Teri Bernstein, MBA, CPA has been teaching full time in the Business Department of Santa Monica College since 1985. Prior to that, she worked in Internal Audit and Special Financial Projects for the 1984 Los Angeles Olympics, CBS, Inc., and Coopers & Lybrand. She attended the University of Michigan and Wayne State University.
"Arbitrage" is a Wall Street word for selling assets (or companies) at a profit at almost the same moment you are buying them at the lower price. The Planet Money episode linked below highlights two entrepreneurs who have applied the concept to used textbook buying and selling on a grand scale. Wildly divergent prices create an opportunity for profit. They call it a "guaranteed" way to double their investment. There is a built-in market for textbooks, and the market is predictable--the schedules of classes describe the market size. The textbooks are very expensive, and the price is very volatile, as the price rises at the beginning of each semester. Editions are current for about three or four years. The entrepreneurs used computer data to find out which textbooks were the most lucrative.
The market is changing somewhat for textbooks that have current online content. And more people are getting into the market. But the opportunity exists for those willing to do the research and can manage the logistics.
Source: "Episode 581: Free Money" by David Kestenbaum and Jacob Goldstein, NPR: Planet Money, October 18, 2017. (podcast)
images of Leandra English and Mick Mulvaney from Heavy.com
When Richard Cordray resigned last week as head of the Consumer Financial Protection Bureau (CFPB), he followed the law that established the independent consumer watchdog agency: he appointed his deputy director,Leandra English, as acting director. But then President Trump double-appointed his Office of Management and Budget pick, Mick Mulvaney, to the same position, claiming that all agency positions were his to appoint.
Ms. English filed a lawsuit on Sunday against both Donald Trump and Mick Mulvaney, seeking a restraining order to block Mulvaney's appointment. But on Monday, Mr. Mulvaney showed up to work earlier than Ms. English with doughnuts and instructions to staff to ignore Ms. English.
The confusion about who should fill the vacancy rests on two laws with conflicting procedures for appointments--one of which may or may not apply to the CFPB (quotations are from the Charlie Savage article linked below):
By late on Tuesday, Judge Timothy Kelly ruled that the 1998 law superseded the 2010 Dodd-Frank Act and cleared the way for Mick Mulvaney to head the CFPB. But it appears that Mulvaney would like to deregulate himself out of the job. Slate cited his testimony to the House Subcommittee on Oversight and Investigations: "I don’t like the fact that CFPB exists, I will be perfectly honest with you.” Mulvaney also co-sponsored HR 3118, a bill to eliminate the CFPB.
Backlash. The word has a negative connotation, but the phenomenon is almost inevitable--no matter what the topic. But when the topic is sexual harassment, conversations can become so polarizing that "overwhelm" sets in with a vengeance. Lili Loufbourow explains the phenomenon:
"With every news story there comes a moment of satiety so absolute that the weight of it trumps any story's actual merits. After everyone reads one too many descriptions of the same incident — whether it's allegations about Russian electoral interference or sexual harassment or rape — a reactionary mood sets in. It's the urge everyone gets as a news cycle crests: That's all very well and good, but come on. Time for the takedown, the pushback, the cooler heads that will reason the volume of the tide away."
Here's an example of how it happens:
"We all know what will come next. As in 2006, when the Duke lacrosse case gripped the news; as in 2014, when Rolling Stone published its piece about an alleged rape at UVA, one of the accounts coming out during this wave will be in some way disproved. When that happens, the familiar landslide of public opinion will turn. The incident will become a muted indictment of the hundreds of real victims who have come forward to tell their stories. Much of the public will seize that one false story as an excuse to facilitate the calming of the waters, the burying of a conversation so ugly and difficult that we regress to truisms about 'human nature' and try to explain sexual predations as mere 'awkwardness' or hapless attempts at flirting."
There are also the actualities of what the New York Times terms the "unexamined realities of the male libido." An observer needs to over-ride any knee-jerk responses to situations in order to consider all aspects and all inputs to complicated interpersonal situations. What tools can a person access in a situation where a gut-feel response might be inappropriate?
One choice: "Mindfulness" is meta-awareness about what one is experiencing. In a simple example, one can experience frustration or even road-rage in bad traffic among selfish drivers. Meta-awareness would be noting that one has a strong feeling and that a choice exists as to whether to run with those feelings or just sit and notice that the feeling has arisen. In other words, one can swear or yell at the other driver...OR take a breath and notice how much a part of the experience of delay is shared with other humans.
With respect to the backlash issue, meta-awareness might look like this: if one experiences a thought such as: "They are not being fair to Louis C.K." or "That's not an apology!!"-- it is possible to have two responses (at least). One response is to feel moral indignation and ramp up one's emotional agitation regarding the unfairness. Another response is to have a meta-awareness: "Oh, I am experiencing a sudden thought that might get me riled up. I can choose to let it take over, or I can just sit in this meta-awareness until it subsides." One then has the chance to ask--again and again if necessary: What really happened?
Source: "The sexual harassment backlash is coming. Here's how to respond," by Lili Loufbourow, The Week, November 3, 2017.
The GOP tax reform plan is far from being finalized, but certain aspects of the bill have a disproportionate (and negative) impact on specific populations. These groups tend to be people who don't make much money anyway. These education-related "losers" with respect to the proposed tax plan are:
Many observers feel the plan disproportionately affects STEM students and diverse populations. The Senate plan will be different; before any bill becomes law the differences will have to be reconciled.
Since today's students will be employed over the next few years, the next question to ponder is:
image from Wealth Management
As the details in the legislation get ironed out, the data that can provide realistic answers will become available.
image from YouTube video produced by Wah! Banana
Interviewing for a job means that you have your "foot in the door." You have made the "paper cut" and the employer is interested enough in you as a future employee to take the time to meet you. But a job interview can be more stressful than a first date. A person can do their homework on the company and have excellent qualifications, but might be get flummoxed when asked one of several tricky and tough interview questions--designed to put an interviewee on the spot. Here are a few from Forbes Magazine:
A few of the above questions shouldn't surprise anyone who is preparing for the interview process--experience solving problems or learning from mistakes is pretty standard interview fare. But some of the other questions can test for emotional intelligence and, without asking directly, for honesty.
Here are a few more tough questions, these from Onward Search:
And, especially if a person has been stretching the truth in the interview process, the really tough question to answer is: When was the last time you told a lie?
The Detroit area is growing again. The Mumbai, India-based company, Mahindra, had a ribbon-cutting ceremony today signaling a new plant to be built in Auburn Hills, MI. This is the first auto plant investment in the Detroit area in over 25 years. Off-road vehicles will be manufactured there.
Reasons cited by Anand G.Mahindra, CEO, for the location of the plant include:
Source: "Indian Automaker's Plant is Latest Sign of Detroit Comeback," by Bill Vlasik, New York Times, November 20, 2017.
image from the The Daily Worth blog
The recent rise in sexual harassment complaints has highlighted one aspect that may arise in dealing with a "bad boss." But bosses can be troublesome in a variety of ways. Four general behaviors that indicate a supervisor may be problematic are:
Forbes magazine recently did an article on how to deal with a difficult supervisor, suggesting five constructive ways:
It is difficult to apply these rational responses and deal with the emotions that arise in the moment when being criticized or otherwise poorly treated. Mindfulness is a technique that might help. Mindfulness is meta-awareness about what one is experiencing. In a simple example, one can experience frustration or even road-rage in bad traffic among selfish drivers. Meta-awareness would be noting that one has a strong feeling and that a choice exists as to whether to run with those feelings or just sit and notice that the feeling has arisen, not taking the situation personally.
With respect to the bad boss issue, meta-awareness might look like this: if one experiences a thought such as: "I am really being treated unfairly! What a jerk!"-- it is possible to have two responses (at least). One response is to feel moral indignation and ramp up one's emotional agitation regarding the unfairness. Another response is to have a meta-awareness: "Oh, I am experiencing strong emotions here. One is anger. Another is fear. I could really let this build until I want to explode. I can choose, however, to just sit in this meta-awareness until the strong feelings of helplessness subside.Then I will think about the situation rationally and maybe discuss it with a trusted friend or colleague so I I can handle it more skillfully."
Source: "5 Constructive Ways To Deal With Bad Bosses," by Victor Lipman, Forbes, September 14, 2017.
According to a recent Wall Street Journal/NBC poll, sexual harassment is a reality for 48% of women in the workforce. Individuals who do not identify as women are being harassed as well. Human resource departments (now often heavily staffed with attorneys) often use "trainings" in an attempt to mitigate corporate liability resulting from sexual harassment, which can be costly in terms of productivity and turnover, as well as dollar settlements. These trainings clearly are not doing enough to address the realities of harassment if so many are still experiencing it.
The humorous skit from Saturday Night Live is far more direct than any HR training might be. It deals with the issue in substance, rather than side-stepping the interpersonal issues by focusing on the legalities. Marketplace's Sabri Ben-Achour addressed the effectiveness of various approaches to sexual harassment training in a previous podcast: "What makes sexual harassment training effective--and ineffective."
Source: "SNL's Claire From HR nails sexual harassment, but she won't be part of your training," by Jana Kasperkevic, Marketplace: American Public Media, November 13, 2017.
image from flexjobs
Holiday seasonal employment creates new opportunities in the "gig economy." The number of jobs spike in delivery and other logistics arenas, as well as in both on-ground and online sales. Employers can maximize both short and long term benefits by hiring millennials, according to the linked article and information from the National Retail Federation. The reasons include:
In addition to the reasons listed in the article, the acceptance of short-term employment as a lifestyle make the millennial generation a first-choice for seasonal hiring. I'm sure there are plenty of other reasons...
Source: "3 Reasons Why Your Seasonal Hires Should Be Millennials," by Deborah Sweeney, Business.com, October 19, 2017.
According to Thomas Gallagher, being a multi-millionaire might actually increase one's anxiety about having enough money. Professionals who work in this psychological niche say that those with acquired wealth might fear:
The rich certainly do not get much empathy when they complain about these worries. Those with inherited rather than acquired wealth seem to have even more problems--especially if they have siblings with whom they must work out their differences.
At least a rich person has the resources to get help to ameliorate their psychological unease. Charlotte Beyer, an author and entrepreneur specializing in wealthy individuals, has this advice: “How you spend your money is the ultimate representation of your values, and you should do it with joy and fun and love.”
Source: "I'm rich, and that makes me anxious," by Kerry Hannon, New York Times: My Money, November 7, 2017.
image from blog article
Students who teach in challenging urban areas or doctors who practice medicine in remote areas have historically been able to get help from their employers (usually local governments) in paying off their student loans. That employee benefit is being introduced to the private sector by companies that operate as third-party managers of this perk.
Gradifi is one such company. It has placed ads directed at employers, telling them that the reason students have accumulated so much debt is that they "wanted to work for you." PricewaterhouseCoopers (the Big Four accounting firm, known as PWC) was Gradifi's first client.
It turns out that millennials (who are healthy and far from retirement) find very useful a benefit that will help them pay down their student loans by matching the payments they have to make RIGHT NOW. According to Tim DeMello, CEO of Gradifi, “the millennial workforce will be 50 percent of the workforce by 2020, and 75 percent of them graduate with student loans.” And student debt now totals $1.4 trillion. The potential for growth seems apparent.
Source: "The new workplace perk: help with student loans," by Amy Scott, Marketplace: American Public Media, November 8, 2017.
Out-of-office replies to email or voicemail abound during holiday season. Your workplace may have general guidelines or templates, but taking personal responsibility for their length, content and tone can shape a correspondent's reaction and response. Ask yourself if your intention is to be:
Remember that people's time is valuable, and they are contacting you for a reason. Try to let them know when they can contact you and find you in the office, and an alternative way to get help in the meantime. Seriously consider not misleading them with promises you can't keep. And be careful about humor, as you don't know how it might be received or misinterpreted.
The most important thing is to leave SOME kind of notice that you are going to be out of the office, and for how long.
Source: "Your Best Ways to Say, 'Sorry, I'm Out of the Office'." by Tim Herrera, New York Times: Smarter Living, November 6, 2017.
Jack Canfield and Victor Hansen started the "Chicken Soup for the [fill-in-the-blank] Soul" franchise. The company had successfully branched out into greeting cards and calendars before its sale to William J. Rouhana, Jr.
Rouhana overreached, however, by expanding into movie-making and soup production, both of which failed. He has had success, however, in pet food and several titles that are similar to those in the original series, but more cleanly branded. An example is "Chicken Soup for the Soul: From Lemons to Lemonade." In this format, the franchise has expanded to around 300 titles.
What seems like a good idea to an entrepreneur thinking out-of-the-box may not pan out for several reasons. Actual chicken soup seems like it could have worked. But just because a company has one very successful idea does not mean it can branch out on a tangent that might not resonate with the market. The article gives the examples of a vodka specialist trying to branch into gin, which is a different production process and has a different market. Even more clearly far afield, could Exxon try to make an ice cream? In any event, Rouhana--in partnership with his wife, Amy Newmark--is now extremely successful, and has new plans for expansion.
By the way, this article was part of a series in the Business section of the New York Times called "Wealth Matters." The series is directed at, and about, strategies for the affluent--so it may be of interest to anyone who is, or plans to become, extraordinarily rich.
Source: "Wealth Matters: Chicken Soup For the Soul? Sure, but served in a Bowl?" by Paul Sullivan, New York Times: Money Matters, November 3, 2017.
image by Minh Uong for the NYT in article linked below
In the aftermath of the Equifax security breach, several companies have tried to step into the marketing niche as financial-identity Hero. But the costs can be hefty: ID Shield charges $899 to handle an identity breach, and a monthly fee of $9.95 or $19.95). But most individuals haven't had a breach yet--they just want to avoid one. Here are a list of steps than an individual can take. From an insert in the article linked below, these cover most of what the identity services promise, plus a few things that are out of their jurisdiction:
In any event, it is important to remember: NOTHING is 100% secure. Vigilance is important
Source: "The Post-Equifax Marketing Push: Identity Protection Services," by Tara Siegel Bernard , New York Times, October 25, 2017.
image from Merit Career Development
Regardless of your belief system, the only life that you can make decisions about is the one you are living now. And even if you are independently wealthy, your choices about work, career and how you spend your time are major factors in determining your personal satisfaction--no matter what hand of circumstances you were originally dealt.
Getting out of the mindset of "I HAVE to..." and into the mindset of "I GET to..." sometimes requires a change of perspective--particularly if you have gotten into the habit of listening to your relatives or your instructors to guide your life up to this point. Some suggestions delineated in the article linked below include:
These suggestions are part of an over-arching set of concepts: Legacy, Mastery, Freedom and Alignment. An additional piece of advice offered: "collect experiences and be generous." This means it is OK to be compassionate with yourself and others as you either succeed or fail forward into new challenges and a bigger life.