They Call Me Cliff.

The finance world spends so much time gazing at its own navel, that it thinks you spend all day gazing at its navel too.  It thinks you are living every day, judging every purchase by the outcome of the negotiations over the so called "Fiscal Cliff".  I think they're wrong.  I think most people aren't deciding whether or not to get their wives new espresso machines for Christmas based on what they believe will happen with the Fiscal Cliff.  I think a lot of people hear the term Fiscal Cliff and think of a big guy named Cliff, who seems to be bullying everyone, but beyond that they don't know any details.  And they don't really want to know, but they're being told they need to be freaking out about Cliff.  You can't turn anywhere these days without hearing about the panic he's causing, and how everyone else is freaking out about him.  He's like the monster in a B movie.

I'm watching the movie The Avengers with my kids right now and picturing the Hulk as Cliff.  But less green. 

If you told people what it all actually means, they might not think it was all that bad.  I mean if our congressional representatives can't reach a deal to stop the tax cuts from expiring, then everyone will pay a little more, including the very rich.  And then our debt will get paid down a bit, and maybe our government will stop whining about borrowing so much money because we don't have enough to pay our bills.  I mean let's keep this in perspective folks, it's not as if Loki will use the Tesseract to unleash his army of Chitauri soldiers to destroy Manhattan!  It's the expiration of certain tax cuts.  And yeah, some mandatory spending cuts will also hit, but isn't that what people want?  Less government spending?  Sure, all this is predicted to create all kinds of economic chaos and uncertainty, but mostly because once again our fearless leaders will have proven that they can't negotiate some kind of compromise, and that's weak.  The inability to resolve conflicts is just not a super-power.

The economy is usually effected most by the events it didn't see coming, not by something it has been obsessing over for months.  It's starting to look like the economy and the stock markets will suffer less from the impact of the much anticipated Cliff than from the fact that our leaders are still behaving like stubborn toddlers.  

I rather like the idea of Big Bad Cliff going to Washington to knock some heads.

To the delight of my sons, the movie The Avengers is full of comic book fantasy match-ups, attempting to answer age old questions, like "If Iron Man and Thor got in a fight, who would win?"  Watching these powerful characters go back and forth with the punches and kicks, wearing each other down (with a lot of impressive CG), I'm thinking about congress, slogging it out, but with far less entertainment value.   "If the Republicans and Democrats got into a fight, who would win?"  We just had an election, so we already know the answer to that.

  

So who will save us from Cliff?  Will it be Iron Man with his big ego?  Thor with his paternalism? Hulk with his destructive rage?  The double dealing Black Widow?  

No, it will be Captain America, with his high moral ground, and expectation of all Americans to rise above their pettiness and defend the honor of our nation.  Yes, this is a moment for Captain America, for whether or not the Evil Cliff takes us down over the edge, we need the Captain to inspire our leaders to compromise, in the ultimate act of patriotic fervor!

My Own Stimulus Plan

People ask how a mother of three gets so much done, and for them I have one word:  Coffee.   

For years now I've been watching my friends get onboard the single-serve coffeemaker trend, but have resisted on the grounds (yes, that's a pun) that those single use pods are both pricy and creating a lot of garbage.  I don't like waste.  Owners of the Nespresso remind me that their pods are recyclable, but I still wasn't buying, because I don't want to have to go to Bloomingdale's to buy single use coffee pods, and I don't want to ship the empties back to the company (see greenwash alert).  Anyway, I was basically ok with continuing to make very low tech coffee with the same little $6 reusable gold filter I've been using for a decade.  I'd put this thing on top of a mug, put in some coffee, pour boiling water in the top, and voila:  coffee.  No machine required.  I also have a nice stovetop espresso maker, that works very well, a french press, and a big glass carafe drip coffee maker.  I have coffee making options.

But then I had a birthday, and my husband gave me a really thoughtful gift that I really didn't like (see article on bad spousal gifts).  So I took it back to Bed Bath and Beyond, and got a nice, big store credit.  I wondered around the store for a good long time, trying to figure out just how I wanted to spend it.  I should be really happy about this predicament, right?  I love housewares!  I was determined to not use it for something functional like towels or cleaning products.  It was a self-selected, replacement birthday gift and I wanted something fun.  Predictably, I gravitated toward the kitchen appliances, and all those cool looking coffee making machines, which promised to solve a problem I didn't really have:  making coffee.  I went home and began researching (yeah, uh-oh).  I read dozens of online reviews, read consumer reports and asked all my friends what they had and how they felt about it.  Of course, every one of my friends swore by a different method of making coffee, so that was just confusing, and too much choice is really a terrible thing if you're me.  

I think I can now make convincing arguments for every coffeemaker out there.  I had just chosen a carafe-less, pod-less single serving coffee dispenser, when my friend (and coffee machine expert) Nicole convinced me that as the sole coffee drinker in my house, I should get one of the pod coffeemakers.  "But I don't want to be a pod-slave!" I protested.  I mean, I'm totally clear on the marketing gimmick.  It's based on the old Gillette "razor and blades business model" ("Give 'em the razor; sell 'em the blades").  HP sold me a very cheap printer, and now I have to buy their expensive ink. I'm wise to what the coffee machine makers are up to.  And I have ecological principles!  What about all that waste?  And then there's still the cost factor --- how much more are you paying per cup with a pod? I found myself standing in the isle at Target, trying to figure out if an 18 K-cup pack of Paul Newman's Coffee for $11 is a better deal than 10 pack of Coffee Bean and Tea Leaf pods for $6. (answer: it's almost the same: 61¢ v. 60¢). And with no pods?  If a pound of coffee yields somewhere between 32 and 45 cups of coffee, and costs like $9, you're paying about 20-28 cents per cup, so non-pod coffee is about 30-50% of the cost of pods, but I guess it's still much cheaper than spending $3.50 at Starbucks twice a day, if that's what you do now.

But Nicole correctly pointed out that you can buy refillable k-cups, into which you can put your own ground coffee, so I didn't have to become a pod-slave, or an eco sell-out.  Good points.  Ok, I decided to get a Keurig Special Edition ($119 after BBBY discounts). Besides being the only pod-coffeemaker with refillables, their K-cups are the most widely available pod, selling just about everywhere, and available in hundreds of flavors and types.  Not that I want to use a coffee machine to make tea, but I COULD!

  

The Keurig was great fun for about a week, but then I had to admit that the coffee tasted pretty bad.  Cant explain it, but this big honking machine taking up half my counter really didn't produce coffee that tasted as good as my old, pour boiling water into single cup filter method.  So I went back to reading online reviews, and talking about coffee makers well beyond the point of enjoyment for any of my family or friends (except Nicole), and I decided I would exchange the Keurig for the CBTL Kaldi.  Made in Italy by Caffitaly and sold under various names around the world, this beautifully designed machine makes both espresso and brewed coffee, everyone seems to love it, and it was on sale at BBBY for $99 (and with their 20% off coupon, $80).  Also, I saw an explanation of how you can take apart a CBTL pod and refill it to use it again and again.

And then something amazing happened: Nicole messaged me that I needed to run over to the Coffee Bean on Sunset Strip for their National Coffee Day Trade-up event, where you just had to show up with any old coffee maker and they'd swap it for a CBTL Kaldi!  So I ran home and picked up my 25 year old Braun coffeemaker, and brought it to them in exchange for a free Kaldi. Yay!

In truth, it does make delicious coffee --- much better than the Keurig. I've dissected the pods and have theories on why.  I've also managed to refill the pods with my own coffee and it worked just fine.  Does it make better coffee than my stove top espresso maker?  Not sure.  But it's pretty, and it was free, and I love free stuff.  I also like not having to clean out the espresso maker each time, and I feel like a rebel when I Macguyver their pods and reuse them.   

I didn't even need a coffeemaker, but now I have the Keurig AND the CBTL, and much less counter space!  I want to return the Keurig, but not before I use up all the K-cups I bought for fun.  And then I'll have to figure out what to do with the Bed Bath and Beyond credit again!  And I've discovered a new coffee problem: I now have all these single serve coffeemakers, but what if I have guests?  I traded in the big Braun, so I can no longer make a pot of coffee!  I've been told I should get the Aerobie Aeropress ($26), or an old school percolator($68), and I must say I'm rather intrigued by the  Pebo Vacuum coffeemaker ($80).  Or I can just put a $3 Melita Cone filter on top of a carafe and not buy anything at all.  

Except maybe some new bath towels…

I really need to stop thinking about all this but I can't sleep because of all the coffee!

Don't Be So Greedy

I know, I know, what you've REALLY been waiting for me to write about is what you should do with that extra million dollars you've got burning a hole in your pocket.  Well, that's probably enough to meet the minimums of many hedge funds, so that means you should be able to access some of the most highly skilled investment managers money can buy.  Yes, you too can belong to that exclusive club of those who enjoy gloriously superior investment performance with minimal risk, by taking advantage of all those exciting hedging strategies like short selling and derivative trading.  And it's fun to tell people. "I own a multi-strategy hedging portfolio".  Watch yourself saying it to the mirror.

It's so good to know that whether the stock market overall goes up, down or sideways, your brilliant hedge fund manager will still find ways to make you money.  He isn't tied to any of those tired, old fashioned, conventional investment strategies and restrictive reporting regulations that limit the gains of other funds.  He's free to do what it takes to get the job done.  The only bummer is that you often have to say goodbye to your money during a five year lock up period.  Well, that and the fact that in the last couple of years hedge funds have made a lot less money for their investors than super cheap index funds available to everyone through any discount broker.  

Yeah, sorry, it's true.  

In 2011 the average hedge fund actually lost 5%, which would only have been about $50,000 for every one of your millions.  But this year hedge funds made money.  The average hedge fund is up about 4.5% so far this year (but of course, you'd have to reduce that return by the 2% management fee and the 20% performance fee on the gains to get the real return).  Then there's the tax bill that comes after all that trading…

Sure, you could just invest in a market tracking etf, since the S&P 500 is up about 15% so far this year, and nearly 26% since last year, and that's without even adding in the dividends, but you're not into chasing returns, because that's for the less sophisticated investors and the greedy.  And investors who are paying like 0.05% in management fees on their boring old etf will never get that special feeling you have as a hedge fund investor, and they won't be invited to fancy annual dinners with the other wealthy investors who aren't getting very good returns.

Putting your money in an S&P 500 tracking etf would be so unimaginative, so it's really just not worth the $260,000 in gains you could have had.  And there's nothing more boring than a U.S. treasury fund, even if they have returned about 7% this year, and nearly 23% in the last year for a management fee of 0.15%.  Not the right investment for you.  And if you pulled your money out of your hedge fund (as people have been doing in droves over the last few months) the fund might end up closing down (as nearly 20% of hedge funds do each year).  And then people might lose jobs, and jobs are hard to find these days.  Could you really live with yourself if your greed caused someone to lose his job?  What about his house in Connecticut?  If he lost his job and his house, the state would lose important property tax revenue.  And if he pulled his kids out of private school, stopped buying fancy things and stopped contributing so generously to his religious and social institutions, then several other businesses might really be in trouble, and many more people might suffer.  No, in these challenging economic times, it would be wiser to forgo decent returns and not destroy the livelihood of so many people. 

Don't get me wrong, I'm not arguing with Simon Lack's assertion that between 1998 and 2010 hedge fund investors gained about 2.1% or $70 billion, while managers made about $379 billion, or that managers made hundreds of millions in fees while their investors actually lost money.  I wouldn't argue with that, and I also wouldn't tell you how you should feel about that.  You're an adult.  Maybe you're ok with it. 

Sure, for the most part, hedge funds underperform, are under-regulated and they charge obscenely high fees.  So what?  Privilege has it's price, right?  And it's not any one's business if you happen to be a very kind person who cares more about the well-being of your hedge fund manager than about getting a substantially better investment return.

Are we Happy Yet?

How's that whole pursuit of happiness thing working out for you? Are you happy? How do you know you're happy? Just how happy are you?

Recently, Federal Reserve Chairman Ben Bernanke said that we must look beyond economic indicators because economics isn't just about money, it's about promoting "the enhancement of well-being." 

Welcome to the world of Happiness Studies, and Happiness Economics, a concept also known as "Hedonomics".  Bernanke explained what many academics have known for years, that once basic material needs are met, more wealth isn't shown to make people happier.  This is known as the Easterlin Paradox. Recent studies have shown that any income above about $75k does not make a person happier (Ok, I'm sure that depends on where you live, but you get the point).  Americans are wealthier than they were 60 years ago, but apparently no happier.  There is what's called the “hedonic treadmill” hypothesis, holding that we quickly adjust to improved situations, or nicer things, and no longer delight in them, and also that happiness is relative (the point I was raising last week).  A Harvard professor wrote a book talking about how people constantly misjudge what will make them happy. He says we believe things like variety and more choices will make us happier, but that usually they don't, and we are then disappointed by what we thought would make us happy.

So if more wealth doesn't make you happier, what does?  Surveys have consistently shown that physical and mental health, the strength of family and community ties, a sense of control over one's life, and opportunities for leisure activity trump having more money when it comes to happiness.  It also turns out work is an important factor in happiness, and interestingly, so are relationships with women, for both sexes.
So how do you know how happy you are?  I mean can happiness be measured and compared?  Apparently, yes!  One measure of happiness is this Micro-econometric happiness equation: Micro-econometric happiness equations have the standard form: W_it = α + βx_it + ε_it , where W is the reported well-being of individual i at time t, and X is a vector of 3 known variables including socio-demographic and socioeconomic characteristics.
Did you get all that?
Don't laugh! You would be amazed to know how much serious scholarly work is being done in the field of happiness.  The Stanford Business Journal recently included an article showing how happiness correlated strongly to the use of time.  Feeling like we have control over the use of our time is big.  While some findings on the subject of how we spend our time were intuitive (like spending time with people being something that makes us happy),  I particularly liked the advice that one could enjoy experiences without actually spending time doing them.  "Research in the field of neuroscience has shown that the part of the brain responsible for feeling pleasure - the mesolimbic dopamine system - can be activated when merely thinking about something pleasurable, such as drinking a favorite brand of beer or driving a favorite type of sports car. In fact, this research shows that people sometimes enjoys anticipating an activity more than actually doing it."  This is obviously consistent with the finding that the actual experience is often a disappointment.  Also, "To increase happiness, it can make sense to focus on the here and now -because thinking about the present moment (vs. the future) has been found to slow down the perceived passage of time. Simply breathing more deeply can have similar effects."  While we can always make more money, we can't make more time.

Some have suggested that happiness is a genetic thing.  You're either wired for it, or you're not.  Researchers at the University of South Florida have uncovered a connection between low expression of a gene called monoamine oxidase A (MAOA) and self-reported "happiness" among women. But not among men.  And this is self-reported happiness, or "subjective well-being", rather than the measured kind, I guess.

So if you're not happy can you get happy? Maybe hang some inspirational posters around the office?  Or maybe you need to be nicer to your customers and employees.  Tony Hsieh, CEO of Zappos, wrote a book called “Delivering Happiness”, and built his company’s culture around "using happiness as a framework [to] produce profits, passion, and purpose both in business and in life".  The company has grown it's business by “wowing” customers with great service and lots of surprise freebees to make them feel special, and to prove that maximizing well being is good for profits.  Like many companies, Zappos has discovered that there's a quantifiable correlation between keeping their employees happy  and an improved bottom line.

In 1972, the King of Bhutan proposed we measure a country's success by measuring it's Gross National Happiness (GNH), rather than it's Gross Domestic Product (GDP).  Right now, America is looking at some pretty paltry GDP predictions, so maybe we too need to seriously consider trying to grow our GNH score instead.

And your personal happiness quotient?  Did you apply the equation above and determine you're just not as happy as you thought?  I say don't work an extra shift so you can buy a new pair of shoes, but instead, imagine what it would be like to hold the shoes, maybe while laying on a warm, sandy beach, on your own private island, sipping a margarita, with a woman, one with the happiness gene, while breathing very slowly…..  

For what it's worth, there's also a study that came out this year showing that too much happiness can make you unhappy.

Keeping Up with the Fake-Rich

Wealth is relative.  And I don't mean anything hokey like "You're rich if you have love", or "You're rich relative to the majority of the world's population, who live in squalor in countries whose names you can't pronounce".  I think people decide whether they're rich enough by comparing themselves to their friends and neighbors, or more precisely, to what they think their neighbors are earning.  And you're probably wrong about how much everyone else earns.  Chances are your neighbors aren't as rich as you think.  

Some people can't sleep at night because they worry about money, and for that problem, I recommend reading the U.S. Census bureau data, it might make you feel better about your financial position, and it might put you to sleep, but either way, you win!  

Do you know the median household income in Beverly Hills? $83k.  Surprising?  The median U.S. household income is about $50k.  Of course, that varies tremendously according to where you live.  In Great Falls, VA, the median family income is over $367k.  In Flint, Michigan, an income of $50k puts you in the top 30%, while in Nassau Co., NY, that $50k puts you in the bottom 27%.  Now $100k may put you in the top 31% in Seattle, but in Arkansas, Missouri, Mississippi, Alabama and Tennessee, you are in the top 10%.  In some parts of Michigan, a $178k salary gets you into the fabled 1%.  Of course, the median home price in Flint is $51k, so you probably don't need that much money to live pretty well there.  And unless you live in Flint, those aren't the neighbors to whom you're comparing yourself.

Going back to the example of Beverly Hills, let's look not just at the median household income, but the percentage breakdowns of income distribution, which means how many people are earning which amounts.  Only 18.6% of the 34,000 residents of Beverly Hills, for example, earn over $200k/year, and granted, that's quite a few people, but that means that the other 81% of the population is NOT.  The lady serving you coffee at Nate N' Al's isn't making $200k.  Neither is the guy selling you a tie at Sacks.  Those people may or may not be the ones to whom you compare your income, but there are a lot more of those people in BH than you might think.

Anecdotally, most of us can name someone who lives in a really fancy house, or drives a Bentley, but we happen to know that person is broke.  Is that person the exception, or the rule?  Can you judge your neighbor's wealth by outward appearances?  Probably not.  So if you're measuring your success against your neighbor, who may be fake-rich, can you find something else to measure your success against?  How about something hokey, like happiness?  Are you getting a good return on the energy invested in comparing and competing with the neighbors,  and what are the opportunity costs? Where else could you be putting that energy?   Are you just working really hard to create the illusion that you are wealthier than you are, so that your neighbors, who don't earn as much as you think they do, will think highly of you?  The question is not whether you should drive a Bentley ---- I'm not here to judge!  The question is: Are you happier driving a Bentley than you would be if you used that $250k for something else, and what are you sacrificing in order to create and maintain this image?  Remember, sacrificing doesn't always mean going without.  Even if you earn an exceptionally large salary that goes far beyond providing for the current and future needs of your family, there still are different choices you can make with the allocation of extra money, and only you can choose which action feels most consistent with your values.

In Malawi, by the way, the median household income is $596.  A year.  I'll bet your typical Malawian also compares his income to his neighbor's. It's just what we humans do.  I wonder if his level of happiness is pretty much the same as yours.  If he makes $597 this year, he'll have to choose what to do with that extra dollar.  Maybe he could use it to buy a copy of the Malawian Census bureau data.

Staying Gold

After weeks of celebrating the remarkable strengths and talents of all those beautiful young Olympic athletes, the party's finally over.  And what a disappointment it must be for those athletes to go from worldwide adulation to a world of financial uncertainty.  After all, coaches and sports equipment don't come cheap and it's hard to hold down a normal job while also training for several hours every day.  Sure, the handful of big names will go home from the games with sweet endorsement deals, but everyone else?  Their future might not be quite so shiny.

Ryan Lochte may have big plans for getting work on a reality TV show, but we'll see if that's enough to help his parents stave off foreclosure on their Florida home, and Gabby Douglas may end up spending the majority of her endorsement money bailing her mother out of the substantial debt which forced her to declare bankruptcy earlier this year.  On Average, five of the top ten American athletes in their event make less than $15,000 a year from the sport.  Just two of the top ten earn more than $50,000 annually from their sport.  And if you're not in the top ten?  Except for a few runners, you probably make next to nothing.

But what about the winners of those Olympic medals?  The gold medal comes with a $25,000 prize, the silver comes with $15,000 and the bronze will bring you $10,000.  Although these amounts are taxable, if your income was only $15,000 and then you earned another $10,000 from the Olympics, probably taxes aren't your biggest problem.  Dinner is.  And so is health insurance!

With the kind of lean, muscular bodies most of us only dream of ever having, the Olympic athletes may appear to be the paragons of good health and vitality, but try getting enough health insurance to cover massively expensive sports injuries, especially if you have pre-existing conditions from past injuries.  Blue Cross /Blue Shield sponsors the Elite Athlete Health Insurance program (EAHI), but very few can qualify to receive it.  There are only 1,000 such policies available, and each sport gets a specified number of them (150 for track & field; 5 for badminton, for example). But these policies are for the small stuff, like office visits, and they don't cover catastrophic injuries.  So athletes generally stay on their parents' plan as long as possible (age 26 now with the Affordable Care Act), or get on a spouse's policy, or take out additional coverage individually.

But all that struggling is worth it if you win one of those shiny gold discs, right?  Well, actually, it just looks like gold.  It's 93% silver and 6% copper.  Just 1.34% gold.  Sorry.  If you melt it down, the raw materials would be worth about $650 at today's prices.  The price of the silver and copper in the silver Olympic medal is worth about $335, and the mostly copper Bronze medal is worth about $5, so you might as well keep those for sentimental value.  However, some medals have gone for a lot higher prices at auction, like the gold medal won by Mark Wells of the 1980 "Miracle on Ice" U.S. hockey team, which recently sold for $310,700 at auction.  The better the story, the higher the price.

Same goes for endorsement deals, really.  Clearly, champs like Usain Bolt and Allyson Felix will get big endorsement deals, but what about that inspirational Oscar Pistorius, the double amputee who just raced against the best sprinters in the world on his crazy looking artificial blades?  Can't you just picture that face of inspiration on your Wheaties box? Yeah, I'm sure General Mills can too, and you know that tape the athletes seemed to all have on their bodies?  It's called Kinesio tape and I just saw a picture of Kerri Walsh on the box of Kenesio tape that was for sale at a high end sports equipment store.  Do you think she's on that box just because she likes the tape?  Hey, tape won't cure everything so she needs to pay for that health insurance (besides feeding her 2 kids and her 6'3" self).

Kerri will be glad to know that women make more money on endorsements than men do.  And to be fair, who's more likely to convince you to buy something, those pretty little gymnasts or big oafy Michael Phelps?  Sorry Michael.  Also, you have to be in a popular sport to make good money off endorsements.  No matter how good you are at handball, no one outside of the ten people who follow handball knows who you are, and McDonald's probably won't decide that paying you to tell people you eat their food is going to sell more Big Macs.

So just remember, to turn your Olympic glory into some real money, you should be a really cute female, preferably the best at a really popular sport, and have a compelling personal story, like having overcome a tragedy or other adversity.  If you can arrange for all of that, you have the potential to pull in the kind of deals that will pay off the financial disasters in your family's past and avert those which might lay ahead, especially as a result of not having enough health insurance.

My friend Izzy played a boxer in the Kaiser Permanente ad they were running during the Olympic coverage, and that got me to thinking, what if an athlete could get an endorsement from a health insurance company?  Maybe instead of the insurer paying the athlete, they could work out a trade, and just simplify everything.  Maybe the insurer could also throw in a policy for the athlete's broke parents, who've been paying for billions of gymnastics lessons and world travel?  Forget Wheaties!  Maybe if Ryan Lochte did an add for Bank of America, that little foreclosure problem could just go away.   I'm just thinking creatively here, and wondering what the tax implications of this kind of trade would be…

Anyway, start negotiating, kids!   Now that you're done playing volleyball, it's time to start playing HARDBALL!

Another Inconvenient Truth

Last week, Marissa Mayer accepted the post of CEO at Yahoo, and that was exactly what women everywhere said --- "Yahoo!"   We don't often see women in such positions of leadership and importance, especially in tech companies, so this is a big deal.  However, a lot of the cheering stopped when word got out that the brilliant young Google exec was also 6 months pregnant with her first child.  Passionate discussions instantly erupted all around about whether she could do it, whether she should do it, whether the board should have chosen her for the job at this moment (or at all), and what this means for women everywhere.  Was she setting a dangerous precedent by announcing that she would be back on the job within a couple of weeks of giving birth?  Should she model a long maternity leave to normalize that idea in corporate culture?  Will exhaustion and mommy-brain-fog take over and render her less capable of steering Yahoo effectively?  Mayer will be Yahoo's fifth CEO in the last 5 years, and the task of redefining and turning around this dot com ancestor, whose stock price has flatlined over the last 4 years, seems particularly gargantuan, but by all accounts, if anyone has it in her to pull this off, it's the ever impressive Marissa Mayer.  

Also this month, The Atlantic published Anne-Marie Slaughter's essay called "Why Women Still Can't Have it All", which describes at great length how she herself, and other highly educated women in top professional positions are finding that despite what they had previously believed, even with high pay and lots of nannies,  there are some jobs that just don't go so well with raising kids.  Getting away from the so called "mommy wars" (you know, that's where the working and stay-at-home mothers condemn each other's choices), let's explore the range of options available to women:

A) Don't have kids. (A.K.A. "The world is crowded enough.")

Pros:  Nice furniture.  High quality sleep.  Less embarrassing cocktail party conversation.  Make more money.  Spend it all on yourself.

Cons:  No one to guilt into taking care of you when you're old.  No one for whom to model your professional success.  No heirs to the fortune you amass. Depriving humanity of your exceptional offspring.

B) Have kids. (A.K.A. "Express biological imperative.")   

Pros:  Love.  Joy.  Fulfillment.

Cons:  Lots of laundry, whining, expenses, fatigue, inconvenience, distraction….well, you get the picture.  Oh, also constant vigilance and perpetual worry.

And if (despite the "cons") you choose to go ahead and have kids, then what do the options look like?

A) Don't work at all.  (A.K.A "Get your June Cleaver on.")

Pros: More time for friends/gym/naps. Not missing time with your children.  Lots of baking.  

Cons:  Poverty.  Feeling of wasted talents.  Betraying women's movement, and disappointing friends who expected more of you.  All that baking may necessitate more time at the gym.  Higher expectations of school volunteering.  Hearing "mommymommymommymommymommy" all day.  Every day.

B) Work constantly. (A.K.A. "Outsource parenting".)  

Pros:  Earn lots of money. 

Cons: Spend it all on nannies and helpers.  Questionable parenting decisions by said nannies and helpers.  Lack of familiarity with spouse and offspring.

I think the goal is to find choice "C":

C) Work less than constantly. Find work that has some flexibility. (A.K.A. "The Holy Grail").

Pros:  A feeling that your life isn't spinning out of control.  Love, joy, fulfillment AND adequate income to sustain everyone at a marginally acceptable level.  

Cons: Your house may still look like Romper Room, sleep will be compromised, and your career may be slightly less glorious.

Will Marissa Mayer find the middle path?  Who knows.  Perhaps being a middle path kinda gal doesn't get you to the C-Suite, and with the salary they're paying her, she won't have to make some of the difficult choices the rest of us have had to make.  And If she fails to turn this company into a screaming success, will she prove that women can't do it all?  No pressure or anything.  

Unlike most women, Ms. Mayer can view work as a choice, rather than an economic necessity, but just like the rest of us, she will have to make tricky choices about how she allocates her time, and just like the rest of us, she will be subject to judgement and criticism.  Speaking for myself, as a mother of three, I have struggled to find my personal middle path.  Finding a way to have an income, and a meaningful professional life that is flexible enough to accommodate the need to be a good mother, who provides for her kids emotionally as well as materially, has really become the goal, rather than merely an inconvenience. 

So Yahoo, Marissa Mayer!  I wish you the best, and I think a little baby swing might look nice in your new office.  And maybe, as the boss, you can just instate a mandatory nap time for everybody (including yourself).

You Deserve to Argue Like the Rich

Two interesting polls came out this week:

1) A Prudential poll showed that 53% of women are now primary breadwinners.

2) An SEI poll showed that in millionaire households where the woman was the breadwinner, the wife reported that her husband felt "stressed" by their financial roles.

Are wealthy women destroying their marriages by earning more than their husbands? A look behind the numbers reveals something very different.  Take the Prudential study.  Sure, it tells us that 53% of breadwinners are now women, but it turns out that's because 40% of the women who responded to the survey were single or divorced.  Among the married couples, the number was more like 22%.  Maybe numbers don't lie, but they don't always tell you the whole story, either.  In the SEI study, they surveyed millionaire couples and asked the wives who out-earned their husbands how they think their husbands felt about being out-earned.  No one asked the husbands how they actually felt about it, mind you, so no one really knows if they are bothered by it at all, or if they're perfectly happy with the arrangement, and their wives are just projecting.  

Sometimes it's all about what exactly was the question being asked. "Do you think your husband is stressed?" is very different from "how would you describe your husband's feeling about your roles: a) thrilled, b) stressed, c) despondent".  I'm just wondering how exactly the question was phrased. This study cites the sources of this alleged tension being "spending decisions, savings decisions and investment decisions", with the top sources of tension in all wealthy households being "kids and money, along with control and charitable giving".  Perhaps stress over which charities to support isn't keeping anyone up at night in your household, but isn't it great to know that even if you aren't wealthy, you and your spouse are probably arguing about the same things as much richer couples?    

An investment company generally doesn't survey people outside their target market, because people with no money to invest are not really of interest to them, but I have a feeling this data is not just applicable to the wealthy.  If they asked a woman making $30k/yr how her husband felt about earning $20k/yr, and I think it's quite possible she would also answer that he felt "stressed". This idea of being stressed about earnings isn't really unique to millionaires, they just happen to have only asked millionaires.  And altogether, women are very empathic.  Don't women at all income levels tend to worry about their husband's stress? I'll bet that a lot of women who stay at home raising kids, and don't simultaneously produce any income at all probably also think their husbands feel "stressed" by being in the role of the sole breadwinner.  I'm really wondering what useful information this study was intended to produce.  

Where do these studies come from and why do they exist? Well, investment companies spend a lot of money hiring researchers to give them some new information which they can then use to make more money.  So the Prudential poll result says "market more to women because they control more wealth. Except if they're married."  And the SEI study results can be summed up as, "Millionaire women feel bad about making more than their husbands."  And how can an investment company use this information to better market to those with guilt issues?  Here are some possible new advertising ideas for them:

"Let us manage your investments so that you don't have to worry about your husband being "stressed" about that too".

Or "Since your husband earns less than you, you should let us manage your investments so your husband won't underachieve there too".

If you're feeling a little poor these days, try picking a fight with your wife about charitable giving.  It will make you feel richer.  Expect to win the argument if your wife makes more money than you, because she feels just awful about that and so she'll probably let you win to assuage her guilt.  Or maybe ask her if wining an argument with you makes her feel: a) triumphant, b) superior or c) stressed, and reported this totally scientific data back to us here at this blog.

Oh, and also, keep in mind that these polls are often complete rubbish.

Getting Old Rocks

My husband turned 50 today.  This week he was slightly horrified to receive an AARP card in the mail, because we can say 50 is the new 40 all we want, but carrying around a card certifying your membership in the American Association of Retired Persons conjures thoughts of eating dinner at 4 in your white track suit on a cruise somewhere, hoping your dentures don't come lose.  I'm pretty happy that I'm not the one getting the AARP card, but I'm also just giddy with thoughts of AARP discounts!  For just $16 a year (less if you join for several years) you are entitled to a cornucopia of fabulous discounts not available to the younger set.  10-20% off at all the major hotel chains, discounts on flights, and yes, cruises.  Also car rental discounts, free donuts (thank you Randy, for the 411 on Dunkin), 20% off a check at Denny's (even if you eat there after 4 pm). You also qualify for some nice discounts on all different types of insurance, and there are TONS of shopping discounts!  

And WHY are all these retailers and hotels chains offering such attractive discounts to AARP members?  Because older people supposedly have more money to spend.  Because by 50, you're supposedly retired and your children have all grown up and moved on, and you're just sitting in that rocker, playing Words With Friends all day, right?  Um…. really?  I wonder how many Americans are retired at 50.  Turns out the U.S. Census doesn't keep statistics on retired people.  I know a lot of 50 year olds who would love to be retired, but according to recent polling, most Americans now believe they will work until they are 80.  And for those of us who got around to having babies in our 30's and 40's, let's just say we're nowhere near done paying for the care, feeding and education of those little darlings by 50.  So maybe 80 is the new 50?

Apparently, AARP no longer stands for American Association for Retired Persons.  It's just AARP.  You can't become a full member if you're retired but not 50 (because I'm sure lot's of retired people in their 30's are trying to join).  It's considered to be one of the most powerful lobbying groups in Washington.  Of it's over $1 billion in annual revenue, it spends about $25 mil on lobbying.  This leads to a lot of criticism, because AARP is supposedly just advocating for seniors rights, but it actually stands to make a lot of money from these lobbying efforts.  You see, besides being a charity organization, AARP lends it's name out to insurers to brand their products, and then receives commissions from sales.  AARP earns more money selling insurance to it's 38 million members than from membership dues.

So even though my husband and I won't be retiring anytime soon, I'm already scheming about how we can use those AARP discounts to bring down the cost of our next vacation with the kids.  And even though I now know they will be using our membership dollars to lobby congress to pass laws that enable them to make more money off selling us insurance, I'm still going to start crunching numbers to see where we might benefit from buying their insurance offerings.  But I think I'm still going to get my husband a white track suit today.  Because I'm mean.

Obamacare and Me

There are things I care about and things I don't.  I honestly don't care about the politics of the Affordable Care Act.  I don't care who the political winners and losers are.  I mostly care about getting a good deal.  Forget the millions of uninsured, and the kids who can now stay on their parents' policies, this is America, and I just care about me, and how much free stuff I can get.  Since getting a new health insurance policy for my family I have taken my kids in for vaccines and check ups that were covered at 100% (that means free), I have gone to an annual gynecological exam which was free, and I just made an appointment to have a mammogram, which will also be free.  I like free.  Ok, it's not really free, I'm still paying really high premiums, so I'm actually paying for it, but at least I finally feel like I'm getting something for those premiums, and not having to also pay co-pays and other bills on top of that monthly payment.  Apparently there are lots of people who don't like this new law because they'd rather pay for stuff they can now get for free.  You want to pay for free stuff?  Fine, I'm sure someone will take your money.  Actually, I'm that someone.  Just pay me.

I don't care about the Tom Cruise and Katie Holmes break up.  And I don't really care about the women who think they should be charged more than men for health insurance.  I guess I'm just cold hearted.  On the news they say most people oppose the health care law, so I guess most women would rather pay more than men for the privilege of not going bankrupt from medical costs, like the cost of having babies, or avoiding having babies.  I'm also sure there are lots of really rational people who get sick and require a lot of expensive care, but they'd just as soon decline any medical services after the cost of their care has reached a million dollars.  I guess I'm just not a good example of the average American, because I'd rather get the treatment that saves my life even after that million has been spent on me. 

I don't care who makes up what claims about the Affordable Care Act.  Like that actor who was in one of the ads for Romney's Massachusetts Health Plan after it came out,  who's now paying half of what he paid in health insurance premium beforehand.  I just saw him in an interview.  I don't care about him.  I care about me, and about getting a good deal.

I care about the nice letters and emails I got from the health insurers right after the Supreme court ruling.  I got a very reassuring email from Cigna, my current health insurer, telling me that nothing was actually going to change.  I also got a letter from Anthem, my previous insurer (whose marketing department clearly doesn't know I left them) about the importance of scheduling preventative care appointments to keep myself well.  I think it's beautiful that they still care about me, even though I no longer pay them.  And I care about them, and their ability to make a big profit off their customers.  Because corporations are people.

I know, I know, they're going to FORCE me to buy insurance now.  Well, they don't have to force me, I already have it.  Maybe you do too.  Otherwise they're going to FORCE you to buy it.  And if you can't afford it they're going to give you money and FORCE you to use it to buy health insurance.  But they are going to have to force me to take rebates for the insurance premiums I paid that weren't spent on my healthcare, because --- oh wait, I like getting money back, never mind.  Anyway, I know I'm supposed to hate this job-killing law.  They told me so. I guess I just don't understand it well enough yet.  I'm sure I'll hate it once I understand it better.  Or maybe I'll start caring about other people all of a sudden, and then I'll see how bad this is for everyone except me.

What I really care about is the foie gras ban which goes into effect Sunday.  

Going All Handcrafted Locavore

I'm thinking a lot about where I'm spending my money these days.  After my Sears experience, I don't want to shop at those heartless, big box stores, which sell products manufactured anonymously in China.  I want to feel good about where I'm shopping.  I want to spend money with businesses that care about me and represent my values.  I want to support local, sustainable businesses that sell high quality products with ingredients that are locally sourced.  It makes me feel connected to my neighbors and my community.  I want to support artisans and craftspeople who infuse their products with integrity and even love.  Using their products makes me feel special, so instead of just be shopping, I will be supporting things I believe in, and that will make me feel good about myself.

And not just just on American Express Small Business Saturdays!  

But what does it mean to shop local?  

Some states have been printing their own local currencies, like Massachusetts' BerkShares, which can only be used in the Berkshire region of the state.  You can go to a bank in that area and buy some BerkShares that you can then only spend in the local businesses, so you will choose to support those businesses instead of those suspicious national chains.  It's like buying carnival tickets --- it makes you buy more popcorn because the tickets are useless outside the carnival.   It makes you "go locavore" as I read in an article.  Of the roughly 110 local currencies trading in the U.S., California is in the lead with 15 different currencies.  Berkeley, of course, has 2 different kinds ---- I like the one named "Berkeley Bread", which I believe is now defunct. 

Maybe you can use your local dough at one of those trendy "cash mobs" you might have heard about.  Instead of meeting somewhere to break into seemingly spontaneous group choreography, a group of people agree to all descend upon a local store and each spend at least $20 there at a certain date and time.  It's a win-win: The store owner gets a nice cash infusion and some publicity, and the cash mobsters walk away feeling smug.

And what does it mean to be handcrafted?

Everything now is being advertised at handcrafted.  Handcrafted chocolates, handcrafted burgers.  handcrafted beer.  Not that generic, low class stuff that comes from a machine!  Please.  My mom is into handmade salt.  Isn't salt produced by evaporation or mining?  Handcrafted mining?  I just heard an ad on the radio for California Hand-Grown Avocados.  Are all the others machine grown?  What's next, hand grown chickens?  I just googled it.  You can get handcrafted chicken coops, handcrafted chicken sausage, and handcrafted chicken backpacks.   So what's the big fascination with handcrafted?  The dictionary definition is "made by hand, rather than by machine."  Somehow I feel all warm and fuzzy thinking that some really nice person handcrafted that coffee I just drank.  But an iPad is made by human hands.  So is it handcrafted?  It's not quite indy and edgy enough to qualify, is it?  It's too sleek and perfect. 

And really, why buy what you can just make yourself?  

Or better yet, have the kids make it!   When I went to art school, I heard lots of people look at the results of our deep, personal explorations and say, "My 2 year old could do that."  Well, now I have my own kids, and ya know what?  It's true!  Your 2 year old CAN do that!  And so can mine!  And kids should really start pulling their weight financially by the age of 2.  My kids make me stuff all the time.  And they make A LOT of it!  My 6 year old can fill an entire sketchbook in an afternoon.  Mother's Day was just a bonanza of the handcrafted, imperfect, but personal and meaningful.  That drawing of batman that now adorns the wall of my family room (not hanging, but actually drawn on the wall itself) is actually a handcrafted mural full of integrity and social commentary ---- a personalization of an anonymous wall; an experiment in tagging ---- so I was grateful to my son for adding that piece to our collection.

And really, why is handcrafted by a child less valuable than handcrafted by an adult?  Especially when the results are often indistinguishable.  Is it a matter of scarcity?  I mean does the sheer quantity of a child's output make the result less rare, and thus, less valuable?  Do we need rarity in our handcrafted?  Do I care how many beaded necklaces that lady sells through her Etsy shop?  And if I pitch my kids' drawings anonymously, just saying they're done by an "up and coming" young artist with a primitive style (rather than by an actual child)  will I manage to not disrupt the handcrafted mystique, and successfully separate people from their money with all that good will of supporting their local artisan?

West Elm now sells Etsy products.  I wonder if we can get a mass distribution deal there.  And we could outsource production to other children when mine have been exhausted.  Eventually, we can have children in China produce huge stacks of drawings, because with the internet, who really cares where anyone is….  

Oh wait, that's not locavore…  Ok, but I'm still going to start demanding all my goods and services be handcrafted from now on.  And I want handcrafted legal documents protecting me from the consequences of poor quality. 

Immature Hashtags and Small Victories

Unhappy with customer service?  Hit 'em with a hashtag.

I've been unhappy with Sears for quite some time, but my vacuum cleaner is still under warranty with them, and I intend to get my money's worth, so last week I decided to take it in for service.  Now mind you, when I bought my vacuum cleaner at the Sears store in Santa Monica, I could just take it there for service, but then they closed that service center and sent us to Culver City for service.  I wasn't too upset about this, because it was actually a bit closer for me, but then they closed that service center too, and now we have to go out to the Baldwin Hills Location at Crenshaw Plaza, which is a significantly bigger shlep.  So I set off to take my canister vac to the service center, and as I try to enter the store, the door won't open.  A woman approaches me from the other side of the glass, looks at me holding a toddler in one arm and a canister vac in the other, and points to the sign that shows they're not open yet.  No smile, no friendly words, not rushing off to do anything else, just looking at me.  We stand there for a while like this, staring at each other; me in disbelief, her looking at me blankly, as if to say, "wow, that must be hard to balance like that".  Finally, I leave, because I have to be across town for a meeting.  

Two hours later, I come back, and the door opens, and this time I'm greeted by a machine.  The machine welcomes me to Sears, as if we are both standing somewhere far more exciting than a dirty back hallway inside a delivery gate. The machine asks me to enter my last name, and choose which type of service I'm there for.  It then tells me to wait for a representative to emerge from behind the Employees Only door.  I do, and as I wait, I listen to other people cussing at the machine, trying to get it to understand their problems.

Finally, a guy comes out, takes my vacuum cleaner and says I'll get it back in two weeks because it has to be sent out to Fullerton for service now.   

Annoyed, I walk out and quickly tweet something about the crappy customer service at Sears these days, with the hashtag "searssucks".  

Two minutes later, I get a message showing I'm now being followed by @Searscares.  After 3 days of twitter and email exchanges (during which I try to seem polite, yet unsatisfied)  I get a call from Kia, from something like the Don't-Hate-Us department at Sears, and she wants to hear me complain.  I, of course, am only too happy to oblige!  So I vent (but try to remain polite and not blame her for the lame company she works for). After she has validated my frustration, she offers to send me a $30 gift card.  Woohoo!  

I call my father to brag.  He says, "That's nothin'!  I've got hundreds of dollars in gift cards from them."  I guess he complains a lot.  Then I tell my mother, and she says, "They recorded your call to use for training purposes.  It's like a focus group.  They got your input for only $30 --- that's a great deal for them!"  OK, way to steal my thunder, folks.

So now I'm thinking maybe I'll keep tweeting my displeasure with Sears once a week, and build up a nice passive income from their hush-money handouts.  And maybe I'll start tweeting unflattering comments about other large retailers too --- maybe Best Buy or Walmart.  I've never even been in a Walmart!  But I'll bet they also have a team of negative-tweet catchers that will pay me something to stop.  I don't even have to go in the store, I can just make stuff up.  I won't use names, no one will get hurt.  But they'll also probably just send me gift cards for use at their stores, and I'm not sure what I'd actually want from their stores.  I don't think I'd want to buy a vacuum cleaner from them.  So I was thinking that maybe, rather than making up childish hashtags to use when tweeting unpleasant, and possibly fictitious things about Sears or Walmart in cyberspace, hoping I might elicit a response (and a gift card) from their damage control people, maybe I could just blog about all this, and then you would click on some of these ads (Ahem, that's your cue, start clicking), then I'd make enough money to buy a new vacuum cleaner from a different store ---- maybe a nice local store, where I can just go tell the manager, or even the owner if I'm unhappy about something, and maybe that business owner will be kind enough, and care enough about my business to just open the door for me when I arrive a few minutes before they open holding a child and a vacuum cleaner.  

Then I'll have to come up with nice hashtags.  

Until then, #searsstillsucks.

The Biggest Loser

The equity markets enjoyed a nice, big rally Tuesday, and a smaller one today, after some rather unpleasant losses lately.  In my world of lost sleep, lost luggage and lost causes, I've been trying to put financial losses into some kind of perspective.  Even after yesterday's rally, we've still lost about 7.5% from the March high of 1422 on the S&P, and the Euro has lost about 7.5% of its value against the dollar .  Meanwhile, JPMorgan Chase lost $17.5 billion in some sketchy trading activity a few weeks ago, and movie-going on Memorial Day weekend lost about 31% from last year.  Was this because of mega-flop John Carter?  It lost about $84 million.

And let's not forget our "friend" Mark Zuckerberg, who seems to have lost about $5 billion in the last couple of weeks (give or take a mil).  Compare that to Greece's largest lender, National Bank, which reported a $666 million loss in the first quarter.  Maybe Zuckerberg can bail them out!  He could at least "like" their page, and change his privacy settings to allow targeted ads using pictures of him vacationing in Greece.  

So where did it all go?  The lost money ---- did it all just evaporate and cease to exist?  Or did it just go somewhere else?  Is it all a Zero-Sum game? Ya know, a "my loss is proportionate to your gain" type of thing.  Like if the job went to to that guy over there, it didn't go to you, so his gain is the same size as your loss.  For every winner there's a loser, whose despair is equal to the winner's joy.  If it's a zero sum game, losses don't evaporate, they just go to the guy on the other side of the deal --- like the person who you bought your Facebook shares from.  And the winners and losers keep shifting.  Who won in that deal?  You, who got shares of a supposedly hot IPO, or the other guy, who got your money?  The person you sold your FB shares to at $35 may have thought he was the winner, because it was below what you paid at the IPO, but when he resold those shares to the next person at $28 he didn't feel like such a winner anymore. The person who bought them at $28 may end up a big winner, or an even bigger loser, when there's no one who believes FB will be able to make any money off ads no one seems to be clicking (and aren't even visible on my iPhone FB app).  

So who really wins when FB goes down from $45 to $25 a share?  Short sellers?  Brokerage houses handling the trades?  Anyone else?  Bueller? 

Is John Carter's loss the Avenger's gain?  For it to be a zero sum game, the Avengers would have to have made $84 million, and so far it's made $1.3 billion worldwide, so that's not a zero sum.

The Euro's loss is your gain, if, say, you're planning a trip to Paris this summer.  You can get a few more croissants for your buck.  One analyst was just saying that all the trouble in Greece and elsewhere will only strengthen American banks, which will get the business that European institutions lose.

And let's face it, the only thing anyone ever really wants to lose it weight.    What if that were a zero-sum game?  What if you could lose weight and someone else would gain it?  I see potential for a great reality TV show there.  "The Biggest Winner".  People who have really fast metabolisms and can't gain weight could put on someone else's cast off pounds.  But that wouldn't be a zero-sum, it would be a win-win.  So maybe instead the person who took your job and your money would have to also take your fat.

Just brainstorming.

Economic Lessons from British New Wave

A few months ago I wrote about How To Make Yourself Feel Better When The Stock Market Tanks, and today's market action may be a good time to revisit that post.  Terrible economic numbers led to a huge selloff again today, capping off a really painful month of 8.5% declines in equities.  Unemployment is now back up to 8.2%, and in the past month, only 69K new jobs were created, which is half of what was expected, and significantly less rosy than the 275k jobs added in January.  So where's the silver lining?  For that we must turn to Europe.

In 1983, my parents decided to let me and my friend go alone to a rock concert at the Greek theater in Hollywood.  The top of the bill was scowling English singer (and one of my personal musical fav's), Joe jackson, and the opening act was another UK export: an impish young singer in a parachute jumpsuit named Howard Jones.  I was too young to understand anything about the world economy, but seeing as the U.S. jobless rate in 1983 was 10.4%, I now see what Jones meant when he sang "Things can only get better"!  In the UK it was worse --- joblessness in 1983 was over 11%.  By the end of Reagan's second term in 1988, the unemployment numbers declined to 5.4% here in the U.S., and they came down to 8.6% in the U.K., under the warm and loving leadership of Margaret Thatcher.  So things DID get better!  Did the economic improvement come as a result of Jones's infectious optimism?  Perhaps. 

(Later today, you'll have me to thank for the "wo, wo, wo-o-oh" stuck in your head.)

Relative to the impressive job creation data that was coming out a few months ago, today's job numbers look pretty bleak, but when those numbers eventually start improving, the new numbers will look great compared to what we got today, and then everyone will feel better, and start buying up stock to celebrate.  Of course, one of Howard Jones's other big hits was "No One is to Blame", and although that's a beautiful sentiment, we all know who's to blame this time.  Europe.  This whole austerity thing doesn't seem to be working out so well.  Think we've got it bad? Unemployment in Spain is like 24%!  But are they practicing Howard Jonsian optimism? No!  They're rioting in the streets!  They'd be thrilled to see unemployment at 8.2%.  See?  It's all relative.

We've all just been busy watching Kate Middleton's belly for signs of an heir, so we may not have noticed that the UK unemployment rate is currently at 8.2%, just like ours.  And we need a good distraction right now, because watching our investment portfolios decline in value is no fun, and economic improvement can sure take a long time.  The Brits are all wrapped up in Jubilee Fever right now, as Queen Elizabeth celebrates 60 years on the throne with a Diamond Jubilee extravaganza this weekend.  Sure, she's just a figurehead, but the British monarchy drives an estimated £800 million annually in tourist revenue, and the royal household alone employs about 1200 staff members.  Haven't you been watching Downton Abbey??

Watch the video of Howard Jones singing "New Song" .  You'll be so busy watching his improvisational mime sidekick Jed Hoile, that you won't notice there's no band or anything, just Jones and a keyboard, and that would be kind of boring to watch by itself.  Let this video be your example of how to distract yourself while market conditions improve at a snail's pace, and remember that crappy numbers make a good baseline for future year over year comparisons..  Also, busy your mind reading into the lyrics:  "Don't crack up, bend your brain, see both sides, throw off your mental chains."

Getting to Easy Street

Working for a living is so boring!  Good thing there are so many viable alternatives.  Let's forget the illegal stuff for now because a jail term could really derail your financial plan.  But surely those stories of your uncle who struck it rich when he invented the pencil couldn't have been made up.  And you're a smart cookie, so surely you can come up with something better than sitting at a desk all day, wasting your talents.

1) Invent something:  Don't let the odds discourage you!  Just because there's only about a 2% chance that your patent will earn more than it's cost, doesn't mean the next big idea won't be yours.  I mean, someone had to invent Post-It's, right? (no, it actually wasn't Mira Sorvino).  And look at the woman who invented Spanx --- She's the youngest female self made billionaire.  And you also spend a lot of time trying to think of ways to make your butt appear slimmer, so really, that could be you!  

2) Play the Lottery:  Sure, you are 100 times more likely to die of flesh eating bacteria than winning, but apparently 1 in 3 people in the U.S. think the lottery is the only real path to financial security (and really those people should call me, we need to talk).   Like the ad says, You can't win if you don't play, right?  The odds are long (one in 175 million), but someone has to win, and I'm pretty sure the winner is usually the person determined to be most deserving.

3) Game Shows:  You're outgoing, spirited, and you have quick reflexes.  What could be better than playing games on TV for a living?  You probably won't make millions, and some of your winnings may come in the form of a set of patio furniture, but ya gotta love free stuff.  Oh, and don't forget you have to pay taxes on the value of the patio furniture set (and that the value gets added to your taxable income, possibly bumping you up into a higher tax bracket) otherwise you'll get sent to jail like Richard Hatch who won Surviver, but it's still great just to know you're smarter than a fifth grader.

4) Attend focus groups:  Ok, so slightly less thrilling than playing the lottery, obviously, and the pay off is also less glamorous, but what's wrong with getting paid $100-$300 to give your opinion about something? Sometimes they even give you snacks!  Better than sitting at home and yelling at your TV, right?

5) Selling bodily fluids:  I've read you can make between $200 and $250 a month donating plasma twice a week, and you don't have to really have any skills at all for that, just a body that weighs over 110 lbs (preferably your own).  If you happen to have a male body, you can also sell sperm for somewhere between 50 and 300 bucks at a time, but you can usually only do it once a week.  Still put that and the plasma together, and you might be able to take care of your car payments, for example, while you help populate a small city.

6) Blogging!  Apparently, you can make a lot of money blogging, and I should know because I've now made well over $36, and I'm getting very close to being able to fund college for my kid from this.  Of course, it will be just a single course at community college, and I have 8 more years of blogging to make up the shortfall, but I'm an optimist by nature.

Narcissistic Peacocks and the Sand in Your Ears

I find it shocking how quickly many women will tell me how little they understand about financial matters.  And why is that?  A man with about the same level of knowledge will usually have a completely exaggerated sense of his knowledge and abilities!   It's not that we can't understand financial issues, it's just that most women don't seem to really want to.  And why is that?  Women don't dislike money, and they don't dislike doing smart things, so what is it?  

Well for one thing, financial choices involve risk, and we don't really like risk.  Biologically, we're not really programmed to like risk (appetite for risk apparently increases with testosterone levels.  Yeah, Really!).  Making financial decisions involves the risk of making bad ones, that might result in losing a lot of money.  We don't like making mistakes (or at least that's what I've been told by those who have made them).   There's also risk involved in asking questions about things we don't understand.  Maybe we don't want to risk being thought of as stupid.  Of course, these are generalizations, and it's not fair to say that every man parades around like a proud peacock who knows everything there is to know about money, but I do seem to meet an awful lot of women who behave rather like financial ostriches.

In a recent National Geographic article on The Evolution of Narcissism (god, I love that title), researchers explain that overconfidence can be to one's benefit when the cost of failure is low, the potential benefit is high, and the strength of the competition is uncertain.  For example, a man trying to pick up a woman, will overestimates his charm and attractiveness, see there are no competitors around, quickly assesses the consequence of rejection as something he can live with, and then, by coming off as strangely confident, he succeeds in winning the woman's affections.  

But if the cost is high (let's say, losing all the money you have in the world), then overconfidence isn't always very useful.  Overconfidence can make you feel comfortable taking on big risks, but it can be a problem when not matched by the ability to asses the degree of risk, or ones ability to overcome it.  The Avengers are overconfident, but they have superpowers, whereas you should probably not anger that really large guy in the car next to you with the shotgun rack.  He may not find your overconfidence all that charming.  Therefore It should also be said that this willingness to take big risks does not result in more frequent successes.  Your overconfidence in your investment skill does nothing to help you overcome the statistical improbability of beating the market.

In the area of finance, women tend to be under-confident.  We don't want to risk losing money on an investment, so we leave the money in the mattress, and lose buying power to inflation.  We don't want to make the mistake of trusting the wrong advisor, so we don't get advice, or we don't invest at all.  We generally don't ask for as high a salary, because we don't want to risk alienating the boss and not getting the job.   If OVERconfidence is a reflection of underestimating risks, and costs, UNDERconfidence must be a matter of OVERestimating them.  

Overconfidence may be foolish, but sticking your head in the sand is not sexy either.   And somewhere in the back of a (heterosexual) woman's brain is the ever-present idea that a man will come along and take care of her, and that he will unburden her of the need to get involved with all this high stakes financial stuff that she doesn't really want to deal with.  Maybe he will be on a white horse……with chocolate… and a Merit Badge in finance….. 

But then the list of risks shifts to include things like:

1. Risk of (overconfident) man underestimating risk and making unfortunate decisions with our money.

2. Risk of disagreement with (overconfident) man about allocation of our resources (i.e., "You bought WHAT??"). 

3. Risk of losing money in expensive divorce from (overconfident) man.

Of course, the good part about the guy-on-horse strategy is that unlike all those scary things like overcoming your fears and risking failure, it's surprisingly easy to find the confidence to blame him for making dumb financial decisions.

The Curse of the Credit Card Points

Psychologically, the concept of rewards is a powerful thing.  We really like to receive rewards and they can be a very effective motivator.  Trader Joe's gives my daughter stickers at the check out, and that motivates her to be still long enough for me to pay them.  My credit card company gives me reward points, teasing me with the idea of free travel, so I will use their card and help them make money.  But accumulating points is only half the story.  Ever try to actually use those points to take a trip? You'll often spend so much time trying to make it work and get the best deal that it becomes your second job. There's that pile of points that you have worked every angle to amass, and now you want to use them.  But you soon discover you either can't use them on the dates you needed, or you can't get the best prices because you have to book through the company giving you the points (AMEX, for example), or you can't share points with your spouse, and eventually, you give up and just pay full price so you can stop thinking about it already.  

I have 68,000 Amex points, and I'd like to take a trip with my family.  That should get me a reward equaling about $600 off air travel, but while a $600 ticket costs you 60,000 points, a $601 ticket can cost you 90,000 points because of the tier structure.  Also, the mileage award is on EACH ticket, not the total price for all the tickets, and you have the fun of comparing all the different ways you can use your points. 

So if, for example, I take my family to Chicago for a few days, and buy the tickets through AMEX, each one costs $319. here are the options:

1. I can use 60,000 to get a 15,000 point reward of $150 off each of 4 tickets, plus pay $169 in cash on each one, and buy one ticket for cash, for a total outlay of $998 in cash, OR
2. I can us 67,500 point to buy three 22,500 point rewards and then pay $923 for the other two tickets (and be left with no points)  OR
3. I can use 50,000 points to buy two 25,000 point rewards and then pay $1,098, thereby spending an extra $100, but having 18,000 points left, which is worth a $150 travel reward.
4. mind numb yet?

With AMEX, I have to book the travel through them, and that means I can't always get the best prices on tickets.  So am I better off just trying to get cheap tickets on my own, paying with my credit card to accumulate more points to spend at a later date? 

And let's face it, $600 won't get a family of five very far on a plane, so am I better off trying to use my points for a hotel stay, for example?  I proceeded to spend more hours researching this, and discover that the really cute hotel in San Francisco that would be just perfect for my family is not available for booking through Amex.  While I can get 5 bonus points for every dollar if I book it through Hotels.com through the Perk Central part of my Capital One Venture Card website (see yesterday's column), the price isn't as good as if I book it through the AAA site!  The experts always say you should just call the hotel directly and ask them for their best rates, and so I do, and they tell me that if I join their rewards program, I can get 15% off, which makes the price even lower than the AAA rate, but then I can't book it through hotels.com and get 8x the points!

I am preoccupied with the "opportunity costs".  If I use my points for flights, would I have gotten more value using them for hotel stays or merchandise?  If use my points now, when I can't get very much for them, will I regret it later, when I could have saved up so many points that I could take us all somewhere great for free?  What if I use my time to work and earn money rather than wasting it researching this stuff?

Ok, so what about cashing in points for gift cards?  I see Amex has Marriott gift cards, what about cashing in points for those and then using them to pay for a few nights in a Marriott?  Turns out a $100 Marriott gift card costs 14,000 points, which isn't a very good deal at all, in my opinion, because my amex points would only buy me 4  $100 Marriott cards, and I'd be spending 56,000 points to get a $400 benefit, which is probably less than the price of two nights, and I don't want to stay at the Marriott, anyway.

What if I just book a trip through Groupon or Living Social or Jetsetter?  Won't that just be cheaper overall?  I know I can't use Amex points to pay for that, because I can't book it through them, but what about Capital One points?  I call Capital One again (I figure they'd miss me if I didn't call them today), and I learn that I can not only use their points to pay for those types of discount deals, but I can pay for ANY travel expenses, like dining and shows with their points too!  I like that.  Capital One is now pulling ahead of Amex in the race for my spending dollars.

And what about stuff?  How about if I just cash in my miles for a new TV?  Or I can cash in my miles for a Best Buy gift card and get a TV there that's on sale and then just buy my travel separately…  I can get a decent little Samsung flat screen for 58,000 points, or I can get a $250 Best Buy or Amazon gift card for 35,000 points, which would probably be enough to buy me a decent little TV…

And then there are those points I accumulated on Continental before it merged with United and became United points?  What can I use those for?  Wow, look, I have enough points for one free ticket somewhere in the U.S., and so do 2 of my kids!  We should go somewhere!  And I'm really exhausted right now!

There is just no right answer.  You just have to choose.  You can spend your life obsessing over this minutia and end up wasting 3 days to save $10. I think the best idea is to use the points as a "travel savings program", and just let the miles accumulate until you have enough to save a substantial amount on a really great trip. 

And me? I think I'll just book the hotel I wanted in S.F. for the best price I can get (yes, I'll join their loyalty program too, what the hell.), using the 2-mile-per-dollar Capital One card, and keep the Amex points, the United points and the Capital One points for now.  

Now I really need a vacation.