Michael Norton: How to buy happiness

12 Things Happy People Do Differently

Marc and Angel Hack Life Blog
August 30th, 2011
by Jacob Sokol of Sensophy

Cover via AmazonStudies conducted by positivity psychologist Sonja Lyubomirsky point to 12 things happy people do differently to increase their levels of happiness.  These are things that we can start doing today to feel the effects of more happiness in our lives.  (Check out her book The How of Happiness.) …

1. Express gratitude. – When you appreciate what you have, what you have appreciates in value.  … We’re gonna have a hard time ever being happy if we aren’t thankful for what we already have.
2. Cultivate optimism. – …People who think optimistically see the world as a place packed with endless opportunities, especially in trying times.
3. Avoid over-thinking and social comparison. – Comparing yourself to someone else can be poisonous.  … If you feel called to compare yourself to something, compare yourself to an older version of yourself.
4. Image via WikipediaPractice acts of kindness. – Performing an act of kindness releases serotonin in your brain.  … What’s even cooler about this kindness kick is that not only will you feel better, but so will people watching the act of kindness.  …
5. Nurture social relationships. – The happiest people on the planet are the ones who have deep, meaningful relationships.  …
6. Develop strategies for coping. – How you respond to the ‘craptastic’ moments is what shapes your character.  …  It helps to have healthy strategies for coping pre-rehearsed, on-call, and in your arsenal at your disposal.
7. Image via WikipediaLearn to forgive. – …  When you ‘hate’ someone, and you’re continuously thinking about it, those negative emotions are eating away at your immune system.  …
8. Increase flow experiences. – Flow is a state in which it feels like time stands still.  It’s when you’re so focused on what you’re doing that you become one with the task.  …
9. Savor life’s joys. – Deep happiness cannot exist without slowing down to enjoy the joy.  …  It’s the simple things in life that can be the most rewarding if we remember to fully experience them.
10. Commit to your goals. – … When you’re fully committed to doing something, you have no choice but to do that thing.  Counter-intuitively, having no option – where you can’t change your mind – subconsciously makes humans happier because they know part of their purpose.
11. Practice spirituality. – When we practice spirituality or religion, we recognize that life is bigger than us.  We surrender the silly idea that we are the mightiest thing ever.  …
12. Image via WikipediaTake care of your body. – …  If you don’t have your physical energy in good shape, then your mental energy (your focus), your emotional energy (your feelings), and your spiritual energy (your purpose) will all be negatively affected.  …

Jacob Sokol is committed to living an extraordinary life.  Today he released “Living on Purpose – An Uncommon Guide to Finding, Living, and Rocking Your Life’s Purpose.”  He also loves his mom dearly.

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22 Things to Do During That Boring Conference Call

BNET
By Laura Vanderkam | August 15, 2011

Photo courtesy flickr user, Jayegirl99

Image via WikipediaOn my “Crock Pot” post last week, I suggested ordering groceries online during boring conference calls. A few readers asked for a list of other things you can do during boring conference calls to pass the minutes and hours when you only need to pay a little bit of attention (like if someone says your name).

… I have mixed feelings about writing such a post. Because fundamentally, if you repeatedly experience conference calls that require so little attention that you can multi-task, then why are you on them? The most productive use of your time and energy is to figure out a way to kill such calls, or pare down the invite list to only those folks who need to be there. You can also ask to shorten the time frame. Negotiate down to half an hour from an hour, and watch your life improve.

Image via CrunchBase… If you’re not going to be able to change your glut of conference calls without making choices you don’t wish to make, then here are some other ways to pass the time in a mildly productive fashion without checking Facebook (not that there’s anything wrong with that):

1. Read a novel in bite size chunks at DailyLit.com

2. Write a love letter to your spouse

3. Look at photos of major art works at Metmuseum.org

4. Schedule a mole check or other health maintenance appointment you’ve been avoiding at ZocDoc.com

5. Knit

6. Doodle

Image via CrunchBase7. Make a photo book at Shutterfly or another major photo site

8. Cross off a major financial housekeeping task (like setting up automatic transfers from checking to savings)

9. Pace — it burns more calories than sitting there!

10. Do sit-ups or push-ups, or at least contract your abs

11. Challenge your notions of the universe by reading a political blog that represents views that are the polar
opposite of yours

12. Read the website of a daily newspaper in a random small town you’ve never visited

13. Watch a video from the Khan Academy on a math or science topic that’s long confused you (as long as you’ve got your phone call on mute)

Image via Wikipedia14. Brush up on history by reading a document you haven’t looked at since civics class (do you know what’s in the Declaration of Independence?)

15. Read poetry at the Poetry Foundation’s website

16. Send an email to an old friend asking how he’s doing

17. Clean your desk

18. Plan how you can knock an item off your List of 100 Dreams this weekend

19. Send a thank you note to someone who’s done something good for the world. Not necessarily someone famous; an under-appreciated volunteer at your church would be a good start.

20. Explore a subculture that’s completely foreign to you. I spent some time earlier this spring reading posts on chicken-raising forums. Did you know a rooster was called a “roo”?

21. Via Alice.com, make sure you never run out of toilet paper again

22. Get started on your Christmas shopping, or pick out items and cards for birthdays and schedule deliveries in advance

How do you pass the time during long conference calls? Help me get to at least 25!

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Larger Withdrawals From IRAs in 2010 May Help Savers With Taxes

Bloomberg

By Danielle Kucera - Oct 20, 2010 11:01 PM CT
For U.S. taxpayers making mandatory withdrawals from an individual retirement account, 2010 may be a good year to take out more than necessary because tax rates may rise. …
Savers who may be in a higher tax bracket next year should consider withdrawing more than the minimum in 2010, said Mark Nash, a partner in the Dallas office of the New York-based Private Company Services practice of accounting and advisory firm PwC. Required withdrawals are based on a formula of the account balance and the individual’s age.
“Pulling out a large sum in 2010 would lessen the 2011 amount, and make that year’s distribution lower,” said Nash, who advises high net-worth investors. …
The U.S. government suspended required minimum distributions for tax year 2009 in response to plummeting account balances after the Standard & Poor’s 500 Index dropped 38 percent in 2008. Mandatory distributions returned in 2010 as the economy strengthened and the S&P 500 rose 23 percent in 2009. Roth IRAs, which are funded with post-tax dollars, are exempt from minimum withdrawal rules while the owner is alive.

Rising Rates

President Barack Obama has proposed allowing the top two marginal income tax rates to rise to 39.6 percent and 36 percent from 35 percent and 33 percent for individuals earning more than $200,000 and couples making more than $250,000. Congress is scheduled to take up taxes when it returns from recess in November.
“This uncertainty doesn’t mean that people shouldn’t be sitting down and doing their planning now,” said Greg Rosica, a tax partner at consulting firm Ernst & Young LLP in Tampa, Florida, and contributing author to the Ernst & Young Tax Guide.
Someone who may be in a lower tax bracket in 2010 because of large deductions or less income should also consider taking a bigger distribution this year to take advantage of lower rates, said Rebecca Pavese, an accountant at Palisades Hudson Financial Group’s national tax practice in Atlanta.

Combine Withdrawals

Taxpayers who aren’t already taxed at top rates should make sure taking a bigger distribution won’t tip them into a higher bracket, said Bill Fleming, a managing director in the Hartford, Connecticut, office of PwC. …
Those who pay estimated taxes during the year can request the account administrator to withhold money from their RMDs and pay income tax just once at the year’s end, said Rosica of Ernst & Young. That way they can hold onto their money longer and invest it without paying a penalty for underpayment, Pavese said.
The law assumes that payments are made equally throughout the year unless the taxpayer states otherwise, according to the IRS.

Charity Deduction

… Any IRA account holder can give all or part of a distribution to charity and take a deduction for the donation, said Debbie Cox, a Dallas, Texas-based wealth adviser for J.P. Morgan Private Bank, which is based in New York. A provision that allowed taxpayers to roll over a distribution directly to a charity and avoid income tax expired at the end of 2009, she said.
IRA holders should also try to take their required withdrawals at roughly the same time every year to avoid mistakes or forgetting about it, Fleming, of PwC, said.
To contact the reporter on this story: Danielle Kucera in New York at dkucera6@bloomberg.net.
To contact the editor responsible for this story: Rick Levinson at rlevinson2@bloomberg.net.

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Five attributes of enduring family businesses

The keys to long-term success are professional management and keeping the family committed to and capable of carrying on as the owner.

McKinsey Quarterly
JANUARY 2010 • Christian Caspar, Ana Karina Dias, and Heinz-Peter Elstrodt
Family businesses are an often overlooked form of ownership. Yet they are all around us—from neighborhood mom-and-pop stores and the millions of small and midsize companies that underpin many economies to household names such as BMW, Samsung, and Wal-Mart Stores. One-third of all companies in the S&P 500 index and 40 percent of the 250 largest companies in France and Germany are defined as family businesses, meaning that a family owns a significant share and can influence important decisions, particularly the election of the chairman and CEO.
As family businesses expand from their entrepreneurial beginnings, they face unique performance and governance challenges. … Indeed, less than 30 percent of family businesses survive into the third generation of family ownership. Those that do, however, tend to perform well over time compared with their corporate peers, according to recent McKinsey research. …
To be successful as both the company and the family grow, a family business must meet two intertwined challenges: achieving strong business performance and keeping the family committed to and capable of carrying on as the owner. Five dimensions of activity must work well and in synchrony: harmonious relations within the family and an understanding of how it should be involved with the business, an ownership structure that provides sufficient capital for growth while allowing the family to control key parts of the business, strong governance of the company and a dynamic business portfolio, professional management of the family’s wealth, and charitable foundations to promote family values across generations (Exhibit 1).

Exhibit 1: For a family business to be successful, five dimensions of activity must be working well and in synchrony.

Family

Family businesses can go under for many reasons, including family conflicts over money, nepotism leading to poor management, and infighting over the succession of power from one generation to the next. Regulating the family’s roles as shareholders, board members, and managers is essential because it can help avoid these pitfalls.
Large family businesses that survive for many generations make sure to permeate their ethos of ownership with a strong sense of purpose. Over decades, they develop oral and written agreements that address issues such as the composition and election of the company’s board, the key board decisions that require a consensus or a qualified majority, the appointment of the CEO, the conditions in which family members can (and can’t) work in the business, and some of the boundaries for corporate and financial strategy. …
Long-term survivors usually share a meritocratic approach to management. There’s no single rule for all, however—policies depend partly on the size of the family, its values, the education of its members, and the industries in which the business competes. …
As families grow and ownership fragments, family institutions play an important role in making continued ownership meaningful by nurturing family values and giving new generations a sense of pride in the company’s contribution to society. Family offices … can bring together family members who want to pursue common interests, such as social work, often through large charity organizations linked to the family. … It can also keep the family happy by providing investment, tax, and even concierge services to its members.

Ownership

Maintaining family control or influence while raising fresh capital for the business and satisfying the family’s cash needs is an equation that must be addressed, since it’s a major source of potential conflict, particularly in the transition of power from one generation to the next. Enduring family businesses regulate ownership issues—for example, how shares can (and cannot) be traded inside and outside the family—through carefully designed shareholders’ agreements that usually last for 15 to 20 years.
Many of these family businesses are privately held holding companies with reasonably independent subsidiaries that might be publicly owned, though in general the family holding company fully controls the more important ones. … Many family businesses pay relatively low dividends because reinvesting profits is a good way to expand without diluting ownership by issuing new stock or assuming big debts. …
To keep control, many family businesses restrict the trading of shares. Family shareholders who want to sell must offer their siblings and then their cousins the right of first refusal. In addition, the holding often buys back shares from exiting family members. Payout policies are usually long term to avoid decapitalizing the business.
Because exit is restricted and dividends are comparatively low, some family businesses have resorted to “generational liquidity events” to satisfy the family’s cash needs. … One chairman said of his company, “Every generation has a major liquidity event, and then we can go on with the business.”

Governance and the business portfolio

With clear rules and guidelines as an anchor, family enterprises can get on with their business strategies. Two success factors show up frequently: strong boards and a long-term view coupled with a prudent but dynamic portfolio strategy.

Strong boards

Large and durable family businesses tend to have strong governance. … On average, 39 percent of the board members of family businesses are inside directors (including 20 percent who belong to the family), compared with 23 percent in nonfamily companies, according to an analysis of the S&P 500.¹ …
Of course, it’s important to complement the family’s knowledge with the fresh strategic perspectives of qualified outsiders. Even when a family holds all of the equity in a company, its board will most likely include a significant proportion of outside directors. One family has a rule that half of the seats on the board should be occupied by outside CEOs who run businesses at least three times larger than the family one.
Procedures for all nominations to the board—insiders as well as outsiders—differ from company to company. …
Family businesses, like their nonfamily peers, face the challenge of attracting and retaining world-class talent to the board and to key executive positions. In this respect, they have a handicap because nonfamily executives might fear that family members make important decisions informally and that a glass ceiling limits the career opportunities of outsiders. Still, family businesses often emphasize caring and loyalty, which some talented people may see as values above and beyond what nonfamily corporations offer.

A long-term portfolio view

Successful family companies usually seek steady long-term growth and performance to avoid risking the family’s wealth and control of the business. This approach tends to shield them from the temptation—which has recently brought many corporations to their knees—of pursuing maximum short-term performance at the expense of long-term company health. A longer-term planning horizon and more moderate risk taking serve the interests of debt holders too, so family businesses tend to have not only lower levels of financial leverage but also a lower cost of debt than their corporate peers do (Exhibit 2).

Exhibit 2: Family businesses tend to have lower levels of financial leverage and a lower cost of debt than their corporate peers do.

The longer perspective may make family businesses less successful during booms but increases their chances of staying alive in periods of crisis and of achieving healthy returns over time. In fact, despite the unique challenges facing family-influenced businesses, from 1997 to 2009 a broad index of publicly traded ones in the United States and Western Europe achieved total returns to shareholders two to three percentage points higher than those of the MSCI World, the S&P 500, and the MSCI Europe indexes (Exhibit 3). It is difficult to provide statistical proof that the family influence was the main driver. The results were surprisingly stable across geographies and industries, however, and indicate that family businesses have performed at least in line with the market—a finding corroborated by academic research.²

Exhibit 3: Publicly traded family-influenced companies often have higher total returns to shareholders than do leading indexes such as MCSI Europe, MSCI World, and S&P 500.

This long-term focus implies relatively conservative portfolio strategies based on competencies built over time, coupled with moderate diversification around the core businesses and, in many cases, a natural preference for organic growth. Family-influenced businesses tend to … [make] smaller but more value-creating deals than their corporate counterparts do … . The average deal of family businesses was 15 percent smaller, but the total value added through it—measured by market capitalization after the announcement—was 10.5 percentage points, compared with 6.3 points for their nonfamily counterparts.³
Nonetheless, too much prudence can be dangerous. … Excessive risk aversion might, for example, unduly limit investments to maintain and build competitive advantage and to diversify the family’s wealth. Diversification is important not only for overall long-term performance but also for control because it helps make it unnecessary for family members to take money out of the business and diversify their assets themselves.
That’s why most large, successful family-influenced survivors are multibusiness companies that renew their portfolios over time. … In general, family businesses seek a mix: companies with stable cash flows and others with higher risk and returns. …The idea is to renew the portfolio constantly so that the family holding can preserve a good mix of investments by shifting gradually from mature to growth sectors.

Wealth management

Beyond the core holdings, families need strong capabilities for managing their wealth, usually held in liquid assets, semiliquid ones (such as investments in hedge funds or private-equity funds), and stakes in other companies. By diversifying risk and providing a source of cash to the family in conjunction with liquidity events, successful wealth management helps preserve harmony. …
[Recent events] highlight the importance of a professional organization with strong, consolidated, and rigorous risk management to oversee the wealth family businesses generate. For large fortunes, the best solution is a wealth-management office serving a single family…. A wealth-management office that serves a group of unconnected families is an option when individual ones don’t have the scale to justify the cost of a single-family office. …

Foundations

Charity is an important element in keeping families committed to the business, by providing meaningful jobs for family members who don’t work in it and by promoting family values as the generations come and go. Sharing wealth in an act of social responsibility also generates good will toward the business. …
Money alone does not guarantee a high social impact. In addition to the financial and operational issues facing any charitable activity, families must cope with the critical challenge of nurturing a consensus on the direction of their philanthropic activities from one generation to the next. …
Almost all companies start out as family businesses, but only those that master the challenges intrinsic to this form of ownership endure and prosper over the generations. The work involved is complex, extensive, and never-ending, but the evidence suggests that it is worth the effort for the family, the business, and society at large.

About the Authors

Christian Caspar is a director in McKinsey’s Zurich office; Ana Karina Dias is an associate principal in the São Paulo office, where Heinz-Peter Elstrodt is a director.
The authors wish to acknowledge the contributions of Andres Maldonado, an alumnus of McKinsey’s São Paulo office.

Notes

¹ Ronald C. Anderson and David M. Reeb, “Founding-family ownership and firm performance: Evidence from the S&P 500,” The Journal of Finance, 2003, Volume 58, Number 3, pp. 1301–27.
² See Ronald C. Anderson; David M. Reeb, “Founding-family ownership and firm performance: Evidence from the S&P 500,” The Journal of Finance, 2003, Volume 58, Number 3, pp. 1301–27; and also Roberto Barontini and Lorenzo Caprio, “The effect of family control on firm value and performance: Evidence from continental Europe,” EFA 2005 Moscow Meetings paper, 2005.
³ The sample includes 78 deals for family-owned businesses and 494 deals for businesses not owned by families. The acquirers (both kinds of companies) were constituents of the US S&P 500, the German HDAX, or the French SBF 120 (Société des Bourses Françaises 120 Index) stock indexes. Value added through the deal is defined as the change in market capitalization, adjusted for market movements, from two days prior to two days after the announcement. The analysis includes all deals completed from 2005 to late 2009 with a value of over $500 million in which the acquirers’ ownership went from nothing to 100 percent.

Required Minimum Distribution Rules Change After This Year

401khelpcenter.com

NEW YORK, NY, December 7, 2009 -- "The 2008 tax legislation to give senior citizens a reprieve from the requirement to take 2009 required minimum distributions (RMDs) from employer-sponsored tax-qualified retirement plans and IRAs was a relief to many," says Lesli Laffie, tax analyst for the Tax & Accounting business of Thomson Reuters. "… However, there may be sound tax reasons to either take or stop taking RMDs before 2009 ends," she advises. "And, seniors who are well-off and charitably inclined may want to consider transferring up to $100,000 of IRA funds directly to charity before 2010."
The RMD Quandary
… In years other than 2009, the failure to take an RMD could trigger a 50 percent penalty on the undistributed RMD. The 2009 RMD 'holiday' is available to taxpayers who own or are beneficiaries of retirement plan accounts (generally, 401k, 403(b), or 457(b) plans), or who are traditional IRA owners or beneficiaries, or Roth IRA beneficiaries. The holiday means they can withdraw less than 100 percent of their RMDs for 2009, without incurring the penalty. The suspension without penalty applies only to RMDs otherwise required for 2009, not to RMDs for 2008 that had to be taken by April 1, 2009. Taxpayers who turned 70 1/2 in 2009 still must take an RMD by Dec. 31, 2010.
"There are a number of issues to bear in mind when deciding whether or not to withdraw in 2009," says Laffie. "For those who have inherited Roth IRAs, withdrawals are tax free, so the only decision for those beneficiaries is whether to leave or withdraw account assets."
Consider taking RMDs before 2009 ends if:

• Your tax rate may be lower in 2009 than in 2010. … Rates are always subject to change, "but if a taxpayer believes he will be in a higher tax bracket in 2010 (due to higher income and/or fewer deductions), he may want to take RMDs in 2009 to incur tax at the lower rate," advises Laffie. In addition, a 2009 RMD would lessen the amount of future RMDs. "If a taxpayer anticipates that tax rates will go up in the future, acceleration of RMDs into 2009 may be an appropriate strategy."
• You have offsetting deductions. Taxpayers with high 2009 deductions relative to income, such as medical expenses, may be able to offset an RMD, but will lose the part of the medical deduction that equals 7.5 percent of their adjusted gross income (AGI). A taxpayer with a charitable contribution deduction carryover that will expire soon, or with a net operating loss, may also be able to offset the increase in income from an RMD.
• You receive social security. A taxpayer whose Modified AGI (MAGI) is below the level requiring taxability of social security payments should consider taking an RMD to the extent those payments will continue to escape taxation…
• You decide to roll over the distribution into a Roth IRA. Because RMDs are not required for 2009, a 2009 withdrawal is not considered to be an RMD. Therefore, it can be rolled over into a Roth IRA (as long as MAGI does not exceed $100,000 or you are not married filing separately). …"In 2010, more lenient rules take effect in rolling over a traditional IRA to a Roth IRA, but they won't apply to RMDs," notes Laffie.

Consider taking the RMD holiday (i.e., suspending RMDs) for 2009 if:

• More of your social security payments will become taxable. Taxpayers receiving social security, but whose payments have not yet triggered 85 percent taxability (joint filers with MAGI under $44,000, or under $34,000 for singles and HOHs), should consider forgoing RMDs. …
• Your income is high. If taking an RMD would subject you to a phaseout of itemized deductions and/or personal exemptions, it is probably beneficial to skip the RMD.
• You have other sources of income to pay bills, and therefore do not need the RMD. …

"Skipping or taking the RMD holiday, or taking only partial RMDs, is an individual decision requiring analysis of various factors," advises Laffie. "Before 2009 ends, taxpayers should take a look at their overall tax picture and make the decision that's optimal for them."
Donating IRA Funds to Charity
Until the end of 2009, those age 70 1/2 and older can contribute up to $100,000 from their IRAs directly to one or more charities. This transfer is not included as income on the federal tax return. But you do not get a charitable deduction, and the withdrawal does not count as an RMD because RMDs are not required for 2009.
So why consider such a donation now? "For those who are very charitably inclined, the technique may hold appeal, in part because these donors won't reach the ceiling on charitable deductions," observes Laffie. "Also, by using IRA money to make the donation, a taxpayer retains more of his other savings for his own use. In addition, because the amount transferred isn't included as income on the federal return, it won't trigger deduction and/or exemption phaseouts. Finally, it may be a good strategy for people who don't itemize, because they are not losing out on a charitable deduction."
"While the RMD holiday and the ability to transfer IRA funds directly to charities end when 2009 ends, it's possible one or both of these tax breaks could be extended into 2010 or beyond," says Laffie.
About Thomson Reuters
Thomson Reuters is the world's leading source of intelligent information for businesses and professionals. We combine industry expertise with innovative technology to deliver critical information to leading decision makers in the financial, legal, tax and accounting, healthcare and science and media markets, powered by the world's most trusted news organization. With headquarters in New York and major operations in London and Eagan, Minnesota, Thomson Reuters employs more than 50,000 people and operates in over 100 countries. Thomson Reuters shares are listed on the Toronto Stock Exchange (TSX: TRI) and New York Stock Exchange ( TRI). For more information, go to www.thomsonreuters.com.
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Goldman Sachs, Buffett to help small businesses

Goldman Sachs teams with Warren Buffett on $500 million effort to help small businesses
Yahoo! Finance

• On 10:57 pm EST, Tuesday November 17, 2009

NEW YORK (AP) -- Goldman Sachs Group Inc. is teaming with billionaire investor Warren Buffett to invest $500 million to provide thousands of small business owners across America with college scholarships and boost their access to capital.
AP - FILE - In this March 27, 2009, file photo, Goldman Sachs Chief Executive Officer Lloyd Blankfein ...
The move comes as the company has been criticized for setting aside billions for employee paychecks despite the continuing weak economy.
Goldman's philanthropic effort, called "10,000 Small Businesses," includes a $200 million contribution to community colleges, universities and other institutions to give grants to small business owners to further their education.
The New York-based bank also will invest $300 million through a combination of lending and charitable support. Goldman said the money will be funneled through community development financial institutions to boost lending and technical assistance available to small businesses in underserved communities.
In addition, Goldman Sachs executives, in partnership with national and local business organizations, will aid small businesses with advice, technical assistance and professional networking opportunities.
An advisory council co-chaired by Goldman Sachs CEO Lloyd Blankfein will oversee the program. Legendary investor and Goldman's largest shareholder, Warren Buffett, and Harvard Business School Professor Michael Porter will serve as co-chairs as well. …
10,000 Small Businesses, which has been in development for nearly a year, is a five-year program modeled on the Goldman Sachs 10,000 Women initiative, which creates partnerships between academic institutions and non-profits to provide business and management education to women around the world.
Other Council members include George Boggs, president and CEO of the American Association of Community Colleges, Glenn Hubbard, dean of Columbia Business School and Marc H. Morial, president and CEO of the National Urban League, among others.
The first community college to participate will be LaGuardia Community College in New York City's Queens borough, which houses a Small Business Development Center. The first community development financial institution to receive financing from Goldman Sachs will be New York-based Seedco Financial Services Inc., with loans to underserved businesses in the New York area expected to begin early next year.

Preparing The Floodgates

Private Wealth Magazine

By Gary S. Shunk , Megan Wells

... People who find themselves overwhelmed by a sudden liquidity event express a ... mix of emotions: disbelief, elation and bewilderment—even grief, depending on their relationship with the person who left them the money. But people do not come out of this experience the same way and the outcome is not always positive. We’ve seen some clients careen off course before righting themselves and attempting a rational investment of what remains....

A Flood ... As new wealth floods in, a person’s identity and old ideas of self are suddenly tested. They are faced with numerous questions. “Will this new money change who I am?” “Will it change how I behave?” “Do I trust myself to remain true to my values or will I be tempted to pursue a lifestyle I previously disdained?” “How will my relationships change?”

No matter how stable and composed a client may seem, the new money will have a psychological impact. And the intensity of the emotional response is not entirely determined by the amount of wealth received. ... For some, new money brings exciting possibilities. For others, new money brings a downpour of disruption. ...

Trust And Fear The stress created by a big financial gain can be difficult. Change can be frightening. Certainly it can be uncomfortable. ... Sometimes money is imagined to carry the qualities of the person who bequeathed it. ... Consequently, the heirs might start furiously spending their inheritance—because they’re trying to be rid of it. ...

Curiosity And Resistance ... Studies show that people with curiosity respond to change better. On the flip side, a person resistant to change may shut down. Just waiting for wealth can trigger purposelessness. ... Their lives are “on hold” until the money comes. When it does finally arrive, the new wealth can stun their identity and derail their calling, as well as alter their character or cause it to disintegrate. ...

Gary Shunk is a consultant to families of wealth and the advisors who serve them. His primary mission is to help integrate wealth, character and calling. He is based in Chicago. His Web site is www.wealth-psychology.com.

Megan Wells is a writer and communications expert. She uses writing and storytelling for leadership, creativity and innovation. She works in Chicago. Her Web site is www.meganwells.com.

4 Overlooked Strategies to Grow Your Service Business

Small Business Trends Posted using ShareThis January 12, 2009 By Matt Rodela ... How can you stay above water when it seems all external forces are working against you? Now is not the time for business as usual. It’s time to get creative and think outside-of-the-box for ways to increase profit. It’s always a good idea to tweak the services you offer to keep them fresh and competitive. Lets go over a few techniques that I am using to diversify my computer consulting business that can easily be translated to your own service business. 1. Provide Optional Add-ons for Existing Products or Services ... Take a look at your primary product or service and brainstorm ways you can add low-cost options. For me, I’m doing this by offering the “Go Green” service, for a small fee, as an add-on to my primary computer support services. Customers who choose the “Go-Green” option will receive a personal eco-consultation from me. ... Options such as this are important to business growth. You are showing your customers that you’re willing to take the time to go above and beyond what the “big boys” are offering in personal service. Pricing will vary, but make sure the add-on services are around 10-30% of what customers will be paying for your primary services, that way they’ll be more enticed to spend the extra money. 2. Partner with Other Small Businesses Collaboration , ... if you can find a business that is not a direct competitor of yours, it may be in your best interest to team up and pool your resources and your customers. ... 3. Package Deals ... Bundling your products together is a great strategy to get others to consider certain offerings that they may not have considered otherwise. ... You should still offer all of your regular stand-alone services alongside the bundles. This way your customers can really see the value of the package versus the a la carte stuff. By combining your services together, you save time and resources, and the customer saves money. This is a win-win situation! 4. Volunteer This may not seem like the most obvious way to gain more customers, but there’s no better way to get your name out to the community in a positive light than volunteering your services for a charity or local organization. ... Four or 8 hours a week should be enough to make a lasting impression on your community. It’s also a great opportunity for you to hone your skills and practice new service strategies. Make sure you highlight some of your volunteer work on your website or in your advertising as well. When times are tough, think outside of the box for options that your customers will care about. The results will be more business, higher esteem, and increased revenue. ... * * * * * About the Author: Matt Rodela, aka Your Friendly Neighborhood Computer Guy, writes about his experiences running a part-time computer consulting business on his blog, http://www.yfncg.com.

Give Til It Hurts

Private Wealth

By Hannah Shaw Grove , Russ Alan Prince - 10/3/2008

Despite the wide appeal of philanthropy, most of the wealthy don’t capture the benefits of planned charitable gifts.

... In an effort to understand how actively the wealthy are involved in the stages of the giving process, we surveyed 446 individuals with a net worth of $5 million or more and a history of giving at least $50,000 a year to non-profit organizations.

One of the first issues that surfaced in our study was how much authority and control affluent givers want in the selection of the charities they support and, then, how the contributions are used. Almost three-quarters of survey respondents characterized themselves as wanting a high degree of both—we refer to them as high-influence givers. By contrast, the remaining quarter were less interested in participating in the process—low-influence givers (Exhibit 1).

Typically, most charitable gifts—regardless of the total wealth of the donor—can be considered “checkbook philanthropy,” meaning monetary gifts made in response to fundraising requests or one-off situations such as benefit events and auctions. While this form of giving is no less important, it often occurs without much advance thinking or planning and may not allow either the donor or the charitable organization to benefit as much as possible.

To ensure maximum effect, many wealthy individuals have begun planned giving to structure their philanthropic activities. More than half of our survey participants had already established a planned gift, but there was a greater disparity when viewed by segment. About two-thirds, or 62%, of the high-influence individuals had established a planned gift, while just 39% of low-influence givers had done so (Exhibit 2). ...

The opportunity to proactively reduce taxes was of material importance for 87% of high-influence givers, but far less significant to low-influence givers. Just 35% of that group cited tax implications as one of the major drivers in their decision to establish a planned gift (Exhibit 3).

A large portion of both segments, however, cited a broader planning effort as playing a principal role in their decision to create a planned gift. Of high-influence givers, 97% said the planned giving process was part of a broader effort that focused on financial planning, estate planning or both, as did 90% of low-influence givers (Exhibit 4). ...

... The most popular vehicle for high-influence givers was the charitable remainder trust, with 60% having established one. The second most frequently used structures were private foundations and supporting organizations, used by 34% of high-influence respondents. By contrast, almost three-quarters of low-influence givers used a simple will bequest as the way to structure their charitable gifts.

Donor-advised funds were the second most frequently used vehicle, established by 29% of the low-influence segment (Exhibit 5). ...

About half of the 247 wealthy individuals that have established planned gifts have additional planned giving needs. A much larger percentage of high-influence givers, 58 percent, expect to enhance their existing gifts or established additional gifts as compared to just 19% of the low-influence givers (Exhibit 6).

While high-influence givers cited the same gifting vehicles—private foundations, charitable remainder trusts and charitable lead trusts ... The vehicle of greatest interest to the low-influence group was a private foundation, as cited by 52% of the segment. After that, interest in other giving structures dropped off considerably with just 13% identifying the donor advised fund as a product of interest (Exhibit 7).

... The planned giving process can help all types of donors get the maximum benefit from their gifts as it provides a forum to have a dialogue with selected charities, creates opportunities to involve family members, and can ensure tax codes are interpreted and leveraged to the greatest degree possible. Still, many affluent givers continue to make contributions without any advance planning and, as a result, may be sacrificing some substantial benefits.

Hannah Shaw Grove

Ms. Grove is a respected author, columnist and speaker and a leading authority on the mindset, behavior, concerns, preferences and finances of high-net-worth individuals. She is the executive editor of Private Wealth, the first and only magazine for professionals with ultra-affluent clients, and Cultivating the Affluent, a practice management newsletter for financial professionals.

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Russ Alan Prince

Russ is an editor of Private Wealth magazine and the president of Prince & Associates, Inc., the leading market research firm specializing in private wealth. He is a highly sought consultant to the ultra-high-net-worth and elite advisors and originated the use of high-net-worth psychology in the financial services sector. He is the author of more than 40 books on private wealth and is frequently cited as an expert in the national and international press.

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