Saturday, January 26, 2013

College Students: OOZE CONFIDENCE! (And if you are not confident, then fake it!)

College Students: “Ooze Confidence” (And if you are not confident … then fake it!)
“Fake it till you make it” is not about faking happiness until you trick yourself into being happy. It’s not about acting like you’re too cool for school until other people also believe you are, and then basing your life around a made-up personality. It is about confidence. It is about meeting situations that you feel intimidated by head-on, telling yourself that you’re ready for them, and putting “I-can-DO-this” intentions out there, until you’ve done such a good job convincing yourself that you suddenly can handle the challenge before you.
Appear confident, in everything you do. And if you are not – fake it!  By appearing to act confident, those around you don’t know of your insecurities – and it actually trains your mind to think confidently!
For a good part of my life, I was overly shy. (I remain a SEVERE introvert, but that’s different from being shy.)  In college I dreaded being called upon in class. I would never approach a girl.  At parties I always stood in the corner of the room. But then, one day, I figured it out - introversion is a strength, but not an excuse to fail to socialize effectively with others.
So, I sought out a little help from friends (the few I had) and read various books. (Of course, nowadays there is all kinds of advice on the Web about dating, small talk, confidence-building skills - just search for videos on YouTube). And I learned that I needed to push out the bubble of my "comfort zone." 
I learned the power of a smile. I learned the power a handshake, a gentle touch on a person's hand or arm. I learned to greet others - even complete strangers - as I passed them by, or sat down in a classroom, etc.
At parties, I learned to pretend (without telling anyone) to be the “host” - and I took it upon myself to make others comfortable, introduce a person to another, etc. I found that fully one-third to one-half of the persons I encountered were also shy – many even more shy than I was (and I found that hard to believe, at first).
I learned that asking questions of others was the best way to keep conversations going, rather than just by continuing to talk myself. I learned the importance of focusing on the other person, as he or she talked. He or she deserves my undivided attention.
And I learned that I constantly needed to push out my “comfort zone” in order to get better and better at socializing and networking, and not revert back to my old habits. Why? Because I’m still an introvert – and I always will be. But being an introvert is a blessing, and a source of my inner strength. In fact, as an introvert I give energy to others. I am also much more contemplative of the world around me than most extroverts. I would never change that. I am proud to be an introvert.
College is that it is the perfect place to push out the boundaries of your own comfort zone - to expand the "bubble" of your ability to socialize with others.  And this is such an important skill, in the world of business, and in life in general.  It’s much better to practice and develop skills in college, than try to build those skills later “in the real world.”
About a year ago we had on campus a dynamic speaker, Adam LaDolce, author of “Being Alone Sucks!” (I would strongly recommend Adam as a speaker for any college or high school.)  Adam LaDolce offered a lot of suggestions to those who were either shy or introverted.
  • First, don’t over-exaggerate the importance of certain events in your life.  Think about it – a short conversation with another, of “muffing it” in class, is not that big a deal – if it goes wrong.  It’s just the opportunity to learn to be better.
  • Second, realize this truth: “I’d rather regret doing it than regret not doing it.”  This is like the old saying, “A ship in the harbor is safe, but that’s not what ships were built for.”
  • Thrid, smile and say “hello” to everyone you pass by.  Try it – for the distance between one class and wherever you are next going.  Try it again and again.  Over time, you will find that people start saying “good morning” or “good afternoon” back to you. And, over time, more people will seek you out to get to know you.
  • Fourth, imagine standing on a chair in a room and shouting: “I love all of you very much!” Some people will laugh, and some of these will want to get to know you more.  But a few in the room may look down on you. Guess what? These other people – they don’t exist to you anymore! There are plenty of people who do want to get to know you, who are lonely themselves. All you have to do is take a risk. What's the worst that can happen? You’ll discover that “the worst” is not really all that bad.

Do you always have to "ooze confidence"?  While this is important in my situations (interviews, the world of business, etc.), there are times when it is permitted to show a little vulnerability. For example, here's one way, especially if you are shy, to meet other people. It’s as simple as this - approach other people to seek out a conversation.  If you are shy, use this excuse: “My crazy professor wants me to push myself out my comfort zone, and go out and meet more people. Do you suppose we could chat sometime, perhaps over a drink or lunch at the Central Dining Hall, so I can practice socializing?” It’s o.k. to show a little vulnerability, by the way, in this instance.  (Another great pick up line ... "Hi. My name is ____. I've been told that I'm really shy, but I wanted to ask you if we could chat sometime, so I can get to know you better.")
What’s the worst that can happen? The other person says “NO WAY!” and turns away from you. And, if he or she does, then just move on – that person no longer exists for you, at least within your own universe. But there are hundreds or thousands of others out there who will want to meet you, and who desire to have a conversation with you.
How do you conduct a conversation? Have some questions prepared. The best conversation is where you talk 30% of the time, and the other person talks 70% of the time. (Once a relationship is formed, 50/50 is a better ratio.) A good way to get the other person to speak is for you to ask questions about that other person. First, seek out some basic facts, nothing too personal. For example, where is the person from, are they an only child or from a larger family, why they attended this college, what is their major, and what type of career they desire. Also ask for the other person's opinion - such as what classes to take, what professors are best, or what clubs or organizations to consider joining. As the conversation ensues, more personal questions can follow.
In summary, here's how to OOZE CONFIDENCE every day. First, be certain to smile – always – in the presence of others. Second, say “good morning” or “good afternoon” or "Hello!" or "How are you doing?" as you pass by others. Third, walk tall and with purpose - like it is important for you to get to where you are going, and quickly.  And lastly, imagine the other persons you greet are much more shy than you.
OOZE CONFIDENCE in everything you do, and be more successful in life. And, even if you are not confident in a particular situation, act as though you are. You'll impress others that way, and in so doing you will open doors that you never imagined would exist for you.
Professor Ron A. Rhoades, JD, CFP(r) teaches Business Law, Retirement Planning, Investment Planning, Employee Benefits Planning, Money & Banking, Insurance & Risk Management, and the Personal Financial Planning Capstone courses at Alfred State College, Alfred, NY. He is an EPLP Mentor, C.R.E.A.T.E. program mentor, serves as advisor to Alfred State's Business Professionals of America club, and serves as academic advisor to dozens of students.

Professor Rhoades is the author of "CHOOSE TO SUCCEED IN COLLEGE AND IN LIFE: Continuously Improve, Persevere, and Enjoy the Journey," a 10-week program for success in college (available for $2.99 in Kindle store at, or in paperback for $6.99). Professor Rhoades may be reached by e-mail at: 

Tuesday, January 1, 2013

Preliminary Thoughts on the "Fiscal Cliff" "Deal"

Ron's Preliminary Thoughts on the “Fiscal Cliff” “Deal”

There are several reports already regarding the personal financial and tax planning consequences of the fiscal cliff deal.  Rather than discuss all of these provisions in more detail, I’d like to comment about two aspects of the recent “deal” to avoid the “fiscal cliff” – by first discussing “winners and losers.”  I’ll then turn to the “next cliffs,” with some questions about the parties’ strategy, but with greater inquiry as to why certain parts of the puzzle are not being considered more greatly – both as to procedural and substantive issues.


RETURN OF FULL MEDICARE TAXES.  The biggest impact for most Americans is the expiration of the 2% cut off Medicare employee contributions.  This was designed to be a temporary two-year cut to aid the economy, paid for by adding to the accumulated national debt.  It is no surprise that this “tax break” expired.  Employees will feel real pain – with lower net paychecks in 2013.  This is our most compelling reminder that pulling back on stimulus to the economy – whether fiscal or monetary – can be most painful.

MARGINAL TAX RATES RISE FOR HIGH EARNERS.  For individuals with greater than $400,000, and married couples with greater than $450,000, of ordinary taxable income – roughly 2% of all Americans – income tax rates will also increase.  But only for income above these previously stated levels.  However, the return of the elimination of certain itemized deductions, for income above certain levels, will also hurt high earners.

THE ASSET RICH – NOT SO HARMED.  Those “wealthy” who derive a lot of income from dividends and/or capital gains should be pleased.  The 20% rate on long-term capital gains was anticipated.  The compromise to permit qualified dividends to be taxed at 20% is the larger surprise, and a real benefit to those Americans who own stock (within taxable accounts) in publicly traded corporations, and to those who own stock mutual funds in taxable accounts.  Additionally, greater certainty in planning for gains (and other tax preference items) will result due to the “permanent” patch to the alternative minimum tax.  The preservation of the $5m federal estate tax exemption ($10m for married couples) is another big "win" for the "asset rich."

FEDERAL GOVERNMENT AGENCIES AND THEIR EMPLOYEES.  By punting on the “sequester” for two months, most federal government agencies – many of them facing 8% to 13% budget cuts – still face similar cuts, if the next “sequester cliff” is not addressed.  The agencies should continue feel constrained in their hiring and expenditures, and employees are left to wonder about probable furloughs (mandatory days off without pay) and/or layoffs.


The “debt ceiling cliff” and the “sequester cliff” still exist, with February and March deadlines.  Here are some thoughts about the road ahead.

Both parties have moved from intransigent positions and have compromised, albeit only with the substantial assistance and intervention of V.P. Biden and Senate Majority Leader Mitch McConnell (again).  While some will opine that the compromises made now will make further compromise less likely, I believe the opposite is true.  The new Congress, with a slightly different make-up, and having finally learned to compromise to accomplish “something,” is more likely to reach deals.

Did the Democrats use up most of their leverage, by focusing on eliminating tax increases for all but the high earners?  What incentives do the Republicans possess to avoid the “sequester” on government spending?  Moreover, Republicans appear to possess the upper hand in demanding cuts to entitlement spending to avoid the debt ceiling – and the sequester.  I wonder if the Democrat’s perceived short-term victory in achieving the recent “deal” will turn out to pose long-term difficulties in negotiations.

If, however, real tax reform is to take place – by simplification, elimination of many deductions, and lowering of tax rates, then the Democrats may be better-positioned to head into such “revenue neutral” discussions with higher marginal rates on high earners already in place.


This is a lousy way to run tax policy.  Here are some better ways, in my view, to go about things in Washington, DC.  (I provide, as well, some thoughts on specific spending cuts and tax increases.)

  • We should be focusing first on ways to make American corporations more competitive.  Reforming and lowering corporate income taxes is one key.  And removing the burden of employee health care from larger corporations is another (although this would require massive changes to how health care is funded in this country).  Like it or not, the United States competes with other nations in a global economy.
  • Next, let’s focus on tax simplification.  Not just by a bit, but by a lot.  No just by lowering tax rates and eliminating most deductions and credits (a good thing, in my opinion), but also by making our government more efficient and reducing the need for tax and compliance consulting.
    • For example, what if all IRAs and defined contribution plans were combined into one type of defined contribution plan – all with the same tax, contribution, and distribution rules (and penalties).  It would be a lot easier to administer (under ERISA), and save a lot of money spent at the Dept. of Labor (EBSA) and by tax attorneys, CPAs and retirement plan administrators across the country.  Imagine if defined benefit plans were simplified, as well.
  • Tax increases and spending cuts should be phased in - via a new long-term annual sequester process.  As we’ve seen, from all of the recent economist warnings, huge “cliffs” in either reduced government spending or increased taxes can result in the likelihood of recession.  Common sense informs us that federal debt reduction shouldn’t be – as the fiscal cliff set up to do – a huge precipice of either tax increases or spending cuts.  
    •  One of the strategies used to get people to save is to set aside an increased amount (as a percentage of income) for savings (or debt reduction).  Why not do the same for the federal government?  Mandate a reduction (in real, or inflation-adjusted, terms) of some percentage amount in overall spending each year (such as 1%, 1.5% or 2% a year), and revenue increases (i.e., tax increases) also in real terms (such as 1%, 1.5% or 2% a year).  Mandate this for ten years. 
    • The difficulty in adopting a ten-year plan for spending cuts and revenue increases lies in determining “how much.” But that’s the real “grand bargain” that needs to be made.
    • If done correctly, this phased-in, mandatory annual sequester approach will quiet the concerns about increases in debt-to-GDP levels “forever,” while at the same time providing a more stable tax and spending policy in the near term.  In other words, economic growth can proceed, as business and consumer confidence will be restored.  And with confidence restored will come further impetus for economic growth.
    • In summary as to this point, we can make a lot of progress if Congress were to vote to enact rules to force ten years of phased-in spending cuts and tax increases, through an annual sequester process.  We’ve seen this before – and despite the sometimes difficulties it caused in the political process – it worked! 
    • [By way of further explanation, the Balanced Budget and Emergency Deficit Control Act of 1985 established an annual sequester as a means to enforce statutory budget limits.  Amendments to this act were designed to use sequesters to control direct spending and revenues (through the pay-as-you-go, or PAYGO, process) and discretionary spending (through spending caps).  (Sadly, those mechanisms expired October 1, 2002.)  Previously, under these mechanisms, the budgetary impact of all legislation was scored by OMB, and reported three times each year (a preview with the President’s budget submission, an update with the Mid-Session Review of the Budget, and a final report after Congress adjourned). If the final report on either the PAYGO or spending caps mechanism indicated that the statutory limitations within that category had been violated, the President was required to issue an order making across-the-board cuts of nonexempt spending programs within that category.]

SOME SPECIFICS.   In order to avoid being labeled as just another pundit fearful of providing specific solutions, I offer several (and many more should be considered):
  • The raising of tax revenues in the short-term by encouraging greater conversions to Roth IRAs and Roth accounts is poor long-term tax policy.  The Roth IRA (and other Roth accounts) are huge give-aways to taxpayers, which - in my opinion - the government can ill-afford.  As much as they are long-term beneficial for my clients (and their heirs), they don’t bode well for the long-term financial security of the country.  Sadly, we need to eliminate further contributions and conversions to Roth accounts.
  • Reduced Pentagon spending will occur.  Great strides have been made in recent decades in cutting obsolete weapons programs and closing unneeded military bases.  Greater strides still need to be made, still.  The Secretary of Defense’s job will be a tough one, over the next decade, as the Defense Department wrestles with reduced levels of funding.
  • Chained CPI will occur.  The door has been opened to its consideration.  But it is not the only solution to entitlement spending.  We must also consider a phase-in of a higher Full Retirement Age for Social Security retirement benefits, a slightly higher age for Medicare eligibility, and higher Medicare taxes (employer and employee contributions) over time.  The longer we wait, the more severe the remedy.
  • Let’s simplify Medicare while we are at it.  Eliminate Medicare Part C (which costs the government tens of billions more than it should, anyway).  Combine Parts A, B and D, and make B & D mandatory.  This should greatly reduce administrative costs in the Medicare system.  And, of course, permit Medicare (or non-profit associations acting as payors) to negotiate prescription drug prices.  And let’s open the discussion about reducing the costs of end-of-life care, by having an honest discussion about it (with no “death panels” rhetoric).

Let’s get away from the “unified budget” numbers.  It understates our real annual budget deficit.  (I lay some blame with the press, for permitting the politicians to continually referred to the “unified budget” numbers when reciting the size of budget deficits.)

Campaign finance reform is essential (and it may require a Constitutional amendment).  And term limits for those in Congress should be reconsidered.  As we have seen, far too many in Congress cast votes in anticipation of the next primary or general election.  Going to Washington should be viewed as an opportunity to temporarily serve the country, and not as the necessity of preserving one’s permanent seat.

It may take some time to digest all of the “deal” which has been approved.  We can only hope that the process used to achieve tax and spending reform (i.e., deficit reduction) – while never easy – can be undertaken in Washington with a great deal more thought, and courage - in the future, when contrasted to what we have seen over the past two months.

Largely due to Congress’ inability to tackle problems in a sensible way, too many Americans worry that America is in permanent decline.  Let us hope, and pray, that current and new leaders will embrace a more sensible path toward addressing the country’s problems, with a long-term perspective.  Let us hope that statesmen and leaders emerge to guide us toward a prosperous future.

I am optimistic.  America is a great country, and with unbundled enthusiasm, its entrepreneurial spirit, and the promises from continued innovation, we can continue to remain a great country - and a great people.  But, to maintain this greatness, we must demand more from our elected leaders.  Each and every one of us should write to our representatives in Congress and demand statesmanship rather than political posturing.

In conclusion, the recent outcome of the "fiscal cliff" "deal" did little to restore the all-essential business and consumer confidence our country needs to assist in propelling our economic growth.  It did avert the "fiscal cliff" - but not by addressing our long-term fiscal issues, as was intended.  Let us hope that over the next two months we will witness a process, and outcomes, far more satisfactory.

Ron A. Rhoades, JD, CFP(r)
January 1, 2013