January, 2008


22
Jan 08

Financial Freedom

One of my passions is personal finance, not because I’m into numbers or because I love money or luxury (I don’t.), but because controlling your money is the only way to maintain your freedom and independence. As soon as you are beholden to someone for your rent, for your car payment, for whatever… you have given up some measure of your independence. Sure, theoretically you could dumpster dive and live off the grid, but if you enjoy indoor plumbing and fresh meals, you’ll have to compromise and participate in this system to some degree and this means selling your time and energy either directly through a business or indirectly via an employer.

So, to the degree that I hold this viewpoint close to my heart, it kills me to see people struggling under mountains of debt and financial obligations. In other words, in dire straits. I don’t want to paint the credit industry as evil, but I do think we have an obligation to help our fellow man make responsible financial decisions, especially when we see them perched on the edge. It is wrong to knowingly prey upon the ignorant, to award credit to those least able to deal with it. Let’s be honest, the credit industry is in the business of waiting for you to slip up. They don’t make money on people who pay their bills on time. Think about that.

Anyway, J. told me about this good documentary, Maxed Out, and I found it on Google Video in case you wanted to watch it. It made me angry enough to write this, so that’s an endorsement of sorts.

If I could offer any financial advice, it would be this:

  1. Pay off your credit card balance every month, even if it hurts and you have to eat baloney sandwiches every day for several weeks.
  2. Get a high-yield savings account (Like ING Direct) and set an automatic transfer from your checking to your savings account every time you get paid. Eventually, you will build up a cushion. It’s easier than you think.
  3. Never buy things on credit unless you have a lot of money in the bank. Obviously, you will know if you have the discipline to ignore this one, but it’s a good general rule.
  4. Spend time with people who are good with money and avoid people who are bad with money. It sounds harsh, but both good and bad habits are contagious.

Any other tips?


18
Jan 08

Notes and links

Dumping my browser tabs, Paul K. style.

  • Sad, Sweet One-Act Play, Told Entirely By a Burger King Receipt I Found This is the kinda thing I worry about when I think about being old. Though, as J. pointed out, it doesn’t have to be interpreted in a sad way.via
  • Occasionally I will get a large chunk of copy a client wants to use, but which needs to be converted from ALL CAPS, the case many people insist on writing in. Convert Case is a good website to use for this. Very handy.
  • New to me: The concept of “t-shaped creativity“. I like the distinction between being t-shaped and a jack-of-all-trades. Hat tip to Jeremy Johnson.
  • Bridging the gap between the online and the offline: Use postful to send snail mail to any address from the web. $1 a letter. I like things like this. Just wish I had someone to send mail to. I’ve also been using Fresh Books for my invoicing. I love it! Now when I need to send someone an invoice via snail mail I can do it through my Fresh Books account and it only costs $1. Everyone else can just pay online. They even send the invoice with a return payment envelope and a printed link to pay online. This is way easier than printing everything out from Microsoft Money and mailing myself, which I used to do and why I only invoiced every 2-3 months. Use this referral link if you’re interested and you will make me rich. Other ideas for bridging the gap: The Cheap and Easy Way to Go Paperless.
  • Now I get it: Sometimes I’m slow to understand things. Things like Facebook, Twitter and now OpenID. When OpenID first came out, I just didn’t get it. But, if someone had just told me, “Now you can use one login for everything” it would have made more sense to me. I’ve started using OpenID with Basecamp and a few other things and it’s pretty incredible. I actually hope more sites start supporting it, although I need to find out how it works if you decide to move to a different OpenID provider.
  • Kevin Kelly had a nice post on changing his mind about Wikipedia: Believing the Impossible: “How wrong I was. The success of the Wikipedia keeps surpassing my expectations. Despite the flaws of human nature, it keeps getting better. Both the weakness and virtues of individuals are transformed into common wealth, with a minimum of rules and elites.”
  • Confirming, but not all that surprising:embodied cognition“: “A series of studies, the latest published in November, has shown that children can solve math problems better if they are told to use their hands while thinking. Another recent study suggested that stage actors remember their lines better when they are moving.”

18
Jan 08

Conditional separation

Heard on NPR about televangelists fighting Senator Grassley’s request for information on their finances and how these tax-exempt organizations spend their money.

For example, Grassley wants to know for what tax-exempt purpose Joyce Meyer Ministries, based in Fenton, Mo., bought a $30,000 malachite round table, and spent $11,219 on a French clock and $19,162 on Dresden vases.

He’s also interested in the total amount of “love offerings” received in lieu of salary by Bishop Eddie Long of the New Birth Missionary Baptist Church in Lithonia, Ga., and how Long reports them on his W-2 forms to the Internal Revenue Service.

Kenneth Copeland Ministries, in Newark, Texas, also received a letter. Grassley is curious about reports that a gathering of ministers presented Kenneth Copeland with a “personal gift” in excess of $2 million, in celebration of the organization’s 40th anniversary.

On the one hand, some religious groups want to abolish the separation of church and state when they want to change the law to reflect religious principles, but when it comes to protecting their finances from taxation and scrutiny they want to preserve the separation of church and state.

Influence is a two-way street.


9
Jan 08

Music: It’s a wild world

One of my friends, Scott (aka Soft Charisma) did a good cover of the Cat Stevens classic, Wild World. Listen, if you please.


6
Jan 08

Patterns of thought and behavior

I have an on-again, off-again love affair with personality tests and personality types a la Myers-Briggs, Socionics, etc. As dichotomies can be used to define reality (light / dark, true / false, hot / cold) it makes sense to me that certain human qualities can be defined and described as existing along a continuum of possible outcomes. It also makes sense that while every human being is unique and individual, out of 6 billion individuals certain patterns of behavior are likely to emerge.

On a scale where astrology is zero and a DNA test is 100 in terms of usefulness in understanding reality, I would put personality studies at 15-20. As a field of study, it is not scientific at all, but the “soft sciences” (economics, psychology, sociology, etc.) have a difficult time proving anything as they are, ultimately, the study of patterns and behavior. More synthetic in outlook rather than analytic. Yet, we still find the “soft sciences” helpful.

The study of personality types is an extension of Psychology. In differs in that it tries to present personality as a continuum of specific attributes: introversion / extraversion, rationality / emotionality, etc. that can be evaluated and understood in a framework of possible types. The study of personality types has the potential to illuminate many areas of human interest including: market behavior, criminality, public health, addiction, and education. This is what is most compelling…the ability to understand why people behave the way they do and how to know who is likely to think in a certain way.

The biological sciences have been approaching social problems from the opposite direction through neurochemical explanations for human behavior. However, this approach is limited and leads to a chemically deterministic view of human psychology, one that is promoted by the medical sciences. The problem with the analytic approach of medicine is that it is satisfied primarily with results (and commercializing results) rather than understanding. So for a problem like Depression (which has now been defined as a chemical imbalance by the medical establishment), a treatment that reduces symptoms associated with Depression is regarded as successful despite the fact that the neurochemical role in human psychology is not well understood. So, it is unsurprising that unintended consequences have emerged, like suicidal ideation in teens who took anti-depressants or suicidal ideation in patients prescribed Chantix for smoking cessation, for example.

Suffice it to say that we have spent more time trying to understand the physical and neurochemical structure of the brain (the assembly / machine code) than we have the higher level processes, which could benefit from greater attention by researchers and theoreticians.

If you would like to find out your “type” you can use the following short personality test. I would be curious to know what you come out as.


5
Jan 08

New Year’s Resolutions 2008

“Be at war with your vices, at peace with your neighbors, and let every new year find you a better man.” – Benjamin Franklin

I don’t usually make New Year’s resolutions, but I need to start so everyone can see if I’m full of hot air. Here’s my list:

1. Get more exercise

In a paper titled “Why we get fat”, Arthur Devany proposes that as human beings evolved in an environment where food was scarce and required a lot of work to acquire, the best evolutionary approach was to eat as much as you could when food was readily available and to use as little energy as possible to reduce your caloric output. Now that food is cheap and modern life requires zero physical exertion, our evolutionary strategy is broken. To stay healthy, we will have to overrule our evolved instinct. Keeping physical activity fun and interesting is the key to getting regular exercise, especially if our natural tendency is to avoid unnecessary work. If we can trick ourselves into having fun with our health, the results should improve. Maybe through exer-gaming, maybe through collecting exercise data if you like numbers, maybe by combining exercise with something else you enjoy like audiobooks or chatting with friends.

As I hope to live to see my 100th birthday, I need to take care of myself.

2. Write more and work to get better at it

I get frustrated when I have trouble expressing a particular thought. I admire and envy people who can express their thoughts in a way that is clear, interesting, and enjoyable to read. My personal writing goal is depth, clarity, and concision. To do this, I will use this blog. If you read anything you like or dislike or if you have any tips, please let me know.

3. Make new friends. Be a better friend. Put more work into relationships.

“A man who doesn’t spend time with his family can never be a real man.” – Don Corleone, The Godfather (1972)

My social life could use some work. I have a tendency to avoid social situations where there is a potential for discomfort and I have been reluctant to meet new people since I have lived in Dallas. Rather than improving the quality of social interaction, this has resulted in a self-imposed exile. In 2008, I will get out more and will work on being better company by sharing more of myself and my attention.

4. More ideas. Bigger ideas. Realize ideas.

Neil Gabler’s biography of Walt Disney blew me away. Disney’s vision is inspiring to anyone who wants to do something Big before they die. Walt Disney was not just a pioneer in animation and business. His influence on American culture is so pervasive that it is largely unknown or forgotten by most people. On the flip side, Disney’s example reminded me of how little I have accomplished in 30 years. If I don’t get busy now, I will miss an opportunity to do something important with my life; something of lasting significance and value to the world. Ideas and plans are important, but in the end all that matters is what you do and how well you do it.

5. Increase income by 100%. Invest more and better. Use money in the service of larger goals.

While Greed is bad, money is the distillation of value. It is a means to an end and necessary in achieving big things. The more access to money you have, the more you can do. I am disappointed when I read about billionaires and the ways they spend their money. It is a waste that so many focus on boring things like material possessions or physical enjoyment when they could be inventing new products or changing human life forever. Their idea of lasting accomplishment is a foundation in their name. Who will build our modern cathedrals? Who will invent our next revolution? Who will inspire the next generation?

In reading about Walt Disney, the one thing that struck me is how much he did with little. At most times in his life, he wanted to do a lot more than he could support with the revenue from his company. Most Disney films took years to produce and often the studio lost money. Disney struggled constantly with financing new projects, but he did more with what he had than almost anyone I can think of.

Either you bootstrap yourself or you borrow money from others to create your vision. At this point in my life, I am focusing on turning myself into an efficient cash-generating machine. Not for greed or material comfort, but to enable free action and the ability to do something worthwhile.

On the investing front, I have done a pretty good job. I save and invest regularly using scheduled drafts from my accounts on a weekly basis. I have zero debt aside from what I put on the Amex each month. I do need to improve my revenue and I do need to contribute more to charity.

6. Read more. Share what I’ve learned.

I’ve been reading more lately, but I need to get better at sifting and sharing what I’ve learned. Having a library nearby has been a real pleasure. I keep an Amazon wishlist of books available at the local library.

If I think of any more resolutions, I will let you know. If you have any resolutions of your own, I would like to read them. Please leave a link in the comments if you want someone to hold you to it.