Finding and Mastering Fulfilling Work

Live Out Your Calling as an Artisan

Originally in ForbesYou likely feel as though you don’t have enough time to watch a video that is 17 minutes and 47 seconds, right? But what if watching it allows you to penetrate beneath the scar tissue of busyness and distraction and transform your view of work and the satisfaction you derive from it? Would it be worth it, then?

If you’re willing to watch the video, please feel free to stop reading here, because I’m convinced that, though seemingly out of context, you’ll get the point by the end of the video—the point that there’s a vastly different, far more rewarding way to do what we call “work” than what most of us have been taught and have experienced. It’s the work of an artisan.

craftsman working on stone isolated on hands

But first, a bit on the evolution and etymology of work: What’s the difference between a job and a profession? I ask this question more than you’d think, and the summary response I receive is, “A job is something you have to do while a profession is something you want to do. A job is a necessity—it puts food on the table—while a profession is something that you train for and build over time.”

Fair enough. What, then, is a vocation? The answer I hear most often is, “It’s a calling.”

Long thought to be the exclusive domain of pastors, priests and rabbis, it was actually a “man of the cloth” who invited me to consider that anyone—everyone—is worthy of a calling and in possession of a unique blend of skills and proclivities to be utilized in the service of their community, even if such a pursuit would more likely receive the label of secular rather than sacred.

That was a liberating thought to me. I didn’t feel called to the ministry, but I loved the notion that my purpose could be just as important as those who were in the soul-shaping business.

Although I don’t believe that one’s calling is always/only found in paid work, I dedicated myself many years ago to perpetually working toward work—a profession—that I felt I was made to do. (I’m getting there.)

Os Guinness, the great-great-great-grandson of legendary brewer Arthur Guinness, says our calling “… is ‘the ultimate why’ for living, the highest source of purpose in human existence.”

As much as I love a pint of his forefather’s handiwork, and Guinness’ poetic description, I fear that its grandiose implications may intimidate the skeptics among us. So in my book, Simple Money, I offer a list of features I’ve found consistent in those who clearly seem to be living out a higher-than-average purpose.

An activity, role or pursuit might be your calling if the following are true:

  • You can say without hesitation, “I love doing this.”
  • You’re good at it.
  • It’s life-giving—the activity generally doesn’t tire you (mentally, at least).
  • The activity is consistent with your values.
  • Your goals are complementary to your calling (and vice versa).
  • You’ve received recognition from multiple sources that this is “your thing.”
  • It benefits others.

(For more on this, see Chris Guillebeau’s practical new book, Born for This.)

But I think there’s a step even beyond a calling that not only is evidenced in the aforementioned video but everywhere you look for it: the people who are living out their calling as an artisan.

If you Google the word artisan, here’s what you find:

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Much like the definition of “calling,” I find the short definition of “artisan” to be unhelpfully narrow. What if we expanded the term beyond simply those who used their hands to make their work to those who adopt a similar philosophy and methodology. Then, I believe, we’d discover elements that would improve all of our work.

Artisanal work is:

  • Deliberate, almost to the point of being timeless. This doesn’t mean that it needs to be slow—Handel finished his legendary masterpiece, Messiah, in three weeks—but it’s certainly not hurried.
  • Effective, but not necessarily efficient. Who wants the most efficiently cooked steak or the most efficiently distilled single-malt Scotch? Efficiency is overrated while optimal effectiveness is under-delivered.
  • Creative, customized by the artisan and for the patron. It’s more one-of-a-kind than one-size-fits-all. It’s personal—allowing the artisan’s personality to come through—but it’s also personalized for the product or service recipient.
  • Beautiful, but without sacrificing its utility. While we might tend to think of artisans as artists, the term has historically been applied most often to tradesmen and craftsmen (and women, of course). The butcher, the baker and the candlestick-maker, if you will. This means there are artists who aren’t artisans and there are plumbers who are.

Are you an artisan? Yes, I realize that it is more conducive to some work than others, but what would it look like if you did the work in your job, profession or calling as an artisan?

Would the work be better? Would you enjoy it more? Would your customers or clients be more satisfied and more likely to do more business and to refer?

Instead of telling me how it can’t be done, consider how it might be.

(And if you haven’t yet, invest 17 minutes and 47 seconds in this video where an artisan singer-songwriter tells the story of how he connected with several other artisans to craft one of the most gorgeous—looking and sounding—acoustic guitars you’ll ever see or hear.)

You know you should have a will–but WHY?

Originally published CNBCYou’ve surely heard the sad news that music legend Prince has died, and you likely caught the fact that he did so without leaving a will. This high-profile case of apparent negligence has rekindled the collective finger wagging over having the correct estate planning documents. But the question remains—WHY?

I had the opportunity to answer this question recently on the Today show, but I wanted to further explore the topic in the hope of providing some additional, actionable clarity:

WHY NOT?

Statistics suggest that a majority of Americans don’t have a will. And, after reading hundreds of these documents, I’ve found that even most people who do have a will have one with sub-optimal language they don’t understand.

Why don’t we do a great job planning for our death? Primarily, most of us want to avoid contemplating the subject of our own demise. Secondarily, we tend to gauge the probability of our imminent passing as extremely low—“I’m not going to die anytime soon!”—and therefore discount the impact of its occurrence.

WHY?

Here are the top three reasons why it’s vital to write a will:

1) However improbable, the negative impact of dying intestate, with no estate plans in place, is so significant that it demands our attention and action. Prince is just one of many who’ve left behind a legal cacophony for courts to iron out and heirs to fight over. The whole situation, however, could’ve been avoided with one meeting with his attorney. But while this effect is magnified in the case of a celebrity, it’s no less important for you.

You have the opportunity to make the impossibly hard decisions involved in estate planning for and on behalf of those you leave behind. You can make your final word a blessing instead of leaving behind at best a mess and at worst a curse. Think of your will as your advanced instructions on how to administer whatever you’ve left behind, instructions which are followed by the person you designate as the Personal Representative (or the Executor or Executrix as it’s still called in some states).

2) It gives you an opportunity to fulfil your responsibilities, even after you’re gone. Your influence over your assets, businesses, charitable goals and in the lives of your family and friends can be extended well beyond you. In your will, you may name a Trustee to oversee assets that you direct to be held in trust on behalf of those you leave behind.

And don’t think you’re off the hook if you’re younger or have less money than you think is required to justify throwing around words like “trust” and “estate.” If you own anything, the law considers that your estate. And even if it doesn’t show up on your personal balance sheet, your life insurance proceeds are one of those assets.

Most parents of minor children—and even those of adult children—see the wisdom in directing their assets and life insurance proceeds to a Testamentary Trust with rules for distribution that they write. For example, my will allows my Trustee to distribute funds to my now 12- and 10-year-old boys for their “health, education, maintenance and support” throughout their youth. Then, they’ll get one-third of the balance in the trust if and when they receive a bachelor’s degree (not a mandate, but a sign of maturity in their mother’s and my opinion), followed by two additional distributions at later ages. This will hopefully ensure that the money helps, not hurts, them. Consider Warren Buffett’s estate planning advice (which I’ve paraphrased) to leave your kids enough to do anything, but not enough to do nothing.

3) Perhaps the most important reason to write a will pertains to the parents of minor children. It’s in your will that you elect new parents in case both mom and dad are gone. Yes, we’re talking about the religious office of godparents, but in order to make it official in the eyes of the state, your selections must be noted as Guardians in your will.

What happens if you don’t? A court in your state will decide the matter. Wouldn’t you rather choose who should raise your kids if you’re unable to do so? That way you can select Guardians who will continue raising your children with values similar to those you’re working so hard to impart. (By the way, for those who think the children’s grandparents are the natural fit for Guardians, a word of caution: Your mom and dad have already had their run at parenting. They might appreciate, and would almost certainly accept, the invitation, but consider going with someone younger who can keep up better with the kids and allow Grandmom and Pop-Pop to spoil their grandkids as planned.)

HOW?

Make your estate plans as complex as necessary, but as simple as possible. This helps ensure that you understand what you’re doing and that your plan can be sufficiently explained to your heirs after your passing, minimizing misinterpretation.

Consider choosing individuals to fill the offices of Personal Representative, Trustee and Guardian as you see fit. It’s not a popularity contest, and it’s likely best that different people serve different roles. Also consider establishing back-up designees to fill those positions in case anyone is unable or unwilling.

Yes, you can write out your will on the back of a bar napkin if you wish, but it may not be worth a lot more than the paper it’s written on (and seriously, it likely won’t be enforceable). Yes, having an online or software-produced will may be (much) better than nothing, but I still can’t bring myself to recommend it, and here’s why:

Wills are written in a different language than the one we speak. It’s called “legalese.” Your interpreter is an attorney. We can argue all day long whether this is unjust, but it won’t change the reality. Additionally, the process of administering wills, dubbed “probate,” is handled on a state-by-state basis. This is why I recommend having your will completed by an attorney specializing in estate planning (you wouldn’t ask your orthopedic doctor to perform brain surgery) in your state of residence.

How do you choose the right attorney? Approach friends and family members you deem the most responsible and ask them whom they used. (If they don’t have a will, take them off of your “most responsible” list.) Ask your accountant or financial advisor. Then, talk to at least a couple attorneys before making a decision. Confirm that they are more adept at translating legalese than speaking in it, and know right up front how they charge for their services. Many attorneys charge on an hourly basis, but consider asking for a flat fee so that you don’t feel pressure to withhold any questions for fear of running up the bill.

One alternative that falls between the napkin route and hiring an attorney is using a pre-paid legal service (perhaps it’s one of your company benefits). Here, you are still likely to come away with more “boilerplate” documents that may not be optimally customized, but at least it adds more of a human element into the process at a reduced cost.

WHAT?

Is a will all that you need to adequately prepare your estate plans? Likely not. While you’re drafting or updating your will, also consider having drafted a Durable Power of Attorney document (to authorize someone else to make financial decisions when you’re unable or unavailable) and Advance Directives (authorizing someone to make medical decisions on your behalf if you’re unable). Most estate planning attorneys will offer a package complete with all three documents. The cost for these documents can vary widely depending on your geography, but you should be able to write these extremely important documents for between $250 and $1,000.

If your level of wealth falls below something like Prince’s but above average, it’s altogether possible that you’ll want to include other documents—like revocable, irrevocable and charitable trusts, for example—to ensure your assets get where you want them to go while minimizing federal and state estate tax, as well as state inheritance and income tax, to the greatest degree possible. Yes, you’ll pay more for your estate planning documents as the complexity increases, but consider it the cost of being financially blessed.

Lastly, don’t allow the time and money you invest in your estate documents to become invalidated by failing to ensure your beneficiary designations—on life insurance policies, retirement accounts and annuities—are in alignment with your will. This is especially important because your beneficiary designations will trump the wishes outlined in your will. That’s right, if you updated your will but never changed your 401(k) beneficiary designation from your mom to your new spouse (or from your ex-spouse to your new spouse!), the designated beneficiary on record wins in a conflict with your will.

THE BOTTOM LINE

Estate planning can be costly and confusing. I get it. And I also understand that we’d generally prefer not to discuss death. But when you engage this topic purposefully, the discussion can actually be quite life-giving. This is because regardless of our age, health or the size of our financial estate, we’re all creating a legacy.

Simple Money Featured On The Today Show

Recently, I had the distinct privilege to join Sheinelle Jones on the Today show, discussing some rapid-fire personal finance issues in Simple Money style.  Is now a good time to buy stocks?  Is it a good time to buy, sell, refinance or renovate a home?  We even discussed a version of the Simple Money Portfolio and my top two picks for cash flow apps that can improve your financial situation.  Click HERE or on the image below to view the segment.

Tim Maurer on Today Show

Building a Strong Portfolio in 7 Simple Steps

Originally published CNBCThe movement of markets is so incredibly complicated that even the world’s most skilled portfolio managers struggle mightily to “beat the market” over the long-term. Building a strong portfolio, therefore, must be similarly (and singularly) complex, right? Wrong. While portfolio architecture and management is not easy, here is a seven-step process that makes it surprisingly simple:

Step 1: Know thyself.

This ancient Greek wisdom is where we must begin, because personal finance is more personal than it is finance. Investing is complex because we are complex. Therefore, we must understand ourselves before we try to understand the markets. This means honestly gauging your time horizon and the returns necessary to meet your goals, but it’s especially important that you understand your willingness to take risk in the markets. You must take the gut-check test.

Step 2: Understand investing.

It’s true that you shouldn’t invest in something you don’t understand, because when times get tough you’re more likely to part with even the best investment strategy if you don’t sufficiently comprehend the logic behind it. My colleague, author Larry Swedroe, says in his unmistakable New York accent, “You oughta be able to explain your investment strategy to a fifth grader.” You should be familiar with the compressed history of “the market” and work to become conversant in the foremost systematic, academic approach to market investing—Modern Portfolio Theory (MPT).

Step 3: Design your portfolio.

Once we’ve acquainted ourselves with, well, ourselves (as well as the fundamentals of markets and investing) it’s time to build our portfolio. I’ve created a simple starting point for investors that synthesizes the essentials of MPT—by diversifying across a broad cross section of equity asset classes, favoring those that have historically outperformed—and a basic understanding of behavioral finance—by reducing portfolio volatility through the anchor of conservative fixed income. Refer back to Step 1 to determine if this balance of stocks and bonds is appropriate, or if it should be calibrated more aggressively (by increasing the allocation to stocks) or conservatively (by increasing the bond allocation).

Simple-Money-Portfolio-Chart

Step 4: Implement your portfolio.

Ok, now you’ve got the knowledge and the plan, but all of that is worthless if you don’t actually translate it into action. Because we have no control over market fluctuations, we must focus on controlling the factors that we can. Chief among these is the cost of investing. I recommend avoiding commission-sold mutual funds and “actively” managed funds with higher internal expense ratios, favoring instead no-load, “passive” or indexed funds in your corporate retirement plans, self-managed accounts and accounts under the stewardship of a financial advisor.

Step 5: Monitor—but don’t micro-manage—your portfolio.

You want to be cognizant of what’s happening in your portfolio but not obsessed about it, because paying too much attention to your portfolio usually works against you. Yes, certain actions may be advisable when markets move—see Step 6—but making major changes midstream typically hurts more than it helps. And if you absolutely must, when it’s appropriate, “get out of the market,” click HERE.

Step 6: Rebalance your portfolio.

Especially in times of significant market volatility, the inevitable question arises: “So, I’m just supposed to sit here and watch my portfolio get clobbered?” No, you need not sit idly by. If the market has moved enough that you’re getting a nervous feeling in your gut, chances are good that your portfolio is out of balance. In such cases, it’s entirely appropriate to bring your portfolio allocation back to its starting point through the act of rebalancing. While rebalancing has not necessarily been proven to “make you more money over time,” it does help reduce overall portfolio volatility.

Step 7: Fund your portfolio.

Too often, we seek to blame others—perhaps a spouse, investment managers or even the markets—for having too little in our portfolios. But while any (or all) of those parties may share in the blame, don’t forget that we—YOU—are the primary determinant of your investment success through the contributions you make. How your portfolio is structured absolutely is important (and that’s the focus of this article) but the biggest factor for success in investing is not the nuance of your portfolio management style, but your willingness to persistently save a meaningful portion of your hard-earned income. This ensures you can recreate your income at some point in the future when you’re unwilling or unable to do so.

Are you living the life you chose?

Financial Wisdom From Jason Isbell

Originally in ForbesI love finding financial wisdom in unlikely places, like in art and music. These opportunities are more abundant than you might expect. For instance, the punk-Americana outfit, The Avett Brothers, dedicated an entire tune, aptly titled “Ill With Want,” to the scourge of greed and Mumford & Sons taught us that “where you invest your love, you invest your life.”

The newest melodic metaphor to catch my ear comes from singer-songwriter Jason Isbell. He expresses his appreciation for having work in the title track of his newest album, “Something More Than Free,” but it’s the pair of questions he poses in another song, “The Life You Chose,” that really got me thinking.

“Are you living the life you chose? Are you living the life that chose you?” asks Isbell.

jasonisbell

I fear it is the latter for many, if not most, of us. Perhaps we are stuck living a life that has grown into a web of circumstances driven more by external compulsions than autonomous impulsions. For too many, life is lived at the behest of someone else’s priorities and goals, in pursuit of someone else’s calling.

Behavioral Economist Richard Thaler’s Message to Advisors: ‘Nudge For Good’

Originally in MoneyDaniel Kahneman and Amos Tversky legitimized behavioral economics—the study of how people really behave around money, as opposed to how economists say a rational person ought to behave.

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Then Richard Thaler and Cass Sunstein applied the lessons of behavioral economics to everyday life with their book Nudge. The duo nudged so successfully that in recent years, their prescriptions have been put to work in corporate retirement plans—and even public policy—on a global scale.

When I spoke to Thaler to discuss his newest book, Misbehaving, a series of stories documenting the rise of behavioral economics, he told me that he has a message for those who seek to employ his methods:

“Nudge, for good.”

And why does he say that?

Should You Really Be Buying That?

How To Decide If A Purchase Is Really Worth It

Originally in Forbes“It was totally worth it.” In this case, “it” referred to a Vitamix blender that a friend recently had purchased. He wasn’t the first. Indeed, I don’t know anyone who has purchased a Vitamix blender and didn’t share my friend’s effusive sentiment, even after spending between $429 and $719 (for the new line of G-Series models). For a blender.

San Francisco, CA - April 2014: Tesla Motors model S sedan elect

But despite my appreciation for these friends and their opinions, I can’t help but notice their errors in judgment, explained by behavioral science, that, if followed, could lead to an unwise purchase for you or me.

To be clear, it’s not their purchase of the blender that I’m questioning. Rather, it’s their insistence that said purchase is a universal must. Worth, you see, is relative. What is “worth it” for you may not be “worth it” for me. Ultimately, determining the worthiness of your next purchase depends on many factors, but chief among them are 1) the joy you receive from using the product, 2) your personal cash flow, 3) how much you will use the product, and 4) the cost of available alternatives.

The Top 5 Ridiculous Reasons NOT To Buy Life Insurance–With Anthony Anderson

Originally in ForbesAnthony Anderson is a funny dude. The Emmy-nominated actor has been making people laugh on television and in film for 20 years. But now he’s bringing his sense of humor to a surprisingly unfunny topic—the need for life insurance.

Anthony Anderson and son

The big question I had for him was: Why? Why, with your career exploding and recent Emmy nomination (for lead actor in the show Black-ish), are you investing time and effort to be the spokesperson for Life Insurance Awareness Month?

“I know firsthand from friends and other family members who’ve never had a policy, who’ve never thought about having a policy.  And then all of a sudden someone passes in their family and they don’t know what to do,” Anderson told me.

Fair enough. Many people aren’t even aware of the need for life insurance, and that lack of education is a big concern for Anderson, and a major driver of his dedication to public awareness.  But as we continued our conversation, it shifted focus. What it seemed to begin revealing were some of the tragically comic, ridiculous reasons that many people choose not to buy life insurance. Here are the Top 5:

5) I’ve got more important things to insure.

“People insure their flat screen televisions, they insure their cars, they insure jewelry, but they don’t insure themselves,” says Anderson with a chuckle. He’s also evidently frustrated by this reality. “If it weren’t for themselves, they would have none of those things to insure.”

How To Avoid Grass-Is-Greener Failures

The Virtual Test Drive

Originally in ForbesA friend of mine had a lifelong dream of opening up a coffee shop and was willing to put a highly successful career on the line to pursue it. Fortunately, he was presented with an amazing opportunity to test-drive his grass-is-greener ideal, and the results might surprise you and offer guidance that you can apply to your next big decision.

Green Pastures With Fence

Dave had it all planned out, even down to the lighting and indie musicians that would be playing on Thursday nights in his vision of the perfect coffeehouse.

Then he got an opportunity that most of us don’t have before we make the plunge: He got to learn the ropes working at the best café in Chicago. He immersed himself in coffee culture for a week of training that was nothing short of blissful. Then, he got a chance to put it to work for another few weeks.

His findings? In an average eight-hour day, he got to interact with customers and craft their coffee concoctions for approximately 20 minutes. The remaining seven hours and 40 minutes were spent with dirty dishes. Lots of dirty dishes.

Short-Term Memory Threatens Long-Term Success

When it comes to investing, rely on long-term wisdom

Originally published CNBCWhen it comes to the market’s peaks and troughs, investors often don’t react as rationally as they might think. In fact, in times of extreme volatility or poor performance, emotions threaten to commandeer our common sense and warp our memory.

Don't Forget --- Image by © Royalty-Free/Corbis

It’s called “recency bias.”

What the heck is recency bias?

Recency bias is basically the tendency to think that trends and patterns we observe in the recent past will continue in the future.

It causes us to unhelpfully overweight our most recent memories and experiences when making investment decisions. We expect that an event is more likely to happen next because it just occurred, or less likely to happen because it hasn’t occurred for some time.

This bias can be a particular problem for investors in financial markets, where mindful forgetfulness amid an around-the-clock media machine is more important today than ever before.

Try thinking about it this way. In the high-visibility and media-saturated arena of pro sports, every gifted athlete knows that the key to success can be found in two short words: “next play.”