Focus Your Energy

Concentrate all your energies on the task at hand. At some point one must determine what tasks to do and what order to do them in. This is where discernment comes in. Making a little effort to decide what to do and then doing it will matter a lot.

Knowledge + Organization = Power

Knowledge, general and unorganized is not power, only potential power. – Thus Hill.

I like to think of science. There is pure science and applied science. Applied science takes the general knowledge of science and applies it to inventions, drugs, and what have you. It uses knowledge to make practical things.

It seems that this process is what Hill is talking about. Before you can apply your knowledge to solving the problems in your life, you must first have a pool of knowledge to draw from.

Master Blogger on Personal Finance Blogging

Here are the submission guidelines for Get Rich Slowly. This is one of the top blogs on personal finance, #4 on Wisebread’s top 100.

These guidelines form an interesting essay on the art of writing on financial issues. He stresses original writing and thinking and having an original point of view. He stated he does not necessarily want new ideas but new slants on old ideas. A lot of this is great wisdom but I do not think this is for everybody.

The shelves in the local library and the ones in the local book stores fairly groan under the weight of business/personal finance/development literature. Even I am overwhelmed by them all – and I’m a CPA! When I read a book or a blog, while I do want good writing, when it comes to this area, I want the important information first. – And hopefully as succinctly as possible. How about you?

Frankly, too much writing gets in my way. As you can tell, I admire Rich Dad, Poor Dad series but how I wish Robert Kiyosaki was less creative! Just give me the info, dammit!

Also, different blogs have different focus’ than that one does. This one, for instance, covers selected master writers or doers together with my thoughts on them. Most entries are short. They are not meant to be a substitute for those books but an encouragement to read them. In addition, my focus is broader than just personal finance. On the one hand, this blog goes into business knowledge in the corporate environment; on the other it goes into personal development.

There is much to admire in this guide. I’d suggest that all finance writers ought to read it. But in the end, it is a guide not the 10 Commandments. We all have to follow our own muse.

Teen Driving Down

Percent of teens with drivers licenses.

	Age 17	Age 19
1978	75%	90%
2008	50%	77%

Source: Advertising Age via The Motley Fool.

Less teens are driving now than before. What are reasons for this and what are the implications?

Why: internet means folks can communicate and shop without having to travel. In large cities, teens can text and play games on their cell phones while using public transportation.

Implications: Auto and retail stores in trouble – long term.

Footnote: The bad economy will explain declining auto sales among teens. It does not explain declining driver licenses.

Kids' Credit Cards

Another of Dave's big no-no's. Giving children credit cards does not teach them to be responsible with their money. It does the opposite.

What Price To Charge?

Marketing people say that pricing of products and services is part of the sales process. “Set prices to maximize sales,” they say. Accountants look at pricing this way: “Set prices to cover costs + profit.”

 

Prices can be set too low. The higher the price, the higher the perceived value of the product or service becomes. If the price is too high, though, then it becomes “too expensive”.

 

3 Considerations:

 

• Integrate prices with rest of the elements of the marketing strategy
• Relate prices to needs and perceptions of target market’s members
• Modify prices to match changing competitive environments.

 

So, pricing is an art. The accountant still says, “do not price below your cost.”

Bill Gates on Success

As we look ahead to the next century, leaders will be those who empower others.

- Bill Gates

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Photo (cc) Kjetil Ree.

Bad Times Can Give You an Edge

- By selling harder. Selling in hard times gives the person who works harder and smarter an edge because the toughness of things weed out competition. "If you are in business, you need to learn how to sell."

I spoke today to the manager of a cab company. He told me that he's never seen times as tough as they are right now. I told him that I've experienced cab drivers who are not nice to the customers. He said some were like that. I did not have the heart to tell him that I think almost all the drivers I've experienced treat people badly.

I believe that the key to success in this business in tough times is to be treat customers nicely - and ask them to repeat the experience.

Summary of the Laws of Success

Here’s a summary of Napoleon Hill’s Laws of Success:

1. A definite chief aim
2. Self confidence
3. Habit of saving
4. Initiative and leadership
5. Imagination
6. Enthusiasm
7. Self-control
8. The Habit of doing more than paid for
9. Pleasing personality
10. Accurate thinking
11. Concentration
12. Co-operation
13. Profiting by failure
14. Tolerance
15. Practicing the golden rule

Are these laws all there is? I just cannot help but think of those folks on American Idol who seem to be so determined to become singing stars but cannot sing. At some point, being smart in the selection of one’s work becomes a necessity. On the other hand, I’ve spent years of my life on jobs that were “safe” but I did not like while avoiding those that I wanted because they were not safe. There has to be a trade-off between following one’s dreams and monetizing them.

All on One Page

The Simple Dollar is another fine blog. I like that word “Simple”. The author, Trent Hamm, wrote a small book that summarizes the field of personal finance as succinctly as possible. He’s giving it away for free.

His upcoming book, The Simple Dollar: How One Man Wiped Out His Debts and Achieved the Life of His Dreams, is coming out later this month.

Sample post: 7 tips on getting things done.

I like his blog and I like this book! Visit it and tell him Jack sent you.

Illustration cc Trent Hamm.

Religion in the Workplace

The law does not always follow common sense but let’s start with common sense, anyway. People ought to try to avoid being “in your face” with their religion. Apart from legal issues, it is just not effective. Common sense kinds of things, like posting a favorite Bible verse on the wall of one’s own office or cubicle is allowed both common sense-wise and legally.

Cliff Ennico, of Townhall Finance wrote,

Generally, employers are required by law to make "reasonable accommodations" to employees with religious needs, just as they are required to do for the disabled. Title VII of the federal Civil Rights Act of 1964, among other laws, offers broad protections to religious-minded people.

Extreme views about separation out of religion are just as bad as extreme views about turning workplaces into de-facto semi-churches. In a controversy, both sides need to chill.

Leave a Will

Dave says that over 70% of Americans die without a will. Personally, I think that if one has no assets but life insurance, then a will is not necessary. If one has children, then a will to provide for their upbringing is still a good idea.

While all the professionals in the whole universe will hate me for saying this, I just not think paying a lawyer a whole lot of money for a will when assets are minimal and the children are grown is needed. But yes, except for that, most people do need a will.

About That Deficit

I recall a Kiwanis Club Meeting around 1994 where the local Congressman was talking about cutting the deficit but people were confused as to why the national debt was still going up.

The reason is that a non-profit organization by definition does not report profits or losses. Instead they report surpluses and deficits.

That’s why management may report cutting its deficit while still increasing its debt. Cutting the deficit just means that the organization is loosing less money than before but it is still loosing money. In fact, an organization may actually report a surplus while still increasing its debt. It all depends on whether it uses the surplus to pay down debt or use it for something else.

Cicero on Success

Genius is fostered by industry.

- Cicero

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Oil and Gas Prices Going Up

They discuss the general trend of oil prices going up. This is before the great BP oil spill in the Gulf. Obama has shut down other off-shore oil rigs.

With less supply of oil, this means that prices will go up, even if only because we have to replace the domestic output with foreign sources. This is in addition to the general upward trend in oil prices.

Henry Ford on Education

I don't agree with Napoleon Hill's view on the role of education in achieving success in life.

He tells the story about Henry Ford suing the Chicago Tribune for calling him "an ignoramus". At the trial, the Trib's lawyer tried to demonstrate Ford's lack of education by asking him a bunch of trivia questions which Ford parried. Then the witness countered by telling the lawyer that on his desk lay a row of buttons which he could use to summon experts who could provide the answers to all these questions and more.

The moral that Hill teaches from this story is that

Education - let us not forget this - consists of the power with which to get everything one needs when he needs it, without violating the rights of his fellow man.

Hill is on much firmer ground when he looks at the case from the lawyer's point of view.

The successful lawyer is not one who has memorized the greatest of principles of law. On the contrary, the successful lawyer is one who knows where to find a principle of law, plus a variety of opinions supporting the principal which fit the immediate needs of a given case.

My own opinion: being an expert does not necessarily mean knowing a lot of facts (- that forms the basis of expertise!) is is knowing how to find out the facts that one does not know in a timely and efficient manner.

Lessons from the Oil Spill

Last April 20 the Deepwater Horizon drilling rig exploded, killing 11 crew members. Two days later it sank while oil gushed out of the broken piping below. This was an offshore drilling rig 50 miles south of Louisiana. Three companies were involved: BP, Halliburton, and a company called Transocean. The three companies are blaming the others for the disaster.

As the blame-shirking and the finger-pointing commence, one thing is clear. There was no unity of command, no central management of the project. As the different companies say the others were responsible, it becomes clear that no one was in charge. This was the first management failure.

The second is implied by the two day time lag between the explosion and the leaking. Why was there no immediate response team in place? Why was there no disaster plan? It appears there was no contingency planning done at all?

Unforeseen disasters happen to any project, no matter how small. Proper management structure and contingency planning can contain unforeseen disasters.

More info at The New York Times.

Basic Insurance

Some insurance you just cannot do without. Car insurance, for example. The law requires that you have it. Here are some other kinds of insurance:

Life Insurance. Purchase only insurance, no saving plan features, only insurance. Some riders may make sense but buy only those riders that actually affect the insurance. For savings and investments, life insurance is just about the worst vehicle there is.

Disability Insurance. Did you know that you’re more likely to get disabled than to die? Dave recommends that you buy enough insurance to replace 50% to 70% of your income.

Health Insurance. Dave’s book was written before Obamacare, so I’ll say this about health insurance. While the payments may go up, the quality of the insurance policy may go up, too. – At least what the Democrats think goes into a “quality” insurance policy. You may agree or disagree with them on what that is. The newspapers reported monthly premiums going to $500 per family. You doctor may not participate in some of these new government programs, so getting the insurance does not necessarily mean that you will get treated. You may have to look around and wait for doctors who will treat you.

Long Term Care. When your age gets to the late 50’s, your premiums goes way up. Best to get this kind of insurance in late 40’s to early 50’s. Dave recommends it if you’re over 60. My opinion is that over 60 know that the insurance companies are looking at the same cost calculations that you are and have priced their policies accordingly.

Homeowner/Renter Insurance. This posts addresses personal property.

I’ve seen a number of yard sales as old people try to unload their accumulated belongings. The plain fact is that for most household items, very little value will ever be recovered from them. Also, a lot of the junk you have you can do without. Sorry, but that’s the facts. Dave does not address this but I believe that you should just determine what you absolutely have to have in case your home/apartment building burns down and buy enough insurance to get that.

Note that real estate is another matter

Exchange Rates

How many pesos can you buy with one dollar? This kind of question illustrates the concept of exchange rates.

The more you can buy, (dollars appreciated) the more import prices fall and export prices rise. That means that foreign imports are more affordable to domestic purchasers and our products are less affordable abroad.

On the other hand, when the dollar depreciates, the reverse happens. So, it follows that the best way to help our foreign trade is to devalue the dollar to the lowest, possible, right? Wrong. The less value the dollar has, the more dollars it takes to buy things. This is also known as inflation.

In the USA, the dollar’s exchange rate floats on the open market. I once had to do bank reconciliations of amounts held in foreign banks in foreign denominations and compare to transfers to and from U.S. banks in dollars. It was a headache! The exchange rate fluctuates.

The concept of foreign exchange is critical in international business.

Hamilton on Success

Men give me credit for genius but all the genius I have lies in this: When I have a subject in mind I study it profoundly. Day and night it is before me. The result is what some people call the fruits of genius, whereas it is in reality the fruits of study and labor.

- Alexander Hamilton

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