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How to Ask Great Questions

Posted By damien on March 9th, 2010

Asking Questions

I’m taking a short break from financial posts and exploring other topics.  This post will help you ask better questions in teaching, business and personal settings.

Everyone asks questions, and for many different reasons.

An effective teacher uses questions to see if his student understands, accepts, and applies what is being taught.  A great salesperson asks questions to see if her customer is willing to buy and to determine their objections.  An effective “networker” asks questions to develop business relationships.

Through my experiences, I have come across three different types of questions that we use.  Each category is useful for different reasons.  These types of questions, from least to most effective, are as follows:

  1. Factual questions
  2. Reasoning questions
  3. Emotional questions

Let’s look at each category and see how effective they are.  We’ll apply these questions to teaching situations, but they can easily be modified to work for salespersons and networkers.

Factual Questions

Example: “In what year was the Declaration of Independence signed?”

These questions are used primarily to see if the student is paying attention and understands the lesson material. Factual questions do not evoke much thinking or feeling on the part of the student, but require a mere recitation of what the teacher has already stated. Factual questions are not open-ended, the answers are usually objective, and many times there is only one correct response.

Reasoning Questions

Example: “Why was it necessary for the States to declare independence from England?”

Reasoning questions are the next level up in quality. These questions require more critical thinking on the part of the student than do factual questions. These are used by the teacher to see how well the student understands what is being taught, and whether or not the student accepts it. Answers to these questions are more subjective, they include more of the student’s opinion than do answers to factual questions.

A student, in answering the example question, could follow a couple different paths of reasoning. Perhaps the student does not believe the US should have broken off from England. If so, then the student would answer that it not necessary.

On the other hand, if the student does believe in US independence then she would respond with various reasons as to why.

Reasoning questions are a great way to see if the listener understands and agrees with what you are teaching.

Emotional Questions

Example: “How is your life different because of the American Revolution?”

This is the best type of question. Emotional questions cause the student to tie the material being taught to his or her own life. When learning, students love to ask, “What does this have to do with real life?” When a teacher uses an emotional question, the students discover the real-life application for themselves! To answer an emotional question, the student must link the information being learned to personal experience.

Emotional questions start with a premise (sometimes called “begging the question”) and cause the student to work from that premise to apply the material being learned. The premise in the example question is that the American Revolution had some impact on the life of the student.

If the example question were made instead into a reasoning question, it would go something like this: “Has the American Revolution had any impact on your life?” The difference between the result of a reasoning question versus an emotional question is evident in these two preceding examples.

Better Questions = Better Answers

Every teacher’s dream is to have students who understand, accept, and apply what is being taught.

By using factual questions, the teacher learns if the student is paying attention and understands the material. Answers to reasoning questions show a deeper understanding and acceptance of the information.

The best questions of all, emotional questions, help the student make personal applications of the concepts being taught. By using these three types of questions, teachers will become more effective in instructing and inspiring their students.

So…how do you use questions?

Posted in Business, Interpersonal Skills, Selp Improvement
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How to Snowball Debt ‘Till It’s Gone

Posted By damien on August 31st, 2009

snowballNow, just to set things straight at the outset, we’re talking about a debt snowball here, not the kind made by Hostess.  Many personal finance gurus have variations of the debt snowball; I prefer Dave Ramsey’s as written in The Total Money Makeover.  In the last post, I discussed how debt is not a tool to become wealthy, an assertion backed up by lots of empirical evidence gathered by Thomas Stanley in The Millionaire Next Door.

Problem is, the average American is in debt, and not just a little bit!

So, let’s work out a plan to get you out of debt.  Before we can talk about where to put your money to become wealthy, we have to free that money up from creditors.  Once you are out of debt, then we can talk about 401ks, Roth IRAs and real estate investing.  The Debt Snowball is at once simple in definition and difficult in execution (will power required).  It is not a get-rich-quick scheme.  It will not get you out of debt overnight.  It will, most likely, require some changes to your lifestyle.  It is difficult, but it works.

Brain versus Heart

There are two approaches to the debt snowball: the math-based and the emotion-based.  For the math based approach, list all of your debts in order of highest interest rate to lowest.  Pay the minimum on all debts except for the one with the highest interest.  Put all the money you possibly can towards this debt (highest interest).  Once you have paid that one off, roll your payments into the bill with the next highest interest rate.  Keep doing this until all your debts are paid off!

Do you see where the term “debt snowball” comes from? You start with a small snowball: the payments toward your first bill.  Then, once it’s paid off, you roll that payment into the next, then the next, and your snowball (payment) grows and grows!

Most of Us Are Humans, Not Robots

The other approach, what I call the emotion-based one, has you list your debts in order of smallest amount owed to largest.  You then start the snowball by focusing on the smallest amount and working up to finish with the largest.

The math-based approach, in theory, will get your debts paid off the quickest.  Notice that I said in theory.  Dave advocates an emotion-based approach to the debt snowball, not because the math adds up better, but because it takes advantage of the non-rational human heart.  Here’s what he says:

The reason we list smallest to largest is to have some quick wins…Face it, if you go on a diet and lose weight in the first week, you will stay on that diet.  If you go on a diet and gain weight or go six weeks without any visible progress, you will quit.  When training salespeople, I try to get them a sale or two quickly because that fires them up.  When you start the Debt Snowball and in the first few days pay off a couple of little debts, trust me, it lights your fire.  I don’t care if you have a master’s degree in psychology; you need quick wins to get fired up.  And getting fired up is super-important.

I think Dave makes a pretty strong point here.  A few easy wins boosts a person’s confidence and gives them the drive to keep going when it gets tough.  This is why I recommend the emotion-based debt snowball.  List your debts from smallest to largest, pay the minimum on all except the smallest, and conquer your debt!  Then we can get into the exciting stuff: wealth building.

Unless, of course, if you’re a robot.

Posted in Building Wealth, Dumping Debt, Selp Improvement
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Are You Cheap or Frugal? Yes, There’s A Difference

Posted By damien on August 24th, 2009

frugalOne more bite-size idea from Ramit Sethi, in one of my top personal finance books, I Will Teach You To Be Rich:

Think of the word frugal.  What comes to mind?

For me, I think of a scrooge, penny-pincher who hates to spend money.  A person who is a real pain to deal with when it comes to financial transactions, because he/she wants the lowest price and will do anything, will negotiate forever, until they get it.  Put simply, the word frugal does not have positive connotations for me.

Or, at least it didn’t, until uncle Ramit exposed my benighted ignorance and showed me the enlightened path.  He taught me that what I was defining as frugal, was actually cheap. The following is an excerpt from a chart in his book:

CHEAP PEOPLE VS. FRUGAL PEOPLE

CheapFrugal
Cheap people care about the cost of something.Frugal people care about the value of something.
Cheap people try to get the lowest price on everything.Frugal people try to get the lowest price on most things, but are willing to spend on items they really care about.
Cheap people make you uncomfortable because of the way they treat others.Frugal people make you feel uncomfortable because you realize you could be doing better with your money.
Cheap people are unreasonable and cannot understand why they can’t get something for free. Sometimes this is an act but sometimes it’s not.Frugal people will try as hard as cheap people to get a deal, but they understand that it’s a dance, and in the end, they know they don’t intrinsically deserve a special deal.

See the difference?  Cheap people are lame.  Frugal people are wise.

Frugality isn’t about cutting your spending on everything.  That approach wouldn’t last two days.  Frugality, quite simply, is choosing the things you love enough to spend extravagantly on—and then cutting costs mercilessly on the things you don’t love.

Amen, my Indian friend.  Thanks for setting me straight.

Posted in Building Wealth, Selp Improvement
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Personal Finance 101: You Need to Read These 3 Books

Posted By damien on August 13th, 2009

readingWith the summer drawing to a close, regretfully I will have to read more textbooks (senior year of college!) and fewer personal finance ones. In order to remember the ones I read that were worth the time, I compiled this list.

Personal finance boils down to a few tried-and-true principles, so many say the same things, jut in different ways. If you read these 3, you’ll get the best of the best, and avoid all the fluff and copycats.

The Total Money Makeover

The principles in this book should be the foundation for everyone’s personal finance plan. The teachings in this book form the base for my money philosophy. Dave Ramsey is the expert on helping people get out of debt and create an emergency fund.

Read it first and follow Dave’s baby steps. He will show you why what you believe about money has been keeping you from achieving your potential. This book will change your relationship with money and get your money working for you instead of the other way around.

After you have gotten out of debt and established 3-6 months worth of savings, move on to the next book.

I Will Teach You To Be Rich

Ramit Sethi is the freshest voice on personal finance. Whereas Dave Ramsey has the principles of personal finance, Ramit has the techniques for the 21st century. His teachings on automating your finances have saved me hours per week in handling bills and investing.

His investment strategy, getting the best results with the least amount of effort, is the best investment plan for the everyday person that I have ever read. He got me off my butt, opening my Roth IRA and setting up automatic monthly deposits when countless other books couldn’t.

The Millionaire Next Door

Just what does the average millionaire look like? Dress like? Think like? This book will dispel all the myths we are fed by the media about the lifestyles of the rich. Once you understand how the average millionaire spends and saves his/her money, you can begin to implement their philosophies yourself and speed up the time it takes you to join them.

Where The Total Money Makeover changes the way you think about debt, this book will change the way you think about wealth. Read the previous two books first, as they will give you the specific tactics to form and implement your personal finance strategy. Then read this one to understand the psychology of becoming wealthy.

Get To It!

These three books will give you everything you need to get out of debt, become wealthy and improve your relationship with money. This all the substance you need for a lifetime of financial security. And, should you choose to read anything after, it will just be icing on the cake!

Posted in Building Wealth, Selp Improvement
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Shorts: Strong Weaknesses And Tapping Your Creativity

Posted By damien on August 6th, 2009

sleepingHere are a few bite size ideas from No More Mondays.  They aren’t long enough to deserve their own posts, but are worth mentioning.  The first is about the importance to focus on your strengths, not your weaknesses.  The second is a case study of how a very creative person would tap into his creativity:

Strong Weaknesses

In the sixth grade, a teacher told my friend Phil that the “secret to life is to focus on your weaknesses.”  So for the next thirty years he worked on those areas where he was weakest.  He struggled with accounting, with organization, and with ordering and inventory control.  He ultimately developed some pretty strong…weaknesses.  Then he discovered the power of focusing on your strengths.  He surrounded himself with people who were more competent in all the areas where he was weak.  He allowed them to do what they did well while he did the same.

Now, in my opinion, this is business advice from Dan, not advice for your personal life.  In our personal lives we should dedicate significant amounts of time to overcoming our weaknesses, instead of delegating them.  Say, for example, you are not good at communicating your feelings to your significant other.  If you followed Dan’s business approach, you may find someone else to communicate to your significant other for you.  This will not improve the relationship; partners must communicate their feelings directly to each other.

Business is about finding the fastest and most efficient way to deliver a product or service; thus focusing on strengths and delegating.  Life, on the other hand, is about learning and improving.

Tapping Your Creativity

Thomas Edison had an intriguing way of tapping into the mixture of thoughts and dreams we all have in those moments just before we fall asleep–a highly creative state of mind.  Daniel Goleman, Paul Kaufman, and Michael Ray, the authors of The Creative Spirit, explain his method: “He would doze off in a chair with his arms and hands draped over the arm rests.  In each hand he held a ball bearing.  Below each hand on the floor were two pie plates.  When he drifted into the state between waking and sleeping, his hands would naturally relax and the ball bearings would drop on the plates.  Awakened by the noise, Edison would immediately make notes on any ideas that had come to him.”

Isn’t it strange how the time between waking and sleeping does give us so many creative ideas?  I  keep a pen and notepad next to my bed, just in case I get a flash of inspiration.  At night, before falling asleep, I usually have lots of ideas; I won’t claim that all of them are creative, but some have been winners.  I don’t use Edison’s plate method since currently only own four plates (don’t know why we’ve never bought more), so can’t afford to lose any.

The take home lessons from today: in your business endeavors, focus on your strengths and delegate your weaknesses. Also, find when you are most creative, nurture those moments, and make sure you write down your ideas.

Posted in Business, Selp Improvement
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Risk Defined: Employees Versus Entrepreneurs

Posted By damien on August 3rd, 2009

office politicsJust finished Dan Miller’s No More Mondays, his follow-up to 48 Days to the Work You Love, which I wrote about here.  No More Mondays is similar to his previous book, in that his goal is to help you find the work you love, but this guide focuses more on starting your own business.  I love how Dan points out the opposite ways that employees and entrepreneurs view risk:

I frequently hear people say they are afraid to apply for a new job, try a new sport, buy a new car, or launch a new business because of the risk involved.  When people are considering a new career or change of position, they often ask themselves, “Why leave the predictable for the unpredictable?  Why take the risk?”  And yet there is a core issue regarding risk that must be clarified…if you find yourself in a negative work environment, have checked out your options, and are planning to move to a higher organization with a higher income, how can that be called risk?

This is how Dan summarizes an employee’s view of risk: the fear of the unknown, fear of leaving what they are used to, even if leaving means going to a better life.  Now see him describe an entrepreneur’s view of risk, how it is the polar opposite of an employee’s:

In my many years of life coaching high-achieving people, I have observed that they view risk differently from those who fear it.  They think it’s risky to be trapped in one company; they view security as having the freedom to do what they love on their own terms–the exact opposite of the average person’s perception.

They view security as having freedom to do what they want, instead of freedom from uncertainty.  They see staying at one company as imprisonment.  In case you couldn’t guess, Dan Miller sides with the second group in his views of security and risk:

In today’s traditional workplace, security is an illusion.  When you are working for a company, your fate is in the hands of one person–your boss (or even worse, the shareholders and executives who see you as fixed overhead, not a person).  A decision by one person, who might not even know your name, can put you out on the street.  But in your own business, if you are selling hot dogs on the street corner, every one of your customers would have to fire you before you’re out of business.

I know what you’re thinking, “But I don’t want to be an entrepreneur!”  That’s fine, you don’t have to change your employment status, just change your mindset.  Don’t think of your financial and vactional situation as being at the mercy of your employer.  Don’t live in fear of the unknown, fear that your life will fall apart if you are laid off.  Remember that your job security hinges on your ability to produce and get results.

Posted in Business, Selp Improvement
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