Monthly Archives

This past Sunday I watched Tiger Woods win the Tour Championship, his first winning golf tournament in five years.  Since I’m a Tiger fan, I was thrilled, but since I also like to be efficient I was playing Free Cell on my iPhone, and thinking about what topic I should write about for my blog at the same time.

Most of us have a preferred way to communicate – in person, in writing (text or emails), or by talking on the phone.  I’m an “in writing” guy.  “In person” is also a good choice for me.  But, for whatever reason, I don’t like talking on the phone, especially on weekends.  In fact, I seldom answer my cell phone unless I know who the caller is and, though I’m not a millennial, I don’t even have a land line at home.

I was enjoying the golf tournament when my phone rang.  The call was from my daughter who lives in Colorado.  I briefly considered not answering, but I almost always take calls from my family.

She was just calling to say “hello.” We had a delightful chat.  As a rule people who call me have an agenda – they want something, or want to share some news, so I was pleasantly surprised by the “just hello” aspect of our conversation.

After we hung up I thought, “That was unusual.  I rarely call anyone other than for work.  I was both surprised and pleased that my daughter called me, and that she has made it a practice to reach out to me regularly, especially over the past few years.  It feels great.

On our call my daughter mentioned that she has also been regularly speaking with my dad, and he has been asking her questions about her life.  She enjoys their long-distance phone visits.

So even though my blog is in writing, I’m putting in a pitch here for phone calls to friends or family “just because.”

Was Tiger’s victory the high point of my weekend?  Almost.

But the real high point of my weekend was a short, friendly phone conversation with my daughter.

Alan

Even if you don’t appreciate math you probably think there is something wrong with my arithmetic.  Four minus one is three, not zero.  Everyone knows that.  But give me two minutes and I will demonstrate I’m right.

Specifically, I will show you how your entire profit from four excellent financial investments can be wiped out by a single loss.

Suppose you have a one hundred dollar bill free and clear from the shackles of rent, food, transportation, or insurance (you do like fantasy, don’t you?).  You’ve thought long and hard and have decided it’s better to have your money work for you than for you to work for your money.  So you resolve to invest.

You want to invest carefully because you don’t want to lose your money, so you decide to convert your one hundred dollar bill into five twenty dollar bills (check out my math on this). Then you invest twenty dollars in five separate investments.

You can invest in whatever you like.  Your daughter or son’s lawn mowing business would be fine.  Your friend’s expedition to Las Vegas, maybe not so fine.  If you decide to invest in the stock market I suggest you check with me first because my timing there has been terrible for years.  (Hint:  I’m not invested in the stock market right now.)

What annual rate of return should you expect?  In general, I would say that ten percent is not unreasonable. That is two dollars profit every year on a twenty dollar investment,

But let’s assume you are an extraordinary investor, or just plain lucky, and on four of your twenty dollar investments you actually earn a fifteen percent return.  That’s twelve dollars in profit on eighty dollars invested.  Fifteen percent! Good for you!  You might be tempted to reinvest your twelve dollars, along with the original eighty, for even more profit next year, but the concept of compound interest is a topic for a future blog.

To summarize so far – you now have four profitable investments, and twelve dollars more than you started with.

But, alas, your judgment, or luck, or pizazz, ran out on your fifth investment and – handkerchief please – you lost twelve dollars. From the original twenty you only have eight dollars left.  That’s depressing.  And it happens all the time.  Even to me.  Even when I invest with a reputable money manager.  Stuff happens.

But when you subtract your twelve dollar loss from your twelve dollar profit, what are you left with?  Nothing.  That’s the zero.  So four (profits) minus one (loss) equals zero.

Do I suggest that instead of investing you spend your hundred dollars on wine, weekends, and whack-a-mole?  That’s entirely up to you.

But I do suggest that if you do invest you consider being careful, because one large loss can wipe out all, or more than all, of your profit.

The same idea applies equally to other areas of your life.  I have been known to occasionally drive a little faster than the speed limit.  My profit was the time I saved in transit.  But three time over the years my entire time-profit was erased when another driver unexpectedly turned left in front of me.  The time I spent in the emergency room and in arranging for body work for my car was much greater than the few minutes I saved on all of my other driving trips put together.

Four minus one equals zero.  So be careful with your investments and, especially, when you drive.

Alan

I ended last week’s blog “The Fear is Inside Me” with the following words:

Though I have overcome some of my fears, such as public speaking, there are others I can live with.  I don’t do roller coasters or zip lines.  I only do trams if there is enough social pressure.  I also have a fear of disappointing people.

After reading my blog, a business associate suggested that I elaborate on my fear of disappointing people.  This struck me as a good idea.

Disappointing people is a fear that many of us share, and it’s a tricky fear to navigate.  The idea that you can’t “…please all of the people all of the time” was written by poet John Lydgate, and amplified by Abraham Lincoln for good reason.

To overcome this fear, I suggest you start by defining what it’s really about.  I could write a short book on the subject, but here I’ll confine myself to no more than 600 words.

If you have no fear of disappointing anyone ever, then it would be a waste of your time to continue reading.  I’m sorry to disappoint you.  Well, not really

But if you share my fear of disappointing people then we have set ourselves a nearly impossible task.  Because as others have said before me – you can’t please all the people all the time. Also, others can use your fear of disappointing them to manipulate you. When that happens to me, I have found my best solution is to immediately and permanently cut those people out of my life.  Do you have a “friend” who never calls you unless they want something?  That is a clue that your relationship is give and take. You give, they take.

If you have a parent, or child, who “guilts” you into providing whatever they want, the above solution could seem drastic and might not appeal to you.  In that case I suggest that you write a list of what you are comfortable with, and share that list with them.  Then enforce the list without exception. Remember – they are better at manipulating you than you are at resisting them.  So stand your ground.  It will get easier over time.  The list may be as long or as short as you like. It could even be one word, such as:  “Money.”

In writing this blog I thought more deeply about what I was really afraid of, and I realize that it isn’t so much that I fear disappointing people.  I’m afraid of being rejected by the people who are important to me.

For example, each of my three People Tools books received at least one or two low ratings of “1” on Amazon.  Some readers don’t resonate with what I write.  No problem.  Reject away.  It comes with the territory and doesn’t bother me.

But being rejected by people who are important in my life is different. I have discovered that the best way to avoid rejection is to talk to them.  You might try your own variation of this statement. “I always want to please you, but I’m uncomfortable with what you’re asking for.  So how can we work out a compromise that satisfies each of us?”

If a real friend doesn’t bite at this offer, you might be in a relationship that will continue to bite you.

But also, when someone pleases you, let them know.  You wouldn’t want them to worry about real or imaginary rejection, as you do.

Alan