New Year’s Resolutions: Your Can’t-Miss Failure Guide

A few years ago, Professor Richard Wiseman, a psychologist at the University of Hertfordshire, followed over 3000 people who had made New Year’s Resolutions…and tracked their ultimate success or failure. Since 88% of the participants were successful in failing to achieve their goal (i.e. only 12% actually achieved their goal) he had many examples of what NOT to do in making a New Year’s Resolution.

Make Many Resolutions: The chances of failure are greater when you channel your energy into changing multiple aspects of your behavior. To guarantee failure, try to achieve too much by making way too many resolutions.

Be Impulsive: Wait until New Year’s Eve to consider your resolution(s). By waiting until the waning hours/minutes of the year, you can assure that your decisions will be based upon whatever is on your mind at the time…or in your glass.

Make the same ol’ resolution again, and again…and again: Wallow in frustration and disappointment by re-visiting a past resolution that you failed to achieve. Choose the same old problem, and the same old approach that you botched last year.

Be vague and fuzzy: Do not think through exactly what you are going to do, where you are going to do it, and at what time. Be as vague as possible which will allow you to disregard your failure because you didn’t really commit to anything anyway.

ok...ok…ok…enough of the sarcasm. Let’s get serious.

Willpower is a muscle
As we learn more about the brain, we also learn that willpower is a muscle, like our biceps or quadriceps or latissmus dorsi, and can fail from fatigue by being overtaxed, or “weak”.

In an experiment led by Baba Shiv of Stanford University, undergraduates were divided into two groups: one group was given a two-digit number to remember, while the other was given a seven-digit number. Both groups were asked to walk down the hall…where they were offered two different snack options: a slice of chocolate cake or a bowl of fruit salad. Notably, the seven-digit group was 100% more likely to choose the chocolate cake. The reason, according to Professor Shiv, is that the seven-digit number was taking up valuable space in the prefrontal cortex portion of the brain, (i.e. cognitive overload) making it more difficult to resist a self-indulgent dessert.

The pre-frontal cortex, located right behind the forehead, is also in charge of keeping us focused, handling short-term memory, and solving abstract problems. Asking it to do too many functions at once can create a “tired” brain which is less resistant to outside stimuli.

In another experiment, by Professor Roy Baumeister of Florida State University, students who fasted for three hours were asked to perform a variety of self-control tasks, e.g. focusing on a boring video. The results were that students with lower glucose levels also had lower self-control. In other words, willpower requires real energy.

"A new oath holds pretty well; but... when it is become old, and frayed out, and damaged by a dozen annual retryings of its remains, it ceases to be serviceable; any little strain will snap it."…Mark Twain

Observations for Success
Let’s return to the research of Professor Wiseman that we pointed to earlier…without the sardonic, tongue-in-cheek tone.

What else might his study inform us about achieving success with New Year’s Resolutions?

One very interesting observation was that there were large differences in the goal-setting approaches that best suited men and women:

• Men were significantly more likely to succeed when asked to set S.M.A.R.T. goals (i.e. Specific, Measurable, Achievable, Relevant, Time-Bound)…as well as focusing on rewards and benefits.
• Women were more successful when they made their goals public to friends and family…as well as simply having someone encourage them to be persistent in taking time to learn new habits.
  

To recap the research findings on New Year's Resolutions, sans cynicism and sarcasm...consider these eight bits of learning:

1. Make only one resolution,
2. Plan ahead,
3. Avoid previous resolutions,
4. Be specific,
5. Set S.M.A.R.T goals,
6. Carrot good, stick bad,
   
7. Go public,
8. Be persistent.

Above all else, trust yourself. The first step to goal achievement is self-awareness. The best way to fix willpower flaws is to be aware of them.

In the New Year, may your right hand always be stretched out in friendship, but never in want.

Happy New Year to you...from all of us at ClientWise!

by Chris Holman

“It is sad to grow old but nice to ripen”

"It is sad to grow old, but nice to ripen."...Brigitte Bardot

According to a series of articles in the NY Times column “The New Old Age”, adults over the age of 80 are the fastest growing segment of the population. So, what are all these elderly people doing with their lives?

Well, as you might imagine, some are living the life they dreamed of, but a growing number are still working…some out of necessity and some just because they want to keep busy.

Those with financial security and good health are living the retirement lifestyle they planned. Those who aren’t in good health need someone to take care of them; oftentimes this burden rests with their children, another relative, or a home health aide. The elderly who aren’t financially secure need help, too; again this burden typically falls on their children’s shoulders.

However, more and more seniors are taking matters into their own hands and continuing to work to support themselves…or just for the fun of it. In fact, for many seniors, the jobs they are getting are the most fulfilling they’ve ever had.

Recently, I had some work done in my house and needed to get a room painted. The carpenter I used recommended a painter he has referred to other clients, so I had him come over to give me an estimate. When I opened the door, I was surprised to see an elderly gentleman standing before me dressed in his painting whites and holding a clipboard.

While he was measuring the area to be painted, we chatted. Clearly, he was well past retirement age, but he was still working…painting. He told me that he doesn’t need the money, but wants to keep working because some of his friends retired, then got sick and/or passed away. He doesn’t want to spend his days on the couch in front of the television. His theory is that if he keeps working, keeps active, and keeps his mind engaged, he’ll live longer. A lot of today’s seniors feel the same way.

However, finding a job when you’re well past retirement age is not an easy task. There are several obstacles that get in the way, including age discrimination, available jobs (currently there is a 5.7% unemployment rate for people over 75), and competition from younger workers.

These statistics are worth noting:

• According to the AARP, in the past 20 years the oldest group of workers (the 75-plus work force) has increased enormously to approximately 1.3 million as of 2009. This number was just under half a million in 1989.
• Since oftentimes it’s the woman who outlives her husband, a growing proportion of this work force, almost 44%, are women.
• A large percentage of working seniors are putting in long hours. More than 42% of the people in this age group who are working are holding full-time jobs, according to the Census Bureau.
• A quarter of older workers switch occupations after age 50, according to Richard Johnson, a senior fellow at the Urban Institute in Washington, D.C. The federal Department of Labor estimates that between 2006 and 2016, the number of workers over age 55 will rise 36.5%. That increase will create the grayest labor force since the government began tracking this data, according to Richard Johnson, a senior fellow at the Urban Institute in Washington, D.C.
• Of workers over age 65, more than 90% say they enjoy their jobs — a higher proportion than among young people, Mr. Johnson noted.
  

As a financial advisor, you should be doing everything you can to help your clients formulate an appropriate retirement strategy. But, what else can you be doing to support your clients who are approaching retirement age?

• Start the new year with a new plan for your clients who are seniors now...or “soon to be” seniors.
• Create a "Retirement Checklist" which would include a comprehensive review of all retirement-related issues, e.g. assets, documents, accounts, etc.
  
• Engage your clients in a retirement conversation...that doesn't necessarily involve money.
  
• Become familiar with some of the excellent informational resources available. For example, this book..."Get Inspired to Retire, Over 150 ideas to help find your retirement" is a great first step.
• Team up with a local university or host a volunteer night to connect seniors with local organizations who can use their valuable time and talents.
• Remind seniors to take care of themselves, physically, spiritually and mentally; consider hosting a “Get Fit” night with local doctors or experts in the fields of Alzheimer's, dementia, heart problems, cancer or arthritis.
• Organize a “Getting Old and Taking Control” day for seniors and their children with executives from various local senior organizations, such as nursing homes, home health aides, assisted living housing, long term care choices, etc. Having information such as this available long before it’s needed, so it can be reviewed in advance is much more beneficial than having to rush around and find such a service in an emergency.
  

When we talk to financial advisors, many of them will say that "retirees" are one of their target markets. What is becoming more apparent each day is that the "retiree" population is remarkably heterogeneous. For advisors who want to specialize in "retirees", it might make more sense to further isolate sub-sets of this growing demographic and become an expert in the needs and concerns of more homogeneous groups.

by Theresa Ficazzola

The Power of Reciprocity: The Weight of Obligation

The Principle of Reciprocation states that one should repay favors in return for favors that we receive is a psychological phenomenon in which we feel somewhat compelled to repay what another has provided for us first.

This explains why restaurants often include candies or mints when presenting the bill. (In a study completed by the Center for Hospitality Research, it was found that giving customers fancy chocolates increased tips by 15-23%. In fact, the highest tips were received when the server gave dining parties one piece of candy per person and then “spontaneously” offered a second piece per person.)

In a good blog post in the Harvard Business Review, Steve Martin (not THIS Steve Martin!) points out that positive reciprocation is definitely not the “If you help me, then I’ll help you” variety. Constructive reciprocation requires one to give first without the blatant expectation of receiving something in return.

Indeed, numerous studies have shown that when one extends a service in this manner, those who we “invest” in very often return the favor by exceeding the expectations of scale in their reciprocation:

• When hotel guests were informed that the hotel had already made a donation to an environmental organization, those guests were 45% more likely to reuse their towels and linens.
• In a study of wineries offering complimentary wine tastings, vs. those that charged a small fee, visitors who had complimentary wine tasting spent significantly more money at the wineries than visitors who paid a fee for tasting. Furthermore, visitors who tasted wine for free felt significantly more appreciative of the personnel than did visitors who paid a tasting fee.
  

As Mr. Martin points out, there is also a delicate balance between the aggressive posture of… “Yes, I did help you out and now you owe me” and the much more compliant response of “Hey, it’s no problem. I’m happy to help.” The deficiency of the second response, from a business standpoint, is that it doesn’t really lead anywhere. “Happy to help…I know that if the situation were reversed, you’d help me” is more suggestive; as is…“You are most welcome. That’s what we do for important clients such as you.”

The one big exception to the Principle of Reciprocation rests in overt requests for trade. If someone feels something will be expected if he/she accepts, the power of reciprocation is greatly diminished.

Financial advisors who understand the persuasive effects and nuances of the Rule of Reciprocity can enhance their ability to build stronger networks, create more trusting relationships, and become more influential over others. Some specific examples might include:

• When sending out client surveys, include a $5.00 gift card from Starbucks, or your local coffee purveyor. Organizations that have included "preemptive gift cards" have doubled their response rate to client surveys.
  
• Never, ever, never say to your clients something like… “There are two ways that I get paid, and one of them is from your providing referrals to me.” Cheeeeesy!
• For your clients who are business-owners and entrepreneurs, reach out to them and help them grow by advocating and promoting their services and businesses to your own clients and networks.
• The Golden Rule, i.e. treat others as you’d like to be treated yourself.

"The Golden Rule is not a sacrifice. It is an investment."...Paul Bunyan Walker

by Chris Holman

Delusional Diversification Redux

In our most recent blog post, "Delusional Diversification: The Flawed Logic of Using Multiple Advisors" we discuss the inherent risk and complexity that results from investors who use more than one advisor. We also point out the unfortunate paradox. One of the reasons that investors use multiple advisors, unconsciously or not, is to reduce portfolio risk by increasing diversification. The paradox lies in that, by creating layers of communication and efficiency boundaries, the investor increases portfolio risk.

As we reflect on this situation, a number of questions spring to mind. These are questions that an advisor might ask an investor who has created this circumstance...or questions that investors might ultimately ask themselves:

1. Why do you have multiple advisors?
2. What is your asset allocation strategy?
3. Who is accountable for your asset allocation strategy?
4. How do your advisors coordinate and collaborate with each other?
5. What's the communication plan amongst all of your advisors...and you?
6. How do you prevent portfolio overlap?
7. If all of your advisors have partial information about your entire portfolio, how do you estimate the outcome of choices on the final portfolio?
8. Which of your advisors has the responsibility of considering your unique investment variables, i.e. your age, current taxable income, future income needs, investment strategy, asset allocation strategy, etc.?
9. Have you considered the hidden risks of having multiple advisors?
10. Most all of the affluent investors who I work with have a fundamental need for a trustworthy relationship with one financial advisor. Would it help you to work with one advisor who has a deep understanding of your personal goals and monetary philosophy?

From our observation, the benefits of working with one advisor are three-fold: simplicity, more effective and efficient portfolio management, and having one relationship seems to increase the level of trust and understanding that the advisor has of the investor's needs.

On another completely different note, today is the birthday of author, humorist, and professional "epigrammatist", Ashleigh Brilliant. Brilliant makes his living authoring witty pronouncements, such as:

• I feel much better now that I've given up hope.
• I try to take one day at a time, but sometimes several days attack me at once.
• I have abandoned the search for truth, and am now looking for a good fantasy.

Brilliant once sued television journalist David Brinkley who wrote an autobiography entitled, "Everyone is Entitled to My Opinion." Brilliant proclaimed that the words were originally his, and Brinkley's publisher paid Brilliant $1000.00.

by Chris Holman

Delusional Diversification: The Flawed Logic of Using Multiple Advisors

“Put all your eggs in one basket…and watch that basket.”…Mark Twain

There’s a population of affluent investors who, in a vain effort to achieve portfolio diversification, hire multiple financial advisors to mitigate their portfolio risk. Not only is this effort wrong-headed and risky, but it may contribute to the exact condition these investors wish to avoid.

The research we’ve seen indicates that 70% of individuals with portfolios in excess of $1 million use an advisor, and 34% of this population employ multiple advisors. Anecdotal evidence is telling us that this number may also be increasing, as affluent investors attempt to counter the increasing volatility of market conditions.

The psychology of having multiple advisors would seem to be an extension of basic asset allocation principles. Investors reason that if allocating investments across a diverse portfolio is sound advice, why not extend this thinking in order to get a diversified array of “expert” investment opinions?

Unfortunately, there’s a fatal flaw in this logic.

This flaw can be illustrated by considering a hypothetical case study. Let’s consider an individual who is due to retire in one year. They are interested in developing an efficient income plan and tax strategy that takes all of their variables into account. Their assets consist of multiple IRA’s from past employers, a substantial 401(k) with their current employer, as well as a taxable account. Of course the location of each account is important in this calculation. IRA’s are tax-deferred and offer unlimited investment options. 401(k)s are also tax deferred but have more limited investment choice. Personal accounts are fully taxable and have virtually unlimited investment options. When one apportions an investment portfolio among the different asset classes, e.g. stocks, bonds, cash, real estate, alternatives, etc…there is a risk/reward trade-off between these various asset classes. Moreover, when one is retiring, another level of complexity is added because withdrawals may be taken into account. At this point, the investor must decide where and how much to hold in certain types of investments, as well as deciding what accounts should be sold and in what amounts such that the marginal tax bracket is minimized each year.

Given this scenario, it is nearly impossible to expect that a disparate group of advisors working at different firms could develop an efficient communication plan that avoid pitfalls like: portfolio overlap, security concentration, or a less-than-optimal asset allocation, or other equally serious risk factors. The fact is that most affluent investors lead complicated lives anyway. Investors who work with with multiple advisors add a layer of complexity that is, at best, troublesome and, at worst, needlessly perilous.

On top of all of this, post-financial crisis, affluent investors are quite clear on their new investment priorities. In the 2010 World Wealth Report:

• 79% of high-net-worth investors indicated that “greater transparency and simplicity around products, risks, fee structures, portfolio reporting, and performance” was important to extremely important.
• 81% of HNW investors were highly desirous of “scenario analysis on the proposed allocations/products aligning to individuals’ goals/expectations.”

So...affluent investors are telling us that they want simplicity, greater transparency, and a scenario analyis that aligns to their goals and expectations. However, if they have hired multiple advisors...this is unlikely to happen! Multiple advisors cannot assess risk properly because they hold only partial information and cannot estimate the outcome of their choices upon the entire portfolio. Financial decisions made without a broad-view perspective, are risky and can lead to asset overlap, higher tax brackets, and poor portfolio performance.

For financial advisors who have clients with multiple advisors, the good news is this. By virtue of having many advisors, the client is most likely saying that they want to reduce their portfolio risk. In which case, it is incumbent upon the advisor to show them a better way to accomplish this.

By the way, today, November 30th, is Mark Twain’s birthday. It is the irony of ironies that he has said, “Put all your eggs in one basket…and watch that basket.” Although Twain was a very successful author and speaker in his lifetime, he was a hapless, hopeless investor. He bankrupted himself by funding the Paige Compositor, a beautifully engineered typesetting machine that never came to market due to the perfectionist nature of its inventor. Over a 14-year period, from 1880-1894, Mark Twain invested $300,000 in this device (equal to $7.5 million in inflation-adjusted dollars), which was the bulk of his book profits plus a good portion of his wife’s inheritance. You can laugh and grin at Mark Twain’s most quotable quotes, but never follow his investment advice.

by Chris Holman

Your Thanksgiving Checklist

Celestine Chua is a native of Singapore and the founder of The School of Personal Excellence. She graduated from the National University of Singapore in 2006and secured a position with Procter & Gamble as an assistant brand manager. Two years later, she walked away from the financial security and prestige of P&G...towards her "real purpose", which is "helping people grow and living their best lives." She founded The School of Personal Excellence, which serves as a training ground for individuals who seek to live according to their passions in their personal or
professional lives.

She has compiled a list of 60 things to be grateful for in our lives. In the spirit of Thanksgiving, and as as aid to those of you who need some hints on this day, we offer you the following:

1. Your parents - For giving birth to you. Because if there is no them, there will not be you.
2. Your family – For being your closest kin in the world
3. Your friends – For being your companions in life
4. Sense of sight – For letting you see the colors of life
5. Sense of hearing - For letting you hear trickle of rain, the voices of your loved ones, and the harmonious chords of music
6. Sense of touch - For letting you feel the texture of your clothes, the breeze of the wind, the hands of your loved ones
7. Sense of smell – For letting you smell scented candles, perfumes, and beautiful flowers in your garden
8. Sense of taste – For letting you savor the sweetness of fruits, the saltiness of seawater, the sourness of pickles, the bitterness of bitter gourd, and the spiciness of chili
9. Your speech – For giving you the outlet to express yourself
10. Your heart – For pumping blood to all the parts of your body every second since you were born; for giving you the ability to feel
11. Your lungs – For letting you breathe so you can live
12. Your immune system – For fighting viruses that enter your body. For keeping you in the pink of your health so you can do the things you love.
13. Your hands – So you can type on your computer, flip the pages of books, and hold the hands of your loved ones
14. Your legs - For letting you walk, run, swim, play the sports you love, and curl up in the comfort of your seat
15. Your mind - For the ability to think, to store memories, and to create new solutions
16. Your good health – For enabling you to do what you want to do and for what you’re about to do in the future
17. Your school - For providing an environment conducive to learning and growing
18. Your teachers – For their dedication and for passing down knowledge to you
19. Tears – For helping you express your deepest emotions
20.Disappointment - So you know the things that matter to you most
21. Fears – So you know your opportunities for growth
22. Pain – For you to become a stronger person
23. Sadness – For you to appreciate the spectrum of human emotions
24. Happiness – For you to soak in the beauty of life
25. The Sun - For bringing in light and beauty to this world
26. Sunset – For a beautiful sight to end the day
27. Moon and Stars - For brightening up our night sky
28. Sunrise - For a beautiful sight to start the morning
29. Rain – For cooling you when it gets too warm and for making it comfy to sleep in on weekends
30. Snow – For making winter even more beautiful

31. Rainbows – For a beautiful sight to look forward to after rain
32. Oxygen - For making life possible
33. The earth – For creating the environment for life to begin
34. Mother Nature - For covering our world in beauty
35. Animals – For adding to the diversity of life
36. Internet - For connecting you and me despite the physical space between us
37. Transport - For making it easier to commute from one place to another
38. Mobile phones – For making it easy to stay in touch with others
39. Computers – For making our lives more effective and efficient
40. Technology – For making impossible things possible
41. Movies – For providing a source of entertainment
42. Books – For adding wisdom into your life
43. Blogs – For connecting you with other like-minded people
44. Shoes – For protecting your feet when you are out
45. Time – For a system to organize yourself and keep track of activities
46. Your job – For giving you a source of living and for being a medium where you can add value to the world
47. Music - For lifting your spirits when you’re down and for filling your life with more love
48. Your bed - For you to sleep comfortably in every night
49. Your home - For a place you can call home
50. Your soul mate – For being the one who understands everything you’re going through
51. Your best friends – For being there for you whenever you need them
52. Your enemies – For helping you uncover your blind spots so you can become a better person
53. Kind strangers – For brightening up your days when you least expect it
54. Your mistakes - For helping you to improve and become better
55. Heartbreaks - For helping you mature and become a better person
56. Laughter - For serenading your life with joy
57. Love - For letting you feel what it means to truly be alive
58. Life’s challenges - For helping you grow and become who you are
59. Life - For giving you the chance to experience all that you’re experiencing, and will be experiencing in time to come

60. You. For being who you are and touching the world with your presence.

Thank you to Celestine Chua for this list! Thank you to all of you for your support! Happy Thanksgiving to one and all!

by Ray Sclafani

Thanksgiving's Indomitable Founder: Sarah J. Hale

As we all give thanks this Thanksgiving, we might want to pause and thank Sarah J. Hale. Without her unrelenting 35-year long campaign, Thanksgiving would not be our national day of thanks.

By any measure and in any era, Sarah Hale was a remarkable woman. Sarah Josepha Buell married David Hale in 1813, and had five children with him. When he died suddenly in 1822, she was compelled to turn to writing to support herself and her family (One of her children’s verses was “Mary had a Little Lamb”). After the successful publication of a book of poetry as well as a novel, she was solicited to become the editor of a new magazine aimed at women, Ladies Magazine and Literary Gazette. In 1836, Louis Godey convinced Hale to become the editor of his magazine. Godey’s Lady’s Book. Godey’s Lady’s Book was one of the most influential magazines of the 19th century, reached a wide audience and covered topics ranging from health, beauty, cooking, gardening, and architecture. Hale published articles about proper writing techniques and prescribed reading lists, similar to ones given at college courses, to further educate her readers. Hale also published lists of schools that accepted women and advocated for women’s education. Over the years, Hale became more vocal in suggesting that, not only should women be educated, but they should receive a similar education to men.

35-Year Campaign
Beginning in 1828, Sarah Hale began writing editorials calling for the entire nation to observe a national holiday on Thanksgiving, similar to the holiday that she had experienced as a native New Englander. In between the editorials, Hale wrote hundreds of letters to politicians, including five presidents, lobbying for a day of thanks.

35 years later, in September 1863, less than three months following the Battle of Gettysburg, one of her letters reached Abraham Lincoln. It begins:

Sir:

Permit me, as Editress of the “Lady’s Book”, to request a few minutes of your precious time, while laying before you a subject of deep interest to myself and …as I trust…even to the President of our Republic, of some importance. This subject is to have the day of our annual Thanksgiving made a National and fixed Union Festival.”


Timing, and Persistence, is Everything
Finally, after years of pleas to deaf ears, Sarah Hale benefited from propitious timing. The fall of 1863 was a depressingly dark period in a nation splintered by an appalling civil war. The Battle of Gettysburg, with more than 50,000 Union and Confederate dead, lingered painfully in memory. The Battle of Chickamauga, fought in September, was one of the worst Union defeats of the War. President Lincoln was attuned to the mood of the nation, and was sensitive to the hundreds of thousands of soldiers away from home…as well as being keen to find ways to rally the nation’s spirit. Hale’s letter also benefited from some clever marketing on her part. She included two letters of support from governors who endorsed her effort, as well as a mention of her “good friend, Hon. Wm. H. Seward”…who happened to be Lincoln’s Secretary of State at the time.

On October 3, 1863, Abraham Lincoln issued the proclamation that declared the last Thursday in November to be Thanksgiving, a national holiday.

Hale followed up Lincoln’s proclamation with a final editorial poem to celebrate this day of national unity and thanks:

All the blessings of the fields,
All the stores the garden yields,
All the plenty summer pours,
Autumn’s rich, o’erflowing stores,
Peace, prosperity and health,
Private bliss and public wealth,
Knowledge with its gladdening streams,
Pure religions holier beams…Lord, for these our souls shall raise.
Grateful vows and solemn praise.

by Chris Holman

"That which does not kill us makes us stronger."

"That which does not kill us makes us stronger."...Fredrich Nietzsche

In 1993, J.K. Rowling and her six-month old daughter were living in Edinburgh, Scotland. Penniless, depressive and contemplating suicide, Rowling had separated from her husband and was living in a cramped apartment with her daughter, Jessica. While surviving on state welfare, Rowling would escape her flat in an effort to walk her daughter to sleep. She would often end up in cafes where she would complete her first novel. Today, her Harry Potter books have sold more than 400 million copies, and Rowling’s estimated net worth exceeds $1 billion.

Steve Jobs was adopted by a working-class family, and grew up in the apricot orchards that would later become Silicon Valley. In 1972, Jobs attended Reed College in Portland, OR… dropping out after one semester because the tuition was too much for him. He continued to audit classes at Reed, including a course in calligraphy. Says Jobs, “If I had never dropped in on that single course in college, the Mac would have never had multiple typefaces or proportionally spaced fonts.” In 1976, Jobs founded Apple computer with his buddy, Steve Wozniak. 8 years later, following an internal power struggle, Jobs was forced out of Apple by John Sculley. In 1986, Jobs bought Pixar from Lucasfilms for $10 million. 20 years later, he sold Pixar to Disney for $7.4 billion. Around the time that Jobs was booted from Apple, he founded NeXT Computer. In 1996, Apple purchased NeXT for $429 million, bringing Jobs back to the company he co-founded. In 1996, Apple was trading at around $12 per share. Since then, there have been two 2:1 splits, and AAPL now trades above $300 per share. Jobs’ stake in Apple and Disney exceed $6 billion.

Back to Fredrich Nietzsche’s quote, which has now become an adage used by annoying people who want to mollify us during stressful times. Turns out Nietzsche was right!

In a new study, “Whatever Does Not Kill Us: Cumulative Lifetime Adversity, Vulnerability and Resilience” the effect of adverse situations on people’s mental health and well-being is examined. In a longitudinal study occurring over many years, authors Mark Seery, Alison Holman, and Roxane Cohen Silver reveal that persons exposed in moderation to adversity over the course of their lives are higher-functioning and had generally a higher life satisfaction over time. Furthermore, people who had encountered adversity in their life were less negatively affected when they encountered adverse circumstances later.

In this study, authors Seery, Holman, and Silver report,

• Resilience involves having psychological and social resources that help people tolerate adversity, but coping with adversity may itself promote development of subsequent resilience.
  
• Experiencing moderate amounts of adversity creates effective coping skills, helps engage social support networks, creates a sense of mastery over past adversity, fosters belief in the ability to cope successfully in the future, and generates psycho-physiological toughness.
  
• All of these qualities contribute to resilience in the face of subsequent major adversity. Such qualities should also make subsequent minor hassles seem more manageable rather than overwhelming, leading to benefits for overall mental health and well-being.”

This study is interesting and important on several levels. The knowledge and confidence gained by being able to survive life’s challenges helps us to better navigate our way through future adversity through the development of subtle and supportive self-interventions.

Says Steve Jobs, “Your time is limited, so don't waste it living someone else's life. Don't be trapped by dogma - which is living with the results of other people's thinking. Don't let the noise of other's opinions drown out your own inner voice. And most important, have the courage to follow your heart and intuition. They somehow already know what you truly want to become. Everything else is secondary.”

by Chris Holman