Monthly Archives: January 2014

Dealing With Shopping Addiction

shoppingControlling your personal finances is easy: You simply have to spend less than what you earn and you can live debt free.

Unfortunately, it’s not always that simple.

  1. Many times we don’t have control of our revenues: we are stuck with low paying jobs, we get laid off, we could be working irregular hours, etc.
  2. Many times we cannot control our expenses either. Many expenses are unpredictable such as emergency house or car repairs, medical bills, etc.

As difficult as it may be to control revenue and expenses, for most people who have a regular job, revenue and expenses become fairly predictable. Unfortunately a great deal of North Americans have a hard time making this equation work.  They have a chronic habit of spending more than they earn and thus they get into financial difficulty.

We are constantly bombarded, every day of our lives,  with advertisements and promotions. Images, text, and audio reinforce a buying behavior and give us the sensation that in order to feel good about ourselves, we have to buy the latest gadget, the latest fashion, a new car, a bigger house. Our emotions are being played like a violin by professional marketers that have learned to manipulate our buying behavior. Buying to our limit has become part of our consumerist society.

All of us (me included) have become victims of the professional marketer. We buy things that we don’t need, or want, in order to feel better. Going a bit further, many people  shop in order to numb deeper emotional issues.

Many people shop because they want to give a gift to themselves for the many hours spent working. Many shop because they are bored, and many shop because they are depressed and use shopping as one more stimulant to fight depression. Shopping can easily become as addictive as using drugs, gambling, or overeating. The few people who are fortunate enough to have the economic means can easily live their life without confronting their problem, but most people don’t have the economic means and one day they get a rude awakening when all their credit cards have reached their limits.

The major reasons for addictive shopping are depression, loneliness, anger,  a sense of entitlement after working long hours, or maybe addicted shoppers are searching for social validation through purchasing. I want to buy a Mac because I wanna be cool; I want to get a Gucci bag because I wanna be perceived as having good taste; I want to get a Mercedes (me) because I wanna be perceived as successful.

Yes, shopping may save you from boredom and depression from time to time, and yes, when you accomplish something, it is nice to reward yourself with a little gift but when it gets out of control it will leave you with an empty feeling and in a despairing financial situation.

How to control a shopping addiction and how to reduce debt

  1. Being a shopaholic is a symptom of deeper emotional issues. The best thing to do is to address the root of the problem by seeking therapy, reading self help books or searching community support (try Debtors Anonymous).
  2. Replace your shopping habit with some kind of constructive activity; exercises, yoga, a book club, dance classes, etc.
  3. Every store will try to give you a free credit card. Just say “NO!”
  4. If you have more than one credit card, destroy all of them except one.
  5. For the one credit card that you keep, reduce the spending limit to the minimum. You can always raise it back if you need it.
  6. Don’t go to the shopping mall unless you actually need something. Shopping malls are not places to fight boredom.
  7. Make a shopping list and stick to it.

Here are some comment by friends who helped me with the research:

“OK I admit when I am sad for example (not depressed),  just regular sad or upset,  shopping can cheer me up,  and yes sometimes I buy something and then regret I spent so much money” –Anonymous

“I have been a big spender for years and now I am changing my ways. It’s like a disease for me. I used to go shopping to avoid  loneliness and maybe depression (I am not sure). But for me it was because society standards were affecting me. In my twenties, I faced a lot of failure (jobs). I was paying my bills and not having too much left after that.

I started to read a new book, yesterday (Frugal Isn’t Cheap) and for spenders like me the author says : ” Financial exaggeration is usually just a thin disguise for insecurity, emptiness and self-doubt. ” That’s exactly how I felt.” –Anonymous.

Resources:

Book Review: The go-Giver by Bob Burg

The-Go-GiverHow many of you have heard the phrase “He/she is a go-getter”. In this book, the paradigm is shifted to from Go-getter to Go-Giver, someone who is constantly providing value to others.

The book is a fictitious story about this salesman called Joe who has one week to meet his sales quota for the quarter. In his desperation he dares to call “The Chairman,” a high-ranking business leader, to get referrals or leverage. What he got instead were the Five Laws of Stratospheric Success.

Joe and the Chairman met for lunch for 5 consecutive days and each day Joe was introduced to different a person who represented each one of the laws. Each day Joe learned a secret which he had to put in practice the same day. Here are the laws.

  1. The Law of Value: Your true worth is determined by how more you give in value than you take. Assume that you are a singer and you sell your song for $1, for that $1 you provide, minutes, hour or decades of pleasure.

  2. The Law of Compensation: Your income is determined by how many people you serve and how well you serve them. Your job as an entrepreneur is to find ways to help as many people as possible.

  3. The Law of Influence: Your influence is determined by how abundantly you place people’s interests first. I have heard the phrase 50-50 or win-win so many times. If you focus on giving 100% and not keeping scores, then eventually lots of great things will arrive at your doorstep.

  4. The Law of Authenticity: The most valuable gift you have to offer is yourself. There are many companies, like Zappos, which don’t give scripts to their customer service team. Team members are free to be themselves and Zappos has one of the highest customer satisfaction records in corporate America.

  5. The Law of Receptivity: The key to effective giving is to stay open to receiving.  When life gives you opportunities, open your arms to it and accept it with gratitude.

The book implies that if businesses focus on helping their clients instead of trying to get the most out the clients, they will be more successful and their clients will be happier. It was an enjoyable parable. Perhaps something that was lacking was real life example where the principles could be applied.

Overall I enjoyed and recommend the book. Please let me know if you read it and let me know your opinion of it.

 

How to Increase your Weath by Reducing your Expenses

Saving MoneyIf you diet, you know that a box of doughnuts is not good for you. Just as well, if you are trying to cut your expenses, there are many things that know you should cut out of your life.

Be ruthless! Here is a list of suggestions:

  1. Buy your clothes at a discount outlet such as Walmart, online stores like Amazon or a second hand store. Help the environment and the nonprofit organizations. I shop at Le Chainon, a second hand store close to my apartment.

  2. Consider using public transportation. I use a bicycle. If you need a car, consider one of the many car sharing alternative. In Montreal we have a great service called Communauto. If you live in a major city, I am sure there is a similar service near you.

  3. Get rid of your cable package or better yet, throw away your tv. Canadians watch about 30 hours of tv per week. In the U.S. they watch about 34 hours of tv per week. This is crazy. People complaint about not having enough time. The tv is constantly putting crap in you head.

  4. Have a big garage sale or donate all the stuff that’s taking up space in your house. Use the 12 months rule. Have I used this in the past 12 months? Will I use it in the next 12 months? No? then it is junk.

  5. Cancel subscriptions to newspapers, magazines, etc… Everything except the  gym. But then go to the gym. Some physical activity is good.

  6. When eating out, don’t order soft drinks (they are poison for your body) and don’t order dessert, most of us eat it out of gluttony.

  7. Christmas, Thanksgiving and all those holidays have become too commercial. Agree with members of your family to stop buying crap for each other. It’s all about the love and company, not about buying each other more plastic from China.

  8. Drink coffee or tea at home instead of buying it at the local coffee shop, unless your are using the coffee shop to have meetings.

  9. Bring your lunch to work instead of buying at the local restaurant.

  10. Get energy efficient appliances and a programmable thermostat that will shut off when you are not home and will come on one hour before you come back home.

  11. Get rid of your land line phone. You can get a free phone number with your computer. In Canada you can use Free phone line, I am sure there are many alternatives in the U.S..  Does anyone still uses a home line?

  12. Never, never, never pay interest on your credit card. Always pay it on time. Credit cards charge about 25% on outstanding balance, that is crazy and only idiots pay that.

  13. Don’t get a Mac, get a PC. Do your Facebook page and YouTube videos really look better? Be real! Don’t pay for a brand just to look cool. Be smarter than that.

  14. When traveling, don’t use hotels, use Airbnb. You pay half of the money for a lot more and you get to experience a new city as a local and not as a tourist. I host tourist in my Airbnb place.

  15.  Only buy groceries that are on sale; It’s a massive money saver. I was able to save $600 a month just by tracking my grocery and fun food expenditure.
  16.  Start a small business, any small business and start writing off rent, utilities, office supplies, etc. I always get a GST rebate check from the government every year.

Tip #15 and #16 are by Bob Garlick , the person who runs the website Business Book Talk.  Thank you Bob for your tips.

 

 

Book Review: Good to Great by Jim Collins

Good to Great: Why Some Companies Make the Leap…And Others Don’t

Good to GreatOriginally published in 2001 this book sold over 4 million copies to business and non-business readers. In the Amazon store there are about 1300 book reviews and most of them are positive so I was expecting to be wowed or at the very least to be entertained. I was neither.

Mr. Collins used a large team of researchers to find out how some companies make the transition from good companies to great companies.  Mr. Collins found a group of 11 companies that fit his criteria of “great” and then he compared them to another group of 11 companies which met his criteria of “good.”  In his study he came away with 7 characteristics that explain how the companies went from good to great.

My take was that the 11 companies which had outstanding performances were blessed with spectacular management who excelled during a period long enough to create a great performance.

However, this book does not show how to become a great leader, how a board of directors can find a great leader or, from an investor’s point of view, how to find those companies which will outperform the market because of the leadership. For example, he says that all great companies have Level 5 leaders with profound humility, well, how do I become a Level 5 leader?

According to Dr. Steven Levitt (the guy from the book and podcast Freakonomics), if a person would have invested in a portfolio composed of these 11 companies at the time that the book was published (2001), that person would have underperformed the market (2009).

If Mr. Collins research would have revealed that all of the leaders of the great companies had big noses or measured over 6 feet, would he have included these as other characteristics that makes a company from good to great.

Overall, I found that the book had many common sense concepts similar to this one: having a healthy diet is good for your health. Just the same, companies who are focused on result, have great management and team support, and do the hard work tend to do better than companies who do the opposite.

Considering the 4 millions copies sold and all the amazing reviews in Amazon, I feel as if I missed something. Either way, I can not bring myself to recommend this book. I just don’t get why it is such a great book.

If you have read it and have a different opinion, please write me a message and let me know why.

 

2013 Year Review and Goals for 2014


Happy New Year everyone. I like to do a quick inventory of the year 2013 and write down some of my aspirations for 2014

mexico2013 started with a wonderful trip to Ciudad de México and then a few days in Acapulco. What a beautiful journey to discover the ancient city of the Aztecs followed by a taste of paradise in Acapulco.

After coming back to Montreal, I decided to diversify my physical activities. In addition to dancing I started doing yoga and I had a few sessions of kickboxing.

I participated in a competition called the Spartan Race where the participants do a five kilometer obstacle course competition through mud, barbed wire, fire, etc. It was a lot of fun, but what made it more fun still was the visit of my daughter Andrea who outran me but then waited for me at the finish line to cross it together.

yogaAs for dancing, Cheryl (my dance partner) and I did a few tango demos but the highlight was our performance at the Festival International de Tango a Montreal. Here is the video.

One disappointing event was a failed attempt to go to Paris. I bought an airplane ticket and I rented an apartment for one week in Paris. I went to the airport and customs did not allow me to get on the plane because I didn’t have a visa. That was totally my mistake. I didn’t know that I needed a visa. Oh well, that was about $2k down the drain.

spartan raceThe most significant moment of the year was closing our school Dance Conmigo. After 8 years of love and devotion for dance I finally gave up. I found it hard to stay on top of the administration and the marketing of the school. I still dance every week and I teach a few private classes, but I don’t do any more promotion.

What are the projects for 2014?

Toastmasters clubRecently I joined Toastmasters club. It’s a club in which we learn how to do public speaking. In spite of my deep Spanish accent, I hope to be a public speaker by the end of 2014.

I started a podcast. I believe that the quality is horrible, but I didn’t want to wait to get good before starting so there it is, a podcast done by someone who doesn’t know how to talk into a microphone.

The other grand event was that I started a YouTube channel. I hope that people will tolerate me. I will be speaking about entrepreneurship and self improvement.

One of my goals is to become a more disciplined writer. Do the work! Create art. The bare minimum will be one blog per week but I hope to do two per week.

Happy new year every one. I wish you the best.