Millennials don’t save? Of course not. Neither would you.

Millennials don’t save? Of course not. Neither would you.

Why are millennials broke? Systems. Not choices.

I recently read an online discussion in which Baby Boomers and Gen Xers resoundingly chastised millennials who don’t save enough for retirement. It seems that instead, millennials are struggling with student debt. The crowd was quick to dismiss the problem as irresponsible millennials spending too much for college degrees that pay too little (e.g. Art History).

Really? Millennials (raised by Boomers and Gen Xers, by the way) are an entire generation of people who simply made bad college choices at historically unprecedented levels? Get real. Remember who chooses to attend college and decide on a major: An 18-year-old with no real world experience, who probably knows nothing about modeling lifetime financial implications of their decisions. Expecting them to be able to choose well is naive. Indeed, many Baby Boomers and Gen Xers made really bad choices. But when they were college age, the system was different. A bad choice, financially, wouldn’t—and didn’t—cripple you for life.

The fundamental economics of education and saving have changed.

That was Then

When Gen Xers were growing up, a college education cost a total of about a year and a half’s salary. MIT four-year tuition was $40,000 before books and expenses. A graduating student could get a job that paid a salary in the $30,000 range.

Furthermore, students could get jobs that paid enough to make a serious dent in student expenses. On-campus student jobs paid about $10, and a 1/4-time job would bring in $5,000 a year. That’s enough to pay half of the tuition bill. Today, student jobs still pay about $10. Needless to say, it won’t be covering half of the tuition bill.

To make up the difference, student loans fill the gap. Student loan interest rates were comparable to rates offered in savings accounts, so once a graduate started saving money, their asset base could compound at about the same rate as their student loans, so their net worth could be at least somewhat stable.

Starting salaries generally paid a living wage (enough for rent, food, utilities, a bit of entertainment, and savings), without the need for multiple jobs. And a college degree was a genuine ticket to a better-than-average job.

This is Now

Today, a college education costs closer to 4 years’ starting salary. MIT tuition is about $184,000.

Debt loads can’t be easily reduced by student jobs. No jobs available to students can make much of a dent in the $46,000/year tuition. Student jobs still pay in the $10-$12/hour range.

A starting salary of, say, $50,000 (higher than many are likely to get) isn’t actually enough to live in many cities while paying down student debt. While saying “move somewhere cheap” sounds attractive, the kind of jobs that make use of a college education are often located in big cities that aren’t that cheap.

Student loan interest rates are much higher than you can get in savings accounts, they aren’t dischargeable via bankruptcy. And the college degree that cost all this money is simply needed to get a job at all. Except from a certain class of top-tier schools, it isn’t a ticket to a comparatively higher salary.

Our Choices are as Bad as Millennials’

Everything I’ve read about Baby Boomers and Gen Xers is that we suck at saving money. We may have been living nice lifestyles, but we’re anything but role models when it comes to good lifetime financial decisions. But unlike millennials, we lived in a time where circumstances gave us decent lifestyles despite our bad choices. And our bad choices will, again, fall on the millennials. Our retirement years will make their middle-age a living hell, as they struggle to deal with an aging population that saved nothing and expects to be supported.

Millennials probably aren’t better at long-term financial planning than the rest of us, but they likely aren’t any worse. They were born into a set of circumstances, however, where the road to success that worked for us—a college education—had changed. That road, itself, costs more, benefits less, and creates circumstances that would be just as devastating for any Gen Xer or Baby Boomer.

Focus on what you want, are good at, and is needed. Can you help?

Last week, I wrote about starting the year with a strategic plan that looks both outward and inward. And this year, behind the scenes, my strategy has had some big changes.

How have you chosen your direction for this phase of your career? The best place to put your professional energies can be found at the intersection of:

  • What you’re good at
  • What you enjoy
  • What people need

For years, executive coaching brought these together for me. But there’s been a shift. There’s a fourth element in the mix:

  • What can scale

If you’ve got it, grow it!

Sometimes what you’ve got is enough. For years, one-on-one coaching was completely rewarding. But as my audience has grown, I believe that there’s a chance to be a bigger force for good in the world. So why not go for it?

In 2017, you’ll find my emphasis shifting from one-on-one coaching to online and offline courses, workshops, and experiences. The curriculum I helped develop for Harvard Business School touched tens of thousands of people. My goal by 2018 is to be developing and delivering online and offline courses, workshops, and experiences that help tens of thousands of people harness the tools of business in service of creating their extraordinary lives.

I need your help

Are you a helpful person? The missing puzzle piece is knowing what people need. That means you! So we can collaborate on meeting your needs. Would you mind giving me some quick advice, by answering three quick questions to help shape the courses being developed?

It will take about a minute or so. Answering the questions will be fun and exciting! And maybe, just maybe, answering will give you the body of a 20-year-old supermodel, make you win the lottery, and turn every piece of cardboard in your entire recycling bin into solid gold!!

(Truly, I said “maybe,” but do you really want to chance missing out?)

Click here to give some quick advice on what I should do in 2017.

Thanks very much!!

Have a great 2017!

Punt resolutions; use strategy, instead!

It’s January, and we all know what that means: time to set New Years resolutions that we’re going to break! The main things resolutions are good for is causing the gym to get way too crowded for the first six weeks of the year. You have a tool at your finger tips that will do far more for you than simply setting resolutions.

Skip your resolutions and set strategy, instead.

A strategy is a 50,000-foot view of your life or business. A good strategic plan gives you a roadmap for where to put your time and effort this year. It tells you what to say “yes” to and what to say “no” to.

As you know from my article on how vision and mission relate to strategy, your strategy for a year answers the question, “How can we further the company vision, given the realities of the markets, customers, and resources under our control right now?” Strategy is how vision plays out in today’s real world context.

But when you’re setting your strategy, make sure to approach it from both the outside and the inside.

Look Outside to Set Strategy

Your strategy depends on what’s going on outside your company walls. You need to develop a plan that makes you more desirable to customers than any of your competitors. That means knowing:

  • How do your customers think of you? What product category do they put you in? (Don’t assume you know. A yacht isn’t necessarily a vehicle. Rather, it may be a status symbol.)
  • Who else is in that product category? If you’re a yacht, are you competing against Toyota and JetBlue (transportation) or are you competing against Jetstream and Sotheby’s (status symbols)?
  • What advantage do you have over your competitors?
  • How can you best communicate that advantage to the market?
  • Who has the power in your ecosystem, and how can you increase your power?

One of my favorite books on external strategy is Co-opetition by Adam Brandenburger and Barry Nalebuff. If you’ve ever heard of Michael Porter’s “Five Forces,” Co-opetition goes one step further and deepens the model. Just the way Brandenburger and Nalebuff define competitive and complementary relationships is worth the cost of the book.

Strategy Looks Inside

Looking outside is only half of the equation. You also need to look inside when you formulate your strategy. If strategy is vision made real now, part of “now” is the resources you have under your control. You need to take stock of your resources and decide which resources will form the foundation of your strategy.

When you make ultra-yachts, two of your assets are your customer list (oodles and oodles of rich people), and your yacht design capabilities. If you base your strategy off your customer list, you will expand into other products and services that your current customers might want. Like platinum dinner place settings. If, however, you base your strategy off your design capabilities, you might instead expand into other kinds of yachts, or other sea-faring vessels.

My favorite book on internal strategy is Top Management Strategy by Tregoe et al. The book is 30 years old, but is pretty much just as relevant today as when it was written.

Treat yourself to a 3-martini lunch

If you don’t have a formal strategy session planned, then at least take a long lunch. And over lunch, review the vision/mission for your venture. Why are you in the game in the first place? Then ask yourself how that gets expressed in the world of 2017. Review your external factors—competitors, customers, suppliers, and so on. Review your internal resources, and decide which you plan to base your strategy on.

Then go for it. Give shape to your plans for the next year. Make sure to build in time to review and course correct, and get your year off to a good start. A New Years resolution might only last a couple of weeks, but a good strategy will support you for a year.

Social media and the deliberate life: is divorce in the cards?

Social media and the deliberate life: is divorce in the cards?

There are two ways to live your life: you can drive it, or be driven. Today, I’m not talking about driving your life in a grand, spiritual sense, but in a micro-sense.

You can never replace time. Once it’s gone, it’s gone. You can never get it back. You have a limited supply (though with no fuel gauge, you don’t know how much you have left. And in every waking second, you get to choose your actions in that moment.

Friday was a passion day! Someone was wrong on the internet, and it was my Higher Purpose to make sure they knew it. Six hundred words into commenting on their status update, it hit me: I waste an unbelievable amount of time on Facebook. I log in 3-5 times a day, sometimes for as much as 20 minutes at time. Let’s be very optimistic and assume that it’s only 5 times a day, 6 minutes each time. That’s 30 minutes a day, or using the 3/30 rule, three weeks a year. On Facebook. And that’s being very optimistic.

Technology is making us reactive, rather than deliberative

Now make no mistake: Facebook is engineered quite deliberately to be addictive. If someone were to engineer a physical substance to be that addictive, we would outlaw the substance and throw them in jail. As it is, Facebook being a Silicon Valley success story, we celebrate it instead. But Facebook, Twitter, Snapchat, iPhones, notifications—these have trained us to react rather than deliberate. And then, rather than living our own lives, we just become random Dopamine-driven reaction machines.

Where is life getting sacrificed

Many years ago, I wrote a lot! My article ideas file has about 300 ideas waiting to be turned into articles. It hasn’t been touched since Facebook came along. My free writing time has vanished into status updates, cat picture comments, and pointless political arguments that aren’t going to convince anyone of anything.

The toxic 2016 election discussions finally got to me this evening. My friend Tim has changed my Facebook password for me, and I’m going without until after the election is over. But I’m not abandoning writing. The time that would have gone into the Book of Face is now going to go into writing articles longer than 140 characters.

I’m very curious to experience the result. It may well be that my ideas begin to become articles. Perhaps I’ll try rock climbing. Or pursuing inventing. Or take a class. Or binge-watch Black Mirror. Whatever the decision, it will be deliberate, not reactive.

It’s your turn

  1. Choose what to stop. Where are you spending your time out of habit or addiction, yet getting little joy from it? Does your time on social media give you enough joy to warrant the time? Are there hobbies that you’ve outgrown? Friends who have diverged? TV shows that just fill time?

    Eliminate one. Just for a few weeks.

  2. Start something better. Replace it with something that brings you joy, that moves your life forward. Maybe something old that would bring you joy to revisit. Or something new you’ve wanted to do but never gotten around to.

You do your experiment. I’ll do mine. And in a couple of weeks, let’s compare notes. We only have a limited amount of time on this planet, and it’s up to us to use it in ways that make our life somewhere we want to be.

Good luck!

Mistakes Matter, So Make More of Them

I’ve been doing a series of coaching calls with a wide range of successful people, to learn what’s holding them back in life. One of the most common fears: the fear of making mistakes. And it’s no wonder…

It’s election time. And political discussions tell us that anyone who makes a mistake should be shunned for life, barred from public office, and labeled a “flip-flopper” (especially if they change their mind as a result of learning from their mistake). Success literature, however, tells us that we should learn to be comfortable with failure and make mistakes! One of my most accomplished business school professors once said: if you’re not making enough mistakes, you’re not taking enough risks. How about you? Do you know how to make the most of your mistakes?

If you’re not making enough mistakes, you’re not taking enough risks.

Bad Outcomes Don’t Necessarily Mean Mistakes

Our school system trains us for decades that not getting the right answer means we were wrongand somehow didn’t work hard enough. Once we get into the real world, we bring that mindset along with us. If we don’t get the results we want, we assume we made a mistake.

This isn’t necessarily so. Here’s a thought experiment to understand why. Imagine you have two quarters. One is perfectly fair. It has 50%/50% odds of flipping heads or tails. The other is weighted. It has a 60% chance of flipping heads.

We have two Coin Operators, whose job is to flip heads. They’re allowed to choose either coin to flip.

Peyton, Coin Operator #1, chooses to flip the 50/50 coin and gets HEADS.
Harley, Coin Operator #2 chooses to flip the 60/40 coin and gets TAILS.

Who made the mistake? If we look at the outcomes, it appears that Harley made the mistake. But before we know the outcome, we would favor Haley’s decision to choose the coin that is weighted towards heads. Haley pursued the outcome using the right process, even though it was the wrong outcome.

“Stuff” Happens

I hear you cry, “But Harley made the right choice! The outcome should have been heads!” I agree! We really want to believe that our actions will give us the results we want. The real world, however, is sadistic: sometimes things work, and sometimes they don’t. We have a name for this. We call this luck.[1]

We can do the right thing, have bad luck, and get the wrong outcome. We can do the wrong thing, have good luck, and get the outcome we want.

This gives us a critical insight into the nature of mistakes: it isn’t the outcome that lets us know we’ve made a mistake; it’s what we did to get the outcome, our process, that lets us know if we made a mistake.

We’re not taught to think this way. We’re not given societal support to think this way. We don’t evaluate our political candidates this way. We don’t evaluate our employees this way.

But if you want to train yourself to get what you want in life, don’t measure mistakes by outcomes. Burn these definitions into your brain:

  • Success is using a high-quality process, regardless of outcome.
  • Mistakes are using a low-quality process, regardless of outcome.

Other People May Not Suck as Much as We Think

Deep down inside, we all love judging other people, especially politicians. But this new definition of mistakes means we need to be careful. If we judge them based on outcomes, we might end up deciding that the Peytons of the world are amazing and awesome and worthy of backrubs, while the Harleys of the world should eat rocks.

Unfortunately, however, unless we’re paying attention during the entire effort, we rarely know what process someone used to reach their outcome. That makes it harder to judge them accurately.

I took a mediation class, where I had the joy of mediating a 10-party negotiation between the heads of several organizations. Each organization cared about different things, with different priorities. The real estate developers wanted more land. The conservationists wanted land made off-limits to developers. The Mayor cared about economic development and tourist trade. The historical society cared about limiting changes to any part of the city.

The final agreement satisfied no one, but at least everyone was equally dissatisfied. To each organization, the outcome surely looked like a failure. But the representatives reached the best agreement they could, given the conflicting interests, the time available, and the fledgling abilities of the mediator.

It’s easy to say “my [politician, boss, representative] failed by not getting outcome I wanted.” If we really want competent leaders, however, we do better to judge the process they use. Do they take steps to understand the issues? Do they understand whose support is needed and build the necessary coalitions? Do they compromise where needed, and hold firm where needed?

When evaluating others, don’t judge their success and failure from their outcomes. Look as closely as possible at their process.

Getting the Most Out of Your Mistakes

Although mistakes are a sign that you’re really moving, stretching, and growing yourself, that doesn’t mean you want to make the same ones over and over. You want to learn as much as you possibly can each time things don’t work out.

When a mistake happens, hold an After Action Review. Take time to reflect explicitly on what worked, what didn’t, and why. Consider what happened on the ground—what worked out the way you expected, and what didn’t. What happened that you didn’t plan for, and what didn’t happen that you did plan for? Also consider what happened in your head. How did your a priori beliefs factor into what happened? Were your interpretations of what was going on correct? Where did you waste time paying too much attention to trivialities, and where did you miss opportunity by not paying enough attention?

Making mistakes, combined with a good after action review, helps you refine several important aspects of your future thinking.

Mistakes Refine Cause/Effect Thinking

We all have theories about what causes what. Some of our theories are pretty good. We believe that watering a plant will help it grow. We water the plant. It grows. Our cause/effect works, we’re happy, and the plant is happy (maybe even ecstatic, depending on how long it’s been since you last watered it).

Some of our theories really don’t work at all. “Step on a crack, break your mother’s back” isn’t orthopedically sound advice. If you want to protect mom’s back, teaching her proper posture and good form when lifting heavy boxes is a far better plan.

And some of our theories about cause and effect are sort of true. “Work hard and you’ll get ahead” certainly works great while we’re in school. But once we’re in the work world, the link between hard work and advancement is much more tenuous. In many cases, it doesn’t hold at all.

Avoidable mistakes often help us refine our notions of cause and effect. Many people believed that putting money into the stock market would result in a consistent, positive return on their money. In 2008, an entire generation discovered that cause/effect in stock investing is more subtle, and less dependable, than they thought. Next time a financial advisor happily informs them “invest in fund X and you’ll make 11% interest for 43 years,” they’ll (hopefully) know to refine their notion that giving money to a financial advisor automatically leads to a comfortable retirement.

Mistakes Refine Discrimination Abilities

We don’t just learn rules about cause and effect. We also learn how to discriminate between different situations. For example, with the label side down, a tube of toothpaste and a tube of athlete’s foot creme might look identical. One might simply look in the drawer, see a tube, squeeze it onto a toothbrush, and pop that brush right into their mouth and start brushing.

One might then discover one’s mistake. This will lead quickly to the learning that although tubes look the same face down, there are subtle clues as to which tube belongs in the mouth, and which tube belongs in the foot. For example, fine print on the back of the tube that says “for treatment of athlete’s foot and other topical fungal infections. Don’t eat it, you moron.”

That particular mistake is the one that got me to start paying close attention to the difference between tubes of cream.

Then there are my singing lessons, where my voice teacher forced me to listen to recordings of our lesson. When I was able to stop gritting my teeth, I began to develop the ability to distinguish between a tritone and a major fifth. It turns out that when you’re singing harmony, that distinction matters.

Mistakes help us refine the distinctions we make in the world.

Mistakes Refine Luck

And finally, mistakes help us understand the role of luck in what we’re trying to do. To return to our coin toss example, if we know Harley chose the 60/40 coin to flip, and it still came up tails, that tells us that luck played a factor in the outcome. While we would have prefered that Harley flip heads, we can be confident that the outcome of tails reflects luck, and not Harley’s abilities.

We might think mistakes are bad, but nothing could be further from the truth. Mistakes help us learn if we respond correctly. We should understand the roles luck and skill played in our outcome. Analyzing our process will tell us if we our good process gave a poor outcome, or whether we had a genuinely poor process. And we should refine our understanding of cause/effect, our discrimination abilities, and the role of luck. Our greatest advancement happens when we learn when things go wrong. To do anything else would be a mistake.


  1. If you’re a physicist, you call it a wave function. Or quantum mechanics. Or alternate universes, or something. But you’re not a physicist, so let’s stick with luck.  ↩