February 27, 2011


mind the gap: knowing vs doingWhat we do isn't always logical because we aren't Vulcans or computers. How would you answer the following three questions? How would your spouse?

Question 1

Would you rather buy an item
A) here for $100 or
B) nearby for $50?

The $50 difference looks huge. Depending on your perspective, you could buy the item for half the price nearby or double the price here.

Question 2

Would you rather buy an item
A) here for $1,000 or
B) nearby for $950

Now the gap doesn't seem as big but is the same $50. The seller has a better of chance of getting you to buy here.

Question 3

Would you rather buy a house
A) here for $299,900 or
B) nearby for $295,500
Assume that all other factors are the same.

The gap looks tiny in comparison to the overall price. Yet the gap is $4,400. That's enough to buy you four each of items 1 and 2 at full price. You could easily get four of the best iPad and lots of nifty apps.


We make odd decisions (or know others who do). How did you make your last $500 purchase?

Would you spend a bonus or lottery winnings as carefully as your hard-earned money? Maybe not, but money is money.

Perhaps you haggle over price but agree to hefty delivery charges, expensive financing or costly extended warranties. Maybe you get a nice deal on a new car but lose on your trade-in.

If a stock drops in value, do you sell or wait for it to return to the purchase price. The stock has no memory of the starting point, but we do.

Our foibles interfere with our decisions and can be used to manipulate us. Unless we're vigilant.


Podcast Episode 106 (3:03)

direct download | Internet Archive page

PS When the police nab a speeder, we're attentive … for a while.

February 19, 2011


BMW Buy Back letterLast month, we looked at how to fight cynicism. This week, I've seen too many reasons to question intent, to treat as guilty until proven innocent. We'll look at BMW, a Mastermind and seven emails.

The Vehicle Exchange Event

We'll start with an email from a BMW dealership. Click on the graphic enlarge it.

Here are highlights.
  • my vehicle is in a "preferred status"
  • this dealership did the research and selected themselves as the test location
  • another test "will not take place again until investigation data has been assessed"
This email felt fake. It's addressed "Dear Customer" though this dealership has my contact details. There's a typo ("sight" [as in eyesight] instead of "site" [as in location]). The content doesn't make much sense. The entire message is a graphic, which seems spammy. There's no mention of the vehicle I got from them, which their records would show.

Here's the big flaw. I returned my leased BMW three years ago. They have computers and databases. Why don't they know that? I doubt they want my current Mercedes.

A Mastermind

Through someone who knows someone who knows someone, I got invited to join a speaker's Mastermind. I was interested because I'm
Pixels are free but thee invitation had very little information. I figured the group would be like Toastmasters: members helping members. The organizer (a fourth someone) phoned me. At my prompting, he revealed that this group was a business targeting amateurs who want to become full-time paid speakers. Those who join this "lifestyle" pay over $2,000 a year and meet each weekend during prime family time.

The write-up implied the group was a real Napoleon Hill Mastermind and free. The reply? Nothing explicitly said the group was free and there's nothing wrong with making money. When you infer what a salesperson implies, are you entirely to blame?

Here's the sad part. I'd already told others about the group. A lawyer and a friend (yes, they're two different people) expressed interest. I filled them in and apologized for not investigating better.

Seven Emails

This week, I got added to four email lists without permission. The senders implied that we'd met but we hadn't. That's sneaky. That's spam. I unsubscribed.

Finally, I got three disguised sales pitches from people I thought were above trickery:
  1. one asked about weaknesses to develop a course … and sell it to me
  2. one speaker was back by popular demand … to sell a seminar
  3. one with typos asked me to explain why I hadn't attended previous seminars
I've seen enough movies to know that "anything you say can and will be used against you".

Fighting Back

Why are tricks being used? They must work and be reasonably legal. Our trusting natures get used against us. Buyer Beware instead of Seller Inform.

Horoscopes and sales pitches show that creating ambiguity takes extra skill. Why can't they be clear instead? We eventually see the tricks and be tougher to fool again.


Podcast 105 (4:36)

direct download | Internet Archive page

PS What do you do when you feel fooled?

February 13, 2011


as easy as A-B-C
Stephen Covey said that if two people think the same, get rid of one: they're redundant. You add value when you think differently.

Let's extend the thinking. If you predict an outcome, why bother wasting time, money and focus on the research?

Start fixing the problem instead.

The Force

Enter the Task Force on Financial Literacy. In elementary school, I learned that "literacy" is about understanding words and "numeracy" is about understanding numbers. Remember the "Three R's"? Reading and writing dealt with literacy and arithmetic with numeracy. Maybe financial literacy means the A-B-Cs of 1-2-3? There are three reasons why numeracy eludes us.

Whatever the name, a group of well-intentioned people spent $$$ (millions?) and a couple of years to discover what we already know: more financial education is needed.

Why would the findings be a revelation?

In 2001, the Financial Consumer Agency of Canada was launched to deal with the same issue. In 2005, 40% of adults had low literacy. What progress has been made there? Maybe we need a Task Force on Nonfinancial Literacy too.

The Conflict

Do smarter consumers mean more profits? If not, there's a conflict of interest.

If companies know that customers have trouble understanding numbers, they can exploit this ignorance and hide behind legalese. Unless they're fiduciaries, they aren't obligated to act in your best interest.
A pizza chain is currently advertising free toppings in large letters. The tiny fine print says you only get "1 (one) single topping". How does "toppings" become "topping"? The disclosure may be legal but it's misleading and makes it hard to fight cynicism about their real intent.
Would numeracy boost or chop profits in the financial services industry? Look at
  • credit card statements: only pay the minimum balance of $27.41 [and keep borrowing the rest at very high loan rates]
  • mutual funds: are you shown an unbiased comparison with ETFs [which are much less profitable]?
  • extended warranties: are you told they are "notoriously bad deals" [but very profitable]?
  • get rich quick schemes: are you told you might get rich [but not as fast as the promoters]
How can the buyer beware if the buyer doesn't understand and isn't fully informed? Imagine if the norm switched from "buyer beware" to "seller inform".

In Your Corner

When you're buying real estate, your agent will explain what the wording means and help you prepare counteroffers. Most other times you're dealing directly with a salesperson and can't change the terms. That leaves you with two choices: take it or leave it. When I leased my car, there were many spots to sign. There was implied pressure to wrap up. Even if I read and understood every word, what difference would that have made?

Take Initiative

You are the key to numeracy. The onus to learn basics like compound interest is on you but you're not alone. When you're ready, you'll find volunteers committed to helping you understand numbers:

All these resources are free. Feel free to add more. Use them and help others too. Let's stomp on innumeracy.


Podcast 104 (5:35)

direct download | Internet Archive page

PS What's $1,000,000 after taxes on the investment growth?

February 5, 2011


invisible man
Patterns show opportunities, especially before others discover them. Some are disturbing. This one affects you whether you're working for a company, self-employed or looking for a position. Invisibility. That's no way to bulletproof your job or protect your livelihood.

The solution is simple: be visible.


If you're hard to find, you're easy to overlook. Why would anyone bother searching for you? There are often reasonable substitutes. I prefer Dr. Pepper but won't storm out if offered Coke or Pepsi.

Here are observations from business cards I've collected in the last three weeks:
  • none ("forget" them or "ran out")
  • bent (usually from too much time in a wallet)
  • corrected (e.g., change in address or phone number; using up your old stock shows you're cheap)
  • no email address
You need a business card, if you don't have one from work.

Business Card Basics

Your business card is useless until you give it to someone else. Make sure your card looks nice to make a positive impression. Make sure your card also looks good when scanned and photocopied. Make sure your card is easy to read in dim lighting and by people with poor eyesight.

Your business card only needs three items
  1. your name
  2. your personal email address (Gmail, Hotmail are fine)
  3. a link to more information (e.g. LinkedIn, your personal website, your blog).
Your card is now timeless.

Adding More
A phone number is a good addition if portable. You'll probably want to show your hard-earned designations. You might include a title or memorable tagline. You don't need to show your home address. How's that? Now you're accessible while maintaining your privacy.

Order so many business cards that you feel compelled to hand them out. Maybe a crazy number like 500 or 1,000. This won't cost much more. You don't want to take shortcuts by printing your card yourself or using a service that gives free business cards in exchange for advertising on the back. Shortcuts send a bad message. You want to look professional. Even if you lack design skills, you can create a nice card using templates. That's a nice way to stand out if you're in one of the least prestigious professions.

Business cards get lost, discarded or misplaced. There's a way to make a lasting connection even with people you haven't met in person.

Get Listed

Today's business directory is LinkedIn. Even if you have a website and show up on Google, you want to be here too. There's no downside to getting listed. You decide what information to show and who sees it. My profile is detailed and visible to anyone.

Here are 12 recent (but classic) flubs I've seen in LinkedIn profiles. They're easy to correct.
  1. not here: you're unlisted
  2. scant content: you're harder to find with keyword searches
  3. mistakes: typos, jargon or poor writing (get help from a spell checker and friend)
  4. no photo: others may have the same or a similar name; a photo makes you easier to remember
  5. out-dated info: some show an old position as current
  6. gaps: missing years or missing positions raise questions (e.g., why is nothing shown for 2004-2007?)
  7. very few connections: why so few want to associate with you? This raises questions.
  8. hard to contact: you can require people to know your email address before inviting you to connect: Why be so reluctant to connect? After all, you decide who to add to your network.
  9. no short URL: a long link to your profile is a sign of an amateur (here's what to do)
  10. using your business email address: This is okay if you're self-employed. Otherwise, use your personal email address to maintain your privacy.
  11. no recommendations received:  why won't any (or many) publicly vouch for your expertise?
  12. no testimonials given: why won't you show generosity towards others?
Business cards and a good LinkedIn Profile will take you far. There's much more you can do, to build and nurture your network. Being visible is a great start.

Podcast 103 (6:27)

direct download | Internet Archive page


PS Consider putting your LinkedIn address on your business card and in your email signature.