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Get to Work If You Want to Be Rich

This article was written by in Wealth and Affluence. 12 comments.


How much time do you spend in front of the television, socializing with friends, or watching movies? I freely admit that I spend too much time watching television. There are certain television programs that entertain me, and particularly during stressful times in my life, I need some type of outlet that makes me laugh, raising my spirits. As a single man living alone, I don’t have the opportunity right now to unwind at the end of the day by spending time with family.

This is, of course, an excuse or a rationalization of why I don’t just spend more time working. A new study, wherein the researchers’ intent was to reevaluate whether the consumption gap between the wealthy and the poor grew alongside the income gap between 1980 and 2010, also has indicated a correlation between education level and leisure time. The authors of the study then make the connection from education level to wealth, when asked by the Wall Street Journal.

Low-educated men saw their leisure hours grow to 39.1 hours in 2003-2007, from 36.6 hours in 1985. Highly-educated men saw their leisure hours shrink to 33.2 hours from 34.4 hours… Low-educated women saw their leisure time grow to 35.2 hours a week from 35 hours. High-educated women saw their leisure time decrease to 30.3 hours from 32.2 hours. Educated women, in other words, had the largest decline in leisure time of the four groups.

Movie marqueeThe higher a person’s level of education, the less time they spend on leisure activities like watching television, going out to see movies in a theater, socializing with friends, talking on the phone, and playing games. The study authors content that as unemployment has grown at a higher rate for lower-education individuals, that factor has contributed to about half of the change in leisure time for that segment of the sample.

How do we get from a measurement of education to a measurement of wealth? The study authors contend that education is a proxy for wealth, as level of education tends to correspond with income. There are probably some pieces missing in this leap from education to wealth in general, but if nothing else, a higher education opens more opportunities for traditional methods of earning income. (There are always counter-examples, with Ivy League dropouts forming companies that go onto being worth many billions of dollars, but that is exceedingly rare.)

No one is pointing to a causality — that working more and spending less time on leisure activities alone — will result in an increase of income. But if there is a correlation, it makes sense. There is, however, a perception that those at the top of the corporate ladder, earning more money, do not “work harder” than rank-and-file employees. On the job, employees during the grunt work may work just as hard or harder as an executive whose primary function seems to be attending meetings and farming out work to his or her underlings while consolidating reports and presenting reports to the Board of Directors, for example. This study doesn’t look at how hard one works at the workplace, but at how much leisure time is used outside of the office.

There is a message: get to work. Those with higher incomes spend less time on activities outside the office that aren’t productive. Family time is excluded, of course. Highly-educated individuals (who we’re assuming are also earning higher incomes) are more likely to spend time at home cooking and caring for children.

Do rich people work harder? Can less time wasted on leisure activities like watching television translate to higher income?

Photo: angeloangelo
Wall Street Journal, National Bureau of Economic Research

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How to Be a DIYer Without Time or Talent

This article was written by in Frugality. 11 comments.

This is a guest article by Gerri Detweiler. Gerri is the host of Talk Credit Radio and serves as Director of Consumer Education for Credit.com. She is the author or co-author of five books, including Debt Collection Answers: How to Use Debt Collection Laws to Protect Your Rights. Her next DIY project is to (finally!) roast coffee beans.

Mark Frauenfelder makes his own yogurt and sauerkraut. roasts coffee beans, and has raised chickens. He’s also tricked out an expresso machine and built his daughter a guitar out of a lunchbox. And he’s managed to complete all of these DIY projects — and many more — while contributing to the very popular blog BoingBoing, and serving as editor of Make Magazine. Oh, and he’s also written a book about his experiences: Made by Hand: Searching for Meaning in a Throw Away World.

My DIY projects, by contrast, are often utter failures. My homemade sauerkraut probably would have given me food poisoning if I had been dumb enough to taste the foul-smelling concoction, and the popcorn popper I bought on eBay to roast coffee beans has been sitting untouched on a shelf for a couple of years now. Oh, and my homemade yogurt tasted like the cheesecloth I used to strain it.

It would be easy to dislike Frauenfelder, except for the fact that he’s a really nice guy. So instead of getting annoyed every time he writes a post about one of his successful projects, I decided to interview him on my radio show, Talk Credit Radio, in the hopes of gleaning some wisdom that could help me become a more successful DIYer. Following are some his best tips (edited and excerpted) from that interview:

Don’t be afraid to make mistakes

Gerri: Tell me a little bit about what you learned from your DIY journey?

Mark: I think the most important thing I learned was that it’s okay to make mistakes, and that you can learn a lot from mistakes. In fact, a lot of research has shown that people learn fast when they do make errors because it really sticks in your mind.

As Editor-in-Chief of Make Magazine which is a technological project magazine, I hung around a lot of people that I call “alpha makers,” people who are just committed to anything and they do a great job of it. I found that it isn’t so much their skill level that’s important but the fact they have gotten over their fear of screwing up. And that is like the most important thing that I learned, otherwise you’re going to be frozen with fear.

I make tons of mistakes all the time but I hopefully learn from them so that every new box guitar I build is a little bit better than the one before. Then you can raise the bar and challenge yourself to try something a little better. It’s a fun way of looking at the world.

You do have time to for DIY projects

Gerri: Mark, let’s talk a little bit about the time factor. You’ve got two daughters, and a full-time job as a writer and editor. How do you fit in these DIY projects? Wouldn’t it be a lot easier to just go and buy a spoon (rather than carve one yourself)? Or go and buy espresso rather than try to figure out how to trick out your espresso machine?

Mark: Absolutely, it would be easier to go out and buy something and time is really precious, especially when you have small kids and you have to work for a living. And that is one of the reasons I wrote this book. I read all those books about going back to the land and making things yourself, they kind of assumed you lived in this ideal world, you have infinite time to do all this stuff.

So I took a much more realistic approach: What if I gave myself 15 minutes a day to get away from the computer and work on a project? And I think almost anybody can give himself 15 minutes a day. But it really adds up and after a month or so, that’s a considerable amount of hours that you’ve been able to devote making things.

There was a guy I was reading about in the 1700’s whose wife was 10 minutes late at the dinner table every minute so he took those 10 minutes to work on a novel and he ended up writing 3 very successful novels that way by squeezing in those 10 minutes. I think that’s the trick is giving yourself that time and scheduling it in.

Gerri: In your book, you talked about how when you were making your wooden spoons, you discovered that you could actually do that while you were on a conference call, for example, and concentrate better. So maybe there is some synergy between being able to accomplish other things whether to clear your mind, or find the relaxation that you need if you take on some of these projects.

Mark: Absolutely and you’ll see that with knitters. People who knit say that they are able to really have a much more pleasant conversation while they are knitting and I found that also that when I do work conference calls, if I just sit and carve a spoon it puts you in kind of a slow state or something and I’m much less fidgety and I can really concentrate one that conversation. It’s a pretty cool effect.

You can do this anywhere

Gerri: You aren’t living on a ranch in Montana or out of the woods somewhere. You’re living in a Los Angeles suburbs, is that right?

Mark: Yeah, I’m about a six-minute drive from Hollywood and Vine. So I’m right here in the city, basically up in the hills.

Gerri: You’re doing these kinds of projects in a very urban environment. Do your neighbors, do people think you’re crazy?

Mark: They’re amused by the chickens. When I had the chickens, they got out and were running around on the street and one of the people who lives on the block, he was one of the producers of The Waltons and he was, “hey this is just like The Waltons!” And he got hold of a cam and started snapping some pictures – he loved it.

It’s not always about saving money

Gerri: Some of these projects may involve specialized tools, or they may involve specialized materials. What have you found in terms of the financial payoff or the financial cost in your DIY projects?

Mark: That’s a really good question. It’s kind of a yes and no thing. No, it’s not going to save you money compared to something that you would buy. If you were to build your own television set it would cost a lot more money to buy the part than it would to buy the TV off the shelf. It’s usually cheaper to buy in almost every case.

But, if you look at making as a hobby that is really rewarding and a way to spend time, it’s going to be less expensive than going out at night and spending a lot of money at a nightclub or taking an expensive vacation or something like that. As leisure activities go, you can make it pretty inexpensive. If you wanted to become a wood carver, you could buy an improvised wood carver set under a $100 and it would give you a lifetime of enjoyment. In the end I think it’s an inexpensive and rewarding way to spend your time.

Gerri: And some projects like some of the food projects you’ve done, you may have an initial investment, like building the chicken coop or getting the yogurt maker if you decide to go the route. But it sounds like that in the long run, they can end up saving you money.

Mark: Yeah, definitely, one thing that I’ve started doing is roasting my own coffee. And there’s a way that you can do it using an air popcorn popper. There are tutorials online that show you how to do it and the cool thing is that green coffee beans, unroasted beans are a lot cheaper than roasted beans. They’re about $5 a pound that’s comparable to, comparable roasted beans would be about $15 a pound. And green beans will stay fresh for about a year or two so you can keep them by yourself, 10 pounds of beans and then roast a batch whenever you need fresh coffee and you will have the freshest coffee ever and you’ll save money.

Gerri: I really appreciate your book and recommend it. I also love your blog at boingboing.net. Can you give us more places that you recommend that anyone who’s interested in DIY should visit?

Mark: Sure, well I think makezine.com has a lot of really good recent resources that will show you how to make different projects, lots of tutorial videos that can help you get started, information about Maker’s Fair, which is our twice annual fair, that has a 100,000 attendees who come to see this giant-like science and creativity fair. It’s really fun.

And another really good website is instructibles.com and that’s where people upload instructions on things that they’ve made, all sorts of gadgets from beer coolers, built-in wagon to really neat kind of kites, all kinds of projects. I think those two right there will keep you busy for at least a couple of weeks.

Listen to or download the complete interview with Frauenfelder here: download

You can also listen to or download an interview with Consumerism Commentary’s Flexo here: download

Editor’s note: I’ve been a fan of Mark Frauenfelder since I discovered BoingBoing many years ago. He was a guest on the Consumerism Commentary Podcast, as well, in 2009.

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JetBlue Card From American Express Review

This article was written by in Credit. Add a comment.

The JetBlue Card from American Express is offering 10,000 points after your first purchase. Each purchase on the card earns one TrueBlue point per dollar, and some purchases can earn up to eight points per dollar. Is the $40 annual fee worth these and the card’s other benefits?

JetBlue operates major hubs in New York, Boston, Long Beach, Orlando, and Fort Lauderdale. If you live or work in one of these cities, you might even have tried JetBlue as an alternative to a legacy airline. Industry experts credit JetBlue with shaking up their business by blending the service of a traditional airline with the pricing model of an upstart discount carrier. They also installed free DirecTV monitors in every seatback, freeing passengers from the tyranny of boring, in-flight entertainment.

JetBlue’s TrueBlue frequent flyer program resembles the kind of rewards points system used for certain Chase, American Express, and CitiBank credit cards. Instead of earning miles based on your flight distance, you earn six TrueBlue points for every dollar you spend on airfare at JetBlue.com. You’ll earn a bonus point for using your JetBlue Card on the airline’s website, along with the regular point for every dollar you spend with the card.

Converting TrueBlue points into airfare

Earning up to eight points per dollar can lead to free tickets pretty quickly. Scanning JetBlue.com, I found a sample weekend flight from JFK Airport in New York to San Francisco for just under $480, round trip. I’ll need 35,800 TrueBlue points for the same journey, plus just $5 in taxes and fees. If I just used by JetBlue Card for everyday purchases, that’s about a 1.3 percent rebate, in line with the most popular cash back credit cards.

However, if I’ve been using my JetBlue Card almost exclusively for airfares, I’ll only need to spend $4,475 on JetBlue.com if I want a free coast-to-cost trip. That’s a 10.7 percent rebate, which blows nearly every rewards credit card out of the water, including American Express’s own Blue Sky series. Of course, reward values can vary based on market demand. However, JetBlue promises reward round trips for as few as 10,000 points, making this one of the fastest ways to earn free travel.

Getting more from the JetBlue Card

As with any airline credit card, you’ll only get the most value from the JetBlue Card if you’re willing to make most of your trips on a single carrier. That’s not a hard commitment to keep if you live near one of JetBlue’s hubs. Yet, this American Express credit card carries additional benefits that can make it a valuable addition to your wallet, even if you’re just planning to save your TrueBlue points for occasional leisure travel.

Like other American Express cards, the JetBlue Card comes with purchase protection that will reimburse you for lost, damaged, or stolen merchandise that you replace within 90 days of your original transaction. The JetBlue Card also extends the warranty of most consumer goods for up to a year after the expiration of the manufacturer’s warranty. You’ll even get roadside assistance included with your card, saving you money if you replace similar, paid coverage from another provider.

Seasoned road warriors may notice a few perks lacking from the JetBlue Card. The airline doesn’t operate traditional airport lounges, so you won’t get that popular perk that comes with some Delta or American Airlines cards. On the other hand, JetBlue lets you check your first bag for free, a privilege that many traditional airlines now save for their elite customers or cardholders. With a moderate annual fee and a middle of the road APR, you’ll want to ring up and pay down big balances every month to really make this card pay for itself.

To take advantage of the 10,000 points offer, apply for the JetBlue Card from American Express today. You will need excellent credit in order to be approved, and be aware of the $40 annual fee.

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Get Rich By Thinking About Being Rich

This article was written by in Wealth and Affluence. 16 comments.

In her new book, Delusions of Gender: How Our Minds, Society, and Neurosexism Create Difference, the author, Cordelia Fine cites studies that show how our lives are affected directly by the labels we give ourselves. I’m not interested in the strictly gender-related aspects of this discussion, at least not for Consumerism Commentary, but I am interested in the study that was related to an audience via NPR.

People in the study were asked to imagine the life of a certain vocation. Those running the study separated the subjects into one group asked to visualize the life of a physics professor, while the other group considered what it would be like to be a cheerleader. Then, the study required the subjects to imagine themselves in those roles. Those in the first group were more likely to consider themselves clever while the others were more likely to consider themselves gorgeous.

That result provides some insight into how visualization can change the perception of ourselves, but that’s not quite startling. The interesting part is what follows:

The exercise had actual effects on how people performed on tests. Those who had identified with the professor performed better on tests of analytic intelligence than those who had identified with the cheerleader!

Not only were those in the physics professor group more likely to consider themselves clever, they were tested and proven to be more clever — as a result, the researchers concluded, of the visualization technique.

I haven’t read the book, and I haven’t analyzed the study. From what I’ve seen of criticisms, the sample may have been too small to conclude anything significant about the effect of this type of visualization in psychology and neurobiology. I believe visualization is important, but it is not alone going to change one’s life, unlike some pop psychology advice. You cannot manifest a change in your life, like being smarter, more attractive, or wealthier, just by imagining what life would be like for someone who is smarter, more attractive of wealthier. The Law of Attraction is an idea that changes in one’s life can manifest just by focusing thoughts on a particular issue.

I can’t manifest a steak dinner just by thinking about a steak dinner, and chances are you can’t, either. Focusing thoughts on something is necessary to make a change in your life, but it’s only the starting point. I improved my finances and moves from a negative net worth to a positive net worth just about a decade ago, and this wouldn’t have been possible until I stopped to think about my situation. My life didn’t magically change; I had to make conscious decisions — and I was not used to making conscious decision in most areas of my life — and take direct actions to improve my money management skills.

Visualization is not a fruitless exercise. If you’re a fan of his investing style, consider Warren Buffett. Get to know him. Think about what his life might be like, from the moment he rises until he falls asleep each night. Consider what he might think about on a daily basis. Now imagine you are Warren Buffett, not just by imagining having the same sources of stress and frustration, work and leisure, but by being him inside and out.

If Buffett doesn’t work for you, maybe Bill Gates is your man — or Steve Jobs. Maybe your goal is entrepreneurial. Maybe you’d rather have a woman as a role model. Choose the individual whose success you most relate to, and let their thoughts, feelings, and concerns — or what you imagine them to be — occupy your body and mind for a while.

This may be where some pop psychology ends — just the visualization is enough to lead to success. I think there must be more. This is just the first step. Now, with frequent visualization reminders, make the decisions your role models would make. Ask yourself, “What would Gates do?” and follow that path. You may not be right all the time. Your role model might make a different choice than the one you’d expect, so the more you know about your role model, the more accurate your decision-making will be. Decision-making is an active process, and participation is mandatory. Although I didn’t realize this until I was in my late twenties, and some aspects of my life I still leave to chance despite knowing better, the more I play an active role in my life, the better it is.

By focusing on what your role model would do and taking this approach to decision-making every day, it will become second nature. You won’t have to think about what Buffett would do when deciding to invest in a company because your process will automatically identify the more Buffett-favored option (assuming your understanding of Buffett is accurate enough). By making the choices as if you were someone more successful from you, the choices will eventually result in your success. This isn’t pop psychology, it’s simply understanding how your role models make decisions and learning from them. Visualization is just the first step.

There’s a wrong way to do this, though. Consider the choice of spending $80,000 on a new BMW or $18,000 on a new Honda Civic. What would Buffett do? Well, if he drives rather than outsources his transportation to a driver, he might buy the BMW. $80,000 might be a drop in the bucket to him, considering his total wealth. But what would Buffett do if he had your net worth? Well, if your net worth dictates the Civic is the better choice for future financial stability, he would choose the Civic.

Be relating — or conflating — yourself to your financial heroes, you find yourself making better decisions about money. A series of better financial decisions results in increases of net worth beyond what you might experience if you continue living your life without considering the differences in decision-making between yourself and those whose success you admire.

NPR

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Degrees With Low Salaries: How to Beat the Odds

by Flexo

Eleven years ago or so I began my career with my bachelor’s degree in hand. Once I stabilized a little, I had a job with one of the top organizations in the world. It was a non-profit organization, and despite its prestige, it was a non-profit organization with staffing nightmares and horrific cash flow. My ... Continue reading this article…

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How to Intelligently and Responsibly Buy a Car

by Flexo

Car companies want you to buy their products on impulse. They would, generally, prefer that the step of thinking is removed from the consumer’s process. This is evident in the commercials you see around the holidays in which a spouse is surprised when he or she notices a gift wrapped in a large red bow ... Continue reading this article…

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What is the Middle Class?

by Flexo

“Middle class” is a term that has a hundred different meanings if you ask a hundred people for their definition. Unlike my frustrations with people who call a house a liability, or more accurately, those who claim a house is not an asset, the label of middle class leaves a lot to personal interpretation. While ... Continue reading this article…

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How Will You File Your Taxes?

by Flexo

I’ve started receiving W2s, 1099s, and a variety of other tax-related documentation in the mail and online, which means one thing: It is time to get serious about determining my final tax liability. If I planned right, I will have paid just enough between estimated taxes and withholding to avoid an underpayment penalty, but it’s ... Continue reading this article…

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