Posts Tagged ‘common sense’

Idiotic Management Award: UK Passport Office

Tuesday, February 6th, 2018

Here in the UK when renewing a new passport, the UK’s Passport Office insist on the application form being filled out and countersigned  in “black biro”, no blue black, and woe betide you if your handwriting should stray outside the tiny boxes provided. Rejection! At a cost of £287 for a family of four,  the experience of applying for a passport exudes extreme bureaucracy and frustration. Nearly three years into the fixed term tenure of Mark Thomson, formerly a Managing Director of the international arm of the UK’s Royal Mail, he has seemingly spent more time driving the burden onto the customer to infinitesimal detail and expense while the experience hasn’t improved one iota.

To what extent is the emphasis and energy on improvements in your own organisation over the next 12 months on “internal benefits” (reducing overhead) versus “external benefits” (customer)? Is that a productive and common sense use of scarce time and resources? If like Mark Thomson, you think your actions make sense, you rightly need to be removed from the job.

© James Berkeley 2018. All Rights Reserved.

Learning About Money

Wednesday, May 18th, 2016

 

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Where did you learn about money?

This might sound odd to my “foreign” readers in perhaps US, Canada and Australia but I cannot ever remember a conversation with a parent or indeed, a child, who had a formal personal finance “lesson” or training. Yes, they received informal advice about earning, preserving and spending money but not much more. Yet when you think about the life skills that have got us to where we are today and where we probably need to get to tomorrow and the day after, personal finance must rank pretty close to sex education and the hidden dangers of using social media.

  • What common sense advice would you pass onto your son and daughter?
  • Where would you suggest they go for trusted advice?
  • When should they start learning about the prudent use of money?
  • Why is it important at that particular stage of their life?
  • How do you ensure that they never repeat the same mistake twice or an earlier generation’s foible with money?

I thought about my own experiences. There was very little explicit advice about three pools of money: cash, credit and investment. I learned “on the job” through teenage years from the pocket money days, to work experience and part-time jobs in the student days. Thereafter in the early years of my career, it was mostly friends talking about what they were choosing to invest in or acquire. Some friends were inculcated to save up to by a first home. Others, the entrepreneurs, serially invested in start ups and early stage businesses and the bankers pursued stocks and funds. The majority invested in having fun on a Thursday night, a weekend or a boys or girls trip.

There are five lessons about personal financial decision-making we should reflect on:

  1. The Power of Early Years Learning: What is most interesting, is how so many friends of my age group’s beliefs about wealth and personal financial freedom were formed at a very early point in their lives. A great many of those beliefs still inform their behaviour today (saving, spending, preferred asset classes, self-confidence, risk appetite and so on). For example, the friends, who were immersed in buying a first home at all costs, have often led onto acquiring second and third homes or buy-to-let portfolios of residential property.
  2. Geographic Distinctions Narrowing: As a 24 year old, thrust into a group of middle class American college kids on a an insurance underwriting trainee programme in Minnesota, I vividly recall how self-confident and proficient they were in mastering substantial five figure college overdrafts. They had learned something I hadn’t although I was relieved not to have their problem, save for overextending myself on the purchase of a VW Golf. Yet even those distinctions are narrowing, as the cost of university education rises exponentially and kids in the UK leave with substantial debt burdens.
  3. Mindset Before Wealth: You can be rich or poor but your mindset is the “rudder” for your life and the personal choices that you make with your cash, credit and investment alternatives. You can adopt a mindset that there is abundant opportunity in life and I would be remiss in not pursuing it or you can adopt a poverty mindset, I must live in fear of the wolf stealing my wealth. Rarely is anyone taught about personal financial decisions in those terms.
  4. Learning From Our Omissions Trumps Our Failures: We applaud the great decisions we made with money and we beat ourselves up about the poor decisions but we rarely study why we omitted to spend, save or invest money on what turned out to be good investments. Coming to terms with the fears that inhibit clear thinking is fundamental to better decision-making. Wouldn’t our kids be better off if we took note and we passed those lessons on?
  5. Financial Technology Not A Nirvana: Technology is a huge boon to teaching kids today about their desired financial outcomes, alternatives, risk and rewards and selecting the best option in record time but it is not an exact science. Robo-advisers serve a purpose but there is an “art” to making smart personal financial decisions that is set in the answer to the question, “what is the life we want to lead?” and “how do we best adapt to those changing needs?” Only your kids can answer those questions.

Our kids in all likelihood may not turn out to be personal finance geniuses, nor can we motivate them to have an awareness of money. What we can do is create an environment where they are wiser than we were, where they learn not just from our successes and failures and where they learn to create an approach that works uniquely for them, not us.

© James Berkeley 2016. All Rights Reserved.

A Fool’s Wisdom

Wednesday, March 23rd, 2016

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In this Trumpian era where people are encouraged to say anything however crass or non-sensical to get noticed on social media platforms, I see so called business advisers increasingly adopting the tactic.

Today on Hotels the global hotel industry’s foremost media blog, a guest contributor and acclaimed expert, writes a two part post suggesting the industry is retarded if it doesn’t adopt a nickel and dimeing strategy! His point is that hotels need to follow car rental and airlines in better educating their customers about the hidden value they are providing, the best way to accomplish that is to charge them for every extra. I read the posts twice to check it wasn’t April 1.

What the writer fails to consider is how much more customers would pay if the product was better. It is this type of poverty mentality that kills growth businesses.

Don’t be drawn into a fool’s wisdom just because it is seemingly coming from a highly credible source. Ridiculous advice really says more about the source’s credibility than the advice itself.

© James Berkeley 2016. All Rights Reserved.