April 24, 2024

Bucks Blog: When Money and Emotions Collide

We all have some sort of history that has shaped the way we relate to money, and those feelings can influence many of the financial decisions we make, both both big and small. Human nature plays a big role, too.

So on Tuesday, the Your Money team, in collaboration with American Public Media’s “Marketplace Money” radio program, published a special section with several articles that illustrate where money and emotions collide.

One article discusses how scary markets often cause us to do crazy things — like throwing away our well-designed, rational financial plans and buying or selling at the worst possible moments.

Another article talks about how adhering to your dream — to open a cupcake shop or become an artist, for instance — could end in disaster. And it discusses why human nature makes it so hard to turn our backs on those dashed dreams — even when it’s abundantly clear we should probably walk away.

There’s also an article about how it’s tricky to sort out our emotions from economics when purchasing long-term care insurance, while another article looks at the type of people who choose to give away their big inheritances.

Other articles raise difficult questions: Do I truly believe I will live long enough to spend my retirement money? What am I prepared to spend on a suffering pet, and should I? Will I insult my fiancé if I question him about his savings or his debts? Should I help my adult children — and will I put myself at financial risk if I do?

We hope you will share some of your own experiences related to these articles in the comment section below.

Article source: http://bucks.blogs.nytimes.com/2013/03/26/when-money-and-emotions-collide/?partner=rss&emc=rss

Thinking Entrepreneur: Ten Years Later, An E-Mail From The Employee I Wanted to Forget

Thinking Entrepreneur

An owner’s dispatches from the front lines.

On paper, business is about marketing, management and finance. In reality, it is also about relationships: the good, the bad and the ugly.

If your business is growing, you are always adding employees. Some work out great, some work out O.K., some don’t work out at all. And some end in disaster. Those are the ones who can stick with you for a very long time. Among the hundreds of employees I’ve had over the years, there is only one that I have consistently avoided thinking about or talking about. And it’s not the one that you might suspect. It’s not the thief, the embezzler, the liar or the sexual harasser. It’s not the one that was laziest, most careless or most irresponsible.

In those categories, I have become numb. Or just experienced. I have learned that if you hire enough people, on your way to hiring a great staff, you are eventually going to go through all of those types. And I have learned not to take things personally (usually). If people steal, it’s because they wanted money. They were not necessarily out to get you. And even if they were out to get you, it comes with the territory. You are the boss. There’s something different about being the boss. To some people, it’s almost as if you aren’t really human. Anything goes.

But as I said, one person has stuck with me all of these years. About 10 years to be exact. I almost never talk about him; I can barely stand to think about him. It is not that he was the worst employee I ever had. He wasn’t. It wasn’t that he caused me the most grief. He didn’t. It isn’t that I am mad at him. I’m not. Actually, I have been mad at myself — or embarrassed with myself — for getting into a situation that ended badly. He probably only worked for me for six months. Like me, his father owned a picture-frame shop, and we both thought we could use the Internet to revolutionize the way custom frame shops advertise nationally. Like FTD. I hired him to start a new business. He seemed passionate and committed. To some extent, he reminded me of me.

Starting a new business can be intoxicating, and he became the entrepreneurial version of a drinking buddy. I treated him like my own. Of course, as I’ve written before, passion does not conquer all. The fact is, the guy was in his mid-20s, and I should not have expected him to spearhead this venture. I gave him enough rope to hang himself — not the only time I’ve made this mistake — and that’s exactly what he did. He was a kid, perhaps even a confused kid.

Things started happening. He was careless. He didn’t treat people well. We went to a national trade show, and he acted like a 14-year-old. I realized that he had to go. From what I remember, there was no ugly screaming (maybe a little). It was more like a sad divorce where the parties just go their separate ways. The business failed, through no fault of his. What seemed like a good idea wasn’t. If you look at my bio, you will see that I own five businesses. I have started 10. Failure is my friend. I have learned more from failure than I have from success.

So why am I thinking about this now? It’s not because I’ve been torturing myself. I’ve gotten better about that. I’ve made enough mistakes that indulging regret could be a full-time job. The reason I’m thinking about this is an e-mail — an e-mail I just got from this kid I hadn’t heard from in 10 years. He told me he was doing well, had gotten married and had a good job. He made clear that he expected nothing in return, not even a reply. He has been reading this blog, and he decided that he needed to send me an apology and an explanation. He wrote, in part: “I’m sure that you are less interested in how I’m doing than as to why I would feel compelled to write you all these years later. The answer is simple: I owe you. I owe you a more mature, more sincere apology. … I treated your employees and family disrespectfully. I was not ready for the gifts you gave me, the company credit card or the business that I proposed we create together. I was overwhelmed by the sudden acceptance and trust you gave to me and rather than build upon it, I acted to destroy it.”

At first, I thought that he must be in one of the 12-step recovery programs that send people back to apologize to everyone they have wronged. But I don’t think that is the case. And this wasn’t just any e-mail. It was a well written, eloquent, gut-wrenching e-mail. Clearly, this had been bothering him. Two of the sentences really hit a nerve: “You were not a fool. I was an …” — he used another word for jerk. “I’m sorry, Jay. I’m so, so sorry to this very day.” It’s not so much that I needed him to tell me that I wasn’t a fool — I was a fool. But his acknowledging that he had been a jerk and that he felt bad about it made a difference to me. It made me feel better.

As a matter of fact, I feel a lot better. I now realize that just because you try and fail with someone doesn’t mean you are a fool. It means you are a boss. There doesn’t have to be guilt, regret or any of the other things that human beings have to suffer. You can just move on and try to do better. In the last 10 years, I have also recognized that I’m an entrepreneuraholic. Now, I’m a recovering entrepreneuraholic. I no longer have to start every business I think of (I write for this blog instead).

So, to answer your question, I did reply to his e-mail. I thanked him, and I gave him a full pardon. He has grown up. And so have I. The fact is, he redeemed both of us.

Am I the only one who has had this kind of unfinished business?

Jay Goltz owns five small businesses in Chicago.

Article source: http://feeds.nytimes.com/click.phdo?i=cf5c5c9171e004818fc9d148eb79363f

You’re the Boss: Finding Suppliers Who Meet Our Standards

Staying Alive

In late 2008 I got a phone call from the owner of a company in Michigan that manufactures and distributes metal table legs in a variety of configurations. We usually make our own wood bases for our tables, but there are times when we want to provide a simpler, cheaper solution than we can make ourselves. Metal legs are much less expensive than a custom-made base, so we can fabricate a very nice top and sell it at a lower price point than if we build the whole table in house.

The owner called me out of the blue in 2008 — quite a difficult year, as you may recall — because she was trying to find new clients for her company. She told me about her business, which was small, struggling and doing its best to keep American workers employed — a familiar story for me. I suggested that she send a catalog (her Web site was rudimentary) and I told her I’d keep her in mind for future projects.

During the next year and a half I asked her to price four or five projects, but we didn’t sell any of them. And then in the middle of 2010 I got an unexpected call: a client who had abandoned a project in 2009 for lack of funds had decided to move ahead, but needed to cut 20 percent from the project’s costs. By coincidence, this client was also in Michigan, so I suggested that we use metal legs instead of the original design, and I was able to tell a good story about locally produced components. The project was approved, but the client wanted both a custom color on the legs and a quick turnaround. As soon as we received our deposit, we placed the order for the legs, knowing that the timing was tight.

We built the table tops and waited for the legs. They showed up just a week before we had promised delivery. Disaster: a dozen legs had been placed in each box without any wrapping or padding, so they banged against each other the whole trip. The custom paint job was ruined by scratches, nicks, and dents on every surface. A panicked call to the leg manufacturer got results, and replacements were delivered with one day to spare, along with profuse apologies. Apparently, a new worker had packed the legs, and didn’t realize that they needed to be wrapped individually. All right, I thought, that’s plausible, although not encouraging. But in the end, the job went out and the client was happy.

The next time we used the supplier, later in 2010, everything went well, which made me feel better. We placed another order in April for a job that needed to be delivered on May 1. Again, timing was tight. The legs arrived just as we were finishing the tops. These legs were to be attached to the tops by eight screws through a 6-inch by 12-inch steel plate welded to the top of the post. The job consisted of 14 modular tables, each with two legs.

We unwrapped one leg to check the hole pattern drilled into the plate. The eight holes were evenly spaced in the plate, so we programmed that pattern into our computer numerical control (C.N.C.) robot’s final cut and drilled all 224 holes. Each hole was then filled with a threaded insert, so that our clients could quickly and easily bolt the legs to the top. We like to make sure little details like this are complete when the tables are delivered — it makes the assembly go smoothly and makes for happy customers.

After the last cut, the tops went into the finishing room, and emerged two days later. We needed to ship the table the same day, but we did a final assembly just to make sure everything was right, and so that we could photograph the finished table. We took all the legs out of the boxes and started to bolt them onto the table. Another disaster: every steel plate had the holes drilled differently, in a semi-random pattern, with variations in spacing up to 1 inch.

Not only was our predrilled pattern useless, but now each leg had to be individually numbered and marked to match a particular table. This would make the customer’s task much more difficult, as its people would have to match each leg with the proper table. It also added six man-hours of work to the assembly and packing process. And furthermore, it caused us to violate one of my own rules about our product — that it should be easier to assemble than a Lego kit. We go to great lengths to engineer the assembly sequences of our tables, so that anyone can put one together without difficulty. The random drilling made us look sloppy and promoted the impression that we don’t care about the experience of assembling our tables.

After some consideration, I sent the following e-mail to the leg maker’s owner:

“We opened up the legs we just received from you. The holes in the top plates vary considerably in their placement — every single plate is different. Hole locations vary up to an inch from plate to plate. This means that we have to individually drill every hole for every leg, instead of using our C.N.C. to cut them. We will have to mark each leg location with a number and orientation of the plate, and our client will have to then match up the legs and numbers on the bottoms of the tables. This is additional cost and trouble for my client, and makes us look as though we are incapable of making 28 pieces of steel identically.

“This level of quality is not acceptable for us. If I wanted random drilling, I would order legs from China. We will no longer be ordering from your company.

“I’ve been running a factory for 25 years and I know that it can be difficult to get people to perform as the boss would wish. The only reason I am writing to you is so that you can read this letter to your people, and hopefully spur them to do better work. As I said, we will find other suppliers for metal legs, but perhaps you will be able to bring your game up and do a better job with your other clients.”

The easiest way to drop a vendor is to simply stop calling them and move on. I wrote the e-mail because I was trying to give her something that is very hard to come by: negative feedback from outside your organization. I almost never get this myself. Customers generally don’t give it to us because we do good work. Prospective customers don’t want to give it because they can’t be bothered. Even when I ask, I usually get nothing, and the answers that do come in are vague to the point of uselessness. I guess people just feel bad about delivering bad news.

Some of you will probably suggest that I could have worked with this company, that it would probably do a better job the next time. Frankly, I feel that messing up two jobs out of three is all I need to know. It’s entirely possible that I’m the fussiest customer out there, and that her other clients would prefer a lower price over higher quality. I presume that the owner took my letter and used that feedback in a way that made sense to her. Maybe she read it to her people to show the consequences of small errors. Or maybe she threw it away with pleasure, delighted that she wouldn’t have to deal with me again. In any case she did not reply to the e-mail.

We got a bill from her with a $35 credit (on a total of close to $1,800), which I paid upon presentation. We have already found alternative sources for metal legs — they are something of a commodity. And we’ll alter our designs to obviate the need for regular drilling patterns, just in case. Was this the right decision? Possibly, possibly not. But it’s made and done. Time to think about other things.

Paul Downs founded Paul Downs Cabinetmakers in 1986. It is based outside of Philadelphia.

Article source: http://feeds.nytimes.com/click.phdo?i=c51ee0a20e8ad396dc12cbb43d754855