Gyroscopic Investing

I guess do what you enjoy. I love a bargin -cheapness is my weakness. Its a bit irrational.

One thing that intrugues me though is that to have ever thought about something such as using the HBPP, entails an inconvenient sacrifice of valuable time for the sake of scrimping money. I found it hard to accept my other half's irrefutable logic that if you have some savings, a good use of the consequent financial freedom is to not give them a thought and so just leave them in a bank account. I couldn't get my head around that (despite seeing the logic) and so racked my brain and googled to the point of digging up this HBPP stuff. Thankfully the HBPP is a pretty much zero effort tactic so that is water under the bridge but perhaps I would have been better of not bothering -it wasn't zero effort to find out about it. I suppose it is good if something like investment tactics provides entertainment in itself, but likewise attaining good, dirt cheap, food and transport can be fun -and perhaps to find that fun is no more warped than to enjoying thinking about portfolio construction.

stone wrote: I guess do what you enjoy. I love a bargin -cheapness is my weakness. Its a bit irrational.

One thing that intrugues me though is that to have ever thought about something such as using the HBPP, entails an inconvenient sacrifice of valuable time for the sake of scrimping money. I found it hard to accept my other half's irrefutable logic that if you have some savings, a good use of the consequent financial freedom is to not give them a thought and so just leave them in a bank account. I couldn't get my head around that (despite seeing the logic) and so racked my brain and googled to the point of digging up this HBPP stuff. Thankfully the HBPP is a pretty much zero effort tactic so that is water under the bridge but perhaps I would have been better of not bothering -it wasn't zero effort to find out about it. I suppose it is good if something like investment tactics provides entertainment in itself, but likewise attaining good, dirt cheap, food and transport can be fun -and perhaps to find that fun is no more warped than to enjoying thinking about portfolio construction.

I like to save money too, so playing the "points and miles" games to get "free" hotel nights and flights is fun for me, at least up to a point. For example, I stayed at a fairly expensive hotel for 5 nights last month, using Starwood points instead of about $1200 in cash.

As for the HBPP, I think the amount that you can save (or not lose) with it compared to "normal" portfolios is so great that it is definitely worthwhile. Of course you won't know that if you don't ever make the effort to locate a better portfolio design, but IMO portfolio optimization is worth quite a bit of time and effort.

Seems pretty simple to me. You exchanged three hours in the present for X number of hours in the future, where X = $175 divided by your after-tax hourly income. You decided to work a little bit more in the future for a little bit more comfort in the present. We are all constantly making these kinds of value judgements based on our subjective feelings, exchanging one unpleasant thing for something we perceive to be less unpleasant.

But beyond that, I think a very powerful mental technique you can use to dominate your financial life and feel constantly happier is to alter your perception of discomfort. Mr. Money Mustache writes about this all the time, and the theme appears in Stoicism and Buddhism and no doubt countless other philosophies from around the world.

As an example, a month and a half ago, my wife and I decided to do a two-day car trip with our toddler for about $250 rather than pony up for $900-1200 for a one-day set of plane tickets to cover the same distance. We decided to see the extra day of travel as fun rather than awful, and we filled it with fun podcasts, eating restaurant food, etc. So it didn't turn out that we endured an extra day of sadness to save $650+; by adjusting our perception, we had just as much fun (and maybe even more, since we hate flying) and saved a substantial amount of money in the process.

I tend to alternate between cheap-skate mode and convenience.

For example, I think if it had been me I would have probably opted for one of your convenience choices but not both. After spending $175 for mere convenience I would probably have been looking to make up for it with the plane tickets.

What a great post. I suffer from the need to get the best value or return on investment from my purchases. I feel that I turn even the most basic purchases into a major research project; analyses paralyses. It took hours of online research, and brick and mortar shopping to replace the small TV that we use in the Kitchen. 120 Hz versus 60 Hz versus 1080p versus 720p versus price point versus new or used versus manufacture versus viewing angle versus repair history.  This 150.00 to 250.00 price range purchase turned into trying to find the Holy Grail.  I found the TV spent more than I wanted but it looks great. Overall, what a pain for a simple purchase. I hope our family room TV never goes out I’m not sure I can handle it. I am envious of people who do not suffer from analyses paralyses.

GT wrote: What a great post. I suffer from the need to get the best value or return on investment from my purchases. I feel that I turn even the most basic purchases into a major research project; analyses paralyses. It took hours of online research, and brick and mortar shopping to replace the small TV that we use in the Kitchen. 120 Hz versus 60 Hz versus 1080p versus 720p versus price point versus new or used versus manufacture versus viewing angle versus repair history.  This 150.00 to 250.00 price range purchase turned into trying to find the Holy Grail.  I found the TV spent more than I wanted but it looks great. Overall, what a pain for a simple purchase. I hope our family room TV never goes out I’m not sure I can handle it. I am envious of people who do not suffer from analyses paralyses.

I can get that way sometimes, but I've found that ever since my in-laws started giving me a Consumer Reports subscription for Christmas, I just flip to the index, open to the relevant article, and choose one from the recommended list.  It's worked out pretty well so far.

hoost wrote:

GT wrote: What a great post. I suffer from the need to get the best value or return on investment from my purchases. I feel that I turn even the most basic purchases into a major research project; analyses paralyses. It took hours of online research, and brick and mortar shopping to replace the small TV that we use in the Kitchen. 120 Hz versus 60 Hz versus 1080p versus 720p versus price point versus new or used versus manufacture versus viewing angle versus repair history.  This 150.00 to 250.00 price range purchase turned into trying to find the Holy Grail.  I found the TV spent more than I wanted but it looks great. Overall, what a pain for a simple purchase. I hope our family room TV never goes out I’m not sure I can handle it. I am envious of people who do not suffer from analyses paralyses.

I can get that way sometimes, but I've found that ever since my in-laws started giving me a Consumer Reports subscription for Christmas, I just flip to the index, open to the relevant article, and choose one from the recommended list.  It's worked out pretty well so far.

Consumer reports is very useful e.g. which features are available.  However keep in mind that your priorities and theirs may differ.  For example I'm 6', so I'm never going to have refridgerator with the freezor part on the bottom (don't even ask what I think of the side by side ones). 

I don't think it's cognitive dissonance.  Just mental economics, where your time also has an inherent value that may vary based on the circumstances.  There's nothing wrong with that.

I do have a bit of a problem with the Jim Dahle quote, though.  He finds it a waste of time to show up on schedule to his own flights, cook his own food, mow his own lawn, clean his own house, fix his own things, and even maximize his own dollar spent.  That type of mentality seems so detached from real life that I find it hard to relate.  I assume he values earning more money above all else.  That's probably best -- He doesn't seem to know how to do anything else, so he really has no choice.

Spending within your means on a rational convenience is just fine.  However, idolizing money as the hammer to solve every problem is not particularly healthy or sustainable, IMHO.

Definitely -- I've spent a good 10 minutes in the grocery store comparing $2 items.  From a strict economic standpoint, I'd be better off paying $0.50 more for all my food items and working an extra hour every month.  One would hope that I only need to make the decision once and continue to buy the cheapest item, but the grocery stores change prices around a lot relying on people who blindly pick up the same brand every time.

I do the online shopping analysis thing too -- but one benefit of that is it gives me that "shopping feeling" a few times before I actually spend any real money.

MangoMan wrote: Here's the thing: He is a highly paid ER doc making in the neighborhood of $150+ per hour. If he can theoretically work more hours than he currently does, and likes his job, why not just put in an extra hour each month which covers the cost of 5 hours of lawn mowing in the summer and 5 hours of snow shoveling in the winter? One hour more that month, and you also pay for the maid service twice a month [and they clean much better than I do!]. Plus, he hates mowing, shoveling and house cleaning. Makes sense to me.

Perhaps I came on too strong.  He can certainly afford it, so who am I to judge?  I'm personally just wired differently.

*****

Two close boyhood friends grow up and go their separate ways.  One becomes a humble monk, the other a rich and powerful minister to the king.

Years later they meet.  As they catch up, the minister (in his fine robes) takes pity on the thin, shabby monk.  Seeking to help, he says: “You know, if you could learn to cater to the king you wouldn’t have to live on rice and beans.”?

To which the monk replies: “If you could learn to live on rice and beans you wouldn’t have to cater to the king.”?

Good post, MangoMan.

I think I feel best about money when I'm  in control. I fought with the cable company about charging me for services that were not working, and when they finally capitulated, some mysterious other charges popped up to compensate them for the credits they were giving me. So it's either pay up or spend yet more time on the phone with customer service.

On the other hand, I will happily gave the same amount to charity. The amount I give is arbitrary, and not a fixed % of my income or savings.

We're supposed to be getting a fancy motorized shade for privacy on the first floor. The vendor is very nice but a bit of a scatterbrain. As a result, The job is several months late and driving my general contractor batty, along with me and the missus. And we finally got a price quote-- in the thousands of dollars. We are free to scrap the whole thing and buy a cheap shade. It's not too late. However, we've invested this much time in the whole thing that I don't feel like starting over, so I'm going to pay.

It doesn't always work that way. We fired the architect before he could do any more damage, financial or psychological.

The point is that having $ puts you in the catbird seat. Don't be irritated about the towing experience. Be happy that you have the choice. And emergdoc is right about the convenience of skipping that that cold brown bag at the ski lodge, not to mention not having to worry where one's next meal is coming from.

We're basically talking about the money/time tradeoff, which is interesting because each one is required to have the other in the first place, so they are sort of roughly equivalent, and we betray which one is more important to us with our actions.

At one end of the spectrum, you have a person who wants a lot of money. This person gets it by having enough time to make that money, which is partially enabled by spending some of the money outsourcing non-money-making tasks, leaving more time for making money.

And at the other end of the spectrum, you have the person who wants a lot of time. This person gets it by having so much money that it's self-sustaining, but getting there requires the expenditure of a lot of time.

I think a lot of human behavior can be explained by people trying to get more money or time without having to pay the requisite cost denominated in the other. Robbers want more money without paying the time of earning it. Welfare bums want more time without paying the time cost of earning and saving. The lottery and all other get-rich-quick schemes quality, as well as outsourcing your factory to the Philippines, scamming and insurance company, and browsing this forum during business hours. 

Tyler wrote:

MangoMan wrote: Here's the thing: He is a highly paid ER doc making in the neighborhood of $150+ per hour. If he can theoretically work more hours than he currently does, and likes his job, why not just put in an extra hour each month which covers the cost of 5 hours of lawn mowing in the summer and 5 hours of snow shoveling in the winter? One hour more that month, and you also pay for the maid service twice a month [and they clean much better than I do!]. Plus, he hates mowing, shoveling and house cleaning. Makes sense to me.

Perhaps I came on too strong.  He can certainly afford it, so who am I to judge?  I'm personally just wired differently.

*****

Two close boyhood friends grow up and go their separate ways.  One becomes a humble monk, the other a rich and powerful minister to the king.

Years later they meet.  As they catch up, the minister (in his fine robes) takes pity on the thin, shabby monk.  Seeking to help, he says: “You know, if you could learn to cater to the king you wouldn’t have to live on rice and beans.”?

To which the monk replies: “If you could learn to live on rice and beans you wouldn’t have to cater to the king.”?

I personally like mowing and such.  Especially since it's a frugal way to get a little exercise.  I could pay someone to do it and work longer at my job, but then I'd get no exercise.  I'd have no problem paying someone to do it if I was, say, away on a business trip.

Pointedstick wrote: We're basically talking about the money/time tradeoff, which is interesting because each one is required to have the other in the first place, so they are sort of roughly equivalent, and we betray which one is more important to us with our actions.

This topic always reminds me that the original value of a Dutch guilder was allegedly originally  worth a day's work. Doesn't seem fair that someone can create the Plenty of Fish website and never have to work again, but that's the way capitalism works and the alternatives seem like something I don't ever want to experience.

dualstow wrote:

Pointedstick wrote: We're basically talking about the money/time tradeoff, which is interesting because each one is required to have the other in the first place, so they are sort of roughly equivalent, and we betray which one is more important to us with our actions.

This topic always reminds me that the original value of a Dutch guilder was allegedly originally  worth a day's work. Doesn't seem fair that someone can create the Plenty of Fish website and never have to work again, but that's the way capitalism works and the alternatives seem like something I don't ever want to experience.

The time is still there because of the internet's multiplier effect. I can spend 100 hours building something that will then simultaneously entertain tens of thousands of people for millions of collective hours. If I build and sell a nice chair, though, only one person can be enjoying it at a time.

I love shoveling snow. I do our whole block and then some ( >100 homes). I'm excited when it starts snowing with the anticipation of some shoveling  . No one else seems to shovel snow in England. On my drive to work, there is a part of Sheffield that has had all of the paths being total sheets of compressed snow/ice for over a week now. People have to walk in the street with the cars to avoid the paths because the paths are too slippy to walk on.

MangoMan wrote: I realized how right he is. What do you PP people think about this? Saving, ER, etc, all good, but convenience, enjoying life [requires money] are important, too.

Maybe its the fact that half of the cost of an airline ticket is allegedly all taxes, so you're wanting to minimize that cost as much as possible since its not a positive lifestyle convenience compared to not having to wait four hours just to go home?

But yes, the PP is not the path to wealth, only entrepreneurship, intelligent speculation or a high-paying career is.  We really need a Citizen's Dividend awful bad because eliminating all those stressful, pesky stupid chores that you can't afford to pay someone else (or a robot) to do would be a dramatic improvement in everyone's living standards, if not overnight.  Those that enjoy or are skilled at doing laborious grunt work are still free to do it.  Why should only the wealthy be able to afford this offsourcing, especially if they got their wealth handed to them without any risk taking?

P.S. Drop the crappy insurance-provided tow benefit and sign up for AAA on your next renewal.

GT wrote: I hope our family room TV never goes out I’m not sure I can handle it. I am envious of people who do not suffer from analyses paralyses.

It is exhausting.  I did that for years and years because no one could ever rate/review properly in my judgement with a few non-broad exceptions, but now I use this site http://www.thewirecutter.com.  They don't cover everything but its a HUGE time saver.

Pointedstick wrote: I think a lot of human behavior can be explained by people trying to get more money or time without having to pay the requisite cost denominated in the other. Robbers want more money without paying the time of earning it. Welfare bums want more time without paying the time cost of earning and saving. The lottery and all other get-rich-quick schemes quality, as well as outsourcing your factory to the Philippines, scamming and insurance company, and browsing this forum during business hours. 

Time is the only real form of money.  It is truly scarce.  I don't like wasting my time on "meditative" grunt work for the same reason I'm a life extensionist.  It's all in the mentality/philosophy on how you approach life and the future.  You need a certain level of discontent to be super-motivated to spend time getting rich enough so that you don't have to spend your time doing anything you don't like.

MachineGhost wrote: I did that for years and years because no one could ever rate/review properly in my judgement, but now I use this site http://www.thewirecutter.com.  They don't cover everything but its a HUGE time saver.

Nice site.  Thanks!

I'm also a habitual purchase researcher, just as much to identify quality as to get the best deal. I learned over time to narrow down to the top few options and then just go with my gut.  Most of the returns from research comes from eliminating the bad deals rather than finding the perfect deal, so there's no point in  over-analyzing the last few percent.  It's also nice to allow a bit of plain consumer preference so as to not drain all of the life out of every decision.

stone wrote: there is a part of Sheffield that has had all of the paths being total sheets of compressed snow/ice for over a week now. People have to walk in the street with the cars to avoid the paths because the paths are too slippy to walk on.

That's how Moscow was when I was there, even though they have massive snow removal machines.

dualstow wrote:

Pointedstick wrote: We're basically talking about the money/time tradeoff, which is interesting because each one is required to have the other in the first place, so they are sort of roughly equivalent, and we betray which one is more important to us with our actions.

This topic always reminds me that the original value of a Dutch guilder was allegedly originally  worth a day's work. Doesn't seem fair that someone can create the Plenty of Fish website and never have to work again, but that's the way capitalism works and the alternatives seem like something I don't ever want to experience.

I  see there is no plentyofbicycles.com, so there's an opening for an entrepreneur!

MangoMan wrote: Does AAA let you use any tow service you want and provide full reimbursement? Do they guarantee service within an hour, even on busy snowy nights? Because if not, the $100/year they charge is way more than the $7/year I am paying, and the likelihood of needing a tow is low since my car is only 4 years old.

Do not know and those are very good questions to ask their representatives.  I thought you were paying $7/month not per year?  There are a lot more benefits with a AAA membership than just towing.