While I am not Amish, and I haven’t even ever lived in Amish or Mennonite areas of the world, I have had a chance to learn a little more about them and their philosophy on life in general. It seems that many people use the Amish as an example of what can happen if you [...]]]> 

While I am not Amish, and I haven’t even ever lived in Amish or Mennonite areas of the world, I have had a chance to learn a little more about them and their philosophy on life in general. It seems that many people use the Amish as an example of what can happen if you don’t adopt to new technology –you get left behind. You seem antiquated and old fashioned. You are “out of touch” with reality. But is this really what occurs? Do Amish people feel their lives are less valuable than the high-speed, technologically-driven ones of the modern industrialized man? It seems to me that the answer is “no”.

Technology and the modern day hustle and bustle seem to be things that are actually the easy way –the default. The latest fashions, TV shows, food fads, celebrity gossip, igadgets, and E-magic keep us constantly striving to be on the edge of the wave. And it costs a ton of money to stay current. Just waiting even a few months might save you hundreds of dollars but by then there is another cool thing. “Cool” is a constantly moving target. We can tell how out of touch you are by a hair style or song or movie. And the bigger the city, the faster this seems to change. Life is all about chasing your own tail, around and around the rat race.

But for the Amish people, they have somehow managed to turn off the noise. The blinking lights, the jingling sounds, the glaring advertisements of our day are for the most part silenced. They have managed to live in relative peace amidst an increasingly violent nation and world. They live in the midst of the wealthiest, loudest and most powerful nation in the world as quiet, agrarian, salt of the earth people. How have they done this?

It is not by accident that their lives are radically different than the average American. In fact, it takes a lot of will and strength to stand up to the pressures of the modern day world. They have chosen what they bring into their lives based on criteria of whether or not it brings their family closer, whether it upholds their religious beliefs, whether it brings peace or conflict. Most Amish groups have a council who reviews various aspects of the modern world, especially technology, and they determine its utility on these and other strict standards. Some groups are more lenient (relatively compared with other Amish people) and others are stricter with new technology (called “Old Order”), but each council thoughtfully reviews these new innovations before adopting any of them.

And for the most part, things move a lot slower. Fashions, hair styles, furnishings, hobbies, entertainment, music, manners of worship, food, language and other usually fluid cultural trends stay relatively unchanged unless it has been decided to move forward. Sometimes the only signs of the time are discretely added. For instance, some Amish groups might allow a single telephone (maybe even a cell phone) in a community area for everyone to share, but will not allow them in individual homes. Or perhaps they will have a weather radio. Maybe they will allow rides in cars, but cannot own one.

The activity or product will be weighed by its purported benefits and its possible or known detriments. For instance, if they decide they are to have a communal telephone maybe they decided that the benefit of staying connected to ill family members was worth having one phone, but that the detriments of constant interruptions, rushed activities, worries over news you cannot control or other things such as these meant it would not be good to have it in the house. Usually before making a big change, such as a communal telephone, the technology would have existed for a long while before so that they could have all the information about its detriments. They are not going to be the guinea pigs of some technological experiment. They do not ride the waves of time’s trends.

Probably the biggest piece of technology that they are known for rejecting is the car. In its stead, they have a horse and buggy. They have determined that their self-sufficiency and self-reliance is more important than the supposed freedom of flashing down a freeway for hours every day, and then turning around and doing it again. They found that cars moved much too fast and only took people farther from their families, friends and loved ones. They separated people from where they truly should be, and wanted to be. So, they do not own cars, but many aren’t afraid of cars or against taking a possible ride in a moving vehicle. It is the intent behind the technology or product, not the product itself that determines its place in the Amish world. Because of these early insights into the modern automobile, they have never had to worry about an oil crisis or shortage, costs of gasoline or whether or not the salary increase of a job would be offset by the maintenance to a car. Not to mention that the Amish-style transportation doesn’t release pollution or emissions.

Other forms of technology may be adopted if, after careful review, it is found to bring families together. I read in Animal, Vegetable, Miracle by Barbara Kingsolver that one group recently decided that electric cow-milkers would be allowed instead of only hand-milking the cows because it was determined that this piece of technology would bring more time with family members and help get the cows back to pasture more quickly with less pain (probably in the more lenient groups rather than the Old Orders). Still, this would not have been without some discussion about the size of the operation. (You can imagine the council discussing whether or not Farmer Brown should have 20 or 100 cows and how that would affect his quality of life with his family.)

The philosophy of self-reliance goes further than just their transportation and food though. They have also decided that they would never need to buy health insurance (or other forms of government help including Social Security, you can read more here and here) and that if they ever had to go to a doctor for something that they could not treat within their community (through knowledge that is passed from generation to generation), that they would pay cash (from items that they sell like hand-made furniture and farm products). If an individual family did not have enough, the community would come together to help pay the bill. In fact, they were exempted from the recent Health Care Reform rules because of these cultural and religious views.

Overall, it may seem like a radical lifestyle to most people who go through life just picking up any and every random thing that is sold (in both senses of the word). And there may be some arguments that the Amish are doing a disservice to their children if they ever want to have a job in the corporate world. But this doesn’t seem to faze them. They are not interested in the corporate world, or the political world, or the fashion and technology world. They are interested in their family, their friends, and their farms. Most of what they do is based on a way of life they believe God intended them to live. They are interested in living a life of hard work where their efforts can be seen in their hands, not just in abstract terms. While they are not interested in “public options”, they are interested in the community’s well-being.

They have not just randomly been left in the past, they have purposefully created a life with meaning –and a future. They understand what the “outside world” holds for them and they conscientiously choose to leave it behind. They have done the cost-benefit analysis and the rushed lifestyle that most people live is not worth it to them, even if they could have more worldly goods, this does not seem to matter.

While I do not think we have to live by all the rules of the Amish to find this peace, I do think there is a lot we can learn from their way of life.

Americans should be outraged over 401(k)s but for some reason, they are not. For some reason, 401(k)s (and IRAS for that matter) have become mainstream and actually promoted and accepted by most financial advisors. This includes some people who I think overall have a pretty good [...]]]>
This is just a disappearing mirage in the distance

Americans should be outraged over 401(k)s but for some reason, they are not. For some reason, 401(k)s (and IRAS for that matter) have become mainstream and actually promoted and accepted by most financial advisors. This includes some people who I think overall have a pretty good head on their shoulders when it comes to finances like Ramit Sethi, author of I Will Teach You To Be Rich. He and many others continue to promote this myth that “investing” in the stock market through your 401(k) will make you rich. This is not investing in my vocabulary. This is gambling! You have no control on the outcome and you are just hoping that the house (the system) will let you take a small chunk of the cake (profit) that they make every day.

When I first started reading about financial advice, this was the constant mantra -invest early in your 401(k) and enjoy non-taxed gains for years until you retire when you are 65 or older. Back then, they said, enjoy returns on average of 12%. Then the books said 10%. Now they say 8%. Eight percent?! And I have no control over the outcome, and I have to lock up my money for 40 years before I see the POSSIBLE benefit!? Sounds like a conspiracy or something.

Well, come to find out, if you look a little deeper, just like many things, it really is a conspiracy that was made between the government and the corporations not long ago. Once upon a time, if you worked at a corporation for many years, you would be guaranteed something called a pension. Now, this word has been all but stripped out of our language as companies jumped eagerly to the 401(k) model. The pension plans had what was called a “defined benefit” meaning that if you worked a certain amount of time you were guaranteed to be paid out a defined amount of money for the rest of your retirement. The big businesses noticed that this was costing them a lot of money, so they looked to some other way out of paying for pensions. Together the big businesses and government made a pact.

They would create these 401(k)s and IRAs that would allow people to make a “defined contribution” without any defined or guaranteed benefit in the end. Then they sold it to the unsuspecting new generation in shiny wrapping paper as a great deal. To sweeten the deal, the companies would even give “matching” funds. While you should take advantage of these matching funds and maximize your 401(k) in this way, it is besides the point. The matching funds from the employer are nothing compared to the pension you could be getting.

This benefits the corporations in many ways. 1) They don’t have to pay the retirement pension for many years 2) It is voluntary, so many of the employees won’t sign up and take advantage of the free matching anyway which saves the companies tons 3) It puts all the responsibility of retirement on the individual instead of the corporation and 4) It further entrenches us to believe that the corporations are all powerful beings. We buy their stuff at the big box stores, then we work at their stores, or if we are lucky, at their corporate offices, and then we buy their stock or bonds in the form of our 401(k)s. What a scam!

And the government is no better, because they tax you to death if you try to touch your own money above and beyond the taxes you would have paid. And if you lose all your money in the stock market gamble? So sad for you.

My recommendations would be to take advantage of the 401(k) in so much as the match is free money, but don’t play the market with it. Stay conservative with this gambled money. Utilize your saved money to play real direct investments that you control. This may be becoming a silent or active partner in a business and buying things that bring in passive, residual income. These opportunities are everywhere -big and small! And they are much better than the stock market. For instance, we recently bought a house for $50,000 and are able to make $700 rent on it. That is approximately 17% return on investment, not counting appreciation on the property -much bigger than we could ever get playing the corporate gamble.

What’s the biggest scam about 401(k)s is that even if you have a great idea for an investment, even a long-term investment, they (the corporatocracy) will not allow you to touch that money without a huge penalty. For people who have no discipline in saving and who are just starting out learning about finances, you should actively practice saving, and 401(k)s, Roth IRAs and other investment vehicles might help make it an automatic habit (just like automatically taking out our income taxes, you don’t miss it if you never see it).

But for those of us who are beyond the basics and are trying to turn the system around, those who instead of being a slave to the 8-5 grind and corporate structure want to get out of the rat race and make the system work for us, we need to WAKE UP. Don’t be fooled, 401(k)s are an outrage we should not put up with. Put your money where it makes the biggest impact to make you free, not into the system that is oppressing you.

For more on this, check out this Free Republic article.

The Great Depression Changed Rules for Many People

This book is very interesting and it gets you thinking about the difference and similarities between classes. In America, we [...]]]> I recently came across this link about the Hidden Rules of Class and it reminded me of the book for which it summarizes: Ruby Payne’s Framework for Understanding Poverty.

The Great Depression Changed Rules for Many People

This book is very interesting and it gets you thinking about the difference and similarities between classes. In America, we tend to think we are so egalitarian, but really there are some major differences between the classes. There are five categories that Payne uses to distinguish the classes: generational poverty, working class, middle class, new wealth and old wealth, but sometimes this is just pared down to the three major ones: poverty, middle class and wealthy.

I thought some of the conclusions were very interesting about the hidden rules of each class. For instance:

“In respect to personality, the poverty class values entertainment and having a sense of humor. The middle class values acquisition and stability; achievement is highly valued. The wealth class values connections—political, social and familial.”

This is fascinating when you think about it in action and how difficult it would be for a person in poverty to make an immediate jump into wealth because they would have no political, social or familial connections. Additionally, they would probably think the whole process is utterly boring (think about watching CSPAN all day…most of those people are the wealthy and therefore powerful). The middle class would fare somewhat better at moving into wealth but because they are busy being the worker bees and competing with the Joneses, they don’t have those connections either.

Basically, it is saying that in the poverty class, survival, close relationships and living in the present are the most important things, in middle class, life is about working, acquiring possesions and achieving (possessions signifying achievement), and in wealth it is about your connections and what those connections can do for you.

It also says when you move from poverty to wealth you go through these stages: 1) what I (my body) can do (the worker), 2) what I can get others to do  (the supervisor) 3) what I know (the manager) 4) who I know (the leader).

I’ve heard that oftentimes people confuse management with leadership. Basically, the manager should be able to do the level 2 and 3 functions above and some about what it actually entails to do the work (level 1), but a leader is really the person who sets or changes the direction and keeps the partners happy and connections alive (a lot of deals on the golf course and smoozing).

Some of our classic stories are Cinderella tales or “rags-to-riches” fables. Even our more recent movies or books will take someone from the poverty class and instantly make them rich and see how they handle themselves. Pretty Woman, Trading Places, Brewster’s Millions and Pursuit of Happyness are all examples of movies that do this. However, it is very uncommon for someone to skyrocket into to wealth without knowing these hidden rules of the class. In fact, even in most of these movies, the characters still had to learn these hidden rules (remember Julia Roberts with the snail!).

In life, probably the biggest example of  where poverty and wealth collide is when someone wins the lottery. Many studies and stories have been done about what happens after someone wins the lottery. What nearly all of them find is that no matter the amount, if a person hasn’t learned the skills of managing the money the way a wealthy person does, they will be back to the same lifestyle that they had before they had the money, most times in just a few years. What this shows is that it is not the money, but the perception and view of money that changes a person from a poverty mentality to a wealth mentality.

One filmmaker for a movie called “Reversal of Fortune” even decided to do an experiment with a homeless man giving him $100,000 without any real rules. It is an interesting study of one man’s experience with wealth from a poverty perspective and was featured on Oprah. While it is controversial, it was quite interesting. For a more comprehensive review of this, visit this blog.

While I find these studies fascinating, I do have a few criticisms of Payne’s and the others’ work. It is definitely important to understand these hidden rules and make them so they are not quite so hidden, but it is also important to understand why they exist and that there may be a very good reason for it. In Payne’s more recent work, she has taken to the additive model of finding strengths in each of the modes of thinking and talks about being able to float between each of the classes as the greater thing we should strive for rather than just tossing out all that we can learn from poverty and middle class.

For instance, if the poverty class is mainly concerned with survival, it makes sense that strong, personal relationships would be important. That is a positive attribute. Living in survival also means living in the present. While this can turn into the “tyrrany of the moment” it is something that people in the middle class “future” mindset find very difficult to achieve (the Zen power of now idea).

Another critisism I have is that the book does little to try to tackle social injustice or the causes of the poverty and status quo itself. For instance, if we consider Wal-Mart’s business model, the very wealthy Walton family has basically made it extremely difficult for a mom and pop middle-class shop to stay in business. So what does that do? It forces the family to close down shop and work for low paying wages maybe at Wal-Mart itself. This then places them into the poverty class. Not exactly the way you would want to learn the poverty hidden rules, but often a reality. In the US and other developed nations, we have much less poverty than other developing nations because we have put a value on education, standards on housing, and health. Without these standards, poverty would be even more painful and difficult to move out of. In some ways, because of these positive standards, people living in poverty in the US would be considered middle class in other, poorer nations.

So, we need to realize and work to make sure our policies and social values reflect a desire to move people out of poverty into middle class and wealth and not the other way around while at the same time learning from the skill set that life in poverty brings to the table.

Overall, there is a lot to learn about these things and there is not one answer to help address it. Whenever we are talking class, you must be careful not to oversimplify or blame people for the state that they are in, as this only makes things worse. It is probable that most people reading this site are from middle class looking to move to wealth, and that is probably where you should focus your efforts, but it’s important to understand each class and work to make the world a better place for everyone. In that way, we all benefit.

Lately, the buzzword has been “green” with nearly every corporation, government and now, of course, individuals jumping on board. Looking at it on the surface, this is a good thing. Who can argue that we shouldn’t take better care of our planet? I can’t even argue that. The problem with this “green movement” is that [...]]]>

Lately, the buzzword has been “green” with nearly every corporation, government and now, of course, individuals jumping on board. Looking at it on the surface, this is a good thing. Who can argue that we shouldn’t take better care of our planet? I can’t even argue that. The problem with this “green movement” is that there may be a good intention behind it (and there may not), but it’s that the corporations are doing what they do best: sell. They are selling this idea and then they are selling all of their junk. The best way to be “green” is to save your green (dollars) by not BUYING the stuff in the first place!

I was recently listening to a program on NPR that talked about the Energy Star brand appliances. It was saying that the Energy Star has to use a certain percentage less energy than the equivalent full-energy model, but the hidden fact of the program was that some of the non-Energy Star models used less energy than the Energy Star, but because it wasn’t a new-fangeled thing-a-ma-gig it didn’t get the star. It is difficult to always know what the energy usage of appliances are, but many are listed online. To better understand this concept, think about cars and gas mileage.

Imagine you were thinking of buying a hybrid SUV that gets 17 miles to the gallon instead of 10 miles to the gallon that other SUVs get in order to save energy. Your current old sedan works fine and is already getting 25 MPG. By not buying a NEW vehicle you would actually help more environmentally than buying the hybrid (by not creating so much manufacturing waste and by-product) AND the older car actually had better gas mileage in the first place.

Other examples of greenwashing are most commonly seen by the chemical companies (Check out DOW chemical’s Green Recruiting and Human Element brand campaign) and the oil companies (most notably BP with its bright green logo).

Usually, the best way to be green is to just not buy so much stuff! You don’t have to worry about Energy Star if you don’t plug in very many things. You don’t have to worry so much about MPG if you don’t drive very much (walking and biking are the cheapest and healthiest forms of transportation).  You don’t have to worry about recycling if you didn’t buy the thing in the first place. The best cleaning supplies are not from the new green products (many of which were bought out by Clorox and Proctor and Gamble), but are the simple things like vinegar, baking soda, hydrogen peroxide and lemon juice. (For kicks you should check out the list of ingredients in odor removing products- besides a whole list of awful chemicals, the number one product is sodium bicarbonate -yes, baking soda! It works great and costs about 50 cents) No huge company is going to back these statements because there is no money to be made by saying this, but there is a LOT of money to be saved by YOU!

A great primer on all this STUFF is called The Story of Stuff.

I read an interesting book called No Impact Man by Colin Beavan in which the author attempts to live without creating any waste. It’s a remarkable test, because it is virtually impossible in our modern, industrial world. What I found most fascinating and what shouldn’t surprise us is that the Keep America Beautiful campaign is just another greenwashing technique funded and supported by the manufacturing (mainly beverage) companies. This program that seems so great (recycle! plant trees! pick up trash!) puts the guilt of creating so much trash on the individual rather than the companies who make it. Wonderful isn’t it?

We should demand that companies make reuseable containers, not just recyclable. We should demand that they return money to us for bringing things back. I can barely remember cloth (reusable!) diapers, glass (reusable) milk cartons, metal (reusable!) utensils, and ceramic (reusable!) coffee mugs. How did we become such a throw-away society? And how did we fall for the notion that if we just buy MORE, we are becoming green? Because it’s easy to sell a good feeling that everyone is BUYING (get it?) instead of looking more deeply at the issue.

In fact, as another example of this, no major TV networks would allow this simple commercial (below) to be aired because it actually asks people to NOT spend money for once. But go out and buy a hybrid, sure. Go out and buy some “Human Element” chemicals, no problem. Pick up some organic grapes that flew half-way around the world, consuming far more oil than the local grapes, absolutely.  (I hope you caught my sarcasm here.)

We have to watch that we are being marketed to in every situation. Actually in situations where we feel good about buying something you have to watch even more carefully because our defenses are down. I know that I fall for these things sometimes. Then I have to wake up and ask myself a few key questions:

If money is leaving your hands, think about who stands to benefit and whether you are ok with that. Then think about whether that purchase put you one step closer to freedom and self-sufficiency or one step back and more dependent on the system. Will that purchase bring you money in, or suck more out? These types of critical assessments will help you to know if you are going green or just getting greenwashed.