Table of Contents
- The Power of Pen and Paper
- Unhealthy Attachments
- The Myth of Multitasking
- Chicken With Oven-Roasted Tomatoes
Plain and simple: goal setting is the master skill of success. Harnessing this master skill in the New Year isn’t just about your convictions or your willingness to achieve a goal, but writing your goals down and turning them into actions. For reference, a study conducted on the graduates of Harvard’s 1979 MBA program revealed some interesting statistics about writing down goals. In the study, the class was asked if they had clear, written goals for their futures. Of everyone surveyed, only 3% had goals written down, while 13% had goals but not down on paper, and 84% said they had no goals at all. Ten years later, the Class of 1979 was surveyed again. The end result showed the 13% with goals not written down earned twice as much annually compared to their goal-less classmates. As for the 13% who had written down goals, they were earning ten times more than the other 97% of their class.
So writing down your goals should be your top priority. Though, when it comes to achieving goals, I find it best to use the SMART system–that’s Specific, Measurable, Actionable, Realistic, and Time-bound. To help you visualize the SMART system, I’ll give you an example: At the beginning of the year, so many people try to commit themselves to fitness. But they say it just like that. They want to get in shape, and that’s it. Alternatively, if they really want to achieve the goal of living a healthier lifestyle, they should say something along the lines of, “I want to work out three times per week and lose 15 lbs by March 31st.” This goal is Specific; a clear result has been defined. This goal is Measurable; each task can be defined by how much time and effort it will take to complete. This goal is Actionable; there are tasks set to make the goal achievable. This goal is Realistic; you’re aware that some things take time and overexertion is counterproductive. This goal is Time-bound; a deadline has been set.
I took a course as an undergraduate where the thesis was: to make an even greater commitment to a goal, make your goal public. So, on November 19, 2015 my bathroom scale showed me at 208.6. My goal by March 31, 2016 is to weigh 193.6 by that same scale. My second goal is to average working out three times a week. I will define a workout as either resistance training or an aerobic activity for an hour or more. If you see me in April 2016 or beyond, you can ask me if I made it.
Once goals are committed to paper and applied to the SMART system, you can focus not only on implementing your action plan, but really getting down to the nitty gritty: Why do you want to achieve this goal? As far as our fitness goal is concerned, there’s a big difference between wanting to look good in mirror and wanting to extend your life for the sake of you family. After that, goal setting is just a matter of focus.
There will always be an urgent matter to deal with, and if you devote time to the urgent, it’s going to ultimately get in the way of your ability to focus. You can’t let yourself get distracted, so appoint an accountability buddy or publicly declare your goals. You’ll be surprised at how motivated you can be when you know people are counting on you to follow through.
Together, we can all make 2016 the year of achievement.
Jim Parker – Vice President, Outside the Flag
Have you ever made yourself suffer through a bad movie because, having paid for the ticket, you felt you had to get your money’s worth? Some people treat investments the same way.
Behavioral economists have a name for this tendency of people and organizations to stick with a losing strategy purely on the basis that they have put so much time and money into it already. It’s called the “sunk cost fallacy.”
Let’s say a couple buys a property next to a freeway, believing that planting trees and double-glazing will block out the noise. Thousands of dollars later, the place is still unlivable, but they won’t sell because “that would be a waste of money”.
This is an example of a sunk cost. Despite the strong likelihood that you’ll never get your money back, regardless of outcomes, you are reluctant to cut your losses and sell because that would involve an admission of defeat.
It works like this in the equity market too. People will often speculate on a particular stock on the basis of newspaper articles about prospects for the company or industry. When those forecasts don’t come to pass, they hold on regardless.
It might be a mining stock that is hyped based on bullish projections for a new tenement. Later, when it becomes clear the prospect is not what its promoters claimed, some investors will still hold on, based on the erroneous view that they can make their money back.
The motivations behind the sunk cost fallacy are understandable. We want our investments to do well, and we don’t want to believe our efforts have been in vain. But there are ways of dealing with this challenge.
Here are seven simple rules:
- Accept that not every investment will be a winner. Stocks rise and fall based on news and on the markets’ collective view of their prospects. That there is risk around outcomes is why there is the prospect of a return.
- While risk and return are related, not every risk is worth taking. Taking big bets on individual stocks or industries leaves you open to idiosyncratic influences like changing technology.
- Diversification can help wash away these individual influences. Over time, we know there is a capital market rate of return. But it is not divided equally among stocks or uniformly across time. So spread your risk.
- Understand how markets work. If you hear on the news about the great prospects for a particular company or sector, chances are the market already knows that and has priced the security accordingly.
- Look to the future, not to the past. The financial news is interesting, but it is about what has already happened, and there is nothing much you can do about that. Investment is about what happens next.
- Don’t fall in love with your investments. People often go wrong by sinking emotional capital into a losing stock that they just can’t let go of. It’s easier to maintain discipline if you maintain a little distance from your portfolio.
- Rebalance regularly. This is another way of staying disciplined. If the equity part of your portfolio has risen in value, you might sell down the winners and put the money into bonds to maintain your desired allocation.
These are simple rules. But they are all practical ways of taking your ego out of the investment process and avoiding the sunk cost fallacy.
There is no single perfect portfolio, by the way. There are, in fact, an infinite number of possibilities, but based on the needs and risk profile of each individual, not on “hot tips” or the views of high-profile financial commentators.
This approach may not be as interesting. But by keeping an emotional distance between yourself and your portfolio, you can avoid some unhealthy attachments.
Fun fact; the human brain can only truly focus on one thing at a time. Need proof? Think back to the last time you were lost. There you were; driving around a labyrinth-like neighborhood, looking for a house number that doesn’t seem to exist. Without thinking, you reach over and turn down the volume on the radio. Why did you do that? It’s not like Bohemian Rhapsody is effecting your sight… but it is effecting your brain’s ability to focus on finding the house. And let’s face it, it’s hard to focus on anything else when Freddie Mercury is blaring in the background.
The same can be said for your goals and writing to do lists.
Almost 100 years ago, Bethlehem Steel was struggling. Charles M Schwab, (not today’s famous financial giant) was the president of the floundering company. Schwab didn’t know how to improve it, so he called in Ivy Lee, an efficiency expert.
Lee’s advice to each member of the company’s management team was to write a to-do list at the end of each day, which consisted of the six most important tasks to be done the following day. Then they were told to organize the list based on the highest priority tasks. They were told not to move on to the next item on the list until the other items were complete.
Lee told Schwab to wait three months and pay him what he thought the advice was worth. Three months later, Schwab sent a check to Lee for $25,000. Adjusted for inflation, that would be more than $500,000 today.
In your own planning, you can take Lee’s advice for free and use the night before to plan what you need to get done the following day. Setting out the most important tasks you want to complete the following day will help you to avoid time-wasters and distractions by knowing what to work on immediately.
A business friend of mine recently told me about a Microsoft study that said that the average attention span today is 8 seconds. And so people today, even at leisure, multitask. One of the things my wife Cindy, I, and our 20 year old daughter Erica like to do together is watch the TV show, Shark Tank. While we watch, both Erica and Cindy are playing games on their ipads or cell phones. I know attention spans are short, but I’ve commented more than once that I think they aren’t really doing justice to their game or the show.
Of course you can imagine how far my advice goes with either of them…
I love making a sauce that highlights the fresh, bright flavor of vegetables, roasted to bring out their deeper complexities. When you cook with real, whole foods, you have the opportunity to enjoy the unique taste each ingredient contributes to the overall flavor of the dish. This recipe celebrates real food for all of its beauty, flavor, and health benefits.
- 1 yellow bell pepper, seeded and thinly sliced
- 1 orange bell pepper, seeded and thinly sliced
- 1 pint grape tomatoes, halved
- 1 shallot, minced
- 4 garlic cloves, thinly sliced
- 2 tablespoons extra-virgin olive oil
- Sea salt and freshly ground black pepper
- 1 pound boneless, skinless chicken breasts, cut into bite-size pieces
- 2 tablespoons fresh lemon juice
- ¾ teaspoon smoked paprika
- ¼ cup thinly sliced green olives
- ¼ cup finely chopped fresh parsley
Preheat the oven 450 F.
Toss the bell peppers, tomatoes, shallot, and garlic with the olive oil on a rimmed baking sheet. Season with a pinch each of salt and black pepper. Roast until the peppers are just tender and the tomatoes start to collapse, about 20 minutes.
Meanwhile, in a medium bowl, toss the chicken with the paprika and 1 tablespoon of the lemon juice. Season with a pinch each of salt and black pepper. Scatter the chicken on top of the roasted tomato mixture and roast until the chicken is just cooked through, about 10 minutes.
Add the olives, parsley, and remaining 1 tablespoon lemon juice and toss to combine. Season with a pinch each of salt and black pepper and serve.