Tag Archives: abundance

How Scarcity Trap Affects Our Thinking, Behavior; $, time

How Scarcity Trap Affects Our Thinking, Behavior

A Harvard economist finds there are psychological connections between the bad financial planning of many poor people and the poor time management of busy professionals. In both cases, he finds the experience of scarcity causes biases in the mind that exacerbate problems.

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RENEE MONTAGNE, HOST:

Let’s hear now about a new book that explores a major source of stress. The book is called “Scarcity” and it’s a look at what happens to us when we’re pressured with too little time or too little money. The authors say “Scarcity” actually changes how we think. NPR’s social science correspondent Shankar Vedantam explains.

SHANKAR VEDANTAM, BYLINE: Each September the state of Massachusetts asks one thing from “Scarcity” author and Harvard economist, Sendhil Mullainathan, to renew his car inspection sticker and each year this recipient of the MacArthur Genius Award does the same thing. He’s really busy, so on each day leading up to the expiration of the sticker, he tells himself he’ll attend to it the next day.

SENDHIL MULLAINATHAN: One more day of delay, I mean, what’s the big deal?

VEDANTAM: Pretty soon, Mullainathan finds himself driving around Boston with an expired sticker.

MULLAINATHAN: The sticker is three months expired and now you’re doing all sorts of stuff, like you’re driving down the street, oh, look, there’s a cop. I better make a right turn so he doesn’t see my expired sticker.

VEDANTAM: Turning the wrong way makes Mullainathan late for a meeting or late for class. Now, he has to spend time fixing the mistake, rescheduling meetings with students, playing catch-up. His next day gets even busier. Now, he definitely doesn’t have time to fix that sticker.

MULLAINATHAN: I do this constantly. Right now, I’ve got a meeting to get to. I don’t have the time to replace the sticker. Whereas, the truth is, the enormous amount of distortions I’ve now made for the last three months because of the stupid sticker add up to five times as much time as I would’ve spent just going and having it fixed.

VEDANTAM: Mullainathan recently decided to think about his behavior like a researcher would. Was he just a busy absentminded professor or was there something else going on? He thought about research in his own field. He studies the economics of poverty. Lots of studies show poor people tend to make bad financial decisions, the kind that land them in ever deeper cycles of debt.

Mullainathan realized there was an unexpected connection between his behavior and the behavior of the people he studied.

MULLAINATHAN: Just as the poor mismanage their money, isn’t it astonishing how badly I mismanage my time?

VEDANTAM: Not having enough money and not having enough time, might not seem like similar things, but psychologically, they are similar. You’re running low on something you desperately need, you feel the pinch of scarcity. Mullainathan turned to a colleague of Princeton, the psychologist Eldar Shafir. That conversation lead to the book, “Scarcity,” which they wrote together.

Just as Mullainathan was asking why he mismanaged his own time, Shafir said he was asking why the poor make bad financial decisions.

ELDAR SHAFIR: Perhaps it’s the context of poverty itself, being in that context, that brings about a very special psychology, a psychology that’s particular to not having enough. And in that psychology brings out problematic outcomes.

VEDANTAM: After lots of research Mullainathan and Shafir have concluded that when you don’t have something you desperately need, the feeling of scarcity works like a trap. In a study looking at poor farmers in India, for example, the researchers found that farmers tended to be better planners and thinkers when they were flush with cash. But right before harvest, when they were strapped for cash, Mullainathan says their brains focused only on short term goals.

MULLAINATHAN: When you have scarcity and it creates a scarcity mindset, it leads you to take certain behaviors which in the short term help you manage scarcity, but in the long term only make matters worse.

VEDANTAM: Poor farmers, for example, tend to weed their fields less often than wealthy farmers. It’s the same with being super busy. The busier Mullainathan got, the harder it became for him to make time to get his car sticker. In fact, there was a short term reward for not getting the sticker. On each day he didn’t get the sticker renewed, he saved a little time to devote to other pressing demands.

But each delay made things worse the next day. Scarcity, whether of time or money, tends to focus the mind on immediate challenges. You stretch your budget to make ends meet. People in the grip of scarcity are tightly focused on meeting their urgent needs, but that focus comes at a price. Important things on the periphery get ignored.

MULLAINATHAN: That’s at the heart of the scarcity trap. You’re so focused on the urgent that the important gets waylaid. But because the important gets waylaid, you’re experiencing even more scarcity tomorrow.

VEDANTAM: Mullainathan and Shafir think we ought to change how we think about poverty and how we think about time. When poor people and busy people run short of money or time, we tend to blame them.

MULLAINATHAN: There’s this presumption in our entire social policies here that mistakes happen because of willful negligence and I think just understanding that, yes, we need incentives to prevent willful negligence, but we also need a way to recognize that no matter how hard somebody tries, there will be mistakes.

VEDANTAM: It might be possible to reduce the impact of mistakes caused by scarcity. The poor farmer in India might need repeated reminders about weeding. One might not be enough. The minimum wage worker in America might need a couple of extra days to pay her bills instead of being slapped with a fine one day after payment is due.

For busy people, Shafir says a respite from scarcity might mean penciling in a block of time in their calendar so long term things have a chance to bubble up.

SHAFIR: One of the few things I’ve learned from the book which I try to adhere to now is throughout my day, when I have a day that’s, you know, scheduled moment by moment throughout the day, fully packed, I try to arrange a couple of half hour chunks, half hour slots that are unplanned.

VEDANTAM: If you try to make an appointment with Shafir at that time, he’ll tell you he has a meeting. What he doesn’t tell you is that the meeting is with himself. Shankar Vedantam, NPR News.

Things that we all need to think about…

Some investors think that saving for retirement is too much of a burden
By not saving now, investors will suffer a 72% decline in standard of living in retirement
Financial pros recommend investors save at least 15% of income for retirement
USA TODAY markets reporter Matt Krantz – mkrantz@usatoday.com.

Q: What can investors do who cannot afford to save a dime for retirement?

A: Investing for retirement is a sacrifice. Investors are foregoing spending now so they’ll have money to spend in the future.

Some investors say saving for retirement is one thing they cannot afford or choose not to do it. The problem is that if investors don’t cut their current standard of living now, to invest for retirement, they’re going to be forced to cut it in the future.

The basic rule of thumb is that investors must, on average, put aside 15% of their paychecks if they want to have a fighting chance of having any money left over when they turn 95, says Stuart Ritter, financial planner at T. Rowe Price.

Just saving a small amount, say 3%, just isn’t going to cut it. Even if a 30-year-old saves 3% of income toward retirement, the chances that nest egg will last through their 95th birthday is just 1%. A person who saves nothing for retirement now will likely, on average, suffer a 72% decline in standard of living in retirement, Stuart says.

So the question isn’t whether to save now or not. It’s really a matter of deciding to give up income now, or give it up to the point of struggling later.

Bridges out of poverty

I recently heard someone speak about a book, DVD, seminar, and nationwide program that is all based on the book “Bridges Out of Poverty.”
I strongly recommend that you check it out http://www.bridgesoutofpoverty.com/faqs/
In short, it discusses how different classes have different mindsets, perceptions, and priorities. It also helps businesses and the community bridge those differences to communicate, work and help each other better. Likewise, the program provides tools and strategies for those in poverty to get out of it, if they want.
I grew up with two parents who came from poverty. My mother’s family was always living paycheck to paycheck and she often spoke of the day ‘they’ came to repossess her parent’s furniture. She had to wear hand-me-down shoes and clothes from her relatives and her brothers. My mother’s toes were actually permanently injured because she had to wear shoes that were too small. All the kids had to work and give their parents their money.
My father’s family was a little better off but, like my mother, he lived during the Depression. Jobs were tough and even though his family had a better work ethic, he, too, wore second hand clothes.
They married and struggled for many years. I recall one story when my parents had $0.59 in the bank, one can of soup, and my father brought someone home for dinner. My father started a business from a chicken coop and grew it to 30 employees and later sold it. They retired comfortably and he was actually a savvy investor.
They sent me to private school and I rubbed elbows with all sorts of classes and people, including the very wealthy.
As I sat through the lecture of “Bridges Out of Poverty”, the speaker discussed the three classes; Poverty, Middle Class, and Wealthy – and how they think differently. I found that I had thoughts or perspectives from all classes. My parents probably instilled in me thoughts from their years of Poverty. I lived a middle class, maybe upper middle class life. I learned some wealthy thoughts from classmates and the school.
Lessons? Each class has its advantages and disadvantages.
  • Those in poverty often can achieve great success because they believe in destiny of some kind and also believe that they have little or nothing to lose. They can just let go and go for it. They work hard. However they have ‘tyranny of the moment’ often because their lives may be ruled by bills and immediate needs.
  • Those in the middle class have future vision – they can think about and plan for the future. They also have a network of social and business contacts that can work together. However there are sometimes examples of conditional relationships.
  • Wealthy classes have the relationships and connections to do well. They have expertise. However, there are examples of conditional relationships (vs unconditional) and loss of work ethic.
The program is not about judgement, labeling, or otherwise. It points out rules of thumb for each group and simply the awareness of these things can help – it helped me. The program can then point out ways that each of us can change or think differently if we want to change a class.
How do you prioritize in life? What do you think about social and business connections? What about your work ethic? Your thoughts on destiny, risk, taking chances? Do you have a future vision?
here is more….
Bridges Out of Poverty is a powerful model and book for economic and social change, sustainability, and stability. It inspires innovative solutions in those looking to counter poverty and its impact at all levels in a community. This approach helps employers, higher education, community organizations, social service agencies, hospitals, individuals, and others address poverty in a comprehensive way. People from all economic classes come together to improve job retention rates, build resources, improve outcomes, and support those who are moving out of poverty
Getting Ahead in a Just-Gettin’-By World is a program that supports people in poverty to create their own plan for stability. It embeds the concepts of Bridges Out of Poverty into a format where groups examine the impact of poverty on themselves and their communities.

Simple Stuff – action, work, opportunity

(Simple Stuff is simply a bunch of inspirational, motivational and other quotes meant to make you think, reflect, smile, even laugh a bit. Hopefully helpful, useful stuff….)

I hope the millions of people I’ve touched have the optimism and desire to share their goals and hard work and persevere with a positive attitude. – Michael Jordan

I don’t pity any man who does hard work worth doing. I admire him. I pity the creature who does not work, at whichever end of the social scale he may regard himself as being. –Theodore Roosevelt

Talent in cheaper than table salt. What separates the talented individual from the successful one is a lot of hard work. – Stephen King 

Usually, the best way to find the yellow brick road of your life, is to start out on the dusty, dirt one.
And then let yourself become so preoccupied in making the best of it, having fun, and challenging yourself that you actually stop paying attention to the path.
Until, one day, not so long from now, with a new best friend, wearing cool clothes, feeling awesome, a teeny tiny bit taller, fresh from a WOW vacation, looking for the path you just left, you’ll notice that it’s 24 carats… baby.
And you’ll wonder for a long, long time, sipping on some exotic fruit drink, when the transformation actually took place… – Michael Dooley – The Universe

 

Young people are threatened… by the evil use of advertising techniques that stimulate the natural inclination to avoid hard work by promising the immediate satisfaction of every desire. –Pope John Paul II

Opportunity is missed by most people because it is dressed in overalls and looks like work.  –Thomas A. Edison

 

Do you want to know who you are? Don’t ask. Act! Action will delineate and define you. – Thomas Jefferson

Action is the foundational key to all success.- Pablo Picasso

Feeling stressed, tense, worried?

happyfacefinger

You know, we’ve all been there in one way or another: we’ve been tense and focused on money, maybe stressed, maybe short with our spouse, maybe short with our kids….and in that moment when we’re stressing about money, we’re missing the world around us.

You know what I mean when I say “That awful feeling in the pit of your stomach because you feel like you have to worry about running out of money at the end of the month.”

I’ve been there, then back on “top”, then stressed again, a few times in my life.

I heard a funny thing the other day; someone was saying how they thought ‘rich people’ always think about money and ‘rich people’ are all shallow.

Maybe some are shallow, but in my experience and from what I read, when you had enough money to pay the bills and to live in a decent way, you’re NOT thinking about money much at all. When you have enough to cover the bills, you can think about fun things, about things that you WANT to do in your job and career, and things that you can do for or contribute to others – you can choose to enjoy life a little more.

When I was struggling with income and bills, and when I observe others that have the same struggle to pay bills and meet their obligations, they think about money all day long.

There is a great book that I highly recommend called “Bridges out of Poverty”. It helps explain how people struggling in poverty are constantly thinking about how they are paying the bills, food on the table, tires on the car, utility bills, etc.

Even if we aren’t at the poverty level, we can sometimes have some traits of the poverty mindset……we worry about money, about paying the mortgage, about our jobs, etc. This never creates a good feeling inside, does it?

Again, as someone that has been back and forth, here is some wisdom that I’ve learned from a few others and I believe that it really can help:

  • Focus on what you want, not what you don’t want – instead of focusing on the bills and lack of cash, focus on the things that you really want, the freedom, peace of mind, better health, better relationships, enjoying life, security for your family, etc.

  • Watch your self-talk- we all talk to ourselves and ask ourselves questions throughout the day. There is enough negativity in the world, don’t add to it by bringing yourself down. I was someone who beat myself up for many things and once in a while still do – if you do also, STOP. Reflect on accomplishments, look for references why you’re good at something, ask yourself questions like “Why do I deserve this?” and “Why am I so lucky?” instead of things like “Why can’t I earn more money” or ‘why is this such a struggle’ or ‘why don’t I ever win anything?”

  • Have a vision – ok maybe your life isn’t where you want it to be now and you want to improve – almost everyone does….create a vision. It doesn’t have to be a major complicated thing – something as simple as some bullet points or a paragraph or two is fine – create a simple story of you as you want to be – make the story in present tense as if you already have it – as if you are already “THERE” and you’re looking back on today, when you are struggling. Make sure that in the story you talk about how you’re proud of the steps you took, the hard work, the good attitude, and how you changed for the better. Remember, tell the ideal story of your life as if it is already done!

  • Enjoy the present, live in the moment – when we worry about the future or fret over the past, we miss moments and experiences right in front of us. I recall a time when my wife and I had time alone and I sat there worrrying about something that never even happened. Another time I recall worrying about something and basically ignoring my daughters when I had a free day with them. We all lost and nothing was gained. Take a moment to look around, be aware, and live today’s life. Things can happen in a moment. Look for miracles. You gotta celebrate life’s moments no matter what. There is no rehearsal.

  • Here’s something that can be the toughest for any of us – do the above each and everyday. We can all do things for a while or on occasion, or here and there. We have to ask the right questions, focus on the good stuff, reflect on our vision, and enjoy the present every day! We all must take action – even if they are just baby steps each day. Ask, ‘what thing, regardless how big or small, can I do today?” You don’t have to spend long on it – but at least 5 -10 minutes. Can you turn off the TV, put down the phone, or walk away from the computer or ipad for 10 minutes if it makes you better?

Remember, people with much less smarts, ability, education, opportunity have done great things, contributed, made money, helped others, and been successful , you have the ability, you have the power inside, you just need to take action.

http://www.onewebstrategy.com

😉

Feel Important !

i-am-important

When you’re with a group of people, how do you want to feel?
Think about it….whether it is at work or socially…..

….in most cases people want to feel important (among other things)!

When someone in your past has treated you as an important person, or someone listens to you and your thoughts, or you’re a client and they treat you like a VIP – you feel important and that feels good.

Maybe you have a friend, a teacher, a mentor – someone that truly thinks you are important and they treat you that way.

You feel pretty good right?

You feel like you’re special, like you can do things and you have more confidence.

Do you make or let others feel important?

I know a gentleman, I don’t get a chance to see him much anymore, but he always made me feel special. He listened to me and I could tell he valued what I said.

I know that he was much smarter than I was and I probably didn’t have much new to say or much to add to his knowledge on things, but he never acted that way.

I had the chance to see him out in public somewhere – a group of us had to go to the supermarket to buy food for an activity.

It was amazing, he asked a clerk where something was and he made that clerk feel special! The guy left smiling and had a spring in his step!

Later at the cashier, he made her feel special, too! She smiled to herself and looked happy doing her job.

I wish I noticed more what he said – it wasn’t much….it was a few passing words, a smile, a question or two perhaps – but the ‘special’ part was no more than 2 minutes – probably 1 minute.

Some people are born with the gift, like he was, but we all can develop it.

Think of ways that you can make others feel special each day.

At work – your boss, co-workers, your clients, your support team, etc.

At home – your spouse, your children, neighbors

In life – friends, mentors, protégés, community members

It doesn’t matter what your job or career is – whether you’re in sales, teaching, medicine, art – making others feel important will help you and help them – and help you accomplish your mission – whatever that is.

Here’s a set of good Questions of Power:

  1. How can I make others feel important each day?
  2. What things can I say or to make others feel important?
  3. What makes me feel important?
  4. Why do I feel important?

Everyone  has an invisible sign hanging from their neck saying, ‘Make me feel important.’  Never forget this message when working with people. – Mary Kay  Ash
Thanks!
www.onewebstrategy.com

Simple Stuff

SimpleStuff

(Simple Stuff is simply a bunch of inspirational, motivational and other quotes meant to make you think, reflect, smile, even laugh a bit. Hopefully helpful, useful stuff….)

Being in the right place at the right time, isn’t something you can force. It just happens when you keep busy. Effortlessly.  Imagine that,      The Universe (www.tut.com)

“Everything that happens in your life— both what you’re thrilled with and what you’re challenged by— began with a decision. I believe that it’s in your moments of decision that your destiny is shaped. The decisions that you’re making right now, every day, will shape how you feel today as well as who you’re going to become in the nineties and beyond.” —Anthony Robbins, Awaken the Giant Within, p. 32-33

Thousands of candles can be lighted from a single candle, and the life of the candle will not be shortened. Happiness never decreases by being shared. Buddha

“A good head and a good heart are always a formidable combination.” – Nelson Mandela

“If someone isn’t what others want them to be, the others become angry. Everyone seems to have a clear idea how other people should lead their lives but none about his or her own.” – The Alchemist by Paulo Coelho

It’s not the dazzling voice that makes a singer. Or clever stories that make a writer. And it’s not piles of money that make a tycoon.
It’s having a dream and wanting to live it so greatly that one would rather move with it and “fail” than succeed in another realm.  Michael Dooley

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