Sunday, October 30, 2011

Can an appreciation for classical music be learned?

I have often thought there is not a musical bone in my body. I did not grow up with music playing in my house, I did not learn to play a musical instrument when I was young and at church there was no singing coming from my family’s pew.

In my husband’s family each of his aunts and uncles played an instrument, his mom dreamed of changing her name to Iris and moving to Nashville to be a country singer and family events culminated with record playing or singing of their favorite tunes.

Needless to say my husband is a music aficionado. He listens to all types of music from alternative rock, pop folk, alternative country, contemporary jazz and new age. After attending a holiday party at the Milwaukee Performing Arts Center a few years ago that included a performance by the Milwaukee Symphony Orchestra he began listening to classical music.

We now attend one or two MSO performances each year. After the first couple of concerts I found myself enjoying the music, but wished I could appreciate it more. Then I stumbled upon this video in one of Trent Hamm of The Simple Dollar's Ten Pieces of Inspiration posts:

Last night we attended the MSO's "Basilica Series: The Eight Seasons" at The Basilica of St. Josephat. The performance included:

Vaughan Williams The Lark Ascending, Romance for Violin and Orchestra

Piazzolla Las Cuatro Estaciones PorteƱas (The Four Seasons of Buenos Aires)
Vivaldi The Four Seasons

In response to my original question can an appreciation of classical music be learned? I have to answer with an emphatic yes.  If you have any doubts watch the video and learn for yourself.

Sunday, October 23, 2011

Gender Wealth Gap is the Greater Problem

I read Mariko Chang's Shortchanged: Why Women Have Less Wealth and What Can Be Done About It for a personal finance book club.

Chang begins the book by informing us the gender wage gap appears to be closing. Women now earn 77.8 cents for every dollar men earn (an all time high) and women under 25 working full-time earn 95% of what their male peers earn. Women also make up 47% of the work force.

While I still can’t get excited about a 78% pay gap, compare that to this - women own 36% as much wealth; for every dollar a man owns a woman own 36 cents. Chang calls this the wealth gap. In the long run it is wealth, the value of assets minus debts, not earnings that is more important. Wealth is what sends your children to college, allows you to start your own business, and helps you make ends meet when you lose your job or your hours are slashed. Also consider with everything else being equal, women will need to support themselves an average of six years longer than men.

What factors contribute to the wealth gap?
Chang attributes the wealth gap to women’s inability to tap into the wealth escalator:
The variety of legal, institutional, and societal mechanisms that help some convert income into wealth at a much faster pace than is possible by savings alone. (Pg. 38)

The wealth escalator includes:
Work fringe benefits such as life and health insurance, paid vacation and sick days, and retirement contributions. Women are more likely to work in part-time jobs or in industries that do not offer fringe benefits such as the service sector.

The tax code has provisions more beneficial to those with higher earnings – capital gain tax rates and mortgage interest deductions.

Government benefits such as unemployment benefits which have minimum earnings thresholds. Women generally receive less of a benefit because they have lower earnings to begin with.

Also interesting to note, some government programs discourage asset accumulation. For example with the Temporary Assistance to Needy Families (TANF) people lose benefits if they have managed to save or if they own an automobile whose value surpasses the vehicle asset limit.

The Debt Anchor:
Women tend to have more debt than men, higher interest rates on their debts and are more likely to fall victim to predatory lending practices.

Women are more likely to be single parents and in divorce most likely to have custody of the children. Even those who receive child support have less money to save and invest. Also mothers face stereotypes in the workplace, whereas men experience a wage increase with fatherhood. Mothers receive a 4% wage penalty for the first child and a 12% penalty for each additional child.

Chang proposes suggestions to address the unequal burdens and consequences of care-giving, so that women who work just as hard as men and can be given equal wealth building opportunities. She points out we are only one of two industrialized countries without a national paid maternity (Australia is the other country).

My thoughts:
Shortchanged: Why Women Have Less Wealth and What Can Be Done About It is a slim book packed with important information that deserves more recognition than it has received. Every woman should be aware of the facts in this book. I had a difficult time finding a copy of this book and from the comments of my fellow book club participants others did as well. Let’s get the word out and on a final note let’s make sure our daughter’s have the tools and knowledge they need to navigate the financial world.

I want to close with the quote Marika Chang included at the beginning of chapter two:

My Aunt… died by a fall from her horse when she was riding out to take the air in Bombay. The news of my legacy reached me one night about the same time that the act was passed that gave votes to women. A solicitor’s letter fell into the post-box and when I opened it I found that she had left me five hundred pounds a year for ever.
Of the two-the vote and the money, I own, seemed infinitely the more important.
- Virginia Woolf, A Room of One’s Own

Tuesday, October 18, 2011

Miss Representation

Miss Representation 8 min. Trailer 8/23/11 from Miss Representation on Vimeo.


If you haven't seen this yet, watch it. After you’ve watched it hop over to Darryle Pollack’s blog and read her post Miss Rrepresentation: When will women wise up and rise up?

Sunday, October 16, 2011

Penelope Trunk gives wake-up call

I’ve fell for the promises “Find Your Passion,” “Get Unstuck,” “Follow your Bliss” all in five easy steps. Unfortunately, I’ve read the books, performed the exercises (well sort of) and attended the conferences. Where did they get me? Right back to where I started - stuck. That is until I listened to the interview Steven Roy had with Penelope Trunk. I learned more about goal setting in this one interview than with all the books and conferences combined.

Steven Roy is a 40-year old blogger who feels trapped in his day job. He hates working for someone else and wants to have his own business preferably something online. His goal is to be able to spend more time with his two young daughters. He writes the blog Ending the Grind and occasionally posts podcasts of his interviews with other bloggers.

Penelope Trunk is the author of the book Brazen Careerist: The New Rules for Success and writes at the Penelope Trunk Blog. It was in her post how to know what to look for that she linked to her interview with Steven.

At first Penelope’s response to Steven’s lack of any real goal seemed a bit brazen. Then I read some of her old blog posts on goal setting. The questions she asked Steven were nothing new. She has given advice on how to set goals and how to know ourselves over and over again. She became frustrated with Steven's lack of insight into how he wanted to live his life. For me the success of the interview is hearing a real life example of what you need to do and the questions you need to ask yourself to define your goals.

Penelope points out these are not goals:
Doing whatever it takes
To be home to spend time with your children. (This is the end result of a goal)
Building a blog readership (Not a good way to make money)
To be independently wealthy (This is for 5th graders)

To start with you have to be honest with your self and know where your strongest skills are.

Know your Myers Briggs score:
You can take the test for free here and here.
Since I get a different Myers Briggs result with each new test I take, I prefer the StrengthsFinder 2.0 though you do need to purchase Tom Rath's book StrengthsFinder 2.0 to take the assessment (you need the access key provided in the book).

Determine if you are inwardly or outwardly motivated:
According to Wikipedia:
Intrinsic motivation refers to motivation that is driven by an interest or enjoyment in the task itself, and exists within the individual rather than relying on any external pressure.

Extrinsic motivation comes from outside of the individual. Common extrinsic motivations are rewards like money and grades, coercion and threat of punishment. Competition is in general extrinsic because it encourages the performer to win and beat others, not to enjoy the intrinsic rewards of the activity.

Why is this important for Steve? Externally motivated people are not particularly good bloggers.

Determine what you want to do with your days:
Everyone has to work eight hours a day. If you have a family to support, you have to work eight hours a day. What do you want to do with your time? Talk to people, market, write? How can you make those eight hours good?

To determine what you want to do look at someone’s life:
Don’t look for a career look for a life. There is no way to know what career you’d be happy in without doing it. Look at people’s life. How can you do what they do to have their life? A business and a life go hand in hand.

When you own your own business you are actually trading employers for clients. Clients can be much more demanding than an employer. If you lose a big client you can be out of business.  Think about all the time spent marketing new clients; most entrepreneurs work many more hours than eight hours a day. Is this the life you want?

How much risk can you handle:
Steve has a family and a wife who stays home with the kids.  If he quits his day job he will no longer have employer sponsored medical insurance, sick days, holiday pay or vacation time. He will be responsible for self employment tax and paying quarterly income tax estimates. I have heard that before you quit your day job your side business should be generating double your current salary.  Plus, remember half of all businesses fail within the first four years. I have known business owners who have mortgaged their homes, drained their 401(k) accounts and charged up their credit cards to start a business that eventually failed.

Learn about yourself by looking at your actions:
Penelope thinks Steve likes his job, if he didn't like it he would change it right now.  This one really hit home with me.  I talk about changing careers and quitting my day job all the time, but I never do anything about it.  Why? I like certain aspects of my day job more than the thought of changing jobs or careers.  I've hated my job in the past and have done whatever it took to find a new job. I think Steve's situation is similar, if he really hated his job he would move in with his in-laws and quit his job right now.

Lastly, Penelope gave advice on how to be a successful blogger:
Nobody wants to know how great you are. To be successful you need to add value to people’s lives. People want to watch you change.  People want to watch how others live their life and learn from it. Don't spend time on a blog if you don't know why you are writing it.

Writing a blog is a lousy way to make money:
Penelope wrote for free for seven years before she was able to make enough money to support her family.  A better way to make money online is to have a great landing page and understand Google. All the markets are search driven right now.  Use adWords and adsense; sell something to people that is under-monetized.

After listening to the interview this is what I think Steven should do:
I couldn't help but think of all those hours he spends working on his blog; his goal is to spend more time with his daughters. Why doesn't he use this time to be with them? His gripes are that he is not able to walk them to the bus stop in the morning or take time off to attend their activities. It sounds to me like he needs a job that is flexible.  Once he determines how he wants to spend his days - talking to people, marketing, or writing, he should seek out people who do this type of work with a flexible schedule. Then determine how to do what they do. He could use his blog to brainstorm his ideas and to network.

If you enjoyed this post, you might also like:
Discovering my strengths
How to pull yourself out of a slump
Who are you meant to be?

Sunday, October 02, 2011

A personal finance book for women

I recently was asked to recommend a list of personal finance books for women. I had a couple of titles in mind, but decided to ask my local librarian for additional suggestions. She recommended Susan L. Hirshman's Does This Make My Assets Look Fat?: A Woman's Guide to Finding Financial Empowerment and Success. Recalling that Citizen Reader liked this book, I decided to check it out.

Susan L. Hirshman, a wealth strategist and CPA has written a book using dieting strategies as a metaphor for successful money management.

What I liked:
I liked Hirshman’s evaluation phase. Normally, I skip over the personal evaluation sections in money management books, but this one was easy to follow and worth doing. Hirshman stresses the importance of knowing what you have, what you can expect to save and what it is that you want to have. She recommends doing this analysis every five years (every three if you are near or in retirement). I also liked that she indicates items like cars and furniture are not assets.

The book is current, published in 2010 it covers the 2008 recession and the housing market collapse. Hirshman points out that a house is a place to live not an investment.

Hirshman does an excellent job explaining risk and the difference between diversification and asset allocation.
A portfolio that is diversified does not necessarily mean that it is well allocated, because you may have lots of different investments but allocation or the balance between the asset classes is not optimum. (Pg. 88)
She recommends rebalancing your investments on a yearly basis.

The book explains the different types of investments; stocks, bonds, ETF’s, and annuities. It includes a section on insurance and why we may need various insurance products. I liked that Hirshman gave the drawbacks and criticisms of investments (e.g. variable annuities) before giving her opinion.

What I didn’t like:
I thought the diet analogies weren’t necessary and at times out of place and down right annoying. I understand the need for a personal finance book for women; women earn less, take more time off from work and live longer etc, but are separate books really necessary to explain basic financial concepts?

Hirshman recommends rolling your 401(k) from a previous employer into your new employer’s 401(k) plan. Granted rolling this account into any plan is preferable to cashing it out, Hirshman should have told the reader many 401(k) plans have high fees and are limited in their investment options. Opening an individual IRA may be a better option.

Overall the book is a comprehensive introduction to personal finance. I would have recommended it as a book to purchase for future reference, but despite including a glossary of terms there isn't an index. As I wrote this review I wanted to go back and re-read a couple of items and was frustrated by the lack of an index.

As to my list of personal finance books for women, to date I have only two other titles:
Suse Orman’s Women and Money: Owning the Power to Control Your Destiny

Vicki Robin's Your Money or Your Life: Transforming Your Relationship with Money and Achieving Financial Independence

Do you have a favorite personal finance book I should recommend?