Obama, Clinton, McCain. What do these three individuals have in common? They are all unsuitable and unqualified to ascend to the highest public sector executive office in the United States. The consequence is that none of these individuals have the proven track record as successful executives to provide assurance that under their leadership, the US will again establish and maintain policies in foreign and domestic affairs that will address deficits and debts in American economic policies. The long-term consequence is the continued devaluation of the US Dollar, the decline of the USA as an economic power, and the overall decline in our personal opportunties to build wealth.
So who would be more suitably qualified for this executive position?
1. Executive experience at the national level includes the Vice-President, Cabinet Secretaries, the Chief of Staff, and any of the Chairmen, Directors, and Commissioners of significant agencies.
2. Executive experience at the state level includes the Governors, Lieutenant Governor, Secretaries and Commissioners.
3. Municipal Leaders of major cities or metropolis regions, including the Mayor or City Manager.
4. Military Senior Officers with a significant scope of authority including tactical, administrative, and structural authority. Military law and administration is distinct and often self-contained, making a military leader more powerful than his civilian counterparts.
Certainly individuals with these credentials provide superior evidence of leadership and accountability to someone in a Legislative role - who simply crafted and debated laws and resolutions. Legislators have an important role in government, but they are not the singular individual. Given that the current process has disregarded candidates with proven leadership track records in favor of articulate legislative debaters, with compelling personal histories, I believe that it is severely flawed and needs replacement in order to restore the US to its prior greatness as an economic power.
My recommendations are to disband this current destructive and divisive Presidential selection method and decouple the key items so that, using technology and direct selection, Americans can:
1. Select a president from a pre-approved pool of qualified candidates. These individuals would have specific Executive experience within the public sector. Vote for the best leader who can build a strong team and lead a successful transformation.
2. Set the policies with a series of referendums and mandates. Rather than accept an entire platform, take a "cafeteria" approach, selecting the best combination to have a practical and pragmatic consensus.
3. Determine the priorities for public policy, assigning a weighted criteria to make decisions and choices. Where policies or programs conflict, use the prioritization criteria to determine what should be done first.
This way, the President with the consensus choice can deploy the mandate approved by the majority to the satisfaction of the population, without being driven to pursue a hidden extreme agenda. The alternative is to continue the status quo which rewards populist demagogues, well-financed insiders, and vague communicators who appear to be all things to all people.
A strong and effective president will lead to a strong and effective economy.
Sunday, March 30, 2008
Build Joy and Esteem In Others - For Gratuities
Why do we tip at restaurants? Why do we reward children who sing Christmas carols? Why do we offer to pick up a round of drinks at the bar for companions? What is the common element for these and other apparently irrational decisions about our spending patterns. Think about it. A hard-hearted businessman who will stomp past a penniless panhandler will not hesitate to tell the server or barista to "keep the change" for doing something as simple as pouring coffee refills.
What it really comes down to is that certain people have learned to make a very good living by bringing joy to others, or by lifting their self esteem. Individual attention from an attractive well-groomed person (of the opposite gender), brings out better qualities and gives the impression (illusion?) that the recipient of that attention is equally attractive or in the same league.
I noticed this trend when I stayed at a luxury hotel on business in a foreign country. Back home, I am a humble cog in the big corporate wheel, but at this hotel, I was warmly greeted, pleasantly encouraged, and my requests were promptly fulfilled. Of course, I was more than happy to share my tip money and they were delighted to receive my payment.
OK. I don't suggest that everyone goes through life being obsequious or an insincere synchopant. However, there may be small steps that we can all take to improve our chances of briging joy to someone or making them feel better and in turn, receiving some unexpected benefit.
Start with grooming and appearance. A clean and polished look will calm others and remove their defenses. Maybe looking like one of the Lawrence Welk choir singers won't give you any game at the nightclub, but during the day it will go a long way to removing hesitations and prejudices.
Imagine yourself with a sudden bounty, no matter how small. You have extra tickets to an event, or surplus gourmet food. Who are you inclined to share it with? The grouchy colleague who always insults you? The cynical complainers who always sneak away for cigarette breaks? Not likely. You will be more inclined to share the gifts with someone who has extended kindness in the past, or who would be appreciative.
I confess that I got caught up in the habit of trying to impress my superiors. Knowing he was a wine drinker, I brought a very nice vintage for a compay function. When he received it, he waved his hand for me to put it with the 10 other bottles of similar red wine. Although it was expensive, it did not have the impact and was a waste.
So what is the angle? The trick is to be among the people who receive these gratuities, and who are included in the freebies. I recall being on a lucky streak at work where I received perks, benefits, and free tickets. I don't think my work was any better but my attitude and willingness to assist was very high. In contrast, as I got busier and deeper into my work, my cooperation declined and I became more selfish and defensive. The flow of freebies abruptly stopped - adding to my resentment and pushing me further into a vicious cycle.
If you aspire to be one of the "lucky ones" who get picked for dinners, freebies, perks, and SWAG (stuff we all get), be generous with those attributes which people need most, and which there is the shortest supply. Thank your team members for their efforts, make them feel welcomed and included, and add to their joy.
This is not just relevant for the workplace, but also for your home and community. Someone who is a handyman who aids and assists neighbors in need often finds themselves receiving unanticipated gifts. In one case, the "handyman" got a fully-functional $600 lawn mower from a neighbor who could not get it working and upgraded to a new one. The same could occur for materials, plants, or other personal items.
A proverbs states that a Rising Tide Lifts All Boats. What are you doing to rise the tide of those around you? Anything, no matter how small, will create a sincere sence of growth that will reflect positively back on you. Think about the next person you reward. Why are you rewarding them - and what can you do in turn to get an appropriate reward for your contributions.
What it really comes down to is that certain people have learned to make a very good living by bringing joy to others, or by lifting their self esteem. Individual attention from an attractive well-groomed person (of the opposite gender), brings out better qualities and gives the impression (illusion?) that the recipient of that attention is equally attractive or in the same league.
I noticed this trend when I stayed at a luxury hotel on business in a foreign country. Back home, I am a humble cog in the big corporate wheel, but at this hotel, I was warmly greeted, pleasantly encouraged, and my requests were promptly fulfilled. Of course, I was more than happy to share my tip money and they were delighted to receive my payment.
OK. I don't suggest that everyone goes through life being obsequious or an insincere synchopant. However, there may be small steps that we can all take to improve our chances of briging joy to someone or making them feel better and in turn, receiving some unexpected benefit.
Start with grooming and appearance. A clean and polished look will calm others and remove their defenses. Maybe looking like one of the Lawrence Welk choir singers won't give you any game at the nightclub, but during the day it will go a long way to removing hesitations and prejudices.
Imagine yourself with a sudden bounty, no matter how small. You have extra tickets to an event, or surplus gourmet food. Who are you inclined to share it with? The grouchy colleague who always insults you? The cynical complainers who always sneak away for cigarette breaks? Not likely. You will be more inclined to share the gifts with someone who has extended kindness in the past, or who would be appreciative.
I confess that I got caught up in the habit of trying to impress my superiors. Knowing he was a wine drinker, I brought a very nice vintage for a compay function. When he received it, he waved his hand for me to put it with the 10 other bottles of similar red wine. Although it was expensive, it did not have the impact and was a waste.
So what is the angle? The trick is to be among the people who receive these gratuities, and who are included in the freebies. I recall being on a lucky streak at work where I received perks, benefits, and free tickets. I don't think my work was any better but my attitude and willingness to assist was very high. In contrast, as I got busier and deeper into my work, my cooperation declined and I became more selfish and defensive. The flow of freebies abruptly stopped - adding to my resentment and pushing me further into a vicious cycle.
If you aspire to be one of the "lucky ones" who get picked for dinners, freebies, perks, and SWAG (stuff we all get), be generous with those attributes which people need most, and which there is the shortest supply. Thank your team members for their efforts, make them feel welcomed and included, and add to their joy.
This is not just relevant for the workplace, but also for your home and community. Someone who is a handyman who aids and assists neighbors in need often finds themselves receiving unanticipated gifts. In one case, the "handyman" got a fully-functional $600 lawn mower from a neighbor who could not get it working and upgraded to a new one. The same could occur for materials, plants, or other personal items.
A proverbs states that a Rising Tide Lifts All Boats. What are you doing to rise the tide of those around you? Anything, no matter how small, will create a sincere sence of growth that will reflect positively back on you. Think about the next person you reward. Why are you rewarding them - and what can you do in turn to get an appropriate reward for your contributions.
Get Paid To Read - Be A Book Reviewer
Anyone who has gone through the steps of being educated in their profession, trade, or vocation, will undoubtedly have a large and growing personal collection of books, journals, and materials for their reading pleasure. As a student, you are part of a captive market, forced to purchase these resources at top dollar.
I recall as a student thinking that I was an unwilling pawn in a get-rich-quick conspiracy for the authors who were flogging their wares like carpet salesmen in a conference room at the airport hotel. I now have a different perspective, the authors are relatively low on the food chain to get paid for books sold.
I am an advocate of using the library as much as possible, not only to read from the current selection but to acquire books and references at a substantial discount, often 2-5% from the original listed price. Still, there are limitations, particularly if you want to get initial insight on the leading thoughts and innovative approaches in your area of interest.
For this reason I propose a very proactive and potentially lucrative approach: review manuscripts for publishers. If you can demonstrate expertise in a relevant area, it would be very helpful to support editors and publishers. Reviewers are asked to read and comment on the technical accuracy and usability of the material, and recommend changes or modifications.
The more complex the subject, the greater the need for substantial editorial review - hence the opportunity is growing. As you review this material, you can incorporate it into your own knowledge base, and continue your professional growth courtesy of the good graces of your editor.
The only question is whether this is worth your time. A manuscript can generally return a few hundred dollars per assignment, depending on the publisher. This may be a pittance when compared to the hourly income a professional can demand. However, as a method of learning new concepts, upgrading skills, and entrenching professional competency; reimbursement is a bonus. For my personal situation, I am able to credit book reviews towards the renewal of my professional certifications.
Some publishers even add a bonus to reviewers; any books reviewed are provided upon publication. This adds to the growing collection and can make for an impressive library (or unimpressive basement clutter). But consider the alternative of purchasing at normal rates. A collection of 10 books/year averaging $50-60 apiece obtained over a span of five years can net a few thousand dollars - enough to justify attending a "conference" in a destination location.
But back to building wealth - knowledge is a fundamental foundation of wealth as it cannot be retracted or removed. Building knowledge increases opportunity and marketability, and adds to your chances of prosperity.
I recall as a student thinking that I was an unwilling pawn in a get-rich-quick conspiracy for the authors who were flogging their wares like carpet salesmen in a conference room at the airport hotel. I now have a different perspective, the authors are relatively low on the food chain to get paid for books sold.
I am an advocate of using the library as much as possible, not only to read from the current selection but to acquire books and references at a substantial discount, often 2-5% from the original listed price. Still, there are limitations, particularly if you want to get initial insight on the leading thoughts and innovative approaches in your area of interest.
For this reason I propose a very proactive and potentially lucrative approach: review manuscripts for publishers. If you can demonstrate expertise in a relevant area, it would be very helpful to support editors and publishers. Reviewers are asked to read and comment on the technical accuracy and usability of the material, and recommend changes or modifications.
The more complex the subject, the greater the need for substantial editorial review - hence the opportunity is growing. As you review this material, you can incorporate it into your own knowledge base, and continue your professional growth courtesy of the good graces of your editor.
The only question is whether this is worth your time. A manuscript can generally return a few hundred dollars per assignment, depending on the publisher. This may be a pittance when compared to the hourly income a professional can demand. However, as a method of learning new concepts, upgrading skills, and entrenching professional competency; reimbursement is a bonus. For my personal situation, I am able to credit book reviews towards the renewal of my professional certifications.
Some publishers even add a bonus to reviewers; any books reviewed are provided upon publication. This adds to the growing collection and can make for an impressive library (or unimpressive basement clutter). But consider the alternative of purchasing at normal rates. A collection of 10 books/year averaging $50-60 apiece obtained over a span of five years can net a few thousand dollars - enough to justify attending a "conference" in a destination location.
But back to building wealth - knowledge is a fundamental foundation of wealth as it cannot be retracted or removed. Building knowledge increases opportunity and marketability, and adds to your chances of prosperity.
Track your Personal "Burn Rate"
In following businesses, one of the criteria for financial health and viability is the "burn rate" relative to income, assets, or capital. If we are expected to manage our personal estates and finances in a businesslike manner, it only makes sense that we should track our spending over time, to identify trends and alarms.
The first step is to segment spending into different categories - as businesses do. Some folks are content with the "shoebox accounting system", but that will not reveal the numbers as readily or accurately as a more methodical approach. As this is not academic, I will use general terms which can be applied or modified for different households or enterprises.
1. Distinguish between planned and unplanned expenses. This is a measure of what spending is done in a premeditated and deliberate manner, as opposed to the spontaneous and impulsive decisions.
2. For planned expenses, separate fixed from variable charges. Fixed charges can include recurring payments for mortgages, debts and charges. This is the metric that many banks and lending agencies review in order to qualify the capacity of an individual to handle a loan. In contrast, variable charges can be seasonal to reflect irregular spikes. Some annual expenses (i.e. tuition costs, automotive license, etc.) can place additional strains on income and savings.
3. Unplanned expenses are made in response or reaction to an event, and can range from minor adjustments to major commitments. For tracking, the expenses can be further classified as predictable (i.e. flat tire requires a replacement at a fixed cost), or extraordinary (i.e. emergency flight to visit a sick parent in a different city).
4. The level of detail should be practical and suitable for decision making. It may be better to cluster expenses under $100 into a general category than to attempt to spend the time reconciling every latte or chocolate bar consumed. Categorizing by cost also indicates common behavior patterns. If each trip to the major big box retailer costs over $200, or a night out at the pub comes to a minimum $100 per visit, it might be a sign of some wasteful spending patterns.
5. Once the burn rate is tracked, it is helpful to review the expenses and determine what can be reduced or eliminated. In order to hit targets for savings and investments, certain existing expenses must be selected for reduction or removal.
6. Pay Yourself First! By introducing the savings plans as part of your burn with a higher priority, it has a higher visibility.
It is easier to control your spending than your income. The process of building wealth through thrift comes from shifting resources from excessive expense towards wealth-building opportunities. Don't burn your fortune down, build it up.
The first step is to segment spending into different categories - as businesses do. Some folks are content with the "shoebox accounting system", but that will not reveal the numbers as readily or accurately as a more methodical approach. As this is not academic, I will use general terms which can be applied or modified for different households or enterprises.
1. Distinguish between planned and unplanned expenses. This is a measure of what spending is done in a premeditated and deliberate manner, as opposed to the spontaneous and impulsive decisions.
2. For planned expenses, separate fixed from variable charges. Fixed charges can include recurring payments for mortgages, debts and charges. This is the metric that many banks and lending agencies review in order to qualify the capacity of an individual to handle a loan. In contrast, variable charges can be seasonal to reflect irregular spikes. Some annual expenses (i.e. tuition costs, automotive license, etc.) can place additional strains on income and savings.
3. Unplanned expenses are made in response or reaction to an event, and can range from minor adjustments to major commitments. For tracking, the expenses can be further classified as predictable (i.e. flat tire requires a replacement at a fixed cost), or extraordinary (i.e. emergency flight to visit a sick parent in a different city).
4. The level of detail should be practical and suitable for decision making. It may be better to cluster expenses under $100 into a general category than to attempt to spend the time reconciling every latte or chocolate bar consumed. Categorizing by cost also indicates common behavior patterns. If each trip to the major big box retailer costs over $200, or a night out at the pub comes to a minimum $100 per visit, it might be a sign of some wasteful spending patterns.
5. Once the burn rate is tracked, it is helpful to review the expenses and determine what can be reduced or eliminated. In order to hit targets for savings and investments, certain existing expenses must be selected for reduction or removal.
6. Pay Yourself First! By introducing the savings plans as part of your burn with a higher priority, it has a higher visibility.
It is easier to control your spending than your income. The process of building wealth through thrift comes from shifting resources from excessive expense towards wealth-building opportunities. Don't burn your fortune down, build it up.
Exploring Tax Cost Averaging to Save Money
There are a number of authors whom I have found to be very interesting and enlightening. One of these authors is Evelyn Jacks, a successful authority on Canadian Tax Savings. While I won't go into detail on the specifics of her recommendations, I will say that after reading her books (of which I currently possess several), I come away with a greater awareness of the opportunities that a clever and motivated individual can pursue to save money and build wealth.
One such idea is the concept of Tax Cost Averaging. Put simply, this is the process of moving away from a year by year perspective and taking a longer term view of tax planning. In order to get the benefit from this, a person has to look beyond the current year and project their income and lifestyle over the next five years.
Knowing incomes and choices (family events, home, car, travels, etc), and astute tax planner can then restructure the financial details surrounding these items. Tax savings can be obtained by anticipating the expenses over time, and deteriming a productive or suitable use.
Over a five to ten year period, there are different opportunities to reduce taxes through some techniques including:
- deducting home office expenses
- deducting qualified automobile expenses
- distributing income to other family members
- capitalizing on existing tax programs like RRSPs
- deferring or delaying tax payments for business transactions
Even if there is no material gain from applying a technique, a prerequisite of Tax Cost Averaging is to make a financial plan, and track the results according the plan. As as they teach us in Business 101, what gets measured gets managed. Record keeping is essential for this program, not only to find tax-saving opportunities, but also to defend and protect yourself in the event you are randomly selected for a tax audit.
Assuming that a Tax Cost Averaging program can save 8% (8 cents on the dollar), that savings can be seen as equivalent to a 13th month of payment. Instead of having too much month at the end of the money, there is an extra surplus to apply towards credit card debt, short-term expenses, or long-term wealth building initiatives.
One such idea is the concept of Tax Cost Averaging. Put simply, this is the process of moving away from a year by year perspective and taking a longer term view of tax planning. In order to get the benefit from this, a person has to look beyond the current year and project their income and lifestyle over the next five years.
Knowing incomes and choices (family events, home, car, travels, etc), and astute tax planner can then restructure the financial details surrounding these items. Tax savings can be obtained by anticipating the expenses over time, and deteriming a productive or suitable use.
Over a five to ten year period, there are different opportunities to reduce taxes through some techniques including:
- deducting home office expenses
- deducting qualified automobile expenses
- distributing income to other family members
- capitalizing on existing tax programs like RRSPs
- deferring or delaying tax payments for business transactions
Even if there is no material gain from applying a technique, a prerequisite of Tax Cost Averaging is to make a financial plan, and track the results according the plan. As as they teach us in Business 101, what gets measured gets managed. Record keeping is essential for this program, not only to find tax-saving opportunities, but also to defend and protect yourself in the event you are randomly selected for a tax audit.
Assuming that a Tax Cost Averaging program can save 8% (8 cents on the dollar), that savings can be seen as equivalent to a 13th month of payment. Instead of having too much month at the end of the money, there is an extra surplus to apply towards credit card debt, short-term expenses, or long-term wealth building initiatives.
Monday, March 24, 2008
Save Your Shoes - Save Your Money
Did you ever have the feeling that your money was literally walking out the door? Adios amigos! Welcome to the world of footwear. With the exception of rare cases for strange collectors (and I do mean Straaaaaaaange), nobody has ever been able to make money from used footwear. It is a sunk cost to begin with that only gets older, smellier, and closer to garbage until it is finally disposed.
I am not an expert, but I have some ideas that can stop this decline, contribute to the health and well-being of your feet, and in turn help to avoid some of the maladies associated with bad footwear which can really cost time and money.
A starting place is to review the ideas from some sample websites. I found two which are interesting to me.
http://www.shoeguide.org/; http://en.wikipedia.org/wiki/Shoe#Maintenance
Two very inexpensive practices can extend the duration of a shoe. Frequent polishing will help the fabric and improve durability and water resistance. For more expensive shoes, a well-polished appearance will definitely make a positive impression. In contrast, a dull appearance will diminish even the most intricate design.
A second practice is to enhance or replace the heel and sole. Since these are the portions which encounter wear and tear, the life of the shoe is often linked to the upkeep of either the fabric or the heel or sole. Extending the life of a pair of shoes by as little as three months can be the difference between replacing shoes semi-annually vs. quarterly. You wouldn't wear the same suit or outfit continuously for days, yet often the same demands are made of our shoes. It might be better to have a rotation, extending the life of shoes even further. That way, shoes can be purchased during cyclical sales, rather than on-demand at peak prices.
So how do comfortable and attractive shoes build Wealth? A reflexologist would present a compelling case that discomfort in the feet would be directly linked to other pains, injuries, disorders, or negative conditions in the rest of the body. http://www.reflexology.org/. Practically speaking, if you are not standing on your feet, then you are sitting on your behind, and you can't expect to stand while you are in discomfort.
Shoes are part of our culture. Before presenting a budget, a Canadian Finance Minister shows off their new pair of shoes. Symbolically, it represents a positive step forward in a direction. Replacing a person of high esteem and accomplishment is marked by the phrase, "Big shoes to fill".
This is an important subject - and if everyone is of the same mentality, then we all will live in a fabulous world where everyone has sharp and long-lasting footwear.
I am not an expert, but I have some ideas that can stop this decline, contribute to the health and well-being of your feet, and in turn help to avoid some of the maladies associated with bad footwear which can really cost time and money.
A starting place is to review the ideas from some sample websites. I found two which are interesting to me.
http://www.shoeguide.org/; http://en.wikipedia.org/wiki/Shoe#Maintenance
Two very inexpensive practices can extend the duration of a shoe. Frequent polishing will help the fabric and improve durability and water resistance. For more expensive shoes, a well-polished appearance will definitely make a positive impression. In contrast, a dull appearance will diminish even the most intricate design.
A second practice is to enhance or replace the heel and sole. Since these are the portions which encounter wear and tear, the life of the shoe is often linked to the upkeep of either the fabric or the heel or sole. Extending the life of a pair of shoes by as little as three months can be the difference between replacing shoes semi-annually vs. quarterly. You wouldn't wear the same suit or outfit continuously for days, yet often the same demands are made of our shoes. It might be better to have a rotation, extending the life of shoes even further. That way, shoes can be purchased during cyclical sales, rather than on-demand at peak prices.
So how do comfortable and attractive shoes build Wealth? A reflexologist would present a compelling case that discomfort in the feet would be directly linked to other pains, injuries, disorders, or negative conditions in the rest of the body. http://www.reflexology.org/. Practically speaking, if you are not standing on your feet, then you are sitting on your behind, and you can't expect to stand while you are in discomfort.
Shoes are part of our culture. Before presenting a budget, a Canadian Finance Minister shows off their new pair of shoes. Symbolically, it represents a positive step forward in a direction. Replacing a person of high esteem and accomplishment is marked by the phrase, "Big shoes to fill".
This is an important subject - and if everyone is of the same mentality, then we all will live in a fabulous world where everyone has sharp and long-lasting footwear.
Power of Time for Building Wealth from Thrift
One recurring theme among the Wealthy is their ability to harness the Power of Time and use it to their advantage. I recall a comparative presentation promoting the benefits of compound interest. An individual who built up their capital from ages 18-28 would have more than another indivdual who invested from 29-65. It is simplistic, but the lesson is that when time is allowed to compound the gains, that will enable an investment or endowment to grow substantially.
Looking at it another way, Thrift is the practice of making good decisions by avoiding bad ones. What characterizes a bad decision? A false sense of urgency. The "take it or leave it" mentality. There is a reason why pressure sales tactics create a sense that delaying the decision is the worst possible alternative.
Consider the discounts before and after Dec. 25. Prior to Christmas, we are expected to believe that we are getting a deal until we are induced to purchase. Imagine our surprise when a mere 24-48 hours later, the same merchandise is being offered at a substantially greater discount. It is insulting to have been played for suckers.
How do we consciously make decisions that consider time. One good tactic is to measure each decision like a business; assessing the impact on the month, quarter, year, and long-term. Consider the decision to get a major home expansion (i.e hot tub, backyard pool). This would have a detrimental impact on the month as it would be a non-recurring expense. It might be evened out in the quarter, but other decisions would have to be made to sacrifice. The effect on a year and long-term would be dependent on how this changes the lifestyle, when compared with the increase of value to the property.
In contrast, imagine the decision to pursue an educational credential that would draw from short-term finances, but could potentially increase long-term income opportunities. In this sense, the time is an ally, and supports the case for the investment.
The art of Thrift - yes it is an art - involves shifting away from consumption towards wealth-creating opportunities. One decision factor is the effect of that choice over time. As more time passes, the outcomes of Thrift will be realized with increased Wealth and net worth.
Looking at it another way, Thrift is the practice of making good decisions by avoiding bad ones. What characterizes a bad decision? A false sense of urgency. The "take it or leave it" mentality. There is a reason why pressure sales tactics create a sense that delaying the decision is the worst possible alternative.
Consider the discounts before and after Dec. 25. Prior to Christmas, we are expected to believe that we are getting a deal until we are induced to purchase. Imagine our surprise when a mere 24-48 hours later, the same merchandise is being offered at a substantially greater discount. It is insulting to have been played for suckers.
How do we consciously make decisions that consider time. One good tactic is to measure each decision like a business; assessing the impact on the month, quarter, year, and long-term. Consider the decision to get a major home expansion (i.e hot tub, backyard pool). This would have a detrimental impact on the month as it would be a non-recurring expense. It might be evened out in the quarter, but other decisions would have to be made to sacrifice. The effect on a year and long-term would be dependent on how this changes the lifestyle, when compared with the increase of value to the property.
In contrast, imagine the decision to pursue an educational credential that would draw from short-term finances, but could potentially increase long-term income opportunities. In this sense, the time is an ally, and supports the case for the investment.
The art of Thrift - yes it is an art - involves shifting away from consumption towards wealth-creating opportunities. One decision factor is the effect of that choice over time. As more time passes, the outcomes of Thrift will be realized with increased Wealth and net worth.
Don't Die With A Full Liquor Cabinet!
There is a quote from a Woody Allen movie that Comedy equals Tragedy plus Time. I don't know where this subject fits in, but I thought there might be some wisdom.
After my father passed away, there were household effects to be settled and distributed or sold. One area of interest was the liquor cabinet. As a social man with a hearty appetite and many friends from all walks of life, this was reflected in the diverse range of wines, liqueurs, and spirits available. Many of the bottles had been opened, and as my father was ill and on critical medication and palliative care, this collection was untouched for months, even years.
Imagine a collection with a "one of each" representation of different drinks: scotch, rye, rum, cognac, gin, vodka. Follow that with a rainbow coalition of liqueurs, shooters, aperatifs, and combination hybrids. This was topped with some "ethnic samples" that would probably help stock cars break NASCAR records. And by the standards of his friends and companions, this was a modest assortment.
Alcohol, be it beer, wine, spirits, or other forms, is very enjoyable in small portions at appropriate times, but potentially very destructive and a catalyst for other ailments. Having alcohol promotes excess consumption, which then leads to bad consequences. Having more than can be consumed within a few weeks or months will cause the drink to spoil, losing its value and distinctive taste.
Alcohol is not a staple. It should not be bought in bulk like paper towels, canned soup, or macaroni and cheese. Alcohol is a complement to a meal or lifestyle, and should be bought as needed. In fact, the absence of alcohol could provide for other alternatives which do not diminish the experience.
Alcohol is also not an asset unless you are spending more than $100 per bottle (which would then make it a collectable). Therefore, it should be treated as a consumable - like potato chips or chocolate. Buy as needed, and consume when appropriate.
One alternative is to get together with friends or afficionados and form a "drinking club" where the costs could be shared. This might sound blatant, so if you are part of a golf or hockey team or fraternal organization, you could do your elaborate drinking within the confines of that group - sharing expenses. Some fund-raisers include beer or scotch tasting nights which is a better alternative than having the full bar within your house.
Being Thrifty with alcohol does not mean selecting the cheapest item. In fact, it is cheaper to drink more expensively. Rather than getting a large keg of mass-produced beer which induces hangovers and chemical reactions, opt for the craft-brewed alternative that has fewer chemicals, more flavour, and better reception among friends and family. Rather than getting a box of cheap wine that brings on headaches and ulcers, opt for the smallest bottle of a high-end vintage.
If you think of surplus as waste, then a full liquor cabinet is really wasted and unwanted material which was left over. We don't know when our time will come when we can no longer enjoy alcohol, so we should always keep our stock lean and enjoyable so that it is good to the last drop.
After my father passed away, there were household effects to be settled and distributed or sold. One area of interest was the liquor cabinet. As a social man with a hearty appetite and many friends from all walks of life, this was reflected in the diverse range of wines, liqueurs, and spirits available. Many of the bottles had been opened, and as my father was ill and on critical medication and palliative care, this collection was untouched for months, even years.
Imagine a collection with a "one of each" representation of different drinks: scotch, rye, rum, cognac, gin, vodka. Follow that with a rainbow coalition of liqueurs, shooters, aperatifs, and combination hybrids. This was topped with some "ethnic samples" that would probably help stock cars break NASCAR records. And by the standards of his friends and companions, this was a modest assortment.
Alcohol, be it beer, wine, spirits, or other forms, is very enjoyable in small portions at appropriate times, but potentially very destructive and a catalyst for other ailments. Having alcohol promotes excess consumption, which then leads to bad consequences. Having more than can be consumed within a few weeks or months will cause the drink to spoil, losing its value and distinctive taste.
Alcohol is not a staple. It should not be bought in bulk like paper towels, canned soup, or macaroni and cheese. Alcohol is a complement to a meal or lifestyle, and should be bought as needed. In fact, the absence of alcohol could provide for other alternatives which do not diminish the experience.
Alcohol is also not an asset unless you are spending more than $100 per bottle (which would then make it a collectable). Therefore, it should be treated as a consumable - like potato chips or chocolate. Buy as needed, and consume when appropriate.
One alternative is to get together with friends or afficionados and form a "drinking club" where the costs could be shared. This might sound blatant, so if you are part of a golf or hockey team or fraternal organization, you could do your elaborate drinking within the confines of that group - sharing expenses. Some fund-raisers include beer or scotch tasting nights which is a better alternative than having the full bar within your house.
Being Thrifty with alcohol does not mean selecting the cheapest item. In fact, it is cheaper to drink more expensively. Rather than getting a large keg of mass-produced beer which induces hangovers and chemical reactions, opt for the craft-brewed alternative that has fewer chemicals, more flavour, and better reception among friends and family. Rather than getting a box of cheap wine that brings on headaches and ulcers, opt for the smallest bottle of a high-end vintage.
If you think of surplus as waste, then a full liquor cabinet is really wasted and unwanted material which was left over. We don't know when our time will come when we can no longer enjoy alcohol, so we should always keep our stock lean and enjoyable so that it is good to the last drop.
Wealth and Morality - Money Is Not Evil
Is money the root of all evil? Does money corrupt? Can the morality of every person be bought or acquired for a price?
These are all interesting questions, as they are based on the presumption that the increase of wealth necessitates a decline in morality. Almost as if we exist on a Cartesian plane with linear scales and balances.
I disagree with this assumption for several reasons. Morality is the practice of deliberately making virtuous choices. At the time of the choice, it make seem that morality holds us back and limits our ability to acquire and retain wealth, but over time, those that sustain their wealth across generations do so because of moral choices.
In fact, several virtues support Thrift and encourage the building of wealth. The cardinal virtues of Temperance, Fortitude, Prudence, and Justice describe the characteristics needed to succeed in life and business. Temperance is about managing against excess and waste - a penny saved is a penny earned. Fortitude refers to persistence and not quitting or admitting defeat. This tenacity is necessary to hold fast and remain during tough times in order to prosper when tides and trends are more fortunate. Prudence and Justice are about prioritizing and allocating everything according to their due priority.
The other element is Wealth, which in many ways is different form Prosperity or Good Fortune. Wealth implies responsibility and proprietorship, as opposed to simple being the beneficiary of unexpected riches. Wealth is something that requires moral leadership in order to correctly manage over time.
So why is Wealth seen as immoral? Resentment, perhaps. Maybe a guilt trip promoted to induce donations to organizations which pose as charities but are actually sophisticated marketing institutions who could teach Wall Street a thing or two about emotional manipulation. Maybe it is the call of defeat from those who have accepted their lot in life, and mistrust others who advocate a more enlightened approach.
When all else fails, life is about balaning "Doing the Right Thing" with "The Path of Least Resistance". Thrift is not easy, but it is moral, and the practice of Thrift will build Wealth in a way that allows you to look at yourself in the mirror.
These are all interesting questions, as they are based on the presumption that the increase of wealth necessitates a decline in morality. Almost as if we exist on a Cartesian plane with linear scales and balances.
I disagree with this assumption for several reasons. Morality is the practice of deliberately making virtuous choices. At the time of the choice, it make seem that morality holds us back and limits our ability to acquire and retain wealth, but over time, those that sustain their wealth across generations do so because of moral choices.
In fact, several virtues support Thrift and encourage the building of wealth. The cardinal virtues of Temperance, Fortitude, Prudence, and Justice describe the characteristics needed to succeed in life and business. Temperance is about managing against excess and waste - a penny saved is a penny earned. Fortitude refers to persistence and not quitting or admitting defeat. This tenacity is necessary to hold fast and remain during tough times in order to prosper when tides and trends are more fortunate. Prudence and Justice are about prioritizing and allocating everything according to their due priority.
The other element is Wealth, which in many ways is different form Prosperity or Good Fortune. Wealth implies responsibility and proprietorship, as opposed to simple being the beneficiary of unexpected riches. Wealth is something that requires moral leadership in order to correctly manage over time.
So why is Wealth seen as immoral? Resentment, perhaps. Maybe a guilt trip promoted to induce donations to organizations which pose as charities but are actually sophisticated marketing institutions who could teach Wall Street a thing or two about emotional manipulation. Maybe it is the call of defeat from those who have accepted their lot in life, and mistrust others who advocate a more enlightened approach.
When all else fails, life is about balaning "Doing the Right Thing" with "The Path of Least Resistance". Thrift is not easy, but it is moral, and the practice of Thrift will build Wealth in a way that allows you to look at yourself in the mirror.
Power of Remittances
In our multicultural society, one of the growing trends I have observed is the practice of Remittances. A Remittance consists of the portion of income (ranging from 10-40% of gross earnings) sent back to the home country of a migrant to support family members. At the most basic level, the money from Remittances are spent on food, shelter, clothing, and basic necessities. There are also benefits in that overall poverty is reduced, and families are encouraged to promote health and education.
I found a very good link to articles that reference many success stories of Remittances, particularly as an alternative to Foreign Direct Investment. This is an essential practice which has proven its worth and suitability for developing countries.
http://www.ime.gob.mx/investigaciones/remesas/remesas8.pdf
This is a perfect international example to show the direct relationship between Thrift and Wealth. The practices of Thrift enable the foreign employee to set aside a sizable portion of their income. In turn, this income is combined and consolidated into an amount that can be forwarded on to the people or areas in most need. One might liken this to a forced saving or an internal form of taxation.
Transferring the money from a prosperous economy to a developing economy also provides better use of capital - building wealth more quickly. The $10,000 made during a month on the oil rigs of Fort MacMurray, Alberta matches closely to the annual income of a university educated professional working in Manila, Phillipines, essentially doubling the purchasing power of a family. Imagine the opportunities if your household income was doubled by the contributions of a more fortunate and generous relative.
Remittances can work within our economy among our own culture. What would it take for us to set aside 20-30% of our income towards a capital pool to support the less fortunate within our own families. With interest rates of unsecured credit cards and payday loans approaching 30%, the better (and safer) alternative is to develop this capital independently to avoid the vicious cycle of high external debt and bankruptcy.
If we learn the lessons from our friends and neighbors in other lands, prosperity will come from their example.
I found a very good link to articles that reference many success stories of Remittances, particularly as an alternative to Foreign Direct Investment. This is an essential practice which has proven its worth and suitability for developing countries.
http://www.ime.gob.mx/investigaciones/remesas/remesas8.pdf
This is a perfect international example to show the direct relationship between Thrift and Wealth. The practices of Thrift enable the foreign employee to set aside a sizable portion of their income. In turn, this income is combined and consolidated into an amount that can be forwarded on to the people or areas in most need. One might liken this to a forced saving or an internal form of taxation.
Transferring the money from a prosperous economy to a developing economy also provides better use of capital - building wealth more quickly. The $10,000 made during a month on the oil rigs of Fort MacMurray, Alberta matches closely to the annual income of a university educated professional working in Manila, Phillipines, essentially doubling the purchasing power of a family. Imagine the opportunities if your household income was doubled by the contributions of a more fortunate and generous relative.
Remittances can work within our economy among our own culture. What would it take for us to set aside 20-30% of our income towards a capital pool to support the less fortunate within our own families. With interest rates of unsecured credit cards and payday loans approaching 30%, the better (and safer) alternative is to develop this capital independently to avoid the vicious cycle of high external debt and bankruptcy.
If we learn the lessons from our friends and neighbors in other lands, prosperity will come from their example.
Sunday, March 16, 2008
Secret Society - Global Conspiracy Against Thrift
OK - the title is a bit extreme. I was hoping to generate some traffic from the Global Conspiracy and Secret Society highways. The fact is that there are deliberate campaigns intended to stimulate your impulses, and prey upon your desires to overcome your better judgement. Everything is all about excess, urgency, and immediate gratification. Is this random? Is this a coincidence? I'll leave that for my friends over at the Bilderberg Group or the Trilateral Commission to determine.
One thing I will comment on is the evolution (sorry - intelligent design) of advertising campaigns. Back when I was a child, commercial consisted of a memorable jingle and images of happy people using and enjoying the products. I can still recall some of my favorites:
- Kool-aid Kool-aid, tastes great, Kool-aid Kool-aid, can't wait
- Two all-beef patties, special sauce, lettuce, cheese, pickles, onions on a sesame seed bun
- 'cause Oscar Mayer has a way with B-O-L-O -G-N-A
Now the advertising is all about emotional sensation and urgency. But whether we are talking about hamburgers or HumVees, the message going out is that everyone needs to drop what they are doing, recognize the emptiness and void in their life, and rapidly take all steps to immediately acquire the product in order that their lives may be again complete and fulfilled.
Not all of us are as strong and powerful as Chuck Norris (http://www.chucknorrisfacts.com/), so we have to define our principles and live by them, lest we end up disgraced like Eliot Spitzer (http://en.wikipedia.org/wiki/Eliot_Spitzer). Don't be swayed by the "too good to be fully true" promises of the Get Rich Quick promoters who have been upstaged by the legal limitations of their traits. Examples of this ilk include Charles Givens http://www.newbusinessnews.com/story/07149801.html); (http://invest-faq.com/cbc/warn-givens.html); Kevin Trudeau (http://dir.salon.com/story/books/feature/2005/07/29/trudeau/index.html); (http://www.programcritique.com/subcategories/NotRecommended/KevinTrudeau.html ) and David Del Dotto (http://www.programcritique.com/subcategories/NotRecommended/DavidDelDotto.html).
Thrift is about value and making prudent and intelligent decisions. The best examples would be Warren Buffett (currenlty the individual with the highest Net Worth in the world http://beginnersinvest.about.com/cs/warrenbuffett/a/aawarrenbio.htm; http://www.salon.com/people/bc/1999/08/31/buffett/); Alan Greenspan, the former chairman of the Federal Reserve http://www.amazon.com/gp/blog/A3PYU1S1RW3HDR; or John Templeton http://chinese-school.netfirms.com/Sir-John-Templeton-interview.html.
So the lesson: pay less attention to the over-hyped promises of slick marketers, and heed the advice and examples of those prominent builders of wealth, who prevailed through many generations to build their Net Worth through tried and true principles.
One thing I will comment on is the evolution (sorry - intelligent design) of advertising campaigns. Back when I was a child, commercial consisted of a memorable jingle and images of happy people using and enjoying the products. I can still recall some of my favorites:
- Kool-aid Kool-aid, tastes great, Kool-aid Kool-aid, can't wait
- Two all-beef patties, special sauce, lettuce, cheese, pickles, onions on a sesame seed bun
- 'cause Oscar Mayer has a way with B-O-L-O -G-N-A
Now the advertising is all about emotional sensation and urgency. But whether we are talking about hamburgers or HumVees, the message going out is that everyone needs to drop what they are doing, recognize the emptiness and void in their life, and rapidly take all steps to immediately acquire the product in order that their lives may be again complete and fulfilled.
Not all of us are as strong and powerful as Chuck Norris (http://www.chucknorrisfacts.com/), so we have to define our principles and live by them, lest we end up disgraced like Eliot Spitzer (http://en.wikipedia.org/wiki/Eliot_Spitzer). Don't be swayed by the "too good to be fully true" promises of the Get Rich Quick promoters who have been upstaged by the legal limitations of their traits. Examples of this ilk include Charles Givens http://www.newbusinessnews.com/story/07149801.html); (http://invest-faq.com/cbc/warn-givens.html); Kevin Trudeau (http://dir.salon.com/story/books/feature/2005/07/29/trudeau/index.html); (http://www.programcritique.com/subcategories/NotRecommended/KevinTrudeau.html ) and David Del Dotto (http://www.programcritique.com/subcategories/NotRecommended/DavidDelDotto.html).
Thrift is about value and making prudent and intelligent decisions. The best examples would be Warren Buffett (currenlty the individual with the highest Net Worth in the world http://beginnersinvest.about.com/cs/warrenbuffett/a/aawarrenbio.htm; http://www.salon.com/people/bc/1999/08/31/buffett/); Alan Greenspan, the former chairman of the Federal Reserve http://www.amazon.com/gp/blog/A3PYU1S1RW3HDR; or John Templeton http://chinese-school.netfirms.com/Sir-John-Templeton-interview.html.
So the lesson: pay less attention to the over-hyped promises of slick marketers, and heed the advice and examples of those prominent builders of wealth, who prevailed through many generations to build their Net Worth through tried and true principles.
Your Next Million in Net Worth
I am interested in growing my Net Worth by a million dollars within the shortest time, through the application of intelligent and rational decisions based on research and opportunity.
This blog is intended to attract like-minded individuals who seek an alternative to reckless schemes, and stagnant approached. Remember, net worth is not only about income, it also includes:
- Debt management (reducing or eliminating the cost of debt)
- Discounted acquisition of appreciating assets (investing wisely in things that will grow in value)
- Deferred or delayed purchases of depreciating assets (holding off on things that decline in value)
- Sharing, renting, or re-using where possible
- Considering alternatives to modify personal tastes to live within your means.
So what am I looking for? As I hit the big 4-0 (not immediately, but I can smell the rain), I believe that I am at a point in life where I can offer wisdom and seek beneficial advice in equal amounts. I am open to everything and anything that - if faithfully applied - will build my Net Worth.
The biggest point is that there are no limits to building wealth. What doesn't come from an income or inheritance, needs to be obtained from other means including investments, entrepreneurship, partnerships, bartering, or any other legal and ethical means.
This is also a forum for personal investments, specifically your health and wellness. Thrift is more than a financial ethic, it is a lifestyle of prudence and intelligent choices. Thift could be opting for a salad instead of a steak, or switching to club soda after your third alcoholic beverage. Ultimately it is about taking a preventive course of action in all aspects of your life, to mitigate the risks before they become all-consuming problems.
If Thrifty actions lead to Wealthy outcomes, then by definition, the very act of Thrift is an line in the sand - casting the winds towards the changes from poverty to Wealth.
This blog is intended to attract like-minded individuals who seek an alternative to reckless schemes, and stagnant approached. Remember, net worth is not only about income, it also includes:
- Debt management (reducing or eliminating the cost of debt)
- Discounted acquisition of appreciating assets (investing wisely in things that will grow in value)
- Deferred or delayed purchases of depreciating assets (holding off on things that decline in value)
- Sharing, renting, or re-using where possible
- Considering alternatives to modify personal tastes to live within your means.
So what am I looking for? As I hit the big 4-0 (not immediately, but I can smell the rain), I believe that I am at a point in life where I can offer wisdom and seek beneficial advice in equal amounts. I am open to everything and anything that - if faithfully applied - will build my Net Worth.
The biggest point is that there are no limits to building wealth. What doesn't come from an income or inheritance, needs to be obtained from other means including investments, entrepreneurship, partnerships, bartering, or any other legal and ethical means.
This is also a forum for personal investments, specifically your health and wellness. Thrift is more than a financial ethic, it is a lifestyle of prudence and intelligent choices. Thift could be opting for a salad instead of a steak, or switching to club soda after your third alcoholic beverage. Ultimately it is about taking a preventive course of action in all aspects of your life, to mitigate the risks before they become all-consuming problems.
If Thrifty actions lead to Wealthy outcomes, then by definition, the very act of Thrift is an line in the sand - casting the winds towards the changes from poverty to Wealth.
Subscribe to:
Posts (Atom)
