Mindconnection eNL, 2009-07-05

If you read Into Thin Air or other accounts of that disastrous season on Mount Everest, what comes through loud and clear is so many people lacked a sense of propriety.

We express our sense of propriety in many ways. For example, consider how you dress if you go to the following places:

• Professional office (e.g., doctor, attorney).
• Mid-scale "casual" chain restaurant (e.g., Applebees, Olive Garden).
• Public library.
• Office of your mayor, Congressman, or other elected official.
• Grocery shopping.
• Association banquet.
• Upscale restaurant (e.g., $50 tab for two people at lunch).
• A white collar job in an office.

In none of these situations does a person of propriety wear sweat pants, torn jeans, or a tank top. There are dress codes for each. You can expect to be treated in response to how you dress, not because other people are snobs but because under-dressing exhibits your lack of propriety. And as we know, propriety and stupidity are closely related. In the Everest case, they are related with tragic consequences.

I'm not saying that a guy who dons an Oxford dress shirt is automatically brilliant or one who does not finds his brain shriveled to the size of a walnut. After all, members of CONgress dress well and look at how stupid they are. No, I'm not saying that at all.

I'm saying your attitude of propriety (or lack thereof) is something very crucial. If you adopt an attitude of propriety, you will express that attitude in many ways. An obvious way is in how you dress. But that way is merely a reflection of your propriety.

And what is propriety anyhow? It's the following of accepted standards of manners and behavior. A person with propriety has taken the time to learn those standards. Following those standards shows respect for others. And therein lies the kernel of what's going on when propriety works its magic. The key ingredient is respect.

Whether it's respecting a mountain, respecting your own limitations, respecting the opinions of others, or respecting your boss, there are benefits for having respect and consequences for not having it.

Propriety opens doors for you. It attracts people who are "on the ball." It gets you respect, because you are giving respect. It helps get your mind in the proper frame. It helps bring order, instead of chaos, to your world.

It sometimes seems I'm stretching the concept of brainpower enhancement, here. But if you will reflect on propriety very seriously for a while, you will see that is not the case this time.

A bond is a guaranteed financial loss. How the heck this is "safe" escapes me.

Why is a bond a guaranteed financial loss? A bond is not equity, it's debt. It creates no value. For that reason, it can never return enough to outpace inflation. While "investing" in a bond is safer than hoarding Federal Reserve Notes (the cotton "dollar bills" that people erroneously refer to as "paper money") and much safer than making an equity "investment" (stock) in something you know little about, it's not safe.

Stocks are safe, only if you understand what you are buying. Since stock is an equity (ownership) investment, it holds the potential to outpace inflation. You have to remember that you are buying ownership in an income-producing asset. You need to evaluate that asset before buying, and you need to understand the risks of ownership.

Unless you understand the products, management, market, and competitive environment of the company you are buying stock in, you are merely gambling. Since most people lack the education, information resources, time, and perseverance to understand these things, most people should not buy individual stocks. Mutual funds, yes--but only if you understand the management and the fund philosophy. If you are merely chasing returns, you are gambling.

What else can you do? Some obvious investments include:

• Invest in training and education so you qualify for higher income (proven: this works).
• Invest in your health, so you don't have disease accommodation bills (what we call "healthcare" bills).
• Invest in your mind by reading books, so you have brainpower, attention span, and knowledge.

Most people don't think of those three things as investment, but they should. Most people think in terms of buying something. OK, so let's go there.

In 1983, I read a book that profoundly influenced my thinking on investing. It talked about buying things on sale, and stocking up when you do. This was something my parents did, and though I didn't think of that in terms of investing, I followed this pattern more or less. However, you can manage this kind of buying in a way that vastly outstrips the "return" the average investor gets on "investment."

The key isn't to buy things just because they are on sale. Do that, and you merely accumulate clutter. The key is to buy things you'd use anyhow. For example, there's a sale on motor oil, 10% off. Buy the oil. If you use it 6 months later, you've made a 20% annual profit.

Inflation may not stay within reasonable bounds. So even if you were able to buy everything with, say, an annual profit of 20% you could still lose wealth at an alarming rate. Of course, your 20% return is much better than the 5% return someone else is making via a financial investment.

Most people will not do the math on investing. If they buy a case of oil and look at it six months later, they see a case of oil. There is no broker's statement showing they made 20% on it. So they don't understand that they made that kind of return on the investment. Plus, they are going to use the oil and then it's gone so all they see is that they spent money on oil.

If you think about it, this example is actually a leveraged investment. It's money you were going to spend (not have) anyhow, and so you make 20% on someone else's money but do so with real goods. Pretty hard to lose in that scenario.

I think the basic problem is people want to see something on paper showing their "profits" but don't understand that paper profits aren't real profits. They are just paper profits.

Let's look even closer at this, now. You don't pay income tax on the 20% return on that oil, but you will pay income tax on that 5% paper profit. Not only that, the IRS can seize your accounts (paper profit storage) with no warning or justification, but they aren't going to come to your house for that case of oil.

Does the word "duh" start coming to mind?

Investing isn't something you spend your money on. Investing is a strategy for how you spend your money. And your time.

There's some blather in there explaining the need for you to send them money even though they are sending you money. The check they send you will bounce or it will be drawn off the legitimate account of a third party and you'll have to pay it back.

What should you do?

Take the letter and envelope to your nearest Post Office so the US Postal Inspector can follow up on it.

Many people underestimate the US Postal Inspector. Don't. This is the office that exposed the scam IRS employees had been hiding for years from law enforcement agencies and raking in millions of dollars by defrauding investors and providing them false information in writing. When their scam was exposed, the US Postal Inspector was able to put their front man (who didn't have "laws don't apply to me" privileges that are granted to IRS employees) in prison on 52 counts of fraud. He died there. The $103 million stolen by the IRS employees was never recovered, but the point here is their lucrative crime spree got stopped by the US Postal Inspector.

Of course, we're all ripped off by our misrepresentatives in CONgress and the US Postal Inspector isn't allowed to investigate that rampant fraud. While it's somehow legal for the US Congress to steal most of the money you earn (and hand it over to the folks who hire the lobbyists who own the members of CONgress), it's not legal for someone else to steal $350 from you by mail. Help the US Postal Inspector shut down at least one of these groups of thieves.