The Case for a Liberal Arts Education

I am sometimes asked – and I don’t know why – what course of study I recommend for college students wishing to become successful in business. My answer usually provokes skepticism if not scorn. I recommend liberal arts. In the age of the Internet and the new economy, specialized technical knowledge is revered. Most of those who ask my opinion figure I’m going to say something like “computer programming” or “communications engineering.” In fact, I think that type of education is the least likely to put you at the top of your field – either as an entrepreneur or as a corporate climber. There are several reasons. First, technical knowledge is temporary. The trendier the technology, the faster it changes. …

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The Worst Thing I Ever Said to Laura

For years, Laura came to our seminars, sitting in the front row, taking notes and looking earnest. And at least once during each of those seminars, she’d pigeonhole me to tell me something she didn’tlike about my presentation. A great consumer of self-help and get-rich literature, Laura always had some shiny new idea about wealth building that she believed I should be talking about instead of the “same-old, same-old” axioms I was then and still am espousing. One year I remember her excitement as she explained “the law of attraction” to me.  Another year her big idea was networking. Still another she was all about multilevel marketing. I always listened and thanked her for her thoughts. Then I redirected the …

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The Virtue of Laziness

 

Speed Up Your Career by Indulging Your Lazy Gene

The unpaid bills are stacked next to the unwashed dishes. You’ve been short about $1,200 per month since the divorce.

You need something to fill that now-a-memory, two-income cash flow gap. Something that’s not a pipedream. Something that’s feasible, flexible, and powerful. Something capable of producing more dollars per hour than you’ve ever made in your life.

It can’t be a financial investment, because you’ve don’t have enough in the market to make a big difference. So what can you do?

Before shutting down your computer for the night, you check your email. You see an advertisement. But before you delete it, you notice something in the message about extra income. “What the hell,” you think.

You click on the link and it takes you to a landing page titled “The Extra Income Project.” It’s a promotion for a collection of two dozen lessons, each one a different way to make extra money by working part-time from home. The author is someone named Mark Ford, said to be a best-selling author and a self-made multimillionaire. You’ve never heard of him. Still…

You order the EIP program. It arrives immediately, and you spend the rest of the evening looking through the lessons. One of them – “Service Businesses” – is particularly interesting. “Compared to other side businesses, a service business has the lowest barrier of entry,” this Mark Ford character writes. “It can be started with the simplest marketing methods, requires little to no start-up capital, and is likely to put you into business faster than any other sort of enterprise. The one requirement: You must be capable of doing high quality work.”

“I can do that,” you think.

Ford then lists several dozen service businesses, each with a short but helpful description of its benefits and drawbacks and income potential. Under “Landscaping Business,” you read: “This is a great business for people that don’t mind waking up early, enjoy working outdoors, and don’t mind getting their hands dirty… at least for a while. The income potential begins at about $25 an hour and can increase to $100 or more once you have a customer list of a few dozen people. If you are good at managing schedules and workers and do great work, this can easily become a business that makes you six figures.”

“I can definitely do that!” you think.

The next day, you spend $23 to print 500 colorful flyers advertising your new business. You use a variation of one of the pitches suggested by Ford:

Landscaping With Love

I’ll Make Your Lawn the Best

In Your Neighborhood, Guaranteed

First Service Only $10!

The $10 offer is an advertising trick – a “loss leader,” to prove what you can do.

It works. You get six responses in week one and land two Saturday gigs. By week four, you have $380 worth of weekly contracts. Your Saturday is now a workday, but you’re making an extra $1,520 per month.

You do good work, so you start getting referrals. You can, if you want, make even more money by working Sundays. That’s money you could use to lease a new car and maybe buy some new clothes. You’d have some left over for saving.

But do you want to work seven days per week? Hell no. You’re 52, not 22. You want the money but not the work.

There is a “Recommended Reading” section of the EIP program that lists several books that promise to “take you to the next level.” One is called Ready, Fire, Aim. It’s by the same author. Mark Ford. You order the book.

 To Hire or Not to Hire, That Is the Question

After reading the book, you think about your situation. You’re making an extra $1,520 per month by running your own part-time landscaping business on Saturdays. You’re tempted to expand it, but you aren’t willing to work seven days per week. The book has given you the obvious solution: Hire help.

But is it worth the cost and hassle?

Following the book’s guidelines on “analyzing growth opportunities,” you sit down with a pen and a sheet of paper and make two lists, one marked “plus” and one marked “minus.”

On the minus side, you include things like “the trouble of finding someone” and “managing people” and “figuring out the right compensation,” and so on.

The more you think about it, the longer the “minus” list grows. And yet you can’t think of anything to add to the “plus” list aside from “do less work” and “maybe make more money.”

You think, “This is exactly why I never wanted to have my own business. It’s just one long list of worries and concerns. Maybe this Ford guy is more smoke than fire.”

So you decide against hiring help. Instead, you accept a few jobs to do on Sunday mornings. You’ll make another couple hundred per week, and still have Sunday afternoon to relax.

A month later, you realize that you didn’t take into account rainy days and the occasional “Can you come back tomorrow?” You are making more money but working every sunlit hour of every weekend. It is wearing you down. It’s even affecting your performance at your weekday job.

You do the math. Doing everything yourself, you’re making about $50 per hour. You can hire someone to do the grunt work and pay him/her maybe $15 per hour. The difference, $35, would be your gross profit.

There would be some additional costs involved in growing your business, too. Taxes, for example. And you’d probably have to hire an accountant. But on an hourly basis, that couldn’t be more than, say, $5. That leaves you with a gross profit of $30 for each hour’s work.

That’s $20 less than you are making now. But overall, you’d be making about $1,800 per month instead of $1,500 while personally working the same number of hours.

It makes sense. But how do you make it happen? Where can you find a good worker?

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What I’m Doing With My Money Now and for the Rest of 2018

Consult an expert, if you like experts. Talk to your broker. Read your broker’s “research” recommendations.

But don’t ask me what you should be doing with your money right now.

I have no qualifications as a financial advisor. No certificates. No degrees. I’ve never taken a single class in economics or accounting…

I’ve read a few books – ones that came highly recommended.

And yes, I was an advisor to and publisher of investment advice for nearly 40 years….

Which gave me an inside view on how the business works and a contact list of several dozen of the best-known stock analysts in the world. I know how they work and I’ve seen the results of their work, good and bad.

I keep tabs on the best of them. And incorporate the recommendations of a few. But when it comes to making decisions about what do with my (now my family’s) money, I follow my own rules.

My rules are not for everyone. So you may decide that they are not for you.

But if, like me, you are a timid investor…

If, like me, your fear of losing money is greater than your greed…

And if you are willing to work hard to make sure your active income is always increasing… every week and every month and every year…

Then you may be interested in knowing some of these rules that I follow and what, in particular, I plan to do with my money this year.

I have several dozen rules. Here are 10 of them:

  1. I don’t Invest in anything I don’t fully understand.
  2. If I am determined to break rule number one, I admit to myself that what I’m doing is gambling, not investing. And I proceed fully expecting to lose every penny I put on the line.
  3. I would never put all my savings into stocks or even into a portfolio of stocks and bonds. I have my money allocated in at least a half-dozen asset classes at all times.
  4. I don’t try to get from any asset class (stocks, bonds, real estate, commodities) or subclass (blue chip stocks, growth stocks, etc.) more than 10% to 20% of its natural (historic) rate of return. When someone recommends an investment “sure to” do much better than that, I steer clear.
  5. Before investing in anything, I have a Plan B in place. A proper Plan B is a pre-set (and if possible automatic) protocol that cashes me out of the deal as quickly as possible and with the least amount of damage.
  6. As a rule, I don’t invest in growth stocks. I prefer buying shares of world-class, income producing, Warren Buffett type companies that I feel confident will still be strong in 20+ years. And I do not sell these stocks in market downturns. I often buy more of them in order to “average down” my buy-in price.
  7. I devote the largest portion of my portfolio to income-producing real estate properties and use a trusted partner to manage them.
  8. The next largest slice of my investment pie goes to private businesses – either in stock or debt or convertible debt. When considering such investments, I ask myself how well I understand it and whether I have some control or at least influence on management should they take actions that seem wrong to me. (And I have my Plan B.)
  9. I don’t “invest” in hard assets or currencies because I don’t consider them investments. (They have little or no intrinsic value, do not produce value, and do not earn income.)
  10. I never invest more than a very small portion of my net investible wealth (net worth minus my house and other things I don’t intend to sell) in any single investment. (Long ago, my limit was 5%. Now it’s 1%.)

Now it’s time to tell you what I’m doing with my money this year.

Read MoreWhat I’m Doing With My Money Now and for the Rest of 2018

How to Protect Yourself From the Next Global Economic Collapse

I wrote the following essay a while ago. It was recently published in Laissez Faire Letter https://lfb.org and I thought I’d reprint it here because it’s relevant…

By Mark Morgan Ford

Making good investment decisions is both a science and also an art.

You can, for example, track the performance of investment sectors, fund managers, and even investment advisers with precision. You can see their successes and failures with precision. But past performance, as we all know, is no indication of what will take place in the future.

You can calculate with reasonable precision global money flow, governmental and personal debt, unemployment, the gross domestic product, and so on.

But these data combined won’t tell you with any certainty what and when some macroeconomic event might happen.

The problem is twofold. The global economy is so damn big and complicated, and humanity’s response to economic shifts is equally complex. And this is to say nothing of “black swans”—unexpected and random events that cause major turmoil.

Which is to say that, for practical purposes, anticipating the future is impossible.

Still, as lowly investors, we must try. We must make regular buy, sell, and hold decisions about investments we own. And we must make general judgments about the market in order to assess our holdings.

I’ve been in the financial publishing business for more than 35 years. In that time, I’ve worked with many of the best investment writers and followed their advice. I’ve even been able to see unpublished analytics that track their performance.

I’ve concluded that most haven’t a clue about the future. But there are some who are actually very good at making specific investment recommendations over periods of time ranging from five to 15 years.

There are also some who are very good at big-picture economic analysis. By very good, I mean they are able to write arguments that convince me, a skeptic.

Of those few that are good, about half are perennial optimists. The other half, of course, are perennial pessimists.

What I do is this…

I read the best big-picture writers I know—not to “know” what the future holds, but to get a sense of what might happen. Then, I look to the specialists for specific advice that would apply.

Around 2004, my favorite big-picture pessimists were predicting a collapse of the real estate market, the dollar, and the stock market. They predicted a serious economic recession as a result of the insanely overvalued real estate market and the government’s love affair with paper money.

The optimists were saying not to worry.

I found the pessimists—especially my colleague and business partner Bill Bonner—more convincing.

So what did I do?

Read MoreHow to Protect Yourself From the Next Global Economic Collapse

The Most Interesting Ad in the World

Do you remember the Dos Equis commercials about The Most Interesting Man in the World?

They were very big for a long time. They may still be running. I can’t say. I don’t watch TV anymore.

If you haven’t seen them, imagine this: A rugged-looking, silver-haired man who is always surrounded by beautiful women. In one version of the commercial, he arm-wrestles a Banana Republic dictator. In another, he releases a grizzly bear from a trap. In still another, he explains that even his enemies list him as their emergency contact and that the police often question him just because they find him interesting.

Fun stuff… and memorable… but not exactly original.

If you are a student of advertising, you know this is a knockoff of David Ogilvy’s famous ad campaign: The Man in the Hathaway Shirt.

That was a great one. With a great story behind it…

It was 1951. Ellerton Jette, a shirtmaker from Waterville, Maine, had the crazy idea of growing his little local business into a national brand.

How could he do that?

He had no clue. But he had an idea: He had heard about the advertising prowess of David Ogilvy. So he booked a meeting with him.

“I have an advertising budget of only $30,000,” he told Ogilvy. “I know that’s much less than you normally work with. But I believe you can make me into a big client of yours if you take on the job.”

If he’d stopped there, Ogilvy would have thrown him out of the office. But then Jette said something that sold the great salesman.

He said, “If you do take on the job, Mr. Ogilvy, I promise you this. No matter how big my company gets, I will never fire you. And I will never change a word of your copy.”

Stop right there…

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When It Comes to Your Career, Reading Matters

A Tactical Approach to Reading More Profitably

I don’t have time to prove this to you. If you don’t already understand it, don’t bother to read on. You’re a goner.

What I don’t have time to prove is the title of this essay: The idea that when it comes to having the career you want to have, there is nothing more important than reading.

I don’t care how smart or ambitious you are. Or whom you know. Or how hard you are willing to work. Unless you are prepared to spend an average of at least two hours every day reading and self-help books, you will never – NEVER – rise to the top of the field.

Yes, you can punch out an ordinary career with some exciting ups that result partly from relentless effort, partly from beating up on people, and mostly from luck. But business has never been more competitive. And information has never traveled so fast. If you don’t read – intelligently and constantly – you will not be able to compete at the highest levels.

Read MoreWhen It Comes to Your Career, Reading Matters

Why You Need a Good Editor, or… How to Edit Yourself When You Don’t Have One

His email was clever and funny. So too (I thought) was my response. I put the two together and sent it to my editor as a witty brief for publication in this little blog.

“I think this is pretty clever,” I wrote, “but I may be kidding myself. I know that sometimes I’m too close to my stuff to know.”

She wrote back: “You’re kidding yourself.”

Here’s the thing: I’ve been trying to “become a writer” since I was in grammar school. I’ve published more than two dozen books and more than a thousand essays. For the last 17 years, I’ve been writing every day. And yet 90% of what I write is garbage.

By garbage I mean not worth saving, let alone publishing.

Today, thanks to the Internet, it’s easier than ever to become a published writer. If you can’t get your work published by any one of the tens of thousands of websites that publish content every day, you can create your own website and self-publish.

But that presents a problem. It’s easier than ever to publish garbage.

In the “old days,” it was difficult to have your work accepted for publication. And if you did, you still had to go through a gauntlet of revisions mandated by an editor – someone whose job was to make sure no garbage went to press.

But these days, very little revising is being done. And that’s because most writing is published without the benefit of a good editor.

I happen to have one. She’s been editing my work – my business essays, my books, my fiction and my poetry – for more than 25 years. I’m lucky. Most writers don’t have that benefit.

What if you don’t? What can you do?

Read MoreWhy You Need a Good Editor, or… How to Edit Yourself When You Don’t Have One

The Exposure Explosion

You Think Sexual Harassment Is News? Really?

Men – mostly powerful white men – are being exposed as sexual predators. They are being punished by losing their jobs, their reputations, and, in some cases, their families and friends.

Like the presidential election, it is freaking people out and polarizing the population.

First it was Harvey Weinstein. Then it was Louis C. K., Kevin Spacey, Al Franken, John Conyers, and (gasp!) Matt Lauer.

Hardly a day passes without another well-known name being added to the list. And it’s not just celebrities and politicians. Gavin Delahunty, chief curator at the Dallas Museum of Art, resigned after allegations of inappropriate sexual behavior. James Levine, the world-famous conductor, was suspended by the Met Opera after three men accused him of abusing them when they were teenagers.

The liberal press was the first to jump on the “news.” Conservative commentators were initially quiet on the subject, but began speaking when a significant number of the accused turned out to be liberals.

So we are all talking about it now.

It was never really acceptable. But some of it sort of was.

For the first 30 years of my life, sexual harassment was not something people talked about. I doubt if the phrase was even used until the 1980s when workforce regulations and laws were put into place.

As for “inappropriate behavior” creating a “hostile work environment” – I don’t remember that being an issue until around 2000.

But for what we might call “hard core” sexual harassment – trying to exchange workplace rewards for sexual favors – that was always considered repulsive. It was also, however, regarded as somehow “to be expected,” at least in Hollywood and on Wall Street.

How many cartoons have been published over the decades – even in dignified liberal-leaning publications such as The New Yorker – depicting the Hollywood powerhouse and the starlet on “the casting couch”? Or the boss chasing the typist around the room?

A young person today might well wonder why this sort of behavior was considered a laughing matter.

One reason, I think, is that there was, until relatively recently, a very different view of male and female roles when it came to sex.

The man’s role was to pursue the woman. The woman’s role was to be pursued.

The man was expected to want to have sex whenever he could get it. The woman was expected to refuse a man’s sexual advances, and to make only small and gradual allowances depending on her assessment of his attractiveness and worthiness. (Not necessarily in that order.)

Women who initiated sex or said yes too easily were considered whorish. Men who were persistent in asking for sex were considered normal – “red-blooded” at the worst.

And now, as the exposures and admissions and expulsions continue, it is pretty much impossible for anyone to pretend that this double standard has not been a real and serious problem since… well, certainly since the Mad Men days. Arguably since 1492.

So why does it feel like sexual harassment in the workplace is something new?

Until recently, the behavior that men are now being punished for was accepted… or at least ignored. And as long as it was ignored, some men felt that it was somehow okay.

I can think of several contributing factors:

  • Although it has always been illegal as well as reprehensible to rape, fondle, or act out sexually in front of one’s colleagues and employees, there was always some allowance given for the lesser of these offenses when the victims were single women – i.e., not some other man’s wife.
  • And when it came to Hollywood and Wall Street, the idea that a powerful man might persuade a single (i.e., available) woman to grant him some sort of sexual pleasure by offering career benefits was considered a form of mutual consent. (After all, the woman could always say no.)
  • Casual sex – i.e., sex outside of marriage – has gradually become thought of as ordinary. And the idea of a woman having such sex has evolved from something to be ashamed of to something she has a perfect right to.

So how far can a man go?

Read MoreThe Exposure Explosion