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Archives for December 2014

8 TED Talks That Will Inspire You To Become A Minimalist

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Zero Inbox Emails Minimalism
Here’s a screenshot of my email account with zero emails! Happens twice a year. 🙂

I call myself a “frequently failing, but always aspiring minimalist.” There’s a powerful consumer drive inside of me, but I work effortfully to reduce its hold. Sometimes that means going to a store and picking up an item — temporarily — and then returning it to another shelf. I can be captivated by new things — quickly dreaming of what happiness they could bring.

When I’m really struggling to save money and stay minimalistic, I return to some favorite role models’ messages. The following are 8 of my favorite TED Talks on the subject of minimalism, living with less, and learning to love yourself in the process. Hope you enjoy!

1. Jon Jandai: Life is easy. Why do we make it so hard?

2. Mark Boyle: The Moneyless Man

3. Graham Hill: Less stuff, more happiness

4. Grant Blakeman: Minimalism — For a More Full Life

5. The Minimalists: A rich life with less stuff

6. Adam Baker: Sell your crap. Pay your debt. Do what you love.

7. Angela Horn: The Less You Own, the More You Have

8. Amy Henion: How can tiny houses offer the ultimate freedom to our generation?

Frugal Articles of the Week

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Reading Nook Photo

Today I wanted to feature a few frugal articles that caught my eye this week. Curl up in your favorite reading nook and enjoy. Hopefully these encourage you to live frugal lives!

The Cheapest Generation by Derek Thompson and Jordan Weissmann
While this article was actually published a couple years ago in The Atlantic, I just recently read it. It catalogues the many challenges that major companies are facing from Millennials. Companies like Ford are getting desperate, as the latest generation refuses to buy cars at the rate of their parents. While a clever title — “The Cheapest Generation” — I found it to be inherently pessimistic. Instead of being the cheapest, Millennials could be considered the most “green,” “eco-friendly,” “budget-conscious,” and more.

Flowchart: Should I buy this? by Callie Enlow
Good Magazine has been a leader in publishing articles about environmental, political, and socioeconomic issues. In this latest feature, Callie Enlow created a flowchart to show readers what they should and shouldn’t buy — to provide a roadmap. It’s worth your time, especially during the holiday season.

A Big Safety Net and Strong Job Market Can Coexist. Just Ask Scandinavia. by Neil Irwin
Here’s a politically controversial topic that looks at the high-tax Scandinavian countries. In America, we tend to assume that the more capitalist our economy is, the better we all perform. In reality, the evidence regarding these “free market” principles can be somewhat dubious. Neil Irwin masterfully presents a basic thesis: high-tax countries actually have lower unemployment rates.

The Opportunity Cost of Parents Leaving Their Village by Femme Frugality
Femme Frugality is an inspiring author and parent, who talks honestly about family dynamics and home life in her latest article. Femme provides insight into the pressures put on families — financially and psychologically. Despite these pressures, she emphasizes the powerful opportunity for collective action and shared help. It’s worth a read!

How Media Makes More Money Publishing About Fake Self-Made Millionaires, Whiz Kids

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Whiz Kid Story in New York Magazine
New York Magazine Article on a “Whiz Kid”

At the spry young age of 15 and 16, I began trading stocks. I read Jim Cramer’s autobiography and was inspired by his love of markets. Memorizing the two, three, and four-letter tickers for major companies provided a unique joy; frankly, I’m not sure why. I loved watching CNBC and seeing the symbols dance up and down like a permanent Christmas tree of green and red.

Every now and then, a story would catch my eye. It was someone like me; passionate about the markets, but they were making boatloads of cash. They made me jealous, and I wondered how I could emulate their success.

That was until I realized most were fake, underreported, and often, downright lies. These were hardly the role models I should’ve been following. Today, I wanted to point out a few recent stories that highlighted frauds — willingly and with seriously piss-poor reporting.

The already-rich, “self-made” millionaire

Anton Ivanov was a serial entrepreneur and personal finance blogger for years. I had multiple conversations with him after starting Frugaling. To avoid anything slanderous, I’ll just say that I planned on never working with him. Something just didn’t make sense about his riches and efforts in the personal finance world.

Then, shortly before his 27th birthday a slew of stories were written about Ivanov. He even wrote an article for the occasion in one of my favorite personal finance sites, Budgets are Sexy. Yahoo Finance interviewed him to discover how he had succeeded to save, invest, and make wealth in record time.

Being a 27-year-old, self-made millionaire is a unique club that’s generally reserved for entrepreneurs and young tech whiz kids. The Internet has enabled a new generation — Millennials — to see millions and billions in record time with the sale of apps and sites.

Ivanov reported that he did it with old-fashioned hard work and dedication. Remarkable! His advice centered on a few steps: set clear and actionable goals, track net worth, save more income, avoid consumer debt, have an emergency fund, save for large expenses, and invest.

Yahoo Finance reported that Ivanov had successfully entered the workforce at a young age, started hustling at a young age, and then got into the real estate game. The article is filled with blasé quips like,

“He hopes to own at least 10 properties by the time he hits his 40s, but he’s in no rush.”

See, it’s not that his advice was fraudulent and questionable. The heart of the problem was that he wasn’t actually a “self-made” millionaire (as if anyone magically prints money themselves). Here’s what Yahoo Finance then wrote,

“Since the publication of this story on Nov. 4, new details have come to light which have made Anton Ivanov’s claims of becoming a self-made millionaire highly suspect. On Monday, Ivanov admitted to Yahoo Finance that 75-80% of his wealth consists of an inheritance that was left to him by his parents, who died several years ago.”

This kid made $72 million… From his parents

Ivanov isn’t the only fake “success story.” New York Magazine found a “whiz kid” that supposedly made millions trading stocks on his “lunch hour.” It was the ultimate viral article. With a catchy title that spoke to ridiculous riches — $72 million made from trading — and a young man looking to become a hedge fund manager.

Mo Islam was a 17-year-old kid who had already been profiled by Business Insider, as a “20 under 20.” He was going somewhere in life because of his vast wealth creation. Islam supposedly started buying penny stocks — over the counter and paper-based companies that don’t necessarily trade on the major exchanges. These stocks vary greatly and are dangerous for 99.99% of investors to even think about.

The penny stocks didn’t pan out, so Islam swiftly switched to oil and gold. That’s when New York Magazine says he struck bank account success. He quickly amassed about 8-figures of wealth.

If the story is unbelievable and astonishing, it might just be unreal and manufactured. Only a couple days later, every major media outlet was discrediting the kid and New York Magazine’s story. It was all made up, and while the “whiz kid” did have a large bank account, it is because very wealthy parents.

The media is rewarded for good, fake stories

Over and over again, false stories are reported in the media. They used to make me envious for their success. I thought, “Wow! If they can do it, why can’t I?” Well, there was an essential distinction between them and me — lots and lots of money to start. Both Ivanov and Islam started with wealth that was either inherited or given to them. The trading, saving, and investing that came afterwards didn’t essentially make them rich — it just added to their earnings.

These weren’t the mythical “self-made millionaire” and “whiz kids.” No, they were privileged with familial riches. Today I’m writing this story, not to further discredit these two people, but to highlight the severe media mismanagement and horrific reporting that was associated with both stories (and many others I don’t have time to cover).

With each story, the media outlet claimed that the individual told them that he had made boatloads of money. With each story, they reported that claim without properly vetting the source. And with each story, the media outlets made vast advertising dollars in spite of their errs. In fact, they made even more than they would’ve if they honestly vetted and reported the stories!

Ordinarily, these people are singular stories — one-hit wonders. They’re popular for a little while and then the media company moves to the next story. They make money from that one story, but here’s the genius: if they get it wrong, there’s at least two stories to come!

Here’s how you make more money as a news company by reporting fraudulent stories:

  1. Publish a poorly vetted story
  2. Make money from visitors to the “incredible” story
  3. Receive harsh critique and censure from observers of the story, which sends a surge to the original article
  4. Make more money from visitors to the “incredible,” fraudulent story
  5. Publish a story highlighting the “truth” regarding the “self-made millionaire”
  6. Make even more money from visitors to the “incredible truth” about the fraudulent story

All the while, media outlets work diligently to discredit the source, while excusing the journalist’s poor reporting. And meanwhile the mythical narrative of the “self-made millionaire” continues, stubbornly. The narrative doesn’t change, despite the blow to accuracy. Everybody wins when the narrative stays the same, right?

What do you think, can people actually be “self-made” millionaires? What’s the best way to make and build wealth? Is there actually one-size-fits-all advice that works for everyone?

Picture The Life, Not The Millions You Want

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Rich Kids of Instagram photo
Photo: Rich Kids of Instagram

There’s a powerful allure to the “self-made millionaire.” Across vocations and incomes, some of the most viral and popular articles in the personal finance world provide how-tos to readers. And if they’re not step-by-step guides, articles tend to showcase people who’ve succeeded in their path to great financial success.

The lesson is simple: watch and learn. View a role model, and copy the steps to success. Seemingly, this is propagated as a convenient and regular method for monetary gain. Unfortunately, every individual is different — from intelligence to net worth to credit rating. Each of these factors can influence your ability to hustle and follow in these role models’ footsteps.

Too frequently, affording a lifestyle is purely linked to income and wealth. That goal of riches seems empty to me, what do you think? What if we reversed this strange paradigm and reviewed the life, rather than money, we want?

Today I wanted to introduce a new method for success that downplays the millionaire status for something more lasting and rewarding. The following are 5 key elements for a fulfilling and happy life, and may just provide the riches along the way!

Photo Rich Kids of Instagram
Photo: Rich Kids of Instagram

1. Freedom. This is continually at the top of the heap for financially savvy worker bees. Freedom allows for free time, family time, and fun time. Often, more work and income are seen as the pathways to this goal. This ironically can propel us further from freedom and enter into a vicious work-cycle that only perpetuates our desire for more down time. When we scrub away goals of financial riches, freedom and time become crystal clear. Reduce any discretionary spending (if possible), and you’ll suddenly see more money in your pocket — all while maintaining and/or reducing time spent working. Now, you can read that book with your newfound free time (just make sure to check it out of the public library)!

2. Autonomy. People love choice and independence. Heck, as children, our first words are usually “yes” and “no” (right after “mom” and “dad”). We are born, bred, and instructed in the world of autonomy. Imagine for a moment the toothpaste aisle. Can you picture all the options, rows, columns, and sale items? Every time I walk by the toothpaste I’m bombarded by the variations — uncertain where my money is best spent. With more money, we get more choice. With riches, we are able to choose grander items — upgrading from a Ford Pinto to a BMW 7-Series. But this is the unfortunate influence of massive advertising dollars. Will the BMW 7-Series make a fundamentally whole and self-actualized person? Unlikely. And that brings us to the original point of this list: fulfillment. Let’s make fulfilling decisions that last, not spontaneous purchases that fill wants and cravings.

3. Self-worth. The things we own tend to say a lot about us. There’s actually a professor, Sam Gosling, that wrote a book called Snoop: What Your Stuff Says About You. He points out some pretty self-explanatory conclusions about your living spaces. Your home represents you, and can often provide a sense of self-worth. Remove your items, and who are you? Really, I mean it… Without your iPhone, Macbook Air, furniture, photos, and material goods, tell me about yourself. Can you do it? I bet you can, because your self-worth and personhood is bigger than anything you own. After years of shopping sprees and poor financial planning, I realized that once I stopped spending wantonly, my self-worth soared. This is an intrinsic trait that requires inner worth and work — your bank account will never provide true self-worth.

Photo Rich Kids of Instagram
Photo: Rich Kids of Instagram

4. Health/Safety. There are countless examples of wealthy people having bodyguards and security teams. Their money is frequently seen as a path to safety. But this is comically out-of-whack, as the wealthier you become, the more threatened you may feel. Frankly, the stories of billionaires being kidnapped for ransoms should scare anyone. What this tells us is that there’s a middle-ground for wealth and safety. The safest and healthiest levels seem to center on getting your health needs met and living in a proper shelter. Again, this doesn’t require millions.

5. Companionship. I dream of hosting lavish parties in a loft apartment; preferably, encapsulated in the clouds with glass windows. Something modern to look out at the world. What my heart and head is really getting at is a desire for friends and companionship. It speaks in funny ways, when it desires these simple pieces of fulfillment. Companionship and connection with other people is fundamentally human — we are social creatures. But money isn’t necessarily required for that. Sure, you may not look like the Rich Kids of Instagram, floating on a yacht full of tanned 20-somethings, but there are people who care and will be around when the going gets tough; again, regardless of the digits in your bank account.

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