After a short hiatus, it's time for the weekly roundup from around the web for October 20, 2018.
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A lot of what I read that doesn't make it to the this weekly best content I post on social media.
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Think Save Retire
Steve, at ThinkSaveRetire, is one of my favorite bloggers. His blog is on my Top Ten List of Most Influential Bloggers. He and his wife Courtney are living their early retirement dream of touring the country in their Airstream travel trailer with their two dogs. Both are in their mid-thirties. Pretty sweet!
The article I'm highlighting is 6 Ways Clever Marketers Get Us to Spend More Money. As the title suggests, there's more than meets the eye when it comes to grocery shopping. Very little is left to chance in the store layout. The placement of items on the shelves, the lighting, the grouping of items, and even the flow of the store layout are all calculated to make it easier for us to spend more money.
According to research, these rascals even devise ways to get us lost. Why? It makes us become less risk-averse, and more likely to spend money on things we normally wouldn't. I hate being manipulated. Apparently, it happens every time I walk into a grocery store. I'll be more aware the next time.
Count on that!
I find marketing to be amazing. The tricks that stores use to get us to spend more money are absolutely amazing, and most of the time, we don't even know that they're happening. Take grocery stores as an example. Grocery stores use vertical shelf placement to help drive sales on the products that they want to move.
Dave, the author of the blog Accidental Fire, wrote a thought-provoking article titled Poverty, Bubbles, and the Line. The line is likely not what you think. You're going to have to read to find out what it means.
Anyway, in the article, Dave talks about society being a set of bubbles where people form friendships and alliances around societal factors. Since we all have a need to be in community, it makes sense that we would from those communities around like-minded people, right? Here's a quote from the article that makes this point:
“A person’s chances of becoming obese increased by 57% (95% confidence interval) if he or she had a friend who became obese in a given interval. Among pairs of adult siblings, if one sibling became obese, the chance that the other would become obese increased by 40% (95% CI). If one spouse became obese, the likelihood that the other spouse would become obese increased by 37% (95% CI).”
So, if you grow up in an area of poverty and associate stay in the poverty bubble during your early years, this logic says that it will be much harder for you to break out of that bubble of poverty. The concept has implications to all of us in some way, not necessarily relating to poverty but in terms of the societal bubble in which we find ourselves.
It's a great read.
I sat there in the passenger seat of my buddy Don's car. He was in the drivers seat but we weren't going anywhere. We just sat, drunk off our asses in the parking lot of a strip club in Baltimore. I was nineteen, and it was just another Saturday night.
The Physician Philosopher
These days the blogging community, specifically those pursuing financial independence (FI), does a lot of hand-wringing over the definition of FI and the path to achieving it. Defining it seems simple. It's having enough money to support your lifestyle throughout the rest of your life. How that's measured financially is where the arguments go.
In the article, TPP talks about the two primary methods. The first says you have to have saved 25X your annual expenses in order to use the 4% rule of withdrawals to sustain yourself. The other school is to do it via passive income.
TPP offers a third option, which he calls the hybrid model. The hybrid, as the name suggests, includes both of these strategies. At the end of the day, I'm not sure it matters how one gets there or how one defines FI. The important thing is to have a plan and execute it.
TPP offers a good review and analysis of these three strategies.
“It must be borne in mind that the tragedy of life doesn't lie in not reaching your goal. The tragedy lies in having no goals to reach.” – Benjamin E. Mays You may not realize the reason behind the name of this website.
Representing our neighbors from the north, Scott (based in Toronto) writes Making Momentum. In the post I chose, he offers a reminder of one of the driving principles of personal finance – Pay Yourself First – The Surefire Way to Reach Your Financial Goals.
Why is that so important? First and foremost, if you automate the process of putting a percentage of your paychecks away before allocating money anywhere else, it forms a savings habit. Why do I say automate? Simple. Most of us won't have the discipline to do it on our own. If we automate the process, we won't even have to think about it. We won't miss the money because it never got to our checking account in the first place.
Scott offers a three-step process to help you determine the amount and tips to automate. From there, you just set it and forget it. You'll never miss the money and will have formed a habit that will benefit you in other areas of your financial life. I advocate automating as much of your personal finances as possible. That includes funding retirement accounts, college savings, IRAs and Roth IRAs.
The more things we can automate, the easier it is to stay on track.
This post may contain affiliate links. Please read my disclosure for more info. It's a mindset and tactical approach to put at the top of your personal finance priority list. This statement has been echoed through the personal finance blog-o-sphere, podcast circuit and pages of books for decades.
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