Interesting Quotes From John Bogle

Here’s a quote from John Bogle regarding the subprime mortgage crisis and the part that the rating agencies played:

I have always been skeptical about the rating services. I think there was tremendous reliance on rating services. It is irresponsible for a giant financial institution to let someone else tell them the quality of the investments in their portfolio. Asking the rating agencies, who get paid to rate each of these CDOs, was like asking the barber if you need a haircut!

Good point. However, I don’t think the financial institutions had any idea what their portfolios were worth!

The other interesting quote came when Bogle was asked where he thought the Dow Jones Industrial Average would be ten years from now:

Well, the Dow is a peculiar piece of work. The Dow yield is 2.2 percent now, vs. the S&P’s 2 percent. Since I’m expecting a 6 percent to 7 percent return on stocks, the Dow ought to grow at 4 percent to 5 percent a year. So over ten years, growing 4.5 percent a year, it would grow by 55 percent and so it would be slightly over 20,000, give or take. But anybody who is expecting that ought to be prepared for a lot of bumps along the way.

I’m not a betting man, but if I were, I would bet (justified or not) that the Dow would be higher than that in ten years. This is pure speculation on my part, but I just think there’s a lot of foreign money out there and that money is going to prop up our stock prices.

Finally, did Bogle change his rule of thumb that states that a person’s bond allocation should be equal to their age? For example, a 40-year old should have 60% in stocks and 40% in bonds. When asked how a person who was 20 years from retirement should invest, Bogle said (emphasis mine):

People are retiring later in life nowadays. I’m 13 years past 65, and I still have plenty of energy to work every day. I got up at 5:30 this morning in New York and was ready for an 8:30 meeting in Philadelphia. If I can do it, I don’t see why anyone else can’t.

Take someone who is 45. They should be 70 percent stocks and 30 percent bonds. People think I’m being too conservative, but I would remind them that corporate earnings grow at about the rate of our GDP. Corporate after-tax profits as a percent of GDP have gone above 10 percent for the first time in history. Normally they are 6 percent of GDP. I don’t look for that to go any higher.

Hmmm… Interesting stuff. Be sure and read the rest of Bogle’s interview in the 2008 Fortune Investor’s Guide.

10 Questions for Larry Winget, The Pitbull of Personal Development®

Here’s an email interview with Larry Winget, author and personal deveolpement guru. You can learn more about Larry by checking out his website and blog.

1. How would you define what you do for a living?

I make people uncomfortable for a living. But I do it in an entertaining way. I remind people that they could do better if they wanted to do better. I show them that they already know exactly what it takes to be successful but they are too lazy to do it. I point out that their life and their results are their own damn fault and it doesn’t do any good to blame anyone other than the person looking back from the mirror. I remind people that life and business is simple and encourage them to uncomplicate things. It makes people uncomfortable to be reminded of these things because it leaves them no place to turn except back to themselves. However, I think it is empowering because it is a reminder that anyone can be successful and that it is up to them to make that decision. And never forget, that I do it in an entertaining way – you couldn’t be this caustic or in-your-face and get by with it if you weren’t also funny!

2. What’s your favorite aspect of your job? What’s your least favorite part?

My favorite part of what I do is watching people lean back like I have just slapped them when I say something particularly caustic like, “If your life sucks, it’s because you suck!” They will literally lean back in their chairs away from me. Then I enjoy watching the line sink in, registering in their brains and see their positive reaction as they lean back toward me indicating their buy-in to the line and the idea. And they are usually laughing when they do it. People aren’t used to brutal honesty so they see it as abrasive at first take, then realize that they think the same thing and embrace the whole concept. It’s the shock and then the acceptance that is fun to watch.

Easily the worst part of my job is the travel. I have been on the road 250 plus days per year for the past 15 years. Travel has always been challenging but it has gotten really bad this year and frankly, I’m exhausted by it. Therefore, I’m cutting back some on the speaking schedule from this point on. I’m getting too old and mean to do a different city every day.

3. Who are some of your influences? What’s you favorite book on the subject of personal growth?

The person who influenced me the most is Jim Rohn. His teaching is about life principles, which is what I have tried to emulate in my career as well. I have listened to his audio series, Take Charge of Your Life over one hundred times. I don’t really see life as a tactical journey but more as a journey of principles. When you get the principles right, the right tactics follow naturally.

In the past eighteen years, I have read nearly 4,000 books. I have read books on every aspect of success. Most weren’t very good, but there were a few gems that influenced me greatly. And I have also listened to over 10,000 hours of audio and watched over 2,000 hours of video of the world’s greatest speakers and thinkers. I can’t really give you one great book, but I can give you a few that might surprise you. While I am a bottom line kind of guy, I tend to read stuff that makes me think, not things that just give me a list of do’s and don’ts. Here is a great little list for anyone who wants to change their life: Manifest Your Destiny by Wayne Dyer, The War of Art by Steven Pressfield, The Science Of Mind by Ernest Holmes, First You Have To Row A Little Boat by Richard Bode.

4. What do you think is holding most people back from accomplishing their dreams?

You answered the question IN your question. Dreams are a waste of time. Dreams don’t come true, plans come true. I want people to forget their dreams and get some amazing plans. Plans are written down, with specific steps and time frames and actions.

5. You are known as the pitbull of personal finance. How did you get that nickname?

Actually, I have trademarked the moniker, The Pitbull of Personal Development®. Finance is just an offshoot of the personal development approach I have. Money is easy when you get the rest of your life right. I am actually not a finance guy or a business guy as much as I am a personal development guy. I got the nickname because I believe that most motivational messages come across like a really old pet poodle: sweet, cute and without teeth. Kind of enjoyable to be around but no lasting impact. My message is simple: personal responsibility. I believe that all human suffering can be traced back to this one simple concept. That is my message and I grab on fast and hold tight and won’t let go – like a pitbull. The name fits my style and sets me apart from the crowd.

6. Tell us about your show, Big Spender on A&E. What’s your mission on the show?

The show is about people who overspend their way into a financial disaster. They have wrecked their life and the lives of their family with their overspending. I ambush them in the midst of their shopping and in my warm, sweet, loving, nurturing way point out the error of their ways. (You can insert laughter right here!) I force them to confront their problems and put them on the right track and then go back a month later to check on their progress.

I show people that their real problem is misplaced priorities, not a lack of money. You spend your money on what is important to you. Period. If looking cute is the most important thing in your life, then you will spend your money at the mall and abandon your family and your other responsibilities along the way. When the fancy car is more important to you than your kid’s college, your money will go toward the car, not the savings account. See how simple this is? Life is like a crime novel, when you want to know the culprit, you simply follow the money. I also show people how simple it is to get out of debt.

7. Regarding Big Spender, why do you think people get into financial trouble?

Money that is easy to get, is easy to forget. In other words, credit is easy to come by these days and no one is forcing accountability in the collections of that money. We have sadly reached the point where we view the consumer as the victim in the collection of money. I see it differently. When you sign the contract for the credit card or to open the store charge account, you agree to pay a certain amount on a certain date every month. When you do it, everything is fine. When you don’t, you have lied and shown you aren’t a person who keeps their word. The punishment is that the interest rate goes up and your credit report takes a nasty hit. Don’t do it for a few months and someone will get on the phone and ask for their money. And never forget, it is their money, not your money. They have every right to go after their own money that you agreed to pay them. This is one more evidence that most money troubles aren’t really money troubles but are bigger issues. The problem described here is one of a lack of integrity. People get in financial trouble because of a lack of integrity and misplaced priorities.

8. What was it like to be on an episode of CNBC’s The Millionaire Inside? Will you be returning on future episodes?

Filming the show was great and allowed me to spend time with other “Money Mentors.” It was a reminder that what I do is very different than what others in the finance business do. I can’t teach you how to get rich. But I can teach you how to stop being broke. That is my area of expertise. The others are investment gurus. I’m clearly not.

I have done lots of television. I’ve been on CNN and Fox News and The Today Show and dozens of local shows around the country. My A&E show, Big Spender is different in that there is no studio audience or even a studio, it’s filmed on location in stores and people’s homes. The Millionaire Inside had a big studio audience in a major television studio so it was a different experience for me. It was fun and exciting, especially for a kid from Muskogee, Oklahoma who grew up dirt poor.

I am returning for an all new episode on July 28th entitled, “Get Inspired” that will run through the month of August.

9. Can you give us a sneak peek of your upcoming book?

My next book, You’re Broke Because You Want to Be: How to Stop Getting By and Start Getting Ahead, will be released in December by Gotham Books, a division of Penguin. The book is a short little how-to book with specific tactics to use when you are in real trouble. This isn’t an investment book or a get rich book. This is a “Holy crap, I am in trouble and I need to fix it TODAY!!!!” kind of book. This book is for people who are circling the drain and have no time for anything except a plan that will get them on the right track, right now. It is actually a work book with lots of exercises and worksheets to give people a clear view of just where they are financially. It has stories from the real world and from my own life that readers will find entertaining and valuable.

Most people won’t want to admit that they need the book but they will all admit to knowing someone who needs it. Trust me, if you owe money, you need this book. It’s practical, it works and it’s a short fun read. I’m a regular guy who grew up poor, got rich, lost it all, went bankrupt, and then worked his butt off AGAIN to become a multi-millionaire. I know what I’m talking about because I’ve done everything in this book.

10. Finally, Rush Limbaugh had a line of ties. Are there any plans for a Larry Winget line of shirts and boots?

I pride myself in my uniqueness and if I saw other people dressing like I do, then I would have to do something else! For now, I don’t think there are many who would be willing to dress like me, but you never know! So to answer your question, no Larry boots or shirts are in the works!

And that marks the end of the interview. I want to thank Larry for his time and wish him the best. I hope you (my readers) enjoyed this interview.

10 Questions for Alicia Rockmore, Co-Founder of Buttoned Up

Alicia Rockmore
Below is an interview I conducted via email with Alicia Rockmore, Co-founder (her “official” title is Queen Bee) of Buttoned Up, the company that makes all of those cool little products I gave away a couple of weeks ago. Anyway, it’s always fun to talk with entrepreneurs because so many of them are inspiring. I hope you enjoy this interview. If you have any questions that you would like to ask Alicia, please leave a comment and I’ll see if I can get her to stop by and answer them when she gets some free time.

What did you do before you started Buttoned Up?

I was a CPA at Ernst & Young, then got my MBA at University of Michigan and then worked for 14 years at CPG companies (e.g. General Mills and Unilever) before doing my own thing.

How did you come up with the idea for your organizational products?

Sarah Welch (My partner) and I worked for 15 years marketing to women. The need for women to get organized was (and still is) huge and there are not many products out there that make it easy. That is what we try to do….making getting organized easy so you can get on with the rest of your life.

How do you find clients?

Word of mouth and referrals. We have a great team at Buttoned Up. All are dedicated to what we are trying to accomplish.

Have you always been an organized person?

I am not by nature an organized person. I am like most women….I get organized because I have to in order to get on with the things I prefer to do (e.g. spend time with my family) My house is not perfect, my closets are not color coordinated.

What’s it like co-founding a company with friends?

Wonderful. Sarah and I are very lucky to have grown closer as friends by working together. There is also an opportunity to be very honest with each other because you know one another so well

What was the hardest lesson you had to learn about starting a company?

Everything no matter how great, has unanticipated costs, delays, etc…. We learned many lessons in our first 18 months that cost us time and money but we learned a tremendous amount.

How long did it take you to get your company’s products in Target stores?

2 years from when we started Buttoned Up.

What advice do you have for aspiring entrepreneurs?

Do not give up. People will tell you what is wrong with your idea, why its already been done (there are no new ideas), etc… If you believe in what you are doing, keep at it and you will find success.

What motivates you?

I love the challenge of making products that will help women get organized and that will really mean something to them. There is no greater high than when people write or call and say they love our products.

Finally, I noticed that your bio on the company website mentions that your husband is disorganized. Is this a challenge for you?

Yes, but we have been married 15 years so in each house we live in, he has his own messy space (a closet, extra room etc…) that way he can be messy and I don’t have to see it.

An Interview with Steve Rosen of the Kansas City Star

My regular readers might recognize the name Steve Rosen because I have linked to several of his articles recently. Steve has a weekly column in the Kansas City Star, which is also synicated in several newspapers across the country. His speciality is writing about kids and money, a topic near and dear to my heart as my wife and I have three kids of our own. Anyway, Steve and I have communicated over the last couple of months via email and I asked him if he would be so kind as to let me interview him. He said “yes,” and here’s the interview. I hope you enjoy it! Thanks Steve! Continue reading An Interview with Steve Rosen of the Kansas City Star

Interview with Scott Burns of the Dallas Morning News – Part 1

Along with Jonathan Clements of the Wall Street Journal, one of my favorite columnists/authors is Scott Burns with the Dallas Morning News. I have exchanged emails with Scott on several occasions over the last couple of years. Through those emails, we have formed a friendship. I asked Scott if he would agree to let me interview him so that his readers could get to know him better. He agreed and part one of the interview is below. Thanks Scott. All the rest of you enjoy! Continue reading Interview with Scott Burns of the Dallas Morning News – Part 1