Seemingly Useless

Guidance from Giants

noreply@blogger.com (Seemingly Useless) — Fri, 28 Nov 2008 02:39:00 +0000

Here are some quotes that I find to be somewhat appropriate in today's global environment:

Moving too fast?:

"What is the use of running if you're not on the right road" - Anonymous

If only people listened to Ben (and I don't mean Bernanke. Anyways, for more of Poor Richard's pearls of wisdom click here):

"An ounce of prevention is worth a pound of cure" - Benjamin Franklin

Come on now, it isn't all bad:

"We are healed of a suffering only by experiencing it in full" - Marcel Proust (this one is too true)

"Good judgment comes from experience and experience usually comes from bad judgment" - Anonymous (I'm more experienced than I thought.)

Here is a Bonus Quote (On first reading I thought it was pretty useless but after further observations this quote was only seemingly useless):

"There is nothing in which people more betray their character than in what they laugh at" - Johann Wolfgang van Goethe

So, if you really want to get to know someone, take them to a comedy show and see what jokes they laugh at. You will be surprised at how right Johann was.

Stock Market - Just a Pile of Sand?

noreply@blogger.com (Seemingly Useless) — Mon, 01 Sep 2008 20:15:00 +0000

The stock market, with all the recent volatility, reminds me of an imagery described by Per Bak, a Danish theoretical physicist who developed the concept of "self-organized criticality".

Per Bak uses self-organized criticality to describe the actions of a sand pile. When you first sprinkle sand onto a flat surface, the sand behaves predictably and the pile begins to grow. As more sand is added, the sides of the sand hill become steeper and at a certain height and slope, the self-organized critical state is reached where just one more grain of sand will lead to an avalanche. Furthermore, Bak and his researchers observed that it was impossible to pinpoint the exact grain that caused the avalanche and that the magnitude of the avalanche was not proportional to the "absolute impact" of the grain. Other examples of self-organized criticality can be found in earthquake magnitudes (check out Earthquakes - The Cost of Stress Relief) and spreading of forest fires.

The stock market is very much like the Bak's pile of sand. In the financial markets, what is REALLY being traded is NOT a commodity (gold, oil, wheat), a company (Google, General Electric , Disney) or a service (homebuilding, banking, defense) but INFORMATION. Stock prices merely reflect investors' expectations and those with the best (not most) information can more readily recognized and take advantage of opportunities due to the faulty expectations of others. Stock prices are rarely priced to perfection as many proponents of the Efficient Market Hypothesis would have you believe. Rather, most prices are usually overbought or oversold since the "herd effect" have a consistent tendency to overshoot the "correct" price.

Information, the real market price mover, is like the sand in Bak's experiment. During the simple beginnings of the stock market, the only information that moved markets was information concerning the various factors that would affect supply and demand. When information was made public, the magnitude of the price movement would consistently move with the magnitude of the news. As the stock market grew in size and complexity (derivatives, swaps, etc.), the mountain of information grew exponentially. Everything became interconnected and the stock market became a self-organized critical entity. Much like a sand pile avalanche, information that was considered inconsequential began moving markets. This has become evident with the turbulent market movements in all financial stock exchanges. From my personal experience, I have seen the Dow Jones Industrial Average (DJIA) move 400 points (about 3%) on "no apparent news". Just as one grain can cause an avalanche, in a complex system, many grains may have very little effect when added to the pile. In complex systems, the magnitude of the reaction is no longer proportional to the magnitude of the cause.

With the volatile movements of the stock market these days, it feels that there is just no price stability. Just like a person's yelling can cause an avalanche on top of a moutains, small seemingly unrelated news can cause the same avalanche effect in the stock market or any other self-organized critical entity for that matter. Sometimes what is natural may not always seem sensical. One must keep this in mind the next time the stock market leaves one scratching their heads.

Poor Richard's Thirteen Virtues

noreply@blogger.com (Seemingly Useless) — Sat, 19 Jul 2008 04:35:00 +0000

It's all about the Benjamins. I am currently reading The Autobiography of Benjamin Franklin aka Richard Saunders, the author of Poor Richard's Almanack, and came across his list of thirteen virtues (which I have now dubbed "The Benjamins". These virtues, aside from their obvious moral interests, have many other useful (or seemingly useless) benefits especially when it comes to dealing with people and relationships (which one of my friends insightfully suggests is what life is really all about).

Without further delay, here are The Benjamins - Franklin's Thirteen Virtues:

Temperance - Don't eat for the sake of eating or drink until you are drunk.
Silence - If you have nothing nice to say, don't say anything at all.
Order - Organize your work AND play time. Make time for both.
Resolution - "Resolve to perform what you ought. Perform without fail what you resolve."
Frugality - Don't waste. Don't make expenses unless they are beneficial to others or yourself.
Industry - Don't waste time. Always be doing something useful and eliminate all unnecessary actions.
Sincerity - "Use no hurtful deceit. Think innocently and justly;"
Justice - Don't let harm fall on others by your actions or inactions.
Moderation - "Avoid extremes." Also, don't hold grudges.
Cleanliness - "Tolerate no uncleanness in body, clothes and habitation". Have good hygiene.
Tranquility - Don't get aggravated over uncontrollable circumstances and incidents.
Chastity - "Rarely use venery but for health or offspring - never to dulness, weakness, or the injury of your own or another's peace or reputation."
Humility - "Imitate Jesus and Socrates." - If you don't know who they are, wiki them.

There is a reason why Benjamin Franklin was such an accomplished man and I believe that adherence or an attempt to adhere to these 13 virtues played a big role in his achievements. Even though this was written in the 18th century, these qualities are timeless and very applicable for all people regardless of religion, race or age.

Recommended Reading: The Autobiography of Benjamin Franklin by Benjamin Franklin and Poor Richard's Almanack by Richard Saunders aka Benjamin Franklin

Great Firewall of China

noreply@blogger.com (Seemingly Useless) — Mon, 07 Jul 2008 21:11:00 +0000

For those who regularly read my blog, I would like to apologize for not having written any recent articles. I was in China and have just returned to the United States. Censorship is still an issue in China and I have not been making any new posts due to the Great Firewall of China. Although I doubt my material will raise any concerns, I felt it more convenient to leave nothing to chance. I will be returning to China and therefore, future articles will be written intermittently as I hope to slip in articles here or there during my trips outside of China.

Drowning in Information

noreply@blogger.com (Seemingly Useless) — Fri, 13 Jun 2008 04:42:00 +0000

"We are drowning in information, while starving for wisdom"

- from Consilience by Edward O. Wilson

Pareto's Law - 80/20 - Do Less to Achieve More

noreply@blogger.com (Seemingly Useless) — Wed, 28 May 2008 03:57:00 +0000

Recently I stumbled upon an interesting book by Tim Ferris called The Four Hour Workweek. With such an inviting title, how can I resist? In his book, he touches upon Pareto's Law or what is more popularly known as the "80/20 Principle". This principle was founded when Pareto noticed that 80% of a country's wealth was owned by 20% of the population. The interesting and most important aspect of this principle is its widespread presence over a variety of matters such as: 80% of all sales revenues come from 20% of the customers, most people spend 80% of their time with 20% of our friends, 80% of gains in a stock market portfolio comes from 20% of the stocks in that portfolio and etc. To encompass the infinite other examples (I am sure you can think of a many examples of your own), here is a basic definition of Pareto's Law or the 80/20 Rule: "In ANYTHING, a FEW (20 percent) are VITAL and MANY (80 percent) are TRIVIAL".

Here is a graphical representation of the Pareto Effect:
This Pareto Principle has been used heavily and effectively in business management (online resource based on Richard Koch's The 80/20 Principle) and quality control (Six Sigma) but many people rarely apply this rule to their own personal lives. In the work place, one can use Pareto's Principle to work "smarter" and more effective by focusing on the 20% of the work that is truly important. Another way to use this rule is to use it like Ferris did in his book by evaluating your life. He did so by asking two Pareto questions:

Which 20% of sources are causing 80% of my problems and unhappiness?
Which 20% of sources are resulting in 80% of my desired outcomes and happiness?

Take some time to answer these questions on your own, you might just surprise yourself and find out that you're a living example of the Pareto effect. Many people tend to associate being "busy" or doing more as being productive, but if many of things (80% to be specific) that you do are trivial, how productive are you? It is important that you BE SELECTIVE with your time and efforts. Find out what things in your life pull the most weight and focus on those things while deemphasizing things that do not have much effect in your life. If you can't differentiate between what is vital and what is trivial, start by making a list of your day to day activities and evaluate each activity and its "real" importance. The hardest part about this is being honest with yourself because contrary to your own belief, you will probably find that you do spend most of your time doing ineffective things. When I mean ineffective, I am not referring to hanging out with friends or doing things you enjoy but rather activities such as checking email every 15 minutes or spending 5 hours preparing for a minor meeting.

Here are some quotes that might inspire you to perform a self-Pareto evaluation:

"There is never enough time to do everything, but there is always enough time to do the most important thing" - Brian Tracy, Self-Help Author

"Short as life is, we make it still shorter by the careless waste of time" - Victor Hugo, Author of Les Miserables

Lastly, the 80/20 Rule is a great way to get rid of the clutter, not only mentally but physically, in your life. Most of us wear 20% of our wardrobe 80% of the time, so why not clear up some closet space by donating your unused clothes to the local church or Salvation Army. Your trivial clothes can become part of someone's vital wardrobe. Cleaning up the clutter in your life will definitely reduce stress in your life and invite clarity into your thoughts. Give it a try! (Check out CutterClarity's 21 tips to removing clutter)

Feel free to leave personal experiences and ideas on the Pareto Principle in the comments section below. Achieve more now by doing less today!

Recommended Reading: The 4-Hour Workweek : Escape 9-5, Live Anywhere, and Join the New Rich by Timothy Ferris and The 80/20 Principle: The Secret to Success by Achieving More with Less by Richard Koch

Monkey See Monkey Do - Tulipomania!

noreply@blogger.com (Seemingly Useless) — Mon, 19 May 2008 21:56:00 +0000

I'm not a proponent of evolution but maybe we have more in common with monkeys than we would care to admit. When imitation occurs as a result of conscious thought it can represent the sincerest form of flattery but more often than not people are actually "victims" of unconscious imitation.

Innately, humans have a strong tendency towards imitation. Just look at children - they were never told to imitate but they just do - it is the way they learn and it's natural. As we progress in brain development and age, we have had enough experiences to generate "unique" behaviors and outwardly cast off "child-like" imitation behaviors (this is especially prevalent in the Western hemisphere where individuality reigns supreme).

Like all natural urges, what may be suppressed in the conscious mind (ego) may not necessarily be restrained in the unconscious mind (id). This is the reason why we have so many fads, fashion and partners that are beyond the comprehension of reasonable thinking. One example of imitation gone wild is the popularity of faded designer jeans. These days, jeans that look like they would have normally been thrown out due to extensive wear (stained and faded with holes) are being sold as new and bought at ridiculous prices. Despite our common sense (jeans do not cost over $100 to make), we can not help but to imitate everyone else and buy these jeans or at least have the desire to buy them.

Another interesting example of unconscious imitation is the "groupie effect" (For more on human attraction, check out Like Dissolves Like). The basic premise for this effect is that men/women are attracted to women/men that other men/women find attractive. This is why musicians and celebrities "seem" attractive and have groupies despite their actual physical appearance. So for anyone that is single, a good way to increase your chances of success in meeting someone is to have an "opposite-sex" wing person. This effect can be explained by what scientists call "mate choice copying". Finding a suitable partner is time consuming so taking cues from other is an effective mating shortcut. This also explains why women view men who are married or have a girlfriend more attractive than men who are single.

The last example that exemplifies unconscious imitation, desiring what others consider desirable, can be found in free capital markets. In the year 1634 in Holland, the price of tulips (yes, the flower) traded higher than the price of gold. This occurred because people wanted tulips for the sole reason that everyone else wanted tulips. They disregarded their common sense, much like we do with "holey" jeans, and prices for tulips sky rocketed. As with all fads, the demand for tulips faded and a panic ensued causing the price to plummet and financial ruin for many. Now tulip mania or tulipomania is used to refer to any large economic bubble. In hindsight, one can almost laugh at the absurdness of the Dutch, but with many brought to financial ruin when the tech bubble burst and many suffering through the bursting of the current housing bubble, are we that much different?

Unconscious imitation can certainly be dangerous but it can also be helpful. One way to take advantage of your natural desire to imitate is to surround yourself with people you want to be like. If you want be a better basketball player, play with people better than you. If you want be more religious, surround yourself with religious people by consistently attending religious services and events. Unconscious imitation requires no "work" on your part but this can be a double edged sword. Since you can't help but be affected by those around you, it is important to evaluate the people and media (visual- television, audio- radio/mp3 and print- books) that you surround yourself with.

"When the character of a man is not clear to you, look at his friends." - Japanese Proverb

Recommended Readings: Extraordinary Popular Delusions and the Madness of Crowds by Charles Mackay

NYC Water Board Approves Major Rate Hike in WATER

noreply@blogger.com (Seemingly Useless) — Fri, 16 May 2008 21:08:00 +0000

The New York City water board just approved a 14.5% rate hike, the second double digit increase in the last year, in WATER.

It has already begun...the Impending Water Crisis

Earthquakes - The Cost of Stress Relief

noreply@blogger.com (Seemingly Useless) — Wed, 14 May 2008 03:20:00 +0000

The recent unfortunate disaster in China's Sichuan Province awakens us to the power of Mother Nature. Most living things, especially humans, are "Earth's surface-centered". There is usually a disregard to happenings beneath the Earth's surface and a general disinterest (when was the last time you heard from NASA) in occurrences outside of the Earth's surface (outerspace). That is until something, such as yesterday's destructive earthquake or the impressive 1833 Leonids meteor shower, reminds us that there is more to the Universe than the surface of the Earth.

Earthquakes are characterized by tremors in the Earth's crust. Seismology, the study of earthquakes, attributes naturally occurring earthquakes to movements of tectonic plates, located in the lithosphere, that "float" on the athenosphere (thick liquid layer above the upper mantle). The boundary where these plates meet are called faults which are categorized into three categories based on "sense of slip": normal faults, thrust faults and strike slip faults (see picture to the right courtesy of USGS). The plates creating these faults are pushed together very tightly which causes them to lock due to friction. As pressure mounts, the force of the friction is surmounted causing fast and abrupt slippage between the plates. This quick displacement of the Earth's crust releases energy in the form of seismic waves that are responsible for the physical manifestation (vibrations) of earthquakes. Basically, earthquakes are the Earth's way of venting and releasing pent up stress. Despite greater understanding about earthquakes, they are still unpredictable. Although some areas (major fault lines such as the San Andreas Fault, New Madrid Fault or Great Sumatran Fault) are more susceptible to earthquakes than others, the exact timing of when an earthquake will occur still remains a mystery.

Thomas Homer-Dixon, in The Upside of Down, makes a very interesting analogy between earthquakes and social breakdown. He insightfully states that "population, energy, environmental, climate, and economic stresses affecting our world are just like tectonic stresses: deep, invisible, yet immensely powerful; they're building slowly; and they can release their force suddenly without warning." Much like earthquakes, social stresses can be released quietly or catastrophically. When societies' institutions and systems (political/economic) become "rigid" and "lock up" (read articles concerning Complexity), pressure escalates until something finally gives (example: the 1989 revolutions in Eastern Europe). Social breakdown is also similar to earthquakes in that "stress triggering": stress release in one area can "dramatically" and "often unexpectedly" increase stress in other areas leading to a devastating domino effect (example: the 1997 East Asia financial crisis that was triggered by Thailand's currency devaluation which culminated in a default of Russian sovereign debt which led to the collapse of Long-Term Capital Management). The characteristic that makes both earthquakes and social collapses dangerous is the unpredictability. Although "foreshocks", minor tremors that precede an earthquake, do sometimes occur, they do not happen consistently enough to predict quakes. Earthquakes, geological and social, can change our lives and our way of thinking because it shatters the very foundation we build our homes and lives upon, respectively. Terra firma and one's society are both suppose to be stable entities, so when its strength fails, one can not help but be terrified.

Here are some notable facts about earthquakes (full list can be found at USGS):

The hypocenter of an earthquake is the location beneath the earth's surface where the rupture of the fault begins. The epicenter of an earthquake is the location directly above the hypocenter on the surface of the earth.
Mountains and Volcanoes are created by tectonic plate movements.
Each year there are 500,000 detectable earthquakes in the world.
The world's deadliest recorded earthquake occurred in 1556 in central China. It struck a region where most people lived in caves carved from soft rock. These dwellings collapsed during the earthquake, killing an estimated 830,000 people. In 1976 another deadly earthquake struck in Tangshan, China, where more than 250,000 people were killed.
You can track the latest Earthquakes with a 5.0+ magnitude here.
According to the American Red Cross, the best thing to do during an earthquake is: Drop, cover and hold under a sturdy piece of furniture (table or desk).

Seemingly Useless Commentary:

So what are the major "faults" (some pun intended) of our society today? The energy crisis and the scarcity of natural resources (oil and precious metals) are definitely one of the major faults where pressure is building (price of crude oil hit $127 today). The battle between capitalism and the environment is definitely another major fault. Heavy industries are causing irreparable damages to the world's water (water crisis article), forests, air and land. Changes in the global ecosystem will increase the rate of species extinction and these shifts in the environment will cause climate to change dramatically. Economic faults such as the widening wealth gap and the subprime mortgage debacle are also creating pockets of dense pressure. Much like Monday's earthquake in China, the mounting pressure of any one of these faults may be released at any moment and unfortunately it is almost a certainty that there will be casualties.

As always, feel free to comment with your own ideas and opinions concerning earthquakes and/or social breakdowns. With all these pressure points, is a collapse inevitable?

Recommended Readings: The Upside of Down: Catastrophe, Creativity, and the Renewal of Civilization by Thomas Homer-Dixon

Useful Websites:
USGS Earthquake Website

Reading IS Fundamental - Creating Success

noreply@blogger.com (Seemingly Useless) — Fri, 09 May 2008 18:14:00 +0000

The more that you read,
the more things you will know.
The more that you learn,
the more places you'll go.

(by Dr. Seuss from I Can Read with My Eyes Shut!)

Living in the era of the Internet, it seems that reading has become somewhat obsolete and drab. There seem to be less and less people picking up a book to read and compare to the glitz of television and countless online media, a regular book seems to go the way of vinyl records and Commodore 64s. Although it would be hard to argue against this popular technologically driven trend, I would still like to propose reasons for the usefulness of reading for this current generation and for many generations to come.

Why We Should Continue to Read

1) Reading Uses the Brain - Our brain and its network of neural processors are still far above and beyond the best supercomputers out there (Computer vs. Brain article). Like most parts of our body, the brain strengthens with continual use and exercise. When you read, the brain will automatically access your imagination and conjure up images to the words you are reading. When you watch videos or other visually intense media, the brain is actually becoming less active because it no longer has to create images but rather just passively observe them. The more dependent one becomes on visual images as opposed to those the brain creates, the weaker the brain's imagination becomes. It is similar to someone attempting to gain driving experience just by sitting in the passenger seat of the car. For those who watch movies of popular books (Lord of the Rings Trilogy, The DaVinci Code, Chronicles of Narnia, 21, Jurassic Park or Harry Potter) instead of reading the actual books, you don't know what you are missing. I have personally never watched a movie that was better than the book.

2) Stand on the Shoulders of Giants - Most material from the great people of history are chronicled in books. Reading their stories will not only advise you on what to do but also on what not to do. Many pitfalls common to the human race have been written about countless times and those who have read such stories are able to avoid the "hard way" of learning life's lessons. Secondly, there are books about every subject out there. If you want to learn more, reading is a must. "Don't follow your mentors, follow your mentors' mentors" (David Leach)

3) Successful People are Avid Readers - On almost every list describing successful people, reading seems to be a prerequisite to success. "Leaders are Readers" is a popular slogan amongst motivational speakers and it is not hard to see why. Reading is perhaps one of the best (simple, effective and cheap) ways to broaden our horizons and to expose ourselves to new thought patterns. These new thought patterns are then fused with our current patterns thus expanding the capabilities of our mind. It is no coincidence that noteworthy CEOs (Steve Jobs - Apple, Phil Knight - Nike and Dee Hock - Founder of VISA) have libraries proportionate to their success.

If you want to make a positive change in your life and break out of your current state of affairs, I recommend picking up a book to read to stir up your thinking. Most people that want to change their lives usually pick up "self-help" books but again you fall into the trap of becoming passive and simply following instructions. Read books of all genres and pick something you enjoy. Sometimes if you want to change your circumstances, you don't need a change of environment but rather a change of thought. Although you can certainly find things to read on the Internet, books, especially time tested classics, are held to a high standard as oppose to some information on the Internet, which is largely unregulated. Don't get me wrong, the Internet has made access to quality information a lot easier than before but the "uploaders" of content are not screened and misinformation is easily guised as expert commentary.

Perhaps my elementary school librarian was right all along: Reading IS Fundamental (RIF)

To make things easier, most libraries have upgraded to systems where books can be requested online to be sent to a library location convenient for the patron. If you are not sure what to read, check out the Seemingly Useless Recommended Readings or the NY Times Bestsellers.

Recommended Readings: Seven Pillars of Wisdom by T.E. Lawrence and Rubáiyát by Omar Khayyam

Complexity - A Necessary Evil

noreply@blogger.com (Seemingly Useless) — Tue, 06 May 2008 04:24:00 +0000

In my previous article (The Fall of Rise and Fall), I cited complexity as a main reason for the Fall of the Roman Empire. It seems that any growing society is eventually going to become complex. According to Joseph Tainter (author of The Collapse of Complex Societies and Complexity, Problem Solving and Sustainable Societies), there are four basic premises needed to understand the reasons complex societies arise and why they collapse:

Human Societies are problem-solving organizations.
Sociopolitical systems require energy for their maintenance.
Increased complexity carries with it increased costs per capita.
Investment in complexity as a problem-solving response often reaches a point of declining marginal returns.

So based on these concepts, Tainter suggests that societies become increasingly complex as a solution to unmet challenges and problems. When all the simple and most effective answers are exhausted, complex and less effective answers are used. The issue with complex answers is that cost is directly proportional to complexity but the effectiveness of complex solutions declines with increasing complexity. Initially, small investments in complexity produce great benefits but due to diminishing returns, larger and larger investments yield less and less benefit. Eventually, costs and complexity rises without any increase benefit and more energy is required to merely sustain the status quo. It is at this point that a collapse becomes likely because any crisis can be the proverbial "straw that breaks the camel's back" due to the decline in the society's resilience.

When complex solutions are first applied it is believed they will only be for the short term but inevitably they perpetuate and the long term costs compound. A great example is the current energy crisis. With crude oil prices at all time highs, more complex but less effective alternatives (ethanol, solar, wind, geothermal and nuclear power) are gaining momentum. In addition to alternatives, more complicated and expensive methods for oil extraction (oil sands extraction, deep sea drilling and Fischer-Tropsch process) are also being used.

So are we all doomed at the hand of complexity? ... maybe

Society can avoid collapse by getting control of a new source of energy, either by technical innovation or by conquest. Eventually, however, it becomes impossible to maintain this because of diminishing marginal returns on any strategy that is pursued. The good news is collapse of complex societies does not always equal Armageddon. It usually results in a return to simpler times and a lower level of complexity.

It seems that increasing complexity is a necessary evil for societies dealing with unsolved problems. This complexity increase will eventually crescendo and fade back to a simpler time. The problem is a return to simplicity from complexity is usually preceded by a collapse which affects all parties negatively. The perpetual cycle of societies going from complex to simple is reminiscent of the Yin Yang balance (read Yin Yang Markets) found in Chinese philosophy. Just as night is darkest before dawn, so a society is most complex right before reverting back to simplicity.

It is important to understand that complex solutions are unavoidable in an energy scarce society but individuals need to prepare themselves and increase their own resiliency as complexity increases and society as a whole becomes less resilient.

Recommended Reading: The Collapse of Complex Societies by Joseph Tainter

Widening Wealth Gap via Disproportionate Population Growth

noreply@blogger.com (Seemingly Useless) — Fri, 02 May 2008 04:32:00 +0000

"The rich is getting richer and the poor is getting poorer". This statement accurately describes the economic situation for every country in the world. In 2005, the top 1% of Americans accounted for 21.8% of the total reported income for that year with the top 10% collecting about 48.5% of total reported income. Some say this disparity in wealth is due to technological advances that reward the untaught skill of a select few (Bill Gates and Steve Jobs) and others attribute this to the fact that personal finance and money investment is not a strong suit for most Americans. Although both of these are great reasons, I would like to explain the widening wealth gap as a function of disproportionate population growth.

The wealth gap widens when wealth is concentrated with a small group versus the masses. This widening is occurring not only because the "rich is getting richer" but rather because the "poor is getting bigger". Statistically, the population growth rate of the poor is far outpacing that of the rich. According to Keyfritz (1989), the ratio of poor people to rich people has more than doubled since 1950 with an extra 50% increase in this ratio by 2025. This rapid increase in the poor population will make wealth seem even more concentrated in the hands of the rich thus widening the wealth gap without the rich making more money.

So why the dearth in population growth for the rich? Population growth is determined by birth rates, death rates and demographic momentum. Here are some speculations for the disparity in population growth rates between the rich and the poor:

Those who have high incomes generally have higher education and advanced degrees (doctors, lawyers, pharmacists) so many of them start their families much later than their lower education counterparts. As age increases (especially for women), it becomes more difficult to have children.

Wealthy people are generally busy people who are constantly working so they have no time to have families and those who do have families usually hold off on having kids. They usually place their careers as one of their top priorities.

With the proliferation of better health care and medicines to the poor, the population of the poor is living to an older age and there is a decrease in death rates.

Lack of sex education and ignorance to teen pregnancy amongst the low income population results in a much younger "fertile" population. Similar to the baby boomer effect, this will lead to a drastic increase in population growth.

I hope this article was able to show that the wealth gap between the rich and the poor is not all about money. The greater the population of poor people the wider the gap is going to seem if all else stays constant. So for those who wish to narrow this disparity of incomes, it is not only necessary to talk about money but also about population control. This gives new meaning to "Blessed are the meek: for they shall inherit the Earth" (Matthew 5:5, The Bible).

Recommended Reading: Rich Dad Poor Dad by Robert T. Kiyosaki and Sharon L. Lechter

Bibliography

Keyfitz, Nathan, (1989). Population and Development Review 15, No. 2, 359-362.
Demeny, Paul (2003). Population Policy Dilemmas in Europe at the Dawn of the Twenty-First Century. Population and Development Review 29, No. 1, 4

"Like Dissolves Like" - An Insight into Attraction

noreply@blogger.com (Seemingly Useless) — Sun, 27 Apr 2008 22:18:00 +0000

The golden rule of solutions chemistry is "like dissolves like". These three words provide the guide for predicting solubility when dealing with "polar" and "non-polar" solvents (substances capable of dissolving other substances) and solutes (substances that are dissolved by solvents). One common example of this rule can be seen when trying to mix oil (non-polar) and water (polar). No matter how hard you try, water simply will not dissolve oil but if you put table salt (polar) in water, it dissolves very easily. This phenomenon is not only useful in predicting the solubility of solvents and solutes but also provide insight into human attraction.

Attraction, many may argue, is a function of our experiences and social definitions but Dion (1973) found that children as young as three years old exhibit the ability to perceive attractiveness. Across cultures, there are strong "universal correlates of beauty" (Wikipedia - physical attractiveness):

Physically Attractive Males have:

Slim waists and broad shoulders (V shaped torso)
Strong brow, high forehead and broad jaw (masculine features)
Heights taller than their mates (1.1 times their height is preferred) and erect posture

Physically Attractive Females have:

Youthful appearances - full lips, clear, smooth skin, clear eyes, lustrous hair and good muscle tone
Hour-glass figure - a waist circumference 70% of the hip circumference
Heights shorter than their mates
Symmetrical faces and high cheek bones, big eyes and a thin jaw

Most of these universal traits of attraction have underlying procreational explanations. The hour-glass figure symbolizes female fertility and a symmetrical face is a sign of good genes that are free from disease. Taller heights and masculine features in men are a symbol of strength and protection for the family.

In psychology, there have been many experiments dealing with human attraction. One prevailing conclusion that resonates with the "like dissolves like" theme is that individuals find those who are genetically unrelated but have similar facial features more attractive than those with dissimilar facial features. According to Sappenfield and Balogh (1970), perceived attractiveness towards another person was highly correlated to the perceived similarity to oneself. Murstein (1972) conducted several studies showing that people find others in their same "level" of attractiveness attractive. These conclusions were supported by other studies conducted by Cavior and Boblett (1972), Curran and Lippold (1975) and Chambers et al. (1983). Hinsz (1989) found that people tend to marry people who look like themselves.

These findings should not come as a surprise since it is very reasonable that people are attracted to those who are similar to them. Aside from physical appearances, Byrne et al (1986) suggests that people are attracted to homogamous characteristics such as age, race, education, beliefs and values and this in turn will enhance attraction. Knox (1997) came to a similar conclusion that people prefer homogamous traits when dating and considering a spouse. Parents want their children to reflect their values and religious beliefs but if the parents have different value systems, it can become very confusing for children who usually emulate their parents' beliefs.

Many people including Paula Abdul believe that "opposites attract". Experimental research (check bibliography below) has shown that this catch phrase is best saved to describe magnets. Most people who use the phrase "opposites attract" to describe their relationship, don't realize that they probably have more things in common than they thought. Most of the time, couples may be superficially opposites (different hobbies and interests) but have very similar personalities and values. "Opposites attract" may apply to infatuations and relationships spawned from rebellion but as one matures and seek meaningful relationships, similarities dominate as "like dissolves like". As with all situations, it is possible to have a long term relationship with someone who is truly your opposite but it is probably ill-advised since it's almost always an invitation for trouble. Long term relationships are hard as it is, why make it even more difficult.

Another reason why "likes" attract is that they are familiar and thus more memorable. Psychologist David Perrett (2002) found that young men and women were attracted to faces of those most resembling their mothers and fathers, respectively. This basically means that a sense of familiarity is enough to cause attraction. This is further supported by anatomical research on the fusiform, special part of the human brain needed to recognize faces of family, friends and people we are familiar with. Those with a damaged fusiform cannot recognize anyone and in experiments, they are unable to discriminate between photographs of plain and beautiful faces! This attraction for the familiar goes to explain why most couples tend to favor their own ethnicities.

Just like non-polar solvents can undergo chemical substitutions/transformations to become miscible with polar solvents. People can and normally do change (article on Change) to become more similar to their significant others. Couples that have been together for a good amount of time will usually begin to adopt each other's mannerisms and demeanor causing them both to become more akin. It is almost as if they "dissolve" into each other with both having properties of the other person.

This "like dissolves like" attraction phenomenon is a good reason for the success of online dating websites who require its members to complete detailed personality profiles that is used for finding a "suitable" match. There are still many other layers, such as the "groupie effect" and the "sexy son hypothesis", to human bonding and attraction. Look forward to future articles dealing with these topics. In the interim, feel free to give your own insights into attraction and whether you think "opposites attract" or "birds of a feather flock together" in the comments section.

Recommended Readings: Looks: Why They Matter More Than You Ever Imagined by Gordon Patzer and Survival of the Prettiest by Nancy Etcoff

Bibliography

Dion, K.K., (1973). Young children's stereotyping of facial attractiveness. Developmental Psychology, 9, 183-188.
Knox, D., M. E. Zusman, and W. Nieves. (1997) College students' homogamous preferences for a date and a mate. College Student Journal, 31, 445-448
Sappenfield, B. R. & Balogh B. (1970). Perceived attractiveness of social stimuli as related to their perceived similarity to self. The Journal of Psychology, 74, 105-111.
Byrne, D., Clore, G., & Smeaton, G. (1986). The Attraction Hypothesis: Do Similar Attitudes Affect Anything? Journal of Personality and Social Psychology. 51, 1167-1170.
Cavior, N. & Boblett, P. J. (1972). Physical attractiveness of dating versus married couples. Proceedings of the Annual Convention of American Psychological Association, 7, 201-202.
Chambers, V. J., Christiansen, J. R., & Kunz, P. R. (1983). Physiognomic homogamy: a test of physical similarity as a factor in mate selection process. Social Biology, 30, 151-157.
Curran, J. P., & Lippold, S. (1975). The effects of physical attraction and attitude similarity on attraction in dating dyads. Journal of Personality, 43, 528-539.
Hinsz, V. B. (1989). Facial resemblance in engaged and married couples. Journal of Social and Personal Relationships, 6, 223-229.
Murstein, B. I. (1972). Physical attractiveness and marital choice. Journal of Personality and Social Psychology, 22, 8-12.
Perrett, D. I., Penton-Voak, I. S., Little, A. C., Tiddeman, B. P, Burt, D. M., Schmidt N., Oxley, R., & Barrett, L. (2002). Facial attractiveness judgments reflect learning of parental age characteristics. Proceedings of the Royal Society of London B, 269, 873-880.

Water? No More?! - The Scarcity of Life's Essence

noreply@blogger.com (Seemingly Useless) — Wed, 23 Apr 2008 15:17:00 +0000

"Water, water, every where,
And all the boards did shrink;
Water, water, every where,
Nor any drop to drink."

(taken from The Rime of the Ancient Mariner by Samuel Taylor Coleridge, 1817 Edition)

The mariner and his crew from Samuel Taylor Coleridge's famous poem understood the pain of water scarcity despite its apparent abundance. Their predicament is not much different from the predicament many people are currently facing. Although water covers 71% of the Earth's surface, less than 1% of the world's fresh water (or about 0.007% of all the water on earth) is readily accessible for direct human use (World Health Organization Fact Sheet, also see picture to the right). About one sixth of the world's population (1.1 billion people) TODAY has inadequate access to safe drinking water and it is estimated that by 2050, two-thirds of the world's population could be living in areas with chronic, widespread water shortages.

In the United States, we take water for granted. Everyone has access to affordable drinking water. Water is naturally recycled through evaporation and precipitation (hydrological cycle) and thus thought to be a renewable resource but with pollution and other factors, the recycling process is not fully efficient. Since the total supply of the Earth's freshwater is unchanged, this inefficiency will eventually lead to less potable water supplies.

In addition to drinking, there are many other human uses for water (Wikipedia):

Agriculture - Irrigation for farmlands
Hygiene and Sanitation/Sewage Treatment - Water facilitates chemical processing of wastewater
Dissolving Agent - Used for washing almost everything.
Extinguishing Fires - Most fires are extinguished using water
Chemical Uses - Water is used for many chemical processes
Recreation and Sports - Swimming, water skiing, ice hockey, snowboarding, etc
Food Processing - Water is used to prepare many foods (boiling, steaming, simmering)
Power Generation - Hydroelectric power. Water is also used as the coolant for both electric generators and nuclear power plants

As I write this article, crude oil is at all time highs ($118/barrel as of 04/23/2008) and food prices all over the world are rising (Corn Oil for the 21st Century). As the price of food rises, increased farmland and irrigation will cause further stresses on the world's freshwater supply. Many rivers (Colorado River in the US, Amu Darya River in Central Asia and the Yellow River in China) are already running dry causing villagers dependent on their waters to leave their villages and become "water refugees". Population growth across the world will also increase the need for drinking water and water needed for all the aforementioned human uses. In addition to population growth, the increasing affluence of the middle class in Asia (India, Southeast Asia and China) will lead to increase consumption of water due to a shift in diet from grain to meat (It takes one thousand times more water to raise a cow than to raise its equivalent in grain) and the movement towards better hygiene will result in more toilet flushes and other water consuming sanitation methods. Another big factor that may lead to an impending water crisis is the antiquated water infrastructure around the world. Deteriorating pipes and water treatment facilities lead to water wasting which will decrease the already scant supply of freshwater.

If we don't start conserving and searching for alternate ways to recycle our water supply, the price of water will go down the road of other limited natural resources such as oil and natural metals and we may soon be lamenting (in the prose of Coleridge):

Water, water, every where,
None for use, the price too high;
Water, water, really no where,
Did I cause this just standing by?

The rising costs for water are fairly apparent. Monetarily, it is obvious as prices on water bills continually rise but not so obvious is the damage being done to biodiversity. Since there is a limited amount of fresh water, as humans increase their use there is a natural depletion of water availability for vegetation and wildlife dependent on freshwater. Wetlands (bogs and marshes such as the Florida Everglades) and their resident lifeforms are already suffering from fresh water depletion and many water dependent species are joining the ever growing endangered species list - International Union for Conservation of Nature (IUCN) Red List of Threatened Species. This loss of biodiversity hurts the discovery of future medicines and foods. When interdependent ecosystems become disturbed, bad things happen.

Another expense of water scarcity is WAR. We have already seen it with oil and if nothing changes, we will definitely see it over water. Rivers and other bodies of freshwater supplies do not follow national borders and one country's use of its water directly impacts the supply to other countries using the same freshwater source. As a matter of fact, there have already been several conflicts over water (Egypt vs. Ethiopia, India vs. Pakistan, Turkey vs. Syria vs. Iraq and Israel vs. Jordan). When it comes down to securing and/or protecting water resources for its citizens, the most peaceful country is more than willing to go to war. Even if conventional war is not waged, water shortages will lead to mass migrations, rampant disease propagation and food shortages.

Unlike scarcity of other natural resources, scarcity of water is a matter of life and death. A person can live weeks without food but only days without water (How Long Can You Survive Without Water?). So whether you care about the environment and its species, world peace, the money in your wallet or your own survival, it is necessary to conserve water and to be proactive in protecting our freshwater supply.

Here are some ways to prevent the looming water disaster:

1) Get Educated - There are numerous free resources, such as Water Partners International, concerning water conservation and the water crisis all over the internet. In order to live a water conserving lifestyle, one has to learn how and why it is necessary to save water.

2) Use Less Water - According to the Sphere Project Handbook "Humanitarian Charter and Minimum Standards in Disaster Response.", the average person needs 4 to 5 gallons of water per day to survive. The average American uses about 150 gallons of water at home each day. There is definitely room to cut back. Click here for some water saving tips.

3) Spread the Word - Tell EVERYONE that you know about the water crisis and ways to conserve. Standing idly by as others remain ignorant about the water problem is as bad as wasting water yourself.

4) Voting - Vote for political candidates who are sensitive to and understand the water issue. This will help lead to legislation for water conservation and economic incentives for water technology.

Every little thing helps. Many people doing little things will eventually have a huge impact. That is why it is important to get educated, use less water and spread the word about the water crisis.

The current situation in natural resources is described perfectly by Mahatma Ghandi:
"The earth provides enough to satisfy every man's needs, but not every man's greed."

Additional Seemingly Useless Commentary:

Gulf states such as Saudi Arabia, United Arab Emirates and Kuwait are experiencing economic boons because of record high oil prices. Interestingly, the gulf states are also located in one of the most freshwater deficient areas in the world where they have to resort to desalination, the expensive conversion of sea water to freshwater. In the future, if water prices begin to rise, demand for other not-as-essential goods such as oil will decrease. This may lead to a reversal of fortunes for these Middle Eastern states as their incomes begin to decrease but their cost of surviving begin to increase. If nothing changes, it is possible that the Middle East will become uninhabitable. On the flip side of the coin, if the gulf states invest their "oil money" for water research and infrastructure, perhaps we will see a "Blue Revolution" on par with the 20th century agricultural Green Revolution.

For investors and traders, it is perhaps possible to hedge this impending water crisis by investing in companies related to water. Whether it is water utilities (NYSE: WTR - Aqua America Inc.), water desalination (NASDAQ: CWCO - Consolidated Water Co.), water equipment for treatment and storage (NYSE: PNR - Pentair), water infrastructure (NYSE: AMN - Ameron International Corporation, water purification (NYSE: CCC - Calgon Carbon Corp), water irrigation (NYSE: LNN - Lindsay Corporation) or simply the water exchange traded fund (NYSE: PHO - Water ETF), in a situation when water becomes scarce, these companies will stand to benefit (Just look at the oil services sector in the past few years (NYSE: OIH).

Disclaimer: I don't currently own any of these stocks but I am looking to invest in water for the future. As with any stock recommendations, there is no guarantee of success and it is possible that you can lose all your money.

This may perhaps be the most important issue for the 21st Century and should not be taken lightly. I will try to touch upon water-related disease and health issues in a future article. Please feel free to leave comments especially those relating to water and practical ways for conserving water. If you want to send anyone this specific article, copy and paste this link to do so: http://seeminglyuseless.blogspot.com/search/label/Water%20Crisis

Recommended Readings: Blue Covenant: The Global Water Crisis and the Coming Battle for the Right to Water by Maude Barlow, The Rime of the Ancient Mariner by Samuel Taylor Coleridge and When the Rivers Run Dry: Water - The Defining Crisis of the Twenty-first Century by Fred Pearce

Four Stages of Learning - Just Do It!

noreply@blogger.com (Seemingly Useless) — Sat, 19 Apr 2008 04:05:00 +0000

I was recently watching a video by Dr. John Berardi on nutrition and he talks about the four stages of learning. Although his discussion was focused on nutrition, the four learning stages mentioned transcend all subjects and can be applied to learn any skill. Most people find it difficult to learn because of the natural negative feedback one receives from "not doing it right" or "never being able to get this". Interestingly, these feelings of incompetency and frustration are part of the four steps of learning. Knowing these four steps will help you persevere and succeed in learning your desired skill. So without further ado:

The Four Stages of Learning

Not Knowing and Unaware - Blissful ignorance before learning begins. "The individual neither understands or knows how to do something, nor recognizes the deficit or has a desire to address it." (Wikipedia) Ex: A person is unaware that they are holding and using chopsticks the wrong way.
Not Knowing and Aware - "Though the individual does not understand or know how to do something, he or she does recognize the deficit, without yet addressing it."(Wikipedia). This is where most of the aforementioned frustration over being incompetent occurs. This is probably the most difficult step for most to overcome. Ex: The person has observed others holding chopsticks or came across some chopstick directions (common on the back of chopstick wrappers at Chinese restaurants) and realizes that his/her way of holding chopsticks is wrong.
Knowing and Aware - "The individual understands or knows how to do something. However, demonstrating the skill or knowledge requires a great deal of consciousness or concentration." (Wikipedia). Ex: The person learns the correct way to hold the chopstick but he/she will not hold it the right way unless he is consciously trying to hold it correctly.
Knowing and Unaware - Something is truly learned once it becomes natural to us. "The individual has had so much practice with a skill that it becomes 'second nature' and can be performed easily (often without concentrating too deeply). He or she can also teach it to others." (Wikipedia). There is full internalization of the skill but the exact moment of achieving this step is hard to pinpoint. Competency occurs but we don't know how it occurs. Ex: After much practice, the person now naturally holds and uses chopsticks the correct way every time he/she picks up a pair of chopsticks. That person doesn't think about holding the chopsticks the right way and just does it. When others comment about his/her skill, he/she doesn't even realize that he/she is holding it correctly or incorrectly. When observing others, he/she can usually point out if others are holding their chopsticks correctly and teach them if they are not.

Above is a diagram from Luc Galoppin's management consulting blog. It sums up the four steps to progress from being incompetent to being competent in a nice visual manner. One is not really competent until they reach the fourth and final stage. Usually the final stage occurs unexpectedly. One day things will "just click" and make sense and it is difficult to attribute it to any defining moment. Many people get stuck in stage 2 or stage 3 because these stages cause the most resistance thus requiring the most amount of work. During these stages, it is easy for people to get bogged down in collecting the right information and knowledge and forgetting to actually practice the skill they are trying to learn. Achieving competency is a journey that does have an end. The most important thing is to start walking. Like Nike's famous slogan "Just Do It" - Don't just think about being competent in something, go out and do it. If you want to jump higher, don't just read books about jumping higher, go out and practice jumping. If you want to learn how to speak Russian, sign up for a Russian language class. Be proactive about being competent, no one else is going to make you more competent but yourself.

Personal Finance Tip #4 - Mutual Fund Fees

noreply@blogger.com (Seemingly Useless) — Thu, 17 Apr 2008 03:56:00 +0000

The last tip in the Personal Finance Series revolved around Retirement Accounts. This article, written by the same knowledgeable guest writer, will discuss the popularly encountered but rarely understood world of mutual fund fees.

Most people attain exposure to the stock market via mutual funds, defined as a financial intermediary that allows a group of investors to pool their money together with a predetermined investment objective. However, with well over 8,000 mutual funds that exist today (http://www.ici.org), how do you know which fund to invest in?

No two mutual funds are the same and not every mutual fund will invest according to their published investment objective. Also, and most importantly, some have a string of fees that will make a huge difference in your net return especially during recessionary times like today. Therefore it is critical to understand the fees involved before you make any mutual fund investments.

For example, you might notice the following fee:

Sales load- This is a fee that is used to pay brokers that promote a specific fund. It can be either a front load or back load fee and is usually 5% of your investment. For example, if a fund has a 5% front load, and you decide to invest $100 into the fund, then you will pay $5 (or 5%) immediately and your initial investment would be $95 instead. Your net return must exceed 5.3% ($5/$95) in order to break even. Back-load fees just mean the fee is taken when you redeem your shares. If your investment has done well then the fee would clearly be higher.

Many funds are considered no-load funds but there are also a number of non-load fees involved. Some include:

Redemption Fees- Some funds charge a fee when you redeem your shares, which are not considered back load fees because the fee is paid to the fund, not the broker. The SEC has limited the max redemption fee charged to be 2%. Some funds also charge a redemption fee when you buy and sell within a short term time frame (i.e. 60 days).

Exchange Fees- Some funds charge a fee when you exchange one fund for another within the same family.

Account Fees- Some funds charge a fee that will be used for the maintenance of accounts.

Purchase Fees- This is the same as a front load fee, except the charge goes to the fund, not the broker.

Finally, you will probably find the following fees with every fund you purchase:

Management Fees- The fee charged to pay the professional(s) for managing your assets and making the investment decisions.

Distribution Fees (aka 12b-1 fees) - Fees charged to cover distribution expenses (i.e. marketing, printing, etc).

The above sounds quite expensive and you may end up in the red for a long time if the wrong fund is chosen. Thus, be sure to review the “net expense ratio” which will tally all the fees involved. From my experience, the average expense ratio for equity mutual funds has been around 1-1.5%. Anything higher would be relatively expensive. Further, bond fund expense ratios are typically lower.

Here are some tips that will help you learn and understand more about mutual fund fees:

Use websites such as www.morningstar.com to learn about funds. All you need to do is to type in the fund ticker and not only will you find out the fund fees but you will also learn interesting facts about what your fund is invested in.
Read the prospectus for your mutual fund. If you are dealing with a broker, ask him/her to provide one.
You can also Google the fund name and look for the prospectus through the fund’s website. The actual prospectus could be thick (don’t be discouraged) but understanding the facts will make you a smarter investor!
Finally, you can reach out to the fund’s customer service department and have them explain what fees are involved. The phone number is almost always on the fund’s website.
Final thoughts: During bull markets, most investments go up and people focus less attention on the fees they pay. However, when times are rough (and believe me, the stock market does not look pretty right now), it is extremely critical to be saving every extra penny that you can. Therefore, do your due diligence correctly and make smarter choices about mutual fund investing today!

If you have any questions or comments concerning mutual fund fees, please leave a comment or send an email to seeminglyuseless@gmail.com

Useful Websites:
Morningstar.com

Survival of the "Fittest" - Flexibilty and Specialization

noreply@blogger.com (Seemingly Useless) — Sun, 13 Apr 2008 23:00:00 +0000

"It is not the strongest that survives, not the most intelligent, but the one most responsive to change" - Charles Darwin from The Origin of Species

Whether you believe in evolution or not, it is undeniable that Darwin's observations were insightful. Contrary to popular belief, it is not the strongest or smartest that survives but rather those that are the most adaptable. Survival of the "Fittest" does not mean physical or mental fitness but rather being the best fit for your environment. Since our surroundings are ever changing, one needs to constantly adapt to new environments. In order to adapt, one needs to understand change (Here is article concerning CHANGE). The faster one can acclimate to their new environment, the higher the chances of survival. In addition to surviving, those who can adapt are usually also successful because they are resourceful and flexible in dealing with all situations.

One good example of an ever changing environment is the stock market. Especially with the recent volatility, it is clear that the only thing certain is uncertainty. Those who are inflexible have a hard time making money in a market where adaptability is rewarded. One needs to recognize when market conditions have changed and tweak their strategies accordingly. Those who don't change are usually the ones that shelter their egos and refuse to admit that they were wrong. There is a fine line between holding onto your convictions and being wrong. Those who have a sound strategy know that as long as all the signals are indicating a certain trade, it is the right thing to hold onto your convictions. They usually have an exit point on both the winning side and losing side. People who are wrong usually have no strategy or deviate from their strategy because their emotions and ego get in the way. They are holding a stock for no good reason with no exit plan. These are usually also the same people who are susceptible to following "tips" and "hot stock picks" from TV/online gurus. Most top traders rank flexibility, the ability to adapt, as being one of the most important traits contributing to their success (Electronic Day Traders' Secrets and Market Wizards).

In order to survive in a job and in life, one must do what they are "fit" to do. As discussed in the Jack of All Trades article, people are generally more interested and passionate in subjects in which they excel. It only makes sense that one should pursue an occupation that one enjoys and is "fit" to do. If you do not perform a certain job well, it is probably very likely that you will be fired and replaced by someone who can perform the job better. If everyone specialized in their best field/subject area, the world would be so much more efficient. Imagine a row boat at sea with two people, one rower and one navigator trying to reach an island. If one person was physically strong and the other person was better at reading maps and using a compass, it would make sense to make the strong person row and the other person navigate. This "division of labour" would lead to the most efficient situation because each person was "fit" to do their specific task. It is possible to have the physically strong one navigate and the other person to row, but that would most likely lead to much wasted energy although they might still be able to reach their destination. It may seem obvious that one should pursue a job they are fit to do and enjoy, but from my observations, that is usually not the case:

Why do people do jobs they are not good at?

Social Pressures - Many people want to be doctors, lawyers and bankers because they are the social epitome of hardworking success. Those that perform well during their educational years are often pressured by family members, counselors and friends to pursue such positions.

Money - People love money. It doesn't matter what they do as long as they get a big pay check. It doesn't matter if the position does not provide stability or benefits as long as the salary is high enough. Monetary wealth is also a societal measure of success.

Need for Stability and Benefits - Many people, especially poor immigrants, live paycheck by paycheck and need to support their families. They are willing to do anything as long as it is a steady paycheck they know they can depend on. Many families are also dependent on company sponsored health insurance. With the rising cost of health care, people can not afford to leave their jobs, whether they enjoy it or not.

Lack of Self Awareness - People rarely examine themselves. They like to be told what they like and what is good and what is bad. Most people don't know what they are good at because they never bother exploring or perhaps never had the resources or chance to find out. They take media (TV, magazines, newspapers, etc) portrayals as a substitute for self scrutiny. It is much easier to adopt someone else's meaning of happiness than to try to figure out your own.

Are you fit for your current occupation? When I was young, I wanted to be a doctor/lawyer because of the prestige and status but as I grew older and learned more about myself and also what the positions entailed, I realized that I was not "fit" to be a doctor/lawyer. It was not a competency issue but rather a conflict of personality and interests. I knew I didn't want to work long hours or do tons of reading or have the physical well being of someone decided by my two hands. There were aspects to these jobs that were appealing such as patient interaction and acquiring the skill to help others and to save lives but on the whole, I knew these were positions I was not fit to do. I was able to come to such realizations after much introspection. Even if you don't know what you are fit to do, you can probably narrow down what you're not fit to do. One needs to learn about oneself and be brutally honest about your abilities and your future goals and dreams. It is easy to fall into society's definition of success and achievement but in order to survive, it is necessary to do something you're "fit" to do.

"The only thing that makes life possible is permanent, intolerable uncertainty; not knowing what comes next." - Ursula K. Le Guin

Flexibility and Specialization are opposing concepts. When one specializes, as seen in an assembly line, they naturally become less flexible since they are focused on a performing one particular function. Using the row boat analogy, the stronger person that constantly rows the boat, will never learn to navigate and the person that is always navigating will never learn rowing techniques. Despite their opposing nature, both specialization and flexibility is necessary because one has to fit their environment and adapt to the always changing environment, respectively. Uncertainty can be disorienting but if you can strike a balance between being flexible and achieving specialization, you'll be able to survive and be successful in all conditions, unlike the unfortunate Dodo bird in the picture above.

Comments and Personal Stories are always welcome in the comments section or at seeminglyuseless@gmail.com

Recommended Reading: The Origin of Species by Charles Darwin, Electronic Day Traders' Secrets by Marc Friedfertig and Market Wizards: Interviews with Top Traders by Jack D. Schwager

Seemingly Useless Diet Update Part 2 - Race vs. Life Expectancy

noreply@blogger.com (Seemingly Useless) — Tue, 08 Apr 2008 02:57:00 +0000

It has been about a month since I decided to PERMANENTLY overhaul my eating habits following the Seemingly Useless Diet and I have decided to provide another update (first update and Seemingly Useless Diet FAQ can be found here).

I have lost about 10 pounds (7% of my body weight) and I am definitely beginning to look leaner. So far, I have had no problems staying away from deep fried foods, junk foods, pork and candy. The psychological approach of the Seemingly Useless Diet has definitely helped to staunch my cravings for the unhealthy foods I use to love.

Since the last update, I have added more healthy alternatives to some of my favorite foods on the side bar of the blog.

Effects after changing my eating habits for about a month have been:

Higher energy still without the hunger pains described in the first update.

Still haven't had a food coma since I began this diet.

Strengthening of the immune system (although the evaluation period may be too short to prove conclusive).

Since I started eating healthier, I observed some unintentional yet interesting statistics concerning the senior citizen (65 years or older) population in my area. Living in an urban melting pot, I am exposed to a plethora of different ethnicities but among the senior citizens, the ethnicities were less diverse. I noticed a lot more seniors of Jewish and Asian descent than any other ethnicity. I also observed that there were significantly less African Americans, Italian Americans and Hispanic-Latino among the senior citizen population. Although there are many factors that can attribute to this disparity, I believe diet is one of the main causes.

Asians, especially the Japanese, eat fish on a daily basis. It is an essential part of their diet mainly because that's what they grew up eating and it is cheaper to buy than beef and other meats. Asian cuisine, with the exception of Americanized Chinese cuisine (here is an article on the difference between Chinese cuisine and Americanized Chinese cuisine), is cooked with only moderate use of oil/butter and hardly ever deep fried. Jews have strict dietary laws called Kashrut (also known as kosher), which forbids many unhealthy foods such as pork and shellfish. These rules for food and food preparation were implemented to ensure that foods eaten were clean and would not cause sickness. It is no surprise that these two ethnicities with their healthy diet cultures tend to have longer life expectancy (assuming a strong presence of senior citizens correlates with longer life expectancy).

On the other hand, the diet of Italian Americans center around pasta, cheese, sausage and usually prepared in large portion sizes using lots of oil and butter. African Americans are usually known for their Southern comfort and soul foods consisting of foods such as fried chicken and catfish, bbq ribs, corn bread, grits and butter biscuits. Hispanic/Latino foods refer to Mexican, Cuban, Latin American and Spanish cuisine. They consist of foods such as fried pork chops, fried plantains, chorizo (sausage) and other meats. Brazilian cuisine has a heavy emphasis on meat. I am sure that my list is incomplete and perhaps even skewed but I am only stating what I see when I frequent the restaurants of these diverse cuisines. It is no coincidence that my observations match this interesting correlation between diet and senior citizenship presence. Although this is by no means a controlled experiment, I will still boldly conclude that the diet of one's race and culture definitely has a noticeable impact on life expectancy.

Socioeconomic status also affects diets because most cheap foods are also the unhealthiest. Fast food restaurants, junk foods, candy and soda are all cheaply priced but extremely detrimental for the body. As a child, I was raised in a poor low-income family and was consistently exposed to "bang for the buck" foods such as spam and instant noodles. When I received an allowance, I could only afford snacks such as potato chips, 25 cent artificial juice drinks, candy, Twinkies and other extremely unhealthy foods. Even when I thought I was spending money on "real food" it would be at McDonalds or some other fast food restaurant. Without the proper education on nutrition, I was not aware of the damage I was doing to my body and the lasting effects my diet was going to have in the future. Wealthy individuals have the luxury of dining at "nice" restaurants where foods are generally fresher and health consciously prepared. The main difference between an expensive restaurant and a cheap one, commonly portrayed in pop culture, is portion size of each dish. Contrary to reason, expensive restaurants actually serve more moderate to smaller portions whereas the inexpensive restaurants serve much larger portion sizes despite costing less. This makes the inexpensive restaurants even more appealing because not only do they prepare foods that are tasty (deep fried and lots of sugar, oil and fat) but you get so much "bang for the buck". In addition to eating smaller portions, it is probably safe to say that those who are rich can also afford other factors such as gym memberships, nutrition experts, and doctor's visits which lead to longer life expectancy.

Seemingly Useless Commentary: Although it may seem more expensive to buy healthier foods now, in the long run, staying out of the hospital will save you a small fortune. People who complain about the cost of healthy foods are penny-wise and dollar foolish. For some insight into the cost of health care, both financially and emotionally, visit the cardiac disease wing of any hospital and survey its residents. Director Michael Moore has made a very good documentary (Sicko, 2007) concerning the increasing inaffordability of health care.

Useful Websites:

National Center for Health Statistics: Life Expectancy

Jack of All Trades or Master of One

noreply@blogger.com (Seemingly Useless) — Sat, 05 Apr 2008 04:58:00 +0000

If you are familiar with who I am or have been reading the articles from this blog, then you will know that I am an avid learner and have taken on numerous interests such as Tai Chi Chuan, French, chess and guitar, just to name a few. One issue I constantly struggle with is whether I should stop pursuing new curiosities and start trying to really master some of the interests I have already cultivated. Should I be really good at many things or be outstanding at one or two things? The answer that I came up with is: Why not be both? Is it not possible to be proficient at many things while also mastering a few things?

In order to reach mastery, one needs to not only devote time but also have some sort of innate ability in that area. To clarify, mastery refers to possessing consummate skill and performing at the highest level. EVERY person HAS natural God-given talents and abilities. For some it might be book smarts and the ability to understand and express concepts (top students, orators, lawyers) for others it might be musical ability (instrumentalists, composers, singers), yet others might work really well with their hands (mechanics, painters, carpenters) and so forth and so on. The more natural ability you possess, the shorter time it will take for you to reach mastery. Unfortunately when we were born, a list specifying our talents was not attached so to discover our natural abilities, we must do so via trial and error. This supports the reasoning that learning numerous things (being a Jack of all trades) is actually a prerequisite to achieving mastery in a few.

Another characteristic required to achieve mastery is having a passion for the subject. Without passion, it is near impossible to endure the long arduous journey to mastery. This is further justification for being a polymath, a person of varied learning, because how can one know what they have a passion for without first attempting it. Interestingly, people are generally more interested and passionate about things that they are good at. Think about your favorite subjects in school or your favorite hobbies, I would be surprised if you didn't do well in those classes or if these hobbies weren't things that you were good at. Here is a personal illustration of this phenomenon: I use to enjoy math throughout all of my schooling until I did poorly in one of my advanced math classes and "coincidentally" decided that advanced math was boring, useless and unappealing. Ineptness has the funny ability to transform personal taste.

Although it is possible to be gifted in things you lack passion for, there is no point to obtain mastery for the sake of mastery. True masters are not just imitators but innovators. They understand their field comprehensively enough to take it to the next level. Without passion, there is rarely inspiration and creative insight. Personally, I don't think it is possible to master something that one doesn't love doing but impossible might be too strong of a word.

Being a Jack of all trades is merely a by-product in becoming a master and ultimately a Renaissance Man or homo universalis, a person who "develops skills in all areas of knowledge, in physical development, in social accomplishments and in the arts"(Wikipedia). This ideal stemmed from Leon Battista Alberti's notion that "a man can do all things that he will". It is important to note that the Renaissance ideal was not only limited to improving the intellectual but also the physical. Being a competitive athlete was just as important as speaking several languages or playing several instruments. One of the most famous polymaths was Leonardo Da Vinci, who was a painter, sculptor, engineer, biologist, actor, singer, philosopher, chemist, geologist, physicist, musician, astronomer and anatomist. Before his famous contributions to painting and sculpting, Da Vinci was definitely considered a Jack of all trades. Several interesting articles concerning polymath and a list of renowned Renaissance Men can be found here and at Wikipedia.

An issue that occurs when pursuing many diverse interests is the scarcity of time. Time is limited and each new interest depletes the already pressed time to seriously pursue these interests. Good news is - from my experience, there are several reasons why the problem of finite time should not deter you from learning new things:

The more things that you learn, the more proficient you become in the skill of learning which results in an increased capacity to learn. Also, almost all topics are interrelated so what is learned in one area becomes useful when learning in another area (Chemistry of Learning). Example: Chinese Philosophy (Yin and Yang) helps people understand the principles of Tai Chi Chuan (emptiness and fullness) which teaches the importance of generating all movements from the hips (kua) which is useful for executing effective martial arts (kickboxing, grappling, Wing Chun, etc) and sports (golf, tennis, baseball, etc) techniques.

Resources for learning are easy and fast to access with the Internet. There are countless online tutorials for every subject under the sun and if you prefer the classic training via a teacher, online networks can match you with a teacher, online or in-person, within seconds. Learning online also caters to your schedule so you can learn at all hours of the day. Having all these resources at the click of a mouse is definitely a strong asset against the ever falling sands of time.

One can learn to use their time more efficiently. As you learn more things, not only will your proficiency in learning increase but also your ability to "find" free time. Flashcards and mp3 players are excellent tools in converting time used for traveling and waiting into learning opportunities. Audio books, language lessons, music lessons and more are all available during your commute to work, your wait at the doctor's office or Department of Motor Vehicles, or while you're busy doing chores at home. Combining several of your interests can also help to free up some of that precious time. Example: Stretching while studying/reading or practicing scales on your instrument as you watch TV.

Even if you may have found your natural ability and life's calling, it is still necessary to keep an open mind and to learn about/try many things. You never know if you have other hidden talents. The phrase "Jack of all trades, master of none" is currently used as an insult to refer to someone who is competent at many things but not magnificent in any particular one but the quote was originally meant to be used as a compliment in its full form: "Jack of all trades, master of none, though ofttimes better than master of one." As with everything, it is necessary to have a balance (Yin Yang Markets article), know your limits and don't spread yourself too thin but at the same time follow your interests even if it means stepping out of your comfort zone. Learn more today!

Recommended Reading: Polymath: 'A Renaissance Man' and The Polymath by Bensalem Himmich

Personal Finance Tip #3 - Retirement Accounts

noreply@blogger.com (Seemingly Useless) — Wed, 02 Apr 2008 21:45:00 +0000

With the increasing uncertainty of Social Security, it is necessary to start planning for retirement as soon as possible. It is important to become financially independent in your "golden years" even if you decide to continue working. Here is an excellent article concerning retirement written specifically for Seemingly Useless by a knowledgeable guest writer.

Perhaps you won’t get a raise anytime soon but that does not mean you cannot boost your take-home pay today! Most people do not realize that by thinking ahead into the future (i.e. retirement) they can actually increase their net worth by bundles today!
The key is to consider tax deferred vehicles such as Investment Retirement Accounts (IRAs) or defined contribution plans from your company, commonly known as 401k plans. By allocating a piece of your paycheck towards these vehicles today, you can lower the amount of money you pay to the IRS each year, which essentially is free money in your pocket!

How is this possible? One way to look at this is through a concrete example. Say you make $100 per week and you are required by federal and state tax laws to pay 50% in taxes. That means you get to take home $50 per paycheck and Uncle Sam takes $50. Yet, Uncle Sam did not work at all!

When you contribute to an IRA, you use before-tax money which means ultimately you pay less taxes to the IRS. So back to our example, say you decide you want to allocate 10% to an IRA account. That means $10 of your $100 paycheck will be transferred to an IRA and you pay 50% of the remaining money ($90) to the IRS. In other words, you pay 50% of $90 to the IRS (or $45) and you get to take home $45.

While your take home pay is lowered from $50 to $45, you also saved $5 in taxes to the government, which you will end up giving away had you not used your IRA. Thus, by simply thinking further ahead, you immediately accumulate free money year after year!

There are a few types of tax deferred vehicles that one should consider. We discuss the three most popular ones here: IRA, IRA Rollover, and 401k.

IRA - This is by far the most traditional of tax deferred vehicles. The idea is you make a contribution using pre-tax money and you won’t get taxed until you decide to withdraw funds at a later age. Most people utilize this vehicle because their tax bracket will be much lower by the time retirement happens so any tax payment then will not be as significant as it will be today. Another reason why people open IRAs is because they do not qualify for ROTH IRAs, which we will talk about later.

ROTH IRA - This is also a popular tax-deferred vehicle and is similar to an IRA with the exception that you use after-tax money to fund the account. Because you’ve already paid a tax on this contribution, you will not get taxed again at the time of withdrawal. If you expect to be in a higher tax bracket at a later age and you qualify in terms of income requirements, this is the right vehicle for you. If you invest $100 today and it grows to $5000 in 40 years, then you will save on a lot of taxes, especially if your tax bracket will be lower. The income limits are as follows: If you make more than $114,000 (or $166,000 as a joint couple), or if you are head of household or married filing separately and did not live with your spouse during the year, then you do not qualify for a ROTH IRA.

401k - Over the past decades, corporations started to provide more and more 401k plans instead of traditional pension plans for their employees. With a 401k plan, you make contributions with before-tax money and all gains are tax deferred until you make withdrawals upon retirement. One of the best things about 401k plans is that most employees will match your contributions up to a certain percent of your annual salary. Again, this is free money! By participating in a 401k plan, not only do you save from Uncle Sam, but you also collect extra money from your firm. Furthermore, you are saving for your retirement so the benefits are three-fold.

Here are a few more tidbits on IRAs/ 401ks that you should know:

1) You must make IRA contributions with earned income. (i.e. you cannot use dividends from stock investments to make your contributions).

2) You can contribute to both an IRA and 401k.

3) There are contribution limits for both IRAs, and 401ks. For IRAs, the limit is $4,000 for 2007 and $5,000 for 2008. For 401k plans, the limit is $15,000 for 2007 and $15,500 for 2008. You can also make “catch up” contributions if over the age of 50. Some companies may also have limits.

4) If you take money out of your IRA or 401k plan prior to retirement (age 59 ½), there could be penalties.

5) Within a 401k plan, your company will generally provide a list of mutual funds that you can invest in. When selecting these investments, make sure you understand all the fees you will pay. Also, it is somewhat risky to participate in employee stock plans, which is often a choice provided. Remember Bear Stearns? Well, many employees that invested in these company stock programs saw their money vanish because the company went out of business.

Final thoughts: While no one will hand you a stack of cash, there are indeed many ways to enhance your wealth. Be sure to familiarize yourself with these tax deferred vehicles and use them to your advantage today!!

If you have any questions or comments on IRAs/401ks or other retirement plans, please leave a comment or send an email to seeminglyuseless@gmail.com

Useful Websites:
Social Security Retirement Site

Art of Relaxation - "Fang Song Gong"

noreply@blogger.com (Seemingly Useless) — Sun, 30 Mar 2008 04:04:00 +0000

We have all been told to "relax" but has anyone ever been taught how to relax? What does it mean to relax? Watching TV, going on vacation, reading, lying on the bed, playing guitar? I have been practicing Tai Chi Chuan for about half a year now and even though Tai Chi is associated with relaxation I was told that I have not yet learned to relax my body despite performing the correct Tai Chi movements. This made me realize that one needs to actually LEARN how to relax and afterwards to actively apply this knowledge. Contrary to popular belief, relaxation is not about letting your body droop as if you've just lost all your bones. It is not about releasing control of your body but rather focusing on your tension so your body can actively relax it. Relaxation is the best combatant for stress, which is responsible for many emotional and physical problems. Our society is naturally stress-ridden and it is paramount that people learn to relax so to improve their general wellness and happiness. In The Way of Qigong, Kenneth S. Cohen discusses the art of relaxation (In Chinese - Fang Song Gong) and gives some useful insights and methods for relaxing. I will discuss one of the methods that I have found most practical alongside with some personal insights that will hopefully help you to understand relaxation better.

There are four things to keep in mind when thinking about relaxation.

1) Awareness and Tranquility - PAY ATTENTION to tension so that you can relax it. You are actively confronting the problem as opposed to ignoring it. Most people aren't really relaxed when trying to be relaxed because they lack the self awareness to achieve it. They will perform activities to take their mind off their stresses and tensions but rarely do they actively focus on the tension itself. Knowing where you feel tension is the first step to relaxing.

2) Effortlessness - Do less but be more efficient. Don't try too hard to relax. Bruce Lee accurately describes this concept when he teaches people to "be like water". Water is unassertive and soft yet supple, alive and powerful. Again, effortlessness does not mean relinquishing all control but to be fluid and use just enough strength to achieve the desired movement.

3) Sensitivity - A body and mind that is relaxed can feel. This is stressed heavily in close combat martial arts because without real relaxation the body is too rigid and slow to respond. There is less sensitivity to your opponents' movements resulting in delayed reactions. If you want to test this concept, in a sink of cold water, immerse your forearm fully flexed then in the same cold water immerse your other forearm fully relaxed. Which arm was more sensitive to the cold? This is the reason why when taking punches, most fighters will flex the part about to be hit. The body itself will naturally tense up when expecting impacting. This quote from Cohen's book stuck out to me: "If the opponent doesn't move, I don't move. If he makes the slightest move, I move first."

4) Warmth and Rootedness - Deep relaxation and breathing should result in warmth and a feeling of stability to the ground. When standing, it is recommended to relax through the feet and into the ground much like the roots of a tree spreading underneath the tree. When relaxing, it is good to feel "warmth in the body and coolness in the forehead".

A good way to define relaxation is Effortlessness with Intent. One method that I personally use for relaxation is:

Sequential Relaxation and Sinking (from The Way of Qigong)

Stand shoulder width apart or sit comfortable and erect

Eyes closed or half open with a soft unfocused gaze

Starting from the crown of your head relax each body part until you reach the bottom of your feet. Inhale when you focus on the body part and exhale when you physically relax the body part. When relaxing, let each body part sink to the lowest point. The body should be relaxed in this order:

Relax crown, forehead, eyebrows, eyes, cheeks, jaws, gums, ears and muscles of the face. Feel these muscles letting go and releasing downward.

Relax muscles on front, side and back of neck. Relax and open the upper spine. Imagine your head like a wine cork floating on water.

Relax shoulders and sink them straight down (not forward or backward) to the ground. Allow relaxation to spread to the arms/hands and feel the weight of your arms and extension and weight of your fingers.

Relax collarbone, shoulder blades, ribs and breastbone.

Relax entire spine by extending like a rope and balance the spine so it feels as if no muscles are needed to hold it up.

Relax torso, abdomen, solar plexus and diaphragm.

Relax the hips and butt. Be aware of the connection between the top of the leg and the bottom of the hip and make sure there is space in that area.

Relax the thigh muscles and hamstrings. Release knees and relax lower legs, calves, ankles, feet and toes.

This method has worked well for me and if you decide to try this method, I recommend really taking your time and focusing on each body part before you let it relax. With practice, it is possible to achieve relaxation quickly. The key thing is to PAY ATTENTION to each body part before you physically relax it.

If you try this method or if you know of any effective ways to relax, feel free to leave comments or to email me at seeminglyuseless@gmail.com

Recommended Reading - The Way of Qigong: The Art and Science of Chinese Energy Healing by Kenneth S. Cohen

Change - A Study of Dynamic Equilibrium and Le Chatelier's Principle

noreply@blogger.com (Seemingly Useless) — Thu, 27 Mar 2008 03:19:00 +0000

"Nothing endures but change" - Heraclitus (Ancient Greek Philosopher)

"Change before you have to" - Jack Welch (Corporate CEO)

"There is nothing wrong with change, if it is in the right direction" - Winston Churchill (British Prime Minister during World War II)

"There is nothing more difficult to take in hand, more perilous to conduct, or more uncertain in its success, than to take the lead in the introduction of a new order of things." - Niccolo Machiavelli (Italian Diplomat and Political Philosopher)

Above are several famous quotes, each touching upon a different characteristic of change. Change is described by Wikipedia as "the transition that occurs between one state to another". Heraclitus was very insightful when he observed 2500 years ago that the world is ever changing. To this day, people, society, languages, television shows, etc. are constantly changing. This happens because change not only provides an escape of the mundane but is necessary for innovation and growth. Jack Welch's words of wisdom, in addition to echoing Heraclitus' observation of the perdurability of change, also insinuates that change has an internal and external component. People can choose to change or be forced by the external environment to change. Churchill touches upon the "direction" of change, which can be good or bad. A person's value system will determine how they view change and whether they will support or fight it. Machiavelli states eloquently the common experience that change is hard. Change is so difficult because it requires you to step out of your comfort zone with no promise of desired results.

Change is one of those amorphous topics that is difficult to study because it is far easier to focus on the result of change rather than on the process of change. It is important to understand how the process of change works so one can effectively initiate change or recognize when change is occurring around or to them. Interestingly, a study of chemistry has provided me with some insights into the process of change.

In chemistry, an important recurring concept is dynamic equilibrium which occurs when two opposing processes proceed at the same rate. The word "dynamic" is used to emphasize the constant motion during equilibrium even though it may seem to be at a standstill. The main principle associated with predicting effects of a change during equilibrium was one founded by Henry Louis Le Chatelier. Le Chatelier's principle basically states that if any system at equilibrium is disturbed by a change, then the equilibrium shifts to partially counter-act the imposed change. A common example would be in a chemical reaction at dynamic equilibrium and if more reactants are added, then the equilibrium would shift to reduce the reactants by producing more products. The reverse also holds true so if more products are added to the equilibrium, then the equilibrium would shift to reduce products by producing more reactants.

This idea of dynamic equilibrium occurs often outside the world of chemistry. The stock market, like all free markets, is governed by the economic law of supply and demand. Stock prices rise when demand exceeds supply and drops when supply exceeds demand. When the supply (people selling) is equal to demand (people buying), dynamic equilibrium exists as the stock price enters into a tight range and seemingly stops moving. Homeostasis, the body's stable and constant condition is maintained by using several dynamic equilibrium adjustments and mechanisms. Muscle strength, unless you are actively exercising, is usually in a state dynamic equilibrium. When using your muscles for everyday activities, muscle mass is neither gained nor lost. It is not until you vary your daily muscle usage that this equilibrium begins to shift.

Many people live their lives trapped in dynamic equilibrium. Things are moving (everyday routines and even busy lifestyles) but they aren't really going anywhere, they feel bored or they don't make self improvements (mind, body or soul). From my observations and experiences, I believe that the reason why this occurs is because changing is uncomfortable. Having to leave the shelter of one's "security blanket" can foster feelings of vulnerability and uncertainty. The magnitude of change is directly proportional to the discomfort experienced. Just think about the chaos, violence and uncertainty during the French Revolution (Reign of Terror) or how you felt when you were going through puberty.

In addition to being uncomfortable, breaking out of dynamic equilibrium/consolidation, as any trader or investor will attest, requires significant energy. This is due to the natural tendency for things to gravitate towards the mean. Stock prices, during consolidation (people buying = people selling), will always regress towards the mean unless there is considerable momentum one way or the other to break out of the range. During this breakout, there is a period of volatility and uncertainty as investors cannot yet discern if this is a false breakout or not. Like stock breakouts, people implementing changes (career change, relocating to a new city, starting or ending a relationship) in their life will always feel a degree of uncertainty and doubt until they are again able to establish a dynamic equilibrium in their lives.

If it is so difficult to change, why bother? Because change is inevitable and if you know change is coming, it is always better to preempt it by choosing to change rather than being forced to change. Change is also the conduit for people to grow and improve themselves. If you want to be stronger, smarter and less bored, then you need to shift your dynamic equilibrium to the next level. Change, as aforementioned, is directional. It can be good or bad. For future examples, assume that an upward shift in equilibrium is a desirable change and a downward shift is an undesirable change.

Keeping in mind Le Chatelier's principle and that change can be initiated internally or caused externally (out of your control), here are some ways to help you change for the better:

Challenge Yourself: A challenge is the disturbance that will shift your equilibrium in the direction to make the challenge less of a challenge (Le Chatelier's principle). Imagine lifting weights, if you increase the amount of weight you normally use, your body will automatically grow your muscles so as to make that weight seem lighter the next time you try to lift it. The harder the challenge (greater the disturbance) the greater the shift in equilibrium. Since breaking out of equilibrium already requires significant energy, it is possible to "over-challenge" yourself and not have the required energy to break out of the equilibrium (lifting weights that are too heavy).

Discomfort is a State of Mind: How you view discomfort will go a long way in terms of how you change. Sticking with the weight training analogy, those who adopt a "No Pain, No Gain" mentality will usually fare better than those who complain about muscle soreness and fatigue. Stepping out of your comfort zone risks failure (thoughts on failure discussed in the Chemistry of Learning article) since you are entering a realm of uncertainty. The only way to be comfortable with discomfort is to practice stepping out of your comfort zone (Le Chatelier's principle). Learn a new sport, language, musical instrument, dance, etc. and go out and do things you would not normally do (safe and legal things like singing karaoke in front of strangers).

Change is a Two Way Street: Be wary that Le Chatelier's principle also applies to the reverse direction of change. If a musician or athlete stops practicing, the dynamic equilibrium will shift to a state where the musician or athlete will need more practice to achieve the same results thus the musician becomes rusty and the athlete becomes slow and less skillful. So it is not only important to shift your dynamic equilibrium up but also to prevent it from shifting down.

This article has looked at change from an unconventional viewpoint so feel free to leave feedback and/or your own personal experiences and advice regarding change in the comments section or at seeminglyuseless@gmail.com.

Remember the words of Robert C. Gallagher: "Change is inevitable - except from a vending machine." --> So Embrace It and Use Exact Change!

Recommended Reading: Leading Change by John P. Kotter The Dance of Change: Challenges to Sustaining Momentum in Learning Organizations by Peter M. Senge

The Fall of Rise and Fall - Keeping It Simple

noreply@blogger.com (Seemingly Useless) — Sun, 23 Mar 2008 17:27:00 +0000

The phrase "Rise and Fall of" usually precedes something great that was established but then due to certain factors just utterly falls apart. This term has always been reserved for swift magnificent collapses. Some current nouns befitting this descriptive title are Bear Stearns, Eliot Spitzer and even Britney Spears. These three examples are testament to George Santayana's famous advice that "Those who fail to learn the lessons of history are doomed to repeat them". So in order to learn this lesson the "easy" way, I decided to research one of the greatest and most widely studied collapses of all time, the Fall of the Roman Empire. In our society, there has always been an interest and emphasis on studying how to "rise to the top" as evident by the multitude of self-help/personal development books, websites and seminars. Since most people already know how to "rise" and be successful, I want to focus on how certain extremely successful and great things "fall from glory".

The reason for the fall of the Roman Empire is one of much debate and controversy. One theory by Edward Gibbon blames the decline of the Empire on loss of "civic virtue" among Rome's citizens resulting in outsourcing of important duties such as Empire defense to barbarian mercenaries who eventually revolted and took over the Empire. Roman citizens became complacent and lazy with their successes and lost the military toughness that had brought them success. Another reason cited for the Empire's demise was overextension. As the Empire grew, there were more bordering enemies and more cities to defend thus spreading the military thin. This not only led to weakened defense throughout all the cities during a time when military protection needed to be strongest but also led to the aforementioned hiring of barbarian mercenaries who later became responsible for destroying the Empire. Rome's fall is eloquently described by Gibbon here: "The union of the Roman empire was dissolved; its genius was humbled in the dust; and armies of unknown barbarians, issuing from the frozen regions of the North, had established their victorious reign over the fairest provinces of Europe and Africa." (Chapter 33 from Decline and Fall of the Roman Empire).

Although barbarian incursions are popularly believed to be the cause of Rome's fall, an interesting argument has been raised in The Upside of Down by Thomas Homer-Dixon for complexity as a primary cause. He believed that Roman Society became more complex and difficult to control which resulted in bureaucracies and corruption. Homer-Dixon states that "rising complexity strangled the empire's ability to renew itself". Basically, the complexity led to a rigidity that reduced Rome's ability to withstand sudden unexpected crises. The author also argues that increasing complexity results in decreasing investment returns of energy despite expending more energy. Rome's main source of energy was food and as Rome expanded and became more complex, the empire exhausted its best farmland and had to cultivate less fertile lands. Poorer crop yields along with longer food supply lines to major cities caused the return on energy investment to steadily decrease with increasing effort/energy. As time went on and complexity further increased, Rome's energy supply was eventually producing too little for the amount of energy needed to maintain these supply lines and its famous dramatic collapse ensued.

Although commonly associated with intelligence, sophistication and progress, complexity is detrimental. Complex ideas and institutions require more energy to sustain with diminishing marginal returns than its simple predecessors. The current financial credit crisis in the US was born out of complex financial instruments (nontraditional mortgages and equity and bond derivatives) that very few people, including CEOs of major financial institutions, understood. These complex systems caused the financial industry to become too rigid and when a crisis (subprime) occurred, many firms were rudely awakened to staggering losses and substantial risks on various holdings (Bear Stearns, Ambac Financial, Countrywide Financial and numerous other companies). Since society and financial markets are becoming more intertwined and complex, a disaster in the financial sector translates into trouble for the general economy and global markets. The more complex a system is the less the system can cope with sudden shocks.

Another example that attests to the deleterious effects of complexity can be seen in investing/trading. Two REQUIRED characteristics of a successful investor/trader are flexibility and adaptability. The financial markets are ever changing and to be profitable one has to act fast and be flexible in one's thinking and adapt to changing conditions. Since rigidity is directly proportional to complexity and flexibility is the opposite of rigidity, it is logical to conclude that complexity is inversely proportional to investing/trading success. Traders and investors that devote much of their time performing complex strategies and using every indicator across all markets usually suffer in performance to those who have simple yet effective strategies. It is easy to get lost in all the clutter and miss out on key information.

Here are some valuable lessons to be learned from the Fall of the Roman Empire:

Don't Become Complacent - After achieving success, it is natural to want to take a break from all your hard work and get lazy but if you want to maintain success, you need to stay "hungry" for what you want. Pursue work that you enjoy so you never need to really "take a break". Trying to constantly improve your chances of success is something you should find fun.

Don't Overextend Yourself - Napoleon, the Roman Empire, and subprime borrowers are all too familiar with the grave dangers of overextending. Spreading yourself thin is always an invitation for disaster. When you take on too much, there is no room for error or unforeseen circumstances. Know your limitations and make sure you stay within them so as to not become an unfortunate statistic to Murphy's Law.

Keep It Simple, Stupid! (KISS) - The most important lesson that I learned from my research is to keep things simple. I have seen many traders use a million and one indicators and look at hundreds of charts and perform all types of complex analysis but yet can't make any money. When you pay too much attention to detail, it not only consumes time and energy, sometimes you lose sight of the big picture and important data. The most effective presentations are those that get to the point. When things are complicated, it is easy for mistakes to occur but difficult to locate the source of those mistakes. Almost always, less IS really more.

History does hold many timeless teachings and taking heed to these lessons will save you from learning things the "hard" way.

Stay tuned for future articles concerning complexity. It is a topic that is both intriguing and relevant.

Recommended Reading: The History of the Decline and Fall of the Roman Empire by Edward Gibbon and The Upside of Down: Catastrophe, Creativity, and the Renewal of Civilization by Thomas Homer-Dixon

Personal Finance Tip #2 - High Yield Savings Accounts

noreply@blogger.com (Seemingly Useless) — Fri, 21 Mar 2008 20:20:00 +0000

In America, we have been experiencing a gradual decline in the savings rate since the early 1980s even falling to a negative savings rate in 2005. A negative savings rate occurs when one spends more than they earn which usually means getting into debt (loans or credit cards) or dipping into savings. Although it does not mean Americans do not have savings, it does imply that savings are declining. Without savings, one can have real long term and short term problems. With the uncertain future of Social Security, savings become even more important as it will probably make up the bulk of your retirement income. In the short term, savings help to protect you during unexpected emergencies such as unforeseen medical expenses, job loss or emergency home/car repairs. With the current economic environment, savings should be one of your highest priorities for achieving financially stability and independence.

There are two ways to help boost your savings. The first obvious way is to cut down on your spending. There are many ways to reduce spending but the easiest and one of the most effective methods is to cut down on unnecessary daily expenses. According to Bankrate.com the Top 10 Money Drains are (along with my recommendations):

Coffee - make your coffee at home and bring it in a reusable cup/thermos
Cigarettes - stop smoking, it is bad for your health anyway
Alcohol - try to limit your drinks when at outside venues
Bottled Water at Convenience Stores- buy bottled water in bulk or refill with boiled water
Manicures - cut down on manicures or attempt to do them yourself or with a friend
Car Washes - self wash your car
Eating out on Weekdays - pack your own lunch and save your money for weekends out
Vending Machine Snacks - buy in bulk and bring your snacks from home
Interest Charge on Credit Card Bills - don't get into credit card debt - read Personal Finance Tip #1
Unused Gym Memberships - switch to cheaper gym memberships (YMCA or city-subsidized recreation centers). Learn about ways you can effectively work out without the use of a gym.

The second way to increase your savings is to place your savings in high yielding accounts. Take advantage of the power of compounding interest and make your money work for you. Many people I know have all their money in checking accounts, regular savings or money market accounts that yield very little or no interest for their money. Others place them in Certificates of Deposit (CDs), which are fine, but have early withdrawal penalties. With the advent of Internet banking, most institutions provide high yielding savings and money market accounts for online users. The interest on these accounts is usually higher than those of traditional accounts and CDs without the illiquidity. With increasing competition in the high yield savings industry, there are many options with high interest rates that have no minimum balance requirements, no monthly fees and no online transaction requirements. For those already using Internet banking, this is a no-brainer since opening an account is easy and transferring money between accounts is old hat. For those uncomfortable with the Internet banking or the Internet in general, I recommend that you familiarize yourself with Internet transactions because it is here to stay and will be the future standard. I am not aware of any traditional high yield savings accounts that do not require large initial deposits, a high minimum balance, limitations on transactions in and out of accounts or other requirements or restrictions.

Before you open your high yield savings account, do your due diligence. Make sure you know what the standard rate will be (rate after the introductory rate expires) and if the bank is FDIC insured. Also check to see what the minimum balance required will be and if there are inactivity or maintenance fees.

Open an online savings account NOW and begin the road to wealth building and financial independence.

Seemingly Useless Commentary - Today's low savings rate has been a function of both the housing boom in 2005 and easy credit from credit card and mortgage lenders. This increase in debt and decrease in savings makes many Americans vulnerable to unexpected situations (medical bills and job losses) causing a rise in both foreclosures and bank defaults. When people default on loans, it is dangerous for banks because a main part of a bank's business is to entice you to deposit your money in their bank with a promise of interest payments and lending your money out to others at higher interest rates. If many loans go into default paired with a panic withdrawal of funds due to fear of insolvency, banks can actually run out of money and go out of business ("bank run"). If there are enough bank runs, an economic recession can occur. This will cause a general tightening in credit since there will be less lenders willing to lend. Businesses and people with no credit or not good enough credit will not be able to get loans or get them at extremely high rates thus slowing down the growth of the economy. So next time you want to spend your full pay check on something nice, think about the economy and put some of that aside in a high yield savings account.

Useful Websites:
Bankrate High Yield Money Market and Savings Account Rates
SavingsAccounts.com

Seemingly Useless Diet FAQ and Update

noreply@blogger.com (Seemingly Useless) — Wed, 19 Mar 2008 04:18:00 +0000

Since my post on a psychological approach to dieting, I have been asked a few questions from readers and friends concerning this method and the idea of dieting in general. I will address some of these questions and also provide an update on the status of my diet overhaul.

Here are some Frequently Asked Questions and Comments concerning the Seemingly Useless Diet:

Why are you dieting, you exercise daily and you are not overweight? My diet is a PERMANENT complete overhaul of my eating habits and not a "diet" in the conventional temporary sense of the word. I may be healthy now but I feel that it is better to preempt future hospital visits by willingly changing your diet rather than being forced to change your diet by a doctor or an unfortunate event. There are no do-overs or reset buttons when it comes to your health and the food you eat now may affect you more than you think in the future. Also, humans are creatures of habit, better to change now than to change in my later years - "You can't teach an old dog new tricks."

Why are you torturing yourself and denying yourself tasty foods that you enjoy? That is the beauty of the Seemingly Useless Diet, you are not trying to resist the temptation of eating foods you enjoy but rather changing the way your mind categorizes the foods. You want to put unhealthy foods (junk food, soda, fried foods, etc.) in your subconscious "disgusting" category and place healthy foods (almonds, fish, fruits, vegetables, etc.) in your subconscious "delicious" category. Changing your subconscious definitions is what is needed for a dieting overhaul to be permanent. This is the reason why most fad or crash diets, which emphasize resisting temptation to foods you enjoy and eating foods you don't enjoy, can not be sustained. Motivation, self control and will power can only go so far. If you have the mindset of denying yourself delicious foods rather than changing your definition of delicious foods, you will eventually succumb to your cravings. Our definitions for delicious foods have been subconsciously nurtured from decades of media advertising and portrayals of fast food restaurants, snack foods and high in sugar beverages as being foods that everyone loves. What kid doesn't want to be refreshed by a nice cold soda or eating at a fast food restaurant that not only gives you a free toy with your meal but also has an indoor playground? When was the last time you saw a commercial on celery, flax seeds or almonds? Just as our subconscious was brainwashed to like unhealthy foods, it can similarly be brainwashed to enjoy healthy foods. So to answer the question, I am not denying myself tasty foods but rather changing my definitions of tasty and disgusting foods. I actually find the foods that I eat now to be delicious even if the general population disagrees.

I would rather die than give up healthy foods! The scary thing is not dying but rather being stuck in the hospital with a catheter in my groin, tubes all over my body, living in a hospital and watching my family worry about me every time I need to have surgery for chronic diseases that could have been prevented if I only changed my diet. Poor diet is directly responsible for many diseases including Type 2 Diabetes, High Blood Pressure, High Cholesterol, Cardiovascular Disease and Cancer. Women who have poor diets can experience complications during pregnancy. Your well-being affects everyone around you whether you want it to or not. Remember: "No Man is an Island" (John Donne, Meditation XVII).

Here is an update on my diet:

It has only been about 2 weeks since implementing this diet but I already feel a boost in energy levels. I have been following the plan that I outlined in the Seemingly Useless Diet with a strict adherence to not eating fried foods, pork and candy. I am also eating on average about six times a day, each meal containing some form of protein and fruit. So far, I have not had any cravings for the foods I use to love (French Fries, Oreos, Potato Chips and Pork) and I truly believe that it has been largely due to associating such foods with disgusting images that are vivid for all the senses. Finding alternatives to such foods have also eased the transition. It is still too premature to attribute this successful resistance to unhealthy foods directly to the Seemingly Useless Diet approach but for the extent of the overhaul, it has been fairly easy to stay on my diet.

Some effects so far from this diet have been:

Higher energy that is sustained throughout the day.

Feeling of slight hunger every couple of hours.

No more food comas and feelings of being "stuffed".

More bowel movements within a day.

So far so good. I will provide more updates and tweaks as the diet progresses. I am always looking for healthy alternatives for unhealthy foods to add to the list on the sidebar of this blog, so please send an email to seeminglyuseless@gmail.com or leave a comment.

Recommended Reading: Eating Well For Optimum Health by Andrew Weil, M.D.