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avatar You are viewing an archive of articles by Luke Landes. Luke Landes is the founder of Consumerism Commentary. He has been blogging and writing for the internet since 1995 and has been building online communities since 1991. Find out more about Luke Landes and follow him on Twitter. View 's Google Profile.

Luke Landes


Naked With Cash is an ongoing series at Consumerism Commentary in which readers share their households’ finances with other readers. These participants benefit from the accountability that comes from tracking their finances publicly and the feedback of the four expert Certified Financial Planners (CFPs).

For more information, read this introduction.

Over the course of 2014, four Consumerism Commentary readers have shared their financial reports, exposing the results of their financial choices on a day-to-day basis. Each participant is paired with one of our Certified Financial Planners. Throughout the year, the experts have provided insight and guidance to help our participants take their finances to the next level, and as the series is now ending, we are able to look back on the year. Learn about this year’s participants and experts.

Jake and Allie are animal lovers who enjoy their pets and have no plans for children. Both are committed to early retirement. Jake and Allie are both interested in owning side businesses, even though they plan to use their nest egg for living expenses. The couple enjoys travel and make it a priority to take trips throughout the year. They believe that it makes sense to use part of their combined $140,000 income to enjoy life now. (Read their update from last month.)

After reading Jake and Allie’s comments, you can watch a Google Hangout they participated in with Financial Planner Neal Frankle. Neal Frankle appears courtesy of Wealth Pilgrim and MCMHA.org. This month’s Naked With Cash is the last of the year, and includes information on debt reduction and a wrap-up of the year.

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The National Retail Federation has admitted defeat. Sales over the past holiday weekend dropped 11% over Thanksgiving weekend in 2013 according to the organization in a press release yesterday. The organization reversed course after being highly positive about the prospects for shopping leading up to the announcement of the estimated figures.

Shopping traffic for the weekend dropped 5% or 6%, depending on how you want to calculate it, compared to last year. The Federation tried to put a positive spin on the news.

I avoided shopping this weekend, from Thanksgiving day through today, the so-called Cyber Monday. Don’t get me wrong — there is much shopping I want to do before the holidays in December, but the excessive deal-wrangling this weekend just drives me away from wanting to pursue any shopping.

I’m not so much of a bargain hunter. I am interested in good deals, but most of the supposed bargains you see around Thanksgiving look good and sound good, but just aren’t all that good. And the details that are truly good, whatever that means, are almost always for items I wouldn’t want or don’t need.

For deal shoppers, the best time to buy is generally after Christmas, but there are a few obvious problems with that. First, it’s difficult to generalize. Overall, this might be true, but for any particular item, there’s no way to know. That’s why shoppers rely on Black Friday deal ads. They give shoppers some confidence, even if the resulting deal is not the most ideal price for any particular item. If you buy a gift using a Black Friday ad or Cyber Monday deal, you feel good about saving money, and for the human brain (but not your future self), that’s better than actually saving money.

The best method I’ve found for spotting good deals is CamelCamelCamel. This only applies if you have a specific item in mind, if that product is sold on Amazon.com, if Amazon.com generally offers the best price for that item among retailers, if you’re not on a tight time frame for making the purchase, and if you are willing to be a customer of Amazon.com. CamelCamelCamel is a website that tracks Amazon.com’s prices and can alert you whenever the price reaches a certain point. That price point could be one that you specify as your trigger, or it could be a price suggested by the CamelCamelCamel service using an algorithm that takes into the previous lowest price for the item.

The best thing about CamelCamelCamel is that it makes me wait. I’ve had items registered — it can work directly with your Amazon.com wish list if you want — for over a year, and suddenly, I’m alerted that an item, say a movie Blu Ray set, has reached my price point. The delay ensures I’m no longer under the influence of an impulse desire to purchase. Because if there’s something I want and need right away, and the cost is reasonable, I’m going to buy it right away rather than wait for a deal.

But if I know that, for example, the remastered Star Trek: The Next Generation season Blu Rays are eventually sold for more than a 60% discount off their initial sales price, usually within a year, I just set my price point trigger and wait.

And maybe more and more consumers are like me, bypassing the heavily advertised deals for more researched best prices. That could be one contributing factor to this year’s sharp decline in consumer activity over the traditionally biggest sales weekend of the year.

What role does the larger economy have? If people feel they are worse off financially, they might not plan on shopping as much this year as they did last year. If, however, people feel they are in a better financial position than they were last year, they could be less likely to pay attention to the holiday sales. In other words, you could use just about any state of the economy to justify both a strong and a weak holiday shopping season.

There might be some legitimacy to the idea that people feel better about the economy, which takes away from the desire to seek bargains at every opportunity. It’s clear that the recession in 2008 had long-lasting effects, not just in terms of employment, but in approach to life and money. Ideas like frugality, extreme saving, and supercharged planning for retirement became much more popular and legitimate than during times of stronger consumer confidence.

Throughout this period following the recession, I considered whether this was a permanent shift in approach along the lines of how the Great Depression affected an entire generation’s approach to money. The question was whether Millennials or Generation Y would be defined by the recession. My thought has always been that this is temporary, and I still think that is the case.

Perhaps this past weekend is the first indication that once Millennials feel more confident about their financial situation — and the lower gas prices may go a long way to reinforce that feeling today. Holiday sales are still driven by shoppers aged 18 to 34, so if this group is feeling better about the economy, this could be start of the generation’s shift away from conscious spending. It was fun (and successful) while it lasted.

The increase in confidence, whether it’s starting now or not, is going to have some profound effects. The value of assets — the stock market, real estate, etc. — will increase. Even if retailers continue to see problems throughout this year’s holiday season, the long-term prospect for sales are good. Confidence overflows into all areas of commerce, at least for some time. And during that time, shareholders benefit.

Workers feel confident about their employment prospects, so executives work harder to retain the best talent. Salaries increase. Disposable income increases. Prices also increase, but consumers handle it.

Another potential drawback that resulted in this year’s decrease in spending is the backlash surrounding the idea that retailers want to remain open on Thanksgiving Day. Retailers claim they are responding to customers’ demand to allow in-store shopping during the holiday, and there’s no doubt there are more than enough shoppers lined up during the holiday to give stores a reason to open. But employees are generally not happy. No one wants to be forced to work when the rest of the country is celebrating a holiday that supposedly focuses on time with family and friends.

And there are movements that encourage people to change their shopping behaviors during the holidays, whether’s it refusing to patronize stores that remain open on Thanksgiving, refusing to buy anything on Black Friday (also known as “Buy Nothing Day”), or encouraging shopping at family-owned local stores rather than large national and online retailers. These trends permeate Generation Y as much as or more than the desire to spend frugally. There’s no question that this disdain for large corporations, consumerist culture, and mass materialism has an effect on shopping attitudes for a good proportion of Millennial shoppers.

Did do any holiday shopping between Thursday and today? Was your approach different than last year’s? Are you spending more money for the holidays this year?

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Naked With Cash is an ongoing series at Consumerism Commentary in which readers share their households’ finances with other readers. These participants benefit from the accountability that comes from tracking their finances publicly and the feedback of the four expert Certified Financial Planners (CFPs).

For more information, read this introduction.

This year, we have four participants who will share their financial reports, exposing the results of their financial choices. Each participant is paired with one of our Certified Financial Planners. The experts will provide insight and guidance that will help our participants take their finances to the next level by the end of 2014. Learn about this year’s participants and experts.

Jake and Allie are animal lovers who enjoy their pets and have no plans for children. Both are committed to early retirement. Jake and Allie are both interested in owning side businesses, even though they plan to use their nest egg for living expenses. The couple enjoys travel and make it a priority to take trips throughout the year. They believe that it makes sense to use part of their combined $140,000 income to enjoy life now. (Read their update from last month.)

After reading Jake and Allie’s comments, you can watch a Google Hangout they participated in with Financial Planner Neal Frankle. Neal Frankle appears courtesy of Wealth Pilgrim and MCMHA.org. This month’s Naked With Cash focus is on estate planning.

Read the full article →

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The self-help industry continues to produce hundreds of new books every year, explaining how people can live their lives, improve their identities, and build wealth towards financial independence. There’s nothing wrong with this approach, in particular. You never know when you’ll find an author, a blogger, or a friend who will put words in the right order, and the result is a connection that can change your life.

I know this from experience. Over the last decade, readers have contacted me privately to thank them for the information and the stories I’ve provided here, whether it’s a warning about a company you might not want to work with, or sharing my past mistakes in an effort to prevent others from making those same mistakes. When I realized I needed to make changes in my life, it wasn’t a guru, author, or blogger, or friend who opened my eyes. It was my own bad situation — the loss of a job, car, girlfriend, and apartment in a short time span. I had to make changes and then I found the Motley Fool’s “Living Below Your Means” message board.

The messages there, with thoughts from real people, not experts selling books or trying to attract pageviews, helped me come to terms with some changes I needed to make.

I already knew about the self-help industry. My first major job after college was with a company whose executive director lived and breathed life gurus and expensive brainwashing seminars. I never wanted any part of that.

The gurus of today owe a lot to philosophers of the past, Socrates and Plato in particular.

In fact, Socrates might have been considered a guru in his day. At least through the eyes of his student Plato, Socrates was a teacher. He placed a high importance of knowledge over ignorance, and knowledge even over winning an argument. This philosophy would prevent him from succeeding well within the media environment in the United States today, but his teachings have stood the test of time.

Because much of we know about Socrates comes from the writings of his protege Plato, it’s hard to know how much of of what we know about the philosophies of Socrates is filtered through Plato’s own philosophies. Keep that in mind as I continue to look through some specific examples of how Socrates and Plato have paved the way for modern thoughts about life and money.

The examined life.

In Apology, Socrates discusses self-knowledge. Self-knowledge, self-awareness, the examined life — these are all different ways of saying that in order to become a functional human being, you have to know who you are right now and accept who you are today before you can move forward.

This is a good way to sum up the initial purpose of Consumerism Commentary, and how I approached my finances in the two years or so leading up to starting this website, from about the year 2001. One of the first steps to improving your finances is taking an inventory of what you own and owe — your assets and liabilities. That gives you knowledge of your financial self, at least in one snapshot of time.

But beyond the dollars and cents, you also have to know who you are. Identify the habits you have and why you have them. Identify your core beliefs about money and wealth, especially if they are holding you back. Take some time to think about your values and what kind of life is important to you. Think about your history and whether you might have been subject to any biases as you were forming your values.

Only with a full understanding, after examining your life as it is today, will you be able to make the best decisions about where to go, how to behave, and who to be.

Learn from others’ writings.

Again, this represents my core approach to Consumerism Commesntary. It’s such a difficult lesson, though. The best teacher is often experience. Someone could tell you a hundred times not to stick a pair of scissors in an electrical socket. You could know that it’s probably a bad idea. But, you still do it anyway, and the result is you’re thrown across the room. Yes, that is a mistake I made when I was a child. Perhaps it explains much about me. Or perhaps it just shows that sometimes you often can’t comprehend consequences until you face them yourself.

People in the developed world know that being in debt is bad. They know that spending more than one has in income will cause major problems in life after a while. They understand that negative net worth is bad, and they understand the basic arithmetic that quantifies that result. But this knowledge generally doesn’t prevent people from finding themselves in uncontrollable debt due to overspending. The reasons people spend money often outweigh the potential for negative outcomes in the future.

So this is why writers try to warn others about the dangers of debt. They tell their own stories in the hopes that they will connect with someone and prevent them from learning the “hard way.” Socrates wants people to learn from others, just like bloggers do.

Socrates on contentment.

Happiness was an important part of the philosophy of Socrates. And over the last few years, one idea of his started to become popular again, especially as a series of different academic studies set out to prove similar theories. There is a relationship between money and happiness. One survey pinned a happiness plateau on a certain annual salary, and claimed that increases in income above that identified salary did not have a strong effect on happiness. Another survey showed that your happiness with your financial situation has more correlation with how you perceive your situation when compared to your friends and colleagues.

The increase in popularity for a frugal lifestyle, including downsizing living arrangements, adopting the minimalist culture, and spending money on experiences rather than objects, has been partially amplified by the latest major recession and, in many cases, borne out of a need (a lack of financial resources).

Socrates — or perhaps Plato — is likely smiling in his grave. Socrates is quoted: “He is richest who is content with the least, for content is the wealth of nature.” How many writers and bloggers, including myself, have said something similar? If you can be content with less, you will not maintain a constant desire for more.

Socrates also found fault with both wealth and poverty, through Plato’s illumination of his teaching in the latter’s Republic. Both destroy someone’s ability to produce good. As one becomes wealthy and doesn’t need to work for money, he can become lazy in his endeavors and work and other contributions to the world suffer due to a lack of financial motivation; poverty, on the other hand, deprives one from the resources necessary in order to do the best work.

“Wealth, I said, and poverty; the one is the parent of luxury and indolence, and the other of meanness and viciousness, and both of discontent.”

Morality is more important than wealth.

The desire for wealth pulls people away from moral imperatives. I’ve seen this personally. With money on the line, people will often lie, cheat, steal, and extort if they’re in a position to do so. We encourage entrepreneurs and CEOs to be greedy, not just because Wall Street and large institutional investors require it of them, but because today’s society places such a large importance on financial success. The heroes in the media are not those doing the most good (though it is often argued that providing jobs for many is doing good for the world), but a small percentage of athletes, a small percentage of performing artists, and politicians.

You can see that just by looking at your social media feed. How many of your friends mourn the passing of celebrities, or consider it a great tragedy when a “beloved” actor or athlete passes? An unknown solider, a child born in poverty, the many thousands of young women sold into sex slavery — very few mourn these tragedies. But a famous actor dies and it’s the saddest thing in 65.5 million years.

We see greed as a positive attribute, and claim that success is impossible without a strong desire for not just success but its specific symbols, primarily money in the bank.

Most importantly for Socrates, morality leads to happiness. Wealth, and the desire for wealth, leads away from morality. So where does that leave us who want to strive for financial independence? Do we need to put our financial desires aside to be happy? Or can we still aim for financial independence without desiring anything beyond what we need to pursue the moral lives we would like to live without the burden of financial distress?

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Is Acorns the Next Best App for Investing?

by Luke Landes
Acorn App

Acorns allows investors to divert small amounts of money to the stock market, $5 at a time. And all you need is your mobile phone. Have you seen the fees?

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The Best Cash Back Credit Cards, December 2014

by Luke Landes

Cash back credit cards can help consumers practice responsible spending while earning a little extra for their efforts when used properly. The days of earning 5 percent cash back for credit card purchases may be nothing but a memory, but the smart use of credit cards can still be profitable for diligent spenders. You may be ... Continue reading this article…

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Naked With Cash: Laura and Leon, September 2014

by Luke Landes
Laura and Leon - Naked With Cash

Naked With Cash is an ongoing series at Consumerism Commentary in which readers share their households’ finances with other readers. These participants benefit from the accountability that comes from tracking their finances publicly and the feedback of the four expert Certified Financial Planners (CFPs). For more information, read this introduction. This year, we have four ... Continue reading this article…

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Naked With Cash: Brian, September 2014

by Luke Landes
Brian - September Naked With Cash

Naked With Cash is an ongoing series at Consumerism Commentary in which readers share their households’ finances with other readers. These participants benefit from the accountability that comes from tracking their finances publicly and the feedback of the four expert Certified Financial Planners (CFPs). For more information, read this introduction. This year, we have four ... Continue reading this article…

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Naked With Cash: Jake and Allie, September 2014

by Luke Landes
Jake and Allie - September Net Worth

Naked With Cash is an ongoing series at Consumerism Commentary in which readers share their households’ finances with other readers. These participants benefit from the accountability that comes from tracking their finances publicly and the feedback of the four expert Certified Financial Planners (CFPs). For more information, read this introduction. This year, we have four ... Continue reading this article…

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The One Action You Need to Take in Any Market Correction

by Luke Landes
Bear Market

As of today, the Dow Jones Industrial Average has erased all of its gains this year. We’re not quite in “market correction” territory, though. The S&P 500 is still up year-to-date, but it isn’t presenting as fantastic a return as was evident earlier in the year. We could be getting to the point where the ... Continue reading this article…

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