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The US government currently has a debt of over $9.2 trillion dollars. In every measure of economic growth the US lags behind Europe and the emerging economic superpowers of India and China. At the same time, over $90 billion dollars will be spent in 2008 on financial aid. At least some of that money will go to pay for financial aid to students of the humanities, some probably at very expensive private schools. The economic policy of the United States encourages students to study any subject they wish, with no view to the ultimate goal - a return to society on its investment in the education of its citizens.

The increasingly dire economic situation in the US means it is time for action. The economic crisis is due in large part to spending on a war that, whether you support it or not, has far outstripped even the most wildly pessimistic initial estimates of its cost. It is also due to a lack of financial education in our citizenry that led thousands if not millions of people to believe that buying a house with a million dollar mortgage on a salary of $80,000 per year was not only possible but advisable. Many of these people would have benefited from government-subsidized finance or accounting college educations.

The average salary for a college graduate with a degree in English is about $30,000. The average salary for a college graduate with a degree in engineering can start at $68,000. Who is more likely to pay off a $40,000 student loan? Of course it depends on the individual, but the simple fact is that there should be some effort on the part of the government to encourage people to use financial aid to obtain degrees that result in higher-paying jobs; an employee who is paid more contributes more to the coffers of our nation in terms of taxes, productivity and usefulness of their output. The engine of our corporate economy is driven by the technical professions. Poetry will not win the war in Iraq.

In addition, the government should eliminate all financial aid for people who take more than 4 years to obtain a degree. They are delaying their entry into the workforce and thereby delaying repayment of their aid. They drain resources and attention away from the more capable and efficient students.

For these two reasons, the government must redirect financial aid to students who make the choice to (a) graduate as quickly as possible and (b) study science or engineering or math with the goal of obtaining a job with the maximum possible salary.

To me it becomes a question of subsidizing those professions that will help the United States remain the technological and scientific leader of the world. Private schools that value the humanities can dip into their endowments to reduce tuition for people who want to study linguistics, but as a taxpayer I want to see our nation’s universities churning out graduates who will get high-paying jobs and share the burden of high taxes with me.

The sole purpose of a university’s financial aid programs should be to churn out better, higher-paid employees (or better soldiers or technological innovators). There is no room for the pursuit of “thinking” in our schools. Those days are done.

(note: I am being sarcastic - I don’t actually think this at all)

(photo inflicted by Boris from Vienna)

Popularity: 5% [?]

Can citizens in western societies strive for wealth at the same time society tries to be ‘fair’? Let me give you a few situations, and in each case think whether society is being ‘fair.’

• A college graduate, well-educated about personal finance and the economy, decides to burn through everything they earn right now, saying “Why save for later? I’ll have fun now and hell with consequences.” Should society be responsible for his medical care and living expenses when he is 70 and can no longer work or care for himself adequately?
• A child is born with 50 different health problems (heart, congenital diseases, you name it). The cost of keeping that child alive is monumental, exceeding even the most generous insurance benefits. The cost of keeping that child alive cripple not only the family but put a strain on the local doctors, etc. who effectively donate their time to treat her. What if the cost of keeping that child alive until she’s 25 will be astronomical, and that cost could immunize or treat hundreds or thousands of children who need it? What obligation does society have to help this child at the expense of others?
• Taxes on earned income in America (wages, etc.) are significantly higher for the middle class than for someone in the lower class (more than 40 percent of the US population pays no income taxes. That seems fair. However, someone who lives off earnings from investments may pay 15% or less on their earnings, significantly less than a middle-class married couple. Is it fair that the middle class pays a disproportionate share? And would it be fair to tax the rich more, but not tax the poor more?

Those are just a few examples of how a wealth-building society can be unfair. You have your own reactions to the scenarios above. Here are mine:

• I detest this attitude. His attitude will take money out of my pocket when he is older. But in western society, particularly in the US, the care and treatment of the elderly is often left to the state. Should we have means testing for the elderly? “You didn’t get a decent job with good health insurance and keep your health up in your younger years, so to hell with you now that you’re old and have heart trouble? Live on the street because you didn’t save up?” As much as we might growl that in a moment of anger, I doubt anyone is prepared to see senior citizens sleeping on the streets.
• I knew a child like this. She was a lovely, happy and intelligent child who suffered from an incurable genetic condition that meant her chances of living to be a teenager - much less an adult - were minimal. I knew her years and years ago and I have no idea what happened to her. The logical line to take would be to say “no, society has to follow the principles of the herd and Darwin and leave the hindmost” or “the needs of the many outweigh the needs of the few, or the one,” but unless you a serial killer, devoid of emotion, it is impossible to meet children like her and not imagine society moving heaven and earth to care for her. Even if the chances of her living to be an adult are slim, she deserves her chance at whatever life she can have. My higher insurance premiums that may have resulted from that? Please.
• I am routinely infuriated by taxes. I am, however, not an adherent to the “no taxes” philosophy; a society that provides public services like police, postal services, libraries and a military has to raise revenues. They may not be spent wisely, but I can’t throw out the $800 screwdrivers with the public libraries - there will be good and bad. But I do realize that the unfairness in the system - the loopholes, the weak taxation on rich people - may not benefit me now but it will when I am financially free. I plan to be one of the people living off my investments, earning no wage income and avoiding my fair share of taxes. So if I want to build wealth, why should I rail against this system? I intend for it to benefit me in the end. So I throw myself into battle against my 1040 again this year, struggling forward in anticipation of crossing the financial finish line. If I finish it - against the relatively daunting odds, considering I have no singing talent, ball-shooting ability or parents named Hilton - will I become a “raise my taxes to even things out activist”? Er, no.

Fairness is an overused (and misused) word. There is no fairness in a free, capitalist society, nor - when you stop to consider it - does anyone want COMPLETE fairness. Inequalities in the system are what allow wealth to be built, or care to be given to the exceptional, or even to allow for the occasional idiot. A fair society would not allow elderly poverty, but it would not allow for financial freedom, either. It would not have plastic surgery for starlets, but it would also not have medical treatment for children dying of expensive incurable diseases. A fair society would increase the burden of taxation on everyone. Human society being what it is, the concept of fairness will always remain just that - a concept. And maybe that’s not such a bad thing.

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When I stated my goal a while back to have $2 million dollars within just a little more than 9 years, I realized that I had to make a few changes in my thinking. I am still working on most of these changes, but I have come up with a few targets.1. I can’t keep all of my savings in retirement accounts. I have a lot of money in IRAs (for myself and my wife) and my 401(k) that aren’t touchable without penalty until we reach age 59 1/2, and that’s too late if we retire (in my case) more than 10 years before that. Even though we have a fair amount saved in non-retirement accounts (about 30% of our total savings) we probably will need more than that.

2. We’ve got to say goodbye to the expensive metropolitan New York area. Paying almost 6% of my income in property taxes every year is not a good way to build wealth. The cost of living hits you nonstop in an area like this: from $15 per day in commuting costs to $50 monthly water bills, living near New York is just too expensive.

3. My wife and I need to be firmly on the same page. As I’ve pointed out in a guest post elsewhere, I mentally flip flop from goal to goal. Bubelah is a lot better at staying fixed on a goal, but she still changes her mind from time to time, too. We have to continue to stay focused on a very definite set of goals, and not suddenly decide this week that we should look into alpaca farming in Mexico, because it’s just not compatible with our goals, our skills or our interests in the long run.

4. We have to find a place to live with a solid school system. I have realized that sending children to a private school is a recipe for financial disaster. For some people private school may be the only choice, for religious or personal reasons. I would rather identify an area with great public schools rather than send my children to a private school simply because of the area I live in. I would rather change the area than spend an additional $12,000 per year on a school that - most likely - is no better than a good public school in a different area.

5. My mindset has to change from “save more” to “make more.” I have done very well for the past few years, with Bubelah’s help, at saving more. However, if you make $100 the most you can save is $100. If you want to save $110, the only way to do it is to make more money. I need to find more ways to identify alternative income. I need to quit thinking how to save an extra $50 per month and start putting that effort towards making an extra $50 per month.

6. I need to identify (and maintain) a master mind. I first became aware of this concept by reading Napoleon Hill’s book “Think and Grow Rich.” Wikipedia has an excellent article which includes a discussion of the master mind, but at its core, to me it means that you have to associate with people who have the same mindset and goals as you do. You need people whose interests complement yours, but whose skills fill the gaps between your own. A good example of this would understanding taxes. I know just enough about taxes to think I could be an expert, but I’m not. Should I learn more about taxes, or get someone in my master mind who already knows more? You can’t know everything. You should have a firm grasp on the basic principles of any subject important to your goals, but you should also have a team to rely on for assistance, and also be there for them when they need to rely on you.

I feel that reading blogs and forming connections with other people over the Internet is one part of this effort - I like to consider most of my blogroll as part of an online master mind. Another part of the effort is taking a cold, hard look at people who don’t add to this effort. Anyone who belittles your goals or disparages them cannot, by definition, be part of your master mind. Spending time with them has to be considered to be in opposition to your goals. I’ll talk more about that in future posts, but that is a scary concept that most people aren’t in a hurry to embrace: people who are close friends and family may be keeping you from achieving your goals, and you have to distance yourself from them if you want to achieve your goals.

…

I think all of these steps are doable. In 2007 Bubelah and I formulated our plan and started taking steps toward achieving it; in 2008 we plan to make even more substantial progress. What the mind can conceive, you can achieve.

(photo by Citizen L)

Popularity: 3% [?]

Unless there is some remarkable advance in medical technology between now and the year 2092, I will not live to see 2093. The oldest known human, Jeanne Calment, died at the age of 122 in 1997. So unless I outlive the longest-lived human, I am doomed. Keep in mind, for me to outlive her would mean that my lifespan would exceed that of the preceding 106+ billion people who have lived on the planet. I don’t like those odds. However, I plan to do my best to beat them.

That’s why, like Khrushchev, I will bury you. I won’t be happy, of course, I’ll feel terrible. But it wasn’t anything I did. In fact, it was a lot of things I didn’t do that made the difference between us. Some of them I had already started to do in 2007. Some of them were things I picked up doing later in my life. Sure, I should have done them sooner, but at least I started doing them eventually. Some of these were things I never did in the first place, which helped me even more. I actually hoped that you would start doing them too. So why will I bury you? Simple… because I:

• always, always, always wear a seatbelt.
• don’t eat meat except on rare occasions.
• always stay positive.
• am the master of my thoughts. I control them; they never control me.
  never skip breakfast.
• eat organic foods when available, natural when they aren’t and never touch any sort of artificially created foodstuffs.
• never add salt to my food.
• make at least 50% of my diet raw vegetables and fruits.
• steer clear of drugs.
• don’t smoke.
• don’t keep a gun in the house.
• run at least 3 times a week at a reasonable pace.
• do moderate weight training.
• have a positive outlook on life.
• do not work in a job that I hate. In fact, I love my job.
• am no longer afraid of money and give it no power over me.
• made a decision to be free of money, have that goal written down and carry it with me everywhere.
• treasure my time with my family.
• take care of my health by making regular visits to the doctor.
• floss.
• drink alcohol in moderation.
• never drink and drive.
• understand that the root of all suffering was craving.
• no longer subscribe to militant atheism but instead allowed myself to believe in a gentler agnosticism, and most importantly not to obsess on a battle that’s really not relevant to my life.
• play with my kids.
• love my wife without reserve.
• maintained strong relationships with my extended family.
• give back to my community.
• never dwell on the past.
• never dream too much of the future.
• stay fully engaged in the present.
• am grateful
• do not watch TV.
• no longer have violent entertainment in my life.
• never read the news.
• eliminate toxic materials from my household.
• never stop learning new things.
• meditate daily.
• smile and laugh.
• spend time outdoors.
• surround myself with positive people.
• enjoy reading.
• dress for comfort.
• keep a clear and simple todo list.
• live up to my promises.
• forget slights against me.
• remember dates that are important to others.
• take my vitamins.
• get plenty of sun.
• breathe deeply at least once per day.
• quit drinking caffeine.
• never drink soda.
• celebrate holidays with enthusiasm.
• wake up early.
• sleep just enough to feel rested.
• relax.
• never overeat, but also never skip meals.
• steer clear of gossip.
• give to charity.
• do good deeds.
• am kind to the elderly.
• never compromise on my morals.
• live an ethical life in terms of how I treat my environment and other living things.
• focus on the distance.
• travel.
• don’t waste time on regret.
• remember that after 2093, I will only exist in memories. The memory of my children will be my immortality.
• never forget that this is not a trial life, or a starter life, or a dress rehearsal.

Popularity: 7% [?]

In this article from Forbes magazine via MSN, I came across a few interesting statistics about their latest list of billionaires.

• Overall, seven of the 16 youngest [billionaires] hail from China, India or Russia. Meanwhile, aside from the Google and Yahoo guys, the only American among the 16 is publishing heir Daniel Ziff, who now runs a hedge fund.
• Thirteen of the 16 billionaires who have hit age 90 built their fortunes themselves — the three exceptions being U.S. oil-family scion David Rockefeller, Danish shipping-company executive Maersk Mc-Kinney Møller and Saudi banker Al Rajhi. The count among the youngest billionaires: 10 of 16 did it on their own.
• [The oldest billionaire alive] John Simplot, a high school dropout from the Midwest, bought and sold hogs in his youth after moving to Idaho from Iowa at an early age. He eventually plowed the profits into the potato business, where he grew his company to a $3 billion-a-year enterprise that became the biggest supplier for McDonald’s french fries. Simplot, 98, is now worth $3.6 billion.

What can you take away from that article? I’ll make a few gross generalizations:

1. Go east, young man. While America still may be a great place to move from being poor to being middle class, places like India and China will be the best places in the world to come up with transformative business ideas that can catapult people into billionaire status. US billionaires will increasingly be heirs rather than self-made.
2. However, a good trend is that worldwide most billionaires are still self-made. That means people coming from humble beginnings around the world have the economic freedom to leap into the billionaires’ club in a single generation.
3. You don’t have to come up with the next Windows or Google or Facebook to be a billionaire. You can also do it being a supplier of potatoes to McDonald’s. Although Google is a lot more exciting to write about and learn about, you can also come up with a better business model for providing cola companies with sweetener or figure out how to become a dominant supplier of asphalt in Texas. Don’t think that the road to riches is hidden solely in these old Interpipes.
4. I can do it. A self-made billionaire may have been born a millionaire, sure. The first million may indeed be the hardest. But the simple fact is that Larry Page and Sergey Brin - and John Simplot - did not have any more hours in their day than you, or the ability to shoot laser beams with their eyes, or help from alien beings. They made their wealth in a single lifetime using the same 24 hour days you have. I’m certainly not saying everyone needs to be a billionaire to be successful or happy or worthwhile, far from it. But if you WANT to do it, there is no reason you cannot.

Popularity: 3% [?]

After writing for this blog for a few months, I’ve noticed that occasionally I’m really stumped for topics. I don’t really get writer’s block, since once I have a topic I can usually fly away with it, but I do get stifled on overall themes and ideas. I was trying to come up with a list of ways that my creativity gets stifled in order to fight that tendency. Here they are:

I write for a living…technically. The kind of writing you do in a corporate environment does not encourage any creativity whatsoever. Here is a lovely gem I put in an email: “John Doe - Based on your note, I think the 5/31 date needs to be revised for the 2nd and 3rd issues, and the first issue (negative admin credits) still appears to be ready to be closed pending whatever verification is necessary. These will need corrected close dates, revised action plans if necessary and an updated open/closed status by 6/15 at the latest.”

That is not exactly the kind of writing that would draw visitors back to this blog, I think.

I watch TV. I have given up watching regular TV and only watch Netflix, but every now and then I will be distracted by something someone else is watching at our house or someone else’s house. I try not to be tempted, but something about flashing lights and loud noises draws me in. I find these shows fill up the empty, creative and quiet places in my head and replace them with light and fluffy cotton candy-like filling. The advertising pounds away at your senses and fills your head with jingles and multiple jarring images. I have a different experience watching a good movie on DVD, since it can inspire me to think about deeper issues and is not broken up every 10 minutes by commercials asking if I have heartburn or want to buy a new car.

I read too much. I have just finished speed-reading through the seven books of the Thomas Covenant series (which are wonderful books). I read about 70 blogs per day, dozens of emails and reports and memos and even the occasional children’s book aloud. Trying to pull in and process all of that information can crowd out creativity. I did quit reading any news that was not business or sports-related a few months ago, so at least my attention is not distracted by the latest developments with Paris Hilton. All of this is on top of my work-related reading, which is full of gems like this one I got in a memo today: “If applicable, does the appendix include a listing of all applications processes included in the assessment process and the process conclusion for said processes?” Read that again. Yes, I have to read this kind of writing and reply to it all day long.

During my commute, I read instead of brainstorming. I have a huge advantage over many people in that most of my commute is on public transportation. The trains on the particular route I’m taking to my current client are seldom very crowded, so I have a seat. I like to spend that time reading, since it makes the commute pass much more quickly, but I really should use it to let my mind wander and make notes of that wandering. I find that once I’m home there are too many other distractions – at least until everyone else goes to sleep – to properly brainstorm.

I do not write ideas down as soon as they occur. Too often, I have a great idea and tell myself “excellent post idea! Write an article about it this evening!” only to forget it by the time I get home. I make an effort to carry around a small notebook all day and write ideas in it as they occur, but I still sabotage myself constantly by thinking “remember to write that down when you get back to your desk.”

I am still learning to be creative. When I first started blogging about four years ago, I wrote a virulent political blog that was a huge series of links and videos and random comments and thoughts on almost a stream-of-consciousness basis. If I read an article, I would throw out a link and two lines of commentary, and then move on. Being creative means taking all of the influences you receive during the course of the day and processing them and creating something new, not just consolidating information. Many blogs just turn into link fests, but my favorite ones are usually written by people unafraid to present their own ideas rather than linking to others’.

Football. I used to be a sports fanatic, following the NFL, NBA, MLB and college football and basketball. I even watched the Tour de France and most tennis Grand Slams and golf majors. Other than hockey, I seldom missed a game of any sort on TV. SportsCenter was the wake up call and the goodnight lullaby. Those days are gone – the demands of marriage and fatherhood have crowded them out. However, I still love the NFL so much that I make time for it. I do realize, though, that spending time reading about NFL roster news, watching the games and buying Jets merchandise are bad, bad habits. Nothing about football will help me write this blog, be a better person or be more frugal. Still, I have loved the NFL since becoming a fan of the almost-great Browns teams of the 80s (Brian Sipe and Bernie Kosar, anyone?). I have to admit I am a footbaliholic. That barrier to creativity will probably remain.

Learning to overcome these barriers to creativity is part of what I am enjoying about the blogging process; having a small idea and then seeing the words spill out on the page once I get underway writing is a tremendous feeling.

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