12 Sep 2011

A Bald Economist Gives Financial Advice to Young People

Shameless Self-Promotion 18 Comments

That was my original title, but the suits in Auburn toned it down. An excerpt:

It seems counterintuitive, but when a religious person tithes (or when a nonreligious person gives to charitable causes) there is somehow more money each month to work with. For tithing — where a person is supposed to give a specific percentage of income to the church — I think it’s because the practice forces a person to stay on top of his finances.

More generally, by focusing attention away from oneself, things become clearer and it’s easier for a person to do the “responsible” things like avoiding impulse purchases and doing the extra work needed to bring in more income.

This last point is crucial for people who are suffering from depression and are in a financial hole. Part of what keeps them there is that, deep down, they don’t think they deserve to live stress free like the other people they see around them, who somehow have their act together and don’t let bills pile up on the kitchen table. By bringing in the church (or a charity that the person really respects), the depressed and financially beleaguered person can stop dwelling on self-loathing and instead focus on helping others.

18 Responses to “A Bald Economist Gives Financial Advice to Young People”

  1. Raja K says:

    You don’t have TV?! What do your kids do?

    • Joseph Fetz says:

      I grew up on TV. But, for the 4 years that I was in the military I never had time to sleep much let alone watch TV. When I got out and tried to watch TV, I just couldn’t do it. Though, when I work out of town and live out of a hotel room, I do watch Family Guy and Tosh.O.

  2. Scott says:

    I lost my TV in grad school, too (well, a little after, actually. It died of atrophy — I got tired of moving a thing I didn’t use). It’s great and I haven’t looked back. You also save the cable bill.


  3. AP Lerner says:

    Saving more is great advice. Well done. You should have included this chart in your piece to further bring home the point.


    • Giovanni P says:

      you’re kidding, right? this is just a mirrored image, not real data.

      • AP Lerner says:

        Real data that can be found at the bea website. The fact that is a mirror image is the point. public deficts = private savings, to the penny. All day, throughout history.

    • bobmurphy says:

      AP, do I detect sarcasm? If you’re saying, “It’s dumb to tell people to save more, since private saving is just the flip-side of a gov’t deficit,” then you will undermine all the hard work Mosler et al. have been doing in criticizing the Tea Party. But that wouldn’t surprise me I guess.

      • JimS says:

        But saving does not necessarily mean money in the bank. Your money may be saved in metals, or in my case cattle, or tools; these things are saleable and can also produce income. I have four streams of income. The only debt I carry is a student loan and how I hate that. I will never incur debt again. I have a TV but it gets nothing. I use it to watch dvds on occasion.

        The two main things about NOT watching tv is it frees up a lot of time and, most importantly, you are not caught in the rut of main stream thought. If you read classical rhetoric or critial writing and stay away from tv, you will come to view the world in a way very different than the tv mob. You will also be far less likely to be caught up in mainstream bs.


      • Desolation Jones says:

        I think he’s saying savings is good (not sarcastically) so the government should provide more through deficits.

        • AP Lerner says:

          Yup yup…thanks!

      • Daniel Hewitt says:

        AP Lerner is just saying that if we all saved more, the government could run a deficit and bring about recovery.

        Jeez, he’s only trying to help.

      • AP Lerner says:

        When I said ‘Saving more is great advice. Well done’ I was not being sarcastic at all. If it came across that way, my apologies. I think it’s very smart and admirable to encourage more savings. I am all aboard. But it would be a more complete lesson to explain where those savings come from, hence including the chart in your lesson.

        “But that wouldn’t surprise me I guess”

        Now are you being sarcastic? 🙂

    • Bala says:

      Geez!! I wonder how people saved before governments came along and started building deficits. Any enlightenment, AP?

  4. Silas Barta says:

    I’m going to tithe to the Singularity Institute (maybe).

  5. John Dougan says:

    Interesting. That’s part of the reason I regularly support Kickstarter projects. I like the idea of helping a new business to have a debt free startup.

  6. Desolation Jones says:

    Get rid of your TV? Now I know for sure Austrian economics is bunk!

    Okay, okay, technically you can still watch television programs on your computer as mentioned (as I do actually). But still… The general message I got was to start watching less TV. That’s bad advice. It’s no coincidence that Murphy stopped watching TV when it was generally awful. The problem is that he stopped watching TV exactly around the time TV started to become awesome. The last decade saw the advent of top quality serialized dramatic television and it has recently gotten even better. Sadly, the best is shown on cable and on premium channels, but that’s what DVDS and the internet is for. I rarely watch movies anymore unless someone really wants to. TV is just so much better. You don’t know what you’re missing out on. Deadwood, The Wire, Dexter, Breaking Bad, Rome, Battlestar Galactica (the new one), Game of Thrones, Carnivale, etc..

  7. Jeff says:

    I liked your original title better. 🙂

  8. David S. says:

    You’re sure as hell not a psychologist either. I await a post and/or article about gold prices reflecting expected real interest rates.