Category Archives: wealth

The Long Road Home

When we start really thinking about life, it starts simple. Life is what it is. We act straightforwardly, without questioning ourselves constantly. Then we start to wonder what “it all means,” get all confused, and start believing that something is amiss. The dozens of points-of-view we read and hear about broaden our thinking to be sure, but they also instill in us a persistent doubt. What if we have been wrong? About most everything? A nervous sense of being out-of-sync pervades our lives.

What after that? I do not claim to have come full circle, but I have gotten that “around-the-corner” feeling, as if glass were about to shatter. When it does, what will the world look like?

In think that in the end, we return to that simplicity we started with, but without the limitations of a particular “perspective.” All the opinions and points-of-view we thought were so compelling seem like shadows. All the things that tug us off-center seem like benign amusements, their ability to strike fear or want in us gone.

If there is such a thing as enlightenment, I suspect it is a blinding flash of the obvious–everything we needed to know was right in front of us all along. We just could not see it through the veil of self-doubt we had wrapped around ourselves. When we thought something new, we shoved it aside, thinking someone else must have thought of it before. When we thought something different, we subtly talked ourselves out of it, fearing that others would not approve. When we thought something beautiful, or good, or just, we muted our joy, thinking it childish to feel that way.

When I work with people on starting a business, I find that the most fascinating part of it has little to do with business principles. Any reasonably intelligent person can start one. In fact, I find that intelligence has almost nothing to do with it. The sharpest people I have worked with are often the most blinded to their own abilities. They find dozens of convoluted reasons to busy themselves with trivialities, always convincing themselves that they are making progress. In truth, their trying is a clever way to keep from doing.

This used to frustrate and annoy me to no end. But then I realized that no one can pull aside the veil for another. I can help someone realize their dreams in many ways, but I cannot get them to trust that they have all the answers they really need right in front of them. I can give them information, but not insight.

You may not want to start a business. But I’ll bet there is something you want to do. What is it? Start a band? Write a book? Learn to paint? Immerse yourself in it. Dive in the middle of it and soak up all the different perspectives you can. Get confused. Muddy the waters. Just don’t stop there. Keep pushing forward and in the end come to realize that you had all you needed all along.


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The Coming Storm

What do you do when a storm is coming? If you are tired of hiding in the nearest ditch as the winds howl overhead, you might think about building a shelter while the sun is shining.

The sun is shining right now, believe it or not. For all the turmoil in financial, housing, auto, and insurance markets, business is pretty much moving along as always. By turning on the cash spigot, the Federal Reserve has pushed back the clouds–for a time.

The storm that is brewing has not been tamed, however. This morning, we hear that the deficit reached a record $1.6 trillion for the year ending Sept. 30. Over the next ten years, our national debt will increase by $9 trillion. All this assumes that the health care program now under consideration will not add to the deficit. Mmmmmmm…yeah.

When will all this come crashing down? And when it does, where does that leave you and me? No one can tell for sure whether our economic world will end in fire or ice. Death by fire, hyperinflation, seems the most likely to me. However, to to paraphrase Robert Frost, death by deflation will suffice.

Our economic world revolves around billions, perhaps trillions, of transactions that occur every minute around the globe. We have bread at the bakery only because our local baker can predict the near future. It makes no sense to buy dough to make bread if the price of bread can rise or fall radically in a matter of days. It is impossible to hire employees not knowing whether their wages will even buy a pair of socks next week.

The shelter we all need is between our ears. Those who learn to be entrepreneurs while there is time will survive, even prosper, as the economy melts or freezes. The rest will likely succumb to the elements. Whether we see an inflationary or a deflationary storm, a few basic things can determine which camp you fall into.

First, get interested in your finances. Many of us were raised soon enough after the 60’s to inherit a disdain for material things. We view with suspicion those who focus on wealth, thinking them shallow and self-centered. Horsefeathers. Money is one human value among many, but one without which the others soon dry and wither.

Second, pay off any unproductive debt. Unproductive debt is the kind that costs you money but does not make you any. For example, that car you bought during the Cash for Clunkers program is unproductive debt. And don’t try to tell me it will save you money over your old car. Run the numbers and see. Credit cards fall into this category as well, unless they were used to finance a business or other investment that makes more than you are paying in interest. By the way, read your statements closely. Banks are doubling and tripling interest rates, even on people with perfect credit. Productive debt can become unproductive debt overnight.

Third, expand your investment horizons. The lazy person’s retirement strategy–chuck money into a retirement account and forget about it–does not work any more. Learn which investments hold up better during hard economic times. Find out why holding only stocks, bonds, and mutual funds is extremely risky.

Fourth, make more money and keep more of what you make. I don’t look for the government to back off on spending. Instead, I expect them to raise taxes to unprecedented levels as they try in vain to save the economy. What are the easiest taxes to get? That’s right. Your salary and mine. Having an extra source of income from a business allows you to shield a larger portion of income from taxation.

When darkness covers the land, it is going to require every bit of wisdom and fortitude we can muster. No matter what happens, though, we human beings need each other. Smart people who learn now will be able to look around the rubble and see limitless opportunities. Others will wallow in self-pity wondering what happened. Which one do you want to be?

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The New Retirement Strategy

I for one am not enthused about the idea of retiring. I have seen what happens to these folks. Going from being productive and needed to sedentary and ignored is not good for the soul or the body.

Of course, I love what I do. Not everyone does. If I were still driving for UPS, I would probably crave the peace and quiet of retirement to the mayhem of high-pressure package delivery. In that dismal scenario, I would be facing at least two or three decades of life without a job. What would I do?

What would YOU do?

Let’s assume you are confident that you have a good retirement plan, and then please allow me to screw that all up for you. You have worked a long time to build up enough wealth to live reasonably well without working. Love your job or hate it, you look forward to not having to show up.

As you start to pull money out of your retirement fund, a funny thing happens. Everyone else does too. In fact, at age seventy-and-one-half, all of us are required to start withdrawing. The government wants all those taxes you wisely avoided in earlier years. Somewhere around the year 2017, the numbers get screwy. We baby boomers (I am in my Year of the Bicycle–same as the number of playing cards in a deck) will be retiring in droves.

What does this portend? Nothing good, as far as I can tell. Our current woes will look like a fender-bender compared to the spin, crash, and burn of the not-so-distant future. Hang on, though. There is a solution.

First, let’s figure out what the real problem is. We work now to have money now and also to have money later. Having money later assumes that there is a place we can put it. Were we to put cash in a safe for thirty years, we would withdraw it to find it has much less purchasing power than when we put it in. In fact, at only 2% inflation, it would lose half of its purchasing power during that time.

If we were to put it in stocks, bonds, and mutual funds, the usual instruments of employment-based plans, we might beat inflation by a little. Then again, maybe not. Last year saw millions of people clobbered by the drop in the stock market. If millions of people start selling stocks in a few years, the price of stocks will go down–a lot.

So, back to what you are going to do when you retire. How about running your own business? Having a business will do two things. First, it will keep you out of the bars and pool halls. Second, it may just be the answer to your financial security.

Be smart, though. If you wait until you retire to start thinking about your business, it will take way too long to realize a significant income. Start now. My online course on New Business Fundamentals ( takes you through all the steps you need to take to start a part-time or full-time business.

Remember, we all need something meaningful to do no matter how old we are. Having a business you love to do will not only bolster your standard of living in your retirement years–it may just make them golden instead of rusty.

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Our Greatest Moments

I was twelve years old when Neil Armstrong said simply, “the Eagle has landed.”  Barely able to breathe, I had watched as fuel ran low and dust boiled up near the lunar surface.  I was as relieved as if it had been my father out there in space attempting the impossible.

Things did not always turn out well in these adventures.  I had listened  in horror two years earlier to the news that Grissom, White, and Chafee had died on the launchpad during training.  I knew even then that audacity, confidence, and ability were required to pull off such a magnificent achievement as landing on the moon.  What I did not know was that every time we slip the surly bonds of earth, a demon is loosed from hell to exact its price in terror.

My fascination with flight had started with the poem “High Flight.”  A short film of an F-104 Starfighter was played regularly on TV in those days as the poem was recited.  There were no words at the time to describe how watching that silver craft dance in the sky made me feel.  I just knew deep, deep down that something supremely significant, almost holy, was happening when a man could put on a helmet, get in a jet, and experience heights that his ancestors could not even dream of.

Now, in real time, I watched as Armstrong came down the ladder and stepped on the lunar surface.  I felt a little guilty for this, but for all the joy and admiration I felt, I also could not help but wonder what would happen if that lunar module failed to fire.  Surely the image of death by suffocation on that lonely sphere had entered these astronauts’ minds.  Why take that chance?  Why not be content with life on Earth?  Yet I knew that if there were a reason for our existence, this was it.

As I earned my private pilot license many years later, I experienced a pale reflection of what that terror must have been like.  More than once, I nearly soiled myself as I hit a weird air pocket on final approach or had some mechanical problem in flight.  There was no reason for me to fly.  It would never save me money in travel, nor would I ever be a commercial pilot.  I just wanted to experience, if even in a distant way, the feeling that Starfighter pilot had as he vaulted toward the heavens.

The demon of terror visits only those who invite him.  He does not bother with that mass of people who betray their human heritage by always playing it safe.  He knows that only the worthy rate his efforts.  For you see, he is the only one who can grant the gift of achievement.   A life worth living cannot be lived from the safety of a recliner.  No terror, no victory.

We do not have to be one of the dozen who have beheld another world firsthand to ask the demon his blessing.  We can do it as we confront our fears about life, love, wealth, and the scores of other things we live through each day.  Choosing to be a better spouse is scary.  Earning more money is scary.  Following our dreams is scary.  If we are not scared at least a little, we aren’t really living, and the demon waits for the next truly human soul to venture out and do something spectacular.

His gift?  Ask the ghosts of Grissom, White, and Chafee.  Ask the entrepreneur who has gone broke several times before succeeding.  Ask the author who has languished in anonymity for years before writing a best-seller.  They will tell you that the monstrous apparition that appeared as a demon left as an angel.  They also know each of us must confront him alone.  Will you?

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Health Care and Your Right to Life

Never underestimate the foolishness of anyone in a hurry. Get 535 people in a hurry at the same time, and it’s Katie Bar the Door. That is what is happening to our health care in this country.

We all want to know we can go to the doctor when we need to. We also want to be able to extend our lives by undergoing a surgical procedure or taking medicine. The problem is, we still want it to cost what it did when a doctor could carry all his/her tools in a black leather bag.

The miraculous advance of medicine allows us to improve and extend our lives in ways we could not have imagined a few years ago. Instead of medicine being something that is practiced between an individual and one doctor, it is now practiced between an individual and the thousands of people whose skills are brought to bear on complex diseases. Think about an MRI machine and the almost unimaginable amount of knowledge that had to be brought together in one place for it to work.

In other words, we should expect that health care will cost more than it once did, just as a car with air conditioning and leather seats costs more than the vinyl benched oven-on-wheels we used to drive. Unfortunately, instead of letting bright and industrious people work on solutions to the problem of high health care costs, we have a government hard at work to destroy it.

Government will meddle and tinker, tinker and meddle, until they give us the equivalent of Social Security and Medicare. Hopelessly over-promised, national health care will, sooner rather than later, go broke.

What then?

They will ration care. Of course, no one will call it rationing. Instead, they will find yet another way to put lipstick on a pig and parade it around like a supermodel. Yet even in the midst of this, there is hope. As the public system crumbles, the irrepressible creative instincts of young men and women will be brought to bear on the practice of medicine. Bright people who want to use their talents to help others will find ways to offer care to the sick when they need it, not months down Waiting List Road.

This is already happening in Canada. Technically, most private care in Canada is illegal. This means that citizens cannot go outside the system by using private doctors. Fortunately, this law is rarely enforced. As a result, a host of private practices have sprung up, giving those who can pay the option of bypassing the waiting lists and suboptimal medical choices represented by the public system.

If we in the U.S. move toward a universal health care system, do not expect our government to learn anything from Canada’s recent lessons. Expect instead that they will attempt to outlaw private practice. They will do so because as the public system breaks down, more doctors will move out of it in favor of serving the needs of the sick privately.

This is where the health care battle line should be drawn. The right to preserve and enhance our life and our health is as fundamental as the right to self-defense or free speech. Being forced to die or live as a cripple because one’s care is not “cost-effective” enough for public funding, and then being denied the right to seek a private physician’s services is an assault on any sane person’s notion of freedom.

Allowed to flourish, the creative power of the human mind will bring forth new cures, new medical services, and longer, more enjoyable lives for all. New insurance structures, medical care cooperatives, and charities will emerge, providing care for those who truly cannot afford care. Instead of fighting and scratching for a limited resource, we can all contribute to creating more.

It is beginning to look like some form of government-run health care is inevitable. It won’t be pretty, but it will be survivable unless they outlaw private care. If they do, consider it the equivalent of censorship or illegal search and seizure. It’s your right, don’t let them take it.

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Property: The Forgotten Freedom

I think of freedom in straightforward terms. Any individual should be free to do as he/she likes as long as it does not demonstrably impinge on the same rights in others. This idea is not new, of course, but it is largely misunderstood, especially with regard to property.

Were we all composed of pure spirit, with no need to feed, clothe, or shelter ourselves, property rights would be meaningless. Since we are mere flesh and blood, each individual needs to have control of certain things to survive. The reason is simple–most things we need are created, not found.

With the possible exception of air and sunshine, every material thing we need comes about because some individual, often in cooperation with others, has the ability, will, and desire to turn a beneficial idea into reality. Fortunately, the human race has also discovered that trading with others results in more material goods for oneself.

Who owns such wonderful things? In my view, the creator. From spear tip to computer chip, the rightful owner is the person who created it. If he/she contracted with others to create it, that contract defines who owns what fraction of its value.

Some people in society are more capable than others at producing certain things. No one wants to hear me sing opera or see me dance for Chippendale’s. Yet I do not begrudge the vocalists or 20-somethings with six-pack abs their due. Neither should they begrudge me my ability to write a book or teach a class.

Inevitably, some people on the whole are able to create more value than others. They own more things as a result of their benefiting others more. They are better off than others because they are better to others. It is their ability that enables others to benefit from the things they cannot create themselves. The more benefit they provide, the more they prosper.

This is disturbing to those who are less willing or less capable. In the name of “fairness,” they seek to take from the creators and give to those they deem more deserving. The most obvious example is the thief, motivated at a primal level to take by force what he/she either cannot or will not create.

Some people make a profession of taking from the creators and giving to others. They are called politicians. In addition to getting to pat themselves on the back for doing so much good for society, they get a generous cut themselves. Lacking the forthrightness of a thief, they mask their willingness to take from others by force in byzantine tax codes and arcane regulations.

What would our society look like if we were to refuse to allow either thieves or their governmental counterparts to take what each of us has created? Those disposed to believe in the fairy tale of a benevolent and fair government imagine hordes of the poor wandering the countryside, victims of arrogance and callousness of the elite. I see something quite different–the blossoming of a new human spirit.

When people are able to trade freely, they are able to tap their potential for creating value for others. Virtually all human beings have some capacity for doing so. In return, the less capable benefit from the more capable in two ways. First, goods and services are cheaper because capable people compete to provide them without fear of having a large portion confiscated by government. Second, the truly incapable, such as the severely handicapped, benefit from the benevolence of the wealthy. Humanity, for all its tendencies toward wanton cruelty and unjustified violence, has also shown a tremendous capacity for kindness and charity.

This Independence Day, we will all remember the precious rights our ancestors earned for us. Along with your ferocity in protecting your freedom of speech and religion, kindle a fierceness in protecting your property. You earned it, now fight to keep it.

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Why Your Goals Don’t Work

Yesterday, I assigned my students a voluntary overnight project. We had discussed goal setting in class and I wanted to impress upon them the importance of writing down and prioritizing their goals. As I generally find in my classes, only a small number did the whole exercise.

I already know why many of my students failed to follow through on this well-established method for getting what we want out of life. It is the same reason many of us fail to follow through. We say we want to achieve great things, but in the end, we would really rather stay in our comfortable cocoon of low-level misery.

We know from well over a thousand studies that goals work–that is, they lead to high performance. If you want to lose weight, make more money, or achieve anything else quantifiable, goals are the way to do it. Yet we all know how easy it is to get distracted while working on a goal. Why is that?

In my view, there are two major reasons we find it difficult to achieve things. The first stems from what I call a “mind-split.” On the one hand we want to accomplish what we set out to do. On the other, we are afraid that we just might succeed. If we succeed, we show ourselves and the world that we really are capable. It renders null and void all the excuses we used before, and by implication, the excuses we may want to use in the future.

The second hindrance to goal achievement is having the wrong goals. High performance does not necessarily lead to happiness and personal fulfillment. I see this in “achievement junkies,” people who crave the next chunk of conspicuous wealth or yet another trophy in a sport they have grown to despise.

Learning the mechanics of goal setting takes twenty minutes. Learning to set the right goals may take twenty years. As you set out on the great journey that is entrepreneurship, remember that getting what you really want is scary and that getting what you think you want may make you miserable.

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Killing the Goose

We all remember the story of the Goose and the Golden Egg. Anxious to become wealthy without working for it, the farmer eventually kills the goose because one golden egg a day just isn’t enough.

California voters just sent a message to their politicians that they will not become the second goose to die at the hands of the shiftless and lazy. By an astonishing margin, the general populace told Sacramento that increased taxes and smoke-and-mirrors borrowing will not fly. Let us pause to celebrate a victory.

Most Americans still believe that we each own what we create. To politicians, this is a novel idea. They prefer instead to think of wealth creators as being at their disposal. Not content with only maintaining essential services like police protection, they find in taxpayers a never-ending source of wealth to confiscate and distribute according to their notions of “fairness.” Of course, “fairness” is usually linked to re-election.

Fellow citizens, we are the geese and the farmer is trying to kill us. Like California, let’s send the message loud and clear that enough is enough.

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Whose Money Is It Anyway?

Most of us work until sometime in May to pay our taxes. The rest of what we earn is ours. Hey, wait a minute. Isn’t that first five months ours too?

Not according to the government. In fact, they take it before we ever get our hands on it. Those of us with jobs have taxes withheld. Take a look at your next pay stub and remind yourself how much money you DON’T get each pay period.

Here’s the kicker. Far and away, it is the middle class that gets whacked for taxes. Why? Because it is easier to collect from us. The poor don’t have any money to confiscate; the rich have enough money to hire people who can protect what they earn.

Is that fair? I leave that to you. But, if you decide that paying less in taxes is a good thing, read on.

Owning a side business has numerous advantages. You control it, and if you manage it properly, you can build up a solid retirement to supplement or replace your “traditional” retirement. Better yet, you can protect more of your “regular” income from taxation.

Tax laws allow numerous deductions for business. Many expenses can be used to reduce your taxable income. So, in addition to having more income, you get to keep more of your money. Be sure to use a good tax advisor, because the laws must be followed closely.

The Boston Tea Party was prompted by a 3% tax. Many of us pay over ten times that amount now. I doubt that pouring tea into the harbor will do much good these days, so throw your own little tea party. Start a side business and keep more of what was yours to begin with.

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"I’m not dead yet." scene from Monty Python’s Holy Grail

“In the long run, we are all dead.” John Maynard Keynes

This ranks as one of the most irresponsible remarks in the history of humanity. Keynes may have filled his own prophecy. He is dead. We are not–at least not yet. But we are living in Keynes’ long run and we are about to find out how wrong he was.

Keynesian economics called into question the premises of the classical theory that preceded it. Keynes thought that laissez-faire capitalism, the freedom of individuals to trade with little or no interference from the government, would lead to sub-optimal outcomes for the economy as a whole. He advocated a more aggressive role for government to counterbalance business cycles and to promote economic well-being through “stimulus” spending.

Little wonder that politicians embrace his message. Keynes’ invitation to spend, spend, spend is like telling an alcoholic to drink, drink, drink. The only difference is that taxpayers get the hangover. A huge economy like ours is a hard thing to break. Because we have, at least up until now, retained enough economic freedom to entice bright people to create and sell things we all want and need, we have survived. Until last year, we even gave off the impression of having prospered. That is, until millions of retirees watched their portfolios implode. Welcome to the long run.

Many of us with limited-government sensibilities thought the last nail had been driven into Keynes’ coffin two decades ago. As it turns out, he may drive the last nail into ours. Obama and his Democratic allies in Congress have conjured up his spirit, invoking heroic images of FDR, the imagined savior of the Great Depression. And lest you think this is a Republican-friendly blog, they are no better. If anything, they are more devious, pretending to prefer less government while spending like inebriated seamen. In a way, Democrats are the streetwalkers of American life. They don’t pretend to be anything but what they are or they are too stupid to hide it. Republicans are call girls, cleverly pretending to be respectable, but eager to go spread-eagle for a slightly higher fee.

No amount of ranting about politicians, cathartic as it may be, will help any of us. The system has been rigged over a period of decades and is now beyond repair without radical changes. Don’t hold your breath waiting for politicians to learn anything. What will help us as individuals is a realistic preview of what is about to happen and how to protect ourselves. This time, folks, it is different. We are beyond arguments about what government should do. We are about to find out what they cannot do.

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