day fund is—how to set one up and where to keep it

Realizing the dangers of excessive credit-card use

Knowing how large a mortgage to take out

These topics provide the basics for thinking ahead in terms of finances. Understanding the steps involved will go a long way toward navigating any financial shoals you run into. You just have to sit down and do it.

What’s on Your Immediate Horizon?

Make a list of payments that you intend to do in the short term, which are not now a part of your monthly cash flow considerations. By short term, I mean six months to two years. In some cases, you may want to extend the time period to thirty-six months. These events are farther out, but you can be pretty sure they will happen. An example might be a class reunion trip to another country that is in the planning stage and you intend to participate.

Some people protest that their upcoming horizon is a blank slate. If you really think about it, you’ll find that just the opposite is true, because you will discover that it is virtually impossible to look three years into the future and not anticipate some events out of the ordinary. The more you practice developing a horizon list, the better you will get at it. Take a look at the list in Figure B.1 for some typical examples of financial events that are often on someone’s immediate horizon that are not included in current expenses.

FIGURE B.1 Immediate horizon list.

Other things may come to mind, so add them as appropriate. You want to select purchases you are likely to make without either planning ahead or taking the time to see how they affect your month-to-month obligations. Sometimes the decisions are long-term commitments that eventually stretch a person’s obligations beyond his or her income, and the individual ends up having to finance the debt obligations using expensive debt instruments and/or lose control of his or her ability to manage emergencies.

Clearly, not all short-term horizon decisions put people in a negative position. Starting to save and/or building an effective rainy-day fund are examples. But they still require funding and need to be taken into consideration as you plan.

By taking the time to understand what is on your immediate horizon, you have gotten through the first phase of any planning situation. Create a regular calendar reminder to revisit the list and change it as your circumstances require. For example, you may decide that buying a new car or taking a trip is not such a good idea, after all. That frequently happens when people begin to make realistic assessments about what they can and cannot afford.

When Bill and Claudia completed their horizon list, they decided they could either borrow the money to pay for their vacation in California or save for it and pay cash. They saved, and as the housing market remained sour, they made a further decision. They took a “stay-cation,” something that has become so popular during the Great Recession. Those are shorter trips with a focus on having fun in less expensive ways. They judged the decision a great success. Their series of small trips around the state gave them one of their most memorable summers ever, and they were able to finally save enough to fund that rainy-day account they had put off for far too many years. For the first time they had the financial wherewithal to sock away some money. They became more focused on how much they spent and less on how much they made. A little planning went a long way.

Getting a Grip on Your Cash Flow

Now that you have a good idea of what is on your immediate horizon, let’s turn to cash flow. Some people start here, especially when they do not have a clear idea of what they face in the way of coming events. You know that some unexpected problems are always going to come up, like the dishwasher going kaput. The question, then, becomes, Do you have enough cash flow to accommodate the unexpected?

Oscar knew that in two years he would need a new car, and he developed a savings schedule that would give him enough for a sizable down payment. When the time came, his plans were interrupted by a layoff notice. He had the money to go ahead with the purchase, but the timing was wrong. So he delayed buying a car and went job searching, which he concluded in three months. Because his new job came with a sign-on bonus, he now had more options than planned for. On one hand, he could purchase a less expensive car for cash; on the other, he could buy a more expensive car with a sizable down payment. That was a nice luxury that was made possible only because he planned ahead.

The amount of unused cash you have on hand at the end of the month will tell you a lot about how well you will be able to finance future events. It will also tell if you are running a monthly deficit and how it is being financed. That money has to come from somewhere, and people routinely run up their credit cards without thinking. When that method of deficit spending happens month after month, you will rack up an expensive and growing debt that gives little wiggle room when an emergency occurs. Let’s see what your cash flow situation looks like.

Cash flow is nothing more than monthly income minus expenses (fixed and variable). The income part is pretty easy to calculate. Your monthly/weekly payroll check stub will tell you exactly how much that is. If your monthly take-home pay is highly variable, calculate your yearly income and divide by twelve.

Use the form in Figure B.2 to calculate your monthly net cash position. Take your time, as the numbers are not always at your fingertips. And if you are seriously off the mark, it will distort your financial situation.

Expenses are trickier, and the tendency for most people is to underestimate them. Here are some helpful hints:

Replacing the tires on your car should be treated as a monthly expense. In accounting terms, they are accrued for and paid out as required. You should do the same.

Utility bills are highly variable. Eliminate the variability by asking the utility companies to supply you with how much you spent last year and divide that into monthly installments. Be sure to set the balance aside anytime the actual payment is less than what you project. It will all balance in the end. Better yet, ask the utility company to put you on a plan whereby your monthly payments are all the same.

You have probably noticed that practically each month brings an unexpected expense—back-to-school clothes for the kids in August, lawn-mower repair in May, unplanned trip in October, and so on. They should not be treated as items to be paid for out of your emergency fund. You can plan for them by reviewing your checkbook and credit-card stubs to estimate how much you paid over the course of a full year. Then budget for them. Each month the amount will be different. But then that’s the point.

FIGURE B.2 Personal cash flow template.

What You Should Know About Credit Cards

We have mentioned credit cards several times, always in a negative light. Actually, they are a wonderful invention. But far too many people get sideways with their credit obligations because they use credit to buy things they otherwise cannot afford. They also tend to think in terms of the incremental monthly amount a purchase will require and not its total cost. When you otherwise can’t afford something, it should be a warning sign not to purchase it at all.

Think of it this way. Which would you buy if two perfectly identical items, A and B, were side by side and A had a price tag of $2,000 and B was listed at $3,863? Item A is the obvious choice. Yet when you use a credit card with an 18 percent interest rate and make minimum payments over the life of the loan, you end up paying a full 93 percent more than had you paid cash. The use of credit cards has its place, but their convenience makes it easy to use them without thinking. And when the unexpected emergency happens, you may find that you have very little financial flexibility.

Actually, the A and B example above is somewhat unrealistic because a repayment plan that pays the minimum each month would take over nineteen years to fulfill. None of us would realistically take that long. But we routinely accept thirty-six-month repayment periods. That still means a 30 percent cost premium for using a credit card. You would still buy the $2,000 model over the one costing $2,600.

Another way of looking at the situation is that a credit card is an expensive way to buy things. The less money you have, the more expensive it tends to get because now you’re paying off the interest as well as the principle. For that reason, you should avoid using credit cards as a means of purchasing things you cannot otherwise afford. Once you are overextended (and that is easy to do), you limit your ability to purchase other items that are essential. Unless you enjoy washing dishes by hand, or using the laundromat for your clothes, you need to stay out of this trap.

That’s not to mention your credit rating. Another difficulty with credit cards is that how you handle them directly feeds your FICO score, a term derived from a company founded by Bill Fair and Earl Isaac in 1956, known as the Fair Isaac Company (FICO). They started selling their assessments of the credit worthiness of individual consumers to the major consumer reporting agencies—Equifax, Experian, Trans Union.

Your FICO score is a weighted assessment of the risk lenders take when they lend you money. The higher the risk, the more it will cost you to borrow. The score is based on the following factors, weighted as indicated:

Punctuality (35%). Whether you pay on time and in agreement with the terms of your contract.

Ratio of debt being used to total credit available (30%). If you are maxed out on your credit cards or anywhere near, it lowers your score.

Length of payment history (15%). Do they have enough credit history on you to pick up on a reliable pattern?

Ratio of installment to revolving debt (10%). Revolving debt is a line of credit made available any time you want to use it (e.g., a credit card); installment debt is where you take out a specific loan amount with a specified term for repayment (mortgages, auto loans). Lenders like to see that you have both, a balanced credit profile.

Credit currently applied for (10%). Mainly the number of credit cards you have applied for; too many lowers your credit score.

FICO scores range from 300 (very bad) to 850 (we doubt anyone has ever seen one that high). Generally, a score of 750 or better will get you the best rates, and anything over 700 is considered very good. You can get by with a score that ranges from 620 to 679, but you will likely be denied credit with a score of 619 or lower.

Go on the Internet to get a free copy of your credit report from each of the credit agencies. Or according to the Federal Trade Commission website you can order your annual free credit report online at annualcreditreport.com, by calling 1-877-322-8228, or by completing the Annual Credit Report Request Form and mailing it to Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281. However, beware of other websites advertising free credit reports that may be fraudulent or turn out not to actually be free.

There will also be instructions on how to fix any errors in the reports and generally how to improve your score. Most debt-counseling services advise you to get your report from all three consumer credit agencies, or at least from two of them, because they often contain different information, some of which may need correction.

Credit-card use has become so ubiquitous in our culture that we have become too casual about how we use them. Consider these suggestions for cutting your dependence on credit cards:

Use credit cards only when carrying cash is inconvenient.

Use your bank debit card instead. That card is tied directly to your checking account, which means you are paying in cash.

Do not extend your monthly cash flow with the use of credit cards.

Pay your credit-card bill in full every month. If you cannot, think about whether you can afford what you have purchased.

There is a good chance you will not be able to pay off your credit-card debt all at once. Yet you can work toward that if you allot a certain sum beyond what you spent in the previous month. If you do, you take another step in the direction of sound financial planning.

When do you teach your kids about the use of credit cards? Many websites help parents teach their children to become financially literate. Enter “teaching the kids about credit” in your browser window, and you will see a whole list of sources pop up. Almost all these services are free and include lesson plans and more general “how-to” instructions about financial literacy for teens. Just make sure you examine the content of the sites before using the material, as some of the information is dated.

CONSIDER PRBC (PAY RENT, BUILD CREDIT)

Millions of Americans are perfectly credit-worthy but without the financial track record sufficient for more standard consideration. That is, their transactions have not been captured and reported to the standard credit rating agencies. They often deal in cash, pay their rent on time, and otherwise are solid credit risks. A new reporting agency (PRBC) was founded in 2002 to capture this population. Individuals can self-enroll to capture their on-time payment patterns and build a solid credit-worthy reputation.

Rainy-Day Funds

Most people have no difficulty understanding how important rainy-day funds can be when a true emergency strikes. But when peril is off in the gauzy future, they have more trouble with this than any other aspect of personal financial planning. If this is true of you, you can take some solace because you are not alone. At one time, forty-seven of fifty state governments had rainy-day funds. The problem is that politicians are attracted to uncommitted piles of budgetary dollars as much as moths are attracted to outdoor lights. The minute the fund is established, the argument starts as to when, where, and how to grab a piece of it. Your own situation won’t be any easier. You will likely have a continual debate with yourself and/or your spouse about the funds and how to use them. That’s okay. At least you have the money to argue about.

To start, you should understand that rainy-day funds come out of excess revenue. You need to create excess revenue in order to do longer-range financial planning. That is why you took account of events on your immediate horizon; took control of your cash flow; and paid down your credit cards. You are now ready to take a giant step toward financial survival during bouts of unemployment.

The amount of your rainy-day fund should be anywhere from three to six months of net income. Six months is a pretty hefty amount because one of the first things you should do in the event of an emergency (job loss, for example) is to review your variable expenses and cut them back as far as you can. You also have some built-in flexibility by putting off some expenditures that are on your immediate horizon or keeping your fixed expenses under control. Six months’ worth of a rainy-day fund could end up funding as much as a year and a half’s worth of the funds needed for financial survival. The length of time depends on how seriously you take your personal financial planning.

Do not expect to establish the fund all at once. Work toward your target amount in monthly increments by incorporating savings into your fixed expenses as part of cash flow. You also should make sure these funds are segregated into their own account, used only for a true rainy day. Mixing these monies in with other funds in the same account makes it too easy to access them for purposes for which they were not intended. On the other hand, rainy-day funds should be readily accessible (e.g., in a money market account and not in certificates of deposit, or CDs). You probably will not get much of a return, but that’s okay. Remember, you are trying to save rather than make money with this fund. The most important thing is for you to get started.

The Size of Your Mortgage

If you follow the simple steps presented here, before long you will start to think in time frames longer than two to three years. Usually longer-range planning starts with buying a home for the first time, refinancing an existing home, or buying another one. You need to know more about mortgages than will be discussed here. The key fact to understand is that the mortgage company’s objective, with a qualified buyer, is to have you take as large a mortgage as you can. It does this by telling you “how much you qualify for,” hoping you will use all of it to buy as much house as you can. When houses were rapidly appreciating in value, this wasn’t such a bad idea. Now, borrowers need to make sure they do not confuse how much the mortgage company is willing to lend with how much mortgage you can really afford.

You may qualify for an amount that makes you “house poor”—able to service your house debt obligations but little else—or open yourself up to too much exposure in the event of a job loss. To avoid this problem, you can find on the Internet a number of liability calculators that are set up to tell you how much of a mortgage you can afford. On these sites you will learn about the front-end ratio (the percentage of your yearly gross income you can reasonably put toward your principal, interest, taxes, and insurance) and the back-end ratio (the percentage of income needed to cover all your debts). Though there are some differences, the same rules generally apply to both renters and home buyers.

If you have taken the short-term financial planning steps suggested here, this process of calculation will come easily. Mortgages are issued in various shapes, sizes, and monthly payments. To determine how much you can afford, get advice from someone other than real estate and/or mortgage professionals. Their interests in selling you a house and a mortgage do not necessarily align with your interest in sound financial management.

Emergency Planning

You are now ready to answer the question of what you should do if you lose your job. If your short-term financial plan is in place and fully funded, you can conduct your job search with confidence. You likely have enough financial resources and flexibility to transition to your next job comfortably. But you still need to go into emergency-planning mode. More is involved in a layoff than your financial footing. Here is a list of factors you should take into account if you lose your job.

GETTING A GRIP ON YOUR EMOTIONS

People are understandably suspicious when outplacement firms advise them not to take termination personally. After all, outplacement fees are usually paid by the company doing the terminating. When outplacement firms simultaneously advise individuals and the companies, the built-in conflict of interest invariably is resolved in favor of who pays the bill.

You have to face the facts. The laws governing employee/employer relations dramatically favor the employer. In contrast to the industrialized economies of Japan, Germany, France, England, and other countries in Europe, workforce redeployment is not punished—a welcome state if you are a business owner because you can take on and shed workers and their related expenses as desired. Despite some restrictions, the deck is stacked in favor of the employer. In this environment, wrongful-termination lawsuits are iffy propositions that can easily absorb the emotional energy you otherwise need to conduct an effective job search. Most lawsuits of this nature end up being lost in court. A disappointing number of people win awards just large enough to cover their legal fees.

You need to focus on landing a next assignment, and understand that being told you are no longer needed is never a pleasant experience. Experts in the field generally agree that the emotions following a termination develop in five stages—denial, anger, bargaining, depression, and eventually acceptance. You should understand that these emotions are the natural outcome of being terminated. Accepting that employers are often unfair allows you to move on with the rest of your life much sooner.

You should at all times avoid doing and saying precipitous things. Burning bridges is seldom a good idea. Circumstances can change and opportunities for independent work with your same firm may open up down the road. For example, that happened to Bruce, who felt his company should have laid off a lot of other people before it fired him. At first he thought that someone put his name on the list by mistake (denial). He was highly recruited out of college and his performance ratings were always outstanding. Over the next few weeks, a flood of emotions filled his head. Once he was able to impose some structure on what he felt, it became easier to get to acceptance and pour his energy into transition.

The amount of time people take to accept a termination varies. Initially, the objective should be to get a grip on your emotions so you are able to attend to other time-sensitive matters, like focusing on the conditions of your termination.

HOW WERE YOU TERMINATED?

Listen to the conditions of your termination carefully and, if at all possible, get them in writing. Organizations that do not notify you in writing are poorly run, trying to hide something, or both. You should understand the conditions of any severance you have coming, whether it is to be doled out at regular intervals or paid in a lump sum; how long your company-paid benefits will be in force; the status of company life insurance programs, 401(k), and health-care accounts; access to personal records you have kept at your workplace; and what you can expect in the way of outplacement assistance.

You should also request a copy of the company’s termination policy. Over the years these have been slimed to entice you to sign a release of liability from the company in exchange for “extra” termination benefits, which most states require for the release to be legally binding. But don’t sign or agree to anything before you have had a chance to think for a few days about what just happened, what you may choose to do about it, and what outside advice you may want. For example, retirement accounts may need to be “rolled over” to avoid paying taxes prematurely or incurring early withdrawal penalties. Most reputable financial services firms provide such advice free of charge—not because they are nice guys but because they are eager to get their hands on the transferred funds.

Also, if the clock is ticking on your company-paid benefit program, now may be a good time to schedule dental and doctor’s appointments for the entire family. If you have a family lawyer or can access one for a reasonable fee, you may want counsel to review the termination letter to uncover any additional items worth bargaining over. Vacation time, delayed timing on the termination, additional severance, agreed-upon letters of recommendation, and future consideration for reemployment or consulting opportunities are a few of the possibilities you may be able to negotiate or may have been negated in the small print.

TELL FAMILY AND FRIENDS

Telling others of your plight is still difficult to do, but there are some compelling reasons you should push forward. Immediate family members can be great allies who provide emotional support and help in implementing the budget restrictions that may now be necessary. And they may be able to provide some financial support, as well. There is nothing to be embarrassed about. White-collar workers across the board understand job loss and are more accepting than ever. They probably know of others who have gone through job loss, including themselves.

Telling your family and friends is good practice for when you have to talk about your job experiences during the job search. As much as you can, keep emotions out of the account. Avoid talking about what happened in terms of “you against them.” At first that will be hard to do, but you will get better at it as you move toward acceptance. You can be sure that if any negativity creeps into your networking or interviewing, it will hurt your future job prospects.

FILE FOR UNEMPLOYMENT BENEFITS

As a practical matter, file for unemployment benefits right away. Processing your application can take as much as four weeks before benefits begin to flow. Also, be aware that any severance will affect your eligibility and may delay when you are eligible to receive benefits.

By filing now, you become familiar with the unemployment rules and regulations and any special programs/services that are available. For example, some states have free Internet access and workplace seminars that may be helpful.

REVISIT YOUR “IMMEDIATE HORIZON” LIST

If you don’t have one, put together a list of goals and upcoming needs (see Figure B.2). Anticipated spending should be among the first items you take into consideration. Extra expenditures represent money you would spend that is not currently factored into your monthly cash flow. During the denial stage you may want to pretend nothing has really happened.

“I’m good at what I do and know it. They will be surprised how easily I find another job.” This is a particularly dangerous period because you might talk yourself into moving ahead with an expensive purchase just to prove that losing this job is “no big deal.” More times than not, that is a serious mistake. Now is a good time to rein in discretionary spending and take care not to take on more credit risk.

Attending a class is the one item on the list that you may want to go ahead with. It could become a part of your job-search strategy to upgrade your skills. In other words, all items on the list should be reviewed, not necessarily eliminated altogether.

CUT YOUR SPENDING

Here is where the rubber meets the road. Your ability to survive long term depends on how much you can cut spending. If you do not have unreasonable levels of debt but have a well-established rainy-day fund and are generally in command of your cash flow, survival is a lot easier. You still have to cut spending, though. Revisit the cash flow exercise and, with the help of your family, look for opportunities to cut.

If you have revolving and installment debt, you may want to consider alerting your creditors about the job situation and negotiate lower payments. The better your credit history, the better the chances that you can negotiate a pretty good deal—or at least a good enough deal to stretch your survival time out long enough to find another job.

Above all, remember that this exercise is not about maintaining your current standard of living. The objective is to cut it down. For instance, when one couple went from a two- to a single-income family, the parents delivered a brand-new lawn mower to their house and announced, “This is your new lawn service contract. Cancel the old one.”

Our standard of living usually consists of expensive discretionary items we can do without—daily visits to Starbucks, monthly haircuts, air-conditioned houses, prepared foods from the grocery store, eating out regularly, and a lot more when you really put your mind to all the time-saving aspects of a busy life. For the time being, you’re not nearly as busy, are you?

Launch a Job Search

No one really knows how this worldwide restructuring of the workforce is going to play out. You can be sure, however, that the competition for jobs of all kinds, especially white-collar jobs, will continue to rise. So you should prepare for an even more competitive workplace. You have started to do that by reading Cracking the New Job Market. Others who have done so have found work and continued along a career path that makes them happy, whether they changed careers or stayed the course. In all cases they learned that getting a job was never so much about them as about what others wanted from them. Creating value became the basis for effective career management.

You have all the tools right in your hand. Now it’s your turn!

NOTES

1. Deloitte KnowledgeCo LLC and Harrison Group, “The 2010 American Pantry Study,” www.deloitte.com/us/americanpantrystudy.

2. Ken Little, Personal Finance Desk Reference (New York: Alpha Books, 2007), p. 2.