Monday, May 31, 2010

Heresy! Stephen Fry Says: Don't Set Goals. Cool!

Discovered today at Open Culture, which offers all manner of free courses, lessons, audio books and so on, this video. "What I Wish I Had Known When I Was 18."

The British actor and writer Stephen Fry, now in his 50s, reflects on what he would tell his 18 year old self about life. Spoiler alert! He concludes that kindness will get you farther than talent or power.

He also says, "One of the worst things you can do in life is set yourself goals."

It occurred to me while watching that this is the equivalent of heresy in U.S. culture. Americans, as a group, have a more consistent belief in the importance of goals than we have in God. Even our atheists and agnostics share a faith in the importance of goal-setting, being ambitious and working towards something. (This could have something to do with our Calvinist history, but I'll leave the real historians and sociologists to speculate on that.) No one ever achieved anything (and achieving is what it's about, of course) without clearly defined goals.

Here's what Fry has to say: "Goal orientation is absolutely disastrous in life. Two things happen. One is that you fail to meet your goals so you call yourself a failure. Secondly you meet your goal and go, 'Well, I'm here now what.'... Because you're going for something outside yourself."

The whole interview (speech?) struck a chord that resonated well with what I was trying to articulate in Broke is Beautiful about working in flow, and valuing relationships and social capital over financial capital.

STEPHEN FRY: WHAT I WISH I'D KNOWN WHEN I WAS 18 from Peter Samuelson on Vimeo.

Thought For Memorial Day

“We are the responsible members of the community. We are the men who determine policies, enact legislation, issue orders. We are the ones who have commanded these young men to go forth and die for us and for our children. We are not going to do the dying ourselves… We have not asked others to die for us without good reason. But we have asked it all the same! And who among us can see another march away in his place and on his behalf to meet privations, sufferings, dangers, and perhaps death, without finding himself face to face with the fateful question, Am I worth dying for?”
-John Haynes Holmes (1879-1964), U.S. Unitarian minister and social activist

Saturday, May 29, 2010

What You Can Unleash

Fantastic quote from Harriet Rubin in an article in the Harvard Business Review. (Of course I read the Harvard Business Review. Don't all broke people?)

"Freedom is actually a bigger game than power. Power is about what you can control. Freedom is about what you can unleash."

Read all about why Freedom is a Bigger Game Than Power.

Friday, May 28, 2010

Have You Read Broke is Beautiful?

Broke is Beautiful is in many ways a genre defying book that is not easy to sum up. That's why I need your help. If you've read the book, I hope you will take a few minutes and share your review on your blog, an online book review site, or the online book sellers like Amazon and Barnes and Noble. It will help other potential readers to know just what this animal is. Thanks a lot, and hope you liked it.

Thursday, May 27, 2010

"A Target Audience of Broke People"

I just finished an interview with Daniel Stief on Sedona Talk Radio. It is archived on line if you follow the link. Topics include the irony of marketing the idea of being broke, getting out of the consumer mindset, applying a "starving artist" mentality to other fields, the connection between honesty and community and values other than money.

Wednesday, May 26, 2010

Nervous Breakdowns at the Bank and their Benefits

You ever had one of those moments when you felt like it was all you could do to keep from strangling the bureaucratic clerk saying, "I can't remove the overdraft fee, it says so on my screen"?

Don't feel so bad. According to Mental Floss, the actress Charlize Theron owes her career to just such an unseemly outburst:

Charlize was trying to cash a check from her mother, who was in South Africa, but the L.A. bank refused to honor the international check. Charlize pitched a fit of epic proportions, really letting the bank teller have it. As luck would have it, an agent was in line behind her and was impressed by her passionate “performance.” Although she later fired him because he kept sending her scripts for films like Showgirls, it was the break she needed.

From the article How 10 Celebrities Were Discovered.

Fast Fashion: The Free Market of Ideas in the Fashion World

Tuesday, May 25, 2010

Handy Money-Saving Tip: Stop Bargain Hunting

"A bargain is something you can't use at a price you can't resist."-Franklin P. Jones*

In the past year or so magazines, newspapers and television programs have been full of features about how you can save money “in these difficult economic times.” (My retirement plan is to copyright the phrase “in these difficult economic times” and collect a royalty anytime a news announcer says it.)

Invariably these features tell you where to shop for the best prices. Rarely do they advise you not to shop. Not shopping, it turns out, is the only thing that is 100% guaranteed to save you money.

So if you want to really save money, here is my advice: stop bargain hunting. Don’t scour the coupon inserts, don’t “friend” your favorite brand to get a special discount feed, don’t rush to the store on double coupon day. All of these activities are simply giving you new ideas of things you could buy by exposing you to constant marketing messages and shiny new products. That’s what they’re designed to do.

You, of course, are too smart to be fooled and will only buy things you’d be buying anyway, right? Just like you never carry a balance on your credit card. Good for you!

But just on the off chance that you are not smarter than the rest of us, you’re probably better off keeping your hunter gatherer instincts in check by not exposing yourself to the hum of a constant shopping mantra. Let’s face it, the credit card companies would not be in business if we all did what we intended to do with their cards when we got them.

A number of studies have shown that we are prone to idealize the future. We are time, energy and money optimists. For some reason we all think we’ll be richer and less busy tomorrow than we are today.

We picture our work and the income from it as if nothing else will come up in our lives. We forget we’ll still have to fix the car, that there will be weddings and funerals and holidays (somehow those manage to surprise us every year, don’t they?) and your spouse or partner will still want attention. All that carefully budgeted time and money goes out the window when confronted with the shocking reality of every day life.

Since I wrote Broke is Beautiful, personal finance reporters have started to ask me for my money-saving tips. "How do you avoid impulse spending?" My flip answer is, “You max out your credit cards.” It’s a sure way to curb impulse spending. Although I say it with my tongue firmly in cheek, it is not entirely a joke.

When you have no access to funds, you simply cannot shop. After a while, you stop listening to commercial messages. They are for someone else-- those strange beings out there with money. It's a similar feeling to turning the radio dial and landing on a Spanish language radio station. “I can hear it, but it's not for me.”

The real trick is to get to this point before you max out your cards. Tell yourself “I don’t need new consumer goods right now, thank you very much. I have a thing right here in my house I can use.” (As all the news features about “decluttering” your home would suggest, most of us have more useable stuff than we know what to do with, yet we go shopping anyway.)

Stop categorizing yourself as a “consumer.” Imagine that there is a nation out there called Consumerica. The residents of this land are called “Consumers” and they communicate through commercials and branding messages. You don’t speak that language. Saving the entire price on an item is a bigger bargain than 50c off any day.

*Thank you to "Ultimate Cheapskate" Jeff Yeager for sharing this quote on Twitter (@JeffYeager)

Video of the Day: Collaborative Consumption

Collaborative Consumption Groundswell Video from rachel botsman on Vimeo.

Monday, May 24, 2010

Video of the Day: Growth Busters

Hooked on Growth: Our Misguided Quest for Prosperity from Dave Gardner on Vimeo.

The Lost Finale and Social Capital

USA Today's review of the Lost Finale sums up its theme this way:

"It wanted to tell us something about ourselves: Individual improvement and redemption are vital, yet not enough. We are not in this alone."

Time Magazine's review says: "Lost is a story about community, connections and interdependence. You live together, it told us, or you die alone. And when you live together--when you share of yourself and make meaning with others--you never die alone..."

Could the idea of the importance of community and relationships, instead of the tale of the rugged hero who goes it alone be a new cultural trend? Broke and Beautiful Losties, discuss.

Sunday, May 23, 2010

The Good Life

Saturday, May 22, 2010

Laura Lee on Afterthoughts with S. Denise Newton

Listen to this program by following the link. (I had an embedded player here, but I couldn't figure any way to set it so it didn't automatically start playing when the page loaded, and I found that annoying.)

Friday, May 21, 2010

Thursday, May 20, 2010

A Supercalifragilisticexpialidocious Allegory

Is Mary Poppins a giant metaphor for the "ongoing struggles of institutional Christianity to adequately respond to the triumph of secular humanism?" Vincent F. Rocchioa, the author of an article in the journal Culture and Religion believes so, as The Percolator from the Chronicle of Higher Education notes.

The evidence for this reading of Supercalifragilisticexpialidocious seems like a stretch to me, and to the Percolator author, who singled out a particular part of the journal article that suggests Mary Poppins may be a reaction to our overly consumer oriented culture.

But just as I was prepared to dismiss the entire thesis, I got to the part about the Bird Woman. Remember her? If not, watch the clip above. The Bird Woman plays a small but pivotal role in the film, feeding birds on the steps of St. Paul's Cathedral. Here are some lyrics from the song "Feed the Birds" that are highlighted in the paper:

All around the cathedral, the saints and apostles
Look down as she sells her wares.
Although, you can’t see it,
You know they are smiling,
Each time someone shows that he cares.

And here's what the author has to say about that:

The actions that the lyrics authorise—that the saints smile upon—are more than just kindness and simple generosity: they are an alternative social action. And while ‘feeding the birds’ specifically seems fairly insignificant, it nonetheless operates within a specific social vision—the Biblical mandate of ‘stewardship’. As opposed to capitalism, which sees nature as a commodity —as something endlessly subject to commodification and the human demands for profit— stewardship imposes a responsibility on humanity to care for nature. The Bird Woman carves out a space for stewardship even within a modern urban setting, and the lyrics of the song strongly endorse it.

So I leave it to you, dear readers. Did the Walt Disney Corporation bankroll a film designed to teach children to stand up in the face of rampant capitalism and embrace the Biblical mandate of stewardship? Or did they just think kids would think dancing penguins, magic umbrellas and cheery chimney sweeps were cool?

Incidentally, Mary Poppins was the #1 moneymaker of 1965, earning a net profit of $28,500,000. (It was a good year for Julie Andrews. The Sound of Music was #2 with $20,000,000, and My Fair Lady was #4 with $19,000,000.)

Wednesday, May 19, 2010

Video of the Day: RSA Animate: Drive

Broke is Beautiful Folk of the Day: An Interview with Stephanie Walker

In 2009 Stephanie Walker and her husband Bob were struggling to keep their California house out of foreclosure. Stephanie began writing about the experience and called her blog Love in the Time of Foreclosure.

Here is how she describes her tale: "Our house sold in a short sale on June 30, 2009 and our marriage is better than ever. In fact, we're expecting our first child in July! Where do we live now? Rent-free in a 1910 farmhouse on a remote and beautiful little island in Washington State. How the heck did that happen?! Well, our entire journey is here. The ups the downs and everything in between."

I spoke to Stephanie via e-mail about love, stuff and the unexpected adventures of being broke.

Why did you initially decide you wanted to be a home owner?

Our first experience as homeowners was the purchase of our condo the same year we got married. Buying the condo was a natural step for us. It was almost a given that we were going to do this. Both of us believed in owning your home and didn't want to rent for the rest of our lives. We were introduced to the Silver Lake area of Los Angeles by a friend who lived and owned a home there. And we fell in love with it. We have absolutely zero regrets about buying that condo.

Selling it and buying the house is another story... Several factors led to that decision. It was both emotionally and logically driven. But at some point the emotion trumped the logic. We fell in love with the house. We believed strongly in real estate as an investment. I grew up with that perspective as a truth as a Realtor's daughter.

And Bob and I had our own evidence to support this, given how much our condo had increased in value in the short time that we owned it. We felt that it was the perfect opportunity for us to get into a house where we could grow roots and start a family. We made sure that the house had everything going for it in terms of resale value.

I can't even count the number of times I said to Bob, "No matter what happens in the market, that view will never depreciate." Obviously I was wrong. Everything depreciated. And our perspective has completely changed as a result.

The truth about real estate as a solid investment? Not so true anymore. Though I wouldn't say I'm against it on principle. It's just not a foregone conclusion. There are people making great investments buying foreclosed properties and short sales. I think, like any investment, it's about timing.

A lot of people when they are going through something like you were feel ashamed and spend lots of energy trying to cover up their financial stress. You started a blog. What made you decide to be so open and public? And what was the result? Did writing about your worries help you?

I love this question. Ultimately the shame that typically accompanies a financial meltdown is what led me to start the blog. First, I should say that I have never been someone who hides her feelings. When the reality of our financial situation hit, I definitely felt an overwhelming sense of shame and stupidity. You know- How could I be so stupid?! It ran me. And I think for a couple of months we probably sugar-coated our situation. I hoped things would turn around and we wouldn't have to own up to the mess.

When we listed our house is when our friends realized that things were worse than we'd been letting on. It was a relief to let them in. And to let our family in. I remain eternally grateful to my family for never ever saying, "I told you so" to me in any way.

It takes a lot of energy to pretend. And I was more committed to spending that energy turning our situation around. Hiding, pretending... it was out of the question. We began by letting the people close to us into our lives and being honest with them. Going public with the blog came later.

At the point that I began "Love in the Time of Foreclosure," we had already received our notice of default and were way in over our heads with credit card debt. We had no idea what would happen next but we were noticing that we were happier than ever. Why? Because we were facing this together and learning from all of our mistakes. We were passionately committed to rising above our circumstances no matter what. To be happy in the face of foreclosure.

I had been seeing more and more stories in the news about people killing themselves or burning their homes down as a response to an impending foreclosure and the tone about the meltdown was all doom and gloom. There was no outlet for people like us to talk about what it's really like, how hard it really is and how we're committed to turning things around.

This had me thinking about blogging. Another contributing factor was my mom telling us that 70% of people facing foreclosure never talk to the bank even once before they are thrown out of their homes. We'd been speaking to the bank every week. And I just wanted to share honestly about how we were handling things with the hopes of connecting with people in the same situation. Getting emails and comments from readers who were going through the same thing was the most rewarding aspect of the blog.

And yes, writing it did help me tremendously. It was my way of venting and processing all of the emotions bombarding me every day. The fact that the blog was about LOVE in the time of foreclosure also helped me. On the days when I wasn't feeling so loving or I just wanted to give up, I couldn't. Because I had spoken this commitment to rise above our circumstances in such a public manner. It kept me honest, so to speak.

You come across as very optimistic and focused on the positives. Did writing your blog help/force you to take that point of view or are you an optimistic person in general?

I am naturally optimistic with a side of pessimism. I definitely always look at the bright side... even in the worst situations. My belief is that there is always something to be learned from every situation. But I don't know that optimistic is really the right word. Pragmatic? I also tend to believe that everything happens for a reason. Not that things are predetermined, but that things happen for a reason. The side of pessimism comes into play when I look at my own life.

And this might originate from my Catholic upbringing, but I never sit there and think, "I deserve a good life." Rather when something bad happens I tend to think that I obviously did something to deserve it and I have to pay penance. I'm working on that.

Various studies have shown that when people are having financial problems they often cut themselves off from other people. Did being as open as you were allow you to have more community support than you might otherwise have had?

Absolutely. I am still blown away by the support we received from our immediate community as well as the online community through the blog. Friends cooked for us when we literally had no money, they volunteered their time at our big sale, they helped us pack, gave us incredible moral support. Our families, though physically far away from us, gave us much needed emotional support. They believed in us and told us on a regular basis. We received wonderful advice and my mom - who was taking a course in short sales and foreclosures- coached us on a regular basis and shared information with our realtors. Being open was the best thing we could have done.

Before you were forced to sell your possessions what was your relationship to stuff? How has it changed?

I had my attachments because I spent a lot of time looking for the "perfect" stuff at the best prices at flea markets and thrift stores. When Bob first suggested selling all of our possessions, my first reaction was, "We're losing the house. I don't want to lose everything in it too." It was too much for me to consider. I wanted to hold on to these things that represented our life.

But I quickly came around. I saw the opportunity in letting go. In breaking that emotional attachment to material things. The idea of being free and unburdened became quite appealing. And I wanted to see what would come up for me in the space of letting go. What appeared was freedom. And I have an entirely new relationship to material things now. We moved into this house in Friday Harbor without any furniture and barely any money to spend. We shopped the dump on a neighboring island, thrift stores and the classifieds for free items. We took what we could get and have made it work. Our goal is to spend money only on what we absolutely need. The distinction between want and need is now crystal clear.

Your blog is called Love in the Time of Foreclosure. Money problems can cause serious problems in relationships, but you seem to have avoided that. Did you begin with a similar view towards money and possessions? How did you manage to stick together through these hard times?

Gosh, well... no. Our views on money and possessions were not similar. And money issues definitely plagued our marriage prior to us having to confront everything head-on in the midst of our foreclosure story. We're now on the same page and it feels so good. In the past it seemed that every conversation about money turned into a fight. Now, we can actually talk about money. Everything we went through together had us individually reevaluate our own past and relationship to money.

Personally, I used to ignore money issues entirely. Now I get excited about paying bills and budgeting. When everything came to a head with our finances, we knew that things could either get very bad for us or we could use the disaster as an opportunity to grow closer together. I feel like a broken record, but that is ultimately what had us 'avoid' the typical marital issues caused by money problems.

The amazing part of your story is how losing your house and stuff led to a position as a caretaker and living rent-free in the San Juan Islands. It sounds as though the decision to get rid of everything allowed you the freedom to explore possibilities you would not have had with a van loaded with stuff.

Yes, true. Letting go of everything is what had us be open to explore all kinds of possibilities. There was a time in our lives that this is what we both craved- being untethered and completely in the unknown. I never could have predicted we'd end up in the San Juan Islands. It's exciting to think about what can arise in the space of nothing.

Prior to buying the house we had discussed taking a year to travel as backpackers around the world. We thought it would be the perfect time. But then I got scared and put more of my attention on owning a house than traveling the world. So I guess it was both a fantasy and challenged my comfort zone. I didn't know how much I would be challenged until we actually got here. The transition from city life to rural life has been much more challenging than I would have predicted. Though now I'm settling in.

What have you learned and what is next?

Goodness. Big question. I've learned so much. Several lifetimes of lessons. Where do I begin? I guess with love. Love is what rescued us. We nourished our love for each other above everything else and that was the right thing to do. We're happier now than we've ever been. What else? Well, sharing is better than not sharing. Sharing our humanity- the good and the bad. It creates community, produces fulfilling relationships, creates authentic connections, fosters humility and opens worlds of possibility.

What's next? Parenthood. Baby Walker is due on July 24th!

Tuesday, May 18, 2010

Best Opening to A Review/Interview Ever!

This is how Brokelyn opened its article interviewing me about Broke is Beautiful:

"Author Laura Lee may have well written the Brokelyn manifesto, the recession-victims’ King James Bible and the brokester I Ching all wrapped into one. Her new book, Broke is Beautiful, is a vast, thoughtful and intensely researched tome on the value of living the cash-strapped life."

You've got to like that!

Brokelyn is an on-line publication that focuses on cheap stuff to do, and living a creative broke life in Brooklyn. Some recommended articles include Artists, Barter for Medical Care and How to Sell Your Hair Online.

You can read the feature on Broke is Beautiful to hear me reflect on free coffee vs. Starbucks, how paper towels are like throwing money directly in the wastebasket and the irony of "broke chic."

Incidentally, in that last section, I'm quoted as talking about "skinny waist" models. I actually said "skinny waif" models, but it occurs to me that it is pretty much the same.

In the book, I had a sentence that began, "People may say many things about Paris Hilton..." The copy editor put "People" in italics as the magazine title. I had actually been thinking of people in the human beings sense, but I enjoyed that it could be read both ways, and decided I liked it in italics. (It's on page 113 if you're following along)

Saturday, May 15, 2010

Charlotte Observer Review

The Charlotte Observer today ran a review of Broke is Beautiful.

If you're feeling down about the state of your exchequer, pick up this cheery little book..."Broke is Beautiful" is guaranteed to make you feel better about life in "times like these."

Friday, May 14, 2010

Hands Up: Who Has Great Self-Esteem?

Back when I was a theater student, one of my instructors opened his class by asking: “Does anyone here have an inferiority complex?”

The room was silent. I wanted to raise my hand and say, “Yes... well, that is, I sort of have an inferiority complex, but it’s not a very good one.”

But because this was the truth, I did not.

I recently came across a reference to a book called The Golden Ghetto: The Psychology of Affluence by Jessie O'Neill. The book apparently argues that inherited wealth or "money without meaning" can lead to a whole host of problems for the wealthy recipient. Among these are "low self-esteem, low self-worth, lack of self-confidence."

There are, of course, endless studies on poverty that blame a lack of money on low self-esteem, low self-worth and a lack of self-confidence.

So having too much money or too little can leave a person feeling unworthy. The key to a fulfilled and psychically balanced life must be to have just enough: enough to meet your needs; not so much that you don't know what to do with yourself. That's one possibility.

Another possibility is that those people in the middle, the ones who have just enough, also have low self-esteem. In fact, being alive may well be a cause of low self-esteem and a lack of self-confidence. Blaming it on circumstances could be just our way of trying to force our inner dialogue to conform to some kind of logic. "I think this way because..."

One of the wonders of being human is our ability to imagine. We do not just exist in the concrete world of today. We dream of different lives for ourselves, scary worst-case scenarios of poverty and misery and wild fantasies of stress- free luxury travel to exotic locations with an adoring fashion model (who happens to also have a PhD and a complete lack of annoying personal traits) at our side.

We compare our reality to these fantasies, we prepare for the worst (which almost never happens) and constantly measure our reality against the positive fantasy and wonder if we have somehow missed our true calling. This doesn't mean something is terribly wrong. If we didn't do that, we would be sea urchins, not human beings.

If you accept occasional nagging self-doubt and uneasiness as a rather unremarkable part of human life, you do not need to find a "cause" for it and identify what is to "blame." That should free up a lot of your brain power for other things.

It is very easy to identify something or other as the cause of your lack of self-worth: It is because you were raised too rich, or too poor, or you're too fat, or too thin, you're too driven, or too lazy, or the kids teased you, or your parents were too distant or smothering, their expectations of you were too high or too low.

Once you've identified the supposed cause, you look at other people who have the thing you've identified as lacking, and without the benefit of being inside their heads, assume they have no problems at all with their self-esteem. Well, guess what? They do.

And you know what else? I couldn't be bothered to come up with a conclusion for this story. I'm such a loser.

Self-Esteem Bowl Photo credit: / CC BY 2.0

*Opening paragraphs of this article excerpted from Broke is Beautiful by Laura Lee.

Thursday, May 13, 2010

The Joy and Pain of Glossy Magazines

Today's quote comes from the book Living Oprah by Robyn Okrant:

"The glossy pages of O reflected a lifestyle quite different from my own. As I paged through the lovely clothing, the jewelry, the adorable bric-a-brac, I felt like I was visiting a natural history museum viewing a diorama of how the other half lives... As fun as it was to visit fantasyland in the moment, afterward the excursion made me feel lacking... The magazine made these items look so much fun to own. But what fun is it to be reminded that I am not one of the people who gets to wear the $178 pair of miracle jeans that O's fashion team celebrates for making every woman appear silm and sleek?"

Wednesday, May 12, 2010

Get off the Hedonic Treadmill

This is an older article, but well worth a read. Who said everything had to be the latest breaking headline anyway?

A 2006 article in The Times reports that the pursuit of wealth may screw up your pursuit of happiness.

A new report goes further and suggests that chasing wealth might even make you mentally ill. Paranoia, narcissism and attention deficit disorders are just some of the afflictions more likely to dog you if you pursue purely materialistic goals, it says. But more controversial, perhaps, is that this report comes from an investment bank where money, presumably, is God.

Read the full article by following the link above.

Monday, May 10, 2010

Elizabeth Warren on the Colbert Report

The Colbert ReportMon - Thurs 11:30pm / 10:30c
Elizabeth Warren
Colbert Report Full EpisodesPolitical HumorFox News

Broke is the New Black: Fashionable Gals Dish on Debt

The ladies of TMI talk about saving money and paying down that credit debt. Clearly they enjoy shopping much more than I do, and have a somewhat different "level of broke" than I have. ("Sleep on it before making a purchase of more than $200." Wow. You buy things that cost more than $200?)

Proves broke is the new black, and "not spending" is a trending topic. Enjoy.

Saturday, May 8, 2010

Mixed Messages on the "New Frugality"

Will the thrifty habits we learned during "The Great Recession" last throughout our lives? Hard to say.

Today's New Times has an article with the headline "Frugality Among Consumers Outliving the Recession." The premise is that average people kind of dig their new frugality and they have no intention of going back to their old spendthrift ways. It is, like most of the articles of this type, anecdotal. People say they will never overspend again.

But the overall economic reports seem to contradict this pro-savings view. Yesterday NPR put a positive spin on increased consumer borrowing.

"Consumer borrowing posted an unexpected increase in March, only the second gain in the last 14 months. It could be a sign that households are feeling more confident about boosting spending, a key development needed to support a sustained economic recovery."

See my previous article "You Are Not Your Credit Score" for another article cheerfully noting that the economy is going gang-butsters because we're willing to go into debt again, complete with charts on how our spending outpaces our income.

If "recovery" is defined as spending at the pre-recession level, and that level could only be achieved by racking up massive consumer debt--should "recovery" really be what we are aiming for? Perhaps we should be aiming instead for what best-selling author Richard Florida calls "The Great Reset." Instead of trying to get back to where we were, for example by abandoning "the new frugality," perhaps we should be striving for something entirely new and better. I'm interested in your thoughts on what that would look like. I hope you'll participate in the discussion using the comments.

Friday, May 7, 2010

Broke Does Not Mean "Stupid" or "Lazy"

One of the great titles in the self-help genre is the 1989 Do What You Love, The Money will Follow. It promises an almost mystical connection between right livelihood and wealth. Follow your heart, and riches will come to you. Defer immediate security for a grand payoff down the line. It is a title that encourages you to take risks.

I agree with the first part of this title. Do what you love: seek out your right livelihood. Most people find themselves fighting for a place in a system that was created by someone else. Why should you be resigned to that when you can make your own way in the world? But I would have to amend the title to say you should do what you love whether the money follows or not. (Is this why I am not a best selling author?)

Expect buckets of money and you’re sure to be disappointed when they fail to come quickly enough or abundantly enough. Harness your dreams to make money and you’re looking at things completely backwards and inside out. If your goal is to have enough money to accomplish your dreams then you’re probably on the right track.

We harbor some strange ideas about ourselves and about money. One assumption is that the smartest people must, by definition, be the best paid people.

Money was an absolutely tremendous invention that allowed us to more easily get what we need. As a universal exchange medium for services and goods it serves a great purpose. It doesn’t do nearly as well as a measure of abstract things like intelligence, progress, satisfaction or creativity. But because we think of money as a measurement of value, we find it hard to imagine that anything that is not lucrative could have any value at all.

We find this attitude illustrated in articles like If I'm So Smart, Why Aren't I Rich? posted on Big Bright Bulb:

Well, for one thing (I tell myself) what’s with the presumption that being rich is a natural consequence of being smart? I’ve met smart people with little money and rich people as dense as a brick. So I don’t see this direct correlation between intelligence and wealth. Which satisfies my logic, but for days afterward my psyche rides waves of defensiveness and anxiety: What is ‘rich’ anyway? What does it even mean? Why would I want to be rich? But…why aren’t I rich?

I was taken with the first part of this article, in which the author mused on his/her (sorry, I can't read the signature) feelings about the assumption that intelligence should naturally produce money, and seems to debunk the wealth/smarts equation.

But I was disappointed in the end, where the author comes to conclusions about his/her money-poor status, chalking it up to a "fear of money" and relying too much on emotion rather than logic. The underlying assumption is that if a person is smart, he should have lots of money unless he has made a terrible mistake.

Financial wealth is not a sign of intelligence or industriousness. It is only a sign of how successful a person has been at amassing money. That's it.

If you focus your intelligence on money as a goal, you may (or may not) become rich. If you choose to focus your intelligence on something else, you may reach a tremendously worthy goal, but it may not turn you into Richard Branson.

It is, in fact, possible that the smarter you are, the less you are interested in money. Mensa, the organization of people with genius level IQs, did a survey of its members and discovered that they rank only at median levels when it comes to financial well-being. In an interview with Money magazine, the executive director of Mensa explained it thusly: “They could probably make more, but they tend to do what they like, not what pays best.”

Another assumption about money, which study after study has debunked, is that unless we were motivated by cash, we would all just sit around doing nothing. Therefore the most industrious must be the best compensated and hard work must ipso facto result in financial wealth. ("If I am working so hard, why aren't I rich?")

Yet we human beings are actually not particularly content when we're sitting around doing nothing. We're happiest when we are productive and working towards goals. The happiest are not the best paid, but those that are most actively engaged in a love affair with their labor.

Good Magazine ran an excellent article today called What is Work? which once again illustrates this concept.

...the more engaged you are at work, the more satisfaction you have in life, lending more credence to the adage “do what you love.” A recent Gallup study found that there are three types of workers: engaged, not-engaged, and actively disengaged. When asked if they had gotten the things in life that were important to them, more than half of engaged workers said they had while only 9 percent of actively disengaged workers said they had. Happiness, too, is tightly intertwined with work when it comes to figuring out how to get satisfaction from life. Eighty percent of engaged workers said they felt happy at work compared to 10 percent of actively disengaged workers. (Note to employers: the happier a person is at work the more productive they are.)
If you thought you could assume a “broke is beautiful” identity so that you can swing on a hammock all day, I’m sorry to have to disabuse you of this notion. A truly satisfying pauper’s life is not the life of leisure, but a life spent working with complete abandon on something that is in line with your dreams and values. “Broke and Beautiful” means being cash poor, and work rich. If you are broke because you’d rather lie around with your feet up than put in an honest day’s labor, well, you’re just lazy.

Portions of this article were excerpted from the book Broke is Beautiful by Running Press.

Thursday, May 6, 2010

The Quote Book Version

In case you haven't been able to get around to reading the Detroit Free Press interview about Broke is Beautiful (it was syndicated and has appeared in a number of papers):

Day Life/The Bend Bulletin has a version made up entirely of pull quotes.

A special treat for everyone with a very short atten... What were we talking about?

Reasons to Be Glad You Can't Afford Luxury Food

The rich may get their pick of the most desirable food, but it hasn't always been the best thing for them. Consider the effect of finely polished white rice on the Japanese diet as explained by Trevor Corson in The Zen of Fish:

"... rich people in Japan and other countries preferred the taste of bright white rice, and so they paid extra to have their rice polished. Sadly for them, the Japanese diet contained little besides rice bran to supply vitamin B1. People who ate polished rice condemned themselves to emotional disturbances, impaired sensory perception, weight loss, heart failure, and even death-- the results of beriberi, or vitamin B1 deficiency. About 350 years ago, as more Japanese acquired wealth and and moved from the countryside to cities, the consumption of highly polished rice increased. So did recorded instances of beriberi. One food historian reports that for a time, it was considered Japan's national disease."

Laura Lee on David Magee

Just finished an interview with the David Magee Show. Here is the direct link to the "Value Show," which featured me and Ultimate Cheapskate Jeff Yeager. I was even referred to as a "national personality."

Wednesday, May 5, 2010

How PBS Can Help You Stay Out of Debt

Do you sometimes feel like the only poor slob in the richest nation on Earth? Chances are you’re doing much better than you think.

Studies show that human beings do not judge what material possessions we should have on what we actually need. Instead we look to those around us, and compare what we have to what they have. If we’re part of the same social community, we expect to have just about the same amount of stuff. This wasn’t such a bad system in days gone by. People usually lived among a community of peers who had the same types of jobs, salaries and expectations.

These days, our “neighbors” are not the people down the street but the people who we welcome right into our houses via our TVs. Thanks to the magic box, we’re all hanging out with wealthy celebrities on their private islands. We’re comparing our wardrobes to Carrie’s on Sex and the City and our apartments to Shaquille O’Neal’s on MTV Cribs. Instead of keeping up with the Jones, we're keeping up with the Kardashians.

Day after day we are exposed to a world that is coated with high fashion and glamor. Even the cops and scientists working behind the scenes in crime labs appear to have been recently torn away from professional modeling gigs. Just like real life.

Few popular American television programs show working class characters. Researchers have analyzed the programs that do, and you will probably not be shocked to learn that they discovered such programs actually depict quite a good standard of living--higher than the characters could probably expect to have given their likely income levels.

The result, according to a survey conducted in the early 1990s, is that 85 percent of the U.S. public aspires to a lifestyle associated with those top fifth of the income ladder.

You do not have to be a financial genius to realize that most of us can never get there. But we try our hardest using our Platinum Rewards credit cards.

The worst part? When people feel stressed about their finances they are more apt to cut themselves off from real social interaction and watch more TV. There they see more rich and glamorous people, feel increasingly broke and ugly, and watch more TV and so on and so on.

So here is my suggestion. If you would like to live a well-balanced, debt free life, start watching British TV. Many British programs are available on channels like BBC America and PBS, and you can rent others or check them out from the library on DVD.

Where U.S. shows revel in the lives of the well-to-do, British shows are more likely to find drama in issues like unemployment and financial worries. The homes and furnishings tend to be modest. The actors are generally pleasant looking, but not impossibly beautiful.

(Romantic Leads, U.S. legal drama: L.A. Law)

(Romantic leads, U.K. legal drama: New Street Law)

And as an added bonus, the hour-long dramas created for the BBC air there commercial free, so you get almost a full hour of entertainment as opposed to the 44 minutes or so of a comparable U.S. show.

If you’re going to compare your life to the lives of fictional people, I say give yourself a fighting chance and choose people who have at least a fleeting resemblance to a lifestyle you could achieve. You’ll be entertained, more worldly and you’ll probably feel more attractive and richer without spending a dime.

Just don’t adopt the accent. You’ll sound like a twit.

Tuesday, May 4, 2010

You Are Not Your Credit Score

"You are your credit score."-Suze Orman on the Oprah Winfrey Show

"Can we please stop using the expression 'identity theft'? Your identity is the one thing that can never be stolen. Your personal information can be, but that is not who you are."-Laura Lee
in Broke is Beautiful

Now that Broke is Beautiful is out I have been surprised and gratified by interest from the business and personal finance press. Until recently, I had thought of my guide to enjoying the broke and beautiful life as the polar opposite of all of the more common guides on how to become rich and I assumed money gurus would not like it.

On further reflection, I came to realize that the personal finance folks and I are saying essentially the same thing. They urge their readers and listeners not to live beyond their means. So do I.

They are speaking to a more affluent audience, or at least an audience that aspires to be more affluent. And they generally promise a pot of gold at the end of the rainbow. I have addressed my book to the broke and promise no pot of gold. (Their marketing scheme-- targeting people with money rather than those without and promising them what they wish for-- is a bit more clever than mine, which probably explains something about my financial status.)

But here is where Suze Orman and I part ways. Orman, and the vast majority of those espousing savings and living within your means, are constantly focused on the magical measure known as the "credit score." Get out of debt and repair your credit.

An article in yesterday's Consumerist by a Bank of America debt collector sums up this point of view: "...use credit wisely, don’t spend more than you can afford, because I will find you and I will collect on you," Ben Popken writes.

After a long and occasionally menacing list of things creditors do that will just make the collections department mad he concludes, "You don’t know when you will need credit, protect it."

All of this focus on protecting your credit score when you are in the middle of financial difficulties strikes me as being, at best, inappropriate. If you're trying to figure out a way to avoid foreclosure or to stop collection calls and keep your sanity, you have something tangible and immediate to deal with. You need to talk to the bank to get things on track, to protect what matters most to you-- your sanity, your relationships, your family, your ability to pursue your goals--not to boost a number in a computer.

At worst, focus on the credit score fuels the problem itself. It is like trying to convince an alcoholic to lay off the drink and nurse his liver back to health by telling him that he can thus protect his ability to drink more whiskey in the future.

The result of this credit focus? You can find it in the Wall Street Journal under the cheery headline "Manufacturing Rose in April."

U.S. consumer spending rose twice as fast as income in March as saving dropped to its lowest level in 18 months and a closely watched indicator of inflation remained stable.

Personal income rose 0.3% in March as a weak labor market continued to keep a lid on wage growth, the Commerce Department said Monday.

Meanwhile, consumer spending -- which accounts for 70% of demand in the U.S. economy -- increased by 0.6% from the prior month, likely lifted by government efforts to spur economic growth.

With income growth sluggish, U.S. consumers slowed their pace of saving in March. Americans in March saved $303.9 billion as the national saving rate slid to 2.7% from 3.0% the previous month. The saving rate is at its lowest level since September 2008.

Good news! Things are back to normal. People are spending again!... On credit. This is fantastic if you are the president of a bank selling debt to make a profit, but it should give the rest of us pause.

The blog EconomPic has some nice charts to illustrate how our spending outpaces our compensation.

Your credit score, being compiled in far-away computers, is nothing more than a tool used by banks to determine whether or not you'd be a good customer for their products (debt). It is not a measure of your worth as a person or a tally of your accomplishments in life. It is not even a measure of your level of personal responsibility.

If you had never borrowed a thing in your life, had saved up every penny you earned, you would not have a great credit score. The best credit score goes not to the most responsible, but to the person most likely to carry enough of a revolving balance to pay a lot of interest to the bank without going under. In fact, in the credit card industry they have a name for people who pay off their credit card balances in full each month. They call them "deadbeats."

Yet the notion that this score is the key to any kind of worthwhile modern existence is so entrenched we rarely stop to question it. (It is only the most important piece of information about you if you consider your main identity to be "consumer" rather than spouse, parent, citizen, etc.)

Instead of spending so much of our mental energy on preserving our ability to borrow, I believe it would be more productive to channel it into finding ways to limit our need and desire to do so.

Portions of this article were excerpted from the book Broke is Beautiful by Running Press.

Photo credit:

Monday, May 3, 2010

Leap and the Net Shall Appear

Four Simple Things I'm Sick of Seeing On Twitter

My article with the above title has been posted on the web site Twitip. Enjoy.

Sunday, May 2, 2010

Creative Pause of the Day

I wish I were clever enough to come up with something so viral-worthy.