Finance, finance blog

Why Exit Corporate America and a Six-Figure Salary?

My employer and I are parting ways after nine and a half years together.  It is an amicable separation, and I wish the [unnamed] technology corporation, and especially my soon-to-be coworkers the very best.  I am happy that the severance package is reasonably generous.

I feel a bit bad for my coworkers because they still face the same aggressive schedules but with about 30 fewer engineers.  However, the company is actively working to reduce headcount, and those left behind almost always bear greater burdens on their lives.  Sixty-hour weeks are not uncommon in the tech industry, and over the years I’ve endured the occasional 100-hour week. When that happens, breakfast, lunch, and dinner is brought in because there is no time to eat otherwise.

There was a time when I didn’t mind fifty- and sixty-hour weeks.  But that was when everything was new, exciting, and fun.  That was when I worked at the “old HP”, where almost anything was possible.  In the beginning I learned something new almost daily, and I love learning.

Here is why this “job separation” feels like a good thing:

  1. Severance pay is a nice perk.
  2. I believe my best talents are wasted in my current role.
  3. There is virtually nothing for me to learn in my current role.
  4. The is little chance of me moving to a significantly different role (within the corporation).
  5. I will never get rich working for a large corporation, unless I build it myself.
  6. Going to work feels like stepping into the Matrix.
  7. True creativity is treated like the flu… people avoid it as much as possible.
  8. I am willing to bet on myself and my talents!

I am passionate about creativity and I have largely refused to drink the corporate Kool-Aid.  Pretending to be a Kool-Aid drinker is extremely taxing, and feels disingenuous.

Creativity is more habit than raw talent.  Creativity can be exercised and developed, or it can be quashed and stifled.  Creativity is dangerous to boring people and their boring jobs.  In contrast, creativity is energizing to interesting and open-minded people.

I prefer to use my energy to improve the world in my own unique way, and with my own unique, somewhat flamboyant style.  I can relate from repeated managerial feedback that my style is not appreciated by former employer.  My style is friendly, lively, and centered around humor with a touch of sarcasm.  Liveliness, humor, and particularly sarcasm are not appreciated in my former corporate realm.  What passes for humor is so sanitized that any pre-existing wit is sublimed into the corporate HEPA filter of political correctness, anxiety, self-censorship and banality.  That culture is one reason this [unamed] corporation’s advertisements are so uninspired.

I am managing my own company now.  It is a start-up, and it is my passion.  It is being built around disruptive technology — technology that will make waves in the world of investing. Technology that few will understand, but which produces results that almost anyone can appreciate.  The culture of this new company will be based on a simple idea — be bold.

 

 

 

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decisions, editorial, finance blog, financial

Jobs, Jobs, Jobs: an Entrepreneur’s Perspective

It’s hard, but I believe that if you can’t find a job then make a job.  I have been working or in school (or both) since age 11 or 12.  I had a shared a paper route with another paperboy (delivering alternate weeks) for a couple years.  I worked odd jobs while in junior high and high school including painting fences, mowing lawns and babysitting.  In late high school I had summer jobs doing things like HVAC maintenance (as an assistant/gopher), a surveying assistant, and installing Ethernet cable.  I even did freelance work for a small/medium-sized publishing company, producing graphics and slides and sent in over a 2400-baud modem.

I always found a job, because a) I needed the money for college, b) I was willing to take what I could find.

Now that I am a professional I have steady work.   I’ve also continued to be an entrepreneur as I worked.  If I was laid off and couldn’t find work I’d like to believe that I would continue to pursue my entrepreneurial effort.  I’d take part-time work (like I did during my school years) to pay for the basics.

I write this after having returned from an internet entrepreneurial group meetup.  I get to meet and reacquaint with other entrepreneurs at varies levels in the entrepreneurial process, from “haven’t a clue, just getting started” to “been self-employed for 20+ years”.

If your are unemployed, I’d encourage you to consider what job you would like to create for yourself.  Sure, keep applying for “regular” jobs to, and if a good-enough one comes around, take it.  In the mean time apply yourself to developing your own small business.  I recommend something with low start-up costs, and something that you have a passion for.  You may find yourself developing new and valuable skills in the processes…  Discover talents you didn’t know you had.

You may, just may succeed in creating a wonderful business.  Even if you don’t, you will learn more about yourself, your talents and what you really like (and don’t like).  So when you do land that cushy corporate job, you will have a better idea of how to shape your career.  Even after landing that job, you might find yourself dabbling in entrepreneurial enterprises.

decisions, editorial, finance blog, financial

Financial Opinion on Marijuana Legalization

Marijuana Plant
Marijuana Plant in Pot

As a non-user of marijuana, I find it interesting and unfortunate that many other non-users are opposed to marijuana legalization.  My  argument starts fiscally.  Illegal marijuana is a net cost to society.  It finances crime syndicates both in the US and particularly Mexico.  Illegal marijuana also poses several direct fiscal burdens:

  1. Law enforcement costs to arrest and pursue marijuana use and sale cases.
  2. Expenses to incarcerate marijuana transporters, sellers, buyers and users.
  3. Cost of taking employed users away from their jobs and family.

Conversely, legalized marijuana provides fiscal benefits:

  1. Decreased law endorsement expenses.  Law enforcement can focus on under-age (under 21) marijuana crimes.
  2. Decreased incarceration expenses.   Freeing non-violent users (and sellers) from prisons will save tremendous sums of money.  Further not incarcerating such people in the future saves money.
  3. Otherwise law-abiding individuals will retain jobs.
  4. Tax revenue can be collected on legal marijuana.

That is just the beginning of my supporting argument.   Think of the other “Freakonomic” effects of marijuana criminalization:

  1. Drug violence in the form of turf wars and transportation route protection (esp. at border crossings).
  2. Financial support of other illegal enterprises, such as human smuggling and weapon smuggling.
  3. Lack of quality controls (regulations) leading to contaminated (with pesticides) and laced marijuana leading to sickness, disease and occasional death of consumers.

Please note that I am NOT advocating the use of marijuana, in the same way (as a non-smoker) that I do NOT advocate the use of tobacco!  I avoid both because of their negative health effects.

However, I do use alcohol.  I like microbrew beers, fine Scotch, and assorted other libations.  I have done some research and have learned that 1-2 alcoholic drinks per day is an overall  health-enhancing activity.

I liken marijuana prohibition with alcohol prohibition in a few ways.  For example, both have lead to increases in organized crime and related violence.  And both reduced sales tax revenues.   Further, both moratoriums have lead to poor quality products… such as blindness induced by the lacing of ethanol with methanol during Prohibition.

Now I switch gears to the ethical arguments.  I have seen a loved one die of cancer and cancer-induced starvation.  Cancer and chemotherapy frequently leads to nausea and vomiting.  These are miserable symptoms and lead to weakness and premature death.  The 70-something person I refer to was a vital, strong and healthy person before cancer struck.  He could do manual labor in his 70s that 30-year-olds would struggle to do.  And his mental faculties were also razor sharp.   Nonetheless his cancer deprived him of the ability to eat and retain food.  This reduced his weight from a trim 165 pound pre-cancer 6’1″ frame to a sad 110 pounds.  I personally believe, based on my research, that marijuana would have helped his appetite and nausea, which would have greatly improved his *quality* of life.

There you have it.  Financial and ethical arguments for the legalization of marijuana.  Note, I don’t couch the arguments in terms of medical marijuana… I speak in general terms.  I have had friends and dare I say colleagues who have used marijuana.  Some of whom have retained great talents and intellects.  On close inspection I have seen their short-term memory impaired in a manner similar to that produced by overindulgence in alcohol.   In my college years I have “babysat” many an alcohol overdose “patient” including one time we had to call 911.  Conversely, I never had to “babysit” a marijuana OD person.  My research confirms that anecdotal evidence.  Cliff Notes version: “Alcohol OD bad, marijuana OD… virtually impossible.”

It makes no sense to make marijuana illegal.  Tobacco and alcohol are arguably more dangerous… but society has wisely seen clear to regulate rather than prohibit their sale and use.  Marijuana should be no exception.

decisions, editorial, finance blog, financial, Investing

Stimulus Hypocrisy

Are you excited about Obama’s campaign speech, State of the Union Address, jobs speech presentation to a joint session of Congress?  If so, tune in to hear platitudes and ineffectual, half-backed rhetoric.  Extended unemployment benefits, trivial hiring incentives, infrastructure, stimulus, Keynesian hyperbole and excuses.

I try to stay out of politics on this blog, but I feel compelled to comment about gross fiscal negligence.  I accept the argument that US GDP as a percentage of global GDP is susceptible to decline.  As an US citizen I see no reason to accelerate the decline.  For elected officials to do just that is negligent, naive, or fundamentally hostile to the general welfare of the United States.

The fact that the US has been so successful from 1945 to present is a testament to something unique and special about our whole socioeconomic system.  The fact that we have righted or ameliorated our past social mistakes while improving our economic quality of life is remarkable.

Why our President is so hostile to basic economic factors is shocking.  Historically massive US National deficits siphon capital from the private sector.  Federally-manipulated low interest rate actions (QE1, QE2) sap safe investment opportunities from senior citizens, while fueling speculation in gold, silver, and commodities ranging from oil to corn to aluminum.   Putting the hammer down on domestic oil and natural gas production, particularly off-shore, puts another deep bleeding gouge into the US GDP.   Presidentially-dictated EPA mandates on coal plants put US electrical production in limbo.  Crony-capitalism (or faux capitalism) puts basic free enterprise on notice to be politically correct as a first priority.

I have been silent too long.  I avoid social political issues, but I must address fiscal political issues.  This is my first salvo.

bond funds, bonds, decisions, finance blog, financial

Bitcoin: The More the Merrier, up to 21 Million

S&P made the right declaration: AA+.  Moody’s and Fitch showed relative weakness.   The downgrade of US Treasurys makes complete sense given that US debt loads will easily surpass 100%  of GDP within a decade.  The US Treasury accuses S&P of negligence for not using their $20T vs $22T figures.  I’ve heard stronger arguments from 8th grade debate teams. [Been there. Done that.]

Here I am, Joe investor, watching the markets whipsaw like mad.  I braced for impact in my oh-so-slow way and mitigated perhaps 10% of the damage, but my investments have been generally damaged too.

Maximum caution lies not on either side of the coin, but on the edges.  100% “safe” investments are not safe in the same way that 100% aggressive investments are not safe.  Safety should be measured in terms of the following risk factors 1) situational 2) statistical (non-monetary)  3) inflationary (monetary).

In the midst of worldwide and US market turmoil there has been similar chaos in the fledgling currency called bitcoin.  It is so “new” that my spell checker suggests “bitchiness” or “bit coin” as alternatives.   Meanwhile I’m thinking of a very small exposure to bitcoin as an alternative to precious metals or commodities.

I should disclose that I have I have an emotional connection to bitcoin.   Bitcoin has aspects of finance, technology, and financial engineering that are intriguing to me.  So please consider this factor as I continue to write.

Bitcoin is all that fiat money is not… Bitcoin is finite!   The number one rule I am painfully learning about ANY fiat currency is that it is potentially infinite.  (Unbounded, if you will.)  The fiat currency “presses” are only bounded by the constitution and discipline of the political systems that underlie them.  And these very systems have show over historically documented periods to be ultimately undisciplined. Simply put: lack of monetary discipline leads to economic calamity leads to runaway inflation.

That is one factor that is engineered against in the bitcoin ecosystem.  The bitcoin “printing presses” are inherently limited to 21,000,000 bitcoins.  Further some bitcoins will be forever lost into the digital black hole.

I am not here to say that there are not flaws with bitcoin (BTC).  Just that very few have been discovered yet, and those are very minor so far.  I am saying that bitcoin also has unprecedented advantages: 1) digital portability, 2) relative anonymity, 3) potentially fee-less transfer, 4) agent-less security, 5) inflation-resistance.  I love all of these factors, especially resistance to inflation.

I am here to say that the business cycle is real.  There are booms and busts.  And there is government meddling with the business cycle that, in the long run, only magnifies booms and busts.  And that bitcoin is one possible antidote.  That said, I am sticking with stocks, bonds, ETFs, etc in a not-so-contrarian manner.  I just happen to be mining a few bitcoins on the side.  Not familar with bitcoin mining?  Google it!  🙂

bond funds, bonds, finance blog

Fallout from the S&P US National Debt Downgrade

Kudos the S&P for being the first major debt rating firm to downgrade US debt to AA+.  Essentially they warned Congress that $4 trillions in cuts was required in a debt ceiling deal, Congress only ponied up about $2 trillion.  Bill Gross of PIMCO saw this coming as did many, many others including this finance blog.

The importance of the credit downgrade is the message it sends to voters and to Washington:  The US Treasury  is not immune the market realities of global economics.  The giant US credit card has terms and conditions ultimately dictated by global bond markets.  As debt-to-GDP ratios increase so will borrowing costs.  The long-term trajectory of US debt growth, under current law, is staggering.  Further the cocktail of massive debt, out-of-control debt growth, and a weak US economy do not bode well for future US debt ratings.

Unfortunately I don’t think this message is being heard or understood by a sufficient number of Americans.  Gross and El-Erian get it.  The US House of Representatives is starting to understand. The Senate and the White House do not.  Neithe does the US Treasury saying “There is no justifiable rationale for the downgrade?”  Seriously, what meds do they have to be on to say that with a straight face?  The American public has a degree of understanding, but not sufficient concern or attention.

The fallout of the downgrade will be modest but wide-ranging.  It will be good news for AAA rated companies and countries like Exxon Mobile, Britain and German.  The debt rating will be bad news for adjustable-rate mortgage holders, US bond holders, and entities that are required to hold US Treasuries.

editorial, finance blog, financial, Investing, Small Business

9.2% Unemployment, not just for Europe

Not hiring 2011 When did I wake up in Europe? I want to go home, to the USA that I remember.  9.2% unemployment is for France and Italy.  I’ve been to these countries — nice places to visit — but not to work hard and get ahead.  High unemployment is cultural, normal, systematic.

Is Germany the new USA?  It’s the only European country doing well.  Germany has pride and strength of purpose.  Germany has its fiscal house together.

Is the USA becoming the next France?  Jobs for government workers, modest jobs security for those with jobs, and very few prospects for the unemployed and for recent college graduates.

The fixes for our current economic mess are not rocket science.  I agree with Bill Clinton’s recent comments… the corporate tax rate needs to be reduced.  The U.S. government needs to reduce the self-employment tax that is a huge drain on U.S. small businesses.  Congress and the Administration need to encourage, rather than stymie, domestic oil and natural gas production.  Finally,  an intervention is needed to halt Washington’s latest spending bender.  Washington has been drunk behind the wheel of a massive M1 tank, trying to drive the economy, whilst drifting lane to lane and taking out the odd car here and there.   That tank, fueled by 14+ trillion of debt, is about to find the price of fuel is about to rise.

Now is not the time for platitudes, or experiments.  Now is the time for prudent action.

I am sad that the Space Shuttle is being retired.  Such action is merely a symbol of where the US Government, en masse, sees the USA heading.  This need not be the case.  The US, as a whole, has all that we need to succeed.  We are are free, independent, creative, and motivated.   The US has shown repeatedly the resilience to challenge adversity and thrive.  Why so few lawmakers can see this — communicate this — is baffling to me.  Are they simply economically ignorant?  Or indifferent?

Until some economically sane action emerges from Washington, I am hedging my personal finances.  I’m positioning against the real possibility of long-term, government-sponsored inflation.  I’m factoring in the likelihood of the government CPI (CPI-U Urban Consumer Price Index)  understating true inflation and overstating the real US GDP.

There is a chance, a glimmer of a chance, that the current debt ceiling negotiations will lead to economically sound changes.  I think the chances of that are less than 20%.  I will watch closely and act accordingly.