Riscario Insider

Buying A Video Camera: Can We Trust The Experts? (Sanyo Xacti FH1 vs Canon Vixia HF series)

noreply@blogger.com (Promod) — Sun, 12 Jul 2009 11:08:00 +0000

How do you make the right decision about a product you know little about?

Hot water heaters: tank or tankless? Capacity?
Video cameras: flash or hard drive or tape? HD or SD? Which specs matter?

Would you rather have Hyundai or Honda, Magasonic or Panasonic, Samsung or Sony? These days, brands mean less because so much manufacturing is outsourced. Think of electronics and clothing. You’ll find many internal similarities among products. The Innovator's Dilemma describes four stages in product evolution: our focus shifts from functionality to reliability to convenience to price.

We've been looking for a video camera. We don't know much about them and wanted to make the “right” choice. We got our last one 15 years ago ─ a $1,300 Sony Hi-8mm that broke down within two years. Do video cameras now work well enough that brands are interchangeable? And do they work sell enough that they don’t break down as quickly?
Online reviews gush over the Sanyo Xacti VPC-FH1 for true high definition (1080p at 60 frames per second vs 1080i at 30 fps), eight megapixel stills, great lowlight resolution, and a reasonable price.
You’ll find plenty of information online but the choices get confusing when looking for a compact, convenient video camera. For under $300 dollars, you can get a Flip Minio or Ultra with HD. For $600, you can get better quality and more capabilities. For $900, you get even more. How much is enough?

The Camera Store
I rarely go to stores but I wanted to see the video camera before buying. I checked online and found a retail store to visit. It took 10 minutes before a sales rep was available. I asked to see the Sanyo FH1, which was hidden away, not on display. The rep recommended Canon: better optics, longer history, optical image stabilization and a 24 Mbps capture rate (Sony and Panasonic max out at 17 Mbps). Apparently, a higher capture rate means smoother recordings.

The rep implied that Sanyo warranted no further discussion. Surprisingly, he couldn't answer basic questions about the Canon

what resolution are still photographs? (a mere 3 megapixels ─ worse than a cheap digital camera)
can the output be saved directly to MP4 H.264? (I was told yes but the answer is no)
how do you edit AVCHD the format Canon uses? (Not easily ... time-consuming ... benefits from specialized commercial software)

The rep didn't know about a special Canon bundle with a battery and case until I showed him the store flyer he gave me. Strangely, this case has no room for the battery. Style over substance. The case for our ancient Sony kept falling over, whether empty of full. Can a company that can’t make a good case really make a good camera?

Let’s look at prices. The Sanyo FH1 costs $630 Canadian. The Canon Vixia HF200 costs $750. The rep recommended the $900 Canon Vixia HF20 which includes 32 GB of memory. The other models came without memory. Naturally, I was encouraged to get a pricey extended warranty. The costs kept adding up.

I left the store more confused than when I entered. Canon seemed choice but I didn’t want to spend that much.

More Research
I did more research online and found the Sanyo FH1 even performed better than Canon’s 2009 top-of-line Vixia HF10. Reviews identified two main drawbacks in the FH1: electronic image stabilization (which is less apparently less effective than optical image stabilization) and the lens cap is not built-in. There was excellent information at camcorderinfo.com and thoughtful comments ─ 53 pages worth.

I decided to buy the FH1. Sanyo Canada sets the list price at $600. The retailer I visited charges $630. Who would pay more than list? Dell charges $600 but had a sale price of $550.

I felt some obligation to reward the personal service at the retailer I visited (not sure why). They have a price match guarantee but exclude Dell. Why? Dell has no physical stores and has a different price structure. This was irrelevant to me. This retailer sells online too and probably sells more cameras than Dell. I ordered from Dell, saved $80 and got free delivery two days later.

Canon, Panasonic and Sony
At this time, neither Canon, Panasonic nor Sony sell a HD video camera with 1080p resolution for under $1,000 (if at all). The best they do is 1080i (which has hard-on-the-eyes interlacing). Remember the flicker you saw on cheap computer monitors with picture tubes years ago? That's interlacing. These companies save files to AVHCD format which is inconvenient for novices and requires additional software to edit.

Better specifications don't translate into better performance. Canon’s 24Mbps capture rate doesn’t lead to better results than the 16-17 Mbps used by Sony and Panasonic. Yet the rep gave that as the reason to pick Canon.

Some specifications mislead and confuse. You’ll find capture rates in Mbps (megabits per second) and the speed of memory cards in MBps (megabytes per second). One byte is eight bits. You’ll see manufacturers claim they have “1920x1080 Full HD Recording” without telling you this resolution uses interlacing and is only 30 frames per second. Sneaky.

Sanyo is hardly perfect. They are delaying sales of the pistol grip Xacti HD2000 in North America until they clear out inventory of the old HD1010. The FH1 deliberately has no jack for an external microphone but costs $100 less.

The Shopping Experience
When buying, consider nontraditional sources like Dell and Amazon ... it's your money. You can buy without going to a store unless you're tactile or have special issues that require a physical inspection (e.g., difficulty moving certain fingers).

Even if you buy in store, you won’t find the perfect product. We’re demanding but we adapt.
Visiting stores chews up time. It's difficult to try products. You're pressured to buy extended warranties. Selection is limited. Items may be out of stock. The service is inconsistent.

Shopping online is different. You can waste lots of time doing research. You can't try the products but you can find out what others think. There’s no pressure to buy extended warranties. You’re more likely to find items in stock and you have access to a much larger selection.

Lessons Learned
The experience of buying a video camera shows that the masses know more than a speciality retailer. I was sceptical before. What’s more, the masses have your best interests at heart. They aren’t taking money out of your pocket. Professional reviews help, but reader comments from around the globe can provide even deeper insights.

Links

Review of Sanyo VPC-HD2000 [similar to the FH1; many helpful reader comments] (camcorderinfo.com)
Review of Sanyo VPC-FH1 (Amazon.com)
Hot Water Heaters: Tanks or Tankless (Ellen Roseman)
photo courtesy of Goran Anicic

Podcast Episode 27 (10:20)

direct download | Internet Archive page

Popularity Contest: The “best” Money Blogs

noreply@blogger.com (Promod) — Sun, 05 Jul 2009 00:34:00 +0000

The delicate balance between modesty and conceit is popularity.
--- Max Beerbohm

Anyone who is popular is bound to be disliked.
--- Yogi Berra

The Globe and Mail has been running a contest to pick what they call the best of the money blogs. Selected prominent financial experts (including Canadian Capitalist) picked their favourites. That's great. We save time when people we trust make recommendations for us.

Consensus is difficult to reach. We can't even agree on tea (black or green?) or the way to prepare it (boil the milk and teabag with the water or add them later?).

There are few cases in which mere popularity should be considered a proper test of merit. --- Edgar Allan Poe

What is “best”? Best is subjective. Best is meaning less (meaningless?) since we are so diverse and have access to so much. We’re fickle too. I really like Thicken My Wallet but haven’t read in weeks because I’m not notified of new posts via Twitter. With so many pulls on our attention, we easily forget.

Asking For Votes

Focus on the user and all else will follow
--- among the 10 things Google has found to be true

Some Twitter users ask followers to retweet their posts. As if we’re too dumb to realize we can do that. Some non-nominees feel they should have been included in the contest. Some nominees are asking their readers to vote for them. Just like politicians. Surveys of trust, ethics and honesty repeatedly put politicians near the bottom. Why emulate them?

There’s a subtler way: tell readers there’s a great list of blogs for them to sample. This puts your audience's interests in the forefront. When they view the list, they’ll see the option to vote. Without pressure.

Yes, you can ask directly for what you want. That’s not the only way or the best way. Readers are volunteers. They willing volunteer their scarce attention. They’d willingly volunteer their votes. Without being asked directly.

Best In The World

If you want to be the best, why not be the best in the world? You can. Seth Godin describes the why and how in The Dip, which I re-read this week and continue to highly recommend.

Back to the contest. Congratulations to the winners and nominees!

Links

The Best of the Money Blogs (Globe Investor)
Thoughts on The Dip by Seth Godin
photo courtesy of Robert Aichinger

Podcast Episode 26 (3:36)

direct download | Internet Archive page

The Effect of Banks Selling You Insurance Online

noreply@blogger.com (Promod) — Sat, 27 Jun 2009 11:50:00 +0000

Rules that restrict a consumer's ability to access information about insurance don't make sense, and it's certainly not in the consumer's interest to try to put new roadblocks in place. --- Canadian Bankers Association, June 2009

Isn't it nice to know the bankers are looking out for you?

The Canadian Bank Act prohibits the sales or marketing of insurance in branches. Naturally, independent advisors like this but banks don't. Now banks can sell insurance online because a website is technically not a branch. That's great news for banks because most Canadians already bank online --- 53% in 2008.

Let's look at what banks are likely to do online and the effect on you.

What Would Banks Sell?

Banks can now integrate links to their insurance offerings into their main bank websites. That's gold. This is much like Microsoft making Internet Explorer the default web browser in Windows. You could still install other browsers but most users didn't bother. The arguably superior Netscape Navigator browser eventually got destroyed. In a similar way, the banks will get lots of insurance traffic.

What would you buy online? Probably simpler products that don't require the expertise of an advisor. Perhaps term life insurance. If you have questions, you could probably phone a call centre to get answers.

For tax planning with insurance, you probably want to meet a qualified advisor in person. However, you may want to do some research online. You won't find much. Perhaps the banks will help here.

As we've seen in the past, banks dominate and take over entire sectors. Remember the days of separate trust companies and stock brokerages? Some banks now own insurance companies too. The sun continues to rise.

Who Suffers?

Independent advisors face the biggest challenges. Research routinely shows that families are underinsured. Independent advisors have difficulty reaching them. Insurance sales are labour-intensive, which encourages advisors to focus on larger cases and more expensive types of insurance which pay higher compensation. This is not meant as a criticism, but a reflection of economic reality.

Banks argue that they could help the underinsured if only they could sell insurance in their branches. After all, who doesn't have an account with a bank? Banks have systems and procedures to handle small, low revenue transactions like selling GICs. If you want to invest $1,000, an independent advisor would spend more in time and gas than they could earn. You might prefer to transact online because your time is also valuable. That's where large organizations have a huge advantage.

Big Deal?

Banks already sell insurance through subsidiaries conveniently located near their branches. If you invest with a bank-owned stock brokerage (e.g., BMO Nesbitt Burns, CIBC Wood Gundy, RBC Dominion Securities, ScotiaMcLeod, TD Waterhouse), you may already have been approached. I help insurance specialists at these firms as well as independent advisors every day.

Do You Win?

As a consumer, you probably win as the insurance companies and independent advisors react. You may have concerns about your privacy and how the bank uses information about your health, though. You may feel pressured to buy insurance as an implied condition or getting a mortgage, say. Don't count on lower prices. Banks are better at making money for their shareholders than saving money for their customers. Aren't most businesses like that?

Perhaps insurers will help advisors create meaningful websites to give you online alternatives. Maybe more advisors will --- alone or as part of teams --- build useful websites and send you meaningful emails. Here "meaningful" means genuinely helping you in a non-self-serving way. There's too much fluff that teases but doesn't help: you are asked to contact the advisor without knowing enough to gauge whether you think they can help you.

I'm currently running a four part series to help advisors implement eNewsletter campaigns that genuinely help you and comply with anti-spam laws.

When insurance and banks are mentioned in the same sentence, opinions vary. You can get different perspectives from the links below. Your comments are welcome.

Links

Bank websites may sell insurance (Globe & Mail, June 10, 2009)
Bank websites can sell insurance (Canadian Insurance, June 9, 2009)
Video: Insurance Turf Wars (BNN, June 12, 2009)
Why aren't more advisors online?
Don't buy insurance from banks (Ellen Roseman, April 2009)

Podcast Episode 25 (5:43)

direct download | Internet Archive page

How "Do Not Spam" Laws Help and Hurt You

noreply@blogger.com (Promod) — Sun, 21 Jun 2009 01:53:00 +0000

There are people who would like to get rid of minimum wage. But we have to have it, because if we didn't some people would not get paid money. They would work all week for two loaves of bread and some Spam. --- Chris Rock

We don't want to be paid in Spam (canned, spiced ham) or pained by spam (emails we didn't agree to receive).

Canada is the lone G8 country without anti-spam legislation, and in 2007, was ranked number six in a list of top 10 worst countries for originating spam.
--- Canadian Lawyer

In 2008, Canada ranked #4 on the Spam by Originating Country list, according to Cisco. Spauhaus, a nonprofit that tracks spam, doesn't include Canada in the top 10. The United States "wins" in each survey.

Better To Give Than Receive

Let's not quibble over which country spews the most spam. Let's turn to us, the recipients. We can take precautions by using anti-spam filters and email services that weed that garbage out. Gmail and Kaspersky Internet Security work well for me.

Like the Do Not Call lists which prevent unsolicited phone calls, Do Not Email rules are a great idea. Some argue that honest small businesses can get hurt inadvertently. How?

Let's look at an example. Financial advisors who serve you well are already send you timely, meaningful email. They have your permission and won't be affected by the new rules. In practice, very few independent advisors send out email or newsletters, which creates opportunities for their larger competitors.

If you can't be contacted directly, advisors might to advertise to you or attract you in other ways. Ads in old-world media --- tv, radio, newspaper, flyers, billboards --- aren't targeted and get lost in the clutter. Money gets wasted as the wrong people get interrupted.

Targeted online advertising can work well. Think of Google Adwords. You get unobtrusive ads related to what you're seeking at exactly the right millisecond. Nice. Unless you use adblockers like the free Adblock Plus for FireFox. Then you're on your own Do Not Advertise list.

A Better Way

There's an even better way. Advisors can create quality content. Say you want to know what Warren Buffett thinks about buying term life insurance. Type in "warren buffett term insurance" in Google, Bing or Yahoo. You'll get links to my 2007 post that currently ranks higher than BBC News, Bloomberg, CNBC, Marketwatch.com, Wikipedia and even Berkshire Hathaway (where I pulled Warren's profound quote).

Discovery trumps advertising any day. Discovery is free. Any advisor can make themselves easy to find. Advisors then switch from annoying pest to welcome guest.

Why Aren't More Advisors Online?
Books are the last bastion of the old business model—the only major medium that still hasn't embraced the digital age. Publishers and author advocates have generally refused to put books online for fear the content will be Napsterized. --- Clive Thompson, Wired 17.06

We go online for information, but meaningful objective financial information can be difficult to find and hard to understand (especially for the life insurance strategies the wealthy use).

Advisors are reluctant to put meaningful information online. They're afraid that competitors would steal their best ideas. In contrast, authors and bloggers share their best to get read. Recently, Darren Rowse posted 31 Days To Build A Better Blog day by day for free at Problogger. Then he started selling a nicely formatted, expanded ebook, which some (like me) bought for the convenience.

The mystique that advisors create works against them because you can't gauge the quality of what they offer without getting personally involved --- a big commitment of your time and a loss of privacy.

Not all unsolicited email is bad. You lose when something valuable doesn't get through. Do Not Spam laws will protect your privacy. What's next? How about saving trees with Do Not Junk Mail rules?

Links

Annoying Pest or Welcome Guest? The Do Not Call List
Future of Reading in a Digital World (Clive Thompson, Wired 17.06)
Canada introduces anti-spam legislation (Canadian Lawyer, June 1, 2009)
Official Q&A for Anti-Spam Legislation Q&A (Industry Canada)
Industry braces for "do not email" legislation (advisor.ca, June 19, 2009)
The 10 Worse Spam Origin Countries (spamhaus.org, updated daily)
Cisco Spam by Originating Country in 2008 (marketingcharts.com)

Podcast (5:48)

direct download | Internet Archive page

The Three Major Obstacles to Growth according to Brian Tracy

noreply@blogger.com (Promod) — Sat, 13 Jun 2009 21:23:00 +0000

The more you learn, the more you can learn.
— Brian Tracy

And the more you can earn.

Brian Tracy spoke live in Toronto at a private fundraiser this week. My son Jeevan wanted to attend and so did I. We talked to Brian briefly afterwards. I thanked him for teaching me about affirmations in the early 1990s in The Phoenix Seminar.

If you've seen Brian live, you know how entertaining he is. A spoonful of humour helps the lessons go down. Brian dishes out spoon after spoon, lesson after lesson.

Brian identified three major obstacles to growth

the comfort zone
learned helplessness
the path of least resistance

Naturally, he shared solutions too.

The Comfort Zone

Did you exchange a walk-on part in the war for a lead role in a cage?
— Pink Floyd, Wish You Were Here

Getting into our comfort zone is much like sliding into a warm bath. Soooo tempting. So difficult to leave. How much time do we spend on Entertainment vs Education? For many, that's not pleasant to contemplate. I see many people who aren't more capable now than last year, five years ago or 10 years back. So much wasted potential.

How much do we spend on our mobile phones and cable/satellite tv? Probably much more than on educational material. Ignoring the cost, consider the time spent. This can be scary.

Move out of your comfort zone. You can only grow if you are willing to feel awkward and uncomfortable when you try something new. — Brian Tracy

We can escape the gravitational lure of our comfort zone by having a Big Hairy Audacious Goal (BHAG). This phrase was coined by Jim Collins and Jerry Porras (authors of the classic Built To Last). Here are examples from Wikipedia.

Learned Helplessness

I think I can. I think I can. I think I can. I know I can.
— The Little Engine That Could

If you say "I can't", you're thinking like a victim. You're giving up internally. You're not betting on yourself. In this phase, we tend to surround ourselves by other losers. The joy of shared misery.

There are lots of examples. A baby elephant tethered to a pole tries to break free but can't. An adult elephant can escape but doesn't try.

thanks, for the trouble you took from her eyes
I thought it was there for good so I never tried.
--- Leonard Cohen

Sometimes we need help to escape from our chains. We might even have the key, but didn't know.

The Path of Least Resistance

Water takes the easiest route. Like water, we're lazy too. Unfortunately, what's valuable doesn't come easily.

We can break the habit of laziness through repetition of something worthwhile. Good habits take as much effort to acquire as the bad ones. Brian reminded us that we all work on commission: we're paid in proportion to our results. We want to add more value.

Brian was also promoting iLearningGlobal.tv (iLG) a website offering videos, audio and ebooks on a monthly subscription. There's also an affiliate program if you're looking for ways to make more money. Thankfully, there were no demonstrations or pressure to join. This made us more interested but we left without making a firm decision.

Brian Tracy is well worth seeing live. You'll laugh. You'll learn.

Links

event details (meetup.com)
official website (briantracy.com)
Brian Tracy quotations (sparkinsight.com)
Learning from Brian Tracy Live (May 2007)
Why do Brian Tracy and Stephen Covey use Overhead Transparencies? (marketingactuary.com)

Podcast (5:03)

direct download | Internet Archive page

"The Snowball" rolls into Warren Buffett

noreply@blogger.com (Promod) — Mon, 08 Jun 2009 01:31:00 +0000

How much do you know about Warren Buffett's life? My family knew primarily of his staggering wealth. We knew little about his older business partner, Charlie Munger, or Astrid, the companion his wife Susie found for him.

In The Snowball: Warren Buffett and the Business of Life, Alice Schroeder paints a captivating, detailed portrait of the man and key people in his life. The audiobook read by Kirsten Potter runs 37 hours and took three months to finish. This extended listening enhanced the experience and made Warren feel like a part of our lives.

Biographies provide valuable insights into interesting lives. Warren authorized this one and participated. Does that mean the whole story is rosy? No. If there were two conflicting views of a happening, he asked that the less flattering version be used. Alice reveals many blemishes in her quest to help us understand him.

Much of Warren's appeal comes from his wealth. As a person, he's unusual. He brought Moody's manuals on his honeymoon. He doesn't eat a balanced diet and doesn't like to try new food. He neglected his family. He doesn't live a lavish life.

He made investment mistakes over the years. For example, he bought shares in waning textile company Berkshire Hathaway and had an agreement to sell them for $11.50. When the deal got changed to $11.375, he bought the company in retaliation and to his detriment.

Born At An Early Age

Warren focused on making money during childhood. At age 6, he started selling chewing gum. He got inspired by a book called A Thousand Ways To Make $1,000. That's $1,000,000. While in high school, he earned more than his teachers by delivering newspapers. He understood that a dollar today multiplies over the years through the magic of compound interest. This made him reluctant to spend. This made him reluctant to donate until his death, since he wanted to leave a larger sum.

Warren recognized the role luck played. He knew his life would have been very different if he were born at another time or in another country. He wanted to help others who were not as lucky at the Ovarian Lottery. He preferred giving advice over money.

Warren improved over the years. He made the world better for small investors. He supported Main St over Wall St. His actions encouraged better corporate governance. He stuck to his principles for decades.

Legacy

Warren helped make the world better. What more can you ask? He's changed the world of philanthropy. He doesn't want his name on buildings or scholarships the way many others do. He's happy to donate to The Bill and Melinda Gates Foundation with the stipulation that his annual contributions be spent that year.

The Snowball won't make you a billionaire but you will be richer. Highly recommended (especially the unabridged audiobook).

Links

Warren Buffett's Tough Career Choice: Actuary or Billionaire?
A Thousand Ways To Make $1,000 (Motley Fool)
How Warren Buffett Made His First Dime (Parade, Alice Schroeder)
Does Warren Buffett "Buy Term and Invest the Difference"? (most read post of 2008)
Does billionaire Seymour Schulich help you "Get Smarter"?
Richard Branson: When Your Servant is Your Master

Podcast (13:04)

Bonus: includes interviews with Jeevan and Sharmila, who also listened to the full 37 hour audiobook.

direct MP3 download | Internet Archive page

Tips to Bulletproof Your Job (inspired by Stephen Viscusi)

noreply@blogger.com (Promod) — Sat, 30 May 2009 23:00:00 +0000

Work is a popularity contest, and the harsh truth is that when jobs are being cut, the guy who keeps his job is the one the boss likes best. --- Stephen Viscusi

You'll find lots of job advice these days. Earlier, we looked at three recommendations from the Harvard Business Review. Today we're looking at Bulletproof Your Job, a new book by Stephen Viscusi. Catchy title. Nice cover. No government funding. And the dust jacket states the four simple rules in eight big, bold words:

be visible
be easy
be useful
be ready

You'll find many good ideas. The table of contents does not show the full list of 50, which is annoying. The book is blunt. Some actions help you get ahead at the expense of others.

Bulletproof Your Job is current enough to mention LinkedIn and Facebook but not Twitter. The content helps you in any economy but has the most appeal during a downturn. You'll benefit most if you work in a corporate environment. You'll get value in other situations too, including sales.

Rather than repeating points from the book, I'll share thoughts on the four suggestions from my real world experience.

Be Visible

Q: Why do men prefer beautiful women over brainy women?
A: Because men see better than they think.
--- Unknown

Familiarity is your powerful ally in building relationships. If you can't see your boss regularly due to travel or location, stay visible by phone and email. This is not the same as meeting in person but much better than fading from memory. When you do more than your clients and colleagues expect, they are more likely to mention you to your superiors.

You also want to be on the radar of people outside your company. Create, complete and update your profile on LinkedIn. Associate with people who have the potential to hire you or recommend you to people who can hire you. You want to do this now not when you're looking for a job.

Be Easy

Maybe in some other lifetime you won't fit.
And if you don't fit, you're fit for nothing at all.
--- Joe Jackson

Back in 1984, when I graduated from the University of Western Ontario, the job market stunk even for actuarial students. Of the 17 graduates, only four found jobs. Three of us had the top grades. The fourth had average grades but looked good, was very likable and the only one with a BMW. Over the years, he had difficulty passing the 10 actuarial exams and disappeared. Neither likability nor technical skills are sufficient on their own.

Some workers are a hassle to have around but not enough of a pain to dismiss. During a downsizing, they go first. The displaced are miffed to see others who seem less capable (to them) survive. Attitude and likability matter that much.

After a downsizing, fewer remain. So there's less tolerance for keeping annoying or negative employees. You don't want to travel with someone who keeps asking "are we there yet?" It's easier to get rid of the squeaky wheel than to keep applying oil.

Be Useful

How can I be useful, of what service can I be?
There is something inside me, what can it be?
--- Vincent van Gogh

See how far you get by being useless. Some employees have a strong sense of what their job entails. They rebel when you ask them to do something necessary but outside their job description. Say photocopying, testing software or answering the phone. Ask them to learn something new and they are reluctant. Ask them to change how they do something and they're reluctant. These people find themselves on the short list when staff reductions are imminent. They don't understand when notified that their services are no longer required. How can they get booted out? After all, they were doing their job.

Be Ready

Most people have the will to win,
few have the will to prepare to win.
--- Bobby Knight

Remember Y2K when the whole world seemed ready to collapse? Did you stock up on cash, bottled water, food and batteries? That's being prepared.

In a work environment, you prepare yourself for emergencies by setting aside savings or having a secured line of credit. You can prepare for opportunities by improving your skills: strengthening your weaknesses and learning totally new things. You demonstrate what you know when you help others

An Easy Start
Here's an easy way to get started: social media. As an experiment, build a following on Twitter. Blogging is even better but takes more work. You can even be anonymous if you're insecure.

If you're willing to use your real name, add value on LinkedIn. Answer questions in your areas of expertise. Join relevant groups. As you practice, you'll have a higher profile, be easier to deal with, more useful to others and better prepared for whatever comes.

Links

official website (bulletproofyourjob.com)
Employable: Three Lessons from a Popcorn Farm
Losing Your Livelihood: Insuring Against The Risk (based on the Harvard Business Review)
Should you switch to an actuarial career?

Podcast (6:43)

direct download | Internet Archive page

Does billionaire Seymour Schulich help you "Get Smarter"?

noreply@blogger.com (Promod) — Mon, 25 May 2009 00:23:00 +0000

The sequel to Bruce Willis' Die Hard is Die Harder. So isn't Get Smarter the sequel to Get Smart, the 2008 movie that grossed $230 million US? Maybe you're old enough to remember the 1960s TV show about inane spy Maxwell Smart.

Get Smarter isn't a movie. Get Smarter isn't about improving your memory or intelligence. Get Smarter is a 2007 book with lessons for business and life from a wealthy Canadian. Seymour Schulich, then a 67 year old billionaire, targeted the 20-40 crowd.

Canada now has 18 of the world's 793 billionaires according to Forbes (in $US): ranging from David Thomson & family with $13B to Michael Lee-Chin with $1.0B.

You probably got lots of free, unsolicited advice from "wise elders" like your parents. You can get more from self-help books. If you think that wealthier means wiser, you can read books by or about billionaires like Richard Branson, Donald Trump, T Boone Pickens, Bill Gates and Warren Buffett. Does the world need one more?

Schulich Who?

You can find out more about Seymour Schulich on Wikipedia. Although a billionaire, Schulich got support (money?) from the

Canadian Council for the Arts
the Ontario Arts Council
the Ontario Book Initiative
the federal Book Publishing Industry Development Program

Was this taxpayer support really needed?

There are oddities you rarely find in a book. For instance, how long has Schulich been married? The Introduction says 38 years but the dust jacket says 37. If you forget an entire 365 days, would your spouse keep you until the next anniversary?

Here's another. The Introduction says that many books have "two or three main ideas" but Schulich wants readers to get "twenty to thirty ideas". Quantity over quality? The back cover quotes a reader who finds that most books have "two or three usable ideas" but this book has "twenty to twenty-five great insights". How convenient. This is similar to the odd self-promotion for Daniel Gross' Dumb Money.

You'll find incomplete statements that beg questions. Schulich says he drove the same car for 11 years but doesn't say what car. If it's a Honda Civic, kudos to him. If it's a Rolls Royce or Maybach, shouldn't it last? Does he have only one car? Is he usually driven by a chauffeur, which means he drives little? He also says he's lived in the same house for 30 years but maybe it's a magnificent mansion that's continually renovated. We don't know. Maybe he has multiple properties.

The government involvement and oddities made me cringe. Attention to detail and authenticity are keys to credibility. For your benefit, I read the entire book but skimmed Appendices II - IV.

Lessons Learned

You'll find valuable lessons in Get Smarter. The cartoons are nice. The chapters are short and easy to read.

Here are nine points that stood out

know your edge: as Seth Godin says in The Dip, "Average people are in the majority, but they're not in demand."
use reciprocity, the first of Robert Cialdini's six universal principles of influence
you won't get truly wealthy if you're paid for your hours rather than your results: read Timothy Ferriss' thoughts on how much you really earn
inflation erodes the buying power of your savings but helps you as a borrower: lock in your debt for years when rates are low
there are no overnight successes: read Outliers by Malcolm Gladwell to understand the importance of the "10,000 hour rule"
be the promoter (and contract-writer), not the promotee
givers set limits because takers won't
the United States has 5% of the world's population but 70% of the lawyers; these lawyers take 3% of the GNP while the profits of the S&P 500 companies total 6% of the GNP
"Fusion power will power all cars electrically and power all homes."

If you're ages 20-40 and haven't read many books, you may find that Schulich shares many treasures. If you want to benefit from government support too, get smart: get Get Smarter from your library. If you want a laugh, watch Get Smart. The movie's funny and so is the TV show.

Links

Seymour Schulich biography (Wikipedia)
Get Smarter website (www.gettingsmarter.ca); out of date
Get Smart (2008) movie (IMDB)
Get Smart (1965) TV series (IMDB)
Richard Branson: When Your Servant Is Your Master
Warren Buffett's Touch Career Choice
Your Life Expectancy Exceeds 1 Billion Seconds
The World's Billionaires (Forbes, Mar 2009)

Podcast

direct download | Internet Archive page

Jim Flaherty on the Economy and Financial Literacy

noreply@blogger.com (Promod) — Sun, 17 May 2009 22:54:00 +0000

If meetings could solve the economic crisis, it would be over by now. --- Jim Flaherty on the many international meetings he's been attending

Finance Minister Jim Flaherty addressed CALU for the third consecutive year, earlier this month. He spoke the day after his boss, Prime Minister Stephen Harper. Flaherty spoke off script, which made him more interesting. His triplets are already 18 months old. Sometimes strangers call his boys "three twins".

Flaherty reminded us that a year ago there was concern that oil would reach $200 a barrel. The world is now in the midst of its first synchronized global recession, which Canada joined in the fourth quarter of 2008. We hate getting left out!

Canadian Differences

Since Canada still has a strong financial sector, other countries are looking at emulating the "boring" Canadian model. What sets us apart? Flaherty said:

effective implementation of regulations (regulations without monitoring mean little)
reasonable risk-taking
regulation of investment banks (which were acquired by commercial banks, which The Office of the Superintendent of Financial Institutions (OSFI) regulates); in the United States, investment banks faced less scrutiny and contributed to Dumb Money
no housing crisis (mortgages are not tax-deductible as they are in the United States); also mortgages are insured when borrowing 80% or more of the value of the property; the government purchased about $56 billion worth of mortgages to help banks stay liquid

Internationally, fixing the banks is crucial. In Canada, Flaherty sees access to credit as the main issue. The situation is improving and banks can still raise equity here. The government is spending to improve infrastructure as the Prime Minister described. The government has an increased appetite for risk. The Business Development Bank of Canada (BDC) and Export Development Canada (EDC) are lending accordingly.

We lack a national securities regulator. Flaherty called this an international embarassment. Why does a country of 35 million people have 13 regulators?

Other Good News

Politicians like to remind us of the good they've done. Flaherty remains proud of the Tax-Free Savings Account, which he still considers the centerpoint of his previous budget. The TFSA has been well received and benefits from what Warren Buffett calls the miracle of compound interest.

Financial Literacy

What if you don't understand compound interest or other basics? Flaherty wants to increase basic financial literacy. For example, what happens if you only pay the monthly minimum balance on your credit card? He asked CALU for help. At an evening reception, I spoke to Flaherty about this initiative, gave him my business card and volunteered to participate.

I talked to fellow blogger Canadian Capitalist over dinner. We both felt that anyone who wants to learn already can. Financial bloggers already help freely and would be willing to do more. The new Canadian Money Forum is a great resource started by CC and Million Dollar Journey. You can ask your questions and get thoughtful answers at no charge from a friendly community that cares.

Links

Seven in a Row: Prime Minister Stephen Harper Live Again
Dumb Money 2009 (a US perspective)
Secret 7: The Best Tax Sheltering In Canada
The Original And Overlooked Tax-Free Savings Account
Live from CALU 2008: Jim Flaherty, Stephen Harper, Mark Carney, Michael Ignatieff
Why Jim Flaherty wants to boost our financial literacy ( Edmonton Journal | Feb 2009)
Speech by Jim Flaherty to the International Conference on Financial Education (May 2008)

Podcast

direct download | Internet Archive page

Preston Manning on Financial Planning

noreply@blogger.com (Promod) — Sat, 09 May 2009 19:22:00 +0000

Political parties are marketing machines for winning elections.

---Preston Manning

Knowing how to win an election doesn't mean knowing how to run the country. Or having well-considered ideas. Or being financially prepared to run for office. When Preston Manning made these points at CALU 2009, his slightly squeaky voice reminded me of early Jimmy Stewart.

Preston Who?

You may recall Preston as the leader of the western Canada-based Reform Party. He now runs The Manning Centre for Building Democracy, "a national not-for-profit organization supporting research, educational, and communications initiatives designed to achieve a more democratic society in Canada guided by conservative principles."

Just don't look meaningful French content on their website at this time. Here's what you'll see today:

TRANSLATION REQUIRED
What's New: Il n'y a pas d'evenements au Centre Manning.

The English site lists five events. You might find the spotty translation from a national organization established back in 2005 surprising, offensive or amusing.

When To Sweat

Preston pointed out that a new Starbucks employee must complete 20-30 hours of training before serving you a coffee. Politicians aren't required to have any training in their core activity, law making. How would you feel if pilot boarding an airplane said "I've never been in one of these before."? Politicians learn on the job, but there's little tolerance for mistakes. Elsewhere, magician David Ben said you can sweat in public or private. But you will sweat.

Preston wants to train future politicians so they know how to make laws in the public interest.

Financial Planning

Besides preparing politically, those who may run for office should prepare financially too. They need help with financial planning. Besides the normal issues affecting us all, what about the financial impact of

maintaining two residences
placing assets in a blind trust (as is required for government ministers)
drops in personal income while in parliament
current investment strategies (e.g., renting space to the government may look suspicious later)

The financial planning should be done now to help prepare candidates who start running for office in 10, 15 or 20 years. Preston acknowledged that CALU members have the skills and knowledge to help future candidates now.

Plans are nothing; planning is everything.
--- Dwight D Eisenhower

Financial planning isn't glamorous or perfect. It's necessary for the rest of us too. Time zooms past. Our lives are rarely as tumultuous as a politician's, where one slip can ruin a career. If we fail to plan ... you know the rest.

Links

Podcast

direct download | Internet Archive page

Seven In A Row: Prime Minister Harper Live Again

noreply@blogger.com (Promod) — Tue, 05 May 2009 01:51:00 +0000

"I have now spoken at your annual conference for seven years --- four times as Prime Minister and three times before that. This is highly unusual. I rarely speak to any organization two years in a row, let alone seven. I am a great admirer of the work you do both as an organization and as individuals. Your devotion to the principles of entrepreneurship and to the responsibilities of civic involvement are near and dear to my own philosophical heart."

--- Prime Minister Stephen Harper

The annual Conference for Advanced Life Underwriting (CALU) sessions bring Canada's eminent advisors to Ottawa each year. Why is the conference room locked this morning? For a security check using dogs. Twittering live @riscario, I speculated about an important guest.

Prime Minister Stephen Harper addressed us for over 20 minutes. Four years ago, he had been PM for mere weeks and looked tired (but happy). This time, he looked rested and confident. He still joked:

I don't suppose this recession has made your jobs any easier. If it's any consolation, it hasn't made mine any easier either.

As you'd guess, the PM spoke about the economy. He used slides for the first time.

Canada was the last into this recession. Canada is the least affected of the major developed countries and when the recovery comes --- as it eventually and inevitably will --- this country, Canada, will come out of it in the strongest position.

Better Than The Rest

Every country in the G20 is running a deficit. Ours is relatively small and expected to stay that way. We ran a surplus until February. Canada has

the best fiscal position in the G7
the lowest debt-to-GDP ratio in the G7
the soundest banking system in the world
(by market capitalization: 3rd largest in the world, 4 of the 10 largest banks in North America)
low, stable inflation
highly educated, skilled, mobile labour force
diversified economic base

I felt good with these reminders. Our financial sector remains private.

Alone or in concert with other levels of government, we are moving planned capital investments from years ahead into the next two years. This stimulus spending must end when the recession ends. --- Prime Minister Harper

Other political parties might want to continue spending after the recession ends. Canadians can't decide ... and keep electing minority governments.

The Prime Minister faces many priorities. I'm delighted that he once again chose to spend time with CALU members, partners in helping you tame your financial risks.

Links

Last year: The Prime Minister, the Finance Minister, the Governor of the Bank of Canada and Michael Ignatieff

Podcast

direct download | Internet Archive page

Faster: How To Deal With The Rat Race

noreply@blogger.com (Promod) — Sun, 26 Apr 2009 22:30:00 +0000

There's more to life than increasing its speed.
--- Mahatma Gandhi

We don't notice slow change until we step back. Who has time for that? James Gleick, author of Faster: The Acceleration Of Just About Everything. Example after example, shows how our lives have been speeding up.

eating (fast food on the run or home delivery)
home cooking (pre-shredded cheese, pre-sliced mushrooms)
video (faster edits, digital editing)
mail (letters to couriers to email)
Internet (from dialup to always-on high speed)
search (from libraries to realtime with Twitter)
coffee (from brewing a cup to buying a cup from a drive-thru)

Quicker often means more expensive. We spend time to earn money. Then we spend money to save time. To save more time, we work more hours to earn more money. Circular. Earlier, we looked at how much we really earn, when we consider how much of our lives we pay. Maybe we got the coffee for the caffeine that keeps us going when our bodies shout STOP!

What Time Matters?

We look at time in different ways. Think of the airport. You can arrive early to reduce the risk of missing your flight. Or you can minimize wasted time at the airport by rushing to get on the plane mere moments before the doors close. What if you're an early bird travelling with a last minuter?

Too Fast Already

Have you ever noticed? Anybody going slower than you is an idiot, and anyone going faster than you is a maniac. --- George Carlin

Some things are already faster than they need to be. You can drive many vehicles well above the speed limits. Most times, traffic and road conditions limit your speed. The Porsche goes at the same pace as a Yaris. Adding more horsepower has little practical benefit (though a larger vehicle is generally safer)

Red light stop, green light go, yellow light go very fast.
--- Starman (1984), observing how we drive

So many factors affect travel time. I've decided to enjoy the journey, which is pleasant because I listen to audiobooks. Delays mean more time to enjoy. Pedestrian walking signals now have countdown timers. When a few seconds remain, rather than racing through the yellow, I slow down to stop.

Computers used to be compared by chip speed. As netbooks show, weight matters more than waiting. We can be happy with slower but lighter. Design also matters.

Faster = More Wastage

WWW? Nice toy, but what a waste of time --- Bill Gates

Do you remember the days of dot matrix printers? Speed was measured in characters per second. Now we look at pages per minute. I laser printed 48 pages (four 12-page proposals) and accidentally dropped them on the floor. They scattered. I should have re-sorted them but time was limited. I tossed the jumble into the recycling bin and reprinted. The time saved vanished in traffic on the way home.

Multitasking

We're capable of doing more than one thing at a time. So we do. For example:

eating and talking
watching a movie and snacking
listening to a teacher and taking notes
driving and listening to the radio
walking and talking on the phone
jogging and listening to your iPod
cycling on an exercise bike while reading a magazine or watching tv

Sometimes we do too much: driving + listening to the radio + talking on the phone + reading billboards + watching people.

Slowing Down

Time is what we want most, but what we use worst. --- William Penn

We kill the time we struggle to save.

You'll see lines at Tim Hortons and Starbucks. Video games consume oodles of time. So does email, instant messaging, talking on your phone, web surfing, gardening, golfing, playing bridge, reading, ...

We scrimp here to splurge there. We distort the way we spend our money in similar ways, as described by Michael Silverstein in Treasure Hunt (an earlier blog post).

Lily Tomlin says that if even if you win the rat race, you're still a rat. Lovely. The book Faster makes you much more aware of time. At first, the audiobook (who has time to read?) seems too slow. This leaves too much time to ponder. Hurry up! You soon realize that time spent reflecting isn't time wasted --- a valuable lesson as the rats race around us.

Links

Faster: The Acceleration of Just About Everything (amazon.ca)
excerpts and links by chapter (fasterbook.com | some broken links)
Small Cars: Is "Safer Than Ever" Safe Enough for You?
Getting what we want by distorting our spending
How much do you really earn?

Podcast

direct download | Internet Archive page

Small Cars: Is 'Safer Than Ever' Safe Enough for You?

noreply@blogger.com (Promod) — Sun, 19 Apr 2009 17:06:00 +0000

Toronto Star: ... previous crash ratings for small cars are misleading

Wall Street Journal: Many small cars perform well in safety tests but appear, intuitively at least, to be at a disadvantage in collision with larger vehicles. Now a series of crash tests indicate the disadvantage is substantial, even when small cars collide with vehicles that don't seem that much larger. (emphasis added)

Forbes: ... no amount of airbags, electronic stability control or roll cages can defeat the laws of physics.

Though much safer than they were a few years ago, minicars as a group do a comparatively poor job of protecting people in crashes, simply because they're smaller and lighter. --- Adrian Lund, President, Insurance Institute for Highway Safety (IIHS) (emphasis added)

So all things being equal, if you're concerned about safety, you want a bigger, heavier car. --- David Zuby, senior vice president of vehicle research, IIHS

Scary words.

Cars have been on my mind this week. Fellow blogger Squawkfox and her husband were hit by wheels that came off a truck. Fortunately, they were not seriously hurt. Or worse.

Then the IIHS took three small cars rated tops in barrier tests and crashed them into midsize cars from the same manufacturer.

Daimler: Smart fortwo vs Mercedes C300
Honda: Fit vs Accord
Toyota: Yaris vs Camry

Each small car dropped to lowest possible rating even though the collision speed was only 40 mph (64 km/h). The rating of Poor means a high probability of serious injury or death.

The following videos show what happened.

Daimler: Smart ForTwo vs Mercedes C300

Honda: Fit vs Accord

Toyota: Yaris vs Camry

How Much Safer Are Large Vehicles?

The Wall Street Journal reported that for minicars

in multi-vehicle crashes: "The death rate ... is almost twice as high as that of large cars"
in single vehicle crashes: "... three times as many deaths as in large cars"

In the case of Squawkfox, the flying truck wheels were like a smaller vehicle.

The Dilemma

In collisions with bigger vehicles, the forces acting on the smaller ones are higher, and there's less distance from the front of a small car to the occupant compartment to 'ride down' the impact. --- Toronto Star

We're buying smaller vehicles to save on fuel and to help the environment. Enviable goals. But we're increasing the chances of injury to ourselves. I've never been on the road in a minicar but did talk to a Smart Car representative. She explained how safe the vehicles were --- much like sitting in the shell of a walnut. How customers in accidents felt the vehicles saved their lives and returned to replace them. Seeing the crash test provides a rather different perspective.

How Safe?
There's a limit to large, though. In a collision with a truck or tractor trailer, even a big gas guzzling, road hogging SUV is at a disadvantage. If you're driving at highway speeds, the odds are against you too.

You can't have it all. If you're after fuel economy then you want a smaller, lighter vehicle. You're compromising with safety, though. If you drive in city gridlock, speeds are low thanks to volume, cyclists and buses. I average 20-25 km/h in "rush hour". That provides additional insurance.

We may have forgotten our high school physics, but those laws still apply.

Links

Costs of a Car Crash (Squawkfox | April 13, 2009)
14 Things to do Before and After a Car Accident (Squawkfox | April 16, 2009)
Small Cars are Dangerous Cars (Wall Street Journal | April 17, 2009)
In vehicle crashes, size matters (Toronto Star | April 15, 2009)
Why Small Cars Won't Keep You Safe (Forbes | April 14, 2009)
Smaller Cars Get Low Grades (Wall Street Journal | April 14, 2009)
Crash test video (Insurance Institute for Highway Safety)
The influence of size and weight on safety in crashes (Insurance Institute for Highway Safety | April 14, 2009)
Smart USA responds to IIHS crash test results (autobloggreen.com | April 15, 2009)

Podcast

direct download | Internet Archive page

Mope, Gloat or Move: How Tax Compares by Province (Personal and Corporate)

noreply@blogger.com (Promod) — Sun, 12 Apr 2009 00:33:00 +0000

I got something now to think about.

I'll work all day but not to pay it out.

--- Pete Townshend, Keep on Working

Tax. Tax. Tax. Like the weather, something we talk about but can't do much about.

How do taxes compare from one province to another? We can find out from timely new report entitled In Search of Tax Excellence: Where Provinces Rank in Creating a Tax Climate for Small- and Medium-Business Success. This research comes from the Canadian Federation of Independent Business (CFIB).

Smaller businesses use about half the country's workforce to produce about half the GDP. They face specific tax worries, worth understanding.

The full report runs 51 pages packs in many details and contains many references for further reading. The analysis considers 65 indicators encompassing the five key areas of tax

premiums and payroll tax
corporate income tax
property and capital tax
personal income tax
sales and excise tax

We'll look at high level results for businesses and individuals.

Gloat: The Best Province

I'd rather be here than any other place.
--- Pete Townshend, Keep on Working

The best province for smaller businesses is Alberta. That's probably no surprise. You can enlarge the chart below by clicking on it.

Mope: the worst provinces, Ontario and Quebec, came as a surprise.

"It is alarming that the two biggest provinces, which make up 60 per cent of the total economy, are the weakest links in the provincial tax chain."
--- Catherine Swift, CFIB President

Move: I'm not ready to return to Alberta where I lived from ages two to five. Or to New Brunswick or Saskatchewan. But I'm disappointed as an Ontario resident.

Personal Income Tax

Let's look at how much income tax we pay, provincial and federal combined. In the heat map, green means the lowest tax. British Columbia and Alberta have the lowest taxes, depending on the income. Quebec is at the other extreme.

Corporate Income Tax
Alberta and Manitoba have the lowest corporate tax, depending on the level of income. The worst provinces are Ontario and Quebec.

We can't do much about tax levels but our governments can. In tax worries for smaller businesses, you'll see they have been adding jobs --- unlike larger companies. Where would tax savings go? Smaller businesses say they would invest in new equipment, pay down debt, increase employee wages, hire more employees and train employees better. Wouldn't that help the economy?

Links

Podcast

direct download | Internet Archive page

Dumb Money 2009: What Went Wrong? Thoughts from Daniel Gross

noreply@blogger.com (Promod) — Sat, 04 Apr 2009 18:07:00 +0000

The financial services industry tends to get exactly the amount of regulation it wants.

--- Daniel Gross

Ideas often move from innovators to imitators to idiots. What if the innovators turn out to be idiots too?

We love stories and simple explanations of complex happenings. Looking back, we see causality that may not exist or that we did not see at the time. Journalist Daniel Gross helps make sense of the latest financial crisis in Dumb Money: How our Greatest Financial Minds Bankrupted the Nation.

There's not one culprit or cause. Blame (in no particular order, Wall Street ("smart money"), the US central bank, the rating agencies, the regulators, the politicians, the media, ... All the way down us (also known as "dumb money").

Dumb Money feels more like a long magazine article (or series of blog posts) than a book. It was released on Feb 23, 2009 in ebook and audio formats. That allowed much quick publication than print. And saved trees. Until April 14, when the print version becomes available.

Four Optimistic Assumptions

Is a dream a lie if it don't come true

Or is it something worse?

--- Bruce Springsteen, The River

Daniel identifies four problematic assumptions

interest rates will stay low forever: the death of inflation
asset prices will increase forever: especially real estate, which turned houses into bank machines, letting consumers spend money they didn't have through mortgage equity withdrawals
debt will be serviced forever: no defaults or missed payments, especially on home mortgages
markets for packaging debt will remain strong forever: securitization and derivatives to control and spread risk ... any risk

Unfortunately, nothing lasts forever.

As long as the music is playing, you've got to get up and dance.

--- Chuck Prince (Summer 2007), former CEO of Citigroup

Unfortunately, we don't know when the music's going to stop.

What About Canada?

The book is written for an American audience, as the following interview question shows.

Q (from Ottawa): What are your thoughts about Canadian banks and the regulations that control them? They are still very profitable and none have failed.

A: Don't know that much about Canadian banks.

That doesn't mean that people outside the United States should be smug. The world is suffering.

Mixed Marketing

This book has not attracted much attention. A Google search for "dumb money" currently shows these top five hits

2005 article by the author (Slate magazine)
2000 book with similar title from Gary Wolf (amazon.com)
definition (stock-market-crash.net)
unrelated article (Time magazine)
article about mutual funds (Yale University)

Not even an ad appears. A Twitter Realtime Search for "dumb money daniel gross" currently shows only 12 results.

In contrast, search for "outliers" and four of the top five results are for Malcolm Gladwell's newest book (which I discussed earlier). There's a lesson here: avoid using generic words in a title unless you're really popular.

Links

In an extreme case of self-marketing, you'll see that all these links come from the author!?! Maybe there will be more attention when the print edition becomes available. You may find these links give you enough information, letting you save your money.

excerpt from audiobook (Simon and Shuster)
Reining in bubbles so they won't pop (Newsweek, book excerpt by author)
Are executives villains or morons? (Newsweek, by author)
The villains of the financial catastrophe aren't criminals. They're morons. (Slate, by author)
Answers to questions from readers
Podcast interview 22 min (Slate)
Video with author

Podcast

direct download | Internet Archive page

Employable: Three Lessons from a Popcorn Farm

noreply@blogger.com (Promod) — Sat, 28 Mar 2009 19:45:00 +0000

I used to like to go to work, but they shut it down.
I got a right to go to work, but there's no work here to be found.
Yes and they say were gonna have to pay what's owed.
We're gonna have to reap from some seed that's been sowed.
--- Dire Straits, Telegraph Road

This month, four acquaintances lost their jobs. Each worked at a different company. Two found better positions. The other two are looking and I wish them well.

How can you make yourself employable?

You can insure against the risk of losing your livelihood with tips from the Harvard Business Review in an earlier post. There are no guarantees, though. Much like farming.

We visited a popcorn farm last week. Frankly, there's not much to see, but we did stock up on our favourite snack. We learned three lessons that help nonfarmers. Even nongardeners.

you can't control the weather
work while you wait
show you care

You Can't Control the Weather

There will be a rain dance Friday night, weather permitting.
--- George Carlin

Many factors affect farmers: rainfall, sunshine, temperature, pests, the price of seed, the availability of fertilizer, the skills of labour, equipment breakdowns, injuries, market demand, competition.

While weather is certainly a concern, there is little the farmer can do about it. However, the farmer can take steps like having an irrigation system to deal with years of lower-than-expected rainfall. Or build a greenhouse, depending on the crop.

In the Seven Habits of Highly Effective People, Stephen Covey talks about our large circle of concern and our smaller circle of influence. We may worry about the economy, the environment, corporate governance, and terrorism. We probably can't do much about those concerns. Instead, we must focus on what we can change --- including ourselves.

Work While You Wait

Too often, man handles life as he does the bad weather. He whiles away the time as he waits for it to stop. --- Alfred Polgar

Crops grow at their own pace. Growth takes time and a favorable environment. We work now but must wait to see the results and hope for the right outcome. There's no point playing the blame game (" If only management had/hadn't done that ..."). There's no point cramming either. You can't reap tomorrow what you sow today.

There's no point sitting idly either. While waiting for the crops, we can take care of the weeds. We can work on the weaknesses in our strengths. Seth Godin suggests we use slack time to

become an expert by learning something (can include charitable work)
earn a following and reputation through social networks (e.g., I use LinkedIn and now Twitter)

Show You Care

Nobody cares how much you know until they know how much you care.
--- Theodore Roosevelt

You'll quit farming if your heart isn't in your work. Negative sentiments show in poor crops. We've all known people who see work as a burden, who spread their discontent like weeds, who cut corners. Who don't care. Who lighten the atmosphere when they leave.

Even if we work in the virtual world or in tall climate-controlled office towers on what was once farmland, nature reminds us that much lies beyond our control. Yet we persevere. We survive. We change. We thrive. Life finds a way. We find a way.

Links

Visiting the Jones Popcorn Farm (near Point Pelee)
Losing Your Livelihood: Insuring Against The Risk
Quotable Quotes: The Seven Habits of Highly Effective People
Slack (Seth Godin on using slack time productively)

Podcast

download

How Referrals Lead You Astray: The Big Lesson from a Wet Basement

noreply@blogger.com (Promod) — Sun, 22 Mar 2009 11:53:00 +0000

April showers bring May flowers. March rain and melting snow brought a wet basement. Water has started leaking in through the cold storage room. Not a flood but enough to warrant repairs. Who to hire? We don't know any waterproofers. So we asked around and learned a big lesson.

W1: Referral 1 (Quote 1)

I paid too much for it, but it's worth it.
--- Samuel Goldwyn

W1 (not a real name) is known in our neighbourhood for excellent work for premium prices. We got a quick inspection, a verbal quote and a business card. Nothing in writing. No brochure.

Work could start the say after we decided. We planned to hire them based on the recommendations but decided to get two other quotes to be sure.

W2: Free for $50
By coincidence, we received a letter from W2, offering a free 10 point inspection of our internal plumbing. Normal charge? $250 but free for three days for 12 households in our neighbourhood. Maybe they did waterproofing too. Anyway, an inspection couldn't hurt. We phoned. Guess what? A $50 charge for the free inspection. We declined.

W3, W4: Charge For Quotes
We called a couple of companies from the weekly flyers that "flood" our mailbox.

These firms charge for quotes. Forget that. We see free quotes as part of their marketing process. A quote only takes a few minutes.

W5
Who knows? They take 2-3 days just to arrange an appointment.

W1 Revisited
After pricey W1 did waterproofing for a neighbour, leakage continued!?! W1 redid the work. They stand behind their work, but why did they do a poor job the first time? And one of the workers showed up drunk (and was promptly fired). We took W1 off our list even though they where our preferred choice. This shows that well-intentioned referrals can fail badly.

W6 Referral 2 (Quote 2)
Other neighbours were shocked at the quote from W1. A relative of theirs used W6 last year and was very pleased with the work and price. They also have a wet basement and were getting a quote from W6. We got a quote too.

After a careful inspection, the quoter came inside to sit at our kitchen table. We got a folder with testimonials, diagrams and articles. Plus two business cards, meaning we could pass one on. Viral marketing.

We were advised to get window wells to fix drainage in two other problem areas. The quoter used a business card as a ruler and drew the footprint of our home. He split the quote into four sections so we could select the areas we wanted serviced. We appreciated this since our budget was $0 to start.

Here's the best part. We got samples of the material

a plastic membrane to stick to our foundation (like self-adhesive rubbery wallpaper)
spacers to create an air channel
a reflective layer to retain radiant heat

We were told to be wary of companies that used tar --- cheaper, less durable.

This written quote was 34% cheaper than W1 (the only quote so far). We could see what we were getting. Our neighbours hired W6 without considering any other company. We were ready to sign too but held off since two other quotes were pending.

W7 (Quote 3)
Verbal quote using tar (12% lower than W6). No business card. Not available for 2-3 weeks. Did not point out other potential problem areas until we asked. Appalling. W6 was clearly the best choice but we decided to wait until the next day for a final quote before signing.

W8 (Quote 4)
This company advertised in a local flyer. The quoter said our foundation is concrete blocks, not the poured concrete used these days. So we needed the whole wall waterproofed. The other quotes focused on the cold storage area. We did not need window wells because our windows are above ground. Landscaping would divert the water from our foundation.

Here's the quote

Materials: A rubbery membrane that's applied with a trowel, spacers with a cloth mesh to allow air circulation. We can upgrade to a spacer with R14 insulation value (no one else offered this option)
Guarantee: From a real insurance company rather than the usual we-guarantee-our-work-as-long-as-we stay-in-business
Digging with machines (all other quotes used hand shovels)
Holdback: $500 payable several weeks after completion of the work to ensure everything is done properly
Payment: cheque (not the pervasive no-tax-with-cash)

The price is about the same as W6 but waterproofs an entire wall and skips the window wells. We decided to hire W8 but waited until the next day to tell them. The other quoters could start work the next day (don't they have any projects?) but W8 is booked until mid-April. We're hoping for light April showers.

The Lesson
Getting quotes takes time and is not much fun. We had time because we were home for March Break.

We learned that well-intentioned referrals can easily lead you astray. This lesson could have been costly.

We were ready to hire W1 and then W6. Both would have been mistakes. W1 had the highest prices but did not clearly state what they would do or what material they would use. Misunderstandings waiting to happen. With W6, half the money was going towards unneeded window wells, rather than waterproofing the entire wall.

Credits

photo by ontzy

Podcast

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Warren Buffett's Tough Career Choice: Actuary or Billionaire?

noreply@blogger.com (Promod) — Sat, 14 Mar 2009 11:16:00 +0000

You only have to do a very few things right in your life so long as you don't do too many things wrong. --- Warren Buffett

We're currently listening to The Snowball: Warren Buffett and the Business of Life. We didn't know much about Warren's background. Alice Schroeder weaves an intricate, intriguing portrait. Melt the snowball and you'll find the mind of an actuary wrapped in lots of money.

Warren an Actuary?

Here's an excerpt from Chapter 15: Strike One, page 137. While a student at Columbia in 1951, Warren learned about insurance during an unannounced Saturday visit to GEICO headquarters in Washington, DC where he managed to meet a vice-president.

Warren had even considered actuarial science --- the mathematics of insurance --- as a career. He could have spent decades toiling over tables of mortality statistics, handicapping people's life expectancies. Besides the obvious ways this suited his personality --- which tended toward specialization, collecting, and manipulating numbers; and preferred solitude --- working as a life actuary would have let him spend his time pondering one of his two favourite preoccupations: life expectancy.
However, his other favorite, collecting money, had won out.

I was a life actuary before switching to my current nontraditional role as a marketing actuary. I remain fascinated with life expectancy which deals with two key financial risks

mortality: dying too soon (before your life expectancy with financial obligations remaining)
longevity: living too long (beyond your life expectancy and outliving your savings)

Longevity is often the larger concern. Since we're living longer, we need more money to maintain our lifestyles and to prepare for the extra financial costs of poor health. In turn, accumulating more money means working longer or making riskier investments in hopes of getting higher returns. Neither is appealing.

Warren needn't worry about the financial consequences of life expectancy.

The Excitement of Insurance

While you may think insurance is boring, Warren saw opportunity.

He also learned that insurance companies take their customer's premiums and invest them long before claims are paid. That sounded like getting to use somebody else's money for free, just the kind of idea that appealed to him.

If you feel that insurance companies mint money, consider getting shares. The investment earnings get reflected in the insurance premiums. GEICO sold automobile insurance via direct marketing to preferred risks (mainly government employees). This resulted in a winning combination: lower expenses and lower claims.

GEICO seemed to Warren a no-lose proposition.
That Monday, less than 48 hours after he arrived back in New York, Warren dumped stocks worth three-quarters of his growing portfolio and used the csh to buy 350 shares of GEICO. It was an extraordinary move for the normally cautious young man.

Berkshire Hathaway owns GEICO.

There are sure to be other insights in The Snowball. The book runs 838 pages (960 including the notes and index).

While Warren Buffett could have become an actuary, he instead ended up as billionaire. Such is life.

Links

Does Warren Buffett "Buy Term and Invest the Difference"?
The Four Financial Risks
Alice Schroeder: The Snowball: Warren Buffett and the Business of Life (hardcover or
audiobook)

Podcast (includes excerpts from the audiobook)

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What Does Carrying $1,000 Cash For 30 Days Do To You?

noreply@blogger.com (Promod) — Sun, 08 Mar 2009 11:34:00 +0000

Dogs have no money. Isn't that amazing? They're broke their entire lives. But they get through. You know why dogs have no money? ... No pockets. --- Jerry Seinfeld

Money is energy.

The value of money comes from what it does.

What you give, you get back 10 fold.

So carry lots of cash. I've heard this advice several times.

Who Needs Cash Anymore?

I don't use cash much. Do you? I like having a minimum of $100 and a target of $140-$160. That's more than enough for expenditures that don't take credit cards. Or places like taxis where I don't feel comfortable using plastic. I don't use debit cards, following the advice of Frank Abagnale in Stealing Your Life. You may recall that Leonardo Dicaprio played Frank in the film adaptation of Catch Me If You Can.

Why Not?

In January, pianist-turned-coach Paul Tobey suggested carrying $1,000 for 30 days. That's outside my comfort zone, which is perhaps the point. Your credit card probably gives you a $1,000 of purchasing power. That's not cash. Neither is a $1,000 cheque payable to you.

You might not carry $1,000 cash if

you don't have the money
you're afraid of theft (can't trust others)
you're afraid you'll make impulse purchases (can't trust yourself)

During the Canadian winter, there's little for an insider to do. So I tried this experiment and ran into an immediate snag.

The Problem

My bank keeps cutting my daily cash withdrawal limit. I'm not a bad risk. These reductions are meant as protection from fraudulent activity. Originally $1,000 got cut to $500 and is now down to $300. Collecting $1,000 means visiting on four different days, which is arduous. Even worse, the bank machine spews $20 bills. Who wants to carry 50 (or more) pieces of germ-infested paper? I stopped making withdrawals after two days, which may negate the results.

The Results

Carrying extra cash has three positive advantages.

You feel more successful (much like wearing better clothing)
You feel more prepared for opportunities
You feel more prepared for contingencies

I was in Sudbury recently with my friend Mike (whose preteen daughter apparently reads this blog !?!). He likes paying by credit card but couldn't: someone stole the credit card machine from the taxi. I used cash and had plenty left over. This saved us from walking or hitchhiking to the airport in -35C weather.

Other Emergencies

On September 11, 2001, I was in Halifax, Nova Scotia delivering a presentation while planes were crashing into the World Trade Center. We didn't know until an organizer interrupted just as I finished. At that point, we were all numb. How could both towers collapse? What was going to happen next? There was speculation that the phone systems (land/cellular) and the Internet were going to be shut down to prevent the terrorists from communicating. The power grid could be shut down. The financial system could be shut down to prevent terrorists from transferring money. Very confusing. Very hard to tell what would happen next.

In a daze, I got directions to a bank and withdrew the maximum permitted (probably $500). There were no line ups. As events unfolded, I didn't need this extra cash. What if I did? What if the bank was closed or had run out of money? Cash would have come in handy.

Conclusions

Carrying more cash works. It seems redundant --- like having a 500 horsepower SUV in the city. If you go offroad, you'll be on a paved sidewalk. You don't need the extra speed either. Even so, the potential gives extra confidence and peace of mind. Unlike an SUV, cash is green (at least in America).

Unlike cheques, credit cards or debit cards, cash is universal. If you try this experiment, please share your findings.

Links

Huh? Fraud Protection and your Bank Card
Protecting Against Identity Theft
Paul Tobey seminars (generally four hours and free)

Podcast

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10-8 Leveraging: Are Tax Audits on the Way?

noreply@blogger.com (Promod) — Sun, 01 Mar 2009 11:54:00 +0000

Did they get you to trade

your heroes for ghosts?

Hot ashes for trees?

Hot air for a cool breeze?

--- Pink Floyd, Wish You Were Here

Tax advice and income tax strategies. That's #1 on the list of what the wealthy demand from their trusted financial advisors. You're looking for more aggressive recommendations. That doesn't mean you'll blindly act on every idea. You'll weigh the risks and rewards.

But how can you decide what you want until you know what's available?

Fight or Flight?

Cold comfort for change?
Did you exchange a walk-on part in the war for a lead role in a cage?
--- Pink Floyd, Wish You Were Here

Flight: If you're very risk averse, that's fine. You can hide in the shadows by simply paying more tax than necessary. Even then, the taxman may still seek you out: to thank you for being such a profitable customer.

Fight: Successful tax planning leaves more of what you earn with you --- where it belongs. There's more risk, though. You could get audited. That scares some. Others simply factor that possibility into their risk/reward calculus.

CRA Audits of 10-8 Leveraging (or 10/8, 8/10 and 8-10)?

"The Canada Revenue Agency has recently become aware of these loan arrangements and we are reviewing them to ensure they comply with the Income Tax Act." --- Rebecca Merrett, Communications Manager

Since early December 2008, there's been concern about potential audits of 10-8 insured leveraging strategies by the Canada Revenue Agency (CRA). These strategies --- the last major innovation in insured tax planning --- turbocharge the perennial top 5 insured strategies by adding the advantages of financial leveraging while reducing the risks. And creating tax deductions.

Overview

In brief, you put cash into a special universal life policy. This creates collateral. You borrow at 10% and invest in suitable investments. This makes the loan interest tax-deductible, which drops your after-tax loan cost to 5%-6% (depending on your tax rate). What happens to your collateral? As a reward for borrowing, your collateral grows at 8% in a tax-sheltered environment. My American Express card rebates 0.5% for borrowing at 10.99% (current rate, conditions apply). Other lenders give points or other incentives.

You can invest with a line of credit secured against your house, but with 10-8 leveraging

your loan rate is 10% (meaning larger deductions than borrowing at bank prime rates)
your collateral grows at 8% tax sheltered (house prices can drop)
you get life insurance

What Might Concern CRA?

CRA looks for abuse of the tax system. And they look for revenue. Since tax deductions decrease tax revenue, CRA may have concerns. Here are the three most likely areas:

Is there a reasonable expectation of profit from the investments made?
Is 10% a reasonable loan rate? (Dell's current flyer shows rates of 9.99% to 28.99%)
Does the General Anti-Avoidance Rule (GAAR) apply? (A somewhat arbitrary "smell test")

You can find out more via the links at the bottom of this post.

Noise

There's plenty of noise about what CRA may do.

Running over the same old ground.
What have you found?
The same old fears.
--- Pink Floyd, Wish You Were Here

Those who oppose or don't have access to 10-8 strategies are spreading fear. Those who never understood 10-8, have moved to the sidelines --- where they belong. Those who did their due diligence at the outset remain in the game unfazed.

Time To Panic?

That's your call. Do consider the following facts:

when uncertain, insurers get (expensive) independent outside tax opinions before developing new strategies
10-8 leveraging has been around for most of this decade
most major insurers offer 10-8 strategies: BMO [bought AIG], Industrial Alliance, RBC, Sun, Transamerica
there are no known challenges from CRA
major accounting firms have reviewed and approved 10-8 strategies for their clients
no insurer has discontinued their 10-8 strategies
no major distributor has suspended the marketing of 10-8 strategies

The Worst Case

Suppose CRA finds fault with 10-8 leveraging. What happens? You can expect insurers to defend their positions and accounting firms to defend their clients. The courts would ultimately decide.

In the worst case, the loan interest would not be tax deductible. You would have borrowed at 10% to earn 8% in a tax-sheltered environment. That's not the worst thing in the world. You can unwind the leveraging by repaying the loans by selling the investments made with the borrowed money. You're then left with a "normal" universal life insurance policy. That's not so bad either.

Independent Opinion

Before embarking on any tax strategy, you know enough to get independent advice from professionals with relevant experience. Right? Note the work "relevant". Skills vary. Areas of expertise vary. So do levels of competence, but this is harder to spot unless you're an insider.

I'm biased. The wealthy want aggressive tax strategies to deal with their tax burdens. I was glad to help as the product actuary for one of the first insurers to offer 10-8 leveraging in Canada. Today as a marketing actuary, I spend most of my time helping advisors bring 10-8 leveraging to their clients.

There's fog today but won't the sun rise tomorrow? Won't the wind blow through the trees? Won't hot air give way to a cool breeze? As the old fears disappear. Wish you were here.

Links

Your Trusted Financial Advisor: What You Like/Dislike
Surviving An Audit: Two Lies and Three Tips
The Pros and Cons of Financial Leveraging
"10-8" Leveraging: Creating Tax Deductions
"10-8" Leveraging: Turbocharging the Top 5 Insured Strategies
CRA Comments on a "10/8" Insurance Structure (TaxGen.ca, Dec 3, 2008)
10/8 Strategies on CRA Radar (Advisor.ca, Jan 14, 2009)
Taxes and "10/8" insurance loans (Investment Executive, Feb 2009)
CRA Review of 10/8 Insurance Programs (Advisor.ca, Feb 23, 2009)

Podcast

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Surviving An Audit: Two Lies and Three Tips

noreply@blogger.com (Promod) — Sat, 21 Feb 2009 21:53:00 +0000

The Two Lies of Auditing

1. Auditor (shaking hands) : I'm here to help.

2. Me (faking a smile): I'm glad to see you.

--- my first encounter with an auditor (1988)

Who wants to get audited? That's not many hands. Getting audited is a hassle. It doesn't matter whether this happens to you personally or to your business. Audit's take time and money. And raise your blood pressure. Much like going through airline security even after removing your shoes and belt.

Then, there's fear of criticism (#2 on Napoleon Hill's list). We're decent, honest people making our way through life as best we can. We don't want to be told we've made mistakes. We're not back in school. We don't want to get graded. We don't want to find that we may have been deceiving ourselves.

There's a bright side, though. We can't fix what we don't know is broken. A fresh look from an outside perspective can help us improve.

Three Tips

I've dealt with three types of auditors over the years --- internal, external, governmental --- and survived. Here are three tips:

Be nice
Be brief
Be clear

The same points work with people in general.

Be Nice

Auditors are people and people are generally nice. They're doing their jobs too. They've got too much to do and too little time. Just like you. Be nice to them. Treat them the way you'd want to be treated. Better still, treat them the way they want to be treated. Best of all, being nice is free. But you may need to smile when you'd rather not.

Be Brief

Some people love talking. That's a problem for time management and audits. You can inadvertently make statements that lead to unnecessary scrutiny.

When we went to the US for Valentine's Day, the customs agent asked if we had any food. Having learned from a prior experience, I said we had snacks. He asked if we had any fruit. My wife, Sharmila, said we had two bananas and three pears. He confiscated the pears (!?!) and let us go. I could have mentioned our pet rabbit (considered food by some) and risked a full vehicle search.

Be Clear

Although we communicate from birth, our messages get misunderstood. Attempting to clarify can make matters worse. Putting your answers in writing helps. This takes more time but that's good because you think more. You can get the replies reviewed before you send them. You save the auditor time and create records for future reference.

A favourable audit gives us confidence by confirming what we hoped all along: we're okay. Until next time.

Links

Truth and US Border Guards

Podcast

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The Weirdest Valentine's Day

noreply@blogger.com (Promod) — Sat, 14 Feb 2009 12:14:00 +0000

The Eskimos had fifty-two names for snow because it was important to them: there ought to be as many for love. --- Margaret Atwood

What happens when Valentine's Day follows Friday the 13th?

For some, loss of love, the 4th basic fear identified by Napoleon Hill over 70 years ago. Others say that February 14 eliminated that fear.

In some workshops you're asked to bond by revealing something no one else knows about you. Would you believe a mild-mannered actuary went to a heavy metal and hard rock concert for Valentine's Day?

Stone Deaf

Back in 1988, my Valentine was far away in Thunder Bay. So I spent the evening with Motorhead and Alice Cooper at the Ottawa Civic Centre, a pairing better suited to Halloween.

Motorhead was so loud that I could barely tell what Lemmy was singing. In an ode to where they were, they changed the chorus of Stone Deaf in the USA to Stone Deaf in Ontario. After they finished, we were. Truth in advertising. They could have also changed the title to Tone Deaf in Ontario.

Alice Cooper

Headliner Alice Cooper played enough classics to please the crowd. To my disappointment, he skipped my two favourite albums from the days before iPods and CDs, From The Inside (perspectives from a lunatic asylum, like One Flew Over The Cuckoo's Nest) and Flush The Fashion (an atypical, catchy collection).

Today

Twenty-one years later we're together ... visiting Pittsburgh. Which one's weirder?

Happy Valentine's Day.

Links

Alice Cooper's song list (Alice Cooper eChive)
Loss of Love: The 4th Basic Fear

Your Life Expectancy Exceeds 1 Billion Seconds

noreply@blogger.com (Promod) — Sun, 08 Feb 2009 12:10:00 +0000

There's never enough time, unless you're serving it.

--- Malcolm Forbes

What's a billion? Some say a million million (1,000,000,000,000 or 1 followed by 12 zeroes) but we'll use 1,000 million (1,000,000,000 or 1 followed by "only" 9 zeroes). Either way, that's a big number.

As a kid, I marvelled at McDonalds, which showed how many billion of burgers they served. How could that be possible? When the signs changed to "Billions and Billions Served", I lost interest.

Not True

How can we visualize a billion? An advisor pulled these tidbits from a recent webcast from a mutual fund company

a billion seconds ago: The Beatles
a billion minutes ago: Jesus Christ
a billion hours ago: the stone age
a billion days ago: before the first two-leggers
a billion dollars ago: about 8 hours of US government spending

What's their point? $1,000,000,000 isn't much? Not true for most of us. It's easy to spend/lose a billion dollars? Hardly inspiring.

A billion here and a billion there, and soon you're talking about real money.
--- Everett Dirksen

The original source is apparently an advertising agency. I can't track them down. Strange. You'd think the creators would want credit. I wanted to see the visuals they used. Instead, I found inaccuracies. Repeated and repeated. But still wrong.

Corrected

Here is an updated list using 2009 as the reference:

1 billion seconds: 31.7 years (1977 --- well after the breakup of The Beatles)
1 billion minutes: 1,901 years (108 --- well after the death of Jesus)
1 billion hours: 114,080 years (even before the invention of plasma TVs)

If you're not sure how to do these calculations, use the Google calculator. Just type the conversion you want as your search string. For example, convert 1 billion seconds to years. Yes, it is that simple.

Seconds

No one who is young is ever going to be old.
--- John Steinbeck

Did you know that a billion seconds is so short?

If you're 32, you're already a billionaire in seconds lived. Normal life expectancy easily exceeds two billion seconds. Measuring our remaining lifetimes in seconds shows how wealthy we are. We have so much time to invest. Or squander.

Links

Billions and Billions (snopes.com)
What is $1 billion (I-69 Indiana; source of the graphic)
Useless dates related to your birthday (timeanddate.com)

Podcast

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PersonalBrain 5: Data to Information to Wisdom

noreply@blogger.com (Promod) — Sun, 01 Feb 2009 12:08:00 +0000

If you didn't have so much stuff, you wouldn't need a house. You could just walk around all the time. --- George Carlin

You can't have everything. Where would you put it? --- Stephen Wright

In the digital world, we can collect more and more without taking up much physical space.

We collect so much stuff we can digitize. Where do we put it? On ever-larger hard disks. How do we find items? With desktop search tools like Google Desktop Search. Here's the big question: how do we organize the data in ways with meaning to us.

Example
Say you saw or read The Boy In The Striped Pyjamas by Irish writer John Boyne and want to store these related items

customer book reviews from Amazon.com
author video interview from YouTube
the movie poster from Impawards
movie reviews at the Internet Movie Database
criticism of Disney's advertising

Where do you put them on your computer? Under the author? Under categories (book review under Books, movie links under Movie)? Whatever you decide, will you remember? Will you be consistent?

Suppose you see a connection between Striped Pyjamas and

The Diary of Anne Frank (film or book), since both show a child's perspective from World War II
films Defiance and The Curious Case of Benjamin Button, since both deal with WW II
the film Australia, which also shows the plight of racially-segregated children
the film The Reader because of Auschwitz

You'll probably find other interesting items along the way. The film Australia can connect to Rabbit-Proof Fence (also deals with children forcibly taken away in that country), which connects to Peter Gabriel, who composed the soundtrack. In turn, Peter can be connected to the musical group Genesis to which he belonged or to Witness which targets human rights violations.

You quickly end up with an messy, scattered collection.

We see different connections. We want to find items we saw earlier, but can't easily find again. What can we do?

PersonalBrain 5
Imagine searching for years for something that might not exist. Then finding it. That's PersonalBrain, a hierarchy-free database. You put data (called "thoughts") anywhere you want and create links to show the relationships with other thoughts. You can add or change links later. You can search too. Your collection (called a "brain") can include photos and other attachments.

I started testing version 4.5, then became a beta tester for v5 which has now been released. Version 5 is definitely better. I especially like the easier way items can be tagged.

Benefits
You get peace of mind when you know you can find what you want when you want. I like the following

fast and easy to use (after watching an online tutorial)
copying web pages (besides saving the link, I paste the page content and then highlight selected lines for easy future reference even if the source webpage disappears)
portable: my files were on a memory stick but are now on an encrypted external hard drive which I move among computers (you install PersonalBrain on the portable device)
you can move files into your "brain"
uses the same file structure as your operating system, which allows you to use other search tools like Google Desktop Search
ongoing updates (every few weeks)
excellent online tutorials and live webinars
multiple uses: file organization, brainstorming or mindmapping, capturing web snippets, client relationship management

There's lots more that I've yet to explore. I've got several "brains": general, contacts, projects and writing. PersonalBrain makes a great repository for quotations but I put mine online at Spark Insight so you can use them too.

The Main Drawback
These days, you can find many powerful applications that are free or low cost. PersonalBrain comes in three editions

Free ($0): may work well for simple needs
Core ($150 US): the version most users would likely want
Pro ($250 US): even lets you publish your "brains" online

You can only buy online from the company and they don't have sales. Luckily, you can test-drive the Pro version for free. After 30 days, you're downgraded to the Free level. You don't lose anything you've done, but are restricted in what you can do. I got hooked fast and bought Pro.

Alternatives
I experimented with other tools

Evernote: interesting online tool but raises concerns about confidentiality, speed and access through corporate firewalls
Clipmarks: online tool captures web snippets (too limited)
MindJet MindManager (too specialized and for other purposes)
storing files in Windows folders and locating items with desktop searches (too hierarchical)

Summary
PersonalBrain is a weird name. Try using it in a sentence and see if anyone can understand you. Visual Brain or Virtual Brain are more descriptive. There's plenty more to explore. You know how most computer-based presentations follow a linear pattern? Well, PersonalBrain lets you select relevant material instantly. Think of the impact.

What a way to organize data into information. As you add more and create links, you'll see patterns you missed before and gain wisdom. Highly recommended.

Links

PersonalBrain website
PersonalBrain Helps You Map Your Thoughts (AppScout)
Top 12 PersonalBrain Uses
Just Shy of Artificial Intelligence (PC World)
YouTube Video Review (Best Tool For The Job)

Podcast

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Outliers: Mastery plus Opportunity Trumps Talent

noreply@blogger.com (Promod) — Sun, 25 Jan 2009 12:30:00 +0000

The question is not at what point you're capable of doing your job. The question is at what point you've mastered it.
--- Malcolm Gladwell

If you want to become wealthy instantly with no effort and no-money-down, stick with lottery tickets. Success takes time.

We saw the need to persevere to become the best in the world in The Dip by Seth Godin. In Outliers, Malcolm Gladwell confirms the importance of mastery and adds other elements --- some beyond our control.

Why do a few succeed while most fail? Malcolm explains these statistical "deviants" benefit from their ancestry, their culture and where they live. To this fertile soil add sufficient ability, opportunity and 10,000 hours of deliberate practice.

10,000 Hours!?!

It takes 10 years of extensive practice to excel in anything.
--- Dr. Herbert Simon, Nobel laureate

How do you accumulate 10,000 hours? Over 10 years at three hours a day or 20 hours a week. That's a long time but it's achievable, if you

pick something you love
meet a threshold of ability (not everyone has the potential to sing, act or kick a football)
practice and practice and practice at increasingly higher levels

Notice that we don't need massive innate talent to start. We just need "enough". We get to the finish line through continuous improvement (what Toyota calls kaizen).

Examples

The Beatles: playing 8 hours a night seven nights a week for years in Hamburg
Bill Gates: early unfettered access to time-sharing computers
Dustin Hoffman: a 10 year struggle in theatre and film before The Graduate
you or people you know?

While working full-time, I devoted 10 years of study (1984-1994) to emerge as a full-fledged actuary with the requisite technical skills. Then came a decade (1995-2005) of mastering corporate skills (managing staff, leading interdepartmental teams, communicating clearly, planning, scheduling, budgeting, resolving conflicts,...). I'm now working outside the puzzle palace, which requires mastery of people skills such as building rapport, listening and problem solving. Each phase had challenges and risks. And rewards.

You or people you know may have paid their dues in similar ways. Paying dues isn't enough.

Opportunity

The world is not fair. It’s always going to provide more opportunities for some than others. --- Malcolm Gladwell

No matter how prepared and driven you are, you need opportunity too. We might be in the wrong place or at the wrong time. Steve Jobs got computer parts from Bill Packard and summer jobs at HP. Do you think that made a difference?

My boss left in 1995. This created a huge, high-profile vacancy --- well beyond my capacity as a brand-new actuary. Fortunately, management gave me this opportunity and coaching. Would I have reported to a Senior Vice President so early otherwise? No way.

What To Expect
If you've read Blink or The Tipping Point, you'll find that Malcolm uses a similar writing style in Outliers. Each book is very entertaining (especially the audiobooks, which he narrates) and shares ideas for us to think about.

Links

Malcolm Gladwell's website (gladwell.com)
Outliers: The Story of Success (amazon.com)
Outliers: An Issue of Semantics (whakate.com)
How To Be Good (Thicken My Wallet); also discusses Talent Is Overrated by Geoff Colvin, senior editor of Fortune
Wise Guy (The Independent UK); refers to Malcolm's Canadian upbringing
10,000 Hours (Seth Godin)
Peak Performance: Why Records Fail (New York Times)

Podcast Version

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