The Quest of the Simple Life: Escaping The Work Grind in 1907 vs. 2018

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The Quest of the Simple Life by William J. Dawson was published over 100 years ago; it’s so old that the copyright has expired, making the book public domain (and thus available as a free Kindle download). Yet, other than the old-fashioned writing style that required regular dictionary usage, much of the contents are perfectly applicable today! Here are some excerpts to help prove my point, and at the end I compare 1907 vs. 2018. (Any bolded parts are my doing.)

On the feeling that your family time is lacking:

Let us take the life of the average business man by way of example. Such a man will rise early, sleep late, and eat the bread of carefulness, if he means to succeed. His children scarcely know him; they are asleep when he goes off in the morning, and asleep when he returns at night; he is to them the strange man who sits at the head of the table once a week and carves the Sunday joint. It is well for them if they have a mother who possesses gifts of government, sympathy, and patient comprehension, for it is clear that they have no father. He gets a living, and perhaps in time an ample living; but does he live?

On the true cost of “Keeping up appearances”:

Money may be bought at too dear a rate. The average citizen, if he did but know it, is always buying money too dear. He earns, let us say, four hundred pounds a year; but the larger proportion of this sum goes in what is called ‘keeping up appearances.’ He must live in a house at a certain rental; by the time that his rates and taxes are paid he finds one-eighth of his income at least has gone to provide a shelter for his head. A cottage, at ten pounds a year, would have served him better, and would have been equally commodious. He must needs send his children to some private ‘academy’ for education, getting only bad education and high charges for his pains; a village board-school at twopence a week would have offered undeniable advantages. He must wear the black coat and top-hat sacred to the clerking tribe; a tweed suit and cap are more comfortable, and half the price. At all points he is the slave of convention, and he pays a price for his convention out of all proportion to its value. At a moderate estimate half the daily expenditure of London is a sacrifice to the convention or imposture of respectability.

On the cost of commuting and eating out:

In all but very fine weather I must needs use some means of public conveyance every day; there was a daily lunch to be provided; and when work kept me late at the office there was tea as well. One can lunch comfortably on a shilling or eighteenpence a day; and I knew places where I could have lunched for much less, but they were in parts of the town which I could not reach in the brief time at my disposal. Moreover, one must needs be the slave of etiquette even though he be a clerk, and if all the staff of an office frequent a certain restaurant, one must perforce fall into line with them under penalty of social ostracism. Thus, whether I liked it or not, for five days in the week I had to spend eighteenpence a day for lunch, and fourpence for teas; and if we add those small gratuities which the poorest men take it as a point of honour to observe, here was an annual expenditure of 25 pounds.

Various quotes about those who feel this certain type of “discontent”:

I saw that it was the artificial needs of life that made me a slave; the real needs of life were few. […]

The debate went on for years, and it was ended only when I applied to it one fixed and reasoned principle. That principle was that my first business as a rational creature was not to get a living but to live; and that I was a fool to sacrifice the power of living in securing the means of life. […]

My chief occupation through these years was to keep my discontent alive. Satisfaction is the death of progress, and I knew well that if I once acquiesced entirely in the conditions of my life, my fate was sealed. […]

To the man who detests the nature of his employment as I detested mine, I would say at once, either conquer your detestation or change your work. Work that is not genuinely loved cannot possibly be done well. […]

On looking back having lived his new simpler life successfully for four years:

After four years’ experiment in Quest of the Simple Life I am in a position to state certain conclusions, which are sufficiently authoritative with me to suggest that they may have some weight with my readers. These conclusions I will briefly recapitulate. The chief discovery which I have made is that man may lead a perfectly honourable, sufficing, and even joyous existence upon a very small income. Money plays a part in human existence much less important than we suppose. The best boon that money can bestow upon us is independence. How much money do we need to secure independence? That must depend on the nature of our wants.

Honestly, after finishing the book I was suspicious that it was written as some sort of strange parody, as some of the themes were so similar to what folks face today. But William James Dawson appears legit and wrote several other books during the same period. Here’s a comparison between Dawson in 1907 vs. a hypothetical person in 2018:

1907: The author worked full-time as a clerk in London, but finds himself dissatisfied with that lifestyle. He worked long hours, didn’t enjoy his desk job, and felt his health suffering in the sooty city air. He calculated that much of his expenses went to simply keeping up everyone else: higher rent, high commuting costs (time and money), paying extra to eat out with coworkers at lunch, maintaining a proper work wardrobe, and so on. He dreamed of a simple rural life. He found a small cottage in the countryside with very low rent. He fished, hunted, and farmed much of his food and paid for the rest with his earnings as a freelance writer for a local newspaper.

2018: A young woman works full-time in a large urban metro, but finds herself dissatisfied with that lifestyle. She worked long hours, didn’t enjoy her desk job, and felt her health suffering due to sitting in front of a computer all day. She calculates that much of her expenses went to simply keeping up everyone else: higher rent, high commuting costs (time and money), paying extra to eat out with coworkers at lunch, maintaining a proper work wardrobe, and so on. She dreamed of a simpler life. A small (tiny?) house or RV on a cheap piece of land. She gained income from her investments, including a rental property (Airbnb?) and stock dividends. The rest was covered with freelance work through Upwork or Elance.

Bottom line. In some ways, life hasn’t changed much in the last 100 years. Some folks will become unsatisfied enough with the commonly chosen path and take the risk of making huge changes. A simpler life with lower costs but more time with friends and family. This doesn’t necessarily mean they have the money for full “financial independence” yet, but perhaps a job more aligned with your true values where you aren’t solely maximizing income.

Thanksgiving Reader: The Power of Gratitude

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thanksreaderIt’s kind of sad when you hear the term “Black Friday Week” more often than Thanksgiving. I would like to interrupt the flow of deals to briefly connect personal finance and Thanksgiving in a different way. Seth Godin has put together something called the Thanksgiving Reader, which is a collection of quotes and stories dealing with gratitude that is meant to lift everyone up with hope and possibility.

The idea is simple: At your Thanksgiving celebration (and yes, it’s okay to use it outside the US!), consider going around the table and having each person read a section aloud.

You could also enjoy the quotes on your own, or use it as good source material for a Thanksgiving grace or prayer.

There is so much to be thankful for each day.
Today we take the time to pause and acknowledge this special season of harvest and its traditions of sharing with those less fortunate.
We take time to notice the labor of others, from farm to table, that culminates in this feast.
Today we pause to recognize how fortunate we are and to be grateful for the bounty we share with friends, family and loved ones, be they with us or far away.
– Rebecca Hale

The pursuit of financial freedom is really part of the pursuit of happiness. Research has found that expressing gratitude improves both your mental and physical well-being. In other words, it makes you happier. Here’s another good quote (emphasis mine):

Gratitude unlocks the fullness of life.
It turns what we have into enough, and more.

It turns denial into acceptance, chaos to order, confusion to clarity.
It can turn a meal into a feast, a house into a home, a stranger into a friend.
It turns problems into gifts, failures into successes, the unexpected into perfect timing, and mistakes into important events.
It can turn an existence into a real life, and disconnected situations into important and beneficial lessons. Gratitude makes sense of our past, brings peace for today, and creates a vision for tomorrow.
– Melody Beattie

Realizing that so much of what you have is enough (often more than enough) makes you content and happier. Store catalogs, TV commercials, and Instagram celebrities like to present you with visions of perfection, making you see flaws and gaps where are none. This makes you unhappy. Guess which one makes you want to buy stuff? Gratitude is an antidote to consumerism.

I always appreciate this annual reminder to truly appreciate all that the many blessings that I have. Happy Thanksgiving Week!

Man Who Lived Alone on an Mediterranean Island For Nearly 30 Years

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budelli

Financial freedom means that you can do what you want. Now consider that if you earn like everyone else and spend like everyone, you’ll end up like everyone else. This is why unconventional people are the most likely to achieve early retirement. I sometimes envy those people who are satisfied with the idea of working 9-5 under a boss until you’re 65 years old. I just can’t do it.

This is why I like reading about unconventional people. Some readers couldn’t get past the fact that Christopher Knight lived alone in the Maine woods for 27 years stole things to eat. Well, here’s a NatGeo story about a person who lived alone on an island for 28 years completely legally. Via NextDraft.

78-year-old Mauro Morandi is the sole caretaker of an Mediterranean island that became closed to tourists after being designated a National Park. He feels very strongly about preserving the island’s natural beauty. He has a job and a purpose. He gets food delivered to him every two weeks and there are limited visitors, so he is not a complete hermit, but he is the island’s only permanent resident. Still, I observed a lot of common ground between these two people who both lived alone for nearly 30 years.

  • They enjoyed the silence. “What I love the most is the silence,” Morandi says. “The silence in winter when there isn’t a storm and no one is around, but also the summer silence of sunset.”
  • They never felt lonely. Morandi says he is always surrounded by life.
  • They made peace with the idea of dying alone. “I will never leave,” Morandi says. “I hope to die here and be cremated and have my ashes scattered in the wind.”
  • They were avid readers.
  • They never got sick. Morandi says he has never gotten sick and attributes this to his good genes. Knight never got sick either, but observed that germs come from other people. If you live alone, there is nobody to spread their foreign germs to you.
  • They view themselves as a small part of the world, not controllers of the world. “We think we are giants that can dominate the Earth, but we’re just mosquitos,” Morandi says.

Here’s another NatGeo story about an off-grid commune in North Carolina, but it didn’t interest me nearly as much. Is it really living off-grid when you live off of donated food and go back into town for WiFi? Is is really a commune when only one person stays year-round? It seems more like a place where people visit and play at being “off grid” for a few months before going back their traditional lives.

More Experience = Less Complexity?

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When we had our first child, it seems like we were prepared for the apocalypse whenever we stepped out the door. Below is a visualization taken from Pinterest, while we actually had this $60 SkipHop diaper bag filled to the brim.

babybag1

Compare that with what I grabbed as my “diaper bag” for our youngest baby this morning:

babybag2

If I am going to be out for no more than a few hours, this is all I really need.

– 99 cent reusable grocery bag
butt everything wipes
– two diapers
– poop bags (also used for dogs)
– food/drink (if breast milk unavailable)

If you aren’t experienced, then you want to be prepared for every possible situation. Over time, you realize what you really need and leave everything else at home. Instead of more stuff, you are instead mentally prepared with the various improvisations you can perform in unexpected situations. (I also keep a bag in the car with an extra change of clothes for everyone.)

A similar example is packing luggage. What used to just be for “backpackers” is now for everyone. Websites about packing light abound. My first few trips, I packed myself a huge, cheap Wal-Mart suitcase at maximum-weight along with another maximum-size carry-on. Something like this:

packing1

After many flights (and an experience with delayed luggage), like many others I found myself with just a carry-on travel backpack for a month-long trip (or even longer).

packing2

I feel like this trend should apply to investing as well, but it seems like the ultra-wealthy tend to have a more complex mix of investments. Perhaps the very wealthy like to spread their money across various asset classes like real estate, private equity, and hedge funds because it reduces the chance of catastrophic loss. For example, sometimes I want to buy a rental property as it seems it would offer additional diversification to a stock and bond portfolio, but I really don’t want to deal with bad tenants or mediocre property managers.

I do like the idea of simply transferring over some of my bond interest payments and stock dividends to my checking account every month in retirement. However, a part of me is uncomfortable having so much of my net worth in investments where the only tangible evidence is paper and ink via monthly statements.

simple_rf

My Hard Things + What I’m Willing to Give Up

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myhardthingsAs a follow-up to my post on choosing your hard things, I decided to share what I came up with. Keep in my these are MY hard things. You could have the two lists completely swapped, and that would get no judgment from me. The entire point is to do things aligned with your values and stop caring what anyone else thinks!

My hard things:

  • Save enough money and set things up to live off my investment income with minimal worry.
  • Spend lots of quality time with family, especially my three daughters. (I have 3 kids?!? How the $*%# did that happen?)
  • Spend some time alone reading and thinking about things I find interesting (ex. finance, cooking, off-grid living).
  • Exercise regularly, mostly by running around outdoors with my daughters. If I’m lucky, this will also include hiking or playing tennis with friends. If I’m really lucky, I’ll be skiing.

The things I am willing to give up:

  • A steady, prestigious job and high W-2 income.
  • “Better things” like a larger house, faster car, or nicer toys/clothes.
  • Watching television.
  • Regular ski trips, partying at bars and clubs, and Las Vegas runs with friends.
  • Facebook, Twitter, and other social media.

I’m not there yet, but it’s nice to have them written down. If I’m not spending my time working towards one of my hard things, then I’m not being productive even with the newest To-Do List app, ergonomic standing desk, and pristine e-mail inbox. I should also be careful to stop doing the things on my “Give Up” list.

How To Stop Mailed Paper Catalogs and Other Junk Mail

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surlacatAs a follow-up to how to stop balance transfer checks, here’s all I know about stopping unwanted paper catalogs. Direct mail catalogs are like weeds. You unsubscribe from a bunch of them, but then later you buy someone a cast iron skillet and then – poof! – you get Sur La Table catalogs. I don’t need three different kitchen tools to remove strawberry stems, trim brussels sprouts, or cut grapes in half. I have a paring knife and opposable thumbs!

Unfortunately, there is no standardized way to unsubscribe from all or specific catalogs. Here’s what is available:

Catalog Choice. This appears to be the most up-to-date and thorough website, although you’ll have to do most of the work. Run as a non-profit that is unaffiliated with the direct marketing industry, CatalogChoice.org serves as a database that helps guide you on how to manually unsubscribe from various catalogs. They used to offer something call the Mail Stop Envelope that let you mail them the address labels from your unwanted catalogs, but they discontinued the service. They also used to have an app called Mail Stop Mobile, but that is also gone. Sigh.

National Do Not Mail List. You can add your mailing address to the National Do Not Mail List run by DirectMail.com here.

We can use our vast direct marketing expertise to get your name off of those lists. As direct marketers ourselves, we know that mail-order companies don’t want to waste their money sending mail to people who don’t want to receive it.

DMAChoice.org. This is the big one. According to their website, “DMAChoice.org is an online tool developed by the Direct Marketing Association to help you manage your mail.” However, the Consumerist warns us that Direct Marketing Association’s Opt Out Website Is A Joke and may not fulfill its promises. While writing this post, their website didn’t even load half the time. It’s still worth a shot.

Other Direct Mail lists. Other direct mail lists that you can opt out of include ValPak and RedPlum Mail.

Phone books / Yellow Pages. You can opt out at both Dex Media and YellowPagesOptout.com to finally end delivery of those huge phone books.

Paper Karma app. I discovered Paper Karma a couple years ago, but I never could really tell if it worked or not since it takes months for catalogs to actually stop coming. The app store reviews indicate hit or miss success as well. Recently, I received reports that new users were being asked to pay $20 per year. That’s too bad as the fact that you just take a smartphone picture of the address label makes it so appealing. I just snapped another address label picture using their app (December 2016) and it went through without asking me to pay, but perhaps I am in some sort of grandfathered free account (or they give out a certain number of freebies?). If you can get it to work for free, this may also be worth the effort.

Playing “Fill-In-The-Blank” Mad Libs with Financial Buzzwords

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madlibscoverAfter you spend enough time consuming financial media week after week, you start seeing patterns in the noise. I understand why of course, as creating content to feed the beast can get quite exhausting. But hopefully, by pointing out these out, you as an individual investor can realize that there may or may not be any substance behind the marketing buzzwords and short-term forecasts. Entertaining? Yes. Useful and actionable? Much less likely.

A good analogy would be with the classic word game Mad Libs, where “one player prompts others for a list of words to substitute for blanks in a story, before reading the – often comical or nonsensical – story aloud.”

Here’s how the usual “Profile of successful mutual fund manager” article usually goes. I am paraphrasing myself in 2006.

[Name of recently successful mutual fund manager] may not look the part, but at the helm of [formidable sounding firm], his [mutual fund name] has outperformed its benchmark by [big number]% annually over the past 5 years. The key is to [something skill-based like “on-the-ground” human research or complex computer algorithms] and also [something classic like “long-term perspective” or “focus on the fundamentals”]. As a result, the manager says that people should [something vague and simple for the Average Joe investor].

There are also the marketing materials coming directly from the firms themselves. Here’s an actual quote taken from a 2008 fund brochure. I’ve bolded the buzzwords for your convenience:

The OIM Core Plus Fixed Income strategy is rooted in the idea that individual security selection produces the best opportunity for risk-adjusted excess returns over time. Through an extensive, bottom-up research process, our portfolio management team focuses on optimal bond selection of investment grade corporate bonds, mortgage-backed securities, US Government Treasuries and taxable municipal bonds. The team employs a tightly controlled duration discipline and closely manages all portfolio risk factors. The portfolio management team’s objective is to produce predictable, consistent excess returns net of fees over the Barclay’s Capital Aggregate Bond Index.

The Oppenheimer Core Plus fund was supposed to be very conservative and was marketed to those with children within 5 years of college. What happened next? It proceeded to lose 38% of its value in 2008, while the fund’s benchmark actually rose 5.24%.

Barry Ritholz probably digests more financial media than 99.9% of folks out there, and in a recent WaPo article he pretty much nails the average CNBC guest who gets the question “Where’s the Dow going to be in a year?”:

“Our view is that the economy in the U.S. continues to _______, and we foresee _______ problems overseas ______. China is _______, and that has ramifications for the Pacific Rim’s ______. Greece is ______ in Europe. The commodity complex is causing _____ for emerging markets. But many sectors of the U.S. economy remain _______, and some sectors overseas are still _______. The valuation issue continues to be _____, and that means _____ for investors. That has ramifications for corporate profits that will be ______. We think the economy is going to do ______, and you know that means inflation will be _____, which will force interest rates to ______. Under these conditions, the sectors most likely to benefit from this are ______, ______ and ______. The companies best positioned to take advantage of this are ____, ____ and ____. Based on all that, we especially recommend an overweight allocation to ____, ____ and ____. Thus, we believe the Dow will be at ______ next year.”

There are good mutual fund managers, good financial reporters, and good hedge fund managers out there trying to do the right thing. But the problem is that when you see such meaningless words and phrases, you just can’t tell if they are good or bad. Next time you watch CNBC, Fox Business, or Bloomberg TV, see if you can match up the blanks and buzzwords. Thanks to reader CJ for the Ritholz article tip.

My Financial Account Tidying Up Checklist

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kondoI suppose it’s not a good sign that in the middle of reading a #1 NYT bestselling book on organizing your stuff… you lose the book in all your stuff. In case you haven’t heard of it yet, The Life-Changing Magic of Tidying Up: The Japanese Art of Decluttering and Organizing by Marie Kondo. In my defense, it is a rather small book. I hope I don’t have to buy another one.

Instead of spending more time looking for it, I decided to make a list of all my financial items that could use some decluttering. As someone who loves to try out new financial products, I tend to accumulate accounts in during bouts of enthusiasm. Part of the “Kondo-ing” process is going through things by categories (i.e. clothing) and not moving onto another category until you’re done. Most importantly, you should only keep things that “bring you joy”. Hmm… how about “bring me profit”?

Bank accounts

  • Close out inactive bank accounts which are unlikely to offer good interest rates or other benefits in the future.
  • Re-examine all automated transfers (direct deposit, 401k contributions, 529 contributions, auto billpay, etc).

Investment accounts

  • Close out idle brokerage accounts.
  • Merge all speculative activity into one brokerage account.
  • Consider liquidating all positions smaller than a certain size.
  • Merge smaller 529 plan accounts and/or change beneficiaries.
  • Check up on LendingClub and Prosper P2P lending accounts. These should be nearly wound down.
  • Check up on Patch of Land crowdfunded hard money lending account.

Credit card accounts

  • Close out accounts which will not justify the annual fee based on my planned activities for the next year. Decide ahead of time which ones to keep if they offer to waive the annual fee for another year.
  • Mark on calendar any special perks or benefits which still need to be used.

Gift cards

  • Redeem Visa/Mastercard/AmEx prepaid cards into Amazon gift card credit.
  • Think of ways to use up retail gift cards; add to calendar to be finished next two weeks.
  • Decide what to do with unused retail gift card. Sell at loss? Wait until year-end 2015 and use for gifts?

Not-going-to-do list

  • I still haven’t gone paperless and have no immediate plans to do so, but I already have a pretty good system for organizing my paper statements.
  • The same system already has me examining all expenses on a monthly basis.
  • I’m happy with my core investment portfolio. Relatively clean and simple.
  • I don’t have any old 401k or IRA balances floating around. We have an active 401(k) at Schwab PCRA, Solo 401(k) at Fidelity, and IRAs at Vanguard.
  • I’m happy with our core monthly cashflow setup. We combine finances and have one joint checking account where we deposit a set amount each month and pay all bills from that account. We make additional transfers if we have larger one-time expenses like a new roof or something.

I’ll try to update as I work through this list.

Financial Freedom and The Parable of the Mexican Fisherman

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mexfishIn the rush of our everyday lives, it’s easy to lose sight of the real reasons why we work and toil every day. Money is a tool, not the end.

I’ve seen several versions of this parable in various books and blog posts (like here and here), but haven’t been able to pin down the original source. Here’s my favorite variation:

An American investment banker took a vacation to a small coastal Mexican village, on doctors orders due to his stress-related health problems. Unable to sleep, he took a walk along the pair and saw a small boat with just one fisherman docked. Inside the small boat were several large yellowfin tuna. The American complimented the Mexican on the quality of his fish and asked how long it took to catch them.

The Mexican replied, “Only a little while.” The American then asked why didn’t he stay out longer and catch more fish? The Mexican said he had enough to support his family’s immediate needs. The American then asked, “but what do you do with the rest of your time?”

The Mexican fisherman said, “I sleep late, fish a little, play with my children, take siestas with my wife, Maria, stroll into the village each evening where I sip wine, and play guitar with my amigos. I have a full and busy life.” The American scoffed, “I am a Harvard MBA and could help you. You should spend more time fishing and with the proceeds, buy a bigger boat. With the proceeds from the bigger boat, you could buy several boats, eventually you would have a fleet of fishing boats. Instead of selling your catch to a middleman you would sell directly to consumers, eventually opening your own cannery. You would control the product, processing, and distribution. You would need to leave this small coastal fishing village and move to Mexico City, then LA and eventually New York City, where you will run your expanding enterprise.”

The Mexican fisherman asked, “But, how long will this all take?”

To which the American replied, “15 – 20 years.”

“But what then?” Asked the Mexican.

The American laughed and said, “That’s the best part. When the time is right you would announce an IPO and sell your company stock to the public and become very rich, you would make millions!”

“Millions – then what?”

The American said, “Then you would retire. Move to a small coastal fishing village where you would sleep late, fish a little, play with your kids, take siestas with your wife, stroll to the village in the evenings where you could sip wine and play your guitar with your amigos.”

I also use this story to remember to live and enjoy things now and not focus solely on the future.

Image credit: gogeid of Flickr

Paperless vs. Paper Statements

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scansnap

Pictured above is the Fujitsu ScanSnap iX500 Scanner. It can digitize a page every 2 seconds, and some version of it has been on my Amazon Wishlist for many years. However, I still haven’t plunked down 400 bucks for it, because I don’t know if I’ll ever go completely paperless.

There are many tutorials on how to scan all your paper documents into Dropbox or Evernote. Liz Weston recently had a Reuters article about going paperless with tax-related documents:

I don’t make New Year’s resolutions. Instead, I resolve every tax season to get a better handle on my paperwork — with mixed results. This year, I turned to three certified public accountants to find out what apps, software and strategies they use to keep track of everything.

Kelley Long, a Chicago CPA and personal financial specialist, tries to generate as little paperwork as possible, opting for electronic records instead. “The IRS accepts electronic records,” said Long, resident financial adviser with Financial Finesse in Chicago. “There’s no need to keep paper. That’s the one thing they’re modern about.”

Long keeps a folder on her computer desktop for the current year’s tax documents. If a document comes to her in paper form, she scans it, saves it in the folder and shreds the original. She converts emails documenting charitable contributions and other tax-related expenses into PDF files by choosing the “print” function and then “save as PDF.” […] At the end of the year, she downloads her bank and credit card statements into the folder.

But then Reader Bill sent over this Clark Howard article about the benefits of paper statements:

If you think about all the companies you do business with, they all try to get you to turn off paper statements. If you’ve done so, I want you to turn that around and go back to getting statements in the mail.

With a paper statement in hand, it’s easier to prove that you had the money in the first place in the event funds go missing. If you are set up for electronic info only, well, that’s going to hurt. So the best precaution I can give is for you to go back to getting the paper.

So, which is safer? In my opinion, for most things they are equivalent. Paper statements can be lost, stolen, or destroyed (i.e. house fire). Electronic statements can be lost, hacked, or destroyed (i.e. hard drive crash). You can protect yourself with redundant copies of either one (i.e. safe deposit box, extra USB drive, cloud backup). Keeping a nice long history of either paper or paperless statement can help you prove ownership or status of assets. Indeed, the IRS accepts electronic copies as equivalent to paper, so why shouldn’t we?

(I would agree with the implication that those repeated calls for you to “go paperless” are less about eco-friendliness and more about saving printing and mailing costs. I am also curious to know if credit card companies have found that paperless statements lead to more missed payments and thus more interest and late fees. It certainly is less wasteful, though.)

The safest thing would be to keep both. In the event of some Fight Club-esque event where the digital records of your assets are lost, paper statements might help. In the event of some local disaster where my home and my bank is destroyed, then digital records in the cloud would be helpful. (It may be a good idea to read up on file encryption.)

What do I do? I maintain regular paper statements for my most important financial accounts. That’s basically my primary IRA, 401(k), brokerage, checking, and savings accounts. The main reason for the statements is that I am in charge of family finances, and if I am injured or worse, then my spouse will be able to track everything simply by opening up the mail (plus other estate documents). I also keep paper copies of our monthly bills coming in for the same reason. I still enjoy my ritual of sitting down with physical bills and paying my bills (online) once a month as I use the opportunity to review our monthly spending. Important statements are sent to a P.O. Box instead of my house to reduce chance of theft and protect privacy.

I also have several other financial accounts that are either dormant, temporarily opened for reviews or experiments, or have low balances. Those are all set to paperless and tracked online by Mint.com. I’d rather give Mint my passwords and keep a virtual eye on all of them, rather than the likely alternative of never checking in on them at all.

Get Rid of Second Car and Use Uber Instead?

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uberiphone5Forget borrowing money to buy a car, the concept of owning a car itself is changing. Owning a car requires committing to a long list of expenses:

  • car payment and value depreciation ($1,000+ a year)
  • car insurance premium ($500+ a year)
  • fuel costs ($600+ a year)
  • government tax, registration, and fees ($300+ a year)
  • maintenance and repair costs
  • parking, traffic tickets, and tolls

In rough terms, owning a car runs at least $3,000 a year with most people spending more than $5,000 a year. Consumer Reports calculates the median at $9,000 a year over the first 5 years for new car buyers.

As a couple with two cars, I’ve been thinking about trying to get by with one car in the household. Even besides public transit, consider all the car-based options that may be available:

  • Renting a car, but driving ourselves. (ZipCar, RelayRides)
  • Being driven around by other people who rent or own cars. (taxis, Uber, Lyft)
  • Being driven by autonomous robotic cars. (Google or major auto company)

After recent positive experiences with Uber and reading about the advancements in self-driving cars, I now believe that within the next 10 years we will shed at least one car. (I doubt I would want to go completely carless with two kids and all their activities.) Some food for thought on the subject:

  • With Uber, Less Reason to Own a Car – Farhad Manjoo at NY Times.

    “In many cities and even suburbs, it’s becoming much easier to organize your life car-free or car-lite,” said David A. King, an assistant professor of urban planning at Columbia University who studies technology and transportation. By car-lite, Dr. King means that instead of having one car for every driver, households can increasingly get by with owning just a single vehicle, thanks in part to tech-enabled services like Uber.

  • A Financial Model Comparing Car Ownership with UberX (Los Angeles) – Kyle Hill at Medium.

    So there you have it… for the average American who drives 13,476 miles per year, owning a motor vehicle will cost them $12,744 per year to maintain, and the cost of taking UberX everywhere will cost them $18,115 per year. However, Americans who drive less than 9,481 miles in a year should seriously consider ditching their car, because UberX will be cheaper.

  • How Do Car Ownership Costs Compare to Uber? – Uber Blog.

    The math doesn’t lie. In a city with with a fast, practical (and cool) alternative like Uber, it would very much be worth your time to crunch the numbers and see how much you’re really spending on your gas, parking, maintenance, etc. and how much time you spend doing those things. Because having your own personal driver pick you up in a slick car each and every day is a hell of an appealing alternative.

  • Uber vs Car Ownership – Sam Altman.

    Taking uberX everywhere is now cheaper for me than owning a car (I have an expensive car, so it’s not a super fair comparison, but I still think it’s interesting).

Of course “the math” depends on where you live and how you drive, but even small to medium cities will be affected. Uber now has UberFamily (car seats) and UberPool (multiple passengers heading the same direction). Now look at self-driving car technology. If I buy a self-driving car, that’s really just another convenience/luxury that costs me more money. But what happens when Uber and Lyft don’t have to pay drivers? (Robots taking jobs again!) Fares will drop even further.

PaperKarma App: Take A Photo Of Your Junk Mail and Say Goodbye

“The editorial content on this page is not provided by any of the companies mentioned, and has not been reviewed, approved or otherwise endorsed by any of these entities. Opinions expressed here are author's alone.”

pkappI totally missed this app the first time around, but PaperKarma is an iPhone/iPad app and Android app that helps you stop junk mail. Catalogs, magazines, coupon books, flier, credit card offers, yellow books, etc.

You just snap a photo of any piece of unwanted mail, and that’s it. (Try to capture the address label and any tracking codes.) They scan the photo, grab the pertinent details, and contact the mailer directly to remove you from their distribution list. They’ll even contact you when you are successfully unsubscribed. For free. That sounds almost too good to be true.

Previously, I’ve had success with the websites CatalogChoice.org to stop unwanted catalogs and YellowPagesOptout.com to finally end delivery of those huge phone books (both free as well).