Friday Assorted Links

1. Starbucks is constantly innovating.

2. Excellent pictures of the Tour de France in case you missed it. Even if you followed it, check out the second image.

3. The New York Times is struggling mightily to reinvent itself.

“As one editor put it, ‘The mood at the paper is poisonous in a way I’ve never seen it in the past 15 years.'”

4. The Good Wife, while starring at Peralta Junior High School in Orange, CA, once scored a basket in the opposing team’s hoop. Here’s hoping this makes her feel better.

5. Are helicopter parents ruining summer camp? Sadly, dear readers, this is a rhetorical question. Best not to read if you already have high blood pressure.

6. Raising a truly bilingual child.

Teaching and Learning New Skills

What’s the best way to teach? It depends. The most effective methods vary depending upon whether one’s aim is the transmission of knowledge, or the application of knowledge, or the development of skills or particular ways of thinking and acting.

More succinctly, is the focus on knowledge, skills, or dispositions? Too many teachers emphasize the transmission of knowledge at the expense of its application and the development of skills and dispositions.

Recently I’ve learned two new skills—how to make a green tea latte and how to change a flat bicycle tire without tire irons. The way I’ve learned these skills has me thinking about how teachers need to adapt to 21st century realities.

I despise all things coffee, which as a Pacific Northwesterner, puts me in a precarious position. I shudder to think of the consequences if I am outed. I used to “pass” by drinking tea, but the truth of the matter is I was never “all in” with tea. Then, one day, before a flight, I was walking through the Seattle airport when a Starbucks employee handed me a small sample cup of their green tea latte. Love at first taste. I began to drink them usually when I scored a gift card, but an addiction began forming, and I began dropping $4 of my own money for occasional warm, sugary, liquid fixes.

Then I got inspired by my neighbors’ and brothers’ declarations of independence from pricey coffee in shops. Their badass expresso machines and money saving morning rituals were the height of cool. So I resolved to stick it to Howard Schultz too and turned to the great 21st teacher of skills—YouTube. I watched four or five different tutorials on how to make “the same green tea latte that you get at Starbucks”.

Now I should make my own instructional vid because after a few months of tinkering, I have it dialed in. Of course, green tea latte making is a subjective and creative art. Mine are made the right way—stronger, hotter, and slightly less sugary than the mass produced default.

And since my sissy will wonder, no, I’m not buying any of the green tea health hype. Any alleged benefits of the green tea matcha powder are no doubt offset by the teaspoon of sugar, cow’s milk, and pure vanilla extract.

Simply put, I like the ritual and love the taste. And while this is weird to write, so probs even stranger to read, I feel different after finishing mine each morning—calmer and more centered. Also cool, I save at least 75% of what the inferior mass produced drink costs and the time and expenses of a roundtrip car trip to the local Starbucks.

Skill two. Recently, while mixing things up on a team training ride, the tube in my front tire exploded. It was harder than normal to change because I had just replaced my tires. New tires sit much more snuggly on the rim, usually necessitating tire irons. I had one, but should have added another to my seat pack after switching out the tires. Sitting in gravel on the shoulder of the road, I stared hopelessly at my rim. Then I remembered a YouTube vid I had recently watched in which a professional cyclist showed how you can pull the skewer out of the hub and use the quick release as a tire iron. Brilliant. I was up and running in a few minutes.

When teaching skills, school teachers and parents and coaches need to show students how to ties shoes, write persuasively, throw a javelin, make a green tea latte, or change a flat bicycle tire. It’s not enough to tell them. YouTube videos aren’t the only way to model skills, but they may be one of the best.

[What’s a helpful skill you’ve learned via YouTube?]


You Don’t Need a Financial Planner, You Need Financial Teachers

The things I don’t know how to do dwarf the things I do. It’s sad really. Altogether, my incompetence is pretty staggering. I can’t speak any foreign languages. I can’t play any instruments or sing. I can’t listen patiently. I’m hopeless when it comes to plumbing, electrical work, bicycle and car repair. I don’t know how to sew and I can’t do my own taxes. I don’t know how to garden, bake bread, make beer, or fix the ice maker in our fridge. I can’t keep pocket gophers from tunneling all over our backyard. I don’t know how to backstroke underwater and html baffles me. I could go on and on, but you get the drift.

Despite this pathetic reality, I went against type recently and taught myself two things, how to create excel documents and how to prepare a Starbucks-like green tea latte. Life is especially good now that I don’t have to spend my weekends adding numbers or pay $4 for my daily kickstarter of choice.

Few people know how to manage money well so they turn to financial planners for help. Gail MarksJarvis ask whether there’s any value in financial advisors who get it wrong.* She points out that:

. . . the recently released 2008 Federal Reserve transcripts showed that even economists of the world’s most powerful economy didn’t have a clue. Even as Lehman Brothers collapsed, they expected the economy to grow, not go into the worst recession since the Great Depression.

That, she adds, should. . .

pierce an illusion many individuals embrace as they pour trillions of dollars into the hands of financial advisers they think can read the future and thereby deliver riches and safety.

Individuals, she says, entrusted about $13 trillion to advisers, ranging from financial planners to brokers and insurance salespeople, through the end of 2012.

Ed Gjertsen II, president of the Financial Planning Association admits, “We do not have a crystal ball. We make guesses.”

Gjersten laments:

Clients demand: Give me a hot tip so I can spend whatever I want. But the truth is, the individuals have more control over the outcome based on what they spend than the adviser has with investments.

MarksJarvis adds:

Even economists are more fallible than people might believe. The transcripts of the Federal Reserve in 2008 showed it relying on faulty models that didn’t take into account unique circumstances of the banking crisis. Based on little knowledge, they give very firm opinions.

In my early 30’s I taught myself how to manage money when it became apparent that the financial planner I hired didn’t really give a damn about my family’s future. Over time, I realized that he recommended investments that paid him generous commissions. Investments that not only took time and money to undue, but ones that performed worse than bond and stock index funds.

There are two types of financial planners—commission based and fee based. Fee based planners who charge by the hour are far better than commission based ones who are prone to recommend investments that enrich them more than their clients. What people really need are skilled financial teachers who can help people learn to manage their money themselves because of the lesson I learned the hard way two decades ago, no one cares about you or your family’s future nearly as much as you. But where are the financial teachers?

13 trillion dollars! Much of that spent on investment strategies that underperform market averages. What a travesty.

If the world’s most incompetent person learned to manage money, odds are you can too. Start with The Elements of Investing by Burton Malkiel. But don’t succumb to the widely held view that technical knowledge is the key to personal financial success. The key is defining “success” yourself and developing a complimentary mix of technical knowledge; self discipline; and dare I say, spiritual depth; to create the future you want for your loved ones and you.

* Thanks to the best ex-mill hunky for this reference.

Personal Economic Balance

First Born (FB) likes her Starbucks and thinks nothing of dropping 4 bills at Schultz’s stores. Last summer she capitalized on her selective private liberal arts education to secure a part-time job weeding a neighbor’s yard. Late summer, on the way to a concert in Portland, I asked, “Would you keep drinking Starbucks if each time after your last sip you had to immediately walk outside the store and weed for thirty minutes?”

The “probably not” look on her face was a thing of beauty. Maybe there’s a glimmer of hope she’s learning the value of a dollar, or more specifically, four dollars.

Gears spinning in her head, and captive in the Japanese compact, I decided to launch into my “economic balance” talk which was so brilliant it deserves this larger audience.

The economic balance equation is a simple, three-parter: One’s hourly wage + one’s hours spent working – one’s purchases also known as expenses, overhead, or standard of living.

If a person make’s $10/hour and chooses to spend $4 for a Starbucks drink, then the cost was 30 minutes of work time (rounding and after taxes). For a therapist, plumber, or attorney making $100/hour, the same Starbucks costs 3 minutes of work time. I would not weed for 30 minutes for a extra hot, nonfat, grande green tea latte, but I would for three.

Let’s zoom in on each part.

1) Hourly wage. The challenge here is that in the U.S. in the last ten to twenty years the average person’s wages have fallen relative to (very low) inflation mostly as a result of amped up global economic competition. U.S. consumers buy inexpensive goods from China; to try to stay competitive, companies shift their manufacturing operations to distant places where their labor costs are greatly reduced; a lot of workers lose their jobs; margins shrink; and then new workers are offered some of the previous jobs at much less than their predecessors made.

Or the domestic version. States experience massive budget debts as a result of recession, increased unemployment outlays, accelerating health care and higher education inflation, and unsustainable pension promises to public employees. Educators in Washington State get their pay reduced and the state is still $2b in the hole. Few people make $100/hour, most are much closer to $10.

2) Hours spent working. Unemployment is high as is underemployment and economists expect that to remain the case for the foreseeable future. Record numbers of unemployed have quit looking for work and don’t show up in the 9.1%, and for 20-24 year olds, unemployment is 15+%. The double whammy income challenge—how to increase one’s average hourly wage and hour’s spent working in a sputtering economy? Add in the 2007-2008 bursting of the housing bubble and it’s a triple whammy since many people owe tens of thousands more on their homes than they’re now worth.

Which leads to, 3) take your pick—expenses, overhead, or standard of living—the key variable in many, many people falling even further out of economic balance. Workers can’t throw a switch and increase their pay or their opportunities to work additional hours because the changes in the global and national economy are beyond their individual control. Those changes are not temporal either, they’re long-term and systemic. We live in a new economic reality of intensified competition from all over the globe. Don’t listen to politicians who want you to believe we’re special. We’re not.

Often there’s a debilitating time lag between workers’ lower wages, reduced hours, and accustomed standard of living.

Seneca said, “. . . the man who adapts himself to his slender means and makes himself wealthy on a little sum, is the truly rich man.” My 21st Century adaptation, “The person who adapts to making less money and learns to enjoy a less materialistic life, is the truly rich person.” Our expenses are the part of the equation we have the most control over. Worth repeating. Our expenses are the part of the equation we have the most control over. That means we have to do a better job of distinguishing between the few things we need and the neverending number of things we want.

One example. While it’s increasingly vogue to argue otherwise, many contend a college education is a necessity, but attending one that charges $50k+/year is obviously not. Due to a mix of factors—including off-the-charts economic anxiety, age-old social status concerns, and slick higher education marketing campaigns—too many high school seniors enroll in colleges that are more expensive than their families can realistically afford. As a result, many twenty-two year olds, whether they make it to graduation or not, end up deeply in debt. Some authors, comparing them to indentured slaves, are referring to them as “indentured students”.

If a young person’s scholarships, merit aid, personal and family savings, and part-time work can’t cover the cost of their preferred college, they should choose a more affordable path. If you’re a parent being asked to extend yourself beyond what’s possible, it’s okay to say, “Can’t afford it.” The double economic whammy will be challenging enough, why make it a debt-ridden triple one?