PassionSaving.com Home Page : The Financial Freedom Blog : December 2007
December 3, 2007 06:51 – Gift Overload
Gift overload is making our children depressed, In some extreme cases, it is even making them angry. A big part of the fun of Christmas morning is the expectation of what may or may not come followed by the release of the tension when gifts really do appear under the tree. When there are too many gifts, the ritual becomes a burden: the gifts must be opened; thanks must be offered; token efforts at playing with the toys received must be evidenced. Many kids today find this a bore, especially when they have to do it multiple times (as is the case with kids whose parents are divorced).
Children do not know the secrets of happiness. It is the job of adults to teach them. Happiness never comes with excess. Giving and receiving gifts is wonderful. But the parents of today are letting their children down by taking the easy path. It is easier today to buy ever more gifts than it is to draw a line and say “no.”
I do not say this without sympathy for the plight of the parents and other adults involved. My wife and I have tried to limit the number of gifts given to our two boys. It’s very hard. Uncles and aunts and grandparents all enjoy the process of trying to find the perfect gifts for our boys. There has to be a widespread cultural recognition that the buying is out of hand. If each relative purchased one gift for our boys, that would be acceptable. Many feel a desire to do more than that. It is not healthy for our children to be handed too much without having been required to overcome a challenge to obtain it.
Two chocolate -chip cookies are a treat. Twenty chocolate-chip cookies are a seriously bad feeling. It is the same with Christmas gifts.
Buzz Update: The November issue of the online magazine NoNiche features an article that I wrote entitled How I Became Addicted to Not Watching Television (there’s a charge of $1.11 to download the publication).
To reference this entry please copy the url in this link: (Permalink)
December 4, 2007 12:01 – Networking for the Shy
It is possible to some extent to be engaged in networking without knowing about it. However, if you don’t know what you are doing, the odds are that you are not doing it well.
I suggest that those who are shy about networking acknowledge both the good and the bad side of this reality. There is no question but that shyness about networking hurts your career prospects. The other side of the story is that those who are shy often form deeper and more loyal attachments. So those who are shy need to avoid feeling shame about their drawback and need to seek to take advantage of the opportunities that being shy present to them.
How about networking with others who are shy, forming a sort of “club” at your place of work? The shy person knows who the other shy people are. They are easier to approach in some ways than the ones who are outgoing. Be the one who takes a chance and forms a networking bond with the others and they will be grateful to you for doing so. They will help you and you will help them and it all will be for the good. Shy people disdain phoniness. There is nothing phony about this sort of arrangement.
Shy people tend to be more sincere. The shy networker can take advantage of that too. Shy networkers will put forward fewer hiring recommendations to his or her boss but those that he or she puts forward will count for more because they are rare and stand out. Again, the idea here is not to apologize for what you are but to see the good points of something generally viewed as a negative and to make the most of them.
You get over the fear of talking to strangers by focusing on a topic over which you feel strongly. Shy people are horrible at small talk. They will never be good at it. They need to move the discussion away from small-talk topics. They can break the ice by finding some topic re which they possess strong feelings (it cannot be something too controversial if the other person is a stranger but there needs to be a bit of substance to the topic to engage the shy networker). Once the ice is broken, things happen naturally. Shy networkers generally do not have a problem once they get over the initial difficult hump.
Baby steps are best. Shy people will not be forced into social encounters. If forced, they will pull back all the more. The key is being sure to take some baby steps and not to hide out because of the pain that networking causes for the shy. The shy networker should make deals with himself or herself in which he or she promises that he or she will make a small effort within a specified time-period. He or she should insist to himself or herself that that effort be made, but then let himself or herself “off the hook” once the promised effort has been completed.
Buzz Update: The Digerati Life says that “market timing appears to have various flavors and not all timing approaches may lead to investment underperformance. I say this, while citing this piece about market timing [these words link to the article “Market Timing — What Works and What Does Not,” which appears at the “Valuation-Informed Indexing” section of the PassionSaving.com site), which attempts to describe different approaches that fall under the timing umbrella.” More on This Topic
To reference this entry please copy the url in this link: (Permalink)
December 5, 2007 11:04 – Who’s Afraid of the Efficient Market Hypothesis?
I’ve added an article to the “Stock Drunk” section of the site entitled Who’s Afraid of the Efficient Market Hypothesis?
Juicy Excerpt: It’s not done. I have never known anyone who at one time was an advocate of the efficient market hypothesis say that he or she has seen the light and now sees the error of his or her former ways. Why not? Shiller’s book is an extended argument against the hypothesis. The book was a widely praised bestseller. Did it not change anyone’s mind? If it did, did that person go public with acknowledgment of the change of heart? Can you tell me who that person is?
To reference this entry please copy the url in this link: (Permalink)
December 6, 2007 12:14 – If the Random Walk Is Real, the Efficient Market Isn’t
I’ve added an article to the “Stock Drunk” section of the site entitled If the Random Walk Is Real, the Efficient Market Isn’t.
Juicy Excerpt: It appears that the confusion stems from a failure of the adherents of the two theories to specify the time-period to which they are referring when they make their claims. There are indeed circumstances in which stock prices appear to follow a random walk. There are also circumstances in which the Efficient Market Theory appears to apply. Stocks are the Certs of InvestoWorld — they are two, two, two investment classes in one!
To reference this entry please copy the url in this link: (Permalink)
December 7, 2007 12:54 – Writing for the Internet of Tomorrow
I’ve added a new section entitled “The Million-Dollar Idea” to the site. The first article written for the new section is entitled Writing for the Internet of Tomorrow.
Juicy Excerpt: I face a lot of competition getting ranked for the phrase “buy-and-hold.” But I know of no one else writing on the internet who puts forward the take on how to succeed at buy-and-hold investing that I put forward. As search engines become more customized, I expect that I will stand a better chance of ranking for search queries relating to buy-and-hold investing. I won’t rank for all such queries. I’ll rank for buy-and-hold queries put forward by searchers who have demonstrated a preference for long, thoughtful, non-numbers-oriented, soft-side stuff.
To reference this entry please copy the url in this link: (Permalink)
December 10, 2007 09:42 – Spending Guilt
Guilt serves an important purpose. It is the voice of our better selves expressing disappointment in our failure to live up to our potential. Fortunately for us, we are generally not able to silence the voice of guilt through the strength of our will.
Guilt is silenced by taking action on the matter prompting the guilt. If someone is guilty of overspending, he or she can silence the guilt experienced by taking constructive steps to solve the problem. Writing a budget would do it. Once the budget is written, the person’s mental energy will be channeled in a forward direction and the act of overspending will be forgotten.
Buzz Update: An article in the November 27, 2007, issue of Fortune shoots straight on why stock prices are falling. It says: “Forget the chatter, ignore the headlines, and follow the math. Prices will get a lot more attractive. The process is underway. All investors have to do is wait.” Right on!
This article does not make direct reference to the Valuation-Informed Indexing approach to investing. However, it provides a good summary of the principles that demand that rational investors lower their stock allocations when prices reach the sorts of levels that apply today as well as an explanation of why P/E10 is a better valuation tool than the more frequently cited P/E1.
To reference this entry please copy the url in this link: (Permalink)
December 11, 2007 12:04 – The How-To of Investing the Valuation-Informed Indexing Way
I’ve added an article to the “Valuation-Informed Indexing” section of the site entitled The How-To of Investing the Valuation-Informed Indexing Way.
Juicy Excerpt: Think about it. Does it make sense? If yes, move ahead slowly. If not, jump off the tracks before you get hurt; if it does not make sense to you, it does not make sense for you.
To reference this entry please copy the url in this link: (Permalink)
December 12, 2007 06:10 – Saving Too Much Is a Big Problem
I’ve added an article to the “Upsizing” section of the site entitled Saving Too Much Is a Big Problem.
Juicy Excerpt: There is a b.s. detector present in all of our brains that filters out saving advice rooted in the idea that saving too much is not possible. We know from our life experiences that this is nonsense and that causes us to be more than a little suspicious of any money management model that puts forward such an idea.
To reference this entry please copy the url in this link: (Permalink)
December 13, 2007 12:09 – “I Was Able to Take an Extended Leave”
I’ve added Javier’s story to the “Middle-Class Millionaires” section of the site.
Juicy Excerpt: I went from being thousands of dollars in debt to having thousands of dollars in savings in a time-period of two years. Thanks to your words I was able to take an extended leave for three months and take care of my wife and newborn. I did this without getting in debt, paying hospital bills, buying a used but dependable sports utility van, taking care of my family, and still not wiping out my savings.
To reference this entry please copy the url in this link: (Permalink)
December 14, 2007 14:30 – Santa’s Got a Brand New List
Ten tips for keeping holiday shopping from getting out of control:
- Write a budget just for holiday spending with a dollar amount specified for each item and bring it with you when you shop. Writing things down at a time when you are not caught up in a spending spirit makes a big difference;
- If you feel tempted to go over the holiday budget on one item, make it up by subtracting from the amount allocated elsewhere. This imposes a necessary discipline;
- Be satisfied with token gifts when buying for someone hard to buy for. People who “have everything” understand, and only are made to feel uncomfortable when friends and family members spend too much on something that they will not be able to put to use;
- Don’t assume that others want the things you want. It’s easy to overspend when you see something that you view as “perfect.” Unless you are sure that the person for whom the gift is being purchased will view it as perfect, don’t let this “find” cause you to go over your budget;
- Ask several adult friends or family members to agree not to exchange gifts. Many will be relieved to hear the suggestion;
- Check with the parents of children as to whether gifts are a good idea. Many parents today are trying to de-commercialize the holidays for their children and are seeing their efforts undermined by friends and relatives. There is such a thing as getting too many gifts. It is important that children not get everything they want.
- Watch less television during the holiday season so that you do not get caught up in the advertising campaigns. Plan non-commercial ways to enjoy the holidays so that your mental energy is not focused on buying.
- Resist the temptation to think that gifts mean as much today as they did in the Christmases of your youth. They do not.
- Limit your holiday shopping to one or two trips. If you are spending more than that amount of time on holiday shopping, you are too focused on the commercial side of the holidays.
- Identify a charity to which you will donate a specified sum plus any amount by which your overall spending comes in under-budget. This will give you an incentive to spend LESS than the amount specified in the holiday budget.
Buzz Update: The West Coast Wiccan blog says: “It seems to be a truism that pagans are always broke (and therefore I fit right in!)…. I came across an interesting website which I think may help: https://www.passionsaving.com/ The theory of it, that you need to plan your debt reduction and saving and so forth according to exciting goals rather than boring, distant ones, seems to tie right into the conclusion I had already reached when I decided to have a five-year plan of emigrating to England – and doing it debt-free.” More on This Topic
To reference this entry please copy the url in this link: (Permalink)
December 17, 2007 08:15 – False Investing Claims Hurt Humans and Other Smart, Fun-Loving Mammals
I’ve added new language to the “Disclaimer” section of the site.
Juicy Excerpt: I care about you. That’s why I say the harsh things that I say about the now-dominant model. I believe that the now-dominant model is likely going to do you great harm in time. I want to replace the now-dominant model with a model that encourages a healthy mix of knowing and caring (I call the new model the Investing for Humans model). A key precept of the new model (one that distinguishes those of us who follow it from those following the old model in an extremely important way) is that those of us who follow the new model must be willing to acknowledge mistakes when they are brought to our attention. We appreciate that our mistakes can hurt our fellow humans. That’s our driver. That’s more important to us than concerns about potential lawsuits.
To reference this entry please copy the url in this link: (Permalink)
December 18, 2007 10:19 – “A Less Secure Future, But a Good Retirement Already Had”
I’ve added Arty’s story to the Middle-Class Millionaires section of the site.
Juicy Excerpt: I “subtracted” myself from the conventional work mode, and essentially, remained subtracted, living as a writer with few expenses, a good, full life for me. While I still write, and am paid to do freelance marketing, consulting and editing, I do not regret the decision to abandon a good, regular job and “live” my life, albeit poorer, than my peers and friends who got good-pension jobs but still await the day to spend it…. So, in that sense, I’m living life “backwardly”, with a less secure future, but a good retirement already had.
Buzz Update: BankRate.com recently posted an article entitled Find Frugal — But Not Cheap — Gifts. Here is the text section of the article quoting my views:
“Agreeing to a low spending limit for your honey can actually be a romantic gesture.
” ‘Show your affection not by spending a lot but by being creative in picking the perfect gift within the spending limit,’ suggests Rob Bennett, author of the daily Financial Freedom Blog at PassionSaving.com.
“For example, find an out-of-print book by your spouse’s favorite author in a used bookstore for $5.”
To reference this entry please copy the url in this link: (Permalink)
December 19, 2007 11:39 – Yes, Virginia, There Is a Free Lunch for Smart Investors
I’ve added an article to the “Scenario Surfer” section of the site entitled Yes, Virginia, There Is a Free Lunch for Smart Investors.
Juicy Excerpt: Life itself is a free lunch. You never paid for a ticket, did you? To reject any good thing you happen to discover on grounds that to believe in it would be to believe in a free lunch is morose madness. The entire trip is a free lunch, for heaven’s sake. Come on.
To reference this entry please copy the url in this link: (Permalink)
December 20, 2007 10:02 – Taking Risks Isn’t What It Used to Be
I’ve added an article to the “The Self-Directed Life” section of the site entitled Taking Risks Isn’t What It Used to Be.
Juicy Excerpt: Saving is risky. If you go on a vacation today, you know what you are getting; the value proposition is solid and clear. If you save, you don’t know how much that money is going to help you out later on. It might be that it will keep you from going hungry. It might be that it will allow you to pursue an opportunity that will make you rich. It might be that you will get so many raises between now and the day you retire that the money you save by not taking the vacation will end up just being extra money to give to your heirs.
To reference this entry please copy the url in this link: (Permalink)
December 21, 2007 15:03 – The Future of Behavioral Finance
I’ve added an article to the “Stock Drunk” section of the site entitled The Future of Behavioral Finance.
Juicy Excerpt: The future belongs to the Behavioral Finance School. But not the Behavioral Finance School as it now exists. As Behavioral Finance becomes the dominant model for understanding how stock investing works, the outlaw will become the sheriff. Proponents of the Behavioral Finance School will become more confident, more expansive, more assertive.
Programming Note: I hope that, like Clarence (The Big Man) Clemons, you wake up Christmas morning to find a shiny new saxophone (or the equivalent for someone in your particular financial circumstances and pursuing your particular Life Goals) under the tree.
The blog will return (God willing) on the morning of Monday, January 7, 2008. At that time, we will continue our exploration of the money management implications of Bruce Springstein’s observation that:
The poets around here don’t write nothing at all.
They just stand back and let it all be.Merry Christmas!
To reference this entry please copy the url in this link: (Permalink)
November 2007 << >> January 2008