Wednesday, November 30, 2011

Thanks a Latte

I subscribe to an e-mail feed with questions from reporters and there is one question that seems to come up a lot. A variant came trough this morning:


What are some easy, actionable (and accessible) ways that people
can cut back on spending? What are some small steps I can take
(i.e. not ordering a drink with dinner/latte in the morning)
that add up to large savings over time?

What I want to know is who are these people who are ordering lattes every day and scratching their heads about where they can save a couple of bucks? Why is it that reporters are always suggesting cutting out your daily latte as if they are actually telling cash-strapped people something valuable?

Are there any other broke people out there who are a bit sick of the whole "you can get out of your troubles by giving up your latte" line?

Monday, November 21, 2011

Those Deep Ones

"Mr. Darling used to boast to Wendy that her mother not only loved him but respected him. He was one of those deep ones who know about stocks and shares. Of course no one really knows, but he quite seemed to know, and he often said stocks were up and shares were down in a way that would have made any woman respect him."-J.M. Barrie, Peter and Wendy

Saturday, November 5, 2011

Do Big Bonuses Improve Creativity?

If nothing else, having bills to pay can get you off your butt.  After Mickey Spillane, the writer of detective stories, achieved his first big success, he decided to take up residence at a popular seaside resort and enjoy the sunshine.  On the rare occasions he decided to work, the ideas wouldn't come, but he was financially secure, so it didn’t bother him much.

All the while, his bank account was steadily shrinking. Once, some unexpected bills came up and overnight Mickey's financial situation went from comfortable to desperate. Almost immediately, good salable ideas began to percolate in his mind, and out of necessity he wrote one of his best stories and went on to enjoy a long and outstanding career.

While poverty can be a great motivator to get you to work, the promise of extra money when you’re already comfortable can actually stifle creativity.  That is the conclusion of Teresa Amabile, the head of the Entrepreneurial Management Unit at Harvard Business School and the only tenured professor at a top business school to devote her entire research program to the study of creativity.  She and her research team collected nearly 12,000 daily journal entries from 238 people working on creative projects in seven companies in the high-tech, chemical and consumer products industries.  She discovered that people are most creative when they are self-motivated and when they care about their work.  But when they start to worry about their bonuses, and pay-for-performance plans, they start to get risk averse.  To “guarantee results” they stick to what has worked before and fail to innovate.

When we are chasing after financial goals, we usually think we are seeking self-improvement.  Yet we’re actually more motivated by a fear of loss than the dream of gain.  Our greatest fear is losing ground.

-Excerpt from the book Broke is Beautiful by Laura Lee