In Business Insider, there was a recent interesting article entitled 3 Lessons that Investor Learned After Losing His Job, Reputation and USD1.6 million. It is a story about a poor Kentucky boy, Jim Paul who made it all the way to the top- he served on the Board of Governors of the Chicago Mercantile Exchange- and lost it all. If the story ended there, it would have been just tragic. But, he is in America and there, they are used to heroes (don't we all?). Paul then started all over again and slowly rose back up. Today, he is a manager of a team in the investment advisory firm, Brendan Moynihan. Together with the boss, Moynihan, Paul wrote a book about his experience entitled "What I learned Losing a Million Dollar?" If you have the time, read it. If you don't have the time, read this article.

I like to highlight Point #3 of the article; Emotional decision-making is dangerous when it's done in a group. Many people are investing these days through the sharing of information in a group. You have people joining forums, what's app groups and investment study groups to learn about what's good to buy today. With very few exceptions, investment decision-making in a group should be avoided at all cost. The pitfalls include front-running, rumor-driven tradings, egoistic tradings and over-tradings. Investment decision-making is best done away from the maddening crowd, whether real or virtual.

Alas, we have seen many stocks going up these days just because they were mentioned in the press or surfaced in the rumor mills. This is only possible when the market is made up of many inexperienced players and too much money floating around. These newbies would pound on any bit of information or rumor to get into a trade. If they don't wise up quickly, they will suffer, like lambs to the slaughter.

Nonetheless, there are still some good stocks for investing purpose. Take the time to read the lengthy research reports and do your homework. Always, aim for a decent return of about 15-20%. If someone promise you an investment that could double your money, you better walk away quickly. In investment, our enemies are always greed and fear.

There’s huge value in experiments that help us decide whether to go big or go home

Here’s a little puzzle. You’re offered the chance to participate in two high-risk business ventures. Each costs £11,000. Each will be worth £1m if all goes well. Each has just a 1 per cent chance of success. The mystery is that the ventures have very different expected pay-offs.

One of these opportunities is a poor investment: it costs £11,000 to get an expected payout of £10,000, which is 1 per cent of a million. Unless you take enormous pleasure in gambling, the venture makes no sense.

Strangely, the other opportunity, while still risky, is an excellent bet. With the same cost and the same chance of success, how could that be?

Here’s the subtle difference. This attractive alternative project has two stages. The first is a pilot, costing £1,000. The pilot has a 90 per cent chance of failing, which would end the whole project. If the pilot succeeds, scaling up will cost a further £10,000, and there will be a 10 per cent chance of a million-pound payday.

This two-stage structure changes everything. While the total cost is still £11,000 and the chance of success is still 1 per cent, the option to get out after a failed pilot is invaluable. Nine times out of 10, the pilot will save you from wasting £10,000 – which means that while the simple project offers an expected loss of £1,000, the two-stage project has an expected profit of £8,000.

In a real project, nobody could ever be sure about the probability of success or its rewards. But the idea behind this example is very real: there’s huge value in experiments that help us decide whether to go big or go home.

We can see this effect in data from the venture capital industry. One study looked at companies backed by US venture capitalists (VCs) between 1986 and 1997, comparing them with a sample of companies chosen randomly to be the same age, size and from the same industry. (These results were published in this summer’s Journal of Economic Perspectives in an article titled “Entrepreneurship as Experimentation”.)

By 2007, only a quarter of the VC-backed firms had survived, while one-third of the comparison group was still in business. However, the surviving VC-backed firms were big successes, employing more than five times as many people as the surviving comparison firms. We can’t tell from this data whether the VCs are creating winners or merely spotting them in advance but we can see that big successes on an aggregate scale are entwined with a very high failure rate.

The option to conduct a cheap test run can be very valuable. It’s easy to lose sight of quite how valuable. Aza Raskin, who was lead designer for the Firefox browser, cites the late Paul MacCready as his inspiration on this point. MacCready was one of the great aeronautical engineers, and his most famous achievement was to build the Gossamer Condor and the Gossamer Albatross, human-powered planes that tore up the record books in the late 1970s.

One of MacCready’s key ideas was to develop a plane that could swiftly be rebuilt after a crash. Each test flight revealed fresh information, MacCready figured, but human-powered planes are so feather-light that each test flight also damages the plane. The most important thing a designer could do was to build a plane that could be rebuilt within days or even hours after a crash – rather than weeks or months. Once the problem of fast, cheap experimentation was solved, everything else followed.

Some professions have internalised this lesson. Architects use scale models to shed light on how a completed building might look and feel. A nicely made model can take days of work to complete but that is not much compared with the cost of the building itself.

Politicians don’t find it so easy. A new policy is hardly a new policy at all unless it can be unveiled in a blaze of glory, preferably as a well-timed surprise. That hardly suits the MacCready approach. Imagine the conference speech: “We’re announcing a new array of quick-and-dirty experiments with the welfare state. We’ll be iterating rapidly after each new blunder and heart-rending tabloid anecdote.”

A subtler problem is that projects need a certain scale before powerful decision makers will take them seriously.

“The transaction costs involved in setting up any aid project are so great that most donors don’t want to consider a project spending less than £20m,” says Owen Barder, director for Europe at the Center for Global Development, a think-tank. I suspect that the same insight applies far beyond the aid industry. Governments and large corporations can find it’s such a hassle to get anything up and running that the big stakeholders don’t want to be bothered with anything small.

That is a shame. The real leverage of a pilot scheme is that although it is cheap, it could have much larger consequences. The experiment itself may seem too small to bother with; the lesson it teaches is not.

Also published at ft.com.

(Reprinted from The Edge – Options pullout, 20 October 2014 issue) Dear Kam, Is it my imagination or is the world falling apart? Doomed Clearly, the world is falling apart. Ebola, ISIS/ISIL/IS, Hong Kong, Ukraine/Russia, MH17, MH370 and the continuing obvious signs of the degeneration of Malaysian politics. I just watched a video from Penang […]

The problem of saving the environment, then, is also the fundamental social problem: how do we come together and co-operate?

I owe Lucy Mangan an apology. Seven years ago she wrote a column for The Guardian about the folly of overfilling your kettle. Ever since then I have harboured the unspoken thought that it was one of the most wrong-headed things I have ever read.

Now, however, the International Monetary Fund itself has planted the banner of economic cost-benefit analysis firmly on the side of Mangan. Perhaps I am the one who was wrong-headed.

Mangan’s point was that the green movement has become “hog-tied” by its insistence that doing the environmentally responsible thing is a selfless act. Greens should point out that we’re constantly doing idiotic things that not only damage the planet but waste our own money. Throwing away one-third of the food that we buy is one of them. Over-filling our kettles is another. Mangan concluded that if you and I would “stop being such a frigging idiot”, the planet would be in much better shape.

That sounds like a simple plan. Alas, thrifty kettle-filling will not help much: the physicist David MacKay, author of Sustainable Energy – Without the Hot Air, reckons that kettle-boiling represents about half of 1 per cent of the typical British household’s energy use. As for one-third of food being wasted, Mangan was misled by a statistic produced by the anti-waste organisation Wrap. In “throwing away food”, Wrap included a failure to compost kitchen scraps and used tea bags. In fact, while it is easy to identify ways to reduce carbon emissions, it’s not quite so easy to find the things that both help the planet and save self-centred individuals time, trouble and money.

This is because the central, defining quality of all environmental problems is that they’re problems of shared resources. Driving a car clogs the streets for other drivers; burning coal dumps acid rain on someone else’s forests; above all, emitting greenhouse gases chiefly harms other people, many of whom have not yet been born. The problem of saving the environment, then, is also the fundamental social problem: how do we come together and co-operate?

Enter the IMF, with the astonishing claim that dealing with climate change can be a self-interested business after all. Two IMF researchers, Ian Parry and Chandara Veung, along with Dirk Heine of the University of Bologna, have been trying to find more credible examples of the overfilled kettle problem – that is, opportunities to be better off right now that would cut carbon dioxide emissions into the bargain.

The Montreal Protocol of 1987 was an international agreement to phase out chlorofluorocarbons, or CFCs. According to a recent analysis by The Economist, this single agreement has done about as much to limit greenhouse gas emissions as all nuclear and hydroelectric power generation put together. The striking thing about the Montreal Protocol, though, is that its purpose was to protect the ozone layer. (It succeeded.) The fact that CFCs are also a potent greenhouse gas was a happy coincidence.

The IMF researchers do not mention the Montreal Protocol but they argue that national governments are leaving similar opportunities lying on the pavement, waiting to be picked up. Let’s say, for example, that the US unilaterally introduces a tax on carbon dioxide emissions of $50 a tonne. That move would raise tax revenue, allowing other taxes to be cut. It would also raise the price of anything that embodied carbon dioxide emissions. Driving would become slightly more expensive, and this would reduce congestion and traffic fatalities. Coal-fired electricity would suffer a competitive disadvantage, and this would encourage a switch to cleaner energy, improving local air quality and saving lives. All these benefits would be enjoyed within US borders.

Is $50 a tonne of carbon dioxide emissions a big tax? Yes and no. It is several times higher than the EU’s emissions trading scheme price; it may even be high enough to serve as the main policy for dealing with climate change, although it is hard to be confident of that. It would also add about $900 to the taxes paid, directly or indirectly, by the typical US citizen, and roughly half that if introduced in the EU. These aren’t trivial sums but they are small enough to be offset with reduced taxes elsewhere.

On the other hand, the tax would add less than 10 per cent to the cost of a return flight from London to Sydney; slightly more than 10 per cent to the cost of petrol in the US, and less than a penny to the cost of overfilling your kettle 20 times a week. Life could, and would, go on.

In short, the IMF researchers are presenting us with the mother of all overfilled kettles: policies that governments could introduce that would promptly help their own citizens, while only incidentally making a major contribution to slowing climate change. What makes this plausible is that while individuals and companies do not habitually waste their own resources, we all understand that governments engaged in political rough-and-tumble waste national resources all the time.

So I apologise to Lucy Mangan. The next round of climate change negotiations should focus on governments encouraging each other to stop overfilling their own kettles.

Also published at ft.com.

Just because a problem exists does not mean that a new regulation will solve it

“Each time I visit the city the food gets worse and worse.” Tyler Cowen, economics professor, foodie and author of An Economist Gets Lunch, despairs of Paris. Cowen isn’t the only person to lament the state of French cuisine. This may be why – in a quintessentially French move – the nation’s government has introduced a new law in an attempt to improve standards.

The quixotic law in question is public decree No. 2014-797, more popularly known as the “fait maison” rule, in which restaurants may use a new saucepan-with-a-roof-and-chimney logo on the menu beside any dish that is made on the premises. More accurately, the restaurants must use the saucepan-with-a-roof symbol to denote house-made dishes, but the definition of house-made is rather whimsical, thanks to French legislators.

The entire affair seems unlikely to improve French cuisine but it does provide a nice lesson in practical economics: regulation is a superficially appealing answer to life’s problems but often fails to provide real solutions.

The first difficulty is that regulations are developed by politicians, and politicians pay close attention to lobbyists. In the case of the fait maison rules, it is perfectly legitimate to buy industrially prepared ingredients, provided the dish itself is assembled on the premises. Frozen fish is fine. Skinned and boned chicken is fine. Onion powder seems to be fine. Certain types of factory-made pastry are fine, although others are not. Exceptions are baffling: frozen pommes frites are not allowed unless, of course, the fries are to be oven-baked. Diced, vacuum-packed vegetables are fine but be sure to add a home-made sauce. Eliminating prepared sauces was a priority – but still, it is hard to understand these rules as anything other than the outcome of a prodigious lobbying effort by industrial food companies.

Even if the rules were more logically laid out, the French government would still be committing a classic managerial blunder. To borrow the title of a 1975 article by management professor Steven Kerr, they are engaged in “the folly of rewarding A while hoping for B”.

What France demands, naturellement, is good French food. But insisting on home-made food ensures neither quality nor Frenchness. Freshly prepared food can be terrible, while some food prepared elsewhere is superb. (My brother-in-law is a master baker operating out of an industrial estate by Oxenholme station in northwest England. I’d back his frozen sourdough loaves against fresh bread baked by a more generalist kitchen any day.) The French parliament presumably hopes that by rewarding house-made food it will indirectly improve quality. This is optimistic.

A third problem is that the regulation may produce unintended consequences. Consider a chef who offers a fresh fruit crumble alongside a selection of factory-made cakes and puddings. By law, he or she must display the fait maison logo beside the crumble, implicitly damning all his or her other dishes. Such chefs might decide to offer no house-made dishes at all, rather than bring unwelcome questions to the forefront of their customers’ minds.

Policymaking is flawed and crude while the world is subtle and unpredictable. That is why regulations are often rigged from the start, are only peripherally related to the real matter of concern and have a tendency to backfire.

“There is no substitute for consumers who demand the right kind of food and who otherwise won’t buy it,” says Cowen. This is true. The British surely get the food we deserve, and because we have become less clueless about food, our food has become less appalling. (Perhaps I am wrong. Perhaps Tony Blair passed a law back in the late 1990s outlawing prawn cocktails and tinned vegetables, and I missed it. But I suspect not.)

Yet if informed and demanding consumers are essential for food, they are essential for other markets too. In banking, there is no substitute for consumers who refuse to be sucked in by teaser rates and fines in the small print. In investment, there is no substitute for consumers who avoid high charges and are unmoved by selective claims about past performance. In medicine, there is no substitute for consumers who can tell the difference between an expert doctor, a defensive pusher of scans and blood tests, and an outright quack. But such customers are rare. In fairness to the customers who struggle, it is far harder to identify a good pension than a good pizza.

Regulators, then, must muddle through. Sometimes they outsource the job to professional bodies who will punish egregious offenders. Sometimes they try to outlaw particularly troublesome practices. Sometimes (too rarely) they decide that anything they did would make things worse.

There are few easy answers. Regulations are sometimes essential; they are also sometimes both burdensome and useless. The UK’s planning laws should ensure an adequate supply of elegant, well-built homes. They do not. International rules on financial stability did not give us financial stability. Just because a problem exists does not mean that a new regulation will solve it.

This summer I went to Italy for my summer break. I have always found the food there far better than in France or Britain. I doubt that the credit for that should go to the Italian parliament.

Also published at ft.com.

Emma Watson, what a spirit stirring speech ... egalite everyone!!!

Emma Watson Gender equality is your issue too

- See more at: http://www.unwomen.org/en/news/stories/2014/9/emma-watson-gender-equality-is-your-issue-too#sthash.MlgAsPeU.dpuf

In a world of limited generosity, who is to say which cause should be at the head of the queue?

Last week I finally succumbed to social pressure and invited some colleagues at the BBC to film me having a bucket of iced water tipped over my head. As surely nobody needs telling by now, the deal is that people film themselves being drenched, donate money to the US-based ALS Association or its British equivalent, the Motor Neurone Disease Association, and then nominate three further people for the same treatment.

The challenge is an infectious plague, humiliation TV and pyramid scheme all rolled into one, and it’s fundraising genius. Lady Gaga’s done it; Mark Zuckerberg has done it; George W Bush has done it. By the time this column is in print, I imagine everyone on the planet will have done it.

Social pressure is a powerful thing, and it’s refreshing to see it being used to spread smiles and encourage a generous spirit. This is not new, of course. Charities have long sought celebrity endorsements, and seeing famous people have liquids poured on them is a venerable tradition. As for seeking sponsorship to run a marathon or climb Kilimanjaro, we all know that shamelessly pressuring friends and colleagues to give money is the very essence of the exercise.

Peer pressure can also produce reluctant givers. Adriaan Soetevent, an economist at the University of Groningen, studied church collections in an open basket versus a closed collection bag. The open basket elicited larger donations. And in another clever field experiment run by three economists, Stefano DellaVigna, John List and Ulrike Malmendier, fundraisers went door to door raising money. Some households, chosen randomly, had received a flyer warning them exactly when the fundraisers would be around: this warning dramatically increased the chance that the door would not be opened. Not all of us welcome the opportunity to give money to randomly selected charities, it seems.

This time, the social element seems to be a source of no small joy: at a family gathering recently, people were gleefully ice-bucketing each other until the garden had become a swamp. Surely the ice bucket challenge is a good thing, raising money for a worthy cause while giving us a good chuckle into the bargain.

But any good economist has to ask – and I do apologise about this – “a good thing compared to what?” Some critics have suggested that charitable donations are a zero-sum game: more money for the ALS and MND associations means less money for other charities. The evidence for that proposition is thin, as it happens, but even if the many tens of millions raised by the ice bucket challenge are brand-new charitable giving, we could still ask where that money would best be spent.

The strength of a viral giving campaign is also its weakness: people join in for a laugh because their friends have put them up to it, rather than because of a logical analysis of the most worthy cause. Motor neurone disease traps people in their own bodies as they lose the ability to move, speak, eat and, eventually, even to breathe. It is a truly dreadful condition – but so is bowel cancer, fatal diarrhoea or simply starving to death. In a world of limited generosity and finite resources, who is to say which cause should be at the head of the queue?

The fact that ice-bucketeers are donating to the ALS Association feels entirely arbitrary. If the Red Cross or the American Cancer Society had happened to be the beneficiaries instead, very little else about the viral campaign would have changed. Would that have been a better situation?

GiveWell is an organisation which seems well placed to answer such questions: it aims to give donors the information they need to make the most effective donations. It sounds like an impossible job. GiveWell’s approach is to find cost-effective, evidence-based approaches such as distributing antimalarial bednets, and then search for transparent, efficient charities pursuing that approach. One of their top recommendations, for example, is the Schistosomiasis Control Initiative – a charity that could use a catchier name. It organises treatment for parasitic worms, a very unsexy cause indeed. But the worms can do a lot of harm and are absurdly inexpensive to treat – hence the finding that the SCI offers value for your donated money.

In the end, I sent a few pounds of my ice bucket donation to the Motor Neurone Disease Association. It would have felt wrong, somehow, to do otherwise. I sent a more substantial donation to SCI, surely one of the least media-friendly charities on the planet. All lives are equally valuable but some lives may be saved far more cheaply than others. It seems strange not to respond to a philanthropic bargain.

No doubt some will find this line of reasoning colder than a bucket full of iced water. But the truth is that whenever we give money to one cause rather than another, we’re making a decision about how deserving that cause is. When a social media campaign gathers momentum, it is human nature to make that decision spontaneously and without a moment’s reflection. It feels good. But feeling good and doing good are not the same thing.

You can donate to the SCI at www3.imperial.ac.uk/schisto

Also published at ft.com.

Work shouldn't always feel like a burden, but keeping your motivation can be a constant struggle. Here are three factors that can help you understand and upkeep your motivation.

Daniel Pink, author of Drive, highlights the three main factors that drives everyone:

1. Autonomy: the control you have over your work. The more you can control what to do and when to do it, the more motivated you are.
2. Mastery: the sense of progress you get. The more you think you are getting better at what you do, the more motivated you are.
3. Purpose: the meaning you get from your work. The more what you do matters to you, the more motivated you are.

Your autonomy makes work flow easier because you have what you do down to a science. Your mastery pushes you forward because you feel like you're getting better, and we like to do what were good at. Your purpose makes you feel like what you're doing is important, and that it's important that you do it. Focus on understanding what these three factors mean for you and your motivation will stay healthy.

Drive | Daniel Pink via Life Optimizer

Photo by Steven Depolo.

(Reprinted from The Edge – Options pullout, 15 September 2014 issue) Dear Kam, There are many theories about what happened to flight MH17. They must be true because they’re on the Internet. All I know is that we’re not being told everything. In The Dark Malaysians are no less susceptible to conspiracy theories than anyone […]

Don’t draw up your task list in the morning – do it the evening before, when you will have a more distant perspective

What does going on a diet have in common with time management? Here’s a musical clue: Little Orphan Annie sings: “Tomorrow, tomorrow, I love you, tomorrow – you’re always a day away.” Sheila Hancock’s song “My Last Cigarette” has a more cynical bent: “I’ll give up the habit, I will even yet, when I’ve had just one more cigarette.”

The songs could hardly be more different but the common thread is the way that the promise of tomorrow is transformed overnight into something altogether different: today. Strange things happen to us when tomorrow turns into today. Tomorrow we’ll eat fruit rather than candy bars. Tomorrow we’ll watch Krzysztof Kieślowski’s Blue rather than Sleepless in Seattle. And yet curiously when tomorrow arrives, we eat chocolate and watch romcoms. Our preferences flip.

This isn’t just my whimsical summary of human nature: the psychologist Daniel Read of Warwick Business School and his colleagues have conducted experiments finding pretty much exactly this behaviour. Experimental participants, given the opportunity to select food or movies in advance, are more likely to choose the highbrow film or the healthy snack. When the moment of truth arrives, they often change their minds if given the option.

Economists give this tendency the charmless name of hyperbolic discounting. Hyperbolic discounting poses some obvious and well-understood problems for those of us going on a diet or saving for a pension. The problem of personal productivity, however, is far thornier.

On any typical day – indeed, from moment to moment – we have to decide how to spend our time. We have a choice of long-term and short-term projects, big and small tasks/jobs, fixed commitments and free time, all within a daily rhythm of productive moments and postprandial slumps. To add to the challenge, unexpected tasks are always arriving in the inbox.

Armed with traditional tools of to-do list and calendar, this already looks like a tough enough optimisation problem. Add hyperbolic discounting and it looks vicious.

“Managing time is almost inhumane in its requirements,” says Dan Ariely, a behavioural scientist at Duke University. He’s right. While trying to figure out the wisest way to spend our time, we are constantly tempted to surf around on YouTube. Or perhaps we engage in busy-work, reorganising the filing cabinet and kidding ourselves that just because it’s work, it’s worth doing. Tomorrow’s priorities – applying for a promotion, starting the next big project, learning a new language – keep evaporating whenever tomorrow turns into today.

What are the solutions?

One possibility is to schedule tasks ahead of time in the calendar. The big presentation, the Japanese revision, the washing-up, all of it gets a diary slot. There’s promise in this approach. It still requires willpower but putting long-term priorities firmly in the calendar helps deal with the hyperbolic discounting problem. But an overstuffed diary is inflexible and one missed target means an entire calendar must be reworked. The system is unlikely to work for all but the most predictable lists of tasks.

Perhaps technology can save us. Ariely is part of a team producing a new smartphone app, Timeful, which aims to deliver the diary-stuffing approach more intelligently. The idealised form of the software would know everything you wanted to get done – from writing a novel to having a drink with old friends to doing the laundry. It would know how long each task would take, by when it had to be done, how important it was and when might be a productive time to do it. The software would also have access to your calendar, and it would tentatively schedule your tasks wherever it found free space. Over time it would learn about your productivity.

This seems enormously useful, although much depends on how close the algorithm comes to this idealised vision – and how much fuss it is to interact with it. (Users of iPhones can give it a try right now.)

. . .

For those who prefer a pen-and-paper approach to productivity, what to do about the hyperbolic discounting problem? I have two suggestions. The first helps bring a long-term perspective to the daily to-do list. Don’t draw up your list of tasks first thing in the morning – do it the previous evening, when you will have a slightly more distant perspective. When you do so, think about the two or three tasks you would feel most satisfied to have ticked off. Put those at the top of the list and make them your priority.

The second suggestion flips the telescope around and brings today’s perspective to tomorrow’s commitments. When being invited to do things months in advance, the diary usually looks pretty clear and it’s tempting to say “yes”. But whenever a new invitation arrives, ask yourself not, “should I accept the invitation in March?” but, “would I accept the invitation if it was for this week?”

The fundamental insight of hyperbolic discounting is that while tomorrow always looks different, eventually tomorrow will be today. If the flattering invitation would be impossible to accept for this week, what on earth makes you think the first week of March will look any different once it arrives? Tomorrow is always a day away – but your rash commitments are not.

Also published at ft.com.

The challenges from smaller competitors spur the innovations that matter

“It takes a heap of Harberger triangles to fill an Okun gap,” wrote James Tobin in 1977, four years before winning the Nobel Prize in economics. He meant that the big issue in economics was not battling against monopolists but preventing recessions and promoting recovery.

After the misery of recent years, nobody can doubt that preventing recessions and promoting recovery would have been a very good idea. But economists should be able to think about more than one thing at once. What if monopoly matters, too?

The Harberger triangle is the loss to society as monopolists raise their prices, and it is named after Arnold Harberger, who 60 years ago discovered that the costs of monopoly were about 0.1 per cent of US gross domestic product – a few billion dollars these days, much less than expected and much less than a recession.

Professor Harberger’s discovery helped build a consensus that competition authorities could relax about the power of big business. But have we relaxed too much?

Large companies are all around us. We buy our mid-morning coffee from global brands such as Starbucks, use petrol from Exxon or Shell, listen to music purchased from a conglomerate such as Sony (via Apple’s iTunes), boot up a computer that runs Microsoft on an Intel processor. Crucial utilities – water, power, heating, internet and telephone – are supplied by a few dominant groups, with baffling contracts damping any competition.

Of course, not all large businesses have monopoly power. Tesco, the monarch of British food retailing, has found discount competitors chopping up its throne to use as kindling. Apple and Google are supplanting Microsoft. And even where market power is real, Prof Harberger’s point was that it may matter less than we think. But his influential analysis focused on monopoly pricing. We now know there are many other ways in which dominant businesses can harm us.

In 1989 the Beer Orders shook up a British pub industry controlled by six brewers. The hope was that more competition would lead to more and cheaper beer. It did not. The price of beer rose. Yet so did the quality of pubs. Where once every pub had offered rubbery sandwiches and stinking urinals, suddenly there were sports bars, candlelit gastropubs and other options. There is more to competition than lower prices.

Monopolists can sometimes use their scale and cash flow to produce real innovations – the glory years of Bell Labs come to mind. But the ferocious cut and thrust of smaller competitors seems a more reliable way to produce many of the everyday innovations that matter.

That cut and thrust is no longer so cutting or thrusting as once it was. “The business sector of the US economy is ageing,” says a Brookings research paper. It is a trend found across regions and industries, as incumbent players enjoy entrenched advantages. “The rate of business start-ups and the pace of employment dynamism in the US economy has fallen over recent decades . . . This downward trend accelerated after 2000,” adds a survey in the Journal of Economic Perspectives.

That means higher prices and less innovation, but perhaps the game is broader still. The continuing debate in the US over “net neutrality” is really an argument about the least damaging way to regulate the conduct of cable companies that hold local monopolies. If customers had real choice over their internet service provider, net neutrality rules would be needed only as a backstop.

As the debate reminds us, large companies enjoy power as lobbyists. When they are monopolists, the incentive to lobby increases because the gains from convenient new rules and laws accrue solely to them. Monopolies are no friend of a healthy democracy.

They are, alas, often the friend of government bureaucracies. This is not just a case of corruption but also about what is convenient and comprehensible to a politician or civil servant. If they want something done about climate change, they have a chat with the oil companies. Obesity is a problem to be discussed with the likes of McDonald’s. If anything on the internet makes a politician feel sad, from alleged copyright infringement to “the right to be forgotten”, there is now a one-stop shop to sort it all out: Google.

Politicians feel this is a sensible, almost convivial, way to do business – but neither the problems in question nor the goal of vigorous competition are resolved as a result.

One has only to consider the way the financial crisis has played out. The emergency response involved propping up big institutions and ramming through mergers; hardly a long-term solution to the problem of “too big to fail”. Even if smaller banks do not guarantee a more stable financial system, entrepreneurs and consumers would profit from more pluralistic competition for their business.

No policy can guarantee innovation, financial stability, sharper focus on social problems, healthier democracies, higher quality and lower prices. But assertive competition policy would improve our odds, whether through helping consumers to make empowered choices, splitting up large corporations or blocking megamergers. Such structural approaches are more effective than looking over the shoulders of giant corporations and nagging them; they should be a trusted tool of government rather than a last resort.

As human freedoms go, the freedom to take your custom elsewhere is not a grand or noble one – but neither is it one that we should abandon without a fight.

Also published at ft.com.

Gary Jenkins of LNG Capital confesses in a note on Friday that reading Piketty’s Capital in the 21st century was not an easy affair. Here’s the strategy he resorted to in order to get through the 577 pages of the book:

Continue reading: Piketty and the randomness of wealth

It may seem mind-bendingly obvious but we need to test and evaluate ideas

How do we keep young people away from a life of gangs and violent crime? You can see one answer if you fire up YouTube and type “Scared Straight” into it. You’ll have the pleasure of seeing muscular prisoners bully terrified teenagers while police officers stand by and watch. It’s an American reality TV show called Beyond Scared Straight and it’s into its seventh season.

Before Beyond Scared Straight there was Scared Straight. It was a 1978 documentary about a crime prevention programme of the same name, in which teenagers spent a day inside a prison being frightened by the inmates. The film was presented by Peter Falk at the height of his fame as Columbo, and it won an Oscar for best documentary. Its producer-director, Arnold Shapiro, went on to make the US version of Big Brother and Beyond Scared Straight.

The Scared Straight approach is popular as TV, and seems popular as public policy. But while Scared Straight was a success as a documentary, Scared Straight is a failure as a policy. We know this because, on seven occasions, administrators have allowed the programme to be evaluated rigorously using a controlled trial. Some troubled teens experienced the joys of Scared Straight while others did not, allowing a fair test of the programme’s results.

These seven rigorous evaluations form the foundation of a review of Scared Straight (and similar interventions) by the Cochrane Collaboration. The review concludes that “programmes such as Scared Straight increase delinquency relative to doing nothing at all to similar youths. Given these results, we cannot recommend this programme as a crime prevention strategy.”

If there is a question mark over a programme’s effectiveness then we need to make sure we’re not wasting effort, or even causing harm without meaning to. We should routinely test ideas, and adapt them if they’re not working. If that might seem a mind-bendingly obvious idea, let’s compare it with how programmes are evaluated in reality.

Consider Your Life You Choose (YLYC), a programme involving magistrates, police and prison officers which began in Ealing, west London, and which aims to reach 11- to 12-year-olds and steer them away from a life of crime. It hasn’t yet been rigorously evaluated.

Oddly, media reports seem to wish that YLYC was like Scared Straight, even though Scared Straight does not work. A recent headline in the London Evening Standard described YLYC as “Schoolchildren in north London taught lessons on life behind bars: Children put in handcuffs and prison van in anti-gang drive.” The article was accompanied by cheesy photographs of 11-year-olds in … well, handcuffs and a prison van.

Despite the Evening Standard’s enthusiasm for such photos, YLYC bears a blessedly superficial resemblance to Scared Straight – it’s delivered in schools, not prisons. Pam Ullstein, the YLYC project leader, says the handcuffs and van may “provide some entertainment” but are not the point of the programme. Good.

So YLYC might indeed work, and it might not. It would be wonderful to find out. Time for an evaluation?

Alas, the government’s leading authority on the matter, Damian Green – who this week lost his post as the Minister for Police and Criminal Justice – seemed to think no evaluation was needed. “Official figures demonstrate that it really is having an impact,” he said of YLYC in a speech in March.

I asked the Ministry of Justice what Green had in mind when he said this. I was directed to a page on the YLYC website itself, in which a police sergeant observes that in Ealing, youth convictions have fallen sharply in recent years. (Oddly, the web page also features Ealing’s Conservative MP, Angie Bray, praising YLYC with exactly the same words as Green: “Official figures demonstrate that it really is having an impact.”)

. . .

The fall in crime is good news, and perhaps that’s what Green and Bray mean by “official figures”. Yet youth convictions have also been falling sharply in England as a whole, so perhaps it’s a coincidence. If we are to have serious evidence on YLYC – or any other programme – we need rigorous evaluations, not a nod towards “official figures” of passing relevance.

The sociology of this is fascinating: we have an unproven programme that politicians are happy to praise and that a newspaper admires for its faint resemblance to a proven failure.

None of this is a criticism of YLYC, which may indeed be effective. We’re fortunate that people want to set up programmes such as YLYC and volunteer to support them. But we don’t want them to waste their time, so we should provide help in figuring out whether what they do actually works.

The good news is that help is available. There’s Project Oracle, for example, a new London-focused outfit that aims to support programme providers in gathering useful evidence about what’s working, while also educating the people who commission such programmes that it’s important to ask for evidence. Professor Georgie Parry-Crooke, co-director of the project, tells me that an evaluation of the effectiveness of Project Oracle itself is on the cards. That’s all to the good: reality TV is no basis for figuring out what works and what doesn’t. The evidence revolution will not be televised.

Also published at ft.com.

In a recent commencement address at the Maharishi University of Management, actor and comedian Jim Carrey spoke about failure, fear, and why you should pursue something that you love.

Failure is necessary and how you learn to get better, but Carrey reminds you that failure is not exclusive to your dreams:

So many of us chose our path out of fear disguised as practicality. What we really want seems impossibly out of reach and ridiculous to expect so we never dare to ask the universe for it. I'm saying: I'm the proof that you can ask the universe for it.

My father could have been a great comedian but he didn't believe that was possible for him. So he made a conservative choice. Instead, he got a safe job as an accountant and when I was 12 years old, he was let go from that safe job and our family had to do whatever we could to survive.

I learned many great lessons from my father. Not the least of which was that you can fail at what you don't want, so you might as well take a chance on doing what you love.

Failure can be a harsh reality in your life, but it's an important part of finding success in whatever it is you seek. It can be hard to move past it, but isn't it better to fail while pursuing something you actually care about? Of course, along with the great insights, the whole speech is filled to the brim with jokes and worth a watch.

Full Speech: Jim Carrey's Commencement Address at the 2014 MUM Graduation | YouTube via 99U

State education in Britain consists not of families choosing the best schools but of good schools choosing the best families

What is the collective noun for indicators of public service performance? A thicket? A fudge? Whatever it may be, the British government has announced yet another league table, this time packed with indicators of public safety in English National Health Service hospitals.

Logging on to the NHS Choices website, I discover my local hospital is “among the worst” as far as “infection control and cleanliness” are concerned. The website adds that all “Care Quality Commission national standards” have been met. This is baffling. The hospital is filthy yet meets all care quality standards? Maybe the collective noun should be “a contradiction of indicators”.

“I think we’re getting a bit overwhelmed now with these packages of indicators,” says John Appleby, chief economist of the King’s Fund, a healthcare think-tank. “As a patient, I wouldn’t know what to make of these at all.”

If they are merely useless and confusing, that’s one thing. But some indicators in the past have caused serious collateral damage. Consider two examples from either side of the Atlantic.

In the UK in the late 1990s, Tony Blair’s government set a range of targets for how quickly ambulances should respond to emergency calls. In an “immediately life-threatening” case in an urban area, first responders should arrive within eight minutes, three-quarters of the time. The target swiftly backfired. By 2003 the data were showing odd patterns – for one ambulance service, more than 900 calls were recorded as having been met in seven minutes and 59 seconds, with just a handful met in eight minutes. The definition of “immediately life-threatening” mysteriously varied by a factor of five from one ambulance service to the next. Crews were split and given bikes or small cars, allowing a lone paramedic on a bike to hit a target, even if he couldn’t take you to hospital.

In the US, “report cards” provide data on the performance of cardiac surgeons and cardiac wards. David Dranove, Daniel Kessler, Mark McClellan and Mark Satterthwaite, four economists who studied the report cards, found a most unwelcome consequence: doctors resisted operating on the severely ill and favoured surgery for patients who might not even need it. A healthy patient is a strong candidate to thrive after heart surgery, no?

None of this should surprise. There are three ways to improve your score on any performance metric: first, actually improve performance; second, focus on ways to look good on the metric in question; third, cheat.

That said, surely performance metrics can sometimes identify and encourage what’s best in public service. What might help is a sense of who is supposed to use these metrics, and how they might react.

Gwyn Bevan of the London School of Economics suggests four models of public service. In “trust and altruism”, noble doctors and teachers always do their best, and indicators help them do their jobs. In “targets and terror”, public servants are assumed to be selfish, whipped into shape by a central government with a dashboard of performance data. In the “quasi-market” system, the indicators are provided to the public, who act as consumers and choose their preferred school or hospital. Finally, “name and shame” uses league tables to humiliate losers and lionise winners.

None of these four systems is obviously absurd, so what does the evidence suggest? Devolution in the UK provides an interesting natural experiment. The Welsh government abolished school league tables and the Scottish government eschewed targets for hospital waiting times. In both cases, researchers from Bristol University and elsewhere showed that the English system worked better. This supports “name and shame” (for schools) and “targets and terror” (for hospitals). It is bad news for the “trust and altruism” model.

We know that true markets often work well but there are question marks over the effectiveness of “quasi-markets” for education and healthcare. The British state education system consists not of families choosing the best schools but of good schools choosing the best families, while bad schools chug along without going out of business. Americans may be savvy consumers of cars or phones but appear to pay little attention to publicly available evidence on the quality of hospital care.

“Name and shame” is the idea that indicators work not because they inform bureaucratic overseers, nor because they help consumers pick the best services, but simply because nobody wants the embarrassment of propping up the bottom of a league table. It seems a crude approach but an influential research paper by Judith Hibbard, Jean Stockard and Martin Tusler found evidence that “name and shame” might work.

Hibbard and her colleagues studied how Wisconsin hospitals reacted to a report on quality of care. Some of the hospitals were included in a widely disseminated quality evaluation. Others, chosen at random, received a confidential report on their own performance – the ideal approach for a world of “trust and altruism”. A third group of hospitals received no report at all.

Hibbard’s research suggested that Wisconsin healthcare did not function as a regular market. Poorly performing hospitals were not afraid of losing market share, and rightly so. But they did make substantial efforts to improve, nonetheless – citing a concern for their reputation.

Perhaps we have that collective noun after all: it’s an “embarrassment of indicators”.

Also published at ft.com.

Too often the debate over public policy becomes a toy argument, dressed up as the grown-up version

Scottish voters are in the middle of an unseemly bidding war. With the referendum for independence scheduled for September, Scotland’s first minister Alex Salmond is trying to tempt the Scots by promising that they will each be £1,000 a year better off after independence. From London, the UK Treasury has a better offer: it forecasts a dividend of £1,400 per Scot per year if Scotland stays part of the United Kingdom.

As it happens, the big difference between the two forecasts is that the Scottish government forecasts that productivity growth will be 0.3 percentage points higher each year in an independent Scotland. (That is a lot.) A smaller difference is that while both forecasts assign most North Sea oil revenue to Scotland, the UK Treasury is pessimistic about the value of the dwindling resource.

But the weaselly details of all this need not delay us. It’s astonishing that instead of being wooed by romantic ideals expressed with passion, Scots are being promised cash. The debate over the future of the country is being conducted in a style worthy of a clearance sale at a furniture showroom. One can only imagine what politicians are like on a date – presumably they pull out a roll of banknotes and haggle over the hourly rate.

You might ask why an economist, of all people, is shocked by such behaviour. I think the reason is that it’s a superficial impersonation of what economics really is. My two-year-old son happily imitates mum and dad at the stove, but while a knee-high plastic kitchen range may look like the real deal to him, it is not. Too often the debate over public policy becomes a toy argument, dressed up to resemble the grown-up version with financial forecasts serving as the sparkly accessories.

Stated plainly, the Scottish government’s case is that an independent Scotland would enjoy high economic growth thanks to better economic policies. Any costs would be swamped by the benefits of this growth. That is not an absurd claim, although not everyone will find it persuasive. Economic numbers could, in principle, serve as a sanity check – but that is not why the numbers are there. Instead, they’re designed to divert scrutiny away from the plausibility of the underlying argument.

Scottish independence is one of countless examples of toy-oven economic analysis. Consider the old standby that some illnesses – diabetes, dementia, breast cancer – cost “the economy” billions of pounds per year. For example, the Alzheimer’s Society reports that dementia “costs the UK over £23bn a year” – a statement that could mean all sorts of things. Yale’s Rudd Center says that “obesity-related direct and indirect economic costs exceed $100bn annually”, which makes a bit more sense.

In the UK the cliché is that some disease is problematic because it costs the National Health Service money, as if an instant cure for all cancers is desirable largely because it would allow us to stop paying salaries to the radiologists.

There is certainly merit in conducting a cost-benefit analysis of medical treatments. If we understand how well they work and how severe are the symptoms they alleviate, we can set priorities. But something has gone wrong when we say that the problem with a heart attack is that it will be an expensive nuisance for the ambulance service.

Where did we go astray? Three sensible propositions from economics have somehow been crumpled into a mess of public relations and politics.

The first is that opportunity costs matter. Time, money and attention that are poured into something cannot also be lavished on something else. For this reason it’s good to get a sense of how much a proposal is likely to cost and what the benefits might be. But the cost-benefit figures often convey a sense of certitude that is absurd: they are only as solid as the assumptions and forecasts that go into them.

The second proposition is about reducing everything to money. It follows from the first: if you are going to compare the costs and benefits of different things, you need some common unit of measurement. This unit doesn’t have to be money. It is just as true for the UK Treasury to say that independence will cost every Scot the equivalent of one knickerbocker glory a fortnight. But money is a more convenient yardstick than an ice-cream sundae.

The third proposition is that it’s worth paying special attention to spillover costs and benefits. In arguing over HS2, the fantastically controversial proposal to build a faster railway line between London and Manchester, people speculated over the value to passengers of a faster journey. Economics suggests that’s the last thing we should fret about, because passengers can make those benefits known by buying tickets. It’s the costs and benefits for those who don’t buy tickets that need more scrutiny.

Costs and benefits matter, money is a handy measuring rod, and spillovers deserve special attention. These three principles should be respected – but that does not mean the way to make good policy is to stick a price tag on everything.

Also published at ft.com.

Read it later apps like Pocket and Instapaper are great, but in order to use them you're at the whim of those app designers. If you'd prefer to host your own similar service, Wallabag does just that.

Wallabag works almost exactly like a service like Instapaper, except it's hosted on your own server. With it you can read articles in a nice, distraction free view, sort and organize them with tags, create backups of articles, and more. You can also install bookmarklets, extensions, and even smartphone apps to make using it easier. It's pretty easy to install on your own server and once you're set up, you can access it from anywhere.

Wallabag | via One Thing Well

Speaking in front of a crowd, giving an important presentation, going to a job interview—they're all stressful and they can trigger anxiety and fear in even the most stalwart people. So how do you beat it back when you need to? One psychologist suggests the FEAR method, or "Focus, Expose, Approach, Rehearse."

Pamela D. Garcy, Ph.D explains over at Psychology Today that for many people, the best way to tackle their fears and anxiety is to get a system in place mentally that we can immediately turn to when we feel that fear begin to wash over us. With practice, it can reduce the impact of those moments when they come, and help us push through without being stymied by it. She notes:

Mnemonics, or memory aids, often serve as useful tools to help us in moments where memory might fail. In the case of fear, a popular acronym is False Evidence Appearing Real. While this acronym is useful in reminding us that fear is often based upon a misperception, it unfortunately doesn’t teach us how to reduce fear.

What about employing new acronyms which incorporate researched tools for fear reduction? The FEAR System and the LMONP Cycle are two examples that you can put to the test.

The system I use with my clients is my own acronym for F-E-A-R for Focus, Expose, Approach, Rehearse.

F = Focus instead of freaking out

E = Expose instead of escape

A = Approach instead of avoid

R = Rehearse a lot

Dr. Garcy gets into great detail about each of these four steps at the link below, so make sure to read through it if you want to give this a try personally. Still, the general points help you understand what to do. If you're worried, "focus" on the task at hand, or on one present thing that can help you right now. Then instead of ignoring it, face it ("expose") and break it down into smaller bite-sized chunks. Then "approach" those bite size chunks. Finally, "rehearse" how you plan to handle the issue. The more you do so, the more ready, and you'll boost your confidence at the same time. When you're in the moment, you can repeat the acronym back to yourself and know in your head that you've done what it takes to be where you are and ready for what you have to do.

We're summarizing obviously, so hit the link below for a much broader approach to the topic, complete with specific examples, and another alternative method that may help you.

A Fear Busting Formula You Can Remember | Psychology Today

Thanks to reader AJ for sending in the tip!

Photo by brx0.

Sorry, we have to. It's not the most exciting topic, but you can't call yourself fully protected if you don't have your critical paperwork done. Below are the six things you need to have under control.

This post originally appeared on LearnVest. Reprinted from the book "Financially Fearless: The LearnVest Program for Taking Control of Your Money," by Alexa von Tobel.

Beneficiary Forms

A beneficiary form lets you indicate whom you would like money to be transferred to upon your death—even if you don't have a will. If you have any of the following account types, you've likely filled this out already: a 401(k) or retirement accounts through work, life insurance policies, IRAs, annuity accounts, and 529 college savings accounts. If you're married, it's common to list your spouse as your beneficiary (and if you want to do otherwise, you may be required to have your spouse sign off on that). This saves you money because it keeps your assets out of probate court.

What to do: Ask for a copy of your beneficiary form for each account and make sure it's properly filled out. Save your own copy.

TOD/POD Instruction

TOD (transfer on death) and POD (payable on death) are other ways you can transfer assets to a beneficiary without a will. TODs are typically used for any brokerage accounts that do not have a beneficiary form in place, and PODs are for bank accounts (like your checking and savings). Having these forms allows you to avoid probate even if your financial situation does not yet require a full-blown will or trust.

What to do: Make sure all accounts that do not have a beneficiary form have a TOD or POD instruction in place.

Living Will

A living will lets you communicate your medical preferences to your loved ones. This is awful to think about, but it helps simplify any tough decisions your family and friends may have to make if something happens to you. A living will includes naming your health-care proxy—the person responsible for carrying out your living will. We recommend choosing a loved one or even an unbiased adviser who can remain neutral.

What to do: Staying in control of your health-care decisions is a powerful tool, so make sure you have an up-to-date living will.

Power of Attorney

This document gives someone else the right to make decisions for you (if you're no longer able to). It can cover both legal affairs and health-care decisions.

What to do: A power of attorney is recommended once you're married, but even if you're single, it's something to consider if you may be in a situation where someone will have to act on your behalf.

Last Will and Testament

A will guides the court in making decisions for you after your death and helps ensure that your wishes come to fruition. It's a critical tool for parents, as it assigns legal guardianship of your minor children.

What to do: If you own a home or have children, you will need a proper will. If you're not yet in that position, your beneficiary forms will work for now!

Trust Documents

A trust is like a will, in that it outlines what you want to happen to your assets upon your death. Unlike a will, assets in a trust do not go through probate (which means the court cannot interfere with your decisions). It allows you total control over the passing of your assets to heirs.

What to do: Trusts are recommended when you have children and/or a complex financial situation (e.g., children from multiple marriages).

Now you know what docs you need securely stored in your safe-deposit box. Nothing feels as good as knowing you and your family are protected from life in all its chaos.

6 Documents Everyone Should Have to Protect Their Finances | LearnVest

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Reprinted from the book "Financially Fearless: The LearnVest Program for Taking Control of Your Money," by Alexa von Tobel, CFP. Copyright 2013 by Alexa von Tobel. Published by Crown Business, an imprint of the Crown Publishing Group, a division of Random House LLC, a Penguin Random House Company.

Image via Zadorozhnyi Viktor (Shutterstock).

Want to see your work on Lifehacker? Email Tessa.

Cancer sucks. We still don't know exactly what causes it or how to reliably cure it. Our best chance is catching it early enough for treatment to have a fighting chance. And the best way to catch it early is to know what to look for and examine yourself regularly.

While there are lots of different types of cancer, we're focusing on three that have well-established self-check exams you should be performing on yourself routinely: breast, testicular, and skin cancer. Note that due to the nature of the information in this post, a couple of the videos below are NSFW.

Examine Your Breasts Once Per Month

Breast cancer can occur at any age, though it is more common in people over 50. Breast cancer mostly occurs in women, but it can also occur very rarely in men. Some studies suggest that one man is diagnosed for every 130 women. Still, it's something both genders should pay attention to.

Check out the video above (NSFW for actual breasts being checked) from MedStar Georgetown University Hospital for a demonstration. If you can't watch the video, here's the rundown.

The best time to perform a self-exam is about one week after menstruation begins. If you no longer menstruate, just pick a day of the month that's easy to remember. Remove your clothes from the waist up and lie down, which causes the breast tissue to expand over your chest. This makes the tissue as thin as possible, which in turn makes it easier to feel what you're looking for.

Use the pads of your three middle fingers to apply pressure to your breast. You'll want to feel at three different levels, using a light, medium, and firm pressure. You can examine your breasts using a spiral pattern or grid pattern, which ever you prefer. The idea is to methodically examine every part of your breast.

When performing the self exam, you're not just looking for lumps in the breast. According to the National Breast Cancer Foundation, you're looking for any of the following:

• Changes in how the breast or nipple feels. This includes nipple tenderness or thickening in or near the breast, a change in skin texture or enlargement of the pores, or a lump in the breast.
• Changes in how the breast or nipple appears. This incudes unexplained changes in shape or size, dimpling, swelling or shrinkage (especially one-sided), an inverted nipple, or skin that becomes scaly, red, or swollen.
• Discharge from the nipple. This especially includes clear or bloody discharge.

If you notice any of these symptoms, make an appointment with your doctor. If you'd like to learn more about breast cancer, here are a couple of excellent resources:

• Susan G. Komen Foundation. Since 1982, Komen has fought against breast cancer on all fronts. You may be most familiar with them through the pink ribbon.
• National Breast Cancer Foundation, Inc. Founded in 1991, the NBCF is dedicated to helping women around the world by educating them about breast cancer and providing free mammograms to women in need.

Examine Your Testicles Once Per Month

Testicular cancer is most common in men ages 15 to 35, but can occur in men of any age. Testicular cancer is very treatable and can be caught early by regular self-exams.

Check out the video above (NSFW for actual testicles being examined). If you can't watch the video, here's the process.

According to the Cleveland Clinic, it's best to do the exam during or after a warm shower, since the scrotum will be relaxed. Hold your penis out of the way with your off hand. With your other hand, check one testicle at a time. Roll the testicle gently between your thumb and fingers.

Here's what you're looking for:

• Hard lumps or smooth rounded bumps
• An enlarged or heavier-than-usual testicle
• A shrinking testicle
• Pain in the testicle or a dull ache in the lower abdomen or groin

Note that you will feel some other things in there, like blood vessels, tubes that carry sperm, and so on. So getting to know how your testicles feel is important. If you have any questions, or if you spot something that worries you, talk to your doctor.

If you'd like to learn more about testicular cancer, here are a couple of excellent resources:

• American Cancer Society
• WebMB

Examine Your Skin At Least Once Per Month

Skin cancer can affect any person of any age. It's the most common type of cancer and it's one of the easiest to cure, if it's detected and diagnosed early. Before you get started with monthly self-exams, you may want to have a full body exam by your dermatologist first. That baseline of information will help your doctor determine changes to your skin over time.

Check out the video above to see how to check your skin. Basically, you need to remove all of your clothing and stand in front of a full-length mirror in a well-lit room. Start at the top by examining your face and scalp (you'll need a comb and maybe a blow-dryer for that part). Work your way down your body, checking hands, arms, torso, groin, buttocks, legs, and feet. Don't forget to check under your arms, between your fingers and toes, and under your breasts. To examine your back, you'll need a hand mirror in addition to the full length mirror.

On your first exam, note all your moles, freckles, birthmarks, and so on. To do this, it's easiest to use a body map. You can download a body map in PDF format from the Skin Cancer Foundation that provides you with a nice outline of a body for marking up as well as an examination schedule for tracking your exams.

It may go without saying, but if you have a partner to help you out, things will go much easier.

As you perform your exam, here's what the Skin Cancer Foundation recommends you look for:

• Any skin growth that increases in size and appears pearly, translucent, tan, brown, black, or multicolored.
• A mole or birthmark that changes color, size, or texture.
• A mole or birthmark that has an irregular outline or is bigger than 6mm (about the width of a pencil eraser).
• Any new more or birthmark that appears after age 21.
• A spot or sore that continues to itch, hurt, crust, scab, erode, or bleed and does not heal within three weeks.

If you'd like to learn more about skin cancer, here are a couple of excellent resources:

• Skin Cancer Foundation
• American Academy of Dermatology

Photo by Nemo (Pixabay) and Openclips (Pixabay).

Cars need a ton of maintenance to keep running smoothly. The easiest thing anyone can do is check the fluids to ensure your car stays healthy. With that in mind, here are the five fluids you should check on a regular basis.

A large chunk of your car's maintenance is preventative and regardless of your skill level pretty much anyone who can lift a hood can check the fluids. Doing so on a regular basis keeps your car running well and your repair costs down. Knowing the basics also empowers you so that when you're getting any maintenance on your car you're not swindled into flushing and replacing a bunch of fluids that don't need it.

All you need to know is where to look and what to look for. We're often told to "check your fluids often," but let's take a look at what "often" actually means. Keep in mind that every car's a little different, but the below dates should apply pretty universally.

Engine Oil

Chances are, the first thing you ever learned about on your first car was how to check your oil. You have to do this in every car and pretty much every car has the same basic process to check it.

In most cars, you just need to pop up your hood, find the oil dipstick, pull it out, and wipe it down. Repeat that again and you'll have your oil level. If it's in the safe level, continue on your merry way. If it's not, you need to add more. Depending on the age of the car, you may or may not need to add oil pretty often. If your car burns through a lot of oil, it's worth going to a mechanic.

How often to check it: It was once recommended that you check your oil every time you fill up with gas, but with most modern cars you're safe checking it once a month.
How often to replace it: This depends on the car, manufacturer, and year. The "3,000 miles or every six months" saying doesn't really apply any more. Instead, check your owner's manual for the manufacturer's recommendations for changing your engine oil.

Transmission Fluid

Your transmission fluid is what keeps the gears on your car moving smoothly. You can check your transmission fluid the same way as your engine oil, except the car should be running when you do it. Unlike your engine oil, transmission fluid is part of a closed system, so it should never be low. If it is, take it into a mechanic. Instead of volume, you're looking at the quality of the fluid. The fluid should be red and not smell burned. If the fluid is brown or smells burnt, it's time to replace it.

How often to check it: Monthly.
How often to replace it: This varies from car to car and depends on transmission type, but it's typically between every 50,000-100,000 miles.

Coolant

As the name implies, coolant, aka antifreeze, keeps your car running cool. If you ever run low on coolant, your car's probably going to overheat. The coolant is inside you radiator and you can typically check it by simply removing the radiator cap when the car is cool (never check it when it's hot or your car is running) and looking inside. Once you remove the cap you should see a line the coolant should come up to. If it's low, you can add more, but make sure you add the same type of coolant currently in the car.

How often to check it: Twice yearly: once before summer and again before winter.
How often to replace it: Every 2-3 years.

Brake Fluid

Just like your transmission, your brake fluid is part of a closed system so you shouldn't ever be low on it. That said, it's still worth checking to make sure it's clean. Brake fluid keeps your brakes working properly, so if they ever feel a little off, checking your brake fluid is usually the first step. You can do this by checking the brake fluid reservoir on the driver side of your car. You can usually check the level just by looking at the outside of the container. The fluid should be a golden color. If it's brown, it's time to replace it.

How often to check it: When you change your oil.
How often to replace it: Every 2 years.

Power Steering Fluid

Your power steering fluid helps keeps your steering smooth and easy. When the power steering fluid starts to get low, you might feel a "creaking" in the steering wheel or hear some weird sounds. To check it, all you need to do is pop the hood and find the reservoir. Usually you can check it visually by looking at the reservoir. Power steering fluid doesn't usually drop too much, so if it's low, it's worth taking your car into a mechanic or looking for a leak.

How often to check it: Once a month.
How often to replace it: Between 50,000 miles and never. Typically speaking, most car manuals recommend keeping the power steering fluid levels topped off, but you'll rarely need to flush and replace it. Double check your owner's manual to make sure you can ignore yours.

So, set up those calendar reminders and make those notes. If you're checking your car's fluids regularly it'll last a heck of a lot longer.

You've just gotten a new computer. Nice! You're probably excited to tear open the box and set it up, but there are a few boring-but-important tasks that will save you disappointment and even heartbreak (not to mention money) later. Here are a few things you should do whenever you buy a new PC.

Save Your Serial Number

Your computer probably has a serial number on the bottom or the back, and you'll probably need this one day. They can often wear off over time, especially on a laptop—plus sometimes they're just not easy to access when you're using the PC. While you're unboxing, take a picture of that serial number and toss it into Evernote or your favorite cloud storage service. This number is probably on the box and much easier to read than the number of the device. If it's a Windows PC, you may also want to grab a snapshot of your Windows license key, too, in case you ever need to reinstall.

Create a Recovery Disc or Drive

Speaking of reinstalling, there may come a time where something goes wrong and you need to start from scratch. Some computers may come with recovery CDs or drives, but many these days don't. Ordering CDs from places like Dell, HP and Lenovo takes both time and money, so if your computer didn't come with recovery media, make your own now. Mac users can create a USB stick of your operating system following these instructions, and Windows users can follow this guide.

Check Your Surge Protector

Depending on how often you have power surges, your surge protector can actually lose effectiveness over time. That flashing amber light on there isn't there for special effects and probably shouldn't be flashing. If it's flashing, now's a good time to get a new one. Heck, if you don't know when you bought it and how much surge you are protected against, now could be a good time to get a better one. One of these would be a good start.

Add It to Your Homeowner's or Renter's Insurance

Speaking of protection, you may want some insurance for your new device, especially if it's more valuable than the average PC. If you already have homeowner's or renter's insurance, most insurance companies will allow you to schedule a computer so you've got additional protection independent of your main policy. Scheduling an item will often cover mishaps not covered under the main policy and often has an independent cheaper deductible.

Set a Reminder for Your Warranty Expiration

Don't you just hate it when your computer has a problem and you find out it's just barely out of warranty? Put a reminder in your calendar now for a few days before your warranty expires. That way, you won't get caught in the "I'm too busy and now it's too late" trap. I put it as a birthday for my computer in my contacts along with its serial number for quick access.

Of course, these are just some of the more hardware-oriented things you should be doing. You should also make sure you've audited all your passwords, set up some good antivirus, and prepared your computer for heavy use—but hopefully you'll remember these boring-but-important things as well. Good luck!

For many of us, cars are imperative to the functioning of our daily lives, and when they breakdown, our normal routines can be completely derailed. The stress of repairing your car only makes it worse. Here's how to prepare for unexpected car trouble so you can more easily rebound when life throws you a wrench.

This post originally appeared on ReadyForZero.

A few weeks ago, my parents' car wouldn't start—in the middle of an ice storm. They got it towed and my dad took a few days off of work to deal with mechanics, insurance companies, and car dealerships. Cut to three weeks later and they have their car back but they're out a few hundred dollars and a few weeks of their lives.

Hearing my parents talk about this issue for weeks from my home in sunny (well, foggy) California, I could relate neither to the ice storms nor the car issues. Ever since I moved to New York and then San Francisco, I shed the worries of car ownership. I'd forgotten how stressful it could be. But it only took a few phone calls with my parents for the memories to come crashing back to me.

Now that everything is back to normal for my parents, it got me thinking about what I would do after this situation if I were still a car owner. Here are a few tips that I would've given my past self—and which helped my parents tremendously.

Find a Mechanic You Trust—Before You Need One

Mechanics are like doctors: we tend not to think about them until we really need one, at which point we're already desperate. This is no way to go about handling an emergency. In the situation with my parents, they were lucky that they already had a mechanic they trusted. He was able to quickly discover the issue, understand their warranty, and send them specifically to a dealership that he knew had dealt with this particular issue before.

This saved my parents hours of searching for help and potentially thousands of dollars. Take a lesson from the page in their book: find a mechanic you trust now, before you need one. It's more than worth the time and energy you'll save in the future. Remember, all cars experience a problem at some point.

Organize Your Paperwork and Know the Terms

Another thing that helped my parents was keeping their insurance and warranty paperwork handy. This saved countless would-be phone calls with the insurance company. Plus, since my parents brought their paperwork to the mechanic, he knew right away what the problem was (a recall on their car) and where they could go to be covered.

Being able to grab all the paperwork you need in an emergency will work wonders for your stress level and bank account. So even though it might feel unnecessary right now, look for your insurance and warranty paperwork as well as anything else associated with your car and put it in an easily accessible folder. That way you can reach it at a moment's notice.

While you're at it, familiarize yourself with your eligibility for monetary relief in the event of car troubles. Do you have a warranty? Learn how much or what it covers and when it expires. What about your car insurance terms? What's your deductible? Is towing included? Have you signed up for AAA? Finally, keep an eye out for recalls on your car – that way you can spot a problem before you're stuck in an ice storm. Go to Recalls.gov to check for recalls every few months.

Build an Auto Emergency Fund

We talk a lot about emergency funds, but what about opening one specifically for your car? If you can save a few hundred dollars or more, you'll have something to turn to besides a credit card for unexpected car expenses. You could also use this emergency fund to give yourself a cushion so you never skip those regular tune-ups and oil changes – things that will keep your car running smoother, longer.

If you have a long commute, live in a rural area, or live in a city that doesn't have reliable public transportation, then you probably have to own a car. It's a key to your livelihood but also a drain on your bank account (Is there anything about cars that isn't expensive?). However, preparation will greatly reduce the stress you'd feel when emergency situations arise. And in those moments, the quicker you can get back to normal, the better.

How to Reduce the Compounding Stress of Car Ownership | ReadyForZero

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Shannon McNay is a Community and Customer Support Manager for ReadyForZero. ReadyForZero is a company that helps people get out of debt on their own with a simple and free online tool that can automate and track your debt paydown.

Images by Jenn Durfey (Flickr), RLHyde (Flickr), and Images_of_Money (Flickr), and Strels (Shutterstock).

Want to see your work on Lifehacker? Email Andy.

‘As the example of Finland makes clear, it is possible to change income distribution dramatically’

By most measures, and in many countries, income inequality has been increasing for a generation. Some people don’t care, so here’s another way to look at the problem: over the past 20 years, the pre-tax incomes of the poorest 99 per cent in the US grew by just 6.6 per cent after adjusting for inflation. That is a pathetic one-third of 1 per cent per year. Those who aren’t worried about increasing inequality should still be concerned at such widespread stagnation of living standards.

So what is the solution? Here is a modest proposal to fix inequality in four easy steps.

The first step is to be precise. Are we using the Gini coefficient or the share of the top 1 per cent to measure inequality? Wealth, consumption or income? Before taxes and benefits or after?

This last question is often ignored but it makes a big difference. Consider Finland, France and Japan. Looking at pre-tax household incomes, Finland is the most unequal of the lot. But after the tax system has done its work, Finland is the least unequal. (My source here is a database compiled by the political scientist Frederick Solt.)

Finland’s market economy delivers outcomes roughly as unequal as those of the UK and the US but the tax system is far more redistributive. In contrast, Japan is more equal than the UK and US despite a tax system that redistributes less than theirs, because the country’s economy delivers more egalitarian outcomes.

The second step is to look at underlying causes rather than symptoms. As the philosopher Robert Nozick forcefully observed, there is something strange in worrying about income distribution without considering what processes, just or unjust, produced that distribution.

This isn’t just a philosophical argument – there are practical implications. Consider JK Rowling who is extremely rich because every time someone buys a Harry Potter book, she gets a cut – and a very large number of people have bought Harry Potter books. Unless Bill Gates is out shopping, every time a Potter book is purchased income inequality increases.

Rowling’s wealth is underpinned not only by Harry Potter’s commercial success but by copyright laws which ensure she reaps the benefits of that success. Rowling is not yet 50, so with luck she will still be with us in 2050, and her books will continue to generate inequality-increasing copyright revenue for the rights holders until 2120. A different set of rules might have produced a result that was more equitable yet perfectly efficient. Rowling did not need several hundred million pounds to persuade her to tell us what happens to Hermione in the end.

My point is not to single out Rowling for any criticism but to point out that fortunes do not accumulate through skill and luck alone – there is always a particular underpinning of laws and regulations that could, if we wish, be changed. Carlos Slim’s América Móvil and Gates’s Microsoft could have been broken up by antitrust authorities.

Chief executives enjoy inexplicably large – and often opaque – remuneration packages. Oversight could be tightened, shareholders given teeth.

When we look directly at the sources of high incomes we will sometimes discover policies that would be a good idea in their own right and might reduce inequality only as a side effect.

The third step is to reform redistribution. As the example of Finland makes clear, it is possible for a rich and successful nation to change its income distribution dramatically through the tax system. (A recent and celebrated research paper from the International Monetary Fund adds some more careful empirical backing to this intuitive idea – although there are too many imponderables in such an analysis for it to clinch any argument.)

. . .

Not only must we ask how much to redistribute – largely a political question – we must also ask how to do it. Tax codes are riddled with loopholes and special cases, and under the pressure of the deep recession, such tangles appear to be proliferating. The British system has two nationally levied income taxes and in recent years has introduced a new (and gyrating) tax band for high earners; a separate band over which allowances are withdrawn arbitrarily; and a third band over which child benefit payments are withdrawn. Further crenellations are promised if the Labour party is elected.

However much redistribution we might feel is just, it’s certainly clear that we could redistribute for less trouble if our politicians paid more attention to sensible tax design and less attention to crowd-pleasers.

Step four is to remember the small stuff. Inequality is a consequence of countless policy choices too trivial to trouble finance ministers: whether there are good teachers in most classrooms; whether poorer areas of town are safe at night and have access to affordable public transport; whether toddlers are receiving stimulating childcare; whether the pension system encourages savers without making millionaires out of slick middlemen. We should gather better evidence on such questions and act on that evidence.

A final, fifth piece of counsel: don’t for a moment think this is a problem that can be solved in four easy steps.

Also published at ft.com.

Whatever your chosen profession, we all have something in common: We're trying to do the best we can in our careers. Of course we aren't going to gossip about our boss, fail to meet our deadlines, or do anything else to jeopardize our jobs or careers… knowingly.

This post originally appeared on LearnVest.

It's that "knowingly" that's the problem. We can easily avoid the professional pitfalls we know, but what about the ones we don't? And even more important, could we be making major mistakes when we think we're making the right move? To keep from falling into that trap, we asked career experts to shed light on the missteps we make without even realizing, whether at the office or in the trenches of a job hunt. Are you making these mistakes?

Keeping Yourself Offline

Knowing that social media channels such as Twitter, Facebook and even LinkedIn are rife with opportunity for career-damaging blunders, it's understandable that you might want to lay low, leave your profiles dormant or even take yourself offline entirely.

But that's the wrong move, according to Cheryl Palmer, certified career coach and owner of Call to Career. "According to recent data, the majority of recruiters now scour online sources for additional information on candidates," says Palmer. "Positive online information about you will improve your job prospects, since that is what recruiters will be looking for to determine who they call for an interview." She points out that since social media sites such as LinkedIn, Twitter and Facebook are some of the first results that show up on search engines, you'll want to be represented—and represented well.

Palmer says that just having the profiles isn't enough—you must have a dynamic presence. That means using these channels to promote yourself in a positive, professional way. Worked on a new ad campaign? Tweet it. Added to your photography portfolio? Facebook it. Come across a fascinating industry article? Share it on LinkedIn. When recruiters or interviewers look you up, they'll find an engaging, productive individual.

(And if managing multiple networks seems like too much, you can always automatically link your Twitter, Facebook, and LinkedIn, so every post broadcasts to all three networks. Don't worry, we won't tell the recruiters.)

Bonding With Co-Workers

You're right: It's always a good idea to attend work happy hours, volunteer days, and other forms of group bonding, because while these people are your colleagues, they're also the people with whom you spend 40-plus hours a week.

But bonding becomes problematic when you become very close to some co-workers … and not others. "It's a mistake to align yourself with one person or one camp," cautions Marian Their, founder and C.E.O. of coaching, training and consulting firm Expanding Thought. "While it's tempting to align yourself with a strong person or group, in doing so, you separate yourself from everyone else. Then what happens when personnel changes occur, someone falls out of favor, or you need support from someone not in the chosen group?"

To keep from getting in too deep with some colleaguesover others, Their advises people to take some simple steps to keep things friendly across the board: Go to lunch with a group of people, or different people each day; sit next to people who aren't your deskmates already at meetings; mix up your routine a bit—stop by the kitchen or watercooler for a brief chat at different times of day, to run into different people.

"The higher up in the organization you go," reminds Their, "the more important it is to be observant and prudent. Remember that while having allies is extremely important, so is having people who will challenge you."

Championing Make-Ends-Meet Jobs

We don't need to tell you that there's no shame in taking a gig unrelated to your ultimate career path (think: waiting tables) to make ends meet while hunting for other opportunities, or to make a little extra money on the side. Plus, your scrappiness will show future employers that you're hardworking and ready to hustle, right? Not exactly.

"As a job hunter, you should be looking at yourself as a candidate through your potential employer's eyes," advises Robert Meier, president of Job Market Experts. "And to an employer, a side job is a distraction from your primary position. A Fortune 500 company simply isn't going to appreciate your time as a night manager at 7-11."

Instead of trying to bulk up temporary jobs by explaining how they taught you "tenacity" and "reliability," Meier recommends minimizing such positions down to only a line on your résumé—or eliminating them altogether while bulking up your more relevant past positions. "The only time you should include a job like this on your résumé is if it furthers your career objective," he says. For instance, a job on the sales floor in a clothing chain may be valuable if you're applying to be a buyer for J.Crew; your time as a fitness instructor may be relevant if you're applying for an operations position at Under Armour.

If you spent six months scooping ice cream and are now applying for a completely unrelated corporate job in ad sales, Meier recommends eliminating your make-ends-meet job from your résumé altogether. If your employment gap should come up in an interview, he says, explain that you were devoting your full attention to finding the right job in a difficult economy—an understandable excuse if it's been 12 months or less.

Relying on a Pros and Cons List

Raise your hand if you've ever made a pros and cons list about a potential job or project. It's the sensible move—you're laying out all the reasons you should and shouldn't take on a new venture in order to make an informed, rational decision.

But informed and rational isn't all it's cracked up to be. "If you are getting a bad gut feeling about working for a certain boss, a 'pit in the stomach' sensation about a dicey work environment, or are self-rationalizing over taking a major pay cut, you should never ignore the little voice in your ear warning you that something is wrong," explains Cheryl Rich Heisler, founder and president of career-consulting site Lawternatives.

If you're getting a bad feeling about an opportunity that seems promising on the surface, says Heisler, it's time to get more information. "Dig deeper, and either reassure yourself that your impressions are wrong, or back away from the offer. 

This is true even for choosing your first career track—trust yourself." That's not to say that a few nerves means you should bail on a second-round interview, but if you can't shake your anxiety and can't alleviate it with more information, it might be time to take a step back.

"If," says Heisler, "after doing your research and networking, the career, industry or job you're exploring doesn't feel right to you, reconsider. The happiest employees are working in areas they enjoy within industries they love."

Being Perpetually Available

Chances are, your current employer values face time—that is, how much time you're in the office, working away at your desk. And when you aren't face-to-face, you're accessible by phone, email, text, or carrier pigeon, whether it's midnight, midnight on Saturday, or midnight on Saturday during your vacation.

"When you're refusing to delegate responsibilities it shows that you aren't a teacher or mentor, and certainly not a supervisor, which is criteria for promotion," says Bruce Hurwitz, executive recruiter and author of "Success! As Employee or Entrepreneur." And when you don't take vacation, he says, it can create an air of superiority—like you feel nothing can get done without you.

"People make the mistake of being too available because they don't know how to say no,'" says Hurwitz. "They think the person they are rejecting will be mad at them, and it will affect their relationship." But, he adds, this isn't necessarily the case. If you're perpetually available and looking to break the cycle, Hurwitz recommends starting with a "conditional yes," where, upon hearing about a new assignment, you reply, "I'd be happy to. Just let me get this job done, and if you still need my help, I'm there for you."

Of course, no one is recommending you skip out on your work, and it's likely that there will be occasions you'll have to be available outside the office. But delegating tasks to be completed without your direct oversight, or even in your absence, is a skill every manager—or would-be manager—should have.

5 Career Mistakes You Didn't Know You Were Making | LearnVest

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Libby Kane is the associate editor at LearnVest. After graduating from Wellesley College, where she was an editor at the Wellesley News, she joined the LearnVest team. Her work has appeared on the Huffington Post, Forbes, the Fiscal Times and more. Libby spends her time visiting the best museums she can find—the mustier, the better. Follow Libby Kane on Twitter and Google+

LearnVest empowers everyone to take control of their personal finances. They provide expert advice and resources, and financial plans that fit your budget.

Want to see your work on Lifehacker? Email Tessa.

As you gear up for an interview, you're likely agonizing over the questions you'll be asked, the answers you'll give, and how to make the best possible first impression. Most of your preparation will probably focus on the time you spend face-to-face with your interviewer.

This post originally appeared on The Daily Muse.

But to be 100% prepared, there are a few things you'll want to clarify before you show up in your best suit. Because trust me: Knowing all the small details—like who you're meeting with, where to park, or what to bring—can make a big difference in your confidence on interview day. So before you head off to your next interview, make sure you have the answers to these six key questions. (And if you don't? It's totally okay to ask.)

1. Who Will I Be Meeting With?

Since you could be interviewing with a recruiter, your potential future boss, a handful of your could-be teammates, or all of the above, you'll want to know all of your interviewers' names and titles (so you can properly LinkedIn-stalk beforehand).

2. Is There Anything I Should Know About the Format of the Interview?

Will you face a firing squad—er, panel of interviewers? Maybe you'll be grouped together with other applicants and tasked with creating a presentation. Or maybe, it'll just be a standard one-on-one, 30-minute interview. Either way, knowing ahead of time will help you fend off any not-so-pleasant surprises.

3. About How Long Can I Expect it to Last?

I once showed up for an interview that I thought would last about an hour, tops. Turned out that it was scheduled from 8 AM until 12 PM, so I could meet with five different representatives from across the organization. Wish I'd packed a snack!

4. Is There Anything I Should Bring?

(Besides a few copies of your resume, of course—but you already knew that.) Depending on the position you're going for, the company may request work samples or a portfolio—and showing up empty-handed could kill your changes of snagging the role.

5. Is There Anything I Should Know About Getting There or Parking?

Nothing will throw off your game more than finding out that the off-ramp your GPS suggested is closed because of construction, so you'll have to get off at another exit and find a back route (and probably show up late, to boot). Or discover that the parking garage only takes cash—and you have none.

6. What's the Office Dress Code?

Whether you glean this from calling the front desk receptionist or stealthily watching the people going in and out of the building, you'll want to know whether to pull out your nicest jeans or your most professional suit.

Knowing these details (combined with your thorough interview preparation, of course), will set you up for success in any interview. Now, go knock 'em out—and snag that new role!

6 Questions That Will Ease Your Mind Before the Interview| The Daily Muse

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Katie comes to The Daily Muse from a variety of management gigs, from small town music venue to big city cupcake bakery. Most recently, she's leapt into the corporate world in sunny Florida, where she constantly challenges her team of support techs to provide over-the-top customer service. Outside her cubicle, you can find her perfecting her homemade bagel recipe, writing silly poems, and dressing in scarves and boots despite the lack of fall weather. Say hi to Katie on Twitter @kdouth.

Want to see your work on Lifehacker? Email Tessa.

Unless you are staggeringly lucky, your first job is probably not going to be your dream job. Just because you don't make six figures flipping burgers doesn't mean that job isn't important, though. No matter how crappy your first job is, it can teach you plenty of lessons that will help you build a career worth having.

You Are Expendable

Getting a degree, working your way up in a company, and getting a nice position that's difficult to attain can make you forget one very important lesson: you can be replaced. In fact, nearly every skill you'll ever learn for your job is part of a continuing effort to make it more difficult to be replaced. With very few exceptions (and in all likelihood, you are not one of them), if you lose your job, someone will come along to do the work you left. They may even do it better than you. As reader Chris Murray explains, you don't just need to be a good worker. You need to strive to be the most valuable:

Do whatever it takes to be the most valuable employee, even if that means working the occasional double or cleaning the toilets, etc. (But also, realize what your time, physical and mental health are worth to you.)

I like my coworkers, but not enough to yield my hours to them, so I need to be more valuable than they are. On a good week, I'll get 40+ hours, but when we are slow, I'm not the first person they send home.

Reader Black Attack further explains the sink-or-swim mentality. In short, your company isn't there to keep you entertained. It's there to do business:

Coming into work prepared to be busy from the second you hit the time clock. Companies are always in motion, with or without you so you have to be ready to grind from the time your foot hits the door.

Your first job makes it very easy to learn this lesson. Retail, food service, and many entry level jobs tend to have a higher turnover rate than most. Most of us will have seen a coworker leave in the first year or two of our first job. However, it's much more rare for any of us to see a single employee leave only to watch the company collapse.

People Skills Are Just As Important as Hard Work

There was a period in my life where I genuinely believed that hard work was all that mattered in a job. To a certain extent, that was true. Many bosses will stay happy so long as you can get work done and do it well. However, that only really sustains your current job. If you want to move forward, make connections, or get a better position, people are the way to get there. As reader palehorsevictoria explains, this doesn't just get you in good with your boss, it helps work get done more effectively:

Good customer service and good manners go a really long way. I can tell someone that their account is incredibly past due and try to get some amount of payment, but whether I get yelled at and hung up on or actually get some money depends on whether I continue to treat them like a human being.

Since then I have always tried to mind my manners. I ask people how they're doing, request information nicely and thank them for everything, and my team usually reports delivers status and meets deadlines on time.

The benefits don't end there. Our own Andy Orin shares how being put in an inherently social situation opened him up to building social skills in both his personal and aquatic life:

I worked at a college bookstore, primarily helping people find their books (they'd give me their class schedule, clueless as to what they need, and I'd figure it out). It was fine. I also hated it. But as a pretty shy teenager it was very good to throw myself into the fire and be forced to talk with a bunch of humans. It wasn't a profound lesson, but I'm sure it refined my ability to have casual, friendly conversations with strangers outside of an IRC chatroom. Before that I also did volunteer work at an aquarium, which taught me to have a good rapport with fish.

No matter what job you have, the people are going to be what matters. They'll give you recommendations, they'll decide who gets a promotion, and they have the ability to make your experience as great or as awful as possible. As AudibleNod says, they're not just coworkers, they're humans:

Unless you literally work by yourself and for yourself, you're part of a team. Each team member is a person, just like you. You don't have to be friends, chums, buds or pals with these people. But, you do have to work with them. Treat them as professionals (even if they aren't) and give them the dignity and respect you yourself demand.

Company Culture is a Huge Factor in Determining Your Happiness

"Nobody likes their boss." At some point or another, you're probably going to hear this and, to a certain extent, it's good advice. You may get lucky enough to like your boss, but you probably won't. That's okay, though! You don't have to like your boss. You should, however, try to find a company culture you mesh well with. This is a difficult yet doable process. As reader jomarch says, finding an environment you can get along in is sometimes more important than the work you do:

Workplace atmosphere and management make all the difference in the world.

I worked a tough on the body, on your feet all day, sweaty, lots of dirty cleanup job at a casual sandwich chain and I worked a quiet, pleasant smelling job at a lotion chain where we wore niceish professional clothes.

The former job was significantly more pleasant and fun than the other because we were a cohesive supportive team and the way managers handled scheduling and encouragement/critique was so much better.

So I guess what I learned was that who you work with and how things are run is probably at least or almost as important as what you're doing.

Your first job is a great chance to learn what type of culture you get along with. It's a small sample, to be sure, but how do you work best? Do you like to bounce ideas off other people? Do you work better alone? Would you prefer a linear hierarchy that you can move up, or do you want the flexibility to move from project to project? Are ties a deal breaker or must-have? Personally, I thought I'd hate the idea of working a job where I had to wear a tie every day. When I finally did, I loved it (the tie, that is, not the job). The point is, you don't know what kind of culture you're going to fit in with until you start interacting with your coworkers. The crappy job you get right out of high school is an excellent, low-risk opportunity to figure out what that culture is.

Jobs That Aren't in Your Field Can Still Help Your Career

Most of us have certain jobs that we'd like to have more than others. The essence of pursuing a career is working towards those jobs, but the ones you have in between are crucial to getting you there. Sometimes that involves taking an internship that can teach you some necessary skills, but it can just as likely mean giving up the office job to tend bars if that gives you the flexibility you need. For example, reader Apocalypse531 found a way to get paid the same, but incur less stress:

First, is to learn that a job is a means to an end. If you aren't out of school or on your career path, you need to pay bills and have some extra cash and thats about it, then don't treat it like this sacred thing. My first job was an office job where I drove 30 miles to get there, wore a suit, and bought lunch every day. Eventually it dawned on me that tending bar, or waiting tables paid the same without the hassle when you took everything into consideration.

Sometimes what you need most from a job is to learn skills related to your field. Other times, you simply need a paycheck so you can pursue your interests outside of work. It's usually hard to figure out just what you need from a job until you actually start working, but once you do, identifying what you need from that job will go a long way towards telling you what to do next. Which leads to perhaps the most important lesson of all...

Know When It's Time to Quit

Most first jobs have defining characteristics like being crappy or for minimal pay. But even if you luck into a great first job, it still shares one trait with everyone else: it (almost certainly) won't be your last. At some point you're going to make the decision that it's time to leave. Maybe it's because you're unhappy, maybe it's because you want more money, or maybe it's just time for a change. Whatever your reason, you need to know how (and more importantly, why) to leave a job. As reader marenum says, you can learn more from leaving than staying:

I learned a lot more from leaving my first crappy job, than I did while I was actually there. It got to a point where I couldn't stand my evil boss, sterile environment, and uninspired work. So I left. I found an internship at a much cooler company within a few months, and even though it was unpaid, it made me so much happier.

Knowing when to quit your job is a difficult process on its own, and while you can keep an eye out for warning signs, quitting a job later in life can be riskier simply because you have more on the line. This makes it all the more important to learn from your first quitting experience. What did you feel better about after leaving? What did you miss? Do you regret leaving the company? How you answer these questions can help you figure out the right way to quit a job. When you get older and you have bills to pay, it'll get easier to think that quitting is always wrong. How you reacted to quitting your first job can tell you if it really is, or if you're just afraid to lose a paycheck.

Photos by Consumerist, Chris Hunkeler, Infusionsoft Sales, Liz West, and Quinn Dombrowski.

So, mortgages are more affordable because interest rates are low, right? Pick your chart provider and timespan of choice, but it is a well worn argument in favour of higher house prices: afford bigger mortgage, buy bigger more expensive house.

Not so fast. There is a case to be made that basing the analysis on the size of the initial payment is a form of mass delusion.

You see, the logic of affordability has its roots in the 1970s, but it is the reverse effect of something most people will have to fish out of the intellectual dustbin where the Taylor Rule and other inflation related analysis now molder: money illusion.

Continue reading: Affordability backwards

Spreadsheets are one of the most mystifying pieces of software you'll encounter in your adult life. As scary as they can be, though, you can do an awful lot with just four simple skills.

For the purposes of this article, we'll be focusing on Microsoft Excel, since this is the most widely used spreadsheet software. However, nearly all of these skills and features are useful in LibreOffice and Google Drive. We'll make notes when necessary to highlight the differences between the suites.

Input Data Easily with Forms

Entering data into a spreadsheet is the starting point for any analysis. While you can type the data you need in manually, forms allow you (or in some cases, others) to quickly enter information line-by-line without much of a fuss.

The Form button has been somewhat coyly hidden in Excel 2013, but you can get it back like so:

1. Right-click anywhere on the ribbon interface, and select "Customize the Ribbon."
2. In the right-hand pane, choose a section of the Ribbon to add the Forms button to.
3. On the left-hand side, choose "Commands Not in the Ribbon" from the drop down.
4. In the box below, select "Form…" from the list and click "Add" to place it in the ribbon.

Now that you have the Form button in your ribbon, you can create a data entry form. Start by creating the headers and first row of entries. Once you have your initial set of data in, you can enter in additional rows with the form command. Simply place your cursor in the top-left corner of your data set and click the form button.

The dialog that will appear allows you to enter information on a per-line basis. Fill out the form, press enter, and a new line will be created with all the new information.

Create Public-Facing Forms with Google Drive

Google Drive doesn't have quite the same functionality, but it does have its own forms worth noting. You can create a form either directly in Drive or from within a spreadsheet. You'll create questions for users to answer and their responses will populate a sheet. To create a form:

1. From within a spreadsheet, click Insert > Form.
2. Enter a description at the top of the form.
3. Enter and modify each question:
   1. Enter a title in the "Question title" box.
   2. Choose the Question Type.
   3. Optional: Choose a form of data validation. You can use this to confirm that data entered adheres to a specific type, such as a number within a set range, or text in the form of an email address.
   4. Optional: Select "Required question."

Once the form is completed, you can share it publicly or email it to a select group of respondents. All entries will be automatically placed into columns alongside a timestamp indicating when the data was submitted.

Perform Calculations with Functions and Formulas

So you've entered a bunch of data, but now you need to do something with it. Functions and formulas allow you to manipulate data in a spreadsheet. You can perform simple math, like add up the numbers in a column, get an average, or even work with real-world things like dates or financial calculations.

The various spreadsheet programs all have their own set of functions, and while many of them are shared between the different suites, there are some differences, so be sure to check out the full list for Excel, LibreOffice, and Google Drive.

With that in mind, here are a few examples of what you can do.

Perform Basic Math

At their simplest, functions can perform basic math using any data you've entered. For example, say you need to add the numbers in two cells together. For that, you'd use the SUM function:

=SUM(A1,B1)

This will add the contents of cells A1 and B1 together. For simple math, you can also use typical shorthand math operators like +, -, * and /. For instance, the following will perform the exact same math as the example above:

=A1+B1

You can add up the values in as many cells as you want. You can do this with a colon, like so:

=SUM(A1:A10)

The above function will add together all of the numbers in column A between rows 1 and 10, accounting for negative values. You can find a list of all the math functions Excel can perform here.

Make Statistical Calculations

You can also perform statistical calculations on a set of data, including calculating averages medians. As an example:

=AVERAGE(A1:A10)

The above function will return the average of all cells between A1 and A10. The various functions include both basic and advanced statistics functions. While not all of them will be useful for the casual spreadsheet enthusiast (yes, we exist), simple functions like AVERAGE and MEDIAN can be really helpful in everyday work.

Format and Calculate Dates and Times

You can also use formulas to manipulate date and time formatted entries. As an example, you can calculate the number of days between two dates with the following function:

=DAYS([End_date],[Start_date])

Excel also includes a function to return the current date:

=TODAY()

This function will put today's date in a cell. You can combine these two functions to create a formula to find out how many days are left until a certain date in the future like so:

=DAYS(TODAY(),[Target_date])

There are a number of other date and time functions you can look over here.

Combine Multiple Functions to Create Formulas

As you might have noticed in the last example, you can combine multiple functions to create what's known as a formula. Formulas are, essentially, multiple functions put together in one cell. So, for example, if you wanted to add up the numbers in column A and round them to the nearest whole number, you would use the following formula:

=ROUND((SUM(A1:A10)),0)

The above formula is made up of two functions: SUM which is being used as an argument for ROUND. In this statement, cells A1 through A10 will be added together first and then the resulting number will be given to the ROUND function to be rounded to the nearest whole number. Formulas can be as simple or as complex as you'd like, though the more elaborate they get, the more intricate their syntax gets. You can read more about how formula syntax works here.

Functions can also be combined with logical functions to create conditional formulas. Building useful formulas is a topic so broad that it could generate its own entire set of articles. Fortunately, our friends at the How-To Geek has an in-depth set of articles on that very subject. You can find the first lesson here.

Sort Data with Filters and Pivot Tables

So you've entered your raw data, made any calculations you need to make, and now it's time to actually interpret it. You have a few options for visualizing your data, depending on how you need to use it.

Sort by Column

Sometimes, you may need to sort your data by one of the categories you've entered. Just like your iTunes music library, you can re-order your data by column. To do so:

1. Press Ctrl-A to select everything in the sheet.
2. Select the Data tab in the Ribbon.
3. Click "Sort"
4. Choose the Column you want to sort by and what criteria you want to sort with.
5. Click OK.

See the above screenshot for example—we've reordered the entire data set by order number, from least to greatest.

Filter Out Duplicate Items

Other times, you may have some duplicate items within a category. In the example above, we have 8 entries, but only 5 names. To filter out those duplicates and see all the names we have (as opposed to all the orders), we can use the filtering options under the Data tab in the ribbon. To do so:

1. Under Data, click "Advanced" in the Sort & Filter section.
2. Select "Copy to another location" for a non-destructive way to pull out specific data (if you want to delete any rows in your spreadsheet that do not have unique data in this column, leave "filter the list, in place" selected.)
3. Click the "List range" box and select the column you want to filter.
4. Click the "Copy to" box and select the empty cell you want to copy your list of unique data to.
5. Ensure "Unique data only" is selected.
6. Click OK

This will create a new column that only contains unique data from that range, which is useful for separating out repeated entries.

Create Pivot Tables

When you have hundreds of lines of data, it's nearly impossible to glean any information from it—you need a summary. Pivot tables let you take certain portions of your data and summarize it, so you only see what you want to see.

Take the example below. Say we wanted to see the total amount of money we got from Bob Boberson.

This data is easy enough to look at now, but with dozens or hundreds of transactions, it wouldn't be. So, to see that summary, create a pivot table:

1. Create a new sheet, named Sheet 2.
2. Under the Insert tab, click Pivot Table.
3. Click Sheet 1 and select all populated cells in the sheet.
4. Click OK.
5. In the right-hand pane, you will be able to drag columns into filtered, column, or rows. For this example, drag "Name" to the Filters section, "Order number" to the Rows section, and "Payments" to the Values section.
6. This will create a table of all the payments made on each order number. At the top of the pivot table, in the dropdown box, you can select a specific customer to view only their orders.

When we do so, we get this:

With a pivot table, we can easily see all the orders made by Bob Boberson as well as a sum of all the payments he made.

This is just one simple example of how you could use pivot tables—their usage is very broad, and you can use it to summarize just about anything. To create a pivot table in LibreOffice or Google Drive, Head to Data > Pivot Table.

Perform Repetitive Tasks with Macros and Scripts

Working with spreadsheets can get repetitive really quickly. To make some of those repetitive tasks simpler, you can use Excel to record things you do over and over into a macro. Then, any time you need to repeat those tasks, you can use a keyboard shortcut to "play back" the macro and it'll do all the busywork for you. For example, say we wanted to change the font of a large group of cells to something very specific, like Arial 12 italicized:

1. Under the View tab, click the Macros drop down and select Record Macro.
2. Give the macro a name.
3. Optional: Assign the macro a keyboard shortcut.
4. Click OK
5. Click the Home tab.
6. Select "Arial" from the font drop down.
7. Select 12 from the size drop down.
8. Click the italics button.
9. Click the Stop button in the bottom-left corner of Excel.

From then on, you will be able to apply the Arial font in a 12pt size with italics by pressing one single keyboard shortcut (the one you assigned in step 3), or by selecting the macro from the View > Macro Library. Obviously, this is a rudimentary example, but you can use the macro feature to record any repetitious tasks. You can similarly record macros in LibreOffice.

In Excel, LibreOffice, and Google Drive, you can create more complex macros and scripts with a little bit of programming savvy (and in fact scripts are the only way to automate tasks in Google Drive using a proprietary scripting format). To get started learning about these, check out the resources below:

• Excel: Work with macros
• LibreOffice: Getting started with macros
• Google Drive: Overview of Google Apps Script

Further Resources

All of these skills are just the tip of the iceberg. Using spreadsheets is a discipline in itself and you can dive much, much deeper into each of these categories if you want. For convenience, here are some resources you can use to learn more about all of these skills and hone your craft:

Forms and Data Entry

• Create an Order Form in Excel
• Create forms with LibreOffice
• Create a Google Form

Functions and Formulas

How-To Geek School:

• Why Do You Need Formulas and Functions?
• Defining and Creating a Formula
• Relative and Absolute Cell Reference, and Formatting
• Useful Functions You Should Get to Know
• Lookups, Charts, Statistics and Pivot Tables

Filtering and Pivot Tables

• Filtering data in Excel
• Filter data in a range or table (Excel)
• PivotTable reports 101 (Excel)
• Pivot Table (LibreOffice)
• Overview of pivot table reports (Google Drive)

Macros and Scripts

• Work with Macros in Excel
• Getting Started with Macros in LibreOffice
• Introduction to OpenOffice Macros
• Overview of Google Apps Script
• Extend Google Docs, Sheets, and Forms with Apps Script

Supply constraints are not the only cause of the UK’s property inflation, writes Tim Harford

‘George Osborne has admitted that UK housing supply will struggle to keep up with demand for the next decade . . . ’, Financial Times, February 5

I saw the headlines: George Osborne predicts that house prices will keep rising for the next 10 years.

That’s the erroneous conclusion that seems to have emerged but it’s not what Mr Osborne said when giving evidence to the House of Lords economic affairs select committee. His only gesture towards a house-price forecast was to mention the view of the Office for Budget Responsibility. The OBR does forecast price rises but not with nearly the same gusto of private sector forecasters – often estate agents. So it’s strange to see the chancellor of the exchequer being linked with a bullish view on the price of houses.

But Mr Osborne predicts a continued shortfall of supply – and that can only mean that prices go up.

That rather assumes that the key reason for high house prices is a shortage of new homes. It’s far from clear that this is true.

Are you repealing the laws of supply and demand? Didn’t a Financial Times poll of economists say that the best response to high housing prices was to build more houses? What sort of economist are you anyway?

I quite agree that the UK needs more housebuilding – it would help provide jobs and cheaper, more environmentally friendly and more comfortable homes. And it’s true that all other things being equal, house prices will be lower in a scenario where lots of homes are built than in one where very few are built. But none of that means the chief cause of high house prices now is constrained supply – nor that continued supply constraints mean that the high prices will continue too.

I’m still confused.

OK. What is the single most reliable indicator that housing is scarce?

High house prices.

I disagree. It’s high rents. Rents can change more quickly, are affected less by the state of the UK mortgage market and don’t have a speculative component. People sometimes buy houses simply in the hope of reselling at a profit; not many people rent a house in the hope of a profitable sublet.

But aren’t rents high too?

Yes. But not nearly as high as house prices are, which is the point. A government review of the rental market in 2010 found that rents had increased by 40 per cent in the decade running up to the 2008 recession, almost exactly tracking the increase in what people earned. House prices, in contrast, had increased by more than 100 per cent.

A report last spring from the OECD also used rents as a benchmark to assess UK house prices and concluded that they were overvalued. Buy-to-let investment looks like an expensive proposition in many parts of the country unless rents rise sharply.

So you think it’s a bubble rather than supply and demand.

Scarce supply and robust demand is pushing rents up in many places, and that’s a good reason for public policy to encourage more housebuilding. But the additional house-price margin over and above what rents explain may indeed indicate a bubble.

Are there other explanations?

Certainly. It’s possible that investors have taken a far-sighted view of the prospects for future rents, and are buying houses in expectation that rents will leap in due course. Time will tell.

Or low interest rates?

I was coming to that. Real interest rates are very low and the government’s help-to-buy policies are also making it easier to buy houses. And houses are expensive because other assets are expensive, too. But real interest rates won’t stay low for ever.

Returning to the subject of building houses, has Mr Osborne done enough?

He has thrown money at banks and housebuyers and tried to liberalise the planning system but he admitted himself that the problem hasn’t been solved. There is colossal economic value to granting more planning permission – it can increase the value of agricultural land roughly a hundred times over.

So why don’t local authorities grant more permission?

Because they have little to gain but angry voters. If local authorities could reap some of the value of the planning permission they granted, they could use the cash to compensate existing residents and to provide services. That could be a vote-winner. But they can’t – so it isn’t.

Also published at ft.com.