with Kevin Hogan, Psy.D.
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THIS WEEK’S QUESTION(S):
Question: Kevin your article on the stock market not returning 10.4% was misleading. I’ve been a financial planner for 27 years. You didn’t include dividends or stock splits. I believe a cumulative return of 10% is right, over time. Would you be willing to post a correction? I know you have a lot of friends in the financial world who would like to see you correct your mistake.
Before I get to the numbers, I got a personal e-mail minutes ago, asking what I thought of 401K’s and IRA’s. Answer: If you don’t have something like a 401 K, or an IRA or similar, you are nuts. You MUST have money stashed in these protected investments. In some states, your entire investment is protected in lawsuits and bankruptcy situations. In others they are partially protected when everything else you own is up for grabs. Finally, MAX out your 401K and IRA’s. Not MINIMUM. MAX THEM OUT. Just because you aren’t going to get rich with something doesn’t mean it’s not a helpful tool!
Answer: No correction necessary. Do the math! For goodness sake, how can people with computers mess this one up?!??! This article generated a lot of interest. OK… 1) STOCK SPLITS are factored into the indexes. (YOU should know that! 27 years?!) 2) Simple math.
a) about a century ago the DOW was at about 100 give or take. Using the “rule of 72” we know that if that returns 10% per year, it will double in 7.2 years. That would put the DOW at almost 2,000,000 in 2008.
h) remember to add 4% annually perhaps for dividends, take off 3% for inflation, knock another 1-2% per year for management fees at various levels. Knock off 1/3 or more for taxes when you withdraw. NOW, do you want me to really do that math here or should we just just accept that the DOW returned 1% of what we believed it should. (People are told 10.4% annually over time, but really that isn’t true, in any sense.)
I give you $100. It goes up 50% this year and down 30% the next year. That is an AVERAGE RETURN of 10% (50-30=20 /2 = 10). But average isn’t REAL. Real is up to 150 from 100 and then down $45 from the 150, leaving you with $105.
I give you $100 and you earn 100% in year one, down 80% in year two. Average return is again 10% per year. REAL RETURN? 100 up to 200, down 80% takes off $160 and you have $40 left of your 100 for a REAL RETURN of about -30% or so per year.
If you get that, and can do slightly higher math, you can read a site like www.crestmontresearch.com and learn way more than my tiny brain can put out there. (He uses cool color coding, I just put stuff in text….)
Answer: There is 100% evidence to show that Subliminal CD’s are 100% bunk and there is an approaching zero percent chance that one will ever work. To spend your money on a subliminal audio product is to throw your money to the wind.
Answer: You aren’t going to find out in an answer. You will find out a lot in their behavior, however. Unless this person is quite young (teenage) they are experiencing fear, either real or imagined and there are certainly drivers that will buck up against those fears, but the fears need to be dealt with first. (Great question BTW)
Answer: Everyone should have a jam packed 401k AND IRA, preferably a ROTH IRA. I put my 401 K and IRA money in a few stocks, ETF’s or Indexes that have a significant probability of long term increase in return. The stock market includes companies that mine gold, silver, oil and so forth. There will always be SOME stocks that go up in value. In fact you can buy or sell ETF’s to short the market as a “whole,” but you know what, the answer to your question is I own gold and oil stocks.
Over the next six months I’ll add in some commodity and currency stuff but for now I’m happy. (And a drop to 900 in gold is just as likely as a bump to 1000) We’ve had a monster return since waking up four years ago to the reality of what is happening in the world.
Question: How is your Releasing the Millionaire Inside: The Science of Affluence, different from Harv Eker’s Millionaire Intensive, or any of the other seminars?
Answer: Science, facts, data, analysis, contrastive analysis between your behaviors and those of the wealthy, changing those behaviors that are indeed constrasting, finding the threads that cause momentum in a person’s life.
I’m not going to say anything about other people or other events.
We will do a lot of unique things that no one else does. We have the current data on what millionaire’s do, their behavior, beliefs, attitudes, how they think, what they do to earn their money. (We aren’t interested in those who inherited their money…. Uncovering which of the self-sabotage patterns you have, identifying them and developing strategy to overcome them as quickly as is humanly possible.
What I’ve created is something you can rely on. It’s not as fun as “The Secret”. It’s simply what works. It’s as simple as that.
Question: I was on the Influence Teleseminar last week that you did with a bunch of people I was unfamiliar with. My question is, did you really mean what you said about Hillary Clinton or were you patronizing your women listeners?
Clinton did the right thing in the face of ridiculous conditions. Her party stabbed her in the back. It’s kind of tragic. I’m obviously not a Hillary fan, BUT she won an enormous amount of respect. What, she’s supposed to give up because a bunch of people who head up the party tell her to? Screw that.
I think the Democrats made a huge mistake by treating her as they did and don’t be surprised if they pay a price in November for it. The only saving hope for the Dem’s is Republican and Republican-like third party candidates like Paul and Barr….
Question: I worked in sales in the US for 3-4 years. Now the company wants me to develop an office in UK to cover Europe. It will have a new environment, a new culture. How do I prepare best for this new opportunity…FYI I work in outsourcing industry-B2B sales at the SVP/VP level. I heard Europe is more closed to outsourcing that compared to the US..any comments would be appreciated.
See if you can find an article on line Selling Power did on me about this. I don’t recall it being on line but maybe you can find it using google. In short, you will have to pay attention to each culture and even within England, there are distinct cultures much like Southerner’s differ from Californian’s and those from New York. Broad generalizations won’t cut it here. Pay attention, write your observations down, especially about greetings, formalities, respect issues, proxemics and chronemics.
Answer: It’s time to move AWAY from this kind of legislation. Give a government too much power and you beg and borrow trouble. Too few people making the rules for everyone…not good. Smacks of fascism. ACLU needs to challenge scope. I’m not saying FISA is wrong in principle. But in execution it certainly is uncomfortable in a free country.
Terrorism. I don’t worry when I fly. Not an iota. Everyone hammers on TSA. Look, they are doing an AMAZING job, taking crap from everyone all day long. It’s a totally thankless, self-esteem destroying job. And by and large, they do a good job. It’s a very, very imperfect set of sciences but witness the terrorism the U.S. has experienced in the last five years. Nada on our soil. SOMETHING is working even if it is randomness. Anyone can blow up anything on any given day. You can only stop and be paranoid to degree x before it gets ridiculous.
Question: Nancy Pelosi said that she wanted to give everyone another rebate check because the first round worked well at stimulating the economy. Why do I think you will diss this proposal. I think it is a great idea. People need the help, especially the unemployed.
Answer: Nancy Pelosi is an idiot. She either a) doesn’t understand economics or b) she does undesrtand but simply doesn’t care more about children and them being STUCK paying OUR bills…vs. her getting re-elected. Free money is always popular with the uneducated and always devastating to the next “generation.”
Question: Questions on Body Language – How long does body language training take? For international countries, such as Kuwait, how much would you charge for training some of the staff of a major company? How often would one train staff in large companies? How does body language increase sales? By how much does it increase?
Answer: I’ve been studying body language a long time. You study it within the context of Nonverbal Communication at University. I don’t think you can get a Major in it, to this day. It’s unfortunate because it is an amazing field of study.
Answer: Native Japanese seem to find eye contact less interesting and appealing than most other cultures. Respect and emotions are often observed by and seen in and around the eyes with the Japanese people vs. in the lower part of the face for North Americans. We should do a DVD on this….
See the article Reading Body Language: Japanese vs. American
Question: If I am out of bounds, feel free to slap me. I have a quick question though that I am hoping you will answer regarding research. I am in the process of constructing goal setting parameters for my business (Attorney Placement and Executive Coaching). The principles of which will be heavily influenced by your work. As I have heard you say in that past though, reading a book that only cites one source is simply taking one man’s opinion. (My own translation of your words)
I take your work as gospel frankly, until I have been presented with credible material that refutes it (which has eluded me thus far ). My concern is that my clients may take my advice as “one man’s opinion,” If I am falling back solely on one source (your work) and my own experience. These are attorneys mind you and their minds are extremely critical… I know you use at least several sources for your own material.
So my question is… can you point me in the direction of some other sources that touch on the neuro-science of goal setting? My searching online and on Amazon has been fruitless… any help you can afford me is much appreciated…. Thank you in advance.
For your interests, pick up Self-Efficacy by Bandura, I think it is. That text, though a bit dated is the foundation for a lot of study in this area. The work of Carol Dweck is superb. There is a lot of academic research in this area. Thousands of articles per year.
Question: I’m a devoted Coffee reader. I’m also a radio commercial copywriter, voiceover guy and producer (not like a TV producer, I edit the audio on a computer, mix music with the voiceover and toss in sound effects, etc.)
I’m soaking in your Science of Influence CD series.. (Like drinking from a fire hydrant!) I’ve been reading ton’s of psychology books, yours and others. The subject absolutely fascinates me.. I understand a good amount of the specific principles and I seem to be building a kind of gestalt understanding of influence as well.
A radio commercial is like talking directly to the one person interested in what’s for sale.. Tonality of the announcer, personal intimate voice style, pacing psychologically in both content and attitude. I understand this stuff pretty well and use it to create some very effective spots.
What can you say about commercial copy for radio?
Any insights? Cool tricks I haven’t thought of?
For instance, Can consistency be used effectively in a commercial? (Yes I know it’s strongest when you get the subject to say it out loud even better to have them write down their intention) Can it be effective at all if you get them to commit to an idea just in their head? Or does consistency break down as a tool short of verbal or written expression?
What about reciprocity? Primacy? Self referencing?
Answer: Commercial advertising…EVERYTHING has been tested that is in the 72 volumes of Science of Influence and with varying degrees of ease or difficulty what you have in your hands is indeed what works.
Here is a cool learning tool: Grab any tool. Say oscillation. Then think of 10 ways you can use it in a billboard, on radio, in a TV commercial.
Do that with everything you learn in the Science of Influence Library.
Consistency definitely can break down. Remember the Fiji travel study?!?!
1. I sit in front of a computer doing electrical drafting and design for work. Sometimes I get really tired and my focus is lost. In order to wake up I drink coffee which is only a temporary solution. I think if I were able to build anchors and fire them off I would have energy at work and I would have energy after work to go to the gym. Obviously if I had the energy to go to the gym after work I would be more healthy and lose a bit of weight – so, I would sleep better and work better.
2. Sometimes I get so focused on what I am doing at work – trying not to miss anything – I in fact miss things on the drawings. It’s a bit like I hypnotize myself and hallucinate not seeing things. Please help me if you are willing to do so.
If not, you are putting yourself through hell, yes? More sleep will cause you to lose weight. The gym is a great place to get away from what needs to be done. Maybe you get a workout on the way to work, on lunch and going home.
Losing weight: Track calories in writing and sleep. Those are the predictable factors. You sound like you need a therapeutic coaching series of sessions. Too much is passing you by and you are in a daze. But before you spend money, get a couple of weeks of 7 hours per night. Then drop me another note and see how you are.