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June 1-June 5, 2020 

 

a look back at this week’s essays… 

 

How to Be Happy With Your Money 

When I had no money, which was the case for the first 30 years of my life, I resented [the notion that money doesn’t buy happiness]. It seemed a glib sentiment expressed condescendingly by those that had to those that had not…. That was then.

 

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Hiring Someone to Grow Your Business:

The 7 Personality Traits of a Superstar Entrepreneurial CEO 

Running an entrepreneurial business is very different from running a mature one. A mature business needs to be managed. An entrepreneurial business needs to be grown.

 

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Black Lives Matter 

Black lives matter. What does that mean?

 

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quick quiz 

 

  1. How much do you remember about this week’s “Words to the Wise”? Use each of these words in a sentence: 

 

*  ephemeral (6/1/20)

*  bromide (6/3/20)

*  insouciant (6/5/20)

 

  1. Fill in the blanks in this week’s quotations: 

 

* “He that is of the opinion that _____ will do everything may well be suspected of doing everything for _____.” – Benjamin Franklin (6/1/20)

 

* “A _____ is one who knows the way, goes the way, and shows the way.” – John C. Maxwell (6/3/20)

 

* “We can no longer ignore the fact that America is not _____.” – Fannie Lou Hamer (6/5/20)

 

  1. Are these statements True or False? 

 

* People who drink and smoke are more likely to have a problem with snoring. (6/1/20)

 

* Since the shelter-in-place strategy was implemented, calls to suicide lines have increased by as much as 1000% in some states. (6/3/20)

 

* Unarmed blacks are killed more often by police than unarmed whites. (6/5/20)

 

 

 

recommended links from this week’s blog 

 

* “Could the CDC Make That Mistake?” – To read the article, click here.

 

* “70 Step Basketball Trick Shot” – I’ve watched a number of these ingenious games… devices? But this has to be the best. Here

 

* The latest issue of Independent Healing Click here to read the June issue.

 

* How to build the perfect squirrel-proof bird feeder…Here

 

* Must Watch: “Woman gives powerful speech to looters on streets of NYC” Here

 

 

Q&A 

 

Your Question: 

 

What is your opinion on contractor vs. employee?

 

My Answer: 

 

With one exception, I don’t have a strong opinion on contractor vs. employee. To me, it’s a payroll and tax consideration.

In the past, I’ve recommended that certain creatives – like copywriters and editors – be put on a contract basis because I felt they’d be more productive if they were paid by the job. I don’t buy into the idea that creatives need to be in physical proximity to one another. I know the theory. I don’t see it working in practice. What I see are people in cubicles that communicate with one another by email or text. The only time they actually get together is for meetings. (I now believe I prefer Zoom meetings to flesh-and-blood meetings.)

As for marketers and their assistants, I suspect that the employee relationship works better because they need to be communicating with one another, often in small, impromptu groups, to keep things moving. This is just a hunch, though.

As for data entry people and other piecemeal workers, freelance, remote contracting seems like it should usually work.

The only group that I think should definitely be employees and also in the office (and early) are the company’s leaders and those that directly report to them.

 

Have a question for me? Submit it on our Contact Us page. 

 

 

For a look back at the stock market, click here

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“He that is of the opinion that money will do everything may well be suspected of doing everything for money.” – Benjamin Franklin

 

How to Be Happy With Your Money 

It is often said that money doesn’t buy happiness.

When I had no money, which was the case for the first 30 years of my life, I resented that notion. It seemed a glib sentiment expressed condescendingly by those that had to those that had not.

It was also an idea that I didn’t want to hear. I was on the threshold of a 20-year crusade to make money – as much money as I possibly could. If my ambitions had been to be an actor and some Hollywood celebrity said acting wasn’t all that it was cracked up to be, I’d have felt the same way. (“You’ve done it. And you have it. I haven’t done it and I don’t have it. Yet. So don’t get in my way!”)

That was then. Now, so many years later, I have more money than I ever imagined I’d have. And guess what? I’ve come to the conclusion that the “money doesn’t buy happiness” cliché, like most clichés, is true.

Don’t take my word for it. There have been countless studies to support this thesis. And virtually all of them conclude the same thing: Once you have enough money to pay the bills, go to a restaurant now and then, and take a vacation once or twice a year, having more money doesn’t make you happier.

But I didn’t know this when I was wearing hand-me-downs in high school. And I didn’t know it when I started my career.

From 1982 to about 1998, I spent 60 to 80 hours a week working my ass off to make and save money. I approached those objectives with monomaniacal intensity. And largely because of that (I had no natural genius for business), I was successful, moving my net worth from zero to nearly mid-eight figures in 16 years.

During those years, I had countless pleasurable moments. But I can’t say I led a generally happy life. I was frequently excited, inspired, and impassioned. But I was also frequently on the verge of depression and despair.

Whenever news of some famous guy offing himself grabbed the media’s attention and people were asking “why,” I said nothing. But I got it.

In the winter of 2000, I started writing about wealth building in Early to Rise, an ezine I published for 10 years. One of the subjects I researched and wrote about on and off throughout that decade, was the relationship between money and happiness. And it was almost always about the wisdom of the money-doesn’t-buy happiness cliché.

But that didn’t stop me from continuing to make “getting richer” my number one goal in life.

 

Finally, the Realization 

Then one day when I was vacationing with K in Rome, I had a life-changing moment. We were crossing a bridge over the Tiber River, and I was lost in thought, worrying, as usual, about some business deal, when K stopped. She said something, but I could not hear her. This was not the first time that happened. It had happened a thousand times before.

I asked her what she had said.

“I was thinking about how much I’m enjoying this trip,” she said. “And I asked if you were having fun.”

“Right,” I said. “Fun.”

And then I thought, “Wait! What am I doing? Enough of this! I’m not going to spend any more time oblivious to the world around me, thinking only about how I can get richer than I already am.”

And I meant it. When we got back to our hotel room, I opened my laptop, went to my yearly list of long-term priorities, and moved “financial goals” from the top to the bottom of the list.

It wasn’t a miracle cure, but it was a start. For the first time, I was able to let happiness seep into my life, a drop at a time.

 

An Unexpected Extra 

Oddly, though, despite the fact that I was no longer fretting about adding to my wealth, my net worth continued to increase. In the 19 years that followed that walk over the Tiber, it doubled and then doubled again.

What happened was this:

I continued working because I liked the work I was doing. I continued to make plans and negotiate deals and create products and develop marketing strategies. But I did it with a different mindset. I set objectives and pursued them, but without caring about whether I accomplished them or not.

My 30-year-old self would have considered that last statement to be another case of condescending bullshit, but it didn’t feel like bullshit. It felt real.

What I finally figured out was another cliché, a biblical adage (Timothy 6:10) that is often misstated. The misstatement is: Money is the root of all evil. The actual statement is: For the love of money is the root of all evil.

I interpret that this way: If you can work towards building your wealth without attaching yourself emotionally to the goal, you can have your cake (gaining net worth) and eat it too. (Don’t worry! Be happy!)

In other words, if you accept the fact that money won’t bring you happiness and that desiring it will bring you (and those around you) myriad forms of pain, you can rid yourself of the ambition of forever acquiring more.

Let’s say you want to retire. You hate the work you’re doing and you want to quit as soon as you possibly can.

So you do this: You figure out the lowest possible amount of money that you need in your retirement account to live comfortably ever after. And you promise yourself that when you reach that “magic number,” you will quit your job.

By accepting the fact that more money won’t bring you more happiness, you won’t be tempted to ratchet that number up when you reach it. (As I did about a half-dozen times.)

Then you get back to work. And you work with a purpose. But your purpose will no longer be to earn more and more money. Your purpose will be to do a really good job until you reach your magic number.

I know this may sound like nonsense. If you think so, I believe it’s because you haven’t tried it. If and when you do, I believe you will find – as I did – that you will work better than you ever did. And as a bonus, you will enjoy your work much, much more.

 

Sometimes, Money Really Can Buy Happiness 

There is another thing you should consider doing: Rethink the way you are spending the money you earn. When our hearts are attached to dreams of making lots of money, we tend to spend what we have in foolish ways.

You may have heard the argument that people generally get more long-term pleasure out of spending money on experiences rather than things.

The first time I heard it, I was repelled by it. It seemed illogical. Experiences are ephemeral, I had always believed. You have them and they are gone. Poof! But things – ah, things last!

It didn’t take me too long to realize the fallacy of this logic. Experiences can last. They can last a lifetime. And the pleasure they bring can be deep. Things usually bring a lot of immediate pleasure, which ebbs over time. Eventually, your things might give you no pleasure at all.

So I resolved to spend less on things and more on experiences. And that has worked wonderfully well.

For example, I long ago discovered that I was getting very little extra pleasure from the collectible  cars I owned. The excitement I had driving them the first year or two had disappeared. Today, I want my cars to be comfortable and low maintenance. I still have a 1989 NSX, which I rarely drive. But the rest of my collectible cars are long and happily gone.

On the other hand, the art I own gives me pleasure all the time. It is not the art itself, the thingness of the art, that I enjoy, but my experience of enjoying it every day. So I continue to buy and sell art, always in an effort to improve the quality of my collection, because the experience of doing so gives me lasting pleasure.

I’ve also discovered – and this should not surprise you – that I can “buy” a considerable dose of happiness by spending my money on other people. Instead of buying a new car for myself, for example, I’ll buy one for my sister or lease a car for a friend that needs one.

In fact, when I think of the money K and I have spent over the years, there is no doubt that the greatest yield came from the financial help we’ve given to family and friends in need and to our Community Center in Nicaragua.

Still doubtful? That’s okay. I spent many years where you are – and I’m glad I lived beyond them. I wish the best for you.

 

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LA Story and More on the Challenge of Charity 

One was refusing to eat. The other was smearing yogurt on her face. The toast was burning. And Baxter, the 160-pound mutt, was humping my leg.

Of all the childrearing experiences we’ve been reliving on this trip to LA, getting the grandkids off to preschool in the morning has been the most traumatic.

By the time the twins finished breakfast, most of the food was on the table. We had an hour left before they had to be in school. They hadn’t yet bathed or dressed. And they were still hungry. What to do?

Welcome, yet again, to my morning slog, where I work out problems, big and small, including those I’m having with the 28 books on my to-finish-before-I-die list.

On Monday, I shared the first part of an essay I’ve been working on for one of those books – The Challenge of Charity. Here’s the second part.

The Challenge of Charity: A Good Reason to Say No 

I not only had a philosophical objection to giving my friend the $50,000 he asked for, I had a pragmatic reason.

The money he was asking for was intended to cover a years’ worth of expenses for his non-profit – the cost of hiring mentors and providing various services to the ex-convicts the program was helping.

Giving him the money would not have fixed the problem. At best, it would have pushed it off for another year.

I asked him if he was looking to build an endowment for his program. He said he hadn’t thought about it.

“But you don’t want to have to go to the trouble of raising 50 grand every year,” I said. “You don’t want that kind of stress, do you? And what about when you die?”

He shrugged his shoulders.

The Endowment Decision 

When I got into the charity business, I told him, I was funding projects the way he was about to fund his, covering expenses a year at a time. I did that without thinking much about it because I was in my 50s and death was an insubstantial theoretical. I was earning good money and enjoying my work. Contributing a portion of my earnings every year was easy. A no-brainer.

But when I hit 65, I had to face the fact that I would not live forever. More importantly, that before I died, I would probably be making changes that were likely to drastically reduce or end my income from working.

It was then that I realized I needed to establish an endowment. I needed to start an account that would be owned by our family foundation, but legally segregated and dedicated to funding the yearly expenses of the charities we were supporting.

I have a similar view of the businesses I’m in involved in. When it’s  a business that I like (and I’m proud of), I get sentimentally attached to it. I want to see it grow and prosper. I want to do what I can to ensure that it will be around.

It’s not easy to do this with a business. You have to work to ensure that it is “anti-fragile.” This means populating its leaders with quality people – growers and tenders that have the same aspirations as you. It’s also a good idea to segregate some of the yearly profits into a war chest that can take the business through hard times. In my mind, that war chest is like an endowment for a charity. It needs to be large enough to cover significant unexpected expenses. It also needs to be protected from people in the future that could spend it unwisely.

Why Endowments Make Sense 

“If,” I told my friend, “instead of raising money to cover the budget every year, you were able to build an endowment large enough to support yearly expenses from dividend distributions… then once the endowment were fully funded, you wouldn’t have to worry about yearly fundraising. You would know that your program would continue in perpetuity, even after you are gone.”

“Wouldn’t it be nice,” he said.

So I explained what I had learned about endowments. The first and most important point is about how much you need to pay for the program you are running.

For example, FunLimon (our family’s community development center in Nicaragua) has an annual budget of about $150,000 a year. That number will go up as we add a few more buildings and programs that we are currently implementing. I’m guessing the final budget will be about $200,000 in today’s dollars.

How much do you need to fund $200,000 in annual expenses?

Well, it’s not $2 million (as I naively thought, for a happy moment, when the idea of an endowment first came to mind). Two hundred grand is 10% of $2 million, and the stock market has a long-term history of yielding ROIs of 10%. But the stock market is volatile. And taking out anywhere near 10% would be disastrous. The conservative number is somewhere between 3% and 5%.

I decided on 4%. And 4%, as you know, is a 25th of 100. That means the endowment must be 25 times larger than the $200,000 yearly budget. It has to be at least $5 million. To be safe, I set the target at $6 million.

“The good news,” I told my friend, “is that your budget is only $50,000. That means you only have to raise $1.25 million to fund your endowment.”
He didn’t react. Perhaps he was shocked.

Why Endowments Are Attractive to Big Money 

So I kept the (by this time one-sided) conversation going.

“But here’s something I have learned about raising money for charitable programs,” I said. “Sophisticated businesspeople and investors understand the value of financial war chests. They are much more inclined to contribute mega-bucks to endowments than to covering yearly expenses.

“This is also true for large non-profits that allocate money for smaller programs,” I said. “They are more likely to write million-dollar checks for the endowments of worthy programs than for transactional programs, however worthy they may be.

“There are billions of dollars out there right now in funds looking for charitable investments. If you could put your energy into getting some of them to help you fund your $1.25 million endowment, I can’t imagine you wouldn’t be able to have it fully funded in just a few years.”

We talked about how he could do that, how he could identify possible donors and present them with the right kind of pitches, proposals that would fit into their stated purposes. Writing such proposals is not rocket science. And I pointed out that there are lots of books and reports and experts out there that could teach him how to do it.

The takeaway – for me, at least – is that if you want your for-profit business or non-profit charity to survive you, you need to figure out how to (gradually) create a financial war chest that is at least 25 times your yearly nut.

Problem solved. So now, back to the kitchen table… 

I don’t know how I thought of it, but I remembered an interview with Marie Kondo, the adorable author of The Life-Changing Magic of Tidying Up and star of “Tidying Up With Marie Kondo” on Netflix. The interviewer asked Kondo how she had time to do everything she was doing and take care of a house and two small kids.

Kondo said that she had taught her kids to do their own chores. The interviewer was skeptical. These were three-year-olds (like our twins). But Kondo said that they actually liked cleaning up. They even sorted their own clothes, folded them, and filed them neatly, Maria-Kondo-like, in their wardrobes.

So I brought a spray bottle of window cleaner and a roll of paper towels over to the table and challenged the twins to clean it up themselves. One was reluctant. The other took the bait. Two minutes later, the other one wanted in. Five minutes after that, the table was squeaky clean.

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