Who Knew Running Could Be So Expensive?

I recently took up running.  I am training to run in the Los Angeles Marathon in just a few weeks.  Running a marathon is one of those things that I decided I wanted to do at some point in my life.  I wanted to do it earlier rather than later before I got too old and would not be able to run a very competitive time.  I thought I would run one marathon and be done with it but it just so happens that I actually enjoy it. I will probably end up running a few more over the next few years and if I really enjoy it, I could see myself doing a couple a year until I can't run anymore.

That being said, I am ending up spending way more money on this activity than you would think.  Running is one of those things that should be really cheap.  There really is no equipment.  You just put on a short and a shirt, throw on some shoes, and then hit the road.  But over the last six months I have spent the following

• Fee to register for the Marathon - $150


• New shoes - $200  (explained later)


• Arch supports - $30


• Running gloves when I run at night and it is cold - $15


• Running Shorts, 4-5 pairs.  $100


• Running Shirts, 4-5 $100


• Socks $50 (also explained later)


• Athletic tape $15


• Calf Compression Sleeves - $30


• Running Light for night running - $8.00


• ArmBand for Iphone + headphones - $30


• Energy bars and various food items - $50

All said, that is over$750!  That is a lot of money considering most of you can just go right now and go running for free.

Now some of what I have spent is because I have had legs problems since I started running longer distances.  Right when I got to double digits in terms of miles, I have had a few different ailments, mostly shin splints and knee pain.  At first I thought it was due to what I thought were high arches.  I won't get into physiology involved with this (underpronation vs. overpronation) but basically the shape of your feet have a lot to do with the type of shoe you should buy.  At first I just bought an arch support insert thinking it would help.  It actually  made it worse.  I then looked at buying different shoes.  Higher arched people should buy shoes with more cushion so I bought the Nike Air Max+ that you see pictured above.   So I bought the shoes but unfortunately, these shoes fit a little bit small.  This made them uncomfortable to wear so I decided to buy really thin running socks rather than wear my normal thicker cotton socks.  This definitely helped the shoe fit better but I still found that running would cause me to have pain, often severe, in my legs.  This caused me to buy the athletic tape and the calf support.  This definitely helped the situation but it didn't resolve it.

After much searching, and several weeks off form running, I discovered a problem with my thinking.  Although my feet definitely have high arches, I am also quite duck-footed.  That is, my feet then to not line up straight when I either stand or I walk.  they tend to be turned outward by several degrees.  Although my arch would suggest tend to run on the outside portion of my foot, the positioning of my feet suggests I run on the inner portion of my foot.  I have gotten the completely wrong shoe!

I had not really noticed this before because the problem is only slight.  They tell people to check their running shoes to see if they wear unevenly and my shoes normally wear fine.  I believe my problem is very small, but this small problem is magnified when I run long distance.

I ended up buying the ASICS Men's GT-2150 This shoe is much better for people who tend to run on the inside part of their foot which I am apt to do because I am duck-footed. It is probably too early to know if this will actually help me out but preliminary results look pretty good.  I went on a run last night and my legs aren't bothering me that much.  I am hoping this is the end of the money I have to spend on a sport that should otherwise be free.  But I am also looking at getting the CW-X running tights (pictured below) if my knee condition does not improve.   That will be another $80 spent!  I'll let you know soon if I buy it and it helps.

Taxes and the Census

Do you think people don't really think about taxes? Look at the latest census numbers to come out and the effect it has on Congressional seats.

New York	-2
Ohio	-2
Illinois	-1
Iowa	-1
Louisiana	-1
Massachusetts	-1
Michigan	-1
Missouri	-1
New Jersey	-1
Pennsylvania	-1
Arizona	1
Georgia	1
Nevada	1
South Carolina	1
Utah	1
Washington	1
Florida	2
Texas	4

There are seven states that don't have any state income tax.  These include  Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming.  Of the eight states that actually gained seats, four of them are included in that list.  The two that gained the most, Texas and Florida, are some of the most income tax friendly states.   Some of the least friendly states, New York and New Jersey, are the states that are losing people on a relative basis.  of course, this is not the only factor causing this shift.  There also seems to be some correlation between warmer and colder states, but it is pretty interesting when you look at it through the lens of people trying to avoid paying taxes.   This is exactly what you would expect.  People protesting with their feet.

The Hidden Cost of Control

One of the things that managers and executives often forget is the very high cost of putting in controls to run the business.  I am not here to say that a company should not have any controls.  There are obvious places that rules and process should be put in place to make sure the desired outcome is achieved.  But I see the same pattern happening over and over again for companies as they reach a certain size.

When companies are just starting out, there is usually little to no controls in place.  Developers have access to production machines, employees can buy anything they want, assets might be listed in someone's notebook.  But as companies get bigger and bigger, and more employees are hired, something inevitably happens.  Someone screws up.

This is actually caused by several problems.  But top on that list is the fact that companies lower their hiring standards.  Nobody likes to admit that it happens but it does.  If everyone could be trusted to do the right thing and know what the right outcomes were, there would be very little need for controls.  But as it is, companies feel compelled to add headcount the bigger they get.   When it is discovered that finding really talented, dedicated, and smart people is difficult companies compromise.  They instead turn to the misguided notion that process can replace people.

The thinking goes that if you just put enough rules in place, any idiot can follow the rules and achieve the right outcome.  Problem is that the same people who believe this do exactly that, they hire idiots.  This of course perpetuates the cycle.  Since idiots are hired, they need more rules put in place for them.  Now you may be thinking, what's the big deal?  So a few less than talented people are working at a company.  No big deal right?

Well I have yet to see a company segment out their rules by the capable and the idiots.  The same rules apply to everyone.  This creates a reversion toward the mean.  The idiots are able to do a little bit more when they are told exactly what to do.  Of course the superstars on the team also have to follow the same rules.  Rather than being able to use their judgment according to the situations, they get bogged down in formal process and rules which were never meant for them.

Management and executives always say the same thing, "We will keep the process down to a minimum".  My favorite is, "The process is simple.  You just need to ask and I will approve right away."  The problem of course is that management is very busy.  If all decisions have to be made by a single individual, and that individual is never around, decisions don't get made.  This slows people down by a lot more than you would expect.

But there is more.  Not only does it slow down things as they are happening, it actually prevents things from happening in the first place.  I have seen this behavior with my own eyes.  Rather than have to fight through the process, smart people will just not bother.  They do not want to waste their time hunting people down and getting a dozen people to sign off of every little change.  They just will clam up and never make any suggestions, waiting for someone to tell them exactly what to do.  In this day and age, where innovation is king and speed is of tantamount important, this can be a slow and agonizing death.  I have a great example of this.  I have been in situations where every little computer request needed to be scrutinized.  I had an engineer whose computer was painfully slow.  Now realize, a computer is an engineer's main tool.  If it slows down by 1/2 you literally have an employee who is 1/2 as productive.  Rather than ask for a new computer, the engineer just suffered.  When his computer slowed down, he would just sit and stare at the screen.  How ridiculous is that?

Of course, this problem is not readily apparent, so management often does not notice how their own participation can slow so much down.  In my next post, I'll describe what should be done to fix this problem.

How People Keep Themselves Poor

It is often amazing to me how people treat money.  What I am about to tell you is a true story about somebody I know.

Someone I peripherally know got married.  She had not known the gentleman too long but it was young love and she did not know any better.  They decided to have a "traditional" wedding.  That of course means "expensive".  All told, the wedding cost over $70,000.  But here is the kicker.  The family did not pay for the wedding.  Instead, the bride put it all on her credit card.

This is not someone who comes from a very rich family.   $70,000 is probably two years of salary to this person.  But you only get married once right?  But wait, it gets worse.  The marriage lasted all of three months.  I will not get into the reasons why but the couple had differences that they were not prepared to deal with.  But think about this for a second.  Two years of salary are now down the drain.  In reality it is closer to three years when you factor in taxes.  All this for a marriage that lasted 1/10 the time it will take to pay off the expenses.  Let's compare this to my wedding.   I spent a total of $7000.  I make much more than the person I am talking about and have much more money in the bank.  I did not have to save for my wedding nor did I have to scrape to get the money together.  I just had it.  My wedding had no material impact on my financial situation and never will.  Despite the lack of impact it had on my finances, I can honestly say I had a perfect wedding.

This incident will impact this girl for the rest of her life.  She is going to spend the next several years attempting to pay this debt off and it will drag like a weight behind her no matter what she does.  So what is the lesson here?  The problem goes well beyond the mere fact that she spent way more on her wedding than she could reasonably afford.  It is about how people view money in relation to their life.

Like it or not, your life will involve, and often revolve, around money.   You need it to live and you need it to do most anything you want to do.  Since money is so involved with your entire life, the accumulation of wealth is something that has to be very carefully cultivated.  As this incident shows, one mistake can create havoc.  We live in a society where most people feel fine trading short-term wants over long-term needs.  This is what happened here.  I am sure the bride did not think about the long term ramifications of what she was doing.  She wanted to have the "perfect" wedding and was willing to trade away her future for it.  Of course, she probably did not consciously make this trade off and that is the problem.  The future seems so far away and unreal to some.  It is difficult to actually think about it and plan for it.  Because it is difficult, people choose not to deal with it.  Of course this is no excuse, life does not really accept excuses, and when reality hits them people often wonder how they got themselves in this mess without realizing they were the source of their own problem.  They just decided to defer the problem to their future self.

Low Interest Rates Does Not Equal Good Deals on Housing

I keep hearing real estate "experts" say that now is a great time to get into housing because of the low interest rates that are currently available.  Let's forget the fact that real estate experts always say it is a good time to buy housing.  They said it in 2000 at the beginning of the boom and said it again in 2007 at the peak of the housing bubble.

But let's look at the logic of this argument.  There is no doubt that interest rates are low right now.  This means that people can generally buy a more expensive house because their payments are going to be less per month as they pay less in interest.  So it sounds like a great deal doesn't it?  Get more housing at less money.

However, there is a slight problem with this.  It isn't just one person who has this opportunity for low interest rates, it is the whole country.  This creates competition for housing and drives up demand.  This is exactly what happened in the early part of the century.   Housing prices rose because people had access to cheap money.  As the money became more expensive, and the cost of housing reach unsustainable levels, the bubble burst and housing prices tumbled.

So think about the current situation.  Interest rates are once again insanely low.  They have absolutely no where to go but up from here.  We know that as mortgage rates go up, people can not afford as much home lessening competition.   There is no way that interest rates can go much more down from here so that means that they will go up.  Since we know that prices and rates are inversely related, this means that housing prices are definitely coming down.

Do you really want to own a depreciating assets?  Experts say if you have no plans on moving for several years than don't worry about it.  But who knows what your situation will be like in a few years.  In the long run, it is much cheaper to have a smaller principle payment and higher rates than the reverse as you can always refinance but you can't easily lower the principle amount on a loan.

So please, to all real estate professionals, quit trying to sell that low interest rates mean its a great time to buy.  It just doesn't add up.

Why Finishing College Might Actually Hurt Your Career

I was thinking about all the people who never finished college and went on to great careers.  Just look at this list off the top of my head

• Bill Gates


• Steve Jobs


• Michael Dell


• David Geffen


• Larry Ellison


• Mark Zuckerberg

The list could go on for quite a while. In thinking about this I actually think this is not entirely a coincidence.  On that list are some of the most powerful and influential people in our modern business world.

Now in any sort of argument like this it is important not to confuse cause and effect.  It could easily be argued that all these people would have been successful whether or not they completed college.  It is not the fact that they DID NOT complete college that they were successful.  It is merely the fact that successful people will be successful no matter what.

While I certainly believe that may be partly the reason, I'm not sure there is not some level of causation.

One of the things I have been thinking about lately is how our society is organized and how it has created certain outcomes.  One of the things that is readily apparent to me is that our society is not geared to produce creative thinkers.  Our education system is very rules based.  And rules are in direct opposition to creativity.  The more rules you put on someone the more you constrain and limit her creative side.

We have created millions of students who know how to follow the rules and conform.  We use standardized test to measure performance and emphasize rote memorization and regurgitation over creativity and original thinking.  Those who are able to excel at these things are the ones who do well in school but they are not necessarily the ones to change the world.  You cannot change the world if you are constrained to thinking like everybody else and by following the rules that others have laid out for you.

I am not trying to be negative about our education system.  I am someone who benefited greatly from the current system as my strengths lie in taking standardized test and in rote memorization.  I therefore excelled in school.  But I am also not (yet) lighting the world on fire like the list above.  We as a society have emphasized this type of learning and environment to produce exactly what we wanted; a group of workers who would excel at doing exactly what was asked of them.   This was exactly what was needed for the majority of jobs that we created during the twentieth century.  Factory workers need to follow instructions exactly.  So do accountants (the last thing we need is "creative accounting".

So while I think our education system is great at producing this type of worker, it is not so great at creating the Steve Jobs and Mark Zuckerbergs of the world.  As we move away from a world where the good middle-class jobs are no longer available in the factories of Detroit but only via the screens of Silicon Valley, can our education change with it or will we be doomed?

Too Many Lawyers?

I went back to my ten year college reunion this weekend.  Princeton has reunions every year.  The big reunions are every five years (the biggest being the 25th reunion) and as such, I decided to go down for the day since I was in New York City.  Quite a crowd turned out.  Despite it being her 25th, Michelle Obama was not one of them.   It was more enjoyable than I would have predicted.  Last time I went to reunions for my fifth, I did not have a particularly good time.  I decided to go for the entire three day event.  By the end of the second day I really was wondering what the heck I was doing there.  This time, I decided only to go for the day (and none of the nighttime activities) and it ended up being the perfect amount of time to see the campus and a few of my friends I wanted to catch up with.

One of the things that sticks out to me though was a fact that was given at the end of the P-rade.   As my classed marched down I heard two facts.  One was that my class, the class of 2000, was setting attendance records for the 1st, 5th, and 10th reunions (all reunions I attended).  But the more interesting fact was that the number one profession of my class was being a lawyer.  To be exact, it was stated that 14% of my class had become lawyers.

Now, I went to an Ivy league school and you would expect a large percentage of my class to be in high paying jobs.   Since law is a high paying job it does not surprise me that it is a profession many in my class pursued  What surprised me was that it was number one.  And as I thought about it I though what a sad commentary that actually is for our society.

Don't get me wrong.  I think lawyers are necessary in our society.  I also don't think all lawyers are scumbags like others might.  But for me, law is an ancillary profession.  It is best as a supporting function to the creation of value and wealth to our society.   It is in the same class of profession as accountants and clerical work.  These are jobs that are absolutely necessary but at the end of the day is overhead to the actual creation of wealth.   This is in contrast to things like medicine, manufacturing, or the creation of intellectual property that actually drive the economy and create value in our lives.

So what does it say that the brightest mind in the country if not the world are pursuing careers that are not creating wealth to our society?

I think it says a couple of things.  First, I think it says something about how the cost of obtaining a world-class education has skewed the choices we make.  Most of my class graduated with quite a bit of debt.  This problem is only getting worse has college becomes more and more expensive and having a college degree does not make you stand out anymore.  It used to be, for my parent's generation, that having a college degree was not the norm.  Now, all my friends have one and that in itself means you have to find other ways to differentiate.  Most people are finding it necessary to get a post-graduate degree to really make themselves stand out and earn the money needed to pay back these college loans. This is a true fact.  I am the ONLY one of my college friends that does not have a post-graduate degree.  Think about that for a second.  I'm the only one.  I have lots of friends from college and they all decided to pursue even more education.

The second problem I see is that we are emphasizing the wrong things. As a country, we have created a society where one of the best paying jobs is being a lawyer.  Now to be fair, this has been the case for quite a while.  But I would argue that before it was more a function about the scarcity of the education required to practice law than it was about the voracious appetite to produce lawyers.  But we are now pumping out lawyers at a very large rate.  There must be an overwhelming demand for lawyers in order to keep salaries as high as they are.    This is because we have created such a complex set of laws and a society that is so litigious that it is required for any large corporation to have an army of lawyers ready to protect and to sue.

So rather than create professionals ready to find the cure for cancer or to create the next great product we create an army of people ready to sue others.  How on earth can we change this dynamic?