Sunday, September 21, 2008

National Finance

The federales have stepped in to save the lifestyles of their buds that run the large investment houses. In the process, they have nationalized the financial services entity. That's the first obvious one, with the rest of the country to follow.

There has been more than a close working relationship between the military and the industries that provide the parts and equipment to them for decades. While there needs to be some knowledge of the military system by the suppliers to that system, there is no doubt every opportunity to abuse the system for personal benefit. This raises the bar very high, if in fact the goal is to watch out for the government's interest first.

The same could most likely be said about the financial services industry. Many who serve in the highest ranks of government oversight of the financial services industry are floaters. They float between government service, the executive suite of the largest investment and financial firms, and the top spots in academia. This rotation develops friendships and business relationships that last decades.

One of the challenges is simply that its tough to hold your friends and professional acquaintances to account. This type of arrangement isn't new, nor is it unique to the financial industry.

There is more than enough blame to go around in terms of who is responsible for the meltdown. Loose money from the Greenspan era, mortgage and real estate brokers who are incented to maximize the size of the deal, federal encouragement to make bad loans, the aforementioned financial entities making billions by packaging junk, and selling it in the market, potential homeowners desparate to own a home, and the list goes on.

Yes, there are all sorts of parties and reasons to blame in this. However, nationalization of the industry is not the solution, nor is it the answer. Yes, it will allow those at the top of the food chain to retain their lifestyle, and their home in the Hamptons. And, with a federal bailout, it will defer the costs of fixing the problem for a decade or two. It may well allow quite a few people to keep their jobs, and provide for some stability in their 401k's.

But is that the goal? It appears we have made an incredibly costly trade. We have chosen to sacrifice the connection between decision and consequence on the altar of perceived safety and security. Those who made the decisions that led to the meltdown, as well as those watching, have learned one thing. That is, they can make poor decisions, and if those decisions have a negative affect on enough people, the taxpayers will bail them out.

Now we are faced with two challenges. One is the overt nationalization of our country, and the other is a long term reduction in the value of our enterprises. If companies are not allowed to fail, then poor to average decisionmakers will never have the opportunity to learn to make good decisions, and will move up through the ranks. These average decisions, allowed to happen because the government will step in and save the day, reduce the earning potential of the company, and ultimately reduce the value of the stock.

The challenge with nationalization is simply that a profit motive doesn't exist in a government environment. Governments are not producers, they are consumers. To this day, I have met no career government employees who have made a successful transition to a leadership position in the private sector.

Well, I could go on, but have probably said enough on this topic.

Until next time...


Saturday, September 13, 2008

Domestic Tranquility

In many parts of our great country, domestic tranquility is hard to come by. I'm not speaking of conversations between the adults in the house, but the uneasiness many feel concerning the economy.

It appears that we could be facing a form of perfect storm. The price of gasoline has risen dramatically in the last two years, settling in at just under $4 a gallon. Housing inventory exceeds demand, interesting lending practices over the last few years have dried up liquidity for borrowers, and the adjustable rates used so frequently just two or three years ago are adjusting. In addition, the affected industries, construction and autos, and their supporting industries, continue to shed jobs.

Those so-called homeowners with adjustable rates have been putting discretionary dollars in the gas tank, hitting two sectors fairly hard - department stores and non-profits. Consumers are flocking to Wal-Mart and Costco instead of Penneys and Sears. Some of the adjustable rates have begun adjusting, with the majority of them set to adjust beginning in January of 09. We expect the foreclosures to continue to rise.

Given all this, we don't expect 2009 to be much prettier than 2008, and the economic conditions could worsen before they improve. Is there any good news in this?

Well, some of the larger companies on the planet are setting up shop in America. In spite of our current challenges, America is still the world's largest consumer economy, with the best trained workers, and the best legal and physical infrastructure of any country in the world. Every day, it seems, we are reading of a new company that has selected a town or city in America as the place for its next manufacturing facility. I expect this trend to continue, and not just because of the relative weakness of the dollar.

For those who depend on jobs for their livelihood, which is most of America, this would be an ideal time to learn people, leadership, and management skills, so they are prepared for promotions. For those who depend on technical skills, retraining is the word for the day.

For those who have other forms of income, such as business ownership, cash, as always, is precious, and is king. Those who have depended on debt to support their lifestyle are already in trouble.

What are the opportunities? For those with cash, the challenge will be separating the good opportunities from the great opportunities. Also, many of us will have the opportunity to give of our time, money, and energy to those who have been hit hard by this perfect storm.

Until next time...


Thursday, September 11, 2008

Palin & Company

Well, McCain certainly hit a hot button with Sarah Palin. She has moved, in the space of a few weeks, from a relative unknown to political center stage. We will know within 60 days whether McCain's decision paid off.

The Democrats still have no real idea what to do in response to Palin's presence. Just about anything they say that's negative or derogatory has a backlash that just harms them. The traditional print and broadcast media are lost when it comes to explaining Palin and her family. They are certainly trying, but her American experience and their American experience might as well be from two different planets.

Palin has appeal to some part of the female vote that McCain didn't have. She and Todd are working together to parent five children, and soon a grandchild, and at the same time have an impact beyond their family. Palin is certainly no wallflower, as evidenced by her pasttimes and her comments at the convention.

She also appeals to the evangelical portion of the Republican party in a way that no one since Reagan has done. While it's mostly unspoken, there is an absolute determination among this base that Obama not be elected, and Palin has become the galvinizing force.

Finally, the Palin's appeal to the Reagan democrats, which in large part were the union members across the rust belt. Don't most guys relish winning some event like Todd Palin has done? They may not say it, but yes, they do.

So, let me make one prediction. The McCain/Palin ticket will win the popular vote by five to ten points, and will take about 350 electoral college votes. You may want to earmark this blog so you can come back and see if I am correct in my predictions.

Until next time...


Tuesday, August 19, 2008


According to folks that know, a blog needs to be updated about everyday in order to be read consistently. I'm sure I'll learn that lesson well as I continue to blog. According to my notes here, my last entry was on the 13th, when I was in Orlando.

On Thursday, Teresa and I headed to coastal North Carolina, for a long weekend at the beach. Part of the draw was the opportunity to interview a potential new client that wanted to sell his business, as well as some real estate he had accumulated.

At the moment, I haven't decided that we will add this gentleman as a client. However, Teresa and I had a good time. The weather was perfect. Some sun, some overcast skies, and plenty of time to sit in a chair at the beach and read. Everyone enjoys different things. We enjoy hours of quietness, given to reading.

We missed the little one, but did get to see her once we got home Sunday evening. Monday it was back in the saddle, riding off to rescue the world from all the vultures that would separate well meaning folks from their money.

So, how was your week?

Until next time,


Wednesday, August 13, 2008

Random Business

It's common for business advisors and coaches to suggest that each year, business owners or CEO's should build a business plan. Often this is an activity that takes place in the September time frame, perhaps earlier or later depending on the size of the organization.

As a matter of business practice, we have done that for years. Included in the plan is a revenue target for the coming year. There is also a discourse on what activities we will engage in to develop new clients, as well as our estimates as to the source of the new clients.

What I find interesting is that we hit our revenue targets. However, when I review the source of the new business, it seldom comes from the sources we identified in the planning process. In many cases, the source of new business appears to be totally random.

That has happened again in 08. What we expect to be one of our larger clients came through a referral to someone I'd met six months earlier, and had a very pleasant conversation with. Over the course of almost 30 years in business, that type of conversation has occurred thousands of times. Why would this time be different?

Perhaps it would be nice to have some answer, or to identify some logic behind this randomness. On the other hand, does it matter? Maybe the best approach is simply gratefulness.

What is your experience?

Until next time,


Saturday, August 9, 2008

Imagination and Work

Earlier today, I was listening to an interview about how children play. The conversation got me to thinking about a couple of things.

Many of us may remember playing as children with a refrigerator box, or washer/dryer box. We could have fun all day, while the box served all kinds of purposes for us and our friends or siblings. The same thing could be said about branches, boards, bricks, blankets, and chairs. Take a few basic items you find inside or outside of the house, add a child's imagination, and you can create a terrific world.

My granddaughter has lots of toys, thanks to the pocketbook and determination of her granna. These include plastic stuff, as well as a good selection of books and CD's that help her learn. Overall, a decent selection.

The thought that crossed my mind is whether the toys that come designed for pre-determined use somehow inadvertantly limit creativity and imagination by prescribing uses for the toys based on their design. Could there be some benefit, or could we enhance the development of the imagination or creative side of the little ones, if we simply let them play with whatever was at hand, rather than the vast selection of toys at Wally World or ToysRUs? Of course, this strategy adopted enmasse wouldn't do much for the fortunes of Fisher-Price.

What about books and movies, in the same vein? Any number of books have been made into excellent movies. I've found one of the beauties of books is that as I read, I can develop the pictures of the scenes in my mind. Probably someone else reading the same book, would have somewhat different scenes in their mind.

When we see a movie, the producer has put their interpretation of the scene on the screen for us to see. Does this arbitrarily limit the use of the imagination by the viewer? Of course, Hollywood and authors won't stop creating movies from books simply because I believe movies dampen the imagination. The whole thing is food for thought, though.

In fact, I heard someone say one time that the mark of a good author was his or her ability to direct the imagination of the reader. That's well put.

Until next time...


Monday, August 4, 2008

Mass Transit

Today I had the opportunity to travel to downtown Atlanta. Since I had an appointment in Buckhead, I decided to ride the local train, MARTA. MARTA offered a stop in downtown Atlanta, just a block from my meeting place.

After that meeting, I headed back to Buckhead, where I was able to exit the train just two blocks from a lunch meeting, and about the same distance from a 2pm meeting. After wrapping up a day of meetings, I was able to take the train back to my car, which had been parked most of the day, in the shade.

The total cost of transportation and parking for moving around different parts of the city was about $6. While there may have been some additional minutes used that wouldn't have been used otherwise, I wasn't impaired from using my phone. In fact, the train time gave opportunity to catch up on work that seems to sleep in my briefcase.

Compared to gas at $4 a gallon, and parking at $2 per hour, it wasn't a bad deal, overall. Interesting experiment that we may try again.

Until next time...


Sunday, August 3, 2008


There is something special about a Sunday afternoon. Especially one of those days when the house is quiet.

Often, when the children were growing up, we would make a homemade meal for early afternoon, and invite a number of their friends over after church. This was always a big hit, as so few of their peers enjoyed home cooked food on a regular basis.

It was a treat for me as well, since Teresa is a master of the kitchen arts. Our son left for Tech, and our daughter for boarding school, in the fall of 99, and the house became fairly quiet. Sunday afternoons were sometimes used to run errands that didn't get taken care of during the rest of the week.

My favorite way to spend a Sunday afternoon is to simply read, maintain an unschedule, and take a nap. Some of those naps are 30 minutes, some have been two hours. Whatever their length, they speak to the fact that for this day, there are no appointments to get ready for, no deadlines to meet, and nothing pressing that can't be postponed.

Yes, there are occassional family get togethers, or other activities. However, both of us have found real value in simply a quiet, unscheduled day. The absolute best type of Sunday involves going absolutely nowhere, once we get home from church. We have recognized the wisdom of the six and one design that has been in place for centuries.

All of us need time and space away from things that occupy our mind and time the other six days a week. I have found myself more ready to engage, mentally more prepared, and looking forward to time with all my responsibilities, when I clear my calendar for rest and refreshment.

What about you?

Until next time...


Friday, August 1, 2008

Domestic Oil

My good friend Michael Cross, an Alpharetta attorney, was kind enough to offer his thoughts about drilling for oil in the U.S. In his opinion, the USofA has a moral responsibility to drill for oil, on our territory. After reviewing his thoughts, I must say that I agree. Here are his thoughts about the issue, offered here with his permission.

The underlying assumptions are:

1. The actions undertaken by any society on our planet impacts our environment,

2. Large scale impacts to the environment in one area of the planet effect the environment in other areas,

3. Oil is a necessary ingredient for our present global society to function, and, regardless of the innovation that arises, will continue to be a necessary ingredient for the foreseeable future,

4. Those who drill for oil haphazardly and without exercising good stewardship foul the earth and impact the world,

5. Americans have the ability to drill more cleanly and efficiently than any other country in the world,

6. Americans care as much for the environment as the citizens of any other country in the world,

7. Those who urge America not to seek oil within her boundaries cause harm to those in other areas of the world that lack the ability or sensitivity to concerns of conservation thereby causing harm to the inhabitants of other areas,

8. Those most harmed by reckless oil exploration and extraction are those with limited means, who may have little means of protection,

9. If America engages in further oil exploration and extraction within her boundaries, fewer people in the world will be harmed by those who cannot, do not, and/or will not act as well as Americans do in the pursuit of oil extraction.

Given these assumptions, which I am inclined to do, then if Americans care about others in the world, it is our moral duty to engage in oil exploration and extraction so as not to cause undue harm to the oppressed.

Until next time...


Thursday, July 31, 2008


Until 1984, I had all four grandparents living, so I was well into my 20's when the first one passed. At that point, I was young, and totally focused on myself and my life. It never occurred to me that at some point, I would be the last generation standing.

Today, all four grandparents are gone. My parents are with us, but I see them aging. While my parents are in good health for being in their 70's, I watch as they slow down, and especially as their brothers and sisters age and pass.

It has occurred to me in the last couple of years that the time is not far away that I will be the oldest living generation. It's a different thought, as there has always been the sense of stability that comes from knowing that there is a generation ahead of you.

For many of us, the generations ahead of us provided an example to look to, in order to see how to live life, or how a marriage should work so it would last 60 or more years. By example, we were taught lessons about investing time in the succeeding generations, and how to give to others, regardless of the benefit to us.

Am I ready to step into that role?

Until next time...


Monday, July 28, 2008

What Would It Be Like?

Over the weekend, I got $20 cash back from a purchase at the grocery store. I still marvel at the convenience. It was 1977 when I saw my first ATM, and it's only been the last ten years that the cardswiper at every retailer has become common.

Would our world work, and if so how, if we used only technology that was available in the 50's, or the 60's, or the 70's? What habits would we need to change? How would our work be different? What about communication?

It was definitely a different world. But the good old days? Well, perhaps for those unprepared for change. Most technology changes over the last thirty years have been improvements. LP's gave way to eight tracks, then cassettes, then CD's, then downloads. How sweet is that?

Communication went from letters to party lines to private lines to mobile phones to cells. In the not too distant future, we will be able to, if we choose, have a very small receiver implanted underneath our skin, and be able to communicate at will, on a handsfree basis.

What would be different in our world without our current technology? What will our world look like in the next ten years with developing technology?

You are welcome to share a thought.

Until next time...


Saturday, July 26, 2008

Creativity and Change

For years, I feel as if I've been running hard to keep up with technology, and it has stayed three steps ahead of me. I used to use the excuse that I graduated from high school with a slide rule, and paid $100 for my first handheld calculator. That excuse doesn't connect so much anymore, because few people have seen a slide rule, and even fewer know what one is.

It occurred to me several years ago that the world I grew up in doesn't exist anymore. Once I came to that realization, I was able to relax, and enjoy this very novel and interesting journey called life.

There are tremendous tools in the marketplace with which to connect electronically, and I am learning what they are and how they work. Personally, I'm grateful that most of the staff is half my age, as they are totally attuned to how these things work, and patient enough to teach me.

This blog, for instance, is an interesting forum. The word blog still makes me think of being on the Georgia coast in the summer time, yet it's such a fascinating tool.

What's exciting is the opportunity to learn, and even more, the opportunity to deploy these tools in ways that are both good for business, and have a positive impact on the lives of others. That's a win I can get excited about!

Until next time...


Friday, July 25, 2008

Options for Money

What options do we have with our available cash flow? Essentially, there are four things each of us can do with the money we have. We can spend it, share it, save it, or invest it.

Most of us understand the spending part, and according to most economists, those of us in North America have mastered that art. John Maynard Keynes, the economist of the early 20th century whose work most federal monetary policy is based on, suggested that consumers would reach a point at which they would have what they want, and no longer consume bigger and better things.

The only challenge with this philosophy is that it flies in the face of human behaviour, and is therefore based on faulty assumptions. If you've wondered why government decision making is so messed up with regard to how taxes work, and the role of government, this is part of the reason.

Another thing we can do with money is to share it. According to any number of studies, Americans are the most giving people in the world. It is a part of our culture, and a part of how we identify ourselves. This, in my opinion, is an excellent attribute. Part of our responsibility for the space we take on this earth is to share what we have to ease another's journey.

The third thing we can do with money is save it. Saving is the art or discipline of setting aside a portion of our income, very consistently. It comes from the thought that there may be days in our future where we are unable to work, or choose not to, and therefore we need to be prepared. Saving comes from a mindset that we should be prepared, as best we can, for future contingencies. This mindset isn't common in our culture, in large part because we have enjoyed relative affluence for several decades. This mindset is still very common in the Asian cultures, especially first generation immigrants.

The fourth thing we can do with money is invest it. Investing is the process of putting money to work, and expecting a return. The old Economics 101 class explains it as "money at work" versus "man at work", which is what most of do each day. Many people get caught up in the investment process looking for the next big thing, or shortcuts, or homeruns, and fail to understand the process itself.

All investments are investments in people, as it generally takes three things to create a solid return on investment. These three things are money, ideas, and people. The easiest thing to find is the money. Otherwise there wouldn't be trillions of dollars sitting in money market accounts.

The most difficult thing to find are people. Many people are willing to show up on a regular basis as long as they are provided a job and work to do. To find those people who will take responsibility for an organization, and someone else's investment in them, is rare.

We could talk more about this, and will, but that's enough for today.

Until next time...


Wednesday, July 23, 2008

Travel Tales

This falls into the "I should know better" category. Yesterday, I made a trip to Chicago for a meeting this morning. Since I booked the ticket less than two weeks out, Delta, American, and Airtran all wanted about $600 for the roundtrip.

Being closely related to the original tightwad, I thought I could do better. An internet search turned up a $375 fare, with one stop in Charlotte. We left Atlanta on US Air, and changed planes and airlines to United in Charlotte.

Since the Atlanta to Charlotte trip is only four hours by car, US Air was using a puddle jumper, a bus on wheels, for the journey. My standard carryon is a rolling briefcase with a telescope handle. You've seen them.

The flight was full and there wasn't room for my briefcase either overhead or underfoot. So, I grabbed my laptop, ac cord, and mouse, and released my bag to the workers on the bridge. I've done this many times before, and when the flight has landed, the bags are available as we walk across the bridge from the plane to the terminal.

This time, however, the flight attendants and orange vest guys said the bag would be checked to Chicago. I released the bag with some reservations, since it hadn't gone through the formal checkin process at ticketing. Three minutes after I released it, I realized I had left my cell phone in it.

That was the last time I saw my briefcase until 6pm today. It didn't arrive with my other checked bag Tuesday evening. Since I didn't have my phone, I had the opportunity to look for pay phones (they still exist) and to hunt for quarters to plug them.

It's interesting what we get used to. With cell phones and other PDA's, we become used to the everpresent ability to communicate. I like that ability, and the option to turn the phone off when the day is done.

It was a different kind of day, as I didn't spend the day on the phone. Rather, after the morning meeting, I invested the afternoon attempting to determine the status of my bag, and deciding how and when I was going to get home.

If you travel much, you have your own set of travel stories. The lesson for me? I won't be releasing carryon bags to connecting flights again. I'll find a better way.

What's your travel story?

Until next time...


Monday, July 21, 2008


In the last couple of days, we have been discussing income, wealth building, and issues of the sort. Let's talk about the expense side for a couple of minutes.

The single largest expense for most families is housing. How do you decide how much to spend on a house? Keep your mortgage to two times your annual income, and you should be fine. Yes, you can most likely be approved for a larger loan, and the realtor may be mortified that you plan to stop far short of your purchasing potential. That's not the point. The point is keeping you in your home, and giving you some margin.

Next, buy only vehicles that are two years old or older, or if you choose to buy a new one, keep it for 10 years or more.

Save some amount from every dollar that passes through your life. I like the 10% rule. Save 10%, and give away 10%, of every dollar that passes through your life.

If you are unable to save 10% and give away 10%, chances are incredibly high that you are spending far too much for housing costs, and most likely more than you need to on automobiles.

What's the solution? Sell your home (in this market?), and find something that fits your income, or get a second job so your income will cover the ratio.

Until next time...


Sunday, July 20, 2008


What will the world look like in 20 years? Let's start these observations by looking at where we are today.

The U.S. is still the place to be, although that may not always be the case. America is at risk of marginalizing itself on the world stage if it doesn't address its legacy costs, shore up the dollar, find its own oil, and open the door to immigration. However, those immigrants must come to work, be productive, learn English and be U.S. citizens. There appear to be no leaders on the scene at the moment who are willing to address these issues.

Japan at the moment is dying. The average age in Japan is north of 50, and the birth rate is half of what's required to maintain a population.

China and India appear to be growing by leaps and bounds. Western Europe is stagnating, due to low birth rates, and a distinct lack of leadership. Where are the Churchills and the Reagans?

The Middle East is experiencing phenomenal growth. Birthrates are high, billions of dollars are pouring in from a world hungry for oil, and physical infrastructure is being put in place at an unprecedented rate.

If the issues mentioned aren't addressed, here is what we can expect to see within 20 years.

Japan will be a second tier country at best, with a declining population, very low property values, and a diverse culture. The diversity for the Japanese won't be a planned or desired outcome, but will simply be the result of needing to import workers from the Hispanic countries in an effort to maintain their economic engine.

The U.S. could well be a second tier country, as it continues to marginalize itself on the world stage. Three pillars have made America great. These are economic opportunity, political liberty, and religious freedom. It is very possible that economic opportunity will be taxed out of the country, a la Western Europe. The U.S. is a post-Christian culture, becoming less tolerant of open expressions of faith with each passing year. This doesn't bode well for the health of the country.

China may have peaked, and if not, it will peak within the next ten years. China must change its one child per family laws, if it intends to compete long term. Otherwise, it will go the way of Japan. Business costs on the coasts have been increasing to the point that they risk being non-competitive. Inland China has lower costs, but transportation to the coast cannabilizes much of the savings.

India could be an interesting spot to watch. Stay tuned for more on this.

Russia will once again become a dictatorship, and they are just a few years from making this formal. Putin and his allies are returning Russia to its early and mid twentieth century roots. Russia will also raise its head as a military aggressor.

Western Europe, without a new brand of leadership, will return to the Dark Ages. They will be, within a few years, approaching third world nation status.

The Middle East will be the place to be. The population is exploding, and the owners of the wealth are investing for a solid future. Substantial oil reserves will be found in Israel, making this country once again an attractive target for all sorts of evil operatives.

Iraq will be rebuilt, and will become one of the wealthiest countries in the world. The ancient city of Babylon will be rebuilt, and will rival in wealth and beauty anything ever seen in the world. Iraq will become a top rated tourist destination.

Iran will join with Russia to irritate the rest of the world.

Who country and person(s) will be the new world leader?

Stay tuned.

Until next time...

Saturday, July 19, 2008

How Money Works

There is a good bit of confusion concerning how money works. Let's talk about the income part now, and the expense part at another time.

There are three types of income; earned, passive or portfolio, and system. Just about everyone is familiar with earned income. It comes from a job, or professional fees, or some environment that involves us trading time for money. One way to say it is time equals money. When you hear that, the person speaking is familiar primarily with earned income.

Passive or portfolio income is income derived from money at work. Some people save money from earned income, or receive it from other sources, and choose to invest it. Depending on what they know about money, or are told by others who may hold themselves out as professionals, it's possible that this invested money could create income in the form of interest, dividends, or capital gains. When someone says it takes money to make money, you will know they live in this world.

The third type of income is unfamiliar to all but about 2% of the population. System income is derived from the development of a business system, and such income is not dependent necessarily on a 40 to 50 hour week for 40 years, nor does it need to require very large amounts of capital. When you think of system income, think of Michael Dell, Bill Gates, Rich DeVos, Sam Walton, and Howard Schultz. Each of them have built businesses that generate income for them personally. While each of these businesses require some oversight, the amount of time required of each of them is nominal, compared to the very substantial cash flow these businesses generate for the owners. The Walton and DeVos families most likely invest the least time relative to income, based primarily on time, and the business structure that is in place. System income is ideas and business structure at work.

Very few people understand system income or how it works, which is why most people struggle financially. Too many investors either fear loss of capital, and therefore shortchange opportunities, or are driven by the desire to find shortcuts to wealth, and constantly trade, looking for the next Microsoft.

Those who are prepared to learn, to work with people, and to understand how to conduct proper due diligence can become as wealthy as they choose to be, both in time and money. This group I call the fellowship of the 2%.

One question I'm asked from time to time is "What sector, industry, or stock should I invest in today?". My question is, why do you want to invest in that sector or stock, and what will it do for you in terms of helping you reach your goals?

What most people haven't stopped to consider is why they save and invest to start with. I've yet to meet anyone who can take their 401k statement, or the deed to their home, or title to their car, and scan it in the card reader at Publix to buy groceries. The point? What people need is not assets, but cash flow. The reason people save and invest is to develop assets that will generate income when they reach a point that they would rather roll over instead of roll out. Their hope is that these assets will generate the income, instead of them having to get up everyday and sit in traffic.

So...if the point is income, or cash flow, then perhaps the question becomes, "What is the best way to build cash flow?". Now we can have a meaningful conversation. There are individuals, whom most of us will never know, who have mastered the understanding of how to create cash flow. Some of them live very extravegant lives, others live lives of service. In all their circumstances, they have achieved personal control of both time and money.

So how? Here is the key. If you invest time, then invest time to develop people and infrastructure, so the combination of the two generate income. If you invest money, invest money in business enterprises that allow you to receive ongoing cash flow from a one time investment. There will likely be some type of ongoing oversight, even after the cashflow is fairly secure. This oversight however, is a completely different exercise than having earned income, or owning a job, which is what 95% of franchisees do.

Until next time...


Thursday, July 17, 2008

Market Performance

Most consumers with brokerage accounts and retirement plans have received their statements for the end of June. Most look at them, others file them without even opening the envelope. Provided this second group has a very good advisor, they most likely have the portfolios that have performed the best.

Many other consumers are in shock. Most of these are the ones who follow the talking heads on TV who provide entertainment under the guise of investment advice.

The U.S. equity markets have been in the tank for about ten years now. Let's take a 40 year look at history. From 1969 to 1982, the Dow Jones Industrial Average of 30 stocks, most commonly called the Dow, returned just over 5% annually. From 1982 until 2000, the Dow's return was in the double digits, starting at 882 on January 4, 1982, and finishing at 10,786 on December 29, 2000, for an annualized return of 14.10%.

On January 1, 1999, the Dow stood at 9184, and closed at 11,350 on June 30, 2008. This represents an annualized return of 2.3%, most of it attributable to calendar year 1999. Over the same time period, the Standard & Poor's 500 averaged a return of just 0.40% per year, and the NASDAQ Composite did the same, returning about 0.40% annually.

Simply put, the equity markets over the last almost ten years have gotten us almost nowhere. Of course, built into these returns is the worst bear market, the tech meltdown of 2001-2002, since the early 70's.

If you are in positive territory with your portfolio, on an annual basis, over the last ten years, be grateful. If you don't know whether you are or not, or whether your portfolio is moving you to where you need to be financially, it may be time to find a new advisor.

In the current conditions, what should our approach be? Now is the time to be diligent in making selected purchases. Many solid companies are on sale, and we believe this to be a most excellent time to buy, not sell.

What's your take?

Until next time...


Wednesday, July 16, 2008

Economic Fix

Everyone that can get in front of a camera or get their words in print has a thought about how we fix what ails us. What is it that ails us?

Let's start with the price of gasoline, which is hitting all of us in the pocketbook. We can then add the enormous ripple effect of subprime loans, which has dried up liquidity as never before, and the value of the dollar relative to other currencies.

Looking long term, we have enormous legacy costs at the federal level, due to continuously increasing entitlements. These legacy costs have the ability to drowned our country. So...what do we do? Here are several steps our elected folks can take that would help.

1. Shore up the dollar. This will involve raising interest rates, among other things. However, it will increase our competitive posture worldwide, and help bring gas prices down.

2. Eliminate corporate tax rates, and if we must have an income tax, lower cap gain taxes to 10% or less, and cap personal income taxes at 15%. There is more than enough evidence to confirm that every time tax rates are lowered, federal and state tax collections increase.

3. Encourage creation of a futures market for oil, to remove some of the volatility of the spot market.

4. Allow limited drilling in the ANWR, as well as offshore, and encourage utilization of nuclear power.

5. Stop, immediately, the federal bailout of corporate America. This includes Freddie, Fannie, Bear Sterns, any and all of their friends, Chrysler, and any other mismanaged corporate entity that cries to Washington for help. They need to die, whether a fast or slow death, to keep the air clean for the survivors.

6. Allow all taxpayers born in 1975 and later to make decisions about the investment of their social security withholdings.

7. Do away with the deductibility of health insurance at the corporate level. Have all consumers purchase health insurance on their own, with premiums fully tax deductible. Mandate a 10% premium surcharge to provide a state funded and administered health fund for the uninsurable. Absolutely and under no circumstances can this plan be funded or administered at the federal level.

8. Encourage Health Savings Plans that allow deductibility of up to $5000 per person per year of deposits to an HSA.

9. Mandate that all federal and state entitlement programs be used only for citizens of the United States.

10. Enforce the immigration laws by sending home all illegal immigrants at their expense.

11. Loosen the immigration rules, such that those from other countries who want to come to America, to work, become citizens, pay taxes, invest in their future, and learn English as their primary language, are encouraged to come. Those who don't want to participate in and assimilate to the dominant culture should be denied entrance.

These steps, taken together, will send tax collections straight up, ignite the formation of new business and wealth, create employment, reduce the drag on federal and state funds, and put more citizens in control of the health and their retirement.

Until next time...


Sunday, July 6, 2008

A Name

Meeting people is interesting. The trend in most casual settings seems to be first name only. The folks I've met this way all seem as nice as they can be, as well as courteous, well meaning, and fairly together.

What happened to our last name? Mine is Brunson, and I'm proud of it. Haven't always taken such good care of it, but time and good decisions can bring restoration to a name.

Not sure where the trend toward first names only came from, or if it's unique to certain geographic or age groups. Haven't really given the matter any substantial study. It also doesn't seem to matter if it's a restaurant, ballgame, or church, folks seem to ignore their last name.

In a business setting, when someone is calling on us, or identifying themselves as a potential client or employee, last names are common. They should be.

Is the first name thing a function of too many nights out? Are we as a society embarrassed by or ashamed of our last name? For many, it's the only thing of value that could be passed to the next generation. Have we begun to believe that we as humans are just one more species, on a plane with the animals, and that personal identification doesn't matter?

Personally, I still prefer to do business with those who have a name, and who value it enough to take care of it. A wise man said one time that a good name is better than great riches. Have we lost our way to the extent that we believe the name has no value?

I'd enjoy hearing your input, as I try to figure this out.

Until next time...

Wednesday, June 25, 2008

Wilderness Travel

On the 14th of June, my son and I flew to Minneapolis, and on the recommendation of a friend, enjoyed a "Juicy Lucy" burger at the 5/8 Club. The following day, we drove 280 miles north to Grand Marais, MN, then turned left, and traveled another 50 miles down the Gunflint Trail.

Seagull Outfitters had our food, equipment, and canoe ready for us. Early Monday morning, they took us by motorboat to Hook Island, in a wide channel that defines the U.S./Canada border. After offloading our gear, they reminded us that they would return to the same spot on Friday afternoon to pick us up.

Our cell phones lost service just after we left Grand Marais, and we chose not to take a GPS. We did have a topographical map, and a compass. We were now on our own with two paddles, some food and clothes, and a tent and sleeping bags.

After checking in with the Ranger station, a 30 minute trip west, we headed Northwest to the first portage at that entrance to Quetico Provincial Park, a 2 million acre wilderness preserve in Ontario. At this portage, we saw two father/son teams from Chicago, who were also headed in. Those were the last humans we spoke to, except for each other, until we got back to the same spot on Friday morning.

For the balance of Monday, as well as the rest of the week, we saw sunshine, blue skies, large rocks, and old growth forests of hardwoods and evergreens. We also saw moose, a bald eagle family, beaver, and more misquitoes than we could swat.

With most of us living within constant earshot of a car engine or the hum of a server, it was fascinating to be so far removed from daily life, and to simply listen. It occurred to me that much of the world continues to operate, in fairly fine fashion, without our constant oversight and involvement.

The sun and moon both rose and set, right on schedule. The animals got the food they needed, the beavers continued to build their homes, the moose foraged, and all was pretty alright in their worlds.

So what do we have to be worried about??

If you ever have the opportunity, find a way to hear a loon in the wild, especially about 11pm. You'll never forget the sound.

Until next time...

Monday, May 19, 2008


Words are powerful. We've all heard that. Words have different meanings across time and cultures as well. Two thoughts about words.

Over the years, I've learned to be very careful with words. In particular, this applies to sentences that begin with "I am" and "You are".

When we begin to describe ourselves, with sentences that begin with "I am", where did we learn to believe about ourselves what we are describing? Some people describe themselves as tired, or broke, late, busy, overwhelmed, at peace, active, stupid, and a host of other adjectives. We generally express verbally what we believe about ourselves. The challenge with self-description is that we as individuals have been endowed by our Creator with potential and creativity that has yet to find limits. Most of the limits we face are self imposed, based on what we believe, and which are often borne out by what we say.

Does this mean we can accomplish anything? Not necessarily, since there must be desire involved. God in His love will not give us the desire to accomplish something that is physically impossible for us. For example, God hasn't given me the desire to be an NBA AllStar. Desire though, is the subject of another blog.

What about those sentences that start with "You are"? When we describe others to them, can we do it in a way that is uplifting and encouraging, rather than destructive?

The second thought is simply the matter of giving our word. When we tell someone yes, let it be. When we tell someone no, let it be as well. Choosing to be bound by our words gives us a peace of mind, and a sense of self-respect that's available few other ways. This applies whether it's keeping an appointment, making good on promises to our children, our customers, our boss or others, or our marriage vows.

Many of us work by written agreements of some kind, whether they are called contracts, service agreements, engagement letters, or some other name. A well drafted agreement gives us essentially one right, and that is the right to enforce the agreement in court. In effect, using the courts to force someone to keep their word. The courts can find for the plaintiff, which gives the plaintiff the legal right to collect. It doesn't give the plaintiff money, it simply gives the plaintiff the legal right to look for and take it. In effect, the law defines minimum standards of behaviour, and the civil and criminal penalties for violating that behaviour.

Choosing to live by our word instead, even though we may have a written agreement, allows us the freedom of doing all we can to serve others, going above and beyond what may be called for in a written contract. There generally isn't much additional time required, but the results often have an incredible impact on the bottom line. Even if there is no noticeable difference on the bottom line, the example we can set for others by living by our word can have an enormous impact.

Until next time...

Thursday, May 15, 2008


Joy is an interesting concept, and comes from a deep appreciation for the gift of life, and being alive. Happiness, in my experience, is often attributable to external factors or circumstances.

So, how do we find and keep this joy, when the externals aren't to our liking, or perhaps downright nasty? Once I find the perfect answer, I'll let you know. Best I can tell, it comes from what we focus on. I've learned to begin each day with gratefulness. Not necessarily in general, but for specific things. The things that come to mind include being alive and pain free, being able to talk to my children, and knowing that they return my phone calls, for starters. Others might include the fact the Teresa is with me, although I'm very human, and subject to all the frailties that come with that package.

Let's see...the shower is hot, the car starts on the first turn of the key, there is food in the frig, and the list goes on. Are there problems? Of course! In fact, if there were no problems at work, I'd be out of a job.

At lunch I ate a fine meal, and visit with a buddy I enjoy seeing from time to time. Yep, I'm grateful, and life is good.

Until next time...

Thursday, May 8, 2008

Going Green

Well, it looks as if the whole world is going green. Overall, a very commendable idea. After all, we have been given the responsibility of being stewards of our physical world - "rule over" is one phrase that is used.

This focus on maximizing our utilization and minimizing damage to the physical world is the right direction. These actions are consistent with the call to stewardship.

I've heard some rumblings that man is an intruder on planet earth, or that there is no distinction between man, animal, or plant life. Such thinking doesn't surprise me, since very few folks seem to have much grounding in the distinction between man and the rest of the world.

Facts are, man is not an intruder, and there are enormous differences between man, and the rest of the physcial universe. Man was created in the image of God - not a physical image, but in His image, nonetheless.

Man was given the physical world for his enjoyment and use, with the charge to be fruitful and multiply. The additional charge was to care for the rest of God's creation. This second charge is the basis for stewardship.

This foolishness about overpopulation is nothing but heresy, and needs to be called such. This idea that man exists on the same plane as animals or plants is a sister foolishness, foisted on young people by those who would shake their fist in the face of God.

Each person, from the moment of inception, has incalculable value, simply because they are created in the image of God. Our highest and best life is to be a reflection of the glory of God.

Let us enjoy all creation, as it has been given us to enjoy. Let us appreciate the children and grandchildren that follow us, and continue to teach them well. Let us continue to care for all that we were given by our Creator to care for, and strive to live a life that reflects His glory.

Until next time...

Monday, May 5, 2008

Baby Hair

Last Friday, I had the opportunity to visit our daughter and grandaughter. I arrived just before bedtime, and Scarlett, who will be two in a couple of weeks, was waiting on me. When I opened the door, she lifted her arms, ready to be picked up. As I lifted her to me, she laid her head on my shoulder, and placed an arm around my neck. She didn't move until I put her in her crib, some fifteen minutes later.

During this time, I had an opportunity to rock her, and sing the little songs I had been singing to her since before she was born. As she rested so securely, it occurred to me that there is very little in life that is as soft, or smells so sweet, as baby hair.

Until next time...

Tuesday, April 29, 2008

Seven Dollar Gasoline

It's been interesting to watch the price of gasoline continue to set new records. The inflation adjusted price of $3.40 (with a 1980 baseline) has been passed. At current prices, we are spending about 3.5% of our income on gasoline, compared to 5% in 1980.

We are simply a more affluent society than we were 25 or 30 years ago. At $4 a gallon versus $1 a gallon, we are spending $45 a week more on gas. That's one meal out a week for most families. Not that much of a sacrifice, it appears.

Some have suggested that we raise gasoline taxes, as they have done in Europe. That's bad policy. Let the market handle it. So far, we aren't consuming any less fuel. Gas prices will continue to head north, driven by two primary factors. One is the move toward global price equalization. The other is simply demand.

As the price of gasoline in the states equalizes with gas prices globally, the price will begin to stabilize. The other factor is simply demand. Once we stop buying as much gasoline, prices will ease. Until either or both happen, we can expect a continuing increase in the price at the pump.

What's your take on the situation?

Until next time...

Thursday, April 24, 2008


Wow! Another day of sunshine and blue skies in Atlanta. We are grateful.

It's the topic of conversation - this supposed recession that seems to be upon us. Really? Yes, Ann Taylor and Bombay Company are out of business. That's not a function of recession, but a reflection of the competitive realities of a free enterprise system. The price of gas continues to set new records. That's not a recession, but domestic gasoline prices adjusting on a global basis to the value of the dollar.

It's the earnings reporting season on Wall Street, and the majority of the reports continue to be positive. Have people in America lost jobs? Of course. Again, this isn't a recession, just global competitive realities.

The classic definition of a recession is two consecutive quarters of declining Gross Domestic Product. The last time that happened was 1990-1991. Current surveys show declining consumer confidence. The only documentable correlation these survey results have with anything is the price of gasoline.

One of the best proxies for the health of the economy is Wal-Mart earnings. For the qaurter ended January 31, 2008, Wal-Mart reported revenue growth of 8.3%, while the year ended on this same date saw revenue growth of 8.6%. Income from continuing operations for the year ended 1/31/08 was up 5.8%.

It will be interesting to see the final numbers for GDP for the first and second quarters of 2008.

Until next time...

Tuesday, April 22, 2008

Temple Prostitutes

For thousands of years, temple prostitutes have been a part of ritual worship to a variety of deities. It appears that the latest of these to come to light are the young ladies at the YFZ compound near Eldarado Texas.

Based on media reports, which must be taken with several grains of salt, these young ladies were involuntarily married off at very young ages. Many may have been treated as what we will call temple prostitutes.

The purpose of government is to promote good and thwart evil (which definition itself is problematic for some in society, as they refuse to embrace absolutes). The current challenge appears to be to confirm the identity and story of the teen who called the hotline, as well as to confirm that physical, emotional, and/or sexual abuse did occur.

How can those who have been given the authority of the state confirm these details, and handle a situation of this magnitude, without interfering with the personal freedoms that our country embraces? Even more important, how can the authorities do what they need to do, without infringing on a parent's responsibility to raise his or her children?

The state of California, as intrepreted through its court system, would have us believe that the state's right to educate its citizens trumps a parent's right to educate their children. This is first class, industrial strength, unadulterated horse feathers.

Most likely, the answer for the authorities in Texas is to remember that the state is not the end all and be all, but rather an agent for good.

More later...

Sunday, April 20, 2008


Yesterday we discussed ownership. As we embrace ownership comes the responsibility (that irritating word once again) to embrace stewardship.

The basics of stewardship are fairly simple. In its simplest form, stewardship is the belief that we are managers, rather than owners, of all that is in our care. This includes material possessions, entries on our financial statements, our time, and our relationships.

As stewards, how do we choose to approach life? One approach is to understand that at the end of the day, our lives are not about us. Rather, we exist, and have been given the time, money, relationships and other resources that have come to us, primarily for the benefit of others.

Does this dictate a life of poverty or austerity? Absolutely not. Many have been given the gift of creating wealth, whether that is a wealth of time, relationships, or financial resources. Rather, it is a choice to use or deploy those resources to help others do well.

In almost every case, this is through example. Often, through an encouraging word. Many times, it is through offering a listening ear, or a word of advice or counsel. From time to time, it could be teaching someone what they need to know to prepare for a life well lived. Sometimes, it involved giving of our financial resources.

At all times, stewardship comes with the mindset that what we have we serve as overseers of, to be used for the benefit of others.

Do we need men and women of character and integrity to enjoy the fruits of labor and ideas? Absolutely. The young need to know that a life of character and integrity can yield an incredible lifestyle. These young often see this lifestyle portrayed only by those who live just from the lips out.

Until tomorrow...

Saturday, April 19, 2008


Georgeous day in Atlanta. Sunshine, blue skies, 73 degrees. Braves beat the Dodgers 4-1 in nine innings.

Ownership often leads us to think of cars and homes. How about an expanded definition that included work, time, life, relationships? As a side note, a home with a mortgage is not owned by the tenant, but by the mortgage company. Missing four payments in a row will clarify this detail for those that may have questions.

One approach to life is the idea of leasing or renting. Most people lease their homes from the mortgage company. Most cars on the road are leased, not owned. When was the last time you saw an auto ad that mentioned the purchase price?

95% of working Americans lease their work lives to the highest bidder, in return for a check every couple of weeks, health benefits, a 401k, and perhaps a few weeks off every year. Life tends to revolve around the weekend, as this is the time to recharge. Makes me think of the move "The Matrix".

Many also choose to lease their relationships, such that when the new wears off they simply trade for a new or different model.

Ownership is different, and starts with thinking differently. From a business perspective, those who own are focused on creating cash flow based on physical, technical, and human resources, and the development of replicatable systems.

Those who own their cars and homes understand the value and flexibility of having no debt, and the benefit of a long term holding period.

Those who own their lives have matured to the point that they are prepared to embrace the unpopular "R" word, responsibility. This maturity causes them to make long term commitments to others, with an emphasis on serving others well.

This maturity also gives them the freedom to walk off the plantation, and tell the masters in DC that they prefer to take full responsibility for their own financial future. An ownership mentality embraces the fact that life is full of risk, and that man has been given by his Creator incredible creative genius. This creativity, exercised with focus, and with the purpose of mutual benefit, can create a life and future that no government subsidy, regardless of intent, can come close to duplicating.

My special thanks to Melissa Libby ( for encouraging me to pursue this blog. And, a standing ovation to friends Kevin Murray and Rob Coatsworth, of CTR Partners (, for being nominated as Gwinnett Chamber Business of the Year.

More later...

Friday, April 18, 2008

First thoughts

Here is to one more new experience. We will raise a celebratory glass at lunch. Welcome to our world, and we invite your participation. You'll enjoy some of what you read, and other thoughts will give you heartburn. For the day, we are enjoying sunshine, blue skies, and 75 degree weather.

Once the CEO's of the major financial institutions have their pay cut for stupid decisions, just as they earn bonuses for outlandish risks, we may have sanity in the lending markets. Not much before then.