Archives For February 2012

Great Piece by Arthur Brooks

February 29, 2012

The expanding welfare state exists, in no small part, to shove marshmallows into our collective mouth. The government expunges sacrifice, smooths the risk out of our economic lives, and protects us from the consequences of our actions. It is aggressively moving us away from the national entrepreneurial ethos, teaching dependency and changing our relationship to the state.

This is not conservative dogma. Look at Greece. It is easy to get lost in the weeds of sovereign-debt ratings and monetary inflexibility, but the fundamental source of that country’s problems is straightforward. Politicians were unwilling for more than a decade to ask citizens for any meaningful sacrifice in public spending, which outstripped revenues. Citizens came to feel entitled to public resources their country had not earned and could not afford. As the country faced collapse, the result has been hopelessness, helplessness and Molotov cocktails.

That was from Obama’s Budget Flunks the Marshmallow Test which was in the February 24th edition of the WSJ.

By “marshmallow test,” Brooks is referring to the test conducted on kids in order to study self-control and deferred gratification.

Anyway, I agree with most everything Brooks says in his piece except for the idea of means-testing social security. He doesn’t mention it specifically but he alludes to it with this statement:

The present administration believes we should be able to get our country fiscally back on track without the vast majority of Americans having to accept less from government. Year after year, no entitlement recipient is asked to give up benefits—even benefits well above a basic safety net.

Good luck correcting this now. Meanwhile, the social security keeps raising the amount of income that’s subject to social security and those who are employed keep throwing more and more money down that hole.

Anyway, I like what Brooks has to say in this piece. It even goes hand-in-hand with the quote I posted yesterday from chapter two of “Think and Grow Rich” about how people tend to look at those who have achieved success in life as somehow catching a break that the rest of us didn’t get.

We continue our chapter-by-cpater review of Napoleon Hill’s classic work, “Think and Grow Rich.”

Chapter 2 is titled “Desire – The Starting Point of All Achievement”

Hill opens the chapter by referring back to the story of Edwin Barnes, the man who “thought” his way into a business partnership with Thomas Edison…

Today, people who know Barnes envy him, because of the “break” life yielded him. They see him in the days of his triumph, without taking the trouble to investigate the cause of his success.

Barnes succeeded because he chose a definite goal, placed all his energy, all his will power, all his effort, everything back of that goal. He did not become the partner of Edison the day he arrived. He was content to start in the most menial work, as long as it provided an opportunity to take even one step toward his cherished goal.

Five years passed before the chance he had been seeking made its appearance. During all those years not one ray of hope, not one promise of attainment of his DESIRE had been held out to him.

I think that’s the way it is with most success when we look at it from the outside after the success has already occurred. We don’t look at all the hard work that went into creating that success.

Anyway, the chapter is about how desire is the starting point of all achievement.

Further into the chapter, Hill lists his method for turning desire into success. In his steps, Hill focuses on the attainment on money but this method can work for any goal:

1. Fix in your mind the exact amount of money you desire. It is not sufficient merely to say, “I want plenty of money.” Be definite as to the amount. (There is a psychological reeason for definiteness which will be described in a subsequent chapter).

2. Determine exactly what you intend to give in return for the money you deisre. (There is no such reality as “something for nothing.”)

3. Establish a definite date when you intend to possess the money you deisre.

4. Create a definite plan for carrying out your desire, and begin at once, whether you are ready or not, to put this plan into action.

5. Write out a clear, concise statement of the amoutn of money you intend to acquire, nae the time limit for its acquisition, state what you intend to give in return for th emoney, and describe clearly the plan through which you intend to accumulate it.

6. Read you rwritten statement aloud, twice daily, once just before retiring at night, and once after arising in the morning. As you read–see and feel and believe yourself already in possession of the money.

Reading over those steps, I’ll admit they sound a tad hokey. However, if you take them as a whole and adjust them for your particular goal, they make a lot of sense. Basically, figure out what you want, decide what you will give, write it down, and review it.

The final third of the chapter is about achieving goals no matter what other people say. He closes the chapter with an inspiring story about his son, Blair, who was born without ears but used his “gift” to become a salesman for a hearing aid company.

Interesting article from Allan Roth:

Taking Stock: Don’t be the “Dumb Money”

This is long but interesting.

If you have twenty or so minutes, watch this video.

Brian Tracy with some healthy common sense:

I read this yesterday:

For Boomers, It’s a New Era of ‘Work ‘Til You Drop’

This part of the article in particular really stood out to me (bold mine):

For more than 30 years, Stewart ran his own photography business, doing everything from studio portraits to illustrating annual reports for hospitals and other large corporations to freelancing for national magazines and newspapers.

As the news media began to struggle, the magazine and newspaper work dried up. As the economy tanked, his large corporate clients began to use cheaper stock photos purchased online rather than hire him to take new ones. Eventually he took his current job, producing videos of pastors’ sermons and photos for church publications. He says he is glad to be one boomer to make a late career change and keep working.

“There were times when the money was really rolling in,” he says of his old business. “But somehow retirement wasn’t really in the forefront of my thinking then, so saving for it wasn’t an automatic thing.”

Yep. That’s how time goes. Days turn into months. Months turn into years. Years turn into decades. You get the idea. Before you know it, you’re forty years down the road and you have nothing.

No, there are no guarantees. You can save all your life and still end up with less than you thought you would have due to the whims of the market (or a major catastrophe like sickness). Regardless, it’s still prudent to save for the future.