Seemingly Useless

The 6 Simple Life Lessons from the Tao Te Ching

2011-12-31T13:35:00.002-05:00

I am currently reading the Tao Te Ching and came across this passage that I found both simple and profound. I am sure there are many interpretations of this passage but I can only give you my own.

In dwelling, live close to the ground.

Our society places a premium on living on higher floors but what are the real benefits? Privacy, Seclusion, Exclusivity? Are these the things you really want from life? No man is an island and I don't think anyone wants a life devoid of connection. Also, if something ever happens to the building, you are the least likely to survive.

In thinking, keep to the simple.

It is easy to outsource our thinking to Google these days. Just about any problem has an answer online. I take this quote to mean, use your own brain and think through things about work, relationship and other important aspects of your life.

In conflict, be fair and generous.

This is Lao Tzu's way of saying Win-Win. If you ever want to dispel conflict, remember to make sure both parties get what they want. If you crush the other party, be ready for their retaliation one day. So to repeat: Be both fair and generous. It'll work every time.

In governing, don't try to control.

When given power, remember that it is not about control but rather leadership to achieve the common mission. Give your subordinates (employees, children, etc) autonomy but at the same time the necessary resources for their success. History has shown that control is not a good long term strategy.

In work, do what you enjoy.

Work comprises of a good part of your life. Why spend that time doing something you don't enjoy. Find the intersection between your strengths and your career. This way you can spend time building on your what you do best and have people pay you for doing that for them.

In family life, be completely present.

How many times do we "spend" time with our loved ones and find our minds somewhere else. We're either thinking about the future things we have to do or the ways we were hurt in the past. If you want a excellent relationship with your family, be completely present with them and enjoy the moment. They'll thank you for it.

How to Spot a Liar - Seemingly Useless Skills Series

2011-11-07T22:00:00.008-05:00

I have decided to start a series of posts called Seemingly Useless Skills which will feature a skill that is not common but practical for everyday people in everyday life.

No one likes to be lied to (although sometimes we are probably better off not knowing the truth). At times, it is crucial that we know the truth. The first of this series will be a short guide on how to spot a liar.

Being no expert myself, I have found an excellent info-graphic that explains the principles to lie detecting.

How To Spot A Liar by Forensic Psychology

Now that you have some tools under your belt, be careful not to hurt yourself by jumping to conclusions and misreading people. Someone may be rubbing their nose because their nose was itchy but if they rub their nose, lean towards the exit, uses more formal language and constantly looking up and to the left, you may be on to something.

7 Little-Known Factors That Could Affect Your Life

2011-10-31T22:43:00.011-04:00

When I was working in China, I learned a lot about "lean thinking" and recognized its efficacy in practical application especially within a manufacturing plant. As I learned more deeply about this mindset, I realized that it can be apply to all aspects of life. One concept was that of the 7 wastes ("muda" in Japanese).

I mention the Japanese because they were actually the pioneers of the lean movement chronicled in the widely popular book "The Toyota Way". As with all ideas, these seemingly new ideas in the Toyota Way were refinements of older ideas from the likes of Deming and Ford. Although the ideas of "lean" originated in a manufacturing setting, it has been expanded to include many other industries so why not also into our personal lives.

So what are the 7 wastes present in everyday living and how to reduce it?

1. Waste of Overproduction: Unclear expectations or false assumptions lead to this waste. If you did not clearly recognize the needs of your customers (any industry) and create a product making the wrong assumptions, you will probably be left with a lot of junk (anything that has no value and value in this case is determined by what people will pay money for). Any time you spend energy on something, that energy can not be spent on anything else and if at the end, it didn't result in what you wanted due to lack of or misleading information, you have wasted your energy. The way to prevent this waste is to clarify your purpose for everything you do and to make sure whatever you do is relevant to your life's purpose.

2. Waste of Inventory: When you buy new things but you still keep around old things that are never used anymore, you are propagating this waste (i.e. blue jeans that go out of style). When you keep useless things, you need to use resources to store these items and they take up space that can be used for better things not to mention they get in the way when you are looking for things that you need. The best way to get rid of clutter is to donate it - you help other people and you can usually get a tax break (win-win).

3. Waste of Motion: Motion refers specifically to the motion of a person. Poor organization leads to this waste. If you've ever had to rummage through your bag, drawer or closet to find something, you are experiencing this waste. If you are walking upstairs each time you have to pick up the telephone, you are experiencing this waste which can be easily solved if you apply the concepts of organization (Lean has a technique called 5S). There are two parts to organization: One is putting everything in its place and the other is putting that assigned place in an area that is most useful (i.e. placing supplies that are used most often in the top drawer and those used less often in the bottom drawer and to give an assigned location for every item.)

4. Waste of Waiting: If you've ever been late to anything, you've created this waste for the person you were suppose to meet. If you've ever had to wait for someone or something, you've experienced this waste first hand. The way to reduce this waste is to always be on-time and to realize that being on-time shows that you respect not only your own time but other people's time. If you find yourself waiting, always make sure you have something to make the best use of your time (i.e. audiobook when stuck in traffic, ebook on phone when waiting on line, documents to read when early for a meeting)

5. Waste of Transportation: If you commute, you are experiencing this waste. Having to commute is a way of life for most people and the only advice I have for you is to do try being productive during your commuting time. Remember productivity is whatever you make it to be. It can be reading, catching up on some sleep (although I don't recommend it), calling a good friend or just good old relaxing. Also another solution may be to explore working from home. In this age, many jobs can be done with a reliable internet connection and computer.

6. Waste of Overprocessing: If you are a perfectionist in everything you do, you will probably experience this waste. Sometimes good enough is really good enough. You only have a limited amount of time in your day so if you decide to go for perfection, you are dedicating a lot of resources for what may or may not be a lot of gain. Of course there may be instances where being perfect is worth it (i.e. the Olympics) but in most cases it does not pay to be perfect (Read Pareto Efficiency article). Also, going from 95% to 100% takes a lot more energy than going form 0-95%. That's why it is so difficult to be in the top 5%.

7. Waste of Scrap, Defects and Rework: Making careless errors is an example of this waste. Strive to do things right the first time. If you work too fast and make a mistake, you spend even more time reworking. Another precaution is to make sure you are doing work within your reach. If you know you lack the skills, work on building your skills and do things more carefully until you have mastered the skill. This does not mean you have to always be perfect but it does mean working at the minimum required standard.

Having written this article, I realize that some of these ideas may be a stretch but at the same time I see that some are right on point. For now, it is good enough.

Recommended Reading: The Toyota Way by Jeffrey Liker and Lean Thinking by James P. Womack and Daniel T. Jones

Warning: Get Some Sleep!

2011-09-26T20:39:00.002-04:00

For the past few months, I've been logging my hours of sleep per night and also my general mood for the day and I've begun to see a correlation. Although this is no mystery that people that lack sleep are generally more irritable and stressed, I believe these are merely the symptoms of the bigger problem: weakening of our self control.

When I lack sleep, I find that I become undisciplined and give into my impulses and whims. I am unable to resist foods that I shouldn't eat, I cut my exercise routines short and I can't reign in my negative emotions (fear, anger, frustration, etc). I also can't control what I want to say despite knowing the consequences. Being in this state is a vicious cycle that leads to bad decisions and actions which leads to even more frustration not only because of the situation itself but my apparent in ability to stop the downward spiral.

The oft quoted line of the Greek Stoic, Epictetus, "It's not what happens to you, but how you react to it that matters.", truly holds the secret to happiness. Unfortunately when I lack sleep, I no longer have control of my reactions. Now this doesn't mean that I should not be held responsible for my actions because I definitely am accountable. I lack sleep due to the choices I make (working late, hanging out with friends, waking up early, etc). The good thing is that now that I have made this connection between sleep and self control, it impresses upon me the importance of a good night's rest and on the occasions that I don't get enough sleep, I need to be extra cautious of the things I do and say and be more vigilant with myself.

Now for all of you statisticians that argue correlation is not causation, you are correct. At the same time, my belief is no "cum hoc ergo propter hoc" (latin for correlation proves causation) but rather a function of my experience and intuition. Not very scientific but you always have the choice to agree or disagree with my views.

For those who has experienced the connection between sleep and self control and want to improve their sleeping habits, here is a link on How to Sleep Better.

Ok, time for me to get ready for bed.

Be Individual! Be on the edge...always

2011-09-11T00:45:00.003-04:00

In this society, most people blend in because that is what is easy and comfortable. Everyone wants to belong to a group (even those who claim they don't want to conform to a group belong to a group that "doesn't like conforming to groups"). But what is valuable (something/someone that creates real value) is not conformity and people who always stay within their comfort zone but rather those who push to their outer limits and test themselves by being always on the edge of failing. The ones who truly succeed are the one that actually push so far that they fall off the edge and fail but know that it is a necessary step if they always want to expand their potentials.

In light of the 10th anniversary of 9/11, where many people lost their lives due to no fault of their own, it serves as a painful reminder to not waste the time we have because we really do not know how much we have. I encourage everyone to

Live, Work, Eat, Sleep, Play, Read, Pray, Love on the edge.

Enough of the somber. Here is a video by an artist working on the edge (Perfect for fans of creativity, breakdancing and cinematography). Enjoy!

How to Think Outside of the Box - Blending In

2011-08-05T23:31:00.001-04:00

Here is some creative art that was sent to me recently that I thought was worth posting. It is really inspiring to see the out of the box ideas that people come up with and a good reminder that it hasn't all been thought of yet.

Artist Liu Bolin at the Supermarket

It took me a while to realize that these were all real people.

Financing Relationships - The Most Useful Type of Banking

2011-07-29T20:28:00.156-04:00

One of the reasons why I started this blog was my fascination with finding relationships between subjects that were seemingly unrelated and to connect them in a way that is relevant and thought provoking. I believe that almost everything is related in one way or another but to find a meaningful connection between topics that seem so exclusive from one another is always a treat.

One such connection is the relation between:

Basic Banking Principles and Successful Life Relationships

Who could have thought that one could use basic banking principles as an instruction manual for successfully managing our relationships. Let me give you some quick highlights into this interesting correlation:

1. Making Deposits: Most of the time, you can only take money out of the bank if you put money into the bank. This is widely accepted and is how most people do their banking. Now when it comes to relationships, if you just remember this simple principle of making deposits before your withdrawals, I am sure your relationships will grow just like the money you put in the bank.

Before I move on to the next banking principle, let me elaborate slightly to make the point more clear. Now deposits and withdrawals in banking are easily understood but what does it mean when I say a deposit or withdrawal in a relationship? Well, if you ever needed a favor from a friend, wasn't it always easier if you've helped that friend before? If you ever wanted your significant other to forgive you, wasn't he/she more willing if you've forgiven him/her in the past. I am sure you can find many of your own examples that can fit into this mold. Remember: Just like banking, overdrawn accounts are penalized heavily (think of the husband who comes home late one too many times).

Someone has bad credit

2. Credit: Bankers, especially during these tough times, will only lend money to those they deem credit worthy. Just like relationships, you are not going to get any more credit if you constantly take out loans and don't repay them back. We all know of people who have excellent credit and surrounded by others who are willing to go out of their way to help them and I am sure many of us have also known people who are constantly taking out loans on relationships who eventually build up such a bad reputation that no one is willing to help them anymore. If only the government would broaden the scope of their bailout...

You need to cross your fingers anytime
you are investing

3. Investments: Keeping your money in a savings account will usually yield less return than in an investment account but an investment account not only involves risk but also a lot of work. This is similar to when two people spend more time together and depending on what they are doing they can either make their relationship grow closer (positive return) or they can end up arguing and hurting their relationship (negative return). There are of course "safer" investments than others but there is always risk. When you are investing, you always want to remember that past returns do not guarantee future performance.

So what does this all mean. Well if you want to have successful relationships, just do exactly the things you would to have a nice and healthy bank account:

Make frequent deposits as often as you can
Don't take out loans unless you really need to
Invest carefully and diversify your portfolio

The Power of Choice - Liberating or Crippling Social Growth?

2011-06-23T21:04:00.001-04:00

I recently stumbled upon this video by RSA: Ideas and Actions for the 21st Century Enlightenment which I thought was very interesting. In addition to the unique method of animation, the message was thought provoking. The basic premise is that having the ability to choose is actually very crippling. Since there is always a loss of other opportunities when you make a choice, the fear of losing actually paralyzes people from making the best choice for both themselves and society. Enjoy!

The Shocking Truth About Poor People - Something for Nothing Syndrome

2011-05-25T23:26:00.001-04:00

There are many diseases out there in the world, but there none of them have affected as many people as negatively as the "Something for Nothing" syndrome.

Let's face it. No matter what some may say, almost all of us want to be rich and successful.

Now for some good news and bad news:

Good news: Anyone can become rich and successful as long as they can offer more value than what they get paid for. (that's it)

Bad news: Many people end up doing the exact opposite (myself included)

And the result is that most people don't end up where they want to be.

Before speculating why this happens, let's first look at some manifestations of the "Something for Nothing" syndrome:

1) The Lottery: We're all seduced by "a dollar and a dream" but every time I've bought a lottery ticket, I've been left with "an expired lottery ticket and disappointment". Trying to get $383 million with $10 is a bit far fetched but millions of people are still playing every day. The same goes for other forms of gambling such as blackjack, poker, roulette, stock market speculation, sports betting, etc.

2) Cheating: Top scores without studying; Ponzi Schemes (Madoff anyone?); Use of performance enhancing or weight loss drugs; The long term results are usually pretty poor.

3) Slacking off: People who try to do as little as possible in their jobs and find ways to get through the day doing nothing. (There are people who actually brag about their prowess in this)

The list can go on and on (even extreme bargaining is a form of this syndrome) but one thing all of these examples have in common is that most of the people engaging in such activities are NOT rich or successful. Go to any casino and look around you - what type of people do you see? Usually the low to lower middle class, trying to "make it". I would not be surprised if the same demographic made up the majority of lottery players. The same goes for the slackers and the cheaters, how many of them do you know have been able to sustainably become wealthy and successful.

Yes, there are cheaters, slackers and gamblers that get rich but the key word is "sustainable". At the same time the percentage of people with the "Something for Nothing" syndrome that do get rich is extremely small if any.

So why does this happen?

People are motivated towards pleasure and away from pain and the "Something for Nothing" syndrome appeals to both of these motivational directions. When you can obtain something without doing anything, you have gained pleasure without incurring any pain. Secondly, anyone who enjoys taking the easy way out or wants to be rich immediately will be prone to activities such as gambling because there is no other place where you can get a 100% return on your investment (if you can call it that) in less than a minute.

Unfortunately for those suffering from this syndrome, the natural law is that for every action there is an opposite and equal reaction so if you give nothing, naturally you will get nothing. On the other hand, if you give more value, you should receive more money in return.

Despite learning that "There is no such thing as a free lunch" in my first economics class more than a decade ago, I've been afflicted with this syndrome myself and only recently realized the power of being "valuable". I use to brag about working only a few hours a day, winning at the casino or getting a crazy bargain but now I realize that all those things have worked against me in becoming truly successful. I now constantly look for ways I can add value for my employer, friends, clients and loved ones and I have found life much more enjoyable.

Directions for being successful: Just add value.

Thomas Jefferson's Guide on How to Behave!

2011-04-03T19:29:00.003-04:00

Much like Poor Richard's Thirteen Virtues, our third president and author of the Declaration of Independence also had his own rules of conduct. Despite it being over 200 years old, many if not all of these ideas are still relevant today. I believe that taking advice from one of the founding fathers of this nation is never a bad thing.

Here are Thomas Jefferson's Rules of Conduct:

Never put off 'til tomorrow what you can do today (Very useful if you really want to get things done)
Never trouble another for what you can do for yourself (Self-help is the common denominator of all successful people)
Never spend money before you have it (We've all learned the value of this rule ... or have we?)
Never buy anything you do not want because it is cheap (Good response to Groupon, Living Social and any other deal sites that tempt you to buy things you don't really want)
Take care of your change; dollars will take care of themselves ("Sweat the small stuff")
Pride costs us more than hunger, thirst and cold (I think it is safe to assume we all know how expensive and costly pride can be)
We never repent for having eaten too little (I've never had a good feeling walking out of a buffet - also I hear those who eat less calories/day live longer)
Nothing is troublesome that one does of his own volition (Have a passion and you'll never be unfulfilled - what's mundane to one person may not be so to another)
How much pain has cost us the evils which have never happened (Stop worrying - you're just wasting energy that can be better used)
Take things always by their smooth handle (Always use tact and go for win-win outcomes)
Think as you please, and so let others, and you will have no disputes (Don't judge, everyone has their own truth and perceptions so respect that)
When annoyed, count 10 before you speak. If very annoyed, count 100 (Works every time, just try it)

The actual document from www.monticello.org

6 Laws of Persuasion (Part 6) - Scarcity

2011-03-26T10:38:00.005-04:00

Ever shop for flights online and see the tag "there are only 2 tickets left" or how about informercials that claim it is for a limited time only or that there are only X amount left.

Wonder why antiques are so expensive?

It all comes down to our last social influence in our 6 part series: Scarcity

Basic Premise

Things seem more valuable when their availability is limited.

Scarcity can turn garbage into prized possessions.
When you ban something, there is a loss of freedom which makes the banned item more appealing (teenage rebellion, prohibition and drugs).
Scarcity has a stronger effect when:

the item was previously abundant rather than being constantly scarce (look at the salt rush due to the nuclear incident in Japan).
people are in competition with other people for the item (auctions usually generate higher prices especially when there is more than one bidder).

How People Take Advantage of Scarcity

Long line for Chicken and Ginseng Soup

As mentioned in the introduction, sellers usually use a deadline and/or limited number technique where you better act fast before the few items left are sold out or before time runs out and you lose out on the special offer.

If you have ever bought real estate, you've probably experienced the sudden "unknown buyer" who has come in to bid for the same place you're bidding for. This is a perfect example of trying to create competition for the item.
Long lines at a restaurant or club also gives a sense of scarcity because it shows that there is only so much space and "everyone" wants to get in.

Best Defense

Realize that the joy is not in experiencing the scarce commodity but possessing it so you need to ask yourself why you want to own this item: Ownership or Utility? If for usefulness, remember that scarce things are no more useful than things in abundance.

Objectively evaluate the item for its real value and don't overvalue it simply because it is scarce.

Seemingly Useless Closing Remarks:

With this article we have concluded this 6 part series on Persuasion:

Reciprocity, Commitment/Consistency, Social Proof, Liking, Authority and Scarcity.

Writing these articles have furthered my awareness in the social influences that surround me everyday. I hope it will make you a better consumer just being aware of the various tactics your are bombarded with on a daily basis and on the flip side, provided you with a arsenal of effective tools you can use next time you need to persuade someone.

Feel free to leave comments on your thoughts about the article.

6 Laws of Persuasion (Part 5) - Authority

2011-03-13T22:35:00.009-04:00

Me: My lower back hurts.

Doctor: You need a MRI for that lower back pain.

Me: OK

How often do I just blindly obey doctors, policemen and other authority figures? Pretty much all the time (except when I was a teenager but I grew out of it). It is so natural for most people to willingly go along with an authority figure (See Milgrim's famous experiment) that it is the Part 5 in this 6 part series on persuasion.

Basic Premise

Adults are extremely willing to to follow the commands of an authority figure. This is so for a couple of reasons:

We are taught from when we are young that obedience = good behavior.
Mindless obedience is a decision making shortcut

Appearance of authority is usually enough: Titles, Clothing, Belongings, etc.

Compliance with small favors usually increases susceptibility to incrementally bigger favors.

How People Take Advantage of Authority

Ever watch commercials where an "expert" comes on to discuss the benefits of the product and to lend "false" credibility. Usually this expert is in a scientist's/doctor's coat.

Use of authoritative appearance to gain compliance: Uniforms, expensive suits, medals and other status symbol items (expensive cars, watches, jewelry, etc). I guess it really pays to look like a million bucks.

Best Defense

Ask yourself: Is this person really an expert? Are they honest?

Ask yourself: How truthful do we expect the expert to be here?

Separate the symbols of authority and status with the actual evidence of credible authority

Next Principle of Influence: Scarcity

6 Laws of Persuasion (Part 4) - Liking

2011-02-12T14:57:00.006-05:00

Why do companies hire sales people who are attractive, charismatic and courteous? Why are sales people always smiling, dressed well and complimenting you?

It is because they all want to influence you and they want to do it using the social influence of Liking (Part 4 of this 6 part series on persuasion.)

Let's examine how you can use this influence to your advantage and also how you can protect yourself.

Basic Premise

People respond positively to people they know and like (think of your friends)

As humans, we want people to like us so we are automatically inclined to like people who like us

How People Take Advantage of Liking

Good looking people are better liked and seen as possessing better personality traits and intellectual abilities. This is why companies hire attractive sales people and why good sales people always dress very nicely.

Even world leaders practice mirroring!

People like other people who are similar to themselves so one effective technique that many sales people or anyone building rapport uses is "mirroring", which means that they mimic the other person's gestures, body language, expressions, tones, etc. (You probably don't even realize this is happening)

Since people like others who like them, compliments are used to get on the "good side" of a client although this may backfire if it doesn't seem sincere.

Effective persuaders will build an "allies" approach because it creates more rapport. "The enemy of my enemy is my friend"

The more familiar you are with something or someone, the more you like it. This is why visibility in a company is important. Basically, you want to be seen frequently but only in a positive light. This is how persistent guys get the girl but remember persistence is only one part of the equation, the other part is that the girl needs to see you in a positive light during each encounter. (Also see my post titled An Insight into Attraction)

Humans usually associate the nature of news to the messenger (weatherman, "killing of the messenger") so good sales people associate themselves with positive things such as lunch and goodies (have you ever attended a pharmaceutical sales meeting?)

Best Defense

Be very sensitive to a quick or deep liking to a sales person (reflect on the sales person's behavior)

Separate the salesperson from the merits of what he is trying to sell

Seemingly Useless Commentary: As you are probably noticing, many of these influence principles are not difficult to use (and abuse). It is important to remember that these are tools and like a gun, they can be used for both good and evil (how cliché I know). It is up to you to decide how you want to use such information but one thing that can't be argued is that awareness already gives you a layer of defense against being influenced by these tactics.

Next Principle of Influence: Authority

6 Laws of Persuasion (Part 3) - Social Proof

2011-01-19T23:11:00.007-05:00

You've been there before. A crowd gathers and you can't help but walk over and before you know it the crowd is growing exponentially. In part 3 of this 6 part series on persuasion, we're going to look at one of the most powerful influences: Social Proof.

This is slightly related to "unconscious imitation" which I discuss in one of my earlier posts (Monkey See Monkey Do). Anyways, "no man is an island" and our need for social acceptance and belonging has been used against us probably too many time and in too many ways.

But like most of these influences, awareness is the first step to take back control:

Basic Premise

People determine what is correct by finding out and observing what OTHER PEOPLE think is correct (that's why laugh tracks were invented)
Looking to others provides us with a shortcut for determining how to act ESPECIALLY when the "others" are viewed as being similar (Showing shy kids films of other shy kids actively interacting with other children can have a powerful effect; On a more morbid note, the fact that suicide rates go up on highly publicized suicides)
This influence is also very powerful in unfamiliar or ambiguous situations (just think back to the last time you were in a foreign country or restaurant - this is why Yelp is so popular as well)

How People Take Advantage of Social Proof

"Everyone is doing it...Everyone owns one..." - It was known as peer pressure in my adolescent days but whatever it is called the good ol' Bandwagon effect exists because everyone wants to belong
Want to golf like Tiger Woods, Want to look like Brad Pitt or Angelina Jolie, Want to join our club? then (fill in the blank)- Who doesn't want to be cool or do what the "smart money is doing"?
As you can see, anyone that recognizes the power of this influence can take advantage of it by providing an environment where people act a certain way or needs to act a certain way in order to be accepted

Best Defense

Be firm in your own beliefs and instincts and be aware that others may be misinformed or may have a hidden reason for the action they are advocating

Try to think back to when "similar" people were doing the opposite and recognize that you are free to make your own choices

When joining any group (club, company, culture), remember that they may be susceptible to group think

Now that you are aware of this influence, recognize when social proof is being deliberately faked to achieve a certain purpose

Some Seemingly Useless Advice: For anyone in an emergency situation where a crowd is present, dispel the uncertainty of the crowd by pinpointing an individual and directly asking for help (i.e. "Call an ambulance", "dial 911", etc) . If you leave it up to the crowd, then if most people are not doing anything (bystander effect), most likely others will follow suit and if you have ever heard of Kitty Genovese, Hugo Alredo Tale-Yax or Simone Back, you know the results can be very tragic.

Next Principle of Influence: Liking

6 Laws of Persuasion (Part 2) - Commitment and Consistency

2010-12-12T22:31:00.014-05:00

In the last post, we saw how someone can completely influence another by giving a small gift and requesting a disproportionate favor in return. In part 2 of a 6 part series on Robert B. Cialdini's six principles influence ("You've Been Had - the Power of Persuasion" article), we'll see how something as innocent as trying to be consistent can make you susceptible to influence.

Basic Premise

People fool themselves in order to keep thoughts, attitudes and beliefs consistent with their words, decisions and actions.

Hypocrisy is shunned by society - (e.g. Eliot Spitzer)

Consistency provides a heuristic short cut for complex decision-making - (e.g. Judicial Precedents - what did we do before)

How People Take Advantage of Commitment and Consistency

Toy stores "sell out" of the hottest toys but then overstock after the holiday season to trap parents who promise to buy their kids the "hot" toy while also buying them a "substitute" toy during the holidays

Expert salesmen start by obtaining small commitments and then building on these commitments: change a person's self image and his actions will follow

Those who go through a great deal of pain to obtain something tend to value it more than those who attained the same thing without effort (e.g. military/fraternity hazings) thus

Commitments are most effective when they are ACTIVE, PUBLIC, EFFORTFUL and MADE FREELY -> Personal responsibility makes it difficult to refuse a request consistent with your commitment (e.g. Person committed to fight AIDS will donate time and money to AIDS charities in order to remain consistent with his commitments)

People may become stuck to their initial commitment despite changing conditions and act contrary to their own best interest

Best Defense

Trust your gut instinct: Don't be pressured to accepting requests for something that you don't want to do, no matter how small or inconsequential the commitment may seem (e.g. signing a petition or putting a politician's sign on your lawn)

Ask yourself this one question: "If I could go back in time, would I make the same decision again?" - Use this when you feel that you may be acting "foolishly" consistent.

Next Principle of Influence: Social Proof

6 Laws of Persuasion (Part 1) - Reciprocity

2010-11-17T17:31:00.016-05:00

Ever wonder why anyone that is ever selling anything is always giving something small away for free or how a "random" gift is usually followed by a request? Well look no further, in the first of Robert B. Cialdini's six principles influence ("You've Been Had - the Power of Persuasion" article), we'll see exactly why this happens.

Basic Premise

People feel indebted to others when they receive something from another person - "I scratch your back, you scratch mines"

Those who do not reciprocate are seen as "takers" and suffer social disapproval as being greedy or selfish

How People Take Advantage of Reciprocity

Unequal exchanges where someone gives a small gift but asking for a substantially larger favor in return - Ever get a free T-shirt but had to sign up for a credit card with an annual fee

Most people take advantage by choosing both the indebting first favor AND the nature of the debt canceling favor

Compromise => Concession Process where you make an extreme request first (one that is likely to be rejected) and then after the refusal, "conceding" to the smaller but actual intended request. "Heads I win, Tails you lose"

Best Defense

Realize that there is no need to repay tricks/sales schemes with favors

Be prepared to reject favors, concessions and offers no matter how small

Next Principle of Influence: Commitment and Consistency

6 Laws of Persuasion Series (Part 0)

2010-10-17T16:54:00.020-04:00

One thing that most people strive ardently to avoid is being "taken in". No one wants to be manipulated but yet so many people (myself included) are secretly influenced all the time.

Whether it is shopping at the supermarket, negotiating a contract or deciding where to go on vacation, we are bombarded by persuasion techniques that we are not aware of.

So how can we protect ourselves? Well, learning and recognizing the principles of influence may provide a good starting point.

Robert B. Cialdini is a world famous psychologist who has extensively studied influence. He categorizes influence into six principles (click on the links for each principle):

1) Reciprocity

2) Commitment and Consistency

3) Social Proof

4) Liking

5) Authority

6) Scarcity

When I first read this book, it really opened my eyes to how often I am hit with influence tactics. Some of this stuff is intuitive but it helped to know what each tactic is and what I could do to protect myself. Over the next 6 posts, each of these principles will be defined and put into a context that you can recognize along with ways to defend yourself against such tactics.

As we go through these principles, remember that there is a fine balance between cynicism and gullibility. I personally believe it is no fun going through life distrusting others but it is up to you to decide what is best for you.

Recommended Reading: Influence: The Psychology of Persuasion by Robert B. Cialdini

How to Define Success

2010-10-13T16:04:00.002-04:00

Success is what you make it to be. When you don't have a dream, you end up taking on someone else's dream. If you ever needed a template for success, Mr. Emerson provides a good starting point (remember - you need to create your own)

"To laugh often and love much;

to win the respect of intellingent persons and the affection of children;

to earn the approbation of honest citizens and endure the betrayal of false friends;

to appreciate beauty;

to find the best in others; to give of one's self;

to leave the world a bit better, whether by a healthy child, a garden patch or a redeemed social condition;

to have played and laughed with enthusiasm and sung with exultation;

to know even one life has breathed easier because you have lived - this is to have succeeded."

- Ralph Waldo Emerson

I Know You (Yes, YOU!)

2010-09-17T11:39:00.024-04:00

Because you are on this blog and specifically taking the time to read this article, I have accurately predict your personality

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Your Unique Result:

You have a great need for other people to like and admire you. You have a tendency to be critical of yourself. You have a great deal of unused capacity which you have not turned to your advantage. While you have some personality weaknesses, you are generally able to compensate for them. Disciplined and self-controlled outside, you tend to be worrisome and insecure inside. At times you have serious doubts as to whether you have made the right decision or done the right thing. You prefer a certain amount of change and variety and become dissatisfied when hemmed in by restrictions and limitations. You pride yourself as an independent thinker and do not accept others' statements without satisfactory proof. You have found it unwise to be too frank in revealing yourself to others. At times you are extroverted, affable, sociable, while at other times you are introverted, wary, reserved. Some of your aspirations tend to be pretty unrealistic. Security is one of your major goals in life.

How accurate would you consider this personality prediction? (Scale from 1 - 5 with 1 being Dead Wrong and 5 being Right On)

Crazy, right? How did I know?

As much as I would like to take credit for the analysis and offer you future insights for $4.99, I must give the credit to Bertram R. Forer. He was a psychologist and in 1948 gave a personality test to 100 students and told them that each will receive an unique analysis of their results. After distributing the results, he asked the 100 students to rate the accuracy of the results (1 being inaccurate and 5 being very accurate) and the avg rating was 4.26.

So what? Well, the thing was that each student received the SAME analysis which just happens to be the exact same one you read at the beginning of this article.

You my friend has just been a sucker of the "Forer Effect" but don't worry "there's a sucker born every minute" (PT Barnum).

Forer Effect - individuals will give high accuracy ratings to personality descriptions that are supposedly made specifically for them, but are in fact vague and general enough to apply to a wide range of people

Other similar experiments have found higher accuracy ratings are given if:

the subject believes that the analysis applies only to him or her
the subject believes in the authority of the evaluator
the analysis lists mainly positive traits

To be candid, the first time this unique analysis was made for me, I gave it a 4.5 in accuracy. I guess that's why we still have fortune tellers, psychics and astrologers out there making a living.

You can find the full research report here.

Get Smart! Get Advice from the Greats

2008-11-27T21:39:00.014-05:00

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.

What a Pile of Sand Can Teach Us about the Stock Market

2008-09-01T16:15:00.002-04:00

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.

Ben Franklin's Top 13 Tips for Success in Life

2008-07-19T00:35:00.006-04:00

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

2008-07-07T17:11:00.003-04:00

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

2008-06-13T00:42:00.003-04:00

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

- from Consilience by Edward O. Wilson

How I Became Healthy Update Part 3 - Transformation

2008-05-30T17:32:00.016-04:00

It has been about three months since I started to change my eating habits in accordance with my self-designed Seemingly Useless Diet and I have decided to provide yet another update (The first and second update and the Seemingly Useless Diet FAQ can be found here).

I have lost about 20 pounds (12% of my body weight) and I am definitely much leaner. I have managed to lose mostly body fat without sacrificing muscle strength. This is confirmed not only by the physical appearance of my body but also the fact that I can lift more weights and perform more intensive cardio workouts than before I started this diet. I still have not had any problems staying away from deep fried foods, junk foods, pork and candy. I believe this is due to the psychological approach mentioned in the Seemingly Useless Diet article.

Also my yearly checkup has shown that I am the healthiest I have ever been with very good levels for cholesterol and blood pressure. I was initially afraid that I would not get enough nutrition but I am actually at healthier levels for the necessary bodily vitamin levels.

I think the key point is focusing on what you CAN eat rather than what you CAN NOT eat. It is much easier to compile a list of things you should stock in your fridge and pantry and then stock only those things than to always have to choose and put your willpower to the test. Any food that is not on the "approved" list, should not be considered as food anymore. Would you put anything but gasoline into your car?

Dieting is not hard and I think there are many ways to get there. The key point is do you really want to get there.

The Big Secret: You CAN Achieve More by Doing Less

2008-05-27T23:57:00.004-04:00

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

Can We Really Trust Ourselves? Monkey See Monkey Do

2008-05-19T17:56:00.010-04:00

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

2008-05-16T17:08:00.003-04:00

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

Warning: Relieving Stress CAN Hurt - The Cost of Stress Relief

2008-05-13T23:20:00.011-04:00

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

The One Skill Everyone Should Use

2008-05-09T14:14:00.014-04:00

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

The Truth about Complexity - A Necessary Evil

2008-05-06T00:24:00.009-04:00

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

Why the Rich is Getting Richer

2008-05-02T00:32:00.010-04:00

"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

2008-04-27T18:18:00.011-04:00

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.

Warning: We're Running Out of Water - The Scarcity of Life's Essence

2008-04-23T11:17:00.028-04:00

"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

How to Take Charge of Your Learning

2008-04-19T00:05:00.007-04:00

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

2008-04-16T23:56:00.008-04:00

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

2008-04-13T19:00:00.014-04:00

"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

How I Became Healthy Part 2 - Race vs. Life Expectancy

2008-04-07T22:57:00.012-04:00

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

2008-04-05T00:58:00.011-04:00

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

2008-04-02T17:45:00.007-04:00

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

The Art of Relaxation - "Fang Song Gong"

2008-03-30T00:04:00.009-04:00

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

2008-03-26T23:19:00.016-04:00

"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 Two Mistake Great Nations Always Make

2008-03-23T13:27:00.017-04:00

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

2008-03-21T16:20:00.021-04:00

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

How I Became Healthy FAQ and Update

2008-03-19T00:18:00.011-04:00

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.

March Madness for Cornell

2008-03-18T11:58:00.005-04:00

Congratulations to Cornell Big Red Men's Basketball for their 14 game winning streak and winning their first bid to the NCAA Tournament in 20 years. Good Luck!

To LASIK or Not to LASIK

2008-03-15T14:13:00.014-04:00

The popularity of LASIK (Laser-Assisted in situ Keratomilieusis) eye surgery has been increasing dramatically. I have a few friends who have already gotten the surgery with many others considering the option. Since so many people were looking into LASIK and with the bombardment of LASIK advertisements over all media, I naturally assume that it was a safe and even recommended procedure for those with poor eyesight but during a conversation with a good friend, who is a medical student specializing in ophthalmology, I was made aware that LASIK may not be such a great option.

First things first, what is LASIK? It is a special laser that PERMANENTLY RESHAPES THE CORNEA to change its focusing power to correct for refractive errors. The surgery is performed by first creating a flap on the corneal tissue then remodeling the cornea underneath the flap by removing layers of the cornea using the laser. The procedure ends with repositioning of the flap.

The basic gist of our conversation was that although LASIK can be effective, the risk-reward factor may not make it such an attractive option. LASIK corrects eyesight by removing parts of the cornea so naturally the procedure is irreversible. Once a piece of your cornea is gone, it is gone forever. Most people get LASIK because they do not want the hassle of wearing contacts or glasses, but what most people are not aware of is that as they age, their visions will naturally worsen (presbyopia) due to changes in the lens (not the cornea) of the eye. Therefore, even if you get LASIK, you may be needing glasses before you know it again (time also tends to move much faster as people get older). Some complications of LASIK eye surgery are dry eyes, halos or glare at night, double vision, infection under flap, induced astigmatism and uncorrectable vision loss. Also, since LASIK is a fairly new procedure (first LASIK laser approved by the FDA in 1998), it is not possible to know of the long term implications and effectiveness thus making the procedure even riskier (it is possible that in 50 years, all LASIK patients experience vision loss). With the many serious complications and risks of surgery paired with the fact that your glasses/contact free lifestyle may be short lived, one really needs to seriously consider whether or not to get LASIK.

Here is my take on LASIK surgery with a simple Pros vs. Cons comparison:

Pros - 1) Improved Eyesight - No More Glasses, Contacts, etc.

Cons - 1) Costs (It's expensive), 2) May Still Need to Wear Glasses/Contacts After Surgery, 3) Irreversible Procedure, 4) Long Term Effects and Complications are Unknown, 5) If Complications Occur, they are Usually Very Serious.

Personal Conclusion: I would not get LASIK. There are too many serious risks when compared with the reward of short term glasses/contact-free living. Without long term studies, you're essentially volunteering to be guinea pigs at the uncertain cost of your vision.

Like LeVar Burton from Reading Rainbow would say: "But you don't have to take my word for it" - Please understand that the information in this article is not complete and for something as serious as your vision, you should perform your own due diligence and get evaluated by a GOOD physician. Different people have different needs especially when it comes to vision.

For those seriously considering LASIK, my friend has been kind enough to create a checklist for you.

How Do You Know If You Are A Good Candidate For LASIK?

1. How important is it to you to be out of glasses? If it is very important, you may want to consider LASIK

2. Can you accept the risks of surgery including complications and possible need for additional surgeries and physician visits?

3. How old are you? As everyone reaches their forties, they will become presbyopic and will need to use reading glasses. Is this method acceptable to correct your distance vision now and need reading glasses in the future? Or would you rather keep your vision the way it is now and not need reading glasses in the future (this only applies to low myopes). Or do you want to be corrected for monovision (one eye corrected for distance vision, one eye corrected for near vision) by LASIK? If so, you should do a trial with contact lens first to see if you can tolerate monovision.

4. Do you play contact sports? If so, there is an increased risk.

5. Do you have visually demanding tasks? Will your occupation allow for LASIK (Ex. military, etc)?

6. Can you afford LASIK? Most insurance companies will not cover the procedure.

7. Do you have refractive instability?

8. Do you have dry eye (which can worsen with LASIK, usually temporary)?

9. Do you have any disease that affects wound healing, are you on steroids?

Ask Your Doctor If You Are A Good Candidate For LASIK And Find Out:

1. How large is your refractive error? If you have very large refractive error, the doctor may not be able to correct fully your prescription.

2. Do you have thin corneas?

3. Do you have history of or active corneal disease?

4. Do you have large pupils?

5. Ask your doctor to do a topography (to measure the corneal curvature)... and you should be out of your contact lens a certain amount of time and then have the test repeated.

Choosing The Right Doctor

1. Choose the doctor based on experience not on cost or advertising.

2. Choose a doctor who can do other types of refractive surgery such as PRK (photorefractive keratectomy), so they will be able to choose the best procedure for you, not just LASIK.

Final Advice:

1. Know if you are a good candidate for LASIK- both for yourself and from your doctor.

2. Know all the risks and benefits of the procedure. Read information on the web and read all the fine print in the consent form.

3. Go to a good ophthalmologist with lots of experience.

4. LASIK when done properly in good candidates is an excellent procedure and can improve uncorrected visual acuity.

Recommended Readings:

An informative websites concerning LASIK:
FDA Website on LASIK

For those with complications looking for support:
Complicated Eyes
Vision Surgery Rehab Network

For those who found this article informative and have friends/family considering LASIK, please feel free to send them the link for this specific article:
http://seeminglyuseless.blogspot.com/2008/03/to-lasik-or-not-to-lasik.html

Seemingly Useless Recommendations

2008-03-15T11:56:00.003-04:00

I have created a new page associated with Amazon.com with all the Recommended Readings and Interesting Items that I have mention in the articles. Check it out here.

Personal Finance Tip #1 - Credit Cards

2008-03-14T00:00:00.007-04:00

One thing I realized after I graduated from university was that I knew nothing about money. I didn't understand interest rates, the stock market, mortgage rates, credit card APR and all that other fun stuff. After reading several personal finance books, it was clear that my schooling provided me with very little education in this very important topic. Unlike our carefree days under our parents' bank account, our decisions now will directly affect our financial futures. Sometimes the damage may be irreparable so I have decided to start a personal finance series.

Credit cards - these magical cards that just "gives" you money to spend and all you have to do is sign up - sometimes you even get a free t-shirt or water bottle. Although personally I have never gotten into credit card debt, I know many friends who have and I see the immense struggle they go through to try to get out. Credit cards are enticing because you can spend $1000 now but only have to pay the minimum $25 a month. What they don't tell you is at 18% interest rate (which is a low rate for most cards), it will take you 153 months to pay off your debt paying only the minimum. What is worse is that the total interest you pay comes out to $1,115.41 which is more than the original amount you borrowed ($1000 becomes $2115.41). Knowing this it is NEVER good to leave a balance on a credit card (unless it is a zero interest rate card).

One of the obvious rules for good personal finance that is rarely followed is to SPEND LESS THAN YOU EARN. If that rule is followed, one will never get into credit card trouble because you will always have the money to pay off the balance. It never makes sense to leave a balance on a credit card because the interest rates are so high. In the aforementioned example, $1000 used now can cost you an extra $1,115.41 (18% interest rate) 153 months later, and this is assuming that you don't buy anything else using the credit card. At high interest rates, it is very easy to fall down the slippery slope of credit card debt. NEVER use the credit card for cash advances unless it is absolutely necessary because the interest rate for cash advances is usually higher than the interest rate for the credit card. Many unwary credit card users who overspend or take frequent cash advances find themselves in a mountain of debt that may take their whole lifetime to pay off.

Despite all the bad publicity, credit cards are actually very useful and healthy for your personal finance well being. They are a good substitute for cash because most restaurants and stores accept credit cards so you don't have to carry a lot of cash, which helps to limit losses if you lose your wallet or purse. In some cases, using credit cards can be faster than using cash - no need to get change. Using credit cards is also a good way to earn money because every month, you obtain an interest free loan which means your cash can be yielding an extra month of interest in a savings account. Many credit card companies provide good customer support if there are any issues with the products purchased. Frequently using credit cards not only helps to build your credit rating but is also a good way to keep track of what you spend your money on. Most credit cards provide a year end summary of all your spending broken into categories such as food, gas and restaurants. All these good qualities to credit cards are only helpful if you pay off your balance on time every month.

Here are some things to look for when finding the "right" credit card:

1) Is there an annual fee? Make sure you are aware of the annual fee of the credit card. This fee is charged whether or not you use the card. Unless you really like a specific card, look for one with no annual fee. Also beware of cards that advertise no annual fee for the first year, which usually implies a fee in subsequent years.

2) What are the rewards? Is it cash, points or frequent flyer miles? With tons of credit cards out there, it does not make sense to choose a card with no rewards.

3) Does this card suit my needs? Usually cards with rewards and perks carry high interest rates which are good for those who diligently pay off their balance fully. Those looking to build credit or looking to pay down credit card debt relatively quickly may opt for zero-or-low interest rate cards. Student cards usually allow students with no credit rating to qualify for a card, although in inexperienced hands, this may lead to disaster. There is a card for everyone's needs, so do your research.

4) What are all the details of the credit card - fees (cash advances, over the limit), penalties, grace periods, APR and interest rates? If you pay your balance in full on time every month, you don't really have to worry too much about these things. If you don't intend to pay off your balance fully every month, you should be aware of some of the fees. If you only intend to pay the minimum balance - Don't get a credit card.

5) Where is this card accepted? Visa and Mastercard are usually accepted worldwide. American Express and Discover are relatively not as popular.

The credit card that I prefer to use is: American Express Blue Cash
I also have: Chase Freedom Mastercard

Useful site that compares credit cards - http://www.creditcardguide.com/

Scared to Lose? What Are You Afraid Of?

2008-03-12T23:46:00.015-04:00

For some reason, most people are scared to lose. Perhaps it is an ego protecting defense mechanism or maybe we're afraid of what others might think of our losses. This phobia mainly occurs when someone becomes too emotionally attached or focused on the outcome. Although it is true that no one enjoys losing, disliking loss is quite different from being afraid to lose. Losing is an outcome, being afraid to lose is a mindset that usually leads to poor performance which culminates into a losing outcome.

How many people do you know who despite expressing desire to approach an attractive member of the opposite sex, does not do so or takes a long time to get the courage to approach that person and when he/she does he/she comes off like a stuttering mess. This is a good example of how being afraid to lose can affect your performance. The worse case scenario here is rejection yet many people blow this outcome out of proportion and suddenly it becomes an unwarranted fear of public humiliation which in turn leads to poor self confidence. In reality, no one will laugh at you for being rejected but when you focus on the outcome, it somehow always transforms into a life or death situation. Those who take rejection for what it is usually fair much better with the opposite sex because they come off as confident and if they do get rejected, they are able to move right on to their next target.

A second example of being scared to lose is when No Limit Texas Hold 'Em players only cash the minimum buy-in for ring games. Strategically it is more advantageous for them, granted that they are decent players, to have as much money on the table as possible so as to maximize winnings when they have a good hand but instead of focusing on winning, they are focused on not losing and playing defensively so with a smaller buy-in they would limit their loss if they went all in. In essence they are scared to lose their money and this in turn usually affects their performance as they are easily bluffed, reluctant to make a move, or win very little when they actually do get a hand. Not exactly a formula for success.

The fear of losing is also very prevalent in all levels of athletic competition ranging from Little League to the Olympics. As aforementioned, the fear of losing stems from being too attached to the outcome of the competition. Instead of being aggressive and confident, the person that is afraid to lose becomes defensive. A good example is a team that obtains a comfortable lead but then completely changes their normal way of play to "protect the lead" as opposed to playing their best game to win. This usually leads to a loss of the lead and in most cases an eventual loss of the match. Heartbreaking indeed.

The final example concerns stock investors/traders. Many people invest and trade in the stock market with a natural apprehension for loss. Despite doing sound research and picking good stocks, the fear of losing causes investors to sell out of their winning positions despite not reaching planned targets or stop losses. This leads to a damaging cycle of taking small losses without taking any big winners. Similar to an athletic team who loses its aggressive stance by playing defensively to "protect the lead"; day traders that are having a good the day who size down or cover positions for fear of losing money are only hurting themselves. They are no longer focused on the process of trading but rather the outcome (Read more about the dynamics of process vs. outcome in this previous post). For those who are too lazy to read another lengthy article, basically that post concludes that process dominates outcome in the long term. Many investors and traders are so obsessed with winning that they are happy with a higher win ratio versus higher net revenue. In other words they would rather win in more trades and make less money than win in fewer trades but make more money. Such an obsession leads to the devastating practice of holding on to losing trades on the hopes that they reverse into winning trades. This is the exact opposite of the proven successful investment strategy to let the winners ride and to cut losses short.

There are many other examples but now let's focus on conquering this malignant phobia:

Ways to Overcome Your Fear of Losing

Build Up Your Self-Confidence by Constantly Improving Your Skills and Strategies - Athletes should train hard in their sport and Investors should develop a sound strategy for both stock picking and money management.

You Have a Choice - Focus on Your Performance and NOT on the Outcome - when one tries too hard to achieve something because there are too attached to the final outcome, it usually leads to poor performance. This ends up chasing away the very things you want to accomplish.

Keep Things in Perspective - Losing money, failing a test, losing a match and getting rejected are not the worse things in the world. There are those who are far worse off and situations that can . Don't treat every outcome as a life or death situation.

Accept Losing as Part of the Game - All great athletes, traders/investors and poker players know: You win some you lose some. That's the way it is. It is the Yin and the Yang. But as long as you focus on improving your strategy and abilities, the wins will easily outweigh the losses, in the long run, if not in number then definitely in magnitude. Josh Waitzkin, child chess prodigy and Tai Chi Chuan champion, devotes an entire chapter in the Art of Learning to investing in loss.

I have to admit I am guilty of all four examples above and the one thing that I have always observed to be true is: The more you try to do something the more likely you'll fail (Trying hard to keep a relationship, trying hard to find a job, trying hard to make money, trying hard to find missing keys, trying hard to find a partner, etc). I am not telling you to not try but rather to not over-try. I think most people try too hard when they put too much emphasis on the outcome and not on the process.

Feel free to share your own experiences or solutions to being scared to lose in the comments section.

Recommended Reading - Developing Mental Toughness by Graham Jones and Adrian Moorhouse, Engineering Psychology and Human Performance by Christopher D. Wickens and Justin G. Hollands

How I Became Healthy Part 1 - A Psychological Approach

2008-03-10T00:22:00.021-04:00

After writing two articles (Corn Oil for the 21st Century and Culprits of the Modern Plague) concerning the global food crisis and the obesity epidemic, respectively, I felt it prudent to change my own eating habits. Although I am not overweight, I have an extremely bad diet consisting mainly of greasy spoons, junk snacks and sugars (candy and soda). The worse part of my diet is not what I eat but what I don't eat - fruits and vegetables. Since I will be going from one end of the diet spectrum to the other, overhauling my diet will be very tough but I think I have come up with an interesting and novel approach to achieving this extreme diet makeover. I believe this method can be easily applied to those wanting to change their diet for weight loss, muscle building or health reasons.

Quick Note: When most people use the term "diet" they usually refer to something temporary to achieve their short term goals (summer beach body, upcoming competition, reach a certain desired weight, etc) but I want to emphasize that I will be changing my eating habits permanently so as to lead a healthier lifestyle. With 70% of adults over the age of 60 suffering from heart disease (Culprits of the Modern Plague), a healthy looking exterior does not always equal a healthy interior.

First step is to figure out how you want to change your diet. This is easy since there are a ton of resources recommending various foods, complete diet programs and nutritional statistics. Here are the guidelines for my new diet plan:

Eat more nutrient dense foods but less calories (discussed in Corn Oil for the 21st Century) - a good list can be found at The World's Healthiest Foods website

Completely stop eating deep-fried foods, candy and chocolate bars.

For meats, eat very little pork and beef and stick to lean skinless chicken and turkey.

Add a lot more fish (salmon, tuna, cod) and flax to my diet (Omega-3 fatty acid).

Attempt to eat SIX meals a day about three hours apart with most meals containing some type of fruit and protein.

Take a multivitamin

Drink more water and a lot less soda and other artificial juices.

Read nutrition labels of all foods and avoid foods with any trans-fat or saturated fats.

Remember this is my own personal diet plan customized for my lifestyle and may be completely different from other more publicized diet plans. I am not here to recommend any particular diet plan so do some research and choose a plan you like.

Now for the extremely hard part - Actually sticking to this diet and beating my addiction to unhealthy foods. Most people go from diet to diet hoping to find one to help them lose weight but very little people actually lose weight and keep it off. This is mainly because the popular approach to dieting is focused on the wrong things. Perhaps they are purposely designed to fail so dieters can keep the "dieting industry" in business by constantly buying into new products or fads. There are innumerable amounts of books, programs, pills, shakes and fat camps dealing with dieting. Almost all these items (I can't rule out exceptions) are constructed for failure because they are asking people who most likely don't have much will power and self control to use their will power and self control to change their eating habits. No wonder so many people fail. Even those that do have strong will power and self control eventually fail because pure motivation only takes you so far.

What a bleak outlook for my diet overhaul! Luckily I think I have found a new approach to all this dieting hoopla and it can be yours for $159.99 (just kidding!). Although if you find this approach useful, please help promote this site to everyone you know. So here goes:

Seemingly Useless Diet - A Psychological Approach

A Brief History - This idea came to me as I recounted some of my least favorite foods since childhood - plain milk, fish (especially fish skin) and tofu. Even to this day I can not drink plain milk without some type of gag reflex, although if you mix that same milk with chocolate syrup it goes down just fine. Although I don't gag when I eat fish or tofu, I always try to steer clear whenever possible. What is interesting is that obviously I can drink milk (with chocolate) but somehow my body has a powerful automatic negative response when the milk is plain. This very real physical reaction to plain milk is a result of psychological trauma that I received as a small child. When I was in first grade, the public school I went to provided a small milk carton along with lunch everyday. I was always fine drinking plain milk until one day when I drank the milk and found some "solids" in the milk causing me to promptly heave my lunch. It was one of the most traumatizing food moments in my life and after that day, I refuse to drink milk altogether. It wasn't until high school that I began drinking some chocolate milk as an alternative to taking calcium pills. I have similar traumatizing stories for fish and tofu but I'll spare you the details. I am telling you this because psychological traumas have a very strong effect that is automatic and uncontrollable. This is the basis for the Seemingly Useless Diet.

How and Why it Works - So by now you can guess that we will be using psychological means to achieve the eating habits that we want. The main focus of this approach is to psychologically traumatize you to unhealthy foods. This can be done very effectively through visual and auditory imagery. When you stop eating unhealthy foods, you will automatically eat healthier foods when you become hungry. The reason why we love unhealthy foods is because of all the marketing these snack companies do that have already programmed our subconscious to crave such junk (Oreos and Milk, Break me off a piece of that Kit Kat Bar, Doritos' many commercials). You rarely see a commercial for celery or other health foods. In addition, most diets focus on telling you what to eat while leaving unhealthy but tastier alternatives out there to tempt you. What this method hopes to accomplish is to not only remove all the unhealthy foods from your cravings inventory but to place them in your undesirable food list. The brain is a very powerful organ and using it the right way can achieve very effective results. My disdain for milk is testimony to the brain's effectiveness. Since that one childhood incident, despite many positive imagery for milk, I still try to avoid it if I can. It doesn't take any work for me to dislike milk, it is all subconscious and automatic.

How to Apply this Method- Now that we've gone over the history and theory of this Seemingly Useless approach, here is the way to practically use this method:

Choose one of your favorite unhealthy foods (Potato Chips)

Choose something you find utterly disgusting (Cockroaches)

Create a very detailed situation in your mind engaging all five senses where you associate your favorite unhealthy food with something disgusting (Imagine a scene where you are eating potato chips and suddenly you realize you were actually chewing on a cockroach -> imagine the crunching sound as the hard shell of the cockroach breaking apart (nasty...) -> then think about how the potato chip crumbs feel like cockroach body parts (Wow, I think I just quit potato chips just by writing this imagery out) -> think about how pasty your mouth feels filled with cockroach guts)

Constantly review the image you just created and make the situation as detailed and senses oriented as possible. What might be more powerful is to actually eat the unhealthy food you want to quit while imagining your newly constructed highly traumatizing situation, then immediately spitting out the food or even forcing a gag reflex (not recommended). I think it is sufficient to just imagine the entire scenario in your head without having the actual physical stimulus. It'll also be more cost effective since you don't have to go spend money on food you're going to just throw away.

Move on to your next favorite unhealthy food and repeat.

If you achieve positive results, recommend this site and article to all your friends.

So far this method has really worked for me. The most important things to remember are to be VERY DETAILED, USE VIVID IMAGERY and to ENGAGE ALL FIVE SENSES. Get creative and really gross yourself out. Make sure to choose something that really makes you want to gag.

Here is another example: Imagine the cream filling of Twinkies actually coming from the liposuction surgery fat of obese people (Google Image Search- liposuction fat). Think about the texture of the cream filling and eating the Twinkie and vomiting all over the place. (Get the point?)

Now that you've associated most of your favorite unhealthy foods with very disgusting stories, it will be much easier to focus on the stuff you can eat when you do get hungry. Contrary to popular belief, there are very good tasting health foods out there. With a good list of healthy foods along with self inflicted "psychological trauma" on existing unhealthy cravings, we should be en route to reaching our desired eating habits. Good luck to the both of us.

I have included a new section on the sidebar of this blog called: Seemingly Useless' Healthy Alternatives where I will be taking my favorite unhealthy foods and finding the healthy alternative for that food. If you know of any healthy alternatives to popular junk foods, please post it in the comment section or email me at seeminglyuseless@gmail.com

Recommended Readings: The Grapplers Guide to Sports Nutrition by Dr. John Berardi and Michael Fry

To Be a Success...

2008-03-06T18:37:00.016-05:00

...one needs to study successful people. With today's release of the Forbes List of Richest People (Warren Buffett at #1), I thought success would be an appropriate topic of discussion. Since success is defined by Merriam-Webster as "attaining something desired or intended", it is necessary for one to define what they desire or what they intend. For some, it is usually the conventional - wealth, eminence or favor - but for others it may be something else. Regardless of what your personal measure of success may be, here is a list of traits consistent among long term successful people (based loosely from William J. O'Neal's 24 Essential Lessons for Investment Success) that will help you achieve success in all you do.

Ten Traits of Successful People (in no specific order):

1) Positive Thinking - Successful people are optimistic with all their endeavors and they always keep a positive attitude - Success is good but failure is even better because one can learn much more from failure. Any outcome results in something worthwhile. This type of thinking helps to breed confidence and high self-esteem.

2) Making Conscious Decisions Regarding What They Want - If you don't know what you want or what you're going after, how can you possibly succeed. It is like trying to win a race not knowing where the finish line is. Leaders always have a specific goal in mind and they map out the shortest route to achieve it.

3) Realizing Goals are Nothing without Action - So what if you have a clear goal if you don't do anything to try to achieve it. Nothing is going to happen if you don't do anything about it. No one is going to just hand you money, a powerful position or a successful business. You need to actively pursue your goals as opposed to just talking about them. Many people come up with great ideas but only a few people follow these ideas through with action.

4) NEVER Stop Learning - Successful people are always curious and want to learn everything about everything. The more you learn, the more you have in your arsenal of ideas and perspectives. This will not only allow you to empathize with people of different backgrounds but also give you an open-minded thought process. As mentioned in the Chemistry of Learning post, the more things you learn, the easier learning new things will be.

5) Being Persistent and Working Hard - Persistence is essential because the road to success is painted with failures and persistence is what changes present failure to future success. Hard work is obvious. You reap what you sow. Successful people recognize the value of meritocracy so they work hard, play hard, rarely complain and expect above average performance from themselves and others.

6) Analyzing Detail, Seeking Out All the Facts, and Being Decisive - Successful people pay extreme attention to details and do their due diligence. They surround themselves with competent and responsible people and know every aspect of their goals, plans and businesses. Once all the facts are collected and analyzed, they do not hesitate to act.

7) Focusing Time and Money - Those that are successful know how to manage their time in order to juggle their numerous tasks and activities. They focus on the present because that is what they can control while keeping their peripheral vision on the future. Successful people don't like to waste time dwelling on the past and what "could" have been. Good money management is also common amongst successful people; they spend their money with a purpose and don't mind paying for quality. Successful people understand that there is a "tuition cost" for all learning experiences. For example: losing money when you first begin investing, paying for seminars and conferences to learn more about a specific industry and to network or losing your initial investment on your first business venture.

8) Being Able to Do Things Differently and Taking Risks - Successful people are very curious (Trait #4) and constantly try to innovate and challenge the status quo. They have the uncanny ability to see new possibilities and opportunities where others see roadblocks and difficulties. Successful people also have no problem sticking their necks out and taking risks because 1) they are confident in what they do and 2) they are not afraid to fail. Reward is directly proportional to risk thus the more risk taken the bigger the reward received.

9) Communicating and Dealing with Others Effectively - People who are continually successful are masters at networking. They know multitudes of people from all walks of life. I'm not talking about acquaintances and exchanging business cards. Successful people cultivate meaningful relationships with all those around them and value these people and relationships. This extensive quality network provides excellent reliable support in any situation. The ability to communicate and deal with others effectively is often associated with being charismatic.

10) Achieving Long Term Success Comes from Having Integrity - Although there is no specific order for this list, I did save the most important trait for last. Integrity, in my opinion, is the most significant contributor to long lasting success. Society wants us to think that we need to bend the rules or be ruthless to have an edge and become successful but that is just a myth. Those that achieve success using questionable tactics usually don't hold on to successes for long (WorldCom's Bernard Ebbers, predatory subprime mortgage lenders, steroid using Barry Bonds and Enron's Kenneth Lay and Jeffrey Skilling, just to name a few). Being fair and honest is the best route to success, albeit not the most glamorous, because integrity attracts integrity while deception, although possibly effective in the short term usually leads to long term failure and devastating consequences. Successful people who hold on to their integrity not only succeed themselves but also help others as well to succeed.

If you want to be successful, take note of the aforementioned qualities that consistently successful people share. Then clearly define your goals and pursue them actively with integrity, confidence, hard work, and an open mind and cultivate a reliable support system of other honest people you meet along the way.

If you know of any other traits not mentioned here, please post them in the comments section.

Recommended Reading - 24 Essential Lessons for Investment Success by William J. O'Neal (founder of Investors Business Daily)

Streaks and Slumps

2008-03-04T20:09:00.009-05:00

As all tennis fans know, the most dominant player in tennis, Roger Federer, lost yesterday in the first round at the Dubai Tennis Championships. Just last year he was unstoppable, winning three Grand Slam titles. Now with the recent loss last month in the Australian Open semifinals and this unimaginable first round loss, many critics proclaim that Federer is in a slump. How the tides have turned. This is testament to the yin and yang balance discussed earlier in Yin Yang Markets.

To some extent, I am sure that we have all experienced or at least witnessed the phenomenon of slumps and streaks. Whether it is in sports, gambling or stocks trading, steaks and slumps seem to come into play whenever performance is involved. What I want to discuss in this post is that in reality, there are no such things as streaks and slumps, just probability. Almost all perceived streaks and slumps, with a few outstanding exceptions, are within the realm of inherent probabilities. For example, if a baseball hitter has a .300 lifetime batting average, but in one season had a 40 game hitting streak. His chances of hitting the ball will seem to be higher than average to both himself and observers during this "extraordinary" streak but if you study his lifetime hitting statistics, you will see that there is no evidence that points to a higher probability to hitting the ball. So even though he was "on fire", he was still only performing within his normal chances.

So why do people usually attribute streaks/slumps with an enhanced probability for success/failure, respectively, when in fact both streaks and slumps can be explained within the normal probabilities? Well, people are natural pattern seekers. We can look at things that are random or meaningless and rationalize some sort of pattern or meaning. Also, clusters of similar outcomes that seemingly defy probability tend to capture our attention, forcing our mind to rationalize such a deviation from the norm. (Imagine 30 coin tosses, where the first 15 tosses land on heads and the second 15 tosses land on tails. If you were only shown the first 15 tosses, you would probably feel that the chance of hitting heads on this coin is higher than 50% and that maybe it is a trick coin. This perceived increase in probability is what causes people to believe in players being "in the zone", "on fire" and "unstoppable". )

The difference between coin toss results and a baseball player's batting average is that batting average is dependent on skill. Skill varies from person to person but the more skillful you are the higher your chances of succeeding in what you attempt to do. Although not impossible, it is rare to see win streaks from bad teams or hit streaks from poor hitters. What you usually see is good teams going on long win streaks (2007 New England Patriots) and star players (Michael Jordan) being "on fire". Those who are at the top of their profession or sport have above average probability for success leading to increased chances of producing streaks. Stephen Jay Gould explained long streaks as "a matter of extraordinary luck imposed on great skill".

I know of many people, including myself, that have been in streaks and slumps. During streaks, everything is great but complacency and overconfidence sets in because one perceives a higher chance of succeeding. This is especially prevalent in gambling, when someone, after winning a few successive hands, feels that they have a higher chance of winning even though all casino games have fixed win/lose probabilities. This overconfidence is what causes most winners to give their winnings and more back to the casino. As for slumps, most people I know always try to place blame on others, their routines and/or their strategies. This leads to frequent unnecessary overhauls and changes that can further lead to sub par results (good golf players "tweaking" their swing after a short series of bad hits). Don't get me wrong, it is always good to evaluate and improve, but to make big changes in technique and strategy after a small slump may be "throwing the baby out with the bath water". Also in most cases, only time is needed to let probabilities run its course.

So next time you're in a streak or slump, just know that you are still operating within your normal chances of success/failure and overconfidence or despair is unwarranted. As mentioned, skill is a factor in determining your "normal chances", so improving your skills is a necessity if you want to have "streaks" of success. Many top players (Tiger Woods, Alex Rodriguez and Roger Federer) have experienced both streaks and slumps but they eventually always come back to win because probability is on their side. Thomas Jefferson once said "I find that the harder I work, the more luck I seem to have".

So if you want to get lucky, you know what you have to do.

Luck => Success. Hard Work => Luck. Hard Work => Success.

As always, feel free to comment below!

Recommended Reading: Confidence: How Winning Streaks and Losing Streaks Begin and End by Rosabeth Moss Kanter, A Random Walk Down Wall Street by Burton G. Malkiel