Profile of Success: Dave Ramsey

Dave Ramsey. This is a famous radio host from the United States who I listen to regularly. He only talks about financial planning and money management – but he can be just a polarizing and crazy as the other “shock-jock” radio personalities. He has been doing 2-3 hour radio shows since 1992, so it is almost 20,000 hours of evangelism on smart money matters. He is making an impact on people in the US, it is worth your time.

Like a smart uncle. If you are okay with listening to a straight-talking, Southern, not politically correct, but visionary financial coach, listen or watch Dave Ramsey’s podcast here. He has written several books, but I recommend his podcasts.

They are entertaining, informative, and a bit shocking. He is unafraid to describe your spending habits as crazy, your relationships as broken, or your investment strategies as stupid. It is not insulting, it’s just straight talk. He is loving and confrontational – like a smart uncle might be.

1) Common sense.  He is the first to admit that his financial advice is basic. Afterall, the secret to money is to work hard, save, invest, and give. Simple. As one of his slogans say, “it’s the same advice your grandmother gives, but we keep our teeth in.”

  • Work hard – Put in the extra work; 2nd and 3rd jobs are good.
  • Earn more money – Ramsey tells people all the time that they have a “revenue problem”, not an expense problem
  • Save  – Pay yourself first.  He calls this “acting your wage”
  • Invest – Put your money to work; Same argument I made here that getting retired has more to do with the balance sheet (assets) than the income statement.
  • Give – Ramsey argues that giving is a critical part of money management – to be thankful for your blessings; ultimately, money is a tool, not a goal.

2) Anti-debt. He is a vocal opponent to credit cards and any debt (besides a mortgage). He calls credit card companies evil and tells people to “cut up their credit cards.”  He says that everyone should use debit cards or cash. He feels the same way with student loans. Everything should be in cash (with the small exception of a house mortgage); he calls car leases, car fleeces – because you are getting cheated out of money.

Consultantsmind - Dave Ramsey Credit Card
3) Anti-whole life insurance. This may be very US-centric, so for those not familiar with life insurance products, Ramsey likes #1 (basic, cheaper term-life insurance)

  1. Term life insurance – fixed term (e.g., 20 years) with a face value (e.g., $1million) which is paid out if you die within those 20 years. If you die in year 21, you get nothing. It is only insurance and is a cheaper alternative.
  2. Cash-value or whole-life or variable annuities – these are financial products which have other diverse features – growth or guaranteed return – which mix insurance with investments. Ramsey really does not like these.

Ramsey advocates for term-life only because it is cheap and does it’s job – covers you against unexpected death during your earning years. He argues that by the time the “term” is over – you should be financially independent if you have done your job right. He argues that “Cash value life insurance is one of the worst financial products available.” here. Understandably, this is pretty controversial point since there are 400K insurance sales people in the US.

4) Live like no one else, so later, you can live like no one else. Dave is really big into sacrificing now for the future. He tells people to get 2nd and 3rd jobs. He is proud of people who are willing to save 50-60% of their income to get out of debt. He praises people who live on “beans and rice” to get by. If you are in debt – you should be willing to drive a car you are actually embarrassed to drive.  There is no shame in making sacrifices to get out of debt.

5) Accountability – Grow Up. Ramsey rightly believes that we – as basic humans – act stupidly with money all the time. He calls this the “stupid tax” and tells the story of how he did lots of stupid money things earlier in his life. In many ways, he is a libertarian.

Budgeting. He is a big believer in planning with a budget so that every dollar has a job. Also, he advocates using CASH to really get a corporeal feel for the money leaving your hand. It is an envelope system where you put all the money you are going to spend into envelopes and stick to that budget.

Communicating with your spouse. Too often marital problems start with money issues – which starts with miscommunication. He is straightforward – and expects spouses to talk frankly about their money and get on the same page. Often you can hear him say things like:

  • Dude, your wife wants you to be a man, not a little boy when it comes to money.
  • You need to grow up and really talk to your husband about this
  • You need to go to marriage counseling; it’s more than a money problem
  • You need boundaries in your life; I recommend you read  Boundaries by Dr. Cloud

6) Debt free scream. This is one of his signature segments. People drive to his offices in Nashville, TN or call in, and tell their story. Dave asks them some routine questions:

  • What made them decide to be debt free?
  • What sacrifices did they make? Did people think they were crazy?
  • What was the last debt that was paid off?
  • How do they feel now they are debt free?
  • How much did they pay off?  How long did it take? Making what kind of money?

It is very raw and personal questions – but that is the point. You need to really OWN your situation. People who get MAD about their debt are the people who get things done. People who are willing to sell their cars, deliver pizza as a 2nd job, tell their children “no” to unnecessary expenses, are the ones who win. He says, “you have to live like no one else (poorly) to later live like no one else (debt free).

Consultantsmind - Dave Ramsey Debt Free Scream

7) Straight talk. Honestly, he is a joy to listen to. He combines humor and humility, with real principles. He is an evangelical Christian – so he will quote the bible – but the core concepts of stewardship, family, and community transcend any specific religion. You won’t agree with everything he says -but he is self-aware – and does not expect you to. Make your own decisions. Get smart and think for yourself.

Consultantsmind savings rate8) Americans need to save more. Fundamentally, Dave Ramsey’s disdain for debt makes sense. Look at the graphic to the right from the Economist in 2013, which shows the drop in American savings rate from poor (10-12% savings) to sloppy (2-5%) in recent years.

Americans are stupidly in debt. For people who only save 0-5% of their income, obviously any credit card charging you 15-22% annual is a death sentence. For good reason, Ramsey recommends 3-6 months of income in an emergency fund.

9) Financial Peace University (FPU). This is a course where you attend a series of 9 classes – most often taken at churches and community centers – watch videos of Dave Ramsey’s coaching and go through a financial planning workbook. While I have not been, I know it is about $100-$150 (cheap), and a lot of the power is in the group accountability you have with the other attendees.  It clearly works as he has people calling into the radio show daily who attest to benefits. In fact, “the average family pays of $5,300 in debt and saves $2,700 in the first 90 days [of FPU].”

10) Huge brand. Dave Ramsey has a lot more than just radio show and books. He has expanded his brand to endorsing local providers (ELP) who “have the heart of teachers” and abide by Ramsey’s concepts of conservative financial planning. Ramsey has extended his influence and voice to entrepreneurship, leadership, and estate planning. Even his company has taken an inter-generational scope – his kids are involved in the business. They continue to grow and hire more people here.

Note: I am a huge fan of Dave Ramsey – for his principles, honest straight-talk, communication effectiveness, his ministry, and his humor.  That said, I do believe that people who are mature enough to use debt (leverage) wisely, should do so. Basically, pay off my credit cards monthly, never carry a balance. Get rental properties where you put down 25%, borrow 75% from the bank at less than 4%.  Rent properties with a ROE of more than 15%. Leverage is critical for smart people to get ahead.

For Dave Ramsey fans, I know this is antithetical to what Dave stands for. I know this sounds like I am being a hypocrite. Listen to 10-20 Dave Ramsey podcasts and make up your own mind. Most Americans are irresponsible with their finances and cannot handle debt. That said, wealth accumulation comes from massive savings, investing. Leverage helps as long as it is not speculation.

Happy to hear your opinions on the topic.

Related posts:

Review: The 2016 Deloitte Millennial Survey

Deloitte surveyed of 7,700 millennials globally here. The respondents were folks born after 1982 with college degrees, working in large organizations (100+) across 29 different countries. You work with millennials everyday – anyone under 33 years.

As I have lots of opinions (nice thing about having a blog), see my comments in green.

“Remarkable absence of loyalty” This is how Deloitte phrased the fact that in the survey 66% of people said they would likely leave their employer in the next 5 years. Basically, 1 in 4 millennial will likely leave their job each year. This is a challenge for US employers since millennials are the largest demographic segment of the workforce.

This does not surprise me – this is exactly the advice I give younger undergraduates and MBAs. Seek out skills, capabilities, relationships, and networks. Companies are amorphous brands, organizations, products, and distribution channels stitched together by ERP systems and history. Find good hard work and make yourself more valuable. 

I believe firmly in loyalty to people (boss, customers, peers, yourself) and your work. Everything else is a secondary. Perhaps this is my bias as a consultant – but you have to seek out projects which will make you more valuable. To me, not controversial. 

“Leadership skills not being fully developed” Apparently, one of the greatest points of dissatisfaction is the lack of leadership opportunities. This groups sees leadership as the skill or attribute that the market prizes (and pays) the most for, and they are not getting adequate opportunities to flex those muscles.

This I disagree with. Perhaps this is my Generation X nature, but my questions is how much “leadership” can you really show with such limited experience?  I have seen newbies “experiment” on their teams, customers, and peers with misguided leadership. It’s painful to watch and disrespectful. Your leadership at the cost of other people is not acceptable. Your NET GAIN cannot be with a NET LOSS of other people.

Leadership is taking calculated risks – and honestly – is a privilege, not an assignment or specific role. Should you be given management opportunities? (of course), Should you be given undeserved leadership opportunities (it depends, probably not).

“Business has a positive impact on society” It was encouraging to read that 73% of respondents have a positive view on the role of business, in spite of all the market turmoil, occasional scandals, and fodder found in newspapers.

Bravo. Too many publicly-traded companies and managers (not leaders) are myopic and quickly sacrifice the environment, their people, and their customers for short-term gain. To me, the goal and beauty of capitalism done right is long-term greed. 

“Put employees first” This is a dramatic departure from the shareholder view that I was (mis)taught in business school just 10 years ago, and perhaps shows a more global view than what you would hear from a typical free market-minded American.

I largely agree with this too. In a world where customer service is a core element of any product (e.g., automobile, healthcare etc), customers satisfaction will NEVER be higher than employee satisfaction. If your call center reps, schedulers, receptionists, analysts, and technicians are not happy then. . . your customers will feel that angst.

Consultantsmind - Millennial Survey

“Values guide where Millennials work, what assignments they will accept” This is a fascinating finding that millennials believe their values are shared by the organization they work for. Furthermore, 56% of them have identified companies they would never work because of value / moral reasons. Almost half (49%) have refused a task at work because moral or ethical reasons.

I have some cynicism with this one.

First of all, if they are so aligned with their current company, why are they going to leave?  Second, I grew up in a conservative-minded household, and also worked overseas for 7 years so this is quite foreign to me. I cannot imagine what my Fortune 500 boss would ask me to do that would get to “refuse” to do it because of my ethics. 

Rebuttal From Tomm in the comments below.  Very good, reasonable example which argues the contrary. See a portion of Tomm’s comment in red below:

My friend refused run an optimization project for a tobacco company, simply because he’s against everything this industry stands for, for me it’s fully understandable.  

I think that being loyal to your company for the sake of loyalty = being lazy. Everything changes, when I look at my employer I see new branding, new strategy, new people around and it’s all within last 2 years. It’s not the same company, what’s more these days I have different priorities. I get a lot of resumes of people who jump from one employer to another every 2 years or even less, are they of low ethics? I don’t think so.

Finally, I understand this is a global survey. Yes, there are many countries where business practices are still rough; places where it is kind of Mad-Men – not friendly to women, minorities, or outsiders. Yes, I can imagine why some people would respond this way. My only pause is that this too often can be an excuse for not doing the work.

Consultantsmind - Millennial Survey 2“Not employer focused” From this 2×2 graphic below, it’s clear that millennials are focused on their own situation – income, quality of work, morality/ethics, skills and career path. Do the things in the grey-shaded box represent this mindset?

Not surprising. I would argue that has always been the case. Capitalism = long-term greediness. No one WANTS to a company cog, or die a company loyalist for no clear reason, other than it is who pays them to show up. 

What I think has changed is the patience level, grit, and willingness to endure. Millennials – as symbols of their time – simply understand that there are multiple career options, a talent shortage, ability to harness disruptive technology, and opportunity cost.

Consultantsmind - Millennial Survey 3

“Work/life balance comes before career progression” Millennials want to enjoy both their work and their life. . which is shown by the #1, #3, #4, #6, #7 responses below.

As I have become mid-career  I can empathize with this orientation. Work and life are two sides of the same thing. Also, as a consultant I am just as likely to work on a Saturday night, as I am to go to the dentist during a weekday when I am not traveling. It is a much more integrated view of life . . . and perhaps healthier.

I agree with a lot of this.  What is different, and perhaps a sign of the abrupt maturity of the millennials, is that I certainly did not think this way coming out of school.

Are they simply ahead of their (expected) age in terms of maturity?

Consultantsmind - Millennial Survey 5

I am a Gen-X and often complain about millennials. Too often, I described them as selfish, spoiled, or just self-involved. From this survey, I realize that they are confident in what they want in life and not willing to wait until they are 50-60 years old to craft the work/life they want. Yes, they are selfish. Yes, they are self-involved.

Yes, they are a lot more like everyone else. Believe that my generation of Gen X managers are just frustrated because they are often-times not good listeners and sometimes impatient. Call it fierce individualism, call it non-committal. It’s as if they would like to just SWIPE RIGHT, or UNLIKE things they don’t want to do.

This can be a fiery topic. Let me know what you think.

Related posts:

Whether you are a lion or a gazelle: when the sun comes up, you’d better be running

This is a quote first attributed to Dan Montano in the Economist, but was popularized by Thomas Friedman in The World is Flat.  Here is the full quotation here:

Every morning in Africa, a gazelle wakes up. It knows it must run faster than the fastest lion or it will be killed.

Every morning a lion wakes up. It knows it must outrun the slowest gazelle or it will starve to death.

It doesn’t matter whether you are a lion or a gazelle: when the sun comes up, you’d better be running.

For libertarian-types like me, this quote pretty much sums up how we see the free markets. It’s a wild, open, competitive, and oddly democratic way to get the best out of people. Money is certainly not everything, but the market has a queer way of rewarding those – in the long run – who are good at what they do. Whether you are a lion or a gazelle, you had better be running.

Consultantsmind - Lion or Gazelle

The average S&P 500 company only lives 18 years. While humans live longer, companies don’t live as long as they used to. In 1935, the average company lived 90 years. Harvard Business Review calls this corporate endurance here. McKinsey argues here that you really have a choice of innovating or dying here.

90% of profits only go to the top 20% of companies. This is something Dominic Barton – global head of McKinsey – said recently in the press here. I am looking up the data on that, but he is no fool, so I am taking it as gospel. In short, winner takes all.

This echos the strategy that Jack Welch pursued in the 1980s and 1990s when he stated that General Electric would get out of any industry where it could not be #1 or #2. It is also consistent with the main thesis of my favorite industry strategy book called The Rule of Three – by Professor Jag Sheth which argues that all industries go towards oligopoly; as companies grow and merge to get scale, industries continue to consolidate until there are 3 major competitors, and a long list of niche or smaller players.

It doesn’t matter whether you are a lion or a gazelle: when the sun comes up, you’d better be running.

2015 was a record year for mergers and acquisitions. Not sure if your noticed, but last year was a monster year for investment bankers. There were $4.7 trillion of M&A deals, up 42% from 2014. The Atlantic magazine notes here that companies had a lot of cash, they are getting more confident after the recession, and they are looking to get economies of scale to squeeze out costs. Here are some of the 137 mega-deals (deals over $5 billion) from last year which accounted for more than 1/2 of the total deal value:

  • AB Inbev +  SABMiller ($120 billion)
  • Pfizer + Allergan  ($191 billion)
  • DuPont + Dow Chemical ($68 billion)
  • Charter + Time Warner ($78 billion)
  • Dell + EMC ($66 billion)
  • HJ Heinz + Kraft ($55 billion)
  • Anthem + Cigna ($48 billion)

VUCA. This is an acronym from the US military that stands for Volatile, Uncertain, Complex and Ambiguous. Situations are fluid. Multiple – unrelated things – can go wrong. Strategic flexibility is critical to having a good set of options. Even McKinsey says that 40% of the services they deliver to clients within 3 years time will be completely different from what they do now. Innovation, speed, and flexibility is the mantra of high-performing companies today.

  • What are you and your company doing to disrupt yourself?  
  • What are you doing to run faster? 

Related posts: 

McKinsey gets phase 2 on NY jail project for $7M

McKinsey & Company is a premiere management consulting firm with a long legacy of influential alumni, thought-provoking research, top-shelf billing rates, and legions of ivy-league smarties.They get called in to solve difficult problems – everything from corporate mergers to changing the organizational design at the CIA here. So, it is only with a bit of humor and amusement that I read this headline here:

Consultant Gets $7 Million More to Plan Reform at Rikers Jails

Apparently, McKinsey was hired in 2014 to put together a roadmap to help reform the NY prison system for $1.74M.  Apparently, they did a good enough job to win a phase 2 of work worth $7M. The goals of the project will be to:

  • Focus on measures to reduce violence
  • Follow up from the phase 1 interview of 9,000 uniformed correctional officers
  • Reduce the use of solitary confinement, and replace with an alternate method

Consultantsmind - McKinsey Prison

Although the executive sponsor (Mayor Bill di Blasio) liked the McKinsey work, one of the main stakeholders (Norman Seabrook, president of the correctional officers union) has been much more skeptical, almost antagonistic.  All big talk.

“I do not think McKinsey has done anything impressive enough to justify giving them another contract worth millions of taxpayer dollars. . .There has never been a dialogue between the union and McKinsey that resulted in better services being provided”   – Seabrook

Consultants solve problems. We work across industries and melt down the relevant data so that executives have options to choose from.  As Seth Godin often talks about – the simple problems have already been solved. The problems left are the perfect problems – the ones where the core assumptions and constraints need to be re-examined. Maybe solitary confinement is not the best way to punish trouble-makers and keep the other inmates safe.  Maybe the correction officer’s satisfaction and inmate satisfaction are positively correlated.  Maybe there is a win-win.

Don’t judge the situation or industry. Remember, difficult and good business problems come in all shapes and sizes. The head of McKinsey’s first project was counting pieces of chicken for KFC’s chicken nugget box after all.  Do great work and create great stories to share with the next generation of consultants.

Related posts

Accounting 101: What is depreciation?

In my mind, depreciation has two meanings – the common sense definition most people know intuitively, and the financial accounting definition which dictates how costs of fixed assets are spread out over many years. Note – if you are CPA, feel free to call me out on things I describe incorrectly. All feedback welcome.

1) Common sense definition: Something goes down in value. No surprise – after all – it’s just the opposite of appreciation, right? Think about your car, computer, or roof. The older stuff gets, the more worn out it gets, and the less valuable it is.

Old stuff gets worn out and less useful; they say a new car depreciates in value about 20% the minute you drive it off the car dealer’s lot. Likewise, if you bought a home in Las Vegas in late 2006, you can see here that the average house fell from $298K to it’s current value of $194K. I wrote about rental properties here, explaining that it can provide good cash flow and a solid return on equity, but not to count on capital appreciation, because the graph below shows that values depreciate too.  If prices do go up, good for you – just don’t bet your retirement on it.

Consultantsmind - Zillow Las Vegas Depreciation

2) In accounting, depreciation means something different.  Here, it refers to the costs of a fixed asset (something that lasts many years) being allocated over several years. During MBA days we learn the “matching principle” which says to allocate revenues and costs to the the time period when they occur – that is why we have things like deferred liabilities, accrued expenses, and depreciation.

As an example of depreciation, if you buy a piece of equipment for $70K which will last for 10 years, you divide up the cost by 10. For your taxes, you can only deduct $7K of depreciation expense annually. Seems like a crappy deal, right?

In terms of cashflow, you spent $70K already (sad bank account), but your financial statements will only show a $7K depreciation expense in year one.  The only upside is that you get $7K in expense in years #2, #3, #4 . . . #10, until it is fully depreciated.

Non-cash expense.  Depreciation tends to understates profitability in the early years, and over-states it later on.  On the balance sheet, this also gives a more accurate (albeit, still flawed) estimate of the salvage value. So after year four, you have taken $28K in depreciation expense, and the remaining (salvage) value is $42K.

Depreciate over how many years? This is a good question. The US government has multiple schedules which tell you the “expected average life” of your asset. It’s approximate and actually imperfect, but at least it is consistent.

  • For rental properties here, the duration of assets can vary from 5 years (carpets, appliances) to 27.5years (roofs, buildings).
  • For agricultural assets here, the duration can vary from 3 years (hogs and tractors) to 15 years (drainage facilities) to 39 years (non-residential buildings)

Last year, I bought 2 air conditioning units for rental properties. They cost about $4K each and when i did my taxes, my CPA said the units had to be depreciated over 27.5 years. I was pissed. Trust me, those things do not last that long. My CPA made it clear – that is what the US government has on their schedule – ergo – that is how much I can expense.

  • I spent $8K (out of pocket)
  • I can only expense $291 of it in year one. That sucks.

Depreciate or Expense? As someone who has rental properties, I would rather expense costs than depreciate them – after all –  I have already spent the money.  Would I rather reduce my taxable income today or s.  l.  o.  w.  l.  y.  over time.  Hell ya, deduct now.

$2,500 is the magic number. Looks like a few months ago, the IRS raised the maxium $ that you can deduct as an expense. . .from $500 up to $2,500. Nice, so if you are under that amount, deduct it immediately. If you are over $2,500, it is a depreciating asset and you only get to deduct 1/5 of the cost (5 year average life).  Remember kids, $2,500 is the threshold now.


What happens if I replace it early? My CPA explained that is the equipment goes bad before the 27.5 years, I can expense the remaining cost when I throw it away. Sheesh.

Accelerated depreciation. The government – in their increasing complexity – has different ways you can depreciate assets. There is straight-line depreciation that I mentioned earlier (simply dividing by the number of years). Then there is accelerated depreciation – where you can deduct more of the cost earlier. This is clearly more advantageous for the company, and some argue that this is the single biggest tax break for corporations here.

Watch out for EBITDA. This stands for earnings before interest, tax, depreciation and amortization.  Forbes makes the case here that it is this is a poor way to evaluate businesses because depreciation is not a cash outlay. You are looking in the rear-view mirror because the company has already spent the money, and just benefiting from the lingering depreciation years later. Remember, depreciation is a non-cash expense. The money has already been spent. It does not reflect cashflow.

Related posts:

Consultant, what are you doing to get retired?

I look forward to retirement. Who doesn’t? I recently went on a road trip to Key West and Sarasota Florida. Seriously, 80 degrees in December with a breeze? Walking on the beach watching while drinking mojitos? Debating whether to buy scallops or tuna at the fish market for dinner? Choosing between waffles and french toast for breakfast? Here is a sunset and a sunrise in Key West.  Retirement will be awesome.

Consultantsmind - Sunset sail

Consultantsmind - Sunrise

Question: What are you doing to get yourself retired?

Passive Income.  For me, I think consultants and other folks in the well-paid professional services bracket (yes, talking about you lawyers and accountants) need to more aggressively put their money to work. Right now, we are simply trading time for money. We bill out at $250-$500 an hour. If we don’t give the clients the hour, we don’t get the pay. Simple math and unfortunate math. We need passive income, not get-on-a-plane-on-Monday-morning-and-live-at-a-Marriott income.

Are we saving enough? At the end of the day, it’s the old-fashion strategy of spending less than you make (duh), and getting that money working for you. Remember that the average American saves less than 5% of their income. As Dave Ramsey – financial coach, radio host, and author – reminds us, average sucks.

How much of your income do you save?

What are you doing with your savings?

  • Buy assets. This sounds simple, right? Buy things that pay you. Buy things that get more valuable over time. Buy things that help you to buy things in the future. Dividend paying stocks, rental properties, cash-flowing businesses. All assets.
  • Don’t buy liabilities. Just the inverse. Don’t buy things that go down in value or depreciate over time. Don’t buy things that cost money to upkeep, and cause you to spend more money. Personal homes, boats, cars, electronics are all liabilities.

Return on Equity. We do all kinds of complicated business cases, and financial models for our clients, yet, when is the last time you applied that level of rigor to your finances? Are we eating our own dog food? Are we getting a good return on our equity?

Return on Time. As I get older, I think this is even more important. Time is the only thing you cannot get more of. Are we spending our professional and personal lives on things that give us meaning, move us in a forward direction, and make life good? Retirement is more than just having enough money to do nothing – it is NOT HAVING to work, and putting time to only the things you want to.  Amen.

Related posts

Consulting tip: Listen to Freakonomics Podcast

For those who know me, I am a huge fan of podcasts. Great story-telling and content, delivered for free, wonderful use of your time. If you intellectually curious, travel a lot, and don’t listen to podcasts or audiobooks, uh, I don’t understand you. Made a list of great planet money podcasts here. Freakonomics – created by the same people of the eponymous book – have diligently been exposing economics oddities since 2010.

Consultantsmind - Freakonomics

Now the list of favorite Freakonomics podcasts:

I Consult, Therefore I Am (11/26/2012): Yes, a fabled podcast about the management consulting industry. Most this I would agree with.

How to Save $1 Billion Without Even Trying (9/11/2014): Why don’t people use private-label aspirin even though pharmacists do?  Good question.

Diamonds Are a Marriage Counselor’s Best Friend (4/6/2015): If you (or your spouse) likes diamonds, and the one person does not. . .this episode is for you.

Hacking the World Bank (2/19/2014): Interview with Jim Young Kim. Head of the World Bank, not a slacker.

Is It Okay for Restaurants to Racially Profile Their Employees? (6/24/2015): Damn good question. Just admit it. If you go into a high-end Japanese restaurant and you see people behind the sushi bar who don’t look like they are from Tokyo. . . you cannot help but feel like it lacks some authenticity?  Come on – just admit it.

Are You Ready for a Glorious Sunset? (8/27/2015): Discussion on end-of-life care, and our society’s aversion thinking about end of life, as an economist might.  I am listening to Atul Gawande’s book called BEING MORTAL, which is about end-of-life, palliative care, assisted living, and our overly medical-view of dying of old age.

The President of Harvard Will See You Now (9/3/2015): Interview with the President of Harvard – do you need more reason to listen than that? Check out this letter that she wrote to the President when she was. . . (wait for it). . . . 9 years old:

Consultantsmind - Freakonomics Letter to President

The True Story of the Gender Pay Gap (1/7/2016): Harvard economist does an incredible job of explaining the key drivers in the pay gap between men and women. Yes, it is definitely multi-factorial – there is not 1 smoking gun or answer (duh), but a lot of it has to do with women choosing professions, and firms (within an industry) which allow more flexibility. It’s a complex topic, but Freakonomics & their economist guest drive a lot of clarity.

Related Posts

Consulting tip: Use Waze

I am a huge fan of Waze. For those who have not used it, it’s a basic map app which tells you the most efficient route to your destination, which factors in traffic and construction. This simple 45 second video will give you a good taste for it here. For those who feel this is similar to Google Maps – it is. Google bought this Israeli company in 2013 for $1.1 billion. Indicative of the modern times, the information is completely crowd-sourced by users (a.k.a. drivers) as 50 million+ people roam the streets.

It works. On a recent road trip with my wife, we drove to Key West covering close to 1,900 miles during the week-long adventure. We guess it’s accuracy at about 50-60%. Police, objects in the road, cars broken down on the shoulder. It was all crowd-sourced, and all useful information for out-of-town people like us.

It’s fluid and approximate. The reason it is not perfectly accurate is that conditions change. As you can see in the screen shot below, there was definitely a policeman somewhere in our future.  People have them sighted at different places, but clearly there was policeman somewhere in the road ahead.

It’s a lot of fun. You can choose from more than 20 different voices and languages. You get points for reporting new incidents and accidents (6 points), and 1 point for confirming or cancelling an existing report. You can redeem points for new voices like Stephen Colbert, and Colonel Sanders (yes, the founder of Kentucky Fried Chicken). While I am not a real internet giver (don’t really do Yelp, Amazon, and TripAdvisor reviews), I am almost a compulsive Waze contributor. Oddly, I feel my traffic contribution matters. I have bought into the Waze game.

It’s kind of dangerous. Yes, it has voice commands, and hand-motion commands, but honestly, most people spend their time clicking their phone while driving. Smart?  No.

It’s a little bit controversial. A few police departments have sent letters to Google asking that Waze remove it’s police recognition function, implying that people who want to stalk or harm police officers can use it track police whereabouts. The Atlanta makes a half-dozen rebuttals against the police’s argument here.

It’s getting more attention and credibility. The City of Los Angeles announced a formal agreement here to share official transportation data with Waze – creating a new stream of enterprise data to merge with its crowd-sourced data feed. It’s also a way for city and infrastructure planner to think about the problems. In Washington DC, the city is using Waze to fix potholes here.

It is big data. No surprise this creates a lot of data points for data geeks to play with. See the data visualization of Paris traffic here, which shows how the streets of NYC wake up in the morning and basically keeps going. You only have to watch 20 seconds to get the point that all this data is being tracked.

Consultantsmind - Waze Paris

It can save you money.  I recently got an expensive speeding ticket in New York while on a project. Yes, it cost me the price of an iPad. Since then, I have been using Waze daily. This is great news for Google, Waze and potential advertisers.

Do you use Waze?

Related Posts:


Consulting travel: Red eye home

Consulting travel. This image tells a story.  Red eye. Business class. The good with the bad. Welcome to consulting. Strange life.  UBER driver #1. On the ride to the airport, I struck up a conversation with my UBER driver, who works at a local casino. After chit-chat about blackjack strategy, he gave me a deck of cards from the casino where he works. Winning.

Consultantsmind Deck of cards

UBER driver #2.  Was planning to go to a place with 1,200 review of YELP.  Instead, I followed the advice of my other UBER driver, and he pointed me to CULINARY DROPOUT in Tempe.  Ping-ping table, custom cocktails, corn-hole, indoor/outdoor seating, open kitchen, and wicked good ramen.  Solid recommendation

Consultantsmind Culinary drop out

Related posts: 

McKinsey interview: Sheryl Sanderberg

Sheryl Sandberg, COO of Facebook, is awesome. Too many reasons to mention, but a good thumbnail will be this 9 minute interview with McKinsey here. Yes, is not your typical person – her CV looks like the gold standard – Harvard, Harvard Business, McKinsey, chief of staff to the Treasury secretary, Google, then COO of Facebook. Not shabby. More importantly, she talks about women’s equality – which involves men & women, society’s biases and individual self-confidence.

Consultantsmind -Sheryl Sandberg

Gender Equality. This is not a topic I write about much because I don’t know much about it AND I am a bit of a libertarian who frankly thinks that most people in America’s work places have little reason to complain. Yes, I know that is not politically correct:

  • Gender equality is much better in the US than in most places around the world. In Asian corporate cultures, it’s common for women to be socially expected to quit after getting married or having children. FMLA is a non-existent concept in much of Asia. Major glass ceilings. Low glass ceiling.
  • Women in developing economies suffer from straight sexism and violence. You don’t have to work at the UN or World Bank to know that women do the majority of work in poor countries (farming, child care, water, healthcare) and often have no human rights – protection from the law, personal security, or land rights. Bad deal.
  • My heart and mind go out to those uneducated, single moms, struggling to make monthly rent payments. . . not the consultants, bankers, and managers in corporate America who just happen to be women. Yes, it’s an ugly thing to say, but people in the US corporate workplace have it better than 95% of the world.

Yes, I will probably get hate-mail from that, but here is where I turn it around. .

Gender inequality definitely exists in the US workplace. I read an email that was written to a successful woman manager who I know.  It was about her bossy behavior, and honestly, this is EXACTLY the kind of biased bull#$^t that Sheryl Sandberg fights .

1. Social bias against strong women. Both men and women discourage women to lead, take charge, be aggressive, and win. Too often, it is a double standard where women who are action-oriented are called BOSSY or BITCHY.

As men get more successful, they are liked more. As women get more successful, they are liked less. That is a really powerful negative incentive for women to lead. 

2. Women get paid less for the same work. Results show that women only get 77% of what men get for the same work. Sounds like explicit and/or implicit discrimination.

3. Few women in leadership roles. Sandberg notes that only 14% of top corporate jobs are held by women. Also, when women reached 20% of the US congress, the news media claimed that “women were taking over”. Clearly, 20% if not taking over.

4. Work women do is under-valued. This is a deep point. . . which I interpret to mean that we (men and women) need to re-set our mind to what is valuable in life. It cannot be a dichotomy where work life (what you get paid by the market to do) is more valuable than raising children, or any other life choice. . .

One of the most important things women can do working together is to make it clear that every bit of work a woman does—whether it’s in the home, in the school, in the community, or in the workplace—is valued as much as work that men do. Across the board, we are not there. 

5. Women are encouraged to “give up”.  Sandberg comments that corporate life is often compared to a marathon. A marathon where men are encouraged to keep up the pace and keep pushing for the finish line. In contrast, women are often told that the SHOULD be taking care of the kids, or compare themselves to stay-at-home mothers.

No one can have it all. That language is the worst thing that’s happened to the women’s movement. You know, no one even bothers to apply it to men. It’s really pressure on women. I think what happens to women is we compare ourselves at home to the women who are work-at-home mothers and we fall short. Compared to them, I fall short every day. 

6. We should be creative about “work-life balance.  Be willing to mold the work environment to get everything you want to get out of life. Find supporting mentors and people to do projects with. Don’t try to assault the mountain by yourself. Team.

And I’m not saying I don’t make sacrifices. You know, there has never been a 24-hour period in five years when I have not responded to e-mail at Facebook. I am not saying it’s easy. I work long hours. I am saying that I was able to mold those hours around the needs of my family, and that matters. And I really encourage other people at Facebook to mold hours around themselves.

Yes, there are systemic, implied, subtle, and unfair biases we put against women succeeding in the workplace. Perhaps it is not as simple as a libertarian view where everyone is given a chance to succeed, and it is a question of grabbing it. Perhaps it does require pro-active mentoring, behavior-modification, and smart people to adjust the landscape for a more equitable place.

We should just start with management consulting. We should expect more from ourselves and our peers. We are a privileged class of people – educated, traveled, self-confident, well-paid, and intellectually curious. Let’s push the meritocracy to the limit.

Related posts: