• Want to increase your anxiety? Become rich

    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:

    • not having enough money to last their lifetimes
    • that the money might "corrupt them"
    • that the money might "make them insensitive to the needs of others"
    • their children will be unmotivated, leading them to have meaningless lives
    • becoming a sure source for loans or largesse in the eyes of family members
    • becoming a target for crime

    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.

    Follow up

    • What amount of money in the bank would make you feel rich and secure? What about your net worth? 
    • Discuss the differences experienced by those with inherited wealth vs. those with acquired wealth.
    • When you read this article, did you think, "luxury problem" or "white privilege"? What would you like to say to Thomas Gallagher and others with his anxieties?  

    .

  • The new employee benefit: Help paying off student loans


     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.

    Follow up;

    • What employee benefits interest you the most and why? Consider repayment of student loans, health care, vision and dental care, vacation time, personal and sick leave, defined benefit pension plans or 401(k) plans with employer matching, child care leave, on-site child care, flexible scheduling, ability to work from home, office or cubicle surroundings, on-site workout areas, on-site masseur/chef/barista, product discounts, professional development training, self-development training, technology freebies or loans (phones, tablets, laptops), business car, business class travel upgrades, expense accounts or entertainment expense reimbursements.
    • How important is salary vis-a-vis benefits?
    • Describe the tax law change that would make the student loan benefit more attractive. Would this be possible under the tax bill currently being proposed by Republicans in Congress?

    .

  • Holiday season hack: How to say "I'm out of the office"


    How-to video in case you don't know how to do this is Outlook 2013

    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:

    • Humorous?
    • Distant?
    • Helpful?
    • "Crispy"?
    • Indispensable and on-call?

    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.

    Follow up:

    • Check out the suggestions that readers of the linked article serieshave shared, as well as the back story on this topic: Emily Gould. Summarize what you found to be the best suggestions.
    • Compose your own out-of-office replies for email and voicemail. Share and comment on the replies of others, paying particular notice to tone and any messages that may have been conveyed between-the-lines.

    .

  • Chicken Soup for the Wealthy Soul


     Jack Canfield tells a story

    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.

    Follow up:

    • What other attempts at expansion into other fields can you think of? How successful have they been?
    • What is the take-away lesson of "Bobsie the Fireman"? 
    • What can you learn from the experience of Rouhana and Newmark? What is Rouhana's immediate plan for future expansion?

    .

  • Sales pitches in response to Equifax hack abound: what to do instead


    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:

    1. File your taxes as soon as possible. That way, someone else can't use your social security number to snag your refund.
    2. Ask your doctors' offices for copies of your medical files. This way, you have the facts, documented and dated.
    3. Go paperless. This increases the chance that you will get notices on your mobile devices, and lessens mail theft possibilities.
    4. Dedicate one computer or prepaid cell phone for all your online financial activity.  I have not taken this step, but I see how it would be extremely helpful in created a physical "firewall" against theft.
    5. Open a MySocialSecurity account. That way, someone else can't use your SSN to open an account that you can't access--or get benefits from.
    6. Freeze your credit files.  See the blog from last week on how to do this. 
    7. Sign up for free fraud alerts. That way all the bureaus will be notified if one has an alert.
    8. Read your credit reports. You can get a free report from each service bureau every year. The reports might be a dozen or more pages long, but every item needs to be checked. If you have trouble obtaining a report from any of the three bureaus, you might have a bigger problem. 
    9. Consider free credit monitoring, but understand the terms first. For example, there might be ads.
    10. Keep as few accounts as possible.  This keeps your monitoring workload down, as well as lessen that chance you might forget about something.

    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.

    Follow up

    • List several of the sales pitches that followed the Equifax breach disclosure. How is each one potentially problematic?
    • How many of the ten suggestions listed above can you commit to? Make a plan, and a critical-path timetable to complete the items. For example, gather all of your 2016 records that you will need to complete your tax return before the end of the year, so you just have to wait for your W-2's and 1099's to complete your return in January 2018. 
    • Put reminders and calendarize events in your phone so that you will not forget maintenance items. 
    • What is phishing and how can you prevent it?

    .

  • YOLO: How to decide what to do with your career and your life


     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:

    1. Assemble a personal "Board of Directors": Pick a small number of people you trust to talk things over with on a regular basis. You are not alone.
    2. Build a financial cushion: Without a financial cushion, a person cannot act on opportunities or respond to sudden expenses. [Tips for saving]
    3. Take time to introspect and ponder: This has to be scheduled into your calendar. Distraction-free time to really think can help you feel when decisions leave you at peace and confident, rather than nervous or "holding your breath."
    4. "Find a sponsor, not just a mentor": This seems like a tough one, but a mentor can just be a source of advice (or someone who is using your skills to be part of his or her team). A sponsor has your interests at heart. Maybe they see something of themselves in you. At any rate, a sponsor has to be coming from a place of security.
    5. Remember that a career path is not a direct line from point A to B to C: Careers are a marathon, not a sprint. You can't see the end point when you start out. A career path has surprises. Being open to new experiences but being ready to commit and adapt while maintaining your goals are key skills. 

    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. 

    Sources:

    Follow up

    • Who are potential sponsors in your life? Who do you know that has a sponsor? Brainstorm possibilities from among:
      • the higher-ups in your organization
      • members of your extended family;
      • the friends of your parents or other close relatives;
      • past work connections
      • an idealized mentor you do NOT know, but who embodies the qualities that could help you be effective
    • Assemble your own Board of Directors--maybe from among the individuals who can't really serve as a sponsor. Write down three career issues to ask each of the possibilities as you decide who will be your go-to group. 
    • How much do you have in savings? Do you have any other financial safety net? Make a plan for contingencies...and commit to a plan to save.

  • Benefits enrollment season--avoid the landmines


     another analogy (and more advice) for benefits open enrollment

    Most employers who provide benefits have a fall open enrollment period, where participants can choose a different type of plan. The dates change from employer to employer, so pay attention. The main benefit areas include:

    • health benefits (HMO, PPO, various deductibles, co-insurance, maximums, and co-pays; single or family)
    • Tax-assisted benefits: Flexible Spending Accounts (FSA), Health Spending Accounts (HSA);
    • Vision and/or dental insurance
    • Other tax-related benefits such as pre-tax child care deductions. 

    It is not only open enrollment season at workplaces--it is also open enrollment season for the Affordable Care Act (November 1 to December 15, 2017). Some of the same issues arise when choosing benefit plans, with a notable addition: subsidies. All choices apply to 2018 and if you are late, in many cases you become ineligible for coverage. You might want to check out some advice: 

    Source: "How to navigate benefits enrollment season at work," by Lacie Glover, Los Angeles Times, October 29, 2017.

    Follow up

    • What is your personal situation with health care? Find how much it costs per month for COBRA, if you are covered under your parents' plan. If you are covered by your employer's plan, what is the cost per month for them and for you? Or under ACA? What are your annual benefits and out of pocket costs?
    • What is a "cafeteria plan" employee benefit program? How would individuals in different life situations use cafeteria benefits?
    • Define the following and cite the pros and cons of each: HMO; PPO; FSA; HSA.

    .

  • Halloween trends and spending 2017


    Snapchat and Bitmoji teamed up; from Mashable

    We know that retail stores are not trending well, but in-store shopping at Halloween has helped boost this season to all-time sales highs. From Business Insider:

    "This year, consumers are expected to spend a record $9.1 billion on Halloween products, according to the National Retail Federation, an 8.3% increase on last year's total. Of that, consumers plan to spend $6.1 billion on candy and costumes. This is good news for the retail industry, as is the fact that consumers plan to do a significant majority of their Halloween shopping in stores, a rare break from the industry's trend toward online purchases. Just 22.3% of consumers say they plan to do their Halloween shopping online this year, while the rest will frequent discount, department, grocery, and even dedicated Halloween stores."

    Pop culture and technology have influenced purchases of costumes, specialty candies, and decorations. 

    Source: "Halloween costume differences between kids and their parents reveal a growing generational rift," by Mark Matusek, Business Insider, October 27, 2017.

    Follow up

    • What can explain the Halloween spending trends, in your opinion?
    • What are you doing this Halloween? What are you spending? How are you celebrating?

    .

  • Hickies


     promotional/instructional video from YouTube

    Hickies is a company that makes one product: silicone bands that connect the parallel eyelets of shoes semi-permanently. Their function is to replace shoelaces in a forgivingly stretchy way so that shoes never have to be tied or untied--they just have to be stretched on. 

    The idea for Hickies arose from Gaston Frydlewski's habit of not tying his laces--and his observation that others often didn't tie their laces, either. He was in college in Argentina when he met Mariquel Waingarten, whom he thought would be impressed with his idea. She wasn't. But when they reconnected six years later, she could feel that this idea was an obsession that had to be realized. Waingarten and Frydlewski are now both business and romantic partners. They live and work together--and their focus is Hickies. 

    They were fortunate to garner interest from Topper (a Brazil-based athletic shoe maker) and Adidas. Both companies wanted to incorporate Hickies into their products. But Hickies were also sold (as a novelty accessory to be used on any shoe) in Brookstone stores and catalogs, and in Equinox fitness clubs. Waingarten and Frydlewski received financing from Kickstarter and Indiegogo campaigns. The company also does outreach with the autism community--connecting with a solution to the universal problem of tying shoelaces.

    Shoelaces are a serious annoyance for me. I have a husky dog that needs to be walked and taken to the dog park daily (not to mention a Fitbit that needs to be fed) so I am often taking my athletic shoes on and off. I'm looking forward to trying these no-tie lace replacements myself. If they work out (and the reviews I've read seem to indicate they will), I will probably buy a few sets as stocking-stuffers for others for the holidays.  

    I thought that the name was from the term "do-hickey" (definition: "whatchamacallit" or "thingamajig"). But it turns out that Waingarten and Frydlewski were thinking of the other definition:  "marks of affection"--which they wanted everyone to have on their shoes. 

    Source: "At Hickies, a 'life without laces' ties a couple together," by Crystal Kang, wework.com: creator, December 7, 2016. 

    Follow up:

    • What possible problems could you see with the Hickie product? Check out the company's FAQs to see if your issues are addressed. 
    • Product development: When I was in college (early 1970's), I wished that my Raleigh Grand Prix 10 speed--with its skinny and high-maintenance tires--could have tires more similar to my little brother's "banana bike": thick, tough tread to withstand riding on rocky roads and dirt. If I had only taken my own wish and made a business out of it, I might have been made some serious money with hybrid bikes. The couple in this article didn't like tying their own shoes--but wouldn't settle for velcro shoe models either. They did something about it: created Hickies that could be used on any model of shoe. In a similar vein:  What product do YOU wish existed, or what annoyance do YOU wish solved?  What product innovation could solve that problem for you and others? Think outside the box. Describe your product, what niche it fills, and how you might market it.
    • Why did Waingarten and Frydlewski opt for Kickstarter and Indiegogo funding? How did that work out?

    .

  • The Business of Death


     image from linked podcast header

    As the baby boomer generation ages, one thing is certain--the need for burial or other end-of-life services will peak for more than a decade. As it happens, this coincides with a larger world population and less space for burial. Enter innovation and entrepreneurship.

    Hurdles remain: first, many for people are unwilling to deal with mortality practicalities, due to a desire to avoid the topic of death. Also, religious requirements and cultural traditions play a huge role in end-of-life practices. 

    I recently had a 17-year old shepherd-mix dog die. We had prepared for her death by digging a five foot deep grave and purchasing a new product--a shroud from the start-up Coeio. It was imbued with a type of mushroom spore that would, when buried, spring to life to hasten the process of decomposition. 

    Practices at death vary widely throughout the world, and entrepreneurs are breaking new ground in adapting these practices in ecologically sound and economical ways. NPR's Planet Money explores some of these practices. 

    Source: "Episode 801: The Death Show," by Stacey Vanek Smith, Bryant Urstadt, Sonari Glinton, and Sally Helm, NPR's Planet Money, October 20, 2017. [transcript]

    Follow up

    • Have you or your parents discussed plans for the deaths of anyone in your family? Have you already had to deal with this? Are there certain family traditions or expectations? Describe and discuss your feelings about the plans (or lack thereof)
    • Do any of the "new traditions" discussed in the podcast appeal to you? Would you like to have a big funeral rather than a big wedding? 
    • Is the business of death a good investment in the U.S.? Discuss the demographics and possible marketing opportunities. 

    .

  • Still haven't frozen your credit file? Here's a rude reminder...


     John Oliver on Equifax  TRIGGER WARNING! Bad language

    In September of this year, Equifax announced a security breach that had occurred in July that affected just about every American with a bank account or credit card. There was a flurry of stories telling you want you MUST do if you want to ensure that your identity isn't stolen: 

    FREEZE YOUR CREDIT FILES AT ALL THREE REPORTING AGENCIES--

    • Equifax
    • Experian
    • Trans Union

    In case you didn't take the time to do this, or were waylaid because of fees and sales pitches, you might want to give yourself a rude talking-to by listening to John Oliver's reminder. He includes what can happen when your data does become public. He also warns consumers to avoid traps set by the credit reporting agencies to sell you less-than-freezing services. He also warns about a third party service that acts as a middleman that buys its services from Equifax. 

    If you don't want to listen to his rude (and angry) reminder, you can read the article about it below, or just go straight to his website link for instructions on the quickest way to get yourself protected from this breach: https://equifaxfraudprevention.com  NOTE: this website is NOT affiliated with Equifax, regardless of what it is named. Instead, it is John Oliver's and Last Week Tonight's website for consumers to quickly get to the correct place to freeze their credit. 

    Source: "John Oliver is super angry about the Equifax breach, offers one thing you should do immediately," by Peter Weber, The Week.com, October 16, 2017.

    Follow up:

    • What have you done about dealing with this Equifax breach? How did it go? If you have done nothing, explain why not. 
    • What are the dangers of freezing your credit (if any)? What do you have to be sure to remember to do?
    • If you do listen to John Oliver's segment, who posted their Social Security Number on billboards and the sides of panel trucks? Why did he do it? What were the ironic consequences?

    .

  • CFPB's ability to help students with loans is crippled by Trump administration


     DeVos stops implementation of rules to help students PBS NewsHour

    The Consumer Financial Protection Bureau's (CFPB) mandate is to protect individuals from corrupt and fraudulent practices by big financial institutions. The 2010 Dodd-Frank Act created the bureau and also established a student loan ombudsperson.  The CFPB has had several successes. It has enforced clearer disclosures on credit card bills, mortgages and other loans. The CFPB also investigates complaints filed by individuals--many of which have been initiated by former students who were pressured into signing expensive loan documents by brokers using fraudulent practices. The CFPB has also helped students renegotiate loan schedules, and has helped veterans get lowered interest rates on their student loans.

    Secretary of Education Betsy DeVos, however, suspended the CFPB's standing to intervene on behalf of students and these loans. She directed the Education Department not to share data with the CFPB. She claimed that, in helping students, the CFPB was "an overreaching and unaccountable agency.” Perhaps Secretary DeVos is not familiar with the language in the law that established the student loan ombudsperson. 

    DeVos wants the Education Department, which helps private banks set up sometimes problematic student loans, to avoid having to deal with a regulating agency that might help consumers undo part of the damage they have suffered. Others do not think this "fox guarding the henhouse" approach is a good idea:

    “'The Department of Education is both a lender and a loan servicer,' observed Whitney Barkley-Denney, senior policy counsel for the Center for Responsible Lending. 'We don’t want to be in a position where the department is overseeing its own loans. That would be like having a bank regulate itself.'” 

    Nevertheless, the current administration is cutting off the CFPB. And the chairman of the House Financial Services Committee has thanked DeVos and her people for doing so. I wonder if DeVos's investments in private for-profit colleges and student loan debt collection agencies had anything to do with her decision? Perhaps she just objected on principle to the agency set up by Dodd-Frank. 

    Source: "GOP would rather see student borrowers get screwed than let consumer agency do its job," by David Lazarus, Los Angeles Times, October 24, 2017.

    Follow up:

    • In what other instances is the "fox guarding the henhouse" in financial matters? [This is a tough question that might require some research.]
    • What are the pros and cons of financial regulations from a third party? (This would include annual financial audits required by the SEC.) Who wins and who loses in each case? Check out the objections to Dodd-Frank linked above before you answer. 
    • What role, if any, might the CFPB play in regulating Equifax and the other credit reporting bureaus, in an ideal world?
    • If you have a credit card, read your statement carefully. Look for the disclosures about the cost to you of paying in various time frames. What is the total amount of interest that you'd pay on your largest balance card, and how long would it take to pay it off (if you made no further purchases after your most recent statement). 
    • If appropriate, file a claim with the CFPB and report on what happens. 

  • No insurance for marijuana farms destroyed in California fires


     CBC News Insurance cancelled for marijuana co-op (7 months prior to fires)

    Recent fires in Northern California have caused massive damage to marijuana farms. But because marijuana growing is illegal under federal law, no insurance company will insure these businesses. Just at the point when the potential market was to expand due to changes in California law--as well as it being harvest season--tragic fires have wiped away some farmers' crops and homes. Even plants housed in greenhouses that have survived fires may be contaminated by smoke. 

    Source: "Devastated Northern California marijuana farms are ineligible for insurance," by Tonya Mosley, Marketplace: American Public Media, October 23, 2017. 

    Follow up

    • What is your opinion about insurance for businesses whose legality is in question in overlapping districts? Since states provide corporate charters, should incorporated businesses following state laws be insurable?
    • Read about a solution proposed by California Insurance Commissioner Dave Jones. What are your thoughts?

  • Steelworker's self-reliance ends when job moved to Mexico


     a different company (Carrier) announces that it is moving jobs to Mexico

    Rexnord Corporation has employed 43-year old Sharon Mulcahy in a plant manufacturing industrial-use bearings for over seventeen years. She'd dealt with sexual harassment and physically demanding job tasks to keep a job that gave her security and standing, in spite of many difficulties in her personal life. But the plant is closing, and 300 workers like Mulcahy will lose their jobs. Like many of the 67% of American adults who do not have a college degree, the future is uncertain. In a changing economy where goods can be manufactured more cheaply and with less regulation elsewhere, manufacturing jobs are disappearing. Short term profits trump the long term reputation for quality that used to be a hallmark of American production. 

    If a company has an economic reason to move its manufacturing operations overseas (or across the border), should they be allowed to if Americans will suffer?

    There is no checkpoint asking that question. Sharon Mulcahy is losing her job to cheaper Mexican workers. 

    Has government done its due diligence? There are many opinions on that question.

    Source: "Becoming a Steelworker Liberated Her. Then Her Job Moved to Mexico." by Farah Stockman, New York Times, October 14, 2017. 

    Follow up

    • Read the article and several of the linked comments to the article. Taking into account the various viewpoints, what do you see as a solution at this point? What could have been done earlier? Is there a role for government in maintaining business entities in the U.S.?
    • Research the building and closing of various factories in Asia and elsewhere by Nike and Apple. Comment on how these stories relate to the U.S. Steelworker story.
    • Do you think there is a compromise position for the U.S. and American workers? If so, please delineate it 

    .

  • A discontinued classic vehicle, a new electric car, and two British visionaries


     Dyson and electric car; Bloomberg

    Two wealthy Britons have recently announced separate visions for introducing new cars:

    • James Dyson, an inventor of high-end and efficient vacuum cleaners and hair dryers, now has 400 people working on a new electric car.
    • Jim Ratcliffe, a petrochemical executive and billionaire, plans to build a "spiritual successor" to the Jaguar Land Rover Defender, a classic safari vehicle.

    Maybe each of them should talk to Elon Musk first. Developing, manufacturing, distributing and selling automobiles is a major undertaking. The capital investment, changing technologies, and fickle consumers contribute to challenges at all levels of the process. Nevertheless, to some observers, the car manufacturing industry is at a pivotal point of change. “There is a lot of fluidity in the entire industry space, which is what these players see,” said Peter Wells, a business professor at Cardiff Business School in Wales.

    While Ratcliffe is eyeing the marketing niche created when Jaguar Land Rover decided to no longer manufacture its iconic car, Dyson brings a lot of development and manufacturing experience to this venture. Dyson envisions spending £1 billion on the car and another £1 billion on the battery, which may not be enough (Musk has spent over £6 billion on the Tesla Model 3). In any event, Dyson has already bought Sakti3, a company whose work on solid state batteries may give him an edge. 

    I doubt that either car will be in my price range, but I am curious about what will develop. 

    Source: "An electric car and a throwback: the dreams of 2 rich Britons," by Stanley Reed and Amy Tsang, New York Times, October 12, 2017.

    Follow up

    • Which of these two Britons has a better chance of fulfilling his dream? Give specifics about why to back up your opinion. Cite analysts in the article.
    • You be the visionary. What products would you like to develop or see developed, if you had a few billion to invest?

    .

  • Fire insurance: What you wish you'd known


     California fires 2017

    Almost every homeowner has fire insurance...but, is it enough to replace one's home and belongings? Like every contract, the devil is in the details. What is covered?:

    • Assessed value?
    • Original cost?
    • Depreciated cost?
    • Replacement cost?
    • Replacement cost with limitations?

    In situations like the devastating fires in and around Santa Rosa, California, where whole neighborhoods are wiped out, the rebuilding costs will soar due to supply and demand as many people make claims. What is worse, however, is that insured homeowners might think they have coverage when they don't.

    "Narbeh Shirvanian, a Glendale lawyer who handles fire-related claims, said it’s not unheard of for an insurer to change the terms of a policy during the renewal process. 'It might be disclosed,' he said. 'But let’s be honest, nobody really reads all this stuff.'"

    In other words, your renewal policy might not account for inflation, or may have substantive language changes that leave you under-insured. In addition, smoke and ash damage may or may not be covered. Here is a heads-up to keep your assets covered: 

    "A smart idea is to pay a little extra for what’s known as an extended replacement cost endorsement. This is basically additional coverage intended to accommodate at least a portion of any unexpected cost increases. You can also purchase additional coverage for code upgrades. For example, the rules might have changed for electrical systems or insulation since your house was built. Code-upgrade insurance will protect you from so-called betterments that your basic policy might not address."

    Source: "As California burns, here's what you need to know about fire insurance," by David Lazarus, Los Angeles Times, October 11, 2017.

    Follow up

    • If you are a renter, are you insured? (only 40% of renters are insured for their personal belongings.) List the pros and cons of being insured as a renter and if you were a homeowner. 
    • What is an extended replacement cost endorsement?  What is a betterment and how does it relate to a code upgrade? Give an example. What is code upgrade coverage?  How might you decide if these additional coverages are a good idea? 

    .

  • Kneeling NFL Players seem to have labor law on their side


     Trevor Noah reports on NFL players kneeling (language warning)

    Noam Scheiber, writing in the NYT, has researched labor law regarding the recent kneeling done by athletes during the national anthem. Is it legal? Should the NFL stop it? His take-away: 

    "How far can workers go in banding together to address problems related to their employment?...In principle, the answer in the N.F.L. and elsewhere may be: Quite far. To the extent that most people think about the reach of federal labor law, they probably imagine a union context — like organizing workers, or bargaining as a group across the table from management. As it happens, the law is much more expansive, protecting any 'concerted activities' that employees engage in to support one another in the workplace, whether or not a union is involved."

    I am reminded somewhat of the "I'm Spartacus" scene in the Stanley Kubrick film starring Kirk Douglas, Tony Curtis and Laurence Olivier. There is strength in numbers, and solidarity can sometimes help shift the balance of power.

    Source: "NFL Player may have an ally in their protests: Labor law," by Noam Scheiber, New York Times, October 12, 2017. 

    Follow up

    • What conditions need to be present in a "concerted action"? Do you think the kneeling action falls within these parameters?
    • Are you required to say the Pledge of Allegiance, or listen to the national anthem at the beginning of the work day? If so, are your behaviors during these activities evaluated as compliant or non-compliant?  Explain how this is incorporated into your job performance.  If you are not required to perform any sort of ritual allegiance, state how you would behave and how you would feel if you were required. How would you manage employees subject to these ritual requirements? 
    • If you are familiar with the film, how does the action taken by NFL players compare and contract with the "I'm Spartacus" scene from the Stanley Kubrick film?

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  • Indian professionals' bumpy road to economic success

    Ken Garduno, illustrator (from link below)

    There are many professionals from India working in Kansas City, Kansas. Apparently, this is a big deal, as evidenced in the cricket community:

    "The Indian community here, now 7,000 strong, has boomed as the economy back in their home country has exploded. This is a global story of Indian talent, connecting with U.S. education, technology and investment. Almost all of the bowlers (pitchers in baseball terms) and batsman (batters) on this Saturday morning are products of the Indian government opening up to competition and foreign investment the last two decades, and they've brought their education and job skills to the American Midwest." (Scott Tong in conversation with several members of this community, in the podcast linked below)

    Nevertheless, there has been discrimination, prejudice and hate speech:

    "'Even if you’re born and raised here, when something like the shooting in Olathe happens in your community, everybody feels vulnerable. Because we look different,' said Aviva Ajmera, an Indian-American business strategy consultant in Kansas City. Ajmera was born in Albany, New York. The concern goes beyond the shooting. People of Indian descent have heard President Donald Trump talk about limiting trade deals and visas, and during the presidential campaign they heard then-Breitbart radio host (and later White House strategist) Steve Bannon blast South Asians in a talk radio show." 

    This population is parallel to other waves of U.S. immigration spurred by differences in economic opportunity.  "Currently the average annual economic output per person in India is about $2,000 dollars, compared to about $57,000 in the U.S. — this according to the metric known as GDP per capita. While India is catching up with richer economies, there’s still a long way to go."

    Source: "As India's economy catches up to richer world, tensions emerge," by Scott Tong, Marketplace: American Public Media, September 12, 2017. [podcast and text]

    Follow up

    • Describe the tensions playing out in the Kansas City community, and how they might be getting better or getting worse.
    • What might these tensions mean for a manager employing Indian professionals?  How would you address them?

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  • Harvey Weinstein harassment scandal fallout


     CBS Chicago

    Harvey Weinstein has been accused by many women of having sexually harassed them. He used his incredible power in the film business to, well, I'm not sure what--but plenty of women felt vulnerable. My twenty-something daughter reports that young men that she knows have also experienced harassment. Not to the extent that she herself has, but, still.

    What gives? The law is clear. Business ethics are clear. Work is work. Personal relationships have to be separate--particularly if there is a power discrepancy. 

    Subsequent reports have Weinstein ejected from the film Academy. But others are saying that he didn't do anything "everyone" else wasn't doing. That perception doesn't make it right.  Kate Winslet has a perspective worth considering.  

    Source: "The fallout: How the Harvey Weinstein scandal exposed sexual harassment as Hollywood's dirty secret," by Josh Rottenberg and Amy Kaufmann, Los Angeles Times, October 12, 2017.

    Follow up

    • Have you experienced sexual harassment of any kind? Describe the situation. If you have second-hand knowledge of an incident, describe that. What were the short and long term implications for both parties?
    • Talk to someone you trust from a generation older than you are...or even two generations (grandparents). Ask them about incidents. What is the same and what is different from what is at stake in today's business situations?
    • Evaluate your own behavior. 

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  • U.S. soccer loss to Trinidad/Tobago has business consequences


     from Fox Soccer

    The U.S. soccer team will not be involved in the World Cup play-offs for the first time in 30 years. They lost in the men's qualifying event to LAST place Trinidad-Tobago. But Fox Sports was an even bigger loser: 

    "The most notable casualty is Fox, which in 2011 paid a reported $425 million to broadcast FIFA matches — including the 2018 and 2022 men’s World Cups — in English in the United States. Even at a major increase from the combined $425 million ESPN and Univision paid for English and Spanish rights for the 2010 and 2014 tournaments under the most recent contract, the deal at the time fit nicely into Fox’s overall broadcasting strategy."

    Ad revenue is a major issue, as is audience and ad rates for future World Cup competitions. The risk Fox took in entering this contract seemed to be less than it turned out to be, given this upset. When the U.S. team is not involved, soccer audiences in the U.S. are smaller.  This affects future contracts, and may have a ripple effect with interest in soccer by younger players. 

    Source: "Fox Sports was the real loser in the U.S. World Cup qualifying flop," by Alicia Jessop, Washington Post, October 11, 2017. 

    Follow up

    • Read about the Fox deal for the 2026 World Cup. How might this have influenced (or mitigated, or exacerbated) this year's situation?
    • What are the labor law issues that exist vis-a-vis women's soccer as it relates to men's soccer? What doesn't make sense about the issues at stake?  
    • What other businesses may be affected if soccer interest in the U.S. wanes?

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  • Ozark: A Netflix thriller starring an accountant in a multi-cultural setting


     trailer of Netflix series from YouTube

    Ozark's initial reviews described it as being less compelling than Breaking Bad. Thereforein the era of Too Much TV (Forbes), it did not get my attention right away. But a recommendation from a former student got me to check out the first episode. I was impressed by how much Ozark conveyed about accounting and the business relationship to crime. Also, I certainly did not expect a TV show to portray business relationships as vehicles for healing cultural divides.

    The compassionate and complex way characters of all types are portrayed as they interact as businesspeople was a fresh and educational approach. City/rural, rich/poor, millennial/Gen X/Baby boomer, male/female, dishonest/straightforward, gay/straight, foreign-born/multi-generational resident, book-smart/street-smart, liberal/conservative, gun-smart/gun-ignorant, selfish/selfless, religious/non-religious: all find common ground in various business relationships. Different perspectives are portrayed with their own internal integrity. 

    Anyone wanting to expand their business opportunities needs to understand those who are motivated by different goals than they themselves might be. This series, at least in its first season, has shown itself to be a painless way to learn about the needs and motivations of others--as well as provide a cautionary tale about the unintended consequences of stepping out of one's ethical comfort zone. 

    Source: "Ozark: TV Review," by Daniel Fienberg, The Hollywood Reporter, July 17, 2017. 

    Follow up:

    • Binge-watch the 10-episode first season. Summarize what you learned about money laundering. Why is money laundering considered an essential part of a large scale criminal business operation? 
    • How does the main character, Marty Byrde (played by Jason Bateman), exhibit good management skills in dealing with various individuals and groups that are different from him? What can be learned about doing business in a culture that is very different from the one that you are used to (big city vs. rural, in this case). Specifically address how, in episode 10,  he motivates individuals (the Snells and Del Rio) who otherwise would never be in business with each other (as Del Rio points out...). 
    • CPAs are sometimes recruited by the FBI. What specific skills would be useful in solving federal crimes? Read about the role of Frank Wilson in the prosecution of Al Capone, if you need some ideas. 
    • What was the first ethical "slip" that powered the story? What additional ethical slips followed? 

  • Facebook: Time to ask some questions


     Zuckerberg spins Facebook's involvement in politics

    Facebook has been in the news lately--not for its cute baby goat videos, but for its considerable political influence. Mark Zuckerberg's belated and underwhelming response to his company's role in abetting Russian tampering in the U.S election has raised questions about what we as a society have gotten ourselves into. In the New York Magazine article linked below, Max Read asks:

    "What is Facebook? We can talk about its scale: Population-wise, it’s larger than any single country; in fact, it’s bigger than any continent besides Asia. At 2 billion members, 'monthly active Facebook users' is the single largest non-biologically sorted group of people on the planet after 'Christians'—and, growing consistently at around 17 percent year after year, it could surpass that group before the end of 2017 and encompass one-third of the world’s population by this time next year. Outside China, where Facebook has been banned since 2009, one in every five minutes on the internet is spent on Facebook; in countries with only recently high rates of internet connectivity, like Myanmar and Kenya, Facebook is, for all intents and purposes, the whole internet."

    Mark Zuckerberg seems to have been blindsided by what may have been negative (or certainly unforeseen) consequences of Facebook's market penetration and open access. He conceived this business as aligning with this mission: "Give people the power to build community and bring the world closer together." But aren't parts of the world creepier and scarier than many Facebook users would like to be connected to? Moreover, Facebook generates revenue from selling data gathered from its users. And revenue from selling access to its users.

    Who is using whom, exactly?

    Facebook is not the only trans-national internet business that controls access to information as well as information about millions of users. Interestingly, Ad Age asked this question in 2012: "Will Facebook be an internet behemoth in 10 years?" Time flies. Other behemoths include: 

    • Google
    • Amazon
    • Apple

    These internet powerhouses will shape the business environment for decades. As such, the questions about what they are, what they can do, and how they can be understood are well worth the consideration of anyone near the beginning of their own working life. 

    Sources:

    Follow up:

    • Use a time management system (e.g. Forest) to track the time you spend on Facebook+Google over a week or so. What happens when (...or if...) you take a social media vacation? How do you spend your time? Do you have any fears associated with being "disconnected"? 
    • When was the last time you looked at page 5 or 10 of a Google search? What did you find? What about on page 20? Pick five general search topics and report on what turns up at first...and buried a little bit. 
    • How does use of social media reinforce your own political/economic/business/personal belief system? How often are you exposed to ideas different from your own? Do you have a source of balanced information? How do you choose what is true and what to question?
    • If you have time and are interested, read Zuckerberg's Facebook essay, "Building Global Commitment." What does it tell the reader about his plans for Facebook?

    .

  • Dove pulls racially insensitive ad


     looped ad pulled by Dove

    Continuing a sad tradition in soap advertising, Dove posted an ad on Facebook this week that was racially insensitive. It morphed a woman of color with a "dirty" brown shirt into a white woman with a white shirt. On social media, a segment of the ad was converted to a .gif that replayed the transformation again and again, drawing attention to the bad advertising choice. 

    Whenever I see ads (or films, or scenes on TV) that seem ill-advised, I try to imagine what the conversations in the decision-making rooms must have been like. What were they thinking? Did no one notice the problem? Or were people reticent to speak up? 

    Although Dove did react by pulling the ad, and issuing a statement and an apology, I think it would be more instructive if they had been transparent about the decision-making process. This might be helpful in preventing future mistakes. 

    Source: "Dove Drops an Ad Accused of Racism," by Maggie Astor, New York Times, October 8, 2017. 

    Follow up

    • List other ads that have implied or overt racism. (check out "Related Coverage" at the NYT link, as well as the article.) Explain the problem in the ad and describe how the company and/or the public reacted.
    • Research and describe ads that have been found to be insensitive to gender issues, religious issues, sexual preference issues or otherwise insensitive. What has been the reaction to these ads? What, do you think, was the intent of the advertiser? How did things go wrong? 
  • Cubicle or phone booth? Workplace options


     ad for a workspace phone booth option YouTube

    The open-plan cubicle layout for office workers has certainly become a classic design. But not everyone works most efficiently in this setting. Also, some transactions require more privacy than a cubicle can provide. Nevertheless, space is still at a premium and there are reasons to not give everyone their own permanent office.

    Enter an office space that looks like a phone booth. Just like a phone booth, it is not a permanent home, but it serves its purpose when needed. 

    Also included among the options for the modern flexible office are:

    • Couches
    • Moveable walls
    • Standing desks
    • Team workspaces

    I miss seeing phone booths on street corners...maybe they might find a new home in offices everywhere.

    Source: "Don't Get Too Comfortable at that Desk," by Steve Lohr, New York Times, October 6, 2017.

    Follow up

    • Describe your most productive work space. Include time of day, layout, noise level, proximity to others, access to internet and any other variable that you can think of. 
    • If you were managing ten people in a deadline-based environment, how would you like to arrange THEIR workspaces. Comment on how and why this is the same as or different from the ideal work space you previously described.

    .

  • Retail chain bail-outs doomed by private-equity investors


     from CNBC

    Retail chain stores have been suffering--internet sales are eating into ground-based stores more each year. Private equity firms have purported to come to their rescue by restructuring their debt in leveraged buyouts. The problem is, the restructured entity has more debt than it had before, and meanwhile, the private equity managers have skimmed off transactional fees. The zero-based budgeting that is typical of such takeovers cuts costs without giving any thought to the pre-existing company's culture.

    Toys-R-Us has been a recent victim of this trend--Kohlberg Kravis Roberts, Bain Capital, and Vornado Trust bought it up in 2005. Now, Toys-R-Us is in the process of filing for bankruptcy prior to one last try to remain in business by making the most of the upcoming holiday sales possibilities. According to Rosemary Batt, co-author of Private Equity at Work: When Wall Street Manages Main Street, “Debt is the lifeblood of the private-equity firm, but it also sucks the life out of companies.

    Source: "Toys-R-Us and the Trump Voter," by Sheelah Kolhatkar, New York Times, October 9th 2017 print issue, where it appears as "Played Out."

    Follow up:

    • What other struggling companies besides Toys-R-Us have faced bankruptcy or death after investment by private equity companies? What happened?
    • How do private equity investors make their money? How do stockholders usually make their money? (cite an ordinary income stream and a capital income source)

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