Financial Infidelity

Posted on May 1, 2012 by jim_roberts

     Honest and open communications are the cornerstone of a healthy relationship. So, it should come as no surprise that withholding details of your financial shenanigans from your spouse is a financial recipe for disaster.
     You are a financial infidel if you hide purchases you make from your spouse, have secret credit cards or even bank accounts, lie about your salary, have a stash of cash hidden away, or intercept bills at the mailbox to avoid detection.
     If you stop to think about it, it’s highly likely that many of us have dabbled in the black art of financial infidelity during our married lives. Who hasn’t hid something they bought in their closet, in the basement, or in the trunk of the car (fairly risky)? Or, how many of us have made a large purchase without letting our spouses know beforehand (I plead the fifth)?

     In fact, a recent Wall Street Journal article by Veronica Dagher (April 30, 2012, R1) reports that 31 % of adults say they have been deceptive about their money with a spouse or significant other. And, of these, 58% have hidden cash, 53% said they spent less than they did on the item in question, 15% have hidden an entire bank account, 34% confessed to lying about their finances, and 11% have been less than forthcoming about their salary. Some people have even had entire businesses and brokerage accounts that their spouse knew nothing about.
     As Michael Keaton’s son exclaims, when Mr. Mom (Michael Keaton, star of the 1983 movie of the same name) suggests letting his other son hold the money over a bet on whether the recently laid-off Keaton or his wife Teri Garr will get a job first, “Don’t give him money, it makes him Crazy”. Apparently, such an indictment holds true for many of us as well.

Posted in Uncategorized | Tagged , , , , , | 1 Comment

Brother, Can You Spare $75,000.00?

Posted on April 24, 2012 by jim_roberts


     A 2010 study by economist Angus Deaton of Princeton and Nobel Prize winning psychologist Daniel Kahneman found that happiness increases along with income – but only to a point. The two authors analyzed survey results from 450,000 Americans participating in a huge data collection effort called the Gallup-Healthways Well-Being Index. Their analysis of this sea of data led them to conclude that happiness increases along with annual income up to $75,000. People were happier as their income increased but at $75,000 in annual income the income/happiness marriage began to sour (flatten-out). On a daily basis, people who earn more than $75K are no happier than those who make less than $75K. They (high earners) are, however, more satisfied with their life over-all than their less wealthy brethren. It appears that other life factors like one’s health, family, and friends carry sway after the “basics” of food, shelter, and clothing have been met.
     For those of us who make less, let’s say $50K per year, there’s still hope. A recent poll by the Marist organization placed this “tipping point” between happiness and income at $50K per year. Those earning less than $50K reported that their money worries spilled over into other areas of their lives and made them less optimistic about the future. At $50K or more, respondents reported that they were happier in nearly every aspect of their lives than their financially challenged cohorts.
     The above results are an important reason why many happiness researchers are calling for non-economic measures of well-being, possibly a Gross National Happiness (GNH) index, in addition to economic measures like Gross Domestic Product (GDP) which is largely a measure of personal spending. As the above research suggests, at some point, more money just can’t deliver the goods (pardon the pun).

Posted in Uncategorized | Tagged , , , , , , , , | 13 Comments

“I do”, now, “I don’t”

Posted on April 12, 2012 by jim_roberts

At least most Americans were married longer than the 72 days it took Kim Kardashian to call it quits. To provide some perspective, Kim’s marriage to NBA basketball player Kris Humphries lasted 33 days less than the movie Titanic was number one at the box office, 78 days less than the marriage of Baywatch star Pamela Anderson to Kid Rock, and 658 days less than the average life of mail-order Sea Monkeys (www.buzzfeed.com).

Although the divorce rate in the US has dropped from its high in the 1980s, still, approximately 45 % of first marriages will end in divorce court. Give or take, that’s around one million divorces in the US every year. 80,00 of those divorces in 2010 occurred in the great state of Texas. Apparently, living in the South (not just Texas) can be antithetical to connubial bliss. So, “What does this have to do with money?” you’re probably asking. Well, a lot.

Research by Jeffrey Dew at Utah State University and others has found what might be the holy grail of happy marriages – debt (or lack thereof).1 Research tells us that as debt increases the quality of the marriage decreases accordingly. Credit card debt undermines the very foundation of a marital union. Married couples with more debt are more likely to squabble over money which casts a black cloud over their marriage. The economic irritation caused by debt seeps into other areas of the marriage further undermining the couples’ satisfaction with their marriage. And, debt knows no economic boundaries. Across all economic strata, debt causes marital strain.

On the other end of the financial spectrum, assets (e.g., money in savings, home equity, etc.) help strengthen marital ties and lessen the likelihood of divorce. Assets, as professor Dew points out, however, are more beneficial to wives. Dew says that wives with more assets are happier in their marriages and are more reluctant to get divorced because of the inevitable drop in standard of living that would occur if they were to divorce.

And, you guessed it, marriages where one or both spouses are materialistic face higher rates of divorce. Materialistic spouses are more likely to argue about money (and other things as well), are less satisfied with their marriages, and considerably more likely to get divorced.

In a study by Paul Amato and Stacy Rogers, the researchers found that when one spouse views the other as “spending money foolishly”, the likelihood of getting divorced increased by 45%.2

As I argue in my book, Shiny Objects, the impact of our love of money and material possessions goes well beyond the mountains of debt and lack of savings it creates. The moral of this story: avoid accruing consumer debt and try to reel in your materialistic longings. Your spouse and children will be glad that you did.
Sources:
1 Jeffrey Dew, “Bank on it: Thrifty couples are the happiest”

2 Paul Amato and Stacy Rogers (1997), “A longitudinal study of marital problems and subsequent divorce,” Journal of Marriage and the Family, 59, 612-624.

Posted in Uncategorized | Tagged , , , , , , , , | 18 Comments

Capuchin Commerce

Posted on April 2, 2012 by jim_roberts


This may all be just a bunch of monkey business, but Saturday’s Wall Street Journal (4-1-2012, C11) had a great article about the consumer behavior of monkeys (Capuchins to be more precise).1 Laurie Santos, a young scientist at Yale University, attempts to better understand the economic behavior of humans by studying ten Capuchin monkeys in her primate lab – to be more precise, in her “Comparative Cognition” laboratory.

Santos and her staff trained their charges to use tokens (e.g., money) to buy food. Her earlier studies of monkeys led her to conclude that, “You can’t watch them without realizing they care about the same things we do”.

In one memorable study, the monkeys were given twelve flat aluminum tokens (“monkey money”) that they could use to purchase food. Experimenters found that when the price of a particular food was reduced, the little critters searched for the best deal. And, consistent with most of their human counterparts, the Capuchins were not likely to save any money and spent their stash in a hurry. Like many of us, money appeared to burn a hole in their proverbial pockets.

But, here’s where the similarities between monkey and human commerce might diverge. The monkeys were given the choice, for the same number of tokens, to purchase a smaller square of blue Jell-O or a much larger square of red Jell-O. The idea being tested was whether monkeys, like humans, would prefer the more expensive blue Jell-O over the cheaper red Jell-O. But, however intuitively appealing this type of thinking might be, this was not to be the case. The little darlings ate either Jell-O with equal gusto. Some may be prone to argue that monkeys don’t have the mental capacity to make such complex decisions, or, as Santos quipped, the monkeys may simply be “more rational” as consumers than us two-legged types.

1 Source: Amy Dockser Marcus, “The Hard Science of Monkey Business,” Wall Street Journal, Saturday/Sunday, March 31 – April 1, 2012.

Posted in Uncategorized | Tagged , , , , , , | 21 Comments

God’s Financial Plan

Posted on March 19, 2012 by jim_roberts


These are tough economic times where the little guy can’t seem to catch a break. Well, why not team up with The Big Guy? With televangelist Don Stewart’s “Green Prosperity Prayer Cloth” you will receive and I quote “abundant blessings of financial prosperity.” The Green Prosperity Prayer Cloth is personally blessed and anointed by Don himself. It even comes with instructions! Be sure to order yours today.

The Prosperity Gospel is variously referred to as the “name it and claim it” Gospel, the “Blab It, and Grab It” Gospel, the “Health and Wealth” Gospel, the “Gospel of Success”, and the “Word of Faith” movement. Whatever the moniker, at its core, the Prosperity Gospel preaches that genuine religious conviction and conduct, usually in the form of tithes and other monetary donations, lead to financial prosperity. The gospel contends that financial prosperity and success in your private and professional lives is a sign of the Almighty’s blessings.

What are your thoughts on the Prosperity Gospel? Does God’s financial plan for all of us include untold wealth and riches? Many Prosperity Gospel proponents use Mark 10:30; Matthew 7:7-8; John 10:10; Deuteronomy 8:18; Galatians 3:14, and others to support their claim that financial prosperity is part of God’s financial plan for the devout (variously defined). Oral Roberts referred to such blessings as “Seed Faith”.

As you might have guessed, there is considerable debate over the Prosperity Gospel. 1 Timothy 6:10 states that, “For the love of money is a root of all kinds of evil”. Matthew 6:19-21; Luke 18:22-25; and Matthew 6:24 are but a few of the scripture verses that seem to argue against the love of money and the accumulation of possessions. Since many of us suffer from the modern malady of “Affluenza”, it’s time we rethink God’s financial plan for us.

Posted in Uncategorized | Tagged , , , , , , , , | 15 Comments

“i Want An Ethical Apple”

Posted on March 2, 2012 by jim_roberts

UPDATE (MARCH 6TH): APPLE’S CEO, TIM COOK, WILL EARN $378 MILLION IN 2012. YES, THAT’S MILLIONS (BLOOMBERG BUSINESSWEEK, 2/20 – 2/26/2012)

Wouldn’t you just kill for a new Apple iPad? Apparently, workers in China who assemble iPads will and do. So much so that Foxconn Technology Group who makes iPads for Apple forced workers to sign “suicide pledges” after a rash of suicides in an iPad plant. Demand for iPads is so great that workers were required (“strongly encouraged”) to take only one day off for every 13 days they worked. And, many of these days were 10-15 hours of mind-numbing labor. Lower performing workers are routinely humiliated in public to increase their productivity (www.consumerist.com). All this for about $ 5 per day, yes, $5 per day.

Chinese factory workers earn, collectively, about eight dollars for each iPad that rolls off the assembly line – that’s 2 % of the cost of the least expensive iPad. In contrast, Apple reaps about $150 in revenue for every iPad2 it sells (www.csmonitor.com).

iPhones and iPads have been so good to Apple that it is now the biggest company in the world with a market capitalization of $507.7 billion. That’s a half a trillion dollars. Exxon Mobile is a distant second with a market cap of a measly $409.11 billion (www.pcmag.com). It’s hard to believe Americans spend more on iPhones, iPads, and Macs then we do on oil and gas!

The question of the day is this: Is it ethical for us to buy iPhones and iPads from a company that has $98 billion in savings when its workers are working themselves to death, or working in extreme conditions for the princely sum of $5 per day? Consumption is a moral matter; how we spend our money affects others. It appears that it is time for us to start shopping for a better world.

Posted in Uncategorized | Tagged , , , , , | 18 Comments

Food For Thought

Posted on February 24, 2012 by jim_roberts


Taco Bell, McDonald’s, Wendy’s, BK, Schlotzsky’s, Red Lobster, Chili’s, Panda Express, Olive Garden, Dairy Queen, Denny’s, KFC, and even Long John Silver’s, are all like members of the family to many of us. As Americans, we love to eat out. Despite the recent Great Recession, the typical U.S. adult eats out at restaurants an average of 4.8 times every week. Over half of those restaurant visits are for lunches, followed by dinner out and nearly once a week we have breakfast out (Living Social Dining out Survey, 2011).

The restaurant industry took a “hit” during the recession but is roaring back as Americans open their pocketbooks as the economic storm clouds slowly dissipate. Restaurant sales are estimated to reach $632 billion in 2012. There are approximately 970,000 restaurants in the U.S. who employ 12.9 million workers. We spend $1.7 billion during a typical day on meals out and the restaurant industry job growth has outpaced the U.S. economy for the past 12 years. We spend roughly half of our food budget on dining out (National Restaurant Association, 2012).

Let’s face it, we love to eat and don’t like to cook. Both of these propensities can have disastrous effects on our waistlines and pocketbooks. If you’re a regular reader of the Shiny Objects blog, you know where this discussion is headed. Let’s take for example a recent dinner out for the Roberts family of four. Allow me to preface this story by saying that the Roberts clan only eats dinner out once a week – usually Saturday nights. Because we were celebrating we went to Olive Garden. We had sworn it off previously because it’s too expensive – particularly for pasta dishes which cost the restaurant only pennies. Well, this meal totaled $65 including tip. And, we all had agua – no drinks which as you know would have added $10.00 to the bill (for sodas or tea not the hard stuff). If you’re like us you can’t out of good conscience buy soda for $2.50 when it costs the restaurant about .15 – .20 cents.

So, this started me thinking about how we could make better use of our money than the temporary enjoyment of a good meal out. Setting aside the argument that restaurant food packs a lot more calories than home-cooked meals, the financial implications of our decision to dine out can be staggering – it’s all about opportunity costs.
What could we do with the money we save from eating at home instead of at restaurants? If we cut back only three meals out a week we would all be burgeoning Rockefellers. Let’s assume that a family of four can barely get by for $40 or less for a typical dinner out (no drinks, please). Subtract from the $40 the $10 it would take to feed the family at home and you have a net savings of $30 for each meal out. That’s a savings of $90 per week if we ate at home three times per week instead of eating out.

Getting out my future value calculator, that would mean a nest egg of $186,057.30 over a 20-year time period at a 6 % rate of return, $412,049.52 over a 30-year time period, and $833,678.83 over a 40-year time frame. Definitely, food for thought.

Posted in Uncategorized | Tagged , , , , | 15 Comments

The Real St. Valentine’s Day Massacre

Posted on February 13, 2012 by jim_roberts


     Do you feel, like the graphic poster above suggests, that you must spend your hard-earned money on Valentine’s Day to show others how much you care? Apparently, many of us do. The National Retail Federation (NRF) forecasts that Americans will spend $17.6 billion in 2012 in the days leading up to, and, if you’re like many of us, on Valentine’s Day itself.

That’s an average of $126.03 per person – an 8.5 % increase over last year and the highest in the 10 years the NRF has conducted the survey.

$74.12 will be spent on spouses, $25.25 on kids, parents, and other family members, and $6.92 on those special somebodies. And, my favorite statistic of all, Americans will shell out an average of $4.52 on their pets to make sure they don’t feel left out. As you might have guessed, men will far outspend the fairer sex this Valentine’s Day, racking up average expenditures of $168.74 compared to $85.76 for women. True, we probably have more to a make up for.

Jewelry is the big winner in the Valentine’s day consumer frenzy with spending to total $4.1 billion, followed by $1.8 billion on flowers, $1.5 billion on candy, $1.4 billion on clothing, $1.1 billion on gift cards (you sentimental fools), and $3.5 billion on a romantic evening out. NRF President and CEO, Mathew Shay, is “encouraged” by American’s willingness to spend money when told to do so (my words, not his). The original St. Valentine’s Day massacre took place in Chicago; nowadays it happens every year about this time.

Source: http://nrf.com/modules.php?name=News&op=viewlive&sp_id=1304

Posted in Uncategorized | Tagged , , , , , , | 20 Comments

Lakshmi: The Prosperity Gospel Revisited

Posted on February 6, 2012 by jim_roberts


     In chapter ten of my book, Shiny Objects, I talk about the Prosperity Gospel (PG). In its simplest form, the PG argues that tithes and donations given to a church will result in a financial windfall for the giver. Commonly described as the “Name It and Claim it””, or more pejoratively, the “Blab It and Grab it” Theology, the PG has a large following in the U.S.
     Given the long-entrenched U.S. consumer culture, it wouldn’t be a great leap of faith to think that the PG was birthed in the U.S. This thinking, however, would be erroneous. People of cultures and religions that pre-date the U.S. by thousands of years have long looked skyward for a little help with the family finances.

     Take for example, Lakshmi, the Hindu Goddess of wealth and prosperity – both material and spiritual. Since Shiny Objects addresses how our love of money and material possessions impacts our happiness, we will focus on material prosperity in this posting. Lakshmi has existed for thousands of years. A 1,400 year old statue of the Hindu Goddess was discovered and her visage graces coins that date from the first century BCE.

     She is typically seated on a Lotus blossom and holding a Lotus bud that represents beauty and purity. The Goddess has four hands and is usually depicted with gold coins cascading from each hand. The red in her gold embroidered clothes symbolizes activity and the gold, prosperity. Often, two elephants are situated next to Lakshmi spewing water into the air. 1

     I like the elephants because spewing water represents the ceaseless effort needed to achieve material prosperity. So, one must pray to the Goddess Lakshmi for wealth but a little hard work can’t hurt. And, as I mentioned in an earlier blog, when cultures place a high value on something they come up with a lot of names for the particular venerated object. It is claimed that Lakshmi has 108 names and is worshipped daily. October is Lakshmi’s special month, “On a full moon night following Durga Puja …. It is believed that on this full moon night the Goddess herself visits the homes and replenishes the inhabitants with wealth”.2

     In what I think is a fascinating detail regarding money and Lakshmi is the custom (in many areas of India) of apologizing by the use of a hand gesture if one’s foot accidentally comes into contact with money – believed to be a physical manifestation of Lakshmi. The offending person asks for forgiveness by first touching the money in question with the finger-tips of their right hand and then touching their forehead or chest.1
Sources:
1 http://en.wikipedia.org/wiki/Lakshmi
2 http://hinduism.about.com/od/hindugoddesses/p/lakshmi.htm

Posted in Uncategorized | Tagged , , , , , | 8 Comments

Harvesting Happiness Interview Today at 11:00 am!

Posted on February 1, 2012 by jim_roberts


Hello All,
I will be interviewed at 11:00 a.m. today (CST) by a radio show (Harvesting Happiness) in California. Please find below four web sites that are promoting the interview:

http://toginet.com/shows/harvestinghappiness

http://harvestinghappinesstalkradio.com/

http://lisakamen.wordpress.com/2012/01/29/harvesting-happiness-talk-radio-welcomes-dr-james-roberts-february-1st/

http://www.hh4heroes.org/blog/

Have great day,
Jim

Posted in Uncategorized | Tagged , , , | Leave a comment