Monday, December 31, 2007

Doing It Yourself Doesn't Always Pay - A Short Lesson Learned Yet Again

2007 is ending. Luckily the people at personnel informed me that due to a technical error I was deducted two days-off I am now entitled to use. I took the opportunity in both hands and decided to get some long over due repairs at home. As we all know on off the basic rules of frugal living is getting things done on your own. That is what I set out to do.

I've never been a huge fan of frugal living myself. I find it a bit spartan and so I try to find my own balance between over-spending and extreme frugality. However, when a painter asked for 150$ for repainting a wall that was a bit stained with moisture I set out to "do it myself".

Quickly enough I faced the bitter truth. I drove to buy some paint and a roller and corner brush which cost around 40$. I hurried back and started peeling the existing paint from the wall which discovered areas of crumbling plaster. Again I hurried and bought some plaster, base paint and sand paper of course to find out I've invested over 80$ in materials. I didn't even mention the time I've spent on getting the job done. Precious leisure time of course.

How come the painter is willing to do the job for 150$ then? It's all in his advantages of scale, his place on the learning curve and synergies he creates. We hear these words frequently in business administration schools and they are portrayed beautifully in this simple case.

The painter buys large volumes of materials thus utilising advantages of scale. He is well experienced in painting and knows how to be as efficient as possible. And don't forget - Often times his wage 'per-hour' is smaller then yours.

So, was it worth saving 70$ for 4 hours labour? I think not. We each meet the utility curve somewhere else but I believe many of you will agree. I have learned, in the past, there are usually no shortcuts around professional work, even at home. I had this lesson refreshed these last couple of days.

More on Frugality:
1. The fundamentals of frugality @ Blueprint for financial prosperity
2. 10 questions to enhance your frugality @ Moolanomy

Monday, December 24, 2007

Uncertainty and Risk differentiated – Is a Tactical Surprise Preferable to a Strategic Surprise?

Risk management is a relatively new and evolving field. Risk management usually refers to the process of identifying, measuring, controlling, and minimizing uncertainties which may directly or indirectly affect a desired outcome of a system. A great challenge indeed.

Any process or procedure we can think of holds many uncertainties. Risk management tries to identify these uncertainties, assign probabilities and possible harm to each and every one and acts to minimize those risks.

One of the most counter intuitive questions in risk management basics is: What is the difference between risk and uncertainty? There are actually many differences; some are of the utmost importance to every organization and every manager.

When every possible option and outcome is known a decision is said to be taken under certainty. Many academic models assume certainty due to their basic function of explaining and prediction. These are also the standards most models are judged by. The recent retreat from certainty in academic modes has been due to explanatory gaps.

What is uncertainty then? Uncertainty is a situation in which possible outcomes of an action or decision are known but their probabilities are unknown or can not be assigned to each and every outcome. At this point intuitions should be baffled. What is risk then?

Risk is a situation in which possible outcomes of an action or decision are known and their probabilities are also known. What’s the difference? Risks can be identified, measured, insured against and minimized.

For example, insurance companies have very detailed statistics of accidents, thefts, earthquakes and even loss of limbs of famous and gifted football players. These are all risks. Uncertainties are also everywhere but can not be measured and as a result insured against. For example, who’ll be the next president of the US? That is quite a significant uncertainty.

However, the greatest significance of this differentiation between risk and uncertainty is their role in management. When all possible outcomes have probabilities assigned to them the biggest possible surprise for a manager is a tactical surprise.

For example, a fire might consume a warehouse but it can be rebuilt by insurance money or prevented by installing a sophisticated auto extinguisher.

When outcomes can not be assigned probabilities there is a chance of a strategic surprise. This is very dangerous for an organization as it might impact it in unforeseen ways. A certain legislation might pass which severely limits the organization’s ability to compete, a new technology may appear which will render the organization obsolete and much more.

Dealing with uncertainties is a manager’s duty which requires constant strategic thinking and evaluation. In order to better deal with uncertainties risk management practices should be put to use in strategic thinking as well and not just n operations and finance procedures where they are more common.

Saturday, December 22, 2007

Investment Basics Carnival #3

Welcome to the 3rd edition of Investment Basics Carnival. We had 32 submission out of which 16 are posted.

1. Blaine presents Frugality, America's worst nightmare posted at

2. ChristianPF presents Would Peter Lynch invest in Crocs? posted at Money in the Bible Christian Personal Finance Blog

3. Larry Russell presents The Fund Authority Score - A Better Mutual Fund and ETF Rating System posted at THE SKILLED INVESTOR Blog

4. Silicon Valley Blogger presents Latest Net Worth / Portfolio Numbers: Unexpected Increase Of +15% for 2007 posted at The Digerati Life

5. Sagar presents Top 50 Real Estate Marketing Bloggers posted at International Listings Blog

6. Jason Elder presents Understanding How to Get a Loan After Bankruptcy posted at A Bankruptcy Lawyer's Blog

7. Homo economicus presents Personal Diversification: Multiple Streams of Income posted at Homo economicus

8. Valulicious presents Is Ben Graham Turning in His Grave?: Growth as the New Value posted at Valulicious

9. Bonnie Krueger presents Is It Smarter To Invest My Money Or Pay Off Debt? posted at Student Loan Consolidation

10. unequivocal presents Emergency Fund posted at Unequivocal Notes

11. David presents I Will Teach You How to Become a Millionaire posted at Worldwide Success

12. Dan Johnson presents How to Automate Your Savings with a Credit Card posted at Credit Cards That Pay

13. FIRE Getters presents Our 7 Mutual Fund Investing Mistakes! posted at FIRE Finance

14. Peter25 presents The Keys to Successful Trading posted at Small Business

15. Steve Faber presents Top Stock Picks – 3 Unconventional Ways You Can Make Them posted at DebtBlog

16. Value Seeker presents Common Mutual Fund Investing Mistakes posted at Stock Investing

Friday, December 21, 2007

10 Tips on How to Make the Most of Time Spent In Traffic – How to Make More Time Post #4

My forth post on how to make more time will focus on one of my most hated time consumers: Traffic. One of the painstaking problems of our modern lives is commuting. Getting stuck in traffic is a complete waste of time. On average Americans spend almost 40 hours a year in traffic. These numbers are much higher for people working in bigger cities. Just half an hour wasted on traffic back and forth, each day, quickly accumulates to 5 precious hours a week.

I personally literally hate traffic. I get frustrated simply by thinking of all the other things I could have been doing instead. I have tried everything to make the best use of time spent in traffic. Here are my tips:

1. Avoid it – An obvious start. Get up early, get back home earlier or later. Avoiding traffic altogether is the best possible remedy. You’re obviously not reading this to be told to avoid traffic but if you take the time to think of it and try and change your daily routine you just might be able to save that time.

I used to jog in the evening as I’m not a morning person. After considering the potential benefits I try to get up early and jog twice a week at the gym at work. I directly translate the time saved on traffic to time put to good use exercising.

2. Don’t take useless shortcuts – We find driving much more comforting then standing in traffic regardless of time spent. If you’ve ever timed a traffic jam you must have noticed it took less time then it felt. Standing in traffic 10 minutes seems like forever. But it is better to sit out a traffic jam then taking a 15 minute shortcut (saving money otherwise spent on fuel as well).

3. Make phone calls with a purpose – Have a list of phone “chores” handy and use the time spent in traffic to make them. Close open ends, get back to people and manage. Try and avoid spending other people’s time just because you’re bored. They’ll catch on to that quickly enough.

4. Learn another language, listen to an audio book or audio guide – I myself bought “Learn German in Your Car” CD’s and I listen to them, lesson by lesson. You won’t be fluent in another language by listening to CD’s in your car but it makes for good practice and a good basic understanding for business trips. Interested in how to take better care of your garden or modern western philosophy? Everything is available on CD’s.

5. Use the time to reflect – One of my least favorites but it might be just me. Have some issues handy that need some thinking. Turn your radio off and just think. Have a pen and paper handy and write (or record) your thoughts.

6. Use the time to shave, put on make up or read the morning paper – Another one of my least favorites and should only be done when traffic stands still. Shave or put on make up to save precious morning time. However, please make sure you have the proper coordination first.

7. Get a PDA – Using a PDA can really help you save time in traffic. Delay some organizing chores and complete them in traffic. Browse over your calendar, your tasks and get organized.

8. Ride bicycles or use alternate means of transportation – I think you have probably considered this but add the money saved on your car and reduced pollution to your considerations. Riding a bicycle to work can be great as you save time and get an exercise at once. If possible I highly recommend adopting it as you double the time saved and even save money (you just need a shower at work).

9. Live closer (or work from home) – One of the considerations I had in mind when I bought my apartment was location. Not just the famous triple saying but also how much time will I save on traffic. Economically speaking time spent in traffic is lost utility. Determine how much your time is worth to you and you can translate that to dollars and cents invested in closer property.

10. Carpool – This won‎’t save you time in traffic but if you select good partners you can get some brain storming and work done.

Related Posts:

1. Sleeping That Extra Half Hour Should Be Costly – Battling Traffic Jams With the Proper Economic Incentives
2. 6 Tips on How to Conduct Efficient Meetings – How to Make More Time Post #3
3. 8 Tips for Efficient, Time Saving Use of Cellular Phones - How to Make More Time Post #2
4. 15 Tips for Saving Time on Emails - How to Make More Time Post #1
5. How to Make More Time - A Series of Posts on the Biggest Time Consumers and the Efficient Ways to Deal with Them

Thursday, December 20, 2007

Dollar Reserves Might Change Future Investment Trends

Foreign governments with tremendously high dollar reserves seem to be on the hunt for investments. As the dollar weakens and reserves erode governments find investing in American corporations more and more attractive.

Investment banks seem to be in the spotlight these days after taking painful blows due to the subprime crisis. Apparently stock prices have become attractive enough especially for China and OPEC countries which have significant amounts of dollar reserves and are more the happy to answer the banks' cries for liquidity.

The Chinese government has just announced, through it's investment corp (CIC), a $5 billion investment in Morgan Stanley after the latter announced a $9.4 billion write-down on subprime linked investments. This investment follows a 3 billion dollar investment in the private equity firm Blackshire group for just under 10% ownership.

Abu-Dhabi recently purchased a $7.5 billion stake in City Group with what appears to be a change of strategy for the largest oil producer of the Emirates.

I believe the sight of huge piles of dollars depreciating will drive more dollar reserves into high return investments in the west. Are these the first signs of a reversed investing trend from China and the middle-east back to the USA?

Wednesday, December 19, 2007

10 Tips on How to Avoid Overspending In Supermarkets

We are all educated consumers and we all have shopping lists we follow. However, we always find ourselves grabbing those 3-5 extra unplanned products. According to marketing experts some 75% of our decisions are actually made in the store itself. We, as consumers usually buy 30% more then we’ve planned on.

Supermarkets are well aware of those numbers. How do we avoid overspending then?

1. Your list should be as detailed as possible – Assume the following products are on my list: Bread, Coffee, Cereals etc. Which brand should I buy? And how much? We get our answers looking to the shelves. When shopping have a detailed list which includes brand names and quantities. Only shop for price per quantity.

2. Know the floor plan of the store – Supermarkets are well organized to keep you trapped in for a long time. Dairy and meat products will always be located on corners and far away from the entrance. Popular products will be well scattered through out the store. Know where to get what you need and minimize your length of stay in the store.

3. Look for cheaper products, of the same quality on lower and upper shelves – More attractive products will always be located on your right and at eye level. Cheaper products, usually of the same quality, will be located either very low or very high. Low shelves often hold attractive products placed at children’s eye level so be wary.

4. Don’t go shopping hungry – The impossible array of sights, smells and sounds will surely have its affect on you.

5. Compare price per quantity and not per packaging – Very intuitive yet very confusing. Many shoppers compare price per package because the products are just organized that way. Take a second look at how much each package holds.

6. Throwing away food? You’re buying too much – Temptation always arises in supermarkets. We’ve seen why. Control yourself at the sights of great fruit for example. That extra amount bought will usually be thrown away in a week.

7. Take advantage of deals and promotions but do not buy too much just because more is cheaper – Do you really need that extra jar of honey offered in the 2+1 discount? How long does it take you to go through a jar of honey?

8. Buy big volume products first – Buying a pack of toilet paper will surely take up cart space away from unnecessary shopping.

9. Don’t take your children shopping – A big no in saving on groceries is taking your children shopping. As children are very susceptible to eye-candies and parents are very susceptible to children the result is obvious.

10. Get your Caffeine before you go shopping – Don’t spend time in a supermarket’s cafĂ©. Minimize your stay.

Tuesday, December 18, 2007

In Search of the Perfect Meeting by Tom Krattenmaker

I've recently added Harvard Business School Working Knowledge to my recommended readings. It is a very valuable resource for business leaders everywhere.

As some of you know I've been posting a series on how to make more time by examining the biggest time consumers in our lives. I believe meetings answer that criteria and I've posted my thoughts on the matter a couple of days ago.

Yesterday I ran into an article by Tom Krattenmaker for HBS which has some excellent advice on the how to make every meeting pay off by weighing the value and cost, avoiding meetings altogether, discouraging politics and more. If you were interested in my post I believe you'll find this article at least as interesting.

Related Posts:
1. 8 Tips for Efficient, Time Saving Use of Cellular Phones - How to Make More Time Post #2
2. 15 Tips for Saving Time on Emails - How to Make More Time Post #1
3. How to Make More Time - A Series of Posts on the Biggest Time Consumers and the Efficient Ways to Deal with Them
4. Managerial decision making and the decision process

Monday, December 17, 2007

Risk Management – Pure Risk and Speculative Risk Explained

Risk management is a relatively new and evolving field. Risk management usually refers to the process of identifying, measuring, controlling, and minimizing uncertainties which may directly or indirectly affect a desired outcome of a system. A great challenge indeed.

Any process or procedure we can think of holds many uncertainties. Risk management tries to identify these uncertainties, assign probabilities and possible harm to each and every one and acts to minimize those risks.

Two of the most basic terms used by risk managers are pure risks and speculative risks. All risks are historically associated to one of the two families. Understanding the motivation and reason behind this differentiation is key to taking your first steps in risk management.

Every risk is at its base a known series of possible outcomes with possible benefits or harms. Each possibility has a known probability of realization (otherwise it is not a risk but an uncertainty and is dealt with differently).

Pure risks are a family of risks in which all possible outcomes are harmful in some way. In other words a pure risk is a situation that can only end in a loss. For example, the risks of an accident, a car theft or earthquake are pure risks.

Speculative risks on the other hand are a family of risks in which some possible outcomes are beneficial. In other words a speculative risk is a situation that might also end in a gain. For example, the risks of stock investment or business venture are speculative risks.

This differentiation between families of risks is very important as each family has its own distinct features. Pure risks are characterized by the following:
1. Small chance of occurrence – The probability associated with risk occurrence is small.
2. Grave results – In case of risk occurrence the results are significant.
3. Instant impact – The impact of risk occurrence is instant.

Let’s reconsider pure risks such as an earthquake, a car theft or an accident. These risks have a relatively small chance of occurring, all have grave results and their impact is instantaneous.

Another less mentioned but very important characteristic of pure risks is the fact that these risks do not present themselves due to the small chance of occurrence. There are virtually endless amounts of pure risks around us. One can come up with infinite pure risks by thinking of every process. A boulder might roll on to you when you brush your teeth. Sure, there’s a small chance that might happen, but it’s there. We overlook pure risks because of those small chances.

Speculative risks are basically all other risks. These risks are dynamic and changing (pure risks are more static due to their nature). Speculative risks have been traditionally dealt with in the confines of financial management. Modern risk management deals with these kinds of risks as well as their impact might be as significant as that of pure risks.

Saturday, December 15, 2007

6 Tips on How to Conduct Efficient Meetings – How to Make More Time Post #3

How many times have you found yourself staring blankly at the wall during another pointless meeting which seems to last for hours? I often find myself baffled at how senior management seems to be clueless when it comes to conducting efficient meetings.

Conducting efficient meetings might seem easy to achieve but is rather challenging. Many people aspire to express themselves and be heard and a meeting is just the place. A delicate balance needs to be achieved between avoiding the waste of time and avoiding insulting or hurting fellow workers.

The best way to conduct efficient meetings is setting the right ground. By setting the right ground the meeting can be channeled to where we want it.

Here are my recommendations on setting the right ground for efficient meetings:

1. A meeting should have a clear goal – If you’ve decided to allocate your co-worker’s precious time resource to a meeting be sure to have a clear and understandable goal. An example can be deciding on the next marketing campaign strategy.

2. Make sure the goal is also attainable – Having a clear goal is not enough. It should also be attainable. Ending a meeting with no achievements or decisions is frustrating and reinforces the feeling of wasted time. If you’ve decided to conduct a meeting you need to be sure all the proper background work has been completed and the required information for taking a decision is available.

3. Publicize the meeting’s goal and methodology – Make the meeting’s goal public knowledge and also explain the methodology which will guide the decision process (For example: who will present what information?) This should be done formally or informally by the organization’s means of mass communications and include:
a. The goal
b. The background
c. The agenda
d. The participants
e. The methodology

4. Always have an agenda – Setting a proper time frame for a meeting in advance is crucial. When in the heat of the meeting it is sometimes difficult to control the various speakers which may present irrelevant information for extended lengths of time. By setting an agenda in the comfort of your office you are able to consider the time frame each speaker should be allocated pending on the importance and relevance of what he has to say. Making the agenda public can help greatly throughout the meeting and acts as an anchor for all participants. When you have an agenda time is your asset. Use it to steer the meeting where you want it to go.

5. Stick to the game plan – Participants will often work hard to divert the discussion to other directions. Many issues discussed have overlapping issues some more sensitive then others. Each discussion has the potential of going everywhere. Be assertive and nip any attempt (wither intentional or unintentional) of diverting the discussion in the bud.

6. Have the meeting summed up and publicized – Assign a note taker and have the meetings summed up and publicized. This will keep everyone up to speed, reduce miss understandings and help preserve organizational knowledge.

As always, I’d love to hear from your experience and further ideas you might have.

Related Posts:
1. 8 Tips for Efficient, Time Saving Use of Cellular Phones - How to Make More Time Post #2
2. 15 Tips for Saving Time on Emails - How to Make More Time Post #13. How to Make More Time - A Series of Posts on the Biggest Time Consumers and the Efficient Ways to Deal with Them
4. Managerial decision making and the decision process

Friday, December 14, 2007

Sleeping That Extra Half Hour Should Be Costly – Battling Traffic Jams With the Proper Economic Incentives

I was slowly making my way through traffic today when various thoughts occurred to me. This has been an especially tough week with traffic jams lasting forever.

I’m curios as to the economic nature of traffic jams. Surely given the proper incentives traffic jams can be eased considerably. I myself consider standing in traffic jams a complete waste of precious time. This waste of a valuable resource is a strong enough incentive for me to leave home early and return late. This does not seem to be the case for everyone. It seems some people don’t really mind their wasted time.

I believe people often lack the understanding of economic value as utility and attribute it to money only. Their time is not as precious. An interesting experiment would be to try and translate that loss to a common and measurable quantifier: Money.

The waste caused by traffic jams is enormous and encapsulates time, environmental damage, stress, noise, car wear and more. Clearly reducing traffic jams is an economic cause worthy of undertaking.

The problem with traffic jams is that roads are a public resource. Public resources are often used inefficiently due to the lack of one “loser” with the proper incentive to act. We’ve already established such an incentive exists for the public authority. Now it’s only a matter of acting on it.

How do we reduce the inefficiency? The public authority needs to introduce new rules (or incentives) on using the public resource. These rules need to assure consumers take into account the complete economic costs when deciding to use that resource, or in this case – roads.

Incentives are a powerful economic tool which I plan to focus on in my posts. In this case the power of incentives is clear. By introducing the proper incentive traffic jams can be regulated and eased. Think of the following incentives for reducing traffic jams:

1. Rush hour toll – If sleeping in is that important to you be prepared to pay a toll for jamming traffic between 8:00-9:00 for example. A simple payment introduced into your decision making process is bound to affect it. If another half an hour sleep is important be prepared to pay 3$ for it. Surely some people will choose to get up earlier and avoid the toll.

2. Early bird bonus – Driving to work early? Receive a small token of appreciation between 6:30-7:30 funded by those rush hour tolls.

3. Another example could be tax benefits for using public transport and more.

Public authorities are constantly trying to battle traffic jams by a variety of means: Better public transport, No car zones, Out of city parking garages, limiting the number of parking spaces and more. These have all been helpful in reducing traffic jams. However, I believe setting proper, monetary, incentives in place will be the most significant step in reducing traffic jams.

Image by Tub Gurnard

Wednesday, December 12, 2007

Cheap Marketing Tricks Supermarkets Employ: Avoid Overspending By Being Aware

We are all educated consumers and we all have shopping lists we follow. However, we always find ourselves grabbing those 3-5 extra unplanned products.

The richness and variety found in supermarkets is irresistible. As human beings we are faced with many attractive and seductive products aiming at our most basic needs. That, however, is not the whole story. Supermarkets employ a variety of marketing tricks to emphasizes that richness and tickle our buying bones.

According to marketing experts some 75% of our decisions are actually made in the store itself. Consumers usually buy 30% more then they’ve planned on.

What are the basic marketing tricks used by Supermarkets? These can be roughly divided into two categories: Location and attractiveness.

Supermarket layout is carefully planned to fit sale forecasts, profitability and more per store space. Usually more popular products will be sold at the store’s perimeter in corners thus making us travel the length and width of the store. Dairy products will always be located as far away as possible from the entrance. Products of large volumes will also be located farthest away to avoid a quickly filling cart space. Buying out of impulse often happens at the registers. These are obviously packed with sweets, batteries, shaving accessories and more.

Naturally, we focus on what lies in front of us. Supermarkets have perfected the art of organizing store and shelf space. More attractive and selling products will always be located on you right and at eye level. Cheaper products, usually of the same quality, will be located either very low or very high. Low shelves are also often used to attract children at their eye level. Another worst nightmare of buying with children is the surprising convenience in which candy is often located just across from breakfast cereals. Furthermore, Supermarkets often shuffle shelve space in order to make shoppers search for regular products thus exposing them to more options.

As aforementioned the majority of our decisions are made in the supermarket itself. As most people’s lists are very basic the appearance and organization of products in the supermarket affect our shopping. Say I’ve the following products on my list: Bread, Coffee, Cereals etc. Which brand? How much? We get our answers looking to the shelves.

Supermarkets employ a whole variety marketing tools affecting all senses: Atmosphere, Music, Colors and smells. A Supermarket’s bakery and deli are not very profitable sections. However, in terms of shopping experience these are invaluable. Fresh smelling bread or the sights of cheese and sausages are excellent marketing tools for the store. Slow gentle music is often played in order to encourage you to walk slowly and browse more.

Awareness is the first step in avoidance. Look for these marketing traps in your regular store and learn to avoid popular techniques to influence you shopping.

Monday, December 10, 2007

8 Tips on How To Make Efficient, Time Saving Use of Cellular Phones - How to Make More Time Post #2

This is a second post in a serious of posts on how to make more time. Be sure to take a look at the others. I'd love to hear ideas and suggestions from your experience.

Lately I’ve noticed a very interesting thing. Many people call me at various hours of the day, always accompanied by the noise of traffic. They are always very keen to hear about my weekend or what I did last night. It didn’t take long for me to understand I’ve become a means to pass time in traffic.

Needless to say this is very costly in terms of time and even money. An inefficient allocation of resources such as traffic jams creates more inefficiency. One example is spending other people’s time on meaningless calls (which are not always unwanted, but this is beside the point).

Cellular phones present many potential benefits. Unfortunately, cell phones have become a pandemic of waste of both time and money. By making proper and efficient use of the possible benefits of cell phones you’re bound to save both money and time.

This is my list of tips to efficient use of cellular phones:

1. Be aware of potential time wasters – I admit. I often avoid answering the phone during rush hour. I usually wait a couple of hours and return the calls. Surprisingly people are much more efficient when my return call finds them at home.

2. Don’t answer every incoming call, don’t let others manage your time – Say you’re talking to a person at work. Suddenly another arrives and starts chatting away. Rude at the very least. Somehow this behavior is considered appropriate when a cell phone rings.To answer an incoming phone call is to stop everything and talk to that certain someone. Sometimes it’s justified. Other times it is distracting, annoying and messes up your priorities. This is up to you. I’ve made it a habit to accustom friends and colleagues to me not answering sometimes.

3. Use dead time to make calls (plan these calls in advance) – Most people take advantage of time spent in traffic or other forms of waiting to make calls. The problem is these are hardly ever planned in advance. Are you trapped in traffic mornings and evenings? Save a few work related calls for your car. You’ll save the time spent in the office and earn time that would otherwise be spent in your car. Don’t just call friends and annoy them with meaningless chatter to pass your time.

4. Use text messages when appropriate – Often times I find myself texting to avoid a long chat. Sometimes I just text to avoid. These SMS dialogs are very lengthy and time consuming. Even if you type fast. Use text messages only when you think you’ll save that precious time.

5. Cancel your voice mail if possible – Returning calls is usually both time and money consuming. You need to take the time to access your voice mail, listen to lengthy messages, take notes and return calls. If possible ask for text messages.

6. Invest in good hardware – Buy a phone that has already proved its resistance and resilience. Avoid wasting time constantly having it repaired and mended.

7. Beware of 3rd and 3.5 generation features – Watching TV or surfing online with a mobile phone is still more time consuming then it would have been on a desktop computer. Those tiny keys and letters are a handful and reception problems don’t help. This should be taken with a grain of salt as proper use of these features can help you become very efficient in “dead time” situations.

8. Get a hands-free Bluetooth speaker – For those calls you can’t avoid which seem to last forever (usually from your boss) get a hands-free speaker. It will help keep you free for work while the other side chats away meaninglessly.

I'd love to hear your ideas and suggestions on how to save time on cell phones.

Related Posts:

1. 15 Tips for Saving Time on Emails - How to Make More Time Post #1
2. How to Make More Time - A Series of Posts on the Biggest Time Consumers and the Efficient Ways to Deal with Them

Saturday, December 8, 2007

Creating Organizational Commitment among Employees through Behavioral Change of Attitudes: Cognitive Dissonance as a Tool for Managers

Employee behavior, as any human behavior, derives from attitudes toward various subjects or objects. These attitudes are in turn a result of beliefs held by the employee. In order to understand how to create or change employee attitudes we must understand how an attitude is created and what affects it.

The two main attitudes in organizational behavior are work satisfaction and organizational commitment. These two basic attitudes are of extreme importance to both organizations and managers. From a manager’s point of view the employee’s attitude towards organizational commitment is more important as it directly affects employee productivity.

A person’s beliefs and values create an attitude toward a subject or object which is basically a positive or negative approach towards it. Attitudes in turn affect behavior. For example, if a person believes that “work is no fun – work is a responsibility” then his attitude towards organizational commitment would be positive. In turn, in his behavior this person would work hard, stay over time and help other employees. A very important point to remember is that this works the other way around as well. Behavior affects attitudes which in turn affect beliefs.

Attitudes change when beliefs change. Beliefs change when new information is available to the believer. In order to effectively change beliefs (and thus affect attitudes and behavior) one needs to communicate new information. This communication is made of three parts:

1. The source – The effectiveness of the communication stands in direct relation with the credibility and attractiveness of the source of the message. If the message is important the source’s attractiveness is less consequential.

2. The message – Complex messages are obviously more difficult to communicate. The message should contain a unique selling proposition and should enable a deduction of a conclusion.

3. The target audience – Each target audience requires different means of communications.

As a result of the communication an inconsistency is formed in the belief, attitude and behavior triangle. For example, the behavior of promoting an employee affects my attitude towards that employee – If I promoted him he must have deserved the promotion (and not the other way around). Often times changing behavior is difficult and thus attitudes change for consistency. This in consistency between belief, attitude and behavior is known as cognitive dissonance. Another example of utilizing cognitive dissonance to change attitudes might the following known as festinger’s cognitive dissonance.

Group A receives 1$ to describe a boring chore as interesting. Group B receives 20$ to do the same. Results show group A estimates the chore as more interesting then group B. The dissonance created between the behavior of group A (describing as interesting) and their attitude towards the chore (boring) is enhanced due to the low compensation received (It must be more interesting then I think since I’m describing it as such for just 1$).

Another good example to consider is someone who bought an expansive PDA which suffers from bad WI-FI reception. There is a dissonance between the belief an expansive PDA should have good WI-FI reception and the fact he bought an expansive PDA. Eliminating the dissonance is possible in several ways: either the person tells himself he is not using WI-FI functionality (reducing the importance of it) or focusing on the PDA’s strengths. He could actually return the PDA but that would be much harder to perform.

In management we mainly have control over behavior. Thus managers should be focused on changing employee attitudes through behavioral change. An extreme example is the Army. Making a soldier love his weapon or tank is not an easy task. This love of soldier to weapon is achieved by commanding soldiers to constantly clean and maintain their weapons for example. The dissonance is created between their constant behavior and their belief they dislike the chores (If I’m constantly cleaning my tank I must there fore love it).

Some less extreme ways of changing employee commitment are very similar in principal. Some examples might be: employees phrasing their department’s vision and mission statement (If I’m phrasing it I care), Semi-mandatory conventions and gatherings (If I’m participating I must like my company) and much more.

Behavioral change of attitudes should be suited to each and every organization. Employee commitment to an organization is highly important as it directly affects productivity and profitability. Taking the time to consider which behaviors positively affect employee’s attitudes towards commitment is well worth the time.

Thursday, December 6, 2007

Buying a Stock? Keep In Mind Someone Else Is Selling …

However intuitive it may be I can never shake that thought out of my mind when buying stocks or other financial assets. What does the seller know that I don’t? Or the buyer in case I’m selling. Why is he selling this stock? What’s wrong with it?

People often attribute asymmetrical information to the other side of a deal. Buying a used car or house is a good example. The seller obviously holds information you don’t. How’s the car running, how are the neighbors etc. Oddly enough people usually don’t think about asymmetrical information when buying stocks. Usually we are more occupied with our thoughts of a promising return on investment.

Evidently, if you’re a household investor chances are you’re doing business with someone more experienced and more knowledgeable than you. As a household investor your resources for stock information and analysis are sparse and common. We all know what good are analyst recommendations or promising newspaper coverage.

You really should start assuming asymmetrical information and act accordingly. What can be done? The answer is simple. Either join them or be as certain as possible you’re doing the right thing.

Decided to join them? Buy ETF’s or mutual funds and invest in an index or industry. By covering the whole index (or industry) you’re moving with the big guys. You’ve got them working for you.

Decided to invest in specific stocks? Know what you’re doing and have some good reasons why you’re investing. You think fundamentals are great? Double check why no else but you recognizes that. Technical analysis looks promising? Better understand the trend and set your Stoploss right.

Either way, don’t forget to diversify your portfolio to be sure you’ve got yourself as covered as possible. Returns will naturally be lower then successfully investing in specific stocks but risks will be much lower as well.

1. Stock recommendations from analysts or brokerage houses - how valueable are they?
2. Diversifying your risk in the stock market
3. Investing Mistakes to avoid
4. Tips for young investors

Wednesday, December 5, 2007

The 10-Step Formula for Building Wealth - By Jeffrey Strain for

Jeffrey strain has some great personal finance articles on I've added his author page to my recommended readings.

In "The 10-Step Formula for Building Wealth" Jeffery discusses age old advice as borrow, buy used, never pay retail price, forget brand names and more from a refreshing point of view.

Quality articles are hard to find. So far I've been impressed with this author's writing.

Other articles I've found interesting are:
1. How to Prioritize Debt
2. How to Save During the Holidays
3. Why Multitasking Wastes Time and Money
4. 10 Financial Steps You Can't Afford to Put Off
5. Five Mistakes That Hurt Your Credit Score

Investment Basics Carnival #2

The second edition of the investment basics carnival recieved 30 posts. Here are the better ones:

1. Jose DeJesus MD presents Your Money - The Flight To Quality posted at Physician Entrepreneur- In the midst of hightened volatility in stock prices, there has been a flight to what are viewed as safer investments.

2. Doug Boggs presents The Dollar vs. the Euro? posted at Boggs Development Group, LLC- Interesting discussion of a possible merge of Dollar and Euro

3. The Career Counselor presents Seven Strategies to Stop Living Paycheck to Paycheck posted at ask the CareerCounselor- Simple, basic and effective.

4. Leon Gettler presents Keeping up with the Joneses: bubbles and herding behavior posted at Sox First- Interesting analysis of herding behavior

5. The Dividend Guy presents Quality Investing Quotes from Some Big Name Investors posted at The Dividend Guy Blog- Speaks for itself

6. Logan Flatt, CFA presents It's Future Cash Flows, Stupid! posted at Valuation Basics

7. rb presents Mutual Versus Index Funds posted at Mutual funds and index funds compared

8. Warren Wong presents What Is The P/E Ratio And What The Price Earnings Ratio Means posted at Personal Development for INTJs

9. Dax Desai presents ETF’s for the Falling Dollar posted at Dax Desai

10. The Investor's Journal presents How Much Should I Invest In The Stock Market? posted at The Investor's Journal

11. Mark U Runta presents Market Turmoil - Is it Keeping You Awake At Night? posted at Smart Investing & Money Management

12. Kurt Brouwer presents How Much Should You Invest In Stocks? posted at Fundmastery Blog

13. Steve Faber presents - Good Stocks to Invest In – How to Find Them posted at DebtBlog

Monday, December 3, 2007

15 Tips on How To Save Time on Emails - How to Make More Time Post #1

As promised this is the first post in the series of "How to make more time". It turned out quite long but I think it's worth reading.

We are virtually flooded by emails both in and out of our office. Emails can be very time consuming when not dealt with properly. The main problems with email arise from its benefits. Email is very easy to operate, immediate, time efficient and free. As a result emails have become the preferred method of communication in business and private life.

However, waste in emails is abundant. This is of course the case with any resource which is readily available and costs nothing. This doesn’t mean you can’t change that for both yourself and your organization. The advantages of emails significantly outweigh the disadvantages but with an extra effort emails can be really harnessed to empower your time management.

Here are some tips and advice which can help you become more efficient and save you precious time on emails.

1. Make a habit of reading emails early in the morning, and only in the morning
2. If you’re reading an email, read it
3. Don’t jump at any incoming email

Imagine the following situation: You arrive at the office and read your mail, reply to most of it and save a couple emails for later reference. During the day incoming mail constantly distracts you from your work with replies on replies, new emails or follow-ups. You browse through a couple, reply if it’s quick and mark the rest as unread so you won’t forget to re-read it when you have the time.

Jumping at any incoming email is a complete waste of time. You are distracted from your work; you don’t really focus that incoming email and you’ll just have to read it again later when you have the time.

My advice is to process emails in batches. Make a habit of reading emails early in the morning when the day has yet to start. Read each email thoroughly and act on it on the same moment (forward, sort, translate to a task etc.). Let incoming email accumulate and process those the next morning. Meanwhile your colleagues have had the chance to reply properly and maybe do something about it. It is tempting to take a peek in incoming emails but remember you’ll probably just mark them as unread for later reference and waste precious time.

Emails are mostly used for communication of information or tasks which have a lifespan of over a couple of days. Use that characteristic to your advantage.

4. Always consider whether email is the right form of communication – Emails have become so popular that many people use them for all communication sorts. From deciding on lunch to small talk. This is of course an utter and complete waste of time. Many times talking on the phone or face to face is faster, more efficient and does not create havoc in your inbox. Emails are often the retreat of less assertive people trying to assert themselves. Confronting them either on the phone or face to face may help you put an end to problems before they’re born.

5. Nothing will probably happen if you ignore CC’s for a while – Quite risky but worth it. This tip depends greatly on organizational culture. People often use CC to include many, mostly irrelevant, colleagues in email conversations. This is done for a variety of reasons:
a. Share their work (see, I’m working)
b. Share the responsibility (I’ve updated you on that).
c. Feel important

You can put an end to it. First, create a rule which moves emails where you are CC’ied to another folder. When you have the time, stop and read those. You’ll be surprised why you insisted on reading those at the first place. Second, try and change that in your close surroundings. Comment people who include you in irrelevant email conversations. CC’s are one of the major waste multipliers in emails as they easily spread.

6. Email only to the relevant people – The other side of tip #5. By including only the relevant people in your email conversations you’re reducing the potential number of replies and you’re also keeping the replies practical and to the point.

7. Arrange emails by conversations – I find Gmail’s sort by conversation very helpful. Sorting by conversation help’s you keep each email in its proper reference point and relations. This, in turn, greatly shortens the length of time required to understand “where did that email come from?”

8. Use rules to sort out emails by “friendly” spammers – “Friendly” spammers exist in every organization. Starting from human resources to other colleagues which insist on sending birthdays, jokes and who knows what. Conveniently create rules to send emails from these sources to specific folders and browse through them when you’re bored (or never …).

9. Actually, avoid it altogether if you can – Get yourself removed from as many lists and groups as possible. This will eventually reduce your incoming emails by amazing percents. Important information has its ways to find you.

10. Use flags and colors to manage email follow-up – Email applications offer many tools for sorting and follow-up. Tools such as colors and flags by topics are very helpful to keep efficient follow-up. It is very important not to misuse these tools to mark email which need to be read again later (we’ve discussed that already). Use these tools only to follow-up and sort emails which you’ve already acted on.

11. If you’re replying to similar emails create templates – If you’re constantly replying similar content use ready templates to save on typing and phrasing.

12. Use predefined groups – If you have to (and I mean have to) email the masses often use predefined mailing lists. Save time on redundant search and don’t risk forgetting someone.

13. Keep answers short and to the point – Keep you’re emails practical, short and on topic. Use short and clear topics and content. This will help keeping replies as practical and save you time on dealing with other issues which do not interest you.

14. Use Google desktop for efficient and effective search – Most email application lack good search tools. Google Desktop is great in finding those hard to find emails and saves precious time on search and continued browsing in all those sub-folders.

15. Sort emails regularly into sub-folders – A regular part of acting on emails is to sort them to relevant sub-folders. Keep your inbox (and sent items) nice and clean. Sub-folders are very helpful in creating order in the chaos.

Implementing several of the aforementioned tips and advice at once creates synergies which will benefit you and your organization even more. As with any change constant implementation and monitoring is required. Self discipline is called for. Fight you habits and rip the rewards.

Image by Tim Morgan

Sunday, December 2, 2007

How to Make More Time - A Series of Posts on the Biggest Time Consumers and the Efficient Ways to Deal with Them

In December I plan to publish a series of 8-10 posts on how to make more time. I consider myself a very efficient person. In my professional life I’ve taken the time to observe daily routines and behaviors in order to make more free time for myself (writing can be very time consuming...).

I intend to share my findings and some additional research on how to make more time by efficiently managing:
1. Emails
2. Cellular Phones
3. Meetings
4. Traffic
5. Planning
6. Management
7. Time management (yup, Meta time management)
8. Information

I would love to hear your ideas on how to make more time. Guest authors are more than welcomed.

Saturday, December 1, 2007

Setting Goals for My Blog

I’ve been writing online for three months now. I’ve experimented with writing at content sites such as: Helium, Associated Content and Constant content and also in maintaining my own blog here at Personal Financier.

I’ve made the most money in Constant Content and Helium’s Marketplace but I get the most out of blogging. There’s something else about writing a personal blog and having a readership.

As many self development and management sites teach us I’ve decided to post my goals for this blog for the 3 months to come. Here they are:

1. Unique visitors: 120 unique visitors a day (currently at 25).
2. Page views per visitor: 3 Page views per visitor (currently at 1.25).
3. Feed subscribers: 70 subscribers (currently at 16).
4. Article posts each month: 20 (18.5).

I’d like to take this opportunity to thank my readers and encourage all to mail any suggestions, requests, comments or thought to me at: