Sunday, January 25, 2015

Advisors Can Learn from Costa Ricans, Part 2

As we discussed last week, the Happy Planet Index consistently ranks the Central American oasis of Costa Rica No.1 in its tally of countries whose populations are content with their lives. My family visited recently (both resorts and some clearly third-world hamlets not likely to be on your travel agent’s radar).

Suffice it to say, the “Ticos” may not be nearly as wealthy as we are, but they're probably more fulfilled. Research bears that out. Based on a score compiled from the life expectancy, ecological footprint and wellbeing of individuals, the Happy Planet Index aims to show that what modern humans think brings happiness often does not – and perhaps we should pursue it differently.

As Shilo Urban observed, most measures of national progress truly just measure the economy, accounting for production and consumption. Although money can help alleviate sadness, it cannot buy happiness. According to Urban, “Sales of self-help ‘find happiness’ books are soaring in the United States, a country that ranks towards the bottom of the list on the Happy Planet Index. Perhaps it is time to see what a developing Central American country like Costa Rica, can teach us about the pursuit of happiness.”

Why are Costa Ricans so happy? 7 big reasons.

1. Costa Rica has no army. The Costa Rican government pours the money into education and health care. Educated, healthy people are more likely to be happy!

2. Costa Ricans love and protect their environment. Costa Rica is a leader in ecological sustainability.

3. Costa Ricans don’t dwell. A popular philosophy in this country is the idea that no argument or quarrel should last more than three days. Holding grudges, refusing to forgive and staying angry can corrupt a person’s happiness greatly. Learn to let go.

4. Costa Ricans have high life expectancy, 78.5 years. This high life expectancy is thanks no doubt in part to the country’s excellent health care system, which offers high quality care at an affordable rate – about 1/3 to 1/5 of the price of the same care in the United States.

5. Costa Ricans eat healthy and fresh foods with very few preservatives. Costa Ricans eat a fraction of the amount of dairy, red meat, refined sugar and processed foods that Americans do, and they avoid the sour mood swings associated with these products.

6. Costa Ricans enjoy a slower pace of life in a tropical paradise. A slower pace of life offers less stress than what you will find in many places in the U.S.

7. Costa Ricans like to please. Some Costa Ricans can be agreeable to a fault; for example if you ask a local for directions that they don’t know, they might give you the wrong directions because they don’t want to cause a disagreeable situation by saying they can’t help you.


Many of you live and work (a lot) in places like Chicago, Rochester, Winnipeg, Boston, Philly and New York, but you and your clients can still adapt elements of the Pura Vida lifestyle. Enjoy your successes, don’t dwell on your failures or hold grudges for more than 72 hours. And always keep in mind the importance of relationships with family and friends--on social capital over financial capital.

Best, HB

Our blog has more, as does the FREE Resources page of our website.


TAGS: Costa Rica, Happiness Index, Pura Vida, Shilo Urban, social capital vs financial capital

Monday, January 12, 2015

What We Can Learn from the Costa Ricans

As we discussed last time, our big prediction for 2015 is that we’ll continue to live in an era of extreme volatility. The highs will be higher, the lows will be lower, and there will be more unpredictable days on the horizon than predictable ones. As James Stewart opined in Friday’s New York Times, “volatility will be the new normal.” It’s not all bad. Just volatile. For instance, the equity markets, labor market and fuel prices (for consumers) are in better shape than at any time since the Great Recession. But the global economic slowdown, combined with meager wage growth and a new wave of terrorist gains continues to wreak havoc on the psyches of investors, business decision makers and consumers at large.

We’re not in a position to recommend solutions, only this advice—be ready for everything, stay on the alert constantly and seize opportunities when they arise.

There will be plenty of threats to your practices (and well being) this year--but also plenty of opportunities. Stay sharp and stay hungry. Just don’t assume the bait and lures that work so well today are the ones that necessarily help you land the right fish a few months from now. If you haven’t been fishing successfully for a while, do you know why? Just as important. If you have been reeling ‘em in for the past few years, do you know why you’ve been successful? If you don’t know how to replicate your success then you’re in just as precarious position as those on a losing streak.
More importantly, learn to enjoy life no matter what it throws at you—“Pura Vida” as they say in Costa Rica, where my family and I just returned from vacation. I’ve had more than my fair share of aggravation since returning, on top of crappy Northeast weather. But, that’s OK.

The benefits of being away from the daily grind for 8 days, combined with the adrenalin rush of zip-lining through the jungle at 80 miles per hour, surfing on the pacific, ATV’ing waist deep mud and watching a 500 pound Leatherback turtle lay eggs on a moonlit beach at 2 am, will pay dividends throughout the next 3 months of crappy weather, excessive taxes and endless deadlines.

Costa Ricans place a great cultural emphasis on family and friends as Nicholas Kristof once observed as well as a "higher priority on social capital than financial capital.”
Keep that in mind as you help clients plan for their life goals, not to mention yours.

More on that next week.

Let’s have a great 2015. HB

Sunday, December 28, 2014

2015 Prediction? Be ready for anything—and don’t stop getting ready

At a family dinner over the Holidays, my father in law leaned in to me and said, “Hank, you’re a blogger. You have access to a lot of research and smart people. What’s your big prediction for 2015?"

Now my father in law’s going to be 95 in March, but he reads 3 or 4 newspapers cover to cover every day. He constantly analyzes his investments, and is still active in local politics. He’s sharp as a tack and I wasn’t going to get off easily with an off-the-cuff prognostication.

I said, Dad. “I don’t really know.”
“Why not?” he grumbled.

I said, “it seems everything’s just more volatile than it used to be. The good stuff gets better at an increasingly better rate (think stock market, low-oil prices, improving job market) and the bad stuff gets worse at an increasingly depressing rate (depressingly low interest rates for savers, a global economic slowdown, record number of working age people out of the  official workforce, global warming, currency devaluation, Ebola, ISIS, cyber terrorism, etc.).” Even worse, sometimes the good stuff is what causes the bad stuff, I explained.
“Hmm,” he muttered, taking a painfully long pull from of his wine glass. I braced for the worst, hoping that a less-informed family member at the table would jump into the conversation with a suicidal comment that he’d quickly dissect and dismiss with a sardonic chuckle. Most of the time someone pulls through for me, but no such luck on this day. “OK,” he said. “Nice analysis, but what’s your opinion.”

I thought I had just given my opinion, but my father in law come of age during all night bull sessions in college and the corporate and military command and control era. A member of the Depression Era silent generation, he was a Fortune 500 exec, a Navy man and a chemical engineer. Each direct question requires a direct answer in his world view. Ambiguity and the knowledge sharing/link-and-tweet economy is an enigma to him. He assumes anyone with a byline is obligated to have a singular clear-cut opinion about something.

But that’s my point. There are just too many variables in the equation. By the time you have your strategy and game plan together, the playing field has changed. YOU HAVE TO BE READY 24/7/365 to change on a dime. As we’ve mentioned many times before in this blog, the winners are not necessarily the strongest or the fastest, they’re the ones who are the smartest and most agile.
Doesn’t matter if you’re in sports, business, the military, agriculture, the arts or any other human endeavor. You’ve got to be agile. You’ve got to be good at partnering, collaborating and sharing your knowledge. To that end, here are some excellent quick reads on the subject that came across our radar this week….

Justin Wolfers -- From Unemployment to Oil: The Big Unknowns of 2015

Thomas Friedman -- Is Vacation Over?
Paul Krugman --
Tidings of Comfort


As Steve Jobs liked to say, “Stay Hungry, Stay Foolish.”  Let’s have a great 2015. There are going to be some lows and some highs, with lots of roller coaster rides along the way. Let’s enjoy the trip and get after it!

Best, HB and team
Our blog has more, as does the FREE Resources page of our website.


Monday, December 22, 2014

6 Dumb Things That Business Owners Do at Year-End

With Christmas trees trimmed and Chanukah menorahs fully lit, the last thing that most of us want to talk about right now is year-end planning and tax mitigation. But you’ve got to, or else experts say you and your clients could have a heck of a fiscal hangover in the weeks and months ahead.

Josh Patrick, CFP®, a wealth manager who specializes in working with owners of privately held businesses, checked in with us recently about some of the really dumb things he sees business owners do at year-end. “If you’re spending money unwisely, you’re taking at least 60 cents out of every dollar you spend and just flushing it down the toilet, said Patrick, head of Burlington, Vermont-based Stage 2 Planning Partners.
Here are 6 of the biggest mistakes Patrick sees his clients make again and again at this otherwise festive time of year. Make sure you and your clients don’t fall into these common year-end traps.

1. Buying capital equipment you don’t need. Just because you’re having a good year doesn’t mean you should go out and buy equipment to get a tax write-off. Before buying capital equipment, do an analysis to see if there is a payoff for the expense.
2. Pay bonuses because you had a good year. Patrick warns about the “pennies from heaven” bonus. Employees don’t know why they’ve received the bonus. They surely will appreciate it, but if you haven’t told employees why they received the extra money it can turn into an annual sense of entitlement—not an incentive to work hard every year.

3. Rushing to acquire a business before year-end. There is nothing magical about December 31. “If you’re really not ready to close the transaction, don’t do it,” advised Patrick a frequent contributor to the New York Times “You’re the Boss column” and our client CEG’s Elite Advisor Report newsletter. “Rushing into any transaction, let alone buying a business, is always a bad idea. It’s really hard to do an acquisition that’s accretive under the best of circumstances. The only way to make a business purchase that actually works is to follow a purchase process very carefully that you’ve designed before you start.”
4. Rush because it’s year-end. Don’t rush to finish up a project just because the end of the year is coming, advised Patrick. “I made that mistake when I launched our new website. For some reason I decided that I had to rush to get our site up and running before the end of the year. One of the things I missed was making sure that all of the pages from our old site were linked to the proper pages on our new site. Our old site was never mapped to our new site. Because we didn’t map our site properly, Google penalized our site for almost a year. This happened just because I rushed a project for no really good reason.”

5. Increase your inventory.
If you or your client is a cash-based taxpayer, you can deduct inventory as you buy it. The problem with loading up on inventory is that you then have to sell it. If you have too much inventory, you can be sure that some of it is going to go bad. Don’t fall prey to end-of-the-year deals. They’re always just so your suppliers can make their numbers. Before loading up on inventory, make sure it’s returnable. Otherwise Patrick said you’ll be in the market for a full-size dumpster.

6. A tax write-off still means you’re spending money. The days of tax credits for buying stuff are long gone. Don’t buy stuff just because you have money burning a hole in your pocket. Your clients shouldn’t either. “A tax write-off is only part of the money you spend. It really does come out of your pocket,” admonished Patrick.
Be smart and think about your year-end purchases just like you would for one in April. If you need it and

Wishing you and your families a safe, happy and fiscally festive Holiday.

Best, HB and team

Our blog has more, as does the FREE Resources page of our website.


TAGS: Josh Patrick, Stage2 Planning, dumb things year end tax planning

Wednesday, December 10, 2014

Don’t Overlook the Quiet Voices in the Room

This is the time of year when many of us start thinking about brainstorming and drilling down into our organizational strengths and weaknesses. We look closely at our clients and customers to see which ones are most profitable, and which ones are sucking the life and energy out of us. We look at who we’d like to have on our client list and ask ourselves if we have the financial, technology and people resources to get those ideal clients—and keep ‘em happy. Makes sense, right?

If you have doubts about your people, think twice before casting your line into the outside talent pool. You’ll be tying up countless hours of staff time as you vet, argue, interview and recruit new talent that may or may not work out. Before looking outside, ask yourself  how well you really know the team you already have in place. Doesn’t matter if you’ve got two people or two thousand people on your org chart. Chances are you may not be aware of everything they bring to the table—especially the quieter ones.

The loudest aren’t the brightest

Phil Gilbert’s recent piece
Hearing Every Voice in the Room got me thinking about how often the introverts--the serious, quiet contemplators who actually think first before shouting out their ideas and opinions. They’re the ones who often have the best ideas, but tend to get overlooked when organizations or all sizes are looking for fresh ideas. It doesn’t matter if it’s a quick coffee room conversation or a formal offsite brainstorming session—the squeakiest wheels tend to get the organizational grease. Unfortunately, that’s another form or organizational complacency and rarely leads to innovation. Why? “Because team dynamics can easily get in the way of good ideas and the loudest voice often wins,” observed Gilbert.
“There’s always someone who dominates the conversation and others who defer to that person out of frustration—or worse, complacency,” wrote Gilbert a general manager of IBM Design. But the article reminded me of a conversation I had last week with Frank Rudd, new president of the Florida Society of Association Executives (FSAE), a 1,000 member organization with six full-time staff. Rudd is spearheading FSAE’s merger with another organization and he told me of the first things he did when he came on board was ask everyone at the combined organization—regardless of their position—to revisit all of FSAE’s programs and services and assess whether those programs were really things members wanted or were just continuing out of habit.

“One of the first things organizations can do is keep doing things the same way, just because that’s how it’s always been done in the past,” Rudd noted. He looked to see where each member of his team (and army of volunteers) could be best deployed—and not a single person at either organization lost their job during the merger. On Day One, Rudd replaced the automated voice mail system with a live human operator and soon he and his team began driving around the state and to hand deliver welcome packages to all the new members they’ve acquired during the merger. That’s right. Hand deliver! Don’t think that approach helps you get to know your stakeholders and your staff?

At Gilbert’s division at IBM, they focus on two things
: (a) getting everyone to contribute and (b) letting everyone’s contributions be heard. They start with stacking up sticky notes filled with ideas onto a whiteboard. Everyone is free to post or “popcorn” in IBM-speak until the ideas slow to a dribble. Then the team leader groups the sticky notes into overlapping and logical area. That, he said is how you go from thinking about “what’s not possible, to thinking about what’s possible,” wrote Gilbert. Because everyone has buy-in.


If you, or a talented but quiet person on your staff is afraid to step up and champion ideas, we recommend Susan Caine’s book “Quiet-The Power of Introverts.” She’s also a terrific speaker for your events. A former corporate lawyer and negotiation specialist, Cain said that when it comes to adapting to change, it’s important to understand that the introverts on your team aren’t “lesser contributors or less successful in social interaction.” Instead, they process knowledge and interact with their surroundings in a quieter way. “They tend to be passionate, but somewhat shy and value periods of solitude which allow them to be [optimally] creative,” she said.

Food for thought, especially when you’re “popcorning.”

Our blog has more, as does the FREE Resources page of our website.



Wednesday, November 26, 2014

It's All in the Family

As most of you will be hosting or traveling to family gatherings this week, remember that family dynamics are a lot like client relationships. They’re often rewarding and memorable, but can also be a minefield of emotions, tightrope-walking and innuendo. Focus on what’s good about your family, not what’s wrong with it. Here’s why.

Sometimes what’s said or done is often less damaging to family harmony than what’s NOT said or done. Why didn’t you invite Uncle Joe to the ball game last month? Why didn’t you apologize to Aunt Miriam for poking lighthearted fun at her dance moves at your sister’s wedding last year? Did you ever apologize to second-cousin Sam who assumed his invitation to your son’s bar mitzvah was “lost in the mail”? How about your brother in law, Larry, a lifelong Wildcats fan? Do you consider his feelings when the rest of the family is gathered around the TV cheering on the Bulldogs who are giving the Wildcats their annual Thanksgiving Day whuppin’?

Even if you’re from a large, extended family that (mostly) gets along like mine does, communication breakdowns and lack of clarity about responsibilities—anything from who’s bringing the cranberry sauce, to who’s taking over as grandmother’s healthcare power of attorney—can cause friction throughout the year, not just during the Holidays.

Separate your work persona from family persona

Another area in which it gets tricky for adults is separating your work persona from your family persona. At the office, you might be CEO, senior partner or dean of your department….i.e. you’re used to calling the shots. But in your family, you might be the youngest of four siblings and have to defer power of attorney to an older sibling or relative who might not have the same business experience or legal acumen that you do.

Family gathering are even trickier when several blood relatives work in the family business. Tom Hubler, president of Hubler Family Business and a frequent contributor to Elite Advisor Report that we publish with CEG Worldwide, LLC told us happy business families don’t discuss business at family gatherings. He said they also know how to “manage boundaries where normal business differences erode family relationships, or where family rivalry undermines working relationships.”

Hubler said that harmonious families, like successful family businesses, have four common characteristics:

1.      Commitment to harmony
2.      Clearly defined roles
3.      Emotional intelligence skills (empathy, self-awareness, self-confidence, self-control, etc.)
4.      Forgiveness
Remember that, even if you’re in the business of advising families on sensitive estate planning and wealth transfer matters.

Another of our Elite Advisor Report contributors, Hyman Darling, an estate planning attorney in Springfield, Mass. courageously shared his personal story about his own family inheritance disputes with the Wall Street Journal recently.

Hubler may have summed it up best. “Even with people you love, it is virtually impossible to be a family and not accidentally step on each other’s toes. What is crucial is to have the ability to say, ‘Ouch, that hurts,’ as well as the capacity to say ‘I’m sorry’ and ‘I forgive you.’”

Have a safe and happy Thanksgiving.
Best, HB
*** Our blog has more, as does the FREE Resources page of our website.


TAGS: Tom Hubler, Hubler Family Business, Gary Shunk, Family Wealth Dynamics, Hyman Darling, Bacon Wilson

Tuesday, November 18, 2014

Positive Thinking Isn’t All It’s Cracked Up to Be

I don’t want to be a Debbie Downer as you’re starting to get into the Holiday spirit. But, I couldn’t resist sharing Gabriele Oettingen’s recent piece about The Problem With Positive Thinking.

Obviously you don’t want to walk around shrouded in a black cloud of negativity. However, research has shown that being eternally optimistic can be just as debilitating as being overly pessimistic. Say what?
Experts say that fantasizing about “happy outcomes” all the time calms you down, and significantly reduces systolic blood pressure. Sounds good. So, what’s the problem? According to Oettingen, being overly optimistic can also “drain you of the energy you need to take action in pursuit of your goals.” She also argues that positive thinking tricks your mind into believing that you’ve already achieved a goal, thus “slackening your readiness to pursue it.”

Think about that if someone on your team is always playing devil’s advocate or if someone in your family isn’t always in the Holiday spirit.

The power of mental contrasting

So, you need to be on edge all the time if you want to hit your goals and keep competitors at bay? Well, that’s not the right approach either.  Oettingen says you need a “hybrid approach” that combines positive thinking with “realism.”
Here’s how it works: Think of a great client outcome such as landing an ultra-wealthy new client who came to you via a current client’s referral. Spend a few minutes imagining how your wish came true. Go ahead and let your mind wander. Then, spend a few minutes thinking about the obstacles that might prevent you from achieving your wish—for instance, you don’t have the infrastructure in place, or you don’t have a specialist in fine art and antiques on staff, or you don’t have someone who’s fluent in Spanish and Dutch. That’s what researchers call “mental contrasting”—and research shows this approach outperforms excessive optimism or excessive pessimism.

Here’s why our firm finds mental contrasting so powerful. On one hand, it really motivates you when it truly makes sense to pursue a dream hard. At the same time, it allows us to abandon our dreams more readily when a new project or idea just isn’t going to work out. That frees us up to go after other clients, projects or innovations when an eternal optimist would just keep “plugging away.” Mental contrasting works in dieting, exercise, sports, romance, war, business and most other human endeavors.

As Oettingen explains, “ Like so much in life, attaining goals requires a balanced and moderate approach, neither dwelling  on the downsides nor a forced jumping for joy.” What she didn’t explain is how to know where and how to draw the line between plugging away and cutting your losses so you can move on to more productive pursuits. More on that next week. As regular readers know, we’re big on starting your New Year’s resolutions early.  

We wish you and your family a safe, happy Thanksgiving. Just don’t expect to sail through the Holidays without some traffic, flight delays, family friction and extra pounds. That’s not being negative. That’s just being realistic. Save you energy and focus on the good stuff.

Best, HB

Our blog has more, as does the FREE Resources page of our website.

TAGS: Gabriele Oettingen, Problem With Positive Thinking, mental contrasting, early New Year’s resolutions.