Friday, December 18, 2009

Holiday Gifts

My advice: don't buy crap for people.

For over a decade I have largely refrained from buying presents. I have also pretty consistently told everyone else to not buy anything for me. Every once in a while I come across something that I really think someone would love, and I get it for them, but it has nothing to do with a birthday or holiday.

I am not alone. People tend to buy me things I don't want. They take up space in my home. It is a waste of the money of people I care about. I also recognize that anything I may buy for someone, if I feel pressured by a holiday to go get something, may be equally unwanted and wasteful.

This time of year has become quite stupid for many people. Poor people, who are also largely unintelligent, go into debt to buy unnecessary junk. They waste precious resources on unneeded things, paying interest for months. They believe it is an obligation, and that their friends and families will hate them, abandon them, or retaliate if the obligation is not met. That is asinine.

My friends and family all still care about our relationships, even though I don't give them stuff every December or on their birthdays. If there would really be a relational consequence for not buying someone a present, that person does not care about you, and you are better off without that relationship. Stop spoiling your whiny and unappreciative kids. Stop having shallow or negative relationships.

If you've got discretionary money and you want to be generous, I recommend the following, and that you do them spontaneously and independently of the calendar:
* throw a party and invite the people you care about
* take people out to dinner at a restaurant they choose
* luxury consumables (fine chocolate, specialty beer, wine)
* vacation together (even in your own town)
* cash

Those things tend to take up no space and be relationship-enhancing.

I hate gift cards. Gift cards make no sense. You're giving someone a gift that they will probably have to take time and effort (and maybe money for transportation) to gain any value from. In addition to that, they'll either not use the full amount, which wastes your money, or they'll have to spend some of their own that they wouldn't have otherwise. And they can only be used in one place. The only remotely reasonable reason to give a gift card is to make sure a child gets to pick something they want from a store you approve, but even then, it makes more sense to just promise to reimburse the kid for buying something you approve of, or have the kid tell you specifically what he wants and buy it for him. Gift cards are gifts to the stores more than they are to your loved ones.

Wednesday, December 9, 2009

The Price Is Right Wheel

If you're ever on The Price is Right, and you get to spin the big wheel, and someone gets to spin the wheel after you, what spin should you use as the cut-off for respinning? Now you may say, "anything over 50 means I'm likely to be highest, right?" Let's figure it out. The next spinner has a 100-your_spin chance of beating you in one spin, plus a your_spin * (100-your_spin) chance of beating you in two spins. If you spin a 70, the next person has a 30 + 70*30 percent chance of beating you, or 51%. Of course, you have a your_spin% chance of going bust if you spin again, and a greater chance of losing if two people spin after you than one.

So, if you spin a 60 as the first spinner, your chance of losing if you keep it is ((second spinner 40% + 24%) + (third spinner if second fails 36% * 64%)) = 87%. As the second spinner (if you beat the first), you have a 64% chance of losing. These are both higher than break-even (50%), and your chance of going bust on an additional spin is 60%, which is less than the chance of losing if you keep the 60. Clearly, if you spin a 60, you should always spin again. The stay point is higher.

If you spin a 65, your chance of losing as the first spinner is (35% + 23%) + (58% * 42%) = 82%, and 58% as the second spinner. In this case, the chance of blowing a second spin is 65%, so a first spinner should spin again on a 65, but a second spinner should stay on a 65 if it beats the first spinner.

With a 70, a second spinner has a 51% chance of losing, and a first spinner has a 51% + (51% * 49%) = 76% chance of losing. The chance of blowing another spin is again in the middle.

It is at the 75 point that a second spinner has a 44% chance of losing, and a first spinner has a 44 + (44*56) = 69% chance, but the chance of a fatal second spin is 75%. So, no one should spin again on a 75.

First spinner should always spin again on anything less than 75.
Second spinner should always spin again on anything less than 65.

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Tuesday, November 3, 2009

Be Skeptical

You are told crap every day. We are constantly told things and expected to believe them without evidence that they are true. Often it is during an attempt to get our money, votes, or viewership. It is also often just because the teller is a believer and is honestly trying to provide value with the unsupported statements. Skepticism will help you protect yourself from manipulation and misinformation. Having an open mind does not mean that you should let everyone put crap in it. Just be open to people proving things to you with evidence. Close-minded people are those who insist they are right about things contrary to or in the absence of evidence.

Recently two people died and 19 more were hospitalized for not being skeptical. James Arthur Ray, who pushes The Secret and has been on Oprah, told a bunch of people that he could make them rich if they gave him about $10,000 each, fasted, then sat in a sweat lodge. That's an oversimplification, but has the gist. People got hurt for believing. New Age woo is just the snake oil of the 21st century.

Disney is shelling out $16 per person who bought a Baby Einstein video believing that it would make their baby smarter. A study a few years ago showed that the videos may even lower vocabularies. Disney said the videos would help babies, and consumers believed.

Scientologists were found guilty of fraud in France for selling junk to followers they said needed it after an electropsychometer showed spiritual problems. Stuff like this just blows my mind.

Seriously, if someone is selling you something they claim will help you, demand proof. If they can't show you some impartial, controlled, double-blind studies to back up their claims, keep your money. Testimonials are junk. Believers don't care about the truth, so ignore them. Arguing with believers is usually as productive as banging your head against a brick wall.

For more on skepticism and how it can protect you and help you understand what is true, I recommend books like The Demon Haunted World: Science as a Candle in the Dark by the late Carl Sagan. Also, James Randi has some interesting stuff. I am still waiting for someone to win Randi's money by demonstrating a supernatural power.

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Saturday, September 12, 2009

Wear Your Seatbelt

Seatbelts protect you. Always wear one when you're traveling in a car, even if only for a short distance. You may sometimes hear some anecdote about someone surviving a car accident who was not wearing a seatbelt, and some authority saying that the person would have died if the seatbelt was worn. Well, if that's ever really true, it is extremely rare compared to lives and functionality preserved by seatbelts.

Why don't they make cars that only start if the driver's seatbelt is buckled? If fact, cars now have sensors that deactivate the passenger airbag when there is no passenger. That same sensor could prevent a car from starting if a passenger isn't buckled in, too. Sure, someone could still buckle the seatbelt and sit on top of it, but that could be made uncomfortable, and I bet that the measure would still be a helpful nudge.

Tuesday, September 8, 2009

Don't Tailgate

I had always been told that you should stay a car's length away from the car in front of you for every 10 mph. That seems like a good rule of thumb. I see all kinds of nonsense on the road, though. There is no excuse for foolishly driving too close to the car in front of you. If the car before you has to brake for any reason, you will collide. You will not get to your destination any sooner by tailgating. I have seen a lot of collisions that would not have happened if the back driver had let there be more space between the cars. Use reason when you drive. Keep your distance.

Tuesday, September 1, 2009

Eat Little White Flour

Don't eat much white flour. It pumps the blood full of glucose too quickly, and it leaves the bowels too slowly. It doesn't take long to acquire the taste for whole grains.

Tuesday, August 25, 2009


There's really only one good reason to go into debt: you're going to use the borrowed money to increase your ability to make money, such that you will have more money in the future than if you did not borrow, taking inflation into account.

Borrowing for other reasons is generally dumb. When you buy a car with credit, and pay it off over so many years with interest, you end up with a loss. Maybe you really like the car, and the extra thousands of dollars were worth it to you, but many people don't realize how much they're really paying.

Education is generally a good reason for debt. College is expensive, but college graduates make more money in the workforce. (Graduate school, on the other hand...)

People like to buy houses with borrowed money. You are probably aware of the role this played in the economic catastrophe. There is a draw to home ownership, even with debt, because the house can be leveraged for even more debt. People borrow to get a house, then borrow against the house to get a fancy car or boat. This makes those things greatly more expensive, and increases the risk of defaulting. The most appropriate use of money borrowed against one's home is home improvement. Use that money to make the house more valuable.

I argued about this with an economics professor who said we should be happy that G.W.Bush put the US into so much debt because debt means we have more money for growth. Unfortunately, borrowing a trillion dollars from China so we can bomb Iraq just forces our children to pay a trillion in interest over their lives, and only Halliburton and Blackwater and Lockheed see the payoff. Iraq was not a large enough threat to the US to justify the money spent. It made sense to go into debt during the Cold War under Reagan because the threat to the US could have wiped out future productivity. That kind of debt is inappropriate now, but too many Republicans have betrayed their fiscal conservatism ideology, and instead hemorrhage money on a tyrranical and imperialist security and military structure. That money could have developed our commercial and industrial infrastructure, education system, and given all citizens healthcare for life, which would have greatly improved our whole nation's future productivity, resulting in a net gain instead of a loss. Debt only makes sense when it is for growth, or real survival (not from fake threats hyped up by an administration to justify giving itself more power at the expense of liberty).

So what do you do if you want something, but can't afford it now? Be patient and save up for it, like everyone used to do. Don't be an impatient materialist. Remember that study on delaying gratification with the little kids and the marshmallows? Being able to delay gratification was the strongest predictor of success in life, and the kids who grabbed the sweets immediately were more likely to go to jail and drop out of school. Practice being a better person. Practice patience and financial responsibility. Develop a strong frontal lobe that can inhibit bad impulses and make good decisions. Save up to buy something.

Also, pay attention to whether or not you really need what you want. I know for a fact that you don't need a television, especially not a big flat panel. I also know that you don't need to buy a brand new car. My car is 19 years old, gets 32 mpg, and the annual repair and maintenance bills are a small fraction of what new car payments would be. You also don't need a Coach purse or Dior shirts. If those things are important to you, buy them with cash instead of debt. You also do not need to eat at restaurants. Healthy and delicious meals are very cheap if you make them yourself, and you can make your food unique and interesting.

Behavioral scientists have found that people spend more when they're using a credit card, as if it's not real money if they're not holding the greenbacks. Well, use that to your advantage. Pay for things with cash. See if it helps you be more responsible.

Borrowing money is for real emergencies or real opportunities for future gain. When you go into debt for materialism, you set yourself up for greater loss, and you neuroplastically encourage weaknesses in your brain.