Following the 2013 Budget, you might be considering reevaluating your own monetary matters. It’s a new financial year, and what better way to celebrate than by taking control of your personal income and expenditure. We all say that we’d like to be more frugal; to try and set some money aside for a rainy day. But how many of us actually put these words into action? Very few. Well, if you’re guilty of secret spending and would like to make these bad habits a thing of the past, now’s the time to start putting some plans in place to take control of your finances.

The future

One of the largest problems people tend to have with personal finance is that they spend for the moment rather than ensuring that they have enough money for the future. Whilst it’s important to treat yourself now and again, at the same time, you also have to bear in mind that the economy can be very unstable. In other words, to trust that ‘everything will be OK’ in the future may not be worth the risk!

So with this in mind, we recommend that you look into SIPP pension providers as soon as possible. A SIPP pension is a personal pension plan which, unlike other schemes, provides you with complete control over what happens to your money. Looking for that extra financial security? Then make setting up a pension a priority.

Eliminate debt

Once you’ve dealt with investing in your future, the next step is to address your financial past. Debt is a common yet major concern for many individuals. The stress of being in the red can leave people anxious, agitated and losing hours of sleep. However, the only way to handle the issue is to not bury your head in the sand and to tackle the debt head on.

Create a plan for yourself; establish how much you owe and how long it will take to eliminate the debt. Then from there, calculate a budget which includes how much you earn and your basic spending on a monthly basis. Seeing the cold hard facts in front of you makes it much easier to understand the areas where you overspend. This can help to reduce debt problems enormously, so make an effort not to impulse buy.  

Set goals

By this point, you’ll hopefully be feeling more confident about your financial situation. With a pension in place and your debt under control, you can finally breathe a sigh of relief. However, there is the question of life’s little luxuries… in your attempt to be more economical, you might feel guilty about buying something other than the bare essentials. So for this reason, we advise that you set goals for yourself. Once some of debt has been paid off, or you’ve managed to set aside a certain amount of money, why not pamper yourself? Treat yourself to a meal out, or a new wardrobe? Incentives like this can make saving the pennies so much sweeter.

Q: Did you always dream of drawing and writing, or were you about to happily settle for a so-called normal job? Was it the misery of “humiliating and low-paying jobs,” or the joy of drawing and writing, that pushed you this way?
A: I pursued a normal job so I wouldn’t starve to death while figuring out how to have an extraordinary job. I just didn’t know how it would play out. –Scott Adams, creator of Dilbert (link)

How can you find an extraordinary job? What’s the secret to a fulfilling career?

The perfect job. Who doesn’t dream of finding that perfect job? Flexible hours, massive responsibility (or lack thereof), great pay, interesting work, convivial colleagues, travel with perks, and a corner office overlooking the city. Chances are that it’s just that – a dream. Most of us who work for a living – as opposed to entrepreneurs – are stuck working at something less than our dream. The need to pay the rent, the mortgage, the medical bills and so on simply makes the necessity of a paycheck too much to disregard. There are some positives about having that not-so-perfect job, though. Here are 9 things to remember about your current less-than-perfect job:

1. You don’t have to go out feet first. I pose this question to people at work often: do you plan to die at your desk after decades of working for this company? The answer is always no, so I say “then you plan to quit – it’s simply a question of timing.” Remember that your job is not forever. The drama and politics that seem so real now will be gone in 10 years – probably even less – from your memory.

2. You are not your job. Albert Einstein was a patent clerk. Nobody remembers Einstein for his year-end patent clerking evaluation, or the patent clerk staff meetings he skipped. He was not defined by his job, but by his work. If you love to paint, don’t let the fact that you work in retail sales discourage you from painting.

3. Take pride in your paycheck. It may seem like a small thing, often dismissed as “not following your dreams,” but there is some value to simply bringing home a paycheck. If you have a family, be proud that you can provide for them. If you are single, be proud that you stand on your own feet without help from your parents. Even if your job is not perfect, take some pride in the fact that through this job you can support yourself (and your family).

4. Never stop learning. Even the worst possible job presents opportunities for learning – even if they are lessons like “I never want to do this again.” Try and find opportunities in your job to learn new skills. Those skills might come in handy at your NEXT job.

5. Your colleagues may change. If you suffer with a particular colleague, remember that they may leave any day. You don’t necessarily HAVE to be the one to blink and quit! Sometimes you can outlast people that irritate you.

6. The next job may not be that great, either. Everyone has experienced the sinking feeling of quitting one job, moving to a new one and discovering it may be even worse than the one before. If you set an expectation that your life will be a never-ending series of triumphant improvements, you may have some too-high expectations to overcome. Even a near-perfect job will have its off days.

7. Working on the side is only possible if you have “a side.” Writing the next great American screenplay is a terrific idea (although you’ll be crossing the picket lines if you do). However, nobody has ever said that you have to do that and nothing else. There is no shame keeping your day job to support yourself and working on side projects meanwhile. Scott Adams kept working at the phone company in a cubicle even after Dilbert became a syndicated comic strip. Keep at it. Success will come.

8. Don’t discount the social aspect of a bad job. Sometimes the job duties may be bad but the people you work with are great. If you have a bad job but you like your co-workers, keep in mind that a rewarding job doesn’t always guarantee like-minded, friendly colleagues.

9. Motivation isn’t always positive! Sometimes keeping that not-so-perfect job is what spurs people on to avoid “jobs” altogether. Maybe the employee lifestyle just isn’t for you – use that frustration with your current job to inspire you to discover your real passion and break away!

(photo by Ol.v!er [H2vPk])

Everyone likes free money. It’s my favorite kind, personally. I’m talking about the $20 bill lying on the ground. The birthday check from Great Aunt Winifred for $5. The extra 30 minutes someone overpaid on the parking meter that you get to use when you park there. It’s all good.

So why would you pass up free money? The problem is, there are plenty of opportunities, even in this day and age, to get money for nothing. Of course there is a price – you may have to fill out a form, or walk to a bank, or call an 800 number. But in practical terms, we’re talking about nothing. So where do you get this free money? Who is crazy enough to give it away? Your employer, the federal government, banks, credit card companies, airlines, supermarkets? The answer: all of them!

1. Not taking advantage of employer match in your 401(k). This is a biggie. If your employer offers a matching program for your 401(k), what they are telling you is for every $1 you put towards your retirement – up to a certain level – they will give you $1. You don’t have to stay later, or hang with the boss under the mistletoe at the holiday party. They’ll just put it in your 401(k) and walk away. It may take a year or two to vest fully, but it’s your decision to stay or leave. Don’t pass up this unless you feel that you don’t really deserve any more of your company’s money than they graciously give you in salary.

2. Not using a cash back rewards card. Credit card companies are not our buddies. They are not in business to make our lives more convenient – they are in business to trick us into running up big balances. What easier way than telling you that every time you spend $100 they’ll give you four shiny new quarters? The trick here is to turn the tables on them. Put all of your expenses on a cash-back credit card each month, then pay off the balance in full. They’ll probably be muttering and complaining in their plush credit card executive offices, but they’ll give you the money. I get cash back on my donations to charity because I do this. Think about that – I give money to charity but I use a cash-back card that pays me 1% back. If that isn’t free money, I don’t know what is.

3. Failing to join your supermarket ‘frequent shopper program’. Most big supermarkets have a “card” price on their store brands. If you use your ‘frequent shopper card’ they give you big discounts. All they ask in return is the ability to measure your buying patterns for marketing purposes. That may be a little creepy knowing that all that data’s being compiled about you, but hey! I’m not about to pay $1 for something I could pay $.50 for just by giving out information to Winn-Dixie that they probably can track in other ways, anyway. I may regret getting a flyer in the mail but most of these supermarkets let you opt-out of mailings.

4. Withholding too much. The federal government is a pesky creditor. Imagine if you went to a nice restaurant and while you were eating the waiter came by every 10 minutes to ask for another 1/6th of your bill. Annoying, isn’t it? Well, Uncle Sam can’t wait until April 15th to get your tax payment – he needs it now and he needs it bad. But he also lets you decide just exactly how much should be withheld from your paycheck every month. Imagine you’re back at the crazy restaurant. The waiter comes by and wants $10 every 10 minutes. Would you give him $15 each time and tell him to give you the change back after dinner? Why would you want him holding your money for you? Why do you want the government holding your money that could be in a high-yield savings account? Reducing your withholding can put some money in your pocket NOW instead of later.

5. Not joining airline/hotel/etc. frequent flyer programs. I know the value of a frequent flyer mile isn’t what it used to be, but if you fly they don’t charge you anything extra to put the miles in an account. I’ve paid for enough flights and hotel rooms over the years using points that I think it’s worth it. I would have paid for those flights and rooms otherwise. Using points is a hassle, I know, but it’s still something for nothing. The “something” is a little bit less every year, but it’s still there.

It’s all free money – who wouldn’t want some of that?

I didn’t get that much out of college, other than friends, knowledge, life experiences, and the ability to blow up an opponent in lacrosse.  I majored in math, and now I’m a finance and systems consultant.  Related, fine.  But they are two different disciplines.  I studied linguistics, and while I’m able to speak several languages, I don’t really pay much attention to language, per se.  I minored in Russian, though, and that deeply, thoroughly, and massively affected my life – the choices I made, the places I lived, even all the way through to my spouse and (eventually) my kids.  So don’t assume college doesn’t matter… it just doesn’t matter the way you think it will.  I thought I would be a famous mathematician based on my time in college.  Nope.  But little did I suspect I’d become a Russophile and become “russkiy v sertsye” – Russian at heart.

From Good Financial Moves for College, Part 2:

But that’s not the biggest part of it. Without developing my Russian skills I wouldn’t have met, pursued and married my wife. Maybe if I had taken Japanese I would have lived in Japan, developed a fondness for all things Japanese. Hard to say. But I do know that the decision to learn Russian set in motion the life process that brought me to where I am today.

Photo License Some rights reserved by Bridgman Pottery

Since 2006 I have seldom worked more than 38 or so hours per week.  Here are examples of some of the clients I’ve had both in New York and Florida.  Client A was a very short commute (less than half an hour), and what I’d call an “early office” – I made it in around 8:00 am most days and usually left by 4:00.  Client B was a long commute (almost two hours each way), and while I seldom worked more than 8 hours in a day I did stay late on occasion.  It was a “late office” – most of the people in my department drifted in around 9:30 or 10:00, so it was hard to justify arriving at 8 and leaving at 4.  Client C was a short commute (by New York standards) of one hour, and the client was very flexible about the hours, not really caring if I arrived at 8 or at 10.  It was very much a ROWE office.  Client D was a driving commute, about 45 minutes, depending on traffic (often much longer in the evenings) and required that you be glued to your desk every minute of the day.

So when was I most productive while working? Client A was a horrific environment, with a no-wall cubicle farm, frequent last-minute meetings and a lot of work taking place on a trading desk.  If you’ve ever seen the movie “Boiler Room,” that’s the environment I was working in.  Client B was the exact opposite.  They gave me a quiet cubicle on the opposite side of the floor from the rest of the department.  They never had meetings, and email was the preferred method of communication.  Client C was back to the Client A world – a huge conference room shared by 45 consultants, all talking on mobile phones, yelling back and forth to each other and sitting two feet apart. Client D was extremely restrictive – quiet, with a boss who didn’t like hearing her staff socialize.  So where was I the most productive, both professionally and personally?  I was far more productive while working at Client B with four hours of commuting time than I ever was before or after.  Why?

Having so little free time while at Client B forced me to be organized and disciplined with my time while at home. It also made me focused at work, knowing that whatever tasks I could accomplish there would free up time at home.   I was focused on completing my work quickly and efficiently, and getting out as soon as possible, even if it meant working less than eight hours, because the commute was so long.   I did not spend endless hours reading Sports Illustrated or The New York Times during my commute.  I made good use of my time on the train by reading, and as any writer can tell you reading is the best inspiration.   Although we only had one child at the time, we didn’t have a babysitter and I seldom had any real free time until 9 or 10 pm.  So again, I knew I had to make the most of an hour or two late at night.

My busiest time was a time of tremendous productivity for me. Most of the “most popular” posts I wrote on brip blap were written during that time.  I was tired, and I felt like I had no free time, but everything got done that needed to get done.  While at Clients A, C and D, almost nothing got done.  The oppressive work environment meant that I was less productive professionally.  The noise and lack of space made it hard to accomplish anything.  Because I took longer to do my work, I came home and started writing, and it wasn’t good.  Because the commutes were short, I quit reading books and started listening to morning shock jock bits (this was before I discovered podcasts).  My personal and professional productivity took a beating.

Now, with more free time, you might expect to be more productive.  In my experience, I am not. I find that in a non-structured environment I have difficulty focusing on even the simplest tasks, which is surprising to me.   I have trouble reading.  I spend more time than I should with my kids, but not always in a focused or in-the-moment way.  I cannot get organized about my computer time – I check email again and again throughout the day, which is a terrible idea.  I waste time on Facebook and countless other nonproductive sites.

Some of us, despite what we like to think, need the structure of a job to be productive. Sometimes getting up and leaving the house forces you to be more productive whether you like it or not.  I have had to confront a simple fact:  everything I thought I knew about organizing my time has to be thrown out the window.  I have never been good about organization and productivity, because I was only organized and productive when forced to be by circumstance!  I have to relearn so much to be as organized as I need to be; but right now I have far more free time than I did in the past to do nothing but learn, so I have no excuses now.

Stephen King says in his masterpiece “On Writing” that the most important part of writing is learning to close the door. He’s a brilliant writer (if you think of him only as a hack horror writer, try picking up one of his books sometime – they are as well-written as anything you’ll ever read).  His point is that if you fail to close the door when writing, both figuratively and literally, you’ll never have a chance to succeed.  It is too easy to let the world distract.  Although he is talking about writing, he could just as easily be talking about cooking or exercising or almost any productive venture.  We have too much to distract us, and too little time to do anything well if we fail to concentrate on what we are doing at that moment.  The challenge is to learn that focus.

photo credit: gadl

I’ve often fantasized about becoming an entrepreneur. It’s an easy thing for someone who works in the corporate world to do. I made a halfway move: I’m a consultant. I don’t really live ‘in’ the world that my corporate colleagues do, but I do physically sit in the same place and enjoy the same pleasant fluorescent-filled days they do. But you’ll find in this corporate world that many employees dream of a future, full of boss-less days, exciting work and endless financial rewards. Here’s a wakeup call.

If you are an entrepreneur, nothing will stop you. I had friends in college (and in high school) who were entrepreneurs. They not only didn’t want to take a job while they built a business – they NEVER wanted a job. The very idea of a job was antithetical to the way they thought. I have relatives like this, too. They would rather live in a dump than take a ‘job’. They might work at at gas station for a while, or a temp job, just to put a roof over their heads. But they never, ever would engage in the kind of corporate jobs many people accept for granted. They wouldn’t give up the time when they could be building a business to sit in a cubicle and wait.

That’s not an indictment of corporate employment. It works for some people. But I don’t like the idea that within ever corporate employee there’s an entrepreneur waiting to bust out. That’s possible, but not likely. Most of the entrepreneurs I’ve known were uncontrollable maniacs – they had to get out there and build something. They were never going to settle for sitting at a desk.

It’s hard to admit what you are, sometimes. I wasn’t an employee – that was an easy admission for me to make, after I made the switch. What was tough for me was admitting that, other than my side income through my blog, I wasn’t an entrepreneur. I’m not. It’s not my skill set – I’m technically savvy but I’m a terrible marketer and salesperson. If you want to be an entrepreneur, you’ll do it as soon as you have 30 days’ worth of rent money saved up. You’ll be ready for the risk. If you don’t? You’re still a good person, but you’re probably better off leaving the business-building to someone else, and concentrating on your job.

Photo License All rights reserved by sangyul

Before I was married, I used to have a “local” watering hole in my neighborhood in Manhattan.  I would drop by after work with friends and the bartender would have my usual drink set up before I even took a seat.  The waitresses would stop by to chat, and I knew them by name.  I would get the best seat in the house ahead of tourists waiting in line if I came in a group.  The manager let me stay after hours, and invited me to special events.  Did I tip?  You bet I did.

If you have a situation like this, big tipping is tough to avoid.  You get to know people and they provide you in return with great service on a constant basis.  I never left less than a 20% tip even on the rare occassions that I was dissatisfied.  I got so many free drinks that often I would just take the amount I was given gratis and just hand it right back over to the waitresses or bartender.

Contrast this with stopping at a diner on an interstate trip.  You get ho-hum service, perhaps, and ho-hum food.  Do you leave a 15% or 20% tip like you would at a “local”?  And if not, why?  Would it make a difference if you knew that the cook got a fresh batch of salad out for your salad – and would it make a difference if it was just coincidence that he got it for you?  And in a sense, why wouldn’t you leave far less?  You’re not going to return, right?  Personally I feel guilty, but really – it’s not like you’re coming back, is it?

Tipping is an odd case of getting a service, then paying for it.  If you hired a plumber to work on your house and said “you know what?  I’ll pay you what I think it’s worth when you’re done” he would probably knock you over on the way out the door.  Restaurant workers (and maid services in hotels, etc.) do the best they can to provide good service, not knowing if you’ll be the one-in-a-million person who leaves 10 $100 bills tucked under your check or the jerk who asks for 15 martinis and a steak done JUST SO before leaving a 3% tip.  Imagine working at your job that way – if every payday you got a minimal base salary plus a “tip” depending on how happy your boss was with your work.

It’s hard to balance tipping with being a frugal person.  I don’t like tipping.  I wish everything was a flat fee.  I wish waiters and waitresses were paid minimum wage.  It’s easy if you’re a regular somewhere to be generous.  If you live in Manhattan and have a super or a doorman, it’s easy to realize that you need their help, and they’ll give it whether you pay or not, so you SHOULD reward them for their help.  It’s trickier when it’s the guy delivering the new couch.  You’ll never see him again.  He did his job.  But it’s hard work, and maybe – just maybe – he could have dinged a wall or tracked in mud, but he took a little care not to.

I don’t know the answer.  I generally tip generously at restaurants but not so generously when it’s “slipping cash” to someone, mainly because I’m embarrassed about it being too much (looking like a rube) or too little (looking cheap) so I often just pretend I “left my wallet upstairs – this is all I have.”  What I do know is that in general in life you’ll be a lot happier if you mentally price your tip BEFORE getting the service and then pay it that way after you get it.  Think to yourself “I’ll tip the waiter 15% unless he ignores our table or gets an order wrong or forgets to bring us water,” or “I’ll tip the housekeeping service $20 per day as long as the room is cleaned to a T,” or “I’ll give that guy $50 to move the couch in unless he dings the wall or messes up the fabric,” and so on.  Tipping is an uncomfortable activity for most, and even more uncomfortable for someone who relies on them for a living.

It’s amazing what a little time off can do for your attitude towards work. It’s why so many of us love to jet abroad for a week-long getaway each year: we come back feeling refreshed, relaxed and ready to tackle the weeks ahead. But if you don’t have a holiday planned in the imminent future, and would like to get that same energized enthusiasm for your career, there are other ways to do so. Coaching is an increasingly popular way to achieve this.
Although there are often negative connotations associated with the word ‘therapy,’ the two are not all that dissimilar. A good coach can listen neutrally to you, help assess your current situation and make positive changes in your life.

For those who feel like they are in a career lull, bored of the same everyday routine, a new challenge could be what awaits you – and don’t worry, even those with the most fulfilling careers can feel like this occasionally.

Here are 3 key areas that coaching can help you with, whilst helping you get out of that rut and enjoy working again:

1. Helps to build confidence.
If you have been in one position or industry for a long time, the thought of leaving that familiarity can be very daunting. Sometimes it can feel more secure to stay in your accustomed bubble. But, more often than not, all you need is a confidence boost to make the changes that you want in your career.  A coach can offer the encouragement required to believe in yourself- whether this is through interview techniques for a new position or the courage to speak with your superior and re-negotiate your current contract.

2. Become objective about yourself.
A coach can offer objectivity. It’s difficult to accurately review ourselves. Similarly, when a partner, friend or family member offers advice or an opinion, it is often biased in the hope of being supportive. But, to break old habits you will need tough love. Acknowledging your strengths and weaknesses can give you a new sense of direction, and an outsider is the best way to achieve this.
Not only can this new awareness help you differentiate between your desire for a new routine or a new lifestyle altogether, but it can mean you have the opportunity to make effective alterations to inject more happiness into your daily humdrum activities. We spend the majority of our days in the workplace so you may as well make the most of it.

3. Set achievable goals.
Experience with business clients gives coaches the knowledge to know what goals are feasible within a set time frame. Aiming to ‘turn your life around’ in a fortnight is not only unrealistic, but can leave you feeling deflated when it doesn’t happen – despite being impracticable in the first place.  Emotions can often overwhelm us and trigger impulsive decision but having an objective person for support can ensure that you don’t throw in the towel without a proper plan.

When you’re in a rut in your career, it’s always a good idea to evaluate your current situation, look at where you want to be, and what you’re capable of. Then it’s just about receiving the push to get it done. This is what coaching is ideal for. The renowned philosopher Albert Schweitzer famously said: “Success is not the key to happiness. Happiness is the key to success. If you love what you are doing, you will be successful.”

Finding what you love is half the battle. Learning how to implement it is the other. In this sense, life coaching may not be imperative for your career, but just like a sunny day, although it might not always be needed, it sure makes a different when it’s there.

Bev James is the managing director of The Coaching Academy who trains and mentors life coaches across the UK. Bev enjoys her life as a successful serial entrepreneur, coach, and business mentor.”

Photo License Some rights reserved by Ari Helminen

Years ago when I read Rich Dad, Poor Dad, the idea of passive income lit my brain on fire. I had never thought of making money for nothing.  I assumed that money was achieved only due to the hard-pressed exchange of time for money.  Kiyosaki, the author of RDPD, assured us that passive income was the key to wealth.

Where is the passive income?

I plunged into research. I identified rental income, investment income and even creating original content as “passive income.”  I had visions of checks flowing in, one after the other, landing in a pile on my desk.  But after time, I realized that the pursuit of passive income was nearly impossible through these routes.  How can you really make passive income?  Inquiring minds want to know.  These are the top 8 “real” ways to make passive income, but even they have a catch – all but the last one.
1.  Pick up spare change off the ground. You do have to bend over, but you probably do that at work every day, so you’ll at least be getting something out of this transaction.

2.  Marry someone rich. You’ll have to do some work, true, but if you aim high enough we’re talking about a huge return on investment here.

3.  Hook up with someone rich and desperate enough to pay to keep you around – the classic “sugar daddy/momma” scenario.   Granted, you may have to do some (unpleasant) work here… but I’ve seen this work out where surprisingly little effort is expected in return.

4.  Have someone else do the work for you; a nice trick if you can manage it.  Ask your buddy the web designer to create a website for you – for free.  Why would he do it?  The exposure?  The joy of being taken advantage of?  Don’t worry – you’re getting passive income!  This makes up about 90% of the “advertising” inquiries most bloggers get:  ”hey, we’ve got a new service that’s just like Mint.com only shinier!  Please write a post/link to us/give us free advertising because it’s great news for your readers!”

5.  Win an office lottery pool. OK, you risked a few dollars, but someone else went to the bodega, bought the ticket and checked the results.  You didn’t put much sweat into your share of the Mega Millions, did you?

6.  Gamble. There is, of course, a potential downside here.  But if sitting around sipping free martinis while playing a game and winning (that being the key component) isn’t as close to passive income as possible, I don’t know what is.

7.  Invest in dividend-paying stocks. This point is a cheat.  You have to earn the money that you use to buy the stock.  On the other hand, everything that happens after you buy it is gravy.  That income becomes close to truly passive – so the trick is to use windfalls (an economic stimulus check, for example) to invest in dividend-paying stocks.

8.  Be born rich. Yes, you have to be nice enough to great-aunt Milfred to avoid getting cut out of your trust fund, but let’s face it:  this is as close to passive income as you’ll see in this life.  It’s worked like gangbusters for many of our politicians.

Don’t think you’ll get rich without working for it.  Everything you can generate wealth from takes effort.  Writing a book is hard work.  It may create a wealthstream for years to come, but that’s what you should be aiming for:  wealthstreams, not passive income.  Don’t imagine that there’s a magical key to wealth that doesn’t involve either hard ongoing work or a good bit of upfront work.

Photo License Some rights reserved by Public Domain Photos

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)

“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

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 License Some rights reserved by Francisco Diez

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.