Parents are suddenly saying ‘no’ and their kids are saying, ‘What do you mean?’

Indulged. Entitled. Those labels have become hot-glued to middle-class and affluent teenagers born after the last major economic downturn, in the late 1980s. They were raised in comparatively flush times by parents who believed that keeping children happy, stimulated and successful, no matter the cost, was an unassailable virtue. A 2007 study found that nearly 75% of parents caved in to their children’s nagging for new video games, half within two weeks.

The annual discretionary spending by teenagers, whose money comes from allowance, gifts and part-time jobs, had dropped 27% to $2,600, from its spring 2006 peak of $3,560. Panicked, stressed parents are struggling to explain and impose restraints, just when teenagers are expecting more spending money, not less. Many adolescents respond with anger at what they see as a bait-and-switch world, fear for their families and confusion about budgeting.

American teenagers, many of whom have weak quantitative skills, are generally naïve about finance. Meanwhile many had debit and credit cards, some were hard pressed to explain the difference. Regardless of family means, most did not have after-school jobs.

Parents hardly relish these conversations. As they sit down with their teenagers, they are agonizing over their own feelings of failure. “Parents are going to feel they’re not giving their kids everything,” said Madeline Levine, a California psychologist. “The kids are going to be confused. They’ve never known not having what they want. And the parents are going to have to tolerate their kids’ anger.”

In familial relationships, money can be a proxy for love and trust. When money has to be limited, underlying tensions become exacerbated. For some families, the financial crisis has been a rallying point, compelling them to articulate values and priorities for the first time. Market researchers say that teenagers are, out of necessity, adjusting. Last week’s survey showed that the amount teenagers allocated for clothes had increased 1%, but that they were patronizing stores with lower-priced labels.

Anecdotes like these prompt economists and therapists to find something positive in all the economic turbulence. The sooner we have these conversations in the family and as a society, the sooner we can focus on core values, and have a more realistic dialogue about the meaning of happiness and money.

Economic inequality is growing in the world’s richest countries, particularly in the United States, jeopardizing the American Dream of social mobility just as the world tilts toward recession, states a 30-nation report. The gap between rich and poor has widened over the last 20 years in nearly all the countries studied, even as trade and technological advances have spurred rapid growth in their economies.

With job losses and home foreclosures skyrocketing and many of these countries now facing recession, policy makers must act quickly to prevent a surge in populist and protectionist sentiment as was seen following the Great Depression. The United States has the highest inequality and poverty rates in the OECD after Mexico and Turkey, and the gap has increased rapidly since 2000

Rising inequality threatens social mobility — children doing better than their parents, the poor improving their lot through hard work — which is lower in countries like the U.S., Great Britain and Italy, where inequality is high, than countries with less inequality such as Denmark, Sweden and Australia.

In the United States, the richest 10 percent earn an average of $93,000 — the highest level in the OECD. The poorest 10% earn an average of $5,800 — about 20% lower than the OECD average. Some Americans make only $5,800 a year?! Who are these people?

If your household income is $250,000, other people might consider you rich–even if it feels as if you’re just getting by.

Whatever the number, focusing on income alone overlooks many factors that affect whether people feel rich or not. Where you live is obviously one of them, since $250,000 buys a lot more in Milwaukee than it does in Manhattan. And as any parent knows, household income tends to evaporate when the bills for diapers, daycare, braces, and college come due.

So Yahoo Finance crunched some numbers to figure out what it takes to be rich in 40 cities across America–for a typical couple with no kids, and for a family of four. The average U.S. household is home to 2.54 people, so factoring in the actual size of your household produces a more realistic estimate of how much income it takes to live like the wealthiest 5% of Americans. For a family of four, nationwide, that’s $490,000.

By the same measure, here’s the household income required to be “rich” in the five most and least expensive cities in our sample:

New York. Couple without kids: $359,494; Family of four: $718,989

San Francisco. Couple without kids: $359,061; Family of four: $718,123

San Jose, Calif. Couple without kids: $354,513; Family of four: $709,025

Washington. Couple without kids: $347,917; Family of four: $695,833

Boston. Couple without kids: $316,613; Family of four: $633,227

U.S. average. Couple without kids: $245,218; Family of four: $490,436

Colorado Springs, Colo. Couple without kids: $207,472; Family of four: $414,943

Omaha. Couple without kids: $207,019; Family of four: $414,038

Fresno, Calif. Couple without kids: $205,349; Family of four: $410,698

Albuquerque, N.M. Couple without kids: $193,483; Family of four: $386,965

El Paso, Texas. Couple without kids: $175,161; Family of four: $350,321

To view the entire list.

The US has again topped a widely-watched index ranking country competitiveness, despite the financial crisis that has left it and other highly ranked nations facing market meltdown and a prolonged economic downturn.

Switzerland, Denmark and Sweden retain their second, third and fourth places respectively in the league table compiled by the Geneva-based World Economic Forum.

Women With Only One Female Boss Have It Bad?

A new study finds that your boss’ gender can affect just how much pain he or she seems to inflict. Researchers at the University of Toronto used data from a 2005 national telephone survey of working adults in the United States and compared the stress levels and physical health problems of men and women working in one of three situations: for a lone male supervisor, a lone female supervisor, or for both a male and female supervisor.

The study found that:
Women who had only one female boss reported more psychological distress (such as trouble sleeping, difficulty focusing on work, depression and anxiety) and physical symptoms (such as headaches, stomach pain or heartburn, neck and back pain and tiredness) than women who worked for one male boss.

Women who reported to a mixed-gender pair of supervisors also reported more of these symptoms than their peers who worked for a single male boss.

Men who worked for a single supervisor, regardless of the supervisor’s gender, had similar levels of distress.
Men who worked for a mixed-gender pair had fewer mental and physical symptoms than those working for a lone male supervisor.

The findings, specifically those of female subordinates with females bosses, contradict theories suggested by previous studies that demographic similarities between a boss and their subordinate would promote harmony in the work place, while demographic differences would create problems.

The researchers speculated that these contradictions may stem from the stereotype that it is more “normal” for men to be leaders and display the typical leadership characteristics.

Something about the nature of the work itself is influencing these health differences. For example, women working with a woman supervisor might tend to be found mostly in the “caring sector or in jobs that tend to be under-resourced, under-funded and under-valued,” such as social work or education, creating stress both for the workers themselves and stress for the boss that might trickle down to her subordinates.

Workers in their 20s and 30s using their retirement funds to pay credit card debt and home mortgages instead of leaving it alone to accumulate. Fidelity Investments released a survey that said large numbers of young workers cash out their 401(k) accounts when they switch jobs, leaving them without an accumulation of cash for retirement.

The typical Gen X or Gen Y will work for seven different employers across their career. If you consider the combination of the withdrawal behavior with that propensity for multiple employers, we are facing a savings challenge and crisis with this generation.”

About 74% of generation Y workers, born between 1976 and 1987, said money worried them most. Half of the workers in the two age groups said saving for retirement is an obligation or a goal but 51% said other financial priorities prevent them from setting aside money. Mortgage payments and managing credit card debt ranked higher in importance than retirement saving.

The key to changing the behavior is to get younger workers to seek advice when they change jobs so they understand they can leave the money with the employer, roll it over to the new employer’s plan or put the money in an IRA.

The U.S. Bureau of Labor Statistics says Generation X and Generation Y workers will surpass baby boomers as the largest single segment of workers in the United States by 2010 when they will represent 60% of the U.S. work force.

Human affairs require adaptation and the avoidance of the repetition compulsion.

Leaders have to achieve psychological independence to enable them to apply their talents to the work at hand. This independence frees the leader to expand on his or her talents and thereby become an object to allow subordinates to identify with and to cultivate and apply their own talents in the interests of meeting and even expanding on objectives.

Through years of research work, writing, and reading it became even clearer to HBS professor emeritus Abraham Zaleznik that he was on the edge of understanding and adopting two principles: Leaders need a healthy dose of narcissism to lead, and they also need a healthy dose of paranoia to avoid the trap of group dependency.

An individual’s character is outwardly represented while it is a product of development starting with early childhood. Even when leaders try to hide and disguise their character, their traits are recognizable to others.

Character is on display as leaders structure their organizations and go about making decisions. Some prefer to be intimately involved in the decision process. Others prefer to delegate early on and to remain at a distance from the give-and-take of reaching conclusions.

Zaleznik’s latest book, Hedgehogs and Foxes: Character, Leadership, and Command in Organizations is titled from the notion of the ancient Greek philosophers that hedgehogs know one big thing while foxes know many things. Applied to leadership, hedgehogs reduce reality to one single principle, while foxes know many things and are prepared to adapt to a complex view of the world.

Managers are oriented to process, while leaders are attuned to substance. Process is concerned with establishing procedures for solving problems, while substance deals directly with the problems at hand. Process is soon related to obsessive thinking and depressive emotional states, while substance energizes and draws on imaginative thinking. Managers tend instinctively to delegate; leaders like to get involved in working toward solutions to substantive problems.

You must realize that if you aren’t managing your own professional image, someone else is. 

The definition of Professional Image is a set of qualities and characteristics that represent perceptions of your competence and character as judged by your key constituents. Most people want to be described as technically competent, socially skilled, of strong character and integrity, and committed to your work, your team, and your company. Research shows that the most favorably regarded traits are trustworthiness, caring, humility, and capability.

“People are constantly observing your behavior and forming theories about your competence, character, and commitment, which are rapidly disseminated throughout your workplace,” says HBS professor Laura Morgan Roberts. “It is only wise to add your voice in framing others’ theories about who you are and what you can accomplish.” Keeping on top of your personal traits is only part of the story of managing your professional image. You also belong to a social identity group—African American male, working mother—that brings its own stereotyping from the people you work with, especially in today’s diverse workplaces.

For example, African American men are stereotyped as being less intelligent and more likely to engage in criminal behavior than Caucasian men. Asian Americans are stereotyped as technically competent, but lacking in the social skills required to lead effectively. Working mothers are stereotyped as being less committed to their profession and less loyal to their employing organizations. All of these stereotypes pose obstacles for creating a positive professional image.

Despite the added complexity of managing stereotypes while also demonstrating competence, character, and commitment, there is promising news for creating your professional image! Impression management strategies enable you to explain predicaments, counter devaluation, and demonstrate legitimacy. People manage impressions through their non-verbal behavior (appearance, demeanor), verbal cues (vocal pitch, tone, and rate of speech, grammar and diction, disclosures), and demonstrative acts (citizenship, job performance).

In order to create a positive professional image, impression management must effectively accomplish two tasks: build credibility and maintain authenticity. When you present yourself in an inauthentic and non-credible manner, you are likely to undermine your health, relationships, and performance. Building credibility can involve being who others want you to be, gaining social approval and professional benefits. If you suppress or contradict your personal values for the sake of meeting societal expectations for professionalism, you might receive certain professional benefits, but you might compromise other psychological, relational, and organizational outcomes.

Recession has always been a factor raising divorce rates

University of Chicago Business School economist Gary Becker conducted a study on couples that experience any sudden significant and unexpected change in income (positive or negative) are at risk of divorce.

Jane Fahey, a financial and retirement planner in Michigan, where unemployment is highest in the country, reports that some of her middle-aged clients, both men and women, have had to move back in with their parents. A couple’s house is usually the biggest marital asset, and the lousy real estate market and soft economy are complicating the matter of dividing it equitably in a divorce.

In New York City, where Wall Street has been overrun by layoffs, divorces have also been affected, albeit somewhat differently. Lifestyle that’s been built up in over a decade is literally, within the span of one week, getting wiped out. One couple, for instance, that was preparing its divorce last summer based on $15 million in income, had to readjust the figures to under $1 million. Second homes in the Hamptons are being sold at lower selling prices, and broken up families are having to adjust to living in smaller apartments.

Perhaps it’s cheaper to seek counseling and give it another go.

People are overpaid because there are certain things consumers just don’t want screwed up.

Almost no one in America would admit to being overpaid, but many of us take home bloated paychecks far beyond what we deserve. Below is a list of the 10 most overpaid jobs in the U.S., in reverse order, drafted with input from compensation experts:

10.) Wedding photographers: Photographers earn a national average of $1,900 for a wedding, though many charge $2,500 to $5,000 for a one-day shoot. The overpaid ones are the many who admit they only do weddings for the income, while quietly complaining about the hassle of dealing with hysterical brides and drunken reception guests.

9.) Major airline pilots: While American and United pilots recently took pay cuts, senior captains earn as much as $250,000 a year at Delta, and their counterparts at other major airlines still earn about $150,000 to $215,000. The pilot’s unions are the most powerful in the industry. They demand premium pay as if still in the glory days of long-gone Pan Am and TWA, rather than the cutthroat, deregulated market of under-$200 coast-to-coast roundtrips.

8.) West Coast longshoremen: In early 2002, West Coast ports shut down as the longshoremen’s union fought to preserve generous health-care benefits that would make most Americans drool. Next year, West Coast dockworkers will earn an average of $112,000 for handling cargo. Office clerks who log shipping records into computers will earn $136,000. And unionized foremen who oversee the rank-and-file will pull down an average $177,000.

7.) Skycaps at major airports: Many of the uniformed baggage handlers who check in luggage at curbside at the busiest metro airports pull in $70,000 to $100,000 a year. On top of their salaries, peak earners can take in $300 or more a day in tips. That amounts to a $2 tip from 18 travelers an hour on average. Many tip more than that.

6.) Real estate agents selling high-end homes:  Anyone who puts in a little effort can pass the test to get a real estate agent’s license, which makes the vast sums that luxury-home agents earn stupefying. While most agents hustle tail to earn $60,000 a year, those in affluent areas can pull down $200,000-plus for half the effort.

5.) Motivational speakers and ex-politicians on the lecture circuit:  Corporate trade groups pay astronomical sums to celebrity-types and political has-beens to address their convention audiences. The national convention circuit’s shame is that it blows trade-group members’ money on orators whose speeches often have been warmed over a dozen times.

 4.) Orthodontists:  For a 35-hour workweek, orthodontists earn a median $350,000 a year. General dentists, meanwhile, earn about half as much working 39 hours a week on average, in a much dirtier job. The difference in their training isn’t like that of a heart surgeon vs. a family-practice doctor. It’s a mere two years. U.S. dental schools have long been criticized for keeping orthodontists in artificially low supply to keep their income up.

3.) CEOs of poorly performing companies:  CEOs at chronically unprofitable companies and those forever lagging industry peers stand as the most grossly overpaid. Most know they should resign — in shareholders’ and employees’ interest — but they survive because corporate boards that oversee them remain stacked with friends and family members. The ultimate excess comes after they’re finally forced out, usually by insiders tired of seeing their own stock holdings plummet.

2.) Washed-up pro athletes in long-term contracts:  Those who sign whopping, long-term contracts after a few strong years, and then find their talents vanish, who reap unconscionable sums of money. They point to owners as the culprits, yet golf star Tiger Woods and tennis champ Serena Williams earn their keep based on their performance in each tournament.

1.) Mutual-fund managers:  They’ve been long overpaid. Stock-fund managers can easily earn $500,000 to $1 million a year including bonuses.  Now we discover an untold number enriched themselves and favored clients with illegally timed trades of fund shares. That’s a worse betrayal of trust than the corporate scandals of recent years, since they’re supposed to be on the little person’s side.

It is the question that most nervous flyers ask themselves whenever they board an aircraft: where is the safest place to sit? The answer is now much clearer after an exhaustive study of 105 accidents and personal accounts from almost 2,000 survivors of how they managed to escape from crash landings and onboard fires.

For the best chance of getting out alive from a burning aircraft, people should choose an aisle seat near the front within five rows of an emergency exit. The study found that the seats with the best survival rate were in the emergency exit row and the row in front or behind it. The most dangerous seats are those six or more rows from an exit.

Add an extra zero to the ranks of the millionaires club.

The number of people around the world with at least $1 million in assets passed 10 million for the first time last year. The combined wealth of the globe’s millionaires grew to nearly $41 trillion last year, an increase of 9% from a year before.

The ranks of the wealthy are growing fastest in the developing economies of India, China and Brazil. The number of millionaires in India grew by about 23%. The United States still reigns supreme when it comes to fat wallets, though: One in every three millionaires in the world lives in America. Combined, Africa, the Middle East and Latin America account for just one in 10.

$1 million isn’t what it used to be. One million dollars in 1996, the first year the report was issued, would have been worth about $1.3 million last year. The wealth of the world’s richest is projected to reach almost $60 trillion by 2012.

By 2015, 17% of the residents of the United States will be getting cosmetic procedures, the body enhancement industry predicts.

A new study published by the American Society of Plastic Surgeons (ASPS) predicts there will be more than 55 million cosmetic surgery procedures performed in 2015. That’s nearly one procedure for every five Americans.

Women’s top-five cosmetic surgical procedures for 2007:
Breast augmentation: 399,440 procedures
Liposuction: 398,848
Eyelid surgery: 208,199

Men’s top-five cosmetic surgical procedures for 2007:
Liposuction: 57,980 procedures
Eyelid surgery: 32,564
Nose reshaping: 31,713

The No. 1 non-surgical cosmetic procedure for U.S. men and women last year was Botox injection. By 2015, the researchers predict that 88% of all cosmetic procedures will be non-surgical.

Do You Hide Purchases From Your Loved One?

Half of the pairs in a 2003 study came up with completely different figures when asked to estimate their family’s income and net worth. In a survey last year of couples ages 43 to 70, some 35% were more than two years off when guessing when their spouse planned to retire.

About a third of those surveyed admitted to lying to their partner about money. And four out of five respondents in another poll revealed that they hide purchases from the one they love. Couples these days marry later than they used to and come into the union with their own credit cards, bank accounts and investments, which often stay separate. And if you’re convinced that sharing what you’ve spent or saved will spark criticism or a fight, it’s understandable you might choose to keep a few details to yourself.

You can’t come to smart decisions - or even joint decisions - if you don’t know what assets and liabilities you’re working with and what your partner’s goals and priorities are. In other words, two heads really are better than one for solving financial problems. The blinders-on approach also makes a crisis more difficult to handle. Should your spouse pass away, you’ll be left scrambling to find bank accounts and insurance policies. Here are some mandatory topics to discuss with your spouse.

Instead of going into retirement loaded with assets, Americans are hitting their retirement years loaded with debt. 

Swamped by debt and rising medical bills, elderly Americans have been seeking bankruptcy-court protection at sharply faster rates than other adults. From 1991 to 2007, the rate of personal bankruptcy filings among those ages 65 or older jumped by 150%, according to AARP. Experts say medical bills have played a major role in the debt that has forced many elderly Americans into bankruptcy proceedings.