Hard(ly) Work

I've posted entries in the past about people who don't work, and live of my taxes in the form of government payments.  I'm not linking to them here; you can either assume it wasn't altogether flattering, or find the 'work' label on the blog and check it out for yourself.

In the past couple of years, I haven't changed my mind about that, but I'm more disgusted about another form of not working.  By this, I mean people who talk a lot about how hard they work, but who don't really work that hard.

I started to notice this more after being self-employed for a while.  Many people with whom I interact seem to believe the scheduling flexibility that comes with self-employment is also a ticket to working less than their mandated 40 hour work-week.

In truth, while the W-2 employee is working an 8 hour day, they generally aren't going farther than that over the course of a year.  And as one who worked that life for many years, I also know that there is plenty of time for chit-chat, personal calls, and now more often, social media time.  The 8 hour work day or 40 hour work week for most (not all) people is actually a lot less than that, and I'm not even counting the 3 weeks or more of annual paid time off.

Meanwhile, self-employed folks on the pathway to success are usually working at least several hours a week in the evening and/or the weekend.  There may be time off every day, with no time off any day.  I grew up on a livestock farm, and it's the same deal, except a that's a helluva lot more and harder work.

The only self-employed people I know who consistently work less than 40 hours a week are ones who are failing, or have already succeeded.  There is no in-between -- you aren't going to be a success in self-employment unless you are working harder and smarter than the typical 40 hours a week.

The crux of all this is, when someone feels the need to mention how hard they've been working at their job, I don't really want to hear it.  Chances are, they're embellishing to begin with.  Chances are, they take more vacation than I do.  Chance are, they aren't working at their occupation harder than I am at mine.

If they think they're working hard now, they should try running their own business.

The Circle Of Competence

Among the many profound investing philosophies of Warren Buffett and Charlie Munger are some that extend beyond the area of finance.  Today I select one it seems I've cited a lot lately, that being the idea of staying within one's own "Circle of Competence."

The basic premise is simple:  When you don't really know what you're doing, it's much riskier than when you do know what you're doing.  This is one of those premises that everybody knows, but most still violate from time to time, even very smart people.

This concept is straightforward in finance, where another quote Buffett often refers to (not his) works as an explanation:  "When a man with money meets a man with experience, the man with experience leaves with the money, and the man with money leaves with the experience."

Consider, however, the practical, non-financial life applications to the Circle or Competence.  How often don't you hear from someone giving you unsolicited and unqualified advice on issues of relationships?  What about on issues of fashion?  Or how about my most recent favorite, those who have no medical or health training, but want you to accept their understandings and beliefs on all sorts of specific medical or health related issues?

Those offering opinions that are outside their Circle of Competence are doing even more than nothing to help you or themselves.  They're actually going into negative territory, because you may be able to take advantage of their incompetence.  Here again, this may be most readily apparent in the world of finance, but applies to other walks of life.

The most important part of all this is knowing one's own Circle of Competence. Munger was once quoted as saying, in a bit of a self-fulfilling prophetic way, "It isn't a competency if you don't know the edge of it."

Insurance = Bad Investment, Redux

I've covered this before:  Generally speaking, insurance is a bad investment.

Last week, I got into a prolonged, disagreeable phone conversation about a mutual client with what I consider to be the lowest form of 'financial advisor' on the planet:  A career life insurance agent.  Here's my open letter to him:

What gives you the right to call yourself a financial advisor?  You have one strategy -- convince everyone that their financial situation can be helped with some type of life insurance product, including (and especially) variable and indexed annuities.  Isn't it interesting that these these products generate big commission payments to you?  Never mind that your client pays well over 2% and probably closer to 3% of their 'invested' money every year in expenses to help pay those commissions, a fact you don't audibly disclose.  Never mind that you have little or no expertise in retirement, investment, or tax planning.  Never mind that you don't live by a fiduciary standard, you live by making your insurance company quotas.  You either don't know, or don't care, that not everybody needs life insurance.  In fact, you want people to believe that it's perfectly normal to buy enough life insurance to cover all the income they might make in the future -- a 'future value' approach that makes absolutely no sense, and profits nobody except you and your company.  You are a self-serving loser, and you suck.

This letter doesn't apply to every career insurance agent, just most of them.  As a certified financial planner, I do everything in my power not to be closely associated with them.  Actually, that's a financial strategy that would help everyone!