Category: Economics

Are Freelancers Making Bank?

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In May of 2002, a book entitled ‘Free Agent Nation: The Future of Working for Yourself’ was released to much acclaim. In it, author Daniel Pink coined the term ‘free agent’ to reflect  movement towards an economy dominated by freelancers and the self-employed. His message was revolutionary at the time, sparking debate as to whether this new band of independent workers would be able to earn a sustainable living via non-traditional work.

Let’s fast forward to 2015. According to a new report released by the contractor-matching site Upwork and the Freelancers Union, freelancers say that they are indeed making bank, bringing in more money than their counterparts in traditional office jobs. This year, an estimated 34% of the U.S. workforce categorized themselves as freelancers. When distilled down to raw numbers, 54 million Americans – up by over over 700,000 workers from the previous year – are functioning in either a full or part-time freelance capacity. Many talent economy experts expect this trend to continue.

My Own Personal Journey

After 7 years in leadership roles in the healthcare human resources field, I began my journey as a solo business owner in 1993, providing consulting services to a wide swath of corporate clients. This later morphed into a career on the speaking circuit, amassing an average of 60 engagements a year for conferences throughout the U.S.  

To handle the heavy demand of my growing business, I even hired a virtual assistant (me in Chicago, she in Minneapolis), before this idea had even become popular.

Needless to say, we – among the rare few back then who elected to unlock the corporate handcuffs to pursue our own gig – were considered to be nuts. “What about your retirement benefits?”,  a few would ask. “It seems so unstable,” said others.

Yes, it seemed risky at the time. But honestly, I’ve always felt more secure pursuing my own thing. Even to this day, the thought of being locked into a W-2 job evokes a nauseating sense of unease in the pit of my stomach. I know, I know… it’s a control thing.

In fact, talk to most freelancers these days and they will share a similar tune. We all love the flexibility of creating a career on our own terms. And in terms of money, it’s far better to capture all of the money due for the value you’ve delivered than to have to work for pay that has a ceiling. Unlimited income possibilities + flexibility: how can you beat that?

Those surveyed indicated that they are largely satisfied with how the freelance lifestyle is working out for them. 60% said they turned freelance by choice and as a result, they are earning more than they did previously in their traditional jobs. And somewhat surprisingly, 78% noted that they had exceeded their previous earnings within a year of going solo.

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Bars Bustle with Sports Season Boost

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Fall is my favorite season. I delight in the changing leaf colors and temperate weather patterns. But what I love most is that it’s the time when the world of spectator sports seems to come into full bloom, cramming in college and NFL football as well as NHL hockey. Furthermore, the baseball world series run is also in full trajectory. And my favorites – the NCAA and NBA basketball seasons – are just around the bend.

Bars and restaurants that have been on a slow cooker during the summer months suddenly become alive with sports enthusiasts from all walks of life, as the dawn of fall sports season arrives. The sound of fans hooting and howling for their favorite team reflects the important role that spectator sport plays in fostering community spirit and economic development.

In this vein, local bars function as ‘third-places’, a concept coined by urban sociologist Ray Oldenburg. These are places where people congregate, other than at work or at home. In his book ‘The Good Great Place’, Oldenburg suggests that locales like community bars are vital to local civic connection and economic vitality.

 

Hot Wings and a Cold Brew

Back during my undergraduate days at The Ohio State University, a watering hole hangout called Buffalo Wild Wings & Weck (known as BW3) was an off-campus favorite of mine. It was famous for its 3.2% beer selection and blistering hot chicken wings; the hottest batch on the menu was affectionately called Three Alarm Fire.

Fast forward to almost twenty years later when BW3 morphed into what is now known as Buffalo Wild Wings, a franchised series of restaurants and bars that have become an epicenter of activity for rabid sports fans nationwide. In November of 2003, their initial public offering stock price was $8.50 per share. This price skyrocketed 35% in its first day of trading. If you had purchased shares then, you would be sitting pretty on an investment that has today realized an almost 1,600% gain on your initial investment. Just as a comparison, the S&P returned a respectable 135% over that same period.

By the way, I have a friend – a highly successful professional investor – who asked me one day back in 2010 whether I had any recommendations for stock picks. Out of my ass, I mentioned Buffalo Wild Wings. Now whenever I cross paths with her at a local Denver coffeehouse, she frequently offers to buy me a latte… which I request with a couple of espresso shots to jolt me out of the regret that I did not take my own advice and buy that darned stock.

Lest I digress, the point I am trying to make here is that bars and sports are ideal team mates for fueling a free market economy.  Let’s take pro basketball as an example. It is said that during his playing days in Chicago, Michael Jordan was worth in excess of $100 million to the Windy City. I conjecture that a sizable chunk of that amount was accrued at local bars and restaurants where foot traffic swelled, both before and after games. The same effect occurred with the Chicago Cubs and the White Sox of baseball lore.

The Top 5 Myths of a Gold Standard

Money LendersIf you can get your friend to stop laughing, and actually give you an answer as to why it would be a bad idea to return to a classic gold standard, you will invariably get one of the following responses. As we will see, some of these are either just plain wrong, or they are at best misunderstood.

1. Nobody wants heavy gold coins weighing down their pockets

This response is usually accompanied by some quip about going back to medieval times, with gold ducats carried around in purple drawstring pouches. But this just shows a lack of understanding of the essence of a gold standard. Yes, under a gold standard, you could transact in actual gold coins, which is what happened earlier in history. But people eventually figured out they could use paper currency that represented claims on the gold actually stored at banks and in vaults. The only stipulation for a gold standard is the ability to convert or redeem your money into gold, if so desired.

Therefore, you can still have currency and even units like ‘dollars’ as long as they represent a fixed amount of gold. This is what is meant by ‘gold-backing’. The option to convert to gold keeps banks and governments honest, but as long as citizens are unconcerned that banks or governments would ever default on this pact, then they will happily use the dollars and leave the gold in the vaults. In fact, our monetary system wouldn’t look much different; you would still have your checking and savings accounts, debit cards and credit cards, all denominated in dollars. The only difference is the additional option to convert those dollars to gold at any time.

2. Gold is a barbarous relic

Economist John Maynard Keynes and even talented investors like Warren Buffet and Charlie Munger have described gold in these terms. It has been suggested that if aliens saw humans digging up gold from the ground – refining it and shaping it into coins and bars, only to bury it back in the ground in vaults and guard it – they would think we are crazy. Perhaps this is not an unreasonable remark, considering the wasted resources on all of this energy, equipment and labor.

Harriet Tubman: New Face of the $20 Bill?

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The abolitionist Harriet Tubman has long been admired for her civil rights legacy. And if a grassroots organization has its way, she will one day adorn the front of a $20 bill.

The group, Women On 20s, recently asked the public to vote to get Tubman on U.S. printed currency. She garnered nearly 34% of the vote, edging out former First Lady Eleanor Roosevelt for the distinction of replacing Andrew Jackson. If this is codified by the Department of Treasury, Tubman would make history as the first woman and the first African-American to be represented on American paper currency.

A little history about Tubman. She was arguably the most influential figure in the Underground Railroad Movement, a network of routes that facilitated slaves fleeing to northern free states as well as Canada. Tubman, who herself escaped slavery in Maryland, made it her personal cause to free hundreds of slaves out of bondage. In addition to her work to free slaves, she was a passionate advocate for women’s equality and suffrage.

As she noted about her abolitionist work, “I was a conductor on the Underground Railroad, never running my train off the track and never losing a passenger.”

This campaign to highlight women via U.S. paper currency has gained a ton of political support, including U.S. Senator Jeanne Shaheen (D-New Hampshire), from a state that has a prominent history in the freedom movement. Women on 20s has delivered a petition to President Obama, asking him to instruct Treasury Secretary Lew to circulate these bills in anticipation of the women’s suffrage centennial in 2020. This will be an unprecedented move if executed; one with rich historical significance for the cause of liberty.

 

 

Irwin Schiff – A Man of Conviction

Irwin SchiffIrwin A. Schiff just passed away on October 16th, at the age of 87, still under lock and key as a political prisoner. Most people know Irwin Schiff as the father of investor and fellow gold advocate, Peter Schiff. Irwin Schiff was also known as the most prominent tax protester of our time, a man who stood up to the IRS and was imprisoned as a result. But the legacy he leaves is much deeper than his fight with the IRS, and there are some valuable lessons we can learn from his life and teachings.

For those unfamiliar with Irwin Schiff, he was the son of Jewish immigrants. He served in the Korean War and later opened his own insurance brokerage. He read Henry Hazlitt and F.A. Hayek in college, gaining exposure to Austrian economics. He was a staunch supporter of liberty and limited government, undertaking grassroots campaigns and later staging an (unsuccessful) write-in campaign for Governor of Connecticut. He was also a candidate for the Libertarian Party Presidential Nomination in 1996.

Irwin Schiff was also a supporter of sound money, testifying in 1968 before the Senate Committee on Banking and Currency against the removal of gold-backing for our currency. My personal exposure to Irwin Schiff was through his book ‘How an Economy Grows and Why It Doesn’t’. Originally written as a children’s book in an illustrated comic-book style, it is accessible to everyone, yet contains high-level economic and political concepts that most adults do not understand.

The book starts off with an island economy, and it logically illustrates how that economy grows only through savings and capital goods investment. It then shows the disastrous results that occur when the government inflates and devalues the island’s currency. The book has been updated by his sons, Andrew and Peter, and I would highly recommend it to everyone. It is truly a joy to read. Irwin also wrote a similar book called ‘The Kingdom of Moltz’, which is also very clever.

Of course, most people who know anything about Irwin Schiff focus on his tax theories and, unfortunately, many write him off as a tax cheat who was eventually imprisoned for his actions. But his story is much more nuanced.

Patent Laws Take a Bite Out of Apple

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UPDATE 10/17/15:

The Daily Mail reported the actual cost of the suit to be ruled at $234 Million.

Apple was charged with patent infringement this week, says PC Mag. The Wisconsin Alumni Research Foundation, or WARF, is the body behind the charges. WARF manages patents for The University of Wisconsin-Madison (UWM). The cost of the patent suit they are pursuing against the tech giant could reportedly reach $862 million.

WARF previously settled out of court with Intel, who they also sued over their Core 2 Duo processor back in 2008. In this case, the jury has already ruled that Apple was guilty