Category Archives: quotes

Obama and the Talmud

mask sink

Saw this quote from The Talmud in huge letters on the side of a building:

“The past we inherit, the future we create”

Which reminded me of a more recent quote, from President Obama:

“Our destiny will not be written for us, but by us”

Both quotes reminded me of this blog, which I’ve neglected over the past few months.

The longer you go without a new blog post, the harder it gets because it feels like you have to break that silence with something awesome. But I just broke that silence with something…less-than-awesome?

What do you think of this new tagline?

oxygenNot that it makes a huge difference in the whole scheme of things, but I put a new tagline up at the top of my blog. Here’s why…

I figured that there are a thousand frugal blogs out there (even though this was the only “frugalism” blog), so I needed something more unique and inspiring. The new tagline is:

Work to earn. Earn to save. Save to invest. Stop working.

It was inspired by this awesome article on what “retirement” means in this day and age. The full context is:

I demonstrated a very typical Generation X attitude to finance. Rather than thinking of it as having a pension plan, getting vested, putting in my time, and making monthly installments on my defined contribution plan, I looked at the “rules” of the game. How does the money system work? Should I work to earn and earn to consume? Or should I work to earn and earn to save and save to invest so I can stop working?

I broke it into four sections that are really the four main topics of Foundry in the Forest

  1. Work to earn means Maximizing Income. Reading your average frugal blog has a diminishing return on your time, since there’s a limit to how little you can spend (Jacob, the guy who wrote the above article, seems to have found that limit, $7k a year per person). On the other hand, there’s no limit to how much you can earn. That’s why I recommend most people focus their efforts on maximizing income. Once you’re past 6 figures, you’re probably good in this department.
  2. Earn to save means Minimizing Spending. Figure out how much is enough and don’t spend a penny more. If you increased the frequency of your breathing, you could gulp up so much more oxygen. But you don’t because you have all the oxygen you need.
  3. Save to invest means Educating yourself about Investing. I wrote a series of posts on this topic that will help start your investing education. But never stop learning!
  4. Stop working means Becoming Financially Independent, and no longer requiring paid employment. That part should be self-explanatory. But maybe not, since smart people are still re-working the definition of “retirement” these days.

So that’s the new tagline. What do you think?

Why you shouldn’t buy gold

One often hears of gold (and other precious metals) as a “safe” investment. On top of that, there’s a recent trend of doomsday people who’ve added a chorus of “when the SHTF, you’ll want gold!”* I’m more optimistic about the future of society, and I don’t directly invest any money in gold. In fact, if I had physical gold right now, I’d be selling it. Warren Buffett puts it best, when he says:

If you buy an ounce of gold today and you hold it a hundred years…you’ll have one ounce of gold and it won’t have done anything for you in between. You buy 100 acres of farm land and it will produce for you every year. You can buy more farmland, and all kinds of things, and you still have 100 acres of farmland at the end of 100 years. You could buy the Dow Jones Industrial Average for 66 at the start of 1900. Gold was then $20. At the end of the century, [the Dow] was 11,400, and you would also have gotten dividends for a hundred years. So a decent productive asset will kill [i.e. outperform] an unproductive asset.

I’m not as smart as Buffett, so I’ll explain the same concept using charts. Here’s the historical price of gold over the past few decades (adjusted for inflation):

“Damn!!!” You might say, “Gold be goin’ through the roof! I gotta buy me some of that,” and that is how it appears. But let’s compare this chart to a different chart. Here’s home values through 2007:

Everybody knows how that one ended up. And here’s the NASDAQ composite up through 2000 (i.e. the dot-com era):

Aka the dot-com bubble. Seeing a pattern? These are all bubbles! I’m sure if I pulled up a chart of Tulip prices in the 1600’s, it would look the same.

Gold is in a bubble right now. The blingy stuff isn’t intrinsically worth more now then it was 100 years ago. It still has the same value. It makes pretty jewelry and is useful in many applications due to it’s malleability. Heck, it might even be worth more in 5 years then it is today.

But investing in gold is just like jumping into any other bubble: you hope that people in the future will be willing to buy your stuff at a higher price then you paid for it. Not because it’s worth more, but because everyone else wants it too. Go back and re-read that last passage. If that describes any of your investments, you know it’s time to sell.

In a hypocritical twist, my next post will be about why you should buy gold…in a roundabout sort of way.

* If the shit hits the fan so hard that the dollar is worthless along with all other investments, I’m not sure what good a shiny metal is going to do you, unless it’s in the shape of a knife or bullet…

Mitt Romney is a surprisingly frugal guy

This isn’t a post about politics. Vote for whoever you want. This is a post about some of Romney’s frugal habits:

Romney duct-tapes the holes in his gloves, duct-tapes the gap in his campaign bus ventilation system. He rinses and stacks the dishes at the sink before loading the dishwasher after family holiday meals. He picks up his own dry cleaning, pulls his own suitcase, eats at burger joints, counts his change.

While other rich people flaunt their acquisitions, the Romneys tend to flaunt their frugality. When another one of his sons fetched free wood pallets advertised on Craigslist, broke them down and used the discarded rough planks to repanel his “man cave,” his wife proudly chronicled the do-it-yourself project with photos and text on her blog.

I don’t agree with most of his politics, but I’d be glad to have a president who isn’t afraid to “flaunt his frugality.”

We’re always waiting, but what are we waiting for? [video]

My sons are way into an album by the Portland group Yacht. I’m always happy to introduce them to non-mainstream music, but I’m especially glad they’ve taken a liking to this album, because the messages of the lyrics are very positive. There’s one song in particular called “We’re always waiting.” I never realized how well the lyrics summarize the Your Money or Your Life, voluntary-simplicity movement.

Give it a listen:

We’re always waiting. What are we waiting for?
We’ve got all we need right here, but something’s telling us we need more.
We want all that stuff. All that stuff that costs too much.
Why are we working? And what are we working for?
We feel sad and such. Are we owned by our own stuff?
We don’t want our boring jobs, to keep us paying bills for ever.
So what are we waiting for?

Why people are bad at math

Only have time for a quick, drive-by post this morning (yesterday was my birthday).

I really enjoyed this article about how business prey upon the freaky way our brains think about money. The article dances around the point that I make over and over again, so I’ll repeat it: it’s hard for us to wrap our minds around the concept of money until we realize that money is simply what we trade our time for.

In terms of our shopping behavior, the article puts it in these terms:

Consumers aren’t just hunting for products. They’re hunting for clues that products are worth buying.

Instead of “clues”, we usually get mind games, such as quantity over quality or anchoring — displaying an expensive product up front so the rest of the products seem reasonably priced in comparison.


PS: I hate the term “consumers” as a synonym for “people.” It makes us sound like pigs at a trough…

I’m tweeting at @fdryintheforest

Some content doesn’t deserve an entire post of its own. For example:

Use a small spatula to get the last serving of jam, etc, out of jars. Use a large one to get the last serving out of pots/pans.

Good thing there’s twitter, home of all the best half-baked ideas. I started a twit for Foundry in the Forest, it can be found here:

@fdryintheforest

I’ll tweet when a new post goes up, but also add some simple tips and tricks that you won’t find here on the blog.