Posted on Thursday, April 19, 2012

Home and Auto Insurance App

This is the seventh exercise in a series designed to walk you through an entire financial plan. The exercise is embedded in an Excel spreadsheet you can download and save for personal use. You can find the backdrop for the exercise HERE or just jump right in with the instructions given below:

In order to know if your home and auto insurance policies are providing you with the appropriate levels of coverage, you’ll want to collect the declaration pages for all of your home, auto, condo, and renter policies. The Application Exercise online will provide a chart to fill in your various coverage limits next to our recommended minimum limits.

After you’ve tailored your desired limits with the help of an independent planner who does not accept commissions or referral fees for the sale of insurance, you can use the Application Exercise to shop your coverage with several carriers.

Click HERE to access the app!

Posted on Wednesday, March 16, 2011

The Stuff Dreams Are Made On

We’ve all heard the phrase, “the stuff dreams are made of,” likely without questioning its origin. Black-and-white movie buffs may remember Humphrey Bogart’s character, Sam Spade, used this phrase in the 1941 film, The Maltese Falcon. His is really a mistaken reiteration of Shakespeare, when in The Tempest Prospero declares, “We are such stuff as dreams are made on.” I could make a case that the prepositional switcheroo is really quite meaningful here, but I’d prefer to make a different proposal altogether:

The stuff dreams are made of (or on) isn’t actually stuff at all.

Most financial planning focuses on the material realm—the acquisition of cash, stocks, bonds, mutual funds, real estate, business interests and other stuff. Please don’t misconstrue my statement as imposing an inherently negative connotation on the word stuff or the things mentioned in that list. I just think it’s ironic that these things appearing quite tangible are actually the most reliably temporal.

Cash, for one, is forever devalued. In 1914, you would’ve been a “millionaire” in today’s relative terms with $45,500. 2007 taught us real estate is subject to losses and 2008, that the market is not necessarily a benevolent power pledged to making our dreams come true. If you’re still holding onto the false belief that bonds can’t lose money, a broadening global sovereign debt crisis (that is, incidentally, deepening in many U.S. states) is likely to cure you of that logical illness. And, with the exception of some very nice red wines, even those assets which appreciate in value over time don’t actually get… better. My home, for example, was in better shape when it was built in 1969 than it is today.

Speaking of appreciation (and depreciation), my oldest son, Kieran, and I traveled with his Cub Scout troop this past weekend to the aging Battleship New Jersey, docked in Camden, NJ. We got an exhaustive inside-and-out tour, ate two military-style meals and even spent the night on this magically floating metal monstrosity. Many things about this experience were notable, not least among them the willingness of hundreds of men and boys to don bright neckerchiefs as they go about their days (just kidding, guys, I’m sure there’s a meaningful reason for that tradition I just don’t understand).

The New Jersey is, according to our salty tour guide, Popeye (seriously), the most decorated battleship in U.S. history. Launched exactly one year after “…the day that will live in infamy,” the New Jersey served in World War II, Korea and Vietnam before being decommissioned for the last time in 1991. It was a day and night of “Wow!”s, but by far the most impressive thing for me was the entirely satisfied, albeit weary, smile on my boy’s face as we pulled away from the ship, knowing this was a memory we’ll likely have forever.

What tangible did we have to show for it? Popeye’s business card and a $3.99 keychain trinket with a mini telescope.

My Shakespeare’s a little rusty, but I’m pretty sure when Prospero said “WE are such stuff as dreams are made on” (emphasis added), he wasn’t talking to (or about) his 401k, Roth IRA or even his FDIC insured bank account. There’s no question, however, that larger balances in those can aid one in the acquisition of those non-material blessings in this life.

I like the way my friend, Jim Stovall, puts it: “There are only four things you can do with your money: Acquire stuff, buy security, create memories and make the world a better place.” Neither Jim nor I would suggest the pursuit of any of these is wrong, but in a culture seemingly bent on the acquisition of the tangible, I encourage you to be deliberate in your pursuit of that which you can’t see or touch, but also never loses value.

Posted on Thursday, February 17, 2011

Making Financial Music

This video blog is a genuine departure—even for me! Working closely with my brother, Jon, an amazing musician, and my friend and video producer, Ben Lewis, we actually designed a video communicating a message with its very own customized “soundtrack” that is integrated into the message, ultimately communicating some important financial truths. In this case, the music isn’t just the context or backdrop, but the actual vehicle responsible for transmitting the message.

Is it possible for art to teach? You be the judge. I hope you enjoy this and pass it on to any friends or family who are music lovers. And, as always, we value your feedback, comments and questions on the blog.

Posted on Thursday, February 10, 2011

Money, Romance and the Fundamental Attribution Error

(AKA An attempt at a non-clichéd Valentine’s post)

Question: What percentage of marriages in the U.S. end in divorce?

Answer: Over 50%

Question: What percentage of those cite money issues as the primary reason for the split?

Answer: Over 50%

It doesn’t take a statistician to hypothesize that money is the foremost source of relational dysfunction. Or, maybe it’s the primary scapegoat or symptom. That distinction is largely irrelevant because in either case, the common denominator is money. And even though we’re dealing with the dollars and cents of money constantly, have you ever noticed that we don’t talk much about our philosophy surrounding money or our history with money or even our feelings about money?

Enter the sexy topic of “fundamental attribution error.” Here’s a definition I found in Wikipedia:

In social psychology, the fundamental attribution error (also known as correspondence bias or attribution effect) describes the tendency to over-value dispositional or personality-based explanations for the observed behaviors of others while under-valuing situational explanations for those behaviors.

Clear as mud, eh? Here’s the idea: We have a tendency to presume that the bad things that happen to us are circumstantial—that we’re an innocent bystander subject to the undeserved malevolence of the universe —and that the bad things that happen to other people are due to a lack of responsibility on their part or even their character. That’s why when you cut someone off driving, you were obviously in a hurry to do something very important (and late for no fault of your own) and when someone on the road cuts you off, they were obviously just an idiot trampling on your God-given traffic rights. (Sarcasm intended.)

Thankfully, fundamental attribution error never takes place in our marriages and relationships with boyfriends and girlfriends. And never regarding the topic of money! (Intense sarcasm intended.) That’s why, at our very worst, we believe that our beloved is a spendthrift who obviously wasn’t properly reared to understand the value of money while we are disciplined, frugal and wise in the ways of fiscal matters. Or, we believe that our soul mate is a miser whose parents were just plain cheap while we hold money loosely, recognizing its relative unimportance in the face of deepening relationships. Right.

So, in the spirit of Saint Hallmark—I mean, Valentine—I’m going to recommend an exercise that will teach you about… you… and then about your spouse. It’s called the Personal Money Story. You start by thinking of the earliest possible memory you have about money. Maybe you received an allowance, a birthday gift of money or opened a bank account for the first time. Then you rate that experience on a scale of up to 10 if it was a very positive experience all the way down to -10 if it was a bad one. Then try to remember each of the experiences with money that left a meaningful impression and give them a score. All of the memories are important—no matter if they were minor (having your bike stolen and not having the money to purchase another) or major (Job loss of a parent that forced you to move).

If you are able to plot each of those experiences on a graph, you’ll get a great visualization of your history with money (fear not, we’ve created a functioning spreadsheet and graph with instructions). That’s important, because that history is likely the primary determinant of how you view and deal with money today. You’ll probably learn something about yourself, but hearing and seeing the Personal Money Story of your loved one can be a life-changing experience. He or she certainly has made good and bad decisions surrounding money, to varying degrees, but you’ll now likely also see how his or her past experiences shaped those decisions. You’ll have the opportunity to reverse the negative effects of fundamental attribution error and properly weigh the circumstances that shaped your spouse or loved one. This sharing can also lead to the vision casting question of, “OK, how do WE want to handle money—together?”

You can link directly to a functioning Personal Money Story spreadsheet and graph that will allow you to enter your money events and corresponding scores and watch the graph populate by clicking HERE.

Question: Is Valentine’s Day a romantic holiday that brings couples closer together OR a manipulative trap set up by the card, flower and jewelry industries?

Answer: It doesn’t matter.

In today’s hyper-technologically-connected-but-not-in-reality world, we couples need all the help we can get to generate purposeful, deliberate opportunities to grow our relationships. In a virtual world of email, Facebook, TiVo and Twitter (all useful tools), it seems to be a growing challenge to engage in the antiquated art of conversation. Throw children and their accompanying activities into the mix and it seems that 95% of the correspondence between man and wife is utilitarian in nature. I won’t go so far as to suggest you and your loved one spend Valentine’s Day discussing fundamental attribution error or even swapping Personal Money Stories, but taking the bold step into this territory and really applying yourself intentionally to the process is guaranteed to have meaningful, positive results.

Posted on Thursday, February 3, 2011

Living Down To The Stereotype

Have you ever heard someone say, “I’m not a pessimist; I’m a REALIST”? That’s something that pessimists say. I’m an optimist. Not the kind who appears not to have experienced any pain and almost pretends to ignore that it exists, but the kind who has seen enough pain transformed into something incredibly positive to know that there is validity in this statement: All things—even those that are painful—work together for some greater GOOD.

The challenge for optimists is that the world seems intent on proving us wrong on a daily basis. Stereotypes and discrimination are a great way to preserve cynicism and pessimism. After all, when one expects people to live down to their negative stereotype, the cynic wins regardless. Either they are pleasantly surprised and deem the experience anomalous or their “correct” preconception gives their ego an extra breath of inflation.

What, then, is the posture of the optimist when faced with real life stereotype reinforcement?

A couple weeks ago, my wife directed my attention to a piece of mail—from a large local auto dealership—that reads:

ACCORDING TO OUR RECORDS, YOU ARE
ONE OF A HANDFUL OF INDIVIDUALS

WHO CURRENTLY OWN A 2000 NISSAN XTERRA THAT IS IN GOOD CONDITION! THIS VEHICLE IS IN ITS PEAK TRADE CYCLE. WE ARE WILLING TO MAKE YOU AN AGGRESSIVE OFFER FOR THIS VEHICLE. THERE IS NO PURCHASE NECESSARY.

Possibly fearing that I may perceive such language as unsubstantiated, as though this were another long-lost German uncle who’d discovered my family fortune somewhere in Africa, the letter bolstered its audacious claim:

On January 8th, 2011 we checked the Black Book® Appraisal Guide and it stated that your vehicle, in clean condition, could be worth $5,530. However, we feel that your vehicle could be worth even more. This is not a gimmick… WE NEED VEHICLES!!

REALLY!? I mean, it is a good strong vehicle, but with 157,500 miles on it and enough Cheerios under the back seats to feed a small reunion, Andrea and I figured it was worth little more than a few large pizzas. We’d already decided to “run ‘er into the ground.”

Fortunately, we both came to our senses pretty quickly and chuckled at our naivety, recognizing that the “Special Vehicle Code” listed at the top of the mailing was probably code for, “If these morons call, they’re extremely gullible, so sell them down the river!” But as I hovered over the trashcan, the optimist in me spoke up: “Well, it can’t hurt to call and do a bit of due diligence, right?”

So the next day at work, I called and talked to a gentleman in the sales department. He took ten minutes to convince me of the mailing’s legitimacy…how the car dealerships came to a screeching halt after “Cash For Clunkers” dried up…and how they’ve been looking more favorably at vehicles they wouldn’t have been interested in a year ago. The optimist now identified with his plight. Heck, if they wanted to give me $5,530—or more??—for my ailing work horse, I was happy to oblige!

So two days later, I followed the salesman’s advice and set up a meeting with the General Manager of this large new and used auto dealership to have him confirm the surprisingly high offer in the letter. He examined the vehicle inside-and-out, drove it down to the servicing bay and returned with a piece of paper in his hand, sitting down next to me.

He said, “Well I’ll tell you, this vehicle is in very nice shape. It has a lot of miles on it, but otherwise it’s a good vehicle.” That sounds like good news, I thought. Then he said he had spoken with the used car manager and they were willing to give me “this number, in cash” pointing to a virtually blank sheet of paper with the number $2,500 written on it. Huh.

Grateful for the reminder from my wife not to lose my temper if the reality turned out to be more believable than the warm invitation we’d received in the mail, I calmly and quietly told the GM that I was disappointed I thought there may be any truth to the letter in the first place, that I was disappointed my wife and I wasted precious time at the dinner table discussing said letter, that I was disappointed a salesman took ten minutes of my work day to entice me further to visit the dealership and that I was most disappointed I took a couple hours out of a day to sit through this present charade.

The pessimist may conclude that the huge financial conflict of interest of a used car salesperson is simply too great to allow them to rise above their stereotype. The optimist, however, would write a blog post about it, in hopes that when the General Manager at the dealership reads it, he’ll consider recalling this deceptive marketing campaign.

(Oh, and by the way, if it weren’t for that letter, my wife and I probably wouldn’t have even thought twice when we heard a good friend of ours—who takes remarkably good care of his vehicles—was selling his vehicle that would suit our family very well. We sold the XTerra privately to a young woman who needed reliable transportation after losing her car in an accident and are now enjoying my buddy’s vehicle as an upgrade for our family. Thank you deceptive marketing letter!)

Posted on Friday, January 28, 2011

State Of The…

Did you watch President Obama’s recent State of the Union address? What did you think? I’m not asking whether you liked the color of his tie or enjoyed seeing Vice President Biden and newly elected Speaker of the House John Boehner try to suppress their disdain for each other on camera. I’m curious what you thought about the speech’s content and substance. Mine is not a political question—asking if you agreed with the President’s stances on this-or-that—but a probe to determine if you feel the topics in the speech were meaningful. He touched on:

High unemployment
The depressed housing market
The sluggish economy
Two wars
The national debt
The sovereign debt crisis in Europe
North Korea’s nuclear ambitions

Few of us would argue that these are not vitally important issues, but which do you think has a bigger impact on your life—The State of THE Union or the State of YOUR Union?

Whether you acknowledge it or not, you’re an entity. You and your spouse (if you you’re married) and your children (if you’re a parent) are certainly beholden to other entities, like cities, states and countries, but you also enjoy a great deal of sovereignty. You decide where to live, what to eat, whom to befriend and marry, how to derive an income and how to spend it. But interestingly, we tend to spend more time bemoaning the action and inaction of those with less of a direct influence in our lives—bosses, legislators and Presidents—than those who most directly impact our lives…US.

I seek not to minimize the importance of the State of the Union address (even though it seems more like political gymnastics these days, regardless of the party affiliation of the deliverer) and certainly not the actual state of our great country, but to elevate and affirm the most powerful leaders in our respective realms—YOU and ME. Your entity needs you to be actively involved in the process of gauging its state, crafting its vision for the future and moving in the direction of that vision.

The first step in effectively leading the “Democratic Republic of You” is to simply be honest with yourself. This, of course, is where we must deviate from the political analogy, because we do ourselves no good whatsoever to spin our current reality into something shapelier than it is. Each of us is uniquely made, and we only distance ourselves further from fulfillment when we attempt to prove otherwise.

The most common way I see this play out is in the educational paths we take and the career choices we make (topics I’ll be discussing in the next couple of weeks), but I’d like to ask you to take 5 minutes to complete an exercise right now. It’s very simple and it works wonders to help us analyze our current state. You need only one piece of paper with a line down the middle (see the sample below). On the left hand side, you write LIFE TAKING and on the right side you write LIFE GIVING. Those things that fill the Life Taking column are the roles (or tasks within roles) that drain you. They’re a chore, not a labor of love. On the Life Giving side, list the opposite—those things you can do for eight or ten hours in a day and wonder where the time has gone. You might be tired after a long day of Life Giving activities, but you don’t feel weariness; instead, a great deal of satisfaction.

Looking over this list, you’ll be able to honestly answer whether the state of you or your family is good, or not. The optimal end result is not to eliminate all of the things that drain you and replace them with the stuff you love, but if the majority of your roles and the duties you’ve accepted as yours are Life Taking, I encourage you to consider making some difficult decisions in an effort to improve that ratio. That may mean saying yes to something, but it almost certainly means saying no. Next week, I’ll share how this type of analysis can be used to give us much needed direction in our educational and vocational pursuits.

If you want to get started on listing these out for yourself, I have provided a downloadable version of exercise right here: Download Life Taking, Life Giving – BLANK.

And if you need a little levity to warm up to this exercise, take a look at Saturday Night Live’s take on the 2010 State of the Union address.

Posted on Wednesday, January 19, 2011

The Value of Football (and Money)

Saturday night after the AFC playoff game between the Baltimore Ravens and the Pittsburgh Steelers, my seven year old son, Kieran, and I were sprawled out across the sofa in a coma of disappointment. Clad in our purple and black jerseys bearing the names and numbers of our favorite players, we lay…silent. Kieran was obviously on the verge of tears, so I finally mustered the courage to speak and asked him if he was OK.

He responded, “Dad, I’m sad that the Ravens lost, but I’m sadder that you yelled so much.”

He was right. As the Ravens benefited remarkably from Steelers miscues in the first half, I demonstrated “irrational exuberance,” and as their game plan devolved into an NFL follies reel in the second half, I came unhinged. As I processed this unintentional admonition from my son—who was likely most interested in the game simply because of the opportunity to spend time with his dad—my conscience initiated a discussion:

Conscience: “You know that football, in the grand scheme of things, isn’t actually important or inherently valuable, right?”

Tim: “Don’t be silly—of course it’s important and valuable! Coaches and players engage in healthy competition, putting their wits and bodies to the ultimate test! Tens of thousands of people engage in vigorous community at every game! Entire cities, divided in so many ways, come together in unity to support their team! Families and friends break bread and engage in fellowship around the game! What’s wrong with that??”

Conscience: “I didn’t say anything was wrong with football. I didn’t say it was bad. I said that it wasn’t important.”

Tim: “OK, so what about all that great stuff I said about community and cities and relationships benefiting from the game?”

Conscience: “All that stuff is good and important.”Tim: “But not the game itself, or its outcome?”

Conscience: “Right. And by the way, what of that goodness did you demonstrate or share with Kieran during and after this game?”

Tim: (Sigh) “Right.”

Conscience: “But it’s ok.”

Is there anything in your life that isn’t important that you’ve placed above something that is? How about MONEY? What is it worth? What is its inherent value and import?

NOTHING. The money in our pockets, purses, banks and investment accounts is actually of no genuine value. It’s literally worth only what we’re willing to believe it’s worth. This is true…even if we choose to deny it (and too often, I do). In the early 1970s, the U.S. went off of the “Gold Standard,” which pegged every dollar’s value to a certain amount of the tangible yellow stuff. Since then, we, as do most countries in the world, have a fiat money system. This basically means that our government prints money that we, as consumers, agree to BELIEVE has value.

But while money and football have no inherent value (I’m still struggling to write that), neither are they intrinsically good or bad. When properly viewed and balanced, football delivers an excellent platform for building strength, conditioning, teamwork and community (and controlled exuberance). Similarly, when the neutral tool of money is used to good effect, it provides, security, opportunity, aid for the underserved and myriad occasions for relational enhancement.

So neither football nor money are good or bad or important or of inherent value. When overvalued, they have a tendency to stand in the way of that which is truly valuable—RELATIONSHIP—but when employed with wisdom and understanding, the result is a fuller and more vibrant life.

(For the pragmatist unnerved by the philosophical leanings of this post, please note that those who effectively neutralize football and money, aiming for a goal loftier than winning and amassing, often tend to win and have more.)

Posted on Wednesday, January 12, 2011

Foul Language and the Making of a Financial Crisis

Would you like to know EXACTLY what caused the financial crisis? While I can’t sum it up in a way that will leave you fully satisfied in a mere blog post, I can point you in the direction of a resource that will entertain you while giving you a crash course in the creation of a financial crisis. But I must disclaim that if you want to really know what caused the crisis—and what is likely to cause the next one—you’ll need to have the ability to consume more than just a few “choice words.” The true story of the destruction of our financial system is both profane and profanity laden. It’s The Big Short, by Michael Lewis.

Michael Lewis has written some incredibly important books. His breakthrough came when he wrote a tell-all exposing the moral ills of Wall Street entitled Liar’s Poker, but the book you’ve probably heard of—or the movie based on the book—is The Blind Side. It’s the incredible story of Michael Oher, the current left tackle for the Baltimore Ravens, who escaped occasional homelessness to become one of the NFL’s finest. Lest you think the point of my digression into Lewis’s other works is a not-so-veiled attempt at giving props to my home team taking on the dreaded Pittsburgh Steelers this Saturday at 4:30 pm in the divisional playoffs, I assure you it IS. But my point also serves to demonstrate that Michael Lewis is indeed a gifted writer, capable of giving the financially savvy more than enough to chew on and novices a manageable framework for the financial events that brought down even the most the legendary of Wall Street firms.

“Holy s—, that’s just f—ing crazy. That’s fraud.”

“This is a fictitious Ponzi scheme.”

Those words are spoken by the “good guys” in The Big Short, traders who dug further and further into the deceit and greed to discover that Wall Street had created synthetic investment products (credit default swaps) designed to bet against other synthetically created investment products (CDOs). CDOs were designed to defraud investors by manipulating incompetent rating agencies, thereby hiding the inherent danger in the investments they aggregated—sub-prime mortgage bonds—comprised of the ill-conceived sub-prime mortgages.

Hmmm… that was hard to follow, wasn’t it? Let me try that again: “Sub-prime” is the moniker for a mortgage loan given to a buyer with poor credit. The borrowers were charged higher interest rates to help off-set the risk (for the banks), but the rates were so high that it made it hard for the borrowers to make the payments, especially when the housing market went south. Sub-prime mortgage bonds were created and sold, designed to pay bond-holders a higher-than-average rate of interest for accepting a higher chance that the borrowers will default. CDOs—or Collateralized Debt Obligations—were used to group different “tranches” (bunches) of sub-prime mortgage bonds together. The same firms who originated the loans created the bonds made up of the mortgages… then they created the CDOs made up of the bonds and sold “insurance” to the firms who purchased the CDOs in case the CDOs would lose money. The insurance was termed a credit default swap. So what happens when the borrowers walk away from the loans? The bonds default and the CDOs tank, which require the firms who created all this stuff to pay the insurance benefits through the credit default swaps, but they don’t have any money left to pay!! The financial crisis of 2008-2009.

Like I said, it’s complicated. That’s why Lewis takes a whole book to explain it, and he does so masterfully. He spent enough time as an insider to understand how the system works, but even more time off of Wall Street so he knows how to help us understand. And instead of lecturing, he tells the story through the narrative of three different firms and their unlikely leaders who found a way to buy the insurance—or “short” the entire sub-prime mortgage market—without even owning the junk for which they were purchasing the insurance. These guys are (or were) traders, and having spent 28 months of my professional life on a trading floor, I can confirm that their colorful vernacular is (unfortunately) the norm. It’s more akin to a locker room environment than any professional realm you could imagine. Lewis even tells us of the impact that navigating these waters had on the traders personally, on their families and friends.

It’s an ugly story, but it’s a vitally important one. And if, like me, you decide to “read” the book via the CD series in your car, don’t forget to turn it off when you’re driving your kids!

Posted on Tuesday, January 4, 2011

Energized By Success, Depressed By Failure

Every year, we get a raft of marketing and motivational pitches to resolve to do something different or better in the New Year. Frankly, I don’t need to hear that again. (They’re probably just trying to sell me something anyway!)

Thankfully, my friend and co-author, Jim Stovall, one of the most highly sought after motivational speakers in the country, also isn’t comfortable with the same-old-same-old. Here’s a guest post from Jim to start the New Year off right, in which Jim actually tells us precisely how and when we should ditch a resolution altogether! Enjoy…

We are energized by success and depressed by failure. Something as simple as having a daily list of tasks that are all marked out at the end of the day gives us a sense of accomplishment. Having tasks that are not done, unresolved details, and looming commitments creates panic along with lack of focus and energy. We can feel this ebb and flow day-to-day as we go through the routines of our personal and professional lives. It’s harder to see the impact of these factors on a longer-term basis.

This time of year, you will be bombarded with countless advertisements and other messages encouraging you to make New Year’s resolutions. I’m not opposed to the concept of New Year’s resolutions, as I applaud anyone making a positive commitment at any time; however, I do want to caution you regarding unresolved resolutions.

If you find yourself being affected by the advertisements or myriad of messages telling you to make another New Year’s resolution this year, please be careful to not repeat the same resolution you’ve made for two years, five years, or even a decade or more. This ongoing cycle of commitment and failure can be damaging to you. Either you don’t take the commitment seriously, which impacts other commitments you make throughout the year, or you begin to see yourself as an ongoing failure.

If you’re going to make a New Year’s resolution that you have made before, at least resolve this year that you are going to succeed or quit making the same resolution in the same way you have in the past. A New Year’s resolution or any commitment you make to undertake a change in your life must belong to you, be realistic, and come with adequate rewards.

Too many people make a resolution because their spouse, boss, or friend thinks they should. You cannot achieve success and maintain it if the goal belongs to someone else. It is impossible to reach a goal that is not realistic in your own mind. If the task seems too daunting, break it down into manageable parts and resolve to master the first hurdle. Finally, whatever change you resolve to make must be worth whatever you give up to achieve and maintain the success you seek. Any goal commands a price, and unless you’re prepared to pay the price to reach the top and keep paying the price to stay there, you would be better off to save your time, effort, energy, and talent to reach a goal that is worth the price it will require.

As you go through your day today and through this new year, resolve to make changes that matter to you, and join me in a New Year’s resolution to quit making resolutions that don’t matter to you and aren’t worth the price they require.

Today's the Day!

Jim Stovall

Author, Ultimate Productivity

Posted on Thursday, December 30, 2010

Holiday Blues: A Remedy

It’s gone. Just like that. What’s left, but a large, dead plant to dispose of, lights and decorations to put away and a budget that enjoyed more merriment than it could handle? The holiday blues are setting in…

How do we counter the holiday blues? Well, last year, one of my neighbors kept his Christmas tree up… until March! I suppose that’s one way to process the emotional downward spiral, but it seems that denial will only get us so far. I offer, then, a recommendation that can 1) improve your life, 2) give you a lasting infusion of holiday spirit AND 3) potentially put some of those dollars you spent throughout the holidays back in your pocket.

The recommendation: Purge & Give. How? Meander throughout your house and analyze what you haven’t used in the past year and then… give it away to someone who’d likely find it a treasure.

There certainly are exceptions to the one-year-rule. Camping gear or tools, for instance, are things that you may not use for a year but fully intend to use in the future and should keep on hand. The most effective place to start vetting is often your closet. If you haven’t worn an article of clothing or pair of shoes in over a year, the chances are very good that you don’t need to hold on to it (or them). Then inventory your basement, garage, shed, desk, wallet, purse and car.

If you’re the parent of younger children, as I am, the purge-and-give process is a great one to eliminate surplus former holiday and birthday presents AND to teach your kids the benefits of these worthy pursuits at a young age. Don’t do it when they’re asleep, hoping they’ll never miss anything, but instead involve them in the process.

How, then, might this process deliver on the aforementioned benefits?

Simply put, a simpler life is a better life. Margin—personally, spatially and financially—is our friend.

‘Tis better to give than receive? You may not feel that way about your brother-in-law, but try giving to someone really in need or an organization devoted to helping those who may not have received ANY presents this time of year. Doctors tell us we get a wave of endorphins from giving—the more direct, the better—and an endorphin rush is just what the doctor ordered for the holiday blues.

Assuming you itemize when doing your taxes, you should be able to deduct your charitable contributions—even for in-kind items. You may be surprised, but if you haven't purged for several years, your contributions to charity could add hundreds, or even thousands, of dollars to your personal balance sheet. (Talk to your CPA about your specific situation.)

You still have time in 2010 to receive these benefits. Take a walk around the house and head to your local Salvation Army or Goodwill donation center or homeless shelter. They’ll be better for it… and so will you.

And, as long as you promise not to use this only to provide solace for a lack of action on your part, this short video of “The Collector’s Collector” on the show, “Hoarders,” will help you put your situation at home in perspective: http://www.youtube.com/watch?v=KvBGNXi1gXs&feature=fvst.

Have a blessed—and simpler—New Year!