One of the best things about blogging is the comments readers leave. Far more than other publishing mediums, blogs allow the writers to get closer to having a dialogue with their readers.

On a number of occasions I’ve talked to people about comments, why readers comment and how to get them to do so more. I’m unwilling to follow a number of the approaches myself, but here they are for other bloggers to consider.

Get More Readers

There’s a certain proportion of readers who will comment on blog posts (I’ve heard the estimate of 1% from multiple sources), so the easiest way to get more comments is to get more readers. I’ve written before on some general ideas about this, but most bloggers are probably already doing everything they can to get as many readers as possible.

Write “Accessible” Posts

A friend’s father was talking about how the hardest decisions for an organization are often made the quickest. If a board of directors is considering building a new power plant, there’s probably one person who really understands what this entails and they’ll do what she thinks is best. If they’re deciding whether or not to buy new mops for the custodial staff, everyone has an opinion and the discussion may take a long time.

Similarly, complex posts will get fewer comments. I think Thicken My Wallet writes some of the most detailed and insightful posts in the personal finance blogosphere (I think 98% of his stuff is gold). A ton of his posts get 1 or 2 comments, and some don’t get any.

If a blogger writes nothing but rehashes on the themes of “avoid debt”, “investment X is AMAZING!”, “investment Y SUCKS!”, “latte factors”, or “spend less than you earn”, it will often be a blog that will get tons of commenters (as everyone can put together a comment on many of these topics).

I think Garth Turner at greaterfool.ca is pretty funny, but basically every one of his posts boils down to “real estate is over priced and the market is going to crash”. Each of his posts gets hundreds of comments.

This is something that I think has limited the comments I get, but I’m just not willing to write posts that keep going over the same territory repeatedly (it seems boring to me).

Write Inflammatory Posts

Casey Serin is the master of this, but bloggers learn when a post hits certain buttons among their readership. Writing a post on the subject is a good way to get passionate members of both sides posting comments. Our posts on real estate agents do this, although Mike and I have only written these posts when we have something to say, not to get people fired up.

A high traffic blog could easily be created around the idea of a daily post criticizing real estate agents. You’d get the agent rebuttals, people agreeing, people leaving anecdotes of bad experiences, and so forth. Each day, just write 400 words and get everyone going again. Other ideas would be daily posts on: why the government needs to give poor people money, why poor people are the cause of all of society’s ills, how you just need to *believe* in success to achieve it, how taxation is evil, how real estate is the easy path to riches, how Forex trading is the easy path to riches, how gold is the easy path to riches, or how some particular stock trading systems is the easy path to riches. Don’t do anything substantive on any of these topics, just keep saying the same vacuous things in different ways each day.

Respond to Comments

When I first dabbled with blogging I thought that it might make sense to not respond to comments at all. My thinking way that I have my say in the posts, so perhaps I should let readers talk it out between themselves in the comments. If your goal is to get more comments, DEFINITELY respond to as many comments as you can. People will be far more likely to leave comments in the future if they get a response. It also leads into discussions in the comments section, which will tend to draw more people in and get more commenting happening.

Encourage Commenters

I think we’ve had some AMAZING people commenting on this blog over the years, but there have been a couple of crazies that stuck around for quite a while. They’re often good at writing inflammatory comments and getting people going, and they leave LOTS of comments, so encouraging them may be a good idea if lots of comments is your goal. I always wanted to maintain a high value of commenting as well as raw number, so I’d ignore them and eventually the nuts would move on (probably related to my last point: if you ignore the good commenters they’ll move on too).

Mention Comments / Commenters in Posts

On occasion I’ve based a post around a good comment or highlight a commenter in a post. This is like the last two ideas on steroids (and is worth doing).

Link to, and Comment on, Other Blogs

It may only lead to a single comment, but most readers have probably seen the comments bloggers leave one another thanking them for links. Linking to other blogs and other blogs’ posts is worthwhile. When I get a good comment from a blogger I haven’t seen before, I’m VERY likely to go and check out their blog (and usually leave at least a couple of comments on interesting posts). Theoretically, bloggers should leave good comments since they got enough interesting ideas to write posts on their own blogs (and can toss a couple interesting ideas into the comment section of other blogs).

Keep Posts Short

My posts are too long, I realize many people just won’t get all the way through a 1,000 word post. Some commenters will leave comments without reading the entire post, but they’re jackasses for the most part. Keeping posts short and digestible will increase the number of people who finish reading it, and therefore may consider leaving a comment.

Ask Your Readers Questions

I suspect some people are willing to comment but just can’t think of anything to write. One technique is to try to encourage discussion with a few questions at the end of a post that you hope people will comment on.

What have you found to be the posts most likely to get you to leave a comment? For bloggers out there, what have you found to be the best ways to get readers to comment?

In this post I’m trying to get my arms around some VERY BIG concepts. Feel free to comment and disagree, but please realize that with 1,000 words to work with I can’t cover every perspective to the depth I might otherwise wish to. I’ll also acknowledge my bias towards formal education:  I have 9 years of post secondary and am in the middle of a PhD program.

Most people believe that education, or at least knowledge, is a good thing. Even those who seem to embrace ignorance believe they have a commitment to knowledge, just of a different nature.

Gradations of Knowledge

In my opinion there is massive differences in the value of various pieces of knowledge. How to make penicillin is far more valuable than knowing who won the 1957 World Series. Bad knowledge is also possible:

• Magic crystals are a better treatment for breast cancer than modern medicine
• Killing people by suicide will get me 72 perpetual virgins in the afterlife
• There are such things as high yielding and safe investments.

are all examples of dangerous nonsense. Believing this sort of thing can get you killed or ruin your life. An education that results in the belief of dangerous nonsense is harmful. Even those who peddle dangerous nonsense will argue that there are gradations of knowledge (and that the information they’re selling is of higher quality than what you’d get elsewhere).

How to select an education that will result in the greatest increase in the VALUE of knowledge is therefore key, rather than just blindly pursuing “education”. The paradox of this is that when you’re seeking the education, you inherently don’t possess the knowledge to evaluate it, which is how people get sucked into dangerous nonsense.

Experience

Luckily, we’re all constantly self-educating (learning) simply by surviving another day on the planet. I have an uncle who can look at a couple interacting and read if they’re romantically interested in one another or not. This really impressed me when I was in my early 20′s. Now I realize that if you date enough and live long enough people can read this sort of interpersonal interaction easier than reading a book. I’m amazed at how clueless high school students are about this (a girl will almost be drooling over a guy and he won’t realize it).

While I was writing this post, Firefox crashed on me and I lost 700 words. I’ve learned to save more often in the future when I’m working on posts.

Experience is a dear teacher, but fools will learn at no other.
Benjamin Franklin

The problem with learning by experience is that it takes a long time. The value of an education is to learn the lessons of other people’s experiences faster than it would be take to go through those experiences yourself. I can learn the results and importance of Mendel’s pea pod work without actually breeding 29,000 pea plants.

Limits to Formal Education

The economic value of formal education has been shown. This doesn’t mean all education is a good investment. Scam trade schools are a particularly odious way to waste people’s time and money. While established university and colleges are businesses more than they acknowledge (how many businesses solicit donations from previous customers?), they also have to provide value to continue getting students in the future.

In my opinion, there are two valid reasons for paying for an education: to increase earning power or because you’re passionately interested in the subject. A minimum amount of passion is needed to get through an education (and to work in that field). People who can find an education that accomplishes both for them are particularly fortunate.

I think it’s valid to go into debt for an education that increases your earning power, but that studying something you’re passionate about should be done with money you’ve already earned. I’d happily use money I’d saved to pay for a child’s liberal arts education if they understood the limited impact it would have on their earning (and the massive impact it would probably have on their life). I’d be reluctant to go into debt for this and would discourage any young people from doing so.

Just because something increases your earning power doesn’t mean paying any price is worthwhile. If it’s possible to get a comparable education at a local school while living at home instead of a far more expensive education living away from home, the local school would obviously have the higher return on investment. Contrasting the cost and expected return needs to be done carefully by the potential student.

Like any investment, it’s important to investigate what you’re buying (the school and program). One heuristic would be an inverse correlation between the quality of education and the amount of advertising (when have you seen an ad for Harvard Law or MIT Engineering?). Another would be an inverse correlation between the cost and the value.

Autodidacticism

I love autodidacts and, like many bloggers, am myself one in terms of personal finance (I’ve never taken a business course and have only taken one economics course). Certainly autodidacts can learn much faster than from experience as they read books on the subject and teach themselves. It’s a great hobby and very occasionally makes a massive contribution to a field of knowledge (sometimes a change that only an outsider would be capable of making). There are a number of problems with this form of self-education.

It’s possible to spend massive amounts of time on incorrect or irrelevant information. Cranks can construct an elaborate, impenetrable field with their own vocabulary and with sufficient persistence ignore advice that what they’re doing is a nonsensical waste of time. During the dot-com boom a number of startup were created around ideas that anyone with a computer science background could have shown to be NP-complete (and therefore there is no known way to efficiently determine a solution).

On the flip side, it’s also often the case that autodidacts move from one thing that’s interesting to the next, and avoid learning a complicated, but fundamental, part of the field that’s important to progress to higher level understanding. This is a more enjoyable form of learning, but naturally tends towards a broad, shallow understanding of the field (think Cliff Clavin). It would be a VERY rare person who would be capable to teaching themselves advanced mathematics without someone providing a curriculum to ensure they had mastered all prerequisites.

I continually get annoyed when I read a writer making the blanket statement that education is good. I would agree with the statement generally, but I think it is more nuanced than it is typically presented.

We recently got an e-mail (summarized below) from a reader asking for advice about a situation with her parents.

“My parents have worked hard their entire life but never saved a dime.  As they approached retirement, they worked as the resident managers for an apartment building.  They have very minimal savings, and the small amount they have (X-mas bonuses or RRSPs) they cash in for consumer purchases such as a La-Z-Boy chair, new Jeep or a string of campers.  They’ve recently bought into an expensive timeshare style campground membership.

My brother and I had a meeting with them, talked about our concerns and offered to help set them up with a small building they could manage for us.  They said they’d be happy to live there, but didn’t want to be involved in operating a business (because of bad experiences in the past) and wouldn’t take any action to help set up something to take care of their own retirement.

They joke about living in my driveway in a camper as their retirement plan.  Both seem concerned about retirement at times, but won’t change their behaviour or do anything to plan for it.  They didn’t help us with out schooling and have lived the good life, so it doesn’t seem fair that my brother and I will have to support them in their golden years (they’ve had far more, nicer trips than I have over recent years).  We both have kids we’re planning to send to school and our own financial obligations.

What is the best response in this situation?  My brother has given up on them and I want to confront them!

Since the e-mail wasn’t addressed to Mike or I specifically, our lucky reader gets a two-for-the-price-of-one response!

Mike’s Response

“Your parents are stupid, selfish and screwed. You are screwed as well unless you can disown them (which is unlikely)”.

Mr. Cheap’s Response

There are a number of perspectives on this.  I think the first two can safely be dismissed, and the later two are worth your consideration.

1.  Legal

Except for a small number of very isolated cases, there usually isn’t any legal obligation to financially support your parents.  I am not a lawyer, but my understanding of whether you support them or not in their old age isn’t a legal obligation.  You don’t mention this, but one of my friends once worried about inheriting her father’s bad debts.  This sort of Dickensian thing doesn’t happen anymore (as long as you don’t co-sign on the loans, lenders won’t be able to make you responsible for your parents financial mistakes).

2.  Cultural

I briefly dated a woman of Kenyan descent and she talked about how her parents would hit up her and her siblings for things like building a new deck on their house (hardly a necessity of life).  Even though she was working a low-paying job, the expectation was that the children would kick in to help the parents live a more comfortable life.

While your parents clearly aren’t good with money, did your dad teach you to ride a bike?  Did your mother read to you when she tucked you in at night?  Did your dad take you out to a bar for your 19th birthday and tell you why men were no good and you should steer clear of them?  Did your mom watch “The Bachelor” with you and make catty comments about the contestants?  Parenthood is about more than just paying university bills.

The obligations in Western cultures are almost entirely FROM the parent TO the child.  Some might argue that by virtue of giving birth to you and your siblings there is a debt that isn’t absolved by your parents making bad choices.

3.  Ethical

Friends and family make bad decisions for themselves.  It’s torturous when you see the problem coming from a mile away, you warn them and they tell you to mind your own business, then you’re expected to pick up the pieces when your prediction comes true.  Since you’re a mother, I’d bet you’ll have many opportunities to go through this again with your children as they get older!

Your parents are adults and should have planned for their own retirement.  It isn’t fair that they’ve dumped this responsibility on you, their children.  Instead of having a comfortable apartment, treating the family to the odd meal out and taking the grandkids on a memorable trip to Disneyland they’ve set up a situation that is going to be unpleasant for everyone involved.

Setting aside whether it is “right” to help your parents out or leave them to sink or swim on their own, imagine your OWN future.  Say it’s 20 years from now and you’re thinking back on your parents (who have since passed away).  Would you prefer to have the memory of them being a financial burden on you in their golden years or of them living an impoverished life isolated from their family? Rather than determining what’s “right” it might be worthwhile to consider the situation from the perspective of what will lead to the least personal regret in the future.

One other thought is that having your parents live with you might not be the burden you expect.  Contrary to public perception, people don’t become instantly and completely useless the instant they turn 65.  If they’ve been resident managers, your parents have a set of skills that might make them very welcome guests in your house (cleaning, light repairs, contacts with tradespeople, etc).  Even having two trustworthy, loving people to help take care of the kids might be a welcome addition to the household.

I suspect that, of these two evils, having your parents be a financial burden for a few years would be the lesser evil (which, hopefully, your siblings would share with you).  I’ve never regretted kindnesses I’ve performed in the past, even those that have cost me significant (at the time) amounts of money.

4.  Pragmatic

The entire situation may be a moot point, as Canada has a pretty nice social support system.  For an elderly person with no money, they won’t be living a lavish lifestyle but the necessities of life will probably be covered by old age security and whatnot.  While they are in good health, this should cover rent and groceries.  Once they are in worse health it should cover a retirement / nursing home.  If having your parents live with you is too great a burden for you and your siblings, government programs will cover their lifestyle (and you shouldn’t feel guilty about letting your parents use these).

For your (and your parents’) peace of mind it may be worth researching this and letting them (and your siblings) know what a realistic future looks like for them:  it won’t be sipping drinks on a golf course in a tropical destination, but it won’t be living in your driveway and eating cat food either.

If, in this situation, you had a little extra money to treat your parents to cable TV in their room or to take them out to a restaurant occassionally it would be generous to do so, but not an obligation.

What are your feelings about the situation?  Any advice for the writer?

Some time ago Preet, Mike (& Mrs Pillars) and I got together for some yummy Thai food and adult beverages.  At one point I was expressing skeptism about something, and Preet wryly responded “Skeptical?  You?  No, never!”  While I’ll leave my own personal skepticism as an issue between myself and the team of psychologists in Vienna focused on my therapy, I’ve since been developing a model of the spectrum of credulity and skepticism.

As much as I’m probably closer to one end of the scale than the other, I don’t want to claim any correlation between intelligence or the “proper” perspective.  It’s just different ways to view the world, the right blend of which is different for every person and situation.  I’m not suggesting that this model is of any inherent utility, it’s more something I’ve been thinking about and find interesting (and hoped some readers will as well).  A number of people I’ve discussed this with agree that there’s a spectrum between credulity and skepticism, but had never thought of it in terms of discrete levels.

Getting the right level of credulity / skepticism is VITAL for personal finance.  We’re constantly bombarded by more information then we can process, all of which may (or may not) impact investments.  Paying attention to the right information (and ignoring the wrong information) can be the determining factor in many investments.

There was an interesting psychological experiment (some details, and a video, were posted to boingboing) that contrasted human willingness to blindly emulate one another to chimps.  The original paper this is based on is available here for anyone who has access through a university (or is willing to pay).

Credulity Level 1

At credulity level 1 the general assumption is that all people always tell the truth and aren’t motivated by bias.  If someone asserts something, they’re taken at face value.  The Invention of Lying explores the idea of an entire world (except for one man) which operates on this principle.

One of the big advantages of this level is you don’t have to evaluate information:  you just believe it all.  This is probably reasonable when you’re in a totally foreign environment and are trying to figure out how to function.  I personally went through this when I’ve lived abroad in the past, if someone told me I should do something (or not do something), I’d just believe them and change my behaviour.  Sure, maybe they were tricking me but it was easier to just follow what natives suggested (since, hey, it’s their country, right?).

The big disadvantage of this is that you’re very easily deceived and exploited.  Sadly, there’s a whole class of scams that exploit recent immigrants (since they are more likely to be at this levels as detailed above).

Credulity Level 2

This includes the belief that something is true because it’s in a book or newspaper (implicit faith in the editorial control of the publisher) or because a trusted source (such as a friend or family member) said so.  On the face of it this might be a reasonable and effective filtering mechanism.

This level is required for education, where someone is designated the teacher and the other the student.  Yes, it’s possible to learn if you challenge every assertion made by a teacher, but there are precious few environments that would allow this sort of behaviour from a student.  For things like learning which foods are safe to eat or which are poisonous, children would starve (or die from poisoning) if they couldn’t accept this level with their parents.

The problem occurs when someone in the trusted group is tricked, the idea can then spread quickly through their social network as each contact unquestioningly believes what was told to them.

Credulity Level 3

At this level you trust your own experiences.  Once something has happened to you and you’ve learned about it, you make predictions about the future based on those experiences and trust them.

This can be much more powerful than blindly following a teacher once you gain a deeper understanding of a domain of knowledge, as you experiences can correct misunderstandings your teacher had (“It’s a poor student who doesn’t surpass his master”).  If your real estate mentor told you to always avoid properties with foundation problems, but you come up with a strategy, based on your own experiences, which allows you to lucratively flip properties with foundation problems you might be the only one operating in a lucrative sub-market.

Things change and it can be dangerous to trust what happened in the past.  Bubbles form because an investment keeps paying off, so more money keeps pouring into it (as everyone keeps expecting the future to be like the past), which causes it to keep increasing in value, until suddenly everyone in Holland looks around and asks why they’re all so crazy for tulip bulbs.

Credulity Level 4

At this level you trust what you can sense (or reason about).

This can be worthwhile when you incorporate your personal experiences with an understanding of different environment and determine when you’re in a familiar situation and when things have changed.  Andrew Lahde understood the credit crisis before most people in the financial industry saw where it was heading, and by understanding the financial principles at play (instead of just counting on “it’s been making money up until now, I guess it’ll keep making money!”) he achieved an astronomical return for his hedge fund.

Sometimes your senses (or the data) deceive you.  A friend of mine’s father (an engineer), wholeheartedly believes in ghosts because he remembers seeing one as a child.  Beyond just the vivid imaginations of children, sometimes we see things that simply aren’t there.  Richard Dawkins relates the anecdote in one of his books of seeing a demonic visage superimposed on a neighbour’s house, which, as he approached, broke down to be just light shining out from windows.

Credulity Level 5

At this level you doubt everything (and reject any avenue the provides concrete information as unreliable).  It’s possible the world is a simulation (think Neo from The Matrix) and that everything is a lie, but how could we ever know?  Even if you see cracks in reality, how can you reason about what is outside?  At this level of extreme skepticism, everything is questioned (and doubted).  You see some people at this level in specific areas of their lives (such as conspiracy theorists, holocaust deniers or tax protesters, who remain skeptical of events that obviously happened no mater what evidence or reasoning is offered to them).

This level of skeptism can sometimes lead to radical breakthroughs, such as Einstein believing there was more to physics than what Newton had outlined.

The downside is obviously when massive amounts of thought and effort are wasted on attempts to debunk something that is, actually, true.

We’re coming up on Valentine’s Day, when the young (and old)’s hearts and thoughts take a romantic turn. In this spirit, my posts for this week and next will all involve love and personal finance. If any other bloggers want to join in on the fun, please send me a link to your post at cheapcanuck@gmail.com and I’d be happy to profile what you’ve written.

I’m a feminist (of the Cathy Young brand of equality feminism, not the cuckoo-for-coco-puffs Andrea Dworkin or difference feminism brands of feminism).  Sometimes I’ve grappled with the best way to divide expenses within a romantic relationship.  As an ideal, splitting the costs evenly seems to make sense, but I’m certainly aware that often two people will differ in their disposable income or earning potential.  The actual mechanics can sometimes be difficult, with each person thinking they’ve paid more or becoming amateur accountants trying to balance the various expenses.  In the past, I’ve typically taken a generous view and offered more than strictly half (and have never come to regret it), and have had the good fortune of having mostly dated women who insisted on keeping things fairly divided.

One couple who I was friends with ran into a problem with this while dating as undergrads.  He had a fairly “macho” view of masculinity and dating and insisted on paying all the bills whenever they went out.  Eventually it got to a point where dating was costing more than he could afford.  He discussed this with her, and her reaction was that she wanted things to be more fair and was happy to contribute when they went out.

The guy initially thought this was ok, but told me he was humiliated whenever she paid and he would have to slip off to the washroom because he was so uncomfortable with her paying the bill.  I thought this was kind of lame of him (get over it!), but I thought their solution had some merit.

Basically, they opened up a joint bank account, got a debit card for it, and would always add equal amounts of money to it (so when it got low they’d add $150 each to it or whatever).  They’d then use it to buy anything that they wanted to pay for “as a couple”.  Instead of having to keep a mental tally (I paid $39 for dinner two nights ago, then you paid $21 for the movies, but I paid $7 for the popcorn…), by using the account they were guaranteed that they’d split the bills down the middle.

The other “benefit” was somewhat lopsided.  He would always pay with the communal account, giving the appearance that he was treating (when she was stealthily paying half).  If she didn’t protest, why should I?

All sorts of variants are possible on this for all sorts of situations.  Instead of setting up a joint bank account it’d be possible for one person to use a credit card solely for couples activities, then they split the bill every month.  In addition to a romantic couple, this approach for splitting expenses could be used for friends (2 or more) who are traveling together and want to split all expenses.

If one person earns more than the other, they can decide whatever split makes sense, then still use this approach.  If the girlfriend earns double her boyfriend’s salary, she can put double whatever he does into the account and they’ve neatly split all bills 1/3rd to him and 2/3rds to her.

There certainly can be dangers to shared accounts.  We’ve probably all heard stories about one member of a couple being left with bills after the relationship ends (whenever I see one of those court shows on TV it seems these are almost the only cases they get).  You’d also want to limit how much cash and credit was available in such accounts in case someone goes nuts (I recently mentioned in a  post about the brother of a friend who had $10,000 of his money drained from a joint account after his fiancé went on a weekend gambling binge).  There’s also the chance that your partner might make an impulse buy with the joint account (shoes he just has to have, or her buying drinks for men with loose morals in bars).  If your partner is doing this sort of thing (or you’re worried they will), do you really want to build a life together with them in the first place?

I grew up with an older brother and part of that experience was learning how to deal with disagreements. One thing that I think we both discovered fairly early on is that threats are rarely a good way to get what you want. I’m amazed at how often people try to use them within an ongoing relationship and am perplexed that they haven’t clued in to how ineffective they are.

To start, I’d like to clarify what I mean by a threat (people have commented that it’s odd when I give definitions at the beginning of a post, but commenters regularly misunderstand what I was getting at, sometimes believing I’ve asserted the exact opposite of what I intended, so it’s worthwhile to take the time to be clear). A threat CAN be physical violence (“do this or I’ll hurt you”), but it can also be removing something good (“do this or no desert for you”), changing the relationship (“do this or I’ll break up with you”) or emotional (“do this or I’ll be angry with you”).  Heck, you can even threaten SELF-HARM (“Pay my rent or I’m going to be living on the street”) and use the fact that someone cares about you against them (I personally find this particularly odious).

I think in each case, it sometimes works to get you what you want, but it comes at a cost of damaging the underlying relationship. This can be fine in some situations, such as a one-off transaction with a street vendor while on vacation (“give me a better price or I’m walking away”), but usually the long term hurt isn’t worth any (potential) short term gain.

I love the board game “Risk” (and putting modesty aside I’m fairly good at it). Typically in Risk it’s important to avoid two-front wars, and if you can get the other players to leave you alone while you hammer on one of them (ideally with help from at least one other player), you’re half-way to winning.  Sometimes when I’d hammered away at someone and left them in tatters, I’d tell them I’d let them live if they promised not to attack me (a threat) or to join me in attacking someone else.  This would let me focus on a bigger threat, instead of committing resources to wiping them out completely.  They’d either refuse, and I’d have to wipe them out, or they’d agree and betray me at the earliest possible opportunity (Risk cards allow a weak player to explode later in the game).

The realization I eventually had was, it was a bigger cost to their ego to feel like they’d given in to my bullying them than it was worth for them to stay in the game.  They’d rather reject my demand (and suffer the consequences) than feel like they’d “given in”.  What’s bizarre is even when they stakes are much higher than a board game, people still have the same reaction.  For a world leader to get on the TV and proclaim “We do NOT negotiate with terrorists” makes them look strong and powerful, when in fact, they may be doing a disservice to those they represent.

I contacted some property owners who had units which had been available for rent for an extended period locally (over 4 months).  The owners were eager to talk about selling, but quickly made it clear that they expected me to jump through hoops to buy from them.  They were clearly at a disadvantage in the negotiation (since we both knew their property was sitting empty costing them money each month), but they were so desperate to strengthen their position that I wasn’t able to reach an agreement with any of them (one wouldn’t even let me make an offer – he demand the offer exceed “market rate” but couldn’t tell me what he thought market rate was or how he would calculate it).

Within an employment context, threats to fire or quit are EXTREMELY harmful.  I’ve basically taken the position that I don’t mention quitting until I’m 100% sure I’m leaving.  I’ll try to talk about problems, but I never would mention quitting until I was certain I would leave.  At a number of workplaces they tried to convince me to stay, but at that point I would be a lame duck.  They’re going to remember I was ready to leave, and that will affect any future promotions or assignments.  One retired man I talked to once told me that in all his years of working, he’d found when someone threatened to quit and were convinced by management to stay, they’d usually be fired within 6 months.  Management convinced them to stay so they’d have more time to transition them out of the role they were in, not because they wanted to keep the employee.  Similarly with threats to fire someone, how many times will they need to hear that before they decide it’s better to get another job before it happens?

There’s a clear moral reason against threats (it’s not a particularly honourable way to negotiate), but on top of that they aren’t effective at getting what you want.  On top of that, it makes it harder to negotiate with the person in the future.  If there’s ever a good time to use a threat in a negotiation, it’s very rare (perhaps in life or dead survival situations or one-off interactions like the street vendor mentioned above).

Reacting to threats is also a funny situation.  It’s always tempting (and so very satisfying) to say your own variation of “I don’t negotiate with terrorists” and shut down talks after someone has threatened you.  I think this is less than optimal as well, because you lose any options that might have come out of negotiations with that person.  Giving in to threats is very dangerous (you’ve validated to the other person that threats are a good way to get what they want from you, and they’ll be more likely to threaten in the future).  Setting aside your ego and continuing the interaction can still possibly lead to agreement.  I gave up on the for sale by owners after they’d threatened me, but I should have kept the lines of communication open and told them that I want to buy their property if they decide to sell in the future.

My recent post about Working With Canadians generated some interest (and discussion), so I figured I’d move forward with a second post on a related subject.

Much like the previous post, my goal isn’t to provide a perfect profile of every techie (generalizations, by their very nature, don’t hold for every member of a group).  Instead I just wanted to highlight some of the characteristics that are common with people who’ve chosen to work with computers.  This could be useful to help understand the system administrator at your office, the web developer you’ve hired to build a website for you or that cousin who earns a living designing digital circuits.

Much like the Canadian post, I am a computer nerd, so against my best intentions I might be projecting some of my own characteristics onto computer nerds as a whole (please call me out on it if you disagree with anything I write here).

Social Awkwardness

“The Big Bang Theory” is about physicists more than computer workers (one of them is an engineer, so that’s a little bit closer).  They’re certainly nerds though.  The running joke of the series is contrasting the four main male characters intellect and geekiness with their neighbour Penny’s attractiveness and common sense.

Allowances have to be made, if someone is doing technical work at a company, don’t put them in a role which requires social skills they may not have.  If someone is a genius programmer but insults customer, KEEP HER AWAY FROM THE CUSTOMERS! (and let her code)  I’ve always warned employers in the past that I have no artistic skills, so if they ask me to build an interface (or design the website myself), it’s going to be ugly.  Fortunately most are aware of this, and respond something along the lines of “oh yeah, we never expect programmers to do the design”.

Some technical people DO have solid social skills, and for this rare combination consider putting them in a role to take advantage of both (such as managing other techies or working with customers).

Honest

I don’t mean to say that a nerd will never tell a lie, but there IS a tendency for them to BE more honest than is typical and to EXPECT more honesty than is typical.  I had a job pull a “bait and switch” on me (they said I’d be working on one thing, then after I’d quit my current job and started with them they moved me to another, less desirable, project).  I was never able to get over this initial deception and the job didn’t work out in large part because of this.

Don’t try to “sell” stuff to techies.  Computer people tend to be very good at thinking for themselves, and if you misrepresent something they’ll probably be able to see it.  Present the facts, if some things aren’t ideal, be upfront, provide an explanation and let the nerd make up their own mind about it.  For example, if you need a website done, DON’T try to convince a nerd that 1/2 market rate is the going price for websites!  They’ll realize that’s not true and get angry at being lied to.  If you say something like “there’s a lot of developers looking for work right now, so we’re looking for someone with extra time who can give us a good deal” or “that’s all we can afford right now and realize it’s below market, but we want to build a relationship with someone and will hopefully be able to offer higher paying jobs in the future”) they’re more likely to buy it.

Interesting Problems

This isn’t to say that salary or working environment are unimportant, but computer nerds NEED interesting problems to work on.  If you hire someone and say “we want you to do this exact thing in this exact way for the next 5 years”, they aren’t a real computer nerd if they don’t quit.  This isn’t to say there aren’t jobs well suited to people who are willing and able to use computers, but for people who *love* them, we need variety and challenge.  One fortunate element to this is you can turn a boring task into an interesting one by saying “how can we automate this or make it easy enough to let someone earning minimum wage operate it?”.  *BAM*!  It just got interesting.

How Things Work

A computer nerd will be very interested in understanding how things work.  The benefit to this is that they’ll learn systems inside and out.  The downside is that they’re likely to spend time where it looks like they’re just playing with the technology (which they are), but that’s part of the process.

Hackers

The original meaning of hacker, rather than meaning someone who breaks into computer systems, was people who delighted in understanding a system so thoroughly that they can stretch it’s capacity and make it do new and surprisingly things.  From a security perspective, this often entailed getting permissions from the system you weren’t supposed to have, but other real world examples include things like the coffee cam, creating new senses or Steve Wozniak building one of the first personal computers.

Competency

Because they investigate things so thoroughly, hackers tend to to be VERY good at what they do.  Like any other employees, problems come up, but if you have a problem with a nerd, jumping to the conclusion that they’re not competent is probably a mistake.  It’s dangerous territory to accuse them of this.  On the off chance you’re right, they’ll probably be abashed and redouble their efforts to understand what they’re working with and become competent.  If you’re mistaken about this, it’ll probably trigger the honesty issue and lead to very bad feelings (being called incompetent, or having this implied, is probably one of the worst things you could do to a serious computer type, so tread carefully).

Optimists

Computer nerds are natural optimists (I read once that no one would ever start writing software if they were honest with themselves about how many problems they’re likely to run into).  The good side of this is probably they’ll see a new project in the best possible light.  The downside is that you’ll often get “best case” estimates from nerds, no matter how often you ask for most-likely or worst-case.  Pad estimates whenever possible so that there are resources in reserve that can be allocated if it turns out the problems are harder than expected (they always are).

Inmates Running the Asylum

When you’re working with hard-core hackers, chances are they’ll understand what they’re working on FAR better than you do.  Many people used to a traditional management role will be bothered by this.  It means that you’ll have to ask questions and gather information from the techies working for you, instead of dictating things to them.  Say they estimate it’ll take two weeks and you demand it be done in one?  You’re going to have problems (if they *DO* deliver it in a week, I guarantee either it won’t work properly or your team will have killed themselves to meet the deadline, they can only do that so often).  Say they recommend designing things one way and you demand they do it another?  Chances are there are going to be unforseen (by you) problems with the design that could have been avoided by talking to the people implementing it.

So I’ll turn the post over to our readers at this point (nerds and non-nerds hopefully both have a perspective on this).  Any of these you agree with?  Any big points I’ve missed that you’d add?  Any of these points that you feel miss the mark?

I’ve been planning a post on the concept of unintended consequences for the last two years.  I keep coming up with different perspectives on it, put off posting, and continually rework it.  I don’ t think there’s any way I’ll be able to do the idea justice in under 1000 words, so I going to take a friend’s advice and just put a stake in the ground (and hopefully commenters and future post can flesh out the idea better).

I’ve always been fascinated by the concept of unintended consequences.  From an early age we develop an awareness of cause and effect, and as this awareness grows we gain more control of our environment and our place in it.  You touch something hot, burn yourself, and learn that it’s a good idea to figure out the temperature of something before grabbing it.  Eventually however, we begin experiencing situations where cause and effect break down and we don’t get the expected outcome.  Say, as a child you’re being bullied, and eventually one day you’ve had enough and get into a fist fight.  The teacher takes you aside, and instead of being reprimanded (you’ve been told not to fight), they commend you for standing up for yourself.

The fields of ecology and medicine are full of examples of unintended consequences.  Rabbits were originally introduced in Australia as a food animal.  They were more successful than expected, and ended up becoming vermin that were pests to farmer (causing millions of dollars of damage annually) and devastated the local ecology (they’ve driven a number of species to extinction).  Aspirin is primarily used for as a pain reliever, but has a side effect of thinning blood (which makes it also useful in that capacity for people at risk of blood clots).

Because we are so enamored with the idea of cause-and-effect, people are reluctant to acknowledge or consider the multiple levels of effects that can result from any action.  We like to think in terms of absolutes, which may be knowable, instead of potential side-effects which are inherently unknowable.

The father of one of my friends worked for most of his career at environment Canada.  There was a popular phrase there called “environmental management” which used to drive him nuts.  Basically the idea is that the impact of humans on the environment can be predicted and controlled (such as allowing a certain number of trees to be cut annually, deer to be shot or fish to be caught).  For a while he carried around a Rubik’s cube and would hand it to the person using the phrase and say “try to solve it”.  After they’d played with it for a couple of minutes he’d then say “environmental management is like solving a Rubik’s cube made up of thousands or millions of smaller cubes, if we can’t solve this small toy, how will we manage an environment?” As a side note, his position WASN’T that we should ban all human activity that impacts the environment, just that we shouldn’t fool ourselves by pretending we can perfectly predict environmental impact.

Say we decide sweatshops are bad.  We organize a band of activists and put pressure on a company to move its factory to a country with stronger labour laws which will police them and prevent child labour, exploitation and hazardous working conditions.  We are proud of ourselves and happy for having helped the workers at that far-off factory (imagining that they’ll move on to better jobs with better pay and working conditions).  Now, back at the shut-down factory, the workers were barely feeding their family on the low-wages they were receiving, and without that job (since the factory moved out of their community) there isn’t comparable work for the former workers.  The influx of new workers looking for jobs drives down the wages in their community (since there’s more competition for the remaining jobs) and some members of the community starve to death (the ones who were barely making it when the factory was operating).  Say that community had been building a school and source of clean water by reinvesting some of the (relative) prosperity they had had into community development, but with the tougher times members are having they cancel those projects (and focus on more immediate needs).  By trying to help a community, our actions have led to the death of some of its members and permanent set backs in the infrastructure that could have led to a higher standard of living.

I’m not saying that sweatshops are good, or that this is the result from such activism, but this is a situation where a group of people INTENDED to help a community, but instead ended up harming them.  Consider the story of the butterfly and the cocoon, where our intention to help can sometimes harm.

Conversely, taking a knife and cutting someone up is a pretty mean thing to do, unless you’re a surgeon and potentially saving their life (by cutting in the right places).  Sometimes the side-effect of harming someone is to help them long term.

I’ve been quite interested in economics (and almost studied it for my PhD) and have read it described as the study of unintended consequences.  It’s seemed strange to me that personal politics can heavily influence an economist’s work.  Democratic or republican physicists should arrive at the same conclusion, so what is so different with economics?  Perhaps the infinite possibilities and depths of repercussion gives those studying economics the latitude to keep investigating until they find the results they want.

Unintended consequences happen CONSTANTLY in personal finance (and investing in general).  Interest rates drop, making housing more affordable, which leads to more people deciding they can afford to buy a house, which leads to more competion among buyers in the housing market, which leads to an increase in the sale price, making housing less affordable.  Investors lose confidence in the economy, leading to a stock market crash, which offers shares of a company at a more attractive prices which is more likely to provide a greater return in the future.

Have you had unexpected benefits or perverse results in your life?  What was the most memorable?

Stuff White People Like is an amusing blog that mocks the cultural norms of the “educated elite”, a group that often denies having any such norms (yet, we clearly do).  Similarly, Canadians both deny having a culture (some Canadians, without a trace of humour, claim they don’t have an accent) and hold particularly trivial things up as examples of “Canadian culture” (hockey, poutine, Anne of Green Gables and other such nonsense).

I’m not trying to provide the definitive guide, but thought I’d try to draw a rough sketch of Canadians, and some of our typical values and behaviours.  The target audience for this being someone who has recently moved to Canada, is working with a Canadian organization, or is trying to make sense of a new Canadian ex-pat in their country or company.

Please feel free to argue with any of my assertions or add any more.  As a Canadian it can be difficult to step outside of myself, so some of my own issues may creep in here.

American

Canadians often define ourselves in terms of how we are different from Americans.  A famous beer commercial aired years ago which basically consisted of detailing minor ways that Canadians are different from Americans.  The irony of all this is our cultures are VERY similar.  If you take someone from Northern New York State or Minnesota they’re probably going to be more similar to a Canadian than to a Texan.  Anything you’re unsure about Canadians, just treat us like an American and you’re on pretty safe ground.

Politeness

Canadians are known for being polite.  Once while traveling in England my family had a good laugh when a tour guide characterized Canadians as “Americans with manners” (see first point).  The plus of this is that Canadians you’re interacting with SHOULD usually be polite to you.  The downside is that we can be touchy about behaviour we perceive as rude (joking around with or teasing a Canadians isn’t something to rush into).

Littering

When I worked down in San Francisco I was walking along the street with a Palestinian co-worker and I saw a man drop his fast-food cup in the gutter.  After I’d been ranting about it for 2 or 3 minutes my co-worker started chuckling.  “It’s really obnoxious to litter like that, eh?” I asked.  To which he responded “No, it’s just that a couple other Canadians I’ve worked with would flip out if they saw anyone littering too”.

I’m not sure if this is just a special case of politeness, but littering is a hot-button with a number of Canadians, so if you do it, don’t do it in front of us.  One of my friends’ father is about the calmest, nicest man you could possibly imagine and he almost got in a fist-fight when he saw a guy littering on the street.

Friendliness

I think many people are taken aback at how nice and friendly Canadians can be.  If you start at a new company or community, people will go out of their way to make you feel welcome and help you establish yourself.  I think it can be overwhelming for people at first (they think we’re after something), but I think it comes from seeing ourselves as nice, friendly people and trying to live up to that self-image.

Standoffishness

As much as we can be friendly, we don’t make friends quickly.  A number of my friends have commented that they came to Canada, someone was super friendly to them so they assume they’re buddies.  They ask the person out for a beer one night and the person blows them off (“no thanks, I’m going home to watch 24″).  One man tried his damnedest to get me to go see the new Star Trek movie with him and it freaked me out.  I ran into him at a university event and we had a nice chat I guess, then he REALLY wanted to be my friend.  Mutual friends told me they told him that you can’t come on strong like that with Canadians.  We tend to ease slowly into friendships.

One friend told me if someone in her home country was as nice to her as most Canadians are, it would mean they really want to be her friend, so she always finds it off-putting dealing with hyper-friendly Canadians who keep rebuking her friendship overtures.

Gluttony

Canadians like to eat.  It can be a bit nauseating to new arrivals how much energy we put into thinking about our next meal (and often the amount of food we put away).  We’re similar with Americans for this, so probably they wouldn’t be taken aback, but I think many new arrivals from other areas are (rightfully) grossed out by it.

It makes us pretty easy to please.  If you have a meeting with Canadians, put out a tray of snacks (cookies or something) and we’ll probably get pretty excited.

Diversity

This is another double edged sword.  The stereotype of a group of rednecks sitting around talking about “them” is pretty horrifying to most Canadians (and we do have an incredibly diverse population).  I think if someone were wandering around making sexist, homophobic or racist comments, they’d get called on it by other Canadians pretty regularly.  We like to think of ourselves as being a tolerant nation.

The other side of it is that often those attitudes are present, just concealed.  One friend-of-a-friend who worked in Asia was upset by the blantant racism she encountered (she’s black).  One time she had a job interview scheduled, told the person on the phone that she’s black, and the person then told her not to bother coming in.  In spite of this (and as painful as it was for her), she said she prefered it in some ways to Canada.  She said in Canada she never knew if race was a part of how people saw her or treated her (even people she’d known for years), and she at least liked that it was out in the open when she was in Asia.

So I’ll turn the post over to our readers at this point (Canadians and non-Canadians hopefully both have a perspective on this).  Any of these you agree with?  People who have moved to Canada, was it a big adjustment adapting to our norms?  Any big points I’ve missed that you’d add?

When I was growing up, the 80′s cartoons each had standard issue goods guys and bad guys.  Autobots battled Decepticons, G.I. Joes battled Cobra, and He-Man battled Skeletor.  I think I outgrew cartoons (at least this style of animation) when the villains’ consistent focus on “evilness” began to ring false.  The most extreme case of this would be Beastly on Care Bears who would cackle “I’m *SO* bad!”  In real life “villain” is often a matter of perspective, and no one thinks of themselves as evil.  We’re all the “good guy” in our own story (even when we play the villain in someone else’s).

I’m not entirely sure why we feel this is a good way to structure conflicts when we present them to children.  Clearly it becomes an easy framework to convey values to children.  If we feel generosity is a valuable trait, then we assign it to the Care Bears (and show No Heart being stingy) and it is clearly conveyed to them which is the better trait.  I think it can lead to a variety of problems with viewing the world as black and white as adults, however I’m not sure that early socialization is really to blame (Xenophobia seems to come quite naturally to the human race and I suspect “black and white” thinking derives quite naturally from an “us and them” world view).

This kind of thinking creeps into personal finance in two ways.  First, there is a tendency to break people into two groups:  those providing good information and those providing bad information.  I wrote a pretty scathing review of “Rich Dad, Poor Dad” by Robert T. Kiyosaki, so people might be inclined to think I disagree with everything he writes.  I find some of his material incorrect, some of it poorly presented, and some of it worthwhile.  Trying to sort these out isn’t worth the benefit, so I recommend steering clear of his books.  He suggests joining MLM as a way to learn how to sell, which isn’t AWFUL advice (I think it might be the only worthwhile reason to get involved with “network marketing”).  Conversely, I like most of what John Reed has to say about real estate, investing and life.  One big idea that he pushes in a number of books and articles is the “unlimited downside” of toxic contamination as a risk in real estate investing.  I agree that it’s a concern (and agree with him that it does give you an unlimited downside) however I disagree with his conclusion that it means you should avoid buy & hold real estate strategies.

This sort of thing can creep in to blogging.  Long term readers will have a mental image of Mike and myself, and I can pretty much guarantee we don’t match it in real life (Guiness416 and Preet have both met us after reading the blog, please feel free to comment).  One reader was briefly very enthusiastic about the blog (she wrote me an e-mail comparing some of what I’d written to Shakespeare and the Dalai Lama).  Later she discovered I invest in tobacco stock and told me off.  I’m not as good *OR* as bad as she thinks I am.  A while back OperaBob took exception to a comment about the DRiP Investing Resource Center.  It seemed to me what he couldn’t wrap his head around is that I said good things and bad things about the community he’s a part of.   His community isn’t all good (or all bad):  nothing is.

Our infamous real estate agents posts have similarly been interpreted as us saying agents are bad, which we never said in the posts or comments (and, in fact, we repeatedly point out parts of the process where the agent is useful).  However, because we don’t  agree that agents are absolutely good in every way, some people interpret this as meaning we think they are all absolutely bad.

The second way this creeps into personal finance is people who want to view investments as “good” or “bad”.  In my recent post “Beginning Investment Strategies to Avoid” Mark Wolfinger left a comment disputing characterizing stock options as a zero sum game.  Mark’s comments were interesting (he certainly knows more about options than I do), and presented situations where stock options could be used effectively, however that wasn’t what I discussed in the article.  In that post I said that stock options were a) not for beginners and b) a zero-sum game.  This was taken as saying options are “bad”, which wasn’t at all what I wrote (or meant).

We sometimes get commenters who want to figure out which is the “right” investment strategy.  Cory recently commented on one of my posts that GICs have outperformed stocks over the last 10 years (I’m not 100% sure I even buy this, it’s probably ignoring dividend reinvestment, but let’s accept it at face value for the purpose of this post).  There’s another chestnut showing that you’d be better off buying beer, drinking them, then returning the cans for a refund instead of investing in the stock market.  These are true, for what they are, but they’re absolutely useless unless we have a time machine.  I don’t care whether GICs outperformed stocks over the last 10 years, I want to know if they will over the NEXT 10 years (and no one can know that).

There are people who have made fortunes with Multi-Level Marketting (probably by starting them), there are people who have lost big in passive investing.  Some have lost “safe” money when banks collapse, and others who have never lost a dime but have danced through one risky investment after another.  There are no absolutes (in investing or in life), and you’re wasting your time and money if you go looking for them.