Gourmet Magazine just featured an article called “Extreme Frugality” about how a family of 6 will live on $550 a month after major expenses (or $41k a year). I hope some of that frugality includes at least a little investing for retirement…but this should be a great read. You know it’s mainstream when this high end magazine touts the virtue of saving money…and they will probably make it look pretty too. Of course $41k a year is not terrible, it could be worse…
Here are some quotes from the article, which can hopefully inspire Utahns to save or spend less than we earn.
I felt entitled to live as did my father (although he was 25 years older than I) and all those successful, happy people in ads and on TV…Like 70 percent of our fellow Americans, we were living off our VISA cards with no means of paying them off any time soon. As a result, we had $75,000 in credit-card debt and owed $245,000 on a $289,000 house. What had I been thinking?
Ninety percent of us buy something we don’t need every month, and Americans in all walks of life—except the very rich—carry $961 billion of credit-card debt at any given moment, paying $1.22 for every $1 they spend. For the first time ever, my family is going to do the unthinkable. We’re going to live within our means.
Written by admin on April 2nd, 2009 with no comments.
Read more articles on Uncategorized.
“I never would have thought, in my most extreme paranoid fantasies, that my software, and the others like it, would have enabled Wall Street to decimate the investments of everyone in my family.”
Michael Osinski’s piece in New York Magazine: “How I helped build the bomb that blew up Wall Street” is a chilling read. He wrote the software that turned mortgages into bonds – and he feels bad about doing it.
First, it’s rare to hear anyone take any responsibility for the mess we’re in. Second, it’s tough to really understand the long-term affects of decisions that seem entirely rational. His writing is so compelling and the small pieces of truth are astounding. You’ve got to read this article.
Our finances and the world we live in is more complex and demanding. As this quote points out it can lull us into not thinking ahead:
“The aim of software is, in a sense, to create an alternative reality. The power we all hold in our hands is shocking, yet it’s controlled by a few swipes of a finger. The drive to simplify the user’s contact with the machine has an inherent side effect of disguising the complexity of a given task. Over time, the users of any software are inured to the intricate nature of what they are doing. Also, as the software does more of the “thinking,” the user does less.”
He goes on to say:
“Nature does not give you explicit warning messages; her ways are more subtle and take a lifetime to penetrate. I forgot the day of the week but knew instinctively the tide and the phase of the moon.”
“It hurts when people say I caused this mess. I was and am quite proud of the work I did. My software was a delicate, intricate web of logic. They don’t understand, I tell myself. Perhaps it was too complicated. But we live in a world largely of our own device. How to adjust and control these complexities, without stifling innovation, is the problem.”
I read this and thought of how people doing simple jobs can cause incredible destruction. Hitler’s regime worked that way. Yet he could kill people and it’s easy to see the evil intent in his work. But what about the things we do unknowingly that hurt people, not suddenly, but over time? Even unintentionally. Can you imagine what a very smart person like Osinski could do to mess up the world if they were actually trying to? We may not be able to understand or discover, much less stop it from happening.
The thought is chilling.
Written by admin on April 1st, 2009 with no comments.
Read more articles on Uncategorized.