Anyone who has visited this website has certainly noticed its star: a whimsical little hedgehog created by Rachelle Meyer. I’d like to draw attention to her current project (which I love!) “Faces on the Ferry”. Rachelle, an American illustrator living in Amsterdam, has been using her daily commute (a twelve-minute ferry ride) to sketch fellow passengers. She’s launched a Kickstarter to convert some of her sketches to prints and help her launch a parallel career as an independent artist.
Her Kickstarter is wrapping up this week. She’s been working her tail off, on social media, by interviewing and through old fashioned print (posters on ferry itself) to get the word out. The campaign is all or nothing, so if she doesn’t make her goal, it doesn’t go on. Please check her Kickstarter campaign here, and if you’re able, donate!
Video from Rachelle’s Kickstarter campaign:
The process geek in me really likes the idea because it’s a great example of “timeboxing”, which caps the amount of time that can be spent on an activity. The idea is to prevent endless tinkering. Here’s Rachelle on AT5 Amsterdam News, doing a sketch on the ferry (interview in Dutch).
Rachelle’s a Texan who came to Amsterdam by way of New York. She explains to Hiraeth Magazine how each place influenced her work, and how she admires the how Texans are mavericks.
Her interview with The Crazy Mind touches on how the idea was born, on how living in Amsterdam is a fairy tale, and how the changing seasons and light affect her work.
Finally, Gumclub provides a good synapsis of the Kickstarter (In Dutch).
I’ve been thinking a lot this year about my finances. Since moving overseas, I’ve held my own, which is no small feat, but now it’s time to start thinking long-term. I’ve made it a point in 2018 to get my financial house in order: by earning more, paying down debt and building my client base.
My new motto comes from Michelle Singletary:
Here are some of the books and articles I’ve been reading:
Nuts and Bolts: The 7-Day Financial Tune-upAfter a short survey, you’ll get a daily email assigning various tasks to help you tackle your finances. Topics range from pulling your credit, budgeting, retirement planning and my favorite “Optimizing your thinking”, which helped me prioritize what I should be spending my money on. The advice comes from experts hired by the New York Times who have decades of financial experience.
My Year of No Shopping by Ann Patchett. I enjoyed this article even though I have no intention of trying it. The author, by setting such a stringent goal, had to address some of the psychological reasons for why she bought what she did: like feeling compelled to buy a new dress when interviewing someone she hadn’t met before. This experiment left her with a sense of gratitude for what she already had.
If You Can: How Millennials Can Get Rich Slowlyby William Bernstein. Several years ago, William Bernstein, a financial writer and trained neurologist, published a free book/reading list (now $1.27) to help millennials with investing. It does a good job of avoiding the condescending tone often directed at young people who are supposedly wasting all their money on avocado toast. His investment advice is easy to understand but difficult to follow: save 15% of your salary throughout your career. Bernstein’s list of books help investors avoid the various hurdles that prevent that from occurring. I haven’t made it through all the books he recommended, but here are some highlights from those I have read:
The Millionaire Next Door by Thomas Stanley and William Danko. An older book that remains relevant. Danko and Stanley’s survey of wealthy Americans found that they tend not to be ostentatious with their wealth. The book’s premise: spending a lot of money to keep with your peer group impedes your ability to build wealth. I got some unexpected tips from this book, like how to shop for a reliable used car.
Common Sense on Mutual Funds by Jack Bogle. It pains me to say this since Jack Bogle is one of the titans of finance, but I found this book long and repetitive. Tip: listen to Freakonomics’ podcast, “The Stupidest Thing You Can Do with Your Money” for a synopsis. Bogle is the founder of Vanguard, an investment company which is known for charging extremely low fees for Exchange Traded Funds (ETFs) based on market indexes like the S&P 500.Bogle’s crusade is against high mutual fund fees that erode investment returns. He estimates that fees on US mutual funds tend to be about 2%, and these funds would have to outperform the market by 2% for their investors to get a better return. From Freakonomics:
If the market return is 7 percent and the active manager gives you 5 after that 2 percent cost, and the index fund gives you 6.96 after that four basis point cost — you don’t appreciate it much in a year — but over 50 years, believe it or not, a dollar invested at 7 percent grows to around $32 and a dollar invested at five percent grows to about $10. Think what an investor thinks about when he looks at that number. He says, “Wait a minute! I put up 100 percent of the capital. I took 100 percent of the risk and I got 33 percent of the return.” Well, anybody that thinks that’s a good deal, I’ve got a bridge I want to sell them.
I enjoyed Bernstein’s book, and intend to finish the reading lists which cover topics like market psychology and history. However, I was disappointed that he did not address how the job market for Millennials and Gen Xers has changed from the one he was in. We are more likely to experience job loss or make a living doing freelance work and it’s not always feasible to save anything at certain points in our careers, much less 15%. It’s called If You Can for a reason.
I recently passed the inburgering exam in the Netherlands. Inburgering means assimilation in English, and the test that requires that certain immigrants learn how to read, speak, and write on a basic level (A2) as well as understand Dutch cultural norms. This is an updated post from my blog, Possibly Netherlandish, that discusses using deliberate practice techniques from Peak: The New Science of Expertise by Anders Ericsson to improve my Dutch.
In August 2016, I introduced specific goals to improve my Dutch. The idea came from a Freakonomics podcast, How to Become Great at Just About Anything. I felt that I needed to do something to improve my Dutch. I kept advancing in my classes, but just barely, and I couldn’t shake the fear that I had plateaued some time ago.
The podcast interviewed Anders Ericsson, author of Peak, to discuss how (whether?) it was possible for anyone to become an expert at anything. Steve Levitt, an economist at the University of Chicago sums up Ericsson’s premise as:
“…absent hard work, no one is really great at anything.”
If you start with someone with talent, and another person who has no talent, the person with talent works just as hard as the person who has no talent, almost for certain they’re going to have a better outcome. So, if our measure is true virtuosity, true expertise, it seems unlikely to me that this populist version of “oh, you don’t have to be good; you just have to try hard,” I think that’s probably a fallacy. But I firmly believe the other direction, which is that: if you don’t try hard, no matter how much talent you have, there’s always going to be someone else who has a similar amount of talent who outworks you, and therefore outperforms you.
What really drew me in was one of Ericsson’s examples: the show interviewed a Danish psychotherapist, who wanted to do an experiment testing Ericsson’s deliberate practice technique. Her goal wasn’t related to her profession; she wanted to SING like Whitney Houston. So, she tracked down the best singing coach in Copenhagen, and was somehow able to persuade him to instruct her. Freakonomics aired a tape of her singing before the lessons, and she sounded exactly like a Danish psychotherapist who wanted to sing like Whitney Houston. After a year and a half practicing, she was ready to quit. She wasn’t able to get the “big” sound that she wanted, but her coach kept encouraging her – unlike her, he could tell she was improving and was close to a breakthrough. Long story short: she improved enough to have a hit on the Danish charts. Who wouldn’t want learn about deliberate practice after hearing that?
How does it work?
In Peak, Ericsson states that how you practice is critical. Purposeful, or deliberate practice, must employ the following methods:
Well-defined, specific goals. “Purposeful practice is all about putting a bunch of baby steps together to reach a longer-term goal.” Ericsson’s example of an insufficient goal, is wanting to decrease your golf handicap by five strokes. An example of a specific goal would be to create goals that help you assess what is necessary to decrease your golf handicap: e.g. by increasing the number of drives landing in the fairway, and then determining what needs to be done to achieve that.
Focus. It is not just the hours of practice that makes someone exceptional in their field, it’s how those hours are spent. Someone who does not go back and specifically address their mistakes is not going to improve past a certain level. Ericsson provides an example of someone learning to play tennis for fun: first, he would practice hitting the ball against the wall, then take lessons, and eventually go out to play games with friends. Basically, that tennis player can become competent over time but will continue to have weaknesses that a skilled player can exploit, like a weak backhand. If that player never specifically practices his backhand, it will not improve no matter how many games he plays.
Getting out of your comfort zone. “This is a fundamental truth about any sort of practice: If you never push yourself beyond your comfort zone, you will never improve.” My partner is an avid soccer player. She’s crazy about it – if she’s not playing soccer, she’s reading, watching or thinking about it. She feels that while it’s uncomfortable to be one of the weaker players on a stronger team, it is the only way to improve. On better teams, she gets more feedback, and she believes better players elevate her game. Without challenging yourself by getting out of your comfort zone, the chance of plateauing increase. This plateau is often mistaken for a limit in someone’s ability, but Ericsson states that it occurs because that person did not challenge herself enough to push through and improve.
How successful was I in implementing Ericsson’s ideas?
Overall, I felt that this experiment was worthwhile and did help me improve my Dutch a bit. Also, a year later, I passed the Inburgering exam, so that’s something. However, after finishing Peak, I realized that my goals fell short of deliberate practice. They weren’t specific enough, and I substituted quality for quantity. I should have created a goal around each practice that would allow me to assess how successful that practice was. For example, a better goal would be to improve my writing in Dutch by creating a test of irregular verbs, taking it once a week, reviewing my mistakes and gradually improving my performance.
As for focus, I didn’t solicit feedback as much as I should have. That feedback would help determine what I practiced. I passively watched television, without much assessment of whether I had understood what was said. When I spoke Dutch either with my partner or at the language lab, I wasn’t always corrected, and if I was, there was little follow up on the mistakes I had made.
The language lab did get me out of my comfort zone. It was something that I enjoyed more than I thought I would, since friendly people and beer are never a bad combination. However, a better way to improve would be to discuss a variety of topics with patient Dutch speakers or people who have successfully learned the language.
What I enjoyed most about this book is its optimistic premise – that a person excels through deliberate practice rather than relying on innate talent. My main take away is that a month-long goal is insufficient. The work needs to be done consistently with commitment and focus to see sustained improvement.
Have you heard of the “Hedgehog Concept”, made famous from in Jim Collins’s book Good to Great?
The fox knows many things, but the hedgehog knows one big thing. – Archilochus
The gist of the “Hedgehog Concept” is that while a fox is cunning, the hedgehog knows “one big thing”, and can use that skill to outsmart the fox. Jim Collins didn’t invent the story; the parable was first written by a Greek poet named Archilochus thousands of years ago. While Collins’s interpretation is unambiguous, (spoiler alert – you want to be a hedgehog!) this parable and what it means has been debated for thousands of years.
Hidden Brain’s The Fox and the Hedgehogpodcast is fascinating because it looked at the parable in a completely different way. Instead of being about business, it was about different cognitive styles. Hidden Brain’s host, Shankar Vedantam, sums up “one big thing” this way:
There are different ways to think about the metaphor, but here’s how I see it. If a fox wants dinner, it has many options. It can chase down a hedgehog. It can find something else to eat. It can even go without food for a day. But if you’re a hedgehog being chased by a fox, you don’t have multiple goals. You have one overarching idea – DON’T GET EATEN.
– Shankar Vedantam
Hedgehogs are visionaries guided by a single organizing principle, whereas foxes employ different strategies and are more comfortable with nuance, but lack a coherent worldview.
The show focuses on one hedgehog, Don Laub, a surgeon who became a leader in the transgender movement and created one of the first international medical missions. He took big risks without considering the consequences; risks that sometimes ended in tragedy.
One of his former patients was interviewed about her interactions with Don before her gender reassignment surgery. Take a look in their differences in thinking:
At some point, he asked me if I were 100% committed to wanting surgery. And I said, no, I’m not. I’m probably 99.9%. I think anyone who is 100% committed to anything is probably crazy. You have to have some reservations in life. You have to have an overview of everything that you’re doing and have alternative plans if what you’re looking for doesn’t work out. And Don said, well, in that case, you’re not eligible for surgery. You have to be 100% committed.
I try to attend the NACHA Payments Conference every year to keep up with trends in the US payments industry. This year it was in Austin, TX (yay!) My main takeaways/scoop:
Zelle, a payment network launched by Early Warning, generated a lot of buzz with their person-to-person (P2P) network targeting banks. Zelle allows bank customers to send, request and split payments through their bank’s mobile applications (something folks in Europe have done for a while now). Zelle’s platform helps banks compete with payment apps like Venmo.
John Meyer, Chief Product Officer at Banker’s Toolbox, gave an entertaining, illuminating and frightening presentation over the Dark Web. Online fraud will only increase in the US after the EMV (chip and signature) implementation, and John’s presentation allowed us to peak behind the curtain and see what tools are at a fraudster’s disposal.
NACHA awarded their Excellence in Payments Award to Earthport, a cross-border payments network.
Melanie Barteaux from Accept Email, gave an informative presentation on how their platform utilizes email, sms and social media, to invoice and provide payment options to clients. Accept Email is an Amsterdam based company that has 95% market share in the Netherlands.
Vocalink, an UK based payments company that stood out at last year’s conference for their data analytics capabilities, was acquired by MasterCard.
Chances are if you clicked on this headline, your immediate reaction was, “yeah, right”. We’re bombarded with negative information daily – it certainly doesn’t feel as there’s been much improvement in the world.
That’s what makes Max Roser’s project, Our World In Data so compelling. His Vox article: Proof that life is getting better for humanity, in 5 charts, shows how data can tell a story, or in his words “tell many, many stories all at once”. His team shows that on key metrics, such as poverty, literacy, child mortality, freedom and educational attainment, there have been marked improvement in the average person’s quality of life in the past 200 years.
Extreme poverty is defined as living on less than $1.90 per day. Rosner states:
“In 1820, only a tiny elite enjoyed higher standards of living, while the vast majority of people lived in conditions that we would call extreme poverty today. Since then, the share of extremely poor people fell continually. More and more world regions industrialized and thereby increased productivity, which made it possible to lift more people out of poverty: In 1950, three-quarters of the world was living in extreme poverty; in 1981, it was still 44 percent. For last year, the research suggests that the share in extreme poverty has fallen below 10 percent.”(more…)
Moving from the US to Europe is a daunting task, and needless to say I was scared out of my wits before I left. As I result I over-prepared and lined up an American client and got a chip credit card to ensure easy access to my American money. I thought I was all set – I had a lot to learn!
“It is easier to send one billion dollars from New York to San Francisco than $100 from the US to France.” – Mike Laven, CEO, Currency Cloud, 2016 NACHA Conference
I found when I arrived in the Netherlands that my credit card wasn’t universally accepted. Not to mention that I had entered into a vortex of terrible exchange rates and extra fees that were eating up my cash. The exchange rate was already taking a substantial bite out of my revenue (the US dollar was weaker then) and I simply couldn’t afford the extra charges.
I began cobbling together a strategy to access my money quickly and cheaply. Here are a few tips on what worked for me. Full disclosure: I was not clever enough to get paid by any of the companies recommended below. (more…)
It’s a new year, and you’ve probably already seen heaps of well intentioned articles discussing New Years Resolutions – what they should be or how to make them stick. One notable article, How Should You Manage Your Money? And Keep it Short, discusses simple, straightforward financial advice that’s short enough to fit on a 4-by-6 notecard. In the spirit of that…We’re offering some short financial advice focused on freelancers and small businesses that have international clients. The advice in a nutshell is – know where you’ve been, where you are, and have a plan for where you want to be.
Take Stock and Evaluate
Obviously, one of the first things any business would want to do is compare their revenue, net income, etc. to the previous year. That will enable you to drill down and see why there was an increase or decrease – the answers may be unexpected. Maybe the increase is the result of good old fashioned elbow grease – more clients or working longer hours. In my case, events outside our control attributed to a substantial portion of the increase. Specifically, the exchange rate played a sizable role in our revenue increase from 2014 – 2015, because most of our revenue was earned in US dollars. This chart shows just how much the euro has dropped vs. the dollar from January 2014 through January 2016:
Right now, if you’re charging in another currency that’s dropped in value like the euro has, your goods and services are now more affordable. In the short term, you could reevaluate where you want your clients to be, knowing that it may be more advantageous to work with them than it was in the past. Or if you’re like me – based in Europe but being paid in USD, it’s a good idea to recognize where some of this good fortune is coming from to help justify building up your rainy day fund. Since currency values oscillate wildly, try to squirrel away some of these gains you’ve received to help even out the bumps you’ll eventually encounter when the dollar isn’t as strong.*
Set Money Goals – Play the long game
After you’ve evaluated how your business has done, you can focus on the future. For me, setting financial goals is necessary – I want to have them lingering in the back of my brain, keeping me focused on the improvements that are most important to our business.
Setting goals is easy. Start by sorting them into three categories, then list what your plans are and estimate costs for each:
Short term: 1 year
Medium term: 2 – 5 years
Long term: 5 + years
Once you’ve spent money on one of your goals, revisit and update them with the actual expenses. If something was more expensive then anticipated, then readjust how much you’re willing to spend on your other goals in that category. If it was cheaper – that’s great! You’ve saved your business some expense that can be allocated to another goal if necessary.
*I’m not talking about forecasting currency – that’s a risky business. This is a strategy to help even out the bumps that will occur when you are paid in one currency and live on another.