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    <title>Eapen7's Favorite Links from Diigo</title>
    <link>https://www.diigo.com/user/Eapen7</link>
    <description></description>
    <pubDate>Wed Jun 19 07:10:42 UTC 2013</pubDate>
    <lastBuildDate>Wed Jun 19 07:10:42 UTC 2013</lastBuildDate>
	
    <item>
      <title>thomasdavis/best-practices · GitHub</title>
      <link>https://github.com/thomasdavis/best-practices</link>
      <description>
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		&lt;p class=&quot;diigo-tags&quot;&gt;&lt;strong&gt;Tags:&lt;/strong&gt;
				        
	        &lt;a href='https://www.diigo.com/user/eapen7/programming' rel='tag'&gt;programming&lt;/a&gt;
	      		        
	        &lt;a href='https://www.diigo.com/user/eapen7/practices' rel='tag'&gt;practices&lt;/a&gt;
	      		        
	        &lt;a href='https://www.diigo.com/user/eapen7/quotes' rel='tag'&gt;quotes&lt;/a&gt;
	      	
		&lt;/p&gt;
		
      </description>	  
      <pubDate>Mon Jun 17 15:44:03 +0000 2013</pubDate>
	  <lastBuildDate>Mon Jun 17 15:44:03 +0000 2013</lastBuildDate>
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    <item>
      <title>Shirts.io - T-Shirt Printing And Fulfillment API</title>
      <link>https://www.shirts.io</link>
      <description>
      	&lt;p&gt;&lt;/p&gt;
		
		
		
		&lt;p class=&quot;diigo-tags&quot;&gt;&lt;strong&gt;Tags:&lt;/strong&gt;
				        
	        &lt;a href='https://www.diigo.com/user/eapen7/printing' rel='tag'&gt;printing&lt;/a&gt;
	      		        
	        &lt;a href='https://www.diigo.com/user/eapen7/api' rel='tag'&gt;api&lt;/a&gt;
	      		        
	        &lt;a href='https://www.diigo.com/user/eapen7/shirts' rel='tag'&gt;shirts&lt;/a&gt;
	      	
		&lt;/p&gt;
		
      </description>	  
      <pubDate>Sat Jun 15 02:57:09 +0000 2013</pubDate>
	  <lastBuildDate>Sat Jun 15 02:57:09 +0000 2013</lastBuildDate>
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      <title>focus@will</title>
      <link>https://www.focusatwill.com/music/#player</link>
      <description>
      	&lt;p&gt;&lt;/p&gt;
		
		
		
		&lt;p class=&quot;diigo-tags&quot;&gt;&lt;strong&gt;Tags:&lt;/strong&gt;
				        
	        &lt;a href='https://www.diigo.com/user/eapen7/music' rel='tag'&gt;music&lt;/a&gt;
	      		        
	        &lt;a href='https://www.diigo.com/user/eapen7/productivity' rel='tag'&gt;productivity&lt;/a&gt;
	      		        
	        &lt;a href='https://www.diigo.com/user/eapen7/focus' rel='tag'&gt;focus&lt;/a&gt;
	      		        
	        &lt;a href='https://www.diigo.com/user/eapen7/concentration' rel='tag'&gt;concentration&lt;/a&gt;
	      	
		&lt;/p&gt;
		
      </description>	  
      <pubDate>Fri Jun 14 18:06:14 +0000 2013</pubDate>
	  <lastBuildDate>Fri Jun 14 18:06:14 +0000 2013</lastBuildDate>
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      <title>Pydoop: Writing Hadoop Programs in Python | Dr Dobb's</title>
      <link>http://www.drdobbs.com/database/pydoop-writing-hadoop-programs-in-python/240156473</link>
      <description>
      	&lt;p&gt;&lt;/p&gt;
		
		
		
		&lt;p class=&quot;diigo-tags&quot;&gt;&lt;strong&gt;Tags:&lt;/strong&gt;
				        
	        &lt;a href='https://www.diigo.com/user/eapen7/hadoop' rel='tag'&gt;hadoop&lt;/a&gt;
	      		        
	        &lt;a href='https://www.diigo.com/user/eapen7/programs' rel='tag'&gt;programs&lt;/a&gt;
	      		        
	        &lt;a href='https://www.diigo.com/user/eapen7/python' rel='tag'&gt;python&lt;/a&gt;
	      	
		&lt;/p&gt;
		
      </description>	  
      <pubDate>Wed Jun 12 09:17:51 +0000 2013</pubDate>
	  <lastBuildDate>Wed Jun 12 09:17:51 +0000 2013</lastBuildDate>
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    <item>
      <title>Linux Netcat command - The swiss army knife of networking - MyLinuxBook | MyLinuxBook</title>
      <link>http://mylinuxbook.com/linux-netcat-command/</link>
      <description>
      	&lt;p&gt;&lt;/p&gt;
		
		
		
		&lt;p class=&quot;diigo-tags&quot;&gt;&lt;strong&gt;Tags:&lt;/strong&gt;
				        
	        &lt;a href='https://www.diigo.com/user/eapen7/linux' rel='tag'&gt;linux&lt;/a&gt;
	      		        
	        &lt;a href='https://www.diigo.com/user/eapen7/netcat' rel='tag'&gt;netcat&lt;/a&gt;
	      		        
	        &lt;a href='https://www.diigo.com/user/eapen7/command' rel='tag'&gt;command&lt;/a&gt;
	      		        
	        &lt;a href='https://www.diigo.com/user/eapen7/tools' rel='tag'&gt;tools&lt;/a&gt;
	      		        
	        &lt;a href='https://www.diigo.com/user/eapen7/networking' rel='tag'&gt;networking&lt;/a&gt;
	      		        
	        &lt;a href='https://www.diigo.com/user/eapen7/nc' rel='tag'&gt;nc&lt;/a&gt;
	      		        
	        &lt;a href='https://www.diigo.com/user/eapen7/network' rel='tag'&gt;network&lt;/a&gt;
	      		        
	        &lt;a href='https://www.diigo.com/user/eapen7/shell' rel='tag'&gt;shell&lt;/a&gt;
	      	
		&lt;/p&gt;
		
      </description>	  
      <pubDate>Sun May 26 18:46:31 +0000 2013</pubDate>
	  <lastBuildDate>Sun May 26 18:46:31 +0000 2013</lastBuildDate>
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    <item>
      <title>11 Things I Wish I Knew About Django Development Before I Started My Company: — CS + Math — Medium</title>
      <link>https://medium.com/cs-math/f29f6080c131</link>
      <description>
      	&lt;p&gt;&lt;/p&gt;
		
		
		
		&lt;p class=&quot;diigo-tags&quot;&gt;&lt;strong&gt;Tags:&lt;/strong&gt;
				        
	        &lt;a href='https://www.diigo.com/user/eapen7/django' rel='tag'&gt;django&lt;/a&gt;
	      		        
	        &lt;a href='https://www.diigo.com/user/eapen7/python' rel='tag'&gt;python&lt;/a&gt;
	      		        
	        &lt;a href='https://www.diigo.com/user/eapen7/Gunicorn' rel='tag'&gt;Gunicorn&lt;/a&gt;
	      		        
	        &lt;a href='https://www.diigo.com/user/eapen7/development' rel='tag'&gt;development&lt;/a&gt;
	      		        
	        &lt;a href='https://www.diigo.com/user/eapen7/programming' rel='tag'&gt;programming&lt;/a&gt;
	      		        
	        &lt;a href='https://www.diigo.com/user/eapen7/redis' rel='tag'&gt;redis&lt;/a&gt;
	      		        
	        &lt;a href='https://www.diigo.com/user/eapen7/celery' rel='tag'&gt;celery&lt;/a&gt;
	      	
		&lt;/p&gt;
		
      </description>	  
      <pubDate>Sun May 26 17:47:38 +0000 2013</pubDate>
	  <lastBuildDate>Sun May 26 17:47:38 +0000 2013</lastBuildDate>
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      <title>Designing a RESTful API with Python and Flask - miguelgrinberg.com</title>
      <link>http://blog.miguelgrinberg.com/post/designing-a-restful-api-with-python-and-flask</link>
      <description>
      	&lt;p&gt;&lt;/p&gt;
		
		
		
		&lt;p class=&quot;diigo-tags&quot;&gt;&lt;strong&gt;Tags:&lt;/strong&gt;
				        
	        &lt;a href='https://www.diigo.com/user/eapen7/restful' rel='tag'&gt;restful&lt;/a&gt;
	      		        
	        &lt;a href='https://www.diigo.com/user/eapen7/api' rel='tag'&gt;api&lt;/a&gt;
	      		        
	        &lt;a href='https://www.diigo.com/user/eapen7/python' rel='tag'&gt;python&lt;/a&gt;
	      		        
	        &lt;a href='https://www.diigo.com/user/eapen7/flask' rel='tag'&gt;flask&lt;/a&gt;
	      	
		&lt;/p&gt;
		
      </description>	  
      <pubDate>Sat May 25 23:31:26 +0000 2013</pubDate>
	  <lastBuildDate>Sat May 25 23:31:26 +0000 2013</lastBuildDate>
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    <item>
      <title>Easily Remove Image Backgrounds Online - Clipping Magic</title>
      <link>http://clippingmagic.com</link>
      <description>
      	&lt;p&gt;&lt;/p&gt;
		
		
		
		&lt;p class=&quot;diigo-tags&quot;&gt;&lt;strong&gt;Tags:&lt;/strong&gt;
				        
	        &lt;a href='https://www.diigo.com/user/eapen7/background' rel='tag'&gt;background&lt;/a&gt;
	      		        
	        &lt;a href='https://www.diigo.com/user/eapen7/Image' rel='tag'&gt;Image&lt;/a&gt;
	      		        
	        &lt;a href='https://www.diigo.com/user/eapen7/Tools' rel='tag'&gt;Tools&lt;/a&gt;
	      		        
	        &lt;a href='https://www.diigo.com/user/eapen7/Online' rel='tag'&gt;Online&lt;/a&gt;
	      	
		&lt;/p&gt;
		
      </description>	  
      <pubDate>Sun May 19 23:18:19 +0000 2013</pubDate>
	  <lastBuildDate>Sun May 19 23:18:19 +0000 2013</lastBuildDate>
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    <item>
      <title>Big-O Algorithm Complexity Cheat Sheet</title>
      <link>http://bigocheatsheet.com/?utm_source=hackernewsletter&amp;utm_medium=email</link>
      <description>
      	&lt;p&gt;&lt;/p&gt;
		
		
		
		&lt;p class=&quot;diigo-tags&quot;&gt;&lt;strong&gt;Tags:&lt;/strong&gt;
				        
	        &lt;a href='https://www.diigo.com/user/eapen7/algorithm' rel='tag'&gt;algorithm&lt;/a&gt;
	      		        
	        &lt;a href='https://www.diigo.com/user/eapen7/complexity' rel='tag'&gt;complexity&lt;/a&gt;
	      		        
	        &lt;a href='https://www.diigo.com/user/eapen7/cheat' rel='tag'&gt;cheat&lt;/a&gt;
	      		        
	        &lt;a href='https://www.diigo.com/user/eapen7/sheet' rel='tag'&gt;sheet&lt;/a&gt;
	      	
		&lt;/p&gt;
		
      </description>	  
      <pubDate>Sun May 19 20:10:11 +0000 2013</pubDate>
	  <lastBuildDate>Sun May 19 20:10:11 +0000 2013</lastBuildDate>
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      <title>What Career Should I Choose? - Rasmussen College</title>
      <link>http://www.rasmussen.edu/resources/what-career-should-i-choose/</link>
      <description>
      	&lt;p&gt;&lt;/p&gt;
		
		
		
		&lt;p class=&quot;diigo-tags&quot;&gt;&lt;strong&gt;Tags:&lt;/strong&gt;
				        
	        &lt;a href='https://www.diigo.com/user/eapen7/career' rel='tag'&gt;career&lt;/a&gt;
	      	
		&lt;/p&gt;
		
      </description>	  
      <pubDate>Sun May 19 07:02:10 +0000 2013</pubDate>
	  <lastBuildDate>Sun May 19 07:02:10 +0000 2013</lastBuildDate>
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      <title>My Interview Questions for Potential Employers</title>
      <link>http://www.runtime-era.com/2013/03/my-interview-questions-for-potential.html?utm_source=hackernewsletter&amp;utm_medium=email</link>
      <description>
      	&lt;p&gt;&lt;/p&gt;
		
		
		
		&lt;p class=&quot;diigo-tags&quot;&gt;&lt;strong&gt;Tags:&lt;/strong&gt;
				        
	        &lt;a href='https://www.diigo.com/user/eapen7/interview' rel='tag'&gt;interview&lt;/a&gt;
	      		        
	        &lt;a href='https://www.diigo.com/user/eapen7/questions' rel='tag'&gt;questions&lt;/a&gt;
	      	
		&lt;/p&gt;
		
      </description>	  
      <pubDate>Sun May 19 03:18:00 +0000 2013</pubDate>
	  <lastBuildDate>Sun May 19 03:18:00 +0000 2013</lastBuildDate>
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    <item>
      <title>A standing desk for $22</title>
      <link>http://iamnotaprogrammer.com/Ikea-Standing-desk-for-22-dollars.html?utm_source=feedly</link>
      <description>
      	&lt;p&gt;&lt;/p&gt;
		
		
		
		&lt;p class=&quot;diigo-tags&quot;&gt;&lt;strong&gt;Tags:&lt;/strong&gt;
				        
	        &lt;a href='https://www.diigo.com/user/eapen7/standing' rel='tag'&gt;standing&lt;/a&gt;
	      		        
	        &lt;a href='https://www.diigo.com/user/eapen7/desk' rel='tag'&gt;desk&lt;/a&gt;
	      	
		&lt;/p&gt;
		
      </description>	  
      <pubDate>Sat May 18 17:03:59 +0000 2013</pubDate>
	  <lastBuildDate>Sat May 18 17:03:59 +0000 2013</lastBuildDate>
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    <item>
      <title>Signs that you're a bad programmer - Software Engineering Tips</title>
      <link>http://www.yacoset.com/Home/signs-that-you-re-a-bad-programmer?buffer_share=5b757</link>
      <description>
      	&lt;p&gt;&lt;/p&gt;
		
		
		
		&lt;p class=&quot;diigo-tags&quot;&gt;&lt;strong&gt;Tags:&lt;/strong&gt;
				        
	        &lt;a href='https://www.diigo.com/user/eapen7/signs' rel='tag'&gt;signs&lt;/a&gt;
	      		        
	        &lt;a href='https://www.diigo.com/user/eapen7/programmer' rel='tag'&gt;programmer&lt;/a&gt;
	      		        
	        &lt;a href='https://www.diigo.com/user/eapen7/software' rel='tag'&gt;software&lt;/a&gt;
	      		        
	        &lt;a href='https://www.diigo.com/user/eapen7/tips' rel='tag'&gt;tips&lt;/a&gt;
	      		        
	        &lt;a href='https://www.diigo.com/user/eapen7/engineering' rel='tag'&gt;engineering&lt;/a&gt;
	      		        
	        &lt;a href='https://www.diigo.com/user/eapen7/software+engineering' rel='tag'&gt;software engineering&lt;/a&gt;
	      	
		&lt;/p&gt;
		
      </description>	  
      <pubDate>Thu May 09 18:51:38 +0000 2013</pubDate>
	  <lastBuildDate>Thu May 09 18:51:38 +0000 2013</lastBuildDate>
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      <title>An Entire Human Life Cycle As Dictated By Quora’s Recommendation Algorithm | The Awl</title>
      <link>http://www.theawl.com/2013/05/an-entire-human-life-cycle-as-dictated-by-quoras-recommendation-algorithm</link>
      <description>
      	&lt;p&gt;&lt;/p&gt;
		
		
		
		&lt;p class=&quot;diigo-tags&quot;&gt;&lt;strong&gt;Tags:&lt;/strong&gt;
				        
	        &lt;a href='https://www.diigo.com/user/eapen7/human' rel='tag'&gt;human&lt;/a&gt;
	      		        
	        &lt;a href='https://www.diigo.com/user/eapen7/life' rel='tag'&gt;life&lt;/a&gt;
	      		        
	        &lt;a href='https://www.diigo.com/user/eapen7/algorithm' rel='tag'&gt;algorithm&lt;/a&gt;
	      		        
	        &lt;a href='https://www.diigo.com/user/eapen7/recommendation' rel='tag'&gt;recommendation&lt;/a&gt;
	      		        
	        &lt;a href='https://www.diigo.com/user/eapen7/quora' rel='tag'&gt;quora&lt;/a&gt;
	      	
		&lt;/p&gt;
		
      </description>	  
      <pubDate>Thu May 09 18:51:19 +0000 2013</pubDate>
	  <lastBuildDate>Thu May 09 18:51:19 +0000 2013</lastBuildDate>
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      <title>Being Smart - Throwww.com</title>
      <link>http://throwww.com/a/1h6</link>
      <description>
      	&lt;p&gt;&quot;A high school student posted the following question to Reddit. The answer he received was so good, I felt compelled to save in case our own son ever encountered similar difficulties.

Question:

*I'm a senior in high school this year, and will be graduating come June. I have had all A's throughout high school except for last year when I got my first B. If it weren't for that B, I would have been valedictorian.

I like to think that I deserved to be valedictorian; that I am truly the smartest in my class. However, this past year has shown me that I'm really not that intelligent, and that there are many others who are much smarter than I. Also, I'm kind of an asshole about how smart I am, at least to myself. I'm always telling myself that I was cheated out of an A, but deep down I know I deserved that B. Not only that, but I should have gotten B's in several other classes as well, but I somehow managed not to get them.

Recently I took the SATs as well, which I got a 1900 on. I figured I was just being lazy, and could have gotten a much better score if I tried. So after taking them a second time, I thought I did much better, but I only got roughly 40 more points than last time. When I was younger I always believed I could get into MIT, but it has become painfully clear that I stand next to no chance of getting in. I now realize that I am probably going to go a lame local college and stick with my family. Ugh.

Oh, and to top it all off, the only hobbies I have are videogames and Reddit. No extracurriculars at all. Hell, I don't even have my license yet. But none of this has to do with my intelligence; I'm just rambling.*

Answer:

Alright, sorry about the delay. I was too busy celebrating the New Year. ;) I hope you're still checking in on this account.

Anyway, I think I have a bit of a unique perspective. I've seen MIT admissions from the perspective of the applicant, a student, a teacher, and now as an alumnus conducting interviews of prospective students. The fact that you mentioned MIT specifically really made me feel like I should take the time to produce a good response!

I wanted to start by writing out standard admissions advice (e.g. no one thing like SAT scores will keep you from being admitted, etc.). While all that is true, the problem you're dealing with is so much bigger than that. The problem you're coming up against is one I've seen so many of my fellow students encounter. If I could set up a wavy-fade flashback, I'd show you my freshman year.

I moved into one of the dorms at MIT thinking I was hot shit. I had, after all, just gotten into MIT. And beyond that, I had tested out of the freshman calculus and physics classes, meaning that I was able to start math &quot;a year&quot; ahead in differential equations and start with the advanced version of the physics 2 class we have. Registration went by easy enough and I was pleased with my decisions.

Term rolled in and I was getting crushed. I wasn't the greatest student in high school, and whenever I got poor grades I would explain them away by saying I just didn't care or I was too busy or too unmotivated or (more often than not) just cared about something else. It didn't help that I had good test performance which fed my ego and let me think I was smarter than everyone else, just relatively unmotivated. I had grossly underestimated MIT, and was left feeling so dumb.

I had the fortune of living next to a bright guy, R. R. was an advanced student, to say the least. He was a sophomore, but was already taking the most advanced graduate math classes. He came into MIT and tested out of calculus, multivariable calculus, differential equations, linear algebra, real analysis (notoriously the most difficult math class at MIT), and a slew of other math courses. And to top it all off, he was attractive, engaging, sociable, and generally had no faults that would make him mortal.

I suffered through half a semester of differential equations before my pride let me go to R. for help. And sure enough, he took my textbook for a night to review the material (he couldn't remember it all from third grade), and then he walked me through my difficulties and coached me. I ended up pulling a B+ at the end of a semester and avoiding that train wreck. The thing is, nothing he taught me involved raw brainpower. The more I learned the more I realized that the bulk of his intelligence and his performance just came from study and practice, and that the had amassed a large artillery of intellectual and mathematical tools that he had learned and trained to call upon. He showed me some of those tools, but what I really ended up learning was how to go about finding, building, and refining my own set of cognitive tools. I admired R., and I looked up to him, and while I doubt I will ever compete with his genius, I recognize that it's because of a relative lack of my conviction and an excess of his, not some accident of genetics. It's easy to trick ourselves into thinking that &quot;being smart&quot; is what determines our performance. In so many ways, it's the easiest possible explanation because it demands so little of us and immediately explains away our failings. You are facing this tension without recognizing it. You are blaming your intelligence in the first two paragraphs but you undermine yourself by saying you received good grades you didn't deserve. You recognize your lack of motivation as a factor in your lack of extracurricular activities but not in your SAT scores (fun fact: the variable that correlates most strongly to SAT performance is hours of studying for the SATs). Your very last statement could just as well apply to your entire post:

But none of this has to do with my intelligence; I'm just rambling.

You got A's because you studied or because the classes were easy. You got a B probably because you were so used to understanding things that you didn't know how to deal with something that didn't come so easily. I'm guessing that early on you built the cognitive and intellectual tools to rapidly acquire and process new information, but that you've relied on those tools so much you never really developed a good set of tools for what to do when those failed. This is what happened to me, but I didn't figure it out until after I got crushed by my first semester of college. I need to ask you, has anyone ever taken the time to teach you how to study? And separately, have you learned how to study on your own in the absence of a teacher or curriculum? These are the most valuable tools you can acquire because they are the tools you will use to develop more powerful and more insightful tools. It only snowballs from there until you become like R.

MIT has an almost 97% graduation rate. That means that most of the people who get in, get through. Do you know what separates the 3% that didn't from the rest that do? I do. I've seen it so many times, and it almost happened to me. Very few people get through four years of MIT with such piss-poor performance that they don't graduate. In fact, I can't think of a single one off the top of my head. People fail to graduate from MIT because they come in, encounter problems that are harder than anything they've had to do before, and not knowing how to look for help or how to go about wrestling those problems, burn out. The students that are successful look at that challenge, wrestle with feelings of inadequacy and stupidity, and begin to take steps hiking that mountain, knowing that bruised pride is a small price to pay for getting to see the view from the top. They ask for help, they acknowledge their inadequacies. They don't blame their lack of intelligence, they blame their lack of motivation. I was lucky that I had someone to show me how to look for that motivation, and I'm hoping that I can be that person for you in some small capacity over the Internet. I was able to recover from my freshman year and go on to be very successful in my studies, even serving as a TA for my fellow students. When I was a senior, I would sit down with the freshmen in my dorm and show them the same things that had been shown to me, and I would watch them struggle with the same feelings, and overcome them. By the time I graduated MIT, I had become the person I looked up to when I first got in.

You're so young, way too young to be worried about not being smart enough. Until you're so old you start going senile, you have the opportunity to make yourself &quot;smarter.&quot; And I put that in quotes because &quot;smart&quot; is really just a way of saying &quot;has invested so much time and sweat that you make it look effortless.&quot; You feel like you are burnt out or that you are on the verge of burning out, but in reality you are on the verge of deciding whether or not you will burn out. It's scary to acknowledge that it's a decision because it puts the onus on you to to do something about it, but it's empowering because it means there is something you can do about it. So do it.

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	        &lt;a href='https://www.diigo.com/user/eapen7/medicine' rel='tag'&gt;medicine&lt;/a&gt;
	      		        
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      </description>	  
      <pubDate>Tue Apr 23 02:35:45 +0000 2013</pubDate>
	  <lastBuildDate>Tue Apr 23 02:35:45 +0000 2013</lastBuildDate>
    </item>
    
    <item>
      <title>Employee Stock Purchase Plan (ESPP) Is A Fantastic Deal</title>
      <link>http://thefinancebuff.com/employee-stock-purchase-plan-espp-is.html</link>
      <description>
      	&lt;p&gt;&quot;If you work for a publicly traded company which offers an Employee Stock Purchase Plan (ESPP), you’ve got yourself a fantastic deal. An ESPP typically works this way:
You contribute to the ESPP from 1% to 10% of your salary. The contribution is taken out from your paycheck. This is calculated on pre-tax salary but taken after tax (unlike 401k, no tax deduction on ESPP contributions).
At the end of a “purchase period,” usually every 6 months, the employer will purchase company stock for you using your contributions during the purchase period. You get a 15% discount on the purchase price. The employer takes the price of the company stock at the beginning of the purchase period and the price at the end of the purchase period, whichever is lower, and THEN gives you a 15% discount from that price.
You can sell the purchased stock right away or hold on to them longer for preferential tax treatment.
Your plan may work a little differently. Check with your employer for details.
The 15% discount is a big deal. It turns out to be a 90% annualized return or higher.
How so? Suppose the stock was $22 at the beginning of the purchase period and it went down to $20 at the end of the period 6 months later. Here’s what happens:
Because the stock went down, your purchase price will be 15% discount to the price at the end of the purchase period, which is $20 * 85% = $17/share.
Suppose you contributed $255 per paycheck twice a month. Over a 6-month period you contributed $255 * 12 = $3,060.
You will receive $3,060 / $17 = 180 shares. You sell 180 shares at $20/share and receive $20 * 180 = $3,600, earning a profit of $3,600 – $3,060 = $540.
Percentage-wise your return is $540 / $3,060 = 17.65%. But, because your $3,060 was contributed over a 6-month period, the first contribution was tied up for 6 months, and the last contribution was tied up for only a few days. On average your money is only tied up for 3 months. So, earning 17.65% risk free for tying up your money for 3 months is equivalent to earning (1 + 17.65%) ^ 4 – 1 = 91.6% a year.
90%+ a year return is fantastic, isn’t it? That’s when the employer’s stock went down. Had the stock gone up from $20 at the beginning of the purchase period to $22 at the end, your return will be even higher at 180%!
[Update on May 30, 2008]: I created an online spreadsheet on Zoho. You can plug in your own numbers and calculate the annualized return. The annualized return is what a savings account will have to offer in order to match the same return from an ESPP. Even at 5% discount without lookback, an ESPP is still equivalent to a 20% APY savings account.
What should you do if your employer offers an ESPP? Participate to the MAXIMUM allowed as long as you can sell the stock soon after the stock is purchased.
Should you hold the purchased stock longer for preferential tax treatment? No! On the typical 6-month purchase program, you will have to hold on to the stock for additional 18 months in order to get preferential tax treatment. If everything goes well, you can reduce the tax on your profit from say 35% to 15%. In the above example, that will save you $540 * 20% = $108. But if your employer’s stock goes down 3% during the 18 months you are holding the stock, because your entire $3,600 is at stake, the tax benefit will be completely wiped out. You already earned 90% annualized return on the purchase. Holding on for another 18 months and hoping the stock won’t go down 3% is really penny wise pound foolish.&quot;&lt;/p&gt;
		
		
		
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      </description>	  
      <pubDate>Fri Apr 05 18:59:08 +0000 2013</pubDate>
	  <lastBuildDate>Fri Apr 05 18:59:08 +0000 2013</lastBuildDate>
    </item>
    
    <item>
      <title>http://mmb.pcb.ub.es/~carlesfe/unix/tricks.txt</title>
      <link>http://mmb.pcb.ub.es/~carlesfe/unix/tricks.txt</link>
      <description>
      	&lt;p&gt;&lt;/p&gt;
		
		
		
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      <pubDate>Tue Apr 02 06:30:34 +0000 2013</pubDate>
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      <title>Flat UI</title>
      <link>http://designmodo.com/demo/flat-ui/</link>
      <description>
      	&lt;p&gt;&lt;/p&gt;
		
		
		
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      <pubDate>Wed Mar 13 22:41:16 +0000 2013</pubDate>
	  <lastBuildDate>Wed Mar 13 22:41:16 +0000 2013</lastBuildDate>
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      <title>Breaking down Amazon’s mega dropdown - Ben Kamens</title>
      <link>http://bjk5.com/post/44698559168/breaking-down-amazons-mega-dropdown</link>
      <description>
      	&lt;p&gt;&lt;/p&gt;
		
		
		
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      <pubDate>Tue Mar 12 17:26:51 +0000 2013</pubDate>
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