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What’s Your 500 Year Plan?

To quote the (for this week) popular meme: Well, that escalated quickly. A 500 Year Plan. Even without any details, that’s a proclamation that’s simultaneously captivating and intimidating. After all, how often do we really hope to establish anything in our lives that will still impact the world five hundred years from now? Aside from the few whose names will grace the pages of history eBooks, we generally don’t hold much hope of actually accomplishing any such thing.

And yet, maybe we can. Maybe we don’t have to stand tall on the world stage for the impact of our lives to still be felt by our far-off descendants. Even if you can’t change the world, you can still change your family tree. It’s all about legacy. That, and a whole different way of looking at investing.

I had the pleasure of meeting another coworker late last week, and we had some very interesting conversation. This was one of the topics discussed: Oftentimes those who have been diligent to save and invest and spend wisely come to the end of their lives still owning much more than they will ever need. Understandably, their wish is often to pass this wealth down to their children and grandchildren. They want to leave a legacy.

This isn’t an unknown idea in the financial world. Far from it. The 500 Year Plan is a quote attributable to the Green family, owners of Hobby Lobby and Mardel’s. Dave Ramsey talks about The Legacy Journey. Other financial  figures have their own ways of expressing it. It’s an awesome idea, but it’s relatively rare to come across a nuts and bolts discussion of what it means to leave a financial legacy.

Consider our elderly patriarch/matriarch. Most likely, their investments have gotten pretty conservative in recent years. It’s a standard practice for many people to cut back on risk as they become elderly.

That plan definitely has its place. In fact, I would say that’s what most people need to do. Everyone needs to do it to at least the extent of being able to be sure they’ll have enough to live on even if the market goes south.

And yet, is that all there is? Does it really make sense for everything to get pulled out of higher earning investments and stuffed into bonds and CDs because that’s just what you do when you hit 65?Maybe not- at least, not if you have enough stored away to take care of yourself and to set aside a legacy for your family. What I mean here is this: if the money isn’t really for you or for your benefit anyway, why would you invest with it as if it were? If it’s for the benefit of your children or grandchildren or every generation of your family for the next 500 years, why are you calculating the risk you can take based off the assumption that you’ll kick the bucket sometime in the next decade or three? It doesn’t make sense, and it could seriously impact the future earnings of the investment if it’s treated that way.

The risk you are willing to take and the return you desire to make should be determined by the purpose of the investment itself, and the circumstances surrounding that purpose. If the investment is separate from your life, treat it like it is. If it’s designed to make the rest of your life easier, treat it appropriately for that purpose. Just always be ready and able to step back and take a good, hard look at what you’re doing with your investments and whether or not that matches up with the supposed purpose for which each investment exists.

Thanks for reading,



Cash Flows on a Regional Scale


The map you see above is a rather interesting critter. To get the full explanation of it, read this article: A ‘Whom Do You Hang With?’ Map Of America by Robert Krulwich. But here’s the short version: This map, using data from the Where’sGeorge? project, is a visual representation of how cash money flows across the United States. The blue lines represent areas which money doesn’t cross over as often: the darker the blue, the less money travels over the line. Faint blue lines are often caused by nearby cities pulling money toward them by the natural process of economics.

As you can see, the dollar bill is not always a respecter of borders. By extension, neither is the american consumer. Some areas of a given state, like the northern tip of California, do more business with other states than with the state they’re in. In other places there are starkly defined economic regions where cash flows easily within set borders: the region consisting of Kansas, Missouri, Arkansas, and Oklahoma being a great example. Though it is a bit odd that we Okies don’t do more business with Texas.

This map is far from perfect of course, and no one will ever seriously suggest redrawing the political map because of it. The biggest single reason for this is that most money moves through the dynamic duo of plastic and electricity these days, not cash. Factor in Amazon alone and you’ll warp the whole map over toward Seattle. Throw in Apple, Microsoft, and Google too (just for starters) and you’ll make things even crazier.

But that’s not to say this map doesn’t have its worth. A savvy small business owner could examine the region they fall into and could likely discover some cultural similarities. There’s always a service or product to be provided, so the combination of the two could be a powerful driver toward regional expansion of a business into multiple locations. After all, people spending money in the same region will, to some extent, be spending it on the same things.  Locate those things and you might just discover a competitive advantage.

Or not. Any single data set alone can’t tell the whole story, and finding a multitude of sources to rely on is essential. But this map might be a good one to include, as it is suggestive of possibilities.


Thanks for reading,


Tax Rates: 2012 & 2013


It can sometimes be a bit hard to find the year’s income tax rates (And who really wants to navigate the IRS website anyway?), so here they are for 2012 as much for my sake as for any reader’s. See below for the tax rates for 2012, which are the ones you need to use to file your return between now and April 15th.

2012 Tax Rates


NOTE: These are the rates for 2013, and will apply to the return you file in 2014. Do not use them for the return you file this year.

2013 Tax Rates



If you look, you’ll see that this year we have six tax brackets, ranging from 10% to 35%. We still have those six brackets for 2013, but with an increase in the limits of 2-3%. What’s really notable is that 2013 includes a seventh bracket at a rate of 39.6%. Ouch!

While that seems like a reasonable step-up at first, take a closer look at that 35% bracket. For Single taxpayers, that bracket is only $1650 wide! In fact, married couples have the widest margin in that bracket with $51,650. What the heck?!? That verges on punitive, especially when you consider that the 33% tax bracket is over $215,000 wide for a Single taxpayer. But where’d it come from?

Well, it’s the result of the “fiscal cliff” debate. Doctors and other well-paid professionals owe the Republicans a big thank-you for what they were able to accomplish, relatively little that it was. The Republicans’ original goal was to set the highest bracket at $1 million+ in income, but negotiations pared that down 60%. By contrast, President Obama and the Democrats wanted to set the bar down at $200,000 or $250,000.

I try not to comment on politics here, but felt I needed to explain where that craziness came from. And, yes, I’ll admit I’m biased. I’m pro-business, after all…something on which the President and I clearly differ. Well, such is life.


Thanks for reading,


How Does the News Impact You?

Image from linked article.

Link: Original Article by Mike Maddock

Do you ever feel like the news has nothing good to say? I certainly do, as does Mike Maddock in the article that inspired this post. If you have a few minutes, check out the link above for an interesting read.

The first sentence of the article immediately caught my attention: “Some of the most creative people I know decided long ago not to watch TV news.” It stuck out to me because I decided a few years ago to stop watching news on the TV myself. It just seemed so depressing, and the 4-to-1 ratio of commentary to news didn’t help.

I don’t mean to brag about myself there. The real point is that I hope the generally more positive attitude that Mike later notes for people who get off the media train will prove true in my life also. I certainly wouldn’t mind a boost to creativity and/or innovation while I’m at work. Would you?

I think the article hits on a truth: What you choose to bring into yourself has a direct impact on what you express out of yourself. Even the “normal” day-to-day stuff that’s an order of magnitude less horrible than the Sandy Hook massacre is enough to bring down your mood and dull your focus and optimism. That’s going to show through on the job, and if it’s impacting you consistently it’s going to show through consistently.

My recommendation? Find a way to get news in less than 30 seconds. Be informed, but don’t linger to the point that it ruins your day.

Should $1 Be “Cold, Hard Cash”?

Image from www.coinnews.netCheck out the original story on Yahoo: Congress looks at doing away with the $1 bill by Kevin Freking.

Some have argued for years that the U.S. should switch to a $1 coin and ditch the $1 bill. And perhaps it makes sense- coins can stay in circulation much longer, after all, so they can be more cost-efficient to produce.

The most common argument I’ve seen against the idea is simply this: we have never used $1 coins, and we don’t want to. As Philip Diehl notes in the article, though, “It’s really a matter of just getting used to it.” That’s my take, in any case.

I’ve been blessed with the good fortune to visit a couple of other countries, the United Kingdom and El Salvador, in which $1 coins are used. Both experiences were unique, but both left me with an improved opinion of $1 coins.

The UK actually uses Pounds rather than Dollars, of course. It was my first real experience with large denomination coins- I don’t really count the few I run into here in the U.S. To me, their 1 & 2 pound coins were just as convenient and useful as bills. Their best feature, though, was that their size and/or thickness makes them distinctly different from the smaller denomination coins.

El Salvador actually uses U.S. Dollars, and the larger denomination bills are used there too. But $1 coins are the norm there- in fact, we ship a lot of ours we don’t use to them. Again, convenience was the same, aside from the one real problem we face in this: gold dollars aren’t easily distinguishable from quarters. I couldn’t simply reach in my pocket and know by touch which one I held. But that’s not too hard to fix.

Perhaps $1 coins are a needed governmental cost-cut and a positive cultural change. In regard to business, aside from a few instances such as vending machines, I think the situation is really six of one, half a dozen of another. With equally convenient usage, I doubt business trends will be greatly effected.

Thanks for reading,


We Learn Old Data

In times of change, learners inherit the Earth, while the learned find themselves beautifully equipped to deal with a world that no longer exists.
     ~Eric Hoffer, American Social Philosopher

This quote really caught my eye when I first saw it, because of how it translates into the lives of college students like myself. And no, I’m not talking about that sixty-year old professor who drones on endlessly. In this case, I and my contemporaries are all too often “the learned.” We run the risk of getting the arrogant idea that just because we have a nice, pretty diploma, we know all we need to know.

Not in this generation.

Good professors of business teach with the foundation of their personal experience in the world of business to guide them. But by its nature, that information is dated. Even coming from those professors who split their time between professional careers and their teaching duties, the information is only current at best. There’s nothing that guarantees it will even be relevant tomorrow. Even relatively rigid disciplines such as accounting are subject to change, and sometimes very quickly.

Am I disregarding my $120K education, then? Hardly. (Mom & Dad would kill me, after all.) We certainly need a solid foundation to be able to operate on a professional level. But a foundation is not a roof. Nor can you look through the windows in a foundation to see that next great opportunity. An education, a degree, a certification…they’re all good. But we must continue to move forward if we wish to continue being relevant in today’s fast-paced world of business.

Thanks for reading,


Teaching Kids Business Their Way

There’s a lot of maturing that goes on between playing Xbox in middle school and sitting in a management class in college. But that doesn’t necessarily mean there’s no room for business thought in that middle school student’s life. After all, my Xbox 360 sits proudly in my dorm room even today. Why not take things the other direction?

Business simulation videogames have been an interest of mine for many years. I first played one, a hot dog stand simulator, in elementary school. I wish I could find that game again, because it was excellent. It had so much: price management, random equipment breakdowns, cost management, etc. The ice for the drinks even melted over time. Pretty comprehensive for a ten year old, and very engaging. It can probably be credited as being the reason I chose to go into the field of business all these years later. That’s important.

It’s not  uncommon for businesses to begin courting college students in their Junior year these days, and some are even beginning to go earlier than that. Why not go even earlier? I think, on the long term, there could be great benefits for our economy if we invest in videogames aimed at drawing kids’ interest into business. Not just the crappy fly-by-night stuff you can find on free games websites on the internet, though. Something that’s had some effort and thought invested. Something designed to be truly engaging and with depth that scales with what the kid can handle.

Videogames are one of the most prominent forms of media for my generation, and for those following us. Let’s meet them where they are, on their terms, and see if we might just be able to raise up a generation of entrepreneurs.

Thanks for reading,