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Want to be happier?

Wouldn’t you like to be happier? That is, without the aid of prescription pharmaceuticals? Most people spend their lives chasing after things they think will make them happy, like money, careers, or relationships, only to discover they’re no happier than they were before.

You would think winning the lottery would make you the happiest person in the world, but studies show lottery winners go back to their previous levels of happiness within five years.  If you get an unexpected windfall the areas of your brain that register pleasure light up temporarily, but if you receive that same amount on a regular basis (like a paycheck) it doesn’t have the same effect.

The opposite is also true for people who suffer terrible losses.  Studies show that paraplegics have the same level of happiness after one year as do lottery winners.  Our brains adjust to our environment and our circumstances and return to a sort of preset happiness baseline.

So does this mean nothing will keep us happy? That we should give up chasing after those things we think will make us happy? Even though money doesn’t bring lasting happiness it does buy some really cool stuff, a good career can bring a sense of fulfillment and purpose, and married couples are reported to be happier and married men for some reason tend to live longer than single guys.  And if you follow these five tips from the experts on being happy you can have all these things and more happiness, too: Read the rest of this entry »

Are powerful people more likely to cheat?

Are people with questionable morals just naturally drawn to positions of power and authority, or does the power that goes with the position change people for the worse?

Researchers at Northwestern University in Illinois and Tilburg University in the Netherlands developed a series of experiments to answer this question.  Groups of student volunteers were asked to recall and write about times in their lives when they were in a position of high and low power, and the process of mentally reliving these events would “prime” the volunteers for the study.  Half the group would be in a mindset of high power and the other in one of low power, and each group was then given one of two tasks to perform.

Half of each group was sent to a private room, given a pair of ten-sided dice, and told to report to a lab assistant the number from 0-100 they rolled (the first dice rolled was the tens digit and the second was the ones digit).  The lab assistant would then give the subject a corresponding number of lottery tickets for a drawing to be held after the study was completed, so the higher the number they rolled the more tickets they would receive.  There was no one to witness the rolls of the dice and the participants were on the honor system to report the number to the lab assistant.

The results: Read the rest of this entry »

What's your definition of failure?

Before I give you my definition I want you to stop for a second and think about your personal definition of failure.

Is your definition of failure not accomplishing something you set out to do?  If this is the case, then every “successful” person you’ve ever heard of is a failure.  People typically don’t get things right the first time they attempt them, or the second, third, or fourth time for that matter.

Thomas Edison is said to have tried at least ten thousand different ways to perfect the incandescent light bulb.  When asked about his failures he simply replied Read the rest of this entry »

Learn everything you need to know to start your own business

My friend Ryan at PlantingDollars.com contacted me a few weeks ago about an idea he has to start a niche travel website for the Waikiki beach area of Hawaii.  This is a guy who decided a year after receiving a Bachelor of Science in Finance to buy a one-way ticket to Hawaii and pursue his dreams.  He’s a motivated, determined young man and I’m sure he’s going to succeed at whatever he sets his mind to.

One of Ryan’s goals is to have a million dollars in investments by the time he’s 40, and he knows one of the best ways to reach this goal is to start his own business.  We’re going to follow Ryan’s progress as he develops his business plan and takes all the necessary steps to ensure his business is successful.

Ryan’s not the only person I know who would give their eye teeth to chuck the 9-5, ditch their cubicle, and join the ranks of the successfully self-employed.  If you’re one of these people be sure to subscribe to my RSS feed so you can be automatically notified when the next article on how to start your own business is posted.  I’m going to cover everything you need to know to create a successful business step-by-step over the next few months just like I did with the “Develop your own marketing plan” articles.

The following nine topics are the key to business success and we’ll be using them to guide Ryan’s (and possibly yours) planning process: Read the rest of this entry »

Know when to outsource and when to do it yourself

Companies and the government know it’s more cost effective to hire contractors to do certain kinds of work.  It just doesn’t pay to attempt to do everything in-house, especially highly technical work and routine administrative jobs.  Most of our IT staff and administrative help are contractors, and about half of my department’s positions are contracted out.  It’s a good working arrangement for us because if we need additional help we ask for more contractors and when there’s less work the contractors move on to other jobs.  Not always the best deal for them necessarily, but our contractors are compensated well and their kind of work is still in pretty high demand so ours always have someplace to go when they leave us.

So if it’s advantageous to outsource highly technical work and administrative jobs why do we insist on doing everything for ourselves at home? Read the rest of this entry »

Run your personal finances like a corporation

Wouldn’t it be nice if your life and personal finances were run as orderly and efficiently as a major corporation?  Follow these 5 steps and you’ll be well on your way to running your personal finances as smoothly as a well-oiled corporate machine.

1. Get approval for major purchases.

Even if you have a corporate card with no credit limit you’re eventually going to have to answer to the bean counters.  Adopt this attitude toward your personal credit card and ask your significant other to review your purchases and do the same for him or her.  No significant other?  Draft a close friend or family member to audit your credit card statement and in turn offer to do the same for them.  This way your purchases will be as transparent as any corporate financial report and you’ll probably be a lot less likely to make impulse buys.

2. Make decisions by committee.

Proverbs 15:22 says “Plans fail for lack of counsel, but with many advisers they succeed.”  Take this to heart the next time you have a major decision to make, whether it’s for a major purchase, an investment, refinancing, credit card offer, etc.  Read the rest of this entry »

Where's the cash going?

We’re down to the last two financial statements, Statement of Cash Flows and the Retained Earnings Statement.

The statement of cash flows shows where the business got its cash during a particular period of time and how that cash was used.

The retained earnings statement shows how much previous income was distributed to shareholders in the form of dividends and how much was kept to allow for future growth.

The statement of cash flows is useful for answers questions like: Read the rest of this entry »

Balance sheets - assets vs. liabilities

Before we delve into the other three financial statements let me stop and add a few caveats about financial ratios and financial statements.  Using either to compare one company with other similar companies can give you a good idea of the businesses’ financial health but differences in accounting methods make it difficult to get a true apples-to-apples comparison.

For example, if one company values its inventory using last-in, first-out (LIFO) and the other uses the average cost method then you can’t accurately compare their inventory valuations and cost of goods sold.  This is just accounting-speak for saying the one company assumes it sells or uses its newest inventory first, and that’s what gets reported, and the other company averages the cost of its entire inventory.  Neither way is wrong, and we don’t need to get bogged down in the details, I’m just making the point that you can’t come to an accurate conclusion about a company’s finances by looking at a few pieces of information. Read the rest of this entry »

Financial Statements

Companies communicate what their assets, liabilities, expenses, and revenues are in four different financial statements:

- The balance sheet shows at a particular point in time what a company owns (its assets) and what it owes (its liabilities).

- The income statement shows how successfully the business performed during a period of time by reporting its revenues and expenses.

- The retained earnings statement shows how much previous income was distributed to shareholders in the form of dividends and how much was kept to allow for future growth.

- The statement of cash flows shows where the business got its cash during a particular period of time and how that cash was used.

For a real world example of a company’s financial statements we’ll use ABM Industries, Inc. (ABM), a buildings maintenance and services company I picked for Financial Samurai’s Samurai Fund.  Read the rest of this entry »

"He's dead, Jim"

Anyone who’s familiar with the original Star Trek series knows the term “red shirt”.  These are the hapless crew members whose sole purpose in the plot is so Dr. McCoy can say “He’s dead, Jim.”

They’re routinely zapped, vaporized, stabbed, blown up, and dispatched in a variety of ways by alien life forms.  They gave their lives so drama could be added to dangerous situations without harm having to come to one of the main characters the plot revolved around.

It makes you wish you could be a fly on the wall so you could eavesdrop before they beamed down – I’m sure their conversations went something like “Hey, did you hear Johnson is going to be part of the away team beaming down to the new plant with the Captain, Spock, and Dr. McCoy?” “No, that’s too bad.  Dibs on his bunk!” Read the rest of this entry »