Deep pockets + High price tags = Lack of Competition

We hear a lot about mergers these days.
Like the proposed AT & T/Time Warner merger — an $85 billion deal.

Large companies dominate the American economy.

According to the Census Bureau, more and more employees are likely to work for large companies.
(In retail is almost half of its workforce.)

What are the implications?
Among many others: employees with stagnating incomes.
Stanford economists and other business analysts have data showing how in the past companies’ profits were spread around to all.
Now the big pay raises are most likely to be at the top.
The rest — not so much. Or not at all.

Data from the Labor Department shows the big players taking in a larger share of sales and profits.
Larger share than ever before.

To be sure, big mergers make good things happen that benefit us all.
However, all these large companies will send one thing to the “endangered list species”:  COMPETITION.
And competition is good.
We don’t want to lose it.

N Pearcey said well:

“Competition is always a good thing.
It forces us to do our best.
A monopoly renders people complacent
and satisfied with mediocrity.”

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Offering $3,000 to settle a $100,000 debt

Several days ago I gave a talk about what it takes to run a business.
And the important role finances play in its long-term success.

Over the years I’ve known business people who were thrifty with their money.
And always paid their bills on time.
I’ve also known people at the opposite end of the spectrum.

Like in this Tax Court case I’ve read recently.

An insurance broker fell behind paying taxes.
For over two and a half years.

With fines and penalties the amount owed to IRS was around $100,000.

When the Notice of Levy came the business owner took the OIC route:
made a $3,000 offer to IRS.

(The IRS can accept OIC (offer in compromise) in tax cases when there is doubt they can collect the full amount of the tax owed.
Mainly because the taxpayer’s assets and income are less than the tax liability.
In this case the $3,000 would be “payment in full” for the $100,000 debt.)

IRS didn’t accept the offer.
The insurance broker took the matter to court.
But the Tax Court sided with IRS.

Neither the IRS nor the Tax Court felt the taxpayer qualified for an offer in compromise.

Here is the broker’s financial information:
$16,621 monthly income; $16,847 monthly expenses.

(Included in the monthly expenses: approximately $7,000 housing expenses; and $1,200 monthly lease payment for a luxury car.)
$980,000 in assets; $922,854 liabilities.

Healthier bank account
Poor finance management leads to a stressful life.
(Whether you are running a business or not.)
And numerous studies now show high stress is a contributing factor to poor health.
The cure is simple: spend less!
You’ll lead a healthier life.
And even your bank account may get “healthier.”

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An increasingly popular “language” in marketing

An abundance of information is forcing brands to look for more effective ways of connecting with customers.
Corporate research shows the increased popularity of a new way of communication: emojis.
Why emojis?
Because it allows us to say more with less.

More companies are now incorporating emojis in their marketing strategies.
They want to target specific groups. And also collect information as to preferences, etc.
The latter will help them improve future services.

In a digital world, an emoji seems to be a great vehicle to accomplish all of that.

Marketers are also turning their attention to the most fluent “speakers” of this language: Generation Z.
Millennials are getting old, obviously : )
(Actually more than 90 percent of people on line use emojis. And that’s across generations.)

Not everyone agrees
To be sure it’s not all smooth sailing. Sometime misunderstandings can happen.
(Because some don’t speak fluent emoji; or speak it with an accent ; )
Kidding aside, some find their use inappropriate in a professional setting.

Surprisingly, many advertising executives feel that way.
(A survey of the American Marketing Association shows 60% of marketers think of emoji use in advertising as unprofessional.)
Ironically, executives across industries are more open to the use of emojis than the people working in advertising.

And did you know emojis can bring out the artist in you?
You can use Lightriks, a startup founded by couple of computer science PhD’s, to unleash your creative side.
And transform your selfie into an emoji.

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Top 3 Habits of Highly Productive Giving

I’ve read an interesting article, Beat Generosity Burnout, written by Adam Grant and Reb Rebele.
In the article, published in Harvard Business Review, Grant and Rebele give tips on how to be generous, help others and still have time, and energy, to pursue your own goals.
The authors spent four years studying what it takes to be both, effective and altruistic.
And they came up with 7 highly productive giving habits.

Here are the top 3:

    1. Prioritize the help requests that come your way — say yes when it matters most and no when you need to.
    2. Give in ways that play  to your interests and strengths to preserve your energy and provide greater value.
    3. Distribute the giving load more evenly — refer requests to others when you don’t have the time or skills, and be careful not to reinforce gender biases about who helps and how.(Grant and Rebele in HBR)

Bottom line is: identify something that you do well. Something that you enjoy doing.
Then use that skill/knowledge to help others. And do it in such a way that it delivers the most impact.
Sound advice.

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Saying NO to good things

Just received the work from a client.
It seems like a mountain of paperwork. It’s amazing how he was able to fit everything in one fat package!
Soon I’ll head out to an appointment; but I have few minutes so I’m taking a quick “inventory” of the paperwork.

Just then the phone rings.
I answered it and continue sorting the papers on my desk.
“Is this Marina”, asks a man’s voice.
(Marina?! Obviously someone not familiar with my name.)

A “tax doctor” with terrible bedside manners
“What can I do for you?” is my short, irritated reply.
“Where are you guys located?” is the next question coming from the guy.

Now my irritation went up several notches.
And so did my voice.
“What Can I Do For You?!” I asked.
“I got your name from Ms. A,” the voice says.
He continues, “Mr. B also said you are the right person to come for help; they both said you are smart and can help with my taxes.”

Just great!
I know the two people he mentioned: one is working with some of the biggest dairies in the area.
The other is a manager at an outfit where many contractors go to buy their work supplies.

With much more civility in my voice, I continue the phone conversation; and tell him I don’t take any new tax clients at this time.
(For a split second I did consider breaking my self-imposed rule and taking him as client.
After all we did start on the right foot: me yelling and him telling me I’m smart.)

I gave my caller the name and number of an experienced tax professional; and I thanked him for calling.

(Note to self: answer the phone in a much friendlier manner! And I did.
For several days.
I would be surprised if I’m not on the top of the “call-back list” of all the sales people that called.)

Why say NO to good ideas and projects?
Getting a new client is obviously a good thing. Then why say NO?
Time. I have several work projects running simultaneously — and can’t add anything else to the schedule.

We all have so many requests for our time: family, work, volunteering in the community.
A never ending list of projects.

We need to learn to prioritize. And focus our efforts where it’s most needed.
Where it has the most impact.

“We need to learn the slow ‘yes’ and the quick ‘no’.”
Tom Friel

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Your Money

“In this time of great upheaval in our nation’s history, find peace in the things that remain constant—one of them being that someone will always try to use taxes to steal money.”

That’s an excerpt from an article written by Jeff Stimpson — he is referring to how “creative” some people get around tax time.

Offshore accounts
Every year IRS provides a list of the most commonly used tax scams.
As “usual” the wealthy are still hiding their money in offshore accounts.
(IRS is making some progress in this area; in the last 8 years almost $10 billion have been collected through Offshore Voluntary Disclosure Programs.)

Plain old stupidity
Next are the tax refunds. And how scammers use certain tools to get bigger and bigger refunds.
IRS receives refund claims, “based on bogus theory that the federal government maintains secret accounts for U.S. citizens and that taxpayers can gain access to the accounts by issuing 1099-OID forms.”

Stimpson concludes with:
Maybe we can add to the list of tools “plain old stupidity.”

Fluffy and Fido
(This one is my favorite : )
Many taxpayers keep trying to deduct Fluffy’s food; and Fido’s grooming. After all cats and dogs are part of the family.
And expenses should be deductible, right?
(Yes, there are exceptions but 9 out of 10 that’s not a deductible expense.)

If a taxpayer insists on filing a return with this type of expenses it can be costly.
$5,000 is the penalty for filing what IRS considers a “frivolous tax return.”
(IRS has no sense of humor, obviously.)

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Reluctant traveler

That’s me. I’m probably a less enthusiastic traveler than many people I know.
(I’m thinking about this because my family asked me again when I’m going to visit with them.)

Ironically, in spite of my reluctance of traveling, I have periods of time when I probably log more air miles than an airline employee.
Like the time when I moved to Idaho.
I had several tax audits going concurrently so I kept hoping on the plane and going back and forth between Idaho and California.

Then a friend needed help (health problems).
So I put the audit on hold and went to New York for several weeks.

But it was the year after when things got more “interesting”.
It started out with a trip to Hawaii.
From there I went to Las Vegas for a tax seminar.
Back to Idaho.
Then went to New York.
From there to Madrid, Spain.
Then Bucharest, Slatina, Arad — all three in Romania.

Missing luggage
A month later I’m back in the U.S. at the airport going through customs.
I have no luggage; it got lost somewhere.
I’m tired and cranky; and the custom officer is questioning the whereabouts of my missing luggage.

Let me just say I’m not at my best when I get off the plane after so many hours.
It seems to me that he is also questioning my Eastern European origins.
That’s how it seems to me.
(Remember I’m tired and cranky.)

So, what do you think I do in that situation?!
Well, I set out to “prove” to the officer my birth place was indeed in Eastern Europe.
And I speak the language.
(Incidentally, I’m fluent in English and Romanian. Also know some French; and some Russian.)

One of us had more smarts than the other
Most of my “commentary” was comprised of two Romanian words: Stupid and Idiot.
Yes, you are reading correctly: the two words are similar in both, English and Romanian;
and  the only difference in pronunciation is the accent (its placement).

Obviously the customs officer had no problem understanding what I was saying.
Or the meaning of it.
Well, one of us had more smarts than the other.
(Hint: it wasn’t me!)

The officer handed me my passport, and said politely:
“Thank you, ma’am. You may go now.”

The moral of this story?
When I come back home, and go through customs,
what I want to hear my customs officer say is, “Welcome home!”

To the man who worked in customs that day:

Thank you for being an officer and a gentleman.

And next time I visit with family I’m going to keep my travel plans simple; and fun.
I’m going to start with U. K.
My sister’s son and two daughters live and work in London.
They keep telling me I “need” to be introduced to London’s night scene.
(Judging by what they post on Facebook I’m finally going to make good on that exercise resolution — at least while I’m there : )

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It’s complicated — the proposed border tax

We all herd of the proposed U.S. Border tax — its major goal is to boost U.S. manufacturing.

There is a growing concern that this proposed border tax would violate international trade rules.
(By subsidizing exports and penalizing imports.)

Besides manufacturing, the border tax would affect other industries as well.

Here are some of its implications for the gas and oil industry:
On the plus side: U.S. oil firms would have an increase production — and that’s worth $20 billion.

On the negative side: Mexico could retaliate (by placing a border tax on American goods).
If that happens U.S natural gas exports would be severely affected.
(Mexico is the largest buyer of U.S. liquefied natural gas.)

Americans for Prosperity — a conservative group founded by David and Charles Koch — are against the border tax.
They say that we would pay more for imported goods; and called this border tax a “massive tax increase” on U.S. consumer.

It’s complicated.

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Air pollution affecting our brain?

“… it’s a hugely exciting time to study the connections between pollution and the brain”,
says Michelle Block,  a neuroscientist at Indiana University.

The above excerpt is from The Polluted Brain — an article written by Emily Underwood.
(Published in the Science Magazine.)

Underwood writes:
“Some of the health risks of inhaling fine and ultrafine particles are well-established, such as asthma, lung cancer, and, most recently, heart disease. But a growing body of evidence suggests that exposure can also harm the brain, accelerating cognitive aging, and may even increase risk of Alzheimer’s disease and other forms of dementia.”

18 epidemiological studies — done by scientists from Germany, United Kingdom, United States, and other countries — are raising serious concerns about the health risks associated with air pollution.

Even more alarming is the effect air pollution has on children.
Studies show a significant drop in their IQ
when they live in or nearby highly polluted areas.

Throughout the article reference is made to the work and studies of numerous neuroscientists, from U.S. and abroad; and what are some of the known effects on people and animals.

Underwood concludes with:
“…the goal for policymakers worldwide should be to push down levels as far as possible.”

And cites Finch, a USC neuroscientist:

“When all the research is in,
I think [air pollution] will turn out to be just the same as
tobacco—there’s no safe threshold.”

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Drones and Birds of Prey

Drones delivering pizza (in New Zealand).
Delivering medical supplies in Rwanda. Or flying supplies to hard-to-rich construction sites.
Since the FAA’s approval of drone delivery in 2015 many investors are hedging their bets on drone related tech and services.

Dubbed the “UPS of the next-generation”, drones are poised to make an impact across many industries: fast food, medical, agriculture, and others.

From toy-drones used for backyard fun to practical use of commercial type drones — we are going to see more and more of them.

Businesses, large and small, are increasingly making good use of commercial drones (multi-rotor, fixed-wing, single-rotor helicopter, and fixed-wing hybrid).
Price range: $5,000 to more than $100,000.

Some are easy to operate; and best used for aerial photography.
Others take more training to operate them safely;  and can cover long distances, therefore more suited for more complex jobs.

Drones, and their operators, do face one big challenge. (And it’s not coming from FAA.)
Venture to guess what it is?
They are attacked by birds of prey.

A recent headline proclaims:
“Hawk collides with drone and wins the battle handily”
Complete with a picture of the drone “before” and “after” the collision.

Someone else describes how eagles keep attacking their fixed-wing drones.
And concludes with:
“…these huge birds are a menace.”

Well, it all depends on which side of the fence you are on.
Imagine you are the hawk.
You are hungry. And you see what it looks to you like dinner.
Then… well, then the rest.

Unlike the above story, the birds coming in contact with drones’ rotating blades are on the losing side most of the time.

We all know: drones are here to stay.
In less than ten years, FAA estimates we’ll have a million drone flights. Daily.

From agriculture to fast food, to delivering medical supplies — drones are an efficient mode of transportation

Our challenge is to put them to good use AND find solutions to preserve, and protect, our wild life.

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