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February 2013


Naked With Cash is the year-long series on Consumerism Commentary where seven readers’ households share their financial progress on a monthly basis, and February is “insurance month.” I’ve partnered with financial planners who will offer some guidance along the way. Read this introduction to learn more about the series.

JW is thirty-one years old and a father of one with another one on the way within a month. He works in retail and is underemployed, and his wife and son are on state medical plans, and their income is supplemented by SNAP (food stamps). Read his bio for more information about his family’s situation.

His goal is to be able to provide for his family while still tithing 10% of his income to his church. JW is on Team Neal, with Certified Financial Planner Neal Frankle. For JW’s progress throughout 2012, read his previous update. Today’s financial report describes his progress throughout January 2013, with comparisons from the two months leading up.

Neal Frankle, CFP appears courtesy of Wealth Pilgrim and Wealth Resources Group.

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Naked With Cash is the year-long series on Consumerism Commentary where seven readers’ households share their financial progress on a monthly basis, and February is “insurance month.” I’ve partnered with financial planners who will offer some guidance along the way. Read this introduction to learn more about the series.

Anonymous S is a 24-year-old engineer earning $67,000 a year plus bonus. He also builds websites on the side for an hourly fee of $20 to $35. Read his bio here. Anonymous S is on Team Roger, with Certified Financial Planner Roger Wohlner.

Last month, Anonymous S described his progress throughout the past year. Now that he has had a chance to receive feedback from the financial planner and a budgeting expert, this report will focus on the participant’s financial progress over the past few months. Keep reading to see his net worth report for January 2013. Following the analysis from Anonymous S., Roger Wohlner will offer his own thoughts and guidance.

Roger Wohlner, CFP appears courtesy of The Chicago Financial Planner.

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Marissa Mayer, the CEO of Yahoo, is looking to improve her company’s performance. In a memo from the company’s human resources department to all employees, Mayer made her intentions clear. In order to build a more cohesive company of employees, all work from home arrangements are canceled.

The confidential memo was made public by Kara Swisher at AllThingsD. The letter called for all employees who normally work outside of Yahoo premises to show up at the office. Even those who might need to wait at home for the cable guy on rare occasions were suggested to reconsider their absence from the office.

This seems to be a step backwards. We are in an employment recession, in which workers are continually told to just be thankful they have their jobs and to accept any abuse their employers present by uttering, “Thank you, sir, may I have another?”

Despite this economic condition where the balance of power is weighted heavily towards employers, companies have been trending towards offering more flexible working arrangements. The arguments in favor of flex-time and working from home are reasonably strong:

  • Flexibility is a benefit that employees want, and when employers provide it, boosts morale. Better morale, in turn, inspires workers to enjoy their jobs, and happier employees make better employees.
  • Workers often report fewer distractions and more time spent working when they are in an environment outside of the office. That leads to higher productivity, and higher productivity is good for the company.

Why does the CEO of Yahoo want to move backwards, taking away one of the beneficial features of working for a twenty-first century technology company, where most job functions can be completed well regardless of location? She states her reasons in the memo:

  • Working side-by-side spurs communication and collaboration.
  • Impromptu discussions and meetings foster better decisions and insights.
  • “Speed and quality are often sacrificed when we work from home.”

I will argue with the last point, but otherwise, Mayer has identified the benefits of physical presence. There is no denying that something has been amiss with Yahoo. As a company, it is losing its relevance in a tech world dominated by Google, Apple, and Microsoft. It may not be fair to take away benefits that employees appreciate, particularly when many undoubtedly accepted the Yahoo job offer with the expectation that these benefits would continue be available. And there is probably validity to that thought that this is a way to trim down the fat: employees who love Yahoo will stay and put up with the change, while employees who may not have been as dedicated to their job will leave.

I’ve seen this attitude at companies before. Voluntary attrition always backfires. By making conditions worse for employees in an effort to let a portion of the workforce go without explicitly firing people, Yahoo stands to lose its best employees, not its worst. It’s simple: the best employees have more options open to them, despite the high unemployment rate. The best employees have worked hard to increase their personal human capital — their employability, their desirability, their potential value to others. These folks can do better than Yahoo. They can find a job relatively quickly, one offering the benefits no longer available at the waning tech behemoth.

Nevertheless, a company during its growing period needs people who are going to be 100 percent dedicated to the tasks at hand. No one ever became a superstar without sacrificing something from their personal life, and Mayer is looking for a company of superstars. Excellence requires personal sacrifice, and that means less time for family and less time for friends. Mayer seems to be hunting excellence, and anyone not prepared to make those required sacrifices is not welcome to the team. This often unfairly targets moms, who disproportionately take care of home-focused responsibilities, and are looking for that work/life balance so often lauded by human resource departments.

It’s no wonder that people are calling Yahoo’s move a step in the wrong direction for gender equality in the workplace.

Marissa Mayer is familiar with making personal sacrifices. She skipped her own maternity leave to continue to work. Her attitude has done well for her; she is the CEO of Yahoo.

Not every developer at Yahoo has designs for being an executive at a major company. In fact, most of the developers I know aren’t interested in management at all, and they’re quite happy to quietly code from whatever location they happen to be at the moment, meet with each other over the phone and through online video conferencing, and put it more hours than expected because they aren’t wasting time by commuting, wasting energy with small-talk among co-workers already wasting time in the office, and wasting attention through constant distractions. They’re happy to stretch out in their own space rather than being confined to a tiny cubicle.

The CEO of Yahoo wants a leaner company. Without saying so explicitly in the memo, she wants Yahoo to operate like a start-up, where employees put the mission of the company above all else, including their personal lives. She wants to breed work superstars. Judging from the reaction, this is a drastic change from Yahoo’s current corporate culture, and it could be just the thing to shake it up.

My suggestion is for Yahoo to make coming to the office an enjoyable experience. If people like to be there, they won’t think so much about how they miss working from the couch in their living room or being available for family at all hours. Eventually, Yahoo will reverse this possibility. In order to make Yahoo a relevant company again, something like this could be the shake-up the company needs.

There are better ways to make this change, though. Canceling an expected privilege of working for a technology company with a memo from human resources is not going to be well-received, and it will likely have the opposite effect on employee morale. The goal is for employees to make sacrifices for the sake of building a better company, but Yahoo needs to represent something worth sacrificing for first, and that comes from great leadership. It appears that Yahoo is not there yet.

Photo: Flickr

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Naked With Cash is the year-long series on Consumerism Commentary where seven readers’ households share their financial progress on a monthly basis, and February is “insurance month.” I’ve partnered with financial planners who will offer some guidance along the way. Read this introduction to learn more about the series.

Kathleen is thirty-one years old, single, and living in Portland, Oregon. She loves her job, even if it isn’t very lucrative. With her $33,000 income last year, she’s looking to make more money from “side hustles” this year, such as her blog, Frugal Portland. To learn more about Kathleen, read her bio here. Kathleen is on Team Sara, with Certified Financial Planner Sara Stanich.

For Kathleen’s progress over the past year, see last month’s report. This month’s report, below, includes Kathleen’s progress over the three months leading up to the end of January 2013. Following Kathleen’s own self-analysis, Sara Stanich will offer thoughts from her perspective, and budgeting expert Jacob Wade from iHeartBudgets will also provide insight.

Sara Stanich, CFP appears courtesy of Stanich Group and Cultivating Wealth.

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What Is Your Motivation for Saving Money?

by Luke Landes
Cash

This week has been dubbed American Saves Week by the Consumer Federation of America, a non-profit organization founded in 1968 “to advance the consumer interest through research, advocacy, and education,” according to the organization’s website. All this week, the group and many partners in the non-profit world, in the financial industry, and among publishers will ... Continue reading this article…

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Calvin January 2013 Net Worth

by Luke Landes
Calvin Net Worth January 2013

Naked With Cash is the year-long series on Consumerism Commentary where seven readers’ households share their financial progress on a monthly basis, and February is “insurance month.” I’ve partnered with financial planners who will offer some guidance along the way. Read this introduction to learn more about the series. Calvin is in his early 40s, ... Continue reading this article…

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Proposal: A Formula for Your Personal Human Capital

by Luke Landes
Human capital formula

Calculating your net worth is easy. First find the value of all your assets, including your bank accounts, cash lying around the house, investments, and major assets like real property. Next find the value of all your liabilities, including loans, credit card balances, bills you have to pay soon. Subtract the liabilities value from the ... Continue reading this article…

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Moving Assets Into a Revocable Living Trust

by Luke Landes
Pennies

To prepare for the idea that someday I may no longer be alive, but also as a matter of general organization, I have created a revocable living trust. The primary benefit of this type of trust is to avoid a hassle for those who may be dealing with my estate after I die. No, I ... Continue reading this article…

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SteveDH January 2013 Net Worth

by Luke Landes
SteveDH January 2013 Net Worth

Naked With Cash is the year-long series on Consumerism Commentary where seven readers’ households share their financial progress on a monthly basis. I’ve partnered with financial planners who will offer some guidance along the way. Read this introduction to learn more about the series. SteveDH is retired, and he and his wife have two grown ... Continue reading this article…

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Now Covered By Umbrella Insurance

by Luke Landes
Umbrella insurance

There is nothing that can derail your financial success or path to independence as fast as being held liable for some kind of catastrophic loss without the appropriate level of insurance coverage. Automobile and homeowners insurance (or renter’s insurance) cover only up to a certain amount of your liability if you or your property is ... Continue reading this article…

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Anne and Matt January 2013 Net Worth

by Luke Landes
Anne and Matt Net Worth

This month is Insurance Month in the series Naked With Cash. Each month, seven Consumerism Commentary readers anonymously share their financial reports to gain insight about their progress towards their goals. Read this introduction to learn more about the series. Anne and Matt are twenty-seven years old, living in the Midwest, with two children. Read ... Continue reading this article…

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Stock Market Reaching Highs: Time to Exit?

by Luke Landes
S&P Index from November 12

On November 12, the world was still reacting to the election of Barack Obama to a second term in the White House. The financial media began its relentless coverage of the fiscal cliff. Market confidence was down, and so were the stock market indexes, immediately following the election results. This seemed to me to be ... Continue reading this article…

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Raising the Minimum Wage to $9

by Luke Landes
Minimum Wage

In his State of the Union address to the United States Congress and the television-viewing audience around the world, President Obama called for an increase in the federal minimum wage as a way to reduce poverty. If you believe that business owners have a right to pay whatever the market will bear, minimum wages, whether ... Continue reading this article…

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Maker’s Mark Adds Water

by Luke Landes
Maker's Mark

I’ve never had Maker’s Mark, but I do have friends who enjoy this particular brand of bourbon — or the bottles in which the bourbon is sold. With this latest piece of news, I’m wondering if the company believes the bottle is the product being sold rather than the alcohol inside. Beam, the corporate owner ... Continue reading this article…

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How to Adjust to a Global Employment Marketplace

by Luke Landes
Old Globe

Chances are good that there is someone else in the world who can do your job better than you can, who is willing to work a lot harder, who can spend more time on the job, and who will accept a lower salary for the same position. Thus is the inequity in the employment marketplace ... Continue reading this article…

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Capital One 360 Savings Account Review

by Luke Landes
Capital One 360 Logo

Capital One’s decision to acquire ING Direct was a great strategic move, but the deal had a few problems. Because ING Direct’s parent company, as part of a European bail-out agreement, was required to sell ING Direct in the United States and in other global locations, and to cease using the ING Direct name, Capital ... Continue reading this article…

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U.S. Postal Service Ending Saturday Delivery

by Luke Landes
Mailboxes

The U.S. Postal Service announced today that Saturday delivery of first-class items will end in August. When I asked a few years ago whether we should eliminate the Postal Service entirely, the question generated a good discussion, with many readers agreeing that the best solution to the perennial problem of the service not generating enough ... Continue reading this article…

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Should Public Employees Go Bowling?

by Luke Landes
Bowling

Whether you’re watching a twenty-four hour news channel, the local news, or national news “magazine” programs like 20/20 and 60 Minutes, the program directors need to be concerned about ratings. Television ratings are everything to those who work in this industry. If you can’t get an audience to watch a program, there are no eyes ... Continue reading this article…

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TurboTax vs. H&R Block: The Battle

by Luke Landes
H&R Block Tax Professional

As the I.R.S. is now accepting federal income tax returns, a war is intensifying. The war is between the major tax preparing companies. Intuit’s TurboTax, with its online and desktop software, and H&R Block, with its storefronts and online software, are the major opponents, and the battlefield is media, and the warriors are their advertising ... Continue reading this article…

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