is that it’s about shades of grey. Most of us don’t believe everything we see on the web, anyone who does has an antiquated conception of reality. There are no 100% reliable sources of information. Even the academically revered ‘peer reviewed’ journal system is flawed as it is strife with political intrigue and in-fighting (having said that, any academic report should rest solely upon the shoulders of peer reviewed articles if for no better reason then it’s tradition, as is the need to regurgitate mundane reports in academia - Self forfilling, no?). Basically, a source of information is reporting what he believes (which may or may not be ‘true’) or/and what he wants you to believe (which may or may not be ‘true’), this report may or may not be ‘validated’ by others in the field or interesting data/statistics/video/eye witnesses or by nothing but hearsay. This doesn’t mean that the report is necessarily ‘true’ or 'not true.' It only means that someone took the time (and not philanthropically; there is an agenda, the least of which could simply be self-validation) to report on something.
What your actually arguing about is levels of trust; whether wiki* is trustable. This depends soley on what you need the information for – if it’s a casual question of no real significance, then sure, wiki is a great first source for looking up something that may have come up in conversation. However if the question is important, most savvy internet users will search several web pages (some of which may be blog reports like this one, which, let’s face it, are the e-reincarnation of over-the-fence gossiping) to create a holistic impression from which to draw conclusions. This is the way people use the web as the web is interactive, not like being spoon fed items of ‘interest’ from the TV, paper or radio. With this in mind, it is always beneficial to know a little more about a source of information so that you can more ‘correctly’ create your holistic impression, and so I applaud Mr. Griffith along with Mr. Michael (as well as wiki* for just being there and doing its thing) while at the same time ‘tsking’ Mr. Michael for insinuating that the general public is gullible enough to believe that "if it’s on the web (and in this case, wiki*), it must be true… "
My wife has a great, free and ethical method of keeping food cool in a hotel. We often have leftovers when we eat out and no fridge at the hotel. Her solution is to a bunch of ice into the ice bucket, place the leftovers on top and then put the lid of the ice bucket (or something else) over the carry-out/leftover box. Keeps it cool until the next day. If you're driving, just toss in a small cooler for snacks while driving and to keep things cool at the hotel.
Too bad we don't do things this way here in the U.S. (lotteries done the European way)! Also your money saving/dice idea is brilliant and even more so when it reminds us (me) that every LITTLE bit counts! Why wait for the big chunks when the little ones build so nicely, too :)
It sounds like your real answer is to put it into savings. So you could say that you plan to glom it on to your big lump of money. But it sounds like your new idea for an answer is much more fun and can lead to a more interesting conversation.
This now sounds like the problem I have with birthday money. Which thing that I want so much that I was going to buy anyway will I now honor my giver by getting right away? When I was poorer, I could usually think of something special sounding that I was putting off. Now it's not so easy. I've learned to put things on an Amazon wish list and then refrain from buying anything from it before holidays. Then people can either directly or indirectly get me things from there.
You are right that we should have contacted you. I've taken down the picture for now. It is a beautiful picture. I will contact you via Flickr mail for permission to use your picture in future articles. Thanks!
edited to add: I just exchanged Flickr mail with imageining. He has graciously given us his blessing to use his picture for this article. Thanks!
On the contrary, I think your calculations are exactly right.
Suppose you go to a loanshark and say, "The guy who was supposed to buy the wine for our party is stuck in traffic and won't get here until after midnight, but I need $2754 right now!"
The loanshark (being keenly aware of the discounts available in the retail wine business) says, "Okay, I'll loan you $2754 right now, but I'll send my boys over first thing tomorrow and you'd better have $3240 or you'll be needing some very expensive knee replacement surgery that afternoon."
What interest rate is the loanshark charging? He's charging $486 on an overnight loan of $2754. That's 17.6% per day or 6441% per year simple interest. If he can compound that return daily for a full year he would be able to buy the entire known universe before it was over. He'd probably run into some practical limitations before he reached the full 159 octilion dollars he could expect from lending out the 364th day's mere $135 octillion at 17.6% for one last day.
And, of course, those practical limitations are directly connected with the ones I referred to in my article. Stockpiling only provides these outsized returns for things you're going to buy anyway. There is no rate of return on stuff that you weren't going to use.
Thanks for addressing this issue. It's too scary and overwhelming for me to research, so I keep my head in the sand. Thanks for being so frank about this daunting situation.
Lucille, 40% is an awfully large profit margin. Where did you find that number? Picking a large health insurance company at random, Aetna has a 10% pre-tax profit margin and a 6% net profit margin. I really doubt the CEO gets 30% of their revenue as a paycheck. :)
I think there are a few easily solvable problems with health care that would make a big difference.
1. Takes too long and costs too much to become a doctor. Like another commenter said, India produces very good doctors -- and guess what, they finish in like half the time as US doctors because they don't require a 4-year degree BEFORE medical school. That's a silly requirement we have that increases debt and time spent in school.
2. Medical school classes are TINY and the schools are incredibly selective. Maybe we need to expand enrollment and have tiers for doctors depending on how well they did school. After all, you don't need the best doctor in the world to check your sprained ankle or diagnose your case of strep throat. Save the best doctors for the challenging cases (and pay them more), and let mediocre doctors dispense penicillin, etc.
3. Too much regulation over medication. Medicine is definitely a component of the high cost of health care today, and it's ridiculous. By reducing regulation I don't mean lowering quality, but just simple things like allowing re-importation of drugs (not from poor developing countries, but why should we be subsidizing costs for rich European countries?). Also, more medicines should be available without prescription.
I see a lot of myself in "the Monk". I went through similar experiences, with the addition of the credit card onslaught when I started University. I had my dozen or so credit cards I got after falling for the "free shirt" trick on the first day of University. That followed by a string of high paying jobs, and feeling like I was on top of the world, but never setting aside money. And to top it off, losing a small fortune on stocks. I learned my lesson when I found myself sleeping on a friend's couch, with all my belongings either trashed or standing in one small corner of his living room.
Now I budget like I should have before, its been a few years, but I have a small nest egg, have money invested, even have my son's college fund going. At current rates, my son won't have to worry about tuition his first year, and he isn't even a year old yet.
I appreciate the humor in this article, but I think Ryan has a good point. The problem with comparing it to an interest bearing account over the course of a year is the year part. You didn't spend $9 a day, you spent $2754 all at once. Also, the return on your investment happens all at once, too, so there shouldn't be any compounding.
To get even more outrageous numbers, why not say this: I buy 360 bottles of wine in bulk for $2754. I have a party with 360 guests and use all of the wine in one night. If all 360 guests brought their own wine (bought individually), it would cost $3240. Therefore my return in ONE DAY was 17.6%. An interest bearing account, compounding daily, equivalent to that would need to advertise a 1.176^365 = 5.78% * 10^25 APR! Yes, that's almost 58 SEPTILLION PERCENT APR, woooo!
I think my way is a valid way to look at it--arguably the best way.
Suppose you did invest the $2754 in an interest-bearing account and then drew out $9 each day to pay for your wine. If the account earned 5% interest, it would run dry after 313 days. The only way it would pay out $9 per day for 360 days would be if it paid an interest rate of 33.35%, just as I said. (As an earlier poster suggested, if a bank actually paid that nominal rate, they'd be sure to claim in their ads that the compounded rate was 40%.)
If an alternative investment would have to pay that rate to stay even, I say that my calculation of the return is not only perfectly reasonable, but actually correct.
Great advice, although I disagree with the math. If you spend $2754 today in order to pay for $3240 worth of wine that you would have paid in increments, your return is simply $(3240-2754)/2754. Actually less, since assuming your would have invested the 2754 in an interest bearing account.
Often the reason name brands are so expensive is to fund the advertising and branding they use, in turn getting them more customers and more money which they can use to promote their supposed 'improved' versions, it doesnt necessarily mean they are a great deal better. So long as the store is reputable i would say go for it as they are likely to be pretty much the same! (on a less relevant note, in the pharmaceutical industry many things such as sleeping tablets and painkillers are exactly the same - they arrive in bulk to factories and the exact same tablets are put in different packaging. Its the brand reputation which they built up with advertising which allows them to charge more for the same things)
Along the lines of Alka Seltzer for acne, a very popular tip exchanged on several beauty and skincare forums is the "aspirin mask:" crush 3 or 4 aspirin tablets in the palm of your hand, wet them with just enough water to make a slurry out of them, and apply like a mask (it won't be completely even and it won't dry; that's ok). Leave on for a few minutes, then rinse off. The key is to use uncoated aspirin so it will dissolve right away. Usually that also happens to be the cheapest generic store brand. This concoction is hugely popular for all types of skin, it works somewhat like very mild dermabrasion and the price can't be beat.
I heard about the hairspray on ballpoint ink trick in the past. Milk is another substance that will remove ink from fabric. With any of these things it's a good idea to test on a concealed area first if you are trying it on a delicate fabric (or leave it to a professional if the garment is both delicate and important!).
I'm glad that this article resonated with people as much as the process did personally for me. Those who knew the "old Nora" are surprised at how relaxed I am now that life is so much simpler!
Fabulously Broke: I love your blog, and your lifestyle too! Modern Nomads....has a nice ring to it.
I do occasionally miss the lifestyle I once had, but I also wouldn't trade my experiences as a Professional Hobo in for anything. It can actually be quite enlightening. In fact, it freed myself and my boyfriend up to take advantage of an opportunity to move to Hawaii in a month! (cue in sounds of ukelele and ocean waves)
I have a friend who is quite well of and she can get a disount on anything! She is amazing, always polite, but never pays full price. I am hopeless at asking for discounts. I think it is one of those skills that is very subtle and some people have a knack for it. She learned from her parents and they were wealthy too.
When accompanying my parents on a furniture shopping trip my wife and I decided we would like a table for our new house. As my parents were buying a suite and expensive coffe table I jumped in on their negotiations and asked if I could get the table onto that order and an extra 10% off. The sales clerk was very obliging and thats how I got 60% off in a half-price sale.
Actually Orbitz and the like are NOT the cheapest way to get a room. Often it's at the hotel's website directly. Many of the larger chains now offer a Best Rate Guarantee which means you will not find a cheaper rate elsewhere. Also if the room you book allows cancellations up until the day you're staying, keep checking the rates as I've seen them go down closer to your desired stay. In that case book again and then cancel the original order.
is that it’s about shades of grey. Most of us don’t believe everything we see on the web, anyone who does has an antiquated conception of reality. There are no 100% reliable sources of information. Even the academically revered ‘peer reviewed’ journal system is flawed as it is strife with political intrigue and in-fighting (having said that, any academic report should rest solely upon the shoulders of peer reviewed articles if for no better reason then it’s tradition, as is the need to regurgitate mundane reports in academia - Self forfilling, no?). Basically, a source of information is reporting what he believes (which may or may not be ‘true’) or/and what he wants you to believe (which may or may not be ‘true’), this report may or may not be ‘validated’ by others in the field or interesting data/statistics/video/eye witnesses or by nothing but hearsay. This doesn’t mean that the report is necessarily ‘true’ or 'not true.' It only means that someone took the time (and not philanthropically; there is an agenda, the least of which could simply be self-validation) to report on something.
What your actually arguing about is levels of trust; whether wiki* is trustable. This depends soley on what you need the information for – if it’s a casual question of no real significance, then sure, wiki is a great first source for looking up something that may have come up in conversation. However if the question is important, most savvy internet users will search several web pages (some of which may be blog reports like this one, which, let’s face it, are the e-reincarnation of over-the-fence gossiping) to create a holistic impression from which to draw conclusions. This is the way people use the web as the web is interactive, not like being spoon fed items of ‘interest’ from the TV, paper or radio. With this in mind, it is always beneficial to know a little more about a source of information so that you can more ‘correctly’ create your holistic impression, and so I applaud Mr. Griffith along with Mr. Michael (as well as wiki* for just being there and doing its thing) while at the same time ‘tsking’ Mr. Michael for insinuating that the general public is gullible enough to believe that "if it’s on the web (and in this case, wiki*), it must be true… "
My wife has a great, free and ethical method of keeping food cool in a hotel. We often have leftovers when we eat out and no fridge at the hotel. Her solution is to a bunch of ice into the ice bucket, place the leftovers on top and then put the lid of the ice bucket (or something else) over the carry-out/leftover box. Keeps it cool until the next day. If you're driving, just toss in a small cooler for snacks while driving and to keep things cool at the hotel.
Too bad we don't do things this way here in the U.S. (lotteries done the European way)! Also your money saving/dice idea is brilliant and even more so when it reminds us (me) that every LITTLE bit counts! Why wait for the big chunks when the little ones build so nicely, too :)
Yep. If you take great pleasure in a windfall, then this is a way to treat yourself to one now and again.
It sounds like your real answer is to put it into savings. So you could say that you plan to glom it on to your big lump of money. But it sounds like your new idea for an answer is much more fun and can lead to a more interesting conversation.
This now sounds like the problem I have with birthday money. Which thing that I want so much that I was going to buy anyway will I now honor my giver by getting right away? When I was poorer, I could usually think of something special sounding that I was putting off. Now it's not so easy. I've learned to put things on an Amazon wish list and then refrain from buying anything from it before holidays. Then people can either directly or indirectly get me things from there.
You are right that we should have contacted you. I've taken down the picture for now. It is a beautiful picture. I will contact you via Flickr mail for permission to use your picture in future articles. Thanks!
edited to add: I just exchanged Flickr mail with imageining. He has graciously given us his blessing to use his picture for this article. Thanks!
Congratulations, Mat!
What a feeling of accomplishment, huh? Too bad the recovery almost always involves hitting "rock bottom" first.
Thanks for using my picture. It would've been nice to be notified! Common curtesy. Thanks.
@Jon:
On the contrary, I think your calculations are exactly right.
Suppose you go to a loanshark and say, "The guy who was supposed to buy the wine for our party is stuck in traffic and won't get here until after midnight, but I need $2754 right now!"
The loanshark (being keenly aware of the discounts available in the retail wine business) says, "Okay, I'll loan you $2754 right now, but I'll send my boys over first thing tomorrow and you'd better have $3240 or you'll be needing some very expensive knee replacement surgery that afternoon."
What interest rate is the loanshark charging? He's charging $486 on an overnight loan of $2754. That's 17.6% per day or 6441% per year simple interest. If he can compound that return daily for a full year he would be able to buy the entire known universe before it was over. He'd probably run into some practical limitations before he reached the full 159 octilion dollars he could expect from lending out the 364th day's mere $135 octillion at 17.6% for one last day.
And, of course, those practical limitations are directly connected with the ones I referred to in my article. Stockpiling only provides these outsized returns for things you're going to buy anyway. There is no rate of return on stuff that you weren't going to use.
Thanks for addressing this issue. It's too scary and overwhelming for me to research, so I keep my head in the sand. Thanks for being so frank about this daunting situation.
Great idea, Philip! What an interesting way to surprise yourself and view money in a different way psychologically.
I too, am a budgeter, but I can appreciate the fun aspect in an idea like this. It keeps things interesting!
Lucille, 40% is an awfully large profit margin. Where did you find that number? Picking a large health insurance company at random, Aetna has a 10% pre-tax profit margin and a 6% net profit margin. I really doubt the CEO gets 30% of their revenue as a paycheck. :)
I think there are a few easily solvable problems with health care that would make a big difference.
1. Takes too long and costs too much to become a doctor. Like another commenter said, India produces very good doctors -- and guess what, they finish in like half the time as US doctors because they don't require a 4-year degree BEFORE medical school. That's a silly requirement we have that increases debt and time spent in school.
2. Medical school classes are TINY and the schools are incredibly selective. Maybe we need to expand enrollment and have tiers for doctors depending on how well they did school. After all, you don't need the best doctor in the world to check your sprained ankle or diagnose your case of strep throat. Save the best doctors for the challenging cases (and pay them more), and let mediocre doctors dispense penicillin, etc.
3. Too much regulation over medication. Medicine is definitely a component of the high cost of health care today, and it's ridiculous. By reducing regulation I don't mean lowering quality, but just simple things like allowing re-importation of drugs (not from poor developing countries, but why should we be subsidizing costs for rich European countries?). Also, more medicines should be available without prescription.
I see a lot of myself in "the Monk". I went through similar experiences, with the addition of the credit card onslaught when I started University. I had my dozen or so credit cards I got after falling for the "free shirt" trick on the first day of University. That followed by a string of high paying jobs, and feeling like I was on top of the world, but never setting aside money. And to top it off, losing a small fortune on stocks. I learned my lesson when I found myself sleeping on a friend's couch, with all my belongings either trashed or standing in one small corner of his living room.
Now I budget like I should have before, its been a few years, but I have a small nest egg, have money invested, even have my son's college fund going. At current rates, my son won't have to worry about tuition his first year, and he isn't even a year old yet.
I appreciate the humor in this article, but I think Ryan has a good point. The problem with comparing it to an interest bearing account over the course of a year is the year part. You didn't spend $9 a day, you spent $2754 all at once. Also, the return on your investment happens all at once, too, so there shouldn't be any compounding.
To get even more outrageous numbers, why not say this: I buy 360 bottles of wine in bulk for $2754. I have a party with 360 guests and use all of the wine in one night. If all 360 guests brought their own wine (bought individually), it would cost $3240. Therefore my return in ONE DAY was 17.6%. An interest bearing account, compounding daily, equivalent to that would need to advertise a 1.176^365 = 5.78% * 10^25 APR! Yes, that's almost 58 SEPTILLION PERCENT APR, woooo!
I think my way is a valid way to look at it--arguably the best way.
Suppose you did invest the $2754 in an interest-bearing account and then drew out $9 each day to pay for your wine. If the account earned 5% interest, it would run dry after 313 days. The only way it would pay out $9 per day for 360 days would be if it paid an interest rate of 33.35%, just as I said. (As an earlier poster suggested, if a bank actually paid that nominal rate, they'd be sure to claim in their ads that the compounded rate was 40%.)
If an alternative investment would have to pay that rate to stay even, I say that my calculation of the return is not only perfectly reasonable, but actually correct.
Great advice, although I disagree with the math. If you spend $2754 today in order to pay for $3240 worth of wine that you would have paid in increments, your return is simply $(3240-2754)/2754. Actually less, since assuming your would have invested the 2754 in an interest bearing account.
Often the reason name brands are so expensive is to fund the advertising and branding they use, in turn getting them more customers and more money which they can use to promote their supposed 'improved' versions, it doesnt necessarily mean they are a great deal better. So long as the store is reputable i would say go for it as they are likely to be pretty much the same! (on a less relevant note, in the pharmaceutical industry many things such as sleeping tablets and painkillers are exactly the same - they arrive in bulk to factories and the exact same tablets are put in different packaging. Its the brand reputation which they built up with advertising which allows them to charge more for the same things)
Along the lines of Alka Seltzer for acne, a very popular tip exchanged on several beauty and skincare forums is the "aspirin mask:" crush 3 or 4 aspirin tablets in the palm of your hand, wet them with just enough water to make a slurry out of them, and apply like a mask (it won't be completely even and it won't dry; that's ok). Leave on for a few minutes, then rinse off. The key is to use uncoated aspirin so it will dissolve right away. Usually that also happens to be the cheapest generic store brand. This concoction is hugely popular for all types of skin, it works somewhat like very mild dermabrasion and the price can't be beat.
I heard about the hairspray on ballpoint ink trick in the past. Milk is another substance that will remove ink from fabric. With any of these things it's a good idea to test on a concealed area first if you are trying it on a delicate fabric (or leave it to a professional if the garment is both delicate and important!).
Thanks for the comments everybody!
I'm glad that this article resonated with people as much as the process did personally for me. Those who knew the "old Nora" are surprised at how relaxed I am now that life is so much simpler!
Fabulously Broke: I love your blog, and your lifestyle too! Modern Nomads....has a nice ring to it.
I do occasionally miss the lifestyle I once had, but I also wouldn't trade my experiences as a Professional Hobo in for anything. It can actually be quite enlightening. In fact, it freed myself and my boyfriend up to take advantage of an opportunity to move to Hawaii in a month! (cue in sounds of ukelele and ocean waves)
Nothing new...
Uri Geler did the same few years ago..
Jet Dry is a rinse toe stop spots streaks while drying
I have a friend who is quite well of and she can get a disount on anything! She is amazing, always polite, but never pays full price. I am hopeless at asking for discounts. I think it is one of those skills that is very subtle and some people have a knack for it. She learned from her parents and they were wealthy too.
When accompanying my parents on a furniture shopping trip my wife and I decided we would like a table for our new house. As my parents were buying a suite and expensive coffe table I jumped in on their negotiations and asked if I could get the table onto that order and an extra 10% off. The sales clerk was very obliging and thats how I got 60% off in a half-price sale.
Actually Orbitz and the like are NOT the cheapest way to get a room. Often it's at the hotel's website directly. Many of the larger chains now offer a Best Rate Guarantee which means you will not find a cheaper rate elsewhere. Also if the room you book allows cancellations up until the day you're staying, keep checking the rates as I've seen them go down closer to your desired stay. In that case book again and then cancel the original order.
I prefer to reduce all furniture and move quickly, because i prefer fashionable design