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The Man’s Guide to Corporate Culture Book Cover

The Man’s Guide to Corporate Culture by Heather Zumarraga Book Summary

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The Man’s Guide to Corporate Culture, A Practical Guide to the New Normal and Relating to Female Coworkers in the Modern Workplace by Heather Zumarraga

Recommendation

The gender equality movement has fundamentally altered the work environment. Companies are now hiring and promoting more women – notably, in upper management positions traditionally dominated by men. Many men feel uncertain about navigating these developments. Wariness of sexual harassment allegations can make some men shy away from working closely with female colleagues. Others find themselves questioning their longstanding attitudes and behaviors. In this must-read manual, Heather Zumarraga offers compassionate, yet challenging advice for men on how to avoid workplace pitfalls. Her approach isn’t flawless, but the topic is so crucial, men and women alike can benefit from her guidance.

Take-Aways

  • The rise of women in the workforce changes the rules for men.
  • Women have proven their merit as leaders.
  • Sexual harassment threatens women’s safety and security.
  • To avoid trouble, men should follow a clear set of guidelines.
  • Unfounded accusations damage reputations.
  • Casual dress code or not, appearance still matters.
The Man’s Guide to Corporate Culture Book Cover

The Man’s Guide to Corporate Culture Book Summary

The rise of women in the workforce changes the rules for men.

As women make progress toward workplace equality, the issue of sexual harassment has moved to the forefront. Sexual harassment allegations have wrecked the careers of many prominent men, as the reality of sexual harassment has harmed many women. As a result, some men are wary of accusations of inappropriate conduct, and may struggle to understand the new rules of workplace engagement.

“For us women, the dark ages have passed. We are living in the Renaissance for aspiring professional women.”

Many men need to learn better ways to communicate and collaborate with female co-workers. Those who deny that workplace culture has changed and resist forming productive relationships with women at work will never maximize their career potential.

Women have proven their merit as leaders.

Companies benefit from the presence of more women in the labor market. According to an International Monetary Fund survey, the contrasting skills and viewpoints of men and women boost organizational growth and productivity. Studies indicate that adding women to corporate boards improves their companies’ financial performance. Though men still run most Fortune 500 companies, the corporate world has more female CEOs now than ever before. In 2020, Jane Fraser became president of the Wall Street banking giant Citigroup – the first female CEO in the corporation’s history.

Despite the many positives of having more women in the workforce, a joint study by SurveyMonkey and LeanIn.org found that six out of ten managers feel uncomfortable engaging in typical office activities, including mentoring and socializing, with women. Sometimes, male managers, fearful of being labeled a sexist, hesitate to give female employees negative feedback or low scores on performance reviews – a choice that hurts everyone.

“False accusations, or even misplaced suspicions, now have absurdly powerful repercussions.”

Women are far more vocal about sexual discrimination than men – though according to the Equal Employment Opportunity Commission, one in five people who reports being harassed is male. 

Considering the destructive ramifications of sexual harassment, avoid commenting on people’s physical appearance in the workplace. Assume your co-workers will be sensitive to remarks about how they look.

Relationships are the cornerstone of business. Dale Carnegie, author of How to Make Friends and Influence People, believed that 85% of financial success depends on personality and leadership skills. You can’t expect to get along with everyone at the office, but male and female colleagues must co-exist. Being labeled as hard to work with can damage your career.

Forging a relationship begins with the art of casual conversation. Find common topics to discuss with your co-workers. At work, avoid controversial subjects, such as sex, religion, politics or personal drama. Avoid gossip. Never bad-mouth your colleagues or your company. Do not give shoulder rubs, hugs or head pats. One in four adults say they steer clear of a specific co-workers because of how they greet others; some 75% of employees favor barring all physical contact at the office.

Sexual harassment threatens women’s safety and security.

In this era of heightened sensibilities, many males feel insecure about the way they talk and act in the workplace. Part of the problem may stem from a failure to understand exactly what constitutes harassment. Offensive actions include telling off-color jokes and sharing questionable photos, staring or gesturing in a sexual manner, physically blocking someone’s path, and discussing a co-worker’s sexual history or preferences. All employees need to feel safe and secure at work. If you make people feel unsafe, you’ll never develop trusting and productive working relationships.

“You can influence your workplace culture to reflect different behaviors that make everyone feel included.”

Workplace romances often are unavoidable. Roughly 20% of married couples in the United States met at work. But a romantic relationship with a colleague can affect your productivity and even threaten your job. Most organizations have guidelines concerning office relationships. Some companies prohibit supervisors from dating their direct reports. Asking for a transfer to a different department may be the best way to avoid problems.

Remember, human resource departments exist, primarily, to safeguard the company. Ultimately, you are responsible for protecting your job and reputation.

To avoid trouble, men should follow a clear set of guidelines.

Men’s concerns about unfounded charges of sexual harassment affect corporate culture. The SurveyMonkey-LeanIn.org survey revealed that senior-level males are much more hesitant to meet privately with a junior female colleague than with a junior male colleague.

“Never hesitate to report any form of bullying to your boss, a trusted colleague, or the human resources department.”

The main rule of thumb is to be consistently respectful, well-mannered and professional.The following “Secret Rules” can help you avoid potential problems:

  1. Communicate as a professional – It’s never appropriate to send sexually explicit images to colleagues. Carefully consider the language and content of every email and text. Others may find your idea of humor or sarcasm offensive. If you have any doubts about what you’re sending, don’t send it.
  2. Be aware of everyone’s personal space – Fist bumps, high-fives and handshakes are acceptable forms of touching, says Jodi Smith, founder of the Mannersmith consulting firm. 
  3. “Give neutral compliments” – Refrain from commenting on anyone’s looks or clothing. Keep compliments job-oriented and refer only to someone’s work.
  4. Introduce the highest-ranking person first – Mention individuals with the highest position first, regardless of gender. If a man and woman have equal positions, introduce the woman first.
  5. First think, then talk – Exercise discretion and common sense. Avoid locker room talk, even with fellow males. It’s difficult to deny if you’re overheard. Besides, you have no idea if your words will offend anyone. When in doubt, shut your mouth.
  6. Dress professionally – Though the trend is toward more casual clothing in the office, wearing a suit sends a strong message about your professionalism. Clothing affects how others perceive you and influences your opportunities for promotion. If your profession or workplace allows a more casual look, enjoy it.
  7. Make your handshake consistent – COVID-19 has dramatically altered this timeless business custom. No one knows whether hand-shaking will make a comeback. Offer the same firm, consistent handshake to both males and females.
  8. Be an active listener – Paying close attention to the other person without offering advice or passing judgment generates more productive conversations. You want the other person to feel heard. Be patient and understanding.
  9. Seek mutual respect – Common decency means being attentive and courteous. Mutual respect builds a strong corporate culture. People are more likely to leave a company if they don’t feel respected.
  10. Look for common ground – Be proactive in getting to know your co-workers. Ask simple questions such as where they live or what college they attended. Most people like it when others show interest in them.

Unfounded accusations damage reputations.

False accusations of harassment or sexism make worklife even more difficult for women who have genuine complaints. The push for gender equality in the workplace means new guidelines for women, as well as men. Tasteless remarks and actions that result in reprimand or dismissal may not qualify as harassment in a courtroom, but they undermine corporate culture. The law states that the so-called harasser must act intentionally and repeat the behavior several times. Even if the accused does not suffer legal consequences, his reputation could suffer considerable damage.

“When in doubt, if you wouldn’t do it with a man, don’t do it with a woman.”

Be aware of what you say and do. Don’t give anyone a reason to suspect you of sexual harassment. Yes, the rules have changed, but practicing professionalism, courtesy and respect are unquestioned standards.

Casual dress code or not, appearance still matters.

Years ago, men wore suits and ties and women wore dresses and skirts. The casual Friday movement that started in the 1990s has expanded to include every workday. Goldman Sachs CEO David Solomon dispensed with a policy that required the company’s investment bankers to dress with elegance every day. Google, Facebook and Twitter fully embrace the business casual philosophy.

“The best way to combat workplace sexual harassment is to reduce gender inequality and promote women in leadership positions.”

Dress properly even in a relaxed environment. Research a company’s culture if you’re a job candidate. An inside contact can tell you how people dress.

Etiquette applies to both speech and manners, and to both men and women. Say “please” and “thank you.” Keep your ego in check. Acknowledge other people’s accomplishments. Managers and subordinates have the power to influence a company’s culture through positive attitudes and interactions. While the modern workplace offers considerable challenges, your best strategy is mutual respect.

About the Author

Heather Zumarraga

Heather Zumarraga is an economic and financial correspondent for several national TV news outlets.

Video & Audio

MeToo in the Corporate World Book Cover

#MeToo in the Corporate World by Sylvia Ann Hewlett Book Summary

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#MeToo in the Corporate World, Power, Privilege, and the Path Forward by Sylvia Ann Hewlett

Recommendation

The #MeToo movement brought a storm of change, but its over-focus on the experiences of young, white women is problematic, argues economist Sylvia Ann Hewlett, given that men, older women, people of color, members of the LGBTQ+ community and others also experience abuse. To provide greater safety and support for all, leaders can make changes to corporate values, culture, and procedures for tracking incidents and responses. Studies verify that diversity boosts a company’s bottom line. Thus, Hewlett says, by committing to “inclusive leadership” organizations help their employees – and themselves. 

Take-Aways

  • The #MeToo moment increased public support for victims, but young, white women aren’t the only ones who experience harassment.
  • The term #MeToo went viral in 2018.
  • A 2018 harassment study challenged traditional “victim” and “aggressor” profiles.
  • Power – not gender – often lies at the root of sexual harassment or assault.
  • Men are less likely to report sexual harassment or assault because it runs counter to their “masculine identity.”
  • When former NFL linebacker Terry Crews was harassed, #MeToo paved the way for him to go public.
  • Nike paid the costs of ignoring rampant sexual harassment within its organization.
  • Employees can create a safer workplace.
  • #MeToo has undercut male mentoring of female professionals, but you can mentor safely.
  • Corporate culture can change if leaders pave the way.
MeToo in the Corporate World Book Cover

#MeToo in the Corporate World Book Summary

The #MeToo moment increased public support for victims, but young, white women aren’t the only ones who experience harassment.

The #MeToo movement brought greater public support for victims of sexual harassment, resulting in increased penalties for perpetrators and support for greater leadership diversity. While the movement generally focuses on older, powerful white men who assault or harass younger white women, this narrative is too narrow. Other employees – including people of color and LGBTQ+ staff members – experience as much, if not more, harassment.

“New evidence makes quite clear…that the #MeToo movement has not had a big enough tent.”

Sexual misconduct carries heavy costs for organizations – as CBS, Nike and the Catholic Church discovered. The lasting concern is whether this movement compels companies to change their culture and leadership styles.

The term #MeToo went viral in 2018.

The Civil Rights Act, which made discrimination illegal under Title VII, didn’t mention sexual harassment. Cornell University scholar Lin Farley coined that term in 1975. 

In 1991, a US Senator called Anita Hill’s claim of sexual harassment by then-Supreme Court nominee Judge Clarence Thomas a “fantasy.” Since then, the Boston Globe has uncovered abuse in the Catholic Church; Bill Cosby fell from paternal figure to pariah; and – prior to the 2016 presidential election – candidate Donald Trump openly talked of kissing and fondling women at will. When former victims and law enforcement officials held film producer Harvey Weinstein accountable for years of harassment, the #MeToo movement ignited. The term went viral in 2018, but Black civil rights advocate Tamara Burke, co-founder of the #MeToo movement, first used it in 2006. The volume of accusations against Weinstein and the social status of his victims brought sexual harassment into public consciousness.

“Men and women of color and LGBTQ employees experience particularly high rates of sexual harassment and assault.”

Media headlines on this issue moved public opinion. In 2018, this shift affected the careers of 201 high-profile men and prompted corporate leaders and shareholders to face the problem of workplace harassment directly.

A 2018 harassment study challenged traditional “victim” and “aggressor” profiles.

Fully one-third of women report having experienced sexual harassment at work; 13% of men report similar treatment as well. A majority of both men and women stated their harassers occupied more senior positions within their organizations. Regarding sexual assault, the numbers for men and women varied by only 2%. The Center for Talent Innovation (now named Coqual), founded by author Sylvia Ann Hewlett, conducted a study of harassment among more than 3,000 college-educated “full-time white collar” employees in 2018. Black men reported a much higher incidence of sexual harassment (21%) than other groups. Among women, Latinas and Caucasians reported the highest incidence of sexual harassment at work, both at 37%, followed by 25% of Black women and 23% of Asian women. Sexual assault by a colleague affected 7% of Black women and 6% of Caucasian, Latina and Asian women.

““These uncomfortable facts support the idea that the fundamental variable in workplace sexual misconduct is not ‘man’ or ‘woman’ but power.” ”

LGBTQ+ staff members reported more incidents of harassment and assault than any other group. A shocking 43% of LGBTQ+ women and 23% of LGBTQ+ men suffered harassment. 

Power – rather than gender – often lies at the root of sexual harassment or assault.

While the vast majority of cases of sexual harassment involve men as perpetrators, women carry out their share of harassment. In one situation, a male graduate student sued a female professor who essentially controlled his career.

“As more women gain power…they may act more like men and abuse that power more often.”

Women prey on women, too. The CTI study found that a woman was the aggressor in 13% of female harassment and 19% of female assault cases. Lara Stemple, assistant dean at UCLA Law School, studies “sexual victimization” by women. Her 2014 research indicated that a higher number of women victimize men and women than the CTI study found. Stemple believes the basis of harassment is “abuse of power.” Seeing women only as victims reinforces “outdated stereotypes” of females as one-dimensional. Because the role of women as corporate leaders is relatively new, statistics offer no baseline for how women in such positions of power behave. Predatory women, thus, seem like outliers. 

Men are less likely to report sexual harassment or assault because it runs counter to their “masculine identity.”

The law did not recognize sexual harassment against men until 1998. As late as 2013, the FBI still defined rape as a type of assault featuring a female victim. With no legal history of support for their claims of assault, men rarely reported sexual harassment or abuse. The military epitomizes this idea of male culture. A 2014 RAND Corporation study reported that of the 1.3 million US soldiers on active duty, 20,000 reported at least one sexual assault in the preceding year. Some 60% of the victims were men. About a third of them said the assault occurred as part of hazing.

“Feelings of powerlessness in the wake of sexual harassment and assault seem to be particularly damaging to men.”

When men find themselves in the victim role, they feel more shame and self-blame than women in that situation. CTI data found that job satisfaction for harassed men fell from 56% to 39%, while for women it fell only 8%.

When a man sexually harassed former NFL linebacker Terry Crews, the #MeToo movement paved the way for him to go public.

In 2018, testifying before a US Senate Judiciary Committee, Terry Crews, a Black former NFL linebacker, now an actor and television host, relayed an experience with sexual harassment. At 6’3” and 245 lbs., Crews might seem like the last person to fall victim to unwanted sexual behavior. But, at a Hollywood work party in 2016, as Crews extended his hand for a handshake, high-profile agent Adam Venit – who worked for the agency that represented Crews – grabbed Crews’ genitals and squeezed.

Crews didn’t respond to Venit’s action with violence. He left the party and contacted his agency the next day. Venit called Crews to apologize, but the agency did not respond further. When Weinstein’s victims came forward and launched the #MeToo movement, Crews spoke out on Twitter, filed a police report and sued the agency. After his Tweet, a rapper accused Crews of not being masculine; a hip-hop producer asserted the agency should reinstate Venit; and numerous people told Crews that Venit was only joking.

Venit’s actions epitomize the sort of racist behavior intended to make minority people feel subordinate. Crews’ experience illustrates a perception issue which unfairly characterizes Black men: some regard them as “predators,” but also see them as objects of sexual fantasy. People project similar ideas onto Latina and Black women. Columbia Law School professor Kimberlé Crenshaw coined the term “intersectionality” to describe discrimination based on multiple, overlapping factors – such as race, gender, social class and sexual orientation.

Nike paid the costs of ignoring rampant sexual harassment within its organization.

Workplace sexual harassment and assault can harm a company’s bottom line five ways. In 2018, when female Nike employees “revolted” due to career limitations, male colleagues’ poor behavior and an ineffectual corporate HR response, the company experienced all five negative effects. 

The first effect is high legal costs. Shareholders and previous employees are suing Nike. Illustrating the second pain point, Nike lost 11 senior leaders, including a president who was in line to succeed the CEO. The third penalty is reduced market value. For Nike, with a brand worth $32 billion, the shareholder’s lawsuit asserts that the work environment “harmed and threatens” its financial future. The fourth effect is loss of talented recruits. Some women became unwilling to work for Nike. A Kapor Center study showed that culture, not money, is the main reason people leave a company. The fifth cost is to brand value. When headlines repeatedly detail sexually inappropriate treatment of women at a company, it hurts the brand.

Employees can create a safer workplace.

As an individual or manager, follow your company’s guidelines to keep yourself and your colleagues safe. Respect other people’s personal space. For most people [pre-COVID], this is a minimum distance of 18 inches (45.72 cm). 

Though attire is never an excuse for harassment, dress professionally at work. The female general counsel for International Paper underscores this by advising separating how you dress in your personal time versus how you want to appear at work or at work-related social functions.This advice also applies to female executives. In 2008, Erin Callan became the CFO of Lehman Brothers. When a glossy magazine featured her in a photo spread wearing low-cut blouses, short skirts and stiletto heels, the media focused on her appearance, not her professional accomplishments.

“Whether you are junior or senior, man or woman, you should relentlessly telegraph professionalism at work.”

If you’re traveling with a colleague, meet in the hotel lobby, a conference room or a business area instead of a hotel room or at the bar. One senior vice president at Freddie Mac uses his company’s corporate cafeteria, instead of a local restaurant, as a place to get to know his subordinates. Having an affair with a subordinate, boss or married person will damage your career and have a negative impact on morale in your office. If you are responsible for misconduct, apologize. A Canadian broadcaster accused of sexually abusing more than 20 women wrote an essay about it. Instead of apologizing, he lamented his lost career and reputation. The attitude he displayed in his article caused such a backlash that the publication fired the editor who published it.

When you see sexual harassment at work, identify it immediately and talk to your human resources officer. If you witness “disrespectful” behavior, enlist someone higher up in the organization to talk to the perpetrator if he or she doesn’t work for you.

#MeToo has undercut male mentoring of female professionals, but you can mentor safely.

Executive diversity results in higher corporate revenues and returns, but the #MeToo movement makes it clear that executives must modify how they cultivate new talent. When you work with someone you mentor, meet in public areas. Share the background of the person you’re coaching with your colleagues and explain why he or she is an asset to the company. In the quest for diversity, remain open to new ideas. For example, a female Merrill Lynch director in charge of diversity marketing took a chance on a young male associate who wanted to market to the LGBTQ+ community. She gave him a $15,000 budget and clear goals to see what he could create. His initiative resulted in $1.4 billion of business.

In the past, people didn’t believe women could contribute to a company’s bottom line. Even now, some men look askance at women who win quick promotions.As a senior leader or CEO, challenge this attitude by citing studies proving that greater diversity provides greater revenue.

Corporate culture can change if leaders pave the way.

Corporate values matter when companies adhere to them. Companies that act in alignment with their values outperform companies that don’t. Change your corporate values to reflect “zero tolerance” of sexual misconduct. The CEO should communicate this red line directly through words and actions. Executives and board members might not want to hear reports of harassment from HR, but must be aware of what is happening in their companies’ offices.

Train and coach employees, so they feel comfortable taking action when they see inappropriate behavior. Since men are also victims of sexual harassment and abuse, these policies should empower, not censor them. Create new ways to report incidents of sexual misconduct and to collect information about them. The HR department should not be the sole avenue for reporting harassment. IBM, for example, created “Talk It Over,” a hotline employees can call about harassment incidents and to determine next steps. The system alerts senior managers if the company receives two complaints against any individual. Be proactive – use existing data and create information banks to identify problem areas.

“Own the harm. Do the work. Make restitution. That’s what a real mea culpa looks like.”

Take organizational responsibility for past events. People must believe the company will stand behind its values of inclusivity and respect, even if these are newly stated values. Support “inclusive leadership.” Encourage different perspectives. Take risks. Give feedback. Help bolster employees’ independence and “share credit.”

About the Author

Sylvia Ann Hewlett

Economist Sylvia Ann Hewlett is the CEO of Hewlett Consulting Partners, founder of the Center for Talent Innovation and author of 14 books, including Executive Presence and The Sponsor Effect.

Video & Podcast

No Visible Bruises Book Cover

No Visible Bruises by Rachel Louise Snyder Book Summary

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No Visible Bruises, What We Don’t Know About Domestic Violence Can Kill Us, by Rachel Louise Snyder

Recommendation

In America today, 54% of mass shootings involve domestic violence; intimate partners use guns to kill 50 women a month. Because of guns, the United States is the most dangerous industrialized country for women. Journalist Rachel Louise Snyder’s exhaustive research reveals sobering truths about why women face so much risk from domestic violence. Snyder includes accounts from jailed batterers, as well. Prescient and vital, this essential work reveals why home can be the most dangerous place. Recommended for women who live with abuse, advocates, lawmakers and law enforcement officers.

Take-Aways

  • Long-held assumptions about domestic violence help perpetuate the crisis of abuse.
  • Victims stay with abusers because it is almost always more dangerous to leave.
  • The Danger Assessment tool can help prevent domestic violence homicides.
  • Guns are a significant factor in the rates of domestic abuse homicides in the United States.
  • Anti-domestic violence programs teach batterers how their violence affects their victims.
  • Better communication among agencies and law enforcement reduces fatal mistakes.
  • Crisis centers must expand options for battered women and their children.
  • Evidence-based prosecution can detain abusers while victims seek help.
No Visible Bruises Book Cover

No Visible Bruises Book Summary

Long-held assumptions about domestic violence help perpetuate the crisis of abuse.

America does not consider domestic violence an urgent crisis, even though intimate partners murder 50 women a month. And, murder is the leading cause of death among young African-American women. Certain incorrect assumptions surround the issue of domestic violence, including blaming the victim: The girl made bad choices – or, if she had reason to fear her partner, she should simply have left. People still believe that what happens in the home is nobody’s business, and that in domestic disputes women sustain only negligible injuries. 

Law enforcement personnel often fail to take domestic violence seriously, especially when they are called to the same home multiple times, even though a domestic violence response call can be dangerous for the responding officers. Perceiving it as a private matter that shouldn’t distract the police, society often deems domestic violence a “nuisance.” Unlike any other crime, it doesn’t happen randomly in unexpected places. It happens mostly where couples live. 

“Leaving is never an event; it’s a process.”

For generations around the globe, women were men’s property, to do with as they wished. Today, male abusers claim to love the women they batter. And, women believe their children need a father, even a bad one. The court system puts victims on the defensive and charges perpetrators with only minor offenses.

“When a man’s belief system is challenged, he goes into fatal peril and that is the moment where violence is a choice.”

The women’s movement in the 1970s and 1980s tried to change these assumptions and unfair provisions. Publicity from the O.J. Simpson trial helped win passage of the Violence Against Women Act in 1994. Yet, programs and shelters for battered women suffer chronic underfunding.

Victims stay with abusers because it is almost always more dangerous to leave.

Rocky Mosure displayed the hallmarks of a batterer for years before he murdered his wife, Michelle. He abused drugs after their children were born. He isolated his wife from her family and beat her in front of their kids. When she tried to leave, he stalked and threatened her. She filed a restraining order, but Rocky’s parents bailed him out. Living in Montana, he had no difficulty getting a weapon. Michelle gave up hope that the law could protect her. She recanted her story because she feared for her life, and she sought to placate Rocky to buy time to escape. But within weeks, he fatally shot her and their children and committed suicide. 

A “fatality review team” assessed the Mosure case. They acknowledged their “failure to protect.” They concluded that better communication among advocates and law enforcement would reduce violence. If their recommendations had been in effect as public policy, the court would have kept Rocky in jail while advocates helped Michelle set up emergency plans and find shelter. They would have warned her when his release was due and enforced a no-contact order. An advocate would have tested Michelle with the Danger Assessment tool to determine her level of risk.

The Danger Assessment tool can help prevent domestic violence homicides.

The Danger Assessment tool is the “single most important tool” developed to help advocates identify women who are at risk of abuse. Creator Jacquelyn Campbell was a public health nurse who discovered flaws in law enforcement’s reporting and tracking of domestic abuse cases. The Danger Assessment tool helps women understand their situations in context. Crisis workers across the United States use it to identify women quickly who might not know they are in danger and to provide them with resources. 

“The Danger Assessment has changed the course of how we understand and treat intimate partner violence in America and beyond.”

Campbell’s research isolated prior domestic abuse incidents as the biggest indicator of future abuse. The danger spikes in the three months after a battered partner leaves, then it drops significantly. Time apart lets intimate partners adjust to ending their relationship. Campbell identified 22 high-risk factors that predict potential homicide, including substance abuse, forced sex, stalking, poverty, unemployment, threats to kill, isolation from friends and family, and strangulation. Almost 60% of homicides show a history of strangulation, because “once the hands are on the neck, the very next step is homicide.” Laws that made strangulation a felony in 45 states have contributed to a drop in homicide rates.

Guns are a significant factor in the rates of domestic abuse homicides in the United States.

Gun advocates argue that firearms make women safer because a woman who has a gun can defend herself. David Adams, leader of an anti-domestic violence organization, interviewed 14 killers and discussed their statements in his testimony to the congressional Joint Committee on Public Safety and Homeland Security. Homicide risk increases eightfold when a gun is present, and the person holding the gun has the power. However, 11 of the killers said they would not have murdered their victims if a gun hadn’t been available. Yet, few laws allow police officers to remove guns from men with a history of stalking or domestic violence. Federal law does not.

“A gun is a passive instrument; it does what it’s told to do by a human. And humans make mistakes.”

Access to guns is one of the top three indicators for potential homicide in domestic abuse. Calls involving domestic violence account for 14% of police fatalities on duty. A third of US women have guns in their homes, but fewer than 20% claim that it makes them feel safer. More than half support stronger gun laws. Society teaches women not to use violence. Men must learn nonviolence, too. Domestic violence predicts mass shootings more than half the time, but an FBI study on active shooters neglected to link mass shootings with domestic violence. 

Anti-domestic violence programs teach batterers how their violence affects their victims.

The Manalive program at San Bruno jail in San Francisco teaches men to be accountable for their violence. Hamish Sinclair founded the program in 1980, but Manalive became particularly relevant after passage of the Violence Against Women Act in 1994. California law mandated that violent men must take the program or go to jail.

Sunny Schwartz, a prison guard, made Manalive one pillar in the Resolve to Stop the Violence Project (RSVP) at San Bruno. The other pillar is restorative justice, where the men hear firsthand accounts from female victims of domestic abuse. The program teaches the men to call their victims by their names and to see them as human beings. 

“Restorative justice insists that the perpetrator acknowledge the pain and suffering he has caused and ‘restore’ his victims and community as much as possible.”

Twenty years after its inception, RSVP has lowered recidivism rates. But few states have adopted it. Programs for survivors take precedence over programs for abusers, even though reducing male violence benefits victims.

Better communication among agencies and law enforcement reduces fatal mistakes.

Dorothy Giunta-Cotter should not have been a victim of William Cotter, her husband. Her murder was “instantly preventable,” according to social services worker Kelly Dunne, who helped Dorothy obtain a restraining order against her husband a few weeks before her death. She refused the only option available to battered women and their children: a shelter. She wanted to remain at home, even though her husband was dangerous.

“Shelter doesn’t simply mean a safe place to sleep; it means walking entirely out of your life, having your children walk entirely out of their lives. It means disappearing from view.”

Within days after the restraining order was issued, William broke it and tried to kidnap her at gunpoint. Then, he managed to obtain release on bail. The judge did not have Dorothy’s affidavit swearing to years of violence. He did not speak to Dunne. Upon his release, William returned to the family home and held his wife hostage. Police surrounded the house, but he killed Dorothy and himself.

Determining a woman’s level of risk and developing alternatives to shelters became Dunne’s project. The biggest communication barrier was between the crisis center and the police. Gender differences contributed to a lack of trust. Civil courts try domestic cases, and the justice system doesn’t treat domestic violence incidents as crimes in the traditional sense. Law enforcement regards domestic violence as mostly vexatious.

“It’s in the cracks that murders happen.”

Dunne helped create an abuse response team with representatives from every department – including the emergency room, the courts, the prisons, the police and advocacy organizations. The crisis center became the communications center, and the representatives met monthly to review high-risk cases.

Crisis centers must expand options for battered women and their children.

Dorothy Giunta-Cotter refused to go into a shelter because she didn’t understand why she should disrupt her children’s lives when her husband was the problem. Moving to a shelter means victims must leave their lives behind. They are forced to choose between staying at home with their abuser or hiding from him in a shelter, which means disrupting their children’s education, and giving up their jobs and their daily routines, like caring for elderly parents.

“It’s not women who need to learn violence; it’s men who need to learn nonviolence.”

The criminal justice system uses the excuse that if women refuse shelter, they are “not afraid enough” to need help. No other crime removes civil liberties from the victim. The justice system allows landlords to evict families because domestic violence is a nuisance, then refuses women and children new housing because they live in a shelter. All too often, staying with the abuser seems like a battered woman’s only option.

Transitional housing and financial aid may be solutions. Peg Hacskaylo founded the District Alliance for Safe Housing (DASH) in Washington, DC. In 2006, DC offered 48 shelter beds to women and children, even though the police received more than 31,000 domestic violence calls a year. In 2010, DASH unveiled Cornerstone, a complex with 43 studio and one-bedroom apartments. Hacskaylo also negotiates with landlords to secure “scattered site” affordable housing. Hacskaylo started the Survivor Resilience Fund (SRF) because victims with access to an income have a greater ability to secure safe housing and justice. By empowering battered women with resources, programs such as DASH and SRF show abusers that the community will not tolerate their behavior.

Evidence-based prosecution can detain abusers while victims seek help.

In an ideal world, community programs that prevent violence would be the norm. Unfortunately, domestic violence remains classified only as a misdemeanor in many jurisdictions. Dunne’s High Risk Team relies on Massachusetts bail statute 58A, which assesses how dangerous an abuser is. It can detain a plaintiff for 180 days without bail. Preventive detention keeps victims at home and out of shelters and gives them time to reorganize their lives. 

“The United States is the most dangerous developed country in the world for women when it comes to gun violence.”

Evidence-based prosecution is an alternative to preventive detention and relies on evidence such as photos, 911 tapes, witness testimonies and prior records. A prosecutor can convict an abuser without victims taking the stand. But in 2004, the Supreme Court ruled that defendants have the constitutional right to face their victims (Crawford v. Washington), and it rejected victim statements from uncooperative witnesses. 

Between 2010 and 2016, US gun manufacturers produced 10.9 million guns. The states with the highest number of guns per capita are the states with the highest number of domestic homicides: South Carolina, Tennessee, Nevada, Alaska, Arkansas, Montana and Missouri. With regard to gun violence, the United States is the most dangerous place in the industrialized world for women. Communicating more effectively between social service agencies and law enforcement and disrupting the cycle of violence in the misdemeanor phase could change this narrative and save lives.

About the Author

Rachel Louise Snyder 

Rachel Louise Snyder is a journalist and associate professor in creative writing and journalism at the American University in Washington, DC. Her work has appeared in The New Yorker, The New York Times Magazine, Slate, Salon, The Washington Post, The Huffington Post, The Chicago Tribune and The New Republic.

Video & Podcast

There's Nothing Micro about a Billion Women Book Cover

There’s Nothing Micro about a Billion Women by Mary Ellen Iskenderian

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There’s Nothing Micro about a Billion Women, Making Finance Work for Women by Mary Ellen Iskenderian

Recommendation

Nearly one billion women, globally, have no access to the financial system. Failure to include women costs financial institutions billions in potential profit. Mary Ellen Iskenderian, president and CEO of the nonprofit organization Women’s World Banking, explains the causes of this exclusion, how to combat it and why everyone benefits from financial inclusion. Citing examples from India, Nigeria, Indonesia, Rwanda, Colombia, the Dominican Republic, Bangladesh and Mexico, Iskenderian details myriad ways to give women access to financial tools and emphasizes that financial institutions can do well by doing good.

Take-Aways

  • Despite decades of effort, almost one billion women remain financially disempowered.
  • Digital and financial literacy training are prerequisites to successful financial inclusion.
  • Digital finance ought to help empower women.
  • Some commercial banks succeeded by prioritizing medium and small enterprises led by women.
  • Saving and credit opportunities are fundamental for women’s financial inclusion.
  • Including women in finance requires action from regulators and policy makers.
  • Financial firms and private citizens can help achieve greater “financial inclusion” for women.
There's Nothing Micro about a Billion Women Book Cover

There’s Nothing Micro about a Billion Women Book Summary

Despite decades of effort, almost one billion women remain financially disempowered.

One-third of the planet’s adults have no access to financial services. More than half of these 1.7 billion people – almost a billion – are women. Women share the financial problems of low-income men, but gender norms can make their financial exclusion even more onerous.

For example, certain societies disapprove of women owning smartphones, which stops them from banking by phone. Yet when women control money, they are more likely than men to invest it for their families’ benefit. In households where women have more financial authority, children receive superior nutrition than in households where they don’t.

The “rotating savings and credit association” (ROSCA) offers a traditional option for impoverished people. It enables people without access to banking to pool their resources and lend money, sequentially, to its members. Such groups may form due to shared activities or backgrounds, and they rely on high levels of trust. Such cooperatives were precursors to modern banks.

“Improving a woman’s financial access brings with it an intergenerational multiplier effect that leads to consistently better outcomes in the health, education and lifelong earning potential of every member of her entire family…”

Muhammad Yunus invented microfinance in 1975 in Bangladesh, where he pioneered lending small sums of seed capital to groups of impoverished people. The capital gave them an opportunity to start self-sustaining businesses. Nonprofits worldwide experimented with microfinance institutions (MFIs). Initially, a few offered savings accounts and the ability to save became a precondition for receiving a loan. Most MFI borrowers have been women. Typically, MFIs lend money to people who are part of a group and repayment becomes the group’s responsibility.

Although MFIs are, by definition, self-sustaining, they initially relied on donations. Their evolution revealed problems. For example, to cover operating costs, MFIs charged high interest rates – sometimes as high as the local loan sharks charged.

Mexican MFI Compartamos, for example, went public with an IPO in 2007. In 2010, several women who borrowed from MFIs committed suicide when they couldn’t repay their debts. They knew that if they defaulted, their entire group would be responsible for their debt.

Digital and financial literacy training are prerequisites to successful financial inclusion.

When a Dominican bank included financial education in a telenovela about a house cleaner whose husband discovered her cash savings and splurged on a party, its account opening rate rose 39% over the next half year. Many women mentioned the TV drama as their reason for opening their accounts.

In Indonesia, one fintech company partnered with midwives to enable women to open savings accounts and gain access to digital finance services without having to share their phone numbers with male bank representatives.

“A woman’s ‘strategic life choices’ extend far beyond the purely economic options she has available, but her economic empowerment is an essential step toward gaining both resources and agency.”

Banks in the developing world often accept only immovable assets – such as homes – as collateral, which financial institutions often require. Thus, women often need title to their property in order to borrow, but their ability to secure title varies depending on the laws of their home country. For example, Rwanda’s government did not give women land inheritance rights until 1998 – a critical step toward recovery from the nation’s genocide. The settlement of Colombia’s conflict with Communist guerillas prioritized distribution of land to women. 

Women often face obstacles that do not confront men. For instance, a greater number of women than men lack legal identity documents. Even gender neutrality can become an obstacle, since “gender blind” policies tend, implicitly, to favor males. Also, women’s economic empowerment requires them to learn more skills, including literacy, negotiation tactics and knowledge of their rights.

Digital finance ought to help empower women.

While mobile financial tools matter, by themselves, they have a limited impact on women’s financial agency. Still, cell phone ownership is a critical tipping point for empowering women’s financial lives. Cellphone banking gives women confidentiality and convenience, so they can manage their money without proximity to a financial institution or input from a spouse or some other authority figure.

Women in India benefited from receiving economic advice along with the digital deposit of their federal “workfare.” Those who received supplemental information stayed employed longer and earned more money than those who received their digital payment without that information.

Gender norms in Niger make it difficult for women to assert opinions about their family’s money in public, so they benefit from receiving cell phone digital deposits which enable private financial discussions at home.

“Empowerment is, at its heart, the freedom to make one’s own choices…And sometimes that includes the choice to walk out the door.”

Whether financial inclusion increases a woman’s risk of domestic abuse remains unclear. In some countries, inclusion seems to correlate with higher risk. However, the self-confidence and security women gain from financial inclusion can make it easier for them to leave violent relationships. For example, a bank in Colombia observed that women whose account balances reached a certain trigger point would often leave abusive relationships. The bank partnered with shelters to keep its customers safe. 

Some commercial banks succeeded by prioritizing medium and small enterprises led by women.

If financial institutions treated women’s business loans as they treat men’s loans, they could gain $30 billion in new income. Kenya Commercial Bank (KCB), for example, is among the banks that offer women’s business clubs for developing contacts, education and even business travel. Women find its training and networking particularly valuable.

Acknowledging that its credit-approval process relied too heavily on collateral, KCB reformed its procedures to focus on a company’s cash flow. The bank implemented “gender sensitization training” in its branches, and its loans to female entrepreneurs grew substantially over two years. The bank’s portfolio for this project featured fewer non-performing loans than its overall loan portfolio featured, even though the loans’ basis did not include collateral. While addressing the women’s market required a significant commitment of resources and changes in processes, training and products, KCB expanded the program’s availability.

“Rarely do these households receive a regular, daily income of any kind.”

In 2013, when a third of Nigeria’s population had no access to financial services, the national government tried to expand its availability. Diamond Bank, one of Nigeria’s biggest, designed a savings account for small-scale market traders, many of them women. 

Informal savings schemes, like ROSCAs, were already popular in West Africa. To secure a loan, a group member would coordinate the process, collecting cash from each member and holding the funds for a fee. Women appreciated having the bank’s coordinator collect funds at their doors, but they objected to the fees.

Diamond emulated informal savings groups by sending representatives door to door. It introduced customers to ATM cards and cellphone banking, but the personal relationships they formed proved the most significant factor in women deciding to create bank accounts. 

“The lack of appropriate identification documents exacerbates and reinforces the gender gap in mobile phone ownership.”

Millions of women have become faithful customers of banks that make such efforts. Despite a subsequent decline in Nigeria’s economy, many clients report that banking helped their businesses and their families.

Savings accounts have advantages over informal savings groups. Such groups require members to take turns using the combined money, so cash might not be available to individuals when they need it. With a personal bank account, women also can maintain confidentiality, which reduces demands for money from their kin and neighbors. Diamond Bank’s leadership in the women’s market was a crucial factor when Access, Africa’s largest bank, acquired it in 2009.

Saving and credit opportunities are fundamental for women’s financial inclusion.

Women need health insurance. In some countries, the lion’s share of a patient’s financial burden comes from the cost of transportation to the hospital and bribes to get decent care.

Jordan’s Microfund for Women bundles hospitalization insurance with loans. In partnership with the Jordan Insurance Company, the Microfund provides about a day’s pay for each day of hospitalization. The fund’s managers initially didn’t think it would be possible to devise an insurance product the poor could afford and would accept. The Microfund insisted on having no exclusions for pre-existing conditions. Jordan initially resisted, but then officials discovered that it cost less to do without the exclusions than to collect the data necessary to enforce them.

“Female regulators and others from previously excluded groups must be listened to and their recommendations endorsed, so that their lived experience is valued as a resource for developing better policies.”

Although they don’t prioritize financial inclusion, Fintech companies with big data are lowering the costs of extending credit and expanding the potential market for loans. By contrast, inadequate data availability constrains traditional banks. 

Peer to peer (P2P) lending can be faster and less onerous for women than traditional forms of borrowing. Analysis in China found that peer lending to women was more profitable than similar lending to men. In 2019, P2P loans totaled $67.9billion worldwide.

Including women in finance requires action from regulators and policy makers.

Those in power can take numerous steps to include women in the financial system:

  • Simplify procedures – Some countries have implemented simpler customer protocols to facilitate people opening accounts even with only scant documentation. These basic accounts helped provide COVID-19 pandemic relief to millions of people previously excluded from the system.
  • Collect data about gender – Failure to “disaggregate” data by gender impedes financial inclusion. 
  • Remove legislative discrimination – The World Bank found that 167 countries have at least one law constraining women’s financial opportunities.
  • Subsidize phones for impoverished people – Governments should subsidize phone ownership for their poorest constituents. They can take measures to reduce the cost of having a phone, such as building infrastructure and encouraging competition.
  • Enable women to own property in their own names – When women own property, they have collateral for a bank loan. A registry of movable collateral helps women by expanding the pool of qualified collateral.
  • Send government payments to women’s bank accounts – Too often, countries send such payments to a male “head of household.” Directing payments to women would provide more benefits to their families.
  • Add women to regulatory boards – Banks have a poor record on gender diversity, but regulatory institutions have even worse records. Greater representation of women on supervisory boards correlates with more stable banking sectors. 

Financial firms and private citizens can help achieve greater “financial inclusion” for women.

Financial institutions that neglect women surrender up to $700 billion in annual revenue. This amount represents up to one-fifth of the revenue that “banks, insurers and financial service providers” could generate. Institutions should do the following instead:

  • Make sure senior management supports a “women’s proposition” – Women behave differently than men and have distinctive needs and preferences. They may seek more information and want more time than men to consider a financial decision.
  • Analyze data by gender – Data tools that address how women use financial services should guide the design and delivery of products and staffing decisions.
  • Encourage “discouraged borrowers” – Some creditworthy potential borrowers expect to be declined and, thus, they don’t apply for loans in the first place. In fact, women-owned companies are no more likely to suffer rejection than male-owned firms. Raising expectations promotes greater inclusion.
  • Diversify teams – Women remain dramatically under-represented in financial firms’ upper management and on their boards. More women in leadership positions correlates with fewer non-performing loans, higher profits and more innovation.

Concerned consumers can check their financial institution’s support for women. Becoming informed equips you to help stem financial abuse and broaden the teaching of financial literacy.

About the Author

Mary Ellen Iskenderian

Mary Ellen Iskenderian is president and CEO of Women’s World Banking, a global nonprofit devoted to giving more low-income women access to financial tools and resources.

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Women and Power book cover

Women & Power by Mary Beard Book Summary

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Women & Power, A Manifesto by Mary Beard

Recommendation

Classics scholar and Cambridge professor Mary Beard explains that the misogyny women face today – from anonymous social media threats of violence to subtle acts of exclusion from systems of power – trace back to classical antiquity. Writing in an academic, yet lively and accessible style, she details how society constructed power to exclude women. Beard’s rousing survey of history urges readers to re-imagine what power could look like today.

Take-Aways

  • Ancient examples of men silencing women relate to contemporary events.
  • The ancient Greeks viewed women who spoke publicly as androgynous and monstrous.
  • People often don’t regard feminine-sounding voices as authoritative.
  • Women today face threats when they speak out, as they did in the ancient world.
  • Society punishes women more for their mistakes than it punishes men. 
  • Western society constructs power as existing outside the realm of the feminine.
  • Women challenged men’s abuses of power as part of the #MeToo movement.
  • Social movements demonstrate the importance of re-imagining power.
Women & Power book cover

Women & Power Book Summary

Ancient examples of men silencing women relate to contemporary events.

One of the earliest examples of a man silencing a woman’s voice dates back 3,000 years, near the origins of recorded Western culture. In Homer’s Odyssey, the queen Penelope asks a bard, who is singing about the obstacles preventing Greek heroes from returning home after the Trojan War, to sing a happier song; her husband, Odysseus, is among these missing heroes.

Her son Telemachus silences her, saying, “Go back up into your quarters, and take up your own work, the loom and the distaff…speech will be the business of men, all men, and me most of all, for mine is the power in this household.” Ancient narratives offer multiple such examples of men silencing women. These examples relate to contemporary moments of men excluding women from public speech. The stories also show that modern-day bullying – say, by posting threats on social media – and the abuse of women who disagree with men, or challenge existing authority structures, is not a new phenomenon.

“What interests me is the relationship between the classic Homeric moment of silencing a woman, and some of the ways women’s voices are not publicly heard in our own contemporary culture, and in our own politics from the front bench to the shop floor.”

When Englishmen created the House of Commons’ parliamentary rules and procedures in the 19th century, they drew from classical traditions. Rumor has it that Barack Obama’s speechwriters, likewise, gained inspiration from ancient statesmen and orators like Cicero. Ancient templates for public speech continue to shape contemporary conceptions of which kinds of public speech are bad or good. The exclusion of women from public speech, comment and debate has a complex history, and many classical ideas about gendered approaches to advocacy influence today’s discourse.

The ancient Greeks viewed women who spoke publicly as androgynous and monstrous.

In the ancient world, people regarded public speaking as inherently and exclusively masculine. Public speaking was innate to the social construction of masculinity, not femininity. When women spoke publicly in first-century Rome, one anthologist described them as “women whose natural condition did not manage to keep them silent in the forum.” When a woman named Maesia defended herself skillfully in the Roman courts, that commentator attributed her ability to the notion that “she really had a man’s nature,” and was androgynous. 

“A woman speaking in public was, in most circumstances, by definition not a woman.”

Ancient Greek myths about women who challenged men, such as Medea, Antigone and Clytemnestra, depict them as “monstrous hybrids” whom society must punish for “unnaturally” clinging to power. In Aeschylus’s drama Agamemnon, for example, Queen Clytemnestra rules her city while King Agamemnon is away fighting in the Trojan War. Aeschylus refers to her as having “manly purpose,” then describes her as trying to hold onto power illegitimately by killing her husband on his return. Her children restore the patriarchal order by teaming up to kill her.

People often don’t regard feminine-sounding voices as authoritative.

In Homeric Greek, writers use the word muthos to denote authoritative speech, in contrast with women’s private, domestic chatter. This notion continues to influence modern understandings of how a knowledgeable speaker should sound. People today view Western women politicians as lacking in authority or wisdom if they don’t imitate a deep, masculine-sounding voice. 

As in the Ancient Western world, modern women in the political arena often feel they must take on more androgynous characteristics – such as imitating male vocal qualities – to command respect. For example, Margaret Thatcher underwent vocal training to change her high-pitched feminine voice to a lower, more masculine-sounding register, which her advisers felt conveyed more authority. 

“What we need is some good old-fashioned consciousness-raising about what we mean by the ‘voice of authority’ and how we’ve come to construct it.”

The Romans described the voices of women who spoke out publicly in disparaging ways, comparing their speech to “yapping” and “barking.” Today, misogynists describe women who voice their opinions as “whining” or “whinging.” Given that women suffer underrepresentation in positions of political power, people must reflect on the role that gender bias plays in determining the types of voices they feel convey authority, and which ones they associate with impudence or lack of gravitas.

Women today face threats when they speak out, as they did in the ancient world.

Stories from the ancient Western world often feature female characters violently robbed of their ability to speak by men. For example, in the Roman poet Ovid’s Metamorphoses, Princess Philomela’s rapist cuts out her tongue to prevent her from speaking of his crime. In Roman mythology, the nymph Echo loses her ability to express herself. As punishment for talking too much, Echo can only repeat other people’s words – never using her own voice – for the rest of her existence. These stories served as cautionary tales. If women dared to speak too boldly or to confront the patriarchal status quo, they would suffer violence or taunting.

“I’ve lost count of the number of times I’ve been called an ‘ignorant moron’.”

Still today some men bully and threaten women who speak publicly in traditionally male-dominated roles, ranging from professional sportscasting to politics. For example, when Jacqui Oatley became the first woman in the United Kingdom to provide sportscasting commentary for the football program Match of the Day, male commentators called her performance “an insult to the controlled commentaries of men.” 

Outspoken women frequently receive online threats of violence – including of rape or murder. Internet trolls take to Twitter, assaulting women who voice their opinions with threats such as a tweet directed to author Mary Beard that said, “I’m going to cut off your head and rape it.” 

Some men bully women in politics when they try to speak publicly. For example, in the British House of Commons, male MPs taunt female counterparts loudly to drown out their voices. Underlying this abuse is a fear that women might legitimately challenge the patriarchal order. Ovid captures this fear in Metamorphoses, when Philomela tells her story of survival – despite no longer having her tongue – by weaving her saga into textile art and identifying her rapist.

Society punishes women more for their mistakes than it punishes men. 

Women face an unfair double standard when they speak publicly and make mistakes. People will forgive male politicians for fumbling their words – take, for example, Boris Johnson’s clueless-sounding remarks during a 2017 interview on the Tory’s position on preventing racism within the justice system or expanding access to higher education. However, women face steeper criticism for their mistakes. 

“It is not just that it is more difficult for women to succeed, they get treated much more harshly if ever they mess up. ”

While people tended to dismiss Johnson’s errors as acceptable forms of “laddish waywardness,” they proved less forgiving when UK MP Dianne Abbott became confused during the same election cycle when discussing figures relating to police recruitment. People ridiculed her, hurling insults such as “fat idiot” and “bone-headed stupid.” Women have a right to pursue success in traditionally male-dominated roles, as well as the right to make mistakes without engendering fiery chastisement.

Western society constructs power as existing outside the realm of the feminine.

Conventional definitions of power exclude women. History doesn’t offer a template for how powerful women should fill traditionally male-dominated roles. Women in those roles tend to imitate masculine aesthetics. Female politicians such as Hillary Clinton and Angela Merkel, for example, wear pantsuits to fit the image of a powerful person, which society holds as masculine by default. 

The ancient Greeks viewed the powerful Goddess Athena as more masculine than feminine, depicting her in male warrior clothing and as a virgin born, not of a mother, but from the head of her father. When people conjure images of someone in power, such as a professor or a politician, those images tend to be male. A search for images of cartoon professors using UK Google Images, for example, produces an overwhelming majority of male characters. 

Despite the fact that more women occupy powerful positions today than they did half a century ago – now taking on roles ranging from police officers to CEOs – these women are a minority of those in power. People often associate femininity with weakness, and masculinity with power. President Donald Trump complained bitterly, for example, about actor Melissa McCarthy’s parody of then-White House press secretary Sean Spicer on Saturday Night Live, because he felt she made him appear “weak.”

“The point is simple but important: As far back as we can see in Western history, there is a radical separation – real, cultural and imaginary – between women and power.”

When the idea of female power does emerge in historic narratives, it exists predominantly as something men must suppress whenever it appears. The symbolism of the head of the Medusa, depicted in art from the ancient Greeks through modernity, captures the essence of this perceived threat to male power.

In one myth of Medusa’s origins, Poseidon rapes Medusa in Athena’s temple, and Athena punishes his victim – instead of Poseidon – by transforming Medusa into a monster with snakes for hair. Medusa gains power after this transformation, and anyone who looks at her turns to stone. A male hero, Perseus, decapitates her to strip her of this power.

Contemporary women challenged men’s abuses of power as part of the #MeToo movement.

In classical antiquity, men permitted women to speak publicly in two situations: when they were victims, describing crimes someone committed against them, and when they were about to die as martyrs. Early Christian women in Ancient Rome, for example, would give their testimonies before lions devoured them. 

Media and public forums created spaces for women’s voices as part the #MeToo movement, as women described their experiences as survivors of rapes and sexual assaults perpetrated by powerful men in industries such as film. 

“Thankfully, not everything we do or think goes back directly or indirectly to the Greeks and Romans; and I often find myself insisting that there are no simple lessons for us in the history of the ancient world…That said, looking harder at Greece and Rome helps us look harder at ourselves, and to understand better how we have learned to think as we do.”

While women have felt rightfully empowered to tell their stories – a difficult feat given that men served as gatekeepers to their success – powerful male perpetrators of these crimes won’t be held accountable unless society dissects the accused aggressors’ versions of events. What excuses are powerful men using to justify their actions to themselves and other people, and why don’t these excuses hold up anymore? It’s not enough for women to share their stories of surviving sexual harassment and assault; now society must collectively challenge the narratives powerful men rely on when they misuse their power.

Social movements demonstrate the importance of re-imagining power. 

Power should no longer be the elite and prestigious realm of a minority of people, associated with leadership, prestige and celebrity. Social movements such as Black Lives Matter demonstrate the importance of defining power as something that exists in collaboration, among leaders and their followers. Few people had heard of Alicia Garza, Opal Tometi and Patrisse Cullors before they created Black Lives Matter, but they launched one of the most important social movements in recent history. Garza, Tometi and Cullors prove that ordinary individuals can challenge the status quo, and that women don’t need elite status to be powerful.

About the Author

Mary Beard

Mary Beard, the classics editor of The Times Literary Supplement, is a classics professor at the University of Cambridge, an ancient literature professor at the Royal Academy of Arts, and a Newnham College fellow.

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The Truth About Crypto Book Cover

The Truth About Crypto by Ric Edelman Book Summary

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The Truth About Crypto, A Practical, Easy-to-Understand Guide to Bitcoin, Blockchain, NFTs, and Other Digital Assets by Ric Edelman

Recommendation

In this guide to cryptocurrencies and blockchain, prominent financial adviser Ric Edelman pulls off an impressive balancing act. On the one hand, he comes across as an enthusiastic cheerleader for digital assets. On the other, he clearly and repeatedly tells readers not to put more than 1% of their portfolios into this new market. His cautious approach is a good thing, because the timing of this book was less than perfect: Its 2022 publication date coincided with a crypto crash. getAbstract never gives investment advice, but Edelman makes a strong case that cryptocurrencies aren’t going away and that investors would be wise to take them seriously.

Take-Aways

  • Blockchain technology has the potential to transform economies.
  • Bitcoin has gone mainstream.
  • Yet bitcoin suffers from some fundamental flaws.
  • Despite the doubters, cryptocurrency is real money.
  • Some see bitcoin as a digital alternative to gold.
  • An investor can take a position in digital assets in a number of ways.
  • Bitcoin has generated truly eye-popping gains.
  • Trepidation is typical – here’s how to overcome common objections to investing in bitcoin.
The Truth About Crypto Book Cover

The Truth About Crypto Book Summary

Blockchain technology has the potential to transform economies.

The traditional economy is based on trust – a company or an individual can keep a record of deposits and withdrawals, for instance, but there’s no assurance that the ledger is accurate and complete. Blockchain, on the other hand, creates an “authentication economy.” Blockchain relies on distributed ledger technology, in which every transaction is recorded publicly, for all to see. This trait promises to transform previously complicated transactions. For example, with blockchain, there’s no need for a real estate transaction to be bogged down in weeks of mortgage approvals and title searches. The transaction can happen immediately. As a result, blockchain threatens to make title insurers and settlement attorneys obsolete.

“Blockchain technology will be so impactful because it revolutionizes business.”

It’s not just the real estate industry that will find itself disrupted by blockchain technology – blockchain can make stockbrokers, insurance agents and ticket resellers redundant. That’s because the blockchain is designed to be a foolproof way to authenticate large transactions. The blockchain is decentralized, which means no one person can commit fraud. It’s transparent – everyone can see every transaction. And this technology is permanent. Once a record has been entered on the blockchain, it can’t be removed, duplicated or changed.

Bitcoin has gone mainstream.

The bitcoin blockchain debuted in 2009, a moment when the global economy was in free fall. At the time, bitcoin was such a novel concept that few people attempted to solve the difficult math equations required to earn the new cryptocurrency. In 2009, the block reward for solving a problem was 50 bitcoins. As of 2020, after a series of halvings of block rewards, the compensation had fallen to 6.25 bitcoins. The competition has grown so fierce that bitcoin miners no longer use standard desktop computers. Instead, they buy $12,000 rigs, even stringing them together to boost their chances.

“All this publicity, supported by huge increases in the price of bitcoin and other digital assets, has created a seemingly unstoppable force.”

Bitcoin was always envisioned as an alternative to fiat currency. While the US government can create an endless supply of dollars, the supply of bitcoin will be limited to 21 million coins. As of 2022, about 18.5 million coins had been mined, and some 4 million had been lost. Some early miners didn’t bother to keep track of their bitcoins; others lost their passwords. Bitcoin billionaire Mircea Popescu drowned in Costa Rica in 2021, and no one knew his bitcoin password.

“We must always be careful when investing. It’s no different with digital assets.”

In recent years, bitcoin has gone mainstream. Some 200 million people own at least some bitcoins. Credit card issuers, retailers and even a mortgage company have acknowledged the trend by accepting bitcoins as payment. Transaction volume exceeds $1.5 trillion a year, more than twice PayPal’s annual activity.

Yet bitcoin suffers from some fundamental flaws.

The idea behind bitcoin was that it would replace government-backed currencies. However, that goal has been complicated by a few realities. One is that bitcoin is quite volatile, a characteristic that undermines its use as a currency. Another issue is that settling a transaction in bitcoin is slow – the bitcoin ledger takes seven seconds to approve a transaction. By contrast, Visa handles 1,700 purchases per second. Bitcoin’s shortcomings led to the creation of other cryptocurrencies, including Tether, Litecoin and Ether, many of which sought to address problems with the original virtual currency.

“The digital asset ecosystem is complex and ever-growing.”

Despite the growing popularity of bitcoin, skepticism remains. One line of criticism says that bitcoin can’t be money because it’s not underpinned by gold, silver or anything else of value. However, a similar argument could be made about US dollars – they’re not backed by anything tangible either. They have value because consumers place their trust in the government that issues the money.

Despite the doubters, cryptocurrency is real money.

Take a step back and analyze what makes a currency a currency. Those factors include scarcity, acceptability, uniformity and portability. Of course, bitcoin’s volatility undermines its status as currency. That’s why new flavors of cryptocurrency are positioned as stablecoins, or a cryptocurrency whose value is pegged to a fiat currency. A US stablecoin, for instance, is worth the same as a US dollar.

“This is why digital assets are here to stay: governments love ‘em.”

Across the world, governments are moving away from physical money. Hard currency presents problems. It’s untraceable, so criminals, cartels, terrorists and tax evaders favor cash. A number of nations are testing central bank digital currencies (CBDCs). The Bahamas has already introduced a CBDC, known as the sand dollar, and China, Russia and Japan are among the major countries testing virtual money.

Some see bitcoin as a digital alternative to gold.

Bitcoin enthusiasts aren’t the first group to question the primacy of fiat currency. Gold bugs have long pitched their favorite metal as a superior alternative to paper money. They point to a variety of reasons to prefer gold: The metal has served as a store of value for thousands of years, and it’s a hard asset. What’s more, they argue, gold provides its holders with hedges against political upheaval and inflation. In addition, the supply of gold is finite, and its value isn’t correlated with equities.

“The two asset classes have nothing in common, and the words bitcoin and gold should never appear in the same sentence.”

But the gold bugs overlook some obvious downsides of gold. Its bulk is an issue – $1 million of gold weighs 35 pounds, so it’s not the most portable of assets. What’s more, gold’s permanence means that its supply grows every year as more gold is mined. And gold isn’t guaranteed to provide a hedge against inflation – sometimes it works as a hedge, other times it doesn’t. But the salient point is that gold and bitcoin really have nothing to do with one another. Comparing them is pointless.

An investor can take a position in digital assets in a number of ways.

How can you make money from the revolution in digital assets? Here are a few strategies investors are using:

  • Mine coins – If you have the technical expertise to mine coins and the cash to invest in mining rigs, solving math problems is one way to play the cryptocurrency market. If the coins you earn from mining are worth more than your expenses, this strategy will pay off.
  • Invest in miners – As mining grows more difficult, the most successful miners are sophisticated companies. Riot Blockchain is one example: The publicly traded company said it spends about $15,000 to mine a single bitcoin – so as long as the price is above that mark, mining is profitable. A handful of other publicly traded miners let investors enter the market this way.
  • Buy coins or tokens – You can directly buy bitcoin, Ether and other cryptocurrencies. Dozens of digital asset exchanges smooth this process, letting you set up accounts where you can buy and sell cryptocurrencies. Prominent exchanges include Binance, Coinbase, Gemini, Kraken and Robinhood.
  • Farm for yield – You can lend or stake your coins to others and earn interest, a process known as “yield farming.” A word of caution: Yield farming is a risky endeavor.
  • Invest in blockchain infrastructure – During the 19th-century California Gold Rush, Levi Strauss became a household name not by mining for gold but by selling supplies to miners. The picks-and-shovels strategy applies to digital assets, too.
  • Buy derivatives – You could buy options, futures, forwards or swaps based on the future movements of digital assets. However, this is a risky approach. The leverage involved in these contracts magnifies gains and losses.
  • Buy bitcoin futures ETFs – This type of ETF, or exchange-traded fund, doesn’t directly own bitcoins. Instead, the fund holds futures contracts on digital assets. For most investors, the consumer protections governing ETFs make this vehicle preferable to playing the futures market directly. Examples include the Global X Blockchain & Bitcoin Strategy ETF and the ProShares Bitcoin Strategy ETF.
  • Invest in a venture capital fund or hedge fund – Once a growth company hits the stock market, all the big gains have already happened. But venture capitalists can score truly huge returns by taking stakes in early-stage companies. If this appeals to you, consider investing directly in a venture capital fund. But beware – the risks are no joke. Among the downsides: Your capital will be locked down for five to 10 years, you’ll get no dividends or interest, investment minimums can range as high as $10 million, and you’ll pay steep fees.

Bitcoin has generated truly eye-popping gains.

The first bitcoins traded in July 2010 for 7 cents apiece. As of October 2021, that price was $61,319. An investor who held bitcoins for the duration was sitting on a return of 87,598,471%. An investor who waited until October 2011 to buy bitcoin at $3.11 would have reaped a return of 1,971,572%. Even buying in October 2016 at $727 would have yielded a gain of 8,335%. Those sorts of outsized gains have encouraged many to try to market-time digital assets. This is a mistake, because it’s all too easy to miss the single-day gains. The recent history of bitcoin shows that most of the profits in any given year come in just 10 days of the year.

“Investing a lot is a mistake. But investing nothing is also a mistake.”

The smarter move is to use dollar-cost averaging, a strategy that lets you buy digital assets incrementally. You can set a schedule of weekly, monthly or quarterly investments. Dollar-cost averaging is less risky than investing a lump sum in digital assets. Say you bought bitcoin in December 2017, when the price was $13,379. By January 2019, the price had plunged 74%. But by October 2021, bitcoin had returned to late 2017 levels. Waiting nearly four years just to break even isn’t an exciting investment strategy. But if you had dollar-cost-averaged your purchases, your losses in the 2018 crash would have been smaller, and your break-even point would have come sooner.

Trepidation is typical – here’s how to overcome common objections to investing in bitcoin.

Cryptocurrency, blockchain and digital assets are strange new concepts, so reluctance is understandable. Those fears are logical, but they need not prevent you from investing in blockchain. Here are some common objections:

  • “I’m nervous about investing in digital assets” – There’s no shame in feeling this way; you should be anxious about investing in an asset class you don’t understand. But the more you learn about blockchain, the more the case makes sense. What’s more, investing in digital assets can provide a variety of benefits, including diversification, higher returns and protection against inflation.
  • “It’s a fad” – For investors, it’s crucial to distinguish between fads and trends. Bell-bottom jeans were a flash in the pan, but casual clothing is an enduring trend. Investors of a certain age remember the Beanie Babies fad. Digital assets are not another version of the Beanie Babies toys; this is a legitimate trend.
  • “It’s a fraud” – Investors always need to be mindful of chicanery, but bitcoin itself isn’t a scam. Instead, you should recognize that every credible asset class – stocks, bonds, real estate, commodities – has been used as a tool by hucksters and fraudsters.
  • “There’s no way to ascertain value” – In the blockchain space, prices are decentralized. No individual or authority sets the price. That’s actually an advantage of digital assets.
  • “It’s too volatile” – Bitcoin crashes regularly. But so do other asset classes, including stocks and real estate. Savvy investors view volatility as an opportunity. Upside volatility is a reward for investors; downside volatility is an opportunity to buy at a discount.
  • “It’s too risky” – Risk is involved in any new type of investment. You can mitigate the risk of digital assets by devoting no more than 1% of your portfolio to this class of assets.
  • “I don’t need it in my portfolio” – Just as stocks, bonds and real estate provide you with diversification, digital assets can zig when the rest of the market zags.
  • “It’s too late to buy” – It’s true that the price of bitcoin has soared, from $479 in 2012 to $50,000 or more in 2021. Some skeptics say this means the opportunity to buy has come and gone. In fact, the soaring price of bitcoin makes it a safer investment. Its price in 2012 reflected its novelty and its limited acceptance. Now, though, the use case for bitcoin has been well established.
  • “I’ll wait for the next decline” – If you wait too long, the prices of digital assets will run away from you. So employ the magic of dollar-cost averaging. By buying in increments, you’ll benefit from the eventual rise of digital assets.
  • “I don’t know how to begin” – Talk to a financial adviser. You can find good advisers at DACFP.com, the website of the Digital Assets Council of Financial Professionals.

About the Author

Ric Edelman 

Ric Edelman was ranked the top independent financial adviser three times by Barron’s. He hosts a national radio show and podcast, and he is the author of 10 books about personal finance.

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Winning the loser's game Book Cover

Winning the Loser’s Game By Charles D Ellis Book Summary

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Winning the Loser’s Game, Timeless Strategies for Successful Investing, Eighth Edition by Charles D. Ellis

Recommendation

In this updated investing classic, market expert Charles D. Ellis offers a solid and unbiased analysis of how markets work today, and he explains why even the best professionals can no longer expect to sustain a winning streak. The savviest strategy for individual investors, he argues, is to invest in low-cost index funds where the objective is to replicate – not outperform – the broad market. While getAbstract never offers investment advice, it believes that anyone saving and investing to achieve a comfortable retirement and other goals will want this important reference book in their libraries.

Take-Aways

  • It’s no longer possible to beat the market.
  • Active investment is not a zero-sum game but a negative-sum game.
  • Professional stock pickers try to find anomalies in share prices.
  • Over the long haul, index investing produces better results than most actively managed funds and almost all individual investors.
  • An investor loses simply by being out of the market.
  • Diversification minimizes the risk of individual stocks and stock groups, but overall market risk comes with investing.
  • Individual investors’ objectives, motivations and behavior differ from those of institutional investors.
Winning the loser's game Book Cover

Winning the Loser’s Game Book Summary

It’s no longer possible to beat the market.

The traditional notion of investment management holds that beating the market is possible and that superior management will do the job. In any given year, a couple of funds may do better than the averages, but sustained outperformance is rare indeed. In the dim past, experts with information and skills could beat the market. Nowadays, the market effectively consists of institutions with state-of-the-art technology. Nearly all trades in listed stocks are executed by institutional investors. The professionals trading for these institutions all have the same good technical capability and data. Their collective decisions establish the prices of stocks, so these professionals can’t beat themselves. In fact, when fees and expenses enter the calculation, most fund managers will underperform the broad market indexes. Individual investors, moreover, will underperform the professionals by a large margin.

“The reason investing has become a loser’s game even for dedicated professionals is that their efforts to beat the market are no longer the most important part of the solution; they are now the most important part of the problem.”

Take a lesson from tennis. Dr. Simon Ramo, an engineer, studied the game closely and found significant differences between a professional player’s game and that of most amateurs. Professionals excel at hitting the ball where they want it to go, forcing their opponent into a loss. Amateurs, however, make a lot of mistakes. In professional tennis, the winner determines the final score. In the amateur game, the loser’s errors determine the result. Institutional investing used to be a winner’s game. However, as professional investors with excellent information access and powerful computers have come to dominate the market, they now establish the consensus value.

Active investment is not a zero-sum game but a negative-sum game.

For the majority of investors, the hardest part of investing is sticking with the plan, no matter what happens in the markets and no matter what emotions arise. Professional investment advisers help clients set realistic and appropriate long-term objectives and policies. However, fees and expenses take a big bite out of whatever returns an active manager does generate, and those returns are not likely to match those of the market. A reasonable estimate of pretax operating costs for the typical mutual fund is 3.25%. So just to break even, an active manager has to recover that cost. With an estimated future rate of return for the market of about 7%, this means that the manager must return, before expenses, 10.25% just to match the market average. To outperform professional peers, it would be necessary to regularly find them making mistakes and to exploit those mistakes quicker than anyone else.

“For 9 out of 10 deciles of past performance, future performance is virtually random.”

The stock market is not what it used to be. Trading volume on the New York Stock Exchange has risen more than 2,000 times, with proportionately similar volume increases on other major exchanges. Today, derivatives trading is even greater than trading in the cash market.

The US Regulation Fair Disclosure, known as RegFD, requires public companies to make all information available to everyone simultaneously. Before RegFD, privileged access to information could give an active professional trader a big advantage. Now, that valuable edge is a mere commodity. Algorithmic and other forms of quantitative trading substantially influence the market. On top of that, the number of professional capital markets investors has multiplied from 5,000 to more than a million. None of them has an information advantage over the others; they all have 24-hour access through more than 345,000 Bloomberg terminals. Consequently, markets have become more efficient, and it is harder than ever for any investor to beat the market. In their advertisements, investment firms cherry-pick funds to highlight, selecting those that have turned in good returns over selective time periods. Some managers maintain hundreds of funds, so there will always be a few that look like winners.

Professional stock pickers try to find anomalies in share prices.

Price setting is a collective effort by all institutional investors with access to the same data. The only way to beat the market is to beat those professionals, and opportunities to get an advantage are rare. So, if it efficiently reflects real value, why does the market rise and fall? Understanding how other market participants think and anticipating their moves is part of an investor’s calculation of future value. Even small nuggets of information or misinformation can have huge market consequences. Long-term investors should steel themselves against the distractions from short-term market movements. Studying the history of markets to understand how they have acted in the past can provide insight into how they are likely to act in the future. Such insight can help you keep your head while others are losing theirs. Anomalies do happen and are part of the market’s normal behavior.

“All forms of active investing have one fundamental characteristic in common: They depend on the errors of others.”

By using an index fund, which replicates market performance, you can effectively assemble a team of the most knowledgeable and experienced professionals in the world and supplement their advice with research from the best analysts. Numerous investing experts, including Warren Buffett and Nobel laureates, recommend indexing for most individual investors. In addition to providing returns that most actively managed funds cannot equal, much less beat, index funds also bring less tax liability, and they charge lower fees. Index investors will see ups and downs, but they will not have to worry that their investment manager has made the wrong guess about timing the market.

Over the long haul, index investing produces better results than most actively managed funds and almost all individual investors.

The index investor can concentrate on developing a portfolio that reduces the probability of error and enhances the likelihood of achieving objectives. Investing has two risks: investment risk and investor risk. Numerous studies show that active investment costs more than it returns; no studies support the contrary. The formula for successful investing is to define the objectives, select an appropriate mix of assets and stay the course. Indexing makes this easier. The index investor need not worry about a company’s management problems or its acquisition by another firm, or about internal issues with a financial adviser. The strongest argument for indexing occurs in the major markets, such as those in the United States, the United Kingdom and Japan.

Diversification optimizes the risk-return trade-off. Therefore, the most prudent investors will choose a fund representing a total market. Individuals should avoid narrowly focused, specialized exchange-traded funds; professionals use these to tweak their risk management.

“Winning investors are not in competition with one another; they are in competition only with themselves.”

Only by holding on through thick and thin can the long-term investor realize the expected returns. This is why it is important to understand how capital markets work. Every investor has a “zone of competence” and a “zone of comfort,” and it is important to stay within both. Straying from the competence zone leads to expensive blunders; getting out of the comfort zone carries the risk of irrational, emotional decisions. Investment portfolios should be tailor-made for an investor’s age, assets, risk tolerance and other characteristics that differ from person to person. Only you as an investor can set your investment policy, whether or not you collaborate with a professional adviser. Neglecting such an assessment introduces the risk of managing long-term investments according to short-term developments.

An investor loses simply by being out of the market.

The greatest returns of the S&P 500 happened on less than 1% of the trading days in a 20-year period. Missing just the five best days in 72 years of trading would cut a portfolio’s returns in half. Although market timing does not work, time itself is a crucial consideration in investing. Time does not change the average expected return, but it can greatly affect fluctuations around the average. The longer the portfolio time horizon, the more probable it is that portfolio returns will approximate the average expected returns. The relative returns of stocks, bonds and cash differ significantly, according to the holding periods. The proportion of fixed income investments and equities is the most important consideration in your investment policy. Conventional recommendations of 60% equities and 40% debt may be reasonable for a five-year horizon but wrong for an investor with a 30- or 50-year horizon. Long-term investors know about regression to the mean and understand that both economic and market forces move eventually toward the average.

“If the market has been going up, investors, who curiously usually evaluate future prospects by looking into the rearview mirror, will assume some further upward momentum.”

Investment history shows that, on average, common stocks return more than bonds, which in turn return more than money market investments. Stock returns fluctuate more than bond returns, which similarly fluctuate more than money market returns, and the volatility of returns increases the shorter the investment time span.

Diversification minimizes the risk of individual stocks and stock groups, but overall market risk comes with investing.

Stocks of different companies may share similarities if they’re in the same industry or show the same pattern of growth, and they may exhibit similar risks. An investor who takes individual stock or stock group risk can only win if the expert consensus of the overall market is wrong about that investment’s value. Index funds provide the diversification that eliminates individual stock and stock group risk. The most important investment decisions are those that define the appropriate objectives and asset mix.

“Managing market risk to suit the investor is the primary tool of investment management.”

In the short run, a manager whose performance is significantly above or below the expected return is probably off mission. It is all too easy for the individual investor to mistake luck for skill. Some 90% of actively managed mutual funds that invest domestically have underperformed the benchmark index they were trying to beat. Only 11% managed to match the performance of their index over a 15-year time frame. The reality is even worse than these statistics indicate. Investment firms have several ways to give investors a falsely positive impression of their fund performance. They don’t, for example, report on funds they have closed, and more than 40% of domestic mutual funds close within 15 years.

Individual investors’ objectives, motivations and behavior differ from those of institutional investors.

Individual investors see money in a way that’s different from how institutional investors regard funds. For some people, the money they’ve amassed during their lives comes to symbolize what they’ve accomplished. Thus, money can take on emotional connotations, and those who are approaching or are in retirement might make financial decisions based on sentiment rather than economic rationality.

“Mortality is a dominant reality for all individual investors.”

For most people, investment begins with savings. Think of saving as something positive rather than as a form of self-denial. Specify savings goals, then plan a schedule to achieve those targets. Keep your focus on the idea that the purpose of saving is to achieve a better lifestyle. When you’re ready to invest what you’ve saved, minimize fees, taxes and expenses by indexing, and don’t forget to take inflationary expectations and their potential impacts on your portfolio into account.

“If you have successfully saved and invested enough to have ample funds for all your chosen responsibilities and obligations, you have truly won the money game. Bravo! This is an appropriately thrilling achievement.”

For an individual, the best long-term investment is in equities. Conventional wisdom says that older investors should have most of their money in bonds. However, that may not be so wise, especially in a low interest rate environment. The elderly may not have long personal time horizons, but their investment portfolios might. Children, grandchildren and other beneficiaries gain from the foresight of the investor who thinks about the future and invests in equity index funds.

About the Author

Charles D. Ellis founded Greenwich Associates, an international consulting firm, and he is a consultant to large institutional investors, government organizations and high-net-worth families.

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Mastering the Market Cycle Book Cover

Mastering the Market Cycle by Howard Marks Book Summary

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Mastering the Market Cycle, Getting the Odds on Your Side by Howard Marks

Recommendation

Looking to improve your investment returns? Investing legend Howard Marks shows you how to recognize market cycles: the ups and downs of economic markets that repeat and reverberate throughout history. Deciphering market cycles provides a knowledge advantage. Calibrating your investment strategy to cycle movement enables you to be aggressive when the chance for success is high and defensive when it is not – which often puts you at odds with the rest of the investment community. Lean in to the human-driven phenomenon of market excess and correction to capitalize on opportunities for exceptional returns.

Take-Aways

  • Calibrating your investment portfolio in response to changes in the market environment brings superior results.
  • Learn to identify market cycle themes and patterns.
  • Short-term economic activity fluctuates along the long-term trend without changing its trajectory.
  • The free-market system enables the distribution of economic resources and promotes productivity.
  • People’s emotional swings and resulting behaviors cause the highs and lows of market cycles.
  • Assessing and managing risk are the greatest challenges to building a high-performing portfolio.
  • Excessive risk aversion carries penalties: missed opportunities and depressed markets.
  • The reactive, changeable credit cycle affects financial activity in many areas.
  • The long development process differentiates the real estate cycle from others.
  • Investor behavior causes market fluctuations beyond what company fundamentals might indicate.
Mastering the Market Cycle Book Cover

Mastering the Market Cycle Book Summary

Calibrating your investment portfolio in response to changes in the market environment brings superior results.

Professional investors analyze industries, companies and securities to assess their intrinsic value and potential to grow or change in the short term. They compare the current market price with intrinsic value to establish worth. These investors often seek to build portfolios of assets with the highest cost-to-value relationship. Such portfolios perform equal to the average, but seldom above it. When every investor makes decisions from the same information, analyzed in the same way, no one can outperform the average. Calibrating an asset portfolio in response to changes in the investment environment brings superior results.

“Although it’s very easy to generate average investment performance, it’s quite hard to perform above average.”

Investors try to foresee tendencies and calculate the risk level inherent in different outcomes. Their predictions take the form of probability distributions informed by insights regarding the strength and likelihood of various tendencies. Learning to read market cycles provides investors with a knowledge advantage that allows them to be aggressive when the odds are in their favor and defensive when the odds are not.

Learn to identify market cycle themes and patterns.

Markets rise and fall or swing back and forth. Many factors – including human behavior – spur them into movement. The pattern of up and down remains consistent over time even though the length and causes of cycles vary. Fluctuations oscillate around a midpoint, known as the “secular trend, norm, mean or average.” Up or down movement in the cycle gains energy and momentum as one event gives rise to the next. The extremes of high – bubbles – and low – crashes – are deviations from the mean and forecast a correction or regression toward the mean.

“The events in the life of a cycle shouldn’t be viewed merely as each being followed by the next, but – much more importantly – as each causing the next.”

Circumstances rarely hover at normal on the way to the other high or low point. The market doesn’t move from overpriced, for example, to linger indefinitely at a fair price point.

Short-term economic activity fluctuates along the long-term trend without changing its trajectory.

An economy’s output is a measure of its overall productivity, determined, primarily, by the numbers of hours worked and population size. Birth rates, productivity speeds, and societal and environmental changes affect long-term economic growth; these take years or decades to play out. Economists concern themselves with gross domestic product (GDP): the market value of all the goods and services for sale that a nation produces within a given time frame.

“This underlying trend in growth clearly follows a long-term cycle, although the short-run ups and downs around it are more discernible and thus more readily discussed.”

The short-term economic cycle is the annual growth or constriction of an economy, and, generally, falls in the two to three percent range. Two negative quarters in a row signal the onset of a recession. Short-term cycles oscillate around a long-term upward or downward trend. Shorter movements in economic activity have little effect on the enduring trajectory.

The free-market system enables the distribution of economic resources and promotes productivity.

The term “free-market system” isn’t entirely accurate because government regulation and central bank activity temper the highs and lows of economic cycles. Central banks, such as the US Federal Reserve Bank, counteract inflation by restricting money supply, increasing interest rates and trading securities. They seek to boost employment with activities that support economic growth. These dual goals work against each other and require a counter-cyclical approach. Governments direct economic growth rates by increasing spending and cutting taxes during down times and doing the opposite when markets overheat.

“Since cycles produce ups and downs that can be excessive, the tools for dealing with them are counter-cyclical and applied with a cycle of their own – ideally inverse to the economic cycle itself.”

The economic cycle affects the sales and profits of some industries more than others. Corporate profit cycles echo the market cycle, but prove more variable than GDP because economics is not the only driver of sales. Price reductions, new product introductions and availability of financing, for example, all influence sales figures. An increase in revenues doesn’t always translate into larger profits due to differences in company operating costs and debt obligations.

People’s emotional swings and resulting behaviors cause the highs and lows of market cycles.

Human emotion drives the short-term ups and downs of the investment environment. People’s psychological reactions swing between the poles of “greed and fear,” “optimism and pessimism,” “risk tolerance and risk aversion,” “credulousness and skepticism,” and from “flawless to hopeless.” When times are good, and people feel positive, they become greedy and spend more on investments, inflating markets and increasing the value of assets. When their outlook is negative, they become fearful about losing money and sell, so asset values depreciate.

“Markets move upward when events are positive and psychology turns up, and they fall when events are negative, and psychology turns down.”

The tech stock market in 1999 serves as an apt example. When everyone bought, greed motivated investors to join the frenzy rather than stay on the sidelines while others became rich. When prices fell, fear replaced greed, and investors couldn’t dump their tech stocks fast enough. The lesson: remain objective and unemotional to protect yourself from making buying and selling decisions based on psychological excesses.

Assessing and managing risk are the greatest challenges to building a high-performing portfolio.

When investors become too risk averse or risk tolerant, their behavior causes swings and fluctuations that deviate from the capital market line – the risk/return continuum of rational markets. The shakiest investments often occur during the brightest and most robust economic times, due to unchecked optimism. 

“Risk is high when investors feel risk is low. And risk compensation is at a minimum, just when risk is at a maximum.”

A positive mind-set regarding the economic outlook triggers greed and the following pattern results:

  • Optimism reduces investors’ caution and hightens their risk tolerance.
  • Investors forego careful analysis and make unwarranted assumptions about an upside.
  • Investors relinquish demands for risk premiums and accept lower margins of safety.
  • More people purchase the risky assets, driving up prices and reducing returns.

The Financial Crisis of 2007-2008 exemplifies what happens when investors exercise an unjustified tolerance for risk. The steps leading up to the crisis included government promotion of home ownership, low interest rates, the creation of levered mortgage-backed securities and financial derivatives, and declining lending standards and practices. Media coverage was uniformly rosy and optimistic; the government relaxed necessary protections, such as the Glass-Steagall Act. High risk tolerance allowed unsound, unsafe financial behavior and led to the inevitable crash.

Excessive risk aversion carries penalties: missed opportunities and depressed markets.

Burned investors become overly cautious. Those hyper-focused on loss avoidance make negative assumptions, expose investments to unnecessary scrutiny and reject even the lowest margins of safety. In this market, savvy investors realize greater gains by taking on reasonable risk.

“The riskiest thing in the world is the belief that there’s no risk. By the same token, the safest (and most rewarding) time to buy usually comes when everyone is convinced there’s no hope.”

It pays to be a contrarian – to buy when others are cautious and to be conservative when others are aggressive.

The reactive, changeable credit cycle affects financial activity in many areas.

Even small fluctuations in the economy cause the credit window to open wider or slam shut. When the credit window opens, financing becomes readily available. When the window closes, financing becomes difficult to obtain. The availability of credit strongly affects companies’ ability to grow and refinance maturing debt. A tight credit market causes consumers and investors to curtail activity and retreat to their corners.

“The slammed-shut phase of the credit cycle probably does more to make bargains available than any other factor.”

Upward movement in the credit cycle occurs during economic prosperity. The positive economic environment creates a wide-open capital market; businesses and financial entities easily obtain financing at lower interest rates, and with fewer conditions. Economic activity increases, and asset prices rise; but, eventually, relaxed credit diligence leads to losses – the credit window begins to close. When the credit crunch occurs at the bottom of the cycle, shrewd investors find opportunities for low-risk, high-yield assets at rock-bottom prices.

The long development process differentiates the real estate cycle from others.

The real estate cycle follows the pattern of other market cycles with one glaring difference: The real estate development process can take years. During this time, market conditions may change drastically.

At the start of the real estate cycle, a suppressed economy keeps building activity low. As the economy improves, housing demand rises. Limited inventory inflates rents and housing prices, attracting developers who obtain easy financing. The first available building projects benefit from pent-up demand. Their rosy returns attract more builders to capitalize on the still unmet need. Inventory eventually outpaces demand, the economy slides downward from its peak, rents and housing prices fall, and last-in real estate developers lose out.

The factors unique to real estate that intensify its cycle are the long duration between a project’s beginning and completion, the high level of financial leverage and the inability of supply to adjust nimbly to demand. These realities create opportunities for astute investors to pick up incomplete projects at reduced prices when the cycle hits bottom.

Investor behavior causes market fluctuations beyond what company fundamentals might indicate.

Security prices vary more than current earnings and outlook for future earnings indicate. Investors tend to believe what they want to believe, follow the herd, bounce between risk tolerance and risk aversion, surrender to the fear of missing out and let emotion rule. Investing brings out people’s deepest insecurities and stokes their subconscious fears.

“The key to being able to behave in a way that’s appropriate given the market climate lies significantly in assessing the psychology and the behavior of others.”

To invest intelligently, ascertain what an asset is worth and buy it for slightly less. When emotions interrupt the relationship between price and value, you will lose money. Quantitative assessment of gauging valuations coupled with qualitative measures of evaluating investor behavior indicate the cycle position. When everyone is buying euphorically, hold back; when they panic, scoop up deals.

Consider these components to build a high-performing investment portfolio:

  • “Cycle positioning” – Take on or avoid risk in response to market cycles.
  • “Asset selection” – Choose investments based on safe and proven metrics.
  • “Aggressiveness and Defensiveness” – Determine if market conditions warrant either stance.
  • “Skill” – Make investment decisions on a range of reasonable probabilities.
  • “Luck” – Random events and circumstances may break to your benefit.

About the Author

Co-founder of Oaktree Capital Management Howard Marks also wrote the bestseller The Most Important Thing.

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The Latte Factor Book Cover

The Latte Factor by David Bach Book Summary

The Latte Factor, Why You Don’t Have to Be Rich to Live Rich by David Bach and John David Mann

Recommendation

In this short fable, financial expert David Bach and co-author John David Mann reveal three secrets to managing your money that anyone can embrace. The story’s protagonist, 27-year-old Zoey, wants to buy a photograph but thinks she can’t afford it until a coffee shop owner named Henry and his friends show her how to change her approach to her finances. Wealth is more of a mind-set, the authors argue, and you must, therefore, adopt the correct attitude if you want financial freedom. Pay yourself first, they say, budget automatically and know what you value most. Follow the authors’ advice to live a rich, fulfilling life now.

Take-Aways

  • You’re more well off than you think, because wealth is a mind-set.
  • Put money away for yourself first.
  • Make budgeting automatic so you never have to think about it.
  • Recognize the three myths about money.
  • Financial freedom means living richly now.
The Latte Factor Book Cover

The Latte Factor Book Summary

You’re more well off than you think, because wealth is a mind-set.

Zoey Daniels is a 27-year-old associate editor working at a travel magazine in New York City. She commutes from Brooklyn to Manhattan, but can’t afford to travel. She doesn’t own a passport and has never been west of the Mississippi.

Zoey’s boss, Barbara, notices Zoey is acting distracted. Zoey explains she had fallen in love with a photograph at Helena’s Coffee in Williamsburg. The photograph is four feet wide by three feet high and depicts a seaside village at dawn with a fishing boat crew heading out to sea. Zoey wants the photo but can’t afford it. Like many millennials, Zoey has student loan debt and a high rent. The word “budget” isn’t in her vocabulary; she is still paying down credit card charges from Christmas.

“Zoey thought she would qualify as a poster child for the phrase, living paycheck to paycheck.”

Zoey figures the photograph costs $500, $800 or $1,000 – all above her means. Barbara urges Zoey to talk to Henry, the older barista at Helena’s. Zoey feels a little guilty lying to Barbara. A more lucrative job offer from her friend Jessica’s company is distracting Zoey even more than the photo. Jessica works for an uptown media agency. If Zoey accepts the position, she will earn more money, but will also experience more stress and have a more demanding schedule. Zoey is wavering and has until Friday to decide.

The next day, Zoey wakes 15 minutes early to linger over the photograph at Helena’s Coffee. It has a title and a price – “Yes” for $1,200. An older man named Henry Haydn tells her the photographer shot the photo in Mykonos, Greece. Zoey says her boss, Barbara, wanted them to meet and talk. Henry says “Yes” is his favorite photograph, but Zoey tells him she can’t afford to buy it. Henry replies that it is possible that Zoey is in fact richer than she believes herself to be.

Put money away for yourself first.

On Wednesday, Zoey arrives at the coffee shop to finish her conversation with Henry. He asks her what she would need to change about her life in order to afford the photo. She says a higher-paying job. Henry wonders if she is making more now than when she first started working. Zoey replies in the affirmative. Barbara promoted her two years earlier from assistant editor to associate editor. Even though she is making more now, she can’t seem to get ahead financially.

Henry references a study that found half of Americans didn’t have an extra $400 to pay for an emergency and that seven out of 10 people lived from payday to payday. They weren’t putting money away in savings or in a retirement account. When asked why, they said it was because they didn’t have enough income. In fact, the more they earn, the more they spend. Henry cites celebrities and lottery winners who go broke despite having millions as examples of this phenomenon.

“Earnings are like the tide, you see, and your spending is like a boat. When the tide rises, the boat rises with it.”

Henry tells Zoey there are three secrets to financial freedom. The first one is to set a portion of your income aside for yourself first. Henry tells Zoey to think of work like a clock. If you work a typical office job starting at 9:00 a.m., the pay from your work from 9:00 to 11:30 a.m goes toward your taxes. From 11:30 a.m. to 2:00 p.m., that pay covers rent or mortgage and utilities. From 2:00 to 3:00 p.m., your check pays for transportation, and what you earn from 3:00 to 5:00 p.m. goes toward everything else: health care, entertainment, credit cards and so forth.

Parents teach children to save coins in piggy banks to buy things they want. For adults, the piggy bank equivalent is a 401(k) or other retirement account. That money comes right out of your paycheck, so you don’t have to think about it. Henry shows Zoey how much she could earn by saving just $5 a day. Assuming she put it in an account earning 10% interest, $5 a day would equal $1,885 in a year, $30,727 in 10 years and $948,611 in 40 years. If Zoey doubles her savings to $10 a day in an account with 10% interest, she’d earn $3,770 in one year, $61,453 in 10 years and $1,897,224 in 40 years.

“What ‘pay yourself first’ means, is that the first person who gets paid is you – and you keep that money. In other words: You pay yourself the first hour of each day’s income.”

If Zoey’s salary is about $1,000 a week, she earns about $200 a day. Paying herself for the first hour of a day would amount to $25 per day or $6,500 per year – more with interest. She’d earn $6,798 in a year, $110,821 in 10 years and $3,421,327 in 40 years. Zoey is stunned by the idea that she could earn more than three million dollars by setting aside an hour’s daily pay. Henry calls her $10 a day the “latte factor.” He tells her it is also how she could afford the photograph. 

Make budgeting automatic so you don’t have to think about it.

Zoey meets Henry’s friends, Baron and Georgia, at Helena’s Coffee. Baron works in the energy business. He asks her if Henry has shared the three secrets with her. As they chat about finances, Zoey is delighted to find out Baron shares her disdain for budgeting. He compares budgets to on-again, off-again diets. Henry does not disagree. He tells Zoey the second rule of financial freedom is to make saving automatic. Having a 401(k) account is an easy way to save for retirement because you don’t have to budget in order to save: Every two weeks, money comes straight out of your paycheck into a 401(k) or other retirement account, such as an IRA or self-employment plan (SEP IRA).

“But when you get past all the drama and look at the big picture, it all averages out. Markets go up, then down, and then up again – always.”

Zoey asks Henry whether it is actually possible to get a 10% return on your investment. Henry points out that even boring, conservative stocks usually earn at least 8% per year, historically. Regardless of the number, compound interest works the same. Getting rich by hitting the lottery or inheriting money happens more in the movies. Most wealthy people build their fortunes one dollar at a time.

Baron explains that he was in the oil business during boom times back in Texas. His first million was easy to win and proved as easy to lose. Georgia said Baron needed a quadruple bypass after he had a heart attack. While he was recovering, Georgia discovered their finances were in complete disarray. Their houses carried multiple mortgages and, like Zoey, the couple only made minimum monthly payments on maxed-out credit cards. They were in so much debt it was hard to see a way forward. 

The couple met Henry when they stopped for coffee while perusing art galleries in Brooklyn. Ultimately, Baron and Georgia got their finances in order, but their situation provides a cautionary tale to Zoey. Georgia tells Zoey that most marriages fail because of money – not because of the money itself – but because of a lack of communication about money.

Recognize the three myths about money.

Zoey realizes she had incorrectly assumed Henry was merely a barista. Though she had avoided talking to Barbara for several days because she was contemplating the other job offer, Zoey asks Barbara why she didn’t tell her Henry owned the coffee shop. Barbara said it wasn’t her business to tell Zoey he was the owner; Barbara merely thought Zoey could benefit from Henry’s advice. Barbara tells Zoey that she needs to understand three myths about money:

  1. You’re rich when you make more money.
  2. You need money to make money.
  3. You can depend on someone else to take care of you.

“Most people think they have an income problem. They don’t. They have a spending problem.”

Barbara says a good income is necessary, but people waste time chasing jobs with a higher salary because money isn’t everything. The idea that you need a bunch of money in order to make it is a myth, Barbara says, as evidenced by the charts Henry drew showing how much a person could make by investing only $5 or $10 a day. She says she always feels like screaming every time she hears a woman say she doesn’t have enough money to invest. 

The last myth is the one nobody says out loud, but women, especially, believe it: They think someone – a husband, boyfriend, financial adviser or father – will take care of them financially. Men, likewise, shouldn’t rely on others – such as their lawyers, brokers or the president – to take care of them.

Barbara reminds Zoey that, on average, women earn 20% less than men, and that lifestyle changes – corporate downsizing or taking time off to care for children or elderly parents – affect women more severely. Women have 34% less than men in their retirement accounts because of these factors. Financial problems can compound for women because they live longer than men by an average of seven years, and half of all marriages end in divorce.

“Far too many women suddenly wake up one day to find themselves alone, broke, all their options behind them, and thinking, ‘How the hell did I end up here?”

Zoey meets Henry a few days later. They go through her daily expenses, which add up quickly. Her total spending on food and drink amount to $29.75 – including $4.50 for her morning latte, $2.75 for her breakfast muffin and $14.00 for lunch, among other charges. Zoey could invest some or all of that money – her latte factor – into a retirement account. How much, Henry asks, could she save by bringing food and beverages from home?

Zoey decides to give Henry’s suggestion a try. She isn’t fond of cooking, but thinks she could clean out her closet to sell clothes, and eliminate cable channels she and her roommate didn’t watch. Her $29.75 per day would add up to $4,110,652 if she deposited it in a pre-tax retirement account earning 10% interest for 40 years!

Financial freedom means living richly now.

Zoey returns to Helena’s to find out Henry’s third and final secret. Henry realizes Zoey isn’t particularly excited about saving for retirement because it is decades away for her. He asks what was important to her right now. Zoey tells him her dream of taking beautiful photographs. The photography class she wants to take costs less than $600, but, Henry points out, if she set aside $100 a month, she’d have enough money to take the class in six months.

When Zoey shares she also dreams of traveling, Henry tells her he took his first “radical sabbatical” 36 years ago when a friend asked him what brings him joy. At the time, Henry was a young architect working at a successful firm and had not thought much about the future. He turned in his notice and spent the next six weeks traveling the world taking photos. When he returned home, he took out a small business loan to lease a vacant storefront, which became Helena’s Coffee. His favorite photograph – and Zoey’s – is titled “Yes” because his wife, Helena, said yes to his marriage proposal in Mykonos.

After the “how” of paying yourself first and budgeting automatically, the “why” part of the equation is to live a rich life now. Zoey is intrigued, but still skeptical of Henry’s claims. She prepares to have an uncomfortable conversation with Barbara about leaving her job. At lunch, Zoey complains she’ll never be wealthy. She says she’ll always have student loan debt, credit card payments and high rent because she handles money poorly. Barbara challenges her. If they were to take a poll of the 100 or so people who had sat at their restaurant table recently, she asserts, maybe five paid themselves first. When Barbara asks Zoey to describe the lifestyle of a millionaire, Zoey replies that a millionaire is someone who spends money on luxury items.

“By and large, the wealthy spend their money on things that truly matter to them – no more, no less. It’s the unwealthy who spend money on frivolous things.”

On the contrary, Barbara insists, it’s non-wealthy people who behave that way. Your next-door neighbor, your plumber, a coffee shop owner or your boss are more likely millionaires, Barbara says. Barbara herself learned Henry’s lessons from her own parents, and has followed the three rules since earning her first paycheck. Zoey is shocked to realize Barbara is likely a millionaire. She asks why Barbara continues working if she is rich. Barbara replies that she loves her job and the people she works with, including Zoey.

Zoey re-examines her life. Her mother, who is battling pancreatic cancer, makes Zoey promise to live her life to the fullest. Zoey declines Jessica’s job offer and continues to work for Barbara. She sets up her 401(k) and opens two new savings accounts at her bank, one for her photography class and one for travel. After her mother passes, she and her father buy a small duplex in Brooklyn. She is able to take her photography class six months after she started saving, as Henry had predicted. Her credit card debts take a little longer to pay off, and she is still working on her student loans, but she is making progress. Three years later, Zoey brings her camera to Mykonos.

About the Authors

David Bach

David Bach is a financial expert and New York Times-best-selling author of The Automatic Millionaire and Start Late, Finish Rich. John David Mann is the co-author of The Go-Giver, which has been published in 26 languages and has sold nearly one million copies.

John David Mann

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Think and Grow Rich Book Cover

Think and Grow Rich By Napoleon Hill Book Summary

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Recommendation

Napoleon Hill, author of this 1930s classic, will remind you of an older, wiser, slightly wacky uncle who advises you about careers, life and love. This book is a wonderful collection of tips – many based on the ideas of Hill’s mentor Andrew Carnegie – that range from the practical (how to prepare a résumé) to surprisingly New Age-like mystical talk about the infinite powers of the universe. Of course, like an old uncle, Hill can get long-winded and repetitive at times, but since he packs so much wisdom into his slender book, you will want to re-read it over and over, repetitions and all. His classic compendium will interest anyone who is dangling from the career ladder and wondering how to prosper.

Take-Aways

  • Your thoughts are a secret wealth generator.
  • Desire, hopes and strategies increase wealth.
  • Develop faith in your ability to succeed by telling yourself that you will triumph.
  • You don’t need higher education to earn higher degrees of knowledge and wealth.
  • Create vivid mental portraits of your success. Imagination is the “workshop of the mind.”
  • To maximize your abilities, work with a great team. Make it your “master mind.”
  • Don’t let short-term failure seduce you. Success often lurks in the shadows.
  • Remain committed to your goals and your mission statement
  • Nothing beats a mix of passion and discipline.
  • You can mold and tap into your mind’s deepest chambers.
Think and Grow Rich Book Cover

Think and Grow Rich Book Summary

Your thoughts are a secret wealth generator.

When author Napoleon Hill “was but a boy,” his mentor, Andrew Carnegie, the legendary corporate leader, shared his secret wealth-generating formula with him and challenged him to create a book that would explain this secret approach.

During Hill’s 20-year journey to fulfill that challenge, he studied the habits and philosophies of hundreds of corporate stars. This honor roll includes Theodore Roosevelt, John D. Rockefeller, F. W. Woolworth and many other household names who built large fortunes based on Carnegie’s wisdom. It begins with this simple idea: Your thoughts are real objects! With passion and purpose, your thoughts can evolve into wealth.

“One comes, finally, to believe whatever one repeats to one’s self, whether the statement be true or false…Every man is what he is because of the dominating thoughts which he permits to occupy his mind.”

Edwin C. Barnes demonstrates this principle. Barnes – an impoverished “nobody” – passionately wanted to launch a partnership with Thomas Edison, the great inventor. Barnes did not know Edison and could barely afford transportation to Edison’s office. At their initial encounter, Edison said Barnes looked like an “ordinary tramp.” But behind that rundown appearance, Edison detected a spark of promise and determination that prompted him to offer Barnes a low-paying job. Barnes seized this unexpected opportunity. Naysayers had rejected the “Edison Dictating Machine,” but Barnes had faith in it. He used it as a vehicle to launch his successful partnership with Edison. Barnes created material success from abstract thoughts, based on faith, determination and persistence.

Desire, hopes and strategies increase wealth.

If your goal is to become rich, don’t just wish for your dreams to come true. Desire is “the starting point of all achievement,” but to bring it to fruition, commit yourself to executing a plan to attain your objective. To create wealth from desire, follow this six-step plan:

  1. Take a mental snapshot of the amount of money you seek. Name a number.
  2. Name your price. What are you willing to do for the money?
  3. Create a deadline. Fix a date by which you will achieve your goals.
  4. Start a task sheet with a definite strategy. Start now.
  5. Write a brief mission statement.
  6. Make a declaration: Twice a day, read your mission statement aloud.

Dreams are not just thin air. Edison had far-fetched dreams of inventing an electrical lamp. He created thousands of failed prototypes before succeeding. While others stayed on the ground, the Wright brothers envisioned a flying machine.

“I believe in the power of desire backed by faith, because I have seen this power lift men from lowly beginnings to places of power and wealth.”

Other dreamers have overcome major obstacles. Beethoven composed music despite his deafness; Milton, the writer, was blind. Author Helen Keller was blind and deaf. But lit by the fire of desire, they worked on their goals and achieved epic greatness.

Develop faith in your ability to succeed by telling yourself that you will triumph.

Faith is the “visualization of and belief in the attainment of desire.” With the right tools, you can fill the fertile field of your mind with success or failure. Recite your mission statement daily to prepare your mind for success. This process, called “autosuggestion,” sows the seeds of mental success. It works because your mind will believe almost anything (true or not) that you tell yourself repeatedly. Dangerous thoughts also can take root in the mind-field. Doubt, fear and negative emotions can blight your success and uproot the fruits of your labor.

“Faith is the starting point of all accumulation of riches.”

Autosuggestion is a dose of self-talk delivered to your subconscious mind via your five senses, the roadways from your conscious mind to your unconsciousness. Be warned that this conduit does not work if you operate on automatic pilot. Feel the message. Jumping from printed words to passionate feelings is not easy. Make the leap by focusing on a fixed item. Close your eyes. Create a mental snapshot of the money you want to earn. View it daily.

To visualize your goals, use the six steps above in tandem with this three-stage program:

  1. Retreat to a quiet location with freedom from distractions – Find a peaceful environment for daily renewal, review and recitation of your goals. Create mindful pictures of monetary success, possessions and achievement. Visualize your date with success. Be specific: On July 4, 2011, I will celebrate my financial independence.
  2. Take a daily double dose of faith – Apply this program every morning and evening. Don’t stop until you achieve your financial goal.
  3. Look at your mission statement twice daily – Seeing is believing. Read your mission statement first thing in the morning and last thing at night.

You don’t need higher education to earn higher degrees of knowledge and wealth.

Knowledge is just numbers, facts and insights. But through organization and planning, facts can assume great power. Harness that power to create wealth. So-called “formal knowledge” is not the last word in education. Many wealthy people spent little time in traditional classrooms, but had rich experiences. Edison went to school for only three months. Yet, through specialization, organization and networking, he gained the power of a well-educated mind.

“It takes more than a college degree to make one a person of education.”

Specialization is organized knowledge applied to a specific purpose. Gain this practical know-how from apprenticeships, night schools and other targeted training programs.

Create vivid mental portraits of your success. Imagination is the “workshop of the mind.”

Imagination operates on two playing fields. “Synthetic imagination” arranges existing ideas, concepts and strategies into novel formats. “Creative imagination” bridges the definitive mind of man and the borderless universe of “infinite intelligence,” the land of gut feelings and hunches. The top performers in business, music, art and literature operate in the domain of creative imagination, fueled by desire and faith. Your imagination is a muscle. Work it, develop it and create a written plan to convert airy dreams into concrete wealth. Constantly review your plan. Repetition works.

“Dreams are not born of indifference, laziness or lack of ambition.”

For a perfect demonstration of the fiscal power of the imagination, heed the legend of the “Enchanted Kettle.” Many decades ago, a country doctor drove his horse-drawn carriage to a small town. While in town, he debated the merits of his plain kettle with a young sales clerk. After a 60-minute discussion, the visionary young man gave the doctor his entire nest egg, $500, to buy the kettle and a secret formula the doctor wrote on a piece of paper. With that formula, a plan and imagination, sales clerk Asa Candler created Coca-Cola.

To maximize your abilities, work with a great team. Make it your “master mind.”

To develop your success, you need the right team. Do not skip this stage. Take these steps:

  • Surround yourself with “master mind” allies. Cultivate a support team. Employ your talents and resources to help them and invite them to assist you.
  • Fine-tune your plan with regular support group meetings.
  • Establish harmony with each member of the group.

The mind has many layers. When a group works together, the energy of their combined individual thoughts, ideas and plans becomes a powerful driving force. Consider the humble battery. A single electric battery has power, but the electricity of several batteries easily overshadows its force. Multiply your brainpower by tapping into the infinite wisdom of the group mind, a master mind far greater than the mental powers of each individual.

Don’t let short-term failure seduce you. Success often lurks in the shadows.

Don’t accept failure. If your initial plan fails, adopt a new strategy and persist. Identify attractive opportunities. Study the field, the company and the individuals involved. Inventory your talents and skills. Write a detailed strategy for achieving the right job. Target the appropriate channels and people. Make your résumé concise, thoughtful, relevant and neat. Know your marketplace value.

“Success requires no explanation. Failure permits no alibis.”

Nurture success by avoiding the symptoms of failed leadership, which include: failure to structure details; inability to perform humble tasks; insecurity; absence of imagination; lack of discipline and trust; over-reliance on force and authority; selfishness; and insistence on titles and honor.

Remain committed to your goals and your mission.

Procrastination, a top cause of failure, is your enemy. Successful leaders make quick, meaningful decisions. Being decisive gives you “mastery over procrastination.” Consider the advice and insights of your support group. Avoid anyone who undercuts your drive. Dodge the trap of public opinion by revealing your plans only to your small circle of advisers. When you indiscriminately broadcast your strategies, ideas and goals, you lessen your chances of success. Keep quiet; keep the faith.

Sadly, many people surrender their dreams at the first hint of difficulty or failure. Don’t be a magnet for poverty. Avoid a “poor consciousness” in which negative feelings become self-fulfilling. End the cycle of poverty by creating and believing in a “wealth consciousness.” Everyone falls into doubt, disbelief and depression, but you can liberate yourself via perseverance, “the sustained effort necessary to induce faith.” Keep moving even if you must go slower. No one climbs great mountains without sliding off a few trails.

Nothing beats a mix of passion and discipline.

Sexual desire, when properly applied, is a powerful stimulant for success, wealth and creativity. You need passion to succeed in art, science or commerce. This passion enhances your sensitivity to the “infinite wisdom of the universe,” and the tiny whispers of insight from your gut. History is filled with people who were pushed to greatness by lust or love. Napoleon Bonaparte’s great campaigns were largely due to the inspiration of Josephine, his first wife. Sexual energy fueled William Shakespeare and Thomas Jefferson. But most men do not succeed before age 40 because it takes at least four decades to understand and harness the creative force of sexual energy. Through discipline, planning and willpower, sexual energy transcends the body, and generates success and creativity.

You can mold and tap into your mind’s deepest chambers.

Your subconscious is a “connecting link” that operates outside of your controlled thoughts. Use autosuggestion and planning to employ your subconscious mind. Repeat affirmations. Stay in the moment. Shun negative thoughts. Cultivate faith, desire, sex, love, energy, hope and romance. Avoid jealousy, fear, greed, revenge, anger and hatred. Remember the power of prayer.

Your brain is a unique “broadcasting and receiving station for thought,” like a radio station that transmits and receives signals. Learn to listen to the “intangible forces” in your life. These forces – gravity, electricity, thunder and other elements – surround you. Use faith to stimulate your mind and reach your goals. Believe in the power of thought and belief.

“Life is a checkerboard and the player opposite you is time. If you hesitate before moving, or neglect to move promptly, your men will be wiped off the board by time. You are playing against a partner who will not tolerate indecision.”

The sixth sense, “the door to the temple of wisdom,” is the direct connection between your subconscious mind and the infinite light of the universe. This link represents the home of your creative imagination, intuition and premonitions. Use this force to bring you wealth, success and creativity. Constantly repeat and review your goals; let the universe deliver insight to your subconscious mind.

Don’t be hampered by the “six basic fears”: fear of being poor, fear of reproach, fear of becoming sick, fear of being unloved, fear of getting old and fear of dying. Avoid fretting, dwelling on destructive thoughts and don’t let negativity sway you. The power of your thoughts gives you mastery and can give you money, as well.

About the Author

Napoleon Hill

Napoleon Hill was born in 1883. A former newspaper reporter, he studied law and worked for Andrew Carnegie, whose ideas are reflected in Think and Grow Rich. Hill advised numerous prominent people, including Franklin D. Roosevelt, Mahatma Gandhi and Thomas Edison.

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