Check out this new website by Barnes and Noble called http://quamut.com.  It’s a how to guide of everything from making sushi to setting up your own website.  The website categorizes its how to guides by general categories such as house and home and computers and technology.  The categories break down into more specific topics like automotive/garage and programming/software.  What I like about the site is the in-depth treatment of each topic.  Other web-based how to guides throw a million topics at you, but with little actual information for each one.  By contrast, Quamut devotes pages and pages of information on each topic.  Today’s “how to” is (surprise!) blogging.

Interestingly, I just tried looking up the word “quamut” on dictionary.com.  The word doesn’t exist.  I guess companies are getting very creative about coming up with names for their websites because there are just too many cybersquatters out there hogging webnames for no good purpose other than to try and sell it to you!  My thinking - if you don’t use the web name for six months, you gotta give it up.  That’s my gripe of the day.

I recently received an email from a reader in New York City:

              Dear Financial Gal-

I read your post about disgruntled lawyers.  I am a dissatisfied attorney myself and looking to get out of my 16 hour/day never-see-the-light-of-day associate position at a major law firm.  I have been trying to save enough money to cover my expenses for at least six months so that I can take time off to travel or simply decompress, but I can’t seem to reach the goal.  Although I am making a decent salary, NYC is a very expensive place to live.  Most of my paycheck gets eaten up by taxes, rent, dry cleaning, dinners out, new suits, etc.  My biggest problem is that because I’m so stressed out at work, I tend to spend my free time shopping to blow off some steam.  I have a closetfull of clothes and shoes that I have barely worn.  I suspect that what I’m doing amounts to emotional spending, like emotional eating.  How can I control this bad habit so that I can move on with my life plans?

            Suffering big law associate.

I completely empathize, because I’ve been there myself.  My first job outside of law school required 14 hour days and frequent weekend work.  On those rare weekends where I actually got a day off, I spent them sprawled on the couch or at the mall, trying to figure out which pair of shoes to buy.  Just like digging into a ice cream sundae, shopping was an indulgent fix (albeit temporary) to my stress-ridden life.  Of course, when you are working that much, the last thing you want to do is clean your own house or do your own laundry.  Hence, you incur even more expenses and dig yourself further into the money pit.  Here’s my two cents on what to do:

1. Make a plan to escape.  Just like Tim Robbins’ character in the Shawshank Redemption, sometimes it takes a few pebbles at a time to dig yourself out of your cell.  Your exit won’t happen right away, but if you have a plan, this will instantly boost your spirits.  Chart your goals for the next year.  When do you absolutely want to be out of your job?
2. Once you have your deadline set, figure out how much money you need to set aside for each paycheck to reach your goal.  Then, set up an automatic withdrawal plan with an online bank like www.ingdirect.com.  The money will disappear out of your account before you’ve even gotten your hands on it.
3. Credit card therapy:  Reduce your credit card stash in your wallet to no more than two cards.  Then, tape a note to each card to remind yourself that you are sticking to your plan NOT to spend so that you can reach your financial goal.  If you want to be even more graphic, include on your note a picture of the partner that is making your life a living hell.
4. Go through your closet and rid yourself of the clothing that you no longer wear or don’t ever intend to wear.  Calculate how much money you spent on those clothes.  Write that number down using a big black magic marker and stick it on your refrigerator as a reminder of the cash that was wasted.  Chances are you would have already reached your six month goal had you not made those purchases. 
5. For the clothes that are still wearable (which I am guessing is all of them), donate them to Goodwill or to Dress for Success.  Pat yourself on the back.
6. Last tip:  Reduce your contact with shopaholic friends and family.  You would be amazed at how peer pressure will cause you to spend needlessly.

Let me know how you’re doing and whether you have adopted any of these tips.  There are going to be days when you find it too difficult to resist a purchase here or there.  But when you do make progress, you need to congratulate yourself and remind yourself of your long-term goals.  From all of us disgruntled lawyers, we are all rooting for you!

Having a hard time getting your teen off the couch and doing meaningful work this summer?  Having a summer job, no matter how menial, can be a good experience for a teen.

My summer jobs ranged from answering the switchboard at a local bank to running a gift shop at a local hotel resort.  The worst one?  Probably a cashier at a grocery store, where I couldn’t figure out how to process WIC vouchers during my short tenure.  Despite the mishaps endured at my various short term jobs, I did learn a few lessons. 

1.    Money is hard to make, so don’t blow it all in one place. 
2.    Stay calm, don’t panic, and persevere, even with a long line of angry customers.
3.    Stay in school.

This last lesson was never really a choice.  Just ask my parents.  However, the summer jobs did reinforce why school was so important.  At the grocery store, I slogged alongside older co-workers working for minimum wage and remember how difficult it was for them to hold down a job, take care of kids, and pay bills on a paltry wage of $4.15/hour (or was it $3.85)?. 

A recent articlein USAToday on the past jobs of CEOs demonstrates, any experience, no matter how gritty or filth-ridden, is a valuable learning experience for a teenager.  The profiled CEOs shoveled dirt, hawked encyclopedias door to door, and held menial retail jobs, taking in lessons like overcoming adversity, developing ambition, staying in school, and having a positive attitude, no matter how nasty the customers can be.  So, why the continued slide in teen employment?  The article points out that the more well-educated the parents, the less likely their kids are going to hold down summer jobs.  Interestingly, Borders bookstore CEO George Jones’ teenage son, Dylan Jones, who barely has worked in any Borders store, but has traveled to 30 countries.  In this day and age of helicopter parents who expose their children to unique and diverse learning experiences, holding down the menial job at McDonalds is low (or nonexistent) on their list of priorities.  But ironically, that job may teach them a lifetime of good values.

What do you do when you have a great idea but don’t know where to start?  For instance, you may be really excited about your idea to start brewing your own jasmine tea or making organic marshmallows, but the idea just stops right there.  Then what?  How do you take your idea from the drawing board to a real live operation?  I’ve often wondered about this myself, as I constantly pitch ideas to my husband and friends.  But an article in the Small Business section of Fortune magazine about the granola company Bear Naked shows that it may be as simple as going shopping at your local grocery store.

Two friends, Kelly Flatley and Brendan Synnott, started Bear Naked, which makes natural granola products, in 2002.   In Fortune Small Business, Flatley and Synnott describe how they took this simple idea and developed it into a multi-million dollar business.  How did these two twentysomethings start out?  They did the same thing we do all the time.  They went to Costco.  But instead of dropping hundreds of dollars on tubs of spinach tip for their personal consumption, they invested in the business.  Flatley and Synnott scooped up granola ingredients like bags of nuts and gallons of honey and canola oil, so much that they scored Costco’s customer of the month title in fall 2003.  Flatley and Synnott also recall that they were the accountants, distributors, kitchen cleaners, and the cooks for their product.  After five scrappy years, they grew the brand so well that it reached $65 million in sales in 2007.  Even better, the Bear Naked brand caught the eye of Kellogg, which bought the company last year for a whopping $60 million.  Although the money is good, Flatley and Synnott describe themselves as proud parents of the brand, noting that with the sale to Kellogg, Bear Naked granola can reach an even wider audience. 

Bear Naked epitomizes how perserverance and a belief in your own product can take your company to dizzying heights.  It’s also a real-world example of how starting a company doesn’t have to involve fancy business plans or Silicon Valley venture capitalists.  It can be as simple as taking that baby step of going to Costco and mixing up a batch of your Mom’s secret recipe.

Have you ever fantasized about walking into your boss’s office and telling her to take this job and shove it?  In a recent segment on CNBC’s “the Big Idea with Donny Deutch,” Suze Orman debated Donny about the pros and cons of throwing caution to the wind and “realizing your dreams” by starting your own business. This was one of Donny’s more interesting segments in recent memory.  Usually, he has guests on the show that are ra, ra, ra, I started the business with $40 in the bank, maxed out my credit cards, and lived on wheat germ for three years before selling out to Google for a jillion dollars.  Suze had a bit more practical advice for all us budding entrepreneurs.  I won’t go into it in detail here, but suffice it to say that her bottom line was make a plan and save a bunch of money before you take the proverbial leap off the cliff.  What should you do before quitting your day job to start your own piece of utopia?  Here are my two cents. 

1. While you are still employed, put 12 months of expenses in cold hard cash away in in a boring savings account (no high-flying stocks please).  Consider stashing the cash in a savings account at online banks like INGdirect, which is offering a decent interest rate of 3%.  To save that much case, you probably will have to seriously scale back your standard of living now.  But trust me, you will be grateful for it during those cash-sucking first months, or maybe even years, as you get your business off the ground.  Businesses always need more capital than your best guesstimate.
2. Pay off all of your discretionary debt, before putting in your notice.  This includes credit cards, auto loans, home equity lines of credit, student loans, etc.  You want to wipe out as much debt as possible before you go out on your own because those loans amount to anchors around your neck when you no longer have the steady paycheck to tap.
3. Secure some source of capital, like a home equity line of credit that you can access to fund your business when customers are slow to pay.
4. Have a business plan detailing how you plan to generate revenue for the business and how you are going to make a profit.
5. Live like a pauper in the months before you plan to quit your job.  Even if you have sufficient cash tucked away, you want to get used to the fact that starting a business requires considerable sacrifice to ensure long-term success.

Speaking of living like a pauper, I do feel a little guilt-ridden about splurging this weekend on some books at Barnes and Noble and clothes from Nordstrom Rack (still cheaper than the mother lode).  Oh no!!! False alarm.  I decided that it was OK to treat myself because we have been living quite frugally in recent months and have made significant headway towards our financial goals.  Obviously, you and I are only human, and just like dieting, there are days where we will fall off the wagon.  But, although I struggle sometimes, I’ve found that, over time, it has become easier to defer instant gratification, i.e., buying more stuff.

Here’s a neat trick that works most of the time.  Whenever you feel tempted to spend some serious cash on something like the Wii Fit, recall in your head the day that your boss chewed you out for forgetting to staple your report on the top left side of the page.  Practice makes (almost) perfect.  Yey!

Everywhere you turn, the media has some new story on the R-word and the tough economic times.  I was just reading an article in the Washington Post about how middle class consumers are finding themselves clipping, scrimping, and saving in these high-gasoline and high food prices.  The byline of the article is  “[e]gg prices are up 35 percent, with bread and milk not far behind.  Consumers are scrambling to find ways to cope.”

But as I read the article, I noticed something funny.  The word “scrimp” in the title of the article conjures up images of penny pinching until Lincoln screams.  But these people, who are solidly middle-class (e.g., government civil servant, trainer at a public utility) aren’t cutting up a chicken 10 different ways to stretch their dollar or eating one scrambled egg instead of two for breakfast.  Rather, they are making such ”sacrifices” such as not buying sushi at Whole Foods or foregoing brand name items except when shopping at Costco.  One 29 year old mother programmed messages into her Blackberry to remind herself to pick up the cheap milk on sale days at Kroger.  Am I missing something here?  The article heading suggests some severe economizing.  When did a lack of sushi and organic groceries warrent “coping” as the title of the article says?  Has the consumer culture gone so out of whack that shopping at Whole Foods is a necessity rather than a luxury?

I’m not trying to make light of the truly difficult times that some are going through.  However, I think that some media reports of economic plight are greatly exaggerated.  Here’s my two cents on the issue.

• Shopping at Whole Foods is a luxury, not an entitlement.  By the way, you can get cheaper organic groceries at Trader Joe’s.  Some of same non organic fruit carried by Whole Foods, such as Mandarin oranges, can be bought at an Asian grocery store for a fraction of the cost.
• If you are strapped for cash and you find yourself economizing on groceries, ditch the expensive accessories like the Blackberry:  There is something really perverse about someone who runs out to buy cheap milk to save 50 cents, but is carrying around a costly Blackberry that is saddled with high monthly charges.  (assuming that your office did not give you the Blackberry for work purposes).
• Finally, be appreciative that you have enough food to eat:  I know this sounds a bit corny and preachy, but it definitely puts things in perspective.  In many parts of the developing world, as the Post article did point out, people don’t have enough calories to consume.  They are not worried about whether their foodstuffs is organic or not.  They are concerned whether they will starve to death.

It’s been a busy week - my son had his two month doctor’s appointment yesterday (complete with painful shots) and I’ve been juggling quite a few chores to get ready for our first cross-country plane trip with our new son.  As a result, the blog entries have slowed and my “to do” list is getting longer and longer.  I feel that I could be a lot more organized, but I also think it might be a slight tendency to procrastinate on some of the more unpleasant tasks.  However, I am actively trying to turn this ship around.  In my quest to manage my time more productively, I stumbled across a website that provides some simple tips on how to manage your time.  Getmoredone.comhas advice on topics such as how to plan your day and how to use email more effectively.  The tips that I found most useful?  How to stop procrastinating.  It’s difficult to prioritize when you have a mountain of chores, goals, and tasks to accomplish, and often it’s just easier to put things off.  So, how do you get more done?  Getmoredone wisely says that:

                        “…procrastination stems from habit.  New habits will be needed and those take time and commitment to develop.”

Clearly, it’s a process, not an instant makeover.  Here are some tips that Getmoredone.com offers to change the procrastination habit, with my take on them:

• Finish the unpleasant tasks early in the day:  You know what they are: calling the bill collector to dispute a bill, finishing up that office memo; or even squeezing in your exercise routine.  I find that if I don’t complete a dreaded task early in the day, I build it up more and more in my mind until I really don’t want to do it at all.  So, swallow the bitter pill and finish it up.  It won’t taste as bad early in the morning.
• Break up complex tasks:  Lengthy projects are often difficult for a procrastinator to finish.  Frankly, it’s easier to tackle small projects verses big ones that will take hours, days or even longer, such as my plans to build a backyard patio or clean out the cluttered garage.  Both of these tasks (unfortunately) have been on my “to do” list for months.  Complex tasks can even include big goals like starting a business or saving six months worth of expenses in an emergency fund.  What I started doing was to say to myself: I’ll complete at least one small task each day to move myself closer to my goal.  If I think about everything that I need to do to get to my ultimate goal, it simply becomes too overwhelming.  For example, to get to my goal of starting my Internet business, I have done at least one hour of market research per day.  No matter what, I will sit in my chair for that scheduled one hour to do the work.  Sometimes, I don’t look forward to it, but once I get started, I become immersed in my work, and feel a lot better about what I accomplished at the end of that hour.
• Fear of failure:  It’s easy to delay a project when you’re scared about the possibility of failure.  As a lawyer by trade, I find that the most nerve-racking assignments are usually drafting legal briefs.  Some attorneys will put off writing the brief until the last minute often because of the anticipation that their supervisor will rip it to shreds.  Howeve, delaying the pain does not lessen the pain; often it exacerbates it.  So, what I’ve done is to forget about failure and try to “front-load” the work - drafting the brief well before the deadline so that I have time to go through the brief, reedit and correct factual errors.  That has worked well for me in the office because it takes the last-minute pressure off of me to finish the work and often results in a better work product.  What I need to do is to apply this mindset to my business ventures. 
• Perfectionism:  I’ve seen others delay projects indefinitely because they want to get the end result perfect.  This tendency to “perfect” a task can be quite debilitating.  People are paralyzed by this; often, they don’t even start a task.  What to do?  First, understand that perfection is an elusive fantasy in our heads.  Unless you are the philosopher Plato, who’s to judge whether something is perfect?  Second, just dive into the task.  Forget about all of the “what ifs,”  “this isn’t good enough,” “is this perfect?” voices in your head.  Block them out.  You don’t want to be stuck at the start line indefinitely because you are trying to figure out the “perfect” running form.

Wow, I feel better now that I have finished this post.  Hey, the procrastination tips are already working!  Now, it’s on to that backyard patio…..

If you like social networking and you are a Wall Street junkie like me, check out www.updown.com.  This website, whose byline is “the social network for virtual investing,” is like a Facebook or Linkedin for stock investors.  However, instead of merely swapping details of your life with your friends and professional colleagues, you can actually make money off of sharing stock information or managing a hypothetical stock portfolio.  I saw the CEO, Michael Reich, being interviewed on CNBC a few days ago.  Apparently, it works like this:  anybody can join for free.  When they register, they will have a hypothetical cash fund to invest in stocks.  Along the way, they provide comments, stock tips, or analysis about the stock market.  People who make the most money with their investing ideas are eligible to win real money from Updown. 

After seeing Reich’s pitch, I went to the website.  Apparently, there are three ways to make money on Updown.com:

• Manage a hypothetical stock portfolio of $1 million.  If you beat the S&P 500 index in any given month, Updown says that it will pay you real cash.  The website doesn’t say how much, or if it does, it wasn’t obvious to me.
• Write your own analysis of why a stock is a “buy” or a “sell.”  Other members of Updown will rate your analysis and provide feedback.  You’ll earn actual cash if your analysis is highly rated by the Updown investor community.
• Refer other people to the Updown website.  When I read this, I thought, “this will be easy.  I’ll just put down a bunch of email addresses of friends and see who bites.”  But, upon further reading, I discovered that it is not as easy as waiting to see who signs up.  Not only do your referrals have to sign up, they have to make money doing the investing You will then make 10% of your referrals’ earnings on Updown.  Sounds a little like Amway, eh? 

The million dollar question posed by CNBC anchor Bill Griffith to Reich: ”[H]ow does updown.com make money?”  I found this part fascinating.  Reich explained that Updown is also starting a hedge fund.  The most compelling stock tips and analysis submitted by members will be used to invest money in the hedge fund.  Very interesting concept.  I just joined as “Financialgal.”  Will let you know how I do.

What is willpower?  According to Wikipedia, it is the ability to exert one’s will over one’s actions.  Willpower is something I wish I had more of, especially when I am around my favorite junk foods, like a large bag of Cheetos or Krispy Kreme donuts.  For most of my life, I associated willpower with routine and mundane activities like eating and shopping (Eat more kale!  You don’t need those Manolo Blanik shoes!)  I never made the connection between willpower and more purposeful activities, like starting a business.  However, a recent article by New York Times op-ed contributors Sandra Aamodt and Sam Wang shed some light on this often elusive thing we call willpower and how people who train themselves to increase their willpower capacity can reach long-term success in many areas of their lives. 

Aamodt and Wang say that we can increase our overall willpower capacity by flexing and strengthening our so-called willpower muscle.  In certain studies, people who stuck to an exercise regiment for two months reported increased willpower in other aspects of their lives, such as shopping less impulsively, watching less TV, and eating more healthily.  Learning money-management skills is another way to flex willpower muscle.  The key to growing willpower abilities, according to Aamodt and Wang, is to resist the desire for instant gratification and focus on long-term success when doing activities that require self-control. 

It’s easy to see how willpower is the foundation of building personal wealth.  Whether you are starting a small business or trying to make a million dollars, being able to exert your willpower to take action and to resist certain impulses is one step closer to success.  Instead of spending your entire salary on a house that’s too big or a car that guzzles too much gas, you hoard your cash in anticipation of the Subway franchise that you’re going to start or the investment real estate that you’re going to buy. 

But, just like losing weight, taking action on certain goals that are not related to an immediate consequence is admittedly difficult.  When the doctor tells you that you need to drop a few pounds because you might get heart disease years into the future, all you might hear is “wah wah wah.”  Similarly, you might have certain financial goals that you may want to achieve, but you make little headway because you’re comfortable, you have a stable job, and there is no immediate pressure to move forward.  That’s why strengthening your willpower muscles is critical to success.  As I am writing this post right now (at 10:30 p.m. on a Monday night), I wouldn’t be lying to you if I said that I had to propel myself up off the couch to come over to the computer and start typing.  But once I got over the biggest hurdle - getting started - the rest of the work was downhill from there.  It’s all about exerting willpower to force myself into action.  I think that I’m going to have to put myself on a goal-oriented work regiment.  Everyday, same time, same place.  I’m going to buff up those muscles!

For a humorous and insightful take on how lack of discipline sabotages our chances for success, check out the following post at Bripbrap’s blog: 31Causes of Failure #5 Lack of Self-Discipline.

Today’s Wall Street Journal profiled some excerpts from the wsj.com/lawblog, written by Peter Lattman, including a January 16, 2008 story about a law school graduate who regrets her decision to attend law school.  Kirsten Wolf, a 32 year old Boston University Law School grad who incurred over $100,000 in law school debt, says that she is on a one-woman mission to talk others out of going to law school.  Wolf, who has found her dream job as an office manager for a literary agency, says that she initially decided to go to law school to satisfy her intellectual interests and so she “wouldn’t be poor.”  However, she quickly realized that the lucrative law firm jobs went to only a few students at the top of the class, and with average grades, she could only hope for a miracle.  So Wolf finished law school, incurring massive debt, and ultimately landing a non-legal job that pays significantly less than a large law firm associate salary.   Although Wolf loves her current position, as she describes it, she will be paying off law school debt until five years before “social security kicks in.” 

Wolf admits that she did acquire some legal skills in law school, but laments that it was not worth $100,000 of debt.  This topic hits close to home because I am also a law school grad and I understand Wolf’s frustration with the choice to attend law school.  Although I, fortunately, did not incur the kind of debt that Wolf did, I also faced serious doubts about whether my career decision was the right one.  Having learned through my own experience and through talking to other dissatisfied attorneys, I think that aspiring law school attendees must think long and hard before committing to three years of law school and potential school debt the size of a home mortgage.  Although Wolf’s primary grip seems to be that she incurred enormous debt without a payoff in the form of a lucrative job after law school, I question whether Wolf would have been satisfied with her career choice even had she gotten a law firm position with a six-figure starting salary.  A relative of mine who attended also attended BU law school did get a law firm position with a starting salary of $160,000 plus bonus.  However, she was completely miserable, working the hourly equivalent of two full time jobs and performing such non-glamorous tasks like sitting in a windowless room going through stacks of discovery documents.  As soon as her husband secured a high-paying position, she promptly quit the law firm and went to work for a non-profit.  I’ve also had colleagues who have stayed at law firms, even though they were very unhappy, because of the “golden handcuffs.”  Not only were they paying off school debt, they also spent money to buy large homes, expensive cars, and designer clothes as a form of therapy to make themselves feel that the endless billable hours were worth it.  I know this because I have been there myself.  I still have some clothes hanging in the closet with tags on them from when I worked at a firm that frequently required nights and weekend work.

According to a February 1, 2006, National Law Journal article, “As Salaries Rise, So Does the Debt,” by Leigh Jones, law school tuition is increasing at a far faster pace than law firm salaries, meaning that today’s law school grads grapple with proportionally higher debt levels than past law school grads.  With 80 percent of law school grads obtaining financial aid, and average loan debt for private schools at $77,000 and public school at $49,000, the decision to attend law school is one of the most significant financial decisions in your life.

So, before you decide to attend law school, do the following:

• Work at a law firm, as a temp, secretary, paralegal, to get a feel about what it is like to be a private lawyer
• Talk to lawyers in private practice, public service, and government about their experiences
• Decide what kind of law you want to practice.  If you are just going to law school, because you don’t have any idea what to do next, DON’T.
• Decide how frugally you can live and how much savings you can accumulate before entering law school, to minimize debt
• Talk to graduates of the law school you are thinking of attending, to see how satisfied they are with the experience.  If you run into a lot of disgruntled graduates who are unhappy with the job placement and the value of their juris doctorate degree, it might be a good idea to look at other schools

I’m not discouraging anyone from attending law school, just advising them to DO THE HOMEWORK.  Choosing law school means a lot of money and may influence your career path for the rest of your life.  It’s worth taking the time to crunch the numbers and decide whether you really want to make this commitment.  One final note:  law practice is the furthest thing from L.A. Law and Ally McBeal.