Credit Union Savings Lottery Gains Momentum

On PBS Newshour last weekend, a savings concept was highlighted that takes advantage of people’s interest in playing the lottery. In the state of Washington, a credit union is seeing the benefit of this concept which is called “Save to Win.” Per a Seattle Times article this past March:

The ‘Save to Win’ plan promises monthly and annual drawings for cash prizes, with one entry ticket issued for each $25 deposit made into a 12-month certificate of deposit. ‘The whole idea is to entice people to save,’ says Lee Wajnor, vice president of marketing at O Bee Credit Union in Olympia, who lobbied legislators to get the program approved in 2010. ‘People are creatures of habit,” and the lure of a lottery may be enough to nudge them into saving,’ he says.”

The entire Seattle Times article can be found with the attached link: http://seattletimes.com/html/businesstechnology/2020671264_sundaybuzz31xml.html

The beauty of the plan is people cannot lose their money. They can only win with small stipends such as $50 awarded monthly or a larger prize at year-end, such as $5,000. Since each $25 increment increases your chance of winning, the monthly winners usually reinvest their small awards into their savings account.

Variations of this model are being done in other states with Michigan credit unions being the first. Michigan’s efforts started in 2009 and the credit unions now have 12,000 participants. Note that credit unions are the only group able to have a savings lottery at this time, as banks are restricted from so doing. Since copying is the sincerest form of flattery, this idea should spread.

The credit unions attest they are losing money on this concept today, but by getting people to not throw their money away on a state lottery, which is in essence a regressive tax with so little chance of winning, the credit unions are helping people help themselves. And, with some critical mass, the credit unions will break even. Yet, by helping people gain more financial stability, the credit unions will likely benefit from other banking services the participant may need.

As I write this, I remember one of our blogging friends telling the story about how she was driving a friend around and the other person asked “Can we stop by the convenience store, so I can buy a $5 lottery ticket?” The author of the story said “Here, give me the $5” and proceeded to throw it out the window. When her friend protested, the author said, “You accomplished the same goal and now you have a better story in throwing your money away.”

I applaud this savings lottery concept. It appeals to the hidden gambler in all of us, but also let’s people save their money and not throw it out the window. The winnings are not headlines worthy, but the chance of winning is much greater than in the state lottery and becomes even more so the more you save. And, winning $5,000 or $10,000 is nothing to sneeze at. Yet, even if you don’t win, you still gain as you have at least a $300 plus interest balance after one year. And, that is better than $300 blowing in the wind.

 

 

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Have you noticed food with a geographic name costs more?

In the US, we are about to embark on my favorite holiday, Thanksgiving. That is if the retailers who are opening stores early don’t ruin it. Thanksgiving is a time for family, friends and food. And, usually lots of it. Another nice feature is we usually honor those not with us anymore by breaking out the recipes of grandmothers, mothers, aunts and sisters (with some uncles and grandfathers thrown in). Since people come to my house for Thanksgiving, I am asked if we are going to make Big Mama’s dressing and no, that is not from “Cat on a Hot Tin Roof.”

One of things we don’t serve is the geographically named foods that you see in restaurants or high-end meat or fish markets. Whereas, Thanksgiving food is usually named for a person whose recipe it follows, restaurants and markets tend to name food by geography or style of feeding. Why? So, they can charge you more, of course.

Sir, would you like to try our Chilean Sea Bass or North Atlantic Salmon this evening? How about some Alaskan King Crab, North Carolina Trout or Deep Sea Scallops, instead? If you want some beef, we have some Kobe beef which is delicious or we have free-range chicken. The latter one has always puzzled me, as on the opposite end, you have an un-named chicken producer who gorges his chickens on corn so much, the chicken has a distinctive yellow color – there is nothing free range about it. The free range, is better for the environment, though as more grasslands absorb carbon from the air, but does it do anything for the taste?

Of course, we take it to an extreme in the US, by having restaurants that are marketed as if they are authentic food from another part of the world. Most Americans do not know that Outback is owned by a Florida company with numerous other restaurant brands. Our friend Judy from Australia would likely question some of the menu items. So, we fork over a slight premium to get the perceived Australian version of a steak and blooming onion, one of the most sinfully good and heart-unhealthy dishes around. To Outback’s credit, people are willing wait in line for a long time to get in.

Like Outback, what is interesting about all of these names of food is the lack of verification of authenticity. Chilean Sea Bass has been overfished, so the supply cannot meet the demand. Cod from Cape Cod near Massachusetts is dangerously low in stock. So, what you are eating is probably not what is named. Deep sea scallops is a terrific misnomer as it is likely shark meat. You can usually tell by the uniformity of the cut of the scallops – real scallops are like snow-flakes and have different shapes. And, we could spend a lot of time talking about truffles whose market has been infiltrated by cheap knock-off versions from Asia rather than Europe, where they are sniffed out by specially trained dogs (talk about an asset).

So, the next time you are in a restaurant or market, look at the prices and see if a pattern emerges. If you want to have fun, you could ask is this really Chilean Sea Bass? Or, you could stay home and have some reheated Joe’s turkey, Big Mama’s dressing with Linda’s cranberry relish. They won’t mind a bit. Happy Thanksgiving, everyone.

A high price for profit making in the legal drug business

I don’t think it will surprise many people that our pharmaceutical companies are out to make a sustainable profit. You can glean this quite easily from the many commercials on TV and the internet around creating a new disease, so that a drug can be prescribed to remedy it. The key catch for them is they want you to take this drug for the rest of your life. As a business person, I understand all of this, but there is a concern beyond this modus operandi, which is highlighted in the attached article. Antibiotics drug development is now being overlooked as it is not profitable. Why? The antibiotic cures what ails you in a reasonable short order.

http://www.streetinsider.com/Press+Releases/Antibiotics+are+a+Financial+Disaster%3B+CBCD+Proposes+a+Governmental+Agency+for+the+Development+of+New+Antibiotic+and+Antiviral+Drugs/8912338.html

From this article, a quote from an earlier study done in 2007 is referenced:

“Antibiotics have a lower relative rate of return on investment than do other drugs. Antibiotics are short course therapies that cure their target disease, and, therefore, are typically taken for no more than 2 weeks. In contrast, chronic diseases are treated with non-curative therapies that suppress symptoms and are required to be taken for the life of the patient. Ironically, antibiotics are victims of their own success; they are less desirable to drug companies and venture capitalists because they are more successful than other drugs.” This is according to a study published in the journal, Clinical Infectious Diseases which was reported on the news recently

The high price we pay, though, is far greater than the recurring costs of drugs we take to placate our real and exaggerated woes. The high price is the bad bacteria that can infest our bodies finds a way to become immune to the current arsenal of antibiotics. Remembering Jeff Goldblum’s character from the movie “Jurassic Park,” he said “nature finds a way.”  So, while we have always been vigilant about developing new strains of antibiotics, we must continue the fight or nature will find a way around our efforts. Yet, that is now challenged because there is more money to be made investing in drugs that customers need to take the rest of their lives.

I cannot think of a better example of a reason why we must have government investing with private industry for a common purpose. US history has been filled with successes of joint government/ private investment. In Thomas Friedman and Michael Mandelbaum’s book “That Used to be Us: How America fell behind in the World it Created and how it can come back,” they note the role government investment has played over time in our success leveraging private and venture capital dollars or where a business or industry could alone not support the infrastructure start-up costs. This lesson has been borrowed by others and yet we have some who are challenging this paradigm here. Those folks need to read Friedman and Mandelbaum’s book regarding how we got here.

For those who say let the markets be unfettered, the drug companies would continue down the path of investing in a greater ROI making drugs to sell recurringly. They make more money selling the various colored pills to a drug-friendly customer base. Yet, we have to co-invest in antibiotic drugs for the greater good. Some might argue, an enterprising company could develop and sell the antibiotics, yet the cost to the public for each dosage would be very high out of necessity. Plus, the process has to continue, as every time a new antibiotic is created, nature fights back. So, the company’s ROI would not stand up by itself for shareholders and needs incentive from a central source.

So, the idea championed in the attached article draws from our history and suggests government investment to make sure we have antibiotics that will keep us alive. This is one area where we do not want to go back in time, as preventable infections would no longer be preventable and many would die. This issue is very real and we need to heed the calls to action.

A journey begins and is made up of small steps

Oftentimes, we look at huge efforts and never start to tackle them because of their enormity. There is an old quote that I often use, “opportunity is missed because it is often dressed up as hard work.” Yet, to accomplish any major task or to embark on an arduous journey, you must take that first step. And, remember the journey is made up of small steps. This is my way of saying break the huge effort down into smaller steps and it won’t seem so overwhelming. But, I would add that you should do each step well, as if you don’t you may need to go back and do it again.

Hopefully, you will also have some semblance of a plan, rather than embark without an idea or goal. But, even without a plan, doing nothing will most likely not get you where you need to go. On this last point, with three children and during some tutoring I have done, I will share with the student on tackling a problem they don’t know how to do – “well let’s start with writing down what you do know.” Once you start, the problem becomes more visual. On old professor called it “thinking with your pencil.” Plus, a teacher wants to see if you have a clue, even if you miss the problem, so they can help you work through the problem.

I have written in earlier posts excerpts from some interesting starts to solving major problems. Each of these three examples were actually ridiculed, yet they paved the way to a successful problem resolution. From the book “The Power of Habit” by Charles Duhigg, I wrote a post about Paul O’Neill, the very successful CEO of Alcoa who went on to serve in President George W. Bush’s administration. The post can be found with the attached link. https://musingsofanoldfart.wordpress.com/2013/03/20/who-is-paul-oneill-and-why-should-his-opinions-matter/.

O’Neill joined Alcoa and turned the company around by focusing on safety. When he said he wanted to make Alcoa the safest company on the planet at his first CEO public appearance, he was ridiculed and one financial advisor told all of his clients to dump Alcoa stock today. The advisor later said that was the worst piece of financial advice I have ever given. Why safety? O’Neill told people later, “that was only issue I could get management and the unions to agree was important.” With this focus, communication between management and the workers on the manufacturing floor improved and it was a two-way street. Information on how to make things safer and improve processes started being discussed and Alcoa improved safety and productivity. This translated into financial success and the stock took off.

Malcolm Gladwell used an example in his book “The Tipping Point” about how terrible subway crime was stopped in New York City. Although more complicated than this, it started with the subway management painting over the graffiti on the trains and walls every day. If graffiti appeared, they made every effort to make sure it was gone the next day. What happened next is the vandals and robbers starting seeing this and felt if they are going to this much trouble to paint trains and walls, then we better not do any crimes here. This seemingly small step was laughed at, but it made a huge difference.

The final example is another small one, similar to the above two, courtesy of Steve Jobs. When Jobs built his first plant in China, he was involved in the intricate details. When he was asked what color to the paint the walls, he said white. When he was told that was foolish as it would show dirt and grime, he retorted we will just paint it again. His point is white is a cleaner look and if we keep it clean by repainting, this will show we have great attention to detail and the workers will notice. They will extrapolate that to other areas. This attention to detail continued until right before he died as Jobs had a heavy hand in designing the new headquarters for Apple. He was insistent on having small meeting rooms with white boards along the highly trafficked routes in the halls to the rest rooms and break rooms. The reason is the chance encounters and “hey, what are you working on” hall conversations would lead to idea sharing meetings.

Small steps. Harder problems are made easier if broken down into small steps.These three success stories involved safety and buckets of paint, which few thought were the most important or necessary steps to success. If you break large tasks into smaller steps and try to excel at each step, then the journey will be made easier. No matter how small that step may appear to others, that first step has to be taken. And, suppose you make a mistake along the way; remember the lesson of Steve Jobs and the New York subway – you can always paint over it – and move forward.

Abraham, Martin and John

After the horrific assassinations in 1968, which claimed the lives of two great Americans, Martin Luther King and Robert F. Kennedy, Dick Holler wrote one the most soft-spoken, yet powerful songs – “Abraham, Martin and John.” It was initially recorded and made famous by Dion, who was a pop icon, yet better known for songs of the genre of “Runaround Sue.” The lyrics follow:

Has anybody here seen my old friend Abraham?
Can you tell me where he’s gone?
He freed a lot of people,
But it seems the good they die young.
You know, I just looked around and he’s gone.

Anybody here seen my old friend John?
Can you tell me where he’s gone?
He freed a lot of people,
But it seems the good they die young.
I just looked around and he’s gone.

Anybody here seen my old friend Martin?
Can you tell me where he’s gone?
He freed a lot of people,
But it seems the good they die young.
I just looked ’round and he’s gone.

Didn’t you love the things that they stood for?
Didn’t they try to find some good for you and me?
And we’ll be free
Some day soon, and it’s a-gonna be one day …

Anybody here seen my old friend Bobby?
Can you tell me where he’s gone?
I thought I saw him walkin’ up over the hill,
With Abraham, Martin and John.

On this 50th anniversary of the assassination of President John F. Kennedy, I was reminded of this song as an ideal tribute to people who fought for those with less. Last night, I watched the most poignant of all versions of this song performed by Moms Mabley at the encouragement of Sammy Davis, Jr. on a televised show hosted by Hugh Hefner over forty years ago. In this unlikely setting, Moms had everyone around her in tears, including herself, Hefner and Davis. To see this performance, please check out “Whoopi Goldberg’s Presents Moms Mabley,” a documentary film that aired this week on HBO. The show by itself is worth it, but this song toward the end elevates Mabley even further.

Paraphrasing Mabley, we need more people using their voice to speak out for injustice. Today, we seem to have a “war on the poor” rather than a “war on poverty.” People are struggling and need to have a voice at the table. We have too many political chess games that forget the pawns. Abraham, Martin, John and Bobby knew this. Let’s do justice to the anniversary of John’s death and not only remember this, but lend our voices, hands and feet.

They did not invent families, people made families

The above is a quote from a grade school child who is part of a divorced family. For someone who is about nine years old, I think it speaks volumes. I caught a documentary on HBO that is called “Don’t Divorce Me! Kids’ Rules for Parents on Divorce.” This show is both illuminating as well as heartbreaking. It also shows how kids have to grow up more quickly when divorce occurs.

As one young girl said, “First, you cry a lot and get scared. Then, eventually you learn to live with it.” The point of the quote is divorce requires you to make your family work. The parents and eventually step-parents can make the lives of the children miserable or the best they can be under the circumstances. A few rules came out of the mouths of these children which are helpful to reflect on, even if the parents are not divorced.

Don’t take out your anger with each other on the kids.

– Try to live close enough to one another, so it is easier to be with both.

– Remember to spend time with the kids.

– Treat the other parent as nicely as you can.

There are more rules, but these are the four key takeaways that I gleaned. On the second point, they asked one child where he lived and his response was telling – “I live in the car.” He is constantly being shepherded from one parent’s house to the other’s and to various events in-between.

Yet, let me add that if you erase the discussion about divorce and insert the traveling in the car for the second rule above, these rules can apply equally to parents who are not divorced. Think about it. If we do these things as parents, regardless of whether we are married or divorced, the children will be better served. My wife and I are by no means perfect and have made mistakes as parents. One of the things we insist on is being civil to each other in our house, whether it is among siblings or adults. Another is being on the same page. When an issue arises with one of our children, we parents talk about the best way to approach the child or apprise the other of what we said or did for reinforcement, validation or to ask “did I handle that well?”

The final point above is to spend time with your kids. This is something we all could be better at, the writer included. I would also suggest to not over schedule your children in team sports, plays, music training, etc. If your child is in three things outside of school at one time, that is at least one to many, depending on the amount of practice time. The parents and children get frazzled and are being chauffeured from practice to practice. What suffers is the family meals, which are one of the few areas we try to get right and I would highly recommend to any parents. Plus, frazzled parents make less effective parents as they are stressed and will say or act out in haste.

Being a parent takes an effort. If I could add one rule to the above it is to remember your sense of humor. Parents are not perfect, so we should not expect our kids to be. They will mess up and make mistakes. They will do stuff we did as children or will disagree with our points of view. I shared with our Australian friend Judy (who writes an excellent blog called “Raising the Curtain” at http://raisingthecurtain.net/ ) that my wife and I started sharing our mistakes with our children to show that we are not perfect, survived and learned from our mistakes and can look back on them and laugh. Our kids react well to these anecdotes.

“They did not invent families, people made families.” These words are quite profound. From the mouths of babes…

The Republican Response to Climate Change is “Mindless” per a Former GOP Governor/ EPA Head

The above quoted phrase is from an interview with former New Jersey Governor Christine Todd Whitman who was the keynote speaker at the Charlotte Chamber’s annual Energy Summit. Whitman also served as the administrator of the Environmental Protection Agency (EPA) under President George W. Bush. After her discussion which she promoted the use of nuclear power as a part of an all of the above strategy that must include more alternative energy, she was interviewed by Bruce Henderson of The Charlotte Observer. The questions below and responses are from this interview which was reported under the title “Ex-EPA chief Whitman promotes nuclear power” in the November 16, 2013 edition.

“Q. What’s your view of climate change?” A. Climate change is real. If you don’t think that, you haven’t been outside or read the newspaper or watched television for the last couple of years. We are getting more frequent, more severe storms and droughts and floods, all of that. But Earth’s climate has been changing since it was formed. We had an ice age. That went away and we weren’t around to screw that up. However, to think that what we’re putting into the atmosphere is not having an impact on climate change and Earth’s ability to regulate itself I think is being naive. The point is, the climate is changing, the sea level is rising, we’re losing the ice caps, and we need to prepare.

Q. How do you explain the conservative Republican response to climate change? A. The response is mindless. It is absolutely clear now – you can’t find a credible scientist who says that climate change isn’t occurring. You will find a difference as to what degree they believe the human impact is exacerbating a natural trend. It was Ronald Reagan who made climate change a regular part of the National Security Council agenda. (Republicans) should own environment anyway if you go back to the first public lands set aside, Abraham Lincoln and Yosemite, and then you have Teddy Roosevelt and Richard Nixon who established the EPA. It’s our issue. Its more a (current) reaction to, we don’t want government anywhere, anytime, anyhow that the hard-line libertarian streak is fueling.” 

Since her purpose is to shake up her party, I will leave her words to resonate as is. As an Independent voter who left the Republican party in 2006, one reason being its stance on global warming, I find that her attempts to help the GOP join the conversation that is already occurring refreshing and long overdue. Bruce Henderson’s article can be found on www.charlotteobserver.com if interested in reading the full interview.