I believe in getting massive input before publishing a book. The more people who read the manuscript of Enjoy Your Money!, the more I saw a theme coming in like a mantra: "We've got to get this into the schools! Every young person needs to read this book in order to learn personal finances before they get in a financial mess!"
Thus, as I continued to rewrite, I included discussion questions, assignments, riddles, web-based teacher resources - anything and everything to make it easy on teachers and captivating for students.
If you're looking for a personal financial management text (for public or private schools, home schoolers and service organizations), see the appropriate page on the publisher's site to promote it as a personal finance text.
Showing posts with label finances. Show all posts
Showing posts with label finances. Show all posts
Tuesday, May 26, 2009
Friday, April 24, 2009
Ramsey Reflections, Part 5
Continuing reflections on Dave Ramsey's Town Hall for Hope...
Takeaway #6: Three Things to Do If You're Losing Hope
1 - Get up! Take action! Get moving!
Don't wait for Congress or the President to rescue you. There's a great place for you to go when you're broke: to work! If you don't have a job, talk to everyone. Think creatively, be proactive.
2 - Don't participate in loser talk!
One survey found that your income will likely be within 10% of your closest friends. Some have "The Spirit of Eeyore" upon them, because they sit around moping with their loser friends.
Read "Who Moved My Cheese?" Our cheese has been moved. We've got to start thinking different. Be a reader. Keep learning.
3 - Learn to Give Again
Give extra during difficult times. If you don't have money, give of your time. Serve the homeless, serve soup at the union mission. Visit someone in a nursing home. The more you give hope, the more hope you'll receive.
Thanks, Dave, for an inspirational, fun-filled, hope-filled evening!
This post by J. Steve Miller, author of Enjoy Your Money: How to Make It, Save It, Invest It and Give It.
Monday, March 2, 2009
On Predicting the Economy
To make business plans or retirement plans or even plan for a summer vacation, we'd like to take into account the future of the economy. If things are to get worse, we need to go conservative. If they'll pick up in six months, we'd like to start paddling out into the surf so that we're ready to catch the next wave of growth and prosperity.
Since we're not economic experts, we rely on the opinions of those who spend their days researching the economy, interviewing people on the economy, and helping to set government policy concerning the economy. That's probably why CNBC has record ratings during this economic crisis. We crave expert advice.
Which brings up an important point: can the experts be trusted when they make pronouncements like, "The next six months will be rough, but I see us getting back to steady, albeit slow growth in the last half of the year."?
Unfortunately, I don't believe there's adequate evidence that the experts can predict the future of the economy. Here's why...
1) Governmental figures and most heads of companies have every reason to bias their reports toward the positive. This is shown on a smaller scale by how CEO's of failing companies keep giving hope to their employees and stockholders, even when all the facts in their grasp tell them that the company will fold completely in six months. If they were to admit that the company's failing, stockholders would immediately sell all their shares and employees would bail for other jobs.
Aren't government officials in the same position? If they felt the evidence led them to think we were headed for a depression that history would label "The Greater Depression," they couldn't speak out about it, lest everyone lose confidence in the economy and sell off all their stocks, thus ushering in an even worse recession.
2) Studies show that experts do a poor job of predicting the economy. Professor Philip Tetlock teaches at the University of California-Berkeley. He's an expert on top experts. For about 19 years (culminating in 2003), he studied 300 academics, economists, policymakers and journalists, to find out how they made their economic forecasts and chart how often they were right. According to Tetlock, "we found that our experts' predictions barely beat random guesses - the statistical equivalent of a dart-throwing chimp.... Ironically the more famous the expert, the less accurate his or her predictions tended to be."(1) Thus, odds are, that expert you heard forecasting the economy on the evening news, if you were to chart his past predictions, would probably have been wrong as often as he was right.
My guess as to their inability to conjure up an accurate picture of our economic future is that, in order to predict it, they'd have know many facts that nobody can possibly know. For example:
So what do I do in the present economic climate? Despair?
No, I simply do what everyone should have been doing when most economists were predicting more cheery economic futures - don't believe them. Nobody knows. Realize that at any time, things could turn around and we'd be off to a prosperous decade, so that whoever bought up the cheap stocks would look brilliant in retrospect. Alternately realize that at any time, the economy could go to hell and we'll see a repeat of the Great Depression. Then again, things may continue as they are now for some time, neither getting better nor worse.
As author Kurt Vonnegut observed in his novel, Slapstick, "History is merely a list of surprises. It can only prepare us to be surprised again."
In other words, we don't know the future. Once we accept that, we can go about our plans with that in mind. That's why we major on the basics that work in any economy:
End Note
1) Eric Schurenberg, Why the Experts Missed the Crash, Money Magazine, February 18, 2009, 4:10 PM, ET.
Since we're not economic experts, we rely on the opinions of those who spend their days researching the economy, interviewing people on the economy, and helping to set government policy concerning the economy. That's probably why CNBC has record ratings during this economic crisis. We crave expert advice.
Which brings up an important point: can the experts be trusted when they make pronouncements like, "The next six months will be rough, but I see us getting back to steady, albeit slow growth in the last half of the year."?
Unfortunately, I don't believe there's adequate evidence that the experts can predict the future of the economy. Here's why...
1) Governmental figures and most heads of companies have every reason to bias their reports toward the positive. This is shown on a smaller scale by how CEO's of failing companies keep giving hope to their employees and stockholders, even when all the facts in their grasp tell them that the company will fold completely in six months. If they were to admit that the company's failing, stockholders would immediately sell all their shares and employees would bail for other jobs.
Aren't government officials in the same position? If they felt the evidence led them to think we were headed for a depression that history would label "The Greater Depression," they couldn't speak out about it, lest everyone lose confidence in the economy and sell off all their stocks, thus ushering in an even worse recession.
2) Studies show that experts do a poor job of predicting the economy. Professor Philip Tetlock teaches at the University of California-Berkeley. He's an expert on top experts. For about 19 years (culminating in 2003), he studied 300 academics, economists, policymakers and journalists, to find out how they made their economic forecasts and chart how often they were right. According to Tetlock, "we found that our experts' predictions barely beat random guesses - the statistical equivalent of a dart-throwing chimp.... Ironically the more famous the expert, the less accurate his or her predictions tended to be."(1) Thus, odds are, that expert you heard forecasting the economy on the evening news, if you were to chart his past predictions, would probably have been wrong as often as he was right.
My guess as to their inability to conjure up an accurate picture of our economic future is that, in order to predict it, they'd have know many facts that nobody can possibly know. For example:
- If our economy did better after government intervention following the last depression, how can we know for certain that the government intervention was the cause of the recovery.
- Since no two economies are ever identical (in a sense, a visit to the past is a visit to a foreign country), how can we know that what worked then will work now?
- The world's economies are more entertwined than ever before. How can we know what may happen in another country to either delay or speed our recovery?
So what do I do in the present economic climate? Despair?
No, I simply do what everyone should have been doing when most economists were predicting more cheery economic futures - don't believe them. Nobody knows. Realize that at any time, things could turn around and we'd be off to a prosperous decade, so that whoever bought up the cheap stocks would look brilliant in retrospect. Alternately realize that at any time, the economy could go to hell and we'll see a repeat of the Great Depression. Then again, things may continue as they are now for some time, neither getting better nor worse.
As author Kurt Vonnegut observed in his novel, Slapstick, "History is merely a list of surprises. It can only prepare us to be surprised again."
In other words, we don't know the future. Once we accept that, we can go about our plans with that in mind. That's why we major on the basics that work in any economy:
- work hard. You never know when you might get sick or your services might no longer be required.
- keep sharpening your skills so that you'll be the last one fired in a downturn and the first promoted in good times.
- save all you can.
- keep a large emergency fund on hand in case you lose a job for an extended time.
- don't live beyond your means. Debt is always scary, good times or bad.
- diversify your investments. Since the past isn't prologue, we can't know if the long-term gains of stocks or bonds or CD's or real estate will be the same as the past. Since we can't know which will do better, we diversify.
End Note
1) Eric Schurenberg, Why the Experts Missed the Crash, Money Magazine, February 18, 2009, 4:10 PM, ET.
Sunday, June 15, 2008
Why This New Blog?
Since I'm doing final edits on my latest book - Enjoy Your Money!: How to Make It, Save It, Invest It and Give It - it seemed wise to begin blogging on the topic, especially since my research yields so much more than my book can contain. I plan to deal with a wide range of aspects of personal money management.
I'll post my book summaries and reviews from my reading on money, what's working and not working with finances in my own family, etc.
Thoughtful and practical. Those words will drive this blog. Hope to hear from you!
I'll post my book summaries and reviews from my reading on money, what's working and not working with finances in my own family, etc.
Thoughtful and practical. Those words will drive this blog. Hope to hear from you!
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