Recognizing Opportunity

Thoman Edison once said, "Opportunity is missed by most people because it is dressed in overalls and looks like work."

Over the course of my career I have on multiple occassions had to have discussions with employees that play on this theme. Each year that a new crop of young and ambitious graduates enters the workforce, it seems I have to have these discussions with more frequency. I've been able to categorize the behaviors into one of the following:

"Cart Before the Horse Syndrome" - Otherwise known as pay me more now and I'll accept more responsibility later. Those of you who share my beliefs probably find this absurd and almost laughable. If it weren't epidemic and completely frustrating, I'd laugh also. Where in the course of time did parents raise their children to believe that hard work is NOT the key to success? It seems that the current message form parents, teachers, and professors is that employees are entitled to be promoted before they earn the required experience and to question the policy and operational decisions of their superiors.

"Reversed Polarity Disorder" - Otherwise known as laziness. Laziness is a mind set and not a physical condition. My favorite stock speech for this condition includes the line, "if you spent half as much energy working as you do trying to avoid work you'd have my job by now". That usually gets their attention. Especially the ones concurrently afflicted with "Cart Before the Horse Syndrome". This condition has no known cure due to lack of motivation to achieve goals.

"The Leapfrog" - Otherwise known as "if I don't like the answer you give me (i.e. raise or promotion) then I'll just go over your head. This dreaded disease is a career killer. This will put you on the fast track to the unemployment line in any organization worth it's salt.

"Distorted Perception of Self" - Ever notice how some people just can't stop talking about how much they mean to the company? These people trip over themselves to point out what they do, which objectively examined is considered their JOB. Beware the employee with this trait because a case of "reversed polarity disorder" is lurking in the shadows.

There are more, but these are the most frequently diagnosed. I have some advice for anyone suffering from any of the above afflictions. Keep your eyes and ears open. Respect those with more experience than you and value the time spent with them as this will accelerate your learning curve. There is nothing wrong with having frank discussions regarding your position in the organization and the "plan" for you, but making demands will stunt your professional development. Above all else..... work hard and at every opportunity try to make your bosses job easier. Why? Because we didn't become bosses by not being able identify the behaviors listed above and WE are the people making the decisions that are for the greater good of the company... not each individual employed by the company.

Exterior Wall Framing: The 2X6 Advantage

An old friend who is in the planning phase of his new home asked me today about the advantages of framing exterior walls with 2X6 studs instead of the conventional 2X4 framing. Chris found the information informative and suggested posting the information that I conveyed to him. Much like anything that is considered an "upgrade" there is added expense. You can assume roughly $1 per square foot of additional wood costs, which include the studs, plates, and window jambs. So what is the advantage? Well, the 2X6 exterior wall framing creates a 5 1/2 inch pocket to install insulation over the traditional 3 1/2 inches. This roughly translates to achieving an R-19 rating over the traditional R-13. If you decide to go with 2X6's there are two things that I highly recommend to maximize the thermal efficiency of your home. First, a minimum 1" rigid insulation board should be applied between the stud wall and the exterior sheathing and you will approach an R-24 rating. Second, upgrade the blown-in attic insulation to an R-38 or higher as heat loss is greatest through insulated attic areas.

If you are interested to know how long it will take to recoup your investment, most experts agree that there is a 1-3 year period before the true cost savings exceed the initial cash layout. Scientists at the Building Research Council at the University of Illinois have published a study that indicates there are two important factors which determine the rate of payback. First you must calculate the number of heating degree days in the region of the country in which you live (this is available through the National Weather Service). If you live in an area with 5,750 degree days or more per year, your payback will be much faster. The second factor is elevation above sea level. For every 1000 feet gained in altitude there is 5% less heat lost to conduction.

Bottom line is that if you are building a home that you intend to stay in for years to come and are interested in maximizing your homes efficiency 2X6 exterior wall framing is worth the added expense. I'd recommend discussing the means and methods of the framing with your builder because as you can see there are ways to maximize your investment with very little added expense.

Gimme the Loot

For all you impatient folk....

https://sa1.www4.irs.gov/irfof/lang/en/irfofgetstatus.jsp

Check out the status of your IRS tax refund !!

Clinton Exit Strategy

Goodbye Hillary. Obama's 17-point landslide victory in Wisconsin yesterday is a sure sign that the Hillary express is out of steam. She is drawing a line in the sand with Ohio and Texas. That strategy has proven faulty, ie: Rudy Guiliani and Florida. Definately a sound strategy for defeating momentum, which Obama definately has alot of. His campaign is like a snowball rolling down a hill. Her campaign is like the Titanic after hitting the iceburg - taking on water. Only question remaining is when will she pull the trigger and stop the bloodletting? After Ohio? Maybe Pennsylvania? She wouldn't dare stay in after being embarrased in Texas. Every day she stays in starting now is comparable to opening up the window and tossing stacks of $100 bills into the wind. At last report she kicked in $5 million of her personal fortune to continue her effort. What's the definition of insanity? At least Mitt Romney surveyed the landscape and realized it's more gratifying to maintain his amassed fortune than be President. Is it just me or is Bill Clinton losing his marbles? As good of a liar as he is, he can't even sell me on the fact that this isn't all about him. I heard soundbites on the radio this past weekend where he actually said "A vote for me..." and had to correct himself. For me the jury is still out on who the best candidate (on both sides) is the best choice, but as a pretty good judge of character I can tell you that we as a country are much better off with her not in holding the highest elected office in the land.

President's Day Reflections

This is an extremely good post from one of my favorite finacial blogs over at Money Crashers.

http://www.moneycrashers.com/

Presidential history is extremely interesting to me. I agree with the premise that we as a nation should quietly reflect on the philosophical and moral direction that we are taking versus the intentions of our founding fathers. Bottom line: dream big, surround yourself with good people, and be generous with time, money, and heart. Advice that endures for all time.

Fundamentals of Engineering

If you've read more than one of my posts you can see that there are some recurring themes. I always have multiple projects that I'm working on at any given time. The most challenging undertaking I've been working on recently is attempting to pass the Fundamentals of Engineering exam (FE or EIT). This is a logical next step in my career, but it is not an easy step. The exam covers all the favorites: calculus, trig, statistics, probability, dynamics, statics, ethics, etc.. Passing of the FE enables the candidate to take the Professional Engineer's exam, which is the pinnacle of professional licensure in the engineering field. Actually, I should be studying right now instead of writing! Oh well, frequent breaks are a necessity to reduce red eye. The exam will be given on a Saturday in April. The exam is 8 hours split into two - 4 hour sessions. The first time I took the exam I failed. I've found out this is not an uncommon outcome. The format of the exam requires not only mental, but physical stamina as well. During my first sitting I was wiped out by the middle of the afternoon session. I've committed to getting into better physical condition for the next time. This theme trancends to other areas of your life other than test taking. Those who can combine mental and physical fitness can achieve greater levels of success in all areas of life. That is the theory I'm currently working with. Stay tuned for the results!

Paint Your House

Recently my wife and I decided to paint our home. For us it was really a no brainer. We just moved into our new home in September 2006. We just had a one year warranty inspection and all the settlment cracks and nail pops have been fixed. So we are in no particular hurry since we aren't planning on going anywhere. Doing the painting ourselves will allow us to maximize the earned equity since we are only paying for supplies. So far we've done a bathroom, the office, the sitting room and have started the stairway walls. I guess this puts us at less than 25% complete. This is no small undertaking, but we are finding that it can be a rewarding way to spend time together. If you are considering painting your house or a room yourself there are a few key things that I would recommend. First, consult an interior designer and pick a palate. We are fortunate that one of our best friends is a designer and picked all of our color schemes for each room. I cannot emphasize enough how important this is to the final product. I never knew there were so many considerations to make when picking colors! Second, use premium paints and brushes. We went with Behr paint, which was highly recommended by Consumer Reports. Behr is sold at Home Depot, so it's easy to find. The finish looks great and it is easy to clean. It's also a great value. Third, take the advice of those who know. Everytime I've gone to Home Depot the representatives in the paint department have given me priceless information. If they tell you to use a primer with a particular color selection, then I would suggest you listen to them.
When each room is complete there is a sense of satisfaction that only comes from getting your hands (and most of the rest of my body) dirty. We're looking forward to being finished, but in the meantime we're enjoying working toward our goal. C'mon guys think about it... painting your house equals improving your home, increasing equity, and making your wife happy (except when you paint her arm accidently on purpose).... what's to think about ?

Movie Review: Untraceable

Diane Lane stars in this cyber crime thriller. I came in biased because I hated her so much for cheating on Richard Gere in Unfaithful. Think - Silence of the Lambs meets Dateline: To Catch a Predator. Strange bedfellows I'll admit, but intriguing nonetheless. A killer on the loose, torturing victims, and you can watch live by logging on to the streaming feed. The more people that log on and watch the faster the victim dies. Genious. Plot twists are believable, production values rate a B. Commits the cardinal no-no of having a plot line that goes nowhere, but all-in-all worth seeing. A touch of corny on the ending. I'd give it 3 1/2 kernels of corn out of 5. Wasn't bad for the Valentine's Day dinner and a movie ensemble with the wife. It was a decent compromise situation between Juno and Step It Up 2. If you go see Fool's Gold I will personally come by your house and smack some sense into you. JJ out.

The Bias of Economic Reporting

I regularly watch Kudlow & Company on CNBC. The host, Larry Kudlow, has been involved in economics and politics for decades and his show is a reflection of his experience. What I enjoy the most is his optimistic outlook that is backed up by common sense data and graphics that make sense. In my last post I discussed the alarmist mentality surrounding foreign investments in the U.S., Kudlow pointed out on tonight's show that 25% of our GDP is currently in exports. In my post I'd indicated that foreign investment in our assets isn't a bad thing and that the current trend is actually a part of the natural business cycle. I was pleased to hear Kudlow reinforce that. Kudlow indicated that while the building industries and retail are taking a beating right now.... exports, railroads, and "smokestack" industries are gaining ground. The ebb and flow. Most news sources are discussing the economy as if the sky is falling yet the most dependable and frequently used economic indicators prove otherwise. The current state of the economy is one of stagnation. A product of the economy catching up to the anti-inflationary actions taken by the Fed. Kudlow suggests that the first round of fed cuts late last year are just now affecting the market. If Kudlow (and his panel) are correct, we can expect an economic jump start within the coming months and leading out of the Spring. The bottom line here is that we as consumers should seek multiple sources of information to base our economic decisions. Some news sources present information in a biased manner. At the end of the day it is wise to remember that television news still has a responsibility to be entertaining. Sometimes the effort leads to sensationalism. Kudlow is one of the least sensational (and probably least viewed), but his fact based insight into the economy is reassuring and very informative. BTW, the best book I've read lately that really describes the business cycle is "Mad Money - Sane Investing in an Insane World" by Jim Cramer. Give Kudlow & Company a chance on CNBC at 7pm, you'll enjoy it. I'll end with a Kudlow quote, "Kudlow and Company aims to be right on business, right on America, and right on the Money. We believe that free market capitalism is the best path to prosperity."

Foreign Interest in American Assets

One of my favorite blogs that I read daily is All Financial Matters. Today JLP shares an excerpt from an article by Geoff Colvin in the recent issue of Fortune.

http://allfinancialmatters.com/

I think this is a little bit alarmist, but it displays perfectly the power of compounding. Anyone with a high interest savings account or reinvesting dividends back into stock accounts will agree that over time compounding shortens the distance between you and personal wealth. Same principle applies to the foreign holdings in the U.S. It also shows that the interests we are invested in abroad are not appreciating at the same rate. Is this contibuting to the decline of the strength of the dollar and leading us toward inflation? I think that it is more realistically attributable to the normal ebb and flow of the business cylcle. Even though they are getting slammed right now, stock portfolios heavy in emerging markets have performed exceedingly well over the past 12 months. Before you run for the hills, look for a reversal of that trend. Reversal, not correction (>10% decline). Something else to think about ... why send all of our money overseas when it is still so profitable for us to invest here as well? Those are the things that occurred to me while reading the article.

Get Low

Tonight I went back to the gym. By gym, I mean the "fitness area" of the "community center" in my neighborhood. There are a handfull of machines and some cardio equipment. All I can say is thank God for Lil' Jon and the Eastside Boys because after 20 minutes on the eliptical machine I wanted to throw in the towel. But then it happened...."From the window - to the wall !!" Lil' Jon screaming out across the rooftops. Comin' for to carry me home. I made it to 30 minutes before it felt like my quadriceps were going to blow out the front of my legs. Time to hit the showers, or eat tacos.... I couldn't decide which to do first so I did a drive-by with a water pistol on the local Taco Bell. In a way what Lil' Jon is trying to say is it's okay if the market goes through a correction from time to time. Those in the game for the long haul and who've seen a correction or two aren't bailing out. In fact, they doing their homework and spotting deals on great companies with great balance sheets. Come on in the pool folks, the water is fine. At least that's what occurred to me during those last 10 minutes of cardio.

Steroids in Baseball

Let me go on record as saying that I do not condone the use of anabolic steroids. Being an athlete and gym rat for the majority of my life I have been exposed to their use by teamates and training partners. I witnessed the negative effects on mood and their addictive properties. I guess what I'm saying is that in the world of sports, especially professional athletics, steroids are commonplace. This doesn't make it acceptable and it shouldn't be overlooked. They are illegal after all. I'm having a real tough time understanding how the use of steroids in professional baseball has become an issue requiring the full attention of the United States Congress. Today I read that Roger Clemens former trainer claims to have injected Debbie Clemens (Roger's wife) with anabolic steroids and HGH prior to a 2003 Sports Illustrated photo shoot. Does anyone really care? If the Clemens' want to risk their health and prosecution then they aren't very smart. Surprised? After all, he is "the rocket", not the "rocket scientist". The point is, I don't need Congress to tell me that professional athletes use steroids anymore than I need them to tell me that hippies smoke weed, or crackheads love crack. What I'd like for Congress to do is draft and pass legislation. I'd like them to pass legislation that makes sense and serves the American public not legislation so full of earmarks and pork for their supporters "pet projects" that the term scandalous barely begins to describe it. Here comes the daily cliche.....Congress has "bigger fish to fry". Steroids in baseball is a matter better left to law enforcement officials and Major Leauge Baseball to handle.

Economic Stimulus Plan ?

The plan congress has passed will give an injection of $600 cash to taxpaying individuals and $1200 to married couples. The plan will also temporarily increase conventional loan limits from $417,000 to $729,750 until the end of 2008. For those homeowner's with Jumbo loans this is great news. This will enable loans that are currently in Jumbo status to be refinanced at a lower interest rate. Or will it? Lenders are still hesitant to make residential loans of that size and have enlisted extremely stringent guidelines and underwriting practices in order to offset their risk. The largest obstacle is LTV (loan to value). Since the subprime mess began to heat up it has become impossible to find lenders willing to fund loans in excess of 95% of the home's value. To further complicate matters, even those with equity find themselves between a rock and a hard place (obigatory geological reference) due to decreasing property values. There is a home in my neighborhood that recently appraised for nearly $200,000 less than it did 2 years ago. In that scenario, the homeowner has lost all equity and will not qualify to refinance their jumbo loan into a conforming loan with the increased conventional loan limit. I think there are many people in this situation who purchased homes with little or no money down with Jumbo loans and have since experienced a decrease in their homes value. It will be interesting to see if lenders are forced to loosen up their guidelines in order to reap the windfall of profits from the hundreds of thousands of refinance opportunities to offset the huge losses incurred since the subprime mess began. Stay tuned.

Rock Hound

Geology is, among other things, the study of the cumulative effects of forces over time. Temperature, pressure, and mineral composition determine a rock's final personality. Many parallels can be drawn to our own lives. Ultimately we are the product of all the forces that have acted on us in the past, and of the forces acting on us currently. Unlike rocks, we have the distinction of being able to control many of the forces acting upon us. The management of these forces within the time we are given determines the aggregate. Sorry for the terrible pun, but I couldn't resist. Each of us is a project under construction. Any of you who've ever been involved in a constuction project knows that the quality of the final product is a direct result of hundreds of decisions made on a daily basis. Success is determined by the quality of those decisions and the information available to make them. That brings me to the point of all of this, which I will attempt to make without using anymore analogies. My educational background in geology fed my meticulous nature. My constant planning and information gathering have honed my project and life management abilities. I've learned to make informed decisions only after determining the best course of action. The intent of this blog is to make you the reader the benefactor of the wealth of information that I've garnished over time, and continue to accrue. I intend to post what I know. These posts will cover many subjects, but they will all be tied to the common theme of improving your life over time by making informed decisions.