November 15, 2019 - Regrettable Decisions, Overcoming Professional Setbacks & Naptown
- Why do so many smart people make such foolish choices in everyday life? It’s easy to point fingers at famous people ruining their lives – or gawk in befuddlement as regular people become famous for making outrageously silly mistakes – and say to ourselves we’d never do anything like that. But according to an interesting article I came across, there just might be science behind the making of regrettable decisions. As the piece explains in more detail, no matter one’s ethics, social status, or IQ, we are all vulnerable to making unfortunate decisions that can result in dangerous consequences. The subconscious neurobiological sequence that occurs in your brain during situations where fears and desires are stoked (e.g. those involving money, sex, fame/recognition, etc.) cause you to perceive the world in a way that contradicts objective reality, thereby distorting what you see and hear. This phenomenon, referred to by the authors as a “brainshift”, may be helpful to keep in mind as we reach the end of the year. Opportunities for regrettable decisions abound during the end of the year rush – you may feel undue pressure at work to reach a certain metric before 2019 concludes – making it more important than usual, according to the authors, to at the very least ask a trusted friend or even an outsider for their opinion before entering any grey areas or cutting any corners.
- Speaking of the end of year, for many of us performance reviews at work are coming up. Needless to say, these meetings can cause some agita, particularly if a substantial bonus or promotion hangs in the balance. If, at the end of your review, you find yourself moving one step closer to the brass ring, fantastic. But what should you do if you miss out on a promotion, don’t receive a grant, or otherwise barely lose out on a big opportunity that would have helped your career? The answer, according to a piece in Harvard Business Review, is to keep going. Individuals who overcome professional setbacks, particularly when they occur early in one’s career, are more likely to outperform over the longer term. Perseverance, the piece argues, is an important ingredient to career success and suggests that good things do, in fact, come to those who wait and stay the course (at least professionally). And for those who got the advancement, resist the temptation to rest on your proverbial laurels. As the article points out, “some of those you edged out will likely be nipping at your heels and moving to overtake you before long.”
- Finally, a travel recommendation. It’s not a glamorous location, and I know that my New York friends and relatives may smirk a little at the suggestion, but it might be time to book a long weekend in Indianapolis. If you know me well, then you know I am a Hoosier at heart – short on pretense, heavy on carbohydrates, and an apologist for any unseemly person or event from the state that draws national coverage - so please take my suggestion to visit my hometown with a hefty spoonful of salt. But to back up my claim, none other than the New York Times had an article, 36 Hours in Indianapolis, espousing the virtues of “Naptown”. I never thought my hometown would be considered, “hip”, “trendy”, or any other number of fawning adjectives used in the piece to describe how it’s changed since my childhood. But from the Kurt Vonnegut Museum and Library to a bevy of new restaurants, bars, galleries, and boutiques, there is quite a bit to do.
November 1, 2019 - Work Stories, Bliss for a Dual-Career Couple & Joe College
- Your guiding story: Have you ever considered what it is? Whether it is one of ambition, responsibility, missed opportunity, or something entirely different, according to certain psychologists your brain has, over the course of your lifetime, stitched together your experiences and observations to form a story that explains your actions to you. Your guiding story is a very useful – and necessary - shorthand for making sense of a complicated world, but it can get you in trouble, particularly when you seek to make a change in your professional life that will enable you to pursue new goals or do things differently. In an interesting piece, To Make a Change at Work, Tell Yourself a Different Story, the authors report on “Chris”, a hard-charging, burned-out management consultant who, after 10 years climbing his organization’s ladder and seeing his health and friendships deteriorate significantly, decides he needs a change. The struggle Chris goes through while grappling with his professional identity - and ultimately reconstituting his guiding story to be more liberating - is a good read for anyone who is seeking to move in a different professional direction, but needs help getting started. Having made a career change over five years ago, the piece really resonated with me. There are many points worth considering if you need help strengthening your conviction to make a change in the workplace.
- Much like your workplace-narrative, your identity in a committed relationship can seem set in stone. Add children to the mix, and your roles and responsibilities may appear nearly impossible to adjust, let alone fit harmoniously with a demanding career. In a fascinating piece, The Key to Bliss for a Dual-Career Couple? A Contract, the author, a professor of organizational behavior, describes research she has undertaken to better understand how relationships and dual-career couples can co-exist. Her answer? Draw up a contract. Not in the legal sense; rather, write answers to questions you and your partner deem crucial to having a meaningful relationship, both professionally and romantically (“What scares me is…”, “What I want is…”, “The lines I’m not prepared to cross are…”, “The lines you better not cross are…”).The contract, the author states, is an important document couples can reference when struggling with the challenges of love and work. And being accustomed to talking about what each individual wants out of a relationship – not just from one another, but also from their careers – helps set the habit of reminding you and your partner of your most basic goals without becoming unraveled.
- And finally, a book recommendation. With Tom Perrotta’s latest novel, Mrs. Fletcher, having been made into an HBO miniseries (its first episode airs this Sunday) I recently read one of his earlier works, Joe College. I’ve always enjoyed the way Perrotta writes – his word choices, detailed descriptions, perceptive wit – and this novel, like many of his others, comments on complex societal issues through the entertaining actions of its protagonist. In this case it’s Danny, a junior at Yale, who makes a series of missteps while trying to navigate the tricky subjects of love, class, and regret. At heart, the work is about growing up and the inevitable mistakes that occur while delaying adulthood in college. If you are looking for a fun, clever read, give it a try.
October 18, 2019 - What Colleges Really Want, The Cost of Waiting & New IRS Withholding Tool
- I’ve written before about the soaring cost of college and tactics one can use to save more strategically for their children’s (or grandchildren’s) tertiary education. But with the recent scandal involving the daughters of Lori Loughlin and Felicity Huffman, I’ve started to think more about the dynamics surrounding college admissions, particularly the inherent conflicts present when weighing whether or not to admit a student. On the one hand, universities need to balance their budgets, which means accepting students who can pay full tuition. On the other hand, institutions of higher learning strive to diversify their student bodies socioeconomically and accept applicants who are not children of affluent parents and therefore need large amounts of financial aid. In a great piece in The New York Times Magazine, What College Admissions Offices Really Want, these tensions are laid bare by following Angel Pérez, the Head of Enrollment at Trinity College, as he and his staff struggle with this dual mandate. The piece covers a lot of ground, encompassing the ethical dilemmas embedded in the admissions process, as well as shining a light on just how opaque and unbalanced it has become. I recommend this piece if you are interested in the state of higher education in America today.
- “I’m keeping my money on the sidelines for right now”; “My money’s in cash, it just doesn’t seem like a good time to be invested in the stock market”; “Have you seen Trump’s latest tweet?!”. The reasons not to invest in the stock market are endless, and one can spend hours weaving a complicated mental narrative justifying the reasons not to do so. Clearly, if you have an imminent large purchase you know you will need money for, investing in the stock market does not make sense given the possibility that you could lose money in the short-term. However, if you are fortunate enough to have a large amount of money – via inheritance, equity, or some other windfall - available that you know you will not need to draw-on for years to come, you are putting yourself at a dramatic disadvantage by keeping that money in cash. And while that conclusion might be fairly obvious due to the corrosive nature of inflation, there is also a high degree of risk associated with dollar-cost averaging (e.g. investing a portion of the windfall at regular intervals until the entire amount has been allocated). In the piece, The Cost of Waiting, the author, a data scientist, demonstrates how this danger translates into real numbers. The conclusion is that a dollar-cost averaging approach – no matter how aggressively or conservatively the money is regularly invested – will underperform simply investing all of the money at once. As the saying goes, “time in the market beats timing the market.”
The IRS released its new Tax Withholding Estimator. The tool is useful to see if you are on track with your withholding amounts or if you should consider making changes. The revised Estimator is the government’s response to the unpleasant surprises folks received after filing their 2018 tax return, with many individuals (particularly those of us on the East Coast) finding out they owed a large amount of money due to changes enacted in the Tax Cuts and Jobs Acts of 2017. My broker-dealer, Commonwealth Financial Network, produced a recent article, “New IRS Withholding Tool,” that takes you through everything you need to know about using the estimator. If you have any concerns about your withholding allowances, have a look.
November 8, 2019 - Surviving, Market Highs & Fleishman Is in Trouble
- “In order to succeed, you must first survive.” Of all the quotes attributed to Warren Buffett, this one is my favorite. And with the stock market reaching new highs recently, it’s timely advice for anyone who may be tempted to take on too much risk in their investment portfolio. The exact moment when there will be a recession is anyone’s guess – the good times could keep going for years – but when it does happen, it’s important for investors to have enough cash on hand to weather the downturn. The last thing you want is to be forced to tap into your long-term investments prematurely to meet your short-term expenses. Having enough cash on hand during an economic slowdown allows you to continue to invest on a regular basis - in your 401(k), IRA, or other investment account - and buy stocks at cheaper prices, thereby positioning yourself to reap the benefits of future growth when the stock market eventually recovers. Some readers may scoff at this advice. With interest rates so low, leaving money in cash can seem like a wasted opportunity to generate a higher rate of return. But as the Oracle of Omaha has also noted, “only when the tide goes out do you discover who has been swimming naked.” In other words, in a rising stock market, everyone looks good. When business conditions worsen and the stock market nosedives, be sure your investment portfolio is not overly exposed to equities.
- Speaking of the stock market, you may have asked yourself why, at this particular moment, it is doing so well. As is usually the case, the explanation will vary depending on whom you ask. But there was a recent article in New York magazine which provides a big-picture explanation, touching on a wide range of reasons, that, when taken together, make a compelling case. It’s also a good piece to read if you want to actively participate in a cocktail party/watercooler conversation focused on the economy!
- Finally, a book recommendation. Every so often I get my hands on a novel I can’t put down and find myself staying up late nights to finish. This just happened with Fleishman Is in Trouble by Taffy Brodesser-Akner. The novel follows Toby Fleishman, a forty-one year old hepatologist who is separated from his wife, Rachel, an extremely successful, workaholic talent agent. As the novel starts out, the divorce is proceeding apace – Toby has moved to a mediocre apartment, remained a steady presence in his kids’ lives, and ventured, hilariously, into the world of online dating – until one morning he awakes to find the kids unexpectedly at his place after Rachel dropped them off while he was sleeping. After a couple impromptu days of caring for them – and trying frantically to get a hold of Rachel to no avail – Toby realizes he’s in trouble. What follows is an incredibly layered tale about the dissolution of a marriage. The novel also includes a clever narrative device, using Toby’s long-time friend, Libby, to partially tell each character’s – and her own – version of events about why the marriage didn’t work. Money, ambition, marriage, divorce, gender norms, Upper East Side mom-culture… this book explores all these themes and more in a witty, deeply relatable manner.
October 25, 2019 - Bubbles, Burnout & Schitt’s Creek
- With We Company (the parent company of WeWork) shelving its initial public offering a couple weeks ago, there has been no shortage of hand-wringing in the financial press as to what the weak demand for its shares portends for high-flying startups seeking to go public. Some pieces written about the postponement see it as evidence that tech bros are finally getting their just deserts after years of reckless and immoral behavior, and that Silicon Valley’s growth-at-all-costs doctrine may no longer be a viable business model. Other articles argue that the frosty reception We Company received is due to the fact that investors are maturing in their analysis of startups and recognizing that profits, often nonexistent at many well-known startups, actually do matter a great deal more than lofty mission statements, fancy marketing, and excessively flamboyant CEOs. Whichever side of the argument you are on, I found a piece in Bloomberg Businessweek, Why We Love to Call Everything a Bubble, which makes for an interesting read. The article does a good job of reminding us that those making bubble calls have their own prejudices, regrets, and agendas. You also can’t prove that something isn’t a bubble, because tomorrow, “could be the day”, when the bubble bursts. And there is always a tomorrow. There are a lot of good takeaways in the piece, but the most important in my opinion is to never, ever let fear motivate you to make an abrupt change with a large portion of your money.
- It may be that you’re tired of hearing about tech. Or just plain tired. You could even be suffering from burnout. It’s more common than I realized, with some studies showing that between 40 and 50 percent of people are experiencing burnout at any given time. What’s concerning about burnout, at least according to a thought-provoking article I read, is that the advice commonly given to combat it - “take more breaks”, “disconnect from your phone for a few days”, “get more sleep”, “hit the gym!” – does little to address the underlying issues surrounding burnout, leaving one to feel better for only a short period of time before the hamster wheel begins spinning anew. So what to do? One idea the article posits to avoid burnout is to search for work that allows for some degree of autonomy, mastery, and belonging. These three elements, according to the authors, are the key pillars supporting a “harmonious passion” (e.g. becoming engrossed in an activity because of how good it makes one feel). When one of these three items is missing, the intrinsic motivation inherent in a harmonious passion recedes, causing a shift in focus to extrinsic motivations (money, fame, likes, followers, etc.) that results in an associated decrease in happiness. I get that an article like this one can be eye-roll inducing. It’s hard to find joy in the modern workplace, and many of us would gladly trade jobs for more rewarding work if the pay was similar. That being said, some of the suggestions in the piece may help to chip away at disgruntlement and ultimately help you avoid burning out.
Finally, season 5 of Schitt’s Creek is now available on Netflix. The show follows the Rose family, dispossessed billionaires struggling to adapt to a new lifestyle after losing their fortune and being forced to move to rural America. The town the family bought on a whim while living the high life has now become home. And individuals they wouldn’t have deigned to associate with in the past have now become their neighbors, business associates, and even friends. It is high comedy from the moment each episode begins, and I highly recommend you give the show a try.
October 11, 2019 - Fleabag, Geographic Diversification & Garbage Financial Advice
- If you haven’t watched the show Fleabag, I highly recommend that you give it a try. Season 2 was just released in the US, and if you like shows that are intelligent, entertaining, poignant, and funny, this show is worth your time (start with season 1 if you haven’t seen it already). The show is a tragicomedy centered on a single woman in her 30s living in London and trying to figure out her life. The show’s protagonist, whose name we never learn, but who’s referred to as just “Fleabag” (played by Phoebe Waller-Bridge, who is also the show’s creator and writer), is proudly unfiltered, detached from almost all of her romantic relationships, and struggling with a tremendous amount of heartache. These issues – and many, many others – continue to play out in season 2 but with an interesting twist: Fleabag meets a Catholic priest who provides her with a different vantage point on the world. This show includes a cast of characters to whom many of us can relate: a resentful, passive-aggressive stepmom; an emotionally distant father; and an unhappily married sister who seeks desperately to form emotional connections. The show’s humor is unmistakably British: understated in its sarcasm and chock-full of self-deprecation – but also highly progressive. For instance, Fleabag breaks the fourth wall, acknowledging you, as the viewer, throughout the show, creating an additional dimension that lets you engage deeply with her plight. It’s one of the best shows I’ve watched this year.
- There was an excellent white paper put out by Bridgewater Associates recently examining the importance of geographic diversification in one’s investment portfolio. Unless you have an avid interest in reading dense, financial prose, I’ll spare you the bother of having to dig into this report and instead I’ll provide you with the main takeaway: be sure that your investment portfolio is not overly concentrated in one particular country. For example, while it’s true that one would have done extremely well investing only in U.S. domestic stocks since 2010, such an over-allocation would have generated a devastating performance from 2000-2010. As the report states, geographic diversification is a lifesaver and can prevent you from suffering unnecessary financial losses. This is one of the things a financial advisor can help protect you against.
- And finally, an article on the many problems inherent in personal financial advice. This piece is great for a number of reasons, but I especially like the author’s point that so much of what is said by so-called financial gurus is simply not actionable advice for the vast majority of people. Whether the advice includes that skipping Starbucks allowed someone to save an extra million dollars for retirement, or guidance from a 25 year-old millionaire on the 5 life hacks you must master to get your first financial windfall, most personal financial advice doled out by self-ordained “experts” is best avoided. The reason why? People giving this guidance have had outlier experiences, but fail to acknowledge as much in the delivery of their advice. So the next time you listen to a self-proclaimed expert drone on that they got rich by doing X, Y, and Z, remember that the story they are telling themselves is usually much more complex than that.