Teaching and Learning Useful Little Secrets
July 26, 2007

During a recent trip to Chicago, K and I stopped at an old church she'd always wanted to visit. Entering through the double doors at the front, I noticed that K pushed on the door meant to swing outward. I showed her how to tell which way a door opens by pointing out the strip of wood that ran along the outside of one of the doors and covered the other one. That serves to seal the door from rain and cold, I told her. It was a little thing, but I was happy to share it with her, because I know that for the rest of her life she is going to be able to use this bit of information. And maybe she will think of me every time she opens one of those doors.

My grandmother taught me how to remove debris from fabric without damaging it (by rubbing it against another piece of fabric) when I was a small child, and I still think of her, 50 years later, every time I get something on my clothes. My friend Paul taught me his version of how to get ketchup out of the bottle (by hitting the neck of the bottle against his overturned knuckles), and his childhood face still comes to me every time I have a hamburger.

I love lessons like that - useful secrets freely shared that provide value for a lifetime. This type of learning - one person showing something useful to another - is how knowledge has been passed through generations for many thousands of years. Of course, you can learn such secrets at any age. But when you learn one in your 50s, you have mixed feelings: gratitude for the information, and frustration that you didn't have it when you were younger.

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posted by M. Masterson @ 9:18 AM, ,




A Visit to the Zoo Sparks Entrepreneurial Thoughts
July 25, 2007

After visiting the Lincoln Park Zoo in Chicago, I had mixed feelings. It is halfway between an undisguised prison for wild animals (e.g., the Central Park Zoo in Manhattan) and a natural habitat (e.g., the San Diego Zoo).



Read the rest of this article at Early to Rise

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posted by M. Masterson @ 8:48 AM, ,




Not that Donald Cares
July 23, 2007

Of course, none of this matters to Donald Trump because his buyers aren't ordinary people. He has just remodelled a 65,000 square foot, 17-bedroom mansion that sits on a 6.5 acre estate overlooking 500 feet of beachfront for $125 million. The main residence has onyx floors, six guest suites, staff quarters, a grand ballroom, wine bistro and art gallery. There is also a 100-foot swimming pool and several auxilary houses. Trump bought the house in 2004 for $41.5 million. If he gets his price, he should make some good money.

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posted by M. Masterson @ 1:33 PM, ,




Condo Prices in Florida Still Falling

In West Palm Beach and Boca Raton condo sales rose 11% in May, according to USA Today. That was a signal to some that the recession in South Florida real estate might be over. I don't think so. Prices in those cities were down only one percent compared to last May. They will have to drop a lot more than that to reach become affordable to ordinary income earners. Across Florida there has been a more healthy deflation. Condo prices statewide are down 28%. That's good but it's not good enough for me to get back into the condo market. I'm waiting till prices hit my best guess at a bottom - which I pegged three years ago as fifty cents on the dollar.

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posted by M. Masterson @ 1:21 PM, ,




Defending Your Name
July 20, 2007

I see there is a new type of service being offered for Internet users: removing or downplaying negative online information about a person or company. Two such businesses, ReputationDefenderInc. and DefendMyName, claim to be able to bury embarrassing photos, criticism, and bad blog comments for fees that can range from $10 to hundreds of dollars a month.

My take? This is a good business idea for the people who are offering the service. A waste of money for the people using it.

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posted by M. Masterson @ 8:22 AM, ,




The Future for Smart Phones: More Choice

Kudos to Kevin Martin, chairman of the Federal Communications Commission. Under new rules that he is proposing, any wireless carriers that want to use the wireless airwaves that the government is auctioning off next year (space created by 700 TV stations that are going digital this year) will have to allow consumers to use any smartphone they want. No longer will they be forced to use equipment sold and maintained by the carriers that control the broadband. What this would mean, according to Martin, is that "you would be able to use any wireless device and downoad any mobile broadband application, with no restrictions."

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posted by M. Masterson @ 8:17 AM, ,




Immigration in the USA: I Just Don't Get It
July 18, 2007

Immigration agents arrest Mexicans at work sites and put them in jail or send them back to Mexico. Why would they do that? If they are working then they are doing what we want (and need) people to be doing in America - working to make our economy stronger. If you want to throw people out of the country, wouldn't it make more economic sense to arrest people at welfare offices?

A good friend of mine had a pool construction business on Long Island for thirty years. He says he could not have had that business without employing illegal immigrants. "They were good people, honest and hard working - and they learned quickly. In thirty years I might have gotten half dozen US citizens to apply for a job with me. Without these guys, I would have had to shut down my business."

The ostensible rap against illegal immigrants is that they are bad for the economy. But that doesn't hold water. Every study I've ever seen on the subject demonstrates that they are a net positive - to the US economy and to the countries from which they come. Even on the face of it, the economic model makes no sense. These people are coming here to work. Isn't that a good thing? Some critics say that they take advantage of our social services - thus causing an economic burden that isn't accounted for. That is certainly true, but that's an argument for legalizing and taxing them, not for sending them away.

One argument against immigration that I seldom hear is the cultural one: we don't want more Mexicans (or Africans or Haitians) in our country because of the effect they may have on our culture. The effect we worry about is not so much adding new exotic dishes to the developing New American Cuisine but the more obnoxious traits of third-world citizens, such as getting drunk on cheap alcohol, hacking people up with machetes and urinating in public places. There is no evidence that illegal immigrants engage in these sorts of reprehensible behaviors any more than citizens do, but there is that perception. If that's the real problem - and I think it is - we should have the courage to talk about it. I don't want anybody urinating in my town or coming after me with a machete. I'll be the first one to say it. Let's strike some sort of deal: if you can come into this country and be productive without doing any of these odious things, you can work here on a permit which can and will be revoked the first time we see you staggering down Main Street with a machete.

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posted by M. Masterson @ 2:19 PM, ,




Tough Employers
July 16, 2007

Some business people hold on to their best employees by compensation and perks. Others by threats and intimidation. In Los Angeles recently, three men were arrested for enslaving a group of Chinese immigrants. According to USA Today, 20 members of a Chinese acrobatic team were without visas or passports in the basement of an LA home when they were not performing. The paper did not say how long they were treated this way. It did say that they were so happy to be rescued that they wept.

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posted by M. Masterson @ 11:17 AM, ,




The Big Three Aren't Dominant Any More

The big 3 automakers no longer have more than half of the US market for cars. Pressed by foreign competition and by rising manufacturing costs, they have foregone their goal of market share for profits. Some commentators are bemoaning this fact. I don't understand why. What difference does it make if they have, combined, only 40% of the market instead of 60%? If they are not profitable, what does size matter? Can you imagine if we applied that same thinking to our physiques? Bigger is better even if it means you are more likely to die of a heart attack? Sumo wrestlers do this. But now that we understand the relationship between size and health, Sumo wrestling is quickly disappearing.

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posted by M. Masterson @ 11:13 AM, ,




The Omnipresence of the IRS
July 10, 2007

The U.S. has the worst tax deal in the world. It is one of the very few countries that taxes on worldwide income, even if you are living abroad. Citizens of other countries pay taxes only on income that they earn while they are in their own country - and then only if they live there. A German who lives in France and has a business in Italy, for example, does not have to pay German taxes on that income.

Good for them. But when I talk to European colleagues about this, they tell me they are afraid that the European Union will soon replicate U.S. tax law in this area.

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posted by M. Masterson @ 2:52 PM, ,




Buying Property for the School

While I was in Nicaragua recently, I had the chance to move forward with the technical school I am planning to establish for the new community my partner and I are developing. A group of people from the village came by my house to talk. Their idea is to begin by focusing on English and computer classes for pre-kindergarten kids and English classes for seniors. They have already gotten eight volunteers, qualified teachers, who have started teaching some of the courses.

I told them that I am impressed, and made arrangements to meet the teachers at a later time. We also discussed their compensation. They don't need to be paid formally, they assured me. They are doing it for the community. But if they get some sort of "present," that would be nice. I told them not to worry.

They have found a place to build the school that is perfectly located - a parcel of land that sits between the two hamlets they come from, Limon Uno and Limon Dos. I asked them how big the parcel is, and they said "half a manzana" (about an acre). Then I asked what it would cost, and I thought they said a thousand dollars. A thousand dollars sounded like the right price to pay for an acre of land - but then I realized they meant $10,000.

When I first came to the Tola area 10 years ago, you could buy farmland for $1,000 an acre. Today, it costs 10 times that much. The first beachfront lots we sold at Rancho Santana were priced at $39,000. Today, those lots are selling for more than $150,000. The people who were brave enough to buy back then were richly rewarded. HL, one of our first buyers, bought 10 lots (beachfront and beach view) for about $250,000. They are now worth about $2.5 million.

This is good news for the early buyers, and it has been good for our plans to convert this place into a world-class residential resort community. But it will make it difficult for me to buy the land I need for the technical school.

I told my visitors that I would take a look at the site they found later in afternoon.

At 5:30, I headed over there with N, who has been helping me with my local charities. We liked what we saw and asked if there was more than just half a manzana. As it turns out, the family that's selling it owns the entire field, about five manzanas, which would cost me $100,000. If I pay even half their asking price, I'll be $50,000 over budget. That will mean $50,000 less I can spend on building the school and paying the teachers.

I told the family's representative that I would think about it and get back to him. I will come up with something - a realistic offer for all five manzanas.

I should have bought thousands of extra acres when we bought the land for Rancho Santana. That's how the big developers get rich when they move into unchartered territory. I will remember this lesson if I ever decide to buy more property somewhere in the developing world.

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posted by M. Masterson @ 2:39 PM, ,




What's More Powerful Than Being President?
July 9, 2007

This past weekend Al Gore hosted LiveEarth, a 24-hour, eight-continent, 100-act mega concert that will reach 2 billion people. The procedes will go to the Alliance for Climate Protection, a non profit group that Al Gore set up to "educate the public and petition lawmakers and corporations for eco-friendly changes."

There have been plenty of good-cause concerts before, starting way back in the 1970s when George Harrison and his pals through the concert for Bangladesh, but what's interesting about this one is how closely it's connected with Al Gore and his global warming campaign. If LiveEarth raises half as much money as LiveAid did in 2005, it will put Gore on top of a foundation that has an extra $122 million in the bank. Chances are the mega-concert will do better. It's quite possible it will make a quarter of a billion dollars. That puts Gore in a very intersting place - effectively in charge of a very substantial amount of money that can be directed at a single cause. He must be wondering if he could have more impact - and more power and prestige - by sticking with this cause, for which he's already so well known and greatly admired - than he would by going back into presidential politics.

This is sort of the position Tony Blaire finds himself in. After an up-and-down career as England's prime minister, he has become a high-profile negotiator for Arab Israeili peace. Being a politician has many drawbacks, not the least of which is the nasty things people say about you - wrong or right. But when you are heading up a noble cause - hardly anyone will criticize you. You get to do good (or your version of good), have perhaps a greater impact on social change than you would as president and make an unrestricted income at the same time. Sign me up.

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posted by M. Masterson @ 3:35 PM, ,




Doing Business in Ireland

Dublin is a vital, interesting, cosmopolitan city - the only one in Ireland. It has also become very expensive since receiving all sorts of benefits from the European Community.

A dollar does not buy much in Dublin. New office space by the harbor is renting for $100 a square foot - about four times the cost of similar real estate in Delray Beach and more expensive than many sections of Manhattan.

My client started a business in Ireland because of the corporate tax incentive that was established about 10 years ago to draw in foreign companies. The top tax rate has been 10 percent and will now go up to 12.5 percent. That's less than a third of what he would have to pay in the U.S. Of course, it's nearly impossible for him to actually take advantage of this tax incentive because, as a U.S. citizen, he is taxed on his worldwide income. Which means if he ever decides to take money out of his Irish companies, he'll have to pay the normal taxes on it.

The U.S.-based businesses I'm involved with are all LLCs or limited partnerships. Such structures allow you to "flow" your tax obligations through the corporate entity onto your personal account. You pay income tax on what you earn. If you take in a million, 'your tax rate is 39 percent. So you pay the IRS $390,000.

To take money out of Ireland, my client would have to pay the 10 percent or 12.5 percent tax first, and then pay the 39 percent again. That's more taxes, in my book, not less. The only benefit I can see is when it comes to investing corporate profits in new businesses. In the U.S., you invest after the 39 percent is taken out. In Ireland, you'd be investing after only 10 percent was taken. That is good for stimulating new business in Ireland - which is why it's good for Ireland. But why it's good on a personal basis, I still can't figure out.

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posted by M. Masterson @ 2:50 PM, ,




A Week of Good Meetings Overseas

I spent a week at the offices of one of my primary clients in Dublin, Waterford, and London, and two days in Boston visiting with BL, PP, JF, and TG, high school friends.

The job in Ireland was to launch one new business and reposition an old one. Like every major business challenge, this one is about people - finding them, training them, motivating them. It's been more than a year since I worked with this business in a serious way, and I was a little anxious about being able to get everything on track. The good news is that I wasworking as part of a three-person team. Where I fall short, they will stand forward.



London was more fun. LD set up a slew of creative brainstorming sessions with six of their publishing divisions. I'll be helping with their advertising campaigns and reviewing new products. That's work I like, because I'm good at it and I know it matters.

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posted by M. Masterson @ 2:48 PM, ,




The Art of Packing for a Business Trip
July 3, 2007

Because I always seem to be in a hurry when I pack for a business trip, I've found it necessary to use a checklist to make sure I don't forget something. This usually works flawlessly - but this time, after packing for my trip to Ireland, I changed my carry-on bag at the last moment and forgot to transfer my laptop power cord (which was neatly hidden in a pouch in my other bag). The penalty: I will have to ration the time I spend working on my computer until I can find a replacement in Dublin.

The lesson to be learned from this: Don't abandon your checklist because you think you don't need it. You do need it. That's why you have it.

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posted by M. Masterson @ 2:57 PM, ,




Living Rich on a Teacher's Budget

As a Tai Chi instructor, my friend JG makes a modest income. But by investing and spending wisely, he lives like a king. He has a beautiful house in a great neighborhood - one he bought very smartly and very much below market when the market was cheap. He drives a luxury car that he leases for practically nothing. He wears high-quality clothes that he buys for bargain-basement prices. He and his wife have some kind of summer membership at the Palm Beach Yacht Club. We enjoy dinner with them there several times a year, seated in an elegant overlooking the Intracoastal Waterway. The way JG looks, the way he carries himself, the way he is treated by the staff - you would think he makes a hundred times more than he actually does.

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posted by M. Masterson @ 2:45 PM, ,