Is it good news or just bad news in disguise?

The good news.

The Dow was up 122 points or 1.2% and the S&P 500 was up 1.5% on Friday after the Federal Reserve reported consumer borrowing increased by 2.43% although credit card and other kinds of revolving credit declined by 2.3% following a 16 month trend of declines.  Auto loans were up 5.01% in January and made up the lion’s share of the increase in borrowing, up for a second month.

The Department of Labor reported unemployment held steady at 9.7% as the economy only lost 36,000 jobs in January, less than what analysts had been expecting.  This fact plus the increase in consumer borrowing and the decrease in overall revolving credit are leading analysts to believe the economy is stabilizing.

The not-so-good news

The rationale that consumer borrowing is going to save the day is unsustainable.  The fact unemployment is holding steady is encouraging, but I find it hard to get excited over the fact unemployment didn’t go up and we didn’t lose as many jobs as were expected.  9.7% is still way too high considering even if the economy generated 150,000 new jobs every month it still wouldn’t keep up with the increase in population growth.  The number of temporary workers increased for the fifth month in a row in February by 47,500, up 11% from this time last year which means the work is there but employers don’t have enough confidence to hire full-time employees.  The Labor Department reported Thursday productivity increased to an annual rate of 6.9% in the fourth quarter, despite the high number of job losses, but workers can’t be expected to keep up this pace forever.

Don’t buy into the rhetoric.

We’ve become so accustomed to bad news any news that isn’t completely bad is now viewed as good.

Consumer borrowing is up which is good for the economy but bad for your budget; consumers should be focusing on reducing debt and increasing savings rather than adding new debt.   US automakers desperate to unload inventory after the Cash for Clunkers program are capitalizing on Toyota’s woes by offering even bigger incentives to entice consumers into purchasing new cars.  Just because consumers were suckered into buying new cars in January isn’t necessarily a positive economic indicator.

The unemployment rate is temporarily holding steady but at 9.7% that still means over 14.9 million people are unemployed, and 4 in 10 unemployed people have been unemployed for 27 weeks or more.  Companies flush with cash need to focus on hiring and training new full-time employees instead of seeking mergers and acquisitions to make their stock look more attractive to investors.  There are currently over 2,000,000 temporary workers in the US, many of whom have been patiently waiting for a full-time job with benefits.

Revolving credit borrowing is down but that could be directly attributable to the fact banks aren’t issuing new lines of credit and consumers are maxed out anyway.  A credit purchase is still a credit purchase, and I would rather see consumers making small short-term credit purchases with revolving credit than large long-term credit purchases.  Small credit purchases paid off in a timely fashion will accrue negligible interest, while a new car loan is going to accrue thousands of dollars in interest payments.

The Dow and S&P were up Friday, but the market always responds in a knee-jerk fashion to any economic or financial news, or pretty much any news for that matter.  Investors need to step back and look at the market long term and tune out the financial pundits and daily Dow updates.  I wrote an article a couple months ago about the Dow’s levels over the last 100 years and there have always been peaks and valleys in its chart.  The good news is the slope of the curve has always been positive and those investors who patiently waited out the low periods and kept investing were handsomely rewarded for their efforts.

The quandary.

The government wants us to spend our way out of the recession, but we need to pay off our debts and build up our savings.  We can’t have it both ways; either the government and businesses don’t get what they want or we don’t get what we want.

The solution.

Instead of buying products companies produce we should be buying the companies themselves.  Companies need money for capital projects, infrastructure improvements, new employees, research and development, and expansion.  Consumers need more solid investments for their portfolios and fewer gadgets, trinkets, and baubles.  If investors could learn to ignore noise in the news about short term declines in stocks’ prices and instead focus on the underlying value of the companies it would go a long way towards stabilizing a way too reactionary market.  Companies in turn should quit operating quarter to quarter and focus on long-term solutions.

Consumers could do this through direct stock purchases, buying ETF’s, or investing in corporate bonds, although bond yields took a nose dive after the “good news” Friday.

Companies should get off the fence post and start hiring new employees and spending the cash they’ve been hoarding.  It’s untenable for consumers to be expected to pull the country out of the recession when large numbers of companies have been building up huge cash reserves.  Employers need to start spending, not consumers.

As for the good news/bad news, I say don’t pee on my leg and tell me it’s raining.

Readers: what are your thoughts on Friday’s news?  Do you think I’m off base by downplaying the latest economic news?

What are your ideas for kick-starting the economy? More government spending, corporate spending, consumer spending, or a combination of the three?

Also, what are your thoughts on temporary workers?  Is it really smarter for companies to keep increasing their ranks of contractors and reducing the number of full-time employees?  Or does this just make good business sense?

Be sure to subscribe to my RSS feed to be automatically notified when the next article is posted or follow me on Twitter. You can also have new articles delivered to your email inbox by entering your email address in the “Get Updates by Email” box in the upper right hand corner. Thanks for reading!

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Do mass firings improve or hurt performance?

The American Federation of Teachers and the AFL-CIO are up in arms over the firing yesterday of all the teachers and administrators at Central Falls High School in Central Falls, Rhode Island – 93 in all.  The high school had consistently been ranked in the bottom 5% of all schools in Rhode Island, only 7% of the school’s 11^th grade students were proficient in math, and less than half the schools seniors graduate.

The Department of Education is cracking down on poor performing schools throughout the country and giving states four options:

1. School closure.
2. Takeover by a charter school or school management organization.
3. Follow a “transformation model” and lengthen the school day and make other changes.
4. “Turnaround” which requires firing the teaching staff and rehiring no more than 50% of those teachers the following year.

The teachers and the teachers’ union wouldn’t support option three unless they received pay increases which led the school board to decide on option 4.

Many people think this is a horrible way to improve students’ academic performance and are shocked at the school board’s decision.  But what if this was a business or a retail store?  Would everyone feel the same way?

Corporations routinely close stores with poor sales records, auto manufacturers lay off employees when sales decline, and refineries are idled or closed when it isn’t cost effective to keep them open.  Over 2.6 million people lost their jobs in 2008, and according to the Bureau of Labor Statistics the national unemployment rate doubled from 5% in January 2008 to 10% in December 2009.

When it comes to letting the teachers go at Central Falls High it sounds like a faculty shakeup was a long time coming.  Blaming the students and parents is akin to a retail store saying it’s their customers’ fault sales are down.

The overwhelming majority of articles I read were critical of the school board’s decision.  An article on the Christian Science Monitor’s website quoted Steve Scullen, a professor of management at Drake University in Des Moines, Iowa as saying

“I’m not sure any CEO would let every worker go and start over again”

This is overstating the situation; the school board didn’t let all the teachers go, just the teachers at the worst performing school.  This is more like a company closing a single store or facility, not “letting every worker go”.  The curriculum is set by the state and the department of education, they can’t change the student population, so that just leaves the academic staff as the dependent variable in this equation.  Any college or university that produced low-performing students would soon be out of business, so why should a public high school funded with taxpayers’ dollars be treated any differently?

The most important thing to keep in mind, and a fact that has been overlooked in every single article, is what’s best for the children.  I hope the Central Falls School Board’s decision sends a message to teachers and teachers’ unions all over the country their jobs aren’t sacred and they can be replaced just like the rest of us.

My employer recently shut down the facility where I used to work, and knowing that where I work now could meet with the same fate certainly motivates me to work harder.  We have management consultants (I affectionately refer to them as “The Bobs”) who visit each of our locations and compare our performance to the other company locations and our industry peers.  If we’re found wanting then the next step is a short meeting with our supervisor followed by a guided escort to the nearest exit.  The company is then kind enough to box up our personal effects for us.

Many people that I heavily relied on for their decades of experience were inexplicably let go, and a few others had previously opted for early retirement.  I’m sure a high percentage of low performers and unnecessary positions were identified but a lot of good people got caught up in the downsizing as well.  This is an unfortunate necessity in this economy and one that should apply equally to teachers.

How do you feel about the Central Falls School Board’s decision? Do you think I’m off base by supporting the firing of the school’s staff?  Feel free to leave your comments below.  Just keep in mind that inappropriate comments will be flagged and deleted.

Be sure to subscribe to my RSS feed to be automatically notified when the next article is posted or follow me on Twitter. You can also have new articles delivered to your email inbox by entering your email address in the “Get Updates by Email” box in the upper right hand corner. Thanks for reading!

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I have never seen a really good  study on the topic, but my guess is that there are more people out there with no Wills than with Wills.  Whenever I ask someone that doesn’t have a Will, Why? There is never a good excuse.

While most people know what a Will is, it is a legal term, so you know there has to be a legal definition which is both long and very dry.  Black’s Law Dictionary defines a Will as,

An instrument, executed with the formalities of states statutes, by which a person makes a disposition of his real and personal property, to take effect after his death, and which by its own nature is ambulatory and revocable during his lifetime.”  Black’s Law Dictionary 1102 (6th Ed.
1991).

In English, a Will is your last opportunity to tell the entire World, what you want to happen to your children, your stuff, and your money.  While all the following reasons may not apply to you, I can guarantee at least one of the following reasons should inspire you to go get a Will.

Reasons that Everyone Needs a Last Will and Testament

Do you have a will?

First and foremost, if you have children and you don’t have a Will you are just being irresponsible.  If you don’t have a document telling a judge who you want (and in what order) then I can almost guarantee that you’ll have opposing family members fighting who should take care of your children.  I recently wrote a Will for a very good friend who was inspired to draft a Will simply to prevent his parents from fighting with the wife’s parents if there were a custody battle.

Second, if you don’t create a Last Will and Testament, your estate is pass via intestacy (a fancy Latin word for no will).  Intesta…what?
Right now you should be thinking What is Intestacy?  When asked by financial planners, friends or family what happens when you don’t have a Will I usually respond with the wise ass questions, “Did you think all the grieving family members get in front of a judge with a powdered wig and screaming about who dad loved more?”  Every State in the union has their own distribution schedule determined by your family dynamic…and only your family dynamics.  For Instance in New York,

1. Spouse and Kids – First $50,000 to your spouse and then one-half to your spouse and one-half to your children;
2. Spouse and No Kids – Spouse gets it all
3. Kids No Spouse – Kids get it all
4. No Kids, No Spouse – Decedent’s Parents
5. No Kids, No Spouse, No parents – Your Siblings
6. No Kids, No Spouse, No Parents, No Siblings – One half to maternal grandparents and one half to paternal grandparents
7. Then work your way down to aunts, uncles, nieces and nephews.

See the problem here?  You may not want your Child to have anything upon the first death.  Every State has its own distribution schedule pursuant to an intestacy law.

Are you still not convinced? Man, those are two really good reasons!  How about some of the following?

Almost every Will should have a Trust built in.  The type of trust is determined by your family dynamics.  Maybe your children need a trust to protect the assets (usually referred to as a spendthrift trust – as to protect the assets from a spendthrift).  Maybe you hate your daughter or son in law – want to guarantee those assets are not part of the marital estate for dividing the assets when a subsequent divorce occurs?  GET A WILL WITH A TRUST IN IT!

Maybe you need to have a Special needs Trust. Every State and even the Federal Government has  has certain laws pertaining to Medicaid eligibility.  Well, this area of the law gets even more complex when dealing with children, regardless of age, that inherits assets when they are on, or expected to be on government benefits.  Special Needs Planning is an amazingly important topic.

All these reasons, and I haven’t even talked about net worth, marital trusts, QTIPs or even taxable estates! and you know what, I am not going to because that stuff is just noise to prevent you from getting a Will.

If you’d like to learn more about wills, trusts, estates, financial planning, and personal finance please check out Evan’s blog My Journey To Millions, subscribe to his RSS feed, or follow him on Twitter. We’re looking forward to reading your comments!

Be sure to subscribe to my RSS feed to be automatically notified when the next article is posted or follow me on Twitter. You can also have new articles delivered to your email inbox by entering your email address in the “Get Updates by Email” box in the upper right hand corner. Thanks for reading!

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How long are you going to live?

As the saying goes plan as if you’re going to live forever and live as if you’re going to die tomorrow.  However, try as we might our lives are still finite and we’re all destined to meet our Maker some day.  According to DeathClock.com that day for me is July 13, 2043, only 33 years from now.

 I got some better news from LivingTo100.com by using a more scientific approach and filling out a multiple page questionnaire which told me my life expectancy was 102.  This means I could expect to die sometime in 2072, giving me an extra 29 years to live.

The Longevity Game’s Age Tabulator puts my life expectancy at 92, and the Lifespan Calculator tells me I’ll live to 95.  Since LivingTo100.com is the only site that asked specific questions about my family’s medical history (and I liked their answer better) I’m going with the grand total of 102 years of age for my demise.  Of course this is barring any unfortunate instances involving buses, hostage negotiations, or venomous snakes.

Knowing this valuable piece of information is going to help me better plan my golden years.  If I had discovered I was more likely to die in my 60’s I might be tempted to plan on retiring sooner and collecting reduced  Social Security benefits at age 62 instead of full benefits at age 67.  However if there’s a chance I’ll actually make it to 102 I should plan on collecting the maximum benefit at age 70.  Or I could try this trick: collect my Social Security benefit at age 62, put it into investments, and at age 70 pay back the principal, keep the interest, and then begin collecting the maximum benefit.

That is, if Social Security has any money left.  A recent report by the Social Security Administration’s Board of Trustees has the administration as being unable to pay full benefits to retirees by 2037 due to a combination of the recession and baby boomers claiming benefits early.  But we’ll save that discussion for a future post.

So go ahead and give the life expectancy calculators a try and find out when you’re likely to croak.  And while you’re at it head on over to RealAge.com and get your calculated biological age – you just might be surprised at what you learn.

Be sure to subscribe to my RSS feed to be automatically notified when the next article is posted or follow me on Twitter. You can also have new articles delivered to your email inbox by entering your email address in the “Get Updates by Email” box in the upper right hand corner. Thanks for reading!

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Easy ways to improve your memory

Think of all the things you could do with a better memory – remember prospective client’s names you’ve only met once, rattle off facts about your products and services with ease to your customers, never forget your anniversary (again), etc.  With a better memory you could get better grades in college, advance your career, and greatly improve your income potential.

Most of us already use the more common memory tricks like mnemonics – Roy G. Biv to remember the major colors of the spectrum (red, orange, yellow, green, blue, indigo, and violet), or Every Good Boy Does Fine for the line notes of the treble clef, and simple repetition, which is drilled into us at an early age.

I’ve put  together a list of some lesser known memory boosters and cheats for you, easy ways to help you:

- Recall almost any fact with ease,

- Remember faces and names,

- Associate facts with a date,

- And develop an uncanny ability to recall every word said.

So prepare to amaze your friends, family, and colleagues with your new found cognitive abilities:

Recall almost any fact with ease

Our brains are efficiently designed to prioritize information they store – the important stuff goes to the top of the list, the trivial to the bottom.  But with a little bit of practice we can trick our brains into giving a higher priority to things we want to remember by adding emotion, motion, and depth.

I’ve put this into practice with over 5,000 kids to successfully trick them into learning advanced math, science, and physics for their ages.  One of the things we taught the kids was Newton’s 3 Laws of Motion in order:

Newton’s First Law – An object in motion remains in motion unless acted upon by an unbalanced force.

Newton’s Second Law – Force = Mass x Acceleration.

Newton’s Third Law – For every action there is an equal and opposite reaction.

We had a number of games and activities to help the kids understand each law individually, but the tough part was getting them to understand the laws in order.  If we could get them to associate just one of the laws with its order it would greatly simplify the task of remembering the other two laws sequentially, so I came up with an easy way for them to remember the 3^rd Law.

We know each of the laws is about action, so to turn the 3^rd Law into a mnemonic we just focus on the last part, equal and opposite reaction – EOR.  When we sound the mnemonic out, EOR sounds like Eeyore from Winnie the Pooh.  So how do we associate Eeyore with the number 3?  As grown ups we know now Eeyore was clinically depressed which is why he spoke slowly, moved slow, and was slow in general.  So if we could come up with something fast to go with the number 3 we’re in business.

Dale Earnhardt, Nascar’s number 3 race car driver, was still fresh in everyone’s memories at the time so I used his number 3 logo to link to the slowpoke Eeyore.  I had my office manager buy an Eeyore doll from WalMart (I loved doing stuff like that – gave the State auditors fits!) and we stuck Dale’s Number 3 logo to the doll and showed it to the kids as a visual.  We talked about how Eeyore was slow, and Dale was very fast, and what a silly combination that was.  The sillier the mental imagery the more likely our memories are to sit up and pay attention.  We even had a Power Point animation of Eeyore with Dale’s logo racing about the screen for a digital presentation.

Once I had a solid way for them to remember one of the three laws all we had to do was remind the kids the second law was the short formula and the first law was the long one, and when we gave them a multiple choice final test over 90% of the kids were able to correctly identify Newton’s 3 Laws in order.

To put this trick to work for you the next time you need to remember a fact come up with a silly visual image, picture it clearly in your mind, and give your image motion.  The sillier the image the better, and if you can incorporate your other senses as well, smell, taste, and sound, you’re even more likely to be able to recall the information.

Remember faces and names

We meet new people all the time, and I don’t know about you but I find it really embarrassing when I can’t remember their names.  To associate people’s names with their faces the first step is to convince yourself you are awesome at remembering names, that you have a photographic memory for faces.  This is half the battle since most people set themselves up for failure by telling themselves (and others) they have a lousy memory, and you are what you think.  If you really want to put this to the test tell your friends and family about how great you are at remembering names and faces, and brag about it when you’re successful.  This will give your self esteem a much needed boost and make it easier each time you need to recall a name.

When you’re meeting someone for the first time concentrate on them and their face when they’re saying their name, ask them to repeat it for you,  then say it back to them.  So an introduction would go something like this:

Them: “Hi, I’m Steven. ” (focus intently on the sound of their voice and concentrate on their name)

You: “Hi Steven, I’m ______.  Is that Steven with a “V” or Steven with a “Ph”?” (look them in the face as you ask)

Them: “Steven with a V.  Nice to meet you, ______.”

In the course of a few seconds you’ve heard their name twice and said it three times, which will greatly improve your odds of remembering who they are.

Now it’s just a matter of linking them with their name.  If Steven is an accountant you might want to call him “Even Steven” and picture him hunched over an old fashioned adding machine, punching in even numbers.

Or take some tidbit they tell you during the course of your conversation and tie that to their name.  If you’re meeting Al the auditor and he mentions he’s from Alabama that’s three A’s – so imagine Al broke down in front of a “Welcome to Alabama” sign with a AAA tow truck hooking up to his car.

Now that you get the idea you can let your imagination run wild – remember, the sillier the mental imagery the better.

Associate facts with a date

Here’s the cheating part I was talking about.  Anyone who uses a Franklin Planner is familiar with Franklin Covey’s system of assigning a number to each note for the day and then transcribing the important notes to a monthly master list.  That way when you get a call from someone you haven’t heard from in months you just open your planner, scan through your monthly indexes, and find the date with the notes from your last conversation.  Then you can amaze the other party with your powers of recall and make them feel like the most important person in the world.

This obviously works better with a Franklin Planner, but if you have a yearly journal with lined pages you can do basically the same thing.

Develop an uncanny ability to recall every word said

This also involves cheating and is a little more expensive than a Franklin Planner, but should be well worth the cost.  Livescribe manufactures the Pulse Smartpen which records everything you hear and links it to what you’re writing, allowing you to replay anything you want.  All you have to do is tap on your notes to hear what was being said while you were writing.  You can upload your notes to your PC where they’re saved as PDF files, and all your text is digitized so you can easily search for what you need to find.

The 2 GB model goes for $149 retail and the 4 GB version is $199.  Livescribe used to make a 1 GB model which you can still find on Ebay occasionally for under $100.  The price is still a little too salty for me, but if I can find one for the right price I’ll snatch it right up.

There are many other ways to improve your memory but the first three on my list are the ones I use most often, and I’m looking forward to trying the fourth.  The Pulse Smartpen sounds like too cool of a technology not to try, and just about as close to a real life spy pen as we’re going to get.

I’d be interested in hearing about any memory boosting techniques you use, and any success stories you might have.  I’d also like to hear some testimonials from anyone who has the Pulse Smartpen.

Be sure to subscribe to my RSS feed to be automatically notified when the next article is posted or follow me on Twitter. You can also have new articles delivered to your email inbox by entering your email address in the “Get Updates by Email” box in the upper right hand corner. Thanks for reading!

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For the last few years though the commercials have been so bad I might actually have to start watching the game for entertainment.  There were so many awful commercials during Superbowl XLIV it was hard to narrow the list down to just five. I understand consumers are bombarded with thousands of media messages daily so it’s a necessary marketing evil to do outrageous and shocking things to burn a company’s brand into our psyches (e.g. Punxsatawney Polamalu), but these five are just so bad the only thing they’re burning is the companies’ advertising dollars.

A good advertising strategy will positively link a company’s brand with their marketing message (e.g., Go Daddy = domain names + women’s breasts).  However, I had to watch some of the commercials that made my list two or three times and I’m still not 100% sure what they’re trying to sell me (e.g. the US Census).  And the Number 1 Worst Commercial was so bad I couldn’t even bring myself to watch it once – I’m going to have to rely on some brave volunteer to watch it for me and explain it to me in short sentences with small words.

I was going to do a best of/worst of post but FinancialSamurai.com did a great job of highlighting the best Super Bowl ads so I’ll just take a stab at the worst of the bunch. However, be warned – I wouldn’t recommend watching all five bad ads in one sitting:

The US Census

Man, I hope some eccentric millionaire with a census fetish footed the bill for this one because I’m going to be really ticked if my tax dollars paid for this tripe.  Ed Begley, Jr. and a bunch of other vaguely familiar Hollywood has-beens blather on for 30 seconds about 300 million people knowing or not knowing something.  I forced myself to watch this three times and I still don’t know what the purpose was, other than to remind me that we have a US Census.  Did we really need a Superbowl commercial to remind us of this? I would think a 30 second PSA about how to tell the difference between a Census taker and a Jehovah’s Witness would have been more useful.

Taco Bell: It Sucks, It Sucks

I think Sir Charles Barkley starred in this one, it’s really hard to tell because he’s moving in slow motion and looks like he’s wearing Tyra Banks’ fat suit.  In hindsight it probably wasn’t a good marketing strategy to hire a retired professional athlete who appears to have doubled in size to be the spokesperson for a fast food chain, unless Taco Bell was intentionally trying to do the Supersize Me thing with Sir Charles.  He actually appears to grow larger as he waddles slowly across the screen, chanting something about a box and rocks.

The Back-Up Plan: I think it’s a movie

If ever there was a movie commercial warning you to not see the movie, this one is it.  At least, I think it was a commercial for a movie; I vaguely remember seeing Jennifer Lopez talking to some guy in the last couple of seconds so I think it might be a movie since it didn’t look like a music video.  I can only assume this was some Madison Avenue type’s feeble attempt to protect us from being accidentally subjected to another Gigli.

Boost Mobile: Shuffle

I hope that was a Mike Ditka look alike.  That’s all I’ve got to say, other than I’m sorry for subjecting you to this if you haven’t already been victimized by Boost Mobile’s sophomoric attempt at getting old white guys to rap about their overpriced mobile phone service.

And the Number One Worst Commercial from Super Bowl XLIV is:

Focus on the Family: Tim Tebow

Hulu.com viewers gave this the lowest ranking of all the Superbowl XLIV commercials, and I would have to agree from a marketing perspective.  Focus on the Family is a wonderful Christian radio program with messages on “Helping Families Thrive” but you wouldn’t know it from the commercial; all I took away from this 30 seconds was a woman talking about all the problems she had with her son when he was a baby and then… I’ll let you see the rest for yourself if you haven’t already.  Suffice it to say what happens has nothing to do with the message they’re trying to convey, and if anything distracts from the message.

So that’s it, my pick of the 5 worst ads of Superbowl XLIV.  If you made it this far and arent’ clawing your eyeballs out, I salute you!

These commercials weren’t the 5 worst as voted on Hulu.com – I made a few substitutions of my own.  Can you guess which ones? And which commercials did you hate the most?

Be sure to subscribe to my RSS feed to be automatically notified when the next article is posted or follow me on Twitter. You can also have new articles delivered to your email inbox by entering your email address in the “Get Updates by Email” box in the upper right hand corner. Thanks for reading!

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Want to be happier?

Wouldn’t you like to be happier? That is, without the aid of prescription pharmaceuticals? Most people spend their lives chasing after things they think will make them happy, like money, careers, or relationships, only to discover they’re no happier than they were before.

You would think winning the lottery would make you the happiest person in the world, but studies show lottery winners go back to their previous levels of happiness within five years.  If you get an unexpected windfall the areas of your brain that register pleasure light up temporarily, but if you receive that same amount on a regular basis (like a paycheck) it doesn’t have the same effect.

The opposite is also true for people who suffer terrible losses.  Studies show that paraplegics have the same level of happiness after one year as do lottery winners.  Our brains adjust to our environment and our circumstances and return to a sort of preset happiness baseline.

So does this mean nothing will keep us happy? That we should give up chasing after those things we think will make us happy? Even though money doesn’t bring lasting happiness it does buy some really cool stuff, a good career can bring a sense of fulfillment and purpose, and married couples are reported to be happier and married men for some reason tend to live longer than single guys.  And if you follow these five tips from the experts on being happy you can have all these things and more happiness, too:

Happiness Tip #1 – Keep a gratitude journal.

Research shows people who keep a daily journal of things they’re grateful for are generally more happy.  Spend a few moments free flowing whatever comes to mind that you’re grateful for and jot them down, things like “I am grateful for my health”, “I am grateful for my job”, or even “I am grateful for my shoes”.  Think briefly about what it would be like to not have things and remind yourself how much better your life is with them.

A research study from the University of California, Davis reports that people who keep gratitude journals exercise more regularly, have fewer physical symptoms, feel better about their lives, are more optimistic, and are more likely to make progress toward personal goals compared to subjects in a control group.

Happiness Tip #2 – Act like you’re happy.

When you’re feeling down your body language changes –  your shoulders slump, you move slowly,you  talk differently, your overall disposition changes.  When you’re happy you hold your head up high, you stand up straighter, you smile freely, and you move differently.  So try moving and acting like you’re happy when you’re not and you’ll be surprised to find you feel happier.  Smile when you least feel like it and keep a silly grin on your face for 30 seconds and see if you don’t feel just the slightest bit better.  Pull your shoulders back, hold your head up, and pretend you’re happy and before you know it you’ll start to feel happy.

Happiness Tip #3 – Spend time with friends.

A 2002 University of Illinois study by Dr. Martin Seligman, former president of the American Psychological Association, and “Dr. Happiness” Edward Diener, one of the leaders in the field of positive psychology, found that the most common characteristic of students that had the highest levels of happiness was their close ties with their friends of families and commitment to spending time with them.  Everyone is happier when they’re with people they care about, and just getting out and spending time with other people can give your happiness a boost.  The worst thing you can do when you’re feeling down is to be alone, so force yourself to get out, be around people, give old friends a call, or join a club or sign up for a class.

Happiness Tip #4 – You are what you think about.

James Allen says in his classic book “As A Man Thinketh”

“All that a man achieves and all that he fails to achieve is the direct result of his own thoughts… His suffering and his happiness are evolved from within. As he thinks, so he is; as he continues to think, so he remains.”

We are what we think about. If we dwell on unhappy thoughts and memories and focus all of our mental energy on worries and fears then we’ll be unhappy, worried, fearful people.

To combat feelings of unhappiness think of a time and place when you were really happy and mentally relive every last detail.  Transport yourself back in time, remember everything about that moment that made you happy, make it as real as possible in your mind, and in no time all those old emotions will start rushing back.

And just like the smell of freshly baked pumpkin pie brings back memories of Thanksgivings past, you can bring back your memories of happiness.  As you’re practicing this exercise find some way to anchor the moment in the past to something in the present.  Anthony Robbins’ suggestion to accomplish this is to do something physical like squeeze your elbow or gently pinch your thumb, and after you do this enough times all you’ll need to do is repeat the action to bring back the emotions.  Or you could use a familiar taste or smell, like a particular flavor of gum or essential oil.

Happiness Tip #5 – Do a good deed.

Psychologist Sonja Lyubomirsky at the University of California at Riverside found that doing five kind acts a week, especially all in a single day, gave a measurable boost to her test subjects.  Dr. Seligman with the University of Pennsylvania made a similar discovery and recommends making a “gratitude visit”, writing a testimonial thanking someone who is important to you that you owe a debt of gratitude to and then visit that person to read him or her the letter of appreciation.  Dr. Seligman found that people who do this just once are happier and less depressed a month later.  Another method that doesn’t necessarily make you happier than the gratitude letter but lasts longer is to take time each day to write down three things that went well that day and why.

Give these five things a try this week and see if you don’t start feeling happier.   You have nothing to lose except the blues.

If they don’t work and your feelings of unhappiness get worse, or if you have thoughts of death or suicide, immediately find a mental health professional to talk to.   Even the happiest of us have days when we feel sad for no discernible reason and these five tips will help to get us feeling right again.  But persistent feelings of sadness that don’t go away need to be taken seriously and diagnosed by a psychologist or psychiatrist, and in this case anti-depressants might be warranted.

I hope these tips help you find more happiness in your life.  Thanks for reading!

Be sure to subscribe to my RSS feed to be automatically notified when the next article is posted or follow me on Twitter. You can also have new articles delivered to your email inbox by entering your email address in the “Get Updates by Email” box in the upper right hand corner. Thanks for reading!

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Are powerful people more likely to cheat?

Are people with questionable morals just naturally drawn to positions of power and authority, or does the power that goes with the position change people for the worse?

Researchers at Northwestern University in Illinois and Tilburg University in the Netherlands developed a series of experiments to answer this question.  Groups of student volunteers were asked to recall and write about times in their lives when they were in a position of high and low power, and the process of mentally reliving these events would “prime” the volunteers for the study.  Half the group would be in a mindset of high power and the other in one of low power, and each group was then given one of two tasks to perform.

Half of each group was sent to a private room, given a pair of ten-sided dice, and told to report to a lab assistant the number from 0-100 they rolled (the first dice rolled was the tens digit and the second was the ones digit).  The lab assistant would then give the subject a corresponding number of lottery tickets for a drawing to be held after the study was completed, so the higher the number they rolled the more tickets they would receive.  There was no one to witness the rolls of the dice and the participants were on the honor system to report the number to the lab assistant.

The results:

The “high power” subjects reported they rolled 70 on average while the “low power” subjects averaged 59.  Both groups had to have been cheating to some extent because the average should have been closer to 50, but the high power group was definitely cheating in order for their average to be that high.  Try this for yourself – flip a coin 100 times and count the number of heads vs. tails; unless you’re flipping Harvey Dent’s two sided coin you’ll end up with a number closer to 50.

The other half of the group was asked to evaluate on a nine-point morality scale (with one being highly immoral and nine highly moral) what they thought of people who over-reported travel expenses at work.  The high power group in this case rated the behavior as a 5.8 on the nine-point morality scale and the low power group rated it as a 7.2, which would indicate the high power group collectively had a higher sense of morality.

The same groups were then asked how acceptable it would be for someone to break the speed limit if they were running late for an appointment, and if they thought it would be acceptable for them to break the speed limit under the same circumstances.  The high power individuals rated others speeding as a 6.3 on the morality scale but gave it a 7.6 if they were doing the speeding. The low power group saw everyone as being equal; they gave themselves a 7.2 and others a 7.3.

The last questions the groups were asked dealt with tax violations.  If someone else broke a tax law the high power group rated that as 6.6 out of 9 on the morality scale but gave themselves a score of 7.6 if they broke the tax laws.  The low power individuals in this case were actually harder on themselves than others, rating it as a 6.8 if they broke the tax laws and 7.7 if someone else broke the tax law.

So this study demonstrated that people with the mindset of being in a position of power were more likely to profess to be highly moral yet were more likely to behave immorally.

Lord Acton said in 1887 “Power tends to corrupt, and absolute power corrupts absolutely”, which later became known as Lord Acton’s Dictum.    He was also quoted as saying “Great men are almost always bad men”.  The results of this study seem to indicate that great men (and women, to be fair) may become bad by the nature of their position.  Granted, every single person who is promoted into a position of power and authority isn’t going to turn into a scumbag overnight, but it is interesting the study showed people tend to have a natural proclivity for acting hypocritically and dishonestly when in these positions.

I think there’s some truth to what the researchers discovered.  I’ve been in “high power” positions and bent rules and acted in a completely uncharacteristic manner, and I can also say I’ve been in “low power” positions where I wouldn’t so much as go 2 miles over the speed limit.

One instance that comes to mind happened almost 20 years ago when I was the dorm chief of my basic training flight.  I was the guy the TI’s would come looking for whenever someone would screw up, and dorm chiefs were routinely fired for not being able to maintain the discipline of their airmen.  I was determined to not get fired and used my position and my four flight chiefs to scare a few of the troublemakers and send a message to the rest of the flight.

We ended up doing such a good job we were later recruited by another flight’s TI to trash his “baby” flight’s dorm (a group that had only been there a week or so), and my flight chiefs and I turned that dorm upside down.  Then we got to take turns chewing out the airmen for the condition of their dormitory while they stood at attention.   I’m sure these guys must have screwed up royally to have received this kind of punishment, and I have to say I was glad I was on the giving and not receiving end of that particular activity.  But the fact of the matter is on that occasion I acted in a completely uncharacteristic manner because of my position, and only four short weeks earlier my flight and I were probably very close to being on the receiving end of a similar visit.

So this may explain a lot about some of the scandals we hear about in the news, politicians with mistresses and out of wedlock children, professional sports figures who have their own sex scandals, corporate executives who lie, cheat, and steal, cops who get busted for drugs and drinking on the job, doctors who sexually harass patients.  Maybe we all have the potential for good or evil and it takes circumstances to show our true nature, and without a good moral compass or belief system we are all just as likely to commit the same sins under different circumstances.

So what do you think of the results of the study? Do you think you will act differently when you are in a position of power knowing what you do now?  Will you treat people in positions of power differently?

Have you ever been in a position of power and acted immorally or unethically? How about when you were in a position of low power?

Be sure to subscribe to my RSS feed to be automatically notified when the next article is posted or follow me on Twitter. You can also have new articles delivered to your email inbox by entering your email address in the “Get Updates by Email” box in the upper right hand corner. Thanks for reading!

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What's your definition of failure?

Before I give you my definition I want you to stop for a second and think about your personal definition of failure.

Is your definition of failure not accomplishing something you set out to do?  If this is the case, then every “successful” person you’ve ever heard of is a failure.  People typically don’t get things right the first time they attempt them, or the second, third, or fourth time for that matter.

Thomas Edison is said to have tried at least ten thousand different ways to perfect the incandescent light bulb.  When asked about his failures he simply replied “I have not failed.  I’ve just found 10,000 ways that won’t work.”  I found references that this number is actually 1,000 and others reported the number of attempts to be closer to 3,000, but the important thing to take away from this is he did not give up.  Remind yourself of this fact the next time you think you’ve failed and tell yourself “I’ve just learned another way not to do _________. “

Thomas Edison was also fired from his first job as a telegraph operator (for inventing on the job) and had to live in his mentor’s basement.  At the time people probably said “That Edison kid sure is a failure.  No job, no money, and he’s living in Frank Pope’s basement.”  Yet Edison went on to become one of the most prolific inventors in history, filing over 1,093 patents.  His name is synonymous with light bulbs even though he didn’t invent the light bulb, or even come up with the idea to use a filament element.  He improved on the design of the light bulb and went on to form a company to manufacture light bulbs and distribute the electricity necessary to power them.

If you read my previous article “Ready to start your own business?” you’ll find Edison accomplished with his company 4 out of the 5 elements of a successful business: he improved on an existing design, marketed to an underserved or new market, came up with a new delivery system or distribution channel, and increased integration.  The company he founded, Edison Electric Light Company, is still in business to this day although you know it now as General Electric (GE).

Our greatest glory is not in never failing, but in rising up every time we fail. – Ralph Waldo Emerson

I’ve had the pleasure of giving a talk on failure to about 5,000 school children between the ages of 10 – 12 over a 5 year period when I ran a DoD funded science, technology, engineering, and math (STEM) program for geting kids interested in careers in science and engineering.  One of the things I did with every group was break them up into random teams and give them seemingly impossible tasks to perform.  When we would evaluate how each team did I would ask them “So did you fail?” and they would invariably respond “Well, duh! Of course we failed!”   I would always tell them “Try it again and tell me what you learned”  and they would go back into their groups, discuss what worked and didn’t work, and eventually come back with a better way of accomplishing the task.

What I wanted to convey to them was failure is not the end of the world if you learn from it.

My definition of failure for them was giving up, not learning from their experiences, or not trying at all.

“One who fears failure limits his activities.  Failure is only the opportunity to more intelligently begin again.” – Henry Ford

Many of us have lost money in the stock market, had failed business ventures, bad real estate investments, foreclosures, layoffs, etc.  Does this mean we’re failures?  Or failures in as far as investing, business, or our careers are concerned?  Having not succeeded at any one of these things doesn’t define you as a person, they’re simply life events you need to learn from.

If you’ve lost money in the stock market it may have been because you didn’t fully understand your investments, weren’t diversified, received some bad advice, was following the crowd, etc.  The important thing to do is understand what happened and make sure you don’t make the same mistake twice.  The worst thing you could do is give up on your investments and settle for something ultra-safe with low returns, like US Treasuries or low-interest savings accounts.  Educate yourself on your investments and really try to understand what’s going on with your money.  There are tons of online resources, books, and personal finance blogs you can use to get up to speed.  I also have a series of articles on financial analysis you might want to consider reading.

This holds true for anything else you may have “failed” at; once you’re over the initial shock take some time to objectively evaluate what happened, learn from your experience, then take steps to ensure it doesn’t happen again.  Remember Einstein’s definition of Insanity: “Doing the same thing over and over again and expecting different results.”

I’ll leave you with a short video explaining how Michael Jordan was one of the greatest failures in the history of basketball.  Enjoy!

What do you think about this definition of failure?  And what is your definition of failure? Have you had any major failures that turned into learning experiences?  I look forward to reading your answers.

Be sure to subscribe to my RSS feed to be automatically notified when the next article is posted or follow me on Twitter. You can also have new articles delivered to your email inbox by entering your email address in the “Get Updates by Email” box in the upper right hand corner. Thanks for reading!

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Learn everything you need to know to start your own business

My friend Ryan at PlantingDollars.com contacted me a few weeks ago about an idea he has to start a niche travel website for the Waikiki beach area of Hawaii.  This is a guy who decided a year after receiving a Bachelor of Science in Finance to buy a one-way ticket to Hawaii and pursue his dreams.  He’s a motivated, determined young man and I’m sure he’s going to succeed at whatever he sets his mind to.

One of Ryan’s goals is to have a million dollars in investments by the time he’s 40, and he knows one of the best ways to reach this goal is to start his own business.  We’re going to follow Ryan’s progress as he develops his business plan and takes all the necessary steps to ensure his business is successful.

Ryan’s not the only person I know who would give their eye teeth to chuck the 9-5, ditch their cubicle, and join the ranks of the successfully self-employed.  If you’re one of these people be sure to subscribe to my RSS feed so you can be automatically notified when the next article on how to start your own business is posted.  I’m going to cover everything you need to know to create a successful business step-by-step over the next few months just like I did with the “Develop your own marketing plan” articles.

The following nine topics are the key to business success and we’ll be using them to guide Ryan’s (and possibly yours) planning process:

• The Business Concept
• Understanding the Market
• Industry Health and Trends
• Consistent Business Focus and Clear Strategic Position
• Capable Management
• Ability to Attract, Motivate, and Retain Employees
• Financial Control
• Anticipating and Adapting to Change
• Company’s Values and Integrity

The Business Concept

The first question you have to ask yourself is what needs will your business meet.  Meeting needs is the basis of all business. If your business doesn’t meet some real and important consumer need or desire you won’t get the customers and your business will will be destined for failure.

Successful businesses have at least one or more of the following elements:

- Something New – a new product, service, feature, or technology.

- Something Better – an improvement on an existing product or service with more bells and whistles, is cheaper, more reliable, faster, or more convenient.

- An Underserved or New Market - this could be a market where the demand is greater than what competitors can meet (e.g., the Wii), an unserved location, or a niche market that hasn’t been dominated by competitors (like Ryan’s idea for a micro travel website).

- New Delivery System or Distribution Channel – Amazon.com is a perfect example of a company who capitalized on this idea.  The big chain book stores were selling books online when Jeff Bezos drafted his business plan for Amazon, but the key difference was his innovative use of the internet and a highly efficient distribution channel.  He devised a way to help his customers find the books they were looking for with the Amazon website and quickly get the books into their hands using Amazon’s regional distribution centers.  Amazon’s distribution system proved to be so efficient they eventually branched out into distributing just about any product you can imagine.  Now he has another hit on his hands with the Kindle book reader, another innovative way of delivering books to consumers.

- Increased Integration – this is when a product is manufactured and sold by the same company, or when a company offers more services or products in one location.  Apple is a prime example of a company who develops, manufactures, and sells its own products.  They’ve maintained tight control of the technologies they’ve developed and their relationship with their customers and as a result they are one of the most successful companies in the world.

Your business idea should have at least one if not more of these elements in your business concept.  If your business idea doesn’t incorporate any of these elements you may want to go back to the drawing board and rethink your business concept.

Also, when evaluating your business concept ask yourself “Is this something I would want to use myself?” If you’re not sold that you would want to use it, even if you’re convinced your business concept fills a need, an unserved market, or a niche, then chances are your business isn’t going anywhere.  In addition to one or more of the above elements you should be passionate about your business concept.  If you don’t have a true passion for your business then eventually you’ll get burned out on the idea, lose interest, and your business will flounder and fail.

In the next article we’ll discuss how to evaluate your target market to determine if you’ll have a sufficient customer base for your service or product.  We’ll also check in on Ryan and see how he’s making out with his market research for his Waikiki travel site.

- Do you have a desire to start your own business?  If so, what is it?  Have you ever started a business and failed?  Feel free to leave a comment and tell us your story.  Also leave a comment if you would like help getting your own business idea off the ground.

Be sure to subscribe to my RSS feed to be automatically notified when the next article is posted or follow me on Twitter. You can also have new articles delivered to your email inbox by entering your email address in the “Get Updates by Email” box in the upper right hand corner. Thanks for reading!

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