The news is out that Borders book store is no longer. As I consider this, I wonder if it’s a sign that books are going the way of the 8-track, cassette, LP, and VHS tape. Or is it an indication that book stored were meant to be independent stores, the neighborhood book store that still seems to be out there but in fewer numbers over the decades. I Google “book store” and up pops nearly a dozen local shops, all closer than my Borders location that will close soon. Maybe Boarders closing will give these stores a bit of a second wind, as I’ll probably stop in them a bit more often. There’s a bigger question, however, as Amazon reported sales of eBooks passed sales of physical books not too long ago, are printed books going the way of the dinosaur? Does it matter? Is there more to a book than the words it contains? As the Kindle commercial mocks, is there something about the feel of a book in your hands, the ability to dog-ear a page and perhaps even write in the margins or highlight some text you’d like to review?

On the other hand, is there a benefit that goes beyond paper in being able to hyperlink words in an eBook, to pull up a definition of an obscure word, or to link to an article that goes into greater detail on the topic? An eBook will also let you search for a word or phrase in seconds while the physical book make take a lot of flipping to find the passage you seek.

Garrison Keillor recently wrote an article titled ‘The end of an era in publishing.” It’s not eBooks that bother him, but rather the barrier to entry is gone. He pines not just for the typewriter, but for the days of a publisher that had to read your work and accept it. Today, whether it be a print-on-demand or eBook, anyone can write what they wish and offer their work to the public.

I find myself torn. I’m not ready to cut loose from paper altogether, but I do appreciate the convenience and compactness of the electronic book.
Are you giving up paper? Have you gone 100% electronic or are you still deciding between physical and virtual?

written by JOE \\ tags: Book, kindle, publishing

I recently read and enjoyed Super Freakonomics. The book was a worthy sequel to its predecessor, of course, titled Freakonomics.  Unlike most other books I’ve read, it’s tough to put in a few words what the underlying theme of this book is.

Instead, I’ll offer my take on a few of the anecdotes the book presents, and not assume that you are familiar with either the original book or the co-authors and their work.

Global Warming, not. If there is such a thing, its source isn’t any of the energy related fuels that are routinely blamed. Instead, it’s cows and the methane they produce. Increasing wealth across the world had shifted the demand from grain to meat and this shift is ultimately the cause. The Mount Pinatubo eruption? It actually helped cool the planet a bit, negating nearly a hundred years worth of observed warming. (I am not saying I agree with their conclusions, just sharing them. A number of scientists have spoken again these claims.)

Next, there is a discussion of suicide bombers and the criteria that one would use to discover them in a large population. Unfortunately, even a 1/10 of 1% false positive means that when analyzing a group of say 100,000 suspects, there will be 100 innocent people who are falsely accused. One factor in the data mining is that suicide bombers don’t buy life insurance, at least not until this book was published.

You drink just a bit too much at a party, and live just a mile or so from home, do you walk or drive? We are offered data that suggests it may be safer for you to drive, as you may have a lower chance of injury per drunk mile driven vs walked. (Disclaimer – Don’t do either. Get a ride from a sober person or call a cab.)

Last, a look at the impact of The Club (a metal anti-theft device that goes across a car steering wheel) vs LoJack (a hidden transmitter used to track a car after it’s stolen) and how the visible Club effectively says to move on to the next car, while LoJack has every thief wonder which cars are protected. Interesting way of comparing these two anti-theft devices.

You see, the chapters within the book skip from one seemingly unrelated topic to the next but still maintains an overall feel. Sort of an economist looking at the world through some strange glasses  and sharing his observations. Have you read this book, or the original? What did you think of them?

Joe

written by JOE \\ tags: book review, economics, freakonomics

The Upside of Irrationality, The Unexpected Benefits of Defying Logic at Work and at Home, is the sequel to Dan Ariely’s Predictably Irrational, which I discussed in June.

I have to say, I enjoyed Dan’s first book enough that I had pretty high hopes for the sequel, and I was not disappointed. Similar to Predictably Irrational, we are walked through a series of experiments that offer a view as to how we approach certain decisions and how we are motivated.

One experiment we are offered is to try to understand the connection between payment and performance. The assumption of “pay for performance” may be more theory than reality it would seem, as one experiment which upped the ante on some simple tasks to a level of three weeks pay for only an hour’s work showed that the pressure of higher potential earnings actually decreased performance. As budgets for academic studies of this nature tend to be limited, this experiment was conducted in India, where the wages were lower than in the US.

In another example, we are introduced to the demotivation that follows work that’s discarded. For the experiment, people are paid to assemble a lego structure, one after the next. The demotivation came as for one group of builders, their structure was taken apart right in front of them. For those who saw their creation kept in tact, they worked longer and were happier doing so. This may seem ridiculous, but I’ve witnessed real life examples. Engineers whose designs were completed, on time, under budget, fully functional, yet, for whatever reason, found their project canceled. Such engineers don’t last long at companies that don’t value their work.

These two examples I offered are also discussed in an interview with NPR’s Robert Siegel in his interview with Dan Ariely, Exploring The ‘Upside Of Irrationality‘. You can listen to the interview or read the transcript, as you wish.

I’d also like to mention that Dan Ariely has a blog in which he stays pretty active, conducts experiments, and offers links to his videos. A great site to explore the topics introduced by these books.

FTC disclaimer – I borrowed this book from my library and was not compensated for this article.

Joe

written by JOE \\ tags: behavior, book review, dan ariely, market norm, predictably irrational

Predictably Irrational, The Hidden Forces That Shape Our Decisions, was published in 2008, but somehow just came to my attention recently. As with any good book, I’m sorry I hadn’t heard of it sooner, but sometimes the forces that be come together in my favor, as the author Dan Ariely has written a sequel titled The Upside of Irrationality which by coincidence, is due in stores today.

If I haven’t made it clear, I found this book to be a fascinating read. In a genre similar to Freakonomics, Dan offers a series of anecdotes and experiments which he weaves into his central premise, that people act in an irrational,  yet predictable way. I could share a number of those with you, and suggest you read the book for a more thorough analysis, but instead, allow me to share with you examples from my own life that reflect the exact phenomenon Dan described.

A few weeks back, I found myself in a store called Lush, purveyors of bath and body items and home of the $7.95 for 3.5oz bar of soap. Yes, that’s $36.34 per pound, and about 25 times my benchmark price for soap spending. This was with my 11 year old daughter, and the total, $46, was a month’s allowance or about 8 hours of time spent babysitting. The cashier looks at us and says “you get a free bar with a $50 purchase.” So, like an idiot, I tell her to grab two bars she’d like and I paid the difference. Spending $7.95 for two bars of soap made no sense, really, but as Dan described, a similar situation took place when Amazon started offering free shipping for orders over $25. You buy a $19.95 book, and see that just $5.05 more will get you free shipping, so of course, you buy another book, one you may not have really wanted or could have gotten from the library.

Next, my daughter’s aunt and grandmother had given her Starbucks gift cards during our last visit. I then observed how she used the cards over the next few weeks, treating friends to drinks, or asking if I wanted to go, offering to pick up the tab. She’s generous by nature, but it was clear to me that she was more so when it was not with her own cash. Holding a gift card in her hand made a difference in how she treated the $50 of value locked in that plastic. Dan shared similar stories of controlled experiments determining how people treat a gift card or credit card differently than cash.

Last, Dan offers an interesting discussion of social norms vs market norms. You wouldn’t approach your mother-in-law after a fine Thanksgiving meal and offer her the perceived value of the meal, that’s not quite socially acceptable. Yet, there are times when the social and business collide. I’ll offer a recent example from my family. Last year, our daughter expressed an interest in babysitting/mother’s helping. At 10, we felt she was mature enough to help out a mom so she could study for an upcoming exam while my daughter watched her little one in the next room. Worked out great. Skip ahead to this year. A mom who happens to be a close friend of ours drops her 4 year old off and we all kind of hang around the house. When she picked her up, somehow my wife tells her to keep her money. Of course, my daughter waits until our guests are gone and asks what just happened. So my wife pays her, and in turn, I ask what just happened. How did I just get stuck paying my own daughter to watch someone else’s child and more important, how do we spell out when payment is expected (by my daughter)?

After reading Predictably Irrational, I gained new insight into situations that I ran into as well as a different perspective on some just passed. I hope my own stories helped illustrate just how easily the lessons of this book can be applied you own life. In some cases, you might just understand better how you just paid $8 for a dollar’s worth of soap, other times, it might help you change the direction you might take in the decision process.

If you read it, please share your own thoughts on this great book. Are you or your friends predictably irrational too?

Joe

written by JOE \\ tags: behavior, book review, market norm, predictably irrational

Charles Dickens’ David Copperfield was first published in 1908*, and this quote is from that book:

I don’t know if Dr Thomas Stanley, author of Stop Acting Rich, is aware of this quote, but after read his latest book, I suspect he’d agree wholeheartedly with the sentiment.

If you are looking for investment advice, this is not the book for you. Dr Stanley does not offer stock tips or advice on retirement planning. He has spent the better part of the last three decades studying the habits and writing about millionaires. His conclusion is that “most people will never earn enough money to become wealthy and to be hyperconsumers at the same time.” Stop Acting Rich offers examples of how the millionaires Dr Stanley observed lived, and teaches us how to make the distinction between the Income Statement Affluent (IA) and the Balance Sheet Affluent (BA). We see how it’s easy for a doctor earning $250,000/yr to live a lifestyle that has every dollar spent and maybe then some, yet a teacher or engineer whose family income may be ‘just’ in the mid-$100K but living beneath their means, managing to save their way to wealth.

Through the book we are shown brand examples, Timex vs Rolex for the choice of watches for instance. Real millionaires tend to not waste their money on the thousand dollar watches, preferring Seiko or Timex. As a fan of statistics and data, I appreciated the depth of analysis showing the correlation between real wealth and living the glittering rich life with no assets to show for it. In fact, it’s often tough to tell just by looks what someone’s balance sheet looks like. Most rich folk do not own vacation homes, boats, or planes. I recall an interview with Warren Buffet, who trades off year to year for the spot of richest man in the US. Mr Buffet was asked about boats, and he said that he had no interest in them, that when you’re Warren Buffet, you get invited on other people’s boats enough that you can avoid the hassle of maintaining one. He said that he was happy to spend time with his friends in his living room watching the 46 inch plasma TV and eating sandwiches. No champagne, no caviar.

A fair amount of writing is given to the discussion of Grey Goose Vodka and how its purchase correlates to glittering rich. Grey Goose buyers tend to drive prestige makes of cars, wear Rolex watches, drink other high end spirits, and spend more dining out. So as I was reading about this, I checked out my pantry (I don’t have a liquor cabinet) and sure enough, Grey Goose. Last I recalled, we had a bottle of Absolut or Smirnoff in there. I asked my wife if someone brought it over and she told me that the last time her sister was over she asked her what her preferred vodka was. Two thoughts came to mind as I heard this. First, for the bottle that will likely last over a year, $15 or $50 won’t ruin our budget. Second, given the details about how there’s little difference in vodka as it’s known for its lack of taste, my dear sister in law fell for the advertising pitch, and my dear wife, trying to make her sister feel welcome in our home, threw away an extra $20 or $30 to do so.

I enjoyed this book as much as I did prior books in Dr Stanley’s Millionaire series. It helped validate my own choices in cars (Toyota, built in the USA, by the way) watches (Timex) and other purchasing decisions that help keep my family on a path toward a stronger balance sheet. If you’d like to understand what the rich really buy, and wear, and where they go to eat, take some time and read this book, you’ll be surprised.

Joe

*Note: One of my faithful readers, Elle, alerted me that the date was 1850. Thanks Elle, I fact check my finance data a bit better than this. I promise.

written by JOE \\ tags: book review, Frugal, millionaire, rich, richistan, wealthy

Give Me Get Me Buy Me is the title of Donna Corwin’s recent book. Subtitled Preventing or Reversing Entitlement in Your Child’s Attitude, it proved itself to be an interesting read. I’ll first offer the mandated FTC disclosure, I received a copy of the book in exchange for this review through the kind people at TLC book tours. I am the father of an 11 year old girl and when I read the description, I felt this book fit within my personal goals as well as the scope of my blog.

On one hand, this book is brief, 9 chapters over 180 pages in a trade paperback. On the other hand, the author wastes no time tackling the issue at hand, keeping the anecdotes short, as a way of illustrating a given scenario, and offering a path to solving the particular behavioral issue being addressed.

The first  chapter discusses the external pressures which begin innocently enough but result in our creating the sense of entitlement in our children. We want ‘the best’ for our children, don’t we? Once we get beyond the safety issues (yes, the stroller and crib need to be sturdy and safe) we move toward the designer realm and once the train has left that station, we don’t know how to stop. One only need to Google “designer diaper bags“  to understand this point. There is a combination of pressure from the media and from our peers to focus on possessions and to strive for bigger and better status symbols. Advertisers have made an art of convincing us that we need and in fact, deserve, the latest gizmo, larger, flatter TV, bigger house, etc. Our children have become aware of the cars their friends’ parents drive, the size of their houses, the vacations they take. All of this lends itself to a ‘keeping up with the Joneses’ for both parent and child. When this is identified and understood, we can begin to address it.

We move along to better understand how our own views on money, possessions, and instant gratification originated and are passed down to our children. Maybe when we grew up we didn’t have all the things we wanted and are now overcompensating by trying to not have our children want for anything. Perhaps we were spoiled, and having everything handed to us, continue that mentality for the next generation. The author makes no claim to any background in psychology, but from reading this book, this section especially, her understanding of human nature really come through.

Through the rest of the book, the author offers practical, concrete advice to move our child away from the ‘give me’ attitude to one that’s less selfish, less entitled. For the younger child, she suggests a point system, rewarding positive behaviors and actions, while removing points for improper behavior.  For older children, strategies include regular family meetings to keep the dialog going and to set expectations. I was pleased to find an abundance of advice that I plan to adopt in my own attempts at being a better father.

One suggestion I’d offer, perhaps one which the author took for granted, is that unless you are a single parent, both parents need to read this book, together if possible. Any suggestions you’d implement to induce change within the family dynamic should really be a two parent effort. If for no other reason, children should see their parents on the same page for the major issues. It would be quite the failure in communication if the child discovers that mom is the strict “we can’t afford that” parent, yet dad pulls his wallet out at every request (or vice versa). My next step is to leave my copy on my wife’s night table and encourage her to discuss it with me chapter by chapter.

Giveaway: The publisher has offered to share a free copy with my readers. I will hold a random drawing of those who offer a comment to this post. The drawing will be held the weekend of March 27-28. Good luck.

Joe

written by JOE \\ tags: book review, child rearing, entitlement, family