The Danish Way Of Wealth

Since 2012, the Sustainable Development Solutions Network (SDSN) has undertaken an annual comparative study of happiness within nations. The study measures …

Since 2012, the Sustainable Development Solutions Network (SDSN) has undertaken an annual comparative study of happiness within nations. The study measures a host of variables factored into measuring happiness then publishes its results in something titled the World Happiness Report. Now, for anyone who may be about to raise their eyebrows and question whether the study is nothing more than a hippie dippy tie dyed waste of taxpayers money, check your impulse and have a look at some of the study’s purposes:

  • Mobilize global scientific and technological expertise to promote practical solutions for sustainable development, including implementation of the Sustainable Development Goals (SDGs) and the Paris Climate Agreement.
  • Accelerate joint learning and promote integrated approaches that address the interconnected economic, social, and environmental challenges confronting the world.
  • Enable a large number of leaders from all regions and diverse backgrounds to participate in the development of the network.

Seemingly laudable goals? Sure seems so. And all the better for putting forth ideals recognizing that we live in an inter-connected world, a world where the force of an Australian sneeze may reverberate in Chile; a Chinese smile may ricochet in Iceland.

 

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Building Social Trust, Not Walls

Still, what do these stated goals have to do with Happiness?

To answer this question, I’ll pass the megaphone over to Jeff Sachs, co-editor of the study and director of the Earth Institute at Columbia University.

Jeff says that world leaders need to understand what matters most to people if they are to have any hope of creating sound policy. He goes on to say that,

“Happiness is a result of creating strong social foundations. It’s time to build social trust and healthy lives, not [arm our self with] guns or [build] walls.”

What Sachs is getting at is the idea that trusting each other, our elected leaders, and institutions, is essential for an individual and a society to establish a firmly anchored sense of well being. And the bonus about feeling groovy, about feeling in soulful harmony with our self? Aside from the genuinely positive vibrations we share with fellow humans and other creatures, we’re more productive, more peaceful, more compassionate, earn more, and live longer.

And this is how happiness connects to the study’s purposes: governments that truly wish to build an inclusive society, one that fosters social cohesion and sustainable economic development, first need a baseline assessment of their people’s current state of well being. Then comes the task of figuring out what’s working, what’s not working , and implementing change to make us better.

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Is Denmark Utopia?

Each year since the first World Happiness Report was issued, Denmark has ranked at or near the top. Why? What does a country that is home to less than six million people know that others don’t? A country where people prefer to stay inside for much of November through March owing to the cold, and pop umbrellas open for near 180 days of the year because of rain.

Ya, well, weather is a state of mind as far as Danes are concerned. I mean, we’re talking about a country that entertains a steady flow of foreign government representatives who are on a mission to find out what the heck it is that makes Danes so damn happy.

There’s no such rush to the USA, a country sitting at #14 on the happiness scale. Some argue that this relatively poor showing is a result of misguided political leaders who espouse misguided policies emphasizing economic growth above all else. The thinking among these leaders being that more money translates to a better, happier life. Really? Will they never learn?

Living in a monster house does not bring happiness. Driving a Mercedes does not nurture one’s soul. Having more money than one’s neighbour does not elevate self-worth or contribute to one’s value as a human being. Because here’s the thing: happiness is not driven by the bottom line. And this is where America (and some other countries) falls down; with an overriding emphasis on money, the economy, taxes.

Back to Jeff Sachs, he says,

“America’s crisis is, in short, a social crisis. Not an economic crisis.”

So what may the USA, and other countries (I’m not trying to pick here; every country has their pluses and minuses) learn from Denmark? First off, this Nordic country knows neither economic nor social crisis. Along with the other top 5 countries, they rank high for caring, freedom, generosity, honesty, health, income and good governance.  All reflective of a strong sense of community and understanding in the common good.

But you know what’s even better? You know what puts the Danes over the top? A little something known as HYGGE (pronounced ‘hoo-gah’ – see youtube video link here).

 

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HYGGE Is the Secret

‘Hygge’ is a Danish word. Though there’s no precise translation into English, here’s a few close approximations:

  • Cosiness of the soul
  • The art of creating intimacy
  • Cocoa by candlelight

Whichever definition you hang your hat on, Hygge is about an atmosphere, an experience. It’s about being with people we care for, people we love. It’s a feeling that we’re safe; that we may let our guard down; that we may engage in conversation about “big important” issues or silly nonsense; or that we may be silent in the company of others.

Of course, you could say that while Hygge sounds pleasant, the Danes have other reasons to be happy. Such as free health care, free education (from pre-school through university), subsidized childcare, job training and re-training, generous unemployment insurance (about $1900 USD/month after taxes), fuel subsidies and rent allowance for the elderly.

Yes, these social programs cost money. And to fund these programs, Denmark has the highest tax rates among European countries. Agh! Oh no! Taxes are evil! Or … are they? Is it not possible to find a compromise, a balance beneficial to both citizens and society at large, to the common good? Danish folks would say yes.

They say yes to a social system that has a burgeoning middle class, high taxes are acknowledged as a drag on economic growth but the welcome trade-off is a peaceful, caring society where no one, including vulnerable members of society, is left behind.

And this choice in favor of an expansive social system is made with awareness that collective wealth results in collective well being. In this regard, taxes are far from evil; rather, they’re perceived as an investment in society. They’re a purchase of quality of life. Because sharing and spreading wealth reduces risk, uncertainty and anxiety among citizens. And doing so nurtures happiness. And spreads the joy of Hygge!

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The Humility of Hygge

Oh, there’s so much more to say about Hygge, this word, this concept, this value, embraced by so many Danes, and contributing to one of the most successful societies we know.

Hygge is humble. Hygge is not rushing. Hygge is moderation. Hygge is watching leaves fall, baking cookies, sharing stories and laughter. Hygge is playing board games, swimming in the lake, dining on home cooked food. Hygge is saving money, making do with less, savoring simple pleasures, being grateful for what you have. Hygge is listening to birds sing, watching a child ride a bike or, better yet, riding a bike with the child. Hygge is the right atmosphere, degree of comfort and warmth, wanting to be engaged with people, caring for whom you are with. Hygge is real, balanced, down to earth.

In effect, Hygge is anti-bling, anti-consumption, anti-prestige not for ideological reasons but because it is not possible for money and entitlement to buy Hygge. In fact, if money is used in an attempt to improve Hygge, well, this act in itself is so anti-Hygge that the Hygge factor will be reduced or eliminated altogether!

What else?

Hygge is Candles. The Danes burn more candles by far than any other country. Candles, you see, create the right atmosphere.

Hygge is Presence. In this sense, Hygge is Buddha-like in emphasizing that we Be Here Now; welcome each and every moment.

Hygge is Simple Pleasures. Coffee, cake, cookies, chocolate. Whatever relaxes your mind and warms your heart.

Hygge is Equality. ‘WE’ takes priority over ‘ME’.

Hygge is Gratitude. Enjoy what you have; do not envy others.

Hygge is Harmony. Life is not a competition. We like you for you, not because of your achievements.

Hygge is Comfort. Get cozy. Relax. Take a break. Sip tea.

Hygge is Compromise and Truce. No drama. Let’s be kind and get along.

Hygge is Togetherness. Building relationships.

Hygge is Shelter. Your home, your country, this world, is your tribe. A place of peace and security.

If nothing else, my hope is that by reading the word ‘Hygge’ so many times that you now feel somewhat comfortable enunciating the word out loud (H00-gah). May you embrace Hygge!

ps. thanks to Meik Wiking, chief executive officer of the Happiness Research Institute in Copenhagen, for writing The Little Book of Hygge: The Danish Way To Live Well. A warm, inviting read that inspired this post, inspired me to continue learning more about Danish society, and to welcome more Hygge into my life.

 

MEIK WIKING jacket.jpg
MEIK WIKING jacket.jpg

 

 

Why We Give

Yesterday, a homeless man knocked on our front door asking for work. ‘Anything you can offer’, he gently said. I thought for a moment then recalled that there were …

Yesterday, a homeless man knocked on our front door asking for work. ‘Anything you can offer’, he gently said. I thought for a moment then recalled that there were sad looking flower beds in the yard that were crying out for attention. It was a job that never seemed to climb past the bottom of my things-to-do list, even though it wouldn’t take more than an hour or so.

Walking outside barefoot, I asked the man to follow me then showed him exactly what needed to be done.

“Sure, sure, that’s fine,” he said, “Any work at all is welcome.”

Not thinking, I asked, “ Do you have any gardening tools?” As soon as the words came out of my mouth, I gave my self an eye roll and head shake, wanting to take back the words. Gardening tools? Seriously? It was a hot summer day, the man was dressed in oversized long pants and a long sleeve shirt, sweating, uncomfortable, with no sun protective hat or sunglasses, and I ask him whether he happens to be carrying gardening tools? Oy.

“Nope. I don’t have anything but my two hands.”

So I found some gardening gloves, a trowel and several garbage bags. Before the man started working, he said he needed $31 in order to get room and board for a few days at the Tortoise, a homeless shelter. He didn’t ask to be paid $31, didn’t imply that I should pay him this amount or in any way play on my sympathy. Straight up, he simply asked for a fair wage.

He finished the work in less than an hour. I thanked him and gave him $50. Yes, that’s a fair bit for less than sixty minutes of gardening work. And I was fine with it. Because here was a human being who was down on his luck, who wasn’t asking to take something for nothing, and who made me reflect upon, and be thankful for, my good fortune. As far as I’m concerned, I got a heck of a bargain.

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Why We Give

Many of us give to create meaningful opportunities for others, to support individuals and causes that are close to our heart.

Equally important, giving leads us to reflect upon how fortunate we are to be able to support those in need. And it has a way of prompting us to be grateful for what we have, not just for our net worth but as importantly if not moreso, our health, friends and family.

As for giving to the man who knocked on my door, this was spur of the moment, not planned out giving and I didn’t receive a tax receipt that would go toward reducing my income taxes. The way I see it, that’s all good. Strict financial prudence need not dictate all of our actions. Sometimes, it’s good for the soul to hang loose (ya, this is the amusing thing, for financial types –- ahem, yours truly — foregoing the opportunity for a tax deduction is considered hanging loose).

And I engage in this type of wild, liberated giving now and then, whenever the opportunity presents and the mood strikes. This is in addition to planned giving. Meaning, each year, my wife and I allocate a certain dollar figure to charitable giving, decide which charitable organizations we want to support, then divvy up the funds to each organization as we see fit.

No one is telling us (and if they are, we’re respectfully listening then doing things our way) to give or how much to give because these are entirely personal decisions. And we don’t feel guilty for giving to one organization but not another, for telling charity volunteers who knock on our door requesting donations that we’re tapped out, that we’ve already determined who is on our Giving List and they didn’t make the cut this time around.

Because guilt should never drive decision-making. Rather, we choose for decision-making to be love centred. For the act of Giving to be a constructive act, something we feel good and right about, knowing that we’re doing what we can, doing our bit, to contribute to life.

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How Is Charitable Giving Different?

It goes without saying that you may give whatever you want to anyone, including charities. That said, if you want the tax benefit of giving, then know that there are certain rules around who to give to, what to give, and how much.

For tax purposes, ‘Charitable Giving’ is a defined term. It refers to making a voluntary gift to a registered charity or other government qualified organization. These gifts entitle you to a tax credit that vary depending on where you live. Only a charitable organization may issue official receipts that may be used for tax purposes.

As for whether or not a particular organization is a registered charity or otherwise qualified, for Americans, see the following IRS website:

https://www.irs.gov/charities-non-profits/organizations-eligible-to-receive-tax-deductible-charitable-contributions.

And Canadians, check out this CRA website:

https://www.canada.ca/en/services/taxes/charities.html


What To Consider Before Making a Charitable Gift

When thinking about how much to give and to whom, consider the following:

  • Importance. Start by thinking about what is important to you. In this regard, take time to consider what issues you care about and why you would offer support. Because giving is a completely personal issue, there is no right or wrong answer; we simply follow our heart.
  • Influence. Next, ask your self what kind of gift would be most effective in helping the charitable organization? What kind of gift would truly make a difference? And when should the gift be made (i.e., today, at a future time while you are living, or by way of your will)?

Often, gifts take the form of money. That said, gifts may also be made in other forms including: furniture, clothing, stocks, bonds, mutual funds, real estate, and other assets.

  • Gift Portfolio. Finally, consider how much you may afford to give. And once you’ve decided which charity(s) to include on your giving list, then figure out how much money, other assets and/or time to give to each charity.

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Giving Pledge

In 2010, 40 billionaires led by Bill and Melinda Gates and Warren Buffett, joined together in a commitment to give more than half of their wealth away.  They called the commitment, The Giving Pledge. And it remains an open invitation to billionaires to publicly dedicate the majority of their wealth to philanthropy.

The Value of Generosity espoused by these 40 people inspired others. And today, more than 170 wealthy people representing 21 countries, have signed on to the pledge. In effect, these additional signatories are saying, ‘we share your values when it comes to helping others.’

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We Give Because We Care

And that’s what this is all about. Values. And though the Giving Pledge is specific to billionaires, to the top 0.1% on the net worth chart, sharing productive values is open to everyone. How much you have is not the point. How much you give is not the point. Rather, it’s the act of giving, the mindset of sharing and caring, that matters.

Because in this simple act of giving, we experience a sense of purpose and well-being. In turn, these feelings deepen our sense of compassion. And acting with compassion, this is part of who we are, part of being human. When we stay true to who we are, we benefit our self, others less fortunate than us, and society as a whole.

 

 

The Stock Market’s Dark Side

Elon Musk, founder and CEO of Tesla Inc. (NASDAQ:TSLA), recently did something highly unusual: he disparaged his company. Specifically, he knocked …

Elon Musk, founder and CEO of Tesla Inc. (NASDAQ:TSLA), recently did something highly unusual: he disparaged his company. Specifically, he knocked Tesla’s share price, saying it is “higher than we deserve.” Whether true or not, to publicly state that your company is not worth its current trading value is not only rare, it’s virtually unheard of. It’s just not what a CEO does.

Because in addition to assuming responsibility for day to day operations, a CEO also acts as a company’s primary media pitchperson, head cheerleader, numero uno fan, selling the company’s virtues to the public and financial analysts. And always with a positive spin. Unless you’re a rare breed known as Musk, so it seems.


Sales, Man, That’s What Corporate Life Is All About

I’m not here to riff on corporations as evil entities myopically bent on achieving profit and maximizing shareholder value, all the while paying little heed to contributing to the social good and society at large. To varying degrees, some companies adhere to a social conscience, others don’t. For better or worse, such is the diverse nature of organizations, and humanity.

Still, regardless of how much or little a for-profit company gives back to its employees, communities, and our world, they all share something similar: they’re in the sales business. Whether selling goods or services, companies need sales to generate revenue to turn a profit to stay in business. And selling involves promotion, marketing, and advertising. And if you have a media friendly CEO, well then, all the better for driving sales, all the better for business because that CEO’s favorable image connects with consumers, persuading consumers to use, watch, listen to, or wear a company’s product.

Think Steve Jobs and Apple. Media loved writing about Steve, and Steve knew how to play the media, to manufacture himself as a near mythical legend, and position Apple as not only best in class but in a class of its own worthy of sticker prices considerably higher than rivals products. This sort of image making, however close or far removed from reality, impacts consumers buying habits and investors desire to own the stock, and consequently bid up share price.

Now, I’m not saying that Steve wasn’t a genius visionary or that Apple doesn’t make exceptional products. Instead, what I am saying is that you can have the most excellent product or service on the planet but if relatively few people know about it, and sales lag, then the company will soon fade away.

Apple doesn’t have that problem. They remain as extraordinary at the sales game as they are at manufacturing. And to this day, their image among consumers remains intact, best in class. As does their market value, which is higher than any other company on this planet, by far.


Promotion, Man, That’s What The Stock Game Is All About

Whether you’re a stock market behemoth like Apple or Google (NASDAQ:GOOGL), or a teeny tiny penny stock, in one way or another, you’re promoting your stock, i.e., you’re selling the merits of owning your stock because you want more buyers than sellers; this is how share price marches upward.

The typical medium in which behemoths promote their stock is mainstream media. Be it an interview with the CEO, a quote, a prediction as to what comes next in the stock market or economy, an annual meeting turned Woodstock for Capitalists (i.e., Berkshire Hathaway’s (NYSE:BRK.A) annual shareholders meeting), or a product unveiling (i.e., Apple’s annual Worldwide Developer’s Conference).

And while the CEO may firmly, honestly, believe in what they are promoting, we the consumer would be wise to interpret their words with a grain or two of salt. Because they’re just words. In the investing game, words are not enough. Not even close.

Numbers, not words, tell the story. On a basic level: Revenue, Expenses, Profit, these matter more, so much more, than words. I mean, words can be beautiful and flowery and convincing, and we’re all susceptible to oratory charm. But it’s important to see words for what they are, and in the financial world, words decidedly take a back seat to numbers.

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When The Numbers Don’t Add Up, Run!

Penny stocks are a different animal.

Technically, a penny stock is defined as any stock that trades for less than $5 / share. But for our purposes, a penny stock is one that trades for less $5 / share AND is not listed on a major stock exchange AND is a small company AND is often illiquid (i.e., relatively few shares are traded each day, making it difficult to buy and sell).

Now here’s the dark side of penny stocks: scammers LOVE them! And they can make a small fortune off people who don’t know any better, people who chase pots of gold and ends of rainbows, people who lay their bet on spam email promoting the latest and greatest 10 cent stock promising to power through to $10 or $50.

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The typical penny stock company touted by scammers? Little to no revenue, little to no shares traded daily, little to no business prospects.

And the angle, the hitch, the hook? The company says (words, words, words) that it’s changing its business model and is now in a HOT SPACE. For example, if the price of gold takes off, the company will morph into a gold mining company. If biotech is hot, you guessed it, the company reinvents as a biotech company.

Then, if it’s a big time scammer, they pay a promoter(s) serious coin (we’re talking hundreds of thousands to millions of dollars) to scream about the INCREDIBLE, UNBELIEVABLE, FANTASTIC investment opportunity presented by this itsy bitsy shell of a company. And the promoter(s) sends out millions of emails, many press releases, and arranges for inclusion in hundreds of investment newsletters and stock chat rooms. This is the modern version of a boiler room (i.e., refers to a bunch of guys [rare for women to engage in this activity] hard selling stocks to random people over the phone – well depicted in the movie, Wolf of Wall Street).

Once the word is out, once enough people have been suckered into becoming buyers of this worthless stock, the scammers start selling. Because, you see, before all of the promotional activity was set up, the scammers arranged for most, maybe all, of the issued stock to be in their name or, if sophisticated, the name of a faceless corporation. The faceless corporation gives them cover from regulators who have rules regarding the boundaries of promotional activity.

And if the CEO of Penny Stock Corp. says he doesn’t know who is behind the promotion, and the regulators cannot identify the promoter, then Penny Stock Corp. CEO has no worries. And he dumps his stock to pie in the sky investors who bid up the price. Until, that is, buying momentum halts, selling ensues, and stock price craters in a matter of hours or days.


The Case of Dry Ships

But you need a real life example. So let’s briefly describe what happened recently with a company called DryShips Inc. (for the full story, check out the detailed accounting here).

In November, 2016, DryShips disclosed a huge loss and suspended debt payments to preserve liquidity. Shortly after, the company, with a market value of close to $5 million, didn’t just catch fire, it was a veritable inferno! In just four days, the stock price leapt more than 1500%!

On November 8, its stock was priced at $5107, with a grand total of 38 shares being traded. Two days later, price jumped to $13,328 with more than 5,000 shares traded. Come November 15, price it $81,760 with more than 9,000 shares traded. By November 29, price had tumbled to $4849.

The journalist who wrote the article referenced above ends his story by referring to the “stock’s mysterious rally.” Well, other than being able to prove who was pulling the scam strings, there’s no mystery. The stock blasted higher owing to deceitful manipulation and nefarious promotional activity. Because absolutely nothing related to the company’s business activity justified a massive move in volume and price. And at the end of the day, guess who loses? Right, Joe/Jane Investor who were suckered into buying worthless paper.

As an investor, you do not want to get anywhere near this kind of stock. So please do your best to ignore any spam investing emails, ignore talk of a stock being “the next Facebook”, ignore any and all penny stocks because buying penny stocks is akin to gambling, not investing, and nine and half times out of ten, you will not exit your stake a happy camper.

The Money Journey

This blog is about money. Investing money, saving money, spending money. And happiness. – Happiness?

This blog is about money. Investing money, saving money, spending money. And happiness.

Happiness?

I like to think of happiness as the pleasant payoff that comes about from experiencing emotional, psychological, and spiritual contentment. I’ll talk more about this shortly.

For now, it’s worth your while to toss around the idea that, more than net worth, it is our thoughts, perspective, and emotional connection to money that tie into our balance of mind, and set the stage for happiness. Continue reading “The Money Journey”