Monthly Archives: October 2007


I just finished re-reading a fascinating book called Fatherland by Robert Harris. This isn’t a book review, exactly, since I will relate it to personal finance… eventually. The rather grim image here should have grabbed your attention. It is, of course, the swastika. The swastika was an ancient Sanskrit symbol, and is even today used in Hindu and Buddhist cultures as a peaceful religious symbol. The Tsarina Alexandra (wife of the last Tsar of Russia, Nicholas II) was fond of scribbling the swastika over her diary and notebooks – I’ve seen images of it. The fact that a monarch of Russia was scribbling the symbol of the German Reich, which would do so much harm to Russia a mere 20 years later, is unsettling. To most people, the symbol has become the epitome of pure evil.

To briefly summarize the book, it shows an alternate world where Hitler succeeded in conquering and holding Europe. He is still alive in the late 1960s, Fuhrer of the European Reich. He has subjugated most of western Russia, but a 20-year guerrilla war by the Soviets, backed by the United States, continues to drain resources. The European Union, much like the old Warsaw Pact, is “technically” independent but in reality part of the Reich. The US has defeated Japan, and is at the time of the book – which seems to be approximately the late 1960s – engaged in a cold war with Germany, much as the US and USSR were in reality. The book revolves around a murder investigation of a high Nazi official right before the visit of a historic summit between the US president, Joseph Kennedy (father of John!) and Adolf Hitler, to try to negotiate an end to the Cold War.

The book is thought-provoking on many levels, and I’ll just focus on one today. If you have read Orwell’s 1984 you’re probably acquainted with the idea of a dystopia – a perfectly awful world, as opposed to the concept of utopia, a perfectly happy world. Unlike Orwell’s dystopian Britain, though, Harris’ Germany is also utopian. Germany has utilized slave labor (the Slavic nations, like Ukraine, Poland and Russia) to enrich itself wildly. Every Reich citizen is basically fat and happy. The state provides wonderful foods, museums, entertainment, sporting events and benefits. The only crime is to question this perfect happiness or to challenge the Fuehrer…or to inquire (as one detective does, with terrible results) “what happened to all of the Jews?”

So what are the parallels to today’s world? Are Americans (and the West in general) overlooking “the dust under the carpet” in their quest for material comfort? Is the future we are building in the West (not just in America) being built on the grief of others? Of course nothing as terrible as a fully-realized Holocaust has occurred, where an entire race of people has been systematically wiped out, as it has in the novel. Yet material comfort has its costs:

  • the proliferation of “stuff” has increased energy usage and drained resources around the globe, starting a climate crisis.
  • the widespread use of China as a manufacturing partner has enriched the Chinese communist regime greatly, allowing them to continue their human rights abuses unabated in the years since Tiananmen Square, one of the most awful things I’ve ever seen in my life.
  • the gap between the western world and the rest of the world in terms of wealth and health continues to widen, causing resentment and anger (justified or not, it exists) towards the west and its sole superpower, the US.

It’s really a fascinating question. You can feel the awful nature of existence in Orwell’s 1984, where one character infamously predicts: “If you want a picture of the future, imagine a boot stomping on a human face — forever.” Harris’ utopia is far prettier, for those who have survived, but the implication is clear – pleasure gained at the expense of others’ pain is no real pleasure. It is possible to feel overwhelmed by responsibility. In personal finance we worry about funding retirement. For the most part, none of us worry about having our hands cut off by roving marauders as in the Sudan, or being forced into a lifetime of sex slavery like women from Moldova or Russia (horrific article). Maybe you feel helpless about that. However, do you feel helpless or is the real sacrifice to prevent it simply too terrible to think about? Would you be willing to pay $3000 for a basic laptop if it was built by workers in humane conditions and paid a fair wage? Would you pay triple what you pay today for coffee grown sustainably by fair wage farmers? Would you accept a ban on all imports from Eastern Europe if it stopped the sex trade? Would you pay $6 per gallon to embargo the Middle Eastern states? I wrestle with that question constantly. I don’t know the answer, honestly. If I look deep in my soul, the unfortunate answer is probably no – I would rather have my cheap stuff – if I am going to be honest.

It’s very hard to balance frugality and social responsibility. Often the socially responsible choice is less frugal, and worse, the socially responsible choice may have minimal positive impact. Sometimes the best you can do is avoid negative impact. It is important to remember, though, a famous Holocaust survivor’s words. This is a brilliant observation from the 1986 Nobel Peace Prize winner, Elie Wiesel: “The opposite of love is not hate, it’s indifference. ” A utopia based on our indifference to others’ suffering is no utopia at all.

public declaration and some news

Mike over at Four Pillars pointed out (quite correctly) that I haven’t actually made a public declaration myself. I didn’t want anything I said to give anyone any ideas, so I was holding off, but fair enough!

Mine is simple but difficult: always think positively.

I have struggled with this recently. I’ve been in what I call a blap period, struggling with a lot of minor problems. Nothing terrible, but a lot of small stuff adds up. I’ve been eating poorly and gained some weight. My exercise program is really hitting the skids. I’ve been tired a lot as my son’s been teething and sleeping very poorly for several weeks, keeping me from getting a solid night’s sleep for a while. My commute isn’t bad, but it’s long and it’s taking hours out of my day. My client is a nice place to work but the actual job duties are boring. Cold weather is arriving and I’m not a cold weather fan, at all.

So I have been using my Vulcanized Rubber Happy Thoughts Maker and reading (and re-reading) one of my favorite inspirational books, Think and Grow Rich. You might think that’s just about money from first glance, but it’s not. Napoleon Hill has a lot to say about attitude and desire and focus, and I find it very uplifting.

My goal, therefore, is to keep this up and not let small things get me down! We found out recently that baby #2 is on the way so we’ve got all the happiness (but nervousness and stress) that come with thinking another Little Buddy (or Buddette) is fast approaching. The challenges will double but so will the baby energy – and that’s a good thing, and worth staying positive about.  I will avoid moping, or dwelling on negatives, and try to maintain a positive outlook – because life is generally pretty good any way you look at it, but at a minimum, it’s the only one we have.  The only thing we truly control in this life are our own thoughts, and I will make sure I control mine.

(the picture is my feet, standing on the Tsar’s mark at the entrance to Red Square. The point? Wherever you are, that’s where you are – that’s always been a strangely deep thought for me).

build your financial horcrux

In J. K. Rowling’s Harry Potter books a Horcrux is described as a “receptacle in which a Dark wizard has hidden a part of his soul for the purposes of attaining immortality.” With part of a wizard’s soul stored away like this, as long as the Horcrux is intact the wizard will remain alive, and therefore is immortal. Even if the wizard’s body is “killed”, part of his soul will remain preserved inside the Horcrux. In other words, an evil wizard squirrels away bits of his soul in various trinkets so he can’t be killed totally. Nice trick.

Here is my personal finance Horcrux: keep your “financial soul” hidden away in several Horcruxes, so that you can never be completely “killed.” A good example of this was the recent collapse of NetBank. Individuals (and companies) who kept their money in NetBank had their deposits insured up to a limit of $100,000 by the FDIC. While I doubt many people kept more than $100,000 in NetBank, I am sure there were a few. By keeping too much of their monetary “soul” in one Horcrux, they are exposed unnecessarily to risk.

Another example of this would to be to diversify your investments. Make sure that you don’t have too much stashed away in one Horcrux. Make sure you don’t have too much stashed in one stock – or make sure you don’t have too much put away in US stocks versus overseas stocks, bonds, etc. If you have every single investment in your account invested in US equities, your “financial soul” is at risk of being snuffed faster than you can say “Hufflepuff.”

I have written elsewhere about simplifying and consolidating your accounts but I would never advise carrying this to its penultimate conclusion – a single institution holding all of your financial life. It is possible. I could consolidate every single bit of money in my life in Bank of America for example: cash, securities, IRAs, mortgage and credit cards. The only thing I could not easily consolidate would be my 401(k).

So if you have plans to conquer the world, and you’re trying to avoid meddling wizards seeking to overthrow you, make sure you have your (financial) Horcruxes safely stashed away!

Photo credit: by Jersey JJ

public declaration

Based on my earlier post, I would like to start a new meme: I commit publicy to….

If you haven’t participated in one before, you basically post on it, or leave a comment on it, then “tag” someone else (ask them to answer it). So here goes:

What one goal have you always had privately that you would be willing to commit to publicly – right now? Post it and give a public commitment to stick to it!

It can be as simple as “waking up at 6 every day” or as ambitious as “be financially free in 10 years” or as silly as “I will stop watching American Idol.”

Give it some thought, and let ‘er rip! Put it on your own blog and link back here, or just comment on this post, and I’ll occasionally post summaries from everyone’s site. Email me if you want to make sure I add you to the list. That’s going to ensure that your commitment will be seen by more and more people.

We will see where this goes…I’ll start by tagging:

Quest for Four Pillars
Money Socket
The Money Gardener
I’ve Paid For This Twice Already…
Ask Dong
plonkee money
How I Will Be Rich
Cash Money Life
Lazy Man and Money
My Two Dollars
Saving for a Home of My Own
The Digerati Life
Millionaire Mommy Next Door
A Penny Closer
The Finance Castle
The Financial Blogger
The Wealthy Canadian
Drinkin’ Guinness in the 416
Rather Be Shopping

And if you aren’t on the list but read this – consider yourself tagged 🙂

Image thanks to Our Butterflies

my hump

I drive these brothers crazy,
I do it on the daily,
They treat me really nicely,
They buy me all these ices.
Dolce & Gabbana,
Fendi and NaDonna
Karan, they be sharin’
All their money got me wearin’ fly
Brother I ain’t askin,
They say they love my ass ‘n,
Seven Jeans, True Religion’s,
I say no, but they keep givin’
So I keep on takin’
And no I ain’t taken
We can keep on datin’
I keep on demonstrating!

from “My Hump” by the Black-Eyed Peas

First of all, how can you not read that without your heart soaring? And they say poetry is dead. Bah, I say! Anyone who can rhyme “nicely” and “ices” is Shakespeare reborn.

All joking aside, that’s a little bit of cultural snobbery on my part. It’s a catchy song if you haven’t ever heard it. I would be lying if I said I didn’t occasionally crank up Z100 when “Lean Back” or “Golddigger” plays. A lot of the music I like is hardly lyrical, either, although I’d argue that “Disintegration” by the Cure is a wee bit more thougtful and the phrasing a bit more lyrical. Then again “Friday I’m In Love” isn’t exactly Yeats reborn, either. But that’s not my point.

So what is the point of quoting Fergie, you may ask? I heard this song and suddenly wondered if the mentions of Dolce & Gabbana, Fendi and so on is just Fergie’s “shout-out” to brands she likes or whether it’s something more insidious – paid product placement? Product placement is simply paying for placing a product in some sort of media which is not, strictly speaking, an advertisement. Having ET eat Reese’s Pieces was product placement. Paying an athlete to keep a bottle of Gatorade near them at a press conference is product placement. It is getting more and more common, and I wonder if this song is simply another method.

This article from the Washington Post two years ago seems to predict this will happen:

[Promoter Tony] Rome hooks up rap stars, R&B singers and urban comedians with major corporations that want to reach their fans. The ideal relationship, says Rome, who founded Maven Strategies in 1996, would have an artist write a brand name into a song, feature the brand in a music video and partner with the brand in other promotions, getting paid by the brand’s owner along the way.

In a way, I don’t really mind this strategy.
I imagine some people would prefer to know if it’s a paid endorsement or not. I for example, am pretty obviously allowing Google Ads to show products on my site. If I worked the ads in as links to my posts, would that be unethical? If I told you how much I loved the book Your Money or Your Life, would it surprise you that I have an affiliate link to amazon to purchase it? If not, I doubt you would care much about the mention of True Religion jeans in a song about butts. Or at least, you shouldn’t – because it’s more or less the same thing.

In another way, though, I wonder about the monetization of our attention. Ads are omnipresent, and more and more you may not even realize what is being forced on you. A commercial is blatant. It almost screams “this is an attempt to persuade you.” That is understandable. A blog using referral links is understandable. But what happens – and this day is coming – when a doctor pushes Triflictotoripram as a good cure for heartburn, when he knows that actually drinking water instead of cola would be a better cure? Would it bother you then that the doctor got a referral fee to push Triflictotoripram? What if groups could put product placements in school textbooks? Or have jingles for Dora the Explorer piped into maternal delivery rooms? Where will it end?

Here are a few suggestions to fight the adplosion. Some are serious, some are tongue-in-cheek. I’ll leave it up to you to decide which is which.

  1. Turn off the TV. By turning it off, I mean throwing it out the window (make sure nobody is walking below the window first).
  2. Only listen to instrumental music. Even that’s not safe, though. Listening to Beethoven’s Fifth will probably just make you want to rush out and buy a copy of Saturday Night Fever.
  3. Never buy any clothes with any identifying logos.
  4. Extend this to everything in your life: pour sodas into a cup. Rip the dealer logo off your car. Look around your house and do a logo purge.
  5. Don’t watch any movies or read any books that mention any product by name. Narrows it down a bit, doesn’t it?
  6. Never look up while driving to avoid billboards.
  7. If you happen to find yourself on a bus or subway, bring a good non-product placement book and keep your nose buried in it to avoid all of the ads all over the bus.
  8. Only watch movies from the 1960s. The only product placement there is the refreshingly light Kool Nicomegatine cigarette, so they are OK.
  9. Pack up 5000 cans of garbanzo beans, get a 30/30 shotgun, and move to a cabin in the wilds of Montana.
  10. Stop reading any blog or website with any form of advertising (I think this eliminates every website except this one. By that, I mean, too. I can’t exempt myself 🙂
  11. Sit in your room and listen to the Cure.

I want it. You buy it. Any questions?

Frequent commenter Ruth emailed me with this little gem:

I saw a tee shirt on a little girl this morning
1. I want it.
2. You buy it.
3. Any questions?

It was a pink shirt with sparkly sequins which made it even more obnoxious. What parent would buy such a shirt?

My first reaction was to hope that it was meant just the way it sounds – as a joke. My son (who is a reluctant napper) wears a t-shirt that says “Naps are the enemy.” It’s a joke. I put it in the same category as “I’m with Stupid” t-shirts. But part of me thinks that this message, humorous or not, is going to be repeated again and again around the child, to the child, and (because it’s funny) approvingly. I don’t want my son to think naps are a bad thing, and I don’t want this girl to think she gets anything she wants.

That t-shirt summarizes an awful lot of what is wrong with the debt/consumer society. Could you imagine what kind of values that little girl is going to have if she continually sees her parents whipping out the credit card to buy her every little toy (now) or shoes or makeup (later)? She’s going to be a financial wreck when she finally goes out on her own. The saddest thing is that her parents probably think they are being nice. There is a saying that “the road to hell is paved with good intentions.” If a parent thinks they are being nice to a child by giving in to their every desire – giving them a “perfect childhood” – they are laying the groundwork for the road to (financial) hell.

So what would you put on a t-shirt? Would you wear this one:

how to be rich
step 1: spend less than you earn
step 2: repeat step 1

It’s not funny, because I couldn’t think of anything clever, but give me some ideas – there has to be a cute or clever way to get this message across. “My piggy bank can kick your piggy bank’s a**?”

What’s the slogan for your t-shirt?


A woman walked up to a little old man rocking in a chair on his porch.
“I couldn’t help noticing how happy you look,” she said. “What’s your secret for a long happy life?”
“I smoke three packs of cigarettes a day,” he said. “I also drink a case of whiskey a week, eat fatty foods, and never exercise.”
“That’s amazing,” the woman said. “How old are you?’
“Twenty-six,” he said. (from

For the sake of argument, let’s say that habits fall into two general categories: good habits and bad habits. A good habit is flossing every day. A bad habit is smoking. Some habits might fall somewhere in between, or depend on frequency. Flossing every day is a good habit. Flossing once per month isn’t a bad habit, exactly, but it’s not strictly speaking a good habit either. Eating a huge overcooked steak once a year is not a terribly bad habit. Eating one for breakfast every day is.

But let’s stick with good habits and bad habits, because most people can tell the difference and don’t need more distinction than that. Most of them can then be thrown into another 3 categories:

  1. habits you should break – debt, looking down on things, negativism
  2. habits you should take – wake up early, play outside, etc from when you were a kid
  3. habits you should make – positivity, frugality, love

We’ll call that break, take and make.

In a sense, it is often a lot easier to identify a negative habit than a positive one. Overeating or smoking or playing too much Halo is usually a fairly easy pattern to spot. However, the habits that you need to break are often either very pleasurable (overeating for example), or arise from addiction (smoking), or are based on deeply ingrained behavors (negative thinking). So how do you go about modifying bad habits? What are the methods for eliminating them from your life?

  • Stop. Sometimes a bad habit just needs to cease. If you smoke, stop – get some nicotine gum instead. If you watch 6 hours of TV per day, disconnect your cable. If you gossip, turn the subject to sports or politics or movies. This method is hard, and frankly almost never works – but sometimes it’s worth a shot.
  • Modify. If you drink Coke, try switching to diet Coke, or diet Sprite, or ginger ale, or seltzericon – or cycle through them in that order. You do not have to immediately stop a habit. Take baby steps. If you don’t exercise, don’t imagine that you will run a marathon the week after you start taking a 20-minute walk; but DO imagine that you’ll take a 25 minute walk the next week, then a 45 minute walk, then a 20 minute jog and then – who knows? That marathon might not be so far away after all!
  • Inhibit. In another post I wrote about using a rubber band to help stop negative thoughts. You can use this extremely simple tool very effectively. The purpose is not to injure you or create a fear of an action, but merely to jolt your awareness. I think this is probably the easiest yet almost the most effective way to halt any bad habit. It is one of those exceptionally simple methods that most people scoff at until they try it. Give it a shot.
  • Journal. I have plenty of bad habits, but I have seldom seen one that can withstand a brutally honest journal. If your habit to break is sweets, keep an extremely detailed sweets journal. When, where, what, how many calories, why you ate it (sad? bored?) and almost inevitably you’ll notice a decrease. Writing things down will help solidify the habit in your mind, and make you think twice before engaging in it, knowing you’ll have to record that incident in your journal.

When you were a child, you woke up full of energy and excitement on Saturdays. The cartoons were on, it was the day you were allowed to eat Lucky Charms instead of something good for you, and you didn’t have to go to school. You didn’t know it at the time, but waking up early was a good habit. It kept you from wasting half the day sleeping, making it harder to fall asleep Saturday night. It meant that on your weekends you accomplished “maximum fun” and really squeezed as much into the day as you could. Where did that habit go? Some of it left because you got older… because work beat you down … because you just NEED that sleep. You don’t have to leave this good habit behind you in childhood, though. Reach back into your past and take back these good habits. Take back the habits of playtime, of reading, of avoiding things that didn’t directly contribute to your health and happiness. These are habits which are just day-to-day simple tasks that improve the quality of your life. Examples could include:

  • Making time for play
  • Learning about things because you’re curious
  • Questioning “the way it’s always been done”
  • Never learning to sit still

Here are the first steps to doing this:

  • Identify those habits:
  • Remember how they felt
  • Ask yourself if there’s any reason you couldn’t still do that
  • With a nod to Prince: act your shoe size, not your age

If you have seen the Secret, or read any one of a number of self-help books, you’ll realize that the power of positive thinking is a hot topic right now. It has been a hot topic for hundreds of years, in fact, and there’s a reason for it. It works. Having a mental habit like positive thinking is a snowball habit. The more you do it, the more powerful it becomes and makes it easier and easier to maintain as a habit. There are other key “make” habits like this:

  • Eating a healthy, natural diet
  • Spending time with family and friends by actually being there; no Blackberries, no agendas, and no pressure
  • Making time for meditation
  • Daydreaming
  • Being kind

So how do you make these habits? I’ll refer back again to the Secret, but it could just as easily come from the works of Benjamin Franklin or any self-help individual in-between. You can control your thoughts. There is very little else in this world that you can control the way you can control your thoughts. Use that power to your advantage. Tell your mind “this is a habit, this will be a ritual and we will keep it.” Imagine you have already been doing this habit for years. Imagine that it has made you happier, more fit, richer, calmer – whatever it is that you want. You really have to visualize it, write it down, draw it or otherwise make it a real image in your mind. You will be amazed at how quickly your mind adapts to a “new reality” once you order it to. A habit is not a set of chains or a gun pointed at your head. It is 100% the result of your mind, so only you – as the person in control – can change your mind and therefore the habit.

Setting public goals is an important part of maintaining your habits, and tomorrow I will be launching a meme or a viral concept or whatever you want to call it, with a twist, to help you set and keep your habits and goals. So stay tuned!

things I learned from my grandparents about money, part 2

In an earlier post, I covered some lessons I learned from my maternal grandparents. To continue, I am going to cover some of the lessons I learned from my father’s parents. They have both passed on, but I certainly have learned from some of what I perceive to be their mistakes and successes in planning my own financial life.

As I said in my earlier post, I realized a long time ago that it is very easy to pick out the flaws in other people’s philosophies or actions while failing to recognize them in your own thoughts and actions. However, I still find it a useful exercise to try to determine where people make good decisions and bad decisions. Even more important is trying to understand the ‘why’ behind those decisions.

My father’s parents (my grandparents, both now deceased) were never terribly frugal. My grandfather had a limited formal education. He fought in Europe – against Germans – in World War II, which must have been wrenching for someone from a Germanic culture like the Pennsylvania Dutch. He went on to work as a sign painter. My grandmother was a kindergarten teacher. They were never rich by any stretch of the imagination but from spending time with them in my youth I never perceived them as poor, either. They owned a home in Tennessee and lived a lifestyle that would not classify them as anything but a typical middle class American family – cars, a yard, two children, a TV, meat and potatoes.

Here are some of their views towards money that I think are interesting, both good and bad, and my take on them.

  • Traveling, good and bad. My grandparents loved to travel. Their favorite destination was to return to Pennsylvania for my grandfather’s Army reunions. He remained extremely close to his fellow soldiers his whole life, although he seldom spoke about the war. They traveled frequently throughout their lives, and often seemed to spend more on their vacations than most people would think prudent. I have some mixed feelings about this, because the point of life is to live it, of course. If traveling is an important aspect of your life, then it may not always be an indulgence.
  • Moving to Florida, bad. When I was approximately 11 years old, my grandparents very suddenly announced to the family that they were moving to Florida. I am not sure of the details of the adults’ conversations at the time but my impression was always that this took everyone completely by surprise and I think they had already sold their house when they announced this move. They bought a condominium and moved a long way away from my father and his brother, as well as most of their friends and family, with the exception of the few who lived in Florida who had persuaded them to move. This meant that very abruptly I went from spending 50% of my grandparent-visiting-time with both sets of grandparents (since they all lived in the same town) I suddenly saw my maternal grandparents about 20 times for every one time I saw my paternal grandparents. My maternal grandparents were a few hours’ drive away, while my paternal grandparents were a plane flight away.
  • Entrepreneurial approach, good. Almost all of my extended family is made up of ‘good company men.’ I do not mean to say this in a disparaging way. My grandparents on both sides were children of people who worked the land and saw careers in education or government service as large steps up in life. Few of them, coming from farming backgrounds, ever expressed much interest in ‘going it alone’ as an entrepreneur. They might have had a warped view of the risks and rewards, since a farmer’s work is exceptionally hard and the returns minimal. My father’s father was really the only person I had much close contact with as I was growing up who had not been a lifelong employee. I never talked to him much about his business, and now that I’m older I regret that. The small amount of exposure I got to that lifestyle, though, taught me that entrepreneurs are able to work, save and retire just like an employee. He wasn’t able to turn his business into a fortune, but he still did well enough.

Those points are just highlights. The important lesson to remember is that anything your family or your friends teach you about finance is valuable. Sometimes you may learn by avoiding their mistakes, sometimes you may learn by taking their advice to heart – but it is all learning. From my maternal grandparents, I learned to save and to avoid debt. From my paternal grandparents I learned to spend some money, at least consider working for myself and also to be wary of moving too far from my family. In fairness, the latter lesson is something I still struggle with, since without my own parents’ willingness to move closer to me I likely would still be far away from most of my family (albeit close to my wife’s). As I get older, I realize that this is a critical component of happiness.

I think it’s healthy to look at your family’s views on money. We are just a collection and a refraction of the sum of our ancestors in many ways. I will cover other friends’ and family members’ views towards money in the future.

teaching risk tolerance

Risk is the possibility of an event occurring that will have an impact on the achievement of objectives. Risk is measured in terms of impact and likelihood. (from Wikipedia)

That’s the definition from my profession, auditing. Basically risk is the possibility of something bad happening. It does not necessarily follow that if the risk event doesn’t happen, something good will happen – simply that the negative outcome won’t. Most people have a subjective perception of risk.

For example: you and I may perceive bungee jumping in vastly different ways. Let’s say that 1 out of every 1 million bungee jumps goes really wrong – it snaps and the jumper dies. If it does not snap, you get your thrilling giant rubber band ride up and down. For me, the 1 in a million chance of death renders the benefit of the jump (a thrill) as unacceptably risky. For you, 1 in a million may not be enough to make you forgo the benefit. You have what is known as a higher risk tolerance.

I think that risk tolerance and lack of fear is key to achieving great things. Don’t assume this means being a risky adventurer like Steve Fossett. This simply means not being afraid to risk failure. Most of the great entrepreneurs and thinkers have been characterized by a boldness and lack of concern about risks in their personal and private lives. They were not afraid to fail. Their willingness to accept a potential negative outcome was much higher than the average individual’s.

So my question would be a simple one: is risk tolerance learned or inherited?
I’ve been wondering about this as we start teaching my still-less-than-2-years-old son about ‘danger’ – don’t jump off the stool! Don’t touch hot stuff! Slow going down the stairs! Don’t jump around in the tub! While you certainly would never want to encourage risky behavior, is this teaching him to be less risk tolerant and more fearful? And – I mean this very seriously – is this good or bad? Should we encourage fearlessness, risk-taking and boldness? If so, how do you know it’s not too much, making your children reckless? And it extends beyond children, too: how could I teach myself to be more fearless and risk-tolerant in my old age? Should I?

What do you think?

the myth of the parent that NEEDS to work

My wife is an extremely intelligent woman who decided to quit her professional career as a management-tracked analyst with a huge investment bank in order to be a stay-at-home parent when our son arrived. I would have willingly stayed home in her place but being older and further along in my career I was making twice as much as she so it would not have made sense. She has now been at home for almost two years and I have noticed that there is a subtle campaign against her choice, and it makes me angry. Despite all of the talk about mothers making the ‘tough choice’ to go back to work, I think the tough choice is staying home.

First of all, I know there are single mothers and poorer families who have no choice! I would maintain this is a very small proportion of the population, though. Single mothers definitely have no choice as the primary breadwinner, of course. Some families may have special circumstances that require both parents to work – health care costs spring to mind. I wonder, though, how many times the choice to work is the choice to support owning a second television, or keeping the premium movie channels, owning the house with the extra two rooms, or leasing a nice car – versus staying home with a child.

My family took a big hit to our finances when my wife quit work. We went from two people living in a two-bedroom apartment on two salaries to three people living in a three-bedroom house on one salary. We did it by making huge changes in our spending, and after a couple of years those changes have – surprise – become fairly routine. We understood that we could not afford as many luxury vacations or idle purchases of gadgets and jewelry and so on. The reward was that our son has been able to stay at home with his mother and be in a safe, healthy, fun environment.

This setup has not come without cost.
My wife misses adult companionship and the sense of validation that you get from a professional position. We miss having the second salary, which for a while was all being plowed into savings and made for a relatively large down payment on our home. And of course my wife worries about her future job prospects once Little Buddy starts school and doesn’t need a stay-at-home mom. But the worst thing, recently, has been the assault on her decision by other women.

Bubelah relays conversations to me from her friends and ex-colleagues and so on where the subject is inevitably "when are you going to get back to work?" Aside from the obvious insult that caring for a child is not "work", this has a very negative effect on her state of mind. She usually laughs it off, but the simple fact is that she doesn’t really interact on a daily basis with anyone but me who supports her decision to make child care a full-time job. We don’t feel that the trade-off of getting another salary is worth having our son in day-care 10 hours a day before he’s even 2 years old, but that’s what we’re being told we need to do.

However, we don’t need the money, frankly. We may not be able to spend freely like our friends do (particularly since we also don’t take on any debt) but we really don’t NEED any more money to meet our current expenses. If Bubelah got a second job a lot of her salary would go to paying for day care, nannies and babysitters. I understand that sometimes both parents want to work. That is fine, but just be honest about that choice. Many people claim to be "forced" to work two jobs to make ends meet, but is it really "making ends meet" when you drive a new car and have premium movie channels and take a vacation to Aruba every year?

all aboard; or, why the earth is doomed

Sometimes life just hands you a little gift. It wasn’t expected, wasn’t particularly sought after and certainly can’t continue to be counted on – but it’s nice. Here’s a little story about a bus, with a surprise ending.

The community I live in is close to a lot of public transportation but not conveniently so. To get to the excruciatingly slow and (in the evenings) somewhat dangerous trolley system you would have to walk a long distance along a major highway with no sidewalks (urban planning failure). It’s also quite expensive considering how slow it is. Parking is expensive, too, making it a bad option – both for slowness and expenses.

The New Jersey transit system is further away – several miles – and requires driving along a heavily congested highway and parking in an $8 per day parking lot. It’s more convenient but I hate driving my car every day. Lo and behold, my community cobbled together funds from our maintenance fee and started a once-every-15-minute shuttle service to the NJ transit system station. We have clean, private buses that will accomplish a half dozen things, both for me and other residents:

  • Increase housing values: obviously having a cheap, safe transportation option for the community will help increase housing values.
  • Helping the environment: today, on Blog Action Day, this is a nice bonus – I rode with a half-dozen other people who otherwise would probably all be sitting alone in their cars riding to the same place.
  • Better use of my time: I hate car time. You can’t do anything fun or productive while driving unless you are a big audiobooks or music person; I am not really either. I prefer reading or writing or (if I’m tired) napping. Now that 20-25 minutes I spent sitting behind the wheel can be better spent blazing through another highly productive personal finance book. Oh, alright, you got me – actually I’m reading Harry Potter and the Half-Blood Prince. Sue me 🙂
  • Safer: it’s taking dozens of cars out of the morning commute mix, which can get ferocious right around my community. It’s a huge community with ONE exit to the main highway nearby, so there are big jockeying-for-position battles every morning around that exit.
  • May even allow for one-car existence: “my” car is paid off, so I don’t have much incentive to get rid of it, but if I don’t drive it every day to work I keep my fingers crossed that I’ll be able to stretch its use out for another 10-12 years (it’s already 6 years old). If I don’t drive it to work I’ll barely drive it 1000 miles a year, I bet.

That all sounds great, and I’m sure many of you are ho-humming. Here’s the surprise twist ending: it’s a clean, quiet, comfortable private mode of transportation that’s exceptionally convenient and free and good for the environment – and in our community of hundreds of homes, I see dozens of cars, one right after another, streak by on their way to the train station passing up the free bus. Usually there are 5 or fewer people on the bus every time it leaves.
Why are people so unwilling to give up their cars in this country? I wonder if there’s hope for public transportation anywhere but in the heart of east coast cities, when even New Jerseyians – a hop, skip and jump from New York City – won’t give up their beloved cars for free public transportation. Yesterday was blog action day and everyone was hopeful about the chances to slow down climate change, but sometimes I wonder, faced with such short-sighted behavior.

blog action day

Since today is blog action day, many of the blogs I read will be posting about the environment. Although I was originally planning to write on various subjects like waste reduction or environmentally conscious eating, I decided that as an American there’s only one real action that MUST be taken to help the global environment. It can never be passed over, you have no excuse for not doing it and it is immensely powerful. What is the action?


I am not going to make an impassioned plea on behalf of any specific political party. I think one party in the US is clearly more friendly to the environment, but I’ll leave that up to the individual to decide. Besides, there’s a broad range of opinions in both parties on how much attention to pay to the environment but also how to fix it – government intervention versus encouraging private innovation, and so on.

What I want every American to realize is that the federal government has far-reaching and massive influence over the treatment of the environment in the US, and that attitude reverberates around the globe. No individual action will be as significant as even a minor change in regulations by the US government. Just think of some of these actions and how they could affect the environment for good or ill. Again, there’s room all over the political spectrum for innovation here.

  • raising CAFE standards, or changing the way they are calculated
  • creating a plan of massive tax incentives for green technology devlopment encouraging individual action through tax breaks
  • banning or allowing nuclear power
  • continuing to regulate water and air purity
  • protecting national parks from development, or developing national parks but making part of the purchase price maintaining others
  • subsidizing ethanol production, or ending ethanol subsidies
  • subsidizing oil production, or increasing taxes on oil
  • enacting legislation punishing polluters
  • free-trade agreements without protection against polluting industries
  • encouraging wind power or other renewables through tax credits
  • allowing genetically modified foods to be grown, sold and consumed

I think when you consider that list, and a million others, you’ll realize that finding candidates who share your values – and then actually create legislation that supports those values – can be infinitely more effective than hoping to bring about change by yourself. I am not trying to belittle individual action, but if we combine our efforts there will be an incremental increase in our effect. Without swift and dramatic action, we run an increasing risk of undoable damage to the planet.

So consider getting out and voting. It’s easy, it’s quick and there’s no excuse. Your world is depending on you.

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