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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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Students of chemistry are likely aware of the four fundamental states of matter. The most advanced chemistry course I’ve taken was in high school, although I must have learned about this basic concept earlier than that. Solids have a definitive shape and volume; liquids assume the shape of its container and flow easily; gases also take the shape of the container but can be compressed in volume. The fourth state, plasma, is like gas, but produces electromagnetic fields and electric currents.

Scientists will argue that there are a number of additional states of matter, but the four fundamental states roughly equate to financial stability. To create this metaphor, there’s no need to look at superfluids or Bose-Einstein condensates.

Using the four fundamental states of matter to describe financial stability may be more relevant to someone’s life than, for example, stages of personal finance. When you break life into stages, you imply a smooth progression, or at least a linear, one-directional progression, across the stages. This has not been my observation of financial progress. Like states of matter, life can progress in any direction. And, although it’s difficult as it is with matter, one can jump from one state of personal finance to a non-adjacent state, in either direction.

State of personal finance: plasma.

Of the four fundamental states of matter, plasma has the highest levels of energy and the highest levels of chaos. Sub-atomic particles break away from each other. Two real-world examples of plasma are lightning and fire.

Lightning and fire are best avoided, and so is the plasma state of personal finance. This is when your finances are in disarray, perhaps due to a desire to ignore what might make you upset or being on the aftershock side of a financial catastrophe. Like the electrons in plasma, you have no control over your financial state of being. You are not aware of your net worth at any particular time, your expenses, or how much of a deficit you have each month.

My personal finances were in this plasma state of matter for too long as an adult. With a job working eighty hours a week or more, earning much less than minimum wage because I didn’t qualify for overtime, with a tiny non-profit salary living in a state with one of the highest costs of living, I knew my finances were heading towards danger, but I managed to find ways to survive — until the lack of financial foundation resulted in a devastating collapse.

State of personal finance: gas.

The gas state of matter is more organized than plasma, but it still has no form of its own. Just like the oxygen in the air, we need gas to live, and to survive financially, we need our personal finance situation to be in the gas state or beyond.

This fundamental state lines up with financial awareness. The molecules in a gas are not yet properly organized, but at least they are not falling apart. Financial awareness is the beginning of organization your financial life. You’ve begun understanding the importance of long-term financial health. You’re documenting your spending, tracking your net worth, reading about living below your means, evaluating strategies for getting out of debt and putting them into action, and otherwise taking steps to improve your life.

After my financial collapse, I realized I needed to make some changes to my life. I started reading the Motley Fool message boards, where amateurs would share their tips for making better financial decisions.

This was before personal finance blogs existed, before I created Consumerism Commentary. This was before popular financial blogs, like the one you are reading, Get Rich Slowly, Bargaineering, and Mr. Money Mustache were changing people’s lives.

I created a rudimentary budget, used free software to track my financial activity, and traded my job at a non-profit where I had no hope for advancement for one in which I actually had a path for development.

State of personal finance: liquid.

The molecules of a liquid are well-organized. They stick together and form a pattern, though the matter is still very fluid.

Investors talk about liquid assets, and that pertains to how easily one can turn that asset into cash for spending or investing. Your bank account is very liquid because you can withdraw money immediately; your house is not a liquid asset because it would take a lot of effort and money to sell it to realize its cash value.

To continue with the metaphor, the liquid state of personal finance is a little different than a liquid asset. When your financial situation is in the liquid state for the purposes of this article, you have control. You are in the process of getting out of debt, and you have put a priority on increasing your income. Your goals are more clear and you are determined to reach an event like being debt-free for the rest of your life or retiring with enough money that you won’t need assistance. You have excess cash flow each month, and you’re using the excess to pay off debt, save for the future, or invest.

Two changes I made between 2001 and 2002 were the most effective for moving myself out of the gas state into the liquid state of personal finance.

  • The new job helped. It wasn’t my dream job, not my passion, but at least I could make a living and build a foundation for the future.
  • I drastically reduced my living expenses by moving into a large apartment with three roommates. It wasn’t always comfortable, but I was able to save a lot of money with rent.
  • Taking my finances seriously allowed me to see my situation for what it really was — and that provided motivation and inspiration for improvement.

Eventually, I was getting to the point where I was able to invest more in myself. I could save money for the future in the form of investing in stock market index funds, a technique I gleaned from the Motley Fool online forums, and I worked hard every night after my nine-to-five job learning and writing about personal money management, investing, getting out of debt, and making better decisions with money.

State of personal finance: solid.

When matter is in its solid state, the molecules are incredible organized. There is no chaos. Solids have a definite size, shape, and volume, and these don’t change unless some kind of force influences it. The idea of solid financials is so strong that financial companies often use images based on solidity in their public messaging. Solids are stable, and stability is an apt aspect for any company that wants to be trusted with your money.

One investment and insurance company formerly used the Ashford and Simpson song from the 1980s, “Solid (As a Rock),” as their jingle, and that company still uses one of the most famous geological rock formations in its logo.

In the solid state of personal finance, one has no debt, except, perhaps, for a home mortgage, or strategic debt related to investments. (But the amount of debt in any case is controlled.) A household has and maintains a positive net worth, and cash flow is positive each month. There is enough excess cash to save for the future — there is no living paycheck-to-paycheck. Your emergency fund has your back to handle unexpected financial events.

Many people’s finances never reach this solid state. It is possible to survive in the liquid state, but it’s living on the edge, always in danger of returning to gas. It’s much more difficult for a solid to change to a gas — in chemistry, that process is sublimation — but liquids often change to gas under certain circumstances. A solid money management approach protects your money from vaporization.

I didn’t reach a truly solid state of personal finance until I was supplementing my day job income with a side business. I could have gone without the extra income, but it would have taken a much longer time to reach a point where I was no longer concerned about my ability to pay all my bills each month. Although it wasn’t overnight — in fact, one might say my business was more than ten years in the making — creating my own asset out of thin air was the quantum jump I needed to generate significant progress towards my financial goals.

Bonus state of personal finance: supersolid.

In chemistry, supersolids exist, or perhaps it’s more accurate to say that some matter exhibits supersolid properties, but to be honest, my knowledge of chemistry does not extend far enough to have a working knowledge of what that might mean. When I started my personal finance journey, I didn’t even know of the existence of this state of being, much less this state of matter.

If the solid state of personal finance requires a steady stream of income to maintain that state, and that income requires a trade-off of time and effort, then the supersolid state of personal finance is that point at which you no longer need to trade your time and effort to afford to live however you want to live your life. It’s kind of like the classical retirement — by classical, I mean the 20th century, upper-middle class concept — wherein you quit your job, relying only on income from your pension, or more recently, your own investments.

Beware people who promise that you can retire early. There is a very popular movement extolling the virtues of extreme saving and “retiring early,” but if you look closely, some of the loudest voices are still working. They’re just working at something they enjoy, relying on income from such work, and calling it “retirement.” The supersolid state of personal finance isn’t merely retiring, it’s being truly financially independent.

Followers of Consumerism Commentary know that I sold my business a few years ago. Between profit from the business as it was ongoing and proceeds of the sale, I’ve been able to save and invest more than I would have earned from my day job over the course of the remainder of my lifetime. I’m not bragging; I simply consider myself lucky and happy I had some foresight into a profitable trend, and I only state this to point out that it is possible, if rare, to reach this supersolid state, financial independence.

And still, life can change at any time. There’s no reason to believe that my finances will definitely not return to any other state in the future. Solids can melt, liquids can vaporize, just as gases can condensate, and liquids can freeze. And as I mentioned above, it’s even possible but rare to jump from one state to another. Solids are stable, and supersolids even moreso, so the goal in terms of personal finance, at least for most people living in a developed nation with reasonable opportunity, should be to reach those states.

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This is a guest post from J.D. Roth, who founded the Get Rich Slowly blog and currently writes at More Than Money. J.D. recently launched a year-long "Get Rich Slowly" course, which is based on the idea that you’d have greater financial success if you managed your money as if you were running a business. I’ve previously written about approaching your finances like a business.

I’m convinced that more people would achieve financial success if they managed their home economy as if they were running a small business. We all know that a company needs to earn a profit to survive, but few understand that the same principle applies to our personal lives.

To build personal wealth, you must spend less than you earn. When you do, you’re earning a “profit” and building wealth. But if you spend more than you earn, you’re losing money and in danger of falling into debt. The greater the gap between your earning and spending, the faster your net worth grows (or shrinks).

The key is to boost the profitability of your personal economy by spending less and earning more.

But not every path to profit is equal. Some opportunities are unappealing because they take either a lot of time or a lot of effort -– or both. Other options are a low priority because they have only a small impact on your bottom line. The best paths to profit – in business or personal life – are those that provide some combination of low difficulty and high reward.

There are four types of things you can do to reduce your expenses or boost your income.

  • Pyrrhic victories are activities that take a lot of time or effort without yielding an equivalent payoff. In business, these might include sweeping the parking lot or leasing a large office space. On a personal level, these are things like making your own laundry detergent or raising money by collecting old newspapers door-to-door.
  • Ongoing projects also require a lot of time or effort, but they provide huge payoffs when they’re finished. Last year, for instance, I organized and sold my collection of comic books. That project took over 100 hours of tedious work, but paid off with a $25,000 windfall. Similar projects might include moving to a cheaper home in a cheaper city or returning to school to earn a degree.
  • Daily victories are the bread-and-butter of personal finance. They’re easy (or quick) actions that yield small rewards, such as working overtime, clipping coupons, or making use of the public library. Because there are so many small, simple ways to boost your personal profit, these are the things most commonly covered in books and blogs and magazines. These daily victories are great—but it takes a long time for them to affect your bottom line.
  • Big wins are the Holy Grail. They’re the easy (or quick) things you can do to supercharge your saving rate. These include negotiating your salary (which takes minutes, but can pay off for decades to come) and reducing your transportation costs (which you can do in a matter of days).

You can improve profits by doing things in all four categories, but it’s important to keep each action in its place.

You should only pursue Pyrrhic victories when you’re unable to do any of the tasks in the other three categories. It’s foolish to try to get out of debt by making your own laundry detergent while you still have a huge mortgage. That’s like Microsoft trying to boost profit by spending less on pencils instead of selling more copies of Windows.

And what are the best ways to achieve these big wins? Well, it’s doing the things that most other people are unwilling to do:

  • Down-size your home. Housing is the biggest expense for most Americans, and by a wide margin. The typical household spends $1408 on housing each month, or about a third of its budget. Drop that by 10%, and you’ll save $150 per month. Drop it by 30% and you’ll save more than $5000 per year!
  • Drive less. Transportation is the second-largest expense for the average family. You can save big by biking or walking, using public transportation, or swapping your current car for a less-expensive used model with good gas mileage.
  • Earn more. You can cut costs only so much, but your earning potential is theoretically unlimited. If you really want to boost your personal profit, make more money. Go back to school, become a landlord, sell your stuff, take a second job. Of course, as an entrepreneur, you’re already working hard to increase your income.

The biggest barrier between the average person and financial success isn’t ability. It’s psychology. Big wins require effort and sacrifice, which can be tough to stomach. But the sooner you see that these choices aren’t extreme measures but the best way to achieve your financial dreams, the quicker you’ll get out of debt or reach financial independence. The small stuff forms a great basis for behavioral change, but it’s doing the big things that will make you rich.

This is a modified excerpt from "Be Your Own CFO", the 120-page guide included with the year-long "Get Rich Slowly" course. The guide includes tips for boosting revenue and cutting costs so that you can maximize profit in order to achieve your dreams, whether those are to retire early, send your kids to college, or travel the world. Want to know more? Buy it now.

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There may be only about six stories in personal finance, but those stories seem to endure the passing of time. Good storytellers can breathe new life into the same old financial advice, and great communicators can introduce world-weary concepts to those who might need to hear them for the first time.

While looking for information about a town in upstate New York, I came across a gazetteer written in 1871 for Saratoga County. It’s a booklet, digitized for aiding online research, containing a business directory of several towns within that county. Like a telephone directory, the book contains names and addresses of residents, although unlike a telephone directory, there are no phone numbers.

The book is more than just a directory, though. The gazetteer offers historical accounts of the towns covered as well as general information a household in 1871 might need, such as a guide to the decimal system of measures, “recipes” for home remedies for common ailments, and of course, advertisements. (See one such advertisement, for pills “to prevent female irregularities,” reproduced here.)

What I found particularly interesting was a section titled, “How to Succeed in Business.” Several pages in the book are dedicated to help readers make good decisions with their labors, their interpersonal relationships, and the management of their money. There’s nothing particularly special about this. Financial self-help guides and business advice have been published for longer than this country has been in existence, but I enjoyed this discovery and thought it would be worth sharing.

Here are some excerpts, first on being an upright citizen in business.

What will my readers give to know how to get rich? Now, I will not vouch that following rules will enable every person who may read them to acquire wealth; but this I will answer for, that if ever a man does grow rich by honest means, and retains his wealth for any length of time, he must practice upon the principles laid down in the following essay. The remarks are not original with me, but I strongly commend them to the attention of every young man, at least as affording the true secret of success in attaining wealth…

Foremost in the list of requisites are honesty and strict integrity in every transaction of life. Let a man have the reputation of being fair and upright in his dealings, and he will possess the confidence of all who know him. Without these qualities every other merit will prove unavailing… In a word, it is almost impossible for a dishonest man to acquire wealth by a regular process of business, because he is shunned as a depredator upon society…

While most of the advice and observations in the few pages are still true seven score and two years hence, I am struck at how this last statement would probably be perceived as naive today. Today’s corporate environment seems to encourage taking advantage of customers to the extent allowable by law, and in many cases, crossing that line and avoiding meaningful punishment. Corporate executive take home astronomical salaries in comparison to those of their workers, and when those same companies have been found to contribute to the systemic failure of their industries or the economy at large, very few are held accountable. In short, today, dishonesty is acceptable in business as long as your lobbyists are successful.

The next excerpt relates to blind trust.

Next, let us consider the advantages of a cautious circumspection in our intercourse with the world. Slowness of belief and a proper distrust are essential to success. The credulous and confiding are ever the dupes of knaves and impostors. Ask those who have lost their property how it happened, and you will find in most cases that it has been owing to misplaced confidence. One has lost by endorsing, another by crediting, another by false representations; all of which a little more distrust would have prevented. In the affairs of this world men are not saved by faith, but by the want of it…

Before trusting a man, before putting it in his power to cause you a loss, possess yourself of every available information relative to him. Learn his history, his habits, inclinations and propensities; his reputation for honor, industry, frugality and punctuality; his prospects, resources, supports, advantages and disadvantages; his intentions and motives of action; who are his friends and enemies, and what are his good or bad qualities. You may learn a man’s good qualities and advantages from his friends — his bad qualities and disadvantages from his enemies. Make due allowance for exaggeration in both…

This was a lesson that took me some time to learn. I’ve always considered my trust in others a virtue; I suppose it is, except in business. Had I taken this advice to heart, I’d probably be in a better position today.

The author of this passage in the gazetteer also shares his opinions about a man’s relationship with money.

The art of money-saving is an important part of the art of money-getting. Without frugality no one can become rich; with it, few would be poor. Those who consume as fast as they produce, are on the road to ruin. As most of the poverty we meet with grows out of idleness and extravagance, so most large fortunes have been the result of habitual industry and frugality. The practice of economy is as necessary in the expenditure of time as of money. They say “if we take care of the pence the pounds will take care of themselves.” So, if we take care of the minutes, the days will take care of themselves.

The acquisition of wealth demands as much self-denial, and as many sacrifices of present gratification, as the practice of virtue itself. Vice and poverty proceed, in some degree, from the same sources, namely — the disposition to sacrifice the future to the present; the inability to forego a small present pleasure for great future advantages. Men fail of fortune in this world, as they fail of happiness in the world to come, simply because they are unwilling to deny themselves momentary enjoyments for the sake of permanent future happiness…

Every large city is full of persons, who, in order to support the appearance of wealth, constantly live beyond their income, and make up the deficiency by contracting debts which are never paid. Others, there are, the mere drones of society, who pass their days in idleness, and subsist by pirating on the hives of the industrious. Many who run a short-lived career of splendid beggary, could be persuaded to adopt a system of rigid economy for a few years, might pass the remainder of their days in affluence. But no! They must keep up appearances, they must live like other folks…

Frugality didn’t just form as a result of the recent recession, but it sure seems that way sometimes. But for everyone who adopts a frugal approach to their life, there are many others who prefer to live in such a way they appear to be wealthy. From this passage, I would assume 1871 saw a prevalence of the “keeping up with the Joneses” attitude just like today. Although the development and promotion of credit cards accelerated consumer debt during the twentieth century, it seems like citizens of this country in the nineteenth century had to contend with debt as well.

Finally, some advice about investing:

Stick to the business in which you are regularly employed. Let speculators make thousands in a year or a day; mind your own regular trade, never turning from it to the right or to the left. If you are a merchant, a professional man, or a mechanic, never by lots or stocks, unless you have surplus money which you wish to invest. Your own business you understand as well as other men; but other people’s business you do not understand. Let your business be some one which is useful to the community. All such occupations possess the elements of profit in themselves.

These two points from the above are important:

  • Don’t invest in businesses you don’t understand. Stock pickers often look at stocks not as businesses but as collectibles to trade. I’ve purchased shares of companies without really knowing much about the companies’ management. I felt that cloud computing and distributed hosting would grow, so I purchased shares of a company that did that. I thought that Microsoft had a pervasive business, so I purchased stocks in that company. I predicted Toyota had room for growth when the company hit some snags, so I bought when the price dipped. But I only invested as much as I’d be willing to lose in return for the potential of gains.
  • Some work has inherent value. If you are involved with a business that produces something for the benefit of the community or society at large, you are adding something positive to the world. In return, your compensation may not be spectacular, but if you can make a living and save for the future, you’ll likely feel better about your life than if you’re involved in an occupation that takes something away from the world.

Read the entire “How to Succeed in Business” passage from the Gazetteer and business directory of Saratoga County, N.Y. and Queensbury, Warren County, for 1871, as well as a section on “Cash and Credit,” compiled and published by Hamilton Child.

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The Words You Choose: Are Certain Expenses “Investments?”

by Luke Landes
Words

Earlier today, Naked With Cash participant Anonymous S offered his latest financial update. He noted in June how after moving into a new apartment, he increased his credit card spending to pay for new household furnishings. He’s been calling this spending an “investment.” Our Certified Financial Planner, Roger Wohlner, offered the same feedback I would ... Continue reading this article…

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Four Reasons to Talk Honestly About Money

by Luke Landes
Talk About Money

Prior to starting Consumerism Commentary, I didn’t talk about money. I’d encountered money problems with friends and families, and dealt with the problems as they came, but except for a conversation later on with my father once I was starting to improve my financial situation, it just wasn’t a topic for general discussion. People don’t ... Continue reading this article…

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Moved Bank and Investment Accounts to a Living Trust

by Luke Landes
Living trust

I spent about half of the day today taking care of some of the financial responsibilities I have been putting off. It feels good to check to-do items off my list, especially if they have been sitting there for some time, and I’ve been either procrastinating or filling my day with other priorities. One of ... Continue reading this article…

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The Psychology Behind Financial Wellness

by Guest Author
The psychology behind financial wellness

As far as I’ve come with my ability to manage my own finances, I often fall back into the comfort of unmanaged chaos. The comfort comes from the lack of work and the lack of worry, which often win the day over meticulous planning and consideration. I’m cushioned at the moment; I know that I ... Continue reading this article…

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Moving Assets Into a Revocable Living Trust

by Luke Landes
Pennies

To prepare for the idea that someday I may no longer be alive, but also as a matter of general organization, I have created a revocable living trust. The primary benefit of this type of trust is to avoid a hassle for those who may be dealing with my estate after I die. No, I ... Continue reading this article…

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Take the Time to Meet With an Estate Planner

by Luke Landes
Last Will and Testament

After putting this aspect of my finances off for the duration of my entire adult life, I finally found a recommendation for an attorney who focuses on estate planning, and we had our initial meeting earlier today. A few months ago, I had some concerns that my tax accountant, who had done a good job ... Continue reading this article…

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You Can’t Control Everything About Your Money

by Luke Landes
Hurricane

Choices play the biggest factor in success in life, financial success or otherwise. It took me a long time to come to that conclusion, but once I started accepting the facts that I could choose how I spend my time, I could choose how hard I work, and I could choose how to react to ... Continue reading this article…

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What Is Your Biggest Financial Concern Today?

by Luke Landes
Fiscal cliff

I am preparing for a possible media appearance on a program broadcast across the world. I’ve been reading a number of news stories as well as comments from readers in order to get a sense of what Americans are concerned about today. One of the biggest issues seems to be the so-called fiscal cliff. I’ve ... Continue reading this article…

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Someone Will Take Care of Me: Toxic Financial Attitudes

by Luke Landes
Old family

Eleven years ago, I left a job at a small company. My boss, the head of the company, agreed to call the break-up mutual, but I was leaving the organization without any prospects for a new job. I spent the next few months looking for a teaching job that matched my interests and my degree, ... Continue reading this article…

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Albert Einstein’s Philosophies For Growing Wealth

by Luke Landes
Albert Einstein

Although blogs and newspapers alike have oft posthumously placed a familiar quotation pertaining to compound interest — it being the most powerful force in the universe or man’s greatest invention — in the mouth of Albert Einstein, there is no evidence he ever said such a thing. He might have; the sentiment matches what seems ... Continue reading this article…

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I’ll Worry About It Later: Toxic Financial Attitudes

by Luke Landes
Tortoise

At various times throughout my life including the present, I’ve been guilty of having attitudes that could be damaging to my hopes for financial independence. I am generally a laid-back person, and my lack of what can be called “urgency” has certainly damaged my corporate ladder-climbing options. Although I’m fine with that, and I have ... Continue reading this article…

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Stop Paying For Services You Don’t Use

by Luke Landes

Earlier this month, I described a reader’s situation. She discovered she had been paying a fee for a credit life insurance product offered by her bank. The policy was no longer active, but that didn’t stop the bank from taking her money. I took the opportunity to dissect the product itself to discover whether it ... Continue reading this article…

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Sadness Inhibits Progress Towards Financial Freedom

by Luke Landes
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Visiting my family this week and through Thanksgiving, I’ve been helping my mother rearrange old photographs, scan some for our online family tree, and place many into albums that will protect them for the future. One of her favorite observations about me is, “You were such a happy baby.” My personality hasn’t changed much. I ... Continue reading this article…

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5 Fundamental Financial Skills You Can Practice

by Luke Landes
Trumpet

An interesting article in Fortune explored how employees can practice basic career skills like professional musicians and athletes use their non-performance time or non-competitive time to practice. This struck a chord with me due to my background with music. I studied music education in college with the intent of being a high school teacher, and ... Continue reading this article…

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Financial Voyeurism: Sharing Your Finances to Improve Your Life

by Luke Landes
Net worth balance sheet, December 2011

There’s something weird about what I’ve done here at Consumerism Commentary. Although I no longer share all the details on a regular basis, when I started this website in 2003, its purpose was to track my financial progress, to discover and share thoughts about building financial freedom, and to grow my own knowledge about money ... Continue reading this article…

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Joe Biden’s Net Worth vs. Yours: Bad Comparison

by Luke Landes
Joe Biden

Recently, J. Money from Budgets Are Sexy pointed out that you may have a higher net worth than Joe Biden, the Vice President. Biden’s net worth is about $215,000, lower than one might expect for a person in his position, and that’s due to his debt load. I could name a few financial oversharers who ... Continue reading this article…

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