Tom’s Big Picture

I had an engineering professor at A&M who shared this tip, and so I will share it with you.

This professor was a conservative Christian and an elder at a large church in town, and taught me Engineering Economics.  It’s the class where I figured out I was a lot better at economics than engineering.  Whereas I was an average chemical engineer (i.e. about average among the 14% who start and finish a chemical engineering degree without washing out), in this class I did really well.

I found it amusing that people smarter than me in something like, oh say Mass Transfer Operations (distillation towers made my brain hurt), totally shut down when it came to financial calculations.  Garden-variety amortization was too much for some of them.

Anyway, this professor shared a particularly interesting tax strategy I’ve never heard anyone else talk about.  The key to his strategy is the fact that the state of Texas allows you to pay your property tax for a certain year in either December of the same year or January of the following year.  There’s no penalty, and when you pay is up to you.

He would pay last year’s property tax in January and this year’s property tax in December.  In that year, he would also double-tithe (or alternatively, save up last year’s tithe in an interest bearing account and give it in January of the “on” year).  Then, in the “off” year, he would take the standard deduction instead of itemizing, which is $10,700 this year.  If you’re in the 25% marginal bracket (typical middle class situation), then this is a savings of over $1000 per year in taxes!

One key part is that you might have to own your house to do this, as the mortgage company usually escrows and pays your property taxes on the same date every year.  And your charitable giving has to be such that you would exceed the standard deduction, otherwise it’s pointless.  So it’s really a strategy tailor-made for financially secure Christians whose incomes are not too high (as the gummint starts taking away deductions and such when you make too much money- if there’s anything that’ll make you want to start the revolution now, it’s when you meet fedgov’s little friend named AMT).

I shared this with a conservative Christian friend (who has since reformed his view to align with mine) after I heard it.  He thought it was neat, but was concerned that such maneuvering, while legal, might be sinful.

What’s sinful IMO is sending one more penny to the federal fetus butchers than the minimum absolutely required to keep them from unconstitutionally seizing your person and property.

But that’s just me.  I’m a moderate on the issue.

In my last post in this series I described the paradox of millionaires as described in the book The Millionaire Next Door. The typical millionaire was an average student who now employs his more studious, academically superior peers. In the corporate world, brilliant engineers with stratospheric IQ’s work for $80,000 a year while the salesman CEO makes millions.

I believe nothing happens by accident, and I happen to know this one from experience. Having talked to lots of people with engineering mindsets about entrepreneurship, and learning from my own mistakes, I think I understand why. Bluntly, most people with this mindset are gearheads who care more about technology, equipment, trivia, minutiae, etc than the far more boring, purely logistical things that have to be mastered to run a business.

To give you a couple of examples from my own experiences, I recently had occasion to purchase a laptop for someone who is going to work for me. Now, a decent laptop for full-time business use should cost about $1500; no matter where you buy, a good one should cost about that much (I like IBM Thinkpads based on bad experiences with the HP brand- plus Thinkpads have North American support- my last call into tech support had me talking football with a guy in Atlanta). However, something about the idea of configuring and purchasing a laptop triggered something in the “gearhead sector” of my brain. Instead of giving the employee a budget to work with and having him purchase and configure his own laptop (staying within the Thinkpad brand), I must have spent at least two hours of my time checking out specs, playing with configurations, and finally ordering the thing. It was a stupid waste of time, but my “gearhead sector”, the pleasure I get from interacting with machines and gear, overcame what should have been my better judgment.

Another example: until about six months ago, I used to program heavily. Now, I am NOT a trained programmer, but thanks to my level of interaction of Microsoft Excel (there’s some sort of Foxworthy-type joke here: if you open Excel twice as much as Word, you just might be an engineer…), and the fact my parents bought me a computer in the 4th grade where I proceeded to learn BASIC from the manual (thanks Mom and Dad- the $2000 in 1980’s dollars investment at Radio Shack is paying off nicely), I can hack my way around Visual Basic for Applications. Now, if you use Microsoft Office at all, VBA is like playing legos with the innards of the applications. You can do anything you can think of, automatically- MS Word and Excel can do almost anything you can imagine. You can see how this is going to work out badly for me in terms of time management.

So every now and then we have a programming need. If it were at all possible, I’d jump into it with enthusiasm, programming in VBA things that should never be in VBA; I even bought a book and considered learning PHP/MySQL to program tasks too complex for VBA. About six months ago, I came to my senses. I rediscovered a website I had used in the past called Scriptlance. This is a site, partially thanks to Bill Gates’ lobbying for a flood of H-1B visas to put American programmers out of work, where you can find genuine American programmers (I always try to favor my countrymen when possible, even if they’re more expensive) who are experts at programming and will work for $15 an hour (as an aside, I have discovered that all kinds of professionals will moonlight for much less than what they earn in their dayjobs- my guess it’s because of debt bondage, not necessarily unemployment, where they’ve tapped out their high-earning job and need a side job to make payments- yet another reminder that debt is slavery!). To continue, these guys will work for $15 an hour, and guarantee no overages- they quote a project cost at what they think it will take them to program it, and one rule of programming is that it always takes longer- but I only pay their project cost. The other benefit is that the freelance system bypasses the artificial credentialing rackets of the universities, as someone’s feedback profile on actual projects is more important than a diploma.

So while I was wasting weeks every year programming, I could have paid someone else who is better than I am at the task, and bought back my time very cheaply. Again, my “gearhead sector” got in the way of optimizing my time.

What causes the “gearhead sector”? Why is it that smart people with analytical minds get bogged down in meaningless details?

The answer is surprising. Two factors to consider:

1. The latest studies on autism and its milder cousin Asperger’s syndrome are revealing that genetics and the assortive mating of a highly mobile society are probably the driving factors behind the increase in autism over the past few decades. Specifically, autism hot spots in Silicon Valley tend to indicate that in areas with high levels of “geeky” genes, autism is more prevalent. In other words, when geeky guys have the chance to marry geeky girls, they tend to, and this results in higher prevalence of autism. Which probably indicates that…

2. The “engineering mindset” of analytical thinking ability is probably one point along a continuum between “normalcy” and autism. Many psychologists are now rejecting arbitrary category-based diagnoses, replacing discrete mental illnesses and syndromes with the concept of “shadow syndromes”, reflecting the reality of a continuum on nearly every measure of human personality.

Autism and Asperger’s, if you recall the Rain Man movie, can result in a sort of idiot savant behavior, where the sufferer is adept at specific tasks usually involving non-human objects like trivia, math, or even music. The two conditions are most marked in what they do not involve, specifically human expressions of emotion and an inability to deal with change.

I believe the “gearhead sector” I referred to earlier, whether this manifests itself in irrational obsessions with technology, machines, or even Lord of the Rings trivia, is an embryonic form of Asperger’s. It even could be that the “moral courage” of the engineering mindset that I referenced in my last post is really just a partial emotional numbness, an ability to resist peer pressure and the herding impulse because of an embryonic autistic mindset. However, whatever the cause, courage is as courage does- Robert E. Lee was himself an engineer by training.

So the reason smart people work for less-smart people is because the smart people have a mild mental condition that prevents proper focus. This condition must be managed, and it can only be managed if it is acknowledged to exist and prevented from biasing how everyday tasks are prioritized.

Personally, I’ve learned to manage my situation by compartmentalizing this part of my personality- in two ways. First, I allow myself to study technology as a hobby- I subscribe to PC Magazine, read technology news, etc, but only as a hobby for pleasure. Second, I find ways to make the “human element” abstract and object-like- for example, whether a sales process or politics, when human interaction is thought of at a high enough level, it reduces to just another engineering problem. And that’s the real secret to blowing past the salesmen types in business endeavors- whereas they are guided by their instincts, their natural charisma to get things done with people, if you can apply your “gearhead sector” thinking process to solving scalable interactions with people, you hit jackpot. Instead of making a sale, you have a sales system. Instead of buying ads, you have a marketing system, etc, etc.

One of the few people I respect in the business advice world once said that it’s really difficult for “engineering types” as he called them to understand what’s really important in a given business, but once they do, and they apply that analytical ability directly to optimizing the revenue-limiting function of the business, the sky’s the limit for their success.

But what is important to think about in business? Where should your analytical skills be put to use, if definitely not in obsessing over laptop specifications, then where?

You’ll have to wait for the next in this series for my answer.

This year has seen a remarkable improvement in my personal productivity in my work, which as an entrepreneur is self-directed and thus prone to inefficiency by default from time-to-time. I have no problem with inefficiency by choice, which I call a time dividend (i.e. instead of compensating myself with money, I give myself free-time, which is also not taxed- yet), but it is the unintentional inefficiency in my work that I knew was costing me a good bit.

Now, I wasn’t a slacker or lazy by any means, but I came to a realization that our time is literally all we have in our mortal life and to waste it was possibly the worst form of stewardship of God’s gifts short of willingly taking on massive debt. Yet, I had no system or way of doing things that gave me the security of knowing that I was being as productive as humanly possible, or at least close enough to have a peace about it.

That changed when I read an interesting New York Times article about productivity earlier this year. Basically, our lives are too complicated and there’s magic in imposing an iron discipline of simplicity to how we conduct our day. What I’ve learned and how I’ve implemented:

The Multitasking Fallacy

Multi-tasking is a myth, as numerous studies have shown how much working on multiple tasks at once causes us to be less efficient than working on one thing at a time. In fact, I would argue that multitasking is doubly damning, as even IF we were equally efficient at multiple tasks, the work would be self-evidently sub-optimal. Let’s say I have three projects, each worth $500 a month to me in cost savings or new revenue; each project will take three weeks to complete. If I work on them in tandem (1/3 of the time), it will take 9 weeks (actually longer, due to multitasking inefficiency) to complete all three. That means $1500 in monthly profit is 9 weeks out from consummation. However, if I had done each project one-at-a-time, I would have started booking $500 a month in profit at 3 weeks, and another $500 at 6 weeks. Over the comparable 9 weeks, and saying a month equals 4.33 weeks, my calculations show that I would have gained $1039 in profit by working on the projects sequentially instead of in parallel.

But “multitasking” sounds sexy to business consultants, it makes people feel important by making them feel busy and stressed, and appeals to employers who reap false economies in lower headcount by putting multiple jobs on the same person. Thus, one of the ways I manage myself and the people who work for me is to try and minimize multitasking, making everything a narrowly defined task to maximize efficiency. Of course, reality is never this kind, but the realization that multitasking is an enemy, not a friend, helps me to work to minimize its effect on my efficiency.

Knowing that single-tasking is the ideal in a world of cell phones, email, and a million other distractions, I had to find a way to direct the single-tasking, or of managing my work. This is a two-part process: 1) minimize worry and distraction by cataloging and 2) optimize work by prioritizing. I will talk first about cataloging.

Cataloging What Needs to Get Done

One of the greatest benefits of cataloging what we need to get done is that it removes a good bit of mental “weight” from our everyday routine. The weight I speak of is the gnawing feeling that there is something I need to get done that isn’t getting done. The human brain is a remarkable machine, but one thing it is not good at is remembering large lists of information. Fortunately, our computer friends (and the old standby, pen and paper) are very good at keeping lists. Thus, I can remove the “weight” by writing everything down in one central location. The two keywords in that sentence are EVERYTHING and ONE- if you only write a few things and not everything, the weight will still haunt you, and if you don’t put everything in the same location then you are unlikely to use the system.

The NYT article found that the most productive people used a simple computer text file (i.e. notepad in windows) to keep information about tasks, in combination with using emails sent to oneself to spur reminders. Personally, I use an Excel spreadsheet to facilitate this. Again, keeping things simple, I use a four-column spreadsheet. The first column is the most important and in my opinion is the most critical part of the system- this column is the physical context for the task. If I need to make a phone call during business hours, the context is labeled as “DayPhone”. If I need to drop something off at the cleaners or pick something up at the store, it is labeled “Errands”. This is key: since we always exist in some physical context, our to-do lists ought to be in subcategories based on where we are at any given time. I only have a few contexts: DayPhone (means a business hours phonecall), Computer (just something I can do in front of any computer with an Internet connection, even at home), Office (a task usually involving the computer, but requires more concentration than what I can do elsewhere), Errands (random things that have to be done in town), EveningPhone (phone calls in the evening time at home), Home (things that need to be done at home), Waiting (things that require someone else to finish before I can move forward), and Someday (tasks that I’d like to do at some point but I have chosen to postpone). By batching tasks based on physical context, efficiency is maximized- much easier to make four phone calls in a row that suffer random interruptions in your work as you remember to make them.

The second column is the column describing the task, or what I’d normally put in a normal to-do list, like “Order a new computer.” The third column is the second most important and is called “Next Action”. The system is highly focused on physical realities, first the physical context of the task, and then the literal, physical next action. If this is “Order a new computer”, the next action would be “Visit Dell(dot)com, hp(dot)com and gateway(dot)com, compare prices and choose a vendor”. Without a literal instruction as to what’s needed next, our brains can fool us into making a task overly complex. Most things we do are quite linear.

The fourth column is simply a notes field where information such as the progress of the project, contact names and phone numbers, etc, can be stored.

The main advantages of a spreadsheet are that A) the information can be sorted easily, B) complex projects can be broken out to a separate worksheet, C) reference information can be stored in a separate worksheet, and D) complete tasks can be cut and pasted onto a “Done” worksheet.

All of this fits into one file that could easily be stored on a pen drive. In my case, I subscribed this year to beinsync(dot)com, a service that automatically syncs files across computers.

Prioritization of Tasks

Once all tasks have been cataloged, prioritization becomes somewhat automatic. This is the beauty and breakthrough of this system: for too long, productivity systems have been built on a top-down approach of defining values, setting goals, prioritizing tasks, etc. Much of this is based on the all-too-common business fallacy of wishful thinking. The wishful part is the idea that if we define our goals, somehow all of the other commitments we have will magically get out of the way and let us work toward them. What we need is not prioritization, but rather increased productivity and efficiency. We are much more likely to reach a goal if it is physically possible to reach due to increased efficiency- and this increased physical possibility is much more significant than the mere act of setting the goal.

So once I had all of my tasks cataloged and grouped by physical context and tagged with the next physical action, my productivity increased and reaching goals became a lot easier. And when you start reaching goals quickly, setting them is pretty easy to do. All in all, I started with about 75 to-do items, and the list was rather quickly worked down to about 30 core projects as easy tasks were completed and moved off the radar.

The key is to review ALL of the tasks weekly, and the comfort of knowing all of the tasks are written down in one place. And if I’m not getting something done, it’s not gnawing at me, but rather I’ve made a conscious decision to do something else instead and can justify that choice based on rational criteria; the alternative (and my guess as to how most of us work) is just working on whatever pops into my head or reacting to the day’s events to choose a task and worrying about what’s not getting done while I’m working on whatever I’ve chosen to prioritize for the day.

Other Tips for Productivity

Other random tips from my experiences this year:

1) Buy a larger monitor. I spent $600 earlier this year on a Dell 24″ widescreen LCD- worth every penny if you do any significant amount of work on a computer. Since a computer screen only holds about 1/3 the amount of information as a printed page, you need a screen about 3 times the size of the equivalent piece of paper for a given task. 24″ is a nice size, though I am tempted by the 30″, esp. as it comes below $1000. The article mentions productivity jumps of 40% with a large monitor.

2) Learn to use your bank’s online billpay if you haven’t already. I can’t believe they’ll write a check and pay the postage for free- amazing!

3) Stop listening to the radio in the car, including talk radio; Rush isn’t going to say anything that interesting. Use audiobooks, an mp3 player or something to make productive use of commuting time. My commute is only 7 minutes one-way and I’m amazed at how quickly I am able to make my way through sermons, audiobooks or other informational audio material I’ve downloaded and burned to a CD. All of that time would have been wasted listening to useless summaries of news events or bad music (as public radio is not playing classical at commuting time, but rather giving us the Communist News Review featuring narratives of left-handed vegan multiracial performance artists and their emotional struggle with their mother’s addiction problems and getting taxpayer funding for their work in oppressive capitalistic post-modern racist sexist theocratic homophobic America, ad nauseum).

4) Don’t check email as often to maximize your solitude for single-tasking. And for goodness sake, don’t let it beep at you to distract you from the task. Check email every two hours or so, clear it out, and then get back to work. Similarly, if you receive a lot of phone calls, turn your phones off for discrete periods and check voicemail later.

5) A tip I have not implemented, but should help: for difficult or unpleasant tasks, set a timer to work on that task continuously. I’ve heard of one person who set a timer for 48 minutes every day in the morning, and did nothing but write during that time. This person is able to put out many articles and books every year with this simple discipline.

6) Another goal: I do not yet know how to type correctly. I can type pretty fast, but I know it could be faster. I currently have my own self-developed method of using my middle finger on my right hand along with my index finger on my left hand. I use those two fingers to type- not hunt-and-peck, as I’ve been doing it for fifteen years or more, and I’ve memorized key positions. However, I know I could do better with all ten fingers than just two. I’ll try to make an effort this year to learn to type correctly, which should increase my speed. I’ve also heard that the dictating software is getting better all the time, and now Dragon Dictate gets 99% of words and is up to three times faster than typing. Since I have a lot of writing to do, I need to check out both options and see which would be more efficient- of course, dictating removes some of the privacy of typing, and would require me to work alone to avoid annoying others in the same room.

That’s all I can think of right now, but I’ll comment if anything else occurs to me. I can’t stress enough the level of control I now feel over my work relative to where I was a year ago using this system. As a somewhat naturally disorganized person, this may be more significant for me than for someone who defaults to an organized way of doing things.