Posts Tagged ‘money’

Transform with Gratitude

October 27th, 2009

By Logan Flatt, CFA

As Americans start the holiday season of an economically challenging 2009, we have much for which we can be thankful. After all, we live in America and we are a prosperous and generous people. For example, working hard in America today is Bill Phillips, the self-made multimillionaire and author of the bestselling book, Body for Life. Bill is thankful for his good fortune and has decided to make it his mission in life to help Americans of all colors and sizes make healthy changes in their lives so that they in turn can make a difference in the lives of other Americans. While his message may be schmaltzy at times, it is fundamentally sound: he advocates that each of us must “Be The Change” we want to see in our lives and that the best way to do that is by changing how we as Americans eat, exercise, and think. In short, Bill suggests that a healthy mind and spirit can only thrive in a healthy body for it is the body that hosts and feeds that mind and spirit.

To encourage Americans to be healthier, Bill puts up hundreds of thousands of dollars of his own money each year to challenge any and all comers to his Be the Change Challenge (It’s free. See www.transformation.com for more information). If you work hard over 18 weeks to transform your health and fitness, you could be crowned a Transformation Champion and win some of Bill’s money for yourself and for your favorite charity.

One such Champion is Denise Taylor, a married mother of five children from Sellersburg, Indiana. What made Denise’s championship unique was the venue in which she got fit: a hospital. Denise lived at the hospital while taking care of her 15-year old daughter Jonnae, who spent months there undergoing treatment for leukemia. While Jonnae slept, Denise would run up and down the hospital’s staircases for aerobic exercise. For resistance training, Denise would do push-ups and sit-ups on the floor of the hospital room while Jonnae watched and counted aloud the reps.

Denise and Jonnae were happy to support each other as each attempted to conquer her own personal adversity – Jonnae to defeat leukemia and Denise to transform her body, mind, and spirit through the Challenge. Denise likes to point out that she and Jonnae rallied together against adversity through gratitude. Both enjoyed using the gracious phrase “I get to” as a replacement for the more burdensome “I have to.” For example, Jonnae didn’t tell her friends, “I have to have a bone marrow transplant.” Instead, she told them, “I get to have a bone marrow transplant.” This simple change showed Jonnae’s gratitude for having a chance, a hope for a cure to her cancer that many other children in the world do not have.

As Americans facing economic adversity, we can all learn a powerful lesson from Jonnae and her mom. Many of us who suffered financial losses over the past year now have to work harder, save our earnings, and rebuild our investment portfolios. Many of us have to go out and try to find a new job in an economy with a 10% unemployment rate. Many of us have to move out of our cherished home and into a smaller house or an apartment to make ends meet. But, do we HAVE TO do these things? Or, do we GET TO do these things? Bad economy or not, we are still Americans living in America: we represent only 4.5% of the world population, yet we control over 20% of world economic output. Our disproportionately large control of economic power endows the average American family with many trappings of life that go far beyond those of the average non-U.S. family.

Take a look at India: it’s a country with 17.2% of the world population and its average income per person is only $2.78 a day. Could you live on only $2.78 a day, every day of the year? Probably not. You likely spend more than that on a Starbucks latte just to get your day started (the average U.S. income per person is $130 a day – before taxes). China is similar to India: it has 19.6% of the world population and its average income per person is only $8.93 a day. You likely spend at least that much on lunch. Do you think average people in India, China, and other places like Africa, Southeast Asia, South America, and Eastern Europe even have investment portfolios that they have to rebuild? Do they have good paying jobs they have to go out and find again? Do they have a comfortable family home that they have to sell? No, they don’t have to do any of these things because, for them, it is simply not economically feasible to do in the first place.

Here in America, life is different. Americans don’t have to do these things during tough economic times. Americans get to do these things – things that average people in the rest of the world would love to get the chance to do. In America, we are all privileged. We don’t have to do anything. We get to do everything – even those things we do not really want to do. It’s a valuable lesson that Denise and Jonnae knew well as they both battled to become champions. While her treatments, her mom’s love, and her own sense of gratitude kept leukemia at bay for many months, Jonnae succumbed to the disease on June 9, 2008. Her mom Denise is grateful it was a battle the two of them got to fight together.

Addendum:
Watch a video of Denise and Jonnae’s story of transformation at www.Transformation.com.

Watch a video of Denise talk about Jonnae and “I Get To” in July 2008 at www.YouTube.com.

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NOTE: This article first appeared in the Thanksgiving-themed Winter 2009 issue of The Swan, a publication of the Lake Forest Community Association, Inc., a nonprofit Texas corporation.

Copyright 2009 LoganFlatt.com. All rights reserved.

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Volunteering to be Selfish

August 3rd, 2009

By Logan Flatt, CFA

As the producers of the largest mass of personal wealth in history, Americans show more financial generosity than any other group of people in the world. According to Giving USA 2009, an annual publication by Giving USA Foundation, charitable giving in the United States reached an estimated $307 billion in 2008 even with the U.S. economy mired in recession last year. Yet, Americans gave away more than their money. They also gave away their time through volunteering, the voluntary act of offering or bestowing one’s services for the benefit of those in need. According to the Bureau of Labor Statistics of the U.S Department of Labor, 26.4% of Americans (roughly 62 million people) volunteered at least once between September 2007 and September 2008. Of those who volunteered in that time period, the median number of hours spent on volunteer activities was 52 hours.

The Bureau of Labor Statistics did not publish a dollar value of the more than 3 billion total hours that American volunteers gave away in the time period studied. However, volunteering does have a cost: hours given away by a volunteer could have been used instead to produce a product or service of value for which the volunteer could have been compensated. For example, a high-powered attorney who charges her clients $500 per hour for her legal services could have gained $26,000 for her law firm had she not spent 52 hours volunteering her time to those in need. An economist would call the $26,000 forgone the “opportunity cost” of the attorney volunteering her time. It is a real, legitimate cost that an economist would not ignore.

However, few volunteers in America attempt to assign a dollar value to the hours they give away to those in need. To the volunteer, the mere act of giving to those in need trumps the economist’s “opportunity cost”, regardless of its value. Ah, but therein lies what the economist might reason as selfishness on the part of the volunteer: Is the volunteer truly giving away his time without gain or pleasure, or is the volunteer gaining what an economist would consider “utility”, a measure of personal satisfaction? After all, would a volunteer actually give away his time if he did not expect to receive some sense of satisfaction in exchange? It’s rare to find a volunteer who continues to give away his time in exchange for only misery, resentment, or regret.

Following the economist’s cue, a volunteer is right to behave selfishly in seeking to maximize her “utility” or satisfaction from giving away her time to those in need. Having trouble viewing the act of volunteering as a selfish act? Well, here’s an easy, five-step process to help you maximize your personal satisfaction from volunteering your time to those in need:

  1. Find your passion – Proactively identify the one or two causes that you feel would give you the most personal satisfaction in your life and then go out and give away your time to the cause as you see fit.
  2. Assess the real need – Do those in need have a real need, or is it a pseudo need – perhaps a need over-dramatized for the sake of fundraising or for the PR benefit of a celebrity trumpeting her cause du jour? Look at the needs critically and then decide for yourself. You’ll be more satisfied working on the real needs.
  3. Volunteer on your terms – Don’t volunteer just because of social pressures to do so. Giving should emerge from your passion, not from your desire to conform. Remember, maximizing your “utility” out of your precious time you choose to give away is the goal. Pleasing others in your social circle is not.
  4. Give anonymously – there is tremendous personal satisfaction to be gained by giving away both your time and money without taking any credit for it. It can be truly liberating. Try it.
  5. Keep it close – volunteering is about making personal connections with those truly in need, not about impressing or socially outmaneuvering friends or colleagues at cocktail parties. Oftentimes, wearing your passion on your sleeve is less satisfying than simply keeping it close to your heart.

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NOTE: This article first appeared in the volunteering-themed Summer 2009 issue of The Swan, a publication of the Lake Forest Community Association, Inc., a nonprofit Texas corporation.

Copyright 2009 LoganFlatt.com. All rights reserved.

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Money, You’re No Love

February 13th, 2009

By Logan Flatt, CFA

For most people, love and money are two very important things on this Earth. The two often intersect. A person can love money. A person can use money to try and buy another person’s love. A person can use the signals of love to try and gain access to another person’s money. Honorable intentions or not, many people place love and money closely together. Yet, love and money are not the same things. They are, in fact, quite different.

Simply put, money is just a tool, one of many tools available to each of us for getting what it is we want out of life, be it love or anything else. In a truly free market economy, an individual can freely trade his or her time, ideas, skills, or labor with others in exchange for money. In turn, the individual can use the money gained to aid his or her efforts in life, liberty and the pursuit of happiness. In a country such as the United States of America, life and liberty are abundant; so, many Americans tend to focus the tool of money on the pursuit of happiness. While any pessimist may warn that “money cannot buy happiness,” the typical American certainly has the freedom and optimism to give it a try.

Unfortunately, the bad economy of 2008/2009 has cramped many of our efforts to use money to buy happiness. Flows of money have slowed down or have shut down completely. However, it is important to keep money in proper perspective. Yes, money is important to our lives here on Earth. Without money, we are destitute. We are broke. We are bankrupt. Yet, in the grand scheme of life, so what? So what if we have no money? We are still alive! We still have family, friends, and neighbors who love us and care for us! And, their love and care for us remains constant whether we have money or not. That’s the great thing about love – it tends to remain a constant in our lives whereas money does not. Money comes and goes. It ebbs and flows. Meanwhile, time and life march onward relentlessly without pause.

Yet, each and every one of us will reach a critical point where money, time, and life on this Earth cease at once. As each of us reaches that critical point, money, time, and life converge on irrelevance – but money gets there first. When your time and life are up, you cannot take your money with you. Even if you could take your money with you, you wouldn’t be able to use it – who there would be willing to accept money issued by some earthly government? Love is different. Love is unique. You can take your love with you. You can use your love, and anyone there will be willing to accept it. Love remains the only thing of relevance as each of us approaches the critical point. And, love is the only thing that we can take with us beyond that critical point.

In 2009, we all will take in the bad economic news out there in the media ether, and we will witness closer to home many of our friends, family, and neighbors – even ourselves – lose jobs, personal fortunes, and financial security. Alas, we must remember that it is all just the temporary, inherent flux of money. We still have life, and we still have time to pursue happiness. Most importantly, however, we still have love, the one constant that will always be with us. So, savor it, share it, and save it – forever.

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NOTE: This article first appeared in the Valentine’s Day-themed Winter 2009 issue of The Swan, a publication of the Lake Forest Community Association, Inc., a nonprofit Texas corporation.

Copyright 2009 LoganFlatt.com. All rights reserved.

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The Choice Is Yours

August 10th, 2007

By Logan Flatt, CFA

“Money makes the world go ‘round.” Although it is a cliché, I have not found anything in my years so far on planet Earth that seems to suggest otherwise. Money has a powerful influence around the world. People the world over make critical decisions – good or bad – based on money. They also change personal behavior based on money. Money does not have to be present to make people change decisions or behavior. Often, it is the lack of money that most influences how people think or behave.

On the surface, the process of making money seems mysterious and complex. Don’t be fooled. Making money is simple:

Sales – Costs = Profit

That’s not to say, however, that making money is easy – because it’s not.

In fact, making money is a challenge for most of the 6.6 billion people in this world. Most live in poverty or just above it. However, the 301 million people living and working in the United States of America – who represent less than 5% of the world’s entire population – appear to have mastered the art and science of making money quite well, thank you very much, as evidenced by the U.S.A.’s $13.1 trillion economy – nearly 20% of the world’s entire economic output. No wonder then that the United States of America – with disproportionate economic power given its relatively modest population size – is referred to by many people around the world as “The World’s Superpower.”

What makes money so complicated and so seemingly hard to make? Human beings. You cannot make money in a vacuum. You need to transact with other human beings to make money. That is money’s fundamental purpose – to facilitate the exchange of goods and services among individuals, corporations, and governments. A human being or a group of human beings lies behind each of these economic entities. Now, I am sure that you will agree with me that human beings are highly complex creatures. Moreover, nowhere do human beings get more complex than when they are with – or without – money.

Pessimists, cynics, and miserablists alike claim, “Money is the root of all evil.” As is typical of their negative, self-defeating ilk, they are wrong. Money is not evil at all. Money is not inherently good either. Money possesses no emotion, no feelings, no thoughts, and no beliefs. Human beings possess these things. Human emotion is the root of all evil (e.g., envy and hate) and of all good (e.g., trust and love). Money is indifferent. Money is innocent.

Despite its neutrality, money has a special magnetic quality: money is highly attracted to reason. If you are new to the concept of getting ahead financially, you will soon learn that the best way for you to attract more money to your life is to control your own emotions. After all, emotions like fear, greed, anger, hate, envy, and even optimism can quickly lead you into financial trouble. But, to really stake your claim to lots and lots of money, you must learn to cut through the emotional haze created by other human beings with a razor sharp weapon: rational thinking.

To get ahead financially, you have to concentrate and focus your rational mind on building wealth over the long-term. You must rid yourself of the emotional distractions that keep your mind mired in the short-term and its wealth-depleting temptations. I am not saying that you must ignore everything else in your life to the detriment of your health and those you love. I am not saying focus exclusively on building wealth either. What I am saying is that to truly build wealth for you and your family, you must make a conscious, rational choice today and be committed to your choice going forward.

Your choice is between Option A and Option B:

Option A: “I am willing to do what it takes to get ahead financially over the long term.”

OR

Option B: “I am not willing to do what it takes to get ahead financially over the long term.”

Why are you not getting ahead financially? It is likely you have made the wrong choice between Option A and Option B in the past, or more likely, you have simply neglected to make the choice at all. The point is, you have a choice. And, to get ahead financially, you must make that choice.

So which do you choose, Option A or Option B? Stop, think for a moment, and make your choice right now.

(The waiting music from the game show “Jeopardy!” should now be playing in your head).

OK, you have made your choice, right?

And, you are firmly committed to that choice from now on, right?

Congratulations! You are now further ahead financially than perhaps 90% of the American population. Most Americans have not made the choice. They simply fly their financial lives on autopilot every day. However, you are different. You have made the conscious, rational choice. You have made the commitment to yourself. You have officially turned off the autopilot and are now firmly at the controls as you fly through your financial future.

Now, the Big Question:

Did you choose Option A or did you choose Option B?

If you chose Option A, I know PowerWealth.com can help you because you are committed to doing what it takes to get ahead financially over the long term. Please  return to PowerWealth.com again and again over the coming months to learn more of the insights I will be sharing with you.

If you chose Option B, I don’t believe PowerWealth.com can help you much. My insights into building wealth can only help those individuals who are committed to doing what it takes to get ahead financially over the long term. You, unfortunately, have chosen otherwise. Still, I hope you will continue to return to PowerWealth.com. Who knows? You might just learn something new. And, if you ever feel pangs of regret for the choice you have made today, please know that PowerWealth.com will be right here to guide you through the choice again.

Until next time, be sure to take time out to notice and watch how “money makes the world go ‘round.”

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NOTE: The term “miserablism” is believed to have been first attributed to Neil Tennant in 1990.

Copyright 2007 LoganFlatt.com. All rights reserved.

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