As featured in The Wall Street Journal, Money Magazine, and more!

Search: comedy

In the fourth season of Arrested Development, the audience discovers the troubled Bluth family received a government stimulus bailout during the recession. Rather than using the “stimmy” to fix their troubling real estate family business operation, they used the money to buy 4,000 acres of worthless land in — well, I won’t spoil it.

There’s just something about money landing in one’s lap that inspires cloudy thinking and poor decision-making. The cause-and-effect relationship between windfalls and mistakes with money exists beyond fictional television comedy, too.

People love reading and hearing stories about how the suddenly-wealthy often find themselves in financial trouble. If the story of a wealthy family that lost everything isn’t appealing, there’s always the story of poor families that are provided with an unusual opportunity who later squander their fortune. The most common is the prototypical lottery winner with no money-handling experience living on the street just a few years after taking winnings as a lump sum.

It would be easy to judge these poor folks. “If only they a better financial education or a more positive experience managing money in the first place,” one might say, “they’d be better prepared for dealing with a windfall.” It’s a universal problem, too, affecting people who normally wouldn’t be playing the lottery. Smart business leaders are just as likely to make mistakes. A recent story about the founder of a major technology business provides more anecdotal evidence for this type of occurrence.

CNET featured a story about Harvey Minor, the founder of CNET and an investor in other tech-related companies. He sold CNET for a consideration of $1.8 billion. This is a guy who ran a major business; he should be fairly savvy about making financial decisions. Maybe it was his confidence that ruined him; several years later after the windfall, he’s declaring bankruptcy.

Declaring bankruptcy isn’t always such a bad thing from a business perspective. If the drawbacks like trashing your credit aren’t important, it’s an effective way to getting out of paying many of your debts. The stigma for bankruptcy is still well-deserved, and in this case, Harvey Minor even released a public statement when filing his bankruptcy, lamenting his mistakes.

He reaches inside himself to sum up his failures due investing beyond his areas of knowledge of expertise:

I have thought a lot about this and the reality is the seeds of my every failure can be found in my every success, and the seeds of my every success can be found in my every failure.

Some time during your life, there’s a chance you might receive some kind of a windfall. It may not be Harvey Minor’s $1.8 billion, but it may be enough to make some kind of difference in your life. Windfalls can be large and change your long-term goals, or they can be just enough to help propel you forward a short distance. There are a few things you should keep in mind to help you keep from ending in a worse position than where you were before the windfall, be it large or small.

The problem with tips like these is that they sound good from a planning perspective, but when you actually experience a windfall, they can be very difficult to follow. It’s easy to get caught up in the emotions, pressure from peers can influence your decisions, and slippery slopes allow full failure to sneak up on you.

1. Take care of your obligations.

If you’re in a good financial position, an unexpected windfall gives you the chance to have some fun and take part in experiences for which you might not have had the opportunity otherwise. The key is taking care of your obligations first. The first is going to be your taxes. The second is your debts.

Do you ever wonder why celebrities and other famous people seem to have problems with back taxes? Now, it might be simpler to assume that these people aren’t very savvy about managing their finances. But in some cases, some seem to employ their tax troubles as a strategy: underpay taxes this year, using the extra money to invest, argue with the IRS when they audit, and pay later from profits of the investment, covering even interest and penalties.

There is no way I would ever recommend such a strategy; I just think that some of those often in the news for their tax problems are working with financial advisers who know how to work the IRS, savvier than the rest of the public.

Debt is the second part of the obligation. Use some of the windfall to pay off your debt so it’s one less thing to worry about.

2. Stay out of the spotlight.

When you win the lottery, there may be a provision that you must speak with the media. Most windfalls don’t come through lotteries, though. Keep a low profile. There’s no need for people outside your closest social circle and your closest family members to know about your good fortune. When I began receiving what I would consider a windfall, although I was proud of the achievements that led up to that financial success, I rarely discussed the details, and only opened up to people who were close to me.

I had seen that when knowledge grows beyond a close set of individuals, or when people actively market their success, the unwanted attention could be damaging. Also, if you create a public image surrounding your financial success, you could be adding pressure on yourself to maintain that image, whether that means associating with different people or continuing to find similar success.

3. Stick with what you know.

Halsey Minor blames some of his financial failure on his desire to invest outside of his expertise. Generally, moving outside of a comfort zone is a good idea. It forces you to learn new skills, to be adaptive, and to work hard to succeed. A windfall can also create a cash cushion that allows you to take on new risks.

Overall, this is not a bad thing. The adaptation is the most important part. You have to be analytical, being very clear to yourself about what your limits are. If something is not working and you approach those limits, adjust and change direction. Despite all the proven dangers, one thing people immediately turn to when they receive a windfall is real estate investing. When people have money to spare, it just seems like a good idea. But if you don’t know a lot about real estate — if you weren’t a successful real estate investor before receiving the windfall — you’re just asking for trouble.

There are thousands of “advisers” who would be willing to take your money and invest it for you. Brokers of all sorts are more than pleased when presented with a whale, fresh off the boat. (How’s that for a mixed metaphor?)

4. Make a plan.

After taxes, put together a plan. Whether the windfall arrives in one shot or whether you’re suddenly found yourself with an ongoing income stream, planning helps you take some emotion out of the situation. Life is emotion, psychology is the only thing that goes into actual human behavior, so eliminating emotions is impossible. But you can learn to recognize the effect of your emotions on your decision-making and adjust. Planning is a big part of that.

If you want a rule of thumb, use this. After paying for your taxes and other immediate obligations like debt, use these proportions for your windfall. Half of your windfall should be directed towards the future, and half should be used in the present (or within the next few years). This will allow you to enjoy the fruits of your success while still planning for the future.

This is just a guideline. If, for example, you don’t believe you have that much of a future and have no need for leaving a legacy, you can adjust the weighting in favor of short-term use. You might as well use what you can while you can.

So where does this leave investing? It’s not much different — some investments are made for the long-term, some are made for the shorter term. If you have an opportunity to invest in something exciting and potentially profitable that will pay off in the next few years, use some of the short-term portion of your windfall. If you’re investing to prepare for retirement more than a decade down the road, use your long-term portion.

5. Track your finances.

The same rule that people who are just beginning to organize their finances is the same rule that pays off with a windfall. It can be so easy for your financial success to leak when you’re dealing with more money than you’re used to. And the beauty of a windfall is that some of those leaks can be allowed. A credit card late fee of $35 means something different to someone with a negative net worth than it means to someone with a large bank account or an income of $500,000 a year.

But it’s still an unnecessary $35 to pay. One might not hurt. Twelve in a row might not even affect your day-to-day living. But when late fees set the stage for a philosophy where leaks are allowed, you can find yourself depleting your money supply unnecessarily, and without tracking your finances, you’ll have no idea it’s happening until it’s too late — when you can no longer afford your mortgage payments from savings and bankruptcy looms.

Have you ever received a windfall? What tips work for you? What advice do you have for holding onto your windfalls, unlike the Bluth family?


To all those who celebrate, have a successful Festivus. I’ve come to be a fan of this secular “holiday,” celebrated every year on December 23 following its mass introduction to the public through an episode of Seinfeld. At its core is a non-commercial, non-religious approach to the season. While I do enjoy gift exchanges with friends and family and everything else that goes along with the holiday season, the traditions of Festivus are interesting and applicable to everyone.

Before Seinfeld, Festivus was but one family’s tradition. This family produced a comedy writer, Daniel O’Keefe — how could it not? — who incorporated some of the aspects of the holiday into the television show in 1997. The episode aired thirty years after the first familial Festivus celebration. The primary symbol of the holiday is the aluminum Festivus pole with a “very high strength-to-weight ratio.” Two primary holiday practices have entered the public from the holiday: the airing of grievances and the feats of strength.

The airing of grievances

Festivus poleIn dealing with personal finances, everyone can relate to these traditions. In today’s modern world, any individual who pays attention to his or her own financial situation can have grievances to air. In the typical manner of Festivus, celebrants air grievances against each other. For our purposes, it will be more constructive or cathartic to air grievances against the companies that charged us extra fees, salespeople who stretched the truth or lied to encourage us to buy something, and reflect on the mistakes we made with money throughout the past year.

Here’s my grievance from a recent encounter. I purchased a used camera from a local shop a few weeks ago. I like buying from local shops rather than from the internet in some cases, because if local shops aren’t supported, they’ll eventually disappear. I found a great deal and wanted to take advantage of it. One of my concerns with used cameras is the shutter actuation count; if a camera has been used too much, as it might be if it were used by a professional, the shutter mechanism wears down and will eventually need to be replaced, if the value of the camera warrants part replacement rather than full replacement.

I was mostly sure that this model would not indicate the true shutter count unless brought into a Canon shop, but the store owner convinced me the shutter count was readable, just like the older models. The information he pulled up on the camera showed a very low shutter count; a count I thought would be too low considering the wear on the camera’s grip. I took his word as the expert, and after trying out the camera in the store, bought it for the great price we negotiated. I probably should have waited to research the model at home to confirm my belief — that the shutter actuation count was not readable by the user. I will eventually take the camera to the Canon service center near my house to determine the true shutter count. Even if the number is high, I still got a great deal. Even if I end up paying to replace the shutter, the total I will have paid is still less than I figured I’d be paying for the camera.

I don’t think the owner was intentionally lying to me in order to make the sale, as his opinion is probably a common misconception about this camera model. I should have taken my time, though, and I should go back and let him know what the true shutter count is when I am able to retrieve that information.

What are your grievances? Here are some examples to get you started:

  • Unexpected bank fees
  • Hassles when returning purchased items to a store
  • Confrontations with your boss
  • Tenants who don’t pay their rent on time

The feats of strength

In Seinfeld, Festivus celebrants displayed feats of strength by challenging each other to a wrestling match. Rather than physical strength, I think it’s fair for Consumerism Commentary readers to focus on financial strength. While I review my finances and look for positive trends at the end of every month, this isn’t enough for the holiday. Most successes that I’ve seen so far are ordinary financial feats of strength. A brave decision with money is a the type of strength that would be appropriate to celebrate for Festivus.

This year, my biggest financial feat of strength might be obvious. It is my decision to leave my day-job salary and benefits behind and pursue with greater vigor what I had already been doing. Consumerism Commentary is now the bulk of what financially sustains me, and without the relative security of a pay check, that was a difficult decision to make. In fact, it took several years for me to have enough faith in the long-term sustainability of this income to be willing to make the leap.

For your feats of strength, here are some examples to get you thinking:

  • A promotion at work
  • Finding a treasure of coins in the couch you bought used
  • Getting out of debt

Air your grievances and share your feats of strength from the past year. The comments on this article are open for anyone who has a grievance or feat of strength. Which banks gave you problems? Did you make any mistakes with your investments? What were your successes and strengths in 2011?

Editor’s note: This article ran originally last year, but I’m bringing it back for 2011.

Photo: M. Keefe


Consumers in the United States spent more money online in one day, this past Monday, than they spent in any other one day in history. Online browsing and shopping resulted in $1.25 billion in sales on Cyber Monday, up 22 percent from the previous one-day record, last year’s Cyber Monday. The $1.25 billion in sales on Cyber Monday reflects the fact that more people shopped online than last year, up 11 percent, and the average shopper spent more money than last Cyber Monday, an increase of 9 percent.

When Cyber Monday was invented in 2005 by, the National Retail Foundation’s e-commerce division, it was based on the theory that more people had broadband internet access in their workplaces and would wait until sitting at their desks in their offices before shopping online after the holiday weekend.

Cyberman - Cyber MondayAt the time, Cyber Monday was not an event and there was no indication that the Monday following Thanksgiving was anything special in terms of online shopping activity. Retailers, however, bought into the idea and started creating marketing campaigns that encouraged people to shop on Monday.

Consumers simply followed the deals and succumbed to the hype surrounding yet another day dedicated to shopping, created by the organization that represents retailers, who obviously stand to benefit from more consumer shopping. More consumers neglected their work in the office this year to spend time browsing and shopping online than any Cyber Monday in the past, with more than half of all shoppers spending money from work.

Cyber Monday was not even the biggest day for online shopping until last year. This new holiday is an interesting story about how you can make anything you want real with enough marketing.

I’m just starting to organize my holiday shopping list. I’ve purchased a few items already but didn’t make any extra effort to shop on Monday. How much did you spend on this year’s Cyber Monday?

Photo: comedy_nose


You’ll never reach the top level in Abraham Maslow’s hierarchy of needs, self-actualization, if you concern yourself with your possessions. If you focus on acquiring gadgets, showering your children with toys, or achieving other materialistic pursuits, if you do so while neglecting the pursuit of including satisfying experiences in your life, you can never reach your full potential.

Even thinking about experiences beyond base needs is a luxury when abiding by Maslow’s theory, because pursuing fulfilling experiences requires discretionary income or available cash. Anyone who hasn’t been able to meet the lower-level requirements in the hierarchy may need to devote all resources to health and safety. For those of us in the developed world who have benefited from a society that allows successful people to do as they choose with their financial surplus, we often face questions about how to spend that money with an eye towards increasing happiness.

Wrapped GiftAs I’ve found myself in a more comfortable financial situation over the last decade — and that comfort comes from an increased income and an ability to save for the future without sacrificing too much of my present — I’ve begun trying to find more ways to use surplus income (after meeting savings goals) to enjoy my life today. Financial writers often get caught up with the idea that people need to save as much money as possible for the future, but once there is some comfort with planning, there has to be an opportunity to enjoy life today.

Once my finances were on a solid path, I decided I was comfortable increasing today’s expenses. The gateway for me was most likely moving into a new apartment. If my only income came from my day job, I might not have been able to comfortably move from a small apartment to a nicer, larger apartment without making sacrifices somewhere else. By moving into the newer apartment, I recognized that my income stream outside of my day job would be fairly steady, and that I had an emergency fund for back-up in the event of a disaster. I also accumulated things. With my day job, I was able to afford cable again, but with extra income, I was able to justify high-definition service and a new, high-definition television.

I was able to afford to buy cameras, lenses, and other photography equipment (several of which I still purchased used to save money), and to explore this hobby further. This gets into the topic at hand: experiences vs. things. While photography equipment consists of things, they are items that allow me to explore a hobby — or possibly a future business — and create experiences for myself. I attended classes at the local arts council to further develop my skills.

A study from 2003 building on prior research about materialism explains that using money to acquire experiences increases long-term happiness than using money to acquire objects. Here are some of the results:

As anticipated, respondents asked to evaluate an experiential purchase indicated that it made them happier than did those asked to evaluate a material purchase. Respondents also indicated that experiential purchases were better financial investments than material purchases. Participants indicated that, compared with material purchases, experiential purchases made them happier, contributed more to their happiness in life, and represented money better spent. Respondents were also less inclined to say that the money spent on experiences could have been better spent elsewhere than the money spent on material possessions.

Abraham Maslow's Hierarchy of NeedsThe authors of the 2003 study also offer suggestions for the causes of these results. Why do experiential purchases result in happiness more than material purchases?

  • Experiences are more open to positive reinterpretation. As time passes, view of history becomes rosier.
  • Experiences are more central to one’s identity. We are the sum of our experiences; people rarely identify with the items they’ve collected around their house as much as they identify with experiences like travel, operating their own business, and spending time with family.
  • Experiences have greater social value. People like sharing and talking about their experiences, and this type of discussion fosters better relationships than talking about possessions.

A follow-up study in 2010 goes further to explain why experiences are more satisfying. This study found that it was easy to compare a purchased item, such as a high-definition television, with other similar items at the time of purchase and looking back. When comparing experiences, such as a family trip to Disney World, it’s much more difficult to make effective comparisons. Also, consumers are more likely to try to get the best deal when shopping for items with a strong field of comparable items but are more likely to satisfice when deciding to purchase an experience. Among other reasons, the researchers also determined that consumers are more likely to compare their material purchases with others’ purchases while have a difficult time doing the same for experiential purchases.

You may be looking forward to the holidays, wondering what type of gifts would make your family and friends happiest. You can always play to the utilitarian point of view by purchasing gifts that the recipient might need, but to have the greatest impact, consider finding a way to offer an experience that everyone would enjoy. The benefits might not be immediate, but an experience could create memories that outshine this year’s hot Christmas toy or latest Apple product for years to come.

Some experiential holiday gifts come to mind.

  • A weekend getaway. Spend the weekend in a nearby city to save on transportation costs, and explore the town. This is something I did this past weekend in Philadelphia. It wasn’t a gift, but I am sure my girlfriend and I are going to remember our scary experience at the Eastern State Penitentiary for the rest of our lives.
  • Dinner and a Broadway show. Good food and entertainment combine to make lasting memories that enhance happiness. For those who attend Broadway shows more than once a year, find a way to make it more memorable, perhaps with a backstage tour, VIP seating, or meeting the cast.
  • Long-distance travel. It’s often less expensive to travel outside of the country than to travel across. Within the United States, there are almost endless opportunities for unique travel experiences as well. I will always remember the time I spent exploring Death Valley with my family.
  • An exciting activity. My girlfriend seems interested in skydiving and hot-air-ballooning. I’m not a big fan of either of these activities because I would like to live for a long time, but I know these are activities that would make her happy if she were to live to tell me about them.

Consider leaving behind the material this holiday season and increasing someone’s long-term happiness by engaging in an activity or experience the memory of which will last a lifetime and become more favorable as time passes.

Photo: comedynose
Journal of Personality and Social Psychology 2003 [pdf] and 2010 [pdf]


Meet Bryan, Host of the Consumerism Commentary Podcast

by Luke Landes

Those listening to the Consumerism Commentary Podcast may have noticed that our latest episode, featuring guest David Bach, was hosted by a new voice. Our long-time producer, Tom Dziubek, is currently taking a hiatus from the show to explore a great job opportunity, and we wish him the best of luck. We’re happy to have ... Continue reading this article…

6 comments Read the full article →

Should There Be a Limit on Copyrights?

by Smithee

I have a poll that I’m hoping you’ll take part in. Current U.S. law says that copyrights on most creative works (songs, movies, books, etc.) are valid until 70 years after the author’s death. It used to be 50 years, but when the 50 year mark was approaching, it was extended another 20. There’s no ... Continue reading this article…

10 comments Read the full article →

YouTube Leanback: Another Option for Free TV

by Smithee

This week YouTube released a beta of an interface called Leanback, open for anyone to try right now. It starts out full-screen and immediately starts playing videos it thinks would interest you based on your YouTube contacts’ activities like rating and choosing favorites. I presume it will also, if it doesn’t already, suggest videos based ... Continue reading this article…

0 comments Read the full article →

Smithee Debt Update, Mid-April 2010

by Smithee

Happy Friday. It’s been just about a month since my last debt update, and I’m feeling relatively successful at it. I’m still on track to get rid of it by July, having eradicated $1,267.39 in the last four weeks. Aside from the satisfaction of persistence, there’s actual good news: as of yesterday, my employer has ... Continue reading this article…

8 comments Read the full article →
Page 1 of 3123