Enough by John C. Bogle

Is there no limit to what enough is in modern society? Capitalism is at play. Management earn obscene amounts of compensation. Greed can cause a system’s downfall. How long can materialism and greed last? I have been given enough, in more aspects than just financially. My great grandfather was incredibly thrifty. My family was fraught with financial difficulty. I had to work when I was young in order to feed the family. I learnt to accept responsibility when I was young. I did well in school and mum put in so much effort into investing in my education. My attitude in life has been influenced by my family. The first ‘diamond’ of my life was my admittance to the Blair Academy. My family was incredibly close-knitted and that helped a lot. Later, I got admitted to Princeton University on a full scholarship. Even then, I had to take up temporary jobs for me to get paid. However, my parent’s marriage fell apart after that. I discovered that the mutual fund was new at that time and wrote about it. Mr Morgan was the boss of Wellington Fund. When I was 35, he said I could take over the firm. After a disagreement with the other shareholders, I got fired. My business model was to manage our affairs internally and not require any external party to manage it. Vanguard would have to do everything in-house if it wanted to succeed. Before 1875, I founded the world’s first index mutual fund. The fund didn’t need to be managed as the returns would track a basket of stocks that were representative of an index. ‘If you build it, they will come.’ Thankfully, we got approval from the SEC too. A donated heart was one of my ‘diamonds’ too. This heart enabled me to live healthily. Be blessed by the number of diamonds you have. Humans are all too interested in short-term gains. Companies should recount their past values which enabled them to thrive. Virtue doesn’t come from money. It comes from doing good.

Some men wrest a living from nature and with their hands; this is called work. Some men wrest a living from those who wrest a living from nature and with their hands; this is called trade. Some men wrest a living from those who wrest a living from nature and with their hands; this is called finance. – Old Epigram from 19th Century Britain

There is a food chain and the investor is at the bottom of it. The financial system cannot be too costly. We are often trading paper and paying bankers too much. In addition, the financial system is fraught with complexity. Young graduates like to enter banking. We should strive to do good in our jobs. Never let money alter your conscience. Do not invest in products which require you to pay high management fees etc. Serving your client is the highest priority. The sub-prime crisis was an example of extreme greed. The finance sector takes up too much of the earnings of the S&P 500. Sometimes, the markets crash but those people in IB keep making money. The ex-CEOs of Citigroup and Merrill Lynch were paid very well just before the sub-prime crisis. They were not penalised heavily after that. However, bankers earned nothing as compared to the hedge fund managers. The hedge fund industry demands high management fees and investors can’t survive. The number of CFAs are increasing all the time. There is an inherent disconnect between cost and value in our financial system. Humans have abandoned the traditional standards of investing. The author looks up to people like Benjamin Graham and uses value-investing. Speculation is rife nowadays. The cumulative costs keep growing. Does the financial system create more value than cost? My fear is that the finance sector is getting too big and out of control. There needs to be a financial system reform. As public investors, we should demand more from our financial system.

The motivation of too many of those rushing into finance is more aligned with what they can get from society than what they can give back to it. – John C Bogle

Too Much Speculation, Not Enough Investment. Investing is about long-term ownership of the business. Speculation is just the opposite and is about short term gains. One of Keynes’ famous works is the ‘General Theory of Employment, Interest and Money’. In the long run, the stock price must be aligned with the business fundamentals. Speculators cannot capture the inherent value in a stock. Markets are volatile because of speculators. In the expectations market, prices are set based on the expectations of investors. These are not based on ‘real value’ per se. We live in an era of speculation. However, it is true that investors win and speculators lose in the long run. Stock markets have crashed, just like on Black Monday in 1987. Short term outcomes can’t be predicted accurately nowadays. There have been little cases of black swans in the long term market. The financial system is prone to innovation. Learn to emulate tortoises. Market timing is not sound. Market timing doesn’t work. It is difficult to make the right decision consistently on market timing. We need to improve the balance between entrepreneurial innovation and more traditional values. We cannot allow the whirlwind of speculation to continue unabated.

In investing, tortoises tend to win far more often than hares over the turns of the market cycle…Placing large bets on an unknown future is worse than gambling because at least in gambling you know the odds. Most of the decisions in life motivated by greed have unhappy outcomes. – Peter L. Bernstein

Too Much Complexity, Not Enough Simplicity. Simplicity has been the key to successful investing. Technology has complicated our lives. There are many middlemen in a CDO offering. Some banks are also not concerned with the creditworthiness of such offerings. The market has been flooded with interest rate swaps, credit default swaps etc. The value of the derivatives market is huge. ‘As long as the music is playing, you have to keep dancing.’ The Federal Government has also backed such offerings. It is better to buy an index fund as it has better returns. Innovations have hurt investors. The winners are usually the fund managers or distributors. Innovations like stock index fund, bond index fund have done investors well. ETFs are great. However, they are being traded too frequently, leading to speculation. Some ETFs also do not contain stocks that track the stock market index. There are many different types of funds nowadays, like market neutral, hedging, commodities, private equity etc. However, please examine the track record before buying. Commodities are purely speculative in nature. Fund expenses must be cut if investors are to gain. Fund failure rate is very high amongst idiosyncratic funds. Some funds are not concerned with shareholder performance. It is time to get down to basics. The author believes that the simple way is the best way. The mutual fund industry often fails to provide market-beating returns. The fund manager should serve investor’s interests.

Too Much Counting, Not Enough Trust. We often place too much emphasis on numbers and trust them. Then, we have optimistic views on the future because of them. Even numbers produced by the government can be questionable at times. We need to understand the sources of stock returns. Do not project future returns based on past historical rates. This causes the expected rate of return of investments to rise. The bubble of investor optimism will have to burst someday. It is smarter to set your expectations for future earnings on basis of current sources of returns. There is a bias towards optimism in the future. CEOs often paint too optimistic pictures for earnings and analysts tend to agree with them. The standard for analysts has changed from GAAP earnings to operating earnings. Pro-forma earnings also exclude all the one-time losses etc. Creative accounting is a big issue nowadays. Pension holders might lose money on their investments and this will have other repercussions as well. Businesses like to use M&A to create ‘value’. For each M&A deal, the bankers and lawyers earn huge sums of money. ‘Paper’ companies have acquired ‘rock’ companies that make. In Vanguard, we believe in organic growth, not forced growth. Nowadays, we do not know how to ask without any numbers and this is a scary fact. Trust is important.

The first step is to measure what can be easily measured. This is okay as far as it goes. The second step is to disregard that which cannot be measured, or give it an arbitrary quantitative value. This is artificial and misleading. The third step is to presume that what cannot be measured really is not very important. This is blindness. The fourth step is to say that what cannot be measured does not really exist. This is suicide. – Daniel Yankelovich

Modern capitalism has two parts: there’s business, and there’s finance. Business is renting you a car at the airport. Finance is something else. – Michael Kinsley

Too Much Business Conduct, Not Enough Professional Conduct. Professional associations are now run like business enterprises. However, professionals should be responsible and selfless in their service towards their clients. Times have changed nowadays. Professional conduct is less well regarded as in the past. Too many banks are seeking competitive advantages at the expense of their customers. The battle for professional independence is never won. Trust and be trusted. Capitalism has eroded as well and this is a big issue. Owners’ capitalism has been transformed to managers’ capitalism. Institutional investors are a big thing nowadays. Managers are not acting as they should for their principal. Beware of negligence and profusion have prevailed among corporate management. How much should the CEO be compensated? It is hard to determine how much value a CEO has added. Sometimes, their salary growth outstrips the corporate profit rate. There are accountability issues. Institutional money managers hold a lot of power. CEO stock based compensation should be based on intrinsic value and not actual stock price. The compensation consultant has also become more popular. Many CEOs are also paid according to how they fair in their peer group. A basic set of ethical principles is needed to guide the profession. Financial engineering is getting more and more popular. Capitalism must be fair, regulated and ethical.

Money management extracts value from the returns earned by our business enterprises, and in the process of maximizing its own commercial benefits, the industry seems to have lost its professional bearings. – John C Bogle

Too Much Salesmanship, Not Enough Stewardship. The industry is characterized by salesmanship too. Mutual fund size has grown by a tremendous rate recently. Fund investors start trading funds instead of simply holding them. The holding period for stocks has been cut from 6 years to 1 year. Fund costs have soared as well. The fund industry is more like a marketing industry now. Investment focus has been truncated. Some funds are only created because of the latest market fad. There is a need for reform. We need to cut down costs for investors. Serve the investor for a lifetime. There are too many choices of funds out there and this makes people confused. There is a need to have long term investment horizons. Serve the long term investors. We must all return to the index fund. Put fund investors in the driver’s seat. Shareholder education takes time. The industry should aim to be objective and unbiased. We need to have an industry that is of the shareholder, by the shareholder, and for the shareholder. We need a mutual fund industry with vision and values. We must build companies that stand for something. Stewardship will pay off. It is important to keep the faith every day.

Too Much Management, Not Enough Leadership. Our large corporations are over-managed but underled. Managing and leading are completely different. The leader is more original. The leader should be able to inspire. They should care about the deeper values of the organization. There are 10 rules for building a great organization. 1) Make caring the soul of the organization. 2) Forget about employees (call them crew members instead). 3) Set High Standards and Values – and Stick to Them. 4) Talk the Talk. Repeat the Values Endlessly. 5) Walk the Walk. Action Speaks Louder than Words. 6) Don’t over-manage. 7) Recognize Individual Achievement. 8) Loyalty is a Two-Way Street. 9) Lead and Manage for the Long-Term. 10) Press On, Regardless. A superior company thinks about its dream. It also applies unconventional thinking. We were based on value profit chain concepts. I built a company that would endure. Businesses should have purposes besides making money.

The institution must be the object of intense human care and cultivation. Even when it errs and stumbles, it must be cared for, and the burden must be borne by all who work for it, all who own it, all who are served by it, all who govern it. Every responsible person must care, and care deeply, about the institutions that touch his life. – Howard W. Johnson

Too Much Focus on Things, Not Enough Focus on Commitment. Where are the things by which one measures one’s life? Don’t let things measure the man instead. Life is never smooth and we might lose our wealth one day. However, your character is the one that will endure. Boldness and commitment is all important. Commit the most to make a second life. It is crucial to be committed to your family. Commitment to neighbours and the community is also important. We thrive as human beings and have faith in ourselves. Give credit to those who have helped you along the way. You didn’t succeed on your own. Be bold and summon your magic.

Too many 21st century values, not enough 18th century values. Do not move away from the truth. Facts are everywhere. The Age of Reason occurred in the 18th century. Many of the great leaders spoke about the period of Enlightenment. Benjamin Franklin was a great leader in the 18th century. Joseph Schumpeter also described what an entrepreneur ought to be. Entrepreneurs and capitalists are not the same. Have the will to conquer, and the joy of a good battle. Franklin invented many tools for the public’s benefit. There are other motives for business other than profit. A man should have a mind to improve, a heart to cultivate and a character to form. Keep striving to improve. Return stewardship to capitalism. Lead with purpose. Virtue is all important. Franklin listed 13 virtues. He started his day by asking ‘What good shall I do this day?’ and ended it with ‘What good have I done today?’ His energy and persistence helped him in his public life.

Knowledge is not the personal property of its discoverer, but the common property of all. As we enjoy great advantages from the inventions of others, we should be glad of an opportunity to serve others by any invention of ours, and this we should do freely and generously. – Benjamin Franklin

The real test for an honest and productive society is not what a society has achieved, but what it aims to achieve. It can put honest people on a pedestal even if they do not maximize their personal benefits and preferences…and discard and shun as models of failure dishonest people who achieve their highest ambitions by fraud and abuse of trust. – Tamar Frankel

Too Much ‘Success’, Not Enough Character. We often chase success but success continually eludes us. Is success all about achieving wealth and fame? Financial wealth is not a good measure of success. Fame is a flawed measure too. Fame is used for other purposes now. One can contribute to society in a great way but yet not be famous at all. Power should not be used capriciously and arbitrarily. Power should be used for a worthy cause. Have we been chasing the fake rabbit of success? Success isn’t about meeting other people’s expectations too. You should just base success on your own expectations and make the most of your talents. We should admire those people in professions where they can contribute to society, but not achieve any fame or recognition. Modern life has forced people to be competitive. Life demands much more of us nowadays. What are you competing for? Without character and courage, nothing else lasts. To hone character, one must undergo tribulations etc. Be yourself and strive to be better. With age, you should better understand where the rabbits are. Challenge yourself and strive to be better. Chase the real rabbits of your life.

Success can be measured in our contributions to building a better world, in helping our fellow man, and in raising children who themselves become loving human beings and good citizens. Success, in short, can be measured not in what we attain for ourselves, but in what we contribute to our society. – John C Bogle

I long to accomplish a great and noble task, but it is my chief duty to accomplish humble tasks as though they were great and noble. The world is moved along, not only by the mighty shoves of its heroes, but also by the aggregate of the tiny pushes of each honest worker. – Helen Keller

Highly educated young people are tutored, taught, and monitored in all aspects of their lives, except the most important, which is character-building. But without character and courage, nothing else lasts. – David Brooks

What’s Enough? What is the relationship between happiness and success? Success is not the key to happiness, happiness is the key to success. Humans are resilient. Money only provides a transitory form of happiness. Autonomy, social interaction and competence are all important. How much money do you need? I want to give something back to the less fortunate. For example, give back to your alma mater. I also offered scholarships to the Blair students. It has been a thrilling ride indeed. I was born to save rather than spend. Our shareholders also have received superior returns. I do not like extravagance. My retirement plan is the largest in the family balance sheet. Saving early and regularly is the key for wealth accumulation. Postpone your first payment for Social Security. Stick with low-fund fees. There are still many people living in poverty in the US. The income disparity is growing. You must remember that you are fortunate but not all fellow Americans are enjoying it. The domination of the US will not happen forever.




Utopia for Realists by Rutger Bregman (Part 1)

How We can Build The Ideal World

‘A map of the world that does not include Utopia is not worth even glancing at, for it leaves out the one country at which Humanity is always landing. And when Humanity lands there, it looks out, and, seeing a better country, sets sail. Progress is the realization of Utopias.’ Oscar Wilde

The Return of Utopia. In the past, the world was much worse than what it was today. Poverty rates have fallen and life expectancy has increased. The last 2 centuries have seen explosive growth, like nothing mankind has ever experienced. People are 250 times richer as compared to the Industrial Revolution. People used to dream of a brighter future. Modern world suffers from problems like obesity, pollution etc. Modern medicine has allowed those who have suffered to live again. Driverless cars are on our roads. Internet access and smartphones are getting more widespread. Vaccines are useful to prevent diseases and pre-mature death. In terms of literacy, humans are at our all-time high. Although everything seems good, we may lack a purpose in life. We live in a capitalist and consumer driven society. How can we improve our current state? A common utopia is one of blueprints, where dissension is not tolerated. Transgressions are not allowed and will be punished. Why are we working long hours than before even though we are richer now. To many, utopias turn out into dystopias and nightmares. We crave freedom, but it some ways, it is an empty freedom. We spend too much on health care. The advertisers and mass media benefit from over consumption. This is the dystopia we are living in. We are pampered too much. We believed in big dreams in the past but we know that reality is very different. We are becoming more anxious over time. We are becoming more and more alike. There are other ways to progress other than via capitalism. Our utopia will start small and grow from there. Even though things are well, we need to constantly improve.

And the ad industry encourages us to spend money we don’t have on junk we don’t need in order to impress people we can’t stand. – Rutger Bregman

If success is a choice, then so is failure. Lost your job? You should have worked harder. Sick? You must not be leading a healthy lifestyle. Unhappy? Take a pill. – Rutger Bregman

Why We Should Give Free Money to Everyone. Feeding the homeless might be cheaper than locking them in jail or providing social services. One other way is to give them money. This is ironic, but it might work. How they spend it is up to them. The fact is that most of them were actually prudent in their spending. Some even used the money for personal growth. Giving money to them might be the most efficient way to help them. Free money doesn’t make people lazy. This has been proved by different studies. This has been proved in Namibia and Malawi. This might be superior to spending money on food etc. You have the freedom to buy want you need. This was already mentioned in Thomas More in his book in 1516. The dream is for all to have a universal basic income for everyone. Canada experimented with this idea in the 1970s. Mincome, a city in Canada, worked well under this model. There is a fear that people would be lazy if they didn’t work. There is little evidence that people would be lazy if they had a basic sum of money each month. President Nixon pushed for it in the past, but it often got rejected by the Senate. Many years back, democracy seemed a utopia, but it has worked. The benefit of giving people a basic income is that the poor can take on jobs which can give them growth. This should be the aim of capitalism.

Poverty is fundamentally about a lack of cash. It’s not about stupidity. You can’t pull yourself up by your bootstraps if you have no boots. – Joseph Hanlon

There is overwhelming evidence to suggest that the vast majority of people actually want to work, whether they need to or not. In fact, not having a job makes us deeply unhappy. – Rutger Bregman

So we have inspectors of inspectors and people making instruments for inspectors to inspect inspectors. The true business of people should be to go back to school and think about whatever it was they were thinking about before somebody came along and told them they had to earn a living. – Richard Buckminster Fuller

The End of Poverty. A new casino opened in 1997. It was Harrah’s Cherokee. It was run by Cherokee Indians. Organized crime did not increase. Those kids who grew up in poverty tended to have behavioral problems. Which was the cause, and which was the effect? Costello’s subjects who were lifted out of poverty had much lesser behavioral problems. Money from the casino earnings were given to needy families. The tribe ended up thriving after the casino earnings. Genes can’t be undone. Poverty can. Why do the poor tend to make dumb decisions? Poverty is something the individual has to overcome on their own. In economics, always everything revolves around scarcity. Poor people find food scarce, so they need to find an incredible way to make ends meet and that is a good thing. You can’t take a break from poverty. It’s all about the context. You can’t take a break from poverty, unlike a situation where you are busy at work. We all need to increase our gross domestic mental bandwidth. Getting out of poverty is more important than education. One solution is to give needy students a hand with financial aid paperwork. Does money enable you to be happy and healthy? Inequality is a big issue in modern society. Relative poverty is very important because like to compare themselves with others. Social mobility goes up when inequality goes up. Even rich people might not feel good if the inequality in their country is too high. Providing free apartments are also useful, as it helps to get homeless people off the streets. Homelessness can certainly be solved. We need to address the root cause, not the symptom.

Scarcity consumes you. You’re less able to focus on other things that are also important to you. – Eldar Shafir

The effect of poverty lowers your IQ by around 13 or 14 points. That’s comparable to losing a night’s sleep or the long term effects of alcohol. – Eldar Shafir

If you’d like to have more money, time, friends, or food, you’re more likely to experience a sense of scarcity. And the things you want are determined to a large extent by what people around you have. – Rutger Bregman

Poverty is a great enemy to human happiness; it certainly destroys liberty, and it makes some virtues impracticable, and others extremely difficult. – Samuel Johnson

The Bizarre Tale of President Nixon and His Basic Income Bill. Historians have more to give us. We should look and learn from history as much as possible. We shall look at Richard Nixon. He was forced to resign after the Watergate scandal in 1974. There were many who opposed his plan of giving free money to everyone. Anderson managed to change Nixon’s mind. The Speenhamland system failed badly in the 19th century England. Why did the President switch his mind? However, his message of wanting to fight laziness among the poor caused people to turn against the idea of basic income. Speenhamland appeared to be successful initially. In the fact, people were convinced that population growth will exceed food production. However, it was a disaster because of a few reasons. Marx believed that a revolution was needed to bring people out of poverty, not a basic income. Modern historians have realized that the results from Speenhamland might not be reliably measured. The consensus that the poor were becoming more lazy might be untrue. The Royal Commission Report changed Nixon’s decision. The truth of population growth indefinitely might not hold true. In 1834, the Speenhamland system was dismantled. The idea of a self-regulating market that will liberate the poor was still a dream. There are some scholars who believe that Speenhamland was a success. Things could have been handled so much better. The idea of a welfare state was hit badly as a result of Speenhamland. People who are poor only thing about the here and now and not the future.

The gross national product…measures everything…except that which makes life worthwhile. – Robert F. Kennedy

New Figures for a New Era. The Japan earthquake on Mar 11, 2011 wrecked havoc on the Japanese economy. However, the economy recovered miraculously fast. It had a silver lining for GDP. Rebuilding has a huge impetus for the government. However, we shouldn’t welcome these disasters. GDP does not measure the intangible benefits to society. It does not measure things like community service, clean air etc. Also, things like domestic workers are not measured in the GDP. Denmark has tried to quantify the value of breastfeeding in its GDP. GDP does not measure advances in technology. The higher the social problems, the more it will contribute to GDP. In the past, banks took up a huge slice of GDP due to their risk taking culture. Are we placing too much emphasis on GDP? Almost all politicians believe that growth is good for employment and the economy. The idea of GDP was already mooted in the 1800s. Adam Smith believed that those who worked in services industry produced nothing at all. Alfred Marshall realized that it was not so much the nature of products that mattered, but the price. However, accurate calculations on GDP only existed in the 1900s. It was essentially invented by a Russian professor named Simon Kuznets in 1932. It would be an excellent yardstick for any country. The GDP could give an overall picture of the economy. Even today, many professors do not understand how GDP works. GDP measures all the activity within its borders (including by foreign enterprises). GDP was very useful after a war. There are many other useful statistics that can serve us better than GDP. Today, the economy is so much more complicated than just some production numbers. In Bhutan, a gross national happiness index was suggested. Two possible candidates might be the Genuine Progress Indicator (GPI) or the Index of Sustainable Economic Welfare (ISEW). The wealthier a country is, the more difficult it is to measure that wealth. In Europe, the governments subsidize domains where productivity can’t be leveraged. The cost of health care is bound to increase. We will need indications to track life, eg. Community service, social cohesion, jobs, knowledge etc. We need to rethink how we relook at growth?

Productivity is for robots. Humans excel at wasting time, experimenting, playing, creating, and exploring. – Kevin Kelly


Do Over (Make Today the First Day of Your New Career) by Jon Acuff (Part 2)

Win the Way You Won Before. We have definitely picked up skills in the past. Ask yourself what skills did you learn in the past? It need not be work skills only. What were the circumstances that conspired in your favour? You might have an audience to drive your development of the skill. Sometimes, you could have been pressured by a tight deadline. Find a new crowd you share your skill with. You could devise a reward system once you have attained a particular skill. Set a countdown on your phone to motivate yourself to do something, it could be 60 minutes or something. Don’t be afraid to devise new methods in your pursuit of new skills. Learn the strategies employed in the past to help you improve and give yourself a better chance at success. Never reinvent the wheel and always learn from your past.

Kick-Start Your New Skills with Something Fun. You can learn by necessity or curiosity. Necessity are related to work skills. Curiosity is more borne out of desire. Both types of skills are important for us. A smarter approach is to start with something fun. Developing a curiosity skill is more fun and easier than a necessity skill. Keep it simple. You only need time and knowledge at the start. Time and knowledge are more accessible than money, time, gear. You can research about it for free on the Internet. You need to make time for learning your skill too. You must decide exactly when do you want to learn it. Macro means printing out next month’s calendar. You will realize that you have more time than you think. Fear likes to tell you that you don’t have enough time. Learn to utilize your time well and in a fruitful manner. The micro is exactly which days and how many hours you will use to hone your skill. What’s consuming your calendar daily? Start your day with what matters most and that will help you the most. Work on your skill before other things get in the way. Who will help you learn this new skill? Skills are no exception. It is more fun to learn with a friend. Someone should track your progress. This person should ask you for updates on a regular basis. Check in twice a week.

If you really want to learn something, you have to decide when you are going to do it. Otherwise, you dramatically reduce your odds of actually doing it. – Jon Acuff

Days are like snowballs rolling down a hill. I don’t care how perfectly you’ve planned it, something unexpected is going to get picked up as your day rolls down the slope. – Jon Acuff

An accountability partner you only contract when you are winning isn’t an accountability partner, it’s a cheerleader. – Jon Acuff

Learning a new skill doesn’t have to be miserable, especially if you start with something fun and easy. – Jon Acuff

Skills Get Sharp Slowly and Dull Quickly. Skills will go dull if not used frequently. If you are writer, you should write daily. Once you get lazy, it will be hard to kick-start the habit again. At that time, you need motivation from friends to kick you to start again. The hardest competition you’ll ever face. The key for sportsmen is to be disciplined and do the same time every day of the week, even during off season. Learn to outsmart yourself. There is a problem with first times. First times should be the worst experience. Every time you start a new job, the skills you learn in your previous job are not useless. For every repetition you make, you should lay another brick in your foundation. You work best when skills become second nature to you. This will free up brain space for other things. If you discipline your life, it creates freedom in another. For instance, you could buy many sets of the same clothing. This will help you pare down your decision making. Your career is not shampoo. Nowadays, videos are big part of blogging. You must step into the tension of skills. Some skills cannot be simply put on autopilot, but should be on fighter pilot.

The more you can turn an important skill into a repeatable habit, the more you can trust the power of autopilot. – Jon Acuff

When you refuse to practice a skill today, it makes it harder to practice it tomorrow. Weeds of fear grow stronger the longer we wait to hustle. Get in the garden today. – Jon Acuff

Grab the Right Kind of Hammer for Your Career Ceiling. Do not build your cage. When you are stuck, you can choose to accept it or change it. Your skills will help you break ceilings. The ceiling is challenging you to break through it.

The father of every good work is discontent, and its mother is diligence. – Lajos Kassak

Should you ever stay at a bad job just because other people in your field don’t have a job? What are you really saying? That until everyone in your field is employed you can’t apply somewhere else? You can’t have another job until everyone else does? That doesn’t make any sense. – Jon Acuff

We build elaborate internal campaigns justifying where we are. We trick ourselves into thinking it’s someone else’s fault or that maybe it’s not so bad. It’s not a horrible job, it’s a good-enough job. If we stay there long enough, we eventually forget that we are even allowed to change. – Jon Acuff

I can’t tell you if in ten years I will have written five more books. But I can tell you that this year I will write one. I can’t tell you if in 10 years my blog will have 5 million readers, but I can write a new post today. – Jon Acuff

Investment 3: Character. Character is who you are. Character is the reason why people will give you another opportunity if you fail the first one. It is a pre-requisite for many things to come. Everything is personal in work. Character is impossible to ignore. Character will also determine your resilience to move things forward. Start planting your orchard and be generous and empathetic. People with bad character might win, but they may not last.

A talent is formed in stillness, a character in the world’s torrent. – Johann Wolfgang Von Goethe

Plant an Orchard. Character is a slow process and takes time to build. Character is like an orchard. The trees are the character traits and the weeds threaten to destroy your orchard. Which is one character trait that you want to develop? Ask a friend if you are clueless. Trust could be something you want to work on. Take a look at your whole orchard. I was addicted to chaos and busyness. However, if you like chaos, your character falls on the wayside. Write down the jobs you’ve had. Give a brief description of your job performance. List the way you left each job. Describe the strength of the relationships you left behind. Pull the weeds as fast as you can. Narcissism is a problem. Dishonesty is a horrible weed too. Pessimism is an issue too. Pessimism can grow and it can become a problem. Apathy is a big issue as well. Apathy cripples your ability to launch a career jump.

The future is purchased by the present. – Dr. Samuel Johnson

The best time to plant a tree was 20 years ago. The second best time is now. – Old Saying

Most destructive of all is that apathy cripples your ability to launch a career jump. No one who is apathetic has the energy or heart to try a positive, voluntary career transition. That entire quadrant is off the table when weeds like this have grown in your orchard. – Jon Acuff

Generosity is a Game Changer. We need to be generous as it can help us greatly in our careers. It helps to breed loyalty. People will support you if you have helped them before. Do not hesitate or hold back. Greed will cost you more than you think. Generosity is always cheaper than greed. Your generosity will pay dividends. It is for long term benefits. If you find that people are exploiting you, make sure you don’t have an itchy trigger finger. Learn to draw some boundaries. You can let the person learn from a painful experience. The worst case is to avoid them. Make your definition of generosity bigger. You can be generous with your time and skills. Ideally, you should be able to do something you are good at.

Service is renewing. When we serve, our work itself will sustain us. – Rachel Naomi Remen

Before you make a Career Jump give generously of your time, talent and resources without keeping score. If you keep a record of who you’ve been generous to with the expectation that they’ll return the favor, you’ll build transactions not relationships. – Jon Acuff

Empathy, No Longer Just for People Who Like to Cry with Friends. You need to navigate with empathy. It means understanding someone else’s needs and acting on them. Most people are the same and they all have hopes, fears, dreams, frustrations. Having empathy allows to work with just about anyone. If you have empathy, you can do sales and sell stuff. Take time to know someone’s real story. You will understand that they might have undergone to get to where they are. Compassion is important. Fear is an amazing storyteller. Care about what the people you care about care about. Character is an orchard, it changes over time. You don’t have to quit your job to engage in a career jump, but you can do something positive and voluntary. Read less minds, ask more questions. Instead of guessing, learn to ask them directly. Simply showing up shows empathy. It doesn’t have to be big actions. Make people bigger. Ask questions to your colleagues like ‘What can I do to make you look like a rock star to your manager?’ Put someone’s needs ahead of your own. What to do when empathy is broken. Be honest and admit you were wrong sometimes.

Everybody has a story. When we don’t take the time to know someone’s story or worse, create our own version of it, we lose the chance to understand what they need, which is the first step to empathy. – Jon Acuff

Be Present. Showing up at your job is important. You have to deal with your phone, your computer, and your meetings. We use our phones way too often. If you are not present, your relationships might be threatened. When you use your phone, you are putting other people on pause. Be present with your computer. People might surf the Internet at work in their free time. We are all guilty of it. Do work while you’re at work. Be present in meetings. Learn to take notes. It is easier to hide behind a laptop by being old fashioned and taking down notes is easier. Ask at least one question during the meeting will help you to stay engaged. Turn your phone upside down. You could just not bring your phone to the meeting or something.

Never Jump without Character. You need character when you decide to chase a dream. Character helps you navigate through chaos of change. You can always rely on your character. You can’t completely eliminate chaos from your life. Over time, you get used to living with chaos. It’s time to hustle.

Investment: Hustle. We are more capable than we think. Hustle means hard work. It helps you to build on relationships, skills and your character. You don’t get anywhere without hard work. There is a thin line between hustle and hassle. Use grit, awareness and flexibility.

‘Music is in the piano only when it is played.’ Jack Gilbert

Grit is a Choice, Not a Feeling. You will feel a sense of apathy if you have given up on your dream. Grit is not fun or easy. You might have to stay up late to work hard etc. It can be ugly and messy. However, grit is a choice. You might ask, what if I don’t have what it takes? You don’t need some ultimate goal to work on Do Over. Fear will always discourage you from working hard and acting on your goal. Tell yourself that you have what it takes to try. We all get to try. What if I pick the wrong thing to hustle on and miss my opportunity? The thing about life is that you will have many opportunities that will come your way. Therefore, do not apply the once-in-a-lifetime label to things you face. Regret is much worse than fear. Which would you rather choose, fear or regret? Make grit decisions. Give your hustle some time to succeed. Counsel and lean on your relationships. Ask for awesome opportunities. Give yourself permission to be kind. Be honest to yourself. Build a grit list. It’s like running, I don’t like it but I put in on my Grid List due to the benefits I derive from it. Go with grit, don’t be most people. Don’t wait until you feel brave to hustle, choose to hustle until you feel brave.

I didn’t want to be selling insurance at 40, wondering what it would have been like to do stand-up. – Steven Wright, Comedian

If you’re going to make new relationships, you need to have grit. If you’re going to learn new skills, you need to have grit. If you’re going to have strong character, you need to have grit. If you’re going to hustle, you need to have grit. – Jon Acuff

There’s no such thing as a perfect job. There’s no job where you get to do only the things you love doing. Those don’t exist. – Jon Acuff

There will be tasks, projects and activities you have to do in your career that you hate. No matter which stage you’re in, you’ll have to do some things you don’t love. That’s why we all need a Grid List, a short list of the skills we grit our teeth and do regardless of how we feel. – Jon Acuff

Hustle Has Seasons: Use Awareness to Recognize Them. Do not try to hustle at wrong points of your life. For instance, do not hustle on a holiday as you will not feel rested or recharged. You need to ask ‘what season am I in?’ Learn to focus. Hustle is a scalpel. Doing more action might not be the solution all the time. Do not hustle too much that you neglect your family etc. Instead of blaming your boss or colleagues, ask yourself ‘Did I expect this job to be something it never would be?’ It does not mean you are a failure. It just meets that you just took a wrong path and need to find a new one. Keep your head down and hustle on your work.

Be proactive about doing that in your own life. Work on your sense of awareness. Don’t wait for someone you love to call you out. – Jon Acuff

You don’t have to know the exact path, because nobody does, but are you roughly headed in the right direction? If you want to be a musician and you’re a pharmaceutical rep working 70 hours a week, not playing any music, stop kidding yourself. That path doesn’t lead to music. – Jon Acuff

Career Yoga. You need to spend time planning your day. Things rarely go according to plan. Hustling with flexibility is the best, as it leads to less disappointment. Be flexible with your dream. The work you end up loving might not even exist yet. You have to flexible about what you study as well. Your dream will change over your lifetime. Be flexible with your definition of success. Let new be different, not old. Humans love to idealize your past when our present doesn’t meet our expectations. Have fun storming the castle. Having fun is important as it helps you to get going and to push on. Having fun helps you to prevent burnout.

Always Use This to Multiply the Moment. Hustle offers you unexpected opportunities. Overcome your fear and learn to speak to a crowd. Say yes to small opportunities and learn to build from there.

Let no one be deluded that a knowledge of the path can substitute for putting one foot in front of the other. – Mary Caroline Richards

Hustle works those two ways. You hustle hard to stir up more opportunities. And then when you have one, you hustle hard to blow it up as large as it can possibly be. – Jon Acuff

Three Final Words You’ll Tell Me Someday Soon. Work can be more meaningful than we think. We have to change ourselves. We don’t get to pick a transition permanently. Your work is a lifestyle. Anyone can have a Career Do Over.

O you who sit over your full cup and do not drink, tell me, for whom are you still waiting? – Hermann Hesse


Do Over (Make Today the First Day of Your New Career) by Jon Acuff (Part 1)

The Career Savings Account

You control more of your career than you think. You need to rescue and look forward to Monday. A better job begins with building a better you. This book is about building a career. Career ceilings are problems and also retrenchment is one of them. In some jobs, you know when you hit a ceiling and can’t go higher anymore. There are a few options: 1) find another job; 2) Do a job you didn’t want to do; 3) Suck it up over 30 years. Over 70% of the people felt disengaged with their jobs. Learn to embrace career transitions. How do we make career jumps, navigate career bumps, break through career ceilings, make the most of unexpected career opportunities? Learn to build a career savings account. You must keep making deposits into your career savings account. Relationships + Skills + Character X Hustle = Career Savings Account. Relationships are the people you know, skills are the things you do, character is who you are, hustle is how you work. You should have all 4 of them. Most people only work jobs, not build careers. Most people do not have anyone to turn to for career advice once they are in a rut. There are only 4 possible types of career transitions around. Some are voluntary while some are involuntary actions. When you are stuck on a career ceiling, skills will help you breakthrough. When you want to do a career jump and gain progression, your character is the most important investment. Great lives are rarely created in great comfort. Most people are afraid of the unknown. It is never too late to do a do over. It’s time to DO a Do Over.

We eat at TGI Fridays not TGI Mondays. We live for the weekends because we’ve accepted that the weekdays are where dreams go to die. Poke your head up if you’re reading this book at work. – Jon Acuff

Do This First. Fear and complacency are things we need to overcome. Choose your attitude and adjust your expectations. Don’t listen to feelings, but rather, learn to make choices. Adjust your expectations and write down what you see in a job. However, do not completely eliminate them, rather, you can adjust them.

Tomorrow at work, choose to have a good attitude. Choose not to be cynical. Choose not to act like you’re doing them a favor by showing up. Choose not to complain. Choose to cheer for the accomplishments of your co-workers. Choose to treat customers like superstars. – Jon Acuff

Relationships. Finding good people is the key for a successful business. Skills can be judged on a resume, but attitude can’t be judged. Therefore, relationships get you the first gig. During career setbacks, relationships help you too. This book provides some tips on how to strengthen relationships.

You Don’t Know Who You Know. People hate change. Most people despise networking. However, we acknowledge the importance of networking. Who is someone you can turn to for help with your career Do Over? Use note cards. Writing stimulates information retention. Please buy them. It’s okay if you don’t know what to do with your life. Find an accountability partner to monitor your progress on a skill. Answer the question ‘Who do I know that is wise about career issues?’ Answer the question ‘Who have I worked with?’ Answer the question ‘Who do I know that is influential?’ Answer the question ‘Who do I know that owns a business?’ Answer the question ‘Who do I follow online that is in my desired career space?’ Answer the question ‘What casual relationships am I forgetting that might have a career impact?’ Always remember that you don’t know who you know unless you spend deliberate time focusing on your relationships.

It’s better to hang out with people better than you. Pick out associates whose behavior is better than yours and you’ll drift in that direction. – Warren Buffett

Dentists say, “Only floss the teeth you want to keep.” The same is true of career relationships; only invest in the ones you want to keep. – Jon Acuff

Gives Your Foes What They Need Most. You must know what type of relationship you want to develop. You could meet foes along the way, these people are against your dream. They do not support your dreams. Friend is someone who will cheer you along. Advocate is someone who is significant in helping you shape your career. Start to label your friends in the different categories. How do you deal with your foes? This category doesn’t matter and your best bet is to ignore them. There is a difference between an idiot and a foe. Shrink your definition of the word ‘foe’. Don’t search for foes. That’s your best solution. Compare the Internet to Real Life. People are often critics only online and they do not like to criticize in real life. If you have such people, distance yourself from them. Stop hanging out with lobsters. Lobsters just want to make others feel miserable. Distance yourself from them. How do you deal with bad bosses? The first you can do is to improve your work performance to see if it improves your relationship. Admit you’re an employee. Turn the frustration of working under a bad boss into fuel. Your boss is essentially saying ‘I dare you to get a better job’.

One of the easiest and fastest ways to turn an accomplice into a friend is to simply tell your accomplice what you are working on. Most of the time just the act of telling someone what you are trying to do with your life changes things. – Jon Acuff

Sometimes, people who hate on your dream aren’t really mad about your dream. They’re mad because you’re making them jealous. – Jon Acuff

You can’t change someone, but you can impact a work relationship sometimes if you improve your work performance. – Jon Acuff

Casual Counts. Casual friends count too and you never know when they might be able to help you. You need to have a massive collection of these people. Throw as many boomerangs as possible. If you are lucky, one might come back into your life with a work opportunity. Use social media to connect with people whom you haven’t kept in touch. You should try to do some casual relationships. I hate asking people for help. Most successful people didn’t accomplish everything alone. We have to give the casual relationship information. If you’re looking for a new job, tell them that. Start with a small table. Say things like ‘it was wonderful seeing you tonight’. You need to find a table. Put a big table in your house and invite people over for dinner. You need to be a little brave and desperate for community. This is how friendships start. Find a table first. Make new casual relationships on purpose. Casual means deliberate. It’s impossible to predict whether someone can work with you at the start. Be a first responder and do not sit on emails for days. Don’t ignore people and pick up on the first ring. Learn to own the inconvenience. Increase the frequency of your interactions with these casual acquaintances. Friendships built on selfishness never work out. Increase the frequency you see them on their terms, not yours. Own the inconvenience.

Casual relationships run on (and deepen) based on your willingness to share information. – Jon Acuff

If people don’t know you need help, they can’t help you. – Jon Acuff

Whether you’re chasing a new dream or trying to climb the ladder at work, casual relationships won’t know how to help us unless we ask for help. – Jon Acuff

Great Career Take Great Advocates. Not all your friends can give you good advice. There are 3 characteristics that advocates must have. They have to be brave and to tell you the truth, even though it hurts. They have to be respected. They also have to be trustworthy. Cheat Codes make the game a lot easier. They will tell you shortcuts which actually work. However, you must be willing to listen to them. What do career advocates need from us? What’s in it for them? Expand your definition of the word ‘expert’. There are generally 3 types of expertise: Industry, life and You. A best friend can be an advocate too. Advocate is like a mentor and the advice mostly goes one way only. An advocate must be someone smarter than you. Join people in your profession and ask for advice. Know other people in similar firms. You might also build some long-distance advocates or heroes you have read about in books.

It’s one of my theories that when people give you advice, they’re really just talking to themselves in the past. – Steve Garguilo

An advocate is only as good as the amount of access you are willing to give them into your life. The best advocate for your career can’t do anything if you stay surface level with them. – Jon Acuff

Don’t Burn Many Bridges. Sometimes, it is inevitable. However, do not burn many bridges as it might haunt you. Boomerangs will return, even bad ones. The fewer you burn, the better. Do you form hate clubs about people you don’t like. Sometimes, stupid people can be your boss also. Leave Jobs with your thumb raised. Do not raise your middle finger as the experience is not worth it at all. Keep your matches away from digital bridges too. Don’t do social media gloating. Apologize if you have to. Your industry is smaller than you think. Treat everyone like you’ll work with them again someday.

It is seldom indeed that one parts on good terms, because if one where on good terms one would not part. – Marcel Proust

I’m not asking you to be fake and give long, deep hugs to people who spent the previous day verbally assaulting you. – Jon Acuff

If you currently have a job, do not go online and criticize the company you work for. – Jon Acuff

Community Shines Brightest in the Darkness of a Career Bump. There are only 4 things which can happen: 1) career ceilings; 2) career jumps; 3) career opportunities; 4) career bumps. Relationships will pick you up. Friends will be there to help you. Rock Bottom is a Trampoline. Sometimes, you will spring back into life, just like that. A career bump will rock your boat and it will reveal who are your true friends. We need friends and advocates.

Investment 2: Skills. Relationships get you the first gig, skills get you the second. However, if you have no skills, you sink. The difference between an amateur and expert are skills. They give purpose for life. Skills are ability and provide you with natural talents. Old dogs can learn new skills. Your skills can come in handy. Skills are the key to getting unstuck.

Everybody wants to be somebody: Nobody wants to grow. – Johann Wolfgang Von Goethe

Once you have skills, they are yours forever. No one can take that skill away from you. When you leave a job, the skills you learned there leave with you. You must keep them sharp, but a skill you put in the Career Savings Account stays there. – Jon Acuff

You Have More Skills than You Think. Most people claim they don’t have many skills. This is because they are just things you do, but you don’t classify. Get more skills. You should write down a list of current skills. Write down ideas. Look for patterns. Ask what are you good at. Do not be humble. It could be personal skills as well, need not be work-related skills. Ask yourself what comes naturally? Write down ‘what do people pay me to do?’ Write down ‘what are you afraid of?’ Write down ‘If you wrote an eBook, what would the topic be?’ Bring the cards along with you. If you do not know what your skills are, ask a friend for advice. You need to be aware of the skills you might want to acquire.

Whether you want to get better at your current job or find a new one, chances are you will need new skills. – Jon Acuff

Somewhere on the road to adulthood we decided that dreams were dumb. We stopped wanting to be firemen and astronauts and settled for stuck and predictable. We accepted the lie that Monday must be boring. – Jon Acuff

Master the Invisible Skills. Everything is a skill, everything you do at work is a skill. Communication, fixing paper jams are all skills. The small things add up. The small skills do not seem flashy. You just need some tweaks to be great at them. Many people miss these invisible skills and overlook them. Going to work is a skill as it shows that absenteeism is not value highly by employees. Go to work and go on time. You will already be better off than others who don’t show up at work. Learn to add value. In every job, there must be something that you do which adds value. Ask yourself what is the currency of your company. How does what you do add to your company’s mission? You can tell your boss: ‘I’ve been thinking a lot about the best ways for me to continually add value to this company. I’d love to hear your thoughts on how I can do that.’ Employees must add value. Own your attitude. It is not the employers’ job to fulfil your career desires. When you have a bad attitude, it shows. It’s your job to enjoy work, not your employer. Attitude is a decision you choose on a daily basis. Express gratefulness. Show consideration for others. Focus on what matters. Play to your strengths and everyone else’s. Learn to be flexible. Respect their gear. Continue with your education and learn more. If the company wants to train you, you should be grateful.

The goal of your first job is to teach you how to have a job. – Jon Acuff

Over and over again, career experts bemoaned the fact that employees who don’t show up to work get fired. – Jon Acuff

Attitude is a skill. It can be changed. It can be improved and it starts with owning it. You determine your attitude, not your day, not a job, not a situation. You. Own it. – Jon Acuff

If you need more to do, find more work to do. Finishing the work your boss thought would take you 40 hours in only 25 hours doesn’t mean you’ve just earned an extra 15 hours of me time that week. – Jon Acuff

Never Become a Dinosaur. There are people who don’t love to learn new skills. With technological advances, skills are important. If you don’t have them, you are a dinosaur. Your skills can get obsolete quickly if you are not careful. Old skills might not work all the time. New skills open the doors to wonderful opportunities. It will value-add to your resume. Sign up for classes is also a signal to your boss that you care about the job. Passion won’t show up from nowhere. You won’t find calling out of nowhere. There are hassles with learning something new. It’s not easy but you can pretend to be a tourist in a new country and ask a lot of questions to find out more. If you want a Do Over, you have to pick up new skills. It’s hard to get stuck in your old ways when you prioritize learning new skills.

I like being a beginner. I like the moment when I look at everyone and say, “I have no idea how to do this, let’s figure it out.” – Jon Acuff

If we all don’t want to become dinosaurs, bemoaning the good ol’ days, we have to stay current. We have to stay relevant. We have to stay employable and the best way to do that is by learning new skills. – Jon Acuff

New jobs always require learning new skills, even if that just means learning a different way a new company prefers to do something. – Jon Acuff

Learning a new skill can reveal a new dream. How can you know you love doing something if you don’t try it? – Jon Acuff


Anti-Money Laundering in a Nutshell by Kevin Sullivan

Awareness and Compliance for Financial Personnel and Business

Many AML personnel like to check and select a box without understanding why. You need to understand the nomenclature of AML. Understand what is causing alerts in the AML system. It is crucial to understand the Bank Secrecy Act. The major players are the financial institutions, the regulators and law enforcement. These players need to work together in a dynamic environment.

What is Money Laundering?

Laundering is a method of ‘cleaning’ the funds so that it would not appear to be suspicious. The gangsters created businesses like Laundromats so as to ‘gamble’ and to ‘wash clothes’. This was to avoid suspicion as to how the funds came about. This term has been around since the beginning of the 20th century. Why does a bad guy need to do it in the first place? If you have drivers who are paid to carry suitcases from one vehicle to another without knowing what is in the suitcase, chances are that it is hard to prosecute such people. These are known as mules. The trick is to employ the mules without them knowing what is going on. So when they get caught, they have little they know which they can reveal. AML is often very tactical and you may not know that it is happening. The industry is suspected to be about US $2 billion a year. In early stages, it is difficult to tell whether the source is for tax evasion, funding for terrorists etc. The aim is to ‘clean’ the source and make it appear legitimate. This could be done via ‘smoke screen’ transactions. Banks will perform due diligence on its customers, such as examining transaction timelines and transaction activity compared with similar businesses out there. There needs to be a predicate offense to initiate an AML case. The 3 stages are (1) placement; (2) layering; (3) integration. Placement is the act of talking bulk cash proceeds and bring it to a bank. This isn’t easy. Carrying a wheelbarrow of cash isn’t a good idea. The right way is to use a small denominations and use a business vehicle that is reliant on cash. However, law enforcement requires suspicious activity reports, currency transaction and cross-border declaration rules. Layering is where the launderer needs to make many small transactions. This is to avoid people from tracking him. One way is to use shell companies or move the money to other jurisdictions. Another way is to buy large value items and then sell them subsequently. Transactions above $10,000 must be reported to the Treasury Department. FATF has created an AML template to follow. If law enforcement wants information from a bank, they will need to send a subpoena. However, this requires time and the money might have been moved away already. Integration is where the funds are assimilated into the financial system. This is hooray for the launderer. Launderers often engage in transactions which are less than $10,000 at one go. Greed is a common cause of laundering. Terrorism is a possible cause as weapons cost money. Lastly, some criminals have an unbalanced mind. Every part of the AML team is important and plays a defined role.

Money laundering is the practice of integrating the proceeds of crime into the legitimate mainstream of the financial community by concealing its origin. – Kevin Sullivan

Methods of Money Laundering. There are only 3 ways: (1) through the legitimate financial system; (2) physically moving the money; (3) physically moving goods. For the first way, structuring deposits over a period of days, with each less than $10,000, is an example. One could hire other people to make deposits through different bank branches but to the same account. This is known as ‘smurfing’. Another way could be bringing the cash off shore into a country with strong secrecy laws. Cash can be hidden in funny places and then smuggled out. Domestic wire transfers are a type of means too. Gold is a method of laundering, and so are money service businesses (US Postal Service). Common money transfers are made through western union, Amex etc. For MSB, customer anonymity is usually maintained. However, MSBs are required to report suspicious transactions to the Treasury department recently. Records of wire transfers must be maintained for transactions above $3k. It is generally more difficult to track cash in a country with strong banking secrecy laws. SWIFT is the international message service that FIs use to send their messages for wire transfers. For SWIFT, you need to provide information like the International Bank Account Number (IBAN). SWIFT is the system that allows the transfer and transmits information signifying the transfer of funds. There are many fields of information required before a wire transfer can take place. Casinos are a way of laundering money. Casinos are required to file currency transaction reports. However, casinos have brushed up their AML programs in recent years. There are 3 methods of trade-based money laundering: 1) over and under-invoicing; 2) black market peso exchange (commonly used); 3) hawala (underground banking system). Hawala has no regulatory requirements and is ethnic in nature. In addition, there are no money trails available. Understand the red-flags of money laundering. Always ask for documentation, and use authentication when dealing with third parties. Cyber banking via the Internet is getting more common. Some cyber banks do exist. However, note that they do not have deposit protection and that once the bank folds, your funds are gone. A launderer can lease ATMs to other people and they will in-turn lease to others. This reduces the level of due diligence that is applied on them. Most pre-paid cards do not require identification and launderers can maintain anonymity. This is a viable way for launderers, although it is slow. Vehicles are often purchased in the integration phase of AML. It is difficult to launder money using credit cards. Laundering via purchase of real estates is getting more common. For LLC, it is difficult to determine who the beneficial owner is as an LLC can be owned by sub-LLCs, which in turn might be owned by sub-sub-LLCs. For a cash intense business, laundering can be easy as once the dirty money is comingled with clean money, it is difficult to trace. Life insurance products can be bought using dirty money and then cashed out prematurely. Digital currency is a big thing and can be manipulated by launderers. They are not regulated and depositors can maintain anonymity. There are a huge variety of ways in which money can be laundered. As long as there is crime, there is a need for AML personnel.

Federal Regulations – The Laws, Rules, and Guidelines to Fight the Good Fight. We need to stop bad guys from laundering money. The Bank Secrecy Act requires FIs to keep AML programs. There are many legal tools in the fight against AML nowadays. Any cash transaction via an FI exceeding $10,000 must be reported on a currency transaction report (CTR). This must be filed with the FinCEN. There is also a need to maintain a suspicious activity report. If the cash or bearer instruments are brought out of the US, a report needs to be filled as well. Wire transfers are not under the CTR scope. A CTR is important in the investigation. In some countries, their limit is $15,000. For non-FIs, cash transactions more than $10,000 need to be keyed into the 8300. It is a crime under the Money Laundering Control Act to further criminal activity, conceal ownership of property etc. The Financial Crimes Enforcement Network (FinCEN) was launched in 1990. The Annunzio-Wylie Act in 1992 requires banks to complete and report a suspicious activity report (SAR). Several high-risk geographical areas were identified as ‘high-intensity financial crime areas’. The Patriot Act in 2001 gives Treasure the power to deal with US FIs for foreign AM. Enhanced due diligence for correspondent accounts that are maintained for certain foreign banks must be instituted. Banks should share information on terrorism and money laundering with one another. For KYCs, comparisons must be made with known or suspected terrorist or terrorist organizations generated by government agencies. FATCA helps combat tax evasion by US taxpayers who have assets outside the US. The next chapter will discuss on how to build an AML program.

Build a Quality AML Program. Sometimes, AML falls under the Compliance Unit. FIs may hate regulators because of too much regulation. Regulators will say that there are not enough regulations and that FIs compliance unit must be beefed up. Regulators have power to sanction your organization if you are not performing well. Once something bad happens, heads will roll. Fines can be heavy and banks should never try to cut corners. Regulators can only conduct random inspections on the bank. Law enforcement can make recommendations. An AML systems need to achieve 1) prevent money laundering and terrorist financing; 2) to report suspicious activity; 3) to train all personnel on legal and internal procedures. Educate staff on the importance of AML. Compliance training is important and it should be on-going in nature. Internal procedures must document risk and the controls to mitigate risks. It should document due diligence checks. KYC guidelines must be established. Policies must be put in writing and cannot be documented in the head. Policies must also be approved by the board. Policies should be updated on a yearly basis and there should be documentation on what triggers alerts in transaction monitoring. An organization must have a designated compliance officer. There needs to be a process to update the regulations and the training programme must be addressed. An independent audit should be performed on the AML system. High-risk accounts must be reviewed thoroughly. All employees must be trained in AML. Training should be conducted annually. It should cover all pertinent regulations. Identify the risk, which can be customer related or issue-related risks. Risks analysis, management and risk review needs to be conducted. Risks can include product risk, legal entity, business type, country risk etc. For high risk clients, increased level of due diligence and monitoring needs to be instituted. High customer risks include foreign FIs, PEPs, foreign corporations, shell-companies etc. High product risks include trade finance, private banking, electronic funds transfer, lending etc. High geographic risks include any OFAC sanctioned country, jurisdictions of primary money-laundering concern, offshore financial centres etc.

AML is not an income-generating component of the institution. An AML unit can be quite expensive, and, in and of itself, there is no return on investment. Hence, that alone is reason for some FIs to be hesitant to invest and develop a compliance unit any more than the bare minimum. – Kevin Sullivan

KYC and Customer Identification Program. The terms can be used interchangeably. It means identifying your customer, monitor his transactions and update his files. These pieces of information must be reviewed too. Customer identification is the first step, followed by KYC. KYC must be done at the onset of the customer relationship. The officer needs to verify the identity of the person and maintain records of his identity. Documentation as to what type of records will suffice should be written too. Account Opening documentation must be kept and maintained. Be wary of shell companies. OFAC maintains a free list of names, entities that have been sanctioned. The transaction monitoring unit will clear the alert and see if the risk can be accepted. A due diligence actually means a background investigation. Basic due diligence is needed in order to satisfy the regulations. EDD is usually needed for high risk customers. A checklist should be used for Due Diligence. Evidence must be collated. Documentation is important when it comes to an investigation. KPIs should not be set on how cases per day etc. Do not put a time clock on investigation. Never put time limits on AML investigation. If you outsource your DD, you should have thorough oversight on the vendor. Some banks might outsource this to third world countries. Sometimes, when there is a material change in customer information, an EDD is required. The good guy may not be able to catch the bad guy because the good guy only studies problems which are already known. Trust your gut. Cultivate an investigative mind by learning to ask why. When you sense something is not right, please ask why. Keep abreast with the latest industry developments. Make use of new sources and technology. Justify, articulate and define everything. Learn to create risk-based due diligence. It is very important to ask ‘where is the source of funds?’ Risk ratings might vary over time. If the customer is too high risk, it is advisable not to deal with him/her. Learn to allocate a risk scoring methodology. Gather intelligence sources and check against that. Obtain public records. You can even pay for certain databases. It is important to purchase good transaction monitoring software. If you clear it in the system, there needs to be a reason for it. Ensure that the system is not generating too many false positives. Understand your correspondent bank’s AML processes. You have to trust that they have performed the DD work. PEPs can be a senior political figure, a member of his immediate family, or a close associate. Understand some of the KYC red flags.

If you think it stinks, it probably does. You do this job every day, and you work with people who do this job every day. If for some reason the hair on the back of your neck stands up, then go with the feeling. – Kevin Sullivan

A Suspicious Activity Report (SAR) is born. Some banks file more than necessary to avoid being questioned by regulators. The FFIEC prescribes standards for supervision of financial institutions. Writing a complete SAR is very important. How do you identify what is suspicious? When should you file an SAR? Sometimes, the system can help you flag out suspicious cases based on set criteria. The amount of the transaction doesn’t really matter. There are 30/60/90 filings. SAR must be reviewed before they are sent to FinCEN. There is also a narrative that must be written when the SAR is filed. Be short and brief. Don’t leave blank boxes. Use language that people can understand. The auditor will hammer you if you are supposed to file but failed to. Law enforcement will pick particular SARs of interest for further checking. Law enforcements usually need subpoenas before they can request for information. FinCEN will compile statistics of SARs. It is useful to understand trend analysis.

Tips for Law Enforcement and Financial Crimes Investigators. Profit is an essential aspect of most crimes. This chapter is dedicated to the law enforcement investigator and the FI investigation team. An individual does not need a CPA to perform an investigation. Law enforcement personnel need to have the right training to perform their role well. The compliance unit of the bank will be involved. The investigator should talk to the law enforcement agency. There are numerous regulators for the different types of FIs. FIs take regulators seriously. Law enforcement look out for criminal activity while regulators look at whether the guidelines and standards are being adhered to. Some of the regulators are the SEC, Securities Exchange Commission, Federal Reserve bank etc. Not all law enforcement agencies have access to the FinCEN portal to view SARs. SARs help provide leads for law enforcement agencies. SARs are confidential and information should not be simply shared around unnecessarily. You may be able to obtain KYC documents from the bank. Most of us do not think like bad guys. Once a bad guy using a fictitious ID, it can foil your plans dramatically. Explore the internet for possible sources of new information. Use your instincts. Always learn to be suspicious. Discover the facts as best as possible. If your hair at the back of your neck stands, it probably means something is wrong. Consider different type of hypotheses. Read the Association of Certified Fraud Examiners (ACFE). Learn to invest in your career and develop your career. Don’t be afraid to spend money and time on educating yourself. Financial crimes are growing.

The Importance of a Global Approach to Money Laundering. Many crimes are transnational nowadays. Money laundering is an issue that affects everyone. The FATF consists of many member countries. There is also the Basel Committee on Banking Supervision. Wolfsberg helps to develop and shape guidelines for banks and regulators. The IMF has also been incorporating AML concepts into its procedures.

The New Financial Crime Model. You can contact law enforcement immediately after you file an SAR. There is an increasing trend of fraud and AML units combining and joining forces. Fraud and AML personnel should be cross-trained. However, do take note of the confidentiality requirement of the cases. 95% of all criminal activity is committed because of greed. There are various ways in which a fraud can be conducted. Please understand the red flags for AML cases.

handcuffs money

Originals (How Non-Conformists Move the World) by Adam Grant

Adam Grant is an original. He is a researcher. In this book, it will show that anyone can be a creator and have brilliant ideas. Procrastination can have its benefits too. The book will convince you that every individual can make a difference. Adam believes strongly in gender equality. He is also a patient man who is able to care deeply for others.

Creative Destruction. A group of students wanted to topple the market leader, Luxottica, in eyewear. It was a massive task. They sold theirs online and donated a pair to someone in the developing world with every purchase. Their website was named Warby Parker. Now, their company is valued at over $1 billion. They had immerse courage to go against the grain and create something original. Nothing is truly ‘original’. They made glasses accessible and affordable online. Why were Firefox and Chrome users more committed in their work than Internet Explorer users? The issue was that they had to download it as it was not available with a new PC. This proved that these users took initiatives in their work. They were those who sought novel solutions to problems at work. Many accept the default state of life. Some people justify the status quo to be the best, even those it might work against their interests. The key to be creative is to reject the default and explore a different option. Learn to question the status quo. Luxottica was charging a lot because of their monopoly status. Child prodigies’ career doesn’t often live up to their potential. This is because they usually go against the grain. They do not learn to be original. Sometimes, it is those people who have done bad who are the most creative as they set their own rules. Many prodigies choose to play it safe. Many of America’s early politicians were revolutionaries in their own way. Many of the famous people gave up their dreams of a secure life to do something extraordinary. Many people fear speaking up for fear of being judged. Many of us choose to fit in rather than stand out. The key is to take radical risks. We often feel that famous people are talented or have better genes. They are somehow programmed differently. I was hesitant about the business model of selling spectacles online. They didn’t seem to fit my model of a successful entrepreneur. They didn’t seem committed enough. These people are actually very human after all. If you hold on to a full time job and start something on the side, you are far unsure of yourself. However, the results showed that those who kept day jobs had 33% lower odds of failure than those who quit. You cannot simply gamble. It is not bad to stay in your current day job. Originals like to play it safe sometimes. Is it wise to risk it all? Successful people balance risks and do not go all out. It is like diversification of risks to reduce overall portfolio risk. Therefore, having stability in other aspects of your life are important. Having financial stability is very important. You must be able to fall back on something. The key is to take extreme risks on either sides. Risk mitigation is the key. The group of guys did market research to understand demand before embarking on their business. Entrepreneurs are actually risk-averse people deep down. They are smart and avoid dangerous risks. They do not leap before they look. Originality is a free choice which we can all exercise. Many of the limits at work are due to your own making. How do you champion an idea successfully? It is not always the wisest to be the first mover and there is value in procrastination. Champions of originality are those that propel humanity forward. Taking action is the key.

The reasonable man adapts himself to the world; the unreasonable one persists in trying to adapt the world to himself. Therefore all progress depends on the unreasonable man. – George Bernard Shaw

Once people pass an intermediate level in the need to achieve, there is evidence that they actually become less creative. – Todd Lubart/Robert Sternberg

Although we may not all aspire to start our own companies, create a masterpiece, transform Western thought, or lead a civil rights movement, we do have ideas for improving our workplaces, schools, and communities. Sadly, many of us hesitate to take action to promote these ideas. – Adam Grant

No person could possibly be original in one area unless he were possessed of the emotional and social stability that comes from fixed attitudes in all areas other than the one in which he is being original. – Edwin Land

Blind Inventors and One-Eyed Investors. Segway was one of best tech flops. Idea generation is usually not the big issue. The big issue is idea selection. Seinfeld turned out to be an unexpected success. How can you pick the right idea from a crowd? Dean Kamen invented the Segway. He was a genius who also invented many other products. He predicted that it would revolutionize the transportation mode. However, it is known that people tend to be overconfident when evaluating themselves. It is difficult for creative people to take criticism. They rely on confirmation bias. Creative people tend to be the best judges of the quality of their ideas. The trick is to come up with a huge number of ideas. If you do this, you will find some hits and misses. The more you produce, the greater the chance of a hit emerging. Many of Einstein’s 248 publications had little impact under that the one on general and special relativity. Thomas Edison filed thousands of patents. Your first ideas are usually too similar to the conventional ones. Headline #25 will usually be the one that makes it big. Dean settled on Segway without exploring many other options. Learn to get feedback in any way you can for your ideas. Dean didn’t obtain enough feedback on the potential of Segway. There was nothing like Seinfeld ever on TV. We tend to reject novelty on first impression and in uncertainty. People tend to compare what has been produced with what has produced in the past. Audiences generally do not respond to things that are new or different. However, peer evaluation is much more accurate than focus groups. You get other creative people to provide feedback. However, they mustn’t be related to your project or it won’t work. To gain your admiration of your peers is a huge boost. Managers tend to have an evaluation and judging mindset right from the start. Learn to be accustomed to different experiences so that you will be more receptive to different ideas. Broad and deep experience is the key. Creative people in various fields then to be into the arts industry as well. If you are well versed in certain fields, you must be able to bring connections together. Working abroad matters and it can certainly hone your creativity juices. You also need to work abroad for a substantial period of time. Steve Jobs often made bets based on intuition. He was wrong about the Segway. He didn’t have any knowledge in transportation. There were critics of the Segway and these people were eventually proven right. Intuition only works in a predictable environment. Steve Jobs was caught in one of his success trap. Some people might be impressed by a sales pitch and rely on intuition and agree to invest in that person’s products. Some people are better at inventing than running a business. It is important to analyze a person’s actions rather than just what he says.

The most important possible thing you could do is do a lot of work. Do a huge volume of work. – Ira Glass

It’s widely assumed that there’s a tradeoff between quantity and quality – if you want to do better work, you have to do less of it – but this turns out to be false. In fact, when it comes to idea generation, quantity is the most predictable path to quality. – Adam Grant

Out on a Limb. There was a delay in issuing intelligence reports and the information was not relevant once it was released. Medina proposed a new system which was very helpful. She suggested that they use Intranet. The problem was that electronic communication wasn’t very secure. Everyone ignored her suggestion. She spoke out too much and was forced to leave. Later, she created Intellipedia. It was a platform for different agencies to access each others’ knowledge. It is necessary to speak up credibly in order to gain people’s respect. When should you speak up? It is important not to jeopardize your career and relationships. How can we reduce the risks of speaking up? Research shows that speaking up can be detrimental if not done properly. If you exercise power without having status, you tend to be punished. If you know that you aren’t respect, you tend to treat others worse than usual. Status must be earned or granted. The trick is to try to earn status. Dressing differently can gain you more respect. She built some rebels within the organization as well. Understand what the sarick effect is. Sometimes, you should state the reasons why others should not invest in your business. It could indirectly work in your favour. The Sarick effect is named after the social scientist, Leslie Sarick. If your audience is supportive already, it is useful to state all your strengths. However, if they are skeptical, maybe you should state the flaws in your idea. This helps to disarm your audience. It is necessary to be balanced in your presentations. Some people think that if you criticize well, it will make you seem cultured and of outstanding quality. It might make you look smart. Reviews should not be written too positively. Being upfront with your downsides is that it makes you more trustworthy. You need confidence to reveal your weaknesses straight away. Unfamiliarity breeds contempt. Most of the time, humans are overconfident of their predictions. When you are communicating an idea, it can be very tough. You have no idea how the audience will receive it since it is the first time they are hearing it. We tend to under-communicate our ideas. ‘Eminent psychologist Robert Zajonc called it the mere exposure effect: the more often we encounter something, the more we like it.’ This mere exposure effect has been around everywhere. An unfamiliar photo requires us to take more effort to process. For ideas, it is useful to have repeated exposure. The audience will grow to like it even more. To pitch an idea well, the presentation of the idea and the evaluation of it should have a time gap. You have 4 responses you can take when you hate something. They are exit, voice, persistence or neglect. Exit means quitting. Voice is trying to improve things by voicing out. Persistence is gritting your teeth and bearing it. Neglect means staying in your current situation but reducing your effort. Speaking up means you believe that things can change and that you can make a difference. Agreeable people do not like to speak up and ruin the status quo. Disagreeable people derive joy in speaking up. Managers who like to challenge status quo tend to be more open to ideas. Many people do not like to speak up. It is detrimental for the middle segment of an organization to speak up. For females, it is especially difficult to speak up. There are still strong gender stereotypes being present. Females who speak up tend to be seen as aggressive. For minorities, it is very important to speak up only after they have attained a certain level of status. Neglect is certainly not the best option. Exit is very bad for originality.

Great spirits have always encountered opposition from mediocre minds. – Albert Einstein

Unbridled optimism comes across as salesmanship; it seems dishonest somehow, and as a consequence it’s met with skepticism. Everyone is allergic to the feeling, or suspicious of being sold. – Adam Grant

Research shows that the mistakes we regret are not errors of commission, but errors of omission. If we could do things over, most of us would censor ourselves less and express our ideas more. – Adam Grant

Fools Rush In. Timing, Strategic Procrastination, and the First-Mover Disadvantage. It is more difficult and time consuming to write a shorter than longer speech. Martin Luther King only prepared for his landmark speech in 1963 at 10pm the night before. The act of procrastination can work at times. We are always taught not to procrastinate and to do it immediately. Waiting prevents all your eggs to be dumped in 1 basket. Procrastination might result in divergent thinking. You might consider other concepts in the meantime. This is how creative ideas might spawn and form. Of course, procrastination hampers productivity. There are two forms of procrastination: laziness and waiting for the right time. Leonardo Da Vinci often left work unfinished and returned to it many years later. Genius is difficult to predict. It is not wise to rush originality. Procrastination means also not rushing into a pre-mature solution. We are able to improvise when we procrastinate. Successful companies often have leaders who have procrastinated in the past or who rated themselves low on efficiency and promptness. One can improvise if one procrastinates. Timing accounts for 42% of the difference between success and failure. In the past, we believe in the first mover advantage. Pioneers are 6 times more likely to fail than settlers. Although there are benefits associated with being a first mover, the overall results are mixed. Settlers are smart as they bide their time before introducing something new. Many start-ups fail because they try to scale and invest big before the market is ready. The benefit of not being first is that you can learn from the mistakes of the first. Being second also allows you to observe market changes and shift consumer tastes. Timing is everything. There are benefits to being first of course. In industries, like where patented technology and strong network effects are required, being first helps. Great scientific breakthroughs take time and elders should not be discounted. There will always be the case of late bloomers. There are two types of innovators: conceptual innovators and experimental innovators. The first one are sprinters and the second group are marathoners. Einstein was a conceptual innovator and came up with thought-experiments. Good things come to those experimentalists who persist in their work.

In scientific work, ideas need time to mature and procrastination is one way to restrain that urge to respond prematurely. – Adam Grant

Of course, not every unaccomplished 65-year-old is some undiscovered experimental innovator. But it might bolster the resolve of the relentlessly curious, the constantly tinkering, the dedicated tortoises undaunted by the blur of the hares. – Daniel Pink

Goldilocks and the Trojan Horse. Creating and Maintaining Coalitions. Lucy Stone did great things for women’s rights. She was a strong advocate for women’s rights. It inspired Susan B Anthony to join the suffrage movement as well. However, later on the both of them separated to form their own suffrage organization. Coalitions are inherently unstable. It is certainly important to form strong alliances. A moderately tempered message is useful to draw rivals in. Usually, someone who is radical will be against someone who is too mainstream. For instance, Stone also supported voting rights for black men, which seems against women’s causes. Shared tactics among groups are key to the success of forming coalitions. This could mean using the same method of engagement. Common goals were not good enough. Meredith Perry wanted to create wireless energy. She wanted to use ultrasound to convert it into wireless power. She founded a company called uBeam. She had to face many detractors along the way. It was so radical that the usual approach of explaining the why to others might not work too well. Originals have to become tempered radicals for things to work. This was like shifting from ‘why’ to ‘how’. Therefore, there is a need to disguise your original vision. The trick is to lead in with a small request first, before entering with a big one. If you do not moderate your radicalism, there is a high chance of failure. Occupy Wall Street was too radical and thus failed. Sometimes, we might have ambivalent relationships, these are people who support but also undermine us sometimes. Negative relationships are shown to hamper work performance. However, it was even worse when dealing with ambivalent relationships. Ambivalent relationships are even more nasty. The trick to cut ambivalent relationships and win over pure enemies. There are certainly a lot of merits to converting people who are former adversaries. The creators of Lion King faced resistance after they tried to pitch their ideas to the CEO and other executives. However, the creators showed the similarity with ‘Hamlet’ and this won the approval of the executives. People like things that are familiar and which can ultimately work. It is necessary to reframe ideas to appeal to certain audiences.

The message was clear: if you were a true believer, you’d be all in. The more strongly you identify with an extreme group, the harder you seek to differentiate yourself from more moderate groups that threaten your values. – Adam Grant

Originality is what everybody wants, but there’s a sweet spot. If it’s not original enough, it’s boring or trite. If it’s too original, it may be hard for the audience to understand. The goal is to push the envelope, not tear the envelope. – Rob Minkoff

Rebel with a Cause. How siblings, parents, and mentors nurture originality. ‘Stealing home’ gives the team a psychological lift. Progress always involves risk. The birth order was shown to predict who would steal more bases. Younger brothers were more likely to take a risk. They were more willing to take risks. All the famous ones were all younger siblings. The same applies to science and discovery. Later-borns were also more rebellious in nature. There are also advantages to being firstborn. They are known to enjoy higher starting salaries than laterborns. However, they are known to be more risk-averse. Older siblings tend to exert pressure over younger siblings, causing them to rebel. Comedians are a job which require great creativity. Many of them are last-borns. The older siblings tend to take up professional jobs. This is known as niche picking. Parents usually give more freedom to their younger children. They usually face lax rules and get away with more things. How parents discipline bad behavior and praise good behavior is crucial. To raise creative children, it is better to educate them on moral values and not specific rules. Once the children internalize the rules, it is a lot easier for the parent. It is good to let the child know the consequences of their actions. If the child does well, you should praise his character. However, this only works when the child’s identity is forming. Role models are important if you want to raise creative children. However, having a parent as your role model will tend not to make you super ambitious in life. It is not easy to find the right mentor. However, we can do so in accessible places like in books. It is also to be inspired by fictional characters. Children’s books can have a big impact on a child’s creativity.

When we shift our emphasis from behavior to character, people evaluate choices differently. Instead of asking whether this behavior will achieve the results they want, they take action because it is the right thing to do. – Adam Grant

Rethinking Groupthink. Edwin Land was the founder of Polaroid. He was one of the great inventors of our time. However, his company culture didn’t sing in tune. Their products were dismal in the 1980s and they didn’t embrace the digital era. Groupthink didn’t encourage dissent. They thought people wanted hard copies of pictures. Some people do not speak up because they do not want to destroy group harmony. You need the group to be cohesive and form a strong culture. Cohesion takes time to form. Are cohesive groups more susceptible to groupthink? Sometimes, it’s good to encourage others to complain about problems rather than solve them. There are three ways to hire: professional blueprint, commitment blueprint and star blueprint. Commitment blueprint was about hiring someone who fits in the company culture. Commitment blueprint was always the more superior model. The professional one was the worst. Kodak, in its early days, used the commitment blueprint of hiring too. However, in the long run, there are drawbacks to commitment blueprints. The issue is that it is difficult to integrate a diverse workforce. The culture is too similar and people do not adapt to changes. Land liked to seek advice from people who shared his own perspectives on things. Minority viewpoints are important and should not be disregarded. Dissenting opinions might be useful even though they are wrong. This is because it encourages divergent thinking. Overconfidence breeds Group Think. Dissenters got shut down and were silenced. Bridgewater Associates was known for having an incredible culture. Their principles are available online. The employees are well-trained on these principles and are evaluated on them. Its fund performances have been exemplary over time. They embrace a huge degree of diversification. Their founder is Ray Dalio. His employees are allowed to criticize him. Their culture was really open and completely honest. People can be fired if they don’t challenge the status quo. Radical transparency has worked. Some companies use a Devil Advocate’s to counteract Group Think. People tend to have confirmation bias: when you have a preference, you seek out information supporting it and overlook information that challenges it. While it is useful to assign a devil’s advocate, it is better to unearth a true dissenter. It must be genuine dissent. Dalio even went a step further as he wanted the names of true dissenters. It is natural for most leaders to not want employees to complain. However, when it comes to groupthink, it is useful to complain. It is novel to allow dissenters to speak up first, before the rest. At Bridgewater, not every opinion is valued equally. He had statistics on every aspect of employee’s performance. This metric will show you what position you should be playing. If you not believable in a domain, then you should not speak. People can challenge senior leaders in Bridgewater. Dalio was encouraged to prioritize his principles. His number 1 principle was that people must think for themselves. Dalio has also studied famous people like Benjamin Franklin, Einstein and all.

The greatest tragedy of mankind comes from the inability of people to have thoughtful disagreement to find out what’s true. – Ray Dalio

Rocking the Boat and Keeping It Steady. Managing Anxiety, Apathy, Ambivalence, and Anger. What is a good way to deal with emotions? How can you calm down effectively? There is value in negative thinking. There are two schools: strategic optimism and defensive pessimists. Research has shown that defensive pessimists can perform just as well. It is a strategy to manage anxiety, fear and worry. By intensifying anxiety, you turn it into motivation. Fear gets rid of all forms of complacency. When you are nervous, do not tell yourself to calm down. Instead, tell others that you are excited. It is possible to reframe fear as excitement. It is not too bad to imagine the worst case scenario. Being an original means you are bound to face difficulties. However, these difficulties can be a source of pleasure. Josh Silverman took over Skype in Feb 2008. For leaders, having a vision plus a story to go along helps to motivate employees. Most people like to follow the majority even though they know the answer given by the majority is wrong. This is known as herd mentality. It is helpful to have at least one dissenter in the group. Learn to use humor as a way of conquering fear. It is important to establish a sense of urgency. It is possible to generate ideas on how to cause a collapse of a company. Then, force them to think of solutions. The trick to get the buy-in from others is to present the status quo and to compare to what could be. The bigger the gap, the better. To motivate yourself when your commitment is wavering, it is useful to look at how far you have already come and the progress you have made thus far. There are two ways to deal with anxiety/anger: surface acting or deep acting. Surface acting is not the best option all the time. Deep acting is proven to be more sustainable. Faking emotions is tiring over time and we are not our normal selves. Venting anger actually feeds your anger. Instead, one should reflect on the victims who have suffered from our anger outbursts.

The trick is to make fear your friend. Fear forces you to prepare more rigorously and see potential problems more quickly. – Lewis Pugh

If you have to go to a funeral, you’re better off in the casket than doing the eulogy. – Jerry Seinfeld

Rather than trying to suppress a strong emotion like fear by telling ourselves to calm down, it’s easier to convert it into a different emotion like ‘excitement’ – one that’s equally intense, but propels us to step on the gas. – Adam Grant

Actions for Impact. There are steps you can take. Learn to question the status quo. Triple the number of ideas you generate. Learn a new domain and broaden your horizons. Procrastinate deliberately and pause so that you have time to engage in divergent thinking. Seek feedback from your peers. Balance your risk portfolio – for instance, cling on to your day job and start something on the side. Make your ideas more familiar, via use of repetition etc. Speak to a different audience. Learn to be a tempered radical if your idea is revolutionary. Learn to motivate yourself differently when you’re committed vs uncertain. Don’t try to calm down. Focus on the victim, not the perpetrator. Realize you’re not alone. Remember that if you don’t take initiative, the status quo will persist. As a leader, you can run an innovation tournament. Picture yourself as the enemy. Invite employees from different functions and levels to pitch ideas. Hold an opposite day. Ban the words like, love and hate. Hire not on cultural fit, but on cultural contribution. Shift from exit interviews to entry interviews. Ask for problems, not solutions. Stop assigning devil’s advocates and start unearthing them. Learn to welcome criticism. Ask children what their role models would do. Link good behavior to moral character. Explain how bad behaviors have consequences for others. Emphasize values over rules. Create novel niches for children to pursue.


The 21 Irrefutable Laws of Office Politics by Shane Dustin

This book is for you to step on others in order to climb up. This book is for entertainment purposes.

A Dangerous Game. There are also two kinds of positions: candidate (play the game) or constituent (get run over). Learn to say and do the right thing at the right time. Shape inter-personal relationships at work. There are two types of career driven people, White Hats and Black Hats. White Hats will do the right thing and pursue self-improvement programs and play by the rules. Black Hats take aggressive steps to step on the toes of others. Like it or not, office politics is always present. Sometimes, you need to be selfish and play the game. Stand up and be counted. Learn to take a stand. Learn to play the game. To defend against the black hats, learn the following 21 rules.

Some may say playing the office politics game is a cowardly way to get ahead, but those in the know, and in the top corner offices, understand that getting ahead is about seizing opportunities, and using any means possible to serve themselves first. – Shane Dustin

Develop the Right Mindset. You are your own best advocate and you need to accept that. White Hats will volunteer for tough assignments. Black Hats will join projects that are already successful and leave those that are failures. Do not volunteer yourself for projects unless you understand the risks/rewards for the project.

Nobody cares as much about his or her career as you do, and nobody will step out on a limb to back you or support you, unless you take the first step. – Shane Dustin

Court Productivity. Productivity is not enough, self-marketing is important. Learn to create a continuity folder and help a subordinate to learn your job. Create SOPs and guidelines for your subordinate to follow so that hiring of the new guy can be smooth.

One of the shortest route to the top is to be better than anybody else. Once you know your job, learn your boss’s job. And where your job uses measurable goals or quotas, always set new standards. – Shane Dustin

Build a Network. Protect yourself from making wrong connections. You can help your juniors to excel, provide feedback on how to improve the department, volunteer on process improvement teams. Black Hat’s tactic is not to associate yourself with losers.

Politics is known as the art of compromising, and in the corporate world, you get ahead by helping the right people pursue their agendas and realize success. – Shane Dustin

Master the Redirect. Wear a rubber shield so that you can deflect criticism elsewhere. Learn to absorb praise when you receive it. You must learn to deflect blame and absorb credit to climb up the ladder. To be a good worker, accept responsibility for your failures. To be a black hat, disassociate yourself from department shortcomings. Transfer out of the department, if necessary.

Listen First. Do not spread gossip or rumours. A good worker will stop a rumour in its tracks.

Avoid the water cooler gossip circle, and do not get caught spreading rumors. Instead, keep your mouth shut, listen carefully, and observe which way the wind is blowing. When overwhelming evidence suggests the right course of action, take a stand with the winning side. – Shane Dustin

Stay Focused. You must have a plan. Know what it takes to get promoted and the skills required for that position. However, realize that it takes effort and hard work. Remind yourself of this goal and that should motivate you. Consistently learn about your boss’s job in order to stay head of your peers. A Black Hat doesn’t believe in loyalty to an organization and will jump around to different organizations in order to climb the ladder.

Be Resilient. There will always be critics, whether you are a white or black hat. You must have thick skin to win. You must tolerate the abuses your colleague gives you. Look for training opportunities. Attend conferences that are related to your job. A black hat will not attention to the conferences, but use it for networking purposes.

Get Impersonal. Make your colleagues your friends outside of work. Defend yourself when things get nasty. As a black hat, get your friends to achieve your goals. Only think about yourself. If you want to play office politics, understand that you may not be the most well-liked person around.

Maintain Plausible Deniability. Ensure that you obey the rules and code of conduct for your department and organization. Do not stray for it. For every crisis you survive, you will emerge stronger and fitter. To a black hat, do not commit to a deadline unless you are very sure you will not fail.

Know the Unwritten Rules. As you know the organization better, you will know that you can play outside the rules and regulations. The trick is to understand the written rules, but push the boundary. As a good worker, set rules and ensure that people comply and do not play dirty or over-step the rules. As a black hat, tell people to perform things outside of the written rules.

Copy Success. Learn from the people who have made it. Do not ‘re-invent the wheel’. Copy your supervisor’s good behaviour. As a black hat, steal others’ ideas and claim credit for it. Find out what are your boss’ hobbies and then research and chat with him about it.

It’s sad in human terms, but the reality is, getting ahead is often a game of attrition. Your job is to outlast your peers, and be the last soldier standing in the field when the war is over. If you copy the habits and behaviors of survivors, you will greatly increase your chances of joining their ranks. – Shane Dustin

Be Assertive. Learn to be assertive, and not aggressive. An assertive people is confident of their views and takes a stand. Be the person who is best prepared. Let the facts speak for themselves. To be a black hat, be very aggressive during meetings.

Grow Up. You must play by the rules of the big boys and girls. There is no shame in excelling at your work. Accept credit where it is due. Do not hide your accomplishments. Analyze your skillset and determine weak areas. Ensure you get the right training you need. Find ways to impress your job.

Take what is offered. Don’t let ego get in the way. Be bold to state what you want. Look to be number 1 even if others may not be happy with you. Accept what is rightfully yours. Accept any promotion.

Dump the Employee Mindset. The employer and employee goals are usually opposites. The employee wants to work as little as possible and get paid as much as possible. If you don’t like your employer, leave and start your own company. Change your attitude towards employers and treat them better. This is the capitalist system and you have to accept it. Always speak highly of your employer. Ask what you can do to improve the situation.

Your job is directly tied to the value you add to the organization. – Shane Dustin

Everybody Lies. We all lie. The best players of office politics do it the best. However, you can lie to your advantage. Listen to things from your colleagues with a pinch of salt. You can use lies of omission, as this is not completely lying, but just leaving out the key details. Exaggerate the good traits of your co-workers.

Cash in Your Chips. Negotiate the best trade-off. Give when you can, and take when you can. Co-operate with colleagues and make concessions.

Be Seen. Learn to draw attention to yourself. Volunteer to be the emcee at events.

The fact remains, anything you can do to grab the attention of the boss is good. Ideally, you will place yourself in the position to be noticed providing outstanding customer service, helping a co-worker resolve a problem, and being the last employee out of the building at night. – Shane Dustin

Adopt a Hobby. Learn to play golf and understand what hobby your boss likes. People like being around others with similar interests with them. Align yourself with those who have similar interests. Learn things about your new hobby. Spend time practising your new hobby.

Spurn Mediocrity. Do not be mediocre. Many are happy to be mediocre and have no drive in life. Do not be like them.

Nobody wants to be labelled as “average”. But few people will take the extra effort to rise above mediocrity. Which is a good thing for you, because it means there will be less competition for the better jobs. – Shane Dustin

Be a Professional. Learn to be a professional. Have consistency in your actions. Pursue excellence. Be punctual and make yourself available. Complete all the tasks within a given timeframe. Continue to play the office politics game.