Comments on: Big on methods, poor on fundamentals.

By: MossySF

MossySF — Tue, 09 Nov 2010 01:04:41 +0000

I currently live in a developing country … and I can say the people here would love to live an American lifestyle if they had the money. Those who ride bicycles want motorcycles, then cars, then luxury cars, then luxury SUVs. Those running successful businesses have big houses, his+her cars, hired help, etc.

Immigrants are a different class. Those who come over usually don’t speak English and hence have no choice but to save up to start a business. In additional, they often send money back home AND they need to save up money to sponsor more family over. Plus in a resource-rich country, even a big step-up from their old lifestyle would be considered frugal to an American-born.

So you might say it’s culture if it means growing up in an environment with no money or access to resources. They have no choice but to live a frugal lifestyle.

By: Caine

Caine — Sun, 07 Nov 2010 20:44:25 +0000

I have simultaneously been amazed at what man has accomplished, and his sheer stupidity. Rockets to the moon, electricity, refridgeration, etc. to failing to believe in evolution, failure to realize good public transportation, failure to fully recognize pollution and global warming, failure to maintain good health…

I suppose I should be glad to live in this imperfect world. To be one of the few “smart” ones, who with a little planning and discipline can live so easily off the fat of the land and other peoples hard work.

By: retirebyforty

retirebyforty — Sun, 07 Nov 2010 16:03:47 +0000

Culture is a huge contribution to the problem we are facing, obesity and personal finance. This culture is not ingrain, I believe it is being guided by the Corporations of the world. We can see how obesity rate went up so much in the last 30 years and the spending culture infiltrated the US. This culture is spreading through out the world. There were one or two chubby kids when I was in grade school (Thailand.) Now they are starting to see obesity problems there.
We all want to eat and spend instinctively, but the Corporations are pushing everybody to do more and more.
I’m not fat and my finance is ok so I don’t think we can put all the blame on corporates, but I think they would love it if I eat and spend more.

By: Britz

Britz — Tue, 31 Aug 2010 03:56:47 +0000

@Adfecto: Your biomedical discription is only half the story; the other half is indeed culture which may be seen as external DNA. Without the culture, we are stuffed. This is why zoo animals often cannot be put out in the wild. And the culture in the US is like very damaged DNA; it has been developed and shaped artifically and without grounding (like in Communist Soviet, say), partly by those in financial and economic power to govern and prey upon the general population. Consumerism and planned obsolescence of products ensure that companies can get money from people; Hollywood worship drives another leech economy and keeps people docile while dreaming of unobtainable shortcuts to a better life; Christian ideals serve churches at the cost of people’s mental health and wallet; and propaganda ideals like “Freedom”, “Liberty”, “Democracy”, and even “Gun-ownership/revolution” (or truisms like “Best country in the World!”) keep people in false beliefs and in status quo; just like under the Soviet regime, say. If you are told repeatedly that you are free (or that the US is the best country in the world), then you might believe it; if you believe that by owning a gun and joing a local milita, you can overthrow an unjust government, then you might buy a gun but will probably stay on the couch – and you will never organise a real revolution. “Individualism” and “the evil government” might actually be the two main unhealthy ideas in the US, especially when in combination; they prevent any national identity or cohension, which leads to massive corruption, crime, bureaucracy, and animosity at all layers.

By: Hannah

Hannah — Tue, 25 Mar 2008 06:04:09 +0000

“Therefore to stop being poor people need to give up their consumerism.”
This is the heart of the issue, but I know some people that would rather die than do that! I’m really starting to see how consumerism is more insidious than merely having poor impulse control. It is a full-blown national addiction. We substitute living with buying; that is, I personally know many people who equate the “good life” with purchasing the newest and the best, only to find themselves caught in a vicious cycle of always chasing the carrot on the stick. Maybe you can explain how obsolescence works to them?

By: Jacob

Jacob — Mon, 24 Mar 2008 22:47:57 +0000

@adfecto – Individuals in this culture seems to be more inclined towards behavior I dislike Other cultures are not nearly as bombarded with consumer choices and advertising. Immigrants also don’t take the purchase of solutions for granted (but their children do).

Moving on. I have thought about the law of comparative advantages. I don’t think it is justified to use it for salaried professionals. I don’t know if that pertains to you, but it certainly does pertain to one of my jobs. The question is, what is the marginal income of one’s spare-time. For salaried people, it’s $0. Thus in most cases it pays to DIY. If one is paid by the hour it changes completely. For instance, I had my state taxes done by a pro. That cost me 6 hours of my life. I doubt I could have done it faster than that myself, so I here it made sense.

By: Adfecto

Adfecto — Mon, 24 Mar 2008 22:36:30 +0000

@ Jacob

It is not our culture that is broken! Individuals have a natural inclination for the behavior you dislike.

Are we fat because of our culture or because of poor individual self control? Do we have crime because of culture or individual mistakes? Do we spend too much, save too little, and make bad buying decisions because of culture? I think that blaming culture masks two more real causes, human nature (hunter/gather instinct) and lack of self control (future return vs immediate gratification).

We have a privative reptilian brain buried under an advanced prefrontal cortex which regulates decision making and problem solving. Several studies (sorry for no links but Google should find them easily) have shown that our brains light up in funny ways when presented with buying decisions and frankly lots of individuals just aren’t up to the task of wealth building financial decisions. There are also behavioral finance studies based on brain scans which show that people are plain bad at weighing future returns against immediate gratification. This has nothing to do with culture and everything to do with neurology, biochemistry, and evolutionary anthropology.

Frankly, if we were all as intelligent and patient as you, there would not be a spending problem in this country. The problem is that you are rather unique (hence the extreme difference between your financial philosophy and that of nearly everyone else).

I think we should start looking for a pill to combat spending and shopping addiction, I heard somewhere that antidepressants can help

@ NDOutdoorsman

Over the past 8-9 years I have worked in some capacity in the computer and software industry. The work I do is specialize and requires training and skill. For this work I am paid well. Thus, when I have a problem I turn to those who specialize in fixing my problem. In the most basic example, I pay for an expert to fix my car and he pays me to fix his computer.
Labor has become specialized and most tasks are optimally performed by a professional.

Also, when I consider the value of my time, tasks that do not require specialization are most optimally performed by someone else as well. As an example, it is economically best for me to pay a neighborhood kid to cut my lawn as opposed me to do it. I pay him $7 an hour plus expenses while I can earn $50 an hour working (or be paying only $7/hour for extra relation and leisure time).

By extension, if there were an effective treatment for weight loss that did not have significant negative side effect, I’d take the pill and pay my fee. I hate the gym so paying $20/hour (or more) to get the effect of working out would be a god send! Unfortunately that is not the current state of medical science (hard work and self control really is the only real route).

Unfortunately its time sign off the net and head over to the gym

By: NDOutdoorsman

NDOutdoorsman — Mon, 24 Mar 2008 17:40:29 +0000

Interesting that you mention this. My father said a few months ago that he is disturbed by how less and less people are relying on their own ingenuity and resources to come up with solutions. I grew up in a household that tended to find its own solutions, instead of rushing out and buying solutions for everything. Not that there is anything wrong with buying a solution, in that it does solve a problem. But people at one time used to rely on their own strength of will and character to solve problems and get through to the other side, with far less availible than we have today. Good post.