Rebellion Practice

"I just demonstrated to myself and the world around me that I'm not controlled by it."
--Stephen Guise, from How to Be an Imperfectionist
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I just finished a striking little book: How to Be an Imperfectionist by Stephen Guise. First of all, let me recommend it--highly--to Casual Kitchen readers. Today I'd like to share just one of the many, many good ideas in it: The idea of practicing "rebellion."

First, a little background. Guise's book is for people who struggle with perfectionism, and one of the central themes of his book is to stop letting your perfectly reasonable desire to do things "well" freeze you from doing things at all.

That our desire to "do things well" could actually subvert us might be a counterintuitive idea for some readers. But think about it: if you can't do something well, it's, well, kind of embarrassing. Our egos hate the idea that other people will see us suck--perhaps suck badly--at something. As a result, our egos will generally try to protect us from embarrassment by giving us rationalizations for not trying in the first place. And of course these rationalizations always seem like real reasons in the moment. No one who rationalizes realizes it--that's how rationalizing works. In fact if you look at this through the lens of evolutionary psychology, this ego activity could even be seen as a survival mechanism.

However, if you think about what the source of that embarrassment is, it's our internal assumptions about other peoples' expectations. So, the idea of "practicing rebellion" gets at rejecting or even defying those expectations. As well as our own.

Thus practicing rebellion means seeking out rejection, discomfort and even embarrassment. It means, as I once phrased it here in another post, "running towards humps." And it means not being a good little boy (or girl), obediently doing all the things we're told to do by our egos, by our peer group, by our modern consumer-driven society, and so on. Rebel.

It's up to you to choose what your rebellion might be, and you can feel free to start small. In his book, Stephen Guise shares some modest examples of his own, such as lying down in public places, singing out loud in public, or talking to strangers.

I'll confess, neatniks like me can't lie down in public places, and I definitely don't want to subject the world to my singing. As far as talking to strangers, that's such a perfectly normal behavior for me that I'd have to rebel the other way and not talk to strangers. The point, of course, is to each his own. You have to pick the type of rebellion that suits you.

Here's a list of possible ways you might practice rebellion, some cribbed directly from Guise's book, others I brainstormed on my own. Feel free to add your own ideas!

Rebelling against a typical way of living
Rebelling against any standard or expectation
Rebelling against "play-it-safe" living
Rebelling against the urge to seek acceptance or approval from others.
Rebelling against expected comportment in a given situation
Rebelling against consumerism, against solving problems by making a purchase
Rebelling against talking about politics or the media's latest outrage du jour
Rebelling against standard relationship types (not marrying, etc.)
Rebelling against the dietary conventions of those around you
Rebelling against fashion or clothing conventions (have an unusual hairstyle or clothing)
Rebelling against gadget trends
Rebelling against Facebook or other false/artificial ways to be "connected"
Rebelling against concern over mistakes
Take a sabbatical in the middle of a successful career
Drive a crappy car, even if you can afford a nice one
Have a radically unusual hobby or pastime
Put yourself into odd or uncomfortable social situations deliberately

... and so on.

Note that we can already surmise a few major side benefits from some of these practices. For example, practicing rebellion against consumerism will make you wealthy. Practicing rebellion against things like discussing politics will make you happier. And so on. What's not to like?

Toward your own identity
The point is to run toward that flinch/embarrassment reflex that we all have rather than shying away from it (for more on the flinch see here and here). Consider it a daily kata to train our egos to become less fragile to embarrassment and the perceived judgment of others.

As Stephen Guise phrases it: "It's very desirable to have a desensitized embarrassment reflex, because it brings you freedom."

What he means is here is this is a step towards finding your own identity. Most of us simply participate, without realizing it, in a set of behaviors and identity characteristics established for us by our society, peers and family. So, by choosing to rebel against this "imposed identity" which has been set for you by others, you become more free to seek out an identity that's truly and inherently you.

Obviously rebellion practice can be done at any level, and I encourage you to think about it both metaphorically and literally, and practice your own acts of "rebellion" to the level you consider appropriate.

"Those who need approval don't know who they are." - Stephen Guise



Read Next: Why I Clip Coupons (and Why You Should Too)


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.


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AND: When U Know The Cost, U Know the Margins


Carrot and Tarragon Soup (Yet Another "Laughably Cheap" Recipe!)

You could easily pay $9.00 for an appetizer-size serving of this delicious soup in some trendy Manhattan restaurant. It would probably arrive in one of those annoying one-inch deep bowls.

But we're going to make this soup at home, serve it in a normal bowl, and we're going to do it for around three bucks for the entire pot. Which means this soup runs about 45-50c a serving, making it a front-runner for one of our most laughably cheap recipes here at Casual Kitchen.

People who say healthy food has to cost a lot simply have no clue.

I hope you enjoy this recipe as much as we did!
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Carrot and Tarragon Soup
Heavily adapted and simplified from Laurel's Kitchen

Ingredients:
6-7 carrots, peeled, cut into large 2-3” chunks
2-3 potatoes, peeled, cut into large 2-3” chunks
Water to cover

2-3 Tablespoons butter (or olive oil or canola oil)
2 onions, coarsely chopped
1 generous teaspoon dried tarragon
2 cups milk
2-3 cups water
1/2 cup white table wine
1/4 teaspoon black pepper and optional salt to taste

Directions:
1) Peel carrots and potatoes, chop into 2-3” chunks, and cover with water in a 4 quart pot. Bring to a boil and simmer until carrots are tender/al dente, about 20 minutes.

2) While carrots and potatoes are simmering, chop onions and add to a large soup pot with butter and dried tarragon. Saute onions for 10 minutes or so on medium heat until soft. Let stand.

3) When carrots and potatoes are cooked, drain and transfer to a food processor or blender in (roughly) three batches. With each batch, add about a third of both the 2-3 cups each of the milk and water. Puree until smooth, then transfer puree to soup pot and combine with the onions/tarragon. Add any of the remaining water and milk to the soup pot, bring to a boil, and simmer for 5-7 minutes or so. Add black pepper and optional salt if desired.

Serves 6-7 as a main dish.


Two recipe notes:
1) Let's itemize the cost of this laughably cheap recipe:

Butter/oil 15c
Onions 40c
Carrots 60c
Potatoes 40c
Milk 65c
Cheap box white wine 75c
Spices 10c
Total Cost: about $3.05 or about 45-50c per serving

2) Second, thinking about a snotty Manhattan restaurant serving $9 soups in one-inch deep bowls reminds me of Aesop's fable of the fox and the stork.

3) Finally, a few related links for new readers:

a) The 25 Best Laughably Cheap Recipes at Casual Kitchen
b) MORE! Top 25 Laughably Cheap Recipes at Casual Kitchen
c) Ten Healthy Recipes for Under $1 a Serving
d) Glossary of Casual Kitchen Memes



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, Wall Street Playboys-like, 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 even 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


How To Beat Inflation

How do you deal with inflation and price increases? I've noticed quite a few price hikes over the past several months across the consumer marketplace: in the grocery store, on the menus at local restaurants, in the costs of various services... the list goes on. Some examples from our household:

* Our cable company hiked our internet bill 9%.
* Many product categories in our primary local grocery store have seen price hikes: a few that come to mind: store brand peanuts $2.49 to $2.99 (20%) and then to $3.29 (32% cumulatively), soy milk: 33% ($1.50 to $1.99). pineapples 20% ($2.50 to $2.99).
* Our automobile insurance bill went up a surprise 10% in the last billing cycle.
* Our townhouse community fees increased about 5% last year.
* And our property taxes jumped 8% two years ago as our town put through new assessments.

Of course, let's not forget one of the worst examples of inflation today: increases in health insurance policy premiums, which seem to inflate at a shocking rate each year.

All of this made me want to attempt to collect and organize my thoughts for readers on how best to deal with inflation and price increases. Unfortunately, I can't solve the inflation problem directly, that's the job of all those stone-handed economic geniuses at the Federal Reserve. But I what I can do is share some heuristics and general principles to help us blunt inflation's impact on our household budgets.

Let's start by stealing a quote and a conceptual framework on inflation from economist John Kenneth Galbraith, from his book The Affluent Society:

"Those individuals and groups will suffer most which have the least control over their prices or wages and hence the least capacity to protect themselves by increasing their own returns."

Galbraith ain't the greatest writer in the world, but what he's trying to say here is you want to increase your flexibility on both sides of the ledger--with both income and expenses. Those households without much room between income and expenses, those carrying high fixed costs, those that can't (or won't) save aggressively, and those unable to control their incomes at least to some extent--it's those households inflation hurts the worst.

Don't be that kind of household. To ensure your family isn't like the "at-risk" example Galbraith describes, you'll want to add to your income, cut expenses, and beat price hikes where you can. All three--at the same time.

Okay. Let's move from the theoretical and get into some practical ideas.

The ability to say no
The things we buy in life can be broken down into two categories: things we need and things we don't. Many posts here at Casual Kitchen address how easy it is to confuse needs with wants, and inflation in the price of a given product or service gives us a way to clarify the confusion. The more you can consider something as a want rather than a need, and the more you can simply say "no" to that product or service, the more power you have over the entity selling to you.

Some of our peers tell us they could never part with television. Now, I never judge peoples' horrible media consumption habits, but if that's your position, guess what? To the extent you believe TV is a "need" you lose all your leverage. You lose the ability to use true brinkmanship with the supplier. Yes, you can use all the Ramit cost-savings scripts you like. But if you won't cancel service when it really gets down to it, the company holds all the cards, not you.

Eventually, you're going to eat a price hike.

In contrast, imagine a household that places cable television in the "want" rather than "need" category. In our case, that simple act of mental categorization at first enabled us to keep cable, as the cable company, smelling our utter indifference when we called to challenge a price hike, offered us a hilariously cheap deal. Ironic.

But eventually, as with all monopoly- or oligopoly-provided services (more on this in a moment) the price hikes inevitably resumed, and we simply eliminated the entire cost category from our life. We won the brinkmanship battle because we could always say no. And eventually we did. The more you can improve and expand your ability say no, whatever the product or service, the more power you have over inflation.

Sounds easy, right? The problem, of course, is sometimes there's no competition at all.

Monopoly providers
In our community, internet service is a monopoly, and--no surprise--they've put through multiple price increases in recent years. They do it because they can. It's a reality. We've managed to negotiate the last few away, but this summer they put through a 9% hike that we were unable to beat back.

Unfortunately, some price hikes you just have to eat, and we'll be eating this one. You won't be able to beat back every single manifestation of inflation. Instead, you'll have to make room for the ones you can't beat back by driving down costs elsewhere in your budget.

Oligopoly providers
Oligopolies are markets where there are very few players competing. Here's where we often see creeping inflation and the dreaded "pricing umbrella," where the most dominant company in an oligopoly hikes prices and the other competitors follow along. It's not collusion exactly. It's not like these companies get together in a smoky back room and agree to hike prices in advance (which is illegal). They are, however, still free to watch each others' pricing decisions in the open market, and either follow along or not.

Branded consumer products companies tend to be worst offenders here, which is why you want to try and both avoid their products and invest in their stocks. More on that next week in part two of this post.

Substitution/Competition: broadening our primary weapon
It's an elementary economic concept to know that the more competition there is in a market, the lower prices will be, and the less likely there will be inflation. I wouldn't be teaching you anything by telling you this--you already know it.

What I want readers to do instead is to view "competition" as broadly as possible in all consumer marketplaces.

Branding is one way companies try to artificially limit competition. If you only buy Bumblebee Tuna for example, you're enabling a type of mini-monopoly market, and setting up a possible pain point for inflation in the future. On the other hand, if you know the real truth about canned tuna, and thus are indifferent to branding, you can switch.

And the ability to switch or substitute is a consumer's primary weapon of empowerment. The question is, can we think about substitution in ridiculously broad terms, and impose more competition across more markets--and thus increase our overall power as consumers?

Let's go over an example of what I mean. One of the most basic substitution examples, one you'd find in an introductory economics textbook, is the idea of substituting chicken for beef based on whichever meat is least expensive. But Casual Kitchen readers steeped in the practice of almost meatless cooking should be able to broaden the substitution possibilities far, far further, by rotating in laughably cheap vegetarian meals for some meat-centered meals.

If you think about it, his makes meat providers "compete" far more expansively. They're not just competing against other meat providers, we're making them compete against vegetables too! In other words, you've created circumstances where all of these food providers have to compete against each other for your food dollars. And this gives you more options and flexibility than ever.

Interestingly, one of the primary flaws in measuring inflation decades ago resulted from the CPI failing to take into account the substitutability of many products in the consumer marketplace. Heh. We won't be making that mistake.

Substitution and competition can be thought of still more broadly, at all levels of the consumer marketplace. For example, think beyond the mere product level. Competition and substitution can be found at the store level too: If any store hikes prices beyond what you think is reasonable, go to another store.

So, we now have our first set of weapons for combating inflation, and here's the general heuristic for readers: source as many of your "needs" from markets that are competitive, and for each need, have as many substitution possibilities as you can, in as broad a sense as you can. To the extent you can expand the envelope of competition and substitution across all things you buy, you will massively increase your leverage and flexibility over price inflation.

Next week we'll look at still more ways to beat inflation in Part 2: we'll look at the issue from the income and employment side of the ledger, and we'll consider some unusual ways to think about overhead and investing. Stay tuned!