Moved!

I know I've been a little (ok a lot) MIA, but I'm back! The purpose of this post is to let you know that I've moved to:

http://VITAnomics.blogspot.com

So, show me some love and click on that link and follow me over there!

My head is over-flowing with new ideas right now (all finance/life related, of course), so you can finally expect a steady flow of posts from me! See you at VITAnomics!

Defining Moment

I'll be the first to admit, I'm one of those people that claim to have a epiphany about once every other week. I know it's like the Boy who cried Wolf, but this time, I really had one. I swear.

Contrary to the definition of an epiphany that states it as something sudden, this wasn't that. This was the moment where everything I've let enter my mind, for who knows how long, harmoniously clicked. It was like all those self-help books and inspirational blogs came together and said, "Alright, Lana - this is it, this is the moment where you're going to realize how to get your shit together." All I have to say to them is, thank you.

What did I learn?

Healing isn't a retrospective thing. I've dwelled on the past. Replayed my mistakes over and over again. What did I realize? That I'm probably the only one that hasn't forgiving myself. It's a hard concept to accept, but if you're a genuine, well-meaning individual with the ability to feel empathy - no one cares as much as you think about the things you've done, or do. It all goes back to that whole "we're our biggest critic" thing. Think about it. Your mind isn't consumed with the mistakes other people have made, it's consumed with the mistakes you've made. Let it go. If other people can forgive you, you sure as hell can forgive yourself.

Now, The Dip taught me this one. Know when to give up - that's half the battle. Forget "quitters don't win." The biggest winners out there are probably also the biggest quitters. The fine line comes with knowing what to quit. If you know you don't have the passion to carry you through the hard times when the thing you love goes from fun to hard, quit it. If passion isn't there, you're going nowhere. Pick something you love and focus on that and only that. That's when you become great. So there - break through or break free.

And the last thing I'll mention in this post is our dear friend, Winnie The Pooh. The Tao of Pooh is something that I really think everyone should read. It's one of the only two books that I've read cover to cover in one sitting. Despite just being a "silly little bear", Pooh can teach you quite a lot. His main lesson? Just let things happen. Stop articulating and planning every single little detail. The best things come to you when you just go about life doing the things that you feel are right. Have a destination and head there without strict plan and everything will fall into place.

All these thought (and a few other) have brought me to a very happy state of mind. Everything will be OK. Everything will work out. Let go and move forward.

Rude Awakening

Do you have that one quote that you say to yourself over and over again in your head when things get bad? No? Just me? I hope not.

I've always been quite fond of the saying, "Time heals all wounds." I remember thinking, "That's so right, it'll all get better with time. Yeah, I just need time." However, I recently realized that those thoughts translated into this, "Yeah, I'll just sit on my ass and wait for all these bad feelings and troubling situations to go away. I'll just watch videos on YouTube until time comes to the rescue."

That quote makes Time out to be some unfailing hero. In reality, isn't time our biggest enemy? It kills - literally. It withers your body and weakens your mind. It's the cause of all rash decisions whose justifications ended with "I don't have all the time in the world." I hate time. It's like I just ended a friendship with someone I loved and now the relationship has turned into one of complete spite. It's a draining concept and whoever the hell said that in the end, the race is only with yourself is insane. You're racing time. Every day. Every second. And the sad truth is that Time will always win.

I know what you're all thinking - without time, we'd all be complacent, never feeling the need to do anything better because, well, we have all the time in the world. That fact does not make me want to forgive time. It doesn't make me want to walk arm-in-arm with it down the path of life. What time does remind me of though, is your equivalent of the arch nemesis, aka - your biggest competitor. We all have that one person in our lives we want to outdo - whether it be for our own pride or purely just out of spite. Regardless of the reason, they're the person that pushes us to achieve more - not in the nice "I've got your back" way, but in the "I will put you to shame if you don't accomplish this" way. Whatever, right? A push is a push. And a push in the right direction with bad attentions is still a push in the right direction.

Will Time and I ever reconcile our differences and get back to the loving relationship we had before? I have no idea, but I sure hope so. It's better to be friends with someone you know you can never beat than to be their enemy.

You Plus One - A Risky Investment

We've all heard the term, "You Plus One". Those three words that we see on invitations that are a harsh reminder to those of us without the "plus one" - those of you that are just you. It'd be silly of me not to take a stab at a saying with a numerical value already attached to its original meaning, so here goes!

First, let's just think about this in terms of numbers in the most simplistic way possible. If "you plus one" signifies you and a loved one, then a full cycle of a relationship would be something like this: you + one - one = just you. Add one and minus one for every partnership you attempt and fail and ultimately, it leads you back to just you (clearly, I'm not counting the one - your forever and always).

Then what the hell are we doing? All this work and you're right back to where you started, it's like some sort of awkward one-step dance, you tire yourself out just to end up exactly where you started - looking like a fool.

Luckily, it's not that simple. "You plus one" is a phrase that can tie relationships to the unpredictable investment world in terms of acquiring debt to invest.

When you borrow money to invest in something, you want to be sure that the interest on your debt is lower than your expected return. So, if borrowing that $1 is costing you 12 cents, you sure as hell better make sure whatever you invest in is going to make you more than 12 cents.

Now let's bring it back to real life. That "plus one" you get when you enter into a relationship is a debt. You're borrowing this person to invest in yourself. Because let's face it, when a breakup occurs, you lose a lot more than the physical presence of that person. You lose security, comfort, a sense a happiness - you lose more than just the "one". And those things, my friends, are the interest of that debt, the payment you have to make for the opportunity of having that person in your life.

So, what makes that debt worth it? It's worth it when the profits of the investment outweighs the temporary pain. For this to be a successful debt-investment type deal, that "plus one" in your life has to help you grow. Maybe they teach you new wonderful things. Or maybe they teach you that you're worth more than you originally thought. When you come out of that relationship a better person than you were when you entered it, that's when profits outweigh lost. That's when the debt was worth the interest.

But like I said, a relationship is an investment and an investment comes with risks. You won't always come out on top. Sometimes you'll fail miserably. Sometimes that person leaves you broken and shattered, not any better (maybe a little worse) than you were when it all began. That's a failed investment - a poor business choice - something we will all fall victim to. When it comes down to it, you have to hope that more of your investments turn out in profit than lost. And ultimately, at the end of the string of failed relationships, you have to hope that it's you - better than your were before - debt free.

CFA Brings New Life

Alas, my CFA books came in the mail today - signifying the repeat of my hellish months of equations and analysis. Good news for this blog though: renewed knowledge comes with fresh ideas for future entries! Be on the lookout!

Business of LIfe

We all live with the objective of being happy; our lives are all different and yet the same - Anne Frank

I know I said that my next post would explain why we stay in relationships when we reach that point of no return, but - though anachronistic - I feel like I should explain the purpose of this blog – where all my ideas are coming from and why I feel that life can be brought down to these economical equations.

How I see it, life is a business. That sounds horrible - I know - but hear me out. A business where you make more money than you put in can be deemed successful. A life where the happiness you get is at least proportionate to the effort you put in to get it can be deemed great.

Let’s talk business. A firm starts out with a business plan. The owner will appoint a board of directors – a group of people who have the right to vote and decide on factors affecting the business.

A firm will also have shareholders – those who invest in the company and have voting rights on certain matters. They put money into the corporation in hopes of monetary profit.

A business will come across many things in its lifetime:

1. Mergers
2. Bankruptcies
3. Quarters where returns are below expectations
4. Quarters where returns are above expectations

The ultimate goal: monetary profit.

Now, life. You start out with dreams and aspirations. Your family is there to guide you, to use their known right to give input on factors affecting your life. And sometimes, to straight up tell you what you have to do.

You’ll have friends – people who invest in you. They counsel you and guide your decisions. They put in time and advice in hopes of making you more content. And in an equation of any true friendship – seeing you happy makes them happier.

In your life, you’ll come across many things:

1. Relationships
2. Extreme loses
3. Failures
4. Successes

Your ultimate goal: happiness.

Connection. Your dreams are your business plans and your family - your board of directors. Your friends represent your shareholders. Mergers equate to relationships and bankruptcies equal extreme loses. Lower than expected returns are failures and above - successes. And, most importantly: life's profit is happiness, a business' profit - money.

There will be future entries that will add more depth to what I've already mentioned above. It's not hard to draw parallels between life and economics. They both come down to supply and demand: how to get what you want and need with the resources you're given and how to find that comfort at equilibrium where supply meets demand.

Diminishing Margin of Happiness: Why Relationships Plateau

Do you ever wonder why as a relationship develops, the little things don't seem to mean as much anymore? Why the first bouquet of flowers they brought you meant so much more than the fifteenth?

Economists have a term they call the diminishing margin. In their respect, it means that each additional input yields a smaller and smaller increase in output. More simply put, the more of something you have, the less it means.

It's strange how when both people are the same as when they first met, a relationship still manages to plateau. Here's what I like to call The Diminishing Margin of Happiness. It explains why repetitiveness and consistency make a relationship boring.

I know I said before that you can't measure happiness, but for this example, I'm breaking my own rule. Let's use one of the most widely known gesture of affection: flowers. The first time your sweetheart shows up at your door with a gorgeous bouquet, you're ten times happier than you were before. The second time they come with roses in hand, you're only about eight times happier because, well, it's been done. You begin to expect this kind of behavior from them - and we all know, predictability takes away from excitement. The third, six times happier. It continues like this until them showing up with flowers leave you feeling nothing.

When it comes down to it, the same things that made you happy at the beginning won't make you as happy two years down the line. When they don't change and come up with new romantic gestures to show you their love, you lose the excitement. Things go from being endearing, to predictable, to routine. You're still happy, but they don't make you happier today than they did the day before. What's left?

When the production level of a company plateaus, they invest their resources in Research and Development. They try to find something that boosts the production output so that it's increasing as fast as it did in the beginning. That's exactly what a relationship needs when things begin to level out. You need something new, something exciting, something that hasn't been done or seen before.

However, if a company exerts its resources and can't find anything to increase production, they know that perhaps it's time to shut down. So, when you've done everything you possibily can to put that spark back in the relationship, but it doesn't work -- well, maybe it's maybe time to move on. Easier said then done, I know. But, why? Don't worry, I've come up with an equation for that too. But, I'll leave that for my next post.

Inelasticity of Love

We are never so defenseless against suffering as when we love, never so forlornly unhappy as when we have lost our love object or its love. - Sigmund Freud

Freud says it all, nothing hurts as much as getting your heart broken. We all know that overwhelming pain that you can't shake. Yet again, here's another attempt to explain something so intangible with a little empirical thinking.

Let's start off with some quick definitions any student of economics has seen:

Elastic: a slight change in price results in a sharp change in demand.

Inelastic: change in price results in a slight, if any, change in demand.

More simply put: an elastic good is something you can live without if your conditions aren't met. An inelastic good is something you need, something you have to have - no matter the price. The conditions for inelasticity include the following:

1. There are few substitutes and they are difficult to find and obtain
2. It's a necessity
3. It's unimportant how much you have to put in to obtain it
4. Little time or inclination to seek for a substitute

Ok, with that said, let's get to the point. When you first start dating someone, they're completely elastic. One little thing that irks you and your demand for them drops drastically. Or, in other words, they're out the door. But, when you start investing yourself into someone, start feeling something, inelasticity steps in:

• You know that there's no one out there just like them. (condition 1 of inelasticity)
• You need them in your life because things just don't feel right without them there. (condition 2)
• You will give all of yourself to this person. (condition 3)
• You don't want anyone else. (condition 4)

See where I'm going here? Why is losing love so hard when there are so many fish in the sea? Maybe it's because no two people are exactly the same. No one fits with you in the exact same way. The little quirky things in their personality that make you love them - that make them so perfect for you - make them completely inelastic in your life.

Yes, Freud did do enough drugs to kill a horse, but we can't argue that he's off here. Losing someone you need - someone you have to have - that hurts. Like hell.

Average Joe and Ordinary Jane

Anyone who knows me knows that I have an established list of fears - ranging from open water to kankles. But anyone who really knows me, knows that it's all gibberish. So here it is - my actual number one fear in life: being average.

I know that sounds like an awful thing to be afraid of because, well, by definition - it's typical, it's common, it's what most people are. But, I know I'm not the only one with that fear. We all want better. We all want more.

But, how do you measure average? How do we define who we are in these terms? Lucky for us, Wikipedia did all the work. The wikipage spits out all the data - telling you if you're the Average Joe or Ordinary Jane. It's broken down into categories: families, income, education, social class, occupation and homeownership...

Those are a lot of categories. The full on Average Joe has to fall into the average range for all those classifications. However, even Wikipedia admits that some things can't be measured - like the aspect of family. The more I look at these statistics, the more I question. Are any of us really average?

I know, that question makes no mathematical sense. Of course there are average people, questioning the presence of an average in anything is blasphemy to any empirical mind. But, contrary to what I try to convince myself - that most things in life can be dumbed down to equations - there's no dumbing down here.

There's too much subjectivity in it all to really categorize ourselves. Happiness can't be measured, I'll never argue that. There are too many different definitions to the word success. The life that I picture to be ideal - to someone who comes from difference experiences - could seem nothing more than average.

So, it's time to smash my own fear. Maybe, we're all above average in some aspect of our lives. Life is made up of so many components and it's hard to believe that anyone can fail at all of them. I actually believe that everyone has something they excel at. Honestly though, I think that anyone who is happy with the life they lead is already more than average.