Saturday, January 29, 2011

The importance of asking the right questions and looking at everything with fresh eyes.

The importance of asking the right questions and looking at everything with fresh eyes.
In some of my conferences I tell the participants that a good way to live your life is to have the discipline to save 10 percent of what you earn, give away another 10 to charity and invest 10 percent in education, either buying books, tapes, DVD’s, or attending conferences. Doing this, will keep you in a constant learning mode and will allow you to continue asking questions until your last breath. When you stop learning or when you stop growing, you start to die.
By the way, there are not many instances when I can invite all of you my dear readers to one of my conferences free of charge. I will be at the teatro Inter Metro of Interamericana University on Saturday February 5th from 9.30 to 11.30. You can register at
I promise you that you will get a lot out of the conference and it will make a positive change in your life.
Getting back to the subject of asking questions and looking at what is around us with different eyes, we can do a very interesting exercise.
Take a close look at your right hand. Pay close attention to the lines, shapes and patterns in your skin. Notice how your veins are arranged. Look at how your fingernails meet your fingers. Compare each fingerprint in your fingers with each other. When
Ok, when you have examined your hand carefully, figure out what you don’t know about it. Ask yourself five good questions about your hand.
What don’t you know about your hand?
For sure that there are hundreds of details that you don’t know. You can wonder how much your hand weighs, or why is it that you have lines in your palms. Do they really carry esoteric meanings like so many hand readers claim?
You could have taken another approach in analyzing your hand. You could have thought about the mechanics of your hand. How many bones does it contain? You could have looked at the function of your fingernails. How long do they grow in a year? How fast do they grow? When do they stop growing if indeed they do?
Or you could have thought about hand function. Why is it that only 10% of the people favor their left hand over their right one?
Besides the tangible ideas about your hands, you could have leaned toward philosophical questions. If an open hand means “congenial” and a closed fist stands for aggressiveness, what does a hand that is half open or closed mean?
You could have let your imagination consider imaginary notions. What if hands were twice as large as they are now? How would that affect the world we live in, typewriters or even fashion?
Or, could you have thought about the evolution of the hand? Why did humans end up with five fingers? Why not six, seven, or four?
The point I am trying to make here is illustrate how questions can also stimulate a sense of wonder, a sense of curiosity, a sense of prodigy over the universe. When you take a look at the objects around you, you are just one thought away from admiration. You are also closer to being an innovator, inventing things or solving problems.
There is a famous Zen story I read in a book by Roger von Oech years ago about the role of knowing, learning and wonder. A Zen student enters the enlightened master’s home for the first time. The master serves tea, a tradition before discussing ideas. He fills the student’s cup to the brim, and then deliberately keeps pouring. The bewildered student says” “The cup is full. It will hold no more”. The master stops, looks at the student, and says, “Like the cup, you are full of your ideas. How can you learn until you empty your cup?”
In our society, it is common to think of ignorance as a sign of weakness, imbecility or ineptitude and that is very unfortunate. Although it is normal to try to appear knowledgeable, the appearance of being knowledgeable can affect negatively our capacity to learn.
The Zen tradition calls this state of mind, the expert mind. The expert mind is the frame of mind we have when we feel we already know something. We hold on to ideas, ideas that we may have studied for years, ideas for which we earned a post graduate degree, and thus close our mind to learning.
If you are in a management position and you know it all, soon your subordinates will stop giving you ideas or will not want to help you solve problems that need to be solved.
Ah, but on the other hand, with beginners mind, we have an empty mind, a mind which is open to fascination. While the expert mind lives in the past and the future, the beginner’s mind lives in the NOW. Someone with an expert mind might not notice a landscape which she drives past every day while going to school, thinking she knows it very well. But a person with beginner’s mind pays attention to every little detail.
How do musicians give crisp performances after a year on the road? They know very well that each performance is the first for a new audience and should be as fresh for the performer as it is for the audience.
Albert Einstein, in one of his many famous quotes once said, “The most beautiful experience we can have is the mysterious. It is the fundamental emotion which stands at the cradle of true art and true science. He to whom the emotion is a stranger, who can no longer pause and stand wrapped in awe, is as good as dead: his eyes are closed.

The consequences of eating more marshmallows than you produce

The consequences of eating more marshmallows than what you produce

As many of you my dear readers know, I wrote a book about delayed gratification titled Don’t Eat the Marshmallow Yet.

Its main concept is that everyone should plan for the future, must understand the value of sacrificing now to get more later and the need for immediate gratification is a problem which can affect people their whole lives.

Well, for years politicians and policymakers have assured the public that the Social Security system, which sends monthly checks to well over 50 million beneficiaries, is in no danger of going bankrupt and is in fact solvent now and for years to come.

Well, surprise, surprise. Federal spending and income data from the Treasury Department reveal that the Social Security program is already in the red, in fact, very much in the red, with expenditures exceeding payroll tax revenues by $76 billion in 2010 alone.

This new development, of course, calls into question the optimistic fiscal forecasts made by the Social Security Administration regarding the program’s future solvency.

You all know that I am a writer and a motivational speaker, and my job is to try to motivate everyone into achieving success, happiness and even financial independence.

Writing an article like this gives me no joy because I have to paint a picture which is not motivational at all but I believe that in times like this, you have to call it as you see it and you have to be realistic so that you can deal with whatever obstacles come in the future.

The annual report of the Social Security Trustees, published in August 2010, forecast that the primary Social Security program, the Old Age and Survivors Insurance Trust Fund (OASI) would not exceed its tax receipts until 2018.

Imagine my surprise when I found out that it already happened in October 2010, eight years before it was supposed to happen. In 2010 the outlays for the OASI funds were about $580 billion, while receipts came to only $540 billion. You don’t have to be a genius to figure that a $40 billion shortfall in one year could develop into a very serious situation.

In fact, it is even worse, unfortunately. If you add the deficit from the second Social Security fund, the one that deals with Disability Insurance and the gap between total SSA outlays (707 billion in 2010 according to the Treasury) and tax receipts (631 billion) grows to $76 billion, more than 10% of the program’s expenses.

What happens when you eat 10% more marshmallows than what you produce? And to do it in a consistent basis, it could mean bad trouble.

We can clearly see that their short term estimates were off the mark. The SSA trustees had estimated a $41 billion deficit (excluding interest income), but the final deficit came to $76 billion, almost twice what they had guessed. Just as troubling, their estimate for total SSA income in 2010 (which included both Social Security payroll taxes and interest paid by the Treasury on the Social Security Trust Funds) was 791 billion, a number that missed the actual income of $741 billion (tax receipts of $631 billion plus interest of about $110 billion) by $50 billion.

Looking at this situation as objectively as I possibly can, the fact that the trustees could miss estimates only a few months into the future by such huge margins makes me doubt the accuracy of their long term projections, which are stated in the report, available to the public, and I quote:

“Social Security expenditures are expected to exceed tax receipts this year for the first time since 1983. The projected deficit of $41 billion this year (excluding interest income) is attributable to the recession. This deficit is expected to shrink substantially for 2011 and to return to small surpluses for years 2012-2014 due to the improving economy. After 2014 deficits are expected to grow rapidly as the baby boom generation's retirement causes the number of beneficiaries to grow substantially more rapidly than the number of covered workers. The annual deficits will be made up by redeeming trust fund assets in amounts less than interest earnings through 2024, and then by redeeming trust fund assets until reserves are exhausted in 2037."

SSA’s estimate for total income in 2011 is $855 billion, fully $114 billion more than the program’s actual income of 2010 (741 billion). With the high levels of unemployment that we have now, and no signs of getting better in the short term, is it logical that there will be a 15% jump in payroll taxes?

To help us answer that question, let’s look at what happened to Social Security receipts in 2009, a recession year and 2010, a year of very discreet economic recovery.

According to the Social Security Administration, the system’s income for 2009 was $807 billion (698.2 billion in the OASI and $109.3 billion in the DI). Income in 2010 was $741 billion, a massive one year decline of $66 billion.

Looking at the significance of this recessionary drop in income, how in the world can they expect us to believe their insanely optimistic forecast of a 15% tax increase in 2011?

As it has been reported, job gains have been very modest in the 154 million worker US economy and many of those jobs created were of a temporary nature or part time. You add to that lower incomes for those brave souls that are self employed, and you can understand why payroll tax receipts have been flat.

I give credit where credit is due. The trustees forecast of Social Security expenditures in 2010 were more accurate than their estimates of income. The report predicted outlays of $714 billion, and it came in at $707 billion. That is not too bad. The report’s estimate of 2011 outlays is $742 billion, an increase of $35 billion, which is higher than the 3.5% ($23.8 billion) jump in 2010 costs over 2009 outlays.

Let’s make sure we understand this: The $742 billion estimate for 2011 is almost equal to 2010 income of $741 billion. That means if outlays were to go up even a bit more than what is expected, or income were to decline from 2010 totals, Social Security would hit a deficit that the trustees aren’t expecting to occur until 2025. Given the fact that already, shortfalls have reached levels that were not expected until 2018, it is not absurd to conclude that whoever is making this projections is not being as realistic as they should be, taking into consideration today’s economic conditions.

What do these figures, these potentially enormous deficits in Social Security mean?

Very simple: The Treasury will have to borrow more funds on the global bond market to fill the gap, (a lot of it from the Chinese, which are not eating their marshmallows) increasing our unprecedented federal deficit.

My advice to you?

You will have to trust yourself, what you can save, what you can do with your finances and not trust social security to solve your financial problems when you retire.

Tough decisions will have to be made very, very soon, and they won’t be pretty. You must be prepared. If you are still young, start saving your marshmallows. If you are retired or almost retired, this might mean that you will have to get another job or that you will have to wait a few more years to be able to retire.

When the money isn’t there, it isn’t there. And, if the deficit keeps growing and growing, it will be more difficult to find countries willing to lend us money, the value of the dollar will plummet and that will affect every facet of our society, including national security.

How money can make you happy or miserable

How money can make you happy or miserable?

Happiness is probably the bottom line for every action human beings take. Why would we do what we do if not to achieve happiness?

What is the best way to achieve happiness is a question that experts have wrestled with all throughout history.

Sigmund Freud, the father of Psychoanalysis was asked many years ago what a person should do to attain happiness. Everyone expected a very complicated answer based on Freud’s complex, sometimes crooked privileged mind. Yet, his answer was rather simple: “Lieven und arbeiten” which translated to English means “to love and to work”.

What did he mean by this?

I suspect that he meant that people in order to be happy, must find a balance between love and work, to love what you do but not allow it to screw up how you live.

This is very simple advice but in reality very difficult to put into practice. People living in a competitive world, constantly changing conditions, and financial challenges, often need to sacrifice the pleasure of living so as to move ahead or make lots of money to maintain a family and be able to pay bills.

How do you achieve the right balance when you have to sometimes work 12 or 14 hours a day in order to make ends meet? How do you achieve balance when you have to meet deadline after deadline?

Some new research, recently unveiled, is beginning to shed some light on the formula to live a happier live.

Conventional wisdom perceives that money can’t buy happiness but it seems science disagrees. According to some researchers, if you work hard and earn lots of money, you can buy happiness.

I suspect some of you, my dear readers, are now feeling the urge to disagree with me. Hold on; let’s analyze what these researchers say.

A bunch of psychologists led by distinguished professor Liz Dunn from the University of British Columbia and Mike Norton from none other than Harvard have recently published a study that indicate the way people use or spend their money might be more important than how much money they earn or produce.

In fact, the National Academy of Sciences tells us that people’s emotional well being increases together with income only up to $75,000 more or less. Once a person’s basic needs are met, including the possibility to pay bills and be able to afford decent shelter and food, making more money will not necessarily make you a happier person. Happiness fades or lessens after $75,000 because most people don’t know how to use the money to buy happiness.

Isn’t this interesting?

A good question is: How does the mind experience happiness?

Studies show that human beings adapt more slowly to experiences than to material acquisitions. As opposed to material possessions, experiences exist as mental illustrations.

Unless you bought a painting during the life changing trip to Brazil, the experience exists only in your mind now. Experiences like going on a day trip, on a holiday, going to the movies, theater, circus or museum require changes to a daily routine. The more changes that are made, the longer it will take to adapt to these changes. During this simple process, the mind forms or creates memories. As time passes, these memories accumulate and they can be retrieved or revisited.
Experiences are most of the time open to positive recall or reinterpretation and slowly have a disposition to become the core of your identity. In other words, a person’s life is quite simple, the sum of his or her life experiences. Simply put, the more abundant recollections of happy memories the happier the person is.

So, what good advice may I share with you in this article?

Contrary to what I usually write about, especially after having written a book about delayed gratification, there are some ways to buy happiness.

1. Try to invest or buy experiences, not things.
Yes, you need to buy things of course, but if you concentrate on using money to travel to an interesting country or taking a wonderful cruise, your mind will start accumulating happy memories. Planning your trip carefully to increase the number of new and exciting activities that you will participate in, will help you form more memories that will help your mind reinterpret, revisit, and amplify or elaborate these memories, setting a solid foundation for long lasting satisfaction. Purchasing material goods quite often has a negative effect on happiness. Buying shoes, cars, clothes, apartments do result in short term comfort but not on long term pleasure. Purchasing comfort is a way lots of people attempt to eliminate the hurt in their lives but comfort is something human beings get used to rather quickly and it must be practiced over and over again in order to retain that feeling. It’s like a drug addict, a high is experienced, and then fades and you need to do it again and again to recapture that high.
2. Money that you are able to spend on friends and loved ones or with friends and loved ones is money well spent. Life is all about relationships. If you had to live alone, life would not be enjoyable or even livable. Think about it. The happiest moments in your life, were spent with people you like or love.
Some time ago, a study looked at how happy people employed on financial institutions were, six to eight weeks after receiving a substantial bonus. It was found that the manner in which they spent their bonus was a better predictor of happiness than how much money they had received. The ones that spent the money on experiences or social activities were happier than the ones that bought something for themselves.
3. Use logic and emotion before you acquire anything.
Logic is very important, no doubt. Balancing your budget or making sure you don’t over spend is also critical. But don’t forget to be emotional about what you are getting with each buy. An effective way to do this is to divide the must buy from the nice to buy and ask yourself what need each acquisition is satisfying. Let me give you a personal example. Many years ago, in a jewelry store going out of business in old San Juan, I bought a Patek Philippe. It was a horrible decision because what I needed from the watch, to tell time, could have been accomplished with a Timex, a much cheaper watch. In fact, we are talking $5,000 versus $50.00. It took me years to pay my credit card and I don’t have a happy memory from that purchase. Yes, short term, my ego was satisfied but long term, my memory is one of being an idiot for having spent that money. If, that purchase had been combined with some sort of wonderful experience, I might feel different but it wasn’t. Besides, in order to achieve happiness, it is better and more efficient to buy a bunch of smaller pleasures rather than spend a large sum of money in one single purchase. Well, at least I learned a lesson that I have never forgotten and that I will not repeat.
You have already within you, all you need to be able to craft a happy life full of growth and creativity and to be resilient in tough times.
Make it easier on yourself by focusing on people and experiences instead of material possessions or extravagant purchases. Use money intelligently not foolishly.

When is it that you pull the plug?

When is it that you pull the plug?

I have always used sports analogies because they are a microcosm of the world. Even though I have mostly dealt with basketball, swimming, track and field and baseball, I follow other sports as well. Football is one of them although it is not practiced too much in Puerto Rico except in some of the American high schools.
As many football fans know, the New York Giants were recently eliminated from the playoffs with their loss to the New England Patriots
It is very common for the coach to be fired when a team that is expected to make the playoffs, doesn’t make it but the Giants didn’t fire their coach.
For example, the Buffalo Bills, eliminated from the playoffs long time ago, as soon as the season ended fired their whole coaching staff. The fact that they beat the Indianapolis Colts 30 to 7 on their last game of the season didn’t help much. Their final record was 6 wins and 10 losses.
Another interesting case is the Tampa Buccaneers coach, Jon Gruden. This guy led the Buccaneers to a super bowl victory in 2002 but this year, after starting with a 9- 3 they failed to make the playoffs. He went 60-57 in seven seasons as head coach of the Buccaneers, including the playoffs and leaves as the winningest coach in Franchise history.
This is a very important lesson that applies to everyone in sports or business. You are as good as your last victory. You can’t rely on past wins to hold you over if you start losing.
Mike Singletary is also a very interesting case. He was fired after his team, the San Francisco 49ers lost to St. Louis for a 5-10 record. This team entered the season as the favorite in their division, the NFC West and guess what; they lost their first five games for a 0-5 record and broke even the rest of the season.
Three other coaches were fired for non performance, Wade Phillips (Dallas), Brad Childress (Minnesota) and Josh McDaniel’s (Denver)
The blood bath isn’t over yet by the way.
I loved the way Mike Singletary assumed responsibility. In today’s world we don’t have many people assuming responsibility for anything. Most simply look for excuses and it is everyone’s fault except their own.
“You know what; I will put it this way: a personal failure. I am the head coach of this team and obviously wanted us to do better, felt that we could do better,” Coach Singletary said after the game on Sunday. “There are some obvious questions that I hoped would be answered as the season went on, and obviously were not answered. When that happens, you end up out of the playoffs.”
“I take full responsibility for every unanswered question”.
This guy deserves another chance, maybe with another team.
As I mentioned earlier, the Giants didn’t fire their coach. John Mara just announced that even though his New York Giants failed to make the playoffs, Coach Tom Coughlin’s job was safe.
“I am obviously disappointed we didn’t make the playoffs” Mara said, “Everybody in this locker room is disappointed. But that doesn’t mean you blow the whole thing up. He is still the guy we want as our head coach”.
Wow, don’t you think that this coach, after getting a vote of confidence, won’t give his life next season in order to make the playoffs. Wait and see how they make the playoffs in 2011-2012.
In today’s world of instant gratification, of most people eating their marshmallows, where it is no longer “what have you done for me lately” but “what have you done for me yesterday or this morning?” Mara and the Giants are not blaming their coach for the team’s problems (obviously he is not the one that turned the ball over an average of 2 times more per game than the New England Patriots, the players did that) but the point is that it is great to see a team looking at the long term and not the immediate term.
So, now we jump to the world of business. How long will you stay with an employee, executive or a salesperson, to let them develop in the job and develop their skills before you let them go?
Are you willing to “keep trying” with someone who you believe can and should become a star performer?
Or, would you bend to the methodology sports team use and some businesses that demand that you produce results right away or you are out the door?
This is a very difficult question. During my seminars I say that a business should “hire slow and fire fast”. I don’t mean fire right away, but after a reasonable period of time where the employee is given support, training and counseling to make sure that everything that could be done is done.
I do have to recognize that there are examples of organizations that have stuck with their management and the results have been very positive.
The best example ever I think also comes from the world of sports.
After 13 years as a coach, the best he did was a third place in a regional tournament. The next three years after that, his record was 16-10 and 16-9, respectable and then a 14-12, not exactly a super performance.
Well, the pressure was on to fire this guy, many alumni openly asking that he be fired. Be aware that this team had championship expectations and after fifteen years, this guy hadn’t even gotten close to a championship.
What would you have done? Would you have pulled the trigger? Taken a chance with a “name” coach? Would you have believed this man’s performance over 15 years was enough proof that this guy is a loser?
I know that many of my readers are teachers that teach management, marketing, social studies, psychology etc., well, ask the question in your class to see what responses you get.
If you decided to fire him, you would have fired John Wooden, basketball coach of UCLA.
The next ten years, he won 10 NCAA championships, a record that will probably never be broken. During those dozen years, his teams lost a total of 22 games but won 335 of them. He had several two or three perfect seasons when they didn’t lose one single game.
Maybe in today’s “faster, quicker, right now, I want it now” world, it is time we sit down, use our brain, take a deep breath and remind ourselves of the need to understand people, carefully analyze situations before acting irrationally and then hope you make the best decision.
When do you pull the plug? It isn’t easy.