Goals and Goal Setting (Part II)

In the last post I presented a classic goal setting method used in business and project management since 1981. In this post I will present a method to address goals that pertain more to behaviors, The Harte System. The example comes from the National Guild of Hypnotists Level II Training Manual, but it works fine with or without the addition of hypnotherapy.

As with the SMART Criteria, the first step is defining a goal with a definite date. If the goal is giving up cigarettes, the client sets a believable date to end this habit-forever. The questions to ask:

What do I want to achieve?
By when should I achieve this goal?

The next step asks the client to list the benefits that will be derived from achieving the goal. These could vary significantly from patient to patient. Cigarette smoking, wastes money, sets a bad example for children, perhaps it is viewed as a nasty habit by a significant other, and of course they don’t call them coffin nails for nothing.

The first two steps are classified as goals. Dr. Richard Harte differentiates between goals and objectives, “Goals are general statements of intent. Goals tell us what we want to achieve, or how we want to change, or what we generally want to look, be, and/or act at some future time. Objectives differ from goals with respect to their specificity: objectives being more specific than goals. Objectives may also be viewed as statements of intention when carried out, will enable the goals to be achieved.”

The objectives must be doable, acceptable, and believable in the client’s mind. In thinking about these objectives, develop scripts or statements to rehearse when the going gets tough.

Objectives need to be stated in the positive. Say, “I am on the path to a healthy lifestyle.”
Objectives need to be self referenced including words like I or mine.
Objectives need to be stated in the present tense.
Objectives must be measurable.
Objectives are short term (30 days or less)
Objectives should be stated in simple sentences.
Objectives should be brief.

Objectives are achieved by using a three step method.

Thinking: This is where you rehearse the benefits of achieving your goal in words that appeal to the rational mind.

Feeling: This is where visualization is used to experience the sensations that will accompany achievement of the goal. For example, studies indicate the most successful weight loss programs are undertaken by brides to be who wish to wow the crowd with their wedding dress. There is no doubt these young ladies are rehearsing every sensation of that perfect moment when she is the center of the universe, as they are tempted with a box of bonbons.

Action: All methods of creating goals must end with action. List the specific steps necessary to achieve your goal. Then just do it!

Goals and Goal Setting (Part I)

In my mind, I won’t really be retired until my old house is sold and my mother-in-law’s estate has been closed. I still feel like I am in a transitional phase even though I have been retired since January 22, 2013. I have finished or I am closing in on the goals I made for this stage of my life. Now it is time to set some new goals to pursue in retirement. Setting goals is important. If we don’t have goals, it is unlikely we will ever achieve anything of value. One of the best known methods for setting and achieving goals is called the SMART or SMARTER Criteria.

But first you need to have some goals to test and develop using these criteria.

Here is a random list off the top of my head of different areas of your life.

Health and Physical Fitness
Relationships
Personal Development
Career
Financial
Experiences
Material Possessions
Spiritual Development
Contributions

Take any one of these areas, pull out a sheet of paper, and spend five minutes writing down a list of goals. At this point don’t worry if they are good, bad, or silly. Just put together a list of whatever pops into your mind. In brainstorming there is no such thing as a bad idea.

After spending some time brain storming a list of goals, look at your list and pick out what really seems important to you. Not what is important to your mother. Not what is important to your pastor. Not what is important to your wife. What looks really important to you?

Now you are ready to start developing that one particular goal.

S-First you must make the goal specific. Here are some questions that might need to be answered as you move your goal from a nebulous ill-defined dream to something more tangible.

What do you want?
Why do I want it?
Who will use it?
Where will I use it?
Which? (Requirements and Specifications)

M-Next you must make the goal measurable. In this step develop a concrete method of measuring progress towards the attainment of this goal. Here are some questions that might need to be answered.

How much?
How many?
How will I know when the goal has been accomplished?

A-Attainable If you do not believe that you can attain this goal, even if you perceive the goal as extremely desirable, you will not continue to work towards the goal when going gets tough. If you have selected a worthwhile goal, at some point the going will get tough. At this point, ask the question:

How can the goal be accomplished?

R-Relevant (to you) Spend some time looking into your own heart and spend some time looking at your assets and liabilities. (tip from a Tony Robbins story) Always list your assets before you list your liabilities. Here is a list of possible questions for this step.

Is this goal worthwhile (to me)?
Is this the right time to pursue this goal?
Does this goal fit in with the rest of my life?

T-Time Project management requires the definition of task, time, and budget. If you do not set a deadline to accomplish your goal, it is unlikely that you will ever reach the finish line. Once you have set the end date, then you can spend some time examining the time required to accomplish each subtask or step in achieving your goal. If necessary adjust your timeline to fit reality. Otherwise, you will end up violating the attainable criterion.

A couple of suggestions to consider as you are working on developing your goals: Don’t focus on what you can’t do. What you can’t do isn’t important to anyone, especially yourself. Focus instead on what you can do. Secondly, remember that for most people procrastination is the number one enemy of goals. Once we have developed a really good goal and even a plan to achieve that goal, we are inclined to put off implementation until tomorrow. Take massive action. Today!

Retirement Begins at 22 (Addendum)

I feel compelled to spend a little time deconstructing the retirement example that I used in yesterday’s post.

A young couple gets married at age 22. They have little or no money. I like to tell people my wife married me for my money. I had $900 in the bank, a car worth less than $600, and a stereo worth about the same as my car.

This young couple earns a combined gross income of $60,000 a year. $30,000 a year is not an impossible sum by any stretch of the imagination.

Pay attention! I am assuming neither one of these young people ever get a raise or a promotion during their entire 40 year working life. In fact, if they are earning $60,000 a year at age 22, it is more likely they will be earning something like $200,000 a year at age 62 if they both continue to improve their value as employees throughout their careers. Even if the wife becomes a stay at home mom who never returns to the workforce, a family income of $125,000 a year is not unreasonable.

Saving $9,000 a year (15% of pretax income) in tax favored accounts will be tough in the early years, but not impossible. In the later years of this marriage saving $9,000 a year will be insignificant.

Sigel’s Constant, based on a highly respected study of the American stock market from 1802 to 2002, predicts an amazingly constant 6.5% to 7.0% real equity return over sufficiently long periods of time. The return on bonds is more erratic but Siegel’s studies indicate 3.5% is a reasonable expectation.

A 5.5% rate of return on an age appropriate mix of stocks and bonds over a lifetime is not an unreasonable expectation.

Studies indicate that family living expenses in retirement run about 80% of preretirement expenditures. Therefore this couple now 62 needs about $48,000 a year to fund their retirement.

The 4% annual draw has been the topic of numerous industry and academic studies. I have written quite a few posts on this number. Bottom line, somewhere between 3%-5% is a safe number depending on your assumptions.

In is reasonable to assume $1,297,123 will provide an annual income of $51,884 INDEXED TO INFLATION for the rest of your life. You are safe with or without Social Security. Since our couple paid off their 30 year mortgage they can add $200,000 in home equity to their net worth. Their net worth is pushing $1.5 million even if they have very little in taxable accounts.

I know that many of you will not believe this, but the key takeaway is that an average American family can reasonably expect to be just barely millionaires if they buckle down early, avoid debt like the plague, and consistently live within their means. My generation had some time to get their act together and 15 really good years (1985-2000).

If you are young, you may not have that luxury.

Whatever may or may not happen, the best I can do are those things that God and common sense dictate as wisdom. Ultimately, man is not in control of his own destiny, much less that of the entire world. Our leaders can not be assured that their plans for the economy will work for even a day, let alone a ridiculously short period of time, like a thousand years.

Make your own assumptions. Make lots of different assumptions. Feed the numbers into any one of the many retirement calculators that can be found on the Web. It will not take you long to discover about what it take to fulfill your dreams.

Proverbs 3: 5-6

Trust in the Lord with all thine heart; and lean not unto thine own understanding,
In all thy ways acknowledge him, and he shall direct thy paths.

Retirement Begins at 22

Fifty years ago retirement was not a serious problem for most Americans. There was a covenant between American industry and the American worker, “Give me the best 30 years of your life and I will help Social Security take of you in your old age.” There was a third leg to this stool, but it wasn’t critically important. A pension plus Social Security would cover your need for income in retirement. The third leg, your savings, particularly the equity in your home would provide the diligent, responsible American retiree with a few quality of life luxuries, like that Mediterranean cruise your wife always wanted. Americans sold their big homes in expensive cities in the North where there were good paying jobs. They moved south, somewhere warmer and cheaper, bought a small house, and lived happily ever after.

In the 1970s the covenant began to unravel. Big unionized industries like the automobile business passed peak employment. In some of these industries like integrated steel, producers like Bethlehem went out of business or like U.S. Steel mutated into an unrecognizable multi-national conglomerate that no longer needed very many American workers. Even low wage industries like textiles and the garment trade left this country for cheaper labor and fewer regulations.

In shouldn’t have surprised anyone that once Bethlehem when bankrupt, it would only be a matter of time before its pension fund was exhausted and that is exactly what happened.

Then, in 1978 an obscure change was made to the IRS code that would revolutionize everything. Originally intended as a loophole that would give wealthy executives a tax break on deferred income, the 401 (k) plan became a simple tax-advantage way to save for retirement. Unlike the traditional defined benefit plan that guaranteed a pension to a retired employee, the 401 (k) shifted all of the risk and most of the expense of saving for retirement from the company to the employee. Needless to say, American corporations loved that idea.

Today, only 35 years later, the once sacred defined benefit pension is almost gone. It only remains in a few unionized industries and the public sector. Many of these public sector pension systems like CalPERS, The California Public Employees' Retirement System, are headed towards bankruptcy. It is unlikely they will survive in their current form for another 20 years. The cost of guarantees to public sector employees is growing faster than the economy of California. California already has the fourth highest tax burden in the country. It is rated as the 41st on the list of overall state business climates. If taxes can’t be raised, if the tax base isn’t likely to grow, but the demands on municipalities continue to increase, expect to see more municipal bankruptcies in places like Vallejo where the taxpayers can no longer pay their retired civil servants.

The graph at the beginning of this post demonstrates that the future of Social Security does not look very secure. While there is no immediate danger of bankrupting that incredibly important social service safety net, when the baby boomers, like me, pass from this vale of tears the cupboard is likely to be pretty empty.

If you live long enough, the day will come when you will no longer be able to perform your job. It is likely that sometime before that day arrives your job will cease to be the source of satisfaction that once made it a central component of your self esteem and happiness. When that day comes you will want to be able to retire. Unfortunately, funding your retirement is now your responsibility. If you start early this will not be difficult. If you are distracted for too many years by other considerations, like getting married, buying a home, and raising a family it will be much harder.

A simple calculation based on the widely recommended rule of thumb for retirement savings (15% of pretax income deposited in tax favored accounts) for a combined family income of $60,000 over the course of a 40 year career nets $1,297,123 at a reasonable 5.5% rate of return on your investments after taxes and inflation. This amount nets a safe 4% annual draw of $51,884 in retirement. Add $20,000 a year from Social Security (but don’t count on it) and you’ll be OK. The bad news is this will be hard for a young family. The good news is that once the kids are gone, you will be reaching your peak earning years just when you will be finished paying for college tuition and that 30 year mortgage. In the last 10 years you should be able to save a lot more than 15% of your pretax income and still take a nice vacation every year.

Investing 101

Earlier this month I presented posts on the first two steps to financial freedom, escaping the debt trap and saving. Now let’s assume you have dumped your most toxic debt or at least have it under control and let’s assume you have at least three months take home pay or three months expenses in a boring federally insured account somewhere. As soon as you have an extra $3,000 in your pocket you are ready to start separating yourself from the average American. There is one exception to these general guidelines. If your employer offers any matching money with your 401-K or equivalent, grab it as soon as possible even if you have to sacrifice lifestyle or get a part time temporary job. You simply can not beat 100% guaranteed instantaneous tax free return on your money, anywhere.

Just do it. Don’t worry about making mistakes. I assure you. You will make mistakes.

If you start early in life or even in your middle years, time and compound interest are working in your favor. There are only two mistakes that are really dangerous, investing too much money in any one vehicle or investing too much money at one time. I have written so much about diversification I get tired thinking about it. One more time, if you have no more than 2% or 3% of your liquid net worth invested in any one company, losing 50% of your money in that one company doesn’t really matter in the long run. Likewise, don’t put all your money in the market (or anything else for that matter) at one time. Invest small amounts systematically over the entire course of your working lifetime. Leave it alone. Reinvest the dividends. Let time and the miracle of compound interest work for you instead of against you.

Let’s assume you start with your tax favored 401-K. Most likely you will be offered a selection of bond and stock funds. More recently lifecycle funds have been added to the menu.

My former employer the Department of the Navy offers.

G Fund – Government Bonds
F Fund – A mix of Government Bonds Corporate Bonds and Mortgage Based Securities

C Fund – Shares of Medium to Large U.S. Companies
S Fund – Shares of Small to Medium U.S. Companies
I Fund – Shares of International Companies (22 Developed Countries)

Put your money in all five. The old rule of thumb would have your age split between the G and F funds. Hence put 30% of your money in G and F if you are thirty years old. The new rule of thumb suggests 15% less than your age due to inflation risk. Hence 15% if you are thirty years old. Split the rest between the C, S, and I funds. Again, if you are younger put more of your money in the more risky S and I funds, less in the C fund. Rebalance your holdings to maintain your desired distribution percentages about once a year or more often if the market does something strange.

If you don’t want to worry about distribution percentages, just put it all in the appropriate lifecycle fund for your age. As you gain knowledge and experience you will become more comfortable making your own decisions, but start an investment program today.

Starting a taxable account is no different. Begin building a base of LOW COST mutual funds or their more modern brothers, the Exchange Traded Fund. If you mimic the offerings in the list above in your investment account or invest in a commercial lifecycle fund that would be a good start.

Do not pay a salesman a commission to invest your money, ever.

Do not pay 12B-1 fees, ever.

Pay very close attention to the total expense ratios associated with any of these investments. Generally speaking, the less you pay the better. Vanguard is no longer the only low cost player in town, but always check out their products before making a decision. Fidelity, Schwab, BlackRock, and I-Shares are some competitors with decent offerings.

If you have already paid a salesman a commission on any of your investments, that money is lost forever, just don’t repeat that mistake. Depending on how the fees are structured it may be better to leave that money alone or it may be better to sell those shares and move the money into a low cost equivalent. That can be a hard call, because the fees are hidden in pages of fine print crafted by attorneys who are paid large sums of money to protect the mutual fund company’s interest.

Yes, some managed retail mutual fund with sales commissions and fees will beat its equivalent index over a given ten year period. The problem is picking the winner in advance. In any given year only 1 in 4 mutual funds beat the index. Over the course of ten or twenty years that number becomes diminishingly small, much less than 1%. You have a much better chance of picking the 2025 Super Bowl Winner out of a hat than picking a retail mutual fund that will beat its low cost index equivalent.

Once you have a solid foundation of low cost fees, you are ready to start investing in individual stocks. For most people these funds would be in a tax favored account of some sort. When you buy shares in individual companies, do as Warren Buffet does. Tell yourself, “My preferred holding time is forever.” Of course, if your shares tank, sell them. Take the tax loss and move on. If they go up so fast you can’t sleep at night because you are afraid they will fall just as fast, sell your shares. It is said that God put over half the bones in the human body in the hands and feet so that we can take the money and run. Warren Buffet also suggests that you tell yourself that you are only allowed to make 20 stock buys in your entire life. Do extensive research before you put your money down.

And please, “Let’s be careful out there.”

If All Else Fails, Change Your Expectations

This is a hard one to write because I am still looking for the answer. Recently I became involved in a discussion of the question of vocation. This question takes different forms, “What is my dream job?” “What is the will of God for my life?” If I do what I love will the money follow?” or more simply “How do I find happiness and fulfillment in my career?”

So many authors have observed that happiness occurs in some aspect of our life when there is a close match between expectations and reality that I am not sure who should get credit for the idea. Disappointment arises when our reality fails to match our expectations.

I suppose this question has never been easy for anyone in every area of their life. However, our current culture and value system almost guarantees our unhappiness. The entire marketing machinery of the world is specifically geared to make you unhappy, dissatisfied with at least some aspect of your life. Think about it. Over $70 Billion a year is spent on television advertising. That does not include the cost of producing the ads. Some of the most intelligent creative people in our society are dedicating their lives to making you dissatisfied, unhappy, disappointed. First they convince you that you have a problem. Then they tell you if you buy their product your problem will be solved.

Unfortunately, their product will not solve your problem.

In our minds, needs and wants become hopelessly confused. I need a roof over my head. I want a nice new 2,500 square foot home on one level in a desirable neighborhood inhabited by people who share my values and tastes. Even if we manage to separate needs and wants, we don’t understand what is really driving our wants. Sometimes our wants are perfectly appropriate and reasonable. Sometimes our wants are unnatural and destructive. Sometimes good and evil are so hopelessly entangled in our wants it is difficult to separate or even understand what is driving us to do what we do.

I know a woman who expected to teach elementary school, marry, and have children. Not only did she meet these expectations, but she excelled in each of these roles. After her children left home she began to work with children in her church. Now she is a full time children’s minister running a successful program at a large church. She is deeply satisfied with the vocational aspect of her life. She should be. She exceeded all of her vocational aspirations. Unfortunately, not every area of her life has been so rewarding.

If the child from a sinkhole of rural poverty grows up and runs a motorcycle repair shop down in the county seat. He may become the most successful and respected member of his family. If the son of a heart surgeon opens a motorcycle repair shop in the same town, his family will likely view him as a failure and perhaps even as an embarrassment. It is all in our desires, our expectations.

Sooner or later all of us will have to deal with the death of our dreams. We will need to change our expectations to conform to the changing, impermanent nature of our lives. The most obvious example is the professional athlete. Even Joe Montana, the most successful quarterback of his generation, a man who wears 4 super bowl rings and a college national championship ring had to give it up and find his source of satisfaction and happiness in other pursuits. Some athletes find a way to channel the fire, drive, determination, and discipline that made them great into a new career. Some find happiness in reliving old victories and enjoying their well deserved retirement. Some blame others for the end of their career. They become compulsive gamblers, drug addicts, or alcoholics. They turn up in the news when they are arrested for dealing, driving under the influence, or beating their wives.

I have been taught that if I conform my life to some Christian ideal that I will find happiness and fulfillment in Jesus regardless of circumstances. I can’t say that I have ever seen this successfully modeled by people I know. Even the very finest Christians seem to wrestle with the suffering and disappointment in at least some area of their lives. I know a woman who is an outstanding Christian. She is a kind, loving person. She is devoted to prayer, the study of scripture, and her church. Still she is profoundly unhappy. So many other aspects of her life are unhealthy and severely disappointing. I am sure she would attribute this unhappiness to sin in her life and her failure to walk in the Master’s footsteps. All I can say is that if this is so we are all in real trouble.

Mother Teresa of Calcutta, the greatest example of Christianity of my lifetime, was a profoundly unhappy person for most of her life. In spite of the fact she devoted her life to vows of chastity, poverty and obedience, and the fourth vow, to give "Wholehearted and Free service to the poorest of the poor,” she spent years sensing the absence of the Savior she adored.

Look deeply into your own heart. Try and separate your needs and the need of your family from your desires and your wants. Spend time in mindful consideration of what is driving your expectations. Are your motivations realistic? Are they healthy? Do they belong to another? Perhaps, your expectations really belong your parents. Perhaps they are nothing more than the traces left in your mind by the magic of a clever advertising executive.

Then look around. What jobs are available that will provide your family with their needs without destroying your soul? There will always be more than one path. Whichever path you choose your Heavenly Father will still love you and want to be a part of your life. Be an honest, reliable, diligent employee wherever you choose to work, understanding that in the end you are not working for man, you are working for our Lord and the perfection of your own soul.

Save Anyway

This post started life in my mind as a simple introduction to the next step after avoiding or eliminating debt, savings. As I began to examine the problem, I realized there were two reasons that people don’t save. They don’t believe it is possible to get out of debt. They believe the game is rigged. From time to time I use this quote from the notorious card sharp and conman Canada Bill Williams. Once one of his victims complained the game was crooked. Bill answered, “Yea, but it’s the only game in town.”

There is nothing I can do about the fact that the Federal Government and The Federal Reserve Bank mercilessly punishes savers. The Fed has driven interest rate to zero. The IRS treats interest from savings as income. It is taxed at the highest rate possible. On the other hand, the Government allows you to deduct the interest on your mortgages, even that second mortgage you used to buy an SUV you couldn’t afford.

Don’t you see what is going on here? The banks are using Government policy to keep you in debt slavery. In simplistic terms, you are giving the bank three dollars. The Government gives you one dollar in a tax refund. You lose two dollars. If you don’t give the bank any of those three dollars, the Government will take one of those dollars away from you. You keep two dollars. The game is crooked.

It shouldn’t surprise you that since I am a Christian, I talk to Christians. Some of these people have faith in our Lord that just puts me to shame. They pray for healing, really believing in the power of prayer to deliver those who suffer from the bondage of sickness. Some of them have seen miracles in their own lives. Some of these same people look me square in the eye and inform me, “Well, you have to be in debt.” They have learned not to challenge me on credit cards and car loans so they add, “You have to have a mortgage.” Well, no you don’t. You choose to have a mortgage. You can always rent. It may be a wise decision to take out a mortgage, given the particulars of your situation, but nobody made you do it.

In 40 years as a Christian, I have never once heard a sermon on the evils of debt even though the Bible is full of warnings on the subject. I asked a friend in the ministry why was this so. His answer, “Probably because all preachers are in debt.” Worse, the Church is in debt. Why doesn’t bother believers that the House of God is owned by the bank?

Anytime anyone asks you to give them a portion of your freedom or your money; be suspicious. Whether it is a politician who is offering you something for nothing or creating a crisis that requires a sacrifice “for the children,” or a marketer telling you that you must go into debt to have a marvelous new product, be suspicious. Better yet, just say, “No!”

You can avoid or escape debt. Once you are out of that trap, buckle down and save. I am assuming you already have an emergency fund started before going after your debt. Savings are the beginnings of investment. Investments are what make an individual, a company, or a nation rich. Once all that money that is now going to the bank and the credit card company is free, you will be surprised just how much you can save. Yes, you will be punished for doing the right thing. Do it anyway. Once you have saved $1,000 you can open a Schwab account. Once you have saved $3,000 you can open an account at Vanguard. Then you can start using your dividends to buy more shares for most American companies and mutual funds at no charge. You can start benefiting from capital gains that are taxed at a lower rate, just like those evil rich people.

You don’t get to make the rules, but given the rules, you get to decide how to play the game. No matter what the rules of the game might be, someone is winning. I want that someone to be you. That is why I am up at 6:00 writing this rant.

May you be blessed. May you be delivered from debt. May your net worth increase. May you learn to give and become a blessing to the world. Amen.

Change Your Heart Change Your Life

What do you really want? What makes you really happy? I think if we are honest, we want health, good relationships, a meaningful life, and enough. How all those desires or lack of desire works itself out in detail of life will be different for you than for me. Health to one person might mean the ability to run a marathon. Health to another person might mean the strength to find her children a source of joy rather than a source of exhaustion. One person might want 100 friends. Another person might want 4 “real” friends.

There is a famous story about an author who was invited as a celebrity guest to billionaire’s party. Another guest speaking with the author observed, “Our host has made more money in a single day than you have earned in your entire life.”

The author replied, “That’s OK I have more money than he does.”

His friend asked, “How can you say that? He is one of the 500 richest men in the world.”

The author smiled, “I have enough.”

What kind of person do you really want to be? How would that person act in different situations?

In seeking a spouse there are really two questions. What kind of husband or wife do I want? In seeking a spouse it is good to have a list of non-negotiable characteristics and a list of desirable characteristics. Get a clear picture of the kind of person with whom you could share a life. Then ask yourself the second question, “Am I the kind of person this man or woman would want to marry?” If the answer is no, you need to change your desires or you need to work on yourself. From my experience, probably both are true.

Once upon a time two Bedouins met by chance traveling in the desert. That evening they shared a campfire. One of the travelers shared that he had spent the last several years on a quest to find the perfect woman. He related his adventures. In this city he found a beautiful woman who had bad values and little in the way of intelligence. In another city he found a woman who was a diligent worker but was quite ugly. He went on with his story until he announced with joy, “Finally I found her. The perfect woman! She was a good worker, beautiful, brilliantly educated, and Godly.” Then he fell silent.

The other traveler asked, “Then what happened?”

The man sighed, “Nothing. It turned out she was looking for the perfect man.”

I think that if we are honest, we understand that we must give to get. This is true in health. Some effort is required to maintain our health. This is true in relationships, especially marriage.

It is also true in money. Ultimately most bad people, no matter how wealthy, come to bad ends. Criminals are the most obvious example of this truth. A successful criminal must be very smart and very lucky to stay in business. It doesn’t take long for success in crime to attract the attention of the police. Once they know your name they have all the time and resources of the state at their disposal to track you down. Likewise, as a criminal, you need to worry about your accomplices and the competition. Most career criminal end up dead or in prison.

“Neutron Jack” Welch earned his name by firing tens of thousands of workers. It was said that like a neutron bomb he destroyed lives and left buildings standing. He made GE one of the most feared, respected, and profitable corporations in the world. But at what cost? Under his command GE Capital became roughly 1/3 of the company. In 2008 the collapse of GE Capital nearly drove one of the greatest and oldest corporations in the world into bankruptcy. Some legal maneuvering saved the day. GE Capital became a bank, making it easier to tap the Federal Government for a lifeline. Neutron Jack became the laughingstock of the financial world when his second wife, a lawyer who understood her prenuptial agreement, nailed his sorry philandering ass to the floorboards. In one of his books, Welch admits that his children (all by his first wife) want nothing to do with him. Yes, he is still wealthy, respected, and feared, but he has become a cautionary tale of wealth misused.

If over time you consistently give back more to world than you receive, you will be blessed. I really believe that. Give your body good food, enough rest, and an appropriate amount of exercise. It is more likely to reward you with good health. Wake up each morning with the intention that you will give your wife or husband more than you receive. Be a good, reliable, trustworthy friend. Strive to become worth more to your employer than your salary. As God blesses you with wealth, share it with others.

Amen

Don't Wait for the 100th Monkey

Here is how the story goes. Once upon a time, Japanese researchers studying snow monkeys were having trouble getting the simians in front of their cameras, so they started putting out sweet potatoes as an enticement to get them to come out in the open. The monkeys really enjoy sweet potatoes. However, the macaques had a problem. The researchers were leaving the sweet potatoes out on beaches. They would get covered with sand. The monkeys had to pick the sand off the sweet potatoes. This was an annoying, time consuming task. Then one day, one the apes dropped her potato into a tidal pool. All the sand was instantly gone. Maybe, she also liked a little sea salt on her sweet potato. Who knows? She started washing her sweet potatoes in water on a regular basis. The other monkeys watching this process began to imitate what they had witnessed. This new information spread in a predictable linear manner until it reached 100th monkey. Then, instantly through some sort of psychic communication all of the monkeys on the island knew how to wash sweet potatoes, even if they never witnessed the process. New age writers popularized this myth until it reached urban legend status.

The truth is much more prosaic. The smart apes, like smart humans learned through vicarious experience. They watched a superior method demonstrated by one of their own kind. Then they asked themselves two very important questions.

“Is this worth doing?”

“Can I do this?”

In their monkey minds the answer to both questions was, “Yes,” so they started washing their own potatoes. The number of monkeys who wash potatoes rather than picking at the sand rises and falls over time. Not surprisingly, the offspring of the smart (informed?) monkeys are more likely to wash their potatoes than their not so smart or informed cousins. There could well have been a monkey equivalent to Sir Isaac Newton and the apple, but as far as anybody can tell, the monkeys just learned from modeling each others’ behavior.

Monkey see. Monkey do.

Now look around. Is anyone getting the results in their life that you want to see in your life? Ask yourself two questions.

“Is this worth doing?”

“Can I do this?”

The answer to both of these questions when applied to most financial problems will be yes and yes.

Are you a student facing the cost of college? There are ways you can avoid losing ten years of your life to student debt. Start with Pell Grants and junior college. Get high grades and you just might land a scholarship at a quality state school for the last two years. Apply for every scholarship under the sun. You can’t win if you don’t enter. Find an employer who will fund your education. I even know a woman who worked at a job she didn’t like for a year in an enterprise associated with an expensive private university. She used the network she built over that year to land a job as a graduate teaching assistant. Her seniority plus her new part time job netted her a full free ride to a Master’s degree.

When you get your first credit card, decide that you will not use the thing unless you can pay it off every month--without fail. If you ever fall short of that goal, even one time, lock up your credit card until you pay it off. Use some cash in designated envelopes, your debit card, or paper checks until you get rid of that credit card debt. The longer I live the better I like the 80 year old envelope system.

Don’t bite the hook! You can live without a car note. What if you paid $3,000 cash for a Toyota pickup truck? Those things are cheap to repair, get pretty decent gas mileage, and last just about forever. After eight years driving around in that rust bucket you will probably have enough cash set aside in that new car envelope (electronic envelope please) to pay cash for a new BMW.

What if you manage to pay off your mortgage early? All of a sudden you will get the biggest raise of your entire life. It will shock your socks off. If your take home pay is $3,000 a month and your mortgage payment is $1,000 a month you have effectively received a 50% after tax increase in your take home pay! If you were able to whack ten years off your mortgage, that is an extra $120,000 in your pocket. What could you do with that kind of cash money in your pocket? A new sports car? Vacation in Hawaii? Investments that pay dividends in your brokerage account? How about all three?

Speaking about those investments, wouldn’t it be nice if you didn’t have to worry about retirement, your grandchildren’s college expenses or your children’s retirement. Yea, those are big dreams but they are all possible. It’s only money.

Oh, one more thing. As you learn from those smart monkeys, you will be in a position to give. I can’t say enough good things about giving. Start today. Give of your wealth, even as the Lord increases it. Don’t limit your mind to just money. Money is the lowest type of giving. There are four levels of giving money, time, emotional energy, and the precious gift of an open heart. You will find that they nest like those little Russian dolls. The greater gift always contains the lesser gift.

Please don’t wait for the first 100 monkeys to give you some kind of psychic insight. Start watching today. Open your mind. Learn how to wash your own potatoes.

Let’s start something together. Maybe if enough of us learn these basic lessons, something dramatic will shift in the tectonic plates that underlie our culture. Wouldn’t that be cool?

Dusty Rhodes and The American Dream

There are basically two methods to systematically reduce your debt. One is called the Debt Snowball. The other is called the Debt Avalanche. There is a third method that can be used by itself or to supercharge either the snowball or the avalanche. It is called the Debt Snowflake. Either the Snowball or the Avalanche will work when combined with unrelenting effort and patience. Neither of them will work unless you get your emotions involved. When you are sick and tired of being a debt slave, so sick and tired you just can’t stand it anymore, it is more likely that you will persist when the going gets tough.

First let’s quickly review the basic methods of debt reduction. More detailed descriptions of these methods can be found in this blog or other web sites. Then let’s talk about getting angry.

Dave Ramsey promotes a method of debt reduction called the Debt Snowball. It is not the most financial efficient method available but Ramsey contends that for sound psychological reasons it is the method most likely to succeed.

The method works as follows. First rack and stack your debts starting with the smallest and ending with the largest. Do not consider the interest rate.

Make the minimum payments on all your debts. Then take all the extra money you can afford on a monthly basis and go after the smallest loan first. Once the smallest debt has been repaid take all the money you were paying on that debt plus the minimum payment on the next largest debt until debt number two is paid off. Repeat this process until all your debts are repaid.

It is called snowballing because as you pay off each debt you have more money available to pay off the next debt, like a snowball rolling down a hill. Ramsey believes that extricating oneself from debt is 80% an emotional problem and 20% a matter of knowledge. He believes it is better to go after quick attainable goals to build a psychology of success.

The debt avalanche is the more traditional and mathematically correct method of debt reduction. It is called an avalanche because it starts small but becomes very large and powerful as time progresses. In this method the interest rate is everything.

First ask your credit card providers to lower their rate. Obviously this works for the debt snowball as well.

Rack ‘em and stack ‘em according to interest rates. This time differentiate between good debt and bad debt. Typically “bad debt” would include credit card debt, Home Equity Line of Credit (HELOC) loans, and store loans (furniture and appliances). These loans would typically have higher interest rates. “Good debt” would be limited to car loans and your first mortgage. Personally, I don’t differentiate between good debt and bad debt.

Continue to pay the minimum on all your debts and use any extra money you have to go after the credit card with the highest interest rate, then progress to the next item on the list adding the money freed by paying off the previous item until all debts are paid in full.

The Debt Snowflake could be used by itself or with either of the other methods. It is a pretty simple idea. One snowflake falling on the ground is no big deal, but thousands of snowflakes over a very long time results in large accumulations even in a desert, like Antarctica, where the measured rainfall (snowfall?) is less than ten inches a year.

Decide not to put that $3.50 latte on your credit card? Good for you but don’t stop now. Put the expense you didn’t make in a note book or put the cash in a jar. Then at the end of the month or sooner if the amount is large use that money to pay off the credit card. Make it a game.

Anything can be a snowflake, a small debt repaid by a friend or even the difference between a brown bag lunch and the cost of the company cafeteria. Snowflakes can also be proactive, the return on a yard sale or pay from a part time job. Don’t limit yourself to thinking that all snowflakes are small. Some snowflakes, such as tax refunds or inheritances could be quite large.

Now get angry. Dusty Rhodes aka The American Dream was a TV wrestler back in the 1980s. He was not particularly athletic but boy he could act. Before a grudge match against an evil enemy he could deliver a rant that would make a televangelist green with envy. He would recall all the outrages he had suffered at the hands of his opponent and then guarantee a bloody vengeance.

Go ahead and tape copies of those credit card bills to your refrigerator and talk to them.

“Mastercard. You put hard times on the dreams of the American people. You put hard times on my American Dream, but yo’ balance is goin’ down.”

“I’m goin’ show you some hard times. I’m goin’ to take back from you what you value most, my money and my life. My life and my money belong to me.”

“Mastercard. There is two bad people on this planet. One of them is John Wayne. He’s dead and you lookin’ at the other one.”

“Mastercard. I’m comin’ for you!”

When you are about to make an impulse purchase, perhaps a pack of cigarettes at a convenience store, stop for ten seconds, then say to yourself (you don’t want the clerk to trigger the alarm), “Bad habit, you been fuelin’ my debt for 20 years, but today you is goin’ down.” Then threaten your vice with the feared bionic elbow.

Finally the day will come when you put that Mastercard in the dreaded figure four death lock. When you have the bank screaming in pain, take that card and throw it into the shredder.

Go on and have a little fun.

Dusty Rhodes Hard Times Promotion

P.S. If you don’t want to release your inner TV wrestler, go ahead and visualize your guardian angel going after your debts or bringing you money from your heavenly bank account. I don’t care how you do it but, get your emotions involved. It is easy to convince your higher brain debt is a bad idea. Now find a way to make it real in your lower brain.

You Don't Need Wings to Fly

This morning I heard a speaker state that an airplane doesn’t need wings to fly, that concept is a limitation based on our own beliefs. I studied compressible fluids. I know about the Bernoulli Equation. That isn’t true. A lifting body flies because the entire aircraft is a wing. A helicopter flies because the blades are wings. Well, there is an airplane that flies without wings.

What are your limiting beliefs?

An Aircraft Without Wings

The Art of War

In the Art of War, Sun Tzu observes:

So it is said that if you know your enemies and know yourself, you can win a hundred battles without a single loss.
If you only know yourself, but not your opponent, you may win or may lose.
If you know neither yourself nor your enemy, you will always endanger yourself.

You are in danger. The big green machine has you squarely in its sights. You face the combined efforts of some of the most creative minds on the planet backed by billions of dollars, scientific research, and probably more computer power than the NSA. Who are these people? Many of them are your friends and neighbors. Some of them are employed in marketing products and creating advertisements. Some of them earn their living as commission salespeople. Some work at your local bank, especially if it is a branch of one of the big four. Loan companies, the issuers of credit cards, even the retailer that is tracking your behavior with loyalty cards are all planning how to put you to sleep, how to separate you from your money.

Self awareness is the first step towards financial freedom. You must know what you are doing with your money, but you also must be aware of what is being done to you. There is no need to be paranoid. They are just doing their jobs. However, I would encourage you to be a little more conscious when you are doing your weekly shopping. Think about what you are doing and why you are doing it. When you see those coupons and special offers on the back of register tapes, ask why did they do that? When a credit card company offers you a discount on an airline ticket to anywhere in the country a month after you pay off last year’s vacation, ask why did they do that? When your bank offers you anything, be very careful. Overdraft fees are the worst. Forbes reports those fees are running at $32 Billion a year. How banks calculate monthly minimums is mine field for the unwary. You think you have the minimum balance in that checking account, but you don’t calculate that number the same way the bank calculates that number. Now there are even fees for closing your account. Be sure and get a list of all your credit card fees. Understand how they are triggered. Otherwise be prepared to lose a few fingers.

Treat these people with the respect they deserve. They want your money and they know how to get it.

What is Wrong With Salesmen?

There really isn’t anything wrong with earning a living as a commission salesperson. I have friends who have earned their living selling various products. They are ethical people. At least one of them left a lucrative position because he could no longer deal with the changing requirements and products of his company. If you want to be a successful salesperson, you must believe in your product.

There is, however, an inherent conflict of interest between you and the salesperson. When you are dealing with salesmen you must always remember if you don’t buy anything they don’t get any money.

Back when I worked in factories, those of us in supervision envied successful salesmen. They could earn three to four times the salary of mid-level factory supervisor. We use to say those people had the “gift.” It is a gift. The ability to skillfully manipulate others to act in a way that is not always in their best interest is rare skill. Salesmen must hear “No.” a hundred times a day and still start all over with a fresh and positive attitude with the next customer. They must be able to get up, on their own, every morning. Then without specific directions go out and make that next sale. Since she is paid on the basis of commissions, by definition a saleswoman has earned her pay in a way that is not true for most of us.

No sales; no commissions; no pay.

Unfortunately, their commission structure is based on the interests of their company, not on your interests. In the life insurance business there is a saying, “Sell whole life can’t sleep. Sell term can’t eat.” Whole life policies except in very unusual circumstances are a rip-off, pure and simple. They are a money machine for the insurance companies. Therefore the commissions on these products are very generous. In comparison, term insurance is dirt cheap. It provides protection to minor children when it is needed. Then when it is no longer needed it goes away. You can buy term insurance on the Internet from a variety of reputable companies without even messing with a salesman.

I knew a man who sold cars during the first oil shock of 1973-1974. He worked for a car dealership that sold Honda and Mercury automobiles. Salesmen were paid a flat $60.00 for a Honda. At the time there was a waiting list for Honda Civics. If he was able to sell a big gas guzzling Mercury, he could earn up to $700 per sale. In 1973 that was serious money.

Even if a salesperson is working for you, their interests and your interests are not quite perfectly aligned. Consider real estate. A salesperson might be able to earn a 7% commission on a given sale. Again, by definition they earn their money. No sales; no commissions; no pay. The good ones are worth their weight in gold. However, while a $10,000 difference in the sale price of a house is very significant to the owner, it only represents $700 to the real estate agent. Ten thousand dollars is only 2.5% of the price of a $400,000 listing. A drop in a commission of 2.5% is not significant, especially if it means a quick sale. A study described in the book Freakonomics by Steven Levitt and Stephen Dubner demonstrates that when real estate agents sell their own homes, they sell them at measurably higher prices. They are also willing to wait longer to get the higher price.

When you are dealing with a commission salesperson, treat them with respect. If they have been around for longer than a couple of years they are good at their job. The bad ones don’t last long. They are the beneficiaries of constant training. They know how to read you. They know your reactions to their pitch, before you understand what is happening. They are backed by a marketing machine that has been building images in your subconscious mind for years at the cost of millions of dollars.

There is a reason that a good salesman can earn more in a year than a heart surgeon. When I worked in factories, we were well aware of what was happening in sales. No sales; no orders; no work. When our sales force wasn’t selling we weren’t working. One good salesman can provide jobs for 100 factory workers. Good salespersons are the elite shock troops of capitalism. They earn their money.

Learn from salesmen. I recommend you check out basic books on sales that apply to some aspect of your job. In a way, we are all salesmen, even if the only product we are selling is ourselves. Sales courses also teach self-motivation techniques and the psychology of the sale. Even if you don’t have the gift, learn from those who do.

And for heaven’s sake! “Let’s be careful out there today.”

Birds of a Feather

I am settling into my new house and my new neighborhood. So far, I am happy with both. Our neighborhood is a nice healthy mix of retired professionals and young families on the way up. The cars tend to be nicer and newer than what could be found in my old neighborhood in Maryland. I see an unusual number of entry level BMWs. This might be related to the presence a nearby BMW factory. There seems to be a pretty good number of nice late model SUVs and new expensive pickup trucks. Our second car, a 2000 Nissan Altima looks a little out of place.

I was surprised to learn that three of my nearest neighbors are, like me, retired engineers. What are the odds of that happening in some random neighborhood? Something about these new houses in an underdeveloped but growing section of the ninth fastest growing city in the United States seemed attractive to retired engineers from several different areas of the country. Did they apply the same logic to the retirement problem or did subconscious expectations move them towards the same decision? I have observed that typically wives make the home buying decision. The husband can and does say, “No,” but it is the wife who actually makes the ultimate choice. This was certainly true in our case. However, after almost 39 years of marriage, how intertwined are the expectations of husband and wife?

Bottom line, for whatever reason, birds of a feather flock together. This is one more reason to examine your friends and their expectations and self image. It is probably a lot like your expectations and self image. This may be good or not so good.

Here is something else to think about. From a financial viewpoint your house, your car, your neighborhood will change your behavior.

Shortly after I graduated from college I replaced my cinderblock and scrap lumber book case with a screw together set of metal shelves such as is normally found in garages. These “bookcases” followed me around for the next 40 years. They were functional and the study in my old house was also a storage room, so who cared? However, it was my decision that they were not coming into my beautiful new home. Today they are holding tools in my garage.

I was fortunate. One of my new neighbors told me about a nearby vocational rehab place that made really nice custom bookcases and cabinets for a very reasonable price. Today the steel shelves have been replaced with two large custom made bookcases that were delivered and installed for a price that probably isn’t all that much higher than the retail cost of the materials. I was expecting to be visiting some place like IKEA and spending a whole lot more money to fulfill my subconscious vision of my new study.

Let’s say you can afford to pay cash for that new BMW. Cool! Unfortunately that is not the end of the story. Total cost of ownership of an entry level luxury sports car is going to be a good bit higher than the ten year old minivan it replaced. Those weird blue headlights might cost $600 apiece to replace if some teenager decides to steal them one night while you are peacefully asleep. High performance, low profile tires? Well, that could run anywhere from $600 to $1,000 for a set of four. No more $200 bargain tires from Costco, not for your BMW. Let’s not even think about the cost of genuine replacement parts for that BMW. Even if you can avoid the cost of dealership labor by finding a competent independent shop, we are talking serious money.

I am not telling you not to dream. You should have dreams. It is my prayer that you will see them come to pass. I am encouraging the application of mindfulness to your lifestyle and spending habits. It is too easy to go through life on autopilot, living the life dictated by our subconscious expectations and self image. Wake up! Look deeply into the world that surrounds you, examine your friendships, the expectations of your family, the vision of money that lives inside your soul. You can not really live the life you choose unless you bring awareness to the table.

Does God Play Dice With the Universe?

Albert Einstein is famously quoted as saying, “God does not play dice with the universe.” Since Einstein was in all probability an atheist, what did he mean? In fact he was arguing against quantum mechanics, a theory that was probabilistic in nature. He believed that somewhere there was an underlying theorem that would explain certain phenomena in a unified mathematically deterministic formula.

If such a formula exists, we haven’t found it. It seems for better or worse the universe contains an element of randomness. In the study of mechanical engineering we are taught that thermodynamics and the properties of gases (such as steam) can be best explained by probability. While the relationship of temperature and pressure within a vessel of a given size can be predicted with accuracy, the random motion of the individual molecules within the container is unpredictable. Likewise in studying radioactive decay, scientists have learned that while they can predict the total decay of a given sample of an isotope over time, they are unable to predict the decay of a single unstable atom in a controlled environment.

I think we understand this principle. A balanced coin flipped a large number of times will turn up 50% heads and 50% tails. However, no one can predict the outcome of a particular coin flipping event with 100% accuracy.

I am a Christian. I believe in a God whose Son said, “What is the price of two sparrows--one copper coin? But not a single sparrow can fall to the ground without your Father knowing it.” The sparrow still died. Was that a random event or was it ordained by God? I teach that there is a high probability that if you work hard, spend less money than you make, and invest that surplus in a wise manner over an extended period of time you will prosper. I can not make any guarantees. No one can. If anyone makes those kinds of promises they are either a liar or a fool. In either case, run away from them if they ask you for money.

Not only do we live in a world that contains an element of randomness, it is also at times a very nonlinear world. Very small differences in initial conditions, such as the exact date you choose to buy a particular stock, can produce radically different results over an extended period of time. Modern portfolio theory (MPT) teaches that it is more important to diversify in order to limit risk than it is to try to maximize the return on your investment. The basis of this theory is termed, “a random walk.” This means that the price of a particular share on a given day moves in a random pattern about its “true” value. In the long run there is pretty good evidence this is an accurate description of the market. However, the theory assumes that the probability of a share price moving more than 10 or 20 times the average daily move in a particular day is diminishing small. Even excluding events like the declaration of war or fraudulent activities such as insider trading, Benoit Mandelbrot has demonstrated that the market is a much more dangerous place than is predicted by modern portfolio theory. MPT predicts that changes in the stock market can be described by a Gaussian distribution with “thin tails.” That means, extreme events (good or bad) are very unlikely. The truth is we can expect a significant stock market crash about once every ten years, more often than can be explained by MPT. However, Martin Hutchinson notes, that Mandelbrot’s study of cotton prices demonstrated that they, “obeyed a Pareto-Levy distribution with an alpha of 1.7 instead of the bell cure alpha of 2.0.” The bottom line to someone like me who has not studied these mathematics in any kind of depth (although I have read one of Mandelbrot’s papers on this subject) is that the market can and does move as much in a matter or minutes or even seconds as one would expect in years.

We do live in an unpredictable world, but not in a world without natural and spiritual laws. Drop an iron ball from the leaning tower of Pisa; Newtonian physics can predict the results of your experiments to the limit of your instrumentation.

Determining the exact outcome of a particular life is beyond my ability. I can only make probabilistic statements like, “If you drive your Porsche at speeds in excess of 70 mph on a back country road with a speed limit of 30 mph under the influence of alcohol, there is a high probability your vehicle will come to rest, wrapped around a tree.” This actually happened to someone I know.

If I obey the speed limit, wear my new driving glasses (for the first time I failed the vision test), and drive defensively there is a high probability I will avoid a serious accident, but no guarantees. Seek wisdom. Live righteously to the best of your understanding and ability. Find ways to share love and happiness in this unhappy world.

Martin Luther Quote:

“Pray like it all depends on God, then when you are done, go work like it all depends on you.”

Debt Is a Curse

Deuteronomy Chapter 28

[15] But it shall come to pass, if thou wilt not hearken unto the voice of the LORD thy God, to observe to do all his commandments and his statutes which I command thee this day; that all these curses shall come upon thee, and overtake thee:

…
[43] The stranger that is within thee shall get up above thee very high; and thou shalt come down very low.
[44] He shall lend to thee, and thou shalt not lend to him: he shall be the head, and thou shalt be the tail.

Let me ask you a trick question. Do you want to be sick? Of course not; no one wants to be sick. Sickness is not a blessing. We would never beg anyone to make us sick, but we fall on our knees before credit card companies and mortgage companies begging for the privilege of going into debt. This is crazy. Debt is a curse. It is found in the same list of curses that includes this one.

[27] The LORD will smite thee with the botch of Egypt, and with the emerods, and with the scab, and with the itch, whereof thou canst not be healed.
[28] The LORD shall smite thee with madness, and blindness, and astonishment of heart:
[29] And thou shalt grope at noonday, as the blind gropeth in darkness, and thou shalt not prosper in thy ways: and thou shalt be only oppressed and spoiled evermore, and no man shall save thee.

Do you want to visit wherever the Government stores samples of infectious diseases so that you can be smitten by the botch of Egypt? Then why in the name of God do you go out of your way to enmeshed in unnecessary debt?

Proverbs 22:7

The rich rule over the poor and borrower is slave to the lender.

This principle was the truth in biblical times. It is the truth today. When you take out a loan, you are giving your working life to a bank. If you understand this fact and have made a conscious rational decision that such a loan is in your self interest, so be it. However, the banks and the Government do not want you to make conscious rational decisions in your own self interest. They want to control your mind and your life. Of course there are others who hope that you are making decisions on autopilot. That is what marketing in a consumer based economy is all about. Every corporation and yes, even commercial religions selling you products, hope that you will remain docile, asleep, and enslaved.

When the very wealthy are asked what financial advice they would give to ordinary Americans. They always seem to start by admonishing the listener to stay out of debt.

The power of compound interest can work for you or it can work against you.

A five year note on a $28,000 car at 9% will cost you $34,873.80

Are you sure you can’t live without a new car for a few years?

Paying off $15,000 of credit card debt in 5 years at 21% will cost you $24,348.

Are you sure you can’t live without that new pair of shoes?

A 20 year payoff on $100,000 of student debt at 7% will cost you $186,072.00

Are you sure you can’t live without a degree from that private university?

As you walk through life, dealing with money, or anything else for that matter, ask yourself. Is this making me more awake? Is it increasing my understanding of the true nature of reality? Ask yourself, is this proposal or product making me free or is it asking me to exchange my freedom for security. Or worse, am I exchanging my freedom for a substance induced illusion of happiness?

Oh by the way, the ability to lend money to others is included in the list of blessings found in the same chapter of Deuteronomy.

[1] And it shall come to pass, if thou shalt hearken diligently unto the voice of the LORD thy God, to observe and to do all his commandments which I command thee this day, that the LORD thy God will set thee on high above all nations of the earth:
[2] And all these blessings shall come on thee, and overtake thee, if thou shalt hearken unto the voice of the LORD thy God.

…
[12] The LORD shall open unto thee his good treasure, the heaven to give the rain unto thy land in his season, and to bless all the work of thine hand: and thou shalt lend unto many nations, and thou shalt not borrow.
[13] And the LORD shall make thee the head, and not the tail; and thou shalt be above only, and thou shalt not be beneath; if that thou hearken unto the commandments of the LORD thy God, which I command thee this day, to observe and to do them:

Which do you choose? Do you want to be blessed or do you want to be under a curse? Would rather pay cash and have money left over to lend to others or would you rather be a debt slave?

The choice is yours.