Work Out Woes: How to Motivate Yourself

I recently devised a plan to motivate myself to achieve two goals: get in better shape, and acquire the new iPad Mini (so cute!) before graduation (May 4th).

As an economics major, the idea of incentives is always hammered into my brain. I'm shocked that it took this long for me to actually apply the concept to my own life!

Here's the agreement that I made with myself:
1) For every mile run, I award myself $10
2) For every mile ran after the first mile, I get 1.25 x 10 x # of miles ran.
3) For every pound lost, I get $50.

The numbers may seem large, but since I'm going out of town for two weekends,  I really only have 22 days to earn as much money as possible. I chose the numbers based off of the cost of an iPad Mini, the amount of days I have before graduation, and the amount of money I have to put aside. If you're planning on doing a similar workout agreement with yourself, I'd advise coming up with your own numbers based off of the length of the challenge and the amount of money you are are able to give yourself.

I'll upload my progress photos when the challenge is complete! Wish me luck and please let me know if you've tried something similar and if it worked for you!

Bills of the FL. Legislature

As Florida’s legislative session nears its halfway mark, I wanted to take a moment to review what I think are some of the most important (and interesting) bills of the 2013 session:

1) Internet Cafes: In response to the resignation of Lt. Governor Carroll, the Legislature has been moving swiftly to outlaw the operations of Internet cafes. Both the House and Senate versions of the bill would ban what have been called “adult versions of Chuck-E-Cheese” in the hopes of reducing gambling. In a 108-6 vote, the House version of the bill, HB 155, was passed on Friday, March 22^nd, while the fate of the Senate version, SB 1030, is yet to be determined.

2) Vehicle Registration Fees: Sen. Negron, a Republican from Stuart, proposed SB 7132, a bill that would eliminate the $220 million in tax breaks insurance companies receive while simultaneously lowering the fees that car owners pay for registration. The bill would reverse the 2009 decision to increase fees in order to raise revenues. Currently the bill is on sitting on the desk of Sen. Gaetz, who will determine which committee will hear it next.

3) Pension Plans: A top priority for Speaker Weatherford this session is reforming the state pension plan. The Senate and House have gone back and forth revising the plan, but there’s still a compromise to be made. As it stands, the current proposal is "a measure that would retain the traditional pension plan but offer incentives to new workers to opt for the 401(k)-type retirement coverage.(1)"

4) Internet Sales Tax: If everything with SB 316 proceeds as planned, online-only businesses will no longer be able to avoid charging a sales tax for online purchases. Sen. Detert proposed offsetting the increase in taxes with a decrease in the tax rate applied to the sale of communications services (i.e., cable and phone bills). Currently, the bill has only been heard by the Commerce and Tourism Committee and has a long way to go until it could potentially become law. 

5) Property Insurance – Massive property insurance reforms are making their way through the Senate with the state-run Citizens Property Insurance Corp. serving as a target. The intended goal is to shrink the government’s role in insurance. For more information, click here.

6) SM 78: In this Senate Memorial, the FL Senate urges the U.S. Congress to repeal the income tax and enact a national retail sales tax. This is likely just a symbolic move, as a national sales tax is far from making its way into law at the Federal level. 

7) Gun and Ammunition Taxes for School Safety: Both the House and Senate version of the bill would require the taxes paid on guns and ammunition to go towards a school-safety trust fund. The NRA-ILA (National Rifle Association – Institute for Legislative Affairs) has listed the bill as one of the “worst senate bills.”

---

[1] http://politics.heraldtribune.com/2013/03/30/at-legislative-sessions-midpoint-full-agenda-of-life-issues-remains/

The Price of Government Policies

The concept of unintended consequences happens everywhere in life. These consequences can take form as a drawback or can sometimes be surprisingly beneficial, but by its definition each consequence results from a purposive action. When individuals experience unintended consequences, rarely do they come close to the amount of harm that can be done by the unintended consequences of governments. Government policies, to their credit, usually have good intentions in mind; but good intentions don’t necessarily mean good outcomes, and indeed, they often mean the opposite.

Recently the Seattle city council passed a ban on plastic bags for environmental reasons, but what they didn’t expect was an increase in shoplifting. With reusable bags entering the stores more frequently, shoplifting became easier for thieves and much harder to track for storeowners. 

While this event only affects a small group of people, let’s take a look at a few devastating examples in history:

1)   The Dodd-Frank Act. With good intentions in mind, its unintended consequences have put US corporations at a competitive disadvantage with foreign firms, costing American jobs.

2)    Limits on free trade. For example, the US government has placed quotas on imports of steel in order to protect steel companies. The results: less cheap steel meant higher prices for automakers, putting them at a disadvantage with foreign companies.

3)   Social Security. In addition to it’s financial flaws, economist Martin Feldstien suggests that the economy would grow much more quickly without social security. Knowing that they will receive social security, workers save less for their old age. That means less savings are available and less investment takes place, thus leading to an economy that grows slower than it otherwise would.

4)   The Federal Reserve Act. While its intention was to stabilize the monetary system, its reality has been a devaluation of our dollar.

5)   Sarbanes-Oxley Act. Its intention was to set new or enhanced standards for public company boards, management and public accounting firms. The results: it provided an incentive for small US firms and foreign firms to deregister from US stock exchanges. 

A few more recent examples:

1)   Financial transaction taxes. Goal: eliminate wasteful trading and reduce market volatility.  Three democrats recently introduced legislation to institute a tax on financial transactions, but seem to have forgotten the lessons that can be learned from New York and Sweden on its unintended consequences. What happened in New York was actually an increase in the cost for capital for investors and an increase in trading volatility by 10%. 

2)   The housing bubble. The push for “affordable housing” caused government created institutions, Fannie Mae and Freddie Mac, to buy up sub-prime loans and securitize them. More and more risky buyers who otherwise would not have been able to receive a loan were able to become homeowners. The housing bubble burst as homeowners, who were risky borrowers to begin with, were not able to pay off their mortgage. As a result, foreclosures ran rampant and the price of housing started to plummet, which lead to the current recession.

The list could go on and on, but the point is that when governments make regulations and rules in order to design an economy to their liking, the unintended consequences can be devastating. Governments ignore the concepts of individual preferences and human nature, and it’s us, the citizens, who have to pay the price for it.

"The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design."- FA Hayek

Backpacking Europe 101

If you’re an American citizen planning to backpack through Europe, have I got some advice for you!

First things first:

1) Decide where you want to go and if it even matters where you go (who cares where, you’re still going to Europe!). But I understand, some people have bucket lists, etc. etc. So deciding where you want to go can help you narrow down the best and cheapest flights, as well as travel dates. You can either decide exactly where you want to go, a general region that you want to explore, or declare your trip a free for all. My suggestion is to use kayak.com and to make your dates flexible. This allowed me to find a round-trip flight from Miami to Dusseldorf for only $700.

2) Once you’ve decided on general (or exact) travel dates, you should decide how long you want to spend in each of the places you want to go. Again, your trip can be a total free for all, which would mean that knowing how long you want to spend in places is irrelevant. But nonetheless, you’ll need a mode of transportation no matter how long you want to stay in certain places. If you get at least one thing out of this post, I hope it’s this: buy a eurail pass that best fits with your travel plans. I know, I know… $700 for a monthly pass (or something like that)?!? It sounds ridiculous, but it is totally worth it! You can travel to any country that participates (don’t go to Poland. I learned firsthand that they don’t participate), at any time, on any day. No reservations necessary. Just look in the timetable, decide which place sounds coolest, and go. I honestly can’t think of a more stress free vacation than that. If you're not into trains, I would also suggest flying with ryanair.com

3) What in the world should you bring?! Remember, a lot of hostels will wash your clothes for you for a decent price. So pack lightly, but pack appropriate clothes. Remember that Germany and Poland are not like America in May. Do your research and pack accordingly. Dresses are light and easy to throw on. If you pack solid colored tank tops, you can layer them differently each day so it doesn’t look like you’re wearing the same shirt in every photo. At least a week's worth of underwear and socks, a bathing suit, and walking shoes will all come in handy. 

You'll also want to include these items:

• Invest in a sturdy backpack that meets all of your airlines' requirements
• Locks for your backpacks or lockers (some hostels don't provide locks)
• Travelers checks, money, ATM card (duh)
• Raincoat
• Hoodie (remember, bring appropriate clothes for your travel region)
• Club/going out clothes
• Camera + charger
• Batteries if you need them
• Toiletries (you can always buy stuff over there, too)
• Towel
• Sandals
• Power adapter
• Passport and ID (again, duh)

Those are the basics -- where to go, when to go, how to get there, and what to wear. If you have any great backpacking stories, post them here! Have fun!! 

Here's a few of my backpacking photos! 

Minimum Wage, Maximum Folly

A few of my thoughts on an age-old argument (I could probably write on this all night...)

Minimum wage laws sounds like a good idea. I mean, who would be against guaranteeing someone a fair, living wage?! But like most economic issues, there’s more to it than what meets the eye.

Starting off with a simple supply and demand model for the labor market, we can see that a price mandated above the equilibrium price and quantity (called a price floor in econ terms) results in a shortage. That is, the amount of people who are willing to work at that price exceeds the amount of jobs that employers are willing to provide at that price. Herein lies the main problem: based on the simplest model taught in econ101, minimum wage laws are predicted to cause higher unemployment.

So why don’t we see our unemployment numbers skyrocket after the minimum wage is increased? After all, the minimum wage in many states rises quite frequently, albeit in small intervals. We seem to be caught in a vicious cycle. One in which inflation rules the game.

Many proponents of increasing the minimum wage support the idea of matching the new base wage to the current rate of inflation (called indexing).  Since your purchasing power goes down if your paycheck remains the same while inflation increases, this would make sense. But that’s only one side of the story.  An increase in the minimum wage increases the costs of production. With increased costs of production, producers must raise their prices (technically there’s another option where the company absorbs the costs, but realistically you should expect an increase in prices). This would cause an increase in the general level of prices, bringing us back, full-circle, to inflation (economists call this cost-push inflation).

So what we’re not seeing is a huge difference in unemployment because of minimum wage laws, but what we are seeing are unintended side effects. I should note, however, that minimum wage laws do cause a small amount of unemployment, particularly among teenagers; but like the small increases in wage, the unemployment numbers are also quite small.

With minimum wage increases causing an increase in the general level of prices, we seem to be sitting back at square one, just with higher prices. But wait, there’s more. My bold statement of the day: I think minimum wage laws are why we have unpaid internships. If I may add another, I think minimum wage laws not only hurt our teens, but also illegal immigrants (who are people too). Unskilled laborers now can’t have their wage fall below a certain level, but the illegals can!

There's also another problem with this inflation game. Let's face it, most of the minimum wage workers don't save at a very high rate, but for the people who do, inflation shrinks their future wealth. It may look like we're back at square one, but a weaker purchasing power means less bang for your saved bucks.

Another side effect brought to light by labor economist David Neumark is that oftentimes businesses will replace unskilled labor with skilled labor. Suppose that a job can be done by either 2 skilled workers, costing $8/hr a piece, or by 3 unskilled workers, costing $5/hr a piece. In this scenario the firm would prefer the 3 unskilled workers. With a rise in the minimum wage from $5 to $6/hr, the firm would no longer prefer the 3 unskilled workers, but would instead prefer to incur a cost of $16 rather than $18. 

Before I ramble on forever, here's my solution: I’d say, “abolish the minimum wage”, but I realize that we live in the real world. So maybe this is a better solution: stop allowing the Fed to print so much (explicit) money. Then maybe we wouldn’t feel the need to keep up with inflation, and then maybe we wouldn’t create more cost-push inflation. 

One final note: abolishing the state-mandated minimum wage would not result in businesses paying their employees $3/hr. Businesses have an incentive to keep their wages at this abstract idea of an equilibrium price. If their wage rates are too low and their particular market is pretty competitive, they'll lose a lot of their potential employees to their competition and/or incur higher turnover costs. And if a business is in a market that isn't very competitive, they'll have an incentive to keep their wages at a fair rate. If behavioral economics has taught me anything, it's that people love to appear fair and that they suffer - in business and in their personal life - when they're treating others unfairly.

Journey to a 6-Pack

So many women spend multiple hours a week at the gym, but never see results. That's because there's more to the equation than just working out. You need cardio, strength training, and a healthy diet. One without the other will not get you to that sexy beach bod, I promise (unless you run a ridiculous amount or something). Okay, so in general, you need all three. The first one I always suggest is diet. Changing up your diet without stepping foot in a gym can produce amazing results. Here's what I suggest, but first, you should download an app compatible with your phone that allows you to take photos and give descriptions of your food -- I use "foodsnap." This will hold you accountable to what you're eating. Second, in addition to taking photos of your food, take photos of yourself. You may not feel like your diet is working, but if you follow it 100% (with a little room for cheat days, of course!), looking back at your day 1 photo will provide you with that extra motivation.


So here it goes:

A few things to get rid of right away: 

• white bread
• sodas and sugary drinks (including those Starbucks Frappuccinos!) 
• fast food (even if it's supposedly "healthy" fast food, it's not)
• fried foods

Foods to wean yourself off of:

• bread in general (it's really hard to do, but try to avoid it at all costs)
• wheat in general (same as above)
• all fast food (I know I put that in the "right away" section, but it more realistically belongs here)
• anything in the aisles of the grocery store

As a general rule of thumb, if you can't find it on the parameters of the grocery store, you probably shouldn't be eating it. 

So what can I eat?!

My eating schedule usually looks like this: 2 eggs with spinach in the morning with a cup of tea, a big salad with plenty of vegetables and leftover meat (sometimes I'll do tuna) for lunch, and some kind of meat with veggies for dinner. For a snack I'll eat almonds and greek yogurt, and after a workout I'll either make a smoothie or a protein shake. But basically, here's what I suggest:

• Meats/fish! Chicken, salmon, tilapia, turkey, etc
• Good fats - avocados, coconut butter instead of vegetable oil, meats
• Nuts, in moderation - almonds (switch from peanut butter to almond butter, too!), walnuts, pecans
• Veggies of all kinds, lots of them - cooked or raw, just eat lots of them!
• Fruits, in moderation
• Healthy snacks - greek yogurt, Luna bars, veggies, nuts
• Eggs! If you don't have time to make eggs in the morning, try making a frittata at the beginning of the week

How much should I eat?
If you're going out to dinner, eat half. Ask for the other half to be put in a to-go bag before it even comes to your table. If you're out to dinner, order a small salad before your meal gets there to suppress your appetite - this way you'll eat less once it comes. Some people like to eat smaller meals 4-5 times a day to keep their metabolism up. If that works for you and you have the time to plan ahead, go for it. I eat 3 meals a day, with a few snacks here and there. Sometimes I'll do intermittent fasting to shrink my stomach and eat less during my next meal. Learn more about fasting here.



There's so much more to add, but I've hit on the most important foods to get you started. Stay away from fast food places, shop the parameters, and plan ahead. A couple great websites to continue your diet education are marksdailyapple.com (my favorite!) and eatingwell.com. 

It sounds so simple, but we've all failed at diets before. Make a commitment to yourself, and to your future self. To be what others aren't, you have to be willing to do what others won't. 

Up next! Part 2 of 3: Work Out Woes

Simplifying Life and Reducing Stress

I started simplifying my life a few months ago, and as much as I'd like to be able to say that I saw wonderful results right away, I'd hate to be a liar. I started actually seeing results when I made it a habit to follow my own advice. Why did I decide to to embark on such a project? I like my things. Why would I want to get rid of my things?

Simplification has been the key to reducing stress in my life. It wasn't about getting rid of the things that I liked, it was about getting rid of the things that I didn't need. But that's only half of the simplification process. Once I started getting rid of physical things, the harder part was to start getting rid of the intangibles, the thoughts and habits that held my mind in negative captivity. But before I get ahead of myself, here's what I did, and what I recommend, for starting your journey towards a simpler, more relaxed life.

Caveat: These things will take you a while, and by no means is this list comprehensive. Be patient, and find out what works best for you. It will all be worth it.

1. Simplify your social media. Stress can come from feeling "overconnected". The first thing that I did was go through my Facebook page and delete unnecessary old photos. I had something like 80 albums on my Facebook -- some of which housed only 4 or 5 photos, with album titles like "Weekend in ____(insert city)!" I deleted a lot of the details that I provided in my "about me" section, including the extensive details about my education and my previous workplaces.

Just to be clear, I'm not suggesting that you delete everything about yourself on your Facebook. In a world where information is so easily accessible, I've found it so refreshing to keep some of the personal details about my life, personal. It's nice to have a conversation with someone and to actually learn something about them that I couldn't find out by looking at their Facebook. Decide what you can do without on your page, and enjoy the fact that not everyone on the internet knows everything about you.

2. On a similar note, download the "Self-Control" app for your computer. With it you can block yourself from certain sites, such as Facebook, for whatever period of time you set. Once it's set, there is no taking it back.

3. Clean your desk. Just do it. Take the time to just go through all of your desk drawers and commit to throwing away all of those unnecessary stickers, business cards, papers, birthday cards, broken pens, cords and chargers that belong to old or unknown technology, and anything else that has been in there for years. There isn't much else to add here. Take an hour of your time and just get it over with. You will feel so much better afterwards, I promise.

(If you're really feeling ambitious, I would recommend tackling your closet and garage too)

4. Turn off your phone. When you find yourself in a situation where you really shouldn't be interrupted -- church, business meetings, class -- just turn off your phone. Most things can wait an hour, and if they can't, you'll hear about it in some other way.

5. Make a list, prioritize, and stick to it. I find that I get really stressed when I have a long list of unfinished tasks at the end of the day. Make your list and tell yourself that you're going to get through it. If you're feeling especially distracted, refer to numbers 2 and 4.

Similarly, don't keep things piled up on your desk. If you don't plan on getting to them that day, put them in a drawer. Staring at unfinished work can be just as stressful as staring at an unfinished task list.




Again, this is just a starter list, but I promise that once you turn these things into habits, you'll see the stress in your life slowly disappear.

More on those pesky intangibles later :) In the meantime, what has helped you reduce the stress in your life? Have you tried any of my suggestions? Have more suggestions? Post below!