life

Huffington Post…

In the end there is once dance you’ll do alone -Jackson Browne In 1991, the IBM plant in Lexington, Ky. became Lexmark. IBM offered employee severance packages. People could take the package or take a chance that Lexmark would keep them on. Several IBM employees came to me for advice. Some took the package and others did not. I concluded that taking a package is an individual decision. There are no set guidelines. Many of the IBM employees were engineers or had heavy statistical backgrounds. They wanted an answer they could quantify. They sought me to calculate the present value of their package. After 30 seconds crunching the numbers, I asked the essential question: What are you doing to do with the rest of your life? Some had well thought out plans. They wanted to do charity work or start a second career. Others didn’t. Working at IBM was not just a job, it was a lifestyle. They had never thought about life outside the corporation. IBM employees were like a large family. They had generous benefits and perks. Most socialized with other IBM employees. Once someone started at IBM, they generally stayed for life. The idea of leaving IBM was painful. Companies who offer severance packages are generally established companies who sold the concept of lifetime employment concept. I’ve found that people leaving old line companies, even with a severance package, were more bitter than those where companies treat employees like interchangeable parts. If you work at a company with high employee turnover, getting fired is not a total surprise. People at a company like IBM never thought about working somewhere else. Many people who are married to their jobs. They don’t have hobbies or outside interests. Those people need to forget about a severance package and stay put. An engineer who came to my office with many boxes of data, that he brought on a moving van dolly. He had spent hours trying to quantify his decision. Before I started looking at his boxes, I asked some questions . Did he like his job? Yes. Did they want him at the new company? Yes. Would he enjoy retirement? No. Could he find a similar job? Not in this part of the country. Was moving an option? No. I told him to skip the number crunching. . He needed to stay where he was. He was stunned. He kept wanting me to look at his boxes. I wouldn’t look at his data. I told him it was irrelevant. After a while, my words sunk in. He worked happily for another decade. Economic decisions shouldn’t be ignored. Some severance packages are lucrative and offered on a one time basis. Financial considerations are one part of the package, not the whole package. The health of the company and industry are important factors to consider. I’ve seen people pass up a buyout and have their company go down a few years later. People often think their own industry is healthier than it is. It is good to get an objective opinion. There are economic factors I look for in a plan. First is lifetime income. It’s easier to leave if your lifetime income is secured. A second factor is health insurance. Larger companies have better benefits than what people can get on their own, especially if people have complicated medical conditions. I warn people getting lump sum packages not to make any sudden or stupid financial decisions. When severance plans are offered, I see hucksters come running, pitching everything from financial products to fast food franchises. The best advice is to take a deep breath. Talk, really talk, with your family, your bosses, your co-workers and the stakeholders in your decision. Get some outside and impartial advice. Make a decision based on information and logic, not on fear or emotion. It’s one of the most important decisions of your life. Even with good information, it is a decision you will ultimately make alone. Don McNay, CLU, ChFC, MSFS, CSSC is Chairman of the Board for McNay Settlement Group in Richmond, Ky. You can write to him at don@donmcnay.com or read his award winning column at www.donmcnay.com

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Don McNay: What to consider when offered a severance package

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Huffington Post…

It’s a popular term to say that you need to earn your customer’s trust these days, especially with the advent of social media tools. But what about the people you let into your business that aren’t your customers? What about your friends, family, employees, your clients, strategic partners, vendors? They can be equally impactful — or detrimental — to the outcome you see. The wrong type of publicity firm can cost you thousands without results. An employee who is slick at marketing his/herself may end up being anything but what they seem. Even family and particularly friends can have a negative influence — not solely in hiring them to help you out, but in their ancillary relationship to you and your life. After all, work and life are so intimately intertwined, and that’s especially when you’re an entrepreneur as so much of work life spills over to the other side (and vice versa). I’ve seen it in my own life a handful of times, among the female founders I’ve met and known and with companies I’ve worked with. I’ve read about it happening in the media. Not long ago I read an article about a woman who gave everything up because her success and work were affecting her relationship with her husband. I’ve seen companies who have brought on clients that have hurt relationships for them, particularly in the areas of PR and other services. Just the same I’ve seen and watched dozens of clients struggle with vendors. A few friends unknowingly sharing details about your plans or secret sauce can disrupt just that. If those we work with and those we do not can play even so much as a significant role, how can you foolproof who you can trust and who you can’t? In my own world and in my work, I’ve done it in a few easy ways. It’s something I’ve shared with many of the women (and men!) I know who also own start-ups and struggle with similar things. Mind you it’s not always 100% foolproof – people, and situations, can change. But if you put a little thought in advance to who and what you work and play with, it can save you from potential hassle in the future. Not everybody in your life is meant to be close to you and your work — and not every vendor, client, employee, etc. is always meant to have that same access either. In your personal life, see your world as something that exists in rings. The outer rings are where you’ll likely find most of the people you know. Only let those who you deeply trust and have known for at least three years near your closer rings. When it comes to employees, adopt this same type of mentality, only allowing closer access as you’ve gotten to know someone you’ve hired. I’ve seen companies hand over the shop too early only to find themselves in trouble later. And never solely go by someone’s resume — blingy titles and large company names can make it easier for someone who lacks the experience you need to appear as if they have it. Always ask for and check references, making sure one or two are work-related. When it comes to working with vendors, be diligent about details — ask questions, listen closely, pay attention and again ask for references. This is a given, but you’d be surprised at how many people do not do this. Most of all, trust your gut and never take a step without meditating, thinking about it or praying. Bounce who and what you work with off those in your closest inner circle — those who have your back will be able to see clearly when your own opinion or thought might be clouded.

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Patricia Handschiegel: The New Power Girls: Trust and Your Startup

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Guest Commentary: Does Trading Forex Professionally Ruin Your Life? Or Improve Your Trading?

May 12, 2011

Guest Commentary: Does Trading Forex Professionally Ruin Your Life? Or Improve Your Trading?

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Newly Graduated And Drowning In Six-Figures Of Student Loan Debt

April 26, 2011

NEW YORK — Hardly a day goes by where Ashley Angello doesn’t fret about her student loan debt. Angello thinks about it at night, when packing tomorrow’s lunch means a few saved dollars. And she worries about it the next morning when deciding what to wear to work, since she hasn’t been able to afford any new clothes since starting her job. “I used to joke when I was in college that I’d be paying off these loans for the rest of my life,” says Angello, 22. She graduated nearly a year ago from Ithaca College, where she majored in communications. “Little did I realize that I actually will be.” Angello is on the hook for about $120,000. With six-figures in debt, she has little choice but to save every little bit that trickles in. And still, it’s a struggle. Midway through college, Angello wouldn’t have been able to graduate had she not been willing to go into debt. “I needed that loan no matter how much it was going to cost me in order to get my education.” Like the home buyers who took on outsized mortgages in order to realize the American Dream of home ownership, students like Angello are struggling with piles of educational debt assumed in service of financing a similar goal — the American Dream of a college education. “Thirty years ago, college was a wise, modest investment,” says Fabio Rojas, a professor of sociology at Indiana University. He studies the politics of higher education. “Now, it’s a lifetime lock-in, an albatross you can’t escape.” Like Angello, many recent graduates are straining under the increased weight of such an albatross. Recently, student loan debt exceeded credit card debt , meaning that Americans now owe more on their student loans than they do their credit cards. By year’s end, student debt is on track to hit the trillion dollar mark. While Mark Kantrowitz, who publishes the financial aid sites Fastweb.com and FinAid.org , reports that last year’s average graduate walked away with about $25,000 in debt , many juggle significantly more. “It’s one thing to pursue your dreams, but if you’re borrowing to pursue them, you have to make sure you have a plan to pay them back,” says Kantrowitz, who reports that graduates with large amounts of debt tend to subsequently delay other life cycles — things like buying a car and getting married, not to mention saving for retirement and eventually financing their own child’s education. Kantrowitz is particularly alarmed by the number of students overborrowing to pay for an undergraduate degree in fields that historically don’t pay well — majors, for instance, like theater, religious studies or art history. But dream schools or ideal occupations aside, Kantrowitz also sees recent graduates encountering a harsh reality once they enter the job market. Specifically, when debt at graduation exceeds their starting salary. It’s a phenomenon of which Angello is well acquainted. After graduating from college last May, Angello returned home to her native Rochester, N.Y., where she moved back in with her mother and worked as a server at two local restaurants in order to get by. Her mother works as an administrative assistant. Angello, a scrupulous saver, finally moved to New York City earlier this year, where she began work as a full-time, paid intern. It currently pays $12.50 an hour. Her hope is that it might transition into a permanent job — with benefits. Currently, the bulk of Angello’s weekly paycheck goes toward splitting the rent with a roommate and a few basic utilities, but not much else. Her mother pitches in where she can, but Angello’s contribution is hardly enough to begin paying down the vast sums of student loan debt. The monthly payments on her private loans, while manageable for now, will only increase when interest rates begin rising again. So far, while her debt has yet to fundamentally realign the direction of her eventual career path, Angello says that she’s now willing to take any permanent offer that comes her way, so long as it’s in her related field, rather than hold out for the possibility of something better coming along. “My mom has assured me that she’s not going to let me go hungry,” explains Angello, during a recent lunch break. Her monthly rent is more than her mother’s mortgage. “I guess what I didn’t expect is that it’d be a year later and it’d still be so difficult just to get by.”

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Could Major U.S. Data Releases Help Breathe Life into a Collapsing Dollar?

April 22, 2011

Could Major U.S. Data Releases Help Breathe Life into a Collapsing Dollar?

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Peggy McColl: Success or Failure: Which Fear Is Really Holding You Back?

March 29, 2011

You are months, or even weeks away from launching your product or services online and you are ready to abolish the entire idea. Yikes! You might be surprised at how many other internet marketers, authors and solo-preneurs share your same doubts and fears. Many of my clients and I have experienced these negative issues associated with putting ourselves out there in the marketplace and wondering what will happen if…. if we fail, and if we succeed. Do these thoughts sound familiar? It’s not going to work I’ve spent all of this time and money building it and what if no one wants it? Why would anyone want to buy anything from me? My content is on X and I am not a perfect example of X Once I launch and it’s successful, the microscope will be on me to walk the talk and I may not be able to keep up with demand. One of my clients candidly confessed, “I don’t know if I am afraid of failure or afraid of success.” This is natural. There is a fear to fail because you’ve put so much into it, including your name, your brand and your reputation. The other side of the coin is what if it is a big success? Is it going to take her away from her family more than she’d like? If she’s feeling overwhelmed now, even before it launches, what will her life look like if it does take off? This coaching call reminded me of similar experiences I’ve had with feeling overwhelmed. In my earlier days of releasing some of my first books I felt like pulling the plug on the entire concept because I questioned who cares what I have to say. It brought back memories of my own fears. I wasn’t as concerned about failing as I was about succeeding and what that meant because then I’d have to step up, follow through and consistently deliver. That was a lot of pressure and I didn’t know if I wanted to set myself up for it. Is the fear of success better or easier to overcome than the fear of failure? Not really. Fear of any kind can be an immobilizer and you have to be able to stare it in the face and go for it anywhere. Here are the recommendations I made to my client and the strategy that can work for you: Understand your fears are natural so don’t be upset with yourself because these thoughts come up – it’s okay to feel it. Some of the most successful people in the world had that experience. Come from your heart, remember why you are doing it and reconnect to the passion that started the whole process in the first place. Continue to give the best of who you are Don’t worry that you are not perfect at what you are teaching others -you are human and that will resonate with your customers. Think about when a high-profile golfer has a tough match and when he is interviewed, he admits to not playing his best. We don’t fault him for that, we know how difficult it is to be on top of your game at all times. Don’t be afraid of sharing your own challenges – people will connect and respect your vulnerability. Let them see the real you. Make a conscious choice to put the fun back in to the process. There is tremendous value in asking yourself great questions such as: What do I like or enjoy about this? How will I make this more enjoyable? What am I grateful for in this experience? What am I most grateful for in my life right now? (This is a Biggie!) Put a reminder in front of you to stay connected to what you are enjoying most about this experience What am I learning? How am I growing? There will always be the one moment in time when you want to throw up your hands and give up. Remember it is just a moment, a day or a week and it is a temporary feeling. Take a break and do something else for a while until the feeling passes. I remember when I sent my first manuscript to my editor and when she said it was a great book my response was, “Really???” She laughed and said, “Oh you authors are so insecure.” We are all very similar when it comes to taking a risk and putting ourselves out there. Two decades ago Susan Jeffers published her book, Feel the Fear and Do it Anyway . It is still true to this day!

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A Social Network For The Post-PC–And Post-Privacy–World

March 24, 2011

Color , a new smartphone application, allows you to be virtually all-seeing, putting eyes in the back of your head, into your coworker’s living room, and into that hotel bar your cousin visited just moments ago in Miami. It offers a social networking experience that combines a unique everything-is-public-to-everyone privacy policy with Twitter’s real-time information stream and the photo-and-video-based voyeurism of Facebook. Color CEO Bill Nguyen, who co-founded Lala, a music service acquired by Apple in 2009 , calls the app a social network for the “post-PC world.” Whereas existing social services link our online identities to usernames and URLs, Color ties them to our phones. Users are only asked to submit their first names and phone numbers when they register for the app. Color profiles then follow users wherever they go with their phones, connecting them to other Color users based on proximity. The app is also a social network for a post-privacy world: anything shared to Color is instantly visible to anyone in any place at any time. “As tech causes cultural changes, we’re going to live so much more of our lives in public,” Nguyen told the Huffington Post. “There’s private stuff and there’s public stuff. Decide which kind of information you want to share and then launch the appropriate app for that.” The power of Color’s all-seeing eye is best experienced first hand. Imagine yourself at a wedding where friends, relatives, and strangers are snapping photos of the newlyweds and posting them on Color. Any pictures or videos uploaded with the app will immediately be shared with all of the surrounding phones–as will any pictures or videos the guests have ever added to the app, whether from a bachelor party binge or a baby’s birthday. Via this access, immediacy, and proximity-based interaction, Color aims to deliver a social network that ties engagement to a shared, physical experience and in so doing, facilitates connections between strangers. Though users can choose to follow specific people’s feeds, there is no “friending” or “following” on Color. Instead, the app’s software uses the GPS and Bluetooth capabilities on phones to automatically surface people who are in close proximity to a user or with whom that user interacts with frequently. Frequent interaction involves viewing, “liking,” or commenting on other users’ posts. The app also taps into phones’ light sensors and microphones to distinguish photos taken by individuals in a shared environment (such as a party where multiple Color users are taking photos) from the snapshots of people who merely happen to be nearby (such as a separate event in close proximity). Color has raised $41 million in funding from investors including Bain Capital Ventures, Sequoia Capital, and Sillicon Valley Bank. “Just as the iPhone changed everything about mobile phones, Color will transform the way people communicate with each other,” Doug Leone, a partner at Sequoia Capital, said in a statement. “Once or twice a decade a company emerges from Silicon Valley that can change everything. Color is one of those companies.” One thing Color seeks to change is what its creators see as a flaw with existing social media services: the increasing difficulty of befriending new people online, which the company said in a statement had become “almost impossible.” “Social networks are doing pretty amazing things, but to me, social networks still [feel] solitary, like advanced email, where you write something, post something, and someone responds. That’s not like real life at all,” Nguyen said. In addition to giving users yet another avenue through which to peer into others’ lives, the app also provides users one more way to ensure nothing is forgotten about their own. “This is like TIVO-ing life. There’s no forgetting,” Nguyen said. “I think it’s the best, most complete way of having a record of your life. It’s your life crowdsourced.” How much users will choose to share–and whether an all-public app appeals to them–has yet to be seen. Would you try Color? Why or why not? Weigh in below. Color, available for free, is launching Wednesday on Android and iPhone. Blackberry and Windows Phone 7 apps will be coming soon. WATCH: Color Demo from Color Labs, Inc. on Vimeo .

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Tony Schwartz: Take Back Control of Your Work (and Your Life)

March 22, 2011

I just got back from the SXSW interactive conference in Austin. I went there to give a talk about fueling sustainable productivity by balancing periods of fully absorbed attention with intermittent renewal. Peering out into that vast hall, I fear I saw the future: a sea of the digital elite hunched over blinking technologies, tweeting and texting as I talked. Here’s what I later learned some of them were saying, all in 140 characters or less: “I’m splitting my attention between @tonyschwartz & tweeting that 2 B gr8 U have to be willing to suffer/practice.” “Tony Schwartz tells SXSW attendees to go to bed earlier. Tough sell.” “How can Tony Schwartz stay sane giving a speech on focusing on task at a time while the audience is on their iPads/iPhones at same time?” I wasn’t so worried about my own sanity — I was only doing one thing at a time, after all — but I was a little concerned about theirs. We’ve truly entered a world of nonstop input and output. So what exactly would it take to seize back control of our lives? We need a series of deliberate practices to counter the powerful forces so accelerating our lives. 1. Just say no. Imagine for a moment that you’re downsizing from a house to an apartment one-third the size. Everything you have seems necessary until you realize it simply won’t fit in your new place. There’s always room for less. You likely already have too much to do, too much information to absorb, and too many choices to make. If so, your challenge is learning to say no far more often — “no” to more projects, more meetings, more emails, more tweets, more Facebook updates, more purchases, more friends, more “likes”, and more fans and followers. Prioritization isn’t just what you want to do, it’s increasingly what you ought not do. What can you delegate and eliminate, take off your plate or put on the back burner in each dimension of your life? If you’re going to take on something new, what are you going to stop doing? How are you going to be more ruthlessly selective? My colleague Scott Belsky refers to this as “curating” your life. Curate comes from the Latin curare, meaning “to care” — in this case for yourself. Think of this as a Not To Do list. 2. Create more space in your brain — and your life. Our working memory can’t hold much information. The first solution, as David Allen spells out in Getting Things Done, is to write down everything that’s on your mind — the more often, the better. The less you’re thinking about at any given moment, the calmer and more receptive you’ll be, and the better you’ll be able to manage whatever arises. We also need to create more space in our days. To make sense of our increasingly complex and demanding world, we need times during the day when we step back, reflect on and metabolize what we’ve just taken in. We need less data and more context, less volume and more depth. That can’t happen if we’re running from one meeting to the next, and emailing, texting and tweeting in every moment in between. Where can you insert purposeful pauses? 3. Do one thing at a time as much as possible. I appreciated having the SXSW audience tweet short bits about my talk to their followers, but while they were tweeting, they were likely missing whatever I said next. Human beings aren’t designed to do two cognitive tasks at the same time (much less three or four). The research is clear that we’re far more efficient when we do activities sequentially rather than simultaneously. We also do higher quality work when we’re singly focused, and remember more of anything we’re trying to learn. 4. Revisit and reevaluate. I’ve kept a journal most of my adult life. In my 20s and 30s, I filled it with anguished evaluation of my life’s ups and downs. Today, thankfully, I use my journal as a place in which to collect ideas when they occur to me. The real value of doing so, I’ve discovered, is periodically revisiting what I’ve written. I do that on plane trips, mostly, because that’s the least interrupted time left in my life. By revisiting ideas, and reevaluating them with a fresh eye, I find the best ones become richer and more layered, and the less good ones naturally fade away. It’s a practice that serves as an antidote to instant action, and allows ideas and projects to ripen so I don’t act on them before their time. 5. Take regular breaks from your technology. The digital devices we all now carry around are stunningly seductive and addictive, providing endless access to instant gratification: tweets and texts, stuff to buy, games to play, apps to add, and constant new information. Our devices are the means by which we get our work done, but they’re also a form of digital crack. If they’re turned on, you’ll almost surely use them and very likely abuse them. Here’s the threshold question: Are there websites you check 10 or 20 or even 30 times a day? Consider treating yourself like a parent does a child. Ruthlessly limit the time you expose yourself to irresistible temptation. While I’m writing this blog, for example, I have my cell phone and email turned off. At 90 minutes, I’ll check back in. The other move I’ve decided to make– and am committed to stick by — is to leave my laptop and phone in the kitchen when I head up to my bedroom at night. I’m convinced I’m better off reading books than I am Google Analytics, and truly relaxing with my wife rather than aimlessly surfing websites. Less is more. Reprinted from HBR.org .

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Carolyn Ziel: Who Says Business Isn’t Personal?

March 21, 2011

Remember the scene in You’ve Got Mail when Tom Hanks tells Meg Ryan, “It’s not personal, it’s business”? I love her response: “What is that supposed to mean? I am so sick of that. All that means is that it wasn’t personal to you. But it was personal to me. It’s PERSONAL to a lot of people. And what’s so wrong with being personal, anyway?” What a great question. When the movie came out, I had just launched my career as an executive recruiter. Back then, I would have agreed with Tom Hanks. I was operating, like most of us in those days, from a place where I was more in my head than my heart. Now, I know that Meg was right when she said “Whatever else anything is, it ought to begin by being personal!” Being as connected as we are in the world today makes business very personal. Japanese businesses affected by last week’s devastating earthquake and tsunami have already affected automobile manufacturing plants in the U.S. such as General Motors, Toyota and others. It has affected computer availability and sales for Apple products and countless other business across the country. As we, here in Redondo Beach Marina, watched the literal ripple effect of the Tsunami flow into our harbor, I thought about business connections. To make a real connection with others in our business, we have to connect with our hearts. Everything we do, from defining and planning business structures, systems, marketing, to sales – all of it needs to align with our core mission. It’s about being congruent. Our core mission is the heart of our business. I call this being Heart Forward in business. For me it extends to the partnerships I create; the people and businesses I align with and the employees and partners I work with as well as the clients I attract. Sometimes this is challenging. For many, as for me, it has become a spiritual practice of sorts. Yes, your business can become your spiritual practice. Why not? We are living in unique times. The paradigms of the past are no longer supporting our ever-changing business world. As entrepreneurs we are ideally positioned to contribute and take advantage of new paradigms. Now more than ever, it is not only possible, but imperative to be Heart Forward in business. When we lead with our hearts, rather than our heads, we are better able to make a difference in this world, no matter what our business. The greatest example and a woman who has made the greatest success of her life’s work is Oprah Winfrey. Nancy F. Koehn is a historian at the Harvard Business School where she holds the James E. Robison chair of Business Administration. Koehn’s research focuses on entrepreneurial leadership and how leaders, past and present, craft lives of purpose, worth, and impact. In her eBook, Oprah, Leading With Heart she shares how Oprah built her media empire, learning her lessons and leading with her heart. A true leader uses all her assets: head, heart and power. However, inspirational leaders rely first and foremost on their hearts as their business barometer. Oprah has brought self-awareness and emotional intelligence to the forefront of her business strategy. She has connected emotionally and created an intimate relationship with her audience by being honest and leading with her heart. The more personal she is with her audience and the more she reveals of her journey, the more successful she becomes. This month’s O Magazine is her first poetry Issue. She shares her view on poetry: “For me, poetry is the unexpected utterance of the soul. It is where the soul touches the everyday. It is less about words and more about awakening the sense of aliveness we carry within us from birth. To walk quietly till the miracle in everything speaks is poetry, whether we write it down or not. I confess I started out wanting to write great poems, only to be worn by life to wanting to discover true poems, and now in the second half of life, I feel humbled and excited to want to be the poem!” This is the perfect example for today’s entrepreneur. Oprah made up her own rules based on her personal journey. We were witness to her poetic discoveries and the journey to her life’s purpose. We began to contemplate our own hearts as she contemplated hers. Being the poem can be as simple as shifting your perspective by listening to your heart to find out what you really want and staying true to your purpose. Business is personal when you are living your heart’s mission. Whether you are an actor, own a hair salon, or the CEO of a computer software company, you will transform your business and your life when you lead with your heart. Like the countless ripples created by a small pebble tossed into a lake, you can create your own ripple effect just by striving to be the poem. Let your heart lead you to your own poetry. Like Oprah says, “That is, for sure, an aspiration worth holding: to not just appreciate the poetry, but to be the poem.”

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Stefania Lucchetti: Why Taking Time Off Will Make You a Better Leader

February 20, 2011

For many people, taking time away from work and the daily hustle and bustle is difficult. We all get caught up in the whirlwind of working and taking care of those around us. Recently, I have realized more and more that in order to have creative ideas and the ability to think like a leader, I must give my brain a break. A few days ago, I was talking to a representative from a company who wants to book one of my talks on leadership. He said that he would like for me to come right after the Easter holidays because people’s minds are much more receptive to new ideas right after a holiday. Why is this? The theory is that when we slow down and give our brains a rest from the daily frenzy of activity that they normally experience, we open our minds to huge creative forces. Have you ever experienced your mind just shutting down because there was too much going on around you or you were under great stress? I actually experienced this myself during the last holiday I took. It was during a very busy period for me, so I asked my husband to monitor me and keep me away from my email. It was very difficult at first, but after a few days I started to notice that my dreams were more vivid and my mind was literally teeming with new ideas. Taking time to reflect on your life and your business is crucial. You have to give yourself that necessary time for your mind to shut off the normal stresses and worries so that you can tap into that fountain of wisdom that resides inside of your soul. Reflection should be something that you actively do, and not just some passive activity that only happens by accident. For instance, we should not save reflection time for those moments when we are sick and forced to take a day off. Doing the things you already know how to do will just leave you stagnant, so you must take that time to think and reflect over your business to cultivate new and exciting ideas. Stagnation is the first step to business death in any entrepreneur’s world. You should pursue learning every single day as a part of building your life and your business. When people think about learning, they imagine sitting in a classroom or maybe reading a book. However, another aspect of learning that often gets overlooked is assessing the cause and effect of your own actions. You should be thinking about things you have already done and what effect they have had on your business and life. This is a part of learning from your own unique experiences. So how do you get enough time to reflect? We all have moments in the day to take a few minutes to think. It might be when you are taking your morning shower, walking the dog or sitting in an airplane seat. Unfortunately, we often try to fill every space of time with checking our email or playing on our cell phone instead of sitting in silence. Learning to sit with yourself and just reflect may take some practice at first, but it will be so worth it in the end. Being reflective should be something that you strive for and even schedule into your day if necessary. Use it as an action step to success instead of just a discarded moment in time where you had nothing else to do. Don’t confuse reflection with daydreaming as reflection is using your mind in a purposeful way to examine your actions and thoughts. If we never slow down and think, how will we ever learn from past actions and possible mistakes? Aren’t we destined to repeat potentially catastrophic mistakes over and over if we never reflect on their outcome?

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Vivian Norris: Why Muhammad Yunus and the Poor Need Us More Than Ever

February 18, 2011

In the past weeks, Nobel Peace prize winner Muhammad Yunus has been under attack by not only his leader of government in his native Bangladesh but by those people and organizations who are upset with what narrows down to Dr. Yunus’ stand against corruption and loan sharking. Basically here is what it comes down to: greed and corrupt power versus truly helping the poor to help themselves. Anyone who has spent time with Dr Yunus, and everyone I have spoken to over the past few weeks who knows him, and the work of Grameen , is horrified at how he is being attacked personally. (See this piece .) This is a man who lives on a small income, with no air-conditioning in his home in hot humid Dhaka, who will not accept even a cup of water from the poor, and who has dedicated his life to helping the poor help themselves out of poverty. He travels many days per year just to speak out and raise awareness and try to encourage governments and organizations to take action. He truly wants to see and believes we can see poverty eliminated. When he receives a prize or fee he gives it immediately back to the bank for the poor, to create new programs and outreach. Show your support for Dr Yunus by signing one of these petitions here: http://www.petitiononline.com/mod_perl/signed.cgi?a110115z&51 http://www.ipetitions.com/petition/americansforyunus/ http://www.thepetitionsite.com/2/stop-harassing-nobel-laureate-prof-muhammad-yunus/ http://www.gopetition.com/petition/42857/signatures.html And visit the Support Yunus Facebook page now. So why is he being attacked? And why do people have such a hard time believing someone could actually act in such a selfless way? True integrity, and a kind of deep belief in the power of the bottom of the pyramid billions who live on next to nothing, combined with what has become a growing movement and awareness that things can indeed change for the better, threatens the status quo. The world has changed. The future of this planet will not be dictated by a handful of wealthy folks in the West. That “bottom billion” is extremely powerful and harnessing the energy and creativity of those billions of human beings can be used for either good, or misused by a greedy few to profit off the poor and keep a vicious cycle going. If this power is used in a positive way, the future can be amazing. If abused, we all go down with the ship. Dr. Yunus speaks out about how the poor, if given access to credit, can help themselves out of poverty. He believes that the poor should be the owners of the banks that loan to them, not wealthy or foreign interests who want to cash in on what has become a profitable paying back of interest on the loans. He does not believe that countries should accept foreign funds, and has challenged the debts created by the likes of The World Bank and IMF. He is about keeping the money circulating locally, about truly micro microloans to the poorest of the poor, and that the bankers must go out to the borrowers, hear their concerns, know them. As Dr. Yunus has repeatedly said, all humans have both a selfish side and a selfless side. There is nothing wrong with making a profit, just don’t make it off the backs of the poor. Go make your profit somewhere else! And shame on the banks and financial interests profiting off the poor through speculation and pushing up of food and commodity prices! Where has your humanity gone? They are profiting not just while the poor abroad suffer but also here at home in the US! Read this and watch this . One last note of encouragement for Dr. Yunus, Grameen and their 40 years of work in Microcredit, from another visionary: “First they ignore you, then they ridicule you, then they fight you, then you win.” — Mahatma Gandhi Those bottom billion will indeed win, and we can all win together by speaking out, taking action and fighting the good fight. We are with you Dr. Yunus! Follow me on Twitter at : vivigive and vigilantevnm and visit my site at: www.vigilante-vnm.com.

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Dan Solin: Investing Charlie Sheen Style

February 16, 2011

Even die-hard Charlie Sheen fans must have been appalled at news reports that he asked a porn star to babysit his two young daughters. His ex-wife, Denise Richards, expressed the views of most of us when she twitted that “no adult film star will be babysitting our kids.” Don’t be too quick to criticize Mr. Sheen’s appalling judgment. Most of you are not doing any better when you pick an investment adviser. Jay Franklin brought home this point in a thoughtful recent blog. Mr. Franklin finds it odd that you would entrust your life savings to firms with a demonstrated history of ethical and moral (if not literal) bankruptcy. He supports this position with the following examples, which are a modest sampling of the indefensible conduct passing for another day at the office of significant players in the financial world: 1. Merrill Lynch paid $10 million to settle claims it used order flow from its customers to trade and profit for its own account ; 2. The Bank of New York allegedly overcharged a Virginia pension plan according to allegations in a complaint filed by the state. It is alleged to have done so by converting $12.5 million of pension money to Canadian dollars at the highest exchange rate and then passing on the proceeds to the pension plan at the lowest exchange rate, and (of course) pocketing the difference. A very slick move, if proven. 3. Similar allegations against Bank of New York are being investigated by the Florida state pension plan. California has commenced its own investigation into foreign currency practices of State Street. The defendants deny all charges. 4. J.P. Morgan must be one of the few winners who dealt with Bernie Madoff. It quietly withdrew $276 million in profits shortly below Madoff’s collapse. It is now the defendant in a $6.4 billion lawsuit, filed by the tenacious trustee for the Madoff mess. The lawsuit alleges that J.P. Morgan was “thoroughly complicit” in Madoff’s fraud. J.P. Morgan denies the allegations. I join Mr. Franklin in wondering why investors deal with firms that have conducted business in this manner. It should be enough that they lack the ability to intelligently manage money (their own or others). You would think the total lack of a moral compass — standing alone — would cause you to flee from their offices. There is no evidence this is happening. Before you judge Mr. Sheen, take a hard look at the way you invest. You may find your judgment is no better than his. The views set forth in this blog are the opinions of the author alone and may not represent the views of any firm or entity with whom he is affiliated. The data, information, and content on this blog are for information, education, and non-commercial purposes only. Returns from index funds do not represent the performance of any investment advisory firm. The information on this blog does not involve the rendering of personalized investment advice and is limited to the dissemination of opinions on investing. No reader should construe these opinions as an offer of advisory services. Readers who require investment advice should retain the services of a competent investment professional. The information on this blog is not an offer to buy or sell, or a solicitation of any offer to buy or sell any securities or class of securities mentioned herein. Furthermore, the information on this blog should not be construed as an offer of advisory services. Please note that the author does not recommend specific securities nor is he responsible for comments made by persons posting on this blog.

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Naveen Jain: Manage Your Company’s Online Identity — Or The Competition Will Manage It For You

February 15, 2011

Your LinkedIn profile is diligently maintained, your blog is free of comment spam, and you tell your kids to wipe their Facebook pages clean of party photos. You work hard to maintain control of your personal online identity. But do you give the same attention to how your business is portrayed online? The online identity, or “o-dentity,” of your business can help or hinder its bottom line. Yet, too many executives fail to safeguard their company’s online reputation. If you allow disgruntled customers or bloggers with a grudge to speak out unhindered about your company, rest assured your competitors will pounce on this opportunity to spread the (negative) word. Following are the five most common mistakes top executives make regarding the management of their company’s o-dentity, and some advice on taking control to prevent a downward spiral. 1) Delegating o-dentity and holding steadfast to the “it’s not my job” attitude. Many top executives see managing the link between CEO voice and corporate brand as something their PR and marketing firms do, along with managing a blog and the company’s Twitter feed – that’s why you hired them, right? However, control of a company’s online reputation can no longer be outsourced without further thought — or worse, kicked downstairs to IT and the SEO management team. Noise from the online world is too loud, complicated, and fast-moving to delegate this task. CEOs need to proactively communicate with potential customers or investors in social media outlets such as blogs, Twitter, Facebook, and LinkedIn. If you’re not making a connection between your voice and views as a CEO, and your company’s brand, you’ll become a corporate dinosaur. Think of Steve Jobs and Apple Computer, or Jeff Bezos at Amazon, execs who truly live and breathe their brands. The presence and voice of the CEO is now more important to branding than the right logo, tagline or campaign. 2) Clinging to one-way communication with customers. In the old days (that is, before 2003 or so), you talked to your customers and they didn’t talk back – or at least they didn’t talk back in a way that could result in a crisis in a matter of hours. If customers were unhappy, they called customer service, their problem was solved, and the CSR rep closed the file – end of the story. Nowadays, customer communications has morphed from a one-way street into a multi directional super highway, and CEOs who ignore this fact do so at significant peril. Top executives who are engaged with customers and online influencers on a daily basis can rectify problems before they turn into crises. To get a handle on the dialogue surrounding your company, you need to spend time reviewing the top 10 thought-leader blogs and Twitter feeds covering your industry – don’t rely on summaries from assistants or wait until they tell you about the negative buzz. You and your company should be engaged daily in two-way conversation with the top influencers in your industry, whether these are executives of other businesses or vocal customers. Granted, this won’t be an easy transition for executives who aren’t comfortable with such direct (and possibly confrontational) contact with influencers – it’s easier to deliver a speech and be done with it. Nevertheless, you need to ask questions and listen to what influencers are saying. Don’t talk “at” people — talk “with” them. 3) Underestimating the power of insights from unhappy customers. Building on the last point, not all CEOs are willing to accept the fact that today the power of one voice – that is, a customer – can provide valuable insights on products and services. Before social media changed the world, a disappointed consumer could only tell a handful of other people about their experience. Today, one viral posting about lousy service (like the infamous recording of an AOL member’s argument with a customer service rep) can result in thousands of social media posts or even stories in The New York Times or Wall Street Journal . Learn from Dell’s example of retooling customer service: After getting hammered in the blogosphere about poor response to online customer complaints, Dell created a “social media swat team” that monitored blogs for negative posts about Dell’s products. The posts are routed to this team, which can then quickly respond before the negative post gains traction. And be proactive: Don’t wait for complaints to come in through the toll-free number before you do anything about them – contact unhappy customers before they can negatively influence other customers. Airlines, often roundly criticized for poor service, are getting smarter about fast response to customer problems via Twitter and other social networks. Delta Air Lines now has a special team, @DeltaAssist , that monitors Twitter for passenger complaints. 4) Believing that customers understand the difference between The Wall Street Journal and a blogger. Executives think consumers can differentiate between a respected media outlet like The Wall Street Journal or The New York Times – whose staff are governed by a code of ethics, and whose lawyers ensure reportage is fair and accurate – and a blogger with a few readers who could be backed by your competition. Today everyone with a Internet access can be a “journalist,” regardless of whether they have had training and answer to a team of editors, or simply started a blog using free software. Don’t assume consumers can discern the nuances of journalism – if your customers take bloggers or Twitter users seriously, then you should too. When Sean Parker, an entrepreneur and the first president of Facebook, was concerned at how his portrayal in the movie “The Social Network” was damaging his online reputation, he didn’t just sit still. He reached out to Henry Blodget, CEO of the online business publication Business Insider and a Huffington Post columnist, to tell his side of the story . Thanks to Blodget’s posts, as well as tweets to his 24,000+ followers, Parker was able to present an alternate picture of his life and accomplishments. 5) Sending out inconsistent messages to external and internal audiences. Do you tell customers that you pride yourself on exemplary customer service, then fail to offer them a toll-free number for questions so they can speak with a real person? Do you proclaim your company as an innovator, yet tell your employees that you’re pulling back on R&D? You need to represent the company internally in the same way you do to your customers. Two excellent examples come to mind: Nordstrom and Gilt Groupe . Nordstrom is legendary for its in-store customer service, and has successful extended this experience to the web. Likewise, Gilt Groupe, the discount designer fashion website, projects an image of exclusivity and stellar customer service. Both embrace consistent messaging. There’s no disconnect, because the image is reality. When you make a mistake — like shoe retailer Kenneth Cole did recently by tweeting, “Millions are in uproar in #Cairo. Rumor is they heard our new spring collection is now available online,” — quickly apologize and communicate that the message is at odds with the company’s image, both inside and out. Cole tweeted : “I apologize to everyone who was offended by my insensitive tweet about the situation in Egypt. I’ve dedicated my life to raising awareness about serious social issues, and in hindsight my attempt at humor regarding a nation liberating themselves against oppression was poorly timed and absolutely inappropriate.” Avoiding the “don’ts” above can help you gain visibility into and control of the online dialogue surrounding your company. Remember, if you don’t take charge of your o-dentity, the competition will be happy to do it for you.

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Naveen Jain: Manage Your Company’s Online Identity — Or The Competition Will Manage It For You

February 15, 2011

Your LinkedIn profile is diligently maintained, your blog is free of comment spam, and you tell your kids to wipe their Facebook pages clean of party photos. You work hard to maintain control of your personal online identity. But do you give the same attention to how your business is portrayed online? The online identity, or “o-dentity,” of your business can help or hinder its bottom line. Yet, too many executives fail to safeguard their company’s online reputation. If you allow disgruntled customers or bloggers with a grudge to speak out unhindered about your company, rest assured your competitors will pounce on this opportunity to spread the (negative) word. Following are the five most common mistakes top executives make regarding the management of their company’s o-dentity, and some advice on taking control to prevent a downward spiral. 1) Delegating o-dentity and holding steadfast to the “it’s not my job” attitude. Many top executives see managing the link between CEO voice and corporate brand as something their PR and marketing firms do, along with managing a blog and the company’s Twitter feed – that’s why you hired them, right? However, control of a company’s online reputation can no longer be outsourced without further thought — or worse, kicked downstairs to IT and the SEO management team. Noise from the online world is too loud, complicated, and fast-moving to delegate this task. CEOs need to proactively communicate with potential customers or investors in social media outlets such as blogs, Twitter, Facebook, and LinkedIn. If you’re not making a connection between your voice and views as a CEO, and your company’s brand, you’ll become a corporate dinosaur. Think of Steve Jobs and Apple Computer, or Jeff Bezos at Amazon, execs who truly live and breathe their brands. The presence and voice of the CEO is now more important to branding than the right logo, tagline or campaign. 2) Clinging to one-way communication with customers. In the old days (that is, before 2003 or so), you talked to your customers and they didn’t talk back – or at least they didn’t talk back in a way that could result in a crisis in a matter of hours. If customers were unhappy, they called customer service, their problem was solved, and the CSR rep closed the file – end of the story. Nowadays, customer communications has morphed from a one-way street into a multi directional super highway, and CEOs who ignore this fact do so at significant peril. Top executives who are engaged with customers and online influencers on a daily basis can rectify problems before they turn into crises. To get a handle on the dialogue surrounding your company, you need to spend time reviewing the top 10 thought-leader blogs and Twitter feeds covering your industry – don’t rely on summaries from assistants or wait until they tell you about the negative buzz. You and your company should be engaged daily in two-way conversation with the top influencers in your industry, whether these are executives of other businesses or vocal customers. Granted, this won’t be an easy transition for executives who aren’t comfortable with such direct (and possibly confrontational) contact with influencers – it’s easier to deliver a speech and be done with it. Nevertheless, you need to ask questions and listen to what influencers are saying. Don’t talk “at” people — talk “with” them. 3) Underestimating the power of insights from unhappy customers. Building on the last point, not all CEOs are willing to accept the fact that today the power of one voice – that is, a customer – can provide valuable insights on products and services. Before social media changed the world, a disappointed consumer could only tell a handful of other people about their experience. Today, one viral posting about lousy service (like the infamous recording of an AOL member’s argument with a customer service rep) can result in thousands of social media posts or even stories in The New York Times or Wall Street Journal . Learn from Dell’s example of retooling customer service: After getting hammered in the blogosphere about poor response to online customer complaints, Dell created a “social media swat team” that monitored blogs for negative posts about Dell’s products. The posts are routed to this team, which can then quickly respond before the negative post gains traction. And be proactive: Don’t wait for complaints to come in through the toll-free number before you do anything about them – contact unhappy customers before they can negatively influence other customers. Airlines, often roundly criticized for poor service, are getting smarter about fast response to customer problems via Twitter and other social networks. Delta Air Lines now has a special team, @DeltaAssist , that monitors Twitter for passenger complaints. 4) Believing that customers understand the difference between The Wall Street Journal and a blogger. Executives think consumers can differentiate between a respected media outlet like The Wall Street Journal or The New York Times – whose staff are governed by a code of ethics, and whose lawyers ensure reportage is fair and accurate – and a blogger with a few readers who could be backed by your competition. Today everyone with a Internet access can be a “journalist,” regardless of whether they have had training and answer to a team of editors, or simply started a blog using free software. Don’t assume consumers can discern the nuances of journalism – if your customers take bloggers or Twitter users seriously, then you should too. When Sean Parker, an entrepreneur and the first president of Facebook, was concerned at how his portrayal in the movie “The Social Network” was damaging his online reputation, he didn’t just sit still. He reached out to Henry Blodget, CEO of the online business publication Business Insider and a Huffington Post columnist, to tell his side of the story . Thanks to Blodget’s posts, as well as tweets to his 24,000+ followers, Parker was able to present an alternate picture of his life and accomplishments. 5) Sending out inconsistent messages to external and internal audiences. Do you tell customers that you pride yourself on exemplary customer service, then fail to offer them a toll-free number for questions so they can speak with a real person? Do you proclaim your company as an innovator, yet tell your employees that you’re pulling back on R&D? You need to represent the company internally in the same way you do to your customers. Two excellent examples come to mind: Nordstrom and Gilt Groupe . Nordstrom is legendary for its in-store customer service, and has successful extended this experience to the web. Likewise, Gilt Groupe, the discount designer fashion website, projects an image of exclusivity and stellar customer service. Both embrace consistent messaging. There’s no disconnect, because the image is reality. When you make a mistake — like shoe retailer Kenneth Cole did recently by tweeting, “Millions are in uproar in #Cairo. Rumor is they heard our new spring collection is now available online,” — quickly apologize and communicate that the message is at odds with the company’s image, both inside and out. Cole tweeted : “I apologize to everyone who was offended by my insensitive tweet about the situation in Egypt. I’ve dedicated my life to raising awareness about serious social issues, and in hindsight my attempt at humor regarding a nation liberating themselves against oppression was poorly timed and absolutely inappropriate.” Avoiding the “don’ts” above can help you gain visibility into and control of the online dialogue surrounding your company. Remember, if you don’t take charge of your o-dentity, the competition will be happy to do it for you.

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Martin T. Sosnoff: Trade in Your Bonds for Equities

February 15, 2011

Every time I hire an outstanding Egyptologist to guide me through the ruins I end up canceling my trip — for good reasons. Now it’s the 81-year-old despot, still black-haired, going on 85 and how many face lifts? Last year, a group of German tourists were savaged by terrorists. Recently, a busload of foreign visitors crashed on a winding road with multiple fatalities. More and more, I sense the world is busy, maybe too busy and prone to accidents. The financial world is so interconnected that when China’s monetary authorities notch up interest rates to fight inflationary excesses our Big Board shudders. Turmoil in Egypt triggered a $6 spike in oil futures over 2 days. Talk about butterflies flapping their wings on distant continents! When markets roil in pain, missing geopolitical upsets in the Mideast, I force myself to press trading desk buttons and buy reciprocal beneficiaries. Egypt’s pain is oil’s gain. In case you missed it, both Schlumberger and Halliburton spiked 10 percent. Oil reserves outside the Mideast just turned more strategically valuable. Drilling is bound to accelerate elsewhere. I hate this daily noise level, but I’ve learned not to overreact and go on with my life, tuned into the mighty flow of Ole Man River, the long term trends lurking beneath the surface of choppy waters. Some fifty years ago, Sidney Homer, Solomon’s research partner, published his annual supply and demand for funds study that dealt with the bond market. It couldn’t encompass wars and financial panics but was a good indicator of where the bond market was headed. Later on, Henry Kaufman took on this responsibility. Traders at Solly ignored these term papers as too academic, but this document was distributed to the Street and eagerly awaited by all of us. Everyone today dissects each mumble of Federal Reserve Board members and makes decisions based on the course of the dollar, interest rates, inflation and emerging markets dynamics. I don’t see much work done on the supply and demand for funds available to our stock market. The Street tracks volatility and the correlation of specific stock market groups to broader indices like the S&P 500, but this is pure noise level stuff. Stats I look at suggest huge money streaming into equities from institutional and individual investors. Forget foreign money which is volatile and invariably comes in late, thereby accentuating bull markets but is not a significant variable. Changes in flows mount into trillions of dollars, enough to move Big Board valuations higher. Margin credit is insignificant, maybe $500 billion in a market valued near $15 trillion. This even with interest charges relatively insignificant for well heeled investors, no more than 1 percent. The quarterly net flow into financial assets during the bear market turned from a $200 billion positive to a negative number. Individuals, at least, handled themselves conservatively, raised cash, didn’t tap margin credit and plowed money into bond funds, municipals, and even paid down outstanding debt. Meanwhile, state and local debt rose inexorably this past decade as did Federal debt and Fanny and Freddy’s mortgage pools. But, the cost of debt service for the government is half what it was 10 years ago and debt service as a percentage of GDP rose only 2 percentage points to 18 percent from 16 percent. Politicians rarely dig down into such pivotal numbers. Even though real short term interest rates turned negative the past few years, individuals raised cash holdings to 40 percent of financial assets from 30 percent. Only in the mid-seventies and early 1980′s was cash as much of 60 percent of assets. Then, short term interest rates ranged as high as 15 percent under Paul Volcker’s reign as Federal Reserve Board chairman. Those days gone, but not forgotten. Currently, there’s a sea charge in asset deployment under way by individuals and institutions. Money is coming out of bond funds and municipals and flowing into equities. The only fixed income sector holding up is the junk bond category, where yields to maturity of 7 percent or better are available on single B credits. Even BB credits with yields of 5.5 percent are holding firm despite the treasury market’s decline. Unless 10-year Treasuries spike to the 4.5 percent level shortly (not my call) the high yield market could be almost as attractive a sector as it was over the past 24 months and give stock market indices a run for best asset class, again. Over the past six years, private pension funds took bond holdings up by $1 trillion, but this move is played out and capital is moving back into stocks. Equities dropped from 60 percent of assets to below 40 percent at the market bottom. Fixed income investments had risen to as high as 30 percent of assets from a normalized 20 percent. Equities at the top of the market in 2007 reached about $19 trillion and bottomed at $10 trillion. Cash for all institutional investors and individuals over the past decade rose form $5 trillion to $9 trillion, a huge amount needing reinvestment into higher yielding paper. Even the Big Board yields over 2 percent and is seeing serious payouts from tech houses like Intel and Microsoft to be followed by Cisco and perhaps even Apple, presently sitting on its $70 billion boodle. Equities, normally 70 percent of private pension fund assets, even after the monstrous market rally now stand at 60 percent of assets. Fixed income investments remain at 40 percent of assets, normally closer to 20 percent. Financial assets held by individuals have rebounded to $25 trillion from approximately $20 billion at the market’s low point. I see at least $5 trillion in pension fund and individual assets reallocating to equities over the next 24 months from cash holdings and bonds. Unless short rates rise markedly over the next 12 months, the reallocation from cash alone could reach as much as $4 trillion. Fixed income investments seem too high at $9 trillion vs. a normalized level of $5 trillion so my $5 trillion asset reallocation number could be conservative. Obviously, inertia is a powerful force and what is sensible and logical doesn’t always happen. Consumer confidence is rising so this is a plus factor, but home prices need to perk up, too. After all, half of all family wealth resides in home ownership. A weak dollar is good for the stock market up to a point, but negative for fixed income investments. The world is witnessing serious commodity inflation in oil, copper, iron ore and grains. All this could lead to tightening by central banks, worldwide. A reversal in Federal Reserve Board policy emphasis could happen sooner than the bond crowd anticipates. Nobody expects Fed Funds above 1 percent well into 2012. Money may stay in short term holdings longer than I expect. If 10-year Treasuries pierce through the 4 percent yield level it could inhibit capital flows into equities. Market pundits would take down their projection of a mid-teens price earnings ratio by a couple of notches. There could be a reverse flow out of equities into bonds, but I rate this as a low probability. Net, net of this supply and demand funds analysis for the stock market, we should see at least a couple of trillion flowing into stocks, maybe more. This sum is a big number for a market valued around $15 trillion. I wasn’t smart enough to buy gold which thrives on geopolitical unrest, but I did put new money into commodities, namely oil, and coal, copper and iron ore. If anything, growth stocks turn marginally more attractive, even richly priced properties like Amazon and Baidu whose top lines mushroom for years to come. Both Apple and Google posted way above consensus numbers. Somebody besides me must care, sooner or later. Apple now trades above its price point when the Steve Jobs bomb shell hit the tape.

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Kathleen E. Christensen: The False Choice: A Flexible Job or a Good Job?

February 13, 2011

Workplace flexibility: eighty percent of American employees say they want it, nearly half of job seekers rate it as a higher priority than salary, and thousands of companies have embraced it as an efficient way to keep employees happy and boost business productivity. But despite all this, there is still a widespread misconception that workplace flexibility is only appropriate to a certain type of job. A simple job, the thinking goes, can be accomplished by someone working off-site, or working non-traditional hours, or sharing a job with another part-time employee; but “serious jobs” still require rigid, traditional work schedules and set-ups. This line of thinking is epitomized by the dilemma facing a worker who wrote into The Wall Street Journal ‘s Ask The Juggle this week: The reader, a working mother, has an opportunity to step into a new job with her current employer that would allow her to work from home one or two days a week. The new job would give her flexibility to spend more time with her two young children….The problem is, the job isn’t that exciting, and she is overqualified for it. Taking it also wouldn’t help her resume much in any future job search… It’s not just working moms, but employees of all stripes who face this quandary: to take the flexible job or the good job? But it raises a more important question: why is this employee–clearly talented enough to hold a challenging position–only offered flexibility if she takes a worse job? Instead, why can’t she and her employer work together to find a way to make the job she has more flexible? The answer, of course, is that making a challenging job flexible is, well…challenging. But it’s not impossible. The pioneering employers who have won Alfred P. Sloan Awards for Business Excellence in Workplace Flexibility have shown that there are many different routes to workplace flexibility . Innovation in other countries has shown that even doctors, lawyers and business leaders stand to benefit from increased flexibility . As Sue Shellenbarger said in her thoughtful response to this reader, “most jobs require some sacrifices. Trade-offs like this are what make the juggle such a nonstop challenge. The right answer is different for everyone.” Perhaps working form home twice a week isn’t possible with this woman’s job. But maybe it is possible to shift when the work is done so that a spouse or other family member can be home when this mother is at work. Maybe it’s possible to let her share the job with another talented employee. Or maybe this mother and her employee need to come up with a completely new way to match this job with her life. The point is that every job, no matter how demanding or challenging, can be tweaked to make it more flexible. And, a wide array of research has shown that workers across the spectrum are more efficient when they have flexibility over how, when and where their work gets done. Perhaps the biggest misconception about workplace flexibility is that it means working less. It doesn’t. I have seen many examples of employees who get more work done when given flexibility in when, where and how they do their work. This isn’t about decreasing the number of hours someone works or giving them fewer responsibilities. It’s about customizing a job so that it fits with a life. Oftentimes this even means the employee works more. Almost always it means that they work better, are more engaged with their job, and less likely to leave the company. We need to move past this outdated image of a good worker as someone who has no life or family issues distracting them from work. A good worker is someone who figures out how to fit their job with their life and family responsibilities so that they are not distracted from either. Because of the many benefits it offers to both employees and employers, workplace flexibility is now included in the Department of Labor’s definition of a “good job.” Every business should make it possible for each employee to sit down with their manager and figure out how to make their job fit with their life. If they take the time to do this, they’ll end up with more productive employees and more efficient businesses. No talented employee should have to answer the question, “do I want a good job or do I want a flexible job?” Instead, each of us should be asking, “how do I make my good job a flexible job?”

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Gina Harman: Scaling Microfinance: An Economic Imperative

February 11, 2011

These are troubling times, as the spotlight on microfinance has recently led to unfortunate mischaracterizations and a rush to judgment. Emotions have been confused for facts and character assassination is used to negate the very real contributions in the fight against poverty. In the current media cycle, commercialization — rather than unsavory business practices — has been identified as the cause in the case to discredit microcredit. While the lives of hundreds of millions worldwide have been enriched by opportunity once unimaginable, the words of a few threaten to change the opinions of many — a dangerous situation, indeed. The achievements of microfinance on the international stage have been very real, with collective efforts bringing positive change to 150 million of the world’s poor and the industry as a whole aiming to reach the two billion people who lack access to basic financial services. As a recent article in The Guardian made clear : what’s hurting the reputation of the industry is “unscrupulous operators — wolves in sheep’s clothing flying the flag of microfinance, but employing the tactics of loan sharks.” The wholesale refutation of an entire nonprofit and social business sector that has helped millions worldwide is clearly not the answer. As my colleague Michael Schlein suggested in a recent New York Times letter to the editor , the solution is not to abolish microlending — but to demand sound and transparent regulation. As the microfinance industry has grown, approaches have also changed to reflect real opportunities, market differences, pressures, and real grievances. Some of these strategies include commercialization, IPOs and increased competition. Here in the U.S., domestic microlending strives to put the elements of that successful model to work in very different circumstances. From unregulated to highly regulated markets, domestic microlending has grappled with the enormous need — over 10 million small business lack access to fairly priced capital — to grow, sustain or start a business. That lack of access has resulted from many factors from business type, to risk profiles and to the very high cost of delivering both the dollars and the support services needed to improve success. For many years, much of the discussion surrounding U.S. microfinance has been about how different the model and the customers are from the international scene. Those comparisons have focused on the size of the loans made, the presence of banking institutions in the domestic market, loan default rates, and an underlying assumption that the land of opportunity simply provides for those willing to work hard. Though differences exist between domestic and international models, there is also great commonality. Broadly speaking, U.S. and international microlenders share an underpinning philosophy that sufficient access to small business capital can have lasting, positive change on communities and individuals, and be a source of larger social good. Domestic microfinance organizations have grappled with defining a delivery method that will dramatically increase the numbers of businesses they can serve. That means personal relationships that begin at the application and are sustained over the life of the loan, such as providing resources from coaching to networking and financial education. All of this adds costs, and can make scaling to meet that need very challenging. But scale we must because the rewards to the economy, communities, families, and individuals are simply too large for the country to ignore. A Bureau of Labor Statistics report issued in early January showed the economy added 103,000 jobs in December . While these figures were lower than several private surveys had predicted , it is worth noting from where those job gains originated. Local governments shed 10,000 workers in December, state employers neither added nor terminated workers, and corporations didn’t do much hiring, either. That means all of December’s modest gains came from private industry, with most of those new jobs coming from small and midsize businesses. With U.S. hiring making incremental inroads, small business owners and would-be entrepreneurs — many of whom live and work outside of the financial mainstream — will be looking for sources of capital in order to grow. These recent job trends only underscore the importance of domestic microfinance efforts — and suggest how it can play an enormous role in helping to bolster the nation’s economy, providing access to financial resources, education, and training.

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Rev. Al Sharpton: Paying for the Crimes of Others

February 9, 2011

On April 4, 1968, the world lost a pinnacle in the fight for humanity when our preeminent civil rights leader, Dr. Martin Luther King Jr. was viciously murdered. Although we are all familiar with his immeasurable struggle for equality and justice, many do not realize that an essential platform for Dr. King’s advocacy was a push for worker’s rights and the necessity of decent livable wages. Today, as states and municipalities across the nation face devastating budget shortfalls, the labor unions and workers that provide necessary services for us all are once again under attack. The state of New Mexico is unfortunately no different, but together we can intervene and protect the ability of workers to peacefully assemble, organize and demand fair benefits. On February 10th and 11th, I will be addressing union members, clergy, community organizers and everyday citizens from across New Mexico to discuss the integral relationship between labor movements and civil rights. Joining me at this pivotal two-day conference will be Lee Saunders, International Secretary-Treasurer for AFSCME (the American Federation of State, County and Municipal Employees). The two central themes of this vital event are: ‘Civil Servants: Pillars of a Civil Society’ and ‘Faces of Public Service: Thanking Those Who Serve Our Community’. New Mexico, like so many states across the nation, is suffering from some of the largest budget deficits in modern times. Facing a shortfall of an estimated $400 million next year, New Mexico’s legislature proposed slashing the state budget and consequentially slashing the basic benefits countless workers dedicated their lives securing. At a time when so many families are struggling to simply put food on their tables, Governor Martinez of New Mexico would like state workers to contribute even more into their own retirement plans. After decades of organizing and pushing for fair pay and decent benefits, those that provide many of the services all New Mexicans greatly rely on are once again being asked to pay for the crimes of others. When the economic recession of 2008 struck the nation, virtually everyone agreed that Wall St. excesses and corporate greed created a dangerous scenario by which the rich continued to amass wealth, and the working-class/poor suffered increased financial hardship. And today, as unemployment remains disturbingly high, foreclosures continue at alarming rates and the average citizen has to stretch his/her dollars even further, why is the responsibility of rectifying our budgets being unfairly placed on workers? Why must unions be forced to resort back to the days when individuals had no rights and employers could systematically oppress and take advantage of whomever they pleased? And when workers were not the ones responsible for the worst financial calamity ever witnessed since the days of the Great Depression, why must they be the ones to continuously bear the brunt of sacrifice? On the eve of the horrific murder of Dr. King in Memphis, Tennessee in ’68, he addressed sanitation workers and public employees who were members of the local chapter of AFSCME. Fervently pushing for their ability, and the ability of all across the country to organize and demand livable wages, Dr. King gave his life in the struggle for human dignity for all peoples. As Lee Saunders and I gather with union workers and community organizers in New Mexico, let us keep Dr. King’s vision and passion alive just as it was decades ago. When states and municipalities work to salvage their budgets, let’s ensure that the burden isn’t unjustly placed on those that are already suffering the most under these tumultuous times. Let us stand in unison once again.

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Diane Dulken: How Long Should Electronics Last? My Calculator, the E-Hero

February 4, 2011

My guest room closet is filled with dead electronics waiting to be recycled, but I marvel at my nearly 30-year-old calculator. It still works, and so do the original batteries. I have yet to find an expert who can explain how this is possible, but every month when I balance my checkbook (do other people still do this?) my calculator gives me the correct answers. My calculator is so old it’s listed on a website called Vintage Calculators. The original AA batteries are so old they are Made in Japan. Yet, they still work. I’ve become emotionally attached to my Sharp EL-505 ELSI Mate. While shiny and new is nice, I hope I’m not alone in appreciating craftsmanship and durability — in electronics too. I bought my first Apple laptop six years ago because a colleague was so happy with his experience, he raved and raved until I jumped from my PC ship. I know this Apple evangelism is not unusual and I’m not holding Apple up as perfect, and neither is Greenpeace’s Guide to Greener Electronics. But it’s worth noting that a company can drive new sales not by planned obsolescence (ensuring that products will have a short life span so customers must buy new ones), but because superior craftsmanship and durability are their own sales tools and have the power to create new customers. “People used to take real pride in longevity,” a man named Jim Puckett told me. “‘Wow, this Rolex is still going strong after 30 years.’ That was a source of pride. Now people are looking for the latest and greatest. The incentive is not there (for products) to last a long time.” This is important to Jim, because as head of the Basel Action Network, he works every day with the dark side of electronics. As B.A.N. and CBS’ 60 Minutes showed in a heartbreaking investigation, our old computers, cell phones and other e-equipment contain many hazardous materials that often end up shipped to countries with weak controls. There, they poison the poor and vulnerable who “recycle” them. There’s a world of reasons for industry and customers to seek new business models and better stewardship over e-production, e-gadgets and e-waste. In the Congo, one of the world’s most brutal wars is financed by the mining of tin, tantalum (coltan), tungsten and gold, some of the rare minerals that power our iPods, cell phones, laptops and other devices. Then there’s the increasing concern over supply. The New York Times recently reported that China is tightening controls on the export of the rare earth minerals that are essential ingredients in everything from smart phones to military applications and new green technology, including electric cars and solar panels. And that control has the potential to disrupt markets. Or as Tech Radar asked: Yes, these ingredients are hazardous to mine and dangerous to manufacture, “But what if they run out?” Puckett told me of the need to develop new business models to improve product durability and stewardship, and of the need for companies to produce products with less hazardous materials as well as to properly recycling them at the end of their life span. Creating newer, faster and cooler electronics is still the focus over creating products that last. But I’ve found small signs in my personal life of the durability of some e-products, and of manufacturers who consider some of the mistakes that I and other consumers make. My cell phone lasted for years, even though I dropped it fairly often. On asphalt sidewalks as well as my living room floor. I appreciated that it was built for my “real world conditions.” The flip phone finally died when I left it in a jacket pocket and did the laundry. Both the wash and dry cycles. My Apple laptop endured years of daily and heavy use for entertainment and work, for music, movies and spreadsheets. I never spilled coffee or anything else on it. But I once got tangled in the power cord and knocked the laptop off the table. It survived. It would have lasted longer than five years if I hadn’t, on one pre-coffee morning, lost my grip walking down the stairs. Then there’s my calculator. I will miss it when the magic eventually fades and the batteries finally fail. After 27 years or so, every time I turn it on, I wonder “How long can this last?” Only recently have I had the flicker of a new idea: Will it outlast me? At midlife, I figure I have a possible 30 or 40 years ahead of me. And my Sharp EL-505 — how many years does it have? How durable can we make our machines?

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Grant Cardone: Never Be Ripped off by Credit Cards Again

February 2, 2011

Use the credit card companies and don’t let them use you! It is unnecessary for anyone to ever find themselves the victim of their credit cards. Because the current credit card industry is under tremendous attack by things like the CARD Act Implementation, competition, and the threat of a shift from plastic to mobile credit, the smart consumer is in a great position today if they know how to play the game. While credit cards have gotten a bad reputation for victimizing people with late fees, penalties, and high interest rates, the informed customer is in a position to turn the tables. Here are some secrets to help you take advantage of the credit card companies rather than having them take advantage of you. 1) Be in Control: Most people get a credit card as victims and agree to being taking advantage of. Reverse this by making your decision to only use them for their convenience factor without paying to do so. I never pay interest, sign up fees or late fees on a card — I use them. They don’t use me. 2) Pay Off the Balance in Full: I never carry a balance with the credit card company no matter how attractive the rate. If you can’t pay it off at the end of the month, don’t use it. This doesn’t take just commitment, but it takes an agreement from everyone in the family that credit cards are only used as an accounting device, its convenience, and only when you can pay it off. 3) Negotiate your rate: If you are going to have a recurring balance, which I don’t recommend, call and negotiate directly with the company. You have every right, and should, call and ask to have the advertised rate lowered. Also, the better your credit and payment history, the better your chances of selling this to them. 4) Customize Your Due Date: Let’s say your paycheck comes on the 15th and 30th, but your credit card bill is due on the 5th. To improve your cash flow and not put yourself under unnecessary pressure, coordinate the due date that best fits your cash flows. You don’t need stellar credit to make this call and ask for the change. 5) Ask to Have a Late Fee or Interest Fee Removed: If you have a good history of on-time payments and then find a late fee or interest fee on the statement because you didn’t get your payment in by the due date this time, ask that it be removed. I have done this successfully on over a dozen occasions. Ask for mercy that they remove the fee to reward you for your past good behavior. If the person you speak with can’t do it, ask for a supervisor and make it clear that you are willing to close the card out if they don’t remove it. 6) Negotiate the Annual Fee: There is tremendous competition for your business today. There’s no reason for you to pay for the use of a credit card. Even a $35 fee a year over a period of 5 years is $175. I’d personally much rather spend that on my wife. Tell the issuer that you want to use their card but don’t want to pay the fee. Chances are they won’t want to lose your business. While credit cards can be seen to victimize people they can also be an asset when used correctly. They provide convenience, act as the perfect accounting for expenses, accumulate travel points and cost you nothing. As long as you can be aware and responsible of how you make use of your credit cards, you’ll find that they can be great assets to your life. With estimates of over 1 billion Visa, Mastercards and Amex cards in circulation just in the US, it would be important that you make a decision to use your credit cards to benefit your household rather than participating in the credit card company victimizing you. Grant Cardone is a NY Times Best Selling Author and Sales Training Expert.

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At Brooklyn Law, A Tech-Focused Clinic Helps Startups Off The Ground

February 2, 2011

NEW YORK — Jonathan Askin is sporting a long faux-leather trench coat and a shaved head as he enters his first tech meet-up of the night. On the second floor of SoHo’s Scholastic building, the congregation is already underway. A table at the back of the room is strewn with delivery pizza, surrounded by networking techies shaking hands and chatting idly about venture funds, Silicon Alley, and location-based services. Passing through this dense crowd, Askin is simultaneously greeting and being greeted by friends, allies, acquaintances, and occasionally, former clients. His role is both ambassadorial and communal; as the founder and director of the Brooklyn Law Incubator & Policy Clinic , his is a well-known and welcome face. The clinic, or as it’s known, BLIP, is the culmination of Askin’s nearly two decade-long legal career. BLIP functions as a full service tech-oriented law firm leading its students through the full sweep of transactional law, policy and politics, technology and entrepreneurship necessary in a web-enabled world to provide pro-bono legal help to tech startups that really need it. The goal: training the lawyer 2.0 for the digital era. BLIP is a legal outpost on the boundary of old and new. As the world catches up to the web, companies, governments and ordinary web users are grappling with unfamiliar issues regarding privacy, transparency, communication and more. The current crop of attorneys have to deal with the overwhelming amount of information freely available on the web as well as the complicated — and unforeseen — legal quandaries that develop as a result. The startups BLIP assists will be the pioneers of future corporate structures, even as the innovations they introduce to the digital infrastructure continue to morph the human experience. “Lawyers are still the only people who use fax machines — a demonstration of our Luddite tendencies,” said Askin. “Change comes a lot slower to legal professions than the tech/entrepreneurship world. We’ve got to learn how to keep up. We’ve got to use the tools that other entrepreneurs have used.” Askin’s own career reflects the pattern for BLIP’s multifaceted approach. Born to two civil rights attorneys, Askin started his career in the same field, before he wearied of waging “trench warfare” to hold the line on issues, which, as he put it, “had been fought 30 years ago.” Then, the Internet came along. “This is a moment that a young lawyer hasn’t seem since the Civil Rights Act,” he remembers thinking. “We’re going to create new law that is going to change the course of history for the next few decades if not longer. We are writing the laws that will shape our digital future.” After leaving civil rights law, Askin began to move towards tech-related law, putting in time at the Federal Communications Commission, out in California working directly for startups, and playing a role in President Obama’s tech task force during the election. “I was in D.C. and I was a policy advocate and I thought I was a tech attorney. We weren’t tech attorneys. We were lobbyists who knew a little bit of the jargon,” he said. “I started working with tech startups — everything they know is operations and transactions — they don’t know the first thing about policy or politics. It’s very difficult for any attorney to represent the needs of a tech startup.” BLIP is Askin’s attempt to fill the void of lawyers fully equipped with the range of experience necessary to work in the tech startup world. In many ways, BLIP offers Askin the opportunity to share what he’s learned with law students about to start careers in a web-saturated world. “Every single disparate thread in my life had a very circuitous legal path that has inevitably led me to exactly where I am right now,” he said. “I was a dilettante — a smattering of policy, a smattering of transactional, a smattering of civil rights work, but without having had that circuitous path, I’d be a little too myopic myself. Now I feel like I’m the blended mashed-up attorney that I’d like to see a lot of my students become.” Or, as current clinician Jameson Dempsey described it: “BLIP is Askin, Askin is BLIP.” Dempsey is one of the two students who have followed him out this night, though seminar ended just an hour before, and law school offers no extra credit. But this kind of immersion in startup culture is important for any tech-minded lawyer. “He’s actually the first professor I’ve ever had to assign a blog roll,” said Dempsey. “Which I thought was really cool.” At the second meet-up, the techies amble around with beers in hand, or sit quietly with their iPads. The moderator asks everyone to introduce themselves by name, interest, and Twitter handle. Askin and his students comply on all three counts; attorneys you can tweet at. “It’s his vision that leaves fingerprints all over it. What he’s opened the students up to is incredible,” said Tom Chernaik, who worked with BLIP on a startup called CMP.LY , “He’s such a fixture in the New York scene. A true lifeline into the New York tech scene is something these students are going to get out of him.” Through these meet-ups, BLIP has fostered relationships with a number of startups and tech professionals, finding a number of prospective clients in the process. One of the clients BLIP reached through the scene is MainStreetSocial . Helping local governments monetize their websites with online advertisements, as well as to leverage social media to improve contact with constituents, MainStreetSocial has had to deal with both the ordinary business of starting a company as well as with broader issues involving the legality of selling ads on government sites. Ryan O’Donnell, one of the founders of MainStreetSocial, first heard Askin speak at a tech event. “Jonathan was at the entrepreneurs roundtable and I heard him say, ‘At BLIP we do X, Y and Z for startup companies — if you’re interested find a way to get in touch with us’” he said. O’Donnell immediately found a way to connect with Askin, who took the initial meeting. “Thirty seconds into the conversation, I went through my quick elevator pitch of what we did, what our challenges were, and he got very excited,” O’Donnell recounted. “He goes, ‘I have what I think would be the perfect team for you.’ I’m going to tell them about you and I want you to come back in and meet with them.” The students helped O’Donnell with research, and drafted a legal memorandum. “We were then able to take it out to current clients, as well as prospective clients and say, ‘Here’s a memorandum that says, yes you can put advertisements on your websites if you follow these criteria,’” he said. “It’s the first time I’ve encountered anything like that.” For the students in the BLIP clinic, working with real clients is a major part of the appeal. With Askin as a pedagogical guide, students are deployed into real legal work for clients facing tricky issues ranging from drafting privacy policy, to incorporation, to wider policy related questions. And as the startups they work with grow into full-fledged companies, other benefits present themselves as well. “Once we do get to scale and are a larger company, that’s the first place I’m going to look when making internal hires for legal counsel within the company,” said O’Donnell. BLIP’s students are just as dedicated as their professor. BLIP has no room for the half-hearted. As the most popular clinic at Brooklyn Law, no first-year students are admitted, and almost no one is admitted on their first application. Even so, the size of the clinic is twice that of the next largest clinic in the country. There’s no doubt that part of the clinic’s draw is the chance to work under Askin. “He has a million ideas and he has a million projects he wants to work on and one person can only work on so many projects,” said Dempsey. “And so having twenty students who are really gung-ho about making a difference in the community, about learning more about tech law, about experiencing the breadth of the projects that we have in the clinic allows him to realize a lot of his visions … and the man has vision.” But apart from his position as professor, Askin also seems to infect his students with his overarching notion that the work BLIP does is truly the work of the future. “I see his role as very much inspirational, the guru, the person you go to, the person who just drives you on a day-to-day basis, who says, ‘Remember what we’re doing here, we’re trying to develop these skills,’” said Julie Adler, another clinician. “It’s more about the greater mission, and he’s always trying to keep our sights on that mission.”

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Naveen Jain: Ten Secrets To Entrepreneurial Success

February 2, 2011

I’ve been an entrepreneur most of my adult life. Recently, on a long business flight, I began thinking about what it takes to become successful as an entrepreneur — and how I would even define the meaning of “success” itself. I’ve given a lot of talks over the years on the subject of entrepreneurship. The first thing I find I have to do is to dispel the persistent myth that entrepreneurial success is all about innovative thinking and breakthrough ideas. I’ve found that entrepreneurial success usually comes through great execution, simply by doing a superior job of doing the blocking and tackling. But what else does it take to succeed as an entrepreneur — and how should an entrepreneur define success? Here’s what I came up with: 10. Passion You must be passionate about what you are trying to achieve. That means you’re willing to sacrifice a large part of your waking hours to the idea you’ve come up with. Passion will ignite the same intensity in the others who join you as you build a team to succeed in this endeavor. And with passion, both your team and your customers are more likely to truly believe in what you are trying to do. 9. Focus on the mission Great entrepreneurs focus intensely on an opportunity where others see nothing. This focus and intensity helps to eliminate wasted effort and distractions. Most companies die from indigestion rather than starvation, i.e. companies suffer from doing too many things at the same time rather than doing too few things very well. Stay focused on the mission. 8. Hard work breeds luck Success only comes from hard work. We all know that there is no such thing as overnight success. Behind every overnight success lies years of hard work and sweat. People with luck will tell you there’s no easy way to achieve success — and that luck comes to those who work hard. Successful entrepreneurs always give 100% of their efforts to everything they do. If you know you are giving your best effort, you’ll never have any reason for regrets. Focus on things you can control; stay focused on your efforts and let the results be what they will be. 7. Celebrate milestones The road to success is going to be long, so remember to enjoy the journey. Everyone will teach you to focus on goals, but successful people focus on the journey and celebrate the milestones along the way. Is it worth spending a large part of your life trying to reach the destination if you didn’t enjoy the journey along the way? Won’t the team you attract to join you on your mission also enjoy the journey more as well? Wouldn’t it be better for all of you to have the time of your life during the journey, even if the destination is never reached? 6. Gut instinct There are too many variables in the real world that you simply can’t put into a spreadsheet. Spreadsheets spit out results from your inexact assumptions and give you a false sense of security. In most cases, your heart and gut are still your best guide. The human brain works as a binary computer and can only analyze the exact information-based zeros and ones (or black and white). Our heart is more like a chemical computer that uses fuzzy logic to analyze information that can’t be easily defined in zeros and ones. We’ve all had experiences in business where our heart told us something was wrong while our brain was still trying to use logic to figure it all out. Sometimes a faint voice based on instinct resonates far more strongly than overpowering logic. 5. That faint voice Be flexible but persistent. Every entrepreneur has to be agile in order to perform. You have to continually learn and adapt as new information becomes available. At the same time you have to remain persistent to the cause and mission of your enterprise. That’s where that faint voice becomes so important, especially when it is giving you early warning signals that things are going off-track. Successful entrepreneurs find the balance between listening to that voice and staying persistent in driving for success — because sometimes success is waiting right across from the transitional bump that’s disguised as failure. 4. Smart, different people Rely on your team. It’s a simple fact: no individual can be good at everything. Everyone needs people around them who have complimentary sets of skills. Entrepreneurs are an optimistic bunch of people and it’s very hard for them to believe that they are not good at certain things. It takes a lot of soul searching to find your own core skills and strengths. After that, find the smartest people you can who compliment your strengths. It’s easy to get attracted to people who are like you; the trick is to find people who are not like you but who are good at what they do — what you can’t do. 3. One-page business plan Execution, execution, execution – unless you are the smartest person on earth (and who is) it’s likely that many others have thought about doing the same thing you’re trying to do. Success doesn’t necessarily come from breakthrough innovation but from flawless execution. A great strategy alone won’t win a game or a battle; the win comes from basic blocking and tackling. All of us have seen entrepreneurs who waste too much time writing business plans and preparing power points. I believe that a business plan is too long if it’s more than one page. Besides, things never turn out exactly the way you envisioned them. No matter how much time you spend perfecting the plan, you still have to adapt according to the ground realities. You’re going to learn a lot more useful information from taking action rather than hypothesizing. Remember: stay flexible and adapt as new information becomes available. 2. Integrity I can’t imagine anyone ever achieving long term success without having honesty and integrity. These two qualities need to be at the core of everything we do. Everybody has a conscience — but too many people stop listening to it. There is always that faint voice that warns you when you are not being completely honest or even slightly off track from the path of integrity. Be sure to listen to that voice. 1. Giving back Success is a long journey and much more rewarding if you give back. By the time you get to success, lots of people will have helped you along the way. You’ll learn, as I have, that you rarely get a chance to help the people who helped you because in most cases, you don’t even know who they were. The only way to pay back the debts we owe is to help people we can help — and hope they will go on to help more people. When we are successful, we draw so much from the community and society that we live in we should think in terms of how we can help others in return. Sometimes it’s just a matter of being kind to people. Other times, offering a sympathetic ear or a kind word is all that’s needed. It’s our responsibility to do “good” with the resources we have available. Measuring Success Hopefully, you have internalized the secrets of becoming a successful entrepreneur. The next question you are likely to ask yourself is: How do we measure success? Success, of course, is very personal; there is no universal way of measuring success. What do successful people like Bill Gates and Mother Teresa have in common? On the surface it’s hard to find anything they share — and yet both are successful. I personally believe the real metric of success isn’t the size of your bank account. It’s the number of lives where you might be able to make a positive difference. This is the measure of success we need to apply while we are on our journey to success.

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Carol Realini: Davos Hot Topic — Inclusive Growth Through Mobile Banking

January 31, 2011

A key theme at this World Economic Forum is inclusive growth. What does that really mean, and why is it important? It means that when developing countries and emerging markets experience growth, the poor people in those countries should participate and benefit. For example, India has 300 million people who are participating in the strong growth that is underway. Their incomes are growing; their wealth is increasing; and the environment they live in is improving. But, the lives of the remaining 700 million people in India are basically unchanged. Inclusive growth means the 700 million will also experience the benefits of growth versus being left out. Most people reading this blog will have trouble visualizing a life without banking. A poor person in India or Africa can live more than eight hours or more from a bank branch, so keeping money in a bank is both inconvenient and impractical. As a result, they pay for everything in cash and are always paid for work or services in cash. This can make paying for essentials inconvenient and expensive. Just paying bills can involve travel and long queue times. If family members live or work in another place, sending or receiving money can be inconvenient and expensive, too. So people who have the greatest need, have the greatest cost. Today, there are more five billion mobile phones in the world, but only 1.6 billion bank accounts. This creates an unprecedented opportunity to use mobile access to bridge this gap by providing affordable financial services to people with a mobile phone who are currently underserved by traditional banking. This is my passion, this is my company’s mission. Affordable financial services will empower their life and work. Globally, the number of mobile banking users is expected to surge more than sixteenfold, to 894 million by 2015, according to Berg Insight, an industry research firm based in Stockholm. That’s up from 55 million in 2009. So the majority of mobile banking customers in 2015 — 78 percent, or 697 million people — are in Asia, Africa, the Middle East and Latin America. Many of those 697 million people will have previously had little or no access to banking. My personal passion is to see these numbers higher in 2015 — I’d like to see 400 million mobile bank accounts in India alone. The desire and building blocks are in place. Getting it done will take hard work — not rocket science, but complex execution is required. Scale will come from investment and collaboration. Those of us who have worked throughout the world on mobile banking have seen firsthand the importance of strong partnerships and other critical success factors. This year at Davos, I was impressed with the new awareness of the potential power, business opportunity, and social mandate to make banking available to all mobile users. In many sessions the topic was inserted. Sessions focused on mobile financial services, were well-attended and the energy level was high. I’m sure that this interest level will translate into increased market momentum for solutions. The only discouraging note came from an undercurrent of fragmentation — too many players thinking they can do this as an independent provider, and not being part of a larger ecosystem. This will hamper growth and stunt value. It won’t be visible in the first wave, but the ceiling will exist because fragmentation lowers value and creates market confusion. We saw this when computers were connected in groups, but not in one global network, when bank ATMs only supported one bank and not all banks. Adoption happened, but plateaus happened that could only be addressed by an open interoperable model. Closed, non-interoperable systems mean fewer participants; fewer users; fewer uses; and far less value. Those who know me know I am a very passionate, optimistic person. So, it’s no surprise that I leave Davos more optimistic than when I arrived. The awareness, investment, and momentum of mobile banking is building. The early part of most new implementations will still take longer than we want to scale, but growth after the tipping point will be much faster than expected. This makes the possibility of banking for all a real possibility for the world. Not so hard to believe, since we are so close to achieving universal communication with those 5 billion+ mobile phones.

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Michael J. Critelli: My Highly Improbable Journey From CEO to Contemporary Urban Film Producer

January 28, 2011

Growing up, my family felt unusual empathy with black people. Because my mother worked as a public health nurse’s aide, we got to know her black professional nursing friends. I also grew watching incomprehensible brutality against well-behaved black people in the South on TV. My parents had been direct victims of discrimination when they were younger. Even in my generation, attending schools dominated by members of other ethnic groups, I experienced more subtle forms of discrimination, including degrading ethnic jokes from some classmates. I spent 30 years at Pitney Bowes, 11 as CEO, because Pitney Bowes welcomed all kinds of people. Walter Wheeler, its longest serving CEO, had been a National Urban League board member, because, like Pitney Bowes, the NUL invited everyone, black, white, young, old, male, female, Democrat or Republican, to aspire to the American dream. I accepted the NUL’s invitation to join its Board in 1997, became its chairman for five years, and served for 13 years. Both organizations created and celebrated success stories for women and people of color. In 2004, I discovered such a story. My younger son’s white Swedish chess coach told me he had secured a golf scholarship to Tennessee State University, a historically black college. The coach was a black woman, Dr. Catana Starks. When she began coaching in 1988, she fielded a black golf team, but she was forced to recruit mostly or all white non-U.S. golfers after the mid-1990′s. Two insights came together to make me passionate, even obsessive, about making a film about her story: Golf had evolved from a relatively inexpensive sport open for elite competitive access to most young people of most income levels to an extremely expensive sport which required a great deal of wealth. Young black people did not have access to private country clubs, although I encountered some of them on the public course on which I played, but they found a way to excel at golf. Becoming a caddy was how young black people got access to golf instruction, equipment and facilities to achieve elite performance levels. Country clubs phased out caddies, because they saw more profit potential renting golf carts. Coach Starks recruited abroad, because middle-income young people were more likely to learn golf through caddying or government-subsidized golf academies. Although Title IX had opened up big opportunities for girl athletes, the financial and competitive pressures of coaching had shrunk the number of women coaches. Coach Starks, who had grown up in the Jim Crow era in Alabama, and whom I met in 2006, reminded me of my late mother: short and soft-spoken, but very tenacious, inspirational, caring, competitive and visionary woman. She coached golf successfully for 18 years, although the financial wear and tear of coaching and travel caused her to retire from coaching at age 60 in 2006. Her most famous golfer was Sean Foley, who has recently coached Tiger Woods, but she developed other golfers, like San Puryear, Michigan State University’s golf coach, and Robert Dunwiddie, who is a European tour player. I was determined to make a film about her life to prove that women like my mother and Coach Starks deserved to prove their ability to succeed in a man’s world. Why a film? Entertainment is the most powerful medium for changing minds. After all, I was inspired to be a lawyer because I watched Perry Mason when growing up. In November, 2009, I asked my son Mike, who had graduated from the University of Southern California in 2008, to write a screenplay about the Coach Starks story. In March, 2010, I contacted Pierre Bagley, an African-American filmmaker, whom I met when serving as the Chairman of the National Urban League Board of Trustees. We decided to form Gyre Entertainment, a firm with a mission to create film and other entertainment content of strong interest to contemporary urban audiences, with the Coach Starks film as our first project. The film, called From the Rough , stars Taraji P. Henson, an Academy Award nominee for The Curious Case of Benjamin Button , as Coach Starks. Tom Felton, from the Harry Potter series, Michael Clarke Duncan, an Academy Award for The Green Mile , are other members of an outstanding cast. We are targeting a Fall 2011, theatrical release. Our Gyre team is attending the PGA of America merchandise show in Orlando, Florida. We share an interest in expanding access to golf for African Americans with the PGA and the merchandisers attending the show. However, I will also think about my mother, Coach Starks, and countless other heroic women.

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Federal Government Operating Status For Thursday

January 27, 2011

As the Washington D.C. metro area gets hammered by snow, residents are on edge about the OPM Federal Government Operating Status for Thursday, Jan. 27, 2011. Notorious for website outages , the best place to find out whether the status of the U.S. Office of Personnel Management (OPM) is “open” or “closed” could be right here on The Huffington Post. This post will be updated as soon as there is a verdict. No word yet, however. But D.C. Public Schools and the D.C. Government have already declared themselves CLOSED for Thursday. That said, OPM can be unpredictable. Today, Wednesday, Jan. 26, OPM announced that offices were OPEN but workers “should depart two hours earlier than their normal departure time from work due to impending snow.” That announcement was “liked” by 10,000 Facebook users on the OPM site . The OPM Facebook page is already getting quite busy with messages from concerned citizens. Said Angela Renea Waddell, “I hope the Feds are closed tomorrow. I need 1 day off…or two hour delay.” Carla Carly Evans asked for a liberal leave, noting, “It should be my choice if I want to risk my life and property getting to work.” Some have been venting to OPM for how it handled today. Omid Jahanbin wrote, “OPM has shown a complete disregard for the safety of DC area residents by the stunt you have decided to pull today. Instead of having the effective intelligence to call the day off, you have chosen to keep government open until the rush hour.” Check back here for the latest on the OPM Federal Government Operating Status for Thursday, Jan. 27, 2011.

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Carolyn Ziel: Are You Over-Doing All the Right Things?

January 24, 2011

Why are some entrepreneurs more successful than others? This is a burning question for many over busy, over tired and over struggling entrepreneurs whose energy, drive and motivation have evaporated as they do ‘all the right things’ and yet they aren’t moving forward. Just because you think you’re doing ‘all the right things’ if they aren’t tied to your core mission and passion, they might not be right for you. While certain structures do need to be in place, in this ever-changing business environment you don’t have to follow a cookie cutter model if it’s not for you. At first, it may sound too ‘new age’ to incorporate your own ‘happiness’ into your strategic plan. Yet, according to Daniel Pink, author of DRIVE , “The secret to high performance and satisfaction–at work, at school, and at home–is the deeply human need to direct our own lives, to learn and create new things, and to do better by ourselves and our world.” This is not only a formula for happiness; it’s a formula for success. Unfortunately for so many of us, somewhere along our entrepreneurial journey we become inundated with what we think we should be doing. The goals we set aren’t tied to our passion, but many times to extrinsic motivators like money and we lose motivation, clients and sales. We also lose our happy selves. So what do you do? Re-discover what motivates you. Re-think the original reason you started your business. Re-visit what your strategic plan and include words like happiness, satisfaction and fulfillment in your definition of success. Without intrinsic motivators, chances are against you achieving your goals because you’re likely to burn out along the way! According to Daniel Pink, “Rewards…can transform an interesting task into a drudge. They can turn play into work…by diminishing intrinsic motivation, they can send performance, creativity and even upstanding behavior toppling like dominoes”. Researchers have found that when creative people create for the sheer joy of creation, they are more productive and happier. In addition, their work is of a higher caliber. Another thing you can do is join me on January 28th and 29th in Ontario, CA where I will be attending Lisa Marie Platske’s LEADERSHIP SUCCESS SUMMIT 2011 . Lisa Marie is the award winning CEO of Upside Thinking , an international leadership development company committed to transforming the personal and professional lives of leaders. This year’s summit theme is, “Moving Forward: Prosperity in Changing Times”. Lisa Marie believes that “a lot of people aren’t moving forward, even with money and sales skills…sometimes the only things they need are small steps to attract clients and profitability and …an action plan.” Doing what we love needs to be balanced with structure and finding our own path. How do you balance what you love with what you have to do to run the day to day of your business? Lisa Marie’s answer is to “invest in what you do best and network the rest… otherwise your battery dies”. Lisa Marie ensures that entrepreneurs will leave her conference with tools to move forward. Included in these tools will be the power to reconnect with intrinsic motivators as well as learning how to “network the rest”. “This year’s Leadership Success Summit is all about a path to success that’s a better, simpler, and a more authentic way to create prosperity at every level of your business – and your life. … It all starts with where you are right now…” That doesn’t mean undermining the solid work you’ve done and your current accomplishments. It just means that, in this market, there is a lot of room for creativity. Entrepreneurs need to turn these strategies into real-life actions to move forward. This begins with connection. It might mean reconnecting to what your personal motivators are and then connecting with other entrepreneurs to create strategic partnerships and long term business friendships. Connection, in all aspects, is one of our most valuable assets in today’s marketplace. “The power of motivation and increasing your sphere of influence” is one of Lisa Marie’s sure fire ways of moving forward. She believes, “You have to look at motivation like a car battery and what keeps it moving is that internal piece and there is a big difference between movement and motivation.” Lisa believes that her clarity of vision drives her activities and they are based on what is meaningful for her. In other words, her actions are in alignment with her core mission. We can’t ignore what we love any longer. Science is supporting us now! Drawing on four decades of scientific research on human motivation, Daniel Pink exposes the mismatch between what science knows and what business does–and how that affects every aspect of life. If we spend the majority of our days doing what we love, we will be more successful. We will easily stay motivated as we move forward.

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Robert Lenzner: Plutocracy;The Rich Elite And The Rest Of Us

January 23, 2011

The controversy over the disparity between the rich and the rest of us has hit the covers of two emblematic fountains of ideas; The Economist and The Atlantic Monthly. The mention of a risk to society of “an entrenched plutocracy,” brought that almost archaic word back to me. I had used it on the front-piece of my best-selling biography of J. Paul Getty, “The Great Getty” some quarter of a century ago. I quoted the caustic critic H.L Mencken, who wrote “”The plutocracy, in a democratic state, tends to take the place of the missing aristocracy, and even to be mistaken for it.. It is, of course, something quite different. It lacks all the essential character of a true aristocracy: a clean tradition, culture, public spirit, honesty, courage- above all, courage. It stands under no bond of obligation to the state; it has no public duty; it is transient and lacks a goal…Its main character is its incurable timorousness; it is forever grasping at straws held out by demagogues… its dreams are of banshees, hobgloblins, bugaboos.” Applied to Getty, who imagined he was the reincarnation of the Roman Emperor Hadrian, and who admired Hitler as a kind of 20th century Hadrian, Mencken was partially right on. Today, though, when I think of Warren Buffett and Bill Gates rounding up billionaires to give away half their fortunes, when I see Frank Giustra, along with Carlos Slim committing to improving the life of the poor in mining nations like Peru and Colombia, when I read about hedge-fund maven adopting schools, and Zuckerberg giving $100 million to Newark, I reckon we have come a very long way since Mencken wrote that cutting description of the moguls. He wasn’t describing Carnegie or Rockefeller or Rosenwald, either, who understood instinctively that theirv wealth was meant to be used in making society better for the rest of us. In the meantime, I’m waiting to see if and how the plutocrats of Russia will change their image as “Oligarchs”- not very democratic is it. Or what role the gazillionaires of China and India and the rest of the Asian subcontinent will interact with their rulers and the billions of those ruled. Let’s hope we’re going to get a new 21st century meaning of Plutocracy. And The New Elite will be more than hopping on their private jets to move from castle to castle to yacht, pushing up the prices of art and trying to emulate the Roman Emperors, the 18th century French nobility or the Russian Tsars. More Warren Buffett wannabees please.

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Peggy McColl: Is There No End in Your Weekend?

January 19, 2011

Weekends used to be just that, the end of your week. The end of your work for some well-deserved rest and relaxation. As a solo-preneur or entrepreneur it seems so much harder to have established work days and hours. I have the luxury of working from home, but that also blurs the line between work and home. Even if I close the office door and completely turn off my computer I still have the sense that emails, orders, questions and new ideas are just behind the door, waiting for me. The great news is we are connected 24/7 — yea! The challenge is to create the balance that allows you to live a life, not just a career. If we look at the world today and the way it was 20 years ago, even if you had your own business you could still leave your work and be disconnected. On my website I list the hours for phone calls in an attempt to create clear business hours and availability for my clients. I am not a 24/7 shop and I do what I can to remind people there are boundaries for my business. It still surprises me when I get a follow up email on a Monday morning asking me to reply from their original message sent Friday afternoon or even Saturday. Really? One of the strategies Tim Ferris talks about in the 4-Hour Work Week is to let people know when you are working and when you are out of reach. You can create an auto-responder to emails saying you are in the middle of a project and will check email once a day, twice a day, etc. You can also post a status update on your social networking sites that you do not have access to email during a particular day, etc. (Without telling them that you are vacationing in Jamaica and your house is empty for burglars.) A nicely worded Do Not Disturb message will be well received and respected. I love my work but I don’t make it my life. Too often I see people in restaurants who have their phone on the table while they are having dinner with friends and family. As difficult as it is, schedule time together, cherish the connection and the conversation and leave the phone alone. That email can wait, the text is not an emergency and the phone call is better enjoyed when they have your full attention. To all entrepreneurs I say “take back your weekends and evenings!” Schedule time off in your calendar. Make sure you have entire evenings and days without work commitments. Turn your computer completely off and close the office door. You need time to recharge and let your brain relax. The more down time you get to enjoy the more aware you will be about respecting other people’s time. I am waiting to see who will be the first person to develop a 12-step program for internet addiction because I think I need a sponsor. Until that time, I set my own limits, establish boundaries and respond to people in a very timely manner without completely losing myself in my work. Give it a try. You may surprise yourself with how great it feels – without the guilt. If you are reading this in the middle of the week, what will you proactively do to make time for yourself this weekend? What boundaries are in place to make sure there is an end in your weekend? Please share your comments. Peggy McColl is a New York Times best-selling author and an internationally recognized expert in the field of personal and professional development and Internet marketing. As an entrepreneur, business owner, mentor and professional speaker Peggy has been inspiring individuals to pursue their personal and business objectives and achieve ultimate success. She provides effective Internet marketing solutions for entrepreneurs, authors, publishers, professionals, and business owners, who want to establish an online presence, achieve bestseller status, build their brand, grow and/or expand their business online. You can find out more about Peggy at her website, Destinies.com .

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Delia Lloyd: 5 Concrete Steps Toward Career Change

January 16, 2011

“I don’t want to end my life,” a friend told me recently. “I just want to exit it. Sneak out the back door when no one’s looking.” She was talking about her job, which she hates, and her career more generally, which she’s (clearly) ready to leave. But undertaking a major career shift can be daunting — and terrifying. And many of us, faced with the sheer enormity of it all, opt to remain where we are rather than embarking on a project of this magnitude. If you’d like to shift gears professionally but can’t quite summon the energy to begin that process, here are five concrete steps to launch that process: Normalize it LifeTwo , a leading career counseling organization, reports that their prior estimate that each person has an average of three careers in a lifetime is now in the process of increasing to as many as seven careers. Moreover, here are some additional statistics that should make you feel at home: According to a Gallup poll, over 60 percent of workers are not truly engaged in what they do, and the same percentage would change careers if they could. Finally, changing jobs frequently may even be an advantage . According to career blogger Penelope Trunk, it also keeps you fresh and passionate about your career. Reconceptualize It I got a holiday card from an old friend telling me about his new career as a psychotherapist. Prior to that, he’d been in the arts and construction industries. As he put it, “I am becoming increasingly comfortable with seeing my professional life as a series of explorations rather than Wall Street Journal -worthy profiles.” I’ve written before about the concept of kaleidoscope careers , a byproduct of both the dot-com economy, which threw traditional career trajectories out the window, and the reality of women returning to the workforce after having children. Under the kaleidoscope model, having a rich, diverse professional background may be a positive in today’s economy. Read a Self-Help Book If you have the resources with which to consult a professional career counsellor, by all means, do it. But if you can’t afford that, I’m a big (converted!) believer in self-help books for career change. When I moved out of academia into journalism (and beyond), I read two books that were not just useful, but essential, for my professional reinvention . And the nice thing about those transitions was that they cost me less than $20 — not bad, eh? Apply for a Job This may sound counterintuitive, as most people (including me) would counsel you to first figure out what you like and what you’re good at before thinking concretely about career categories broadly defined, let alone jobs. But once you’ve given it some thought and have narrowed down your potential career trajectories to a handful of possibilities, take a whirl at applying for a job that sounds like it might be right for you. The chances are almost zero that you’ll get it. But in putting yourself down on paper — and providing a narrative of yourself for this particular job — you’ll gain some insight into who you are professionally. Reimagining yourself in this way will also give you more self-confidence going forward. Look at Job Boards One way to spark your imagination about the kinds of things you might do with your particular skill set and area of substantive interest is to skim job boards in your chosen field. You should of course do this once you’re actually doing a proper “job hunt” (as opposed to a “career hunt”). But it’s also useful to do this on occasion early on in the process. You’ll be amazed at the kinds of real-life jobs that pop up that you’ve never even thought about but which might suit you perfectly. Two sites I’m particularly fond of are Idealist (for the non-profit sector) and Journalism Jobs . But it’s a big, wide world out there, and job boards abound in all sorts of professions. Go get ‘em!

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Mark Goulston, M.D.: The 5-Step System That Can Help Obama — And You! — Overcome Any Setback

January 16, 2011

When we hit obstacles in life, too often we are tempted to get angry or give up. The best and usually least used alternative is to “workaround” that obstacle. I was fortunate to receive an advance galley of Russell Bishop’s breakthrough book, “Workarounds That Work: How to Conquer Anything that Stands in Your Way at Work” (McGraw-Hill, 2011). Here are Bishop’s steps: The steps as I understand them are simple and easy to follow: Step 1: Own It

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Anna Cuevas: Hope for Homeowners, Says HAMP

January 12, 2011

Meet Harry. Harry is a professional visual artist in business for himself, and for many years he has owned his home for quite some time as well. Harry did not buy above his means. His area has a high cost of living but Harry had a thriving business, in fact he has even done freelance work for many big corporations when the economy was doing better and more money was in their budgets. When the mortgage meltdown began Harry did not even think it would affect him, but it really did. Little did he know that he was about to embark on one of the most difficult journeys of his life, the fight to save his family home. When the his customers began to cut back, Harry’s income began to take a big hit. Harry was a very responsible family man and the thought of not being able to meet his obligation tore him up inside. The stress began to affect his concentration on developing new business, and even his health began to deteriorate as he could not even sleep at night. Harry began to worry day and night about what to do about his bills and his mortgage. How would he ever get out of this downward spiral. He decided to apply for HAMP and what he thought was going to be a helpful situation put him deeper and deeper in the hole and made him almost paralyzed in the fear of potentially losing his home. The anguish he felt was almost unbearable. He went to an agency for assistance and yet again he was denied and no one really understood why. The problem was in not understanding his income as a self employed borrower , knowing where he could begin to make changes to his bottom line, and lastly, how the bank would view his application. In a time where businesses were cutting back Harry also needed to revisit his company’s budget and outgoing expenses. He tried again and reapplied on his own after that and was denied again. Harry quickly realized in the words of Albert Einstein that “the definition of insanity is doing the same thing over and over again and expecting different results.” Something had to change, or Harry would lose everything he has worked so hard for. When desperate times call for desperate measures the logical steps of lowering expenses and finding ways to increase profit are not always crystal clear. It is especially difficult to focus on taking the right action when your thoughts are frozen in anxiety and despair. It took some time for Harry to get himself back on track and regroup. But once he had clear goals and targets he needed to reach he was able to execute his plan and strive for the changes he had to make in his business model to save his home. Next he realized he did not understand the program he was applying for, so he began to empower himself with information and he knew exactly where his financial package stood in the eyes of the lender before he sent in his package to Bank of America this forth and hopefully final time. He began to meditate, get closer to God and think and act positive, determined, focused and with a real knowing that he would succeed and would not give up until he saved his home. Unfortunately, the resubmission of his HAMP application was initially met with resistance and he could not get anyone to see the month and months of work Harry had done to make changes to his business finances as they kept reverting to the numbers he had submitted in late 2009 versus taking into account the great changes Harry had strived so hard to make in 2010. He had to put together some escalation letters, be persistent in his endeavor to succeed, and not take no for an answer. Harry finally got someone to listen to his request and his new HAMP application was finally accurately reviewed. Less than one month later, Harry was approved for his affordable and permanent loan modification. Whatever the mind of man can conceive and believe, it can achieve. Napoleon Hill Now Harry and his family can smile for the camera and say HAMP! Harry saved his home and he also learned some valuable lessons in perseverance, resilience and self advocacy, not to mention the power of positive thinking to improve all aspects of your life. Harry is on the road to recovery from the downward spiral of the economy he fell victim to. Things are really looking up for Harry and his family. Harry now knows that there is a light at the end of the tunnel and you have to take a step back and out of your current personal drama to find the path that leads you out, then find the courage within to take action and devise a clear plan. It may take some time, focus and vision but there is a way to get through the hard times. Be your own best advocate, the only way you can do that is to get the information you need to so that you are empowered when you are trying to save your home. To think for yourself you must question authority. The days of just accepting the answer you get are over, you must be proactive on your own behalf, period. **** Anna Cuevas is an invited blogger on The Huffington Post, author of several soon to be published books including “Fight for Your Dreams” with Bestselling author, Les Brown . Anna is the Founder of www.askaloanmodguru.com a blog dedicated to empowering homeowners with free information they need to confidently apply for a loan modification and also providing the latest Do It Yourself loan modification tools to Save Your Home. Request your free copy of “Dirty Little Loan Modification Secrets You Must Know” along with free bonus materials that take the guess work out of the loan modification process to stop your foreclosure dead in it’s tracks.

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Obama Sets Mission For New Team: Accelerate Economic Growth

January 7, 2011

WASHINGTON — His presidency tied to the fate of the economy, Barack Obama is revamping his economic policy team and signaling cooperation to ascendant Republicans and the business community at a pivotal moment in the nation’s recovery and Washington politics. The president is surrounding himself with veterans of the Clinton administration. Chief of staff William Daley, economic overseer Gene Sperling and recently confirmed budget director Jacob Lew form an inner circle with a history of bipartisanship and experience in the art of the deal. “Our mission has to be to accelerate hiring and accelerate growth,” the president declared Friday at a window manufacturing plant in suburban Maryland. It’s a mission facing political and economic crosscurrents, underscored Friday by a mixed bag of an unemployment report and a relatively upbeat but cautionary assessment of the economy from Federal Reserve Chairman Ben Bernanke. The Labor Department said unemployment dropped to 9.4 percent from 9.8 percent and private employers added a net total of 113,000 jobs last month. But the drop in unemployment was due partly to people who stopped looking for work. Bernanke told the Senate Budget Committee that there’s rising evidence that a self-sustaining recovery is taking hold. “Overall, the pace of economic recovery seems likely to be moderately stronger in 2011 than it was in 2010,” he said. Continued high unemployment and slow growth into 2012 would certainly haunt Obama’s reelection campaign. But the ability to shape an economic policy is complicated by a divided Congress where Republicans are demanding deficit reductions while many Democrats seek more spending to spur the economy. Obama has moved to have it both ways, and to appeal to Republicans and business leaders who find value in international trade deals. To that end, he is wielding an economic message centered on competitiveness that spends on education initiatives to retool the workforce, embraces trade and provides tax breaks to businesses. At the same time, with a new chief of staff and a new director of the National Economic Council in place at the White House, Obama also is turning his focus toward tackling the deficit and debt. “Everybody knows that the long-run fiscal situation facing the country is one that we’ve got to address, and the president’s not afraid of that,” White House economist Austan Goolsbee said. “You will see when the president releases his budget in the coming weeks that he’s got a tough-minded approach.” With Daley, Sperling and Lew, Obama enters the second two years of his presidency counseled by Clinton era officials who have worked across party lines to cut economic deals. They recall a happier time, when unemployment was low, budgets were balanced and the economy was humming. Sperling was a key player in the bipartisan negotiations in December that extended Bush era tax rates for all taxpayers, including the wealthy – a Republican priority – but also included Obama priorities such as an extension of a refundable earned income tax credit and a 2 percent, year-long payroll tax cut. As director of the White House National Economic Council, Sperling will have a hand in shaping the course of nearly all of the administration’s economic policies, including looming battles with Republican lawmakers on spending cuts and raising the debt ceiling. “He’s a public servant who has devoted his life to making this economy work – and making it work, specifically, for middle-class families,” Obama said. Daley, a member of the Chicago political family dynasty, brings his record as a banker and political insider to the White House. As Clinton’s Commerce Secretary, he was a champion of the North American Free Trade Agreement – a pact that left a legacy of bitterness among some sectors of the Democratic Party. Before joining the White House Daley has advocated a moderate path for Obama and is a board member of the centrist group Third Way. On Friday, Obama also nominated Katharine G. Abraham to his Council of Economic Advisers and Heather Higginbottom as deputy director of the Office of Management and Budget. Those two posts require Senate confirmation. Obama also elevated economic adviser Jason Furman to assistant to the president for economic policy. The changes set the stage for Obama’s State of the Union speech later this month. Expected to emphasize economic themes, it will be a blueprint not only for governing but an initial marker of his reelection campaign. But first, the president is engaging in some high-profile outreach to the business community. On Tuesday, he will go to Schenectady, N.Y., to tour a future GE battery manufacturing plant with GE CEO Jeffrey Immelt. In four weeks, he will cross Lafayette Park in front of the White House to address the U.S. Chamber of Commerce, a trade group that has battled his top policy initiatives on health care and financial regulation. But the Chamber can also be a potential partner for Obama, supporting greater spending on infrastructure and helping push trade deals in Congress. The president also has been prodding businesses to shake loose untapped corporate cash and create more jobs. At the Thompson Creek Window Company in Landover, Md., on Friday, Obama took note of the recent tax deal that allows businesses to expense 100 percent of their investments in 2011. The president made a direct appeal to other companies, telling them now is the time to capitalize on that opportunity. “If you are planning or thinking about making investments sometime in the future, make those investments now, and you’re going to make money,” Obama said. —– Associated Press writers Julie Pace and Darlene Superville contributed to this report.

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More Business School Students Turn Toward A Degree In Doing Good

January 2, 2011

Business school students today may not have their eyes set on big bonuses quite like their predecessors. Studies show that they’re turning their finance and entrepreneurial skills towards founding socially responsible businesses. MSNBC reports that more and more students pursuing business school degrees are basing their courses on an eventual career in the nonprofit sector. The Wharton School of Business at University of Pennsylvania has seen an increase in applicants who want a degree in social enterprise. Emily Cieri, the director of Wharton’s entrepreneurial program, told MSNBC : “Ten years ago our students were primarily interested in working in finance and consulting. We’re seeing a large increase in the number of students with entrepreneurial backgrounds…They are saying they’ve come to school to understand how to run an entrepreneurial company with much higher growth and have a greater impact.” Individuals are now taking a business-model approach to solving social problems. Ashoka , a nonprofit that’s helped social entrepreneurs start charitable businesses for 30 years, visited the University of Maryland recently to hear students from its business school’s Center for Social Value Creation pitch social business plans. David Wish attended the event to promote his organization, Little Kids Rock , which provides instruments and music instructions free to schools. He also wants to become an Ashoka fellow . Wish told NPR : “Being in the presence of people who have devoted their life’s work to that is really an inspiring thing.” LISTEN: Read more about the trend towards socially responsible degrees and businesses at MSNBC .

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Steven Bulwa: The Media Has Failed Us

December 31, 2010

Financial media is not helping us become better informed or better investors. These outlets devote too much of their airtime to forwarding partisan propaganda rather than informing or entertaining us. The numbers suggest media is actually misinforming us and turning us into bad investors. The findings of a recent study, Misinformation and the 2010 Election from the University of Maryland’s World Public Opinion, show that 9 in 10 voters in the 2010 election believe they encountered information that was misleading or false, with 56% saying this occurred frequently. The study also concludes that those who watched Fox News almost daily were significantly more likely than those who never watched it to believe misinformation. The bad news for Fox News viewers is that merely watching the channel appears to be toxic. Most voters believed a few whoppers during the 2010 election cycle. But daily watchers of FOX News believed more misinformation than everyone else. Numbers Don’t Lie The majority of retail (casual) investors use mutual funds and ETFs (Exchange Traded Funds) to invest in the markets. Fund flows (deposits vs. withdrawals) are generally regarded as contrary indicators. This is a component of a broader series of indicators classified as investor sentiment that provide some insight into future directions of the market. The basic principle being that when many investors are bullish the market is more likely to go down and conversely a higher level of bearishness or negative sentiment indicates the market is likely to make a move higher. TrimTabs Investment Research reports on these fund flows and in a recent report stated : We observed that equity prices tend to fall after equity exchange-traded funds (ETFs) rake in large sums of money. Conversely, the market tends to rise after equity ETFs post heavy outflows. The report then issues this conclusion : We have two explanations for the strongly negative correlation between equity ETF flows and future market returns. First, ETFs are traded mostly by retail investors and day traders. These are the least informed and most emotional market participants–the ones most likely to lose money over time. Second, we suspect hedge funds use ETFs when liquidity dries up. Hedge funds were forced to close individual stock positions during the credit crisis, so they bought equity ETFs instead. Equity ETFs posted large outflows in 2009, when liquidity improved. These concepts are not really as complicated as they seem. It’s Economics 101. When demand outstrips supply, prices go up and when supply is larger than demand, prices go down. When funds are flowing into stocks, markets rise; but at some point most people are invested and there isn’t enough uninvested capital left to drive prices higher. Whatever the internal dynamics, the retail investors are generally the last to join in a rally and their main vehicle of investment are mutual funds and ETFs so large inflows into those instruments suggests that the market is near the top. That’s how many retail investors get the timing wrong and end up losing money. Nobody likes being wrong or losing money, it makes us feel pretty lousy and reluctant to invest, starting the whole cycle all over again. This is borne out in the current rally where the retail investor is reticent to return to the markets after being burned so badly in the housing/banking crisis of 2008 – maybe one time too many in the last decade. As a result they’ll probably join in just as the rally is about to top out. As Adam Shell recently wrote in USA Today : Yet, increasingly, investors on Main Street are not playing the stock market game with confidence like they used to, mainly because the game of making money has gotten tougher and more volatile since the financial crisis. Retail investors are buying fewer stocks. They are paring back on stocks and stock funds they already own. Instead, they’re moving into safer investments, like cash and bonds. “Investors are on strike,” says Axel Merk, president and chief investment officer at Merk Mutual Funds. Investors Should Turn Off Their TVs, Not Stop Investing With the proliferation of financial media and its informed commentary I would hope investor habits would be improving. But the numbers tell us they aren’t. The media is in fact complicit in perpetuating the retail investor’s position as contrary indicator, often referring to those contrary data points in assessing the market’s direction. In Rick Santelli’s famous rant on CNBC he called overburdened home owners struggling with their mortgages “losers” while using his podium to forward his political agendas. He is now credited with being the “lightening rod” of creation for the Tea Party movement. Perhaps he should have used his obviously influential media position to warn people of the perils of the housing bubble, helping them avoid complicated mortgage products that are hard to manage financially in the downturn that many market observers were predicting. Although I don’t blame investors for turning away from the markets after such treatment, it is the wrong decision. Markets have historically been a better investment than many other asset classes with the S&P 500 returning roughly a 7% annual rate of return . Stocks should, at the very least, be a strong component of a diversified portfolio. Instead of shying away from being burned again, investors should examine unsuccessful behavior, eliminate negative influences and improve decision making. Investment Principles for Profitable Investing Tune out the noise. Lengthen your investment time horizon. Never feel like you are missing out on a rally. Don’t panic in a selloff. History is your friend. Buy low and sell high so you can turn off your TV set to pursue activities you enjoy. I hope technology positively affects your life in 2011 and all your investments are winners. Follow Steven Bulwa on Twitter at @BulwaTech .

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Anna Cuevas: Hope For Homeowners: HAMP Trials and HAMP Tribulations

December 23, 2010

Meet Carla Carla is a social worker for Children’s Services. She was making a decent income while she did her part to help the children of her county. She did not buy a home above her means. The downturn in the economy caused furloughs in California and a loss of income for Carla who now also had to care for an additional family member in her household who came with unexpected health expenses. Not many people are immune to the financial hardships that the state of the current economy has brought on. Carla tried desperately to hang on as her savings dwindled to nothing, she had to dip into it just to stay afloat and try to maintain her, then perfect, credit rating. Now this too is gone. It’s July 2009, Carla was excited after several months of trying to get a HAMP loan modification and she was approved for a trial payment with Wells Fargo. One trial payment later and she gets a telephone call that says they made a mistake in calculating her income and now the payment was approximately $1000 higher than the trial agreement specified, “sorry,” was all they could offer up in the empathy department. Carla was devastated, there was no way she could afford this on her reduced income and it was definitely not 31% of what her gross income was, as the HAMP program guidelines specify. You see, they were using her previous income in the new calculations vs the new reduced income that caused the hardship. It would take over a full year to get someone to listen to the errors that were made and get the problem resolved. In September of 2009, after one trial payment was made and the next one was due with the new higher incorrect amount, Carla was able to finally get someone to listen to her story. This feat took dozens of phone calls, several emails and overnight letters but she finally got someone to listen rationally to the facts and once again she was ecstatic to receive a revised and corrected trial payment which came in December of 2009. Fast forward to June, 2010, after the HAMP trial went on for 6 months, the permanent loan modification arrived and low and behold it was back up to the incorrect amount, approximately $1000 over what the HAMP trial payment was, the same inaccurate calculation, the one that set this whole HAMP tribulation off in the first place. Could you imagine her dismay, her disappointment and massive frustration. It took some coaxing to get Carla off of the proverbial HAMP ledge she had been perched on, for a full year, at this point. She had to learn how to take deep breaths. The key here was in knowing what the correct payment was supposed to be, knowing that it still should qualify. Then she had to push and escalate this until someone would finally listen to her and fix the inaccuracies. Don’t get me wrong, this could take some time, the road is long, and it will most definitely cause, not a little, but large amounts of frustration. Still it is not impossible. I am not saying this is for the faint of heart, but I do believe in fighting for what is right, as long as you know what is right, and are ready to back up your fight with accurate facts and go the distance. I encouraged Carla that she could do this, to keep her faith and belief that she was fighting for her home and it was a worthy cause. There was no way she could keep her home if the error was not fixed. The values had dropped over 40% in her city, many of the neighborhoods had begun to look like ghost towns reminiscent of the gold rush days in California. However, this was Carla’s home and she was determined to save her home. Carla pressed on, this time taking this on as a challenge, the fight of her life to save her home from a needless foreclosure to do the errors caused by the massive workload experienced during this foreclosure crisis, and it is evident that there is a clear breakdown within the HAMP processing factory at many of our nations mortgage servicers. Carla, is not the only person going through this sort of issue and so many other inaccuracies. Carla is one of thousands upon thousands of homeowners suffering through this painstaking process. Some people are lucky and have smooth sailing, many others, are not quite so lucky. The next battle for justice began immediately after reviewing the permanent HAMP modification and finding that the payment given was completely inaccurate and it was not acceptable. Carla informed the processors of her HAMP permanent modification only to be told that if she did not accept this that she would not be able to reapply for HAMP. I think most people would have either accepted this inaccurate HAMP modification at this point, even if they could not afford it, or they would raise their white flag and give up. In fact, I am positive that this is something that happens on a daily basis because people are scared of losing their homes and they also believe that their servicer, their bank of many years would never intentionally steer them wrong or hurt them, so this must be their only option, take it or leave it. Carla chose to question authority, fight on, and fight hard. Carla fought with every ounce of strength with a sense of determination and belief that she would make it happen. Let me tell you, it was not an easy fight. This was a battle that was escalated at every level upon receiving the inaccurate HAMP loan modification in June of 2010 and this fight continued, upper level upon upper level, each department declining her request for the loan modification, saying that Carlas did not make enough to cover her debts. This even when the inaccurate HAMP approval was inaccurate because they had used an inflated income figure. This is why it is of utmost importance to know your numbers inside and out. When you are empowered with the right information you are able to push back at all levels with the confidence of knowing your stuff, in many cases, more than anyone else does. You see, what happened is that after Carla pushed back on the inaccurate HAMP modification, her loan was flagged as if she did not accept the HAMP modification vs that she just wanted an accurate approval. Now every escalation attempt, regardless of her explanation, her file was never re-ran for the HAMP program. They kept running Carlas loan for other programs and turning her down based off of other calculations, when all along Carla qualified for the HAMP loan modification, and that is what she was trying to get them to see. She knew something was wrong because she had the figures in front of her and could see that there was no way she did not make enough to qualify for HAMP. After several executive level escalations, and hitting several walls, contact was made with Freddie Mac her loan’s investor and she was able to get someone to hear all the facts, they understood her initial request to fix the inaccuracies, and her file was re-run for HAMP. I am proud to say that on December 20, 2010 and over one year and a half of going through the HAMP trials and HAMP tribulations, Carla got her Christmas miracle and was approved for an accurate HAMP permanent modification, and she is going to get to keep her home. Get empowered, get knowledgeable about your situation and all of your options. Question authority and expect only miracles! **** Anna Cuevas is an invited blogger on The Huffington Post, author of several soon to be published books and the Founder of www.askaloanmodguru.com a blog dedicated to empowering homeowners with free information they need to confidently apply for a loan modification and also providing the latest Do It Yourself tools to Save Your Home. Request your free copy of Dirty Little Loan Modification Secrets You Must Know along with free bonus materials that take the guess work out of the loan modification process to stop your foreclosure dead in it’s tracks. 


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Danny Wong: No School, No Jobs — Take the Leap With 20 Under 20!

December 22, 2010

Co-founder of PayPal , Peter Thiel, is encouraging going cold turkey. Instead of fighting the war against drug addiction, the vice here is conservatism, being ordinary and taking the safe route in life. The Thiel Foundation is now sponsoring the Thiel Fellowship , also known as 20 Under 20. It seems it’s never too early to be done with school or to forget about the cushy corporate life and take the incredibly brave plunge to become an entrepreneur. There are many notable entrepreneurs that realized their ideas couldn’t wait and that “standard” career paths weren’t moving fast enough. The Thiel Foundations’ press release launching 20 Under 20 cites success stories like Elon Musk: Musk himself stopped out of his graduate program before classes began to co-found his first company Zip2, which he sold to Compaq for $307 million. And Scott Bannister: Banister left the University of Illinois before taking a degree and founded ListBot, the largest ASP for business email, and IronPort, the anti-spam company that Cisco acquired for $830 million. And William Adregg: “Because education seeks to impart past knowledge, when you are trying to create a technological breakthrough, you have to create new knowledge, and there is no way to teach that. There was no course at University of Arizona on ‘how to cure aging.’ Hopefully, this program will allow others to work on ambitious projects themselves, before they’ve taken on a crippling amount of student debt,” said William Andregg, CEO and co-founder of Halcyon Molecular. Here is a real opportunity for young bloods to justify their life-changing decisions to hesitant parents who would absolutely be robbing their child of an unparalleled experience such as this. With an exciting idea in mind, or one that is already in the works, the distraction of studies and part-time jobs to pay off student loans eliminated, a new life in sunny California where startups thrive, support from seasoned mentors, and a life-altering two year commitment, the selected 20 teen entrepreneurs are luckily not taking a gamble on life, but are instead taking massive advantage of life’s beautiful opportunities. Eligibility is for anyone between the ages of 14 and 20 (admittedly, I think 14 is a bit on the low-end, but I am sure there are exceptional 14 year old entrepreneurs — I just haven’t met them yet) who will be awarded up to $100,000 in grants over the two year period with a commitment to cease studies and other employment (unless by special permission of the fund) to do something amazing, whether that be the creation of new scientific developments and technologies, an improvement on existing scientific theories or technologies, or the completion of a defined goal. Simply put, this is a chance for fresh entrepreneurs to Innovate. When you’re ready to take the leap, you’re ready. While you may think it’s important to fulfill filial duties, stay within the confides of societal standards, and beg off your entrepreneurial and innovative itch until you’ve become a ‘tried and true adult,’ you are doing a disservice to yourself and the world by holding yourself back. While I am not exactly taking my year off with the aim to do the world a good service, I am doing it for personal reasons, which might allow and encourage me to do more exciting things with my life later on (perhaps some things that might be less self-serving). I’d be interested to see the full lineup of young entrepreneurs that will be selectively picked to begin a wild two-year journey. I’m more excited to see how the two years make out for the participants who will most certainly be just beginning to introduce their innovative ideas to the world. Danny Wong is the co-founder of Blank Label Group , hosting Blank Label , Thread Tradition and RE:custom .

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In Obama Anti-Foreclosure Program, Thousands Of Homeowners Strung Along For A Year

December 21, 2010

More than 29,000 troubled American homeowners have been stuck in mortgage modification purgatory for at least a year, with no end in sight, under the Obama administration’s anti-foreclosure program, according to a recently released report from a watchdog panel appointed by Congress. These homeowners were supposed to receive lower payments on a trial basis lasting three months and then gain so-called permanent mortgage modifications–lowered payments lasting five years. But more than a year after beginning their trial phase, they have yet to be granted the permanent relief, leaving them unsure about their ability to hang on to their homes. Meanwhile their lenders continue to report them to credit bureaus as delinquent, impairing their ability to borrow in the future. The new data, disclosed last week in a report from the Congressional Oversight Panel, added the latest sign of trouble to an anti-foreclosure program that was once supposed to help 3 to 4 million hang on to their homes. It is now on track to aid less than one-fourth that number. The homeowners stuck waiting for permanent relief now contend with a higher cost of living thanks to lower credit scores and higher mortgage debt. They’re also prevented from moving on as they try to keep a mortgage teetering on the verge of foreclosure. “It’s horrifying, but it’s not surprising,” said Diane E. Thompson, counsel to the National Consumer Law Center. “I hear about this everyday from people. When I go out to do trainings, I have people put their hands up in the room and I try to think of prizes for the person who has the oldest trial mod, and they’re routinely 18 months old.” Twenty-eight homeowners who entered the program in March 2009, or more than a year-and-a-half ago, remain in the trial phase. Some 475 have been in trial limbo for 18 months. More than 29,100 borrowers have been stuck in the trial phase for at least a year, data through October show. “After promises of hope, the fact that so many families remain in financial limbo goes to the heart of our biggest concern: some mortgage servicers on their own simply seem not to be up to the task of effective, widespread mortgage modification,” said Richard H. Neiman, New York’s top bank regulator and a member of the oversight panel. Neiman added that “Treasury has not been able to hold them fully accountable.” While the Treasury Department discloses the number of homeowners who have been in the trial program for at least six months, Treasury has never revealed the number of borrowers who have been in the trial phase for at least a year. Bank of America, the nation’s largest bank by assets, accounted for nearly half of all the aged trials, according to Treasury’s latest publicly-released scorecard. Thompson said the number of homeowners stuck in limbo is likely much higher as mortgage firms self-report their data to Treasury, and are likely to skew the numbers in their favor. The modification initiative, known as HAMP, long ago was dismissed by housing experts as a failure. More homeowners have been bounced from the program than have received permanent relief. The average borrower lucky enough to get into a five-year plan ends up owing more on their mortgage than they did prior to entering the program. Research shows that homeowners in this state, known as being underwater, are less likely to move–such as in pursuit of a job–and more likely to default. And more than a third of those in so-called permanent mortgages spend more than 80 percent of their monthly income servicing debt, raising questions about the long-term sustainability of the modifications. The oversight panel said HAMP would prevent less than 800,000 foreclosure, at a cost of about $4 billion. The administration originally allocated $50 billion in bailout funds to help homeowners. Last week, the Treasury Department official overseeing its bailout programs admitted for the first time that the mortgage modification initiative will not meet the goal laid out by President Obama when he announced the program in February 2009. Then, Obama said it would enable “as many as 3 to 4 million homeowners to modify the terms of their mortgages to avoid foreclosure.” “I think it’s apparent from our numbers that we will not have 3 to 4 million” permanent modifications, said Tim Massad, Treasury’s acting assistant secretary for financial stability. More than 2.8 homes received foreclosure notices last year, according to real estate data provider RealtyTrac. The Federal Reserve expects 7.4 million homes to enter foreclosure this year through 2012. It recently revised its projection up from 6.5 million as the crisis has worsened. Treasury officials say the program’s shortcomings are due to mortgage firms’ inability to handle the huge influx of distressed borrowers that flooded the system when the housing market soured; the changing nature of the housing crisis, which was once dominated by subprime mortgages and now remains depressed due to a lingering high unemployment rate; and borrowers’ lack of maintaining proper documentation describing their circumstances, like monthly income. To deal with the borrower issue, Treasury redesigned the program to require documentation in order to enter the trial phase, rather than the previous practice of rushing to get homeowners enrolled in the program and asking for their paperwork later. Treasury maintains that this has led to better results. But according to the oversight panel’s data, nearly 30 percent of borrowers who made their first trial payment in June–and made their payments on time in July, August and September–remain in the trial phase. A little more than half actually converted into a permanent modification, making it the only month dating to March 2009 in which the conversion rate eclipsed 50 percent, data show. Andrea Risotto, a Treasury Department spokeswoman, cautioned that there is some lag between when a decision on a permanent modification is reached and when that is entered into the system. Still, Treasury officials argue that even with homeowners remaining in limbo, they’re still benefitting from the program as they’re able to continue living in their homes, at a reduced rate, and without cost to taxpayers (the initiative only pays for permanent modifications). “The trial period provides immediate relief to struggling homeowners at no expense to taxpayers,” Risotto wrote in an e-mail. She added that Treasury data show that a majority of borrowers rejected during the trial phase end up in alternative foreclosure-prevention programs. Thompson, who works with homeowners and their advocates, completely disagreed. “The big overarching thing is, nobody wants to be in a trial mod. Everyone wants resolution in their lives,” she said. “Everyone in foreclosure is desperate to get out of foreclosure. It’s incredibly stressful, it’s humiliating, and shameful. Nobody feels good about it. People want it done, they want it over with, they want to be able to move on.” Also, even though the homeowners are making their payments, they’re still being reported as delinquent to the major credit reporting bureaus, Thompson said. “So think about what that does when they go to apply for a car, or what it does to their credit card rates, or if they’re applying for a job, or want to move, or even want to rent a place,” she said. “It affects their cost of living and their ability to manage their life in all sorts of ways. Credit is a huge issue.” Finally, when homeowners are in the trial phase their mortgage company tacks on to their mortgage principal the difference between their old monthly payment and the reduced amount. The longer the trial, the more gets added. Thompson said that for some of these homeowners, that tacked-on amount is enough to tip the scales against a permanent modification when their mortgage company finally decides to run the formula that determines whether they keep their home, or are forced out. A bigger debt load works against homeowners, she added. “This is not a good deal for homeowners.” ************************* Shahien Nasiripour is a business reporter for The Huffington Post. You can send him an e-mail ; bookmark his page ; subscribe to his RSS feed ; follow him on Twitter ; friend him on Facebook ; become a fan ; and/or get e-mail alerts when he reports the latest news. He can be reached at 646-274-2455.

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Mark Goulston, M.D.: Glass Ceiling: The Untold Story

December 16, 2010

“Emperors are not the only ones with no clothes. We know they’re full of B.S., they know they’re full of B.S., and they know that we know they’re full of B.S.” –A woman executive who asked to remain unnamed, explaining how being in a room of testosterone-driven men is like watching a bunch of “egomaniacs at the trough.” I love my wife, and I respect her opinion, but I don’t often want to hear it, and I don’t ask her for it as much as I should. When and if I ask for it, it will nearly always help me be more effective, waste less time and be more successful. For more than 30 years as a clinical psychotherapist, marital therapist and, for the past 15 years, executive coach to high performers who want to get even better, I am not alone in having a woman in my life (sisters and moms can do the same) whose input will make me even better. But if the input of women who care about us will make me and all these male executives better, why don’t we ask for it? From my work with executives who have opened up to me, a few reasons come to mind: Fear of having their parade rained on or their testosterone rush interrupted When men are in the middle of a testosterone rush, they feel superhuman and don’t like it when that rush is derailed — what I refer to as “testosterone interruptus.” As a result, when men are on a roll (in their life or at least in their minds) and thinking that they have discovered the answer to changing the world and the woman in their life says, “You’re not going to wear that shirt are you?” it can break their momentum and trigger an interruption in their feeling powerful. In the boardroom it can come when an egomaniac is going on and on and then looks and sees the lie-and-B.S.-detector expression on one of the women’s faces broadcasting, “You’re so full of B.S. and you’re such a fool!” Fear of humiliation If the lady doth protest too much, perhaps the man doth posture too much. The more bravado a man demonstrates on the outside, usually the more paranoia and fear of being exposed as not particularly smart, capable or caring he feels on the inside. And the shame of those possibilities being exposed (which a knowing woman can say in one glance, more than in a thousand words) can turn out not only to be devastating but lethal. When men commit suicide, it is frequently tied to either having been humiliated or anticipating humiliation (interestingly, when women commit suicide it is frequently tied to just wanting out of unbearable pain that is usually not tied to feeling incompetent). Fear of metastatic incompetence One of the awful burdens on most men is that their worth is too often and too strongly tied to their feeling of competence. The more competent they feel, the more confident, the more powerful and the more worthwhile they feel. The more incompetent they feel, the less confident, the less powerful and the less worthwhile they feel. When women who are often — thankfully — less power-consumed point out things that the men in their life are just flat-out wrong about, men will often become very defensive and then counterattack (that said, many women want to be in control as much as their male counterparts). At those points, it’s not so much that the man believes himself to be right as it’s that inwardly he may be defending against feeling that the woman is right and that he has just made a fool out of himself. Even more deeply, he may be defending his bravado-on-the-outside-insecure-ego-on-the-inside from thinking, “Wow, if I turn out to be as wrong about this as I thought I was right, maybe I’m wrong about many things or even everything.” And again, feeling you are wrong can cross over to feeling you’re incompetent, and then feeling worthless. Frequently many women in business fall into either one of two categories. In the first case, their “egomaniac early-detection system” is operative, and that is why when such women enter into a good ol’ boys’ room, the conversation suddenly shifts from sexist, passive-aggressive, silly and sometimes mean-spirited jabs at women to a standstill. And good ol’ boys don’t like being caught with their pants down, nor do they enjoy having their banter stopped. One of the reasons for that is that these guys can’t stand to feel embarrassed. Another reason is that the men are also engaging in “boys will be boys” juvenile humor as a way of letting off steam and relieving stress (even if it is at the expense of respect for women). I remember the gallows humor my fellow medical interns and residents engaged in to cut the stress of dealing with very sick patients. In the second instance, women who aren’t attuned to, or at least annoyed with, the B.S. side of men are that way because they are drinking from the same egomaniac trough. Sadly for women, coming off that way works against them, and the painful truth is that an egotistical, a**hole male gets away with it more than a woman with the same qualities. (Isn’t that part of what cost Hillary Clinton the election and what is making for the wide range of ambivalence toward Sarah Palin?) In thinking of women who don’t turn out to have feet of clay or to be egomaniacal like men, I think of Frances Hesselbein , President and CEO of the Leader to Leader Institute (formerly the Peter Drucker Foundation), who has said, “The leader’s job is not to provide energy but to release it from others.” I think of that when I see how rarely this seems to be happening from our leaders and think of how much we need it. I am also reminded of Golda Meir , the former Prime Minister of Israel. One of the most memorable quotes I heard from her (or from anyone) was what she said in response to the question, “How long will there be war?” Meir’s reply: “War will end when they love their children more than they hate us.” I think if she were alive today and asked the same about our economy, she might say: “Our economic woes will stop when greedy people love their fellow human beings more than they love money.” That’s something that every boardroom would do well to hear and heed, whether it comes from a woman or a man. Taking Action: If you are a woman who doesn’t suffer fools (or male foolishness) gladly but doesn’t want to create discomfort in men that will only backfire on you, apply the “feed forward” principle that I learned from my colleague Marshall Goldsmith , the world’s preeminent executive coach and author of the number-one Wall Street Journal bestseller ” What Got You Here Won’t Get You There “: “Only bring up something that has already happened in a ‘matter of fact’ reporting manner; otherwise you will invite an endless, win-less debate. Instead, focus on the future that nobody has messed up and invite input for how to make it more productive.” For example, if you are a woman and notice a lot of unproductive time wasting in meetings with your male colleagues, go up to the lead person and say, “I’ve noticed that some of our meetings can get off track and that as a result, we often don’t accomplish our stated objectives for the meeting. Going forward, what do you suggest I do when I notice this happening, in order to help us get back on track? Also, how would you suggest I do it diplomatically so that I don’t ruffle any feathers?” And then be quiet. After he answers you, repeat back exactly what he said by saying, “Just to make sure I got what you said correctly, what you’re suggesting I do is _____. Is that correct?” Then wait for him to say, “Yes.” According to famed social psychologist and researcher Robert Cialdini , author of ” Influence: Science and Practice ,” this will deepen his commitment to being on your side, if and when you do what he suggested. *** Mark Goulston, M.D. is the author of ” Just Listen: Discover the Secret to Getting Through to Absolutely Anyone ,” called “one of the best books to buy for everyone else, who will then tell you that you need to read it” by a female senior vice president at IBM.

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Angela Haines: The Next Best Thing

December 14, 2010

Early dreams for a new business took root during the agonizing ten months Army Captain Dawn Halfaker spent recovering from over 20 operations she endured when she was severely injured in Iraq. She had spent five months in Baquba, in the volatile province of Diyalah as a Platoon Leader, charged with training an Iraqi police force. Shortly after midnight in June, 2004, Dawn rolled out in a convoy of 4 humvees on a reconnaissance patrol when her vehicle was hit by a barrage of small arms fire and rocket-propelled grenades. One grenade pierced the engine of Dawn’s vehicle before it burst immediately next to her, leaving her right arm hanging by a piece of skin and a few tendons. Dazed and covered with blood, Dawn still managed to order the driver to flee before lapsing into a coma that lasted twelve days. She awoke as a patient in Walter Reed Army Medical Center in terrible shape: besides burns and lacerations, Dawn suffered 5 broken ribs, a shattered shoulder blade and a deadly infection that almost took her life, and eventually led to the amputation of her right arm. For her heroism, she was awarded a Purple Heart and a Bronze Star. During her recovery, as Dawn began to realize the military career she had desperately wanted since the first day she entered the United States Military Academy at West Point was over, she worried about “losing a sense of purpose.”: I really loved what I was doing. To me the military was a dream job with so much of my life and my identity wrapped up in it. So I was fiercely determined to stay connected to the fellow soldiers I had left behind on the battlefield. Like a good soldier, she switched into survival mode and began to plan the outlines of a consulting business to help the military to seek out new technologies that could save lives or at least lessen injuries, a career path she calls “the next best thing.” After working out of her basement for a year, Dawn landed a contract with the Department of Defense, specifically the Defense Advanced Projects Research Agency, where she led projects researching various technologies ranging from nanotechnology that could make lighter weight body armor to advanced medical devices, such as creating miniature ventilators for use directly in the battlefield to help prevent brain damage from serious injuries. When she began to see the growth potential for her consulting business, Dawn headed back to school to acquire an M.A. in Security Studies from Georgetown University. Her company, Halfaker and Associates, was officially launched in 2006. Located in Arlington, Va, the company provides help with security policy, physical security management services for military bases, administrative and technical support and training. Currently Halfaker and Associates has over 120 employees. For 2010, it expects to post revenues of more than $15 million from services provided to over 20 major clients, mostly governmental agencies. Her biggest client remains the Department of Defense for which her team is currently analyzing how the intelligence data gathered from a variety of sources affects the army and its decision makers as they develop policies and strategies. Another major client is the Department of Homeland Security for which the Halfaker and Associates team offers solutions in the areas of force protection, antiterrorism, emergency management and chemical, biological, radiological, nuclear, and high yield explosive (CBRN) defense. Soon after Dawn launched her business, the economy began to slide. One consequence was that “we got a whole new slew of competitors who began to chase lucrative government contracts for the first time since their former clients were slashing budgets because of the recession.” Her solution was “to continue to seek out exceptional talent so we can offer our clients the best services possible.” As part of her plans for long term growth, 31-year old Dawn Halfaker plans to adopt her company services to the needs of commercial clients for whom she sees rising demand in all areas of security; she also offers in depth capabilities in information technology solutions to help clients with a variety of business problems from website designs to software integration to data management. Currently she spends most of her time on strategic planning and maintaining essential relationships by planning quarterly visits to the sites of her twenty most active programs. She also attends industry events because “you can’t get new business if you don’t put yourself out there.” Recently, Dawn was selected as one of the winners in the 2010 Winning Women program, sponsored by Ernst and Young . Her reward was participation in a 5-day strategic growth forum that brought together 1700 business leaders in Palm Spring in early November. The experience, she said, “made me realized I was pigeon-holed; the blinders were removed as I began to see that there are opportunities everywhere. I developed a much better understanding of how to access the resources I need; it also gave me the ability to understand how to navigate the obstacles we face as I look at my strategic plan for growth.” She also loved the networking with the other winning women which “became the kind of sorority I never had at West Point.” Since the growth forum coincided with Veteran’s Day, Dawn was unexpectedly invited to the stage by the forum leaders to share her combat story. The audience responded with a standing ovation in honor of her courage and determination to accomplish her “next best thing”: running a successful company.

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Tony Hsieh: Zappos Founder: Why I Walked Away From Big Money At Microsoft

December 13, 2010

From Delivering Happiness: A Path to Passion, Profits and Purpose by Tony Hsieh. A bet is a bet. If I lose a bet, I always pay up. On graduation day in college, my friends made a bet with me. They bet that I would become a millionaire within 10 years, and if it happened, then we would all go on a cruise together, and I would pay for everyone’s trip. If it didn’t happen, then we would still go on a cruise together, but they would pool together and pay for my trip. To me, it seemed like a win-win situation: either I would be a millionaire or I would get a free cruise. Either way, I would be happy, so agreed to the bet. It was early 1999, and we all flew to Florida to take a three-day cruise to the Bahamas. I decided to invite some of my other friends as well, so we ended up with a group of about 15 people. I had never been on a cruise before, so I was pretty amazed at how big the ship was. There was a nightclub, ten bars, swimming pools, and five all-you-can-eat restaurants. We had a great time drinking, eating, partying, and then drinking, eating, and partying some more. It was like a mini college reunion, without all the boring parts. We all decided to go to the nightclub on the final night of the cruise to drink and dance the night away. In the eyes of all my friends on the cruise, I was everything that they thought defined success and happiness. My friends commented that I seemed more self-confident and congratulated me on selling the company to Microsoft. (Tony Hsieh sold LinkExchange , a web-based advertising company, to Microsoft in 1998 for a $265M.) At 1:00 AM, the DJ announced that it was last call, and that the bar and club would be shutting down soon. As everyone headed to the bar to get one last drink before the night was over, I stood by myself for a moment to avoid the rush and to take in the moment. If someone had told me four years ago that I would be a millionaire and on a cruise ship celebrating, I would not have believed it. Yet, as the drinks flowed, the music pulsated, and friends cheered and toasted one another, a nagging voice in the back of my mind repeatedly brought up the same questions that had been there ever since the silent walk with Sanjay back to the office the day the Microsoft deal closed: Now what? What’s next? And then there were the follow-up questions: What is success? What is happiness? What am I working toward? I still didn’t have the answers. So I went to the bar, ordered a shot of vodka, and clinked glasses with Sanjay. Figuring out the answers could wait until later. After the cruise, I felt like I was on autopilot: waking up late, making an appearance at the office for a few hours and checking my e-mail, then heading home early. Every once in a while, I’d skip going to the office altogether. I had a lot of free time and I didn’t know what to do with it. So I had a lot of time to think. I’d already bought all the things I wanted: a place to live, a big-screen TV, a computer, and a home theater system. I started going to Vegas every other weekend to play poker. I wasn’t playing for the money. It was about the challenge of figuring out how to beat the game. Poker is the only casino game where you’re playing against other players instead of the house, so as long as you’re better than the average player at your table, you actually can win in the long run. But most of my free time was spent just being introspective and thinking. I didn’t need more money, so what was it good for? I wasn’t spending the money I already had. So why was I staying at Microsoft, vesting in peace, trying to get more of it? I made a list of the happiest periods in my life, and I realized that none of them involved money. I realized that building stuff and being creative and inventive made me happy. Connecting with a friend and talking through the entire night until the sun rose made me happy. Trick-or-treating in middle school with a group of my closest friends made me happy. Eating a baked potato after a swim meet made me happy. Pickles made me happy. (Although for that one, I’m still unclear why. I think it’s just because they are obviously delicious and I enjoy saying “pickles.”) I thought about how easily we are all brainwashed by our society and culture to stop thinking and just assume by default that more money equals more success and more happiness, when ultimately happiness is really just about enjoying life. I thought about how I enjoyed creating, building, and doing stuff that I was passionate about. And there was so much opportunity to create and build stuff, especially with the Internet still exploding, and not enough time to pursue every idea out there. And yet here I was, wasting my time, wasting my life, so that I could make more money even though I had all the money I ever needed for the rest of my life. A lot was going to change about the world. We were on the eve of not only a new century, but a new millennium. The world was about to change in a dramatic way, and I was about to miss out on it so that I could make even more money when I already had all the money I would ever need. And then I stopped thinking to myself and started talking to myself: “There will never be another 1999. What are you going to do about it?” I already knew the answer. In that moment, I had chosen to be true to myself and walk away from the all the money that was keeping me at Microsoft. A few days later, I went to the office, sent my good-bye e-mail to the company, and walked out the door. I didn’t know exactly what I was going to do, but I knew what I wasn’t going to do. I wasn’t going to sit around letting my life and the world pass me by. People thought I was crazy for giving up all that money. And yes, making that decision was scary, but in a good way. I didn’t realize it at the time, but it was a turning point for me in my life. I had decided to stop chasing the money, and start chasing the passion. I was ready for the next chapter in my life.

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John Robbins: Who’s Done More Damage, Bernard Madoff or Alan Greenspan?

December 11, 2010

Exactly two years ago today, I received a phone call from hell. My financial adviser and close friend, with whom I had invested all of my family’s life savings, called to tell me that overnight we had lost 95 percent of our net worth. It turned out that our life savings had been invested in a fund that had been handled by Bernard Madoff. Because we weren’t direct investors (I didn’t even know who Madoff was prior to his arrest), there was no hope of our ever recovering a penny. Tragically, what happened to my family overnight is happening to many, many people today, only more slowly. It is one of the darkest nightmares of our times that so many people are losing their homes, their pensions, their jobs, their savings, and any semblance of financial security. The official unemployment rate is 9.8 percent, but if you include the underemployed (those who have part-time work but can’t find a full-time job, though they need one), and add in also the huge numbers of unemployed people who have given up looking for work because they feel the search is hopeless, the figure rises to above 22 percent. There are already 19 million vacant homes in the country, with another 10 million foreclosures in the pipeline. The average household credit card debt is nearly $16,000. And the U.S. dollar, which has been the world’s reserve currency for almost 100 years, is losing value and appears increasingly unstable. How did we ever get into such a mess? Last year, a Newsweek poll found Bernard Madoff to be the most despised person in history. Having been a victim of his fraud, I understand. But some people think that when it comes to wreaking financial havoc, Madoff was a piker compared to the man who was dubbed history’s greatest Federal Reserve chairman upon his retirement in 2006 — Alan Greenspan. Why? Because Greenspan may be more responsible than any other single human being for the disastrous developments in our nation’s economy. Author Matt Taibbi doesn’t mince words on the subject. In his new book about how bubbles and bailouts have decimated the U.S. economy, he none-too-subtly calls Greenspan “the biggest asshole in the universe.” Madoff lived high and mighty as a billionaire as long as he kept his Ponzi scheme afloat. Greenspan was revered as long as he kept the party going for the ultra-rich, as long as he kept one bubble after another inflated. But with every party, there’s always the morning after. The collapse of Madoff’s Ponzi scheme bankrupted not just tens of thousands of families, but many charitable foundations, nonprofit organizations, and hospital and school endowments. The bursting of Greenspan’s bubbles, on the other hand, decimated the entire U.S. economy, bankrupting tens of millions of families. In his biography of Greenspan, appropriately titled Greenspan’s Bubbles , MSN Money columnist William Fleckenstein recounts the devastating series of bubbles and crashes that directly ensued from Greenspan’s policies. The Savings and Loan scandal was the first tip-off. As a paid consultant for Lincoln Savings and Loan, Greenspan was an ardent advocate of Savings and Loan deregulation. When Lincoln’s parent corporation went bankrupt in 1989, more than 21,000 mostly elderly investors lost their life savings. This was, however, peanuts compared to what was to follow. With Greenspan as the head of the Federal Reserve from 1987 to 2006, and with his policies running the show, the tech bubble was inflated only to burst in 2000, closely followed by the real estate bubble that began to burst in 2007, and the credit bubble that burst in 2008. Greenspan’s policies contributed massively to each of these bubbles, and thus to their inevitable collapse. Like Madoff’s Ponzi scheme, they provided illusory returns, not based on any real goods, services or value provided, but rather on the attraction soaring returns have for new entrants into the game. The costs of each of these market collapses are measured not in the billions but in the trillions of dollars, and they’ve come so quickly on the heels of one another that we may think of them as business as usual. That’s why it’s important to grasp that, prior to Greenspan’s arrival, the U.S. had been nearly bubble-free for more than 50 years. The only exception? A brief mania for gold and other precious metals in late 1979 and early 1980. Prior to running the Federal Reserve, Greenspan headed the National Commission on Social Security Reform. The original intent behind Social Security was generous and benevolent. At the height of the Great Depression, our society resolved to create a safety net that would pay modest benefits to retirees, the disabled, and the survivors of deceased workers. It was the formalizing of the long-respected tradition of supporting elders and others who are less able to fend for themselves. The idea was to create less fear and more economic security. But once Greenspan got involved, things immediately began to change. His policies triggered a staggering transfer of wealth from the lower and middle classes into the hands of the richest members of society. It is not an exaggeration to say that the resulting concentration of money and power in the hands of the few is undermining the economy, corrupting democracy, deepening the racial wealth divide, and tearing communities and families apart. It was primarily due to Greenspan’s proposals that the Social Security tax rate went from 9.35 percent in 1981 to 15.3 percent in 1990. Social Security taxes are borne primarily by the lower and middle economic classes. They only apply to wage income, not to investment income, so people who work for a living pay through the nose while those who invest for a living pay not at all. Fair, right? Social Security taxes are currently capped at about $106,000. This means that a married couple who earns $106,000 a year will pay more than $16,000 in Social Security taxes. They will pay the same amount that Oracle CEO Larry Ellison and his wife will pay, even though Ellison’s income over the past 10 years was nearly $2 billion . A couple near the bottom of the economic ladder, earning $30,000 a year between them, obviously has nothing to spare, yet they pay $4,590 in Social Security taxes. Billionaire investors and hedge-fund managers, meanwhile, may pay nothing, because they can usually structure their income so that none of it is subject to Social Security or Medicare taxes. The policies that were implemented following the recommendations of Greenspan’s commission have produced, in the last 20 years, $1.7 trillion in new taxes borne almost entirely by the lower and middle class. There might have been some justification for this if the amount of benefits you would eventually receive was directly related to the amount of money you paid into the pool, and if the money was set aside for future Social Security recipients. Prior to Greenspan’s reforms, that’s essentially how things were done. But thanks to his innovations, this is no longer the case. The money is no longer held separate from the rest of the budget, and has been used instead for other government spending. It was George W. Bush’s first Treasury secretary Paul O’Neill who publicly announced the bad news. “I come to you as managing director of Social Security,” he said. “Today we have no assets in the trust fund. We have the good faith and credit of the United States government that benefits will flow.” It’s hard to avoid noticing that Social Security is increasingly taking on some of the characteristics of a legally-mandated Ponzi scheme. Bernard Madoff was a liar and psychopath who recklessly stole tens of billions of dollars. He will spend the rest of his pathetic life in prison. Alan Greenspan, on the other hand, is still widely admired. Not that long ago, he was almost considered a candidate for Mt. Rushmore. He was certainly the most influential proponent of financial deregulation in the last century. But a generation from now, who will history judge with more scorn? For practical, down-to-earth advice on how you can thrive in these hard economic times, see John Robbins’ new book, The New Good Life: Living Better Than Ever in an Age of Less . John’s other bestsellers include The Food Revolution and Diet For A New America . He is the recipient of the Rachel Carson Award, the Albert Schweitzer Humanitarian Award, the Peace Abbey’s Courage of Conscience Award, and Green America’s Lifetime Achievement Award. To learn more about his work, visit www.johnrobbins.info .

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Les McKeown: Is Your Business Falling Into ‘The Big Rut’?

December 7, 2010

Over-dependence on systems and processes is natural to a particular stage in any organization’s development — one which I call ‘ Treadmill .’ While we’ve all experienced the frustrating tendrils of this kind of bureaucracy, it actually becomes highly dangerous if complexity and redundancy begin to distort reality. Treadmill usually occurs after a fast-growing company has begun to introduce systems and processes to tame the creative chaos it has unleashed. Too often, leaders see the benefits those systems and processes bring, and then overdo it. Google is a good example (in its core search activity), as is Disney, whose very existence depends on staying innovative and not succumbing to creativity-sapping bureaucracy (currently, it’s losing the battle). Left unchecked, an organization in Treadmill will slide inexorably into the next stage in decline, an almost-always fatal stage I’ve labeled ‘ The Big Rut ‘. When it’s in The Big Rut, the organization is so far in the grip of systems, processes and procedures that creativity, risk-taking and real entrepreneurial zeal and passion are almost completely extinguished. The creative burst that spurred the company to success is gone: the mavericks, boundary-oversteppers and entrepreneurial types are slowly expunged (or expunge themselves) and there is no-one left in senior positions who will wave a red flag and stop the company’s inevitable decline into irrelevancy. So, how does senior management of an organization in Treadmill prevent a decline into The Big Rut? There are three keys to ensuring that a reasonable dependence on systems and processes doesn’t swell into arthritic bureaucracy: 1. Re-tool your hiring process The number one amplifier of bureaucracy for any organization in Treadmill is the hiring process. Once the organization discovers the real benefits of adhering to good systems, the tendency is to emphasize compliance and detail-orientation when hiring new people, at the expense of initiative and risk-taking. These new hires then in turn hire in their own image, and the organization is populated with systems-focused types who value form over function, efficiency over effectiveness, compliance over results. The key to staying out of The Big Rut lies in introducing the word ‘and’ into your hiring profiles: by redefining the must-haves for new hires to identify people who value compliance AND initiative, a systems mindset AND creativity, compliance AND effectiveness. Netflix is a great example of a rapidly growing organization that gets this — as can be clearly seen in the ‘must-haves’ they look for in new hires (and note — they have this slideshow embedded right into the job page on their own web site so all potential new employees are well aware of what the company is looking for). 2. Refresh your performance assessment process When an organization reaches Treadmill, the performance assessment process typically begins to focus on non-compliance and infractions — what this person didn’t do in the period under review — rather than on the successes they achieved, and how the organization can ‘bottle’ and repeat that success. To avoid sliding into The Big Rut, the performance assessment process must be re-focused to emphasize and encourage those entrepreneurial activities that keep the organization flexible and vibrant: what did this person do that was exceptional, showed initiative and was creative (even if they failed)? How can the organization learn from both their successes and their failures? How can we repeat this person’s successes in a wider context (and not just punish failure)? One impressive example of this is in Cisco ‘s leadership competency model: CLEAD (Collaborate, Learn, Execute, Accelerate, Disrupt). Out of all the leadership competencies Cisco could have included, during all the kill-me-now, do-we-have-to-discuss-this-again meetings that I’m sure they had, somebody worked hard to get ‘disrupt’ in there — and assessing key people against their ability to disrupt is exactly what’s needed to stay out of The Big Rut. 3. Provide a safe mentoring environment The third major amplifier of bureaucracy in Treadmill is the pressure to adhere to systems and processes in real time: it sucks the entrepreneurial air out of the organization, negating the opportunity for people to experiment, take risks and show initiative. A great way to counter this is to provide a mentoring program which doesn’t mirror the reporting lines in the organization, thus providing people with a safe environment in which they can try out ideas and experiment, without worrying that they might invoke a career-limiting reaction from their manager and supervisor — GE has been renowned for this for years, providing even entry-level leaders with structured cross-functional mentoring to encourage creative thinking. An additional secondary ‘win’ can be achieved by asking those mavericks, boundary-oversteppers and entrepreneurial types — who otherwise may well be looking for greener, less hidebound pastures to work in — to act as the mentors. Take a close look at your systems and processes — are they providing a safe haven for entrepreneurial risk-taking, creativity and initiative or are they choking the life out of your business? Want to know how close you are to Treadmill, or (gulp) The Big Rut? Take the Predictable Success Lifecycle Quiz .

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Tom Morris: If Harry Potter Ran General Electric

December 5, 2010

How would Harry Potter run a major American company? Would he have any good suggestions about how you should run your life? After all, the most loved wizard of all time famously stood up to the most dangerous challenges of his day and prevailed magnificently. He must know something the rest of us could benefit from hearing. His exploits have been the inspiration of an entire generation, who sometimes even choose the colleges they will attend based on whose dining halls look most like Hogwarts. Today, the New York Times featured on the front page of their Business Day section, an article about General Electric, entitled ” G.E. Goes With What It Knows: Making Stuff .” Under a big picture of Jeff Immelt, the CEO of GE, a lead caption said: “Jeffrey Immelt, C.E.O. since 2000, has pared down General Electric to rely less on financial wizardry in its lending unit and more on physical products from the manufacturing divisions.” Jeff knows that not all wizardry should be leading the way forward. In fact, it was his sensibility, along with J.K. Rowling’s prodigious insights, that persuaded me to name my most recent business book, If Harry Potter Ran General Electric: Leadership Lessons from the World of the Wizards . Not many people know that Rowling, the best selling and wealthiest author of all time – as long as you don’t include God – was a classics major in college, and based much in her beloved stories on what she understood to be the chief virtues and vices of human life, from lessons she learned well in the philosophical works of the ancients. In Rowling’s stories, the young Harry’s defining properties seem to be his natural intellect, his passion, courage, loyalty, a feel for the real, and an uncanny adaptability. His friends sense something different about him. He’s not only an extraordinary young man. They know they can count on him. And they follow his lead even if it seems to mean risking everything to do so. General Electric, founded by the wizard Thomas Edison, has prospered over the years in many different ways, but has been challenged, of late, as most other companies, individuals, and families have, by our severe economic downturn. In their case, a financial division, GE Capital, had risen to an elite status within the company because some very smart people there were doing some deals that seemed magically productive. I know first hand, because I’ve spent time as a philosopher with some of the top producers of that division, in a retreat setting, and I came away quite impressed with their talent, intellect, and general business abilities. But GE historically has been mostly about making good things that people need. Former C.E.O. Jack Welch grew the company for years through acquisitions and other means. But when Jeff Immelt took over, he felt a pull right away back to the core business that has always driven the company – making useful and helpful things. Early on, he began talking about eco-friendly business and practical nanotechnology, some of the most magical stuff on the planet. As I’ve watched Mr. Immelt over the years, I’ve been impressed that he has so many of Harry Potter’s defining qualities. He’s very smart, extraordinarily talented, deeply passionate, courageous, loyal, and adaptable. He’s been able to change course to bring GE back to the core of their business, while still admiring and appreciating the financial acumen that is necessarily still an important part of the overall enterprise. In Rowling’s great stories, Harry Potter seems to take five steps very naturally to summon the courage he needs in whatever challenges he faces. These five steps also allow him to make the changes that need to be made and lead others to do likewise. I see this in Jeff Immelt, and in other great C.E.O.s. I also see it in successful individuals generally. I’d like to present these five steps very briefly here, for your possible edification and reflection. Harry Potter’s 5 Steps To Courage and Change (1) Prepare for the challenge. (2) Surround yourself with support. (3) Engage in positive self-talk. (4) Focus on what’s at stake. (5) Take appropriate action. This is great advice for any of us. When facing a new challenge, first prepare. Then gather a team. Remind yourself of your abilities and preparation, building your own confidence for the challenge. Well grounded confidence is contagious. Focus on what’s most important, keeping in view all the values that are at stake in the situation you face. Then act. Don’t wait forever, or prepare forever. Act courageously, even if you’re not feeling particularly courageous. This is a key to business success and is equally of great value to life success. The most extraordinary people do it naturally. All of us can do it deliberately. Then, our enterprises flourish, whether that enterprise is writing novels about a young wizard, or steering a global company. If Harry Potter ran General Electric, I think he’d be a lot like Jeff Immelt. And the results would be magical.

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Dan Dorfman: Jobs Shocker: Fact or Fiction?

December 5, 2010

It was big news over the weekend, front-page coverage everywhere — the unemployment shocker. That was Friday’s dismal November jobs report of a spurt in the month’s unemployment rate to 9.8% from 9.6%, an obvious sign of more economic distress. But how real were those numbers that came from the Bureau of Labor Statistics, which reported the creation of just 39,000 jobs, versus a widely expected addition to the employment rolls in some quarters of about 150,000 workers? Could the BLS report, like the illusion of a pool of water in the steaming desert, have been a mirage? The answer is an emphatic YES from TrimTabs Research, a West Coast liquidity tracker partially owned by Goldman Sachs whose TrimTabs clients include many of the country’s top hedge funds. The way TrimTabs figures it, the economy actually produced 117,000 new jobs in November, 78,000 more than what the BLS reported. Why such a disparity? As, Madeline Schnapp, TrimTabs economics skipper explains it, it’s a reflection of the radically different methodologies used by the two to determine the actual employment numbers. For example, the BLS derives its numbers through a survey of just 60,000 households, whereas TrimTabs’ figures are based on the taxes paid by all employees whose wages and salaries are subject to with-holding. Noting that the BLS is afflicted with the dilemma of having to make seasonal adjustments when it comes to issuing jobs numbers — which is especially difficult at this time of the year because of the heavy temporary retail hiring — she views its November report as a seasonally-adjusted fluke. “It’s like trying to hit a needle with a sledge hammer,” she says. “It ain’t easy.” Schnapp further believes the BLS numbers may also be fouled up because the agency failed to recognize that retailers hired their year-end workforce earlier this year than last year it did last year because of this year’s earlier launching of holiday sales. “We suspect,” she says, that October employment growth (a higher than expected 151,000 jobs) borrowed from November.” The BLS, which tells me it’s sticking by its November figures, is notorious for revising its monthly jobs numbers both up and down in ensuing months. And that’s precisely what Schnapp predicts will occur again with regard to the November report. In this case, she sees a sharp upward revision closer to the Trimtabs numbers. Interestingly, last Thursday Automatic Data Processing reported its closely watched monthly employment figures, which for November were closer to TrimTabs numbers than those of the BLS. ADP reported 93,000 new jobs, driven by growth in small business hiring. Schnapp rates the November employment showing (her estimated 117,000 job creations) as “okay, but not great,” noting a considerably higher number of new jobs (150,000 to 200,000 a month) are needed to keep pace with new entries into the work force. In recent weeks, a fair number of economists, given perkier retail numbers, including lively auto sales, and somewhat more positive consumer sentiment, have upgraded their GDP growth forecasts for 2011 to between 3% and 4%. The thought of a double-dip recession seems to have largely gone the way of the rotary telephone. Schnapp doesn’t share this ebullience. Her outlook: GDP growth next year will muddle along at about 2.5%, largely due to the drag from housing, the financial woes of local and state governments and a consumer population that is deleveraging. “We’re not on the road to a robust recovery, no way and not on your life, but stuck in a low growth mode for at least another year,” she says. “And don’t ignore the potential shockers, such as a spike in the price of oil, Iran going nuclear or North Korea attacking South Korea. As for the stock market, Schnapp sees a ho-hum 2011, with the S&P 500 (currently around 1,225) trading sideways in a narrow range of say 1,050 on the downside and 1,225 on the upside. In other words, a go-nowhere stock market; so don’t be hot to trot. What do you think? E-mail me at Dandordan@aol.com

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Terry Newell: "Good Enough for Government Work"

December 5, 2010

If you were seriously ill and could choose to go to a private hospital or a government-run veteran’s hospital, which would you pick? If you picked the former, you could have just bet your life on the wrong choice. The veteran’s health system outperformed all other sectors of the American health care system in 294 measures of quality in a 2004 RAND Corporation study. Last year, on the prestigious American Customer Satisfaction Index (ACSI), run by the University of Michigan, the Veterans Health Administration civilian health and medical program got a score of 88 (out of 100), compared to the non-government hospital average of 73. An anomaly? Not to be found in any other sector of the economy? Consider the following ACSI scores – and before you do, note that the ACSI model considers a wide range of service quality factors, from the courtesy and professionalism of customer service to the clarity and accessibility of information, the ease and timeliness of work processes, and the ease and usefulness of online assistance. Remember, all these data are obtained by an independent (i.e. non-government) source talking directly to customers about how they rate their customer experience: • Mercedes-Benz (86) receives a lower score than the Pension Benefit Guaranty Corporation (88) • Nordstrom (83) receives a lower score than the Railroad Retirement Board (88) • Nike (79) receives a lower score than the Federal Citizen Information Center (84) • GE (81) receives a lower score than the U.S. Citizenship and Immigration Services “Welcome to the United States” guide (86) OK, but in the new online economy, government is way behind, right? Wrong. Here are some ACSI score comparisons for Websites: • Google.com (80) vs. the Free Application for Federal Student Aid (www.fafsa.ed.gov) (88) • Wikipedia.org (77) vs. the National Library of Medicine (http://MedlinePlus.gov) (86) • Facebook.com (64) vs. IRS E-file (79) • USAToday.com (82) vs. the Social Security Retirement Estimator (90) Naturally, not every government organization performs better than every private sector organization. Government does have its duds, and the government-wide average ACSI score is seven points lower than the private sector average (though when government is compared to just the service sector of the private economy, this difference mostly evaporates). But government has its stars too, and they rarely get attention on the front pages of magazines, newspapers, or in the broadcast media. It’s not surprising then, that in a Washington Post poll conducted in late September 2010, 36 percent responded that “the quality of employees in the federal government is generally lower than the quality of employees who work in the private sector.” In the same poll, 49 percent said federal employees “work less hard than employees with similar jobs in private business”. What citizens say about government in the abstract is often totally different than what customers say about government when they actually use its services. This may be worth remembering as the nation mounts a new attack on government and government workers. The epithet we are used to hearing – “good enough for government work” – will be heard again, and worse. It may also be worth remembering, then, that in World War II, when that phrase was created, it meant that a product met the highest standards of quality and would not be accepted by Uncle Sam if it did not. Yes, many say, but government is so big, unruly, and thus inherently incompetent. Sure, there may be a few good government programs out there, but overall, why can’t it be as service-oriented and as customer-friendly as our local WalMart? WalMart gets an ACSI score of 71, exactly the same score as the U.S. Postal Service. Come to think of it, most of us really don’t want to lose our local post office as we cut back government. There may be a message there.

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Micron unveils flash memory devices that extend the life of NAND

December 2, 2010

Micron unveils flash memory devices that extend the life of NAND

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Kathleen E. Christensen: Exhausted? Time to Pace the Work-Life Marathon

November 29, 2010

Any runner can tell you that you can’t finish a marathon by sprinting the entire way. You’ve got to pace yourself, or at some point you’re going to collapse and crash. I think about that maxim when I look at the way Americans work today. Fifty years ago, the life cycle of the American worker was a relatively standard equation. You started a career in your 20s, working nine to five, five days a week. More often than not, you had a spouse who handled childcare full time. You worked through your early 60s, when you could reasonably expect to join the promised land known as retirement. To many people, that life cycle looks like a walk in the park compared to how we work today. For the majority of modern families, just getting by involves two parents both working jobs that extend well beyond what we used to call “full-time.” Young working parents are often still finishing school, while the rapid aging of the population means more people than ever before have elder care responsibilities, too. Not surprisingly, this rapid pace has squeezed out rituals like the family dinner , healthy habits like exercise, and of course, sleep. What’s more, people are doing all of this for longer than ever before, working into their late 60s and even 70s. In short, we’re sprinting through a marathon. We’ve sped up the pace, extended the finish line, and thrown in more obstacles along the way. Most careers are now 50-plus years, with few opportunities to focus on family and other responsibilities. And the maxim holds true: if you try to sprint through a 50-plus-year career, at some point you’re going to collapse and crash. We’re seeing those crashes right now. Many industries are experiencing higher turnover than ever before, employees are dropping out of the workforce altogether, and there are negative health outcomes for those who push themselves too hard for too long. Surveys from groups as diverse as Allstate Insurance and The Shriver Report have told us that people are exhausted with the status quo and fed up with having to choose between work and family. Employees across the spectrum say they desperately need career paths that look more like their lives. Not a straight and narrow sprint to the finish, but a shifting pace that speeds up and slows down as life puts different obstacles and opportunities in front of us. This means different things for different people. Maybe it means slowing the pace in the middle of your career, or adjusting your pace throughout so you have time for other commitments. Maybe it means taking a break to tend to family concerns and then getting back in the race full-time. Maybe it’s adapting the way you work altogether through telecommuting or job sharing . But one thing is clear: unless something significant changes in the structure of the workplace so that people have more say over when, where and how they work – more flexibility – we’re going to see an awful lot more people collapsing before t> hey reach the finish line. Now here’s the good news: it turns out that pacing marathon workers is also a good thing for business. For fifteen years, the Alfred P. Sloan Foundation has funded research into the workplace, work force and working families. One result we’ve seen across the board is that giving employees more flexibility in when, where and how they work is not just good for them, it has positive outcomes for businesses. This week in Washington, many businesses that have already put flexible practices into place will be represented at the first ever Focus on Workplace Flexibility conference . These pioneering business leaders have learned that workplace flexibility, when well designed, increases productivity and employee engagement, and lowers turnover and absenteeism. They’ve seen that it makes workplaces more efficient, not less. However, the vast majority of Americans are still employed in workplaces that offer little or no flexibility. Our most recent research shows a significant flexibility gap: eighty percent of Americans say they want workplace flexibility, but only a third report having it. This is unacceptable. There is no one-size-fits-all solution, but many different routes to workplace flexibility. Some are very simple; many are cost-neutral. If business leaders make the effort now to figure out which type of flexibility is right for them, we can pace today’s marathon workers before they crash. The lack of workplace flexibility is an issue for all of us — medical doctors and Ph.D. scientists; factory managers and hotel housekeepers. It affects those in their 20s just starting out with jobs and children, and those in the culminating stage of their work lives, caring for ill spouses or aged parents and planning their own retirement. As President Obama said at the White House Forum on Workplace Flexibility this spring, it is an issue that affects the strength of our economy. No American should ever feel the need to choose between work and family. And no business should ever lose an employee because they don’t have the tools to put workplace flexibility practices into place. The time has come for all of us — employers, workers and politicians alike–to focus on making workplace flexibility a reality for everyone. Learn more about workplace flexibility — and read program papers from the Focus on Workplace Flexibility conference — at workplaceflexibility.org

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PHOTOS: The Latest Recession Trend – Ridiculously Small Houses

November 29, 2010

GRATON, Calif.:(By Terence Chea, AP) As Americans downsize in the aftermath of a colossal real estate bust, at least one tiny corner of the housing market appears to be thriving. To save money or simplify their lives, a small but growing number of Americans are buying or building homes that could fit inside many people’s living rooms, according to entrepreneurs in the small house industry. (SCROLL DOWN FOR PHOTOS OF THE LATEST BATCH OF SMALL HOMES) Some put these wheeled homes in their backyards to use as offices, studios or extra bedrooms. Others use them as mobile vacation homes they can park in the woods. But the most intrepid of the tiny house owners live in them full-time, paring down their possessions and often living off the grid. “It’s very un-American in the sense that living small means consuming less,” said Jay Shafer, 46, co-founder of the Small House Society, sitting on the porch of his wooden cabin in California wine country. “Living in a small house like this really entails knowing what you need to be happy and getting rid of everything else.” Shafer, author of “The Small House Book,” built the 89-square-foot house himself a decade ago and lived in it full-time until his son was born last year. Inside a space the size of an ice cream truck, he has a kitchen with gas stove and sink, bathroom with shower, two-seater porch, bedroom loft and a “great room” where he can work and entertain – as long as he doesn’t invite more than a couple guests. He and his family now live in relatively sprawling 500-square foot home next to the tiny one. Shafer, co-owner of the Tumbleweed Tiny House Company, designs and builds miniature homes with a minimalist style that prizes quality over quantity and makes sure no cubic inch goes to waste. Most can be hooked up to public utilities. The houses, which pack a range of amenities in spaces smaller than some people’s closets, are sold for $40,000 to $50,000 ready-made, but cost half as much if you build it yourself. Tumbleweed’s business has grown significantly since the housing crisis began, Shafer said. He now sells about 50 blueprints, which cost $400 to $1,000 each, a year, up from 10 five years ago. The eight workshops he teaches around the country each year attract 40 participants on average, he said. “People’s reasons for living small vary a lot, but there seems to be a common thread of sustainability,” Shafer said. “A lot of people don’t want to use many more resources or put out more emissions than they have to.” Compared to trailers, these little houses are built with higher-quality materials, better insulation and eye-catching design. But they still have wheels that make them portable – and allow owners to get around housing regulations for stationary homes. Since the housing crisis and recession began, interest in tiny homes has grown dramatically among young people and retiring Baby Boomers, said Kent Griswold, who runs the Tiny House Blog, which attracts 5,000 to 7,000 visitors a day. “In the last couple years, the idea’s really taken off,” Griswold said. “There’s been a huge interest in people downsizing and there are a lot of young people who don’t want to be tied down with a huge mortgage and want to build their own space.” Gregory Johnson, who co-founded the Small House Society with Shafer, said the online community now has about 1,800 subscribers, up from about 300 five years ago. Most of them live in their small houses full-time and swap tips on living simple and small. Johnson, 46, who works as a computer consultant at the University of Iowa, said dozens of companies specializing small houses have popped up around the country over the past few years. Before he got married, Johnson lived for six years in a small cabin he built himself and he wrote a book called “Put Your Life on a Diet: Lessons Learned from Living in 140 Square Feet.” “You start to peel away the things that are unnecessary,” said Johnson, who now lives in a studio apartment with his wife. “It helps you define your priorities with regard to your material things.” Northern California’s Sonoma County has become a mini-mecca for the tiny house industry, with an assortment of new businesses launching over the last few years. Stephen Marshall, 63, worked as a building contractor for three decades before the real estate market tanked three years ago. That’s when he jumped into the tiny house business, starting Petaluma-based Little House On The Trailer. His company builds and sells small houses that can serve as stand-alone homes equipped with bathrooms and kitchens, and others he calls “A Room of One’s Own” that can be used as a home office or extra bedroom. Many of his customers are looking for extra space to accommodate an aging parent or adult children who are returning home, he said. He said his small houses, which sell for $20,000 to $50,000, are much cheaper than building a home addition and can be resold when the extra space is no longer needed. His company has sold 16 houses this year and aims to sell 20 next year. “The business is growing as the public becomes aware of this possibility,” Marshall said. “A lot of families are moving in with one another. A lot of young people can’t afford to move out. There’s just a lot of economic pressure to find an alternative way to provide for people’s housing needs.”

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Video: Smith Says USAA Insurance Not Interested in Acquisitions

November 19, 2010

Nov. 19 (Bloomberg) — Eric Smith, president of USAA Life Insurance Co., talks about the company’s growth strategy. Smith also discusses the state of the life insurance industry and insurance policies for U.S. military service members. He talks with Suzanne O’Halloran on Bloomberg Television’s “Bottom Line.” Bloomberg’s Mark Crumpton also speaks. (Source: Bloomberg)

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Cindy Fornelli: Working Together to Fight Financial Reporting Fraud

November 18, 2010

Enron. Worldcom. Adelphia. Once upon a time, all were successful companies, the envy of the business world. Until each was undone by financial fraud perpetrated by corporate leadership. When major frauds like these are discovered, investors are left angry and the markets in disarray. We wonder why we didn’t see it coming. We ask, “How did this happen?” What compels someone to commit fraud — to work hard, rise to the top, then undo his or her life’s work by committing a crime? That question led the Center for Audit Quality (CAQ) to launch an ambitious effort to understand financial reporting fraud, and to mitigate the conditions that can lead to such fraudulent behavior. As part of that initiative, the CAQ has established the first cross functional working group to develop tools and further research on deterring and detecting financial reporting fraud. The partnership is made up of leading organizations representing those with responsibility for the public company financial reporting “supply chain”: company management through Financial Executives International (FEI); audit committees through the National Association of Corporate Directors (NACD); internal auditors through The Institute of Internal Auditors (The IIA); and external auditors through the CAQ. This partnership is the outgrowth of a report released in October by the CAQ, Deterring and Detecting Financial Reporting Fraud – A Platform for Action. The basis of the report was a series of roundtable discussions attended by more than 100 stakeholders, and led by Michele Hooper, the CAQ Governing Board’s Co-Vice Chair, public company audit committee chair, and corporate governance expert. The report argues that a collective sharing of ideas and resources will advance efforts to detect and deter fraud to the benefit of investors and the capital markets. The CAQ’s anti-fraud partnership with FEI, NACD and The IIA will engage in activities designed to help foster an overall environment in which the risk of financial reporting fraud is minimized. The essential elements of such an environment include a) having a strong “tone at the top” – a strong corporate culture that expects employees to “do the right thing” throughout all levels of a company; b) robust and frequent communication among company management, their board members, and the external auditor to share information relevant to the company’s financial reports and control environment and to identify gaps in fraud monitoring; and c) the application of skepticism, a questioning mindset that leads to professional objectivity and an attitude of “trust, but verify.” The partnership is designed to leverage the experience and resources of the four groups to produce new and better tools and resources to help the supply chain more effectively deter and detect fraud. Initial work will focus on four broad areas: Advancing the understanding of the conditions that contribute to fraud to better understand the pre-conditions and indicators of financial reporting fraud. Promoting enhanced skepticism that is able to overcome a natural inclination to trust management and others involved in financial reporting without creating a hostile environment. Moderating the risks inherent in focusing only on short-term results. Exploring the role of information technology, which can be both an inhibitor and a facilitator of financial statement fraud, to maximize its potential to inhibit fraud. The anti-fraud partnership soon will consider next steps within the four areas of focus, with the goal of making recommendations for specific projects early next year. One of those steps will be exploring the psychology behind fraudulent behavior to expand our understanding of “Why?” According to one expert observer in the CAQ’s new report, “Most people who come unstuck in this context of accounting misstatement are basically honest people who get caught up and then they get desperate.” Through the work of our collaborative partnership, our goal is not only to better understand why people commit fraud, but also spot the warning signs before it’s too late.

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