Daniel J. Siegel, MD is a contemporary psychiatrist and writer who specializes in interpersonal neurobiology. He is credited with creating the concept of the window of tolerance.
The window of tolerance is used to understand and describe normal brain/body reactions, especially following adversity or trauma. The concept states that we each have an optimal zone of arousal, called a window of tolerance. When a person is within the window of tolerance, they can regulate their nervous system in order to deal with the natural ups and downs of being a human being on earth. In the window of tolerance, one can reflect, think rationally and calmly make decisions without withdrawing or feeling overwhelmed.
Read MoreHere are six things I've learned since deciding to start a business six years ago. A lot has changed since then. One glaring change is that I don't even offer the service I originally offered. And as of late, I mostly feel like I'm a writer, but maybe that's the season my business and I are in or the fact that I've spent the last six months writing a book.
Read MoreHere's what I've learned about pricing over the years of running my own business and being the kind of person who thinks an awful lot about money.Sell value, not time.When you can sell the value you are creating for your customers; you can charge a lot more than if you could charge on time alone. Should an expert cobbler who has 45 years of shoe-repair experience charge less because he can fix your shoes faster and better than a rookie? Hell no. What is the value of continuing to use that pair of shoes you bought for $299 and plan to keep for the rest of your life?
Read MoreA cash flow projection, or cash flow forecast, is a way to illustrate how much cash you expect to receive and spend in your business. It's like a budget, but it does more than project expenses. It estimates how money flows in and out of your business.
Let's say you have a giant bathtub with some of goldfishes swimming around. Water is flowing in through multiple faucets, but it's also flowing out through numerous drains. Your goal is to make sure there is enough water in the bathtub for the fishes to survive. In this analogy, making sure the fishes have enough water is akin to making sure your business has enough cash to keep running. The water coming through the faucets is your business' income, and the water going out the drains are your business expenses.
It's essential to understand how cash flows in and out of your business for the understandable reason that your business needs cash to run. Goldfishes need water, and your business needs cash. Sure, some startups raise money in the form of investments and then lose cash and operate at a loss for years. But these companies must still eventually generate enough money to keep the business alive.
Read MoreOver the years, I've used my fair share of finance apps and tools, both for myself and clients. I tend to like specialized tools because that means they have to be really good at the thing they do. I look for great design when it comes to form, function, and keeping the end-user in mind. And every valuable tool has to be pretty easy to use. The tool should let you focus on your finances, not on trying to use the tool.
Here are the tools that meet all the criteria above and that I use to manage my money.
Read MoreWhat is lumpy cash flow? Lumpy cash flow is a way to describe how income and expenses can fluctuate each month. All companies will have some fluctuations, but in general, project-based or seasonal businesses tend to have the lumpiest cash flow.
There are a variety of different things you can do to smooth out lumpy cash flow. In this article, I'll walk you through some of them.
Let's go.
Read MoreIn a personal attempt to understand and process what the fuck is going on right now, here are some things I'm learning, questions I'm asking, and stuff I'm thinking about during this unique time in history.
Read More"We can tell our values by looking at our checkbook stubs."โ Gloria Steinem
My therapist told me that the emotion I was most challenged and uncomfortable with is the feeling of powerlessness. So when I began to understand myself through this lens, I could see how I've built a life around trying to reckon with that feeling - from my career choice, money is power after all, to my militantly structured daily routines. Maybe other people don't feel this struggle as acutely as I do. Maybe some people have always had a sense that they had power or access to power in the world. Maybe other people are afraid of their power. Afraid to acknowledge it and wield it because when you don't allow yourself to admit that you have power, you can be exempt from using it to help others.
Read MoreI'm struggling to recall a time I've felt this much uncertainty about the future. Over the last several weeks, I've fluctuated between crowding out the outside world and frantically googling answers to the questions that no one can answer.
It's one thing to have to sit with the uncertainty concerning life's big questions. But it's entirely frustrating to have to this uncertainty when it comes to questions that should have clear answers. Questions like: can individual Americans expect additional support from the government, or is that solely reserved for corporations? And, what are the rules for loan forgiveness under the Paycheck Protection Program? And, will these rules change in a few days or a few weeks?
Read MoreFriday night, May 15, 2020, the SBA issued it's Loan Forgiveness Application for businesses who received a Paycheck Protection Program Loan (PPP Loan), and I'm going to give it to you straight: it's ugly. Maybe I was naive to think it wouldn't be. When I looked at the guidelines, it made me feel like I was in math class, and I forgot that there would be an exam, and here it was sitting on my desk.
It made me feel that way because of how unsettling it is to know that a lot of these details were not published and available to businesses and borrowers on the outset. There is that feeling of not being prepared to do these calculations because we didn't have all the formulas. The other reason is because of the nuances of calculations.
Read MoreManaging your spending is fundamental to making any progress in your financial life. Way too many people write to me to tell me that they are struggling with this issue. The best way to get a grip on spending is to set up a system that prevents you from spending money that you should be saving or using for essentials.
This method takes no skill whatsoever. It's like bowling with bumpers in the gutters. Sure, you can still somehow screw it up at the very end of the lane, the ball can take a sharp left and only knock out a few pins, but youโll significantly reduce your chances of that with the bumpers.
Read MoreIf you formed an s-corp, it's probably not because it's something you've been dreaming of doing since you were a child. No kid has ever thought, "Gee, I can't wait to be a grown-up so I can form a corporate entity all my own!" That would be disturbing. You probably formed an s-corp because your accountant, attorney, or colleague told you it was a good idea and that you'd save a bunch of money on taxes, like maybe even thousands of dollars. Which seems like a great trade-off, right? Your accountant or attorney files some paperwork, you come up with a funny corporate name, you open up a bank account, and then you get to save money on taxes.
Read MoreSecond to running a small business, the most I've ever learned at work was my experience working at a boutique financial planning firm. I learned tons of ratios and formulas, got good at creating excel spreadsheets, and took multiple classes on insurance. Economists made visits to our office to give us their economic predictions and how that would impact the financial markets. So I learned how to distill and communicate that dense information into digestible pieces. I learned how to go about doing all the financially prudent things one ought to be doing; that alone is a wealth of knowledge that I'm forever grateful for stumbling into.
Read MoreHere are some more thoughts after a couple more weeks of conversations with clients with colleagues, messages, and emails from friends and strangers, observing the outside world from both big media platforms and personal social media accounts, a lot of reading, and a lot of doing nothing.
Read MoreIn 1930, John Maynard Keynes, who is considered the father of modern economics, wrote an essay titled, Economic Possibilities for Our Grandchildren. In that essay, he describes his prediction for what life would be like for future generations. He predicts that economic prosperity will be so great and abundant that our need to work across all of society will diminish. And since the vast majority of people will no longer need to "sell themselves for the means of life," he warns that humanity's next great challenge will be how to look forward to and not dread the "age of leisure."
While he predicts there will be some people who have an "intense, unsatisfied purposiveness" that causes them to continue to pursue wealth blindly, he goes on to imagine that the vast majority of society will have a shift in moral codes. That we will recognize that loving money as a possession, as opposed to as a means for the realities and enjoyments of life, will finally be collectively viewed in the harsh light of truth; that it is disgusting, morbid, semi-pathological and semi-criminal.
Read Moren a personal attempt to try to understand and process what the fuck is going on right now, here are some things I'm learning during this crisis. Some things I already knew, but the lens of a pandemic puts it into focus.
Read MoreImagine that your financial life is a sandcastle youโre building on the beach. You can learn what works for building it up, and in the good times, when the threats to your progress are manageable, you take for granted that itโs easier to build in those conditions. Now imagine the tide rising, the waves start coming in, getting closer and putting your sandcastle in danger of being damaged or worse, being washed away. In this analogy, the tide is a financial shock. The thing about the tides - and economic shocks - is they will always come in. Sometimes very quickly and suddenly as if out of the blue and other times, you can feel it gradually creeping in. Experiencing a financial shock is not a matter of if; itโs a matter of when and to what severity. Shocks can come in the form of global recessions, pandemics that freeze the economy, you lose your job, your kid getting very sick, a parent dying, the industry youโve worked in for decades slowly getting cannibalized by new technology or war.
Read MoreIn the financial world, we call things like the current pandemic a black swan event. A black swan is an unpredictable event with potentially severe consequences. The name comes from the rare sightings of black swans in nature. They exist, but seeing them is exceptional. So while the financial world has terms for these types of events, how we deal with them isn't always the same. Take the 2008 housing crisis. It was the result of a perfect storm of things: sub-prime mortgages, derivatives, hubris, and the lax, or often fraudulent practices within the real estate, mortgage and lending sectors. Finding a way out of the crisis was terrifying, but pointing to the causes gave us a sense of certainty.
I want to be clear: what we're experiencing today is very different from the housing crisis of 2008. Although there is one similarity: we didn't have a playbook for dealing with the crisis then, and it goes without saying, we don't have one today. While it's true, the world has experienced pandemics in the past, our modern economy, in all of its globally connected glory, has not experienced something of this scale. I have no idea what is to come in the approaching days, weeks, or months. I'll do my best to help you all understand our changing reality through the lens of money, finance, and economics.
Here are my thoughts on how to not freak out about your finances during a global pandemic.
Read MoreIf you haven't worked with a bookkeeper, it might be hard for you to imagine the benefits of working with one. Maybe this example will help: imagine a time you went to a restaurant with a large group of people - like twenty, or more. Everyone orders different things, and of course, when the bill comes, everyone in the party wants to split the bill according to what they consumed. If you're like me, this might sound like your own personal hell. But others might have a natural affinity for figuring out the best way to divide twelve bottles of wine unevenly shared with 27 people. That insane person, who willingly takes on this math problem, spots errors like getting charged for things that never came and can figure out how to divide tip and tax fairly would be the bookkeeper for the party.
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