Getting Savings Right

By | 2017-12-15T06:33:58+00:00 December 15th, 2017|Global Market Update|

Why is it so hard to save? Photo: GeorgHH. Source: Wikipedia We often hear that there is a retirement crisis in this country. People aren’t saving enough today to fund their retirements tomorrow. Our national savings has declined from 10% in the 1980s to around 2.5% now. And if you save 2.5% of your salary for 40 years and put it in the bank, by the time you retire you’ll have set aside an amount equal to your salary. That’s not enough to retire, [...]

Saints and Sinners

By | 2017-11-16T07:26:34+00:00 November 16th, 2017|Global Market Update|

Sometimes the people and organizations we look up to turn out to have the same flaws as the rest of us. “The Reward of St. Sebastian.” Source: Wikipedia It’s natural to want to admire others, to look for role models and examples that we can learn from. Most of us grew up admiring parents, teachers, coaches, and other adults who looked out for us. The same holds for organizations. Some seem to stand out as models of selfless service, and we idolize them. So [...]

Putting Fun Into Finance

By | 2017-07-17T12:21:22+00:00 April 19th, 2017|Global Market Update|

Can personal finance be fun? Photo: Melodi2. Source: Morguefile For most of us, money matters are unpleasant. They involve budget issues and trade-offs and hard choices that frustrate everyone. So we need to encourage ourselves, to set up some kind of incentive program. For example, estate planners say you should update your will every three years or so. So: think about what would be a special treat—like eating at a favorite restaurant, or going to a special show—and reward yourself when you update your [...]

Scientific Recruitment

By | 2017-07-17T12:21:34+00:00 December 19th, 2016|Global Market Update|

Do we need more science majors? Photo: Analytical Mechanics Association. Source: NASA That’s what a lot of people think. And as a science major myself, the husband of a science major, and the father of four science majors, I certainly believe in the utility and importance of studying science in college. It helps young minds develop rigorous, analytical thinking, along with quantitative skills. But some proposals to provide special encouragement for kids to study science seem misguided, like college-loan forgiveness or different tuition rates [...]

Follow the Money (Part 6)

By | 2017-07-17T12:21:54+00:00 July 12th, 2016|Global Market Update|

What can go wrong? Pecora Commission Hearings, 1934. Source: Sunday Times There are lots of ways for compensation schemes to get off-track. If they aren’t properly tied to the company’s goals, the wrong types of behaviors are encouraged. My industry, financial services, is filled with stories of misaligned incentives and workers behaving badly. The most egregious are financial traders who get a cut of their trading desk’s profits. They use their firm’s financial position to go long or short various financial instruments—stocks, bonds, commodities, [...]

Follow the Money (Part 5)

By | 2017-07-17T12:21:54+00:00 July 11th, 2016|Global Market Update|

What’s the balance? Source: Gratisography How do you balance employee interests and owner interests? Customer concerns and management issues? The goals of all stakeholders—owners, employees, clients, and communities—should be considered. They key word for all these parties is equity. Equity as in people inside and outside the firm feel they are being treated fairly. And equity in the sense that employees have a proprietary feeling about the business—a sense of ownership, that what they do and how they do it makes a difference to [...]

Follow the Money (Part 4)

By | 2017-07-17T12:21:54+00:00 July 8th, 2016|Global Market Update|

Can’t we all just work together? Photo: Roy Lister. Source: Wikipedia Every employer’s dream is to have their workers act like owners. They want their employees to be diligent and energetic, and to treat customers well. They want workers to look out for the top line and the bottom line—growing revenues and maximizing earnings. And they want their people to behave in an ethical, sustainable way. But how do you get there? The principal-agent problem can’t just be wished away. For part of the [...]

Follow the Money (Part 3)

By | 2017-07-17T12:21:54+00:00 July 7th, 2016|Global Market Update|

Do salaries create conflict, too? Source: Gratisography Salaries have also been around a while. Our word “salary” comes from a Latin word for salt. Roman soldiers were given “salt money” as pay; we still may say that workers are “worth their salt,” meaning that they earn their pay. Salaries are set monthly, or annually. Salaries became more common during the industrial revolution. They were used to pay administrators and managers whose work was difficult to measure, but who weren’t partners or partial owners of [...]

Tour des Femmes?

By | 2013-08-02T09:58:44+00:00 August 2nd, 2013|Global Market Update|

Can women save the Tour de France? The race covers 2000 miles and takes 23 days, winding along country roads, through city streets, and up tortuous mountain passes. The rider with the lowest aggregate time is the overall winner, although there are team prizes as well. But the world’s premier cycling event is reeling. Between 1995 and 2010 only one winner wasn’t linked to doping, which is affecting its popularity. Thirty years ago Tour organizers included a parallel women’s Tour, using the same finish [...]

Tax Man

By | 2013-04-15T09:20:55+00:00 April 15th, 2013|Global Market Update|

Today is tax day. What have we learned? Every year, it never fails. April 15th rolls around, people file their taxes, and vats of ink are spilled on what our tax system means and how it could be improved. But the day they should focus on is April 18th this year: tax freedom day. That’s the day that that the average working American stops working for the government and starts working for him or herself. Of course, this varies by state. If you live [...]