Fire Yourself

Let’s face it: we already know just about everything we need in order to be financially successful. We’ve got all the books and blogs we need to get on track. We know where to find the 10% coupons. We know how to track our spending, and we know where to educate ourselves about investments. But most of us are still stressed out when it comes to money. What’s the problem?

Financial earthquakes (like the “Great Recession of 2008”) don’t help. But as brutal as the economy has been over the last year, most of us are in the same relative place as when this mess started.

Was your financial situation perfect twelve months ago and then poof! it all went away? For some people this maybe be the case, but it’s probably not your story. It’s not mine. We might be behind the eight-ball more than we were a year ago. But if we’re hurting now, we were probably struggling then too. My theory is that our financial struggles have very little to do with money. Money will never create peace of mind; only we can do that. What we need is financial balance. More money is nice but it won’t create financial serenity. Balance will — and it won’t cost you a cent. You can have it today. Right now.

One good start toward balance is the Serenity Prayer:

God grant me the serenity
to accept the things I cannot change,
courage to change the things I can,
and wisdom to know the difference.

Frugal Dad had a brilliant post on this several months ago. I encourage you to read it. Among other things, Frugal discusses the importance of letting go of things that are beyond our control, such as the stock market, interest rates, and unemployment rates. He also talks about having the courage to change the things we can, such as education and work ethic, and asking for the wisdom to know the difference between the two. This prayer is probably the most powerful string of words ever put together — regardless of your religious beliefs.

But accepting the things we cannot change and changing the things we can is great on paper and hard to implement, right? I mean, right now it might be very easy to agree with the Serenity Prayer. But when you’ve lost your job and your credit card bill is staring up at you, it’s not so easy.

I faced a very frightening financial reality over the last year. But here are four steps I’ve taken that have really helped my financial serenity. I hope you find them useful as well.

Gather Knowledge

Earlier I said that we know everything we need to know about money. I may have exaggerated. We all lack self-knowledge and understanding. To solve your financial problems you have to be crystal clear on what the problem is:

* Is your spending out of control?
* Do you need to earn more money?
* Are you unable to get organized?

Often, folks wander around with a vague sense of being overwhelmed by their finances. Break it down. Write it down. What problem do you want to fix?

Once you know what the problem is, you need to fully understand the possible and best cures. Talk to experts. Talk to friends who have overcome similar challenges. Consult this and other excellent blogs. There are tons of resources for you — most of them free. Be open-minded and non-judgmental. You don’t have to decide what to do yet. You are just gathering information.

Now that the easy part is done, it’s time for the next step.

Seek Clarity

Financial success is a function of you rather than your circumstances.

What is it about you that keeps you back? How do you sabotage yourself? We all have character defects. What are yours? Are you lazy? Is that why you stopped tracking your expenses? Is that why you’re sitting on the couch rather than looking for work?

Do you fight with your partner about money because you are selfish? Have you stopped investing because of your fear? Does your arrogance alienate others who might otherwise provide good counsel?

How do you torpedo yourself? If you really want to get to the next level financially, be honest. It’s this lack of honesty that keeps people buying financial books and systems. They keep looking for the magic bullet that’s going to fix their problems. Look for your own character defects and become willing to do the work.

Fire Yourself

This advice may sound strange but it’s a key ingredient.

Think about this as you would any business decision. If you had an employee who continued to mess up time and time again, you’d fire him, wouldn’t you? If someone demonstrates a complete lack of ability to perform a given task, she’s gone. Right?

Let’s say you’ve tried and failed several times to track your expenses. You’ve made promises to yourself that you break time and time again. You’ve failed yourself — so fire yourself.

Put someone else in charge. Get an accountability partner and “report” to her. If you prefer, hire a financial adviser and take direction. Whatever it is, if you’ve failed at some aspect of your financial life, fire yourself and put someone else in charge.

When you “fire” yourself, you are committing to take direction from others and ignore the little voice in your head when it tells you “forget that…I know better”.

Look around. There are plenty of people in your life who would be happy to be on your team. Tell them what it is you want to do and do it. Tell them you want them to be your accountability “boss”. Tell them the problem you are trying to solve, be honest about it, and commit to take action and report daily or weekly, as the case may be. Tell them that they can “fire” you if you fail to live up to your promises.

This one idea has helped millions of people overcome serious problems such as substance addiction, and it can be invaluable to you as well. There’s something about being human: We really don’t like to let other people down. Use that to your benefit.

Take Action

You have the knowledge now. You know what the problem is, and you’ve consulted with others about the best remedy. You’ve fired yourself and you are ready to take direction from your new “boss”.

Now do it. Don’t think about it. Do it.

Remember, you fired yourself. You aren’t the one deciding what to do anymore. It’s not up to you. You are simply a cog in the wheel. You’re a private and your new boss is the general. She says jump, and you ask how high.

Don’t let your mind trick you. You are a smart cookie, and if you allow your character-defected mind to make decisions in this realm of your life, you’ll find some rationalization why you shouldn’t do it. That’s the reason you’ve failed in the past. Actually, you haven’t failed…your tricky mind has failed you.

When I write about character defects, please don’t think I’m pointing fingers. I have a list of defects longer than the Bill of Rights. Fortunately, these techniques worked for me. I can honestly say that I don’t remember the last time I worried about my finances.

To be sure, I’ve taken huge hits in my business and my income is down. But by gathering the knowledge, seeking clarity, firing myself, and taking action, it’s been much easier to accept the things I cannot change, change the things I can, and it’s been easier to see the difference.

Eggshells photo by Pink Sherbet Photography.

From Get Rich Slowly

Have More by Choosing Less

As I search for simplicity in my life, I’ve realized that it’s not just about purging Stuff. Stuff is simply the physical representation of an overall pattern of clutter. In order to accomplish what I want to accomplish, I need to sort and purge the mess, both physical and mental.


* Prioritize. Determine what matters most. Choose the objects and obligations that bring meaning to your life, and make those your focus. Learn to say “no” to the things that don’t matter.

* Minimize. Eliminate the non-essential. Pursue activities that you enjoy and/or that allow you to be productive. “Have the minimum amount of Stuff for you to be comfortable,” Erin writes. Get rid of everything that is toxic in your life.

* Organize. As you reduce your obligations and the things you own, put everything in its place. Create a routine and develop the discipline to stick to that routine. If you take care of the essential, you’ll have time and room for fun without feeling stressed.

* Economize. Following the first three steps ought to reduce your spending. As you continue to simplify, live within your means. Develop a budget. Save for retirement. Buy quality instead of quantity. Be an intelligent consumer.

* Energize. Finally, be industrious. Don’t procrastinate. Pursue your passions with passion. Eat well and get enough rest so that you can work hard — and play hard, too. “Carpe vitam,” Erin says — seize life.

From: Get Rich Slowly

The Credit Crisis Visualized!

The Crisis of Credit Visualized from Jonathan Jarvis on Vimeo.

To my son

To my son, "Lorand Daniel", on his first day of birthday.


"It is never too late to be what you might have been." You can start today to create the life you were meant to live, one small step at a time.
George Eliot (writer)



Or perhaps, "one big step from time to time."
Daniel O

The Story of Stuff

"From its extraction through sale, use and disposal, all the stuff in our lives affects communities at home and abroad, yet most of this is hidden from view. The Story of Stuff is a 20-minute, fast-paced, fact-filled look at the underside of our production and consumption patterns."


The Story of Stuff is an interesting short film, particularly in its last half. Writer and narrator Annie Leonard explains that the “golden arrow of consumption” is the heart of the modern economic system, a system that’s really only existed since the 1950s.

After World War II, planned obsolescence was incorporated into the production of consumer goods. Whereas quality and long life had once been a selling point, now things were intentionally designed with shorter lifespans. Obviously, this increased the rate of consumption.

Even more powerful, however, is the notion of perceived obsolescence. Perceived obsolescence is most obvious with regards to fashion. I suspect most readers try to divorce their purchase decisions from the clutch of fashion because they understand just how insidious it can be. Who wants to be seen wearing clothing from 1993?

But perceived obsolescence goes beyond just fashion. How many of you geeks still have your first iPod? Why did you move to a new one? Was anything wrong with the old one? Or were you, on some unconscious level, unwilling to be seen carrying around that brick anymore? (I’m guilty of having upgraded my iPod because my old one seemed out-of-date, so don’t think I’m condemning anyone.)

What is the cost of all this? Leonard says that 99% of the stuff we harvest, mine, process, transport, and consume is trash within six months. Only 1% of the materials used to produce consumer goods (including the goods themselves) are still used six months after the date of sale.

Here’s the best part of The Story of Stuff chapter five, “Consumption”:




Taken from "Get Rich Slowly" blog.

The Importance of Action!

People have goals in mind, but their present circumstances seem to be far from their intended destination. These two points are so far apart, in fact, that people are afraid to begin moving. Because the distance seemed overwhelming, they are paralyzed.

The importance of action

I used to feel this way, too. I would look at the enormity of my debt — $20,000! $30,000! — and I would stop before I could even begin. This was, of course, completely self-defeating. The most important thing you can do to achieve your financial goals (or any goal, for that matter) is to take action. It matters little which action you take so long as you begin moving in the right direction. You might, for example:

* Start a RRSP account.
* Open a high-yield savings account.
* Cancel your cable television.
* Read a book about the stock market or go back to school.
* Learn to bake bread.

Don’t be paralyzed because you don’t know the best path to take. Pick one good path and follow it. Whatever your financial goal, that first small step is the most important. It leads from inaction to action. It leads to the future.

Closing the gap

While I was thinking about this yesterday, I stumbled upon a video from This American Life’s Ira Glass. On the surface, it seems completely unrelated to personal finance. And maybe it is. But I think that in these five minutes, Glass gets to the heart of success with any goal:

Ostensibly, Glass is speaking about story-telling. (Which is why I was actually watching this.) But what he’s really talking about is the process of mastery, of building skills and achieving goals.

Glass says that when you begin any endeavor, you’re a novice. You have a clear vision of what a successful person would do or be (debt-free, for example, or have a million dollars), but your own efforts aren’t anywhere near what you define as success. Maybe you still spend money on videogames or on handbags. Maybe you eat out too much. Whatever the case, there’s a gap between your view of success and your present abilities.

“A lot of people never get past that phase,” Glass says. “A lot of people at that point, they quit.”

But to succeed, you can’t quit. To achieve your dreams, you need to keep stumbling along. Nearly anyone who is successful, says Glass, goes through a period of months or years where they can tell that what they’re doing isn’t as good as they want it to be:

You gotta know that’s totally normal. The most important possible thing you can do is do a lot of work. Do a huge volume of work…It’s only by actually going through a volume of work that you’re actually going to catch up and close that gap, and the work you’re making will be as good as your ambitions.

Or, translated into the language of personal finance, keep practicing frugality. Keep saving money. Keep reading about the stock market. It’s only by continuing to do these things that they become habits, and it’s only by developing these habits that you’ll be able to meet your financial goals. Don’t be discouraged if you stumble. You will make mistakes. You need to fight your way through these. “You will be fierce,” Glass says. “You will be a warrior.”

But to begin, you need to take action. You need to take that first step. You need to begin walking in the direction of your dreams.

Article taken from "Get Rich Slowly"

A Glimpse at the Spending of the Average American

The Spending of the Average American Chart:

On Saturday, The New York Times published a brilliant chart illustrating the spending of the average American:

“Each month, the Bureau of Labor Statistics gathers 84,000 prices in about 200 categories,” the paper writes, “like gasoline, bananas, dresses and garbage collection.” These numbers form the Consumer Price Index, one common measure of inflation. And this graphic makes that information accessible.

This chart is neat for several reasons:

The circle itself represents 100% of the average consumer’s spending. The circle is divided into eight large shapes, each of which is divided further into a number of smaller shapes. The size of each shape represents an estimate of what the average American spends on the category it represents. For example, gasoline is the largest shape in the transportation category.
Each shape is color-coded by the change in prices for that category between March 2007 and March 2008. The three dark red shapes (representing price increases of more than 40%) are all petroleum products. But eggs — with a 29.9% price increase — are close behind.
Hovering over any shape will reveal the category name, the share of spending from the average budget, and the amount by which prices have changed in the past year.
You can use the “zoom in” tool to get a better view of the action, and then drag the chart around to look at different categories. It’s only by doing this that you can see lettuce has its own category, and that the green, leafy stuff has declined in price by 3.2% over the past twelve months.
I’ll confess to feeling like a total geek because I spent twenty minutes exploring the different numbers. I even started taking notes and making extrapolations and comparisons.

For example, Americans, as a whole, spend three times as much money on cigarettes as they do on financial services. Actually, because we know that 0.7% of expenditures are made to cigarettes, and because we know that 21% of Americans smoke, then (if my math is right) about 3.5% of a smoker’s expenses go to cigarettes. (Note that I’m not criticizing. At one time, comic books accounted for 7% of my own expenses.)

I would love to find more charts and graphs like this one. (The New York Times has a history of producing great charts and graphs, such as their graph of home values from 2006 and their rent vs. buy calculator.)

[The New York Times: All of inflation's little parts]

Article taken from the Get Rich Slowly blog

Global Warming!

How to Talk to a Climate Skeptic

Below is a complete listing of the articles in "How to Talk to a Climate Skeptic," a series by Coby Beck containing responses to the most common skeptical arguments on global warming. There are four separate taxonomies; arguments are divided by:

• Stages of Denial,
• Scientific Topics,
• Types of Argument, and
• Levels of Sophistication.

Individual articles will appear under multiple headings and may even appear in multiple subcategories in the same heading.

Stages of Denial

A. There's nothing happening

1. Inadequate evidence

• There is no evidence
• One record year is not global warming
• The temperature record is simply unreliable
• One hundred years is not enough
• Glaciers have always grown and receded
• Warming is due to the Urban Heat Island effect
• Mauna Loa is a volcano
• The scientists aren't even sure

2. Contradictory evidence

• It's cold today in Wagga Wagga
• Antarctic ice is growing
• The satellites show cooling
• What about mid-century cooling?
• Global warming stopped in 1998
• But the glaciers are not melting
• Antarctic sea ice is increasing
• Observations show climate sensitivity is not very high
• Sea level in the Arctic is falling
• Some sites show cooling

3. No consensus

• Global warming is a hoax
• There is no consensus
• Position statements hide debate
• Consensus is collusion
• Peiser refuted Oreskes

B. We don't know why it's happening

1. Models don't work

• We cannot trust unproven computer models
• The models don't have clouds
• If aerosols are blocking the sun, the south should warm faster
• Observations show climate sensitivity is not very high

2. Prediction is impossible

• We can't even predict the weather next week
• Chaotic systems are not predictable

3. We can't be sure

• Hansen has been wrong before
• If we can't understand the past, how can we understand the present?
• The scientists aren't even sure
• They predicted global cooling in the 1970s
  

C. Climate change is natural

1. It happened before

• It was warmer during the Holocene Climatic Optimum
• The medieval warm period was just as warm as today
• Greenland used to be green
• Global warming is nothing new!
• The hockey stick is broken
• Vineland was full of grapes

2. It's part of a natural change

• Current global warming is just part of a natural cycle
• Mars and Pluto are warming too
• CO2 in the air comes mostly from volcanoes
• The null hypothesis says global warming is natural
• Climate is always changing
• Natural emissions dwarf human emissions
• The CO2 rise is natural
• We are just recovering from the LIA
  

3. It's not caused by CO2

• Climate scientists dodge the subject of water vapor
• Water vapor accounts for almost all of the greenhouse effect
• There is no proof that CO2 is causing global warming
• Mars and Pluto are warming too
• CO2 doesn't lead, it lags
• What about mid-century cooling?
• Geological history does not support CO2's importance
• Historically, CO2 never caused temperature change
• It's the sun, stupid

D. Climate change is not bad

1. The effects are good

• What's wrong with warmer weather?
  

2. The effects are minor

3. Change is normal

E. Climate change can't be stopped

1. Too late

• Kyoto is a big effort for almost nothing

2. It's someone else's problem

• Why should the U.S. join Kyoto when China and India haven't?
• The U.S. is a net CO2 sink

3. Economically infeasible

• Climate change mitigation would lead to disaster

Scientific Topics

A. Temperature

• There is no evidence
• The temperature record is simply unreliable
• One hundred years is not enough
• Current global warming is just part of a natural cycle
• What's wrong with warmer weather?
• It's cold today in Wagga Wagga
• Warming is due to the Urban Heat Island effect
• The satellites show cooling
• Global warming stopped in 1998
• They predicted global cooling in the 1970s
• Some sites show cooling
  

B. Atmosphere

C. Extreme events

1. Temperature records

• One record year is not global warming
• It's cold today in Wagga Wagga
  

2. Storms

3. Droughts

D. Cryosphere

1. Glaciers

• Glaciers have always grown and receded
• But the glaciers are not melting
  

2. Sea ice

• Antarctic sea ice is increasing

3. Ice sheets

• Antarctic ice is growing
• Greenland used to be green

E. Oceans

• Sea level in the Arctic is falling

F. Modeling

1. Scenarios

• Kyoto is a big effort for almost nothing
• Hansen has been wrong before

2. Uncertainties

• We can't even predict the weather next week
• Chaotic systems are not predictable
• We cannot trust unproven computer models
• The models don't have clouds

G. Climate forcings

1. Solar influences

• Mars and Pluto are warming too
• It's the sun, stupid

2. Greenhouse gases

• Climate scientists dodge the subject of water vapor
• Water vapor accounts for almost all of the greenhouse effect
• There is no proof that CO2 is causing global warming
• CO2 doesn't lead, it lags
• CO2 in the air comes mostly from volcanoes
• What about mid-century cooling?
• Geological history does not support CO2's importance
• Natural emissions dwarf human emissions
• Mauna Loa is a volcano
• The CO2 rise is natural
• Historically, CO2 never caused temperature change
• The US is a net CO2 sink
• Observations show climate sensitivity is not very high

3. Aerosols

• What about mid-century cooling?
• If aerosols are blocking the sun, the south should warm faster

H. Paleo climate

1. Holocene

• It was warmer during the Holocene Climatic Optimum
• The medieval warm period was just as warm as today
• Greenland used to be green
• The hockey stick is broken
• Vineland was full of grapes
• We are just recovering from the LIA

2. Ice ages

• CO2 doesn't lead, it lags
• Global warming is nothing new!

3. Geologic history

• What's wrong with warmer weather?
• Geological history does not support CO2's importance
• Climate is always changing
• Historically, CO2 never caused temperature change
• If we can't understand the past, how can we understand the present?

I. Scientific process

• Global warming is a hoax
• There is no proof that CO2 is causing global warming
• There is no consensus
• The null hypothesis says global warming is natural
• Position statements hide debate
• If we can't understand the past, how can we understand the present?
• The scientists aren't even sure
• Consensus is collusion
• Peiser refuted Oreskes

Types of Argument

1. Uninformed

• There is no evidence
• One record year is not global warming
• One hundred years is not enough
• There is no proof that CO2 is causing global warming
• What's wrong with warmer weather?
• Climate change mitigation would lead to disaster
• There is no consensus
• We cannot trust unproven computer models

2. Misinformed

• It was warmer during the Holocene Climatic Optimum
• The medieval warm period was just as warm as today
• Antarctic ice is growing
• CO2 in the air comes mostly from volcanoes
• Greenland used to be green
• The satellites show cooling
• Natural emissions dwarf human emissions
• It's the sun, stupid
• The U.S. is a net CO2 sink
• But the glaciers are not melting
• Antarctic sea ice is increasing
• They predicted global cooling in the 1970s
• Vineland was full of grapes
  

3. Cherry Picking

• It's cold today in Wagga Wagga
• Antarctic sea ice is growing
• The satellites show cooling
• Global warming stopped in 1998
• Antarctic sea ice is increasing
• Vineland was full of grapes
• Observations show climate sensitivity is not very high
• The sea level in the Arctic is falling
• Some sites show cooling
  

4. Urban Myths

• The medieval warm period was just as warm as today
• CO2 in the air comes mostly from volcanoes
• Greenland used to be green
• Hansen has been wrong before
• They predicted global cooling in the 1970s
• Vineland was full of grapes
  

5. FUD

• The temperature record is simply unreliable
• Glaciers have always grown and receded
• Climate scientists dodge the subject of water vapor
• Water vapor accounts for almost all of the greenhouse effect
• Current global warming is just part of a natural cycle
• Kyoto is a big effort for almost nothing
• Mars and Pluto are warming too
• It's cold today in Wagga Wagga
• CO2 doesn't lead, it lags
• There is no consensus
• Antarctic ice is growing
• Warming is due to the Urban Heat Island effect
• We can't even predict the weather next week
• Chaotic systems are not predictable
• What about mid-century cooling?
• The null hypothesis says global warming is natural
• Geological history does not support CO2's importance
• Climate is always changing
• Natural emissions dwarf human emissions
• Mauna Loa is a volcano
• Global warming is nothing new!
• The CO2 rise is natural
• The hockey stick is broken
• Historically, CO2 never caused temperature change
• The models don't have clouds
• Global warming stopped in 1998
• If we can't understand the past, how can we understand the present?
• If aerosols are blocking the sun, the south should warm faster
• The scientists aren't even sure
• Antarctic sea ice is increasing
• Peiser refuted Oreskes
• Vineland was full of grapes
• Observations show climate sensitivity is not very high
• Sea level in the Arctic is falling
• We are just recovering from the LIA
  

6. Non Scientific

• Global warming is a hoax
• Kyoto is a big effort for almost nothing
• Why should the U.S. join Kyoto when China and India haven't?
• Hansen has been wrong before
• Position statements hide debate
• The scientists aren't even sure
• Consensus is collusion
• They predicted global cooling in the 1970s
  

7. Underdog Theories

8. Crackpottery

Levels of Sophistication

1. Silly

• There is no evidence
• Global warming is a hoax
• One record year is not global warming
• Climate change mitigation would lead to disaster
• Mars and Pluto are warming too
• Mauna Loa is a volcano
  

2. Naive

• One hundred years is not enough
• Glaciers have always grown and receded
• Why should the U.S. join Kyoto when China and India haven't?
• It's cold today in Wagga Wagga
• CO2 in the air comes mostly from volcanoes
• We can't even predict the weather next week
• We can not trust unproven computer models
• The satellites show cooling
• Natural emissions dwarf human emissions
• The models don't have clouds
• Global warming stopped in 1998
• It's the sun, stupid
• If we can't understand the past, how can we understand the present?
• The scientists aren't even sure
• Vineland was full of grapes
• Some sites show cooling
  

3. Specious

• The temperature record is simply unreliable
• Climate scientists dodge the subject of water vapor
• There is no proof that CO2 is causing global warming
• Current global warming is just part of a natural cycle
• It was warmer during the Holocene Climatic Optimum
• The medieval warm period was just as warm as today
• What's wrong with warmer weather?
• Kyoto is a big effort for almost nothing
• CO2 doesn't lead, it lags
• There is no consensus
• Antarctic ice is growing
• Warming is due to the Urban Heat Island effect
• Greenland used to be green
• What about mid-century cooling?
• The null hypothesis says global warming is natural
• Geological history does not support CO2's importance
• Climate is always changing
• Global warming is nothing new!
• The CO2 rise is natural
• Historically, CO2 never caused temperature change
• Hansen has been wrong before
• Position statements hide debate
• But the glaciers are not melting
• If aerosols are blocking the sun, the south should warm faster
• Antarctic sea ice is increasing
• Consensus is collusion
• They predicted global cooling in the 1970s
• Peiser refuted Oreskes
• Vineland was full of grapes

4. Scientific

• Water vapor accounts for almost all of the greenhouse effect
• Chaotic systems are not predictable
• The hockey stick is broken
• Observations show climate sensitivity is not very high
• Sea level in the Arctic is falling
• We are just recovering from the LIA

The comments of Gristmill users reflect the opinions of those individuals only, and do not necessarily reflect the viewpoints of Grist, its staff, its board members, their psychotherapists, or their aestheticians. Got it?

Gristmill

http://gristmill.grist.org

Every Day is Thanksgiving Day

Day of Thanksgiving.

Holiday Thoughts from 1951!