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We have all blamed a lot of different people and groups for the financial crisis we face today.  However, as we’ve surely been told at one time in our lives, “When you point a finger, three point back at you.”  The attached article from Fox Business shows that our collective understanding of even simple financial topics leaves a lot to be desired.

The fact that over half of the people surveyed thought investing in one stock instead of many stocks through a mutual fund is, to be blunt, disturbing.  It shows that we need to teach personal finance at the elementary, high school, and university levels.  Knowledge is power, and many of us are not very powerful when it comes to understanding basic personal finance.

Some people think of “culture” as one of those consultant words thrown around to generate more Dilbert moments.  I disagree.  Culture determines how you treat employees and customers, what receives priority and funding, and ultimately how your organization is remembered in the world.  Organizations with a culture of passion and accountability succeed, because their employees approach their jobs with more enthusiasm than other companies.  When you think of great companies like Apple, their culture of innovation and user focus appear in all of their products.  When I think of the Illinois Fighting Illini, I think of many years of “good enough”.  Sure, there have been moments where teams have been very successful.  My fellow Illini fans will no doubt remember the 2005 basketball season where Illinois was one shot from a national championship.  However, so many years have been “ho-hum” years.  This has occurred because the culture in the athletic department is one of complacency and “just getting by”.

The leader of the athletic department has been in his job over 15 years.  During his time, the football team (the largest source of revenue) has gone through three coaches and lost 40 more games than it has won.  Other programs have been “good enough”, but not great except in fleeting cases.  Meanwhile, the athletic director continues to be in his job.  This complacency filters to other employees, who see that being mediocre is enough to be successful.

When you think of your organization’s culture, or your own personal culture, ask yourself the following questions to determine whether you have a culture of complacency.

• What happens when your organization does something extraordinary?  Are these efforts strongly rewarded, or is just considered “all in a day’s work”?  If extraordinary effort is not rewarded, complacency will quickly set in.
• How accountable are employees?  Are there specific goals for each employee?  What happens if employees are not meeting those goals?
• If your culture is not the way you want it to be, how do you change it?  You MUST be specific.  Simply saying “more training” is not the way to change a culture.  Knowing exactly what you want your organization to represent will let you determine the goals and the means for achieving those goals.
• When you bring people outside the organization into your group, why are they coming?  Do you want them to conform to your own culture, or do you want them to change the culture?  If you are brining a new leader into your organization, you are normally expecting this person to lead a culture change.

I certainly hope my beloved Fighting Illini find the right person to change their department’s culture.  As someone who demands excellence from myself and those around me, I expect nothing less than from my alma mater’s athletic program.

One of the biggest questions I hear from others looking to change careers is, “How can I gain experience in a field where I have no experience?”  Today’s job market is not exactly the best environment to switch careers, but working for free may be a way to get your foot in the door.

There are obviously no firm rules about working for free, and it better be a short-term situation.  However, if you are committed to working in a particular industry or for a particular company, this may be your best opportunity.

My advice to you would be to sign a written agreement stating exactly what you will be doing, for how long, and what the next options may be.  You do not want to be in an open-ended agreement – you need to put your foot down and set a boundary of what is free and what you want to do for compensation.  I learned this lesson the hard way, and it is not fun when you want to start charging for your services or to be paid by an employer.

Tough times call for creative measures.  As the linked article states, working for free may be the way to stand out when nothing else will work for you.

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When my wife and I started Dave Ramsey’s Financial Peace University in our church this winter, I had no how much it would transform how we think about our money.  We were always the people who looked at our check register and were happy if we had more in it at the end of this month compared to last month.  We had made half-hearted attempts to create a budget in Quicken, but it never seemed to work.  We had never been big credit card users and bought a used SUV in 2007, but we had always thought we could do more with our money.

It turns out we were right.  We first made a commitment to each other that we were serious about budgeting our money.  Are we perfect?  Absolutely not.  We forget a category every so often, we’re learning when we spend more on special categories as we go along, and we occasionally put a carry-out pizza on a debit card instead of paying cash.  However, our efforts have  resulted in significantly reducing our car loan.  We will likely pay off the car loan by the end of this year and only have a house payment for our debt.

If you turn reducing your debt into a game of “how much more can I do this month compared to last month?”, you will see the benefits right away.  It has made a big difference in my family’s financial health!

I have always been a fan of diversifying my investments.  I come by my opinions by experience, by my educational training, and by plain old common sense.  I am a strong believer that if you spread all of your eggs into different baskets, at least some of those baskets will remain upright and not scramble your eggs.

Two weeks ago, I found a great chart that validated my thinking.  I am a regular listener to Brian Preston’s Money Guy podcasts. Preston does an absolutely fantastic job dissecting personal finance topics, and I highly recommend searching for his podcasts on iTunes.  Preston provided a chart to his members showing how important diversification is.  While I will respect Brian’s premium membership group and not share the graph, I will explain the concept.  Fidelity created a chart that looked like the periodic table we remember from high school science class.  Each investing class was color-coded, and returns from 1998 to 2009 year-to-date were charted.

If you saw the same classes always near the top or always near the bottom of the chart, then diversification would not make much sense.  However, the chart looked like a Rubik’s Cube after mixing the cube.  Colors were all over the chart, clearly showing that all asset classes have their good years and bad years.  There were very, very few instances of an asset class remaining at the top or bottom of the table.

This chart reaffirmed my belief that diversification is important.  If we invest in a single stock or single asset class, it is like betting on one number for a craps roll.  I could never understand craps until I went to Las Vegas and my friend told me to always bet on the “come” bet.  This was the bet where you could win in a number of different ways.  Diversification works in the same way. Considering I won $160 at the craps table with my friend that night, I liked the diversification strategy at the craps table.  Despite all of the turmoil we’ve seen in the market, I don’t think I’ll be moving away from diversification in my investments anytime soon.

I feel like I have a very unique perspective on this topic because of my educational background.  I attended the University of Illinois in the mid-1990s, and I had my share of huge lectures.  I spent several classes in a 2,000 seat auditorium with 800-900 students while a professor stood on the stage and lectured.  These classes were introductory history and economics classes, and many universities have these types of classes.  I earned my MBA from Indiana University, but I only spent four weeks on the campus in Bloomington.  I took nearly all of my classes on-line through web-based software and teleconferences.  My wife earned her master’s degree through the University of Phoenix completely on-line.  She was a single mother when she earned her degree – there was no way she would have earned her degree otherwise.  Starting next spring, I will teach a night class in personal finance at a local university lasting five weeks.  The class meets once a week for four hours, and we will interact through phone, e-mail, and software.

The current backlash regarding MBA education is also a major consideration.  There is no shortage of criticism about how MBA programs have developed graduates with inflated senses of accomplishment and a lack of ethics.  Some go as far to say that MBA education was a primary culprit of the economic crisis.  While I disagree with those who squarely blame MBA education and graduates for the mess we are in, there is some merit to the argument.  Henry Mintzberg, a well-respected professor of management in Canada, passionately argues on his website and in a recent Harvard Business podcast that graduate business education must radically change.

One thing I am convinced of is that the traditional model of education will change.  There are simply too many signs of disruptive technology.  If you read the linked article above, parchment from the 12th century shows a teacher in front of a group of students.  In other words, the general education model has not changed for nearly 1,000 years.  The advances in technology make it much easier to interact and receive information from anywhere.  For example, my future teaching employer’s software allows you to look at material through an iPhone or Facebook.  If you have a smartphone or an iPod Touch, you can take your class.  You will not need to be on campus or in a class.

I believe the following disruptions will occur over the next 5-10 years:

• The 1,000-person lecture in a huge auditorium will cease to exist.  Technology will allow students to view a lecture from their computer or smartphone, and attendance will be taken.  Students will be required to answer periodic questions to verify they actually viewed the entire lecture.
• More partnership classes will take place between universities when there are not enough students to offer a class.  Suppose you are a student at a small college that does not offer entrepreneurship classes.  Now suppose there are 40 other students at 15 similar universities.  These universities will network to offer a common class that gives students more options.
• I completely agree with Henry Mintzberg that graduate business education will radically change.  The traditional MBA, whether taken on campus or on-line like I did, is not keeping up with the demands of business.  I was seven years into my career before taking my MBA, and that still might have been too early.  I believe the MBA will evolve into specialized graduate programs for specific fields like finance or health care.  The nature of these programs will require significantly more experience than the 4-7 years of experience many MBA students now have.  These programs will likely be more like extended executive education sessions that are prevalent today.
• More and more students will supplement their education by downloading open courses from iTunes.  I have experimented with two entrepreneurship courses.  They are not bad at all.  At worst, they are alternative viewpoints one can use for an existing class.  At best, they could be part of a “hybrid” educational program using web-based tools and open course programs like those found on iTunes.
• More and more instructors will be like me – people without doctorates who enjoy teaching and have significant real-world experience.  There will ALWAYS be a place for PhDs who do the majority of university research.  We absolutely need these special thinkers and their passion for research to uncover new ideas and create new cutting edges.  However, the demands and meager resources for PhD students mean the opportunity costs are high to continue education.  I do believe more programs will offer part-time PhDs with more experiential learning mixed with pure research.

These are extremely exciting times for education.  There will always be a place for the large research universities like my beloved University of Illinois (Go Illini!).   However, just like other industries like newspapers and computing, technology will rapidly change how we obtain the education that is critical in today’s knowledge-based economy.

When you are trying to start and grow a business in this environment, every single improvement to your customer experience is a major benefit.  Customers are so much more selective when money is tight, so a small difference between your customer service and that of your competitors can spell the difference between a growing business and a failing one.

The attached blog post from Fox Business Network’s Dagen McDowell shows how Chick-Fil-A has emphasized making their customer experiences better through employee training.  If a fast-food company can convince employees in a high-turnover business to take the initiative and show more than indifference, you can make a difference in your own customer service.

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Inflation is a fancy term for the price of money going down.  Prices go down when two things happen – supply goes up or demand goes down.  Think of the last clearance sale you saw at a clothing store.  The store likely had a large supply of clothing, so they had to mark prices down in order to get rid of the inventory.  When the government continues to increase the money supply by deficit spending like the “stimulus” plan or the “cash for clunkers” plan, the price of money goes down.  When the price of money goes down, that means you need more money to buy things.  This is why inflation causes the price of gasoline, milk, and other basic items to increase – sometimes dramatically.

For an economist to say that the current levels of national debt and deficit spending does not present a risk of inflation is, to put it bluntly, delusional.  We have seen this before.  The massive amounts of government spending during the 1960′s “Great Society” caused terrible inflation in the early 1970s.  The huge levels of government spending during the mid-2000s led to $4/gallon gasoline in 2008.  I wish politicians from both parties would grow a backbone and start remembering that supply and demand laws do not go away when votes are on the line.

I have my own opinions on how health care reform should take place, but I will not share them here.  I am more interested in the lack of ANY real attempts to legitimately persuade others.  When trying to persuade another person to accept your own ideas or beliefs, you must appeal to their emotions while giving them enough facts to justify the decision.  What we are seeing out of both sides of the health care debate is simply disgusting.

From one side, we see references to companies as “villains” and of citizen organizations as “astroturf”, a reference to fake grassroots.  The other side is using Nazi symbols and referring to opponents with the names of specific Nazis.  We have really come to a point where debates resemble sports-talk radio shows where he who yells loudest wins.

My advice to those supporting the current health care bill is to recognize that they must demonstrate that insurance companies and medical companies have a place in the discussion.  To isolate the groups most affected by any health care reform is ridiculous.  The opponents need to realize that shouting and references to despicable past individuals only fuels a fire.  The opponents will do much better by demonstrating case studies of how people would be impacted by a government-run health system.  The supporters need to show convincing evidence that the fears of many opponents – that health care will be rationed – simply are not true.  The supporters need to show how health care will truly treat those who are ill, and the supporters need to tout any benefits related to information technology and preventative care.

We all recognize there is a health care crisis in this country.  The obesity statistics, levels of inefficient service, and difficulties with health insurance companies are real and well-documented.  Instead of demonizing the opponents, both sides need to appeal to the emotions of undecided people with real-life examples, understandable statistics, and the ability to help determine “What’s in it for me.”

As you start this week, think about how you currently define yourself.  Do you define yourself by a job?  Do you define yourself by a single activity?  If so, think about all you have to offer professionally, personally, and in other areas.  The best people define themselves by core values and the complete picture of who they are.  Those who define themselves by a noun, as I believe Brett Favre does, sometimes lose perspective.