Author Topic: intersting blog/article about spending money  (Read 2156 times)

rivendale

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intersting blog/article about spending money
« on: January 18, 2023, 08:28:14 AM »
https://collabfund.com/blog/the-art-and-science-of-spending-money/

It had some interesting points/perspectives about people'smindset towards spending. It probably could go either here or in the anti-mustachian thread depending on the emphasis one took away.

dcheesi

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Re: intersting blog/article about spending money
« Reply #1 on: January 18, 2023, 08:40:00 AM »
Quote
I think what many people really want from money is the ability to stop thinking about money. To have enough money that they can stop thinking about it and focus on other stuff.
This has been a mantra of mine for a long long time: "The greatest luxury of having money is not having to worry about it"

rosarugosa

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Re: intersting blog/article about spending money
« Reply #2 on: January 19, 2023, 06:13:16 AM »
https://collabfund.com/blog/the-art-and-science-of-spending-money/

It had some interesting points/perspectives about people'smindset towards spending. It probably could go either here or in the anti-mustachian thread depending on the emphasis one took away.

Great article - thanks for sharing.

oldladystache

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Re: intersting blog/article about spending money
« Reply #3 on: January 19, 2023, 01:36:46 PM »
Worth a read. Thanks.

clarkfan1979

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Re: intersting blog/article about spending money
« Reply #4 on: February 27, 2023, 06:42:24 AM »
Morgan Housel has been transparent that he does not have any formal training in Psychology. As someone with a Ph.D. in Applied Social Psychology, it's disappointing when his ideas are not consistent with the science, but yet he claims that it is.

His references are not based on scientific articles. His references are books and other money bloggers. Those can have value, but they are not "science"   

In point #1, he uses the term "revenge spending" to describe conspicuous consumption, within the context of "post COVID-19" One, I have never heard of "revenge spending" as a scientific concept. Even if it did exist as a scientific term, spending "post COVID-19" just went back to normal. He doesn't provide any numbers to support irrational behavior, but I don't think it exists.

The concept of conspicuous consumption is a real scientific concept, but I don't think he describes it correctly. Through evolution humans are wired to acquire assets that display social status. Those who are higher ranking within the group are more likely to survive. Expensive things that don't have practical value, might have survival value because it signals social status with a hierarchy within a social group.

Points #9, #11 & #12 are all based on the concept of conspicuous consumption, but the term is not mentioned. 

Mark Manson "The Art of Not Giving a F*&K" hired an academic to make sure his ideas are consistent with the science and he does a very good job.

Morgan Housel's book has sold many copies. It seems to have value. However, please don't call it "Psychology" or "Science" because it's not. 

cool7hand

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Re: intersting blog/article about spending money
« Reply #5 on: February 27, 2023, 08:32:15 AM »
Thanks for sharing!

ChpBstrd

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Re: intersting blog/article about spending money
« Reply #6 on: February 27, 2023, 01:10:31 PM »
That was an interesting blog post with a lot of fresh takes on the subject. Of course I have my quibbles:

From the article:
Quote
You have to try spending money on tons of different oddball things before you find what works for you.
...
There is no guide on what will make you happy – you have to try a million different things and figure out what fits your personality.
The obvious problems here are that:
1) By the time you've tried "a million different things" you've already gone broke, even if each thing only averages ten bucks.
2) If you try some things like drugs, social media, processed foods, streaming services, or luxuries you may become dependent upon them, and become less happy as a result. Some of the things that will addict you are mainstream products, so there's no way to know in advance how to avoid addictive things except to avoid most things by default.

In point #1, he uses the term "revenge spending" to describe conspicuous consumption, within the context of "post COVID-19" One, I have never heard of "revenge spending" as a scientific concept. Even if it did exist as a scientific term, spending "post COVID-19" just went back to normal. He doesn't provide any numbers to support irrational behavior, but I don't think it exists.
Perhaps the terms are referring to the large increase in retail spending which occurred in 2021-2022 and far exceeded the pre-COVID trend. Just to get back to the trendline at this point would require about a 13% decrease in spending. But keep in mind these are nominal numbers.


FRED no longer calculates real retail sales, so I subtracted monthyretailsales*monthlyCPI from monthlyretailsales to arrive at the following chart, which roughly demonstrates that until the past few months, most of the increase in nominal retail sales was due to inflation, and real sales have actually been on somewhat of a downtrend since the pandemic started. But in the past few months, real spending has gone up, perhaps as consumers pull ahead purchases to escape a perceived inflation that is no longer reflected in the numbers.

 

Wow, a phone plan for fifteen bucks!