Category Archives: Money

Should Anyone Be Jobless?

Vanessa Evans reached her mid-thirties, bored with her job as a paralegal. She had been promised more responsibilities, but more young, fresh-from-law-school attorneys were added to the staff. Finally realizing that her job was a dead end, she began taking stock of what she wanted to do with the rest of her life.

Somehow, she knew that becoming an attorney with the prospects of handling divorce suits and debating property line disputes was not for her. Vanessa was told by a job counselor that she was “getting to the age where she would be hard to place” and that she had just about reached her potential income level in the job where she was. The counselor urged Vanessa, at age 33, to be happy and stay put.

I wonder how many of us that has received this kind of advice in the past, when your parents, teachers, mentors and other experts told you the things you can do and the things you cannot do. Who is better placed to tell you what is possible and what is not? Who knows the power and beauty of your dreams more than you? How did Vanessa react to the advice of the job counselor? Let’s find out.

Angrily, Vanessa left the office, refusing to be limited by the tunnel vision of a job counselor. So what did she want to do with the rest of her life? She had many capabilities, but Vanessa couldn’t decide what she did well enough to make a career out of it. Finally calming down, the determined woman decided to start from square one. What had been her best subject in school? The answer was English. She began evaluating the career choices.

Teaching held no appeal, nor did advertising. It came down to two choices: Vanessa could either read other peoples’ work, or write her own. When she made the conscious commitment that she should be a participant in life, rather than an observer, Vanessa went back to night school and polished her writing skills. Before long, she was happily earning her living as an author.

If you take inventory of your talents, the skills you possess or the skill you can acquire, it will amaze you what will be the outcome.

I still don’t believe anyone should be jobless. There are things to do. Convert that hobby of yours and you could be on your way to building an empire.

All you need is the courage to start small and the discipline to stay focused until you achieve greatness.

It is in you!


Taking decisions on spending, borrowing

Careless "Borrowing" is Sabotage - N...
Careless “Borrowing” is Sabotage – NARA – 514033 (Photo credit: Wikipedia)

I trust you had a wonderful weekend. Let’s kick start this week with the right decisions especially spending and borrowing decisions. Don’t forget to drop your comments.

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A professor recently conducted a research to determine how nature and nurture impact spending and borrowing habits. SIMON EJEMBI writes on the outcome of the study

Many people have struggled to develop satisfactory financial habits over the years. For some, the efforts have been rewarding; for others, they have been in vain. Some have concluded that there is nothing they can do to successfully develop healthy financial habits. “It’s just the way I am; it is natural,” some of them may say.

Could it be that financial habits are genetically transferred?

It’s complicated

A study by Dr. Hersh Shefrin, Chair in the Department of Finance at Santa Clara University’s Leavey School of Business tries to answer the question.

In the executive summary of the study entitled, ‘Born to spend? How nature and nurture impact spending and borrowing habits, Shefrin says, “Many people have poor spending and borrowing habits, but what is the reason? Is it because they are genetically predisposed to make bad financial decisions or is it because they have poor financial literacy due to ineffective education? It is the classic“nature vs. nurture” question and, unsurprisingly, the answer is “it’s complicated.”

According to him, understanding what drives our financial behavior is important because strong financial literacy and good spending and borrowing habits are closely linked.

Nature’s impact

The study, which was published in April, 2013, concludes that when it comes to spending and borrowing, there is a wide spectrum of behavior.

“Some people are born with traits that lead them to make good decisions but many others are not,” it says.

It, however, explains that while an individual’s genes play a role in financial decision-making, nurture and education play a significant role as well, meaning that there are opportunities to teach people better financial habits.

How people make financial decisions

For people to make better financial choices through smart nurturing and education, it is important for them to understand how they make financial decision and the impact of nature.

According to the study, most decisions, including decisions about spending and borrowing, feature a combination of one’s habitual instincts known as fast thinking, and one’s purposeful and strategic thought processes utilized to override habits known as slow thinking.

It adds that as with other habits, like smoking or overeating, it is difficult to overcome one’s fast thinking instincts, because the brains are hard-wired to resist the acceptance of immediate pain and the delay of gratification.

It says, “The way our brains make decisions can be equated to a human rider atop an elephant. The elephant represents our habitual, fast thinking processes – things like walking, breathing, brushing our teeth, taking care of simple chores. The elephant is strong yet difficult to control.

“The rider on the other hand represents our ‘strategic’ processes – activities like planning, list making, and other deliberate efforts to overcome our instincts. Often, people try to guide their behaviour relying on rules of the thumb, known as heuristics.

“However, our own biases lead to misjudgments often and put us on the wrong paths. The question we all wish to answer is: How do we overcome natural instincts and our habits to successfully equip our riders with skills to point their elephants in the right direction?”

Overcoming limitations

Shefrin notes in the study that while financial literacy is important for making sound financial decisions, studies have shown that traditional financial education has largely been ineffective in increasing the degree of financial literacy.

“Unfortunately, the existing efforts to promote sound financial decision-making, while well-intentioned, have not kept pace with what psychologists, economists and others have learned about how the human mind works,” he stresses.

According to the study, in order to make real progress, people need to harness innovations that can make it possible for them to overcome poor spending and borrowing habits. It explains that smart nurturing programmes, new technologies, and new educational techniques, such as using educational gaming software, are all underutilized ways to get people to make better financial decisions.

It says, “It is the time to use our knowledge and resources for a collaborative approach across public and private sectors to instil mindful spending and borrowing habits in our classrooms and beyond. The private sector and the public sector, members of the media, educators, and individualsthemselves can all play a role in improving financial practices. We can help people become more mindful spenders and borrowers; we just need to embrace the new knowledge and technology available.”

Smart nurturing

According to the study, fast thinking processes and numeracy skills are part of people’s natures. It explains that smart nurturing is suitable in helping people overcome their nature because it involves using psychology to help them make better decisions by changing the interactions between their slow thinking processes and fast thinking processes.

While the study admits that changing behavior is difficult, it says the fact is that some people manage to do it.

To successfully change behavior, it says three principles are involved. They are:

1.Articulating the change to be made and laying out the steps necessary to get there.

2. Finding ways of generating appropriate emotional rewards along the path leading to change.Emotions are part of fast thinking. Emotional rewards come in many forms, but one important form pertains to identity. People who want to change often want to change their identities, and so part of the reward is behaving in a way that supports the vision the person has of who he or she wants to be.

3. Manipulating the environment to foster change, using a variety of techniques such as the cultivation of new habits and modifying the choice architecture, which means intentionally structuring the choice environment to influence the choices people make, essentially, to “nudge” them to make different decisions.

As ‘complicated’ as this may appear, Shefrin says, “The research is clear that many people would like to make better decisions about spending and borrowing, but lack the knowledge or the motivation to do so. It is time to harness new innovations in order to help them to do a better job of making ends meet, taking on less debt, reducing unnecessary financial fees, and setting aside funds for unexpected expenses.”

Culled from