Displacement

When you buy something, you aren't just buying that something. Buying a TV isn't just buying a TV.

It's buying a device that may suck up as much as two months' worth of time per year from your life (yes, on average, people watch that much TV). Further, watching TV actually makes us less happy.

In other words, "buying a TV" is really displacing about 15-20% of your time, and likely displacing an equivalent amount of your happiness.

If you knew that gleaming new TV you were about to buy would actually provide anti-time, anti-enjoyment and anti-happiness, would that change anything?

Let's say you buy one of those meal prep/meal delivery services like Blue Apron or HelloFresh. The benefits (as they are presented to you) are clear and concrete: you'll save time, you won't have to cook, your life will be easier. This is why these services appear worth buying.

But what might this service displace?

It will displace the practice of a basic life skill that, over time, could become increasingly easy for you through use--or increasingly difficult through disuse. It will also displace the act of building efficient grocery shopping skills, yet another basic life skill that gets gradually easier and easier over time. It displaces healthy social activities centered around the practice of cooking. And this is to say nothing about the displacement of all the other things you could do with the money you've spent.

You can certainly drive yourself crazy overthinking this, but it doesn't change the fact that all of our purchases (really, all of our acts and all of our decisions) displace something else that we could otherwise do.

And in the heat of the buying moment it's nearly impossible to focus on the abstract idea of "what a purchase will displace." But because it tends to put the brakes on spending actions, I believe thinking about this idea could be a useful frugality tool to have handy when making any purchase. 

Of course, it goes without saying that the companies selling these items or these services to you do not want you to think about this at all. They want you focused on the easy-to-visualize realm of apparent benefits--benefits that they shape and present to you in order to get you to buy. They don't want you in the abstract realm of displaced activities and displaced happiness.

With all this in mind, I've created a mini-checklist of pre-purchase questions you can ask yourself to help you focus on what that purchase will displace:

1) Am I being humble about the results of this purchase? What incorrect assumptions might I be making about how I'll use (or mis-use) this product or service?

2) Unintended consequences will undoubtedly result from this purchase. Have I considered them? What might they be?

3) Should I hold off on this purchase to think through questions 1 and 2 a bit more?

Readers, what would you add?


See the intelligent and useful book Happy Money: The Science of Smarter Spending by Elizabeth Dunn and Michael Norton for related ideas on this topic.


You can help support the work I do here at Casual Kitchen by visiting Amazon via any link on this site. Amazon pays a small commission to me based on whatever purchase you make on that visit, and it's at no extra cost to you. Thank you!

And, if you are interested at all in cryptocurrencies, yet another way you can help support my work here is to use this link to open up your own cryptocurrency account at Coinbase. I will receive a small affiliate commission with each opened account. Once again, thank you for your support!

[Links] A Recession-Proof Guide to Saving Money on Food

Readers, I'm still doing some traveling, so please enjoy this post from Casual Kitchen's archives--one of the most popular posts from the early years of this blog.
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Here at Casual Kitchen I spend a lot of time writing and thinking about ways to save money on food, and today I thought it would be a great time to run a retrospective of some of our best and most read articles on the subject.

Feel free to peruse the links below for posts on how to cook more efficiently at home, ideas on how to eat well on very little money, and other articles on how to save money in the kitchen.


Recipe Ideas:
All CK Recipes Filed Under "Laughably Cheap"

Money-saving Tips and Ideas:
Ten Tips to Save Money on Spices and Seasonings
A Simple Way to Beat Rising Food Prices
Mastering Kitchen Setup Costs
Eight Tips to Make Cooking At Home Laughably Cheap
How to Get More Mileage Out of Your Cookbooks

Longer Essays on Food Costs:
Stacked Costs and Second-Order Foods: A New Way to Think About Rising Food Costs
Why Spices Are a Complete Rip-Off and What You Can Do About It

Tips on Saving Money while Eating Healthy:
What's the Most Heavily Used Tool in Our Kitchen? Our Rice Cooker.
How to Make Your Own Inexpensive Sports Drink
How to Create Your Own Original Pasta Salad Recipes Using the Pasta Salad Permutator
Two Useful Cooking Lessons From Another Cheap and Easy Side Dish
Fresh Herbs Part 2: Solutions to the Waste Problem

Cooking Strategies and Tactics:
How to Team Up in the Kitchen
How to Apply the 80/20 Rule to Cooking
More Applications of the 80/20 Rule to Diet, Food and Cooking
Seven Ways to Get Faster at Cooking
Ten Strategies to Stop Mindless Eating
Doing Your Favorite Thing: How to Spend Exactly the Right Amount of Money For an Important Celebration



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You can help support the work I do here at Casual Kitchen by visiting Amazon via any link on this site. Amazon pays a small commission to me based on whatever purchase you make on that visit, and it's at no extra cost to you. Thank you!

And, if you are interested at all in cryptocurrencies, yet another way you can help support my work here is to use this link to open up your own cryptocurrency account at Coinbase. I will receive a small affiliate commission with each opened account. Once again, thank you for your support!

Greeting Card SCAM! How to Save $6 (Or More) on Greeting Cards -- and Defeat the Greeting Card Industry Once and For All

Why are greeting cards so ridiculously expensive?

It's hard not to think about the incredibly fat and juicy profit margins of these little folded pieces of paper when you find Mother's Day, graduation and birthday cards priced at $4.99, $6.99, and even $8.99 in your local suburban grocery or drug store. Sure, some have glitter or cute ribbons on them. And bad poetry. But the bottom line is this: greeting cards are one of the most profitable products in modern retailing.

And long term readers of this blog know why: it has everything to do with competition. Or the lack thereof.

While there are plenty of items in our grocery stores sold at fair prices and reasonable markups, there are also certain items sold at unfair prices under surprisingly limited competition. Many branded/advertised foods, the dreaded spice aisle, and of course greeting cards are all good examples of non-competitive submarkets in the grocery/retail world.

Two companies dominate the greeting card aisle, Hallmark and American Greetings, making it one of the least-competitive segments of all of retail. Worse, when consumers need a card for Mother's Day or an almost-forgotten anniversary card for a spouse, they don't care that much about the card's price. Typically, they just need to get the card and get on with their day.

An economist would call this a non-competitive market with minimal price sensitivity. An investor like Warren Buffett would call this a wonderful business,[1] because in markets like these companies can actually raise prices, every year, little by little, and consumers just passively keep buying cards like they always do.

There may appear to be thousands of cards to choose from, the choice is illusory. The market and its egregious prices are under complete duopoly control. And that's why you can hardly find a card for less than $4.99 any more.

Just to focus our attention here: for $4.99 you can buy a paperback book. Or five pounds of pasta. Or three dozen eggs. Or three pounds of lentils! Many of Casual Kitchen's most popular laughably cheap recipes cost less than this.

Looking downfield a little bit, I wonder what the consumer reaction will be to the first basic greeting card that exceeds the $10 price point? It's coming. And here's something really mortifying: at the rate card prices are currently compounding, we could easily be paying $20 for greeting cards in a decade, give or take. [2]

Which brings us to a question: how high does the price of a greeting card have to go before it becomes... insulting? Or even condescending? As in "We, the greeting card industry, have so little regard for you consumers that we expect you to mindlessly pay 60,000% markups for a folded card."

Don't misunderstand: I have no problem paying money for a gift card. But I have a huge problem paying sums of money that are ridiculously divorced from the value we receive from that expenditure. As an empowered consumer, you should too.

So, what do we do? Well, as in many consumer empowerment situations, the answer is "it depends." But a good starting point is to stop using our typical buying patterns. Clearly, the greeting card cabal can easily prey on us if we seek to satisfy our greeting card "needs" the way we always have.

One solution we know won't work: going to another retailer. Remember the simple technique of going to a local ethnic grocery store to find more reasonably-priced spices? This tactic, which worked so well to subvert the non-competitive grocery store spice aisle, isn't effective against the anti-competitive greeting card industry. They've pretty much locked up control of all of the shelf space at all retailers, everywhere.

Which takes us to a more elegant solution, something we might call a modified "don't want it!" technique. Rather than submitting to the greeting card cabal, and paying their prices on their cards, screw 'em. I'm playing this game on my own (much more fun) terms, by making my own cards.

So, for Laura's birthday, this was this year's card:

I muffed the ice cream cone, but that's an exact likeness of Laura.

Sure, we save a little money. But more importantly, Laura LOVED it. She thought this card was hilarious, adorable even. We both got a huge laugh out of it. And it was free. FREE. [3]

And if I can do this with my pitiful artistic ability, you can do better.

Here's the broader takeaway for anyone interested in consumer empowerment: in any anti-competitive marketplace where prices are way out of line with the value we receive, don't buy. Don't be so damn obedient. Figure out another way. Play chess.

Saved six bucks. She's amused (and impressed even) by my artwork.

And on her birthday neither of us was exploited by the greeting card cabal. For once. pic.twitter.com/k3OiVAUEKy

— Daniel Koontz (@danielckoontz) May 16, 2019

Footnotes:
[1] Lamentably, American Greetings and Hallmark are both privately held. Recall elsewhere in Casual Kitchen where we discussed how easy it is to self-fund many of your consumer products purchases by investing in the stock of the company and receiving dividend payments. That won't work here unfortunately.

[2] Don't laugh, hear my math: Assume a $7.99 card and imagine the greeting card cabal gradually raises prices at an average 8% annual rate, consistent with recent pricing activity. In just 12 years, that $7.99 card will have compounded to $20.12. It's coming.

[3] Okay, I lied. It wasn't quite free: the cost was technically 1 sheet of standard copy paper at $7.49 per 500 sheets, or about 1.5c. Thus I provided Laura with an amusing birthday card for less than one 300th of the price of a standard $4.99 greeting card.


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You can help support the work I do here at Casual Kitchen by visiting Amazon via any link on this site. Amazon pays a small commission to me based on whatever purchase you make on that visit, and it's at no extra cost to you. Thank you!

And, if you are interested at all in cryptocurrencies, yet another way you can help support my work here is to use this link to open up your own cryptocurrency account at Coinbase. I will receive a small affiliate commission with each opened account. Once again, thank you for your support!

Frugality and Tradeoffs

Is frugality always worth it? Is it always worth it to trade your time to save money?

And at what point does frugality simply become not worth it?

One of the interesting ironies of frugality is if you get really good at it, you get to a point where you don't have to do it any more. You'll have plenty of money left over because you're using that money as efficiently as possible.

Which then leaves you with a new decision layer: what types of frugality are worth it relative to the tradeoffs in time required?

Grocery shopping gives us an excellent example of this decision layer: A competent frugalista will reduce his or her grocery bill to a point where it takes up a smaller and smaller portion of the household budget. Then, all of a sudden, it stops being worth it to invest an extra 25 minutes driving to another grocery store to buy a couple of cheaper items there. The few bucks you save stops being worth it.

Now, granted, some frugality skills become automatic and thus require no effort. Like buying lower cost unbranded or store brand items. After all, the less expensive product is right there, buying it requires no extra effort. Further, some frugality techniques may remain worthwhile because they offer sustained payoffs. Examples here would be a one-time phone call every few years to renegotiate a cellphone or cable bill, or a quick call to tweak coverage on an insurance bill. That phone call could save you hundreds of dollars a year for years.

And then there are big-ticket frugality decisions that always stay worth it. Replacing a high fee mutual fund with a near-zero fee index fund is a prime example here. This single decision can save you tens or even hundreds of thousands of dollars over the course of an investing career, and the savings differential grows as your assets grow.

In our home we are grappling with this new decision layer too, and I finding I'm retaining the frugality habits I do automatically and habitually, the ones that come naturally to me and don't require any thinking or extra cognitive energy. And then I try to maintain any frugality habit that saves me both money and time, so I can entirely sidestep the money/time tradeoff above. And this often involves avoiding shopping and avoiding buying things entirely, and re-allocating that time to things I'd much rather do. It's another one of frugality's rich ironies.

One last thought. What happens to readers who "get" the value of frugality, learn and then master it… and then master it so well that they don't really need to be frugal any more?

They stop reading blog posts about frugality! It's an interesting second-order question for frugality and budget bloggers to think about.


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You can help support the work I do here at Casual Kitchen by visiting Amazon via any link on this site. Amazon pays a small commission to me based on whatever purchase you make on that visit, and it's at no extra cost to you. Thank you!

And, if you are interested at all in cryptocurrencies, yet another way you can help support my work here is to use this link to open up your own cryptocurrency account at Coinbase. I will receive a small affiliate commission with each opened account. Once again, thank you for your support!

How to Make Quickfix: Better than Gatorade or Powerade and Just Pennies a Serving

Readers, I'll be taking (another!) break from writing for the next few weeks to work on other projects. In the meantime, enjoy this updated post from CK's archives.
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Today I want to share an easy and laughably cheap sports drink recipe borrow and modified from the famous 1980's era fitness book Eat to Win. This recipe has served us very well here at Casual Kitchen: it's healthy, contains no HFCS (quite unlike almost all sports drinks), and it replenishes you during and after even the most grueling hot-weather workouts.

You can make this recipe up in seconds for mere pennies, or you can pay as much as $1.50 to $2.50 for a quart-sized plastic jug of heavily advertised, HFCS-laden Gatorade or Powerade. You're welcome.


Quickfix

Combine:
8 ounces orange juice
24 ounces cold water
1/2 teaspoon salt

Shake well and drink during or after workouts.





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You can help support the work I do here at Casual Kitchen by visiting Amazon via any link on this site. Amazon pays a small commission to me based on whatever purchase you make on that visit, and it's at no extra cost to you. Thank you!

And, if you are interested at all in cryptocurrencies, yet another way you can help support my work here is to use this link to open up your own cryptocurrency account at Coinbase. I will receive a small affiliate commission with each opened account. Once again, thank you for your support!

Cooking Like the Stars? Don't Waste Your Money

Readers, I'll be taking (another!) break from writing for a few weeks to work on other projects. In the meantime, enjoy this post from deep down in CK's archives.
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Is celebrity chef branded cookware worth the extra money? This was the subject of a recent article in the Wall Street Journal.

The article raised two thought-provoking questions:

1) Is it worth it to pay up for a cookware set endorsed by celebrity chefs like Rachel Ray or Emeril Lagasse?
2) What do you really get for your money when you buy chef-branded cookware?

The surprising answers to these questions were 1) no, and 2) surprisingly little.

"A star endorsement doesn't mean stellar cookware."
The anecdotes from the article are depressing. The silicone handle on Rachel Ray's frying pan catches fire during a test use. Emeril Lagasse's 8-inch frying pan bends "like an accordion." And Marcus Samuelsson's 10-piece set, while of solid quality and design, retails for $500.

Tales like these make me want to crawl into my cupboard and hug my humble Revere cookware.

Neither I nor the WSJ mean to pick on these great celebrity chefs who collectively have done so much to bring great cooking to the masses. But let's be reasonable about the relative value of the products they hawk.

If you're trying to cook on a budget, or if you're trying to build out your kitchen at a reasonable cost, don't trip yourself up with a large capital outlay for overpriced cooking gear. And, most importantly, don't pay up for suspect merchandise. If you buy poor quality cookware, or pay too much for what you do buy, it can suck all the fun out of cooking for years.

Instead, stick to a basic but high-quality set of cooking gear that doesn't include extra branding and advertising costs. In our kitchen we've been overjoyed with the quality and durability of our reasonably priced Revere and T-Fall cookware, which we've been happily using for nearly two decades.

You don't need the stamp of approval from a celebrity chef to cook exceptional meals at home.





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You can help support the work I do here at Casual Kitchen by visiting Amazon via any link on this site. Amazon pays a small commission to me based on whatever purchase you make on that visit, and it's at no extra cost to you. Thank you!

And, if you are interested at all in cryptocurrencies, yet another way you can help support my work here is to use this link to open up your own cryptocurrency account at Coinbase. I will receive a small affiliate commission with each opened account. Once again, thank you for your support!

Compounding

We think about the word "compounding" in a needlessly narrow sense. Typically, we consider it only in the context of investment compounding. As in: If I save X dollars a month and it compounds at Y percent, I will have [buttloads of] dollars in 30 years.

Today I want to think about compounding more metaphorically and in a broader context. It's a much more powerful concept than it at first appears.

One aspect of compounding that's always interested me is how, over time, it transforms tiny differences today into enormous future differences. If you can stay patient, that is. Sticking with a simple (and once again, "narrow") financial example for the moment, imagine two median income households in the USA, and consider what happens if one household chooses to save and invest a couple hundred bucks a month while the other saves nothing.

At first, there's next to no difference between these households, either economically or in quality of life. To the typical middle class household, $200 doesn't really feel like all that much money. It doesn't feel like it really matters all that much whether you save it or not. Which is of course why many households fail to choose to save.

However, it's also true that saving a couple hundred bucks a month on a median household lifestyle would involve giving up very little. Hilariously little. Cancelling cable TV and getting a lowish-end cellphone plan would do it. Skipping a few dinners out per month would do it. So would choosing to drive a modest paid-off car rather than driving an expensive debt-financed car. Note also: combining all these steps would produce savings well beyond a couple of hundred dollars per month, all for a trivial change in living standards.[1]

So, for the average American household, is saving a couple hundred bucks a month trivial, or not? Certainly in the short run it may seem so. But in the longer run, these two households--with their "trivial" differences in living standards--will begin to diverge economically. Even at modest compounding assumptions of 7% a year (a reasonable guess at future returns for an ultra-low fee broad market index fund), a savings of $200 dollars a month compounds to an astonishing quarter of a million dollars after 30 years. Quite frankly, it's hard to believe such "trivial" incremental savings can morph into sums like this over time, but it's all thanks to compounding.

And that's just the money side of things--this post isn't even supposed to be about money! The truth is, compounding works in far more ways, on far more levels, and with far more nuance. When you start thinking conceptually about compounding, you begin to see many life domains where things start out very small, yet gradually transform into tremendous results over time. Just like that two hundred bucks, except better.

An example. Let's go back to that household above that decided to practice the act of savings, even at a "trivial" level of $200 a month. Actually, it's not trivial in the least, as we'll soon see.

Adopting this practice (think of it as a kata) will "compound" that family's future ability to navigate a wide range of psychological challenges, like deferring gratification, understanding desire triggers, and other psychologically manipulative aspects of modern consumer society.

Further, the meta-skill of how to get better at saving money also compounds: A family that can find a couple of hundred bucks a month in savings today will get far better at saving over time, leading to substantially more future savings.[2] Note further that once you're in a position where you are regularly producing excess savings, you'll gradually compound your competence at intelligently investing that savings. So, a saver will get better at saving, while also improving at investing, while also managing his psychology better, and so on. Level on a level on a level compounding.

What at first glance appears to be a trivial financial baby step later gives rise to a whole range of powerful skills:

* The ability to get better at saving and investing
* The ability to manage yourself psychologically
* The ability to visualize a future and plan for it
* The ability to maintain discipline and install good habits
* The skill of building skills

Better still, all of these skills compound too. You'll get better over time at each as you practice them, and, fascinatingly, your improvement in each augments improvement in all the others. All of a sudden we're talking about a matrix of second- and even third-order compounding.

And to take it one more step further, someone learning how to better navigate her psychology will improve at identifying instances where her ego subverts her efforts to grow. You could easily argue that ego management and ego suppression are the ultimate cross-domain skills.

At this point, an insightful reader should be able to see all sorts of life domains where these wide-ranging skills play formidable, and compounding, roles. Forget about turning a $200 a month into a quarter million bucks--you're thinking way, way too small!

Pushback
There's a predictable--and cynical--response to these ideas, and it deals with the presumed long-term timeframes involved. The pushback (actually it's an excuse) sounds something like this:

Compounding over 20 or 30 years? Years??? I'm already [insert your age here], which means in twenty to thirty years I'll be [choose an age that sounds old]. It's too late!

Let's start with a screaming logic problem. Obviously, the idea of giving up on doing something because you could have started earlier is a particularly toxic form of defeatism. It's also circular. Everybody starts when and where they start. If your first thought is it's too late for me, you're essentially saying that nothing is ever worth doing because you haven't already started. That sure makes sense.

Further, even the central premise of this complaint is flawed: In nearly all the domains we've discussed above, the compounding of skills is so rapid that you don't have to wait 20 or 30 years to get big results.

To see what I mean, think about the central topic of this blog: cooking easy, healthy and laughably cheap meals. This is based on the above skills of a) managing yourself psychologically, and b) visualizing a future and planning for it. Miraculously, you only have to "compound" of a habit of cooking simple and low-cost meals at home for a few weeks to develop substantial competence in effortlessly putting healthy, low-cost meals on your table.

Another example: in his brilliant book How to Be an Imperfectionist, Stephen Guise shows us how a laughably minimal exercise habit of "one pushup" quickly compounds into a well-grooved, consistent fitness habit. Forget years of compounding--that process took more like twenty to thirty days. Psychologically speaking, 20-30 days is about how long it takes us to permanently install a brand new habit.

Even in financial domains, where we typically do think in longer compounding periods, the premise that things take too long is still flawed. The ability to save money, for example, is a skill that compounds very rapidly. The average Your Money Or Your Life reader who quietly and sincerely completes the book's nine steps will develop skills at saving money they never dreamed of in a matter of mere months.

Finally, skills like the ability to manage yourself psychologically and the ability to visualize and plan for the future are intrinsically valuable skills that compound rapidly and can be used in almost any life domain. In other words, they merit practice no matter what your age or life stage happens to be.

Everybody typically thinks about compounding in the limited, long-term financial sense: that of investments requiring multiple decades to grow. Don't let that be you!


Recommended Reading:
1) Anders Ericsson: Peak
2) Stephen Guise: How to Be an Imperfectionist
3) Josh Waitzkin: The Art of Learning
4) Karl Sunstrom: Breaking Out of Homeostasis


Footnotes:
[1] In one of the many intriguing ironies of modern life, "giving up" things like televised media and vehicular status competition actually makes you happier. Anyone who's tried it knows it's true; anyone who doubts it hasn't tried.

[2] Saving $200 a month on a median income represents an extremely low savings rate, less than 5%. [Math: Median income in the USA is currently $59,000, thus $200 a month or $2,400 a year divided by 59,000 = 4.07%.] If you are familiar with just a few concepts from Jacob Lund Fisker's book Early Retirement Extreme, you could easily juice this savings rate enormously.



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You can help support the work I do here at Casual Kitchen by visiting Amazon via any link on this site. Amazon pays a small commission to me based on whatever purchase you make on that visit, and it's at no extra cost to you. Thank you!

And, if you are interested at all in cryptocurrencies, yet another way you can help support my work here is to use this link to open up your own cryptocurrency account at Coinbase. I will receive a small affiliate commission with each opened account. Once again, thank you for your support!

We Know They Know! Six Things Consumers Can Do About Creepy Retailers Who Know Too Much

[Part 1 here]

Last week's article discussed some unsightly truths about modern retailing, and the TL;DR can be boiled down to three bullet points:

1) Retailers know a lot about us--much more than we think.
2) Consumers feel like they're being spied on when they discover this, and it makes us too creeped out to want to buy anything.
3) Retailers therefore camouflage their knowledge about us, to make it seem like they don't know as much as they know.

This is the unfortunate chess game being played around us, and today's post is my effort to come up with possible countermoves consumers can make in response to the retail industry's relentless desire to gather information about us. Below are six ideas, four of which will even save you money!

1) Avoid store loyalty cards.
Store loyalty cards are by far the most transparently obvious method stores use to gather information about our purchasing habits and patterns. Thus the most obvious place to start to make sure a given retailer knows as little as possible about you is to avoid store loyalty cards.

But. A smart retailer will make it really worthwhile for you to carry its loyalty card by offering exceptional deals and savings to "members." That's why this is the a rule I don't entirely follow: I'm willing to carry loyalty cards for a couple of grocery stores I frequent and one big liquor/beer/wine retailer in our town because each of these retailers from time to time offers profoundly attractive sale prices. But I draw the line at those few stores--I won't carry loyalty cards from any other retailer.

2) Use assumed names, plant false information.
Back in my college days, retailers and banks would set up booths in our dining halls to offer free gifts in return for a either completing a credit card application or a for obtaining a given retailer's store loyalty card. The trade was basically this: You take this free gift, they'll get information about you today--and, possibly, a they'll get a profitable customer relationship from you down the road.

I didn't have the high ethical standards back then that I have now, so one time while I was in college I filled out one of these applications using my roommate's name and information. The free gift was some really nice plastic Tupperware containers, and I still have some of these some 25 years later. I don't even feel bad about it.

Moving on to a less ethically dubious example: some retailers will ask you for your zip code at the point of purchase. Invariably I will either say, "I don't want to give that out" or I'll give a false zip code (usually 10101, which is midtown Manhattan). When asked on any information form for salary information or net worth information I'll usually put extremely low answers ($0 is my favorite choice if it's offered). I'm thinking one of two things: either no one will bother marketing to me, or I'll be sold things I'll never ever need, like payday loans. The central concept is this: whenever you're asked to supply personal information, do so with the intent to mislead gatherers of this information.

3) Avoid patterned buying--and fool retailers into sending you coupons.
The last time there was a 75% off sale on store-brand dried pasta at my grocery store, I bought twelve pounds. It was a rare, world-class deal--and six months later we're still not even halfway through it. So: imagine you're the grocery store tracking my specific buying patterns, What conclusions would you extract from some kook who buys 12lbs of pasta on one day, followed by a full year of no pasta purchases at all?

Maybe they'll think I'm pregnant.

Two quick things to note: a) unpatterned buying allows you to stock up massively whenever an extremely attractive sale comes up, thus saving you money, and b) a predictable response of a retailer to any extended period of not buying something (particularly if it's something you've bought regularly in the past) is to offer very attractive discount coupons for that product. They'll assume they've lost your business and they'll want to win it back! The consumer wins twice over.

4) Just. don't. buy.
The less consumer junk you buy the less valuable any information about you will be. I'd shudder to see a retailer like Target try to build predictive analytics on a customer like Jacob Lund Fisker (author of Early Retirement Extreme) for example. Another way to think about this is to use the Don't want it! heuristic, a concept we've addressed in our discussions of the synergies between the ideas of Marie Kondo and Jacob Lund Fisker.

Retailers want to gather information about consumerist customers--the people who automatically default to "buy something" as their solution to all problems, and thus run to the consumer marketplace to throw money at some product or service. Instead, protect your information and your wallet by being the type of person who would rather throw creativity at problems--solving them without autonomically spending money and making purchases.

5) Spread your buying around widely.
In my posts on how to beat inflation, we discussed the idea of making retailers compete, hard, for our spending. The ability to switch or substitute is a consumer's main weapon of empowerment, and it can be done at the product level (by showing brand disloyalty and switching brands) and at the store level (by shopping at a completely different retailer).

A frugal and informationally empowered consumer will spread her buying to where it's most efficient, while adding in occasional touches of randomness, like my example above of buying twelve pounds of pasta. This saves you money while wreaking havoc on retailers' efforts to gather information about you.

Finally:

6) Play along, sort of.
If readers have detected a somewhat conflicted tone in this post so far, it's because... I'm conflicted about this entire topic. As much as I hate the idea of retailers essentially spying on us and deducing patterns from our purchases, I think under certain limited circumstances it's okay if retailers gather some information about us, if it results in extremely attractive prices for products and services that you were going to buy anyway. This takes us back to the primary advantage of store loyalty cards to a savvy, price-aware consumer.

Remember, stores will predictably send really good coupons for items you normally buy if you "go too long" between purchases. That means an intelligent consumer can actually drive the delivery of useful coupons by making very large buys when sale prices are extremely attractive and then waiting to buy only when prices become extremely attractive again. In other words, it might very well be worthwhile to trade some information about your buying patterns with a limited number of retailers you frequently use--but only if you can take advantage too.

The bottom line, however, is this: retailers want to make it easy for us to spend money at their stores, and they'll use information about us to do so. It's up to us to not give in so easily! If we make it a just a little bit harder on them, we can get far better prices and far more value for the money we spend.


READ NEXT: Rousseau on Luxury: 10 Thoughts


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You can help support the work I do here at Casual Kitchen by visiting Amazon via any link on this site. Amazon pays a small commission to me based on whatever purchase you make on that visit, and it's at no extra cost to you. Thank you!

And, if you are interested at all in cryptocurrencies, yet another way you can help support my work here is to use this link to open up your own cryptocurrency account at Coinbase. I will receive a small affiliate commission with each opened account. Once again, thank you for your support!

How Do I Slow Down the Treadmill?

In order to avoid stultification, [the gentleman of leisure] must also cultivate his tastes, for it now becomes incumbent on him to discriminate with some nicety between the noble and the ignoble in consumable goods. He becomes a connoisseur in creditable viands of various degrees of merit, in manly beverages and trinkets, in seemly apparel and architecture, in weapons, games, dancers, and the narcotics. This cultivation of aesthetic faculty requires time and application, and the demands made upon the gentleman in this direction therefore tend to change his life of leisure into a more or less arduous application to the business of learning how to live a life of ostensible leisure in a becoming way.
--Thorstein Veblen, The Theory of the Leisure Class

It's difficult to tell if Veblen is using satire or if he's telling it straight, but one thing is clear: the treadmill of consumerism never stops--never--no matter how much money you have.

In fact, you can easily argue that the more money you have, the worse it gets!

Things like the Diderot Effect start to happen to you, separating you from more money than you ever imagined. Constructed preferences and scope creep kick in. Your time gets squandered building ersatz knowledge and expertise about consumer products that never even mattered to you at earlier (and ironically, happier) stages of your life.

Worst of all, after you put all that effort and money into having more "taste" and "sophistication" the more easily it can be used against you.

What's the solution? For me, the solution is to refuse to play the hedonic treadmill game in any way. I consider it a great big game of checkers, and I want to play chess.

So I engage in various Stoic tactics to help me make sure I don't get tricked into playing checkers. I use the techniques of voluntary discomfort, negative visualization, occasional self-denial, and other simple-but-effective ideas shared in William Irvine's excellent introduction to Stoicism, A Guide to the Good Life.

I try to reject consumerism at all costs: I try to find solutions to problems that involve not making a purchase, I try to make spending money not be my default action. If I do do something luxurious, I make sure it's something rare, infrequent--so I don't adapt to it.

Also, I do everything I can to not status signal. Any flashy purchase that I might make not only speeds up my hedonic treadmill, it speeds up the hedonic treadmill for all the other people around me too. The more I think about it, the crueler this seems.

I'm finding, as I get older, that the more I reject consumerism at all costs, the happier I am. What about you?


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You can help support the work I do here at Casual Kitchen by visiting Amazon via any link on this site. Amazon pays a small commission to me based on whatever purchase you make on that visit, and it's at no extra cost to you. Thank you!

And, if you are interested at all in cryptocurrencies, yet another way you can help support my work here is to use this link to open up your own cryptocurrency account at Coinbase. I will receive a small affiliate commission with each opened account. Once again, thank you for your support!

How to “Marie Kondo” Your Kitchen

Kitchen gadgets are similar to children's toys. They are fun to try when they catch our interest, but inevitably there will come a day when they no longer bring us joy. Although it would be ideal if we could continue using everything with care and respect, if an item has completed its role in our life, then it's time to thank it and bid it farewell.
--Marie Kondo, from Spark Joy

The modern kitchen is full of specialized junk that only serves a single function. Avoid this! For example, instead of putting your spoon or ladle on a spoon rest, put it on a plate. Instead of cooking rice and eggs in dedicated rice and egg cookers, use a pot.
Jacob Lund Fisker, from Early Retirement Extreme

One of Marie Kondo's central themes is to respect your possessions: to respect each possession by using it, not derisively putting it in some drawer somewhere and forgetting about it, or letting it sit ignored in some corner of your home, collecting dust.

Now, I don't mean to be a downer on Marie Kondo in any way. She has influenced me substantially and I consider her way of thinking about possessions to be quite beautiful. But in my opinion, her discussion on kitchens and cooking gear was among the weakest portions of her two books.

The problem with a kitchen is you have to populate it with the dishes, pots, pans and utensils you use, not just the items that spark joy. Many of these items are merely functional and little more. It's not like you can decide "hey, my spoons, forks and knives don't spark joy, I thank them and bid them farewell." Then what? Eat with your fingers?

Likewise, while it's an intriguing idea to have a favorite joy-sparking bowl, a favorite joy-sparking glass, a favorite joy-sparking spoon, and so on, does this mean I have to also have a favorite joy-sparking everything in my kitchen? And what about everyone else in my home, since they use these items too? If you have a family and a fully equipped kitchen, you're definitely going to have a lot of "regular" plates, glasses, utensils, etc., that don't spark joy, but rather just... are. This is the equipment that gets used, and used heavily, when you're doing your best to feed your family.

This minor weakness in her otherwise excellent books made a bit more sense when she basically confessed to her readers that she didn't really cook, and that a typical meal for her was something along the lines of ramen in her favorite bowl with her favorite chopsticks. My understanding was she was living a bachelorette life when she wrote her first book, after which she got married, had two kids, and probably hasn't looked at her kitchen in the same way since. I'd be very interested in hearing how she balances the admirable aesthetic ideals of her books with the need for a functional kitchen that can feed four.

But here's where Jacob Lund Fisker and his paradigm-shattering book Early Retirement Extreme comes in to help out. Fisker typically focuses on avoiding the economic waste of purchasing items in the first place. This goes double for overpriced kitchen "unitasker" gadgets whose functions you can already perform with multipurpose items you already own.

Fisker might look askance my rice cooker (technically it's a unitasker), but I use it nearly every day and it's far easier than using a pot. And, further, at times he takes things to a level I don't quite want to go to. For example, he's openly discussed the merits of not owning a fridge, a degree of minimalism I'm just not ready to embrace.

Then again, most ideas can be applied to the level at which they help us, or they can be taken to an extreme. Typically, extreme examples of new ideas appear in our minds (usually in easily mockable form) because our egos are trying desperately to maintain the status quo.

However, what both of these writers illustrate convincingly is how most of us have many, many items we can easily eliminate with no loss of capability in our kitchen, freeing up space, making our kitchens more orderly, and making it easier and more enjoyable to cook meals at home. Most of our kitchen gear obeys a sort of 80/20 Rule (a rule that shows up in many, many life domains): a smallish portion of your kitchen tools and items get the vast majority of the use, while the bulk of your kitchen equipment gets used rarely or not at all.

A textbook example: here at Casual Kitchen, we've got a set of fancy schmancy carbon steel knives that on one level are kind of cool, but on a more pragmatic level they just never seem to get used. Another example: I have two very old, sentimental casserole dishes from my parents' kitchen that I use at most once a year (usually I use my own, newer casserole dishes instead).

If I were to really be honest with myself, I'd admit it: I'm treating these possessions derisively. If I'm not going to use them, it would be far better if I gave them to someone who will.

Back to our 80/20 Rule for a moment, where the bulk of our stuff gets used rarely or not at all. Clearly, we can easily identify the "used not at all" kitchen equipment... and dispense with it. But what about "rarely"? What about something you've used, say, once in the past year? Or once in the past three years?

This is where we go back to Marie Kondo's litmus test to decide: Does it spark joy? If yes, keep it. If no, bid it farewell. Therefore, those two sentimental casserole dishes from my parents' kitchen? They spark joy, and I will keep them forever.


READ NEXT: A Superior, Yet Less Expensive, Solution

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You can help support the work I do here at Casual Kitchen by visiting Amazon via any link on this site. Amazon pays a small commission to me based on whatever purchase you make on that visit, and it's at no extra cost to you. Thank you!

And, if you are interested at all in cryptocurrencies, yet another way you can help support my work here is to use this link to open up your own cryptocurrency account at Coinbase. I will receive a small affiliate commission with each opened account. Once again, thank you for your support!

Using the “Just Noticeable Difference” Against You

I wanted to share a quick idea with readers from a useful book: The Plateau Effect by Bob Sullivan and Hugh Thompson. The idea is of the "just noticeable difference," and it shows up in intriguing ways in the consumer products world. Knowing about it--and how it can be used against us--adds yet another defensive tool to readers interested in consumer empowerment.

First, what is a just noticeable difference? Sullivan and Thompson write:

"Psychologists define it as the amount of change in something it would take for us to notice the change. The just-noticeable difference has its own law: It takes a specific percentage of change in the intensity of the stimulus for someone to notice, and that percentage is constant for a given stimulus. It's the word percentage that's important here. For example, if you stared at a pile of four rocks, walked away for a while, and then came back and saw that there were five rocks, you would likely notice the difference. That's a one-rock change, but it's a 25 percent increase in the number of rocks. Now let's do that mental exercise with a bigger pile. What if someone added a rock to a pile of a hundred rocks? You're unlikely to notice the difference as that's only a 1 percent increase--well below the just-noticeable difference."

Given this, let's explore one of the consumer products industry's sneakiest tricks: the stealth price hike. This is a when a company slightly reduces the size or weight of a product while maintaining the price. It's long been a staple technique of food and packaged goods companies--a technique that helps explains certain oddities in the grocery store: like why a 16 ounce can of beans is actually 14.5 ounces, and why cereal comes in weirdly light 11.8 ounce boxes and so on.

Okay: if you were a consumer products company, and you wanted to sneak a stealth price hike onto consumers, how would you do it? Here's how: You'd figure out what the Just Noticeable Difference was, and reduce the size just a little bit less than that.

And in order to be an alert and empowered consumer, someone who is mindful and aware of possible games being played around you, you will want your JND to be as small as possible, so you'll be attuned to stealthy pricing tactics like this. You'll be able to notice them and punish the company instantly by practicing brand disloyalty and switching to a competing product.

Here's another example: Imagine you are a consumer products company offering a "jumbo" size or "bonus" size product. You want to grab consumers' attention and make sure they perceive it to be a tangibly good deal. What would be the proper incremental size change? It would need to be slightly above the just noticeable difference. But not any more than that! Otherwise you'd be giving away incremental product at no incremental profit.

Give the frog a thermometer
It's bad enough that others use the JND concept against us, but it's far worse when we use it against ourselves. It's how we discover one day--to our horror--that we've somehow gained 20 pounds, or that we've gradually accumulated a big pile of consumer debt. These are the results of years of gradual, incremental activity, all of which happened below our just noticeable difference. To borrow the metaphor from Sullivan and Thompson: we had a 100 rock rockpile and we added a non-noticeable rock to it over and over again. We never really noticed, until "suddenly" the rockpile had a thousand rocks on it.

Which brings us to a useful tool we can use to protect ourselves from being fooled by JNDs: that tool is to establish clear, objective milestones and metrics.

Vegans and vegetarians please skip this paragraph: Everyone knows the story of the frog and a pot of boiling water: if you put a frog into a pot of already-boiling water, he'll jump right out. But if you put a frog into a pot of cool water and slowly, gradually, heat it up, he'll never notice. Those incremental changes are below his JND! He'll sit there and eventually boil to death.

So, give the frog a thermometer. Make it so you have a concrete and measurable way to catch these JNDs while they happen, and before they get out of control. A few examples:

* Periodically weigh yourself or track your BMI, and document any changes.
* Keep a training log where you measure yourself against basic fitness metrics.
* Maintain a price book for consumer products prices.

In terms of financial goals (saving for retirement, saving for a child's education, etc.), your "frog thermometer" would be to document specific, concrete financial milestones in advance (by year end 2018 I want to have $10,000 in my child's college fund, by year end 2019, $17,000, and so on), and then track your progress against these milestones. This approach can work for debt reduction and weight loss too.

Conclusion
The more meta you can be about JNDs, the better. Try to be mindful of where JNDs are likely to be used--and more importantly, be mindful of where they might be hiding, unperceived. Give yourself a frog thermometer and you won't be fooled again, by yourself or by others.


For Further Reading
The Plateau Effect by Bob Sullivan and Hugh Thompson






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You can help support the work I do here at Casual Kitchen by visiting Amazon via any link on this site. Amazon pays a small commission to me based on whatever purchase you make on that visit, and it's at no extra cost to you. Thank you!

And, if you are interested at all in cryptocurrencies, yet another way you can help support my work here is to use this link to open up your own cryptocurrency account at Coinbase. I will receive a small affiliate commission with each opened account. Once again, thank you for your support!

The All-Time Best Technique for Saving Money on Groceries

Want to make it easier to save money on food? This simple three-part shopping technique helps you save money at the grocery store every single time you go:

1) Have a flexible grocery list.
2) Have a collection of favorite recipes in your head (or on your smartphone).
3) Have a "treasure hunt" mindset for genuine screaming bargains.

Let's get into the details:

1) A flexible grocery list
If you bumble into a grocery store with a fixed, rigid grocery list, you're at the mercy of the prices the store offers you on that day. If you "need" ground beef, or butternut squash (or whatever), you're gonna end up paying whatever the store makes you pay. The worst and most costly form of this error is to "need" a totally out-of-season ingredient (e.g., fresh raspberries in the middle of winter), when the quality of the item is lowest and the price is highest.

In these situations you become a lowly price taker--you're stuck paying whatever price they ask, no matter how high. You might as well beg the store to separate you from your money.

Prices for any given product in your grocery store always fluctuate, and often fluctuate dramatically. If you stay flexible and ready to pounce on foods that are attractively priced--and only those foods--you'll be a price maker. In this case, you--not the store--decide the price you'll pay for something by not being rigid about when you buy it.

Next, we'll integrate Step #1 with our next step, Step #2:

2) A handy set of family-favorite recipes in your head (or smartphone)
When you see attractive sale prices on a given food item, the next step is to build recipes around that food. The easiest way to do this is to memorize your family's favorite heavy rotation recipes.

Of course, we live in the smartphone era nowadays, so readers can rely on their smartphones rather than literally carrying the recipes around in their brains. Either way, the goal is the same: structure what you eat that week around whatever foods are on sale.

Let's go over an example employing Steps #1 and #2 using my inside voice:

"Hmmmm... I see potatoes are on sale big time this week. Only $1.00 for a 5lb bag, and buy one get one free! Whoa. Okay what recipes can I build around that? Vegan Potato Peanut Curry? I already have tahini, peanut butter and garlic at home... let's see, spices too, I've got turmeric and cayenne already. I just need a 29-ounce can of diced tomatoes and I can make a huge double batch. It'll last all week!"

A sidenote to smartphone users: your memory isn't totally off the hook. As you can see, you'll also need to have some idea of what's sitting in your pantry back home that you might use to complete these recipes.

Here's the central principle: Build your meals based on what's on sale, rather than walking into the grocery store with a rigid list of ingredients for a rigid meal plan and paying whatever price they ask.

Another quick example, again using my inside voice:

"Stewed and canned tomatoes are 2/3 off this week, and I noticed a good sale on boneless, skinless chicken thighs. Hmmm, okay: I've already got unsweetened chocolate at home, and plenty of spices. This would be a good week to make some Chicken Mole, and it will feed us for a few days, easy!"

And so on. Once again, the idea is to combine your internalized knowledge of a set of basic (and ideally Laughably Cheap) family-favorite recipes, and match it with whatever happens to be on sale at the store. Result? A hilariously low grocery bill and plenty of healthy homemade food.

Now, let's move on to Step #3, which is essentially Steps #1 and #2 on steroids.

3) A "treasure hunt" mentality for genuine screaming bargains
Periodically a grocery store (or for that matter any retailer) will have a ridiculous sale on something. Perhaps it will be a buy one get two free (67% off) sale, or a manager's special on food that is about to pass its sell-by date.

About two months ago, I found a manager's special on Italian-style spicy sausage links, more than three pounds for the hilariously cheap price of $2.17. The meat was a day from its sell-by date, but so what? A sell-by date means nothing if you can freeze the item! I took it home, froze it, and we're still working our way through it, months--and many, many recipes--later.

Likewise, I wrote a post long ago about a pernil I prepared, featured in Daisy Martinez's wonderful cookbook Daisy Cooks. I was wandering through the meat section with my treasure hunt mindset on, and found a pork shoulder for the hilariously cheap price of 49c a pound. Which meant the 4.5lb pork shoulder I bought cost only $2.27.

These are minor and nearly silly examples, really, but they both illustrate the central principle: at some point over the course of a year, practically everything in a given grocery store will be offered at substantial markdowns. Make that the moment you buy.

One caveat: Keep in mind stores often use loss leader or doorbuster pricing in order to draw people into the store, with the condescending but unfortunately all too accurate presumption that once you're there, you'll spend money on other items too. The store therefore makes up its losses on the doorbuster item and then some. You, however, as a sophisticated consumer who knows to play chess, not checkers, with doorbuster pricing, will be way ahead of the game. You'll know to pick up the sale item and only that item, and then walk out, metaphorically (or literally?) rubbing your hands with glee for the legitimately great deal you just got.

Just like any other retailer, your grocery store is subject to various cycles and idiosyncrasies. Sometimes they misjudge demand. Sometimes they (or their suppliers) inadvertently ship excess inventory. Sometimes products simply need to be moved because the sell-by date approaches, and the store wants to make a little cash flow off of soon-to-be-worthless inventory.

A savvy consumer who remains alert to situations like these has a true treasure hunt mindset, and by combining the steps in this post, she can feed a family on a fraction of the cost of a typical, rigidly-structured grocery trip.


When shopping for groceries, knowing many recipes by heart allows one to tailor what's for dinner to whichever loss leaders are on sale, rather than venturing out with a shopping list and having to buy single missing ingredients.
--Early Retirement Extreme, by Jacob Lund Fisker


READ NEXT: Why Bad Blogs Get More Readers
AND: Should You Give Advice Encouraging Others Not to Spend?



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You can help support the work I do here at Casual Kitchen by visiting Amazon via any link on this site. Amazon pays a small commission to me based on whatever purchase you make on that visit, and it's at no extra cost to you. Thank you!

And, if you are interested at all in cryptocurrencies, yet another way you can help support my work here is to use this link to open up your own cryptocurrency account at Coinbase. I will receive a small affiliate commission with each opened account. Once again, thank you for your support!

Don’t Want It! [Also... On the Value of Re-Reading Useful Books]

Readers, I'm re-reading Jacob Lund Fisker's paradigm-shifting book Early Retirement Extreme, and I re-stumbled onto a quote worth sharing.

Giving up wants can be as tough or easy as going on a diet, giving up smoking, or changing other habits dependent on strength of character. However, doing without is often thought of as a sacrifice, especially when strongly attached to material comforts. It's quickly realized (after about a month) that happiness does not stem from being surrounded by possessions, but that being surrounded by them is the result of an addictive habit. Thus, it can be tremendously liberating not to "need" something to be happy.

Since humans need very little, eliminating various wants can go far in terms of solving problems. Can't afford it? Don't want it! Too complicated? Don't want it! Reduce and simplify. Reduce and simplify! An entire aesthetic can and has been formed around this principle, and so the pleasure from following this path can be as strong as the (previous) pleasure of accumulation. However, as there's a point of diminishing returns to the pleasure of accumulation, there's also a point of diminishing returns to the pleasure of giving things up. The optimal point is somewhere in the middle. It should therefore be kept in mind that while eliminating problems can be a very good tool, some will be very tempted to make it their only tool, in which case it becomes a hammer for which the whole world becomes a nail.
--Jacob Lund Fisker, Early Retirement Extreme

What I love about this quote is how it synthesizes and combines ideas from minimalism, frugality, consumerism and consumer empowerment, all of which are frequent discussion topics here at Casual Kitchen.

Also, it brings to mind other worthwhile books I've discussed here at CK, like Marie Kondo's The Life-Changing Magic of Tidying Up and her equally useful follow-up book Spark Joy. Marie Kondo's central idea is to keep only the possessions that truly spark joy in you, with a secondary theme that you can--and probably should--eliminate nearly everything else in your life that doesn't spark joy.

An interesting conclusion that we can draw out from these complementary books and the philosophies behind them is the striking idea that you actually "don't want!" a surprisingly large percentage of your stuff. Maybe you once might have thought you wanted it... but you were wrong. We're often wrong about our wants and needs.

If you can acknowledge this, if you can accept it, not only will you have less stuff (probably a lot less stuff), but you'll also have far more happiness. And more money! Think about it: a meaningful percentage of the things you will buy in the future will be things you ultimately "don't want!" Avoid buying them. It's a great feeling to get rid of stuff, but it's better (not to mention more enriching) to not accumulate stuff at all. Marie Kondo and Jacob Lund Fisker ought to get together for a beer one of these days: their ideas are surprisingly in sync.

And the savings aren't limited just to money. Think of all the time you'll save if you don't have to shop for things you "don't want!", if you don't have to take them home, if you don't have to figure out a place to store them, don't have to dust them, organize them, maintain them, pay for extra square footage in your home to make room for them, and so on. And, obviously, you won't have to agonize over whether or not to discard something you never even bought. The "don't want!" heuristic enables you to avoid the entire exercise. Every time-consuming part of it.

So, lately, I've started using this way of thinking whenever I consider an item or a service that I might need or want: How can I "don't want!" this? How can I avoid acquiring an item, avoid spending money and time, and yet still solve this particular problem I'd like to solve?

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Finally, a closing thought on re-reading books. Only a small fraction of books merit reading once--and a vanishingly small fraction of books merit reading more than once. I'm getting enormous value on my second reading of Jacob's book. It's helping me groove and maintain values and habits I prize deeply, values and habits that I want to make sure I keep in the years to come.

Which books merit re-reading for you? For me, they tend to be books that taught me new or particularly useful habits, or books that helped me shape a new way of thinking about the world. Books like Early Retirement Extreme, Your Money or Your Life and Nicholas Taleb's books The Black Swan and Antifragile all fit this category. William Irvine's excellent book on Stoicism, A Guide to the Good Life, fits. And so on.

What are books that you have (or will) re-read? Why? We can all benefit by hearing about "re-read worthy" books. Share your titles in the comments!


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Readers! You can help support the work I do here at Casual Kitchen by visiting Amazon via any link on this site. Amazon pays a small commission to me based on whatever purchase you make on that visit, and it's at no extra cost to you. Thank you!

And, if you are interested at all in cryptocurrencies, yet another way you can help support my work here is to use this link to open up your own cryptocurrency account at Coinbase. I will receive a small affiliate commission with each opened account. Once again, thank you for your support!

Rousseau On Luxury: 10 Thoughts

"For luxury either comes of riches or makes them necessary; it corrupts at once rich and poor, the rich by possession and the poor by covetousness; it sells the country to softness and vanity, and takes away from the State all its citizens, to make them slaves one to another, and one and all to public opinion."
--Jean-Jacques Rousseau, from The Social Contract

If I had to distill some useful rules and courses of action from this famous quote from Rousseau, here’s what I’d come up with:

1) If you have money, do not flaunt it. Ever.

2) Do not status compete. You only make life that much harder for everyone else.

3) We live in a world of constructed preferences and Diderot Effects, which means having more money often makes you need still more money.

4) Luxury products also typically oblige you to learn copious amounts of phony, ersatz knowledge, wasting your time and cognitive bandwidth.

5) Thus if you don't have money now, but one day would actually like to have some, avoid luxury and all the costs that go with it.

6) To avoid "softness and vanity" don't spend money as a default solution to solve problems. Instead, learn how to solve the problem without spending money or buying a product.

7) Friends who care or make note of what you drive, how you live or "who" you wear are not your friends. We all know this intellectually, but...

8) Ignore the rich. And aggressively ignore "the rich" as an entity presented to us by BS vendors in the media.

9) Instead, learn how they got rich in order to learn possible courses of action that you might pursue to improve your family's financial situation.

10) Note also: "the rich" presented to us in the entertainment media are usually hilariously far from rich.

BONUS) Teach people to save and to invest. Do not encourage them to spend or signal.


Readers, what thoughts would you add here?


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You can help support the work I do here at Casual Kitchen by visiting Amazon via any link on this site. Amazon pays a small commission to me based on whatever purchase you make on that visit, and it's at no extra cost to you. Thank you!

And, if you are interested at all in cryptocurrencies, yet another way you can help support my work here is to use this link to open up your own cryptocurrency account at Coinbase. I will receive a small affiliate commission with each opened account. Once again, thank you for your support!

What Barefoot Running Taught Us About Expensive Sneakers (And What Nike and Others Really Don’t Want You To Know)

"You're definitely gonna want to pay a lot of money for good quality sneakers. I mean, seriously, if you go running in those $29.99 loser no-name running shoes, you'll hurt your knees! Or your iliotibial band. Or something. You'll definitely hurt something.

Forget those cheap shoes. These $175 running shoes are far better. Mass produced, yet designed to fit your feet. And they're built for comfort, with extra padding to absorb all those shocks to your body."

Readers, this is the basic marketing message behind high-end sneaker brands. For many, it's highly persuasive. After all, how dumb would it be to take a chance on some no-name pair of sneakers... and maybe hurt yourself. Right?

But then, something odd happened.

Some ten or so years ago, "barefoot running" became all the rage. And it raised questions the sneaker industry didn't want you asking. For example, a thoughtful if sarcastic sneaker buyer might ask, "Now hold on a minute: First I had to buy overpriced cushiony sneakers to protect myself from injury. And now you're telling me I don't even need shoes?"

But it gets worse: it turns out that many if not most running injuries result from protecting ourselves too much. All that padding in all those ultra-expensive shoes actually prevents our body from feeling, sensing and properly responding to the various healthy stresses of running. Or, as researchers at the University of Oregon found, "the greater the cushioning in the shoe, the greater the impact shock on the leg."

Ironically, this highly counterintuitive discovery was made in Eugene, Oregon--barely a hundred or so miles from Nike's world headquarters in Beaverton. Huh.

Somehow, our consumer civilization transformed running--a quintessentially basic human act--into an expensive pastime, with luxury-branded shoes, unpronounceable injuries... and $300+ marathon entry fees.

It's also instructive to observe the shoe industry's response. After all, no one makes money not selling shoes, so Nike and other high end sneaker brands had to at least try to figure out a way to "brand" the barefoot running experience too.

And so, for only about a hundred bucks or so, we can buy a pair of Nike "Barefoot-Like" sneakers. They're for sale on Nike's website, right next to all those expensive heavily-padded shoes we were supposed to buy before.

Readers, tell me, how are expensive branded sneakers any different from any other zombie-based advertising/consumption cycle? And if it bugs you to pay 30% more for, say, a name-brand can of tuna when it furtively emerges out of the same third-party factory as lower-priced unbranded tuna, shouldn't it bug you enormously to pay 700% more for sneakers? Especially when all those sneaker features they use to justify their high price at best make no difference, and at worst might actually hurt us?

A final note: Speaking as a three-time marathoner and multi-time half-marathoner who's logged thousand and thousands of running miles, most running injuries are form- or technique-based. This goes double for casual runners. In other words, fix your running form, improve your technique, and you'll run injury-free in whatever pair of reasonably priced sneakers you're happy with. For readers interested in an excellent resource on how to improve running technique, I strongly recommend Danny Dreyer's book Chi Running.



Resources:
1) A short video of a fateful day when the NY Times did a piece on barefoot running. Hipsters raged, then bravely began the search for the next new thing. Note also the mention of the University of Oregon's biomechanical research study at 2:21 in the video.

2) More on how to run barefoot.

3) Why is too much protection a bad thing? For more on this topic, see Nicholas Taleb's discussion of the concepts of hormesis and mithridization in his book Antifragile.


READ NEXT: The Unintended Irony of Pabst Beer
AND: When U Know The Cost, U Know the Margins

How You Can Beat Inflation, Part 2

...continued from last week:

In our last post we talked about expanding how we think about competition and substitution in order to defeat inflation and shift the balance of power back into consumers' hands. Let's pivot now from the spending side of the ledger over to the savings and income side of the ledger, and try to think creatively about attacking inflation on a second front.

Labor markets: tightening
One of the fortunate aspects of inflation is it tends to coincide with lower unemployment rates and an improving economy. Remember last post when we talked about making companies compete to sell to us? Well, labor market conditions are tightening, which means, finally, employers are beginning to compete for workers.

This means a couple of things. For one, enterprising workers who are valued by their employers and willing to ask for what they want can potentially get more money for the jobs they already have. Second, other opportunities are likely be opening up for you, right now, for a superior work situation. Start looking.

Both employment and wage increases tend to lag a recovery, which means now is the time to start taking advantage of the most direct way to beat inflation: get more money.

Side hustles/additional income sources
Last week we talked about monopolies in the consumer marketplace. Here's another way to think about a monopoly: if you have one job, your employer is a monopoly provider of your income. Your employer has maximum power over you, and it can "substitute" you right out of a job under the flimsiest of pretexts, whenever it wants!

To borrow a phrase from Nassim Nicholas Taleb's must-read book Antifragile, this makes you fragile to the loss of all of your income. Not good.

You cannot consider yourself to be truly robust financially if a) you have a monopoly income provider and b) your monopoly income provider can, by terminating your job, spontaneously shut off all of your income. This is why all households ought to be thinking about what kind of side hustles they can run to supplement income from their primary job.

My domain of expertise is stock market investing, thus that's where I try to drive incremental income for my household. But there is no shortage of ways to earn extra money on the side, and plenty of resources that cover this topic better than I could. Once again, remember our primary heuristic: the more broadly we think about competition and substitution (and monopoly providers of things like our income!), the more we can eliminate various fragilities in our financial lives.

Turning an expense into an income source
One major insight from Jacob Lund Fisker's book Early Retirement Extreme is to look for ways to "monetize" your hobbies: Fisker loved bicycles, taught himself how to fix them, and gradually fell into a modest income source repairing them. Recently, I taught myself how to string tennis racquets. Now, not only have I dramatically reduced one of my largest tennis-related expenses, I'm now in a position to string other peoples' racquets for additional income!

In both these cases we've taken an inflation-prone expense and not only neutralized it, but turned it into a source of funds. I'll leave it to you to figure out where in your life you can apply this important insight.

Low overhead, low fixed costs
The late publisher Felix Dennis, in his useful book How to Get Rich, used to say "overhead walks on two legs."

I gotta be honest: that phrase makes absolutely no sense. But, well, he's from England.

What he's getting at, however, is this: never, ever, ever get yourself in a situation where you have high fixed overhead costs. Felix Dennis kept his organizations lean, mean and flexible so they could withstand anything--any kind of financial stresses. And whenever a windfall came in, rather than getting spent covering expenses and overhead, that income dropped right down to the bottom line.

Why can't we keep our households lean, mean and flexible too?

Debt = Fragility
The first and most obvious step most families can take towards making their households lean is to pay down all debts. Debt makes you fragile. It saddles you with non-negotiable monthly fixed costs that swell up your expenses, limit your flexibility, and crowd out your ability to manage inflation.

But believe it or not, debt can be an inflation fighting tool. Let me explain how.

Here at Casual Kitchen, we carry a modest mortgage on our townhome. When we first started seeing a few too many "non-beat-backable" examples of price inflation, like our auto insurance bill, our property taxes and some of the other examples I discussed in Part 1 of this post, we put a plan into place to accelerate paying off our mortgage entirely.

Our plan is to get this cost item paid off and eliminated from our household ledger for good by the end of 2018. This will create significant room in our budget to compensate for quite a bit of other sources of inflation in areas where we have less control.

A quick sidebar. Traditional economic "logic" says that borrowers benefit from periods of inflation. If you borrow money today (assuming you can do so at attractively low interest rates, a not-always-true presumption) you can then pay it back with lower-value dollars in the future. That's what the economic textbooks say at least.

The truth is debt is a fixed overhead cost burden that you are better off not having at all. The money you vaporize to service your debts could can be far better used to fund a huge savings buffer, or to fund investments in long-term, inflation-protected cash flows. Unlike a large debt load, these protect your family, making you more financially robust.

Nearly every household in our country carries a significant level of debt, which means nearly every household lights a meaningful portion of their money on fire, every month, just so they can use someone else's money to buy things they likely never needed in the first place.

Eliminate all debt. Overhead walks on two legs. Eliminate that overhead and you'll free up room in your budget to handle all sources of inflation and then some.

Now, let's move on to our final and most powerful tool for defeating inflation.

Income generating investments
A detailed discussion on investing is beyond the scope of this post and likely beyond the scope of this blog.[1] But we'll make room here for a few general heuristics you can use to diversify your sources of income using the amazing vehicle of conservative dividend paying stocks.

Remember in last week's post when we were talking about companies with pricing power? Those are the types of companies you'll want to consider for investments. Or, as I phrased it in another post here at Casual Kitchen: "Wherever you find a highly profitable company charging prices well above intrinsic value, forget buying the product. Buy the stock instead."

I'll share a couple of examples from my personal investing activities: my dividend on my Coca-Cola stock has more than quadrupled since I bought my first shares in 1999. Since the financial crisis in 2008-2009, JP Morgan hiked its dividend from a post-crisis low of 5c a share to 56c a share, an eleven fold increase.

I have yet to see a product in the consumer marketplace inflate prices at that kind of rate, not even status-signalling iPhones.

Which reminds me! Apple stock paid its first quarterly dividend in 2012, a modest 38c a share. In the five years since, the company has nearly doubled the dividend, a growth rate of some 15% a year.

I don't know if we can expect these types of dividend growth rates going forward, but you can put a relatively high level of confidence on all of these companies, and many others like them, increasing their dividends over time at rates equal to or exceeding inflation. This genre of stocks should be one of the pillars of your overall investment strategy.

Conclusion and review
Once again, let's return to Galbraith's "at-risk" households: those with no control over their income, no control over prices they pay, and "no capacity to protect themselves by increasing their own returns." While we can't control everything--here and there we will have to eat a price hike--we now have several tools we can use to increase our "capacity" to protect ourselves and our families from inflation:

* Think about competition and substitution as broadly and as empoweringly as possible
* Improve your brinksmanship: increase your ability to say "no" to more and more products and services in the consumer marketplace
* Avoid monopoly and oligopoly providers in as many forms as you can
* Ruthlessly strip out overhead ("overhead walks on two legs")
* Relentlessly pay off all debts (debt = fragility)
* Save more, both into a large emergency fund and into income generating investments
* Don't let your job be a "monopoly income source"--diversify away from it now, even if you do so in small steps at first.

Good luck and get started!


[1] Footnote: Resources for further reading:
For those readers interested in more articles and resources about investing, see:
1) Consumer Empowerment: How To Self-Fund Your Consumer Products Purchases
2) Synergies of Being an Investor AND a Consumer
3) Money Sundays: The "Stoplight Rule" For Creating An Emergency Fund
4) Ask CK: More on Emergency Funds

And, be sure to see my chapter-by-chapter analysis of Your Money Or Your Life, [full archive here], and in particular,
5) Becoming a Sophisticated Investor: Six Steps
6) The Official "Your Money Or Your Life" Reading List
7) Ask Casual Kitchen: Best Investing Books