Soul Shelter

Later this month I’m going to do something I haven’t done for twenty years: apply for a job. This qualifies as a reasonably daunting task, one that I’m very much looking forward to.

No, I’m not giving up self-employment. The position I seek is half-time, one that suits me perfectly and offers an outstanding fit with my other work. Plus, I was invited to apply, so my chances should be good (wish me luck!).

But it’s been a long time since I sat on the applicant side of the interviewing desk, so I’m taking my preparation seriously. Especially so because my prospective employer is a large institution with a formidable bureaucracy.

Bureaucracy intrigues me. Every large organization has one, and all bureaucracies—none moreso than those involved in the business world—struggle to cope with ever faster-changing environments.

So while pondering the issue every job seeker must squarely address—how to best help one’s prospective employer—I realized that my background in entrepreneurship is the most valuable asset I offer. To deal with increasingly effective competitors, this organization needs someone with a fresh perspective and a different skill set. In other words, it needs to introduce some variety into its system.

Variety. The word stuck in my mind, and while mulling initial steps in my application strategy, I stumbled across an intriguing concept, The Law of Requisite Variety. It’s from the discipline of cybernetics, the interdisciplinary study of complex systems originally defined as “the science of control and communication, in the animal and the machine” (not to be confused with Dianetics, the controversial self-help movement founded by L. Ron Hubbard).

The Law of Requisite Variety applies to organisms, machines, institutions, and any other system trying to survive. “Survival” can be described as “maintaining essential variables within a proper range of values.” That’s something all systems try to do, typically with the help of some sort of control mechanism, or regulator.

Here’s the science behind it: W. Ross Ashby, the law’s formulator, said that disturbances (D) start in the world outside the organism—often far from it—and threaten the organism’s survival (drive the essential variables (E) outside their proper range of values) if the organism’s regulator (R) does nothing to block them. To maintain E within proper values, R must counteract each disturbance D. But to completely block the effects of disturbances, the regulator must be able to produce at least as many counteractions as there are disturbances. To completely eliminate disturbances, therefore, the regulator must embody as much variety as the disturbances.

In plain language, what does this mean? Ashby himself wrote that “in its elementary forms the law is intuitively obvious and hardly deserving statement.” He offered the example that a camera must be capable of at least twenty distinct settings to successfully take in-focus pictures of twenty different subjects lying at varying distances from the photographer.

But applications of the Law of Requisite Variety to business and other disciplines are clear. Only adaptable organizations can survive, and the way to become adaptable is to incorporate more internal variety. Here’s what the Panarchy Web site says about broader implications of the Law of Requisite Variety:

This is a central law for the proper functioning of every mechanical and biological entity. It has been totally ignored by the social scientists and by their patrons, the state elite, because it represents a refutation of the need for the concentration of power in a central apparatus (the state) as the only way to solve problems (or generally to deal with reality) in a complex society.

In fact, the law supports the exact opposite view, declaring, with the support of logical reasoning and empirical evidence, that only variety can master variety, reducing disturbances and promoting harmonious order … This principle then disposes of the myth (still cherished by journalists and sociologists in search of easy popularity) that extraordinarily complex situations demand the concentration of extraordinary powers in a central entity.

Putting it in business terms, when markets are changing and competition is stiff, corporate rigidity and centralized decision-making threatens survival (I love it when pundit-spouted aphorisms turn out to be backed by hard-core science).

So there you have it: Proof that variety is not only desirable, but necessary to survival (give me some credit here, I’m exerting myself not to use a dreadful cliché involving the word “spice”).

How does this relate to my job search? Well, I hope to help change the scene at an institution I love, and equally important, I hope that this institution will help me change my scene. Together—and by providing each other with requisite variety—we’ll not only survive, but thrive.

You might also enjoy:

“Recognizing the Opportunity Within”

“You’ve Got to Jump”

“Understanding the World Through the Thomas Theorem“

One of my favorite tunes from decades past is Whip It, by the technopop unit Devo. I used to play Whip It in a cover band (along with Uncontrollable Urge), and it always made partygoers jump to their feet. Back then, I could hardly have known that I would later run into Devo founder Mark Mothersbaugh at a Tokyo art show, or that years after that, I’d be referring to Devo in a blog.

But here I am, facing a daunting task (designing and executing doctoral research) and I find my mind casting back to days of playing music, and drawing on the wisdom so neatly described by Devo’s lyrics.

Some listeners thought Whip It is about kinky sex; it’s actually about problem-solving:

When a problem comes along, you must whip it.
Before the cream sits out too long, you must whip it.
When something’s going wrong, you must whip it.

Now whip it! Into shape. Shape it up! Get straight!
Go forward! Move ahead! Try to detect it. It’s not too late! To whip it! Whip it good!

When a good time turns around, you must whip it.
You will never live it down, unless you whip it.
No one gets their way, until they whip it.

Maybe because I played Whip It so many times, and maybe because I happened to meet Mothersbaugh in person, something about the song struck me deeply and stayed with me over the years. While pondering my approach to daunting tasks recently undertaken, I came up with seven steps that have worked for me. Take a look, and see if they might work for you, too.

1. Abandon Either the Task or the Result
Read The Underachiever’s Manifesto and know that it’s okay to give up before you start. You don’t have to set the world on fire. Undertake the task only if it’s truly meaningful, and you have the time, energy, skills, and psychic bandwidth to handle it. Sure you want to proceed? Then abandon attachment to the result and immerse yourself in the process. The value of completing Daunting Tasks lies in the journey theretoward, not in the end state of accomplishment. Still on board? Then on to Step 2!

2. Start Now
Start right away, “before the cream sits out too long.” Immediate action, even baby steps, generates momentum and confidence.

3. Enlarge Yourself
In your mind, make yourself bigger than the task. You are huge and powerful: you look down on this puny job like a towering giant who twiddles trees like matchsticks. Grab your Daunting Task by the, er, family jewels, and squeeze until he begs permission to shrink to a manageable size. Grant such permission. Now kiss and make up. You’re friends, but you had to show who’s in charge.

4. Brainstorm a Quick & Dirty Plan
Quickly write down a strategy for dealing with the Task. Don’t think hard about it, just jot down whatever thoughts come into your head. Write badly and don’t edit. Later, look over your notes and rearrange the order of your thoughts. Try to see how the job might be broken down into manageable sub-tasks.

5. Draft or Rehearse
Based on your notes, write a draft plan for accomplishing the Daunting Task. Alternatively, if it’s a job interview, presentation or the like, “rehearse” the task: shut yourself into a room (preferably with a video camera) and let ‘er rip. Who cares if you sound goofy or your draft plan reads terribly? By blurting out the words you need—whether on paper or by voice—you’ll start to understand what you want to say, and perceive the gaps in your plan. And by blundering through one “dress rehearsal”—sloppy as it may be—you’ll feel like you’re 50% of the way home. See how your confidence has jumped?

6. Be Confident and Be Friends
You can do it! View your task as a challenge, a job, a project—anything but a problem. Thinking of something as a problem from the get-go immediately positions you to fight the Daunting Task rather than collaborate in achieving the promise of its purpose. Remember, you bought into tackling the job during Step 1. So be friends with it. Let the challenge of your work create curiosity rather than despair. If you feel stuck, read a book on the subject, or seek out and approach an expert for advice.

7. Do First What You Want to Do Least
Clark’s Rule About Priorities (CRAP™), the first of Clark’s Rules, says Do First What You Want to Do Least. It’s based on the difference between urgency and importance. Even though you’re friends with your Daunting Task, somehow you may find it easier to start each day by responding to e-mail, browsing the Web, and accomplishing little, “urgent” errands. Resist the temptation. Stick with the important task: the Daunting Task.

Finally, celebrate the process as much as the end result by treating yourself as you pass through major milestones. You’ve earned it!

The foregoing is hereby formalized as Clark’s Axiom Regarding Daunting Tasks (CARD TASKS): Abandon either the task or attachment to the result. Earlier this week, Mark put it beautifully as “Think Progress, Not Completion.”

As always, read the disclaimer, and be advised that Clark’s Rules may apply only to Clark, who can barely follow them himself.
You may enjoy some related posts:

“Clark’s Law of Work” (Attractiveness is inversely proportional to compensation)

“Clark’s Communication Potency Theorum” (The power of communications improve exponentially with proximity, either physical or psychological)

“Clark’s Option on Opportunities Theory (COOT^TM)”

Working on a doctoral thesis has sent me on a book learnin’ kick, and the other day I stumbled across something that, to my mind, reveals much about how the world works.

It’ s a genuine sociology precept called the Thomas Theorem. Formulated in 1928 by the sociologist William Isaac Thomas, it’ s been described by one eminent scholar as “probably the single most consequential sentence ever put in print by an American sociologist.” Sometimes called the Thomas Dictum, it is accepted by many researchers as scientific fact—or at least as a powerful way of comprehending the human condition. Here it is:

If men define situations as real, they are real in their consequences.

The Thomas Theorum is no armchair theory. Law enforcement agencies use it to train officers in the handling of the mentally ill, and it’s been used effectively to explain everything from beauty contest outcomes to panic runs on bank deposits.

To me, the Thomas Theorem explains a lot: The healing power of religion, crowd behavior, a leader’ s ability to galvanize, the staying power of superstitions, Henry Ford’ s famous line that “whether you believe you can do a thing or not, you’ re right.”

Closer to my heart, the Thomas Theorem suggests that self-help books advocating the power of belief are basically right.

In fact, Thomas may have gleaned inspiration from one of the Granddaddies of the self-help movement, a man who intuitively understood the Thomas Theorum decades before Thomas himself: James Allen.

A soft-spoken, retired Englishman who lived quietly in the southwest coastal town of Ilfracombe, Allen wrote a short book about positive thinking called As a Man Thinketh. The key theme of Allen’ s ground-breaking book is that one’ s thoughts determine one’ s circumstances. As Allen put it:

A man is literally what he thinks, his character being the complete sum of all his thoughts … As the plant springs from, and could not be without, the seed, so every act of a man springs from the hidden seeds of thought, and could not have appeared without them.

And more to the point:

Most of us are anxious to improve our circumstances, but are unwilling to improve ourselves.

Oddly, Allen contradicted his own thesis when he decided that As a Man Thinketh was unworthy of publication. Fortunately, his wife disagreed, and the book spawned an industry now worth several hundred billion dollars each year.

You can view the complete text of As a Man Thinketh at sites such as the Project Gutenberg.

Allen died in 1912, long before witnessing the seminal effect his work had on today’ s gargantuan “wellness” industry. Allen wrote 19 books, many with undeniably broad appeal (it seems another becomes a bestseller in Japanese translation every year).

In my view, James Allen was to the self-help industry what Chuck Berry was to rock n’ roll music. Berry was influenced by many musicians, but he was the first to combine numerous traditional elements into an original, enduring new form.

Similarly, writers preceding Allen by decades—even centuries—covered comparable topics, but Allen crystallized the “power of positive thinking” concept in humble, poetic language utterly devoid of hucksterism (I haven’t read most of The Secret’s source texts, many of which preceded Allen and seem more focused on money-making—if you’ve read any, please share your thoughts).

Later self-help gurus—Dale Carnegie, Napoleon Hill, Tony Robbins, Wayne Dyer and many others—owe a huge debt to Allen. And the industry is poised for even more explosive growth, analysts say. Economist Paul Pilzer, in a book entitled The Next Trillion, predicted the U.S. wellness industry will be worth a trillion dollars by 2010. So there’ s plenty of opportunity to do good by helping others be well.

But most important, the Thomas Theorum suggests that our own fortune and fulfillment are, indeed, largely the result of our beliefs. In fact, I feel a new Clark Rule coming on … wait a minute … yes, here it is! And with an easy-to-remember acronym: TTTTT™ (Tim’s Take on The Thomas Theorum):

“Make it real in your mind first, then real in fact.”

Or as Mark and I put it in The Prosperous Peasant, our own personal success parable released late last year: Conceivable Means Achievable.

See also:

“What We Really Need to be Happy”

“Life Without Principle (or Interest)”

“Should I take the job or go for my MBA?”

Few undergraduates make the effort to meet instructors outside of class, so clearly the earnest young man sitting across my desk—one of my best students—was wrestling with a big decision.

John had reentered school after working for a couple of years, and now had the opportunity to take a marketing position with a local company. More mature and experienced than his classmates, he was also more focused: someone clearly headed for management. Still, he only had a few years of full-time work experience.

“Take the job,” I said.

The occasional opportunity to offer uncompromising career advice (that actually might be followed!) is one of teaching’s great pleasures. Mine was an easy recommendation to make, because getting the most out of business school requires more than a couple of years of prior work experience.

But we all face decisions less easily made, and often without an adviser who’s trod the same path before us. How to best weigh the pros and cons?

I pondered this late last year after my blogging mentor, J.D. of Get Rich Slowly, asked his readers whether education is always a good investment. My thoughts ended up as a guest post, re-presented here in modified form.

Get Rich Slowly readers Lisa and Jethro had shared their thoughts about returning to school for a graduate degree. They were looking at the decision primarily from a cost/benefit viewpoint: An advanced degree would cost x dollars and require borrowing, but their salaries would likely rise to x dollars when their new credentials allow them to secure better jobs. Was it worth taking on debt?

Lisa and Jethro might benefit from a different approach to the issue, one based on Clark’s Option on Opportunities Theory (COOT^TM).

In finance jargon, an option is the right to buy or sell a security at a specified price within a set time. But COOT takes a more general “lifeview” of options—a perspective that any of us, even the financially disinclined, can find useful.

COOT says that “option” is simply another word for “opportunity” and that all action can be seen as creating new opportunities. The key point is that the value of a new opportunity is not precisely quantifiable, but is likely to be great—and more importantly, unavailable without “exercising the option.”

Here are a couple of examples:

Let’s say you want to write a book. From a moneymaking standpoint, that’s a terrible idea for most people; it’s like moving to Australia so you can date Elle McPherson, or starting a rock band because you want to become famous—sweet thoughts, but dreadfully naïve. (Mark, Soul Shelter’s Director of Fulfillment, will back me up on this point).

But writing a book creates opportunities that might not arise any other way—opportunities to teach, become a consultant, or develop authoritative knowledge in some field (or in Mark’s case, to create a lasting work of beauty and truth).

The same goes for starting a business. When you start a new business, suddenly you’re an entrepreneur, not just a worker. Calling on customers or prospects, you’re likely to meet with other owners and managers, and enter into a whole new world of business. Even if your venture doesn’t ultimately succeed, the experience of going out on your own will have created opportunities (options) unattainable any other way.

Likewise for education. Eighteen years ago I entered a part-time MBA program. It took me seven years to finish—the longest period allowed without getting booted out! Many times I came close to quitting, wondering whether the time, money, and effort were worth it.

Today, I’m grateful to have stuck with it, not just for the knowledge and career advances it enabled, but because it allowed me to become a teacher—an unexpected but welcome career change. Now I’m pursuing a doctoral degree—something inconceivable to me even five years ago—but something that wouldn’t have been a viable option without the MBA. Pursuing an advanced degree was creating brand new options for me, though I didn’t know it at the time.

So is education always a good investment? No. But if you have serious thoughts about going back to school, that’s a powerful sign that it’s a very good idea for you.

Heed your intuition. It’s trying to create new options for you.

P.S. As always, remember that COOT^TM—and all of Clark’s Rules—are empirically unproven, based solely on the experience of Clark, and may be completely wrong

Every Monday morning at Soul Shelter headquarters in Portland’s Hawthorne District, Mark and I hold a directors meeting (I’m Director of Fortune, Mark is Director of Fulfillment).

The first order of business is to power up Soul Shelter’s advanced server device—the Jura E50 automated espresso machine—after which we ponder solemn questions concerning fortune and fulfillment.

Last week Mark opened the discussion. “Why do you think fun jobs pay so little, and boring ones pay so much?”

The most longstanding of Clark’s Rules quickly came to mind, but for a moment my thoughts flashed back to the events of past months.

I’d met Mark by seeking editing help through Craig’s List, and we’d worked so well together that we decided to co-write a book. This collaboration was such fun that we decided to launch a blog that would build on the parables we’d written about two peasants seeking fortune and fulfillment.

Mark and I had taken very different paths in life. Disregarding the financial risks, he’d committed early and completely to a career as a novelist, while after struggling for a few years as a musician I’d moved on to a career in business. I’d found fortune, Mark had found fulfillment. Eager to share what we’d each gained, our discussions kept returning to the challenges of finding work that is personally fulfilling, yet pays decently.

So now, mustering the gravity that seemed appropriate to my considerably greater, er, chronological endowment, I offered Clark’s Law of Work:

Appeal is inversely proportional to compensation. The more boring the job, the higher the pay.

Mark pressed for details, so I elaborated, first noting that Clark’s Law of Work has been formally restated as Clark’s Construct Concerning Corporate Compensation (CCCCC).

“It’s a simple question of supply and demand. There’s an endless, overwhelming supply of people who want exciting careers as writers, painters, explorers, professional athletes, musicians, movie producers, television personalities, artists, models, singers, comedians, actors, and rock stars. But actual demand for people in those professions is limited. Huge supply and limited demand drives wages down.”

My novelist friend nodded slowly and took another sip of coffee. Mark looked amused as I continued fleshing out my construct. I drew a fresh cup for myself from the Jura E50. Coffee and Socratic dialogue are a beautiful match.

“If five kids on the same block all start selling lemonade at the same time, what happens? They drop prices to compete with each other. That’s exactly what happens in the “glamour” professions. Aspirants are so eager to break into the business that they’ll work for free—or even pay someone—to get started.”

“That’s why we see predatory fee-for-service ‘agencies’ for modeling wannabes,” Mark interjected, “and vanity presses for would-be writers.” I agreed: The law of supply and demand—the most fundamental principle of economics—is useful for understanding many things in life.

“What you say goes a long way toward explaining the low pay in creative/exciting occupations,” Mark admitted. “But what about high pay in boring professions?”

I refueled with a long drag on my quadruple Americano. Mmm! “Think about which businesses occupy the ground floors of the world’s largest office buildings? Financial institutions and insurance companies. These companies make money consistently because customers pay for their services ‘rain or shine’—in good times and bad. Money flows heavily and relatively predictably through these ‘infrastructure’ businesses and others like them: oil, steel, commodities refining, transportation, government and legal services, and so forth. Many would consider these boring organizations to work for.”

As a former legal clerk and temporary office worker, I acknowledged that ‘boring’ is a relative term, and Mark, who’s done his share of temporary gigs, agreed.

“But then there are the clerks,” he said, “and other administrative assistants for these companies. They don’t get high salaries.”

“Right,” I agreed, “because they’re doing low-skill work. A huge supply of people with low skill levels compete for a comparatively limited pool of clerical and other jobs, so wages remain low. But someone with high-level skills in a boring sector can command a high salary.

“The unfortunate truth is this: The greater the predictable cash flow, the less exciting the business—and the better the pay.” I encouraged Mark to ignore this as career advice, not that there was any danger he would abandon writing (see Fulfillment: A Work in Progress).

Looking skeptical, Mark proposed, “But there have got to be some exciting jobs that pay well?”

Sure, I replied. Here are some examples:

• Crime Let’s face it, illegal acts can be extremely lucrative. But the severe moral and practical downsides make this a non-starter for almost everybody.

• Dangerous work Miners, offshore oil rig workers, lumberjacks, professional underwater divers, and similar occupations offer good money. There’s a reason: You can get killed. (Mark was quick to concur, as his first novel explores the lives of coal miners)

• Dirty work Same idea; see “Dangerous Work” above.

• Hardship posts Fifteen years ago, a business school acquaintance of mine boasted to his classmates about the $150,000 annual salary offer he’d won—for a position based in a remote island nation. ‘Nuff said.

• Whatever turns your crank The most important category of all: Some lucky people are passionate about law, accounting, insurance, and other professions that many consider unexciting. More power to them! “Exciting” and “interesting” are in the mind of the beholder.

We repaired to the Soul Shelter Blogatorium for notemaking, whereupon Mark postulated his first corollary to Clark’s Rules:

There are many exceptions to CCCCC, and like all of Clark’s Rules, CCCCC should be enjoyed or ignored at one’s own discretion.

The Director of Fulfillment is wise beyond his years. In recognition of his sagacity, this corollary is now known as CCCCCCC: Cunningham’s Corollary to Clark’s Construct Concerning Corporate Compensation.

Our pondering of fortune and fulfillment continues next Monday, when Mark writes about The Beauty of Letting Go.

Related posts:

“Life Without Principle (or Interest)”

“Clark’s Rule About Priorities” (CRAP™)

My career is deeply intertwined with Japan, and a stay in Tokyo late last year reminded me how powerfully face-to-face communication helps us achieve our goals.I’d been communicating with partners and colleagues by Skype and e-mail for weeks before my visit, but things really happened after we sat down and talked in person. The experience was so powerful that I decided to formalize another Clark’s Rule that’s been simmering in the background. So without further delay, here—for the first time on any page—is Clark’s Communication Potency Theorum™ (CCPT):

The power of communications improve exponentially with proximity, either physical or psychological.

CCPT postulates that the weakest form of communication is e-mail: the easiest, least-invested way to get in touch. On a scale of one to 100, CCPT assigns it a value of one.Talking by phone is ten times (one order of magnitude) more powerful than e-mail. I don’t even put my e-mail address on my day job Web site; long experience has shown that e-mail-only inquiries are invariably time-wasters in my business (people unable to spend a nickel or muster the gumption to call on the telephone are poor prospective customers or partners).

Conversely, people who call first rather than e-mail immediately stand out. I see this all the time at school: Outstanding students prefer telephone or in-person conversations, while the less capable prefer to “converse” by e-mail. So phone calls score ten on a scale of one to 100. You might be physically far away on the phone, but you’re very much more present.Meeting in person, though, is ten times again as powerful as a telephone call. This is the gold standard for potent, meaningful communication—it rates 100 on the CCPT scale. Below is a highly scientific graphical representation of Clark’s Communication Potency Continuum™:

Here’s an example of CCPT in action: While working on my first book, I arranged a telephone interview with a Tokyo-based real estate professional.

The conversation was, frankly, disappointing: where I expected explosive revelations he offered only mild commentary. I almost decided against asking for an in-person meeting, but did, and on my next Tokyo trip, I was glad—because once we’d met face-to-face, he offered some of the hardest-hitting insights of any interviewee. His initial reticence on the phone wasn’t cultural (he’s from the U.S.). It was simply that meeting in person created an unbeatable depth of rapport and trust.

My latest meetings drove the point home. What a difference! Think about e-mail “conversations.” Typing out questions or responses, transmitting them, then waiting for answers is dreadfully inefficient. A seven-minute telephone discussion can easily replace hours—even days—of piecemeal, back and forth, typed question-and-answer “conversations.” But it’s more than a matter of efficiency. The human voice’s rich contextual cues—tone, pitch, pauses, silence—communicate far more than mere words. And in person, facial expressions, body language, bearing, and posture add more layers of rich context. Forget the message itself; talking by telephone or in person will take you far beyond the “message”—maybe into an entirely new relationship.

Sure, you can’t beat e-mail for transmitting a PDF file or spreadsheet. And for ongoing working relationships, especially for people in different time zones, e-mail can be extremely effective. But for accomplishing powerful, satisfying communications, especially in the initial stages of a relationship, give me telephone or in-person interactions every time. Why do so many people these days insist on typing rather than talking? I can’t help but think they do so not only to prevent confrontation, but to avoid encounter.

Time and again I’ve seen people give up on something because “I e-mailed him and he never got back to me.” Giving up after a single attempt, using the least potent form of communication, is no way to go about achieving a goal—or building social capital. Every personal and professional breakthrough I’ve ever made originated in a face-to-face encounter, and I find it hard to believe things are otherwise for most people.

Am I a hopelessly outdated, living-in-the-past Luddite? Maybe so. Like all of Clark’s Rules, CCPT is empirically unproven and based solely on the experiences of Clark. So be forewarned: Clark’s Rules may be false! E-mail may indeed be the new gold standard of communication …But I don’t think so. So if you’re with me, get hip to CCPT and pick up the phone, or better yet, set a coffee date. You’ll create a better connection—and go farther toward achieving your goals.P.S. Stay tuned for our Monday 1/21 post, when Mark will ponder career issues in Life Without Principle.

Related posts:

“Happiness is Turning Off the Computer”

Happy New Year!

In our final post of 2007 I postulated, in my Midwestern, self-denying, Protestant upbringing way, Clark’s Rule of Priorities: Do First What You Want to Do Least.

To kick off 2008, here’s a four-letter corollary I call WIRU (“Why Are You … ?”)

WIRU addresses the difference between urgency and importance—it stands for “What’s Important is Rarely Urgent.”

We all tend to confuse urgency and importance. I think Stephen Covey was the first self-help guru to popularize the notion that most people spend far too much time in the “urgent” zones of their lives—and not enough in the “important” zones. Here’s how I recall Covey’s conception of the four different “quadrants” in which we can spend time:

Now consider some common tasks and into which of the four quadrants they fall:

See a pattern? Most of us spend too much time in quadrants 1, 2, and 3. Our goal, of course, should be to spend as much time as possible in quadrant 4.

The WIRU acronym can be used to help prioritize daily activity. Before devoting a chunk of time to something, I try to step back and ask myself, ‘Why Are You choosing to do this now? Is this important—or just urgent?’

For example, it may not be “urgent” for me to exercise, but boy, is it important. It might not be “urgent” for me to work on my doctoral thesis, but from a long-term fortune and fulfillment perspective, few things are more important (hmm, ears burning …)

Here’s some powerful advice via my buddy Mark Fritz: “Procrastination means giving up what you want most for what you want now.” Constantly tending to so-called urgent tasks is one way of putting off truly important work.

So here’s my resolution for 2008: Every time I crack open my e-mail program or tackle some other “urgent” job, I’ll try to pause and pose the four-letter question to myself: “WIRU?”

See “How to Set Priorities” and “Risk of Happiness”

In less than 48 hours it will be the New Year, which means making resolutions, turning a new leaf, cleaning the slate, and starting anew. Prioritizing becomes a matter of great importance for most of us at the outset of each year. But do you ever have trouble deciding what things to do first, and why?

Setting priorities—a cornerstone of achieving prosperity—was a struggle for me until I came up with a new policy a few years ago.

So here, revealed in print—or pixels—for the first time anywhere, is Clark’s Rule About Priorities (CRAP™): Do First What You Want to Do Least.

The logic is simple: What we most dread doing is usually the thing we should do soonest.

What do you want to do least today? Apologize to your spouse? Write that report? Make an appointment for that colonoscopy? Well, do it first thing in the morning, and watch your productivity soar.

Clark’s Rule About Priorities applies equally to personal, professional, and spiritual activity.

For example, about five years ago it became apparent that I needed to start exercising regularly if I wanted to maintain my health. I pushed through the dread and started going to a gym, but that meant time-consuming mid-day commutes, two showers on gym days—and spending money.

About a year later, I realized that exercise, as the most crucial foundation of health besides diet, was, quite literally, the most important thing for me to do each day. So I switched to a daily, at-home regimen, instead of three-times-a-week at the gym. Do First What You Want to Do Least.

Now I exercise first thing each weekday morning, in the comfort of home, while watching the news. It costs nothing, no travel’s needed, and I take only one shower a day. And the habit’s so ingrained now that I no longer dread it—though I love taking weekends off from my regimen.

I still struggle to apply Clark’s Rule About Priorities to work, but I’m improving. So it’s back to my dissertation research, just as soon as I finish this post …

Say, that gives me an idea for a new post—about procrastination …

Happy New Year!

What is prosperity? Is it a measure of the personal freedom your finances have won you? Freedom to work when you want, where you want—or to not work at all? And if so, how much money is enough?

Many books on personal finance say you’ve “made it”—achieved financial independence—when income from your assets is sufficient to support you without working. In other words, if interest, stock dividends, rental property income, and other so-called passive income covers all your expenditures each month (plus taxes, remember), you’ve made it.

That’s a reasonable definition, and one that allows each of us to define “financial independence” according to our unique income needs. A family with a big mortgage, two cars, and children approaching college age needs far more than a childless couple with modest housing requirements.

So the first step is to get a good grasp on how much you need to survive—and thrive—each month. Let’s call this your “Prosperity Point.”

Here’s an example. By tracking actual expenditures—Step One on the Prosperity Path—let’s say you determine that the Prosperity Point for your family is $5,000 per month. In other words, you’ll need assets that throw off $5,000 in cash each month, or $60,000 per year, in order to be financially independent.

Now let’s figure out the assets needed to produce $60,000 per year in income. It’s an easy calculation, but let’s assume you dislike risk as much as I do, and agree to keep the money in essentially risk-free financial instruments: money market funds and CDs.

Such risk-free assets pay about 5% yearly at the moment. Therefore you need $60,000 divided by 0.05 (60,000/.05), or $1.2 million in order to achieve a passive monthly income of $5,000. Let’s call the $1.2 million figure your “Prosperity Pillow”:

In other words, you’ll need to accumulate 20 times your Prosperity Point to reach financial independence. If you achieved a 10% rate of return, you’d need only ten times your Prosperity Point, or $600,000:

But peace of mind is a big part of prosperity, so let’s stick with risk-free assets.

Note I don’t use the term “net worth” when describing the Prosperity Pillow because net worth includes your primary residence (less any outstanding loans). But you must exclude the value of your primary residence when calculating assets needed to achieve your Prosperity Pillow, because your home costs you money, it doesn’t produce cash (see Why Your Home is a Liability). And it goes without saying you won’t count cars, boats, tools, jet skis, musical instruments, and other such stuff. Remember: Assets pay you money.

Imagine now that you’ve achieved your Prosperity Pillow of $1.2 million, excluding your primary residence, and every month $5,000 comes flying into your bank account, without a minute of effort on your part. A good feeling, to be sure! But wait a second. Last time I checked, the IRS taxed interest and other short-term passive income just like ordinary (active) income, at an adjusted rate of somewhere around 14% for someone earning $60,000. If you pay state income taxes as well, you might see 20% or more of your monthly $5,000 eaten up in taxes. So your actual take-home earnings would be $4,000 rather than $5,000. Ulp.

Taxes. It’s a nasty word, but I said it. Can your family live on $4,000 a month? Hmm. Maybe $1.2 million isn’t quite soft enough a Pillow.

Now consider this. You might get by on $4,000 monthly now, but how about five years from now? Or ten? Prices are going up. If your Pillow just throws off cash without increasing, how will it keep up with inflation?

Many families living not-particularly-extravagant lifestyles have monthly cash needs of $6,000, $7,000, or more. Imagine the kind of Pillows they need to become “financially independent.”

Here’s my point: Focusing on the Pillow alone is daunting. Rather than defining “enough” in terms of pure financial independence, we’ll do better to create a more holistic definition—one that considers not only income, but spending, work, retirement, and other lifestyle choices.

In short, as we go forward, we’ll seek to define true prosperity, rather than simply asking, “how much is enough?”

See also: “Why Your Home is a Liability” and “A Gift From My Father”