Monday, April 7, 2014
The Entitlement Trap
My experience in teaching and business is noticing an increasing behavior among students and employees, the sense of entitlement. That sense of I am entitled to an “A” in a course, a wonderful letter of recommendation, or a starting salary far above the market, all without the proper effort or professionalism necessary for those benefits and rewards.
Want to know what keeps the owners of the most successful family businesses up at night? The dread that their kids will grow up to be entitled.
That said, in reality, money turns out to be a less important factor than one might think in the development of entitlement. Some very wealthy kids turn out to be highly motivated and engaged – I see this in my work every day. My experience also suggests, however, that kids don’t mysteriously end up entitled; there are some common choices parents – all parents – make to a greater or lesser degree that substantially increase the odds that kids end up feeling that the world owes them a living. These choices are often made with the best of intentions, but they work against the long-term interest of our children.
How do you avoid the entitlement trap? There are no pat answers. What I have learned from my work with family businesses is that you can start by asking yourselves questions. This is not a scientific formula, but the more “no” answers that are scored, the greater the likelihood that you are putting your children on the path to entitlement.
Do they hold down jobs? Kids that have jobs – even part-time or volunteer jobs – are more successful, both personally and professionally, than those who don’t. In an informal study of what people shared who made it to the C-Suite, one major American bank singled out height and summer jobs. There’s not much you can do about height, but work brings enormous discipline and learning. Jobs are also tremendously grounding, psychologically: they keep kids from being bored, one of life’s great vices. What I also see with glaring clarity in my work is that parents are blind to the strengths and vulnerabilities of their children. It’s hard to be objective. Jobs give your child the chance not only to gain experience, but also to get honest feedback. Reality is one of the best ways to combat a false sense of entitlement.
Can they build careers? Sometimes the next generation just can’t get traction, and they’re not entirely to blame. Alarmingly, in about a quarter of the client situations I work in, I see adult children being set up to fail. Owners sometimes give members of the next generation hopeless assignments – for example, they are asked to turn around a losing business that has no chance of becoming profitable. Typically, this is done out of a desire to have the adult children understand, even relive, the experiences of the parents, who have almost always had to overcome tremendous challenges in order to succeed. The same thing can happen outside a family business, when adult children are forced into careers and professions in which they have no interest, and often no talent. Not surprisingly, they often don’t do well. Paradoxically, too much disappointment can also lead to entitlement. When even our best efforts are not good enough, it often seems better to just sit back and wait for life to be delivered to us on a silver platter.
Are they allowed to suffer? Life is like the stock market: it’s up and down, and there is risk involved. Don’t set your kids up to fail, but don’t shelter them from fate’s hard knocks. Let your children feel the pain – it builds resilience. Indeed, research shows increasingly that resilience flourishes in an environment of tough love. After that, everything else is the adult child’s responsibility. This discipline wonderfully concentrates everyone’s mind on the vital difference between wants and needs, and nips entitlement in the bud.
In my experience, the way that the most successful business families curb the next generation’s sense of entitlement is by staying involved in their kids’ lives. If they fail to get some quality time, your children turn to money as the next best substitute. That sounds trivial, trite, perhaps even a platitude. But every child is entitled to love. The rest is gravy.
Thank you Josh Baron and Rob Lachenauer for background information.
Next week the Entitlement Trap in older adults.
MILESTONE -- March Was The First Month Without A U.S. Combat Death In More Than A Decade: March was the first time since July 2002 that there were no U.S. combat fatalities anywhere.
SCOTUS TRIMS CAMPAIGN FINANCE RULES - The Supreme Court ... continued its abolition of limits on election spending, striking down a decades-old cap on the total amount any individual can contribute to federal candidates in a two-year election cycle. ... Wednesday's decision seemed to alter campaign finance law in subtle but important ways, notably by limiting how the government can justify laws said to restrict the exercise of First Amendment rights in the form of campaign contributions.
Last Wednesday's decision did not affect familiar base limits on contributions from individuals to candidates, currently $2,600 per candidate in primary and general elections. But it said that overall limits of $48,600 by individuals every two years for contributions to all federal candidates violated the First Amendment, as did separate aggregate limits on contributions to political party committees, currently $74,600.
McCUTCHEON MONEY - Big money's grip stronger than ever, the Supreme Court's decision in McCutcheon v. Federal Election Commission tore another hole in a regulatory framework so tattered that even ardent campaign finance regulators sigh over its impotence. ... There are still a handful of meaningful limits on political giving: Donors cannot give more than $5,200 directly to a single candidate over the course of an election cycle. Their contributions to party committees are capped as well. ... The money, however, is still there - just channeled from megadonors, corporations and heavily funded interests through a range of exotic independent-spending organizations, instead of through political parties.
It adds up to what many call a worst-of-both-worlds situation in which money pours into politics at a historic clip, but often to unaccountable outside entities that can push around candidates every bit as readily as the million-dollar party donors of old. In that sense, some campaign attorneys argue, finance regulations may have made the influence of money even more acute or at least less transparent, driving funds away from candidates and parties and toward shadowy outside groups.
COUNTRY MUSIC AWARDS -- The 49th Academy of Country Music Awards (in Vegas, airing on CBS). George Strait, Miranda Lambert, Keith Urban and Kacey Musgraves carried home the best trophies ... but Lambert's husband, Blake Shelton, and his co-host Luke Bryan may have been the biggest winners. ... Shelton joked that the show was their tryout for David Letterman's job ... Shelton and Bryan, who have given themselves the celebrity name 'Bluke,' suggest[ed] they recreate Ellen DeGeneres' selfie moment ... They went down the front row rejecting one star after another. They rejected Jason Aldean because he isn't 'big enough' and said of Tim McGraw in sing-song unison, 'Boring!' 'Honestly,' Shelton said, 'I think we're the biggest celebrities in the room.'
FOUR PRESIDENTS - Obama, Bush 43, Clinton and Carter - will be together Thursday in Austin at the LBJ Presidential Library's Civil Rights summit, which begins tomorrow and runs through Thursday. All four will speak in honor of the 50th anniversary of the Civil Rights Act.
BIRTHDAYS THIS WEEK – Birthday wishes and thoughts this week to: Gov. Jerry Brown (76), Francis Ford Coppola (75), Russell Crowe (50), Andy Garcia (58), Davis Love III (50), John Oates (65).
COLLEGE CHRONICLES – Since 1955, California has provided a vital funding bridge to higher education for needy students. The Cal Grant program, which has provided funding for more than 2.3 million students in the state since it was launched, is in jeopardy.
The 59-year-old program has always been a partnership between the state and its public and private colleges and universities, and that partnership has greatly expanded opportunities for the youth of this state. It has allowed students from low-income families to attend higher education institutions of their choice, whether they opted for a public university like UCLA or San Jose State University, or a private one like University of La Verne or Loyola Marymount University. Though I believe both public and private institutions still need to modify their Business Model to limit salary inequities and out of control overhead expenses (see AAUP report below).
That parity for public and private institutions was an essential part of the whole Cal Grant program, which was originally devised specifically to help enable qualified California high school graduates to attend private, nonprofit institutions if they so choose, rather than public ones. But that kind of choice is in jeopardy because of cuts to the Cal Grant awards available to students who choose private schools over state schools.
Over the last decade, the amount of grants offered to students attending private institutions has been severely eroded by inflation. More recently, state budget cuts have slashed the maximum award to such students by 6%. And for the 2014-15 school year, things will be even worse: Incoming students at private, nonprofit universities will face an additional 11% cut, which will bring the maximum grant to $8,056, the lowest in 16 years.
I invite you to consider signing an online petition addressed to the governor and legislature, requesting that Cal Grant funds remain intact. You can access the petition by visiting http://chn.ge/1hZ7L1P directly or by visiting www.studentsfirstalliance.org and clicking on the link to sign the petition.
AAUP, Annual Report on the Economic Status of the Profession, 2013-14:
The left side of table 1 provides the percentage change in average salary, which is a measure of the increase in the salary paid for a given faculty position rather than in the earnings of individual faculty members. The bottom row of the table indicates that the average salary for a full-time faculty member increased by 2.2 percent this year at those institutions that responded to the AAUP survey for the last two years. The table provides percentage change in the figures for the four upper faculty ranks at each type of institution surveyed and illustrates the variation among the different institutional categories and faculty ranks. As has been the pattern for a number of years, the increase at private-independent institutions overall was higher than that at public institutions, due almost entirely to the disparity in the salary change in doctoral universities for those two sectors.
The right side of table 1 presents a measure of changing salaries that is unique to the AAUP survey: the average change in salary paid to a continuing faculty member who has remained in his or her position at the same institution from the previous year. The percentage increases reflected in the table could be thought of as the “average raise” an individual faculty member received this year, and those figures include increases from all sources: promotions, merit raises, and across-the-board salary adjustments. In the aggregate table, all the figures are positive this year, meaning that salaries rose on average—but that is certainly not the case at every institution. The “bottom-line” overall average increase for continuing faculty members this year was 3.4 percent, and the pattern by type of institution was similar to that observed in average salaries. The continuing faculty figure is almost always higher than the overall increase in average salary, since the former includes only faculty members who have added a year of experience. The broader figures from the left side of the table reflect the continuous churning of faculty members through positions, as senior faculty members depart and are most often replaced by faculty members at lower salaries, keeping the overall averages down.
TAX TIPS – for freelance bloggers. If you write a blog for someone else and get paid for your work, then you need to claim that income on your tax return. Most freelance bloggers are not considered full-time employees. That means you may or may not have completed a W-9 when you started working for a client and you may or may not get a Form 1099 at tax time from that client.
But what are those forms and what should you do as a freelance blogger to make sure you have all the paperwork you need and take the right steps to file your tax return properly? Read on for help, and consult your tax professional to be certain you're following all the rules.
What's a W-9?
Some of the employers who pay you to write blog posts, particularly larger companies, will require that you fill out a Form W-9 when you begin the job. This form identifies your work to the IRS as being done as an independent contractor, and the employer is not required to deduct taxes from your pay. The IRS still wants that money though, so you're responsible for paying those taxes. Don't get stuck with a huge tax bill at tax time each year. Instead, check out these tax tips for freelance bloggers to make sure you're ready.
What's a 1099?
Those clients that require you to complete a Form W-9 when you begin freelancing for them may or may not provide you with a Form 1099 at tax time. This form documents the amount you were paid throughout the tax year, so you can include the amount in your tax return and pay the corresponding taxes through your annual tax bill (or quarterly tax bill if you pay quarterly estimated taxes). Keep in mind, not all employers that have you submit a W-9 are required to provide you with a Form 1099 at tax time. The onous is always on you to declare all of your income on your tax return and pay taxes on that income.
What Records Do I Need?
In addition to the 1099s you might receive when the tax season begins, you need to keep records throughout the year. Keep all documents related to the money you made throughout the year as well as all expenses you incurred that you can deduct on your tax return. Learn more about tax deductions for bloggers.
Should I Consult a Tax Professional?
The best answer to this question is - yes, particularly the first year you work as a freelance blogger. Not only can a tax professional help you classify your blogging business, but he or she can help you understand your individual tax situation and plan for future tax returns so you file your returns accurately while positioning yourself to receive the maximum refund or pay the lowest tax bill possible.
COLLEGE HOCKEY PICK OF THE WEEK – Thursday 4/10, 5:00 PM ET (ESPN2): NCAA Final Four semi-final, #1 Union College Dutchmen (30-6-4) vs. #3 Boston College Eagles (28-7-4). A great matchup for the National Semi-Final, Union wins in OT 4 – 3. Season to date (7-5).
THE SWAMI’S WEEK TOP PICKS –
(MLB, April 12) Boston Red Sox (3-3) vs. New York Yankees (4-2). Another season of The Rivalry, Yanks win this one 6 – 4.
(NHL, April 12) Vancouver Canucks (35-32-11) at Edmonton Oilers (28-42-9), what better way to celebrate the end of the NHL season with Canada’s worst, Oilers win 4 – 3.
SCIAC Game of the Week (Sat. April 12-baseball) Whittier Poets (18-10) vs. California Lutheran Kingsmen (22-6). First place on the line, Kingsmen win 8 – 5.
2014 Season to date (22-25), ouch!
WORDS OF THE MONTH –
wamble \WOM-buhl, -uhl, WAM-\, verb:
1. to move unsteadily.
2. to feel nausea.
3. (of the stomach) to rumble; growl.
1. an unsteady or rolling movement.
2. a feeling of nausea.
“I'll have to take you there. It's a cheery sensation, you know, to find a man who has some imagination, but who has been unspoiled by Interesting People, and take him to hear them wamble.”
-- Sinclair Lewis, Our Mr. Wrenn: The Romantic Adventures of a Gentle Man, 1914
Pérdida is the noun from perder. It covers the range of meanings that loss covers in English, referring to both concrete and abstract things.
The phrase es una pérdida de tiempo means it’s a waste of time:
“Es una de pérdida tiempo y dinero.”
It’s a waste of time and money.
DRIVING THE WEEK - The White House and Democrats in the Senate this week will coordinate messaging on "paycheck fairness" and other issues (see more below) ... JPMorgan and Wells Fargo kick off bank earnings on Friday ... Consumer credit today at 3:00 p.m. expected to expand by $14.1B ... NFIB survey Tuesday at 7:30 a.m. expected to rise to 92.3 from 91.4 ... JOLTS report at 10:00 a.m. Tuesday will be closely watched for the quits rate, which dipped to 1.7% in January ...
FOMC minutes Wednesday at 2:00 p.m. may offer some detail on the decision to drop the 6.5% UE threshold for rate action ... Producer prices at 8:30 a.m. Friday expected to be up 0.1% headline and 0.2% core ... Univ. of Michigan consumer sentiment at 9:55 a.m. Friday expected to rise to 81.0 from 80.0.
Next week: Spring dessert and Dear Rink Rats.
Until Next Monday, Adios.
April 7, 2014