September 2, 2010: You can not spend your way to prosperity.  Any stimulus program the Federal Government enacts will FAIL.  Why?  Because, they assume that the multiplier effect is greater than 1.0.  In the last 50 years this has never been the case.  The largest multiplier effect that I have seen in the research is 0.8.  Anything less than 1.0 is contractory.  This is why Obama’s $780 billion stimulus plan  is failing.  Real and sustainable economic growth comes from unleashing the creative spirits of entrepreneurs.  This is accomplished by giving individuals the incentives to work, save and invest in their futures.  You do this by not burdening entrepreneurs by high taxation and regulation.  Unfortunately, in the U.S. we are moving in the opposite direction and will pay the price.  

September 1, 2010:  Where goes the price of oil?  Like it or not we are a hydrocarbon based society and it will stay this way for the next three decades or so.  Therefore, the price of oil and, hence, fuels are of vital importance.  The price of oil is based on the demand for oil vs. supply.  Worldwide supplies of oil are slowly increasing.  Now the demand side of the equation.   Since 2005, China was responsible for the entire increase in worldwide demand for oil.  If growth in China should slow from its rapid double-digit pace (which I believe it will) to a single digit pace, the rate of growth for oil demand will decrease.  This will put downward pressure on oil prices.  In addition the major consuming nations, including China, are making  major steps in increasing energy efficiency.  Longer term this should decrease the demand for oil, but not necessarily natural gas.  With supply and demand going in the opposite directions, by 2035 we could be awashed in oil.  This would be just the opposite of the doomsday forecasters.  

August 31, 2010:  Friends, it’s not over! What’s not over? I am referring to the long-term decline of both the real estate and stock market.

Why? Markets, no matter what they are, obey a simple rule. They go to extremes on the upside and when the bubble bursts they fall to extremes on the downside. In their decline they do not stop when they reach fair or median prices–they continue downward to their bedrock prices. This is a long and painful process.

In the U.S., stock and real estate prices have not reached their negative extremes yet. Median real estate prices will continue falling and bottom out to where they were before the great real estate bubble began–about 1998-99 levels. The stock market (S&P 500 index) will fall to multiples of between 5 to 9 times earnings. This would put the index somewhere between 450 to 500. This would be another 50% decline from where we are today.

These predictions may sound extreme right now—but human behavior has not changed. This time it IS NOT different. As we use to say in the Boy Scouts–Be Prepared.

August 30, 2010: All movement in the course of life is turbulent and, therefore, unpredictalbe.  In designing your plans or strategies (on a personal or professional level) be of a confident nature, but make contingent plans in case a quick exit is needed.  In other words know the “exit” of any plan or strategy you decide to implement. You can always step up to the plate again.

August 27, 2010: The cardinal rule of investing is–never play another man’s game.  No matter how good the investment may seem if it doesn’t mesh with your personality or suitability requirements,  go play somewhere else.  In other words, find your own game and play it well.  Focus on what you do well. 

August 26, 2010:   If you could take all the wisdom in the world and boil it down to one sentence, what would it be?   This one sentence would be–there is no such thing as a free lunch. There is always a price or consequence to be paid.   The price or consequence could be positive or negative depending on many factors of which you may not have much or any control over.

For example, in interpersonal relationships honest communication is both important and essential.  You can control the “what and when” of your communication, but you can not control the resulting impact (positive or negative) it has on the other person.  This, honest or otherwise, is the cost or price of your communication.

August 25, 2010: Where goes housing? This is the $64,000 question. Price movements are simply a function of supply and demand. The supply of unsold homes in July, 2010 grew by 2.5% over June, 2010. We now have an inventory of unsold homes that will take at least 12.5 months to clear. This is the highest level in more than a decade. With the expiration of the $8,000 tax credit and, also, nearly one in four mortgaged homeowners owe more than their home is worth, the demand is falling. It also doesn’t help that lenders are become much more strict in their lending requirements. The result—demand is falling while supply is increasing. What is the direction of residential real estate prices in the U.S.—DOWN. On average prices can fall another 10% at least. This would put recent buyers who used the $8,000 tax credit underwater. Foreclosures will then increase adding to the supply.

August 24, 2010: How to Get the U.S. Economy Galloping

First, you must define who are the real “movers and shakers” of economic growth? The genesis of economic growth are those individuals who put their money (capital) at risk to start legitimate business enterprises and hire people.

Therefore, to get our business economy moving in the direction of sustained growth, implement these three simple tax policies:

1. Effective January 1, 2010 the Capital Gains tax rate is ZERO.
2. Effective January 1, 2010 the corporate income tax rate is ZERO. Corporations don’t pay taxes, people do (corp. pass on all taxes in higher prices for goods and services).
3. Effective January 1, 2010 the top marginal personal income tax rate is 25%. Eliminate all tax phase-ins, phase-outs, and the alternate minimum tax.

This is the first but very important step. The next step involves the other important economic ingredient–the Federal Govt. spending habit. If the Federal government doesn’t get a rope around its out-of-control spending habit, it will suck vital resources out of the private sector lessening the positive impact of the three tax policies above. Federal spending should not increase any faster than the rate of increase in population and consumer prices. This would currently be about 3% per year. This number includes all Federal spending along with entitlement programs.

If these three actions are implemented, our economy will begin a prolong period of sustained economic growth. The stock market will boom and New Wealth will be created.

It will take guts and determination for a national leader to fight for this.

August 23, 2010: I really doubt that the stock market is going to do much over the next 5 to 10 years. If so, then it is important to own stocks that pay a reasonably good dividend (about 3% or more). Why? From 1972 to 2006, stocks in the S&P 500 that paid a dividend year over year had an average return of 10% per year. Those that didn’t pay a dividend had an annual return of 4%. Be careful though. If the dividend yield seems out-of-line with reality, then something could be amiss. Also, if the dividend per share is more than 50% of its earnings per share, this could be a warning that it may not be sustained. Lastly, many of the companies in the S&P 500 index that pay a dividend have call options available. Selling a covered call is a conservative way of boosting your yield and cash flow. I will have to give an example of this in another posting.

August 20, 2010: Taxation–how much is enough? No one should have to pay to government more than 20% of their income in total taxes. Total taxes in the U.S. would be those taxes paid to the local, state, and Federal governments. Unfortunately, even those in the middle income brackets pay well in excess of 20% of their income (35% to 40%) in total taxation. When you get above the 20% mark, you are becoming a Serf and the government is becoming your Master.

Be Free & Prosperous!

August 19, 2010: Does the U.S. economy really needs the RICH? Yes, folks we really do need them. The top 5% of Americans by income (income over $200K per year) account for 37% of all consumer outlays, while the bottom 80% account for 39.5% of outlays. It has been the rich, not the middle class, that has keep economic growth positive over this past year. This, though, is not sustainable. Their savings rate has gone from positive 26% in 2008 to negative 7% in the first quarter of 2010. The rich will have to cut-back on their spending. This will impact economic growth going forward. In addition, the expiration of the Bush tax cuts on Dec. 31,2010 will further impact the rich and limit the amount they have to spend. This will further impede economic and employment growth.

The parts of the economic machine are interconnected. We need the wealthy to provide the impetus or spark to keep the U.S. economic locomotive moving. You hurt them with higher taxes; it comes back to hurt the rest of society.

August 18, 2010: Prosperity and wealth is not the birthright of any nation, including the United States. Prosperity springs from giving incentives for individuals to productively use their creative energies to better themselves. This includes economic/political policies that encourage work, saving and investment. This means keeping the tax rates on income (both corporate and personal) and capital gains low. Productive investment translates into a higher standard of living for society.

August 17,2010: The trend is your friend. And, so it is when it comes to our business economy. The overriding trend for the next 5 to 10 years in the U.S. economy is a DELEVERAGING process. The consumer must go through a massive process of deleveraging before vibrant economic growth can be sustained. For example, the ratio household debt to income topped out at 132% in 2007–a record. It has sinced fallen to 122% of income. In year 2000 it was at 90% of income and in the 1980′s it averaged 70% of income. It will take a debt ratio of 90% or less to sustain economic growth of over 3% annually. To achieve this ratio, it will be a long and painful process. Unemployment will stay historically high for some time to come.

The future will belong to those individuals and companies that have wherewithal and liquidity take advantage of opportunities.

August 16,2010: A very important equation in the business of life is: MONEY= OPPORTUNITY.

If you tax away opportunity from those who have made it, do you not also tax it away from those who wish to make it? You can’t hurt one without hurting the other. The parts of our economic system are all connected. The politics of class warfare do not work. Economic policies (higher taxes) that try to punish “the rich” will ricochet and hurt all members of society.

August 13,2010: What is the future of employment in the U.S. and, most likely, in the western industrialize countries? I ask this question assuming present policies stay on course. Policies can change, but I have to go by what is not what might be. A recent cartoon in the Wall Street Journal answered the question best. The cartoon showed a line of professional looking men lined up at a job fair. One of the individuals was holding-up a sign in large letters saying “will work for less”. In a recent interview a professional man looking for a job told the interviewer “I don’t care about being overqualified. I will take a pay cut. I want a job.” The year-over-year growth in wages and salaries has turned negative. It will be difficult to sustain economic growth at 3% or more when workers’ pay is not increasing. Now, throw in the scheduled tax increases coming in 2011 and you have perscription for some real economic problems.

Maybe this is what the recent dive in the stock market is telling us. It doesn’t have to be this way. More next week on how to turn the economy around.

August 12,2010: One of the popular themes in western culture is to have “balance” in your life. This sounds pleasing to one’s senses, but in reality it is a bunch of nonsense. All movement in the course of life is turbulent and, therefore, unpredictable. When you are in balance, all the forces are equal and you are stationary. To be balanced is to be stagnant; growth comes out of turbulence. Think about all the great inventions and discoveries that have made life more enjoyable. These were accomplished by individuals who had a driving ambition or goal to be successful. They were not in balance. Out of turbulence can come both opportunity and success.

August 11,2010: It’s Alive, It’s Alive–The Death Cross Lives— The Death Cross occurs when the 50 day moving average of the S&P 500 stock index pushes below its 200 day moving average. It is a very bearish signal for both the stock market and the economy in general. The last Death Cross was in Dec.,2007 and the S&P 500 lost more than half of its value and we entered a serious recession. In early July, 2010 we entered another Death Cross. Beware–the death cross is signaling that we may have some really serious economic problems as we go into 2011 and maybe 2012. Maybe, just maybe, these problems have to due with the massive tax increases that will hit the U.S. economy on January 1, 2011.

August 10,2010: COST-DRIVEN VS. PRICE-DRIVEN PRICING—–Cost driven pricing is taking in all your costs and adding a profit margin on what you sell. Price driven pricing is coming up with a price that will cause your product or service to move. It’s usually a lower price, but with that comes less competition. If you get a handle on costs, become price driven and get market share—you will beat out the competition. In the economy we are in for the next decade at least, the model to follow will be price driven pricing. The GOAL is to get market share.

August 9,2010: The U.S. economy really needs the RICH. Yes, folks we really do need them. The top 5% of Americans by income (income over $200K per year) account for 37% of all consumer outlays, while the bottom 80% account for 39.5% of outlays. It has been the rich, not the middle class, that has keep economic growth positive over this past year. This, though, is not sustainable. Their savings rate has gone from positive 26% in 2008 to negative 7% in the first quarter of 2010. The rich will have to cut-back on their spending. This will impact economic growth going forward. In addition, the expiration of the Bush tax cuts on Dec. 31,2010 will further impact the rich and limit the amount they have to spend. This will further impede economic and employment growth.

August 6,2010: The one thing a government should NOT do is Never, Never raise taxes when you are in a recession or struggling to come out of it. Unfortunately, the Obama administration has not learned this lesson and we will all pay the price. If the expiration of the Bush tax cuts are allowed to happen plus other major tax increases for 2011 are implemented, the economic train will come off the tracks in 2011.

August 5,2010: The Next Bubble: The one that is now being formed in long-term U.S. Govt. Bonds. Once investors realize that our Congress is either incapable or unwilling to reduce the deficit, these bonds will collapse in price sending interest rates much higher in a fragile economy. We are living on borrowed time. Beware of the dangers of investing in long-term U.S. Government bonds.

August 4,2010: Money (capital) goes and stays where it is treated well. With the expiration of the Bush tax cuts on 12/31/2010, the top rates on income and capital gains taxes will be increasing. We will then be faced with the situation where the U.S. will have both capital gains and corporate income taxes significantly higher than the majority of modern western industrialized counties. You don’t have to be an Einstein to figure-out what the economic outcome might be.

August 3,2010: The Purpose of ANY investment is to increase your Net Worth–not to Make Money. When you think in terms of “making money” your thinking tends to be short-sided with the good possibility of making long-term bad decisions. Thinking in terms of “Net Worth” forces you to take the long view. What actions can I take today that will increase my Net Worth or value 5 to 10 years down the road.

August 2,2010: For the trading week ending on July 30,2010, the S&P 500 stock index is still in a Death Cross. For an explanation of the Death Cross please go to http://bit.ly/dm6U1M . What this means that in spite of the recent rally in the U.S. stock market, the primary trend is down. Until the death cross reverses itself, the trend is down.

The Daily Post is a post from: Business Speaker

There are only FIVE generators of wealth in any society. These five are:

1. Fishing

2. Mining

3 Agriculture

4. Manufacturing

5. Construction.

That is the list. Have you noticed what is missing? What is missing is the service industry. The service industry in and of itself is not a wealth producer. It is to be of service to one or more of the five wealth producers. As societies advanced and become more economically productive, the majority of workers are employed in the service industries. If you think about it, this makes sense, but without the five wealth produces the service industry would wither.

The above five are the “what” of the wealth producers. Now–who are they? They are those men and women who put their capital on the line to start a legitimate business. They are called entrepreneurs.

Society should encourage this type of behavior with low taxation with sensible rules and regulations. Unfortunately, in the United States we are going in the opposite direction, and society will pay the price with reduced economic growth and employment opportunities. There are no free economic lunches.

Be Prosperous,

Sanford Kahn, Business Speaker/Author

The 5 Wealth Generators is a post from: Business Speaker

Today, the U.S. dollar is a true fiat currency (meaning it has been decreed a currency the central government).  It has no backing other than the full faith and credit of U.S. politicians.  Scary!  President Nixon ended the last gold backing of the dollar on August 15, l971.

Now, politicians can expand the total debt of the U.S. to pay for any program or programs they wish without having to worry about draining the gold supply from Fort Knox.  If worse comes to worse (it will), they can always print the dollars to pay for their programs.

How long can this game continue.  Simple—it can continue until confidence in the government’s ability to manage its financial affairs is lost.  Then, the game is over.

I can’t predict when, but eventually the U.S. will have to return to some type of commodity backing of its currency.  The result of this will be deflationary.

Your Dollar is Worthless! is a post from: Business Speaker

Those in power (namely politicians) will say that this time it is different. No it isn’t! Looking back at eight centuries of financial idiocy, the key marker that signals when the game is over happens when the ratio of government debt to GDP reaches 90%. Beyond that point financial instability and a loss of confidence by investors start to take over.

In addition, there will be a dramatic slowing of economic growth by at least one percentage point per year compounded. The ratio for the U.S. in now 92% and still exploding. Once this ratio reaches 100% of GDP (very soon), the United States will, most likely, lose its AAA credit rating. We will become another Greece with all the ramifications. The loss of our AAA credit rating will substantially raise interest rates throughout the economy. The biggest impact will fall on real estate prices—and you thought real estate prices have bottomed out.

If nothing is done to rein-in this excessive and wasteful debt explosion, the next recession will be long and deep. The only glue that holds the U.S. economic machine together is confidence. Take that away and watch out below.

My advice that I have for you is the saying on the bottom of my business card–”Liquidity Is King–Not Elvis.”

Be Solvent & Free,
Sanford Kahn

The Game is OVER! is a post from: Business Speaker

I can not in all honesty tell you how to solve each and every problem you have. But, I can tell you this that NO problem can be solved from the same level of consciousness that created it. I wish I can take credit for this observation, but the credit is due to Albert Einstein. In other words, what he is saying is that no problem (personal or professional) can be solved within the paradigm or model it was created inside of. You will have to reach outside of the proverbial box to come up with a solution to solve or, at least, manage the problem. This takes a creative imagination.

Be Prosperous,

Sanford Kahn, Business Speaker/Author

The Fine Art of Problem Solving is a post from: Business Speaker

In the popular media December 21,2012 is portrayed as the terminus date of the human race as we know it. Since this is widely broadcasted in the media, it, most likely, will not happen in the expected manner. What could happen is the unexpected and unthinkable.

The year 2012 may not be the end of the Earth or even mankind—but it could be the end of our constitutional economic/political system. Why? By the year 2012, with the U.S. Federal Government rapidly increasing its total debt, we will have a debt to GDP ratio of over 100%. The interest on this debt will be staggering and unaffordable. The politicians in Washington will take the easy path out and try to inflate the debt away.

The consequences of this will be shocking to our political system. Inflation is the Great Destroyer of the middle class. Standards of living for the vast majority of Americans will decline precipitously. With our social fabric weakened or non-existent, I doubt the middle class will peacefully standby and see their savings and living standards destroyed. There will be chaos and bedlam in this country. The unthinkable can then happen–a quasi civilian/military dictatorship to restore order. Kiss the Bill-of-Rights goodbye.

Right now–I admit– the probability of this happening is remote. BUT, it is not as remote as it use to be.

Be Prosperous,Sanford Kahn, Business Speaker/Author

2012–Adios Mankind?? is a post from: Business Speaker

Why not buy shares in a very large integrated oil company that pays a good dividend and sell a call option against these shares to generate extra income. A call option gives someone the right (not the obligation) to buy your shares from you at a certain price within a certain time limit.

For example, let’s say you buy 100 shares of Exxon Mobile Corp. (symbol XOM) at today’s price (Apr. 12, 2010) for $6,871.00. You sell a call option for someone to buy your 100 shares (one call option =100 shares) from you between now and the third Friday in October for $7,000. For this you will receive $274.00 (today’s closing price). This $274.00 is yours to keep no matter what.

Assuming prices remain constant (which they will not), what is your annual rate-of-return? You earned $274.00 in six months or $548.00 on an annual basis. Divide $548.00 by the cost of your 100 shares of XOM ($6,871) and you get an annual return of 8.0%. In addition, you earn a 2.40% annual dividend return on your 100 XOM shares. This gives you a total annual return of 10.4%. Not bad, but there are risks.

RISKS: There is no such thing as a riskless investment. If your 100 shares stays at or north of $6,871, you will make your 10.4% return. Of course, if it should shoot up to $90/share, you could have made more by just owning the shares and not selling a call option. But, this is a hedging investment strategy.

The real risk: Oil is a commodity and it can and most often is very volatile in price swings. If the price of oil should plummet, so will the price of XOM stock. You will then incur a real loss. The premium you collected, $274.00, will give you some downside protection but not enough in a highly volatile market.

FINAL NOTE:

You should only employ this investment strategy if you feel it is suitable for your investment objectives

. In the calculations above, I omitted commission costs. If you wish to employ this strategy, do not use a full-service brokerage house. Their commissions will decimate your rate-of-return. You should use a discount broker and do it online.

How to Protect Yourself From Rising Fuel Costs is a post from: Business Speaker

I wrote the book,

The Thirteen Great Economic/Business Myths That Dominate Our Lives

, to give individuals a different and unique insight into some of the great myths that have a profound impact on our lives. The most important chapter is #12 on How to Prosper in the Coming Age of Poverty and Privilege. This should be read first. The next most important chapter is #10 on Positive Mental Attitude Myth. Read this next.

The book is available on amazon.com for $9.95 plus shipping

. I strongly encourage you to purchase this book. We are in a different economic environment than what existed before 2007 and the same-old, same-old will Not work.

To order, please go directly to
http://www.amazon.com . In the Search Box put in “Books” from the drop down menue. Type my name,sanford kahn, in the adjacent open space and then hit the GO button.

If you want to prosper, then you have to escape the gravitational pull of inside-the-box line of thinking. This book will help. Please order and read it.

Be Prosperous,
Sanford Kahn, Business Speaker/Author

http://www.businesstrendspeaker.biz/welcome

PS A quote from Mr. Mark Lambert, CEO-Real Estate Development, Mission Viejo, California

Society’s MYTHS that Screw Us UP is a post from: Business Speaker

Forward

About the Seven Precepts

The Seven Precepts were developed to give people a different and realistic view on life and events—devoid of popular myths and seductive illusions. They are based in part on my 30 years of experience as an economic/business author and speaker. The precepts are based on the classical definition of economics—the study of human behavior in its historical setting. In other words, economics is psychology.

These precepts are unique in that they are the result of combining the laws of economics, sociology, and physics into a set of seven basic statements to be used as a guidepost, to make your life more enjoyable and understandable. They are not religious dogma, but instead are a reference for confronting and resolving many of life’s conflicts.

Precept #1

The eternal truth of the universe is that all actions provoke reactions. In human terms these reactions or consequences may be positive or negative. Someone or something has to pay a price or cost. There are no free lunches.

For example, in interpersonal relationships, honest communication is both important and essential. You can control the “what and when” of your communication, but you can not control the resulting impact (positive or negative) it has on the other person. This, honest or otherwise, is the cost or price of your communication.

Another example—in economics you can not simultaneously control the cost and quantity of any product or service. If you try to control the cost (price controls), the quantity (and quality) decreases. This is the result of trying to control the price of any product or service.

There are always consequences or costs to any action taken by an individual and their consequences have to be weighed against the cost of the proposed action.

Precept #2

In physics there exists a law titled the “conservation of matter”. It basically states that matter can not be easily created or destroyed. However, the states of matter can be changed. For example, by applying enough heat to a solid you can transform it into a liquid, as with ice. A liquid heated to the boiling point can be changed into a gas. In all cases they are still the original matter, but in a different state.

In a similar vein, using the law of the conservation of matter, there exists in all societies a conservation of personal power. It states that Personal Power can neither be created nor destroyed, but it can be transferred.

Societies have two and only two broad options

. Through their respective governments, they can institute policies that will empower the individual or policies that will empower government. If you wish to empower the government for greater economic stability, then you must transfer some of your personal power to it.

There are consequences to both broad options (Precept #1). One set of policies will lead to a growing set of opportunities for advancement while the other will lead to dependence and stagnation.

Precept #3

The purpose of life is to grow and prosper within the rule of law and the bounds of morality.

Among human beings, the notions of growing and prospering are subjective, that is, they are individually conceived. If prospering to you means sitting on a mountaintop pondering your existence, so be it. On the other hand, you may wish to grow and prosper and add to the wealth of your society by opening up a legitimate business enterprise. The latter is more preferable than the former because it adds to the wealth and well being of society.

The above paragraph begins with the phrase “the purpose of life”. Many individuals who ponder their existence ask the perpetual question—what is the meaning of life? This is a difficult question to answer because they are asking the wrong question.

You find meaning for your life within the context of its purpose. Define that first and then a better insight into the meaning will follow.

Precept #4

All movement in the flow of life is turbulent and, therefore, unpredictable. In other words, life isn’t linear (a straight line). As a result of the turbulent flow of life, the future is unknowable. Predicting the future is an exercise in probability analysis. For example, if I take these actions now, there is a 70% probability that in two years I shall arrive at this outcome.

Turbulence almost guarantees that it is not a question of if something will go wrong with your life plans, but what and when? Therefore, in designing your life strategies plan in broad strokes and have a fallback position.

Given the turbulent nature of life and its unpredictability, the question for you should be: “how do I capitalize on its opportunities”? The future belongs to those individuals who can quickly discern, adapt to, and exploit the unpredictable movements in the turbulent flow of life. Stagnation produces nothing over time but decline.

Precept #5

The purpose of ANY investment is to increase one’s net worth. The term “net worth” applies to more than stocks, bonds, or real estate. You, your family, and your community can also be viewed as an investment.

Thinking in terms of increasing one’s net worth forces individuals to expand their time horizons. What actions can I take today that will increase my net worth or value over the next 5 to 10 years? For example, why do individuals invest their time and money in going to college or trade school? Obviously, they are not making significant monies while attending school. But, they are learning a particular profession or trade (skills) that will increase their Net Worth or value in the marketplace. By so doing, they will have the potential of increasing their incomes.

Precept #6

God is no tyrant. He enforces no preordained plan for the conduct of human affairs but, instead, has bestowed upon the people the power to create a heaven or hell on Earth. Whether man thrives or perishes is dependent on the choices he makes.

I realize that this precept may be controversial and even heretical to those who believe in some divine plan for mankind. There is a divine plan but it is so simple it flies over the heads of the majority of mankind. The plan is—there is no plan, only the one you create.

At this point it would be wise to re-read Precepts #1 & 2. Every choice has a cost or consequence.

Precept #7

Mortals can’t be perfect. We are not designed that way. You might say this by definition. Only God (however you define it) is perfect.

When mortals try to be perfect the result will be nothing but problems and potential disaster. Why? There is an old Greek saying that explains why the path of perfection for mortals leads to disaster. It is: for whom the Gods will destroy they first make overconfident. When individuals are overconfident they charge ahead oblivious to the dangers and crosscurrents that await. In other words, they are oblivious to the consequences (risks) of their actions (precept #1).

While mortals can not be perfect they can be better. As Ben Franklin noted centuries ago—best is the enemy of better.

Epilogue

“To be balanced is to be stagnant: growth comes out of turbulence”.
Sanford Kahn

The 7 Basic Precepts That Govern Life & Events is a post from: Business Speaker

There is an old Greek saying that rings so true today. It is—for whom the Gods will destroy they first make overconfident. There is a subtle difference between being confident and being overconfident.

When you are confident in designing your plans or strategies, you have a belief in yourself and your abilities. But, as a mortal, you recognize that there is a possibility of failure—even if no fault of your own. You have done your homework and feel strongly that the odds of success are in your favor. This is called a calculated risk and we all take them. Recognizing that events can move against you, you have taken this into account to mitigate any negative developments.

Now let’s move on to overconfidence. When one is overconfident, he or she feels that their plans or strategies will succeed no matter what happens. In other words, there is no chance of failure. Failure is out of the question. As a result, there is no downside exit strategy in case success eludes you. This is a pure prescription for collapse. Why?

Mortals, by definition, are imperfect beings; only the Gods are perfect. Overconfidence is the terrain or territory of the Gods. Mortals can not enter here. Mortals are allowed to be confident but not overconfident. When mortals get overconfident, the Gods get jealous and take their revenge. You have stepped on their territory and events will go against you.

In designing your plans or strategies (on a personal or professional level) be of a confident nature, but make contingent plans in case a quick exit is needed. You can always step up to the plate again.

Be Solvent & Prosperous,
Sanford Kahn, Business Speaker/Author

The Gods and Mortal Overconfidence is a post from: Business Speaker