Monday, July 30, 2012

Situations at Work 8: Ethical Challenge to Report or Not

Lazy co-workerI occasionally share situations at work and ask you to share  you comments and opinions

Today’s situation presents an ethical challenge for co-workers. Frequently, people work with others that do not give a full-days work for the salary. Some, in today’s workplace, seem to work extraordinary hours giving their full power the entire time. Others seem to play Angry Birds, connect on Facebook, peruse web sites, and go home early.

Lazy and Deceitful Co-Worker

Ben worked on a skunks works project for the company. The project provided Ben with a high-profile jumpstart to his career. He worked well on the pilot, but collaborating with another division. His assignment expected him to work on his own. It allowed him to discretionary time without supervision. He delivered good results and the pilot became a program.

He created a situation that allowed two bosses to each think he worked for the other. Consequently, no one supervised him. In addition, he worked in two different locations unsupervised. Unfortunately, Ben took advantage of the leniency for personal benefit. He would take off during the day to shop for a new home. He would start and end the day at work, then go home to play with his children and be with his wife.

You work in a different division that also collaborated on the pilot. You recognize what is happening. In addition, you know that he withheld negative side affects of the pilot to make it look good. He is currently encouraging headquarters to invest $70,000 in electronic technology.

Options to Consider

You consider the following options:

  • Tell your supervisor who works for a different division than Ben’s
  • Report to his supervisor who is your peer in the other division
  • Report to the other member of the pilot who is not Ben’s supervisor. Unfortunately, you have a bad past history with that person.
  • Do not say anything to anyone, because it is not your responsibility

What Would You Do?

Please share your comments, suggestions, or additional options. We want your ideas.

Wednesday we will share some real successes at work that can inspire your career

Friday, July 27, 2012

Barriers to Retirement 8: How to Remove the Barriers

Remove BarriersSeveral people asked for ideas on how you can remove the barriers so you can retire

My previous posts on barriers to retirement met with concern and dismay. This post provides suggestions and ideas that will overcome the barriers to employment listed in the pervious posts. You may implement the ones you find applicable to your situation. I hope you find them helpful.

Solutions to the Barriers

I will restate each of the barriers and offer 1-2 solutions to each one:

  • Vanishing Pensions
    • Consult your human resource or benefits specialist about pensions
    • Contribute at least as much as your employer will match in contribution
    • Add as much extra as possible to your 401K or Roth IRA
    • Identify potential employers that offer pensions, 401Ks, or Roth IRA’s
    • Open a Roth IRA or retirement account through a credit union or bank
  • Social Security Uncertainty
    • Plan on other retirement income rather than Social Security exclusively
    • Evaluate your social security benefits regularly
    • Ensure that no one else uses your Social Security number
    • Elect officials that will strengthen and protect social security plans
  • Lack of Home Equity
    • Stop refinancing your home in a way that extends your mortgage
    • Do no include additional debt (debt consolidation) into your refinancing
    • Pay additional payments to mortgage principle each month
    • Reverse the trend to buy bigger more costly homes for smaller ones
  • Lack of Savings, Lots of Debt
    • Pay yourself up to 10% of your salary each paycheck
    • Avoid credit card debt and pay it off every month if you do
    • Pay cash for as many purchases as possible
    • Use Pinching Your or other methods to save on spending
    • Take a finance class Dave Ramsey, Suze Orman, Clark Howard, or other
  • Jeopardized Investments
    • Recognize that the current economic situation will not last forever
    • Get the opinion of 2 or 3 sources before investing financially
    • Diversify investments into bonds, low cap, mid cap, and high cap funds
  • Working and Bridging
    • Decide on service opportunities that would interest you
    • Keep your skills current so that your company will still want you
    • Build relationships with people of all ages, backgrounds, and beliefs
    • Exercise and maintain good health practices to remain fit throughout life

Monday we will review additional situations at work to explore ethical questions

Wednesday, July 25, 2012

Situations at Work 7: Too Much Pressure & Work

Too Much WorkI occasionally present situations at work for you to consider and share what you would do

I draw these case studies from real life. Today’s case study shares a situation that many employees encounter these days. Like Enid in the story, many employees face additional challenges and commitments at work. Employers, in order to compete with lower labor costs elsewhere, ask more of their employees than in the past. I would appreciate your observations, comments, and suggestions.

Increasing Responsibilities and Pressures

Enid works in the purchasing department of a large manufacturing company. The company operates multiple plants in a major metropolitan area near the west coast. Her employment for the past six years brought great satisfaction and fulfillment. She saw a great future in purchasing and in the company. In fact, she so enjoyed her position that she obtained an MBA to continue advancing in the field.

The company began expecting more of her over the last year. Several colleagues left the company because of the pressure. The company spread the responsibilities of departing employees among the remaining employees. Recently, Enid had to assume all the responsibilities of another purchasing agent when he left. As a result, she doubled her already overburdened responsibilities. They also forced her to work in two different plants each week.

Enid works an average of 60-70 hours a week in two locations. She remains emotionally distraught. She cries frequently. She barely sleeps. Her appearance worsened recently.

Options to Reduce the Stress

Enid considered several options. Unfortunately, the emotional stress and lack of sleep may affect her judgment and decision making:

  • Transferring to a new position in the same company
  • Looking for a purchasing job in another company
  • Looking for a receptionist job in another big company
  • Looking for a clerical job in a small company where she would fill multiple roles
  • Just get out of the manufacturing company as quick as she can

What Would You Do?

Consider Enid’s options or add your own. Please share your opinions, comments, and suggestions.

Friday we explore possible solutions to the barriers to retirement to help you retire

Monday, July 23, 2012

David McCullough’s Brave Companions: Inspires Careers

Brave CompanionsTodays’ post stands alone, not as part of a series other than random thoughts about your job

I’m reading Brave Companions: Portraits in History by the Pulitzer Prize winning historian David McCullough.  Each chapter highlights the career and contribution of specific individuals who lived in the last 100 years. As usual McCullough draws you into the story with simple, yet elegant, prose. His descriptions could inspire your career.

Attitude is the Key

David McCullough writes “Reading about the lives of such great figures…one is struck again and again by how much they accomplished in a lifetime. Where did they find the time or energy…? I wonder if perhaps it was because tuning out boredom had not yet been made so easy as in our day.”

The Men who Built the Panama Railroad

“Here the bravest might well have faltered and even turned back from so dark a prospect as presented itself to the leaders…but they were men whom personal perils and privations could not vanquish.”

The Men and Women who Built the Brooklyn Bridge

“Interestingly, those who worked on the bridge had little or nothing to say about it once it was finished. All the speeches and poetry, the essays, the editorials extolling its beauty and significance were provided by others. Roebling, too, said almost nothing on the subject He—they all—seemed to prefer to let their work speak for itself.

The Early Aviators

“Though of different nationalities and differing abilities as pilots, these aviator authors were alike in their love of the freedom of the profession, their love for the still unspoiled, distant corners of the Earth and their affection for their fellow pilots.”

What Will They Write of You

McCullough challenges “Life in other times past was never on a track, any more than it is now or ever will be. The past after all is only another name for someone else’s present. How would things turn out? They knew no better than we know how things will turn out for us.”

Wednesday we will present more case studies of situations at work and how you would cope

Friday, July 20, 2012

Stephen R. Covey—Memory of a Great Human Being

Stephen CoveyDr. Stephen R. Covey passed away this week. He authored a number of great books on relationships, leadership, and habits of highly effective people. I knew him personally. He and my father went to college together and affiliated in several on-campus groups. I attended several of his lectures and seminars. He usually remembered my father and recognized me. I last met with him two years ago when the Utah Valley Chapter of the BYU Management Society (I serve on the board) awarded him its Pioneer in Leadership Award.

More Than 7 Habits

The 7 Habits of Highly Effective People established his global reputation.  The Christian Science Monitor states that the book sold more than 20 million copies in 40 languages. The book created a common vocabulary and view of leadership. Because of Stephen Covey, we changed our paradigms, became proactive, began with the end in mind, put first things first, and more. He added an 8th Habit after meeting Dr. Mohammed Yunus of Grameen Bank. The 8 habits contribute to much of my personal and business success.

Stephen Covey taught more than just habits. His books Principle-Centered Leadership, Spiritual Roots of Human Relations, The Divine Center, and more inspired millions of people to change their lives. He helped many people find greater satisfaction and balance in their lives.

Personal Recollections

He taught me his famous 9-Dot and 3 pictures of a woman exercises before my teens. My bride and I benefited from a special seminar he did with Dr. Truman Madsen on marriage and relationships.

I heard him for the last time in November of 2010. We recognized him as a Pioneer in Leadership. He and his wife graciously met with all of us on the board before the program. His presentation that evening summarized a life-time of research. He synthesized principle-based leadership, 8 habits, and his work (The Leader in Me) with children around the world into a comprehensive approach to life.

Stephen Covey left a legacy in the minds, hearts, and yes habits of global generations.

Monday we discover how David McCullough’s Brave Companions can inspire your career

Wednesday, July 18, 2012

Random Thoughts About the Economy, Jobs, & the Future

Servant EconomyThis stand-alone post combines two thoughts on stories I heard today

I spent the last two weeks reviewing and analyzing consumer family finance data released by the Federal Reserve Board. Some of the findings boded ill for most Americans. Several stories I heard today seemed to continue the implications presented by the report. I wanted to share those stories and my thoughts about them.

Jeff Faux’s Book The Servant Economy

I listened to the Diane Rehm Show this morning. Her guest was Jeff Faux the founding president and distinguished fellow at the Economic Policy Institute. Mr. Faux recently published his new book The Servant Economy: Where America’s Elite is Sending the Middle Class.

He made several points during his discussion. Since the transcript is not available until later, I take the following comments from Powell’s Books review of The Servant Economy. It describes the same issues I heard discussed.

  • Government’s abdication for the “responsibility for shaping the future
  • A savage indictment of Wall Street financiers and their Washington toadies who promote an age of austerity for the people and an age of gluttony for themselves
  • Twentysomethings laden with college debt will become thirty- and fortysomethings still stuck in low-paying jobs
  • Elderly who will have to work until they die.” (the premise of my new book Barriers to Retirement: 10 Reasons You May Not Get to Retire) 

Canadians are Wealthier Than American’s

Then, I heard this report from Time “Over the past five years, the average net worth of Canadian households has exceeded that of American households.  So for the the first time in history, Canadians are wealthier than Americans — by more than $40,000, on average. In 2011, the average net worth of a Canadian household was $363,202, compared to $319,970 in the U.S., according to Environics Analytics WealthScapes data published in the Globe and Mail. (‘Average net worth’ measures the total combined value of a household’s liquid and real estate assets, minus debt.)”

Does any one else find these issues very disturbing?

Friday I would like to honor Stephen Covey who passed away this week

Monday, July 16, 2012

Hit on the Middle Class: My Thoughts and Observations

Question Guy 4This concludes our review the Federal Reserve Bulletin for June 2012 on Family Finances

Most of the posts for the past two weeks contained quotes and summaries from the Federal Reserve’s report Changes in U.S. Family Finances from 2007 to 2010: Evidence from the Survey of Consumer Finances.  I would like to share my thoughts, observations, and cautions in today’s post. I hope not to offend, but pray that I can voice the good, the bad, and worrisome.

The Good

I see several good trends and hope they continue in spite of possible changes in the future economy:

  • Families reduced debt and spending on debt. While consumer-based economies encourage spending and frequent updating of electronics, cars, and more; I hope that we continue avoiding debt. Credit card debt also decreased.
  • Family savings inched upward. I also commend this trend and hope to see it increase. I feel we must save our money for emergencies, family events, education, and future purchases.

The Bad

Many of the factors that impacted family finances negatively originated long before the economic crash in 2008:

  • Incomes failed to keep up with cost of living increases for a decade and a half. The economy indicates this trend will continue for the short-term. In addition, I doubt that salary decreases made for the recession will return quickly. 
  • Unemployment rose more than 4% leaving hundreds of thousands without income. We still do not know how many of the jobs will come back.
  • Housing values plummeted reducing family assets. Housing prices inflated beyond incomes and sustained value. An increasing appetite for bigger and more luxurious homes spurred the housing bubble which collapsed. Hopefully, we learned from the mistake and do not continue building and buying bigger homes than we need.

The Worrisome

The following indicators worry me:

  • Debt-to-asset ratio increases jeopardize future security. Continued home-equity loans and debt consolidating refinancing will prevent improvement.
  • Retirement accounts and savings share mixed messages. More people contribute to pension savings and accounts. Contributions fail to meet full vesting.

Wednesday I would like to share a few thoughts on today’s job market and the economy

Friday, July 13, 2012

Hit on the Middle Class: Summary of Family Finances

Family FinancesThis continues our series on challenges facing the middle class
The Federal Reserve Board’s Survey of Consumer Finances for 2010 provides insights into changes in family income and net worth since the 2007 survey. The survey shows that, over the 2007–10 period, the median value of real (inflation-adjusted) family income before taxes fell 7.7%; median income had also fallen slightly in the preceding three-year period. The decline in median income was widespread across demographic groups, with only a few groups experiencing stable or rising incomes.”
Family Assets
  • Financial assets rose as a share of total assets, reversing an earlier trend
  • Decline in the share of nonfinancial assets was most strongly driven by the decline in real estate prices and the value of business equity
  • Homeownership rate continued to trend downward retracing the path to the level seen in 2001
  • Declines in unrealized capital gains were an important part of the decrease in assets
  • 24.5% decline total assets were attributable to unrealized capital gains a share more than 11% points below that in 2007
Family Debt
  • Debt fell more slowly than assets over the recent three-year period
  • Overall indebtedness as a share of assets rose markedly
  • Home-secured debt fell slightly as a share of total family debt, but remained the largest component
  • Families using credit cards for borrowing dropped over the period; the median balance on their accounts fell 16.1 percent, and the mean fell 7.8 percent
  • Education-related borrowing increased as the fraction of families with education-related debt rose from 15.2% to 19.2%
  • Mean balance among those with education debt rose 14.0%, the median by 3.4%
  • Declining consumer loan interest rates helped offset the fact that debt rose relative to income for many families.
  • Median ratio of loan payments to family income for debtors fell slightly over the period to 18.1%
  • Debtors with loan payments exceeding 40% of their income decreased 1.0%
  • Share of families with payment ratios this high peaked at 14.8%
  • Fraction of debtors with any payment 60+ days past due climbed from 7.1% to 10.8%
Monday I will share my thoughts on the report of family finances

Wednesday, July 11, 2012

Hit on the Middle Class: Liabilities to Family Finances

This continues our series on situations challenging the middle class and others

Changes in U.S. Family Finances from 2007-2010: Evidence from the Survey of Consumer Finances reported “The overall value of families’ liabilities decreased between 2007 and 2010, but the rate of decline was less than the corresponding rate for families’ assets. Accordingly, the ratio of the sum of the debt of all families to the sum of their assets—the leverage ratio—rose from 14.8% in 2007 to 16.4% in 2010. The leverage ratio for the subset of families that had any debt rose at a faster pace, from 19.4% in 2007 to 22.0% in 2010.”


Several factors increase the liabilities family finances incur today (We reviewed some of them in blogs over the last two weeks):

  • Holdings of Debt
  • Mortgages and Other Borrowing on the Primary Residence
  • Borrowing on Other Residential Real Estate
  • Installment Borrowing
  • Credit Card Balances and Other Lines of Credit
  • Other Debt
  • Reasons for Borrowing
  • Credit Market Experiences
  • Debt Burden

Liability of Debt (a reprise)

  • Proportion of debtors with payments exceeding 40% of their previous-year income fell 1.0% to 13.8%
  • In the preceding three years, the proportion had increased 2.5%
  • Families in the bottom net worth group the share rose 4.2%
  • Families with income between the 60th and 80th percentiles saw a 1.9% decline in the fraction exceeding the 40 percent mark
  • Those between the 80th and 90th income percentiles saw a 2.9% point decline
  • Home-secured debt fell slightly as a share of total family debt, but remained the largest component of family debt.
  • Borrowing for residential real estate other than the primary residence fell slightly, but in 2010 it stayed high by historical standards.
  • Percentage of families using credit cards for borrowing dropped over the period
  • Median balance on their accounts fell 16.1%, and the mean fell 7.8%
  • Families with education-related debt rose from 15.2% to 19.2%
  • Mean balance among those with such debt rose 14.0%, the median balance increased 3.4%

Friday we will review the summary of findings that challenged the middle class

Monday, July 9, 2012

Hit on the Middle Class: Retirement Investments

retirementThis continues our series on changes in the middle class from 2007-2010

The June 2010 Federal Reserve Bulletin listed Changes in U.S. Family Finances from 2007-2010: Evidence from the Survey of Consumer Finances reported “The share of financial assets held in retirement accounts has nearly doubled since 1989, and as of 2010, it stood at 38.1% of families’ financial assets.”

Tax-Deferred Retirement Assets

“Ownership of tax-deferred retirement assets such as personally established individual retirement
accounts (IRAs) or job-based 401(k) accounts tends to increase with families’ income and net worth…Ownership is also more likely among families headed by a person less than 65 years of age than among the older groups.

  • Retirement accounts have been increasingly prevalent in the past 30 years
  • May not be available until relatively late in the careers of many older persons
  • Beginning at age 59½ a person may withdraw, without penalty
  • Some in the two oldest age groups may have already done so.
  • Families used funds from retirement accounts to purchase an annuity at retirement”

Statistical Analysis

  • From 2007 to 2010, the fraction of families with retirement accounts fell 2.6% to 50.4%
  • The decrease offset most of the 3.1% point increase over the preceding three years
  • Overall rate of retirement account ownership varied around 50% for the past decade.
  • 85.4% of families with an account plan on a current job a decline of 1.8%  from 2007.
  • 91.9% of families with such plans made contributions, an increase of 0.5% from 2007
  • The median annual contribution by employers who contributed $2,300 in 2010
  • Median contribution by families who contributed was $3,000
  • Both amounts were little changed from 2007 levels
  • Eligibility of heads of families to participate in any type of job-related pension fell from 55.9% in 2007 to 52.9% in 2010
  • It had risen 1.1% over the preceding three years
  • Participation by eligible workers is usually voluntary
  • 84.3% of family heads who were eligible to participate did so, up from 83.8% in 2007
  • The choice to participate appears to be related strongly to income

Wednesday we will review liabilities related to family finances from 2007-2010

Friday, July 6, 2012

Hit on the Middle Class: Financial Assets & Stocks

Stocks DownturnThis continues our series on economic changes affecting the middle class

Changes in U.S. Family Finances from 2007 to 2010: Evidence from the Survey of Consumer Finances published by the Federal Reserve Board declared “From 2007 to 2010, median assets for families having any assets fell 19.3%, from $232,100 to $187,200, and the mean fell 12.8%, from $702,100 to $612,300.” (p23).

Financial Assets

“Although the overall ratio of financial assets to total assets rose over the recent period, that
increase is attributable to the relatively larger declines in the value of nonfinancial assets;

  • Median holding of financial assets for families having such assets fell 28.8 percent, while the mean fell 3.3 percent.
  • Recent change in the median erased the gains experienced in the previous three-year period (2004 to 2007) and left median financial assets at their lowest level since the 1995 survey.
  • The decline in median financial asset holdings was widespread across demographic groups, with gains observed for
    • Families headed by someone 75 or older,
    • Top 10 percent of families ranked by income
    • Top 10 percent of families ranked by net worth.”

Publicly Traded Stocks

“The direct ownership of publicly traded stocks is more widespread than the direct ownership
of bonds, but, as with bonds, it is also concentrated among high-income and high-wealth

  • Families with any such stock holdings declined 2.8% from 2007 to 2010, to 15.1%
  • Declines in ownership were more common than increases, with the noticeable exception of families in the top decile of net worth, for whom ownership rose 2.5%
  • Ownership also rose slightly for families in the top decile of income (by 0.3%) and for families headed by a person who was self-employed (by 0.2%)
  • Although the major stock price indexes decreased about 25%, the median amount of directly held stock for families with such assets rose 12.4% (the mean fell only 9.5%)
  • For 35.5% of stockowners in 2010, at least one of the companies in which they
    owned stock was one that employed, or had employed, the family head, spouse or partner

Monday we discuss retirement accounts listed in the Federal Reserve’s Report

Wednesday, July 4, 2012

Happy 4th: Life, Liberty, & the Pursuit of Happiness

Declaration of Independence 2This post celebrates the birth of a nation dedicated to opportunity and liberty

I love the United States of America! I’ve visited, lived and worked in more than 30 countries on 5 continents. I appreciate their unique cultures, people, and opportunities. I recognize that the USA does not have a corner on freedom, rights, or moral integrity. Other countries also provide citizens the same benefits. I still love the United States of America.

Our Unalienable Rights

The Declaration of Independence states “We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.”

That phrase changed a country’s attitude toward people’s opportunity to grow. Prior to that statement, societies around the world defined class societies that restricted upward movement. The merchant class in England would not confront the landed aristocracy for another 50 years. France’s revolution would violently follow the concepts outlined in the declaration 15 years later.

The unalienable right to life, liberty, and the pursuit of happiness guaranteed each citizen the opportunity to improve their life, their status, and their career.

Millions of people proved that promise over the past two centuries

  • Immigrants with names like Carnegie, Mellon, and Vanderbilt proved it
  • Others with names like Ford, Rockefeller, Gates, and Jobs also proved it
  • Hundreds of thousands of my clients proved it by improving their jobs and lives
  • Thousands of clients proved it by starting or improving businesses
  • Hundreds of personal friends and family moved from middle to upper class

I Worry About the Promise

The promise still eludes millions. Some people, because of race, immigration status, or poverty fail to gain the “American Dream”.  Injustices and inequalities permeate our history.

Today, forces jeopardize the guarantee. Our society, more than in 100 years, consists of haves and have not’s. The middle class shrinks more each year. Legislation and litigation makes what once seemed unalienable indefensible. We must preserve the promise.

Friday we will continue our series on the middle class reviewing stocks & investments

Monday, July 2, 2012

Hit on the Middle Class: Debt Provides Mixed Message

debt increasesThis continues our series on financial stress affecting the middle class

The Federal Reserve Bulleting, June 2012 released the Fed’s report on Changes in U.S. Family Finances from 2007 to 2010: Evidence from the Survey of Consumer Finances. It summarized “Total payments relative to total income increased only slightly, and the median of payments relative to income among families with debt fell after having risen between 2004 and 2007. The share of families with high payments relative to their incomes also fell after rising substantially between 2001 and 2007.”

Debt Ratio Increases While Actual Debt Decreases

The following points indicate a small improvement on our hunger for debt, but also indicate an increase in debt ratio:

  • “Share of outstanding credit card balances decreased 0.6% over the 3-year period.”
  • “Offsetting these relative declines in mortgage and credit card debt were increases in the share of liabilities accounted for by nonmortgage lines of credit and other installment loans.”
  • “The overall value of families’ liabilities decreased between 2007 and 2010,
  • “But the rate of decline was less than the corresponding decrease of assets.”
  • “Accordingly, the ratio of the sum of the debt of all families to the sum of their assets—the leverage ratio—rose from 14.8% in 2007 to 16.4% percent in 2010.”
  • The leverage ratio for the subset of families that had any debt rose at a faster pace, from 19.4 percent in 2007 to 22.0 percent in 2010.

Demographic Allocation of Debt Looking Better

“With few exceptions, the fraction of families with any debt fell broadly across demographic

  • Debt ownership
    • Fell for those in the less than 35, 45-to-54, and 55-to-64 age groups
    • Rose for the 75-or-older group.
  • Families headed by a self-employed person saw a decrease of 4.8%, but more modestly or increased among complementary work-status categories.
  • Median debt tends to rise with income, education, and wealth;
  • Debt fell 17.8 percent among families headed by a person who worked in a technical, sales, or service job

Wednesday we remember our right to life, liberty, and the pursuit of happiness