Rise & Shine

Do you want to immediately improve your daily productivity?  Here is a surefire way to do it: wake up earlier!

By waking up at least two hours before you are required to be at work, you will increase your productivity.  Here is a list of things you can get accomplished while everyone else is still snuggled in bed:


Get in a good workout before work to provide a great energy boost.  If you get in the habit of exercising first thing in the morning, you will increase your metabolism which will help keep your weight under control.  You will feel, look, and perform better the rest of the day.


Read Scripture  

Set aside some quiet devotional time for reading scripture and meditation.  Get yourself in a positive frame of mind.  Devotional time can help you equip yourself mentally and spiritually to make good things happen for yourself throughout the day.

business plannerMap Out Your Day

Take a few minutes to jot down all the things you want to accomplish throughout the day, focusing on completing the most distasteful item first.  By writing down your list of things to do and checking them off as you complete them, you increase the odds you will get them done.

Citrus-Fit-Five-Healthy-BreakfastEat a Hearty Breakfast

Eat a breakfast complete with protein, whole grains, fruits & vegetables, and plenty of water.  By fueling up properly, you will feel the difference.  Don’t skip out on breakfast, it is too important to miss.

Everyone has the same 24 hours in the day to get things done.  Successful people tend to get the most out their day by waking up at least two hours before work.  Try it out for a month, and see if you don’t feel and perform better.

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You Are What You Read

A few blogs ago I mentioned I recently finished Tom Corley’s book, “Rich Habits: The Daily Success Habits of Wealthy Individuals.” One of the rich habits Corley highlights is the daily reading of books and material pertaining to one’s profession. Turns out 88% of the wealthy people Corley interviewed read at least 30 minutes of professional or personal growth material every day, whereas only 2% of the poor folks he interviewed read that much.

When I first started in the financial industry over two decades ago, mutual fund and insurance salespeople used to call on me to sell their particular products. Many times they would show up with a sleeve of golf balls or a T-shirt as a way to turn their cold call into a warm call.  Not being a golfer and not really needing another T-shirt, I would tell them to stow the promo items, but if they wanted to give me something I could use, bring books about finance.  Some of them obliged, and I read several excellent professional books that way.

IImage found many of my first prospects and clients knew more about investing than I did. To remedy my relative lack of experience, I set a goal to read at least one book per month about my profession my first two years in the business. I read books about stocks, economics, personal finance, insurance, estate planning, mutual funds, real estate, and how to run a small business.  In addition to learning things I didn’t know, I was also gaining professional confidence. While many of the people I talked with had more years of investing under their belt, I don’t think anyone had read 25 finance books in the past two years like I had.  What really surprised me however, was how many financial professionals, with several more years in the industry, hadn’t read 25 professional books in their entire careers!

There are two ways to get smart: 1) by making mistakes; or 2) by reading books by people who already made the mistakes. The latter is much less expensive.

If you aren’t satisfied with where you are professionally, then make a plan to improve your situation, and one of the easiest ways to begin improving is to read at least one professional development book a month.

The Fed Turns 100 Today: Don’t Break out the Party Hats

logoCentenialThe Federal Reserve (the “Fed”) hit its 100th birthday today.  On December 23, 1913, in response to the Knickerbocker Crisis, that saw stock prices fall almost 50% and numerous runs on banks and trust companies, President Woodrow Wilson signed the Federal Reserve Act into law.  The purpose of the Fed was to prevent bank failures and future booms and busts in the business cycle.  Unfortunately, history has shown the Fed to have a pretty dismal track record in achieving its intended purposes.

Since the Fed’s creation a century ago, the United States has experienced financial recessions and depressions that have been longer in duration and more severe in their pain than anything the nation experienced before 1913. Prior to the Fed, most recessions didn’t last more than a year; however, the Great Depression lasted well over a decade, “stagflation” gripped the nation from 1974-1982, and to date we still haven’t recovered fully from the financial crisis of 2008.  The Fed certainly hasn’t experienced a reduction of bank failures during its watch, and during its tenure the purchasing power of the U.S. dollar has declined nearly 95%.

feddcIf failing at its original purposes wasn’t enough, the Federal Reserve Reform Act of 1977 granted the Fed three additional opportunities to come up short: maximize employment, stabilize prices, and moderate long-term interest rates.  The current debate in Congress for continuing federal unemployment benefits demonstrates its inability to maximize employment, and the price of homes in America have been anything but stable over the last 15 years. Retired folks, who depend on investment income, are currently experiencing some of the lowest bond interest rates in history, effectively requiring them to invest in riskier investments or spend down their principal.

In spite of its expressed purposes, the Fed has caused more financial catastrophes than it has prevented or fixed.  Whereas the U.S. Constitution grants Congress the power to coin money and regulate its value (Article I, Section 8) , there is no constitutional authority granted to the Fed, even though creating money out of thin air is essentially what the Fed has been doing for years.

Although the Federal Reserve turns 100 today, there is nothing to celebrate.  This rogue institution has hurt more Americans than it has assisted, and it is time we consider returning the authority to control America’s money back to Congress where the authority rightfully belongs.

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Judging Greedy People

greedyPersonSeveral times a week I come home and tell Linda I have the world’s greatest job because I spend my days talking to the world’s greatest people.  I only wish the journalists who feed us endless stories of greed and selfishness could meet my clients who have hearts at least as large as their wallets.  More than a few of my clients give away more of their money than they spend on themselves, and they make personal sacrifices so that they can.

In my experience, judging others for being selfish and greedy is a fool’s errand.  First of all, it is quite possible those being judged may very well be generous; they just don’t go tooting their horns about it.  The truly charitable don’t scream from mountaintops to let the world know they are generous.  Instead, they normally whisper from inside of wells so others might never see.

Secondly, people who look wealthy may in fact be one payroll distribution away from bankruptcy.  At least once a month I meet with a business owner who once had a high income or notable net worth but today is faced with the prospect of losing all or most of their financial security.  Many of these folks are extremely generous, and the thought of not having enough to give is a real blow to their sense of purpose.

widow-offeringFinally,  “judge, not lest ye be judged.”  In America, there are very few  who can sit on the throne of judgment over another.  I have been in the money advice business for over 20 years, and I have heard hundreds of people, who drive nice cars, subscribe to cable television,  and vacation in warm locations during winter, who bad mouth those who drive nicer cars, have better cable packages, or who own a 2nd home in warm places, ridiculing them for being “selfish.”  When Jesus honored the poor widow for her offering of two pennies, He was explaining that giving is supposed to be sacrificial.  If we removed the planks from our own eyes we might be able to see opportunities for charity more clearly.

Money is neither moral nor immoral; it is amoral.  Those who have it aren’t necessarily evil, and those who don’t aren’t necessarily saints.  For the good of our own souls, when it comes to judging others on charity, we should keep our focus on ourselves.

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How Much Car Can I afford?

My usual answer:

“Whatever you can afford to buy with cash and still have 3-6 months of living expenses in an emergency fund.”

Cars are notorious for losing value.  In fact, brand new cars are one of the worst investments you can make, losing on average between 50% and 60% of their value in the first four years!

car 1Annually, I see 3 or 4 couples who are struggling financially because they are trying to make car payments on one or more vehicles that are worth less than they owe.  It is almost always a bad idea to take out a car loan, even if you are charged extremely low interest.  Unless you already have the money saved making at least some interest, and the car dealer is unwilling to give you a discount for cash on the barrel, you should stay away from buying a car on time.  If hard financial times hit (e.g., you lose your job, get hurt, incur an unplanned expense, etc.), you don’t want to be saddled with a financial obligation greater than the value of your car(s).

If you only have $3,000 for a down payment on a car, and you were prepared to pay $400.00/mo. anyway, then I recommend buying a $3000 car and saving $400/mo for two years. At the end of the two years, sell your $3000 car for $2500 and buy a nicer car for $12,100 with cash ($2500 + (24 months X $400)).  Drive the $12,100 car for two years, saving $400/mo like before, and then sell it; this time for $8,500 (remember, newer cars depreciate more). With the $9,600 you saved over two years, you can now afford a car that costs $18,100.  Do this every two years, and in about six years you will be driving relatively nice vehicles, and you won’t be saddled with car payments. Should hard times hit, you can use the $400/mo for living expenses, and you can wait until things get better to upgrade your vehicle.

messyIf you have kids, the last thing in the world you want to do is spend a lot of money on a new car.  Even the most anal parents are going to find the back seat filled with cheerios, juice box stains, and caked mud from young athletes crawling in after sports practice.  Even if your own kids are good about keeping your car clean, the other kids in the neighborhood car pool aren’t going to be quite so conscientious.  Lest you become the Nazi soccer mom or are addicted to mood altering drugs, I encourage you to buy a used but reliable car you won’t stress over if your kid spills his Sippy cup or vomits in the back seat.

In America, our wheels are a status symbol, but there is nothing impressive about being stressed out owning cars we can’t afford.  If peace of mind and achieving financial security is important, then paying for vehicles with cash is the only way to go.

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Data Mining and Medical Privacy

Concerned about your medical privacy?  Then you may want to stop using your credit card or shopping online.  Turns out the ads you click, the size of clothes you buy online, and the fast food restaurants where you pay with a credit card  can create a health profile that is extremely helpful in assisting marketing agencies determine how healthy (or unhealthy) you are.

hipaa11389187While the Health Insurance Portability and Accountability Act (HIPAA) compels your doctor, pharmacist, insurance agent, and local hospital to go to great lengths to protect the privacy of your medical records, it does nothing to protect you from yourself. Whenever you search the internet or use your credit card, information about you is being stored, compiled, and made available to marketing organizations.

The make and model of the car you finance, the types of clothes you purchase online, and the kinds of restaurants you “Like” on Facebook, when run through a computer algorithm, paint a fairly accurate picture of your health.  This information is extremely helpful to drug research companies and others, who are willing to pay a handsome sum to target people who fit their market profile.

Although the Federal Trade Commission receives hundreds of complaints from citizens upset at being targeted by telemarketing firms who surprisingly know quite bit about their health, there really isn’t much the government can do.  While people are quick to demand that others protect their medical privacy, they often don’t realize that in today’s marketplace of credit cards, online shopping, and social media, they are often the biggest violators of their own medical information security.

telem1This is certainly becoming a brave new world.  We should all be a little more careful about what we buy with credit cards or purchase online, lest we end up telling truths about ourselves we really don’t want telemarketers to know.

(For more on data mining and your medical privacy, see: “Data Mining to Recruit Sick People”).

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Getting Through Life’s Struggles by Helping Others Get Through Theirs

I am often amazed at the number of trials and tribulations people face on a daily basis.  While it appears some live charmed lives, I have come to believe that every one of us is dealing with a burden of some sort; many are dealing with health issues, others financial woes and some are struggling with getting their adult children to act like, well, adults.  Believing some are blessed with supernatural protection from life’s struggles is probably faulty thinking.  A better explanation is some are just better at dealing with adversity.

seals 1One of the best ways individuals can handle the curve balls life throws us is to practice the art of meeting the legitimate needs of others.  In his book, Willpower: Rediscovering the Greatest Human Strength, psychologist Roy F. Baumeister, recounts how many Navy SEAL candidates who make it through their grueling Hell Week training (five and a half days of inhumane physical exhaustion, hypothermia, mental stress, sand chafing, blisters, and food and sleep deprivation) are not necessarily the ones with the biggest muscles; instead, they tend to be the ones with the biggest hearts.  In many classes 75% of the sailors who begin SEAL training don’t make it through Hell Week, but those who do often are the ones who put aside their own pain and fear and look for opportunities to help a buddy who is struggling.

There is something paradoxical about human suffering; those who try to alleviate it in others are oftentimes better able to endure it themselves.  In Luke 17:33, Jesus tells us: “Whoever tries to keep his life will lose it, and whoever loses his life will preserve it.”

Helping-othersKnowing that all of us are going to face life’s struggles, and that helping others get through their adversity equips us to get through our own, doesn’t it seem rational that we should make a practice of looking for ways to lighten each other’s loads?

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What Are Bitcoins?

ImageBitcoins have been in the news quite a bit lately, and I suspect we are going to hear a lot more as more merchants begin accepting them.  Bitcoins are digital currency. If you think of a $100.00 bill as being a compact disc of recorded music, a Bitcoin is like an MP3 file.  Bitcoins are gaining popularity throughout the world because they can be exchanged peer-to-peer, transactions in Bitcoins are anonymous, and the transaction fees involved are extremely low compared to credit card and currency exchange fees.

There are currently 21 million Bitcoins, but only 11 million are currently in circulation.  New Bitcoins are created through “mining,” a complex series of mathematical computations, the idea being that introducing new Bitcoins will be as difficult as “mining” for more gold. Like gold, Bitcoins can’t just be created out of thin air in the same way government fiat money can just be printed (e.g., the U.S. dollar). In theory, mining will prevent the risk of Bitcoin inflation like we have seen with other government currencies.

Like any currency, Bitcoins only hold as much value as consensus allows.  As of this writing, 1 Bitcoin (BTC) = $674.8, but its value is extremely volatile, oftentimes swinging 20-30%.  Like currency trading in Japanese yen or the Iraqi dinar, there is money to be made (and lost) in Bitcoin speculation.

Nobody owns or centrally controls the Bitcoin network.  While developers are constantly making changes to the software, they can’t force a change in the Bitcoin protocol because users are free to choose whatever software or version they use.  Because the whole system falls apart if software and procedures aren’t compatible, there are huge incentives for users and developers to ensure ongoing consensus.

The number of businesses and individuals using Bitcoins is currently small but growing rapidly. While most Bitcoin users are web-based companies, brick and mortar businesses are starting to use them as well. Payments in Bitcoins are easier to transact than with a debit or credit card, and they can be received without a merchant account.  Both parties in the transaction have what are known as “wallets” where Bitcoins are electronically stored.  When a transaction takes place, the buyer transfers Bitcoins from his wallet to the seller’s wallet by typing in the seller’s wallet’s address, or by scanning a QR code.

Bitcoins work a lot like cash in that they are difficult (though not impossible) to trace. That is one reason drug dealers and other criminals are learning to conduct business in Bitcoins.  No personal information is tied to a Bitcoin transaction.  In countries without political freedoms, Bitcoins are becoming a way for oppressed citizens to fund political candidates and/or movements without being identified.

There are some concerns about Bitcoins.  Currently, they are not readily accepted.  It will be some time before their use is widespread enough to exploit the network effect.  Secondly, their value remains volatile.  Bitcoins sitting in your electronic wallet might be making or losing you money, much like owning the Mexican Peso did during the 1990’s.  Finally, as Bitcoins become more popular, we can expect governments to step in to regulate and tax them.

The internet has brought the whole world closer together, and Bitcoins are one way for citizens of the world to send and receive payments electronically across jurisdictions conveniently, securely and anonymously.  It remains to be seen whether Bitcoins will live up to their hype; however, like any new technology, I suspect this is going to be exciting.


Capitalism is the Best Economic System

One of the blessings of living in America is our commitment to a free press.  With the advent of the internet and the proliferation of social media, humans have never before enjoyed the ability to communicate with so many at such low cost.  Unfortunately, a byproduct of a free press is even wrong people have the right to be heard.

Pope 1I get frustrated when I read accounts about how capitalism has failed.  Even Pope Francis recently labeled capitalism as the “new tyranny,” going so far as to suggest that capitalism kills.  The Pope is not alone in his vilification of free markets.  Not a day goes by we don’t hear how corporate conglomerates are robbing the poor, or Wall Street bankers have a boot on the necks of the poor and middle class.  This kind of talk is pure rubbish.  The fact that America’s poor can grow fat on easily accessible and safe food, and most Americans occupy homes with twice the square footage of the average Japanese domicile, it is rather difficult to take calls for reigning in capitalism very seriously.

As an armchair economist, I have been studying different types of economic systems for years, and I have come to the conclusion that free markets offer mankind the most efficient, if not the most moral, economic outcomes.  I make this claim for the following three reasons:

handshakeFirst of all, capitalism is predicated on the requirement that in order to achieve economic success, one must be “others” focused.  Contrary to popular opinion, it is impossible to grow wealthy in a free market economy if you don’t produce goods or services that other’s demand.  This is in contrast to how individuals grow wealthy in a centrally planned economy, where the rich use the coercive powers of government to create monopolies and/or force citizens to buy their goods or services.

 Secondly, capitalism is based on merit: those who are good at giving citizens what they need or want are the ones who win the highest economic rewards.  This is not true in a centrally planned economy, where friends of well placed government officials are awarded special tax or regulatory treatment to ensure they can grow wealthy, in spite of their inability to meet the needs and wants of others in an efficient way.

Finally, history is replete with examples of capitalism raising millions of desperate people out of absolute poverty.  No economic system has done so much for so many in such a short amount of time as capitalism.  One of the biggest complaints against capitalism is it increases economic inequality, and this is true.  Free people making different choices about how to use their time, talents, resources, and relationships will inevitably result in different outcomes.  It is important that we not confuse absolute poverty, where millions of people have no access to food, water, shelter, or security, and relative poverty, where two citizens, both owning iPhones and enrolled in a Verizon texting plan, are separated in economic terms by the one driving to work in a Lexus and the other a 1992 Ford Escort.   Even America’s poorest have greater access to health care today than a U.S president had in the 1920’s, thanks to capitalism.

 While capitalism isn’t perfect, it is so much better than anything in second place that those who oppose it look foolish. I am thankful to have been born in America, where, at least in my lifetime, our nation has mostly operated under a system of free market capitalism.  I pray capitalism’s foes don’t convince a majority to impose some other system on the rest of us.


The Gift of Financial Wisdom

When my kids were in college, I stumbled across a way to motivate them to read books on financial literacy they normally would balk at; I bribed them.  At Christmas time I would give each of them a book I thought would be helpful in teaching them about money or achieving economic success.  Inside each book I would place a computer generated gift certificate for a hefty monetary award, redeemable within one year, upon completion of a book report and PowerPoint presentation on the lessons they learned from the book.  Occasionally one of the kids would demonstrate irritation about receiving a gift that required work, but I made the monetary payouts large enough that it was very difficult for my starving college kids to ignore.

Friends and clients often asked me for good resources for teaching their children about money.  Here are three books I recommend every college student read:

Richest Man In BabylonThe Richest Man in Babylon:  Written in 1926 by George Samuel Clason, this classic book is a collection of stories set in ancient Babylon.  Only 144 pages long, it is an easy read, but it is chocked full of timeless financial wisdom.  This book teaches valuable lessons on the power of compound interest, staying out of debt, and investing wisely.  I read  this book 27 years ago after attending a seminar of the same name, and it was this book that inspired me at age 23 to start investing 10% of every paycheck. While I have made a lot of mistakes over the years, starting to invest regularly at 23 was not one of them.

Wealthy Barber

The Wealthy Barber:  Currently in its 3rd Edition, this book by David Chilton is in its 3rd edition.  The setting of this book is a little more contemporary, and my kids found it more appealing.  The story is about young Dave whose wife is expecting their first child. Dave realizes his finances are not up to par. When he asks his dad for some financial advice, his dad refers him to Roy, the town barber and financial sage.  Every week Dave stops by Roy’s barber shop for a financial lesson where he learns about credit, savings accounts, buying real estate, funding retirement accounts, and controlling consumer consumption.  The story is often funny, as the old codgers who hang out in Roy’s barber shop also throw in their two cents as Roy shares his pearls.  At 197 pages, The Wealthy Barber is a little longer than the Richest Man in Babylon, but it reads fast, and the reader will learn quite a bit about personal finance. This is a favorite of mine as a college graduation gift.

Rich HabitsRich Habits: I just finished reading this book two weekends ago, and I have already started using it as a mentoring tool for young adults.  Tom Corley spent five years compiling a list of ten habits that wealthy people tend to follow and poor people tend to reject. He uses a story about several underachievers who stop doing their bad habits and start doing the “rich habits.” The rich habits aren’t rocket science, but they are very effective in helping the underachiever reach their full potential.  Corley talks about how simple habits like eating less junk food or reading self improvement books or industry journals at least 30 minutes a day can have a huge impact on our future economic success.  The habit I found particularly interesting in this book was nurturing relationships.  According to Corley, successful people network, send birthday cards, and return phone calls promptly because to most wealthy people, relationships are extremely important.  At only 94 pages, I read it in a couple of sittings (and I was taking notes and highlighting), and the story moves easily.  This is a great stocking stuffer for anyone you would like to assist reaching their full potential.

Wisdom never goes out of style, so consider giving these books away this Christmas. Who knows, maybe someone’s life will change after reading one of the these books.