The GMAT vs. The BadskiBlog

Last night was my first class for the Kaplan GMAT preparation course and I must say that although I am a bit rattled about the test, the class was pretty enjoyable and will definitely serve me well as I progress. More important than the class is going to be my own commitment to intense studying. The most common theme that Kaplan has found amongst those who score 100 points or more higher than their diagnostic test is that they study more than 100 hours over the duration of the course. I have broken that down to roughly a two hour a day study commitment, with the flexibility to miss a day or so as long as I make up for it on the weekend. To me that is an intense study commitment, even having come from a service academy where I was intellectually overmatched by the average cadet and faculty member. However, it is an intense commitment that I plan to stick to for the next 6 weeks or so. Although I am slightly intimidated looking holistically at the challenge ahead I am excited to fully dedicate myself to the cause. Unfortunately this will undoubtedly place a major damper on the amount of quality writing I can commit to deliver to you, the badass reader of Badskiblog. My mitigation strategy is to post some quality video clips that will minimize my time invested while still providing those interested with some valuable content. If any of you would like to break into blogging for the first time or would like to expose your content to a different audience please feel free to write up a guest post on a topic of your choice and send it my way. Thanks and wish me luck on the long journey towards hopeful GMAT success.

Warren Buffett On Integrity

"I look for three qualities in hiring people. Integrity, intelligence, and energy. And if they don't have the first then the last two will kill you, because if they don't have integrity you want them dumb and lazy." - Warren Buffett

The quote above is why I love and admire Warren Buffett. He has an innate ability to say things in the lowest common denominator. He puts everything in its simplest form yet makes it sound like the most insightful piece of advice you have ever heard. Unfortunately, the same reasons I admire Buffett are also the same reasons that it is nearly impossible to expand upon his ideas. Take a look at this video of Buffett as he speaks to w a group of MBA students on the importance of integrity, and I dare you to say it better than he does. Prove me wrong and you have just earned a spot on BadskiBlog.

Practice, Preparation, and Paralleling Reality

People practice in order to prepare. We prepare for things that we feel are important or things that have little room for error. So what happens when that practice is preparing you for something completely different than you intended? Likely decreased performance.

Last week I was in a military exercise. All the bases do similar exercises to prepare for deployments, practice first aid, and gas mask utilization. The problem is that we practice deploying using Cold War era methodologies. I cannot count the number of people I hear every exercise talk about how this is not how we really deploy. It is tough for someone like myself who is thirsting for knowledge and preparation surrounding how we really ship out. So why do we practice something we don't do and likely will never do again? Because the military values preparation. I don't want to say it is a box checking mentality but it is important in that culture to consistently test and evaluate ourselves. This is actually a good thing, and when it comes to training the military has a long tradition of implementing large scale training initiatives that have proven their worth through a string of successes in actual war time scenarios. With that being said I think the question is not whether we should practice, but are we actually practicing the right things? What is the end state? And is our preparation positively affecting that end state?

Athletes understand this concept. Athletes are constantly seeking training that most parallels their actual sport. Whether it be drills in practice or weights in the gym, athletes want to mirror the game as to best prepare for success. Don't think that the military is alone in their struggles to mirror future conflicts. In fact, given the nature of their business the military probably does better than most organizations.

I started to transfuse this concept into other areas of my life. What am I doing that is just wasted effort? Am I performing activities in the name of preparation that in actuality may have unexpected outcomes? I think I am going to make more of an effort to ask what the desired end state is for activities that consume my time.

A good example is blogging. Many people get into blogging with illusions of grandeur and dollar signs in their eyes. Doubtful at best. I personally blog to maintain a consistent writing presence in my life, to better my communication skills, to challenge and solidify my beliefs, and most importantly to grow. With that end state in mind the activities like finding content, brainstorming, and writing are worth the commitment invested. However, if my end state was to make money I would likely be performing the wrong activities. Yes content is important as that is what people ultimately come back for, but I would probably be better served spending more time growing my readership.

I am about to start my Kaplan GMAT preparation course. I chose to take the course because my end state is a high GMAT score. Kaplan not only forces me to go to class and study, which is much needed, but they also have a system that is highly aligned with the actual GMAT test. Everything from the practice problems used in previous GMAT years, to the way they segregate the question types, to the scoring methods, to the adaptive practice tests, and a practice at an actual testing facility mirrors the experience I will likely have when I take the actual GMAT. They get it. They know what the customer's desired end state is and they know that the best way to positively prepare for the future is to do the best you can to replicate it.

Are there any areas in your life where practice becomes something entirely different than what you were preparing for?

Generation Y's Impact On Military Culture

I was forwarded a very interesting article today by friend and fellow blogger Al Chase entitled Military of Millennials. Al, who maintains the blog The White Rhino Report, sent the article to a group of Gen Y'ers for their thoughts on the thesis of the piece which is centered around the cultural impact of Generation Y on the US military. It is a long article but definitely an interesting read (full article here). There were a few things that really struck me in this article and although I don't necessarily agree wholeheartedly with everything that is presented, I am definitely seeing some of these trends within my sphere of influence.

The U.S. Department of Defense (DOD) took an unprecedented step on May 15, 2007, blocking troop access to MySpace, YouTube, and other popular Web sites. The official reason was to conserve bandwidth and safeguard security. But the DOD’s ban also highlighted a gap in understanding between senior military leaders and what demographers call Generation Y (alternatively known as the millennial generation or the baby-boom echo). Few members of this generation, born after 1978, can recall a time when the Internet was not at their disposal.

Not long ago, one of the authors of this article was asked to lead a U.S. Air Force study on the implications for the military of this new online generation. The request came from senior officers who had been appalled to discover a number of junior officers using the still permissible Facebook Web site for the purpose of organizing their squadrons. These senior officers were having difficulty with the concept of using a civilian social-networking site for military purposes. What would that mean for military security? How would it affect the control and vulnerability of squadrons in the field? And from the perspective of DOD “middle management,” what was a major supposed to do? Forbid the behavior and risk losing the real benefits of an online community? Or protect it and risk the wrath of more senior officers who just didn’t understand?

This kind of conundrum is relevant not just for the U.S. military. A wide range of organizations, including most global corporations, will soon face a large, new cohort of young employees. Generation Y’s affinity for the interconnected world is just one of its intriguing characteristics.

Although the start of this article is a little weird and I think it is a bit of a stretch to connect senior leader's inability to manage Gen Y with blocking Facebook in a work environment, the article does does highlight one trait that is very important to understanding the demographic; enhanced interconnectedness. The youth of today definitely has a desire to be connected to more people than any generation prior. The internet has proved to be a catalyst to not only satisfy that desire, but to expand the ability of people to maintain more relationships than ever before. Not only can people now keep a handle on social connections, but they can create relationships and build communities that would never have existed otherwise.

Generation gaps are not new to the military, of course, or to the culture at large. The Vietnam era was defined by the distinctly different attitudes between the 20-year-old draftees and the older career officers and senior enlisted men who commanded them. More recently, a report issued on February 15, 2000, by the vice chief of staff of the U.S. Army noted that the rate of voluntary attritions among captains had risen sharply, and the report cited generational differences as a chief reason. “Senior officers think they understand the world of lieutenants and captains,” the report observed, “but many junior officers and others are convinced that they do not.” As an example of these differences, the report cited senior officers’ “careerism” and dogged loyalty to the military as opposed to junior officers’ preference for a better work–life balance. To the typical junior officer, it noted, “being an Army officer is a noble profession…not an all-consuming source of self-identity.”

The report presciently foresaw the U.S. military’s current dif ficulties with recruiting and retention, exacerbated by its expanded involvements in Iraq and Afghanistan. Because of Generation Y’s significantly larger numbers, and because its attitudes have been shaped by unique circumstances, these young men and women will provide distinctly different challenges and opportunities for the military, the business world, and every other kind of organization that they enter.

I really think these paragraphs are spot on in the challenges that have already begun to manifest within the ranks of the military. Gone are the days of corporate loyalty to the worker. Gone are the days where our elected leader's promises and programs can be counted on. And most importantly gone are the days where the youth of America believes that the key to a happy life is putting in endless hours at the same job for decades at a time. And can you really blame them? We have watched our parents and noticed the discrepancies between the world they grew up in and what we are living in. The generational quest for a better work life balance is real, and I would argue that it is powerful. The military is not only faced with this new reality, but it is handcuffed by stringent budgets, manning cuts, and two wars. Not easy to overcome and I would atrribute the aforementioned attrition more to those factors than leadership's inability to relate or manage Gen Y officers. That being said, the culture shift is something that I think has and will continue to shape the armed forces in the future.

Two of the most prominent theorists of generational change, historian and satirist Bill Strauss and histo rian and demographer Neil Howe, have suggested in their book Millennials Rising (Vintage, 2000) that Gen Y may be something of a throwback to its grandparents’ generation — the generation that grew up in the Depression, fought in World War II, and came home to build a powerful national economy along with strong, effective community institutions.

Like their grandparents, millennials appear deeply committed to family, community, and teamwork, which they have made priorities. Among middle-class high school and college students, volunteering for nonprofit work has become almost the norm. (In many states, it is now a school requirement.) After college, this generation is competing for places in organizations like the Peace Corps and Teach for America in extraordinary numbers, even as the military struggles to attract them. Indeed, the research summarized by Strauss and Howe (in their book and in the Harvard Business Review, July–August 2007) suggests that this new generation may in fact be more civic- and family-oriented than any since World War II, reversing long-term trends toward in­creased rates of criminal activity, drug use, and teen pregnancy.

It would appear, therefore, that if the current leadership in the public and private sectors learns to accept, deploy, and manage Generation Y effectively, the millennials could even provide an echo of the grit and selfless heroism that inspired journalist Tom Brokaw to label their grandparents “the greatest generation.” On the other hand, if the leadership fails to understand and adapt — if it insists on harnessing millennials with outdated mind-sets, rules, and processes — it could squander a historic opportunity to reinvigorate the military and rekindle an idealistic, can-do spirit in a wide variety of institutions.

I thought this passage was a great reminder that things do not always get worse. People are almost predispositioned to look at those that come after them with great concern as if the youth of tomorrow is destined to lead our nation down a path of destruction. Whether it is generational identity, politics, or the stock market people always think the sky is falling so it is great to see an author acknowledge that Gen Y are not just a band of miscreants and that they in fact have a unique skill set to provide besides just unique challenges. Perhaps the reinvigorated family value system that the author describes can be attributed at least in part to some of the generational traits expressed in Gen Y like the affinity for interconnectedness discussed earlier.

Gen Y’s familiarity with the interconnected world suggests that its members will respond enthusiastically to management styles that encourage creativity and initiative, and that they will be comfortable working in teams. Millennials exhibit characteristics likely to render them facile and effective decision makers, especially in combat situations, where decentralized operations are paramount. They are also adept at gathering information and sharing it with peers. The U.S. military has long struggled to smooth interservice rivalries and achieve better working relations between military and intelligence operations. Corporations face similar challenges in getting people to work together fluidly and productively across functional, regional, and operational boundaries. Might Gen Y, with its deeply ingrained habits of openness and teamwork, eventually succeed in breaking down some of these barriers?

In other ways, those deeply ingrained habits challengees tablished organizational values. To command-and-control organizations like the military (and many corporations), knowledge is power and, therefore, something to be protected — or even hoarded. To Gen Y, however, knowledge is something altogether different; it belongs to everyone and creates a basis for building new relationships and fostering dialogue. Baby boomers and Gen Xers have learned to use the Internet to share information with people whom they already know, but members of Gen Y use blogs, instant-messaging, e-mails, and wikis to share information with those whom they may never meet — and also with people across the hall or down the corridor. Their spirit of openness is accompanied by a casual attitude toward privacy and secrecy; they have grown up seeing the thoughts, reactions, and even indiscretions of their friends and peers posted on a permanent, universally accessible global record.

I know I find myself longing for more and more creative, collaborative team environments. That could also be attributed to my competitive sports background but regardless I think it is an important recognized generational trait for plenty of Gen Y'ers. This is something that definitely does not come naturally in the corporate or military rank and file chain of command. Empowering subordinates and creating collaborative environments will likely become more important as we progress into the next decade.

I think the point on openess and secrecy is also a very interesting dynamic, especially within the military culture. All thoughout my time at Air Force Academy I heard the definition of integrity described as "doing the right thing when no one is looking." I think that Gen Y'ers more confortable packaging themselves as one identity as opposed to a work person, an at home person, etc. They want to be respected for their ideas and contributions, not just for the appearance they present and for their ability to walk the line and live the status quo. Part of that process starts with the liberating practice of sharing information and experiences, and not necisarily just with those you know personally. Not everyone gets it, even in Gerneration Y. I know I still get comments and questions from friends about my blog all the time wondering why I put the time and effort in. But those who do get it are willing to bypass privacy for they feel that they don't have anything to hide and much to gain!

It’s still unclear how military and business leaders can adapt their traditional command-and-control operating models to make millennials feel comfortable. The U.S. military, and many corporations, rely on effective chains of command — on leaders who give orders and people in the field who execute them. It will be neither easy nor entirely desirable to make a transition away from that.

To be sure, the reasons for making such a transition continue to increase. Modern military adversaries — and, in the business world, commercial competitors — increasingly use nontraditional structures. Al Qaeda, for example, is not a top-down hierarchy. It is a flexible, decentralized network. As numerous experts have pointed out (for example, University of Pennsylvania professor Marc Sageman in his 2004 book, Understanding Terror Networks, and former U.S. Treasury Department analyst Jonathan Schanzer in his 2004 book, Al-Qaeda’s Armies), this network relies on shared ideologies, common hatreds, and distributed technical know-how, rather than on centralized command, regimented training, and tightly organized supply lines. Will it take a Gen Y military to learn how to effectively counter such virulent franchises?

I will have to defer this topic to fellow blogger Cam Schaefer who writes on fourth generation warfare. He has written extensively on Afghanistan explored the many questions surrounding our strategy and new ways of acheiving our nation's interests. In short I would just say that we are fighting a war that is longer than any war prior with acknowledged minimal gains, and a unique and new strategy whether fueled by Gen Y or another generation is surely welcomed by me.

In the end I think the author does a great job summing up what the real challenge is surrounding the unique dynamic of Generation Y and the military, and that challenge is balance.

Besides restoring the right value proposition, the military leadership can ensure that those in positions of command at all levels are trained and stress-tested to maintain a delicate balance — the balance between empowering Gen Y troops and providing them with direction, discipline, and cohesion. Indeed, balanced leadership is the only way to empower a millennial-dominated military to think and act creatively, responsibly, and with the right sense of mission.

Confronted with the reality of Gen Y’s unique characteristics, what’s a military leader to do? More research into the attitudes, aptitudes, and habits of young military officers and noncommissioned officers should help to clarify key issues; we already know that the answers are unlikely to lie in stifling this generation’s natural talents and predilections. Most generations have a way of challenging their elders’ fundamental assumptions and ways of doing things. Gen Y is poised to do the same — and in potentially constructive and original ways. The job of today’s captains, majors, and colonels is to encourage and guide millennials and protect them from the senior officers who may not appreciate their unique qualities. Let’s hope the military, and the corporations that hire the people who leave the military, can learn to make the most of this new generation’s distinctive talents and instincts

Bill Gates and Warren Buffett: Keeping America Great

I recently DVR'd the CNBC show Bill Gates and Warren Buffett: Keeping America Great. The show has the two titans of capitalism sitting down with a crowd of Columbia students for a back and forth discussion on 'keeping America great.' It was a great glimpse into a casual discussion between these two business geniuses and a group of driven young business students parched for knowledge. The show exposed me a bit more to Bill Gates, especially in a relaxed setting. And it reaffirmed my admiration for the simplistic character based wisdom of Warren Buffett. I love the reality driven optimism of both of these guys and seeing as they are at the world's forefront in both business and philanthropy there is definitely much to be learned as a business leader and more importantly as a human being living a life of excellence. There were plenty of great questions and great responses from these two icons. I have provided some paraphrased enlightenment from the show but I highly suggest you tune in and watch the entire thing. It is well worth your time.

Was there ever a doubt about this country?
Buffett: I put my money in when we were looking into the abyss.
Gates: This country still has the best schools the best opportunities for entrepreneurs.

Do you think bad ethical business practices are the cause of the financial crisis?
Buffett: It was one of the causes but we have always had greed and we will never get rid of it. We still have a system in place that allows for a quality of opportunity that is unparalleled. Our economy is sputtering but we still have the best engine in the world.
Gates: I was a huge beneficiary of this country's willingness to place a large amount of risk and responsibility on a young person. Other countries are trying to replicate that and it is good for the world.

Mr. Gates can you tell me what you thought when Lehman went under?
Gates: I don't really follow investment banks very closely. I called Warren and asked if I should be worried? He said a little bit.
Buffett:The dominoes were fully lined up and it wasn't realized how close the Lehman domino was to the next one. However I give credit to how the government officials handled the crisis overall.

Many of the villains of this industry were in fact business school graduates. What responsibility do you think the universities like Columbia should hold?
Gates: Remember that capitalism has been enormously successful. Standard of life, medicine, etc. Business schools pay a role in developing the skills necessary to move forward.
Buffett: The best place to learn ethics is in the home. Most of us learn what we know about ethics well before we step in a classroom. It is important to emphasize them but if I had to choose between learning them in the home or the classroom I would take the home. The thing is you can succeed marvelously with ethics. It is not a hindrance at all. Look everyone here has a bright future. Look at the last two centuries. Our country doesn't avoid problems it just solves them.

What industry do you think is going to produce the next Bill Gates because that is the industry I want to get into?
Gates: Information has been the most exciting as far as what has happened. Energy and medicine also has the opportunity to rival information.
Buffett: Find what turns you on and what you have a passion for. If I would have known that Bill's industry was the next big thing I don't think I would have done too well at it. I had a teacher Benjamin Graham that I offered to work for free for and he said I was overpriced but I went that direction and had a passion for it and here I am. You will do well in whatever turns you on.

CNBC took a poll of the attendees and asked if in their lifetime they would ever see a company as transformative as Microsoft and 92% said yes. Bill do you share that belief?
Gates: Yes. Capitalism is great. You have thousands of things going on in parallel and most fail, some are mediocre, but the ones that are truly special can grow and stun everybody.

There have been a of rumors regarding your investment in Burlington Northern. Can you share the real reasons for your exposure to the railroad sector at this time?
Buffett: When I was six I wanted a railroad set and my dad didn't get it for me. Railroads are a necessity within this country. You will have more people and they will be moving more and more within this country in the next 30 years. It is the most environmentally and most cost effective way of doing that. One train will supplant 200 trucks on the road. They will play a big role in the future.

We just went through hopefully the worst financial crises of our lifetime. It has kept a lot of people up at night worrying about their future. What if anything keeps you up at night?
Buffett: I try to live my life so that nothing keeps me up at night. Last fall was really quite exciting for me. There were opportunities available that weren't the year prior. This country was going to do fine no matter what.
Gates: The financial system fortunately has a lot of self correction in it. I think there are a few things that could shake us in the future. One being a large scale terrorist attack and the other a widespread pandemic. You have to keep your eye out for a few outliers like that. I worry about our education not improving as much as it should.

The recent run up in the market has been historic with many people questioning the sustainability. Do you think the rally is for real?
Buffett: What's going to happen tomorrow huh? I bought my first stock in 1942.. Do you know when the best calendar year was since then? It was 1954 of the heels of a recession. But the point is it doesn't matter. It doesn't matter what the market does next week. What matters is whether you are buying a good stock for the money or not. Have the right long term outlook and the right evaluation of the company you are buying and a bad market is your friend. I don't care whether next week, next month or even next year does well.

What are your thoughts on Apple and the job Steve Jobs has done as the CEO of Apple? (Awkward laugh from audience and an almost pissed off smirk from Gates)
Gates: He has done a fantastic job. They are in a bit of different business but he has done well. He brought in a team and inspired them to revive a company. It is great to have competitors and of all the leaders in the industry he has proven most inspirational and he saved a company to bring them back at an incredible rate.

What is the one thing your MBA didn't prepare you for when you got into the real world?
Buffett: It prepared me very well. I was lucky that I knew what I wanted to do. I had two professors that really inspired me so that really propelled me into a field that I already loved. Right now I would pay $100,000 for 10% of the future earnings of any of you so if anyone wants to see me after. If that is true you are a million dollar asset right now. You can improve upon that by working on your communication skills. If you can improve it by 50% its another $500,000 in terms of capital value and see me after class here and i will pay you $150,000.

Mr. Gates you obviously worked very hard to get where you are. Can you share what role pure luck played in your success?
Gates: I was lucky in many ways. Lucky to be born with certain skills lucky to have parents that created an environment that was good for me and I was lucky in terms of timing. The microprocessor invention impacted me incredibly at a young age. Lucky to meet the people I have met.

You have an interesting relationship. What do you both admire most about each other?
Buffett: He admires my athletic ability. What I most admire about Bill is the view he has of what to do with the money he has amassed. As he said he was born in the right country, at the right time, with the right wiring and he was very lucky to be where he is. But in the end he knows he is the beneficiary of a tremendous society and not everyone has that opportunity. He values every human life as much as the next and he is backing it up not only with money but with his time and his wife is backing it up as well. They are going to spend the second half of their lives improving the lives of the 6 and a half billion people of the world and that is what I admire most about him.
Gates: Well with Warren there is a lot you can pick. His integrity is an example to the world, his humor. But I think I would have to pick his ability to teach. He has the ability to take things that are very complex and make them so simple so that everyone has the benefit of the experiences and work that he has put in. He loves to teach and its a real gift that I admire incredibly.

R. Glenn Hubbard the Dean of Columbia business school had the opportunity to present the question that he was most excited to ask. Warren you have said that you never know who is swimming naked until the tide goes out. That says something for knowing when the tide is going to go out but it also says something about knowing context. How do we develop and encourage business leaders who understand context and can connect the dots?
Buffett: I think they have learned alot of that in the last year and some just never learn. I think that what I learned from Ben Graham is that having sounds principles takes you through everything. They take you through the good and the bad and in the end I don't worry about it.

Has your investment philosophy on buy and hold or any of the actual processes of how you invest been impacted by the recent crisis?
Buffett: No it hasn't. We like products like this (holds up coke bottle) how is that for shameless promotion? This started in 1886 and gone through all these events and in the end there are billions of servings of coke next year and more the year after that. I own fruit of the loom too but I am not going to do a product promotion of that!

How would you recommend that an individual investor who follows the Graham and Dodd philosophy allocate their capital today?
Buffett: Well it depends on whether they are active or a passive investor. If you are going to spend a lot of time on investing then look at as many things as possible and you will find some bargains. You have to look for yourself. The world isn't going to tell you about great deals you need to find them yourself and that takes a fair amount of time. If you are not going to do that then I just advise an index fund invested consistently over time. Cash is the worst investment. Cash is not king. Find a good business and stick with it. We always keep enough cash around so I feel comfortable and can sleep at night but it is not because I like cash as an investment. Cash is a bad investment over time but you always want to have enough so that nobody can determine your future.

I actually work at Goldman Sachs so thank you for your investment.
Buffett: Well why aren't you at work?
I would like both your opinions on the development of alternative energy for getting our economy back on track?
Gates: There will be many that are dead ends. But as a nation we want to make sure that we have an environment that encourages all of them because one will eventually lead to much cheaper and better energy. There is quite a bit of R&D but not as much as I would like to see. But it is one of these areas that is emphatic by nature. There is a lot of money going in and the return on investment as a whole is actually quite low much like cars and computers etc. You get these kind of bubbles so you will have to be a bit careful to make sure that it is one that has its cost structure in line and not just pushed along by subsidies. So its a good area but not necessarily one that is great for investment.

If America was a stock would you buy it?
Gates: You bet
Buffett: On Margin!

Get Rich In The Military: A Real Life Example

A while back I wrote guest blog post for the site Bizzia entitled Get Rich in the Military. The post was a summary of some of my personal beliefs surrounding money and how you can exploit some of the unique opportunities you have serving in the armed forces. I hadn't really gone back and read the post in a long time but the other day I got an email that had me go back to revisit it. The email I received was from a fellow Air Force member named Jared. He spoke about how he has transformed his outlook on money and began achieving his financial goals. It was great for him to reach out and to allow me to post his story. I think his story is a great example of how achieving your financial goals is much more about your mind and a few simple habits than any complex system or knowledge. If you treat your circumstances as opportunities, don't make excuses, and keep your overall happiness as the ultimate goal then i think success is inevitable. Jared definitely is subscribing to the BadskiBlog definition of what true wealth is and it is great to see him succeeding. Thanks for taking the time to email me!

Matt,

My name is Jared, I'm Active Duty AF and currently in contracting career field. I'm currently an E4 and will sew on staff next month. I like what you had to say about finances and the military.

I have been very fortunate and blessed in the last year and a half.. First off I'm in a very hot career as I believe your in the same one too. Next I have no bills (except for cell phone) and rent. I do agree buying a house is good but when I'm only using half my BAH for rent then I think renting may be the best option. I just re-enlisted with the 7 SRB they were offering. I'm investing most of that money now. On top of that I got a sweet assignment to Moron Spain where the COLA is very generous. I'm going to invest all that too. I've deployed 2 times in 4yrs and have paid off all credit cards and my truck. No sense in getting a new vehicle mine runs fine. I'm single w/ no dependents so I can save half my paycheck every month. I have sworn to never get in credit card debt again. I had over 10 thousand in credit card debt alone at one point.

So to boil this all down I joined the military 4 1/2 yrs ago with a total of 30 grand in debt to now having 2 Roth IRA's with 10 plus grand in each and over 50 grand in my bank. And you know what....it was all in the military and I only reenlisted for 4 years and I'm only an E4. I'm finishing up my business degree and the military has literally paid for all of it as I try to get my books free from a library.

I'm completely blown away with the power of money and your completely right it's all about looking at an investment in time, ownership of your time, your life.

I'm not here to brag at all, in fact I'm just amazed and tickled. If people would take your advice and stop whining about being in the military and look for the upper hand of it all you would see a lot more military millionaires at the end.

I now give advice to young Airman and telling them...it can be done!! I started late too as I joined when I was 27 yrs old and now I'm 31.

Thanks again and hope to hear back your thoughts.

Jared

You Have To Be A Little Bit Mad

"What is the difference between a good idea and a bad one?" That was the question asked of Canadian entrepreneur Andy Nulman in the video I came across the other day. His response, "success!" Although the answer seems fairly anticlimactic, it proves to be very insightful and powerful as Nulman goes on to describe what he has learned about the life of an entrepreneur. Nulman talks about how entrepreneur's have to be a little bit mad to do what they do because they are always going against the grain and challenging the status quo. He even goes as far as to say that if your idea is well received it is likely a bad one. There must be a chorus of people telling you that you cannot do it for it to have the potential to be a good idea.

Nulman is best known for his creation of Just for Laughs, a comedy festival in Canada, and more recently for his creation of Airborne Mobile the self described "everything else you can do with a mobile phone" company. I must admit I didn't know anything about Nulman prior to seeing this video, but his demeanor in the video and a brief scan of his blog will surely have me following the words and advice of this serial entrepreneur.....plus he's a hockey player.

You can find the full video here.

Opening Up The Fed's Books

The House Financial Services Committee has approved Rep. Ron Paul’s measure to drastically expand the government’s power to audit the Federal Reserve.

The measure, based on a Paul proposal that has attracted more than 300 co-sponsors, passed, 43-26, as an amendment to a financial reform bill. Florida Democrat and fellow Fed critic Alan Grayson co-sponsored the amendment with Paul and played a leading role drumming up support for it among committee members. The adoption of this amendment is an extraordinary victory for Paul, whose libertarian, anti-Fed leanings have often been dismissed by the political establishment.

Whether you agree with Ron Paul or think he is crazy I suggest you watch the following video. The video is over a half an hour long, but the exchange between Paul and Steve Forbes is really interesting. I am by no means an expert on the Fed and our nation's monetary policy, but this video does a great job of using history to explain how our nation has reached it's current state and why we are experiencing more financial turbulence than ever. I, or anyone for that matter, cannot prove that Paul's line of reasoning is absolute fact but it surely does a good job of providing a crash course on the history behind the Fed, its sheltered operations, and the connection to our recent crises.

Check out the full video HERE.

What You Can Learn From A Group Of Has Been Metalheads - Anvil: The Story of Anvil

A group of 50 year old Canadian 80's thrash metal has beens tour Europe to play for whopping crowds of 174 people on a good night fully convinced that they are going to make their big splash in the music industry. It doesn't sound like the storyline of a highly acclaimed documentary, but that is exactly what Anvil: The Story of Anvil is. I wrote a post on the phenomenon that is the Anvil movie back when momentum was really starting to build around the film. At the time I really wanted to see the film but never made it to an indie theater where the movie was playing. Luckily my parents, who loved the film by the way, bought it for me on DVD for Christmas this year. I watched the film last night and was amazed at how good it was. I will admit that I can relate in many ways to the guys in the film. I have been really passionate about metal my entire life. In high school my band Mask of Sanity used to play shows for 15 people most of which were high school girls that thought Good Charlotte was heavy. Needless to say we received all but rave reviews. I also grew up playing hockey in Portland which was anything but a hockey hotbed. Yet I slugged my way through marathon like van and bus trips across the country and Canada fueled only by my love of the game and my parents love to see me succeed. As you watch the film you can see why I would be so touched by these goofy metalheads and their 30 year plus career through obscurity. However, what really touched me about the film were the lessons that transcend the comedic Spinal Tap-esque backdrop. Everyone can learn something from these guys and if everyone had a little more Anvil in them the world would probably be a bit better off. Here are the things I took away from this inspiring film.

1. Passion - The film shows Steve Kudlow and Robb Reiner's enduring love for the music they love. At times their passion borders on delusional, but I must say there is something really moving about people who so passionately undertake what they love to do. Not only does that passion serve as the catalyst for way they live their own lives, but that passion is infectious to those around them. When you are surrounded by a passionate person you cannot help but feed on that energy. That is why I loved my band and why I loved the game of hockey so much. I was constantly surrounded by people who loved what they were doing. Those who didn't love it didn't last very long. That is the great thing about passion is that it is a self regulating virtue. In order to keep pace with passionate people or within a passionate team/organization you must exude it yourself. People would rather be around someone who oozes passion than a talented individual who coasts through what they do. Just watch the film and by the end you feel like you know the guys, like they were buddies you grew up with your whole life. I attribute that feeling to their constant display of intense passion which opens the door for outsiders to see what these guys are really about.

2. Dedication - "It can't get any worse than it is right now. But if it does then at least we know we tried." That is a quote by lead singer Steven "Lips" Kudlow regarding the stage of the band as the film was being created. I thought that quote was great because it gave a glimpse into the bands optimistic nature, but it also showed that they are willing to do whatever it takes to continue to do what they love. I know that my hockey career was filled with plenty of obstacles, sacrifices, and life changing events that often caused me to question whether it was all worth it. But I persevered and remained dedicated because, like Lips, I knew that it was something I loved and over time no matter what happened I would look back fondly upon my journey. I think that is when you know you are truly are dedicated to something. You have an unwavering commitment to something because at the end of the day you would rather persevere hellish experiences doing what you love than suffer through the alternative. Perhaps that says more about optimism than dedication in that you have faith that over time you made the right choice by soldiering on. However, it is that act of soldering on like Anvil that truly embodies dedication.

3. A Lust For Life - There was a point near the end of the film where the band is reflecting on what life is all about and Lips says what it is all about for him. He says that life is all about relationships and the experiences you have. He talks about the most powerful choices are who you share your journey with and what you choose to do on that journey. I loved that! We all face adversity, challenges, and unexpected twists and turns. But one constant theme in happy people's lives is that they are surrounded by other good people on their journey. When you are watching this film you can just see that these guys love to be alive. In fact I think it is much stronger than a love for life; it is a lust for life. They need to feel alive. They crave it like an addiction. It radiates off the screen. I think they maintain that lust for life by keeping their simple philosophy in perspective regarding what they choose to do and more importantly who they choose to do it with.

If you haven't seen this movie then go see it today. Like NOW. You will laugh, you will be shocked, probably be a little touched, and most certainly walk away having learned something. I made the mistake of waiting far too long to see the film that takes a glimpse into a real life happy ending. Don't do the same! I have included a trailer below for those that still need further convincing.

The Decade From Hell For Investors?!

Time Magazine has called it the "decade from hell". CNBC recently ran a one hour special entitled The Bubble Decade detailing ten years of boom and bust cyles. Politicians have foreshadowed apocolyptic financial doom around every corner. Has it really been that bad of a decade for investors? I would argue no if you are a long term buy and hold investor that invests primarily in low cost index funds, and apparantly I am not alone. Forbes recently published an article by Richard A. Ferri detailing the relatively solid decade most disciplined long term investors had.

We all agree that US stocks were not a fun ride, but that is not the most important question. Rather the questions to ask are these: How did you perform over the past decade, and how did a diversified portfolio of index funds perform over the same period?

Index fund investors who remained disciplined and stuck to a simple strategy of diversification and rebalancing fared pretty well.

Ferri goes on to give actual 10 year annualized returns for a few different asset allocations. Mostly broken up by percentage of stocks and bonds. All of his examples acheived at least a 3.1% return. Not great? Well that may be true but he makes a good point.

All the portfolios outperformed the CPI, and that means all portfolios made money in real terms. Since this is true, was the first decade of this millennium really an investor's hell? Not as I see it. Yes the volatility was unnerving at times. Yes, the performance of US stocks was well below its historic average. However, a diversified and disciplined index investor weathered the past decade just fine.

I would go a step further in that we do not know what the future holds. What if the next decade sees a great rise in the annualized return of the market. Then the disciplined investor who continued to invest in index funds throughout the "decade from hell" was actually not experiencing hell at all....they were merely buying on sale! Although this decade was undoubtedly hard on some who were approaching retirement or needed a large portion of their savings, the reality is the majority of people out that not only have an investing time horizon that is long enough to recover, they may actually thrive. I would also be interested to see what the alternative to the disciplined investor looked like in the past decade. What was the 10 year annualized return for the guy who listened to the 'experts', the guy who took the stock tip from his neighbor, the woman who paid hefty commissions and fees for someone to manage their money? How did they fair? My guess is much, much worse....

Personal MBA Update - First Break All The Rules

First Break All The Rules by Marcus Buckingham and Curt Coffman - Going against the status quo is a fairly prevalent cliche that is easy to latch onto and the study of management is no exception. However First Break All The Rules parades the anti-establishment management flag based at least in part on the largest Gallup poll results on management ever undertaken. Although the field is generally viewed as more of an art than a science the useful guidelines and anecdotes are based on hard data taken from thousands of managers at numerous companies across the globe. Although I am considered rather green or wet behind the ears in my career journey, I still took quite a bit from this book. I don't manage a division or have 300 plus direct reports, but I feel that management is more a study of interpersonal skills and organizational habits that we all can learn from. There were definitely some parts that I could not relate to at all, but that is not to say I will never encounter similar situations or apply those lessons to other situations. One surprisingly useful discovery within this book was the introspective nature of the material. The way the book was written had me looking at my life to see if I was surrounded by effective managers, by a high performing organization, and with people who were happy. Furthermore it offered the right line of questioning to evaluate whether or not a position is good for my unique set of talents and behaviors. Definitely some interesting stuff that is value added not only for those seeking to be better managers, but for those seeking to make sure that they are positioned most effectively to exploit their unique makeup. Here are my notes from the book:

Introduction:

- The greatest managers in the world do not have much in common but they do have one thing; Before they do anything else they first break all the rules of conventional wisdom.

The Measuring Stick:

- Like the disaster of Britain's ships at the Scilly Isles, many businesses suffer from an inability to measure what they know is critically important

- No one has figured how to measure attracting and keeping talented people

- Intellectual capital is becoming more important and valued

- Gallup interviewed over a million employees and came up with 12 questions measuring the strength of the workplace:

1. Do I know what is expected of me at work?

2. Do I have the materials and equipment I need to do my work right?

3. At work do I have the opportunity to do what I do best everyday?

4. In the last 7 days have I received recognition or praise for doing good work?

5. Does my supervisor or someone at work seem to care about me as a person?

6. Is there someone who encourages my development?

7. At work do my opinions seem to count?

8. Does the mission/purpose of my company make me feel my job is important?

9. Are my coworkers committed to doing quality work?

10. Do I have a best friend a work?

11. In the last 6 months has someone at work talked to me about my progress?

12. This year have I had opportunities to learn and grow?

- Questions contain an extreme like "best" or "everyday"

- No questions w/pay, benefits, senior management, organizational structure. There were but they disappear during analysis. Not unimportant but equally important. The questions above are the real discriminators

- Asked companies for scores measuring 1. productivity 2. profitability 3. employee retention 4. customer satisfaction

- Compared the 12 questions to the 4 business measurements to see if there is a correlation

1. There is a link between employee opinion and business unit performance 2. The immediate manager had the most impact on employee opinion

- All 12 questions were linked to at least 1 business outcome

- 10 of 12 questions were linked to productivity, 8 of 12 to profitability, 5 of 12 to employee retention

- Most powerful questions had strongest links to the most business outcomes

- 6 most powerful:

1. Do I know what is expected of me?

2. Do I have the materials and equipment I need to do my work right?

3. At work do I have the opportunity to do what I do best everyday?

4. In the last 7 days have I received recognition or praise for doing good work?

5. Does my supervisor or someone at work seem to care about me as a person?

6. Is there someone who encourages my development?

- Mountain Climbing: Why is there an order to the 12 questions?

- Base camp: What do I get?

1. Do I know what is expected of me?

2. Do I have the materials and equipment I need to do my work right?

-Camp 1: What do I give?:

3. At work do I have the opportunity to do what I do best everyday?

4. In the last 7 days have I received recognition or praise for doing good work?

5. Does my supervisor or someone at work seem to care about me as a person?

6. Is there someone who encourages my development?

- Camp 2: Do I belong here?:

7. At work do my opinions seem to count?

8. Does the mission/purpose of my company make me feel my job is important?

9. Are my coworkers committed to doing quality work?

10. Do I have a best friend a work?

- Camp 3: How can we all grow?:

11. In the last 6 months has someone at work talked to me about my progress?

12. This year have I had opportunities to learn and grow?

- Base camp and camp 1 is where you should focus your time and energy as a manager. If lower level needs aren't met everything else is irrelevant

The Wisdom of Great Managers:

- Frog and Scorpion parable

- Each person is true to their unique nature. There is a limit to how much remolding you can do to someone

- The great managers don't bemoan the differences they capitalize on them. They try to help each person become more of who they already are.

- People don't change that much. Don't waste time trying to put in what was left out. Try to draw out what was left in. That is hard enough.

- "Smart individual performers keep getting moved into manager positions without the slightest idea of what the manager role is, let alone the ability to play it. We send them off to one of these leadership development courses, but they come back more impressed with their mini executive status than with the day to day challenges of being a good manager. No one knows what being a good manager is anymore."

- The manager is the "catalyst" role

- 4 activities a manager must do extremely well: 1. select a person 2. set expectations 3. motivate the person 4. develop the person

- Those four activities say what great managers do but not how

1. Select for talent - not just experience, intelligence and determination

2. Define the right outcomes - not the right steps

3. Focus on strengths not weaknesses

4. Find the right fit - not the next rung on the ladder

The First Key: Select For Talent:

- Normally we associate talent only with celebrated excellence. Talent seems to be a rare and precious thing bestowed on special far away people

- Great managers disagree with this definition of talent

- Talent is a recurring pattern of thought, feeling, or behavior that can be productively applied. Your talents are behaviors you find yourself doing often

- Every role performed at excellence requires talent because it requires recurring patterns of thought feeling or behavior

- Most managers select for experience, intelligence, or determination. Talent if mentioned at all is an afterthought

- The right talents are the prerequisites for excellence

- The way you filter the earths stimuli is largely the source of your talents

- People get the same stimuli, produce different reactions and therefore have varying degrees of performance

- Great manager mantra pg 79

- Neuroscience confirms what great managers know. Peoples filters and the recurring patterns of behavior it creates, is enduring. In the most important ways people are permanently wonderfully unique, So are you. So are the people you hire.

- Great managers are not troubled by the fact that there is a limit to how much people can change. It is happy confirmation that people are different.

- There is no point wishing away individuality. It is better to nurture it and help someone understand their filter and to channel it towards productive behavior

- Skills, knowledge, and talents are distinct elements of a persons performance

- Skills are the how to's

- Knowledge is what you are aware of: 1. the factual things you know 2. experiential things you have picked up along the way

- 3 kinds of talents:

1. Striving - is the why of a person. Why they get out of bed everyday. Why are they motivated to push etc.

2. Thinking - the how of a person. How they think, how they weigh alternatives, how they make decisions etc.

3. Relating - the who of a person. Whom they trust, who they build relationships with, who they confront and ignore etc.

- None of this implies a person cannot change. Everyone can change and learn and get better. The language of skills knowledge and talents simply helps the manager identify where radical change is possible and where it is not!

- Two of the most pervasive management myths:

1. Talents are rare and special - everyone has recurring patterns of behavior. The talent alone isn't special, it is the matching of talent with the role that is special.

2. Some roles are so easy they don't require talent - Great managers do not believe that their filter is common to everyone. They're wired to believe that people are wired to excel at a role and will derive satisfaction from doing it well

- Peter Drucker said, "Even today, remarkably few Americans are prepared to select jobs for themselves. When you ask, 'Do you know what you are good at? Do you know your limitations?' they look at you with a blank stare. Or they often respond in terms of subject knowledge, which is the wrong answer."

- Know what you are looking for. Study your best.

- John Wooden said, "No matter how you total success in the coaching profession, it all comes down to a single factor - talent. There may be a hundred great coaches of whom you have never heard of in basketball, football, or any sport who will probably never receive the acclaim they deserve simply because they have not been blessed with the talent. Although not every coach can win consistently with talent, no coach can win without it."

- Talent is only potential. It takes great managers to turn talent to performance.

The Second Key: Define the Right Outcomes:

- Managers have less control than those they manage. They cannot do anything. They motivate influence etc. They have remote control.

- Their dilemma: The manager must retain control and focus people on performance but they are bound by the belief that they cannot force everyone to perform in the same way

- The solution: define the right outcomes and let each person find their own way to get their

- There is a strong temptation for managers to try and control and implement one best way

- The managers challenge is not to perfect people but to capitalize on each persons uniqueness

- Rules of thumb:

1. Don't break the bank - employees mus follow the required steps that deal with accuracy or safety

2. Standards rule - must follow required steps that are company or industry standards

3. Don't let the creed overshadow the message - required steps are only useful if they don't obscure the desired outcome

4. There are no steps leading to customer satisfaction - Required steps only prevent dissatisfaction they cannot drive customer satisfaction

Level I - customers expect accuracy

Level II - they expect availability

Level III - they expect a partnership. They want you to be listened to and responded to and to feel they are on the same side of the fence as you

Level IV - they expect advice. The feel closest to organizations that help them learn

- Focusing on outcomes is one thing but now do you know what are the right outcomes for your customers?

1. What is right for your customers - customers define value

2. What is right for your company - are outcomes in line with your strategy

3. What is right for the individual - go from players to playbook and not the other way

The Third Key: Focus on Strengths:

- Focus on each persons strengths and manage their weaknesses. Help people become more of who they are

- If you want to turn talent into performance you have to position each person so you are paying them to do what they are naturally wired to do. You have to oust them into the right role

- It is not treat others as you would want to be treated. Manage by exception. Treat others how they want to be treated

- Spend the most time with your best people. Your role is to turn talent into performance

- If you are paying less attention to your stars you are encouraging them to change their behavior to get noticed and those behaviors are what made them stars to begin with

- The fairest thing to do is treat everyone differently

- Don Shula on fairness, "I am going to be very consistent with every one of you because Ill treat every one of you differently. That's the way it is. The harder a guy works, the better he performs, and the more he meets my guidelines, the more leeway he is going to have with me. By the same token, if a guy doesn't work very hard for me or if hes not a very good player, hes not going to be around for very long."

- You learn from top performers

- Top performers have the most room for growth. Don't be held back by focusing on the average. Focus on excellence

- This does not mean that poor performance should be ignored. Just consider what is causing it

- A non talent is something that somebody doesn't possess. It can become a weakness when a person is in a role that requires that non talent

- Devising a support system is more productive and fun than trying to fix weaknesses. It allows you to focus on strengths and manage weaknesses.

- Find a business partner whose peaks match your valleys

- If all else fails you may have made a casting error and you must find the person an alternative role

The Fourth Key: The Right Fit:

- Every manager is eventually asked "where do I go from here" by employees looking to grow, earn more, get more prestige etc. What is the right answer?

- There is no right answer just a right way to approach the question. Help each person find the right fit

- The Peter Principle states that we promote up to a persons level of incompetence

- Create heroes in every role. Everyone climbing mindlessly to ever decreasing rungs is not productive or realistic

- Some roles performed excellently are more valuable that roles up the ladder performed averagely

- Broadbanding overlaps pay scales and promotes excellence at the current position

- Perform creative acts of revolt to reward excellence

- Acquiring varied experiences is important but peripheral to a healthy career. It is an accessory but not a driving force

- Self discovery is the driving guiding force for a healthy career

- Sunday night blues test. If you feel that stab of depression at the end of the weekend ask why? If not ask why?

- Managers should be the mirror to help discovery by constant feedback, reviews and goals

- Managers can level the playing field by creating heroes, designing levels of achievement, and broadbanding so decisions are made based more on talents and non talents vs money prestige

- Phil Jackson "Athletes aren't the most verbal breed. That's why bare attention and listening without judgement are so important."

Turning the Keys: A Practical Guide:

- The art of interviewing for talent:

1. Make sure the talent interview stands alone. Leave out pay and other details. Make sure the patterns of thought, feelings, and behavior match the job

2. Ask a few open ended questions and try to keep quiet. Let them reveal themselves to you. Believe what they say no matter what that reveals

3. Listen for specifics. The details are less important than the top of the mind simplicity with which they recall them. Specifics and top of mind will reveal recurring talents

4. Clues to talent. People are complex so you cant predict perfectly but listen for clues to the talents they have. A. rapid learning B. Satisfactions

5. Know what to listen for. Know how the best people respond and use those responses as differentiators

- Use performance management routine that is simple uses frequent interaction and focuses on the future and has employees track their own performance and learning

- Routine page 225

- What great managers expect of every talented employee: Look in the mirror any chance you get, muse, discover yourself, build your constituency, keep track, catch your peers doing something right

- What can you do if you work for someone who is not a great manager:

1. If they are too busy schedule a performance meeting for them

2. If they force you to do things their way set up a meeting to set performance outcomes

3. If they praise at inappropriate times bring it up in performance meeting

4. If they constantly ask how you are doing or intrude schedule a meeting on your time

5. If they ignore distrust take credit blame or disrespect then get out from under them

- How to break through conventional wisdom barricades:

1. Keep focus on outcomes

2. Value world class performance in every role

3. Study your best

4. Teach the language of great managers

Ringing In The New Year With New Innovations!

In all the classic cartoons a great idea is illustrated by a light bulb becoming illuminated over the character's head. That clichéd visualization of an ingenious idea may in fact become a reality in 2010! In Fortune's article the Next Little Thing 2010 there are a laundry list of mind-blowing innovations set to hit the market in 2010, one involves wireless electricity making the overhead illuminated light bulb all but a reality. What fitting symbolism to usher in the new year and the truly remarkable products set to enter our lives. Here is a blurb regarding the wireless electricity technology:

A physics professor, Soljačić dug into the problem and learned that if you could get two magnetic fields to resonate -- to sing the same note, in effect -- they could transfer an electric current. With two large magnetic coils, he found a way to throw 60 watts across a room, powering a light bulb. MIT, his employer, quickly patented the technology and encouraged Soljačićto start a company.

WiTricity's 15 employees are hard at work proving that Soljačić's magnetic coils can power almost any electrical device. Most of the company's potential customers have one major question: safety.

"There's a real perceptual problem," says CEO Eric Giler. "People think we're putting electricity in the air, and that's called lightning, and they know to stay away from that."

In fact, the coils turn electricity into magnetic fields, then back into electricity. Magnetic fields interact weakly with humans; as far as the fields are concerned, we are no different from air. Giler makes a point of standing between the coils whenever he demonstrates the technology.

At the Nikkei electronics conference in Tokyo in October, he was able to power a 1,000-watt klieg light from across the room -- a far cry from that 60-watt light bulb in Soljačić's first experiment. "We're going up the power curve," he says. -Chris Taylor

A few of my other favorites include invisible speakers, new bulletproof vests and remote communication devices for police and military dogs, and recycled brewery waste fish food. Check out the slideshow here and welcome in these exciting new innovations into our lives.

The 2010 National Hockey League Winter Classic!

So I got the call the other day from a friend in Jersey that there was a free extra ticket to the NHL's 2010 Winter Classic with my name on it. Needless to say I jumped on the chance to go. The game was a lot of fun and was first class in every respect. It was incredible to watch a hockey game at a classic venue like Fenway Park. Below are some pictures and videos from the day.

The view from my seat:

The view to the right:

The game as it started to get dark:


The military marching on and other pregame festivities:


The "Green Monstah":


The view to the left of my seat:

First video is the street outside Fenway about an hour prior to game time. Needless to say it was crazy out there.

Next video is a quick view of what the stadium was like pregame.

Next is the Philadelphia Flyers getting a warm welcome from the Boston faithful.

Last video was the military guys marching on to the field to Dropkick Murphy's live performance of "I'm Shipping Up to Boston" which was pretty sweet.