Every day it becomes increasingly clear that the Great Recession marks the beginning of a a New World Economic Order. And with the new comes an end of many parts of the old. Some will not be missed. (E.g. no-doc mortgages, investment banks, Circuit City.) Others will be missed by the nostalgically 
inclined. (Newspapers that actually print on paper, the Big Three Automakers, movie theatres.)
And last week Free Money Finance brought sad news of another part of our culture that is disappearing. Maybe The Latte Factor is Now Less of a Factor? Apparently, caffeine vendors from Starbuck to McDonald’s are now cutting prices, meaning that doing without your morning fix just isn’t the compelling savings it once was.
Not that it was really ever that compelling. Indeed, I am saddened by the news because The Latte Factor® is such an excellent example of symbolic frugality that I will miss it. Realizing that this may be my last chance to take it out for a spin, here goes.
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There was an article in the Saturday New York Times that provided further evidence of something I’ve been blathering on about here. It is what I call the Frugal Lifestyle.
Just to be clear, I have nothing at all against saving money. In fact, I have only respect for those who tightly manage their limited resources to get what they and their families need and want. The same goes for those who now find themselves in difficult circumstances and need to make very hard decisions about what to do.
What I have outright contempt for are people who pretend to save money. People who, for peculiar psychological reasons that need not be explored here, enjoy depriving themselves of small things, or spending small amounts of their time in tiresome ways, because it makes them feel good to be “frugal.” My hostility is doubled for those who have taken the current economic tragedy as inspiration to adopt the Frugal Lifestyle in the same faddish way that they might otherwise take up a new hobby or start twittering.
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I put a passing reference to The Millionaire Next Door in my post Wednesday on The Tragedy of Impulse Saving. A commenter asked about it and actually followed up to say that he would love to hear my opinion on the book. I can’t bring myself to write a proper review of a 13 year–old title, but on the flimsy pretense that one person who comments must represent thousands of silent readers who feel the same way, let me share why I don’t like it. (That’s the problem with leaving comments here, I just read what I want to.)
To start with, Millionaire Next Door is poorly written. Large sections just dump information on the reader without drawing any conclusions or giving any advice. And the authors’ choices of topics, and how much ink to use on them, is peculiar, as if they just threw together the book from notes they happened to have had lying around. So, for example, 70 pages (of 245 in my paperback copy) are spent on giving money to your children. 36 pages cover buying cars. There isn’t much of anything on buying houses. There’s a big section on selecting financial advisors, but little on investing as such.
The core advice in the 70 pages on giving money to your children is that you shouldn’t give money to your children. Not only will it make you poorer, but it is bad for the kids. They will amuse themselves by spending it and not learn to be frugal like you. The authors cite data that shows that adult children who get money from parents are in general poorer and argue that giving your kids money will have the opposite of the intended effect. Unremarkably, they do not consider the possibility that maybe those children got money from their parents because they were poorer, not the other way around.
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As any reader of this blog knows, I enjoy nothing more than tweaking the nose of personal finance conventional wisdom. Well, joy of joys, yesterday’s New York Times had an article, in the science section no less, that spits in 
conventional wisdom’s face, knees it in the groin and then kicks it as it rolls on the ground.
The piece discussed the work of Ran Kivetz and Anat Keinan, two professors of marketing from Columbia and Harvard Business Schools respectively. (Marketing professor is, incidentally, the same line of work as the authors of The Millionaire Next Door.) They have discovered a new malady to avoid: saver’s remorse. It’s just what it sounds like: that sad feeling you get with money in your pocket that you could have spent in some enjoyable way but, in a moment of weakness, chose to save.
This is just so awesome.
The sober professors don’t call it saver’s remorse. I think John Tierney, The Times’ science guy, came up with that. They use the term hyperopia, literally excessive farsightedness. Sufferers of hyperopia “deprive themselves of indulgence and instead overly focus on acquiring and consuming utilitarian necessities, acting responsibly, and doing ‘the right thing.’” (K&K 2006 p.274)
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Not much on the frugal front to report, and frankly I’m worried the Frugal Friday thing is getting a bit tired. And frugality is beginning to confuse me.
Not Made of Money picked up the Homemade Maple Syrup post I discussed 
last week as a guest post. Just in case I was being too subtle last time, what they are discussing is making fake maple syrup, which is awful stuff, and real maple syrup is very cheap to make yourself, provided you have the right kind of tree and some simple tools. (It is also, I am told, hard work. I buy the stuff in the store like everybody else.)
Not Made of Money also had a post on what has become a recurring theme here, Other Uses for Dryer Sheets. I guess I must be really missing out, because I’ve never used a dryer sheet in my life, even for its intended purpose. I guess I just assumed that a frugal person would also forgo this luxury.
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inclined. (Newspapers that actually print on paper, the Big Three Automakers, movie theatres.)
Books, Frugality, Gurus, The Big Picture | Frank Curmudgeon | 
May 19, 2009 9:00 am | 
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