Or, why I still haven’t bought a mattress

I’ve intended to buy a new mattress for, oh, about a year now. I’ve actually gone to Macy’s and lain down on probably 20 or so mattresses to figure out what I like and don’t like. I’ve looked at reviews of mattresses online, and at one point was pretty close to pulling the trigger.

But I haven’t. This is probably a 10-year investment, and I feel a lot of pressure to make the right choice. So instead I’ve continued to sleep on my too small, cheap Sealy that gets way too hot in summer and is surely less comfortable than even the least comfortable mattress I’ve tried out.

Even if there is a better mattress at a better price out there for me, getting a less-than-ideal mattress is better than the status quo. So why can’t I make a decision?

One problem might be that I simply have too many options to pick from.

In the mid-90s, Columbia professor Sheena Iyengar and Stanford’s Mark Lepper set up a tasting booth with jams at Draeger’s Supermarket in Menlo Park. One day, they set up a booth with a limited selection of six jams. Another day, they set up a booth with an extensive selection of 24 jams.

Customers could sample as many as they wanted, but on average, no matter which booth they encountered, they tried between one and two jams.

The stand with the extensive selection attracted more shoppers than the limited-selection booth, but the limited-selection booth was far more effective in getting people to purchase. In fact, while 30% of shoppers who tasted at the six-jam booth ended up buying a jar, only 3% of shoppers at the 24-jam booth bought one.

In a separate study, they had undergraduate psychology students watch Twelve Angry Men and gave them the option to complete an essay in response to it for extra credit. (The undergrads didn’t know they were part of a study. “Intro to Social Psych” students, take note!)

One group of students could choose from six essay topics. The second group chose from 30 topics. But while 74% of the six-topic students ended up completing the assignment, only 60% of the 30-topic students turned it in.

In both cases, you’d think that having a lot of choices would be viewed by the subjects as a good thing. Indeed, the test subjects reported enjoying making decisions more when they had more to choose from.

But having a lot of choices also made them think more about the consequences of making a “bad” choice or passing up potentially “better” options.

“Maybe jam #15 would taste even better than jam #7! Ah, I’ll just think about it and come back later.”

Don’t let “great” be the enemy of “good.”

There are several theories as to why we can’t make decisions when presented with too many choices. Some people think it’s not the presence of a lot of choices themselves, but the absence of information about the choices. Maybe if those jam-tasters had put all 24 jams in their mouths they wouldn’t have had a problem picking one.

Likewise, maybe it’s so hard to get people to invest because there are seemingly endless companies with which to open accounts and then even more mutual funds to choose from.

But here’s the thing. Investing in any mutual fund is probably going to be better than cash. Your simple stock/bond allocation matters much more than whether you choose the S&P 500 ETF or the S&P Value ETF.

Likewise, almost any mattress will be better than the cheap-o mattress I have. Those jam tasters, assuming they liked one of the jams they tried, would be happy eating it. And those college students who couldn’t pick from 30 topics would have gotten the extra credit had they picked any of them.

Here are some other common “enemy of the good” scenarios I see frequently from myself and others:

— Waiting for the perfect moment to ask for a raise.
— Waiting for the right economic climate or set of personal circumstances to start your own business.
— Waiting for the low-point of the market to start investing.
— Trying to find the perfect diet or workout regimen. In the meantime, continuing to eat ice cream and hot dogs.
— Looking for the right time to change careers and the perfect career to change to (assuming they’re unhappy in their current spot)

In all these scenarios, simply doing anything would probably lead to a better result than doing nothing.

Limit your choices to inspire action.

Let’s return briefly to my mattress problem—which my occasionally aching back and droopy eyelids can attest is all-too-real. What I should have done (and what I should do) is set a scope of research to carry out before making a decision.

So say I decided to visit three stores and then return to my favorite and buy it. Would I get the best mattress ever conceived by man? Probably not. But that’s enough testing to get me to a pretty darn good mattress without leaving endless possible Googling, review reading, and shopping.

In the same way, maybe you can set a deadline for yourself to ask for a raise. If the opportune time hasn’t arisen by, say, May 20th, just ask and get the ball rolling.

Anyway, if you have other ways to avoid decision paralysis, let’s hear them. My back will thank you.

The difficulty with an improving economy

Every once in a while, I run across a comment on a blog or news story that reads something like this: “If you’ve been unemployed for more than a year, you’re not looking hard enough.”

It’s mean, but I’m sure the writer believes what he says. They probably have a job and run across “Help Wanted” signs every once in a while, and can’t reconcile that with the fact that more than 6 million people have been out of work for more than 26 weeks.

But now the jobless face another problem. If you do have a job right now, you have more job security than at any time in the last decade.

On Friday, the Labor Department released its monthly report on the number of openings, hirings, and firings that employers posted in January. It’s a little different than the regular unemployment report that comes out at the beginning of the month. That one tells you how unemployment overall moved in the previous month. Whereas this one tells you how much hiring and how much firing added up to the overall unemployment figure.

The last few months of reports have been mostly the same. Firings have basically stopped. In fact, they’re at their lowest point since the government started tracking them in 2000. But hirings haven’t picked up at all, which leads to this worrisome conclusion (as stated by an analyst): “Generally speaking, all the data seem to suggest that if you already have a job, the labor market probably doesn’t seem so bad, but if you’re looking for a job, there’s been almost no job market improvement over the last few years.”

In other words, if you have a job, this economy doesn’t feel so frightening anymore. If you don’t, it’s still scary as hell.

When long-term unemployment becomes a fact of life

America’s traditionally been a country with rapid layoffs but rapid hiring. You’d be much more likely to lose your job at any given moment, relative to a country like France. But unlike the French, an unemployed American could get his job back quickly.

In fact, unemployment in countries like France, Greece, and Spain has been at 8% or so or higher for years. And at any given time, most of those people tend to have been out of work for more than six months.

Yet, you don’t get the sense of urgency in fixing the problem that you get here. At one point, unemployment stopped getting worse in those countries, and the governments and populace settled into complacency. Maybe 8% unemployment was as good as they could do.

We don’t yet know when and if the job-creation machine will revive in the U.S. But we’re already starting to see congressmen and some economists declare that the government can’t continue extending help to the long-term unemployed in the name of fiscal austerity.

It’s going to be much easier for them to focus on the debt if the average man on the street no longer fears that he’ll lose his job.

Unemployment is moving from “our” problem to “their” problem.

I have a job. And that BLS report I referenced tells me that job’s safer than it has been in 11 years. So now, unemployment isn’t so much an imminent threat that I want government to urgently address, but the problem of an ambiguous group of people who I only know through friends of friends or family.

Pretty soon, simply telling people that the unemployment rate is 9% isn’t going to make people bat an eyelash, and I wouldn’t be surprised if some politicians or jobseeker services start taking a lesson from foreign NGOs.

Are you more heartbroken by the estimated 925 million people who lived in hunger in 2010, or by this?

I

It’s no accident that the narrator said the name “Michelle” six times. No accident either that once you start giving, you’ll get a picture of the child and updates on his or her progress.

Economist George Loewenstein and Deborah Small ran an experiment where they presented potential donors a letter that requested money for a house being built for a family by Habitat for Humanity. In one version of the letter, which described the families, they were told that the family “will be selected” for the home. In the other version, they were told that the family “has been selected” and was just waiting for the donation.

Donations to the home for the family that “has been selected” were significantly greater. The reason? The economists think that making the beneficiary concrete and identifiable was all it took to pump up the giving.

I hope it doesn’t reach the point that we need to run commercials with panicked jobseekers in order to keep them in the public consciousness. But as time goes on, let’s not forget that one in 10 of the people we pass on the street every day are probably out of work.

The pain of being paid by the hour.

Would you work less time for less money?

I would. I’d take a 20% pay cut to never work another Friday again without hesitation.

I don’t get paid hourly, but if I did, I might answer differently. In a study of U.S. Census data a couple years ago, Stanford professor Jeffrey Pfeffer and University of Toronto prof Sanford DeVoe found that workers who get paid hourly would work more to get paid more, if given the choice. That answer held true even when the professors controlled for income, age, marital status, gender and educational attainment.

What might be happening? When you work hourly, it seems you think of time in terms of billable hours. When a lawyer watches his kid’s baseball game, he’s ticking away in his head the $100 an hour he could be earning by working.

We non-hourly folks don’t have as strong a connection between the hours we work and the money we earn. No time cards to file. No overtime to earn. But no penalty for working less time than usual either.

But Pfeffer and DeVoe found that you could make exempt employees (that’s HR-speak for “salaried”) feel just as harried as the hourly workers, simply by making us calculate our hourly wages. So somebody who makes a $100,000 per year salary is more likely to opt to work more for more money if you tell him he’s making $48 per hour.

And that will seriously stress you out.

But let’s get back to your kid’s baseball game. You should be enjoying time spent watching your son or daughter, not stressing over income that you lose by not working at that moment. Unfortunately, that’s exactly what hourly workers supposedly do.

Another Pfeffer/DeVoe collaboration discovered that getting a raise made people more impatient. If the value of your time goes up, you felt greater pressure not to waste it.

So, in effect, that lawyer has less fun at the kid’s baseball game if he makes $150 per hour than if he makes $100 per hour, because now he values his time more.

I’m waiting for the study that shows a causal link between making more money and spending less time on frivolous, “low value” activities, like watching T.V. Maybe it’s the high salary that keeps people from sitting in front of the tube, rather than the T.V.-watching that leads to the low salary.

One solution? Delegation.

Since I began a new job several months ago, I’ve felt much more time pressure. I do get paid more, but I’d like to think I actually have less time, too.

So far, I’ve dealt with it in a few different ways. Method number one was that self-imposed penalty if I didn’t work on the blog that I’ve talked too much about.

While I did complete the six-month term of that contract while hitting my goal of two posts per week, it made clear to me that my time scarcity was not just an illusion brought on by poor focus but an actual time crunch.

I’ve done a few things to try to rectify that.

— I cut cable (but getting a gift of Netflix did not help one bit).

— I’ve pushed back just a tad at work, not doing things at home that I’d normally have done just to get ready for the next day.

— Lastly, I’ve tuned down the number of posts on this blog to one per week, and I haven’t really put much effort into growing it by writing guest posts, etc.

It’s the cutting down on PopEc, that bothers me the most, because I really enjoy doing it. So I’ve been trying to think of ways to cut down on the other stuff to bring some of the Pop back.

If you feel like you’ve cut out as much work and as much low-value fun time as you possible can, the only other solution is to farm out some of the necessary stuff to somebody else. So for the first time, I’ve (gulp) started to use a personal assistant.

My first month with an assistant

No, it’s not the hard-core, $35,000-per-year dedicated kind. Instead, I pay $35-per-month for an assistant to take 15 tasks off my hands that can be done over the phone or internet. I picked FancyHands in part because I saw the owner give his spiel in person, but there are a lot of options out there.

If you haven’t used a personal assistant before, you won’t believe how difficult delegation is at the beginning. It’s not a natural thought process to think, “My assistant could do this,” instead of just doing it yourself.

My first tasks were simple restaurant reservations. Yes, it takes me about as long to type out the request in an e-mail as it would take to call myself. However, it lets me decide when to spend time to make that reservation. I can write out the task at 3 AM and let someone else remember to call the restaurant when it opens the next day.

I’ve also tried them out for more intensive tasks. Last month, I was in the market to buy a limited edition print by a certain artist as a gift. Galleries are notoriously bad about listing current inventory online and almost never post prices. So the assistant called up nine or so galleries in the NY area to see what was available and at what cost. That would have taken me hours and was worth more than $35 in itself.

It’s still a process though. If you’re similarly clueless about delegating, check out this great How-To by Inc. or hilarious narrative in Esquire where the writer literally delegated his entire life to assistants in India.

My Fancy Hands assistants are based in North America—communicating with native English speakers saves a lot of explanation time. Anyway, check them out, if getting those extra hours back in the day is worth the money to you, too. (N.B. That’s a referral link that gets me a free month of service, rather than money, if you sign up.)

Didn’t mean for that to be a long commercial. But maybe, just maybe, a little delegation will help me get back that last hour in the day and spend more time here.

In the meantime, how do you get back hours in your day? I’m obviously looking for ideas.

Daydreamers, distractions, and new ideas

I once worked at a company that had a computer policy from the dark ages. Dozens of websites—from Gmail to Amazon and even some news sites like Huffington Post—were banned. If you tried to access one of them, you’d get a warning message that continuing would automatically send a note to your supervisor. The idea was to eliminate distractions so we’d focus on work.

Not only did it make employees feel they were treated like toddlers, the “no distractions” policy might have helped stunt our creativity, according to a few recent studies.

It turns out, the most distracted among us might also be the most creative. And letting our focus go, from time to time, can lead to better ideas and higher quality work.

Holly White of Eckerd College and Priti Shah of the University of Michigan have done a lot of work measuring the creativity of people with attention deficit hyperactivity disorder (ADHD). ADHD starts when you’re young and makes it extremely difficult to focus and ignore distractions.

Recently, they took 60 undergraduates, half of whom had the disorder, and asked them to fill out a questionnaire, listing their achievements in creative areas, such as humor, writing, and invention.

Surprisingly, the students with ADHD ended up scoring higher across the creative categories.

The results mirrored one of their earlier studies. But lest you think those two were flukes, a separate study from Harvard and University of Toronto researchers found that those of us who are prone to distraction are also prone to come up with great ideas.

In that one, 86 Harvard undergrads were measured on their ability to ignore distractions, like the humming of an air conditioner or a nearby conversation. The kids who didn’t filter out all of those bothersome stimuli were seven times more likely to be rated as “eminent creative achievers” based on their past accomplishments.

A wandering mind recharges itself

My previous employer’s policy might have hurt its employees in another way: By sapping our abilities to focus.

Next time you walk into a coffee shop, pay attention to the smell. Nice, right? Now, sit down and read through this blog post again. By the end of the post, you might not even be able to pick up the smell anymore.

Why? Your mind had gotten used to the stimulus and is now discarding it as irrelevant information. That happens with other senses, too. If you focus your eyes on an object, objects in your peripheral vision will gradually “disappear” from your field of vision until you blink again.

The same blindness can hurt your performance on tasks if you apply relentless focus to them, according to Alejandro Lleras of the University of Illinois. He found that brief diversions, like checking e-mail, let your mind “reset” and give the previous task newfound energy.

Taking a break wipes the slate clean of all those details that you were taking for granted, kind of in the same way that it’s always a good idea to take a break from a draft before proofreading it. You’re always going to gloss over the same errors if you just focus relentlessly on the paper.

Lleras tested the idea by having a couple sets of students stare at a screen that flashed numbers and measuring when their attention span died. One set of students was told to memorize numbers and note when their number appeared on the screen. The other set was just supposed to focus on everything.

The second set’s attention span died after about 20 minutes, while the set with memorized numbers could pay attention for longer. Seeing the memorized numbers apparently broke up the monotony just enough to keep their attention going.

Reconciling the need for creativity with the need for productivity

There’s no doubt that some of this research butts up against earlier research on how distractions can destroy productivity. A UC-Irvine study, for example, found that after being distracted from a task, it took workers an average of 25 minutes to return to it.

It’s not that they’re contradictory…it just suggests that “being productive” and “being creative” can be mutually exclusive goals. Productivity can be task-oriented, whereas creativity lends itself well to deconstructed space.

How can you make sure you leave room for both? I’m thinking about trying these tactics.

1. Limit distractions. Sure, let your mind wander from time to time. But don’t let distractions force your mind to wander.

The classic distraction I can eliminate: The pop-up notification that I’ve received new e-mail. Nine times out of ten, new e-mails aren’t something I need to address immediately. Some don’t need to be addressed for hours. The catch: There are some e-mails I’d want to know immediately about. I just need to find a way in my inbox to ensure those senders still get prompt attention.

2. Instead, break focus on a schedule. One of my current problems is that I’m prone to mindlessly search for distractions. I click through my blog feed reader, CNN, Facebook, and Gmail, and less than 5 minutes later do the exact same thing even though the likelihood of anything having changed is extremely low.

There are services that can limit access to websites you select to certain times of day. Might not be a bad idea to give this a shot.

3. Have “creative” time and “productive” time. Let’s face it. There are times when you don’t need to be creative—you just need to get things done. If you are putting off painting your bedroom walls, it’s unlikely that a few minutes on Facebook will lead you to a creative way to get it done faster.

Similarly, I’m not sure how creative I want my accountants, airline pilots, and bus drivers to be when they’re supposed to be focused on their core functions.

On the other hand, most of us have jobs that require at least a modicum of creativity. I’ve come up with some of my best ideas while taking a walks around the block, daydreaming at lunch, and, yes, checking Facebook. It’s important to leave a couple hours in the day for that kind of stuff.

Finding the right balance of productivity and creativity is probably what separates geniuses from World of Warcraft addicts. And it’s amazing how little we know about what that balance is.

Do you think God wills you to succeed?

Lady Gaga thinks she’s been chosen by God for fame. So do Eminem, Aaron Rodgers (Packers QB), and Snoop Dog. At least, so says a story in the Wall Street Journal this weekend.

The article posits that the presumption of some that they are God’s chosen ones vaults them to galactic stardom, rather than so-so stardom. And of course, it carries that all-to-common journalistic disclaimer that scientists haven’t studied a link between God-believing and fame.

I’ll try to avoid the theology of whether or not God cares so much that you sing well or throw a perfect spiral. I think he’s more interested in your soul, brother.

But there’s something to be said about the confidence that believing in a divine helper gives you, and how that alone can make you more probable to become a success.

It’s an important question for teachers, coaches, and managers. If you want your students, athletes, and employees to succeed, how much does making them “feel good” about how they’re doing translate to actual success?

Lifting students up by their heart strings

A decade or so ago, a couple college professors at Florida State University used a survey of more than 4,000 students to gauge their intellectual and social confidence, their expectations for success, their motivation to succeed, past academic accomplishments, parental education, and so on.

Admittedly, a lot of the variables were interlocking. But the study concluded that having a high expectation that you’d succeed was the strongest predictor of actual high performance. Self-confidence was also correlated to doing well in school.

They didn’t ask where those expectations came from. There’s a good chance that part of them came from past academic performance. There’s also a good chance that they came down from the parents.

Yale law professor Amy Chua made a splash a few weeks ago with a book excerpt about her drill sergeant-like routines for her children. In short, her children were allowed little playtime and were expected to be perfect in school. That set off a fierce debate on parenting styles that is kind of superfluous to this blog post.

Part of her story did strike a chord. Her children were expected to be perfect. And they often were perfect. Put aside the insane hours of practice and study that got them there. I’m willing to bet that even if Chua stepped aside, the simple instillation in her kids of the belief that they could achieve perfect piano playing or math scores would go a long way to good practice and study habits on their own. If you think all that study will lead to a great grade, it seems more worth it.

Taking risks isn’t always a bad thing

I’ve written about overconfidence—especially in investing—a lot. I personally don’t like taking a lot of risk with investments, because the consequences of messing up can set you back in your savings by a very large amount.

But my opinion of taking risks in other areas, like entrepreneurship and career motivation, is a lot different. While the risk of being turned down when you ask a stranger to mentor you is pretty high, the consequences of being turned down are almost nil—just a little hit to your ego, maybe.

And that leads to a nice side effect of confidence in career-related matters. Even though some career moves are long shots, being crazy enough to take them anyway gives you a chance of scoring big.

Entrepreneurship can cost money. It doesn’t have to. A lot of times, it just takes a lot of hard work after your day job. If I told you that you’d definitely make a sustainable business after putting in, say, 20 hours per week for one year on top of your current work schedule, I bet a lot of you would take me up on it. Of course, I can’t say that, and I bet that’s why a lot of people, including me, don’t put in that time.

Does confidence make you run faster?

In high school gym, oh so many years ago, our coach gave a demonstration to try to show us how important “positive thinking” was. He called a student up to the front and had him try to hold his arms straight out like wings while the coach tried to push them down.

For the first part of the test, he criticized the kid’s strength and, generally, tore him down. His arms gave out pretty quickly. After a few minutes of rest, they did the test again, while the coach gave words of encouragement. The kid kept his arms up for much longer.

I remember thinking that the coach must not have been pushing as hard the second time.

Faux experiment aside, there is empirical research linking the confidence of athletes to how they perform.

In one study from the 1970s, a couple researchers had volunteers arm wrestle. One group was subtly encouraged in their strength while one was not. The encouraged arm wrestlers performed better.

Similarly, researchers have found that confident swimmers swim faster and confident gymnasts score higher. Put simply, winners think they’re winners.

And that’s why it astounds me whenever I hear about a boss berating a problem employee in front of peers or writing scathing criticisms in an e-mail. While it’s important for someone to know he messed up, there are long-term implications of shattering someone’s psyche.

Instead, I wonder what would happen if he or she put them on an easier project or teamed them up with stronger workers. Getting a few successes under their belts might go a long way to improving performance.

The yard and white picket fence have lost their sheen.

I don’t own a home and don’t think I ever will in the extremely expensive city in which I live. That’s more a happenstance than a conscious decision.

But it seems I lucked out. Owning a home has always made some people less mobile. Now, it’s a veritable anchor keeping many owners stuck in place.

As home prices start to drop again, most Americans have probably already wised up to the painful lesson of the housing bust: A home is not a piggybank.

Some Americans thought they were going to rely on home equity to fund part of their retirement. Wrong. Others probably thought by buying a home right out of college, rising home prices would let them sell and “upgrade” to a bigger and better home. Wrong again.

That makes it no surprise that more renters today say they’re more likely to keep renting rather than buy, according to Fannie Mae.

On the other hand, you’ve got mortgage rates near all-time lows, and seemingly smart investors saying that if you can buy a home right now, you’d be crazy not to.

I wouldn’t blame you for being completely confused as to whether homeownership nowadays is a good thing or a bad thing. But here’s how I’m thinking about it.

Boom times in the “Peace Garden State”

The recession did hit North Dakota. Its unemployment rate rose 0.8 percentage points between December 2007 and 2010.

But with 3.8% unemployment, you’d think residents in other states might be eyeing a move, if their employment situations truly were desperate.

North Dakota is going through an oil boom right now, which increases the need for petroleum engineers, drill operators, and all the retailers, doctors, and so on that would support them.

Granted the state is remote. It’s cold. It likely doesn’t have the cultural opportunities of a Miami or New York. When it comes down to it though, of the 15 million or so unemployed people out there, there’s got to be a bunch of families who decided to make the move, right?

Over the last few years though, the state has been literally begging people to come and take their jobs. The state has about 14,000 jobseekers, and the state-run employment website has 14,000 openings listed. You’d think that’s a boon for the state, but the truth of the matter is, it’s facing the kind of situation that makes businesses wary. If you can’t hire people, you can’t grow your business.

Where are all these movers to the Peace Garden State? (Seriously. That’s its nickname.)

Well, there’s a chance they’re stuck in Florida, California, Nevada or any one of the dozens of states that experienced huge drops in home values. Not only can they not sell their homes, if they did, they might owe money on their mortgages.

So even if they did become unemployed and desperate, they might not be desperate enough or have the ability to afford to forgo the tens of thousands of dollars it’d cost to leave.

Interstate migration was already on a downward slope before the recession started. I haven’t seen any research (yet) that analyzes how much that downward slope has shifted due to the recession, if at all. In fact, it could be that foreclosures are balancing out any homeowners who are underwater and anchored.

But that doesn’t mean it’s not happening on an individual basis. The anchor-home phenomenon is something we’ll be talking about as long as home prices continue to drop.

Do home prices have farther to fall? Is that even worth thinking about?

Over very long periods, home prices tend to track inflation. But at any one time, they might be below or above the trendline, leaving you wondering whether or not now is a good time to buy.

Sometimes the bust makes us forget how strong the boom was. During the housing boom, home prices grew nearly 20% per year on average—about 6 times faster than what you’d expect from inflation. That means, they could have even farther to fall. To get back to that historical trendline, you’d need to see home prices fall another 20% this year.

Even if you put down the full 20% on a new home, that scenario would wipe out all your equity and possibly leave you underwater. It doesn’t seem so crazy, given that there are still so many foreclosed homes for banks to worth through.

Sure, it might not happen. But that’s another thing keeping me from buying right now.

A broken maxim: Buy if you’ll stay for 5 years.

There’s a commonly held belief that buying makes sense as long as you don’t plan on moving for at least five years. That gives you time to build up equity—the first several years of a mortgage have a disproportionate amount of the payment going to interest.

Thing is, nowadays, who can be sure that you’re going to stick around for five years? Especially for young people, job changes can be rapid and frequent. It is said that the average Gen Y-er will hold seven jobs in his or her first 10 years of work.

It’s hard to reconcile that with a home purchase. Let me re-phrase the maxim: Buy a home only if you know you won’t lose your job, get transferred, or find a better job elsewhere. AND you have to say the same thing will be true of your spouse. Oh, and you probably shouldn’t buy a home if you think you might get a divorce (sadly common) also.

That’s a lot of ifs. And for me, it’ll probably keep me from buying for a while.

Granted, I’m skipping all the benefits of a home purchase. If prices go up, it makes living cheaper. There’s psychic benefit in having property. You can also remodel and repaint in ways that renters are restricted from doing. Does that outweigh the risk?

Anyway, looking forward to arguments for or against.

It’s not a “motivation” problem.

If you’re anything like me, self-motivation looks something like this.

Day One: “I need to get my act together and make more money!”

Day Two: Bought $20 book on career advancement. Very inspiring.

Day Three: Lots of options out there for advancement. Take classes? Career change? Ask boss for promotion?

Day Four: Man, there are a lot of important decisions to make. I’ll think about it after a quick round of Angry Birds. *Motivation: Dead*

What happened to all that enthusiasm on days one to three?

It’s harder to lift a finger than you realize.

Researchers from University College London asked participants to watch tennis matches and play referee. They’d make calls on whether the ball bounced in-bounds or out-of-bounds. Sometimes it would be close and sometimes not.

But before each test, the researchers told them that either in-bounds or out-of-bounds was the “default” decision. And they’d have to decide if they wanted to reverse the default, by lifting their finger from a button they held down.

On the close calls, they ended up being more likely to stick with the default, whether it was in-bounds or out-of-bounds. The referee could go either way with the play based simply on whether the researcher had said one or the other was the standard answer.

So what does that mean for my poor resolution to get a raise? I was faced with infinite possibilities, and that meant I was most likely to do…nothing. Think about it next time you try to motivate your kid with the “possibilities are endless” schtik.

So pretend for a few minutes that you’re a rat…

Now’s about the time that the ranks of gym goers—inflated by New Year’s resolution newbies—start to thin out. I doubt those people woke up today and decided being healthy wasn’t as important to them anymore. It’s probably not even that going to the gym was too “hard.”

Truth be told, if they could have gotten through it just a few more months, they might have achieved a healthy pattern for life.

But to help me explain let’s back up a little bit. Pretend you’re a rat.

Stay with me here. You’re a rat. I put you in a maze.

When you get started, you don’t know what to think. There are these white walls that lead you down various paths. There’s a bright light shining in your eyes. There are seemingly random noises and smells. But after some exploring, you find a piece of chocolate.

I make you do the maze several times. Over time, you start to realize that the sounds are leading to the chocolate. So eventually, you’re following the sounds almost automatically out of the gate.

It’s not what we’d traditionally call a “habit”, but that’s what a couple researchers did to a bunch of poor rats at MIT while monitoring the rats’ brains’ neurons to see what happened as the habits formed.

When the rats were just learning the ins and outs of their environments, their neurons fired like crazy—each sight, smell, and sound seemed like possibly relevant information. But once the habit formed, the rats neurons calmed down, only spiking at the very beginning of the task and when they found the chocolate.

In effect, the researchers think the “learning” of the habit replaced the constant evaluation and re-evaluation of what to do next.

Then, the researchers tried to break the habit. They removed the reward altogether. At first, the rats still followed the sounds, but after a little while, they realized the rewards no longer came and “forgot” to follow them. But when the researchers put the chocolate back, the old habits came back immediately, without the previous learning time.

What does that mean? In short, old habits die hard. Reintroduce yourself to why you enjoyed the task in the first place, and those old neural pathways reignite faster than when you first developed it.

Using defaults and habit forming to your advantage

Last night, I listened in on a great talk hosted by Ramit Sethi with B.J. Fogg, a Stanford psychologist who’s done a lot of work on how technology can be used to influence our behaviors.

He and Ramit spent a bit of time talking about motivation, and how Fogg thought people could get over inaction and establish the good behaviors they “know” they should be doing but can’t seem to motivate themselves to do.

One of Fogg’s favorite strategies? Baby steps. He commits to do something regularly, no matter how seemingly insignificant.

For example, Fogg wanted to start flossing regularly. First, he kept the floss right next to the toothbrush to make sure the two activities were connected. But more interesting was his “commitment.”

He would floss at least one tooth per day. That’s it. If he flossed that one tooth, he considered it a success. Before long, he just started flossing his own mouth out of habit, and now, he doesn’t even have to think about it. Flossing’s just part of the routine.

But remember the rat. Now that the habit’s developed, even if Fogg runs out of floss one day or forgets to bring it with him when he travels, it will be easy to slip back into the routine again later. He’s hopefully greased those neural pathways for all time and will be reaping the benefits of a healthy mouth into old age.

The lesson there? Small…extremely small…habits, developed over time, can turn into unstoppable forces. Even more unstoppable than our tendency to default to laziness.

It’s getting better, but not for everybody.

By haves and have nots, I don’t mean the wealthy and poor. I mean those who have the right skills and the right jobs and those who don’t.

I’m not really one to make predictions most of the time. When I do, they’re often laughably false. But there’s been a trend emerging in today’s job market that most economists think will continue, and it’s something that you really need to pay attention to if you’re just starting out your career or are still in school. (Those of us who are midcareer are screwed. Kidding! Kind of.)

For the first half of this year, you’re probably going to see a lot of news about how things are getting better in the job market, how employers have more job openings, and how hiring in some sectors (Hello, software engineering!) is going crazy. If you’re outside of those sectors (Hello, construction workers!) the market’s going to feel just as bad as ever. Maybe even worse.

The phenomenon is called structural unemployment. It’s a different cat from the “cyclical unemployment” most economists hope we’re in. In a normal job cycle, the job market comes and goes with the regular business cycle. So things are bad now, but as the economy improves, companies hire more and unemployment goes down.

However, it’s possible that the cycle could be broken for now. That’s not because the economy’s not improving. It is. It’s because the kinds of jobs that employers need to hire for aren’t the kinds of unemployed people who are out there today.

Think about it. One of the sectors that’s seen the largest rise in unemployment is the construction industry. According to the Bureau of Labor Statistics, construction suffered from 18.8% unemployment in November (around 6.9 million worked in construction at the time). In November 2007, that rate was only 6.2% with 9.6 million doing construction work.

Let’s say all the jobs that the U.S. economy creates this year are in construction. Many economists expect the U.S. to create around 200,000 jobs per month this year. That adds up to 2.4 million in 2011. Even in that ridiculously positive scenario for the construction industry, their employment level still wouldn’t be back to where it was in 2007.

Now think of the new openings you’re seeing today. The housing boom hasn’t exactly returned, right? Instead, we’re seeing competition heating up in the technology and health care markets, which aren’t exactly the kinds of professions you can take a former carpenter and plop him into.

So far, I’ve been playing around with extremes, but obviously this matters when you’re deciding on what skill sets to learn going forward. Like I said, my crystal ball can at times be, um, defective, but here are a couple trends I’m pretty confident of.

For the love of God, go to college.

Much was written last year about how college degrees have less value than they used to. Something about how too many people are getting college degrees and too many people are majoring in useless stuff.

The thing is, the near ubiquity of college grads nowadays isn’t making the degree needless, it’s making it indispensible.

Seriously, this is not meant to be a knock on executive assistants. But there was one day when you didn’t need a bachelor’s degree to answer phones, screen calls, know your boss’s whereabouts, and, you know, fulfill his needs before he needs them.

Now, “B.A. required” is right on the job description. My favorite/saddest link I stumbled upon while researching this post was somebody asking if he or she needed a Master’s degree to become an executive assistant.

And it’s not even that employers actually think jobs that can be learned quick need college degrees. It’s that employers are desperately searching for some sort of filtering mechanism to bring the thousands of resumes they receive for every opening down to something manageable to look at.

Ex-con? Gone (despite sometimes being illegal, by the way). Unemployed? Gone. Bad credit? Gone. And requiring all of your applicants to have a college degree is just one more filter that allows a manager to bring his pile of applications down to something he can read in a manageable time frame.

How does that bear out in unemployment? The difference between the unemployment rate for those with a bachelor’s degree and up and those with just a high school diploma in November 2007 was 2.3 percentage points. The difference in November 2010 was 4.8 percentage points.

In fact, the unemployment rate for those 25 and up with at least a Bachelor’s degree was only 4.8% in November. That’s more than twice as bad as it was a few years ago, but that’s not the dire straights suggested by the overall 9.8% rate.

You’re not a profession. You’re a set of skills.

I’ve always found it depressing that “what do you do” is often the second question at parties, after “what’s your name.” Not only is it bad for that old, work-life balance, but it’s also a bad way to think about your career track.

How about we break that mindset? I’ll start.

I’m Pop. I’m not going to tell you my profession, and most of you who have guessed have been incorrect. Several of you have guessed that I’m Ben Bernanke. In fact, someone actually wrote this up in a college paper, which I won’t link to because I know how it feels to be embarrassed by mistakes. But I think I’m pretty good at writing, math, and turning complex subjects into something everyday people can understand. I (just recently) have gained basic web publishing and marketing knowledge. And I think I have a decent eye for catchy design.

Ok, so what profession am I? No idea, right? That’s the point. I could be a number of things. I could write technical manuals. I could be in marketing for an engineering company. I could be a teacher.

Those are all options because I’m not thinking of myself as “locked in” to one career track that one day could die, even if popular now. You know, construction managers used to have a pretty good gig.

I’m glad that I have several vehicles in my life that keep me learning, and with stuff like this blog, I have something to actually show employers I can do if I ever did need to find a new job. That’s a good feeling.

Now let’s take a hypothetical person in a job that’s “good” now, but who doesn’t keep learning new skills.

Let’s make him a software engineer and say he works for an investment bank maintaining their old, internal computer programs. At one time, he needed to know cutting edge programming languages, but he’s spent 10 years at this company, learning the ins and outs of a decades old system built on an ancient language.

Even though he’s nominally a “software engineer”, how much do you think that intricate knowledge of “proprietary computer system that no one uses” is going to help him on his resume? Almost none.

That’s one of the reasons why programmers are so cognizant of finding jobs that let them deal in the latest languages. It makes them more marketable if they ever do need to look for something else.

So before you’re in need of a new job, take an honest inventory of your skills to assess what you could do. Trust me, those construction guys are regretting that “construction manager” is the only thing they can think of to type into Monster.com.

Anyway, just some job thoughts to start off the New Year. Thanks so much for the feedback on the last post. I’ll hopefully come up with a more comprehensive survey sometime in the next couple weeks. Happy New Year!

You have one-tenth of a second to make a good impression.

You’ve heard that old yarn about only having one chance to make a good impression. You might have even heard that first impressions happen fast. Maybe you didn’t know they happened this fast.

Princeton psychologists Janine Willis and Alexander Todorov had test subjects look at photos of various people and rate them on attributes like trustworthiness, likability, and competence. Some participants got a second to see the photo—others only got half a second or a tenth of a second. In a separate test, they didn’t give the participants any time limit at all.

Well it turns out, most people decided what their feelings were about a person (based on looks alone) in that first tenth of a second. The results for how “trustworthy” someone was, for example, didn’t differ much between the people who only saw him for 1/10th of a second and the people who had as much time as they wanted.

When you read books about first impressions at job interviews, they probably tell you something about eye contact and firm handshakes. Sure, that stuff’s important. There’s actually been a study that showed a measurable impact on someone’s impression of another’s personality based on the handshake alone.

But putting aside the old interview tricks, you might be surprised at how out of your control the first impression really is. Some interview mantras just don’t bear out in reality, or at least, they don’t have the impact we might hope they would.

So when someone gives you the old, “You have only one chance to make a first impression line,” you can throw back “Yeah, they only have 100 milliseconds.”

Your next job interview: It’s all decided before you finish your introduction.

“But,” you say, “that’s only on looks! I surely will have a chance to state my case when I go in for a job interview!”

Well, kind of. Take the case of Tricia Prickett, an enterprising psychology student who taped job interviews to see if she could guess outcomes just by watching the first 15 seconds.

She showed 15-second clips of the interviews to 30 “naive observers” and asked them to rate the job candidates on intelligence, competence, politeness, etc. Their ratings, based on those 15 seconds, ended up being about the same as the ratings given by the interviewers themselves, except the interviewers, of course, spoke to the people for 20 minutes or so.

Other experiments went further. What if you trained people to give a handshake with just the right grip? Or what if you told people to match their interviewer’s tone and posture? Some interview experts have said matching body language is one way to establish a rapport.

No dice. In the body language mimicking experiment, it mostly had no effect. One interviewer actually picked up on it happening, and it made him angry. As far as the handshakes go, firm handshakes are good, but they’re hard to fake. A firm handshake coming from someone who’s shy just ends up looking trained and out of place, according to psychologists.

Unfortunately, it seems that you can’t train for some aspects of a good first impression.

Oh yeah, and to finish building this post to the height of pessimism…it helps if you’re cute too. Psychologists even have names for it—”What is beautiful is good” or the “halo effect”. People assume that if someone is good-looking, it must mean they have good personalities and are smart, also.

Things you can control.

It’s hard to undo those first 15 seconds (or 1/10th of a second) if they don’t go well. After first impressions, we tend to look for evidence to support our initial assumptions. The handsome fool sounds smarter because we want to validate our initial impression that he was smart.

But you can. I mean, you can’t really. But you can push that first impression back a little.

How? First, it’s better to be animated than to have a poker face. I have this problem personally. I show a notorious lack of affect at work, and at times, that’s come off as condescending. It’s something I try to fix by smiling a lot and being more open, even though personally I’d rather keep my emotions on the inside.

Psychologists have found that being expressive makes people trust us more, even when the emotions we’re expressing are negative. Our counterparts would rather know that we’re unhappy than have to guess at things.

Next, find what you have in common. Hometowns, names, birthdays, favorite books….anything really. As I’ve written before, even having superficial things in common like, say, being assigned to the blue team instead of the red team, can make your counterpart think you’re smarter, stronger, and friendlier than he thought before.

Yeah, I know, it’s not much in the face of all that you-haven’t-even-finished-your-name-and-you’re-already-screwed stuff. But hopefully knowing that so much is out of your hands will help you let go of some of those “interview tricks” you’ve been taught and just be yourself.

Is a will to succeed enough?

I’ve never started a business. It’s something I’ve thought a lot about, and you could argue that Pop Economics is kind of a small business. Just one with no revenues. But I’ve been fascinated by all the research that’s been done into what makes entrepreneurs succeed or fail. Are you born an entrepreneur or can it be taught to you?

It seems that the question should really be broken down into two parts. Sure, there are certain behavioral factors that might make you more or less successful in a new venture, but more than that, there’s a certain kind of person that it takes to decide to be an entrepreneur in the first place. Without the second factor, you get a bunch of potentially good entrepreneurs who instead whittle the hours away in a 9-to-5 job.

Entrepreneurs don’t seek risk but they accept it.

One oft-repeated assumption is that entrepreneurs like to take risks. Thing is, the researchers who’ve actually tried to discover how much risk entrepreneurs like to take haven’t been able to prove that their bold streak actually exists.

In the mid-70s, a professor from the University of Illinois surveyed entrepreneurs, newly promoted managers, and newly transferred managers on their risk-taking propensity using a highly-regarded psychological test. There didn’t end up being a statistical difference between the groups or between entrepreneurs and the population as a whole.

So much for that theory.

That’s not to say that entrepreneurs are unaware of risk. In fact, successful ones tend to spread it out amongst other founders and investors so that even if a bad event happens, they won’t be the only ones bearing the brunt of the pain.

Entrepreneurs have an innate need to be successful.

Some researchers have theorized that entrepreneurs simply want it more. They want positive feedback, to be recognized for successes, and to stand out from their peers.

Except they don’t. It turns out that while entrepreneurs are, indeed, high achievers, so are successful managers within a larger company. Being a high-achiever doesn’t make you more prone to start a business, it just gives you the ability to do so.

Entrepreneurs believe they can make a difference.

I’m very much a proponent of black swan theory. I believe unpredictable events have inordinate sway over my fate. That doesn’t make me a complete stick in the mud, but it does mean that I sometimes wonder “What’s the point?” when thinking about an entrepreneurial venture. Success or failure seems random to me.

Entrepreneurs, on the other hand, are supposed to feel “in control” and believe that the intensity of their efforts will translate into success or failure.

Except they don’t believe that either. Noticing a trend here? Researchers have found that managers believe in their power to change things just as much as entrepreneurs do.

Entrepreneurs can handle ambiguous situations.

And finally, something that does distinguish effective entrepreneurs from Joe schmoes. When faced with uncertain situations, some people become anxious and uncomfortable. Others don’t mind it or even enjoy it. Entrepreneurs, it turns out, can handle ambiguity without freaking out. Finally, something that distinguishes them.

(P.S. A paper from the UVA Darden School of Business helped me boil down the research on these entrepreneurial traits. It’s meant as an intro for students into the study of entrepreneurship. So definitely worth reading if you’re interested in the subject.)

So behavioral traits don’t help. Is it just luck?

Aside from the awareness of and comfortableness with ambiguity, not much seems to distinguish those guys who start multimillion-dollar companies from those guys who get promoted up through the ranks to run multimillion-dollar companies. The ability to be successful in one realm seems to translate nicely into being successful in the other.

A few Harvard professors took a look at start-ups listed by Dow Jones Venture Source to see if serial entrepreneurs—that is, entrepreneurs who started more than one company—were any better than those who just started one company. The idea is that if you performed well more than once, it must be something skill-related or personality-related that made you successful, rather than randomness. They looked at firms listed between 1986 and 2000, and since they were listed in Venture Source, all of them had gotten venture capital financing.

For the purposes of their study, the professors defined “success” as going public by the year 2003. Of course, selling out shouldn’t be viewed as a sole determinant of success for an entrepreneur. I mean, is Facebook unsuccessful because it’s still private? But anyway…

Their findings: Entrepreneurs doing it for the first time had a success rate of 20.8%. Entrepreneurs in their second or later ventures had a success rate of 25.0%. That’s a significant difference and suggests that something other than pure luck must be playing into the success or failure of new companies.

But sadly, the researchers note: “While our paper identifies entrepreneurial skill, it does not distinguish exactly what the critical entrepreneurial skill is.”

It’s not luck. It’s not being a risk-taker or a go-getter or a believer. Maybe it has to do with dealing with ambiguity, but that can’t explain all of it. Sadly, we’re still searching for our answer to the central question: How do I know if I have what it takes to be an entrepreneur?

Stay tuned: Some information on what successful entrepreneurs do have in common comes on Friday.