Money Blue Book

I have a moderate perspective on social issues, with a very slight lean towards the liberal left. But I always enjoy debating about interesting issues and enjoy hearing the views of others.

I’m going to talk about a fascinating topic I heard discussed on the Chris Core radio show today. He was talking about the existence of the stealth women vote in regards to Hillary Clinton and how some women are eagerly awaiting the chance to vote Hillary into office for the sake of seeing a women ascend into the nation’s most powerful role. However, the issue was brought up that there are some people out there, most notably women in particular, who resent other women like Hillary for her “Queen Bee” mentality and persona.

What is It?

The Queen Bee Syndrome goes like this. Women who have the Queen Bee condition are usually those who work in supervisory roles or in positions of power. They feel the need to be recognized and demand to be in the center of attention at all times. They regard other women as competition and see them as threats to their ability to enjoy exclusive attention and respect. They desire nothing more than having others fall on their knees to bow before them and lavish them with power, attention, compliments, and envy. Oftentimes, they will treat female subordinates much harsher than male employees. They have particular resentment and disdain for women who work in traditional stereotypical female roles, such as secretaries, models, and housewives.

Genuine Surprise At the Response

The issues raised were quite interesting but I could see how the discussion might be considered sexist by some, and I fully expected a torrent of angry female listeners to flood the radio show’s telephone lines to voice their displeasure and complaints. I was actually secretly hoping for this since I’m a sucker for juicy talk radio.

I was completely surprised at what happened next. A steady stream of female listeners began calling into the show expressing agreement with this theory. The majority agreed that many female bosses had this Queen Bee mentality, which caused great resentment and competition among their female subordinates. Many of the female callers indicated that they preferred having a male boss for the fact they think female bosses are harder on other women because the female bosses see other women as threats for attention. Apparently they don’t view men in this competitive light.

Even one seasoned female manager who indicated that she has worked many years in a supervisory role expressed reluctant agreement that the Queen Bee Syndrome was a pervasive affliction in the work place. She remarked that she personality felt an extra responsibility to help other women rise up to her status, but she felt some of the subordinate women felt entitled to this special treatment and resented managers like her when they didn’t provide the extra attention.

Is It a Real Condition In the Workplace?

I found the radio discussion to be utterly fascinating and I began thinking about the type of social interactions I often observe at work. I’ve always thought the opposite was true in the work place – that women tended to give each other extra attention and assistance for emotional and professional support out of mutual sympathy and understanding. I usually see women congregate together and go off in pairs or groups during social and working situations. They even visit the restroom together! Little did I know, they are secretly plotting against one another.

I’m curious to hear what other people think!

The mightiest monetary force in all of the investment world is not the Federal Reserve. It is the power of the compound interest. If I could offer only a single piece of financial advice to anyone, I would encourage the individual to understand how compound interest works and why its effects are so dramatic over time. Even ole Albert Einstein supposedly called it the “greatest mathematical discovery of all time”, and deservedly so.

Very few people become rich or financially secure through wages alone due to the realities of the trading hours for dollars concept, but by taking advantage of the miracle of compound interest, you can have a much better shot at achieving your financial goals.

The way compound interest works is quite straight forward. When you invest money, you earn a certain percentage as interest for the first year. In the second year you earn interest on the original principle and the interest accumulated during the first year. In the third year you will earn interest on the original principle as well as interest on all the previously accumulated interest. The more time that passes the greater the interest that accumulates.

The best time to invest was yesterday, but the second best time is now. Don’t delay! The sooner in time you start investing the greater the benefit you’ll reap through compounded interest.

Hypothetical Example To Demonstrate the Power of Compound Interest

To illustrate, let’s compare two people – Bill and Hillary. Bill invests $2000 for 6 years straight in a savings account earning a fixed 12% interest rate. Let’s not worry about taxes for now. After the 6th year, Bill stops investing and lets his account go on autopilot as compound interest continues to accrue.

At the same time, let’s assume Hillary does nothing for the first 6 years. But after the 6th year, Hillary starts to put $2000 into a 12% savings account and continues to add this same amount every year and doesn’t stop.

Since Hillary had a 6 year late start, how long will Hillary need to continue putting money into her account after the initial missed 6 years before her balance will eventually be greater than Bill’s. The answer is 37 years! At that time, Hillary’s total account balance will be $1,235,557, compared to Bill’s $1,235,339.

Bill’s total out-of-pocket investment of $2,000 for 6 years was only $12,000. Hillary on the other hand had to contribute $2,000 for 37 years for a total of $74,000 to ultimately beat out Bill’s account balance. Bill contributed less money but because he started much earlier, he gained the early compound interest advantage over Hillary, even though Hillary contributed substantially more overall.

There’s also an interest infographic on the power of compound interest rates.

Critical Compound Interest Rules To Remember That Will Maximize Your Investment

1. Start as early as possible – If you have money that is not at the very least sitting in a savings account earning interest, what are you waiting for? Get some interest accruing now!
2. Get the highest interest rate or return on your investment possible. My current approximate investment portfolio annual rate of return is about 40%. But mine is likely riskier than is appropriate for most people. If you want stable and predictable returns, then at the very least put your money in a savings or money market account earning 5% APY.
3. Keep adding to your investment over time – Early and often is the key.
4. The more time that has passed the greater your investment will have grown through compound interest. Your investment horizon should not be a matter of a few years. You should think in greater terms, like 10 or 20 years.

This topic has been discussed and debated by many in the financial community and is regarded as controversial by some. Numerous bestsellers have been written on the subject.

Traditionally, when it comes to making money, most people share the same mentality – “If I work harder in my job, put in more overtime hours, I’ll get ahead and make more money.” Unfortunately, no matter how many hours they put in, they’ll forever be constrained by the laws of nature. There is only a finite number of hours you can work in a day during which you can exchange your available working hours for monetary compensation – essentially, trading hours for dollars, or trading time for money.

The New Approach

The new approach is hard for many to accept as it requires a different understanding beyond what we were taught as children. The new approach places lesser priority on active income and a greater emphasis on passive income generation. Active income would be money earned while putting in your hours sitting at your office desk (trading hours for dollars). But passive income would be money generated from sources such as stock investments, real estate appreciation, rental income, and even advertisement revenue earned by websites that you own. The limitations of the old approach to money are obvious.

You Are Constrained By Time

By trading hours for dollars, you are foregoing time that could be spent tending to other things in your life such as friends and family. You are choosing to spend your time in an office, rather than accomplishing your other hobbies and interests. You don’t want to spend precious time working, but you know that to earn those dollars, you need to trade for them using your available hours. The less you trade in, the less you’ll earn.

Nowhere is it more poignant than in my own full time job. I blog part time and in my full time, I perform contract work. I earn an excellent income rate but I only get paid when I work. If I stopped trading in my hours, I stop receiving dollars. If I want to make more money and hit extra overtime pay of time and a half, I have to keep trading in even more hours. Of course, no matter how many hours I work, I am always limited by the ever present constant – there are only 24 hours in a day.

You Are Taxed Unfavorably

When you trade in hours for dollars, your earnings are usually taxed immediately and you receive very limited favorable treatment in taxation. The deferred taxation offered by 401k and other retirement investment vehicles are the few taxation breaks available to you. The majority don’t even take advantage of this! While businesses can generally use their pre-tax dollars to deduct many of their business related expenses as well as any losses from business related activities, you must use your own after-tax income to purchase most of your day to day items.

Your Ability to Trade Hours for Dollars Will Eventually End

None one can live forever, and eventually there will be a time when you can no longer trade hours for dollars. You will either become too old, too sick, or too injured to work. The moment you stop working and the moment you stop trading hours for dollars, the money will stop. If you had planned ahead and provided for your retirement savings or obtained adequate health insurance prior to sickness, you may be better protected. But that of course depends on how you prepared in advance, and many don’t.

Don’t Ditch Your Job, But Start Learning About and Focusing on Residual and Passive Income

So what now? Certainly, there is no reason why anyone should neglect an active income source, aka a job. A real job provides social stability, an occupational purpose, and a generally predictable source of revenue. But don’t forget the importance of passive income. Learn to plan your finances and understand passive income sources. Invest in the stock market. Invest in affiliate programs. Start an income producing website or blog. Invest in a potentially profitable business run by others. Invest in appreciating real estate. Such sources allow you to earn income even when you are not actively working or trading in your hours. Even when you are sleeping or resting, your passive income sources are still producing for you. Start your progress towards financial freedom today. I’m personally still a very long ways away, but I am slowly inching towards my goals.

Recently I went to eat at a local casual diner. There were very few customers but yet the service was still terrible. Our waitress made us wait and delayed in taking our order or even offering us water. The water never came until I raised my hand for another waitress to bring it to us. Our waitress never offered us much service. It was only a quick evening snack so the bill came out to only about $11.00. I had initially decided not to tip at all because the service was so lousy but decided to at least chip in an extra $1.00. When the waitress saw her tip, she became enraged! She began whining and complaining very loudly and angrily to no one in particular but clearly and purposefully within earshot of us, while her mild mannered manager tried to calm her down to avoid a scene. Eventually her obnoxiousness made me stand up and confront her verbally. The manager ultimately offered us an extra dessert to make peace and apologized for her behavior.

Voluntary Compulsory Tipping

Afterwards, the incident got me thinking about how tipping has gone from being a gesture of good will to a mandatory social custom. The tip is supposed to be a sign of appreciation for a job well done and purely voluntary. Although the amount is never legally required, failure to tip in certain situations can now result in embarrassment, or even feelings of guilt. That is the part I don’t understand and find very frustrating. If tipping is meant to be a show of gratitude for a job well done, then how could people still demand a generous tip even when the service was shoddy or negligent. When the server ignored your table the whole evening and never remembered to fill up your water glass, why does he or she still get indignant and become outraged when his or her lack of consideration is returned in kind.

Only in the U.S. Do People Tip

The United States is one of the few countries in the world that practices widespread tipping. Most parts of the world don’t have such a social custom. In fact, in most parts of Asia, it’s even considered rude and impolite to tip, implying that the servers need to be paid extra to do a good job. In other parts of the world, tipping is associated with bribery and is thus frowned upon. So why are we the only ones that practice that? I am actually a very good tipper when good service is offered, but I find tipping’s socially mandatory nature very distasteful. All it does is cause pricing confusion and create awkward situations. At the very least, we have to go back to when tipping was purely optional with no expectation that it would be offered.