Taking A Break

In case you’re wondering, I haven’t disappeared off the face of this earth yet – I’m just on vacation on the West Coast of USA, and I didn’t have time to blog this before I left.

In the past 9 days, I’ve covered LA, Vegas, the Grand Canyon and Monterey; and I’m now on the final leg of my trip in San Francisco. Pretty much loving the Californian weather, the long drives, and the FOOD right now.

Will be back to my usual blogging routine in early September – In the meantime, here are a couple of interesting reads I’ve come across in the past couple of weeks:

1. The Big Lie About Engagement Rings – anyone thinking about proposing / getting proposed to should read this.

2. The Disciplined Pursuit of Less from the Harvard Business Review. Great article describing how we should be decluttering our lives – not just in the usual time-wasters, but also saying no to some terrific opportunities if we don’t absolutely want/need them. Kind of ties into my recent Revenge of the Ping post too.

3. How To Do Presentations That Don’t Induce Suicide – awesome presentation about… how to do a presentation

Till next week! 🙂

How To Never Have Monday Blues Again

The Mondays after a long weekend or a vacation are the worst. You get into the office, and it’s like walking into the set of Night of the Living Dead. Everyone is a freakin’ zombie: blank eyes, slack mouth, and shuffling (not the LMFAO kind). This week started with one such Monday – we had a public holiday on Thursday, so most people took time off on Friday to enjoy an awesome 4-day weekend. The Monday hangover was especially severe.

I was feeling a little out of it myself on my way to work (totally losing control here – 2 glasses of wine is enough to destroy me… and I’m only 27). My Kindle had mysteriously stopped working which only served to annoy the hell out of me. So out of boredom, I turned to YouTube and scrolled to SNL’s classic Can I Have Yo Numba? video. Okay it’s not like the funniest video in the world, but it made all the difference:

It made me smile.

Everything changed after that. I got off the bus feeling considerably lighter than when I got on. That brought on another smile because I thought about the awesome things coming up in life: a stable salary, an upcoming holiday, and great-tasting coffee in the morning for 65 cents. Grinning, I stepped into the coffee line and breezed a cheerful “good morning!” to a colleague. She looked at me like I was crazy and exclaimed that she’d never seen anyone so cheerful on a Monday morning.

Behavior –> Motivation

It sounds clichéd, but smiling really does work, even if it’s forced. In 2002, researchers led by Robert Soussignan performed an experiment where participants were asked to grip a pencil horizontally between their teeth, naturally activating the muscles used for smiling. The participants had no idea that the experiment was about happiness, but reported considerably more positive reactions to several videos they were shown.

Say you attempt a fake smile. Just try it. Right now. Go ahead, I’ll wait.

Does your brain know that you’re faking it? Of course it does. But that action tricks your body into producing chemicals that make you feel happy anyway. It’s a textbook case of how your actions can trigger internal motivations – not the other way round.

By the way, this applies to saving and investing too. Most people wait for years to get the “motivation” to save and invest, and end up never starting because “willpower” never works. The truth is, all they had to do was get started – to save and invest as little as $50 a month. Once you get started, your body adapts itself to towards the action you’re performing, developing an “investor mindset” that triggers further investing behavior.

A System To Destroy Monday Blues

So – back to Mondays. I know, it sucks to go to work on a Monday after you’ve partied all weekend (Or in my case, had TWO WHOLE GLASSES of wine. Yeah, you know party rock is in tha hoouuusseee toniiiiight). But if you’ve gotta be at work for the next 5 days anyway, you might as well try to enjoy it, right? So SMILE. You’ll feel happier. And it’s been proven that happier people do better work, are more effective, and are more likely to succeed.

One tip: Set up a system to remind yourself to smile. Yes, it’s corny, but it works. Simply set a daily reminder to SMILE on your phone’s calendar to go off at the same time every day – I set mine to coincide with the lowest point of motivation in the day: walking from the bus to the office. My phone buzzes, I let out a huge grin, and the day automatically becomes awesome after that.

Try it out 🙂

Never Take Financial Advice from a Supervillian

I just caught the Dark Knight Rises last week. Okay, it wasn’t a terrible movie, but it’s just riddled with plot inconsistencies that I couldn’t resolve, like (SPOILER ALERT):

1. Why is there a random-ass prison in the ground, in the middle of some foreign desert, with no warden, no food, and a bunch of prisoners cheering each other on? And how did Bruce get to Gotham in like, 2 hours after escaping from said prison?

2. Once Talia dies a terribly unconvincing death, which eliminates the bomb’s mystery triggerman, why didn’t Batman just haul the damn bomb to the sea in the first place? (which would leave him a lot more time to make out with Selina Kyle?)

3. How was Jonathan Crane (Scarecrow in the first movie) planning to exile its rich citizens in the summer? (“You are condemned to exile… by swimming!” Wtf).

Stupidest Supervillian Financial Plan Ever

But the biggest plot inconsistency for a financial nerd like myself came from Bane’s hairbrained plan to bankrupt Bruce Wayne.  (Hat tip to this article from theatlantic.com).

  1. Take over the entire Gotham Stock Exchange
  2. Hack into Bruce Wayne’s account
  3. Buy lots of puts on futures that expire at midnight.
  4. Bankrupt Wayne so he’ll have to read cheerfulegg.com to learn how to get rich again

Let’s examine the loopholes in this plan. First, there’s absolutely no reason for Bane to hold the Gotham Stock Exchange hostage in order to break into Bruce Wayne’s account. A more subtle (and less risky) plan would involve breaking into Wayne’s brokerage, which probably isn’t located within the Exchange. Or better still, hire a hacker to break into his account online – certainly affordable for Bane’s considerable financial resources.

(Okay fine – a scene of Bane carefully keying in his banking token code into gothamnationalbank.com wouldn’t nearly be half as dramatic, and wouldn’t  make for good entertainment.)

Sexy Doesn’t Always = Smart

The biggest thing I’m confused about is Bane’s decision to buy a whole bunch of puts on Wayne’s account. If you don’t know what a put is, it’s a fancy-schmancy financial instrument that lets you profit when stocks go down (yes, they exist). And buying a whole bunch of them means you make a loooooooot of money when stocks crash – which is exactly what would happen if the stock exchange is under a supervillian attack. So Bane’s plan would actually have the opposite effect of what he intended – he would make Bruce Wayne so insanely, ridiculously rich that he could have outsourced the saving of Gotham to Spiderman or the Avengers.

My guess is that the scriptwriters just wanted to include the use of the word “puts” into the plot, because they sound oh-so-sexy. But as I’ve often blogged, the sexy thing isn’t always the smart thing to do. In fact, the unsexiest things you could do in personal finance are usually the smartest moves you could make:

1. Automatically saving a fixed amount every month, increasing it when you have an income increase,

2. Dollar cost averaging into a sensible portfolio of index-tracking ETFs.

3. Automatically paying off your credit cards in full every month to build your credit score, so you’ll get a lower interest rate if you ever need to borrow to buy a car/house/business.

Not nearly half as sexy as investing in hedge funds, or studying things like “delta” and “gamma”, or trading on volatility, or holding a stock exchange hostage, but they’ve proven to work over and over again. As Ramit Sethi often says:

“Do you want to be sexy, or rich?”