money from the sky

In 1986 I was living in (then) West Germany as an exchange student. I was lucky enough to get a visa to visit (then) communist East Berlin with my German and American classmates. Exchange rules were very strict, and the amount of money (and type of currency) you were allowed to change were very tightly controlled. I changed a fair amount of Deutschmarks, not knowing how much I would need for a day trip. We had to return to West Berlin each night – presumably for security or because 16-year olds posed a threat to the regime.

mayakovsky moscow

So after paying the equivalent of $1.50 for a massive lunch and buying the few souvenirs we could find (I never did locate any good t-shirts with the logo “I went to a Warsaw Pact country and all I got was this lousy t-shirt”) I was left with a fair pile of change. Because of the currency exchange rules, it couldn’t be changed BACK into West German currency, so as we boarded the train our chaperone came around and told us we’d better not be holding any currency, because we’d get in trouble with the border guards. Since I had already endured one frightening yell-down from the East German guards while crossing back into West Berlin because of my (apparently banned) souvenirs, I decided to comply.

We hurriedly bought Fanta and assorted snacks but still had some change left. We then noticed that there was a throng of people shouting and gesturing at us on the end of the platform, yelling at the train. We noticed a shower of glittering coins flying out of the windows ahead of us. Assuming this was the thing to do, we chucked our coins out the window, too.

This was the first intimation I had, despite East Berlin’s immaculate, clean and very pleasant appearance that communism’s rosy presentation of economic stability might be a false front. Today, it also gives me pause when I reflect on the fate of one of the world’s mightiest, and shortest-lived, empires.

When I first returned from Russia I was invited to give a lecture on the Russian economy at a local university. At the time I was considered somewhat of an “expert” (please take careful note of the quotation marks) on the accounting theory surrounding foreign currency translation – particularly regarding the ruble – and the difficulty in making a true “translation” of Russian accounting information into Western accounting standards. For this class of beginning accounting students, I started with an anecdote: imagine if you walked into your local McDonald’s today and bought a Big Mac for $3. Your salary might be, say, $40,000 per year.

Now imagine you walk into that local McDonald’s a year later and a Big Mac now costs $200, but your company upped your salary to $2.6 million per year to keep pace with hyperinflation. You can still manage a Big Mac. Two months later your salary is still $2.6 million – the company’s not going to readjust monthly, only annually – but hyperinflation continues apace. Now a Big Mac costs $25,000. It has become an impossible luxury, almost 1% of your gross salary. That’s as if it cost $400 when you were making $40,000 per year. And your savings? Your lifetime savings of $2 million are now barely enough to pay for 80 Big Macs.

Does that sound ridiculous? Yes, but that’s exactly what happened in Russia in the early 90s. Prices changed daily, even hourly. Savings effectively disappeared. With private ownership of land impossible, all net worth other than STUFF disappeared. A good TV was a better investment than a savings account. A freezer could preserve more value than a bank. Banks were offering 100% interest rates or more and it wasn’t a good deal.

That can never happen in America, could it? Chances are it won’t. But if you think about it, the conditions that created hyperinflation are possible in the US. Don’t believe me? Imagine another oil embargo. How much will your food cost if the trucks that deliver it have to pay $12 per gallon for gas? What if a terrorist attack in a US port causes the US borders to be closed? Many of the fruits and vegetables in your local supermarket this time of year are imported from Latin or South America. How much will a tomato cost if the borders close? What happens if major institutions like Citigroup start collapsing? Do you think it’s impossible for the US to attack Mexico to gain access to its oil? I know you are picturing me wearing a tin foil hat, but bear with me.

This is the worst possible case. For the record, I don’t believe it will happen. But then I remember my friends in Russia, who grew up during the last years of the Soviet Union. When they were children the twin cancers of a bloated, inefficient and incompetent central government and a disastrous, expensive foreign war were eating away at the core of their nation. The Soviet Union was a country so powerful in the late 1960s that the United States felt it had to fight wars all over the globe, not to stop but just to slow its spread. The “evil empire” had gone from a backwards agrarian dictatorship to the second-most advanced military and technological power in human history in two generations; there was no reason for the average Soviet citizen to doubt that rate of advancement could last forever. They heard it on the news – calming words from the central government that it could avert a depression. The total collapse of their country in less than a decade caught every single person in the former Soviet Union (and in the world) by surprise. I don’t think even the most optimistic anti-Communist hoped for this in their fevered dreams. Today only the most rabid anti-American would hope for a collapse of the world’s largest economy, but now I think it is imaginable. I hope history will not repeat itself, but that hope has been futile since history began.

When I think of my friends in Russia and their hoarding of US dollars under mattresses and their almost complete and utter distrust of every single financial institution, I also remember that odd sensation in East Berlin in 1986. I remember throwing money out of the window, almost seeing it melt into nothing as it flew through the air. I hope I never see that again, but I particularly hope I never see it in my own country.

photo credit by me)

how companies miss the big picture

airplane

airplane
Years ago I was at a conference in Indonesia, of all places. I had dragged myself down there from Moscow, suffering (as I would later find out) from pneumonia.  The semi-tropical climate was nice, and I felt much better – but I was still suffering.  I knew that the 24+ hour return flight (Surabaya-Jakarta-Kuala Lumpur-Frankfurt) would be excruciating in my condition.  Traveling on Lufthansa on the way to the conference I had been placed in the smoking section, which was – as you can imagine – tortuous for someone suffering from a lung ailment.   I dreaded the return flight, and called the partner I was reporting to at my firm to prostrate myself via an international phone connection.

“Please let me upgrade to business class,” I asked.  “I am very sick and I’m headed to the doctor the second I get back.”

“It’s not in policy,” he responded.  I was a mere manager, and managers traveled coach, and didn’t get to complain when they were shoved in seat 76B of the smoking section.  “Take Monday off when you get back.  You’ll be fine.”

Of course I was tortured on the return trip by the wafting smoke throughout the plane. My pneumonia tripped and tra-la-la’d into double pneumonia and I passed out at work before being told by my doctor that I was in serious, serious health trouble.  The end result?  I packed it in, quit the firm and left Moscow.

I had an extremely good relationship with one of the clients of the firm; this client happened to be one of the biggest and most prestigious clients the firm had. They fired the firm soon after I left (not solely because of me, of course, but I’m sure it didn’t help). Other than that, of course, life continued on for both me and the firm.

Companies need to realize that it’s not always just about the “big things” like salary and titles. Little perks can make a big difference, and they aren’t always just perks. It doesn’t even have to be something like upgrading a sick business traveler from coach class. It can be small things like letting employees take time off for doctor’s appointments, or letting people come in a hour later and leave an hour later if that suits their lifestyle better. I think in today’s business world, the idea is that you can treat people like dogs (or worse than dogs – dogs have gourmet organic food these days). You can charge airlines passengers for tap water. And in my opinion soon you’ll see the final “perks” start to go as more and more companies decide that employees have built-in obsolescence: companies should simply squeeze employees as hard as they can for 2 or 3 years before they move on.

Treating people (employees OR customers) like this won’t be sustainable. The human spirit can only take so much abuse. People get tired of feeling like their company’s only recognition of them as human is the biweekly paycheck. Small things don’t cost companies much in comparison to the constant turnover of key employees (or loss of customers). Somehow it all became about the bottom line, but maximizing the bottom line is only going to go so far.

Photo Some rights reserved by Vox Efx

in the future, college will be for the rich and smart

MIT

MIT

 

Read this:

In 2003, only two colleges charged more than $40,000 a year for tuition, fees, and room and board; by 2009, 224 were above that mark. The total amount of outstanding student loan debt is now more than $1 trillion.

That’s from this NY Times article.  The simple fact is that in the future the smart and the rich will attend college, and if you’re poor or middle class and attend college, you’ll be saddled with tens (if not hundreds) of thousands of dollars of student loan debt – the only debt that the US government won’t allow you to discharge in bankruptcy.  Wonder why the government wants every kid to attend college?  Because you can’t discharge that debt – you’re on the hook whether you can afford it or not.  So we all need to attend college, and a good one, and incur plenty of debt doing it.  I didn’t buy it – I turned down the Ivy League and went to a state school, and still ended up with a six figure career.

I’ve written about this before.  I do not plan to pay for my childrens’ college education.  They will have to be smart enough to get scholarships, or they’ll have to work their way through college, or they can start a business right out of high school.  I don’t plan to indebt myself a quarter million to send them to a private school – a waste of money in my opinion – or allow them to indebt themselves, either.  That may sound cruel, but I think it’s far crueler to allow your 18-year-old – who doesn’t understand the world or personal finance – to go into a quarter million dollar debt for their English degree from Harvard.

There are exceptions, of course.  If you want to go into debt at Harvard to study government or finance and you’re going to leverage that into a job at Goldman Sachs, sigh, fine, have at it.  If you want to work your way through school to get a social work degree and you need an extra $10K to cover tuition, OK, that’s fine.  But if you want to study Sanskrit at Brown, and you’re my kid, good luck.

Here’s a simple rule of thumb:  don’t take out more in student loans than you can make (reasonably) in your first year out of school.  If you’re in education, and you plan to make $30K in your first year as a teacher:  don’t incur more than $30K in debt for school.  That may not sound like much, but after you pay for housing, food, insurance, and on and on, you’re going to be chipping away at that $30K per year for a decade.  And if you decide in the interim to get married and buy a house?  Forget about making headway against that loan.  Kids?  Paying it off at 50.

Generation X had a mixed bag: some paid, some earned, and some coasted on their college scholarships.  Many Gen Yers coasted.  Many Gen Xers – or whatever they are called – are counting on coasting, and will be shocked to find out their parents don’t have the money to let them coast.  Here’s hoping the Millenials – which include, I guess, my own kids, or whatever their generation will be called – will realize that they need to be smart and win scholarships, or be hard workers and sludge through community college and state college, or else will need to forge a college-less path through life.  I won’t encourage either of them to incur massive amounts of debt to get a low-earning degree; they’ll be better off starting a business or working as freelancers.  And you know what?  Motivated, talented people will always succeed, degree or not; and unmotivated, untalented people will always fail, even if they go to $100K/year schools.

Photo LicenseAttribution Some rights reserved by Francisco Diez

6 things to avoid if you want to be creative

dual monitor black and white

After writing for this blog for a few years, I’ve noticed that occasionally I’m stumped for topics. Recently it’s not even occasionally – it’s frequently.  I don’t 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 came 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 years ago: “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 cable TV and only watch Netflix and various other online services.  But it’s still far too easy to watch to much TV. 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. Even great shows like Breaking Bad still crowd out my own thoughts.  You can argue that they might inspire creativity later, but really they tend to push your creative process back.

I read too much. I have just finished speed-reading through the three (real) books of the Foundation series (which are wonderful books) and I’m currently reading Snow Crash. I have hundreds of blogs in my Google Reader, dozens of emails and reports and memos and even read children’s books daily (obviously). 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 once: “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 often had to read this kind of writing and reply to it all day long.

During my commute, I listen to podcasts or audibooks instead of brainstorming.  I like to spend that time listening to comedy podcasts or tech podcasts, 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 am still learning to be creative. When I first started blogging about nine 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’ ideas.

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.  Creativity is a mental muscle that many of us exercise far too little while we hammer away at our TPS reports.

10 quotes on careers

conference lecture

conference lecture

The quotes (10, plus a bonus):

“Each of the professions means a prejudice. The necessity for a career forces every one to take sides. We live in the age of the overworked, and the under-educated; the age in which people are so industrious that they become absolutely stupid.” -Oscar Wilde

I’ve found this to be quite true; people are so overworked that they make stupid decisions about their careers. It’s not that people are stupid, but the pressure and the stress make them ACT stupid. Big difference, same result.

“A career is wonderful, but you can’t curl up with it on a cold night.” -Marilyn Monroe

Amen, Marilyn. I spent a lot of years working like a maniac at my career and amazingly, those TPS reports don’t curl up with me on a cold night. On the other hand, they don’t steal my covers.

“Don’t confuse having a career with having a life” -Hillary Clinton

Yes, that Hillary Clinton. I’m sure she enjoys a lot of free time outside of her political career (there is no sarcastic font), but hey, politicians are free to dispense all sorts of advice that they themselves don’t take. She makes a great point, though. Don’t assume that being the hotshot assistant manager for the Northeast III region is “a life.” It’s a great accomplishment… but it’s not “a life” if it doesn’t fulfill your goals.

“Desire! That’s the one secret of every man’s career. Not education. Not being born with hidden talents. Desire.” -Bobby Unser, 3-time Indianapolis 500 winner

Wish I had thought about this a little before completing 7 years of school for two degrees. Eh, actually I’m happy with my education but Bubelah and I have this conversation all the time, with the same result (I will be annoying and put it in all caps for emphasis’ sake): AMERICANS CONFUSE EDUCATION WITH ACHIEVEMENT. Just because you have degrees out the wazoo doesn’t mean you’ll be successful. My suspicion is that successful people would be successful regardless of where they went to school or whether they went at all. Some of the least successful people I know are very educated.

“No man can succeed in a line of endeavor which he does not like.” -Napoleon Hill

If you read brip blap, you know I really (really, really) admire Napoleon Hill and his work. This is a straightforward statement that sums it up. I have never been successful in my line of work – accounting and finance – to the level I could’ve been because, quite frankly, I am bored by it. I don’t hate it. I’m actually pretty good at what I do, and I can hammer away at exceptionally complex accounting and finance problems with the best of them. But I get very, very bored with it very quickly. Because of that I’ve been moderately successful instead of extremely successful.

“I think everyone should experience defeat at least once during their career. You learn a lot from it. ” – Lou Holtz

I remember when I experienced defeat. Strictly speaking, it wasn’t in my career, but when I was attending mathematics PhD school I woke up one morning and said “this is NOT for me.” I had never seriously considered a career path other than “college professor in some type of math/computer science/linguistics/other technical type of study.” I sat down with a piece of paper and started writing down what I wanted, how I could do it, and how quickly I could do it. I came up with going back to school, getting a BA in accounting and an MBA in accounting… in two years. Doing that, though, achieved one of my dearest dreams: years of traveling the world at somebody else’s expense. My “defeat” in not completing PhD school led to some great things in my life.  So Lou, the absolutely awful analyst and overrated coach, got this one right.

” I’ve reached the pinnacle of my career. I just feel that I don’t have anything else to prove.” – Michael Jordan

I have little to say to this except this: can you even begin to imagine what it feels like to say that? I can’t.

“Everything I have, my career, my success, my family, I owe to America.” -Arnold Schwarzenegger

I’m not exactly an America-firster; I have some big problems with what my country has demonstrated about itself by making some poor electoral choices in 2000 and 2004.   At the same time, I’ve traveled around the world enough to know that it’s a humbling thing to realize that people all over the world dream of achieving something that we got through the dumb accident of birth: being an American (and this applies to Canada, too). I also doubly appreciate the privilege considering my wife and her family, who lost everything in the collapse of the Soviet Union but have rebuilt a middle class lifestyle in a little more than a decade despite coming to this country with nothing more – literally – than the clothes on their backs. America still has a lot going for it.

“My whole career can be summed up with ‘Ignorance is bliss.’ When you do not know better, you do not really worry about failing.” – Jeff Foxworthy

I don’t remember all of it, but I read an interesting interview with Foxworthy a while back. He was some cubicle dweller for IBM, I think, and was prodded by friends to give comedy a shot. A few redneck jokes later and he’s done alright. He said he had no idea of the odds against succeeding in comedy, and if he had he would have clung to his crap job for dear life.

“I don’t want to get into the habit of thinking about my career because when it comes down to it, it’s not that important. I could die tomorrow and the world would go on. I don’t want to separate myself from the rest of the world. If the world is not going too good, I’m part of that. I’ll be happy to take the blame. I’m along for the ride.” -River Phoenix

Er, I’m including this in the “how’s that working out for you” category. Don’t be along for the ride – the river can get bumpy and there are a few hard turns there. You need to keep a hand on the rudder (or whatever the boat-thingy that steers is called).

“I often thought that if there had been a good rap group around in those days, I might have chosen a career in music instead of politics.” -Richard M. Nixon

I am including this quote because, well, read it! Really? What I would give to see Tricky Dick representin’! Gas face! “I am not a criminal – I am the O.G.!” His new moniker? Janky Forty Sippa. Please visit this site to put a smile on your face on the way out of the workplace!

According to that site, brip blap should be redubbed “Rotten Tree Hugga.” Good idea?

LicenseAttribution Some rights reserved by runneralan2004

the only impediment to change is yourself

tomorrow

I entered accounting for a simple reason. Having spent time in Germany during high school as an exchange student, I wanted to get back.  I realized two semesters into my mathematics PhD that getting a PhD in math was clearly not going to help me achieve this goal.  I also thought that it wouldn’t achieve another goal, which I believe at the time was critical: making money.  So I dropped out my PhD program and spent a long time trying to come up with a list of career paths that would make money and let me live a jet-setting life.  Be careful what you wish for.

My MBA helped me achieve one of my goals: I lived the jet-set lifestyle.  I traveled for ten years to all corners of the globe – from Siberia to Indonesia to South America to Boston (Boston was colder than Siberia).  I made a lot of money.  I thought this was what a career was, and by any measure I was quite successful.  I zipped right up the corporate ladder and thought the progression up was itself purpose and goal, wrapped into one.

During that time I had one – 1 – boss I liked working for, out of maybe 5 or 6. That’s not a good ratio.  A saying I heard once – I wish I remember where – was that the only common element in all of your bad relationships is you, so I’m sure that some of the bosses weren’t bad – I was just a bad employee.  That may be.  I always had the skills to do the job, and I did my job well (at least that’s what my performance reviews and clients always said).  But something was wrong, and it got worse as time went by. That’s when I realized that the net enjoyment I was getting out of my job had turned negative.  Long hours, tense relationships with bosses, and a stressful profession started taking their toll.  After I got married I knew things had to change.

I like to think of myself as a risk-taker when it comes to my career, and yet at the same time I am risk-averse. I abruptly changed career paths in college, going from a mathematics PhD program to an MBA program.  I went to live and work in Russia during the chaotic 90s.  I have worked on audits and frauds where I had bodyguards to protect me.  But I hated taking risks and my risk-taking muscle atrophied over the years – or maybe it just got strained from overwork.  I wasn’t ready to leap from paycheck world to entrepreneurial world, so I took a halfway step, going to contract consulting.  I just couldn’t imagine going further, even though I wanted to – badly.

In retrospect this was a mistake. The early aughts (whatever we’re going to end up calling this decade) were a good time to take a chance.  Bubelah was still working, we didn’t have kids yet and the market favored individuals, not companies.  Most importantly, I needed to do something different.  If I learned one thing from my half-hearted shift to consulting, it is this little nugget, oft-repeated and seldom heeded:

THERE WILL NEVER BE A BETTER TIME TO MAKE BIG CHANGES IN YOUR LIFE/CAREER/HEALTH/WEALTH/ETC. THAN RIGHT NOW.

Don’t think that next year will be the year you can finally get fit, or get out of this dead-end job, or start paying down that debt, or get around to skydiving or writing that novel or having kids or…well, whatever. It is time-worn advice, and I know many people (including me) dismiss it – eh, I’ve got the thing coming up with the people and the stuff… maybe tomorrow I’ll get on it.

I knew I was sick of corporate life. I knew I didn’t want to do it anymore.  I still don’t.  I have not missed it at all.  I thought I might be more nervous, or miss the interaction or the environment but I don’t.  At all.  And I can pinpoint the moment at which I got sick of working in this environment – the moment at which the net enjoyment went from positive to negative for the first time. You want to know the awful answer?

My first week at work after I graduated from college.

Yep.

As I said, there were points when I was traveling to places I never would have gone (or chosen to go) when I was deeply grateful for my job. But I could have spent my time earning less money and taking more time off as a teacher after getting a math PhD and traveling (on a budget, admittedly) to the same places.  Traveling for business took me to some neat places, but some – like Warsaw, for example – I remember in conference rooms and hotel rooms and hotel bars and restaurants.   Many nights I ate dinner at 10 pm in the Warsaw Sheraton at the bar after another 16 hour day.  The only time I ever got to “see” Warsaw was when I took a day off after three weeks of 16 hour days to spend time with a former colleague of mine and her sister.  I saw the city for the first time after working there for three months.

But the big paychecks and the big travel and the big meetings all failed to deliver net enjoyment. I realized that I enjoy being at home most of the time, reading, writing, learning and maybe even playing. I know the pay’s not as good, but the net benefit to me is tremendous.  The net benefit to my family is significant.   I took risks to leave the US and work in a chaotic and dangerous country (at least, it was then)  once before.  Should I be scared to leave the corporate world?  Yes, but that shouldn’t stop me.  I left behind hundreds of colleagues who are OK with that kind of work – the pay makes it worth it, or the sense of self-worth from working on Wall Street or just the opportunity to get away from home a few days a week.  Not for me, and if it’s not for you, you shouldn’t wait until the perfect time to make a change either.

photo by taiyofj

Reblog this post [with Zemanta]

back to the future, and links

I’ve been swamped with kids’ parties and kids’ events and worrying about the Facebook IPO.  Things happen, right?  If I took one thing away from Friday’s IPO of the horrible-rate-of-return social media site, it is that people don’t understand return on investment and that speculation (also known as “gambling”) is really the heart of our stock market, if not our whole economy at this point.  Speculation is a horrible basis for an economy – I prefer investment in companies that produce things, even old-fashioned things like “income”.  Sigh.  Back to the late 90s.

I Love Eduardo Saverin’s Move to Become an Ex-Pat:  I agree.  I’m a bleeding-heart, tax-the-rich liberal but I still agree: if you are willing to renounce your citizenship and you are legally entitled to do so, kudos.  If the Congress gets into the business of punishing individuals for legally avoiding taxes, we’re all doomed.

» Heard Anything Interesting about Facebook Lately?:  Wildly unsuccessful IPO? I’m thinking Facebook is the next MySpace.  My bets are on Plurk.  Then again, I invested heavily in AOL.

The Financial Dangers of Being a Mail-Order Bride:  Interesting read, on a subject that most people probably haven’t considered.

More reads:

Brip Blap was included in two carnivals last week:

Thanks to all hosts for including my posts.

 

1 2 3 4 5 76