Saving with No Regrets

Retirement saving is a big theme that I hear among older people. Mostly, they seem to lament not having saved more in their earlier years of wage-earning. Presumably, that darn past self of theirs should have given up the fun toys and frivolities of youth so that their present self could reap the benefits!

Since I'm under thirty years old, the typical retirement age of sixty-five is the second most distant life event I can think of, next to being dead (hopefully). With longer left until retirement than all the time I have experienced thus far in my life, how am I supposed to plan for it?

Despite my doubts as to how much is "enough" to save, we have settled on a strategy for now: we try to be frugal in our buying decisions, and any extra money we have goes to savings. We spend enough to have everything we need, with some comforts to boot. And we even put some of our budget toward "frivolous" things that are important to us, like travel. But we have agreed that those extras will improve our quality of life here and now, as well as in the future when we have those memories on which to reflect.

And that's something I won't regret in forty years.

Big Book Blues

April was a long month, but in terms of book's I read, I have precious little to show for it. I haven't been spending much less time reading; the problem (if I may call it so) is that I am tackling a much larger book than usual: Douglas Hofstadter's Godel, Escher, Bach. Weighing in at 742 pages, my edition is a hefty one. I've been doing my best to cart it around with me, but lugging it on the bus is a challenge, and it's been rainy enough lately that I haven't dared take it outside much.

Oddly, this book has inclined me toward buying a Kindle (or similar gadget). I know that for most every book I've read up to now, I haven't entertained thoughts of instead having a slim electronic gadget. And it seems silly to drop several hundred dollars just so that I won't have to hold this one heavy book. Nevertheless, the idea has now entered my mind.

Maybe Amazon's target audience was people who read dictionary-sized books for fun.

Catching Up after Falling Behind

With the beginning of "the lusty month of May", my new habit is to stick to a daily exercise routine. This is not a new goal—I had the exact same goal last year, when I was initially trying to get into doing some regular exercise. Why the repeat?

In March, some personal health issues prevented me from sticking with my routine, and I didn't recover at all during the month of April. May is here, and it is time to get on board again, but my habit is broken. (I tried getting started yesterday to verify this—it was tough!)

So with May starting up, I have a decision to make on which monthly goal I would like to pursue. While I would love to tackle something bigger and better this month, I realize that I have taken a few steps back, and I should work back up to where I left off.

When you get out of a habit, don't be afraid to take some time to get back into it—it sets a foundation for further progress..

In favor of pets

Since yesterday's thoughts on pets might have rubbed some people's fur the wrong way, let me clarify my position.

To be fair, pets probably have their uses. I know that in several households, pets are the only contact their owners have with another living being.

Some of our friends have had all their kids move out recently, and it seems that having a dog around to care for makes life easier or more comfortable. This I do not entirely understand, but I've seen it more than enough times to notice it.

Also, lots of folks are of the opinion that their kids need a pet, and who am I to refute them? I don't have kids, and having had no pets as a kid myself, I don't think I can say confidently that this is not true.

So, let me say for the record that even though I don't plan on having any pets around our house any time soon, I don't begrudge people with pets. Unless their pets are outside barking (or mooing, for that matter) at ungodly hours.

Pets

"Conspicuous consumption" doesn't stop with buying physical products. The idea applies to pets, as well. Take, for example, chihuahuas. Why do Hollywood stars own them? Why not, say, a golden retriever? Because while a golden retriever might serve a useful purpose, a chihuahua exudes extravagance—it's pretty much unable to do a thing for itself, so the one owning it must be able to provide for it, without getting a thing in return!

Now, we live in an area where people regard dogs as part of the family. A local park even features a section for dogs to go off-leash and wander around, exploring and playing with other dogs. And there is certainly a real bond that people feel toward their pets. (Maybe this closeness with a pet is brought on by consistently picking up its defecation—a true labor of love.)

But viewed from a purely economic standpoint, this relationship makes little sense—you pay for the pet, its food, its vet appointments, and lavish it with attention, and in return, all it does is act happy when you're around? (For cats, maybe not even that.)

I can get behind a "pet" cow, or chickens—they provide some benefit to the household besides the ill-defined "companionship".

As for our family, well, I was raised in a pet-free household, and we are still free of them, with plans to stay that way for the foreseeable future. (Could you tell?)

As my wise grandfather once said, "Don't buy nothin' that eats."

Conspicuous Consumption

In a recent read of mine (Thorstein Veblen's Theory of the Leisure Class), the author takes on describing the wealthy of the world. Though he spends most of the book working up a theory on which to base this, here's the argument:

Society is full of people who like to have power. People used to possess power by being physically strong. However, people now equate power with money. Unfortunately, merely having money isn't enough to show other people, due to invisibility of assets and various cultural taboos. So instead, people show that they are rich by buying things. Things that they don't need, and probably that nobody needs. (I'm looking at you, Maserati.) Veblen terms this "conspicuous consumption".

Quick case study: a $10,000 purse. The value of a purse is quite understandable, but models costing ten grand? Why do they exist? Because people want to show how much power they wield. A $10,000 purse isn't just a purse—it's a declaration. ("I have so much money that I can drop $10,000 on a purse.") This defines much of the "luxury market".

When purchasing something, if I think about how it will "make a statement" to someone (even me!), a red flag pops up in my mind. There are more important things than making statements.

Knowing When You're Buying a Commodity

When aspirin first hit the market, it was exclusively produced by Bayer. Nowadays, it's available from a hundred different sources. And it's the same, no matter where you buy it. This transition from a "differentiated product" to a "commodity" happens in many arenas. Telling the difference is important.

Commodities are, by definition, the same no matter who supplies them, so the lowest price wins. Take, for example, baking soda. Arm and Hammer might be the most recognizable brand of baking soda, but what difference is there between A&H and a store brand? They're both the same chemical formula, so the only real difference is the box.

Oh, and the price.

On the other hand, there are lots of products that successfully differentiate themselves—if you're buying a new car, for example, choosing the cheapest one available might not be the best move. Careful evaluation of the benefits offered by each model is time well spent.

A lot of markets fall somewhere in between these two classifications. For example, garbage bags might look all the same, but while they all may serve the basic purpose of holding trash, thinner plastic might result in rips, tears (in the bag, not from you), and frustrating spills.

Soda pop is another iffy one. I don't drink soda, and I'm not very discriminating in my soda taste. So to me, if I needed a cola for some reason, I would be just as likely to pick a store brand (Shasta?) as name-brand Coke. Which would you pick? To me, a cola is a commodity, so the lowest price wins. If you perceive a difference in the value (taste) provided by different colas, you might decide differently.

But if you're buying baking soda, consider the possibility that paying more for a name brand is just that: paying for the brand.